General

The purpose of this Management's Discussion and Analysis ("MD&A") is to provide a narrative analysis explaining the reasons for material changes in the Company's (i) financial condition since the most recent fiscal year-end, and
(ii) results of operations during the current fiscal quarter as compared to the corresponding periods of the preceding fiscal year. In order to better understand such changes, readers of this MD&A should also read:

• The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements (the most current discussion of our critical accounting policies appears on pages 34 through 36 of our 2008 Annual Report on Form 10-K (the "2008 Form 10-K"), and the most current discussion of our significant accounting policies appears on pages F-7 through F-13 of our 2008 Form 10-K);

• The Company's fiscal 2008 audited consolidated financial statements and notes thereto included in its 2008 Form 10-K (beginning on page F-1 thereto); and

• Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2008 Form 10-K (beginning on page 33 thereto).

In addition to historical information, this MD&A may contain forward-looking statements that are not based on historical fact. When used herein, words such as "expects", "anticipates", "believes", "seeks", "estimates", "plans", "intends", and similar words identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management's current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Some of the factors that could cause or contribute to such differences are listed and discussed in Item 1A - Risk Factors, included in our 2008 Form 10-K (beginning on page 18 thereto). Other matters that may affect our future performance relative to management's current expectations are discussed in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2008 Form 10-K (beginning on page 33 thereto). The risk factors and other matters described therein and herein are not all-inclusive, and we undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors described in other documents we file from time to time with the United States Securities and Exchange Commission.

Results of Operations

Net earnings for the second quarter of fiscal 2009 ended March 31, 2009 totaled $109.3 million; this is $10.0 million, or 10.0%, higher than the amount for the second quarter of fiscal 2008 ended March 31, 2008. Diluted earnings per share for the second quarter of fiscal 2009 totaled $0.88; this is 10.0% higher than the amount for the corresponding period last year.

For the six months ended March 31, 2009, we recorded net earnings of $225.6 million; this is $28.0 million, or 14.1%, higher than the amount for the first six months of fiscal 2008 ended March 31, 2008. Included in net earnings for the six months ended March 31, 2008 was a one time-gain of $5.4 million, or $0.04 per diluted share, from the sale of the Company's interest in a company that provides specialized operations and maintenance services.

Total revenues for the quarter ended March 31, 2009 increased by $310.7 million, or 11.7%, to $3.0 billion compared to $2.7 billion for the second quarter of fiscal 2008. Total revenues for the six months ended March 31, 2009 increased by $1.1 billion, or 20.9%, to $6.2 billion compared to $5.1 billion for the corresponding period last year.

The following table sets forth our revenues by the various types of services we provide for the three and six months ended March 31, 2009 and 2008 (in thousands):

                                               For the Three Months Ended       For the Six Months Ended
                                                       March 31,                       March 31,
                                                  2009             2008            2009           2008
Project Services                             $     1,171,635    $ 1,293,003   $    2,477,660   $ 2,461,576
Construction                                       1,310,142        932,856        2,668,031     1,789,872
Operations and Maintenance ("O&M")                   273,215        253,613          619,737       542,385
Process, Scientific and Systems Consulting           220,460        185,322          442,677       342,778

                                             $     2,975,452    $ 2,664,794   $    6,208,105   $ 5,136,611

Project services revenues for the three months ended March 31, 2009 decreased $121.4 million, or 9.4%, to $1.2 billion compared to $1.3 billion for the corresponding period last year. This decrease in project services revenues is a result of a general slowing in our business and includes the effects of the project cancellations discussed in the Company's December 31, 2008 Form 10-Q. The principal industries contributing to the slowdown are the energy & refining-downstream, oil & gas-upstream, and chemicals and polymers industries. Project services revenues of $2.5 billion for the six months ended March 31, 2009 are substantially unchanged from the corresponding period last year. Project services, which include design services, preliminary and detailed engineering services; and architectural services, are more prominent in the earlier phases of projects - before the projects enter any construction phase. In general, we believe that the level of project services we provide clients is a precursor to opportunities to provide construction and, ultimately, maintenance services.

For the three and six months ended March 31, 2009, construction services revenues increased by 40.4% and 49.1%, respectively, compared to the corresponding periods last year. Construction services are increasing as we transition from the design and engineering phases into the construction phases of projects. These increases occurred primarily on projects for clients operating in the energy & refining-downstream industry.

