AECOM (NYSE:ACM), the world’s premier infrastructure consulting
firm, today reported third quarter fiscal year 2020 results.
Third Quarter Fiscal
2020
Year-to-Date Fiscal
2020
(from Continuing Operations; $ in
millions, except EPS)
As Reported
Adjusted1 (Non-GAAP)
As Reported YoY %
Change
Adjusted YoY % Change
As Reported
Adjusted1 (Non-GAAP)
As Reported YoY %
Change
Adjusted YoY % Change
Revenue
$3,190
--
(5%)
--
$9,671
--
(5%)
--
Net Service Revenue (NSR)2
--
$1,513
--
0%3
--
$4,612
--
0%3
Operating Income
$119
$156
(5%)
21%
$316
$459
20%
25%
Net Income
$91
$88
63%
28%
$171
$251
22%
29%
Segment Operating Margin4
(NSR)
--
13.2%
--
+250 bps
--
12.2%
--
+220 bps
EBITDA
--
$187
--
18%
--
$542
--
20%
EPS (Fully Diluted)
$0.56
$0.55
60%
28%
$1.06
$1.56
20%
28%
Operating Cash Flow
$186
--
142%
--
Free Cash Flow5
--
$272
--
423%
Backlog
$41,455
--
16%6
--
Third Quarter and Year-to-Date Fiscal
2020 Accomplishments
- Revenue in the third quarter was $3.2 billion, and net service
revenue2 was unchanged compared to the prior year on an organic
basis3, reflecting 2% organic growth in the Americas segment,
growth in the Asia-Pacific region and a decline in the Europe,
Middle East and Africa (EMEA) region.
- Operating income in the third quarter was $119 million, net
income was $91 million and diluted earnings per share was $0.56; on
an adjusted1 basis, diluted earnings per share was $0.55.
- Third quarter adjusted EBITDA1 increased by 18% over the prior
year to $187 million, marking the seventh consecutive quarter of
double-digit adjusted EBITDA growth; year-to-date adjusted EBITDA
of $542 million increased by 20% over the prior year.
- The segment adjusted operating margin1, 4 on NSR2 increased by
250 basis points over the prior year to 13.2% in the third quarter
and was highlighted by 340 basis points of margin expansion in the
Americas segment to 17.9%, which set a new record for the business
and remains at an industry-leading level; this strong performance
underscores the Company’s conviction in its ability to achieve its
long-term margin target of 15%+.
- Operating cash flow in the third quarter was $186 million and
free cash flow5 was $272 million, which was consistent with
expectations and reflected strong collection trends as the cash
generative nature of the Company’s business remains firmly intact;
free cash flow included the receipt of $122 million as a result of
a previously announced favorable net working capital purchase price
adjustment associated with the sale of the Management Services
business.
- Third quarter wins of $3.2 billion included a greater than 1
book-to-burn ratio7 in the Company’s design businesses and resulted
in 16%6 backlog growth to $41.5 billion, which remains at
near-record levels; contracted backlog increased by 13% and set a
new record.
- The Company increased its full year adjusted EBITDA guidance to
between $720 million and $740 million, or 11% year-over-year growth
at the mid-point; this guidance includes an approximately $20
million headwind from changes in foreign exchange rates as compared
to the Company’s initial guidance for the year.
COVID-19 Associated Impacts and Market
Outlook
- The majority of AECOM’s work is either essential or critical,
which minimized disruption to the business.
- The Company successfully and rapidly transitioned to a greater
than 90% remote workforce while continuing to support its clients;
utilization across the business remains above pre-COVID
levels.
- While stay-at-home orders have eased in many of the Company’s
larger markets, the majority of employees continue to work remotely
at a high rate of productivity.
- Client satisfaction and employee engagement remain strong,
reflecting the strength of the Company’s teams, the benefits from
long-running investments in IT systems and accelerated adoption of
cloud-based computing solutions that have allowed for continued
strong continuity across teams and delivery of work.
- The Company is confident that despite economic pressures in
certain U.S. and international markets, strong backlog growth and
high win rates on key pursuits are resulting in market share gains
that position the Company to outperform.
- During the third quarter, the Company benefited from government
subsidies of approximately $12 million, which were received under
various programs related to retaining employees.
