News Release
Second Quarter | First Half Fiscal 2019 | ||||||||||||||||||||||||
($ in millions, |
As Reported |
Adjusted1 |
As Reported |
Adjusted |
As Reported |
Adjusted1 |
As Reported |
Adjusted |
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Revenue | $5,040 | -- | 5% | -- | $10,078 | -- | 4% | -- | |||||||||||||||||
Operating Income | $168 | $211 | NM | 18% | $252 | $395 | 189% | 17% | |||||||||||||||||
Net Income | $78 |
$109 |
NM | 0% | $129 | $198 | NM | (1%) | |||||||||||||||||
EPS (Fully Diluted) | $0.49 | $0.69 | NM | 3% | $0.81 | $1.24 | NM | 0% | |||||||||||||||||
EBITDA | -- | $235 | -- | 17% | -- | $442 | -- | 16% | |||||||||||||||||
Wins | $8,100 | -- | 17% | -- | $17,800 | -- | 37% | -- | |||||||||||||||||
Backlog | $61,014 | -- | 22%2 | -- | |||||||||||||||||||||
Second Quarter and First Half Fiscal 2019 Accomplishments:
-
Revenue of
$5.0 billion in the second quarter increased by 5% over the prior year; organic3 revenue increased by 7%, highlighted by 14% and 10% growth in the Company’s higher-margin Management Services andAmericas design businesses, respectively. -
Net income and diluted earnings per share were
$78 million and$0.49 in the second quarter, respectively, compared to net loss of$120 million and diluted loss per share of$0.75 in the prior year, which included a$168 million non-cash charge on non-core Oil & Gas assets held for sale; on an adjusted basis, diluted earnings per share1 was$0.69 . -
Second quarter adjusted EBITDA1 increased by 17% over the
prior year to
$235 million , which reflected strong execution, favorable end market trends, and the benefits of the Company’s$225 million G&A reduction plan. -
Year-to-date adjusted EBITDA1 increased by 16% to
$442 million . -
Total backlog increased by 22%2 and set a new record at
$61 billion . -
Wins in the quarter were
$8.1 billion , highlighted by an 18-month extension at the Savannah River Site for theU.S. Department of Energy , a 1.2 book-to-burn4 ratio in theAmericas design business; year-to-date wins of$18 billion set a new record with broad strength across the business. -
Second quarter operating cash flow of
$107 million and free cash flow5 of$85 million were consistent with expectations, with the exception of negative impacts from continued working capital investment to support storm recovery efforts in theU.S. Virgin Islands . -
The Company is reiterating its full year financial guidance for
adjusted EBITDA1 growth of 12% at the mid-point, adjusted
EPS1 in the range of
$2.60-$2.90 , and free cash flow5 in the range of$600-$800 million ; the Company expects to achieve at least$1 billion of adjusted EBITDA in fiscal 2020.
Committed to Delivering Strategic Value Creation Actions and Fiscal 2022 Financial Targets:
-
AECOM has completed nearly all of the actions necessary to achieve its expected$225 million of annual G&A savings by fiscal 2021, and the Company expects to achieve an adjusted operating margin1 in the DCS segment of at least 7% in fiscal 2019 and at least 7.5% in fiscal 2020. - In order to reduce its risk profile and simplify its operating structure, the Company is accelerating its review of its at-risk construction exposure and is no longer pursuing at-risk construction opportunities in international markets.
- Collectively, these actions position the Company to capitalize on its record backlog by focusing resources on higher-margin and lower-risk professional services businesses where its competitive advantages are greatest and financial returns are highest.
-
The Company remains committed to its fiscal 2018-2022 financial
targets, including a 9% adjusted EBITDA1 CAGR, a 12%-15%
adjusted EPS1 CAGR, and at least
$3.5 billion of cumulative free cash flow5. -
The Company continues to execute on its capital allocation priorities
with
$210 million of shares repurchased to-date under its$1 billion Board authorized repurchase plan; if the stock remains attractively valued, management expects to seek to expand its repurchase capacity and maximize value for its stockholders, while continuing to target achieving 2.5x net leverage6 by year end.
“We delivered 17% adjusted EBITDA growth in the second quarter and 16%
adjusted EBITDA growth in the first half of the fiscal year, which
reflects strong execution on our
“Our earnings performance in the first half of the year has exceeded our
expectations,” said
Wins and Backlog
Wins were
Business Segments
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 second quarter was
Operating income was
Construction Services (CS)
The CS segment provides construction services for energy, sports, commercial, industrial, and public and private infrastructure clients.
Revenue in the second quarter was
Operating income was
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 second quarter was
Operating income was
The ACAP segment invests in and develops real estate projects. Revenue
in the second quarter was
Tax Rate
The effective tax rate in the second quarter was 18.3%. On an adjusted basis, the effective tax rate was 23.0%. 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.
