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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

**FORM        10-Q**

| (Mark                  one)                                        |
|--------------------------------------------------------------------|
|  x                                                            | QUARTERLY                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE                  ACT OF 1934 |
|                                                               |
| For                  the quarterly period ended September 28, 2007 |
|                                                               |   |
| OR                                                                 |
|                                                               |
|  o                                                            | TRANSITION                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |

**Commission        file number 1-7567**

**URS        CORPORATION**

| **Delaware**                                                            | **94-1381538**                                        |
|-------------------------------------------------------------------------|-------------------------------------------------------|
| (State                  or other jurisdiction of incorporation)         | (I.R.S.                  Employer Identification No.) |
|                                                                    |                                                  |
| **600                  Montgomery Street, 26th                  Floor** |                                                  |
| **San                  Francisco, California**                          | **94111-2728**                                        |
| (Address                  of principal executive offices)               | (Zip                  Code)                           |

**(415)        774-2700**

**            **

| **Class**                                     | **Outstanding                  at October 31, 2007** |
|-----------------------------------------------|------------------------------------------------------|
|                                          |                                                 |
| Common                  Stock, $.01 par value | 53,464,224                                           |

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Table of contents
**URS        CORPORATION AND SUBSIDIARIES**

33
60

| **PART                  I.** | **FINANCIAL                  INFORMATION:**                                                                               |     |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------|----------|
|                         |                                                                                                                      |     |
| Item                  1.     | Consolidated                  Financial Statements                                                                        |     |
|                         | Consolidated                  Balance Sheets                                                                              |     |
|                         | September                  28, 2007 and December 29, 2006                                                                 | 3        |
|                         | Consolidated                  Statements of Operations and Comprehensive                  Income                          |     |
|                         | Three                  months and nine months ended September 28,  2007 and September                  29, 2006 | 4        |
|                         | Consolidated                  Statements of Cash Flows                                                                    |     |
|                         | Nine                  months ended September 28, 2007 and September 29, 2006                                              | 5        |
|                         | Notes                  to Consolidated Financial                  Statements                                              | 6        |
| Item                  2.     | Management's                  Discussion and Analysis of Financial                  Condition and Results of Operations   |  33 |
| Item                  3.     | Quantitative                  and Qualitative Disclosures About Market                  Risk                              | 58       |
| Item                  4.     | Controls                  and Procedures                                                                                  | 58       |
|                         |                                                                                                                      |     |

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| **PART                  II.** | **OTHER                  INFORMATION:**                                                       |   |
|-------------------------------|-----------------------------------------------------------------------------------------------|--------|
|                          |                                                                                          |   |
| Item                  1.      | Legal                  Proceedings                                                            | 59     |
| Item                  1A.     | Risk                  Factors                                                                 | 60     |
| Item                  2.      | Unregistered                  Sales of Equity Securities and Use of                  Proceeds | 72     |
| Item                  3.      | Defaults                  Upon Senior Securities                                              | 72     |
| Item                  4.      | Submission                  of Matters to a Vote of Security                  Holders         | 72     |
| Item                  5.      | Other                  Information                                                            | 73     |
| Item                  6.      | Exhibits                                                                                      | 73     |

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**PART        I**

**FINANCIAL        INFORMATION**

**ITEM        1.  CONSOLIDATED FINANCIAL STATEMENTS**

**URS        CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEETS - UNAUDITED**

**(In        thousands, except per share data)**

|                                                                                                                                                                                                                    |   | **September                    28, 2007** |      |   | **December                    29, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|--------|------------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                              |   |                                      |      |   |                                     |   |
| Current                  assets:                                                                                                                                                                                        |   |                                      |      |   |                                     |   |
| Cash                  and cash equivalents, including $66,920 and $44,557 of short-term                  money                  market funds, respectively                                                              |   | $                                         | 141,288   |   |                                     | $      | 89,502 |   |
| Accounts                  receivable, including retainage of $42,159 and $37,368,                  respectively                                                                                                         |   |                                      | 692,302   |   |                                     |   | 680,631 |   |
| Costs                  and accrued earnings in excess of billings on contracts in                  process                                                                                                              |   |                                      | 570,031   |   |                                     |   | 552,526 |   |
| Less                  receivable allowances                                                                                                                                                                             |   |                                      | (36,765   | )      |                                     |   | (50,458 | ) |
| Net                  accounts receivable                                                                                                                                                                                |   |                                      | 1,225,568 |   |                                     |   | 1,182,699 |   |
| Deferred                  tax assets                                                                                                                                                                                    |   |                                      | 43,667    |   |                                     |   | 36,547 |   |
| Prepaid                  expenses and other assets                                                                                                                                                                      |   |                                      | 77,104    |   |                                     |   | 65,405 |   |
| Total                  current assets                                                                                                                                                                                   |   |                                      | 1,487,627 |   |                                     |   | 1,374,153 |   |
| Property                  and equipment at cost, net                                                                                                                                                                    |   |                                      | 172,164   |   |                                     |   | 163,142 |   |
| Goodwill                                                                                                                                                                                                                |   |                                      | 1,006,832 |   |                                     |   | 989,111 |   |
| Purchased                  intangible assets, net                                                                                                                                                                       |   |                                      | 3,088     |   |                                     |   | 3,839 |   |
| Other                  assets                                                                                                                                                                                           |   |                                      | 51,160    |   |                                     |   | 50,784 |   |
|                                                                                                                                                                                                                    |   | $                                         | 2,720,871 |   |                                     | $      | 2,581,029 |   |
| **LIABILITIES,                  MINORITY INTEREST, AND STOCKHOLDERS' EQUITY**                                                                                                                                           |   |                                      |      |   |                                     |   |   |   |
| Current                  liabilities:                                                                                                                                                                                   |   |                                      |      |   |                                     |   |   |   |
| Book                  overdrafts                                                                                                                                                                                        |   | $                                         | 112       |   |                                     | $      | 3,334 |   |
| Current                  portion of long-term debt                                                                                                                                                                      |   |                                      | 18,533    |   |                                     |   | 19,120 |   |
| Accounts                  payable and subcontractors payable, including retainage of $30,367                  and                  $19,515, respectively                                                                |   |                                      | 346,069   |   |                                     |   | 290,651 |   |
| Accrued                  salaries and wages                                                                                                                                                                             |   |                                      | 221,438   |   |                                     |   | 230,905 |   |
| Accrued                  expenses and other                                                                                                                                                                             |   |                                      | 89,522    |   |                                     |   | 73,704 |   |
| Billings                  in excess of costs and accrued earnings on contracts in                  process                                                                                                              |   |                                      | 150,940   |   |                                     |   | 168,271 |   |
| Total                  current liabilities                                                                                                                                                                              |   |                                      | 826,614   |   |                                     |   | 785,985 |   |
| Long-term                  debt                                                                                                                                                                                         |   |                                      | 73,445    |   |                                     |   | 149,494 |   |
| Deferred                  tax liabilities                                                                                                                                                                               |   |                                      | 18,624    |   |                                     |   | 17,808 |   |
| Other                  long-term liabilities                                                                                                                                                                            |   |                                      | 136,588   |   |                                     |   | 117,586 |   |
| Total                  liabilities                                                                                                                                                                                      |   |                                      | 1,055,271 |   |                                     |   | 1,070,873 |   |
| Commitments                  and contingencies (Note 6)                                                                                                                                                                 |   |                                      |      |   |                                     |   |   |   |
| Minority                  interest                                                                                                                                                                                      |   |                                      | 8,588     |   |                                     |   | 3,469 |   |
| Stockholders'                  equity:                                                                                                                                                                                  |   |                                      |      |   |                                     |   |   |   |
| Preferred                  stock, authorized 3,000 shares; no shares outstanding                                                                                                                                        |   |                                      | —   |   |                                     |   | — |   |
| Common                  shares, par value $.01; authorized 100,000 shares; 53,424 and 52,309                  shares issued, respectively; and 53,372 and 52,257 shares                  outstanding, respectively |   |                                      | 534       |   |                                     |   | 523 |   |
| Treasury                  stock, 52 shares at cost                                                                                                                                                                      |   |                                      | (287      | )      |                                     |   | (287 | ) |
| Additional                  paid-in capital                                                                                                                                                                             |   |                                      | 1,018,781 |   |                                     |   | 973,892 |   |
| Accumulated                  other comprehensive income (loss)                                                                                                                                                          |   |                                      | 220       |   |                                     |   | (3,638 | ) |
| Retained                  earnings                                                                                                                                                                                      |   |                                      | 637,764   |   |                                     |   | 536,197 |   |
| Total                  stockholders' equity                                                                                                                                                                             |   |                                      | 1,657,012 |   |                                     |   | 1,506,687 |   |
|                                                                                                                                                                                                                    |   | $                                         | 2,720,871 |   |                                     | $      | 2,581,029 |   |

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**URS        CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME -        UNAUDITED**

**(In        thousands, except per share data)**

|                                                                                                   |   | **Three                    Months Ended**    |      |   | **Nine                    Months Ended**     |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-----------|--------|----------------------------------------------|--------|
|                                                                                                   |   | **September                    28,****2007** |      |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                   |   |                                         |      |   |                                         |   |   |   |   |   |   |   |
| Revenues                                                                                               |   | $                                            | 1,272,282 |   |                                         | $      | 1,085,604 |   |   | $ | 3,654,675 |   |   | $ | 3,153,744 |   |
| Direct                  operating expenses                                                             |   |                                         | 857,290   |   |                                         |   | 708,924 |   |   |   | 2,434,121 |   |   |   | 2,031,159 |   |
| Excess                  of revenues over direct                  operating expenses                    |   |                                         | 414,992   |   |                                         |   | 376,680 |   |   |   | 1,220,554 |   |   |   | 1,122,585 |   |
| Indirect,                  general and administrative expenses                                         |   |                                         | 345,322   |   |                                         |   | 317,718 |   |   |   | 1,024,736 |   |   |   | 953,763 |   |
| Operating                  income                                                                      |   |                                         | 69,670    |   |                                         |   | 58,962 |   |   |   | 195,818 |   |   |   | 168,822 |   |
| Interest                  expense                                                                      |   |                                         | 2,935     |   |                                         |   | 4,761 |   |   |   | 10,926 |   |   |   | 15,746 |   |
| Income                  before income taxes and minority interest                                      |   |                                         | 66,735    |   |                                         |   | 54,201 |   |   |   | 184,892 |   |   |   | 153,076 |   |
| Income                  tax expense                                                                    |   |                                         | 26,955    |   |                                         |   | 24,318 |   |   |   | 75,987 |   |   |   | 65,910 |   |
| Minority                  interest in income of consolidated subsidiaries, net of                  tax |   |                                         | 1,087     |   |                                         |   | (20 | ) |   |   | 3,049 |   |   |   | 437 |   |
| Net                  income                                                                            |   |                                         | 38,693    |   |                                         |   | 29,903 |   |   |   | 105,856 |   |   |   | 86,729 |   |
| Other                  comprehensive income (loss):                                                    |   |                                         |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Minimum                  pension liability adjustments, net of tax benefit                             |   |                                         | —   |   |                                         |   | — |   |   |   | — |   |   |   | (2,366 | ) |
| Foreign                  currency translation adjustments                                              |   |                                         | 682       |   |                                         |   | 1,024 |   |   |   | 3,858 |   |   |   | 3,606 |   |
| Comprehensive                  income                                                                  |   | $                                            | 39,375    |   |                                         | $      | 30,927 |   |   | $ | 109,714 |   |   | $ | 87,969 |   |
| Earnings                  per share (Note 1):                                                          |   |                                         |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                  |   | $                                            | .74       |   |                                         | $      | .59 |   |   | $ | 2.05 |   |   | $ | 1.71 |   |
| Diluted                                                                                                |   | $                                            | .73       |   |                                         | $      | .58 |   |   | $ | 2.01 |   |   | $ | 1.68 |   |
| Weighted-average                  shares outstanding (Note 1):                                         |   |                                         |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                  |   |                                         | 51,944    |   |                                         |   | 50,945 |   |   |   | 51,559 |   |   |   | 50,627 |   |
| Diluted                                                                                                |   |                                         | 52,751    |   |                                         |   | 51,773 |   |   |   | 52,546 |   |   |   | 51,538 |   |

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**URS        CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS -        UNAUDITED**