For the three and six months ended March 31, 2009, revenues from O&M services increased 7.7% and 14.3%, respectively, as compared to the corresponding periods last year.

These increases relate primarily to higher O&M activities on projects for the United States federal government (particularly as it relates to government test facilities), and for our clients operating in the oil & gas-upstream, and chemicals and polymers industries.

For the three and six months ended March 31, 2009, revenues from process, scientific and systems consulting services increased 19.0% and 29.1%, respectively, as compared to the corresponding periods last year.

The following table sets forth our revenues by the industry groups and markets in which our clients operate for the three and six months ended March 31, 2009 and 2008 (in thousands):

                                               For the Three Months Ended       For the Six Months Ended
                                                       March 31,                       March 31,
                                                  2009             2008            2009           2008
Energy & Refining - Downstream               $     1,110,046    $   685,382   $    2,282,931   $ 1,420,226
National Government Programs                         597,686        474,294        1,186,217       891,713
Chemicals and Polymers                               291,886        370,710          629,334       713,814
Oil & Gas - Upstream                                 245,417        363,686          560,705       631,763
Infrastructure                                       239,095        260,383          490,813       479,477
Pharmaceuticals and Biotechnology                    203,848        241,833          454,839       462,978
Buildings                                            134,070        178,905          279,918       341,116
Industrial and Other                                 153,404         89,601          323,348       195,524

                                             $     2,975,452    $ 2,664,794   $    6,208,105   $ 5,136,611

For the three and six months ended March 31, 2009, revenues from clients operating in the energy & refining-downstream industries increased $424.7 million (or 62.0%) and $862.7 million (or 60.7%), respectively, as compared to the corresponding periods last year. Most of this growth related to refinery expansion projects.

For the three and six months ended March 31, 2009, revenues from national government programs increased $123.4 million (or 26.0%) and $294.5 million (or 33.0%), respectively, as compared to the corresponding periods last year. Most of the increase was attributable to higher revenues from the U.S. federal government on projects for research and development, and operations and maintenance in support of test engineering, scientific, and other technical services, combined with increased spending on national government building programs.

For the three and six months ended March 31, 2009, revenues from clients operating in the industrial and other markets increased $63.8 million (or 71.2%) and $127.8 million (or 65.4%), respectively, as compared to the corresponding periods last year. Most of the increase was attributable to higher revenues from clients operating in the mining and minerals industry.

We have experienced decreases in the other industry groups and markets that we serve. These decreases are principally the result of the current economic slowdown.

Direct costs of contracts for the three and six months ended March 31, 2009 increased $341.6 million (or 15.3%) and $1.1 billion (or 24.4%), respectively, as compared to the corresponding periods last year. The level of direct costs of contracts may fluctuate between reporting periods due to a variety of factors including the amount of pass-through costs we incur during a period. On those projects where we are responsible for subcontract labor or third-party materials and equipment, we reflect the amounts of such items in both revenues and costs (and we refer to such costs as "pass-through costs"). On other projects, where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not considered pass-through costs and are, therefore, not reflected in either revenues or costs. To the extent that we incur a significant amount of pass-through costs in a period, our direct cost of contracts are likely to increase as well.

For the three and six months ended March 31, 2009 pass-through costs increased $441.8 million and $956.3 million, respectively, as compared to the corresponding periods last year. In general, pass-through costs are more significant on projects that have a higher content of field services activities. Field services revenues for the three and six months ended March 31, 2009 increased $396.9 million, or 33.5%, and $955.5 million, or 41.0%, respectively, compared to the corresponding periods last year. Pass-through costs are generally incurred at a specific point in the lifecycle of a project and are highly dependent on the needs of our individual clients and the nature of the clients' projects. However, because we have hundreds of projects which start at various times within a fiscal year, the effect of pass-through costs on the level of direct costs of contracts can vary between fiscal years without there being a fundamental or significant change to the underlying business.