- The Company expects several inherent attributes of its business
to enable continued outperformance, including a near-record backlog
and record contracted backlog, a business profile that is biased
towards critical public sector projects, a highly variable cost
structure, access to substantial liquidity and clients with a
strong financial profile.
Increasing Fiscal 2020 Financial
Guidance
- AECOM is raising its full year adjusted EBITDA1 guidance to
$720 - $740 million, which would reflect 11% growth over the prior
year at the mid-point of the range and a second consecutive year of
double-digit adjusted EBITDA growth for the Professional Services
business. – This guidance includes an expected negative $20 million
full year impact due to changes in foreign exchange rates as
compared to initial guidance. – The Company continues to expect
approximately $10 million of AECOM Capital earnings in the full
year; year-to-date, the Company has realized approximately $2
million.
- The Company also reiterated its full year free cash flow5
guidance of between $100 million and $300 million. – This guidance
reflects its expectation for strong cash flow in the fourth
quarter, consistent with the Company’s historical second
half-weighted phasing of its cash generation. – Included in the
Company’s free cash flow guidance is the receipt of $122 million in
the fiscal third quarter in connection with a previously announced
favorable net working capital purchase price adjustment associated
with the sale of the Management Services business.
“I am extremely proud of the organization’s efforts amidst
unprecedented challenges and as we further our transformation to an
industry-leading Professional Services business,” said Michael S.
Burke, AECOM’s chairman and chief executive officer. “We have
accomplished much over the past several years, and the company is
better positioned than ever to deliver on its vision to build a
better world.”
“Our third quarter performance is a testament to our
industry-leading teams and the dedication of our professionals who
have delivered through unprecedented challenges,” said W. Troy
Rudd, AECOM’s chief financial officer. “Our commitment to creating
value is underscored by 250 basis points of margin expansion in the
quarter, a seventh consecutive quarter of double-digit adjusted
EBITDA growth and our stronger balance sheet. As a result, we are
raising our adjusted EBITDA guidance range and now expect to
deliver 11% year-over-year growth at the mid-point. Our
demonstrated resiliency this year instills a great deal of
confidence in our ability to continue delivering for our clients,
generating strong returns for our shareholders and positions us to
deliver increased profitability in fiscal 2021.”
“In the face of great challenges, our people have achieved
tremendous accomplishments thus far in fiscal 2020, including our
quick mobilization to support COVID-related disaster resilience
activities and agility to provide support and business continuity
for our clients,” said Lara Poloni, AECOM’s chief executive of its
EMEA business. “As a Professional Services business, our people
will continue to be our greatest competitive advantage, and I am
confident that in partnership with Troy and our great leadership
team we will continue to build momentum and gain share in the
marketplace.”
Wins and Backlog
Third quarter wins of $3.2 billion resulted in a book-to-burn
ratio7 of 0.9 and included a greater than 1 book-to-burn ratio in
the Company’s design businesses both in the Americas and
internationally. Importantly, year-to-date wins of $15.1 billion
reflected a 1.5 book-to-burn ratio and included a greater than 1
book-to-burn ratio in each of the Company’s design businesses and
its Construction Management business. Total backlog remains at
near-record levels and increased by 16%6 over the prior year to
$41.5 billion. In addition, contracted backlog increased by 13%
over the prior year and set a new record, providing for strong
levels of visibility.
Business Segments
AECOM is a Professional Services firm that delivers planning,
design, engineering, consulting and construction management
services to public- and private-sector clients worldwide in markets
spanning transportation, buildings, water, governments, energy and
the environment.
AECOM reports based on three segments: Americas, which consists
of the Company’s business in the United States, Canada and Latin
America; International, which consists of the Company’s business in
Europe, the Middle East, Africa and the Asia-Pacific regions; and
AECOM Capital.
In addition, the MS business, which was sold on January 31,
2020, and the at-risk, self-perform construction businesses that
the Company intends to exit are reported as discontinued
operations.
Americas
Revenue in the third quarter was $2.5 billion, a 4% decrease
from the prior year.
Net service revenue2 was $923 million in the third quarter, a 2%
increase from the prior year on a constant-currency organic basis3,
which was highlighted by double-digit growth in the Construction
Management business.
