AECOM reports third-quarter fiscal year 2015 results

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 adjusted EPS, adjusted operating income, adjusted tax rate, organic revenue, 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. We are also providing additional non-GAAP financial measures to reflect the impact of the URS acquisition. 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.


AECOM
Consolidated Statements of Income
(unaudited - in thousands, except per share data)

	Three Months Ended							Nine Months Ended
	June 30, 2014			June 30, 2015			% Change	June 30, 2014			June 30, 2015			% Change

Revenue	$	1,968,155		$	4,549,578		131.2 %	$	5,794,254		$	13,266,243		129.0 %
Cost of revenue	1,859,615			4,423,060			137.8 %	5,520,109			12,901,683			133.7 %
Gross profit	108,540			126,518			16.6 %	274,145			364,560			33.0 %

Equity in earnings of joint ventures	5,896			27,776			371.1 %	49,415			76,328			54.5 %
General and administrative expenses	(15,067		)	(24,418		)	62.1 %	(65,361		)	(88,553		)	35.5 %
Acquisition and integration expenses	(7,837		)	(88,495		)	n/m	(7,837		)	(318,557		)	n/m
Income from operations	91,532			41,381			(54.8)%	250,362			33,778			(86.5)%

Other income	1,034			10,128			879.5 %	856			11,669			n/m
Interest expense	(9,797		)	(60,220		)	514.7 %	(30,722		)	(239,581		)	679.8 %
Income (loss) before income tax expense	82,769			(8,711		)	(110.5)%	220,496			(194,134		)	(188.0)%

Income tax expense (benefit)	13,677			(8,464		)	(161.9)%	52,367			(96,424		)	(284.1)%

Net income (loss)	69,092			(247		)	(100.4)%	168,129			(97,710		)	(158.1)%

Noncontrolling interests in income of consolidated subsidiaries, net of tax	148			(16,945		)	n/m	(2,301		)	(58,191		)	n/m

Net income (loss) attributable to AECOM	$	69,240		$	(17,192	)	(124.8)%	$	165,828		$	(155,901	)	(194.0)%

Net income (loss) attributable to AECOM per share:
Basic	$	0.71		$	(0.11	)	(115.5)%	$	1.71		$	(1.05	)	(161.4)%
Diluted	$	0.70		$	(0.11	)	(115.7)%	$	1.69		$	(1.05	)	(162.1)%

Weighted average shares outstanding:
Basic	97,483			151,697			55.6 %	96,933			148,214			52.9 %
Diluted	98,956			151,697			53.3 %	98,295			148,214			50.8 %


AECOM
Balance Sheet and Cash Flow Information
(unaudited - in thousands)

	September 30, 2014			June 30, 2015
Balance Sheet Information:
Total cash and cash equivalents	$	574,188		$	605,900
Accounts receivable – net		2,654,976			4,985,309
Working capital		978,344			1,460,163
Total debt		1,003,978			4,773,058
Total assets		6,123,377			14,236,126
Total AECOM stockholders’ equity		2,186,517			3,474,924




	Three Months Ended						Nine Months Ended
	June 30, 2014			June 30, 2015			June 30, 2014			June 30, 2015
Cash Flow Information:
Net cash provided by operating activities	$	79,713		$	153,802		$	185,709		$	486,404
Capital expenditures, net		(16,411	)		(3,669	)		(49,578	)		(59,256	)
Free cash flow	$	63,302		$	150,133		$	136,131		$	427,148


AECOM
Reportable Segments
(unaudited - in thousands)

	Design & Consulting Services			Construction Services			Management Services			Corporate			Total
Three Months Ended June 30, 2015
Revenue	$	1,993,491		$	1,704,409		$	851,678		$	-		$	4,549,578
Cost of revenue		1,892,413			1,714,791			815,856			-			4,423,060
Gross profit		101,078			(10,382	)		35,822			-			126,518
Equity in earnings of joint ventures		3,035			6,413			18,328			-			27,776
General and administrative expenses		-			-			-			(24,418	)		(24,418	)
Acquisition and integration expenses		-			-			-			(88,495	)		(88,495	)
Income (loss) from operations	$	104,113		$	(3,969	)	$	54,150		$	(112,913	)	$	41,381

