AECOM reports second quarter fiscal year 2018 results

About AECOM

AECOM (NYSE: ACM) is built to deliver a better world. We design, build, finance and operate infrastructure assets for governments, businesses and organizations in more than 150 countries. As a fully integrated firm, we connect knowledge and experience across our global network of experts to help clients solve their most complex challenges. From high-performance buildings and infrastructure, to resilient communities and environments, to stable and secure nations, our work is transformative, differentiated and vital. A Fortune 500 firm, AECOM had revenue of approximately $18.2 billion during fiscal year 2017. See how we deliver what others can only imagine at aecom.com and @AECOM.

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, cash flows, tax rate, share count, interest expense, capital expenditures, amortization of intangible assets and financial fees, or other financial items; non-core Oil & Gas operations sales and restructuring costs; 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 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; we are dependent on long-term government contracts and subject to uncertainties related to government contract appropriations; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; impacts of the Tax Cuts and Jobs Acts; we may experience losses under fixed-price contracts; we have limited control over operations run through our joint venture entities; we may be liable for misconduct by our employees or consultants or our failure to comply with laws or regulations applicable to our business; we may not maintain adequate surety and financial capacity; we are highly leveraged and may not be able to service our debt and guarantees; we have exposure to political and economic risks in different countries where we operate as well as currency exchange rate fluctuations; we may not be able to retain and recruit key technical and management personnel; we may be subject to legal claims and we may have inadequate insurance coverage; we are subject to environmental law compliance and we may have inadequate nuclear indemnification; there may be unexpected adjustments and cancellations related to our backlog; we are dependent on partners and third parties who may fail to satisfy their obligations; we may not be able to manage pension costs; we may face cybersecurity issues and IT outages; 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. 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 adjusted EPS, adjusted EBITDA, adjusted operating income, adjusted tax rate, adjusted interest expense, 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 use adjusted EBITDA, net and operating income to exclude the impact of non-operating items, such as amortization expense, taxes, acquisition and integration expenses, and non-core operating losses. We use free cash flow to represent the cash generated after capital expenditures to maintain our business. Our non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of these non-GAAP measures is found in the Regulation G Information tables at the back of this release.

When we provide our long term projections for organic revenue growth, adjusted EBITDA, adjusted EPS growth, and free cash flow on a forward-looking basis, the closest corresponding GAAP measure and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally is not available without unreasonable effort due to length of the forecasted period and potential high variability, complexity and low visibility as to items that would be excluded from the GAAP measure in the relevant future period.


AECOM
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,			%
	2017			2018			Change		2017			2018			Change

Revenue	$	4,427,198		$	4,790,910		8.2	%	$	8,785,547		$	9,701,742		10.4	%
Cost of revenue	4,258,754			4,649,638			9.2	%	8,447,130			9,424,318			11.6	%
Gross profit	168,444			141,272			(16.1	)%	338,417			277,424			(18.0	)%

Equity in earnings of joint ventures	21,738			13,038			(40.0	)%	43,209			42,758			(1.0	)%
General and administrative expenses	(29,844		)	(30,217		)	1.2	%	(62,483		)	(64,887		)	3.8	%
Impairment of assets held for sale, including goodwill	—			(168,178		)	NM		—			(168,178		)	NM
Acquisition & integration expenses	(19,997		)	—			(100.0	)%	(35,409		)	—			(100.0	)%
Gain on disposal activities	572			—			(100.0	)%	572			—			(100.0	)%
Income (loss) from operations	140,913			(44,085		)	(131.3	)%	284,306			87,117			(69.4	)%

Other income	1,241			12,507			NM		2,101			14,790			NM
Interest expense	(61,801		)	(100,577		)	62.7	%	(115,438		)	(156,742		)	35.8	%
Income (loss) before income tax benefit	80,353			(132,155		)	(264.5	)%	170,969			(54,835		)	(132.1	)%

Income tax benefit	(35,487		)	(24,400		)	(31.2	)%	(10,649		)	(71,493		)	571.4	%

Net income (loss)	115,840			(107,755		)	(193.0	)%	181,618			16,658			(90.8	)%

Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13,444		)	(11,978		)	(10.9	)%	(32,043		)	(25,077		)	(21.7	)%