Operating income was $161 million compared to $128 million in
the year-ago period. On an adjusted basis1, operating income was
$165 million compared to $132 million in the year-ago period. The
adjusted operating margin on an NSR2 basis of 17.9% was a 340 basis
point increase over the prior year and set a new record for the
business, which reflects the benefits of the many strategic actions
taken to enhance margins as well as solid execution against a
near-record level of backlog.
International
Revenue in the third quarter was $718 million, a decrease of 10%
from the prior year.
Net service revenue2 was $590 million in the third quarter, a 3%
decrease from the prior year on a constant-currency organic3 basis,
reflecting a return to growth in the Asia-Pacific region, offset by
a decline in the EMEA region as the business experienced headwinds
associated with COVID-19.
Operating income was $32 million compared to $33 million in the
year-ago period. On an adjusted basis1, operating income was $34
million compared to $33 million in the year-ago period. The
adjusted operating margin on an NSR2 basis increased by 50 basis
points over the prior year to 5.7%. The benefits of real estate
restructuring, a streamlined G&A structure and ongoing exit
from more than 30 countries enabled the Company to deliver margin
improvement despite a decline in revenue. Further improvement in
the Company’s International margins remains a key priority for
value creation.
AECOM Capital
The AECOM Capital segment invests in and develops real estate
projects. Revenue in the third quarter was $0.2 million and
operating loss was $0.6 million.
Discontinued Operations
Following the close of the third quarter, AECOM achieved the
substantial completion of its Alliant gas power plant project. The
Company remains committed to its goal of achieving zero
self-perform, at-risk construction exposure.
Cash Flow
Operating cash flow for the third quarter was $186 million and
free cash flow5 was $272 million. This cash performance was
consistent with expectations and the Company’s seasonal phasing of
its cash flow, which is typically weighted to the second half of
the fiscal year. The Company’s free cash flow included the receipt
of $122 million in connection with a previously announced favorable
net working capital purchase price adjustment collected in May 2020
in connection with the sale of the Management Services business,
which will be included in the investing section of the cash flow
statement in accordance with GAAP.
With continued expectations for strong cash collection trends in
the fourth quarter, the Company reiterated its guidance for full
year free cash flow of between $100 million and $300 million.
Balance Sheet
As of June 30, 2020, inclusive of discontinued operations, AECOM
had $1.4 billion of total cash and cash equivalents, $2.1 billion
of total debt, $654 million of net debt and was undrawn under its
$1.35 billion revolving credit facility. Gross leverage8 declined
to 2.8x and net leverage8 declined to 0.8x, underscoring the
Company’s stronger balance sheet and substantial liquidity
position.
The Company continued to take action to improve its capital
structure and reduce its annual interest expense with the issuance
on July 31, 2020 of a notice of redemption with respect to all of
the 5.000% Senior Notes due 2022, which were assumed in connection
with the Company’s acquisition of URS Corporation in 2014. The
redemption will occur on August 31, 2020 and will be funded using
cash on hand and $248.5 million in proceeds from a July 30, 2020
borrowing under the Company’s lower-cost delayed draw term loan
facility. Upon completion of the redemption during the fiscal
fourth quarter, the Company will have added lower-cost,
longer-duration and pre-payable debt that will result in annual
cash interest savings of approximately $6 million.
Tax Rate
The effective tax rate was (8.3%) in the third quarter. On an
adjusted basis, the effective tax rate was 28.0%. During the third
quarter, the Company’s GAAP tax rate benefited from the release of
a $25 million valuation allowance. The adjusted tax rate was
derived by re-computing the annual effective tax rate on earnings
from adjusted net income.9 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.
Restructuring Update
AECOM continues to progress its previously announced
restructuring actions that are expected to deliver continued
substantial margin improvement and efficiencies that result in a
more agile organization. As a result, the Company continues to
expect in fiscal 2020 to incur restructuring expenses of between
$160 million and $190 million, and total cash restructuring costs
of between $185 million to $205 million, which reflects an
anticipated increase in restructuring activities in the fourth
quarter following COVID-related timing delays on certain
initiatives in the third quarter.
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 https://investors.aecom.com. The
webcast will be available for replay following the call.