Gross profit as a % of revenue		5.1	%		(0.6	)%		4.2	%		-			2.8	%


Three Months Ended June 30, 2014
Revenue	$	1,339,766		$	413,578		$	214,811		$	-		$	1,968,155
Cost of revenue		1,247,074			409,174			203,367			-			1,859,615
Gross profit		92,692			4,404			11,444			-			108,540
Equity in earnings of joint ventures		1,050			1,181			3,665			-			5,896
General and administrative expenses		-			-			-			(15,067	)		(15,067	)
Acquisition and integration expenses		-			-			-			(7,837	)		(7,837	)
Income (loss) from operations	$	93,742		$	5,585		$	15,109		$	(22,904	)	$	91,532

Gross profit as a % of revenue		6.9	%		1.1	%		5.3	%		-			5.5	%


AECOM
Reportable Segments
(unaudited - in thousands)

	Design & Consulting Services			Construction Services			Management Services			Corporate			Total
Nine Months Ended June 30, 2015
Revenue	$	5,921,107		$	4,879,626		$	2,465,510		$	-		$	13,266,243
Cost of revenue		5,720,671			4,852,173			2,328,839			-			12,901,683
Gross profit		200,436			27,453			136,671			-			364,560
Equity in earnings of joint ventures		3,094			16,983			56,251			-			76,328
General and administrative expenses		-			-			-			(88,553	)		(88,553	)
Acquisition and integration expenses		-			-			-			(318,557	)		(318,557	)
Income (loss) from operations	$	203,530		$	44,436		$	192,922		$	(407,110	)	$	33,778

Gross profit as a % of revenue		3.4	%		0.6	%		5.5	%		-			2.7	%

Segment assets	$	7,232,673		$	3,182,175		$	3,186,745		$	634,532		$	14,236,125

Contracted backlog	$	8,508,279		$	9,942,134		$	4,271,229		$	-		$	22,721,642
Awarded backlog		5,414,059			7,696,625			4,586,571			-			17,697,255
Total backlog	$	13,922,338		$	17,638,759		$	8,857,800		$	-		$	40,418,897


Nine Months Ended June 30, 2014
Revenue	$	3,948,054		$	1,181,189		$	665,011		$	-		$	5,794,254
Cost of revenue		3,725,050			1,165,754			629,305			-			5,520,109
Gross profit		223,004			15,435			35,706			-			274,145
Equity in earnings of joint ventures		33,368			3,274			12,773			-			49,415
General and administrative expenses		-			-			-			(65,361	)		(65,361	)
Acquisition and integration expenses		-			-			-			(7,837	)		(7,837	)
Income (loss) from operations	$	256,372		$	18,709		$	48,479		$	(73,198	)	$	250,362

Gross profit as a % of revenue		5.6	%		1.3	%		5.4	%		-			4.7	%

Segment assets	$	4,166,640		$	833,344		$	455,134		$	298,625		$	5,753,743

Contracted backlog	$	6,253,109		$	2,442,976		$	861,415		$	-		$	9,557,500
Awarded backlog		3,728,474			5,513,650			1,687,552			-			10,929,676
Total backlog	$	9,981,583		$	7,956,626		$	2,548,967		$	-		$	20,487,176


AECOM
Regulation G Information
($ in millions)

Reconciliation of Amounts Provided by Acquired Companies

	Three Months Ended June 30, 2015						Nine Months Ended June 30, 2015
	Total		Provided by Acquired Companies		Excluding Effect of Acquired Companies		Total		Provided by Acquired Companies		Excluding Effect of Acquired Companies

Revenue
AECOM Consolidated	$	4,549.6	$	2,509.0	$	2,040.6	$	13,266.2	$	7,256.7	$	6,009.5
Design & Consulting Services		1,993.5		777.0		1,216.5		5,921.1		2,216.8		3,704.3
Construction Services		1,704.4		1,068.2		636.2		4,879.6		3,159.1		1,720.5
Management Services		851.7		663.8		187.9		2,465.5		1,880.8		584.7


