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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): December 10, 2019 (December 10, 2019)

 

AECOM

(Exact name of Registrant as specified in its charter)

 

 

Delaware   0-52423   61-1088522
(State or Other Jurisdiction   (Commission   (I.R.S. Employer
of Incorporation)   File Number)   Identification No.)

 

1999 Avenue of the Stars, Suite 2600

Los Angeles, California 90067

(Address of Principal Executive Offices, including Zip Code)

 

Registrant’s telephone number, including area code  (213) 593-8000

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.01 par value   ACM   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ¨

 

 

 

 

 

Item 7.01. Regulation FD Disclosure.

 

A copy of materials presented at AECOM’s Investor Day on December 10, 2019, is attached to this Current Report on Form 8-K as Exhibits 99.1 and 99.2. These materials are dated December 10, 2019 and the Company disclaims any obligation to correct or update these materials in the future.

 

The information contained in this Current Report Form 8-K that is furnished under this Item 7.01 is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.  Description
    
99.1  Press release dated December 10, 2019.
    
99.2  Investor presentation dated December 10, 2019.
    
104  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.

 

  AECOM
   
   
Dated:  December 10, 2019 By: /s/ David Y. Gan
    David Y. Gan
    Executive Vice President, Chief Legal Officer

 

 

 

 

Exhibit 99.1

 

 

 

Press Release

 

Investor Contact:
Will Gabrielski

Vice President, Investor Relations

213.593.8208

William.Gabrielski@aecom.com

Media Contact:
Brendan Ranson-Walsh

Vice President, Global Communications & Corporate Responsibility

213.996.2367

Brendan.Ranson-Walsh@aecom.com

 

AECOM unveils fiscal 2021 and long-term financial targets for its Professional Services business at 2020 Investor Day

 

LOS ANGELES (December 10, 2019) — AECOM (NYSE:ACM), the world’s premier infrastructure firm, will hold its Investor Day in New York City today at which the Company will affirm its commitment to a strategic transformation into a higher-returning and lower-risk Professional Services business, unveil fiscal 2021 financial guidance, and lay the foundation to achieve industry-leading long-term financial targets. The strategic transformation and financial objectives build on the momentum in AECOM’s fiscal 2019 performance, and the continued commitment to investing in the industry’s brightest people, advancing innovations to solve clients’ most complex challenges and delivering superior financial performance.

 

AECOM is reiterating its financial targets for fiscal 2020, including a plan to achieve 12% adjusted EBITDA1 growth in its pro forma Professional Services2 business. The Company is also initiating 2021 guidance for pro forma Professional Services2 adjusted EBITDA1 of $825 million to $865 million, which would reflect 14% year-over-year adjusted EBITDA1 growth at the mid-point of the range. This forecast is supported by expected low-to-mid single digit organic revenue and net service revenue (NSR)3 growth including expected double-digit growth in the Construction Management business, the annualized benefit of restructuring actions taken in fiscal 2020, and ongoing efforts to further enhance profitability. Achievement of this plan would result in industry-leading margins and a substantial increase in return on invested capital (ROIC)4.

 

AECOM is also setting long-term financial targets that challenge the Company to continue to pursue a best-in-class cost structure while investing in higher-returning businesses, markets and innovation. On an NSR3 basis, the Company is targeting a long-term adjusted operating margin1 of greater than 15% for the DCS and Construction Management businesses combined, and enterprise ROIC4 of greater than 15%, both of which would exceed the industry. The Company also expects to continue to deliver industry-leading cash flow, including unlevered free cash flow conversion5 of at least 75% of adjusted EBITDA in the pro forma Professional Services2 business on a normalized6 basis.

 

Accordingly, AECOM’s pro forma Professional Services2 financial targets include the following:

 

    FY’20E    FY’21E    Long-Term
Target
 
Adjusted Operating Margin1 (NSR3, including DCS and Construction Management)   ~11.7%    12.9 - 13.4%    15%+ 
Adjusted EBITDA1 (millions)   $720 - $760    $825 - $865    -- 
Normalized6 Unlevered Free Cash Flow Conversion5   75%+    75%+    75%+ 
Return on Invested Capital (ROIC)4   --    --    15%+ 

 

In addition to the above financial targets for AECOM’s pro forma Professional Services2, the Company also reiterated its guidance for fiscal 2020 enterprise adjusted EBITDA1 of between $1,040 and $1,080 million. Reflecting timing-related sources and uses of cash flow resulting from the timing of the sale of the Management Services business, the Company expects fiscal 2020 free cash flow7 to be between $100 and $300 million. Importantly, as noted above, on a normalized6 basis, unlevered free cash flow conversion5 is expected to be greater than 75% of pro forma Professional Services2 adjusted EBITDA1.

 

“Our strong execution in fiscal 2019 demonstrates the commitment of our people to deliver on key financial and strategic objectives,” said Mike Burke, AECOM’s chairman and chief executive officer. “The organization is energized by the many successes we had in fiscal 2019 and to deliver on our longer-term targets.”

 

1

 

 

“Our many successes in fiscal 2019, including delivering 25% adjusted EBITDA1 growth, record DCS adjusted operating margins and 19% backlog growth in our Professional Services business, provide us tremendous momentum towards achieving our financial targets,” said W. Troy Rudd, AECOM’s chief financial officer. “The Management Services sale is expected to close in the fiscal second quarter, which will result in a transformed balance sheet and capital for share repurchases under our existing $1 billion Board authorization. We are focused on delivering against our strategic and financial commitments, and we are challenging the organization to achieve our long-term financial targets through the execution of our strategy and continued innovation.”

 

A live webcast of today’s Investor Day will begin at 10 a.m. Eastern Time. The webcast and accompanying presentation slides are available online at https://investors.aecom.com. The webcast will be available for replay following the meeting.

 

1 Excludes the impact of non-operating items, such as acquisition and integration-related items, transaction-related expenses and restructuring costs and other items. See Regulation G Information for a complete reconciliation of Non-GAAP measures.

 

2 A non-GAAP measure comprised of the Company’s Design & Consulting Services, Construction Management and AECOM Capital businesses, and excludes expected stranded costs associated with planned separations and divestitures that are expected to be eliminated.

 

3 Revenue, net of subcontract costs.

 

4 Return on invested capital, or ROIC, is calculated as the sum of adjusted net income as presented in the Company’s Regulation G Information and interest expense, net of interest income, divided by invested capital as defined as the sum of attributable shareholder’s equity and total debt, less cash and cash equivalents.

 

5 Unlevered free cash flow is derived by adding back after-tax adjusted interest expense at a 25% tax rate and is after distributions to non-controlling interests.

 

6 Normalized unlevered free cash flow excludes unusual events, such as transformational restructuring and other factors that are expected to impact free cash flow in fiscal 2020.

