AECOM reports first quarter fiscal year 2018 results

⁷ Inclusive of non-controlling interest deduction and adjusted for acquisition and integration expenses, financing charges in interest expense, the amortization of intangible assets and financial impacts associated with actual and planned dispositions of non-core businesses and assets.

⁸ Amortization of intangible assets expense includes the impact of amortization included in equity in earnings of joint ventures and non-controlling interests.

⁹ Capital expenditures, net of proceeds from disposals.

About AECOM

AECOM (NYSE: ACM) is built to deliver a better world. We design, build, finance and operate infrastructure assets for governments, businesses and organizations in more than 150 countries. As a fully integrated firm, we connect knowledge and experience across our global network of experts to help clients solve their most complex challenges. From high-performance buildings and infrastructure, to resilient communities and environments, to stable and secure nations, our work is transformative, differentiated and vital. A Fortune 500 firm, AECOM had revenue of approximately $18.2 billion during fiscal year 2017. See how we deliver what others can only imagine at aecom.com and @AECOM.

All statements in this press release other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue, cash flows, tax rate, share count, interest expense, capital expenditures, amortization of intangible assets and financial fees, acquisition and integration expense, or other financial items; any statements of the plans, strategies and objectives for future operations; and any statements regarding future economic conditions or performance. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.

Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, but are not limited to, the following: impacts of the Tax Cuts and Jobs Acts, our business is cyclical and vulnerable to economic downturns and client spending reductions; we are dependent on long-term government contracts and subject to uncertainties related to government contract appropriations; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; we may experience losses under fixed-price contracts; we have limited control over operations run through our joint venture entities; we may be liable for misconduct by our employees or consultants or our failure to comply with laws or regulations applicable to our business; we may not maintain adequate surety and financial capacity; we are highly leveraged and may not be able to service our debt and guarantees; we have exposure to political and economic risks in different countries where we operate as well as currency exchange rate fluctuations; we may not be able to retain and recruit key technical and management personnel; we may be subject to legal claims and we may have inadequate insurance coverage; we are subject to environmental law compliance and we may have inadequate nuclear indemnification; there may be unexpected adjustments and cancellations related to our backlog; we are dependent on partners and third parties who may fail to satisfy their obligations; we may not be able to manage pension costs; we may face cybersecurity issues and data loss; as well as other additional risks and factors that could cause actual results to differ materially from our forward-looking statements set forth in our reports filed with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statement.

This press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). In particular, the Company believes that non-GAAP financial measures such as adjusted EPS, adjusted EBITDA, adjusted operating income, adjusted tax rate, adjusted interest expense, organic revenue, and free cash flow also provide a meaningful perspective on its business results as the Company utilizes this information to evaluate and manage the business. We use adjusted EBITDA, net and operating income to exclude the impact of non-operating items, such as amortization expense, taxes, acquisition and integration expenses, and non-core operating losses. We use free cash flow to represent the cash generated after capital expenditures to maintain our business. Our non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of these non-GAAP measures is found in the Regulation G Information tables at the back of this release.

When we provide our long term projections for organic revenue growth, adjusted EBITDA, adjusted EPS growth, and free cash flow on a forward-looking basis, the closest corresponding GAAP measure and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally is not available without unreasonable effort due to length of the forecasted period and potential high variability, complexity and low visibility as to items that would be excluded from the GAAP measure in the relevant future period.


AECOM
Consolidated Statement of Income
(unaudited - in thousands, except per share data)

	Three Months Ended
	December 31, 2016		December 31, 2017		% Change

Revenue	$	4,358,349	$	4,910,832	12.7%
Cost of revenue		4,188,376		4,774,680	14.0%
Gross profit		169,973		136,152	(19.9%)

Equity in earnings of joint ventures		21,471		29,720	38.4%
General and administrative expenses		(32,639)		(34,670)	6.2%
Acquisition & integration expenses		(15,412)		-	(100.0%)
Income from operations		143,393		131,202	(8.5%)

Other income		860		2,283	165.5%
Interest expense		(53,637)		(56,165)	4.7%
Income before income tax expense (benefit)		90,616		77,320	(14.7%)

