AECOM (NYSE:ACM), a premier, fully integrated global
infrastructure firm, today reported third quarter revenue increased
by 13% to $5.1 billion, which set a new quarterly all-time high.
Net income and diluted earnings per share were $61 million and
$0.37 in the third quarter, respectively. On an adjusted basis,
diluted earnings per share1 was $0.62.
($ in millions, except EPS)
As Reported
Adjusted (Non-GAAP)
Revenue $5,148 - Operating Income
$161 $2021 Net Income $61
$1011 EPS (Fully Diluted) $0.37
$0.621 Operating Cash Flow $72 -
Free Cash Flow - $482 Backlog $53,794 -
Third Quarter 2018 Accomplishments:
- Organic4 revenue increased by 10% over
the prior year, which marks the seventh consecutive quarter of
positive organic growth, led by the higher-margin DCS and MS
segments and growth in all three segments.
- Adjusted EBITDA of $223 million
increased by 15% year-over-year after adjusting for the large AECOM
Capital gain in the prior-year quarter; sequential adjusted EBITDA
growth of 11% was ahead of prior guidance for slight growth.
- Total backlog reached a new record of
$54 billion, a 16%3 increase over the prior year, which includes a
continued favorable mix shift to the higher-margin DCS and MS
segments.
- Wins of $9.4 billion also set a new
record, resulting in a 1.7x book-to-burn5 ratio, and included solid
performance across the business.
- Delivered positive free cash flow2 for
the 23rd time in the past 25 quarters, and total debt declined by
$69 million; cash flow was impacted due to working capital used to
support 13% revenue growth, primarily from increased storm recovery
work in the Americas.
Prioritizing Stock Repurchases to Create Shareholder
Value:
- AECOM plans to commence its share
repurchases ahead of its prior expectation by entering into a $150
million accelerated stock repurchase (ASR) once its trading window
opens on August 9th due to confidence in the strength of its
business and outlook for its markets.
- The Company continues to believe its
shares are undervalued and that repurchases represent a compelling
avenue to generate long-term value for both AECOM and its
shareholders.
- Upon completion of the ASR, the Company
intends to then deploy substantially all free cash flow towards
ongoing debt reduction and repurchases under its $1 billion Board
authorization.
- The Company reiterates its target net
leverage6 of 2.5x, which it expects to achieve through a
combination of ongoing debt reduction and EBITDA growth.
Strategic Decisions Update:
- On June 25th, the Company completed the
sale of its Canadian Industrial Services Division and expects to
complete the second non-core Oil & Gas business sale over the
next several months.
- Construction of the Alliant combined
cycle gas power plant remains on schedule and budget.
“Our record revenue and all-time high backlog are evidence that
our design, build, finance, and operate vision, along with our
leading scale and broad geographic reach, are resulting in a
differentiated competitive offering and strong performance,” said
Michael S. Burke, AECOM’s chairman and chief executive officer. “In
addition to our accomplishments in the quarter, we are off to a
strong start in the fourth quarter, including sizable wins that
increase our confidence in continued backlog growth. As a result,
we are moving forward with share repurchases under a $150 million
ASR, reflecting our industry-leading track record of superior cash
generation and the strong tailwinds driving our performance. We
believe buying our shares at current prices will create long-term
value for our shareholders.”
“Our strong third quarter results demonstrate the progress we
are making on our five-year financial plan through fiscal 2022 to
deliver a 5%+ revenue CAGR, 7%+ adjusted EBITDA CAGR, 12-15%
adjusted EPS CAGR, and at least $3.5 billion of cumulative free
cash flow,” said W. Troy Rudd, AECOM’s chief financial officer. “In
fact, we are already outperforming our revenue growth targets and,
after adjusting for the large AECOM Capital gain in the year-ago
period, our EBITDA growth is also outperforming. We are on track to
maximize shareholder value through our capital allocation
commitments.”
Wins and Backlog
Wins were $9.4 billion, which set a new record for the Company,
and resulted in a book-to-burn ratio5 of 1.7x. Wins were
highlighted by strength across the business, including a 6.6x
book-to-burn ratio in the MS segment. Total backlog increased by
16%3 over the prior-year period to $54 billion and continued to
reflect a favorable mix shift to the higher-margin DCS and MS
segments.
Business Segments
Design & Consulting Services
(DCS)
The DCS segment delivers planning, consulting, architectural and
engineering design services to commercial and government clients
worldwide in markets such as transportation, facilities,
environmental, energy, water and government.
