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 companies had revenue of approximately $17.4 billion for the fiscal year ended September 30, 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; uncertainties related to government contract appropriations; Budget Control Act of 2011; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; Brexit; losses under fixed-price contracts; limited control over operations run through our joint venture entities; misconduct by our employees or consultants or our failure to comply with laws or regulations applicable to our business; our leveraged position and ability to service our debt; ability to maintain surety and financial capacity; exposure to legal, political and economic risks in different countries as well as currency exchange rate fluctuations; the failure to retain and recruit key technical and management personnel; our insurance policies may not provide adequate coverage; unexpected adjustments and cancellations related to our backlog; dependence on third party contractors who fail to satisfy their obligations; systems and information technology interruption; and changing client preferences/demands, fiscal positions and payment patterns. Additional factors that could cause actual results to differ materially from our forward-looking statements are 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, 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. 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 Statement of Income | |||||||||||||||
| (unaudited - in thousands, except per share data) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| December 31, 2015 | December 31, 2016 | % Change | |||||||||||||
| Revenue | $ | 4,297,651 | $ | 4,358,349 | 1.4 | % | |||||||||
| Cost of revenue | 4,156,793 | 4,188,376 | 0.8 | % | |||||||||||
| Gross profit | 140,858 | 169,973 | 20.7 | % | |||||||||||
| Equity in earnings of joint ventures | 25,263 | 21,471 | (15.0 | %) | |||||||||||
| General and administrative expenses | (28,639 | ) | (32,639 | ) | 14.0 | % | |||||||||
| Acquisition & integration expenses | (41,038 | ) | (15,412 | ) | (62.4 | %) | |||||||||
| Loss on disposal activities | (41,053 | ) | - | (100.0 | %) | ||||||||||
| Income from operations | 55,391 | 143,393 | 158.9 | % | |||||||||||
| Other income | 3,042 | 860 | (71.7 | %) | |||||||||||
| Interest expense | (59,518 | ) | (53,637 | ) | (9.9 | %) | |||||||||
| (Loss) income before income tax (benefit) expense | (1,085 | ) | 90,616 | NM | |||||||||||
| Income tax (benefit) expense | (682 | ) | 24,838 | NM | |||||||||||
| Net (loss) income | (403 | ) | 65,778 | NM | |||||||||||
| Noncontrolling interest in income of consolidated subsidiaries, net of tax | (19,964 | ) | (18,599 | ) | (6.8 | %) | |||||||||
| Net (loss) income attributable to AECOM | $ | (20,367 | ) | $ | 47,179 | (331.6 | %) | ||||||||
| Net (loss) income attributable to AECOM per share: | |||||||||||||||
| Basic | $ | (0.13 | ) | $ | 0.31 | (338.5 | %) | ||||||||
| Diluted | $ | (0.13 | ) | $ | 0.30 | (330.8 | %) | ||||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 153,619 | 154,255 | 0.4 | % | |||||||||||
| Diluted | 153,619 | 157,993 | 2.8 | % | |||||||||||
| AECOM | |||||||||
| Balance Sheet and Cash Flow Information | |||||||||
| (unaudited - in thousands) | |||||||||
|
September 30, 2016 |
December 31, 2016 | ||||||||
| Balance Sheet Information: | |||||||||
| Total cash and cash equivalents | $ | 692,145 | $ | 697,717 | |||||
| Accounts receivable – net | 4,531,460 | 4,538,396 | |||||||
| Working capital | 696,015 | 819,773 | |||||||
| Total debt excluding unamortized debt issuance costs | 4,125,290 | 4,164,043 | |||||||
| Total assets | 13,669,936 | 13,508,996 | |||||||
| Total AECOM stockholders’ equity | 3,366,921 | 3,378,413 | |||||||
| AECOM | |||||||||||||||||||||
| Reportable Segments | |||||||||||||||||||||
| (unaudited - in thousands) | |||||||||||||||||||||
|
Design &
Consulting Services |
Construction
Services |
Management
Services |
Corporate | Total | |||||||||||||||||
| 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 | - | - | - | (32,639) | (32,639) | ||||||||||||||||
| Acquisition & integration expenses | - | - | - | (15,412) | (15,412) | ||||||||||||||||
| Operating income (loss) | $ | 99,328 | $ | 18,068 | $ | 74,048 | $ | (48,051) | $ | 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 | |||||||||||
| Three Months Ended December 31, 2015* | |||||||||||||||||||||
| Revenue | $ | 1,862,087 | $ | 1,678,622 | $ | 756,942 | $ | - | $ | 4,297,651 | |||||||||||
| Cost of revenue | 1,782,825 | 1,667,188 | 706,780 | - | 4,156,793 | ||||||||||||||||
| Gross profit | 79,262 | 11,434 | 50,162 | - | 140,858 | ||||||||||||||||
| Equity in earnings of joint ventures | 2,998 | 2,679 | 19,586 | - | 25,263 | ||||||||||||||||
