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As filed with the Securities and Exchange Commission on April 23, 2007

Registration Number 333-141142

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

AECOM TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)

Delaware   8711   61-1088522
(State or other jurisdiction of
incorporation or organization)		   (Primary Standard Industrial
Classification Code Number)		   (I.R.S. Employer
Identification No.)

555 South Flower Street, Suite 3700
Los Angeles, California 90071
(213) 593-8000
(Address of principal executive offices, including zip code and telephone number)

John M. Dionisio
President and Chief Executive Officer
AECOM Technology Corporation
555 South Flower Street, Suite 3700
Los Angeles, California 90071
(213) 593-8000
(Name, address and telephone number of agent for service)

Copies to:

Jonathan K. Layne, Esq.
Gibson, Dunn & Crutcher LLP
2029 Century Park East
Los Angeles, CA 90067
(310) 552-8500		   Eric Chen, Esq.
David Y. Gan, Esq.
AECOM Technology Corporation
555 South Flower Street, Suite 3700
Los Angeles, CA 90071
(213) 593-8000		   J. Scott Hodgkins, Esq.
Steven B. Stokdyk, Esq.
Latham & Watkins LLP
633 West 5th Street, Suite 4000
Los Angeles, CA 90071
(213) 485-1234

        Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

Title of Shares to be Registered
   Amount to
be Registered(1)
   Proposed Maximum
Offering Price
Per Share(2)
   Proposed Maximum
Aggregate Offering Price(2)
   Amount of
Registration Fee
Common Stock, $0.01 par value   40,422,500 Shares   $20.00   $808,450,000   $24,819(3)
(1)
Includes 5,272,500 shares that the underwriters have the option to purchase to cover over-allotments, if any.

(2)
Estimated solely for the purpose of computing the amount of the registration fee, in accordance with to Rule 457(a) promulgated under the Securities Act of 1933.

(3)
$8,855 previously paid.

        THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we and the selling stockholders are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated April 23, 2007

PROSPECTUS

35,150,000 Shares

LOGO

AECOM TECHNOLOGY CORPORATION

COMMON STOCK

        AECOM Technology Corporation is offering 19,906,129 shares of common stock and the selling stockholders are offering 15,243,871 shares of common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering and no public market currently exists for our shares. We estimate that the initial public offering price will be between $18.00 and $20.00 per share.

        We are applying to have our common stock traded on The New York Stock Exchange under the symbol "ACM."

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 9.

PRICE $                  A SHARE

 
   Price to
Public
   Underwriting Discounts
and Commissions
   Proceeds to
AECOM
   Proceeds to
Selling Stockholders
Per Share   $     $     $     $  
Total   $     $     $     $  

        We have granted the underwriters the right to purchase up to an additional 5,272,500 shares of common stock to cover over-allotments.

        The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares to purchasers on                , 2007.

MORGAN STANLEY MERRILL LYNCH & CO. UBS INVESTMENT BANK

GOLDMAN, SACHS & CO.

CREDIT SUISSE

D.A. DAVIDSON & CO.

                  , 2007

GRAPHIC


TABLE OF CONTENTS

 
   Page
Summary   1
Risk Factors   9
Special Note Regarding Forward-Looking Statements   17
Use of Proceeds   18
Industry and Market Data   19
Dividend Policy   19
Capitalization   20
Dilution   22
Selected Consolidated Financial Data   23
Management's Discussion and Analysis of Financial Condition and Results of Operations   25
Business   55
Management   73
Executive Compensation   80
Certain Relationships and Related Transactions   100
Principal and Selling Stockholders   101
Description of Capital Stock   103
United States Federal Income Tax Consequences to Non-U.S. Holders   108
Shares Eligible for Future Sale   111
Underwriters   112
Legal Matters   116
Experts   116
Where You Can Find Additional Information   116
Index to Consolidated Financial Statements   F-1

        You should rely only on the information contained in this prospectus or any related free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or any related free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and are seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or any related free writing prospectus is accurate only as of its date, regardless of its time of delivery, or of any sale of the common stock. Our business, financial conditions, results of operations and prospects may have changed since that date.

        Through and including                , 2007 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

        For investors outside of the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

i



SUMMARY

        This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before buying shares in this offering. You should read the entire prospectus carefully, especially the information under "Risk Factors." References in this prospectus to "AECOM," "the Company," "we," "us" or "our" refer to AECOM Technology Corporation and its consolidated subsidiaries, unless we indicate otherwise.

        Unless otherwise noted, references to years are for fiscal years. Our fiscal year consists of 52 or 53 weeks, ending on the Friday closest to September 30. Our fiscal quarters end on the Friday closest to December 31, March 31, June 30 and September 30. For clarity of presentation, we refer to all fiscal years and fiscal quarters in this prospectus as ending on September 30, December 31, March 31 or June 30, regardless of the actual date.

Our Company

        We are a leading global provider of professional technical and management support services to government and commercial clients on all seven continents. We provide planning, consulting, architectural and engineering design, and program and construction management services for a broad range of projects, including highways, airports, bridges, mass transit systems, government and commercial buildings, water and wastewater facilities and power transmission and distribution. We also provide facilities management, training, logistics and other support services, primarily for agencies of the United States government.

        Through our more than 30,000 employees in over 60 countries, we provide our services to a number of end markets, with particular strength in the transportation, facilities, also referred to as general building, and environmental markets. With over 60% of our employees operating outside the United States, we believe we are well positioned to grow both in the United States and internationally. According to Engineering News-Record's (ENR) 2007 Design Survey, we are the largest general architectural and engineering design firm in the world, ranked by 2006 design revenue. In addition, we are ranked by ENR as the leading firm in a number of design end markets, including transportation and general building.

        We are led by an experienced management team with a proven record of delivering growth in revenue and profits. Over the last 10 fiscal years, we have grown our revenue from $0.7 billion to $3.4 billion, reflecting a compound annual growth rate, or CAGR, of 20.0%. Furthermore, over the last five fiscal years, we have doubled our revenue from $1.7 billion to $3.4 billion, reflecting a CAGR of 18.3%. In that same five year period, our net income increased from $23.1 million to $53.7 million, reflecting a CAGR of 23.5%. Our revenue for the first quarter of fiscal 2007 grew 25.7% to $938.5 million, compared to $746.8 million for the same period last year. Over the past 10 years, we have enhanced our organic growth with the successful acquisition and integration of more than 30 complementary businesses. These acquisitions have enabled us to expand our professional service offerings, end market coverage and geographic presence. As of December 31, 2006, we had a total backlog of $2.9 billion compared to $2.5 billion at December 31, 2005, a 15.0% increase.

        We offer our broad range of services through two business segments: Professional Technical Services and Management Support Services.

        Professional Technical Services (PTS).    Our PTS segment delivers planning, consulting, architectural and engineering design, and program and construction management services to government, institutional and commercial clients worldwide in end markets such as transportation, facilities, environmental—including water, wastewater and environmental management—and energy/power. We provide services in connection with some of the largest and most complex projects in the world. Our PTS segment contributed $2.8 billion, or 81.0%, of our revenue in fiscal 2006, which represents an

1


increase of 33.1% over fiscal 2005 PTS revenue. The following table highlights our principal PTS end markets along with a list of representative projects:

End Market
   Approximate
Percentage of
Fiscal 2006
PTS Segment
Revenue (%)
   Representative Projects
   Project
Locations
Transportation   29   • Second Avenue Subway
• Sydney Orbital Bypass
• Sutong Bridge
• John F. Kennedy Airport		   U.S.
Australia
China
U.S.
Facilities   43   • 2012 London Olympics
• Pentagon Renovation
• British Broadcasting Company Headquarters
• Los Alamos National Laboratory		   U.K.
U.S.
U.K.
U.S.
Environmental   24   • Harbor Area Treatment Scheme
• Chicago Calumet and Stickney Wastewater Treatment Plants
• New York City Bowery Bay		   Hong Kong
U.S.

U.S.
Energy/Power   4   • Mutnovsky Independent Power Project
• NY Public Schools Coal Conversion Project
• Sardar Sarovar Dam Automation
• Southern Provincial Rural Electrification Project		   Russia
U.S.
India
Laos

        The following two charts illustrate the diversification of our PTS revenue for the fiscal quarter ended December 31, 2006, by client type and geography.

First Quarter Fiscal 2007 Revenue by Client Type   First Quarter Fiscal 2007 Revenue by Geography
     
GRAPHIC   GRAPHIC

2

        Management Support Services (MSS).    Our MSS segment provides facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government. We have over 9,000 employees managing projects for over 400 contract-specific job sites for U.S. government clients such as the Department of Defense, Department of Energy and the Department of Homeland Security. Our MSS segment contributed $647 million, or 18.9% of our revenue in fiscal 2006, representing an increase of 109.4% over fiscal 2005 MSS revenue. The following table highlights representative projects in our MSS segment:

Representative Projects
   Project Locations
   Clients
• Nevada Test Site   U.S.   U.S. Dept. of Energy
• Camp Doha Army Base   Kuwait   U.S. Dept. of Defense
• Fort Polk Training Center   U.S.   U.S. Dept. of Defense
• International Civilian Police (CIVPOL)   Various worldwide   U.S. Dept. of State

Our Market Opportunity

        According to ENR, the top 500 design firms in the United States, ranked by revenue, generated revenue of approximately $69.6 billion in 2006, a 17.5% increase over 2005. The top five design firms, which includes us, accounted for 21% of this $69.6 billion market. Our core end markets, namely transportation, facilities, environmental, energy/power and government services, are anticipated to continue to grow, due to the following significant market trends:


        The global market for our services is highly fragmented, with thousands of providers. While many of these providers focus on regional niche markets, we believe that clients are increasingly seeking out larger firms such as us that can meet their needs around the world by providing a diverse array of services. This is contributing to a consolidation trend in this market, particularly among mid-size firms without notable technical niche specialties. Furthermore, our client base is becoming increasingly reliant on professional technical services or management support services that are either not readily available from internal resources or are not among their core competencies, or both.

        With our broad service offerings, end market coverage and geographic presence, we believe we are well positioned to capitalize on these favorable trends. Furthermore, we believe the industry consolidation trend will allow us to continue to advance our market leadership positions by selectively adding successful firms that are seeking a global platform for their services.

Our Competitive Strengths

        Leadership positions in large, growing markets.    Based on ENR's rankings of firms by 2006 revenue, we are ranked number one in two of our core end markets, transportation and general building. We also have leadership positions based upon ENR's most recent available rankings by 2006 revenue in many key specialty technical areas within our core end markets, including being ranked first in mass transit, airports, highways, educational facilities, government offices and transmission and distribution.

3

We are also ranked number one in New Civil Engineer's 2006 global listing (by 2005 fees) in the areas of water, buildings and roads and number two in waste and rail.

        Diversification across service lines, end markets and geographies.    We perform a broad range of services in over 60 countries for our clients. In addition, our 25 largest projects by gross profit in fiscal 2006 accounted for only 14% of our consolidated gross profit. We believe this diversification enables us, among other things, to better manage our business through market cycles. We further believe we are well-positioned in geographic areas with favorable growth prospects such as China/Hong Kong and the United Arab Emirates, where we are among the largest engineering design firms. This diversification has been a key factor in our historical growth and positions us for future growth.

        Global reach with local presence.    We combine local market knowledge and relationships with the technical expertise, scale, experience and resources of one of the world's largest global professional technical and support services firms.

        Strong and long-standing client relationships.    We have developed strong and long-term relationships with a number of government entities and large corporations worldwide that lead to repeat business. For example, we have provided services for over 30 years to clients such as the Illinois State Tollway Authority, U.S. Navy, Massachusetts Water Resources Authority and Port Authority of New York and New Jersey.

        Successful history of executing and integrating mergers and acquisitions.    We believe one of our core competencies is successfully identifying, executing and integrating acquisition opportunities. We have consummated more than 30 mergers and acquisitions since 1998 that have enabled us to expand our end markets, service offerings and geographic reach. We derive acquisition synergies by "cross selling" the capabilities of our newly acquired companies to our existing clients and our global capabilities to the clients of our newly acquired companies.

        Experienced management team and employees.    Our Chief Executive Officer and the 10 most senior members of our operating units have an average of more than 20 years of experience with us and more than 25 years in our industry. We also have a large, experienced and skilled workforce. Human capital is critical to success in our industry.

Risks Affecting Our Business

        Our business is subject to numerous risks, as discussed more fully in the section entitled "Risk Factors" beginning on page 9 of this prospectus. In particular:

4

        The foregoing factors, as well as others described in "Risk Factors," could adversely affect the value of your investment in our common stock.

Our Growth Strategy

        We intend to grow our business by leveraging our competitive strengths and leadership positions in our core markets while opportunistically entering new markets and geographies. Key elements of our growth strategy include:

        Expand our long-standing client relationships and provide our clients with a broad range of services.    We have long-standing relationships with a number of governmental agencies, large corporations and public and private institutions worldwide. We will continue to focus on client satisfaction along with opportunities to sell a greater range of services to clients and deliver full-service solutions for their needs. For example, as we have grown our environmental business, we have provided environmental services for transportation and other infrastructure projects in which such services have in the past been subcontracted to third parties.

        Capitalize on growth opportunities in our core markets.    Our core end markets, including transportation, facilities and environmental, are expected to continue to grow. We intend to build on our leading positions in these markets to increase our market share. With our track record and our global resources, we believe we are well positioned to win projects in these core markets. We believe that the need for infrastructure upgrades, environmental management and increased government spending and outsourcing of support services, among other things, will result in continued growth opportunities in our core markets.

        Continue to pursue our merger and acquisition strategy.    We intend to continue to attract other successful companies whose growth can be enhanced by joining us. This approach has served us well as we have strengthened and diversified our leadership positions both geographically, technically and across end markets. We believe that the trend towards consolidation in our industry will continue to produce attractive candidates that align with our merger and acquisition strategy. For example, we significantly strengthened our presence in the fast-growing market in the United Arab Emirates with the addition of Cansult Limited in September 2006.

        Strengthen and support human capital.    Our experienced employees and management are our most valued resources. Attracting and retaining key personnel have been and will remain critical to our success. We will continue to focus on providing our personnel with training and other personal and professional growth opportunities, performance-based incentives, opportunities for stock ownership and other competitive benefits in order to strengthen and support our human capital base. During fiscal 2006, we expanded our multi-year employee engagement initiative to focus more intensely on this critical objective.

Corporate Information

        We were formed in 1980 as Ashland Technology Corporation, a Delaware corporation and a wholly owned subsidiary of Ashland Inc., an oil and gas refining and distribution company. Since becoming independent of Ashland Inc. in 1990, we have grown by combination of organic growth and strategic mergers and acquisitions from approximately 3,300 employees and $387 million in revenue in fiscal 1991, the first full fiscal year of operations, to approximately 27,300 employees and $3.4 billion in revenue for fiscal 2006. Several of the operating companies within AECOM have histories going back more than 50 years. Our principal executive offices are located at 555 South Flower Street, 37th Floor, Los Angeles, California 90071 and our telephone number is (213) 593-8000. Our website is located at www.aecom.com. The information contained on our website is not a part of this prospectus.

5

The Offering

Common stock offered    
  By AECOM   19,906,129 shares
  By the selling stockholders   15,243,871 shares
  Total   35,150,000 shares

Common stock to be outstanding after this offering
 
91,416,946 shares

Over-allotment option
 
5,272,500 shares

Net Proceeds
 
We expect the net proceeds to us from this offering to be $355.5 million ($449.7 million if the underwriters exercise their over-allotment option), after deducting underwriting discounts and commissions payable to the underwriters and our estimated offering expenses, based upon an assumed initial public offering price of $19.00 per share, which is the mid-point of the offering range indicated on the cover of this prospectus, and an assumed $1.14 per share in underwriting discounts and commissions. We will not receive any proceeds from the sale of shares by the selling stockholders.

Use of proceeds
 
To repay borrowings under our credit facilities and our outstanding 83/8% senior notes due 2012, allow employees under our stock purchase plan to diversify their holdings and use the remaining proceeds for general corporate purposes, including possible future acquisitions. We will not receive any of the proceeds from the sale of shares by the selling stockholders. See "Use of Proceeds" for additional information.

Dividends
 
We do not anticipate paying any cash dividends in the foreseeable future.

Proposed New York Stock Exchange symbol
 
ACM

        Common Stock to be outstanding after this offering does not include:

        Except as otherwise indicated, all of the information in this prospectus assumes:

6

Summary Consolidated Financial Data

        You should read the summary consolidated financial data presented below together with "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements, unaudited condensed consolidated financial statements and the related notes included elsewhere in this prospectus. The summary consolidated financial data presented below under "Consolidated Statement of Income Data" for the years ended September 30, 2006, 2005 and 2004 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. We derived the consolidated statement of income data for each of the years ended September 30, 2003 and 2002 and the consolidated balance sheet data as of September 30, 2004, 2003 and 2002 from our audited consolidated financial statements not included in this prospectus.

        The summary consolidated financial data presented below under "Consolidated Statement of Income Data" for the three months ended December 31, 2006 and 2005 and "Consolidated Balance Sheet Data" as of December 31, 2006 have been derived from our unaudited condensed consolidated financial statements that are included elsewhere in this prospectus and have been prepared on the same basis as our audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary to state fairly our results of operations for and as of the periods presented. The results for any interim period are not necessarily indicative of the results that may be expected for a full year.

 
   Year Ended September 30,
   Three Months
Ended
December 31,
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
 
   (in millions, except share and per share data)
Consolidated Statement of Income Data:                                          
Revenue   $ 1,747   $ 1,915   $ 2,012   $ 2,395   $ 3,421   $ 747   $ 939
Cost of revenue     1,269     1,381     1,443     1,718     2,515     547     691
   
 
 
 
 
 
 
Gross profit     478     534     569     677     906     200     248
Equity in earnings of joint ventures     1     2     3     2     7     2     1
General and administrative expenses     430     467     485     581     810     177     219
   
 
 
 
 
 
 
Income from operations     49     69     87     98     103     25     30
Minority interest share of earnings     3     3     3     8     14     2     1
Gain on the sale of equity investment     —     —     —     —     —     —     11
Interest expense—net     12     10     8     7     10     4     1
   
 
 
 
 
 
 
Income before income tax expense     34     56     76     83     79     19     39
Income tax expense     11     19     26     29     25     6     13
   
 
 
 
 
 
 
Net income   $ 23   $ 37   $ 50   $ 54   $ 54   $ 13   $ 26
   
 
 
 
 
 
 

Net income allocation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Preferred stock dividend   $ —   $ 2   $ 5   $ 6   $ 2   $ 1   $ —
  Net income available for common stockholders     23     35     45     48     52     12     26
   
 
 
 
 
 
 
  Net income   $ 23   $ 37   $ 50   $ 54   $ 54   $ 13   $ 26
   
 
 
 
 
 
 

Earnings per share available for common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic   $ 0.45   $ 0.67   $ 0.86   $ 0.93   $ 0.94   $ 0.22   $ 0.44
  Diluted   $ 0.43   $ 0.65   $ 0.78   $ 0.84   $ 0.74   $ 0.20   $ 0.32

Weighted average shares outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic     51,630     52,858     52,600     51,880     54,856     53,288     57,600
  Diluted     54,002     57,178     64,254     63,978     72,658     65,224     79,036

7

 
   Year Ended or as of September 30,
   Three Months
Ended or as of
December 31,
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
 
   (in millions, except employee data)
Other Data:                                          
Depreciation and amortization   $ 23   $ 13   $ 13   $ 20   $ 40   $ 9   $ 7
Amortization expense of acquired intangible assets     —     —     —     3     15     3     1
Capital expenditures     20     14     19     31     32     7     10
Backlog     1,710     1,660     1,620     2,000     2,500     2,480     2,851
Number of full-time and part-time employees     15,500     16,800     17,700     22,000     27,300     24,200     28,500
 
   As of September 30,
   As of December 31,
  
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
   2006
  
 
   (in millions)

     
Actual

   Pro Forma,
as adjusted

  
Consolidated Balance Sheet Data:                                                
Cash and cash equivalents   $ 28   $ 120   $ 121   $ 54   $ 128   $ 67   $ 138   398  
Working capital     113     213     225     171     201     224     178   472 (1)
Total assets     965     1,056     1,115     1,425     1,826     1,585     1,879   2,173  
Long-term debt excluding current portion     171     122     105     216     123     313     104   12  
Redeemable preferred and common stock and stock units, net of notes receivable     378     547     576     661     970     668     1,014   —  
Stockholders' (deficit) equity     (108 )   (181 )   (159 )   (240 )   (291 )   (237 )   (324 ) 1,071  
(1)
Assumes current and long-term stock purchase plan liabilities are proportionate with total liabilities as of December 31, 2006.


Recent Developments

        For the three months ended March 31, 2007, we expect to report revenue of $1,083.7 million, an increase of 26.2% over revenue of $858.9 million for the comparable period ending March 31 last year and net income of $21.2 million, an increase of 78.3% over net income of $11.9 million for the comparable period ending March 31 last year. Included in our results of operations for the three months ended March 31, 2007 is stock match expense of $3.0 million, which on an after-tax basis totals $2.0 million, as compared to stock match expense of $5.0 million and a write-off of deferred financing costs of $2.1 million, which on an after-tax basis total $4.8 million for the comparable period ending March 31 last year.

        For the six months ended March 31, 2007, we expect to report revenue of $2,022.3 million, an increase of 25.9% over revenue of $1,605.7 million for the comparable period ending March 31 last year and net income of $46.7 million, an increase of 88.1% over net income of $24.8 million for the comparable period ending March 31 last year. Included in our results of operations for the six months ended March 31, 2007 is a gain on the sale of an equity investment of $11.3 million, partially offset by stock match expense of $7.0 million, which on an after-tax basis net to $2.9 million, as compared to stock match expense of $6.4 million and a write-off of deferred financing costs of $2.1 million, which on an after-tax basis total $5.7 million for the comparable period ending March 31 last year.

        We expect to report backlog at March 31, 2007 of $3,130.5 million, an increase of 21.1% over backlog of $2,584.8 million at March 31, 2006.

        The financial information contained in the above three paragraphs is subject to change pending the completion of our quarterly report. The expected results for the three and six months ended March 31, 2007 and the results for the three and six months ended March 31, 2006 are unaudited.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus, including our financial statements and the related notes, before making a decision to buy our common stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Industry

We depend on long-term government contracts, some of which are only funded on an annual basis. If appropriations for funding are not made in subsequent years of a multiple-year contract, we may not be able to realize all of our anticipated revenue and profits from that project.

        A substantial majority of our revenue is derived from contracts with agencies and departments of national, state and local governments. During fiscal 2004, 2005 and 2006, approximately 76%, 75% and 63%, respectively, of our revenue was derived from contracts with government entities.

        Most government contracts are subject to the government's budgetary approval process. Legislatures typically appropriate funds for a given program on a year-by-year basis, even though contract performance may take more than one year. As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each subsequent fiscal year. These appropriations, and the timing of payment of appropriated amounts, may be influenced by, among other things, the state of the economy, competing priorities for appropriation, changes in administration or control of legislatures and the timing and amount of tax receipts and the overall level of government expenditures. If appropriations are not made in subsequent years on our government contracts, then we will not realize all of our potential revenue and profit from that contract.

        For instance, a significant portion of historical funding for state and local transportation projects has come from the U.S. federal government through its "SAFETEA-LU" infrastructure funding program and predecessor programs. This $286 billion program covers federal fiscal years 2004-2009. Approximately 79% of the SAFETEA-LU funding is for highway programs, 18.5% is for transit programs and 2.5% is for other programs such as motor carrier safety, national highway traffic safety and research. A key uncertainty in the outlook for federal transportation funding in the U.S. is the future viability of the Highway Trust Fund. The Highway Account within the Highway Trust Fund could have a negative balance as soon as 2009, based on the Department of Treasury projections of receipts and Department of Transportation projections of outlays. This raises concerns about whether funding for federal highway programs authorized by SAFETEA-LU will be met in future years.

Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue.

        Most government contracts maybe modified, curtailed or terminated by the government either at its convenience or upon the default of the contractor. If the government terminates a contract at its convenience, then we typically are able to recover only costs incurred or committed, settlement expenses and profit on work completed prior to termination, which could prevent us from recognizing all of our potential revenue and profits from that contract. If the government terminates the contract due to our default, we could be liable for excess costs incurred by the government in obtaining services from another source.

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A delay in the completion of the budget process of the U.S. government could delay procurement of our services and have an adverse effect on our future revenue.

        In years when the U.S. government does not complete its budget process before the end of its fiscal year on September 30, government operations are typically funded pursuant to a "continuing resolution" that authorizes agencies of the U.S. government to continue to operate, but does not authorize new spending initiatives. When the U.S. government operates under a continuing resolution, government agencies may delay the procurement of services, which could reduce our future revenue.

Our contracts with governmental agencies are subject to audit, which could result in adjustments to reimbursable contract costs or, if we are charged with wrongdoing, possible temporary or permanent suspension from participating in government programs.

        Our books and records are subject to audit by the various governmental agencies we serve and their representatives. These audits can result in adjustments to the amount of contract costs we believe are reimbursable by the agencies and the amount of our overhead costs allocated to the agencies. In addition, if one of our subsidiaries is charged with wrongdoing as a result of an audit, that subsidiary, and possibly our company as a whole, could be temporarily suspended or could be prohibited from bidding on and receiving future government contracts for a period of time. Furthermore, as a government contractor, we are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities to which purely private sector companies are not, the results of which could harm our business.

Our business and operating results could be adversely affected by losses under fixed-price contracts.

        Fixed-price contracts require us to either perform all work under the contract for a specified lump-sum or to perform an estimated number of units of work at an agreed price per unit, with the total payment determined by the actual number of units performed. In fiscal 2006, approximately one-third of our revenue was recognized under fixed-price contracts. Fixed-price contracts expose us to a number of risks not inherent in cost-plus and time and material contracts, including underestimation of costs, ambiguities in specifications, unforeseen costs or difficulties, problems with new technologies, delays beyond our control, failures of subcontractors to perform and economic or other changes that may occur during the contract period. Losses under fixed-price construction contracts could be substantial and harm our results of operations.

We conduct a portion of our operations through joint venture entities, over which we may have limited control.

        Approximately 24% of our fiscal 2006 revenue was derived from our operations through joint ventures or similar partner arrangements, where control may be shared with unaffiliated third parties. As with most joint venture arrangements, differences in views among the joint venture participants may result in delayed decisions or disputes. We also cannot control the actions of our joint venture partners, and we typically have joint and several liability with our joint venture partners under the applicable contracts for joint venture projects. These factors could potentially harm the business and operations of a joint venture and, in turn, our business and operations.

        Operating through joint ventures in which we are minority holders results in us having limited control over many decisions made with respect to projects and internal controls relating to projects. Approximately 7% of our fiscal 2006 revenue was derived from our unconsolidated joint ventures where we generally do not have control of the entities. These joint ventures may not be subject to the same requirements regarding internal controls and internal control over financial reporting that we follow. As a result, internal control problems may arise with respect to the joint ventures, which could have a material adverse effect on our financial condition and results of operations.

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Misconduct by our employees or consultants or our failure to comply with laws or regulations applicable to our business could cause us to lose customers or lose our ability to contract with government agencies.

        As a government contractor, misconduct, fraud or other improper activities by our employees or consultants failure to comply with laws or regulations could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with federal procurement regulations, regulations regarding the protection of classified information, legislation regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, and any other applicable laws or regulations. Our failure to comply with applicable laws or regulations or misconduct by any of our employees or consultants could subject us to fines and penalties, loss of security clearance, cancellation of contracts and suspension or debarment from contracting with government agencies, any of which may adversely affect our business.

Our defined benefit plans currently have significant deficits that could grow in the future and cause us to incur additional costs.

        We have defined benefit pension plans for employees in the United States, United Kingdom and Australia. At September 30, 2006, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of $117.2 million. At September 30, 2006, the excess of accumulated benefit obligations over the fair value of plan assets was $84.8 million. In the future, our pension deficits may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors. If we are forced or elect to make up all or a portion of the deficit for unfunded benefit plans, our profits could be materially and adversely affected.

Our operations worldwide expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.

        During fiscal 2006, revenue attributable to our services provided outside of the United States was approximately 44% of our total revenue. Approximately 27% of our total fiscal 2006 revenue was contracted in non-U.S. dollar denominations. We expect the percentage of revenue attributable to our non-U.S. operations to increase further as a result of our strategic focus in areas such as Eastern Europe, China and the Middle East. There are risks inherent in doing business internationally, including:


        Any of these factors could have a material adverse effect on our business, results of operations or financial condition.

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We work in international locations where there are high security risks, which could result in harm to our employees and contractors or material costs to us.

        Some of our services are performed in high-risk locations, such as Iraq and Afghanistan, where the country or location is suffering from political, social or economic problems, or war or civil unrest. In those locations where we have employees or operations, we may incur material costs to maintain the safety of our personnel. Despite these precautions, the safety of our personnel in these locations may continue to be at risk, and we may suffer the loss of key employees and contractors, which could harm our business.

Failure to successfully execute our merger and acquisition strategy may inhibit our growth.

        We have grown in part as a result of our mergers and acquisitions over the last several years, and we expect continued growth in the form of additional acquisitions and expansion into new markets. We cannot assure you that suitable mergers and acquisitions or investment opportunities will continue to be identified or that any of these transactions can be consummated on favorable terms or at all. Any future mergers and acquisitions will involve various inherent risks, such as:

        Furthermore, during the mergers and acquisitions process and thereafter, our management may need to assume significant mergers and acquisitions related responsibilities, which may cause them to divert their attention from our existing operations. If our management is unable to successfully integrate acquired companies or implement our growth strategy, our operating results could be harmed. Moreover, we cannot assure you that we will continue to successfully expand or that growth or expansion will result in profitability.

Our ability to grow and to compete in our industry will be harmed if we do not retain the continued services of our key technical and management personnel and identify, hire and retain additional qualified personnel.

        There is strong competition for qualified technical and management personnel in the sectors in which we compete. We may not be able to continue to attract and retain qualified technical and management personnel, such as engineers, architects and project managers, who are necessary for the development of our business or to replace qualified personnel. Our planned growth may place increased demands on our resources and will likely require the addition of technical and management personnel and the development of additional expertise by existing personnel. Also, some of our personnel hold security clearances required to obtain government projects; if we were to lose some or all of these personnel, they would be difficult to replace. Loss of the services of, or failure to recruit, key technical and management personnel could limit our ability to complete existing projects successfully and to compete for new projects.

        Additionally, in the past, we have promoted our employee ownership culture as a competitive advantage in recruiting and retaining employees. Although we intend to retain the essential elements of an employee ownership culture and do not intend to change our core values and operating philosophy,

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if our employees or recruits perceive that becoming a publicly-traded company will negatively impact our company culture, our ability to recruit and retain employees may be adversely impacted.

Our revenue and growth prospects may be harmed if we or our employees are unable to obtain the security clearances or other qualifications we and they need to perform services for our customers.

        A number of government programs require contractors to have security clearances. Depending on the level of required clearance, security clearances can be difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain necessary security clearances, we may not be able to win new business, and our existing customers could terminate their contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue anticipated from the contract.

Our industry is highly competitive and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share.

        We are engaged in a highly competitive business. The extent of competition varies with the types of services provided and the locations of the projects. Generally, we compete on the bases of technical and management capability, personnel qualifications and availability, geographic presence, experience and price. Increased competition may result in our inability to win bids for future projects and loss of revenue, profitability and market share.

Our services expose us to significant risks of liability and our insurance policies may not provide adequate coverage.

        Our services involve significant risks of professional and other liabilities that may substantially exceed the fees that we derive from our services. In addition, we sometimes contractually assume liability under indemnification agreements. We cannot predict the magnitude of potential liabilities from the operation of our business.

        Our professional liability policies cover only claims made during the term of the policy. Additionally, our insurance policies may not protect us against potential liability due to various exclusions in the policies and self-insured retention amounts. Partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse affect on our business.

Our backlog of uncompleted projects under contract is subject to unexpected adjustments and cancellations and thus, may not accurately reflect future revenue and profits.

        At December 31, 2006, our backlog of uncompleted projects under contract was approximately $2.9 billion. We cannot guarantee that the revenue attributed to uncompleted projects under contract will be realized or, if realized, will result in profits. Many projects may remain in our backlog for an extended period of time because of the size or long-term nature of the contract. In addition, from time to time projects are delayed, scaled back or cancelled. These types of backlog reductions adversely affect the revenue and profits that we ultimately receive from contracts reflected in our backlog.

We have submitted claims to clients for work we performed beyond the scope of some of our contracts. If these clients do not approve these claims, our results of operations could be adversely impacted.

        We typically have pending claims submitted under some of our contracts for payment of work performed beyond the initial contractual requirements for which we have already recorded revenue. In general, we cannot guarantee that such claims will be approved in whole, in part or at all. If these claims are not approved, our revenue may be reduced in future periods.

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In conducting our business, we depend on other contractors and subcontractors. If these parties fail to satisfy their obligations to us or other parties, or if we are unable to maintain these relationships, our revenue, profitability and growth prospects could be adversely affected.

        We depend on contractors and subcontractors in conducting our business. There is a risk that we may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontractor, or our failure to extend existing task orders or issue new task orders under a subcontract. In addition, if any of our subcontractors fail to deliver on a timely basis the agreed-upon supplies and/or perform the agreed-upon services, our ability to fulfill our obligations as a prime contractor may be jeopardized.

        We also rely on relationships with other contractors when we act as their subcontractor or joint venture partner. Our future revenue and growth prospects could be adversely affected if other contractors eliminate or reduce their subcontracts or joint venture relationships with us, or if a government agency terminates or reduces these other contractors' programs, does not award them new contracts or refuses to pay under a contract.

Systems and information technology interruption could adversely impact our ability to operate.

        We rely heavily on computer, information and communications technology and related systems in order to properly operate. From time to time, we experience occasional system interruptions and delays. If we are unable to continually add software and hardware, effectively upgrade our systems and network infrastructure and take other steps to improve the efficiency of and protect our systems, systems operation could be interrupted or delayed. In addition, our computer and communications systems and operations could be damaged or interrupted by natural disasters, telecommunications failures, acts of war or terrorism, computer viruses, physical or electronic security breaches and similar events or disruptions. Any of these or other events could cause system interruption, delays and loss of critical data, could delay or prevent operations, and could adversely affect our operating results.

Risks Relating to this Offering and Our Common Stock

There has been no prior public market for our shares and an active market may not develop or be maintained, which could limit your ability to sell shares of our common stock.

        Before this offering, there has not been a public market for our shares of common stock. Although we are applying for listing on the New York Stock Exchange, an active public market for our shares may not develop or be sustained after this offering. The initial public offering price will be determined by negotiations between the underwriters and our board of directors and may not be representative of the market price at which our shares of common stock will trade after this offering. In particular, we cannot assure you that you will be able to resell our shares at or above the initial public offering price.

Our quarterly operating results may fluctuate significantly, which could have a negative effect on the price of our common stock.

        Our quarterly revenue, expenses and operating results may fluctuate significantly because of a number of factors, including:

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        Variations in any of these factors could cause significant fluctuations in our operating results from quarter to quarter and could cause the price of our common stock to fluctuate and decline.

Our charter documents contain provisions that may delay, defer or prevent a change of control.

        Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to stockholders. These provisions include the following:

Future sales of our common stock may lower our stock price.

        If our existing stockholders sell a large number of shares of our common stock following this offering, the market price of our common stock could decline significantly. In addition, the perception in the public market that our existing stockholders might sell shares of common stock could depress the market price of our common stock, regardless of the actual plans of our existing stockholders. Immediately after this offering, approximately 91,416,946 shares of our common stock will be outstanding, or 96,689,446 if the underwriters' over-allotment option is exercised in full. Of these shares, approximately 38,552,426 shares will be available for immediate resale in the public market, including all of the shares in this offering, and 6,617,073 shares will be available for resale 90 days following completion of this offering, except those held by our "affiliates." Of the remaining shares outstanding, approximately 46,247,447 shares are subject to lock-up agreements restricting the sale of those shares for 180 days from the date of this prospectus. However, the underwriters may waive this restriction and allow the stockholders to sell their shares at any time.

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        We have registered 25,637,100 shares of common stock that are reserved for issuance under our stock plans. Upon completion of this offering, these shares can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates and applicable lock-up agreements.

Purchasers in this offering will experience immediate and substantial dilution in net tangible book value.

        The initial public offering price per share is expected to be substantially higher than the net tangible book value per share of our outstanding common stock. Purchasers of shares in this offering will experience immediate dilution in the net tangible book value of their shares. Based on an assumed initial public offering price of $19.00 per share, dilution per share in this offering will be $13.53 per share (or 71.2% of the price). In addition, we have issued options to acquire 8,618,293 shares of our common stock at a weighted average exercise price of $8.07 per share. To the extent these outstanding options are exercised, there will be further dilution to investors in this offering. Further, if we issue additional equity securities to raise additional capital, your ownership interest in our company may be diluted and the value of your investment may be reduced.

We do not expect to pay any dividends for the foreseeable future.

        We do not anticipate paying any dividends to our stockholders for the foreseeable future. Our credit facilities also restrict our ability to pay dividends. Accordingly, you may have to sell some or all of your common stock in order to generate cash flow from your investment. You may not receive a gain on your investment when you sell our common stock and may lose some or all of the amount of your investment. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

We will incur increased costs as a result of being a publicly-traded company.

        As a company with publicly-traded securities, we could incur significant legal, accounting and other expenses not presently incurred. In addition, the Sarbanes-Oxley Act of 2002, as well as rules promulgated by the U.S. Securities and Exchange Commission and the New York Stock Exchange, require us to adopt corporate governance practices applicable to U.S. public companies. These rules and regulations will increase our legal and financial compliance costs.

If we do not timely satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the trading price of our common stock could be adversely affected.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires us to document and test the effectiveness of our internal controls over financial reporting in accordance with an established internal control framework and to report on our conclusion as to the effectiveness of our internal controls. It also requires our independent registered public accounting firm to test our internal controls over financial reporting and report on the effectiveness of such controls as of September 30, 2008. Our independent registered public accounting firm is also required to test, evaluate and report on management's assessment of internal control. Any delays or difficulty in satisfying these requirements could cause some investors to lose confidence in, or otherwise be unable to rely on, the accuracy of our reported financial information, which could adversely affect the trading price of our common stock.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

        This prospectus contains statements which, to the extent that they do not recite historical fact, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "believe," "expect," "estimate," "may," "will," "could," "plan" or "continue" and similar expressions are intended to identify forward-looking statements. Such forward-looking information involves important risks and uncertainties that could materially alter results in the future from those expressed in any forward-looking statements made by us or on our behalf. These risks and uncertainties include, but are not limited to:

        In addition, this prospectus contains industry data related to our business and the markets in which we operate. This data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results could differ from the projections.

        We caution you that forward-looking statements are only predictions and that actual events or results may differ materially. In evaluating these statements, you should specifically consider the various factors that could cause actual events or results to differ materially from those indicated by the forward-looking statements, including the factors that we discuss in the section entitled "Risk Factors."

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USE OF PROCEEDS

        We estimate that our net proceeds (after deducting underwriting discounts and commissions payable to the underwriters and our estimated offering expenses) from this offering will be $355.5 million ($449.7 million if the underwriters exercise their option to acquire additional shares in full), based upon an assumed initial public offering price of $19.00 per share, which is the mid-point of the offering range indicated on the cover of this prospectus, and an assumed $1.14 per share in underwriting discounts and commissions, which is the mid-point of the range of the underwriting discounts and commissions we will pay of $1.09 per share to $1.19 per share, depending on the public offering price and subject to a performance increase payable at the discretion of the Company. We will not receive any proceeds from the sale of shares by the selling stockholders.

        We expect to use approximately $63.0 million of the net proceeds to repay amounts outstanding subsequent to December 31, 2006 under our unsecured senior credit facility, which matures March 31, 2011, and currently bears interest at a weighted average interest rate of 6.80%. We also expect to use approximately $57.0 million of the net proceeds to repay all our outstanding borrowings under our unsecured term credit agreement which matures September 22, 2011 and currently bears interest at a weighted average interest rate of 5.51%. Further, we expect to use approximately $39.0 million to repay all of our outstanding 83/8% senior notes due April 14, 2012 which includes principal, accrued interest and make-whole premiums.

        We also expect to use $76.4 million of the net proceeds to fund elections made by employee participants in our stock purchase plan to diversify their holdings of plan units in connection with this offering. The diversification will be effected by our selling a number of newly issued shares of common stock in this offering equal to the number of common stock units under the stock purchase plan that each employee has elected to diversify. The net proceeds from the sale of such shares will be delivered to a trust for the benefit of such employee's plan account and the plan account will be reduced by the corresponding number of stock units. Such net proceeds will be retained in the trust and will be invested to match the investment elections made by such employee. Since the plan units are currently included in our total shares outstanding and the number of newly issued shares equals the number of plan units deducted from employee plan accounts, this diversification has no net impact on our total shares outstanding.

        We expect to use the remaining net proceeds for general corporate purposes, which may include future acquisitions.

        A $1.00 increase (decrease) in the assumed initial public offering price of $19.00 per share would increase (decrease) the net proceeds to us from this offering by $18.7 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

        Until we use the net proceeds as described above, we intend to invest the net proceeds in short-term securities.

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INDUSTRY AND MARKET DATA

        We obtained the market, demographic, competitive position and similar data used throughout this prospectus from our own research and from surveys or studies conducted by third parties and industry or general publications. We have also derived data regarding our competitors and customers from their press releases and other public filings. This market, demographic, competitive position and similar data include, among other things, statements regarding the global market for engineering, design and support services, our position in the relevant markets, including the transportation, facilities and environmental markets, and the historical and projected growth rate of our industry. While we believe that each of these surveys, studies and publications is reliable, we have not independently verified such data. Similarly, we believe our internal research is reliable, but it has not been verified by any independent sources.


DIVIDEND POLICY

        We have not declared or paid any cash dividends on our common stock, and we do not anticipate doing so in the foreseeable future. We currently intend to retain future earnings, if any, to operate our business and finance future growth strategies. Our loan covenants require us to obtain the consent of the banks or the senior noteholders, as the case may be, prior to the payment of any cash dividends.

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CAPITALIZATION

        The following table sets forth our capitalization as of December 31, 2006 on an actual basis and as adjusted to give effect to our sale of common stock in this offering at an assumed initial offering price of $19.00 per share and the application of the net proceeds from this offering as described under "Use of Proceeds." A $1.00 increase or decrease in the assumed public offering price of $19.00 per share would increase or decrease each of additional paid-in capital, total stockholders' (deficit)/equity and total capitalization by approximately $18.7 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

 
   As of December 31, 2006
  
 
   Actual
   Pro Forma
As Adjusted(3)
  
 
   (in thousands, except share data)
(unaudited)

  
Cash and cash equivalents   $ 137,774   $ 397,548  
   
 
 
Share purchase liability     57,253     —  

Debt:
 
 
 
 
 
 
 
  Current portion of long-term debt     23,626     23,626  
  Long-term debt, less current portion     104,115     12,115  
   
 
 
    Total debt     127,741     35,741  

Redeemable common and preferred stock and stock units(1)
 
 
818,901
 
 
—
 
Notes receivable from stockholders     (36,607 )   —  
Redeemable preferred stock, Class F—47,000 authorized, issued and outstanding as of December 31, 2006, and 0 shares as adjusted(2)     117,500     —  
Redeemable preferred stock, Class G—47,000 authorized, issued and outstanding as of December 31, 2006, and 0 shares as adjusted(2)     117,500     —  

Stockholders' (deficit)/equity:
 
 
 
 
 
 
 
  Convertible preferred stock authorized 7,799,780 shares; issued and outstanding, 0 shares as of December 31, 2006 and 55,938 as adjusted, $100 liquidation preference value     —     5,594  
  Preferred stock, Class C-authorized 200 shares; issued and outstanding, 0 as of December 31, 2006 and 108.634 as adjusted, $1.00 liquidation preference value     —     —  
  Preferred stock, Class E-authorized 20 shares; issued and outstanding, 0 as of December 31, 2006 and 5.165 as adjusted, $1.00 liquidation preference value     —     —  
  Common stock, $0.01 par value, and common stock units, no par value, total authorized 150,000,000; issued and outstanding 95,435,943 shares pro forma as adjusted(2)     —     877  
  Additional paid-in capital     (290,797 )   1,138,079  
  Retained earnings     —     (3,749 )
  Notes receivable from stockholders     —     (36,607 )
  Accumulated other comprehensive loss     (33,694 )   (33,694 )
   
 
 
    Total stockholders' (deficit)/equity     (324,491 )   1,070,500  
   
 
 
Total capitalization   $ 877,797   $ 1,106,241  
   
 
 
(1)
Common stock issued and outstanding does not include at December 31, 2006:

•
9,342,794 shares of common stock issuable upon the exercise of options outstanding under our stock incentive plans, with a weighted average exercise price of $8.69 per share;

•
363,116 shares of common stock issuable upon conversion of our convertible preferred stock;

•
27,724 shares of common stock issuable upon conversion of our convertible preferred stock units;

•
9,373,753 shares of common stock issuable upon conversion of our Class F convertible preferred stock at December 31, 2006;

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(2)
Pro Forma As Adjusted amount reflects conversion of Class F and Class G Convertible Preferred Stock to common stock.

(3)
We are offering 19.9 million shares of common stock, of which 4.0 million shares will be used to defease stock units currently held by employee participants in our stock purchase plan. Stock units held in the stock purchase plan are currently included in our total shares outstanding, so there will be no dilution upon exchange of these stock units for newly issued shares. We will not retain any proceeds from the sale of these 4.0 million shares.

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DILUTION

        Our pro forma net tangible book value at December 31, 2006 was $166.7 million, or $2.21 per share. Pro forma net tangible book value assumes the conversion, concurrent with the offering, of all redeemable common and preferred stock and stock units and the related share purchase liability resulting in total common shares outstanding of 75,529,814 as of December 31, 2006. After giving effect to the sale of our common stock in this offering at an assumed initial public offering price of $19.00 per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our adjusted net tangible book value at December 31, 2006 would have been $522.2 million or $5.47 per share. This represents an immediate increase in net tangible book value per share of $3.27 to existing stockholders and dilution in net tangible book value per share of $13.53 to new investors who purchase shares in the offering. The following table illustrates this per share dilution to new investors:

Assumed initial public offering price per share         $ 19.00
  Pro forma net tangible book value per share at December 31, 2006   $ 2.21      
  Increase in net tangible book value per share attributable to new investors     3.27      
Adjusted net tangible book value per share           5.47
         
Dilution per share to new investors         $ 13.53
         

        The following table sets forth, on the as adjusted basis described above, at December 31, 2006, the difference between the number of shares of common stock purchased, the total consideration paid, and the average price per share paid by the existing stockholders and by investors purchasing shares in this offering, before deducting estimated underwriting discounts and commissions and estimated offering expenses.

 
   Shares Purchased
   Total Consideration
    
 
   Average Price
Per Share
 
   Number
   Percent
   Amount
   Percent
Existing stockholders   75,530   79   679,479   64   $ 9.00
New investors   19,906   21   378,217   36   $ 19.00
   
 
 
 
 
  Total   95,436   100 % 1,057,696   100 % $ 11.08
   
 
 
 
 

        The discussions and tables above exclude the following at December 31, 2006:

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SELECTED CONSOLIDATED FINANCIAL DATA

        You should read the following selected consolidated financial data along with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes, which is included in this prospectus. We derived the consolidated statement of income data for each of the three years ended September 30, 2006, 2005 and 2004 and the consolidated balance sheet data at September 30, 2006 and 2005 from our audited consolidated financial statements, which are included elsewhere in this prospectus. The data for the three months ended December 31, 2006 and 2005 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of our management, reflect all adjustments necessary for a fair presentation of this data. The results for any interim period are not necessarily indicative of the results that may be expected for a full year. We derived the consolidated statement of income data for each of the years ended September 30, 2003 and 2002 and the consolidated balance sheet data as of September 30, 2004, 2003 and 2002 from our audited consolidated financial statements not included in this prospectus.

 
   Year Ended September 30,
   Three Months
Ended December 31,
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
 
   (in millions, except share and per share data)
Consolidated Statement of Income Data:                                          
Revenue   $ 1,747   $ 1,915   $ 2,012   $ 2,395   $ 3,421   $ 747   $ 939
Cost of revenue     1,269     1,381     1,443     1,718     2,515     547     691
   
 
 
 
 
 
 
Gross profit     478     534     569     677     906     200     248
Equity in earnings of joint ventures     1     2     3     2     7     2     1
General and administrative expenses     430     467     485     581     810     177     219
   
 
 
 
 
 
 
Income from operations     49     69     87     98     103     25     30
Minority interest share of earnings     3     3     3     8     14     2     1
Gain on the sale of equity investment     —     —     —     —     —     —     11
Interest expense—net     12     10     8     7     10     4     1
   
 
 
 
 
 
 
Income before income tax expense     34     56     76     83     79     19     39
Income tax expense     11     19     26     29     25     6     13
   
 
 
 
 
 
 
Net income   $ 23   $ 37   $ 50   $ 54   $ 54   $ 13   $ 26
   
 
 
 
 
 
 

Net income allocation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Preferred stock dividend   $ —   $ 2   $ 5   $ 6   $ 2   $ 1   $ —
  Net income available for common stockholders     23     35     45     48     52     12     26
   
 
 
 
 
 
 
  Net income   $ 23   $ 37   $ 50   $ 54   $ 54   $ 13   $ 26
   
 
 
 
 
 
 

Earnings per share available for common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic   $ 0.45   $ 0.67   $ 0.86   $ 0.93   $ 0.94   $ 0.22   $ 0.44
  Diluted   $ 0.43   $ 0.65   $ 0.78   $ 0.84   $ 0.74   $ 0.20   $ 0.32

Weighted average shares outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic     51,630     52,858     52,600     51,880     54,856     53,288     57,600
  Diluted     54,002     57,178     64,254     63,978     72,658     65,224     79,036

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   Year Ended or as of September 30,
   Three Months
Ended or as of
December 31,
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
 
   (in millions, except employee data)
Other Data:                                          
Depreciation and amortization   $ 23   $ 13   $ 13   $ 20   $ 40   $ 9   $ 7
Amortization expense of acquired intangible assets     —     —     —     3     15     3     1
Capital expenditures     20     14     19     31     32     7     10
Backlog     1,710     1,660     1,620     2,000     2,500     2,480     2,851
Number of full-time and part-time employees     15,500     16,800     17,700     22,000     27,300     24,200     28,500
 
   As of September 30,
   As of December 31,
  
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
  
 
   (in millions)

  
Consolidated Balance Sheet Data:                                            
Cash and cash equivalents   $ 28   $ 120   $ 121   $ 54   $ 128   $ 67   $ 138  
Working capital     113     213     225     171     201     224     178  
Total assets     965     1,056     1,115     1,425     1,826     1,585     1,879  
Long-term debt excluding current portion     171     122     105     216     123     313     104  
Redeemable preferred and common stock and stock units, net of notes receivable     378     547     576     661     970     668     1,014  
Stockholders' deficit     (108 )   (181 )   (159 )   (240 )   (291 )   (237 )   (324 )

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        You should read the following discussion in conjunction with our consolidated financial statements and the related notes and other financial information included in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in "Risk Factors."

Overview

        We are a leading global provider of professional technical and management support services for commercial and government clients around the world. We provide our services in a broad range of end markets and strategic geographic markets through a global network of operating offices and more than 30,000 employees and staff employed in the field on a project-by-project basis.

        Our business focuses primarily on providing fee-based professional technical and support services and, as such, we are labor and not capital intensive. We derive income from our ability to generate revenue and collect cash from our clients through the billing of our employees' time and our ability to manage our costs. We operate our business through two segments: Professional Technical Services (PTS) and Management Support Services (MSS).

        Our PTS segment delivers planning, consulting, architecture and engineering design, and program and construction management services to institutional, commercial and government clients worldwide in major end markets such as transportation, facilities and environmental markets. PTS revenue is primarily derived from fees from services that we provide, as opposed to pass-through fees from subcontractors and other direct costs. As a percentage of PTS revenue, our other direct costs, including subcontractor and consultant costs, typically range from 30% to 38%. Our gross margin as a percentage of PTS revenue typically ranges from 44% to 48%, depending on the nature and scope of the underlying projects.

        Our MSS segment provides facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government. MSS revenue typically includes a significant amount of pass-through fees from subcontractor and other direct costs. As a percentage of MSS revenue, other direct costs, including subcontractor, consultants and material costs typically range from 85% to 87%. Our gross margin as a percentage of MSS revenue typically ranges from 3% to 5%, depending on the level of other direct costs required, which can vary significantly from period to period.

        In total, our revenue is dependent on our ability to attract qualified and productive employees, identify business opportunities, allocate our labor resources to profitable markets, secure new contracts, renew existing client agreements and provide outstanding services. Moreover, as a professional services company, the quality of the work generated by our employees is integral to our revenue generation.

