AECOM (NYSE:ACM), a premier, fully integrated global
infrastructure firm, today reported third quarter revenue of $4.6
billion. Net income1 and diluted earnings per share1 were $101
million and $0.64 in the third quarter, respectively. On an
adjusted basis, diluted earnings per share2 was $0.78.
- Third consecutive quarter of positive
organic3 revenue growth.
- Record $9.0 billion of wins and $46.4
billion backlog, led by a $3.6 billion Management Services win for
the U.S. Air Force and contributions across the business.
- Generated all-time high free cash flow4
of $394 million, enabling continued debt reduction.
- Addition of Shimmick Construction
greatly expands the Company’s integrated civil infrastructure
capabilities in strong Western U.S. markets.
($ in millions, except EPS)
As Reported
Adjusted (Non-GAAP) As Reported YoY
% Change Adjusted YoY % Change
Highlights Revenue $4,561
- 3% - Growth led by
Building Construction, Power and Management Services Operating
Income $208 $2395 88%
9% Reflects benefits of diverse business model Net
Income $1011 $1232 50%
(2%) EPS (Fully Diluted) $0.641
$0.782 49% (4%) Operating Cash
Flow $414 - 59%
- Consistent with expectations for strong second half cash
performance Free Cash Flow - $3944
- 106% Year-to-date free cash flow up
10% over year-ago period Backlog $46,401
- 13%6 - Mix shifting to
higher-margin work in Management Services and Power
Note: All comparisons are year over year unless otherwise
noted.
“Our third quarter results demonstrate the benefits of our fully
integrated business model, which produced positive organic growth
for the third consecutive quarter, record wins and backlog, and
strong execution on our key priorities,” said Michael S. Burke,
AECOM’s chairman and chief executive officer. “We continue to make
deliberate investments to strengthen our foundation for future
growth, such as the recent addition of Shimmick Construction’s
leading heavy civil infrastructure construction capabilities. As a
result, we are better positioned than ever to capitalize on the
growth opportunities across our markets and to best serve our
clients’ growing preference for alternative delivery
solutions.”
“We are pleased to have delivered another strong quarter of cash
flow and debt reduction, reflecting the benefits of our diverse
business and commitment to achieving our cash flow targets,” said
W. Troy Rudd, AECOM’s chief financial officer. “We remain confident
in our cash flow outlook and are focused on delivering stockholder
value through balanced capital allocation and continued emphasis on
deleveraging.”
Wins and Backlog
Wins were $9.0 billion, an increase of 164% from last quarter,
and resulted in a book-to-burn ratio7 of 1.8. Wins were highlighted
by a $3.6 billion win in the Management Services segment, and
strong performance across the company. Total backlog increased 13%6
over the prior-year period to $46.4 billion.
Business Segments
In addition to providing consolidated financial results, AECOM
reports separate financial information for its four segments:
Design & Consulting Services, Construction Services, Management
Services, and AECOM Capital.
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 third quarter was $1.9 billion. Constant-currency
organic3 revenue decreased by 1%. Performance in the Asia-Pacific
region remains strong, however, low oil prices continue to
negatively impact the Company’s markets. The pace of activity in
the Americas is slower than previously contemplated earlier in the
year, but substantial funding initiatives and continued investments
in business development have resulted in a new high for backlog and
positions the Company to deliver future growth.
Operating income was $94 million compared to $124 million in the
year-ago period. On an adjusted basis, operating income8 was $104
million compared to $150 million in the year-ago period. Third
quarter adjusted operating income reflects solid underlying
execution offset by the impact of lower revenue in the EMEA region
and increased investment in business development to capitalize on
growth opportunities.
Construction Services (CS)
The CS segment provides construction services for energy,
sports, commercial, industrial, and public and private
infrastructure clients.
Revenue in the third quarter was $1.8 billion. Constant-currency
organic3 revenue increased by 8%, highlighted by double-digit
growth in the Building Construction and Power businesses.
