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Press release from Business Wire

AECOM reports third-quarter fiscal year 2012 financial results

<ul> <li class='bwlistitemmargb'> Strength in Asia-Pacific, Canada, civil infrastructure, and power, energy, and mining drive $2.1 billion in revenue, EPS of $0.63. </li> <li class='bwlistitemmargb'> Improved profitability and progress on working capital initiatives produce $186 million in free cash flow. </li> <li class='bwlistitemmargb'> Company reaffirms full-year EPS guidance of $2.30 to $2.45. </li> </ul> <p> </p>

Tuesday, August 07, 2012

AECOM reports third-quarter fiscal year 2012 financial results06:30 EDT Tuesday, August 07, 2012 LOS ANGELES (Business Wire) -- AECOM Technology Corporation (NYSE: ACM) reported third-quarter revenue of $2.1 billion, a 2.4% increase from the third quarter of fiscal year 2011. Third-quarter revenue, net of other direct costs1, was $1.3 billion. Operating income for the third quarter decreased 6.5% from last year to $103 million due to challenging year-over-year performance in the Management Support Services (MSS) segment. Net income attributable to the company declined 6% to $69 million and earnings per share (EPS) grew 1.6% to 63 cents.         Third Quarter   Year-to-Date ($ in millions, except EPS)   Q3 FY11   Q3 FY12   YOY %Change   Q3 YTDFY11   Q3 YTDFY12   YOY %Change Gross Revenue   $ 2,047   $ 2,095   2.4 %   $ 5,919     $ 6,135   3.6 % Net Service Revenue1   $ 1,314   $ 1,324   0.7 %   $ 3,821     $ 3,844   0.6 % Operating Income   $ 110   $ 103   (6.5 %)   $ 288     $ 253   (12.1 %) Net Income2   $ 74   $ 69   (6.0 %)   $ 188     $ 166   (11.7 %) Earnings per Share2   $ 0.62   $ 0.63   1.6 %   $ 1.59     $ 1.47   (7.5 %) Free Cash Flow3   $ 1   $ 186   NM       ($29 )   $ 159   NM         All growth comparisons that follow are year over year unless noted otherwise. “During the quarter, our organic net service revenue, on a currency-neutral basis, improved by 2% led by strength in our Asia, Australia and Canada operations with solid growth in our civil infrastructure as well as our power, energy and mining end markets,” said John M. Dionisio, AECOM chairman and chief executive officer. “In addition, we made further investments to enhance our capabilities to accelerate our growth in the future.” As of June 30, 2012, AECOM had $398 million of total cash and cash equivalents and $1.1 billion of debt, equating to AECOM's lowest net debt in seven quarters. In addition, AECOM reported $1.05 billion in committed bank facilities with $985 million in unused capacity. Cash flow from operations totaled $202 million in the quarter, while free cash flow totaled $186 million. “Our strong third-quarter free cash flow generation of $186 million exceeded our expectations and illustrates the progress we are making to improve our balance of growth, profitability and liquidity. During the quarter, we completed the balance of our initial $200 million share repurchase program and repaid $175 million in debt,” said Michael S. Burke, AECOM president. “Improved execution on our margin initiatives was evident in our sequential earnings growth, and we enter our strongest quarter of the year with good momentum.” New Wins and Backlog During the third quarter, new wins totaled $2.0 billion, while backlog at June 30, 2012, was $15.8 billion. These metrics demonstrate the underlying strength of our business as clients increasingly turn to AECOM for our integrated service platform and global expertise. 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, and program and construction management services to institutional, commercial and public sector clients worldwide. Revenue of $1.85 billion grew 4%, and revenue, net of other direct costs, declined slightly by 0.4% to $1.16 billion. Operating income increased 4.5% to $120 million reflecting the benefits of the company's operational efficiency and margin improvement initiatives. 