AECOM (NYSE:ACM), a premier, fully integrated global
infrastructure firm, today reported second quarter fiscal year 2019
results.
Second Quarter First
Half Fiscal 2019
($ in millions,except EPS)
As Reported
Adjusted1
(Non-GAAP)
As ReportedYoY
%Change
AdjustedYoY
%Change
As Reported
Adjusted1
(Non-GAAP)
As ReportedYoY
%Change
AdjustedYoY
%Change
Revenue $5,040 -- 5%
-- $10,078 -- 4%
-- Operating Income $168 $211
NM 18% $252 $395
189% 17% Net Income $78
$109
NM 0% $129 $198
NM (1%) EPS (Fully Diluted)
$0.49 $0.69 NM 3% $0.81
$1.24 NM 0% EBITDA
-- $235 -- 17% --
$442 -- 16% Wins
$8,100 -- 17% --
$17,800 -- 37% -- Backlog
$61,014 -- 22%2
--
Second Quarter and First Half Fiscal
2019 Accomplishments:
- Revenue of $5.0 billion in the second
quarter increased by 5% over the prior year; organic3 revenue
increased by 7%, highlighted by 14% and 10% growth in the Company’s
higher-margin Management Services and Americas design businesses,
respectively.
- Net income and diluted earnings per
share were $78 million and $0.49 in the second quarter,
respectively, compared to net loss of $120 million and diluted loss
per share of $0.75 in the prior year, which included a $168 million
non-cash charge on non-core Oil & Gas assets held for sale; on
an adjusted basis, diluted earnings per share1 was $0.69.
- Second quarter adjusted EBITDA1
increased by 17% over the prior year to $235 million, which
reflected strong execution, favorable end market trends, and the
benefits of the Company’s $225 million G&A reduction plan.
- Year-to-date adjusted EBITDA1 increased
by 16% to $442 million.
- Total backlog increased by 22%2 and set
a new record at $61 billion.
- Wins in the quarter were $8.1 billion,
highlighted by an 18-month extension at the Savannah River Site for
the U.S. Department of Energy, a 1.2 book-to-burn4 ratio in the
Americas design business; year-to-date wins of $18 billion set a
new record with broad strength across the business.
- Second quarter operating cash flow of
$107 million and free cash flow5 of $85 million were consistent
with expectations, with the exception of negative impacts from
continued working capital investment to support storm recovery
efforts in the U.S. Virgin Islands.
- The Company is reiterating its full
year financial guidance for adjusted EBITDA1 growth of 12% at the
mid-point, adjusted EPS1 in the range of $2.60-$2.90, and free cash
flow5 in the range of $600-$800 million; the Company expects to
achieve at least $1 billion of adjusted EBITDA in fiscal 2020.
Committed to Delivering Strategic Value
Creation Actions and Fiscal 2022 Financial Targets:
- AECOM has completed nearly all of the
actions necessary to achieve its expected $225 million of annual
G&A savings by fiscal 2021, and the Company expects to achieve
an adjusted operating margin1 in the DCS segment of at least 7% in
fiscal 2019 and at least 7.5% in fiscal 2020.
- In order to reduce its risk profile and
simplify its operating structure, the Company is accelerating its
review of its at-risk construction exposure and is no longer
pursuing at-risk construction opportunities in international
markets.
- Collectively, these actions position
the Company to capitalize on its record backlog by focusing
resources on higher-margin and lower-risk professional services
businesses where its competitive advantages are greatest and
financial returns are highest.
- The Company remains committed to its
fiscal 2018-2022 financial targets, including a 9% adjusted EBITDA1
CAGR, a 12%-15% adjusted EPS1 CAGR, and at least $3.5 billion of
cumulative free cash flow5.
- The Company continues to execute on its
capital allocation priorities with $210 million of shares
repurchased to-date under its $1 billion Board authorized
repurchase plan; if the stock remains attractively valued,
management expects to seek to expand its repurchase capacity and
maximize value for its stockholders, while continuing to target
achieving 2.5x net leverage6 by year end.
