AECOM (NYSE:ACM), the world’s premier infrastructure firm, today
reported fourth quarter and full year fiscal year 2019 results.
Full Year Fiscal 2019
As Reported
Adjusted1 (Non-GAAP)
As Reported YoY %
Change
Adjusted YoY % Change
Revenue
$20,173
--
0%
--
Operating Income
$25
$868
(94%)
15%
Net Income
($261)
$440
NM
1%
EPS (Fully Diluted)
($1.66)
$2.75
NM
3%
EBITDA
--
$948
--
13%
Operating Cash Flow
$778
--
0%
--
Free Cash Flow
--
$6942
--
1%
Backlog
59,657
--
11%3
--
Fourth Quarter and Full Year Fiscal
2019 Accomplishments:
- Full year revenue of $20.2 billion increased slightly from the
prior year and set a new record for the Company; full year revenue
increased by 2% on an organic4 basis, primarily driven by continued
growth in the Americas design and Management Services
businesses.
- Full year net loss and diluted loss per share were $261 million
and $1.66, respectively, and included a $588 million non-cash
impairment to goodwill related to the Company’s at-risk,
self-perform construction businesses, which the Company intends to
exit; on an adjusted1 basis, diluted earnings per share was $2.75,
which was consistent with the Company’s expectations.
- Fourth quarter adjusted EBITDA1 increased by 12% over the prior
year to $261 million and full year adjusted EBITDA increased by 13%
to $948 million due primarily to higher margins and profitability
in the DCS segment, as well as higher profitability in the MS
segment.
- The fourth quarter DCS operating margin and adjusted operating
margin1 of 7.2% and 8.0%, respectively, set new records, and
resulted in 120 basis point increase for the full year record DCS
adjusted operating margin to 7.1%.
- The Company reiterated guidance for an adjusted operating
margin1 in the DCS segment in excess of 8.0% in fiscal 2020, which
would translate to an approximately 11.5% adjusted operating margin
on a net service revenue5 (NSR) basis.
- Fourth quarter operating cash flow of $794 million and free
cash flow2 of $779 million set new records for the Company and
enabled $413 million of debt reduction and resulted in net
leverage6 of 2.2x, which is within the Company’s 2.0x - 2.5x target
range.
- Full year free cash flow2 of $694 million marked the fifth
consecutive year of free cash flow generation in excess of $600
million; the Company has now generated $3.4 billion of cumulative
free cash flow since fiscal 2015.
Pro Forma Professional
Services7 Full Year Fiscal 2019
Accomplishments:
The Company’s presentation of its non-GAAP financial information
for its pro forma Professional Services business reflects the
results of the DCS, Construction Management and AECOM Capital
businesses, and excludes the Management Services business and
at-risk, self-perform businesses within the Construction Services
segment, which the Company intends to divest.
Full Year Fiscal 2019
($ in millions)
GAAP
Adjusted1
(Non-GAAP)
GAAP
YoY % Change
Adjusted YoY
% Change
Revenue
$13,642
--
(2%)
--
Net Service Revenue5
--
$6,225
--
0%
EBITDA
--
$662
--
25%
EBITDA Margin (NSR)
--
10.6%
--
+210 bps
Backlog
--
$36,497
--
19%3
- Full year revenue was $13.6 billion and full year net service
revenue5 was $6.2 billion, which increased by 2% on an organic4
basis due to solid execution, strong end market trends that
resulted in growth in self-perform revenue.
- Adjusted EBITDA1 of $662 million in the full year increased by
25% over the prior year, reflecting a growth rate significantly
above the enterprise.
- Adjusted EBITDA1 margin on net service revenue5 was 10.6% in
the full year, an increase of 210 basis points over the prior year,
reflecting the combined high margins on self-perform work in the
Company’s Professional Services7 businesses, the benefits of the
restructuring actions completed earlier in the fiscal year and
increased profitability in both the Design & Consulting
Services and the Construction Management businesses.
Fiscal 2020 Outlook and Update on
Strategic Value Creation Actions:
- AECOM reiterated its fiscal 2020 enterprise financial guidance,
including its expectation for adjusted EBITDA1 of between $1,040
million and $1,080 million.
- This guidance includes approximately $10 million from AECOM
Capital contributions.
- The Company expects free cash flow, excluding expected cash
uses for restructuring and timing impacts related to the sale of
the Management Services business, to be within the Company’s annual
$600 million to $800 million range.
- The Company reiterated its fiscal 2020 financial guidance for
its pro forma Professional Services7 adjusted EBITDA1 of between
$720 million and $760 million, which would represent 12%
year-over-year growth at the mid-point and reflects underlying
growth and the benefits of the Company’s ongoing strategic value
enhancing initiatives, including:
- Restructuring initiatives and expanded use of best-cost design
and shared service centers to enhance profitability.
- Actions to de-risk and simplify the Company, including the
planned exit of more than 30 countries, planned and actual business
divestments, extraction from international at-risk construction,
and AECOM Capital’s successful closing of a private equity real
estate fund with Canyon Partners that limits AECOM’s future balance
sheet contributions.