**(In        thousands)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **Nine                    Months Ended**     |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **September                    28,****2007** |    |   | **September                    29,****2006** |   |
| Cash                  flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         |    |   |   |   |
| Net                  income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                            | 105,856 |   |   | $ | 86,729 |   |
| Adjustments                  to reconcile net income to net cash from operating                  activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                         |    |   |   |   |   |   |
| Depreciation                  and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                         | 29,779  |   |   |   | 28,208 |   |
| Amortization                  of debt issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                         | 1,286   |   |   |   | 1,382 |   |
| Costs                  incurred for extinguishment of debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | — |   |   |   | 162 |   |
| Provision                  for doubtful accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                         | 2,305   |   |   |   | 5,734 |   |
| Deferred                  income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         | (863    | ) |   |   | (1,011 | ) |
| Stock-based                  compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                         | 20,070  |   |   |   | 12,711 |   |
| Excess                  tax benefits from stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         | (6,489  | ) |   |   | (3,142 | ) |
| Minority                  interest in net income of consolidated subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                         | 3,049   |   |   |   | 437 |   |
| Changes                  in assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                         |    |   |   |   |   |   |
| Accounts                  receivable and costs and accrued earnings in excess of billings                  on                  contracts in process                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                         | (52,878 | ) |   |   | (40,599 | ) |
| Prepaid                  expenses and other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                         | (11,641 | ) |   |   | (26,929 | ) |
| Accounts                  payable, accrued salaries and wages and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         | 69,122  |   |   |   | 2,911 |   |
| Billings                  in excess of costs and accrued earnings on contracts in                  process                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | (14,593 | ) |   |   | 41,086 |   |
| Distributions                  from unconsolidated affiliates, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         | 12,706  |   |   |   | 23,807 |   |
| Other,                  net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         | (8,762  | ) |   |   | (6,636 | ) |
| Total                  adjustments and                  changes                                                                                     |   |                                         | 43,091  |   |   |   | 38,121 |   |
| Net                  cash from operating                  activities                                                                                                                        |   |                                         | 148,947 |   |   |   | 124,850 |   |
| Cash                  flows from investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         |    |   |   |   |   |   |
|      Payment                  for business acquisitions, net of cash acquired                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         | (6,328  | ) |   |   | (5,028 | ) |
| Capital                  expenditures, less equipment purchased through capital leases and                  equipment notes                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         | (22,354 | ) |   |   | (20,833 | ) |
| Net                  cash from investing                  activities                                                                                                                        |   |                                         | (28,682 | ) |   |   | (25,861 | ) |
| Cash                  flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         |    |   |   |   |   |   |
| Long-term                  debt principal payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         | (77,226 | ) |   |   | (123,012 | ) |
| Long-term                  debt borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | — |   |   |   | 552 |   |
| Net                  borrowings (payments) under the lines of credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                         | (3,749  | ) |   |   | 3,072 |   |
| Net                  change in book overdrafts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                         | (3,222  | ) |   |   | 15,590 |   |
| Capital                  lease and equipment note obligation payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         | (9,491  | ) |   |   | (9,635 | ) |
| Excess                  tax benefits from stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                         | 6,489   |   |   |   | 3,142 |   |
| Proceeds                  from employee stock purchase plan and exercise of stock                  options                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | 18,720  |   |   |   | 22,466 |   |
| Tender                  and call premiums paid for debt extinguishment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                         | — |   |   |   | (162 | ) |
| Net                  cash from financing                  activities                                                                                                                        |   |                                         | (68,479 | ) |   |   | (87,987 | ) |
| Net                  increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         | 51,786  |   |   |   | 11,002 |   |
| Cash                  and cash equivalents at beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                         | 89,502  |   |   |   | 101,545 |   |
| Cash                  and cash equivalents at end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                            | 141,288 |   |   | $ | 112,547 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                         |    |   |   |   |   |   |
| Supplemental                  information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                         |    |   |   |   |   |   |
| Interest                  paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                                            | 10,272  |   |   | $ | 13,726 |   |
| Taxes                  paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                            | 53,176  |   |   | $ | 38,757 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                         |    |   |   |   |   |   |
| Supplemental                  schedule of noncash investing and financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                         |    |   |   |   |   |   |
| Fair                  value of assets acquired (net of cash acquired)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                                            | 16,888  |   |   | $ | 7,683 |   |
| Liabilities                  assumed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                         | 127     |   |   |   | 2,655 |   |
| Business                  acquisition (net of cash acquired)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                            | 16,761  |   |   | $ | 5,028 |   |
| Equipment                  acquired through capital lease and equipment note                  obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                            | 13,679  |   |   | $ | 19,504 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS **
**            UNAUDITED**

**NOTE        1.  BUSINESS, BASIS OF PRESENTATION, AND ACCOUNTING        POLICIES**

**Overview**

**Principles        of Consolidation and Basis of Presentation**

*Consolidation of Variable Interest Entities"*

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

**Cash        and Cash Equivalents/Book Overdrafts**

**Earnings        Per Share**

*Share-Based        Payment"*

*Earnings per Share"*

|                                                                 |   | **Three                    Months Ended**                  |   |   | **Nine                    Months Ended**     |   |
|----------------------------------------------------------------------|--------|------------------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                 |   | **September                    28,****2007**               |   |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                 |   | **(In                  thousands, except per share data)** |   |
| Numerator                  — Basic                             |   |                                                       |   |   |                                         |   |   |   |   |   |   |   |
| Net                  income                                          |   | $                                                          | 38,693 |   |                                         | $      | 29,903 |   |   | $ | 105,856 |   |   | $ | 86,729 |   |
| Denominator                  — Basic                           |   |                                                       |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average                  common stock shares outstanding    |   |                                                       | 51,944 |   |                                         |   | 50,945 |   |   |   | 51,559 |   |   |   | 50,627 |   |
| Basic                  earnings per share                            |   | $                                                          | .74    |   |                                         | $      | .59 |   |   | $ | 2.05 |   |   | $ | 1.71 |   |
| Numerator —                  Diluted                      |   |                                                       |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                          |   | $                                                          | 38,693 |   |                                         | $      | 29,903 |   |   | $ | 105,856 |   |   | $ | 86,729 |   |
| Denominator —                  Diluted                    |   |                                                       |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average                  common stock shares outstanding    |   |                                                       | 51,944 |   |                                         |   | 50,945 |   |   |   | 51,559 |   |   |   | 50,627 |   |
| Effect                  of dilutive securities                       |   |                                                       |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  options and restricted stock awards and units |   |                                                       | 807    |   |                                         |   | 828 |   |   |   | 987 |   |   |   | 911 |   |
|                                                                 |   |                                                       | 52,751 |   |                                         |   | 51,773 |   |   |   | 52,546 |   |   |   | 51,538 |   |
| Diluted                  earnings per share                          |   | $                                                          | .73    |   |                                         | $      | .58 |   |   | $ | 2.01 |   |   | $ | 1.68 |   |

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**URS              CORPORATION AND SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS **
** UNAUDITED              (Continued)**

|                                                                                                         |   | **September                  28,****2007** |   |   | **September                  29,****2006** |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                                                                         |   | **(In                  thousands)**        |   |
| Anti-dilutive                  stock options and unvested restricted stock awards and                  units |   |                                       | 44     |   |                                       |   | 846 |   |

**Adopted        and Recently Issued Statements of Financial Accounting        Standards**

We        adopted the Financial Accounting Standards Board's        Interpretation No. 48, "*Accounting for Uncertainty in Income Taxes, an        interpretation of FASB Statement No. 109,"* ("FIN 48"), effective December        30, 2006, which is the beginning of our 2007 fiscal year. FIN 48 prescribes        a        recognition threshold and measurement process for recording, as liabilities        in        the financial statements, uncertain tax positions taken or expected to be        taken        in a tax return. Additionally, FIN 48 establishes rules for recognition or        de-recognition and measurement and classification of such liabilities; accruals        of interest and penalties; accounting for changes in judgment in interim        periods; and disclosure requirements for uncertain tax positions. Under FIN        48,        we must recognize the impact of an uncertain income tax position on the income        tax return at the largest amount that is more-likely-than-not to be sustained        upon audit by the relevant taxing authority. FIN 48 requires that we report        the        cumulative effect of applying the interpretation as an adjustment to the        beginning balance of retained earnings as of December 30, 2006. A more detailed        discussion of the effect of the adoption of FIN 48 is included in Note 8,        "Income Taxes."

*How Taxes Collected from Customers and        Remitted to Governmental Authorities should be Presented in the Income        Statement*

*Fair Value Measurement,"*

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS **
** UNAUDITED            (Continued)**

*Employers' Accounting for        Defined Benefit Pension and Other Postretirement Plans,"*

*The Fair Value Option for        Financial Assets and Financial Liabilities*

**NOTE        2. PROPOSED MERGER**

On        May 27, 2007, we entered into a definitive merger agreement to        acquire Washington Group International ("WGI"), an international provider        of a        broad range of design, engineering, construction, construction management,        facilities and operations management, environmental remediation and mining        services.

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

**Costs        Related to the WGI        Acquisition**

**New        Senior Credit Facility**

In        order to complete the proposed merger with WGI, we have obtained a        commitment from Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank,        N.A.,        for the funding of approximately $2.1 billion of new term loans and senior        secured revolving debt financing. The financing commitment letter also includes        customary conditions to funding, including, without limitation, satisfaction        of        the conditions to closing of the merger as set forth in the merger agreement,        the absence of any material adverse effect on WGI or its subsidiaries, taken        as        a whole, obtaining credit rating, a maximum ratio of pro forma combined total        debt to combined pro forma EBITDA of 3.50 to 1.00 on the closing date, the        accuracy of certain representations and warranties of the parties, customary        legal documentation, and repayment of WGI's credit facilities. Proceeds from        the        initial financing will be used, in part, to fund the cash portion of the        consideration to be paid to WGI's stockholders, as well as to refinance our        existing senior credit facilities and, if any, the amounts outstanding under        WGI's credit facilities. As of September 28, 2007, we had $39.0 million        outstanding under our existing senior credit facility. Assuming        completion of the proposed merger and related debt financing, we expect that        we        would have approximately $1.4 billion outstanding under the new term loans        for the combined company.

**NOTE        3.  PROPERTY AND EQUIPMENT AND GOODWILL**

**Property        and Equipment**

|                                                       |   | **September                    28,****2007** |     |   | **December                  29,****2006** |   |
|------------------------------------------------------------|--------|----------------------------------------------|----------|--------|-------------------------------------------|--------|
|                                                       |   | **(In                  thousands)**          |     |
| Equipment                                                  |   | $                                            | 298,773  |   |                                      | $      | 271,593 |   |
| Furniture                  and fixtures                    |   |                                         | 46,744   |   |                                      |   | 44,328 |   |
| Leasehold                  improvements                    |   |                                         | 53,857   |   |                                      |   | 47,431 |   |
| Construction                  in progress                  |   |                                         | 9,471    |   |                                      |   | 8,897 |   |
|                                                       |   |                                         | 408,845  |   |                                      |   | 372,249 |   |
| Accumulated                  depreciation and amortization |   |                                         | (236,681 | )      |                                      |   | (209,107 | ) |
| Property                  and equipment at cost, net       |   | $                                            | 172,164  |   |                                      | $      | 163,142 |   |

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**NOTES                TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED                (Continued)**

|                                    | **Estimated                  Useful Life**      |
|-----------------------------------------|-------------------------------------------------|
| Equipment                               | 4                  –  10 years  |
| Capital                  leases         | 3 –                  10 years        |
| Furniture                  and fixtures | 5 –                  10 years        |
| Leasehold                  improvements | 6                  months – 20 years |

|                                  |   | **Three                    Months Ended** |   |   | **Nine                    Months Ended**  |   |
|---------------------------------------|--------|-------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                  |   | **September                    28, 2007** |   |   | **September                    29, 2006** |   |   | **September                    28, 2007** |   |   | **September                    29, 2006** |   |
|                                  |   | **(In                  millions)**        |   |
|                                  |   |                                      |   |   |                                      |   |   |   |   |   |   |   |
| Depreciation                  expense |   | $                                         | 9.8    |   |                                      | $      | 8.5 |   |   | $ | 29.0 |   |   | $ | 26.9 |   |
| Amortization                  expense |   | $                                         | 0.3    |   |                                      | $      | 0.4 |   |   | $ | 0.8 |   |   | $ | 1.3 |   |

**Goodwill**

**Business        Combination**

**NOTE        4. EMPLOYEE RETIREMENT PLANS**

**Executive        Plan**

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**NOTES                TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED                (Continued)**

|                                                                                                                                                                                                                                                                                 |   | **Three                    Months Ended**    |   |   | **Nine                    Months Ended**     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                 |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                                                                 |   | **(In                  thousands)**          |   |
| Amortization                  of net (gain)/loss                                                                                                                                                                                                                                     |   | $                                            | (2     | )      |                                         | $      | 8 |   |   | $ | (6 | ) |   | $ | 24 |   |
| Service                  cost                                           |   |                                         | 172    |   |                                         |   | **—** |   |   |   | 516 |   |   |   | **—** |   |
| Interest                  cost                                          |   |                                         | 153    |   |                                         |   | 140 |   |   |   | 459 |   |   |   | 420 |   |
| Net                  periodic benefit cost                                                                                                                                                                                                                                           |   | $                                            | 323    |   |                                         | $      | 148 |   |   | $ | 969 |   |   | $ | 444 |   |

**Radian        SERP and SCA**

|                                                                                                                                                                                                                                                                     |   | **Three                    Months Ended**    |        |   | **Nine                    Months Ended**     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                     |   | **September                    28,****2007** |        |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                                                     |   | **(In                  thousands)**          |        |
| Amortization                  of net loss                                                                                                                                                                                                                                |   | $                                            | 17          |   |                                         | $      | 17 |   |   | $ | 51 |   |   | $ | 51 |   |
| Service                  cost                                         |   |                                         | **—** |   |                                         |   | **—** |   |   |   | 2 |   |   |   | **—** |   |
| Interest                  cost                                        |   |                                         | 154         |   |                                         |   | 157 |   |   |   | 462 |   |   |   | 471 |   |
| Net                  periodic benefit cost                                                                                                                                                                                                                               |   | $                                            | 171         |   |                                         | $      | 174 |   |   | $ | 515 |   |   | $ | 522 |   |

**Final        Salary Pension Fund**

|                                                                                                                                                                                                                                                                                               |   | **Three                    Months Ended**    |        |   | **Nine                    Months Ended**     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                               |   | **September                    28,****2007** |        |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                                                                               |   | **(In                  thousands)**          |        |
| Service                  cost                  (1)                                         |   | $                                            | **—** |   |                                         | $      | 199 |   |   | $ | **—** |   |   | $ | 581 |   |
| Interest                  cost                                                             |   |                                         | 286         |   |                                         |   | 231 |   |   |   | 843 |   |   |   | 673 |   |
| Expected                  return on plan assets                                                                                                                                                                                                                                                    |   |                                         | (131        | )      |                                         |   | (107 | ) |   |   | (386 | ) |   |   | (313 | ) |
| Amortization                  of:                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Transition                  obligation                                                                    |   |                                         | **—** |   |                                         |   | 21 |   |   |   | **—** |   |   |   | 61 |   |
| Net                  loss                                                                                 |   |                                         | 50          |   |                                         |   | 48 |   |   |   | 147 |   |   |   | 141 |   |
| Net                  periodic benefit cost (2)                                                                                                                                                                                                                                                     |   | $                                            | 205         |   |                                         | $      | 392 |   |   | $ | 604 |   |   | $ | 1,143 |   |

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**URS                  CORPORATION AND                  SUBSIDIARIES**

**NOTES                TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED                (Continued)**

| (1)   | Pursuant                  to a formal curtailment plan effective in December 2006, we eliminated                  the                  accrual of defined benefits for all future services and, therefore,                  we                  incurred no service costs related to the Final Salary Pension Fund                  for the                  three months and the nine months ended September 28,                  2007. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | We                  used the current rate method in translating our net periodic pension                  costs                  to the US dollar. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

