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AECOM reports 62 cents EPS, backlog of $16.0 billion for third quarter of fiscal year 2011
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  • Diluted earnings per share for the third quarter increased 11% year over year to 62 cents
  • Net income from continuing operations for the third quarter increased 14% year over year to $74 million
  • Operating income for the third quarter increased 19% year over year to $110 million
  • Revenue, net of other direct costs, for the third quarter increased 24% year over year to $1.3 billion
  • Revenue for the third quarter increased 25% year over year to $2.0 billion
  • Backlog at June 30, 2011, increased 66% year over year to $16.0 billion

LOS ANGELES, Aug 04, 2011 (BUSINESS WIRE) --

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 2011, which ended June 30, 2011.

AECOM reported net income from continuing operations of $74 million for the third quarter, or diluted earnings per share (EPS) of 62 cents. These results represent an increase of 14% over net income of $65 million - and an increase of 11% over diluted EPS of 56 cents - for the same period last year. Operating income for the third quarter increased to $110 million, 19% higher than the same period last year.

AECOM's third-quarter revenue, net of other direct costs, increased to $1.3 billion, 24% higher than the same period last year. Organic revenue, net of other direct costs, increased 4% year over year. Third-quarter gross revenue increased to $2.0 billion, 25% higher than the third quarter of fiscal year 2010.

For year-to-date fiscal year 2011, AECOM reported net income from continuing operations of $188 million and operating income of $288 million, an increase of 11% and 19%, respectively, compared to the same period last year. For year-to-date fiscal year 2011, AECOM reported revenue, net of other direct costs, of $3.8 billion and revenue of $5.9 billion, an increase of 24% and 25%, respectively, compared to the same period last year.

"We had a solid third quarter, posting 11% earnings growth, driven by gains in organic and acquisitive net service revenue," said John M. Dionisio, AECOM president and chief executive officer. "We also recorded $2.7 billion in new wins, up from $2.2 billion in the second quarter, and organic backlog increased 18% year over year, the largest increase in over two years.

"Organic growth in the third quarter was led by strong results in Australia, Asia, and the Middle East. AECOM's expanding presence in these high-growth markets, in combination with our integrated platform, position us to capitalize on the full scope of infrastructure opportunities around the world."

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 2011, the PTS segment reported revenue of $1.8 billion and operating income of $115 million, compared to revenue of $1.3 billion and operating income of $108 million for the same period during fiscal year 2010. This represents a 33% increase in revenue and a 6% increase in operating income year over year. PTS revenue, net of other direct costs, increased 21% year over year to $1.2 billion.

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 2011, the MSS segment reported gross revenue of $274 million and revenue, net of other direct costs, of $144 million, compared to revenue of $297 million, and revenue, net of other direct costs, of $98 million for the same period during fiscal year 2010. This represents an 8% decrease in revenue contrasted by a 48% increase in revenue, net of other direct costs, highlighting a change in the mix of the business. In addition, the MSS segment reported operating income of $19 million compared to $13 million for the same period during fiscal year 2010, which represents a 48% year-over-year increase.

Backlog

AECOM announced backlog totaling $16.0 billion at June 30, 2011, a 66% increase year over year. Organically, backlog increased by 18% year over year.

Balance Sheet

At June 30, 2011, the company had $381 million of total cash and cash equivalents, $1.2 billion of debt and $600 million in committed bank facilities with $293 million in unused capacity. Subsequent to the close of the quarter, the company announced a new 5-year revolving credit facility agreement with total borrowing capacity of $1.05 billion.

"We are pleased to have closed our new revolving credit facility, which substantially increases our borrowing capacity on more favorable terms," said Michael S. Burke, AECOM executive vice president and chief financial officer. "We believe this demonstrates the credit market's confidence in our financial strength and provides us with increased financial flexibility to execute on our growth strategy."

Outlook

"Improvements in organic growth and a significant increase in new wins and backlog during the third quarter give us confidence in our long-term earnings growth target of 15%," Burke said. "However, continued challenges in our Western European business have led us to evaluate actions to reduce our cost structure, which may negatively impact our earnings by approximately $0.05 in the fourth quarter." As a result, AECOM's EPS outlook for fiscal year 2011 is $2.30-$2.35.

AECOM is hosting a conference call today at 11 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 1-866-271-6130 or 1-617-213-8894 and entering the passcode 36315172.