As a percentage of revenues, direct costs of contracts for the three and six months ended March 31, 2009 was 86.4% and 86.5%, respectively. This compares to 83.7% and 84.0%, respectively, for the three and six months ended March 31, 2008 (for the remainder of this MD&A, we refer to this percentage relationship as the "DC%"). The relationship between direct costs of contracts and revenues will fluctuate between reporting periods depending on a variety of factors including the mix of business during the reporting periods being compared as well as the level of margins earned from the various types of services provided. Generally speaking, the more procurement we do on behalf of our clients (i.e., where we purchase equipment and materials for use on projects, and/or procure subcontracts in connection with projects) and the more field services revenues we have relative to technical, professional services revenues, the higher the DC% will be. Because revenues from pass-through costs typically have lower margin rates associated with them, it is not unusual for us to experience an increase or decrease in such revenues without experiencing a corresponding increase or decrease in our gross margins and operating profit. The increase in the DC% for the three and six months ended March 31, 2009 as compared to the corresponding period last year was due primarily to higher construction services revenue, relative to project services, combined with the higher levels of pass-through costs discussed above.

Selling, general and administrative ("SG&A") expenses for the three and six months ended March 31, 2009 decreased $47.5 million (or 16.9%) and $37.9 million (or 7.2%), respectively, as compared to the corresponding periods last year. Our SG&A expenses typically fluctuate as a result of changes in head count and the spending required to support our technical professional services revenues, which typically require additional overhead costs. Therefore, when our technical professional services revenues increase or decrease, we typically see a corresponding change in SG&A expenses. Contributing to the decrease in SG&A expenses for the six months ended March 31, 2009 was tight control over SG&A costs and the effects of a strengthening U.S. dollar against those foreign currencies in which the Company has operations.

Miscellaneous expense, net for the six months ended March 31, 2009 was $4.3 million compared to miscellaneous income, net of $7.5 million for the corresponding period last year. Included in miscellaneous income for the six months ended March 31, 2008 was a $10.6 million gain from the sale, in the first quarter of fiscal 2008, of the Company's interest in a company that provides specialized operations and maintenance services.

Backlog Information

We include in backlog the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that have been awarded to us. Because of the nature, size, expected duration, funding commitments, and the scope of services required by our contracts, the timing of when backlog will be recognized as revenues can vary greatly between individual contracts. Our policy with respect to O&M contracts, however, is to include in backlog the amount of revenues we expect to receive for one succeeding year, regardless of the remaining life of the contract. For national government programs (other than national government O&M contracts), our policy is to include in backlog the full contract award, whether funded or unfunded, and exclude option periods.

In accordance with industry practice, substantially all of our contracts are subject to cancellation or termination at the option of the client. In a situation where a client terminates a contract, we typically are entitled to receive payment for work performed up to the date of termination and, in certain instances, we may be entitled to allowable termination and cancellation costs. While management uses all information available to it to determine backlog, our backlog at any given time is subject to changes in the scope of services to be provided as well as increases or decreases in costs relating to the contracts included therein.

Because certain contracts (for example, contracts relating to large engineering, procurement, and construction projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our contracts require us to provide services that span over a number of fiscal quarters (and sometimes over fiscal years), we evaluate our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.

The following table summarizes our backlog at March 31, 2009 and 2008 (in millions):

                                                   2009         2008
              Technical professional services   $  8,116.8   $  7,562.0
              Field services                       8,515.1      8,668.5

              Total                             $ 16,631.9   $ 16,230.5

Our backlog increased $401.4 million, or 2.5%, to $16.6 billion at March 31, 2009 from $16.2 billion at March 31, 2008. Backlog at March 31, 2009 includes major new awards from clients operating in many of the industry groups and markets we serve, and in particular the energy & refining - downstream, national government programs, and buildings.

Liquidity and Capital Resources

At March 31, 2009, our principal source of liquidity consisted of $772.7 million of cash and cash equivalents, and $265.0 million of available borrowing capacity under our $290.0 million, long-term, unsecured revolving credit facility. We finance as much of our operations and growth as possible through cash generated by our operations.

During the first half of fiscal 2009, our cash and cash equivalents increased by $168.2 million to $772.7 million at March 31, 2009. This compares to a net decrease in cash and cash equivalents of $220.8 million, to $392.5 million, during the corresponding period last year. During the six months ended March 31, 2009, we experienced net cash inflows of $201.1 million from operating activities. This inflow from operating activities was offset in part by net cash outflows of $17.1 million from investing activities, $15.4 million for the effects of exchange rate changes, and $0.3 million from financing activities.

