- Revenue increased and included double-digit organic NSR
growth in the design business
- Total design backlog increased by 10% to a new record,
driven by a continued high win rate
- Strong cash flow enabled the ongoing return of capital to
shareholders during the quarter
- Increased fiscal 2023 financial guidance to reflect
year-to-date outperformance
- On track to exceed the operational expectations built into
the long-term fiscal 2024 financial targets
AECOM (NYSE:ACM), the world’s trusted infrastructure consulting
firm, today reported third quarter fiscal 2023 results.
Third Quarter Fiscal
2023
Year-to-Date Fiscal
2023
(from Continuing Operations;
$ in millions, except EPS)
As Reported
Adjusted1
(Non-GAAP)
As Reported YoY %
Change
Adjusted YoY % Change
As Reported
Adjusted1
(Non-GAAP)
As Reported YoY %
Change
Adjusted YoY % Change
Revenue
$3,664
--
13%
--
$10,536
--
8%
--
Net Service Revenue (NSR)2
--
$1,704
--
10%
--
$4,975
--
8%
Operating Income
($105)
$220
NM
11%
$244
$622
(47%)
10%
Segment Operating Margin3
(on NSR)
--
15.2%
--
+60 bps
--
14.6%
--
+60 bps
Net Income
($126)
$132
NM
9%
$80
$379
(71%)
3%
EPS (Fully Diluted)
($0.90)
$0.94
NM
11%
$0.57
$2.70
(70%)
5%
EBITDA4
--
$247
--
9%
--
$712
--
8%
Operating Cash Flow
$279
--
36%
--
$411
--
3%
--
Free Cash Flow5
--
$265
--
45%
--
$328
--
0%
Third Quarter Fiscal 2023
Highlights
- Revenue increased 13% to $3.7 billion, the operating loss was
$105 million, the operating margin was (2.9%), the net loss was
$126 million and the diluted loss per share was $0.90.
– Results included a $241 million after-tax,
non-cash impairment related to the Company’s decision to transition
the non-core AECOM Capital business.
- Organic net service revenue2 growth in the design business was
10%, driven by growth in nearly every major geography.
- The segment adjusted1 operating margin3 expanded by 60 basis
points to 15.2%, which reflected strong execution and enabled
ongoing investments in organic growth initiatives.
- Total design backlog increased by 10%6 to a new record, driven
by a strong win rate and pipeline of opportunities.
– This performance was underpinned by the
Company’s disciplined allocation of time and capital to the
highest-returning opportunities that expand the long-term earnings
capacity of the business and enhance value creation.
- Adjusted1 EBITDA4 and adjusted1 EPS increased by 9% and 11%,
respectively. On a constant-currency basis, adjusted 1 EBITDA 4 and
adjusted1 EPS increased by 10% and 12%, respectively.
Fiscal 2023 Financial
Guidance
- AECOM increased its fiscal 2023 financial guidance.
– The Company increased its adjusted1 EBITDA4
guidance to between $950 million and $970 million and increased its
adjusted1 EPS guidance to between $3.63 and $3.73, which would
reflect 10% and 11% constant-currency growth at the mid-point of
the respective ranges.
– This increase reflects strong year-to-date
performance and momentum in the business.
– Additionally, outperformance of the
underlying business has more than offset the previous removal of an
expected $5 million to $10 million contribution to adjusted1
EBITDA4 from AECOM Capital that was contemplated in the initial
guidance.
- The Company’s guidance includes expectations for:
– Organic NSR2 growth accelerating to
approximately 8% for the full year.
– A segment adjusted1 operating margin3 of
approximately 14.6%, which would represent a 40 basis point
increase from the prior year driven by strong execution and
inclusive of ongoing investments in growth.
– An average fully diluted share count of 140
million, which reflects only shares repurchased to date, though the
Company intends to continue repurchasing stock.
– An effective adjusted tax rate of
approximately 25%.
- The Company continues to expect free cash flow5 of between $475
million and $675 million in fiscal 2023, reflecting continued
strong conversion of earnings to cash across the business.
Cash Flow, Balance Sheet and Capital
Allocation Update
- Third quarter operating cash flow was $279 million, which
contributed to year-to-date free cash flow5 of $328 million.
