AECOM (NYSE:ACM), the world’s premier infrastructure firm, today
reported second quarter fiscal year 2020 results.
Second Quarter Fiscal
2020
First Half 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
$3,246
--
(5%)
--
$6,481
--
(4%)
--
Net Service Revenue (NSR)2
--
$1,560
--
(1%)3
--
$3,100
--
0%3
Operating Income
$110
$159
2%
23%
$197
$303
42%
27%
Net Income
$49
$88
(6%)
31%
$79
$162
(5%)
31%
Segment Operating Margin4 (NSR)
--
11.7%
--
+200 bps
--
11.7%
--
+210 bps
EBITDA
--
$182
--
16%
--
$356
--
21%
EPS (Fully Diluted)
$0.30
$0.55
(6%)
31%
$0.49
$1.01
(6%)
29%
Wins
$8,600
52%
Backlog
$41,611
--
14%5
--
Second Quarter and First Half 2020
Accomplishments:
- Revenue in the second quarter was $3.2 billion, and net service
revenue2 decreased by 1% on an organic basis3, reflecting stable
performance in the Americas segment and a decline in the
International segment.
- Net income in the second quarter was $49 million and diluted
earnings per share was $0.30; on an adjusted1 basis, diluted
earnings per share was $0.55.
- Second quarter adjusted EBITDA1 increased by 16% over the prior
year to $182 million and first half adjusted EBITDA increased by
21%, extending the Company’s track record to six consecutive
quarters of delivering double-digit adjusted EBITDA growth.
- The segment adjusted operating margin1, 4 on NSR2 increased by
200 basis points over the prior year to 11.7% in the second
quarter, which included industry-leading margins in the Americas
segment and substantially increased margins in the International
segment.
- Second quarter wins of $8.6 billion set a new record for the
Professional Services business and resulted in a 2.5 book-to-burn
ratio6, including a greater than 1 book-to-burn ratio in all
regions; backlog increased by 14%5 to $42 billion.
- The Company exited the second quarter with a substantially
transformed balance sheet and liquidity position, including net
leverage7 of 1.2x and a record cash position, reflecting the $2.4
billion sale of the Management Services business, which closed on
January 31st.
- The Company is revising its full year adjusted EBITDA1 guidance
to $700 - $740 million, or 10% growth over the prior year at the
mid-point; this guidance includes an expected $15 million full year
negative impact from changes in foreign exchange rates and
incorporates expected impacts from COVID-19.
COVID-19 Associated
Impacts
- Across the globe, most of AECOM’s projects have been deemed
essential and continue to progress due to critical nature of the
work delivered by the Professional Services business; the Company
has not experienced any material project cancellations to
date.
- In response to changing market conditions, the Company quickly
implemented mitigation plans to ensure operational continuity and
to facilitate a seamless transition to remote work; at peak, 90% of
global employees were working remotely with utilization rates
mostly consistent with prior expectations.
- The Asia-Pacific region was the most significantly impacted
region during the fiscal second quarter, with Mainland China losing
10 workdays in February; however, the region delivered on its
profit plan and exceeded its cash plan for the quarter and
conditions are beginning to normalize across much of the
region.
- In the Americas and EMEA regions, the Company is leveraging
best practices learned at scale in the Asia-Pacific region and is
experiencing a similar level of business continuity and resilience,
and utilization rates remain mostly consistent with prior
expectations.
AECOM’s Professional Services Business
Possesses Inherent Advantages
- Fortified balance sheet with a record cash balance,
substantially reduced leverage and no material debt maturities for
several years.
- Record $42 billion backlog that enhances revenue
visibility.
- Highly flexible cost structure with more than 80% of costs
being variable, enabling the Company to quickly adapt to dynamic
market conditions.
- Robust IT and HR infrastructure and simplified business
structure that further enhance the Company’s agility in responding
to changing employee working and client demand trends.
- Demonstrated leadership position in providing key resilience
and recovery services, including more than $200 million of wins in
April related to COVID-19 response efforts and nearly $40 billion
of IDIQ capacity under existing contracts expected to support
ongoing COVID-19 response efforts and longer-term infrastructure
investment.
- Sizable exposure to public sector clients, where record
near-term stimulus and stabilization funding and longer-term
infrastructure investments are expected to benefit the Company’s
core markets.