- The Company reiterated its forecast for unlevered free cash
flow8, excluding expected cash use for restructuring in fiscal
2020, to approximate 75% of adjusted EBITDA on a normalized
basis.
- In addition, on October 14th, the Company announced an
agreement to sell its Management Services business for a purchase
price of $2.405 billion, reflecting a premium valuation.
- The Company expects the transaction to close in the second
quarter of fiscal 2020, subject to regulatory approvals and other
customary closing conditions.
“Our strong fiscal 2019 results are a testament to the impacts
of the strategic actions we began executing two years ago to
enhance profitability and maximize shareholder value,” said Michael
S. Burke, AECOM’s chairman and chief executive officer. “We
delivered a record quarterly margin in the DCS segment in the
fourth quarter and for the full year. We also exceeded the
mid-point of our adjusted EBITDA guidance with 13% growth for the
full year. Importantly, this growth was driven by 25% growth in our
Professional Services business. We significantly accelerated our
value creation strategy with the recently announced agreement to
sell the MS business at a premium valuation. The proceeds from this
transaction, combined with our record fourth quarter cash flow, are
expect to result in substantial capital to deploy for debt
reduction and share repurchases in a higher-returning, lower-risk
Professional Services business at a highly attractive
valuation.”
“I am proud of the entire organization for delivering a strong
year of financial performance and record quarterly free cash flow,
which continues our history of strong cash flow performance,” said
W. Troy Rudd, AECOM’s chief financial officer. “Importantly, we are
delivering profitable growth and expect another year of strong
results in fiscal 2020, which we expect will provide significant
opportunities to return capital to shareholders through stock
repurchases under our $1 billion Board authorization.”
Wins and Backlog
Wins in the fourth quarter were $6.3 billion, resulting in a 1.2
book-to-burn ratio9, including a greater than 1 book-to-burn ratio
in all three segments. Full year wins of $27.5 billion reflected a
1.3 book-to-burn ratio and similarly strong contributions from
across the Company. Total backlog of nearly $60 billion is up 11%3
over the prior year. Importantly, the Company’s backlog in its pro
forma Professional Services7 business, which comprise the DCS and
Construction Management businesses, is at more than $36 billion, a
19% increase from the prior year, driven by a 1.4 book-to-burn
ratio in the year and 6% growth in DCS contracted backlog to a new
high.
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 fourth quarter was $2.1 billion.
Constant-currency organic4 revenue declined by 2%, with underlying
growth offset by an approximately 500 basis point negative impact
from lower U.S. Virgin Island storm recovery work. Full year
revenue was $8.3 billion, a 1% increase over the prior year. Full
year constant-currency organic revenue increased by 3%.
Net service revenue5 was $1.4 billion and $5.7 billion in the
fourth quarter and full year, respectively, and on a
constant-currency organic basis increased by 2% and increased by
1%. Performance included continued underlying growth in the
Americas design business and positive growth in international
design markets.
Fourth quarter and full year operating income was $150 million
and $552 million, respectively. On an adjusted basis, fourth
quarter and full year operating income1 was $166 million and $584
million, respectively. The fourth quarter adjusted operating margin
of 8.0% reflected a 190 basis point increase over the prior year
and contributed to a full year adjusted operating margin of 7.1%,
which marked a 120 basis point increase over the prior year and
exceeded the Company’s guidance. Both the fourth quarter and full
year adjusted operating margins set new records, respectively. This
strong margin performance was the result of the successful
completion of $225 million of G&A reductions, ongoing
additional restructuring actions, solid execution, continued
favorable end markets trends and strong backlog performance.
Construction Services (CS)
The CS segment provides construction services for energy,
sports, commercial, industrial, and public and private
infrastructure clients.
Revenue in the fourth quarter was $1.9 billion.
Constant-currency organic4 revenue decreased by 6%. Full year
revenue was $7.8 billion, a decrease of 3% on an organic basis,
which was primarily due to the completion of large fixed-priced
Power projects and as a large combined cycle gas power plant
project neared completion and was not replaced with new work due to
the Company’s decision to extract itself from the fixed priced
combined cycle gas power plant market.
Net service revenue5 in the Construction Management business was
$155 million and $547 million in the fourth quarter and full year,
respectively. The performance was due primarily to the phasing of
recent wins, which are beginning construction and are expected to
result in revenue growth in fiscal 2020.
Fourth quarter and full year operating loss was $569 million and
$506 million, respectively, primarily due to a non-cash goodwill
charge relating to the Company’s at-risk, self-perform construction
businesses as described above. On an adjusted basis, fourth quarter
and full year operating income1 was $36 million and $153 million,
respectively. Full year adjusted operating income declined slightly
from the prior year, reflecting a decline in the Power business,
which was partially offset by strong execution in the Construction
Management business, which maintains nearly four years of revenue
visibility in backlog and is expected to deliver double-digit
earnings growth in fiscal 2020 as recent large wins begin
construction.