– This performance reflects the high earnings
quality and cash generative nature of the Professional Services
business, which is a key enabler of the Company’s returns-driven
capital allocation policy.
– Through this policy, the Company continues
to execute on its commitment to return substantially all available
cash flow to investors through share repurchases and dividends.
– The Company returned $75 million to
shareholders during the third quarter and has returned more than
$220 million to date in fiscal 2023, inclusive of the dividend
payment in July.
– In total, the Company has returned
approximately $1.7 billion of capital to shareholders through stock
repurchases and dividends since September 2020.
Long-Term Fiscal 2024 Financial
Targets
- The Company has outperformed the operational expectations built
into its long-term 2024 financial plan to date.
– This includes both organic NSR growth and
adjusted operating margins that are ahead of the assumptions
contemplated in the long-term plan.
– If foreign exchange and interest rates were
held constant with the rates contemplated in the original long-term
plan, the Company would be on track to deliver greater than $5.00
in adjusted1 EPS in fiscal 2024, which is above both the original
$4.30 target and subsequently revised $4.75 target.
- This would represent a 130% increase from fiscal 2020 adjusted1
EPS at the start of the plan.
– Adjusted1 EBITDA4 is also on track to
outperform the Company’s original plan on a constant-currency
basis.
– The Company intends to provide formal
guidance for fiscal 2024 in November.
“We are consistently delivering on our financial and strategic
commitments, which is positioning us to outperform our initial
guidance for a fourth consecutive year,” said Troy Rudd, AECOM’s
chief executive officer. “Our third quarter results included
accelerating organic NSR growth, margin expansion to a new
quarterly high, double-digit adjusted EPS growth and strong cash
flow. In addition, our backlog in the design business reached a new
high and our proposals and bids submitted continued to increase at
an even faster rate. This performance reflects the benefits of our
Think and Act Globally strategy, which is centered on
collaboration, a disciplined focus, consistent execution, and
returns-focused allocation of time and capital to our
highest-returning opportunities. With our expanding competitive
advantage, we are confident in delivering continued organic growth
and margin expansion towards our longer-term 17% segment adjusted
operating margin target, and we are well positioned to continue to
deliver long-term shareholder value.”
“Our leading technical capabilities and culture of collaboration
are combining to create an unrivaled competitive advantage at a
time when end market funding visibility is stronger than ever,
which is translating to many commercial successes that are
highlighted by our third quarter results,” said Lara Poloni,
AECOM’s president. “The three secular megatrends of continued
investments in global infrastructure, sustainability and
resilience, and long-term energy and supply chain transitions are
converging and accelerating to create a multi-decade growth cycle.
To meet this demand, we are investing in innovation and delivery
efficiencies, which allow us to expand our capacity and take full
advantage of our global scale.”
“We are on track to deliver another year of strong performance
that exceeds our initial expectations,” said Gaurav Kapoor, AECOM’s
chief financial officer. “Our focus on profitable organic growth
has resulted in a substantial increase in returns on capital and a
record quarterly segment adjusted operating margin. Cash flow
remains strong, and we continue to allocate capital based on the
highest-returning opportunities, which includes ongoing investments
in organic growth as well as the continued return of capital to
shareholders, which has been a key element of our substantial value
creation.”
Business Segments
Americas
Revenue in the third quarter was $2.8 billion. Net service
revenue2 was $1.0 billion. In the design business, revenue
increased by 11% and NSR increased by 10%.
Operating income increased by 11% over the prior year to $186
million. On an adjusted1 basis, operating income increased by 11%
to $191 million. The operating margin was 6.6% and the adjusted
operating margin on NSR2 of 18.8% reflected a 20 basis point
increase over the prior year, which was achieved while substantial
investments are being made to drive pipeline and backlog
growth.
International
Revenue in the third quarter was $834 million. Net service
revenue2 was $689 million, a 10% increase from the prior year, and
included growth in the Company’s largest and most profitable
markets.
Operating income increased by 21% over the prior year to $68
million. On an adjusted basis1, operating income increased by 21%
to $68 million. The operating margin was 8.1% and the adjusted
operating margin on NSR2 increased by 110 basis points over the
prior year to 9.9%, which reflected the Company’s continued focus
on pursuing the highest-value opportunities and reaffirms the
Company’s confidence in delivering continued margin expansion over
time.
