HIL Notes:

WMB Report 8/11/08

• Q2 EPS $0.09 down 6% from last year – in line with consensus

  • Without income tax charge would have been $0.03 higher

• Robust demand for construction in middle east

• Expansion efforts into North Africa

• Strong demand for construction consulting services

• Organic revenue growth up 40%

• Backlog (12 months) up 101% y/y – also large contracts announced in July – Backlog is $606 million

• Several joint ventures not yet contributing to backlog

• Advanced discussions with 3 potential acquisition candidates (mid-sized firms)

• 2008 and 2009 estimates at $0.55 and $0.70

  • Assumes organic revenue growth decelerates to 26% (end of 2008) and 24% for 2009

• Q2 revenue $82m up 69% (above estimates)

  • Driven by 88% growth in project management and 33% growth in construction claims

  • Management set growth target at 25% for project management and 10% for construction claims (likely conservative)

• Significant revenue from Iraq construction projects but declining as % of revenue (other businesses are growing)

• Organic growth in Americas relatively low due to macro-economic issues

• Shift towards more project management business has led to somewhat weaker margins

*Construction claims business segment provides claims consulting, litigation support, expert witness testimony, cost and damage assessment, etc.