“We delivered 17% adjusted EBITDA growth in the second quarter
and 16% adjusted EBITDA growth in the first half of the fiscal
year, which reflects strong execution on our $225 million G&A
reduction plan that best positions us to maximize the profitability
of our record $61 billion backlog,” said Michael S. Burke, AECOM’s
chairman and chief executive officer. “Because of this performance,
we are confident in achieving our guidance for 12% adjusted EBITDA
growth this year, and we are on track with our financial targets
for adjusted EBITDA, adjusted EPS, and free cash flow through
fiscal 2022. Our more efficient operating structure, robust end
market trends, and strong execution create a favorable environment
for us, and we are capitalizing, as evidenced by a record $18
billion of wins in the first half of the year. To maximize the
value creation opportunity in the long run, we remain committed to
allocating substantially all available free cash flow to execute
share repurchases under our $1 billion authorization, while in the
short run we will pay down debt to achieve our 2.5x net leverage
target by the end of the fiscal year.”
“Our earnings performance in the first half of the year has
exceeded our expectations,” said W. Troy Rudd, AECOM’s chief
financial officer. “While free cash flow has been impacted by
ongoing investments in working capital to support storm recovery
efforts in the U.S. Virgin Islands, these impacts are expected to
be timing related only, and we expect to deliver free cash flow
between $600 million and $800 million for the fifth-consecutive
year. We are committed to achieving 2.5x net leverage by the end of
fiscal 2019 through debt reduction and EBITDA growth, and
allocating substantially all available free cash flow to the best
and highest use, which remains share repurchases.”
Wins and Backlog
Wins were $8.1 billion and resulted in a book-to-burn ratio4 of
1.5. Wins included strong contributions across the business,
highlighted by an 18-month extension at the Savannah River Site for
the U.S. Department of Energy, a 1.2 book-to-burn ratio in the
Americas design business, and substantial wins in the Building
Construction business. Total backlog increased by 22%2 over the
prior year to $61 billion, which set a new record for the Company
and increases visibility into future growth.
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 second quarter was $2.1 billion and increased by
5%. Constant-currency organic3 revenue increased by 8%. This
performance was highlighted by 10% organic growth in the Americas,
which was driven by the water and transportation markets, including
a positive contribution from the storm recovery efforts in the
Caribbean and Southeastern U.S. In addition, international design
markets delivered positive organic growth.
Operating income was $135 million compared to $123 million in
the year-ago period. On an adjusted basis, operating income1 was
$140 million compared to $130 million in the year-ago period.
Adjusted operating income increased over the prior year period due
to strong performance across the business and the benefits from the
$225 million of G&A reductions.
Construction Services (CS)
The CS segment provides construction services for energy,
sports, commercial, industrial, and public and private
infrastructure clients.
Revenue in the second quarter was $1.9 billion and increased by
2%. Constant-currency organic3 revenue increased by 4%, due
primarily to continued strong contributions from the Civil
construction and Energy businesses, and a slight decline in the
Building Construction business.
Operating income was $24 million compared to operating loss of
$180 million in the year-ago period. On an adjusted basis,
operating income1 was $36 million compared to $26 million in the
year-ago period. The increase in adjusted operating income was due
to strong project execution.
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 second quarter was $1.0 billion. Revenue and
organic3 revenue growth increased by 14%, reflecting strong
conversion of a record level of backlog and strong funding for the
U.S. Departments of Defense and Energy clients.
Operating income was $51 million compared to $43 million in the
year-ago period. On an adjusted basis, operating income1 was $61
million compared to $53 million in the year-ago period. The
increase in adjusted operating income is the result of strong
revenue growth and execution on the business’s record backlog, and
a favorable funding environment.
AECOM Capital (ACAP)
The ACAP segment invests in and develops real estate projects.
Revenue in the second quarter was $1.5 million and operating income
was $9.5 million. During the quarter, ACAP completed the sale of a
property that resulted in an approximately 40% IRR and an
approximately $10 million gain on its investment.
Tax Rate
The effective tax rate in the second quarter was 18.3%. On an
adjusted basis, the effective tax rate was 23.0%. The adjusted tax
rate was derived by re-computing the 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 second quarter was $107 million and
free cash flow5 was $85 million. Strong underlying cash performance
was offset by continued working capital investment related to the
Company’s storm recovery work in the U.S. Virgin Islands. Excluding
this impact, cash performance was consistent with expectations, and
the Company expects its annual free cash flow for fiscal 2019 to be
in line with prior guidance of $600 million to $800 million.
Balance Sheet and Capital
Allocation
As of March 31, 2019, AECOM had $827 million of total cash and
cash equivalents, $3.9 billion of total debt, $3.1 billion of net
debt and $1.04 billion in unused capacity under its $1.35 billion
revolving credit facility. During the quarter, the Company
repurchased $30 million of stock and has repurchased 6.7 million
shares since August 2018 under its $1 billion Board
authorization.