        Our costs are driven primarily by the compensation we pay to our employees, including fringe benefits, the cost of hiring subcontractors and other project-related expenses, and sales, general and administrative overhead costs.

Components of Income and Expense

        Our management analyzes the results of our operations using two financial measures that are not in accordance with generally accepted accounting principles in the United States (GAAP): revenue, net of other direct costs and cost of revenue, net of other direct costs.

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        The following table presents, for the periods indicated, a presentation of the non-GAAP financial measures reconciled to the closest GAAP measure:

 
   Year Ended September 30,
   Three Months
Ended
December 31,
 
   2002
   2003
   2004
   2005
   2006
   2005
   2006
 
   (in millions)
Other Financial Data:                                          
Revenue   $ 1,747   $ 1,915   $ 2,012   $ 2,395   $ 3,421   $ 747   $ 939
Other direct costs     671     725     776     933     1,521     332     436
   
 
 
 
 
 
 
Revenue, net of other direct costs     1,076     1,190     1,236     1,462     1,900     415     503
Cost of revenue, net of other direct costs     598     656     667     785     994     215     255
   
 
 
 
 
 
 
Gross profit     478     534     569     677     906     200     248
   
 
 
 
 
 
 
Equity in earnings of joint ventures     1     2     3     2     7     2     1
   
 
 
 
 
 
 
Amortization expense of acquired intangible assets     —     —     —     3     15     3     1
Other general and administrative expenses     430     467     485     578     795     174     218
   
 
 
 
 
 
 
General and administrative expenses     430     467     485     581     810     177     219
   
 
 
 
 
 
 
Income from operations   $ 49   $ 69   $ 87   $ 98   $ 103   $ 25   $ 30
   
 
 
 
 
 
 
Reconciliation of Cost of Revenue:                                          
Other direct costs   $ 671   $ 725   $ 776   $ 933   $ 1,521   $ 332   $ 436
Cost of revenue, net of other direct costs     598     656     667     785     994     215     255
   
 
 
 
 
 
 
Cost of revenue   $ 1,269   $ 1,381   $ 1,443   $ 1,718   $ 2,515   $ 547   $ 691
   
 
 
 
 
 
 

        We recognize revenue using the percentage-of-completion method. Under this method, revenue is recorded generally on the basis of the ratio of direct labor dollars incurred to the estimated total direct labor dollars. We review our progress on each contract periodically and losses, if any, are recognized as soon as we determine that the contract will result in a loss. Our revenue is primarily derived from fee-based professional and technical services that our employees provide to our portfolio of clients as well as from other direct costs such as subcontractor and direct material purchases. Increases in fees or billable hours of our employees tends to have a more positive impact on our profitability than do increases in other direct costs. Contracts that are more heavily weighted on other direct costs tend to have lower profit margins.

        On many projects we are responsible for other direct costs or pass-through costs that may include third party field labor, subcontracts, or the procurement of materials and equipment. We account for the reimbursement of these expenses as revenue as these costs are incurred. On projects where the client elects to pay these costs directly, however, pass-through costs are not reflected in our revenue or expenses. Thus, other direct costs can fluctuate significantly. We generally do not earn profits from pass-through costs with the exception when incremental costs are incurred relating to the level of effort expended by us on these pass-through costs for supervision, accounting services and similar activities. In the cases where we do mark-up costs and earn profits, the amount is typically insignificant.

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        In the course of providing our services, we routinely incur "other direct costs" (i.e. payments to subcontractors and other "pass-through" costs). Generally, these other direct costs are passed through to our clients and are included in our revenue when it is our responsibility to procure or manage such costs under the contract. Because other direct costs can vary significantly from project to project and period to period, changes in revenue may not be indicative of our business trends. Accordingly, in addition to revenue, we report revenue, net of other direct costs, and our discussion and analysis of financial condition and results of operations uses revenue, net of other direct costs as a point of reference. Revenue, net of other direct costs and gross profit as a percentage of revenue, net of other direct costs are non-GAAP measures and may not be comparable to similarly titled items reported by other companies.

        Cost of revenue, net of other direct costs reflects the direct cost of our own personnel (including fringe benefits and overhead expense) associated with revenue, net of other direct costs.

        Our total cost of revenue, net of other direct costs, as well as in our general and administrative costs, includes an expense for company-provided stock matches. Our strategy as a privately-held company has been to encourage employee ownership of company stock by providing stock matches on certain purchases of our common stock and common stock units, as well as a means to raise capital as there has not been a public market to do so. To the extent that employees purchase stock and stock units directly or by designating previously earned retirement funds, we have provided a match on a portion of the stock purchased. In addition, in mergers and acquisitions, as well as key hires, we have from time to time, provided discretionary matches beyond the typical match. The standard matching percentage for fiscal years 2004, 2005 and 2006 was primarily 18%. Compensation expense associated with these stock matches, which is included in both cost of revenue, net of other direct costs and general and administrative expenses under GAAP, is considered a function of the level of stock purchased by employees and not a cost of work performed.

        Because it is difficult to predict with any precision the amount of stock that will be purchased by employees, our stock match expense can vary significantly from period to period and tends to be a function of the level of our mergers and acquisitions activity. We anticipate that, once there is a public market for our stock, we will reduce the overall matches to employees, including those obtained through mergers and acquisitions.

        Equity in earnings of joint ventures includes our portion of fees added by joint ventures in which we participate in client billings for services performed by joint venture partners and earnings from investments in non-controlled and non-consolidated joint ventures where the joint venture employs its own employees.

        General and administrative expenses include all corporate overhead expenses, including personnel, occupancy, administrative, performance earnings plan accruals, taxes, benefits and other operating expenses, and prior to fiscal 2002, amortization expense of goodwill acquired through acquisitions. In fiscal 2002, we discontinued amortizing goodwill and commenced testing our goodwill for impairment in accordance with Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards, or SFAS, No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). To date, we have not recognized, nor do we expect to recognize in the future, any expense related to goodwill impairment.

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Should we determine, however, that our goodwill is impaired the related expense would be a component of our general and administrative expense.

        Included in our general and administrative expense is amortization expense of acquired intangible assets. Under SFAS No. 141, "Business Combinations" (SFAS 141) and the SEC's interpretations thereof, we must ascribe value to identifiable intangible assets other than goodwill in our purchase allocations for acquired companies. These assets include but are not limited to backlog, customer lists and trade names. To the extent we ascribe value to identifiable intangible assets that have finite lives, we amortize those values over the estimated useful lives of the assets. Such amortization expense, although non-cash in the period expensed, directly impacts our results of operations.

        It is difficult to predict with any precision the amount of expense we may record relating to acquired intangible assets. As backlog is typically the shortest lived intangible asset in our business, we would expect to see higher amortization expense in the first 12 to 18 months after a merger or acquisition has been consummated. Due to its volatility and significance of these amounts, we segregate amortization expense of acquired intangible assets from general and administrative expense. This presentation may not provide an accurate comparison to similarly titled captions reported by other companies.

        Income tax expense varies as a function of income before income tax expense and permanent non-tax deductible expenses such as amortization expense of acquired intangible assets, certain amounts of meals and entertainment expense, valuation allowance requirements and other permanent differences. We anticipate to continue our merger and acquisition strategy and as such, we anticipate that there will be variability in our effective tax rate from quarter to quarter and year to year, especially to the extent that our permanent differences increase or decrease.

Mergers and Acquisitions

        One of our key strategies is to focus on both organic growth and mergers and acquisitions of technical companies that complement our business sectors and/or expand our geographic presence.

        In fiscal year 2004, we consummated the following two acquisitions:

        In fiscal year 2005, we consummated seven mergers and acquisitions, including:

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        In fiscal year 2006, we consummated four mergers and acquisitions, including:

        In fiscal year 2007, we have consummated six mergers and acquisitions to date, including:

        The purchase prices in certain of these mergers and acquisitions are subject to purchase allocation adjustments based upon the final determination of the acquired firm's tangible and intangible net asset values as of their respective closing dates. All of our mergers and acquisitions have been accounted for as purchases and the results of operations of the acquired companies have been included in our consolidated results since the dates of the merger and/or acquisition.

Critical Accounting Policies

        Our financial statements are presented in accordance with GAAP. Highlighted below are the accounting policies that management considers significant to understanding the operations of our business.

        Contract revenue is recognized on the percentage-of-completion method, measured generally by the ratio of direct labor dollars incurred to date to the total estimated direct labor dollars at completion. We include other direct costs (for example, third party field labor, subcontractors, or the procurement of materials or equipment) in contract revenue when the costs of these items are incurred and we are responsible for the ultimate acceptability of such costs. We consider the percentage-of-completion method to be the best available measure of progress on these contracts. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to estimated costs and revenue and are recognized in the period in which the revisions are determined. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

        In the ordinary course of business, and at a minimum on a quarterly basis, we prepare updated estimates of the total forecasted contract revenue, cost and profit or loss. The cumulative effect of revisions in estimates of the total forecasted revenue and costs during the course of the work, including unapproved change orders and claims, is reflected in the accounting period in which the facts that caused the revision become known to us. The financial impact of these revisions to any one contract is a function of both the amount of the revision and the percentage of completion of the contract.

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        Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of unanticipated additional costs. We record claims in accordance with paragraph 65 of the American Institute of Certified Public Accountants Statement of Position 81-1, "Accounting for Performance of Construction-Type and Certain Production-Type Contracts." This statement of position provides that recognition of amounts related to claims as additional contract revenue is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. Those two requirements are satisfied by management's determination of the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor's performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim is recorded to the extent that contract costs relating to the claim have been incurred. The amounts recorded, if material, are disclosed in the notes to the financial statements. Costs attributable to claims are treated as costs of contract performance as incurred.

        Unbilled accounts receivable represents the excess of contract costs and profits (or contract revenue) recognized to date using the percentage-of-completion accounting method over billings to date. Unbilled work results when:

        Billings in excess of costs on uncompleted contracts represent the excess of billings to date, as allowed under the terms of a contract, over the amount of contract costs and profits (or contract revenue) recognized to date using the percentage-of-completion accounting method on certain contracts.

        We establish arrangements with other service providers to provide architecture, engineering, program management, construction management and operations and maintenance services through joint ventures. These joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is controlled by the joint venture executive committee which is typically comprised of a representative of each joint venture partner with equal voting rights, irrespective of the ownership percentage, which is generally based on the percentage split of work to be performed by each joint venture partner. The executive committee provides management oversight and assigns work efforts to the joint venture partners. In accordance with the FASB Interpretation No. 46 (revised December 2003) "Consolidation of Variable Interest Entities" (FIN 46R) joint ventures in which we are not the primary beneficiary are accounted for using the equity method. Services performed by us and billed to the joint ventures with respect to work done by us for third party customers are recorded as our revenue in the period such services are rendered. In certain joint ventures, a fee is added to the respective billings from us and the other joint venture partners on the amounts billed to third party customers. These fees result in earnings to the joint venture and are split

30

with each of the joint venture partners and paid to the joint venture partners upon collection from the third party customer. We record our allocated share of these fees as equity in earnings of joint ventures.

        Under these arrangements, if one partner is financially unable to complete its share of the contract, the other partners will be required to complete those activities. Our policy is to enter into joint venture arrangements with partners who are financially sound and who carry appropriate levels of surety bonds for a project to adequately assure completion of their assignment. We have from time to time deviated from this policy at the request of our clients. In all instances, we attempt to structure our operating agreements among the joint venture partners to minimize risk.

        Valuation Allowance.    Deferred income taxes are provided on the liability method whereby deferred tax assets and liabilities are established for the difference between the financial reporting and income tax basis of assets and liabilities, as well as operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

        Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Whether a deferred tax asset may be realized requires considerable judgment by us. In considering the need for a valuation allowance, we consider the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carry-forwards, taxable income in carry-back years if carry-back is permitted under tax law, and prudent and feasible tax planning strategies that would not normally be taken by management, in the absence of the desire to realize the deferred tax asset. Whether a deferred tax asset will ultimately be realized is also dependent on varying factors, including, but not limited to, changes in tax laws and audits by tax jurisdictions in which we operate.

        We review the need for a valuation allowance annually. If we determine we will not realize all or part of our net deferred tax asset in the future, we will record an additional valuation allowance. Conversely, if we determine that the ultimate realizability of all or part of the net deferred tax asset is more likely than not to be realized, then the amount of the valuation allowance will be reduced. This adjustment will increase or decrease income tax expense in the period of such determination.

        Undistributed Foreign Earnings.    The results of foreign operations are consolidated by us for financial reporting; however, earnings from investments in foreign operations are included in domestic taxable income only when actually or constructively received. No deferred taxes have been provided on the undistributed earnings of foreign operations of approximately $71.8 million because we plan to permanently reinvest these earnings overseas. If we were to repatriate these earnings additional taxes would be due at that time. However, these additional taxes may be offset in part by the use of foreign tax credits.

        At September 30, 2006, we had recorded goodwill in the amount of approximately $466.5 million. SFAS 142 requires that we test our goodwill, at least annually, for potential impairment. The process of testing goodwill for impairment involves the determination of the fair value of our reporting units. Inherent in such fair value determinations are certain judgments and estimates, including assumptions about our strategic plans with regard to our operations as well as the interpretation of current economic indicators and market valuations. To the extent economic conditions that would impact the future operations of our reporting units change, our goodwill may be deemed to be impaired and an impairment charge could result in a material adverse effect on our financial position or results of operations.

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        We carry professional liability insurance policies or self-insure for our initial layer of professional liability claims under our professional liability insurance policies and for a deductible for each claim even after exceeding the self-insured retention. We accrue for our portion of the estimated ultimate liability for the estimated potential incurred losses. We establish our estimate of loss for each potential claim in consultation with legal counsel handling the specific matters and on historic trends taking into account recent events. We also use an outside actuarial firm to assist us in estimating our future claims exposure. It is possible that our estimate of loss may be revised based on the actual or revised estimate of liability of the claims.

Results of Operations

 
   Three Months Ended
   Change
  
 
   December 31,
2005
   December 31,
2006
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 746,797   $ 938,549   $ 191,752   25.7 %
Other direct costs     331,449     435,417     103,968   31.4  
   
 
 
     
Revenue, net of other direct costs     415,348     503,132     87,784   21.1  
Cost of revenue, net of other direct costs     215,309     254,713     39,404   18.3  
   
 
 
     
Gross profit     200,039     248,419     48,380   24.2  
Equity in earnings of joint ventures     1,670     1,417     (253 ) (15.1 )
General and administrative expenses     176,983     219,828     42,845   24.2  
   
 
 
     
Income from operations     24,726     30,008     5,282   21.4  
Minority interest in share of earnings     1,951     1,586     (365 ) (18.7 )
Gain on sale of equity investment     —     11,286     11,286   —  
Interest expense—net     3,723     1,075     (2,648 ) (71.1 )
   
 
 
     
Income before income tax expense     19,052     38,633     19,581   102.8  
Income tax expense     6,097     13,113     7,016   115.1  
   
 
 
     
Net income   $ 12,955   $ 25,520   $ 12,565   97.0 %
   
 
 
     

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        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Three Months Ended
  
 
   December 31,
2005
   December 31,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   51.8   50.6  
   
 
 
Gross profit   48.2   49.4  
Equity in earnings of joint ventures   0.4   0.3  
General and administrative expenses   42.6   43.7  
   
 
 
Income from operations   6.0   6.0  
Minority interest in share of earnings   0.5   0.3  
Gain on sale of equity investment   0.0   2.2  
Interest expense—net   0.9   0.2  
   
 
 
Income before income tax expense   4.6   7.7  
Income tax expense   1.5   2.6  
   
 
 
Net income   3.1 % 5.1 %
   
 
 

        For the three months ended December 31, 2006, revenue increased $191.8 million, or 25.7%, to $938.5 million as compared to $746.8 million for the three months ended December 31, 2005. Of this increase, $50.8 million, or 26.5% was provided by companies acquired in the past twelve months. Excluding revenue provided by companies acquired in the past 12 months, revenue increased $141.0 million, or 18.9%. This increase was primarily attributable to continued economic growth in Australia and Canada including increased government and private sector spending in infrastructure development; growth in our building and transportation business in the U.K. and significant growth in our combat support and global maintenance and supply services for the Department of Defense.

        For the three months ended December 31, 2006, revenue, net of other direct costs increased $87.8 million, or 21.1%, to $503.1 million as compared to $415.3 million for the three months ended December 31, 2005. Of this increase, $37.5 million, or 42.7% was provided by companies acquired in the past twelve months. Excluding revenue, net of other direct costs provided by companies acquired in the past 12 months, revenue, net of other direct costs increased $50.3 million, or 12.1%. This increase was primarily attributable to continued economic growth factors noted above and increases in our self-performed work for the above mentioned combat support and global maintenance and supply services for the Department of Defense.

        For the three months ended December 31, 2006, cost of revenue, net of other direct costs increased $39.4 million, or 18.3%, to $254.7 million as compared to $215.3 million for the three months ended December 31, 2005. Of this increase, $18.8 million, or 47.8% was incurred by companies acquired in the past 12 months. Excluding cost of revenue, net of other direct costs associated with companies acquired in the past twelve months, cost of revenue, net of other direct costs increased $20.6 million, or 9.6%. Included in cost of revenue, net of other direct costs is stock match expense of $2.9 million and $1.0 million for the three months ended December 31, 2006 and the three months ended December 31, 2005, respectively. The preponderance of our cost of revenue, net of other direct

33

costs is employee and employee related costs. As we realize increases in our revenue, net of other direct costs, we will realize corresponding increases in our headcount and employee and employee related costs. To the extent we increase our billable hours without increasing our headcount, our margins improve. For the three months ended December 31, 2006, cost of revenue, net of other direct costs, as a percentage of revenue, net of other direct costs, was 50.6% as compared to 51.8% for the three months ended December 31, 2005.

        For the three months ended December 31, 2006, gross profit increased $48.4 million, or 24.2%, to $248.4 million as compared to $200.0 million for the three months ended December 31, 2005. Of this increase, gross profit provided by companies acquired in the past 12 months was $18.6 million, or 38.5%. Excluding gross profit provided by companies acquired in the past 12 months, gross profit increased $29.8 million, or 14.9%. This increase was primarily attributable to higher gross profit margins in our environmental compliance projects as well as higher margins in certain combat support and global maintenance and supply services. For the three months ended December 31, 2006, gross profit, as a percentage of revenue, net of other direct costs, was 49.4% as compared to 48.2% for the three months ended December 31, 2005.

        For the three months ended December 31, 2006, equity in earnings of joint ventures decreased $0.3 million, or 15.1%, to $1.4 million as compared to $1.7 million for the three months ended December 31, 2005 resulting from lower activities in non-consolidated/non-controlled joint ventures.

        For the three months ended December 31, 2006, general and administrative expenses increased $42.8 million, or 24.2%, to $219.8 million as compared to $177.0 million for the three months ended December 31, 2005. Included in general and administrative expenses is stock match expense of $1.0 million and $0.4 million for the three months ended December 31, 2006 and the three months ended December 31, 2005, respectively. For the three months ended December 31, 2006, general and administrative expenses, as a percentage of revenue, net of other direct costs, were 43.7% as compared to 42.6% for the three months ended December 31, 2005. The increase was primarily attributable to growth in revenue noted above, increased headcount associated with acquired companies, continued investments throughout the organization to support strategic initiatives and expenses incurred related to our becoming a public reporting company, including Sarbanes-Oxley Act of 2002 (SOX) compliance efforts partially offset by a decrease of $2.5 million in amortization expense of acquired intangible assets.

        In the three months ended December 31, 2006, we sold our minority interest in an equity investment in the U.K. for 7.5 million GBP, or approximately $14.7 million. Related to this sale, we recorded a gain on the sale of $11.3 million.

        For the three months ended December 31, 2006, net interest expense decreased $2.6 million, or 71.1%, to $1.1 million as compared to $3.7 million for the three months ended December 31, 2005. This decrease was primarily attributable to lower borrowings in the three months ended December 31, 2006 as compared to the prior year. In three months ended December 31, 2005, we had higher

34

borrowings under our senior credit facility associated with acquisitions completed in the latter part of fiscal year 2005 and the first quarter of fiscal year 2006.

        For the three months ended December 31, 2006, income tax expense increased $7.0 million, or 115.1%, to $13.1 million as compared to $6.1 million for the three months ended December 31, 2005. The effective tax rate for the three months ending December 31, 2006 was 33.9% as compared to 32.0% for the three months ended December 31, 2005.

        The factors described above resulted in net income of $25.5 million for the three months ended December 31, 2006 as compared to net income of $13.0 million for the three months ended December 31, 2005.

Results of Operations by Reportable Segment:

Professional Technical Services

 
   Three Months Ended
    
    
  
 
   Change
  
 
   December 31,
2005
   December 31,
2006
  
 
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 612,264   $ 753,545   $ 141,281   23.1 %

Revenue, net of other direct costs
 
$
399,599
 
$
482,781
 
$
83,182
 
20.8
%
Cost of revenue, net of other direct costs     207,468     242,745     35,277   17.0 %
   
 
 
 
 
Gross profit   $ 192,131   $ 240,036   $ 47,905   24.9 %
   
 
 
 
 

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Three Months Ended
  
 
   December 31,
2005
   December 31,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   51.9   50.3  
   
 
 
Gross profit   48.1 % 49.7 %
   
 
 

        For the three months ended December 31, 2006, revenue for our PTS segment increased $141.3 million, or 23.1%, to $753.5 million as compared to $612.3 million for the three months ended December 31, 2005. Of this increase, $50.8 million, or 35.9% was provided by companies acquired in the past twelve months. Excluding revenue provided by companies acquired in the past 12 months, revenue for our PTS segment increased $90.5 million, or 14.8%. This increase was primarily attributable to continued economic growth in Australia and Canada including increased government and private sector spending in infrastructure development and growth in our building and transportation business in the U.K.

35

        For the three months ended December 31, 2006, revenue, net of other direct costs for our PTS segment increased $83.2 million, or 20.8%, to $482.8 million as compared to $399.6 million for the three months ended December 31, 2005. Of this increase, $37.4 million, or 45.0% was provided by companies acquired in the past twelve months. Excluding revenue, net of other direct costs provided by companies acquired in the past 12 months, revenue, net of other direct costs for our PTS segment increased $45.7 million, or 11.4%. This increase was primarily attributable to the factors mentioned above.

        For the three months ended December 31, 2006, cost of revenue, net of other direct costs for our PTS segment increased $35.3 million, or 17.0%, to $242.7 million as compared to $207.5 million in the three months ended December 31, 2005. Of this increase, $18.8 million, or 53.3% was incurred by companies acquired in the past twelve months. Excluding cost of revenue, net of other direct costs incurred by companies acquired in the past twelve months, cost of revenue, net of other direct costs increased by $16.5 million, or 7.9%. This lower rate of growth as compared to revenue, net of other direct costs was primarily attributable to higher margins of acquired companies, in particular those with an environmental management practice and margin improvement in our Canadian and U.K. operations. For the three months ended December 31, 2006, cost of revenue, net of other direct costs, as a percentage of revenue, net of other direct costs, was 50.3% as compared to 51.9% for the three months ended December 31, 2005.

        For the three months ended December 31, 2006, gross profit for our PTS segment increased $47.9 million, or 24.9%, to $240.0 million as compared to $192.1 million for the three months ended December 31, 2005. Of this increase, $18.6 million, or 38.8% was provided by companies acquired in the past 12 months. Excluding gross profit provided by companies acquired in the past 12 months, gross profit increased $29.3 million, or 15.2%. The increases were primarily attributable to success fees associated with a project in Australia, margin improvements in our Canadian and U.K. operations as well as our U.S. transportation sector. For the three months ended December 31, 2006, gross profit, as a percentage of revenue, net of other direct costs, was 49.7% as compared to 48.1% for the three months ended December 31, 2005.

        For the three months ended December 31, 2006, equity in earnings of joint ventures for our PTS segment decreased $0.4 million, or 47.5%, to $0.4 million as compared to $0.8 million for the three months ended December 31, 2005.

 
   Three Months Ended
   Change
  
 
   December 31,
2005
   December 31,
2006
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 134,479   $ 184,680   $ 50,201   37.3 %

Revenue, net of other direct costs
 
$
13,574
 
$
20,086
 
$
6,512
 
48.0
%
Cost of revenue, net of other direct costs     6,954     11,969     5,015   72.1 %
   
 
 
     
Gross profit   $ 6,620   $ 8,117   $ 1,497   22.6 %
   
 
 
     

36

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Three Months Ended
  
 
   December 31,
2005
   December 31,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   51.2   59.6  
   
 
 
Gross profit   48.8 % 40.4 %
   
 
 

        For the three months ended December 31, 2006, revenue for our MSS segment increased $50.2 million, or 37.3%, to $184.7 million as compared to $134.5 million for the three months ended December 31, 2005, none of which was provided by companies acquired in the past 12 months. This increase was primarily attributable to significant growth in our self-performed work for combat support and global maintenance and supply services for the Department of Defense, offset by lower levels of other direct costs.

        For the three months ended December 31, 2006, revenue, net of other direct costs for our MSS segment increased $6.5 million, or 48.0%, to $20.1 million as compared to $13.6 million for the three months ended December 31, 2005. The remaining increase was primarily attributable to growth in our self-performed work for the above mentioned combat support and global maintenance and supply services for the Department of Defense.

        For the three months ended December 31, 2006, cost of revenue, net of other direct costs for our MSS segment increased $5.0 million, or 72.1%, to $12.0 million as compared to $7.0 million for the three months ended December 31, 2005. For the three months ended December 31, 2006, cost of revenue, net of other direct costs, as a percentage of revenue, net of other direct costs, was 59.6% as compared to 51.2% for the three months ended December 31, 2005.

        For the three months ended December 31, 2006, gross profit for our MSS segment increased $1.5 million, or 22.6%, to $8.1 million as compared to $6.6 million for the three months ended December 31, 2005. For the three months ended December 31, 2006, gross profit, as a percentage of revenue, net of other direct costs, was 40.4% as compared to 48.8% for the three months ended December 31, 2005. However, for the three months ended December 31, 2006, gross profit, as a percentage of revenue, was 4.4% as compared to 4.9% for the three months ended December 31, 2005. This decrease was primarily attributable to the completion of a higher margin project in the 2005 time period.

        For the three months ended December 31, 2006, equity in earnings of joint ventures for our MSS segment increased $1.3 million, or 144.4%, to $2.2 million as compared to $0.9 million for the three months ended December 31, 2005 primarily due to our participation in the Nevada Test Site project. Equity in earnings of joint ventures varies from period to period based upon the services performed for non-controlled and non-consolidated joint ventures.

37

Fiscal year ended September 30, 2006 compared to the fiscal year ended September 30, 2005

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2005
   September 30,
2006
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 2,395,340   $ 3,421,492   $ 1,026,152   42.8 %
Other direct costs     932,797     1,521,775     588,978   63.1  
   
 
 
     
Revenue, net of other direct costs     1,462,543     1,899,717     437,174   29.9  
Cost of revenue, net of other direct costs     785,066     993,909     208,843   26.6  
   
 
 
     
Gross profit     677,477     905,808     228,331   33.7  
Equity in earnings of joint ventures     2,352     6,554     4,202   178.7  
General and administrative expenses     581,529     808,953     227,424   39.1  
   
 
 
     
Income from operations     98,300     103,409     5,109   5.2  
Minority interest in share of earnings     8,453     13,924     5,471   64.7  
Interest expense—net     7,054     10,576     3,522   49.9  
   
 
 
     
Income before income tax expense     82,793     78,909     (3,884 ) (4.7 )
Income tax expense     28,979     25,223     (3,756 ) (13.0 )
   
 
 
     
Net income   $ 53,814   $ 53,686   $ (128 ) (0.2 )%
   
 
 
     

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   53.7   52.3  
   
 
 
Gross profit   46.3   47.7  
Equity in earnings of joint ventures   0.2   0.3  
General and administrative expenses   39.8   42.6  
   
 
 
Income from operations   6.7   5.4  
Minority interest in share of earnings   0.5   0.6  
Interest expense—net   0.5   0.6  
   
 
 
Income before income tax expense   5.7   4.2  
Income tax expense   2.0   1.4  
   
 
 
Net income   3.7 % 2.8 %
   
 
 

        For fiscal 2006, revenue was $3.4 billion, an increase of $1.0 billion, or 42.8%, over fiscal 2005. Of this increase, $414.4 million was provided by companies acquired in the past 12 months. Excluding revenue provided by companies acquired in the past 12 months, revenue increased $611.8 million, or 25.5% over fiscal 2005. Revenue increased among most of our sectors and geographic markets. In particular, there was strong growth in our MSS segment due to increased revenue in several existing and new contract awards.

38

        For fiscal 2006, revenue, net of other direct costs was $1.9 billion, an increase of $437.2 million, or 29.9%, over fiscal 2005. Of this increase, $281.9 million was provided by companies acquired in the past 12 months. Excluding revenue, net of other direct costs provided by companies acquired in the past 12 months, revenue, net of other direct costs increased $155.3 million, or 10.6% over fiscal 2005. The difference between the growth rates of our revenue and revenue, net of other direct costs is primarily attributable to the level of subcontracted costs and other direct costs which can vary significantly from period to period depending on contract requirements and contract mix. In addition, as we realize variations in our billable hours or utilization rates, revenue, net of other direct costs will vary.

        For fiscal 2006, cost of revenue, net of other direct costs was $993.9 million, an increase of $208.8 million, or 26.6%, over fiscal 2005. Of this increase, $128.2 million was incurred by companies acquired in the past 12 months. Excluding cost of revenue, net of other direct costs incurred by companies acquired in the past 12 months, cost of revenue, net of other direct costs increased $80.6 million, or 10.3% over fiscal 2005. Included in costs of revenue, net of other direct costs is stock match expense of $10.9 million and $2.4 million in fiscal 2006 and fiscal 2005, respectively. The cost of revenue, net of other direct costs across our business segments was generally in line with the changes in revenue, net of other direct costs for our business segments.

        Gross profit was $905.8 million in fiscal 2006, an increase of $228.3 million, or 33.7% over fiscal 2005. Of this increase, $153.7 million was provided by companies acquired in the past 12 months. Excluding gross profit provided by companies acquired in the past 12 months, gross profit increased $74.6 million, or 11.0% over fiscal 2005. As a percentage of revenue, net of other direct costs, gross profit was 46.3% and 47.7% in fiscal 2005 and 2006, respectively. The increase in fiscal 2006 was primarily attributable to higher margins that were added through mergers and acquisitions in the past year in addition to margin improvements in our foreign operations.

        Equity in earnings of joint ventures was $6.5 million in fiscal 2006, an increase of $4.2 million over fiscal 2005 resulting from growth in our joint venture activities.

        General and administrative expenses were $809.0 million in fiscal 2006, up $227.4 million, or 39.1%, over fiscal 2005. As a percentage of revenue, net of other direct costs, general and administrative expenses increased from 39.8% in fiscal 2005 to 42.6% in fiscal 2006.

        Included in general and administrative expense is amortization expense of acquired intangible assets. This amortization expense was $14.5 million in fiscal 2006, up $11.5 million, or 383.3%, over fiscal 2005 as a result of recent mergers and acquisitions. This expense will vary as we consummate mergers and acquisitions, however, we expect the amortization expense to be higher during the first 12 to 18 months following the acquisition due to the short-term nature of acquired backlog.

        Also included in general and administrative expense is stock match expense of $3.8 million and $0.8 million in fiscal 2006 and fiscal 2005, respectively.

        Also included in general and administrative expense is approximately $4.0 million in expense incurred related to our becoming a public reporting company, including our SOX compliance efforts.

39


We expect to continue to incur material levels of expense for our SOX compliance efforts through fiscal 2007 and 2008.

        This overall increase in our general and administrative expense was largely the result of increased personnel, including personnel associated with acquired companies, the factors described above, increased costs to support growth and compliance efforts, as well as one-time expenses related to recent mergers and acquisitions of $5.5 million.

        An overall increase in our business activity, higher gross profit, offset by higher general and administrative expenses, resulted in income from operations of $103.4 million in fiscal 2006, an increase of $5.1 million, or 5.2%, from $98.3 million in fiscal 2005.

        Interest expense, net of $3.5 million of interest income, increased to $10.6 million in fiscal 2006, compared to $7.1 million in fiscal 2005. This increase is primarily attributable to higher average borrowings throughout the year to fund mergers and acquisitions, partially offset by strong cash flow from operations, $128.4 million in excess proceeds from the $235.0 million sale of our Class F and Class G convertible stock and a $1.1 million gain on the termination of our interest-rate swap contracts. At September 30, 2006, borrowings under our Amended and Restated Credit Agreement, our Term Credit Agreement and senior notes outstanding totaled $133.8 million, as compared to $229.7 million at September 30, 2005.

        Income tax expense was $25.2 million in fiscal 2006, compared to $29.0 million in fiscal 2005. The effective tax rate was 32.0% in fiscal 2006, as compared to 35.0% in fiscal 2005. The decrease in the effective tax rate was primarily attributable to the favorable resolution of certain contingencies relating to audits that were unresolved at September 30, 2005.

        The factors described above resulted in net income of $53.7 million in fiscal 2006, as compared to net income of $53.8 million in fiscal 2005.

Results of Operations by Reportable Segment

Professional Technical Services

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2005
   September 30,
2006
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 2,082,618   $ 2,772,833   $ 690,215   33.1 %

Revenue, net of other direct costs
 
$
1,415,450
 
$
1,787,078
 
$
371,628
 
26.3
%
Cost of revenue, net of other direct costs     753,231     914,773     161,542   21.4 %
   
 
 
     
Gross profit   $ 662,219   $ 872,305   $ 210,086   31.7 %
   
 
 
     

40

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   53.2   51.2  
   
 
 
Gross profit   46.8 % 48.8 %
   
 
 

        Revenue for our PTS segment was $2.8 billion in fiscal 2006, an increase of $690.2 million, or 33.1%, over fiscal 2005. Of this increase, $414.4 million was provided by companies acquired in the past 12 months. Excluding revenue provided by companies acquired in the past 12 months, revenue increased $275.8 million, or 13.2% over fiscal 2005. PTS experienced growth throughout most of its business areas, with the exception of U.S. transportation operations due to temporary delays on certain large transportation projects.

        Revenue, net of other direct costs for our PTS segment was $1.8 billion in fiscal 2006, an increase of $371.6 million, or 26.3%, over fiscal 2005. Of this increase, $281.9 million was provided by companies acquired in the past 12 months. Excluding revenue, net of other direct costs provided by companies acquired in the past 12 months, revenue, net of other direct costs increased $89.7 million, or 6.3%, over fiscal 2005. Revenue, net of other direct costs increased at a lower rate as compared to revenue due to higher pass-through costs to subcontractors included in revenue.

        The cost of revenue, net of other direct costs for our PTS segment was $914.8 million in fiscal 2006, an increase of $161.5 million, or 21.4%, over fiscal 2005. Of this increase, $128.2 million was incurred by companies acquired in the past 12 months. Excluding cost of revenue, net of other direct costs incurred by companies acquired in the past 12 months, cost of revenue, net of other direct costs increased $33.3 million, or 4.4%.

        Gross profit for our PTS segment was $872.3 million in fiscal 2006, an increase of $210.1 million, or 31.7% over fiscal 2005. Of this increase, $153.7 million was provided by companies acquired in the past 12 months. Excluding gross profit provided by companies acquired in the past 12 months, gross profit increased $56.4 million, or 8.5%. As a percentage of revenue, net of other direct costs, gross profit was 48.8% of revenue, net of other direct costs in fiscal 2006 as compared to 46.8% in fiscal 2005. These changes were attributable to the factors described above.

        Equity in earnings of joint ventures for our PTS segment was $3.0 million in fiscal 2006, an increase of $0.6 million over fiscal 2005.

41

Management Support Services

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2005
   September 30,
2006
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 309,053   $ 647,188   $ 338,135   109.4 %

Revenue, net of other direct costs
 
$
42,977
 
$
89,794
 
$
46,817
 
108.9
%
Cost of revenue, net of other direct costs     29,010     50,921     21,911   75.5 %
   
 
 
     
Gross profit   $ 13,967   $ 38,873   $ 24,906   178.3 %
   
 
 
     

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
Revenue, net of other direct costs   100.0 % 100.0 %
Cost of revenue, net of other direct costs   67.5   56.7  
   
 
 
Gross profit   32.5 % 43.3 %
   
 
 

        Revenue for our MSS segment was $647.2 million in fiscal 2006, an increase of $338.1 million, or 109.4%, over fiscal 2005, none of which was provided by companies acquired in the past 12 months. The increase in revenue was primarily attributable to the continuing military activities in the Middle East, resulting in demand for maintenance and operations of installations as well as modification work on military vehicles and systems. We also realized a substantial increase in the value of our indefinite delivery/indefinite quantity contracts. The nature of our work task orders focus on establishing facilities, general support and maintenance for U.S. military pre-positioned stocks, logistics, equipment and fleet management.

        Revenue, net of other direct costs for our MSS segment was $89.8 million in fiscal 2006, an increase of $46.8 million, or 108.9% over fiscal 2005. Revenue, net of other direct costs increased at a slower rate than revenue due to a higher amount of pass-through costs that are included in revenue.

        The cost of revenue, net of other direct costs for our MSS segment was $50.9 million in fiscal 2006, an increase of $21.9 million, or 75.5% over fiscal 2005. This increase was due to higher indirect expenses associated with the increase in business volume and employee-related expenses.

        Gross profit for our MSS segment was $38.9 million in fiscal 2006, an increase of $24.9 million, or 178.3% over fiscal 2005. As a percentage of revenue, net of other direct costs, gross profit was 43.3% in fiscal 2006 as compared to 32.5% in fiscal 2005.

42

        Equity in earnings of joint ventures for our MSS segment was $4.9 million in fiscal 2006, an increase of $4.9 million over fiscal 2005. The increase was primarily attributable to earnings from recently formed unconsolidated joint ventures. Due to our minority interest in this joint venture, the earnings are not reflected in revenue for our MSS segment. The joint ventures provide peacekeeping services, administrative support for civilian agencies and response training for law enforcement and military personnel. In addition, the award of the management and operations contract of the U.S. government's Nevada Test Site to the limited liability company for which we serve as a key partner provided earnings contribution through contract award fee performance.

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2004
   September 30,
2005
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 2,011,975   $ 2,395,340   $ 383,365   19.1 %
Other direct costs     775,722     932,797     157,075   20.2  
   
 
 
     
Revenue, net of other direct costs     1,236,253     1,462,543     226,290   18.3  
Cost of revenue, net of other direct costs     667,697     785,066     117,369   17.6  
   
 
 
     
Gross profit     568,556     677,477     108,921   19.2  
Equity in earnings of joint ventures     2,517     2,352     (165 ) (6.6 )
General and administrative expenses     484,446     581,529     97,083   20.0  
   
 
 
     
Income from operations     86,627     98,300     11,673   13.5  
Minority interest in share of earnings     3,239     8,453     5,214   161.0  
Interest expense—net     6,968     7,054     86   1.2  
   
 
 
     
Income before income tax expense     76,420     82,793     6,373   8.3  
Income tax expense     25,984     28,979     2,995   11.5  
   
 
 
     
Net income   $ 50,436   $ 53,814   $ 3,378   6.7 %
   
 
 
     

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
    
    
 
   September 30,
2004
   September 30,
2005
    
    
Revenue, net of other direct costs   100.0 % 100.0 %      
Cost of revenue, net of other direct costs   54.0   53.7        
   
 
       
Gross profit   46.0   46.3        
Equity in earnings of joint ventures   0.2   0.2        
General and administrative expenses   39.2   39.8        
   
 
       
Income from operations   7.0   6.7        
Minority interest in share of earnings   0.2   0.5        
Interest expense—net   0.6   0.5        
   
 
       
Income before income tax expense   6.2   5.7        
Income tax expense   2.1   2.0        
   
 
       
Net income   4.1 % 3.7 %      
   
 
       

43

        For fiscal 2005, revenue was $2.4 billion, an increase of $383.4 million, or 19.1%, over fiscal 2004. Of this increase, $210.2 million was provided by companies acquired in the past 12 months. Excluding revenue provided by companies acquired in the past 12 months, revenue increased $173.2 million, or 8.6% over fiscal 2004.

        For fiscal 2005, revenue, net of other direct costs was $1.5 billion, an increase of $226.3 million, or 18.3%, over fiscal 2004. Of this increase, $147.6 million was provided by companies acquired in the past 12 months. Excluding revenue, net of other direct costs provided by companies acquired in the past 12 months, revenue, net of other direct costs increased $78.7 million, or 6.4% over fiscal 2004.

        The cost of revenue, net of other direct costs was $785.1 million in fiscal 2005, an increase of $117.4 million, or 17.6%, over fiscal 2004. Of this increase, $74.6 million was incurred by companies acquired in the past 12 months. Excluding cost of revenue, net of other direct costs incurred by companies acquired in the past 12 months, cost of revenue, net of other direct costs increased $42.8 million, or 6.4% over fiscal 2004. Included in costs of revenue, net of other direct costs is stock match expense of $2.4 million and $1.3 million in fiscal 2005 and fiscal 2004, respectively. The cost of revenue, net of other direct costs across our business segments was generally in line with the changes in revenue, net of other direct costs for each business segment.

        Gross profit was $677.5 million in fiscal 2005, an increase of $108.9 million, or 19.2% over fiscal 2004. Of this increase, gross profit provided by companies acquired in the past 12 months was $73.0 million. Excluding gross profit provided by companies acquired in the past 12 months, gross profit increased $35.9 million, or 6.3% over fiscal 2004. As a percentage of revenue, net of other direct costs, gross profit was 46.0% and 46.3% in fiscal 2004 and 2005, respectively. The slight increase in fiscal 2005 was primarily attributable to improvements in margins in our operations outside of the U.S.

        Equity in earnings of joint ventures was $2.4 million in fiscal 2005, a decrease of $0.2 million over fiscal 2004.

        General and administrative expenses were $581.5 million in fiscal 2005, up $97.1 million, or 20.0%, over fiscal 2004. As a percentage of revenue, net of other direct costs, general and administrative expenses increased from 39.2% in fiscal 2004 to 39.8% in fiscal 2005.

        Included in general and administrative expense is amortization expense of acquired intangible assets. This amortization expense was $3.0 million in fiscal 2005 as compared to $0.0 million in fiscal 2004.

        Also included in general and administrative expense is stock match expense of $0.8 million and $0.5 million in fiscal 2005 and fiscal 2004, respectively.

        Also included in general and administrative expense was increased expenditures for new corporate initiatives, including transition costs associated with implementing a company-wide enterprise resource planning (ERP) platform. Higher gross profit, offset by higher general and administrative expenses, resulted in income from operations of $98.3 million in fiscal 2005, an increase of $11.7 million, or 13.5%, from $86.6 million of income from operations in fiscal 2004.

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        Interest expense, net of $2.1 million interest income, increased slightly to $7.1 million in fiscal 2005, compared to $7.0 million in fiscal 2004. Borrowings under our credit agreement and senior notes outstanding totaled $229.7 million at September 30, 2005 as compared to $108.3 million at September 30, 2004. The difference is primarily attributable to borrowings under our credit facility to finance an acquisition in September 2005.

        Income tax expense was $29.0 million in fiscal 2005, compared to $26.0 million in fiscal 2004. The effective tax rate was 32% both in fiscal 2005 and fiscal 2004.

        The factors described above resulted in net income of $53.8 million in fiscal 2005, compared to net income of $50.4 million in fiscal 2004.

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2004
   September 30,
2005
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 1,777,718   $ 2,082,618   $ 304,900   17.2 %

Revenue, net of other direct costs
 
$
1,198,354
 
$
1,415,450
 
$
217,096
 
18.1
%
Cost of revenue, net of other direct costs     636,962     753,231     116,269   18.3 %
   
 
 
 
 
Gross profit   $ 561,392   $ 662,219   $ 100,827   18.0 %
   
 
 
 
 

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
    
    
 
   September 30,
2004
   September 30,
2005
    
    
Revenue, net of other direct costs   100.0 % 100.0 %      
Cost of revenue, net of other direct costs   53.2   53.2        
   
 
       
Gross profit   46.8 % 46.8 %      
   
 
       

        Revenue for our PTS segment was $2.1 billion in fiscal 2005, an increase of $304.9 million, or 17.2%, over fiscal 2004. Of this increase, $210.2 million was provided by companies acquired in the past twelve months. Excluding revenue of companies acquired in the past 12 months, revenue for our PTS segment increased $94.7 million, or 5.3% over fiscal 2004. PTS experienced growth throughout most of its business areas, offset by decreases in state and local government spending due to continuing budget deficits.

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        Revenue, net of other direct costs for our PTS segment was $1.4 billion in fiscal 2005, an increase of $217.1 million, or 18.1%, over fiscal 2004. Of this increase, $147.6 million was provided by companies acquired in the past 12 months. Excluding revenue, net of other direct costs of companies acquired in the past 12 months, revenue, net of other direct costs for our PTS segment increased $69.5 million, or 5.8% over fiscal 2004. Revenue, net of other direct costs increased at a higher rate as compared to revenue due to the inclusion of lower pass-through costs to subcontractors included in revenue.

        The cost of revenue, net of other direct costs for our PTS segment was $753.2 million in fiscal 2005, an increase of $116.3 million, or 18.3%, over fiscal 2004. Of this increase, $74.6 million was incurred by companies acquired in the past 12 months. Excluding cost of revenue, net of other direct costs from companies acquired in the past 12 months, cost of revenue, net of other direct costs for our PTS segment increased $41.7 million, or 6.5%, over fiscal 2004.

        Gross profit for our PTS segment was $662.2 million in fiscal 2005, an increase of $100.8 million, or 18.0% over fiscal 2004. Of this increase, $73.0 million was provided by companies acquired in the past 12 months. Excluding gross profit provided by companies acquired in the past 12 months, gross profit for our PTS segment increased $27.8 million, or 5.0%, over fiscal 2004. As a percentage of revenue, net of other direct costs, gross profit was 46.8% in fiscal 2005 and fiscal 2004.

        Equity in earnings of joint ventures for our PTS segment was $2.4 million in fiscal 2005, a decrease of $0.2 million, or 6.6%, over fiscal 2004.

Management Support Services

 
   Fiscal Year Ended
   Change
  
 
   September 30,
2004
   September 30,
2005
   $
   %
  
 
   ($ in thousands)

  
Revenue   $ 232,143   $ 309,053   $ 76,910   33.1 %

Revenue, net of other direct costs
 
$
35,785
 
$
42,977
 
$
7,192
 
20.1
%
Cost of revenue, net of other direct costs     29,399     29,010     (389 ) (1.3 )%
   
 
 
 
 
Gross profit   $ 6,386   $ 13,967   $ 7,581   118.7 %
   
 
 
 
 

        The following table presents the percentage relationship of certain items to revenue, net of other direct costs:

 
   Fiscal Year Ended
    
    
 
   September 30,
2004
   September 30,
2005
    
    
Revenue, net of other direct costs   100.0 % 100.0 %      
Cost of revenue, net of other direct costs   82.2   67.5        
   
 
       
Gross profit   17.8 % 32.5 %      
   
 
       

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        Revenue for our MSS segment was $309.1 million in fiscal 2005, an increase of $76.9 million, or 33.1%, over fiscal 2004, none of which was provided by companies acquired in the past 12 months. The increase in MSS revenue resulted from increased revenue in operations and maintenance services for the U.S. military that was associated with the continued high level of activities in the Middle East in addition to increased revenue from our U.S. installation operation services.

        Revenue, net of other direct costs for our MSS segment was $43.0 million in fiscal 2005, an increase of $7.2 million, or 20.1%, over fiscal 2004.

        The cost of revenue, net of other direct costs for our MSS segment was $29.0 million in fiscal 2005, a decrease of $0.4 million, or 1.3% over fiscal 2004. This decrease in costs was primarily attributable to an increase in higher margin contracts for support service. The support contracts generally carry higher margins than operation and maintenance and field-based services contracts.

        Gross profit for our MSS segment was $14.0 million in fiscal 2005, an increase of $7.6 million, or 118.7%, over fiscal 2004. As a percentage of revenue, net of other direct costs, gross profit was 32.5% in fiscal 2005 as compared to 17.8% in fiscal 2004.

Seasonality

        We experience seasonal trends in our business. Our revenue is typically lower in the first quarter of our fiscal year, primarily due to lower utilization rates attributable to holidays recognized around the world. Our revenue is typically higher in the last half of the year. Many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. In addition, we find that the U.S Federal government tends to authorize more work during the period preceding the end of its fiscal year, September 30. Further, our construction management revenue typically increases during the high construction season of the summer months. For these reasons coupled with the number and significance of client contracts commenced and completed during a period as well as the time of expenses incurred for corporate initiatives, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.

Quarterly Results of Operations

        The following table shows, for the periods indicated, unaudited selected quarterly financial data from our consolidated statements of income modified to display the effect of the non-GAAP measure revenue, net of other direct costs in which our management uses to analyze our results of operations (see "Components of Income and Expense" contained earlier in this discussion). We believe this data includes all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of operations for these periods. The unaudited selected quarterly financial data below should be read in conjunction with our audited consolidated financial statements and

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related notes included elsewhere in this prospectus. Our operating results in any one quarter are not necessarily indicative of the results that may be expected for any future period.

Fiscal Year 2006:
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
 
   (in thousands)
Revenue   $ 746,797   $ 858,930   $ 911,486   $ 904,279
Other direct costs     331,450     369,089     417,057     404,179
   
 
 
 
Revenue, net of other direct costs     415,347     489,841     494,429     500,100
Cost of revenue, net of other direct costs     215,308     260,818     261,524     256,259
   
 
 
 
Gross profit     200,039     229,023     232,905     243,841
Equity in earnings of joint ventures     1,670     893     1,554     2,437
General and administrative expenses     176,983     204,838     209,340     217,792
   
 
 
 
Income from operations     24,726     25,078     25,119     28,486
Minority interest in share of earnings     1,951     3,530     3,022     5,421
Interest expense — net     3,723     4,067     2,528     258
   
 
 
 
Income before income tax expense     19,052     17,481     19,569     22,807
Income tax expense     6,097     5,594     6,262     7,270
   
 
 
 
Net income   $ 12,955   $ 11,887   $ 13,307   $ 15,537
   
 
 
 

Reconciliation of Cost of Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Other direct costs   $ 331,450   $ 369,089   $ 417,057   $ 404,179
Cost of revenue, net of other direct costs     215,308     260,818     261,524     256,259
   
 
 
 
Cost of revenue   $ 546,758   $ 629,907   $ 678,581   $ 660,438
   
 
 
 
Fiscal Year 2005:
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
 
   (in thousands)
Revenue   $ 531,064   $ 579,507   $ 624,931   $ 659,838
Other direct costs     205,983     214,702     247,920     264,192
   
 
 
 
Revenue, net of other direct costs     325,081     364,805     377,011     395,646
Cost of revenue, net of other direct costs     175,315     197,532     203,515     208,704
   
 
 
 
Gross profit     149,766     167,273     173,496     186,942
Equity in earnings of joint ventures     763     223     130     1,236
General and administrative expenses     130,090     146,695     149,559     155,185
   
 
 
 
Income from operations     20,439     20,801     24,067     32,993
Minority interest in share of earnings     1,465     2,504     2,329     2,155
Interest expense — net     1,763     2,286     1,366     1,639
   
 
 
 
Income before income tax expense     17,211     16,011     20,372     29,199
Income tax expense     6,023     5,604     7,130     10,222
   
 
 
 
Net income   $ 11,188   $ 10,407   $ 13,242   $ 18,977
   
 
 
 

Reconciliation of Cost of Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Other direct costs   $ 205,983   $ 214,702   $ 247,920   $ 264,192
Cost of revenue, net of other direct costs     175,315     197,532     203,515     208,704
   
 
 
 
Cost of revenue   $ 381,298   $ 412,234   $ 451,435   $ 472,896
   
 
 
 

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Liquidity and Capital Resources

        We have historically relied on cash flow from operations, proceeds from sales of stock (both to employees and to institutional investors) and borrowings under debt facilities to satisfy our working capital requirements as well as to fund share repurchases and mergers and acquisitions. In the future, we may need to raise additional funds through public and/or additional private debt or equity financings to take advantage of business opportunities, including existing business growth and mergers and acquisitions.

        At December 31, 2006, cash and cash equivalents was $137.8 million, an increase of $9.9 million, or 7.7%, from September 30, 2006. This increase was primarily attributable to higher cash balances held in consolidated joint ventures.

        Net cash provided by operating activities was $43.7 million for the three months ended December 31, 2006, an increase of $62.2 million from the net cash used in operating activities of $18.6 million for the three months ended December 31, 2005. The increase was primarily attributable to higher collections of accounts receivable in both of our operating segments, advanced billings to clients in our MSS operating segment and lower income tax payments.