Net income (loss) attributable to AECOM	$	102,396		$	(119,733	)	(216.9	)%	$	149,575		$	(8,419	)	(105.6	)%

Net income (loss) attributable to AECOM per share:
Basic	$	0.66		$	(0.75	)	(213.6	)%	$	0.97		$	(0.05	)	(105.2	)%
Diluted	$	0.65		$	(0.75	)	(215.4	)%	$	0.94		$	(0.05	)	(105.3	)%

Weighted average shares outstanding:
Basic	155,366			159,495			2.7	%	154,810			158,702			2.5	%
Diluted	158,650			159,495			0.5	%	158,322			158,702			0.2	%

NM — not meaningful


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

	September 30, 2017		March 31, 2018
Balance Sheet Information:
Total cash and cash equivalents	$	802,362	$	867,225
Accounts receivable – net		5,127,743		5,208,918
Working capital		1,103,843		1,282,119
Total debt, excluding unamortized debt issuance costs		3,896,398		3,999,140
Total assets		14,396,956		14,617,332
Total AECOM stockholders’ equity		3,996,126		4,040,752


AECOM
Reportable Segments
(unaudited - in thousands)

	Design & Consulting Services			Construction Services				Management Services			AECOM Capital			Corporate			Total
Three Months Ended March 31, 2018
Revenue	$	2,004,745		$	1,888,342			$	897,823		$	-		$	-		$	4,790,910
Cost of revenue		1,884,511			1,901,637				863,490			-			-			4,649,638
Gross profit		120,234			(13,295	)			34,333			-			-			141,272
Equity in earnings of joint ventures		2,763			1,208				9,067			-			-			13,038
General and administrative expenses		-			-				-			(2,880	)		(27,337	)		(30,217	)
Impairment of assets held for sale, including goodwill		-			(168,178	)			-			-			-			(168,178	)
Income (loss) from operations	$	122,997		$	(180,265	)		$	43,400		$	(2,880	)	$	(27,337	)	$	(44,085	)

Gross profit as a % of revenue		6.0	%		(0.7	)%			3.8	%		-			-			2.9	%

Three Months Ended March 31, 2017
Revenue	$	1,867,587		$	1,732,692			$	826,919		$	-		$	-		$	4,427,198
Cost of revenue		1,761,562			1,712,242				784,950			-			-			4,258,754
Gross profit		106,025			20,450				41,969			-			-			168,444
Equity in earnings of joint ventures		6,120			5,265				10,353			-			-			21,738
General and administrative expenses		-			-				-			(1,791	)		(28,053	)		(29,844	)
Acquisition & integration expenses		-			-				-			-			(19,997	)		(19,997	)
Gain on disposal activities		572			-				-			-			-			572
Income (loss) from operations	$	112,717		$	25,715			$	52,322		$	(1,791	)	$	(48,050	)	$	140,913

Gross profit as a % of revenue		5.7	%		1.2	%			5.1	%		-			-			3.8	%

Six Months Ended March 31, 2018
Revenue	$	3,946,645		$	4,013,829			$	1,741,268		$	-		$	-		$	9,701,742
Cost of revenue		3,748,565			4,000,045				1,675,708			-			-			9,424,318
Gross profit		198,080			13,784				65,560			-			-			277,424
Equity in earnings of joint ventures		10,225			14,614				17,919			-			-			42,758
General and administrative expenses		-			-				-			(5,487	)		(59,400	)		(64,887	)
Impairment of assets held for sale, including goodwill		-			(168,178		)		-			-			-			(168,178	)
Income (loss) from operations	$	208,305		$	(139,780		)	$	83,479		$	(5,487	)	$	(59,400	)	$	87,117

Gross profit as a % of revenue		5.0	%		0.3	%			3.8	%		-			-			2.9	%

Contracted backlog	$	9,238,472		$	10,981,745			$	2,715,448		$	-		$	-		$	22,935,665
Awarded backlog		7,935,382			5,719,996				10,218,800			-			-			23,874,178
Unconsolidated JV backlog		-			2,267,647				858,389			-			-			3,126,036
Total backlog	$	17,173,854		$	18,969,388			$	13,792,637		$	-		$	-		$	49,935,879