Financial Outlook and Impacts of
Strategic Actions
AECOM’s fiscal 2019 financial guidance is as follows:
Fiscal Year 2019 Outlook Adjusted
EBITDA1 $920 - $960 million Adjusted EPS1
$2.60 – $2.90 Free Cash Flow5
$600 – $800 million Adjusted Interest Expense
(excluding amortization of deferred
financing fees)
$200 million Amortization8
$89 million Full-Year Share Count 160
million Effective Tax Rate for Adjusted Earnings7
~25% Capital Expenditures9 ~$120
million
AECOM continues to expect to incur restructuring costs of
between $80 and $90 million in fiscal 2019, nearly all of which
have been actioned. The Company continues to expect total cash
costs for the restructuring of between $60 and $70 million.
Also included in the Company’s fiscal 2019 guidance is
approximately $13 million of EBITDA from AECOM Capital
contributions.
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,
transaction-related expenses, 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, restructuring costs
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 On a
constant-currency basis. 3 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. 4 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. 5 Free cash flow is defined as cash
flow from operations less capital expenditures net of proceeds from
disposals. 6 Net debt-to-EBITDA, or net leverage, 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 critical infrastructure assets for
governments, businesses and organizations. 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 $20.2 billion during
fiscal year 2018. 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, cost savings, profitability, cash flows, tax
rate, share count, stock repurchases, interest expense, capital
expenditures, amortization of intangible assets and financial fees,
or other financial items, any statements of the plans, strategies
and objectives for future operations, profitability, strategic
value creation, risk profile and investment strategies 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; long-term government
contracts and subject to uncertainties related to government
contract appropriations; government shutdowns; governmental
agencies may modify, curtail or terminate our contracts; government
contracts are subject to audits and adjustments of contractual
terms; losses under fixed-price contracts; limited control over
operations run through our joint venture entities; liability for
misconduct by our employees or consultants; failure to comply with
business laws and regulations; maintaining adequate surety and
financial capacity; high leveraged and potential inability to
service our debt and guarantees; exposure to Brexit; exposure to
political and economic risks in different countries; currency
exchange rate fluctuations; retaining and recruiting key technical
and management personnel; legal claims; inadequate insurance
coverage; environmental law compliance and adequate nuclear
indemnification; unexpected adjustments and cancellations related
to our backlog; partners and third parties who may fail to satisfy
their legal obligations; AECOM Capital real estate development
projects; managing pension cost; cybersecurity issues, IT outages
and data privacy; 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”). The Company believes that non-GAAP financial
measures such as adjusted EPS, adjusted EBITDA, adjusted
net/operating income, adjusted tax rate, adjusted interest expense,
organic revenue, and free cash flow provide a meaningful
perspective on its business results as the Company utilizes this
information to evaluate and manage the business. We use adjusted
EBITDA, adjusted EPS, adjusted net/operating income, adjusted tax
rate and adjusted interest expense to exclude the impact of
non-operating items, such as amortization expense, taxes,
acquisition and integration expenses, and non-core operating losses
to aid investors in better understanding our core performance
results. We use free cash flow to represent the cash generated
after capital expenditures to maintain our business. We present
constant currency information, such as organic revenue, to help
assess how our underlying businesses performed excluding the effect
of foreign currency rate fluctuations to aid investors in better
understanding our international operational performance.
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 the length, high
variability, complexity and low visibility associated with the
non-GAAP expectation projected against the multi-year forecast
which could significantly impact the GAAP measure.