 

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

 

About AECOM

 

AECOM (NYSE:ACM) is the world’s premier infrastructure firm, delivering professional services across the project lifecycle – from planning, design and engineering to consulting and construction management. We partner with our clients in the public and private sectors to solve their most complex challenges and build legacies for generations to come. On projects spanning transportation, buildings, water, governments, energy and the environment, our teams are driven by a common purpose to deliver a better world. AECOM is a Fortune 500 firm with revenue of approximately $20.2 billion during fiscal year 2019. See how we deliver what others can only imagine at aecom.com and @AECOM.

 

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, revenue, operating income, EBITDA, cash flows, tax rate, return on invested capital or other financial items, any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, exposure to self-perform at-risk construction, risk profile and investment strategies, any statements regarding future economic conditions or performance and any statements with respect to the proposed sale of the Management Services business.

 

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 our forward-looking statements include, but are not limited to, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; long-term government contracts and subject to uncertainties related to government contract appropriations; government shutdowns; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; failure to comply with business laws and regulations; maintaining adequate surety and financial capacity; high leveraged and potential inability to service our debt and guarantees; exposure to Brexit and tariffs; exposure to political and economic risks in different countries; currency exchange rate fluctuations; retaining and recruiting key technical and management personnel; legal claims; inadequate insurance coverage; environmental law compliance and adequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; AECOM Capital real estate development projects; managing pension cost; cybersecurity issues, IT outages and data privacy; uncertainties as to the timing and completion of the proposed sale of our Management Services business or whether it will be completed; risks associated with the impact or terms of the proposed sale; risks associated with the benefits and costs of the proposed sale of our Management Services business, including the risk that the expected benefits of the proposed sale or any contingent purchase price will not be realized within the expected time frame, in full or at all, and the risk that conditions to the proposed sale will not be satisfied and/or that the proposed sale will not be completed within the expected time frame, on the expected terms or at all; the risk that any consents or regulatory or other approvals required in connection with the proposed sale of our Management Services business will not be received or obtained within the expected time frame, on the expected terms or at all; the risk that the financing intended to fund the proposed sale of our Management Services business may not be obtained; the risk that costs of restructuring transactions and other costs incurred in connection with the proposed sale of our Management Services business will exceed our estimates or otherwise adversely affect our business or operations; the impact of the proposed sale of our Management Services business on our businesses and the risk that consummating the proposed sale may be more difficult, time-consuming or costly than expected; as well as other additional risks and factors that could cause actual results to differ materially from our forward-looking statements 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.

 

2

 

 

This press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe that non-GAAP financial measures such as adjusted EBITDA, adjusted operating income, return on invested capital, net service revenue, and pro forma Professional Services provide a meaningful perspective on our business results as we utilize this information to evaluate and manage our business. For example, we use adjusted EBITDA and operating income to exclude the impact of non-operating items, such as acquisition and integration expenses and non-core operating losses to aid investors in better understanding our core performance results. Our non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies

 

Our presentation of pro forma Professional Services metrics includes the results of the DCS, Construction Management and AECOM Capital businesses, and excludes the Management Services business and at-risk, self-perform businesses within the Construction Services segment, which the Company intends to divest. Pro forma Professional Services also excludes expected stranded costs associated with planned separations and divestitures that are expected to be eliminated. The pro forma Professional Services metrics reflect our current estimates based on information available as of this release. The pro forma Professional Services financial metrics may differ materially from the presented amounts due to future dispositions or divestures of our Management Service business and our at-risk, self-perform construction businesses and other unexpected developments or adjustments that may arise. We believe this information helps provide additional insight into the underlying trends of our business when comparing current performance against prior periods and the expected impact of the future dispositions or divestures of our Management Service business and our at-risk, self-perform construction businesses.

 

When we provide our long term projections for pro forma Professional Services, adjusted operating income, net service revenue, adjusted EBITDA, normalized free cash flow and return on invested capital on a forward-looking basis, the closest corresponding GAAP measure and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally is not available without unreasonable effort due to the length, high variability, complexity and low visibility associated with the non-GAAP expectation projected against the multi-year forecast which could significantly impact the GAAP measure.

 

3

 

 

AECOM

Regulation G Information

(in millions, except per share data)

 

Reconciliation of Net Income Attributable to AECOM to EBITDA, Adjusted EBITDA and Pro Forma Professional Services Adjusted EBITDA

 

   Twelve Months Ended 
   Sep 30,
2018
   Sep 30,
2019
 
Net income (loss) attributable to AECOM  $136.5   $(261.1)
Income tax expense (benefit)   (19.6)   (0.1)
Income (loss) attributable to AECOM before income taxes   116.9    (261.2)
Depreciation and amortization expense1   281.0    292.1 
Interest income2   (9.6)   (12.4)
Interest expense3   249.4    215.2 
EBITDA   637.7    233.7 
Noncore operating losses & transaction related expenses   57.4    35.8 
Impairment of long-lived assets, including goodwill   168.2    615.4 
Acquisition and integration-related items   (10.9)   (15.3)
Restructuring costs   -    95.4 
Loss on disposal activities   2.9    10.4 
FX gain from forward currency contract   (9.1)   - 
Depreciation expense included in noncore operating losses and acquisition and integration-related items   (9.7)   (27.8)
Adjusted EBITDA   836.5    947.6 
MS & at-risk, self-perform construction   308.8    286.1 
Pro forma Professional Services adjusted EBITDA  $527.7   $661.5 

 

Reconciliation of Segment Income from Operations to Adjusted Income from Operations

 

   Twelve Months Ended 
   Sep 30,
2018
   Sep 30,
2019
 
Design & Consulting Services Segment:          
Income from operations  $455.1   $552.3 
Noncore operating losses & transaction related expenses   2.8    (3.9)
Impairment of long-lived assets, including goodwill   -    15.2 
Gain on disposal activities   -    (3.6)
Amortization of intangible assets   24.6    24.1 
Adjusted income from operations  $482.5   $584.1 

 

4

 

Exhibit 99.2

 

AECOM Investor 2020 Day BOSTON LOGAN INTERNATIONAL AIRPORT United States Serving several design and construction management roles across the 18th busiest airport in the United States. 2020 Investor Day

 

 
 

 