Updated Fiscal 2020 Financial
Guidance
- Adjusted EBITDA1 is expected to be between $700 million and
$740 million, which would mark 10% year-over-year growth at the
mid-point of the range and a second consecutive year of
double-digit adjusted EBITDA growth. – This guidance assumes that
economic activity bottoms in the fiscal third quarter and that
there are no material project delays or deferrals from the pandemic
in the fiscal fourth quarter. – This guidance also includes an
expected negative $15 million full year impact due to changes in
foreign exchange rates.
- The Company reiterated its full year free cash flow8 guidance
of between $100 million and $300 million. – This guidance includes
the expected recovery of an approximately $130 million
timing-related negative impact to fiscal second quarter cash flow
related to MS cash flow in January that was below estimates at the
closing of the MS sale. – The Company expects to recover this
amount in the fiscal third quarter through an expected favorable
net working capital purchase price adjustment, the collection of
which will be reported in the investing section of the cash flow
statement, in accordance with GAAP.
“I am proud of AECOM’s strong second quarter and first half
financial performance, which was highlighted by our
sixth-consecutive quarter of substantial margin improvement in our
Professional Services business, continued double-digit adjusted
EBITDA growth, a record $9 billion of wins in the quarter and a new
all-time high backlog level,” said Michael S. Burke, AECOM’s
chairman and chief executive officer. “Our organization has
responded well to the challenges posed by COVID-19 and I am
thankful for our entire workforce’s devotion to our business and
focus on delivering for our clients. As we look to the future,
there are many uncertainties about the duration and long-term
impacts from COVID-19. Importantly, with respect to what is within
our control, the business has never been stronger or more
resilient. In the near-term, our focus is on the health and safety
of our people, on protecting jobs and on delivering for our
clients. This is apparent in our industry-leading share of federal
spending on COVID-19 related work thus far. Longer-term, we are
engaging with our clients to help prepare for substantial planned
stimulus, including an emphasis on infrastructure in our largest
markets.”
“Our results over the past six quarters and, in particular the
first half of this year, reinforce the value of our transformation
to a higher-margin and lower-risk Professional Services business
model,” said W. Troy Rudd, AECOM’s chief financial officer. “Our
financial position is solid. We deployed the proceeds from the MS
sale to repay all of our secured debt, resulting in substantially
reduced net leverage of 1.2x. Today, we have a record level of
liquidity and no substantial debt maturities for several years. We
expect strong cash flow in the second half of the year to further
enhance liquidity, providing us with additional flexibility as we
navigate unprecedented market uncertainty with confidence.”
Wins and Backlog
Second quarter wins of $8.6 billion set a new record and
resulted in a book-to-burn ratio6 of 2.5, which included a greater
than 1 book-to-burn ratio in each segment. This performance
included solid contributions across the business, highlighted by
two multi-billion dollar wins in the Americas. Wins in the first
half of fiscal 2020 were $12.0 billion, reflecting a 1.7
book-to-burn ratio. Total backlog increased by 14%5 over the prior
year to $41.6 billion, which set a new record and provides for
all-time high levels of visibility with more than 3 years of
trailing twelve-month revenue in backlog.
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 second quarter was $2.5 billion, a 4% decrease
from the prior year, primarily due to the expected reduction in
disaster recovery activity in the U.S. Virgin Islands.
Net service revenue2 was $933 million in the second quarter and
was mostly unchanged over the prior year on a constant-currency
organic3 basis. Excluding the impact of the U.S. Virgin Islands
activity in the prior-year period, NSR increased by 2% in the
Company’s design business, reflecting continued strength across its
core markets.
Operating income was $141 million compared to $129 million in
the year-ago period. On an adjusted basis1, operating income was
$146 million compared to $132 million in the year-ago period. The
adjusted operating margin on an NSR2 basis of 15.6% was a 160 basis
point increase over the prior year, and reflects the benefits of
the many strategic actions taken to enhance margins as well as
solid execution against a record level of backlog.
International
Revenue in the second quarter was $770 million, a decrease of 8%
from the prior year.
Net service revenue2 was $626 million in the second quarter, a
2% decrease from the prior year on a constant-currency organic3
basis, reflecting continued growth in Australia-New Zealand, stable
performance in the U.K. and declines in Asia as the business
experienced headwinds associated with COVID-19.