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 approximately 125 countries and had revenue of $7.7 billion during the 12 months ended June 30, 2011. 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 11-0801

AECOM Technology Corporation

Condensed Consolidated Statement of Income
(in thousands, except per share data)
Three Months Ended Nine Months Ended
June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
Revenue $ 2,046,725 $ 1,635,183 $ 5,919,329 $ 4,717,133
Other direct costs 732,599 572,519 2,098,027 1,640,279
Revenue, net of other direct costs (non-GAAP) 1,314,126 1,062,664 3,821,302 3,076,854
Cost of revenue, net of other direct costs 1,192,887 947,599 3,494,993 2,770,917
Gross profit 121,239 115,065 326,309 305,937
Equity in earnings of joint ventures 12,248 5,941 31,675 13,770
General and administrative expenses 23,560 28,327 70,430 78,090
Income from operations 109,927 92,679 287,554 241,617
Other income (expense) (1,585 ) (253 ) 2,159 3,280
Interest expense, net (10,452 ) (1,126 ) (30,338 ) (4,486 )
Income from continuing operations
before income tax expense
97,890 91,300 259,375 240,411
Income tax expense 23,959 22,665 63,701 60,178
Income from continuing operations 73,931 68,635 195,674 180,233
Discontinued operations, net of tax - - - (77 )
Net income 73,931 68,635 195,674 180,156
Noncontrolling interest in income of consolidated
subsidiaries, net of tax (97 ) (3,793 ) (7,257 ) (11,043 )
Net income attributable to AECOM $ 73,834 $ 64,842 $ 188,417 $ 169,113
Net income allocation:
Preferred stock dividend $ - $ 34 $ 2 $ 104
Net income available for common stockholders 73,834 64,808 188,415 169,009
Net income attributable to AECOM $ 73,834 $ 64,842 $ 188,417 $ 169,113
Net income attributable to AECOM per share:
Basic
Continuing operations $ 0.63 $ 0.57 $ 1.60 $ 1.49
Discontinued operations - - - (0.01 )
$ 0.63 $ 0.57 $ 1.60 $ 1.48
Diluted
Continuing operations $ 0.62 $ 0.56 $ 1.59 $ 1.47
Discontinued operations - - - -
$ 0.62 $ 0.56 $ 1.59 $ 1.47
Weighted average shares outstanding:
Basic 117,932 114,539 117,739 113,831
Diluted 118,907 115,620 118,767 115,054
AECOM Technology Corporation
Balance Sheet and Cash Flow Information
(in thousands)
June 30, 2011 September 30, 2010
Balance Sheet Information:
Cash and cash equivalents $ 381,467 $ 612,857
Working capital 1,274,152 1,094,239
Working capital, net of cash and cash equivalents 892,685 481,382
Total debt 1,195,991 931,127
Total assets 5,886,631 5,242,909
Total stockholders' equity 2,481,310 2,090,012
Nine Months Ended
June 30, 2011 June 30, 2010
Cash Flow Information:
Net cash provided by (used in) operating activities* $ (130,124 ) $ 43,749

* June 30, 2011 amount includes deferred compensation plan termination ($90) million and associated excess tax benefits ($58) million.

AECOM Technology Corporation
Reportable Segments
(in thousands)
Professional Management
Technical Support
Services Services Corporate Total
Three Months Ended June 30, 2011
Revenue $ 1,772,831 $ 273,894 $ - $ 2,046,725
Other direct costs 603,050 129,549 - 732,599
Revenue, net of other direct costs (non-GAAP) 1,169,781 144,345 - 1,314,126
Cost of revenue, net of other direct costs 1,059,503 133,384 - 1,192,887
Gross profit 110,278 10,961 - 121,239
Equity in earnings of joint ventures 4,263 7,985 - 12,248
General and administrative expenses - - 23,560 23,560
Income from operations $ 114,541 $ 18,946 $ (23,560 ) $ 109,927
Gross profit as a % of revenue 6.2 % 4.0 % - 5.9 %
Gross profit as a % of revenue, net of other direct costs (non-GAAP) 9.4 % 7.6 % - 9.2 %
Three Months Ended June 30, 2010
Revenue $ 1,337,803 $ 297,380 $ - $ 1,635,183
Other direct costs 372,683 199,836 - 572,519
Revenue, net of other direct costs (non-GAAP) 965,120 97,544 - 1,062,664
Cost of revenue, net of other direct costs 859,187 88,412 - 947,599
Gross profit 105,933 9,132 - 115,065
Equity in earnings of joint ventures 2,237 3,704 - 5,941
General and administrative expenses - - 28,327 28,327
Income from operations $ 108,170 $ 12,836 $ (28,327 ) $ 92,679
Gross profit as a % of revenue 7.9 % 3.1 % - 7.0 %
Gross profit as a % of revenue, net of other direct costs (non-GAAP) 11.0 % 9.4 % - 10.8 %
AECOM Technology Corporation
Reportable Segments
(in thousands)
Professional Management
Technical Support
Services Services Corporate Total
Nine Months Ended June 30, 2011
Revenue $ 4,994,235 $ 925,094 $ - $ 5,919,329
Other direct costs 1,594,891 503,136 - 2,098,027
Revenue, net of other direct costs (non-GAAP) 3,399,344 421,958 - 3,821,302
Cost of revenue, net of other direct costs 3,111,774 383,219 - 3,494,993
Gross profit 287,570 38,739 - 326,309
Equity in earnings of joint ventures 10,392 21,283 - 31,675
General and administrative expenses - - 70,430 70,430
Income from operations $ 297,962 $ 60,022 $ (70,430 ) $ 287,554
Gross profit as a % of revenue 5.8 % 4.2 % - 5.5 %
Gross profit as a % of revenue, net of other direct costs (non-GAAP) 8.5 % 9.2 % - 8.5 %
Contracted backlog $ 7,900,596 $ 1,145,472 $ - $ 9,046,068
Awarded backlog 5,471,906 1,518,720 - 6,990,626
Total backlog $ 13,372,502 $ 2,664,192 $ - $ 16,036,694
Nine Months Ended June 30, 2010
Revenue $ 3,859,190 $ 857,943 $ - $ 4,717,133
Other direct costs 1,044,232 596,047 - 1,640,279
Revenue, net of other direct costs (non-GAAP) 2,814,958 261,896 - 3,076,854
Cost of revenue, net of other direct costs 2,541,919 228,998 - 2,770,917
Gross profit 273,039 32,898 - 305,937
Equity in earnings of joint ventures 6,527 7,243 - 13,770
General and administrative expenses - - 78,090 78,090
Income from operations $ 279,566 $ 40,141 $ (78,090 ) $ 241,617
Gross profit as a % of revenue 7.1 % 3.8 % - 6.5 %
Gross profit as a % of revenue, net of other direct costs (non-GAAP) 9.7 % 12.6 % - 9.9 %
Contracted backlog $ 4,973,783 $ 506,293 $ - $ 5,480,076
Awarded backlog 3,342,961 838,873 - 4,181,834
Total backlog $ 8,316,744 $ 1,345,166 $ - $ 9,661,910