Revenue in the third quarter was $2.1 billion. Constant-currency
organic4 revenue increased by 12% and included 17% growth in the
Americas, which was driven by strong growth in the Company’s
transportation and water markets, including accelerating work
related to storm recovery efforts following last year’s hurricane
season in the Southeastern U.S. and Caribbean.
Operating income was $120 million compared to $94 million in the
year-ago period. On an adjusted basis, operating income1 was $128
million compared to $104 million in the year-ago period.
Profitability in the Americas and APAC regions was strong, which
was partially offset by slower growth and reduced profitability in
the EMIA region.
Construction Services (CS)
The CS segment provides construction services for energy,
sports, commercial, industrial, and public and private
infrastructure clients.
Revenue in the third quarter was $2.1 billion. Constant-currency
organic4 revenue increased by 8%, led by double-digit growth in the
Building Construction business. This strength was partially offset
by a decline in the Power business due to the completion of a large
project and the Company’s decision to exit the fixed-price
combined-cycle gas power plant construction market.
Operating income was $9 million compared to operating income of
$33 million in the year-ago period. On an adjusted basis, operating
income1 was $34 million compared to $42 million in the year-ago
period, reflecting a decline in the Power business, as anticipated,
and strong underlying performance in the Building Construction
business.
Management Services (MS)
The MS segment provides program and facilities management and
maintenance, training, logistics, consulting, technical assistance
and systems-integration services and information technology
services, primarily for agencies of the U.S. government, national
governments around the world and commercial customers.
Revenue in the third quarter was $936 million. Organic4 revenue
increased by 9%, which was driven by solid conversion on the
Company’s recent significant wins.
Operating income was $66 million, which was effectively
unchanged from the year-ago period. On an adjusted basis, operating
income1 was $76 million compared to $79 million in the year-ago
period. This performance included a benefit from an anticipated
recovery on a federal project.
Tax Rate
The effective tax rate in the third quarter was 30.6%. On an
adjusted basis, the effective tax rate was 26.0%. The adjusted tax
rate was derived by re-computing the expected annual effective tax
rate on earnings from adjusted net income.7 The adjusted tax
expense differs from the GAAP tax expense based on the taxability
or deductibility and tax rate applied to each of the
adjustments.
Cash Flow
Operating cash flow for the third quarter was $72 million and
free cash flow2 was $48 million. The Company expects to achieve at
least $600 million of free cash flow in fiscal 2018.
Balance Sheet
As of June 30, 2018, AECOM had $801 million of total cash and
cash equivalents, $3.1 billion of net debt and $1.2 billion in
unused capacity under its $1.35 billion revolving credit
facility.
Financial Outlook
AECOM’s fiscal year 2018 financial guidance is as follows:
Fiscal Year 2018 Outlook Adjusted EBITDA1
$880 million Adjusted EPS1 $2.50 –
$2.90 Free Cash Flow2 $600+ million Interest Expense
(excluding amortization of deferred
financing fees)
$210 million Amortization8 $105 million
Full-Year Share Count 162 million Effective Tax Rate
for Adjusted Earnings7 ~17% Capital Expenditures9
$100 million
Conference Call
AECOM is hosting a conference call today at 12 p.m. Eastern
Time, during which management will make a brief presentation
focusing on the Company's results, strategies and operating trends.
Interested parties can listen to the conference call and view
accompanying slides via webcast at http://investors.aecom.com. The
webcast will be available for replay following the call.
1 Excluding acquisition and integration related items,
financing charges in interest expense, foreign exchange gains, the
amortization of intangible assets, financial impacts associated
with expected and actual dispositions of non-core businesses and
assets, and the revaluation of deferred taxes and one-time tax
repatriation charge associated with U.S. tax reform. If an
individual adjustment has no financial impact then the individual
adjustment is not reflected in the Regulation G Information tables.
See Regulation G Information for a reconciliation of Non-GAAP
measures. 2 Free cash flow is defined as cash flow from operations
less capital expenditures net of proceeds from disposals. 3 On a
constant-currency basis. 4 Organic growth is year-over-year at
constant currency and excludes revenue associated with actual and
planned non-core asset and business dispositions. Results expressed
in constant currency are presented excluding the impact from
changes in currency exchange rates. 5 Book-to-burn ratio is defined
as the amount of wins divided by revenue recognized during the
period, including revenue related to work performed in
unconsolidated joint ventures. 6 Net debt-to-EBITDA is comprised of
EBITDA as defined in the Company’s credit agreement, which excludes
stock-based compensation, and net debt as defined as total debt on
the Company’s financial statements, net of cash and cash
equivalents. 7 Inclusive of non-controlling interest deduction and
adjusted for acquisition and integration expenses, financing
charges in interest expense, the amortization of intangible assets
and financial impacts associated with actual and planned
dispositions of non-core businesses and assets. 8 Amortization of
intangible assets expense includes the impact of amortization
included in equity in earnings of joint ventures and
non-controlling interests. 9 Capital expenditures, net of proceeds
from disposals.