1 Excludes the impact of non-operating items, such as non-core
operating losses and transaction-related expenses, restructuring
costs and other items. See Regulation G Information for a complete
reconciliation of Non-GAAP measures. 2 Revenue, net of
subcontractor and other direct costs. 3 Organic growth is
year-over-year at constant currency and reflects revenue associated
with continuing operations. Results expressed in constant currency
are presented excluding the impact from changes in currency
exchange rates. 4 Reflects segment operating performance, excluding
AECOM Capital. 5 Free cash flow is defined as cash flow from
operations less capital expenditures net of proceeds from disposals
and includes the receipt of a favorable $122 million net working
capital purchase price adjustment collected in May 2020 in
connection with the sale of the Management Services (MS) business.
The working capital adjustment represents the recovery of an
operating cash flow shortfall of the MS business prior to its sale.
6 On a constant-currency basis. 7 Book-to-burn ratio is defined as
the dollar amount of wins divided by revenue recognized during the
period, including revenue related to work performed in
unconsolidated joint ventures. 8 Gross leverage is comprised of
EBITDA as defined in the Company’s credit agreement dated October
17, 2014, as amended, which excludes stock-based compensation, and
total debt on the Company’s financial statements; net leverage is
defined similarly but is also net of total cash and cash
equivalents. 9 Inclusive of non-controlling interest deduction and
adjusted for financing charges in interest expense, the
amortization of intangible assets and is based on continuing
operations.
About AECOM
AECOM (NYSE:ACM) is the world’s premier infrastructure
consulting 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.
Forward-Looking Statements
All statements in this communication other than statements of
historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including any statements of the
plans, strategies and objectives for future operations,
profitability, strategic value creation, coronavirus impacts, risk
profile and investment strategies, and any statements regarding
future economic conditions or performance, and the expected
financial and operational results of AECOM. 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; impacts caused by the coronavirus and
the related economic instability and market volatility, including
the reaction of governments to the coronavirus, including any
prolonged period of travel, commercial or other similar
restrictions, the delay in commencement, or temporary or permanent
halting of construction, infrastructure or other projects,
requirements that we remove our employees or personnel from the
field for their protection, and delays or reductions in planned
initiatives by our governmental or commercial clients or potential
clients; 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
laws or regulations applicable to our business; maintaining
adequate surety and financial capacity; high leverage 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; risks associated with the benefits and
costs of the Management Services transaction, including the risk
that the expected benefits of the Management Services transaction
or any contingent purchase price will not be realized within the
expected time frame, in full or at all; the risk that costs of
restructuring transactions and other costs incurred in connection
with the Management Services transaction will exceed our estimates
