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

FORM 10-K/A

(Mark one)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended October 31, 1998
OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ______________________ to ____________________

Commission file number 1-7567

URS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 94-1381538
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.)

100 California Street, Suite 500
San Francisco, California 94111-4529
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (415) 774-2700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class: Name of each exchange on which registered:

Common Shares, par value $.01 per share New York Stock Exchange
Pacific Stock Exchange

8 5/8% Senior Subordinated Debentures due 2004 New York Stock Exchange
Pacific Stock Exchange

6 1/2% Convertible Subordinated Debentures New York Stock Exchange
due 2012 Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K, or any amendment to
this Form 10-K/A. [X]

On December 18, 1998, there were 15,279,048 Common Shares outstanding, and
the aggregate market value of the shares of Common Stock of URS Corporation held
by non-affiliates was approximately $295.2 million based on the closing sales
price as reported in the consolidated transaction reporting system.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10, 11, and 12 of Part III of the Registrant's 1998 Annual Report on
Form 10-K incorporated information by reference from the Registrant's
definitive Proxy Statement for the Annual Meeting of Stockholders to be held
on March 23, 1999.

This Annual Report contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
discussed here. Factors that might cause such a difference include, but are not
limited to, those discussed elsewhere in this Annual Report.

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

Page of
This Report
-----------

Report of Independent Accountants................................... 4

Consolidated Balance Sheets
Octo
ber 31, 1998 and October 31, 1997........................... 5

Consolidated Statements of Operations
For the years ended October 31, 1998, 1997 and 1996............. 6

Consolidated Statements of Changes in Stockholders' Equity
For the years ended October 31, 1998, 1997 and 1996............. 7

Consolidated Statements of Cash Flows
For the years ended October 31, 1998, 1997 and 1996............. 8

Notes to Consolidated Financial Statements.......................... 9

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of URS Corporation:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in stockholders' equity and of
cash flows present fairly, in all material respects, the financial position of
URS Corporation and its subsidiaries at October 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended October 31, 1998 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements bas
ed on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP
________________________________________
PricewaterhouseCoopers LLP

San Francisco, California
December 18, 1998, except for note 16
as to which the date is July 27, 1999

URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

October 31,
------------------
1998 1997
-------- --------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 36,529 $ 22,134
Accounts receivable, including retainage amounts of
$16,101 an
d $9,191, less allowance for doubtful accounts
of $7,206 and $1,488..................................... 161,742 80,251
Costs and accrued earnings in excess of billings on
contracts in process, less allowance for losses of $6,896
and $1,838............................................... 77,881 37,741
Deferred income taxes..................................... -- 3,843
Prepaid expenses and other assets......................... 10,033 2,885
-------- --------
Total current assets..................................... 286,185 146,854
Property and equipment at cost, net........................ 29,517 17,848
Goodwill, net.............................................. 129,748 42,485
Other assets............................................... 6,254 2,904
-------- --------
$451,704
$210,091
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Long-term debt, current portion........................... $ 16,400 $ 4,775
Notes payable............................................. 1,943 --
Accounts payable.......................................... 37,236 20,198
Accrued salaries and wages................................ 34,797 17,769
Accrued expenses and other................................ 29,385 17,863
Billings in excess of costs and accrued earnings on
contracts in process..................................... 35,455 23,013
-------- --------
Total current liabilities................................ 155,216 83,618
Long-term debt............................................. 94,957 41,448
Deferred income taxes...................................... 5,377 --
Deferred compens
ation and other............................ 29,794 7,874
-------- --------
Total liabilities......................................... 285,344 132,940
-------- --------

Commitments and contingencies (Note 10)

Stockholders' equity:
Common shares, par value $.01; authorized 20,000 shares;
issued 15,206 and 10,741 shares, respectively............ 152 107
Treasury stock............................................ (287) (287)
Additional paid-in capital................................ 117,842 51,085
Retained earnings since February 21, 1990, date of quasi-
reorganization........................................... 48,653 26,246
-------- --------
Total stockholders' equity............................... 166,360 77,151
-
- ------- --------
$451,704 $210,091
======== ========

See Notes to Consolidated Financial Statements

URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Years Ended October 31,
--------------------------
1998 1997 1996
-------- -------- --------

Revenues............................................ $805,946 $406,451 $305,470
-------- -------- --------
Expenses:
Direct operating.................................. 478,640 241,002 187,129
Indirect, general and administrative.............. 277,065 141,442 102,389
Interest expense, net............................. 8,774 4,802 3,897
-------- -------- --------
764,479 387,246 293,415
-------- -------- --------
Income before taxes................................. 41,467 19,205 12,055
Income tax expense.................................. 18,800 7,700 4,700
-------- -------- --------
Net income.......................................... $ 22,667 $ 11,505 $ 7,355
======== ======== ========
Net income per share:
Basic............................................. $ 1.51 $ 1.15 $ .92
======== ======== ========
Diluted........................................... $ 1.43 $ 1.08 $ .81
======== ======== ========

See Notes to Consolidated Financial Statements

URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands)

Common Shares Additional Total
------------- Treasury Paid-in Retained Stockholders'
Number Amount Stock Capital Earnings Equity
------ ------ -------- ---------- -------- -------------

Balances, October 31,
1995................... 7,167 $ 71 $(287) $ 31,791 $ 7,901 $ 39,476
Employee stock
purchases.............. 72 1 -- 399 -- 400
Issuance of 1,401,983
shares in connection
with the Greiner
acquisition............ 1,401 14 -- 9,449 -- 9,463
Quasi-reorganization NOL
carryforward........... -- -- -- 255 (255) --
Net income.............. -- -- -- -- 7,355 7,355
------ ---- ----- -------- ------- --------
Balances, October 31,
1996................... 8,640 86 (287) 41,894 15,001 56,694
Employee stock
purchases.............. 282 3 -- 2,026 -- 2,029
Issuance of 1,819,148
shares in connection
with the exercise of
warrants............... 1,819 18 -- 6,905 -- 6,923
Quasi-reorganization NOL
carryforward........... -- -- -- 260 (260) --
Net income.............. -- -- -- -- 11,505 11,505
------ ---- ----- -------- ------- --------
Balances, October 31,
1997................... 10,741 107 (287) 51,085 26,246 77,151
Employee stock
purchases.............. 420 4 -- 4,601 -- 4,605
Issuance of 4,044,804
shares in connection
with the Woodward-Clyde
acquisition............ 4,045 41 -- 61,896 -- 61,937
Quasi-reorganization NOL
carryforward........... -- -- -- 260 (260) --
Net income.............. -- -- -- -- 22,667 22,667
------ ---- ----- -------- ------- --------
Balances, October 31,
1998................... 15,206 $152 $(287) $117,842 $48,653 $166,360
====== ==== ===== ======== ======= ========

See Notes to Consolidated Financial Statements

URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Years Ended October 31,
----------------------------
1998 1997 1996
-------- -------- --------