Cash Flow
Operating cash flow for the second quarter was
Balance Sheet and Capital Allocation
As of
Financial Outlook and Impacts of Strategic Actions
AECOM’s fiscal 2019 financial guidance is as follows:
Fiscal Year 2019 Outlook | ||||
Adjusted EBITDA1 | $920 - $960 million | |||
Adjusted EPS1 | $2.60 – $2.90 | |||
Free Cash Flow5 | $600 – $800 million | |||
Adjusted Interest Expense
(excluding amortization of deferred financing fees) |
$200 million | |||
Amortization8 | $89 million | |||
Full-Year Share Count | 160 million | |||
Effective Tax Rate for Adjusted Earnings7 | ~25% | |||
Capital Expenditures9 | ~$120 million |
Also included in the Company’s fiscal 2019 guidance is approximately
Conference Call
1 | Excluding acquisition and integration-related items, transaction-related expenses, financing charges in interest expense, foreign exchange gains, the amortization of intangible assets, financial impacts associated with expected and actual dispositions of non-core businesses and assets, restructuring costs and the revaluation of deferred taxes and one-time tax repatriation charge associated with U.S. tax reform. If an individual adjustment has no financial impact then the individual adjustment is not reflected in the Regulation G Information tables. See Regulation G Information for a reconciliation of Non-GAAP measures. | |
2 | On a constant-currency basis. | |
3 | Organic growth is year-over-year 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 | 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. | |
5 | Free cash flow is defined as cash flow from operations less capital expenditures net of proceeds from disposals. | |
6 | Net debt-to-EBITDA, or net leverage, is comprised of EBITDA as defined in the Company’s credit agreement, which excludes stock-based compensation, and net debt as defined as total debt on the Company’s financial statements, net of cash and cash equivalents. | |
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
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, cost savings, profitability, cash flows, tax rate, share count, stock repurchases, interest expense, capital expenditures, amortization of intangible assets and financial fees, or other financial items, any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, risk profile and investment strategies 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; long-term
government contracts and subject to uncertainties related to government
contract appropriations; government shutdowns; governmental agencies may
modify, curtail or terminate our contracts; government contracts are
subject to audits and adjustments of contractual terms; 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 business laws and regulations;
maintaining adequate surety and financial capacity; high leveraged 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;
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, adjusted interest expense, organic 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, adjusted tax rate and adjusted interest expense to exclude the impact of non-operating items, such as amortization expense, taxes, acquisition and integration expenses, 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.
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 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 |
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Consolidated Statements of Income |
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(unaudited - in thousands, except per share data) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
March 31, |
March 31, |
% |
March 31, |
March 31, |
% |
|||||||||||||||||||||||||||||
Revenue | $ | 4,790,910 | $ | 5,040,022 | 5.2 % | $ | 9,701,742 | $ | 10,077,517 | 3.9 % | ||||||||||||||||||||||||
Cost of revenue | 4,649,638 | 4,844,660 | 4.2 % | 9,424,318 | 9,711,542 | 3.0 % | ||||||||||||||||||||||||||||
Gross profit | 141,272 | 195,362 | 38.3 % | 277,424 | 365,975 | 31.9 % | ||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 13,038 | 25,963 | 99.1 % | 42,758 | 38,467 | (10.0)% | ||||||||||||||||||||||||||||
General and administrative expenses | (30,217 | ) | (37,426 | ) | 23.9 % | (64,887 | ) | (73,333 | ) | 13.0 % | ||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | (168,178 | ) | - | (100.0)% | (168,178 | ) | - | (100.0)% | ||||||||||||||||||||||||||