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 fourth quarter was $1.1 billion, a 7% increase
over the prior year. Organic4 revenue in the quarter increased by
8%. Full year revenue was $4.1 billion, an 11% increase over the
prior year. Full year organic revenue increased by 12%.
Operating income was $51 million and $206 million in the fourth
quarter and full year, respectively. On an adjusted basis,
operating income1 was $70 million and $253 million in the fourth
quarter and full year, respectively. Results for the fourth quarter
and the full year were consistent with expectations and represented
strong execution across the portfolio of projects.
AECOM Capital (ACAP)
The ACAP segment invests in and develops real estate projects.
Revenue in the fourth quarter was $1 million and operating income
was $11 million. Full year revenue was $8 million and operating
income was $21 million.
In the fourth quarter, AECOM Capital Real Estate achieved the
final close on a $500 million private equity fund with Canyon
Partners targeting build-to-core investments in the top 25 markets
in the U.S. across a range of property types. Where applicable,
AECOM will also look to provide design, construction management and
engineering services to the respective projects.
Tax Rate
The effective tax rate was 5.1% and 0.1% in the fourth quarter
and full year, respectively. On an adjusted basis, the effective
tax rate was 25.0% and 24.4% in the fourth quarter and full year,
respectively. The adjusted tax rate was derived by re-computing the
annual effective tax rate on earnings from adjusted net income.10
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 fourth quarter was $794 million and
free cash flow2 was $779 million, both of which set new records for
the Company. For the full year, AECOM generated operating cash flow
of $778 million and free cash flow of $694 million, which marked
the fifth consecutive year of at least $600 million of free cash
flow.
Balance Sheet and Capital
Allocation
As of September 30, 2019, AECOM had $1.08 billion of total cash
and cash equivalents, $3.4 billion of total debt, $2.4 billion of
net debt and $1.33 billion in unused capacity under its $1.35
billion revolving credit facility. Total debt declined by $413
million compared to the third quarter, resulting in a net leverage6
ratio of 2.2.
Restructuring Update
Consistent with its previously-announced restructuring actions
that are expected to deliver at least 210 basis points of adjusted
operating margin expansion in the DCS segment in fiscal 2020
compared to fiscal 2018 and to address stranded costs associated
with the sale of the Management Services business and the intended
exit of at-risk, self-perform construction businesses, the Company
expects to incur the following in fiscal 2020:
- Restructuring expenses of between $130 million and $160
million.
- Total cash costs of between $160 million to $180 million,
including capital expenditures associated with real estate
restructuring of approximately $40 million.
- Accelerated depreciation of $40 million associated with the
transition of a project management tool.
The Company estimates total stranded costs associated with the
Management Services sale of approximately $40 million, with a
substantial majority expected to be eliminated by the end of fiscal
2020, with the balance to be eliminated in fiscal 2021.
Expected Impacts of Accounting
Changes
Expected and actual financial impacts of the adoption of the new
lease accounting standard (ASC 842):
- The Company incurred in the fourth quarter a one-time non-cash
leasehold impairment of approximately $27 million related to its
real estate restructuring.
- An approximately $125 million one-time non-cash reduction to
equity, to be incurred in the first quarter.
Fiscal Year 2020 Investor
Day
AECOM also announced today that it will host an Investor Day for
fiscal year 2020 in New York City on Tuesday, December 10, 2019
beginning at 10 A.M. Eastern Time.
Mr. Burke and Mr. Rudd will provide an update on business
trends, discuss the Company’s long-term financial outlook and the
strategic actions that have been executed and continued to be
executed to best position AECOM to capitalize on market momentum
across the business. Steve Morriss, AECOM’s president of its Design
& Consulting Services – Americas group, and Lara Poloni,
AECOM’s chief executive of its EMEA business, will also review the
Company’s competitive differentiators and how the Company is
leveraging its industry-leading capabilities to capitalize on
strong market opportunities. A live webcast of the event and a
replay will be available online at https://investors.aecom.com.
In addition, innovation leaders from across the Company will be
present following the conclusion of the webcast to discuss and
provide demonstrations of cutting-edge technology and client
solutions.
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 Excludes the impact of non-operating items, such as
acquisition and integration-related items, transaction-related
expenses and restructuring costs and other items. See Regulation G
Information for a complete 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 Revenue, net of subcontract
costs. 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 A non-GAAP measure comprised of the Company’s Design
& Consulting Services, Construction Management and AECOM
Capital businesses, and excludes expected stranded costs associated
with planned separations and divestitures that are expected to be
eliminated. 8 Unlevered free cash flow is derived by adding back
after-tax adjusted interest expense at a 25% tax rate and is after
distributions to non-controlling interests. 9 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. 10 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.
About AECOM
AECOM (NYSE:ACM) is the world’s premier infrastructure firm,
delivering professional services across the project lifecycle –
from planning, design and engineering to consulting and
construction management. We partner with our clients in the public
and private sectors to solve their most complex challenges and
build legacies for generations to come. On projects spanning
transportation, buildings, water, governments, energy and the
environment, our teams are driven by a common purpose to deliver a
better world. AECOM is a Fortune 500 firm with revenue of
approximately $20.2 billion during fiscal year 2019. 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, restructuring costs, amortization costs, or other
financial items, any statements of the plans, strategies and
objectives for future operations, profitability, strategic value
creation, exposure to self-perform at-risk construction, risk
profile and investment strategies, any statements regarding future
economic conditions or performance and any statements with respect
to the proposed sale of the Management Services business.