Six Months Ended March 31, 2017
Revenue	$	3,708,348		$	3,482,941			$	1,594,258		$	-		$	-		$	8,785,547
Cost of revenue		3,507,082			3,448,732				1,491,316			-			-			8,447,130
Gross profit		201,266			34,209				102,942			-			-			338,417
Equity in earnings of joint ventures		10,207			9,574				23,428			-			-			43,209
General and administrative expenses		-			-				-			(4,447	)		(58,036	)		(62,483	)
Acquisition & integration expenses		-			-				-			-			(35,409	)		(35,409	)
Gain on disposal activities		572			-				-			-			-			572
Income (loss) from operations	$	212,045		$	43,783			$	126,370		$	(4,447	)	$	(93,445	)	$	284,306

Gross profit as a % of revenue		5.4	%		1.0	%			6.5	%		-			-			3.9	%

Contracted backlog	$	8,223,679		$	12,239,329			$	3,542,143		$	-		$	-		$	24,005,151
Awarded backlog		6,749,387			3,976,439				4,595,326			-			-			15,321,152
Unconsolidated JV backlog		-			2,285,325				831,610			-			-			3,116,935
Total backlog	$	14,973,066		$	18,501,093			$	8,969,079		$	-		$	-		$	42,443,238


AECOM
Regulation G Information
($ in millions)

Reconciliation of Revenue to Amounts Provided by Acquired Companies
	Three Months Ended March 31, 2018						Six Months Ended March 31, 2018
	Total		Provided by Acquired Companies		Excluding Effect of Acquired Companies		Total		Provided by Acquired Companies		Excluding Effect of Acquired Companies

Revenue
AECOM Consolidated	$	4,790.9	$	124.3	$	4,666.6	$	9,701.7	$	283.2	$	9,418.5
Design & Consulting Services		2,004.7		-		2,004.7		3,946.6		-		3,946.6
Construction Services		1,888.3		124.3		1,764.0		4,013.8		283.2		3,730.6
Management Services		897.9		-		897.9		1,741.3		-		1,741.3


Reconciliation of Net Income Attributable to AECOM to EBITDA and to Adjusted EBITDA
	Three Months Ended									Six Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2017			2017			2018			2017			2018

Net income (loss) attributable to AECOM	$	102.4		$	111.3		$	(119.7	)	$	149.6		$	(8.4	)
Income tax benefit		(35.4	)		(47.1	)		(24.4	)		(10.6	)		(71.5	)
Income (loss) attributable to AECOM before income taxes		67.0			64.2			(144.1	)		139.0			(79.9	)
Depreciation and amortization expense ¹		72.1			63.5			81.0			138.6			144.5
Interest income ²		(1.3	)		(1.8	)		(3.4	)		(2.0	)		(5.2	)
Interest expense ³		52.7			53.3			90.9			103.1			144.2
EBITDA	$	190.5		$	179.2		$	24.4		$	378.7		$	203.6
Non-core operating losses		0.5			-			21.2			2.5			21.2
Impairment of assets held for sale, including goodwill		-			-			168.2			-			168.2
Acquisition and integration expenses		20.0			-			-			35.4			-
Gain on disposal		(0.6	)		-			-			(0.6	)		-
FX gain from forward currency contract		-			-			(9.1	)		-			(9.1	)
Depreciation expense included in non-core operating losses and acquisition and integration expenses above		(0.5	)		-			(3.8	)		(0.8	)		(3.8	)
Adjusted EBITDA	$	209.9		$	179.2		$	200.9		$	415.2		$	380.1

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


Reconciliation of Total Debt to Net Debt
	Balances at:
	Mar 31, 2017		Dec 31, 2017		Mar 31, 2018
Short-term debt	$	21.4	$	2.4	$	9.8
Current portion of long-term debt		331.2		160.9		123.9
Long-term debt, gross		3,908.9		3,788.4		3,865.4
Total debt excluding unamortized debt issuance costs		4,261.5		3,951.7		3,999.1
Less: Total cash and cash equivalents		725.9		813.2		867.2
Net debt	$	3,535.6	$	3,138.5	$	3,131.9


Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
	Three Months Ended
	Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,
	2016			2016			2016			2017			2017			2017			2017			2018
Net cash provided by (used in) operating activities	$	260.1		$	362.9		$	77.5		$	(46.1	)	$	413.9		$	251.4		$	52.4		$	118.4
Capital expenditures, net		(68.8	)		(36.9	)		(21.0	)		(17.7	)		(19.8	)		(20.0	)		(18.5	)		(23.7	)
Free cash flow	$	191.3		$	326.0		$	56.5		$	(63.8	)	$	394.1		$	231.4		$	33.9		$	94.7

	Fiscal Years Ended Sep 30,
		2012			2013			2014			2015			2016			2017
Net cash provided by operating activities	$	433.4		$	408.6		$	360.6		$	764.4		$	814.2		$	696.7
Capital expenditures, net		(62.9	)		(52.1	)		(62.8	)		(69.4	)		(136.8	)		(78.5	)
Free cash flow	$	370.5		$	356.5		$	297.8		$	695.0		$	677.4		$	618.2


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

	Three Months Ended									Six Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2017			2017			2018			2017			2018

Reconciliation of Income from Operations to Adjusted Income from Operations
Income (loss) from operations	$	140.9		$	131.2		$	(44.1	)	$	284.3		$	87.1
Non-core operating losses		0.5			-			21.2			2.5			21.2
Impairment of assets held for sale, including goodwill		-			-			168.2			-			168.2
Acquisition and integration expenses		20.0			-			-			35.4			-
Gain on disposal activities		(0.6	)		-			-			(0.6	)		-
Amortization of intangible assets		27.7			26.9			33.7			55.1			60.6
Adjusted income from operations	$	188.5		$	158.1		$	179.0		$	376.7		$	337.1

Reconciliation of Income Before Income Taxes to Adjusted Income Before Income Taxes
Income (loss) before income tax benefit	$	80.4		$	77.3		$	(132.1	)	$	171.0		$	(54.8	)
Non-core operating losses		0.5			-			21.2			2.5			21.2
Impairment of assets held for sale, including goodwill		-			-			168.2			-			168.2
Acquisition and integration expenses		20.0			-			-			35.4			-
Gain on disposal activities		(0.6	)		-			-			(0.6	)		-
Amortization of intangible assets		27.7			26.9			33.7			55.1			60.6
FX gain from forward currency contract		-			-			(9.1	)		-			(9.1	)
Financing charges in interest expense		8.7			2.9			44.2			11.5			47.1
Adjusted income before income tax (benefit) expense	$	136.7		$	107.1		$	126.1		$	274.9		$	233.2

Reconciliation of Income Taxes to Adjusted Income Taxes
Income tax benefit	$	(35.4	)	$	(47.1	)	$	(24.4	)	$	(10.6	)	$	(71.5	)
Tax effect of the above adjustments ^ï¿½nbsp;		15.5			5.4			26.6			24.3			32.0
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform		-			41.7			-			-			41.7
Adjusted income tax (benefit) expense	$	(19.9	)	$	-		$	2.2		$	13.7		$	2.2
^{ï¿½nbsp; Adjusts the income tax expense (benefit) during the period to exclude the impact on our effective tax rate of the pre-tax adjustments shown above and the impact of the tax reform changes.}

Reconciliation of Noncontrolling Interests to Adjusted Noncontrolling Interests
Noncontrolling interests in income of consolidated subsidiaries, net of tax	$	(13.4	)	$	(13.1	)	$	(12.0	)	$	(32.0	)	$	(25.1	)
Amortization of intangible assets included in NCI, net of tax		(2.4	)		(2.5	)		(3.3	)		(4.8	)		(5.8	)
Adjusted noncontrolling interests in income of consolidated subsidiaries, net of tax	$	(15.8	)	$	(15.6	)	$	(15.3	)	$	(36.8	)	$	(30.9	)