Restructuring costs | - | (15,875 | ) | NM | - | (79,170 | ) | NM | ||||||||||||||||||||||||||
(Loss) income from operations | (44,085 | ) | 168,024 | NM | 87,117 | 251,939 | 189.2 % | |||||||||||||||||||||||||||
Other income | 12,507 | 4,266 | (65.9)% | 14,790 | 7,863 | (46.8)% | ||||||||||||||||||||||||||||
Interest expense | (100,577 | ) | (57,828 | ) | (42.5)% | (156,742 | ) | (113,854 | ) | (27.4)% | ||||||||||||||||||||||||
(Loss) income before income tax (benefit) expense | (132,155 | ) | 114,462 | NM | (54,835 | ) | 145,948 | NM | ||||||||||||||||||||||||||
Income tax (benefit) expense | (24,400 | ) | 20,943 | NM | (71,493 | ) | (12,657 | ) | (82.3)% | |||||||||||||||||||||||||
Net (loss) income | (107,755 | ) | 93,519 | NM | 16,658 | 158,605 | 852.1 % | |||||||||||||||||||||||||||
Noncontrolling interests in income of |
(11,978 | ) | (15,674 | ) | 30.9 % | (25,077 | ) | (29,241 | ) | 16.6 % | ||||||||||||||||||||||||
Net (loss) income attributable to AECOM | $ | (119,733 | ) | $ | 77,845 | NM | $ | (8,419 | ) | $ | 129,364 | NM | ||||||||||||||||||||||
Net (loss) income attributable to AECOM per share: |
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Basic | $ | (0.75 | ) | $ | 0.50 | NM | $ | (0.05 | ) | $ | 0.83 | NM | ||||||||||||||||||||||
Diluted | $ | (0.75 | ) | $ | 0.49 | NM | $ | (0.05 | ) | $ | 0.81 | NM | ||||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||||
Basic | 159,495 | 156,621 | (1.8)% | 158,702 | 156,519 | (1.4)% | ||||||||||||||||||||||||||||
Diluted | 159,495 | 158,416 | (0.7)% | 158,702 | 159,010 | 0.2 % | ||||||||||||||||||||||||||||
NM — not meaningful |
Balance Sheet Information |
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(unaudited - in thousands) |
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September 30, 2018 | March 31, 2019 | ||||||||||
Balance Sheet Information: | |||||||||||
Total cash and cash equivalents | $ | 886,733 | $ | 826,878 | |||||||
Accounts receivable and contract assets – net | 5,468,821 | 5,712,831 | |||||||||
Working capital | 997,645 | 1,350,453 | |||||||||
Total debt, excluding unamortized debt issuance costs | 3,673,463 | 3,933,872 | |||||||||
Total assets | 14,681,131 | 14,737,023 | |||||||||
Total AECOM stockholders’ equity | 4,092,780 | 4,199,936 | |||||||||
AECOM | |||||||||||||||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||||||||||||||
(unaudited - in thousands) | |||||||||||||||||||||||||||||||||||||
|
Design & Consulting Services |
Construction Services |
Management Services |
AECOM Capital |
Corporate | Total | |||||||||||||||||||||||||||||||
Three Months Ended March 31, 2019 | |||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,100,797 | $ | 1,917,801 | $ | 1,019,937 | $ | 1,487 | $ | - | $ | 5,040,022 | |||||||||||||||||||||||||
Cost of revenue | 1,971,017 | 1,901,099 | 972,544 | - | - | 4,844,660 | |||||||||||||||||||||||||||||||
Gross profit | 129,780 | 16,702 | 47,393 | 1,487 | - | 195,362 | |||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 5,509 | 6,810 | 3,923 | 9,721 | - | 25,963 | |||||||||||||||||||||||||||||||
General and administrative expenses | - | - | - | (1,681 | ) | (35,745 | ) | (37,426 | ) | ||||||||||||||||||||||||||||
Restructuring costs | - | - | - | - | (15,875 | ) | (15,875 | ) | |||||||||||||||||||||||||||||
Income (loss) from operations | $ | 135,289 | $ | 23,512 | $ | 51,316 | $ | 9,527 | $ | (51,620 | ) | $ | 168,024 | ||||||||||||||||||||||||
Gross profit as a % of revenue | 6.2% | 0.9% | 4.6% | -- | -- | 3.9% | |||||||||||||||||||||||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,004,745 | $ | 1,888,342 | $ | 897,823 | $ | - | $ | - | $ | 4,790,910 | |||||||||||||||||||||||||
Cost of revenue | 1,884,511 | 1,901,637 | 863,490 | - | - | 4,649,638 | |||||||||||||||||||||||||||||||
Gross profit | 120,234 | (13,295 | ) | 34,333 | - | - | 141,272 | ||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 2,763 | 1,208 | 9,067 | - | - | 13,038 | |||||||||||||||||||||||||||||||
General and administrative expenses | - | - | - | (2,880 | ) | (27,337 | ) | (30,217 | ) | ||||||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | - | (168,178 | ) | - | - | - | (168,178 | ) | |||||||||||||||||||||||||||||
Income (loss) from operations | $ | 122,997 | $ | (180,265 | ) | $ | 43,400 | $ | (2,880 | ) | $ | (27,337 | ) | $ | (44,085 | ) | |||||||||||||||||||||