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 and tariffs;
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; uncertainties as to the timing and
completion of the proposed sale of our Management Services business
or whether it will be completed; risks associated with the impact
or terms of the proposed sale; risks associated with the benefits
and costs of the proposed sale of our Management Services business,
including the risk that the expected benefits of the proposed sale
or any contingent purchase price will not be realized within the
expected time frame, in full or at all, and the risk that
conditions to the proposed sale will not be satisfied and/or that
the proposed sale will not be completed within the expected time
frame, on the expected terms or at all; the risk that any consents
or regulatory or other approvals required in connection with the
proposed sale of our Management Services business will not be
received or obtained within the expected time frame, on the
expected terms or at all; the risk that the financing intended to
fund the proposed sale of our Management Services business may not
be obtained; the risk that costs of restructuring transactions and
other costs incurred in connection with the proposed sale of our
Management Services business will exceed our estimates or otherwise
adversely affect our business or operations; the impact of the
proposed sale of our Management Services business on our businesses
and the risk that consummating the proposed sale may be more
difficult, time-consuming or costly than expected; 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.
Our presentation of pro forma Professional Services fiscal year
2019 metrics includes the results of the DCS, Construction
Management and AECOM Capital businesses, and excludes the
Management Services business and at-risk, self-perform businesses
within the Construction Services segment, which the Company intends
to divest. Pro forma Professional Services also excludes expected
stranded costs associated with planned separations and divestitures
that are expected to be eliminated. The pro forma Professional
Services metrics reflect our current estimates based on information
available as of this release. The pro forma Professional Services
financial metrics may differ materially from the presented amounts
due to future dispositions or divestures of our Management Service
business and our at-risk, self-perform construction businesses and
other unexpected developments or adjustments that may arise. We
believe this information helps provide additional insight into the
underlying trends of our business when comparing current
performance against prior periods and the expected impact of the
future dispositions or divestures of our Management Service
business and our at-risk, self-perform construction businesses.
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, pro forma Professional Services adjusted
EBITDA, adjusted EPS 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
(in thousands, except per
share data)
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Sep 30, 2019
% Change
Sep 30, 2018
Sep 30, 2019
% Change
Revenue
$
5,305,850
$
5,115,608
(3.6
)%
$
20,155,512
$
20,173,329
0.1
%
Cost of revenue
5,117,804
4,877,382
(4.7
)%
19,504,863
19,359,884
(0.7
)%
Gross profit
188,046
238,226
26.7
%
650,649
813,445
25.0
%
Equity in earnings of joint ventures
25,512
13,960
(45.3
)%
81,133
80,990
(0.2
)%
General and administrative expenses
(35,741
)
(37,256
)
4.2
%
(135,787
)
(148,123
)
9.1
%
Restructuring costs
—
(16,276
)
NM*
—
(95,446
)
NM
Loss on disposal activities
(800
)
(2,977
)
272.1
%
(2,949
)
(10,381
)
252.0
%
Impairment of long-lived assets, including
goodwill
—
(615,400
)
NM
(168,178
)
(615,400
)
265.9
%
Income (loss) from operations
177,017
(419,723
)
(337.1
)%
424,868
25,085
(94.1
)%
Other income
2,593
4,040
55.8
%
20,135
16,789
(16.6
)%
Interest expense
(55,564
)
(56,376
)
1.5
%
(267,519
)
