May 03, 2012 at 07:00 AM EDT
AECOM reports second-quarter fiscal year 2012 financial results

AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for public and private sector clients in more than 130 countries around the world, announced today its financial results for the second quarter of fiscal year 2012.

Second-quarter revenue was $2.0 billion, a 4% increase from the second quarter of fiscal year 2011. AECOM’s gross revenue includes a significant amount of pass-through costs and, therefore, the company believes that revenue, net of other direct costs, which is a non-GAAP measure, also provides a valuable perspective on its business results. Second-quarter revenue, net of other direct costs, was $1.3 billion.

AECOM reported net income attributable to AECOM of $49 million and diluted earnings per share (EPS) of 43 cents for the second quarter. This represents a decrease of 15% from net income of $58 million and a decrease of 12% from diluted earnings per share of 49 cents for the same period last year. Operating income for the second quarter decreased 16% from last year to $73 million.

For the first six months of fiscal year 2012, AECOM reported net income attributable to AECOM of $97 million and diluted EPS of 85 cents, a decrease of 15% and 12%, respectively, compared to the same period last year. Operating income for the first six months of fiscal 2012 decreased 16% year over year to $150 million. For the first six months of fiscal year 2012, the company's revenue, net of other direct costs, increased 1% to $2.5 billion, while revenue was $4.0 billion — 4% higher than the same period last year.

“During the quarter, we saw strength in our Professional Technical Services segment driven by accelerated growth in key end markets and regions, including emerging and natural resources as well as Asia. This growth was enabled by investments that we have made to enhance our capabilities across AECOM,” said John M. Dionisio, AECOM chairman and chief executive officer. “Unfortunately, this strength was overshadowed by challenges in our Management Support Services segment.”

As a result of these factors, AECOM is adjusting its full-year EPS guidance to $2.30 to $2.45.

New Wins and Backlog

“Our new wins accelerated sequentially, topping $2.4 billion, while backlog also was up sequentially to $16 billion — a 4% increase year over year. These metrics demonstrate the underlying strength of our business as clients increasingly turn to AECOM for our integrated service platform and global expertise,” added Michael S. Burke, AECOM president. “This demand, coupled with a broad-based improvement in profitability during the second half, will allow us to achieve our target of generating free cash flow roughly equal to net income this year.”

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.

For the second quarter of fiscal year 2012, the PTS segment reported revenue of $1.8 billion and revenue, net of other direct costs, of $1.2 billion, compared to revenue of $1.6 billion and revenue, net of other direct costs, of $1.1 billion in the same period last year. This represents a 9% increase in revenue and a 2% increase in revenue, net of other direct costs. PTS segment operating income was $91 million compared to $92 million last year.

Management Support Services

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

For the second quarter of fiscal year 2012, the MSS segment reported revenue of $209.8 million and revenue, net of other direct costs, of $126.4 million, compared to revenue of $290.8 million, and revenue, net of other direct costs, of $148.6 million for the same period during fiscal year 2011. This represents a 28% decrease in revenue and a 15% decrease in revenue, net of other direct costs. In addition, the MSS segment reported operating income of $2 million compared to $19 million for the same period during fiscal year 2011.

Balance Sheet and Cash Flow

As of March 31, 2012, AECOM had $466 million of total cash and cash equivalents, $1.3 billion of debt and $1.05 billion in committed bank facilities with $807 million in unused capacity. Cash flow from operations totaled $11 million in the quarter.

AECOM is hosting a conference call today at 10 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 1-866-831-6272 or 1-617-213-8859 and entering the passcode 45169144. 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.

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 $8.2 billion during the 12 months ended March 31, 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 Corporation

Consolidated Statement of Income

(unaudited - in thousands, except per share data)

Three Months EndedSix Months Ended
March 31, 2012March 31, 2011March 31, 2012March 31, 2011
Revenue $ 2,010,951 $ 1,936,421 $ 4,040,131 $ 3,872,604
Other direct costs 721,451 643,022 1,519,782 1,365,428
Revenue, net of other direct costs (non-GAAP) 1,289,500 1,293,399 2,520,349 2,507,176
Cost of revenue, net of other direct costs 1,213,383 1,193,664 2,353,886 2,302,106
Gross profit 76,117 99,735 166,463 205,070
Equity in earnings of joint ventures 16,898 11,330 25,860 19,427
General and administrative expenses 19,857 23,608 42,468 46,870
Income from operations 73,158 87,457 149,855 177,627
Other income 4,471 1,456 6,390 3,744
Interest expense, net (11,204 ) (10,014 ) (21,818 ) (19,886 )

Income from continuing operations before
    income tax expense

66,425 78,899 134,427 161,485
Income tax expense 16,769 19,239 36,347 39,742
Net income 49,656 59,660 98,080 121,743