**EG&G        Pension Plan and Post-retirement Medical Plan**

*EG&G        Pension Plan*

|                                                                                                                                                                                                                                                                               |   | **Three                    Months Ended**    |   |   | **Nine                    Months Ended**     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                               |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                                                               |   | **(In                  thousands)**          |   |
| Service                  cost                                              |   | $                                            | 1,750  |   |                                         | $      | 2,050 |   |   | $ | 5,250 |   |   | $ | 5,700 |   |
| Interest                  cost                                             |   |                                         | 2,500  |   |                                         |   | 2,125 |   |   |   | 7,500 |   |   |   | 6,825 |   |
| Expected                  return on plan assets                                                                                                                                                                                                                                    |   |                                         | (2,850 | )      |                                         |   | (3,200 | ) |   |   | (8,550 | ) |   |   | (7,800 | ) |
| Amortization                  of:                                                                                                                                                                                                                                                  |   |                                         |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Prior                  service                  cost                                      |   |                                         | (525   | )      |                                         |   | (525 | ) |   |   | (1,575 | ) |   |   | (1,575 | ) |
| Net                  loss                                                                 |   |                                         | 250    |   |                                         |   | (100 | ) |   |   | 750 |   |   |   | 750 |   |
| Net                  periodic benefit cost                                                                                                                                                                                                                                         |   | $                                            | 1,125  |   |                                         | $      | 350 |   |   | $ | 3,375 |   |   | $ | 3,900 |   |

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**URS              CORPORATION AND SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

*EG&G        Post-retirement Medical Plan*

|                                                                                                                                                                                                                                                                           |   | **Three                    Months Ended**    |   |   | **Nine                    Months Ended**     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                           |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                                                           |   | **(In                  thousands)**          |   |
| Service                  cost                                          |   | $                                            | 65     |   |                                         | $      | 75 |   |   | $ | 195 |   |   | $ | 225 |   |
| Interest                  cost                                         |   |                                         | 79     |   |                                         |   | 76 |   |   |   | 237 |   |   |   | 228 |   |
| Expected                  return on plan assets                                                                                                                                                                                                                                |   |                                         | (75    | )      |                                         |   | (59 | ) |   |   | (225 | ) |   |   | (177 | ) |
| Amortization                  of:                                                                                                                                                                                                                                              |   |                                         |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                             |   |                                         | 10     |   |                                         |   | **—** |   |   |   | 30 |   |   |   | **—** |   |
| Net                  periodic benefit cost                                                                                                                                                                                                                                     |   | $                                            | 79     |   |                                         | $      | 92 |   |   | $ | 237 |   |   | $ | 276 |   |

**NOTE        5. LONG-TERM DEBT**

|                                                                        |   | **September                    28,****2007** |   |   | **December                    29, ****2006** |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|---------------------------------------------------|--------|
|                                                                        |   | **(In                  thousands)**          |   |
|                                                                        |   |                                         |   |   |                                              |   |
| Bank                  term loans                                            |   | $                                            | 39,000 |   |                                              | $      | 114,000 |   |
| Obligations                  under capital leases and equipment notes       |   |                                         | 50,136 |   |                                              |   | 46,688 |   |
| Notes                  payable, foreign credit lines and other indebtedness |   |                                         | 2,842  |   |                                              |   | 7,926 |   |
| Total                  current and long-term debt                           |   |                                         | 91,978 |   |                                              |   | 168,614 |   |
| Less:                                                                       |   |                                         |   |   |                                              |   |   |   |
|  Current                  portion of long-term debt                    |   |                                         | 18,533 |   |                                              |   | 19,120 |   |
| Long-term                  debt                                             |   | $                                            | 73,445 |   |                                              | $      | 149,494 |   |

**Credit        Facility**

Our        senior credit facility ("Credit Facility") consists of a        six-year term loan of $350.0 million, and a five-year revolving line of credit        of $300.0 million, against which up to $200.0 million is available to issue        letters of credit. As of September 28, 2007, we had $39.0 million outstanding        under the term loan, $63.3 million outstanding in letters of credit and no        amount outstanding under the revolving line of credit.

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**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

A        summary of our revolving line of credit information is as        follows:

|                                                                                                    |   | **Three                    Months Ended****September                    28, 2007** |   |   | **Three                    Months Ended****September                    29, 2006** |   |
|---------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|
|                                                                                                    |   | **(In                  millions, except percentages)**                             |   |
| Effective                  average interest rates paid on the revolving line of                  credit |   |                                                                               | 8.2    | %      |                                                                               |   | 8.0 | % |
| Average                  daily revolving line of credit balances                                        |   | $                                                                                  | 0.2    |   |                                                                               | $      | 0.3 |   |
| Maximum                  amounts outstanding at any one point                                           |   | $                                                                                  | 4.7    |   |                                                                               | $      | 6.5 |   |
|                                                                                                    |   |                                                                               |   |   |                                                                               |   |   |   |
|                                                                                                    |   | **Nine                    Months Ended****September                    28, 2007**  |   |   | **Nine                    Months Ended****September                    29, 2006**  |   |
|                                                                                                    |   | **(In                  millions, except percentages)**                             |   |
| Effective                  average interest rates paid on the revolving line of                  credit |   |                                                                               | 8.2    | %      |                                                                               |   | 7.5 | % |
| Average                  daily revolving line of credit balances                                        |   | $                                                                                  | 3.0    |   |                                                                               | $      | 0.5 |   |
| Maximum                  amounts outstanding at any one point                                           |   | $                                                                                  | 40.3   |   |                                                                               | $      | 21.8 |   |
|                                                                                                    |   |                                                                               |   |   |                                                                               |   |   |   |

**Other        Indebtedness**

*Notes        payable, foreign credit lines and other indebtedness. *
As of September 28, 2007 and        December 29, 2006, we had        outstanding amounts of $2.8 million and $7.9 million, respectively, in notes        payable and foreign lines of credit. Notes payable consists primarily of        notes        used to finance the purchase of office equipment, computer equipment and        furniture. The weighted average interest rates of these notes were approximately        6.5% and 6.1% as of September 28, 2007 and December 29, 2006,        respectively.

*Capital        leases and equipment notes*

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

**Maturities**

| **(In                  thousands)**                                                                                                                                                                                                                                                                                    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Less                  than one                  year                                            |   | $ | 2,047 |   |
| Second                  year                                                                    |   |   | 6,040 |   |
| Third                  year                                                                     |   |   | 8,081 |   |
| Fourth                  year                                                                    |   |   | 25,578 |   |
| Fifth                  year                                                                     |   |   | 96 |   |
|                                                                                                                                                                                                                                                                                                                   |   | $ | 41,842 |   |
|                                                                                                                                                                                                                                                                                                                   |   |   |   |   |

**NOTE        6. COMMITMENTS AND CONTINGENCIES**

| ▪      | *Saudi                  Arabia:* One of our subsidiaries, LSI, provided aircraft maintenance                  support services on F-5 aircraft under contracts (the "F-5 Contract")                  with                  a Saudi Arabian government ministry (the "Ministry"). LSI completed                  its                  operational performance under the F-5 Contract in November 2000                  and the                  Ministry has yet to pay a $12.2 million account receivable owed                  to LSI. In                  addition, in 2004, the Ministry directed payment of a performance                  bond                  outstanding under the F-5 contract for approximately $5.6 million.                  The                  following legal proceedings ensued: |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

| ▪                       | *Lebanon:*                  Our 1999 acquisition of Dames and Moore Group, Inc. included the                  acquisition of a wholly owned subsidiary, Radian International,                  LLC                  ("Radian"). Prior to the acquisition, Radian entered into a contract                  with                  the Lebanese Company for the Development and Reconstruction of                  Beirut                  Central District, S.A.L ("Solidere"). Under the contract, Radian                  was to                  provide environmental remediation services at the Normandy Landfill                  site                  located in Beirut, Lebanon (the "Normandy Project"). Radian subcontracted                  a portion of these services to Mouawad - Edde SARL. The contract with                  Solidere required the posting of a Letter of Guarantee, which was                  issued                  by Saradar Bank, Sh.M.L. ("Saradar") for $8.5 million. Solidere                  drew upon                  the full value of the Letter of Guarantee. The contract also provided                  for                  the purchase of project-specific insurance. The project-specific                  insurance                  policy was issued by Alpina Insurance Company                  ("Alpina"). |
|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Since                  the July 2004 ruling, numerous other legal actions have been initiated.                  On                  January 20, 2006, Radian initiated a new ICC arbitration proceeding                  against Solidere alleging, in part, that Solidere's lack of cooperation                  prevented Radian from complying with the July 2004 ruling. In response                  to                  Radian's January 20, 2006 filing, Solidere terminated Radian's                  contract                  and, on February 13, 2006, initiated a separate ICC arbitration                  proceeding                  against both Radian and URS Corporation, a Delaware corporation                  (DE), the                  indirect parent of Radian, claiming that URS Corporation (DE) is                  responsible for Radian's liabilities because both entities operated                  as a                  single economic enterprise. Solidere's February 13, 2006 filing                  seeks to                  recover the costs to remediate the Normandy Site, damages resulting                  from                  delays in project completion, and past and future legal costs.                  On February                  20, 2006, Radian amended its January 20, 2006 filing to include                  Solidere's                  unwarranted termination of Radian's                  contract. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

| ▪                       | *Tampa-Hillsborough                  County Expressway Authority:*  In 1999, URS Corporation                  Southern, our wholly owned subsidiary, entered into an agreement                  ("Agreement") with the Tampa-Hillsborough County Expressway Authority                  (the                  "Authority") to provide foundation design, project oversight and                  other                  services in connection with the construction of the Lee Roy Selmon                  Elevated Expressway structure (the "Expressway") in Tampa, Florida.                  Also,                  URS Holdings, Inc., our wholly owned subsidiary, entered into a                  subcontract agreement with an unrelated third party to provide                  geotechnical services in connection with the construction of roads                  to                  access the Expressway. In 2004, during construction of the elevated                  structure, one pier subsided substantially, causing significant                  damage to                  a segment of the elevated structure, though no significant injuries                  occurred as a result of the incident. The Authority has completed                  remediation of the Expressway. |
|---------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

* *

| ▪                       | *Rocky                  Mountain Arsenal:*  In January 2002, URS Group, Inc., our                  wholly owned subsidiary, was awarded a contract by Foster Wheeler                  Environmental, Inc., to perform, among other things, foundation                  demolition                  and remediation of contaminated soil at the Rocky Mountain Arsenal                  in                  Colorado. URS Group, Inc. believes that contractual misrepresentations                  by                  Foster Wheeler Environmental resulted in our contract cost overruns                  in                  excess of $10.0 million, of which $4.4 million is included in our                  costs                  and accrued earnings in excess of billings on contracts in process.                  In                  October 2004, URS Group, Inc. filed a complaint asserting a breach                  of                  contract seeking recovery of the cost overruns against Foster Wheeler                  Environmental, and Tetra Tech FW, Inc. both subsidiaries of Tetra                  Tech,                  Inc. ("Tetra"), in District Court for the County of Denver in the                  State of                  Colorado. In June 2006, a $1.1 million judgment was issued by the                  District                  Court against Tetra on the matter. However, URS Group, Inc. believes                  that                  the judgment, even though issued in its favor, did not adequately                  address                  the underlying merits of URS Group Inc.'s claims and therefore,                  URS Group,                  Inc. appealed the judgment to the Colorado Court of Appeals in                  June 2006.                  URS Group, Inc. intends to continue our vigorous attempt to collect                  the                  contract cost overruns of $10.0                  million. |
|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ▪                       | *Minneapolis                  Bridge:* The collapse of the I-35W bridge in Minneapolis, Minnesota,                  on August 1, 2007, has been widely publicized. In 2003, the Minnesota                  Department of Transportation retained us to provide engineering                  analyses                  of the I-35W bridge. We had issued draft reports pursuant to this                  engagement and our services to the Minnesota Department of Transportation                  were ongoing at the time of the collapse. We were not involved                  in the                  original design or construction of the I-35W bridge, nor were we                  involved                  in any of the maintenance and construction work being performed                  on the                  bridge when the collapse occurred. Investigations are underway,                  but at                  this time, there is insufficient information to determine the cause                  or                  causes of, or potential liabilities associated with, the collapse.                  It is                  possible, however, that claims relating to the collapse will be                  made                  against us because of our work for the Minnesota Department of                  Transportation. The outcome of any such claims, if made, or their                  possible                  impacts on us cannot be determined at this                  time. |
|---------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

| ▪                       | *130                  Liberty Street*:  On August 18, 2007, two New York City                  firemen lost their lives fighting a fire at a skyscraper undergoing                  decontamination and deconstruction at 130 Liberty Street in New                  York                  City.  One of our subsidiaries, URS Corporation - New York,                  had been retained before the accident by the 130 Liberty Street                  property                  owner to advise, monitor and report on the general contractor's                  performance as well as its compliance with the project's contractual                  requirements. In August 2007, the Manhattan District Attorney served                  subpoenas related to this accident on the property owner, URS                  Corporation - New York, the general contractor and its principal                  subcontractors, as well as the City of New York. The outcome of                  the                  investigation, as well as any potential claims, if made, or their                  possible                  impacts on us cannot be determined at this                  time. |
|---------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