Operating income was $33 million compared to $11 million in the
year-ago period. On an adjusted basis, operating income9 was $42
million compared to $22 million in the year-ago period, and was
driven by strong performance in the Building Construction and Power
businesses.
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 third quarter was $856 million. Organic3 revenue
increased by 2%, reflecting strong business momentum and the
successful conversion of the Company’s pipeline to wins.
Operating income was $66 million compared to $55 million in the
year-ago period. On an adjusted basis, operating income9 was $79
million compared to $76 million in the year-ago period, reflecting
strong execution across the Company’s vast and diverse portfolio of
projects.
AECOM Capital (ACAP)
The ACAP segment invests in private-sector real estate,
public-private partnerships (P3), and infrastructure. Operating
income in the third quarter was $46 million and included the
Company’s first investment monetization, which closed during the
quarter for an approximately 30% IRR, and also resulted in fees
earned by the CS segment. ACAP continues to manage a diverse
portfolio that includes numerous active investments and $220
million of committed capital.
Tax Rate
The effective tax rate in the third quarter was 8.2%. On an
adjusted basis, the effective tax rate was 15.5%. Both rates
reflect the benefit from the Company’s decision in the third
quarter to indefinitely reinvest a portion of its non-U.S.
undistributed earnings for which U.S. tax had previously been
provided. The net impact to full-year earnings per share resulting
from tax variances incorporated in the Company’s updated tax
guidance is a $0.07 benefit. The adjusted tax rate was derived by
re-computing the expected 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 third quarter was $414 million and
free cash flow4 was $394 million, both of which set new quarterly
highs. The Company remains on track with its annual free cash flow
guidance of $600 million to $800 million for fiscal 2017.
Balance Sheet
As of June 30, 2017, AECOM had $812 million of total cash and
cash equivalents, $3.2 billion of net debt and $992 million in
unused capacity under its $1.05 billion revolving credit facility.
Total debt has declined by $1.4 billion since closing the URS
acquisition in October 2014.
Financial Outlook
AECOM is reiterating fiscal year 2017 adjusted EPS2 guidance of
$2.80 to $3.20, which includes approximately $0.20 of anticipated
gains related to AECOM Capital realizations at the mid-point of the
range.
The Company expects fiscal 2017 full-year interest expense,
excluding amortization of deferred financing fees, of approximately
$215 million as compared to $210 million previously, which now
reflects the Shimmick transaction. The Company expects an effective
tax rate10 for adjusted earnings of approximately 16% compared to
18% previously, reflecting a lower than anticipated fiscal third
quarter effective tax rate and a higher than previously anticipated
fiscal fourth quarter effective tax rate.
The Company continues to expect a full-year share count of 159
million, and also expects $36 million of acquisition and
integration expenses during the fiscal year. Fiscal year 2017
capital expenditures11 are expected to be approximately $115
million. The Company expects depreciation expense of approximately
$165 million and the amortization of intangible assets12 to be
approximately $100 million compared to $95 million previously.
Conference Call
AECOM is hosting a conference call today at 12 p.m. EDT, 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 Defined as attributable to AECOM.
2 Defined as attributable to AECOM, excluding acquisition and
integration related expenses, financing charges in interest
expense, the amortization of intangible assets, and financial
impacts associated with expected and actual dispositions of
non-core businesses and assets.
3 Organic growth is at constant currency and excludes revenue
associated with actual and planned non-core asset and business
dispositions. Results expressed in constant currency are presented
excluding the impact from changes in currency exchange rates.
4 Free cash flow is defined as cash flow from operations less
capital expenditures net of proceeds from disposals.
5 Excluding acquisition and integration related expenses,
financing charges in interest expense, the amortization of
intangible assets, and financial impacts associated with expected
and actual dispositions of non-core businesses and assets.
6 On a constant-currency basis.
7 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.
8 Excluding intangible amortization and financial impacts
associated with expected and actual dispositions of non-core
businesses and assets.
9 Excluding intangible amortization.
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.
11 Capital expenditures, net of proceeds from disposals.
12 Amortization of intangible assets expense includes the impact
of amortization included in equity in earnings of joint ventures
and non-controlling interests.
