As filed with the Securities and Exchange Commission on June 21, 2002

Registration Number 333-85252

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

AECOM MERGER CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	8711	75-2988014
(State or other jurisdiction	(Primary Standard Industrial	(I.R.S. Employer
of incorporation or organization)	Classification Code Number)	Identification No.)

555 South Flower Street, Suite 3700

Los Angeles, California 90071

(213) 593-8000

(Address of principal executive offices, including zip code and telephone number)

Joseph A. Incaudo

Vice Chairman

AECOM Technology Corporation

555 South Flower Street, Suite 3700

Los Angeles, California 90071

(213) 593-8000

(Name, address and telephone number of agent for service)

Copies to:

Richard A. Boehmer, Esq.		J. Scott Hodgkins, Esq.
O’Melveny & Myers LLP		Latham & Watkins
400 South Hope Street		633 West 5th Street, Suite 4000
Los Angeles, California 90071-2899		Los Angeles, California 90071
Telephone: (213) 430-6643		Telephone: (213) 485-1234
Fax: (213) 430-6407		Fax: (213) 891-8763

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

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

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

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

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

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

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS (Subject to Completion)

Issued , 2002

Shares

CLASS B COMMON STOCK

We are offering shares of our class B common stock. This is our initial public offering and no public market currently exists for our shares. We currently anticipate that the initial public offering price will be between $ and $ per share.

We have applied to have our class B common stock traded on The New York Stock Exchange under the symbol “AEO.”

Investing in our class B common stock involves risks. See “Risk Factors” beginning on page 6.

PRICE $ A SHARE

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

We have granted the underwriters the right to purchase up to an additional shares of class B common stock to cover over-allotments.

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

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on , 2002.

MORGAN STANLEY

CREDIT SUISSE FIRST BOSTON

LEHMAN BROTHERS

BANC OF AMERICA SECURITIES LLC

BEAR, STEARNS & CO. INC.

, 2002

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

TABLE OF CONTENTS

		Page
Summary		1
Risk Factors		6
Special Note Regarding Forward-Looking Statements		12
Use of Proceeds		13
Dividend Policy		13
Capitalization		14
Dilution		16
Selected Consolidated Financial Data		17
Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Business		39
Management		53
Certain Relationships and Related Transactions		66

		Page
Principal Stockholders		68
The Merger and the Tender Offer		70
Description of Capital Stock, Certificate of Incorporation and Bylaws		73
Certain Income Tax Consequences to Non- U.S. Holders		81
Shares Eligible for Future Sale		83
Underwriters		85
Legal Matters		88
Experts		88
Where You Can Find Additional Information		88
Index to Consolidated Financial Statements and Financial Statement Schedule		F-1

In this prospectus, we use the terms AECOM, we, us and our to refer to AECOM Technology Corporation together with our subsidiaries, prior to our merger with a wholly owned subsidiary of AECOM Merger Corporation. We will also use such terms upon completion of the merger to mean the surviving corporation, which will change its name to AECOM Technology Corporation. A Registration Statement on Form S-4 in connection with the merger was declared effective on July 18, 2002. We use the term class A common stock to refer to our class A-1, class A-2 and class A-3 common stock. Our certificate of incorporation provides for a conversion of class A-1, class A-2 and class A-3 common stock into class B common stock upon the expiration of the applicable restriction periods. We use the term common stock to refer to both our class A and class B common stock.

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock.

All information in this offering assumes that the merger described under the caption “The Merger and the Tender Offer” is completed before the completion of this offering. We may choose not to proceed with this offering if the merger is not completed.

We have not taken any action to permit a public offering of shares of our common stock outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who have come into possession of this prospectus must inform themselves about and observe restrictions relating to the offering of shares of our common stock and the distribution of this prospectus outside of the United States.

Until , 2002, 25 days after the date of this prospectus, all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

This document is being made available only to persons in the United Kingdom (a) reasonably believed to be Investment Professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, (b) for the purposes of an employee share scheme within the meaning of Article 60 of the Financial Services and Markets Act (Financial Promotion) Order 2001 or (c) falling within Article 49(2) (A) to (D) (e.g., high net worth companies, unincorporated associations) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001.

SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all the information you should consider before buying shares in this offering. You should read the entire prospectus carefully, especially the information under “Risk Factors.”

AECOM Technology Corporation

Overview

We are a worldwide leader in providing a broad range of technical professional services to government agencies and large corporations. We have built leading positions based on revenues in a number of industry sectors and strategic geographic markets through a global network of more than 25 major operating offices and 14,600 employees.

Our technical professional services include consulting and design services and program and construction management, as well as outsourced technical staffing and logistical support services. Our industry sectors include:

Ÿ Transit, Rail and Maritime		Ÿ Aviation
Ÿ Highways and Bridges		Ÿ Government Facilities
Ÿ Water and Wastewater		Ÿ Technical and Industrial Facilities
Ÿ Environmental Management		Ÿ Commercial Facilities

We provide our services in the major markets of the world, including the United States, Asia, Europe, Australia and the Middle East. This combination of providing a broad range of technical professional services in a number of industry sectors and strategic geographic markets made us one of the leading design firms in the United States based on revenue in 2001, according to the 2002 McGraw Hill Engineering News Record Design Survey.

Our clients consist of the United States and other national governments, state and local governments and agencies and private entities. The majority of our projects are under multi-year contracts on a cost-plus or a negotiated-fee basis.

Our strategic advantage lies in our ability to build leadership positions with our clients across industry sectors, service lines and geographies. The dynamic interface among these three elements enables us to better serve our clients, drives our growth and positions us to take advantage of future opportunities.

Our Market Opportunity

The worldwide professional services industry encompasses companies that provide highly-specialized or value-added services to other organizations. Specific services provided include consulting (technical, accounting, management, legal and advertising), business support services (engineering, environmental and facilities management, and food services), human resources management (payroll and benefits) and permanent and temporary staffing (executive, professional, clerical, health care and information technology).

business and government. These services are provided on infrastructure, environmental, industrial, government and commercial projects. Several thousand firms worldwide compete in this fragmented industry. According to Engineering News Record, the largest 100 global design firms generated over $41.3 billion of global revenues in 2000 and the largest 500 U.S. design firms grew at a compounded annual growth rate of 9.8% between 1998 and 2001. Design firms are a subset of technical professional services. Our design-related revenues accounted for more than 80% of our revenues in the last year.

The principal client base includes local, state and national governments, as well as private businesses, which are becoming increasingly reliant on professional services that are either not readily available from internal resources or are not within their core competencies. Industry growth is being further led by factors ranging from population growth, outsourcing and rapid economic development to increased globalization, competition and technological advancement.

Our Strategy

Our strategy is to maintain our leadership position in each industry sector, service line and geographic area in which we operate, using the following key elements:

Continue diversification in industry sectors, service lines and geographic regions, primarily through acquisitions. We will continue to seek out and acquire companies that have technical niche and regional leadership positions that will complement or expand our current expertise and geographic presence. We will expand the roles of the acquired companies and their management, while capitalizing on their brand names in their niches. Our acquisition approach enables our operating companies to continue to focus on their core businesses while we overlay strategic initiatives to cross-sell and share complementary talents.

Increase cross-selling and technology transfer. Our strategic planning process emphasizes the cross-selling of our combined expertise and geographic presence among all our operating companies. This enables us to present ourselves to our clients as one of the world’s largest technical professional service companies when the project or client requires this capacity.

Maintain and expand our long-standing client relationships. We have developed long-standing relationships with a number of governments and agencies worldwide as well as many large corporations. We will continue to focus on our commitment to client satisfaction to strengthen and expand these relationships. In some cases, these relationships span decades.

Retain and recruit highly experienced personnel. The most valuable asset of any professional services company is its personnel. We have a highly talented, dedicated and experienced work force. We will continue to provide our personnel ownership and other incentives and benefits designed to optimize their performance and to enhance our ability to attract and retain personnel. We believe that these programs align the interests of our personnel with those of our clients and stockholders and foster the cross-selling and technology transfer described above.

THE OFFERING

Class B common stock offered		shares



Class B common stock to be outstanding after this offering		shares



Over-allotment option		shares



Class A common stock to be outstanding after this offering		shares



Use of proceeds		To repay borrowings under our credit facility, to fund a cash tender offer for some of our class A common stock and for general corporate purposes, including possible future acquisitions.



The merger		Prior to this offering, AECOM Technology Corporation will merge with a wholly owned subsidiary of AECOM Merger Corporation. Shortly after this merger, AECOM Technology Corporation will merge with and into AECOM Merger Corporation with AECOM Merger Corporation as the surviving corporation. AECOM Merger Corporation will change its name to AECOM Technology Corporation at that time. In the merger, our stockholders will receive class A common stock in exchange for their shares of common stock of AECOM Technology Corporation. The class A common stock and class B common stock referred to in this offering will constitute our capital structure after the merger.



The tender offer		After this offering, we intend to use $50 million of the net proceeds of this offering to fund a cash tender offer for a portion of our shares of class A common stock outstanding after the merger. The exact timing, offer price and other specific terms of the tender offer are within our discretion.



Proposed New York Stock Exchange symbol		AEO

Common Stock to be outstanding after this offering does not include any purchases of our class A common stock under the proposed tender offer and, as of May 23, 2002:

4,013,050 shares of common stock issuable upon the exercise of employee stock options outstanding at a weighted average exercise price of $10.54 per share;

8,063 shares issuable upon conversion of our convertible preferred stock;

4,866,675 shares of common stock issuable upon redemption of our common stock units and convertible preferred stock units;

899,450 additional shares of common stock available for issuance under our 2000 Stock Incentive Plan;

1,500,000 additional shares of common stock available for issuance under our 2000 Stock Incentive Plan, assuming that our stockholders approve a current proposal to increase the authorized shares under such plan;

79,000 shares of common stock issuable upon the exercise of non-employee directors’ stock options at a weighted average exercise price of $9.33 per share;

21,000 additional shares of common stock available for issuance under our Stock Incentive Plan for Non-Employee Directors;

150,000 additional shares of common stock available for issuance under our Stock Incentive Plan for Non-Employee Directors, assuming that our stockholders approve a current proposal to increase the authorized number of shares under such plan;

2,000,000 additional shares of common stock available for issuance under our 2002 Employee Stock Purchase Plan, assuming that our stockholders approve such plan; and

500,000 additional shares of common stock available for issuance under our Global Stock Purchase Plan.

Except as otherwise indicated, all of the information in this prospectus assumes no exercise of the underwriter’s over-allotment option.

SUMMARY CONSOLIDATED FINANCIAL DATA

When you read this summary consolidated financial data, it is important that you also read the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements as of September 30, 2000 and 2001 and for the years ended September 30, 1999, 2000 and 2001 and the accompanying notes included in this prospectus. The summary consolidated financial data for the years ended September 30, 1997 and 1998 has been derived from audited financial statements not included in this prospectus. The consolidated financial data as of March 31, 2002 and for the six months ended March 31, 2002 and the accompanying notes were derived from our unaudited consolidated financial statements, which are included in this prospectus. Historical results are not necessarily indicative of future results.

	Year Ended September 30,					Six Months Ended March 31,
	1997	1998	1999	2000	2001	2001	2002
	(in thousands, except per share data)
Consolidated Statement of Income Data:
Total revenues	$712,933	$842,654	$978,365	$1,379,750	$1,513,390	$717,237	$805,530
Cost of revenues	552,262	669,108	776,758	1,089,985	1,131,387	536,029	582,036	⁽¹⁾

Gross profit	160,671	173,546	201,607	289,765	382,003	181,208	223,494
Equity in earnings of joint ventures	5,438	9,599	10,018	10,576	4,275	1,884	1,769
General and administrative expenses	153,905	165,807	191,744	270,726	348,502	162,745	215,104	⁽¹⁾⁽²⁾

Income from operations	12,204	17,338	19,881	29,615	37,776	20,347	10,159
Interest expense, net	4,978	4,679	4,849	8,784	11,573	6,128	5,982

Income before income taxes	7,226	12,659	15,032	20,831	26,203	14,219	4,177
Provision for income taxes	4,359	7,276	4,452	3,122	8,647	4,704	1,378

Net income	$ 2,867	$ 5,383	$ 10,580	$ 17,709	$ 17,556	$ 9,515	$ 2,799

Net income per share ⁽³⁾ :
Basic	$ .23	$ .41	$ .74	$ .94	$ .75	$ .40	$ .11
Diluted	$ .22	$ .40	$ .70	$ .88	$ .71	$ .39	$ .10
Shares used in per share calculations: ⁽³⁾ :
Basic	12,639	13,001	14,371	18,938	23,565	23,540	25,537
Diluted	13,011	13,538	15,053	20,011	24,704	24,434	26,848


	As of September 30,
	1997	1998	1999	2000	2001	As of March 31, 2002
Other Data:
Number of full-time employees	5,900	6,400	7,200	12,100	12,700	14,600

(1)

Between cost of revenues and general and administrative expenses, a total of $2.8 million has been expensed reflecting compensation related to fully accrue stock matches relating to the Senior Executive Equity Investment Plan, which were previously being accrued ratably over a ten-year vesting period, and $4.5 million has been expensed reflecting compensation related to the change in the stock match percentage. Subsequent to March 31, 2002 there will be no further stock matches.

(2)	Includes $8.5 million to fully vest participants in our Performance Unit Plan, which has been terminated.

(3)	In calculating per share data, the weighted average number of shares includes shares of common stock and common stock units outstanding during the relevant periods.

	As of March 31, 2002
	Actual	As Adjusted ⁽¹⁾
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents, excluding cash in consolidated joint ventures	$ 24,781	$
Working capital	158,347
Total assets	882,296
Total long-term debt, excluding current portion	197,671
Redeemable common stock and common stock units	80,852	80,852
Stockholders’ equity	195,639

(1)

Gives effect to the sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share and the use of the estimated net proceeds as described under the caption “Use of Proceeds” in this prospectus, but not the purchase of shares of class A common stock pursuant to the proposed tender offer.

RISK FACTORS

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

Risks Relating to Our Business and Industry

We depend on long-term government contracts, most of which are funded on an annual basis. If appropriations are not made in subsequent years of a multiple-year contract, we will not realize all of our potential revenue and profit from that project.

The substantial majority of our revenues is derived from contracts with agencies and departments of national, state and local governments. During the fiscal years ended September 30, 1999, 2000 and 2001, approximately 63%, 65% and 62%, respectively, of our revenues were derived from contracts with government entities.

Most government contracts are subject to the continuing availability of legislative appropriation. Legislatures typically appropriate funds for a given program on a year-by-year basis, even though contract performance may take more than one year. As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each subsequent fiscal year. These appropriations, and the timing of payment of appropriated amounts, may be influenced by, among other things, the state of the economy, competing priorities for appropriation, the timing and amount of tax receipts and the overall level of government expenditures. If appropriations are not made in subsequent years on our government contracts, then we will not realize all of our potential revenue and profit from that contract. In addition, slowdowns in tax receipts of our government contract clients could have a corresponding impact on our cash flow.

We depend on government contracts that may be terminated by the government, which may affect our ability to recognize all of our potential revenue and profit from the project.

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

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

Our books and records are subject to audit by the various governmental agencies we serve and their representatives. These audits can result in adjustments to reimbursable contract costs and allocated overhead. In addition, if as a result of an audit, one of our subsidiaries is charged with wrongdoing or the government agency determines that a subsidiary is otherwise no longer eligible for federal contracts, that subsidiary, and conceivably our company as a whole, could be temporarily suspended or, in the event of convictions or civil judgments, could be prohibited from bidding on and receiving future government contracts for a period of time. Furthermore, as a U.S. government contractor, we are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities to which purely private sector companies are not, the results of which could have a material adverse effect on our operations.

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

We have submitted claims under some of our government contracts for payment of work performed beyond the initial contractual requirements for which we recorded revenues of approximately $22.3 million through March 31, 2002. The applicable governmental entities have contested these claims and we cannot assure you that these claims will be approved in whole, in part or at all. If these claims are not approved, our net income and results of operations could be adversely impacted.

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

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

International operations expose us to legal, political and economic risks in different countries and currency exchange rate fluctuations could adversely affect our financial results.

During the fiscal years ending September 30, 1999, 2000 and 2001, revenues attributable to our Global Group operations were 3%, 11% and 18%, respectively. As a result of our recent acquisitions, we expect the percentage of revenues attributable to our Global Group operations to increase. In fact, 25% of our revenues for the quarter ended March 31, 2002 were attributable to our Global Group operations. There are risks inherent in doing business internationally, including:

currency exchange rate fluctuations;

imposition of governmental controls;

political and economic instability;

changes in U.S. and other national government policies affecting the markets for our services;

changes in regulatory practices, tariffs and taxes; and

potential non-compliance with a wide variety of non-U.S. laws and regulations.

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

We have acquired and may continue to acquire businesses as strategic opportunities arise and may be unable to realize the anticipated benefits of those acquisitions.

We have acquired a number of companies in recent years and our strategy is to continue to expand and diversify our operations with additional acquisitions as strategic opportunities arise. Some of the risks that may affect our ability to realize any anticipated benefits from companies that we acquire include:

unexpected losses of key personnel or clients of the acquired business;

difficulties arising from the increasing scope, geographic diversity and complexity of our operations;

diversion of management’s attention from other business concerns; and

adverse effects on existing business relationships with clients.

In addition, managing the growth of our operations will require us to continue to improve our operational, financial and human resources management systems and other internal systems and controls. If we are unable to manage any growth effectively, it could have a material adverse effect on our business.

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

Fixed-price contracts require us to either perform all work under the contract for a specified lump-sum or to perform an estimated number of units of work at an agreed price per unit, with the total payment determined by the actual number of units performed. A significant portion of our revenues comes from fixed-price contracts. Fixed-price contracts expose us to a number of risks not inherent in cost-plus contracts, including underestimation of costs, ambiguities in specifications, unforeseen costs or difficulties, problems with new technologies, delays beyond our control, failures of subcontractors to perform and economic or other changes that may occur during the contract period. Losses under fixed-price contracts could have a material adverse effect on our business.

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

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

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

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

We currently maintain comprehensive general liability, umbrella and professional liability insurance policies. Professional liability policies are “claims made” policies. Thus, only claims made during the term of the policy are covered. Additionally, our insurance policies may not protect us against potential liability due to various exclusions and retentions. Partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse affect on our business.

Also, the terrorist attacks that occurred on September 11, 2001 have had a material adverse effect on the insurance industry as a whole. Consequently, along with our competition, we have experienced, and expect to continue to experience, a significant increase in our insurance premiums.

Our backlog of uncompleted projects under contract is subject to unexpected adjustments and cancellations, including future appropriations by the applicable contracting government agency, and is, therefore, an uncertain indicator of our future revenues and profits.

At March 31, 2002, our backlog of uncompleted projects under contract was approximately $1.8 billion, of which approximately $1.0 billion is expected to be completed by March 31, 2003. We cannot assure you that the revenues attributed to uncompleted projects under contract will be realized or, if realized, will result in profits. Many projects may remain in our backlog for an extended period of time because of the size or long-term nature of the contract. In addition, from time to time projects are scaled back or cancelled. These type of backlog reductions adversely affect the revenue and profit that we ultimately receive from contracts reflected in our backlog.

If we guarantee the performance standards of a project, we could incur additional costs to cover our guarantee obligations.

Although not typical, in some instances we guarantee that a project, when completed, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, we may either

incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards. In some cases, where we fail to meet required performance standards, we may also be subject to agreed upon damages, which are fixed in amount by the contract. To the extent that these events occur, the total costs of the project could exceed our estimates and we could experience reduced profits or, in some cases, a loss on that project.

Risks Relating to this Offering and Our Common Stock

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

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

The trading price of our common stock could be volatile.

In recent years, the stock market has experienced extreme price and volume fluctuations. The overall market and the trading price of our common stock may fluctuate greatly. The trading price of our common stock may be significantly affected by various factors, including:

quarterly fluctuations in our operating results;

changes in investors’ and analysts’ perception of the business risks and conditions of our business;

broader market fluctuations; and

general economic or political conditions.

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

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

the spending cycles of our clients, which for government entities is significantly influenced by tax receipts, governmental surpluses/(deficits) and policy initiatives;

personnel hiring and utilization rates;

the number and significance of client engagements commenced and completed during a quarter;

the ability of clients to terminate engagements without penalties;

the ability of our project managers to estimate the percentage of the project completed;

delays incurred as a result of weather conditions;

delays incurred in connection with an engagement;

the size and scope of engagements;

the timing of expenses incurred for corporate initiatives;

the impairment of goodwill or other intangible assets; and

general economic and political conditions.

For example, the fourth quarter of our fiscal year is typically our strongest quarter. In the U.S., our net service revenues are usually higher in the fourth quarter due to milder weather conditions and the fact that we tend to work significantly more overtime during the summer to compensate for other quarters when the weather shortens the workdays. We also find that the U.S. federal government tends to authorize more work before the end of its fiscal year, which is also September 30. Conversely, many U.S. state governments whose fiscal years end on June 30 tend to accelerate spending during the first quarter of their fiscal year when new funding budgets become available. Our general and administrative expenses also tend to be at lower levels during our fourth quarter when we typically reduce our marketing costs, and to a lesser degree, experience increased use of vacation accruals by our employees.

Variations in any of the factors discussed above could cause significant fluctuations in our operating results from quarter to quarter and from year to year, and, as a result, the trading price of our common stock may decline.

Terrorism and the possibility of further acts of violence may have a material adverse effect on our operations.

Terrorist attacks, such as the attacks that occurred on September 11, 2001, the response by the United States and further acts of violence or war may affect the market on which our common stock will trade, the markets in which we operate, our operations and profitability and your investment. Further terrorist attacks against the United States or other countries may occur. The potential near-term and long-term effect of these attacks on our business, the market for our common stock and the global economy is uncertain. The consequences of any terrorist attacks, or any armed conflicts that may result, are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business or the trading price of our common stock.

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

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

division of our board of directors into three classes, with each class serving a staggered three-year term;

removal of directors for cause only;

ability of the board of directors to authorize the issuance of preferred stock in series without stockholder approval;

supermajority requirements to approve “business combinations”;

vesting of exclusive authority in the board of directors to determine the size of the board (subject to limited exceptions) and to fill vacancies; and

advance notice requirements for stockholder proposals and nominations for election to the board of directors.

In response to the collapse of Enron Corporation, the U.S. government may legislate or take other actions that could result in significant sales of shares of our common stock held in our employee benefit plans, which could cause the trading price of our common stock to decline.

In the wake of the collapse of Enron Corporation, there has been a renewed scrutiny of employer stock in employee benefit plans. At May 23, 2002, approximately 11.7 million shares of our common stock were held in our employee benefit plans. In addition, there were approximately 4.8 million common stock units outstanding at the same date under our Non-Qualified Stock Purchase Plan. A number of bills have been introduced in Congress that would limit the amount of employer stock that could be held by employees through their retirement accounts and limit an employer’s ability to require an employee to continue to hold matching employer stock in his or her account. In addition, the Bush Administration has announced the formation of a working group to consider

reforms to the retirement system. No assurances can be given as to what, if any, action will be taken by the U.S. government or how any action, if taken, will effect our employee benefit plans. If any ultimate action either requires or allows our employees to sell a significant percentage of our shares held in our employee benefit plans, those sales, or the perceived threat of those sales, could cause the trading price of our common stock to decline significantly.

Future sales of our common stock may cause the trading price of our common stock to decline.

As the restricted periods on class A common stock expire, those shares will be eligible to be sold, including in the public market, and upon such sale shall automatically convert into class B common stock. Assuming no shares of class A common stock are sold in the proposed tender offer and all common stock units are redeemed for shares of common stock, approximately 8.7 million shares of class A common stock will be eligible for sale 180 days after this offering, 8.7 million shares of class A common stock will be eligible for sale 360 days after this offering, and 8.7 million shares of class A common stock will be eligible for sale 540 days after this offering. In addition, approximately 12 months after this offering, certain of our officers will sell sufficient shares of class A common stock to repay loans under our Senior Executive Equity Investment Plan and our Stock Option Loan Program. Such loans aggregated $21,015,552 at March 31, 2002. Substantial sales could adversely affect the market value of the class B common stock and, therefore, the value of your shares. In addition, the perception in the public market that our existing stockholders might sell shares of common stock could depress the market price of our common stock, regardless of the actual plans of our existing stockholders. See the information under the caption “Shares Eligible for Future Sale” in this prospectus.

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

The initial public offering price per share is expected to be substantially higher than the net tangible book value per share of our outstanding common stock. Purchasers of shares in this offering will experience immediate dilution in the net tangible book value of their shares. Based on an assumed initial public offering price of $ per share, dilution per share in this offering will be $ per share (or % of the price). In addition, we have issued options to acquire shares of our common stock at a weighted average exercise price of $ per share. To the extent these outstanding options are exercised, there will be further dilution to investors in this offering. See the information under the caption “Dilution” in this prospectus.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains statements which, to the extent that they do not recite historical fact, constitute forward-looking statements. The words “believe,” “expect,” “estimate,” “may,” “will,” “could,” “plan” or “continue” and similar expressions are intended to identify forward-looking statements. Such forward-looking information involves important risks and uncertainties that could materially alter results in the future from those expressed in any forward-looking statements made by us or on our behalf. These risks and uncertainties include, but are not limited to, those listed in this prospectus.

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

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

USE OF PROCEEDS

We estimate that our net proceeds (after deducting underwriting discounts and commissions payable to the underwriters and our estimated offering expenses) from this offering will be $ million ($ million if the underwriters exercise their option to acquire additional shares), based upon an assumed initial public offering price of $ per share.

We expect to use approximately $80 million of the net proceeds to repay amounts outstanding under our unsecured line of credit, which bore interest at the Interbank Offered Rate plus 1.63%, or 3.66%, per annum at March 31, 2002. Of this amount, approximately $29.0 million was borrowed during the 12 months ended March 31, 2002 and was used to fund acquisitions, repurchase stock from our current and former employees, purchase capital assets and for working capital needs. We may reborrow amounts under this line of credit.

We intend to use $50 million of the proceeds from this offering to fund a cash tender offer for some of our class A common stock. The exact timing, offer price and specific terms of the tender offer are within our discretion. We currently anticipate commencing the tender offer shortly after this offering. The offer price in the tender offer will be determined by us after considering the trading price of our class B common stock. We intend for the tender offer to comprise the second step of a synthetic secondary offering, or, in other words, a primary offering followed by a stock purchase using the proceeds of the public offering to accomplish substantially the same goal as allowing existing stockholders to participate in the public offering.

Except as required by our employee benefits plans or by law, we intend to allow all of our holders of class A common stock to tender the greater of one-third of their holdings in class A common stock or $50,000 in value of class A common stock, based on the tender offer price. Members of our management holding approximately 14.8 million shares, units and options to purchase such shares and units of our capital stock, including all of senior management, have agreed not to participate in the tender offer.

The class B common stock cannot be tendered in the tender offer.

We expect to use the remaining net proceeds for general corporate purposes, which may include future acquisitions of businesses. We have no current commitments or agreements with respect to any specific material acquisition.

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

DIVIDEND POLICY

We have not declared or paid any cash dividends on our common stock, and we do not anticipate doing so in the foreseeable future. We currently intend to retain future earnings, if any, to operate our business and finance future growth strategies. Our presently outstanding indebtedness require us to obtain the consent of the lenders prior to the payment of any cash dividends above specified amounts.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2002:

on an actual basis; and

as adjusted to give effect to the merger and our sale of shares of our class B common stock in this offering at an assumed initial offering price of $ per share and the application of the net proceeds from this offering, other than in connection with the purchase of our class A common stock pursuant to the proposed tender offer.

	As of March 31, 2002
	Actual		As Adjusted
	(in thousands, except share data)
Cash and cash equivalents	$ 24,781		$

Debt:
Bank overdraft	$ 3,900		$ —
Current portion of long-term debt	9,551
Long-term debt, less current portion	197,671

Total debt	211,122
Redeemable common stock and common stock units	80,852		80,852
Common stock—issued and outstanding 3,484,626 shares actual and as adjusted
Common stock units—issued and outstanding 706,761 units actual and as adjusted
Stockholders’ equity:
Preferred stock, $.01 par value, authorized 8,000,000 shares actual and 10,000,000 shares as adjusted:
Convertible preferred stock: authorized 2,500,000 shares actual and as adjusted; issued and outstanding 8,063 shares actual and as adjusted	777		777
Class B: authorized 5,000,000 shares actual and no shares as adjusted, issued and outstanding 4,899,200 shares actual and no shares as adjusted ⁽¹⁾	50		—
Common stock, $.01 par value, authorized 150,000,000 shares actual and no shares as adjusted; issued and outstanding 17,567,150 shares actual and no shares as adjusted ⁽²⁾	176		—
Class A common stock, $.001 par value, authorized no shares actual and 45,000,000 shares as adjusted; issued and outstanding no shares actual and shares as adjusted ⁽²⁾	—
Class B common stock, $.001 par value, authorized no shares actual and 150,000,000 shares as adjusted; issued and outstanding no shares actual and shares as adjusted ⁽²⁾	—
Common and preferred stock units, issued and outstanding 4,192,439 units actual and as adjusted	54,268		54,268
Additional paid-in capital	122,110
Retained earnings	47,134
Notes receivable from stockholders	(17,400	)	(17,400	)
Accumulated other comprehensive income	(11,476	)	(11,476	)

Total stockholders’ equity	195,639

Total capitalization	$487,613		$

(1)	Upon completion of this offering, all of the shares of our Class B preferred stock will be redeemed at a price of $.01 per share.

(2)	Common stock issued and outstanding does not include, as of March 31, 2002:

4,027,050 shares of common stock issuable upon the exercise of employee stock options outstanding at a weighted average exercise price of $10.55 per share;

8,063 shares issuable upon conversion of our convertible preferred stock;

4,881,291 shares of common stock issuable upon redemption of our common stock units and convertible preferred stock units;

885,450 additional shares of common stock available for issuance under our 2000 Stock Incentive Plan;

1,500,000 additional shares of common stock available for issuance under our 2000 Stock Incentive Plan, assuming that our stockholders approve a current proposal to increase authorized shares under such plan;

79,000 shares of common stock issuable upon exercise of non-employee directors’ stock options at a weighted average exercise price of $9.33 per share;

21,000 additional shares of common stock available for issuance under our Stock Incentive Plan for Non-Employee Directors;

2,000,000 additional shares of common stock available for issuance under our 2002 Employee Stock Purchase Plan, assuming that our stockholders approve such plan; and

500,000 additional shares of common stock available for issuance under our Global Stock Purchase Plan.