AECOM Capital
The Company has signed a term sheet with respect to the AECOM
Capital team that has the following impacts:
- Facilitates the transition of the AECOM Capital team to a new
platform, while allowing the team to continue to support AECOM’s
existing investment vehicles and investments in a manner consistent
with their current obligations.
- Reduces and caps expected G&A costs associated with the
wind-down of activities.
The Company undertook a project-by-project review of the
existing investment portfolio, including an assessment of the
potential return on incremental cash contributions that might be
required to carry the investments on its balance sheet if current
market conditions persist. However, the Company determined that
incremental investments to these assets of a non-core business with
uncertain returns would be imprudent. As a result of this change in
strategy and the expected acceleration of these exits, the Company
incurred an after-tax, non-cash impairment of $241 million in the
third quarter. The Company anticipates receiving a return of
capital of between $50 million and $100 million in the coming years
related to realizations of its existing investments.
Balance Sheet
As of June 30, 2023, AECOM had $1.3 billion of total cash and
cash equivalents, $2.2 billion of total debt and $962 million of
net debt (total debt less cash and cash equivalents). Net leverage7
was 0.9x.
Tax Rate
The effective tax rate was 15.0% in the third quarter. On an
adjusted1 basis, the effective tax rate was 27.0%. The adjusted tax
rate was derived by re-computing the quarterly effective tax rate
on earnings from adjusted net income8. 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.
Conference Call
AECOM is hosting a conference call tomorrow at 8 a.m. Eastern
Time, during which management will make a brief presentation
focusing on the Company's results, strategy 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 certain items, such as restructuring
costs, amortization of intangible assets, non-core AECOM Capital
and other items. See Regulation G Information for a reconciliation
of non-GAAP measures to the comparable GAAP measures.
2 Revenue, less pass-through revenue; growth rates are presented
on a constant-currency basis.
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 disposals of property
and equipment.
6 On a constant-currency basis.
7 Net 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, net of total cash
and cash equivalents.
8 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.
About AECOM
AECOM (NYSE: ACM) is the world’s trusted infrastructure
consulting firm, delivering professional services throughout the
project lifecycle – from advisory, planning, design and engineering
to program and construction management. On projects spanning
transportation, buildings, water, new 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 and digital
expertise, 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 $13.1 billion in fiscal year 2022. See how we are
delivering sustainable legacies for generations to come 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, 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; limited control over operations that
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; potential high leverage and inability to
service our debt and guarantees; ability to continue payment of
dividends; exposure to political and economic risks in different
countries, including tariffs; currency exchange rate and interest
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 expected benefits and costs of
the sale of our Management Services and self-perform at-risk civil
infrastructure, power construction and oil and gas construction
businesses, including the risk that any contingent purchase price
adjustments from those transactions could be unfavorable and result
in lower aggregate cash proceeds and any future proceeds owed to us
under those transactions could be lower than we expect; 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 and adjusted EPS to
exclude the impact of certain items, such as amortization expense
and taxes to aid investors in better understanding our core
performance results. We use free cash flow to present the cash
generated from operations after capital expenditures to maintain
our business. We present net service revenue (NSR) to exclude
pass-through subcontractor costs from revenue to provide investors
with a better understanding of our operational performance. We
present 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. The
Company is unable to reconcile its non-GAAP financial guidance and
long-term financial targets due to uncertainties in these
non-operating items as well as other adjustments to net income. The
Company is unable to provide a reconciliation of its guidance for
NSR to GAAP revenue because it is unable to predict with reasonable
certainty its pass-through revenue.