or otherwise adversely affect our business or operations; 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. Any forward-looking statements are made as of the date
hereof. We do not intend, and undertake no obligation, to update
any forward-looking statement.
Non-GAAP Financial Information
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, organic revenue, net
service 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 and adjusted tax rate to exclude
the impact of non-operating items, such as amortization expense,
taxes 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. We present net service
revenue to exclude subcontractor costs from revenue to provide
investors with a better understanding of our 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 adjusted EBITDA
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
Nine Months Ended
June 30, 2019
June 30, 2020
% Change
June 30, 2019
June 30, 2020
% Change
Revenue
$
3,360,029
$
3,189,679
(5.1)%
$
10,128,972
$
9,671,026
(4.5)%
Cost of revenue
3,206,174
3,004,600
(6.3)%
9,706,884
9,151,334
(5.7)%
Gross profit
153,855
185,079
20.3 %
422,088
519,692
23.1 %
Equity in earnings of joint ventures
9,186
8,573
(6.7)%
32,418
32,006
(1.3)%
General and administrative expenses
(37,534
)
(54,482
)
45.2 %
(110,867
)
(139,133
)
25.5 %
Restructuring costs
—
(20,300
)
NM
(79,170
)
(96,438
)
21.8 %
Income from operations
125,507
118,870
(5.3)%
264,469
316,127
19.5 %
Other income
4,329
3,119
(28.0)%
11,075
9,557
(13.7)%
Interest expense
(40,497
)
(34,925
)
(13.8)%
(121,329
)
(112,413
)
(7.3)%
Income before income tax expense
(benefit)
89,339
87,064
(2.5)%
154,215
213,271
38.3 %
Income tax expense (benefit)
27,203
(7,184
)
(126.4)%
(3,114
)
30,326
(1073.9)%
Income from continuing operations
62,136
94,248
51.7 %
157,329
182,945
16.3 %
Discontinued operations, net of tax
43,252
(126
)
(100.3)%
106,664
(112,695
)
(205.7)%
Net income
105,388
94,122
(10.7)%
263,993
70,250
(73.4)%
Net income attributable to noncontrolling
interests from continuing operations
(6,092
)
(3,138
)
(48.5)%
(17,930
)
(12,428
)
(30.7)%
Net income attributable to noncontrolling
interests from discontinued operations
(15,558
)
(1,645
)
(89.4)%
(32,961
)
(14,005
)
(57.5)%
Net income attributable to noncontrolling
interests
(21,650
)
(4,783
)
(77.9)%
(50,891
)
(26,433
)
(48.1)%
Net income attributable to AECOM from
continuing operations
56,044
91,110
62.6 %
139,399
170,517
22.3 %
Net income (loss) attributable to AECOM
from discontinued operations
27,694
(1,771
)
(106.4)%
73,703
(126,700
)
(271.9)%
Net income attributable to AECOM
$
83,738
$
89,339
6.7 %
$
213,102
$
43,817
(79.4)%
Net income (loss) attributable to AECOM
per share:
Basic
Continuing operations
$
0.36
$
0.57
58.3 %
$
0.89
$
1.07
20.2 %
Discontinued operations
0.17
(0.01
)
(105.9)%
0.47
(0.79
)
(268.1)%
Basic earnings per share
$
0.53
$
0.56
5.7 %
$
1.36
$
0.28
(79.4)%
Diluted
Continuing operations
$
0.35
$
0.56
60.0 %
$
0.88
$
1.06
20.5 %
Discontinued operations
0.17
(0.01
)
(105.9)%
0.46
(0.79
)
(271.7)%
Diluted earnings per share
$
0.52
$
0.55
5.8 %
$
1.34
$
0.27
(79.9)%
Weighted average shares outstanding:
Basic
157,429
160,119
1.7 %
156,822
158,667
1.2 %
Diluted
159,787
161,835
1.3 %
159,269
161,070
1.1 %
Balance Sheet
Information
(unaudited - in
thousands)
September 30, 2019
June 30, 2020
Balance Sheet Information:
Total cash and cash equivalents
$
885,639
$
1,331,268
Accounts receivable and contract assets –
net
4,451,022
4,491,859
Working capital
1,072,891
1,538,691
Total debt, excluding unamortized debt
issuance costs
3,352,464
2,096,245
Total assets
14,550,908
13,045,053
Total AECOM stockholders’ equity
3,690,576
3,744,894
AECOM
Reportable Segments