Noncontrolling interest in income of
    consolidated subsidiaries, net of tax

(662 ) (1,945 ) (1,155 ) (7,160 )
Net income attributable to AECOM $ 48,994 $ 57,715 $ 96,925 $ 114,583
Net income allocation:
Preferred stock dividend $ $ $ $ 2

Net income available for common
    stockholders

48,994 57,715 96,925 114,581
Net income attributable to AECOM $ 48,994 $ 57,715 $ 96,925 $ 114,583
Net income attributable to AECOM per share:
Basic and diluted $ 0.43 $ 0.49 $ 0.85 $ 0.97
Weighted average shares outstanding:
Basic 113,352 117,283 113,659 117,642
Diluted 114,288 118,278 114,439 118,697
AECOM Technology Corporation
Balance Sheet and Cash Flow Information
(unaudited - in thousands)
March 31, 2012September 30, 2011
Balance Sheet Information:
Cash and cash equivalents $ 465,662 $ 456,940
Accounts receivable, net 2,554,224 2,380,181
Working capital 1,231,222 1,175,620
Working capital, net of cash and cash equivalents 765,560 718,680
Total debt 1,260,968 1,162,469
Total assets 6,013,232 5,789,328
Total AECOM stockholders’ equity 2,433,830 2,339,711
Six Months Ended
March 31, 2012March 31, 2011
Cash Flow Information:
Net cash provided by (used in) operating activities* $ 4,998 $ (146,035 )

* March 31, 2011, amount includes deferred compensation plan termination ($90 million) and associated excess tax benefits ($58 million).

AECOM TECHNOLOGY CORPORATION
Reportable Segments
($ in thousands)

Professional
Technical
Services

Management
Support
Services

CorporateTotal
Three Months Ended March 31, 2012
Revenue $ 1,801,145 $ 209,806 $ - $ 2,010,951
Other direct costs 638,030 83,421 - 721,451
Revenue, net of other direct costs (non-GAAP) 1,163,115 126,385 - 1,289,500
Cost of revenue, net of other direct costs 1,076,674 136,709 - 1,213,383
Gross profit 86,441 (10,324 ) - 76,117
Equity in earnings of joint ventures 4,556 12,342 - 16,898
General and administrative expenses - - 19,857 19,857
Income from operations $ 90,997 $ 2,018 $ (19,857 ) $ 73,158
Gross profit as a % of revenue 4.8 % -4.9 % - 3.8 %

Gross profit as a % of revenue, net of other direct costs
(non-GAAP)

7.4 % -8.2 % - 5.9 %
Three Months Ended March 31, 2011
Revenue $ 1,645,633 $ 290,788 $ - $ 1,936,421
Other direct costs 500,877 142,145 - 643,022
Revenue, net of other direct costs (non-GAAP) 1,144,756 148,643 - 1,293,399
Cost of revenue, net of other direct costs 1,056,998 136,666 - 1,193,664
Gross profit 87,758 11,977 - 99,735
Equity in earnings of joint ventures 4,019 7,311 - 11,330
General and administrative expenses - - 23,608 23,608
Income from operations $ 91,777 $ 19,288 $ (23,608 ) $ 87,457
Gross profit as a % of revenue 5.3 % 4.1 % - 5.2 %

Gross profit as a % of revenue, net of other direct costs
(non-GAAP)

7.7 % 8.1 % - 7.7 %
AECOM TECHNOLOGY CORPORATION
Reportable Segments
($ in thousands)

Professional
Technical
Services

Management
Support Services

CorporateTotal
Six Months Ended March 31, 2012
Revenue $ 3,608,549 $ 431,582 $ - $ 4,040,131
Other direct costs 1,344,566 175,216 - 1,519,782
Revenue, net of other direct costs (non-GAAP) 2,263,983 256,366 - 2,520,349
Cost of revenue, net of other direct costs 2,092,781 261,105 - 2,353,886
Gross profit 171,202 (4,739 ) - 166,463
Equity in earnings of joint ventures 7,048 18,812 - 25,860
General and administrative expenses - - 42,468 42,468
Income from operations $ 178,250 $ 14,073 $ (42,468 ) $ 149,855
Gross profit as a % of revenue 4.7 % -1.1 % - 4.1 %

Gross profit as a % of revenue, net of other direct costs
(non-GAAP)