**NOTE        7. SEGMENT AND RELATED INFORMATION**

|                                                                                                                                                         |   | **September                  28, 2007**      |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|
|                                                                                                                                                         |   | **Net                  Accounts Receivable** |        |   | **Property                  and Equipment at Cost, Net** |   |   | **Total                  Assets** |   |
|                                                                                                                                                         |   | **(In                  thousands)**          |        |
| URS                  Division                                                                                                                                |   | $                                            | 974,575     |   |   | $ | 151,924 |   |   | $ | 1,322,067 |   |
| EG&G                  Division                                                                                                                           |   |                                         | 250,993     |   |   |   | 16,471 |   |   |   | 292,367 |   |
|                                                                                                                                                         |   |                                         | 1,225,568   |   |   |   | 168,395 |   |   |   | 1,614,434 |   |
| Corporate                            |   |                                         | **—** |   |   |   | 3,769 |   |   |   | 1,848,720 |   |
| Eliminations                         |   |                                         | **—** |   |   |   | **—** |   |   |   | (742,283 | ) |
| Total                                               |   | $                                            | 1,225,568   |   |   | $ | 172,164 |   |   | $ | 2,720,871 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

|                                                                                                                                                         |   | **December                  29, 2006**       |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|
|                                                                                                                                                         |   | **Net                  Accounts Receivable** |        |   | **Property                  and Equipment at Cost, Net** |   |   | **Total                  Assets** |   |
|                                                                                                                                                         |   | **(In                  thousands)**          |        |
| URS                  Division                                                                                                                                |   | $                                            | 908,038     |   |   | $ | 145,732 |   |   | $ | 1,229,156 |   |
| EG&G                  Division                                                                                                                           |   |                                         | 274,661     |   |   |   | 13,173 |   |   |   | 306,336 |   |
|                                                                                                                                                         |   |                                         | 1,182,699   |   |   |   | 158,905 |   |   |   | 1,535,492 |   |
| Corporate                            |   |                                         | **—** |   |   |   | 4,237 |   |   |   | 1,699,534 |   |
| Eliminations                         |   |                                         | **—** |   |   |   | **—** |   |   |   | (653,997 | ) |
| Total                                               |   | $                                            | 1,182,699   |   |   | $ | 163,142 |   |   | $ | 2,581,029 |   |

|                                                                                                                                                         |   | **Three                  Months Ended****September                  28, 2007** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|-------------|
|                                                                                                                                                         |   | **Revenues**                                                                   |        |   | **Inter-segment                  Revenues** |   |   | **Consolidated** |   |
|                                                                                                                                                         |   | **(In                  thousands)**                                            |        |
| URS                  Division                                                                                                                                |   | $                                                                              | 888,463     |   |   | $ | 1,671 |   |   | $ | 890,134 |   |
| EG&G                  Division                                                                                                                           |   |                                                                           | 383,819     |   |   |   | 751 |   |   |   | 384,570 |   |
| Eliminations                         |   |                                                                           | **—** |   |   |   | (2,422 | ) |   |   | (2,422 | ) |
| Total                                               |   | $                                                                              | 1,272,282   |   |   | $ | **—** |   |   | $ | 1,272,282 |   |

|                                                                                                                                                         |   | **Three                  Months Ended September 29, 2006** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|-------------|
|                                                                                                                                                         |   | **Revenues**                                               |        |   | **Inter-segment                  Revenues** |   |   | **Consolidated** |   |
|                                                                                                                                                         |   | **(In                  thousands)**                        |        |
| URS                  Division                                                                                                                                |   | $                                                          | 728,273     |   |   | $ | 1,812 |   |   | $ | 730,085 |   |
| EG&G                  Division                                                                                                                           |   |                                                       | 357,331     |   |   |   | 840 |   |   |   | 358,171 |   |
| Eliminations                         |   |                                                       | **—** |   |   |   | (2,652 | ) |   |   | (2,652 | ) |
| Total                                               |   | $                                                          | 1,085,604   |   |   | $ | **—** |   |   | $ | 1,085,604 |   |

|                                                                                                                                                         |   | **Nine                  Months Ended September 28, 2007** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|-------------|
|                                                                                                                                                         |   | **Revenues**                                              |        |   | **Inter-segment                  Revenues** |   |   | **Consolidated** |   |
|                                                                                                                                                         |   | **(In                  thousands)**                       |        |
| URS                  Division                                                                                                                                |   | $                                                         | 2,550,964   |   |   | $ | 5,953 |   |   | $ | 2,556,917 |   |
| EG&G                  Division                                                                                                                           |   |                                                      | 1,103,711   |   |   |   | 3,712 |   |   |   | 1,107,423 |   |
| Eliminations                         |   |                                                      | **—** |   |   |   | (9,665 | ) |   |   | (9,665 | ) |
| Total                                               |   | $                                                         | 3,654,675   |   |   | $ | **—** |   |   | $ | 3,654,675 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

|                                                                                                                                                         |   | **Nine                  Months Ended****September                  29, 2006** |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|-------------|
|                                                                                                                                                         |   | **Revenues**                                                                  |        |   | **Inter-segment                  Revenues** |   |   | **Consolidated** |   |
|                                                                                                                                                         |   | **(In                  thousands)**                                           |        |
| URS                  Division                                                                                                                                |   | $                                                                             | 2,052,442   |   |   | $ | 10,542 |   |   | $ | 2,062,984 |   |
| EG&G                  Division                                                                                                                           |   |                                                                          | 1,101,302   |   |   |   | 2,500 |   |   |   | 1,103,802 |   |
| Eliminations                         |   |                                                                          | **—** |   |   |   | (13,042 | ) |   |   | (13,042 | ) |
| Total                                               |   | $                                                                             | 3,153,744   |   |   | $ | **—** |   |   | $ | 3,153,744 |   |

|                               |   | **Three                    Months Ended****September                    28, 2007** |    |
|------------------------------------|--------|------------------------------------------------------------------------------------|---------|
|                               |   | **Contribution**                                                                   |    |   | **Depreciation                    and Amortization** |   |
|                               |   | **(In                  thousands)**                                                |    |
| URS                  Division      |   | $                                                                                  | 62,934  |   |   | $ | 8,899 |   |
| EG&G                  Division |   |                                                                               | 21,482  |   |   |   | 909 |   |
| Eliminations                       |   |                                                                               | (166    | ) |   |   | **—** |   |
|                               |   |                                                                               | 84,250  |   |   |   | 9,808 |   |
| Corporate                          |   |                                                                               | (19,337 | ) |   |   | 255 |   |
| Total                              |   | $                                                                                  | 64,913  |   |   | $ | 10,063 |   |

|                               |   | **Three                    Months Ended****September                    29, 2006** |    |
|------------------------------------|--------|------------------------------------------------------------------------------------|---------|
|                               |   | **Contribution**                                                                   |    |   | **Depreciation                    and Amortization** |   |
|                               |   | **(In                  thousands)**                                                |    |
| URS                  Division      |   | $                                                                                  | 52,285  |   |   | $ | 7,670 |   |
| EG&G                  Division |   |                                                                               | 20,806  |   |   |   | 1,015 |   |
| Eliminations                       |   |                                                                               | (160    | ) |   |   | **—** |   |
|                               |   |                                                                               | 72,931  |   |   |   | 8,685 |   |
| Corporate                          |   |                                                                               | (18,708 | ) |   |   | 244 |   |
| Total                              |   | $                                                                                  | 54,223  |   |   | $ | 8,929 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS **—**            UNAUDITED            (Continued)**

|                               |   | **Nine                    Months Ended****September                    28, 2007** |    |
|------------------------------------|--------|-----------------------------------------------------------------------------------|---------|
|                               |   | **Contribution**                                                                  |    |   | **Depreciation                    and Amortization** |   |
|                               |   | **(In                  thousands)**                                               |    |
| URS                  Division      |   | $                                                                                 | 179,685 |   |   | $ | 26,015 |   |
| EG&G                  Division |   |                                                                              | 61,663  |   |   |   | 3,016 |   |
| Eliminations                       |   |                                                                              | (795    | ) |   |   | **—** |   |
|                               |   |                                                                              | 240,553 |   |   |   | 29,031 |   |
| Corporate                          |   |                                                                              | (60,837 | ) |   |   | 748 |   |
| Total                              |   | $                                                                                 | 179,716 |   |   | $ | 29,779 |   |

|                               |   | **Nine                    Months Ended****September                    29, 2006** |    |
|------------------------------------|--------|-----------------------------------------------------------------------------------|---------|
|                               |   | **Contribution**                                                                  |    |   | **Depreciation                    and Amortization** |   |
|                               |   | **(In                  thousands)**                                               |    |
| URS                  Division      |   | $                                                                                 | 148,691 |   |   | $ | 24,379 |   |
| EG&G                  Division |   |                                                                              | 60,359  |   |   |   | 3,098 |   |
| Eliminations                       |   |                                                                              | (814    | ) |   |   | **—** |   |
|                               |   |                                                                              | 208,236 |   |   |   | 27,477 |   |
| Corporate                          |   |                                                                              | (55,927 | ) |   |   | 731 |   |
| Total                              |   | $                                                                                 | 152,309 |   |   | $ | 28,208 |   |

|                                                      |   | **Three                    Months Ended September 28, 2007** |   |
|-----------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                      |   | **URS****Division**                                          |   |   | **EG&G****Division** |   |   | **Corporate** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                      |   | **(In                  thousands)**                          |   |
| Contribution                                              |   | $                                                            | 62,934 |   |   | $ | 21,482 |   |   | $ | (19,337 | ) |   | $ | (166 | ) |   | $ | 64,913 |   |
| Minority                  Interest                        |   |                                                         | 1,822  |   |   |   | **—** |   |   |   | **—** |   |   |   | **—** |   |   |   | 1,822 |   |
| Unallocated                  SFAS 123(R) expenses         |   |                                                         | (2,875 | ) |   |   | (810 | ) |   |   | 3,685 |   |   |   | **—** |   |   |   | **—** |   |
| Other                  miscellaneous unallocated expenses |   |                                                         | 359    |   |   |   | (113 | ) |   |   | 2,689 |   |   |   | **—** |   |   |   | 2,935 |   |
| Operating                  income (loss)                  |   | $                                                            | 62,240 |   |   | $ | 20,559 |   |   | $ | (12,963 | ) |   | $ | (166 | ) |   | $ | 69,670 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

|                                                      |   | **Three                    Months Ended September 29, 2006** |   |
|-----------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                      |   | **URS****Division**                                          |   |   | **EG&G****Division** |   |   | **Corporate** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                      |   | **(In                  thousands)**                          |   |
| Contribution                                              |   | $                                                            | 52,285 |   |   | $ | 20,806 |   |   | $ | (18,708 | ) |   | $ | (160 | ) |   | $ | 54,223 |   |
| Minority                  Interest                        |   |                                                         | (22    | ) |   |   | **—** |   |   |   | **—** |   |   |   | **—** |   |   |   | (22 | ) |
| Unallocated                  SFAS 123(R) expenses         |   |                                                         | (2,573 | ) |   |   | (648 | ) |   |   | 3,221 |   |   |   | **—** |   |   |   | **—** |   |
| Other                  miscellaneous unallocated expenses |   |                                                         | 389    |   |   |   | (902 | ) |   |   | 5,274 |   |   |   | **—** |   |   |   | 4,761 |   |
| Operating                  income (loss)                  |   | $                                                            | 50,079 |   |   | $ | 19,256 |   |   | $ | (10,213 | ) |   | $ | (160 | ) |   | $ | 58,962 |   |

|                                                      |   | **Nine                    Months Ended September 28, 2007** |    |
|-----------------------------------------------------------|--------|-------------------------------------------------------------|---------|
|                                                      |   | **URS****Division**                                         |    |   | **EG&G****Division** |   |   | **Corporate** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                      |   | **(In                  thousands)**                         |    |
| Contribution                                              |   | $                                                           | 179,685 |   |   | $ | 61,663 |   |   | $ | (60,837 | ) |   | $ | (795 | ) |   | $ | 179,716 |   |
| Minority                  Interest                        |   |                                                        | 5,176   |   |   |   | **—** |   |   |   | **—** |   |   |   | **—** |   |   |   | 5,176 |   |
| Unallocated                  SFAS 123(R) expenses         |   |                                                        | (8,571  | ) |   |   | (2,194 | ) |   |   | 10,765 |   |   |   | **—** |   |   |   | **—** |   |
| Other                  miscellaneous unallocated expenses |   |                                                        | 2,166   |   |   |   | (741 | ) |   |   | 9,501 |   |   |   | **—** |   |   |   | 10,926 |   |
| Operating                  income (loss)                  |   | $                                                           | 178,456 |   |   | $ | 58,728 |   |   | $ | (40,571 | ) |   | $ | (795 | ) |   | $ | 195,818 |   |

|                                                      |   | **Nine                    Months Ended September 29, 2006** |    |
|-----------------------------------------------------------|--------|-------------------------------------------------------------|---------|
|                                                      |   | **URS**** Division**                                   |    |   | **EG&G****Division** |   |   | **Corporate** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                      |   | **(In                  thousands)**                         |    |
| Contribution                                              |   | $                                                           | 148,691 |   |   | $ | 60,359 |   |   | $ | (55,927 | ) |   | $ | (814 | ) |   | $ | 152,309 |   |
| Minority                  Interest                        |   |                                                        | 767     |   |   |   | **—** |   |   |   | **—** |   |   |   | **—** |   |   |   | 767 |   |
| Unallocated                  SFAS 123(R) expenses         |   |                                                        | (8,132  | ) |   |   | (1,669 | ) |   |   | 9,801 |   |   |   | **—** |   |   |   | **—** |   |
| Other                  miscellaneous unallocated expenses |   |                                                        | 1,626   |   |   |   | (1,319 | ) |   |   | 15,439 |   |   |   | **—** |   |   |   | 15,746 |   |
| Operating                  income (loss)                  |   | $                                                           | 142,952 |   |   | $ | 57,371 |   |   | $ | (30,687 | ) |   | $ | (814 | ) |   | $ | 168,822 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