Reconciliation of EBITDA to Net Income Attributable to AECOM

	Three Months Ended
	Sep 30, 2013			Dec 31, 2013			Mar 31, 2014			Jun 30, 2014			Sep 30, 2014			Dec 31, 2014			Mar 31, 2015			Jun 30, 2015
EBITDA	$	144.5		$	111.5		$	89.0		$	115.9		$	127.2		$	116.8		$	143.4		$	167.7
Less: Interest expense ¹		(9.6	)		(9.8	)		(10.0	)		(9.2	)		(9.5	)		(115.4	)		(56.7	)		(56.2	)
Add: Interest income ²		0.4			0.4			0.3			0.6			0.9			1.6			1.2			1.0
Less: Depreciation and amortization ³		(23.0	)		(22.2	)		(23.9	)		(24.4	)		(24.9	)		(154.2	)		(163.4	)		(138.1	)

Income (loss) attributable to AECOM before income taxes		112.3			79.9			55.4			82.9			93.7			(151.2	)		(75.5	)		(25.6	)
Less: Income tax expense (benefit)		35.8			23.5			15.2			13.7			29.6			(12.2	)		(75.8	)		(8.4	)

Net income (loss) attributable to AECOM	$	76.5		$	56.4		$	40.2		$	69.2		$	64.1		$	(139.0	)	$	0.3		$	(17.2	)

_________________________

¹ Excludes related amortization ² Included in other income ³ Includes the amount for noncontrolling interests in consolidated subsidiaries

Reconciliation of Total Debt to Net Debt
	Balances at:
	Jun 30, 2014		Mar 31, 2015		Jun 30, 2015
Short-term debt	$	27.9	$	11.7	$	8.2
Current portion of long-term debt		38.5		164.6		162.4
Long-term debt		977.0		4,691.6		4,602.5
Total debt		1,043.4		4,867.9		4,773.1
Less: Total cash and cash equivalents		510.1		612.6		605.9
Net debt	$	533.3	$	4,255.3	$	4,167.2

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

	Three Months Ended									Nine Months Ended
	Jun 30, 2014			Mar 31, 2015			Jun 30, 2015			Jun 30, 2014			Jun 30, 2015
Net cash provided by operating activities	$	79.70		$	50.00		$	153.80		$	185.70		$	486.40
Capital expenditures, net		(16.4	)		(30.6	)		(3.7	)		(49.6	)		(59.3	)
Free cash flow	$	63.30		$	19.40		$	150.10		$	136.10		$	427.10

	Fiscal Years Ended Sep 30,
	2012			2013			2014
Net cash provided by operating activities	$	433.40		$	408.60		$	360.60
Capital expenditures, net		(62.9	)		(52.1	)		(62.8	)
Free cash flow	$	370.50		$	356.50		$	297.80


AECOM
Regulation G Information
(in millions, except per share data)

Reconciliation of reported amounts to adjusted amounts excluding acquisition and integration expenses, amortization of intangible assets and financing charges in interest expense



	Three Months Ended									Nine Months Ended
	Jun 30, 2014			Mar 31, 2015			Jun 30, 2015			Jun 30, 2014			Jun 30, 2015

Income from operations	$	91.6		$	6.5		$	41.3		$	250.4		$	33.6
Acquisition and integration expenses		7.8			91.6			88.5			7.8			318.6
Amortization of intangible assets		5.9			111.7			94.1			17.4			320.0
Adjusted income from operations	$	105.3		$	209.8		$	223.9		$	275.6		$	672.2

Income (loss) before income tax expense	$	82.8		$	(55.2	)	$	(8.7	)	$	220.5		$	(194.2	)
Acquisition and integration expenses		7.8			91.6			88.5			7.8			318.6
Amortization of intangible assets		5.9			111.7			94.1			17.4			320.0
Financing charges in interest expense		-			4.0			3.9			-			75.9
Adjusted income before income tax expense	$	96.5		$	152.1		$	177.8		$	245.7		$	520.3