DILUTION

Our net tangible book value at March 31, 2002 was $32.0 million, or $1.23 per share. Net tangible book value per share before the offering has been determined by dividing net tangible book value (total book value of tangible assets less total liabilities) by the number of shares of common stock, common stock units, redeemable common stock and redeemable common stock units outstanding at March 31, 2002. After giving effect to the sale of our class B common stock in this offering at an assumed initial public offering price of $ per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, other than in connection with the purchase of our class A common stock pursuant to the proposed tender offer, and after giving effect to the application of the estimated net proceeds as described under the caption “Use of Proceeds,” our adjusted net tangible book value at March 31, 2002 would have been $ million or $ per share. This represents an immediate increase in net tangible book value per share of $ to existing stockholders and dilution in net tangible book value per share of $ to new investors who purchase shares in the offering. The following table illustrates this per share dilution to new investors:

Assumed initial public offering price per share		$
Net tangible book value per share at March 31, 2002	$1.23
Increase in net tangible book value per share attributable to new investors

Adjusted net tangible book value per share

Dilution per share to new investors		$

The discussion and table above exclude any purchases of our class A common stock pursuant to the proposed tender offer and, as of May 23, 2002:

4,013,050 shares of common stock issuable upon exercise of employee stock options outstanding at a weighted average exercise price of $10.54 per share;

8,063 shares issuable upon conversion of our convertible preferred stock;

4,866,675 shares of common stock issuable upon redemption of our common stock units and convertible preferred stock units;

899,450 additional shares of common stock available for issuance under our 2000 Stock Incentive Plan;

79,000 shares of common stock issuable upon exercise of non-employee directors’ stock options at a weighted average exercise price of $9.33 per share;

21,000 additional shares of common stock available for issuance under our Stock Incentive Plan for Non-Employee Directors;

2,000,000 additional shares of common stock available for issuance under our 2002 Employee Stock Purchase Plan, assuming that our stockholders approve such plan; and

500,000 additional shares of common stock available for issuance under our Global Stock Purchase Plan.

To the extent any of these options are exercised or purchases are made under our stock purchase and other investment plans, you will be further diluted.

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected consolidated financial data along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes, which are included in this prospectus. We derived the consolidated statement of income data for each of the three years ended September 30, 2001 and the consolidated balance sheet data at September 30, 2000 and 2001 from our consolidated financial statements, which have been audited by Ernst & Young LLP, independent auditors, and are included in this prospectus. We derived the consolidated statement of income data for each of the years ended September 30, 1997 and 1998 and the consolidated balance sheet data as of September 30, 1997, 1998 and 1999 from our audited consolidated financial statements, which are not included in this prospectus. The consolidated financial data as of March 31, 2002 and for the six months ended March 31, 2002 and the accompanying notes were derived from our unaudited consolidated financial statements, which are included in this prospectus. Historical results are not necessarily indicative of future results.

	Year Ended September 30,					Six Months Ended March 31,
	1997	1998	1999	2000	2001	2001	2002
	(in thousands, except per share data)
Consolidated Statement of Income Data:
Total revenues	$712,933	$842,654	$978,365	$1,379,750	$1,513,390	$717,237	$805,530
Cost of revenues	552,262	669,108	776,758	1,089,985	1,131,387	536,029	582,036	⁽¹⁾

Gross profit	160,671	173,546	201,607	289,765	382,003	181,208	223,494
Equity in earnings of joint ventures	5,438	9,599	10,018	10,576	4,275	1,884	1,769
General and administrative expenses	153,905	165,807	191,744	270,726	348,502	162,745	215,104	⁽¹⁾⁽²⁾

Income from operations	12,204	17,338	19,881	29,615	37,776	20,347	10,159
Interest expense, net	4,978	4,679	4,849	8,784	11,573	6,128	5,982

Income before income taxes	7,226	12,659	15,032	20,831	26,203	14,219	4,177
Provision for income taxes	4,359	7,276	4,452	3,122	8,647	4,704	1,378

Net income	$ 2,867	$ 5,383	$ 10,580	$ 17,709	$ 17,556	$ 9,515	$ 2,799

Net income per share ⁽³⁾ :
Basic	$ .23	$ .41	$ .74	$ .94	$ .75	$ .40	$ .11
Diluted	$ .22	$ .40	$ .70	$ .88	$ .71	$ .39	$ .10
Shares used in per share calculations ⁽³⁾ :
Basic	12,639	13,001	14,371	18,938	23,565	23,540	25,537
Diluted	13,011	13,538	15,053	20,011	24,704	24,434	26,848

(1)

(2)	Includes $8.5 million to fully vest participants in our Performance Unit Plan, which has been terminated.

(3)	In calculating per share data, the weighted average number of shares includes shares of common stock and common stock units outstanding during the relevant periods.

	As of September 30,
	1997	1998	1999	2000	2001	As of March 31, 2002
	(in thousands, except for employee data)
Consolidated Balance Sheet Data:
Cash and cash equivalents, excluding cash in unconsolidated joint ventures	$ 5,335	$ 25,569	$ 13,466	$ 44,662	$ 25,968	$24,781
Working capital	59,356	76,567	90,960	135,080	154,776	158,347
Total assets	262,661	323,571	373,280	720,602	784,969	882,296
Total long-term debt, excluding current portion	42,983	60,000	60,000	141,156	147,622	197,671
Redeemable common stock and common stock units	18,480	34,068	42,720	58,617	77,734	80,852
Stockholders’ equity	61,356	50,668	80,289	170,656	171,717	195,639



Other Data:
Number of full-time employees	5,900	6,400	7,200	12,100	12,700	14,600

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our consolidated financial statements and the related notes and other financial information included in this prospectus. Please note that management’s analysis of results of operations is based on our GAAP financial statements, modified to include net service revenues in addition to revenues, and to segregate from cost of revenues compensation expense related to non-cash ESOP contributions and stock matches, which has the effect of modifying GAAP gross profit, as more fully explained on page 19.

Overview

Recent Acquisitions

One of our strategies is to focus on mergers and acquisitions of technical niche and regional companies to complement our business sectors and geographic expansion. Since the beginning of fiscal 1998, we have acquired 14 companies increasing our presence in several industry sectors and geographic regions.

Fiscal 1999

On March 19, 1999, we acquired Day & Zimmermann Infrastructure, Inc. (now part of DMJM Aviation), an aviation project/construction management firm. On March 31, 1999, we acquired W.F. Castella, an engineering/land surveying firm in San Antonio, Texas. On May 18, 1999, we acquired Spillis Candela & Partners, an architectural and engineering firm in Coral Gables, Florida. The aggregate consideration paid in these transactions was $35.1 million in a combination of cash and stock, no liabilities were assumed, other than as included in working capital, and the purchases resulted in goodwill of $28.6 million.

Fiscal 2000

On April 7, 2000, we acquired Metcalf & Eddy, Inc., an international environmental engineering and consulting company. On April 18, 2000, we merged with Guy Maunsell International Limited (“Maunsell”), a consulting firm specializing in civil engineering and related disciplines. The aggregate consideration paid in these transactions was $145.0 million, net of excess cash on hand, in a combination of cash, stock and notes, no liabilities were assumed, other than as included in working capital, and the purchases resulted in goodwill of $122.2 million.

Fiscal 2001

On November 21, 2000, we acquired the transportation planning practice of KPMG Consulting. On December 7, 2000, we acquired the two-thirds of Halpern Glick Maunsell, a Perth-based engineering firm, that we did not already own. On April 26, 2001, we acquired the Warren Group, a UK-based water engineering firm. These transactions and three other small acquisitions were completed for an aggregate consideration of $21.7 million in a combination of cash, stock and notes, no liabilities were assumed, other than as included in working capital, and the purchases resulted in goodwill of $13.3 million.

Fiscal 2002

On October 11, 2001, we acquired the UK-based engineering firm Oscar Faber plc for $5.0 million in cash, $19.4 million in stock and $17.5 million in notes. No liabilities were assumed, other than accounts payable and

an estimated $16.6 million for an underfunded pension obligation, and the preliminary purchase price allocation resulted in goodwill of $52.4 million. The actual liability and goodwill will be adjusted pending completion of an actuarial valuation. On October 31, 2001 and February 5, 2002, we acquired two small consulting firms for aggregate consideration of $4.6 million in cash and stock.

All of our acquisitions have been accounted for as purchases and the results of operations of the acquired companies have been included in the consolidated results since the dates of acquisition.

Components of Income and Expense

Management internally analyzes the results of our operations using financial reports that differ from our financial statements using two non-GAAP measures. Other direct costs are segregated from cost of net service revenues resulting in net service revenues, which is a measure of work performed by our employees. In addition, compensation expense associated with the non-cash ESOP contribution and stock matches, which would be included in both cost of net service revenues and general and administrative expenses under GAAP, is segregated as shown below because it is considered a function of the level of stock purchased by employees and not a cost of work performed. These changes have the effect of modifying GAAP gross profit.

	Year Ended September 30,					Six Months Ended March 31,
	1997	1998	1999	2000	2001	2001	2002
Other Financial Data(1):
Total revenues	$712,933	$842,654	$978,365	$1,379,750	$1,513,390	$717,237	$805,530
Other direct costs	336,039	428,880	505,557	699,242	614,204	287,308	288,808

Net service revenues	376,894	413,774	472,808	680,508	899,186	429,929	516,722
Cost of net service revenues	211,020	237,188	266,933	386,889	511,160	246,215	288,484

Gross profit	165,874	176,586	205,875	293,619	388,026	183,714	228,238
Equity in earnings of joint ventures	5,438	9,599	10,018	10,576	4,275	1,884	1,769
General and administrative expenses	152,036	164,715	190,212	264,570	346,136	161,231	208,997
ESOP contribution and stock matches	7,072	4,132	5,800	10,010	8,389	4,020	10,851

Income from operations	$ 12,204	$ 17,338	$ 19,881	$ 29,615	$ 37,776	$ 20,347	$ 10,159

(1)	For a reconciliation to the consolidated totals, see Note Q to the Notes to our Consolidated Financial Statements and Note E to the Notes to our Interim Consolidated Financial Statements appearing elsewhere in this prospectus.

Total Revenues

We recognize revenues using the percentage-of-completion method. Under this method, revenue is recorded generally on the basis of the ratio of direct labor hours incurred to the estimated total direct labor hours. We review our progress on each contract periodically and losses, if any, are recognized as soon as we determine that the contract will result in a loss.

Other Direct Costs

On some projects we are responsible for other direct costs or “pass throughs” (e.g. for third party field labor, subcontracts, or the procurement of materials or equipment). We account for the reimbursement of these expenses as revenues as these costs are incurred. However, on projects where the client elects to pay these costs directly, they are not reflected in our revenues or expenses. Thus, other direct costs can fluctuate significantly. We do not earn profits from pass throughs that are not associated with the level of effort expended by us on these pass throughs for supervision, accounting services and similar activities, and in the cases where we do earn profits, the amount is insignificant. Profits on projects that contain pass throughs are earned for services performed by our employees and are billed by us as professional services.

Net Service Revenues

Net service revenues reflect revenues recognized for services performed by us on projects and exclude other direct costs which are “passed through” to the client. Net service revenues and gross profit (as a % of net service revenues) are non-GAAP measures and may not be comparable to similarly titled items reported by other companies. We believe that net service revenues are a more accurate measure of our business because revenues include other direct, or pass through, costs.

Cost of Net Service Revenues

Cost of net service revenues reflect the direct cost of our own personnel (including fringe benefits and overhead expense) associated with net service revenue.

Equity in Earnings of Joint Ventures

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

General and Administrative Expenses

General and administrative expenses include all corporate overhead expenses, including personnel, occupancy, administrative, performance unit plan accruals, taxes, benefits and other operating expenses and prior to fiscal 2002, the amortization of costs in excess of net assets purchased. SFAS No. 142 prohibits amortization of goodwill after fiscal 2001.

ESOP Contribution and Stock Matches

We have employee benefit plans that provide for stock matches on employee purchases of our common stock and common stock units. The matching percentages for fiscal years 2001, 2000 and 1999 were 30.7%, 27.3% and 33.5%, respectively, based upon the formula in our plan. In anticipation of an IPO later in the fiscal year, the board of directors approved a change to the previously announced 25% stock match percentage for fiscal 2002. The new percentage will be the greater of a 100% match on purchases of common stock and common stock units in the first quarter of fiscal 2002 or a 50% match on purchases during the first six months of fiscal 2002, ending March 31, 2002. Matches are contributed to the ESOP in common stock and credited to the Non-Qualified Stock Purchase Plan in common stock units. After March 31, 2002, there will be no further stock matches. Accordingly, segregating ESOP contribution and stock matches will aid in comparing future with historic results of operations. However, ESOP contribution and stock matches are non-GAAP measures and segregating them from compensation included in cost of revenues and general and administrative expenses may not provide an accurate comparison to similarly titled captions reported by other companies.

Segment Analysis

We have three reportable segments: Americas-Infrastructure Group; Americas-Facilities Group; and Global Group. This segmentation corresponds to how we manage our business as well as the underlying characteristics of our markets.

As discussed above, a significant portion of our revenues relates to services provided by subcontractors and other non-employees that we categorize as “other direct costs.” Those pass through costs are typically paid to service providers upon our receipt of payment from the client. We have included information on net service revenues as we believe that it is a more meaningful measure with which to compare gross margin.

	Year ended September 30,						Six months ended March 31,
	1999		2000		2001		2001		2002
	(In thousands)
Total Revenues
Americas—Infrastructure	$412,082		$ 546,718		$ 683,373		$314,882		$350,724
Americas—Facilities	532,863		680,605		549,076		274,120		256,935
Global	32,919		151,333		277,475		127,319		197,846

Total ⁽¹⁾	$977,864		$1,378,656		$1,509,924		$716,321		$805,505

Net Service Revenues
Americas—Infrastructure	$288,153		$ 375,011		$ 468,581		$220,578		$243,608
Americas—Facilities	164,353		191,382		198,739		104,819		107,456
Global	19,801		113,021		228,400		104,959		165,633

Total ⁽¹⁾	$472,307		$ 679,414		$ 895,720		$430,356		$516,697

Gross Profit
Americas—Infrastructure	$133,332		$ 173,446		$ 216,907		$ 99,640		$112,910
Americas—Facilities	63,065		76,946		82,101		42,289		46,599
Global	8,977		42,133		85,552		40,869		68,704

Total ⁽¹⁾	$205,374		$ 292,525		$ 384,560		$182,798		$228,213

Gross Profit (as a % of Total Revenues)
Americas—Infrastructure	32	%	32	%	32	%	32	%	32	%
Americas—Facilities	12		11		15		15		18
Global	27		28		31		32		35

Total	21	%	21	%	25	%	26	%	28	%

Gross Profit (as a % of Net Service Revenues)
Americas—Infrastructure	46	%	46	%	46	%	45	%	46	%
Americas—Facilities	38		40		41		40		43
Global	45		37		37		39		41

Total	43	%	43	%	43	%	42	%	44	%

Equity in Earnings of Joint Ventures
Americas—Infrastructure	$ 3,403		$ 1,471		$ 1,060		$ 519		$ 720
Americas—Facilities	6,615		9,105		3,215		1,365		1,049

Total	$ 10,018		$ 10,576		$ 4,275		$ 1,884		$ 1,769

General and Administrative Expenses
Americas—Infrastructure	$112,103		$ 143,122		$ 177,182		$ 86,290		$ 93,022
Americas—Facilities	60,709		75,378		86,779		40,596		39,987
Global	6,300		32,983		65,223		28,945		55,029

Total ⁽¹⁾	$179,112		$ 251,483		$ 329,184		$155,831		$188,038

ESOP Contribution and Stock Matches
Americas—Infrastructure	$ 3,399		$ 3,096		$ 4,206		$ 1,792		$ 4,755
Americas—Facilities	1,914		1,787		2,507		1,070		2,537
Global	—		694		974		538		2,053

Total ⁽¹⁾	$ 5,313		$ 5,577		$ 7,687		$ 3,400		$ 9,345

Income from Operations
Americas—Infrastructure	$ 21,232		$ 28,699		$ 36,579		$ 11,978		$ 15,853
Americas—Facilities ⁽²⁾	7,057		8,886		(3,970	)	1,700		5,124
Global	2,677		8,456		19,355		11,773		11,622

Total ⁽¹⁾ ⁽³⁾	$ 30,966		$ 46,041		$ 51,964		$ 25,451		$ 32,599

Segment Assets
Americas—Infrastructure	$159,192		$ 263,034		$ 300,195		$296,107		$324,869
Americas—Facilities	183,287		198,672		217,642		211,692		222,029
Global	6,955		201,392		219,107		179,320		292,838

Total ⁽¹⁾	$349,434		$ 663,098		$ 736,944		$687,119		$839,736

(1)	For a reconciliation to the consolidated totals, see Note Q to the Notes to our Consolidated Financial Statements and Note E to the Notes to our Interim Consolidated Financial Statements appearing elsewhere in this prospectus.

(2)	Fiscal 2001 includes an $8.8 million increase in reserves for revenues previously recognized on a percentage-of-completion basis and unreimbursed contract costs on contracts completed in prior years at one of the operating companies.

(3)

Does not include corporate general and administrative expenses and other unallocated items totaling $11.1 million, $16.4 million and $14.2 million in fiscal 1999, 2000 and 2001, respectively, or $5.1 million and $22.4 million for the six months ended March 31, 2002 and 2001, respectively. See the reconciliation in Note Q to the Notes to our Consolidated Financial Statements and Note E to the Notes to our Interim Consolidated Financial Statements appearing elsewhere in this prospectus.

Results of Operations

The information provided below on percentage of total revenues and net service revenues and the information comparing the first six months of fiscal 2002, and the full years of fiscal 2001 and 2000 to prior periods should be read in conjunction with the other financial data table on page 19 and the segment information on page 21, both of which provide additional breakdowns of financial data from that disclosed in the financial statements contained on pages F-4 and F-34 and in the selected consolidated financial data table on page 17.

The following table presents our consolidated income statement data for the periods indicated as a percentage of total revenues:

	Year Ended September 30,						Six Months Ended March 31,
	1999		2000		2001		2001		2002
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Other direct costs	51.7		50.7		40.6		40.0		35.8

Net service revenues	48.3		49.3		59.4		60.0		64.2
Cost of net service revenues	27.3		28.0		33.8		34.3		35.8

Gross profit	21.0		21.3		25.6		25.7		28.4
Equity in earnings of joint ventures	1.0		.8		.3		.1		.1
General and administrative expenses	19.4		19.2		22.9		22.4		25.9	⁽¹⁾
ESOP contribution and stock matches	.6		.7		.5		.6		1.4	⁽²⁾

Income from operations	2.0		2.2		2.5		2.8		1.2	⁽¹⁾⁽²⁾
Interest expense, net	.5		.7		.8		.8		.7

Income before income taxes	1.5		1.5		1.7		2.0		.5	⁽¹⁾⁽²⁾
Provision for income taxes	.4		.2		.6		.7		.2

Net income	1.1	%	1.3	%	1.1	%	1.3	%	.3	% ⁽³⁾

(1)	Includes 1.1% attributable to fully vesting participants in our Performance Unit Plan, which has been terminated.

(2)	Includes 1.0% attributable to fully vesting participants in the Senior Executive Equity Investment Plan, which were previously being accrued ratably over a ten-year vesting period, and to reflect the change in the stock match percentage.

(3)	Includes, net of tax, 1.4% attributable to the full vesting of the Performance Unit Plan, the Senior Executive Equity Investment Plan stock match and the change in the stock match percentage.

The following table presents our consolidated income statement data for the periods indicated as a percentage of net service revenues:

	Year Ended September 30,						Six Months Ended March 31,
	1999		2000		2001		2001		2002
Total revenues	206.9	%	202.7	%	168.3	%	166.6	%	155.8	%
Other direct costs	106.9		102.7		68.3		66.6		55.8

Net service revenues	100.0		100.0		100.0		100.0		100.0
Cost of net service revenues	56.5		56.8		56.8		57.1		55.7

Gross profit	43.5		43.2		43.2		42.9		44.3
Equity in earnings of joint ventures	2.1		1.5		.5		.1		.1
General and administrative expenses	40.2		38.9		38.5		37.4		40.3	⁽¹⁾
ESOP contribution and stock matches	1.2		1.5		1.0		.9		2.1	⁽²⁾

Income from operations	4.2		4.3		4.2		4.7		2.0	⁽¹⁾⁽²⁾
Interest expense, net	1.0		1.3		1.3		1.4		1.2

Income before income taxes	3.2		3.0		2.9		3.3		.8	⁽¹⁾⁽²⁾
Provision for income taxes	1.0		.4		.9		1.1		.3

Net income	2.2	%	2.6	%	2.0	%	2.2	%	.5	% ⁽³⁾

(1)	Includes 1.6% attributable to fully vesting participants in our Performance Unit Plan, which has been terminated.

(2)	Includes 1.5% attributable to the fully vesting of participants in the Senior Executive Equity Investment Plan, which were previously being accrued ratably over a ten-year vesting period, and to reflect the change in the stock match percentage.

(3)	Includes, net of tax, 2.1% attributable to the full vesting of the Performance Unit Plan, the Senior Executive Equity Investment Plan stock match and the change in the stock match percentage.

Six Months Ended March 31, 2002 and March 31, 2001

Total Revenues. For the first six months of fiscal 2002, revenues were $805.5 million, an increase of $88.3 million, or 12.3%, over the first half of fiscal 2001. Excluding revenues from operations acquired during fiscal 2001 and fiscal 2002, revenues were $737.2 million in the first six months of fiscal 2002, an increase from fiscal 2001 of 4.5%, or $31.5 million.

Revenues in the Americas-Infrastructure Group were $350.7 million in the first six months of fiscal 2002, an increase of $35.8 million, of which $12.8 million were pass throughs, or 11.4%, over the first half of fiscal 2001. Excluding revenues from operations acquired during fiscal 2001 and fiscal 2002, revenues in the Americas-Infrastructure Group were $342.3 million in fiscal 2002, an increase of $29.8 million or 9.5%, over the first half of fiscal 2001 and can primarily be attributed to new contracts and increases in existing contracts as a result of various United States federal and state infrastructure initiatives, including the Transportation Equity Act for the 21st Century (TEA-21), and various U.S. environmental initiatives and programs.

Revenues in the Americas-Facilities Group were $256.9 million in the first six months of fiscal 2002, a decrease of $17.2 million (including approximately $19.8 million of pass throughs), or 6.3%, from the first half of fiscal 2001. Excluding revenues from operations acquired during fiscal 2001 and fiscal 2002, revenues in the Americas-Facilities Group were $255.2 million in fiscal 2002, a decrease of $19.0 million, or 6.9% from fiscal 2001. The decrease in revenues was the result of a reduction in pass through costs due to the economic slowdown in the U.S. affecting the build out portion of the private sector business, offset in part by increases in other areas of this segment.

Revenues in the Global Group were $197.8 million in the first six months of fiscal 2002, an increase of $70.5 million, or 55.4%, over the first half of fiscal 2001. Excluding revenues from operations acquired during fiscal 2001 and fiscal 2002, revenues in the Global Group were $139.8 million in the first six months of fiscal 2002, an increase of $21.5 million, or 18.2%, over fiscal 2001. The increase was due primarily to growth in our Hong Kong and China markets.

Net Service Revenues. For the first six months of fiscal 2002, net service revenues were $516.7 million, an increase of $86.8 million, or 20.2%, over the first half of fiscal 2001. Excluding net service revenues from operations acquired during fiscal 2001 and fiscal 2002, net service revenues were $462.1 million in the first half of fiscal 2002, an increase of $39.9 million, or 9.5%, over fiscal 2001.

Net service revenues in the Americas-Infrastructure Group were $243.6 million in the first six months of fiscal 2002, an increase of $23.0 million, or 10.4%, over the first half of fiscal 2001. Excluding net service revenues from operations acquired during fiscal 2001 and fiscal 2002, net service revenues in the Americas-Infrastructure Group were $239.5 million in fiscal 2002, an increase of $20.5 million, or 9.4%, over fiscal 2001.

Net service revenues in the Americas-Facilities Group were $107.5 million in the first six months of fiscal 2002, an increase of $2.3 million, or 2.5% over the first half of fiscal 2001. Excluding net service revenues from operations acquired during fiscal 2001 and fiscal 2002, net service revenues in the Americas-Facilities Group were $106.0 million in fiscal 2002, an increase of $1.1 million, or 1.1% over fiscal 2001.

Net service revenues in the Global Group were $165.6 million in the first six months of fiscal 2002, an increase of $60.7 million, or 57.8%, over fiscal 2001. Excluding net service revenues from operations acquired during fiscal 2001 and fiscal 2002, net service revenues in the Global Group were $116.6 million in the first half of fiscal 2002, an increase of $19.2 million, or 19.7%, over fiscal 2001.

Cost of Net Service Revenues. For the first six months of fiscal 2002, cost of net service revenues was $288.5 million, an increase of $42.3 million, or 17.2%, over the first half of fiscal 2001. Excluding cost of net service revenues from operations acquired during fiscal 2001 and fiscal 2002, cost of net service revenues was $264.2 million in fiscal 2002, an increase of $21.8 million, or 9.0%, over fiscal 2001. The cost of net service

revenues across our business segments was generally in line with the changes in net service revenues for our business segments.

Cost of net service revenues for the Americas-Infrastructure Group was $130.7 million in the first six months of fiscal 2002, an increase of $9.8 million, or 8.1%, over the first half of fiscal 2001. Excluding cost of net service revenues from operations acquired during fiscal 2001 and fiscal 2002, cost of net service revenues for the Americas-Infrastructure Group was $128.7 million in fiscal 2002, an increase of $8.6 million, or 7.1%, over fiscal 2001.

Cost of net service revenues for the Americas-Facilities Group was $60.9 million in the first six months of fiscal 2002, a decrease of $1.7 million, or 2.7% from the first six months of fiscal 2001. Excluding cost of net service revenues from operations acquired during fiscal 2001 and fiscal 2002, cost of net service revenues in the Americas-Facilities Group was $60.3 million in fiscal 2002, a decrease of $2.2 million, or 3.5% from fiscal 2001.

Cost of net service revenues for the Global Group was $96.9 million in the first six months of fiscal 2002, an increase of $32.8 million, or 51.2%, over the first half of fiscal 2001. Excluding cost of net service revenues from operations acquired during fiscal 2001 and fiscal 2002, cost of net service revenues in the Global Group was $75.2 million in the first half of fiscal 2002, an increase of $14.1 million, or 23.2%, over fiscal 2001.

Gross Profit. Gross profit was up $44.5 million, or 24.2%, to $228.2 million in the first six months of fiscal 2002, from $183.7 million in fiscal 2001. Excluding gross profit from operations acquired during fiscal 2001 and 2002, gross profit was $197.8 million in the first half of fiscal 2002, an increase of $19.4 million, or 10.9%, over fiscal 2001. Gross profit as a percentage of net service revenues was 44.2% in the first half of fiscal 2002 compared to 42.7% in the first half of fiscal 2001.

Gross profit for the Americas-Infrastructure Group was $112.9 million in the first six months of fiscal 2002, an increase of $13.3 million, or 13.3% over fiscal 2001. Excluding gross profit from operations acquired during fiscal 2001 and fiscal 2002, gross profit for the Americas-Infrastructure Group was $110.8 million in the first half of fiscal 2002, an increase of $12.0 million, or 12.1%, over fiscal 2001.

Gross profit for the Americas-Facilities Group was $46.6 million in the first six months of fiscal 2002, an increase of $4.3 million, or 10.2% over the first half of fiscal 2001. Excluding gross profit from operations acquired during fiscal 2001 and fiscal 2002, gross profit in the Americas-Facilities Group was $45.6 million in fiscal 2002, an increase of $3.3 million, or 7.9% over fiscal 2001.

Gross profit for the Global Group was $68.7 million in the first six months of fiscal 2002, an increase of $27.8 million, or 68.1%, over the first half of fiscal 2001. Excluding gross profit from operations acquired during fiscal 2001 and fiscal 2002, gross profit in the Global Group was $41.3 million in the first half of fiscal 2002, an increase of $5.0 million, or 13.8%, over fiscal 2001.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures was $1.8 million in the first six months of fiscal 2002, a decrease of $.1 million from the first six months of fiscal 2001. Equity in earnings of joint ventures included $1.3 million for the six months ended March 31, 2002 and 2001, respectively, for our portion of fees billed by the joint ventures with respect to services performed by us.

Equity in earnings of joint ventures for the Americas-Infrastructure Group was $.7 million in the first half of fiscal 2002, an increase of $.2 million from fiscal 2001.

Equity in earnings of joint ventures for the Americas-Facilities Group was $1.1 million in the first half of fiscal 2002, a decrease of $.3 million from fiscal 2001.

General and Administrative Expenses. General and administrative expenses were $209.0 million in the first six months of fiscal 2002 which ended March 31, 2002, up $47.8 million, or 29.6%, from $161.2 million in the first half of fiscal 2001. Excluding general and administrative expenses relating to the acquisitions during fiscal 2001 and 2002, general and administrative expenses were $183.1 million in the first half of fiscal 2002, an increase of $24.8 million, or 15.6%, over fiscal 2001. The increase was spread over all our lines of business and

results partly from annual salary increases effective January 1, 2002; however, $8.5 million related to a one-time charge to earnings relating to our decision to fully vest participants in our discontinued Performance Unit Plan. While we have recognized these expenses in the first quarter of fiscal 2002, our cash payments under the Performance Unit Plan will be made on the scheduled payment dates in fiscal 2003 through fiscal 2006. See “Management—Employee Benefit Plans—Performance Unit Plan.” General and administrative expenses also decreased by $5.0 million due to the discontinuance of the amortization of goodwill in fiscal 2002, the result of adopting FAS 142 which no longer permits the amortization of goodwill.

General and administrative expenses as a percentage of total revenues was 25.9% in the first half of fiscal 2002, up from 22.5% in fiscal 2001. On a comparable basis, general and administrative expenses, excluding the $8.5 million charge and including the $5.0 million of goodwill not amortized, as a percentage of total revenues would have been 25.5% in the first half of fiscal 2002 up from 22.5% in the first half of fiscal 2001.