Reconciliation of Net Income Attributable to AECOM to Adjusted Net Income Attributable to AECOM
Net income (loss) attributable to AECOM	$	102.4		$	111.3		$	(119.7	)	$	149.6		$	(8.4	)
Non-core operating losses		0.5			-			21.2			2.5			21.2
Impairment of assets held for sale, including goodwill		-			-			168.2			-			168.2
Acquisition and integration expenses		20.0			-			-			35.4			-
Gain on disposal activities		(0.6	)		-			-			(0.6	)		-
Amortization of intangible assets		27.7			26.9			33.7			55.1			60.6
FX gain from forward currency contract		-			-			(9.1	)		-			(9.1	)
Financing charges in interest expense		8.7			2.9			44.2			11.5			47.1
Tax effect of the above adjustments ^ï¿½nbsp;		(15.6	)		(5.4	)		(26.6	)		(24.4	)		(32.0	)
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform		-			(41.7	)		-			-			(41.7	)
Amortization of intangible assets included in NCI, net of tax		(2.4	)		(2.5	)		(3.3	)		(4.8	)		(5.8	)
Adjusted net income attributable to AECOM	$	140.7		$	91.5		$	108.6		$	224.3		$	200.1


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

	Three Months Ended									Six Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2017			2017			2018			2017			2018

Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share
Net income (loss) attributable to AECOM – per diluted share	$	0.65		$	0.69		$	(0.75	)	$	0.94		$	(0.05	)
Per diluted share adjustments:
Non-core operating losses		0.01			-			0.13			0.02			0.13
Impairment of assets held for sale, including goodwill		-			-			1.04			-			1.04
Acquisition and integration expenses		0.12			-			-			0.22			-
Amortization of intangible assets		0.18			0.17			0.21			0.35			0.37
FX gain from forward currency contract		-			-			(0.06	)		-			(0.06	)
Financing charges in interest expense		0.05			0.02			0.27			0.07			0.29
Tax effect of the above adjustments ^ï¿½nbsp;		(0.11	)		(0.03	)		(0.15	)		(0.15	)		(0.18	)
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform		-			(0.26	)		-			-			(0.26	)
Amortization of intangible assets included in NCI, net of tax		(0.01	)		(0.02	)		(0.02	)		(0.03	)		(0.04	)
Adjusted net income attributable to AECOM – per diluted share	$	0.89		$	0.57		$	0.67		$	1.42		$	1.24
Weighted average shares outstanding – diluted		158.7			161.8			162.2			158.3			162.0

Reconciliation of EBITDA to Adjusted Income from Operations
EBITDA ⁽¹⁾	$	190.5		$	179.2		$	24.4		$	378.7		$	203.6
Non-core operating losses		0.5			-			21.2			2.5			21.2
Impairment of assets held for sale, including goodwill		-			-			168.2			-			168.2
Acquisition and integration expenses		20.0			-			-			35.4			-
Gain on disposal activities		(0.6	)		-			-			(0.6	)		-
FX gain from forward currency contract		-			-			(9.1	)		-			(9.1	)
Depreciation expense included in non-core operating losses and acquisition and integration expense above		(0.5	)		-			(3.8	)		(0.8	)		(3.8	)
Adjusted EBITDA	$	209.9		$	179.2		$	200.9		$	415.2		$	380.1
Other expense		(1.3	)		(2.3	)		(12.5	)		(2.1	)		(14.8	)
FX gain from forward currency contract		-			-			9.1			-			9.1
Interest income ⁽²⁾		1.3			1.8			3.4			2.0			5.2
Depreciation ⁽³⁾		(37.2	)		(36.2	)		(37.2	)		(75.2	)		(73.4	)
Noncontrolling interests in income of consolidated subsidiaries, net of tax		13.4			13.1			12.0			32.0			25.1
Amortization of intangible assets included in NCI, net of tax		2.4			2.5			3.3			4.8			5.8
Adjusted income from operations	$	188.5		$	158.1		$	179.0		$	376.7		$	337.1