        Net cash provided by operating activities was $121.3 million for the year ended September 30, 2006, an increase of $74.7 million from the net cash provided by operating activities of $46.6 million for the year ended September 30, 2005. The increase was primarily attributable to a more efficient use of working capital as well as higher earnings before non-cash expenses.

        Net cash used in investing activities was $4.6 million for the three months ended December 31, 2006, a decrease of $36.2 million from the net cash used in investing activities of $40.9 million in the three months ended December 31, 2005. For the three months ended December 31, 2006, net cash used in business combinations was $6.2 million as compared to $34.1 million used in business combinations for the comparable period last year, primarily a result of cash used to facilitate the EDAW merger.

        Net cash used in investing activities was $71.8 million for the year ended September 30, 2006, a decrease of $65.2 million from the net cash used in investing activities of $137.0 million in the year ended September 30, 2005. For the year ended September 30, 2006, net cash used in business combinations was $53.3 million as compared to $158.9 million used in business combinations for the prior fiscal year. We continue to invest in our initiative to re-design our business processes and to implement a global enterprise resource planning (ERP) system. In fiscal 2006, we capitalized $6.7 million in costs associated with our ERP system, as compared to $10.8 million in fiscal 2005. For the year ended September 30, 2006, proceeds from the sale of property and equipment totaled $21.3 million as compared to $0.8 million in the prior fiscal year. This increase was primarily related to the sale of an office building in Orange, California.

        Net cash used in financing activities was $29.8 million, for the three months ended December 31, 2006, a decrease of $102.6 million from cash provided by financing activities of $72.8 million in the comparable period last year, primarily as a result of lesser borrowings to facilitate mergers and acquisitions due to strong cash flow provided from operations.

        Net cash provided by financing activities was $23.8 million for the year ended September 30, 2006, as compared to net cash provided by financing activities of $84.1 million in the year ended September 30, 2005. In fiscal 2006, net cash provided by financing activities was largely the result of proceeds from the sale of our stock, notably the Class F and Class G convertible preferred stock, offset by the redemption of our Class D convertible preferred stock and related warrants and net repayments of borrowings under our credit agreements.

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        Working capital, or current assets less current liabilities, decreased $23.2 million, or 11.5%, from $201.3 million at September 30, 2006 to $178.1 million at December 31, 2006 largely as a result of greater scheduled amortization of senior notes and increases in taxes payable. Working capital increased $30.7 million, or 18.0%, from $170.6 million at September 30, 2005 to $201.3 million at September 30, 2006 largely as a result of merger and acquisition activity as well as strong revenue growth. Net accounts receivable which includes billed and unbilled costs and fees, net of billings in excess of costs on uncompleted contracts, decreased $9.0 million, or 1.2% to $760.9 million at December 30, 2006 from $769.9 million at September 30, 2006. Net accounts receivable increased $188.9 million, or 32.5% to $769.9 million at September 30, 2006 from $581.0 million at September 30, 2005. For the same period, annual revenue increased at a notably higher level of $1.0 billion, or 43.1%, from $2.4 billion to $3.4 billion.

        Because our revenue depends to a great extent on billable labor hours, most of our charges are invoiced following the end of the month in which the hours were worked, the majority usually within 15 days. Other direct costs are normally billed along with labor hours. However, as opposed to salary costs, which are generally paid on either a bi-weekly or monthly basis, other direct costs are generally not paid until we receive payment (in some cases in the form of advances) from our customer.

        At September 30, 2006 and December 31, 2006, our long-term obligations consisted of the following:

 
   September 30, 2006
   December 31, 2006
  
 
   (in thousands)

  
Amended and Restated Credit Agreement   $ —   $ —  
Term Credit Agreement     65,000     57,000  
Senior Notes     68,810     68,810  
Bank Overdraft Facilities     2,716     5,895  
Other Debt     929     1,931  
   
 
 
Total long-term obligations     137,455     133,636  
Less: Current portion of long-term obligations     (14,665 )   (29,521 )
   
 
 
Long-term obligations, less current portion   $ 122,790   $ 104,115  
   
 
 

        We have an unsecured senior credit agreement with a syndicate of banks to support our working capital needs. On September 22, 2006, this facility was extended to March 31, 2011. The facility consists of a revolving line of credit in the amount of $300.0 million which includes a sub-limit for standby letters of credit of $50.0 million. We may borrow, at our option, at either (a) a base rate (the greater of the Federal Funds rate plus 0.50% or the bank's reference rate) plus a margin which ranges from 0.00% to 0.25%, or (b) an offshore, or LIBOR, rate plus a margin which ranges from 0.75% to 1.75%, depending on our leverage ratio. In addition to these borrowing rates, there is a commitment fee which ranges from 0.175% to 0.375% on any unused commitment. Borrowings under the credit facility are limited by certain affirmative and negative financial covenants, which include maximum leverage restrictions, minimum fixed charge coverage and minimum net worth maintenance. At September 30, 2006 and December 31, 2006, there were no borrowings under the credit facility. At September 30, 2006 and December 31, 2006, outstanding standby letters of credit totaled $23.1 million and $23.9 million, respectively. At December 31, 2006, we had $276.1 million available for borrowing under the credit facility.

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        On September 22, 2006, certain of our wholly-owned subsidiaries closed an unsecured term credit agreement with a syndicate of banks to facilitate dividend repatriations under favorable tax terms. The term credit agreement provided for a $65.0 million, five-year term loan among four subsidiary borrowers and one subsidiary guarantor. In order to obtain more favorable pricing and other terms, we also provided a parent company guarantee. The terms and conditions of this agreement are substantially similar to those contained in our senior unsecured credit facility. Principal payments are scheduled to begin June 30, 2007, or earlier at the borrowers' discretion. At December 31, 2006, borrowings under this term credit agreement totaled $57.0 million.

        June 2008 Notes:    On June 9, 1998, we issued $60.0 million of 6.93% senior notes due June 9, 2008. The June 2008 Notes are unsecured and have an average life of seven years. The annual principal payments of $8.6 million began June 9, 2002.

        October 2008 Notes:    On September 9, 2002, we issued $25.0 million of 6.23% senior notes due October 15, 2008. The October 2008 Notes are unsecured and have an average life of five years. The annual principal payments of $8.3 million were scheduled to begin October 15, 2006; however, we elected to pre-pay the first principal payment in September 2006.

        April 2012 Notes:    On April 14, 2000, we issued $35.0 million of 8.38% senior notes due April 14, 2012. The April 2012 Notes are unsecured and have an average life of 10 years. The annual principal payments of $7.0 million are scheduled to begin April 14, 2008.

        All of the senior notes require interest to be paid either quarterly or semi-annually in arrears. The senior notes are also limited by certain affirmative and negative financial covenants, which include maximum leverage restrictions, minimum fixed charge coverage, minimum interest charge coverage and minimum net worth maintenance. Proceeds from the June 2008 Notes and the October 2008 Notes were used to repay revolving credit debt while proceeds of the April 2012 Notes were used to fund business acquisitions.

        At December, 31, 2006, we had three non-U.S. credit facilities used to cover periodic overdrafts and to issue letters of credit in the aggregate amount of $41.0 million.

        Further, at December 31, 2006, we had outstanding promissory notes of $0.9 million to former shareholders of Oscar Faber, predecessor to Faber Maunsell. These promissory notes have maturities ranging from January 2006 to April 2010.

        In February 2006, we closed a $235.0 million private placement of our Class F and Class G convertible preferred stock. In connection with the private placement, we redeemed all outstanding shares of our Class D convertible preferred stock and repurchased associated warrants to purchase common stock. Approximately $114.7 million of the $231.2 million in net proceeds was used to repay indebtedness under our senior credit facility and approximately $116.5 million was used to redeem the Class D preferred and associated warrants. The terms of the Class D convertible preferred stock contained a 7% annual dividend whereas the terms of the Class F and Class G do not require annual dividend payments.

        The Class F and Class G convertible preferred stock is redeemable on the earlier of February 9, 2012 or the date on which we sell substantially all of our assets and has other rights, privileges and

51


preferences. See "Description of Capital Stock, Certificate of Incorporation and Bylaws" for a summary of the terms of the Class F and Class G convertible preferred stock.

        Other than normal property and equipment additions and replacements, expenditures to further the implementation of our ERP system, commitments under our incentive compensation programs, repurchases of shares of our common stock, and acquisitions from time to time, we currently do not have any significant capital expenditures or outlays planned except as described below. However, if we acquire any additional businesses in the future or embark on other capital-intensive initiatives, additional working capital may be required.

        As of December 31, 2006, there was approximately $44.6 million outstanding under standby letters of credit issued primarily in connection with general and professional liability insurance programs and for contract performance guarantees. In addition, in some instances we guarantee that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

        At September 30, 2006, our defined benefit pension plans with benefit obligations in excess of plan assets had an aggregate deficit (where the projected benefit obligation exceeded the fair value of plan assets) of $117.2 million. At that same time, the excess of accumulated benefit obligations over fair value of plan assets was $84.8 million. See Note 9 to the Notes to Consolidated Financial Statements contained elsewhere in this prospectus. In the future, such pension under-funding may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors.

Contractual Commitments

        The following summarizes our contractual obligations and commercial commitments as of September 30, 2006:

Contractual Obligations and Commitments
   Total
   Less than One Year
   One to Three Years
   Three to Five Years
   More than Five Years
 
   (in thousands)
Long-term debt (including accrued interest)   $ 137,455   $ 14,665   $ 56,290   $ 59,500   $ 7,000
Operating leases     446,631     87,163     131,976     90,089     137,403
Capital leases     1,620     1,215     405     —     —
Interest     14,283     5,679     6,258     2,346     —
Pension obligations(1)     214,006     14,396     36,770     40,010     122,830
   
 
 
 
 
Total Contractual Obligations and Commitments   $ 813,995   $ 123,118   $ 231,699   $ 191,945   $ 267,233
   
 
 
 
 
(1)
Retirement and retirement plan related obligations noted under the heading "More than Five Years" are presented for the years 2012-2016.

        We believe that our cash generated from operations and amounts that we expect to be available for borrowing under credit facilities will be sufficient to meet our capital requirements, including our commitments and contingencies, for at least the next 12 months.

Recently Issued Accounting Pronouncements

        In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans" (SFAS 158). SFAS 158 requires employers to fully recognize the

52


obligations associated with single-employer defined benefit pension, retiree healthcare and other post-retirement plans in their financial statements. We will be subject to the disclosure and recognition provisions of SFAS 158 in fiscal years beginning October 1, 2006 and 2007, respectively. We are currently evaluating the impact of the recognition provisions of SFAS 158 on our results of operations and financial position.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The provisions of SFAS 157 will be effective for us in our fiscal year beginning October 1, 2008. We are currently evaluating the impact of the provisions of SFAS 157.

        In June 2006, the FASB issued FASB Interpretation, or FIN, No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements. FIN 48 prescribes that a company should use a "more-likely-than-not" recognition threshold based on the technical merits of the tax position taken. Additionally, FIN 48 provides guidance on recognition or de-recognition of interest and penalties, changes in judgment in interim periods, and disclosures of uncertain tax positions. FIN 48 became effective for us in our fiscal year beginning October 1, 2007. We are currently in the process of determining the effect of the adoption of FIN 48 on our results of operations and financial position.

        In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3" (SFAS 154), which applies to all voluntary changes in accounting principles, as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. APB Opinion No. 20 previously required that most voluntary changes in accounting principle be recognized in net income as a cumulative effect of changing to the new accounting principle. SFAS 154 now requires retrospective application to prior periods' financial statements for changes in accounting principle, unless it is impracticable to do so. SFAS 154 became effective for us in our fiscal year beginning October 1, 2006. We currently do not anticipate any voluntary changes in accounting principle or errors that would require such retroactive application.

        In April 2006, the FASB issued FASB Staff Position No. FIN 46(R)-6, "Determining the Variability to Be Considered in Applying FASB Interpretation No. 46(R)" (FSP FIN 46(R)-6), which addresses how a reporting enterprise should determine the variability to be considered in applying FIN No. 46 (revised December 2003), "Consolidation of Variable Interest Entities," or FIN 46(R). The variability that is considered in applying FIN 46(R) affects the determination of (a) whether the entity is a variable interest entity, (b) which interests are variable interests in the entity and (c) which party, if any, is the primary beneficiary of the variable interest entity. That variability will affect any calculation of expected losses and expected residual returns, if such a calculation is necessary. FSP FIN 46(R)-6 provides additional guidance to consider for determining variability. FSP FIN 46(R)-6 is effective for us beginning the first day of our fiscal quarter beginning October 1, 2006. We are currently evaluating the impact of the provisions of FSP FIN 46(R)-6 on our results of operations and financial position.

Financial Market Risks

        We are exposed to market risk, primarily related to foreign currency exchange rates and interest rate exposure of our debt obligations that bear interest based on floating rates. We actively monitor these exposures. To reduce our exposure to market risk, we have entered into derivative financial instruments such as forward contracts or interest rate hedge contracts. Our objective is to reduce, where we deem appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign exchange rates and interest rates. It is our policy and practice to use derivative financial

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instruments only to the extent necessary to manage our exposures. We do not use derivative financial instruments for speculative purposes. We currently have no material derivative instruments outstanding.

        We are exposed to foreign currency exchange rate risk resulting from our operations outside of the United States. We do not comprehensively hedge our exposure to currency rate changes; however, we limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments to be in currencies corresponding to the currency in which costs are incurred. As a result, we typically do not need to hedge foreign currency cash flows for contract work performed. The functional currency of all significant foreign operations is the local currency.

        Our senior revolving credit facility and certain other debt obligations are subject to variable rate interest which could be adversely affected by an increase in interest rates. As of September 30, 2005, September 30, 2006 and December 31, 2006, we had $130.0 million, $0.0 million and $0.0 million, respectively, outstanding in borrowings under our credit facility. Interest on amounts borrowed under the credit facility is subject to adjustment based on certain levels of financial performance. For borrowings at offshore rates, the applicable margin added can range from 0.75% to 1.75%. For fiscal 2006, our weighted average borrowings on our senior credit facility were $132.8 million. If short term floating interest rates were to increase or decrease by 1%, our annual interest expense could have increased or decreased by $1.3 million. For the three months ended December 31, 2006, our weighted average borrowings under our senior credit facility were $0.0. We invest our cash in money market securities or other high quality, short-term securities that are subject to minimal credit and market risk.

        We have selectively managed our floating interest rate exposure through the use of derivative instruments. In October 2005, we entered into two floating-to-fixed interest rate hedge contracts. From the inception through our voluntary early termination, the interest rate hedges were effective. Upon our termination of these contracts in our fourth quarter of fiscal 2006, we received a net cash settlement of approximately $1.1 million.

Subsequent Event

        As of February 20, 2007, all of our outstanding loans previously made to certain directors and senior officers under our Senior Executive Equity Investment Plan, or SEEIP, to fund purchases of Company stock were terminated and repaid.

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BUSINESS

Overview

        We are a leading global provider of professional technical and management support services to government and commercial clients on all seven continents. We provide planning, consulting, architectural and engineering design, and program and construction management services for a broad range of projects including highways, airports, bridges, mass transit systems, government and commercial buildings, water and wastewater facilities and power transmission and distribution. We also provide facilities management, training, logistics and other support services primarily for agencies of the United States government. Through our network of more than 30,000 employees in over 60 countries, we provide our services to a number of end markets, with particular strength in the transportation, facilities and environmental markets. With over 60% of our employees operating outside the United States, we believe we are well positioned to grow both in the United States and internationally. According to Engineering News-Record's (ENR) 2007 Design Survey, we are the largest general architectural and engineering design firm in the world, ranked by 2006 design revenue. In addition, we are ranked by ENR as the leading firm in numerous design end markets including transportation and general building.

        We offer our broad range of services through our two business segments: Professional Technical Services and Management Support Services.

        Professional Technical Services (PTS).    Our PTS segment delivers planning, consulting, architectural and engineering design, and program and construction management services to institutional, commercial and government clients worldwide in major end markets such as transportation, facilities, environmental management and energy/power. The transportation market includes transit and rail, highways and bridges, airports, ports and harbors. The facilities market includes governmental, institutional, commercial and industrial facilities. The environmental market includes water supply and wastewater infrastructure, water resources, and environmental management. We also provide services for projects in the mining, power and energy end markets.

        For example, we are providing master planning services for the 2012 London Summer Olympic Games, program management services through a joint venture for the Second Avenue subway line in New York City and engineering and environmental management services to support global energy infrastructure development for a number of large petroleum companies. Our PTS segment contributed

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$2.8 billion, or 81.0% of our revenue, in fiscal 2006. The following table highlights our principal PTS end markets along with a list of additional representative projects:

End Market
   Approximate
Percentage of
Fiscal 2006
PTS Segment
Revenue (%)
   Representative Projects
   Project
Locations
Transportation   29   • Second Avenue Subway
• Sydney Orbital Bypass
• Sutong Bridge
• John F. Kennedy Airport		   U.S.
Australia
China
U.S.
Facilities   43   • 2012 London Olympics
• Pentagon Renovation
• British Broadcasting Company Headquarters
• Los Alamos National Laboratory		   U.K.
U.S.
U.K.
U.S.
Environmental   24   • Harbor Area Treatment Scheme
• Chicago Calumet and Stickney Wastewater Treatment Plants
• New York City Bowery Bay		   Hong Kong
U.S.

U.S.
Energy/Power   4   • Mutnovsky Independent Power Project
• NY Public Schools Coal Conversion Project
• Sardar Sarovar Dam Automation
• Southern Provincial Rural Electrification Project		   Russia
U.S.
India
Laos

        The following two charts illustrate the diversification of our PTS revenue for the fiscal quarter ended December 31, 2006, by client type and geography.

First Quarter Fiscal 2007 Revenue by Client Type   First Quarter Fiscal 2007 Revenue by Geography
     
GRAPHIC   GRAPHIC

        Management Support Services (MSS).    Our MSS segment provides facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government. We have over 9,000 employees managing projects for over 400 contract-specific job sites for U.S. government clients such as the Department of Defense, Department of Energy and the Department of Homeland Security. For example, we manage more than 6,000 employees in Kuwait who provide logistics, security, communications and information technology services for the U.S. Army Central Command-Kuwait. We also provide operations and maintenance services for the U.S. Army's Fort Polk Joint Readiness Training Center in Louisiana. Our MSS segment contributed $647 million, or 18.9% of our revenue, in fiscal 2006, representing an increase of 109.4%

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over fiscal 2005 MSS revenue. The following table highlights representative projects in our MSS segment:

Representative Projects
   Project Locations
   Clients
• Nevada Test Site   U.S.   U.S. Dept. of Energy
• Camp Doha Army Base   Kuwait   U.S. Dept. of Defense
• Fort Polk Training Center   U.S.   U.S. Dept. of Defense
• International Civilian Police (CIVPOL)   Various worldwide   U.S. Dept. of State

Our Market Opportunity

        According to ENR, the top 500 design firms in the United States ranked by revenue generated revenue of approximately $69.6 billion in 2006, which was a 17.5% increase over 2005. The top five design firms, which includes us, accounted for 21% of this $69.6 billion market. Of this $70 billion in revenue, the largest two categories were general building and transportation, representing $16.5 billion and $13.4 billion, respectively. Water and wastewater combined represented an additional $9.1 billion in 2006 revenue. According to ENR, based on 2006 revenue, we were the #1 design firm in transportation, #1 in general building, #3 in wastewater and #4 in water.

        We believe that the growth opportunities for these markets are significant, both in the United States and internationally, fueled by the increasing global spending on infrastructure, among other factors.

Professional Technical Services

        The U.S. Department of Commerce forecasts that increases in work associated with the nonresidential building, power and highway markets will contribute to the overall value of new construction contracts awarded in the United States, which are expected to increase slightly to $1.17 trillion in 2007. The U.S. Department of Commerce projects that this growth in nonresidential construction will counter expected major declines in the value of residential construction during 2007. We are positioned to benefit from this trend in that we are focused on government, commercial and industrial projects, with no material exposure to the residential housing market.

        Transportation.    The transportation market is significant and growing, both domestically and internationally, and we expect this will continue in coming years. Transportation services include the design and construction management of a broad range of transportation infrastructure projects, including airports, seaports, bridges, tunnels, railway lines and highways. According to ENR, the top 500 engineering design firms earned $13.4 billion in revenue in 2006 as a result of transportation work, an 11.7% increase over the $12.0 billion in revenue generated in 2005 from transportation work. The U.S. Department of Commerce projected in late 2006 that the dollar value of domestic transportation construction projects would grow 11.9% during 2006 and that it will grow an additional 3% in 2007, to a value of $31 billion. The Department of Commerce also predicted that highway and street spending, which it categorizes separately from transportation, would increase 16% in 2006 and will rise another 7% in 2007 to reach $81.5 billion. In addition, FMI Corp., a Denver-based management consulting firm specializing in the construction industry, projects that transportation and highway and street construction revenues will grow 7.3% in 2007, 5.6% in 2008, 4.9% in 2009 and 4.2% in 2010. Growth in domestic transportation spending is driven by such factors as the continuation of federal funding for SAFETEA-LU, a $286 billion highway funding bill. Growth is also driven by increased domestic spending on highway projects, the increased utilization of road, rail, airport and seaport facilities, combined with the obsolescence of many existing facilities. In addition, domestic growth is driven by significant increases in the use of aviation facilities. Domestic airline passenger traffic has returned to and surpassed the 65.4 million monthly travelers level achieved prior to September 2001. Healthier state budgets have also fueled infrastructure activity. California, for example,

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passed a $20 billion bond measure for transportation in 2006 that has the potential to increase spending in this area substantially in the coming years.

        The increased momentum of public private partnerships, or PPP, has fueled alternative sources of funding for major transportation projects. These have included the sale of toll highways in Chicago and Indiana and the privatization of airports, including Chicago's Midway Airport.

        We expect growth in the U.S. transportation market will also be driven by clients seeking a broader range of services from engineering and construction firms. Clients are demanding an increased focus on program and construction management and are seeking a full range of services including project design, delivery, financing and procurement. We believe this trend will provide additional revenue for these firms.

        The international transportation market also presents growth opportunities. International transportation growth is driven by both the need to upgrade existing facilities and the demand for new infrastructure, particularly in emerging markets. China, for example, annually constructs approximately 4,000 kilometers of highways and reported investing $12 billion in a rural road construction project intended to connect all Chinese cities with a population over 200,000 and 95% of rural towns by 2010. Emerging markets are also investing heavily in aviation infrastructure. According to the U.S. Embassy in China, the country will build 108 new airports between 2004 and 2009, including what will be the world's largest airport, the Beijing International Airport, that is scheduled to open in time for the Beijing Olympics and will cover more than 1 million square meters.

        General building.    We expect this market will exhibit significant strength in the next several years. ENR reports that $16.5 billion in revenue in 2006 was earned by the top-500 design firms from general building, a 21.3% increase over the $13.6 billion in revenue generated in 2005 from general building. General building includes the construction of commercial buildings, office complexes, schools, hotels and correctional facilities. The U.S. Department of Commerce projected in late 2006 that commercial construction spending would increase 11% in 2006 and rise another 10% during 2007 to reach $90 billion, that education construction spending would rise 7% in 2006 and rise another 5% in 2007 to reach $88.3 billion, that office construction would rise 15.1% in 2006 and rise another 11.8% in 2007 to reach $61.4 billion and that lodging construction would rise 50% in 2006 and increase an additional 14.7% in 2007 to approach $22.6 billion. In addition, FMI Corp. projects that non-residential building construction revenues (excluding transportation construction revenues) will grow 9.2% in 2007, 8.6% in 2008, 8.2% in 2009 and 7.7% in 2010. Demand for commercial construction is driven by several factors, including lower commercial vacancy rates, greater investor interest in office and other commercial properties, low domestic unemployment rates, and historically low interest rates.

        In the United States, public demand for general building services is also driven by increased federal, state and local government educational spending and continuing government expenditures in other facilities such as courthouses and correctional facilities. Growth in the latter is being driven by mandatory sentencing guidelines and other judicial trends resulting in longer incarceration periods for a greater number of offenders.

        Internationally, strong global economic growth is fueling the demand for facilities design and construction. We believe we are well positioned to take advantage of international demand for such services. Over the next decade, over 400 new buildings more than 50 stories tall are expected to be built around the world in regions such as the Middle East and China, according to Emporis Buildings, an international database of building information. By 2015, half of the world's new building construction is expected to take place in China. Even today, the American Forest and Paper Association estimates that construction represents about 16% of China's GDP amid a national trend toward urbanization. We are well positioned globally to take advantage of these kinds of opportunities.

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        Water, Wastewater & Environmental Management.    There is significant global demand for water, wastewater and environmental services. This market is characterized by projects including water treatment facilities, water distribution systems, desalination plants, solid waste disposal systems, environmental impact studies, remediation of hazardous materials and pollution control. ENR reports that the water and wastewater market contributed $9.1 billion in 2006 revenue to the top-500 design firms, a 13.8% increase over the $8.0 billion in revenue contributed in 2005. FMI Corp. projects that construction revenues from water supply and sewage and waste disposal will grow 9.6% in 2007, 7.6% in 2008, 6.6% in 2009 and 5.6% in 2010.

        Domestic growth in the water, wastewater and environmental markets is driven by government regulations, including the Clean Water Act and Clean Air Act, by a growing U.S. population, and by a shift of the U.S. population toward the Southeast and Southwest, where there are significant water supply challenges. In addition, a renewed focus on micro-contaminants and carcinogens has given rise to increased centralization and standardization efforts, including increased federal involvement in water quality regulation. Internationally, demand is driven by the need to repair and upgrade local water systems and increased global population and concomitant demand for water reuse and desalinization technologies. Urbanization and rapid economic growth resulting in higher standards of living in such developing countries as India and China will drive demand for water and wastewater infrastructure development in these regions. In addition, developing nations face significant environmental issues. Governments in developing regions are likely to seek to address environmental concerns as they gain the economic means to improve the quality of life of their citizens. For example, according to the World Health Organization, seven of the ten most polluted cities in the world are located in China.

        Energy/Power.    The International Energy Agency projects that, by 2030, global demand for energy will be 50% greater than it is now, and 75% of that increase will come from developing countries. As a result, the International Energy Agency projects that $20 trillion will be invested in energy through 2030. The surge in energy demand is not only sparking increased investment in generation, but also in conservation and energy efficient systems and building design, alternative/renewable energy and conversion of coal-fired to gas-fired systems, all to mitigate the growth in demand for energy from conventional sources.

        The energy and power transmission and distribution systems in the United States are characterized by aged and deteriorating infrastructure. The poor condition of these systems is driving the need to add capacity and replace aged assets. For example, the recent failure of the Trans Alaska Pipeline, built in the late 1970's, due to internal corrosion led the U.S. Department of Transportation to order repairs and a significant new inspection regime. The Electric Power Research Institute projects $6 billion of annual transmission investments by U.S. utilities.

        Alternative energy continues to draw significant attention due to the prospect of increased demand and resulting high prices for conventional energy sources. As a result, regulatory requirements, such as the U.S. Energy Policy Act of 2005, are driving demand for alternative energy production facilities.

        Urbanization.    While U.S. cities are relatively mature and historically have suffered from population flight to suburban and other outlying areas, that trend has reversed in recent years as "baby boomers" have returned to major urban areas. Outside the United States, economic growth opportunities have caused an influx of people from rural to developing urban areas. In parts of Europe, government policy strongly encourages urban redevelopment. Urbanization creates significant opportunities for our PTS segment in all of our end markets as it creates increased demand in urban areas for transportation infrastructure, facilities and energy/power systems, greater pressure on water/wastewater systems and increased environmental pollution that needs to be mitigated. It also creates demand for urban master planning and environmental assessments.

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        The table below highlights some of the key factors driving growth in our PTS core markets.

Growth Drivers
Market
   Domestic
   International

Transportation
 
• Healthy state and local budgets
• $286 billion of federal funding for SAFETEA-LU from 2006-2010
• Increased utilization of aging transportation
• Introduction of public to private partnerships (PPP) to the United States
 
• Emerging markets creating demand for greenfield transportation infrastructure and large scale improvement projects
• Global trend towards PPP and other private sector spending on infrastructure
• Increased foreign direct investment


General Building
 
• Historically low interest rate environment driving significant spending
• Demand for nonresidential building space continues to expand
• Increased spending in hospital healthcare infrastructure as baby boomers age
• Strong demand for nonresidential / commercial space
 
• Healthy global economy
• Continued population pressures in developing urban areas such as China, Russia and India
• Urbanization trends fostering rapid residential construction spending


Water/Wastewater/ Environmental
 
• Increasing federal regulatory pressure
— Clean Water Act
— Clean Air Act
 
• Global population growth
• Increased focus on quality and safety


Energy/Power
 
• Aged infrastructure
• Regulatory requirements
 
• Developing nations' population and economic growth
• Increased urbanization

Management Support Services

        We believe the market for our MSS segment is growing. MSS segment services include facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government. The Center for Strategic and International Studies estimated that the domestic market for the kinds of facility-related services provided by our MSS segment was $36 billion in 2004, the most recent full year for which federal procurement data were available. Our MSS work is primarily for such federal government agencies as the Departments of Defense, Energy, Justice and Homeland Security. We believe that our MSS segment revenue will grow as a result of certain projected federal government budget increases, including projections by the Department of Defense that its expenditures on operations and maintenance will increase from $153 billion in 2007 to $174 billion in 2011. Growth in the MSS segment will also likely be driven by a continued government outsourcing trend due in part to an aging government workforce and on-going military operations in the Mideast and elsewhere as well as military force realignments. We believe these trends will enhance the demand for outsourcing in the government services area for firms with experience in security, logistics and overseas operations.

Our Competitive Strengths

        We believe we have the experience, relationships, technical expertise and personnel to lead our clients through their most complicated and critical technical undertakings while also delivering the level of consistent, quality service necessary to maintain long-term relationships and secure repeat engagements. Our key competitive strengths include:

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Leadership positions in large, growing markets.

        We believe the growing trend for outsourcing of professional technical and support services complements our capabilities, size and experience in providing these services and positions us to continue to strengthen our business. Based on ENR's rankings of firms by 2006 revenue, we are highly ranked in a number of key engineering and consulting services sectors, including transportation (#1), general building (#1), wastewater (#3) and water (#4). We also have a leadership position according to ENR in many key specialty technical areas within our core end markets including:

Transportation
   General Building
   Environmental
 
   Ranking
    
   Ranking
    
   Ranking
Mass Transit and Rail   1   Educational Facilities   1   Wastewater Treatment   3
Airports   1   Government Offices   1   Sanitary and Storm Sewers   2
Marine and Ports   1   Correctional Facilities   1   Sewerage and Solid Waste   2
Highways   1   Hotels/Convention Center   3   Water Supply   4
Bridges   2   Commercial Offices   4   Clean Air Compliance   4

        We are also ranked number one in New Civil Engineer's 2006 global listing (by 2005 fees) in the areas of water, buildings and roads and number two in waste and rail.

Diversification across service lines, end markets and geographies.

        We perform a broad spectrum of services for our clients, from planning and design to construction and project management and logistics. In fiscal 2006, excluding the U.S. federal government, no single customer accounted for more than 10% of our total revenue. The U.S. federal government, including the Department of Defense, Department of Energy and the Department of Homeland Security, accounted for approximately 28% of our total revenue in fiscal 2006. The U.S. federal government accounted for approximately 12% of the revenue of our PTS segment and almost all of the revenue of our MSS segment for fiscal 2006. In addition, our 25 largest projects by gross profit in fiscal 2006 accounted for only 14% of our consolidated gross profit. We believe this diversification enables us to take advantage of changing business, technological and economic conditions worldwide, and allows us to better manage our business through market cycles. We further believe we are well-positioned in geographic areas with favorable growth prospects such as China/Hong Kong and the United Arab Emirates, where we are among the largest engineering design firms. This diversification has been a key factor in our historical growth and positions us for future growth.

Global reach with local presence.

        We have a global network of more than 30,000 employees with projects in over 60 countries. We combine intimate local market knowledge and relationships with the technical expertise, size, experience and resources of one of the world's largest engineering and design services companies. We believe that our ability to share capabilities and best practices across the firm delivers significant value to our clients and enables us to win and efficiently execute projects worldwide. As of September 30, 2006, approximately 62% of our employees were located outside the United States. We operate through a number of wholly-owned subsidiaries that have the advantage of competing under several internationally known brand names in our end markets, while maintaining the recognition that they are part of AECOM, a global company.

Strong and long-standing client relationships.

        We have developed strong and long-term relationships with a number of large corporations and government entities worldwide that can lead to repeat business. For example, several of our operating companies have been providing services for over 30 years to clients such as the Illinois State Tollway Authority, U.S. Navy, Massachusetts Water Resources Authority and the Port Authority of New York and New Jersey. We believe that these types of long-term relationships allow us to better understand and be more responsive to our clients' needs and better manage their risks. These relationships also

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lead to repeat business opportunities and opportunities to expand the scope of the value-added services we provide to existing clients.

Successful history of executing and integrating acquisitions.

        We believe one of our core competencies is successfully identifying, executing and integrating acquisition opportunities. We have consummated more than 30 mergers and acquisitions since 1998 that have enabled us to expand our end markets, service offerings and geographic reach. This acquisition activity has provided us with access to new markets at lower risk and faster speed relative to our entering the markets as a new participant. We have targeted, and we will continue to target, firms that enable us to add backlog, long-term client relationships and experienced executives who can provide leadership across our company. In addition, we derive our acquisition synergies through "cross selling" the capabilities of our newly acquired companies to our existing clients and our global capabilities to clients of our newly acquired companies.

        The following is a brief summary of some of our key mergers and acquisitions since 2000:

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Experienced management team and employees.

        We have a talented, dedicated and experienced work force, located across the globe, led by an experienced executive management team. Our Chief Executive Officer and the 10 most senior members of our operating units have an average of more than 20 years of experience with AECOM and more than 25 years in our industry. We also have a large, experienced and skilled workforce. This human capital is essential to success in our industry. Our long-standing practice is to provide employee incentives, such as stock ownership, that are designed to optimize performance and to ensure our ability to attract and retain a quality work force.

        Our talented workforce is essential in allowing us to obtain quality projects. In turn, our success in winning desirable and challenging projects assists us in attracting and retaining highly qualified people.

Our Growth Strategy

        We intend to grow our business by leveraging our competitive strengths and leadership positions in our core markets while opportunistically entering new markets and geographies. Key elements of our growth strategy include:

Expand our long-standing client relationships and provide our clients with a broad range of services.

        We have long-standing relationships with a number of large corporations, public and private institutions and governmental agencies worldwide. We will continue to focus on client satisfaction along with opportunities to sell a greater range of services to clients and deliver full-service solutions for their needs. For example, as we have grown our environmental business, we have provided environmental services for transportation and other infrastructure projects in which such services have in the past been subcontracted to third parties.

        By integrating and providing a broad range of services, we believe we deliver maximum value to our clients at competitive costs. Also, by coordinating and consolidating our knowledge base, we believe we have the ability to export our leading edge technical skills to any region in the world in which our clients may need them. This advances our strategy of providing a full-service solution for our clients' needs.

Capitalize on growth opportunities in our core markets.

        Our core end markets, including transportation, general building and environmental, are expected to continue to grow. We intend to build on our leading positions in these markets to increase our market share. With our track record and our global resources, we believe we are well positioned to win projects in these markets. We believe that the need for infrastructure upgrades, environmental management and increased government spending and outsourcing of support services, among other things, will result in continued growth opportunities in our core markets.

Continue to pursue our merger and acquisition strategy.

        We intend to continue to attract other successful companies whose growth can be enhanced by joining us. This approach has served us well as we have strengthened and diversified our leadership positions both geographically, technically and across end markets. We believe that the trend towards consolidation in our industry will continue to produce attractive candidates that align with our merger and acquisition strategy. For example, we significantly strengthened our presence in the fast-growing market in the United Arab Emirates with the addition of Cansult Limited in September 2006.

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Strengthen and support human capital.

        Our experienced employees and management are our most valued resources. Attracting and retaining key personnel has been and will remain critical to our success. We will continue to focus on providing our personnel with training and other personal and professional growth opportunities, performance-based incentives, opportunities for stock ownership and other competitive benefits in order to strengthen and support our human capital base. Over the past five years, we have substantially increased our employee base. This increase comes from organic growth as well as growth from mergers and acquisitions. Our employee population has grown from approximately 12,700 employees as of September 30, 2001 to approximately 28,500 as of December 31, 2006. In 2006, we expanded our firm-wide employee engagement program to put increased focus and resources on this important strategic area. The program includes elements designed to foster professional and career development and advance leadership development, promote succession planning and firmly link employee engagement with our business objectives. We believe that our employee programs align the interests of our personnel with those of our clients and stockholders.

Our Business Segments

        The following table sets forth the revenue attributable to our business segments for the periods indicated(1):

 
   Year Ended September 30,
   Three months Ended December 31,
 
   2004
   2005
   2006
   2005
   2006
 
   (in thousands)

   (in thousands)
Professional Technical Services   $ 1,777,718   $ 2,082,618   $ 2,772,833   $ 612,264   $ 753,545
Management Support Services     232,143     309,053     647,188     134,479     184,680
   
 
 
 
 
Total   $ 2,009,861   $ 2,391,671   $ 3,420,021   $ 746,743   $ 938,225
   
 
 
 
 
(1)
For a reconciliation to the consolidated statements of income, see note 19 to the notes to our consolidated financial statements and note 6 to our condensed consolidated financial statements contained elsewhere in this prospectus.

        Our PTS segment is comprised of a broad array of services, generally provided on a fee-for-service basis. These services include planning, design, consulting, program management and construction management for industrial, commercial, institutional and government clients worldwide. For each of these services, our technical expertise includes civil, structural, process, mechanical, geotechnical systems and electrical engineering, architecture, landscape and interior design, urban and regional planning, project economics, and environmental, health and safety work.

        With our technical and management expertise, we are able to provide our clients with the full spectrum of services they may require. For example, within our environmental management service offerings, we provide regulatory compliance planning and management, environmental modeling, environmental impact assessment and environmental permitting for major capital/infrastructure projects. In addition, we provide specialized services in areas such as environmental toxicology, health and safety risk assessment, sanitary engineering, air quality analysis, water resources protection and development, remediation consulting, brownfield reclamation and sustainable land use development programs.

        Our services may be sequenced over multiple phases. For example, in the area of program management and construction management services, these services may begin with a small consulting or planning contract, and may later develop into an overall management role for the project or a series of

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projects, which we refer to as a program. Program and construction management contracts typically employ a staff of 10 to more than 100 and, in many cases, operate as an outsourcing arrangement with our staff located at the project site. For example, since 1990, we have been managing the renovation work at the Pentagon for the U.S. Department of Defense, and we currently have approximately 100 staff members located on-site. Another example of our program and construction management services would be our services related to the development of educational facilities for K-12 school districts and/or community colleges. We are performing these types of assignments throughout the U.S., including the cities of Dallas, Los Angeles and Houston.

        We provide the services in our PTS segment both directly and through joint venture or similar partner arrangements to a broad range of diverse end markets, including:

        Transportation.    We serve several key transportation sectors, including:

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        Through our MSS segment, we offer infrastructure management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the United States government.

        We provide a wide array of services in our MSS segment, both directly and through joint venture or similar partner arrangements, including:

        Installation, Operations and Maintenance.    Projects include Department of Defense and Department of Energy installations where we provide comprehensive services for the operation and maintenance of complex government installations, including military bases, test ranges and equipment. We have undertaken assignments in this category in the Middle East and the U.S. We also provide services for the operations and maintenance of the Department of Energy's Nevada Test Site.

        Logistics and Field Services.    Projects include logistics support services for a number of Department of Defense agencies and defense prime contractors focused on developing and managing integrated supply and distribution networks. We oversee warehousing, packaging, delivery and traffic management for the distribution of government equipment and materials.

        Training.    Projects include training applications in live, virtual and simulation training environments. We have conducted training at the U.S. Army's Center for Security Training in Maryland for law enforcement and military personnel. We have also supported the training of international police officers and peacekeepers for deployment in various locations around the world in the areas of maintaining electronics and communications equipment.

        Systems Support.    Projects cover a diverse set of operational and support systems for the maintenance, operation and modernization of Department of Defense and Department of Energy installations. Our services in this area range from information technology and communications to life cycle optimization and engineering, including environmental management services. Through our joint venture operations at the Nevada Test Site and the Combat Support Services operation in Kuwait, our teams are responsible for facility and infrastructure support for critical missions of the U.S. government in its nonproliferation efforts, emergency response readiness, and force support and sustainment. Enterprise network operations and information systems support, including remote location engineering and operation in classified environments, are also areas of specialized services we provide.

        Technical Personnel Placement.    Projects include the placement of personnel in key functional areas of military and other government agencies, as these entities continue to outsource critical services to commercial entities. We provide systems, processes and personnel in support of the Department of Justice's management of forfeited assets recovered by law enforcement agencies. We also support the Department of State in its enforcement programs by recruiting, training and supporting police officers for international and homeland security missions.

        Field Services.    Projects include maintaining, modifying and overhauling ground vehicles, armored carriers and associated support equipment both within and outside of the United States under contracts with the Department of Defense. We also maintain and repair telecommunications systems for military and civilian entities. The ability to deploy highly mobile field response teams to locations across the world to supplement mission support and equipment readiness is a critical requirement in this service area.

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Our Clients

        Our clients consist primarily of national governments, state, regional and local governments, public and private institutions and major corporations. The following table sets forth our total revenue attributable to these categories of clients for each of the periods indicated:

 
   Year Ended September 30,
  
 
   2004
   %
   2005
   %
   2006
   %
  
 
   (dollars in thousands)

  
U.S. Federal Government                                
  PTS   $ 153,302   8 % $ 215,951   9 %   319,675   9 %
  MSS     232,143   11 %   309,052   13 %   641,764   19 %
U.S. State and Local Governments     801,680   40 %   788,463   33 %   848,530   25 %
Non-U.S. Governments     333,083   17 %   475,991   20 %   355,835   10 %
   
 
 
 
 
 
 
  Subtotal Governments     1,520,208   76 %   1,789,457   75 %   2,165,804   63 %
Private Entities (worldwide)     491,767   24 %   605,883   25 %   1,255,688   37 %
   
 
 
 
 
 
 
  Total   $ 2,011,975   100 % $ 2,395,340   100 % $ 3,421,492   100 %
   
 
 
 
 
 
 

        Other than the U.S. government, no single client accounted for 10% or more of our revenue in any of the past five fiscal years. The work attributed to the U.S. government for fiscal 2006 includes our work for the Department of Defense, Department of Energy and the Department of Homeland Security. The diversity of our client base is illustrated by the fact that for fiscal 2006, our 25 largest projects, as measured by gross profit, accounted for less than 15% of our consolidated gross profit.

Contracts

        The price provisions of the contracts we undertake can be grouped into two broad categories: cost-reimbursable contracts and fixed-price contracts. The majority of our contracts fall under the relatively lower risk category of cost-reimbursable contracts.

        Cost-reimbursable contracts consist of two similar contract types, cost-plus and time and material.

        Cost Plus.    Cost plus is the predominant contracting method used by U.S. federal, state and local governments. These contracts provide for reimbursement of actual costs and overhead incurred by us, plus a predetermined fee. Under some cost-plus contracts, our fee may be based on quality, schedule and other performance factors.

        Time and Material.    Time and material is common for smaller scale engineering and consulting services. Under these types of contracts, we negotiate hourly billing rates and charge our clients based upon actual hours expended on a project; unlike cost-plus, however, there is no predetermined fee. In addition, any direct project expenditures are passed through to the client and are reimbursed. These contracts may have a fixed price element in the form of not-to-exceed or guaranteed maximum price provisions.

        For fiscal 2006, cost-reimbursable contracts represented approximately 68% of our total revenue, with cost-plus contracts constituting approximately 50% and time and material contracts constituting approximately 18% of our total revenue.

        Fixed-price contracts are the predominant contracting method outside of the United States. There are typically two types of fixed-price contracts. The first and more common type, lump-sum, involves

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performing all of the work under the contract for a specified lump-sum fee. Lump-sum contracts are typically subject to price adjustments if the scope of the project changes or unforeseen conditions arise. The second type, fixed-unit price, involves performing an estimated number of units of work at an agreed price per unit, with the total payment under the contract determined by the actual number of units performed.

        Many of our lump-sum contracts are negotiated and arise in the design of projects with a specified scope. Lump-sum contracts often arise in the area of construction management. Construction management services can be in the form of general administrative oversight (in which we do not assume responsibility for construction means and methods and is on a cost-reimbursable basis), or on a fixed price, "at risk" basis. We perform a limited amount of construction management "at risk."    Under construction management at risk, we are typically responsible for the design of the facility with the contract price negotiated after we have secured specific bids from various subcontractors and added a contingency and fee. This process is often referred to as "design-build."

        Some of our fixed-price contracts require us to provide performance bonds or parent company guarantees to assure our clients that their project will be completed in accordance with the terms of our contracts. In such cases, we typically require our primary subcontractors to provide similar bonds and guarantees or be adequately insured, and we pass the terms and conditions set forth in our agreement to our subcontractors. We typically mitigate the risks of fixed-price contracts by contracting to complete the projects based on our design as opposed to a third party's design, by not self-performing the construction, by not guaranteeing new or untested processes or technologies and by working only with experienced subcontractors with sufficient bonding capacity. When public agencies seek a design-build approach for major infrastructure projects, we may act as a fixed-price design subcontractor to the general construction contractor and do not assume overall project or construction risk.

        For fiscal 2006, fixed price contracts represented approximately 32% of our total revenue. Of this amount, less than 10% of our contracts have exposure to construction cost overruns. Of the remaining approximately 22%, there may be risks associated with our professional fees if we not able to perform our professional services for the amount of the fixed fee. However, we attempt to mitigate these risks as described above.

        Some of our larger contracts may operate under joint ventures or other arrangements under which we team with other reputable companies, typically companies with which we have worked with for many years. This is often done where the scale of the project dictates such an arrangement or when we want to strengthen either our market position or our technical skills.

Backlog

        At December 31, 2006, our revenue backlog was approximately $2.9 billion, an increase of $0.4 billion, or 15.0%, from $2.5 billion at December 31, 2005. Of this $2.9 billion, we estimate that approximately $2.0 billion will be completed by December 31, 2007. Approximately $2.5 billion of our total backlog at December 31, 2006 is attributable to our PTS segment, while the remaining $0.4 billion is attributable to our MSS segment. No assurance can be given that we will ultimately realize our full backlog.

        Most of our government contracts are multi-year contracts for which funding is appropriated on an annual basis. In the case of these government contracts, our backlog includes only those amounts that have been funded and authorized and therefore does not reflect amounts we may receive over the term of the contracts. In the case of non-government contracts, our backlog includes future revenue at contract rates, excluding contract renewals or extensions that are at the discretion of the client. For

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contracts with a not-to-exceed maximum amount, we include revenue from such contracts in backlog to the extent of the remaining estimated amount. We calculate backlog without regard to possible project reductions or expansions or potential cancellations until such changes or cancellations occur.

        Backlog is expressed in terms of revenue and therefore may include significant estimated amounts of third party, or pass-through costs to subcontractors and other parties. Moreover, our backlog for the period beyond 12 months may be subject to variations from year to year as existing contracts are completed, delayed or renewed or new contracts are awarded, delayed or cancelled. As a result, we believe that year-to-year comparisons of the portion of backlog expected to be performed more than one year in the future are difficult to interpret and not necessarily indicative of future revenue or profitability. Because backlog is not a defined accounting term, our computation of backlog may not necessarily be comparable to that of our peers.

Competition

        The professional technical and management support services markets we serve are highly fragmented and we compete with a large number of regional, national and international companies. Certain of these competitors have greater financial and other resources than we do. Others are smaller and more specialized, and concentrate their resources in particular areas of expertise. The extent of our competition varies according to the particular markets and geographic area. The degree and type of competition we face is also influenced by the type and scope of a particular project. Our clients make competitive determinations based upon experience, reputation and ability to provide the relevant services in a timely, safe and cost-efficient manner.

Seasonality

        The fourth quarter of our fiscal year (July 1 to September 30) is typically our strongest quarter. The U.S. federal government tends to authorize more work during the period preceding the end of its fiscal year, September 30. In addition, many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during the fiscal first quarter when new funding budgets become available. Within the U.S., as well as other parts of the world, we generally benefit from milder weather conditions in our fiscal fourth quarter, which allows for more productivity from our field inspection and other on-site civil services. Our construction and project management services also typically expand during the high construction season of the summer months.

Insurance and Risk Management

        We maintain insurance covering professional liability and claims involving bodily injury and property damage. We consider our present limits of coverage, deductibles, and reserves to be adequate. Wherever possible, we endeavor to eliminate or reduce the risk of loss on a project through the use of quality assurance/control, risk management, workplace safety and similar methods. A majority of our operating subsidiaries are quality certified under ISO 9001:2000 or an equivalent standard, and we plan to continue to obtain certification where applicable. ISO 9001:2000 refers to international quality standards developed by the International Organization for Standardization, or ISO.

        Risk management is an integral part of our project pricing for fixed price contracts and our project execution process. We have a risk management group that reviews and oversees the risk profile of our operations. This group also participates in evaluating risk through internal risk analyses in which our corporate management reviews higher-risk projects, contracts or other business decisions that require corporate approval.

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Regulation

        We are regulated in a number of fields in which we operate. In the United States, we deal with numerous U.S. government agencies and entities, including branches of the U.S. military, the Department of Defense, the Department of Energy, intelligence agencies and the Nuclear Regulatory Commission. When working with these and other U.S. government agencies and entities, we must comply with laws and regulations relating to the formation, administration and performance of contracts. These laws and regulations, among other things:

        Internationally, we are subject to various government laws and regulations (including the U.S. Foreign Corrupt Practices Act and similar non-U.S. laws and regulations), local government regulations and procurement policies and practices and varying currency, political and economic risks.

        To help ensure compliance with these laws and regulations, all of our employees are required to complete tailored ethics and other compliance training relevant to their position and our operations.

Personnel

        Our principal asset is our employees. A large percentage of our employees have technical and professional backgrounds and bachelor and advanced degrees. We believe that we attract and retain talented employees by offering them the opportunity to work on highly visible and technically challenging projects in a stable work environment. The tables below identify our personnel by segment and geographic region.

 
   As of September 30,
    
 
   As of December 31,
2006
 
   2004
   2005
   2006
Professional Technical Services   13,000   16,300   19,000   19,400
Management Support Services   4,700   5,700   8,300   9,100
   
 
 
 
Total   17,700   22,000   27,300   28,500
   
 
 
 
 
   As of September 30,
    
 
   As of December 31,
2006
 
   2004
   2005
   2006
Americas   8,500   10,100   10,400   10,500
Europe   1,900   2,700   3,100   3,000
Middle East   3,600   5,200   8,800   9,700
Asia/Pacific   3,700   4,000   5,000   5,300
   
 
 
 
Total   17,700   22,000   27,300   28,500
   
 
 
 

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   As of September 30, 2006
   As of December 31, 2006
 
   PTS
   MSS
   Total
   PTS
   MSS
   Total
Americas   9,600   800   10,400   9,700   800   10,500
Europe   3,100   —   3,100   3,000   —   3,000
Middle East   1,300   7,500   8,800   1,400   8,300   9,700
Asia/Pacific   5,000   —   5,000   5,300   —   5,300
   
 
 
 
 
 
Total   19,000   8,300   27,300   19,400   9,100   28,500
   
 
 
 
 
 

        We have a number of personnel with "Top Secret" or "Q" security clearances. Some of our contracts with the U.S. government relate to projects that have elements that are classified for national security reasons. Although most of our contracts are not themselves classified, persons with high security clearances are often required to perform portions of the contracts.

        A portion of our employees are employed on a project by project basis to meet our contractual obligations, generally in connection with government projects in our MSS segment. Approximately 200 of our employees are covered by collective bargaining agreements. We believe our employee relations are good.

Geographic Information

        For geographic information, please refer to footnote 19 of our consolidated financial statements found elsewhere in this prospectus.

Properties

        Our corporate offices are located in approximately 83,000 square feet of space at 555 and 515 South Flower Street, Los Angeles, California. Our other offices consist of an aggregate of approximately 4.3 million square feet worldwide. Virtually all of our offices are leased. See Note 11 of the notes to our consolidated financial statements for information regarding our lease obligations. We believe our current properties are adequate for our business operations and are not currently underutilized. We may add additional facilities from time to time in the future as the need arises.

Legal Proceedings

        As a government contractor, we are subject to various laws and regulations that are more restrictive than those applicable to non-government contractors. Intense government scrutiny of contractors' compliance with those laws and regulations through audits and investigations is inherent in government contracting, and, from time to time, we receive inquiries, subpoenas, and similar demands related to our ongoing business with government entities. Violations can result in civil or criminal liability as well as suspension or debarment from eligibility for awards of new government contracts or option renewals.

