Balance Sheet
As of March 31, 2021, AECOM had $935 million of total cash and cash equivalents, $2.1 billion of total debt, $1.2 billion of net debt and $1.13 billion in unused capacity under its $1.15 billion revolving credit facility. Gross leverage6 of 2.5x remains below the Company’s long-term leverage target of 3.0x.
Tax Rate
The effective tax rate was 27.4% in the second quarter. On an adjusted basis, the effective tax rate was 28.4%. The adjusted tax rate was derived by re-computing the annual effective tax rate on earnings from adjusted net income.7 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.
Reiterated Long-Term Financial Targets
Following its strong performance in the first half of its fiscal year, AECOM reiterated its long-term financial targets, which include its target to more than double both adjusted1 EPS to at least $4.30 and free cash flow5 to at least $680 million from fiscal 2020 to fiscal 2024, as well as its target to achieve a 15%+ segment3 adjusted1 operating margin and 15%+ return on invested capital (ROIC)8 by fiscal 2024.
Conference Call
AECOM is hosting a conference call tomorrow May 11th at noon 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 to the comparable GAAP measures.
2 Revenue, net of subcontractor and other direct costs.
3 Reflects segment operating performance, excluding AECOM Capital and G&A.
4 Net income before interest expense, tax expense, depreciation and amortization.
5 Free cash flow is defined as cash flow from operations less capital expenditures, net of proceeds from equipment disposals.
6 Gross leverage is comprised of EBITDA as defined in the Company’s credit agreement dated October 17, 2014, as amended, and total debt on the Company’s financial statements.
7 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.
8 Return on invested capital, or ROIC, is calculated as the sum of adjusted net income as presented in the Company’s Regulation G Information and interest expense, net of interest income, divided by average quarterly invested capital as defined as the sum of attributable shareholder’s equity and total debt, less cash and cash equivalents.
About AECOM
AECOM (NYSE:
ACM) is the world’s premier infrastructure consulting firm, delivering professional services throughout the project lifecycle – from planning, design and engineering to program and construction management. On projects spanning transportation, buildings, water, energy and the environment, our public- and private-sector clients trust us to solve their most complex challenges. Our teams are driven by a common purpose to deliver a better world through our unrivaled technical expertise and innovation, a culture of equity, diversity and inclusion, and a commitment to environmental, social and governance priorities. AECOM is a Fortune 500 firm and its Professional Services business had revenue of $13.2 billion in fiscal year 2020. See how we deliver what others can only imagine at aecom.com and @AECOM.
Forward-Looking Statements
All statements in this communication other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, coronavirus impacts, risk profile and investment strategies, and any statements regarding future economic conditions or performance, and the expected financial and operational results of AECOM. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, but are not limited to, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; impacts caused by the coronavirus and the related economic instability and market volatility, including the reaction of governments to the coronavirus, including any prolonged period of travel, commercial or other similar restrictions, the delay in commencement, or temporary or permanent halting of construction, infrastructure or other projects, requirements that we remove our employees or personnel from the field for their protection, and delays or reductions in planned initiatives by our governmental or commercial clients or potential clients; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; high leverage and potential inability to service our debt and guarantees; exposure to Brexit; exposure to political and economic risks in different countries; currency exchange rate fluctuations; retaining and recruiting key technical and management personnel; legal claims; inadequate insurance coverage; environmental law compliance and adequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; AECOM Capital real estate development projects; managing pension cost; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the Management Services transaction, including the risk that the expected benefits of the Management Services transaction or any contingent purchase price will not be realized within the expected time frame, in full or at all; 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, 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 net service revenue to exclude subcontractor costs from revenue to provide investors with a better understanding of our operational performance. We present segment adjusted operating margin to reflect segment operating performance of our Americas and International segments, excluding AECOM Capital.
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.