⁽¹⁾ See Reconciliation of Net Income Attributable to AECOM to EBITDA and to Adjusted EBITDA; ⁽²⁾ Included in other income; ⁽³⁾ Excludes depreciation from non-core operating losses, and acquisition and integration expenses


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

	Three Months Ended									Six Months Ended
	Mar 31,				Dec 31,		Mar 31,			Mar 31,			Mar 31,
	2017				2017		2018			2017			2018

Reconciliation of Segment Income from Operations to Adjusted Income from Operations
Design & Consulting Services Segment:
Income from operations	$	112.7		$		85.3	$	123.0		$	212.0		$	208.3
Non-core operating losses		0.5				-		1.2			2.5			1.2
Gain on disposal activities		(0.6	)			-		-			(0.6	)		-
Amortization of intangible assets		6.9				6.2		6.2			13.9			12.4
Adjusted income from operations	$	119.5		$		91.5	$	130.4		$	227.8		$	221.9

Construction Services Segment:
Income (loss) from operations	$	25.7		$		40.5	$	(180.3	)	$	43.8		$	(139.8	)
Non-core operating losses		-				-		20.0			-			20.0
Impairment of assets held for sale, including goodwill		-				-		168.2			-			168.2
Amortization of intangible assets		7.8				10.8		17.8			15.1			28.6
Adjusted income from operations	$	33.5		$		51.3	$	25.7		$	58.9		$	77.0

Management Services Segment:
Income from operations	$	52.4		$		40.1	$	43.4		$	126.4		$	83.5
Amortization of intangible assets		13.0				9.9		9.7			26.1			19.6
Adjusted income from operations	$	65.4		$		50.0	$	53.1		$	152.5		$	103.1


AECOM
Regulation G Information

FY18 GAAP EPS Guidance based on Adjusted EPS Guidance

		Fiscal Year End 2018

GAAP EPS Guidance		$0.92 to $1.32
Adjusted EPS Excludes:
Amortization of intangible assets		$0.62
Foreign exchange gain		($0.06)
Financing charges in interest expense		$0.33
Year-to-date non-core operating losses		$0.13
Tax effect of the above items*		($0.22)
Loss on assets held for sale, including goodwill		$1.04
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform		($0.26)
Adjusted EPS Guidance		$2.50 to $2.90

*The adjusted tax expense differs from the GAAP tax expense based on the deductibility and tax rate applied to each of the adjustments.


FY18 GAAP Net Income Guidance based on Adjusted EBITDA Guidance

		Fiscal Year End 2018
(in millions)
GAAP Net Income Attributable to AECOM Guidance*		$180
Adjusted Net Income Attributable to AECOM Excludes:
Amortization of intangible assets, net of NCI		$100
Foreign exchange gain		($9)
Financing charges in interest expense		$53
Year-to-date non-core operating losses		$21
Tax effect of the above items**		($35)
Loss on assets held for sale, including goodwill		$168
Revaluation of deferred taxes and one-time tax repatriation charges associated with U.S. tax reform		($42)
Adjusted Net Income Attributable to AECOM		$437
Adjusted EBITDA Excludes:
Interest Expense		$210
Interest Income		($6)
Depreciation		$145
Taxes		$95
Adjusted EBITDA Guidance		$880

*Calculated based on the mid-point of AECOM’s fiscal year 2018 EPS guidance.

**The adjusted tax expense differs from the GAAP tax expense based on the deductibility and tax rate applied to each of the adjustments.

Note: the components in this table may not sum to the total due to rounding.


FY18 GAAP Tax Rate Guidance based on Adjusted Tax Rate Guidance

		Fiscal Year End 2018

GAAP Tax Rate Guidance		8%
Tax rate impact from adjustments to GAAP earnings		8%
Tax rate impact from inclusion of NCI deduction		2%
Effective Tax Rate for Adjusted Earnings Guidance		18%


FY18 GAAP Interest Expense Guidance based on Adjusted Interest Expense Guidance

				Fiscal Year End 2018
(in millions)
GAAP Interest Expense Guidance				$263
Financing charge in interest expense				$53
Adjusted Interest Expense Guidance				$210

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