Gross profit as a % of revenue | 6.0% | (0.7)% | 3.8% | -- | -- | 2.9% | |||||||||||||||||||||||||||||||
Six Months Ended March 31, 2019 | |||||||||||||||||||||||||||||||||||||
Revenue | $ | 4,130,476 | $ | 3,932,303 | $ | 2,009,318 | $ | 5,420 | $ | - | $ | 10,077,517 | |||||||||||||||||||||||||
Cost of revenue | 3,885,057 | 3,912,385 | 1,914,100 | - | - | 9,711,542 | |||||||||||||||||||||||||||||||
Gross profit | 245,419 | 19,918 | 95,218 | 5,420 | - | 365,975 | |||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 9,409 | 14,633 | 7,189 | 7,236 | - | 38,467 | |||||||||||||||||||||||||||||||
General and administrative expenses | - | - | - | (3,408 | ) | (69,925 | ) | (73,333 | ) | ||||||||||||||||||||||||||||
Restructuring costs | - | - | - | - | (79,170 | ) | (79,170 | ) | |||||||||||||||||||||||||||||
Income (loss) from operations | $ | 254,828 | $ | 34,551 | $ | 102,407 | $ | 9,248 | $ | (149,095 | ) | $ | 251,939 | ||||||||||||||||||||||||
Gross profit as a % of revenue | 5.9% | 0.5% | 4.7% | - | - | 3.6% | |||||||||||||||||||||||||||||||
Contracted backlog | $ | 9,570,692 | $ | 10,520,026 | $ | 3,480,258 | $ | - | $ | - | $ | 23,570,976 | |||||||||||||||||||||||||
Awarded backlog | 6,896,030 | 12,652,887 | 15,488,265 | - | - | 35,037,182 | |||||||||||||||||||||||||||||||
Unconsolidated JV backlog | - | 1,611,494 | 794,126 | - | - | 2,405,620 | |||||||||||||||||||||||||||||||
Total backlog | $ | 16,466,722 | $ | 24,784,407 | $ | 19,762,649 | $ | - | $ | - | $ | 61,013,778 | |||||||||||||||||||||||||
Six Months Ended March 31, 2018 | |||||||||||||||||||||||||||||||||||||
Revenue | $ | 3,946,645 | $ | 4,013,829 | $ | 1,741,268 | $ | - | $ | - | $ | 9,701,742 | |||||||||||||||||||||||||
Cost of revenue | 3,748,565 | 4,000,045 | 1,675,708 | - | - | 9,424,318 | |||||||||||||||||||||||||||||||
Gross profit | 198,080 | 13,784 | 65,560 | - | - | 277,424 | |||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 10,225 | 14,614 | 17,919 | - | - | 42,758 | |||||||||||||||||||||||||||||||
General and administrative expenses | - | - | - | (5,487 | ) | (59,400 | ) | (64,887 | ) | ||||||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | - | (168,178 | ) | - | - | - | (168,178 | ) | |||||||||||||||||||||||||||||
Income (loss) from operations | $ | 208,305 | $ | (139,780 | ) | $ | 83,479 | $ | (5,487 | ) | $ | (59,400 | ) | $ | 87,117 | ||||||||||||||||||||||
Gross profit as a % of revenue | 5.0% | 0.3% | 3.8% | -- | -- | 2.9% | |||||||||||||||||||||||||||||||
Contracted backlog | $ | 9,238,472 | $ | 10,981,745 | $ | 2,715,448 | $ | - | $ | - | $ | 22,935,665 | |||||||||||||||||||||||||
Awarded backlog | 7,935,382 | 5,719,996 | 10,218,800 | - | - | 23,874,178 | |||||||||||||||||||||||||||||||
Unconsolidated JV backlog | - | 2,267,647 | 858,389 | - | - | 3,126,036 | |||||||||||||||||||||||||||||||
Total backlog | $ | 17,173,854 | $ | 18,969,388 | $ | 13,792,637 | $ | - | $ | - | $ | 49,935,879 |
AECOM |
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Regulation G Information |
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($ in millions) |
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Reconciliation of Net Income Attributable to AECOM to EBITDA and to Adjusted EBITDA |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
Mar 31, |
Dec 31, |
Mar 31, |
Mar 31, |
Mar 31, |
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Net (loss) income attributable to AECOM | $ | (119.7 | ) | $ | 51.5 | $ | 77.9 | $ | (8.4 | ) | $ | 129.4 | ||||||||||||||||||
Income tax (benefit) expense | (24.4 | ) | (33.6 | ) | 20.9 | (71.5 | ) | (12.7 | ) | |||||||||||||||||||||
(Loss) income attributable to AECOM before income taxes | (144.1 | ) | 17.9 | 98.8 | (79.9 | ) | 116.7 | |||||||||||||||||||||||
Depreciation and amortization expense1 | 81.0 | 64.3 | 66.4 | 144.5 | 130.7 | |||||||||||||||||||||||||
Interest income2 | (3.4 | ) | (2.7 | ) | (3.0 | ) | (5.2 | ) | (5.7 | ) | ||||||||||||||||||||
Interest expense3 | 90.9 | 53.5 | 55.4 | 144.2 | 108.9 | |||||||||||||||||||||||||
EBITDA | $ | 24.4 | $ | 133.0 | $ | 217.6 | $ | 203.6 | $ | 350.6 | ||||||||||||||||||||
Transaction-related expenses | - | - | 4.4 | - | 4.4 | |||||||||||||||||||||||||
Non-core operating losses | 21.2 | 15.0 | 1.1 | 21.2 | 16.1 | |||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | |||||||||||||||||||||||||