**Geographic        areas**

|                                                                                                                                                                                                                                              |   | **Three                    Months Ended**    |      |   | **Nine                    Months Ended**     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-----------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                              |   | **September                    28,****2007** |      |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                                                                                                                              |   | **(In                  thousands)**          |      |
| Revenues                                                                                                                                                                                                                                          |   |                                         |      |   |                                         |   |   |   |   |   |   |   |
| United                  States                                               |   | $                                            | 1,151,391 |   |                                         | $      | 984,769 |   |   | $ | 3,304,794 |   |   | $ | 2,864,411 |   |
| International                                                                |   |                                         | 133,776   |   |                                         |   | 103,125 |   |   |   | 373,688 |   |   |   | 294,982 |   |
| Eliminations                                                                 |   |                                         | (12,885   | )      |                                         |   | (2,290 | ) |   |   | (23,807 | ) |   |   | (5,649 | ) |
| Total                  revenues                                    |   | $                                            | 1,272,282 |   |                                         | $      | 1,085,604 |   |   | $ | 3,654,675 |   |   | $ | 3,153,744 |   |

|                                                                                                                                                                                                                                                                                                                                                                                 |   | **September                    28,****2007** |    |   | **December                    29, 2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|--------|------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                 |   | **(In                  thousands)**          |    |
| Property                  and equipment at cost, net                                                                                                                                                                                                                                                                                                                                 |   |                                         |    |   |                                     |   |
| United                  States                                                          |   | $                                            | 149,232 |   |                                     | $      | 142,709 |   |
| International                                                                           |   |                                         | 22,932  |   |                                     |   | 20,433 |   |
| Total                  property and equipment at cost, net                                                                                                                                                                                                                                                                                                                           |   | $                                            | 172,164 |   |                                     | $      | 163,142 |   |

**Major        Customers**

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED            (Continued)**

|                                                                                                                                                                                                                                                                                                                                                                                     |   | **URS****Division** |   |   | **EG&G****Division**           |   |   | **Total** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|------------------------------------|--------|--------|-----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                     |   |                |   |   | **(In                  millions)** |   |   |      |   |
| **Three                  months ended September 28, 2007**                                                                                                                                                                                                                                                                                                                               |   |                |   |   |                               |   |   |      |   |
| The                  U.S. Army                  (1)                                                        |   | $                   | 25.9   |   |                               | $      | 194.0  |      |   | $ | 219.9 |   |
| The                  U.S. Air                  Force                                                       |   | $                   | 74.6   |   |                               | $      | 59.2   |      |   | $ | 133.8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                     |   |                |   |   |                               |   |   |      |   |   |   |   |
| **Three                  months ended September 29, 2006**                                                                                                                                                                                                                                                                                                                               |   |                |   |   |                               |   |   |      |   |   |   |   |
| The                  U.S. Army                  (1)                                                        |   | $                   | 27.3   |   |                               | $      | 189.2  |      |   | $ | 216.5 |   |
| The                  U.S. Air                  Force                                                       |   | $                   | 38.4   |   |                               | $      | 68.6   |      |   | $ | 107.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                     |   |                |   |   |                               |   |   |      |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                     |   |                |   |   |                               |   |   |      |   |   |   |   |
| **Nine                  months ended September 28, 2007**                                                                                                                                                                                                                                                                                                                                |   |                |   |   |                               |   |   |      |   |   |   |   |
| The                  U.S. Army                  (1)                                                        |   | $                   | 86.6   |   |                               | $      | 559.9  |      |   | $ | 646.5 |   |
| The                  U.S. Air                  Force                                                       |   | $                   | 167.1  |   |                               | $      | 178.6  |      |   | $ | 345.7 |   |
|                                                                                                                                                                                                                                                                                                                                                                                     |   |                |   |   |                               |   |   |      |   |   |   |   |
| **Nine                  months ended September 29, 2006**                                                                                                                                                                                                                                                                                                                                |   |                |   |   |                               |   |   |      |   |   |   |   |
| The                  U.S. Army                  (1)                                                        |   | $                   | 79.3   |   |                               | $      | 566.9  |      |   | $ | 646.2 |   |
| The                  U.S. Air                  Force                                                       |   | $                   | 96.5   |   |                               | $      | 181.8  |      |   | $ | 278.3 |   |

| (1)   | The                  U.S. Army includes the U.S. Army Corps of                  Engineers. |
|-----------------|--------------------------------------------------------------------------------------------|

**NOTE        8.  STOCK-BASED COMPENSATION AND STOCK REPURCHASE        PROGRAM**

We        recognize stock-based compensation expense, net of estimated        forfeitures, over the service periods of the stock-based compensation awards        on        a straight-line basis in indirect, general, and administrative ("IG&A")        expenses of our Consolidated Statements of Operations and Comprehensive Income.        We used the Black-Scholes option-pricing model to measure the estimated fair        value of stock-based option awards issued under our 1991 Stock Incentive        Plan        and 1999 Equity Incentive Plan ("Stock Incentive Plans") and our Employee        Stock        Purchase Plan ("ESPP"). We allocate our stock-based compensation expenses        entirely to IG&A expenses because the proportional expenses that would have        been allocated to direct costs are not material. Stock option awards expire        ten        years from the date of grant. Stock options, restricted stock awards, and        restricted stock units vest over service periods that range from three to        four        years.  SFAS 123(R) requires the estimation of forfeitures at the time        of grant and then a re-measurement at least annually in order to estimate        the        amount of share-based awards that will ultimately vest. We estimate the        forfeiture rate based on our historical experience.

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS —            UNAUDITED            (Continued)**

|                                                                                                                                  |   | **Three                    Months Ended**    |   |   | **Nine                    Months Ended**     |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                                  |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                                                                                                  |   | **(In                  millions)**           |   |
| Stock-based                  compensation expenses:                                                                                   |   |                                         |   |   |                                         |   |   |   |   |   |   |   |
| Restricted                  stock awards and units                                                                                    |   | $                                            | 5.3    |   |                                         | $      | 3.2 |   |   | $ | 17.4 |   |   | $ | 7.5 |   |
| Stock                  options                                                                                                        |   |                                         | 0.8    |   |                                         |   | 1.6 |   |   |   | 2.6 |   |   |   | 5.2 |   |
| Stock-based                  compensation expenses                                                                                    |   | $                                            | 6.1    |   |                                         | $      | 4.8 |   |   | $ | 20.0 |   |   | $ | 12.7 |   |
|                                                                                                                                  |   |                                         |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  income tax benefits recognized in our net income related to stock-based                  compensation expenses |   | $                                            | 2.4    |   |                                         | $      | 1.7 |   |   | $ | 7.7 |   |   | $ | 4.7 |   |

**Restricted        Stock Awards and Units**

|                                                                                                                                                                                                                                                                                    |   | **Nine                    Months Ended****September                    28, 2007** |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                    |   | **Shares**                                                                        |      |   | **Weighted-Average                    Grant Date Fair Value** |   |
| Non-vested                  at December 29, 2006                                                                                                                                                                                                                                        |   |                                                                              | 1,342,018 |   |   | $ | 41.68 |   |
| Granted                                                |   |                                                                              | 462,672   |   |   | $ | 43.18 |   |
| Vested                                                 |   |                                                                              | (316,911  | ) |   | $ | 44.89 |   |
| Forfeited                                              |   |                                                                              | (54,958   | ) |   | $ | 42.26 |   |
| Non-vested                  at September 28, 2007                                                                                                                                                                                                                                       |   |                                                                              | 1,432,821 |   |   | $ | 39.85 |   |

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**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

**Stock        Incentive Plans**

|                                                  |   | **Shares** |      |   | **Weighted-Average                    Exercise Price** |   |   | **Weighted-Average                    Remaining Contractual Term (in years)** |   |   | **Aggregate                    Intrinsic Value (in thousands)** |   |
|-------------------------------------------------------|--------|------------|-----------|--------|--------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------|--------|
| Outstanding                  at December 29, 2006     |   |       | 2,368,308 |   |                                                   | $      | 22.56  |                                                                          |   |   |                                                            |   |   |   |
| Exercised                                             |   |       | (646,332  | )      |                                                   | $      | 22.44  |                                                                          |   |   |                                                            |   |   |   |
| Forfeited/expired/cancelled                           |   |       | (14,634   | )      |                                                   | $      | 25.75  |                                                                          |   |   |                                                            |   |   |   |
| Outstanding                  at September 28, 2007    |   |       | 1,707,342 |   |                                                   | $      | 22.59  |                                                                          |   |   | 5.00                                                            |   |   | $ | 57,813 |   |
| Options                  exercisable at end of period |   |       | 1,689,175 |   |                                                   | $      | 22.51  |                                                                          |   |   | 4.97                                                            |   |   | $ | 57,328 |   |

|                                                 |                            |   | **Outstanding**                           |   |      | **Exercisable**                                                    |   |
|------------------------------------------------------|---------------------------------|--------|-------------------------------------------|--------|-----------|--------------------------------------------------------------------|--------|
| **Range                    of Exercise Prices** |                            |   | **Number                    Outstanding** |   |      | **Weighted-Average                    Remaining Contractual Life** |   |   | **Weighted-Average                    Exercise Price** |   |   | **Number                    Exercisable** |   |   | **Weighted-Average                    Exercise Price** |   |
| $                                                    | 10.18                  - $13.56 |   |                                      |   | 84,101    |                                                               |   |   | 5.4 |   |   | $ | 13.03 |   |   |   | 84,101 |   |   | $ | 13.03 |   |
| $                                                    | 13.57                  - $16.95 |   |                                      |   | 90,808    |                                                               |   |   | 2.4 |   |   | $ | 15.36 |   |   |   | 90,808 |   |   | $ | 15.36 |   |
| $                                                    | 16.96                  - $20.34 |   |                                      |   | 187,349   |                                                               |   |   | 4.5 |   |   | $ | 18.46 |   |   |   | 187,349 |   |   | $ | 18.46 |   |
| $                                                    | 20.35                  - $23.73 |   |                                      |   | 511,985   |                                                               |   |   | 3.9 |   |   | $ | 21.98 |   |   |   | 511,985 |   |   | $ | 21.98 |   |
| $                                                    | 23.74                  - $27.12 |   |                                      |   | 768,501   |                                                               |   |   | 6.0 |   |   | $ | 25.27 |   |   |   | 768,501 |   |   | $ | 25.27 |   |
| $                                                    | 27.13                  - $30.51 |   |                                      |   | 50,000    |                                                               |   |   | 7.3 |   |   | $ | 29.31 |   |   |   | 33,333 |   |   | $ | 29.31 |   |
| $                                                    | 30.52                  - $33.85 |   |                                      |   | 11,598    |                                                               |   |   | 4.7 |   |   | $ | 31.95 |   |   |   | 11,598 |   |   | $ | 31.95 |   |
| $                                                    | 33.86                  - $37.61 |   |                                      |   | 3,000     |                                                               |   |   | 7.7 |   |   | $ | 35.00 |   |   |   | 1,500 |   |   | $ | 35.00 |   |
|                                                 |                            |   |                                      |   | 1,707,342 |                                                               |   |   | 5.0 |   |   | $ | 22.59 |   |   |   | 1,689,175 |   |   | $ | 22.51 |   |
|                                                 |                            |   |                                      |   |      |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**Stock        Repurchase Program**

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Table              of Contents

**URS              CORPORATION AND SUBSIDIARIES**

**NOTES                TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED                (Continued)**

**NOTE        9. INCOME TAXES**

*Accounting for Income Taxes*

|                                                                                                                                                                                                                                                                                     |   | **Three                  Months Ended** |   |   | **Nine                  Months Ended** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|----------------------------------------|--------|
| September                  28,                  2007                                       |   |                                    | 40.4   | %      |                                   |   | 41.1 | % |
| September                  29,                  2006                                       |   |                                    | 44.9   | %      |                                   |   | 43.1 | % |
|                                                                                                                                                                                                                                                                                     |   |                                    |   |   |                                   |   |   |   |

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Table            of Contents

**URS              CORPORATION AND              SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED              (Continued)**

**NOTE        10. VARIABLE INTEREST ENTITIES**

|                                       |   | **September                    28,****2007** |    |   | **December                    29,****2006** |   |
|--------------------------------------------|--------|----------------------------------------------|---------|--------|---------------------------------------------|--------|
|                                       |   | **(In                  thousands)**          |    |
| Cash                  and cash equivalents |   | $                                            | 71,493  |   |                                        | $      | 38,627 |   |
| Net                  accounts receivable   |   |                                         | 48,842  |   |                                        |   | 64,839 |   |
| Other                  assets              |   |                                         | 33,264  |   |                                        |   | 25,295 |   |
|                                       |   | $                                            | 153,599 |   |                                        | $      | 128,761 |   |

**NOTE        11. SUPPLEMENTAL GUARANTOR INFORMATION**

|   |   |
|--------|--------|

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Table            of Contents

| **ITEM                  2.** | **MANAGEMENT'S                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                  OPERATIONS** |
|------------------------------|-----------------------------------------------------------------------------------------------------------------------------|

**OVERVIEW**

***Business        Summary***

***Revenues        for Three Months Ended September 28, 2007***

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Table            of Contents

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Table            of Contents

***Cash        Flows and Debt***

*Operating Cash Flows*

***Business        Trends***

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Table            of Contents

***Other***

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Table            of Contents

**RESULTS        OF OPERATIONS**

***Consolidated***

|                                                                                                   |   | **Three                    Months Ended**              |    |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|
|                                                                                                   |   | **September                    28,****2007**           |    |   | **September                    29,****2006** |   |   | **Increase                    (decrease)** |   |   | **Percentage                    increase (decrease)** |   |
|                                                                                                   |   | **(In                  millions, except percentages)** |    |
| Revenues                                                                                               |   | $                                                      | 1,272.3 |   |   | $ | 1,085.6 |   |   | $ | 186.7 |   |   |   | 17.2 | % |
| Direct                  operating expenses                                                             |   |                                                   | 857.3   |   |   |   | 708.9 |   |   |   | 148.4 |   |   |   | 20.9 | % |
| Excess                  of revenues over direct operating expenses                                     |   |                                                   | 415.0   |   |   |   | 376.7 |   |   |   | 38.3 |   |   |   | 10.2 | % |
| Indirect,                  general and administrative expenses                                         |   |                                                   | 345.3   |   |   |   | 317.7 |   |   |   | 27.6 |   |   |   | 8.7 | % |
| Operating                  income                                                                      |   |                                                   | 69.7    |   |   |   | 59.0 |   |   |   | 10.7 |   |   |   | 18.1 | % |
| Interest                  expense                                                                      |   |                                                   | 3.0     |   |   |   | 4.8 |   |   |   | (1.8 | ) |   |   | (37.5 | %) |
| Income                  before taxes                                                                   |   |                                                   | 66.7    |   |   |   | 54.2 |   |   |   | 12.5 |   |   |   | 23.1 | % |
| Income                  tax expense                                                                    |   |                                                   | 27.0    |   |   |   | 24.3 |   |   |   | 2.7 |   |   |   | 11.1 | % |
| Minority                  interest in income of consolidated subsidiaries, net of                  tax |   |                                                   | 1.0     |   |   |   | — |   |   |   | 1.0 |   |   |   | 100.0 | % |
| Net                  income                                                                            |   | $                                                      | 38.7    |   |   | $ | 29.9 |   |   | $ | 8.8 |   |   |   | 29.4 | % |
| Diluted                  earnings per share                                                            |   | $                                                      | .73     |   |   | $ | .58 |   |   | $ | .15 |   |   |   | 25.9 | % |