Income tax expense (benefit)		24,838		(47,093)	NM

Net income		65,778		124,413	89.1%

Noncontrolling interest in income of consolidated subsidiaries, net of tax		(18,599)		(13,099)	(29.6%)

Net income attributable to AECOM	$	47,179	$	111,314	135.9%

Net income attributable to AECOM per share:
Basic	$	0.31	$	0.70	125.8%
Diluted	$	0.30	$	0.69	130.0%

Weighted average shares outstanding:
Basic		154,255		157,909	2.4%
Diluted		157,993		161,847	2.4%


AECOM
Balance Sheet and Cash Flow Information
(unaudited - in thousands)

	September 30, 2017		December 31, 2017
Balance Sheet Information:
Total cash and cash equivalents	$	802,362	$	813,166
Accounts receivable – net		5,127,743		5,313,672
Working capital		1,103,843		1,165,983
Total debt		3,896,398		3,951,647
Total assets		14,396,956		14,622,951
Total AECOM stockholders’ equity		3,996,126		4,104,369


	AECOM
	Reportable Segments
	(unaudited - in thousands)

		Design & Consulting Services	Construction Services	Management Services	AECOM Capital	Corporate	Total
Three Months Ended December 31, 2017
Revenue		$ 1,941,900	$ 2,125,487	$ 843,445	$ -	$ -	$	4,910,832
Cost of revenue		1,864,054	2,098,408	812,218	-	-		4,774,680
Gross profit		77,846	27,079	31,227	-	-		136,152
Equity in earnings of joint ventures		7,462	13,406	8,852	-	-		29,720
General and administrative expenses		-	-	-	(2,607)	(32,063)		(34,670)
Operating income (loss)		$ 85,308	$ 40,485	$ 40,079	$ (2,607)	$ (32,063)	$	131,202

Gross profit as a % of revenue		4.0%	1.3%	3.7%	-	-		2.8%

Contracted backlog		$ 8,605,057	$ 11,666,660	$ 3,118,359	$ -	$ -	$	23,390,076
Awarded backlog		7,863,929	5,030,502	9,140,923	-	-		22,035,354
Unconsolidated JV backlog		-	2,451,868	912,987	-	-		3,364,855
Total backlog		$ 16,468,986	$ 19,149,030	$ 13,172,269	$ -	$ -	$	48,790,285

Three Months Ended December 31, 2016
Revenue		$ 1,840,761	$ 1,750,249	$ 767,339	$ -	$ -	$	4,358,349
Cost of revenue		1,745,520	1,736,490	706,366	-	-		4,188,376
Gross profit		95,241	13,759	60,973	-	-		169,973
Equity in earnings of joint ventures		4,087	4,309	13,075	-	-		21,471
General and administrative expenses		-	-	-	(2,656)	(29,983)		(32,639)
Acquisition & integration expenses		-	-	-	-	(15,412)		(15,412)
Operating income (loss)		$ 99,328	$ 18,068	$ 74,048	$ (2,656)	$ (45,395)	$	143,393

Gross profit as a % of revenue		5.2%	0.8%	7.9%	-	-		3.9%

Contracted backlog		$ 8,114,279	$ 13,068,598	$ 3,835,127	$ -	$ -	$	25,018,004
Awarded backlog		6,390,269	4,129,593	4,759,598	-	-		15,279,460
Unconsolidated JV backlog		-	2,558,035	979,080	-	-		3,537,115
Total backlog		$ 14,504,548	$ 19,756,226	$ 9,573,805	$ -	$ -	$	43,834,579


AECOM Regulation G Information ($ in millions)

Reconciliation of Amounts Provided by Acquired Companies
	Three Months Ended Dec 31, 2017
	Total		Provided by Acquired Companies		Excluding Effect of Acquired Companies

Revenue:
AECOM Consolidated	$	4,910.8	$	158.8	$	4,752.0
Design & Consulting Services		1,941.9		-		1,941.9
Construction Services		2,125.5		158.8		1,966.7
Management Services		843.4		-		843.4