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 declined 9.2% to $248.7 million, and revenue, net of other direct costs, increased 10.1% to $158.9 million. Operating income declined 80% to $4 million; however, on a sequential basis, operating income grew 92% consistent with the company's recovery plan for the segment. Fiscal 2012 Outlook AECOM reaffirms its EPS outlook for fiscal year 2012 of $2.30 to $2.45 and, given its current outlook, expects to be at the low end of this range. In the fourth quarter, the company expects typical seasonal improvement in its PTS segment, margin improvement across the Americas and Europe, and continued recovery in its MSS segment. On a full-year basis, the company expects free cash flow to meet or exceed next income. 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. Those wishing to dial in to the call via telephone can do so by dialing 1-800-706-7741 or 1-617-614-3471 and entering the passcode 61587083. Interested parties also 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. 1AECOM's gross revenue includes a significant amount of pass-through costs and, therefore, the company believes that revenue, net of other direct costs (net service revenue), which is a non-GAAP measure, also provides a valuable perspective on its business results. 2Attributable to AECOM. 3Q1 FY11 excludes the deferred compensation plan liability termination and related excess tax benefit effect. This is a non-GAAP measure. 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 130 countries and had revenue of $8.3 billion during the 12 months ended June 30, 2012. 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 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 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 need 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. AECOM Technology CorporationConsolidated Statements of Income(unaudited - in thousands, except per share data)     Three Months EndedNine Months EndedJune 30,June 30,%June 30,June 30,%20122011Change20122011Change   Revenue $ 2,095,138 $ 2,046,725 2 % $ 6,135,269 $ 5,919,329 4 % Other direct costs 771,736 732,599 5 % 2,291,518 2,098,027 9 % Revenue, net of other direct costs (non-GAAP) 1,323,402 1,314,126 1 % 3,843,751 3,821,302 1 % Cost of revenue, net of other direct costs 1,212,164 1,192,887 2 % 3,566,050 3,494,993 2 % Gross profit 111,238 121,239 (8 )% 277,701 326,309 (15 )%   Equity in earnings of joint ventures 12,281 12,248 0 % 38,141 31,675 20 % General and administrative expenses (20,682 ) (23,560 ) (12 )% (63,150 ) (70,430 ) (10 )% Income from operations 102,837 109,927 (6 )% 252,692 287,554 (12 )%   Other income (expense) 1,043 (1,585 ) * 7,433 2,159 244 % Interest expense, net (12,702 ) (10,452 ) 22 % (34,520 ) (30,338 ) 14 % Income from continuing operations before income tax expense 91,178 97,890 (7 )% 225,605 259,375 (13 )%   Income tax expense 21,323 23,959 (11 )% 57,670 63,701 (9 )% Net income 69,855 73,931 (6 )% 167,935 195,674 (14 )% Noncontrolling interests in income of consolidated subsidiaries, net of tax (442 ) (97 ) 356 % (1,597 ) (7,257 ) (78 )% Net income attributable to AECOM $ 69,413 $ 73,834 (6 )% $ 166,338 $ 188,417 (12 )%   Net income allocation: Preferred stock dividend $ — $ — 0 % $ — $ 2 (100 )% Net income available for common stockholders 69,413 73,834 (6 )% 166,338 188,415 (12 )% Net income attributable to AECOM $ 69,413 $ 73,834 (6 )% $ 166,338 $ 188,417 (12 )%   Net income attributable to AECOM per share: Basic $ 0.63 $ 0.63 0 % $ 1.48 $ 1.60 (8 )% Diluted $ 0.63 $ 0.62 2 % $ 1.47 $ 1.59 (8 )%   Weighted average shares outstanding: Basic 110,221 117,932 112,513 117,739 