General and administrative expenses as a percentage of net service revenues was 40.4% in the first half of fiscal 2002, up from 37.5% in fiscal 2001. On a comparable basis, general and administrative expenses, excluding the $8.5 million charge and including the $5.0 million of goodwill not amortized, as a percentage of net service revenues would have been 39.8% in fiscal 2002 up from 37.5% in fiscal 2001. In the second half of fiscal 2002 and beyond, we expect general and administrative expenses to increase due to the increased costs associated with becoming a public reporting company as well as increased insurance premium costs generally.

ESOP Contribution and Stock Matches. We accrued $10.9 million for stock matches in the first six months of fiscal 2002, compared to $4.0 million in the first six months of fiscal 2001. In anticipation of an IPO later in the fiscal year, the stock match in the first six months of fiscal 2002 included a one-time charge of $2.8 million to fully accrue stock matches relating to the Senior Executive Equity Investment Plan (SEEIP) purchases, which were previously being accrued ratably over a ten year vesting period, and a one-time charge of $4.5 million to reflect the change in the stock match percentage subsequent to March 31, 2002. The board of directors has approved a change to the previously announced 25% stock match percentage for fiscal 2002. The new percentage will be the greater of a 100% match on purchases of common stock and common stock units in the first quarter of fiscal 2002 or a 50% match on purchases during the first six months of fiscal 2002, ending March 31, 2002. After March 31, 2002, there will be no further stock matches.

Income from Operations. Higher gross profit, offset by higher general and administrative expenses, resulted in income from operations of $10.2 million, a decrease of $10.2 million from the $20.3 million of income in the first six months of fiscal 2001. Without the charge in fiscal 2002 for vesting participants in the Performance Unit Plan, the full accrual of the SEEIP match, and the increase in the match percentage, income from operations would have been $25.9 million. After removing goodwill amortization from the first half of fiscal 2001 as if SFAS No. 142 had been in effect during that period, income from operations in the first half of fiscal 2002 increased $1.2 million over the first half of fiscal 2001.

Interest Expense. Interest expense (net of $.6 million in interest income) in the first six months of fiscal 2002 was $6.0 million, a decrease of $.1 million, or 2%, over fiscal 2001 due to higher average balances offset by lower interest rates.

Income Taxes. Provision for income taxes was $1.4 million in the first half of fiscal 2002, compared to a provision of $4.7 million in fiscal 2001. The effective tax rate was 33.1% in fiscal 2002 and 33.1% in fiscal 2001.

Net Income. The factors described above resulted in a net income of $2.8 million in the first six months of fiscal 2002, compared to net income of $9.5 million in fiscal 2001. Net income in fiscal 2002 includes (net of taxes) a charge of $5.7 million for the vesting of participants in the discontinued Performance Unit Plan, and the full accrual of $4.9 million for the SEEIP match and the change in the stock match percentage. Without these charges, we would have reported net income of $13.4 million in the first half of fiscal 2002.

Net Income Per Share—Basic. Basic net income per share decreased $.29 per share from $.40 per share in the first half of fiscal 2001 to $.11 per share in fiscal 2002. The decrease is attributable to the recording of the charge for the vesting in the Performance Unit Plan ($.22 per share), the full accrual of the SEEIP match and the change in stock match percentage ($.19 per share), offset by increases in results from operations. Without these charges, we would have reported basic net income per share of $.52 per share.

Fiscal years ended September 30, 2001 and September 30, 2000

Total Revenues. For fiscal 2001, revenues were $1,513.4 million, an increase of $133.6 million, or 9.7%, over fiscal 2000. Excluding revenues from operations acquired during fiscal 2000 and fiscal 2001, revenues were $1,138.0 million in fiscal 2001, a decrease from fiscal 2000 of 5.4%, or $64.9 million (of which approximately $118.0 million were pass throughs, offset by a net increase in revenues of $53.1 million in other areas across our business). As described below, all of the above decrease in revenues occurred in the Americas-Facilities Group while revenues in the Americas-Infrastructure Group increased. The decrease in revenues can be specifically attributed to the completion of a long-term outsourcing contract in April 2000 not fully replaced by the startup of a smaller contract later in fiscal 2000, the net of which resulted in a drop in revenues of $79.6 million (of which approximately $78.1 million were pass throughs), and a decrease in revenues of $67.1 million (of which approximately $57.3 million were pass throughs) caused by the economic downturn in the U.S. affecting private sector building, both of which were offset in part by net increases in revenues of $76.1 million in other areas across our business.

Revenues in the Americas-Infrastructure Group were $683.4 million in fiscal 2001, an increase of $136.7 million, or 25.0%, over fiscal 2000. Excluding revenues from operations acquired during fiscal 2000 and fiscal 2001, revenues in the Americas-Infrastructure Group were $558.8 million in fiscal 2001, an increase of $72.1 million (of which approximately $21.8 million were pass throughs), or 14.8%, over fiscal 2000 and can primarily be attributed to new contracts and increases in existing contracts as a result of accelerated expenditures in various United States federal and state infrastructure initiatives, including the Transportation Equity Act for the 21st Century (TEA-21), and various U.S. environmental initiatives and programs.

Revenues in the Americas-Facilities Group were $549.1 million in fiscal 2001 (including approximately $138.9 million of pass throughs), a decrease of $131.5 million, or 19.3%, from fiscal 2000. The decrease was attributable to the completion of the long-term outsourcing contract not fully replaced by the startup of a smaller contract and the decrease in private sector pass through revenues described above, offset in part by revenue increases in other areas of this segment.

Revenues in the Global Group were $277.5 million in fiscal 2001, an increase of $126.1 million, or 83.4%, over fiscal 2000. Excluding revenues from operations acquired in fiscal 2001 and 2000, revenues in the Global Group were $19.4 million in fiscal 2001, a decrease of $15.2 million, or 44.0%, from fiscal 2000 resulting from cancellations and delays in projects in southeast Asia caused by the economic downturn in the region.

Net Service Revenues. For fiscal 2001, net service revenues were $899.2 million, an increase of $218.7 million, or 32.1%, over fiscal 2000. Excluding net service revenues from operations acquired during fiscal 2000 and fiscal 2001, net service revenues were $607.4 million in fiscal 2001, an increase of $53.1 million, or 9.6%, over fiscal 2000.

Net service revenues in the Americas-Infrastructure Group were $468.6 million in fiscal 2001, an increase of $93.6 million, or 25.0%, over fiscal 2000. Excluding net service revenues from operations acquired during fiscal 2000 and fiscal 2001, net service revenues in the Americas-Infrastructure Group were $390.1 million in fiscal 2001, an increase of $50.4 million, or 14.8%, over fiscal 2000.

Net service revenues in the Americas-Facilities Group were $198.7 million in fiscal 2001, an increase of $7.4 million, or 3.8%, over fiscal 2000.

Net service revenues in the Global Group were $228.4 million in fiscal 2001, an increase of $115.4 million, or 102.1%, over fiscal 2000. Net service revenues in fiscal 2001 included $217.5 million attributable to acquisitions in fiscal 2000 and 2001.

Cost of Net Service Revenues. For fiscal 2001, cost of net service revenues was $511.2 million, an increase of $124.3 million, or 32.1%, over fiscal 2000. Excluding cost of net service revenues from operations acquired during fiscal 2000 and fiscal 2001, cost of net service revenues was $339.5 million in fiscal 2001, an increase of $27.5 million, or 8.8%, over fiscal 2000. The cost of net service revenues across our business segments was generally in line with the changes in net service revenues for our business segments.

Cost of net service revenues for the Americas-Infrastructure Group was $251.7 million in fiscal 2001, an increase of $50.1 million, or 24.9%, over fiscal 2000. Excluding cost of net service revenues from operations acquired during fiscal 2000 and fiscal 2001, cost of net service revenues for the Americas-Infrastructure Group was $213.5 million in fiscal 2001, an increase of $28.0 million, or 15.1%, over fiscal 2000.

Cost of net service revenues for the Americas-Facilities Group was $116.6 million in fiscal 2001, an increase of $2.2 million, or 1.9%, over fiscal 2000.

Cost of net service revenues for the Global Group was $142.8 million in fiscal 2001, an increase of $72.0 million, or 101.5%, over fiscal 2000. Cost of net revenues in fiscal 2001 consisted predominantly of the cost of net revenues attributable to acquisitions in fiscal 2000 and 2001.

Gross Profit. Gross profit was up $94.4 million, or 32.2%, to $388.0 million in fiscal 2001 from $293.6 million in fiscal 2000. Excluding gross profit from operations acquired during fiscal 2000 and 2001, gross profit was $267.9 million in fiscal 2001, an increase of $25.6 million, or 10.6% over fiscal 2000. Gross profit as a percentage of net service revenues was 43.2% in both fiscal 2001 and fiscal 2000.

Gross profit for the Americas-Infrastructure Group was $216.9 million in fiscal 2001, an increase of $43.5 million, or 25.1%, over fiscal 2000. Excluding gross profit for operations acquired during fiscal 2000 and fiscal 2001, gross profit for the Americas-Infrastructure Group was $176.6 million in fiscal 2001, an increase of $22.3 million, or 14.5%, over fiscal 2000.

Gross profit for the Americas-Facilities Group was $82.1 million in fiscal 2001, an increase of $5.2 million, or 6.7%, from fiscal 2000.

Gross profit for the Global Group was $85.6 million in fiscal 2001, an increase of $43.4 million, or 103.1%, over fiscal 2000. Gross profit in fiscal 2001 consisted primarily of the gross profit attributable to the acquisitions in fiscal 2000 and 2001.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures was $4.3 million in fiscal 2001, down $6.3 million from the $10.6 million in fiscal 2000. Equity in earnings of joint ventures included $3.2 million and $7.0 million for fiscal 2001 and 2000, respectively, for our portion of fees billed by the joint ventures with respect to services performed by us.

Equity in earnings of joint ventures for the Americas-Infrastructure Group was $1.1 million in fiscal 2001, a decrease of $.4 million from fiscal 2000.

Equity in earnings of joint ventures for the Americas-Facilities Group was $3.2 million in fiscal 2001, a decrease of $5.9 million from fiscal 2000. The decrease was primarily the result of concluding a project in late fiscal 2000, with no equivalent replacement in fiscal 2001.

General and Administrative Expenses. General and administrative expenses were $346.1 million in fiscal 2001, up $81.6 million, or 30.8%, from $264.6 million in fiscal 2000. Excluding general and administrative expenses relating to the acquisitions during fiscal 2000 and 2001, general and administrative expenses were

$249.5 million in fiscal 2001, an increase of $27.1 million, or 12.2%, over fiscal 2000. Approximately $8.8 million of the increase related to an increased reserve for revenues previously recognized on a percentage of completion basis and unreimbursed contract costs on contracts completed in prior years at one of our operating companies. General and administrative expenses also increased by $4.1 million due to an increase in amortization
of goodwill ($9.9 million in fiscal 2001) over 2000 primarily as a result of a full years amortization of goodwill relating to the acquisitions in April 2000. General and administrative expenses as a percentage of net service revenues was 38.5% in fiscal 2001, compared to 38.9% in fiscal 2000. In fiscal 2002, we expect general and administrative expenses to increase due to the increased costs associated with becoming a public reporting company and due to the accelerated vesting of participants’ awards under our Performance Unit Plan. In the first quarter of fiscal 2002, we terminated our Performance Unit Plan and fully vested all participants at the projected level of each participant’s target award based on estimated performance for calendar year 2002, which will be offset in part by no longer amortizing goodwill as required under FASB Statement 142. While we will recognize these expenses in fiscal 2002, our cash payments under the Performance Unit Plan will be made on the scheduled payment dates in fiscal 2003 through fiscal 2006. See “Management—Employee Benefit Plans—Performance Unit Plan.”

ESOP Contribution and Stock Matches. We accrued $8.4 million for stock matches in fiscal 2001, compared to $10.0 million in fiscal 2000 which included $4.5 million related to cumulative stock purchases under our Senior Executive Equity Investment Plan.

Income from Operations. Higher gross profit, partially offset by higher general and administrative expenses, resulted in income from operations of $37.8 million, an increase of $8.2 million, or 27.6%, over fiscal 2000.

Interest Expense. Interest expense (net of $1.3 million interest income in fiscal 2001) was $11.6 million in fiscal 2001, an increase of $2.8 million, or 31.8%, over fiscal 2000. The increase is the result of slightly lower (.3%) average interest rates in fiscal 2001 on $57.0 million higher average borrowings (a large portion of which was due to borrowing to consummate acquisitions), net of $.4 million of additional interest income in 2001 on notes receivable from stockholders under our Senior Executive Equity Investment Plan.

Income Taxes. Provision for income taxes was $8.6 million in fiscal 2001, an increase of $5.5 million over fiscal 2000, resulting from an increase in our effective tax rate of 33.0% in fiscal 2001 versus 15.0% in fiscal 2000. The low effective tax rate in fiscal 2000 was primarily the result of a one-time recognition of research and development tax credits relating to fiscal years prior to fiscal 2000 and foreign tax attributes, primarily the result of acquiring operations in Hong Kong with lower tax rates compared to the U.S.

Net Income. The factors described above resulted in net income of $17.6 million in fiscal 2001 compared to $17.7 million in fiscal 2000, a .9% decrease. Although income from operations increased by $8.2 million, an increase in net interest expense of $2.8 million and increased provision for income taxes of $5.5 million resulted in a decrease in net income of $.2 million.

Net Income Per Share—Basic. Basic net income per share decreased $.19 per share from $.94 per share in fiscal 2000 to $.75 per share in fiscal 2001. The decrease can largely be attributed to the increase in reserves for revenues previously recognized on a percentage-of-completion basis and unreimbursed contract costs in fiscal 2001 which resulted in a decrease of $.25 per share and the increase in the effective tax rate from 15.0% in fiscal 2000 (the reasons for the tax rate in fiscal 2000 are described above) to 33.0% in fiscal 2001 which caused a decrease of $.20 per share, offset in part by the non-recurrence of the $4.5 million of Senior Executive Equity Investment Plan stock matches in fiscal 2000, which added $.13 per share.

Fiscal years ended September 30, 2000 and September 30, 1999

Total Revenues. For fiscal 2000, revenues were $1,379.8 million, an increase of $401.4 million, or 41.0%, over fiscal 1999. Approximately $176.8 million of this increase is attributable to the acquisitions in April 2000. The increase in revenues attributable to the acquisitions included $68.0 million in the Americas-Infrastructure

Group, $53.1 million in the Americas-Facilities group and $116.8 million in the Global Group. Excluding revenues from operations acquired during fiscal 2000 and fiscal 1999, revenues were $1,141.8 million in fiscal 2000, an increase from fiscal 1999 of 20.2%, or $192.0 million. Of this increase, approximately $101.5 million related to pass through revenues, while $66.6 million was primarily due to increased revenues from the Americas-Infrastructure Group and the remaining $23.9 million was due to increased revenues within the Americas-Facilities and Global Groups.

Revenues in the Americas-Infrastructure Group were $546.7 million in fiscal 2000, an increase of $134.6 million, or 32.7%, over fiscal 1999. Excluding revenues from acquisitions in fiscal 2000 and 1999, revenues in the Americas-Infrastructure Group were $478.7 million, an increase of $66.6 million (of which approximately $22.2 million were pass through revenues), or 16.2%, over fiscal 1999. The increase was due to new contracts and increases in existing contracts as a result of accelerated expenditures for United States federal and state infrastructure projects, particularly in the rail and transit sector.

Revenues in the Americas-Facilities Group were $680.6 million in fiscal 2000, an increase of $147.7 million (of which approximately $120.7 million were “pass throughs”), or 27.7%, over fiscal 1999. Excluding revenues from operations acquired during fiscal 2000 and fiscal 1999, revenues in the Americas-Facilities Group were $627.5 million in fiscal 2000, an increase of $94.6 million (with a corresponding increase of approximately $101.5 million in pass through revenues), or 17.9%, over fiscal 1999. The increase in Americas-Facilities Group revenue was due primarily to increased private sector activity in industrial and technical projects that resulted in revenue increases of $81.2 million (of which approximately $67.5 million were pass through revenues) as well as the startup of an outsourcing contract in fiscal 2000, together with the completion of a larger outsourcing contract, that resulted in a net increase of $31.1 million (of which approximately $30.2 million were pass through revenues).

Revenues in the Global Group were $151.3 million in fiscal 2000, an increase of $118.4 million over fiscal 1999. Virtually all of the increase is attributable to an acquisition in April 2000.

Net Service Revenues. For fiscal 2000, net service revenues were $680.5 million, an increase of $207.7 million, or 43.9%, over fiscal 1999. Excluding net service revenues from operations acquired during fiscal 2000 and fiscal 1999, net service revenues were $513.3 million in fiscal 2000, an increase of $59.3 million, or 13.1%, over fiscal 1999.

Net service revenues in the Americas-Infrastructure Group were $375.0 million in fiscal 2000, an increase of $86.9 million, or 30.1%, over fiscal 1999. Excluding net service revenues from operations acquired during fiscal 2000 and fiscal 1999, net service revenues in the Americas-Infrastructure Group increased $44.4 million, or 15.4%, over fiscal 1999.

Net service revenues in the Americas-Facilities Group were $191.4 million in fiscal 2000, an increase of $27.0 million, or 16.5%, over fiscal 1999. Excluding net service revenues from operations acquired during fiscal 2000 and fiscal 1999, net service revenues in the Americas-Facilities Group decreased $6.8 million, or 4.2%, from fiscal 1999.

Net service revenues in the Global Group were $113.0 million in fiscal 2000, an increase of $93.2 million over fiscal 1999. Virtually all of the increase is attributable to the acquisition in April 2000.

Cost of Net Service Revenues. For fiscal 2000, cost of net service revenues was $386.9 million, an increase of $120.0 million, or 44.9%, over fiscal 1999. Approximately $74.9 million of this increase was attributable to the acquisitions in April 2000. Excluding cost of net service revenues from operations acquired during fiscal 2000 and fiscal 1999, cost of net service revenues was $283.8 million in fiscal 2000, an increase of $29.7 million, or 11.7%, over fiscal 1999. The cost of net service revenues across our business segments was generally in line with the changes in net service revenues for our business segments.

Cost of net service revenues for the Americas-Infrastructure Group was $201.6 million in fiscal 2000, an increase of $46.7 million, or 30.2%, over fiscal 1999. Excluding cost of net service revenues from operations acquired during fiscal 2000 and fiscal 1999, cost of net service revenues for the Americas-Infrastructure Group was $180.0 million in fiscal 2000, an increase of $25.2 million, or 16.3%, over fiscal 1999.

Cost of net service revenues for the Americas-Facilities Group was $114.4 million in fiscal 2000, an increase of $13.1 million, or 12.9%, over fiscal 1999. Excluding cost of net service revenues from operations acquired during fiscal 2000 and fiscal 1999, cost of net service revenues for the Americas-Facilities Group was $91.7 million in fiscal 2000, a decrease of $9.6 million, or 9.5%, from fiscal 1999.

Cost of net service revenues for the Global Group was $70.9 million in fiscal 2000, an increase of $60.1 million over fiscal 1999. Virtually all of the increase in the Global Group is attributable to an acquisition in April 2000.

Gross Profit. Gross profit increased $87.7 million, or 42.6%, to $293.6 million in fiscal 2000 from $205.9 million in fiscal 1999. Gross profit as a percentage of net service revenues was 43.2% in fiscal 2000 compared to 43.5%in fiscal 1999. Excluding gross profit from operations acquired during fiscal 2000 and fiscal 1999, gross profit was $229.5 million in fiscal 2000, an increase of $29.6 million, or 14.8%, over fiscal 1999.

Gross profit for the Americas-Infrastructure Group was $173.4 million in fiscal 2000, an increase of $40.1 million, or 30.1%, over fiscal 1999. Excluding gross profit from operations acquired during fiscal 2000 and fiscal 1999, gross profit for the Americas-Infrastructure Group was $152.6 million in fiscal 2000, an increase of $19.3 million, or 14.5%, over fiscal 1999. Gross profit for the Americas-Facilities Group was $76.9 million in fiscal 2000, an increase of $13.9 million, or 22.0%, over fiscal 1999. Excluding gross profit from operations acquired during fiscal 2000 and fiscal 1999, gross profit for the Americas-Facilities Group was $65.8 million in fiscal 2000, an increase of $2.7 million, or 4.3%, over fiscal 1999. Gross profit for the Global Group was $42.1 million in fiscal 2000, an increase of $33.2 million over fiscal 1999.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures was $10.6 million in fiscal 2000, up $.6 million from the $10.0 million recorded in fiscal 1999. Equity in earnings of joint ventures included $7.0 million and $8.3 million for fiscal 2000 and 1999, respectively, for our portion of fees billed by the joint ventures with respect to services performed by us.

Equity in earnings of joint ventures for the Americas-Infrastructure Group was $1.5 million in fiscal 2000, a decrease of $1.9 million from fiscal 1999. This decrease results from the closeout of two large infrastructure projects.

Equity in earnings of joint ventures for the Americas-Facilities Group was $9.1 million in fiscal 2000, an increase of $2.5 million from fiscal 1999. The increase was primarily the result of earning full performance fees at the conclusion of one project, and, to a lesser degree, increased scope of work on another project resulting in increased earnings.

General and Administrative Expenses. General and administrative expenses were $264.6 million in fiscal 2000, up $74.4 million, or 39.1%, from $190.2 million in fiscal 1999. Excluding general and administrative expenses from operations acquired during fiscal 2000 and fiscal 1999, general and administrative expenses were $214.4 million in fiscal 2000, an increase of $27.9 million, or 15.0%, over fiscal 1999. General and administrative expenses also increased by $3.5 million due to an increase in amortization of goodwill ($5.8 million in fiscal 2000) over fiscal 1999, which was primarily the result of amortizing goodwill relating to the acquisitions in April 2000. General and administrative expenses as a percentage of net service revenues were 38.9% in fiscal 2000 compared to 40.2% in fiscal 1999.

ESOP Contribution and Stock Matches. We accrued $10.0 million for stock matches in fiscal 2000, including $4.5 million related to cumulative stock purchases under our Senior Executive Equity Investment Plan, compared to $5.8 million in fiscal 1999.

Income from Operations. Higher gross profit, partially offset by higher general and administrative expenses, resulted in income from operations being $29.6 million, or 49.0% higher in fiscal 2000 than in fiscal 1999. Approximately $7.9 million of the increase in income from operations was from the acquisitions in April 2000.

Interest Expense. Interest expense (net of $.9 million interest income in fiscal 2000) was $8.8 million in fiscal 2000, an increase of $3.9 million, or 81.2%, over fiscal 1999. The increase is the result of slightly higher (.7%) average interest rates in 2000 and $51.7 million higher average borrowings (a large portion of which was

to fund acquisitions), net of $.2 million more accrued interest income in fiscal 2000 from stockholders’ notes under our Senior Executive Equity Investment Plan.

Income Taxes. Provision for income taxes was $3.1 million in fiscal 2000, a decrease of $1.3 million, or 29.9%, versus fiscal 1999, resulting from a decrease in the combined effective tax rate of 15.0% in fiscal 2000 versus 29.6% in fiscal 1999. The low effective tax rate in fiscal 2000 was primarily the result of a one-time recognition of research and development tax credits relating to fiscal years prior to fiscal 2000 and foreign tax attributes, primarily the result of acquiring operations in Hong Kong with lower tax rates compared to the U.S.

Net Income. These factors resulted in a net income of $17.7 million in 2000, compared to $10.6 million in fiscal 1999, a 67.4% increase over fiscal 1999. Net income increased by $7.1 million due to a $1.3 million reduction in provision for income taxes and increased income from operations of $9.7 million, the latter offset in part by increased interest expense of $3.9 million.

Quarterly Results of Operations

Management internally analyzes the results of our operations using financial reports that differ from our financial statements using two non-GAAP measures. Other direct costs are segregated from cost of revenues resulting in net service revenues, which is a measure of work performed by our employees. In addition, compensation expense associated with the non-cash ESOP contribution and stock matches, which would be included in both cost of revenues and general and administrative expenses for GAAP purposes, is segregated as shown below because it is considered a function of the level of stock purchased by employees and not a cost of work performed. These changes have the effect of modifying GAAP gross profit.

The following table shows, for the periods indicated, selected data from our consolidated statements of income. This selected data has been derived from our unaudited consolidated financial statements, and we believe, includes all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of the results of operations for these periods.

The fourth quarter of our fiscal year is typically our strongest quarter. Within the U.S., net service revenues are usually the highest in this quarter, generally the result of milder weather conditions, which allows significantly more productivity from our civil engineering and inspection services and our construction and project management services, which typically expand during the high construction season of the summer months. We also tend to work significantly more overtime during the summer to make up for other periods when the weather shortens the work days. In addition, we find that the U.S. federal government tends to authorize more work during the period preceding the end of its fiscal year at September 30, and the expiration of many budgetary authorizations. Conversely, many U.S. state governments whose fiscal years end on June 30 tend to accelerate spending during the first quarter of their fiscal year when new funding budgets become available. Our general and administrative expenses also tend to be at lower levels during the fourth quarter when we typically cut back on marketing costs and, to a lesser degree, experience increased use of vacation accruals by our employees.

This unaudited selected quarterly financial data should be read in conjunction with the consolidated financial statements and notes included elsewhere in this prospectus. Our operating results in any quarter are not necessarily indicative of the results that may be expected for any future period.

	Three Months Ended
	June 30, 2000 ⁽¹⁾	Sept. 30, 2000 ⁽²⁾		Dec. 31, 2000	March 31, 2001	June 30, 2001 ⁽³⁾		Sept. 30, 2001	Dec. 31, 2001 ⁽⁴⁾		March 31, 2002
	(in thousands)
Total revenues	$360,404	$391,658		$347,850	$369,387	$395,045		$401,108	$391,251		$414,279
Other direct costs	162,635	180,362		140,949	146,359	164,164		162,731	144,433		144,375

Net service revenues	197,769	211,296		206,901	223,028	230,881		238,377	246,818		269,904
Cost of net service revenues	110,010	125,814		116,476	129,739	133,285		131,661	139,832		148,652

Gross profit	87,759	85,482		90,425	93,289	97,596		106,716	106,986		121,252
Equity in earnings of joint ventures	2,584	3,482		1,047	837	1,574		817	1,458		311
General and administrative expenses	79,368	73,916		81,161	80,070	97,604		87,301	103,563		105,434
ESOP contribution and stock matches	2,197	2,196		1,948	2,072	2,008		2,361	9,400		1,451

Income (loss) from operations	8,778	12,852		8,363	11,984	(442	)	17,871	(4,519	)	14,678
Interest expense, net	3,605	2,922		2,415	3,713	3,119		2,326	2,769		3,213

Income (loss) before income taxes	5,173	9,930		5,948	8,271	(3,561	)	15,545	(7,288	)	11,465
Income taxes (credit)	1,417	(701	)	1,964	2,740	(1,198	)	5,141	(2,405	)	3,783

Net income (loss)	$ 3,756	$ 10,631		$ 3,984	$ 5,531	$ (2,363	)	$ 10,404	$ (4,883	)	$ 7,682

(1)	The third quarter of fiscal 2000 includes the acquisitions in April 2000 of Metcalf & Eddy and the Maunsell Group. The decrease in the effective tax rate reflects the acquisition of the Maunsell Group operations in Hong Kong, which has lower tax rates than in the United States.

(2)	The fourth quarter of fiscal 2000 reflects a negative provision for income taxes and effective tax rate resulting from the one-time recognition of tax credits relating to fiscal years prior to fiscal 2000 and foreign tax attributes.

(3)	The third quarter of fiscal 2001 includes $8.8 million of increased reserves for revenues previously recognized on a percentage of completion basis and unreimbursed contract costs on contracts completed in prior fiscal years at one of our operating companies.

(4)

The first quarter of fiscal 2002 includes charges of $8.5 million to fully vest participants in our discontinued Performance Unit Plan, $2.8 million to fully accrue stock matches relating to the Senior Executive Equity Investment Plan, which were previously being accrued ratably over a ten-year vesting period, and $4.5 million to reflect the change in the stock match percentage.

Liquidity and Capital Resources

Cash Flows

We have historically relied on cash flow from operations, proceeds from sales of stock to our employees and credit facilities to satisfy our capital requirements. In the future, we may need to raise additional funds through public or private debt or equity financings in order to:

take advantage of opportunities, including more rapid expansion;

acquire businesses; or

respond to competitive pressures.

At March 31, 2002, cash and cash equivalents, other than cash in consolidated joint ventures, were $24.8 million, a decrease of $1.2 million from September 30, 2001. Our working capital increased by $3.6 million to $158.3 million at March 31, 2002.

At September 30, 2001, cash and cash equivalents, other than cash in consolidated joint ventures, were $26.0 million, a decrease of $18.7 million from September 30, 2000. Our working capital at September 30, 2001 increased by $19.7 million to $154.8 million at September 30, 2001, primarily due to the acquisitions in fiscal 2001 and increased accounts receivable, net of contract advances and costs and fees billed, unearned (resulting from increased revenue and an increase in the number of days receivables outstanding), which were not fully offset by increases in accounts payable and accrued expenses.

Net cash used by operating activities was $3.5 million for the six months ended March 31, 2002, a change of $29.4 million from the net cash used by operating activities of $32.9 million for the six months ended March 31, 2001. This change was primarily attributable to a smaller increase, totaling $39.4 million, in accounts receivable and costs and fees earned, unbilled compared to last year, excluding receivables acquired in acquisitions, in addition to a smaller decrease of $26.2 million in accounts payable and accrued expenses compared to the same period last year offset by a smaller increase totaling $28.2 million in contract advances and costs and fees billed, unearned in the previous year. A portion of the increase in billed receivables and some of the decrease in contract advances at March 31, 2002, was a result of delays in payment processing by some of our government clients, which we believe was due to reduced tax receipts. Net cash used by investing activities was $19.8 million for the six months ended March 31, 2002, up from $10.3 million in the six months ended March 31, 2001, primarily as a result of cash used for additions to property and equipment associated with the move of our Los Angeles offices. Net cash provided by financing activities was $23.2 million for the six months ended March 31, 2001, an increase of $20.2 million from the $3.0 million provided by financing activities in the six months ended March 31, 2001. This included an increase in short-term bank borrowings of $29.8 million in the six months ended March 31, 2002 versus net borrowings of $9.8 million in the six months ended March 31, 2001.

