URS Corporation (NYSE:URS) today announced that its Board of Directors, after consideration of the Company’s expected cash flows and the best interests of the Company’s stockholders, has approved capital allocation priorities for 2014 and 2015.
The priorities approved by the Board include returning to URS stockholders at least $500 million in the form of share repurchases and dividends by the end of Fiscal Year 2015. The share repurchases and dividends are expected to be funded by the Company’s free cash flow. URS expects to use its remaining cash flow to fund organic growth and to pay down debt, consistent with the Company’s focus on maintaining its investment grade credit rating, which is critical to its ongoing operations and ability to achieve organic growth opportunities. With the strong and diversified business foundation built through previous acquisitions now in place, the Company does not expect to seek or undertake any financially significant acquisitions during this period. The timing and amount of share repurchases will be determined by the Company’s management based on its evaluation of market conditions, trading price of the stock, legal and regulatory requirements, and other factors.
The Company also announced that the Compensation Committee of the Board is in the process of redesigning the Company’s incentive compensation programs for its senior executives to further align their performance incentives with the capital allocation priorities.
Martin M. Koffel, URS’ Chairman and Chief Executive Officer, said: “Today’s announcement underscores our confidence in the Company’s strategy and long-term business outlook as well as our commitment to delivering value for our stockholders. We now have leading positions in a diversified group of attractive businesses and markets. With our investment-grade status and significant organic growth opportunities, particularly in the expanding Oil & Gas and Industrial markets, URS is well configured for the future, without any need for further significant acquisitions.”