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
$17.4 billion during fiscal year 2016. 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, amortization of intangible assets and financial fees,
AECOM Capital realizations, 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: 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 and claims and inadequate insurance coverage; we are
subject to environmental law compliance and may not have adequate
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
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
net and operating income to exclude the impact of prior
acquisitions and dispositions. 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 tables at the back of this release.
AECOM
Consolidated Statements of
Income
(unaudited - in thousands, except per
share data)
Three Months Ended Nine Months Ended
June 30,2016 June 30,2017
%Change June 30,2016 June
30,2017 %Change Revenue $ 4,408,782
$ 4,561,467 3.5 % $ 13,087,729 $ 13,347,014 2.0 % Cost of revenue
4,237,439 4,386,291 3.5 % 12,592,084 12,833,421 1.9 % Gross profit
171,343 175,176 2.2 % 495,645 513,593 3.6 % Equity in
earnings of joint ventures 18,513 66,458 259.0 % 82,792 109,667
32.5 % General and administrative expenses (28,863 ) (33,944 ) 17.6
% (86,957 ) (96,427 ) 10.9 % Acquisition and integration expenses
(50,678 ) — (100.0 )% (142,427 ) (35,409 ) (75.1 )% (Loss) gain on
disposal — — 0.0 % (42,589 ) 572 (101.3 )% Income from operations
110,315 207,690 88.3 % 306,464 491,996 60.5 % Other income
1,498 2,136 42.6 % 5,286 4,237 (19.8 )% Interest expense (62,516 )
(61,547 ) (1.6 )% (184,757 ) (176,985 ) (4.2 )% Income before
income tax expense 49,297 148,279 200.8 % 126,993 319,248 151.4 %
Income tax (benefit) expense (35,097 ) 12,205 (134.8 )%
(23,592 ) 1,556 (106.6 )% Net income 84,394 136,074 61.2 %
150,585 317,692 111.0 % Noncontrolling interests in income
of consolidated subsidiaries, net of tax (16,950 ) (34,747 ) 105.0
% (61,680 ) (66,790 ) 8.3 % Net income attributable to AECOM
$ 67,444 $ 101,327 50.2 % $ 88,905 $ 250,902 182.2 % Net
income attributable to AECOM per share: Basic $ 0.44 $ 0.65 47.7 %
$ 0.58 $ 1.62 179.3 % Diluted $ 0.43 $ 0.64 48.8 % $ 0.57 $ 1.58
177.2 % Weighted average shares outstanding: Basic 154,852
155,763 0.6 % 154,256 155,128 0.6 % Diluted 156,175 158,820 1.7 %
155,479 158,488 1.9 %
Balance Sheet and Cash Flow
Information
(unaudited - in thousands)
September 30,2016 June 30,2017
Balance Sheet Information: Total cash and cash equivalents $
692,145 $ 812,459 Accounts receivable – net 4,531,460 4,759,306
Working capital 696,015 1,143,689 Total debt, excluding unamortized
debt issuance costs 4,125,290 3,966,343 Total assets 13,669,936
13,836,242 Total AECOM stockholders’ equity 3,366,921 3,708,618
AECOMReportable
Segments(unaudited - in thousands)
Design &ConsultingServices
ConstructionServices ManagementServices
ACAP Corporate Total Three Months Ended
June 30, 2017 Revenue $ 1,863,475 $ 1,841,620 $ 856,372 $ - $ -
$ 4,561,467 Cost of revenue 1,772,240
1,815,467 798,584 - -
4,386,291 Gross profit 91,235 26,153 57,788 -
- 175,176 Equity in earnings of joint ventures 2,371 7,022 8,638