Acquisition and integration-related items | - | (3.9 | ) | (3.7 | ) | - | (7.6 | ) | ||||||||||||||||||||||
Restructuring costs | - | 63.3 | 15.9 | - | 79.2 | |||||||||||||||||||||||||
FX gain from forward currency contract | (9.1 | ) | - | - | (9.1 | ) | - | |||||||||||||||||||||||
Depreciation expense included in non-core |
(3.8 | ) | (0.2 | ) | (0.2 | ) | (3.8 | ) | (0.4 | ) | ||||||||||||||||||||
Adjusted EBITDA | $ | 200.9 | $ | 207.2 | $ | 235.1 | $ | 380.1 | $ | 442.3 |
__________________________ |
|
1 Includes the amount for noncontrolling interests in consolidated subsidiaries; 2 Included in other income; 3 Excludes related amortization | |
Fiscal Years Ended Sep 30, | ||||||||||||||||||
2016 | 2017 | 2018 | ||||||||||||||||
Net income attributable to AECOM | $ | 96.1 | $ | 339.4 | $ | 136.5 | ||||||||||||
Income tax (benefit) expense | (37.9 | ) | 7.7 | (19.6 | ) | |||||||||||||
Income attributable to AECOM before income taxes | 58.2 | 347.1 | 116.9 | |||||||||||||||
Depreciation and amortization expense1 | 414.5 | 280.0 | 281.0 | |||||||||||||||
Interest income2 | (4.3 | ) | (5.5 | ) | (9.6 | ) | ||||||||||||
Interest expense3 | 225.8 | 212.4 | 249.4 | |||||||||||||||
EBITDA | $ | 694.2 | $ | 834.0 | $ | 637.7 | ||||||||||||
Non-core operating losses | 36.9 | 9.4 | 57.4 | |||||||||||||||
Impairment of assets held for sale, including goodwill | - | - | 168.2 | |||||||||||||||
Acquisition and integration-related items | 213.6 | 38.7 | (10.9 | ) | ||||||||||||||
Loss (gain) on disposal activity | 42.6 | (0.6 | ) | 2.9 | ||||||||||||||
FX gain from forward currency contract | - | - | (9.1 | ) | ||||||||||||||
Depreciation expense included in non-core |
(28.8 | ) | (0.8 | ) | (9.7 | ) | ||||||||||||
Adjusted EBITDA | $ | 958.5 | $ | 880.7 | $ | 836.5 |
____________________________ |
|
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: | ||||||||||||||||||||
Mar 31, 2018 | Dec 31, 2018 | Mar 31, 2019 | ||||||||||||||||||
Short-term debt | $ 9.8 | $ 46.1 | $ | 48.4 | ||||||||||||||||
Current portion of long-term debt | 123.9 | 114.7 | 109.9 | |||||||||||||||||
Long-term debt, gross | 3,865.4 | 3,803.7 | 3,775.6 | |||||||||||||||||
Total debt excluding unamortized debt issuance costs | 3,999.1 | 3,964.5 | 3,933.9 | |||||||||||||||||
Less: Total cash and cash equivalents | 867.2 | 838.3 | 826.9 | |||||||||||||||||
Net debt | $ 3,131.9 | $ 3,126.2 | $ | 3,107.0 | ||||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, |
Dec 31, |
Mar 31, |
||||||||||||||||||
Net cash provided by (used in) operating activities | $ 118.4 | $ (200.4 | ) | $ 107.4 | ||||||||||||||||
Capital expenditures, net | (23.7 | ) | (21.9 | ) | (22.5 | ) | ||||||||||||||
Free cash flow | $ 94.7 | $ (222.3 | ) | $ 84.9 |
Fiscal Years Ended Sep 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 764.4 | $ | 814.2 | $ | 696.7 | $ | 774.6 | ||||||||||||||||||||||||||||||||||||||
Capital expenditures, net | (69.4 | ) | (136.8 | ) | (78.5 | ) | (86.9 | ) | ||||||||||||||||||||||||||||||||||||||
Free cash flow | $ | 695.0 | $ | 677.4 | $ | 618.2 | $ | 687.7 |
AECOM |
||||||||||||||||||||||||||||||
Regulation G Information |
||||||||||||||||||||||||||||||
($ in millions) |
||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
Mar 31, 2018 |
Dec 31, 2018 |
Mar 31, 2019 |
Mar 31, 2018 |
Mar 31, 2019 |
||||||||||||||||||||||||||
Reconciliation of Income from Operations to Adjusted Income from Operations |
||||||||||||||||||||||||||||||
(Loss) income from operations | $ | (44.1 | ) | $ | 83.9 | $ | 168.0 | $ | 87.1 | $ | 251.9 | |||||||||||||||||||
Transaction-related expense | - | - | 4.4 | - | 4.4 | |||||||||||||||||||||||||
Non-core operating losses | 21.2 | 15.0 | 1.1 | 21.2 | 16.1 | |||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | |||||||||||||||||||||||||
Acquisition and integration-related items | - | (4.3 | ) | (4.1 | ) | - | (8.4 | ) | ||||||||||||||||||||||
Restructuring costs | - | 63.3 | 15.9 | - | 79.2 | |||||||||||||||||||||||||
Amortization of intangible assets | 33.7 | 25.7 | 25.8 | 60.6 | 51.5 | |||||||||||||||||||||||||
Adjusted income from operations | $ | 179.0 | $ | 183.6 | $ | 211.1 | $ | 337.1 | $ | 394.7 | ||||||||||||||||||||
Reconciliation of Income Before Income Taxes to Adjusted Income Before Income Taxes |