Cash flows from operating activities:
Net income...................................... $ 22,667 $ 11,505 $ 7,355
-------- -------- --------
Adj
ustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization................... 14,556 7,927 5,295
Allowance for doubtful accounts and losses...... (2,351) 1,540 (3,596)
Changes in current assets and liabilities:
Accounts receivable and costs and accrued
earnings in excess of billings on contracts in
process........................................ (12,961) (14,193) (14,539)
Prepaid expenses and other assets............... (4,730) 461 1,411
Accounts payable, accrued salaries and wages and
accrued expenses............................... 2,186 3,426 6,777
Billings in excess of costs and accrued earnings
on contracts in process........................ 23 4,839 18,174
Deferred income taxes........................... 12,695 322 (4,164)
Other, net...................................... -- (3,292) 7,801
-------- --
- ------ --------
Total adjustments............................. 9,418 1,030 17,159
-------- -------- --------
Net cash provided by operating activities....... 32,085 12,535 24,514
-------- -------- --------
Cash flows from investing activities:
Payment for business acquisition, net of cash
acquired....................................... (36,937) -- (56,354)
Capital expenditures............................ (12,201) (5,127) (2,962)
-------- -------- --------
Net cash (used) by investing activities......... (49,138) (5,127) (59,316)
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of debt.................. 110,000 -- 50,000
Principal payments on long-term debt............ (83,157) (13,568) (2,056)
Proce
eds from sale of common shares............. 2,622 1,028 389
Proceeds from exercise of stock options......... 1,983 1,001 11
Proceeds from exercise of warrants.............. -- 3,895 --
Other, net...................................... -- -- (8)
-------- -------- --------
Net cash provided (used) by financing
activities..................................... 31,448 (7,644) 48,336
-------- -------- --------
Net increase (decrease) in cash.................. 14,395 (236) 13,534
Cash at beginning of year........................ 22,134 22,370 8,836
-------- -------- --------
Cash at end of year.............................. $ 36,529 $ 22,134 $ 22,370
======== ======== ========

See Not
es to Consolidated Financial Statements

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of URS
Corporation and its subsidiaries (the "Company"), all of which are wholly
owned. All significant intercompany accounts and transactions have been
eliminated in consolidation. The consolidated financial statements account for
the acquisition of Greiner Engineering, Inc. ("Greiner") and Woodward-Clyde
Group, Inc. ("W-C") in March, 1996 and November, 1997, respectively, as
purchases. See Note 3, Acquisitions.

Use of Estimates

The preparation of financial statements in conformity
with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amount of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue from contract services is recognized by the percentage-of-completion
method and includes a proportion of the earnings expected to be realized on a
contract in the ratio that costs incurred bear to estimated total costs.
Revenue on cost reimbursable contracts is recorded as related contract costs
are incurred and includes estimated earned fees in the proportion that costs
incurred to date bear to total estimated costs. The fees under certain
government contracts may be increased or decreased in accordance with cost or
performance incentive provisions which measure actual performance against
establi
shed targets or other criteria. Such incentive fee awards or penalties
are included in revenue at the time the amounts can be reasonably determined.
Revenue for additional contract compensation related to unpriced change orders
is recorded when realization is probable. Revenue from claims by the Company
for additional contract compensation is recorded when agreed to by the
customer. If estimated total costs on any contract indicate a loss, the Company
provides currently for the total loss anticipated on the contract.

Costs under contracts with the United States Government are subject to
government audit upon contract completion. Therefore, all contract costs,
including direct and indirect, general and administrative expenses, are
potentially subject to adjustment prior to final reimbursement. Management
believes that adequate provision for such adjustments, if any, has been made in
the accompanying consolidated financial statements. All overhead and general
and administrative expense recovery rates
for fiscal 1989 through fiscal 1998
are subject to review by the United States Government.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables.
Concentrations of credit risk with respect to trade receivables are limited due
to the large numbers of customers comprising the Company's customer base and
their

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

dispersion across different business and geographic areas. As of October 31,
1998 and 1997, the Company had no significant concentrations of credit risk.
The Company maintains reserves for potential credit losses and such losses have
been within management's expectations. Substantially all cash balances are held
in one financial institution and at times exceed federally insured limits.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company's financi
al instruments including
cash, accounts receivable, accounts payable and other liabilities approximate
fair value due to their short maturities. Based on borrowing rates currently
available to the Company for loans with similar terms, the carrying values of
long-term debt approximate fair value.

Income Taxes

The Company uses an asset and liability approach for financial accounting
and reporting for income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax payable for the
period plus or minus the change in deferred tax assets and liabilities during
the peri
od.

Property and Equipment

Property and equipment are stated at cost. In the year assets are retired or
otherwise disposed of, the costs and related accumulated depreciation are
removed from the accounts and any gain or loss on disposal is included in
income. Depreciation is provided on the straight-line method using composite
estimated lives ranging from 5 to 10 years for property and equipment.
Leasehold improvements are amortized over the length of the lease or estimated
useful life, whichever is less.

Income Per Common Share

The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), Earnings Per Share, effective November 1, 1997.
SFAS 128 requires the presentation of basic and diluted income per common
share. Basic income per common share is computed by dividing net income
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted income per common share is computed
giving effect t
o all dilutive potential common shares that were outstanding
during the period. Dilutive potential common shares consist of the incremental
common shares issuable upon the exercise of stock options and warrants for all
periods. All prior period income per common share amounts have been restated to
comply with SFAS 128.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In accordance with the disclosure requirement of SFAS 128, a reconciliation
of the numerator and denominator of basic and diluted income per common share
is provided as follows (in thousands, except per share data):

Years ended October
31,
----------------------
1998 1997 1996
------- ------- ------

Numerator--Basic
Net Income......................................... $22,667 $11,505 $7,355
======= ======= ======
Denominator--Basic
Weighted-average common stock outstanding.......... 14,963 10,018 8,020
======= ======= ======
Basic income per share............................... $ 1.51 $ 1.15 $ .92
======= ======= ======
Numerator--Diluted
Net income......................................... $22,667 $11,505 $7,355
======= ======= ======
Denominator--Diluted
Weighted-average common stock outstanding.......... 14,963 10,018 8,020
Effect of dilutive securities:
Stock options...................................... 845 647 1,047

------- ------- ------
15,808 10,665 9,067
======= ======= ======
Diluted income per share............................. $ 1.43 $ 1.08 $ .81
======= ======= ======

Stock options to purchase 199,535 shares of common stock at prices ranging
from $7.38 to $31.25 per share were outstanding at October 31, 1996, but were
not included in the computation of diluted income per share because the
exercise price was greater than the average market value of the common shares.
Convertible subordinated debt was not included in the computation of diluted
income per share because it would be anti-dilutive.

Stock options to purchase 13,525 shares of common stock at prices ranging
from $13.63 to $31.25 per share were outstanding at October 31, 1997, but were
not included in the computation of diluted i
ncome per share because the
exercise price was greater than the average market value of the common shares.
Convertible subordinated debt was not included in the computation of diluted
income per share because it would be anti-dilutive.

Stock options to purchase 7,000 shares of common stock at prices ranging
from $16.13 to $31.25 per share were outstanding at October 31, 1998, but were
not included in the computation of diluted income per share because the
exercise price was greater than the average market value of the common shares.
Convertible subordinated debt was not included in the computation of diluted
income per share because it would be anti-dilutive.