48,427 - 66,458 General and administrative expenses -
- - (2,147 ) (31,797 )
(33,944 ) Income (loss) from operations $ 93,606 $
33,175 $ 66,426 $ 46,280 $ (31,797 ) $ 207,690
Gross profit as a % of revenue 4.9 % 1.4 % 6.7 % - -
3.8 %
Three Months Ended June 30, 2016*
Revenue $ 1,920,576 $ 1,650,766 $ 837,440 $ - $ - $ 4,408,782 Cost
of revenue 1,797,577 1,643,104
796,758 - - 4,237,439
Gross profit 122,999 7,662 40,682 - - 171,343 Equity in
earnings of joint ventures 1,041 3,518 13,954 - - 18,513 General
and administrative expenses - - - (1,613 ) (27,250 ) (28,863 )
Acquisition and integration expenses - -
- - (50,678 )
(50,678 ) Income (loss) from operations $ 124,040 $ 11,180
$ 54,636 $ (1,613 ) $ (77,928 ) $ 110,315
Gross profit as a % of revenue 6.4 % 0.5 % 4.9 % - - 3.9 %
AECOMReportable
Segments(unaudited - in thousands)
Design &ConsultingServices
ConstructionServices ManagementServices
ACAP Corporate Total Nine Months Ended June
30, 2017 Revenue $ 5,571,823 $ 5,324,561 $ 2,450,630 $ - $ - $
13,347,014 Cost of revenue 5,279,322 5,264,199
2,289,900 - -
12,833,421 Gross profit 292,501 60,362 160,730 - -
513,593 Equity in earnings of joint ventures 12,578 16,596 32,066
48,427 - 109,667 General and administrative expenses - - - (6,594 )
(89,833 ) (96,427 ) Acquisition and integration expenses - - - -
(35,409 ) (35,409 ) Gain on disposal 572 -
- - - 572
Income (loss) from operations $ 305,651 $ 76,958
$ 192,796 $ 41,833 $ (125,242 ) $ 491,996
Gross profit as a % of revenue 5.2 % 1.1 % 6.6 % - -
3.8 % Contracted backlog $ 8,523,849 $ 11,650,567 $
3,376,912 $ - $ - $ 23,551,328 Awarded backlog 6,738,345 4,696,196
8,395,977 - - 19,830,518 Unconsolidated JV backlog -
2,023,084 995,820 -
- 3,018,904 Total backlog $ 15,262,194
$ 18,369,847 $ 12,768,709 $ - $ -
$ 46,400,750
Nine Months Ended June
30, 2016* Revenue $ 5,748,825 $ 4,842,461 $ 2,496,443 $ - $ - $
13,087,729 Cost of revenue 5,449,328 4,819,486
2,323,270 - -
12,592,084 Gross profit 299,497 22,975 173,173 - -
495,645 Equity in earnings of joint ventures 6,202 8,906 67,684 - -
82,792 General and administrative expenses - - - (4,558 ) (82,399 )
(86,957 ) Acquisition and integration expenses - - - - (142,427 )
(142,427 ) Loss on disposal - (42,589 )
- - - (42,589 ) Income
(loss) from operations $ 305,699 $ (10,708 ) $ 240,857
$ (4,558 ) $ (224,826 ) $ 306,464 Gross profit
as a % of revenue 5.2 % 0.5 % 6.9 % - - 3.8 % Contracted
backlog $ 8,053,550 $ 12,001,079 $ 3,787,741 - $ - $ 23,842,370
Awarded backlog 5,737,196 4,572,028 4,259,460 - - 14,568,684
Unconsolidated JV backlog - 1,525,363
1,054,849 - -
2,580,212 Total backlog $ 13,790,746 $ 18,098,470
$ 9,102,050 $ - $ - $ 40,991,266
* During the first quarter of fiscal year 2017, a maintenance
related operation previously reported within our CS segment was
realigned within our MS segment to reflect present management
oversight. Accordingly, to conform to the current period
presentation, approximately $33 million of revenue and
$32 million of cost of revenue was reclassified for the
quarter ended June 30, 2016. For the nine months ended June 30,
2016, $99 million of revenue and $95 million of cost of
revenue was reclassified.