AECOM Consolidated
Statements of Income (unaudited - in thousands, except per
share data)
Three Months Ended
Nine Months Ended
June 30, 2022
June 30, 2023
% Change
June 30, 2022
June 30, 2023
% Change
Revenue
$
3,241,695
$
3,663,549
13.0 %
$
9,722,069
$
10,536,076
8.4 %
Cost of revenue
3,021,145
3,413,471
13.0 %
9,091,363
9,842,916
8.3 %
Gross profit
220,550
250,078
13.4 %
630,706
693,160
9.9 %
Equity in earnings (losses) of joint
ventures
7,489
(303,503)
(4152.7)%
27,358
(286,218)
(1146.2)%
General and administrative expenses
(32,766)
(42,883)
30.9 %
(106,365)
(112,642)
5.9 %
Restructuring costs
(12,264)
(9,115)
(25.7)%
(88,927)
(50,547)
(43.2)%
Income (loss) from operations
183,009
(105,423)
(157.6)%
462,772
243,753
(47.3)%
Other income
1,541
1,797
16.6 %
4,647
6,282
35.2 %
Interest income
2,773
8,802
217.4 %
5,870
24,492
317.2 %
Interest expense
(27,416)
(38,868)
41.8 %
(76,972)
(117,940)
53.2 %
Income (loss) from continuing operations
before taxes
159,907
(133,692)
(183.6)%
396,317
156,587
(60.5)%
Income tax expense (benefit) for
continuing operations
44,517
(20,000)
(144.9)%
103,084
46,870
(54.5)%
Income (loss) from continuing
operations
115,390
(113,692)
(198.5)%
293,233
109,717
(62.6)%
Loss from discontinued operations
(3,481)
(7,607)
118.5 %
(71,534)
(49,770)
(30.4)%
Net income (loss)
111,909
(121,299)
(208.4)%
221,699
59,947
(73.0)%
Net income attributable to noncontrolling
interests from continuing operations
(8,487)
(11,829)
39.4 %
(19,535)
(29,562)
51.3 %
Net (income) loss attributable to
noncontrolling interests from discontinued operations
(1,534)
(1,573)
2.5 %
2,829
(526)
(118.6)%
Net income attributable to noncontrolling
interests
(10,021)
(13,402)
33.7 %
(16,706)
(30,088)
80.1 %
Net income (loss) attributable to AECOM
from continuing operations
106,903
(125,521)
(217.4)%
273,698
80,155
(70.7)%
Net loss attributable to AECOM from
discontinued operations
(5,015)
(9,180)
83.1 %
(68,705)
(50,296)
(26.8)%
Net income (loss) attributable to
AECOM
$
101,888
$
(134,701)
(232.2)%
$
204,993
$
29,859
(85.4)%
Net income (loss) attributable to AECOM
per share:
Basic continuing operations per share
$
0.76
$
(0.90)
(218.4)%
$
1.94
$
0.58
(70.1)%
Basic discontinued operations per
share
(0.04)
(0.07)
75.0 %
(0.49)
(0.36)
(26.5)%
Basic earnings per share
$
0.72
$
(0.97)
(234.7)%
$
1.45
$
0.22
(84.8)%
Diluted continuing operations per
share
$
0.75
$
(0.90)
(220.0)%
$
1.91
$
0.57
(70.2)%
Diluted discontinued operations per
share
(0.03)
(0.07)
133.3 %
(0.48)
(0.36)
(25.0)%
Diluted earnings per share
$
0.72
$
(0.97)
(234.7)%
$
1.43
$
0.21
(85.3)%
Weighted average shares outstanding:
Basic
140,608
138,741
(1.3)%
141,149
138,785
(1.7)%
Diluted
142,178
138,741
(2.4)%
143,147
140,339
(2.0)%
AECOM
Balance Sheet
Information
(unaudited - in
thousands)
September 30, 2022
June 30, 2023
Balance Sheet Information:
Total cash and cash equivalents
$
1,172,209
$
1,257,731
Accounts receivable and contract assets,
net
3,723,111
4,126,854
Working capital
418,639
556,967
Total debt, excluding unamortized debt
issuance costs
2,224,602
2,219,514
Total assets
11,139,315
11,426,443
Total AECOM stockholders’ equity
2,476,654
2,454,765
AECOM Reportable
Segments (unaudited - in thousands)
Americas
International
AECOM Capital
Corporate
Total
Three Months Ended June 30,
2023
Revenue
$
2,829,519
$
834,262
$
(232)
$
—
$
3,663,549
Cost of revenue
2,646,633
766,838
—
—
3,413,471
Gross profit (loss)
182,886
67,424
(232)