Disclosures Safe Harbor Except for historical information contained herein, this presentation contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, financial and business projections, including but not limited to revenue, earnings, operating and free cash flows, stock repurchases; cost savings, proposed sale of the Management Services business; pro forma results of the Professional Services business; self-perform at-risk construction exposure; real estate; any statements of the plans, strategies and objectives for future operation profitability, risk profile and investment strategies; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and other similar words. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this presentation. 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, among others, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; dependence on long-term government contracts and uncertainties related to government contract appropriations; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; unexpected government shutdowns and impacts caused by Brexit or tariffs; 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 applicable to our business; maintain adequate surety and financial capacity; our leveraged position and ability to service our debt and guarantees; exposure to legal, political and economic risks in different countries as well as currency exchange rate fluctuations; retaining and recruiting key technical and management personnel; legal claims and inadequate insurance coverage; environmental law compliance and adequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; risks and costs associated with the sale of the Management Services business; dependence on partners and third parties who fail to satisfy their obligations; AECOM Capital Real Estate development projects; managing pension costs and cybersecurity, IT outages and data privacy; and changing client demands, fiscal positions and payments. Additional factors that could cause actual res ults to differ materially from our forward-looking statements are set forth in our most recent periodic report (Form 10-K or Form 10-Q) filed and our other filings with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statement. Non-GAAP Measures This presentation contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe that non-GAAP financial measures such as adjusted EBITDA, adjusted operating income, return on invested capital, net service revenue and free cash flow provide a meaningful perspective on our business results as we utilize this information to evaluate and manage our business. For example, we use adjusted EBITDA and operating income to exclude the impact of non-operating items, such as acquisition and integration expenses, and non-core operating losses to aid investors in better understanding our core performance results. We use free cash flow to represent the cash generated after capital expenditures to maintain our business. Our non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is found in the attached appendix and in our earnings release on the Investors section of our Web site at: http://investors.aecom.com. When we provide our long term projections for pro forma Professional Services; adjusted EBITDA, free cash flow, return on invested capital pro forma results assuming the sale of the Management Services business and the exit of at-risk, self-perform construction businesses; and free cash flow on a forward-looking basis, the closest corresponding GAAP measure and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally is not available without unreasonable effort due to the length, high variability, complexity and low visibility associated with the non-GAAP expectation projected against the multi-year forecast which could significantly impact the GAAP measure. Our presentation of pro forma Professional Services metrics includes the results of the DCS, Construction Management and AECOM Capital businesses, and excludes the Management Services business and at-risk, self-perform businesses within the Construction Services segment, which the Company intends to divest. Pro forma Professional Services also excludes expected stranded costs associated with planned separations and divestitures that are expected to be eliminated. The pro forma Professional Services metrics reflect our current estimates based on information available as of this presentation. The pro forma Professional Services financial metrics may differ materially from the presented amounts due to expected dispositions or divestures of our Management Service business and our at-risk, self-perform construction businesses and other unexpected developments or adjustments that may arise. We believe this information helps provide additional insight into the underlying trends of our business when comparing current performance against prior periods and the impact of expected dispositions or divestures of our Management Service business and our at-risk, self-perform construction businesses. 2020 Investor Day Page 1

 

 
 

 

Today’s Agenda 2020 Investor Day Page 2 Speaker Subject Mike Burke Chairman & Chief Executive Officer –Introductions and Safe Harbor Statement –Key Messages –Executing on Our Commitments –Positioned for a Strong Future Lara Poloni Chief Executive, EMEA –Business Overview –Capitalizing on Our Strengths Steve Morriss Group President – Design & Consulting Services, Americas –Business Overview –Capitalizing on Our Strengths Troy Rudd Chief Financial Officer –Professional Services Overview –FY’21 Financial Outlook and Long-Term Financial Targets –Cash Flow Detail and Capital Allocation Priorities –Closing Comments All –Q&A

 

 
 

 

Michael S. Burke Chairman Chief Executive Officer 2020 Investor Day

 

 
 

 

Key Messages from Today: Delivering on Our Transformation EXECUTING ON OUR STRATEGIC AND FINANCIAL COMMITMENTS Delivered 13% adjusted EBITDA1 growth, a near-record backlog and record-high DCS margins, and our Professional Services business2 had even stronger 25% adjusted EBITDA1 growth and 19% backlog growth TRANSFORMING INTO A FOCUSED, HIGHER-VALUE PROFESSIONAL SERVICES FIRM We have taken and continue to take several strategic actions to transform into a higher-returning and lower-risk Professional Services business EXTENDING OUR LEADERSHIP POSITION WITH INNOVATION AND TECHNOLOGY Through innovation, technology, our unrivaled scale and depth of expertise, we are shaping how our clients solve their most complex challenges and growing our market share SETTING AMBITIOUS TARGETS TO LEAD OUR INDUSTRY We are focused on achieving industry-leading margins, ROIC3 and free cash flow4 conversion by executing on our strategic and financial objectives MAXIMIZING SHAREHOLDER VALUE Announced sale of the Management Services business at a premium valuation, which accelerates our balance sheet transformation and planned stock repurchases under our remaining $760 million Board authorization 2020 Investor Day Page 4

 

 
 

 

Executing on Our Strategic & Financial Commitments WHAT WE SAID WE WOULD DO WHAT WE’ VE DONE Exceeded our expectations on nearly every metric in FY’19, including 13% adjusted EBITDA1 growth, record free cash flow4 in the fourth quarter and near-record wins and backlog ACHIEVE OUR FY’19 FINANCIAL TARGETS EXECUTE STRATEGIC ACTIONS TO DE-RISK AND NARROW OUR FOCUS Executed a series of initiatives to transform AECOM into a more focused and profitable enterprise, including a substantial reduction in G&A, our extraction from lower-returning businesses and the planned exit of more than 30 countries Delivered all-time high DCS adjusted operating margins1 in Q4’19 and FY’19, inspiring confidence in our FY’20 margin targets and our pursuit of long-term financial targets to lead our industry SUBSTANTIALLY INCREASE OUR MARGINS UNLOCK SIGNIFICANT SHAREHOLDER VALUE Announced an agreement to sell the Management Services business at a premium valuation, positioning us to transform our balance sheet Executed stock repurchases and debt reduction; expect to execute additional debt reduction and stock repurchases with MS sale proceeds and substantially all future free cash flow4 FOCUS CAPITAL ALLOCATION 2020 Investor Day Page 5

 

 
 

 

Transformation into a Professional Services Business ✓ Being a leading Professional Services company led by investments in the industry’s brightest people and innovations that shape how our clients solve their most complex and critical challenges × Provide all services to all clients in all markets × Focus on growth at capital the expense of returns on ✓ Operating a higher-returning and lower-risk professional services company with industry-leading margins and ROIC3 × Expose the company to asymmetric risk-reward profiles in higher-risk projects or markets ✓ Maintaining a high-quality balance sheet and generating consistently strong cash flow ✓ Delivering substantial shareholder value by executing our capital allocation policy, including returning substantially all cash flow to investors 2020 Investor Day Page 6 A S A P R O F E S S I O N A L S E R V I C E S B U S I N E S S , A E C O MI S B U I LT F O R S U C C E S S WE WILL NOT… WE ARE FOCUSED ON…

 

 
 

 