Reconciliation of Net Income Attributable to AECOM to EBITDA
	Three months ended
	Dec 31, 2016		Sep 30, 2017		Dec 31, 2017
Net income attributable to AECOM	$	47.2	$	88.5	$	111.3
Income tax expense (benefit)		24.8		6.2		(47.1)
Income attributable to AECOM before income taxes		72.0		94.7		64.2
Depreciation and amortization expense ¹		66.5		74.0		63.5
Interest income ²		(0.7)		(1.8)		(1.8)
Interest expense ³		50.4		50.8		53.3
EBITDA	$	188.2	$	217.7	$	179.2
¹ Includes the amount for noncontrolling interests in consolidated subsidiaries ² Included in other income ³ Excludes related amortization


Reconciliation of Total Debt to Net Debt
	Balances at
	Dec 31, 2016		Sep 30, 2017		Dec 31, 2017
Short-term debt	$	14.8	$	1.2	$	2.4
Current portion of long-term debt		343.9		140.8		160.9
Long-term debt, gross		3,805.3		3,754.4		3,788.4
Total debt excluding unamortized debt issuance costs		4,164.0		3,896.4		3,951.7
Less: Total cash and cash equivalents		697.7		802.4		813.2
Net Debt	$	3,466.3	$	3,094.0	$	3,138.5


Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
	Three Months Ended
	Mar 31, 2015		Jun 30, 2015		Sep 30, 2015		Dec 31, 2015		Mar 31, 2016		Jun 30, 2016		Sep 30, 2016
Net cash provided by operating activities	$	50.0	$	153.8	$	278.0	$	78.0	$	113.2	$	260.1	$	362.9
Capital expenditures, net		(30.6)		(3.7)		(10.1)		(0.8)		(30.3)		(68.8)		(36.9)
Free Cash Flow	$	19.4	$	150.1	$	267.9	$	77.2	$	82.9	$	191.3	$	326.0

	Three Months Ended
	Dec 31, 2016		Mar 31, 2017		Jun 30, 2017		Sep 30, 2017		Dec 31, 2017
Net cash provided by (used in) operating activities	$	77.5	$	(46.1)	$	413.9	$	251.4	$	52.4
Capital expenditures, net		(21.0)		(17.7)		(19.8)		(20.0)		(18.5)
Free Cash Flow	$	56.5	$	(63.8)	$	394.1	$	231.4	$	33.9


	Fiscal Years Ended Sep 30,
		2012		2013		2014		2015		2016		2017
Net cash provided by operating activities	$	433.4	$	408.6	$	360.6	$	764.4	$	814.2	$	696.7
Capital expenditures, net		(62.9)		(52.1)		(62.8)		(69.4)		(136.8)		(78.5)
Free Cash Flow	$	370.5	$	356.5	$	297.8	$	695.0	$	677.4	$	618.2


AECOM
Regulation G Information
($ in millions, except per share data)

Reconciliation of Income from Operations to Adjusted Income from Operations
	Three Months Ended
	Dec 31, 2016			Sep 30, 2017			Dec 31, 2017
Income from operations	$	143.4		$	161.9		$	131.2
Non-core operating losses		2.0			3.7			-
Acquisition and integration expenses		15.4			3.3			-
Amortization of intangible assets		27.4			30.1			26.9
Adjusted income from operations	$	188.2		$	199.0		$	158.1

Income before income tax expense (benefit)	$	90.6		$	110.0		$	77.3
Non-core operating losses		2.0			3.7			-
Acquisition and integration expenses		15.4			3.3			-
Amortization of intangible assets		27.4			30.1			26.9
Financing charges in interest expense		2.8			3.1			2.9
Adjusted income before income tax expense	$	138.2		$	150.2		$	107.1

Income tax expense (benefit)	$	24.8		$	6.2		$	(47.1	)
Tax effect of the above adjustments ^ï¿½nbsp;		8.8			6.5			5.4
Revaluation of deferred taxes and one-time tax repatriation
charges associated with U.S. tax reform		-			-			41.7
Adjusted income tax expense	$	33.6		$	12.7		$	-
^ï¿½nbsp; 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.