Industry Segment Information

The Company's single business segment, consulting, provides engineering and
architectural services to local and state governments, the Federal government,
the private sector and international businesses. The Company's services are
primarily utilized for planning, design and program and construction management

of infrastructure projects.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company's revenues from local, state and Federal government agencies,
private businesses and internationally for the last three fiscal years are as
follows:

Years Ended October 31,
----------------------------------------
1998 1997 1996
------------ ------------ ------------
(In thousands)

Domestic:
Local and state agencies......... $346,072 43% $255,423 63% $198,472 56%
Federal agencies................. 116,340 14 67,042 17 64,226 33
Private businesses............... 288,067 36 83,986 20 42,772 11
International...................... 55,467 7 -- -- -- --
-------- --- -------- --- -------- ---
Total............................ $805,946 100% $406,451 100% $305,470 100%
======== === ======== === ======== ===

Adoption of Statements of Financial Accounting Standards

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131"), which is
effective for fiscal years beginning after December 15, 1997. In the initial
year of application, comparative information for earlier years is to be
restated
. SFAS 131 need not be applied to interim financial statements in the
initial year of its application, but comparative information for interim
periods in the initial year of application is to be reported in financial
statements for interim periods in the second year of application. The Company
will adopt SFAS 131 effective for its fiscal year beginning November 1, 1998.
SFAS 131 requires that a public business enterprise report financial and
descriptive information about its reportable operating segments. Operating
segments are components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. Generally, financial information is required to be reported on
the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The Company does not expect
that adoption of SFAS 131 will have a material adver
se effect on its financial
position or results of operations.

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
instruments, including derivative instruments that are embedded in other
contracts, and for hedging activities. SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999. The Company will
adopt SFAS 133 effective for its fiscal quarter and year ending October 31,
1999. The Company does not believe that adoption of SFAS 133 will have a
material adverse effect on its financial position or results of operations.

Reclassifications

Certain reclassifications have been made to the 1996 and 1997 financial
statements to conform to the 1998 presentation with no effect on net income as
previously reported.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 2. QUASI-REORGANIZATION

In conjunction with a restructuring completed in fiscal year 1990, the
Company, with the approval of its Board of Directors, implemented a quasi-
reorganization effective February 21, 1990 and revalued certain assets and
liabilities to fair value as of that date.

The fair values of the Company's assets and liabilities at the date of the
quasi-reorganization were determined by management to approximate their
carrying value and no further adjustment of historical bases was required. No
assets were written-up in conjunction with the revaluation. As part of the
quasi-reorganization, the deficit
in retained earnings of $92.5 million was
eliminated against additional paid-in capital. The balance in retained earnings
at October 31, 1998, represents the accumulated net earnings subsequent to the
date of the quasi-reorganization.

NOTE 3. ACQUISITIONS

During the year ended October 31, 1996, the Company acquired Greiner for an
aggregate purchase price of $78.8 million, comprising cash and debt of $69.3
million and 1.4 million shares of the Company's common stock. The acquisition
has been accounted for by the purchase method of accounting and the excess of
the fair value of the net assets acquired over the purchase price has been
allocated to goodwill. The operating results of Greiner are included in the
Company's results of operations from the date of purchase.

The purchase price consisted of:

(In thousands)

Cash paid...............
.................................. $ 19,321
Term debt................................................. 50,000
Common stock.............................................. 9,463
--------
$ 78,784
========
The purchase price of Greiner (net of prepaid loan fees of
$1.6 million)............................................ $ 77,184
Fair value of assets acquired............................. (39,510)
--------
Excess purchase price over net assets acquired
(goodwill)............................................... $ 37,674
========

During the year ended October 31, 1998, the Company acquired W-C for a
n
aggregate purchase price of $132.4 million, comprising cash of $39.2 million,
assumption of debt, and 4 million shares of the Company's common stock.

The acquisition has been accounted for by the purchase method of accounting
and the excess of the fair value of the net assets acquired over the purchase
price has been allocated to goodwill. The operating results of W-C are included
in the Company's results of operations from the date of purchase.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The purchase price consisted of:

(In thousands)

Cash paid................................................. $ 39,232
Term debt................................................. 31,198
Common stock.............................................. 61,936
--------
$132,366

========
The purchase price of W-C (net of prepaid loan fees of $4
million)................................................. $128,366
Fair value of assets acquired............................. (36,194)
--------
Excess purchase price over net assets acquired
(goodwill)............................................... $ 92,172
========

The following unaudited pro forma summary presents the consolidated results
of operations as if the W-C acquisition had occurred at the beginning of fiscal
year end October 31, 1997, and does not purport to indicate what would have
occurred had the acquisition been made as of that date or of results which may
occur in the future.

Fiscal Year Ended October 31:

1997

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

Revenues............................. $753,430
Net income........................... $ 16,211
Net income per share................. $ 1.09

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

October 31,
------------------
1998 1997
-------- --------
(In thousands)

Equipment.............................................. $ 55,628 $ 29,871
Furniture and fixtures................................. 17,417 5,335
Leasehold improvements................................. 7,773 2,249
-------- --------
80,818 37,455
Less: accumulated depreciation and amortization........ (51,301) (19,607)
-------- --------
Net property and equipment............................. $ 29,517 $ 17,848
======== ========

NOTE 5. GOODWILL

Goodwill represents the excess of the purchase price over the fair value of
the net tangible assets of various operations acquired by the Company.
Accumulated amortization at October 31, 1998 and 1997, was $14.8 million and
$9.7 million, respectively. Goodwill is amortized on the straight-line method
over 30 years.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6. INCOME TAXES

The components of income tax expense applicable to the operations each year
are as follows:

Years Ended October 31,
------------------------
1998 1997 1996
------- ------- -------
(In thousands)

Current:
Federal........
.................................. $11,170 $ 7,580 $ 5,020
State and local.................................. 1,920 1,860 1,560
Foreign.......................................... 220 -- --
------- ------- -------
Subtotal....................................... 13,310 9,440 6,580
------- ------- -------
Deferred:
Federal.......................................... 5,320 (1,450) (1,320)
State and local.................................. 170 (290) (560)
------- ------- -------
Subtotal....................................... 5,490 (1,740) (1,880)
------- ------- -------
Total tax provision................................ $18,800 $ 7,700 $ 4,700
======= =
====== =======

As of October 31, 1998, the Company has available net operating loss
("NOL") carryforwards for Federal income tax and financial statement purposes
of $4.6 million. The Company's NOL utilization is limited to $750,000 per year
pursuant to section 382 of the Internal Revenue Code, related to the Company's
October 1989 quasi-reorganization. The Company also has available $7.8 million
of foreign NOLs. These NOLs are available only to offset income earned in
foreign jurisdictions.

While the Company had available NOL carryforwards which partially offset
otherwise taxable income for Federal income tax purposes, for state tax
purposes such amounts are not necessarily available to offset income subject
to tax.