About AECOM
AECOM (NYSE:ACM) is built to deliver a better world. We design,
build, finance and operate infrastructure assets for governments,
businesses and organizations in more than 150 countries. As a fully
integrated firm, we connect knowledge and experience across our
global network of experts to help clients solve their most complex
challenges. From high-performance buildings and infrastructure, to
resilient communities and environments, to stable and secure
nations, our work is transformative, differentiated and vital.
A Fortune 500 firm, AECOM had revenue of approximately
$18.2 billion during fiscal year 2017. See how we deliver what
others can only imagine at aecom.com and @AECOM.
All statements in this press release other than statements of
historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including any projections of
earnings, revenue, cash flows, tax rate, share count, stock
repurchases, interest expense, capital expenditures, amortization
of intangible assets and financial fees, or other financial items,
non-core Oil & Gas business sales, any statements of the plans,
strategies and objectives for future operations and any statements
regarding future economic conditions or performance. Although we
believe that the expectations reflected in our forward-looking
statements are reasonable, actual results could differ materially
from those projected or assumed in any of our forward-looking
statements.
Important factors that could cause our actual results,
performance and achievements, or industry results to differ
materially from estimates or projections contained in our
forward-looking statements include, but are not limited to, the
following: our business is cyclical and vulnerable to economic
downturns and client spending reductions; we are dependent on
long-term government contracts and subject to uncertainties related
to government contract appropriations; governmental agencies may
modify, curtail or terminate our contracts; government contracts
are subject to audits and adjustments of contractual terms; impacts
of the Tax Cuts and Jobs Acts; we may experience losses under
fixed-price contracts; we have limited control over operations run
through our joint venture entities; we may be liable for misconduct
by our employees or consultants or our failure to comply with laws
or regulations applicable to our business; we may not maintain
adequate surety and financial capacity; we are highly leveraged and
may not be able to service our debt and guarantees; we have
exposure to political and economic risks in different countries
where we operate as well as currency exchange rate fluctuations; we
may not be able to retain and recruit key technical and management
personnel; we may be subject to legal claims and we may have
inadequate insurance coverage; we are subject to environmental law
compliance and we may have inadequate nuclear indemnification;
there may be unexpected adjustments and cancellations related to
our backlog; we are dependent on partners and third parties who may
fail to satisfy their obligations; we may not be able to manage
pension costs; we may face cybersecurity issues and IT outages; as
well as other additional risks and factors that could cause actual
results to differ materially from our forward-looking statements
set forth in our reports filed with the Securities and Exchange
Commission. We do not intend, and undertake no obligation, to
update any forward-looking statement.
This press release contains financial information calculated
other than in accordance with U.S. generally accepted accounting
principles (“GAAP”). In particular, the Company believes that
non-GAAP financial measures such as adjusted EPS, adjusted EBITDA,
adjusted operating income, adjusted tax rate, adjusted interest
expense, organic revenue, and free cash flow also provide a
meaningful perspective on its business results as the Company
utilizes this information to evaluate and manage the business. We
use adjusted EBITDA, EPS and operating income to exclude the impact
of non-operating items, such as amortization expense, taxes,
acquisition and integration expenses, and non-core operating
losses. We use free cash flow to represent the cash generated after
capital expenditures to maintain our business. Our non-GAAP
disclosure has limitations as an analytical tool, should not be
viewed as a substitute for financial information determined in
accordance with GAAP, and should not be considered in isolation or
as a substitute for analysis of our results as reported under GAAP,
nor is it necessarily comparable to non-GAAP performance measures
that may be presented by other companies. A reconciliation of these
non-GAAP measures is found in the Regulation G Information tables
at the back of this release.
When we provide our long term projections for organic revenue
growth, adjusted EBITDA, adjusted EPS growth, and free cash flow on
a forward-looking basis, the closest corresponding GAAP measure and
a reconciliation of the differences between the non-GAAP
expectation and the corresponding GAAP measure generally is not
available without unreasonable effort due to length of the
forecasted period and potential high variability, complexity and
low visibility as to items that would be excluded from the GAAP
measure in the relevant future period.