AECOMRegulation G
Information($ in millions)
Reconciliation of
Amounts Provided by Acquired Companies
Three Months EndedJune 30, 2017 Nine Months
EndedJune 30, 2017 Total Provided by
Acquired Companies Excluding Effect of Acquired
Companies Total Provided by Acquired
Companies Excluding Effect of Acquired Companies
Revenue AECOM Consolidated $ 4,561.5 $ 64.0 $ 4,497.5 $
13,347.0 $ 159.8 $ 13,187.2 Design & Consulting Services
1,863.5 - 1,863.5 5,571.8 - 5,571.8 Construction Services 1,841.7
64.0 1,777.7 5,324.6 159.8 5,164.8 Management Services 856.3 -
856.3 2,450.6 - 2,450.6
Reconciliation of
Net Income Attributable to AECOM to EBITDA
Three Months Ended
Nine Months Ended Jun 30, 2016 Mar 31,
2017
Jun 30,
2017
Jun 30,
2016
Jun 30,
2017
Net income attributable to AECOM $ 67.4 $ 102.4 $ 101.3 $
88.9 $ 250.9 Income tax (benefit) expense (35.1 )
(35.4 ) 12.1 (23.6 ) 1.5 Income
attributable to AECOM before income taxes 32.3 67.0 113.4 65.3
252.4 Depreciation and amortization1 98.3 72.1 67.4 322.4 206.0
Interest income2 (1.2 ) (1.3 ) (1.7 ) (3.0 ) (3.7 ) Interest
expense3 57.1 52.7 58.5
170.4 161.6 EBITDA $ 186.5 $
190.5 $ 237.6 $ 555.1 $ 616.3
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: Jun 30, 2016 Mar 31,
2017 Jun 30, 2017 Short-term debt $ 20.8 $ 21.4 $
1.7 Current portion of long-term debt 333.3 331.2 155.4 Long-term
debt, gross 3,941.1 3,908.9 3,809.2 Total
debt, excluding unamortized debt issuance costs 4,295.2 4,261.5
3,966.3 Less: Total cash and cash equivalents 628.0
725.9 812.5 Net debt $ 3,667.2 $ 3,535.6 $ 3,153.8
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended Dec 31, 2015 Mar
31, 2016 Jun 30, 2016 Sep 30, 2016
Dec 31, 2016
Mar 31, 2017 Jun 30, 2017 Net cash
provided by (used in) operating activities $ 78.0 $ 113.2 $ 260.1 $
362.9 $ 77.5 $ (46.1 ) $ 413.9 Capital expenditures, net
(0.8 ) (30.3 ) (68.8 ) (36.9 ) (21.0 )
(17.7 ) (19.8 ) Free cash flow $ 77.2 $ 82.9
$ 191.3 $ 326.0 $ 56.5 $ (63.8 ) $
394.1
AECOMRegulation G
Information(in millions, except per share data)
Reconciliation of Reported Amounts to
Adjusted Amounts Excluding Acquisition and Integration
Related Expenses, Financing Charges in
Interest Expense, the Amortization of Intangible Assets
and the Financial Impacts Associated with
Dispositions of Non-core Businesses and Assets
Three Months Ended Nine Months Ended Jun
30,2016 Mar 31,2017 Jun
30,2017 Jun 30,2016 Jun
30,2017 Income from operations $ 110.4 $ 140.9 $ 207.7 $
306.5 $ 492.0 Non-core operating losses 14.4 0.5 3.2 27.0 5.7
Acquisition and integration expenses 50.6 20.0 – 142.4 35.4 (Loss)
gain on disposal activity – (0.6 ) – 42.6 (0.6 ) Amortization of
intangible assets 43.8 27.7 28.4 188.8
83.5 Adjusted income from operations $ 219.2 $ 188.5 $ 239.3
$ 707.3 $ 616.0 Income before income tax expense $ 49.3 $
80.4 $ 148.2 $ 127.0 $ 319.2 Non-core operating losses 14.4 0.5 3.2
27.0 5.7 Acquisition and integration expenses 50.7 20.0 – 142.4
35.4 (Loss) gain on disposal activity – (0.6 ) – 42.6 (0.6 )
Amortization of intangible assets 43.8 27.7 28.4 188.8 83.5