The significant components of the Company's deferred tax assets and
liabilities as of October 31 are as follows:

Deferred tax assets/(liabilities)--due to:

1998 1997

-------- -------
(In thousands)

Allowance for doubtful accounts........................... $ 861 $ 400
Other accruals and reserves............................... 14,425 6,620
Net operating loss........................................ 4,330 1,840
-------- -------
Total..................................................... 19,616 8,860
Valuation allowance....................................... (4,330) (2,460)
-------- -------
Deferred tax asset........................................ 15,286 6,400
-------- -------
Accrual to cash........................................... (4,384)
--
Revenue retentions........................................ (3,614) --
Acquisition liabilities................................... (3,097) --
Other..................................................... (5,436) --
Deferred gain and unamortized bond premium................ (1,269) (1,447)
Mark to market............................................ (2,645) --
Depreciation and amortization............................. (218) (1,110)
-------- -------
Deferred tax liability.................................... (20,663) (2,557)
-------- -------
Net deferred tax asset/(liability)........................ $ (5,377) $ 3,843
======== =======

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The net change in the total valuation allowance for the year ended October
31, 1998 was a decrease of $260,000 due to the utilization of net operating
losses and an increase of $2.1 million resulting from the W-C acquisition.

The difference between total tax expense and the amount computed by applying
the statutory Federal income tax rate to income before taxes is as follows:

Years Ended October 31,
-----------------------
1998 1997 199
6
------- ------ ------
(In thousands)

Federal income tax expense based upon Federal
statutory tax rate of 35%....................... $14,520 $6,720 $4,100
Nondeductible goodwill amortization.............. 1,460 620 400
Nondeductible expenses........................... 830 480 240
NOL carryforwards utilized....................... (260) (260) (250)
State taxes, net of Federal benefit.............. 1,890 1,120 660
Adjustment due to change in Federal and state
rates........................................... (420) (610) --
Utilization of deferred tax allowance and other
adjustments..................................... 780 (370) (450)
------- ------ ------
Total taxes provided......
....................... $18,800 $7,700 $4,700
======= ====== ======

NOTE 7. RELATED PARTY TRANSACTIONS

Interest paid to related parties was $131,068 and $260,712 in fiscal 1997
and 1996, respectively. See Note 8, Notes Payable and Long-Term Debt.

The Company has agreements for business consulting services to be provided
by Richard C. Blum & Associates, Inc. ("RCBA") and Richard C. Blum, a Director
of the Company. Under these agreements, the Company paid $90,000 and $60,000 to
RCBA and Richard C. Blum, respectively, during each of fiscal 1998, 1997 and
1996. Richard C. Blum also received an additional cash amount of $21,500,
$15,000 and $23,000 for his services as a Director of the Company in fiscal
1998, 1997 and 1996, respectively.

NOTE 8. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable to banks consist of the following:

October 31,

--------------
1998 1997
--------------
(In thousands)

Foreign collateralized lines of credit........................ $920 $ --
====== =======

The Company maintains two foreign lines of credit which are collateralized
by assets of foreign subsidiaries having a carrying value of approximately $4.7
million at October 31, 1998. The interest rates for both of the foreign lines
of credit was the prime commercial rate plus .75% consistent with market
conditions in the respective countries at October 31, 1998. The approximate
weighted average interest rates on the foreign lines of credit ra
nged from
7.38% to 9.75% at October 31, 1998.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Long-term debt consists of the following:

October 31,
----------------
1998 1997
-------- -------
(In thousands)

Third party:
Bank term loan, payable in quarterly installments.......... $ 97,778 $35,65
5
6 1/2% Convertible Subordinated Debentures due 2012 (net of
bond issue costs of $34 and $36).......................... 2,003 2,108
8 5/8% Senior Subordinated Debentures due 2004 (net of
discount and bond issue costs of $3,162 and $3,437)
(effective interest rate on date of restructuring was
25%)...................................................... 3,293 3,018
10.95% note payable, due in annual installments through
2001 (net of issue costs of $52).......................... 1,951 --
Obligations under capital leases........................... 10,071 7,268
-------- -------
115,096 48,049
Less:
Current maturities of long-term debt..................... 16,501 4,775
Current maturities of notes payable...................... 599 --
Current maturities of capital leases..................... 3
,039 1,826
-------- -------
$ 94,957 $41,448
======== =======

At October 31, 1998, the Company's senior secured revolving credit facility
with Wells Fargo Bank, N.A. (the "Bank") provides for advances up to $40
million and expires October 31, 2003. Borrowings on the revolving credit
facility bear interest at the option of the Company based on rate indexes
selected by the Company, with variable spreads over the selected index based on
loan maturity and the Company's financial performance. At October 31, 1998, the
interest rate was based on the London Interbank Offered Rate ("LIBOR") of
5.97%, plus a spread of 1.395%. At October 31, 1998, the Company had
outstanding letters of credit totaling $3 million which reduced the amount
available to the Company under its revolving credit facility to $37 million
.

Also at October 31, 1998, the Company had outstanding with the Bank $97.8
million of senior secured term loans payable over seven years beginning October
1997. The loans bear interest based on rate indexes selected by the Company,
with variable spreads over the selected index based on loan maturity and the
Company's financial performance. At October 31, 1998, the interest rate was
based on the LIBOR of 5.97%, plus a spread of 1.375%.

Related Parties

On February 12, 1997, the Bank exercised the 435,562 warrants held by the
Bank at $4.34 per share, resulting in the issuance of an additional 435,562
shares to the Bank and an additional paid-in capital of approximately $1.9
million.

On February 14, 1997, various partnerships managed by RCBA exercised
1,383,586 warrants held by such entities at $4.34 per share. The exercise price
of these warrants was paid by a combination $2 million of cash and the
cancellation of the $3 million amount of debt drawn under the Company's line of
credit with
certain RCBA entities. The exercise resulted in the issuance of an
additional 1,383,586 shares to the RCBA entities. These equity transactions are
reflected in the Company's financial statements.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Debentures

The Company's 6 1/2% Convertible Subordinated Debentures due 2012 are
convertible into the Company's common shares at the rate of $206.30 per share.
Sinking fund payments calculated to retire 70% of the debentures prior to
maturity began in February 1998. Interest is payable semiannually in February
and August. Interest is payable semiannually in January and July on the
Company's 8 5/8% Senior Subordinated Debentures due 2004 ("8 5/8% Debentures").
Both the 6 1/2% Convertible Subordinated Debentures and the 8 5/8% Debentures
are subordinate to all debt to the Bank.

Maturities

The amounts of long-term debt
outstanding at October 31, 1998, maturing in
the next five years are as follows:

(In thousands)

1999........................................................ $17,101
2000........................................................ 17,114
2001........................................................ 17,239
2002........................................................ 16,501
2003........................................................ 16,501
Thereafter.................................................. 20,569

Amounts payable under capitalized lease agreements are excluded from the
above table.

NOTE 9. OBLIGATIONS UNDER LEASES

Total rental expense included in operations for operating leases for the
fiscal years ended October 31, 1998, 1997 and 1996, amounted to $30.6 million,
$14.9 million
and $10.9 million, respectively. Certain of the lease rentals are
subject to renewal options and escalation based upon property taxes and
operating expenses. These operating lease agreements expire at varying dates
through 2007.

