AECOM reports second-quarter fiscal year 2013 results

  AECOM reports second-quarter fiscal year 2013 results

Quarter Highlights*

  *Fourth consecutive quarter of free cash flow in excess of net income.
  *Backlog of $17.1 billion with $2 billion in new wins.
  *EBITDA margin of 8.2 percent improved sequentially and year over year.
  *Company invests $65 million to repurchase 2 million shares.
  *Reported EPS of $0.53, up 23 percent.
  *Full-year targeted diluted EPS range of $2.40 to $2.50.

Business Wire

LOS ANGELES -- May 7, 2013

AECOM Technology Corporation (NYSE: ACM) reported second-quarter revenue of
$2.0 billion, and revenue, net of other direct costs^1, of $1.3 billion.
Operating income of $80 million and reported net income^2 of $54 million both
increased 10 percent, and diluted earnings per share of $0.53 were up 23
percent.

                                             
            Second Quarter                    Year-to-Date
($ in                                                Q2          Q2
millions,    Q2       Q2       YOY %     YTD      YTD      YOY %
except          FY12        FY13        Change       FY12        FY 13       Change
EPS)
Gross        2,011    1,990    (1)       4,040    4,007    (1)
Revenue
Net
Service      1,290    1,252    (3)       2,520    2,497    (1)
Revenue^1
Operating    73       80       10        150      142      (5)
Income
Net          49       54       10        97       92       (5)
Income^2
Earnings
per          0.43     0.53     23        0.85     0.88     4
Share^2
Operating    11       85       646       5        152      NM
Cash Flow
Free Cash    (2)      74       NM        (27)     128      NM
Flow^3

*All comparisons are year over year unless noted otherwise.

“During the quarter, we executed well against our long-term objectives,
including continued expansion in emerging markets and an improved mix of
higher-margin technical and construction services,” said John M. Dionisio,
AECOM chairman and chief executive officer. “We booked $2 billion in new wins,
which contributed to our $17.1 billion in backlog. We saw strength in emerging
markets — such as civil infrastructure in Asia as well as transportation and
construction services in the Middle East — and we continued to drive
improvements in our Management Support Services business, which included
actions to diversify that operation for sustained growth and profitability.
Given these results, we are reaffirming our full-year EPS guidance range of
$2.40 to $2.50.”

“This was our fourth consecutive quarter of free cash flow in excess of net
income, as our working-capital initiatives continue to improve returns, drive
long-term value and support our capital-allocation priorities,” said Michael
S. Burke, AECOM president. “We invested $65 million to repurchase 2 million
shares, which brings our year-to-date total to $238 million invested to
repurchase 10 million shares. We also made organic investments to advance our
long-term strategy, such as the first investment by our AECOM Capital fund,
which is structured to make direct investments in real estate and
public-private opportunities that can benefit from our comprehensive service
offerings.”

New Wins and Backlog

New wins of $2 billion were driven by strength in the company’s construction
and transportation end markets, particularly in North America. The company’s
book-to-burn ratio^4 was 1.0 for the quarter, maintaining total backlog at
March 31, 2013, of $17.1 billion. These metrics demonstrate the underlying
strength of AECOM’s business as clients increasingly turn to the company for
its integrated service platform and global expertise.

Tax Rate

The company’s second-quarter effective tax rate of 20.6 percent, inclusive of
non-controlling interest deduction, reflects the impact in the quarter of the
reenactment of research and design tax credits in the U.S. The company expects
its full-year effective tax rate to be 27 percent.

Cash Flow

Cash flow from operations for the quarter was $85 million. Free cash flow,
which includes capital expenditures of $12 million, totaled $74 million. Days
sales outstanding (DSOs) improved by 7 days to 91 in the quarter. The company
reconfirmed that it is well positioned to meet its fiscal 2013 target of
generating free cash flow equal to or in excess of its net income.

Balance Sheet

As of March 31, 2013, AECOM had $628 million of total cash and cash
equivalents, $1.3 billion of debt and $1.05 billion in committed bank
facilities with $717 million in unused capacity.

Business Segments

In addition to providing consolidated financial results, AECOM reports
separate financial information for its two segments: Professional Technical
Services (PTS) and Management Support Services (MSS).

Professional Technical Services

The PTS segment delivers planning, consulting, architecture and engineering
design, as well as program and construction management services to
institutional, commercial and public sector clients worldwide.