—
250,078
Equity in earnings (losses) of joint
ventures
3,517
234
(307,254)
—
(303,503)
General and administrative expenses
—
—
(4,010)
(38,873)
(42,883)
Restructuring costs
—
—
—
(9,115)
(9,115)
Income (loss) from operations
$
186,403
$
67,658
$
(311,496)
$
(47,988)
$
(105,423)
Gross profit as a % of revenue
6.5%
8.1%
—
—
6.8%
Three Months Ended June 30,
2022
Revenue
$
2,456,954
$
784,169
$
572
$
—
$
3,241,695
Cost of revenue
2,292,291
728,854
—
—
3,021,145
Gross profit
164,663
55,315
572
—
220,550
Equity in earnings of joint ventures
2,859
400
4,230
—
7,489
General and administrative expenses
—
—
(3,006)
(29,760)
(32,766)
Restructuring costs
—
—
—
(12,264)
(12,264)
Income from operations
$
167,522
$
55,715
$
1,796
$
(42,024)
$
183,009
Gross profit as a % of revenue
6.7%
7.1%
—
—
6.8%
Nine Months Ended June 30, 2023
Revenue
$
8,039,000
$
2,496,879
$
197
$
—
$
10,536,076
Cost of revenue
7,519,898
2,323,018
—
—
9,842,916
Gross profit
519,102
173,861
197
—
693,160
Equity in earnings (losses) of joint
ventures
9,278
8,943
(304,439)
—
(286,218)
General and administrative expenses
—
—
(9,605)
(103,037)
(112,642)
Restructuring costs
—
—
—
(50,547)
(50,547)
Income (loss) from operations
$
528,380
$
182,804
$
(313,847)
$
(153,584)
$
243,753
Gross profit as a % of revenue
6.5%
7.0%
—
—
6.6%
Contracted backlog
$
18,063,952
$
4,219,746
$
—
$
—
$
22,283,698
Awarded backlog
16,542,770
2,125,692
—
—
18,668,462
Unconsolidated JV backlog
678,424
—
—
—
678,424
Total backlog
$
35,285,146
$
6,345,438
$
—
$
—
$
41,630,584
Total backlog – Design only
$
14,918,971
$
6,345,438
$
—
$
—
$
21,264,409
Nine Months Ended June 30, 2022
Revenue
$
7,320,369
$
2,399,901
$
1,799
$
—
$
9,722,069
Cost of revenue
6,845,292
2,246,071
—
—
9,091,363
Gross profit
475,077
153,830
1,799
—
630,706
Equity in earnings of joint ventures
9,224
9,728
8,406
—
27,358
General and administrative expenses
—
—
(8,644)
(97,721)
(106,365)
Restructuring costs
—
—
—
(88,927)
(88,927)
Income from operations
$
484,301
$
163,558
$
1,561
$
(186,648)
$
462,772
Gross profit as a % of revenue
6.5%
6.4%
—
—
6.5%
Contracted backlog
$
17,902,802
$
4,110,497
$
—
$
—
$
22,013,299
Awarded backlog
17,553,997
1,286,094
—
—
18,840,091
Unconsolidated JV backlog
276,829
—
—
—
276,829
Total backlog
$
35,733,628
$
5,396,591
$
—
$
—
$
41,130,219
Total backlog – Design only
$
13,863,870
$
5,396,591
$
—
$
—
$
19,260,461
AECOM
Regulation G
Information
(in millions)
Reconciliation of Revenue to Net Service
Revenue (NSR)
Three Months Ended
Nine Months Ended
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Jun 30, 2022
Jun 30, 2023
Americas
Revenue
$
2,457.0
$
2,630.2
$
2,829.5
$
7,320.4
$
8,039.0
Less: Pass-through revenue
1,530.7
1,654.5
1,814.5
4,556.8
5,124.6
Net service revenue
$
926.3
$
975.7
$
1,015.0
$
2,763.6
$
2,914.4
International
Revenue
$
784.2
$
859.8
$
834.3
$
2,399.9
$
2,496.9
Less: Pass-through revenue
146.4
156.9
145.4
443.7
436.2
Net service revenue
$
637.8
$
702.9
$
688.9
$
1,956.2
$
2,060.7
Segment
Performance (excludes ACAP)
Revenue
$
3,241.2
$
3,490.0
$
3,663.8
$
9,720.3
$
10,535.9
Less: Pass-through revenue
1,677.1
1,811.4
1,959.9
5,000.5
5,560.8
Net service revenue
$
1,564.1
$
1,678.6
$
1,703.9
$
4,719.8
$
4,975.1
Consolidated
Revenue
$
3,241.7
$
3,490.1
$
3,663.6
$
9,722.1
$
10,536.1
Less: Pass-through revenue
1,677.1
1,811.4
1,959.9
5,000.5
5,560.8
Net service revenue
$
1,564.6
$
1,678.7
$
1,703.7
$
4,721.6
$
4,975.3
Reconciliation of