Obligations under noncancelable lease agreements are as follows:

Capital Operating
Leases Leases
------- ---------
(In thousands)

1999..................................................... $ 3,239 $22,443
2000..................................................... 2,561 19,455
2001..................................................... 2,315 14,767
2002.....................................................
1,445 10,341
2003..................................................... 511 6,769
Thereafter............................................... -- 10,718
------- -------
Total minimum lease payments............................. $10,071 $84,493
=======
Less amounts representing interest....................... 1,978
-------
Present value of net minimum lease payments.............. $ 8,093
=======

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 10. COMMITMENTS AND CONTINGENCIES

Currently, the Company has $51 million per occurrence and $52 million
aggregate commercial general liability insurance coverage. The Company is also
insured for professional errors and omissions ("E&O") and contractor pollution
liability ("CPL") claims with an aggregate limit of $50 million after a self-
insured retention of $.5 million. The E&O and CPL coverages are on a "claims
made" basis, covering only claims actually made during the policy period
currently in effect. Thus, if the Company does not continue to maintain this
policy, it will have no coverage under the policy for c
laims made after its
termination date even if the occurrence was during the term of coverage. It is
the Company's intent to maintain this type of coverage, but there can be no
assurance that the Company can maintain its existing coverage, that claims will
not exceed the amount of insurance coverage or that there will not be claims
relating to prior periods that were subject only to "claims made" coverage.

Various legal proceedings are pending against the Company or its
subsidiaries alleging breaches of contract or negligence in connection with the
performance of professional services. In some actions punitive or treble
damages are sought which substantially exceed the Company's insurance coverage.
The Company's management does not believe that any of such proceedings will
have a material adverse effect on the consolidated financial position and
operations of the Company.

NOTE 11. STOCKHOLDERS' EQUITY

Declaration of dividends, except common stock dividends, is restricted by
the senior secured
credit facility with the Bank and the Indenture governing
the 8 5/8% Debentures. Further, declaration of dividends may be precluded by
existing Delaware law.

On March 26, 1991, the stockholders approved the 1991 Stock Incentive Plan
("1991 Plan"). The 1991 Plan provides for the grant not to exceed 3,250,000
Restricted Shares, Stock Units and Options. As of October 31, 1998, the Company
had issued 96,200 shares of Restricted Stock under the 1991 Plan.

Under the Employee Stock Purchase Plan ("ESP Plan") implemented in September
1985, employees may purchase shares of common stock through payroll deductions
of up to 10% of the employee's base pay. Contributions are credited to each
participant's account on the last day of each six-month participation period of
the ESP Plan (which commences on January 1 and July 1 of each year). The
purchase price for each share of common stock shall be the lower of 85% of the
fair market value of such share on the last trading day before the
participation period co
mmences or 85% of the fair market value of such share on
the last trading day in the participation period. Employees purchased 209,482
shares under the ESP Plan in fiscal 1998 and 140,469 shares in fiscal 1997.

The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its 1991 Plan.
Accordingly, no compensation cost has been recognized for its 1991 Plan. Had
compensation cost for the Company's 1991 Plan been determined

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
consistent with SFAS Statement No. 123, "Accounting for Stock-Based
Compensation," the Company's net income and earnings per share would have been
reduced to the pro forma amounts indicated below:

Years Ended October 31,
--------------------------------------
1998 1997 1996
------------ ------------ ------------
(In thousands, except per share data)

Net income:
As reported........................... $ 22,667 $ 11,505 $ 7,355
Pro forma............................. 22,343 11,237 7,223
Basic earnings per share:
As reported........................... 1.51 1.15 .92
Pro forma............................. 1.49 1.04 .81
Dilutive earnings per share:
As reported........................... 1.43 1.08 .81
Pro forma............................. 1.41 1.04 .78

A summary of the status of the stock options granted under the Company's
1991 Plan for the years ended October 31, 1998, 1997, and 1996, is presented
below:

1998 1997 1996
--------------------- --------------------- ---------------------
Weighted-
Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
---------- --------- ---------- --------- ---------- ---------

Outstanding at beginning
of year................ 1,508,280 $ 7.70 1,382,434 $ 6.64 1,160,900 $6.61
Granted................. 644,500 14.63 280,000 10.63 242,900 6.76
Exercised............... (98,356) 7.07 (138,287) 7.52 (2,000) 5.63
Forfeited............... (23,330) 14.40 (15,867) 7.68 (19,366) 6.89
---------- ---------- ----------
Outstanding at end of
year................... 2,031,094
11.12 1,508,280 7.70 1,382,434 6.64
========== ========== ==========
Options exercisable at
year-end............... 1,154,388 6.96 1,064,683 6.50 1,029,733 6.66
Weighted-average fair
value of options
granted during the
year................... $ 3.55 $ 3.30 $2.02

The following table summarizes information about stock options outstanding
at October 31, 1998:

Outstanding Exercisable
-------------------------------------------------------------- ----------------------------
Weighted-Average
Range of Number Remaining Weighted-Average Number Weighted-Average
Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
--------------- ----------- ---------------- ---------------- ----------
- - ----------------

$3.00-
$ 8.00 1,017,650 5.5 years $ 6.00 955,111 $5.94
$8.01-
$17.06 1,013,444 8.7 years 13.11 199,277 9.71
--------- ---------
2,031,094 1,154,388
========= =========

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The fair value of each option grant was estimated on the date of the grant
using the Black-Scholes option-pricing model with the following assumptions:

1998 1997 1996
------------- ------------- -------------

Risk-free interest rates.............. 4.43% - 5.79% 5.81% - 6.53% 5.46% - 6.53%
Expected life......................... 4 years 4 years 4 years
Volatility............................ 28.30% 24.73% 24.73%

Expected dividends.................... None None None

NOTE 12. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:

Years Ended October 31,
----------------------
1998 1997 1996
------- ------ -------
(In thousands)

Interest.................................................. $ 7,857 $5,181 $4,142
Income taxes.............................................. $18,398 $8,780 $6,483

In February 1997, RCBA exercised certain warrants. The exercise price of
these warrants was paid by a combination of $2 million of cash and the
cancellation
of $3 million of debt drawn under the Company's line of credit
with certain RCBA entities.

Equipment purchased through capital lease obligations was $12.2 million,
$4.3 million and $1.5 million for the years ended October 31, 1998, 1997 and
1996.

In March 1996, the Company acquired all of the capital stock of Greiner for
$78.8 million.

(In thousands)

Purchase price of Greiner (net of prepaid loan fees of
$1.6 million)........................................... $ 77,184
Fair value of assets acquired............................ (39,510)
--------
Excess purchase price over net assets acquired........... $ 37,674
========

In November 1997, the Company acquired all of the capit
al stock of W-C for
$132.4 million.

(In thousands)

Purchase price of W-C (net of prepaid loan fees of $4
million)................................................ $128,366
Fair value of assets acquired............................ (36,194)
--------
Excess purchase price over net assets acquired
(goodwill).............................................. $ 92,172
========

NOTE 13. DEFINED CONTRIBUTION PLAN

The Company has a defined contribution retirement plan under Internal
Revenue Code Section 401(k). The plan covers all full-time employees who are
at least 18 years of age. Contributions by the Company are made at the
discretion of the Board of Directors. Contributions in the amo
unt of $4.9
million, $2 million and $1.6 million were made to the plan in fiscal 1998,
1997 and 1996, respectively.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 14. VALUATION AND ALLOWANCE ACCOUNTS

Additions
Charged to Deductions
Beginning Costs and from Ending
Balance Expenses Reserves Balance
--------- ---------- ---------- -------
(In thousands)

October 31, 1998
Allowances for losses and doubtful
account
s............................. $3,326 $11,721 $ 945 $14,102
October 31, 1997
Allowances for losses and doubtful
accounts............................. $4,866 $ 995 $2,535 $ 3,326
October 31, 1996
Allowances for losses and doubtful
accounts............................. $1,270 $ 4,679 $1,083 $ 4,866

The allowance for losses and doubtful accounts increased significantly in
fiscal 1998 due to the acquisition of W-C.