Net cash used by operating activities was $10.5 million for the year ended September 30, 2001, a change of $24.9 million from the net cash provided by operating activities of $14.4 million for the year ended September 30, 2000. This change was primarily attributable to an increase in accounts receivable and costs and fees earned, unbilled totaling $41.0 million over the prior year, excluding receivables acquired in acquisitions. We believe that a portion of the increase in accounts receivable resulted from delays in payment processing by many of our government clients due to reduced tax receipts and the events that occurred on September 11, 2001. Net cash used by investing activities was $28.2 million for the year ended September 30, 2001, a decrease of $31.6 million from the year ended September 30, 2000, primarily as a result of cash used for acquisitions being $38.2 million lower in fiscal 2001 than in fiscal 2000, offset by an increase in capital expenditures of $7.8 million. Net cash provided by financing activities was $15.5 million for the year ended September 30, 2001, a decrease of $61.4 million from the year ended September 30, 2000. This included private placements of senior notes of $21.0 million in fiscal 2001 versus $35.0 million in fiscal 2000 and a reduction in short-term bank borrowings of

$8.8 million in fiscal 2001 versus net borrowings of $35.8 million in fiscal 2000, offset in part by an increase in mortgage notes of $2.5 million and an exchange of common stock for promissory notes of $2.1 million in fiscal 2001 relating to the merger with the Maunsell Group in fiscal 2000.

Working Capital

Accounts receivable and costs and fees earned, unbilled grew by $25.1 million at March 31, 2002 over the balances at September 30, 2001. The growth was the result of a slight increase in revenue-per-day, excluding acquisitions, an increase of $27.8 million resulting from acquisitions and a $1.8 million growth in claims and requests for equitable adjustments on U.S. government projects offset by a decrease in the number of days that receivables were outstanding, excluding acquisitions. As compared to September 30, 2001, increases in accounts receivable and costs and fees earned, unbilled coupled with smaller increases in accounts payable and accrued expenses at the end of March 31, 2002 are typical for our business operations. The increases in receivables during the first half of fiscal 2002 were also somewhat affected by the delays in payments by our government clients as a result of reduced tax receipts.

Accounts receivable and costs and fees earned, unbilled grew by $75.0 million at September 30, 2001 over the prior year end. The growth was the result of a slight increase in revenue-per-day during the year, an increase in the number of days that receivables were outstanding compared to the previous year, excluding acquisitions, some of which can be attributed to delays in payment processing by many of our government clients as a result of reduced tax receipts and the events of September 11, 2001, an increase of $14.0 million in receivables resulting from acquisitions and a $7.5 million growth in claims and requests for equitable adjustments on U.S. government projects.

Although our statements of income for the fiscal year ended September 30, 2001 and the first six months of fiscal 2002 reflect significant increases in gross profits as compared to comparable prior periods, these did not convert directly into cash flows from operations due to: (1) significant increases in general and administrative

expenses as a result of increased revenues; and (2) the effects, among others, of reduced state tax receipts on the increase in the number of days that receivables are outstanding, which were not fully offset by increases in accounts payable and accrued expenses. Continued growth in revenues and future acquisitions will require additional working capital. We believe that the increase in the number of days receivables are outstanding since September 30, 2001, will not have a material adverse effect on our financial resources.

Collections of receivables subsequent to our most recent balance sheet on March 31, 2002 have followed normal patterns for this period. Days that receivables are outstanding generally range from 85 to 95 days with the average number of days outstanding at March 31, 2002 being 91. Customer concentrations of receivables tend to follow our client distribution as shown on page 49. With such a wide distribution of customers across private and government enterprises which are disbursed geographically across the U.S. and outside the U.S., we do not believe that a concentration exists that would pose a potential collection issue. In making acquisitions, we thoroughly analyze the receivables to be acquired and fully provide for questionable accounts at the date of acquisition. We have not experienced significant collection problems subsequent to the date of our acquisitions.

As in many service companies whose revenues depend to a great extent on billable labor hours, most of our charges are invoiced following the end of the month in which the hours have been worked, the majority usually within 15 days. Other direct costs are normally billed along with the labor hours, however, as opposed to salary costs which are generally paid every two weeks in the U.S. and monthly in certain countries outside the U.S., other direct costs are generally not paid until we receive payment (in some cases advances) from our customer.

Borrowings and Lines of Credit

We have $116 million of senior unsecured fixed-rate notes outstanding and issued as follows:

$21 million of 6.47% senior unsecured notes due October 7, 2006 with equal annual principal payments of $7.0 million commencing October 7, 2004;

$60 million of 6.93% senior unsecured notes due June 9, 2008 with equal annual principal payments of $8.6 million commencing June 9, 2002; and

$35 million of 8.38% senior unsecured notes due April 14, 2012 with equal annual principal payments of $7.0 million commencing April 14, 2008.

The 6.47% senior unsecured notes were issued under a three-year, $75 million uncommitted shelf facility with the Prudential Capital Group. We currently have $54 million available under this facility which expires at the earlier of July 2004 or the date on which the remaining availability is used. At any time prior to this expiration, we can request to issue long-term debt under this facility. The interest rate on these notes will reflect our credit standing as well as prevailing market rates of interest at the time of issuance.

Interest on all of the notes are payable either quarterly or semiannually in arrears, and all of the notes are subject to restrictive covenants, including a minimum interest coverage ratio, minimum fixed charge coverage ratio, maximum consolidated debt ratios and minimum consolidated net worth levels.

We have an unsecured committed line of credit with a syndicate of banks led by Bank of America, N.A. for $130 million, consisting of a maximum of $120 million available for funded debt and financial letters of credit and $10 million for performance letters of credit. The line of credit expires on May 31, 2004. At March 31, 2002, we had borrowed $64.8 million and the bank had issued $1.9 million of financial letters of credit on our behalf under the $120 million revolver and $21.3 million of performance letters of credit on our behalf. At March 31, 2002, $20.8 million of the remaining $53.0 million unused under the line was available for funding as a result of a limit on the maximum funded debt available based on our leverage ratio covenant. The line of credit provides for interest at either the bank’s base rate or 1.75% over the Interbank Offered Rate (“IBOR”), reducing in steps (to a maximum reduction of .75%) as specified leverage ratios are attained. The variable percentage depends on our leverage ratio at the end of the preceding quarter. At March 31, 2002, the variable percentage under the line of credit for the IBOR borrowing was 1.63%, and the effective borrowing rate was 3.66% per annum. We are required to comply with financial and other covenants, including limitations on the incurrence of

debt, dividends and similar distributions and maintenance of minimum fixed charge coverage ratios and minimum consolidated net worth levels.

Commitments and Contingencies

Other than normal property and equipment additions and replacements and commitments under our Performance Unit Plan, we currently do not have any significant capital expenditures or outlays planned. If we acquire any additional business in the future, however, additional working capital may be required.

We are contingently liable in the amount of approximately $30.0 million under standby letters of credit issued primarily in connection with general and professional liability insurance programs and for payment and performance guarantees relating to domestic and overseas contracts. In addition, in some instances we guarantee that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

We believe that our internally generated funds and amounts that are expected to be available to us under our uncommitted facility and line of credit are adequate to provide for our currently identifiable working capital requirements, including our commitments and contingencies, for at least the next 12 months.

Critical Accounting Policies

Our financial statements are presented in accordance with accounting principles generally accepted in the United States. Highlighted below are the accounting policies that management considers significant to the understanding and operations of our business.

Revenue Recognition

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

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

Claims Recognition

Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of unanticipated additional costs. We record claims in accordance with paragraph 65 of the American Institute of Certified Public Accountants Statement of Position 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”. This statement of position states that recognition of amounts related to claims as additional contract revenue is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. Those two requirements are satisfied by management’s

determination of the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor’s performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim is recorded to the extent that contract costs relating to the claim have been incurred. The amounts recorded, if material, are disclosed in the notes to the financial statements. Costs attributable to claims are treated as costs of contract performance as incurred. At September 30, 2000 and 2001 and March 31, 2002, we recorded claims and outstanding requests for equitable adjustments for U.S. Federal Government projects totaling $13.0 million, $20.5 million and $22.3 million, respectively.

Cost and Fees Earned, Unbilled/Costs and Fees Billed, Unearned

Cost and fees earned, unbilled represents the excess of contract costs and profits (or contract revenue) recognized to date on the percentage of completion accounting method over billings to date on the remainder of the contract. Unbilled work results when (1) the appropriate contract revenue amount has been recognized in accordance with the percentage of completion accounting method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract or the billing system does not accommodate billing until after the close of the accounting period in which the revenue is earned and/or (2) costs, recorded at estimated realizable value, related to claims are incurred.

Costs and fees billed, unearned represent the excess of billings to date, as allowed under the terms of a contract, over the amount of contract costs and profits (or contract revenue) recognized to date on the percentage of completion accounting method on certain contracts.

Investments in Unconsolidated Joint Ventures

We establish arrangements with other service providers to provide turnkey architecture, engineering, program management, construction management and operations and maintenance services through joint ventures. These joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is controlled by the joint venture executive committee which is comprised of a representative of each joint venture partner with equal voting rights, irrespective of the ownership percentage, which is generally the percentage split of work to be performed by each joint venture partner. The executive committee provides management oversight and assigns work efforts to the joint venture partners. We account for these non-controlled joint ventures on the equity method. Services performed by us and billed to the joint ventures with respect to work done by us for third party customers are recorded as our revenues in the period such services are rendered. In certain joint ventures, a fee is added to the respective billings from us and the other joint venture partners on the amounts billed to third party customers. These fees result in earnings to the joint venture and are split with each of the joint venture partners and paid to the joint venture partners upon collection from the third party customer. We record our allocated share of these fees as equity in earnings of joint ventures.

Under these arrangements, if one partner is financially unable to complete its share of the contract, the other partners will be required to complete those activities. We generally only enter into joint venture arrangements with partners who are reputable, financially sound and who carry appropriate levels of surety bonds for the project to adequately assure completion of their assignment.

Income Taxes

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

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

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

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

Goodwill

As disclosed in the consolidated financial statements, we recorded goodwill in the amount of $192.0 million at September 30, 2001. In connection with the adoption of SFAS No. 142, we performed a preliminary impairment test of goodwill as of October 1, 2001 which resulted in no impairment being identified. However, the process of evaluating goodwill for impairment involves the determination of the fair value of our reporting units. Inherent in such fair value determinations are certain judgments and estimates, including the interpretation of current economic indicators and market valuations, and assumptions about our strategic plans with regard to our operations. To the extent additional information arises or our strategies change, it is possible that our current conclusion regarding goodwill impairment could change and result in a material adverse effect on our financial position or results of operations.

Accrued Professional Liability Costs

We self-insure for professional liability claims up to the annual self-insured retention levels required under our insurance policy and for a deductible for each claim after exceeding the self-insured retention. We accrue for our portion of the estimated ultimate liability for incurred losses, both reported and unreported. We base our estimate of loss on consultation with outside counsel handling specific matters and on historic trends modified for recent events. It is reasonably possible that the estimate of loss by us may be revised based on the actual or revised estimate of liability of the reported and unreported claims.

Recently Issued Accounting Standards

Statements of Financial Accounting Standards No. 141—Business Combinations and No. 142—Goodwill and Other Intangible Assets (SFAS 142) were issued by the Financial Accounting Standards Board (FASB) in July 2001. SFAS No. 141 eliminates the pooling of interest method of accounting for business combinations after July 1, 2001. This statement also changes the criteria to recognize intangible assets apart from goodwill. SFAS No. 142 no longer permits amortization of goodwill (including goodwill existing prior to the date of adoption of SFAS 142) on intangible assets with indefinite lives. Instead, goodwill must be tested for impairment using a fair value approach in accordance with SFAS 142. We will apply the new rules on accounting for goodwill beginning in the first quarter of fiscal 2002. We are currently in the process of quantifying the impact of the new standards. However, we anticipate that virtually all amortization of goodwill as a charge to earnings will be eliminated.

Quantitative and Qualitative Disclosure About Market Risk

We are exposed to market risk, primarily related to foreign currency exchange rates and interest rate exposure of our debt obligations that bear interest based on floating rates. We actively monitor these exposures. To manage these exposures, we may enter into a variety of derivative financial instruments to reduce our exposure to market risk by creating offsetting exposures. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign exchange rates and interest rates. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage our exposures. We do not use derivative financial instruments for speculative purposes.

Foreign Exchange Rates

We are exposed to foreign currency exchange movements, primarily in the United Kingdom, Australia, and Hong Kong currencies. We limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result, we generally do not need to hedge foreign currency cash flows for contract work performed. The functional currency of all significant foreign operations is the local currency. At March 31, 2002, we had forward foreign currency exchange contracts for the Hong Kong dollar to be used to manage the risk of future earnings expected to be generated by our Hong Kong operations that will be used to repay U.S. dollar denominated debt. The aggregate notional amounts of these contracts at March 31, 2002 and September 30, 2001 were $27.8 million and $30.8 million, respectively, for sale of foreign currencies. At September 30, 2000, we had $40.8 million notional amounts of forward foreign currency exchange contracts for the Hong Kong dollar to be used to fund the repayment of debt. Our forward exchange contracts have been recorded at fair market value in the balance sheet and changes in the value of the contracts are adjusted through income. At September 30, 2001 and 2000, the fair value of the forward exchange contracts resulted in a net obligation of $185,000 and $360,000, respectively. The obligation is included in accrued expenses in the consolidated balance sheet and the change in fair value is reflected in income. For the years ended September 30, 2001 and 2000, we recorded a gain of $118,000, net of taxes and a loss of $287,000, net of taxes, respectively. There can be no assurance that our results will not be affected by foreign currency rate changes in the future.

Interest Rates

Our revolving credit facility and certain other debt obligations are subject to variable rate interest which could be adversely affected by an increase in interest rates. As of September 30, 2001, we had borrowings of $72.5 million under our credit facility. Interest on amounts borrowed under the credit facility is subject to adjustment based on certain levels of financial performance. For IBOR borrowings, the applicable margin added to IBOR can range from 1.00% to 1.75%.

We will repay a portion of our existing indebtedness with the proceeds from the IPO. We invest our cash in money market securities, which are subject to minimal credit and market risk.

BUSINESS

Overview

Ÿ Transit, Rail and Maritime		Ÿ Aviation
Ÿ Highways and Bridges		Ÿ Government Facilities
Ÿ Water and Wastewater		Ÿ Technical and Industrial Facilities
Ÿ Environmental Management		Ÿ Commercial Facilities

Our Market Opportunity

Technical professional services represents one segment of the professional services industry. This segment includes specialized engineering, consulting, design, program and construction management and outsourcing for business and government. These services are provided on infrastructure, environmental, industrial, government and commercial projects. Several thousand firms worldwide compete in this fragmented industry. According to Engineering News Record, the largest 100 global design firms generated over $41.3 billion of global revenues in 2000 and the largest 500 U.S. design firms grew at a compounded annual growth rate of 9.8% between 1998 and 2001. Design firms are a subset of technical professional services. Our design-related revenues accounted for more than 80% of our revenues in the last fiscal year.

Businesses and governments increasingly require technical professional services that span across industries, service lines and geographies, and those firms able to provide both project-specific unbundled services and integrated solutions are best positioned to meet these needs. As such, global scale combined with a full breadth of technical capabilities provide a significant advantage in developing and delivering solutions to meet the most complex challenges. In addition, because much of the technical professional services industry is dependent on the strength of long-term relationships, proximity to businesses and governments at a local level is instrumental to understanding the challenges faced by these entities, gaining their confidence and ultimately delivering comprehensive services. The technical professional services that we provide may be divided into the three principal categories of infrastructure, environmental and facilities services.

Infrastructure Services

Infrastructure development is a growing priority for both developed and developing countries, as continued population and economic growth place significant strains on the existing infrastructure, which includes transit, rail and maritime facilities and highways and bridges.

Transit, Rail and Maritime. Governments around the world continue to make significant investments in new and upgraded transit, rail and maritime facilities. Virtually every major city in the world has a significant expansion or renovation program underway. For example, the United Kingdom’s ten-year plan for the country’s rail network calls for $90 billion in spending to upgrade main inter-city rail links, improve junctions, and develop major new city center rail links. In Hong Kong, the administration has six new railway lines slated under its latest railway development strategy as part of its 15 year, approximately $25.6 billion investment plan. We have completed or currently have contracts under each of these government programs.

Highways and Bridges. The highways and bridges market has been fueled by major public spending projects such as the Transportation Equity Act for the 21st Century (TEA-21) in the United States, which is a five-year, $218 billion federal initiative to upgrade transportation infrastructure through 2003, the United Kingdom’s ten-year, approximately $35 billion plan, and the Hong Kong Highway Department’s major works program that is part of a nine-year, approximately $51.3 billion plan for capital works investment. We have completed or currently have contracts under each of these government programs.

Environmental Services

Public and private organizations’ heightened concern for environmental issues, including in particular those caused by continued agricultural, residential, industrial and commercial development, has led to a sustained increase in environmental programs. These programs encompass water supply and treatment, wastewater treatment and disposal, stormwater runoff management, solid waste management, hazardous waste treatment, brownfield reclamation and sustainable land use development, and resource management and ecology.

Water and Wastewater. Water quality and supply and wastewater management dominate the growth in environmental programs. Insufficient drinking water supplies, concern over the cost, quality and availability of water and the need in many parts of the world to replace aging and develop new infrastructure are critical social and economic concerns. According to the United States Environmental Protection Agency (USEPA), contamination of groundwater and surface water is one of the most serious environmental problems facing the United States. The USEPA expects that $325 billion will be needed for water and wastewater infrastructure upgrades over the next 20 years. In addition, the World Bank and the Organization for Economic Co-operation and Development (OECD) have identified water quality as one of the most serious issues currently facing developing countries. The World Bank estimates that global investments in water infrastructure will exceed $600 billion over the next decade.

Environmental Management. Around the world, increased environmental legislation is a significant trend. More than 1,200 sites in the United States remain to be addressed on the Superfund National Priority List and an additional 3,000 sites still need to be assessed for possible inclusion. The USEPA reports many cases of contaminated sediments from industrial discharges polluting major rivers across the country and there are incentives to convert former industrial sites to productive new uses. Outside the United States, active growth

areas include environmental approvals, corporate auditing and reporting, transport infrastructure environmental reviews, urban waste management, contaminated land assessment and the preparation and implementation of environmental management plans.

Facilities Services

Facilities services include institutional, industrial and commercial facilities. This sector may be categorized into four segments: aviation, government facilities, technical and industrial facilities and commercial facilities.

Aviation. The $50 billion AIR-21 legislation in the United States has resulted in large airport improvement programs funded by increased passenger facility charges. While the events of September 11, 2001 have dampened demand for airport facility expansion, we believe that the longer term need to increase aviation infrastructure still exists. In addition, the United States Aviation and Transportation Security Act authorizes up to $1.5 billion in 2002 and 2003 to increase security at airports, including redesigning of facilities. Government spending has fueled major airport maintenance and expansion programs in order to meet present and future travel needs.

Government Facilities. In the public sector, technological advancement and shifts in governmental priorities are the principal drivers of demand. Some examples include: a renewed focus on security systems; replacement and renovation of older buildings; new research and testing facilities for the U.S. Department of Energy; new support and training facilities for the U.S. Department of Defense; construction of courthouses and drug treatment facilities; and expansion and renovation of education facilities.

Outside the United States, there is strong demand in Hong Kong for public housing, including new towns, and in the United Kingdom, there is strong demand for expanded and modernized health and school facilities.

Technical and Industrial Facilities. This sector includes facilities for such markets as manufacturing and distribution, financial, newspapers and publishing, information technology and communications, food and beverage, research and development, and aerospace. These facilities are technically driven with significant mechanical and electrical engineering requirements. Consequently, the clients in this sector often need front-end consulting to help them in developing solutions to these needs. Integrated project delivery is important in this sector due to client demands for single source responsibility and speed to market, as well as the trend towards outsourcing of facilities management functions. Both commercial and technical and industrial facilities are more sensitive to economic cycles than government facilities. Outside the United States, the outlook for the natural resources mining sector, particularly in Australia and Asia, has improved.

Commercial Facilities. This sector includes office buildings and office campuses and leisure and entertainment venues, such as hotels and theme parks. There is an increased demand for energy-efficient and environmentally sensitive building systems as well as design solutions to optimize employee satisfaction and productivity. This sector requires such skills as architecture, interior and workplace design, information technology and structural, mechanical and electrical engineering.

Our Competitive Strengths

We have the experience, personnel and infrastructure to lead our clients through their most complicated and critical technical undertakings. We create value by leveraging our worldwide network of industry knowledge and technical expertise across global geopolitical bases to provide superior technical professional advice and services. We believe that our approach, as outlined below, distinguishes us from our competitors.

We combine global geopolitical reach with technical expertise

We have a global network of 14,600 employees in ten operating units with projects in more than 60 countries. This allows us to deliver technical professional services solutions to the most complex challenges.

Also, our clients benefit from a firm that possesses intimate local knowledge and expertise yet is supported by the size, presence and leverage of one of the world’s largest professional service companies. Nevertheless, each of our operating units has retained its individual niche service line- or industry-specialization, brand name, local reputation and client relationships. We operate through a number of wholly owned subsidiaries and use the following primary brand names:

AECOM		FaberMaunsell
Consoer Townsend Envirodyne Engineers		Maunsell
DMJM Aviation		McClier Corporation
DMJM+HARRIS		Metcalf & Eddy
DMJMH ⁺ N		Turner Collie & Braden

We are diversified across service lines, industry sectors and geographies

We believe that we are among the leaders in offering a broad array of technical professional services to our clients, with depth of industry and service line experience and expertise in many engineering segments. We are able to deploy our professionals across the world to work on a particular assignment. This diversification enables us to take advantage of changing business, technological and economic conditions worldwide, and allows us to better manage through market cycles.

We have long-standing relationships with a number of large corporations and government entities

During our nearly 100 years of experience, we have developed long-term relationships with a number of large corporations and government entities worldwide. We have gained experience from successfully completing thousands of projects that allow us to apply proven solutions to client problems. Our commitment to client satisfaction serves to strengthen and extend our relationships. More than two-thirds of our top 100 clients in fiscal 2001, ranked by revenues, have been our clients for at least five years. Leveraging these relationships for repeat business opportunities and expanding the scope of value-added services provides other significant growth potential.

We have successfully identified, executed and assimilated acquisitions of other companies

Since the beginning of fiscal 1996, we have acquired 16 firms. Each firm has performed in line with, or exceeded, expectations and is performing above pre-acquisition operating levels. We measure the success of our acquisitions in several ways, including: (a) retaining key members of the acquiree’s management team, and, where appropriate, broadening their roles and responsibilities within our company; (b) the acquiree’s meeting or exceeding its pro forma financial plan; and (c) the acquiree’s assisting our other operating companies, and/or benefiting from them, in new business development. As part of our long-term strategic planning process, these firms were chosen specifically to add complementary service lines or industry expertise or to broaden our geographic reach. The performance of our acquisitions reflects our disciplined strategy, which aims to ensure that acquisition targets offer compelling fit and synergy opportunities.

We possess talented, experienced and motivated employees

We have a highly talented, dedicated and experienced work force, strategically located across the globe, led by a proven, motivated executive management team. Our executive officers have an average of 22 years of experience with us, and 33 years in our industry. As one of the largest employee-owned companies in our industry, our philosophy has long been directed at providing employee incentives and benefits designed to optimize performance and to ensure our ability to attract and retain a quality work force.

Our Strategy

Our strategy is to maintain our leadership position in each industry sector, service line and geographic area in which we operate, using the following key elements:

Continue diversification in industry sectors, service lines and geographic regions, primarily through acquisitions

We will continue to seek out and acquire companies that have technical niche and regional leadership positions that will complement or expand our current expertise and geographic presence. We will expand the roles of the acquired companies and their management, while capitalizing on their brand names in their niches. Our acquisition approach enables our operating companies to continue to focus on their core businesses while we overlay strategic initiatives to cross-sell and share complementary talents.

The acquisition of Oscar Faber in October 2001 exemplifies our strategy in several ways. Oscar Faber’s primary geographic markets are in the U.K. and Asia, which are areas targeted by us for strategic growth. Its management team has assumed broader responsibilities for management of our U.K. operations. We continue to benefit from the strength of the Faber brand name and the acquisition strengthened us in our three main technical service lines: facilities, infrastructure and environment, which will enhance our ability to cross sell.

Increase cross-selling and technology transfer

Our strategic planning process emphasizes the cross-selling of our combined expertise and geographic presence among all our operating companies. This enables us to present ourselves to our clients as one of the world’s largest technical professional service companies when the project or client requires this capacity. For example, we recently brought together our expertise in transit and rail, geotechnical, tunneling and environmental services and combined that expertise with our long-standing presence in the New York area to be selected for the preliminary engineering design for the new Second Avenue Subway line in New York City.

Maintain and expand our long-standing client relationships

We have developed long-standing relationships with a number of government agencies worldwide as well as many large corporations. We will continue to focus on our commitment to client satisfaction to strengthen and expand these relationships. In some cases, these relationships span decades. For example, we have provided services for the District of Columbia Water & Sewer Authority since 1935, the Illinois State Toll Highway Authority since 1956 and the Hong Kong administration since 1973.

Retain and recruit highly experienced personnel

The most valuable asset of any professional services company is its personnel. We have a highly talented, dedicated and experienced work force. We will continue to provide our employees an opportunity for ownership and other incentives and benefits designed to optimize their performance and to enhance our ability to attract and retain personnel. We believe that these programs align the interests of our personnel with those of our clients and stockholders and foster the cross-selling and technology transfer described above.

Services

We offer our technical professional services individually or on an integrated basis for clients, including those described below.

Design, Engineering and Consulting

We provide consulting, planning, design and engineering services on a fee basis across all of our industry sectors. Our design and engineering services include civil, structural, geotechnical, mechanical, process and environmental engineering, as well as architectural and interior design. We also provide consulting and planning services and related specialty technical services to various industry sectors, including master planning, strategic planning, communications and security, policy development, urban planning, financial planning, intelligent traffic systems engineering and logistics planning.

In addition to the consulting, planning, design and engineering services listed above, which often span across industry sectors, we also provide niche specialty services within industry sectors. For example, in the transportation sector we provide ridership and revenue studies, demand modeling, tunneling and ventilation, fueling systems and traffic management centers. For the environmental sector, we provide regulatory compliance planning, environmental modeling, sanitary engineering, brownfield reclamation and sustainable land use development programs. For the facilities sector we provide rollout programs, supply web analysis, workplace strategies and operations rationalization.

Program Management and Construction Management

We provide program management and construction management on a fee basis across all of our industry sectors. These services may begin with a small consulting contract and develop into an overall management role of the project or a series of projects. Program and construction management contracts typically employ a staff of 10 to more than 100 persons and, in many cases, operate as outsourcing arrangements with our staff being located at the project site.

Some private clients for whom we have completed consulting and preliminary design services have agreed to have us provide them with a negotiated guaranteed maximum price for the design and build phase of the project. This type of construction management is conducted on a negotiated-fee basis and, though we are allowed to include contingencies and a fee for the services, we do assume the risk for the completion of the construction. In these cases, we subcontract all of the construction activities and add a contingency and fee prior to negotiating the guaranteed maximum. In the case of specialty public projects, we also do construction management at risk, as well as for a fee, but in these cases we will typically subcontract the construction phase to contractors.

While these integrated services are important skills to offer our clients, construction management at risk projects only represent approximately 15% of total net revenues for fiscal 2001.

Outsourcing

We offer outsourced technical staffing and logistical support services. We also provide support services at major facilities and complexes for the United States government, which we refer to as operations and maintenance services. Contracts for outsourcing, including operations and maintenance, are typically charged on a cost-plus basis, or a bid fee for negotiated services. Except for key management personnel, most of the operations and maintenance business personnel are employed for a period not in excess of the term of the contract on which they are working. Services provided by us include the operation and maintenance of housing, community facilities, life support systems, infrastructure, fire protection, security, utilities and vehicle maintenance. We also provide recruitment and placement of technical staff and services for cities that have outsourced all or a portion of their engineering or planning functions.

Industry Sectors

We group the industry sectors in which we operate into three segments: the Americas-Infrastructure Group, the Americas-Facilities Group and the Global Group. The strength and diversification of each of these three segments as well as the interfaces between them are key elements of our strategy. The overlap of skills between these segments and the industry sectors and geopolitical regions that comprise them also provides our individual operating companies with the understanding of how to best utilize all of our technical resources.

Other interfaces between the segments result from the fact that many large-scale infrastructure and facility projects include a number of different areas of expertise. As an example, an airport program may involve major buildings and infrastructure or some of our infrastructure operating companies may provide services for facility projects such as new town developments. Typically the program management, construction management and design of buildings are handled by the Americas-Facilities Group, while the engineering for runways, environmental facilities, roads and other forms of transportation infrastructure is handled by the Americas-

Infrastructure Group and the Global Group. Similarly, as our clients expect the best technical people for their projects, our senior staff and their support people become involved in projects in all three segments.

The following table sets forth the revenues attributable to each of our business segments for the periods indicated:

	Year Ended September 30,			Six Months Ended March 31,
	1999	2000	2001	2001	2002
	(in thousands)
Americas-Infrastructure Group	$412,082	$ 546,718	$ 683,373	$314,882	$350,724
Americas-Facilities Group	532,863	680,605	549,076	274,120	256,935
Global Group	32,919	151,333	277,475	127,319	197,846

Total ⁽¹⁾	$977,864	$1,378,656	$1,509,924	$716,321	$805,505

(1)	See reconciliation in Note Q to the Notes to our Consolidated Financial Statements and Note E to the Notes to our Interim Consolidated Financial Statements appearing elsewhere in this prospectus.