AECOM Technology Corporation

Regulation G Information
(in millions)

Reconciliation of Revenue to Revenue, Net of Other Direct Costs

Three Months Ended Nine Months Ended
June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010

Consolidated

Revenue $ 2,046.7 $ 1,635.1 $ 5,919.3 $ 4,717.1
Less: Other direct costs 732.6 572.4 2,098.0 1,640.2
Revenue, net of other direct costs $ 1,314.1 $ 1,062.7 $ 3,821.3 $ 3,076.9

PTS Segment

Revenue

$ 1,772.8 $ 1,337.8 $ 4,994.2 $ 3,859.2
Less: Other direct costs 603.0 372.7 1,594.9 1,044.2
Revenue, net of other direct costs $ 1,169.8 $ 965.1 $ 3,399.3 $ 2,815.0

MSS Segment

Revenue $ 273.9 $ 297.3 $ 925.1 $ 857.9
Less: Other direct costs 129.6 199.7 503.1 596.0
Revenue, net of other direct costs $ 144.3 $ 97.6 $ 422.0 $ 261.9

Reconciliation of EBITDA to Net Income Attributable to AECOM

Three Months Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2011 2011 2010 2010 2010 2010 2009 2009
EBITDA $ 136.2 $ 114.3 $ 117.1 $ 125.8 $ 105.9 $ 100.3 $ 85.5 $ 99.8
Less: Interest (income) / expense 10.4 10.0 9.9 5.3 1.2 2.4 1.0 2.5
Less: Depreciation and amortization 28.0 27.4 29.8 21.2 17.2 18.2 22.3 23.3

Income from continuing operations attributable to

AECOM before income taxes

97.8 76.9 77.4 99.3 87.5 79.7 62.2 74.0
Less: Income tax expense 24.0 19.2 20.5 31.5 22.7 21.0 16.5 19.9
Income from continuing operations attributable to AECOM 73.8 57.7 56.9 67.8 64.8 58.7 45.7 54.1
Discontinued operations, net of tax - - - - - (0.2 ) 0.1 0.2
Net income attributable to AECOM $ 73.8 $ 57.7 $ 56.9 $ 67.8 $ 64.8 $ 58.5 $ 45.8 $ 54.3
Fiscal Years Ended
2010 2009 2008 2007
EBITDA $ 417.5 $ 358.5 $ 284.5 $ 195.9
Less: Interest (income) / expense 9.9 10.7 (1.3 ) 3.3
Less: Depreciation and amortization 78.9 84.1 62.8 45.1
Income from continuing operations attributable to AECOM before income taxes 328.7 263.7 223.0 147.5
Less: Income tax expense 91.7 77.0 76.5 47.2
Income from continuing operations attributable to AECOM 237.0 186.7 146.5 100.3
Discontinued operations, net of tax (0.1 ) 3.0 0.7 -
Net income attributable to AECOM $ 236.9 $ 189.7 $ 147.2 $ 100.3

SOURCE: AECOM Technology Corporation

AECOM Technology Corporation
Paul Gennaro, 212-973-3167
SVP & Chief Communications Officer
Paul.Gennaro@aecom.com