AECOM Value Proposition ✓ We will complete our transformation into a Professional Services company before the end of FY’20, resulting in a higher-returning, lower-risk, highly-diverse business with a proven ability to grow through economic cycles ✓ Consistently strong cash flow profile with high-quality public and private sector clients ✓ Focused investments in people and innovation to fully leverage our scale to expand our competitive advantages and build an enduring leadership position ✓ Capital allocation policy focused on organic investments while returning substantially all free cash flow to shareholders through debt reduction and stock repurchases 2020 Investor Day Page 7

 

 
 

 

Lara Poloni Chief Executive – EMEA 2020 Investor Day

 

 
 

 

DCS International Overview KEY BUSINESS HIGHLIGHTS: • World-class design and program management capabilities Diverse Client Base Public-Sector Private-Sector 48% 52% (% of DCS International FY’19 NSR ) 5 • Leaders in our largest markets, led by the U.K., Australia-New Zealand, Hong Kong and the Middle East • Bringing the full breadth of our capabilities creates a competitive advantage on major pursuits, including mega city development 7% Facilities Transportation Environment & Water Power / Industrial Attractive End Market Mix (% of DCS International FY’19 NSR5) 20% 40% • Narrowing focus on higher-returning and lower-risk end markets and countries where the risk-reward and long-term growth opportunities align with our strategic and financial priorities 33% 16% U.K. & Ireland Australia-New Zealand Hong Kong Middle East Continental Europe Other 26% Diverse Geographic Exposure (% of DCS International FY’19 NSR5) • Focusing business development spend and capital deployment on greatest opportunities 15% 19% 17% 2020 Investor Day Page 9

 

 
 

 

Key International Market Trends as public infrastructure investment with developing position in growth decommissioning, including 2020 Investor Day Page 10 AUSTRALIA + NEW ZEALAND Market has experienced steady growth over the past several years has increased. Strong position in core markets markets such as environment PFAS. HONG KONG The continuing political turmoil in Hong Kong has resulted in a slow down in the economy; however AECOM continues to work on key projects and build on our position as the leading designer and project management consultancy in the region. MIDDLE EAST AECOM continues to lead the market, winning project management opportunities on mega projects and key infrastructure projects across the region. Saudi Crown Price committed to implementation of Vision 2030. UK + IRELAND Brexit has been delayed until at least January. Monitoring macroeconomic environment to ensure resilience across a range of potential outcomes. U.K. government is committed to growth, prioritizing infrastructure investments to combat uncertainty. Our leading position allows us to capitalize on opportunities.

 

 
 

 

Strategic Initiatives to Drive the International Business AUSTRALIA-NEW ZEALAND • Substantially restructured the business following the decline in natural resources investment activity, contributing to an 80% increase in profit since FY’16 Contracted backlog up nearly 40% since FY’16, with key wins in place to sustain momentum • U.K., IRELAND AND CONTINENTAL EUROPE Perth Stadium Railway Station - Australia • • Substantially reduced G&A, resulting in improved FY’19 profitability and expected double-digit profit growth in FY’20 Invested in key hires to expand client and partner relationships; secured 259 positions on Frameworks, positioning us well for the recovery Consolidating operating footprint to increase focus on core services, clients and markets • MIDDLE EAST Crossrail Longon – U.K. • • Selective pursuit and client strategy, with a focus on PMOs for rapid growth Flexible talent acquisition strategy while continuing to monitor geopolitical context and manage risk exposure HONG KONG • • • Long-term fundamental drivers are intact, though continually assessing changing geopolitical landscape Dominant market position, with key positions on iconic infrastructure projects that have built our resume globally Positioned to manage through short-term economic issues and capitalize on the long-term investment plans Hong Kong West Kowloon Station 2020 Investor Day Page 11 P R O A C T I V ES T E P S T O D E L I V E R I M P R O V E DF I N A N C I A L P E R F O R M A N C E

 

 
 

 

KSA Journey – Key Wins and Opportunities CAPITALIZING $500 BILLION MEGACITY DEVELOPMENT OPPORTUNITY IN NEOM BAY ON A Deployment of world-class experts to support the delivery of key projects Focus on key client relationships Positioning in the market Future opportunities Key wins Partnering with universities to best position for opportunities Selective pursuit and client account management strategy Innovative and flexible talent deployment strategy Awarded several hundred million dollars of wins in FY’19 Focusing on PMOs for rapid growth 2020 Investor Day Page 12

 

 
 

 

Innovating Hand-in-Hand with Our Clients HELPING CLIENT ADDRESS PFAS: MODULAR DELIVERY: • Fully integrated solution: design, engineering, assembly and project delivery • Process for decontaminating sites exposed to per-and polyfluoroalkyl substances (PFAS) • 50% reduction in program time with 95% of build delivered offsite • Large number of sites: airports, fire stations, industrial areas • DE-FLUORO™ technology enables on-site destruction • High-performing, targeting net-zero environmental impact • Economically and environmentally sustainable • Can be fully demounted for reuse or relocation • Well positioned as a leader to capitalize on an estimated more than $100 billion market opportunity expected over the next several decades 2020 Investor Day Page 13

 

 
 

 

Steve Morriss Group President Design & Consulting Services – Americas 2020 Investor Day

 

 
 

 

Design & Consulting Services Americas (DCSA) Overview KEY BUSINESS HIGHLIGHTS: 7% State & Local Governments Federal U.S. Government Private Non-U.S. Government 40% • World-class design and engineering capabilities 30% Client Type (% of DCSA FY’19 NSR5) 23% • Consistently ranked #1 by ENR in key transportation, environmental and facilities markets 3% 19% Transportation Environment Water Facilities Power / Industrial • Broad employee base with skillsets necessary to address a wide array of client needs Attractive End Market Mix (% of DCSA FY’19 NSR5) 39% 19% 20% • Lower-risk, higher-returning business with consistently strong cash flow generation and returns on capital 5% Engineers Consultants & Planners Scientists Designers Digital & Innovation Experts Other Broad Employee Base (% of Client-Facing Employees) • Proven track record of performing across varied economic cycles, supported by a diverse mix of clients and end market exposure 47% 20% 37% 2020 Investor Day Page 15

 

 
 

 

Enhancing Profitability and Positioning for Growth FY’17 – FY’18 FY’19 FY’20+ Driving growth, further enhancing margins Cost reductions to drive Efficiency and client focus margin improvement • Streamline procurement to recognize benefits and savings with existing vendor relationships • Simpler and more client-facing structure to drive efficiency, consistency and client focus • Consolidation from 9 to 5 Regions to further simplify organizational model • Reduction of overhead to drive margins • Driving resourcing strategy to engage in regional work sharing to utilize existing labor capacity and drive NSR growth Increase use of Global Design/Shared Services Centers to realize full margin potential • Restructured Environment Business to align workforce to better service our high-end consulting and major program clients • Evaluated real estate portfolio and engaged in footprint reduction to match needs of business • • Improved project risk management and delivery Increased Utilization Increased Employee Engagement Enhanced Net Promoter Score 2020 Investor Day Page 16