Financing charges in interest expense 5.1 8.7
2.9 13.3 14.4 Adjusted income before income tax
expense $ 163.3 $ 136.7 $ 182.7 $ 541.1 $ 457.6 Income tax
(benefit) expense $ (35.1 ) $ (35.4 ) $ 12.1 $ (23.6 ) $ 1.5
Tax effect of the above adjustments*
53.1 15.5 10.5 124.1 34.8
Adjusted income tax expense (benefit) $ 18.0 $ (19.9 ) $ 22.6 $
100.5 $ 36.3
*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 $ (17.0 ) $ (13.4 ) $ (34.8 ) $ (61.7 ) $
(66.8 ) Amortization of intangible assets included in NCI, net of
tax (2.2 ) (2.4 ) (2.1 ) (12.7 )
(6.9 ) Adjusted noncontrolling interests in income of consolidated
subsidiaries, net of tax $ (19.2 ) $ (15.8 ) $ (36.9 ) $ (74.4 ) $
(73.7 ) Net income attributable to AECOM $ 67.4 $ 102.4 $
101.3 $ 88.9 $ 250.9 Non-core operating losses 14.4 0.5 3.2 27.0
5.7 Acquisition and integration expenses 50.7 20.0 – 142.4 35.4
Amortization of intangible assets 43.8 27.7 28.4 188.8 83.5 (Loss)
gain on disposal activity – (0.6 ) – 42.6 (0.6 ) Financing charges
in interest expense 5.1 8.7 2.9 13.3 14.4 Tax effect of the above
adjustments (53.1 ) (15.6 ) (10.4 ) (124.1 ) (34.8 ) Amortization
of intangible assets included in NCI, net of tax (2.2 )
(2.4 ) (2.1 ) (12.7 ) (6.9 ) Adjusted
net income attributable to AECOM $ 126.1 $ 140.7 $ 123.3 $ 366.2 $
347.6 Net income attributable to AECOM – per diluted share $
0.43 $ 0.65 $ 0.64 $ 0.57 $ 1.58 Per diluted share adjustments:
Non-core operating losses 0.09 0.01 0.02 0.18 0.04 Acquisition and
integration expenses 0.32 0.12 – 0.91 0.22 Amortization of
intangible assets 0.28 0.18 0.18 1.21 0.53 Loss on disposal
activity – – – 0.27 – Financing charges in interest expense 0.03
0.05 0.02 0.09 0.09 Tax effect of the above adjustments (0.33 )
(0.11 ) (0.07 ) (0.79 ) (0.23 ) Amortization of intangible assets
included in NCI, net of tax (0.01 ) (0.01 )
(0.01 ) (0.08 ) (0.04 ) Adjusted net income
attributable to AECOM – per diluted share $ 0.81 $ 0.89 $ 0.78 $
2.36 $ 2.19 Weighted average shares outstanding - diluted 156.2
158.7 158.8 155.5 158.5
AECOMRegulation G
Information($ in millions)
Reconciliation of Reported Amounts to
Adjusted Amounts Excluding Acquisition and Integration
Related Expenses, Financing Charges in
Interest Expense, the Amortization of Intangible Assets
and the Financial Impacts Associated with
Dispositions of Non-core Businesses and Assets
Three Months Ended Nine Months
Ended Jun 30,2016 Mar 31,2017
Jun 30,2017 Jun 30,2016 Jun
30,2017 EBITDA(1) $ 186.5 $ 190.5 $ 237.6 $ 555.1
$ 616.3 Non-core operating losses 14.4 0.5 3.2 27.0 5.7 Acquisition
and integration expenses 50.7 20.0 – 142.4 35.4 (Gain) loss on
disposal activity – (0.6 ) – 42.6 (0.6 ) Depreciation expense
included in acquisition and integration expense line above
(7.7 ) (0.5 ) – (19.8 ) (0.8 ) Adjusted
EBITDA $ 243.9 $ 209.9 $ 240.8 $ 747.3 $ 656.0 Other expense
(income) (1.5 ) (1.3 ) (2.1 ) (5.3 ) (4.2 ) Interest income(2) 1.2
1.3 1.7 3.0 3.7 Depreciation(3) (43.6 ) (37.2 ) (38.0 ) (112.2 )
(113.2 ) Noncontrolling interests in income of consolidated