NOTE 15. SELECTED QUARTERLY FINANCIAL DATA (unaudited)

Selected quarterly financial data for fiscal 1998 and 1997 is summarized as
follows:

Fiscal 1998 Quarters Ended
-----------------------------------
Jan. 31 Apr. 30 July 31 Oct. 31
-------- -------- -------- --------
(In thousands, except pe
r share
data)

Revenues................................... $186,156 $195,182 $207,484 $217,124
Operating income........................... 9,578 11,416 14,271 14,976
Net income................................. 4,169 4,943 6,389 7,166
======== ======== ======== ========
Income per share:
Basic.................................... $ .28 $ .33 $ .43 $ .47
======== ======== ======== ========
Diluted.................................. $ .27 $ .31 $ .40 $ .45
======== ======== ======== ========
Weighted-average number of shares.......... 15,632 15,723 15,970 15,961
======== ======== ======== ========

Fiscal 1997 Quarters Ended
---------------------------------
Jan. 31 Apr. 30 July 31 Oct. 31
------- ------- -------- --------
(In thousands, except per share
data)

Revenues..................................... $95,541 $99,759 $100,196 $110,955
Operating income............................. 5,081 5,458 6,280 7,188
Net income................................... 2,196 2,457 3,181 3,671
======= ======= ======== ========
Income per share:
Basic...................................... $ .26 $ .24 $ .30 $ .35
======= ======= ======== ========
Diluted.
................................... $ .25 $ .22 $ .28 $ .33
======= ======= ======== ========
Weighted-average number of shares............ 8,784 11,171 11,294 11,126
======= ======= ======== ========

Operating income represents income from operations before interest income
and expense.

URS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 16. SUPPLEMENTAL GUARANTOR INFORMATION

In June 1999, the Company completed a private placement of $200 million
principal amount of its Senior Subordinated Notes due 2009 (the "Notes") in
connection with its purchase of Dames & Moore Group. The Notes are fully and
unconditionally guaranteed on a joint and several basis by the Company's
wholly-owned domestic subsidiaries with gross revenues aggregating 90% or more
of the Company's and its domestic subsidiaries' aggregate gross revenues on a
consolidated basis, and if not otherwise included all of the Company's wholly-
owned subsidiaries with annual gross revenues of $5 mi
llion or more.
Substantially all of the Company's income and cash flow is generated by its
subsidiaries. As a result, funds necessary to meet the Company's debt service
obligations are provided in large part by distributions or advances from its
subsidiaries. Under certain circumstances, contractural and legal restrictions,
as well as the financial condition and operating requirements of the Company's
subsidiaries, could limit the Company's ability to obtain cash from its
subsidiaries for the purpose of meeting its debt service obligations, including
the payment of principal and interest on the Notes.

The following information sets forth the condensed consolidating balance
sheet of the Company as of October 31, 1998, and the condensed consolidating
statements of operations and cash flows for the year ended October 31, 1998. As
of and for the years ended October 31, 1997 and 1996 the Company did not have
material foreign operations; therefore, the subsidiary guarantor information
would not be relevan
t and no consolidating financial statements as of and for
the years then ended have been presented. Investments in subsidiaries are
accounted for on the equity method; accordingly, entries necessary to
consolidate the Company and all of its subsidiaries are reflected in the
eliminations column. Separate complete financial statements of the Company and
its subsidiaries that guarantee the Notes would not provide additional material
information that would be useful in assessing the financial composition of such
subsidiaries.

URS CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
(In thousands)

October 31, 1998
-----------------------------------------------
Parent and Subsidiary
Subsidiary Non
Guarantors Guarantors Eliminations Consolidated
---------- ---------- ------------ ------------
(unaudited)

ASSETS
Current assets:
Cash.....................
..... $ 33,487 $ 3,042 $ -- $ 36,529
Accounts receivable, net...... 150,190 11,552 -- 161,742
Costs and accrued earnings in
excess of billings on
contracts in process, net.... 73,557 4,324 -- 77,881
Prepaid expenses and other
assets....................... 9,802 231 -- 10,033
-------- ------- --------- --------
Total current assets......... 267,036 19,149 -- 286,185
Property and equipment, net.... 26,488 3,041 (12) 29,517
Goodwill, net.................. 129,748 (12) 12 129,748
Investment in unconsolidated
subsidiaries.................. 101,251 -- (101,251) --
Accounts receivable--
intercompany.................. 35,260 9,812 (45,072) --
Other assets................... 6,127 127 -- 6,254
-------- -------
- --------- --------
298,874 12,968 (146,323) 165,519
-------- ------- --------- --------
Total assets................. $565,910 $32,117 $(146,323) $451,704
======== ======= ========= ========

LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Long-term debt, current
portion...................... $ 17,423 $ 920 $ -- $ 18,343
Trade payables................ 35,606 1,630 -- 37,236
Intercompany payable.......... 23,950 26,713 (50,663) --
Billings in excess of costs
and accrued earnings on
contracts in process......... 34,438 1,017 -- 35,455
Accruals...................... 59,331 4,851 -- 64,182
-------- ------- --------- --------
Total current liabilities.... 170,748 35,131 (50,663) 155,216

Capital leases................. 12,327 1 -- 12,328
Long-term debt................. 82,629 -- -- 82,629
Other.......................... 34,877 294 -- 35,171
-------- ------- --------- --------
Total liabilities............ 300,581 35,426 (50,663) 285,344
Total stockholders' equity..... 265,329 (3,309) (95,660) 166,360
-------- ------- --------- --------
Total liabilities and
stockholders' equity........ $565,910 $32,117 $(146,323) $451,704
======== ======= ========= ========

URS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In thousands)

Year Ended October 31, 1998
-----------------------------------------------
Parent and Subsidiary
Subsidiary Non
Guarantors Guarantors Eliminations Consolidated
---------- ---------- ------------ ------------
(unaudited)

Revenues....................... $752,19
6 $55,467 $(1,717) $805,946
Expenses:
Direct operating............. 446,963 33,394 (1,717) 478,640
Indirect, general and
administrative.............. 243,317 19,192 -- 262,509
Depreciation and
amortization................ 13,647 909 -- 14,556
-------- ------- ------- --------
Operating income........... 48,269 1,972 -- 50,241
Interest expense, net........ 8,274 500 -- 8,774
-------- ------- ------- --------
Income before income taxes..... 39,995 1,472 -- 41,467
Income tax expense........... 18,447 353 -- 18,800
-------- ------- ------- --------
Net income (loss).......... $ 21,548 $ 1,119 $ -- $ 22,667
======== ======= ======= =
=======

URS CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In thousands)