 

 
 

 

FY’19 Performance Reflects Successful Execution of Our Strategy DCSA Contracted Backlog DCSA NTM Revenue % of Contracted Backlog • These efforts have contributed performance in FY’19 to record $7.0 100% 80% $6.0 60% 40% – Substantially improved margins and profitability $5.0 20% $4.0 0% – Record contracted backlog position provides strong visibility into future growth Q4’19 DCS Adj. Operating Margin1 (On an NSR5 basis, including record profitability in the Americas) – Strong cash flow • Expect further margin improvement in FY’20 as we execute additional actions to increase efficiency DCSA Contracted Backlog Growth (as of Q4’19) 2020 Investor Day Page 17 (billions) KEY FY’19 ACCOMPLISHMENTS

 

 
 

 

Strong Trends Across Our Markets TRANSPORTATION • • • Industry-leading position built on delivering our clients’ most complex projects Funding environment buoyed by record state tax revenues and rainy day funds Ongoing client effort to diversify funding sources, as demonstrated by Measure M in Los Angeles and 36 states that have increased gas taxes in the past few years, including five states in 2019 Second Avenue Subway – New York, NY WATER • • • Strong wastewater opportunities, innovating with proprietary solutions (e.g., AGS) Key market drivers include ecosystem restoration, flood prevention, PFAS, and disaster recovery Delivered double-digit revenue growth across our core water markets, as well as double-digit growth in contracted backlog, in FY’19, supporting our expectation for continued growth in FY’20 Gordie Howe Int’l. Bridge – U.S. / Canada ENVIRONMENT • • • Less cyclical regulatory-supported business Restructured environment business to enhance our leadership position and profitability Emerging opportunities include PFAS, where our proprietary DE-FLUOROTM technology creates growth prospects U.S. Virgin Islands Disaster Recovery 2020 Investor Day Page 18 A E C O MIS B U I LT ON A P R O U D L E G A C Y OF L E A D E R S H I P IN O UR C O R E M A R K E T S

 

 
 

 

Investing to Capitalize on Key Market Drivers Delivering Services that Target Core External Themes: Digitization & Technology Integration Aging & Inadequate Infrastructure Urbanization & Shifting Demographics Sustainability Resilience Progressive engagement with key clients in transportation, water, environment and facilities markets Expand Core Business Longer-term differentiation against competitors through expanded technical and Professional Services capabilities New Revenue Streams Serve as a catalyst for city projects with a holistic approach to delivery building upon key relationships and understanding of interagency issues Growth City Emphasis At the heart of our business – world-class capability based on sharing, training and innovating technical excellence Technical Excellence Simple adaptive business models and risk management, efficient and effective systems, resourcing designed to support our clients Smart Operations Leaders and professionals empowered to deliver for clients, serve as the employer of choice in the industry and generate market-leading returns to stockholders Empowered Organization 2020 Investor Day Page 19 OPERATIONAL PILLARS GROWTH PILLARS

 

 
 

 

Innovating Hand-in-Hand with Our Clients REVOLUTIONIZING WASTEWATER TREATMENT PLANTS: AUTOMATED BUS CONSORTIUM: • Through a patent-pending nutrient removal and recovery technology, Aerobic Granular Sludge (AGS), we are developing innovative methods to increase water treatment capacity by 30 – 50% without expanding footprint • A first-of-its-kind effort to create a market for highly-automated large transit vehicles—a national program and coalition of transit and transportation agencies to procure and deploy 75-100 full size, full speed automated buses • With increasing demands for land use, our proprietary solution provides our clients a compelling method for improving water infrastructure and complying with new nutrient removal requirements • Includes participation by nearly a dozen agencies from across the U.S. • Initial scope focused on identifying pilot sites for each participating agency, preparing AV bus specifications and financial plans, conducting stakeholder outreach, and preparing implementation strategies • Substantial market opportunity with more than $30 billion of capex expected globally over the next decade 2020 Investor Day Page 20

 

 
 

 

W. Troy Rudd Chief Financial Officer 2020 Investor Day

 

 
 

 

Strong Professional Services Foundation % of Segment Pro Forma Professional Services2 Adj. Operating Income1 DESIGN & CONSULTING SERVICES ~90% • • Leading engineering and design consulting business #1 rankings in key end markets that are benefitting from durable client funding environments – transportation, environmental and facilities Highly recurring client base and professional services contracting model provides for a low risk profile $740M $662M Double-Digit Adj. EBITDA1 Growth • FY’18 FY’19 FY’20E 11.5%+ 10.3% CONSTRUCTION MANAGEMENT Record DCS Margins (Adj. Operating Income1 / NSR5) ~10% • Premier construction management business with unparalleled resumes in our core markets, led by the New York and Los Angeles metros Highly profitable with low capital intensity, which results in the highest ROIC3 across the enterprise ~4 years of backlog visibility and robust pipeline FY’18 FY’19 FY’20E 15.2% Substantial CM Margin Improvement (Adj. Operating Income1 / NSR5) • • FY’18 FY’19 2020 Investor Day Page 22 11.9% 8.5% $528M OUR FY’19 PRO FORMA PROFESSIONAL SERVICES2 RESULTS PROVIDE SUBSTANTIAL MOMENTUM

 

 
 

 

Robust Backlog Provides Us With Confidence • Professional Services2 backlog increased by 19% to more than $36 billion, providing tremendous long-term visibility $36.5B $30.7B CONSTRUCTION MANAGEMENT • DCS Americas contracted backlog grew 8% year-over-year to an all-time high • Construction Management backlog increased by 45% over the prior year, including large building and aviation wins, and provides nearly four years of revenue visibility DCS APAC DCS EMEA DCS AMERICAS FY’18 FY’19 2020 Investor Day Page 23 56% 7% 5% 32%

 

 
 

 

Ability to Perform Across Economic Cycles AECOM ORGANIC NSR5 GROWTH (2006 – 2011) • Our diversification by client, service and end market results in resiliency during periods of economic weakness 4% – Delivered double-digit NSR5 growth during the global recession (2007 – 2009) 13% – Infrastructure investment is prioritized during periods of economic weakness • Our strategic actions to de-risk the business provides further resiliency to cyclicality • Our substantial backlog – with more than 2 years of revenue – and our delevered balance sheet further positions us to deliver through varied economic cycles 2006 2007 2008 2009 2010 2011 2020 Investor Day Page 24 14% 10% 4%

 

 
 

 