        We are involved in various investigations, claims and lawsuits in the normal conduct of our business, none of which, in the opinion of our management, based upon current information and discussions with counsel, is expected to have a material adverse effect on our consolidated financial position, results of operations, cash flows or our ability to conduct business. From time to time we establish reserves for litigation when we consider it probable that a loss will occur.

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MANAGEMENT

Board of Directors and Executive Officers

        The names, ages and positions of our directors and executive officers are as follows:

Name
   Age(1)
   Position
John M. Dionisio   58   Director, President and Chief Executive Officer
Richard G. Newman   72   Director, Chairman
Francis S. Y. Bong   64   Director, Chairman Asia
H. Frederick Christie   73   Director
James H. Fordyce   47   Director
S. Malcolm Gillis   66   Director
Linda Griego   59   Director
Robert J. Lowe   66   Director
William G. Ouchi   63   Director
William P. Rutledge   64   Director
Lee D. Stern   55   Director
James R. Royer   60   Executive Vice President and Chief Operating Officer
Michael S. Burke   43   Executive Vice President, Chief Corporate Officer and Chief Financial Officer
Glenn R. Robson   44   Senior Vice President and Chief Strategy Officer
Raymond W. Holdsworth   63   Vice Chairman, Corporate Development
(1)
All ages are as of January 1, 2007

        John M. Dionisio was appointed our President and Chief Executive Officer on October 1, 2005 and was elected to our Board of Directors in December 2005. From October 2003 to October 2005, Mr. Dionisio served as our Executive Vice President and Chief Operating Officer. From October 2000 to October 2003, Mr. Dionisio served as President and Chief Executive Officer of our subsidiary, DMJM+Harris. Mr. Dionisio joined Frederic R. Harris, Inc., in 1971, predecessor company to DMJM+Harris where he served in many capacities, including Chief Executive Officer from October 1999 to October 2003, President from July 1996 to October 1999, Executive Vice President in charge of all U.S. operations from 1993 to 1996 and Manager of the New York Operations and Northern Region Manager from 1992 to 1993.

        Richard G. Newman has been a member of our Board of Directors since May 1990 and currently is our Chairman. Mr. Newman was our President until 1993, and then Chairman, President and Chief Executive Officer from May 1993 to October 2000 and Chairman and CEO from 2000 to 2005. He served as a director of Ashland Technology Corporation from February 1989 until it became AECOM in April 1990. Mr. Newman was also President of Ashland Technology, which later became AECOM, from December 1988 until May 1990. Previously, he was President and Chief Operating Officer of Daniel, Mann, Johnson & Mendenhall from October 1985 to December 1988 and a Corporate Vice President or Vice President of DMJM from 1977 to 1985. Mr. Newman is also a director of Southwest Water Company, Sempra Energy Company and 14 mutual funds affiliated with Capital Research and Management Company.

        Francis S. Y. Bong was named to our Board of Directors after our merger with Maunsell in May 2000. He serves as Chairman for our operations in Asia. Prior to our merger with Maunsell, Mr. Bong was Chairman and Chief Executive of Maunsell Consultants Asia Holding Ltd. from 1997 to 2000 and served as Managing Director of the same firm from 1987 to 1996. Mr. Bong started with

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Maunsell in 1975. Mr. Bong also serves on the Board of Directors of Cosmopolitan International Holdings Ltd. as a non-executive director.

        H. Frederick Christie was named to our Board of Directors in August 1990. From 1987 until his retirement in 1989, Mr. Christie served as President and Chief Executive Officer of The Mission Group, where he was responsible for all of the non-utility subsidiaries of SCEcorp., the parent company of Southern California Edison Company. Mr. Christie served as President and as a director of Southern California Edison Company from November 1984 until September 1987 after having previously served as Executive Vice President and Chief Financial Officer. He is also a member of the Board of Directors of IHOP Corp., Southwest Water Company, Ducommun Incorporated, and 21 mutual funds affiliated with Capital Research and Management Company.

        James H. Fordyce was named to our Board of Directors in February 2006. Mr. Fordyce is a Managing Director with J.H. Whitney Capital Partners, LLC, a private investment firm. He has been with J.H. Whitney since July 1996. Mr. Fordyce began his career at Chemical Bank in 1981, where he spent eight years primarily in their leveraged buyout group before then joining Heller Financial, Inc. as a Senior Vice President where he spent his time investing both debt and equity. Mr. Fordyce is currently a director of several privately-held companies.

        S. Malcolm Gillis was named to our Board of Directors in January 1998. From July 2004 to present, Dr. Gillis has been a University Professor at Rice University. Dr. Gillis served as President of Rice University from July 1993 to June 2004. Before assuming the presidency of Rice, Dr. Gillis was a professor at Duke University from 1984 to 1993, where he served as Dean of the Faculty of Arts and Sciences from 1991 to 1993. He was at Harvard University from 1969 to 1984, where he did extensive teaching and consulting in the area of international economics, with particular emphasis on Latin America and Asia, working with heads of state on economic policy issues. Dr. Gillis was a director of the Federal Reserve Bank of Dallas from 1998 to 2004. Dr. Gillis is a member of the board of directors of Halliburton Company, Electronic Data Systems Corporation, Introgen Therapeutics, Inc. and Service Corporation International. Dr. Gillis also serves on the boards of various educational and charitable organizations and government commissions and committees.

        Linda Griego was named to our Board of Directors in May 2005. Ms. Griego has served as President and Chief Executive Officer of Griego Enterprises, Inc. since 1985 and is also Managing General Partner of Engine Co. No. 28, a restaurant that she founded in 1988. From July 1999 until January 2000, Ms. Griego served as interim President and Chief Executive Officer of the Los Angeles Community Development Bank. She is currently a director of CBS Corporation, Granite Construction Incorporated, City National Bank and Southwest Water Company. Ms. Griego has also served as a Los Angeles branch director of the Federal Reserve Bank of San Francisco.

        Robert J. Lowe was named to our Board of Directors in February 1993. Mr. Lowe is Chairman and Chief Executive Officer of Lowe Enterprises, Inc. and its affiliated companies. He was the principal founding shareholder in 1972 of the corporation that became Lowe Enterprises, Inc. Mr. Lowe also serves on the Board of Claremont McKenna College and on the boards of various charitable organizations and government commissions and committees.

        William G. Ouchi joined our Board of Directors in May 2003. Dr. Ouchi is the Sanford and Betty Sigoloff Distinguished Professor in Corporate Renewal in the Anderson School of Management at the University of California, Los Angeles. He has been on the faculty of UCLA since 1979. Dr. Ouchi is a director of Sempra Energy, FirstFed Financial Corp. and the Conrad N. Hilton Foundation. Dr. Ouchi has also been Vice Dean for Executive Education at UCLA and Chief of Staff for the Mayor of Los Angeles. Dr. Ouchi also serves on the boards of various charitable organizations.

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        William P. Rutledge was named to our Board of Directors in November 1998. Mr. Rutledge was President and Chief Executive Officer of Allegheny Teledyne, Inc. from August 1996 until his retirement in 1997. Mr. Rutledge serves as Chief Executive Officer of Aquanano, LLC. Mr. Rutledge also serves on the Board of Directors of FirstFed Financial Corp., Communications & Power Industries, Sempra Energy Corporation and the board of trustees of Lafayette College, Saint John's Health Center Foundation and the World Affairs Council of Los Angeles.

        Lee D. Stern was named to our Board of Directors in February 2006. Mr. Stern is a Managing Director at GSO Capital Partners LP., an investment advisor managing several private investment funds. Prior to joining GSO, Mr. Stern was the chief transaction officer of Technology Investment Capital Corp. from November 2003 to September 2005 and has over 20 years of financial and investment experience in leveraged finance and in financing technology companies. Prior to Technology Investment Capital Corp., Mr. Stern was with the boutique investment banking firm Hill Street Capital from March 2001 to November 2003. From 1997 to 2000, he was a partner of Thomas Weisel Partners and NationsBanc Montgomery, where he focused on leveraged transactions relating to acquisition finance and leveraged buyouts, including private and public mezzanine finance. From 1993 to 1997, Mr. Stern was a managing director at Nomura Securities International, where he played a key role in building the firm's merchant banking and principal debt investing business. He sat on Nomura Securities International's commitment and underwriting committees. Mr. Stern has also held managing director positions at Kidder, Peabody & Co., Inc. from 1990 to 1992 and Drexel Burnham Lambert from 1985 to 1990.

        James R. Royer was appointed Executive Vice President and Chief Operating Officer in October 2005. From October 2004 to October 2005, Mr. Royer was Chief Executive of our Americas Facilities Group, Regional Group and Government Services Group. He was appointed Chairman of the Board of our subsidiary DMJM H&N in February 2002 and Chief Executive Officer in April 2003. Prior to that, he served as Chairman of the Board, President and Chief Executive Officer of our subsidiary TCB INC. from August 1991 to September 2003, and continued in his role as Chief Executive Officer of TCB INC. until October 2004. He was elected President of Turner Collie & Braden Inc. (TCB) in 1987. He served in various senior management positions with TCB, including Vice President from 1982 through 1987. Mr. Royer is a director and former Chairman of the Greater Houston Partnership and is also a member of the board of directors of Memorial Herman Health Care System in Houston.

        Michael S. Burke was appointed Executive Vice President and Chief Corporate Officer in May 2006 and was appointed Chief Financial Officer in December 2006. Mr. Burke joined AECOM as Senior Vice President, Corporate Strategy in October 2005. From 1990 to 2005, Mr. Burke was with the accounting firm, KPMG LLP. He served in various senior leadership positions most recently as a Western Area Managing Partner from 2002 to 2005 and was a member of KPMG's Board of Directors from 2000 through 2005. While on the KPMG Board of Directors, Mr. Burke served as the Chairman of the Board Process and Governance Committee and a member of the Audit and Finance Committee. Mr. Burke also serves on the Board of Directors of Rentech, Inc. and is the Chairman of its Audit Committee. Mr. Burke also serves on various charitable and community boards.

        Glenn R. Robson was appointed Senior Vice President and Chief Strategy Officer in December 2006. Mr. Robson joined AECOM in May 2002 as Senior Vice President and Chief Financial Officer. Prior to joining AECOM, Mr. Robson worked at Morgan Stanley & Co. Incorporated for twelve years, where he served most recently as a Managing Director in the investment banking division, and previously as a Principal and Vice President in the corporate finance department. Earlier in his career, Mr. Robson was a Business Analyst with McKinsey & Company.

        Raymond W. Holdsworth was appointed Vice Chairman, Corporate Development in October 2005. Prior to this position, Mr. Holdsworth served as our President from March 2000 to October 2005. From

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January 1999 to March 2000, Mr. Holdsworth was Group Chief Executive for three of AECOM's operating companies. He was President & Chief Executive Officer of DMJM from April 1993 to 1997, and Chairman & Chief Executive Officer from then until January 1999. Mr. Holdsworth served as DMJM's Vice President for Corporate Development from June 1992 to April 1993.

Composition of the Board of Directors

        In accordance with the terms of our Restated Certificate of Incorporation, the terms of office of members of our Board of Directors, other than the two members elected by holders of our Class F and Class G convertible preferred stock, are divided into three classes:

        Our Class I directors are Richard G. Newman, Linda Griego and William G. Ouchi, our Class II directors are John M. Dionisio, Robert J. Lowe and William P. Rutledge, and our Class III directors are Francis S. Y. Bong, H. Frederick Christie and S. Malcolm Gillis. In addition, holders of a majority of our Class F convertible preferred stock and holders of a majority of our Class G convertible preferred stock are each entitled to elect one director annually to our Board of Directors. These seats are currently held by James H. Fordyce for the Class G preferred stock and Lee D. Stern for the Class F preferred stock. At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following such election. Any vacancies in our classified Board will be filled by the remaining directors and the elected person will serve the remainder of the term of the class to which he or she is appointed. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors, subject to the rights of holders of Class F preferred stock and Class G preferred stock.

        Our Board of Directors has determined that the following members are independent as determined in reference to the standards of the New York Stock Exchange: Mr. Christie, Mr. Fordyce, Mr. Gillis, Ms. Griego, Mr. Lowe, Mr. Ouchi, Mr. Rutledge and Mr. Stern.

Board Structure and Committee Composition

        As of the date of this prospectus, our Board has eleven directors and the following four committees: Audit, Compensation and Organization, Nominating and Governance and Planning, Finance and Investments. The membership during the last fiscal year and the function of each of the

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committees are described below. During fiscal 2006, our Board held five meetings. Each director attended at least 75% of all Board and applicable committee meetings.

 
   Audit
Committee
   Compensation
and Organization
Committee
   Nominating and
Governance
Committee
   Planning,
Finance and
Investment
Committee
Francis S.Y. Bong               X
H. Frederick Christie*   X   Chairperson        
James H. Fordyce       X       X
S. Malcolm Gillis   X       Chairperson    
Linda Griego   X   X   X    
Robert J. Lowe       X       Chairperson
William G. Ouchi       X   X   X
William P. Rutledge   Chairperson           X
Lee D. Stern   X   X   X    
*
lead independent director

        Audit Committee.    The Audit Committee of our Board of Directors consists of William P. Rutledge (Chairperson), H. Frederick Christie, S. Malcolm Gillis, Linda Griego and Lee D. Stern. The Audit Committee, which is composed solely of independent directors, makes recommendations to our Board of Directors regarding the selection of independent auditors, reviews the results and scope of the audit and other services provided by our independent auditors, and reviews and evaluates our audit and control functions. Our Audit Committee held five meetings during fiscal year 2006. Our Board of Directors has determined Mr. Rutledge, Chairperson of the Audit Committee, and several other members of the Audit Committee qualify as "audit committee financial experts" as defined by the rules under the Securities Exchange Act of 1934. The background and experience of each of our audit committee members are set forth above.

        Compensation and Organization Committee.    The Compensation and Organization Committee of our Board of Directors consists of H. Frederick Christie (Chairperson), James H. Fordyce, Linda Griego, Robert J. Lowe, William G. Ouchi and Lee D. Stern. The Compensation and Organization Committee, comprised solely of independent directors, oversees our compensation plans and organizational matters. Such oversight includes decisions regarding executive management salaries, incentive compensation and long-term compensation plans as well as company wide incentive and equity plans for our employees and consultants and appointments and promotions for senior management. Our Compensation and Organization Committee held seven meetings during fiscal year 2006.

        Nominating and Governance Committee.    The Nominating and Governance Committee of our Board of Directors consists of S. Malcolm Gillis (Chairperson), Linda Griego, William G. Ouchi, and Lee D. Stern. The Nominating and Governance Committee is comprised solely of independent directors and is responsible for recruiting and retention of qualified persons to serve on our Board of Directors, including proposing such individuals to the Board of Directors for nomination for election as directors, for evaluating the performance, size and composition of the Board of Directors and for oversight of our compliance activities. The Nominating and Governance Committee considers written suggestions from stockholders, including potential nominees for election, and oversees the corporation's governance programs. Our Nominating and Governance Committee held five meetings during fiscal year 2006.

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        Planning, Finance and Investment Committee.    The Planning, Finance and Investment Committee of our Board of Directors consists of Robert J. Lowe (Chairperson), Francis S.Y. Bong, James H. Fordyce, William G. Ouchi and William P. Rutledge. The Planning, Finance and Investment Committee reviews our financing programs, proposed investments, including mergers, and other strategic initiatives. Our Planning, Finance and Investment Committee held six meetings in fiscal year 2006.

Compensation Committee Interlocks and Insider Participation

        None of the members of the Compensation and Organization Committee of our Board of Directors is an officer or employee of our company. No executive officer of our company serves as a member of the Board of Directors or compensation committee of any entity that has one or more executive officers serving on our Compensation and Organization Committee.

Executive Sessions

        Executive sessions of non-management directors are included on the agenda for every regularly scheduled Board and Board committee meeting. The Board sessions are chaired by H. Frederick Christie the board's lead independent director and the chairperson of the applicable committee chairs the committee executive sessions. Any director can request that an additional executive sessions be scheduled.

Compensation of the Board of Directors

        Those of our directors who also serve as our officers or consultants, or as officers or consultants of our subsidiaries, or those directors representing the Class F and G preferred stock are not compensated by us for attending meetings or performing any other function of the Board. All other directors are paid a retainer of $36,000 per year. In addition, non-employee directors (other than directors elected by holders of our Class F and Class G convertible preferred stock) receive the following meeting fees:

        Our non-employee directors are entitled to defer some or all of their annual retainers and meeting fees to our Non-Qualified Stock Purchase Plan and receive common stock units, except for non-U.S. resident directors who may be permitted to defer into their local AECOM stock plans.

        Each non-employee director, at the time he or she is first elected to our Board of Directors, receives options to purchase 10,000 shares of our common stock under our Stock Incentive Plan for Non-Employee Directors and thereafter will receive annually options for a number of shares approved by the Board of Directors. The exercise price for such options is the market value of our common stock on the date of grant and the options are exercisable six months after the grant date. The compensation described above does not apply to the directors elected by the holders of the Class F and Class G convertible preferred stock.

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Limitation of Directors' Liability and Indemnification

        As permitted by Delaware law, our Certificate of Incorporation contains a provision eliminating the personal liability of our directors to us and our stockholders for monetary damages for breaches of their fiduciary duty as directors to the fullest extent permitted by the General Corporation Law of Delaware. Under the present provisions of the General Corporation Law of Delaware, our directors' personal liability to us and our stockholders for monetary damages may be so eliminated for any breach of fiduciary duty as a director other than (i) any breach of a director's duty of loyalty to us or to the stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law, (iii) dividends or stock repurchases or redemptions that are illegal under Delaware law, and (iv) any transaction from which a director receives an improper personal benefit. This provision pertains only to breaches of duty by directors as directors and not in any other corporate capacity, such as being an officer. As a result of the inclusion of such provision in our Certificate of Incorporation, our stockholders may be unable to recover monetary damages against directors for actions taken by them that constitute gross negligence or that are in violation of their fiduciary duties, although it may be possible to obtain injunctive or other equitable relief with respect to such actions. If equitable remedies are found not to be available to stockholders in any particular case, stockholders may not have any effective remedy against the challenged conduct.

        Our bylaws require us to indemnify our officers and directors against expenses and costs, judgments, settlements and fines reasonably incurred in the defense of any claim, including any claim brought by us or in our right, to which they were made parties by reason of being or having been officers or directors.

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EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

        Our compensation programs are designed to provide an overall total direct compensation package that is competitive with our peer companies, allow us to attract and retain key talent, and provide incentives that promote short- and long-term financial growth and stability to continuously enhance stockholder value based on a pay-for-performance model. We refer to the executive officers named in the Summary Compensation Table that follows this Compensation Discussion & Analysis (such officers being our Chief Executive Officer (CEO) and President, Chairman, Chief Financial Officer, Chief Corporate Officer, Chief Operating Officer, and Chairman of Asia) as "Named Executive Officers." The Compensation and Organization Committee of the Board of Directors reviews and approves the compensation program for our Named Executive Officers and oversees our executive compensation strategy.

        To implement these principles, we target base salary compensation for our Named Executive Officers at the 50th percentile of appropriate peer group companies taking into account the experience level of the individuals in their current positions. Short term compensation or annual incentive bonuses for the Named Executive Officers are based on a comparison to the peer group's prior twelve month performance in the areas of growth in earnings before interest, taxes and amortization (EBITA), return on investment (ROI) and growth in earnings per share. Similarly, long-term compensation for our Named Executive Officers is based on these same benchmarks comparing our performance over the prior five years against that of the peer group.

        Our Compensation and Organization Committee then considers these quantitative performance comparisons and the compensation of executives of the peer group companies in similar positions, as well as qualitative performance factors they deem important to insure the alignment of our executives' compensation with the goals of our stockholders. The qualitative factors are developed with the CEO for the Named Executive Officers reporting to the CEO, and by the Compensation and Organization Committee for the CEO. These qualitative factors include items such as experience, leadership, integrity, strategic planning, team building, diversity, stability and succession planning.

        Our compensation package for our Named Executive Officers generally consists of:

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        We evaluate each of these three components of compensation described above for each of our Named Executive Officers in determining a compensation program that will encourage the overall success of the individuals and our Company.

        As our financial performance improves relative to the performance targets, the Named Executive Officers' potential for additional compensation under the short-term and long-term incentive programs will increase. To help establish and review the compensation paid to the Named Executive Officers, our Compensation and Organization Committee reviews an executive compensation report prepared by Towers Perrin, an independent third-party consulting firm. This report compares performance of the Company and each element of compensation to comparable positions within the general population of similarly sized companies and also to a group of peer companies in our sector including CH2M Hill, Fluor, Foster Wheeler, Jacobs Engineering, Michael Baker, Shaw Group, Tetra Tech, URS and Washington Group International.

        Should actual performance fall short of performance targets, total compensation will be reduced. Base compensation is established for a fiscal year and is not adjusted based on performance for the current year. Short-term compensation may be reduced to zero should performance fall short of established targets. Long-term compensation, as described below, is generally subject to company-wide performance targets for the Named Executive Officers. If the Company falls short of its performance targets for the three year performance period, the payout of the restricted stock units will be reduced and may be reduced to zero for significant shortfalls based on a pre-established formula. Our Compensation and Organization Committee evaluates on an annual basis past performance, competitor performance and general market conditions to establish future performance targets.

        The Company does not currently have a policy requiring a fixed course of action with respect to compensation adjustments following later restatements of performance targets. Under those circumstances, the Compensation and Organization Committee would evaluate whether compensation adjustments were appropriate based upon the facts and circumstances surrounding the restatement.

        As described above, we strive to provide our Named Executive Officers with a competitive base salary that is in-line with their roles and responsibilities when compared to peer companies of comparable size. We view base salary as an important component to each Named Executive Officer's overall compensation package. The base salary level is established and reviewed based on the level of responsibilities, the experience and tenure of the individual, and the amount of performance based incentives received or granted each year. The base salary is compared annually to the list of similar positions within comparable peer companies and with consideration of the executive's relative experience in his or her position. Base salaries are reviewed annually and at the time of promotion or other changes in responsibilities.

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        Our short-term incentive compensation program allows us to create annual performance criteria that are flexible and that change with the needs of our business. By creating target awards and setting performance objectives at the beginning of each fiscal year, our Named Executive Officers understand the goals and priorities of the Company during the current fiscal year. Our CEO and his management team are responsible for the overall performance of the Company in accordance with our strategic operating plan, as approved annually by our Board of Directors, and are thus evaluated on these objectives.

        Named Executive Officers may receive approximately 25 – 40% of their total compensation as incentive compensation. The measurement criteria for our CEO and our Chairman's incentive compensation bonuses for fiscal year 2006 were based on our overall corporate level performance measures including growth in EBITA, EBITA return compared to the total invested capital, and growth in earnings per share after adjustments for one-time merger related expenses. For our other Named Executive Officers (other than our CEO and our Chairman), the following criteria for incentive compensation bonuses for fiscal year 2006 were used: overall corporate level performance measures including EBITA vs. plan, annual growth in EBITA, cash flow, backlog and a discretionary component. The discretionary component took into account qualitative achievements such as seamless transition of the CEO, Chief Operating Officer and Chief Financial Officer positions in fiscal 2006; initiating and completing significant mergers, including effective integration; aggressive quality and safety development plans; development and implementation of our employee engagement programs; cross-selling and production sharing between our operating brands; and other personal accomplishments. The Compensation and Organization Committee determines the final incentive compensation for the Named Executive Officers.

        We provide two types of long-term compensation pursuant to our Stock Incentive Plan: Performance Earnings Program (PEP) restricted stock units and options to purchase AECOM common stock.

        Our long-term incentive compensation programs are designed to focus and reward our Named Executive Officers on our long-term goals. By creating a three-year performance period under our PEP (described below) to complement our stock option program, our goal is to encourage and to provide an incentive for our Named Executive Officers to advance AECOM's long-term goals and enhance stockholder value. Our Named Executive Officers may receive approximately 25 – 60% of their total compensation as long-term incentive compensation.

        Once per year, our CEO provides the Compensation and Organization Committee with a recommended total dollar pool for long-term incentives to be awarded to all Named Executive Officers as well as other key executives, excluding the CEO and the Chairman. The Compensation and Organization Committee then reviews the report from the executive compensation consultants, including the comparable total direct compensation amounts of peer companies and determines the final total dollar amount of long-term incentives that are to be awarded to the Named Executive Officers, including the CEO's and Chairman's final total long-term incentive compensation.

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        Generally, since the initiation of the PEP program, the stock options have not been issued to Named Executive Officers as part of their long-term incentive compensation. Effective September 28, 2006, our Board of Directors approved a one-time 100% acceleration of vesting of all employee stock options outstanding as of such date, including options held by Named Executive Officers. The decision to accelerate the vesting of stock options was taken by our Board of Directors with the belief that it is in the best interest of our shareholders to reduce non-cash compensation expense that otherwise would have been recorded beginning in fiscal year 2007 upon the adoption of Statement of Financial Accounting Standards 123R (Share-Based Payment).

        Executive Life Insurance.    Our Named Executive Officers are eligible to participate in an Executive Life Insurance plan on an annual basis. This plan is in addition to the basic life insurance program which is open to a large majority of AECOM employees. The Executive Life Insurance plan provides up to an additional $800,000 in coverage.

        Executive Medical Insurance.    Our Named Executive Officers are eligible to participate in an Executive Medical Insurance plan on an annual basis. This plan is in addition to the basic medical insurance programs that are open to most AECOM employees. The Executive Medical Insurance plan provides up to 100% reimbursement for certain medical expenses up to $75,000 per calendar year.

        Senior Executive Equity Investment Plan.    We established the Senior Executive Equity Investment Plan (SEEIP) in March 1998 to encourage our senior officers to invest in AECOM common stock by providing loans to fund the purchase of the stock. All of the current Named Executive Officers have had at least one outstanding SEEIP loan note. Under the program, participants also received a company stock match on the amount of stock purchased with the SEEIP loan. The stock match was subject to 10-year cliff vesting period.

        All of our outstanding SEEIP loans have been terminated and repaid. In connection with the termination and repayment of such loans or settlement with shares, our Board of Directors approved a 100% acceleration of vesting of all outstanding SEEIP Company stock matches effective on September 28, 2006. SEEIP or similar loans are no longer part of the compensation package awarded to any of our Named Executive Officers or directors.

        AECOM Pension Plan.    The AECOM Pension Plan is a defined benefit plan that was adopted in September 1990. Participation in the AECOM Pension Plan was frozen to new entrants effective April 1, 1998. Of our Named Executive Officers, only our CEO, Chairman and our Chief Operating Officer were employees as of April 1, 1998 and are eligible to receive a retirement pension benefit under the Pension Plan.

        Depending on the participant's years of service to AECOM, the pension benefits will range from 26% to 30.5% of the employee's final capped average monthly compensation plus an additional 11% to 12.5% of the employee's final capped average monthly compensation in excess of specified Social Security base amounts. The final average monthly compensation was capped as of April 1, 2004 at the employee's highest compensation for one full calendar year from 1994 through 2003. If the employee's final average monthly compensation as of April 1, 2004 was lower than the cap, the employee's final average compensation will continue to increase until the participant's average compensation reaches the compensation cap. Pension benefits will generally be reduced for participants with less than 25 years of service as required by plan rules. Employee contributions to the Pension Plan of up to 1.5% of compensation were required prior to April 1, 1998.

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        We have generally replaced the AECOM Pension Plan with a 401(k) pension component of our Retirement & Savings Plan (RSP). Employees are allowed to make pre-tax or after-tax contributions of 0.5%, 1.0% or 1.5% of their compensation to this 401(k) pension component. The Company matches dollar for dollar any such contributions and our matching contributions will vest after three years of service with the Company.

        AECOM Management Supplemental Executive Retirement Plan (MSERP).    The Company amended the AECOM Pension Plan, effective July 1, 1998, to provide for certain participants including Named Executive Officers (our CEO, Chairman and COO), earning benefits under the AECOM Pension Plan to instead earn identical benefits under a non-qualified plan known as the Management Supplemental Executive Retirement Plan, or MSERP. The MSERP replaces and provides a benefit identical in nature to the AECOM Pension Plan but on an unfunded basis.

        The benefits of each employee who participated in the AECOM Pension Plan or MSERP are reduced by the actuarial estimate of the equivalent of a hypothetical account balance, calculated to be what the employee would have in his or her 401(k) pension component from April 1, 1998 until the employee's retirement and if the 401(k) contributions had remained invested in a benchmark fund, which mirrors the AECOM Pension Plan investments.

        AECOM Supplemental Executive Retirement Plans (92 SERP & 96 SERP).    In October 1992 we established the unfunded Supplemental Executive Retirement Plan, or 92 SERP, and in July 1996 we established the unfunded Supplemental Executive Retirement Plan, or 96 SERP, in order to provide some of our U.S. resident executive officers with pre-retirement death benefits and retirement benefits consistent with the level provided by the previous AECOM Pension Plan formula. These Supplemental Executive Retirement Plans require a participant to have reached the minimum age of 50 and to have worked at AECOM for at least five years. The plans also include early retirement provisions at age 62 with full retirement benefits.

        Of our Named Executive Officers, only our CEO is eligible to receive any benefits from the 92 SERP and only our Chief Operating Officer is eligible to receive any benefits from the 96 SERP.

        In July of 1996 we established the AECOM Excess Benefit Plan for participants in the Supplemental Executive Retirement Plans in order to provide only those benefits which the AECOM Pension Plan cannot provide due to federal tax limits. Benefits from the Excess Benefit Plan are unfunded and will reduce, dollar-for-dollar, the pension benefit paid by the Supplemental Executive Retirement Plans.

        Except with respect to our Chief Operating Officer, we do not have any employment agreements in effect with any of our Named Executive Officers. We entered into this agreement with our Chief Operating Officer in connection with his joining us upon the acquisition of TCB, Inc. The employment agreement provides for a severance payment equal to 12 months salary for termination of employment by the Company without cause or by "Constructive Discharge," such as a material reduction in job duties or a required relocation without consent.

        There are no equity ownership requirements or guidelines that any of our employees must meet or maintain. We have a broad base of stock ownership by employees (including our Named Executive Officers) and believe that this enhances our success by aligning the interests of our employees and stockholders. We encourage Named Executive Officers to invest in our common stock through payroll deductions invested in our stock and matched by our typical company match formula, the grants of

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PEPs and in certain cases, stock options. In February 2007, we sold 32,456 shares of our common stock to our Chief Corporate Officer, who paid $500,000 for such shares.

        Our Compensation and Organization Committee approves the compensation for the CEO and the Chairman and reviews and approves management's recommendations for the CEO's direct reports. In addition, the Compensation and Organization Committee approves compensation philosophy, programs, and ensures that proper due diligence, deliberations, and reviews of executive compensation are conducted.

        The Compensation and Organization Committee uses Towers Perrin, an independent third-party consulting firm, to perform an analysis of comparable executive officer level positions within the general professional industry and a list of peer companies. The report of the consulting firm provides market survey information for base salary and short and long-term incentive compensation within the general industry companies and peer companies specified above.

        For fiscal 2006, the general industry companies used by our compensation consultant were companies in our general industry, with us being near the median regarding the revenue and profits of the group. The compensation consultant also provided comparisons of key performance metrics for the Company compared to the peer group. This established the basis for our overall performance which was considered when Compensation and Organization Committee reviewed the performance of and determined compensation for the Named Executive Officers.

        The following seven tables provide information regarding the compensation awarded to or earned during our fiscal year ended September 30, 2006 by our principal executive officer (PEO), principal financial officer (PFO) and the four most highly compensated executive officers other than the PEO and PFO.

Summary Compensation Table for Fiscal Year Ended September 30, 2006

Name and Principal Position
   Year
   Salary
($)(1)
   Bonus
($)(2)
   Stock
Awards
($)(3)
   Option
Awards
($)(4)
   Non-Equity
Incentive
Plan
Compensation
($)
   Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings ($)
   All Other
Compensation
($)
   Total
($)
John M. Dionisio
President and Chief Executive Officer (PEO)		   2006   $ 718,760   $ 850,000   $ 1,600,278   $ —   $ —   $ 89,436   $ 103,117 (5) $ 3,361,590
Richard G. Newman
Chairman		   2006   $ 900,016   $ 850,000   $ 1,324,378   $ —   $ —   $ 3,674   $ 116,947 (6) $ 3,195,015
James R. Royer
Executive Vice President and Chief Operating Officer		   2006   $ 443,758   $ 450,000   $ 316,871   $ —   $ —   $ 83,325   $ 87,427 (7) $ 1,381,381
Michael S. Burke
Executive Vice President and Chief Corporate Officer(12)		   2006   $ 353,853   $ 400,000   $ 240,295   $ 93,700 (8) $ —   $ —   $ 369,568 (9) $ 1,457,416
Francis S.Y. Bong
Chairman Asia		   2006   $ 347,431   $ 408,218   $ 273,899   $ —   $ —   $ —   $ 349,954 (10) $ 1,379,502
Glenn R. Robson
Senior Vice President and Chief Financial Officer (PFO)(12)		   2006   $ 343,751   $ 260,000   $ 219,584   $ —   $ —   $ —   $ 62,340 (11) $ 885,675
(1)
Includes deferrals to qualified defined contribution and non-qualified deferred compensation plans. For more information regarding amounts deferred into the non-qualified deferred compensation plan, please refer to the Nonqualified Deferred Compensation Table.

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(2)
Includes the FY 2006 incentive compensation (IC) bonus amounts paid in December 2006 based on the results of each individual's performance criteria plus all cash bonuses accrued and paid in FY 2006 excluding IC paid in December 2005 since the amounts were accrued in FY 2005.

(3)
Each Named Executive Officer received a grant or grants under the Performance Earnings Program (PEP) in FY 2005 and FY 2006. Each participant in the PEP was awarded a specific number of target credits that will be earned by the participant throughout a three-year performance period based on a formula that will include multiple categories of performance for AECOM (refer to the long-term incentive awards section of the "Compensation Discussion & Analysis" section in this prospectus for more details regarding this program). The future value of these PEP grants is dependent upon the performance of the Company.
(4)
Although AECOM was not subject to SFAS 123R with respect to FY 2006, the disclosures in the Option Awards column are based on the dollar amounts that AECOM would have recognized as a compensation expense for financial reporting purposes under SFAS 123R with respect to FY 2006 had AECOM been subject to SFAS 123R. Please reference the Outstanding Awards at Fiscal Year-End and Option Exercises and Stock Vested tables for additional information with respect to all awards outstanding as of September 30, 2006.

(5)
This amount includes company match in the defined contribution Retirement & Savings Plan (RSP), company match in the non-qualified deferred compensation Stock Purchase Plan (SPP) in the amount of $51,494, executive life insurance premiums, executive medical insurance premiums in the amount of $26,899, tax gross-ups on the Medicare and FICA tax attributed to the non-qualified defined benefit plan benefits and the deferred compensation plans (M-SERP, SERP & SPP), travel expenses for spouse, entertainment/sporting event expenses and automobile related expenses.

(6)
This amount includes company match in the defined contribution Retirement & Savings Plan (RSP), company match in the non-qualified deferred compensation Stock Purchase Plan (SPP) in the amount of $52,156, executive life insurance premiums, executive medical insurance premiums in the amount of $26,899, tax gross-ups on the Medicare and FICA tax attributed to the non-qualified defined benefit plan benefits and the deferred compensation plans (M-SERP, SERP & SPP), travel expenses for spouse, company-paid charitable contributions, entertainment/sporting event expenses, membership dues and automobile related expenses.

(7)
This amount includes company match in the defined contribution Retirement & Savings Plan (RSP), company match in the non-qualified deferred compensation Stock Purchase Plan (SPP) in the amount of $12,833, executive life insurance premiums, executive medical insurance premiums in the amount of $26,899, tax gross-ups on the Medicare and FICA tax attributed to the non-qualified Defined Benefit benefits and the deferred compensation plans (M-SERP, SERP & SPP), travel expenses for spouse, membership dues, entertainment/sporting event expenses and automobile related expenses.

(8)
Michael Burke received options to purchase 20,000 shares of AECOM common stock granted on October 3, 2005 with an exercise price of $12.405 per share. This award is valued at a Black-Scholes value of $4.685 per share option as of the grant date. This Black-Scholes valuation includes the following assumptions: Time to Expiration of 7 years, which matches the life of the option as AECOM has historically not experienced early exercise of options by our executives; Risk Factor Rate of 4.31%, which is the market yield on U.S. Treasury securities at 7-year constant maturity as of October 3, 2005; and Volatility of 0.25, which considers volatility of publicly-traded comparable company stocks as of the valuation date.

(9)
This amount includes company match in the defined contribution Retirement & Savings Plan (RSP) in the amount of $25,150, company match in the non-qualified deferred compensation Stock Purchase Plan (SPP) in the amount of $242,749, a company match of $54,000 based on an 18% match on a $300,000 Senior Executive Equity Investment Plan (SEEIP) loan note issued on October 3, 2005, executive life insurance premiums, executive medical insurance premiums in the amount of $26,899, travel expenses for spouse, membership dues and automobile related expenses.

(10)
This amount includes company match in the Hong Kong Global Stock Plans in the amount of $212,047, company pension plan contributions to the Hong Kong MFP Pension Plan, executive medical insurance premiums, travel expenses for spouse, housing & travel allowances, membership dues and automobile related expenses.

(11)
This amount includes company match in the defined contribution Retirement & Savings Plan (RSP) and the non-qualified deferred compensation Stock Purchase Plan (SPP), executive life insurance premiums, executive medical insurance premiums in the amount of $26,899, tax gross-ups on the Medicare and FICA tax attributed to the SPP, membership dues and automobile related expenses.

(12)
Messrs. Robson and Burke's positions changed in December 2006. Mr. Burke has been named Executive Vice President, Chief Financial Officer and Chief Corporate Officer and is now our Principal Financial Officer, and Mr. Robson has been named Senior Vice President, Finance and Chief Strategy Officer.

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Grants of Plan-based Awards for Fiscal Year 2006

 
    
   Estimated Future Payouts Under Non-Equity Incentive Plan Awards
   Estimated Future Payouts Under Equity Incentive Plan Awards(1)
    
    
    
    
  
Name and Principal Position
   Grant
Date
   Thresholds
($)
   Targets
($)
   Maximums
($)
   Thresholds
(#)
   Targets
(#)
   Maximums
(#)
   All Other Stock Awards:
Number of Shares or Stock/Units
   All Other Stock Awards:
Number of Securities Underlying Options
   Exercise or Base Price of Options Awards
($/Sh)(2)
   Grant Date
Fair value of stock and option awards(3)
  
John M. Dionisio
President and Chief Executive Officer		   12/01/2005   $ —   $ —   $ —   69,000   207,000   276,000     —     —   $ —   $ 2,567,835  

Richard G. Newman
Chairman
 
12/01/2005
 
$
—
 
$
—
 
$
—
 
40,900
 
122,700
 
163,600
 
 
—
 
 
—
 
$
—
 
$
1,522,094
 

James R. Royer
Executive Vice President and Chief Operating Officer
 
12/01/2005
 
$
—
 
$
—
 
 
—
 
10,000
 
30,000
 
40,000
 
 
—
 
 
—
 
$
—
 
$
372,150
 

Michael S. Burke
Executive Vice President and Chief Corporate Officer
 
10/30/2005
12/01/2005
12/01/2005
 
$
—
 
$
—
 
$
—
 
0
5,000
6,750
 
0
15,000
20,250
 
0
20,000
27,000
 
 
—
 
 
20,000
0
0
(4)
$
12.405
 
$
$
$
93,700
186,075
251,201

(5)

Francis S. Y. Bong
Chairman Asia
 
2/01/2005
 
$
—
 
$
—
 
$
—
 
7,500
 
22,500
 
30,000
 
$
—
 
$
—
 
$
—
 
$
279,113
 

Glenn R. Robson
Senior Vice President and Chief Financial Officer
 
12/01/2005
 
$
—
 
$
—
 
$
—
 
6,750
 
20,250
 
27,000
 
$
—
 
$
—
 
$
—
 
$
251,201
 
(1)
Each Named Executive Officer above received a grant under the Performance Earnings Program (PEP) in FY 2006, which program is administered under the AECOM Technology Corporation 2000 Stock Incentive Plan. Each participant in the PEP was awarded a specific number of target credits that will be earned by the participant throughout a three-year performance period based on a formula that will include multiple categories of performance for AECOM (refer to the long-term incentive awards section of the "Compensation Discussion & Analysis" section in this prospectus for more details regarding this program). The future value of these PEP awards is dependent upon the performance of the Company.
(2)
The exercise or base price of option awards granted is the fair market value of the Company's common stock as of the date of grant, as determined by the most recent valuation by an independent valuation firm for the quarter ending immediately prior to the grant date.

(3)
The grant date fair value of option awards is based upon the Black-Scholes value of such awards.
(4)
Michael Burke's options to purchase 20,000 shares of common stock were approved and granted in December 2005 with an exercise price at the then current stock price of $12.405 per share, as determined by the most recent valuation by an independent valuation firm for the quarter ending immediately prior to the grant date. The stock option was granted with a seven-year term, vesting one-third every year on the anniversary date of the grant. With approval by the Compensation and Organization Committee and the Board of Directors, we subsequently vested 100% of all stock options granted prior to September 28, 2006. Therefore, these stock options were fully vested in FY 2006.

(5)
As a new executive hire in FY 2005, Michael Burke received a partial PEP FY 2005 grant of 20,000 credits made in FY 2006 for the PEP cycle that began in FY 2005. The amounts disclosed in the this column are based upon the number of initial PEP FY 2005 credits granted multiplied by an expected achievement percentage of 75% in accordance with our financial plan estimates, valued at the September 30, 2004 AECOM common stock price of $12.405.

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Outstanding Equity Awards at Fiscal Year-End 2006

 
    
    
    
    
    
   Stock Awards(2)
 
    
    
    
    
    
    
    
    
   Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares,
Units or
Other Rights that
Have Not Vested
($)
 
   Option Awards(1)
    
    
   Equity Incentive Plan Awards:
Number of
Unearned Shares,
Units or Other Rights that Have Not Vested
(#)
Name and Principal Position
   Number of Securities Underlying Unexercised Options Exercisable
(#)
   Number of Securities Underlying Unexercised Options Unexercisable
(#)
   Equity Incentive Plan Awards:
Number of Securities Underlying Unexercised Unearned Options
(#)
   Option Exercise Price
($)
   Option Expiration Date
   Number of Shares or Units that Have Not Vested
(#)
   Market Value Shares or Units that Have Not Vested
($)
John M. Dionisio
President and Chief Executive Officer		   20,000
50,000
60,000
30,000
50,000
40,000
100,000
100,000		   0
0
0
0
0
0
0
0		   0
0
0
0
0
0
0
0		   $
$
$
$
$
$
$
$		 4.15
4.99
5.455
6.84
7.84
8.36
9.755
10.39		   08/22/2007
08/20/2008
08/19/2009
11/14/2007
11/21/2009
11/15/2008
11/20/2010
12/02/2011		   0   $ 0   PEP 05 - 41,658
PEP 06 - 192,476		   PEP 05 - $   591,542
PEP 06 - $2,733,151

Richard G. Newman
Chairman
 
70,000
100,000
120,000
100,000
300,000
100,000
360,000
150,000
 
0
0
0
0
0
0
0
0
 
0
0
0
0
0
0
0
0
 
$
$
$
$
$
$
$
$
4.15
4.99
5.455
6.84
7.84
8.36
9.755
10.39
 
08/22/2007
08/20/2008
08/19/2009
11/14/2007
11/21/2009
11/15/2008
11/20/2010
12/02/2011
 
0
 
$
0
 
PEP 05 - 62,486
PEP 06 - 114,090
 
PEP 05 - $   887,313
PEP 06 - $1,620,085

James R. Royer
Executive Vice President and Chief Operating Officer
 
20,000
30,000
30,000
20,000
40,000
40,000
50,000
 
0
0
0
0
0
0
0
 
0
0
0
0
0
0
0
 
$
$
$
$
$
$
$
4.15
4.99
5.455
6.84
7.84
8.36
9.755
 
08/22/2007
08/20/2008
08/19/2009
11/14/2007
11/21/2009
11/15/2008
11/20/2010
 
0
 
$
0
 
PEP 05 - 14,580
PEP 06 - 27,894
 
PEP 05 - $   207,040
PEP 06 - $   396,109

Michael S. Burke
Executive Vice President and Chief Corporate Officer
 
20,000
 
0
 
0
 
$
12.405
 
10/03/2012
 
0
 
$
0
 
PEP 05 - 11,248
PEP 06 - 18,830
 
PEP 05 - $   159,731
PEP 06 - $   267,373

Francis S. Y. Bong
Chairman Asia
 
50,000
50,000
50,000
50,000
 
0
0
0
0
 
0
0
0
0
 
$
$
$
$
6.84
7.84
8.36
9.755
 
11/14/2007
11/21/2009
11/15/2008
11/20/2010
 
0
 
$
0
 
PEP 05 - 14,580
PEP 06 - 20,922
 
PEP 05 - $   207,040
PEP 06 - $   297,082

Glenn R. Robson
Senior Vice President and Chief Financial Officer
 
100,000
40,000
 
0
0
 
0
0
 
$
$
8.79
9.755
 
08/22/2009
11/20/2010
 
0
 
$
0
 
PEP 05 - 10,414
PEP 06 - 18,830
 
PEP 05 - $   147,886
PEP 06 - $   267,373
(1)
All outstanding stock options as of September 28, 2006 were fully vested by the AECOM Board in FY 2006.

(2)
In FY 2006, the Compensation and Organization Committee, with approval from the Board, determined that the payment terms for outstanding FY05 PEP and FY06 PEP awards would be modified, as described in footnote 1 to the "Grants of Plan-based Awards" table. The results of the FY 2005 PEP cycle and FY 2006 PEP cycle were determined through the end of FY 2006.

89


Options Exercises and Stock Vested for Fiscal Year 2006

 
   Option Awards
   Stock Awards(1)
Name and Principal Position
   Number of Shares Acquired on Exercise (#)
   Value Realized
on Exercise ($)
   Number of Shares Acquired on Vesting ($)
   Value Realized
on Vesting ($)
John M. Dionisio
President and Chief Executive Officer		   30,000   $ 253,800   PEP 05 - 29,172
PEP 06 - 41,762		   PEP 05 - $414,229
PEP 06 - $593,024

Richard G. Newman
Chairman
 
100,000
 
$
846,000
 
PEP 05 - 43,756
PEP 06 - 24,754
 
PEP 05 - $621,343
PEP 06 - $351,517

James R. Royer
Executive Vice President and Chief Operating Officer
 
80,000
20,000
 
$
$
712,000
169,200
 
PEP 05 - 10,210
PEP 06 -  6,052
 
PEP 05 - $144,980
PEP 06 - $  85,946

Michael S. Burke
Executive Vice President and Chief Corporate Officer
 
0
 
$
0
 
PEP 05 -  4,376
PEP 06 -  4,086
 
PEP 05 - $  62,134
PEP 06 - $  58,013

Francis S. Y. Bong
Chairman Asia
 
0
 
$
0
 
PEP 05 - 10,210
PEP 06 -  4,540
 
PEP 05 - $144,980
PEP 06 - $  64,459

Glenn R. Robson
Senior Vice President and Chief Financial Officer
 
0
 
$
0
 
PEP 05 -  7,292
PEP 06 -  4,086
 
PEP 05 - $103,557
PEP 06 - $  58,013
(1)
In FY06, the Compensation and Organization Committee, with approval from the Board, determined that the payment terms for outstanding FY05 PEP and FY06 PEP awards would be modified, as described in footnote 1 to the "Grants of Plan-based Awards" table. The results of the 2005 PEP cycle and 2006 PEP cycle were determined through the end of FY06.

90


Pension Benefits for Fiscal Year 2006

Name and Principal Position
   Plan Name
   Number of Years Credited Service
(#)
   Present Value of Accumulated Benefits
($)(1)
   Payments During
Last Fiscal Year
($)

John M. Dionisio
President and Chief Executive Officer
 
AECOM Technology Corporation Pension Plan(2)
 
19.5000
 
$
133,718
 
0

 
 
AECOM Technology Corporation Management Supplemental Executive Retirement Plan(3)
 
19.5000
 
$
104,286
 
0

 
 
1992 AECOM Technology Corporation Supplemental Executive Retirement Plan(4)
 
19.5000
 
$
1,664,293
 
0

Richard G. Newman
Chairman
 
AECOM Technology Corporation Pension Plan
 
29.2500
 
$
969,552
 
0

 
 
AECOM Technology Corporation Management Supplemental Executive Retirement Plan
 
29.2500
 
$
149,344
 
0

James R. Royer
Executive Vice President and Chief Operating Officer
 
AECOM Technology Corporation Pension Plan
 
10.4167
 
$
29,412
 
0

 
 
AECOM Technology Corporation Management Supplemental Executive Retirement Plan
 
10.4167
 
$
91,159
 
0

 
 
1996 AECOM Technology Corporation Supplemental Executive Retirement Plan(5)
 
10.4167
 
$
781,129
 
0

Michael S. Burke
Executive Vice President and Chief Corporate Officer
 
 
 
0
 
 
0
 
0

Francis S. Y. Bong
Chairman Asia
 
 
 
0
 
 
0
 
0

Glenn R. Robson
Senior Vice President and Chief Financial Officer
 
 
 
0
 
 
0
 
0

Messrs. Robson, Burke and Bong are not eligible for any of the AECOM Pension Plans.

(1)
Present Value of Accumulated Benefits ($)—Liabilities shown in this table are computed using the projected unit credit method reflecting average salary and service as of fiscal year end 2006. The material assumptions, except the retirement assumption, used to determine these liabilities can be located in note 9 to our consolidated financial statements found elsewhere in this prospectus. The retirement assumption was based on the respective plans' normal retirement age.

(2)
AECOM Technology Corporation Pension Plan—The plan's benefit formula is integrated with Social Security and is based on the participant's years of service for the Company and "Final Average Compensation." Effective April 1, 2004, compensation for use in determining the Final Average Compensation was limited to the participant's highest annual compensation for any calendar year during the period beginning January 1, 1994 and ending December 31, 2003. Compensation is further limited to the applicable Internal Revenue Code section 401(a)(17) limit. The plan benefit is limited to the applicable Internal Revenue Code section 415(b) limit. Only employees hired before April 1, 1998 are eligible to participate in the plan. In addition, eligibility for the plan occurs no later than the completion of one year of service. Normal retirement age is 65.

91

(3)
AECOM Technology Corporation Management Supplemental Executive Retirement Plan—The plan's benefit formula is integrated with Social Security and is based on the participant's years of service for the Company and Final Average Compensation. Effective April 1, 2004, compensation for use in determining the Final Average Compensation was limited to the participant's highest annual compensation for any calendar year during the period beginning January 1, 1994 and ending December 31, 2003. Compensation is further limited to the applicable Internal Revenue Code section 401(a)(17) limit. The plan benefit is limited to the applicable Internal Revenue Code section 415(b) limit. The participant's benefit under this plan is equal to the participant's Total AECOM Pension Plan Benefit minus the benefit payable to the participant under the AECOM Technology Corporation Pension Plan. Only employees hired before April 1, 1998 are eligible to participate in the plan. In addition, eligibility for the plan occurs no later than the completion of one year of service and the participant has to be a member of a select group of management or highly compensated employees, is an officer, is eligible for the AECOM Technology Corporation Incentive Compensation Plan and has been selected by the Compensation and Organization Committee to participate in the plan. Normal retirement age is 65. Early retirement age is the first day of any month after age 55, provided the participant has earned five years of service. Compensation is the participant's salary, plus sick pay, overtime pay, shift premiums, contract completion bonuses, incentive compensation bonuses, severance pay paid within 30 days of termination of employment, vacation pay, pre-tax contributions made on the participant's behalf to a Internal Revenue Code Section 125 cafeteria plan and pre-tax contributions to the Retirement and Savings Plan under Internal Revenue Code Section 401(k).

(4)
1992 AECOM Technology Corporation Supplemental Executive Retirement Plan—The plan's benefit formula is integrated with Social Security and is based on the participant's years of service for the Company and Final Average Compensation. Effective April 1, 2004, compensation for use in determining the Final Average Compensation was limited to the participant's highest annual compensation for any calendar year during the period beginning January 1, 1994 and ending December 31, 2003. The participant's benefit under this plan is equal to the participant's Unlimited AECOM Pension Plan benefit minus the benefit payable to the participant under the AECOM Technology Corporation Management Supplemental Executive Retirement Plan and the AECOM Technology Corporation Pension Plan. Only employees hired before April 1, 1998 are eligible to participate in the plan. In addition, eligibility for the plan occurs when the participant is a member of a select group of management or highly compensated employees, has completed at least five years of Service, is at least 50 years old and has been selected by the Board of Directors to participate in the plan. Normal retirement age is 62, provided the participant has been a participant for 36 months. Early retirement age is the first day of any month after age 55, provided the participant has earned three years of service. Compensation is the participant's salary, plus sick pay, overtime pay, shift premiums, contract completion bonuses, incentive compensation bonuses, severance pay paid within 30 days of termination of employment, vacation pay, pre-tax contributions made on the participant's behalf to a Internal Revenue Code Section 125 cafeteria plan and pre-tax contributions to the Retirement and Savings Plan under Internal Revenue Code Section 401(k).