Operating income was $36 million compared to $22 million in the
year-ago period. On an adjusted basis1, operating income was $37
million compared to $23 million in the year-ago period. The
adjusted operating margin on an NSR2 basis increased by 240 basis
points over the prior year to 5.9%. This increase is due to
improved profitability in the U.K. and investments to deliver
increased utilization and overhead efficiencies through expanded
use of the Company’s global shared services and design centers, as
well as the benefit from actions to consolidate the Company’s
geographic and real estate footprint. In addition, despite the
impacts of COVID-19 in Asia that resulted in 10 lost working days
in mainland China, the business delivered performance consistent
with its financial plan for the first half of the year.
AECOM Capital
The AECOM Capital segment invests in and develops real estate
projects. Revenue in the second quarter was $0.5 million and
operating income was $3.8 million. The Company reiterated its
expectation for approximately $10 million of AECOM Capital earnings
in fiscal 2020.
Discontinued Operations
Second quarter results of discontinued operations included an
approximately $147 million gain with respect to the sale of the
Management Services business and an $89 million non-cash impairment
of goodwill and intangible assets on certain Oil & Gas-related
businesses as a result of lower oil prices. The Company remains
committed to its goal of achieving zero self-perform, at-risk
construction exposure.
Tax Rate
The effective tax rate was 28.7% in the second quarter. On an
adjusted basis, the effective tax rate was 26.7%. 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.
Cash Flow
Operating cash flow for the second quarter was ($299) million
and free cash flow8 was ($313) million. Underlying cash performance
was mostly consistent with expectations and included several
noteworthy items:
- A $180 million negative impact from the previously contemplated
termination of the MS receivable sales program concurrent with the
sale of the MS business.
- Approximately $40 million of cash use for planned restructuring
activities associated with the Company’s transformation into a
higher-margin and lower-risk Professional Services business.
- An approximately $130 million impact related to the timing of
expected cash flow in the MS business prior to the completion of
the sale of the business on January 31st; the Company expects to
recover this impact during the third quarter through a net working
capital purchase price adjustment.
Balance Sheet
As of March 31, 2020, inclusive of discontinued operations,
AECOM had $1.3 billion of total cash and cash equivalents, $2.2
billion of total debt, $900 million of net debt and was undrawn
under its $1.35 billion revolving credit facility.
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.
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 On a constant-currency basis.
6 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.
7 Net debt-to-EBITDA, or net 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 net debt as defined as total debt on the
Company’s financial statements, net of total cash and cash
equivalents.
8 Free cash flow is defined as cash flow
from operations less capital expenditures net of proceeds from
disposals.
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 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, any statements regarding future