AECOM
Consolidated Statements of
Income
(unaudited - in thousands, except per
share data)
Three Months Ended Six Months Ended
March 31,2018
March 31,2019
%Change
March 31,2018
March 31,2019
%Change
Revenue $ 4,790,910 $ 5,040,022 5.2 % $ 9,701,742 $
10,077,517 3.9 % Cost of revenue 4,649,638 4,844,660 4.2 %
9,424,318 9,711,542 3.0 % Gross profit 141,272 195,362 38.3 %
277,424 365,975 31.9 % Equity in earnings of joint ventures
13,038 25,963 99.1 % 42,758 38,467 (10.0)% General and
administrative expenses (30,217 ) (37,426 ) 23.9 % (64,887 )
(73,333 ) 13.0 % Impairment of assets held for sale, including
goodwill (168,178 ) - (100.0)% (168,178 ) - (100.0)% Restructuring
costs - (15,875 ) NM - (79,170 ) NM (Loss) income from operations
(44,085 ) 168,024 NM 87,117 251,939 189.2 % Other income
12,507 4,266 (65.9)% 14,790 7,863 (46.8)% Interest expense (100,577
) (57,828 ) (42.5)% (156,742 ) (113,854 ) (27.4)% (Loss) income
before income tax (benefit) expense (132,155 ) 114,462 NM (54,835 )
145,948 NM Income tax (benefit) expense (24,400 ) 20,943 NM
(71,493 ) (12,657 ) (82.3)% Net (loss) income (107,755 )
93,519 NM 16,658 158,605 852.1 %
Noncontrolling interests in income
ofconsolidated subsidiaries, net of tax
(11,978 ) (15,674 ) 30.9 % (25,077 ) (29,241 ) 16.6 % Net
(loss) income attributable to AECOM $ (119,733 ) $ 77,845 NM $
(8,419 ) $ 129,364 NM Net (loss) income attributable to
AECOMper share: Basic $ (0.75 ) $ 0.50 NM $ (0.05 ) $ 0.83 NM
Diluted $ (0.75 ) $ 0.49 NM $ (0.05 ) $ 0.81 NM Weighted
average shares outstanding: Basic 159,495 156,621 (1.8)% 158,702
156,519 (1.4)% Diluted 159,495 158,416 (0.7)% 158,702 159,010 0.2 %
NM — not meaningful
Balance Sheet Information
(unaudited - in thousands)
September 30, 2018 March 31, 2019 Balance
Sheet Information: Total cash and cash equivalents $ 886,733 $
826,878 Accounts receivable and contract assets – net 5,468,821
5,712,831 Working capital 997,645 1,350,453 Total debt, excluding
unamortized debt issuance costs 3,673,463 3,933,872 Total assets
14,681,131 14,737,023 Total AECOM stockholders’ equity 4,092,780
4,199,936
AECOM Reportable Segments
(unaudited - in thousands)
Design &ConsultingServices
ConstructionServices ManagementServices
AECOMCapital Corporate Total Three
Months Ended March 31, 2019 Revenue $ 2,100,797 $ 1,917,801 $
1,019,937 $ 1,487 $ - $ 5,040,022 Cost of revenue 1,971,017
1,901,099 972,544 - - 4,844,660
Gross profit 129,780 16,702 47,393 1,487 - 195,362 Equity in
earnings of joint ventures 5,509 6,810 3,923 9,721 - 25,963 General
and administrative expenses - - - (1,681 ) (35,745 ) (37,426 )
Restructuring costs - - - -
(15,875 ) (15,875 ) Income (loss) from operations $ 135,289
$ 23,512 $ 51,316 $ 9,527 $ (51,620 ) $ 168,024 Gross profit
as a % of revenue 6.2% 0.9% 4.6% -- -- 3.9%
Three Months
Ended March 31, 2018 Revenue $ 2,004,745 $ 1,888,342 $ 897,823
$ - $ - $ 4,790,910 Cost of revenue 1,884,511
1,901,637 863,490 - - 4,649,638 Gross
profit 120,234 (13,295 ) 34,333 - - 141,272 Equity in earnings of
joint ventures 2,763 1,208 9,067 - - 13,038 General and
administrative expenses - - - (2,880 ) (27,337 ) (30,217 )
Impairment of assets held for sale, including goodwill -
(168,178 ) - - - (168,178 )
Income (loss) from operations $ 122,997 $ (180,265 ) $ 43,400 $
(2,880 ) $ (27,337 ) $ (44,085 ) Gross profit as a % of
revenue 6.0% (0.7)% 3.8% -- -- 2.9%