Diluted 110,819 118,907 113,233 118,767   * Not meaningful   AECOM Technology CorporationBalance Sheet and Cash Flow Information(unaudited - in thousands)       June 30,2012September 30,2011 Balance Sheet Information: Cash and cash equivalents $ 398,394 $ 456,940 Accounts receivable, net 2,483,269 2,380,181 Working capital 1,041,775 1,175,620 Working capital, net of cash and cash equivalents 643,381 718,680   Total debt 1,070,267 1,162,469 Total assets 5,863,640 5,789,328 Total AECOM stockholders' equity 2,455,750 2,339,711         Three months endedNine months endedJune 30, 2012June 30, 2011June 30, 2012June 30, 2011 Cash Flow Information: Net cash provided by / (used in) operating activities $ 201,965 $ 15,911 $ 206,963 $ (130,124 ) Net cash provided by / (used in) operating activities, excluding Q1 FY11 deferred compensation plan termination* $ 201,965 $ 15,911 $ 206,963 $ 17,876 Capital expenditures   (15,600 )   (15,176 )   (47,805 )   (47,283 ) Free cash flow (non-GAAP)* $ 186,365 $ 735 $ 159,158 $ (29,407 )   *Nine months ended June 30, 2011, amount excludes deferred compensation plan termination ($90 million) and associated excess tax benefits ($58 million).   AECOM TECHNOLOGY CORPORATIONReportable Segments(unaudited - $ in thousands)   Reportable Segments:ProfessionalTechnicalServicesManagementSupportServicesCorporateTotal   Three Months Ended June 30, 2012: Revenue $ 1,846,487 $ 248,651 $ — $ 2,095,138 Other direct costs 681,894 89,842   — 771,736 Revenue, net of other direct costs (non-GAAP) 1,164,593 158,809 — 1,323,402 Cost of revenue, net of other direct costs 1,050,438 161,726   — 1,212,164 Gross profit 114,155 (2,917 )   — 111,238 Equity in earnings of joint ventures 5,499 6,782 — 12,281 General and administrative expenses -- --   (20,682 ) (20,682 ) Operating income $ 119,654   $ 3,865   $ (20,682 ) $ 102,837   Gross profit as a % of revenue 6.2 % (1.2 ) % — 5.3 % Gross profit as a % of revenue, net of other direct costs (non-GAAP) 9.8 % (1.8 ) % — 8.4 %   Three Months Ended June 30, 2011: Revenue $ 1,772,831 $ 273,894 $ — $ 2,046,725 Other direct costs 603,050 129,549   — 732,599 Revenue, net of other direct costs (non-GAAP) 1,169,781 144,345 — 1,314,126 Cost of revenue, net of other direct costs 1,059,503 133,384   — 1,192,887 Gross profit 110,278 10,961 — 121,239 Equity in earnings of joint ventures 4,263 7,985 — 12,248 General and administrative expenses — —   (23,560 ) (23,560 ) Operating income $ 114,541   $ 18,946   $ (23,560 ) $ 109,927   Gross profit as a % of revenue 6.2 % 4.0 % — 5.9 % Gross profit as a % of revenue, net of other direct costs (non-GAAP) 9.4 % 7.6 % — 9.2 %   AECOM TECHNOLOGY CORPORATIONReportable Segments(unaudited - $ in thousands)   Reportable Segments:ProfessionalTechnicalServicesManagementSupportServicesCorporateTotal   Nine Months Ended June 30, 2012: Revenue $ 5,455,036 $ 680,233 $ — $ 6,135,269 Other direct costs 2,026,460 265,058 — 2,291,518 Revenue, net of other direct costs (non-GAAP) 3,428,576 415,175 — 3,843,751 Cost of revenue, net of other direct costs 3,143,219 422,831 — 3,566,050 Gross profit 285,357 (7,656 ) — 277,701 Equity in earnings of joint ventures 12,547 25,594 — 38,141 General and administrative expenses -- -- (63,150 ) (63,150 ) Operating income $ 297,904 $ 17,938 $ (63,150 ) $ 252,692   Gross profit as a % of revenue 5.2 % (1.1) % — 4.5 % Gross profit as a % of revenue, net of other direct costs (non-GAAP) 8.3 % (1.8) % — 7.2 %   Contracted backlog $ 7,495,374 $ 856,560 $ — $ 8,351,934 Awarded backlog   6,050,922   1,429,864   —   7,480,786 Total backlog $ 13,546,296 $ 2,286,424 $ — $ 15,832,720   Nine Months Ended June 30, 2011: Revenue $ 4,994,235 $ 925,094 $ — $ 5,919,329 Other direct costs 1,594,891 503,136 — 2,098,027 Revenue, net of other direct costs (non-GAAP) 3,399,344 