Noncontrolling interests in income of consolidated subsidiaries, net of tax	$	(18.6	)	$	(15.3	)	$	(13.1	)
Amortization of intangible assets included in NCI, net of tax		(2.4	)		(2.6	)		(2.5	)
Adjusted noncontrolling interests in income of consolidated subsidiaries, net of tax	$	(21.0	)	$	(17.9	)	$	(15.6	)

Reconciliation of Net Income to Adjusted Net Income

Net income attributable to AECOM	$	47.2		$	88.5		$	111.3
Non-core operating losses		2.0			3.7			-
Acquisition and integration expenses		15.4			3.3			-
Amortization of intangible assets		27.4			30.1			26.9
Financing charges in interest expense		2.8			3.1			2.9
Tax effect of the above adjustments ^ï¿½nbsp;		(8.8	)		(6.5	)		(5.4	)
Revaluation of deferred taxes and one-time tax repatriation
charges associated with U.S. tax reform		-			-			(41.7	)
Amortization of intangible assets included in NCI, net of tax		(2.4	)		(2.6	)		(2.5	)
Adjusted net income attributable to AECOM	$	83.6		$	119.6		$	91.5

Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share

Net income attributable to AECOM - per diluted share	$	0.30		$	0.55		$	0.69

Per diluted share adjustments:
Non-core operating losses		0.01			0.02			-
Acquisition and integration expenses		0.10			0.02			-
Amortization of intangible assets		0.17			0.18			0.17
Financing charges in interest expense		0.02			0.02			0.02
Tax effect of the above adjustments ^ï¿½nbsp;		(0.05	)		(0.03	)		(0.03	)
Revaluation of deferred taxes and one-time tax repatriation
charges associated with U.S. tax reform		-			-			(0.26	)
Amortization of intangible assets included in NCI, net of tax		(0.02	)		(0.02	)		(0.02	)
Adjusted net income attributable to AECOM - per diluted shares	$	0.53		$	0.74		$	0.57

Weighted average shares outstanding - Diluted		158.0			161.1			161.8


AECOM
Regulation G Information
($ in millions, except per share data)

Reconciliation of EBITDA to Adjusted Income from Operations
	Three Months Ended
	Dec 31, 2016			Sep 30, 2017			Dec 31, 2017

EBITDA ⁽¹⁾	$	188.2		$	217.7		$	179.2
Non-core operating losses		2.0			3.7			-
Acquisition and integration expenses		15.4			3.3			-
Depreciation expense included in acquisition and integration expense line above		(0.3	)		-			-
Adjusted EBITDA	$	205.3		$	224.7		$	179.2
Other income		(0.8	)		(2.4	)		(2.3	)
Interest income ⁽²⁾		0.7			1.8			1.8
Depreciation ⁽³⁾		(38.0	)		(43.0	)		(36.2	)
Noncontrolling interests in income of consolidated subsidiaries, net of tax		18.6			15.3			13.1
Amortization of intangible assets included in NCI, net of tax		2.4			2.6			2.5
Adjusted income from operations	$	188.2		$	199.0		$	158.1
⁽¹⁾ See Reconciliation of Net Income Attributable to AECOM to EBITDA. ⁽²⁾ Included in other income. ⁽³⁾ Excluding acquisition and integration related expenses.

Reconciliation of Segment Income from Operations to Adjusted Income from Operations

Segment Income from Operations
Design & Consulting Services Segment:
Income from operations	$	99.3		$	106.1		$	85.3
Non-core operating losses		2.0			3.8			-
Amortization of intangible assets		7.0			6.5			6.2
Adjusted income from operations	$	108.3		$	116.4		$	91.5

Construction Services Segment:
Income from operations	$	18.1		$	38.2		$	40.5
Amortization of intangible assets		7.3			10.6			10.8
Adjusted income from operations	$	25.4		$	48.8		$	51.3

Management Services Segment:
Income from operations	$	74.0		$	48.3		$	40.1
Amortization of intangible assets		13.1			13.1			9.9
Adjusted income from operations	$	87.1		$	61.4		$	50.0


AECOM Regulation G Information

FY18 GAAP EPS Guidance based on Adjusted EPS Guidance

			Fiscal Year End 2018

GAAP EPS Guidance			$2.28 to $2.68
Adjusted EPS Excludes:
Amortization of intangible assets			$0.56
Financing charges in interest expense			$0.10
Tax effect of the above items*			($0.18)
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform			($0.26)
Adjusted EPS Guidance			$2.50 to $2.90

« Previous Page 1 | 2 | 3 | 4 Next Page »