||||||||||||||||||||||||||||||
(Loss) income before income tax (benefit) expense | $ | (132.1 | ) | $ | 31.5 | $ | 114.4 | $ | (54.8 | ) | $ | 145.9 | ||||||||||||||||||
Transaction-related expenses | - | - | 4.4 | - | 4.4 | |||||||||||||||||||||||||
Non-core operating losses | 21.2 | 15.0 | 1.1 | 21.2 | 16.1 | |||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | |||||||||||||||||||||||||
Acquisition and integration-related items | - | (4.3 | ) | (4.1 | ) | - | (8.4 | ) | ||||||||||||||||||||||
Restructuring costs | - | 63.3 | 15.9 | - | 79.2 | |||||||||||||||||||||||||
Amortization of intangible assets | 33.7 | 25.7 | 25.8 | 60.6 | 51.5 | |||||||||||||||||||||||||
FX gain from forward currency contract | (9.1 | ) | - | - | (9.1 | ) | - | |||||||||||||||||||||||
Financing charges in interest expense | 44.2 | 2.4 | 2.4 | 47.1 | 4.8 | |||||||||||||||||||||||||
Adjusted income before adjusted income tax expense | $ | 126.1 | $ | 133.6 | $ | 159.9 | $ | 233.2 | $ | 293.5 | ||||||||||||||||||||
Reconciliation of Income Taxes to Adjusted Income Taxes |
||||||||||||||||||||||||||||||
Income tax (benefit) expense | $ | (24.4 | ) | $ | (33.6 | ) | $ | 20.9 | $ | (71.5 | ) | $ | (12.7 | ) | ||||||||||||||||
Tax effect of the above adjustments* | 26.6 | 28.5 | 13.0 | 32.0 | 41.5 | |||||||||||||||||||||||||
Revaluation of deferred taxes and one-time tax |
- | 1.5 | - | 41.7 | 1.5 | |||||||||||||||||||||||||
Valuation allowances and other tax only items | - | 32.1 | (1.3 | ) | - | 30.8 | ||||||||||||||||||||||||
Adjusted income tax expense | $ | 2.2 | $ | 28.5 | $ | 32.6 | $ | 2.2 | $ | 61.1 | ||||||||||||||||||||
__________________________ |
||||||||||||||||||||||||||||||
*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 | $ | (12.0 | ) | $ | (13.6 | ) | $ | (15.6 | ) | $ | (25.1 | ) | $ | (29.2 | ) | |||||||||||||||||
Acquisition and integration-related items, net of tax | - | 0.4 | 0.4 | - | 0.8 | |||||||||||||||||||||||||||
Amortization of intangible assets included in NCI, net of tax | (3.3 | ) | (3.0 | ) | (3.2 | ) | (5.8 | ) | (6.2 | ) | ||||||||||||||||||||||
Adjusted noncontrolling interests in income of consolidated subsidiaries, net of tax | $ | (15.3 | ) | $ | (16.2 | ) | $ | (18.4 | ) | $ | (30.9 | ) | $ | (34.6 | ) | |||||||||||||||||
|
||||||||||||||||||||||||||||||||
Reconciliation of Net Income Attributable to AECOM to Adjusted Net Income Attributable to AECOM |
||||||||||||||||||||||||||||||||
Net (loss) income attributable to AECOM | $ | (119.7 | ) | $ | 51.5 | $ | 77.9 | $ | (8.4 | ) | $ | 129.4 | ||||||||||||||||||||
Transaction-related expenses | - | - | 4.4 | - | 4.4 | |||||||||||||||||||||||||||
Non-core operating losses | 21.2 | 15.0 | 1.1 | 21.2 | 16.1 | |||||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | |||||||||||||||||||||||||||
Acquisition and integration-related items | - | (3.9 | ) | (3.7 | ) | - | (7.6 | ) | ||||||||||||||||||||||||
Restructuring costs | - | 63.3 | 15.9 | - | 79.2 | |||||||||||||||||||||||||||
Amortization of intangible assets | 33.7 | 25.7 | 25.8 | 60.6 | 51.5 | |||||||||||||||||||||||||||
FX gain from forward currency contract | (9.1 | ) | - | - | (9.1 | ) | - | |||||||||||||||||||||||||
Financing charges in interest expense | 44.2 | 2.4 | 2.4 | 47.1 | 4.8 | |||||||||||||||||||||||||||
Tax effect of the above adjustments* | (26.6 | ) | (28.5 | ) | (13.0 | ) | (32.0 | ) | (41.5 | ) | ||||||||||||||||||||||
Revaluation of deferred taxes and one-time tax |
- | (1.5 | ) | - | (41.7 | ) | (1.5 | ) | ||||||||||||||||||||||||
Valuation allowances and other tax only items | - | (32.1 | ) | 1.3 | - | (30.8 | ) | |||||||||||||||||||||||||
Amortization of intangible assets included in NCI, net of tax | (3.3 | ) | (3.0 | ) | (3.2 | ) | (5.8 | ) | (6.2 | ) | ||||||||||||||||||||||
Adjusted net income attributable to AECOM | $ | 108.6 | $ | 88.9 | $ | 108.9 | $ | 200.1 | $ | 197.8 | ||||||||||||||||||||||
|
|
___________________________ |
*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, |
Dec 31, |
Mar 31, |
Mar 31, |
Mar 31, |
||||||||||||||||||||||||||
Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share |
||||||||||||||||||||||||||||||
Net (loss) income attributable to AECOM – per diluted share | $ | (0.75 | ) | $ | 0.32 | $ | 0.49 | $ | (0.05 | ) | $ | 0.81 | ||||||||||||||||||
Per diluted share adjustments: | ||||||||||||||||||||||||||||||