economic conditions or performance, 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 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, or that any purchase price
adjustments could be less favorable or result in lower aggregate
cash proceeds than expected; 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
Six Months Ended
March 31, 2019
March 31, 2020
% Change
March 31, 2019
March 31, 2020
% Change
Revenue
$
3,412,605
$
3,245,737
(4.9)%
$
6,768,943
$
6,481,347
(4.2)%
Cost of revenue
3,267,768
3,076,924
(5.8)%
6,500,710
6,146,734
(5.4)%
Gross profit
144,837
168,813
16.6 %
268,233
334,613
24.7 %
Equity in earnings of joint ventures
16,600
13,505
(18.6)%
23,232
23,433
0.9 %
General and administrative expenses
(37,426
)
(41,037
)
9.6 %
(73,333
)
(84,651
)
15.4 %
Restructuring costs
(15,875
)
(31,213
)
96.6 %
(79,170
)
(76,138
)
(3.8)%
Income from operations
108,136
110,068
1.8 %
138,962
197,257
42.0 %
Other income
3,761
2,430
(35.4)%
6,746
6,438
(4.6)%
Interest expense
(41,407
)
(37,111
)
(10.4)%
(80,832
)
(77,488
)
(4.1)%
Income before income tax expense
(benefit)
70,490
75,387
6.9 %
64,876
126,207
94.5 %
Income tax expense (benefit)
12,218
21,604
76.8 %
(30,317
)
37,510
(223.7)%
Income from continuing operations
58,272
53,783
(7.7)%
95,193
88,697
(6.8)%
Discontinued operations, net of tax
35,247
(130,749
)
(471.0)%
63,412
(112,569
)
(277.5)%
Net income (loss)
93,519
(76,966
)
(182.3)%
158,605
(23,872
)
(115.1)%
Net income attributable to noncontrolling
interests from continuing operations
(6,898
)
(5,243
)
(24.0)%
(11,838
)
(9,290
)
(21.5)%
Net income attributable to noncontrolling
interests from discontinued operations
(8,776
)
(3,917
)
(55.4)%
(17,403
)
(12,360
)
(29.0)%
Net income attributable to noncontrolling
interests
(15,674
)
(9,160
)
(41.6)%
(29,241
)
(21,650
)
(26.0)%
Net income attributable to AECOM from
continuing operations
51,374
48,540
(5.5)%
83,355
79,407
(4.7)%
Net income (loss) attributable to AECOM
from discontinued operations
26,471
(134,666
)
(608.7)%
46,009
(124,929
)
(371.5)%
Net income (loss) attributable to
AECOM
$
77,845
$
(86,126
)
(210.6)%
$
129,364
$
(45,522
)
(135.2)%
Net income (loss) attributable to AECOM
per share:
Basic
Continuing operations
$
0.33
$
0.31
(6.1)%
$
0.53
$
0.50
(5.7)%
Discontinued operations
0.17
(0.85
)
(600.0)%
0.30
(0.79
)
(363.3)%
Basic earnings (loss) per share
$
0.50
$
(0.54
)
(208.0)%
$
0.83
$
(0.29
)
(134.9)%
Diluted
Continuing operations
$
0.32
$
0.30
(6.3)%
$
0.52
$
0.49
(5.8)%
Discontinued operations
0.17
(0.84
)
(594.1)%
0.29
(0.77
)
(365.5)%
Diluted earnings (loss) per share
$
0.49
$
(0.54
)
(210.2)%
$
0.81
$
(0.28
)
(134.6)%
Weighted average shares outstanding:
Basic
156,621
158,550
1.2 %
156,519
157,941
0.9 %
Diluted
158,416
160,718
1.5 %
159,010
160,687
1.1 %
Balance Sheet
Information
(unaudited - in
thousands)
September 30, 2019
March 31, 2020
Balance Sheet Information:
Total cash and cash equivalents
$
885,639
$
1,135,061
Accounts receivable and contract assets –
net
4,451,022
4,655,315
Working capital
1,072,891
1,390,716
Total debt, excluding unamortized debt
issuance costs
3,352,464
2,153,618
Total assets
14,550,908
13,115,346
Total AECOM stockholders’ equity
3,690,576
3,531,502
AECOM Reportable
Segments (unaudited - in thousands)
Americas
International
AECOM Capital
Corporate
Total
Three Months Ended March 31, 2020
Revenue
$
2,475,694
$
769,535
$
508
$
-
$
3,245,737
Cost of revenue
2,340,061
736,863
-
-
3,076,924
Gross profit
135,633
32,672
508
-
168,813
Equity in earnings of joint ventures