Six Months Ended
March 31, 2019 Revenue $ 4,130,476 $ 3,932,303 $ 2,009,318 $
5,420 $ - $ 10,077,517 Cost of revenue 3,885,057
3,912,385 1,914,100 - - 9,711,542 Gross
profit 245,419 19,918 95,218 5,420 - 365,975 Equity in earnings of
joint ventures 9,409 14,633 7,189 7,236 - 38,467 General and
administrative expenses - - - (3,408 ) (69,925 ) (73,333 )
Restructuring costs - - - -
(79,170 ) (79,170 ) Income (loss) from operations $ 254,828
$ 34,551 $ 102,407 $ 9,248 $ (149,095 ) $ 251,939 Gross
profit as a % of revenue 5.9% 0.5% 4.7% - - 3.6% Contracted
backlog $ 9,570,692 $ 10,520,026 $ 3,480,258 $ - $ - $ 23,570,976
Awarded backlog 6,896,030 12,652,887 15,488,265 - - 35,037,182
Unconsolidated JV backlog - 1,611,494 794,126
- - 2,405,620 Total backlog $ 16,466,722 $
24,784,407 $ 19,762,649 $ - $ - $ 61,013,778
Six Months
Ended March 31, 2018 Revenue $ 3,946,645 $ 4,013,829 $
1,741,268 $ - $ - $ 9,701,742 Cost of revenue 3,748,565 4,000,045
1,675,708 - - 9,424,318 Gross profit 198,080 13,784 65,560 - -
277,424 Equity in earnings of joint ventures 10,225 14,614 17,919 -
- 42,758 General and administrative expenses - - - (5,487 ) (59,400
) (64,887 ) Impairment of assets held for sale, including goodwill
- (168,178 ) - - -
(168,178 ) Income (loss) from operations $ 208,305 $ (139,780 ) $
83,479 $ (5,487 ) $ (59,400 ) $ 87,117 Gross profit as a %
of revenue 5.0% 0.3% 3.8% -- -- 2.9% Contracted backlog $
9,238,472 $ 10,981,745 $ 2,715,448 $ - $ - $ 22,935,665 Awarded
backlog 7,935,382 5,719,996 10,218,800 - - 23,874,178
Unconsolidated JV backlog - 2,267,647 858,389
- - 3,126,036 Total backlog $ 17,173,854 $
18,969,388 $ 13,792,637 $ - $ - $ 49,935,879
AECOM
Regulation G Information
($ in millions)
Reconciliation of
Net Income Attributable to AECOM to EBITDA and to Adjusted
EBITDA
Three Months Ended
Six Months Ended
Mar 31,2018
Dec 31,2018
Mar 31,2019
Mar 31,2018
Mar 31,2019
Net (loss) income attributable to AECOM $ (119.7 ) $ 51.5 $
77.9 $ (8.4 ) $ 129.4 Income tax (benefit) expense (24.4 )
(33.6 ) 20.9 (71.5 ) (12.7 ) (Loss)
income attributable to AECOM before income taxes (144.1 ) 17.9 98.8
(79.9 ) 116.7 Depreciation and amortization expense
1 81.0
64.3 66.4 144.5 130.7 Interest income
2 (3.4 ) (2.7 ) (3.0 )
(5.2 ) (5.7 ) Interest expense
3 90.9 53.5
55.4 144.2 108.9 EBITDA $ 24.4 $ 133.0 $ 217.6
$ 203.6 $ 350.6 Transaction-related expenses - - 4.4 - 4.4 Non-core
operating losses 21.2 15.0 1.1 21.2 16.1 Impairment of assets held
for sale, including goodwill 168.2 - - 168.2 - Acquisition and
integration-related items - (3.9 ) (3.7 ) - (7.6 ) Restructuring
costs - 63.3 15.9 - 79.2 FX gain from forward currency contract
(9.1 ) - - (9.1 ) -
Depreciation expense included in
non-coreoperating losses and acquisition and integrationexpenses
above
(3.8 ) (0.2 ) (0.2 ) (3.8 ) (0.4
) Adjusted EBITDA $ 200.9 $ 207.2 $ 235.1 $ 380.1 $ 442.3
__________________________
1 Includes the amount for noncontrolling interests in
consolidated subsidiaries;
2 Included in other income;
3 Excludes related amortization
Fiscal Years Ended Sep 30, 2016
2017 2018
Net income attributable to AECOM $ 96.1 $ 339.4 $ 136.5
Income tax (benefit) expense (37.9 ) 7.7 (19.6
) Income attributable to AECOM before income taxes 58.2 347.1 116.9
Depreciation and amortization expense
1 414.5 280.0 281.0
Interest income