(225,994
)
(15.5
)%
Income (loss) before income tax expense
(benefit)
124,046
(472,059
)
(480.6
)%
177,484
(184,120
)
(203.7
)%
Income tax expense (benefit)
18,719
(24,076
)
(228.6
)%
(19,643
)
(130
)
(99.3
)%
Net income (loss)
105,327
(447,983
)
(525.3
)%
197,127
(183,990
)
(193.3
)%
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
(21,350
)
(26,169
)
22.6
%
(60,659
)
(77,060
)
27.0
%
Net income (loss) attributable to
AECOM
$
83,977
$
(474,152
)
(664.6
)%
$
136,468
$
(261,050
)
(291.3
)%
Net income (loss) attributable to AECOM
per share:
Basic
$
0.53
$
(3.01
)
(667.9
)%
$
0.86
$
(1.66
)
(293.0
)%
Diluted
$
0.52
$
(3.01
)
(678.8
)%
$
0.84
$
(1.66
)
(297.6
)%
Weighted average shares outstanding:
Basic
158,605
157,709
(0.6
)%
159,101
157,044
(1.3
)%
Diluted
161,765
157,709
(2.5
)%
162,261
157,044
(3.2
)%
* NM — Not Meaningful
Balance Sheet and Cash Flow
Information
(in thousands)
September 30, 2018
September 30, 2019
Balance Sheet Information:
Total cash and cash equivalents
$
886,733
$
1,080,354
Accounts receivable and contract assets –
net
5,468,821
5,777,652
Working capital
997,645
1,072,891
Total debt, excluding unamortized debt
issuance costs
3,673,463
3,439,057
Total assets
14,681,131
14,461,591
Total AECOM stockholders’ equity
4,092,780
3,690,576
AECOM
Reportable Segments
(in thousands)
Design & Consulting
Services
Construction Services
Management Services
AECOM Capital
Corporate
Total
Three Months Ended September 30,
2019
Revenue
$
2,082,474
$
1,948,268
$
1,083,530
$
1,336
$
-
$
5,115,608
Cost of revenue
1,924,483
1,929,090
1,023,809
-
-
4,877,382
Gross profit
157,991
19,178
59,721
1,336
-
238,226
Equity in earnings of joint ventures
3,930
2,211
(1,924
)
9,743
-
13,960
General and administrative expenses
-
-
-
(27
)
(37,229
)
(37,256
)
Restructuring costs
-
-
-
-
(16,276
)
(16,276
)
Gain (loss) on disposal activities
3,589
-
(6,566
)
-
-
(2,977
)
Impairment of long-lived assets, including
goodwill
(15,200
)
(590,500
)
-
-
(9,700
)
(615,400
)
Income (loss) from operations
$
150,310
$
(569,111
)
$
51,231
$
11,052
$
(63,205
)
$
(419,723
)
Gross profit as a % of revenue
7.6
%
1.0
%
5.5
%
-
-
4.7
%
Three Months Ended September 30,
2018
Revenue
$
2,171,310
$
2,118,303
$
1,016,237
$
-
$
-
$
5,305,850
Cost of revenue
2,046,205
2,100,849
970,750
-
-
5,117,804
Gross profit
125,105
17,454
45,487
-
-
188,046
Equity in earnings of joint ventures
1,311
4,644
4,357
15,200
-
25,512
General and administrative expenses
-
-
-
(2,059
)
(33,682
)
(35,741
)
Loss on disposal activities
-
(800
)
-
-
-
(800
)
Income (loss) from operations
$
126,416
$
21,298
$
49,844
$
13,141
$
(33,682
)
$
177,017
Gross profit as a % of revenue
5.8
%
0.8
%
4.5
%
-
-
3.5
%
AECOM
Reportable Segments
(in thousands)
Design & Consulting
Services
Construction Services
Management Services
AECOM Capital
Corporate
Total
Twelve Months Ended September 30,
2019
Revenue
$
8,268,231
$
7,778,791
$
4,118,108
$
8,199
$
-
$
20,173,329
Cost of revenue
7,722,266
7,723,376
3,914,242
-
-
19,359,884
Gross profit
545,965
55,415
203,866
8,199
-
813,445
Equity in earnings of joint ventures
17,953
36,501
8,796
17,740
-
80,990
General and administrative expenses
-
-
-
(4,926
)
(143,197
)
(148,123
)
Restructuring costs
-
-
-
-
(95,446
)
(95,446
)
Gain (loss) on disposal activities
3,589
(7,404
)
(6,566
)
-
-
(10,381
)
Impairment of long-lived assets, including
goodwill
(15,200
)
(590,500
)
-
-
(9,700
)
(615,400
)
Income (loss) from operations
$
552,307
$
(505,988
)
$
206,096
$
21,013
$
(248,343
)
$
25,085
Gross profit as a % of revenue
6.6
%
0.7
%
5.0
%
-
-
4.0
%
Contracted backlog
$
9,682,492
$
10,547,558
$
4,066,106
$
-
$
-
$
24,296,156
Awarded backlog
6,560,308
12,470,263
13,999,036
-
-
33,029,607
Unconsolidated JV backlog
-
1,309,825
1,021,595
-
-
2,331,420
Total backlog
$
16,242,800
$
24,327,646
$
19,086,737
$
-
$
-
$
59,657,183
Twelve Months Ended September 30,
2018
Revenue
$
8,223,174
$
8,238,852
$
3,693,486
$
-
$
-
$
20,155,512
Cost of revenue
7,783,863