We Have Substantially Increased Our Profitability WE HAVE DELIVERED A STEP CHANGE IN OUR MARGINS: RESULTING IN INDUSTRY-LEADING MARGINS: 12.9% - 13.4% Simplified operating structure to reduce G&A ~12.0% Shrinking real estate portfolio to align with business transformation Rationalizing geographic footprint Concentrating investments in our highest-returning opportunities FY’18 FY’19 FY’20E FY’21E Peer Margin Targets6 Pro Forma Professional Services2 (DCS+CM) Segment Level Adjusted EBITA1 / NSR5 Margins Leveraging scale by increasing utilization of our best-cost shared services and design centers to more efficiently deliver our work FY’15 Real Estate Square Footage FY’20E Real Estate Square Footage 2020 Investor Day Page 25 E X P E C T TO A C H I E V E M A R G I N S A H E A D OF O UR P E E R S IN F Y ’ 2 1 ~11.7% 10.7% 8.7%

 

 
 

 

Focused on Delivering Industry-Leading Profitability BUILDING ON OUR MOMENTUM: Continuing to optimize our cost structure ~12.0% Investing in people, technology, and innovation to change how we deliver our work with scale enabling repeatable designs, digital libraries and proprietary technology (e.g. PFAS DE-FLUOROTM solution, Design Anomaly Detector, AGS) Peer Margin Targets6 AECOM Long-Term Target Pro Forma Professional Services (DCS+CM) Segment Level Adjusted EBITA / NSR Margins 2 1 5 Increasing utilization of best-cost shared service and design centers Expanding review of geographic exposure to ensure alignment with ROIC3 goals Planned Headcount Expansion in Manila Shared Service Center CAGR (Hours Delivered from Best-Cost Design Centers, 2017-2020E) 2020 Investor Day Page 26

 

 
 

 

FY’21 Outlook and Long-Term Financial Targets FY’ 21 E XPECTATIONS: KEY PRO FORMA PROFESSIONAL SERVICES4 FINANCIAL TARGETS: • Our strong backlog position provides for continued low-single digit organic NSR5 growth Normalized7 Unlevered Free Cash Flow Conversion8 (% of EBITDA) Adj. EBITA1 Margin Long-Term Target (NSR5) ROIC3 Long-Term Target (vs. 8.3% in FY’19) • We expect pro forma Professional Services2 adjusted EBITDA1 of $825 - $865 million in FY’21 LONG-TERM FINANCIAL TARGETS: $825 - $865M • Through our investments and execution of our plan, we are focused on delivering a greater than 15% NSR5 margin in our Professional Services business2 • Cash conversion is expected to remain robust • As a result, we expect to deliver a substantially increased ROIC3, a key determinant of value creation FY’18 FY’19 FY’20E FY’21E Pro Forma Professional Services2 Adjusted EBITDA1 2020 Investor Day Page 27 $720 -$760M $662M $528M

 

 
 

 

FY’20 Cash Flow Detail – Key Sources and Uses ENTERPRISE EXPECTED FY’20 N ORMALIZED7 FREE CASH FLOW4: Expected FY’20 Key Cash Sources / Uses: • Strong underlying cash flow in the business • Eliminating all stranded costs from the Management Services (MS) sale, and proactively addressing anticipated stranded costs resulting from our planned exit of at-risk, self-perform construction EXPECTED FY’20 FREE CASH FLOW4: • Elimination of MS cash flows resulting from sale • Unwind of MS sold accounts receivables, net of cash flow from new receivable sales within the pro forma Professional Services2 portfolio FY’20 Professional Services Restructuring Cash Costs Cash Use to Eliminate Stranded Costs $110 - $120 million • Potential upsides from outcomes on USVI net-receivable position $50 - 60 million • Other potential sources of cash include MS sale related $150 million contingent purchase price collection 2020 Investor Day Page 28 Total Expected FY’20 Restructuring Cash Cost $160 - $180 million

 

 
 

 

Professional Services Business with a Strong Cash Flow Profile KEY ATTRIBUTES THAT RESULT IN CONSISTENTLY STRONG CASH GENERATION: Unlevered Free Cash Flow Conversion8 (% of EBITDA) FY’20 Unlevered Free Cash Flow8 (Normalized7) • Broadly diversified by end market, client type and service type $740 $635 ~$80 • High returning, lower-risk Services model Professional $555 ~$70 ~$155 ~$100 • Public sector and client base blue-chip private sector Adj. EBITDA 1 (FY'20E) Normalized Cash Tax Expense Capital Expenditures Stock Compensation / Other Unlevered Free Cash Flow8 (FY'20E) FY'21E FCF from EBITDA Growth Unlevered Free Cash Flow 8 (FY'21E) 2020 Investor Day Page 29 PROJECTED NORMALIZED7 UNLEVERED FREE CASH FLOW CONVERSION8 (IN MILLIONS)

 

 
 

 

Capital Allocation Policy to Maximize Shareholder Value Transforming Our Capital Structure Executing Substantial Stock Repurchase Program Maximizing Stockholder Value Reduction and EBITDA 2.0 - 2.5x Net Leverage9 • Expected cash proceeds from the Management Services sale combined with expected positive FY’20 free cash flow4 support plan for balance sheet transformation and provide for substantial repurchase capacity • Completed $240 million of share repurchases to-date under our $1 billion authorization • Exited FY’19 with 2.2x net leverage9 and continue to target long-term leverage within our 2.0 – 2.5x range Expect to return substantially all free cash flow4 to shareholders through repurchases as our stock maintains a significant discount to Professional Services peers and our estimate of intrinsic value • 2020 Investor Day Page 30 Continued Debt Growth to Maintain Our Target Execute Stock Repurchases Under $1 Billion Board Authorization Long-term Focus on Capital Returns to Maximize Stockholder Value

 

 
 

 

Highly Attractive Opportunity to Deploy Capital to Repurchases • AECOM’s current unlevered free cash flow yield is approximately 8%, a substantial discount to market averages • This disconnect suggests a highly attractive value creation opportunity in AECOM shares, underscoring our commitment to repurchase shares • As a result, we remain committed to repurchasing our shares S&P 500 Average AECOM Professional Services10 Unlevered Free Cash Flow Yield 2020 Investor Day Page 31 4% - 5% A S A P R O F E S S I O N A LS E R V I C E S B U S I N E S S ,W E S EE AN AT T R A C T I V EVA L U E C R E AT I O NO P P O RT U N I T YIN O UR S H A R E S

 

 
 

 

Key Messages from Today: Delivering on Our Transformation EXECUTING ON OUR STRATEGIC AND FINANCIAL COMMITMENTS Delivered 13% adjusted EBITDA1 growth, a near-record backlog and record-high DCS margins, and our Professional Services business2 had even stronger 25% adjusted EBITDA1 growth and 19% backlog growth TRANSFORMING INTO A FOCUSED, HIGHER-VALUE PROFESSIONAL SERVICES FIRM We have taken and continue to take several strategic actions to transform into a higher-returning and lower-risk Professional Services business EXTENDING OUR LEADERSHIP POSITION WITH INNOVATION AND TECHNOLOGY Through innovation, technology, our unrivaled scale and depth of expertise, we are shaping how our clients solve their most complex challenges and growing our market share SETTING AMBITIOUS TARGETS TO LEAD OUR INDUSTRY We are focused on achieving industry-leading margins, ROIC3 and free cash flow4 conversion by executing on our strategic and financial objectives MAXIMIZING SHAREHOLDER VALUE Announced sale of the Management Services business at a premium valuation, which accelerates our balance sheet transformation and planned stock repurchases under our remaining $760 million Board authorization 2020 Investor Day Page 32