| General and administrative expenses | - | - | - | (28,639) | (28,639) | ||||||||||||||||
| Acquisition & integration expenses | - | - | - | (41,038) | (41,038) | ||||||||||||||||
| Loss on disposal activities | - | (41,053) | - | - | (41,053) | ||||||||||||||||
| Operating income (loss) | $ | 82,260 | $ | (26,940) | $ | 69,748 | $ | (69,677) | $ | 55,391 | |||||||||||
| Gross profit as a % of revenue | 4.3% | 0.7% | 6.6% | - | 3.3% | ||||||||||||||||
| Contracted backlog | $ | 8,188,680 | $ | 11,371,941 | $ | 4,258,232 | $ | - | $ | 23,818,853 | |||||||||||
| Awarded backlog | 6,184,150 | 5,712,030 | 4,465,191 | - | 16,361,371 | ||||||||||||||||
| Unconsolidated JV backlog | - | 1,045,910 | 1,618,104 | - | 2,664,014 | ||||||||||||||||
| Total backlog | $ | 14,372,830 | $ | 18,129,881 | $ | 10,341,527 | $ | - | $ | 42,844,238 | |||||||||||
|
* During the first quarter of fiscal year 2017, an operation and maintenance related operation previously reported within our CS segment was realigned within our MS segment to reflect present management oversight. Accordingly, approximately $33 million of revenue and $32 million of cost of revenue was reclassified for the quarter ended December 31, 2015 to conform to the current period presentation. |
| AECOM | ||||||||||||
| Regulation G Information | ||||||||||||
| ($ in millions, except per share data) | ||||||||||||
|
Reconciliation of Reported Amounts to Adjusted Amounts Excluding Acquisition and Integration
the Financial Impacts Associated with Dispositions of Non-core Businesses and Assets and Tax Effects |
||||||||||||
| Three Months Ended | ||||||||||||
|
Dec 31,
2015 |
Sep 30,
2016 |
Dec 31,
2016 |
||||||||||
| Income from operations | $ | 55.4 | $ | 69.0 | $ | 143.4 | ||||||
| Non-core operating losses | 7.1 | 9.9 | 2.0 | |||||||||
| Acquisition and integration expenses | 41.0 | 71.3 | 15.4 | |||||||||
| Loss on disposal activities | 41.0 | - | - | |||||||||
| Amortization of intangible assets | 75.0 | 36.6 | 27.4 | |||||||||
| Adjusted income from operations | $ | 219.5 | $ | 186.8 | $ | 188.2 | ||||||
| (Loss) income before income tax expense | $ | (1.1 | ) | $ | (1.4 | ) | $ | 90.6 | ||||
| Non-core operating losses | 7.1 | 9.9 | 2.0 | |||||||||
| Acquisition and integration expenses | 41.0 | 71.2 | 15.4 | |||||||||
| Loss on disposal activities | 41.0 | - | - | |||||||||
| Amortization of intangible assets | 75.0 | 36.6 | 27.4 | |||||||||
| Financing charges in interest expense | 4.1 | 17.6 | 2.8 | |||||||||
| Adjusted income before income tax expense | $ | 167.1 | $ | 133.9 | $ | 138.2 | ||||||
| Income tax (benefit) expense | $ | (0.7 | ) | $ | (14.3 | ) | $ | 24.8 | ||||
| Tax effect of the above adjustments �nbsp; | 35.9 | 38.3 | 8.8 | |||||||||
| Adjusted income tax expense | $ | 35.2 | $ | 24.0 | $ | 33.6 | ||||||
|
�nbsp; 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 | $ | (20.0 | ) | $ | (5.7 | ) | $ | (18.6 | ) | |||
| Amortization of intangible assets included in NCI, net of tax | (6.5 | ) | (2.3 | ) | (2.4 | ) | ||||||
| Adjusted noncontrolling interests in income of consolidated subsidiaries, net of tax | $ | (26.5 | ) | $ | (8.0 | ) | $ | (21.0 | ) | |||
| Net (loss) income attributable to AECOM | $ | (20.4 | ) | $ | 7.2 | $ | 47.2 | |||||
| Non-core operating losses | 7.1 | 9.9 | 2.0 | |||||||||
| Acquisition and integration expenses | 41.0 | 71.2 | 15.4 | |||||||||
| Amortization of intangible assets | 75.0 | 36.6 | 27.4 | |||||||||
| Loss on disposal activities | 41.0 | - | - | |||||||||
| Financing charges in interest expense | 4.1 | 17.6 | 2.8 | |||||||||
| Tax effect of the above adjustments | (35.8 | ) | (38.2 | ) | (8.8 | ) | ||||||
| Amortization of intangible assets included in NCI, net of tax | (6.5 | ) | (2.3 | ) | (2.4 | ) | ||||||
| Adjusted net income attributable to AECOM | $ | 105.5 | $ | 102.0 | $ | 83.6 | ||||||
| Net (loss) income attributable to AECOM - per diluted share* | $ | (0.13 | ) | $ | 0.05 | $ | 0.30 | |||||
| Per diluted share adjustments: | ||||||||||||
| Non-core operating losses | 0.05 | 0.06 | 0.01 | |||||||||
| Acquisition and integration expenses | 0.26 | 0.45 | 0.10 | |||||||||
| Amortization of intangible assets | 0.48 | 0.23 | 0.17 | |||||||||
| Loss on disposal activities | 0.26 | - | - | |||||||||
| Financing charges in interest expense | 0.03 | 0.11 | 0.02 | |||||||||
| Tax effect of the above adjustments | (0.23 | ) | (0.24 | ) | (0.05 | ) | ||||||
| Amortization of intangible assets included in NCI, net of tax | (0.04 | ) | (0.01 | ) | (0.02 | ) | ||||||
| Adjusted net income attributable to AECOM - per diluted shares* | $ | 0.68 | $ | 0.65 | $ | 0.53 | ||||||
| Weighted average shares outstanding - Diluted | 154.8 | 157.9 | 158.0 | |||||||||