AECOM
Consolidated Statements of Income
(unaudited - in thousands, except per share data)
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
|
March 31,
|
|
March 31,
|
|
%
|
|
March 31,
|
|
March 31,
|
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue |
|
$ |
3,245,737 |
|
$ |
3,265,573 |
|
0.6 % |
|
$ |
6,481,347 |
|
$ |
6,578,728 |
|
1.5 % |
|
|
Cost of revenue |
|
3,076,924 |
|
3,070,314 |
|
(0.2)% |
|
6,146,734 |
|
6,199,099 |
|
0.9 % |
|
||||
|
Gross profit |
|
168,813 |
|
195,259 |
|
15.7 % |
|
334,613 |
|
379,629 |
|
13.5 % |
|
||||
|
Equity in earnings of joint ventures |
|
13,505 |
|
7,157 |
|
(47.0)% |
|
23,433 |
|
15,358 |
|
(34.5)% |
|
||||
|
General and administrative expenses |
|
(41,037 |
) |
(36,007 |
) |
(12.3)% |
|
(84,651 |
) |
(74,367 |
) |
(12.1)% |
|
||||
|
Restructuring costs |
|
(31,213 |
) |
(8,746 |
) |
(72.0)% |
|
(76,138 |
) |
(21,784 |
) |
(71.4)% |
|
||||
|
Income from operations |
|
110,068 |
|
157,663 |
|
43.2 % |
|
197,257 |
|
298,836 |
|
51.5 % |
|
||||
|
Other income |
|
2,430 |
|
3,477 |
|
43.1 % |
|
6,438 |
|
7,330 |
|
13.9 % |
|
||||
|
Interest expense |
|
(37,111 |
) |
(32,800 |
) |
(11.6)% |
|
(77,488 |
) |
(63,451 |
) |
(18.1)% |
|
||||
|
Income before income tax expense |
|
75,387 |
|
128,340 |
|
70.2 % |
|
126,207 |
|
242,715 |
|
92.3 % |
|
||||
|
Income tax expense |
|
21,604 |
|
35,148 |
|
62.7 % |
|
37,510 |
|
60,749 |
|
62.0 % |
|
||||
|
Income from continuing operations |
|
53,783 |
|
93,192 |
|
73.3 % |
|
88,697 |
|
181,966 |
|
105.2 % |
|
||||
|
Loss from discontinued operations |
|
(130,749 |
) |
(47,914 |
) |
(63.4)% |
|
(112,569 |
) |
(103,666 |
) |
(7.9)% |
|
||||
|
Net (loss) income |
|
(76,966 |
) |
45,278 |
|
(158.8)% |
|
(23,872 |
) |
78,300 |
|
(428.0)% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income attributable to noncontrolling interests
|
|
(5,243 |
) |
(4,845 |
) |
(7.6)% |
|
(9,290 |
) |
(10,259 |
) |
10.4 % |
|
||||
|
Net income attributable to noncontrolling interests
|
|
(3,917 |
) |
(1,074 |
) |
(72.6)% |
|
(12,360 |
) |
(2,554 |
) |
(79.3)% |
|
||||
|
Net income attributable to noncontrolling interests |
|
(9,160 |
) |
(5,919 |
) |
(35.4)% |
|
(21,650 |
) |
(12,813 |
) |
(40.8)% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income attributable to AECOM from continuing operations |
|
48,540 |
|
88,347 |
|
82.0 % |
|
79,407 |
|
171,707 |
|
116.2 % |
|
||||
|
Net loss attributable to AECOM from discontinued operations |
|
(134,666 |
) |
(48,988 |
) |
(63.6)% |
|
(124,929 |
) |
(106,220 |
) |
(15.0)% |
|
||||
|
Net (loss) income attributable to AECOM |
|
$ |
(86,126 |
) |
$ |
39,359 |
|
(145.7)% |
|
$ |
(45,522 |
) |
$ |
65,487 |
|
(243.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net (loss) income attributable to AECOM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.31 |
|
$ |
0.60 |
|
93.5 % |
|
$ |
0.50 |
|
$ |
1.15 |
|
130.0 % |
|
|
Discontinued operations |
|
|
(0.85 |
) |
|
(0.33 |
) |
(61.2)% |
|
|
(0.79 |
) |
|
(0.71 |
) |
(10.1)% |
|
|
Basic (loss) earnings per share |
|
$ |
(0.54 |
) |
$ |
0.27 |
|
(150.0)% |
|
$ |
(0.29 |
) |
$ |
0.44 |
|
(251.7)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.30 |
|
$ |
0.59 |
|
96.7 % |
|
$ |
0.49 |
|
$ |
1.13 |
|
130.6 % |
|
|
Discontinued operations |
|
|
(0.84 |
) |
|
(0.33 |
) |
(60.7)% |
|
|
(0.77 |
) |
|
(0.70 |
) |
(9.1)% |
|
|
Diluted (loss) earnings per share |
|
$ |
(0.54 |
) |
$ |
0.26 |
|
(148.1)% |
|
$ |
(0.28 |
) |
$ |
0.43 |
|
(253.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
158,550 |
|
147,770 |
|
(6.8)% |
|
157,941 |
|
149,597 |
|
(5.3)% |
|
||||
|
Diluted |
|
160,718 |
|
149,519 |
|
(7.0)% |
|
160,687 |
|
151,632 |
|
(5.6)% |
|
||||