(5)
1996 AECOM Technology Corporation Supplemental Executive Retirement Plan—The plan's benefit formula is integrated with Social Security and is based on the participant's years of service for the Company and Final Average Compensation. Effective April 1, 2004, compensation for use in determining the Final Average Compensation was limited to the participant's highest annual compensation for any calendar year during the period beginning January 1, 1994 and ending December 31, 2003. The participant's benefit under this plan is equal to the participant's Unlimited AECOM Pension Plan benefit minus the benefit payable to the participant under the AECOM Technology Corporation Management Supplemental Executive Retirement Plan and the AECOM Technology Corporation Pension Plan. Only employees hired before April 1, 1998 are eligible to participate in the plan. In addition, eligibility for the plan occurs when the participant is a member of a select group of management or highly compensated employees, has completed at least five years of service, is at least 50 years old, has a date of hire on or after March 1, 1996 and has been selected by the Board of Directors to participate in the plan. Normal retirement age is 62, provided the participant has been a participant for 36 months. Early retirement age is the first day of any month after age 55, provided the participant has earned three years of service. Compensation is the participant's salary, plus sick pay, overtime pay, shift premiums, contract completion bonuses, incentive compensation bonuses, severance pay paid within 30 days of termination of employment, vacation pay, pre-tax contributions made on the participant's behalf to a Internal Revenue Code Section 125 cafeteria plan and pre-tax contributions to the Retirement and Savings Plan under Internal Revenue Code Section 401(k).

92


Nonqualified Deferred Compensation for Fiscal Year 2006

Name and Principal Position
   Executive Contributions in Last FY ($)(1)
   Registrant Contributions in Last FY ($)(2)
   Aggregate
Earnings
in Last FY ($)(3)
   Aggregate Withdrawals/ Distributions
($)(4)
   Aggregate Balance
at Last
FYE ($)(5)
John M. Dionisio
President and Chief Executive Officer		   $ 285,080   $ 51,494   $ 452,908   $ (706 ) $ 3,653,055

Richard G. Newman
Chairman
 
$
303,756
 
$
52,156
 
$
1,830,737
 
$
(701
)
$
14,535,060

James R. Royer
Executive Vice President and Chief Operating Officer
 
$
70,294
 
$
12,833
 
$
582,940
 
$
(217
)
$
4,619,241

Michael S. Burke
Executive Vice President and Chief Corporate Officer
 
$
0
 
$
296,749
(6)
$
15,477
 
$
0
 
$
311,666

Francis S. Y. Bong(7)
Chairman Asia
 
$
0
 
$
0
 
$
0
 
$
0
 
$
0

Glenn R. Robson
Senior Vice President and Chief Financial Officer
 
$
30,504
 
$
5,491
 
$
98,541
 
$
(229
)
$
779,995
(1)
Consists of FY 2006 employee contributions to the Stock Purchase Plan (SPP). As of September 30, 2006, participants were allowed to defer the same type of compensation into the SPP as could be deferred into the qualified AECOM Technology Corporation Retirement & Savings Plan (RSP). Participants could defer up to 50% of their base pay and 100% of any bonus they received into the SPP, which contributions were credited to the participant's account under the SPP as a number of common stock units based on the fair market value of the Company's common stock, as determined by the most recent valuation by an independent valuation firm for the then most recently completed fiscal quarter. As of September 30, 2006, participants in the SPP were provided an 18% company match, credited in the form of additional common stock units, on all contributions to the plan, which match is 100% vested after three years of service with the Company. As of September 30, 2006, the only distribution option under the SPP was a lump-sum in-kind distribution at termination of employment of a number of shares of the Company's common stock equal to the number of common stock units credited to the participant's account at the time of such termination of employment. As of September 30, 2006, the shares of common stock distributed were subject to repurchase by the Company after the participant's employment terminates, pursuant to the Company's Bylaws.

(2)
Consists of FY 2006 Company match contributions to the SPP. The values in this column are also represented in the All Other Compensation column of the Summary Compensation Table above.

(3)
This is the difference in the SPP beginning balance as of October 1, 2005 and the SPP ending balance as of September 29, 2006, less any activity in the plan during the 2006 fiscal year. The values in this column are not represented in the Summary Compensation Table.

(4)
Consists of SPP Company match stock units that were sold in FY 2006 to cover the taxes on the SPP company match earned in calendar year 2005.

(5)
Consists of the September 29, 2006 SPP ending balance, including SPP Senior Executive Equity Investment Plan (SEEIP) company match shares.

(6)
Includes a company match of $54,000 contributed to the SPP based on an 18% match on a $300,000 SEEIP loan note issued on October 3, 2005.

(7)
As our Chairman, Asia and a non-U.S. resident, Mr. Bong is not eligible for the SPP.

93


Directors Compensation for Fiscal Year 2006

Name and Principal Position
   Fees Earned or Paid in Cash ($)(1)
   Stock Awards ($)
   Option Awards ($)(2)
   Non-Equity Incentive Plan Compensation ($)
   Change in Pension Value & Non-Qualified Deferred Compensation Earnings
   All Other Compensation ($)(3)
   Total ($)
H. Frederick Christie(4)   $ 66,000   $ 0   $ 48,600   $ 0   $ 0   $ 13,503   $ 128,103
John W. Downer(7)   $ 44,500   $ 0   $ 48,600   $ 0   $ 0   $ 13,335   $ 106,435
James H. Fordyce(5)   $ 0   $ 0   $ 0   $ 0   $ 0   $ 5,000   $ 5,000
S. Malcolm Gillis(8)   $ 55,000   $ 0   $ 48,600   $ 0   $ 0   $ 12,809   $ 116,409
Linda Griego   $ 55,000   $ 0   $ 48,600   $ 0   $ 0   $ 12,862   $ 116,462
Robert J. Lowe(9)   $ 58,500   $ 0   $ 48,600   $ 0   $ 0   $ 9,741   $ 116,841
William G. Ouchi   $ 55,500   $ 0   $ 48,600   $ 0   $ 0   $ 5,802   $ 109,902
William P. Rutledge   $ 64,500   $ 0   $ 48,600   $ 0   $ 0   $ 9,024   $ 122,124
Lee D. Stern(6)   $ 0   $ 0   $ 0   $ 0   $ 0   $ 0   $ 0

Messrs. Dionisio, Newman and Bong are employee directors and do not receive separate compensation (i.e. annual retainer fees, board and committee meeting fees) for participating as Board members.

(1)
These amounts include annual retainer fees and board and committee meeting fees earned in FY 2006. The following non-employee directors deferred amounts from their retainer fees and board and committee meeting fees paid in FY 2006 into the Stock Purchase Plan (SPP): Christie—$46,750, Gillis—$32,000, Griego—$41,000, Lowe—$22,750 and Rutledge—$49,000.

(2)
Each non-employee director, excluding Fordyce and Stern as designees of the Class F and Class G stockholders, received an option to purchase 10,000 shares of common stock granted on March 2, 2006 with an exercise price of $12.535 per share. These awards are valued at a Black-Scholes value of $4.86 per share as of the grant date. This Black-Scholes valuation includes the following assumptions: Time to Expiration of 7 years, which matches the life of the option as AECOM has historically not experienced early exercise of options by its executives; Risk Factor Rate of 4.66%, which is the market yield on U.S. Treasury securities at 7-year constant maturity as of October 3, 2005; and Volatility of 0.25, which considers volatility of publicly-traded comparable company stocks as of the valuation date.
(3)
These amounts include company match on deferred pre-tax contributions from fees earned during FY 2006 into the SPP, Company matching contributions to chartable organizations on behalf of the non-employee directors and spousal travel for non-employee directors.

(4)
Mr. Christie exercised options to purchase 2,000 shares of common stock on 2/13/2006 with a realized gain of $17,800 and exercised options to purchase 1,000 shares of common stock on 7/25/2006 with a realized gain of $9,765.

(5)
Mr. Fordyce is the designated director for the holders of Class G preferred stock and is not paid a retainer by AECOM.

(6)
Mr. Stern is the designated director for the holders of Class F preferred stock and is not paid a retainer by AECOM.

(7)
Mr. Downer retired from the AECOM Board of Directors on December 1, 2006.

(8)
Mr. Gillis exercised options to purchase 3,000 shares of common stock on 2/14/2006 with a realized gain of $17,085.

(9)
Mr. Lowe exercised options to purchase 2,000 shares of common stock on 2/13/2006 with a realized gain of $17,800 and exercised options to purchase 1,000 shares of common stock on 3/13/2006 with a realized gain of $8,460.

        We established our AECOM Technology Corporation 2006 Stock Incentive Plan effective October 1, 2006 in order to promote the success of AECOM by providing additional long-term incentives for high levels of performance and for significant efforts to improve the financial performance of AECOM. Persons eligible to receive awards under the 2006 Stock Incentive Plan include key employees and officers of AECOM and its subsidiaries and to members of our Board of Directors who are not our employees. The 2006 Stock Incentive Plan replaced our previously existing equity compensation plans, the AECOM Technology Corporation 2000 Stock Incentive Plan and the Amended and Restated AECOM Technology Corporation Stock Incentive Plan for Non-Employee

94

Directors. No additional awards will be granted under either the AECOM Technology Corporation 2000 Stock Incentive Plan or the Amended and Restated AECOM Technology Corporation Stock Incentive Plan for Non-Employee Directors, however, the shares that remained available for issuance under those plans at the time the 2006 Stock Incentive Plan was adopted were absorbed by and are available for issuance under the 2006 Stock Incentive Plan.

        The 2006 Stock Incentive Plan authorizes stock options, stock appreciation rights (SARs), restricted stock, restricted stock units, incentive bonuses and performance-based awards. We believe the various forms of awards that may be granted under the 2006 Stock Incentive Plan give us the flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Generally, an option or stock appreciation right will expire, or other award will vest, not more than ten years after the date of grant.

        The 2006 Stock Incentive Plan can be administered by our Board of Directors or by one or more committees appointed by our Board of Directors. Currently the Compensation and Organization Committee of our Board of Directors administers the 2006 Stock Incentive Plan.

        The current aggregate share limit under the 2006 Stock Incentive Plan is 21,500,000 shares and the maximum number of shares subject to awards which may be granted to any individual during any calendar year is 4,000,000. At December 31, 2006, there were 12,157,206 shares available for issuance under this Plan. At December 31, 2006, there were 465,020 options outstanding under the 2006 Stock Incentive Plan with a weighted average exercise price of $14.20 per share. The maximum number of shares available for issuance under the 2006 Stock Incentive Plan will automatically increase on October 1, 2007 and on the first day of each fiscal year thereafter for nine more years, by the least of: (i) 5% of the our fully diluted shares outstanding as of the last day of the preceding fiscal year; (ii) 6,000,000 shares, or (iii) a number determined by the Board of Directors or the plan's administrator.

        Stock options and SARs granted under the 2006 Stock Incentive Plan have an exercise price equal to the fair market value of a share of our common stock on the later of the date of approval of the award by the Compensation and Organization Committee and the identification of the individual grantee, but in no event shall the exercise price be less than the fair market value of a share on the date of grant. An option may either be an Incentive Stock Option or a Nonqualified Stock Option. Incentive Stock Options are also subject to more restrictive terms and are limited in amount by the Internal Revenue Code and the Plan. Full payment for shares purchased on the exercise of an option must be made at the time of such exercise in a manner approved by the Committee.

        Upon a participant's retirement after age 65, retirement at age 55 with approval from Compensation and Organization Committee, death or total disability, or upon the occurrence of other events specified in the 2006 Stock Incentive Plan and summarized below, the Compensation and Organization Committee may provide that each option and SAR will become immediately vested and exercisable, each award of restricted stock will immediately vest free of restrictions and each performance share award will become payable to the holder of the award.

        Our Compensation and Organization Committee may amend or terminate the 2006 Stock Incentive Plan at any time. In addition, the Compensation and Organization Committee may generally amend or modify the 2006 Stock Incentive Plan from time to time. Stockholder approval for an amendment will generally not be obtained unless required by applicable law or deemed necessary or advisable by our Board of Directors. Unless previously terminated by our Compensation and Organization Committee, the Plan will terminate on September 30, 2016. Outstanding awards may be amended, however, only with the consent of the holder if the amendment alters or impairs the rights of the holder.

95

        Upon our dissolution or liquidation, or if we are not the surviving entity as a result of a reorganization, merger or other consolidation with or into another corporation, the 2006 Stock Incentive Plan and all outstanding awards will terminate unless the successor corporation has provided for the assumption or substitution of the outstanding awards.

        In February 2000, we adopted the 2000 Stock Incentive Plan that replaced our Stock Incentive Plan first adopted in 1990. The 2000 Stock Incentive Plan authorizes the issuance of stock options, stock appreciation rights (SARs), restricted stock and performance share awards to officers and key employees of AECOM and our subsidiaries and certain consultants and advisors to AECOM or any of our subsidiaries. The maximum number of shares authorized for issuance under the 2000 Stock Incentive Plan is 14,000,000. The remaining shares available for issuance under this plan as of October 1, 2006 were assumed into the 2006 Stock Incentive Plan.

        Stock options granted under the 2000 Stock Incentive Plan have an exercise price equal to the fair market value of a share of our common stock on the later of the date of approval of the award by the Compensation and Organization Committee and the identification of the individual grantee, but in no event is the exercise price be less than the fair market value of a share on the date of grant. Generally, an option granted under the 2000 Stock Incentive Plan will expire not more than ten years after the date of grant.

        At December 31, 2006, there were 1,709,300 options outstanding under the Stock Incentive Plan with a weighted average exercise price of $5.01 per share and 6,873,424 options outstanding under the 2000 Stock Incentive Plan with a weighted average exercise price of $9.19 per share.

        On July 9, 2002, we adopted an amended and restated Stock Incentive Plan for Non-Employee Directors. The Stock Incentive Plan for Non-Employee Directors authorizes the issuance of options to purchase up to 500,000 shares of our common stock to directors who are not our employees or who do not own more than 5% of our outstanding voting securities. This plan terminated on May 25, 2005, although options granted prior to that date will remain exercisable until their respective expiration dates.

        At December 31, 2006, there were 225,050 options outstanding under the Stock Incentive Plan for Non-Employee Directors with a weighted average exercise price of $8.895 per share.

        The 2006 Stock Incentive Plan for Non-Employee Directors (the "Directors Plan") authorizes the issuance of options to purchase up to 500,000 shares of our common stock to directors who are not our employees or who do not own more than 5% of our outstanding voting securities.

        The Directors Plan is administered by our Board of Directors or by one or more committees appointed by our Board of Directors. Currently the Compensation and Organization Committee of our Board of Directors administers the Directors Plan.

        Under this plan, new directors will be granted options to purchase 10,000 shares of our common stock with an exercise price equal to the fair market value of our common stock on the date of grant. On the first business day following our annual meeting of stockholders, each director will be granted options to purchase 10,000 shares of our common stock with an exercise price that is equal to the fair market value of our common stock on the date of grant.

96


        Options vest six months after date of grant. Revaluing of options is disallowed under this plan. Shares subject to options that have expired will become available for grant again under the Directors Plan. During fiscal year 2006, stock options in respect of 70,000 shares were granted to seven of our directors with a weighted average exercise price of $12.535 per share.

        The remaining shares available for issuance under this plan as of October 1, 2006 were assumed into the 2006 Stock Incentive Plan.

        We established a Performance Earnings Program, or PEP, in December 2004 to issue incentives (pursuant to either our 2000 Stock Incentive Plan and 2006 Stock Incentive Plan) to our officers and key employees in lieu of stock options. Participants can earn up to 100% of the granted credits over a three year performance period. The performance periods for the fiscal 2005 and fiscal 2006 grants are fiscal years 2005, 2006 and 2007 and 2006, 2007 and 2008, respectively. The PEP is described in more detail in the "Compensation Discussion and Analysis" section of this prospectus.

        Most full and part-time AECOM employees may purchase AECOM common stock through plans developed to comply with local laws and regulations. The largest such stock investment plan is in the United States, which we refer to as our Retirement & Savings Plan, and, together with all our non-U.S. plans, comprise the AECOM Global Stock Program. The Global Stock Program enables our employees to purchase our common stock through payroll deductions each pay period and contributions from year-end bonuses. After holding AECOM common stock for five years, participants may diversify some or all of those holdings into cash or other investment funds under a diversification program. Employee stock plans are currently established in the United States, Hong Kong, United Kingdom, Australia, New Zealand, United Arab Emirates, Qatar, Canada and Singapore.

        In the United States, the Retirement & Savings Plan is a tax-qualified 401(k) plan. During the year, highly compensated employees (generally speaking, employees who earned more than $95,000 in fiscal 2006) may be disqualified from fully participating in the Retirement & Savings Plan. Due to this restriction, we have established a non-qualified plan, the Non-Qualified Stock Purchase Plan, to enable those highly compensated employees to defer compensation that they might otherwise have contributed to the Retirement & Savings Plan. For a further description of the Non-Qualified Stock Purchase Plan, see "Stock Purchase Plan" in Note 13 to the Financial Statements.

        In the third fiscal quarter of fiscal year 2006, we implemented an employee stock plan in Canada. This plan, the UMA Group Ltd Employee Stock Purchase Plan, or UMA ESPP, was adopted as a result of our acquisition of UMA Group in Canada. The UMA ESPP is administered by our Board of Directors and up to 14,000,000 shares of our common stock may be granted under the plan to eligible employees in Canada. We provide a stock match in the form of common stock at a percentage (currently 18%) equal to the stock match percentage under our Global Stock Incentive Plan on all purchases made under this plan. The company stock match will have a three year vesting period, and prior service with UMA will count towards the three year vesting period. None of our current directors or executive officers or any other employees eligible to participate in any other AECOM stock purchase plan will be eligible to participate in the UMA ESPP.

        In connection with our September 2005 acquisition of Tiger Acquisition Corp. and its subsidiaries including ENSR International Corp., AECOM agreed to establish the ENSR 2005 Stock Purchase Plan,

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or ENSR SPP, a non-qualified plan. The ENSR SPP is administered by our Board of Directors or by one or more committees appointed by our Board of Directors. Under the terms of the plan, our Board of Directors, or a committee appointed by our Board, will allow those employees of Tiger Acquisition Corp. and its subsidiaries who were shareholders at the time of acquisition to purchase shares of our common stock at the fair market value of our common stock for a period of six months after the adoption of the plan. Currently, we will also provide an 18% stock match on all purchases made under this plan by crediting such employee's account under one of AECOM's Employee Investment Plans described above for U.S. employees and issuing shares for such stock match directly to non-U.S. employees.

        In connection with our September 2006 acquisition of Cansult Limited, AECOM agreed to establish the Cansult Maunsell Merger Investment Plan or MIP, a non-qualified plan. The MIP is administered by our Board of Directors or by one or more committees appointed by our Board of Directors. Under the terms of the plan, our Board of Directors, or a committee appointed by our Board, will allow those employees of Cansult Limited who were stockholders at the time of acquisition to purchase shares of our AECOM Global Holdings, Ltd. common stock at the fair market value of our common stock for a period of six months after the adoption of the plan.

        In anticipation of future acquisitions, AECOM has established the Equity Investment Plan or EIP, a non-qualified plan. The EIP is administered by our Board of Directors or by one or more committees appointed by our Board of Directors. Under the terms of the plan, our Board of Directors, or a committee appointed by our Board, will allow those employees who join AECOM via mergers and acquisitions that were shareholders at the time of acquisition to purchase shares of our common stock at the fair market value of our common stock for a period of one month after the closing of the transaction.

        A number of our employees participate in pension plans maintained by us and our overseas subsidiaries. In the United States, certain employees participate in the AECOM Pension Plan, a defined benefit plan that was effective on October 1, 1989. Depending on the participant's years of service to AECOM, the pension benefits will range from 26% to 30.5% of the employee's final capped average monthly compensation plus an additional 11% to 12.5% of the employee's final capped average monthly compensation in excess of specified Social Security base amounts. As of April 1, 2004, employees' pensionable compensation was capped at the employee's highest compensation for one full calendar year from 1994 through 2003. The employee's final average compensation will continue to increase until the participant's average compensation reaches the compensation cap. Pension benefits will generally be reduced for participants with less than 25 years of service as required by plan rules. Employee contributions to the Pension Plan of up to 1.5% of compensation were required prior to April 1, 1998.

        On April 1, 1998, we amended our Investment Plan (now part of the Retirement & Savings Plan) to add what we refer to as a 401(k) pension component. This 401(k) pension component generally replaced the AECOM Pension Plan. New employees are not permitted to participate in the AECOM Pension Plan and, as described below, benefits under the 401(k) pension component reduce the AECOM Pension Plan benefits for existing AECOM Pension Plan participants. Employees are allowed to make pre-tax or after-tax contributions of 0.5%, 1.0% or 1.5% of their compensation to this 401(k) pension component. We will match dollar for dollar any such contributions and our matching contributions will vest after three years of service (as defined in the Retirement & Savings Plan).

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        We also amended the AECOM Pension Plan, effective July 1, 1998, to provide that those highly compensated employees who receive bonuses under our incentive compensation program cease earning benefits under the AECOM Pension Plan and instead earn identical benefits under a non-qualified plan, the Management Supplemental Executive Retirement Plan, or MSERP. The MSERP provides a benefit identical in nature to the AECOM Pension Plan but on an unfunded basis.

        The terms of our Pension Plan, MSERP, and related plans are more fully described in the "Compensation Discussion and Analysis" section of this prospectus.

        Our employees outside the United States participate in a variety of public and private retirement and pension plans, both mandatory and voluntary, which provide various benefit levels.

        In Australia, many of our senior staff participate in the AECOM Australia Superannuation Fund which was established July 1, 1965. This plan provides a lump sum defined benefit (at the rate of either 18.5% or 16.5% of the employee's final average annual compensation per year of service, capped at 7.0 times and 6.6 times the employee's average annual compensation, respectively) to a small closed group of employees and lump sum defined contribution benefits to the remainder. In the report on the most recent actuarial valuation at July 1, 2004, the actuary stated that the plan was in a sound financial position.

        In Hong Kong, most of our employees participate in a Defined Contribution Scheme established in December 2000 with employee contributions ranging from 3% to 6.5% of salary plus an employer match of 150% of the first 1% to 4% of employee contributions or for designated participants up to 23.5% of salary.

        We maintain three principal defined benefit pension schemes in the United Kingdom: the Maunsell Ltd. Pension Scheme, the Oscar Faber Pension Fund and the Bullen Pension Plan. The schemes were closed to new participants in 2001, 1999 and 2002, respectively. In all schemes, increases in the pensionable salary are restricted to the annual increase in inflation, capped at 5% per annum, thus severing the link with final salary. The three year average of the pensionable salary, or Final Pensionable Salary, at retirement is utilized to calculate the annual pension. Participants generally accrue 1/60 of Final Pensionable Salary for each year of pensionable service with an option to choose up to 25% of this benefit as a tax-free cash sum at retirement. All benefits payable are subject to overriding U.K. legislation and are currently restricted to a maximum of 40 years pensionable service (or less for certain participants eligible for higher accrual rates) for the calculation of the pension at retirement.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        We have adopted a written related party transaction policy, which covers transactions between us and our directors, executive officers, 5% or greater stockholders and parties related to the foregoing, such as immediate family members and entities they control. The policy requires that any such transaction be considered and approved by our Audit Committee prior to entry into such transaction. In reviewing such transactions, the policy requires the Audit Committee to consider all of the relevant facts and circumstances available to the Audit Committee, including (if applicable) but not limited to the benefits to the Company, the availability of other sources for comparable products or services the terms of the transaction and the terms available to unrelated third parties or to employees generally.

        Under the policy, if we should discover related party transactions that have not been approved, the Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

        Mr. Ronald Yamiolkoski is employed by our subsidiary DMJM+Harris as an Associate Vice President and he is the brother-in-law of Mr. Richard Newman, our Chairman. Mr. Yamiolkoski has no reporting responsibility to Mr. Newman and in our fiscal years ended September 30, 2004, 2005 and 2006, Mr. Yamiolkoski received compensation from DMJM+Harris of approximately $129,000, $155,000 and $157,000, respectively. The employment of Mr. Yamiolkoski was entered into more than 25 years ago, prior to the adoption of our related party transaction policy and has since been ratified by the Audit Committee.

        Two of our subsidiaries have performed design and other services in the ordinary course of business for Lowe Enterprises, which is affiliated with Robert Lowe, one of our directors. Our subsidiaries received fee payments from Lowe Enterprises in our fiscal years ended September 30, 2005 and 2006 in the amounts of approximately $470,000 and $800,000, respectively. In addition, one of our subsidiaries jointly pursued a project with an affiliate of Lowe Enterprises where our subsidiary received payments for design and other services from the project client (which was not affiliated with Lowe Enterprises) in our fiscal years ended 2004, 2005 and 2006 in the amounts of approximately $260,000, $1,700,000 and $610,000, respectively. The transactions with Lowe Enterprises have been ratified by our Audit Committee.

        Entities affiliated with GSO Capital Partners and J.H. Whitney Capital Partners, LLC were the primary investors in our February 2006 sale of approximately $235 million of our Class F and Class G convertible preferred stock. Our board members Lee D. Stern and James H. Fordyce are affiliated with GSO Capital and J.H. Whitney, respectively, and have been designated by such investors pursuant to their respective rights under our Restated Certificate of Incorporation as Class F and Class G convertible preferred stockholders to appoint representatives to our board of directors.

        We previously established a Senior Executive Equity Investment Plan, under which we encouraged our senior officers to hold AECOM stock by providing loans to fund the purchases of the stock. As of February 20, 2007, all SEEIP loans have been terminated and repaid. At September 30, 2006, there were SEEIP loans outstanding with in aggregate principal amount of approximately $29.7 million.

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PRINCIPAL AND SELLING STOCKHOLDERS

        The following table sets forth information regarding the beneficial ownership of our common stock as of January 31, 2007 with respect to:

        Unless otherwise indicated below, the address of each beneficial owner listed in the table is c/o AECOM Technology Corporation, 555 S. Flower Street, Suite 3700, Los Angeles, California 90071.

        Except as otherwise indicated in the footnotes to the table, we believe, based on the information provided to us, that the persons and entities named in the table below have sole voting and investment power with respect to the shares they beneficially own, subject to applicable community property laws.

 
   Number of Shares of Common Stock(1) Beneficially Owned Prior to the Offering
    
    
    
  
 
    
   Number of Shares Beneficially Owned After the Offering
  
 
   Number of Shares Offered
  
 
   Number
   Percentage
   Number
   Percentage
  
5% Securityholders                      
United States Trust Company, N.A.(2)
555 S. Flower Street
3700
Los Angeles, CA 90071		   22,495,129   30.20 % 4,885,858   17,609,271   19.49 %
Halifax EES Trustees International Limited(3)
P.O. Box 827, Queensway House, Hilgrove Street
St. Helier, Jersey JE4 OUB		   7,189,612   9.65 % 723,463   6,466,148   7.16 %
GSO Capital Partners LP(4)
280 Park Avenue
11th Floor East Tower
New York, NY 10017		   7,977,663   10.71 % 0   7,977,663   8.83 %
J.H Whitney VI, L.P.(5)
130 Main Street
New Canaan, CT 06901		   7,977,663   10.71 % 7,339,450   638,213   *  

Directors and Named Executive Officers
 
 
 
 
 
 
 
 
 
 
 
John M. Dionisio(6)   1,172,227   1.56 % —   1,172,227   1.29 %
Richard G. Newman(7)   3,676,179   4.85 % 163,108   3,513,071   3.83 %
Francis S.Y. Bong(8)   1,587,884   2.13 % —   1,587,884   1.75 %
H. Frederick Christie(9)   114,719   *   —   114,719   *  
James H. Fordyce(10)   0   0.00 % —   0   0.0 %
S. Malcolm Gillis(11)   74,762   *   —   74,762   *  
Linda Griego(12)   28,583   *   —   28,583   *  
Robert J. Lowe(13)   120,213   *   —   120,213   *  
William G. Ouchi(14)   95,000   *   —   95,000   *  
William P. Rutledge(15)   106,924   *   —   106,924   *  
Lee D. Stern   0   0.00 % —   0   0.00 %
James R. Royer(16)   962,973   1.29 % —   962,973   1.06 %
Michael S. Burke(17)   161,540   *   —   161,540   *  
Glenn R. Robson(18)   254,460   *   —   254,460   *  
All directors and executive officers as a group (15 persons)   9,883,533   12.76 % 163,108   9,720,425   10.41 %

Selling Stockholders(19)
 
9,493,606
 
12.75
%
2,295,100
 
5,313,144
 
5.88
%
(1)
The common stock holdings listed above includes our convertible preferred stock, Class F convertible preferred stock and Class G convertible preferred stock as converted to common stock.

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(2)
United States Trust Company, N.A. acts as trustee with respect to our Retirement & Savings Plan and our Stock Purchase Plan. The number of common shares listed above constitutes shares held as trustee under our Retirement & Savings Plan, which includes 56,533 preferred shares.

(3)
Constitutes shares held by AECOM Global Holdings, Ltd. for the benefit of certain non-U.S. employees who participate in our Global Stock Program where Halifax EES Trustees International acts as trustee with respect to our Global Stock Plan.

(4)
GSO Capital Partners LP is the investment manager for each of GSO Credit Opportunities Fund (Helios), L.P. ("GSO Helios"), GSO Special Situations Overseas Benefit Plan Fund Ltd. ("GSO Overseas Benefit"), GSO Special Situations Overseas Fund Ltd. ("GSO Overseas") and GSO Special Situations Fund LP ("GSO SS" and, together with GSO Helios, GSO Overseas Benefit and GSO Overseas, the "GSO Funds"). Each of GSO Helios (12,945.59504 shares), GSO Overseas Benefit (1,034.176356 shares), GSO Overseas (12,591.0779 shares) and GSO SS (13,429.1507 shares) are the holders of record of our Class F Preferred Stock. As investment manager of the GSO Funds, GSO Capital Partners LP is vested with investment discretion with respect to investments held by the GSO Funds. GSO LLC ("GSO General Partner") is the general partner of GSO Capital Partners LP, and in that capacity, directs the operations of GSO Capital Partners LP. Bennett J. Goodman ("Mr. Goodman"), J. Albert Smith III ("Mr. Smith") and Douglas I. Ostrover ("Mr. Ostrover" and together with Mr. Goodman and Mr. Smith, the "GSO Managing Members") are the managing members of the General Partner, and in that capacity, direct the General Partner's operations. Each of the GSO Funds, GSO Capital Partners LP, General Partner and the Managing Members (collectively, the "GSO Persons") may be deemed a beneficial owners of Class F Preferred Stock. However, the foregoing should not be deemed to constitute an admission that any of the GSO Persons are the beneficial owners of any of Class F Preferred Stock owned by the GSO Funds.

(5)
J.H. Whitney VI, L.P. is the beneficial owner of 40,000 shares of Class G convertible preferred stock. J.H. Whitney VI, L.P.'s general partner is J.H. Whitney Equity Partners VI, LLC. James H. Fordyce, Peter M. Castleman, Michael C. Salvator, Paul R. Vigano and Robert M. Williams, Jr. are the managing members of J.H. Whitney Equity Partners VI, LLC. Accordingly, they may be deemed to share beneficial ownership of the shares beneficially owned by J.H. Whitney VI, L.P., although each of them disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

(6)
Common stock includes 450,000 shares subject to options exercisable prior to April 1, 2007 and 274,018 common stock units held in our Stock Purchase Plan.

(7)
Common stock includes 1,300,000 shares subject to options exercisable prior to April 1, 2007, which includes 1,135,000 shares subject to options held in the R&C Newman Partnership LP. Common stock also includes 1,032,994 common stock units held in our Stock Purchase Plan and 69,651 shares held in the R&C Newman Partnership LP.

(8)
Common stock includes 200,000 shares subject to options exercisable prior to April 1, 2007 and 1,024,500 shares held by AECOM Global Holdings, Ltd. where Halifax ESS Trustees International acts as trustee.

(9)
Common stock includes 52,200 shares subject to options exercisable prior to April 1, 2007 and 49,519 common stock units held in our Stock Purchase Plan. Common stock also includes 13,000 shares held in the Christie Family Trust.

(10)
Securities owned by J.H. Whitney VI, L.P. (JHW VI). Mr. Fordyce is a managing member of J.H. Whitney Equity Partners VI, LLC, the general partner of JHW VI, and has an interest in a limited partner of JHW VI. Mr. Fordyce may be deemed to share voting and dispositive power with respect to such securities. Mr. Fordyce disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.

(11)
Common Stock includes 37,200 shares subject to options exercisable prior to April 1, 2007 and 32,803 common stock units held in our Stock Purchase Plan.

(12)
Common Stock includes 20,000 shares subject to options exercisable prior to April 1, 2007 and 8,583 common stock units held in our Stock Purchase Plan.

(13)
Common Stock includes 52,200 shares subject to options exercisable prior to April 1, 2007 and 55,013 common stock units held in our Stock Purchase Plan. Common stock also includes 13,000 shares held in the Lowe Family Trust.

(14)
Common Stock includes 36,000 shares subject to options exercisable prior to April 1, 2007 and 59,000 shares held in the WG Ouchi Consultants Pension Trust.

(15)
Common Stock includes 46,200 shares subject to options exercisable prior to April 1, 2007 and 55,156 common stock units held in our Stock Purchase Plan.

(16)
Common stock includes 230,000 shares subject to options exercisable prior to April 1, 2007 and 330,608 common stock units held in our Stock Purchase Plan.

(17)
Common stock includes 20,000 shares subject to options exercisable prior to April 1, 2007 and 53,481 common stock units held in our Stock Purchase Plan.

(18)
Common stock includes 140,000 shares subject to options exercisable prior to April 1, 2007 and 54,921 common stock units held in our Stock Purchase Plan.

(19)
Consists of 314 stockholders who each own less than 1% of the outstanding shares of Common Stock prior to the offering and of whom a substantial percentage are employees of the Company.

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DESCRIPTION OF CAPITAL STOCK

        Our certificate of incorporation authorizes us to issue 150,000,000 shares of Common Stock and 8,000,000 shares of preferred stock, or Preferred Stock. Our Board of Directors, without further approval of the stockholders, may establish the powers, preferences, rights, qualifications and limitations, including the dividend rights, dividend rates, conversion rights, conversion prices, voting rights and redemption rights, of any series of Preferred Stock and may authorize the issuance of any such series.

Common Stock

        As of December 31, 2006, we had 150,000,000 authorized shares of common stock, of which 55,614,334 shares were outstanding, including our common stock units. Holders of our common stock are entitled to one vote per share on all matters to be voted on by our stockholders. All shares of common stock have equal voting rights.

        Subject to the rights pertaining to any series of preferred stock, in the event of our liquidation, holders of our common stock are entitled to share ratably in our assets legally available for distribution after the payment of our debts. The shares of common stock have no preemptive, subscription, conversion or redemption rights.

        Subject to the rights of the holders of preferred stock, the holders of the common stock are entitled to receive dividends, when, as and if declared by our Board of Directors, from funds legally available for such dividend payments.

Convertible Preferred Stock

        The following is a summary of the material terms of the Convertible Preferred Stock.

        General.    There are 2,500,000 authorized shares of our Convertible Preferred Stock, with a par value and liquidation preference of $100 per share, of which 55,938 shares of our Convertible Preferred Stock were outstanding as of December 31, 2006.

        Dividends.    Holders of the Convertible Preferred Stock are entitled to receive dividends payable in additional shares of Convertible Preferred Stock quarterly at a rate determined by an independent appraiser. This rate is established at a level that the appraiser determines is necessary to ensure that the fair value of the Convertible Preferred Stock will be equal to its liquidation preference. In making this determination, the appraiser considers the creditworthiness of the Company and prevailing market interest rates (i.e., the return on 12-month U.S. Treasury Bills).

        Redemption.    After shares of Convertible Preferred Stock has been outstanding for at least three years, we may redeem such shares at a price equal to 102.5% of the liquidation preference of the shares, plus the payment of any accrued and unpaid dividends to the redemption date. After the Convertible Preferred Stock has been held at least one year, the holder of the shares may convert some or all of the shares to our Common Stock. In any event, at such time as a holder of Convertible Preferred Stock no longer meets the qualifications to be a holder of Employee Stock, the Convertible Preferred Stock held by such holder shall be repurchased by us.

        Liquidation Rights.    In the event of our voluntary or involuntary liquidation, dissolution or winding up, or a change in control, the holders of shares of Convertible Preferred Stock are entitled to receive out of our assets available for distribution to stockholders, on parity with holders of our Class C preferred stock, and before any distribution of assets is made to holders of our Common Stock or of any other shares of our stock ranking as to such a distribution junior to the shares of Convertible Preferred Stock, liquidating distributions in the amount of $100 per share plus accrued and unpaid dividends. After payment of such liquidating distributions, the holders of shares of Convertible

103


Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company.

        Voting Rights.    Except as otherwise required by applicable law, the holders of the Convertible Preferred Stock will be entitled to one vote per share on all matters to be voted upon by our common stockholders.

        If the equivalent of six quarterly dividends payable on the Convertible Preferred Stock are in arrears, the number of our directors will be increased by two and the holders of Convertible Preferred Stock, voting as a class with the holders of shares of any other series of preferred stock ranking on a parity with the Convertible Preferred Stock as to dividends and distribution of assets, will be entitled to elect two directors to fill such vacancies. Such right to elect two additional directors will continue until all dividends in arrears have been paid or declared and set apart for payment.

Class F and Class G Convertible Preferred Stock

        As of December 31, 2006, we had 94,000 shares of Class F and Class G convertible preferred stock authorized, all of which were outstanding. Upon the completion of this offering, all then-outstanding shares of our Class F and Class G convertible preferred stock will be converted into common stock at a conversion rate of approximately 199.4 shares of common stock for each share of Class F and Class G convertible preferred stock.

        Registration Rights.    The holders of the Class F and Class G convertible preferred stock have certain registration rights that may result in such holders being able to sell their shares of common stock issued upon conversion of the Class F or Class G convertible preferred stock in a registered offering after an initial public offering of our common stock before other holders of our common stock.

Class C Preferred Stock

        Our Class C preferred stock provides certain voting rights for holders of our common stock units and preferred stock units purchased under our nonqualified Stock Purchase Plan. As of December 31, 2006, we had 200 authorized shares of Class C preferred stock, no par value, authorized, of which 108.634 shares were issued to U.S. Trust Company, N.A., as the trustee of the AECOM Technology Corporation Supplemental Trust, which holds shares on behalf of our employee stockholders. Each share of Class C preferred stock is entitled to 100,000 votes on all matters to be voted on by our holders of common stock, has no right to dividends and has a liquidation and redemption value of $1.00 per share, which will be paid on parity with our Convertible Preferred Stock before any assets are distributed to holders of our common stock upon our voluntary or involuntary liquidation. U.S. Trust Company has sole discretion as to how it votes each share of Class C preferred stock. We may redeem such shares of Class C preferred stock at our election, in whole or in part, at a redemption price equal to the liquidation preference of such shares. The Class C preferred stock is not convertible into common stock.

Class E Preferred Stock

        As of December 31, 2006, we had 20 shares of Class E preferred stock, no par value, authorized to be issued, of which 5.165 shares were issued to Computershare Trust Company of Canada in its capacity as trustee for UMA Group, Ltd. and UMA RRSPCO Ltd. The shares of Class E preferred stock were issued in connection with our acquisition of the UMA group of companies in September 2004 and provide certain voting rights to the former UMA shareholders. Each share of Class E preferred stock is entitled to 100,000 votes only on certain fundamental matters affecting the Company, such as change of control.

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        The Class E preferred stock has no right to dividends and has a liquidation and redemption value of $1.00 per share, which will be paid before any assets are distributed to holders of our common stock upon our voluntary or involuntary liquidation. We may redeem the Class E preferred stock at any time by paying the redemption value of $1.00 per share. The Class E stock is not convertible into common stock.

Class Y Shares of UMA Group, Ltd. and Class YY Shares of UMA RRSPCO Ltd.

        The Class Y and Class YY shares were issued to former shareholders of the UMA group of companies in connection with our acquisition of the UMA group of companies in September 2004. As of December 31, 2006, there were 417,992 and 98,476 shares outstanding of Class Y and YY shares, respectively.

        The Class Y and YY shares are not entitled to vote with the common stock of AECOM. AECOM, however, has issued to Computershare Trust Company of Canada one share of Class E preferred stock for each 100,000 shares of Class Y or Class YY stock. As described above, the Class E preferred stock indirectly provides each holder of Class Y and YY shares voting rights upon certain fundamental events of AECOM.

        The Class Y and YY shares will be entitled to dividends when and if dividends are declared on the common stock of AECOM and in the same amount as the dividends declared on the common stock of AECOM, subject to the rights of AECOM's preferred stock currently outstanding or that may hereafter be issued.

Common Stock Units and Convertible Stock Units

        We have a Non-Qualified Stock Purchase Plan (SPP) pursuant to which our highly compensated employees (those earning more than approximately $95,000 per year in fiscal 2006) may defer compensation that they might otherwise have contributed to our Retirement and Savings Plan but are disqualified under applicable law from doing so. As a result of these deferrals, employees are credited with common stock units on a tax-deferred basis. The common stock units may only be redeemed for common stock. The holders of common stock units are not entitled to vote but are credited with any dividends that are declared on the common stock. In the event of our liquidation, holders of common stock units will be entitled to the same rights as holders of our common stock.

        Our highly compensated employees who receive common stock units through our SPP may elect to exchange their common stock units for convertible preferred stock units. The holders of convertible preferred stock units are not entitled to vote. The convertible preferred stock units may only be redeemed for shares of our convertible preferred stock.

Delaware Law

        We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date on which the person becomes an interested stockholder, unless (i) prior to the time that such stockholder becomes an interested stockholder, the Board of Directors approves such transaction or business combination, (ii) the stockholder acquires more than 85% of the outstanding voting stock of the corporation (excluding shares held by directors who are officers or held in employee stock plans) upon consummation of such transaction, or (iii) at or subsequent to the time such stockholder becomes an interested stockholder, the business combination is approved by the Board of Directors and by two-thirds of the outstanding voting stock of the corporation (excluding shares held by the interested stockholder) at a meeting of stockholders (and not by written consent). A "business combination" includes a merger, asset sale or other transaction resulting in a financial benefit to such interested

105


stockholder. For purposes of Section 203, "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years prior, did own) 15% or more of the corporation's voting stock.

Certificate of Incorporation and Bylaws

        Various provisions of our Certificate of Incorporation and Bylaws, which are summarized in the following paragraphs, may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.

        No Cumulative Voting.    The Delaware General Corporation Law provides that stockholders are denied the right to cumulate votes in the election of directors unless our Certificate of Incorporation provides otherwise. Our Certificate of Incorporation does not expressly address cumulative voting.

        No Stockholder Action by Written Consent; Calling of Special Meetings of Stockholders. Our Certificate of Incorporation prohibits stockholder action by written consent. It also provides that special meetings of our stockholders may be called only by the Board of Directors or the chief executive officer.

        Advance Notice Requirements for Stockholder Proposals and Director Nominations.    Our Bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary. To be timely, a stockholder's notice must be delivered or mailed and received at our principal executive offices not less than 60 nor more than 90 days prior to the meeting. Our Bylaws also specify requirements as to the form and content of a stockholder's notice. These provisions may impede stockholders' ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.

        Classified Board of Directors.    Our Certificate of Incorporation divides our board of directors into three classes of directors who are elected for three-year terms. Therefore, the full board of directors is not subject to re-election at each annual meeting of our stockholders.

        Limitations on Liability and Indemnification of Officers and Directors.    The Delaware General Corporation Law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties. Our Certificate of Incorporation includes a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director, except for liability:

        Our Bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by the Delaware General Corporation Law. We are also expressly authorized to carry directors' and officers' insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and officers.

        The limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their

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fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders.

        There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

        Authorized But Unissued Shares.    Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without the approval of holders of common stock. We may use these additional shares for a variety of corporate purposes, including future offerings to raise additional capital, corporate acquisitions and employee benefit plans.

        Supermajority Provisions.    Under our Certificate of Incorporation, we must receive the consent of the holders of at least two-thirds of the outstanding shares of our capital stock, voting together as a single class, to approve a "business combination." A business combination is defined as:

Transfer Agent and Registrar

        The transfer agent and registrar for our common stock is Computershare Investor Services.

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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

        The following is a general discussion of the material United States federal income tax consequences of the ownership and disposition of our common stock to a non-United States holder. This discussion assumes that non-United States holders will hold our common stock issued pursuant to the offering as a capital asset (generally, property held for investment). This discussion does not address all aspects of United States federal income taxation that may be relevant in light of a non-United States holder's special tax status or special tax situations. For example, United States expatriates, life insurance companies, tax-exempt organizations, dealers in securities or currency, banks or other financial institutions, pass-through entities, trusts, estates, and investors that hold common stock as part of a hedge, straddle or conversion transaction are among those categories of potential investors that are subject to special rules not covered in this discussion. In addition, this discussion does not address tax consequences to a holder of the use of a functional currency other than the United States dollar. This discussion does not address any tax consequences arising under the laws of any state, local or non-United States taxing jurisdiction or any taxes other than income taxes. Furthermore, the following discussion is based on current provisions of the Internal Revenue Code of 1986, as amended, legislative history and Treasury Regulations and administrative and judicial interpretations thereof, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect. Accordingly, we urge each non-United States Holder to consult a tax advisor regarding the United States federal, state, local and non-United States income and other tax consequences of acquiring, holding and disposing of shares of our common stock.

        For the purpose of this discussion, a non-United States holder is any individual, corporation, estate or trust that is a beneficial holder of our common stock and that for United States federal income tax purposes is not a United States person. For purposes of this discussion, the term United States person means:

        If a partnership (or an entity treated as a partnership for United States federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership. Accordingly, we urge partnerships which hold our common stock and partners in such partnerships to consult their tax advisors.

        Investors considering the purchase of common stock should consult their tax advisors regarding the application of the U.S. federal income tax laws to their particular situations and the consequences of U.S. federal estate and gift tax laws, foreign, state and local laws, and tax treaties.

        Distributions on our common stock, if any, generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and will first be applied against and reduce a

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holder's adjusted tax basis in the common stock, but not below zero, and then the excess, if any, will be treated as gain from the sale of the common stock.

        Amounts treated as dividends paid to a non-United States holder of common stock generally will be subject to United States withholding at a rate of 30% of the gross amount of the dividend, unless either: (a) an applicable income tax treaty reduces or eliminates such tax, and the non-United States holder properly claims the benefit of that treaty by providing a valid IRS Form W-8BEN (or suitable successor or substitute form) establishing qualification for the reduced rate, or (b) the dividend is effectively connected with the non-United States holder's conduct of a trade or business in the United States and the non-United States holder provides an appropriate statement to that effect on a valid IRS Form W-8ECI (or suitable successor form).

        Dividends received by a non-United States holder that are effectively connected with a United States trade or business conducted by the non-United States holder are generally taxed at the same graduated rates applicable to United States persons, net of certain deductions and credits, subject to an applicable income tax treaty providing otherwise. In that case, the 30% withholding tax described above will not apply, provided the appropriate statement is provided to us. If a non-United States holder is eligible for the benefits of a tax treaty between the United States and its country of residence, any dividend income that is effectively connected with a United States trade or business will be subject to United States federal income tax in the manner specified by the treaty and generally will only be subject to such tax if such income is attributable to a permanent establishment (or a fixed base in the case of an individual) maintained by the non-United States holder in the United States and the non-United States holder claims the benefit of the treaty by properly submitting an IRS Form W-8BEN. In addition, dividends received by a corporate non-United States holder that are effectively connected with a United States trade or business of the corporate non-United States holder may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable tax treaty.

        A non-United States holder may obtain a refund from the IRS to the extent that the amounts withheld as described above exceed that holder's tax liability if an appropriate claim for refund is timely filed with the IRS.

        If a non-United States holder holds our common stock through a foreign partnership or other passthrough entity or a foreign intermediary, the foreign partnership or passthrough entity or foreign intermediary may also be required to comply with additional certification requirements.

        A non-United States holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

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        If the first of these exceptions applies, the non-United States holder generally will be subject to tax at a rate of 30% on the amount by which the United States-source capital gains exceed capital losses allocable to United States sources.

        If the second exception applies, generally the non-United States holder will be required to pay United States federal income tax on the net gain derived from the sale in the same manner as a United States person. If a non-United States Holder is eligible for the benefits of a tax treaty between the United States and its country of residence, any such gain will be subject to United States federal income tax in the manner specified by the treaty and generally will only be subject to such tax if such gain is attributable to a permanent establishment (or a fixed base in the case of an individual) maintained by the non-United States holder in the United States and the non-United States holder claims the benefit of the treaty by properly submitting an IRS Form W-8BEN (or suitable successor form). Additionally, non-United States holders that are treated for United States federal income tax purposes as corporations and that are engaged in a trade or business or have a permanent establishment in the United States could be subject to a branch profits tax on such income at a 30% rate or a lower rate if so specified by an applicable income tax treaty.

        Generally, we must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. Subject to certain exceptions, a similar report is sent to the holder. Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax authorities in the recipient's country of residence.

        Payments of dividends or of proceeds on the disposition of stock made to a non-United States holder may be subject to backup withholding unless the non-United States holder establishes an exemption, for example, by properly certifying its non-United States status on a valid IRS Form W-8BEN or another appropriate version of IRS Form W-8. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a United States person.

        Additional information reporting and backup withholding may apply in the case of dispositions of our common stock by non-United States brokers effected through certain brokers or a United States office of a broker. The backup withholding rate currently is 28%.

        Backup withholding is not an additional tax. Rather, the United States income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is timely furnished to the IRS.

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SHARES ELIGIBLE FOR FUTURE SALE

        Upon the consummation of the offering, we will have approximately 91,416,946 shares of common stock outstanding (assuming no exercise of the underwriters' over-allotment option). Of these shares, approximately 38,552,426 shares will be available for immediate resale in the public market, including all of the shares in this offering, and approximately 6,617,073 shares will be available for resale 90 days following completion of this offering, except those held by our "affiliates." Of the remaining shares outstanding, approximately 46,247,447 shares are subject to lock-up agreements restricting the sale of those shares for 180 days from the date of this prospectus. All of the shares of common stock sold in the offering will be freely tradable under the Securities Act. Upon the expiration of these lock-up agreements, all of the shares of common stock owned by our directors, executive officers, and certain of our stockholders, will become eligible for sale, subject to compliance with Rule 144 of the Securities Act as described below.

        In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned Restricted Shares for at least one year, will be entitled to sell in any three-month period a number of shares that does not exceed the greater of: (i) 1% of the number of shares of Common Stock then outstanding (91,416,946 shares immediately after the offering or 96,689,446 if the underwriters' over-allotment is exercised in full) or (ii) the average weekly trading volume of our common stock on the NYSE during the four calendar weeks immediately preceding the date on which the notice of sale is filed with the Securities and Exchange Commission. Approximately 50,368,002 shares of the Restricted Shares have been held for over one year. Sales pursuant to Rule 144 are subject to requirements relating to manner of sale, notice and availability of current public information about us. A person (or persons whose shares are aggregated) who is not deemed to be an affiliate of ours preceding the sale, and who has beneficially owned Restricted Shares for at least two years is entitled to sell such shares pursuant to Rule 144(k) without regard to the limitations and requirements described above.

        We and our directors, executive officers, selling stockholders and certain other stockholders have agreed with the underwriters not to directly or indirectly, offer to sell, contract to sell, sell or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for common stock without the prior written consent of Morgan Stanley & Co. Incorporated (and with respect to us and certain of our stockholders, without the further consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC) until                         , 200    .

        In addition, employees of ours who hold 31,228,319 outstanding shares of common stock and options to acquire 9,069,612 additional shares of common stock are entitled to rely on the resale provisions of Rule 701, which permit non-affiliates to sell their Rule 701 shares without having to comply with the public information, holding period, volume limitation or notice provisions of Rule 144 and permit affiliates to sell Rule 701 shares without having to comply with Rule 144's holding period restrictions, in each case commencing 90 days after the date of completion of this offering.

        We have filed a registration statement on Form S-8 under the Securities Act to register shares of common stock reserved for issuance under our Stock Incentive Plans, thus permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act. As of March 31, 2007, there were outstanding options to purchase 9,069,612 shares of our common stock under our Stock Incentive Plans. An additional 25,637,100 shares are reserved for issuance under our Stock Incentive Plans.

        We are unable to estimate the number of shares that may be sold in the future by the existing stockholders or the effect, if any, that sales of shares by such stockholders will have on the market price of our common stock. Sales of substantial amounts of common stock by such stockholders could adversely affect the market price of our common stock.