Revenue of $1.77 billion declined 2 percent, and revenue, net of other direct
costs, declined 5 percent to $1.11billion, as declines in Australia and the
Americas were only partially offset by growth in Asia. Profitability increased
6 percent aided by broad-based improvements in operating leverage and
efficiencies.

Management Support Services

The MSS segment provides program and facilities management and maintenance,
training, logistics, consulting, technical assistance and systems integration
services, primarily for agencies of the U.S. government.

Revenue increased 7 percent to $224million, and revenue, net of other direct
costs, increased 12 percent to $142million driven by growth in the Middle
East. Operating income increased over 450 percent to $11million, aided by
improved project performance and cost structure. The company continues to
expect full-year operating income, on an adjusted basis^5, to double versus
last year.

Fiscal 2013 Outlook

AECOM’s target EPS range for fiscal 2013 is $2.40 to $2.50. EPS guidance is
based on a full-year diluted share count of 103 million shares, which reflects
the impact of shares repurchased through the end of the second fiscal quarter.
The company expects its full-year effective tax rate to be 27 percent.

Five-Year Free Cash Flow Target

AECOM reaffirms its five-year free cash flow target of $1.3 billion to $1.8
billion. This target is based on a range of assumptions related to growth,
profitability and working capital requirements.

AECOM is hosting a conference call today at 11 a.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 www.aecom.com. The
webcast will be available for replay following the call.

     AECOM’s revenue includes a significant amount of pass-through costs and,
     therefore, the company believes that revenue, net of other direct costs
^1  (net service revenue), which is a non-GAAP measure, also provides a
     meaningful perspective on its business results. See the accompanying
     reconciliation of revenue, net of other direct costs, to revenue, the
     closest comparable GAAP measure.
^2   Attributable to AECOM.
     Free cash flow is defined as cash flow from operations less capital
^3   expenditures and is a non-GAAP measure. See the accompanying
     reconciliation of free cash flow from operations, the closest comparable
     GAAP measure.
^4   Book-to-burn ratio is defined as the amount of new business divided by
     gross revenue recognized during the period.
^5   Adjusted operating income excludes the impact of the goodwill impairment
     charge taken in fiscal 2012.

About AECOM

AECOM is a global provider of professional technical and management support
services to a broad range of markets, including transportation, facilities,
environmental, energy, water and government. With approximately 45,000
employees around the world, AECOM is a leader in all of the key markets that
it serves. AECOM provides a blend of global reach, local knowledge, innovation
and technical excellence in delivering solutions that create, enhance and
sustain the world's built, natural, and social environments. A Fortune 500
company, AECOM serves clients in more than 140 countries and had revenue of
$8.2billion during the 12 months ended March31, 2013. More information on
AECOM and its services can be found at www.aecom.com.

Forward-Looking Statements: 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, profit margins, cash flows, share count 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 forward-looking statements include: uncertainties
related to global economic conditions and funding, audits, modifications and
termination of long-term government contracts; 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; failure to successfully execute our merger and
acquisition strategy; the failure to retain and recruit key technical and
management personnel; and unexpected adjustments and cancellations related to
our backlog. 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
revenue, net of other direct costs, backlog, 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. This 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 the company’s
results as reported under GAAP, nor is it necessarily comparable to non-GAAP
performance measures that may be presented by other companies.

                                                                      
AECOM Technology Corporation
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,        %
                     2013                2012                Change          2013                2012                Change
                                                                                                                             
Revenue              $ 1,989,646         $ 2,010,951         (1.1  % )       $ 4,006,918         $ 4,040,131         (0.8  % )
Other direct         737,807             721,451             2.3   %         1,510,061           1,519,782           (0.6  % )
costs
Revenue, net
of other             1,251,839           1,289,500           (2.9  % )       2,496,857           2,520,349           (0.9  % )
direct costs
(non-GAAP)
Cost of
revenue, net         1,151,996           1,213,383           (5.1  % )       2,318,896           2,353,886           (1.5  % )
of other
direct costs
Gross profit         99,843              76,117              31.2  %         177,961             166,463             6.9   %
                                                                                                                             