subsidiaries, net of tax 16.9 13.4 34.8 61.7 66.8 Amortization of
intangible assets included in NCI, net of tax 2.3 2.4
2.1 12.8 6.9 Adjusted income from operations $
219.2 $ 188.5 $ 239.3 $ 707.3 $ 616.0
(1) See Reconciliation of Net Income
Attributable to AECOM to EBITDA
(2) Included in other income
(3) Excluding acquisition and integration related expenses
Segment Income from Operations‡ Design &
Consulting Services Segment: Income from operations $ 124.0 $ 112.7
$ 93.7 $ 305.7 $ 305.7 Non-core operating losses 14.4 0.5 3.1 21.8
5.6 Gain on disposal activity – (0.6 ) – – (0.6 ) Amortization of
intangible assets 11.5 6.9 6.8 84.0
20.7 Adjusted income from operations $ 149.9 $ 119.5 $ 103.6
$ 411.5 $ 331.4 Construction Services Segment: Income (loss)
from operations $ 11.2 $ 25.7 $ 33.2 $ (10.7 ) $ 77.0 Non-core
operating losses – – – 5.2 – Loss on disposal activity – – – 42.6 –
Amortization of intangible assets 10.6 7.8 8.7
32.1 23.8 Adjusted income from operations $ 21.8 $
33.5 $ 41.9 $ 69.2 $ 100.8 Management Services Segment:
Income from operations $ 54.6 $ 52.4 $ 66.4 $ 240.8 $ 192.8
Amortization of intangible assets 21.7 13.0
12.9 72.7 39.0 Adjusted income from operations $ 76.3
$ 65.4 $ 79.3 $ 313.5 $ 231.8
‡ During the first quarter of fiscal year 2017, a maintenance
related operation previously reported within our CS segment was
realigned within our MS segment to reflect present management
oversight. Accordingly, to conform to the current period
presentation, approximately $33 million of revenue and
$32 million of cost of revenue was reclassified for the
quarter ended June 30, 2016. For the nine months ended,
$99 million of revenue and $95 million of cost of revenue
was reclassified.
FY17 GAAP EPS
Guidance based on Adjusted EPS Guidance
Fiscal Year End
2017
GAAP EPS Guidance $2.09 to $2.49 Adjusted EPS Excludes:
Amortization of intangible assets $0.63 Acquisition and
integration-related expenses $0.23 Financing charges in interest
expense $0.11 Year-to-date non-core operating losses $0.03 Tax
effect of the above items* ($0.29) Adjusted EPS Guidance (Non-GAAP)
$2.80 to $3.20
*The adjusted tax expense differs from the GAAP tax expense
based on the deductibility and tax rate applied to each of the
adjustments.
FY17 GAAP Tax
Rate Guidance based on Adjusted Tax Rate Guidance
Fiscal Year End
2017
GAAP Tax Rate Guidance 9% Tax rate impact from
adjustments to GAAP earnings 5% Tax rate impact from inclusion of
NCI deduction 2% Effective Tax Rate for Adjusted Earnings Guidance
16%
FY17 GAAP
Interest Expense Guidance based on Adjusted Interest Expense
Guidance
Fiscal Year End
2017
(in millions) GAAP Interest Expense Guidance $232 Financing charge
in interest expense $17 Adjusted Interest Expense Guidance $215
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808005463/en/
AECOMInvestors:Will Gabrielski, 213-593-8208Vice
President, Investor
RelationsWilliam.Gabrielski@aecom.comorMedia:Brendan
Ranson-Walsh, 212-739-7212Vice President, Global External
CommunicationsBrendan.Ranson-Walsh@aecom.com
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