**Three        Months ended September 28, 2007 compared with September 29,        2006**

*Our        consolidated revenues*

|                                                |   | **Three                    Months Ended**              |   |
|-----------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                |   | **September                    28,****2007**           |   |   | **September                    29,****2006** |   |   | **Increase                    (decrease)** |   |   | **Percentage                    increase (decrease)** |   |
| **Revenues**                                        |   | **(In                  millions, except percentages)** |   |
| Federal                  government clients         |   | $                                                      | 534    |   |   | $ | 489 |   |   | $ | 45 |   |   |   | 9 | % |
| State                  and local government clients |   |                                                   | 271    |   |   |   | 238 |   |   |   | 33 |   |   |   | 14 | % |
| Domestic                  private industry clients  |   |                                                   | 333    |   |   |   | 256 |   |   |   | 77 |   |   |   | 30 | % |
| International                  clients              |   |                                                   | 134    |   |   |   | 103 |   |   |   | 31 |   |   |   | 30 | % |
| Total                  Revenues                     |   | $                                                      | 1,272  |   |   | $ | 1,086 |   |   | $ | 186 |   |   |   | 17 | % |

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41

*Our        consolidated direct operating expenses*

*Our        consolidated excess of revenues over direct operating expenses*

*Our        consolidated indirect, general and administrative*

*Our        consolidated interest expense*

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Table            of Contents

*Our        effective income tax rates*

*Our        consolidated operating income and net income *

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Table            of Contents

***Reporting        Segments***

**Three        months ended September 28, 2007 compared with September 29,        2006**

|                                                                                                                                                                       |   | **Revenues**                                           |    |   | **Direct                    Operating Expenses** |   |    | **Excess                    of revenues over direct operating expenses** |   |   | **Indirect,                    General and Administrative** |   |   | **Operating                    Income (Loss)** |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|--------|--------------------------------------------------|--------|---------|--------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------|--------|--------|------------------------------------------------|---------|
|                                                                                                                                                                       |   | **(In                  millions, except percentages)** |    |
| **Three                  months ended September 28, 2007**                                                                                                                 |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |
| URS                  Division                                                                                                                                              |   | $                                                      | 890.1   |   |                                             | $      | 581.3   |                                                                     |   | $      | 308.8                                                       |   |   | $                                              | 246.6   |   |   | $ | 62.2 |   |
| EG&G                  Division                                                                                                                                         |   |                                                   | 384.6   |   |                                             |   | 278.3   |                                                                     |   |   | 106.3                                                       |   |   |                                           | 85.7    |   |   |   | 20.6 |   |
| Eliminations                                                                                                                                                               |   |                                                   | (2.4    | )      |                                             |   | (2.3    | )                                                                        |   |   | (0.1                                                        | )      |   |                                           | — |   |   |   | (0.1 | ) |
|                                                                                                                                                                       |   |                                                   | 1,272.3 |   |                                             |   | 857.3   |                                                                     |   |   | 415.0                                                       |   |   |                                           | 332.3   |   |   |   | 82.7 |   |
| Corporate                                                                                                                                                                  |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 13.0    |   |   |   | (13.0 | ) |
| Total                                                                                                                                                                      |   | $                                                      | 1,272.3 |   |                                             | $      | 857.3   |                                                                     |   | $      | 415.0                                                       |   |   | $                                              | 345.3   |   |   | $ | 69.7 |   |
|                                                                                                                                                                       |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Three                  months ended September 29, 2006**                                                                                                                 |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                              |   | $                                                      | 730.1   |   |                                             | $      | 453.2   |                                                                     |   | $      | 276.9                                                       |   |   | $                                              | 226.8   |   |   | $ | 50.1 |   |
| EG&G                  Division                                                                                                                                         |   |                                                   | 358.2   |   |                                             |   | 258.2   |                                                                     |   |   | 100.0                                                       |   |   |                                           | 80.7    |   |   |   | 19.3 |   |
| Eliminations                                                                                                                                                               |   |                                                   | (2.7    | )      |                                             |   | (2.5    | )                                                                        |   |   | (0.2                                                        | )      |   |                                           | — |   |   |   | (0.2 | ) |
|                                                                                                                                                                       |   |                                                   | 1,085.6 |   |                                             |   | 708.9   |                                                                     |   |   | 376.7                                                       |   |   |                                           | 307.5   |   |   |   | 69.2 |   |
| Corporate                                                                                                                                                                  |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 10.2    |   |   |   | (10.2 | ) |
| Total                                                                                                                                                                      |   | $                                                      | 1,085.6 |   |                                             | $      | 708.9   |                                                                     |   | $      | 376.7                                                       |   |   | $                                              | 317.7   |   |   | $ | 59.0 |   |
|                                                                                                                                                                       |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Increase                  (decrease) for the three months ended September 28, 2007****                     and September 29, 2006**                  |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                              |   | $                                                      | 160.0   |   |                                             | $      | 128.1   |                                                                     |   | $      | 31.9                                                        |   |   | $                                              | 19.8    |   |   | $ | 12.1 |   |
| EG&G                  Division                                                                                                                                         |   |                                                   | 26.4    |   |                                             |   | 20.1    |                                                                     |   |   | 6.3                                                         |   |   |                                           | 5.0     |   |   |   | 1.3 |   |
| Eliminations                                                                                                                                                               |   |                                                   | 0.3     |   |                                             |   | 0.2     |                                                                     |   |   | 0.1                                                         |   |   |                                           | — |   |   |   | 0.1 |   |
|                                                                                                                                                                       |   |                                                   | 186.7   |   |                                             |   | 148.4   |                                                                     |   |   | 38.3                                                        |   |   |                                           | 24.8    |   |   |   | 13.5 |   |
| Corporate                                                                                                                                                                  |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 2.8     |   |   |   | (2.8 | ) |
| Total                                                                                                                                                                      |   | $                                                      | 186.7   |   |                                             | $      | 148.4   |                                                                     |   | $      | 38.3                                                        |   |   | $                                              | 27.6    |   |   | $ | 10.7 |   |
|                                                                                                                                                                       |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Percentage                  increase (decrease) for the three months ended****                      September 28, 2007 vs. September 29, 2006** |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                              |   |                                                   | 21.9    | %      |                                             |   | 28.3    | %                                                                        |   |   | 11.5                                                        | %      |   |                                           | 8.7     | % |   |   | 24.2 | % |
| EG&G                  Division                                                                                                                                         |   |                                                   | 7.4     | %      |                                             |   | 7.8     | %                                                                        |   |   | 6.3                                                         | %      |   |                                           | 6.2     | % |   |   | 6.7 | % |
| Eliminations                                                                                                                                                               |   |                                                   | (11.1   | %)     |                                             |   | (8.0    | %)                                                                       |   |   | (50.0                                                       | %)     |   |                                           | — |   |   |   | (50.0 | )% |
| Corporate                                                                                                                                                                  |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 27.5    | % |   |   | 27.5 | % |
| Total                                                                                                                                                                      |   |                                                   | 17.2    | %      |                                             |   | 20.9    | %                                                                        |   |   | 10.2                                                        | %      |   |                                           | 8.7     | % |   |   | 18.1 | % |

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Table            of Contents

*URS        Division*

*The        URS Division's revenues*

|                                                |   | **Three                    Months Ended**              |   |
|-----------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                |   | **September                    28,****2007**           |   |   | **September                    29,****2006** |   |   | **Increase** |   |   | **Percentage                    increase** |   |
| **Revenues**                                        |   | **(In                  millions, except percentages)** |   |
| Federal                  government clients         |   | $                                                      | 150    |   |   | $ | 131 |   |   | $ | 19 |   |   |   | 15 | % |
| State                  and local government clients |   |                                                   | 271    |   |   |   | 238 |   |   |   | 33 |   |   |   | 14 | % |
| Domestic                  private industry clients  |   |                                                   | 333    |   |   |   | 256 |   |   |   | 77 |   |   |   | 30 | % |
| International                  clients              |   |                                                   | 134    |   |   |   | 103 |   |   |   | 31 |   |   |   | 30 | % |
| Total                  revenues                     |   | $                                                      | 888    |   |   | $ | 728 |   |   | $ | 160 |   |   |   | 22 | % |
|                                                |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table            of Contents

*The        URS Division's direct operating expenses*

*The        URS Division's excess of revenues over direct operating expenses*

*The        URS Division's IG&A expenses*

*EG&G        Division*

*The        EG&G Division's revenues *

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Table            of Contents

*The        EG&G Division's direct operating expenses *

*The        EG&G Division's excess of revenues over direct operating expenses *

*The        EG&G Division's IG&A expenses*

***Consolidated***

|                                                                                                   |   | **Nine                    Months Ended**               |    |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|
|                                                                                                   |   | **September                    28,****2007**           |    |   | **September                    29,****2006** |   |   | **Increase                    (decrease)** |   |   | **Percentage                    increase (decrease)** |   |
|                                                                                                   |   | **(In                  millions, except percentages)** |    |
| Revenues                                                                                               |   | $                                                      | 3,654.7 |   |   | $ | 3,153.7 |   |   | $ | 501.0 |   |   |   | 15.9 | % |
| Direct                  operating expenses                                                             |   |                                                   | 2,434.1 |   |   |   | 2,031.1 |   |   |   | 403.0 |   |   |   | 19.8 | % |
| Excess                  of revenues over direct operating expenses                                     |   |                                                   | 1,220.6 |   |   |   | 1,122.6 |   |   |   | 98.0 |   |   |   | 8.7 | % |
| Indirect,                  general and administrative expenses                                         |   |                                                   | 1,024.8 |   |   |   | 953.8 |   |   |   | 71.0 |   |   |   | 7.4 | % |
| Operating                  income                                                                      |   |                                                   | 195.8   |   |   |   | 168.8 |   |   |   | 27.0 |   |   |   | 16.0 | % |
| Interest                  expense                                                                      |   |                                                   | 10.9    |   |   |   | 15.8 |   |   |   | (4.9 | ) |   |   | (31.0 | %) |
| Income                  before taxes                                                                   |   |                                                   | 184.9   |   |   |   | 153.0 |   |   |   | 31.9 |   |   |   | 20.8 | % |
| Income                  tax expense                                                                    |   |                                                   | 76.0    |   |   |   | 65.9 |   |   |   | 10.1 |   |   |   | 15.3 | % |
| Minority                  interest in income of consolidated subsidiaries, net of                  tax |   |                                                   | 3.0     |   |   |   | 0.4 |   |   |   | 2.6 |   |   |   | 650.0 | % |
| Net                  income                                                                            |   | $                                                      | 105.9   |   |   | $ | 86.7 |   |   | $ | 19.2 |   |   |   | 22.1 | % |
| Diluted                  earnings per share                                                            |   | $                                                      | 2.01    |   |   | $ | 1.68 |   |   | $ | .33 |   |   |   | 19.6 | % |

**Nine        Months ended September 28, 2007 compared with September 29,        2006**

*Our        consolidated revenues*

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Table            of Contents

|                                                |   | **Nine                    Months Ended**               |   |
|-----------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                |   | **September                    28,****2007**           |   |   | **September                    29,****2006** |   |   | **Increase                    (decrease)** |   |   | **Percentage                    increase (decrease)** |   |
| **Revenues**                                        |   | **(In                  millions, except percentages)** |   |
| Federal                  government clients         |   | $                                                      | 1,506  |   |   | $ | 1,490 |   |   | $ | 16 |   |   |   | 1 | % |
| State                  and local government clients |   |                                                   | 803    |   |   |   | 667 |   |   |   | 136 |   |   |   | 20 | % |
| Domestic                  private industry clients  |   |                                                   | 972    |   |   |   | 702 |   |   |   | 270 |   |   |   | 38 | % |
| International                  clients              |   |                                                   | 374    |   |   |   | 295 |   |   |   | 79 |   |   |   | 27 | % |
| Total                  Revenues                     |   | $                                                      | 3,655  |   |   | $ | 3,154 |   |   | $ | 501 |   |   |   | 16 | % |

*Our        consolidated direct operating expenses*

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Table            of Contents