5,341
3,148
5,016
-
13,505
General and administrative expenses
-
-
(1,759
)
(39,278
)
(41,037
)
Restructuring costs
-
-
-
(31,213
)
(31,213
)
Income (loss) from operations
$
140,974
$
35,820
$
3,765
$
(70,491
)
$
110,068
Gross profit as a % of revenue
5.5%
4.2%
--
--
5.2%
Three Months Ended March 31, 2019
Revenue
$
2,576,474
$
834,644
$
1,487
$
-
$
3,412,605
Cost of revenue
2,449,775
817,993
-
-
3,267,768
Gross profit
126,699
16,651
1,487
-
144,837
Equity in earnings of joint ventures
1,840
5,039
9,721
-
16,600
General and administrative expenses
-
-
(1,681
)
(35,745
)
(37,426
)
Restructuring costs
-
-
-
(15,875
)
(15,875
)
Income (loss) from operations
$
128,539
$
21,690
$
9,527
$
(51,620
)
$
108,136
Gross profit as a % of revenue
4.9%
2.0%
--
--
4.2%
Six Months Ended March 31, 2020
Revenue
$
4,927,676
$
1,552,630
$
1,041
$
-
$
6,481,347
Cost of revenue
4,652,611
1,494,123
-
-
6,146,734
Gross profit
275,065
58,507
1,041
-
334,613
Equity in earnings of joint ventures
11,770
5,984
5,679
-
23,433
General and administrative expenses
-
-
(4,178
)
(80,473
)
(84,651
)
Restructuring costs
-
-
-
(76,138
)
(76,138
)
Income (loss) from operations
$
286,835
$
64,491
$
2,542
$
(156,611
)
$
197,257
Gross profit as a % of revenue
5.6%
3.8%
-
-
5.2%
Contracted backlog
$
13,512,174
$
3,518,306
$
-
$
-
$
17,030,480
Awarded backlog
22,907,354
897,933
-
-
23,805,287
Unconsolidated JV backlog
775,275
-
-
-
775,275
Total backlog
$
37,194,803
$
4,416,239
$
-
$
-
$
41,611,042
Six Months Ended March 31, 2019
Revenue
$
5,136,875
$
1,626,648
$
5,420
$
-
$
6,768,943
Cost of revenue
4,902,955
1,597,755
-
-
6,500,710
Gross profit
233,920
28,893
5,420
-
268,233
Equity in earnings of joint ventures
8,104
7,892
7,236
-
23,232
General and administrative expenses
-
-
(3,408
)
(69,925
)
(73,333
)
Restructuring costs
-
-
-
(79,170
)
(79,170
)
Income (loss) from operations
$
242,024
$
36,785
$
9,248
$
(149,095
)
$
138,962
Gross profit as a % of revenue
4.6%
1.8%
--
--
4.0%
Contracted backlog
$
13,282,229
$
3,852,880
$
-
$
-
$
17,135,109
Awarded backlog
17,496,446
869,693
-
-
18,366,139
Unconsolidated JV backlog
1,249,891
-
-
-
1,249,891
Total backlog
$
32,028,566
$
4,722,573
$
-
$
-
$
36,751,139
AECOM
Regulation G
Information
($ in millions)
Reconciliation of
Revenue to Revenue, Net of Subcontractor and Other Direct Costs
(NSR)
Three Months Ended
Six Months Ended
Mar 31, 2019
Mar 31, 2020
Mar 31, 2019
Mar 31, 2020
Americas
Revenue
$
2,576.5
$
2,475.7
$
5,136.9
$
4,927.7
Less: Subcontractor and other direct
costs
1,636.0
1,542.5
3,321.4
3,089.0
Revenue, net of subcontractor and other
direct costs
$
940.5
$
933.2
$
1,815.5
$
1,838.7
International
Revenue
$
834.6
$
769.5
$
1,626.6
$
1,552.6
Less: Subcontractor and other direct
costs
180.3
143.2
335.3
292.6
Revenue, net of subcontractor and other
direct costs
$
654.3
$
626.3
$
1,291.3
$
1,260.0
Segment
Performance (excludes ACAP)
Revenue
$
3,411.1
$
3,245.2
$
6,763.5
$
6,480.3
Less: Subcontractor and other direct
costs
1,816.3
1,685.7
3,656.7
3,381.6
Revenue, net of subcontractor and other
direct costs
$
1,594.8
$
1,559.5
$
3,106.8
$
3,098.7
Consolidated
Revenue
$
3,412.6
$
3,245.7
$
6,768.9
$
6,481.3
Less: Subcontractor and other direct
costs
1,816.3
1,685.7
3,656.7
3,381.6
Revenue, net of subcontractor and other
direct costs
$
1,596.3
$
1,560.0
$
3,112.2
$
3,099.7
Reconciliation of
Total Debt to Net Debt
Balances at:
Mar 31, 2019
Dec 31, 2019
Mar 31, 2020
Short-term debt
$
48.4
$
55.0
$
27.2
Current portion of long-term debt