7.6 % -1.8 % - 6.6 %
Contracted backlog $ 7,409,504 $ 962,125 $ - $ 8,371,629
Awarded backlog 6,468,962 1,201,049 - 7,670,011
Total backlog $ 13,878,466 $ 2,163,174 $ - $ 16,041,640
Six Months Ended March 31, 2011
Revenue $ 3,221,404 $ 651,200 $ - $ 3,872,604
Other direct costs 991,841 373,587 - 1,365,428
Revenue, net of other direct costs (non-GAAP) 2,229,563 277,613 - 2,507,176
Cost of revenue, net of other direct costs 2,052,271 249,835 - 2,302,106
Gross profit 177,292 27,778 - 205,070
Equity in earnings of joint ventures 6,129 13,298 - 19,427
General and administrative expenses - - 46,870 46,870
Income from operations $ 183,421 $ 41,076 $ (46,870 ) $ 177,627
Gross profit as a % of revenue 5.5 % 4.3 % - 5.3 %

Gross profit as a % of revenue, net of other direct costs
(non-GAAP)

8.0 % 10.0 % - 8.2 %
Contracted backlog $ 7,770,349 $ 747,190 $ - $ 8,517,539
Awarded backlog 5,189,214 1,647,800 - 6,837,014
Total backlog $ 12,959,563 $ 2,394,990 $ - $ 15,354,553

AECOM Technology Corporation

Regulation G Information
($ in millions)

Reconciliation of Revenue to Revenue, Net of Other Direct Costs

Three Months EndedSix Months Ended
March 31, 2012March 31, 2011March 31, 2012March 31, 2011

Consolidated

Revenue $ 2,010.9 $ 1,936.4 $ 4,040.1 $ 3,872.6
Less: Other direct costs 721.4 643.0 1,519.8 1,365.4
Revenue, net of other direct costs $ 1,289.5 $ 1,293.4 $ 2,520.3 $ 2,507.2

PTS Segment

Revenue $ 1,801.1 $ 1,645.6 $ 3,608.5 $ 3,221.4
Less: Other direct costs 638.0 500.8 1,344.5 991.8
Revenue, net of other direct costs $ 1,163.1 $ 1,144.8 $ 2,264.0 $ 2,229.6

MSS Segment

Revenue $ 209.8 $ 290.8 $ 431.6 $ 651.2
Less: Other direct costs 83.4 142.2 175.3 373.6
Revenue, net of other direct costs $ 126.4 $ 148.6 $ 256.3 $ 277.6

Reconciliation of Amounts Provided by Acquired Companies

Three Months Ended March 31, 2012Six Months Ended March 31, 2012
Total

Provided by
Acquired
Companies

Excluding
Effect of
Acquired
Companies

Total

Provided by
Acquired
Companies

Excluding
Effect of
Acquired
Companies

Consolidated

Revenue, net of other direct costs $ 1,289.5 $ 6.4 $ 1,283.1 $ 2,520.3 $ 18.6 $ 2,501.7

Reconciliation of EBITDA to Net Income Attributable to AECOM

Three Months Ended

Mar 31,
2012

Dec 31,
2011

Sep 30,
2011

Jun 30,
2011

Mar 31,
2011

Dec 31,
2010

Sep 30,
2010

Jun 30,
2010

EBITDA $ 101.6 $ 103.0 $ 157.8 $ 136.2 $ 114.3 $ 117.1 $ 125.8 $ 105.9
Less: Interest (income)/expense* 10.6 10.0 8.9 10.4 10.0 9.9 5.3 1.2
Less: Depreciation and amortization 25.3 25.5 25.1 28.0 27.4 29.8 21.2 17.2

Income from continuing operations attributable
to AECOM before income taxes

65.7 67.5 123.8 97.8 76.9 77.4 99.3 87.5
Less: Income tax expense 16.7 19.6 36.4 24.0 19.2 20.5 31.5 22.7

Income from continuing operations attributable
to AECOM

49.0 47.9 87.4 73.8 57.7 56.9 67.8 64.8
Discontinued operations, net of tax
Net income attributable to AECOM $ 49.0 $ 47.9 $ 87.4 $ 73.8 $ 57.7 $ 56.9 $ 67.8 $ 64.8
Fiscal Years Ended September 30,
2011201020092008
EBITDA $ 525.4 $ 417.5 $ 358.5 $ 284.5
Less: Interest expense* 39.2 9.9 10.7 (1.3 )
Less: Depreciation and amortization 110.3 78.9 84.1 62.8

Income from continuing operations attributable
to AECOM before income taxes

375.9 328.7 263.7 223.0
Less: Income tax expense 100.1 91.7 77.0 76.5

Income from continuing operations attributable
to AECOM

275.8 237.0 186.7 146.5
Discontinued operations, net of tax (0.1 ) 3.0 0.7
Net income attributable to AECOM $ 275.8 $ 236.9 $ 189.7 $ 147.2

* Excluding related amortization.

NR 12-0501

Contacts:

AECOM Technology Corporation
Media:
Paul Gennaro, 212.973.3167
SVP & Chief Communications Officer
Paul.Gennaro@aecom.com
or
Investors:
Paul Cyril, 212.973.2982
SVP, Investor Relations
Paul.Cyril@aecom.com
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