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AECOM Reports Strong Net Income, Operating Income, Revenue for Third Quarter of Fiscal Year 2008
  • Third-quarter diluted earnings per share of 37 cents, up 42% from the same period last year.
  • Net income for third quarter increased 59% year over year to $38.5 million.
  • Operating income for third quarter increased 40% year over year to $64.2 million.
  • Revenue for third quarter increased 20% year over year to $1.3 billion.
  • Revenue, net of other direct costs, for the third quarter, increased 33% year over year to $853.3 million.
  • Backlog at June 30, 2008, increased 15% year over year to $7.1 billion.
  • Diluted earnings-per-share outlook raised to $1.34 to $1.37 for full fiscal year 2008.

LOS ANGELES--(BUSINESS WIRE)--Aug. 7, 2008--AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today its financial results for the third quarter of fiscal year 2008, which ended June 30, 2008.

AECOM reported net income of $38.5 million for the third quarter, or diluted earnings per share (EPS) of 37 cents. These results represent an increase of 59% over net income of $24.2 million for the same period last year. Operating income for the third quarter increased 40% year over year to $64.2 million. For the first nine months of fiscal year 2008, AECOM reported net income of $103.8 million and operating income of $167.7 million, an increase of 46% and 48%, respectively.

Third-quarter revenue increased to $1.3 billion, 20% higher than the third quarter of fiscal year 2007. AECOM's gross revenue includes a significant amount of pass-through costs and, therefore, revenue, net of other direct costs, which is a non-GAAP measure, also provides a valuable perspective on its business results. AECOM's revenue, net of other direct costs, for the three months ended June 30, 2008, increased 33% compared to the same period last year, to $853.3 million. For the first nine months of fiscal year 2008, AECOM reported revenue of $3.6 billion and revenue, net of other direct costs, of $2.3 billion, an increase of 14% and 31%, respectively.

"Our third-quarter results were marked by strong global growth," said John M. Dionisio, AECOM president and chief executive officer. "During the quarter, we saw continued strength in our U.S. business, while our non-U.S. business performed even better. Our non-U.S. revenue now represents 56% of our gross revenue."

"We continue to see solid demand for our services globally throughout the infrastructure market," said Dionisio. "Projects such as our work in support of Qatar's New Doha Port Project, the largest maritime project in the world; the Eisenhower Executive Office Building, within the White House complex in Washington, D.C.; the Hong Kong International Airport master plan; and the U.S. Navy Guam expansion project highlight the breadth and diversification of our success."

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 government clients worldwide.

For the third quarter of fiscal year 2008, the PTS segment reported revenue of $1.1 billion and operating income of $70.5 million, compared to revenue of $904.3 million and operating income of $48.8 million for the same period during fiscal year 2007. This represents a 21% increase in revenue and a 44% increase in operating income year over year. PTS revenue, net of other direct costs, increased 32% for the three months ended June 30, 2008, to $809.7 million.

Management Support Services

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

For the third quarter of fiscal year 2008, the MSS segment reported revenue of $224.2 million and operating income of $10.6 million, compared to revenue of $196.3 million and operating income of $9.3 million for the same period during fiscal year 2007. This represents a 14% increase in revenue and a 15% increase in operating income year over year. Segment results for the quarter were positively affected by the release of key task orders and the resolution of government contract negotiations. MSS revenue, net of other direct costs, increased 40% for the three months ended June 30, 2008, to $43.6 million.

Outlook

AECOM announced backlog totaling $7.1 billion at June 30, 2008, a 15% increase year over year.

"AECOM continued to deliver strong results across all of our end markets and geographies during the third quarter," said Michael S. Burke, AECOM executive vice president, chief corporate officer and chief financial officer. "Moreover, the $900-million increase in our year-over-year backlog indicates continued strength and solid momentum in our end markets."

Dionisio cited the nine acquisitions that AECOM has closed year to date as an indicator of the company's execution on its strategic plan. "Our ability to complement our organic growth with key acquisitions positions us well to leverage the opportunities that we see in the global infrastructure market."