(unaudited - in
thousands)
Americas
International
AECOM Capital
Corporate
Total
Three Months Ended June 30, 2020
Revenue
$
2,471,537
$
717,947
$
195
$
-
$
3,189,679
Cost of revenue
2,316,286
688,314
-
-
3,004,600
Gross profit
155,251
29,633
195
-
185,079
Equity in earnings of joint ventures
5,553
2,688
332
-
8,573
General and administrative expenses
-
-
(1,094
)
(53,388
)
(54,482
)
Restructuring costs
-
-
-
(20,300
)
(20,300
)
Income (loss) from operations
$
160,804
$
32,321
$
(567)
$
(73,688
)
$
118,870
Gross profit as a % of revenue
6.3%
4.1%
-
-
5.8%
Three Months Ended June 30, 2019
Revenue
$
2,563,828
$
794,758
$
1,443
$
-
$
3,360,029
Cost of revenue
2,440,843
765,331
-
-
3,206,174
Gross profit
122,985
29,427
1,443
-
153,855
Equity in earnings of joint ventures
4,658
3,766
761
-
9,185
General and administrative expenses
-
-
(1,491
)
(36,042
)
(37,533
)
Restructuring costs
-
-
-
-
-
Income (loss) from operations
$
127,643
$
33,193
$
713
$
(36,042
)
$
125,507
Gross profit as a % of revenue
4.8%
3.7%
-
-
4.6%
Nine Months Ended June 30, 2020
Revenue
$
7,399,213
$
2,270,577
$
1,236
$
-
$
9,671,026
Cost of revenue
6,968,897
2,182,437
-
-
9,151,334
Gross profit
430,316
88,140
1,236
-
519,692
Equity in earnings of joint ventures
17,323
8,672
6,011
-
32,006
General and administrative expenses
-
-
(5,272
)
(133,861
)
(139,133
)
Restructuring costs
-
-
-
(96,438
)
(96,438
)
Income (loss) from operations
$
447,639
$
96,812
$
1,975
$
(230,299
)
$
316,127
Gross profit as a % of revenue
5.8%
3.9%
-
-
5.4%
Contracted backlog
$
16,067,997
$
3,477,266
$
-
$
-
$
19,545,263
Awarded backlog
20,184,074
1,061,140
-
-
21,245,214
Unconsolidated JV backlog
664,286
-
-
-
664,286
Total backlog
$
36,916,357
$
4,538,406
$
-
$
-
$
41,454,763
Nine Months Ended June 30, 2019
Revenue
$
7,700,703
$
2,421,406
$
6,863
$
-
$
10,128,972
Cost of revenue
7,343,798
2,363,086
-
-
9,706,884
Gross profit
356,905
58,320
6,863
-
422,088
Equity in earnings of joint ventures
12,762
11,658
7,997
-
32,417
General and administrative expenses
-
-
(4,899
)
(105,967
)
(110,866
)
Restructuring costs
-
-
-
(79,170
)
(79,170
)
Income (loss) from operations
$
369,667
$
69,978
$
9,961
$
(185,137
)
$
264,469
Gross profit as a % of revenue
4.6%
2.4%
-
-
4.2%
Contracted backlog
$
13,668,963
$
3,626,425
$
-
$
-
$
17,295,388
Awarded backlog
16,471,937
938,630
-
-
17,410,567
Unconsolidated JV backlog
1,043,330
-
-
-
1,043,330
Total backlog
$
31,184,230
$
4,565,055
$
-
$
-
$
35,749,285
AECOM
Regulation G
Information
(in millions)
Reconciliation of
Revenue to Revenue, Net of Subcontractor and Other Direct Costs
(NSR)
Three Months Ended
Nine Months Ended
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Jun 30, 2019
Jun 30, 2020
Americas
Revenue
$
2,563.8
$
2,475.7
$
2,471.5
$
7,700.7
$
7,399.2
Less: Subcontractor and other direct
costs
1,655.2
1,542.5
1,548.5
4,976.6
4,637.4
Revenue, net of subcontractor and other
direct costs
$
908.6
$
933.2
$
923.0
$
2,724.1
$
2,761.8
International
Revenue
$
794.8
$
769.5
$
718.0
$
2,421.4
$
2,270.6
Less: Subcontractor and other direct
costs
161.8
143.2
128.5
497.1
421.1
Revenue, net of subcontractor and other
direct costs
$
633.0
$
626.3
$
589.5
$
1,924.3
$
1,849.5
Segment
Performance (excludes ACAP)
Revenue
$
3,358.6
$
3,245.2
$
3,189.5
$
10,122.1
$
9,669.8
Less: Subcontractor and other direct
costs
1,817.0
1,685.7
1,677.0
5,473.7
5,058.5
Revenue, net of subcontractor and other
direct costs
$
1,541.6
$
1,559.5
$
1,512.5
$
4,648.4
$
4,611.3
Consolidated
Revenue
$
3,360.0
$
3,245.7
$
3,189.7
$
10,129.0
$
9,671.0
Less: Subcontractor and other direct
costs
1,817.0
1,685.7
1,677.0
5,473.7
5,058.5