2 (4.3 ) (5.5 ) (9.6 ) Interest
expense
3 225.8 212.4 249.4 EBITDA $
694.2 $ 834.0 $ 637.7 Non-core operating losses 36.9 9.4 57.4
Impairment of assets held for sale, including goodwill - - 168.2
Acquisition and integration-related items 213.6 38.7 (10.9 ) Loss
(gain) on disposal activity 42.6 (0.6 ) 2.9 FX gain from forward
currency contract - - (9.1 )
Depreciation expense included in
non-coreoperating losses and acquisition andintegration-related
items above
(28.8 ) (0.8 ) (9.7 ) Adjusted EBITDA $ 958.5
$ 880.7 $ 836.5
____________________________
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: Mar 31, 2018 Dec 31, 2018
Mar 31, 2019 Short-term debt $ 9.8 $ 46.1 $ 48.4 Current
portion of long-term debt 123.9 114.7 109.9 Long-term debt, gross
3,865.4 3,803.7 3,775.6 Total debt excluding unamortized
debt issuance costs 3,999.1 3,964.5 3,933.9 Less: Total cash and
cash equivalents 867.2 838.3 826.9 Net debt $ 3,131.9 $
3,126.2 $ 3,107.0
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended
Mar 31,2018
Dec 31,2018
Mar 31,2019
Net cash provided by (used in) operating activities $ 118.4 $
(200.4 ) $ 107.4 Capital expenditures, net (23.7 ) (21.9 ) (22.5 )
Free cash flow $ 94.7 $ (222.3 ) $ 84.9
Fiscal
Years Ended Sep 30, 2015
2016
2017
2018 Net cash
provided by operating activities $ 764.4 $ 814.2 $ 696.7 $ 774.6
Capital expenditures, net (69.4 ) (136.8 )
(78.5 ) (86.9 ) Free cash flow $ 695.0 $ 677.4 $ 618.2 $
687.7
AECOM
Regulation G Information
($ in millions)
Three Months Ended Six Months Ended Mar
31,2018 Dec 31,2018
Mar 31,2019 Mar
31,2018 Mar 31,2019
Reconciliation of
Income from Operations to Adjusted Income from
Operations
(Loss) income from operations $ (44.1 ) $ 83.9 $ 168.0 $ 87.1 $
251.9 Transaction-related expense - - 4.4 - 4.4 Non-core operating
losses 21.2 15.0 1.1 21.2 16.1 Impairment of assets held for sale,
including goodwill 168.2 - - 168.2 - Acquisition and
integration-related items - (4.3 ) (4.1 ) - (8.4 ) Restructuring
costs - 63.3 15.9 - 79.2 Amortization of intangible assets
33.7 25.7 25.8 60.6 51.5 Adjusted
income from operations $ 179.0 $ 183.6 $ 211.1 $ 337.1 $ 394.7
Reconciliation of
Income Before Income Taxes to Adjusted Income Before Income
Taxes
(Loss) income before income tax (benefit) expense $ (132.1 ) $ 31.5
$ 114.4 $ (54.8 ) $ 145.9 Transaction-related expenses - - 4.4 -
4.4 Non-core operating losses 21.2 15.0 1.1 21.2 16.1 Impairment of
assets held for sale, including goodwill 168.2 - - 168.2 -
Acquisition and integration-related items - (4.3 ) (4.1 ) - (8.4 )
Restructuring costs - 63.3 15.9 - 79.2 Amortization of intangible
assets 33.7 25.7 25.8 60.6 51.5 FX gain from forward currency
contract (9.1 ) - - (9.1 ) - Financing charges in interest expense
44.2 2.4 2.4 47.1 4.8 Adjusted
income before adjusted income tax expense $ 126.1 $ 133.6 $ 159.9 $
233.2 $ 293.5
Reconciliation of
Income Taxes to Adjusted Income Taxes
Income tax (benefit) expense $ (24.4 ) $ (33.6 ) $ 20.9 $ (71.5 ) $
(12.7 ) Tax effect of the above adjustments* 26.6 28.5 13.0 32.0
41.5
Revaluation of deferred taxes and one-time
taxrepatriation charges associated with U.S. tax reform
- 1.5 - 41.7 1.5 Valuation allowances and other tax only items
- 32.1 (1.3 ) - 30.8 Adjusted
income tax expense $ 2.2 $ 28.5 $ 32.6 $ 2.2 $ 61.1
__________________________
*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.