8,198,480
3,522,520
-
-
19,504,863
Gross profit
439,311
40,372
170,966
-
-
650,649
Equity in earnings of joint ventures
15,811
21,534
28,588
15,200
-
81,133
General and administrative expenses
-
-
-
(11,228
)
(124,559
)
(135,787
)
Loss on disposal activities
-
(2,949
)
-
-
-
(2,949
)
Impairment of assets held for sale,
including goodwill
-
(168,178
)
-
-
-
(168,178
)
Income (loss) from operations
$
455,122
$
(109,221
)
$
199,554
$
3,972
$
(124,559
)
$
424,868
Gross profit as a % of revenue
5.3
%
0.5
%
4.6
%
-
-
3.2
%
Contracted backlog
$
9,133,465
$
9,333,822
$
3,395,460
$
-
$
-
$
21,862,747
Awarded backlog
7,525,817
7,144,572
14,577,130
-
-
29,247,519
Unconsolidated JV backlog
-
2,025,269
934,147
-
-
2,959,416
Total backlog
$
16,659,282
$
18,503,663
$
18,906,737
$
-
$
-
$
54,069,682
AECOM
Regulation G
Information
(in millions)
Reconciliation of
Revenue to Amounts Provided by Acquired Companies
Three Months Ended September
30, 2019
Twelve Months Ended September
30, 2019
Total
Provided by Acquired
Companies
Excluding Effect of Acquired
Companies
Total
Provided by Acquired
Companies
Excluding Effect of Acquired
Companies
Revenue
AECOM Consolidated
$
5,115.6
$
-
$
5,115.6
$
20,173.3
$
35.8
$
20,137.5
Design & Consulting Services
2,082.5
-
2,082.5
8,268.2
-
8,268.2
Construction Services
1,948.3
-
1,948.3
7,778.8
35.8
7,743.0
Management Services
1,083.5
-
1,083.5
4,118.1
-
4,118.1
AECOM Capital
1.3
-
1.3
8.2
-
8.2
Reconciliation of
Revenue to Net Service Revenue, Net of Other Direct
Costs
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Design & Consulting
Services
Revenue
$
2,171.3
$
2,082.5
$
8,223.2
$
8,268.2
Less: subcontract costs
755.5
671.8
2,519.3
2,598.0
Net service revenue
$
1,415.8
$
1,410.7
$
5,703.9
$
5,670.2
Construction Management
Revenue
$
1,392.4
$
1,429.7
$
5,656.1
$
5,366.0
Less: subcontract costs
1,277.2
1,274.3
5,158.2
4,818.8
Net service revenue
$
115.2
$
155.4
$
497.9
$
547.2
Reconciliation of
Net Income Attributable to AECOM to EBITDA, Adjusted EBITDA and Pro
Forma Professional Services Adjusted EBITDA
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Net income (loss) attributable to
AECOM
$ 84.0
$ 83.7
$ (474.2
)
$ 136.5
$ (261.1
)
Income tax expense (benefit)
18.8
36.6
(24.0
)
(19.6
)
(0.1
)
Income (loss) attributable to AECOM before
income taxes
102.8
120.3
(498.2
)
116.9
(261.2
)
Depreciation and amortization expense1
68.5
66.1
95.3
281.0
292.1
Interest income2
(2.1
)
(3.5
)
(3.2
)
(9.6
)
(12.4
)
Interest expense3
52.5
53.3
53.0
249.4
215.2
EBITDA
221.7
236.2
(353.1
)
637.7
233.7
Noncore operating losses & transaction
related expenses
17.5
4.6
10.7
57.4
35.8
Impairment of long-lived assets, including
goodwill
-
-
615.4
168.2
615.4
Acquisition and integration-related
items
(4.4
)
(3.8
)
(3.9
)
(10.9
)
(15.3
)
Restructuring costs
-
-
16.2
-
95.4
Loss on disposal activities
0.8
7.4
3.0
2.9
10.4
FX gain from forward currency contract
-
-
-
(9.1
)
-
Depreciation expense included in noncore
operating losses and acquisition and integration-related items
(2.2
)
(0.2
)
(27.2
)
(9.7
)
(27.8
)
Adjusted EBITDA
$ 233.4
$ 244.2
$ 261.1
836.5
947.6
MS & at-risk, self-perform
construction
308.8
286.1
Pro forma Professional Services adjusted
EBITDA
$
527.7
$
661.5
1 Includes the amount for
noncontrolling interests in consolidated subsidiaries 2
Included in other income 3 Excludes related amortization
AECOM
Regulation G
Information
(in millions)
Reconciliation of
Total Debt to Net Debt
Balances at:
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Short-term debt
$ 8.4
$ 44.9
$ 47.8
Current portion of long-term debt
134.7
114.7
69.4
Long-term debt, gross
3,530.4
3,692.9
3,321.9
Total debt, excluding unamortized debt
issuance costs
3,673.5
3,852.5
3,439.1
Less: Total cash and cash equivalents
886.7
793.6
1,080.4
Net debt
$ 2,786.8
$ 3,058.9
$ 2,358.7
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Net cash provided by operating
activities
$
531.9
$
76.9
$
793.7
$
774.6
$
777.6