AECOM Consolidated Statements of Income
(unaudited - in thousands, except per share data)
Three Months Ended Nine Months Ended
June 30,2017
June 30,2018
%Change
June 30,2017 June 30,2018
%Change
Revenue $ 4,561,467 $ 5,147,920 12.9% $ 13,347,014 $
14,849,662 11.3% Cost of revenue 4,386,291 4,962,741
13.1% 12,833,421 14,387,059 12.1% Gross profit
175,176 185,179 5.7% 513,593 462,603 (9.9)% Equity in
earnings of joint ventures 66,458 12,863 (80.6)% 109,667 55,621
(49.3)% General and administrative expenses (33,944 ) (35,159 )
3.6% (96,427 ) (100,046 ) 3.8% Impairment of assets held for sale,
including goodwill — — — — (168,178 ) NM Acquisition &
integration expenses — — — (35,409 ) — (100.0)% (Loss) gain on
disposal activities — (2,149 ) NM 572 (2,149 )
(475.7)% Income from operations 207,690 160,734 (22.6)% 491,996
247,851 (49.6)% Other income 2,136 2,752 28.8% 4,237 17,542
314.0% Interest expense (61,547 ) (55,213 ) (10.3)% (176,985 )
(211,955 ) 19.8% Income before income tax expense (benefit) 148,279
108,273 (27.0)% 319,248 53,438 (83.3)% Income tax expense
(benefit) 12,205 33,131 171.5% 1,556 (38,362 )
NM Net income 136,074 75,142 (44.8)% 317,692 91,800 (71.1)%
Noncontrolling interests in income of consolidated
subsidiaries, net of tax (34,747 ) (14,232 ) (59.0)% (66,790 )
(39,309 ) (41.1)% Net income attributable to AECOM $ 101,327
$ 60,910 (39.9)% $ 250,902 $ 52,491
(79.1)% Net income attributable to AECOM per share: Basic $
0.65 $ 0.38 (41.5)% $ 1.62 $ 0.33
(79.6)% Diluted $ 0.64 $ 0.37 (42.2)% $ 1.58 $
0.32 (79.7)% Weighted average shares outstanding:
Basic 155,763 160,395 3.0% 155,128 159,266 2.7% Diluted 158,820
163,213 2.8% 158,488 162,426 2.5%
NM — not meaningful
Balance Sheet and Cash Flow Information
(unaudited - in thousands)
September 30, 2017
June 30, 2018
Balance Sheet Information: Total cash and cash equivalents $
802,362 $ 801,419 Accounts receivable – net 5,127,743 5,447,985
Working capital 1,103,843 1,153,772 Total debt, excluding
unamortized debt issuance costs 3,896,398 3,929,758 Total assets
14,396,956 14,727,417 Total AECOM stockholders’ equity 3,996,126
4,077,732
AECOM Reportable Segments
(unaudited - in thousands)
Design &ConsultingServices
ConstructionServices ManagementServices
AECOMCapital Corporate Total Three
Months Ended June 30, 2018 Revenue $ 2,105,219 $ 2,106,720 $
935,981 $ - $ - $ 5,147,920 Cost of revenue 1,989,093
2,097,586 876,062 -
- 4,962,741 Gross profit 116,126 9,134
59,919 - - 185,179 Equity in earnings of joint ventures 4,275 2,276
6,312 - - 12,863 General and administrative expenses - - - (3,682 )
(31,477 ) (35,159 ) Loss on disposal activities -
(2,149 ) - - -
(2,149 ) Income (loss) from operations $ 120,401 $
9,261 $ 66,231 $ (3,682 ) $ (31,477 ) $ 160,734
Gross profit as a % of revenue 5.5 % 0.4 % 6.4 % - -
3.6 %
Three Months Ended June 30, 2017 Revenue $
1,863,475 $ 1,841,620 $ 856,372 $ - $ - $ 4,561,467 Cost of revenue
1,772,240 1,815,467 798,584
- - 4,386,291
Gross profit 91,235 26,153 57,788 - - 175,176 Equity in earnings of
joint ventures 2,371 7,022 8,638 48,427 - 66,458 General and
administrative expenses - - -
(2,147 ) (31,797 ) (33,944 ) Income
(loss) from operations $ 93,606 $ 33,175 $ 66,426
$ 46,280 $ (31,797 ) $ 207,690 Gross
profit as a % of revenue 4.9 % 1.4 % 6.7 % - - 3.8 %
Nine