Based on its results through the first three quarters of the fiscal year, as well as its strong backlog, AECOM has raised its EPS outlook for fiscal year 2008 to $1.34 to $1.37. This range takes into account an expected $0.01 per share dilution related to the recent Earth Tech acquisition.

Previously, AECOM expected that EPS would be $1.30 to $1.34, which did not include the $0.01 dilution associated with the Earth Tech acquisition.

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. Interested parties can listen to the conference call and view accompanying slides via webcast on the Internet at www.aecom.com. The webcast will be available for replay following the call.

About AECOM

AECOM (NYSE: ACM) is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental and energy. With more than 41,000 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 enhance and sustain the world's built, natural, and social environments. AECOM serves clients in more than 100 countries and had revenue of $4.7 billion during the 12-month period ended June 30, 2008. 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.

NR 08-0802

                     AECOM TECHNOLOGY CORPORATION
             Condensed Consolidated Statements of Income
                (in thousands, except per share data)

                            Three Months Ended    Nine Months Ended
                          --------------------- ---------------------
                          June 30,   June 30,   June 30,   June 30,
                             2008       2007       2008       2007
                          ---------- ---------- ---------- ----------

Revenue                   $1,321,203 $1,100,656 $3,565,574 $3,122,914
 Other direct costs          467,919    456,965  1,285,952  1,386,607
                          ---------- ---------- ---------- ----------
 Revenue, net of other
  direct costs               853,284    643,691  2,279,622  1,736,307
 Cost of revenue, net of
  other direct costs         437,263    331,600  1,167,614    891,926
                          ---------- ---------- ---------- ----------
Gross profit                 416,021    312,091  1,112,008    844,381

Equity in earnings of
 joint ventures                5,313      3,992     12,163      7,628
General and administrative
 expenses                    357,152    270,401    956,498    738,375
                          ---------- ---------- ---------- ----------
 Income from operations       64,182     45,682    167,673    113,634

Minority interest in share
 of earnings                   4,862      3,824     10,939      9,058
Gain on sale of equity
 investment                       --         --         --     11,286
Non-Operating Income             756         --       (872)        --
Interest income (expense)
 - net                          (198)    (6,312)     4,111     (9,615)
                          ---------- ---------- ---------- ----------
 Income before income tax
  expense                     59,878     35,546    159,973    106,247

Income tax expense            21,424     11,360     56,197     35,343
                          ---------- ---------- ---------- ----------
Net income                $   38,454 $   24,186 $  103,776 $   70,904
                          ========== ========== ========== ==========

Net income allocation:
 Preferred stock dividend $       36 $       68 $      131 $      184
 Net income available for
  common stockholders         38,418     24,118    103,645     70,720
                          ---------- ---------- ---------- ----------
 Net income               $   38,454 $   24,186 $  103,776 $   70,904
                          ========== ========== ========== ==========

Net income per share:
 Basic                    $     0.38 $     0.30 $     1.03 $     1.09
                          ========== ========== ========== ==========
 Diluted                  $     0.37 $     0.26 $     1.00 $     0.85
                          ========== ========== ========== ==========

Weighted average shares
 outstanding:
 Basic                       102,020     80,915    100,745     64,948
 Diluted                     104,563     92,037    103,681     83,013
                     AECOM Technology Corporation
               Balance Sheet and Cash Flow Information
                            (in thousands)

                                                  June 30,  September
                                                    2008        30,
                                                               2007
                                                 ---------- ----------

Balance Sheet Information:
 Cash and cash equivalents                       $  173,108 $  216,911
 Working capital                                    461,740    597,655
 Working capital, net of cash and cash
  equivalents                                       288,632    380,744
 Total debt                                          88,840     47,950
 Total stockholders' equity                       1,448,751  1,278,485


                                                   Nine Months Ended
                                                 ---------------------
                                                 June 30,   June 30,
                                                    2008       2007
                                                 ---------- ----------
Cash Flow Information
 Net cash provided by operating activities       $   92,010 $   20,339
                     AECOM TECHNOLOGY CORPORATION
                         Reportable Segments
                           ($ in thousands)

                         Professional Management
                          Technical    Support
                           Services    Services  Corporate   Total
                         ------------ ---------- --------- ----------