The following are the various industry sectors and geopolitical regions within our three business segments:

Americas-Infrastructure Group

Transit, Rail and Maritime. We offer consulting, planning, design, engineering, program and construction management and other services for light rail, heavy rail (including high speed, commuter and freight), multimodal transit projects and ports and harbors. In fiscal 2001, we provided services in connection with such major transit, rail and maritime programs as the:

Southern New Jersey Light Rail—for our client, New Jersey Transit, a 34-mile transit system in Burlington, Camden and Mercer Counties, New Jersey;

Alameda Corridor in Los Angeles—for our client, the Alameda Corridor Transportation Authority, a 20-mile express freight rail line that connects the ports of Los Angeles and Long Beach to the transcontinental rail network east of downtown Los Angeles;

Washington Metrorail and Metrobus System—for our client, Washington Metropolitan Area Transit Authority, on-call services for broad engineering support of the rail and bus transit system in Washington, DC;

Pier 400 in Los Angeles—for our client, the Port of Los Angeles, infrastructure access for a pier that, when completed, will be the largest exclusive container terminal in the world; and

Tren Urbano Rapid Transit System in Puerto Rico—for our client, the Department of Transportation of the Commonwealth of Puerto Rico, a double track, 14 station, 10.6-mile light rail line that will be the first rapid transit system in the Caribbean.

In addition, we were recently selected for the preliminary engineering design for the new Second Avenue Subway line in New York City.

Highways and Bridges. We offer consulting, planning, design, engineering, program and construction management and other services in connection with interstate, primary and secondary urban and rural highway systems and bridge projects. In fiscal 2001 we provided services in connection with such major highway and bridge programs as the:

Maricopa Country Arizona Regional Freeway System—for our client, the Arizona Department of Transportation, general consulting services for this 107-mile regional freeway system;

Texas Turnpike—for our client, the Texas Turnpike Authority, three sections of a new turnpike facility with electronic toll collection in Austin, Texas;

Williamsburg Bridge—for our client, the New York Department of Transportation, the renovation of the largest suspension bridge crossing New York’s East River;

Chicago Skyway—for our client, the Chicago Department of Transportation, consulting engineering, including system inspection and repair recommendations, for the 7.8-mile toll bridge connection between Interstate 94 and Interstate 90 at the Illinois-Indiana border; and

US Route 17—for our client, the New Jersey Department of Transportation, the renovation of a 15-mile section of Route 17 in Bergen County.

Water and Wastewater. We offer consulting, planning, design, engineering, program and construction management and other services for water and wastewater treatment and transmission facilities. During fiscal 2001, we provided services in connection with such major water/wastewater facilities as the:

Nashville Overflow Abatement Program—for our client, the Davidson County Metropolitan Department of Water/Sewage Services, including a new 160-million gallon-per-day wastewater treatment plant;

Massachusetts Water Resource Authority—for our client, the Massachusetts Water Resources Authority, the wastewater treatment facility at Deer Island as part of the Boston Harbor Cleanup program;

Croton Water Supply System in New York—for our client, the New York Department of Environmental Protection, a new water treatment facility in New York;

South Austin Texas Regional Wastewater Treatment Plant—for our client, the City of Austin, Texas, an expansion of the regional wastewater treatment facility; and

Blue Plains Advanced Wastewater Treatment Plant—for our client, the District of Columbia Water and Sewer Authority, a 370-million gallon-per-day advanced treatment facility.

Environmental Management. We offer planning and analysis, remediation design and management, development of waste handling practices, testing and monitoring and other environmental management services. During fiscal 2001, we provided services in connection with such major environmental management programs as the:

Environmental Protection Agency Response Action Contract—for our client, the U.S. Environmental Protection Agency, technical support for the remediation of Superfund sites throughout New England;

Reynolds Aluminum Remediation—for our client, Reynolds Metals Company, a dredging and remediation program for the St. Lawrence River, Massena, New York;

Griffis Air Force Base Soil Remediation—for our client, the U.S. Air Force, a site remediation program prior to converting a base in Rome, New York to civilian use;

Florida Dry Cleaner Site Remediation Program—for our client, the Florida Department of Environmental Protection, a state-wide program to analyze and remediate contaminated soils at dry cleaner sites; and

Fort Trumbull Peninsula Plan—for our client, New London Development Corporation, a brownfield redevelopment program to reclaim contaminated land on Fort Trumbull Peninsula in New London, Connecticut for future commercial use.

Americas-Facilities Group

Aviation. We offer consulting, planning, design, engineering, program and construction management and other services for aviation facilities. During fiscal 2001, we provided services in connection with such major aviation facilities as the:

American Airlines Terminal—for our client, American Airlines, a new 2.2 million square foot terminal at John F. Kennedy International Airport in New York;

United Airlines Cargo Facility—for our client, United Airlines, a 450,000 square foot advanced cargo handling facility at Chicago’s O’Hare International Airport;

Ronald Reagan Washington National Airport and Washington Dulles International Airport Expansion Program—for our client, Metropolitan Washington Airports, a 10-year renovation and modernization program;

Chicago O’Hare International Airport Expansion Program—for our client, the Chicago Department of Aviation, an expansion and modernization program; and

Salt Lake City International Airport Expansion Program—for our client, the Salt Lake City Department of Airports, an expansion and modernization program.

Government Facilities. We offer consulting, planning, design, engineering, program and construction management and other services for government facilities of all types. During fiscal 2001, we provided services in connection with such major government facilities as the:

U.S. Department of Defense Army Camp in Doha, Kuwait—for our client, the U.S. Army, operations and maintenance services for a facility serving more than 5,000 military personnel;

Detroit Public School System Renovation and Expansion Program—for our client, the Detroit Public School System, a facilities renovation and expansion program;

U.S. Department of Defense Pentagon Renovation—for our client, the Department of Defense, a 10-year renovation program;

FEMA Emergency Management Response Program—for our client, the Federal Emergency Management Agency, on-call services for disasters and emergencies; and

U.S. Government Classified Projects.

Technical and Industrial Facilities. We offer consulting, planning, design, engineering, program and construction management and other services on an independent or fully integrated basis for a variety of niche markets including manufacturing, distribution, aviation, aerospace, newspapers and printing, pharmaceuticals and research and development, food and beverage and information technology and communications facilities. This technical facility expertise has been cross sold into Global Group geographic markets. During fiscal 2001, we provided services in connection with such major technical and industrial facilities as the:

New York Post Production Plant—for our client, the New York Post (a subsidiary of The News Corporation), a 430,000 square foot newspaper printing and distribution facility in South Bronx, New York;

Sky Chefs Flight Kitchens—for our client, LSG Sky Chefs (a Lufthansa subsidiary), an upgrade and new construction program of Sky Chefs global network of flight kitchens;

Bank of America Trading Facilities—for our client, Bank of America, an 80,000 square foot trading facility in New York City;

Greater Philadelphia Newspaper Production Facility—for our client, the Journal Register Company, a 100,000 square foot newspaper printing and distribution facility in Philadelphia, Pennsylvania; and

Equinix Data Management Center—for our client, Equinix Inc., a 130,000 square foot data center in Chicago, Illinois.

Commercial Facilities. We offer consulting, planning, architectural and interior design, engineering, program and construction management and other services for a variety of commercial projects including corporate headquarters, high-rise office towers, building renovations, corporate campuses and large-scale master planned communities. During fiscal 2001, we provided services in connection with such major commercial facilities as the:

BMC Software, Inc.—for our client, BMC Software, Inc., a new office campus in Houston, Texas;

Cinco Ranch—for our client, Terrabrook, the master plan and implementation of a 5,300 acre master planned community in Houston, Texas;

RAND Corporation—for our client, RAND Corporation, a new headquarters complex in Santa Monica, California;

Charles Schwab & Co., Inc.—for our client, Charles Schwab & Co., Inc., a new office campus in Phoenix, Arizona; and

Hughes Center Commercial Complex—for our client, Lowe Enterprises, a 1.4 million square foot commercial facility in Los Angeles, California.

Global Group

Infrastructure. We offer consulting, planning, design, engineering, program and construction management and other services to clients predominantly in the transit, rail and maritime, highways and bridges, water and wastewater, and environmental management sectors. The Global Group has also developed specialized expertise in tunneling, geotechnical and long-span bridge engineering that has been cross-sold into certain large United States infrastructure projects. During fiscal 2001, we provided services in connection with such major global infrastructure programs as the:

Copenhagen Metro System—for our client, COMET (a joint venture servicing the Metro System of Copenhagen), a 21-kilometer light rail line;

Kuala Lumpur Elevated Highway—for our client, PERCON (a joint venture servicing the Government of Malaysia) design of a new 7.9-kilometer elevated highway in Kuala Lumpur, Malaysia;

Tsing Lung Bridge—for our client, Hong Kong Highways Department, the new Tsing Lung Bridge, which will be the third longest suspension bridge in the world with a main span of 1,418 meters;

Inner City Bypass—for our client, Leighton Contractors, a 4.5-kilometer urban arterial roadway in Brisbane, Australia; and

Nottingham Express Transit System—for our client, Carillion Infrastructure Projects, a new 14-kilometer tram system to serve the greater Nottingham, England area.

Facilities. We offer consulting, planning, design, interior design, building and structural engineering, program and construction management and other services, especially in the United Kingdom, Hong Kong, China and Singapore. During fiscal 2001, we provided services in connection with such major global facilities programs as the:

New Town Development Programs—for our client, Hong Kong Territory Development Department, infrastructure for the Shatin, Tai Po and Tseung Kwan O New Towns in Hong Kong with a projected combined population of 1.5 million;

Housing Development Programs—for our client, Hong Kong Housing Authority, a broad range of services for numerous public housing projects in Hong Kong;

BBC Broadcasting House—for our client, British Broadcasting Corporation, an 800,000 square foot broadcasting and office complex in London;

Paddington Central Commercial Development—for our client, Development Securities, a 700,000 square foot mixed-use commercial development in London; and

Oxford Chemistry Research Building—for our client, University of Oxford, a 200,000 square foot advanced chemistry research laboratory.

The last three projects listed above were performed by Oscar Faber plc, which merged with us on October 11, 2001.

Clients

Our clients consist primarily of the United States and other national governments, state and local governments and agencies and large corporations. The following table sets forth our total revenues attributable to these categories of clients for each of the periods indicated:

	Year Ended September 30,									Six Months Ended March 31,
	1999	%		2000 ⁽¹⁾	%		2001	%		2001	%		2002	%
	(dollars in thousands)
U.S. Government	$212,819	22	%	$ 261,761	19	%	$ 188,084	12	%	$ 89,459	13	%	$ 91,271	11	%
Private entities	359,264	37		479,500	35		581,066	38		244,646	34		269,362	34
State and local governments and agencies	371,080	38		505,264	37		596,862	40		359,916	50		404,414	50
Non-U.S. governments	34,701	3		132,131	9		143,912	10		22,300	3		40,458	5

Total ⁽²⁾	$977,864	100	%	$1,378,656	100	%	$1,509,924	100	%	$716,321	100	%	$805,505	100	%

(1)	Includes services and projects performed by our Maunsell and Metcalf & Eddy, Inc. operating companies for approximately the last five months of fiscal 2000.

(2)	For a reconciliation to the consolidated totals, see Note Q to the Notes to our Consolidated Financial Statements and Note E to the Notes to our Interim Consolidated Financial Statements appearing elsewhere in this prospectus.

Other than the United States Government, no single client accounted for 10% or more of our revenues in any of the past five fiscal years. For fiscal 2001, our top 25 projects accounted for only 21% of our total revenues.

Contracts

The price provisions of the contracts we undertake can be grouped into two broad categories: cost-plus and fixed-price. The majority of our contracts are of the cost-plus type.

Cost-plus contracts, which is the predominant contracting method in the Americas, provide for reimbursement of costs and overhead incurred by us plus a predetermined fee. Under some cost-plus contracts, our fee may be based on quality, schedule and other performance factors.

Fixed-price contracts, which is the most common contracting method outside the Americas, are of two types. The first involves performing an estimated number of units of work at an agreed price per unit, with the total payment under the contract determined by the actual number of units performed. The second involves performing all of the work under the contract for a specified lump-sum. Lump-sum contracts are ordinarily subject to price adjustments if the scope of the project changes.

Many of our lump-sum contracts are negotiated and arise in the design of projects with a specific, known scope, similar to construction management at risk. Under construction management at risk for private clients, we are responsible for the design of the facility, and then the contract price is negotiated after we have secured specific bids from various subcontractors and added a contingency and fee. Under certain fixed-price contracts for public sector clients, we may act as the general contractor on the project, but subcontract on a fixed-price basis the construction to other contractors. Some of our contracts require us to provide performance bonds to assure our clients that their project will be completed. We have mitigated the risks of lump-sum contracts by

contracting to complete the projects based on our design as opposed to a third party’s design, by not self-performing the construction, by not guaranteeing new or untested processes or technologies and by working only with experienced contractors with whom we have a significant history and who predominantly are bonded. When a public agency seeks a design and construct approach for major infrastructure projects, we typically act as the fixed-price design subcontractor to the general construction contractor and do not assume overall project or construction risk.

Some of our larger contracts operate under joint ventures or other arrangements under which we team with major companies with whom we have worked for many years. This is often done when we want to strengthen either our geopolitical position or our technical skills.

Some of our contracts relate to projects that have elements that are classified for national security reasons. Although most of our contracts are not themselves classified, persons with high security clearances are often required to perform portions of the contracts. We believe that our employment of personnel with high security clearances is helpful in obtaining such contracts.

Doing business with governments, including the United States government, is complex and requires the ability to comply with intricate regulations and satisfy periodic audits. We believe that the ability to understand these requirements and to successfully conduct business with government agencies is a barrier to entry for smaller, less sophisticated competitors.

Backlog

Our total backlog as of March 31, 2002 was $1,850.4 million, of which we expect $1,017.9 million to be completed within the next twelve months. Our total backlog as of September 30, 2001 was $1,579.2 million, of which we expect $1,034.1 million to be completed within the next twelve months. Our total backlog as of September 30, 2000 and 1999 was $1,573.7 million and $762.2 million, respectively.

In the case of non-government customers, backlog includes future revenue at contract rates plus estimates for pass through costs, in respect of executed contracts, excluding contract renewals or extensions that are at the discretion of the client. In the case of contracts with government clients, backlog includes the extent of the funding authorization received. Contracts with a not-to-exceed maximum amount are included to the extent of the remaining estimated amount. Backlog is calculated without regard to possible project reductions or expansions or potential cancellations until such changes or cancellations occur.

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

Marketing

We coordinate and supplement, when appropriate, the marketing strategies of our operating companies. This includes our cross-selling initiatives. However, each of our major operating companies has the primary responsibility for client development within its technical specialties and geographic region. In marketing their services, our operating companies emphasize their long operating histories, their willingness to undertake creative and demanding assignments, and prior professional achievement. We believe that client satisfaction as well as professional excellence and technical achievement are important factors in our business.

Insurance and Risk Management

We maintain insurance covering professional liability, as well as for claims involving bodily injury and property damage. We have historically enjoyed a favorable loss ratio in all lines of insurance and management considers our present limits of liability, deductibles, and reserves to be adequate. Wherever possible, we endeavor to reduce or eliminate risk through the use of quality assurance/control, risk management, workplace safety and similar methods to eliminate or reduce the risk of losses on a project. Furthermore, some of our operating subsidiaries are quality certified under ISO 9000 or an equivalent standard. ISO 9000 refers to international quality standards developed by the International Organization for Standardization (ISO). ISO is a worldwide, non-governmental organization formed in 1947.

Risk management is an integral part of our project bidding and execution process. Included in the risk management process are bidding and contract review controls, capability assessments, and quality assurance and control programs, including formal professional standards and peer review programs.

The terrorist attacks that occurred on September 11, 2001 have had a material adverse effect on the insurance industry as a whole. Consequently, along with our competition, we have experienced, and expect to continue to experience, a significant increase in our insurance premiums.

Personnel

Our principal asset is our employees. At March 31, 2002, we had approximately 14,600 personnel, of whom approximately 10,100 were full time employees, approximately 800 were part-time employees and independent contractors, and approximately 3,700 were contract employees hired for specific projects. This does not include employees hired by partially owned subsidiaries. A large percentage of our employees have technical and professional backgrounds and the majority of them have bachelor and advanced degrees. We believe that we attract and retain talented employees by offering them the opportunity to work on highly visible and technically challenging projects in a stable work environment.

Employees by Segment

	As of September 30,			As of March 31, 2002
	1999	2000	2001	As of March 31, 2002
Americas—Infrastructure Group	3,300	4,300	4,400	4,500
Americas—Facilities Group	3,600	4,000	4,300	4,400
Global Group	300	3,800	4,000	5,700

Total	7,200	12,100	12,700	14,600

Employees by Geographic Region

	As of September 30,			As of March 31, 2002
	1999	2000	2001	As of March 31, 2002
United States	5,300	6,000	6,400	6,500
Europe/Middle East	600	3,200	3,200	4,700
Asia/Pacific	1,300	2,900	3,100	3,400

Total	7,200	12,100	12,700	14,600

A portion of our work requires United States Government security clearances. We currently employ a number of persons with either “Top Secret” or “Q” security clearances.

We believe that our employee relations are good.

Properties

Our corporate executive offices are located in approximately 15,000 square feet of space at 555 South Flower Street, Suite 3700, Los Angeles, California. Our other major offices consist of an aggregate of approximately 2.2 million square feet worldwide. We also maintain smaller administrative or project offices. Most of our offices are leased. See Note J of Notes to our Consolidated Financial Statements included at the end of this prospectus for information regarding our lease obligations. We believe our current properties are adequate for our business operations and are not currently underutilized. Additional facilities may be added from time to time in the future as the need arises.

Legal Proceedings

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

We have strict policies requiring our employees to comply with all applicable legal standards relating to contract procurement and administration. We have Government Contract Compliance Officers who are responsible for assuring that we have adequate policies and procedures and monitor compliance with these procedures.

We are a defendant in lawsuits involving alleged professional liability, personal injury, contract and other disputes arising in the normal course of our business. To some extent, these matters are covered by insurance and in other cases we are self insured. We believe that none of this litigation will result in a material adverse effect on our consolidated financial condition or results of operation.

MANAGEMENT

Executive Officers and Directors

Our directors and executive officers are set forth below.

Name	Age ⁽¹⁾	Position
Richard G. Newman	67	Chairman of the Board and Chief Executive Officer
Francis S. Y. Bong	60	Chairman of Asia and Australia; Director
Raymond W. Holdsworth	59	President and Chief Executive for Americas Group
Joseph A. Incaudo	61	Vice Chairman
Grant G. McCullagh	51	Executive Vice President
David N. Odgers	59	Chief Executive for Global Group
Glenn Robson	40	Senior Vice President and Chief Financial Officer
H. Frederick Christie	68	Director
John W. Downer	66	Director
S. Malcolm Gillis	61	Director
Robert J. Lowe	62	Director
Joan A. Payden	70	Director
William P. Rutledge	60	Director

(1)	As of April 30, 2002.

Richard G. Newman has been a director and Chief Executive Officer of AECOM since May 1991. He served as a director of Ashland Technology Corporation, which became AECOM in April 1990, from February 1989, and was appointed President in December 1988. Mr. Newman relinquished the office of President as of March 1, 2000 but retained the position of Chairman and Chief Executive Officer. Previously, he was President and Chief Operating Officer of DMJM from October 1985 to December 1988 and a Corporate Vice President or Vice President of DMJM from 1977 to October 1985. Mr. Newman is also a director of Southwest Water Company and 13 mutual funds under Capital Research and Management Company.

Francis S. Y. Bong was named to the Board of Directors of AECOM with the merger of AECOM and Guy Maunsell International Limited effective as of May 4, 2000. He serves as Chairman for our operations throughout Asia and Australia. Prior to the merger, Mr. Bong was Chairman and Chief Executive of Maunsell Consultants Asia Holding Ltd. from 1997 to 2000 and he served as Managing Director of the same firm from 1987 to 1996. Mr. Bong started with Maunsell in 1975.

Raymond W. Holdsworth was named President of AECOM as of March 1, 2000 and, since April 2001, has served as Chief Executive for our Americas Group. Prior to March 2000, Mr. Holdsworth held the position of Chairman and Chief Executive Officer of DMJM, which he had held since January 1999, when he relinquished the position of President after serving in that capacity since April 1993. Prior to his DMJM role, he served as Vice President of AECOM beginning in June 1992.

Joseph A. Incaudo was named Vice Chairman of AECOM in May 2002. Prior to his appointment as Vice Chairman, Mr. Incaudo served as our Executive Vice President and Chief Financial Officer since December 1988. He also served as our Chief Administrative Officer from December 1995 to March 2000. From January 1986 to December 1988, Mr. Incaudo was Administrative Vice President, Chief Financial Officer and Treasurer of AECOM. Mr. Incaudo served as Administrative Vice President, Treasurer and Chief Financial Officer of Ashland Professional and Technical Services Group from October 1985 to January 1986 and has served as Treasurer of DMJM since March 1983. Mr. Incaudo is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

Grant G. McCullagh was named Executive Vice President of AECOM as of March 1, 2000, responsible for Corporate Operations, Corporate Development and Strategic Planning. He also provides corporate leadership

relating to the cross-selling of the Americas-Facilities Group business and our construction management and integrated services. Prior to March 2000, Mr. McCullagh was responsible for our Americas-Facilities Group from June 1999 until March 2000. Mr. McCullagh has been President and Chief Executive Officer of The McClier Corporation since 1988, when the company was founded, until he relinquished this role in April 2001. In December 1998, Mr. McCullagh relinquished the position of President of McClier but retained the positions of Chairman and Chief Executive Officer. He was named Chairman, President and Chief Executive Officer of Holmes & Narver, Inc. effective October 1, 1997. In June 1999, he relinquished the position of President but retained the positions of Chairman and Chief Executive Officer until March 2000.

David N. Odgers is Chief Executive of our Global Group, headquartered in London. Prior to the merger of AECOM and Maunsell, he served as Chief Executive of Maunsell since 1998. Before that, Mr. Odgers served as Chief Executive of Maunsell Pty Ltd, Australia, from 1989 to 1998. He has served in a variety of increasingly responsible positions with various organizations in the Maunsell Group since he started with that firm in 1965.

Glenn Robson joined AECOM in May 2002 as Senior Vice President and Chief Financial Officer. Prior to joining us, Mr. Robson worked at Morgan Stanley & Co. Incorporated for twelve years, serving most recently as a Managing Director in the Investment Banking Division. Mr. Robson started his career as a business consultant for the consulting firm of McKinsey & Company.

H. Frederick Christie was named to the Board of Directors of AECOM effective as of August 1, 1990. From 1987 until his retirement in 1989, Mr. Christie served as President and Chief Executive Officer of The Mission Group, where he was responsible for all of the non-utility subsidiaries of SCEcorp., the parent company of Southern California Edison Company. Mr. Christie served as President and a Director of Southern California Edison Company from November 1984 until September 1987, after having previously served as Executive Vice President and Treasurer. He is also a director of 19 mutual funds under Capital Research and Management Company, Valero LLP, IHOP Corp., Southwest Water Company and Ducommun Incorporated.

John W. Downer was named to the Board of Directors of AECOM effective as of May 4, 2000. He serves as a special consultant to AECOM with a focus on our global operations. Mr. Downer served as Group Chief Executive of Maunsell and its predecessor firms from 1989 to 1998, at which time he was appointed Chairman. Mr. Downer has held increasingly responsible officerships with the Maunsell Group since he started with that firm in 1963 and was Managing Director in Asia from 1969 to 1998, during which time Maunsell grew to become the largest consulting engineering firm in Asia.

S. Malcolm Gillis was named to the Board of Directors of AECOM effective as of January 20, 1998. Dr. Gillis has been President of Rice University since July 1993. Before assuming the presidency of Rice, Dr. Gillis served at Duke University from 1984 to 1993, where he served as Dean of the Faculty of Arts and Sciences from 1991 to 1993, and Harvard University, where he did extensive teaching and consulting in the area of international economics from 1969 to 1984, with particular emphasis on Latin America and Asia, working with heads of state on economic policy issues. Dr. Gillis serves as a Director of the Federal Reserve Bank of Dallas. Dr. Gillis also serves on the Boards of various educational and charitable organizations and government commissions and committees.

Robert J. Lowe was named to the Board of Directors of AECOM effective as of February 18, 1993. Mr. Lowe is Chairman and Chief Executive Officer of Lowe Enterprises, Inc. and its affiliated companies. He was the principal founding shareholder in 1972 of the corporation that became Lowe Enterprises, Inc. Mr. Lowe also serves on the board of Claremont McKenna College and on the boards of various charitable organizations and government commissions and committees.

Joan A. Payden was named to the Board of Directors of AECOM effective as of February 18, 1997. Ms. Payden is President and Chief Executive Officer of Payden & Rygel, an investment advisory firm that focuses on the management of global institutional assets for its clients. Ms. Payden founded the company in 1983 and she is currently the majority shareholder. Ms. Payden also serves on the Board of Directors of the Automobile Club of Southern California.

William P. Rutledge was named to the Board of Directors of AECOM effective November 29, 1998. Mr. Rutledge currently serves as Chairman of Communications & Power Industries of Palo Alto, California. Mr. Rutledge was President and Chief Executive Officer of Allegheny Teledyne, Inc. from August 1996 until his retirement in 1997. Mr. Rutledge also serves on the Board of Directors of First Federal Bank in Santa Monica, California, Computer Sciences Corporation in El Segundo, California and Sempra Energy Corporation, San Diego, California, and on the Board of Trustees of Lafayette College, KCET Public Television, Saint John’s Health Center and the World Affairs Council of Los Angeles.

Composition of the Board of Directors

In accordance with the terms of our Restated Certificate of Incorporation, the terms of office of our board of directors are divided into three classes:

Class I directors, whose term will expire at the annual meeting of stockholders to be held in 2003;

Class II directors, whose term will expire at the annual meeting of stockholders to be held in 2004; and

Class III directors, whose term will expire at the annual meeting of stockholders to be held in 2005.

Our Class I directors are Richard G. Newman and Joan A. Payden, our Class II directors are John W. Downer, Robert J. Lowe and William P. Rutledge, and our Class III directors are Francis S. Y. Bong, H. Frederick Christie and S. Malcolm Gillis. At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Any vacancies in our classified board will be filled by the remaining directors and the elected person will serve the remainder of the term of the class to which he or she is appointed. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control or management of our company.

Committees of the Board of Directors

The audit committee of our board of directors consists of William P. Rutledge (Chairperson), H. Frederick Christie and S. Malcolm Gillis. The audit committee, which is composed solely of independent directors, makes recommendations to our board of directors regarding the selection of independent auditors, reviews the results and scope of the audit and other services provided by our independent auditors, and reviews and evaluates our audit and control functions.

The compensation committee of our board of directors consists of H. Frederick Christie (Chairperson), S. Malcolm Gillis, Joan A. Payden and William P. Rutledge. The compensation committee, comprised solely of outside directors, oversees our equity compensation plans and makes decisions concerning salaries and incentive compensation for our employees and consultants.

The nominating committee of our board of directors consists of S. Malcolm Gillis (Chairperson), H. Frederick Christie and Robert J. Lowe. The nominating committee makes recommendations to the board of directors regarding nominees to be proposed by the board of directors for election as directors and evaluates the size and composition of the board of directors. The nominating committee will consider written suggestions from stockholders regarding potential nominees for election.

The strategic planning committee of our board of directors consists of Robert J. Lowe (Chairperson), Francis S.Y. Bong, John W. Downer and Joan A. Payden. The strategic planning committee works with our management in developing our five-year strategic plan and our annual operating plan.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee of our board of directors is an officer or employee of our company. No executive officer of our company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our compensation committee.

Compensation of the Board of Directors

Those of our directors, who also serve as officers or consultants of AECOM or its subsidiaries, are not currently compensated by us for meeting attendance or performing any other function of the Board. Any director who is not an employee or consultant is paid a retainer of $24,000 per year ($30,000 in the case of the chairpersons of the compensation and audit committees and $26,400 in the case of the chairpersons of the strategic planning and nominating committees), plus $1,000 for the first board or committee meeting or function attended on any given day and $500 for each additional meeting attended on the same day. Our non-employee directors are entitled to defer some or all of their annual retainers and meeting fees to our Non-Qualified Stock Purchase Plan and receive common stock units.

Each non-employee director, at the time he or she is first elected to our board of directors, will receive options to purchase 5,000 shares of our common stock. Each non-employee director is entitled to receive additional options to purchase up to 2,500 shares of our common stock on the date of our annual meeting during the term of the Stock Incentive Plan for Non-Employee Directors. The exercise price for the options is the market value of our common stock on the date of grant and the options are exercisable six months after the grant date.

Our board has granted to Mr. Downer options to purchase 20,000 shares of our common stock at an exercise price equal to the initial public offering price. The options will vest six months after the closing of this offering and will expire seven years from the grant date. The options were granted under our 2000 Stock Incentive Plan.

Limitation of Directors’ Liability and Indemnification

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

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

Executive Compensation

Summary of Cash and Other Compensation

The following table describes the compensation we paid to our chief executive officer and our five other most highly compensated executive officers during the fiscal year ending September 30, 2001:

Summary Compensation Table

	Annual Compensation				Long-Term Compensation			All Other Compensation ^(3),(4)
Name and Principal Position	Salary ⁽¹⁾	Bonus ⁽¹⁾	Other Annual Compensation		Restricted Stock Awards	Securities Underlying Options	LTIP Payouts ⁽²⁾	All Other Compensation ^(3),(4)
Richard G. Newman	582,000	600,000	—		—	50,000	384,000	53,500
Chairman and Chief
Executive Officer



Francis S.Y. Bong	294,950	300,000	134,500	⁽⁶⁾	—	25,000	82,875	245,600
Director and Chairman of
Asia and Australia ⁽⁵⁾



Raymond W. Holdsworth	300,000	235,000	—		—	25,000	184,800	87,380
President and Chief
Executive for Americas
Group



Joseph A. Incaudo	291,250	225,000	—		—	25,000	168,000	83,609
Executive Vice President
and Chief Financial Officer



Grant G. McCullagh	283,720	225,000	—		—	25,000	143,500	99,158
Executive Vice President



David N. Odgers	217,075	265,000	110,000	⁽⁷⁾	—	25,000	82,875	114,583
Chief Executive for Global
Group ⁽⁵⁾

(1)	Amounts shown include payments to certain executives in the form of stock units. The amounts paid in stock units were $60,000, $117,500, $45,000 and $56,250 for Messrs. Newman, Holdsworth, Incaudo and McCullagh, respectively.