Equity in
earnings of          7,846               16,898              (53.6 % )       13,761              25,860              (46.8 % )
joint ventures
General and
administrative       (27,253     )       (19,857     )       37.2  %         (49,355     )       (42,468     )       16.2  %
expenses
Income from          80,436              73,158              9.9   %         142,367             149,855             (5.0  % )
operations
                                                                                                                             
Other income         156                 4,852               (96.8 % )       827                 7,121               (88.4 % )
Interest             (11,855     )       (11,585     )       2.3   %         (22,776     )       (22,549     )       1.0   %
expense
Income before
income tax           68,737              66,425              3.5   %         120,418             134,427             (10.4 % )
expense
                                                                                                                             
Income tax           13,961              16,769              (16.7 % )       26,664              36,347              (26.6 % )
expense
Net income           54,776              49,656              10.3  %         93,754              98,080              (4.4  % )
Noncontrolling
interests in
income of            (965        )       (662        )       45.8  %         (1,834      )       (1,155      )       58.8  %
consolidated
subsidiaries,
net of tax
Net income
attributable         $ 53,811            $ 48,994            9.8   %         $ 91,920            $ 96,925            (5.2  % )
to AECOM
                                                                                                                             
Net income
attributable
to AECOM per
share:
Basic                $ 0.54              $ 0.43              25.6  %         $ 0.89              $ 0.85              4.7   %
Diluted              $ 0.53              $ 0.43              23.3  %         $ 0.88              $ 0.85              3.5   %
                                                                                                                             
Weighted
average shares
outstanding:
Basic                100,430             113,352             (11.4 % )       102,791             113,659             (9.6  % )
Diluted              101,818             114,288             (10.9 % )       103,875             114,439             (9.2  % )
                                                                                                                             

                                                                 
AECOM Technology Corporation
Balance Sheet and Cash Flow Information
(unaudited - in thousands)
                                       
                    March 31,           September
                                        30,
                    2013                2012
Balance Sheet
Information:
Total cash
and cash            $ 627,732           $ 593,776
equivalents
Accounts
receivable,           2,331,265           2,395,881
net
Working               1,130,851           1,068,891
capital
Working
capital, net
of cash and           503,119             475,115
cash
equivalents
Total debt            1,291,073           1,069,732
Total assets          5,685,144           5,664,568
Total AECOM
stockholders’         2,035,979           2,169,464
equity
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                    Three Months Ended                      Six Months Ended            
                    March 31,           March 31,           March 31,         March 31,
                    2013                2012                2013              2012
Cash Flow
Information:
Net cash
provided by         $ 85,245            $ 11,424            $ 152,334         $ 4,998
operating
activities
Capital              (11,707   )        (13,921   )        (24,632 )        (32,205 )
expenditures
Free cash           $ 73,538            $ (2,497    )       $ 127,702         $ (27,207 )
flow
                                                                                        

                                                                   
AECOM Technology Corporation
Reportable Segments
(unaudited - $ in thousands)
                                                                                            
                     Professional         Management
                     Technical            Support
Reportable           Services             Services            Corporate         Total
Segments:
                                                                                            
Three Months
Ended March
31, 2013
Revenue              $  1,765,889         $ 223,757           $ —               $ 1,989,646
Other direct         655,577              82,230             —                 737,807
costs
Revenue, net
of other             1,110,312            141,527             —                 1,251,839
direct costs
(non-GAAP)
Cost of
revenue, net         1,018,148            133,848            —                 1,151,996
of other
direct costs
Gross profit         92,164               7,679               —                 99,843
Equity in
earnings of          4,174                3,672               —                 7,846
joint ventures
General and
administrative       --                   --                 (27,253   )       (27,253     )
expenses
Operating            $  96,338           $ 11,351           $ (27,253 )       $ 80,436
income
                                                                                            
Gross profit
as a % of            5.2          %       3.4         %       —                 5.0         %
revenue
Gross profit
as a % of
revenue, net         8.3          %       5.4         %       —                 8.0         %
of other
direct costs
(non-GAAP)
                                                                                            
Three Months
Ended March
31, 2012
Revenue              $  1,801,145         $ 209,806           $ —               $ 2,010,951
Other direct         638,030              83,421             —                 721,451
costs
Revenue, net
of other             1,163,115            126,385             —                 1,289,500
direct costs
(non-GAAP)
Cost of
revenue, net         1,076,674            136,709            —                 1,213,383
of other
direct costs
Gross profit         86,441               (10,324     )       —                 76,117
Equity in
earnings of          4,556                12,342              —                 16,898
joint ventures
General and
administrative       —                    —                  (19,857   )       (19,857     )
expenses
Operating            $  90,997           $ 2,018            $ (19,857 )       $ 73,158
income
                                                                                            