Reconciliation of
Noncontrolling Interests to Adjusted Noncontrolling
Interests
Noncontrolling interests in income of consolidated subsidiaries,
net of tax $ (12.0 ) $ (13.6 ) $ (15.6 ) $ (25.1 ) $ (29.2 )
Acquisition and integration-related items, net of tax - 0.4 0.4 -
0.8 Amortization of intangible assets included in NCI, net of tax
(3.3 ) (3.0 ) (3.2 ) (5.8 ) (6.2
) Adjusted noncontrolling interests in income of consolidated
subsidiaries, net of tax $ (15.3 ) $ (16.2 ) $ (18.4 ) $ (30.9 ) $
(34.6 )
Reconciliation of
Net Income Attributable to AECOM to Adjusted Net Income
Attributable to AECOM
Net (loss) income attributable to AECOM $ (119.7 ) $ 51.5 $ 77.9 $
(8.4 ) $ 129.4 Transaction-related expenses - - 4.4 - 4.4 Non-core
operating losses 21.2 15.0 1.1 21.2 16.1 Impairment of assets held
for sale, including goodwill 168.2 - - 168.2 - Acquisition and
integration-related items - (3.9 ) (3.7 ) - (7.6 ) Restructuring
costs - 63.3 15.9 - 79.2 Amortization of intangible assets 33.7
25.7 25.8 60.6 51.5 FX gain from forward currency contract (9.1 ) -
- (9.1 ) - Financing charges in interest expense 44.2 2.4 2.4 47.1
4.8 Tax effect of the above adjustments
* (26.6 ) (28.5 )
(13.0 ) (32.0 ) (41.5 )
Revaluation of deferred taxes and one-time
taxrepatriation charges associated with U.S. tax reform
- (1.5 ) - (41.7 ) (1.5 ) Valuation allowances and other tax only
items - (32.1 ) 1.3 - (30.8 ) Amortization of intangible assets
included in NCI, net of tax (3.3 ) (3.0 ) (3.2
) (5.8 ) (6.2 ) Adjusted net income attributable to
AECOM $ 108.6 $ 88.9 $ 108.9 $ 200.1 $ 197.8
___________________________
*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.
AECOM
Regulation G Information
($ in millions, except per share
data)
Three Months Ended Six Months Ended
Mar 31,2018
Dec 31,2018
Mar 31,2019
Mar 31,2018
Mar 31,2019
Reconciliation of
Net Income per Diluted Share to Adjusted Net Income per Diluted
Share
Net (loss) income attributable to AECOM – per diluted share $ (0.75
) $ 0.32 $ 0.49 $ (0.05 ) $ 0.81 Per diluted share adjustments:
Transaction-related expenses - - 0.03 - 0.03 Non-core operating
losses 0.13 0.09 0.01 0.13 0.10 Impairment of assets held for sale,
including goodwill 1.04 - - 1.04 - Acquisition and
integration-related items - (0.02 ) (0.02 ) - (0.05 ) Restructuring
costs - 0.40 0.10 - 0.50 Amortization of intangible assets 0.21
0.16 0.16 0.37 0.32 FX gain from forward currency contract (0.06 )
- - (0.06 ) - Financing charges in interest expense 0.27 0.02 0.02
0.29 0.03 Tax effect of the above adjustments
* (0.15 ) (0.18
) (0.09 ) (0.19 ) (0.26 )
Revaluation of deferred taxes and one-time
taxrepatriation charges associated with U.S. tax reform
- (0.01 ) - (0.25 ) (0.01 ) Valuation allowances and other tax only
items - (0.20 ) 0.01 - (0.19 ) Amortization of intangible assets
included in NCI, net of tax (0.02 ) (0.02 )
(0.02 ) (0.04 ) (0.04 ) Adjusted net income
attributable to AECOM – per diluted share $ 0.67 $ 0.56 $ 0.69 $
1.24 $ 1.24 Weighted average shares outstanding – diluted 162.2
159.6 158.4 162.0 159.6
___________________________
*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.
Reconciliation of
EBITDA to Adjusted Income from Operations
EBITDA1
$ 24.4 $ 133.0
$ 217.6 $ 203.6
$ 350.6 Transaction-related expenses - - 4.4 - 4.4 Non-core
operating losses 21.2 15.0 1.1 21.2 16.1 Impairment of assets held
for sale, including goodwill 168.2 - - 168.2 - Acquisition and
integration-related items - (3.9 ) (3.7 ) - (7.6 ) Restructuring
costs - 63.3 15.9 - 79.2 FX gain from forward currency contract
(9.1 ) - - (9.1 ) -
Depreciation expense included in
non-coreoperating losses and acquisition andintegration-related
items above
(3.8 ) (0.2 ) (0.2 ) (3.8 ) (0.4
) Adjusted EBITDA $ 200.9 $ 207.2 $ 235.1 $ 380.1 $ 442.3 Other
income (12.5 ) (3.6 ) (4.3 ) (14.8 ) (7.9 ) FX gain from forward
currency contract 9.1 - - 9.1 -
Interest income2
3.4 2.7 3.0 5.2 5.7
Depreciation3
(37.2 ) (38.9 ) (41.3 ) (73.4 ) (80.2 ) Noncontrolling interests in
income of consolidated subsidiaries, net of tax 12.0 13.6 15.7 25.1