Capital expenditures, net
(21.2
)
(24.7
)
(14.3
)
(86.9
)
(83.4
)
Free cash flow
$
510.7
$
52.2
$
779.4
$
687.7
$
694.2
Fiscal Years Ended Sep
30,
2015
2016
2017
2018
2019
Net cash provided by operating
activities
$
764.4
$
814.2
$
696.7
$
774.6
$
777.6
Capital expenditures, net
(69.4
)
(136.8
)
(78.5
)
(86.9
)
(83.4
)
Free cash flow
$
695.0
$
677.4
$
618.2
$
687.7
$
694.2
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Reconciliation of
Income from Operations to Adjusted Income from
Operations
Income (loss) from operations
$
177.0
$
192.9
$
(419.7
)
$
424.9
$
25.1
Noncore operating losses & transaction
related expenses
17.5
4.6
10.7
57.2
35.8
Impairment of long-lived assets, including
goodwill
-
-
615.4
168.2
615.4
Acquisition and integration-related
items
(4.8
)
(4.2
)
(4.2
)
(12.7
)
(16.8
)
Restructuring costs
-
-
16.2
-
95.4
Loss on disposal activities
0.8
7.4
3.0
2.9
10.4
Amortization of intangible assets
27.4
25.7
25.1
116.4
102.3
Adjusted income from operations
$
217.9
$
226.4
$
246.5
$
756.9
$
867.6
Reconciliation of
Income Before Income Taxes to Adjusted Income Before Income
Taxes
Income (loss) before income tax expense
(benefit)
$
124.1
$
142.0
$
(472.0
)
$
177.5
$
(184.1
)
Noncore operating losses & transaction
related expenses
17.4
4.6
10.7
57.2
35.8
Impairment of long-lived assets, including
goodwill
-
-
615.4
168.2
615.4
Acquisition and integration-related
items
(4.8
)
(4.2
)
(4.2
)
(12.7
)
(16.8
)
Restructuring costs
-
-
16.2
-
95.4
Loss on disposal activities
0.8
7.4
3.0
2.9
10.4
Amortization of intangible assets
27.4
25.7
25.1
116.4
102.3
FX gain from forward currency contract
-
-
-
(9.1
)
-
Financing charges in interest expense
2.9
2.4
3.4
52.6
10.6
Adjusted income before income tax
expense
$
167.8
$
177.9
$
197.6
$
553.0
$
669.0
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Reconciliation of
Income Taxes to Adjusted Income Taxes
Income tax expense (benefit)
$
18.7
$
36.6
$
(24.0
)
$
(19.7
)
$
(0.1
)
Tax effect of the above adjustments*
9.4
5.8
70.5
43.7
117.8
Revaluation of deferred taxes and one-time
tax repatriation charges associated with U.S. tax reform
6.1
-
-
47.8
-
Valuation allowances and other tax only
items
(25.0
)
(4.0
)
(4.3
)
(25.0
)
24.0
Adjusted income tax expense
$
9.2
$
38.4
$
42.2
$
46.8
$
141.7
*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 Interest to Adjusted Noncontrolling
Interests
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
$
(21.4
)
$
(21.7
)
$
(26.2
)
$
(60.7
)
$
(77.1
)
Acquisition and integration-related items,
net of tax
0.4
0.4
0.3
1.8
1.5
Amortization of intangible assets included
in NCI, net of tax
(3.3
)
(2.9
)
(3.1
)
(11.9
)
(12.2
)
Adjusted noncontrolling interests in
income of consolidated subsidiaries, net of tax
$
(24.3
)
$
(24.2
)
$
(29.0
)
$
(70.8
)
$
(87.8
)
Reconciliation of
Net Income Attributable to AECOM to Adjusted Net Income
Attributable to AECOM
Net income (loss) attributable to
AECOM
$
84.0
$
83.7
$
(474.2
)
$
136.5
$
(261.1
)
Noncore operating losses & transaction
related expenses
17.5
4.6
10.7
57.2
35.8
Impairment of long-lived assets, including
goodwill
-
-
615.4
168.2
615.4
Acquisition and integration-related
items
(4.4
)
(3.8
)
(3.9
)
(10.9
)
(15.3
)
Restructuring costs
-
-
16.2
-
95.4
Loss on disposal activities
0.8
7.4
3.0
2.9
10.4
Amortization of intangible assets
27.4
25.7
25.1
116.4
102.3
FX gain from forward currency contract
-
-
-
(9.1
)
-
Financing charges in interest expense
2.9
2.4
3.4
52.6
10.6
Tax effect of the above adjustments*
(9.4
)
(5.8
)
(70.5
)
(43.7
)
(117.8
)
Revaluation of deferred taxes and one-time
tax repatriation charges associated with U.S. tax reform
(6.1
)
-
-
(47.8
)
-
Valuation allowances and other tax only
items
25.0
4.0
4.3
25.0
(24.0
)
Amortization of intangible assets included
in NCI, net of tax
(3.3
)
(2.9
)
(3.0
)
(11.9
)
(12.1
)
Adjusted net income attributable to
AECOM
$
134.4
$
115.3
$
126.5
$
435.4
$
439.6
* 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.