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UNDERWRITERS

        Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC are acting as representatives, have severally agreed to purchase, and we and the selling stockholders have agreed to sell to them, severally, the number of shares indicated below:

Name
   Number of Shares
Morgan Stanley & Co. Incorporated    
Merrill Lynch, Pierce, Fenner & Smith
                      Incorporated		    
UBS Securities LLC    
Goldman, Sachs & Co.    
Credit Suisse Securities (USA) LLC    
D.A. Davidson & Co.    
   
                      Total:    35,150,000
   

        The underwriters are collectively referred to as the "underwriters" and the representative is referred to as the "representative." The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters' over-allotment option described below.

        The underwriters initially propose to offer part of the shares of common stock directly to the public at the offering price listed on the cover page of this prospectus and part to certain dealers. After the initial offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the representative.

        We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to 5,272,500 additional shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed next to the underwriter's name in the preceding table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table.

        The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us and the selling stockholders. These amounts are

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shown assuming both no exercise and full exercise of the underwriters' option to purchase up to an additional                  shares of common stock.

 
   Total
 
   Per
Share
   No Exercise
   Full Exercise
Public offering price   $     $     $  
Underwriting discounts and commissions to be paid by:                  
  Us   $     $     $  
  The selling stockholders   $     $     $  
Proceeds, before expenses, to us   $     $     $  
Proceeds, before expenses, to selling stockholders   $     $     $  

        The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately $                  . This amount includes the registration and other offering expenses, other than underwriting discounts and commissions, of the selling stockholders.

        The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total number of shares of common stock offered by them.

        We are applying to have our common stock traded on the New York Stock Exchange under the symbol "ACM."

        We and all directors, officers and selling stockholders and certain of our other stockholders who hold securities under one or more of our stock plans have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated (and with respect to us and certain of our stockholders, without the further consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC) on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus:

whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise. In addition, we and each such person agrees that, without the prior written consent of Morgan Stanley & Co. Incorporated (and with respect to us and certain of our stockholders, without the further consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC) on behalf of the underwriters, it will not, during the period ending 180 days after the date of this prospectus, make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock.

        The restrictions described in the immediately preceding paragraph do not apply to:

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        The 180 day restricted period described in the preceding paragraph will be extended if:

in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18 day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless such extension is waived, in writing, by Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC on behalf of the underwriters.

        In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the over-allotment option. The underwriters can close out a covered short sale by exercising the over-allotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the over-allotment option. The underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, shares of common stock in the open market to stabilize the price of the common stock. These activities may raise or maintain the market price of the common stock above independent market levels or prevent or retard a decline in the market price of the common stock. The underwriters are not required to engage in these activities and may end any of these activities at any time.

        We, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

        A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representative may agree to allocate a number of shares of common stock to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters that may make Internet distributions on the same basis as other allocations.

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European Economic Area

        In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive, each Manager has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Member State it has not made and will not make an offer of Shares to the public in that Member State, except that it may, with effect from and including such date, make an offer of Shares to the public in that Member State:


        For the purposes of the above, the expression an "offer of Shares to the public" in relation to any Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Shares to be offered so as to enable an investor to decide to purchase or subscribe the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in that Member State.

United Kingdom

        Each Manager has represented and agreed that it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of the Shares in circumstances in which Section 21(1) of such Act does not apply to us and it has complied and will comply with all applicable provisions of such Act with respect to anything done by it in relation to any Shares in, from or otherwise involving the United Kingdom.

Pricing of the Offering

        Prior to this offering, there has been no public market for our common stock. The initial public offering price was determined by negotiations between us and the representative. Among the factors considered in determining the initial public offering price were our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours.

Other Relationships

        Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us. They have received customary fees and commissions for these transactions.

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LEGAL MATTERS

        The validity of the shares of common stock offered hereby will be passed upon for us by Gibson, Dunn & Crutcher LLP, Los Angeles, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Latham & Watkins LLP, Los Angeles, California.


EXPERTS

        The consolidated financial statements of AECOM Technology Corporation at September 30, 2006 and 2005, and for the three year period ended September 30, 2006, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.


WHERE YOU CAN FIND ADDITIONAL INFORMATION

        We have filed with the Securities and Exchange Commission (the "Commission"), Washington, D.C. 20549, a registration statement on Form S-1 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus does not contain all of the information set forth in the registration statement and the exhibits thereto. Certain items are omitted in accordance with the rules and regulations of the Commission. For further information with respect to us and the common stock offered by this prospectus, please refer to the registration statement and the exhibits filed herewith or incorporated by reference as a part hereof. Statements contained in this prospectus as to the contents of any contract or other document filed herewith or incorporated by reference as an exhibit to the registration statement is qualified in all respects by such reference to such exhibit.

        The registration statement, including exhibits thereto, may be inspected without charge at the public reference facilities maintained by the Commission in Room 1024, 100 F. Street, N.E., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such office after payment of fees prescribed by the Commission. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference facilities. The Commission maintains a website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. We will become subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and will file periodic reports, proxy statements and other information with the Commission.

        We intend to issue to our stockholders annual reports, which will include audited financial statements and a report of our independent auditors with respect to the examination of such financial statements. In addition, we will issue such other interim reports as we deem appropriate.

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AECOM Technology Corporation

Index to Consolidated Financial Statements

September 30, 2006

Audited Annual Financial Statements    

Report of Independent Registered Public Accounting Firm
 
F-2

Consolidated Balance Sheets at September 30, 2005 and 2006
 
F-3

Consolidated Statements of Income for the Years Ended September 30, 2004, 2005 and 2006
 
F-4

Consolidated Statements of Comprehensive Income for the Years Ended September 30, 2004, 2005 and 2006
 
F-5

Consolidated Statements of Changes in Stockholders' Deficit for the Years Ended September 30, 2004, 2005 and 2006
 
F-6

Consolidated Statements of Cash Flows for the Years Ended September 30, 2004, 2005 and 2006
 
F-7

Notes to Consolidated Financial Statements
 
F-8

Unaudited Interim Financial Statements
 
 

Condensed Consolidated Balance Sheets as of September 30, 2006 and December 31, 2006
 
F-54

Condensed Consolidated Statements of Income for the Three Months Ended December 31, 2005 and 2006
 
F-55

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended December 31, 2005 and 2006
 
F-56

Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2005 and 2006
 
F-57

Notes to Condensed Consolidated Financial Statements
 
F-58

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
AECOM Technology Corporation

        We have audited the accompanying consolidated balance sheets of AECOM Technology Corporation (the "Company") as of September 30, 2006 and 2005, and the related consolidated statements of income, comprehensive income, shareholders' deficit, and cash flows for each of the three years in the period ended September 30, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of AECOM Technology Corporation at September 30, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 2006, in conformity with U.S. generally accepted accounting principles.

Los Angeles, California
March 5, 2007, except for paragraph two of Note 24
as to which the date is            , 2007

        The foregoing report is in the form that will be signed upon the effective date of the stock split described in paragraph two of Note 24 to the consolidated financial statements.

/s/ Ernst & Young LLP
Los Angeles, California
April 20, 2007

F-2


AECOM Technology Corporation

Consolidated Balance Sheets

(in thousands, except share data)

 
   September 30,
2005
   September 30,
2006
  
ASSETS              
CURRENT ASSETS:              
  Cash and cash equivalents   $ 27,424   $ 118,427  
  Cash in consolidated joint ventures     26,878     9,393  
  Short-term investments     50     50  
   
 
 
  Total cash and cash equivalents     54,352     127,870  
 
Accounts receivable—net
 
 
703,837
 
 
913,178
 
  Prepaid expenses and other current assets     48,541     52,827  
  Deferred tax assets—net     15,531     —  
   
 
 
    TOTAL CURRENT ASSETS     822,261     1,093,875  
   
 
 
PROPERTY AND EQUIPMENT:              
  Equipment, furniture and fixtures     84,208     85,201  
  Leasehold improvements     23,685     31,539  
   
 
 
    Total     107,893     116,740  
  Accumulated depreciation and amortization     (28,365 )   (26,417 )
   
 
 
    PROPERTY AND EQUIPMENT—NET     79,528     90,323  
   
 
 
DEFERRED TAX ASSETS—NET     36,459     98,449  
DEFERRED LOAN COSTS—NET     1,478     1,444  
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES     19,230     19,943  
GOODWILL     404,063     466,508  
INTANGIBLE AND OTHER ASSETS—NET     32,216     18,168  
OTHER NON-CURRENT ASSETS     29,689     37,064  
   
 
 
TOTAL ASSETS   $ 1,424,924   $ 1,825,774  
   
 
 

LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
 
 
 
 
 
CURRENT LIABILITIES:              
  Short-term debt   $ 4,165   $ 2,716  
  Accounts payable and other current liabilities     179,810     265,192  
  Accrued expenses     273,856     365,548  
  Billings in excess of costs on uncompleted contracts     122,825     143,283  
  Income taxes payable     11,373     35,646  
  Deferred tax liability—net     —     12,824  
  Share purchase liability     43,215     55,394  
  Current portion of long-term obligations     16,374     11,949  
   
 
 
    TOTAL CURRENT LIABILITIES     651,618     892,552  

OTHER LONG-TERM LIABILITIES
 
 
126,243
 
 
112,970
 
LONG-TERM OBLIGATIONS     216,183     122,790  

COMMITMENTS AND CONTINGENCIES (Notes 11, 18 and 22)
 
 
 
 
 
 
 

MINORITY INTEREST
 
 
9,724
 
 
18,701
 
REDEEMABLE COMMON AND PREFERRED STOCK AND STOCK UNITS     622,140     771,207  
NOTES RECEIVABLE FROM STOCKHOLDERS     (36,103 )   (36,552 )
REDEEMABLE PREFERRED STOCK, Class D—authorized, 120,000, issued and outstanding, 75,000 and 0 as of September 30, 2005 and September 30, 2006, respectively     75,000     —  
REDEEMABLE PREFERRED STOCK, Class F—authorized, 200,000, issued and outstanding, 0 and 47,000 as of September 30, 2005 and September 30, 2006, respectively, $2,500 liquidation preference value     —     117,500  
REDEEMABLE PREFERRED STOCK, Class G—authorized, 200,000, issued and outstanding, 0 and 47,000 as of September 30, 2005 and September 30, 2006, respectively, $2,500 liquidation preference value     —     117,500  

STOCKHOLDERS' DEFICIT:
 
 
 
 
 
 
 
  Stock warrants issued with Class D convertible preferred stock     1,605     —  
  Additional paid-in capital     (176,089 )   (254,225 )
  Accumulated other comprehensive loss     (65,397 )   (36,669 )
  Retained earnings     —     —  
   
 
 
TOTAL STOCKHOLDERS' DEFICIT     (239,881 )   (290,894 )
   
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $ 1,424,924   $ 1,825,774  
   
 
 

See accompanying Notes to Consolidated Financial Statements.

F-3


AECOM Technology Corporation

Consolidated Statements of Income

(in thousands, except per share data)

 
   Fiscal Year Ended
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
Revenue   $ 2,011,975   $ 2,395,340   $ 3,421,492

Cost of revenue
 
 
1,443,419
 
 
1,717,863
 
 
2,515,684
   
 
 
  Gross profit     568,556     677,477     905,808

Equity in earnings of joint ventures
 
 
2,517
 
 
2,352
 
 
6,554
General and administrative expenses     484,446     581,529     808,953
   
 
 
  Income from operations     86,627     98,300     103,409
   
 
 
Minority interest in share of earnings     3,239     8,453     13,924
Interest expense—net     6,968     7,054     10,576
   
 
 
  Income before income tax expense     76,420     82,793     78,909

Income tax expense
 
 
25,984
 
 
28,979
 
 
25,223
   
 
 
Net income   $ 50,436   $ 53,814   $ 53,686
   
 
 
Net income allocation:                  
  Preferred stock dividend   $ 5,443   $ 5,506   $ 2,205
  Net income available for common stockholders     44,993     48,308     51,481
   
 
 
  Net income   $ 50,436   $ 53,814   $ 53,686
   
 
 
Net income per share:                  
  Basic   $ 0.86   $ 0.93   $ 0.94
   
 
 
  Diluted   $ 0.78   $ 0.84   $ 0.74
   
 
 
Weighted average shares outstanding:                  
  Basic     52,600     51,880     54,856
  Diluted     64,254     63,978     72,658

See accompanying Notes to Consolidated Financial Statements.

F-4


AECOM Technology Corporation

Consolidated Statements of Comprehensive Income

(in thousands)

 
   Fiscal Year Ended
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
Net income   $ 50,436   $ 53,814   $ 53,686
   
 
 
Other comprehensive income (loss):                  
Foreign currency translation adjustments     2,183     (7,308 )   11,236
Minimum pension liability adjustments     5,841     (26,356 )   17,492
   
 
 
Other comprehensive income (loss)     8,024     (33,664 )   28,728
   
 
 
Comprehensive income   $ 58,460   $ 20,150   $ 82,414
   
 
 

See accompanying Notes to Consolidated Financial Statements.

F-5


AECOM Technology Corporation

Consolidated Statements of Changes in Stockholders' Deficit

(in thousands)

 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
STOCK WARRANTS:                    
Balance at the beginning of the year   $ 1,605   $ 1,605   $ 1,605  
Liquidation of Class D preferred stock     —     —     (1,605 )
   
 
 
 
Balance at the end of the year     1,605     1,605     —  
   
 
 
 
ADDITIONAL PAID-IN CAPITAL:                    
Balance at the beginning of the year     (142,877 )   (129,260 )   (176,089 )
Tax benefit of exercise of non-qualified stock options     2,893     2,853     3,479  
Adjustment of Class D preferred stock issuance costs     —     —     2,100  
Redemption of Class D preferred stock     —     —     (41,486 )
Issuance costs of Class F and Class G preferred stock     —     —     (2,880 )
(Increase) decrease in carrying value of redeemable common and preferred stock and stock units     10,724     (49,682 )   (39,349 )
   
 
 
 
Balance at the end of the year     (129,260 )   (176,089 )   (254,225 )
   
 
 
 
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME:                    
Balance at the beginning of the year     (39,757 )   (31,733 )   (65,397 )
Foreign currency translation adjustments     2,183     (7,308 )   11,236  
Defined benefit minimum pension liability adjustment     5,841     (26,356 )   17,492  
   
 
 
 
Balance at the end of the year     (31,733 )   (65,397 )   (36,669 )
   
 
 
 
RETAINED EARNINGS:                    
Balance at the beginning of the year     —     —     —  
Net income     50,436     53,814     53,686  
Tax benefit related to appreciation in value under stock purchase plan     5,258     16,427     14,807  
Paid-in-kind dividend on convertible preferred stock and preferred stock units     (193 )   (256 )   (305 )
Dividend on Class D preferred stock     (5,250 )   (5,250 )   (1,900 )
(Increase) decrease in carrying value of redeemable common and preferred stock and stock units     (50,251 )   (64,735 )   (66,288 )
   
 
 
 
Balance at the end of the year     —     —     —  
   
 
 
 
Total Stockholders' Deficit   $ (159,388 ) $ (239,881 ) $ (290,894 )
   
 
 
 

See accompanying Notes to Consolidated Financial Statements.

F-6


AECOM Technology Corporation

Consolidated Statements of Cash Flows

(in thousands)

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
CASH FLOWS FROM OPERATING ACTIVITIES:                    

Net income
 
$
50,436
 
$
53,814
 
$
53,686
 
Adjustments to reconcile net income to net cash provided by operating activities:                    
  Depreciation and amortization     12,918     19,928     39,830  
  Equity in earnings of unconsolidated joint ventures     (2,517 )   (2,352 )   (6,554 )
  Stock match     1,811     3,214     14,779  
  Write-off of Class D preferred stock issuance costs     —     —     2,100  
  Interest income on notes from stockholders     (1,623 )   (2,008 )   (2,111 )
  Deferred income tax expense (benefit)     6,774     13,093     (12,136 )
  Gain on termination of interest rate hedge     —     —     (1,139 )

Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
 
 
 
 
 
 
 
  Accounts receivable     12,679     (72,407 )   (135,418 )
  Prepaid expenses and other assets     (13,919 )   (15,418 )   (12,845 )
  Distribution of earnings from unconsolidated affiliates     1,734     364     6,867  
  Accounts payable     (13,507 )   18,757     47,433  
  Accrued expenses     1,977     35,593     74,550  
  Billings in excess of costs on uncompleted contracts     (1,081 )   24,782     14,525  
  Other liabilities     10,029     34,545     (16,060 )
  Income taxes receivable/payable     11,372     (30,036 )   29,822  
  Change in deferred foreign currency translation adjustment     (5,350 )   (8,926 )   6,445  
  Change in defined benefit minimum pension liability adjustment     5,841     (26,356 )   17,492  
   
 
 
 
    Net cash provided by operating activities     77,574     46,587     121,266  
   
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:                    
  Payments for business acquisitions, net of cash acquired     (14,467 )   (158,894 )   (53,296 )
  (Payments to) proceeds from investments, net     (10,515 )   60,538     —  
  Deferred income tax on gain from the sale of a building     —     —     (6,494 )
  Net investment in unconsolidated affiliates     (1,023 )   (8,249 )   (1,026 )
  Payments for capital expenditures     (18,926 )   (31,175 )   (32,300 )
  Proceeds on sale of property and equipment     603     785     21,301  
   
 
 
 
    Net cash used in investing activities     (44,328 )   (136,995 )   (71,815 )
   
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:                    
  Proceeds from borrowings under credit agreements     —     130,000     342,161  
  Repayments of borrowings under credit and senior note agreements     (24,482 )   (9,106 )   (442,013 )
  Proceeds from issuance of common stock and preferred stock, net of notes receivable     19,938     13,986     51,070  
  Proceeds from issuance of stock upon exercise of stock options     3,908     4,914     5,754  
  Proceeds from issuance of common and preferred stock units     6,479     23,071     11,108  
  Payments to repurchase of former employees' common stock and common stock units     (44,373 )   (70,913 )   (58,560 )
  Payments to redeem stockholders' notes issued in acquisitions     (1,002 )   (2,625 )   (595 )
  Proceeds from issuance of convertible preferred stock     —     —     235,000  
  Payments of issuance costs of convertible preferred stock     —     —     (2,880 )
  Payments to redeem preferred stock     —     —     (116,486 )
  Proceeds from terminating interest rate hedge     —     —     1,139  
  Payments of dividends on convertible preferred stock     (5,250 )   (5,250 )   (1,900 )
   
 
 
 
    Net cash (used in) provided by financing activities     (44,782 )   84,077     23,798  
   
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH     2,318     196     269  

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
 
 
(9,218
)
 
(6,135
)
 
73,518
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR     69,705     60,487     54,352  
   
 
 
 
CASH AND CASH EQUIVALENTS AT END OF YEAR   $ 60,487   $ 54,352   $ 127,870  
   
 
 
 
SUPPLEMENTAL CASH FLOW INFORMATION:                    
  Retirement of fully depreciated equipment (non-cash)   $ 27,012   $ 11,554   $ 8,122  
   
 
 
 
  Interest paid   $ 9,192   $ 8,788   $ 14,584  
   
 
 
 
  Income taxes paid, net of refunds received   $ 16,142   $ 20,182   $ 16,366  
   
 
 
 

See accompanying Notes to Consolidated Financial Statements.

F-7


AECOM TECHNOLOGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

        Organization—AECOM Technology Corporation, or the Company, provides professional technical services to the United States government, state, local and non-U.S. governments and agencies and commercial customers. These services encompass a variety of technical disciplines, including consulting, planning, architecture, engineering, construction management, project management, asset management, environmental services and design-build services. These services are applied to a number of areas and industries, including transportation infrastructure; research, testing and defense facilities; water, wastewater and other environmental programs; land development; security and communication systems; institutional, mining, industrial and commercial and energy-related facilities. The Company also provides operations and maintenance services to governmental agencies throughout the United States and abroad.

        Fiscal Year—The Company reports results of operations based on 52 or 53-week periods ending on the Friday nearest September 30. For clarity of presentation, all periods are presented as if the year ended on September 30. Fiscal years 2004, 2005 and 2006 contained 53, 52 and 52 weeks, respectively and ended on October 1, September 30 and September 29, respectively.

        Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The more significant estimates affecting amounts reported in the consolidated financial statements relate to revenue under long-term contracts and self-insurance accruals. Actual results could differ from those estimates.

        Principles of Consolidation and Presentation—The consolidated financial statements include the accounts of all subsidiaries and material joint ventures in which the Company has control or is the primary beneficiary. All inter-company accounts have been eliminated in consolidation.

        Investments in Unconsolidated Joint Ventures—The Company has non-controlling operational interests in joint ventures accounted for under the equity method. Services performed by the Company and billed to joint ventures with respect to work done by the Company for third-party customers are recorded as revenue of the Company in the period in which such services are rendered. In certain joint ventures, a fee is added to the respective billings from the Company and the other joint venture partners on the amounts billed to the third- party customers. These fees result in earnings to the joint venture and are split with each of the joint venture partners and paid to the joint venture partners upon collection from the third-party customer. The Company records its allocated share of these fees as equity in earnings of joint ventures.

        Variable Interest Entities—The Financial Accounting Standards Board (FASB) Financial Interpretation No. 46 (revised December 2003) "Consolidation of Variable Interest Entities," (FIN 46R) requires the primary beneficiary of a variable interest entity (VIE) among other things, to consolidate into its financial statements the financial results of the VIE and to make certain disclosures regarding the VIEs (unless the primary beneficiary also holds a majority voting interest). At September 30, 2006, the total assets and liabilities of VIEs where the Company was the primary beneficiary were

F-8


$34.0 million and $22.8 million, respectively, as compared to total assets of $88.7 million and total liabilities of $69.9 million at September 30, 2005.

        Revenue Recognition and Costs—In the course of providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its clients. These costs are passed through to clients and are included in the Company's revenue when it is the Company's responsibility to procure or manage such costs. Because subcontractor services and other direct costs can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends.

        The Company's contract revenue is determined using the percentage-of-completion method based generally on the ratio of direct labor dollars incurred to estimated total direct labor dollars at the completion of the contract. Recognition of revenue and profit under this revenue recognition method is dependent upon the accuracy of a variety of estimates, including engineering progress, materials quantities, the achievement of milestones, penalty provisions, labor productivity and cost estimates. Due to uncertainties inherent in the estimation progress, it is possible that actual completion costs may vary from estimates. If estimated total costs on contracts indicate a loss, the Company recognizes that estimated loss in the period the estimated loss first becomes known.

        Cost-Plus Contracts.    The Company enters into two major types of cost-plus contracts:

F-9

        Fixed-Price Contracts.    The Company enters into fixed-price contracts:

        Time-and-Materials Contracts.    The Company enters into time-and-materials contracts:

        Service-Related Contracts.    The Company enters into service-related contracts:

        Contract Claims—In accordance with the American Institute of Certified Public Accountants Statement of Position No. 81-1, "Accounting for Performance of Construction-Type and Certain Production-Type Contracts," the Company records contract revenue related to claims only if it is probable that the claim will result in additional contract revenue and if the amount can be reliably estimated. If both criteria are met, the Company records revenue only to the extent that contract costs relating to the claim have been incurred. As of September 30, 2005 and September 30, 2006, the Company had no significant receivables related to contract claims.

        Government Contract Matters—The Company's federal government and certain state and local agency contracts are subject to among other regulations, regulations issued under the Federal Acquisition Regulations (FAR). These regulations can limit the recovery of certain specified indirect costs on contracts and subjects the Company to multiple audits by government agencies such as the Defense Contract Audit Agency (DCAA). In addition, most of the Company's federal and state and local contracts are subject to termination at the discretion of the client.

        Audits by the DCAA and other agencies consist of reviews of the Company's overhead rates, operating systems and cost proposals to ensure that the Company accounted for such costs in accordance with the Cost Accounting Standards of the FAR (CAS). If the DCAA determines the

F-10


Company has not accounted for such costs consistent with CAS, the DCAA may disallow these costs. Historically, the Company has not had any material cost disallowances by the DCAA as a result of audit. However, there can be no assurance that audits by the DCAA or other governmental agencies will not result in material cost disallowances in the future.

        Cash and Cash Equivalents—The Company's cash equivalents include highly liquid investments which have an initial maturity of 90 days or less.

        Allowance for Doubtful Accounts—The Company records its accounts receivable net of an allowance for doubtful accounts. This allowance for doubtful accounts is estimated based on management's evaluation of the contracts involved and the financial condition of its clients. The factors the Company considers in its contract evaluations include, but are not limited to:

        Concentration of Credit Risk—Financial instruments, which subject the Company to credit risk, consist primarily of cash and cash equivalents and net accounts receivable. The Company places its temporary cash investments with high credit quality financial institutions. As of September 30, 2005 and September 30, 2006, no accounts receivable from a single commercial client exceeded 10% of the Company's total accounts receivable. The Company regularly performs credit evaluations of its clients and considers these evaluations in the determination of its allowance for doubtful accounts.

        Fair Value of Financial Instruments—The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturities of these instruments. The carrying amount of the revolving credit facility and loans under the Senior Executive Equity Investment Plan approximates fair value because the interest rates are based upon variable reference rates. The fair value of the senior secured notes as of September 30, 2005 and September 30, 2006 was not materially different than the carrying value.

        Property and Equipment—Property and equipment are recorded at cost and are depreciated over their estimated useful lives using the straight-line method. Expenditures for maintenance and repairs are expensed as incurred. Typically, estimated useful lives range from three to ten years for equipment, furniture and fixtures. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining terms of the underlying lease agreement.

        Deferred Loan Costs—Deferred loan costs that relate to the Company's Amended and Restated Credit Agreement, Term Credit Agreement and the Senior Notes due 2008 and 2012 are being amortized over the terms of their respective agreements.

F-11


        Long-lived Assets—Long-lived assets to be held and used are reviewed for impairment whenever events or circumstances indicate that the assets may be impaired. For assets to be held and used, impairment losses are recognized based upon the excess of the asset's carrying amount over the fair value of the asset. For long-lived assets to be disposed, impairment losses are recognized at the lower of the carrying amount or fair value less cost to sell.

        Goodwill and Related Intangible Assets—Goodwill represents the excess amounts paid over the fair value of net assets acquired in mergers and acquisitions. In order to determine the amount of goodwill resulting from a merger or acquisition, the Company performs an assessment to determine the value of the acquired company's tangible and identifiable intangible assets and liabilities. In its assessment, the Company determines whether identifiable intangible assets exist, such as backlog and customer relationships, established workforce, patents, trademarks/trade names and other assets.

        Statement of Financial Accounting Standards, or SFAS, No. 142, "Goodwill and Other Intangible Assets", requires that the Company perform an impairment test of its goodwill at least annually for each reporting unit of the Company. Reporting units for purposes of this test are consistent with the Company's reportable segments and consist of Professional Technical Services and Management Support Services. The impairment test is a two-step process. During the first step, the Company estimates the fair value of the reporting unit and compares that amount to the carrying value of that reporting unit's goodwill. In the event the fair value of the reporting unit is determined to be less than the carrying value, a second step is required. The second step requires the Company to perform a hypothetical purchase allocation to compare the current implied fair value of the goodwill to the current carrying value of the goodwill. In the event that the current fair value of the goodwill is less than the carrying value, an impairment charge is recognized. The Company performs this test annually in its fiscal fourth quarter.

        Pension Plans—The Company has certain defined benefit pension plans. The Company calculates the market-related value of assets, which is used to determine the return-on-assets component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization. This calculation reflects the Company's anticipated long-term rate of return and amortization of the difference between the actual return (including capital, dividends, and interest) and the expected return over a five-year period. Cumulative net unrecognized gains or losses that exceed 10% of the greater of the projected benefit obligation or the market related value of plan assets are subject to amortization.

        Insurance Reserves—The Company maintains insurance for business risks. Insurance coverage contains various retention and deductible amounts for which the Company provides accruals based upon reported claims and an actuarially determined estimated liability for certain claims incurred but not reported. For certain professional liability risks, the Company's retention amount under its claims-made insurance policies does not include an accrual for claims incurred but not reported due to the Company's inability to reliably estimate any potential liability including any potential legal expense to be incurred in defending the Company's position against such claims if they occur. The Company believes that its accruals for estimated liabilities associated with professional and other liabilities are sufficient and any excess liability beyond the accrual is not expected to have a material adverse effect on the Company's results of operations or financial position.

F-12


        Foreign Currency Translation—Results of operations for foreign entities are translated to U.S. dollars using the average exchange rates during the period. Assets and liabilities for foreign entities are translated using the exchange rates in effect as of the date of the balance sheet. Resulting translation adjustments are recorded as a foreign currency translation adjustment into other comprehensive income/(loss) in stockholders' equity. The cumulative foreign currency translation adjustments at September 30, 2005 and 2006, was $(1.8) million and $9.4 million, respectively.

        Accounting for Derivative Instruments and Hedging—SFAS No. 133, Accounting for Derivative Instruments and Hedging requires all derivatives to be stated on the balance sheet at fair value. Derivatives that are not hedges or are ineffective hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through income or recognized in other comprehensive income/(loss) until the hedged item is recognized in earnings. The Company's derivatives are recorded on the balance sheet at fair value and changes in the value of the derivatives are adjusted through income. As of September 30, 2006, the Company had no derivative instruments reflected on its balance sheet.

        Selling, General and Administrative Expenses—Selling, general and administrative expenses are expensed in the period incurred.

        Income Taxes—The Company files a consolidated federal income tax return and combined California franchise tax return. In addition, the Company files other returns that are required in the states and jurisdictions in which it does business, which includes the Company and its subsidiaries. The Company accounts for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. In determining the need for a valuation allowance, management reviewed both positive and negative evidence, including current and historical results of operations, future income projections, and potential tax planning strategies. Based upon management's assessment of all available evidence, the Company has concluded that it is more likely than not that the deferred tax assets will be realized, net of valuation allowance.

        Earnings Per Share—Basic earnings per share (EPS) excludes dilution and is computed by dividing the income available to common stock and common stock unit holders by the weighted average number of shares and units outstanding for the period. Diluted EPS is computed by dividing income available to common stock and common stock unit holders by the weighted average number of shares and units outstanding and the weighted average number of potential common shares. Potential common shares include the dilutive effects of outstanding stock options, stock match shares and units, preferred stock and warrants. The issuance of stock match shares and units is reflected in basic EPS on the last day of the fiscal quarter when the actual number of shares and units is determined based on the quarter-end price per share and in diluted EPS when the match is accrued based on the then current price per share.

        Stock-Based Compensation—The Company's stock compensation plans including its employee stock option plan are accounted for in accordance with Accounting Principles Board Opinion No. 25,

F-13


"Accounting for Stock Issued to Employees" (APB 25) and related interpretations. Under APB 25, to the extent the exercise price equals or exceeds the market price of the underlying stock on the date of the grant, no compensation expense is recognized for options granted to employees.

        Recently Issued Accounting Pronouncements—In September 2006, the Financial Accounting Standards Board, or FASB, issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans" (SFAS 158). SFAS 158 requires employers to fully recognize the obligations associated with defined benefit pension plans in their financial statements. The Company will be required to recognize such obligations as of September 30, 2007. Additionally, the Company will be required to measure such obligations as of the end of its fiscal year, rather than up to three months earlier as had been previously permitted, effective in its fiscal year ending September 30, 2009. The Company is currently evaluating the impact of the provisions of SFAS 158 on its results of operations and financial position.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for the fiscal year ending September 30, 2009. The Company is currently evaluating the impact of the provisions of SFAS 157 on its results of operations and financial position.

        In June 2006, the FASB issued FASB Interpretation FIN, No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements. FIN 48 prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Additionally, FIN 48 provides guidance on recognition or de-recognition of interest and penalties, changes in judgment in interim periods, and disclosures of uncertain tax positions. FIN 48 becomes effective for the Company in fiscal year beginning October 1, 2007. The Company is in the process of determining the effect of the adoption of FIN 48 on its results of operations and financial position.

        In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3" (SFAS 154), which applies to all voluntary changes in accounting principle, as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. APB Opinion No. 20 previously required that most voluntary changes in accounting principle be recognized in net income as a cumulative effect of changing to the new accounting principle. SFAS 154 now requires retrospective application to prior periods' financial statements for changes in accounting principle, unless it is impracticable to do so. SFAS 154 becomes effective for the Company in fiscal year beginning October 1, 2007. The Company does not currently anticipate any voluntary changes in accounting principle or errors that would require such retroactive application.

        In December 2004, the FASB issued its final SFAS on accounting for share-based payments (SBPs) SFAS No. 123 (revised 2004), "Share-Based Payments" (SFAS 123R) that requires the Company to expense the value of employee stock options and similar awards. Under SFAS 123R, SBP awards result in a cost that will be measured at fair value on the awards' grant date, based on the estimated number of awards that are expected to vest. Compensation expense for awards that vest would not be reversed if the awards expire without being exercised. SFAS 123R becomes effective for the Company in its

F-14


fiscal year beginning October 1, 2006. Upon adoption of SFAS 123R, the Company will adopt the prospective transition method. Under this method, prior periods will not be restated to reflect the impact of SFAS 123R. To the extent that the Company issues stock options after October 1, 2006, results of operations will be negatively impacted.

2. Mergers and Acquisitions

        In fiscal year 2004, the Company consummated the following two strategic merger and acquisition transactions:


        The aggregate value of all consideration for the fiscal 2004 mergers and acquisitions was approximately $35.5 million.

        In fiscal year 2005, the Company consummated seven merger and acquisition transactions, the largest of which was:

F-15

        Further, in fiscal year 2005, small niche acquisitions included JWD Group, a California-based professional technical services firm, Entranco, Inc. a Washington-based professional technical services firm and JF Thompson, a Texas-based professional technical services firm.

The aggregate value of all consideration for the fiscal 2005 mergers and acquisitions was approximately $176.7 million.

In fiscal year 2006, the Company consummated four merger and acquisition transactions, the largest of which was:

        In addition, in fiscal year 2006 the Company consummated the following strategic merger and acquisition transaction:

        Further, in fiscal year 2006, small niche acquisitions included Pittndrigh, Shinkfield and Bruce, a Sydney, Australia based professional technical services firm and City Planning Consultants Limited, a Hong-Kong, China-based professional technical services firm.

        The aggregate value of all consideration for the fiscal 2006 mergers and acquisitions was approximately $89.5 million.

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        The following table summarizes the estimated fair values, in thousands, of the assets acquired and liabilities assumed as of the dates of the acquisitions:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
Current assets   $ 99,158   $ 91,064  
Property and equipment     10,175     7,062  
Other non-current assets     7,284     931  
Goodwill     101,628     55,643  
Other intangible assets     20,290     9,600  
Current liabilities     (59,529 )   (72,824 )
Other non-current liabilities     (2,319 )   (1,982 )
   
 
 
  Net assets acquired   $ 176,687   $ 89,494  
   
 
 

        All of the acquisitions above were accounted for under the purchase method of accounting. As such, the purchase consideration of each acquired company was allocated to acquired tangible and intangible assets and liabilities based upon their fair values. The excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill and is included in the accompanying consolidated balance sheets. The results of operations of each of the companies acquired have been included in the Company's financial statements from the dates of acquisition.

        The table below presents summarized unaudited pro forma operating results assuming that the Company had acquired UMA, ENSR, EDAW and Cansult at the beginning of the fiscal years immediately preceding each acquisition (the beginning of fiscal year 2004, 2004, 2005 and 2006, respectively) presented (in thousands, except per share data-unaudited):

 
   Fiscal Year Ended
 
   September 30, 2004
   September 30, 2005
   September 30, 2006
Revenue   $ 2,254,285   $ 2,769,800   $ 3,508,587
Income from operations   $ 83,064   $ 96,756   $ 119,729
Net income available for common stockholders   $ 43,300   $ 49,755   $ 60,478

Earnings per share:
 
 
 
 
 
 
 
 
 
  Basic   $ 0.81   $ 0.91   $ 1.09
  Diluted   $ 0.74   $ 0.82   $ 0.86

Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
  Basic     53,780     54,952     55,388
  Diluted     65,434     67,050     73,196

3. Goodwill and Other Intangible Assets

        Effective October 1, 2001, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets." This statement changed the accounting method for goodwill and indefinite-lived intangible assets from an amortization approach to an impairment-only approach. The Company did not record a

F-17


transitional goodwill impairment charge nor has it incurred any goodwill impairment charges since its adoption of this standard.

        The changes in the carrying value of goodwill by segment for the fiscal years ended September 30, 2005 and September 30, 2006 were as follows:

 
   Fiscal Year 2005
 
   September 30,
2004
   Goodwill
Additions
   Post-
Acquisition Adjustments
   September 30,
2005
 
   (in thousands)
Reporting Unit:                        
Professional Technical Services   $ 284,411   $ 88,958   $ 21,761   $ 395,130
Management Support Services     8,933     —     —     8,933
   
 
 
 
  Total   $ 293,344   $ 88,958   $ 21,761   $ 404,063
   
 
 
 
 
   Fiscal Year 2006
 
   September 30,
2005
   Goodwill
Additions
   Post-
Acquisition Adjustments
   September 30,
2006
 
   (in thousands)
Reporting Unit:                        
Professional Technical Services   $ 395,130   $ 61,273   $ 1,172   $ 457,575
Management Support Services     8,933     —     —     8,933
   
 
 
 
  Total   $ 404,063   $ 61,273   $ 1,172   $ 466,508
   
 
 
 

        The gross amounts and accumulated amortization of the Company's acquired identifiable intangible assets with finite useful lives as of September 30, 2005 and September 30, 2006, included in Intangible and other assets—net in the accompanying Consolidated Balance Sheets, were as follows:

 
   September 30, 2005
   September 30, 2006
Identifiable Intangible Assets:
   Gross
Amount
   Accumulated
Amortization
   Gross
Amount
   Accumulated
Amortization
 
   (in thousands)
Backlog   $ 8,052   $ 2,348   $ 16,687   $ 15,254
Customer relationships     22,313     619     18,179     2,180
Trademarks/Trade-names     4,900     82     899     163
   
 
 
 
  Total   $ 35,265   $ 3,049   $ 35,765   $ 17,597
   
 
 
 

F-18

        Identifiable intangible assets acquired during the fiscal years ended September 30, 2005 and September 30, 2006 consisted of the following amounts, in thousands, with the following weighted average amortization periods:

 
   September 30, 2005
   September 30, 2006
Identifiable Intangible Assets:
   Value Ascribed
   Weighted Average
Life
   Value Ascribed
   Weighted Average
Life
Backlog   $ 9,283   1.1 years   $ 5,485   0.9 years
Customer relationships     10,407   10.0 years     3,816   10.0 years
Trademarks/Trade-names     600   5.0 years     299   5.0 years
   
     
   
  Total   $ 20,290   5.8 years   $ 9,600   4.7 years
   
     
   

        At the time of acquisition, the Company estimates the amount of the identifiable intangible assets acquired based upon historical valuations and the facts and circumstances available at the time. The Company concludes the value of identifiable intangible assets during the purchase allocation period. This period may cross into the next fiscal year. For the years ended September 30, 2005 and September 30, 2006, the Company's amortization expense for acquired intangible assets with finite useful lives was $3.0 million and $14.5 million, respectively. The following table presents, in thousands, estimated future amortization expense for acquired intangibles:

2007   $ 2,969
2008     2,459
2009     1,998
2010     1,988
2011     1,844
Thereafter     6,910
   
Total   $ 18,168
   

        The goodwill and other identifiable intangible assets created in the acquisitions are amortizable for tax purposes relative to the Austin and Entranco acquisitions. The goodwill and other identifiable intangibles created in the acquisitions, relative to the remaining acquisitions, are not amortizable for tax purposes.

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4. Accounts Receivable—Net

        Net accounts receivable consisted of the following as of September 30, 2005 and September 30, 2006:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Billed   $ 408,337   $ 543,606  
Unbilled     291,495     372,034  
Contract retentions     31,096     38,921  
   
 
 
  Total accounts receivable—gross     730,928     954,561  

Allowance for doubtful accounts
 
 
(27,091
)
 
(41,383
)
   
 
 
  Total accounts receivable—net   $ 703,837   $ 913,178  
   
 
 
Billings in excess of costs on uncompleted contracts   $ 122,825   $ 143,283  
   
 
 

        Billed accounts receivable represent amounts invoiced to clients that have yet to be collected. Contract retentions represent amounts invoiced to clients; however payment has been withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. These retention agreements vary from project to project and could be outstanding several months or years. Unbilled accounts receivable represents revenue recognized but not yet invoiced to the client due to contract terms or the timing of accounting invoicing cycles. Substantially all unbilled receivables as of September 30, 2006 are expected to be billed and collected within twelve months.

        Other than U.S. government, no single client accounted for more than 10% of the Company's outstanding receivables at September 30, 2005 and September 30, 2006.

5. Off Balance Sheet Risk and Concentration of Credit Risk

        Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade receivables. The Company's cash balances and short-term investments are maintained in accounts held by major banks and financial institutions located primarily in the United States, Europe, Australia, New Zealand and Hong Kong. In the U.S., the Company invests its excess cash through a major bank in commercial paper of companies with strong credit ratings and in a variety of industries, and through a large financial asset manager in various marketable debt securities. These securities typically mature within 30 days and, therefore, bear minimal risk. If the Company extends a significant portion of its credit to clients in a specific geographic area or industry, the Company may experience disproportionately high levels of default if those clients are adversely affected by factors particular to their geographic area or industry. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising the Company's customer base, including, in large part, governments, government agencies and quasi-government organizations, and their dispersion across many different industries and geographies. In fiscal year 2006, foreign revenue represented approximately 27.0% of the Company's total revenue. In order to mitigate credit risk, the Company continually reviews the credit worthiness of its major private clients

F-20

6. Income Taxes

        Income tax expense for fiscal years 2004, 2005 and 2006 consisted of the following:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Current:                    
  Federal   $ 9,547   $ 3,399   $ 19,135  
  State     3,078     3,219     5,916  
  Foreign     6,585     9,268     12,308  
   
 
 
 
    Total current income tax expense     19,210     15,886     37,359  
   
 
 
 
Deferred:                    
  Federal     3,541     13,223     (10,388 )
  State     3,233     (130 )   (3,165 )
  Foreign     —     —     1,417  
   
 
 
 
    Total deferred income tax expense/(benefit)     6,774     13,093     (12,136 )
   
 
 
 
    Total income tax expense   $ 25,984   $ 28,979   $ 25,223  
   
 
 
 

F-21

        Temporary differences comprising the net deferred income tax asset (liability) shown on the accompanying consolidated balance sheets were as follows:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Deferred Tax Asset:              
  Compensation and benefit accruals not currently deductible   $ 64,025   $ 94,124  
  Gain on the disposal of assets     —     6,892  
  Net operating loss carryover     40,996     44,854  
  Self insurance reserves     14,398     22,511  
  R&D tax credit carryover     24,906     7,680  
  Pension liability     30,896     23,918  
  Foreign tax attributes     1,997     1,817  
  Accrued liabilities     7,929     12,816  
  Foreign and other tax credits     391     256  
  Investments in joint ventures/non-controlled subsidiaries     540     554  
  Other     —     156  
   
 
 
    Total deferred tax asset     186,078     215,578  
   
 
 
Deferred Tax Liability:              
  Unearned revenue     (50,490 )   (75,388 )
  Depreciation and amortization     (13,266 )   (18,842 )
  Acquired intangible assets     (12,835 )   —  
  State taxes     (130 )   (4,611 )
  Other     (187 )   —  
   
 
 
    Total deferred tax liability     (76,908 )   (98,841 )
   
 
 
    Valuation allowance     (57,180 )   (31,112 )
   
 
 
    Net deferred tax asset   $ 51,990   $ 85,625  
   
 
 

        As of September 30, 2006, the Company had state research & development (R&D) credit carry-forwards for income tax purposes of approximately $7.7 million, which will begin to expire in 2020, Federal net operating loss carry-forwards of approximately $103.8 million and state net operating loss carry-forwards of approximately $123.9 million, both of which will begin to expire in 2007. Under the Tax Reform Act of 1986, Federal and California tax credits may be subject to a future annual limitation on their usage if the Company has an ownership change as defined in the Internal Revenue Code, or IRC.

        As of September 30, 2006, the deferred tax asset was $215.6 million. The Company has recorded a valuation allowance of approximately $31.1 million related to state R&D tax credits, net operating loss carryovers and foreign tax attributes. The Company has performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax asset in accordance with SFAS No. 109, "Accounting for Income Taxes." This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carry-forwards and estimates of projected future

F-22


taxable income. Although realization is not assured, based on the Company's assessment, the Company has concluded that it is more likely than not that the remaining asset of $184.5 million will be realized and, as such, no additional valuation allowance has been provided.

        Total income tax expense was different than the amount computed by applying the Federal statutory rate as follows:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   Amount
   %
   Amount
   %
   Amount
   %
  
 
   ($ in thousands)

  
Tax at federal statutory rate   $ 26,747   35 % $ 28,977   35 % $ 27,619   35 %
Tax credits     (759 ) (1 )%   —   — %   —   — %
State taxes, net of Federal benefit     3,078   4 %   3,219   4 %   1,788   2 %
Foreign income tax     (4,597 ) (6 )%   (5,528 ) (7 )%   (2,498 ) (3 )%
Foreign tax attributes     1,450   2 %   —   — %   —   — %
Section 965 dividend     —   — %   —   — %   2,495   3 %
Disallowance of meals & entertainment expense     774   1 %   827   1 %   770   1 %
Other permanent differences     740   1 %   1,484   2 %   (1,105 ) (1 )%
Valuation allowance     (1,449 ) (2 )%   —   — %   (3,846 ) (5 )%
   
     
     
     
  Total income tax expense   $ 25,984   34 % $ 28,979   35 % $ 25,223   32 %
   
     
     
     

        The Company's income tax returns are regularly audited and reviewed by the Internal Revenue Service (IRS) and state taxing authorities. During the fourth quarter of 2006, the IRS completed an examination and its Joint Committee review for fiscal years 1996 through 2004. The major issue raised by the IRS related to R&D tax credits recognized during fiscal years 2000 through 2004. The amount of R&D tax credits recognized for financial statement purposes represented the amount that the Company estimated would be ultimately realized. However, with the completion of the examination and review, the Company has determined that the amount of R&D tax credits to which the Company is entitled to is more than the estimated realizable amount. Consequently, the Company has recognized a decrease in the valuation allowance for the Federal R&D tax credits of $3.8 million.

        The Company has not provided for U.S. taxes or foreign withholding taxes on approximately $71.8 million of undistributed earnings from non-U.S. subsidiaries because such earnings are intended to be reinvested indefinitely. If these earnings were distributed, foreign tax credits may become available under current law to reduce the resulting U.S. income tax liability.

        During October 2004, The American Jobs Creation Act of 2004 (the Act) was signed into law, adding Section 965 to the IRC. Section 965 of the IRC provides a special one-time deduction of 85.0% of certain foreign earnings that are repatriated under a domestic reinvestment plan, as defined therein. The effective Federal tax rate on any qualified repatriated foreign earnings under Section 965 equals 5.25%. The Company could elect to apply this provision to a qualified earnings repatriation made during its fiscal year 2006. During the fourth quarter of 2006, the Company and its Board of Directors approved a plan to repatriate approximately $67.0 million in previously un-remitted foreign earnings under the Act, which were remitted in the Company's fourth quarter of 2006. Of the $67.0 million of earnings repatriated from its foreign subsidiaries, approximately $61.7 million qualifies for the 85.0%

F-23


dividends received deduction under Section 965. A tax provision of approximately $2.5 million for the repatriation of certain foreign earnings has been recorded as income tax expense for year ended September 30, 2006.

7. Investments in Unconsolidated Joint Ventures

        The Company's unconsolidated joint ventures provide architecture, engineering, program management, construction management and operations and maintenance services. Joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is typically controlled by a joint venture executive committee, comprised of a representative from each joint venture partner with equal voting rights, irrespective of the ownership percentage. The ownership percentage is typically representative of the work to be performed or the amount of risk assumed by each joint venture partner. The executive committee provides management oversight and assigns work efforts to the joint venture partners.

        The majority of the Company's unconsolidated joint ventures have no employees and minimal operating expenses. For these joint ventures, the Company's own employees perform work for the joint venture, which is then billed to a third-party customer by the joint venture. These joint ventures function as pass through entities to bill the third-party customer. The Company includes the services performed for these joint ventures, and the costs associated with these services, in the Company's results of operations. In certain joint ventures where a fee is added by the joint venture to client billings, the Company's portion of that fee is recorded in equity in earnings of joint ventures.

        The Company also has unconsolidated joint ventures that have their own employees and operating expenses and to which the Company generally makes a capital contribution. These joint ventures generally provide operations and maintenance services for governmental facilities. The Company accounts for these joint ventures using the equity method.

F-24


        Summary financial information on the unconsolidated joint ventures is as follows:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Financial position:                    
  Current assets   $ 23,271   $ 82,566   $ 149,547  
  Current liabilities     (17,787 )   (44,864 )   (105,767 )
   
 
 
 
    Working capital     5,484     37,702     43,780  
  Non-current assets     5,466     6,632     9,794  
  Non-current liabilities     (214 )   (1,384 )   (3,047 )
   
 
 
 
    Joint ventures' equity   $ 10,736   $ 42,950   $ 50,527  
   
 
 
 
Amount recorded as investment in joint ventures   $ 8,993   $ 19,230   $ 19,943  

Joint Ventures'
 
 
 
 
 
 
 
 
 
 
  Total revenue   $ 421,536   $ 508,007   $ 966,938  
  Cost of revenue     414,576     495,794     947,415  
   
 
 
 
  Net income   $ 6,960   $ 12,213   $ 19,523  
   
 
 
 
Equity in earnings of joint ventures   $ 2,517   $ 2,352   $ 6,554  
   
 
 
 

8. Property and Equipment

        Property and equipment, at cost, consists of the following:

 
   Fiscal Year Ended
  
 
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Land   $ 1,354   $ —  
Buildings     11,029     —  
Leasehold improvements     23,685     31,539  
Computer systems and equipment     55,743     72,359  
Furniture and fixtures     14,095     10,923  
Automobiles     1,987     1,919  
   
 
 
Total     107,893     116,740  
Accumulated depreciation and amortization     (28,365 )   (26,417 )
   
 
 
Property and equipment, net   $ 79,528   $ 90,323  
   
 
 

        Depreciation expense for the fiscal years ended September 30, 2005 and September 30, 2006 was $16.3 million and $24.2 million, respectively. Amortization expense of capitalized software costs for fiscal years ended September 30, 2005 and September 30, 2006 was $2.3 million and $3.9 million, respectively. The unamortized capitalized software costs at September 30, 2005 and September 30, 2006 were $19.9 million and $21.5 million, respectively. During the fiscal years ended September 30, 2005

F-25


and September 30, 2006, the Company retired $11.6 million and $8.1 million, respectively, of fully depreciated equipment.

        Depreciation and amortization are provided using primarily the straight-line method over the estimated useful lives of the assets, or, in the case of leasehold improvements and capitalized leases, the lesser of the remaining life of the lease or its estimated useful life. Estimated useful lives for the building was 20 years and ranges from two to 12 years for leasehold improvements, three to seven years for machinery and equipment, five to 10 years for furniture and fixtures and three to 10 years for automobiles and trucks.

9. Employee Benefit Plans

        Pension Plan—In the United States, the Company sponsors a Defined Benefit Pension Plan (the Pension Plan) which covers substantially all permanent employees hired as of March 1, 1998, is subject to eligibility and vesting requirements, and required contributions from participating employees through March 31, 1998. Benefits under this plan generally are based on the employee's years of creditable service and compensation. Effective April 1, 2004, the Company set a maximum on the amount of compensation used to determine pension benefits based on the highest calendar year of compensation earned in the 10 completed calendar years from 1994 through 2003, or the relevant IRS annual compensation limit, currently $200,000, whichever is lower.

        Effective April 1, 1998, the Company adopted a new Floor Offset Defined Contribution Pension Plan (the 401k Pension Plan) to replace the Pension Plan. The 401(k) Pension Plan accepts pre-tax and after-tax contributions from participants in amounts up to 1.5% of compensation, which are then matched dollar for dollar by the Company, and are invested in the Defined Contribution 401 (k) account. Company matches become vested five years after participant's date of hire. The benefits of participants who were enrolled in the Pension Plan as of March 1, 1998, are grandfathered: i.e., upon retirement, the participant will receive the balance in the participant's Defined Contribution Account and, in addition, the Pension Plan will pay the participant a benefit actuarially based on the difference between the benefit calculated under the Pension Plan and the balance that the participant will have in his or her Defined Contribution Account, if the participant contributes 1.5% from April 1, 1998, until the participant's retirement, and, if the Defined Contribution Account remains invested in the Retirement Benchmark Fund. In the event that a participant elects to contribute less than 1.5% or moves the participant's Defined Contribution Account out of the Retirement Benchmark Fund prior to retirement, the Pension Plan will pay the participant a differential, wherein the total benefit may be more or less than the benefit provided for under the Pension Plan depending on the amount of the participant's contributions and the performance of the participant's self-directed investment. In the case of highly compensated employees, in order to comply with IRS requirements, some, or all, of this differential may be paid by the Company rather than by the Pension Plan. Employees who were not participants in the Pension Plan as of March 1, 1998, will be entitled to receive only the vested balance in their Defined Contribution Account. Outside the United States, the Company sponsors various pension plans which are appropriate to the country in which the Company operates, some of which are government mandated.