29.3 Acquisition and integration-related items included in NCI, net
of tax - (0.4 ) (0.4 ) - (0.8 ) Amortization of intangible assets
included in NCI, net of tax 3.3 3.0 3.3
5.8 6.3 Adjusted income from operations $ 179.0 $ 183.6 $
211.1 $ 337.1 $ 394.7
_____________________________
1
See Reconciliation of Net Income Attributable to AECOM to
EBITDA and to Adjusted 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) Three Months Ended
Six Months Ended
Mar 31,2018
Dec 31,2018
Mar 31,2019
Mar 31,2018
Mar 31,2019
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Design & Consulting Services Segment: Income from
operations $ 123.0 $ 119.5 $ 135.3 $ 208.3 $ 254.8 Non-core
operating losses/(income) 1.2 0.9 (1.2 ) 1.2 (0.3 ) Amortization of
intangible assets 6.2 6.0 6.1 12.4
12.1 Adjusted income from operations $ 130.4 $ 126.4 $ 140.2
$ 221.9 $ 266.6
Construction Services Segment: (Loss)
income from operations $ (180.3 ) $ 11.0 $ 23.6 $ (139.8 ) $ 34.6
Acquisition and integration-related items - (4.3 ) (4.1 ) - (8.4 )
Transaction-related expenses - - 4.4 - 4.4 Non-core operating
losses 20.0 14.1 2.3 20.0 16.4 Impairment of assets held for sale,
including goodwill 168.2 - - 168.2 - Amortization of intangible
assets 17.8 10.2 10.2 28.6 20.4
Adjusted income from operations $ 25.7 $ 31.0 $ 36.4 $ 77.0 $ 67.4
Management Services Segment: Income from operations $
43.4 $ 51.1 $ 51.3 $ 83.5 $ 102.4 Amortization of intangible assets
9.7 9.5 9.5 19.6 19.0 Adjusted
income from operations $ 53.1 $ 60.6 $ 60.8 $ 103.1 $ 121.4
AECOM Regulation G
Information
FY19 GAAP EPS
Guidance based on Adjusted EPS Guidance
Fiscal Year End
2019
(all figures approximate) GAAP EPS Guidance $1.89 to $2.24 Adjusted
EPS Excludes: Amortization of intangible assets $0.56 Acquisition
and integration-related items ($0.09) FY19 restructuring $0.50 to
$0.56 Financing charges in interest expense $0.06 Year-to-date
transaction-related expenses $0.03 Year-to-date non-core operating
losses $0.10 Tax effect of the above items* ($0.32) Tax expense
associated with U.S. tax reform ($0.18) Adjusted EPS Guidance $2.60
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.
FY19 GAAP Net
Income Guidance based on Adjusted EBITDA Guidance
Fiscal Year End
2019
(in millions, all figures approximate) GAAP Net Income Attributable
to AECOM Guidance* $302 to $358 Adjusted Net Income Attributable to
AECOM Excludes: Amortization of intangible assets, net of NCI $89
Acquisition and integration-related items ($15) FY19 restructuring
$80 to $90 Financing charges in interest expense $10 Year-to-date
transaction-related expenses $4 Year-to-date non-core operating
losses $16 Tax effect of the above items** ($51) Tax expense
associated with U.S. tax reform ($29) Adjusted Net Income
Attributable to AECOM $417 to $463 Adjusted EBITDA Excludes:
Adjusted interest expense $200 Depreciation $150 Taxes $150
Adjusted EBITDA Guidance $920 to $960 *Calculated based on
the mid-point of AECOM’s fiscal year 2019 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.
FY19 GAAP Tax
Rate Guidance based on Adjusted Tax Rate Guidance
(all figures approximate)
Fiscal Year End
2019
GAAP Tax Rate Guidance 13% Tax rate impact from adjustments
to GAAP earnings 9% Tax rate impact from inclusion of NCI deduction
3% Effective Tax Rate for Adjusted Earnings Guidance 25%
FY19 GAAP
Interest Expense Guidance based on Adjusted Interest Expense
Guidance
Fiscal Year End
2019
(in millions, all figures approximate) GAAP Interest Expense
Guidance $220 Financing charges in interest expense $10 Interest
income $10 Adjusted Interest Expense Guidance $200
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version on businesswire.com: https://www.businesswire.com/news/home/20190508005254/en/
Investors:Will GabrielskiVice President, Investor
Relations213.593.8208William.Gabrielski@aecom.com
Media:Brendan Ranson-WalshVice President, Global
Communications & Corporate
Responsibility213.996.2367Brendan.Ranson-Walsh@aecom.com
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