Total Debt to Net Debt
Balances at:
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Short-term debt
$ 2.3
$ 4.7
$ 3.9
Current portion of long-term debt
42.3
52.3
53.0
Long-term debt, excluding unamortized debt
issuance costs
2,182.8
2,169.1
2,162.6
Total debt
2,227.4
2,226.1
2,219.5
Less: Total cash and cash equivalents
1,010.7
1,073.5
1,257.7
Net debt
$ 1,216.7
$ 1,152.6
$ 961.8
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow
Three Months Ended
Nine Months Ended
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Jun 30, 2022
Jun 30, 2023
Net cash provided by operating
activities
$
204.9
$
11.5
$
279.3
$
398.1
$
410.8
Capital expenditures, net
(22.0)
(32.3)
(14.4)
(69.9)
(83.0)
Free cash flow
$
182.9
$
(20.8)
$
264.9
$
328.2
$
327.8
AECOM
Regulation G
Information
(in millions, except per share
data)
Three Months Ended
Nine Months Ended
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Jun 30, 2022
Jun 30, 2023
Reconciliation of
Income from Operations to Adjusted Income from
Operations
Income (loss) from operations
$
183.0
$
197.5
$
(105.4)
$
462.8
$
243.8
Noncore AECOM Capital (income) loss
(1.8)
5.6
311.5
(1.6)
313.9
Restructuring costs
12.3
3.9
9.1
89.0
50.5
Amortization of intangible assets
4.7
4.6
4.6
14.2
13.9
Adjusted income from operations
$
198.2
$
211.6
$
219.8
$
564.4
$
622.1
Reconciliation of
Income from Continuing Operations Before Taxes to
Adjusted Income from Continuing Operations
Before Taxes
Income (loss) from continuing operations
before taxes
$
159.9
$
167.4
$
(133.7)
$
396.3
$
156.6
Noncore AECOM Capital (income) loss
(1.8)
5.6
311.5
(1.6)
313.9
Restructuring costs
12.3
3.9
9.1
89.0
50.5
Amortization of intangible assets
4.7
4.6
4.6
14.2
13.9
Financing charges in interest expense
1.2
1.2
1.2
3.6
3.6
Adjusted income from continuing operations
before taxes
$
176.3
$
182.7
$
192.7
$
501.5
$
538.5
Reconciliation of
Income Taxes for Continuing Operations to Adjusted Income Taxes for Continuing
Operations
Income tax expense (benefit) for
continuing operations
$
44.5
$
41.1
$
(20.0)
$
103.1
$
46.9
Tax effect of the above adjustments*
4.0
4.3
90.2
17.5
103.9
Valuation allowances and other tax only
items
(1.6)
0.6
(21.4)
(7.3)
(20.8)
Adjusted income tax
expense for continuing operations
$
46.9
$
46.0
$
48.8
$
113.3
$
130.0
* Adjusts income taxes during the
period to exclude the impact on our effective tax rate of the
pre-tax adjustments shown above
Reconciliation of
Net Income Attributable to Noncontrolling Interests (NCI) from
Continuing Operations to Adjusted Net Income Attributable to
Noncontrolling Interests from Continuing Operations
Net income attributable to noncontrolling
interests from continuing operations
$
(8.5)
$
(8.1)
$
(11.8)
$
(19.5)
$
(29.5)
Amortization of intangible assets included
in NCI, net of tax
(0.1)
(0.1)
(0.1)
(0.4)
(0.4)
Adjusted net income attributable to
noncontrolling interests from continuing operations
$
(8.6)
$
(8.2)
$
(11.9)
$
(19.9)
$
(29.9)
Reconciliation of
Net Income Attributable to AECOM from Continuing Operations to
Adjusted Net Income Attributable to AECOM from Continuing
Operations
Net income (loss) attributable to AECOM
from continuing operations
$
106.9
$
118.2
$
(125.5)
$
273.7
$
80.2
Noncore AECOM Capital (income) loss
(1.8)
5.6
311.5
(1.6)
313.9
Restructuring costs
12.3
3.9
9.1
89.0
50.5
Amortization of intangible assets
4.7
4.6
4.6
14.2
13.9
Financing charges in interest expense
1.2
1.2
1.2
3.6
3.6