Cash flows from operating
activities:
Net inc
ome................... $ 21,548 $1,119 $ -- $ 22,667
-------- ------- ------ --------
Adjustments to reconcile net
income to net cash provided
(used) by operating
activities:
Depreciation and
amortization................ 13,647 909 -- 14,556
Allowance for doubtful
accounts and losses......... (2,259) (92) -- (2,351)
Changes in current assets and
liabilities:
Accounts receivable and costs
and accrued earnings in
excess of billings on
contracts in process........ (16,528) (1,314) 4,882 (12,960)
Prepaid expenses and other
assets...................... (5,259) 600 (71) (4,730)
Accounts payable, accrued
salaries and wages and
accrued expenses............ 9,742 (362) (7,195) 2,185
Billings in excess of costs
and accrued earnings on
contracts in process........ (994) 1,017 -- 23
Deferred inco
me taxes and
other, net.................. 9,272 133 3,290 12,695
-------- ------- ------ --------
Total adjustments........... 7,621 891 906 9,418
-------- ------- ------ --------
Net cash provided (used) by
operating activities........ 29,169 2,010 906 32,085
-------- ------- ------ --------
Cash flows from investing
activities:
Payment for business
acquisition, net of cash
acquired.................... (36,937) -- -- (36,937)
Capital expenditures......... (11,696) (505) -- (12,201)
-------- ------- ------ --------
Net cash provided (used) by
investing activities........ (48,633) (505) -- (49,138)
-------- ------- ------ --------
Cash flows
from financing
activities:
Proceeds from issuance of
debt........................ 110,000 920 (920) 110,000
Principal payments on long-
term debt................... (83,149) (22) 14 (83,157)
Proceeds from sale of common
shares...................... 2,622 -- -- 2,622
Proceeds from exercise of
stock options............... 1,983 -- -- 1,983
-------- ------- ------ --------
Net cash provided (used) by
financing activities........ 31,456 898 (906) 31,448
-------- ------- ------ --------
Net increase (decrease) in
cash......................... 11,992 2,403 -- 14,395
Cash at beginning of year..... 21,495 639 -- 22,134
-------- ------- ------ --------
Cash at end of year........... $ 33,487 $ 3,04
2 $ -- $ 36,529
======== ======= ====== ========

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)(1) Consolidated Financial Statements and Supplementary Data.

Page of
This Report
-----------

Report of Independent Accountants................................... 4

Consolidated Balance Sheets
October 31, 1998 and October 31, 1997........................... 5

Consolidated Statements of Operations
For the years ended October 31, 1998, 1997 and 1996............. 6

Consolidated Statements of Changes in Stockholders' Equity
For the years ended October 31, 1998, 1997 and 1996............. 7

Consolidated Statements of Cash Flows
For the years ended October 31, 1998, 1997 and 1996............. 8

Notes to Consolidated Financial Statements.......................... 9

(a)(2), (d) Financial Schedules.

Schedules are omitted because they are not applicable, not required
or because the required information is included in the Consolidated
Financial Statements or Notes thereto.

(a)(3), (c) Exhibits.

Exhibit
- -------
Number Exhibit
- ------ -------
3.1 Certificate of Incorporation of URS Corporation, filed as Exhibit 3.1
to our Annual Report on Form 10-K for the fiscal year ended October
31, 1991 (the "1991 Form 10-K"), and incorporated herein by reference.

3.2 Bylaws of URS Corporation, filed as Exhibit 3.2 to our Annual Report
on Form 10-K for the fiscal year ended October 31, 1996 (the "1996
Form 10-K"), and incorporated herein by reference.

4.1 Indenture, dated as of February 15, 1987, between URS Corporation and
First Interstate Bank of California, Trustees, relating to $57.5
million of our 6 1/2% Convertible Subordinated Debentures Due 2012,
filed as Exhibit 4.10 to our Registration Statement on Form S-2
(Commission File No. 33-11668), and incorporated herein by reference.

- --------------------
* Previously filed.

Exhibit
- -------
Number Exhibit
- ------ -------

4.2 Amendment Number 1 to Indenture governing 6-1/2% Convertible
Subordinated Debentures due 2012, dated February 21, 1990, between URS
Corporation and First Interstate Bank of California, Trustee, filed as
Exhibit 4.9 to our Registration Statement on Form S-1 (Commission File
No. 33-56296) (the "1990 Form S-1"), and incorporated herein by
reference.

4.3 Indenture, dated as of March 16, 1989, between URS Corporation and
MTrust Corp., National Association, Trustee relating to our 8-5/8%
Senior Subordinated Debentures due 2004, filed as Exhibit 13C to our
Form T-3 under the Trust Indenture Act of 1939 (Commission File No.
22-19189), and incorporated herein by reference.

4.4 Amendment Number 1 to Indenture governing 8-5/8% Senior Subordinated
Debentures due 2004, dated as of April 7, 1989, filed as Exhibit 4.11
to the 1990 Form S-1 and incorporated herein by reference.

4.5 Amendment Number 2 to Indenture governing 8-5/8% Senior Subordinated
Debentures due 2004, dated February 21, 1990, between URS Corporation
and MTrust Corp. National Association, Trustee, filed as Exhibit 4.12
to the 1990 Form S-1 and incorporated herein by reference.

*10.1 Incentive Compensation Plan of URS Corporation, approved by the Board
of Directors on December 17, 1998, subject to the approval of our
stockholders.

10.2 1991 Stock Incentive Plan of URS Corporation, as amended effective
December 18, 1997, filed as Appendix A to our definitive proxy
statement for our 1998 Annual Meeting of Stockholders, filed with the
SEC on February 17, 1998 (the "1998 Proxy Statement"), and
incorporated herein by reference.

10.3 Employee Stock Purchase Plan of URS Corporation, as amended effective
December 18, 1997, filed as Appendix B to the 1998 Proxy Statement,
and incorporated herein by reference.

10.4 Non-Executive Directors Stock Grant Plan of URS Corporation, adopted
December 17, 1996, filed as Exhibit 10.5 to the 1996 Form 10-K and
incorporated herein by reference.

10.5 Selected Executive Deferred Compensation Plan of URS Corporation,
filed as Exhibit 10.3 to the 1990 Form S-1 and incorporated herein by
reference.

*10.6 1998 Incentive Compensation Plan of URS Corporation.

*10.7 1998 Incentive Compensation Plan of URS Greiner.

*10.8 1998 Incentive Compensation Plan of Woodward-Clyde.

10.9 Non-Executive Directors Stock Grant Plan, as amended, filed as Exhibit
10.1 to the Form 10-Q for the quarter ended January 31, 1998, and
incorporated herein by reference.

- ---------------------
* Previously filed.

Exhibit
- -------
Number Exhibit
- ------ -------

10.10 Stock Appreciation Rights Agreement, dated July 18, 1989, between URS
Corporation and Irwin L. Rosenstein, filed as Exhibit 10.13 to the
1990 Form S-1 and incorporated herein by reference.

10.11 Stock Appreciation Rights Agreement, dated October 9, 1989, between
URS Corporation and Martin M. Koffel, filed as Exhibit 10.15 to the
1990 Form S-1 and incorporated herein by reference.

*10.12 Contingent Restricted Stock Award Agreement dated as of December 16,
1997 between URS Corporation and Martin M. Koffel.

*10.13 Contingent Restricted Stock Award Agreement dated as of December 16,
1997 between URS Corporation and Kent P. Ainsworth.

10.14 Employment Agreement, dated December 16, 1991, between URS Corporation
and Martin M. Koffel, filed as Exhibit 10.13 to the 1991 Form 10-K and
incorporated herein by reference.