(2)

Represents amounts received under our Performance Unit Plan for the performance period from fiscal 1997 through fiscal 2000. In the case of Messrs. Odgers and Bong, the amount was pro-rated for 50% of the performance period. Some or all of these payments were made in the form of stock or stock units. The amounts paid in stock or stock units were $38,400, $92,400, $168,000 and $71,750, for Messrs. Newman, Holdsworth, Incaudo and McCullagh, respectively. Messrs. Bong and Odgers received all of their payments in cash.

(3)

Amounts shown in this column include employer matching contributions under the our Global Stock Plan. Allocations of stock under our stock plan generally are provided on the same basis for all employees. Payments are made in the form of our common stock in the Retirement and Savings Plan, common stock units in the Non-Qualified Stock Purchase Plan or certificated shares for executives residing outside of the United States. The amounts paid as common stock were $4,072 for each of Messrs. Newman, Holdsworth and Incaudo and $4,709 for Mr. McCullagh. The amounts paid as stock units were $49,428, $83,308, $79,537 and $94,449, respectively, for Messrs. Newman, Holdsworth, Incaudo and McCullagh, and the amounts paid as certificated shares were $245,600 to Mr. Bong.

(4)	This column also includes a stock match under the Senior Executive Equity Investment Plan of certificated shares valued at $114,583 for Mr. Odgers. We will terminate the Senior Executive Equity Investment Plan at September 30, 2002. See “Certain Relationships and Related Transactions.”

(5)	Compensation of Messrs. Bong and Odgers has been converted from Hong Kong dollars and British pounds, respectively, based on exchange rates at September 30, 2001.

(6)	Includes housing allowance of $74,000, perquisites and other personal benefits, including club memberships and an automobile allowance.

(7)	Includes housing allowance of $95,000, perquisites and other personal benefits.

Options

The table below sets forth the options granted to named executive officers during fiscal 2001. Each option represents the right to purchase one share of our common stock. Each option vests in annual installments of 10% per year after each of the first four years and 60% after the fifth year from the grant date. No restricted stock awards were granted to named executive officers in fiscal 2001.

The potential realizable values are based on an assumption that the stock price of our common stock will appreciate at the annual rate shown (compounded annually) from the date of grant until the end of the option term. These values do not take into account amounts required to be paid as income taxes under the Internal Revenue Code and any applicable state laws or option provisions providing for termination of an option following termination of employment, non-transferability or vesting. These amounts are calculated based on the requirements promulgated by the Securities and Exchange Commission and do not reflect our estimate of future stock price growth of the shares of our common stock.

Option Grants in Last Fiscal Year

	Individual Grants
	Number of Securities Underlying Options Granted	% of Total Options Granted to Employees in Fiscal 2001		Exercise Price Per Share	Expiration Date	Potential Realizable Value at Assumed Annual Rate of Stock Price Appreciation for Option Term
Name	Number of Securities Underlying Options Granted	% of Total Options Granted to Employees in Fiscal 2001		Exercise Price Per Share	Expiration Date	5%	10%
Richard G. Newman	50,000	9.3	%	$13.68	11/15/2007	$278,457	$648,922
Francis S.Y. Bong	25,000	4.6		13.68	11/15/2007	139,228	324,461
Raymond W. Holdsworth	25,000	4.6		13.68	11/15/2007	139,228	324,461
Joseph A. Incaudo	25,000	4.6		13.68	11/15/2007	139,228	324,461
Grant G. McCullagh	25,000	4.6		13.68	11/15/2007	139,228	324,461
David N. Odgers	25,000	4.6		13.68	11/15/2007	139,228	324,461

In January 2002, our board approved the grant of options to purchase an aggregate of 600,000 shares of common stock at an exercise price equal to our initial public offering price. Of these options, Mr. Newman received options to purchase 50,000 shares of common stock and all other officers in the table above each received options to purchase 25,000 shares of common stock. In May 2002, our board approved the grant of options to purchase an aggregate of 110,000 shares of common stock at an exercise price equal to our initial public offering price, including options to purchase 20,000 shares granted to John W. Downer and options to purchase 50,000 shares granted to Glenn Robson.

The following table provides summary information of the options exercised and the number of shares of our common stock represented by outstanding stock options from grants from 1991 to 2000, and held by each of our named executive officers as of September 30, 2001. There was no public trading market for our common stock as of September 30, 2001. Accordingly, the dollar values in the table shown below are calculated based upon the appraised value of our common stock of $16.72 per share at September 30, 2001, less the exercise price of the options, and multiplying the result by the number of shares.

Aggregated Option Exercises In Last Fiscal Year and

Fiscal Year-End Option Values

Name	Shares Acquired on Exercise	Value Realized	Number of Securities Underlying Unexercised Options at September 30, 2001		Value of Unexercised In-the- Money Options at September 30, 2001
Name	Shares Acquired on Exercise	Value Realized	Exercisable	Unexercisable	Exercisable ($)	Unexercisable ($)
Richard G. Newman ⁽¹⁾	50,000	$619,000	311,000	154,000	$3,130,000	$843,600
Francis S.Y. Bong	—	—	—	25,000	—	76,000
Raymond W. Holdsworth	—	—	162,500	87,500	1,597,800	508,900
Joseph A. Incaudo ⁽¹⁾	30,000	$371,400	136,500	78,500	1,361,700	434,400
Grant G. McCullagh	—	—	59,000	81,000	473,900	460,000
David N. Odgers	—	—	4,000	61,000	15,800	218,600

(1)	We issued loans to Messrs. Newman and Incaudo for the exercise of their options through our Stock Option Loan Program and Stock Repurchase Program. Both officers repaid the loans in April 2001 through the sale of stock to us. See “Certain Relationships and Related Transactions.”

Long-term incentive awards

The following table provides summary information of the performance units granted to each of our named executive officers during the fiscal year ending September 30, 2000 for the performance periods of fiscal years ending September 30, 2001 through 2004.

Name	Number of shares, units or other rights ⁽¹⁾	Performance or other period until maturation or payout ⁽²⁾	Estimated future payouts under non- stock price-based plans
Name	Number of shares, units or other rights ⁽¹⁾		Threshold ⁽³⁾	Target ⁽³⁾	Maximum ⁽³⁾
Richard G. Newman	500,000	4 years	$250,000	$400,000	$500,000
Francis S.Y. Bong	390,000	4 years	195,000	312,000	390,000
Raymond W. Holdsworth	472,500	4 years	236,250	378,000	472,500
Joseph A. Incaudo	463,750	4 years	231,875	371,000	463,750
Grant G. McCullagh	463,750	4 years	231,875	371,000	463,750
David N. Odgers	390,000	4 years	195,000	312,000	390,000

(1)	Performance units are awarded based on the employee’s salary level.

(2)	Each award covers a four-year performance period.

(3)

Payouts of share awards are contingent upon achievement of the performance objectives referred to above. Payouts under the plan are converted to dollar values based on the percent performance achieved by each participant. The range of performance could be between 0% and 100%, however, the expected level of performance for each participant is designed to be 80%. At the threshold performance level, payout will equal 50% of the award. (Although a minimum award level of 0% is possible, it is unlikely that any participant would earn less than 50%.) At the target performance level, payout will equal 80% of the award. At the maximum performance level, payout will equal 100% of the award.

In the fiscal quarter of first 2002, we terminated our Performance Unit Plan and fully vested all participants at the projected level of each participant’s award based on estimated performance for calendar year 2002. The average award is estimated to be approximately 70% of maximum levels.

Employee Benefit Plans

1990 Stock Incentive Plan and 2000 Stock Incentive Plan

We previously adopted two Stock Incentive Plans for our employees and consultants: the 1990 Stock Incentive Plan, which was adopted in April 1990 and expired in April 2000, and the 2000 Stock Incentive Plan, which was adopted in February 2000 and is scheduled to expire in February 2010 (unless it is terminated earlier by the board of directors). While no additional awards may be granted under the 1990 Stock Incentive Plan, a number of shares remain subject to outstanding awards that were granted before the 1990 Stock Incentive Plan expired. We are currently authorized to issue awards for up to 2,300,000 shares under the 2000 Stock Incentive Plan. The board of directors has approved an amendment to the 2000 Stock Incentive Plan, subject to stockholder

approval, principally to increase the amount of authorized shares under the 2000 Stock Incentive Plan by 1,500,000 shares to 3,800,000 shares. Persons eligible to receive awards under the Stock Incentive Plans include key employees and officers of AECOM and its subsidiaries from all jurisdictions.

Each Stock Incentive Plan provides for the discretionary grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, to employees and for the grant of nonqualified stock options, stock appreciation rights, restricted stock, and performance awards to employees and consultants.

Under each Stock Incentive Plan, the board of directors, or a board committee, has the power to determine the terms of the options or other awards granted, including the exercise price, at or above market price, of the options or other awards, the number of shares subject to each option or other award, the exercisability thereof and the form of consideration payable upon exercise. In addition, the board of directors has the authority to amend, suspend or terminate either Stock Incentive Plan, provided that no such action may affect any share of

common stock previously issued and sold or any award previously granted under the respective Stock Incentive Plan without the consent of the holder.

The exercise price of options granted under the Stock Incentive Plans must be no less than the fair market value of our common stock on the date of grant. The term of an option granted under the 1990 Stock Incentive Plan may not exceed ten years and the term of an option granted under the 2000 Stock Incentive Plan may not exceed seven years. The 1990 Stock Incentive Plan did not limit the number of shares of common stock that may be granted to any eligible individual. The 2000 Stock Incentive Plan has been amended to include limits on the number of shares that may be granted to any individual pursuant to options and performance awards in any calendar year. The Stock Incentive Plans are not exclusive. A person who holds an award under either Stock Incentive Plan may be granted additional awards under the 2000 Stock Incentive Plan or under any other employee benefit plans or by appropriate authorization of the board of directors.

Restricted or unrestricted stock may be delivered or sold to participants in the Stock Incentive Plans at various prices, subject to restrictions as may be determined by our board of directors. We may repurchase restricted stock if the conditions or restrictions are not met. In general, restricted shares may not be sold, or otherwise transferred or hypothecated, until restrictions are removed or expire. Purchasers of restricted stock, unlike recipients of options, typically will have voting rights and will receive dividends prior to the time when restrictions lapse. As of March 31, 2002, we have not issued any restricted stock under the Stock Incentive Plans.

Stock appreciation rights may be granted in connection with stock options. Stock appreciation rights typically provide for payments to the holder based upon increases in the price of our common stock over the exercise price of an option. We may pay stock appreciation rights with cash or shares of our common stock or a combination of the two. As of March 31, 2002, we have not granted any stock appreciation rights under the Stock Incentive Plans.

Under the 2000 Stock Incentive Plan, our board of directors may, subject to stockholder approval of the amendments, also grant performance awards that are intended to qualify as “performance based” compensation under Section 162(m) of the Internal Revenue Code. These awards include “phantom” stock, which provide for payments in cash or common stock based upon increases in the price of our common stock over a predetermined period. Performance awards also include cash and stock bonuses, which may be granted on an individual or group basis. The 1990 Stock Incentive Plan provided for grants of performance share awards, which are an award of shares that may be issued contingent upon the attainment of performance goals. As of March 31, 2002, we have not granted any performance awards under the Stock Incentive Plans.

The Stock Incentive Plans generally provide that upon the occurrence of certain events, including for example, a change of control of AECOM, the exercisability or vesting of any or all outstanding awards will accelerate and shares subject to performance share awards will be issued.

Stock Incentive Plan for Non-Employee Directors

On May 25, 1995, we adopted our Stock Incentive Plan for Non-Employee Directors. The Stock Incentive Plan for Non-Employee Directors authorizes the issuance of options with respect to up to 100,000 shares of our

common stock to directors who are not our employees or who do not own more than 5% of our outstanding voting securities. As of March 31, 2002, we had 79,000 options to purchase common stock outstanding under the Stock Incentive Plan for Non-Employee Directors with a weighted average exercise price of $9.33. The board of directors has approved an amended and restated Stock Incentive Plan for Non-Employee Directors, subject to stockholder approval, principally to increase the amount of shares under the plan by 150,000 shares to 250,000 shares of common stock.

Each non-employee director, at the time he or she is first elected to our board of directors, will receive options to purchase 5,000 shares of our common stock. Each non-employee director is entitled to receive additional options to purchase up to 2,500 shares of our common stock on the date of our annual meeting during the term of the Stock Incentive Plan for Non-Employee Directors. The exercise price for the options will be the market value of our common stock on the date of grant and the options will become exercisable on the six month anniversary of the grant date.

Shares subject to options that have expired will become available for grant again under the Stock Incentive Plan for Non-Employee Directors.

Employee Stock Purchase Plans

Our board has approved two employee stock purchase plans: the 2002 Employee Stock Purchase Plan and the Global Employee Stock Purchase Plan. The 2002 Employee Stock Purchase Plan, subject to stockholder approval, is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code and will grant awards to employees within the United States. The Global Employee Stock Purchase Plan will be similar to the 2002 Employee Stock Purchase Plan but will grant awards only to employees outside the United States.

We have asked our stockholders to approve the 2002 Employee Stock Purchase Plan. The 2002 Employee Stock Purchase Plan is in addition to, and does not take the place of, our Retirement & Savings Plan and Non-Qualified Stock Purchase Plan.

A total of 2,000,000 shares of common stock are reserved for issuance under the 2002 Employee Stock Purchase Plan and a total of 500,000 shares of common stock are reserved for issuance under the Global Stock Purchase Plan. Our compensation committee will administer both plans. Eligible employees may purchase shares of common stock through payroll deductions of up to 15% of the employee’s base pay. The purchase price for each share of common stock will generally be the lower of 85% of the fair market value of such share on the last trading day before the participation period commences or 85% of the fair market value of such share on the last trading day in the participation period. Employees may end their participation in the offering at any time during the offering period, and participation ends automatically upon termination of a participant’s employment with us. Participants may not purchase shares of common stock having a value, measured at the beginning of the offering period, greater than $25,000 in any calendar year or more than 3,000 shares in any offering period. Both plans are expected to be implemented on or about October 1, 2002.

Employee Investment Plans

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

In the U.S., the Retirement & Savings Plan is a tax-qualified 401(k) plan. During the year, highly compensated employees (generally speaking, employees who earn more than $90,000 in fiscal 2002) may be disqualified from participating in the Retirement & Savings Plan. Because of this restriction, we have established

the Non-Qualified Stock Purchase Plan to enable those highly compensated employees to defer compensation that they might otherwise have contributed to the Retirement & Savings Plan. No additional amounts may be deferred under the Non-Qualified Stock Purchase Plan after June 30, 2002. To replace the Non-Qualified Stock Purchase Plan, we have adopted a substantially similar plan, the 2002 Non-Qualified Stock Purchase Plan.

Performance Unit Plan

We established a Performance Unit Plan on December 19, 1990. The plan expired in December 2000 and our board of directors adopted a similar Performance Unit Plan in December 2000. Under the Performance Unit Plan, the board of directors may grant performance unit awards to executive officers and key employees of AECOM and our subsidiaries. The performance unit awards are a certain percentage of salary and receipt of the award is conditional upon the financial performance of AECOM (or for employees of a subsidiary, the financial performance of that subsidiary) over a four-year period. The award is paid in two annual installments, which can be no later than the first and second anniversary, respectively, of the last day of the four-year performance period. We may pay the awards in cash, common stock, common stock units or a combination thereof.

We have performance unit awards outstanding under the Performance Unit Plan, payable as follows:

For the performance period from October 1, 1998 to September 30, 2002, we have potential awards outstanding of $10,042,875, which must be paid in two installments on or before September 30, 2003 and September 30, 2004; and

For the performance period from October 1, 2000 to September 30, 2004, we have potential awards outstanding of $10,297,500, which must be paid in two installments on or before September 30, 2005 and September 30, 2006.

In the first quarter of fiscal 2002, we terminated our Performance Unit Plan and fully vested all participants at the projected level of each participant’s award based on estimated performance for calendar year 2002. The average award is estimated to be approximately 70% of maximum levels.

Pension Plans

In addition to the Global Stock Program described above, most of our employees participate in pension plans maintained by us and our overseas subsidiaries. In the United States, most of our employees participate in the AECOM Pension Plan, which was adopted on September 29, 1990. Depending on the participant’s years of service to AECOM, the pension benefits will range from 26% to 30.5% of the employee’s final average monthly compensation plus an additional 11% to 12.5% of the employee’s final average monthly compensation in excess of specified Social Security base amounts. These benefits will generally be reduced for participants with less than 25 years of service. Employee contributions of up to 1.5% of compensation were required prior to April 1, 1998.

On April 1, 1998, we amended our Investment Plan (now part of the Retirement & Savings Plan) to add what we refer to as a 401(k) pension component. This 401(k) pension component generally replaces the AECOM Pension Plan. New employees are not permitted to participate in the AECOM Pension Plan and, as described below, benefits under the 401(k) pension component reduce the AECOM Pension Plan benefits for existing AECOM Pension Plan participants. Employees are allowed to make pre-tax or after-tax contributions of .5%, 1% or 1.5% of their compensation to this 401(k) pension component. We will match dollar for dollar any such contributions and our matching contributions will vest after five years from the date of hire.

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

After April 1, 1998, employee contributions are no longer made to the AECOM Pension Plan. In addition, the benefits of each employee who participated in the AECOM Pension Plan or MSERP are reduced by the

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

On October 1, 1992 we established the unfunded Supplemental Executive Retirement Plan (“92 SERP”) and on July 1, 1996 we established the unfunded Supplemental Executive Retirement Plan (“96 SERP”) in order to provide some of our U.S. resident executive officers with pre-retirement death benefits and retirement benefits consistent with the level provided by the previous AECOM Pension Plan formula, without reduction for IRS limitations, less projected Retirement & Savings Plan benefits. The Supplemental Executive Retirement Plans require a participant to have reached the minimum age of 50 and to have worked at AECOM for at least five years. The plan also carries with it an early retirement provision at age 62 with full retirement benefits.

The 92 SERP is available to eligible executive officers who were participants in the AECOM Pension Plan as of May 1, 1990. Executive officers hired after May 1, 1990 and before July 1, 1998 are eligible to participate in the 96 SERP. The 92 SERP and 96 SERP provide executive officers with an enhanced retirement benefit equal to the difference between the benefit under the AECOM Pension Plan formula and the benefit that the participant would have received under the pension plan of one of our operating companies and AECOM Pension Plan, respectively, had the officer continued under the prior plan, reduced by the anticipated benefit of maximum participation in the Retirement & Savings Plan. The 92 SERP and 96 SERP also require that participants who choose to receive a benefit from these plans enter into an agreement not to compete with us.

As of September 30, 2001, we had designated nine executive officers as participants in the Supplemental Executive Retirement Plans. The estimated annual expense to be accrued under the plan for those executive officers is not expected to exceed $1.8 million. During the period from 1992 through 2000, three officers retired and have received payments according to the terms of the plans.

On July 1, 1996 we established the AECOM Excess Benefit Plan for participants in the Supplemental Executive Retirement Plans in order to provide only those benefits which the AECOM Pension Plan cannot

provide due to IRS limits and it is intended to be a mirror plan for pension source tax purposes. Benefits from the Excess Benefit Plan are unfunded and will reduce, dollar-for-dollar, the pension benefit paid by the Supplemental Executive Retirement Plans.

The following table shows the estimated combined annual benefits as of September 30, 2001 from the AECOM Pension Plan, MSERP, Excess Benefit Plan and 92 SERP. The benefits were not reduced by the hypothetical 401(k) benchmark account described above. The table also assumes that the participant was hired prior to May 1, 1990 at age 40, with a potential service of 25 years at age 65. The benefits do not reflect any frozen benefits that may have been grandfathered under prior plans or prior limits on pensionable earnings.

Pension Plan Table

	Years of Service
Annual Compensation ⁽¹⁾	10	15	20	25
200,000	27,374	41,999	57,517	74,385
225,000	31,465	48,136	65,699	84,613
250,000	35,557	54,273	73,882	94,841
300,000	43,739	66,547	90,248	115,298
400,000	60,105	91,095	122,978	156,212
500,000	76,470	115,643	155,709	197,125
750,000	117,384	177,013	237,536	299,409
1,000,000	158,297	238,384	319,363	401,693
1,250,000	199,211	299,754	401,191	503,977
1,500,000	240,125	361,124	483,018	606,261

(1)

Annual compensation includes salary, sick pay, overtime pay, shift premiums, contract completion bonuses, incentive compensation bonuses, severance pay, vacation pay, employee contributions to the Retirement & Savings Plan, and any amounts contributed on behalf of the employee to a premium conversion plan. Compensation does not include employer contributions to employee benefit plans, domestic and overseas allowance, moving expenses, and payment for unused vacation.

Mr. Newman’s years of service to determine his pension benefits is limited to 20 years of service. Mr. Newman, for purposes of his pension benefits, has reached his maximum of 20 years of service. Mr. Holdsworth and Mr. Incaudo have 16 and 19 years of service, respectively. Mr. McCullagh is a participant in the 96 SERP. At his present salary level and with five years of service, his total accrued annual pension benefit is approximately $30,000. Mr. Bong is a participant in the Hong Kong pension plan, which is a defined contribution plan. The employer contribution toward Mr. Bong’s pension scheme was 23.5% of his salary, or $69,000, in 2001. Mr. Odgers is a participant in the Australian Superannuation Plan. He has accrued a retirement benefit equal to approximately $800,000, payable in a lump sum at age 65 (this is approximately equal to an annual pension of $70,000).

Because of our broad international diversification, our employees outside the United States participate in a variety of public and private retirement and pension plans, both mandatory and voluntary, which provide various benefit levels. In Australia, many of our senior staff participate in Maunsell’s Superannuation Plan, which was established on July 1, 1965. This plan provides a lump sum amount equal to 18.5% of the employee’s final average annual compensation per year of service. This benefit is capped at seven times average annual compensation. In Hong Kong, most of our employees participate in a Defined Contribution Scheme established in December 2000 with employee contributions ranging from 3% to 6.5% of salary plus an employer match of 150% on the first 1% to 4% of employee contributions. Some directors receive a higher employer contribution of 23.5% of salary.

Stock Option Loan Program and Stock Repurchase Program

In March 1998, we established the Stock Option Loan Program and Stock Repurchase Program to facilitate the exercise of options to purchase our common stock. Under this program, upon the expiration of an option award or the death, disability or termination of an option holder, we offer to the option holder a loan in the amount of the aggregate exercise price of the options granted to the option holder plus our withholding tax obligation upon exercise of the option. The option holder then uses the proceeds of the loan to exercise his or her options.

Under the program, we have made loans to some of our executive officers in the aggregate principal amount of $1,646,000 with an average interest rate of 3.54% as of March 31, 2002. The terms of the loans range from six months to one year and bear interest at the Interbank Offered Rate plus 1%. Interest and principal are payable at the maturity of the loan. We will terminate this program on or about 12 months after this offering.

Senior Executive Equity Investment Plan

We established the Senior Executive Equity Investment Plan in March 1998 to encourage our senior executives to invest in common stock so that their ownership interests would be commensurate with their executive positions. For eligible executives, we offer a loan for the purpose of purchasing shares of our common stock. The loan bears interest at a rate approximating the most recent placement of long-term debt by us. The principal and interest on the loan are due upon the earlier of (i) the sale of the common stock acquired with the loan or (ii) the termination of the executive’s employment prior to normal retirement. In the past, purchases of common stock pursuant to this program could receive a matching allocation under the Retirement & Savings Plan, the Non-Qualified Stock Purchase Plan or otherwise, with limitations. We no longer provide stock matches for purchases under this plan.

We have made loans in the aggregate principal amount of $17,400,000 with an average interest rate of 7.19% as of March 31, 2002 under the Senior Executive Equity Investment Plan. The total amount outstanding under this program was $21,015,552 at March 31, 2002, which consists of the $17,400,000 of principal plus $3,615,552 of accrued interest. Upon the closing of the this offering, we will not make any further loans under this program. On or about 12 months after this offering, the officers will sell sufficient shares needed to repay their loans and this program will be terminated.

Additional Benefits

We cover our executive officers under medical, dental, life and other welfare plans maintained by us. In general, these plans are open to a large class of employees in each of our subsidiaries. In addition to benefits generally available to the large class of employees, covered executives are generally eligible for other benefits, including company-paid executive physicals, additional life insurance paid by the employing subsidiary, company-provided automobiles, and reimbursement for approved professional society and club dues and parking. Some of the executive officers are also covered by the AECOM Supplemental Health Plan, which provides 100% additional reimbursement for allowable medical expenses up to $75,000 per calendar year.

Employment Agreements

One of our subsidiaries has entered into an employment agreement with Mr. Odgers. The employment agreement provides for an annual salary in fiscal 2000 of $206,400 (with annual cost of living adjustments thereafter), a weekly housing allowance of approximately $1,800 and an annual car allowance of approximately $15,000. Under the employment agreement, Mr. Odgers must give six months’ notice of his intention to leave and we must give one year’s notice to him if we wish to terminate his employment. The agreement terminated in October 2001 but has continued through an informal agreement.

One of our subsidiaries entered into an employment agreement with Mr. Bong in December 1996 when he was the chief executive officer of Maunsell’s Hong Kong operations. The employment agreement provides for a monthly salary of approximately $18,700, a bonus of approximately one month’s salary, a monthly housing allowance of approximately $6,200 and an monthly overseas travel allowance of approximately $5,100. Mr. Bong may only terminate his employment by providing six month’s notice. We may only terminate Mr. Bong by giving him six month’s notice or paying him six months’ salary.

Mr. Bong’s monthly salary has increased to approximately $24,600 due to (a) his greater responsibilities as chairman of not only our Hong Kong and China operations, but also as chairman of our operations in Australia, Asia and the Middle East, (b) cost-of-living adjustments since 1997, and (c) the determination by the compensation committee of our board of directors that his compensation is appropriate in light of competitive conditions.

Mr. Bong’s employment agreement also allows for a “13th month” bonus, which is a standard employment term for professional employees in Hong Kong. It is a minimum bonus and does not relate to other bonuses for which executives such as Mr. Bong may be eligible. Mr. Bong’s bonus for 2001 reflects his participation in other AECOM bonus plans, and, together with the other elements of his compensation, was approved by our independent compensation committee.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We established a Stock Option Loan Program and Stock Repurchase Program to facilitate the exercise of options to purchase our common stock. Under this program, upon the expiration of an option award or the death, disability or termination of an option holder, we offer to the option holder a loan in the amount of the aggregate exercise price of the options granted to the option holder plus our withholding tax obligation upon exercise of the option. The option holder then uses the proceeds of the loan to exercise his or her options. We will terminate this program on or about 12 months after this offering. Loans made between January 21, 2002 and the termination date will be made only to enable the borrower to comply with the lock up obligations described in “Shares Eligible for Future Sale.”

Under the program, we have made loans in the aggregate principal amount of $1,646,000 with an average interest rate of 3.54% as of March 31, 2002 to some of our executive officers. The terms of the loans range from six months to one year and bear interest at the Interbank Offered Rate plus 1%. Interest and principal are payable at the maturity of the loan. These include loans for $358,381 and $216,174 that have been made to Messrs. Newman and Incaudo, respectively, to exercise options on 40,000 and 20,000 shares, respectively. The total amount of these loans as of April 2, 2002 was $364,742 and $220,010, including interest of $6,361 and $3,837, respectively, for Messrs. Newman and Incaudo. These loans were renewed for an additional year in April 2002.

Additionally, under this same program in October 2000, loans for $382,552 and $269,531 were made to Messrs. Newman and Incaudo with an interest rate of 7.76%. The total amount of these loans at maturity was $397,395 and $278,437, including interest of $14,843 and $8,906, respectively, for Messrs. Newman and Incaudo. Messrs. Newman and Incaudo paid off these loans in April 2001 by selling 23,145 and 16,216 shares of common stock, respectively, to us. These shares were sold at the then current market price, as determined by an independent appraisal firm, of $17.17 per share.

We established a Senior Executive Equity Investment Program to encourage our senior executives to invest in common stock so that their ownership interests would be commensurate with their executive positions. Upon the closing of this offering, we will not make any further loans under this program.

We have made loans in the aggregate principal amount of $17,400,000 with an average interest rate of 7.19% as of March 31, 2002 under the Senior Executive Equity Investment Program. The loans bear interest at a rate approximating the most recent placement of long-term debt by us. The principal and interest are due upon the earlier of (i) the sale of common stock acquired with the loan and (ii) the termination of the executive’s employment before normal retirement. On or about 12 months after this offering, the officers will sell a sufficient number of shares of their stock to repay their outstanding loans.

Under this program, as of September 30, 2001, 2000 and 1999, Mr. Newman had loans outstanding of $4 million, $4 million and $3 million; Mr. Holdsworth had loans outstanding of $2 million, $2 million and $1.5 million; Mr. Incaudo had loans outstanding of $2.35 million, $2.35 million and $2 million; Mr. McCullagh had loans outstanding of $1.5 million, $1.5 million and $1 million; and Mr. Odgers had loans outstanding of $750,000, $750,000 and $0.

We have entered into a consulting agreement with John W. Downer, who serves on our board of directors. Under the consulting agreement, Mr. Downer advises us in connection with prospective international projects and clients, as well as assisting our executive officers and senior management of the operating companies. Mr. Downer receives a consultant fee of $120,000 per year, plus reimbursement for necessary and reasonable expenses incurred in the performance of his duties under the consulting agreement. We have also agreed to indemnify Mr. Downer for any liability that may occur with respect to his services under the consulting agreement, to the fullest extent permitted in our bylaws. The consulting agreement expires on April 18, 2003.

One of our operating companies was engaged in fiscal 2000 by Lowe Enterprises to provide professional services in connection with the design of two 12-story office buildings in West Los Angeles, California. Lowe

Enterprises is a real estate development and investments firm whose Chairman and Chief Executive Officer, Robert J. Lowe, is a member of our board of directors. We were responsible for overall project design services, although we performed only the architectural design ourselves and subcontracted the remaining professional engineering services. We have received to date total fees of approximately $2.3 million for all services, of which approximately $900,000 was paid to subcontractors.

One of our operating subsidiaries was engaged in fiscal 2000 by Lowe Enterprises to provide professional services in connection with the design of a master plan for a 400,000 square foot office park in Chandler, Arizona, as well as complete design documentation and construction administration services for Phase I of the park for the first two structures totaling approximately 140,000 square feet. We were responsible for overall project design services, although we performed only the architectural design ourselves and subcontracted the remaining professional engineering services. We have received to date total fees of approximately $540,000 for all services, of which approximately $260,000 was paid to subcontractors.