 

 
 

 

Appendix 2020 Investor Day

 

 
 

 

AECOM: The World’s Premier Infrastructure Firm We deliver professional services across the project lifecycle – from planning, design and engineering to consulting and construction management. Across the globe, we partner with our clients in the public and private sectors to solve their most complex challenges and pioneer innovative solutions. professionals ranked transportation and building design firm Fortune World’s Most Admired 5 years in a row Fortune 500 2020 Investor Day

 

 
 

 

Footnotes 1 Excludes the impact of non-operating items, such as acquisition and integration-related items, transaction-related expenses and restructuring costs and other items. See Regulation G Information for a complete reconciliation of Non-GAAP measures. 2 A non-GAAP measure comprised of the Company’s Design & Consulting Services, Construction Management and AECOM Capital businesses, and excludes expected stranded costs associated with planned separations and divestitures that are expected to be eliminated. 3 Return on invested capital, or ROIC, is calculated as the sum of adjusted net income as presented in the Company’s Regulation G Information and interest expense, net of interest income, divided by average quarterly invested capital as defined as the sum of attributable shareholder’s equity and total debt, less cash and cash equivalents. 4 Free cash flow is defined as cash flow from operations less capital expenditures net of proceeds from disposals. 5 Revenue, net of subcontract costs. 6 Peers include Arcadis, Jacobs People & Places Solutions, Stantec, Tetra Tech and WSP. 7 Normalized unlevered free cash flow excludes unusual events, such as transformational restructuring and other factors that are expected to impact free cash flow in FY’20. 8 Unlevered free cash flow is derived by adding back after-tax adjusted interest expense at a 25% tax rate and is after distributions to non-controlling interests. 9 Net debt-to-EBITDA, or net leverage, 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. 10 Reflects expected FY’20 normalized Professional Services unlevered free cash flow conversion of 75% of adjusted EBITDA and balance sheet as of Q4’19 adjusted to reflect the $2.35 billion of expected net proceeds from the Management Services sale. 2020 Investor Day Page 35

 

 
 

 

Key Attributes of Our Professional Services Business Diversified business with a proven track record of performing across varied economic cycles Focused on our core higher-returning and lower-risk businesses Leading position in key engineering and construction management markets Strengthened financial profile with a higher expected earnings growth and transformed balance sheet Attractive Exposure to Key End Markets Balanced Geographic Exposure Diverse Funding Sources Lower-Risk Services Professional Business 6%1% 6% 4% 13% Facilities Transportation Environment / Water Power / Industrial U.S. Asia Pacific EMEA Canada Private State & Local Governments Non-U.S. Governments Federal U.S. Government Cost-Plus Fixed Price (Design) Construction Management GMP Fixed Price (Construction) 20% 35% 28% 43% 21% 39% 54% 54% 20% 23% 33% All numbers are presented as a percentage of FY’19 NSR5 2020 Investor Day Page 36

 

 
 

 

Historical Pro Forma Professional Services Financial Results 2020 Investor Day Page 37 ($ in millions)Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019 Design & Consulting Services (DCS) 16,659 8,223 5,704 455 483 8.5% 14,006 5,656 498 58 59 11.9% (125) 4 421 16,243 8,268 5,670 552 584 10.3% 20,254 5,366 547 74 83 15.2% (143) 21 545 Backlog16,46917,17416,66516,659 Revenue1,9422,0052,1052,171 Net Service Revenue (NSR)51,3831,4681,4371,416 Operating Income83123120126 Adjusted Operating Income192130128133 % of NSR6.6%8.9%8.9%9.4% 16,18716,46716,26116,243 2,0302,1012,0552,082 1,3921,4521,4151,411 120135147150 126140151166 9.1%9.7%10.7%11.8% Construction Management (CM) Backlog13,04313,56912,63314,006 Revenue1,4271,3511,4861,392 Net Service Revenue (NSR)5126121136115 Operating Income2115203 Adjusted Operating Income12115203 % of NSR16.7%12.5%14.8%2.6% Unallocated Corporate G&A(32)(27)(31)(34) AECOM Capital Operating Income (3) (3) (4) 13 19,70320,26419,45520,254 1,3231,3101,3031,430 120143130155 8151140 17151141 13.9%10.7%8.3%26.1% (34)(36)(36)(37) (0) 10 1 11 Professional Services Adjusted Operating Income1 78 115113116 109129127181 Depreciation29313233 Non-Controlling Interests(5)(5)(6)(5) Other 1 0 0 0 126 (21) 1 528 32 35 34 37 (5)(7)(6)(7) 1 1 1 1 138 (25) 4 662 Professional Services Adjusted EBITDA1 103 142 139 144 137 158 156 211

 

 
 

 

Pro Forma Professional Services Balance Sheet and Valuation CONSOLIDATED FINANCIAL STATS ($ IN MILLIONS): $42 161 $6,762 $42 161 $6,762 Stock Price (current) Shares Outstanding Market Capitalization (current) Adjusted EBITDA (FY’20E) $1,060 PROFESSIONAL SERVICES2 FINANCIAL STATS ($ IN MILLIONS): Adjusted EBITDA (FY’20E) Normalized Unlevered Free Cash Flow3 (ULFCF) Conversion $740 75%+ Addition of $2.2 Billion of Net Proceeds Results in Adjustment to Enterprise Value, Consistent with Lower Pro Forma EBITDA Total Debt Cash Enterprise Value $3,403 $835 $9,330 $3,403 $3,035 $7,088 Normalized ULFCF3 (FY’20E) ~$555 Normalized ULFCF3 Yield 7.7% 1 Reflects the collection of $2.2 billion of expected net cash proceeds from the sale of the Management Services business. 2 Comprised of the Company’s Design & Consulting Services, Construction Management and AECOM Capital businesses, and excludes expected stranded costs associated with planned separations and divestitures that are expected to be eliminated. 3 Normalized unlevered free cash flow excludes unusual events, such as transformational restructuring and other factors that are expected to impact free cash flow in fiscal 2020. Unlevered free cash flow is derived by adding back after-tax adjusted interest expense at a 25% tax rate and is after distributions to non-controlling interests. 2020 Investor Day Page 38 (in millions, except share price)AS OF 9/30/19ASSUMPTIONSPRO FORMA 9/30/191

 

 
 

 

