SEC Filings

8-K
AECOM filed this Form 8-K on 05/08/2018
Entire Document
 

 

Tax Rate

 

The effective tax rate in the second quarter was 18%. On an adjusted basis, the effective tax rate was 2%. The adjusted tax rate was derived by re-computing the expected annual effective tax rate on earnings from adjusted net income.(7) 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.

 

Cash Flow

 

Operating cash flow for the second quarter was $118 million and free cash flow(2) was $95 million. The Company remains on track with its annual free cash flow guidance of $600 million to $800 million for fiscal 2018 and to achieve 2.5x net debt-to-EBITDA(6) by the end of fiscal year 2018 and thereafter intends to return substantially all free cash flow to investors under a $1 billion stock repurchase authorization.

 

Balance Sheet

 

As of March 31, 2018, AECOM had $867 million of total cash and cash equivalents, $3.1 billion of net debt and $1.16 billion in unused capacity under its $1.35 billion revolving credit facility.

 

Financial Impacts of Strategic Decisions

 

AECOM also announced its intention to no longer pursue fixed-price combined-cycle gas power plant EPC projects and to sell and exit certain non-core Oil & Gas operations.

 

The following financial impacts are associated with these decisions:

 

·                  Classified certain Oil & Gas assets as held for sale.

 

·                  Removed $500 million of backlog associated with two fixed-price combined-cycle gas power plant EPC contracts.

 

·                  Reduced fiscal year 2018 adjusted EBITDA guidance by $30 million to $880 million, primarily to reflect the removal of anticipated profit contributions from the decision to no longer proceed on the aforementioned two EPC contracts.

 

Expected proceeds from the Oil & Gas business sales will be deployed to accelerate debt reduction towards the Company’s 2.5x net leverage(6) target, which is expected to be achieved by the end of fiscal year 2018.

 

Financial Outlook

 

AECOM’s fiscal year 2018 financial guidance is as follows:

 

 

 

Fiscal Year 2018 Outlook

Adjusted EBITDA(1)

 

$880 million

Adjusted EPS(1)

 

$2.50 – $2.90

Free Cash Flow(2)

 

$600 million – $800 million

Interest Expense
(excluding amortization of deferred financing fees)

 

$210 million

Amortization(8)

 

$100 million

Full-Year Share Count

 

162 million

Effective Tax Rate for Adjusted Earnings(7)

 

~18%

Capital Expenditures(9)

 

$110 million

 

Conference Call

 

AECOM is hosting a conference call today at 12 p.m. Eastern Time, during which management will make a brief presentation focusing on the Company’s results, strategies and operating trends. Interested parties can listen to the conference call and view accompanying slides via webcast at http://investors.aecom.com. The webcast will be available for replay following the call.

 


(1) Excluding acquisition and integration related expenses, financing charges in interest expense, foreign exchange gains, the amortization of intangible assets, financial impacts associated with expected and actual dispositions of non-core businesses and assets, and the revaluation of deferred taxes and one-time tax repatriation charge associated with U.S. tax reform. If an individual adjustment has no financial impact then the individual adjustment is not reflected in the Regulation G Information tables. See Regulation G Information for a reconciliation of Non-GAAP measures.

 

(2) Free cash flow is defined as cash flow from operations less capital expenditures net of proceeds from disposals.

 

(3) On a constant-currency basis.

 

(4) Organic growth is year-over-year at constant currency and excludes revenue associated with actual and planned non-core asset and business dispositions. Results expressed in constant currency are presented excluding the impact from changes in currency exchange rates.

 

(5) Book-to-burn ratio is defined as the amount of wins divided by revenue recognized during the period, including revenue related to work performed in unconsolidated joint ventures.

 

(6) Net debt-to-EBITDA is comprised of EBITDA as defined in the Company’s credit agreement, which excludes stock-based compensation, and net debt as defined as total debt on the Company’s financial statements, net of cash and cash equivalents.

 

3