Months Ended June 30, 2018 Revenue $ 6,051,864 $ 6,120,549 $
2,677,249 $ - $ - $ 14,849,662 Cost of revenue 5,737,658
6,097,631 2,551,770 -
- 14,387,059 Gross profit
314,206 22,918 125,479 - - 462,603 Equity in earnings of joint
ventures 14,500 16,890 24,231 - - 55,621 General and administrative
expenses - - - (9,169 ) (90,877 ) (100,046 ) Loss on disposal
activities - (2,149 ) - - - (2,149 ) Impairment of assets held for
sale, including goodwill - (168,178 ) -
- - (168,178 ) Income
(loss) from operations $ 328,706 $ (130,519 ) $ 149,710
$ (9,169 ) $ (90,877 ) $ 247,851 Gross profit
as a % of revenue 5.2 % 0.4 % 4.7 % - - 3.1 % Contracted
backlog $ 9,326,176 $ 10,558,903 $ 3,212,884 $ - $ - $ 23,097,963
Awarded backlog 7,338,587 4,935,679 15,284,218 - - 27,558,484
Unconsolidated JV backlog - 2,190,808
946,732 - -
3,137,540 Total backlog $ 16,664,763 $ 17,685,390
$ 19,443,834 $ - $ - $ 53,793,987
Nine Months Ended June 30, 2017 Revenue $
5,571,823 $ 5,324,561 $ 2,450,630 $ - $ - $ 13,347,014 Cost of
revenue 5,279,322 5,264,199
2,289,900 - - 12,833,421
Gross profit 292,501 60,362 160,730 - - 513,593 Equity in
earnings of joint ventures 12,578 16,596 32,066 48,427 - 109,667
General and administrative expenses - - - (6,594 ) (89,833 )
(96,427 ) Acquisition & integration expenses - - - - (35,409 )
(35,409 ) Gain on disposal activities 572 -
- - - 572
Income (loss) from operations $ 305,651 $ 76,958
$ 192,796 $ 41,833 $ (125,242 ) $ 491,996
Gross profit as a % of revenue 5.2 % 1.1 % 6.6 % - -
3.8 % Contracted backlog $ 8,523,849 $ 11,650,567 $
3,376,912 $ - $ - $ 23,551,328 Awarded backlog 6,738,345 4,696,196
8,395,977 - - 19,830,518 Unconsolidated JV backlog -
2,023,084 995,820 -
- 3,018,904 Total backlog $ 15,262,194
$ 18,369,847 $ 12,768,709 $ - $ -
$ 46,400,750
AECOM Regulation
G Information ($ in millions)
Reconciliation of
Revenue to Amounts Provided by Acquired Companies
Three Months Ended June 30, 2018
Nine Months Ended June 30, 2018 Total
Provided
byAcquiredCompanies
ExcludingEffect
ofAcquiredCompanies
Total
Provided
byAcquiredCompanies
ExcludingEffect
ofAcquiredCompanies
Revenue: AECOM Consolidated $ 5,148.0 $ 129.0 $ 5,019.0 $
14,849.7 $ 412.1 $ 14,437.6 Design & Consulting Services
2,105.4 - 2,105.4 6,052.0 - 6,052.0 Construction Services 2,106.7
129.0 1,977.7 6,120.5 412.1 5,708.4 Management Services 935.9 -
935.9 2,677.2 - 2,677.2
Reconciliation of
Net Income Attributable to AECOM to EBITDA and to Adjusted
EBITDA
Three Months Ended Nine Months Ended
Jun 30, Mar 31, Jun 30, Jun
30, Jun 30, 2017 2018 2018
2017 2018 Net income (loss) attributable to
AECOM $ 101.3 $ (119.7 ) $ 60.9 $ 250.9 $ 52.5 Income tax expense
(benefit) 12.1 (24.4 ) 33.1
1.5 (38.4 ) Income (loss) attributable to
AECOM before income taxes 113.4 (144.1 ) 94.0 252.4 14.1
Depreciation and amortization expense1 67.4 81.0 68.0 206.0 212.5
Interest income2 (1.7 ) (3.4 ) (2.3 ) (3.7 ) (7.5 ) Interest
expense3 58.5 90.9 52.7
161.6 196.9 EBITDA $ 237.6 $
24.4 $ 212.4 $ 616.3 $ 416.0 Non-core
operating losses 3.2 21.2 18.7 5.7 39.9 Loss on assets held for
sale, including goodwill - 168.2 - - 168.2 Acquisition and
integration related items - - (6.5 ) 35.4 (6.5 ) Loss (gain) on
disposal activities - - 2.1 (0.6 ) 2.1 FX gain from forward
currency contract - (9.1 ) - - (9.1 ) Depreciation expense included
in non-core operating losses and acquisition and integration items