Tax effect of the above adjustments(1)
(4.0)
(4.3)
(90.2)
(17.5)
(103.9)
Valuation allowances and other tax only
items
1.6
(0.6)
21.4
7.3
20.8
Amortization of intangible assets included
in NCI, net of tax
(0.1)
(0.1)
(0.1)
(0.4)
(0.4)
Adjusted net income
attributable to AECOM from continuing operations
$
120.8
$
128.5
$
132.0
$
368.3
$
378.6
(1) Adjusts income taxes 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
Nine Months Ended
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Jun 30, 2022
Jun 30, 2023
Reconciliation of
Net Income Attributable to AECOM from Continuing Operations per
Diluted Share to Adjusted Net Income Attributable to AECOM from
Continuing Operations per Diluted Share
Net income (loss) attributable to AECOM
from continuing operations – per diluted share(2)
$
0.75
$
0.84
$
(0.90)
$
1.91
$
0.57
Per diluted share adjustments:
Noncore AECOM Capital (income) loss
(0.01)
0.04
2.22
(0.01)
2.24
Restructuring costs
0.09
0.03
0.06
0.62
0.36
Amortization of intangible assets
0.03
0.03
0.03
0.10
0.10
Financing charges in interest expense
0.01
0.01
0.01
0.03
0.03
Tax effect of the above adjustments(1)
(0.03)
(0.03)
(0.63)
(0.13)
(0.75)
Valuation allowances and other tax only
items
0.01
—
0.15
0.05
0.15
Adjusted net income attributable to AECOM
from continuing operations per diluted share(2)
$
0.85
$
0.92
$
0.94
$
2.57
$
2.70
Weighted average shares outstanding –
basic
140.6
138.9
138.7
141.1
138.8
Weighted average shares outstanding –
diluted
142.2
140.3
140.0
143.1
140.3
(1) Adjusts income taxes during the period
to exclude the impact on our effective tax rate of the pre-tax
adjustments shown above
(2) Q3-FY23 basic and dilutive GAAP EPS
calculations use the same share count because of the net loss and
to avoid any antidilutive effect; however, the adjusted EPS
includes the 1.3 million dilutive shares excluded in the GAAP
EPS
Reconciliation of
Net Income Attributable to AECOM from Continuing Operations to
EBITDA to Adjusted EBITDA and to Adjusted Income from
Operations
Net income (loss) attributable to AECOM
from continuing operations
$
106.9
$
118.2
$
(125.5)
$
273.7
$
80.2
Income tax expense (benefit)
44.5
41.1
(20.0)
103.1
46.9
Depreciation and amortization
41.3
44.0
43.1
126.1
130.5
Interest income
(2.8)
(9.8)
(8.8)
(5.9)
(24.5)
Interest expense
27.4
42.4
38.9
77.0
118.0
Amortized bank fees included in interest
expense
(1.2)
(1.2)
(1.2)
(3.6)
(3.6)
EBITDA
$
216.1
$
234.7
$
(73.5)
$
570.4
$
347.5
Noncore AECOM Capital (income) loss
(1.8)
5.6
311.5
(1.6)
313.9
Restructuring costs
12.3
4.0
9.1
89.0
50.6
Adjusted EBITDA
$
226.6
$
244.3
$
247.1
$
657.8
$
712.0
Other income
(1.5)
(2.5)
(1.7)
(4.6)
(6.2)
Depreciation(3)
(35.5)
(38.4)
(37.5)
(108.6)
(113.6)
Noncontrolling interests in income of
consolidated subsidiaries, net of tax
8.5
8.1
11.8
19.5
29.5
Amortization of intangible assets included
in NCI, net of tax
0.1
0.1
0.1
0.3
0.4
Adjusted income
from operations
$
198.2
$
211.6
$
219.8
$
564.4
$
622.1
(3) Excludes depreciation from
discontinued operations
AECOM Regulation G Information
(in millions, except per share data)
Three Months Ended
Nine Months Ended
Jun 30, 2022
Mar 31, 2023
Jun 30, 2023
Jun 30, 2022
Jun 30, 2023
Reconciliation of
Segment Income from Operations to Adjusted Income from
Operations
Americas Segment:
Income from operations
$
167.5
$
178.2
$
186.4
$
484.3
$
528.4
Amortization of intangible assets
4.3
4.3
4.3
13.0
13.0
Adjusted income from operations
$
