SEC Filings

10-Q
AECOM filed this Form 10-Q on 02/06/2019
Entire Document
 

Table of Contents

 

Results of Operations

 

Three months ended December 31, 2018 compared to the three months ended December 31, 2017

 

Consolidated Results

 

 

 

Three Months Ended

 

 

 

December 31,

 

December 31,

 

Change

 

 

 

2018

 

2017

 

$

 

%

 

 

 

(in millions)

 

Revenue

 

$

5,037.5

 

$

4,910.8

 

$

126.7

 

2.6

%

Cost of revenue

 

4,866.9

 

4,774.6

 

92.3

 

1.9

 

Gross profit

 

170.6

 

136.2

 

34.4

 

25.3

 

Equity in earnings of joint ventures

 

12.5

 

29.7

 

(17.2

)

(57.9

)

General and administrative expenses

 

(35.9

)

(34.7

)

(1.2

)

3.5

 

Restructuring costs

 

(63.3

)

 

(63.3

)

0.0

 

Income from operations

 

83.9

 

131.2

 

(47.3

)

(36.1

)

Other income

 

3.6

 

2.3

 

1.3

 

56.5

 

Interest expense

 

(56.0

)

(56.2

)

0.2

 

(0.4

)

Income before income tax benefit

 

31.5

 

77.3

 

(45.8

)

(59.2

)

Income tax benefit

 

(33.6

)

(47.1

)

13.5

 

(28.7

)

Net income

 

65.1

 

124.4

 

(59.3

)

(47.7

)

Noncontrolling interests in income of consolidated subsidiaries, net of tax

 

(13.6

)

(13.1

)

(0.5

)

3.8

 

Net income attributable to AECOM

 

$

51.5

 

$

111.3

 

$

(59.8

)

(53.7

)%

 

The following table presents the percentage relationship of statement of operations items to revenue:

 

 

 

Three Months Ended

 

 

 

December 31,
2018

 

December 31,
2017

 

Revenue

 

100.0

%

100.0

%

Cost of revenue

 

96.6

 

97.2

 

Gross margin

 

3.4

 

2.8

 

Equity in earnings of joint ventures

 

0.2

 

0.6

 

General and administrative expenses

 

(0.6

)

(0.7

)

Restructuring costs

 

(1.3

)

0.0

 

Income from operations

 

1.7

 

2.7

 

Other income

 

0.1

 

0.0

 

Interest expense

 

(1.2

)

(1.1

)

Income before income tax benefit

 

0.6

 

1.6

 

Income tax benefit

 

(0.7

)

(0.9

)

Net income

 

1.3

 

2.5

 

Noncontrolling interests in income of consolidated subsidiaries, net of tax

 

(0.3

)

(0.2

)

Net income attributable to AECOM

 

1.0

%

2.3

%

 

Revenue

 

Our revenue for the three months ended December 31, 2018 increased $126.7 million, or 2.6%, to $5,037.5 million as compared to $4,910.8 million for the corresponding period last year.

 

The increase in revenue for the three months ended December 31, 2018 was primarily attributable to an increase in our DCS segment of $87.8 million, a decrease in our CS segment of $111.0 million, an increase in our MS segment of $146.0 million, and an increase in our ACAP segment of $3.9 million, as discussed further below.

 

In the course of providing our services, we routinely subcontract for services and incur other direct costs on behalf of our clients. These costs are passed through to clients and, in accordance with industry practice and GAAP, are included in our revenue and cost of revenue. Because subcontractor and other direct costs can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends. Subcontractor and other direct costs for the quarters ended December 31, 2018 and 2017 were $2.7 billion and $2.6 billion, respectively. Subcontractor costs and other direct costs as a percentage of revenue, were 53% during the three months ended December 31, 2018 and December 31, 2017.

 

30