Gross profit
as a % of            4.8          %       (4.9      ) %       —                 3.8         %
revenue
Gross profit
as a % of
revenue, net         7.4          %       (8.2      ) %       —                 5.9         %
of other
direct costs
(non-GAAP)
                                                                                            

                                                                     
AECOM Technology Corporation
Reportable Segments
(unaudited - $ in thousands)
                                                                                               
                     Professional         Management
                     Technical            Support
Reportable           Services             Services              Corporate         Total
Segments:
                                                                                               
Six Months
Ended March
31, 2013
Revenue              $ 3,537,110          $ 469,808             $ —               $ 4,006,918
Other direct         1,333,032            177,029              —                 1,510,061
costs
Revenue, net
of other             2,204,078            292,779               —                 2,496,857
direct costs
(non-GAAP)
Cost of
revenue, net         2,042,638            276,258              —                 2,318,896
of other
direct costs
Gross profit         161,440              16,521                —                 177,961
Equity in
earnings of          9,312                4,449                 —                 13,761
joint ventures
General and
administrative       --                   --                   (49,355   )       (49,355      )
expenses
Operating            $ 170,752            $ 20,970             $ (49,355 )       $ 142,367
income
                                                                                               
Gross profit
as a % of            4.6          %       3.5           %       —                 4.4          %
revenue
Gross profit
as a % of
revenue, net         7.3          %       5.6           %       —                 7.1          %
of other
direct costs
(non-GAAP)
                                                                                               
Contracted           $ 8,358,468          $ 1,123,759           $ —               $ 9,482,227
backlog
Awarded               7,110,133           501,892             —                7,612,025
backlog
Total backlog        $ 15,468,601         $ 1,625,651          $ —               $ 17,094,252
                                                                                               
Six Months
Ended March
31, 2012
Revenue              $ 3,608,549          $ 431,582             $ —               $ 4,040,131
Other direct         1,344,566            175,216              —                 1,519,782
costs
Revenue, net
of other             2,263,983            256,366               —                 2,520,349
direct costs
(non-GAAP)
Cost of
revenue, net         2,092,781            261,105              —                 2,353,886
of other
direct costs
Gross profit         171,202              (4,739        )       —                 166,463
Equity in
earnings of          7,048                18,812                —                 25,860
joint ventures
General and
administrative       —                    —                    (42,468   )       (42,468      )
expenses
Operating            $ 178,250            $ 14,073             $ (42,468 )       $ 149,855
income
                                                                                               
Gross profit
as a % of            4.7          %       (1.1        ) %       —                 4.1          %
revenue
Gross profit
as a % of
revenue, net         7.6          %       (1.8        ) %       —                 6.6          %
of other
direct costs
(non-GAAP)
                                                                                               
Contracted           $ 7,409,504          $ 962,125             $ —               $ 8,371,629
backlog
Awarded               6,468,962           1,201,049           —                7,670,011
backlog
Total backlog        $ 13,878,466         $ 2,163,174          $ —               $ 16,041,640
                                                                                               


AECOM Technology Corporation
Regulation G Information
($ in millions)

Reconciliation of Revenue to Revenue, Net of Other Direct Costs
                Three Months Ended                           Six Months Ended
                   Mar. 31,     Dec. 31,     Mar. 31,        Mar. 31,     Mar. 31,
                   2013            2012            2012            2013            2012
Consolidated
Revenue            $ 1,989.6       $ 2,017.3       $ 2,010.9       $ 4,006.9       $ 4,040.1
Less: Other         737.7          772.3          721.4          1,510.0        1,519.8
direct costs
Revenue, net
of other           $ 1,251.9       $ 1,245.0       $ 1,289.5       $ 2,496.9       $ 2,520.3
direct costs
                                                                                   
PTS Segment
Revenue            $ 1,765.9       $ 1,771.2       $ 1,801.1       $ 3,537.1       $ 3,608.5
Less: Other         655.6          677.4          638.0          1,333.0        1,344.5
direct costs
Revenue, net
of other           $ 1,110.3       $ 1,093.8       $ 1,163.1       $ 2,204.1       $ 2,264.0
direct costs
                                                                                   