171.8
$
182.5
$
190.7
$
497.3
$
541.4
International Segment:
Income from operations
$
55.8
$
60.0
$
67.7
$
163.6
$
182.8
Amortization of intangible assets
0.3
0.3
0.3
1.1
0.9
Adjusted income from operations
$
56.1
$
60.3
$
68.0
$
164.7
$
183.7
Segment Performance (excludes ACAP and
G&A):
Income from operations
$
223.3
$
238.2
$
254.1
$
647.9
$
711.2
Amortization of intangible assets
4.6
4.6
4.6
14.1
13.9
Adjusted income from operations
$
227.9
$
242.8
$
258.7
$
662.0
$
725.1
FY2023 GAAP EPS
Guidance based on Adjusted EPS Guidance
(all figures approximate)
Fiscal Year End 2023
GAAP EPS guidance
$1.51 to $1.62
Adjusted EPS excludes:
Amortization of intangible assets
$0.13
Amortization of deferred financing
fees
$0.04
Non-core AECOM Capital, YTD Actual
$2.24
Restructuring expenses
$0.39
Tax effect of the above items
($0.68)
Adjusted EPS guidance
$3.63 to $3.73
FY2023 GAAP Net
Income Attributable to AECOM from Continuing Operations Guidance
based on Adjusted EBITDA Guidance
(in millions, all figures approximate)
Fiscal Year End 2023
GAAP net income attributable to AECOM from
continuing operations guidance*
$212 to $227
Adjusted net income attributable to AECOM
from continuing operations excludes:
Amortization of intangible assets
$18
Amortization of deferred financing
fees
$5
Non-core AECOM Capital, YTD Actual
$314
Restructuring expenses
$55
Tax effect of the above items
($96) to ($95)
Adjusted net income attributable to AECOM
from continuing operations
$508 to $523
Adjusted EBITDA excludes:
Depreciation
$152
Adjusted interest expense, net
$120
Tax expense, including tax effect of above
items
$170 to $175
Adjusted EBITDA
guidance
$950 to $970
* Calculated based on the mid-point of
AECOM’s fiscal year 2023 EPS guidance
AECOM
Regulation G
Information
FY2023 GAAP
Interest Expense Guidance based on Adjusted Interest Expense
Guidance
(in millions, all figures approximate)
Fiscal Year End 2023
GAAP interest expense guidance
$155
Finance charges in interest expense
($5)
Interest income
($30)
Adjusted net interest expense guidance
$120
FY2023 GAAP
Income Tax Guidance based on Adjusted Income Tax
Guidance
(in millions, all figures approximate)
Fiscal Year End 2023
GAAP income tax expense guidance
$74 to $80
Tax effect of adjusting items
$96 to $95
Adjusted income tax expense guidance
$170 to $175
FY2023 GAAP Income Tax Guidance based on
Adjusted Income Tax Guidance
(in millions, all figures approximate)
Fiscal Year End 2023
Operating cash flow guidance
$575 to $775
Capital expenditures, net of proceeds from
equipment disposals
($100)
Free cash flow guidance
$475 to $675
FY2023 GAAP Income from Operations as a
% of Revenue Guidance based on Segment Adjusted Operating Income as
a % of Net Service Revenue Guidance
(all figures approximate)
Fiscal Year End 2023
Income from operations as a % of
revenue
3.2%
Pass-through revenues
7.8%
Amortization of intangible assets
0.1%
AECOM Capital
2.2%
Corporate net expense
1.0%
Restructuring expenses
0.3%
Segment adjusted operating income as a %
of net service revenue
14.6%
Note: Variances in tables are due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807599491/en/
Investor Contact: Will Gabrielski Senior Vice President,
Finance, Treasurer 213.593.8208 William.Gabrielski@aecom.com
Media Contact: Brendan Ranson-Walsh Senior Vice
President, Global Communications 213.996.2367
Brendan.Ranson-Walsh@aecom.com
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