Our operations provided net cash of $201.1 million during the six months ended March 31, 2009. This compares to net cash inflows of $6.4 million for the corresponding period last year. The $194.7 million increase in cash provided by operations for the six months ended March 31, 2009 as compared to the corresponding period last year was due primarily to the following factors:

• a $130.5 million increase relating to changes in our working capital accounts (discussed below);

• a $29.8 million increase relating to higher stock based compensation (including the related excess tax benefits);

• a $28.0 million increase in net earnings;

• a $3.8 million increase in depreciation and amortization of property, equipment and improvements; and,

• a $9.4 million change relating to sales of investments and other assets (the cash flows from which are reclassified to the investing section within our Consolidated Statements of Cash Flows).

These increases in cash flows from operations were offset in part by the following:

• a $6.1 million change in deferred income taxes; and,

• a $0.5 million decrease in the amortization of intangible assets.

With respect to the $130.5 million increase in cash flows relating to changes in our working capital accounts, there was no unusual activity occurring in these accounts during the six months ended March 31, 2009.

Because such a high percentage of our revenues are earned on cost-plus type contracts, and due to the significance of revenues relating to pass-through costs, most of the costs we incur are included in invoices we send to clients. Although we continually monitor our accounts receivable, we manage the operating cash flows of the Company by managing the working capital accounts in total, rather than by the individual elements. The primary elements of the Company's working capital accounts are accounts receivable, accounts payable, and billings in excess of cost. Accounts payable consists of obligations to third parties relating primarily to costs incurred for projects which are generally billable to clients. Accounts receivable consist of billings to our clients - a substantial portion of which is for project-related costs. Billings in excess of cost consist of billings to and payments from our clients for costs yet to be incurred.

This relationship between revenues and costs, and between receivables and payables is unique for our industry, and facilitates review at the total working capital level. The $130.5 million increase in cash flows relating to changes in our working capital accounts was due simply to the timing of cash receipts and payments within our working capital accounts and is not indicative of any known trend or fundamental change to the underlying business.

We used $17.1 million of cash and cash equivalents for investing activities during the six months ended March 31, 2009 compared to $264.2 million during the corresponding period last year. The $247.1 million decrease in cash used for investing activities for the six months ended March 31, 2009 as compared to the corresponding period last year was due primarily to a $229.8 million decrease in cash used for acquisitions of businesses (net of cash acquired), a $28.2 million change in other noncurrent assets, and a $8.4 million decrease in cash used to purchase property and equipment (net of disposals). These activities were offset in part by a $19.4 million change in investments, net (included in this change is $14.1 million of cash

received in connection with the sale of our interest in a company that provides specialized operations and maintenance services) during the first quarter of the previous fiscal year.

Our financing activities resulted in net cash outflows of $0.3 million during the six months ended March 31, 2009. This compares to net cash inflows of $30.8 million during the corresponding period last year. The $31.1 million net decrease in cash flows from financing activities during the six months ended March 31, 2009 as compared to the corresponding period last year was due primarily to a $28.4 million decrease in cash flows attributable to issuances of common stock (including the related excess tax benefits), and a $11.0 million increase in repayments of long-term borrowings. These decreases in cash flows were offset in part by a $6.7 million net increase in cash flows relating to our short-term borrowing activities and a $1.6 million change relating to our other, long-term liabilities.

We believe we have adequate liquidity and capital resources to fund our operations, support our acquisition strategy, and service our debt for the next twelve months. We had $772.7 million in cash and cash equivalents at March 31, 2009, compared to $604.4 million at September 30, 2008. Our consolidated working capital position at March 31, 2009 was $1.4 billion, an increase of $183.8 million from September 30, 2008. We have a long-term, unsecured, revolving credit facility providing up to $290.0 million of debt capacity, under which $25.0 million was utilized at March 31, 2009 in the form of direct borrowings. While our access to capital has not been severely affected by the credit crisis currently impacting global markets, we believe the full effect of the crisis may increase our borrowing costs in the future. We believe that the capacity, terms and conditions of our long-term revolving credit facility, combined with other committed and uncommitted facilities we have in place, are adequate for our working capital and general business requirements.