above - (3.8 ) (3.7 ) (0.8 )
(7.5 ) Adjusted EBITDA $ 240.8 $ 200.9 $ 223.0
$ 656.0 $ 603.1
_____________________
1 Includes the amount for
noncontrolling interests in consolidated subsidiaries; 2
Included in other income; 3 Excludes related
amortization
Reconciliation of
Total Debt to Net Debt
Balances at: Jun 30, 2017 Mar 31,
2018 Jun 30, 2018 Short-term debt $ 1.7 $ 9.8 $
47.4 Current portion of long-term debt 155.4 123.9 125.6 Long-term
debt, gross 3,809.2 3,865.4 3,756.7 Total debt
excluding unamortized debt issuance costs 3,966.3 3,999.1 3,929.7
Less: Total cash and cash equivalents 812.5 867.2
801.4 Net debt $ 3,153.8 $ 3,131.9 $ 3,128.3
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended Sep 30,
Dec 31, Mar 31, Jun 30,
Sep 30, Dec 31, Mar 31,
Jun 30, 2016 2016 2017 2017
2017 2017 2018 2018 Net cash provided
by (used in) operating activities $ 362.9 $ 77.5 $ (46.1 ) $ 413.9
$ 251.4 $ 52.4 $ 118.4 $ 71.9 Capital expenditures, net
(36.9 ) (21.0 ) (17.7 ) (19.8 ) (20.0 )
(18.5 ) (23.7 ) (23.5 ) Free cash flow $ 326.0
$ 56.5 $ (63.8 ) $ 394.1 $ 231.4 $ 33.9
$ 94.7 $ 48.4
Fiscal Years
Ended Sep 30, 2012
2013 2014
2015 2016
2017 Net cash provided by operating activities $
433.4 $ 408.6 $ 360.6 $ 764.4 $ 814.2 $ 696.7 Capital expenditures,
net (62.9 ) (52.1 ) (62.8 ) (69.4 )
(136.8 ) (78.5 ) Free cash flow $ 370.5 $
356.5 $ 297.8 $ 695.0 $ 677.4 $ 618.2
AECOM Regulation G
Information (in millions, except per share data)
Three Months Ended Nine Months Ended Jun
30, Mar 31, Jun 30, Jun 30,
Jun 30, 2017 2018 2018 2017
2018
Reconciliation of
Income from Operations to Adjusted Income from
Operations
Income (loss) from operations $ 207.7 $ (44.1 ) $ 160.8 $
492.0 $ 247.9 Non-core operating losses 3.2 21.2 18.5 5.7 39.7
Impairment of assets held for sale, including goodwill - 168.2 - -
168.2 Acquisition and integration related items - - (7.9 ) 35.4
(7.9 ) Loss (gain) on disposal activities - - 2.1 (0.6 ) 2.1
Amortization of intangible assets 28.4 33.7
28.4 83.5 89.0
Adjusted income from operations $ 239.3 $ 179.0 $
201.9 $ 616.0 $ 539.0
Reconciliation of
Income Before Income Taxes to Adjusted Income Before Income
Taxes
Income (loss) before income tax benefit $ 148.2 $ (132.1 ) $
108.2 $ 319.2 $ 53.4 Non-core operating losses 3.2 21.2 18.6 5.7
39.8 Impairment of assets held for sale, including goodwill - 168.2
- - 168.2 Acquisition and integration related items - - (7.9 ) 35.4
(7.9 ) Loss (gain) on disposal activities - - 2.1 (0.6 ) 2.1
Amortization of intangible assets 28.4 33.7 28.4 83.5 89.0 FX gain
from forward currency contract - (9.1 ) - - (9.1 ) Financing
charges in interest expense 2.9 44.2
2.6 14.4 49.7 Adjusted
income before income tax expense (benefit) $ 182.7 $ 126.1
$ 152.0 $ 457.6 $ 385.2
Reconciliation of
Income Taxes to Adjusted Income Taxes
Income tax expense (benefit) $ 12.1 $ (24.4 ) $ 33.1 $ 1.5 $
(38.4 )
Tax effect of the above adjustments†
10.5 26.6 2.3 34.8 34.3 Revaluation of deferred taxes and one-time
tax repatriation charges associated with U.S. tax reform -
- - - 41.7
Adjusted income tax expense $ 22.6 $ 2.2 $
35.4 $ 36.3 $ 37.6
† Adjusts the income tax expense (benefit)
during the period to exclude the impact on our effective tax rate
of the pre-tax adjustments shown above and the impact of the tax
reform changes.