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Reconciliation of Net Income per
Diluted Share to Adjusted Net Income per Diluted Share
Net income (loss) attributable to AECOM –
per diluted share
$
0.52
$
0.52
$
(3.01
)
$
0.86
$
(1.66
)
Per diluted share adjustments:
Noncore operating losses & transaction
related expenses
0.11
0.03
0.07
0.35
0.22
Impairment of long-lived assets, including
goodwill
-
-
3.82
1.04
3.85
Acquisition and integration-related
items
(0.03
)
(0.02
)
(0.02
)
(0.07
)
(0.10
)
Restructuring costs
-
-
0.10
-
0.60
Loss on disposal activities
-
0.05
0.02
0.02
0.07
Amortization of intangible assets
0.17
0.16
0.16
0.72
0.64
FX gain from forward currency contract
-
-
-
(0.06
)
-
Financing charges in interest expense
0.02
0.02
0.02
0.32
0.07
Tax effect of the above adjustments*
(0.06
)
(0.05
)
(0.38
)
(0.29
)
(0.71
)
Revaluation of deferred taxes and one-time
tax repatriation charges associated with U.S. tax reform
(0.03
)
-
-
(0.29
)
-
Valuation allowances and other tax only
items
0.15
0.03
0.03
0.15
(0.15
)
Amortization of intangible assets included
in NCI, net of tax
(0.02
)
(0.02
)
(0.02
)
(0.07
)
(0.08
)
Adjusted net income attributable to AECOM
– per diluted share
$
0.83
$
0.72
$
0.79
$
2.68
$
2.75
Weighted average shares outstanding –
diluted
161.8
159.8
160.9
162.3
159.7
* 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
EBITDA(1)
$
221.7
$
236.2
$
(353.1
)
$
637.7
$
233.7
Noncore operating losses & transaction
related expenses
17.5
4.6
10.7
57.4
35.8
Impairment of long-lived assets, including
goodwill
-
-
615.4
168.2
615.4
Acquisition and integration-related
items
(4.4
)
(3.8
)
(3.9
)
(10.9
)
(15.3
)
Restructuring costs
-
-
16.2
-
95.4
Loss on disposal activities
0.8
7.4
3.0
2.9
10.4
FX gain from forward currency contract
-
-
-
(9.1
)
-
Depreciation expense included in noncore
operating losses, acquisition and integration expenses above
(2.2
)
(0.2
)
(27.2
)
(9.7
)
(27.8
)
Adjusted EBITDA
$
233.4
$
244.2
$
261.1
$
836.5
$
947.6
Other income
(2.6
)
(4.8
)
(4.1
)
(20.1
)
(16.8
)
FX gain from forward currency contract
-
-
-
9.1
-
Interest income(2)
2.1
3.5
3.2
9.6
12.4
Depreciation(3)
(39.3
)
(40.5
)
(42.7
)
(149.0
)
(163.4
)
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
21.4
21.6
26.2
60.7
77.1
Acquisition and integration-related items
included in NCI, net of tax
(0.4
)
(0.4
)
(0.3
)
(1.8
)
(1.5
)
Amortization of intangible assets included
in NCI, net of tax
3.3
2.8
3.1
11.9
12.2
Adjusted income from operations
$
217.9
$
226.4
$
246.5
$
756.9
$
867.6
1 See Reconciliation of Net Income
Attributable to AECOM to EBITDA and to Adjusted EBITDA
2
Included in other income
3 Excludes depreciation from
noncore operating losses and acquisition and integration-related
items
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Twelve Months Ended
Sep 30, 2018
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
Sep 30, 2019
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Design & Consulting Services
Segment:
Income from operations
$
126.4
$
147.2
$
150.3
$
455.1
$
552.3
Noncore operating losses & transaction
related expenses
0.9
(2.0
)
(1.6
)
2.8
(3.9
)
Impairment of long-lived assets, including
goodwill
-
-
15.2
-
15.2
Gain on disposal activities
-
-
(3.6
)
-
(3.6
)
Amortization of intangible assets
5.8
6.0
6.0
24.6
24.1
Adjusted income from operations
$
133.1
$
151.2
$
166.3
$
482.5
$
584.1
Construction Services Segment:
Income (loss) from operations
$
21.3
$
28.5
$
(569.1
)
$
(109.2
)
$
(506.0
)
Acquisition and integration-related
items
(4.8
)
(4.2
)
(4.2
)
(12.7
)
(16.8
)
Noncore operating losses & transaction
related expenses
16.6
7.0
9.3
54.5
37.1
Impairment of long-lived assets, including
goodwill
-
-
590.5
168.2
590.5
Loss on disposal activities
0.8
7.4
-
2.9
7.4
Amortization of intangible assets
11.7
10.3
9.6
52.6
40.3
Adjusted income from operations
$
45.6
$
49.0
$
36.1
$
156.3
$
152.5
Management Services Segment:
Income from operations
$
49.9
$
52.5
$
51.2
$
199.6
$
206.1
Noncore operating losses & transaction
related expenses
-
(0.4
)
3.0
-
2.6
Loss on disposal activities
-
-
6.6
-
6.6
Amortization of intangible assets
9.9
9.4
9.5
39.2
37.9
Adjusted income from operations
$
59.8
$
61.5
$
70.3
$
238.8
$
253.2
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112005507/en/
Investor Contact: Will Gabrielski Vice President,
Investor Relations 213.593.8208 William.Gabrielski@aecom.com
Media Contact: Brendan Ranson-Walsh Vice President,
Global Communications & Corporate Responsibility 213.996.2367
Brendan.Ranson-Walsh@aecom.com
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