Income tax expense (benefit)	$	13.8		$	(75.8	)	$	(8.5	)	$	52.5		$	(96.5	)
Tax effect of the above adjustments		4.0			112.7			50.3			7.3			221.9
Adjusted income tax expense	$	17.8		$	36.9		$	41.8		$	59.8		$	125.4

Noncontrolling interests in income of consolidated
subsidiaries, net of tax	$	0.2		$	(20.4	)	$	(16.9	)	$	(2.2	)	$	(58.2	)
Amortization of intangible assets included in NCI,
net of tax		(0.8	)		(5.6	)		(5.6	)		(1.6	)		(18.6	)
Adjusted noncontrolling interests in income of
consolidated subsidiaries, net of tax	$	(0.6	)	$	(26.0	)	$	(22.5	)	$	(3.8	)	$	(76.8	)

Net income (loss) attributable to AECOM	$	69.2		$	0.2		$	(17.1	)	$	165.8		$	(155.9	)
Acquisition and integration expenses		7.8			91.6			88.5			7.8			318.6
Amortization of intangible assets		5.9			111.7			94.1			17.4			320.0
Financing charges in interest expense		-			4.0			3.9			-			75.9
Tax effect of the above adjustments		(4.0	)		(112.7	)		(50.3	)		(7.3	)		(221.9	)
Amortization of intangible assets included in NCI,
net of tax		(0.8	)		(5.6	)		(5.6	)		(1.6	)		(18.6	)
Adjusted net income attributable to AECOM	$	78.1		$	89.2		$	113.5		$	182.1		$	318.1

Net income (loss) attributable to AECOM – per diluted share	$	0.70		$	-		$	(0.11	)	$	1.69		$	(1.05	)
Per diluted share adjustments:
Acquisition and integration expenses		0.08			0.60			0.58			0.08			2.12
Amortization of intangible assets		0.06			0.73			0.61			0.18			2.13
Financing charges in interest expense		-			0.03			0.03			-			0.52
Tax effect of the above adjustments		(0.04	)		(0.74	)		(0.33	)		(0.08	)		(1.48	)
Amortization of intangible assets included in NCI,
net of tax		(0.01	)		(0.04	)		(0.04	)		(0.02	)		(0.12	)
Adjusted net income attributable to AECOM – per diluted share	$	0.79		$	0.58		$	0.74		$	1.85		$	2.12

*		Basic and dilutive GAAP EPS calcutions use the same share count because of a net loss to avoid any antidilutive effect; however, the adjusted EPS includes dilutive shares excluded in the GAAP EPS.


AECOM
Regulation G Information
($ in millions)

Reconciliation of reported amounts to adjusted amounts excluding acquisition and integration expenses, amortization of intangible assets and financing charges in interest expense

	Three Months Ended								Nine Months Ended
	Jun 30, 2014		Mar 31, 2015			Jun 30, 2015			Jun 30, 2014		Jun 30, 2015

EBITDA	$	11.9	$	143.4		$	167.7		$	212.4	$	427.9
Acquisition and integration expenses		111.8		91.6			88.5			111.8		318.6
Depreciation expense included in acquisition and
integration expense line above		-		(8.3	)		(6.0	)		-		(14.3	)
Adjusted EBITDA	$	123.7	$	226.7		$	250.2		$	324.2	$	732.2

Design & Consulting Services Segment:
Income from operations	$	93.7	$	51.6		$	104.1		$	256.4	$	203.5
Amortization of intangible assets		4.6		56.6			40.9			13.1		147.4
Adjusted income from operations	$	98.3	$	108.2		$	145.0		$	269.5	$	350.9

Construction Services Segment:
Income (loss) from operations	$	5.6	$	7.2		$	(4.0	)	$	18.8	$	44.4
Amortization of intangible assets		0.8		19.0			14.8			2.4		65.7
Adjusted income from operations	$	6.4	$	26.2		$	10.8		$	21.2	$	110.1

Management Services Segment:
Income from operations	$	15.1	$	69.2		$	54.2		$	48.4	$	193.0
Amortization of intangible assets		0.6		36.1			38.4			1.9		106.9
Adjusted income from operations	$	15.7	$	105.3		$	92.6		$	50.3	$	299.9

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