Reconciliation of
Noncontrolling Interests to Adjusted Noncontrolling
Interests
Noncontrolling interests in income of consolidated
subsidiaries, net of tax $ (34.8 ) $ (12.0 ) $ (14.2 ) $ (66.8 ) $
(39.3 ) Acquisition and integration related items, net of tax - -
1.4 - 1.4 Amortization of intangible assets included in NCI, net of
tax (2.1 ) (3.3 ) (2.8 ) (6.9 )
(8.6 )
Adjusted noncontrolling interests in
income of consolidated subsidiaries, net of tax
$ (36.9 ) $ (15.3 ) $ (15.6 ) $ (73.7 ) $ (46.5 )
Reconciliation of
Net Income Attributable to AECOM to Adjusted Net Income
Attributable to AECOM
Net income (loss) attributable to AECOM $ 101.3 $ (119.7 ) $
60.9 $ 250.9 $ 52.5 Non-core operating losses 3.2 21.2 18.5 5.7
39.7 Impairment of assets held for sale, including goodwill - 168.2
- - 168.2 Acquisition and integration related items - - (6.5 ) 35.4
(6.5 ) Loss (gain) on disposal activities - - 2.1 (0.6 ) 2.1
Amortization of intangible assets 28.4 33.7 28.4 83.5 89.0 FX gain
from forward currency contract - (9.1 ) - - (9.1 ) Financing
charges in interest expense 2.9 44.2 2.6 14.4 49.7
Tax effect of the above adjustments†
(10.4 ) (26.6 ) (2.3 ) (34.8 ) (34.3 ) Revaluation of deferred
taxes and one-time tax repatriation charges associated with U.S.
tax reform - - - - (41.7 ) Amortization of intangible assets
included in NCI, net of tax (2.1 ) (3.3 ) (2.8
) (6.9 ) (8.6 ) Adjusted net income attributable to
AECOM $ 123.3 $ 108.6 $ 100.9 $ 347.6 $
301.0
Reconciliation of
Net Income per Diluted Share to Adjusted Net Income per Diluted
Share
Net income (loss) attributable to AECOM – per diluted share
$ 0.64 $ (0.75 ) $ 0.37 $ 1.58 $ 0.32 Per diluted share
adjustments: Non-core operating losses 0.02 0.13 0.11 0.04 0.24
Impairment of assets held for sale, including goodwill - 1.04 - -
1.04 Acquisition and integration related items - - (0.04 ) 0.22
(0.04 ) Loss on disposal activities - - 0.01 - 0.01 Amortization of
intangible assets 0.18 0.21 0.18 0.53 0.55 FX gain from forward
currency contract - (0.06 ) - - (0.06 ) Financing charges in
interest expense 0.02 0.27 0.02 0.09 0.31
Tax effect of the above adjustments†
(0.07 ) (0.15 ) (0.01 ) (0.23 ) (0.21 ) Revaluation of deferred
taxes and one-time tax repatriation charges associated with U.S.
tax reform - - - - (0.26 ) Amortization of intangible assets
included in NCI, net of tax (0.01 ) (0.02 )
(0.02 ) (0.04 ) (0.05 ) Adjusted net income
attributable to AECOM – per diluted share $ 0.78 $ 0.67
$ 0.62 $ 2.19 $ 1.85 Weighted average
shares outstanding – diluted 158.8 162.2 163.2 158.5 162.4
Reconciliation of
EBITDA to Adjusted Income from Operations
EBITDA(1) $ 237.6 $ 24.4 $ 212.4 $ 616.3 $ 416.0 Non-core
operating losses 3.2 21.2 18.7 5.7 39.9 Impairment of assets held
for sale, including goodwill - 168.2 - - 168.2 Acquisition and
integration related items - - (6.5 ) 35.4 (6.5 ) Loss (gain) on
disposal activities - - 2.1 (0.6 ) 2.1 FX gain from forward
currency contract - (9.1 ) - - (9.1 ) Depreciation expense included
in non-core operating losses and acquisition and integration
expenses above - (3.8 ) (3.7 )
(0.8 ) (7.5 ) Adjusted EBITDA $ 240.8 $ 200.9
$ 223.0 $ 656.0 $ 603.1 Other income (2.1 )
(12.5 ) (2.7 ) (4.2 ) (17.5 ) FX gain from forward currency
contract - 9.1 - - 9.1 Interest income(2) 1.7 3.4 2.3 3.7 7.5
Depreciation(3) (38.0 ) (37.2 ) (36.3 ) (113.2 ) (109.7 )
Noncontrolling interests in income of consolidated subsidiaries,
net of tax 34.8 12.0 14.2 66.8 39.3 Acquisition and integration
related items included in NCI, net of tax - - (1.4 ) - (1.4 )
Amortization of intangible assets included in NCI, net of tax
2.1 3.3 2.8 6.9
8.6 Adjusted income from operations $ 239.3
$ 179.0 $ 201.9 $ 616.0 $ 539.0
(1) See Reconciliation of Net
Income Attributable to AECOM to EBITDA; (2) Included in
other income; (3) Excludes depreciation from non-core
operating losses, and acquisition and integration expenses