Transaction-related expenses | - | - | 0.03 | - | 0.03 | |||||||||||||||||||||||||
Non-core operating losses | 0.13 | 0.09 | 0.01 | 0.13 | 0.10 | |||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 1.04 | - | - | 1.04 | - | |||||||||||||||||||||||||
Acquisition and integration-related items | - | (0.02 | ) | (0.02 | ) | - | (0.05 | ) | ||||||||||||||||||||||
Restructuring costs | - | 0.40 | 0.10 | - | 0.50 | |||||||||||||||||||||||||
Amortization of intangible assets | 0.21 | 0.16 | 0.16 | 0.37 | 0.32 | |||||||||||||||||||||||||
FX gain from forward currency contract | (0.06 | ) | - | - | (0.06 | ) | - | |||||||||||||||||||||||
Financing charges in interest expense | 0.27 | 0.02 | 0.02 | 0.29 | 0.03 | |||||||||||||||||||||||||
Tax effect of the above adjustments* | (0.15 | ) | (0.18 | ) | (0.09 | ) | (0.19 | ) | (0.26 | ) | ||||||||||||||||||||
Revaluation of deferred taxes and one-time tax |
- | (0.01 | ) | - | (0.25 | ) | (0.01 | ) | ||||||||||||||||||||||
Valuation allowances and other tax only items | - | (0.20 | ) | 0.01 | - | (0.19 | ) | |||||||||||||||||||||||
Amortization of intangible assets included in NCI, net of tax | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||
Adjusted net income attributable to AECOM – per diluted share | $ | 0.67 | $ | 0.56 | $ | 0.69 | $ | 1.24 | $ | 1.24 | ||||||||||||||||||||
Weighted average shares outstanding – diluted | 162.2 | 159.6 | 158.4 | 162.0 | 159.6 | |||||||||||||||||||||||||
___________________________ |
||||||||||||||||||||||||||||||
*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 EBITDA to Adjusted Income from Operations |
||||||||||||||||||||||||||||||||
EBITDA1 |
$ | 24.4 | $ | 133.0 | $ | 217.6 | $ | 203.6 | $ | 350.6 | ||||||||||||||||||||||
Transaction-related expenses | - | - | 4.4 | - | 4.4 | |||||||||||||||||||||||||||
Non-core operating losses | 21.2 | 15.0 | 1.1 | 21.2 | 16.1 | |||||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | |||||||||||||||||||||||||||
Acquisition and integration-related items | - | (3.9 | ) | (3.7 | ) | - | (7.6 | ) | ||||||||||||||||||||||||
Restructuring costs | - | 63.3 | 15.9 | - | 79.2 | |||||||||||||||||||||||||||
FX gain from forward currency contract | (9.1 | ) | - | - | (9.1 | ) | - | |||||||||||||||||||||||||
Depreciation expense included in non-core |
(3.8 | ) | (0.2 | ) | (0.2 | ) | (3.8 | ) | (0.4 | ) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 200.9 | $ | 207.2 | $ | 235.1 | $ | 380.1 | $ | 442.3 | ||||||||||||||||||||||
Other income | (12.5 | ) | (3.6 | ) | (4.3 | ) | (14.8 | ) | (7.9 | ) | ||||||||||||||||||||||
FX gain from forward currency contract | 9.1 | - | - | 9.1 | - | |||||||||||||||||||||||||||
Interest income2 |
3.4 | 2.7 | 3.0 | 5.2 | 5.7 | |||||||||||||||||||||||||||
Depreciation3 |
(37.2 | ) | (38.9 | ) | (41.3 | ) | (73.4 | ) | (80.2 | ) | ||||||||||||||||||||||
Noncontrolling interests in income of consolidated subsidiaries, net of tax | 12.0 | 13.6 | 15.7 | 25.1 | 29.3 | |||||||||||||||||||||||||||
Acquisition and integration-related items included in NCI, net of tax | - | (0.4 | ) | (0.4 | ) | - | (0.8 | ) | ||||||||||||||||||||||||
Amortization of intangible assets included in NCI, net of tax | 3.3 | 3.0 | 3.3 | 5.8 | 6.3 | |||||||||||||||||||||||||||
Adjusted income from operations | $ | 179.0 | $ | 183.6 | $ | 211.1 | $ | 337.1 | $ | 394.7 | ||||||||||||||||||||||
|
|
_____________________________ |
|||||
1 |
See Reconciliation of Net Income Attributable to AECOM to EBITDA and to Adjusted EBITDA; |
2 |
Included in other income; |
3 Excludes depreciation from non-core operating losses, and acquisition and integration expenses |
AECOM | |||||||||||||||||||||||||||||||||||||
Regulation G Information | |||||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||
Mar 31, |
Dec 31, |
Mar 31, |
Mar 31, |
Mar 31, |
|||||||||||||||||||||||||||||||||
Reconciliation of Segment Income from Operations to Adjusted Income from Operations |
|||||||||||||||||||||||||||||||||||||
Design & Consulting Services Segment: | |||||||||||||||||||||||||||||||||||||
Income from operations | $ | 123.0 | $ | 119.5 | $ | 135.3 | $ | 208.3 | $ | 254.8 | |||||||||||||||||||||||||||
Non-core operating losses/(income) | 1.2 | 0.9 | (1.2 | ) | 1.2 | (0.3 | ) | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 6.2 | 6.0 | 6.1 | 12.4 | 12.1 | ||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 130.4 | $ | 126.4 | $ | 140.2 | $ | 221.9 | $ | 266.6 | |||||||||||||||||||||||||||