F-26


        The following tables provide reconciliations of the changes in the total Company's, U.S.' and non-U.S.' plans' benefit obligations and reconciliations of the changes in the fair value of assets for the years ending September 30, 2004, 2005, and 2006, and reconciliations of the funded status as of September 30 of each year.

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Total Company                    
Change in Benefit Obligation:                    
 
Benefit obligation at beginning of year
 
$
300,499
 
$
324,687
 
$
432,896
 
  Service cost     8,283     7,722     8,325  
  Participant contributions     3,081     3,706     2,980  
  Interest cost     16,697     19,989     21,959  
  Plan amendments     (16,968 )   —     424  
  Benefits paid     (9,525 )   (12,599 )   (14,752 )
  Actuarial (gain) loss     7,549     56,005     (24,569 )
  Acquisitions     —     38,452     (277 )
  Foreign currency translation loss (gain)     15,071     (5,066 )   17,760  
   
 
 
 
  Benefit obligation at end of year   $ 324,687   $ 432,896   $ 444,746  
   
 
 
 
U.S. Plans                    
Change in Benefit Obligation:                    
 
Benefit obligation at beginning of year
 
$
115,712
 
$
110,164
 
$
130,109
 
  Service cost     3,624     2,987     3,060  
  Participant contributions     444     406     243  
  Interest cost     6,534     6,710     6,711  
  Plan amendments     (8,665 )   —     424  
  Benefits paid     (5,255 )   (6,025 )   (7,526 )
  Actuarial (gain) loss     (2,230 )   15,867     (10,042 )
  Acquisitions     —     —     —  
  Foreign currency translation loss (gain)     —     —     —  
   
 
 
 
  Benefit obligation at end of year   $ 110,164   $ 130,109   $ 122,979  
   
 
 
 
Non-U.S. Plans                    
Change in Benefit Obligation:                    
 
Benefit obligation at beginning of year
 
$
184,787
 
$
214,523
 
$
302,787
 
  Service cost     4,659     4,735     5,265  
  Participant contributions     2,637     3,300     2,737  
  Interest cost     10,163     13,279     15,248  
  Plan amendments     (8,303 )   —     —  
  Benefits paid     (4,270 )   (6,574 )   (7,226 )
  Actuarial (gain) loss     9,779     40,138     (14,527 )
  Acquisitions     —     38,452     (277 )
  Foreign currency translation loss (gain)     15,071     (5,066 )   17,760  
   
 
 
 
  Benefit obligation at end of year   $ 214,523   $ 302,787   $ 321,767  
   
 
 
 

F-27

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Total Company                    
Change in Plan Assets:                    
 
Fair value of plan assets at beginning of year
 
$
172,055
 
$
215,246
 
$
278,703
 
  Actual return on plan assets     26,726     26,101     27,523  
  Acquisitions     —     27,250     (277 )
  Employer contributions     15,336     23,079     22,282  
  Participant contributions     3,081     3,706     2,980  
  Benefits paid     (9,525 )   (12,599 )   (14,752 )
  Administrative expenses     (1,236 )   (1,249 )   —  
  Foreign currency translation (loss) gain     8,809     (2,831 )   12,154  
   
 
 
 
  Fair value of plan assets at end of year   $ 215,246   $ 278,703   $ 328,613  
   
 
 
 
U.S. Plans                    
Change in Plan Assets:                    
 
Fair value of plan assets at beginning of year
 
$
63,263
 
$
75,049
 
$
80,662
 
  Actual return on plan assets     10,897     5,868     8,132  
  Acquisitions     —     —     —  
  Employer contributions     6,936     6,613     7,864  
  Participant contributions     444     406     243  
  Benefits paid     (5,255 )   (6,025 )   (7,526 )
  Administrative expenses     (1,236 )   (1,249 )   —  
  Foreign currency translation (loss) gain     —     —     —  
   
 
 
 
  Fair value of plan assets at end of year   $ 75,049   $ 80,662   $ 89,375  
   
 
 
 
Non-U.S. Plans                    
Change in Plan Assets:                    
 
Fair value of plan assets at beginning of year
 
$
108,792
 
$
140,197
 
$
198,041
 
  Actual return on plan assets     15,829     20,233     19,391  
  Acquisitions     —     27,250     (277 )
  Employer contributions     8,400     16,466     14,418  
  Participant contributions     2,637     3,300     2,737  
  Benefits paid     (4,270 )   (6,574 )   (7,226 )
  Administrative expenses     —     —     —  
  Foreign currency translation (loss) gain     8,809     (2,831 )   12,154  
   
 
 
 
  Fair value of plan assets at end of year   $ 140,197   $ 198,041   $ 239,238  
   
 
 
 

F-28

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Total Company                    
Reconciliation of Funded Status:                    
 
Funded status at end of year
 
$
(109,441
)
$
(154,193
)
$
(116,133
)
  Unrecognized actuarial loss     84,928     113,805     84,033  
  Unrecognized prior service cost     (18,060 )   (15,768 )   (13,838 )
   
 
 
 
  Accrued benefit cost     (42,573 )   (56,156 )   (45,938 )
  Contribution made after measurement date     10,100     7,124     12,586  
   
 
 
 
  Accrued benefit cost   $ (32,473 ) $ (49,032 ) $ (33,352 )
   
 
 
 
U.S. Plans                    
Reconciliation of Funded Status:                    
 
Funded status at end of year
 
$
(35,115
)
$
(49,447
)
$
(33,604
)
  Unrecognized actuarial loss     33,004     40,713     28,949  
  Unrecognized prior service cost     (8,116 )   (6,877 )   (5,295 )
   
 
 
 
  Accrued benefit cost     (10,227 )   (15,611 )   (9,950 )
  Contribution made after measurement date     27     28     159  
   
 
 
 
  Accrued benefit cost   $ (10,200 ) $ (15,583 ) $ (9,791 )
   
 
 
 
Non-U.S. Plans                    
Reconciliation of Funded Status:                    
 
Funded status at end of year
 
$
(74,326
)
$
(104,746
)
$
(82,529
)
  Unrecognized actuarial loss     51,924     73,092     55,084  
  Unrecognized prior service cost     (9,944 )   (8,891 )   (8,543 )
   
 
 
 
  Accrued benefit cost     (32,346 )   (40,545 )   (35,988 )
  Contribution made after measurement date     10,073     7,096     12,427  
   
 
 
 
  Accrued benefit cost   $ (22,273 ) $ (33,449 ) $ (23,561 )
   
 
 
 

        In accordance with the provisions of SFAS No. 87, "Employers Accounting for Pensions" (SFAS 87) the Company recorded a minimum pension liability representing the excess of the accumulated benefit obligation over the fair value of plan assets. The liability has been offset by intangible assets to the extent possible. Because the asset recognized may not exceed the amount of unrecognized past service cost, the balance of the liability is reported in accumulated other comprehensive income, net of applicable deferred income taxes.

F-29


        The following table sets forth the amounts recognized in the balance sheet as of September 30 of each year:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Total Company                    
Amounts Recognized in the Balance Sheet:                    
 
Prepaid benefit costs
 
$
4,740
 
$
5,585
 
$
6,040
 
  Accrued benefit liability (included in other long-term liabilities)     (84,591 )   (126,642 )   (99,117 )
  Intangible assets     11     1,278     1,008  
  Accumulated other comprehensive income     37,267     63,623     46,131  
  Contribution made after measurement date     10,100     7,124     12,586  
   
 
 
 
Net amount recognized at year-end   $ (32,473 ) $ (49,032 ) $ (33,352 )
   
 
 
 
U.S. Plans                    
Amounts Recognized in the Balance Sheet:                    
 
Prepaid benefit costs
 
$
—
 
$
—
 
$
—
 
  Accrued benefit liability (included in other long-term liabilities)     (28,330 )   (43,809 )   (29,392 )
  Intangible assets     11     1,278     1,008  
  Accumulated other comprehensive income     18,092     26,920     18,434  
  Contribution made after measurement date     27     28     159  
   
 
 
 
Net amount recognized at year-end   $ (10,200 ) $ (15,583 ) $ (9,791 )
   
 
 
 
Non-U.S. Plans                    
Amounts Recognized in the Balance Sheet:                    
 
Prepaid benefit costs
 
$
4,740
 
$
5,585
 
$
6,040
 
  Accrued benefit liability (included in other long-term liabilities)     (56,261 )   (82,833 )   (69,725 )
  Intangible assets     —     —     —  
  Accumulated other comprehensive income     19,175     36,703     27,697  
  Contribution made after measurement date     10,073     7,096     12,427  
   
 
 
 
Net amount recognized at year-end   $ (22,273 ) $ (33,449 ) $ (23,561 )
   
 
 
 

F-30

        The following table details the components of net periodic benefit cost for the plans in fiscal years 2004, 2005 and 2006:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Total Company                    
Components of Net Periodic Benefit Cost:                    
 
Service cost
 
$
8,283
 
$
7,722
 
$
8,325
 
  Interest cost     16,697     19,989     21,959  
  Expected return on plan assets     (16,274 )   (18,989 )   (20,191 )
  Amortization of prior service costs     (1,198 )   (2,122 )   (2,037 )
  Recognized actuarial loss     5,108     5,908     11,565  
  Settlement loss     —     399     —  
   
 
 
 
  Net periodic benefit cost     12,616     12,907     19,621  
Company matches in 401(k) plan     5,041     5,234     6,474  
   
 
 
 
Total net periodic benefit cost and company matches   $ 17,657   $ 18,141   $ 26,095  
   
 
 
 
U.S. Plans                    
Components of Net Periodic Benefit Cost:                    
 
Service cost
 
$
3,624
 
$
2,987
 
$
3,060
 
  Interest cost     6,534     6,710     6,711  
  Expected return on plan assets     (5,800 )   (6,167 )   (6,482 )
  Amortization of prior service costs     (642 )   (1,239 )   (1,158 )
  Recognized actuarial loss     4,247     3,821     5,730  
  Settlement loss     —     —     —  
   
 
 
 
  Net periodic benefit cost     7,963     6,112     7,861  
Company matches in 401(k) plan     5,041     5,234     6,474  
   
 
 
 
Total net periodic benefit cost and company matches   $ 13,004   $ 11,346   $ 14,335  
   
 
 
 
Non-U.S. Plans                    
Components of Net Periodic Benefit Cost:                    
  Service cost   $ 4,659   $ 4,735   $ 5,265  
  Interest cost     10,163     13,279     15,248  
  Expected return on plan assets     (10,474 )   (12,822 )   (13,709 )
  Amortization of prior service costs     (556 )   (883 )   (879 )
  Recognized actuarial loss     861     2,087     5,835  
  Settlement loss     —     399     —  
   
 
 
 
  Net periodic benefit cost     4,653     6,795     11,760  
Company matches in 401(k) plan     —     —     —  
   
 
 
 
Total net periodic benefit cost and company matches   $ 4,653   $ 6,795   $ 11,760  
   
 
 
 

        The amount, net of applicable deferred income taxes, included in other comprehensive income arising from a change in the additional minimum pension liability was $(5.8) million, $26.4 million and $(17.5) million in fiscal 2004, 2005 and 2006, respectively.

F-31

        The table below provides additional year-end information for pension plans with accumulated benefit obligations in excess of plan assets.

 
   Fiscal Year Ended
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
 
   (in thousands)
Total Company                  
Projected benefit obligation   $ 307,015   $ 414,125   $ 423,323
Accumulated benefit obligation   $ 280,821   $ 376,265   $ 390,956
Fair value of plan assets   $ 197,428   $ 258,236   $ 306,146

U.S. Plans
 
 
 
 
 
 
 
 
 
Projected benefit obligation   $ 110,164   $ 130,108   $ 122,979
Accumulated benefit obligation   $ 103,379   $ 124,471   $ 118,767
Fair value of plan assets   $ 75,049   $ 80,662   $ 89,375

Non-U.S. Plans
 
 
 
 
 
 
 
 
 
Projected benefit obligation   $ 196,851   $ 284,017   $ 300,344
Accumulated benefit obligation   $ 177,442   $ 251,794   $ 272,189
Fair value of plan assets   $ 122,379   $ 177,574   $ 216,771

        The table below provides the expected future benefit payments:

 
   Total
   U.S.
   Non-U.S
 
   (in thousands)
2007   $ 14,396   $ 6,090   $ 8,306
2008     19,311     11,423     7,888
2009     17,459     8,052     9,407
2010     18,602     8,588     10,014
2011     21,408     8,847     12,561
2012 - 2016     122,830     52,149     70,681

F-32

        The underlying assumptions for the pension plans are as follows:

 
   Fiscal Year Ended
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
Major assumptions for U.S.-based plans at plan year-end:            
 
Discount rate
 
6.25%
 
5.25%
 
5.25%
  Rate of increase in compensation levels   4.00%   4.00%   4.00%
  Expected long-term rate of return on plan assets   8.00%   8.00%   8.00%

Major assumptions for U.K./Australia-based plans at plan year-end:
 
 
 
 
 
 
 
Discount rate
 
5.75%/5.50%
 
5.75%/5.50%
 
5.00%
  Rate of increase in compensation levels   3.50%   3.50%   n/a/3.50%
  Expected long-term rate of return on plan assets   7.25%   7.25%   5.00%/7.00%

        Pension costs are determined using the assumptions as of the beginning of the plan year (October 1). The funded status is determined using the assumptions as of the end of the plan year.

        The following supplemental information is provided for the qualified plan in the U.S.:

 
   Fiscal Year Ended
  
 
   September 30, 2005
   September 30, 2006
  
Asset Allocation Information:          
  Actual asset allocations:          
    Domestic equity   54 % 54 %
    International equity   15 % 15 %
    Debt   30 % 27 %
    Cash   1 % 4 %
   
 
 
    Total   100 % 100 %
   
 
 

        The following supplemental information is provided for the qualified plan in the U.K.:

 
   Fiscal Year Ended
  
 
   September 30, 2005
   September 30, 2006
  
Asset Allocation Information:          
  Actual asset allocations:          
    Domestic equity   40%/43 % 36 %
    International equity   25%/29 % 26 %
    Debt   31%/32 % 38 %
    Cash   — % — %
   
 
 
    Total   100 % 100 %
   
 
 

F-33

        The following supplemental information is provided for the qualified plan in Australia:

 
   Fiscal Year Ended
  
 
   September 30, 2005
   September 30, 2006
  
Asset Allocation Information:          
  Actual asset allocations:          
    Domestic equity   38 % 38 %
    International equity   24 % 25 %
    Property   7 % 7 %
    Debt   24 % 28 %
    Cash   7 % 2 %
   
 
 
    Total   100 % 100 %
   
 
 

        The Company's policy is to minimize the risk of large losses through diversification in a portfolio of stocks, bonds, and cash equivalents which may reflect varying rates of return. The percentage of assets allocated to cash is to assure liquidity to meet benefit disbursements and general operating expenses.

        To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio and the diversification of the portfolio. This resulted in the selection of an 8% long-term rate of return on assets assumption for the fiscal year ending September 2006.

        Other Plans—In addition, substantially all permanent employees are eligible to participate in other defined contribution plans provided by the Company. Under these plans, participants may make certain contributions as a percentage of their salary. The Company does not make direct cash contributions to these plans; however, it is anticipated that the "Retirement and Savings Plan," or RSP, (Note 13—Stock Plans) will make allocations of the Company's Common Stock (based on Company Contributions of Common Stock to the RSP and/or forfeitures of Common Stock within the RSP) to employee accounts in the RSP and the Company may also make matching contributions of Common Stock Units to the Stock Purchase Plan (Note 13—Stock Plans) both based, in part, on the employee's contributions to these other defined contribution plans.

10. Accrued Expenses

        Accrued expenses of the Company consist of the following:

 
   September 30, 2005
   September 30, 2006
 
   (in thousands)
Accrued salaries and benefits   $ 153,906   $ 190,504
Accrued contract costs     98,015     153,071
Other accrued expenses     21,935     21,973
   
 
Total accrued expenses   $ 273,856   $ 365,548
   
 

F-34

11. Leases

        The Company and its subsidiaries are lessees in non-cancelable leasing agreements for office buildings and equipment which expire at various dates. The following table presents, in thousands, amounts payable under non-cancelable operating lease commitments during the following fiscal years:

Fiscal Year:
   Operating
2007   $ 87,163
2008     71,905
2009     60,071
2010     48,580
2011     41,509
Thereafter     137,403
   
  Total   $ 446,631
   

        Included in the above table are commitments totaling $33.3 million related to the sale-leaseback of the Company's Orange, California facility during fiscal 2006. The sales price of this facility was $20.1 million of which $16.9 million in gain on sale-leaseback was deferred and is being amortized over the 12-year term of the lease. See Note 12 for further information.

        The Company also has similar non-cancelable leasing agreements that due to the terms of the underlying leases, are accounted for as capital lease obligations. At September 30, 2006, the Company had total lease obligations under capital leases of $1.7 million. Rent expense for the years ended September 30, 2004, 2005, and 2006, was approximately $62.5 million, $65.7 million and $90.6 million, respectively.

12. Long-Term Obligations

        Long-term obligations consisted of the following:

 
   September 30, 2005
   September 30, 2006
  
 
   (in thousands)

  
Amended and Restated Credit Agreement   $ 130,000   $ —  
Senior Notes     99,714     68,810  
Term Credit Agreement     —     65,000  
Short-term borrowings     4,165     2,716  
Other Debt     2,843     929  
   
 
 
Total long-term obligations     236,722     137,455  
Less: Current portion of long-term obligations and short-term borrowings     (20,539 )   (14,665 )
   
 
 
Long-term obligations, less current portion   $ 216,183   $ 122,790  
   
 
 

        The Company has an unsecured credit agreement with a syndicate of banks to support its working capital and acquisition needs. On September 22, 2006, the Company amended and restated this agreement, or ARCA, primarily to modify pricing, certain technical terms and to extend the maturity to

F-35

March 31, 2011, or earlier, at the Company's discretion. As of September 30, 2006, the ARCA provided a revolving line of credit in the amount of $300.0 million which included a sub-limit for standby letters of credit of $50.0 million. The Company may borrow, at its option, at either (a) a base rate (the greater of the federal funds rate plus 0.50% or the bank's reference rate) plus a margin which ranges from 0.00% to 0.25%, or (b) an offshore, or LIBOR, rate plus a margin which ranges from 0.75% to 1.75%. In addition to these borrowing rates, there is a commitment fee which ranges from 0.175% to 0.375% on any unused commitment. Borrowings under the ARCA are limited by certain financial covenants. At September 30, 2005 and September 30, 2006, borrowings under this ARCA totaled $130.0 million and $0.0, respectively. At September 30, 2005 and September 30, 2006, outstanding standby letters of credit totaled $21.1 million and $23.1 million, respectively. At September 30, 2006, the Company had $276.9 million available for borrowing under this ARCA.

        On September 9, 2002, the Company issued $25.0 million of 6.23% senior notes due October 15, 2008, or the October 2008 Notes. The October 2008 Notes are unsecured and have an average life of five years. The annual principal payments of $8.3 million were scheduled to begin October 15, 2006, however, the Company elected to pre-pay the first principal payment in September 2006.

        On September 7, 2001, the Company issued $21.0 million of 6.47% senior notes due October 7, 2006, or the October 2006 Notes. The October 2006 Notes were paid in full on September 29, 2006. The October 2006 Notes were unsecured and had an average life of four years. The annual principal payments of $7.0 million began October 7, 2004. The first principal and last principal payments due on the October 2006 Notes were prepaid.

        On April 14, 2000, the Company issued $35.0 of 8.38% senior notes due April 14, 2012, or the April 2012 Notes. The April 2012 Notes are unsecured and have an average life of 10 years. The annual principal payments of $7.0 million will begin April 14, 2008.

        On June 9, 1998, the Company issued $60.0 million of 6.93% senior notes due June 9, 2008, or the June 2008 Notes. The June 2008 Notes are unsecured and have an average life of seven years. The annual principal payments of $8.6 million began June 9, 2002.

        All of the senior notes require interest to be paid either quarterly or semi-annually in arrears and are subject to certain financial covenants. Proceeds from the October 2006 Notes, the June 2008 Notes and the October 2008 Notes were used to repay outstanding debt borrowed under the then bank credit agreement while proceeds of the April 2012 Notes were used to fund business acquisitions.

        On September 22, 2006, the Company, through certain of its wholly-owned subsidiaries, closed an unsecured term credit agreement with a syndicate of banks to facilitate dividend repatriations under section 965 of the American Jobs Creation Act. The term credit agreement, or AJCA, provides for a $65.0 million, five-year term loan amongst four subsidiary borrowers and one subsidiary guarantor. In order to obtain favorable pricing, the Company also provided a parent-company guarantee. The terms and conditions of the agreement are substantially similar to those contained in the ARCA. Principal payments are scheduled to begin June 30, 2007, or earlier at the borrowers discretion. At September 30, 2006, borrowings under this AJCA totaled $65.0 million.

F-36

        The Company also has a $25.0 million unsecured line of credit and a $10.0 million letter of credit line for use outside of the United States.

        The Company also issued promissory notes to certain former shareholders of Maunsell and other acquired companies in connection with those mergers and mortgage debt. The promissory notes of $0.9 million due to the former Oscar Faber shareholders carry fixed and LIBOR-indexed interest rates, which at September 30, 2006, was 4.5%. These promissory notes have maturities ranging from January 2006 to April 2010. The mortgage debt of $1.4 million at September 30, 2005 was assumed when the Company bought out its joint venture partner as co-owner of its Orange, California, facility. The Company had previously recorded its interest as a capitalized lease. The mortgage debt required equal monthly payments of principal and interest at 8.75% through September 2008. This debt was repaid in full upon the sale of the facility in May 2006. See Note 11 for further information.

        The following table presents, in thousands, scheduled maturities of the Company's long-term obligations:

Fiscal Year:
    
2007   $ 14,665
2008     30,805
2009     25,485
2010     20,000
2011     39,500
Thereafter     7,000
   
Total   $ 137,455
   

13. Stock Plans

        Global Stock Program—In 1990, the Company adopted the AECOM Technology Corporation Employee Stock Ownership Plan (the ESOP) covering substantially all permanent U.S. based employees and as of September 30, 1998, all shares in the ESOP had been released to ESOP participants' accounts.

        On October 1, 2000, the Company's Stock Investment Plan, the 401(k) Pension Plan, and the Investment Plan were merged with and into the ESOP; however, individual plan account balances continue to be separately maintained. Also effective October 1, 2000, the Company adopted the AECOM Technology Corporation Global Stock Plans (the Global Plans). The Global Plans provide a vehicle for non-U.S. employees to purchase stock in accordance with AECOM bylaws and local laws. The Global Plans are available to employees under plans in Australia, Hong Kong, New Zealand, Qatar, Singapore, United Arab Emirates and the United Kingdom.

        Effective May 1, 2002 the ESOP component was amended so that it no longer qualified as a stock bonus plan or an employee stock ownership plan but rather as a profit sharing plan. The ESOP was renamed the AECOM Technology Corporation Retirement & Savings Plan (RSP).

        The RSP and the Global Plans comprise AECOM's Global Stock Program, or the GSP.

F-37

        During fiscal 2005 and 2006, the GSP sold to the Company 1,825,634 and 1,628,340 shares of Common Stock for $18.9 million and $20.3 million, respectively. These shares, which were attributable to former employees entitled to distributions under the GSP, were canceled.

        For individuals who no longer qualify to be employees of the Company and whose vested shares have an initial value in excess of $5,000, the Company will repurchase the shares, the majority of which were terminated or retired, ratably over five years at the then current share price. At September 30, 2006, the Company's repurchase obligation covered 8,051,328 Common Shares allocated to former employees by the GSP. The fair value of these shares at September 30, 2006, was $114.3 million included in Redeemable common stock and common stock units.

        Stock Match Program—Effective as of October 3, 1998, the Company implemented a Stock Match Program that provided stock matches on participants' contributions to the Company's Stock Investment Plan and Stock Purchase Plan. Effective October 1, 2002, the Board of Directors approved a new Stock Match Program (18% for common stock purchases and 10% for preferred stock purchases) and allocation of the stock matches quarterly.

        Stock matches are made at the end of each quarter. The expense is based upon the value of the stock at the end of such quarter and is expensed in the period the match is made. For fiscal years ended September 30, 2004, September 30, 2005 and September 30, 2006, stock match expense was $1.8 million, $3.2 million and $14.8 million, respectively.

        Stock Purchase Plan—Effective June 1, 1991, the Company adopted the Stock Purchase Plan to provide an opportunity for eligible employees to continue to invest in the Company when the Company's qualified Investment Plan and/or Stock Investment Plan are no longer available to them due to limitations contained in the U.S. Internal Revenue Code. Under the Stock Purchase Plan, participants are permitted to defer compensation, on a pre-tax basis, for investment in Common Stock Units. These amounts will not be held in trust and would be subject to the general creditors of the Company.

        The number of Common Stock Units issued corresponds to an equal number of shares of Common Stock based on the valuation of Common Stock determined at the next valuation date for Stock Purchase Plan purposes. Effective December 31, 1999, shares of the Company's Common Stock have been valued quarterly and purchases of Common Stock and Common Stock Units are valued at the then most recent valuation.

        When a participant in the Stock Purchase Plan ends employment, the Company will make a single sum payment in whole shares of AECOM Common Stock based on the total number of share units credited to his/her account. These shares will be subject to the buyback provisions under the bylaws of the Company. In the alternative, a participant's Common Stock Units may be converted to a cash book account entry, determined as though the share units were shares of Common Stock and will be redeemed under the same buyback provisions for Common Stock as allowed by the Company's bylaws. During fiscal 2005 and 2006, the Stock Purchase Plan sold to the Company 944,028 and 697,284 shares of Common Stock for $10.3 million and $8.6 million, respectively. These shares, which were attributable to former employees entitled to distributions under the Stock Purchase Plan, were canceled.

        For individuals who no longer qualify to be employees of the Company, and whose vested Common Stock Units have a value at the end of the fiscal year in which such person ceased to qualify

F-38


as an employee in excess of $5,000, the Company will repurchase the Common Stock Units ratably over five or 10 years at the then current share price. At September 30, 2006 the Company's repurchase obligation covered 2,866,544 Common Stock Units allocated to former employees by the Stock Purchase Plan. The fair value of these shares at September 30, 2006 was $40.7 million. The Stock Purchase Plan has been extended indefinitely by the Board of Directors.

        The Company also has a program in which non-employee directors can elect, in lieu of cash compensation, to have all or a portion of their director compensation contributed to the Stock Purchase Plan to acquire Common Stock Units of the Company. A total of 11,259,468 Common Stock Units have been issued to the Stock Purchase Plan as of September 30, 2006.

        Direct Ownership—The Company has shareholders who hold their shares directly, the majority of whom acquired these shares through a merger or acquisition. When a direct shareholder ends employment, these direct ownership shares will be subject to the buyback provisions under the bylaws of the Company.

        During fiscal 2005 and 2006, the direct shareholders sold to the Company 3,155,606 and 1,272,806 shares of Common Stock for $32.9 million and $16.1 million, respectively. These shares, which were attributable to share diversification, the special liquidity program and former employees entitled to distributions under the bylaws, were canceled.

        For individuals who no longer qualify to be employees of the Company, and whose direct ownership shares have an initial value in excess of $5,000, the Company will repurchase the direct ownership shares ratably over five years at the then current share price. At September 30, 2006 the Company's repurchase obligation covered 4,311,670 direct ownership shares allocated to former employees. The fair value of these shares at September 30, 2006 was $61.2 million.

        Stock Incentive Plans—The Company has stock incentive plans under which key employees can purchase up to 19,400,000 shares of Common Stock under stock options or restricted stock awards while non-employee directors can purchase up to 500,000 shares of Common Stock under stock options. Stock options may be granted to employees and non-employee directors at a price not less than the fair market value of the stock on the date of grant, and, for employees, options may be accompanied by stock appreciation rights (SARs). SARs entitle employees to surrender stock options and receive cash or stock in an amount equal to the excess of the market value of the optioned shares over their option price. Unexercised options and any accompanying SARs lapse not later than 10 years after the date of grant (seven years if granted subsequent to March 2000). The stock purchase options are accounted for under the intrinsic value based method under APB25.

        Options granted to non-employee directors vest six months after the date of grant. Restricted stock awards entitle employees to purchase shares at a cost, if any, that may be less than fair market value, to vote such shares and to receive any dividends thereon, but such shares are subject to forfeiture upon completion of service before the restriction period ends. No SARs or restricted stock awards have been granted.

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        During the three years in the period ended September 30, 2006, option activity was as follows:

 
   Number of
Options
   Weighted Average
Exercise Price
Balance, September 30, 2003   9,176,400   $ 5.92
Granted   1,684,000   $ 9.79
Exercised   (1,075,180 ) $ 3.64
Cancelled   (407,220 ) $ 8.08
   
     
Balance, September 30, 2004   9,378,000   $ 6.78
Granted   1,098,000   $ 10.51
Exercised   (1,120,530 ) $ 4.06
Cancelled   (239,320 ) $ 8.25
   
     
Balance, September 30, 2005   9,116,150   $ 7.53
Granted   1,051,090   $ 12.72
Exercised   (1,132,040 ) $ 5.08
Cancelled   (106,560 ) $ 9.47
   
     
Balance, September 30, 2006   8,928,640   $ 8.43
   
     
Exercisable as of September 30, 2004   4,631,230   $ 5.14
   
     
Exercisable as of September 30, 2005   4,345,560   $ 5.94
   
     
Exercisable as of September 30, 2006   8,928,640   $ 8.43
   
     

        The following table summarizes information concerning outstanding and exercisable options as of September 30, 2006:

 
   Options Outstanding
   Options Exercisable
Range of Exercise Prices
   Number
Outstanding
   Weighted Average Remaining Contractual Life (Years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Exercise
Price
$  4.08 - $  4.15   381,750   1.85   $ 4.15   381,750   $ 4.15
$  4.61 - $  4.99   617,750   2.88   $ 4.99   617,750   $ 4.99
$  5.03 - $  5.46   662,450   3.81   $ 5.41   662,450   $ 5.41
$  5.88 - $  6.38   444,500   2.17   $ 6.29   444,500   $ 6.29
$  6.84 - $  8.76   3,096,600   3.28   $ 7.79   3,096,600   $ 7.79
$  8.79 - $10.34   1,687,500   5.01   $ 9.69   1,687,500   $ 9.69
$10.39 - $11.49   1,012,000   6.21   $ 10.53   1,012,000   $ 10.53
$12.41 - $13.84   1,026,090   7.37   $ 12.74   1,026,090   $ 12.74
   
           
     
$  4.08 - $13.84   8,928,640   4.31   $ 8.43   8,928,640   $ 8.43
   
           
     

        The remaining contractual life of options outstanding at September 30, 2006, range from 0.3 to 7.0 years and have a weighted average remaining contractual life of 3.3 years.

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        Effective as of March 2, 1998, the Company established the Executive/Director Loan Program and Stock Repurchase Program to facilitate the exercise of options. Loans, with full recourse, will be for a term of not less than six months or more than 12 months and will bear interest at a rate of six-month LIBOR plus 1%. Upon maturity of a loan, the Company will offer to repurchase the number of shares which, when multiplied by the then-current fair market value of the shares of Common Stock, will equal the principal and accrued interest on the loan and the loan will be retired from the proceeds of the repurchase. The Board of Directors established a revolving loan pool of up to $10.0 million under this program. As of September 30, 2006, loans totaling $1.2 million were outstanding. At September 30, 2006, 8,928,640 shares of Common Stock had been reserved for the exercise of Stock Options.

        The following pro forma information regarding net income has been calculated as if the Company had accounted for its employee stock options and stock purchase plan using the fair value method under SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS 123):

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands, except per share data)

  
Net income as reported   $ 50,436   $ 53,814   $ 53,686  
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects     (1,315 )   (1,303 )   (1,392 )
   
 
 
 
Pro forma net income   $ 49,121   $ 52,511   $ 52,294  
   
 
 
 
Earnings per share:                    
Basic—as reported   $ 0.86   $ 0.93   $ 0.94  
Basic—pro forma   $ 0.83   $ 0.91   $ 0.91  

Diluted—as reported
 
$
0.78
 
$
0.84
 
$
0.74
 
Diluted—pro forma   $ 0.76   $ 0.82   $ 0.72  

        The results of applying the fair value method could have a materially different effect on pro forma net income in future years.

        The fair value of the Company's stock options used to compute pro forma net income and pro forma earnings per share disclosures is the estimated value using the "Minimum Value" method as allowed for non-public companies' option-pricing model. The weighted average fair values per share of options granted in fiscal 2004, 2005 and 2006 are $1.43, $2.17 and $2.96, respectively. The following assumptions were used in completing the model:

 
   Fiscal Year Ended
  
 
   September 30, 2004
   September 30, 2005
   September 30, 2006
  
Dividend yield   0.0 % 0.0 % 0.0 %
Risk-free rate of return, annual   3.39 % 3.93 % 4.52 %
Expected life   6 years   6 years   6 years  

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        Senior Executive Equity Investment Plan—Effective as of March 2, 1998, the Company established the Senior Executive Equity Investment Program (SEEIP) to encourage senior executives, primarily its executive officers, to increase their ownership interests in the Company. Executives who qualify for this program are extended a full recourse, unsecured loan, which bears a fixed interest rate approximating the most recent placement of the Company's long-term debt. The principal and accrued interest on the loan will be due upon the sale of the Common Stock acquired under this program. If an executive terminates employment with AECOM prior to normal retirement, the principal and accrued interest will become due and payable. The Board of Directors has established a loan pool of up to $30.0 million to fund this program. As of September 30, 2006, loans totaling $26.7 million (plus accrued interest of $9.9 million) with an average interest rate of 6% had been extended under the Senior Executive Equity Investment Program. The Company recorded interest income of $1.6 million and $2.0 million in fiscal years 2005 and 2006, respectively. Common Stock purchased under this program was eligible for a Company stock match and is fully vested.

        During fiscal years ending September 30, 2005 and 2006, the Company awarded performance unit awards under its Performance Earnings Program (PEP) and had accrued approximately $12.0 million relating to the PEP at September 30, 2006.

14. Redeemable Common and Preferred Stock and Stock Units

        Since Company securities are not freely tradable, the Company implemented a program to repurchase such securities from former employees by means of a five-year interest-bearing note. Alternatively, the former employee may elect to sell, in equal installments, his or her (a) shares of stock over five or nine years or (b) stock units over five or ten years.

        The repurchase obligations for redeemable common stock and stock units at September 30, 2006 are based on a stock and unit price of $14.20 per share, as determined by an independent valuation firm. The repurchase obligations for redeemable preferred stock and stock units at September 30, 2006 are based on the liquidation preference of $102.50. Repurchase obligations for stock and stock units over the next five years and thereafter where redemption dates have been determined, as well as where the redemption dates have not been determined, are as follows:

Repurchase Date:
   Shares/Units
   Carrying
Value
(000's)
  
December 2006   3,900,986   $ 55,394  
December 2007   3,400,298     48,284  
December 2008   2,994,316     42,519  
December 2009   2,680,292     38,060  
December 2010   2,296,754     32,614  
Thereafter   54,286     771  
   
 
 
    15,326,932     217,642  
Redemption date not determined   42,534,874     608,959  
   
 
 
Total   57,861,806     826,601  
Less: Share repurchase liability   (3,900,986 )   (55,394 )
   
 
 
Redeemable common and preferred stock and stock units   53,960,820   $ 771,207  
   
 
 

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        In accordance with Emerging Issues Task Force D-98 "Classification and Measurement of Redeemable Securities," since the redemption of the Company's common and preferred stock and stock units is not solely within the control of the Company, such amounts are classified outside of permanent stockholders' equity. For shares put back to the Company upon termination of employment, the redemption feature is not mandatory since the level of repurchases is contingently redeemable by the Company (whether with cash or a note) subject to the Company's election and limitations on available liquidity governed by debt agreements and covenant requirements. Therefore, the shares are not considered to be mandatorily redeemable under SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity." When redemptions are no longer contingent, related amounts are reflected as a liability.

15. Stockholders' Equity

        Preferred Stock—The Restated Certificate of Incorporation of the Company authorizes the issuance of 8,000,000 shares of Preferred Stock, par value $.01 per share (the Preferred Stock). The holders of Preferred Stock are generally entitled to one vote per share on all matters to be voted on by the Company's stockholders and will vote as one class with the Common Stock.

        Convertible Preferred Stock—Convertible Preferred Stock is limited to an aggregate of 2,500,000 shares with a par value and liquidation preference of $100 per share. Holders of the Convertible Preferred Stock are entitled to receive dividends payable in additional shares of Convertible Preferred Stock at the Applicable Rate determined as set forth below. Dividends on the Convertible Preferred Stock are payable quarterly on January 1, April 1, July 1, and October 1 of each year.

        The Applicable Rate will be set annually by the independent appraiser engaged by the Trustee of AECOM Common Stock in the Retirement & Savings Plan at a level that it determines is necessary for the fair value of the Convertible Preferred Stock to be equal to its par value.

        After a share of Convertible Preferred Stock has been outstanding for at least three years, the Company may redeem such Convertible Preferred Stock at the Company's election, in whole or in part, upon not less than 30 or more than 60 days' written notice. The redemption price shall be equal to 102.5% of the liquidation preference of the share of Convertible Preferred Stock to be redeemed, plus the payment of any accrued and unpaid dividends to the redemption date. In any event, at such time as a holder of Convertible Preferred Stock no longer meets the qualifications to be a holder of Employee Stock, the Convertible Preferred Stock held by such holder shall be repurchased by the Company.

        If the Convertible Preferred Stock has been held at least one year, on each January 1, April 1, July 1, and October 1, or a Preferred Conversion Date, the holder of shares of Convertible Preferred Stock may convert some or all of the shares of Convertible Preferred Stock held into shares of the Company's Common Stock. The number of shares of the Company's Common Stock to be received upon conversion shall be determined by dividing (i) the aggregate liquidation preferences and accrued and unpaid dividends to the applicable Preferred Conversion Date of the shares of Convertible Preferred Stock to be converted, by (ii) the per share price of the Company's Common Stock on the applicable Preferred Conversion Date.

        In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Convertible Preferred Stock are entitled to receive out of assets of the Company available for distribution to stockholders, before any distribution of assets is made to holders

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of the Company's Common Stock or of any other shares of stock of the Company ranking as to such a distribution junior to the shares of Convertible Preferred Stock, liquidating distributions in the amount of $100 per share plus accrued and unpaid dividends. After payment of such liquidating distributions, the holders of shares of Convertible Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company.

        Except as expressly required by applicable law, the holders of the Convertible Preferred Stock will be entitled to one vote per share.

        If the equivalent of six quarterly dividends payable on the Convertible Preferred Stock are in arrears, the number of directors of the Company will be increased by two and the holders of Convertible Preferred Stock, voting as a class with the holders of shares of any one or more other series of preferred stock ranking on a parity with the Convertible Preferred Stock as to payment of dividends and the distribution of assets and upon which like voting rights have been conferred and are exercisable, will be entitled to elect two directors to fill such vacancies. Such right to elect two additional directors shall continue until all dividends in arrears have been paid or declared and set apart for payment. Each director elected by the holders of shares of the Convertible Preferred Stock and all other classes of preferred stock whose holders are entitled to vote shall continue to serve as such director for the full term for which he or she shall have been elected, notwithstanding that prior to the end of such term such default shall cease to exist.

        Class B and Class C Stock—Effective as of September 10, 1999, the Company established a new class of Preferred Stock, Class B Stock, and issued the shares to U.S. Trust Company, N.A., as Trustee of the AECOM Technology Corporation Supplemental Trust. This Class B Stock has been issued to secure, in part, the Company's obligation under the Stock Purchase Plan, although the stock is subject to the claims of the Company's creditors. Only the Trustee is eligible to hold this stock. The participants in the Stock Purchase Plan have no ownership interest in this stock. The shares carry one vote per share and are voted by the Trustee in its sole discretion. Upon distribution or reduction of Common Stock Units by the Stock Purchase Plan, the corresponding number of shares of Class B Stock will be returned by the Trustee to the Company for cancellation. Upon issuance of additional Common Stock Units to the Stock Purchase Plan, a like number of shares of Class B Stock will be issued to the Trustee. The Class B Stock has a par value of $.01 per share, carries with it a liquidation preference and redemption value of $.01 per share, and has no right to any dividend.

        On April 15, 2003, the Company amended its Certificate of Incorporation to authorize the issuance of Class C Stock. The Class C Stock has no par value, each share is entitled to 100,000 votes on all matters to be voted on by the Company's shareholders, has no right to any dividend and enjoys a liquidation and redemption value of $1.00 per share.

        Both the Class B Stock and the Class C Stock exist as part of the Company's Stock Purchase Plan, or SPP. Until the Class B authorized share limit is reached for each Common Stock Unit acquired under the SPP, a share of Class B Stock was issued to the trustee of the Company's stock plan (the only entity eligible to hold such stock) and once the Class B authorized share limit is reached, for each 100,000 Common Stock Units acquired under the SPP, a share of Class C Stock will be issued to the trustee. Conversely, upon cancellation of (i) a common stock unit or (ii) 100,000 common stock units, the trustee will return a share of Class B Stock or one share of Class C Stock, respectively, to the

F-44


Company for cancellation. The trustee has sole discretion as how it votes each share of Class B Stock and Class C Stock.

        Pursuant to an exchange agreement dated January 14, 2004, U.S. Trust exchanged the 10.0 million shares of Class B preferred stock held by it in exchange for 100 shares of Class C preferred stock. Shortly after such exchange, the Company deposited $49,950, representing the additional liquidation preference of the Class B preferred stock tendered by U.S. Trust over the liquidation preference of the Class C preferred stock received by it, into the Supplemental Trust in respect of the common stock units. Thereafter, a certificate of elimination was filed by the Company with the Delaware Secretary of State eliminating the Class B preferred stock and the Company withdrew $49,950 from the Supplemental Trust in accordance with the trust rules. This has the effect of restoring Class B shares exchanged to the status of authorized but unissued shares of preferred stock, which can be issued by the Company in the future. The only voting stock associated with our SPP units going forward will be the Class C stock.

        Redeemable Preferred Stock, Class D—Prior to February 9, 2006, the Company had outstanding Class D convertible preferred stock which was limited to an aggregate of 120,000 shares with a par value of $0.01 per share and a liquidation preference of $1,000 per share. Holders of the convertible preferred stock were entitled to receive dividends payable at the rate of 7% per annum on the liquidation preference either in cash or in additional shares of Class D stock, at the Company's election; provided, however, that so long as a Default Rate Event (as defined below) had occurred and continued, the dividend rate would increase to 10% per annum. The terms of the Class D stock prohibited the Company from paying cash dividends in respect of its common stock until the Company consummated an Initial Public Offering (IPO). "Default Rate Event" means (i) the Company's failure to redeem all the outstanding shares of the Class D stock on June 25, 2010; (ii) the Company's failure to meet its obligations upon a liquidation event; and (iii) the Company's material breach of the special class voting rights provisions. Dividends on the Class D stock were payable quarterly on last day of February, May, August, and November of each year. On February 9, 2006, the Company redeemed all of the outstanding shares of the Class D convertible preferred stock and repurchased all of the outstanding warrants held by the holders of the Class D convertible preferred stock to purchase its common stock.

        Class E Stock—The Class E preferred stock is limited to an aggregate of 20 shares, has no par value, and has a liquidation preference of $1.00 per share. These shares may only be issued to and held by the Trustee of the AECOM Technology Corporation Supplemental Trust and are not entitled to receive any dividends. These shares have limited voting rights primarily involving voluntary liquidation, dissolution or winding up the affairs of the Company; sale of all or substantially all of the properties of the Company; change in beneficial ownership of more than fifty percent of the voting stock of the Company; and the issuance on sale of stock in an initial public offering in which the Company's common stock is listed on the New York Stock Exchange or the NASDAQ National Market. In such cases, each share is entitled 100,000 votes per share on all matters voted on by holders of Class E stock. The Company, with notice, may redeem Class E stock by paying the liquidation preference. The holders of Class E stock have no conversion rights.

        All shares of Class E stock redeemed or repurchased by the Corporation shall be restored to the status of authorized but un-issued shares of Preferred Stock, without designation as to series.

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        Dividends.    The Class F and Class G convertible preferred stock do not receive a stated dividend. If, however, we should declare or pay dividends on our common stock, then holders of our Class F and Class G convertible preferred stock will be entitled to receive dividends equal to the amount that would have been payable had the Class F and Class G preferred shares been converted into common stock immediately prior to the record date for such dividend.

        Mandatory Redemption.    We must redeem all outstanding shares of the Class F and Class G convertible preferred stock upon the earlier of (a) February 9, 2012 or (b) the sale of substantially all of our assets. The redemption price will equal the greater of (i) the liquidation preference of such share of Class F or Class G preferred stock, which is $2,500 per share, and (ii) (A) if the redemption occurs on the maturity date of February 9, 2012, the fair market value of the shares of common stock into which such shares of Class F and Class G would have converted on February 8, 2012 or (B) if the redemption occurs as a result of a sale of substantially all of our assets, the amount (on an as converted to common stock basis) that each share of common stock would be entitled to receive on the date of such sale of substantially all of our assets.

        Conversion.    Each share of the Class F and Class G convertible preferred stock is convertible, at the election of the holder thereof, into our common stock at an initial conversion rate of approximately 199.4 shares of common stock for each share of Class F and G preferred stock. The conversion rate is determined by dividing the liquidation preference of $2,500 per share by the initial conversion price of $12.54 per share. The conversion rate and conversion price are subject to certain anti-dilution adjustments, based on future issuances of our common stock (other than issuances at fair market value to employees, directors, consultants participating in our stock plans or shareholders of a firm we acquire in the ordinary course of business).

        In addition the Class F and Class G convertible preferred stock will automatically be converted into our common stock (A) if our common stock is listed on the New York Stock Exchange, American Stock Exchange or NASDAQ in connection with a public offering with aggregate gross proceeds to us of at least $50,000,000 or (B) the affirmative written election of the holders of the Class F and/or Class G preferred stock, as applicable.

        Liquidation Rights.    In the event of our voluntary or involuntary liquidation, dissolution or winding up, or a change of control, the holders of shares of the Class F and Class G convertible preferred stock are entitled to receive, out of our assets available for distribution to stockholders before any distribution of assets or any payments are made to holders of our common stock or of any other shares of our stock ranking as to such a distribution junior to the shares of Class F and Class G convertible preferred stock, liquidating distributions in an amount equal to $2,500 per share. After payment of such liquidating distributions, the holders of shares of Class F and Class G convertible preferred stock will not be entitled to any further participation in any distribution of assets by us.

        Voting Rights.    The Class F and Class G convertible preferred stock vote together with our common stock as a single class on all matters voted on by holders of our common stock. The shares so voted will be the number of shares of our common stock into which such Class F and Class G convertible preferred stock is then convertible. In addition, the approval of the holders of a majority of our Class F and Class G convertible preferred stock, each voting as a separate class, as applicable will

F-46


be required for certain actions by the Company that materially affect the Class F or Class G convertible preferred stock.

        Designation of Board Members.    The holders of a majority of our Class F convertible preferred stock and the holders of a majority of our Class G convertible preferred stock are each entitled to appoint one member to our board of directors. Each group of holders will maintain this board appointment right so long as it continues to hold Class F and Class G convertible preferred stock, as applicable, with a liquidation preference equal to at least 50% of the aggregate liquidation preference of the Class F or Class G shares, as applicable, initially purchased by it.

        Registration Rights.    The holders of the Class F and Class G convertible preferred stock have certain registration rights that may result in such holders being able to sell their shares of common stock in a registered offering after an initial public offering of our common stock before other holders of our common stock.

        Preemptive Rights.    If we issue shares of common stock or securities convertible or exercisable into common stock at a price per share below fair market value, then the holders of Class F and G convertible preferred stock will have a preemptive right to purchase a pro rata share of such new securities, subject to customary exceptions including an exception for shares issued pursuant to our stock plans.

        Common and Preferred Stock Units—Common and Preferred Stock Units (Stock Units) under the Stock Purchase Plan may only be redeemed for Common Stock. The holders of Stock Units are not entitled to vote but are entitled to dividends if dividends are declared on Common Stock. In the event of the liquidation of the Company, holders of the Stock Units are entitled to no right greater than holders of Common Stock.

        Stock Warrants—The Company issued 1,000,000 warrants in conjunction with the sale of Class D convertible preferred stock. The warrants entitled the holders to purchase Common Stock of the Company at $8.37 per share, in whole or in part, at any time and from time to time on or before the expiration date of the Warrants on June 24, 2010, as long as all the Class D stock had been redeemed. If all the Class D stock had not been redeemed, then the proportional amount of Warrants associated with the unredeemed Class D stock would have expired when all the Class D convertible preferred stock had been redeemed, but in no event later than June 24, 2011. Until exercise of the Warrants, the holders of the Warrants did not have nor exercise any rights as a stockholder of the Company, either at law or in equity. The Warrants were valued at issuance using the Black-Scholes Warrant pricing model. On February 9, 2006, the Company repurchased 100% of the outstanding warrants.

16. Earnings Per Share

        Basic EPS excludes dilution and is computed by dividing the income available to common stock and common stock unit holders by the weighted average number of shares and units outstanding for the period. Diluted EPS is computed by dividing income available to common stock and common stock unit holders by the weighted average number of shares and units outstanding and the weighted average potential common shares. Potential common shares include the dilutive effects of outstanding stock options, stock match shares and units, preferred stock and warrants. The issuance of stock match shares and units is reflected in basic EPS on the last day of the fiscal quarter when the actual number of

F-47


shares and units is determined based on the quarter-end price per share and in diluted EPS when the match is accrued based on the then current price per share.

        The following table sets forth a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands, except per share data)

  
Numerator for basic earnings per share:                    
  Net income   $ 50,436   $ 53,814   $ 53,686  
  Preferred stock dividends     (5,443 )   (5,506 )   (2,205 )
   
 
 
 
  Net income available for common stockholders   $ 44,993   $ 48,308   $ 51,481  
   
 
 
 
Denominator for basic earnings per share:                    
  Weighted average shares     52,600     51,880     54,856  
   
 
 
 
Numerator for diluted earnings per share:                    
  Net income   $ 50,436   $ 53,814   $ 53,686  
   
 
 
 
Denominator for diluted earnings per share:                    
  Denominator for basic earnings per share     52,600     51,880     54,856  
  Potential common shares:                    
    Preferred stock, Class D     8,960     8,960     3,164  
    Preferred stock, Class F and Class G     —     —     11,926  
    Stock options     2,206     2,484     2,158  
    Preferred stock, other     276     342     368  
    Stock matches     32     28     40  
    Stock units     22     30     28  
    Stock warrants     158     254     118  
   
 
 
 
  Denominator for diluted earnings per share     64,254     63,978     72,658  
   
 
 
 
Earnings per share:                    
  Basic   $ 0.86   $ 0.93   $ 0.94  
   
 
 
 
  Diluted   $ 0.78   $ 0.84   $ 0.74  
   
 
 
 

        For the fiscal years ended September 30, 2004, September 30, 2005 and September 30, 2006, no options were excluded from the calculation of potential common shares because their exercise prices exceeded the average market price for that period.

17. Foreign Currency

        The Company uses forward exchange contracts from time to time to mitigate foreign currency risk. The Company limits exposure to foreign currency fluctuations in most of its contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result of this natural hedge, the Company generally does not need to hedge foreign currency cash flows for contract work performed. The functional currency of all significant foreign operations is the respective local currency.

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18. Commitments and Contingencies

        The Company is a defendant in various lawsuits arising in the normal course of business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the financial position of the Company.

        The Company is contingently liable in the amount of approximately $43.6 million under standby letters of credit issued primarily in connection with general and professional liability insurance programs and for payment and performance guarantees relating to domestic and overseas contracts. In addition, in some instances the Company guarantees that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, the Company may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

        Under joint venture arrangements, if a partner is financially unable to complete its share of the contract, the other partner(s) will be required to complete those activities. The Company generally only enters into joint venture arrangements with partners who are reputable, financially sound and who carry appropriate levels of surety bonds for the project in order to adequately assure completion of their assignments. The Company is a partner in certain joint ventures where the joint venture has contracted with sub-consultants for certain specialized professional services. The joint venture, or the Company to the extent that the joint venture partner (s) are unable to fulfill their responsibilities, is liable to the third-party customer for performance of the sub-consultant and would be liable to the sub-consultant if the third-party customer failed to make payments due the joint venture for sub-consultant services.