421,958 — 3,821,302 Cost of revenue, net of other direct costs 3,111,774 383,219 — 3,494,993 Gross profit 287,570 38,739 — 326,309 Equity in earnings of joint ventures 10,392 21,283 — 31,675 General and administrative expenses — — (70,430 ) (70,430 ) Operating income $ 297,962 $ 60,022 $ (70,430 ) $ 287,554   Gross profit as a % of revenue 5.8 % 4.2 % — 5.5 % Gross profit as a % of revenue, net of other direct costs (non-GAAP) 8.5 % 9.2 % — 8.5 %   Contracted backlog $ 7,900,596 $ 1,145,472 $ — $ 9,046,068 Awarded backlog   5,471,906   1,518,720   —   6,990,626 Total backlog $ 13,372,502 $ 2,664,192 $ — $ 16,036,694   AECOM Technology CorporationRegulation G Information($ in millions)   Reconciliation of Revenue to Revenue, Net of Other Direct Costs     Three Months Ended   Nine Months EndedJune 30, 2012   March 31, 2012   June 30, 2011June 30, 2012   June 30, 2011Consolidated Revenue $ 2,095.2 $ 2,010.9 $ 2,046.7 $ 6,135.3 $ 5,919.3 Less: Other direct costs   771.7   721.4   732.6   2,291.5   2,098.0 Revenue, net of other direct costs $ 1,323.5 $ 1,289.5 $ 1,314.1 $ 3,843.8 $ 3,821.3   PTS Segment Revenue $ 1,846.5 $ 1,801.1 $ 1,772.8 $ 5,455.0 $ 4,994.2 Less: Other direct costs   681.9   638.0   603.0   2,026.4   1,594.9 Revenue, net of other direct costs $ 1,164.6 $ 1,163.1 $ 1,169.8 $ 3,428.6 $ 3,399.3   MSS Segment Revenue $ 248.7 $ 209.8 $ 273.9 $ 680.3 $ 925.1 Less: Other direct costs   89.8   83.4   129.6   265.1   503.1 Revenue, net of other direct costs $ 158.9 $ 126.4 $ 144.3 $ 415.2 $ 422.0   Reconciliation of Amounts Provided by Acquired Companies     Three Months Ended June 30, 2012   Nine Months Ended June 30, 2012Total   Provided byAcquiredCompanies   Excluding Effect ofAcquiredCompaniesTotal   Provided byAcquiredCompanies   Excluding Effect ofAcquiredCompaniesConsolidated Revenue, net of other direct costs $ 1,323.5 $ 5.8 $ 1,317.7 $ 3,843.8 $ 24.3 $ 3,819.5   Reconciliation of EBITDA to Net Income Attributable to AECOM     Three Months EndedJun 30,2012   Mar 31,2012   Dec 31,2011   Sep 30,2011   Jun 30,2011   Mar 31,2011   Dec 31,2010   Sep 30,2010 EBITDA $ 129.0 $ 101.6 $ 103.0 $ 157.8 $ 136.2 $ 114.3 $ 117.1 $ 125.8 Less: Interest expense* 12.1 10.6 10.0 8.9 10.4 10.0 9.9 5.3 Less: Depreciation and amortization   26.1   25.3   25.5   25.1   28.0   27.4   29.8   21.2   Income from continuing operations attributable to AECOM before income taxes 90.8 65.7 67.5 123.8 97.8 76.9 77.4 99.3 Less: Income tax expense   21.4   16.7   19.6   36.4   24.0   19.2   20.5   31.5   Net income attributable to AECOM $ 69.4 $ 49.0 $ 47.9 $ 87.4 $ 73.8 $ 57.7 $ 56.9 $ 67.8   Reconciliation of Total Debt to Net Debt     June 30, 2012   March 31, 2012   June 30, 2011 Short-term debt $ 2.9 $ 2.2 $ 19.0 Current portion of long-term debt 116.8 86.5 11.6 Long-term debt   950.6   1,172.3   1,165.4 Total debt 1,070.3 1,261.0 1,196.0 Less: Total cash and cash equivalents   398.4   465.7   381.5 Net debt $ 671.9 $ 795.3 $ 814.5   Reconciliation of Net Cash Provided by / (Used In) Operating Activities to Free Cash Flow     Three Months Ended   Nine Months EndedJune 30, 2012March 31, 2012June 30, 2011June 30, 2012June 30, 2011 Net cash provided by / (used in) operating activities $ 202.0 $ 11.5 $ 15.9 $ 207.0 $ (130.1 ) Capital expenditures (15.6 ) (13.9 ) (15.2 ) (47.8 ) (47.3 ) Settlement of deferred compensation plan liability -- -- -- -- 90.0 Excess tax benefit from share-based payment (associated with DCP termination)   --   --   --   --   58.0 Free cash flow $ 186.4 $ (2.4 ) $ 0.7 $ 159.2 $ (29.4 )   * Excluding related amortization.   NR 12-0801 AECOM Technology CorporationMedia Contact:Paul Gennaro, 212-973-3167SVP & Chief Communications OfficerPaul.Gennaro@aecom.comorInvestor Contact:Lynn Antipas Tyson, 646-432-8428SVP, Investor RelationsLynn.Tyson@aecom.com