*Our        consolidated excess of revenues over direct operating expenses*

*Our        consolidated indirect, general and administrative*

*Our        consolidated interest expense*

*Our        effective income tax rates*

*Our        consolidated operating income and net income *

----

Table            of Contents

***Reporting        Segments***

**Nine        months ended September 28, 2007 compared with September 29,        2006**

|                                                                                                                                                          |   | **Revenues**                                           |    |   | **Direct                    Operating Expenses** |   |    | **Excess                    of revenues over direct operating expenses** |   |   | **Indirect,                    General and Administrative** |   |   | **Operating                    Income (Loss)** |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|--------|--------------------------------------------------|--------|---------|--------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------|--------|--------|------------------------------------------------|---------|
|                                                                                                                                                          |   | **(In                  millions, except percentages)** |    |
| **Nine                  months ended September 28, 2007**                                                                                                     |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |
| URS                  Division                                                                                                                                 |   | $                                                      | 2,557.0 |   |                                             | $      | 1,646.7 |                                                                     |   | $      | 910.3                                                       |   |   | $                                              | 731.8   |   |   | $ | 178.5 |   |
| EG&G                  Division                                                                                                                            |   |                                                   | 1,107.4 |   |                                             |   | 796.3   |                                                                     |   |   | 311.1                                                       |   |   |                                           | 252.4   |   |   |   | 58.7 |   |
| Eliminations                                                                                                                                                  |   |                                                   | (9.7    | )      |                                             |   | (8.9    | )                                                                        |   |   | (0.8                                                        | )      |   |                                           | — |   |   |   | (0.8 | ) |
|                                                                                                                                                          |   |                                                   | 3,654.7 |   |                                             |   | 2,434.1 |                                                                     |   |   | 1,220.6                                                     |   |   |                                           | 984.2   |   |   |   | 236.4 |   |
| Corporate                                                                                                                                                     |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 40.6    |   |   |   | (40.6 | ) |
| Total                                                                                                                                                         |   | $                                                      | 3,654.7 |   |                                             | $      | 2,434.1 |                                                                     |   | $      | 1,220.6                                                     |   |   | $                                              | 1,024.8 |   |   | $ | 195.8 |   |
|                                                                                                                                                          |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Nine                  months ended September 29, 2006**                                                                                                     |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                 |   | $                                                      | 2,062.9 |   |                                             | $      | 1,243.6 |                                                                     |   | $      | 819.3                                                       |   |   | $                                              | 676.4   |   |   | $ | 142.9 |   |
| EG&G                  Division                                                                                                                            |   |                                                   | 1,103.8 |   |                                             |   | 799.7   |                                                                     |   |   | 304.1                                                       |   |   |                                           | 246.7   |   |   |   | 57.4 |   |
| Eliminations                                                                                                                                                  |   |                                                   | (13.0   | )      |                                             |   | (12.2   | )                                                                        |   |   | (0.8                                                        | )      |   |                                           | — |   |   |   | (0.8 | ) |
|                                                                                                                                                          |   |                                                   | 3,153.7 |   |                                             |   | 2,031.1 |                                                                     |   |   | 1,122.6                                                     |   |   |                                           | 923.1   |   |   |   | 199.5 |   |
| Corporate                                                                                                                                                     |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 30.7    |   |   |   | (30.7 | ) |
| Total                                                                                                                                                         |   | $                                                      | 3,153.7 |   |                                             | $      | 2,031.1 |                                                                     |   | $      | 1,122.6                                                     |   |   | $                                              | 953.8   |   |   | $ | 168.8 |   |
|                                                                                                                                                          |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Increase                  (decrease) for the nine months ended September 28, 2007****                    and September 29, 2006**            |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                 |   | $                                                      | 494.1   |   |                                             | $      | 403.1   |                                                                     |   | $      | 91.0                                                        |   |   | $                                              | 55.4    |   |   | $ | 35.6 |   |
| EG&G                  Division                                                                                                                            |   |                                                   | 3.6     |   |                                             |   | (3.4    | )                                                                        |   |   | 7.0                                                         |   |   |                                           | 5.7     |   |   |   | 1.3 |   |
| Eliminations                                                                                                                                                  |   |                                                   | 3.3     |   |                                             |   | 3.3     |                                                                     |   |   | —                                                     |   |   |                                           | — |   |   |   | — |   |
|                                                                                                                                                          |   |                                                   | 501.0   |   |                                             |   | 403.0   |                                                                     |   |   | 98.0                                                        |   |   |                                           | 61.1    |   |   |   | 36.9 |   |
| Corporate                                                                                                                                                     |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 9.9     |   |   |   | (9.9 | ) |
| Total                                                                                                                                                         |   | $                                                      | 501.0   |   |                                             | $      | 403.0   |                                                                     |   | $      | 98.0                                                        |   |   | $                                              | 71.0    |   |   | $ | 27.0 |   |
|                                                                                                                                                          |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |   |   |   |
| **Percentage                  increase (decrease) for the nine months ended****                    September 28, 2007 vs. September 29, 2006** |   |                                                   |    |   |                                             |   |    |                                                                     |   |   |                                                        |   |   |                                           |    |   |   |
| URS                  Division                                                                                                                                 |   |                                                   | 24.0    | %      |                                             |   | 32.4    | %                                                                        |   |   | 11.1                                                        | %      |   |                                           | 8.2     | % |   |   | 24.9 | % |
| EG&G                  Division                                                                                                                            |   |                                                   | 0.3     | %      |                                             |   | (0.4    | %)                                                                       |   |   | 2.3                                                         | %      |   |                                           | 2.3     | % |   |   | 2.3 | % |
| Eliminations                                                                                                                                                  |   |                                                   | (25.4   | %)     |                                             |   | (27.0   | %)                                                                       |   |   | —                                                     |   |   |                                           | — |   |   |   | (0.0 | %) |
| Corporate                                                                                                                                                     |   |                                                   | — |   |                                             |   | — |                                                                     |   |   | —                                                     |   |   |                                           | 32.2    | % |   |   | 32.2 | % |
| Total                                                                                                                                                         |   |                                                   | 15.9    | %      |                                             |   | 19.8    | %                                                                        |   |   | 8.7                                                         | %      |   |                                           | 7.4     | % |   |   | 16.0 | % |

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*URS        Division*

*The        URS Division's revenues*

|                                                |   | **Nine                    Months Ended**               |   |
|-----------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                |   | **September                    28,****2007**           |   |   | **September                    29,****2006** |   |   | **Increase****(decrease)** |   |   | **Percentage                    increase****(decrease)** |   |
| **Revenues**                                        |   | **(In                  millions, except percentages)** |   |
| Federal                  government clients         |   | $                                                      | 399    |   |   | $ | 386 |   |   | $ | 13 |   |   |   | 3 | % |
| State                  and local government clients |   |                                                   | 803    |   |   |   | 667 |   |   |   | 136 |   |   |   | 20 | % |
| Domestic                  private industry clients  |   |                                                   | 972    |   |   |   | 702 |   |   |   | 270 |   |   |   | 38 | % |
| International                  clients              |   |                                                   | 374    |   |   |   | 295 |   |   |   | 79 |   |   |   | 27 | % |
| Total                  revenues                     |   | $                                                      | 2,548  |   |   | $ | 2,050 |   |   | $ | 498 |   |   |   | 24 | % |
|                                                |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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*The        URS Division's direct operating expenses*

*The        URS Division's excess of revenues over direct operating expenses*

*The        URS Division's IG&A expenses*

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*EG&G        Division*

*The        EG&G Division's revenues *

*The        EG&G Division's direct operating expenses *

*The        EG&G Division's excess of revenues over direct operating expenses *

*The        EG&G Division's IG&A expenses*

**Liquidity        and Capital Resources**

|                                                         |   | **Nine                    Months Ended,**    |   |
|--------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                         |   | **September                    28,****2007** |   |   | **September                    29,****2006** |   |
|                                                         |   | **(In                  millions)**           |   |
| Cash                  flows provided by operating activities |   | $                                            | 148.9  |   |   | $ | 124.9 |   |
| Cash                  flows used by investing activities     |   |                                         | (28.7  | ) |   |   | (25.9 | ) |
| Cash                  flows used by financing activities     |   |                                         | (68.5  | ) |   |   | (88.0 | ) |

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**Proposed        Washington Group International Acquisition**

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*Operating        Activities*

*Investing        Activities*

*Financing        Activities*

*Non-cash        Acquisition*

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*Other        Contractual Obligations and Commitments*

|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                |    |   | **Payments                    and Commitments Due by Period** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|--------|---------------------------------------------------------------|--------|
| **Contractual                  Obligations**                                                                                                                                                                                                                                                                                                                                                          |   |                                |    |   | **Less                  Than**                                |   |   |   |   |   |   |   |   | **After                  5** |   |
| **(Debt                    payments include principal only):**                                                                                                                                                                                                                                                                                                                                        |   | **Total**                           |    |   | **1                    Year**                                 |   |   | **1-3                    Years** |   |   | **4-5                    Years** |   |   | **Years** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   | **(In                  thousands)** |    |
| **As                  of September 28, 2007:**                                                                                                                                                                                                                                                                                                                                                        |   |                                |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Credit                  Facility:                                                                                                                                                                                                                                                                                                                                                                     |   |                                |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Term                  loan                                                                                                                                                                                                                                                                                                                                                                            |   | $                                   | 39,000  |   |                                                          | $      | — |   |   | $ | 13,650 |   |   | $ | 25,350 |   |   | $ | — |   |
| Capital                  lease obligations and equipment notes                                                                                                                                                                                                                                                                                                                                        |   |                                | 50,136  |   |                                                          |   | 16,486 |   |   |   | 23,646 |   |   |   | 9,580 |   |   |   | 424 |   |
| Notes                  payable, foreign credit lines and other indebtedness (1)                                                                                                                                                                                                                                                                                                                       |   |                                | 2,882   |   |                                                          |   | 2,047 |   |   |   | 511 |   |   |   | 324 |   |   |   | — |   |
| Total                  debt                                                                                                                                                                                                                                                                                                                                                                           |   |                                | 92,018  |   |                                                          |   | 18,533 |   |   |   | 37,807 |   |   |   | 35,254 |   |   |   | 424 |   |
| Pension                  funding requirements (2)                                                                                                                                                                                                                                                                                                                                                     |   |                                | 132,720 |   |                                                          |   | 20,113 |   |   |   | 32,691 |   |   |   | 20,157 |   |   |   | 59,759 |   |
| Purchase                  obligations                  (3)                                                              |   |                                | 3,960   |   |                                                          |   | 2,217 |   |   |   | 1,743 |   |   |   | — |   |   |   | — |   |
| Interest                  (4)                                                                                           |   |                                | 14,588  |   |                                                          |   | 5,805 |   |   |   | 7,528 |   |   |   | 1,240 |   |   |   | 15 |   |
| Asset                  retirement                  obligations                                                          |   |                                | 4,400   |   |                                                          |   | 720 |   |   |   | 198 |   |   |   | 1,418 |   |   |   | 2,064 |   |
| Other                  contractual obligations (5)                                                                                                                                                                                                                                                                                                                                                    |   |                                | 25,661  |   |                                                          |   | 7,458 |   |   |   | 10,069 |   |   |   | 3,367 |   |   |   | 4,767 |   |
| Operating                  lease obligations                  (6)                                                       |   |                                | 426,309 |   |                                                          |   | 100,050 |   |   |   | 162,295 |   |   |   | 95,595 |   |   |   | 68,369 |   |
| Total                  contractual obligations                                                                                                                                                                                                                                                                                                                                                        |   | $                                   | 699,656 |   |                                                          | $      | 154,896 |   |   | $ | 252,331 |   |   | $ | 157,031 |   |   | $ | 135,398 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Amounts                  shown exclude remaining original issue discounts of $40 thousand                  for notes                  payable. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | These                  pension funding requirements for the EG&G pension plans, the Dames                  & Moore Final Salary Pension Fund in the United Kingdom, the Radian                  International, L.L.C. Supplemental Executive Retirement Plan and                  Salary                  Continuation Agreement, and the supplemental executive retirement                  plan                  ("SERP") with our CEO are based on actuarially determined estimates                  and                  management assumptions. We are obligated to fund approximately                  $12.5                  million into a rabbi trust for our CEO's SERP within 15 days of                  the                  earlier of (1) a request by the CEO or (2) the termination of the                  CEO's                  employment for any reason, including                  death. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Purchase                  obligations consist primarily of software maintenance                  contracts. |
|-----------------|-------------------------------------------------------------------------------------------------------------|

| (4)   | Interest                  for the next five years, which excludes non-cash interest, is determined                  based on the current outstanding balance of our debt and payment                  schedule                  at the estimated interest rate as of September 28,                  2007. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Other                  contractual obligations include contractual payments to former                  employees                  and net liabilities for anticipated settlements under Financial                  Accounting                  Standards Board's Interpretation No. 48, "Accounting for Uncertainty                  in                  Income Taxes, an interpretation of FASB Statement No. 109," ("FIN                  48") tax                  liabilities, including interest. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | These                  operating leases are predominantly real estate                  leases. |
|-----------------|------------------------------------------------------------------------------------------------|

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*Off-balance        Sheet Arrangements*

| ▪ | As                  of September 28, 2007, we had $63.3 million in standby letters                  of credit                  under our Credit Facility. We use letters of credit primarily to                  support                  insurance programs, bonding arrangements and real estate leases.                  We are                  required to reimburse the issuers of letters of credit for any                  payments                  they make under the outstanding letters of credit. The Credit Facility                  covers the issuance of our standby letters of credit and is critical                  for                  our normal operations. If we default on the credit facility, our                  ability                  to issue or renew standby letters of credit would impair our ability                  to                  maintain normal operations. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ▪    | We                  have guaranteed the credit facility of one of our joint                  ventures, in the event of a default by the joint venture. This                  joint                  venture was formed in the ordinary course of business to perform                  a                  contract for the federal government. The term of the guarantee                  was equal                  to the remaining term of the underlying credit facility, which                  expired on                  September 30, 2007. The amount of the guarantee was $9.5 million                  at                  September 28, 2007.  In October 2007, we amended the term of the                  agreement and the amount of the new guarantee is $15 million. The                  new                  agreement and guarantee will expire on July 31,                  2008. |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ▪ | As                  of September 28, 2007, the amount of a guarantee used to collateralize                  the                  credit facility of our UK operating subsidiary and bank guarantee                  lines of                  our European subsidiaries was $10.1                  million. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ▪ | From                  time to time, we provide guarantees related to our services or                  work. If                  our services under a guaranteed project are later determined to                  have                  resulted in a material defect or other material deficiency, then                  we may be                  responsible for monetary damages or other legal remedies. When                  sufficient                  information about claims on guaranteed projects is available and                  monetary                  damages or other costs or losses are determined to be probable,                  we                  recognize such guarantee losses. Currently, we have no guarantee                  claims                  for which losses have been                  recognized. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ▪ | We                  have an agreement to indemnify one of our joint venture lenders                  up to                  $25.0 million for any potential losses and damages, and liabilities                  associated with lawsuits in relation to general and administrative                  services we provide to the joint venture.  Currently, we have no                  indemnified claims. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Credit        Facility*
Our        senior credit facility ("Credit Facility") consists of a        six-year term loan of $350.0 million, and a five-year revolving line of credit        of $300.0 million, against which up to $200.0 million is available to issue        letters of credit. As of September 28, 2007, we had $39.0 million outstanding        under the term loan, $63.3 million outstanding in letters of credit and no        amount outstanding under the revolving line of credit.