Three Months Ended June
 30, 2008:
Revenue                    $1,096,986   $224,217  $     -- $1,321,203
Other direct costs            287,271    180,648        --    467,919
                         ------------ ---------- --------- ----------
Revenue, net of other
 direct costs                 809,715     43,569        --    853,284
Cost of revenue, net of
 other direct costs           411,416     25,847        --    437,263
                         ------------ ---------- --------- ----------
Gross profit                  398,299     17,722        --    416,021
Gross profit as a % of
 revenue                         36.3%       7.9%       --       31.5%
Gross profit as a % of
 revenue, net of other
 direct costs                    49.2%      40.7%       --       48.8%
Equity in earnings of
 joint ventures                 2,922      2,391        --      5,313
General and
 administrative expenses      330,714      9,466    16,972    357,152
Segment income from
 operations                    70,507     10,647   (16,972)    64,182
Segment assets              2,561,708    210,721   148,562  2,920,991

Three Months Ended June
 30, 2007:
Revenue                    $  904,349   $196,307  $     -- $1,100,656
Other direct costs            291,799    165,166        --    456,965
                         ------------ ---------- --------- ----------
Revenue, net of other
 direct costs                 612,550     31,141        --    643,691
Cost of revenue, net of
 other direct costs           312,196     19,404        --    331,600
                         ------------ ---------- --------- ----------
Gross profit                  300,354     11,737        --    312,091
Gross profit as a % of
 revenue                         33.2%       6.0%       --       28.4%
Gross profit as a % of
 revenue, net of other
 direct costs                    49.0%      37.7%       --       48.5%
Equity in earnings of
 joint ventures                 1,064      2,928        --      3,992
General and
 administrative expenses      252,598      5,394    12,409    270,401
Segment income from
 operations                    48,820      9,271   (12,409)    45,682
                     AECOM TECHNOLOGY CORPORATION
                         Reportable Segments
                           ($ in thousands)

                         Professional Management
                          Technical    Support
                           Services    Services  Corporate   Total
                         ------------ ---------- --------- ----------

Nine Months Ended June
 30, 2008:
Revenue                    $2,945,494   $620,080  $     -- $3,565,574
Other direct costs            776,623    509,329        --  1,285,952
                         ------------ ---------- --------- ----------
Revenue, net of other
 direct costs               2,168,871    110,751        --  2,279,622
Cost of revenue, net of
 other direct costs         1,100,597     67,017        --  1,167,614
                         ------------ ---------- --------- ----------
Gross profit                1,068,274     43,734        --  1,112,008
Gross profit as a % of
 revenue                         36.3%       7.1%       --       31.2%
Gross profit as a % of
 revenue, net of other
 direct costs                    49.3%      39.5%       --       48.8%
Equity in earnings of
 joint ventures                 6,630      5,533        --     12,163
General and
 administrative expenses      892,621     21,208    42,669    956,498
Segment income from
 operations                   182,283     28,059   (42,669)   167,673
Segment assets              2,561,708    210,721   148,562  2,920,991

Nine Months Ended June
 30, 2007:
Revenue                    $2,501,436   $621,478  $     -- $3,122,914
Other direct costs            844,980    541,627        --  1,386,607
                         ------------ ---------- --------- ----------
Revenue, net of other
 direct costs               1,656,456     79,851        --  1,736,307
Cost of revenue, net of
 other direct costs           844,771     47,155        --    891,926
                         ------------ ---------- --------- ----------
Gross profit                  811,685     32,696        --    844,381
Gross profit as a % of
 revenue                         32.4%       5.3%       --       27.0%
Gross profit as a % of
 revenue, net of other
 direct costs                    49.0%      40.9%       --       48.6%
Equity in earnings of
 joint ventures                   960      6,668        --      7,628
General and
 administrative expenses      688,541     17,200    32,634    738,375
Segment income from
 operations                   124,104     22,164   (32,634)   113,634

CONTACT: AECOM
Paul Gennaro, 212-973-3167
SVP & Chief Communications Officer
paul.gennaro@aecom.com

SOURCE: AECOM Technology Corporation