Regulation G Information Three Months Ended Twelve Months Ended Reconciliation of Net Income Attributable to AECOM to EBITDA, Adjusted Sep 30, 2018 Jun 30, 2019 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 EBITDA and Professional Services Adjusted EBITDA Fiscal Years Ended Sept 30, 2018 2019 Reconciliation of Segment Income from Operations to Adjusted Income from Operations Net income (loss) attributable to AECOM Income tax expense (benefit) Income (loss) attributable to AECOM before income taxes Depreciation and amortization expense1 Interest income2 Interest expense3 EBITDA Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Acquisition and integration-related items Restructuring costs Loss (gain) on disposal activities FX gain from forward currency contract Depreciation expense included in noncore operating losses and acquisition and integration-related items Adjusted EBITDA MS & At-Risk, Self-Perform Construction Professional Services Adjusted EBITDA $ 136.5 $ (261.1 ) Design & Consulting Services Segment: Income from operations Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Gain on disposal activities Amortization of intangible assets Adjusted income from operations (19.6 ) (0.1 ) $ 126.4 $ 147.2 $ 150.3 $ 455.1 $ 552.3 116.9 281.0 (9.6 ) 249.4 (261.2 ) 292.1 (12.4 ) 215.2 0.9 - - 5.8 (2.0) - - 6.0 (1.6) 15.2 (3.6) 6.0 2.8 - - 24.6 (3.9) 15.2 (3.6) 24.1 637.7 57.4 168.2 (10.9 ) - 2.9 (9.1 ) 233.7 35.8 615.4 (15.3 ) 95.4 10.4 - $ 133.1 $ 151.2 $ 166.3 $ 482.5 $ 584.1 Construction Services Segment: Income (loss) from operations Acquisition and integration-related items Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Loss on disposal activities Amortization of intangible assets Adjusted income from operations $ 21.3 (4.8) $ 28.5 (4.2) $ (569.1) (4.2) $ (109.2) (12.7) $ (506.0) (16.8) 16.6 - 0.8 11.7 7.0 - 7.4 10.3 9.3 590.5 - 9.6 54.5 168.2 2.9 52.6 37.1 590.5 7.4 40.3 (9.7 ) (27.8 ) $ 836.5 $ 947.6 308.8 286.1 $ 45.6 $ 49.0 $ 36.1 $ 156.3 $ 152.5 $ 527.7 $ 661.5 Management Services Segment: Income from operations Noncore operating losses & transaction related expenses Loss on disposal activities Amortization of intangible assets Adjusted income from operations 1 Includes the amount for noncontrolling interests in consolidated subsidiaries 2 Included in other income 3 Excludes related amortization $ 49.9 $ 52.5 $ 51.2 $ 199.6 $ 206.1 - - 9.9 (0.4) - 9.4 3.0 6.6 9.5 - - 39.2 2.6 6.6 37.9 $ 59.8 $ 61.5 $ 70.3 $ 238.8 $ 253.2 2020 Investor Day Page 39

 

 
 

 

Regulation G Information Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Reconciliation of Revenue to Net Service Revenue Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended Sep 30, 2018 Jun 30, 2019 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Net cash provided by operating activities Capital expenditures, net Free cash flow $ 531.9 (21.2) $ 76.9 (24.7) $ 793.7 (14.3) $ 774.6 (86.9) $ 777.6 (83.4) Design & Consulting Services Revenue Less: subcontract costs Net service revenue $ 2,171.3 755.5 $ 2,082.5 671.8 $ 8,223.2 2,519.3 $ 8,268.2 2,598.0 $ 510.7 $ 52.2 $ 779.4 $ 687.7 $ 694.2 Fiscal Years Ended Sep 30, $ 1,415.8 $ 1,410.7 $ 5,703.9 $ 5,670.2 2015 2016 2017 2018 2019 Net cash provided by operating activities Capital expenditures, net Free cash flow $ 764.4 $ 814.2 $ 696.7 $ 774.6 $ 777.6 Construction Management Revenue Less: subcontract costs Net service revenue (69.4) (136.8) (78.5) (86.9) (83.4) $ 1,392.4 1,277.2 $ 1,429.7 1,274.3 $ 5,656.1 5,158.2 $ 5,366.0 4,818.8 $ 695.0 $ 677.4 $ 618.2 $ 687.7 $ 694.2 $ 115.2 $ 155.4 $ 497.9 $ 547.2 Three Months Ended Twelve Months Ended Sep 30, 2018 Jun 30, 2019 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Reconciliation of Income from Operations to Adjusted Income from Operations Income (loss) from operations Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Acquisition and integration-related items Restructuring costs Loss on disposal activities Amortization of intangible assets Adjusted income from operations $ 177.0 17.5 - (4.8 ) - 0.8 27.4 $ 192.9 4.6 - (4.2 ) - 7.4 25.7 $ (419.7 ) 10.7 615.4 (4.2 ) 16.2 3.0 25.1 $ 424.9 57.2 168.2 (12.7 ) - 2.9 116.4 $ 25.1 35.8 615.4 (16.8 ) 95.4 10.4 102.3 $ 217.9 $ 226.4 $ 246.5 $ 756.9 $ 867.6 2020 Investor Day Page 40

 

 
 

 

Regulation G Information Three Months Ended Twelve Months Ended Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Reconciliation of Segment Income from Operations to Adjusted Income from Operations Design & Consulting Services: Income from operations Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Gain on disposal activities Amortization of intangible assets Adjusted income from operations $ 85.3 - - - 6.2 $ 123.0 1.2 - - 6.2 $ 120.4 0.7 - - 6.4 $ 126.4 0.9 - - 5.8 $ 119.5 0.9 - - 6.0 $ 135.3 (1.2 ) - - 6.1 $ 147.2 (2.0 ) - - 6.0 $ 150.3 (1.6 ) 15.2 (3.6 ) 6.0 $ 455.1 2.8 - - 24.6 $ 552.3 (3.9 15.2 (3.6 24.1 $ 91.5 $ 130.4 $ 127.5 $ 133.1 $ 126.4 $ 140.2 $ 151.2 $ 166.3 $ 482.5 $ 584.1 Construction Management: Income (loss) from operations Noncore operating losses & transaction related expenses Impairment of long-lived assets, including goodwill Gain on disposal activities Amortization of intangible assets Adjusted income from operations $ 20.7 - - - 0.3 $ 14.8 - - - 0.3 $ 19.9 - - - 0.3 $ 2.7 - - - 0.3 $ 7.9 8.5 - - 0.3 $ 15.4 (0.5 ) - - 0.3 $ 10.9 (0.4 ) - - 0.3 $ 40.0 0.3 - - 0.3 $ 58.1 - - - 1.1 $ 74.2 7.9 - - 1.1 $ 21.0 $ 15.1 $ 20.2 $ 3.0 $ 7.9 $ 15.2 $ 10.7 $ 40.6 $ 59.2 $ 83.2 2020 Investor Day Page 41

 

 
 

 

2020 Investor Day