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Aecom Technology: Los Angeles (Nov. 10, 2015)

The following excerpt is from the company's SEC filing.

AECOM (NYSE: ACM), a premier, fully integrated global infrastructure firm, reported fourth-quarter revenue of $4.7 billion and fiscal-year revenue of $18.0 billion today. Net income

and earnings per share

were $1.1 million and $0.01 in the fourth quarter, respectively. The net loss

and loss per share

were $154.8 million and $1.04 for the full year. On an adjusted basis, diluted earnings per share

were $0.95 for the fourth quarter and $3.08 for the fiscal year.

Fourth Quarter

Fiscal Year

($ in millions, except EPS)

Q4 FY14

Q4 FY15







Operating Income

Net Income (Loss)


Adjusted EPS

Free Cash Flow




Note: All comparisons are year over year unless otherwise noted. FY14 results included an extra week in the fourth quarter, which negatively impacts year-over-year growth rates.

Fiscal 2015 was a remarkable year for AECOM, said Michael S. Burke, AECOMs chairman and chief executive officer. We completed the largest combination in our industrys history. Despite the attention to integration and uneven global economic trends, our results and outlook reflect the benefits of our diversification.

We are reiterating our annual free cash flow target of $600 million to $800 million and increasing our synergy target to $325 million, said Stephen M. Kadenacy, AECOMs president. This is a sign of our increasing confidence in the combined business.


Wins and Backlog

Wins in the quarter of $4.7 billion were driven primarily by the Design & Consulting Services business in the Americas and the Management Services segment. The book-to-burn ratio

was 1.0. After adjusting for acquisitions, total backlog declined slightly from the previous quarter. The companys total backlog was $40.2 billion on September 30, 2015.

Business Segments

In addition to providing consolidated financial results, AECOM reports separate financial information for its three segments: Design & Consulting Services (DCS), Construction Services (CS), and Management Services (MS).

The DCS segment delivers planning, consulting, architectural and engineering design services to commercial and government clients worldwide in markets such as transportation, facilities, environmental, energy, water, and government.

Revenue in the fourth quarter was $2.0 billion. Constant-currency

organic revenue declined 11 percent. Full-year revenue of $8.0 billion increased 46 percent and constant-currency

organic revenue decreased 4 percent. Adjusted operating income

was $153 million and $504 million in the fourth quarter and fiscal year, respectively.

The CS segment provides construction services for energy, commercial, industrial and public and private infrastructure clients.

Revenue in the fourth quarter was $1.8 billion, an increase of 118 percent. Organic revenue increased 21 percent. Full-year revenue of $6.7 billion increased 233 percent and organic revenue increased 32 percent. Adjusted operating income

was $42 million and $152 million in the fourth quarter and fiscal year, respectively.

The MS 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, national governments around the world, and commercial customers.

Revenue in the fourth quarter was $885 million, an increase of 262 percent. Full-year revenue of $3.4 billion increased 268 percent and organic revenue decreased 16 percent. Adjusted operating income

was $114 million and $414 million in the fourth quarter and fiscal year, respectively.

Tax Rate

Inclusive of the non-controlling interest deduction and excluding acquisition and integration related expenses, financing charges in interest expense, and amortization of intangible assets the effective adjusted tax rate was 25.5 percent and 27.4 percent in the fourth quarter and fiscal year, respectively.

Free cash flow

for the fourth quarter was $268 million. For the fiscal year, AECOM generated free cash flow of $695 million, which was within the companys target of $600 million to $800 million.

Balance Sheet

As of September 30, 2015, AECOM had $684 million of total cash and cash equivalents, $4.6 billion of debt and $948 million in unused capacity under its $1.05 billion revolving credit facility.

Financial Outlook

AECOM is providing adjusted EPS

guidance for fiscal year 2016 of $3.00 to $3.40, which assumes an expected contribution from the monetization of a portion of AECOM Capital investments.

The company expects to exit fiscal 2016 at a synergy savings run-rate of $275 million. In addition, the company is increasing its expected total synergy savings target to $325 million, due primarily to additional real estate savings opportunities. Benefits are expected to begin impacting results in fiscal 2017.

The company expects to incur approximately $200 million of acquisition and integration expenses in fiscal 2016.

In addition, the company expects 2016 full-year interest expense, excluding acquisition-related amortization, of approximately $210 million and a full-year share count of 156 million. The company also expects an adjusted effective tax rate

of approximately 28%, which includes the anticipated retroactive extension of U.S. R&D...