10.15 Employment Agreement, dated May 7, 1991, between URS Corporation and
Kent P. Ainsworth, filed as Exhibit 10.16 to the 1991 Form 10-K and
incorporated herein by reference.

10.16 Employment Agreement, dated August 1, 1991, between URS Consultants,
Inc. and Irwin L. Rosenstein, filed as Exhibit 10.12 to the 1991 Form
10-K and incorporated herein by reference.

10.17 Employment Agreement, dated March 29, 1996, between Greiner, Inc. and
Robert L. Costello, filed as Exhibit 10.1 to the Form 10-Q for the
quarter ended April 30, 1996 and incorporated herein by reference.

10.18 Employment Agreement, dated November 1, 1997, between Woodward-Clyde
Group, Inc. and Jean-Yves Perez, filed as Exhibit 10.1 to the Form 10-
Q for the quarter ended April 30, 1998, and incorporated herein by
reference.

*10.19 Employment Agreement, dated as of March 20, 1998, between URS
Corporation and Joseph Masters.

10.20 Amendment to Employment Agreement, dated October 11, 1994, between URS
Consultants, Inc., and Irwin L. Rosenstein, filed as Exhibit 10.12(a)
to our Annual Report on Form 10-K for the fiscal year ended
October 31, 1994, and incorporated herein by reference.

*10.21 Amendment to Employment Agreement dated as of October 13, 1998 between
URS Corporation and Martin M. Koffel.

*10.22 Form of Amendment to Employment Agreement dated as of October 13, 1998
between URS Corporation, URS Greiner Woodward-Clyde Consultants,
Inc., or URS Greiner Woodward-Clyde, Inc. and each of Kent P.
Ainsworth, Joseph Masters, Martin Tanzer, Irwin L. Rosenstein, Robert
Costello and Jean-Yves Perez.

- -----------------------
* Previously filed.

Exhibit
- -------
Number Exhibit
- ------ -------

10.23 Letter Agreement, dated February 14, 1990, between URS Corporation and
Richard C. Blum, filed as Exhibit 10.31 to the 1990 Form S-1 and
incorporated herein by reference.

10.24 Letter Agreement, dated February 14, 1990, between URS Corporation and
Richard C. Blum & Associates, Inc., filed as Exhibit 10.32 to the 1990
Form S-1 and incorporated herein by reference.

10.25 Registration Rights Agreement, dated February 21, 1990, among URS
Corporation, Wells Fargo Bank, N.A. and the Purchaser Holders named
therein, filed as Exhibit 10.33 to the 1990 Form S-1 and incorporated
herein by reference.

10.26 Post-Affiliation Agreement, dated July 19, 1989, between URS
Corporation and URS International, Inc., filed as Exhibit 10.42 to
our Annual Report on Form 10-K for the fiscal year ended October
31, 1989 and incorporated herein by reference.

10.27 Form of Indemnification Agreement filed as Exhibit 10.34 to our Annual
Report on Form 10-K for the fiscal year ended October 31, 1992 and
incorporated herein by reference; dated as of May 1, 1992 between URS
Corporation and each of Messrs. Ainsworth, Blum, Koffel, Madden,
Praeger, Rosenstein and Walsh; dated as of March 22, 1994 between URS
Corporation and each of Admiral Foley and Mr. Der Marderosian; dated
as of March 29, 1996 between URS Corporation and Mr. Costello; dated
as of November 6, 1996 between URS Corporation and Mr. Glynn; dated as
of January 20, 1997 between URS Corporation and Mr. Masters; and dated
as of November 17, 1997 between URS Corporation and Mr. Perez.

10.28 Agreement and Plan of Merger dated August 18, 1997, by and among URS
Corporation, Woodward-Clyde Group, Inc. and W-C Acquisition
Corporation, filed as Exhibit 2.1 to our Current Report on Form 8-K
filed on August 21, 1997 and incorporated herein by reference.

10.29 Credit Agreement, dated as of November 14, 1997, between URS
Corporation, the Financial Institutions listed therein as Lenders and
Wells Fargo Bank, National Association, as Administrative Agent for
the Lenders, filed as Exhibit 2.2 to our Current Report on Form 8-K
filed on November 26, 1997, and incorporated herein by reference.

12.1 Computation of Ratio of Earnings to Fixed Charges and Combined Fixed
Charges.

*21.1 Subsidiaries of URS Corporation.

23.1 Consent of PricewaterhouseCoopers LLP.

*24.1 Powers of Attorney of directors and officers of URS Corporation.

*27 Financial Data Schedule (electronic format only).

- -----------------------------
* Previously filed.

(b) Reports on Form 8-K.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, URS Corporation, the Registrant, has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

URS CORPORATION
(Registrant)

By: /s/ Kent P. Ainsworth
----------------------------
Kent P. Ainsworth
Executive Vice President and
Chief Financial Officer

Da
ted: August 4, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the date indicated.

Signature Title Date
--------- ----- ----

/s/ Martin M. Koffel* Chairman of the Board of Directors August 4, 1999
- -------------------------- and Chief Executive Officer
Martin M. Koffel (Principal Executive Officer)

/s/ Kent P. Ainsworth
- -------------------------- Executive Vice President, Chief August 4, 1999
Kent P. Ainsworth Financial Officer and Secretary
(Principal Accounting Officer)

/s/ Irwin P. Rosenstein* Director August 4, 1999
- -------------------------
- -
Irwin P. Rosenstein

/s/ Richard C. Blum* Director August 4, 1999
- --------------------------
Richard C. Blum

/s/ Richard Q. Praeger* Director August 4, 1999
- --------------------------
Richard Q. Praeger

/s/ William D. Walsh* Director August 4, 1999
- --------------------------
William D. Walsh

/s/ Richard B. Madden* Director August 4, 1999
- --------------------------
Richard B. Madden

/s/ Armen Der Marderosian* Director August 4, 1999
- --------------------------
Armen Der Marderosian

/s/ S. Robert Foley* Director August 4, 1999
- --------------------------
Adm. S. Robert Foley, Jr.,
USN (Ret.)

/s/ Jean-Yves Perez* Director August 4, 1999
- --------------------------
Jean-Yves Perez

* By:
/s/ Kent P. Ainsworth
- -----------------------------------
Kent P. Ainsworth, Attorney-in-fact

EXHIBIT INDEX

Exhibit
- -------
Number Exhibit
- ------ -------

3.1 Certificate of Incorporation of URS Corporation, filed as Exhibit 3.1
to our Annual Report on Form 10-K for the fiscal year ended October
31, 1991 (the "1991 Form 10-K"), and incorporated herein by reference.

3.2 Bylaws of URS Corporation, filed as Exhibit 3.2 to our Annual Report
on Form 10-K for the fiscal year ended October 31, 1996 (the "1996
Form 10-K"), and incorporated herein by reference.

*10.1 Incentive Compensation Plan of URS Corporation, approved by the Board
of Directors on December 17, 1998, subject to the approval of our
stockholders.

10.3 Employee Stock Purchase Plan of URS Corporation, as amended effective
December 18, 1997, filed as Appendix B to the 1998 Proxy Statement,
and incorporated herein by reference.

- --------------------------
* Previously filed.