AECOM Regulation G
Information (in millions, except per share data)
Three Months Ended Nine Months Ended Jun
30,2017 Mar 31,2018 Jun
30,2018 Jun 30,2017 Jun
30,2018
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Design & Consulting Services Segment: Income from
operations $ 93.7 $ 123.0 $ 120.4 $ 305.7 $ 328.7 Non-core
operating losses 3.1 1.2 0.7 5.6 1.9 Gain on disposal activities -
- - (0.6 ) - Amortization of intangible assets 6.8
6.2 6.4 20.7 18.8
Adjusted income from operations $ 103.6 $ 130.4 $ 127.5
$ 331.4 $ 349.4
Construction
Services Segment: Income (loss) from operations $ 33.2 $ (180.3
) $ 9.3 $ 77.0 $ (130.5 ) Acquisition and integration related items
- - (7.9 ) - (7.9 ) Non-core operating losses - 20.0 17.9 - 37.9
Impairment of assets held for sale, including goodwill - 168.2 - -
168.2 Loss on disposal activities - - 2.1 - 2.1 Amortization of
intangible assets 8.7 17.8 12.3
23.8 40.9 Adjusted income from
operations $ 41.9 $ 25.7 $ 33.7 $ 100.8 $
110.7
Management Services Segment: Income from
operations $ 66.4 $ 43.4 $ 66.2 $ 192.8 $ 149.7 Amortization of
intangible assets 12.9 9.7 9.7
39.0 29.3 Adjusted income from
operations $ 79.3 $ 53.1 $ 75.9 $ 231.8 $
179.0
AECOM Regulation G
Information
FY18 GAAP EPS
Guidance based on Adjusted EPS Guidance
Fiscal Year End 2018 GAAP EPS Guidance
$0.84 to $1.24 Adjusted EPS Excludes: Amortization of intangible
assets $0.65 Acquisition and integration related items ($0.07)
Foreign exchange gain ($0.06) Financing charges in interest expense
$0.33 Loss on disposal $0.01 Year-to-date non-core operating losses
$0.25 Tax effect of the above items* ($0.23) Loss on assets held
for sale, including goodwill $1.04 Revaluation of deferred taxes
and one-time tax repatriation charges associated with U.S. tax
reform ($0.26) Adjusted EPS Guidance $2.50 to $2.90 *The
adjusted tax expense differs from the GAAP tax expense based on the
deductibility and tax rate applied to each of the adjustments.
FY18 GAAP Net
Income Guidance based on Adjusted EBITDA Guidance
Fiscal Year End 2018 (in millions) GAAP
Net Income Attributable to AECOM Guidance* $171 Adjusted Net Income
Attributable to AECOM Excludes: Amortization of intangible assets,
net of NCI $105 Acquisition and integration related items ($11)
Foreign exchange gain ($9) Financing charges in interest expense
$53 Loss on disposal $2 Year-to-date non-core operating losses $40
Tax effect of the above items** ($37) Loss on assets held for sale,
including goodwill $168 Revaluation of deferred taxes and one-time
tax repatriation charges associated with U.S. tax reform ($42)
Adjusted Net Income Attributable to AECOM $440 Adjusted EBITDA
Excludes: Interest Expense $210 Interest Income ($8) Depreciation
$145 Taxes $92 Adjusted EBITDA Guidance $880 *Calculated
based on the mid-point of AECOM’s fiscal year 2018 EPS guidance.
**The adjusted tax expense differs from the GAAP tax expense based
on the deductibility and tax rate applied to each of the
adjustments. Note: the components in this table may not sum to the
total due to rounding.
FY18 GAAP Tax
Rate Guidance based on Adjusted Tax Rate Guidance
Fiscal Year End
2018
GAAP Tax Rate Guidance 5% Tax rate impact from adjustments
to GAAP earnings 10% Tax rate impact from inclusion of NCI
deduction 2% Effective Tax Rate for Adjusted Earnings Guidance 17%
FY18 GAAP
Interest Expense Guidance based on Adjusted Interest Expense
Guidance
Fiscal Year End
2018
(in millions) GAAP Interest Expense Guidance $263 Financing charge
in interest expense $53 Adjusted Interest Expense Guidance $210
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180807005249/en/
AECOMInvestors:Will Gabrielski, 213-593-8208Vice
President, Investor
RelationsWilliam.Gabrielski@aecom.comorMedia:Brendan
Ranson-Walsh, 213-996-2367Vice President, Global Communications
& Corporate ResponsibilityBrendan.Ranson-Walsh@aecom.com
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