Construction Services Segment: | |||||||||||||||||||||||||||||||||||||
(Loss) income from operations | $ | (180.3 | ) | $ | 11.0 | $ | 23.6 | $ | (139.8 | ) | $ | 34.6 | |||||||||||||||||||||||||
Acquisition and integration-related items | - | (4.3 | ) | (4.1 | ) | - | (8.4 | ) | |||||||||||||||||||||||||||||
Transaction-related expenses | - | - | 4.4 | - | 4.4 | ||||||||||||||||||||||||||||||||
Non-core operating losses | 20.0 | 14.1 | 2.3 | 20.0 | 16.4 | ||||||||||||||||||||||||||||||||
Impairment of assets held for sale, including goodwill | 168.2 | - | - | 168.2 | - | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 17.8 | 10.2 | 10.2 | 28.6 | 20.4 | ||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 25.7 | $ | 31.0 | $ | 36.4 | $ | 77.0 | $ | 67.4 | |||||||||||||||||||||||||||
Management Services Segment: | |||||||||||||||||||||||||||||||||||||
Income from operations | $ | 43.4 | $ | 51.1 | $ | 51.3 | $ | 83.5 | $ | 102.4 | |||||||||||||||||||||||||||
Amortization of intangible assets | 9.7 | 9.5 | 9.5 | 19.6 | 19.0 | ||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 53.1 | $ | 60.6 | $ | 60.8 | $ | 103.1 | $ | 121.4 |
AECOM | |||||||||||||||
Regulation G Information |
FY19 GAAP EPS Guidance based on Adjusted EPS Guidance |
||||
|
Fiscal Year End 2019 |
|||
(all figures approximate) | ||||
GAAP EPS Guidance | $1.89 to $2.24 | |||
Adjusted EPS Excludes: | ||||
Amortization of intangible assets | $0.56 | |||
Acquisition and integration-related items | ($0.09) | |||
FY19 restructuring | $0.50 to $0.56 | |||
Financing charges in interest expense | $0.06 | |||
Year-to-date transaction-related expenses | $0.03 | |||
Year-to-date non-core operating losses | $0.10 | |||
Tax effect of the above items* | ($0.32) | |||
Tax expense associated with U.S. tax reform | ($0.18) | |||
Adjusted EPS Guidance | $2.60 to $2.90 | |||
*The adjusted tax expense differs from the GAAP tax expense based on the deductibility and tax rate applied to each of the adjustments. |
FY19 GAAP Net Income Guidance based on Adjusted EBITDA Guidance |
|||||
|
Fiscal Year End 2019 |
||||
(in millions, all figures approximate) | |||||
GAAP Net Income Attributable to AECOM Guidance* | $302 to $358 | ||||
Adjusted Net Income Attributable to AECOM Excludes: | |||||
Amortization of intangible assets, net of NCI | $89 | ||||
Acquisition and integration-related items | ($15) | ||||
FY19 restructuring | $80 to $90 | ||||
Financing charges in interest expense | $10 | ||||
Year-to-date transaction-related expenses | $4 | ||||
Year-to-date non-core operating losses | $16 | ||||
Tax effect of the above items** | ($51) | ||||
Tax expense associated with U.S. tax reform | ($29) | ||||
Adjusted Net Income Attributable to AECOM | $417 to $463 | ||||
Adjusted EBITDA Excludes: | |||||
Adjusted interest expense | $200 | ||||
Depreciation | $150 | ||||
Taxes | $150 | ||||
Adjusted EBITDA Guidance | $920 to $960 |
*Calculated based on the mid-point of AECOM’s fiscal year 2019 EPS guidance. |
**The adjusted tax expense differs from the GAAP tax expense based on the deductibility and tax rate |
applied to each of the adjustments. |
Note: the components in this table may not sum to the total due to rounding. |
FY19 GAAP Tax Rate Guidance based on Adjusted Tax Rate Guidance |
|||||
(all figures approximate) |
Fiscal Year End 2019 |
||||
GAAP Tax Rate Guidance | 13% | ||||
Tax rate impact from adjustments to GAAP earnings | 9% | ||||
Tax rate impact from inclusion of NCI deduction | 3% | ||||
Effective Tax Rate for Adjusted Earnings Guidance | 25% | ||||
FY19 GAAP Interest Expense Guidance based on Adjusted Interest Expense Guidance |
||||
Fiscal Year End 2019 |
||||
(in millions, all figures approximate) | ||||
GAAP Interest Expense Guidance | $220 | |||
Financing charges in interest expense | $10 | |||
Interest income | $10 | |||
Adjusted Interest Expense Guidance | $200 | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190508005254/en/
Source:
Investors:
Will Gabrielski
Vice President, Investor
Relations
213.593.8208
William.Gabrielski@aecom.com
Media:
Brendan Ranson-Walsh
Vice President, Global
Communications & Corporate Responsibility
213.996.2367
Brendan.Ranson-Walsh@aecom.com