80.8
56.6
25.2
Long-term debt, gross
3,708.1
3,392.1
2,101.2
Total debt excluding unamortized debt
issuance costs
3,837.3
3,503.7
2,153.6
Less: Total cash and cash equivalents
666.1
725.4
1,135.1
Net debt
$
3,171.2
$
2,778.3
$
1,018.5
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended
Six Months Ended
Mar 31, 2019
Dec 31, 2019
Mar 31, 2020
Mar 31, 2019
Mar 31, 2020
Net cash provided by (used in) operating
activities
$
107.4
$
(206.9
)
$
(299.1
)
$
(93.0
)
$
(506.0
)
Capital expenditures, net
(22.5
)
(31.1
)
(13.4
)
(44.4
)
(44.5
)
Free cash flow
$
84.9
$
(238.0
)
$
(312.5
)
$
(137.4
)
$
(550.5
)
AECOM Regulation G
Information ($ in millions, except per share data)
Three Months Ended
Six Months Ended
Mar 31, 2019
Dec 31, 2019
Mar 31, 2020
Mar 31, 2019
Mar 31, 2020
Reconciliation of
Income from Operations to Adjusted Income from
Operations
Income from operations
$
108.2
$
87.2
$
110.1
$
139.0
$
197.3
Non-core operating losses &
transaction related expenses
(1.2
)
5.6
-
8.2
5.6
Accelerated depreciation of project
management tool
-
-
11.3
-
11.3
Restructuring costs
15.9
44.9
31.2
79.2
76.1
Amortization of intangible assets
6.3
6.1
6.2
12.6
12.3
Adjusted income from operations
$
129.2
$
143.8
$
158.8
$
239.0
$
302.6
Reconciliation of
Income Before Income Taxes to Adjusted Income Before Income
Taxes
Income before income tax expense
(benefit)
$
70.5
$
50.8
$
75.4
$
64.9
$
126.2
Non-core operating losses &
transaction related expenses
(1.2
)
5.6
-
8.2
5.6
Accelerated depreciation of project
management tool
-
-
11.3
-
11.3
Restructuring costs
15.9
44.9
31.2
79.2
76.1
Amortization of intangible assets
6.3
6.1
6.2
12.6
12.3
Financing charges in interest expense
2.4
2.0
0.9
4.8
2.9
Adjusted income before income tax
expense
$
93.9
$
109.4
$
125.0
$
169.7
$
234.4
Reconciliation of
Income Taxes to Adjusted Income Taxes
Income tax expense (benefit)
$
12.2
$
15.9
$
21.6
$
(30.3
)
$
37.5
Tax effect of the above adjustments*
6.5
15.2
11.4
28.9
26.6
Valuation allowances and other tax only
items
1.1
(0.4
)
(1.1
)
34.7
(1.5
)
Adjusted income tax expense
$
19.8
$
30.7
$
31.9
$
33.3
$
62.6
____________________
* 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
Noncontrolling Interests to Adjusted Noncontrolling
Interests
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
$
(6.9
)
$
(4.0
)
$
(5.3
)
$
(11.8
)
$
(9.3
)
Amortization of intangible assets included
in NCI, net of tax
(0.2
)
(0.1
)
(0.1
)
(0.3
)
(0.2
)
Adjusted noncontrolling interests in
income of consolidated subsidiaries, net of tax
$
(7.1
)
$
(4.1
)
$
(5.4
)
$
(12.1
)
$
(9.5
)
Reconciliation of
Net Income Attributable to AECOM to Adjusted Net Income
Attributable to AECOM
Net income attributable to AECOM
$
51.4
$
30.9
$
48.5
$
83.4
$
79.4
Non-core operating losses &
transaction related expenses
(1.2
)
5.6
-
8.2
5.6
Accelerated depreciation of project
management tool
-
-
11.3
-
11.3
Restructuring costs
15.9
44.9
31.2
79.2
76.1
Amortization of intangible assets
6.3
6.1
6.2
12.6
12.3
Financing charges in interest expense
2.4
2.0
0.9
4.8
2.9
Tax effect of the above
adjustments*
(6.5
)
(15.2
)
(11.5
)
(28.9
)
(26.7
)
Valuation allowances and other tax only
items
(1.1
)
0.4
1.1
(34.7
)
1.5
Amortization of intangible assets included
in NCI, net of tax
(0.2
)
(0.1
)
(0.1
)
(0.3
)
(0.2
)
Adjusted net income attributable to
AECOM
$
67.0
$
74.6
$
87.6
$
124.3
$
162.2
____________________
* 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, 2019
Dec 31, 2019
Mar 31, 2020
Mar 31, 2019
Mar 31, 2020
