URS Corporation is an integrated engineering, construction, and technical services company that operates in nearly 50 countries. According to the company Web site, URS offers program management, planning, design and engineering; systems engineering and technical assistance; construction and construction management; operations and maintenance; and decommissioning services. In 2010, revenues totaled $9,177.1 million with net income of $287.0 million. In 2011, revenues increased slightly to $9,545.0 million, but URS had a net loss of $465.8 million, due primarily to an impairment of goodwill of $825.8 million.
1. URS’s 2010 balance sheet showed goodwill of $3,393.2 million out of total assets of $7,351.4 million and its 2011 balance sheet showed goodwill of $2,773.0 million out of total assets of $6,862.6 million. Express goodwill as a percentage of total assets for each year, and indicate what that suggests about the company’s growth.
2. From the information provided, can you determine whether URS engaged in any new acquisitions in 2011?
3. What happened to the excess earnings capacity of URS during 2011? How is this reflected in the company’s income statement and balance sheet?