Revenue, net of subcontractor and other
direct costs
$
1,543.0
$
1,560.0
$
1,512.7
$
4,655.3
$
4,612.5
Reconciliation of
Total Debt to Net Debt
Balances at:
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Short-term debt
$
44.9
$
27.2
$
10.4
Current portion of long-term debt
81.7
25.2
14.3
Long-term debt, gross
3,625.7
2,101.2
2,071.6
Total debt excluding unamortized debt
issuance costs
3,752.3
2,153.6
2,096.3
Less: Total cash and cash equivalents
641.7
1,135.1
1,331.3
Net debt
$
3,110.6
$
1,018.5
$
765.0
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended
Nine Months Ended
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Jun 30, 2019
Jun 30, 2020
Net cash provided by (used in) operating
activities
$
76.9
$
(299.0
)
$
186.3
$
(16.1
)
$
(319.7
)
Capital expenditures, net
(24.7
)
(13.5
)
(36.3
)
(69.1
)
(80.8
)
Working capital adjustment from sale of
Management Services business
-
-
122.0
-
122.0
Free cash flow
$
52.2
$
(312.6
)
$
272.0
$
(85.2
)
$
(278.5
)
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Nine Months Ended
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Jun 30, 2019
Jun 30, 2020
Reconciliation of
Income from Operations to Adjusted Income from
Operations
Income from operations
$
125.5
$
110.1
$
118.9
$
264.5
$
316.2
Non-core operating losses &
transaction related expenses
(2.5
)
-
-
5.7
5.6
Accelerated depreciation of project
management tool
-
11.3
11.3
-
22.6
Restructuring costs
-
31.2
20.3
79.2
96.4
Amortization of intangible assets
6.4
6.2
5.9
19.0
18.2
Adjusted income from operations
$
129.4
$
158.8
$
156.4
$
368.4
$
459.0
Reconciliation of
Income Before Income Taxes to Adjusted Income Before Income
Taxes
Income before income tax expense
(benefit)
$
89.3
$
75.4
$
87.1
$
154.2
$
213.3
Non-core operating losses &
transaction related expenses
(2.5
)
-
-
5.7
5.6
Accelerated depreciation of project
management tool
-
11.3
11.3
-
22.6
Restructuring costs
-
31.2
20.3
79.2
96.4
Amortization of intangible assets
6.4
6.2
5.9
19.0
18.2
Financing charges in interest expense
2.5
0.9
1.3
7.3
4.2
Adjusted income before income tax
expense
$
95.7
$
125.0
$
125.9
$
265.4
$
360.3
Reconciliation of
Income Taxes to Adjusted Income Taxes
Income tax (benefit) expense
$
27.2
$
21.6
$
(7.2
)
$
(3.1
)
$
30.3
Tax effect of the above adjustments*
1.1
11.4
9.9
30.0
36.5
Valuation allowances and other tax only
items
(8.1
)
(1.1
)
31.7
26.6
30.2
Adjusted income tax expense
$
20.2
$
31.9
$
34.4
$
53.5
$
97.0
____________________
* 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
$
(6.1
)
$
(5.3
)
$
(3.1
)
$
(17.9
)
$
(12.4
)
Amortization of intangible assets included
in NCI, net of tax
(0.1
)
(0.1
)
(0.1
)
(0.4
)
(0.3
)
Adjusted noncontrolling interests in
income of consolidated subsidiaries, net of tax
$
(6.2
)
$
(5.4
)
$
(3.2
)
$
(18.3
)
$
(12.7
)
Reconciliation of
Net Income Attributable to AECOM to Adjusted Net Income
Attributable to AECOM
Net income attributable to AECOM
$
56.0
$
48.5
$
91.1
$
139.4
$
170.5
Non-core operating losses &
transaction related expenses
(2.5
)
-
-
5.7
5.6
Accelerated depreciation of project
management tool
-
11.3
11.3
-
22.6
Restructuring costs
-
31.2
20.3
79.2
96.4
Amortization of intangible assets
6.4
6.2
5.9
19.0
18.2
Financing charges in interest expense
2.5
0.9
1.3
7.3
4.2
Tax effect of the above
adjustments*
(1.2
)
(11.5
)
(9.8
)
(30.1
)
(36.5
)
Valuation allowances and other tax only
items
8.1
1.1
(31.7
)
(26.6
)
(30.2
)
Amortization of intangible assets included
in NCI, net of tax
(0.1
)
(0.1
)
(0.1
)
(0.4
)
(0.3
)
Adjusted net income attributable to
AECOM
$
69.2
$
87.6
$
88.3
$
193.5
$
250.5
____________________
* 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