Reconciliation of
Net Income per Diluted Share to Adjusted Net Income per Diluted
Share
Net income attributable to AECOM – per
diluted share
$
0.32
$
0.19
$
0.30
$
0.52
$
0.49
Per diluted share adjustments:
Non-core operating losses &
transaction related expenses
(0.01
)
0.03
-
0.05
0.03
Accelerated depreciation of project
management tool
-
-
0.07
-
0.07
Restructuring costs
0.10
0.28
0.19
0.50
0.47
Amortization of intangible assets
0.04
0.04
0.04
0.08
0.08
Financing charges in interest expense
0.02
0.01
0.01
0.03
0.02
Tax effect of the above
adjustments*
(0.04
)
(0.09
)
(0.07
)
(0.18
)
(0.16
)
Valuation allowances and other tax only
items
(0.01
)
-
0.01
(0.22
)
0.01
Adjusted net income attributable to AECOM
– per diluted share
$
0.42
$
0.46
$
0.55
$
0.78
$
1.01
Weighted average shares outstanding –
diluted
158.4
160.7
160.7
159.6
160.7
____________________
* 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
Net Income Attributable to AECOM to EBITDA to Adjusted EBITDA and
to Adjusted Income from Operations
Net income attributable to AECOM
$
51.4
$
30.9
$
48.5
$
83.4
$
79.4
Income tax expense (benefit)
12.2
15.9
21.6
(30.3
)
37.5
Income attributable to AECOM
63.6
46.8
70.1
53.1
116.9
Depreciation and amortization expense
43.3
41.1
48.7
83.3
89.8
Interest income1
(2.9
)
(3.4
)
(3.6
)
(5.1
)
(7.0
)
Interest expense2
41.3
40.3
37.1
80.7
77.4
Amortized bank fees included in interest
expense
(2.4
)
(2.0
)
(1.3
)
(4.8
)
(3.3
)
EBITDA
$
142.9
$
122.8
$
151.0
$
207.2
$
273.8
Non-core operating losses &
transaction related expenses
(1.2
)
5.6
-
8.2
5.6
Restructuring costs
15.9
45.0
31.2
79.2
76.2
Adjusted EBITDA
$
157.6
$
173.4
$
182.2
$
294.6
$
355.6
Other income
(3.8
)
(4.0
)
(2.4
)
(6.8
)
(6.4
)
Depreciation3
(34.7
)
(33.1
)
(30.0
)
(66.1
)
(63.1
)
Interest income1
2.9
3.4
3.6
5.1
7.0
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
7.0
4.1
5.3
12.0
9.4
Amortization of intangible assets included
in NCI, net of tax
0.2
-
0.1
0.2
0.1
Adjusted income from operations
$
129.2
$
143.8
$
158.8
$
239.0
$
302.6
____________________
1 Included in other income; 2 Excludes related
amortization; 3 Excludes depreciation from non-core
operating losses, and accelerated depreciation of project
management tool;
AECOM Regulation G Information
(in millions, except per share data)
Three Months Ended
Six Months Ended
Mar 31, 2019
Dec 31, 2019
Mar 31, 2020
Mar 31, 2019
Mar 31, 2020
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Americas Segment:
Income from operations
$
128.5
$
145.9
$
141.0
$
242.0
$
286.9
Non-core operating losses &
transaction related expenses
(1.2
)
-
-
8.2
-
Amortization of intangible assets
4.8
4.7
4.8
9.6
9.5
Adjusted income from operations
$
132.1
$
150.6
$
145.8
$
259.8
$
296.4
International Segment:
Income from operations
$
21.7
$
28.7
$
35.8
$
36.8
$
64.5
Non-core operating losses &
transaction related expenses
-
(0.1
)
-
-
(0.1
)
Amortization of intangible assets
1.6
1.4
1.4
3.1
2.8
Adjusted income from operations
$
23.3
$
30.0
$
37.2
$
39.9
$
67.2
Segment Performance (excludes
ACAP):
Income from operations
$
150.2
$
174.6
$
176.8
$
278.8
$
351.4
Non-core operating losses &
transaction related expenses
(1.2
)
(0.1
)
-
8.2
(0.1
)
Amortization of intangible assets
6.4
6.1
6.2
12.7
12.3
Adjusted income from operations
$
155.4
$
180.6
$
183.0
$
299.7
$
363.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200505005355/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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