        Prior to fiscal 2002 the Company had Performance Unit Plans (PUPs) under which the Board of Directors granted performance unit awards to executive officers and key employees of AECOM and its subsidiaries. In the first quarter of fiscal 2002, the Company terminated the PUPs and accrued and fully vested all participants, as a group, at the projected level of each participant's award. At September 30, 2005, the Company had awards outstanding under the PUP in the amount of $3.0 million which was paid prior to September 30, 2006.

19. Reportable Segments and Geographic Information

        The Company's management has organized its operations into two reportable segments: Professional Technical Services and Management Support Services. This segmentation corresponds to how the Company manages its business as well as the underlying characteristics of its markets.

        Management internally analyzes the results of its operations using several non-GAAP measures. A significant portion of the Company's revenue relates to services provided by subcontractors and other non-employees that it categorizes as other direct costs. Those pass-through costs are typically paid to service providers upon our receipt of payment from the client. Other direct costs are segregated from cost of revenue resulting in revenue, net of other direct costs which is a measure of work performed by AECOM employees. The Company has included information on revenue, net of other direct costs. In addition, compensation expense, included in both cost of revenue and general and administrative expense, associated with the non-cash stock matches, is segregated and shown below general and administrative expense as it is considered by management to be a function of the level of stock purchased by employees and not a cost of work performed.

F-49

        The following tables set forth summarized financial information concerning the Company's reportable segments:

Reportable Segments:
   Professional
Technical
Services
   Management
Support
Services
   Total
  
 
   (in thousands)

  
Fiscal Year Ended September 30, 2004:                    
Revenue   $ 1,777,718   $ 232,143   $ 2,009,861  
Revenue, net of other direct costs     1,198,354     35,785     1,234,139  
Gross profit     561,392     6,386     567,778  
Gross profit as a % of revenue     31.6 %   2.8 %   28.2 %
Gross profit as a % of revenue, net of other direct costs     46.8 %   17.8 %   46.0 %
Equity in earnings of joint ventures     2,517     —     2,517  
General and administrative expenses     460,331     5,636     465,967  
Segment income from operations     100,270     1,944     102,214  
Segment assets     910,554     69,352     979,906  

Fiscal Year Ended September 30, 2005:
 
 
 
 
 
 
 
 
 
 
Revenue   $ 2,082,618   $ 309,053   $ 2,391,671  
Revenue, net of other direct costs     1,415,450     42,977     1,458,427  
Gross profit     662,219     13,967     676,186  
Gross profit as a % of revenue     31.8 %   4.5 %   28.3 %
Gross profit as a % of revenue, net of other direct costs     46.8 %   32.5 %   46.4 %
Equity in earnings of joint ventures     2,352     —     2,352  
General and administrative expenses     555,642     8,129     563,771  
Segment income from operations     106,228     5,838     112,066  
Segment assets     1,257,093     87,685     1,344,778  

Fiscal Year Ended September 30, 2006:
 
 
 
 
 
 
 
 
 
 
Revenue   $ 2,772,833   $ 647,188   $ 3,420,021  
Revenue, net of other direct costs     1,787,078     89,794     1,876,872  
Gross profit     872,305     38,873     911,178  
Gross profit as a % of revenue     31.5 %   6.0 %   26.6 %
Gross profit as a % of revenue, net of other direct costs     48.8 %   43.3 %   48.5 %
Equity in earnings of joint ventures     2,958     4,942     7,900  
General and administrative expenses     745,237     20,886     766,123  
Segment income from operations     130,026     22,929     152,955  
Segment assets     1,601,634     111,726     1,713,360  

F-50

Reconciliations:

 
   Fiscal Year Ended
  
 
   September 30,
2004
   September 30,
2005
   September 30,
2006
  
 
   (in thousands)

  
Revenue:                    
Revenue from reportable segments   $ 2,009,861   $ 2,391,671   $ 3,420,021  
Other revenue     2,114     3,669     1,471  
   
 
 
 
  Total consolidated revenue   $ 2,011,975   $ 2,395,340   $ 3,421,492  
   
 
 
 
Gross profit:                    
Gross profit from reportable segments   $ 567,778   $ 676,186   $ 911,178  
Other contributions to gross profit     778     1,291     (5,370 )
   
 
 
 
  Total consolidated gross profit   $ 568,556   $ 677,477   $ 905,808  
   
 
 
 
General and administrative expenses:                    
G&A expenses from reportable segments   $ 465,967   $ 563,771   $ 766,123  
Unallocated corporate general and administrative expenses     18,479     17,758     42,830  
   
 
 
 
  Total consolidated general and administrative expenses   $ 484,446   $ 581,529   $ 808,953  
   
 
 
 
Income from operations:                    
Income from operations from reportable segments   $ 102,214   $ 112,066   $ 152,955  
Expenses not allocated to reportable segments     (15,587 )   (13,766 )   (49,546 )
   
 
 
 
  Total consolidated income from operations   $ 86,627   $ 98,300   $ 103,409  
   
 
 
 
Total assets:                    
Total assets from reportable segments   $ 979,906   $ 1,344,778   $ 1,713,360  
Total assets not allocated to segments and eliminations     141,973     80,146     112,414  
   
 
 
 
  Total consolidated assets   $ 1,121,879   $ 1,424,924   $ 1,825,774  
   
 
 
 

Geographic Information, by location of client:

 
   Fiscal Year Ended
 
   September 30, 2004
   September 30, 2005
   September 30, 2006
 
   Revenue
   Long-Lived
Assets
   Revenue
   Long-Lived
Assets
   Revenue
   Long-Lived
Assets
 
   (in thousands)
United States   $ 1,492,953   $ 189,809   $ 1,680,452   $ 326,168   $ 2,497,769   $ 377,375
Foreign Countries     519,022     192,754     714,888     220,655     923,723     256,075
   
 
 
 
 
 
Total   $ 2,011,975   $ 382,563   $ 2,395,340   $ 546,823   $ 3,421,492   $ 633,450
   
 
 
 
 
 

F-51

20. Major Clients

        Approximately, 19%, 22% and 28% of the Company's revenue was derived through direct contracts with agencies of the U.S. Federal Government in the years ended September 30, 2004, 2005, and 2006, respectively. One of these contracts accounted for approximately 9% of the Company's revenue in each of the years ended September 30, 2004, 2005, and 2006. No single client accounted for more than 10% of the Company's revenue.

21. Quarterly Financial Information—Unaudited

        In the opinion of management, the following unaudited quarterly data for the fiscal years ended September 30, 2005 and September 30, 2006 reflect all adjustments necessary for a fair statement of the results of operations. All such adjustments are of a normal recurring nature.

Fiscal Year 2005:
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
 
   (in thousands, except per share data)
Revenue   $ 531,064   $ 579,507   $ 624,931   $ 659,838
Cost of revenue     381,298     412,234     451,435     472,896
   
 
 
 
Gross profit     149,766     167,273     173,496     186,942
Equity in earnings of joint ventures     763     223     130     1,236
General and administrative expenses     130,090     146,695     149,559     155,185
   
 
 
 
Income from operations     20,439     20,801     24,067     32,993
   
 
 
 
Minority interest in share of earnings     1,465     2,504     2,329     2,155
Interest expense, net     1,763     2,286     1,366     1,639
   
 
 
 
Income before income tax expense     17,211     16,011     20,372     29,199
Income tax expense     6,023     5,604     7,130     10,222
   
 
 
 
Net income   $ 11,188   $ 10,407   $ 13,242   $ 18,977
   
 
 
 
Net income allocation:                        
  Preferred stock dividend   $ 1,373   $ 1,373   $ 1,378   $ 1,382
  Net income available to common stockholders     9,815     9,034     11,864     17,595
   
 
 
 
  Net income   $ 11,188   $ 10,407   $ 13,242   $ 18,977
   
 
 
 
  Basic earnings per share   $ 0.18   $ 0.18   $ 0.23   $ 0.34
   
 
 
 
  Diluted earnings per share   $ 0.17   $ 0.17   $ 0.21   $ 0.29
   
 
 
 
Weighted average common shares outstanding:                        
  Basic     53,670     49,644     51,692     52,518
  Diluted     65,170     61,418     63,528     64,348

F-52

Fiscal Year 2006:
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
 
   (in thousands, except per share data)
Revenue   $ 746,797   $ 858,930   $ 911,486   $ 904,279
Cost of revenue     546,758     629,907     678,581     660,438
   
 
 
 
Gross profit     200,039     229,023     232,905     243,841
Equity in earnings of joint ventures     1,670     893     1,554     2,437
General and administrative expenses     176,983     204,838     209,340     217,792
   
 
 
 
Income from operations     24,726     25,078     25,119     28,486
   
 
 
 
Minority interest in share of earnings     1,951     3,530     3,022     5,421
Interest expense, net     3,723     4,067     2,528     258
   
 
 
 
Income before income tax expense     19,052     17,481     19,569     22,807
Income tax expense     6,097     5,594     6,262     7,270
   
 
 
 
Net income   $ 12,955   $ 11,887   $ 13,307   $ 15,537
   
 
 
 
Net income allocation:                        
  Preferred stock dividend   $ 1,384   $ 663   $ 78   $ 80
  Net income available to common stockholders     11,571     11,224     13,229     15,457
   
 
 
 
  Net income   $ 12,955   $ 11,887   $ 13,307   $ 15,537
   
 
 
 
  Basic earnings per share   $ 0.22   $ 0.21   $ 0.24   $ 0.27
   
 
 
 
  Diluted earnings per share   $ 0.20   $ 0.17   $ 0.18   $ 0.20
   
 
 
 
Weighted average common shares outstanding:                        
  Basic     53,288     53,676     55,762     56,700
  Diluted     65,224     70,306     73,882     78,036

22. Related Party Transactions

        In conjunction with an acquisition made in fiscal 2005, the Company assumed an operating lease in which the lessor is a company affiliated with the former shareholder of the acquired entity, who now serves as the President of one of the Company's operating subsidiaries. Remaining amounts payable under the lease, which expires in August 2015, are $6.2 million. In the fiscal years ended September 30, 2005 and 2006, lease payments to this related party totaled $0.0 million and $0.7 million, respectively.

23. Litigation and Legal Proceedings

        The Company is subject to certain claims and lawsuits filed against engineering and technical services firms. From time to time, the Company is a defendant in lawsuits involving its alleged professional liability, personal injury, contract and other disputes arising in the normal course of business. To some extent, these matters are covered by insurance, and in other cases, the Company is self-insured.

24. Subsequent Events

        In December 2006, the Company sold its equity investment in a U.K. based company for approximately 7.5 million GBP, or approximately $14.7 million (Unaudited).

        In April 2007, the Company's board of directors approved a two-for-one stock split, effected as a 100-percent dividend on the Company's common stock, effective the earlier of three days prior to the date of closing of the initial public offering or May 31, 2007. All share and per share amounts presented have been adjusted accordingly, on a retroactive basis, to reflect this stock dividend.

F-53


AECOM Technology Corporation

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 
   September 30, 2006
   December 31, 2006
  
 
    
   (Unaudited)

  
ASSETS              
CURRENT ASSETS:              
  Cash and cash equivalents   $ 118,427   $ 107,377  
  Cash in consolidated joint ventures     9,393     30,347  
  Short-term investments     50     50  
   
 
 
  Total cash and cash equivalents     127,870     137,774  
 
Accounts receivable—net
 
 
913,178
 
 
928,404
 
  Prepaid expenses and other current assets     52,827     58,529  
  Deferred tax asset     —     121  
   
 
 
    TOTAL CURRENT ASSETS     1,093,875     1,124,828  
   
 
 
PROPERTY AND EQUIPMENT:              
  Equipment, furniture and fixtures     85,201     85,570  
  Leasehold improvements     31,539     36,677  
   
 
 
    Total     116,740     122,247  
  Accumulated depreciation and amortization     (26,417 )   (27,825 )
   
 
 
    PROPERTY AND EQUIPMENT—NET     90,323     94,422  
   
 
 
DEFERRED INCOME TAXES     98,449     105,528  
DEFERRED LOAN COSTS     1,444     1,424  
INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES     19,943     21,389  
GOODWILL     466,508     472,178  
INTANGIBLE AND OTHER ASSETS—NET     18,168     17,414  
OTHER NON-CURRENT ASSETS     37,064     41,447  
   
 
 
TOTAL ASSETS   $ 1,825,774   $ 1,878,630  
   
 
 

LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
 
 
 
 
 
CURRENT LIABILITIES:              
  Bank overdraft   $ 2,716   $ 5,895  
  Accounts payable and other current liabilities     265,192     270,203  
  Accrued expenses     365,548     357,228  
  Billings in excess of costs on uncompleted contracts     143,283     167,466  
  Income taxes payable     35,646     51,794  
  Deferred tax liability—net     12,824     13,267  
  Share purchase liability     55,394     57,253  
  Current portion of long-term obligations     11,949     23,626  
   
 
 
    TOTAL CURRENT LIABILITIES     892,552     946,732  

OTHER LONG-TERM LIABILITIES
 
 
112,970
 
 
117,071
 

LONG-TERM OBLIGATIONS
 
 
122,790
 
 
104,115
 

COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
MINORITY INTEREST     18,701     17,909  

REDEEMABLE COMMON AND PREFERRED STOCK AND STOCK UNITS
 
 
771,207
 
 
818,901
 

NOTES RECEIVABLE FROM STOCKHOLDERS
 
 
(36,552
)
 
(36,607
)

REDEEMABLE PREFERRED STOCK, Class F—authorized, 200,000, issued and outstanding, 47,000 as of September 30, 2006 and December 31, 2006, $2,500 liquidation preference value
 
 
117,500
 
 
117,500
 
REDEEMABLE PREFERRED STOCK, Class G—authorized, 200,000, issued and outstanding, 47,000 as of September 30, 2006 and December 31, 2006, $2,500 liquidation preference value     117,500     117,500  

STOCKHOLDERS' DEFICIT:
 
 
 
 
 
 
 
  Additional paid-in capital     (254,225 )   (290,797 )
  Accumulated other comprehensive loss     (36,669 )   (33,694 )
  Retained earnings     —     —  
   
 
 
TOTAL STOCKHOLDERS' DEFICIT     (290,894 )   (324,491 )
   
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $ 1,825,774   $ 1,878,630  
   
 
 

See accompanying Notes to Condensed Consolidated Financial Statements.

F-54


AECOM Technology Corporation

Condensed Consolidated Statements of Income

(unaudited—in thousands, except per share data)

 
   Three Months Ended
December 31,
 
   2005
   2006
Revenue   $ 746,797   $ 938,549
Cost of revenue     546,758     690,130
   
 
  Gross profit     200,039     248,419
Equity in earnings of joint ventures     1,670     1,417
General and administrative expenses     176,983     219,828
   
 
  Income from operations     24,726     30,008

Minority interest in share of earnings
 
 
1,951
 
 
1,586
Gain on the sale of equity investment     —     11,286
Interest expense—net     3,723     1,075
   
 
  Income before income tax expense     19,052     38,633
Income tax expense     6,097     13,113
   
 
Net income   $ 12,955   $ 25,520
   
 
Net income allocation:            
  Preferred stock dividend   $ 1,384   $ 29
  Net income available for common stockholders     11,571     25,491
   
 
  Net income   $ 12,955   $ 25,520
   
 
Earnings per share:            
  Basic   $ 0.22   $ 0.44
   
 
  Diluted   $ 0.20   $ 0.32
   
 
Weighted average common shares outstanding:            
  Basic     53,288     57,600
  Diluted     65,244     79,036

See accompanying Notes to Condensed Consolidated Financial Statements.

F-55


AECOM Technology Corporation

Condensed Consolidated Statements of Comprehensive Income

(unaudited—in thousands)

 
   Three Months Ended
December 31,
 
   2005
   2006
Net income   $ 12,955   $ 25,520
   
 
Other comprehensive income:            
Foreign currency translation adjustments     (1,725 )   2,975
   
 
Other comprehensive income     (1,725 )   2,975
   
 
Comprehensive income   $ 11,230   $ 28,495
   
 

See accompanying Notes to Condensed Consolidated Financial Statements.

F-56


AECOM Technology Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited—in thousands)

 
   Three Months Ended
December 31,
  
 
   2005
   2006
  
CASH FLOWS FROM OPERATING ACTIVITIES:              
Net income   $ 12,955   $ 25,520  
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:              
  Depreciation and amortization     9,370     6,970  
  Equity in earnings of unconsolidated joint ventures     (1,670 )   (1,417 )
  Distribution of earnings from unconsolidated affiliates     281     108  
  Stock match and other non-cash stock compensation     1,379     7,048  
  Interest income on notes from stockholders     (502 )   (532 )
  Foreign currency translation     (2,588 )   (954 )
  Gain on sale of equity investment     —     (11,286 )

Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
 
 
 
 
  Accounts receivable     (51,000 )   (8,626 )
  Prepaid expenses and other assets     10,150     (10,337 )
  Accounts payable     9,526     3,711  
  Accrued expenses     (11,284 )   (10,520 )
  Billings in excess of costs on uncompleted contracts     (1,575 )   24,183  
  Income taxes payable     (371 )   16,148  
  Other long-term obligations     6,753     3,652  
   
 
 
    Net cash (used in)/provided by operating activities     (18,576 )   43,668  
   
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Payments for business acquisitions, net of cash acquired     (34,089 )   (6,200 )
  Proceeds from the sale of equity investment     —     14,683  
  Net investments in unconsolidated affiliates     95     (3,034 )
  Payments for capital expenditures     (7,316 )   (10,093 )
  Proceeds on sale of property and equipment     429     —  
   
 
 
    Net cash used in investing activities     (40,881 )   (4,644 )
   
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Proceeds from borrowings under credit agreements     112,209     2,681  
  Repayments of borrowings under other long-term obligations     (7,092 )   (7,000 )
  Proceeds from issuance of common stock and preferred stock     10,266     20,210  
  Proceeds from issuance of stock upon exercise of stock options     179     521  
  Excess tax benefits from the exercise of stock options     —     178  
  Repayment of notes receivable from stockholders     359     477  
  Payments to repurchase common stock and common stock units     (41,831 )   (46,846 )
  Payments of dividends on convertible preferred stock     (1,312 )   —  
   
 
 
    Net cash provided by/(used in) financing activities     72,778     (29,779 )
   
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH     (349 )   659  

NET INCREASE IN CASH AND CASH EQUIVALENTS
 
 
12,972
 
 
9,904
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     54,302     127,870  
   
 
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD   $ 67,274   $ 137,774  
   
 
 

See accompanying Notes to Condensed Consolidated Financial Statements.

F-57


AECOM Technology Corporation

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation

        The accompanying condensed consolidated balance sheet as of December 31, 2006, the condensed consolidated statements of income for the three months ended December 31, 2005 and 2006, and the condensed consolidated statements of cash flows for the three months ended December 31, 2005 and 2006 of AECOM Technology Corporation, or the Company, are unaudited, and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and the results of operations for the periods presented.

        The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10 as filed with the Securities and Exchange Commission on January 29, 2007 for the fiscal year ended September 30, 2006. Certain prior year amounts have been reclassified to conform to the current year presentation.

        The results of operations for the three months ended December 31, 2006 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2007.

2. Cash and Cash Equivalents

        The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents, including cash in consolidated joint ventures, totaled $127.9 million and $137.8 million as of September 30, 2006 and December 31, 2006, respectively.

3. Accounts Receivable—Net

        Net accounts receivable consisted of the following as of September 30, 2006 and December 31, 2006:

 
   September 30,
2006
   December 31,
2006
  
 
   (in thousands)

  
Billed   $ 543,606   $ 556,847  
Unbilled     372,034     370,837  
Contract retentions     38,921     43,696  
   
 
 
  Total accounts receivable—gross     954,561     971,380  
Allowance for doubtful accounts     (41,383 )   (42,976 )
   
 
 
  Total accounts receivable—net   $ 913,178   $ 928,404  
   
 
 
Billings in excess of costs on uncompleted contracts   $ 143,283   $ 167,466  
   
 
 

        Billed accounts receivable represent amounts billed to clients that have yet to be collected. Unbilled accounts receivable represent revenue recognized but not yet billed pursuant to contract terms or billed after the fiscal period end. Substantially all unbilled receivables as of September 30, 2006 and December 31, 2006 are expected to be billed and collected within twelve months. Contract retentions represent amounts invoiced to clients; however payments have been withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. These retention agreements vary from project to project and could be outstanding several months or years.

F-58


        Allowances for doubtful accounts have been determined through specific identification of amounts determined to be uncollectible and potential write-offs, plus a general allowance for other amounts for which some potential loss is determined to be probable based on current and historical events and circumstances. No single client accounted for more than 10% of the Company's accounts receivable as of September 30, 2006 or December 31, 2006.

4. Goodwill and Acquired Intangible Assets

        The changes in the carrying value of goodwill by reporting unit for the three months ended December 31, 2006 were as follows:

 
   September 30,
2006
   Post-Acquisition
Adjustments
   Acquired
   December 31,
2006
 
   (in thousands)
Professional Technical Services   $ 457,575   $ 914   $ 5,256   $ 463,745
Management Support Services     8,933     (500 )   —     8,433
   
 
 
 
  Total   $ 466,508   $ 414   $ 5,256   $ 472,178
   
 
 
 

        The gross amounts and accumulated amortization of the Company's acquired identifiable intangible assets with finite useful lives as of September 30, 2006 and December 31, 2006 included in intangible and other assets—net in the accompanying condensed consolidated balance sheets, were as follows:

 
   September 30, 2006
   December 31, 2006
 
   Gross
Amount
   Accumulated
Amortization
   Gross
Amount
   Accumulated
Amortization
 
   (in thousands)
Backlog   $ 16,687   $ 15,254   $ 16,687   $ 15,509
Customer Relationships     18,179     2,180     18,179     2,634
Trade-Names     899     163     899     208
   
 
 
 
  Total   $ 35,765   $ 17,597   $ 35,765   $ 18,351
   
 
 
 

        Estimated amortization expense for the remainder of fiscal 2007 and for the succeeding years is as follows:

 
   (in thousands)
2007   $ 2,215
2008     2,459
2009     1,998
2010     1,988
2011     1,844
Thereafter     6,910
   
  Total   $ 17,414
   

F-59

5. Disclosures About Pension Benefit Obligations

        The pension cost for the three months ended December 31, 2005 and 2006 includes the following components:

 
   Three Months Ended December 31,
  
 
   2005
   2006
  
 
   U.S.
   Foreign
   U.S.
   Foreign
  
 
   (in thousands)

  
Service costs   $ 765   $ 1,316   $ 651   $ 1,218  
Interest cost on projected benefit obligation     1,678     3,812     1,876     4,282  
Expected return on plan assets     (1,621 )   (3,427 )   (1,719 )   (3,960 )
Amortization of prior service costs     (290 )   (220 )   (289 )   (97 )
Amortization of net gain     1,433     1,459     982     949  
   
 
 
 
 
Net periodic benefit costs   $ 1,965   $ 2,940   $ 1,501   $ 2,392  
   
 
 
 
 

        The total amounts of employer contributions paid for the three months ended December 31, 2006 were $0.1 million for U.S. subsidiaries and $3.8 million for foreign subsidiaries. The expected remaining scheduled annual employer contributions for fiscal year September 30, 2007 are $3.2 million for U.S. subsidiaries and $11.1 million for foreign subsidiaries.

6. Reportable Segments

        The Company's management has organized its operations into two reportable segments: Professional Technical Services and Management Support Services. This segmentation corresponds to how the Company manages its business as well as the underlying characteristics of its markets.

        Management internally analyzes the results of its segments and operations using the non-GAAP measure of revenue, net of other direct costs which is revenue, less other direct costs. All inter-company balances and transactions are eliminated in consolidation.

F-60


        The following tables set forth summarized financial information concerning the Company's reportable segments:

Reportable Segments:

 
   Professional
Technical
Services
   Management
Support Service
   Total
  
 
   (in thousands)

  
Three Months Ended December 31, 2005:                    
Revenue   $ 612,264   $ 134,479   $ 746,743  
Revenue, net of other direct costs     399,599     13,574     413,173  
Gross profit     192,131     6,620     198,751  
Gross profit as a % of revenue     31.4 %   4.9 %   26.6 %
Gross profit as a % of revenue, net of other direct costs     48.1 %   48.8 %   48.1 %
Equity in earnings of joint ventures     749     921     1,670  
General and administrative expenses     168,392     4,114     172,506  
Segment income from operations     24,488     3,427     27,915  

Three Months Ended December 31, 2006:
 
 
 
 
 
 
 
 
 
 
Revenue   $ 753,545   $ 184,680   $ 938,225  
Revenue, net of other direct costs     482,781     20,086     502,867  
Gross profit     240,036     8,117     248,153  
Gross profit as a % of revenue     31.9 %   4.4 %   26.4 %
Gross profit as a % of revenue, net of other direct costs     49.7 %   40.4 %   49.3 %
Equity in earnings of joint ventures     393     2,202     2,595  
General and administrative expenses     203,679     5,771     209,450  
Segment income from operations     36,750     4,548     41,298  
Segment assets     1,693,436     124,643     1,818,079  

F-61

Reconciliations:

 
   Three Months Ended December 31,
  
 
   2005
   2006
  
 
   (in thousands)

  
Revenue:              
Revenue from reportable segments   $ 746,743   $ 938,225  
Other revenue     54     324  
   
 
 
Total consolidated revenue   $ 746,797   $ 938,549  
   
 
 
Gross profit:              
Gross profit from reportable segments   $ 198,751   $ 248,153  
Other contributions to gross profit     1,288     266  
   
 
 
Total consolidated gross profit   $ 200,039   $ 248,419  
   
 
 
General and administrative expenses:              
General and administrative expenses of reportable segments   $ 172,506   $ 209,450  
Unallocated corporate general and administrative expense     4,477     10,378  
   
 
 
Total general and administrative expenses   $ 176,983   $ 219,828  
   
 
 
Income from operations:              
Segment income from operations   $ 27,915   $ 41,298  
Loss from operations not allocated to reportable segments     (3,189 )   (11,290 )
   
 
 
Total consolidated income from operations   $ 24,726   $ 30,008  
   
 
 
Segment assets:              
Total assets of reportable segments         $ 1,818,079  
Other assets not allocated to reportable segments and eliminations           60,551  
         
 
Total assets         $ 1,878,630  
         
 

7. Recently Issued Accounting Pronouncements

        In September 2006, the Financial Accounting Standards Board, or FASB, issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans" (SFAS 158). SFAS 158 requires employers to fully recognize the obligations associated with defined benefit pension plans in their financial statements. The Company will be required to recognize such obligations as of September 30, 2007. Additionally, the Company will be required to measure such obligations as of the end of its fiscal year, rather than up to three months earlier as had been previously permitted, effective in its fiscal year ending September 30, 2009. The Company is currently evaluating the impact of the provisions of SFAS 158 on its results of operations and financial position.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for the fiscal year ending September 30, 2009. The Company is currently evaluating the impact of the provisions of SFAS 157 on its results of operations and financial position.

F-62

        In June 2006, the FASB issued FASB Interpretation FIN, No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements. FIN 48 prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Additionally, FIN 48 provides guidance on recognition or de-recognition of interest and penalties, changes in judgment in interim periods, and disclosures of uncertain tax positions. FIN 48 becomes effective for the Company in fiscal year beginning October 1, 2007. The Company is in the process of determining the effect of the adoption of FIN 48 on its results of operations and financial position.

        In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3" (SFAS 154), which applies to all voluntary changes in accounting principle, as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. APB Opinion No. 20 previously required that most voluntary changes in accounting principle be recognized in net income as a cumulative effect of changing to the new accounting principle. SFAS 154 now requires retrospective application to prior periods' financial statements for changes in accounting principle, unless it is impracticable to do so. SFAS 154 became effective for the Company on October 1, 2006 and did not have any impact on its results of operations or financial position.

8. Stock-Based Compensation

        In December 2004, the FASB issued its final SFAS on accounting for share-based payments (SBPs) SFAS No. 123 (revised 2004), "Share-Based Payment" (SFAS 123R) that requires the Company to expense the value of employee stock options and similar awards. Under SFAS 123R, SBP awards result in a cost that will be measured at fair value on the awards' grant date, based on the estimated number of awards that are expected to vest. Compensation expense for awards that vest would not be reversed if the awards expire without being exercised.

        SFAS 123R became effective for the Company on October 1, 2006. Upon adoption of SFAS 123R, the Company adopted the prospective transition method. Under this method, prior periods were not restated to reflect the impact of SFAS 123R. Under SFAS 123R, options and similar awards result in a cost that will be measured at fair value on the awards' grant dates, based on the estimated number of awards that are expected to vest. This statement requires that the Company recognize as compensation expense the fair value of all stock-based awards, including stock options, granted to employees and directors in exchange for services over the requisite service period, which is typically the vesting period. SFAS No. 123R also requires that cash flows resulting from tax benefits realized from stock option exercises or stock vesting events in excess of tax benefits recognized from stock-based compensation expenses be classified as cash flows from financing activities instead of cash flows from operating activities for awards subject to SFAS No. 123R.

        Prior to October 1, 2006, the Company accounted for employee stock-based compensation using the intrinsic value method of Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Under the intrinsic value method, no compensation expense was reflected in net income for stock options granted to employees, as all stock

F-63


options had an exercise price equal to the fair value of the underlying common stock on the date of grant.

        Under the prospective transition method, the Company continues to account for options granted prior to October 1, 2006 under the provisions of APB Opinion No. 25. Since all stock options had an exercise price equal to the fair value of the underlying common stock on the date of grant, no compensation expense will be recognized for options granted prior to October 1, 2006 unless modifications are made to those options. Prior to the adoption of SFAS 123R, the fair value of stock options used to disclose pro forma net income and earnings per share disclosures was the estimated value using the minimum value method as allowed for non-public companies. The adoption of SFAS 123R did not have a cumulative effect on the Company's results of operations, financial position, or cash flows.

        The fair value of the Company's stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The expected term of awards granted represents the period of time the awards are expected to be outstanding. As the Company's common stock is not publicly-traded, expected volatility is based on a historical volatility, for a period consistent with the expected option term, of publicly-traded peer companies. The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the option on the grant date. The Company uses historical data as a basis to estimate forfeitures.

        The fair value of options granted during the three months ended December 31, 2006 was determined using the following weighted average assumptions:

 
   Three
Months Ended
December 31, 2006
  
Dividend yield   —  
Expected volatility   25.0 %
Risk-free interest rate   4.6 %
Expected term (in years)   7.0  

        As a result of the adoption of SFAS 123(R), the Company's net income for the quarter ended December 31, 2006 was $0.1 million lower than under the Company's previous accounting method, as a result of recognizing as expense the fair value of stock options.

F-64


        Stock option activity for the three months ended December 31, 2006 was as follows:

 
   Shares of
stock under
options
   Weighted
average
exercise price
   Weighted
average
remaining
contractual
term
   Aggregate
intrinsic value
 
    
    
   (In years)

   (In thousands)
Outstanding at September 30, 2006   8,928,640   $ 8.43   3.31   $ 75,213
  Options granted   465,020     14.20   7.00     6,603
  Options forfeited or expired   3,466     13.84   6.75     48
  Options exercised   47,400     10.95   4.79     519
   
           
Outstanding at December 31, 2006   9,342,794     8.70   3.24     81,249
   
           
Vested and expected to vest in the future as of December 31, 2006   9,333,500     8.69   3.24   $ 81,117
   
           

        The weighted average grant-date fair value of stock options granted during the three months ended December 31, 2006 was $5.48.

9. Earnings Per Share

        Basic earnings per share, or EPS, excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted average number of common shares outstanding and dilutive potential common shares for the period. The Company includes as potential common shares the weighted average dilutive effects of outstanding stock options using the treasury stock method.

F-65


        The following table sets forth the number of weighted average shares used to compute basic and diluted EPS:

 
   Three Months Ended December 31,
  
 
   2005
   2006
  
 
   (in thousands, except per share data)

  
Numerator for basic earnings per share:              
  Net income   $ 12,955   $ 25,520  
  Preferred stock dividends     (1,384 )   (29 )
   
 
 
  Net income available for common stockholders   $ 11,571   $ 25,491  
   
 
 
Denominator for basic earnings per share:              
  Weighted average shares     53,288     57,600  
   
 
 
Numerator for diluted earnings per share:              
  Net income   $ 12,955   $ 25,520  
   
 
 
Denominator for diluted earnings per share:              
  Denominator for basic earnings per share     53,288     57,600  
  Potential common shares:              
    Preferred stock, Class D     8,960     —  
    Preferred stock, Class F and G     —     18,746  
    Stock options     2,202     2,236  
    Preferred stock, other     412     386  
    Stock matches     24     52  
    Stock units     12     16  
    Stock warrants     326     —  
   
 
 
  Denominator for diluted earnings per share     65,224     79,036  
   
 
 
Earnings per share:              
  Basic   $ 0.22   $ 0.44  
   
 
 
  Diluted   $ 0.20   $ 0.32  
   
 
 

        For the three months ended December 31, 2005 and 2006, no options were excluded from the calculation or were considered anti-dilutive.

10. Stock Plans

        During the quarters ended December 31, 2005 and 2006, the Company's Global Stock Program, or GSP, sold to the Company 1.6 million and 1.4 million shares for $19.2 million and $20.8 million, respectively. During the quarters ended December 31, 2005 and 2006, the Company's Stock Purchase Plan, or SPP, sold to the Company 0.6 and 0.6 million shares for $8.1 million and $9.4 million, respectively. During the quarters ended December 31 2005 and 2006, direct shareholders sold to the Company 1.0 million and 1.2 million shares for $13.8 million and $16.2 million, respectively.

F-66


11. Commitments and Contingencies

        The Company is a defendant in various lawsuits arising in the normal course of business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the financial position of the Company.

        The Company is contingently liable in the amount of approximately $44.6 million under standby letters of credit issued primarily in connection with general and professional liability insurance programs and for payment and performance guarantees relating to domestic and overseas contracts. In addition, in some instances the Company guarantees that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, the Company may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

        Under joint venture arrangements, if a partner is financially unable to complete its share of the contract, the other partner(s) will be required to complete those activities. The Company generally only enters into joint venture arrangements with partners who are reputable, financially sound and who carry appropriate levels of surety bonds for the project in order to adequately assure completion of their assignments. The Company is a partner in certain joint ventures where the joint venture has contracted with subconsultants for certain specialized professional services. The joint venture, or the Company to the extent that the joint venture partner(s) are unable to fulfill their responsibilities, is liable to the third-party customer for performance of the sub-consultant and would be liable to the sub-consultant if the third-party customer failed to make payments due the joint venture for sub-consultant services.

12. Litigation

        The Company is subject to certain claims and lawsuits typically filed against the engineering and consulting profession, alleging primarily professional errors or omissions. The Company carries professional liability insurance against such claims, subject to certain deductibles and policy limits. From time to time the Company establishes reserves for litigation that is considered a probable of a loss.

13. Subsequent Event

        As of February 20, 2007, all of the Company's outstanding loans previously made to certain directors and senior officers under its Senior Executive Equity Investment Plan, or SEEIP, were terminated and repaid.

F-67

Until                        , 2007, 25 days after the date of this prospectus, all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

LOGO


PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

        The table below lists various expenses, other than underwriting discounts and commissions, we expect to incur in connection with the sale and distribution of the securities being registered hereby. All the expenses are estimates, except the Securities and Exchange Commission registration fee, the NASD filing fee and the NYSE listing fee.

Type
   Amount
Securities and Exchange Commission Registration Fee   $ 24,819
NASD Filing Fee     67,285
NYSE Fee     250,000
Legal fees and expenses     *
Accounting fees and expenses     400,000
Printing and engraving expenses     250,000
Transfer agent and registrar fees     *
Miscellaneous expenses     *
   
  Total   $ *
   
*
To be filed by amendment


ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        Section 102 of the Delaware General Corporation Law, or DGCL, as amended, allows a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.

        Section 145 of the DGCL provides for the indemnification of officers, directors and other corporate agents in terms sufficiently broad to indemnify such persons under circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act. Our Restated Certificate of Incorporation and Restated Bylaws provide for indemnification of our officers, directors, employees and agents to the extent and under the circumstances permitted under the Delaware General Corporation Law.

        The Underwriting Agreement (Exhibit 1.1) provides for indemnification by the underwriters of us, our directors and officers, and by us of the underwriters, for some liabilities arising under the Securities Act, and affords some rights of contributions with respect thereto.


ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

        Since January 1, 2003, we have issued the following securities that were not registered under the Securities Act:

II-1

        We issued the securities to identified in paragraphs (i)-(vii) above to our directors, officers, employees and consultants under written compensatory benefit plans in reliance upon Rule 701 under the Securities Act and/or Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. Other than option grants referenced in clause (ii), the transactions identified in paragraphs (i)-(vii) predominantly relate to employee share pursuant to bi-weekly payroll deductions under our 401(k) plan sales and non tax-qualified stock purchase plan deferrals in the United States and global stock plan purchases outside the United States. We issued the securities identified in paragraphs (viii) and (ix) above in reliance upon Regulation D of the Securities Act. The securities in paragraph (xv) were issued in reliance on Section (3)(a)(10) under the Securities Act. We issued the

II-2


other securities identified in paragraphs (x)-(xvi) above in reliance upon Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering or Regulation S promulgated under the Securities Act as sales occurring outside of the United States. The consideration for the securities issued in paragraphs (x)-(xvi) in connection with acquisitions were securities of the acquired company. The purchasers were provided financial and other information concerning the Company and were allowed the opportunity to ask questions and receive information from the Company prior to making their investment decisions. The sale of these securities were made without general solicitation or advertising. Based on the limited nature of the offering, the level of knowledge and relationships of the purchasers with the Company, the provision and access to information and restrictions on transfer, and (where applicable) the residence of the purchaser, the Company believes its offerings were exempt from registration under Regulation D, Section 4(2), Regulation S and/or Rule 701.


ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Exhibit
Numbers
   Description
1.1*   Form of Underwriting Agreement

3.1**
 
Restated Certificate of Incorporation

3.2**
 
Certificate of Designations for Class C Preferred Stock

3.3**
 
Certificate of Designations for Class E Preferred Stock

3.4**
 
Certificate of Designations for Class F Convertible Preferred Stock, Series 1

3.5**
 
Certificate of Designations for Class G Convertible Preferred Stock, Series 1

3.6***
 
Restated Bylaws

4.1**
 
Form of Common Stock Certificate

4.2**
 
Investor Rights Agreement, dated as of February 9, 2006, among Registrant and the investors party thereto

4.3**
 
Joinder Agreement, dated as of February 9, 2006, between the Registrant and the investor party thereto

4.4**
 
Joinder Agreement, dated as of February 14, 2006, between the Registrant and the investor party thereto

4.5**
 
Amendment No. 1 to Investor Rights Agreement, dated as of February 14, 2006, among the Registrant and the investors party thereto

5.1*
 
Opinion of Company Counsel

10.1**
 
Amended and Restated Credit Agreement, dated as of September 22, 2006, among Registrant, the Subsidiary Borrowers, Union Bank of California, N.A., as Administrative Agent, a Letter of Credit Issuing Lender and the Swing Line Lender, Harris N.A., as a Letter of Credit Issuing Lender, Bank of Montreal acting under its trade name BMO Capital Markets, as Syndication Agent and other financial institutions that are parties thereto

10.2**
 
Term Credit Agreement dated as of September 22, 2006, among Maunsell HK Holdings, Ltd., Faber Maunsell Limited, W.E. Bassett & Partners Pty. Ltd., Maunsell Group Limited, and Maunsell Australia Pty Ltd., as the Borrowers, Union Bank of California, N.A., as the Administrative Agent, BMO Capital Markets, as Co-Lead Arrangers and Co-Book Managers, Bank of Montreal, acting under its trade name BMO Capital Markets, as the Syndication Agent and other financial institutions that are parties thereto
     

II-3


10.3**
 
Note Purchase Agreement dated as of June 9, 1998, among Registrant and the purchaser parties thereto for Senior Notes due 2008

10.4**
 
Amendment to Note Purchase Agreement dated as of June 9, 1998

10.5**
 
Private Shelf Agreement, dated December 30, 2004, among Registrant, Prudential Investment Management, Inc. and certain Prudential Affiliates

10.6**
 
Guarantee dated as of January 9, 2007 among Registrant, HSBC Bank USA National Association and the other bank parties thereto

10.7**
 
Office Lease, dated June 13, 2001, between Registrant and Shuwa Investments Corporation

10.8**
 
First Amendment to Office Lease, dated September 2001, between Registrant and Shuwa Investments Corporation

10.9**
 
Second Amendment to Office Lease, dated October 22, 2001, between Registrant and Shuwa Investments Corporation

10.10**
 
Non-Qualified Stock Purchase Plan, restated as of October 1, 2006

10.11**
 
Amendment 2006-1, dated as of October 1, 2006, to Non-Qualified Stock Purchase Plan

10.12**
 
1992 Supplemental Executive Retirement Plan, restated as of November 20, 1997

10.13**
 
First Amendment, effective July 1, 1998, to the 1992 Supplemental Executive Retirement Plan

10.14**
 
Second Amendment to the 1992 Supplemental Executive Retirement Plan

10.15**
 
Third Amendment to the 1992 Supplemental Executive Retirement Plan

10.16**
 
1996 Supplemental Executive Retirement Plan, restated as of November 20, 1997

10.17**
 
First Amendment, effective July 1, 1998, to the 1996 Supplemental Executive Retirement Plan

10.18**
 
Second Amendment to the 1996 Supplemental Executive Retirement Plan

10.19**
 
Agreement of Lease dated as of March 17, 1999, between 650 Third Avenue LLC and Frederick R. Harris, Inc.

10.20**
 
1998 Management Supplemental Executive Retirement Plan

10.21**
 
First Amendment, effective January 1, 2002, to the 1998 Management Supplemental Executive Retirement Plan

10.22**
 
Second Amendment to the 1998 Management Supplemental Executive Retirement Plan

10.23**
 
Third Amendment to the 1998 Management Supplemental Executive Retirement Plan

10.24**
 
1996 Excess Benefit Plan

10.25**
 
First Amendment, effective July 1, 1998, to the 1996 Excess Benefit Plan

10.26**
 
Second Amendment to the 1996 Excess Benefit Plan

10.27**
 
Third Amendment to the 1996 Excess Benefit Plan

10.28**
 
2005 ENSR Stock Purchase Plan

10.29**
 
2005 UMA Group Ltd. Employee Stock Purchase Plan
     

II-4


10.30**
 
2006 Stock Incentive Plan

10.31**
 
Cansult Maunsell Merger Investment Plan

10.32**
 
AECOM Equity Investment Plan

10.33**
 
Global Stock Investment Plan—United Kingdom

10.34**
 
Hong Kong Stock Investment Plan—Grandfathered Directors

10.35**
 
AECOM Retirement & Savings Plan

10.36**
 
Executive Employment Agreement between Registrant and James R. Royer

21.1**
 
Subsidiaries of AECOM

23.1*
 
Consent of Gibson, Dunn & Crutcher, LLP (included as part of Exhibit 5.1)

23.2+
 
Consent of Independent Accountants

24.1
 
Power of Attorney (previously filed)
*
To be filed by amendment

**
Incorporated by reference to exhibit of like number to the Company's registration statement on Form 10 filed with the SEC on January 29, 2007.

***
Incorporated by reference to exhibit of like number to Amendment No. 1 to the Company's registration statement on Form 10 filed with the SEC on March 7, 2007.

+
Filed herewith.


ITEM 17. UNDERTAKINGS.

        Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

        The undersigned registrant hereby undertakes that:

II-5


SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, California, on April 23, 2007.

    AECOM TECHNOLOGY CORPORATION

 
 
By:
/s/  JOHN M. DIONISIO      
John M. Dionisio
President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, the following persons have signed this Registration Statement in the capacities and on the date indicated.

Signature
   Title
   Date

 
 
 
 
 
/s/  JOHN M. DIONISIO      
John M. Dionisio		   Director, President and Chief Executive Officer (Principal Executive Officer)   April 23, 2007

/s/  MICHAEL S. BURKE      
Michael S. Burke
 
Executive Vice President, Chief Corporate Officer and Chief Financial Officer (Principal Financial Officer)
 
April 23, 2007

/s/  RONALD E. OSBORNE      
Ronald E. Osborne
 
Vice President, Corporate Controller (Principal Accounting Officer)
 
April 23, 2007

*
Richard G. Newman
 
Director, Chairman
 
April 23, 2007

*
Francis S.Y. Bong
 
Director
 
April 23, 2007

*
H. Frederick Christie
 
Director
 
April 23, 2007

*
James H. Fordyce
 
Director
 
April 23, 2007
         

II-6


*
S. Malcolm Gillis
 
Director
 
April 23, 2007

*
Linda Griego
 
Director
 
April 23, 2007

*
Robert J. Lowe
 
Director
 
April 23, 2007

*
William G. Ouchi
 
Director
 
April 23, 2007

*
William P. Rutledge
 
Director
 
April 23, 2007

*
Lee D. Stern
 
Director
 
April 23, 2007
*By:   /s/  ERIC CHEN      
Eric Chen
Attorney-in-Fact
 		   

II-7


EXHIBIT INDEX

Exhibit Numbers
   Description
1.1*   Form of Underwriting Agreement

3.1**
 
Restated Certificate of Incorporation

3.2**
 
Certificate of Designations for Class C Preferred Stock

3.3**
 
Certificate of Designations for Class E Preferred Stock

3.4**
 
Certificate of Designations for Class F Convertible Preferred Stock, Series 1

3.5**
 
Certificate of Designations for Class G Convertible Preferred Stock, Series 1

3.6***
 
Restated Bylaws

4.1**
 
Form of Common Stock Certificate

4.2**
 
Investor Rights Agreement, dated as of February 9, 2006, among Registrant and the investors party thereto

4.3**
 
Joinder Agreement, dated as of February 9, 2006, between the Registrant and the investor party thereto

4.4**
 
Joinder Agreement, dated as of February 14, 2006, between the Registrant and the investor party thereto

4.5**
 
Amendment No. 1 to Investor Rights Agreement, dated as of February 14, 2006, among the Registrant and the investors party thereto

5.1*
 
Opinion of Company Counsel

10.1**
 
Amended and Restated Credit Agreement, dated as of September 22, 2006, among Registrant, the Subsidiary Borrowers, Union Bank of California, N.A., as Administrative Agent, a Letter of Credit Issuing Lender and the Swing Line Lender, Harris N.A., as a Letter of Credit Issuing Lender, Bank of Montreal acting under its trade name BMO Capital Markets, as Syndication Agent and other financial institutions that are parties thereto

10.2**
 
Term Credit Agreement dated as of September 22, 2006, among Maunsell HK Holdings, Ltd., Faber Maunsell Limited, W.E. Bassett & Partners Pty. Ltd., Maunsell Group Limited, and Maunsell Australia Pty Ltd., as the Borrowers, Union Bank of California, N.A., as the Administrative Agent, BMO Capital Markets, as Co-Lead Arrangers and Co-Book Managers, Bank of Montreal, acting under its trade name BMO Capital Markets, as the Syndication Agent and other financial institutions that are parties thereto

10.3**
 
Note Purchase Agreement dated as of June 9, 1998, among Registrant and the purchaser parties thereto for Senior Notes due 2008

10.4**
 
Amendment to Note Purchase Agreement dated as of June 9, 1998

10.5**
 
Private Shelf Agreement, dated December 30, 2004, among Registrant, Prudential Investment Management, Inc. and certain Prudential Affiliates

10.6**
 
Guarantee dated as of January 9, 2007 among Registrant, HSBC Bank USA National Association and the other bank parties thereto

10.7**
 
Office Lease, dated June 13, 2001, between Registrant and Shuwa Investments Corporation
     

II-8


10.8**
 
First Amendment to Office Lease, dated September 2001, between Registrant and Shuwa Investments Corporation

10.9**
 
Second Amendment to Office Lease, dated October 22, 2001, between Registrant and Shuwa Investments Corporation

10.10**
 
Non-Qualified Stock Purchase Plan, restated as of October 1, 2006

10.11**
 
Amendment 2006-1, dated as of October 1, 2006, to Non-Qualified Stock Purchase Plan

10.12**
 
1992 Supplemental Executive Retirement Plan, restated as of November 20, 1997

10.13**
 
First Amendment, effective July 1, 1998, to the 1992 Supplemental Executive Retirement Plan

10.14**
 
Second Amendment to the 1992 Supplemental Executive Retirement Plan

10.15**
 
Third Amendment to the 1992 Supplemental Executive Retirement Plan

10.16**
 
1996 Supplemental Executive Retirement Plan, restated as of November 20, 1997

10.17**
 
First Amendment, effective July 1, 1998, to the 1996 Supplemental Executive Retirement Plan

10.18**
 
Second Amendment to the 1996 Supplemental Executive Retirement Plan

10.19**
 
Agreement of Lease dated as of March 17, 1999, between 650 Third Avenue LLC and Frederick R. Harris, Inc.

10.20**
 
1998 Management Supplemental Executive Retirement Plan

10.21**
 
First Amendment, effective January 1, 2002, to the 1998 Management Supplemental Executive Retirement Plan

10.22**
 
Second Amendment to the 1998 Management Supplemental Executive Retirement Plan

10.23**
 
Third Amendment to the 1998 Management Supplemental Executive Retirement Plan

10.24**
 
1996 Excess Benefit Plan

10.25**
 
First Amendment, effective July 1, 1998, to the 1996 Excess Benefit Plan

10.26**
 
Second Amendment to the 1996 Excess Benefit Plan

10.27**
 
Third Amendment to the 1996 Excess Benefit Plan

10.28**
 
2005 ENSR Stock Purchase Plan

10.29**
 
2005 UMA Group Ltd. Employee Stock Purchase Plan

10.30**
 
2006 Stock Incentive Plan

10.31**
 
Cansult Maunsell Merger Investment Plan

10.32**
 
AECOM Technology Corporation Equity Investment Plan

10.33**
 
Global Stock Investment Plan—United Kingdom

10.34**
 
Hong Kong Stock Investment Plan—Grandfathered Directors

10.35**
 
AECOM Technology Corporation Retirement & Savings Plan

10.36**
 
Executive Employment Agreement between Registrant and James R. Royer
     

II-9


21.1**
 
Subsidiaries of AECOM

23.1*
 
Consent of Gibson, Dunn & Crutcher, LLP (included as part of Exhibit 5.1)

23.2+
 
Consent of Independent Accountants

24.1
 
Power of Attorney (previously filed)
*
To be filed by amendment

**
Incorporated by reference to exhibit of like number to the Company's registration statement on Form 10 filed with the SEC on January 29, 2007.

***
Incorporated by reference to exhibit of like number to Amendment No. 1 to the Company's registration statement on Form 10 filed with the SEC on March 7, 2007.

+
Filed herewith.

II-10



QuickLinks

TABLE OF CONTENTS
SUMMARY
Recent Developments
RISK FACTORS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS (Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)
USE OF PROCEEDS
INDUSTRY AND MARKET DATA
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
EXECUTIVE COMPENSATION
Grants of Plan-based Awards for Fiscal Year 2006
Outstanding Equity Awards at Fiscal Year-End 2006
Options Exercises and Stock Vested for Fiscal Year 2006
Pension Benefits for Fiscal Year 2006
Nonqualified Deferred Compensation for Fiscal Year 2006
Directors Compensation for Fiscal Year 2006
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRINCIPAL AND SELLING STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITERS
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND ADDITIONAL INFORMATION
AECOM Technology Corporation Index to Consolidated Financial Statements September 30, 2006
AECOM Technology Corporation Consolidated Balance Sheets (in thousands, except share data)
AECOM Technology Corporation Consolidated Statements of Income (in thousands, except per share data)
AECOM Technology Corporation Consolidated Statements of Comprehensive Income (in thousands)
AECOM Technology Corporation Consolidated Statements of Changes in Stockholders' Deficit (in thousands)
AECOM Technology Corporation Consolidated Statements of Cash Flows (in thousands)
AECOM TECHNOLOGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AECOM Technology Corporation Condensed Consolidated Balance Sheets (in thousands, except share data)
AECOM Technology Corporation Condensed Consolidated Statements of Income (unaudited—in thousands, except per share data)
AECOM Technology Corporation Condensed Consolidated Statements of Comprehensive Income (unaudited—in thousands)
AECOM Technology Corporation Condensed Consolidated Statements of Cash Flows (unaudited—in thousands)
AECOM Technology Corporation Notes to Condensed Consolidated Financial Statements
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS
SIGNATURES
EXHIBIT INDEX

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

        We consent to the reference to our firm under the caption "Experts" and to the use of our report dated March 5, 2007, except for paragraph two in Note 24 as to which the date is            , 2007, in Amendment No. 2 to the Registration Statement (Form S-1 No. 333-141142) and related Prospectus of AECOM Technology Corporation for the registration of its common stock.

Los Angeles, California

        The foregoing consent is in the form that will be signed upon the effective date of the stock split described in paragraph two of Note 24 to the consolidated financial statements.

/s/ Ernst & Young LLP
Los Angeles, California
April 20, 2007