In July 2001, one of our subsidiaries, AECOM Enterprises, created an alliance with Lowe Enterprises to capitalize on design and build opportunities in industrial and technical and other markets. Our primary role will be to identify project opportunities and, if the alliance were to be selected, to provide design and build services. Lowe Enterprises’ primary role will be to provide project development services and financing. Fees will be split depending on the type of revenue, with Lowe Enterprises receiving the predominant portion of the development revenues and with us receiving the predominant share of the design and build revenues. We have the ability, but not the obligation, to co-invest on an equal basis with Lowe Enterprises. This alliance between Lowe Enterprises and us has not yet generated any project fees.

In preparation for this offering, we restructured our company to create two classes of common stock. In the restructuring, which is subject to the consent of holders of two-thirds of our current issued and outstanding capital stock, AECOM Merger Subsidiary Corporation will merge with and into AECOM Technology Corporation and AECOM Technology Corporation will become a wholly owned subsidiary of AECOM Merger Corporation. AECOM Technology Corporation will then merge with and into AECOM Merger Corporation. Upon the effectiveness of the merger, AECOM Merger Corporation will change its name to AECOM Technology Corporation. The sole stockholders of AECOM Merger Corporation are Messrs. Newman and Incaudo, each of whom contributed $100 for 50% of the stock of AECOM Merger Corporation. The merger agreement provides that the stock owned by each of Messrs. Newman and Incaudo will be converted into one share of each of our class A-1 common stock, class A-2 common stock and class A-3 common stock.

PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock and common stock units as of May 23, 2002 with respect to:

each person or group of affiliated persons known by us to own beneficially more than 5% of the outstanding shares of our common stock and common stock units;

each of our directors;

each of our executive officers named in the Summary Compensation Table under the caption “Management—Executive Compensation” above; and

all directors and executive officers as a group.

This table does not reflect the repurchases of shares as described under the caption “Use of Proceeds” in this prospectus. As of May 23, 2002, we had 21,056,348 shares of common stock and 4,865,130 common stock units outstanding. Except as otherwise indicated in the footnotes to the table, each stockholder has sole voting and investment power with respect to the shares beneficially owned by such stockholder.

	Number of Shares of Common Stock ⁽¹⁾	Percentage Ownership of Common Stock
	Number of Shares of Common Stock ⁽¹⁾	Before Offering		After Offering
U.S. Trust Company N.A. ⁽²⁾	11,366,638	43.83	%
515 S. Flower Street, Suite 2700
Los Angeles, CA 90071
AECOM Global Holdings, Ltd. ⁽³⁾	2,841,807	10.96
c/o HWR Services Limited
P.O. Box 71, Road Town
Tortola, BVI
Richard G. Newman ⁽⁴⁾	1,288,720	4.92
Francis S.Y. Bong ⁽⁵⁾	579,885	2.24
Raymond W. Holdsworth ⁽⁶⁾	629,614	2.41
Joseph A. Incaudo ⁽⁷⁾	792,833	3.04
Grant G. McCullagh ⁽⁸⁾	585,388	2.25
David N. Odgers ⁽⁹⁾	143,621	*
Glenn Robson	—	—
H. Frederick Christie ⁽¹⁰⁾	29,793	*
John W. Downer	—	—
S. Malcolm Gillis ⁽¹¹⁾	14,360	*
Robert J. Lowe ⁽¹²⁾	34,097	*
Joan A. Payden ⁽¹³⁾	27,245	*
William P. Rutledge ⁽¹⁴⁾	17,225	*
All directors and executive officers as a group (13 persons) ⁽¹⁵⁾	4,142,781	15.57

*	Less than one percent.

(1)	Rounded to the nearest whole share.

(2)

U.S. Trust Company N.A. acts as trustee with respect to our Retirement and Savings Plan. The number of shares listed above constitutes shares held as trustee under our Retirement and Savings Plan. The shares do not include 4,865,130 shares of Class B stock held by U.S. Trust Company N.A. that can be voted solely by it. However, the Class B stock will be redeemed before the completion of this offering.

(3)	Constitutes shares held by AECOM Global Holdings, Ltd. for the benefit of our non-United States employees participating in our Global Stock Program.

(4)

Consists of an aggregate of 566,526 shares of common stock, 446,194 common stock units held under our Non-Qualified Stock Purchase Plan and 276,000 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights. Mr. Newman has outstanding loans under the Senior Executive Equity Investment Program. On or about 12 months after this offering, Mr. Newman may sell to us a sufficient number of shares of common stock to repay the loan principal and accrued interest, which will be $5,314,000 at December 31, 2002. The total exercise price for Mr. Newman’s options to purchase 276,000 shares is $1,946,720.

(5)	Consists of 577,385 shares of common stock and 2,500 shares subject to options exercisable prior to July 22, 2002.

(6)

Consists of an aggregate of 230,293 shares of common stock, 234,320 common stock units held under our Non-Qualified Stock Purchase Plan and 165,000 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights. Mr. Holdsworth has outstanding loans under the Senior Executive Equity Investment Program. On or about 12 months after this offering, Mr. Holdsworth may sell to us a sufficient number of shares of common stock to repay the loan principal and accrued interest, which will be $2,674,000 at December 31, 2002. The total exercise price for Mr. Holdsworth’s options to purchase 165,000 shares is $1,153,440.

(7)

Consists of an aggregate of 343,420 shares of common stock, 330,413 common stock units held under our Non-Qualified Stock Purchase Plan and 119,000 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights. Mr. Incaudo has outstanding loans under the Senior Executive Equity Investment Program. On or about 12 months after this offering, Mr. Incaudo may sell to us a sufficient number of shares of common stock to repay the loan principal and accrued interest, which will be $3,186,000 at December 31, 2002. The total exercise price for Mr. Incaudo’s options to purchase 119,000 shares is $858,960.

(8)

Consists of an aggregate of 237,123 shares of common stock, 286,765 common stock units held under our Non-Qualified Stock Purchase Plan and 61,500 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights. Mr. McCullagh has outstanding loans under the Senior Executive Equity Investment Program. On or about 12 months after this offering, Mr. McCullagh may sell to us a sufficient number of shares of common stock to repay the loan principal and accrued interest, which will be $1,983,000 at December 31, 2002. The total exercise price for Mr. McCullagh’s options to purchase 61,500 shares is $546,820.

(9)

Consists of 133,121 shares of common stock and 6,500 shares subject to options exercisable prior to July 22, 2002. Mr. Odgers has outstanding loans under the Senior Executive Equity Investment Program. The common stock units have no voting rights. On or about 12 months after this offering, Mr. Odgers may sell to us a sufficient number of shares of common stock to repay the loan principal and accrued interest, which will be $900,000 at December 31, 2002. The total exercise price for Mr. Odgers’ options to purchase 6,500 shares is $85,240.

(10)	Consists of 15,793 common stock units held under our Non-Qualified Stock Purchase Plan and 14,000 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights.

(11)	Consists of 8,360 common stock units held under our Non-Qualified Stock Purchase Plan and 6,000 shares subject to options exercisable prior to July 22, 2002. The common stock units have no voting rights.

(12)	Consists of 20,097 common stock units held under our Non-Qualified Stock Purchase Plan and 14,000 options exercisable prior to July 22, 2002. The common stock units have no voting rights.

(13)	Consists of 19,745 common stock units held under our Non-Qualified Stock Purchase Plan and 7,500 options exercisable prior to July 22, 2002. The common stock units have no voting rights.

(14)	Consists of 12,725 common stock units held under our Non-Qualified Stock Purchase Plan and 4,500 options exercisable prior to July 22, 2002. The common stock units have no voting rights.

(15)	See footnotes (4) through (14) above.

THE MERGER AND THE TENDER OFFER

The Merger

Prior to this offering, AECOM Technology Corporation, or Old AECOM, will merge with AECOM Merger Subsidiary Corporation, a wholly owned subsidiary of AECOM Merger Corporation, or New AECOM. Old AECOM will survive the merger and will become a wholly owned subsidiary of New AECOM. Within one week after the merger, Old AECOM will be merged with and into New AECOM, with New AECOM surviving the merger and changing its name to AECOM Technology Corporation. Immediately following the merger between Old AECOM and AECOM Merger Subsidiary Corporation:

each share of outstanding Old AECOM common stock will convert into one share of New AECOM class A common stock. Of each stockholder’s Old AECOM common stock, as nearly as possible,

one-third will be converted into shares of New AECOM class A-1 common stock,

one-third will be converted into shares of New AECOM class A-2 common stock, and

one-third will be converted into shares of New AECOM class A-3 common stock;

each share of New AECOM class A common stock will be identical except for the restrictions on transfer following completion of this offering;

each share of Old AECOM convertible preferred stock will convert into a share of New AECOM convertible preferred stock which is identical to the terms of the Old AECOM convertible preferred stock, except the New AECOM convertible preferred stock will be convertible into shares of New AECOM class A common stock;

each stock option for shares of Old AECOM common stock will convert into a stock option for the same number of shares of New AECOM class A common stock and the exercise price per share will be the same; and

each common stock unit and convertible preferred stock unit of Old AECOM will convert into one common stock unit and one convertible preferred stock unit, respectively, of New AECOM.

Immediately after the merger, we will exchange shares of class B common stock for approximately 402,000 shares of class A common stock then held by Oscar Faber Trustees Limited. This is being done for tax reasons in the United Kingdom.

Shares of class A common stock issuable above will not be transferable other than in a permitted transfer until the applicable restricted period expires. See “Description of Capital Stock—Common Stock” for a description of transfer restrictions and a definition of permitted transfers. Following the expiration of the applicable restricted period, shares of class A common stock will automatically convert into freely transferable shares of class B stock upon transfer, with certain limited exceptions. Pursuant to our new certificate of incorporation, stockholders also will be prohibited from entering into any swap or other arrangement (including contracting to sell, selling, transferring, pledging, granting of any option to purchase, making any short sale or otherwise disposing of any shares) that transfers to another, in whole or in part, any of the economic consequences of ownership of any class of common stock, in each case other than permitted transfers. However, a person may enter into a transaction that involves shares of class B common stock or shares of any other class of common stock with respect to which restricted periods have expired and, in either case involve only up to the number of such shares held by the person initiating such a transaction during the entire time of that transaction.

Holders of New AECOM class A common stock and New AECOM class B common stock will have the same economic rights and will be entitled to one vote per share, voting as a single class, on all matters voted upon by our stockholders.

The Tender Offer

After this offering, we currently intend to use $50 million of the net proceeds from this offering to fund a cash tender offer for some of our class A common stock. The exact timing, offer price and specific terms of the tender offer are within our discretion. We currently anticipate commencing the tender offer shortly after this offering. The offer price in the tender offer will be determined by us after considering the trading price of the class B common stock. We intend for the tender offer to comprise the second step of a synthetic secondary offering, or, in other words, a primary offering followed by stock purchases using the proceeds of the public offering to accomplish substantially the same goal as allowing existing stockholders to participate in the public offering.

Except as required by our plans or by law, we intend to allow the participants in our Retirement and Savings Plan to diversify their holdings of class A common stock through that plan by electing to transfer up to the greater of one-third of the participant’s investment in class A common stock or $50,000 in value of New AECOM class A common stock, based on the tender offer price, to authorized investments under our Retirement and Savings. The trustee for our Retirement and Savings Plan would tender shares of class A common stock to effect the diversification.

Our non-United States employees who participate in our Global Stock Program and all other stockholders holding shares of class A common stock outside our employee plans will be allowed to tender the greater of one-third of the participant’s investment in class A common stock or $50,000 in value of our class A common stock, based on the tender offer price.

Finally, our retirees with whom we have agreed to repurchase shares of class A common stock will be entitled to tender the greater of one-third of the number of shares of class A common stock held on the date of this offering or $50,000 in value of our class A common stock, based on the tender offer price. Any shares tendered by retirees will reduce installment repurchase amounts under our contracts with them in the order of such installments.

Members of our management holding approximately 14.8 million shares, units and options to purchase such shares and units of our capital stock, including all of our senior management, have agreed not to participate in the tender offer.

If more than $50 million in value of class A common stock, based on the tender offer price, is validly tendered and not withdrawn and we do not elect to increase the amount of the tender offer (which we have no obligation to do), the class A common stock tendered will be purchased on a pro rata basis. The percentage of shares that a holder of class A common stock will be able to sell in the tender offer will depend on the market price of the class B shares when we make the tender offer and the level of participation by other stockholders in the tender offer. As a result, we will not be able to determine the percentage of shares that a holder of class A common stock will be able to sell in the tender offer until the tender offer is complete.

We currently intend to launch the tender offer shortly after the close of this offering. We will determine the tender offer price, which may be at, above or below the public offering price and at or above the market price at the time of the tender offer after considering the trading price of the class B common stock. Each class A common stockholder must tender its shares in such a manner that it does not tender any class A-2 common stock until all of such holder’s class A-1 common stock has been tendered and does not tender any class A-3 common stock until all of such holder’s class A-2 common stock has been tendered. Such stockholders will be allowed to tender their shares as follows:

holders with class A common stock valued at $50,000 or less will be allowed to tender up to 100% of their shares;

holders with class A common stock valued at more than $50,000 and up to $150,000 will be allowed to tender up to $50,000 of their shares; and

holders with class A common stock valued in excess of $150,000 will be allowed to tender up to one-third of their shares.

The class B common stock cannot be tendered in the tender offer.

We will purchase shares in the tender offer pursuant to an offer to purchase and related materials, which we will distribute when we commence the tender offer. We will also file a tender offer statement on Schedule TO with the SEC in connection with the tender offer. We cannot assure you that the tender offer will occur or that it will occur on the terms described in this prospectus.

How We Will Effect the Merger and the Public Offering

If approved, we will effect the merger immediately prior to the closing of this offering. At that time, we will file a certificate of merger with the Secretary of State of the State of Delaware. We currently expect that this will occur during the third calendar quarter of 2002.

Conditions to the Merger

We will complete the merger only if each of the following conditions are satisfied or waived:

At least two-thirds of the outstanding voting power of Old AECOM common stock, class B preferred stock and convertible preferred stock entitled to vote, voting together as a single class, shall have voted to adopt the merger agreement;

New AECOM simultaneously has consummated this offering of shares of its class B common stock;

No statute, rule, regulation, executive order, decree, injunction or other order has been enacted, entered, promulgated or enforced by any court or governmental authority that is in effect and has the effect of prohibiting the consummation of the merger;

All approvals and consents necessary or desirable, if any, in connection with consummation of the merger have been obtained;

The number of shares of Old AECOM capital stock that are issued and outstanding on the record date for the special stockholder meeting and that are held by dissenting stockholders who have not voted in favor of or consented to the adoption of the merger agreement and who are entitled to demand and have delivered a written demand for appraisal of such shares shall not exceed 5% of the issued and outstanding shares of Old AECOM capital stock immediately prior to the effective time of the merger; and

Old AECOM and New AECOM have agreed to merge with each other, with New AECOM being the surviving company and changing its name to AECOM Technology Corporation.

Apart from compliance with applicable federal and state securities laws, and the approval of our stockholders, we do not believe that any other material federal or state regulatory requirements must be complied with or that any other material approvals must be obtained in connection with the merger.

Termination of the Merger

At any time before the merger becomes effective, our board of directors may abandon the merger.

DESCRIPTION OF CAPITAL STOCK , CERTIFICATE OF INCORPORATION AND BYLAWS

The following is a description of the terms of our restated certificate of incorporation and bylaws as each will be in effect following the merger. We also refer you to our restated certificate of incorporation and bylaws, copies of the forms of which have been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part or is available from us.

Authorized Capitalization

Our Restated Certificate of Incorporation authorizes us to issue 195,000,000 shares of common stock and 10,000,000 shares of any type of preferred stock.

Our capital structure will consist of:

15,000,000 authorized shares of class A-1 common stock;

15,000,000 authorized shares of class A-2 common stock;

15,000,000 authorized shares of class A-3 common stock;

150,000,000 authorized shares of class B common stock; and

10,000,000 authorized shares of preferred stock.

Prior to this offering and the tender offer, there will be approximately 7.1 million shares of class A-1 common stock, 7.1 million shares of class A-2 common stock, 7.1 million shares of class A-3 common stock, approximately 8,250 shares of convertible preferred stock outstanding, and approximately shares of class B common stock. Shares of our class A common stock that are converted to shares of class B common stock will resume the status of authorized but unissued shares of class A common stock.

After this offering, there will be outstanding stock options and common stock units for about 9.9 million shares of our class A common stock and there will be outstanding convertible preferred stock units for approximately 1,600 shares of our convertible preferred stock.

Common Stock

The holders of the common stock are entitled to one vote per share and, together with the holders of any series of preferred stock having the right to vote as a class with the common stock, shall vote as one class on all matters to be voted on by our stockholders. All shares of common stock have equal voting rights.

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

Subject to the rights of the holders of any series of preferred stock that now exist or may hereafter be issued, the holders of the common stock are entitled to receive dividends, when, as and if declared by our board of directors, from funds legally available therefor. If dividends or other distributions are payable in our common stock, including distributions pursuant to stock splits or divisions of our common stock, only shares of class A common stock will be paid or distributed with respect to shares of class A common stock and only shares of class B common stock will be paid or distributed with respect to shares of class B common stock. The number of shares of class A common stock and shares of class B common stock so distributed will be equal on a per share basis.

Neither our shares of class A common stock nor our shares of class B common stock may be reclassified, subdivided or combined, except for reclassifications after the expiration of all applicable restricted periods to combine classes of our class A-1, class A-2, class A-3 and class B common stock into one class of common stock, without any class designation, pursuant to an amendment to our certificate of incorporation, unless the reclassification, subdivision or combination occurs simultaneously and in the same proportion for the class.

The following table compares our class A common stock and class B common stock.

	Class A Common Stock	Class B Common Stock
Public Market:	None	Will be listed on the New York Stock Exchange, subject to official notice of issuance.



Voting Rights:	One vote per share.	One vote per share.



	No cumulative voting for our board of directors.	No cumulative voting for our board of directors.



Transfer Restrictions:	Sales may be made pursuant to	No transfer restrictions.
	the proposed tender offer. During
	the restricted periods noted below,
	no sales, transfers, pledges or offers
	to sell or hedging transactions
	can be made, except for permitted
	transfers. Permitted transfers include:

	Ÿ transfers approved by us
	after the death of an
	employee in order to pay
	estate taxes and expenses
	and transfers in the case of employee stockholder hardship;



	Ÿ transfers to family members and estates established for estate planning or educational purposes; and



	Ÿ transfers to us, as otherwise contemplated by our employee benefit plans or pursuant to the proposed tender offer.



	Prohibitions on hedging transactions including contracts to buy or sell class A common stock. A hedging transaction is a transaction where one effectively locks in a sale price to avoid the risk of a future price decrease.

	Class A Common Stock	Class B Common Stock
	Ÿ The class A common stock consists of one-third class A-1 common stock, one-third class A-2 common stock and one-third class A-3 common stock. After the expiration of the applicable sales restrictions, the class A common stock will convert upon sale into unrestricted class B common stock. The sales restrictions expire as follows:



	Ÿ for the class A-1 common stock, 180 days after the pricing of this offering;



	Ÿ for the class A-2 common stock, 360 days after the pricing of this offering; and



	Ÿ for the class A-3 common stock, 540 days after the pricing of this offering.



Conversion:	Shares of class A common stock will convert automatically into shares of unrestricted class B common stock upon any transfer.	Not convertible.



Rights upon merger, consolidation or reorganization:	In the event that we reorganize, merge or consolidate with one or more other corporations, holders of shares of class A common stock will be entitled to receive the same kind and amount of securities or property that is to be received by holders of shares of class B common stock.	In the event that we reorganize, merge or consolidate with one or more other corporations, holders of shares of class B common stock will be entitled to receive the same kind and amount of securities or property that is to be received by holders of shares of class A common stock.



Other Rights:	No preemptive rights or other subscription rights.	No preemptive rights or other subscription rights.

Preferred Stock

Our board of directors, without further approval of the stockholders, has the authority to issue shares of preferred stock from time to time on terms that it may determine, to divide preferred stock into one or more classes or series, and to fix the designations, voting powers, preferences and relative participating, optional or other special rights of each class or series, and the qualifications, limitations or restrictions of each class or series, to the fullest extent permitted by Delaware law. The issuance of preferred stock could have the effect of decreasing the market price of our common stock, impeding or delaying a possible takeover and adversely affecting the voting and other rights of the holders of common stock. The only preferred stock outstanding immediately after this offering will be the convertible preferred stock described below.

Convertible Preferred Stock

The following is a summary of the material terms of the convertible preferred stock.

General

The convertible preferred stock is limited to an aggregate of 2,500,000 shares with a par value of $.001 per share and a liquidation preference of $100 per share.

Dividends

Holders of the convertible preferred stock are entitled to receive dividends payable in additional shares of convertible preferred stock at the applicable rate as set forth below. Dividends on the convertible preferred stock are payable quarterly on October 1, January 1, April 1 and July 1 of each year. Dividends payable on the convertible preferred stock for any period greater or less than a full year shall be computed on the basis of a 365-day year.

The applicable rate will be set annually by the independent appraiser engaged by the trustee of the Stock Investment Plan at a level that it determines is necessary for the fair value of the convertible preferred stock to be equal to its par value. In making that determination, the appraiser considers our credit worthiness (to determine the “spread” over 12-month U.S. Treasury Bills) and prevailing market rates (the return on 12-month U.S. Treasury Bills). Participants are informed shortly before the end of the September 30 fiscal year of what the spread (over 12-month U.S. Treasury Bills) component of the applicable rate is. The actual 12-month U.S. Treasury Bill rate at September 30 will be used in the final calculation of the applicable rate for the ensuing 12-month period.

Redemption

After a share of convertible preferred stock has been outstanding for at least three years, we may redeem such convertible preferred stock at our election, in whole or in part, upon not less than 30 nor more than 60 days’ written notice to the registered holder of the shares of convertible preferred stock to be redeemed. The redemption price shall be equal to 102.5% of the liquidation preference of the shares of convertible preferred stock to be redeemed, plus the payment of any accrued and unpaid dividends to the redemption date. If the convertible preferred stock has been held at least one year, on each January 1, April 1, July 1 and October 1, the holder of shares of convertible preferred stock may convert the shares to class A common stock. See “—Conversion”.

Conversion

If the convertible preferred stock has been held at least one year, on each January 1, April 1, July 1 and October 1 (a “Preferred Conversion Date”), the holder of shares of convertible preferred stock may convert some or all of the shares of convertible preferred stock held into shares of class A common stock. The number of shares of our class A common stock to be received upon conversion shall be determined by dividing (i) the aggregate liquidation preferences and accrued and unpaid dividends to the applicable Preferred Conversion Date of the shares of convertible preferred stock to be converted, by (ii) the per share price of our class A common stock on the applicable conversion date. The class A common stock issued upon conversion of the convertible preferred stock will be divided, as nearly as possible, equally between class A-1, class A-2 and class A-3 common stock. The class A common stock issued upon conversion of the convertible preferred stock will have the same terms and restrictions as the class A common stock held by other stockholders.

Liquidation Rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of AECOM, the holders of shares of convertible preferred stock are entitled to receive out of our assets available for distribution to

stockholders, before any distribution of assets or any payments are made to holders of our common stock or of any other shares of our stock ranking as to such a distribution junior to the shares of convertible preferred stock, liquidating distributions in the amount of $100 per share plus accrued and unpaid dividends. After payment of such liquidating distributions, the holders of shares of convertible preferred stock will not be entitled to any further participation in any distribution of assets by us.

Voting Rights

Except as expressly required by applicable law, the holders of the convertible preferred stock will be entitled to one vote per share.

If the equivalent of six quarterly dividends payable on the convertible preferred stock are in arrears, the number of our directors will be increased by two and the holders of convertible preferred stock, voting as a class with the holders of shares of any one or more other series of preferred stock ranking on a parity with the convertible preferred stock as to payment of dividends and the distribution of assets and upon which like voting rights have been conferred and are exercisable, will be entitled to elect two directors to fill such vacancies. Such right to elect two additional directors shall continue until all dividends in arrears have been paid or declared and set apart for payment. Each director elected by the holders of shares of the convertible preferred stock and all other classes of preferred stock whose holders are entitled to vote shall continue to serve as such director for the full term for which he or she shall have been elected, notwithstanding that prior to the end of such term such default shall cease to exist.

Common Stock Units

We have a Non-Qualified Stock Purchase Plan pursuant to which our highly compensated employees may defer compensation that they might otherwise have contributed to our Retirement and Savings Plan. As a result of these deferrals, employees are credited with common stock units on a tax-deferred basis. The common stock units may only be redeemed for common stock. The holders of common stock units are not entitled to vote but are credited with dividends that are declared on the common stock. In the event of our liquidation, holders of common stock units will be entitled to no rights greater than holders of our common stock.

Our non-employee directors are entitled to defer some or all of their annual retainers and meeting fees and receive common stock units.

Convertible Preferred Stock Units

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

Description of Our Certificate of Incorporation

This section describes other key provisions of our certificate of incorporation.

Limitation of Director Liability

Our certificate of incorporation provides that our directors are not liable to our stockholders for monetary damages for breach of fiduciary duty, except for liability:

for breach of duty of loyalty;

for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;

under Section 174 of the Delaware General Corporation Law (unlawful dividends); and

for transactions from which the director derived improper personal benefit.

Indemnification of Directors and Officers

Our certificate of incorporation provides for indemnification of our directors and officers to the fullest extent authorized by the Delaware General Corporation Law.

Classified Board of Directors

Our certificate of incorporation provides for a classified board of directors.

Anti-Takeover Effects of Various Provisions of Delaware Law and Our Certificate of Incorporation and Bylaws

Our new certificate of incorporation and bylaws will contain provisions that may have some anti-takeover effects. Provisions of Delaware law may have similar effects under our new certificate of incorporation.

Delaware Anti-Takeover Statute

We are subject to Section 203 of the Delaware General Corporation Law. Subject to specific exceptions, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the time such stockholder became an interested stockholder, unless:

the business combination or the transaction in which the stockholder became an interested stockholder is approved by the board of directors prior to the time that the interested stockholder attained that status;

upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding those shares owned by persons who are directors and also officers, and employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or

at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Business combinations include mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to various exceptions, an interested stockholder is a person who, together with his or her affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s outstanding voting stock. These restrictions could prohibit or delay the accomplishment of mergers or other takeover or change-in-control attempts with respect to us and, therefore, may discourage attempts to acquire us.

Certificate of Incorporation and Bylaws

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

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

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

Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary. To be timely, a stockholder’s notice must be delivered or mailed and received at our principal executive offices not less than 45 nor more than 75 days in advance of the anniversary date of our proxy statement in connection with our previous year’s annual meeting. Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.

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

for breach of duty of loyalty;

for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;

under Section 174 of the Delaware General Corporation Law (unlawful dividends); or

for transactions from which the director derived improper personal benefit.

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

The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

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

Authorized But Unissued Shares. Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without your approval. We may use these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Supermajority Provisions. Under our certificate of incorporation, we must receive the consent of the holders of at least two-thirds of the outstanding shares of our class A and class B common stock, voting together as a single class, to approve a “business combination.” A business combination is defined as:

(i) any merger of AECOM into, or any consolidation of AECOM with, any other firm, corporation or entity, other than any corporation of which a majority of the voting securities is owned directly or indirectly by AECOM;

(ii) any sale, lease, exchange or other transfer to any individual firm, corporation or entity of all or substantially all of the assets of AECOM (other than a mortgage or pledge of the assets of AECOM) in one or more related transactions; or

(iii) the adoption of any plan for the liquidation or dissolution of AECOM.

Transfer Agent and Registrar

Mellon Investor Services LLC is the transfer agent and registrar for our common stock.

CERTAIN INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following summary describes material United States federal income and estate tax consequences of the ownership and disposition of class B common stock by you if you are a non-U.S. holder.

For purposes of the discussion, a “non-U.S. holder” means a person that is not any of the following:

a citizen or resident of the United States;

a corporation or partnership or other entity treated as a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof;

an estate the income of which is subject to United States federal income taxation regardless of its source; and

a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as described in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” or (2) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

If a partnership holds our class B common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our class B common stock, you should consult your tax advisor.

This discussion does not address all aspects of United States federal income and estate taxes and does not deal with foreign, state and local law or tax consequences that may be relevant to you in light of your personal circumstances. Special rules may apply to certain non-U.S. holders, such as insurance companies, tax exempt organizations, banks, financial institutions, dealers in securities, holders of securities held as part of a “straddle,” “hedge” or “conversion transaction,” “controlled foreign corporations,” “passive foreign investment companies,” “foreign personal holding companies,” corporations that accumulate earnings to avoid United States federal income tax, and certain foreign citizens and long-term residents of the United States that are subject to special treatment under the Code. If you are one of these entities, you should consult your own tax advisor to determine the United States federal, state, local and other tax consequences that may be relevant to you or your owners. For purposes of this discussion, it is assumed that you hold our class B common stock as a capital asset (generally for investment). Furthermore, the discussion below is based upon the provisions of the Code, and regulations, rulings and judicial decisions thereunder as of the date of this prospectus, and these authorities may be changed, perhaps retroactively, so as to result in United States federal income tax consequences different from those discussed below.

If you are considering the purchase, ownership or disposition of our class B common stock you should consult your own tax advisor concerning United States federal income and estate tax consequences in light of your particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.

Dividends

Dividends paid to you on our class B common stock generally will be subject to withholding of United States federal income tax at a 30% rate (or lower applicable treaty rate). However, dividends that are effectively connected with your conduct of a trade or business within the United States and, where a tax treaty applies, are attributable to your United States permanent establishment, will not be subject to the withholding tax, but instead will be subject to United States federal income tax on a net income basis at applicable graduated individual or corporate rates. You will have to comply with certain certification and disclosure requirements in order for effectively connected income to be exempt from withholding. Effectively connected dividends received by you if you are a foreign corporation may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate).

If you wish to claim generally the benefit of an applicable treaty rate (and avoid backup withholding as discussed below) for dividends, you will be required to complete Internal Revenue Service Form W-8BEN (or successor form) and certify, under penalty of perjury, that you are not a U.S. person. If the class B common

stock is held through certain foreign intermediaries or certain foreign partnerships, these intermediaries or partnerships, as well as the beneficial owners or partners, may need to satisfy the certification requirements of applicable Treasury regulations.