MSS Segment
Revenue            $ 223.7         $ 246.1         $ 209.8         $ 469.8         $ 431.6
Less: Other         82.1           94.9           83.4           177.0          175.3
direct costs
Revenue, net
of other           $ 141.6         $ 151.2         $ 126.4         $ 292.8         $ 256.3
direct costs

                                                                                                                            
Reconciliation of EBITDA Before Goodwill Impairment to Net Income Attributable to AECOM
               Three Months Ended
                 Mar.        Dec.        Sep. 30,     Jun.        Mar.        Dec.        Sep.        Jun.
                 31,           31,                          30,           31,           31,           30,           30,
                  2013         2012         2012          2012         2012         2011         2011         2011
EBITDA
before           $ 102.5       $ 84.7        $ 163.9        $ 129.0       $ 101.6       $ 103.0       $ 157.8       $ 136.2
goodwill
impairment
Less:
Goodwill          –            –            336.0         –            –            –            –            –
impairment
EBITDA             102.5         84.7          (172.1 )       129.0         101.6         103.0         157.8         136.2
Less:
Interest           (11.3 )       (10.4 )       (10.4  )       (12.5 )       (11.0 )       (10.4 )       (9.4  )       (10.8 )
expense*
Add:
Interest           0.5           0.4           0.4            0.4           0.4           0.4           0.5           0.4
income
Less:
Depreciation      (23.9 )      (23.9 )      (26.1  )      (26.1 )      (25.3 )      (25.5 )      (25.1 )      (28.0 )
and
amortization
Income
(loss)
attributable       67.8          50.8          (208.2 )       90.8          65.7          67.5          123.8         97.8
to AECOM
before
income taxes
Less: Income      14.0         12.7         16.7          21.4         16.7         19.6         36.4         24.0
tax expense
                                                                                                                            
Net income
(loss)           $ 53.8        $ 38.1        $ (224.9 )     $ 69.4        $ 49.0        $ 47.9        $ 87.4        $ 73.8
attributable
to AECOM
                                                                                                                            
* Excluding related amortization


Reconciliation of Total Debt to Net Debt
                      Balances at:
                         Mar. 31, 2013    Dec. 31, 2012    Mar. 31, 2012
Short-term debt          $   14.8            $   18.4            $   2.2
Current portion of           152.8               193.1               86.5
long-term debt
Long-term debt              1,123.4            1,021.7            1,172.3
Total debt                   1,291.0             1,233.2             1,261.0
Less: Total cash
and cash                    627.7              591.3              465.7
equivalents
Net debt                 $   663.3           $   641.9           $   795.3


Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
                
                   Three Months Ended
                   Mar.            Dec.            Sep.            Jun.            Mar. 31         Dec.
                   31,          31,          30,          30,          2012         31,
                   2013            2012            2012            2012                            2011
Net cash
provided by
/ (used in)        $ 85.2          $ 67.1          $ 226.4         $ 202.0         $ 11.4          $ (6.4  )
operating
activities
Capital             (11.7 )        (12.9 )        (15.1 )        (15.6 )        (13.9 )        (18.3 )
expenditures
Free cash          $ 73.5          $ 54.2          $ 211.3         $ 186.4         $ (2.5  )       $ (24.7 )
flow

                Fiscal Years Ended Sep. 30,
                    2012       2011       2010       2009       2008       2007  
Net cash
provided by        $ 433.4         $ 132.0         $ 158.6         $ 228.6         $ 169.0         $ 137.5
operating
activities
Capital              (62.9 )         (78.0 )         (68.5 )         (62.9 )         (69.1 )         (43.2 )
expenditures
Settlement
of deferred
compensation         -               90.0            -               -               -               -
plan
liability
Excess tax
benefit from
share-based
payment             -             58.0          -             -             -             -     
(associated
with DCP
termination)
Free Cash          $ 370.5        $ 202.0        $ 90.1         $ 165.7        $ 99.9         $ 94.3  
Flow

NR 13-0502

Contact:

AECOM
Media:
Paul Gennaro
SVP & Chief Communications Officer
212-973-3167
Paul.Gennaro@aecom.com
or
Investors:
Lynn Antipas Tyson
SVP, Investor Relations
646-432-8428
Lynn.Tyson@aecom.com
 
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