Nine Months Ended
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Jun 30, 2019
Jun 30, 2020
Reconciliation of
Net Income per Diluted Share to Adjusted Net Income per Diluted
Share
Net income attributable to AECOM – per
diluted share
$
0.35
$
0.30
$
0.56
$
0.88
$
1.06
Per diluted share adjustments:
Non-core operating losses &
transaction related expenses
(0.01
)
-
-
0.04
0.03
Accelerated depreciation of project
management tool
-
0.07
0.07
-
0.14
Restructuring costs
-
0.19
0.13
0.50
0.60
Amortization of intangible assets
0.04
0.04
0.04
0.12
0.11
Financing charges in interest expense
0.02
0.01
0.01
0.05
0.03
Tax effect of the above
adjustments*
(0.02
)
(0.07
)
(0.06
)
(0.20
)
(0.22
)
Valuation allowances and other tax only
items
0.05
0.01
(0.20
)
(0.17
)
(0.19
)
Adjusted net income attributable to AECOM
– per diluted share
$
0.43
$
0.55
$
0.55
$
1.22
$
1.56
Weighted average shares outstanding –
diluted
159.8
160.7
161.8
159.3
161.1
____________________
* 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
Net Income Attributable to AECOM to EBITDA to Adjusted EBITDA and
to Adjusted Income from Operations
Net income attributable to AECOM
$
56.0
$
48.5
$
91.1
$
139.4
$
170.5
Income tax expense (benefit)
27.2
21.6
(7.2
)
(3.1
)
30.3
Income attributable to AECOM
83.2
70.1
83.9
136.3
200.8
Depreciation and amortization
expense1
42.6
48.7
51.3
125.9
141.1
Interest income2
(3.0
)
(3.6
)
(2.6
)
(8.1
)
(9.6
)
Interest expense3
40.7
37.1
34.9
121.4
112.3
Amortized bank fees included in interest
expense
(2.5
)
(1.3
)
(1.3
)
(7.3
)
(4.6
)
EBITDA
$
161.0
$
151.0
$
166.2
$
368.2
$
440.0
Non-core operating losses &
transaction related expenses
(2.5
)
-
-
5.7
5.6
Restructuring costs
-
31.2
20.3
79.2
96.5
Adjusted EBITDA
$
158.5
$
182.2
$
186.5
$
453.1
$
542.1
Other income
(4.4
)
(2.4
)
(3.1
)
(11.2
)
(9.5
)
Depreciation1
(34.0
)
(30.0
)
(32.8
)
(100.1
)
(95.9
)
Interest income2
3.1
3.6
2.6
8.2
9.6
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
6.1
5.3
3.1
18.1
12.5
Amortization of intangible assets included
in NCI, net of tax
0.1
0.1
0.1
0.3
0.2
Adjusted income from operations
$
129.4
$
158.8
$
156.4
$
368.4
$
459.0
____________________
1 Excludes depreciation from non-core operating losses,
and accelerated depreciation of project management tool; 2
Included in other income; 3 Excludes related
amortization
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Nine Months Ended
Jun 30, 2019
Mar 31, 2020
Jun 30, 2020
Jun 30, 2019
Jun 30, 2020
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Americas Segment:
Income from operations
$
127.7
$
141.0
$
160.8
$
369.7
$
447.7
Non-core operating losses &
transaction related expenses
(0.7
)
-
-
7.5
-
Amortization of intangible assets
4.8
4.8
4.5
14.4
14.0
Adjusted income from operations
$
131.8
$
145.8
$
165.3
$
391.6
$
461.7
International Segment:
Income from operations
$
33.2
$
35.8
$
32.3
$
70.0
$
96.8
Non-core operating losses &
transaction related expenses
(1.8
)
-
-
(1.8
)
(0.1
)
Amortization of intangible assets
1.5
1.4
1.4
4.6
4.2
Adjusted income from operations
$
32.9
$
37.2
$
33.7
$
72.8
$
100.9
Segment Performance (excludes
ACAP):
Income from operations
$
160.9
$
176.8
$
193.1
$
439.7
$
544.5
Non-core operating losses &
transaction related expenses
(2.5
)
-
-
5.7
(0.1
)
Amortization of intangible assets
6.3
6.2
5.9
19.0
18.2
Adjusted income from operations
$
164.7
$
183.0
$
199.0
$
464.4
$
562.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804005357/en/
Investor Contact: Will Gabrielski Senior 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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