Special certification requirements apply to certain non-U.S. holders that are entities rather than individuals.

If you are eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty you may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service.

Gain on Disposition of Common Stock

You generally will not be subject to United States federal income tax with respect to gain recognized on a sale or other disposition of our class B common stock unless:

the gain is effectively connected with your trade or business in the United States, and, where a tax treaty applies, is attributable to your United States permanent establishment;

you are an individual and hold the class B common stock as a capital asset, you are present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions are met; or

we are or have been a “U.S. real property holding corporation” for United States federal income tax purposes.

If you are described in the first bullet point above you will be subject to tax on the net gain derived from the sale under regular graduated United States federal income tax rates. If you are described in the second bullet point above you will be subject to a flat 30% tax on the gain derived from the sale unless an applicable income tax treaty provides otherwise. That gain may be offset by United States source capital losses (even though you are not considered a resident of the United States). If you are a non-U.S. holder that is a foreign corporation and fall under the first bullet point above, you will be subject to tax on your gain under regular graduated United States federal income tax rates and, in addition, may be subject to the branch profits tax equal to 30% (or lower applicable treaty rate) of your effectively connected earnings and profits.

We believe we are not and do not presently anticipate becoming a “U.S. real property holding corporation” for United States federal income tax purposes.

Federal Estate Tax

If you are an individual, our class B common stock held by you at the time of your death will be included in your gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

We must report annually to the Internal Revenue Service and to you the amount of dividends paid to you and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which you reside under the provisions of an applicable income tax treaty. You will be subject to backup withholding unless applicable certification requirements are met.

Payment of the proceeds of a sale of class B common stock within the United States or conducted through certain U.S. related financial intermediaries is subject to both backup withholding and information reporting unless you certify under penalties of perjury that you are a non-U.S. holder (and the payor does not have actual knowledge that you are a United States person) or you otherwise establish an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is furnished to the IRS.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of the offering, we will have shares of class B common stock outstanding (assuming no exercise of the underwriters’ over-allotment option). All of the shares of class B common stock sold in the offering will be freely tradable without restriction under the Securities Act.

In addition to the shares of our class B common stock sold in this offering, upon consummation of this offering and prior to the tender offer, we will have outstanding approximately 7.1 million shares of class A-1 common stock, approximately 7.1 million shares of class A-2 common stock, approximately 7.1 million shares of class A-3 common stock and approximately 402,000 shares of our class B common stock. The class A-1, class A-2 and class A-3 common stock is sometimes referred to collectively as our class A common stock. In addition to our outstanding class A common stock and class B common stock, at May 23, 2002, we also had 8,063 shares of class A common stock issuable upon conversion of our convertible preferred stock and 4,866,675 shares of class A common stock to be issued upon redemption of the convertible preferred stock units and common stock units issued under our Non-Qualified Stock Purchase Plan. The class A common stock issued upon conversion of our convertible preferred stock or upon redemption of our common stock units will be divided, as nearly as possible, among class A-1, class A-2 and class A-3 common stock. At May 23, 2002, we had also granted options to employees to purchase 4,013,050 shares of class A common stock at a weighted average exercise price of $10.54 per share, which options vest over a five year period, and options to non-employee directors to purchase 79,000 shares of class A common stock at a weighted average exercise price of $9.33 per share, all of which are currently exercisable. The class A common stock issued upon exercise of these options will be divided, as nearly as possible, among class A-1, class A-2 and class A-3 common stock.

Class A-1, class A-2 and class A-3 common stock, whether currently outstanding or issued after the offering upon future exercise of outstanding options, conversions of outstanding convertible preferred stock or convertible preferred stock units or redemption of common stock units, will be subject to the following transfer restrictions:

class A-1 common stock may not be transferred until 180 days after this offering;

class A-2 common stock may not be transferred until 360 days after this offering; and

class A-3 common stock may not be transferred until 540 days after this offering.

The transfer restrictions on our class A common stock described above do not apply to:

transfers approved by us after the death of any employee in order to pay estate taxes and expenses and transfers in the case of employee stockholder hardship, such as medical necessity or family emergencies;

transfers to family members and estates established for estate planning or educational purposes; provided that the shares transferred will remain subject to the transfer restrictions described above; and

transfers to us, as otherwise contemplated by our employee benefit plans or pursuant to the proposed tender offer.

After the expiration of the applicable transfer restrictions described above with respect to our class A-1, class A-2 and class A-3 common stock, our shares of class A common stock, except for shares held by our affiliates, will be freely tradeable under the Securities Act without restriction and will convert into shares of class B common stock upon any transfer.

We have agreed with the underwriters to offer to purchase any of the approximately 402,000 shares of class B common stock held by the Oscar Faber Trustees Limited that Oscar Faber Trustees Limited proposes to sell during the 540 days after this offering.

We currently intend to use $50 million of the net proceeds of the offering to fund a cash tender offer for a portion of the class A common stock. See “The Merger and the Tender Offer” for a further discussion of the proposed tender offer. Each class A common stockholder must tender its shares in such a manner that it does not tender any class A-2 common stock until all of such holder’s class A-1 common stock has been tendered and does not tender any class A-3 common stock until all of such holder’s class A-2 common stock has been tendered. Such stockholders will be allowed to tender their shares as follows:

holders with class A common stock valued at $50,000 or less will be allowed to tender up to 100% of their shares;

holders with class A common stock valued at more than $50,000 and up to $150,000 will be allowed to tender up to $50,000 of their shares; and

holders with class A common stock valued in excess of $150,000 will be allowed to tender up to one-third of their shares.

Members of our management holding approximately 14.8 million class A common shares, units and options to purchase such shares and units, including all of our senior management, have agreed not to participate in the tender offer. The class B common stock cannot be tendered in the tender offer.

Upon completion of the offering, approximately 3,462,281 shares of our common stock will be control securities, as defined in Rule 144 under the Securities Act, which may be sold in the public market if registered under the Securities Act or an exemption from registration under Rule 144 under the Securities Act. In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) will be entitled to sell in any three-month period a number of shares that does not exceed the greater of: (i) 1% of the number of shares of our common stock then outstanding ( shares immediately after the offering or if the underwriters’ over-allotment is exercised in full) or (ii) the average weekly trading volume of our common stock on the NYSE during the four calendar weeks immediately preceding the date on which the notice of sale is filed with the SEC. Sales pursuant to Rule 144 are subject to requirements relating to manner of sale, notice and availability of current public information about us. A person (or persons whose shares are aggregated) who is not deemed to be an affiliate of ours preceding the sale, and who has beneficially owned restricted securities for at least two years is entitled to sell such shares pursuant to Rule 144(k) without regard to the limitations and requirements described above.

We have also agreed not to directly or indirectly, offer to sell, contract to sell, sell or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for common stock for a period of 180 days after the date of this prospectus, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, subject to limited exceptions described under the heading “Underwriters” in this prospectus.

We intend to file registration statements on Form S-8 under the Securities Act to register shares of common stock reserved for issuance under our employee benefit plans, thus permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act. As of May 23, 2002, there were outstanding options to purchase 4,013,050 shares of our common stock under our benefit plans. Approximately an additional 7.7 million shares are reserved for issuance under our benefit plans. These registration statements will become effective immediately upon filing.

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

UNDERWRITERS

Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Lehman Brothers Inc., Banc of America Securities LLC and Bear, Stearns & Co. Inc. are acting as representatives, have severally agreed to purchase, and we have agreed to sell to them, severally, the number of shares of our class B common stock set forth below.

Name		Number of Shares
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
Banc of America Securities LLC
Bear, Stearns & Co. Inc.



Total

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

The underwriters initially propose to offer part of the shares of our class B common stock directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $ a share under the public offering price. Any underwriter may allow, and such dealers may reallow, a concession not in excess of $ a share to other underwriters or to certain dealers. After the initial offering of the shares of our class B common stock, the offering price and other selling terms may from time to time be varied by the representatives of the underwriters.

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

The underwriters have agreed to reimburse us for certain expenses that we incur in connection with this offering.

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

We have applied to list shares of our class B common stock on the New York Stock Exchange under the symbol “AEO.”

We have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, we will not, during the period ending 180 days after the date of this prospectus:

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock; or

enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of our common stock,

whether any transaction described above is to be settled by delivery of shares of our common stock or such other securities, in cash or otherwise. The restrictions described in this paragraph do not apply to:

the sale of the shares to the underwriters;

the issuance by us of shares of our common stock pursuant to our employee benefit plans and non-employee directors benefit plans described in this prospectus;

the issuance by us of shares of our common stock upon the exercise of an option or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing; or

the issuance by us of stock options; provided that such options do not become exercisable or vest during such 180-day period, and the issuance of options under our 2002 Employee Stock Purchase Plan and our Global Stock Purchase Plan.

In order to facilitate the offering of our common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, the underwriters may over-allot in connection with the offering, creating a short position in the common stock for their own account. In addition, to cover over-allotments or to stabilize the price of our common stock, the underwriters may bid for, and purchase, shares of our common stock in the open market. Finally, the underwriting syndicate may reclaim concessions allowed to an underwriter or a dealer for distributing our common stock in the offering, if the syndicate repurchases previously distributed common stock in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of our common stock above independent market levels. The underwriters are not required to engage in these activities, and may end any of these activities at any time.

Because Bank of America, N.A., an affiliate of Banc of America Securities LLC, is a lender under our credit facility to be repaid by us and will receive more than 10% of the net proceeds of this offering, Banc of America Securities LLC may be deemed to have a “conflict of interest” under Rule 2710(c)(8) of the Conduct Rules of the National Association of Securities Dealers. Accordingly, this offering will be made in compliance with the applicable provisions of Rule 2720 of the Conduct Rules. In accordance with this rule, the initial public offering price is no higher than that recommended by a “qualified independent underwriter” meeting certain standards. In accordance with this requirement, Morgan Stanley & Co. Incorporated has assumed the responsibilities of acting as a qualified independent underwriter and has recommended a price in compliance with the requirement of Rule 2720. Morgan Stanley & Co. Incorporated, in its role as qualified independent underwriter, has performed due diligence investigations and reviewed and participated in the preparation of this prospectus and the registration statement of which this prospectus is a part. Morgan Stanley & Co. Incorporated will receive no compensation for acting in this capacity; however, we have agreed to indemnify Morgan Stanley & Co. Incorporated for acting as a qualified independent underwriter against specified liabilities under the Securities Act.

It is anticipated that Morgan Stanley DW Inc., an affiliate of Morgan Stanley & Co. Incorporated, through Morgan Stanley Online, its online service, may be a member of the syndicate or selling group and engage in electronic offers, sales and distribution of the shares being offered. A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the lead managers to underwriters that may make Internet distributions on the same basis as other allocations.

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

Pricing of the Offering

Prior to this offering, there has been no public market for the shares of our common stock. The initial public offering price will be determined by negotiations between us and the representatives. Among the factors to be considered in determining the initial public offering price will be our future prospects and those of our industry in general, our sales, earnings and other financial operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to those of ours. The estimated initial public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed upon for us by O’Melveny & Myers LLP, Los Angeles, California. Latham & Watkins, Los Angeles, California, will pass upon legal matters for the underwriters.

EXPERTS

The consolidated financial statements of AECOM Technology Corporation at September 30, 2000 and 2001, and for each of the three years in period ended September 30, 2001, appearing in the prospectus and registration statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

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

The registration statement, including exhibits thereto, may be inspected without charge at the public reference facilities maintained by the SEC in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part thereof may be obtained from such office after payment of fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. The SEC maintains a Web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and will file periodic reports, proxy statements and other information with the SEC.

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

AECOM TECHNOLOGY CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND

FINANCIAL STATEMENT SCHEDULE

		Page
AECOM Technology Corporation



Report of Independent Auditors		F-2



Consolidated Balance Sheets as of September 30, 2000 and 2001		F-3



Consolidated Statements of Income for the Years Ended September 30, 1999, 2000 and 2001		F-4



Consolidated Statements of Stockholders’ Equity for the Years Ended September 30, 1999, 2000 and 2001		F-5



Consolidated Statements of Cash Flows for the Years Ended September 30, 1999, 2000 and 2001		F-6



Notes to Consolidated Financial Statements		F-7



Financial Statement Schedule—Schedule II—Valuation and Qualifying Accounts and Reserves		F-32



Consolidated Balance Sheets as of September 30, 2001 and March 31, 2002		F-33



Consolidated Statements of Income for the Six Months Ended March 31, 2001 and 2002		F-34



Consolidated Statements of Stockholders’ Equity for the Year Ended September 30, 2001 and the Six Months Ended March 31, 2002		F-35



Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2001 and 2002		F-36



Notes to Interim Consolidated Financial Statements		F-37



AECOM Merger Corporation



Report of Independent Auditors		F-43



Consolidated Balance Sheet as of February 11, 2002		F-44

F-1

REPORT OF INDEPENDENT AUDITORS

Board of Directors

AECOM Technology Corporation

We have audited the accompanying consolidated balance sheets of AECOM Technology Corporation and subsidiaries as of September 30, 2001 and 2000, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2001. Our audits also included the financial statement schedule listed in the Index at F-1. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of AECOM Technology Corporation and subsidiaries at September 30, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended September 30, 2001, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Los Angeles, California

November 15, 2001

F-2

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,
	2000		2001
	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$ 44,662		$ 25,968
Cash in consolidated joint ventures	6,798		2,351

	51,460		28,319
Accounts receivable (including retainage of $30,830 in 2000 and $25,768 in 2001) less allowance for doubtful accounts of $19,680 in 2000 and $20,625 in 2001	224,455		258,853
Costs and fees earned, unbilled	170,923		211,511
Income taxes receivable	1,191		—
Other current assets	16,840		18,867

Total current assets	464,869		517,550
Investments and other assets
Cost in excess of net assets purchased (less accumulated amortization of $17,021 in 2000 and $27,011 in 2001)	182,368		192,046
Investments in unconsolidated joint ventures	15,030		10,314
Deferred tax asset	16,104		20,982
Deferred loan costs	743		879
Other noncurrent assets	14,009		8,607

Total investments and other assets	228,254		232,828
Property and equipment
Cost	59,058		70,486
Accumulated depreciation and amortization	(31,579	)	(35,895	)

Total property and equipment	27,479		34,591

	$720,602		$784,969

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Bank overdraft	$ 6,166		$ 7,304
Accounts payable	136,339		138,526
Accrued expenses	114,068		118,689
Contract advances and costs and fees billed, unearned	57,150		72,372
Income taxes currently payable	350		6,185
Deferred tax liability	15,716		10,444
Current portion of long-term debt	—		9,254

Total current liabilities	329,789		362,774
Other long-term liabilities	20,384		25,122
Long-term debt	141,156		147,622
Commitments and contingencies
Redeemable common stock and common stock units	58,617		77,734
Common stock—3,852,486 shares in 2000 and 3,852,786 shares in 2001 Common stock units—432,402 units in 2000 and 796,366 units in 2001
Stockholders’ equity
Preferred stock, $.01 par value, authorized 8,000,000 shares
Convertible Preferred Stock, issued and outstanding 4,530 shares at 2001	—		453
Class B, issued and outstanding—4,080,421 shares in 2000 and 4,477,498 shares in 2001	41		45
Common stock, $.01 par value, authorized 30,000,000 shares; issued and outstanding—15,719,770 shares in 2000 and 16,170,768 shares in 2001	157		162
Common and preferred stock units—3,648,019 units in 2000 and 3,681,132 units in 2001	38,418		45,442
Additional paid-in capital	122,901		109,851
Retained earnings	26,849		44,371
Notes receivable from stockholders	(16,050	)	(17,650	)
Accumulated other comprehensive income	(1,660	)	(10,957	)

Total stockholders’ equity	170,656		171,717

	$720,602		$784,969

See notes to consolidated financial statements.

F-3

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	September 30,
	1999	2000	2001
	(in thousands, except per share data)
Total revenues	$978,365	$1,379,750	$1,513,390
Cost of revenues	776,758	1,089,985	1,131,387

Gross profit	201,607	289,765	382,003
Equity in earnings of joint ventures	10,018	10,576	4,275
General and administrative expenses	191,744	270,726	348,502

Income from operations	19,881	29,615	37,776
Interest expense, net	4,849	8,784	11,573

Income before income taxes	15,032	20,831	26,203
Provision for income taxes	4,452	3,122	8,647

Net income	$ 10,580	$ 17,709	$ 17,556

Net income per share:
Basic	$ .74	$ .94	$ .75
Diluted	$ .70	$ .88	$ .71
Shares used in per share calculations:
Basic	14,371	18,938	23,565
Diluted	15,053	20,011	24,704

See notes to consolidated financial statements.

F-4

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended September 30, 1999, 2000 and 2001

	Preferred Stock				Common Stock				Common and Preferred Stock Units				Additional Paid-In Capital		Retained Earnings		Notes Receivable From Stockholders		Accumulated Other Comprehensive Income		Total
	# Shares				# Shares				# Units				Additional Paid-In Capital		Retained Earnings		Notes Receivable From Stockholders		Accumulated Other Comprehensive Income		Total
(in thousands)
Balance at September 30, 1998	—		$—		8,541		$ 86		1,992		$18,976		$ 48,106		$(1,440	)	$ (9,500	)	$ (5,560	)	$ 50,668
Net Income	—		—		—		—		—		—		—		10,580		—		—		10,580
Equity adjustment from foreign currency translation	—		—		—		—		—		—		—		—		—		408		408
Defined benefit minimum pension liability adjustment	—		—		—		—		—		—		—		—		—		3,366		3,366

Comprehensive Income	—		—		—		—		—		—		—		—		—		—		14,354

Repurchase of terminated employees’ common stock and common stock units	—		—		(844	)	(10	)	(123	)	(1,237	)	(8,698	)	—		—		—		(9,945	)
Common stock and common stock units issued under stock match program	—		—		322		4		236		2,777		3,626		—		—		—		6,407
Issuance of Class B preferred stock and common stock	3,092		31		2,115		22		—		—		23,256		—		—		—		23,309
Notes receivable from stockholders	—		—		—		—		—		—		—		—		(1,125	)	—		(1,125	)
Issuance of common stock units	—		—		—		—		536		5,273		—		—		—		—		5,273
Transfers from (to) redeemable common stock and common stock units	—		—		(154	)	(2	)	(95	)	(1	)	(8,649	)	—		—		—		(8,652	)

Balance at September 30, 1999	3,092		31		9,980		100		2,546		25,788		57,641		9,140		(10,625	)	(1,786	)	80,289
Net Income	—		—		—		—		—		—		—		17,709		—		—		17,709
Equity adjustment from foreign currency translation	—		—		—		—		—		—		—		—		—		(91	)	(91	)
Defined benefit minimum pension liability adjustment	—		—		—		—		—		—		—		—		—		217		217

Comprehensive Income	—		—		—		—		—		—		—		—		—		—		17,835

Repurchase of common stock and common stock units	—		—		(1,004	)	(11	)	(150	)	(1,752	)	(12,080	)	—		—		—		(13,843	)
Common stock and common stock units issued under stock match program	—		—		204		1		527		7,216		2,793		—		—		—		10,010
Issuance of Class B preferred stock and common stock	988		10		7,302		74		—		—		90,438		—		—		—		90,522
Notes receivable from stockholders	—		—		—		—		—		—		—		—		(5,425	)	—		(5,425	)
Issuance of common stock units	—		—		—		—		611		7,165		—		—		—		—		7,165
Transfers from (to) redeemable common stock and common stock units	—		—		(762	)	(7	)	114		1		(15,891	)	—		—		—		(15,897	)

Balance at September 30, 2000	4,080		41		15,720		157		3,648		38,418		122,901		26,849		(16,050	)	(1,660	)	170,656
Net Income	—		—		—		—		—		—		—		17,556		—		—		17,556
Equity adjustment from foreign currency translation	—		—		—		—		—		—		—		—		—		(956	)	(956	)
Defined benefit minimum pension liability adjustment	—		—		—		—		—		—		—		—		—		(8,341	)	(8,341	)

Comprehensive Income	—		—		—		—		—		—		—		—		—		—		8,259

Repurchase of common stock and common stock units	(167	)	(3	)	(1,559	)	(16	)	(167	)	(2,309	)	(22,355	)	—		—		—		(24,683	)
Common stock and common stock units issued under stock match program	—		—		366		4		135		2,705		5,680		—		—		—		8,389
Issuance of convertible preferred stock	5		428		—		—		—		—		—		—		—		—		428
Issuance of Class B preferred stock and common stock	564		7		1,645		17		—		—		22,738		—		—		—		22,762
Notes receivable from stockholders	—		—		—		—		—		—		—		—		(1,600	)	—		(1,600	)
Issuance of common and preferred stock units	—		—		—		—		429		6,623		—		—		—		—		6,623
Pay-in-kind dividend on convertible preferred stock and preferred stock units	—		25		—		—		—		9		—		(34)		—		—		—
Transfers from (to) redeemable common stock and common stock units	—		—		(1	)	—		(364	)	(4	)	(19,113	)	—		—		—		(19,117	)

Balance at September 30, 2001	4,482		$498		16,171		$162		3,681		$45,442		$109,851		$44,371		$(17,650	)	$(10,957	)	$171,717

See notes to consolidated financial statements.

F-5

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended September 30,
	1999		2000		2001
	(in thousands)
Cash Flows from Operations:
Net Income	$ 10,580		$ 17,709		$ 17,556
Expense (income) not affecting cash:
Depreciation and amortization	7,548		13,059		19,356
Equity in earnings of unconsolidated joint ventures	(10,018	)	(10,576	)	(4,275	)
Stock match	5,800		10,010		8,389
(Increase) decrease in deferred foreign currency translation losses	408		(91	)	(956	)
(Increase) decrease in defined benefit minimum pension liability adjustment	3,366		217		(8,341	)
Change in operating assets and liabilities	(14,201	)	(15,928	)	(42,238	)

	3,483		14,400		(10,509	)

Cash Flows from Investing:
Acquisitions, net of cash acquired	(26,035	)	(52,585	)	(14,336	)
Additions to property and equipment	(5,317	)	(7,788	)	(15,545	)
Disposals of property and equipment	131		574		1,705

	(31,221	)	(59,799	)	(28,176	)

Cash Flows from Financing:
Issuance of preferred and common stock, net of notes receivable	21,384		12,882		16,746
Issuance of common and preferred stock units	5,273		7,165		6,623
Repurchase of terminated employees’ common stock and common stock units	(9,945	)	(13,843	)	(24,683	)
Borrowing under private placement of senior notes	—		35,000		21,000
Borrowing under credit agreements	138,000		307,450		211,258
Repayments under credit agreements	(138,000	)	(271,690	)	(215,400	)

	16,712		76,964		15,544

(Decrease) Increase in cash and cash equivalents	(11,026	)	31,565		(23,141	)
Cash and cash equivalents at beginning of year	30,921		19,895		51,460

Cash and cash equivalents at September 30	$ 19,895		$ 51,460		$ 28,319

Decrease (Increase) in Operating Assets:
Accounts receivable	$ (28,128	)	$ (1,977	)	$ (34,382	)
Costs and fees earned, unbilled	11,869		(22,322	)	(30,943	)
Other current assets	(3,271	)	(3,334	)	(623	)
Deferred tax benefit, long-term	(1,865	)	(8,203	)	(4,878	)
Other noncurrent assets	8,993		(66	)	7,587
Increase (Decrease) in Operating Liabilities:
Accounts payable	(7,109	)	10,610		(550	)
Accrued expenses	1,332		(9,029	)	1,848
Contract advances and costs and fees billed, unearned	(3,957	)	20,066		15,665
Income taxes currently payable	(1,524	)	(4,458	)	4,676
Deferred tax liability, current	6,792		4,275		(5,272	)
Other long-term liabilities	2,667		(1,490	)	4,634

Change in operating assets and liabilities	$ (14,201	)	$ (15,928	)	$ (42,238	)

See notes to consolidated financial statements.

F-6

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A—Summary of Significant Accounting Policies

Organization—AECOM Technology Corporation (the “Company”) acts principally through its nine major operating companies providing professional technical services to the United States Government, state and local governments and agencies, commercial, industrial and residential customers, foreign governments and others. These services encompass a variety of technical disciplines, including planning, architecture, engineering, construction management, project management, environmental engineering, and design-build, and are applied to a number of areas and industries. These include infrastructure improvement; sophisticated research, testing and defense facilities; environmental programs; land development projects; security and communication systems; institutional, industrial and commercial buildings and facilities; and energy related facilities. The Company also provides operations and maintenance services to governmental agencies both in the United States and abroad.

The Company acquired the transportation consulting practice of KPMG on November 21, 2000; on December 7, 2000, the remaining two-thirds of Halpern Glick Maunsell, the Perth based engineering firm, that had not been previously owned by the Company; and on April 26, 2001, The Warren Group, a UK based water engineering firm. These transactions and three other small firms, or portions thereof, were acquired for a total consideration of $21.7 million in a combination of cash, stock and notes. In fiscal year 2000, the Company merged with or acquired two internationally recognized firms. On April 7, 2000, the Company acquired Metcalf & Eddy, Inc., an international environmental engineering and consulting company, and on April 18, 2000 merged with Guy Maunsell International Limited (“Maunsell”), a consulting firm specializing in civil engineering and related disciplines. These companies were merged and/or acquired for a total consideration of $145.0 million, net of cash, in a combination of cash, stock and notes. The Company made three acquisitions in fiscal year 1999. On March 19, 1999, the Company acquired the infrastructure group of Day & Zimmermann, Inc., on March 31, 1999, the civil engineering firm of W.F. Castella & Associates, Inc. was acquired, and on May 18, 1999, the acquisition of the architectural firm of Spillis Candela & Partners, Inc. was completed. These companies were acquired for a total consideration of $35.1 million in a combination of cash, stock and future cash payments.

The acquisitions in fiscal years 1999, 2000 and 2001 have been accounted for as purchases and the results of their operations have been included in the consolidated results since the dates of acquisition. As required under the purchase method of accounting, the acquisition costs have been allocated to the net assets acquired based upon the fair market value.

Principles of Consolidation—The consolidated financial statements include the accounts of all subsidiaries and joint ventures in which the Company has voting control. All intercompany accounts have been eliminated in consolidation.

Investments in Unconsolidated Joint Ventures—The Company has non-controlling interests in joint ventures accounted for under the equity method. Services performed by the Company and billed to joint ventures with respect to work done by the Company for third party customers are recorded as revenues of the Company in the period such services are rendered. In certain joint ventures, a fee is added to the respective billings from the Company and the other joint venture partners on the amounts billed to the third party customers. These fees result in earnings to the joint venture and are split with each of the joint venture partners and paid to the joint venture partners upon collection from the third party customer. The Company records its allocated share of these fees as equity in earnings of joint ventures.

F-7

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue Recognition—Contract earnings are determined using the percentage-of-completion method based generally on the ratio of direct labor dollars incurred to estimated total direct labor dollars. Losses are recognized as soon as they are determined. Other Direct Costs (e.g. for third party field labor, subcontractors, or the procurement of materials or equipment) are recognized as revenues when the costs of these items are incurred and the Company is responsible for the ultimate acceptability. If the client pays for, and is responsible for, these items directly, they are not reflected in revenue or expenses. Costs and fees earned, but not yet billed, represent the excess of costs incurred and profits recognized to date over billings to date. Costs and fees billed, but not yet

earned, represent the excess of billings to date over costs incurred and profits recognized to date. The Company recognizes revenues on contract claims in excess of the agreed contract price when it is probable that the claim will result in additional contract revenue and when the amount can be reliably estimated. Revenue from claims in excess of agreed contract price is recorded only to the extent that contract costs relating to claims have been incurred. The Company is nearing completion on several projects for the U.S. Federal Government on which it has filed claims or Requests for Equitable Adjustment (REA). Once these projects are completed, the Company no longer intends to continue working on similar projects for the U.S. Government. The Company utilizes legal counsel to determine whether there is reasonable basis to support such claims. At September 30, 2000 and 2001, recorded claims and REA’s outstanding for these projects totaled $13.0 million and $20.5 million, respectively.

Depreciation and Amortization—The cost of property and equipment is depreciated over the estimated useful lives of the assets, principally by the straight-line method. Assets under capital leases are depreciated by the straight-line method over the shorter of the lease terms or the useful lives of the assets.

Intangibles—Cost in excess of net assets purchased prior to September 30, 1994 is amortized by the straight-line method over a period of forty years. Cost in excess of net assets purchased subsequent to October 1, 1994 is amortized by the straight-line method over a period of twenty years.

Foreign Currency Translation—Results of operations for foreign entities are translated to U.S. dollars using the average exchange rates during the period. Assets and liabilities for foreign entities are translated using the exchange rates in effect at the balance sheet date. Resulting translation adjustments are recorded in stockholders’ equity as foreign currency translation adjustments.

Deferred Loan Costs—Deferred loan costs at September 30, 1999, 2000 and 2001 relate to the Credit Agreement (Note G) and subsequent amendments and restatements thereto and the Senior Notes due 2006, 2008 and 2012 and are being amortized over the terms of the Credit Agreement and Senior Notes, respectively.

Cash Equivalents—Highly liquid investments maturing within three months when purchased are considered cash equivalents.

F-8

AECOM TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value of Financial Instruments—The carrying value of the Company’s loans under the Senior Executive Equity Investment Plan and long-term borrowings approximates fair value.

Accounting for Stock-Based Compensation—The Financial Accounting Standards Board issued Statement No. 123 “Accounting for Stock-Based Compensation” (“SFAS No. 123”), which allows a company to adopt a fair value based method or continue to measure compensation cost for its stock-based compensation plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25 (“APB No. 25”). The Company has elected to continue to follow APB No. 25 in its financial statements and has made pro forma disclosures of net income as if the fair value based method had been applied.

New Accounting Pronouncements—In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statements of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Under the new rules, goodwill (cost in excess of net assets purchased) will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements.

The Company will apply the new rules on accounting for goodwill beginning in the first quarter of fiscal year 2002. Application of the nonamortization provisions of the Statement is expected to result in an increase in income before taxes of approximately $9,800,000 per year. During fiscal year 2002, the Company will perform the first of the required impairment tests of goodwill as of October 1, 2001 and has not yet determined what the effect of these tests will be on the earnings and financial position of the Company.

The Company adopted SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities” on

AECOM MERGER CORP S-1/A