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*Revolving        Line of Credit.*
A        summary of our revolving line of credit information is as        follows:

|                                                                                                        |   | **Three                      Months Ended****September                      28, 2007** |   |   | **Three                      Months Ended****September                      29, 2006** |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------|--------|
|                                                                                                        |   | **(In                    millions, except percentages)**                               |   |
| Effective                    average interest rates paid on the revolving line of                    credit |   |                                                                                   | 8.2    | %      |                                                                                   |   | 8.0 | % |
| Average                    daily revolving line of credit balances                                          |   | $                                                                                      | 0.2    |   |                                                                                   | $      | 0.3 |   |
| Maximum                    amounts outstanding at any one point                                             |   | $                                                                                      | 4.7    |   |                                                                                   | $      | 6.5 |   |
|                                                                                                        |   |                                                                                   |   |   |                                                                                   |   |   |   |
|                                                                                                        |   | **Nine                      Months Ended****September                      28, 2007**  |   |   | **Nine                      Months Ended****September                      29, 2006**  |   |
|                                                                                                        |   | **(In                    millions, except percentages)**                               |   |
| Effective                    average interest rates paid on the revolving line of                    credit |   |                                                                                   | 8.2    | %      |                                                                                   |   | 7.5 | % |
| Average                    daily revolving line of credit balances                                          |   | $                                                                                      | 3.0    |   |                                                                                   | $      | 0.5 |   |
| Maximum                    amounts outstanding at any one point                                             |   | $                                                                                      | 40.3   |   |                                                                                   | $      | 21.8 |   |
|                                                                                                        |   |                                                                                   |   |   |                                                                                   |   |   |   |

*Notes        payable, foreign credit lines and other indebtedness. *
As of September 28, 2007 and        December 29, 2006, we had        outstanding amounts of $2.8 million and $7.9 million, respectively, in notes        payable and foreign lines of credit. Notes payable consists primarily of        notes        used to finance the purchase of office equipment, computer equipment and        furniture. The weighted average interest rates of these notes were approximately        6.5% and 6.1% as of September 28, 2007 and December 29, 2006,        respectively.

*Capital          leases and equipment notes.*

*Operating        Leases*

*Other        Activities*

*Derivative        Financial Instruments*

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*Income        Taxes*

*Accounting for Income Taxes*

*Backlog.*

**Critical        Accounting Policies and Estimates**

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**Adopted        and Recently Issued Statements of Financial Accounting        Standards**

*How Taxes Collected from Customers and        Remitted to Governmental Authorities should be Presented in the Income        Statement*

*Fair Value Measurement,*

*Employers' Accounting for        Defined Benefit Pension and Other Postretirement Plans,*

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*The Fair Value Option for        Financial Assets and Financial Liabilities*

**ITEM        3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT        MARKET RISK**

**Interest        rate risk**

**Foreign        currency risk**

**ITEM        4.  CONTROLS AND PROCEDURES**

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**Evaluation        of Disclosure Controls and Procedures**

**Changes        in Internal Control over Financial Reporting**

**Inherent        Limitations on Effectiveness of Controls**

**PART        II**

**OTHER        INFORMATION**

**ITEM        1.  LEGAL PROCEEDINGS**

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**ITEM        1A.  RISK FACTORS **

**Demand        for our services is cyclical and vulnerable to economic downturns and reductions        in government spending.  If the economy weakens, then our revenues,        profits and our financial condition may deteriorate.**

**We        may not realize the full amount of revenues reflected in our book of business,        which could harm our operations and significantly reduce our future        revenues.**

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**As        a government contractor, we are subject to a number of procurement laws,        regulations and government audits; a violation of any such laws and regulations        could result in sanctions, contract termination, forfeiture of profit, harm        to        our reputation or loss of our status as an eligible government        contractor.**

*qui tam*

**Because        we depend on federal, state and local governments for a significant portion        of        our revenue, our inability to win or renew government contracts during regulated        procurement processes could harm our operations and significantly reduce        or        eliminate our profits.**

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**Each        year some government contracts may be dependent on the legislative        appropriations process. If legislative appropriations are not made in subsequent        years of a multiple-year government contract, then we may not realize all        of our        potential revenues and profits from that contract.**

**Our        government contracts may give the government the right to modify, delay,        curtail        or terminate our contracts at their convenience at any time prior to their        completion and, if we do not replace these contracts, then we may suffer        a        decline in revenues.**

**If        we are unable to accurately estimate and control our contract costs, then        we may        incur losses on our contracts, which could decrease our operating margins        and        significantly reduce or eliminate our profits.**

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**Our        actual results could differ from the estimates and assumptions that we use        to        prepare our financial statements, which may significantly reduce or eliminate        our profits.**

|   | • | the                  application of the "percentage-of-completion" method of accounting,                  and                  revenue recognition on contracts, change orders, and contract                  claims; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | provisions                  for uncollectible receivables and customer claims and recoveries                  of costs                  from subcontractors, vendors and                  others; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | provisions                  for income taxes and related valuation                  allowances; |
|--------|---------|-------------------------------------------------------------------------------------------------|

|   | • | value                  of goodwill and recoverability of other intangible                  assets; |
|--------|---------|----------------------------------------------------------------------------------------------------|

|   | • | valuation                  of assets acquired and liabilities assumed in connection with business                  combinations; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | valuation                  of defined benefit pension plans and other employee benefit                  plans; |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | • | valuation                  of stock-based compensation expense;                  and |
|--------|---------|--------------------------------------------------------------------------------------|

|   | • | accruals                  for estimated liabilities, including litigation and insurance                  reserves. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

**Our        use of the "percentage-of-completion" method of accounting could result in        reduction or reversal of previously recorded revenues and        profits.**

**If        our goodwill or intangible assets become impaired, then our profits may be        significantly reduced or eliminated.**

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**Our        failure to successfully bid on new contracts and renew existing contracts        with        private and public sector clients could adversely reduce or eliminate our        profitability.**

**If        we fail to timely complete, miss a required performance standard or otherwise        fail to adequately perform on a project, then we may incur a loss on that        project, which may reduce or eliminate our overall        profitability.**

**If        our partners fail to perform their contractual obligations on a project,        we        could be exposed to liability, loss of reputation or reduced or eliminated        profits.**

**Our        dependence on subcontractors could adversely affect us.***

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**If        we experience delays and/or defaults in customer payments, we could suffer        liquidity problems or we could be unable to recover all        expenditures.**
***

**We        may be subject to substantial liabilities under environmental laws and        regulations.**

**Our        liability for damages due to legal proceedings may adversely affect us and        result in a significant loss. ***

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**Unavailability        of insurance coverage could have a negative impact on our operations and        results.***

**Changes        in environmental laws, regulations and programs could reduce demand for our        environmental services, which could in turn negatively impact our        revenues.**

**A        decline in U.S. defense spending or a change in budgetary priorities could        harm        our operations and significantly reduce our        future**
**revenues.**

**Our        overall market share will decline if we are unable to compete successfully        in        our industry.**

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**Our        failure to attract and retain key employees could impair our ability to provide        services to our clients and otherwise conduct our business        effectively.**

**Employee,        agent, or partner misconduct or our failure to comply with laws or regulations        could weaken our ability to win contracts with government clients, which        could        result in decreasing revenues.***

**Recent        changes in accounting for equity-related compensation have impacted our        financial statements and could negatively impact our ability to attract and        retain key employees.**

*Share-Based Payment*

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**The        completion of the proposed merger with WGI could adversely affect our liquidity        and cash flows. Conversely, the termination of the proposed merger with WGI        could adversely affect or eliminate our short-term        profits.***

|   | • | require                  us to dedicate a substantial portion of our cash flow from operations                  to                  the servicing and repayment of our debt, thereby reducing funds                  available                  for working capital, capital expenditures, dividends, acquisitions                  and                  other purposes; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | increase                  our vulnerability to, and limit flexibility in planning for, adverse                  economic and industry conditions; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | adversely                  affect our credit rating, with the result that the cost of servicing                  our                  indebtness might increase and our ability to obtain surety bonds                  could be                  impaired; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | limit                  our ability to obtain additional financing to fund future working                  capital,                  capital expenditures, additional acquisitions and other general                  corporate                  initiatives; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | limit                  our ability to apply proceeds from an offering or asset sale to                  purposes                  other than the servicing and repayment of                  debt. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Because        we are a holding company, we may not be able to service our debt if our        subsidiaries do not make sufficient distributions to us.***

**Our        international operations are subject to a number of risks that could harm        our        operations and significantly reduce our future revenues.**

|   | • | lack                  of developed legal systems to enforce contractual                  rights; |
|--------|---------|--------------------------------------------------------------------------------------------------|

|   | • | greater                  risk of uncollectible accounts and longer collection                  cycles; |
|--------|---------|--------------------------------------------------------------------------------------------------------|

|   | • | currency                  fluctuations; |
|--------|---------|-----------------------------------------|

|   | • | logistical                  and communication challenges; |
|--------|---------|-----------------------------------------------------------|

|   | • | potentially                  adverse changes in laws and regulatory practices, including export                  license                  requirements, trade barriers, tariffs and tax                  laws; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes                  in labor conditions; |
|--------|---------|-----------------------------------------------|

|   | • | exposure                  to liability under the Foreign Corrupt Practices Act and export                  control                  and anti-boycott laws; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | general                  economic and political conditions in foreign                  markets. |
|--------|---------|-------------------------------------------------------------------------------------------------|

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**Our        international operations may require our employees to travel to and work        in high        security risk countries, which may result in employee death or injury,        repatriation costs or other unforeseen costs.**

**We        rely on third-party software to run our critical accounting, project management,        and financial information systems, and as a result, any sudden loss, disruption        or unexpected costs to maintain such systems could significantly increase        our        operational expense as well as disrupt the management of our business        operations.**

**Force        majeure events, including natural disasters and terrorists' actions have        negatively impacted and could further negatively impact the economies in        which        we operate, which may affect our financial condition, results of operations        or        cash flows.**

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**Negotiations        with labor unions and possible work actions could divert management attention        and disrupt operations.  In addition, new collective bargaining        agreements or amendments to agreements could increase our labor costs and        operating expenses.**

**We        have only a limited ability to protect our intellectual property rights,        which        are important to our success. Our failure to protect our intellectual property        rights could adversely affect our competitive position.**

**Delaware        law and our charter documents may impede or discourage a merger, takeover        or        other business combination even if the business combination would have been        in        the best interests of our current stockholders.**

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**ITEM        2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF        PROCEEDS **

| **Period**                                                                                                                                                                                                        |   | **(a)                    Total Number of Shares Purchased (1)**          |    |   | **(b)                    Average Price Paid per Share** |   |    | **(c)                    Total Number of Shares Purchased as Part of Publicly Announced                    Plans or                    Programs (2)** |   |   | **(d)                    Maximum Number of Shares that May Yet be Purchased Under the                    Plans or                    Programs** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|---------|--------|---------------------------------------------------------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                              |   | **(In                  thousands, except average price paid per share)** |    |
| June                  30, 2007 —July                  27, 2007                                                                                                                                              |   |                                                                     | 10      |   |                                                    | $      | 48.54   |                                                                                                                                                  |   |   | —                                                                                                                                         |   |   |   | — |   |
| July                  28, 2007 —August                  24, 2007                                                                                                                                            |   |                                                                     | — |   |                                                    |   | — |                                                                                                                                                  |   |   | —                                                                                                                                         |   |   |   | — |   |
| August                  25, 2007 —September                  28,                  2007                                                                                                                      |   |                                                                     | 1       |   |                                                    |   | 55.35   |                                                                                                                                                  |   |   | —                                                                                                                                         |   |   |   | 1,651 |   |
| Total                                   |   |                                                                     | 11      |   |                                                    |   |    |                                                                                                                                                  |   |   | —                                                                                                                                         |   |   |   | 1,651 |   |

| (1)   | All                  purchases were made pursuant to our Stock Incentive Plans, which                  allow our employees to surrender shares of our common stock as                  payments toward the exercise cost and tax withholding obligations                  associated with the exercise of stock options or the vesting of                  restricted                  or deferred stock. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | On                  March 26, 2007, we announced that our Board of Directors approved                  a common                  stock repurchase program that will allow the repurchase of up to                  one                  million shares of our common stock plus additional shares issued                  or deemed                  issued under our Stock Incentive Plans and ESPP for the period                  from     December 30, 2006 through January 1,                  2010 (excluding shares issuable upon the exercise of options granted                  prior                  to December 30, 2006). Our stock repurchase program will terminate                  on                  January 1, 2010. No purchases were made pursuant to this publicly                  announced repurchase program during the quarter ended September                  28,                  2007. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM        3.  DEFAULTS UPON SENIOR        SECURITIES**

**ITEM        4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY        HOLDERS**

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**ITEM        5.  OTHER INFORMATION**

**ITEM        6. EXHIBITS**

|   | 31.1 | Certification                  of the Company's Chief Executive Officer pursuant to Section 302                  of the                  Sarbanes-Oxley Act of 2002.  FILED                  HEREWITH. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                  of the Company's Chief Financial Officer pursuant to Section 302                  of the                  Sarbanes-Oxley Act of 2002.  FILED                  HEREWITH. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32 | Certification                  of the Company's Chief Executive Officer and Chief Financial Officer                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. FILED                  HEREWITH. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                                     | **URS                CORPORATION** |                                                                                      |
|----------------------------------------------------------|------------------------------------|-------------------------------------------------------------------------------------------|
|                                                     |                               |                                                                                      |   |
| Date:                  November                  7, 2007 | By:                                | /s/ Reed                N. Brimhall                                                  |   |
|                                                     |                               | Reed                  N. Brimhall                                                         |   |
|                                                     |                               | Vice                  President, Controller and                  Chief Accounting Officer |   |
|                                                     |                               |                                                                                      |   |

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**Exhibit        No.                                              Description**

|   | 31.1 | Certification                  of the Company's Chief Executive Officer pursuant to Section 302                  of the                  Sarbanes-Oxley Act of 2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 31.2 | Certification                  of the Company's Chief Financial Officer pursuant to Section 302                  of the                  Sarbanes-Oxley Act of 2002. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32 | Certification                  of the Company's Chief Executive Officer and Chief Financial Officer                  pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|