AECOM Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-52423

AECOM

(Exact name of registrant as specified in its charter)

Delaware		61-1088522
State or Other Jurisdiction Of Incorporation or Organization		I.R.S. Employer Identification Number

1999 Avenue of the Stars, Suite 2600
Los Angeles, California		90067
Address of Principal Executive Offices		Zip Code

(213) 593-8000

Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of May 1, 2020, 160,085,842 shares of the registrant’s common stock were outstanding.

Table of Contents

AECOM

INDEX


PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements	1

	Consolidated Balance Sheets as of March 31, 2020 (unaudited) and September 30, 2019 (unaudited)	1

	Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2020 (unaudited) and March 31, 2019 (unaudited)	2

	Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended March 31, 2020 (unaudited) and March 31, 2019 (unaudited)	3

	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended March 31, 2020 (unaudited) and March 31, 2019 (unaudited)	4

	Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2020 (unaudited) and March 31, 2019 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4.	Controls and Procedures	48

PART II.	OTHER INFORMATION	48

Item 1.	Legal Proceedings	48

Item 1A.	Risk Factors	48

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65

Item 4.	Mine Safety Disclosure	65

Item 5.	Other Information	65

Item 6.	Exhibits	66

SIGNATURES		68

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AECOM

Consolidated Balance Sheets

(unaudited - in thousands, except share data)


	March 31,		September 30,
	2020		2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,033,266	$	777,476
Cash in consolidated joint ventures		101,795		108,163
Total cash and cash equivalents		1,135,061		885,639
Accounts receivable—net		2,888,939		2,869,216
Contract assets		1,766,376		1,581,806
Prepaid expenses and other current assets		726,643		515,593
Current assets held for sale		799,818		1,633,302
Income taxes receivable		61,420		49,089
TOTAL CURRENT ASSETS		7,378,257		7,534,645
PROPERTY AND EQUIPMENT—NET		383,871		405,605
DEFERRED TAX ASSETS—NET		409,566		288,949
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES		256,932		256,131
GOODWILL		3,446,939		3,476,813
INTANGIBLE ASSETS—NET		87,591		99,636
OTHER NON-CURRENT ASSETS		164,875		172,134
OPERATING LEASE RIGHT-OF-USE ASSETS		648,642		—
NON-CURRENT ASSETS HELD FOR SALE		338,673		2,316,995
TOTAL ASSETS	$	13,115,346	$	14,550,908

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	27,220	$	47,835
Accounts payable		2,184,346		2,410,838
Accrued expenses and other current liabilities		2,204,433		1,878,319
Income taxes payable		31,478		59,541
Contract liabilities		962,999		851,040
Current liabilities held for sale		551,913		1,163,654
Current portion of long-term debt		25,152		50,527
TOTAL CURRENT LIABILITIES		5,987,541		6,461,754
OTHER LONG-TERM LIABILITIES		102,980		266,304
OPERATING LEASE LIABILITIES		738,032		—
LONG-TERM LIABILITIES HELD FOR SALE		97,062		313,962
DEFERRED TAX LIABILITY—NET		76,117		4,511
PENSION BENEFIT OBLIGATIONS		368,963		387,042
LONG-TERM DEBT		2,079,128		3,217,985
TOTAL LIABILITIES		9,449,823		10,651,558

COMMITMENTS AND CONTINGENCIES (Note 15)

AECOM STOCKHOLDERS’ EQUITY:
Common stock—authorized, 300,000,000 shares of $0.01 par value as of March 31, 2020 and September 30, 2019; issued and outstanding 158,908,063 and 157,482,983 shares as of March 31, 2020 and September 30, 2019, respectively		1,589		1,575
Additional paid-in capital		3,960,123		3,953,650
Accumulated other comprehensive loss		(881,574)		(864,197)
Retained earnings		451,364		599,548
TOTAL AECOM STOCKHOLDERS’ EQUITY		3,531,502		3,690,576
Noncontrolling interests		134,021		208,774
TOTAL STOCKHOLDERS’ EQUITY		3,665,523		3,899,350
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,115,346	$	14,550,908

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Operations

(unaudited - in thousands, except per share data)


	Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2020		2019		2020		2019

Revenue	$	3,245,737	$	3,412,605	$	6,481,347	$	6,768,943
Cost of revenue		3,076,924		3,267,768		6,146,734		6,500,710
Gross profit		168,813		144,837		334,613		268,233

Equity in earnings of joint ventures		13,505		16,600		23,433		23,232
General and administrative expenses		(41,037)		(37,426)		(84,651)		(73,333)
Restructuring costs		(31,213)		(15,875)		(76,138)		(79,170)
Income from operations		110,068		108,136		197,257		138,962

Other income		2,430		3,761		6,438		6,746
Interest expense		(37,111)		(41,407)		(77,488)		(80,832)
Income from continuing operations before taxes		75,387		70,490		126,207		64,876
Income tax expense (benefit) for continuing operations		21,604		12,218		37,510		(30,317)
Net income from continuing operations		53,783		58,272		88,697		95,193
Net (loss) income from discontinued operations		(130,749)		35,247		(112,569)		63,412
Net (loss) income		(76,966)		93,519		(23,872)		158,605

Net income attributable to noncontrolling interests from continuing operations		(5,243)		(6,898)		(9,290)		(11,838)
Net income attributable to noncontrolling interests from discontinued operations		(3,917)		(8,776)		(12,360)		(17,403)
Net income attributable to noncontrolling interests		(9,160)		(15,674)		(21,650)		(29,241)

Net income attributable to AECOM from continuing operations		48,540		51,374		79,407		83,355
Net (loss) income attributable to AECOM from discontinued operations		(134,666)		26,471		(124,929)		46,009
Net (loss) income attributable to AECOM	$	(86,126)	$	77,845	$	(45,522)	$	129,364

Net income (loss) attributable to AECOM per share:
Basic continuing operations per share	$	0.31	$	0.33	$	0.50	$	0.53
Basic discontinued operations per share	$	(0.85)	$	0.17	$	(0.79)	$	0.30
Basic earnings per share	$	(0.54)	$	0.50	$	(0.29)	$	0.83

Diluted continuing operations per share	$	0.30	$	0.32	$	0.49	$	0.52
Diluted discontinued operations per share	$	(0.84)	$	0.17	$	(0.77)	$	0.29
Diluted earnings per share	$	(0.54)	$	0.49	$	(0.28)	$	0.81

Weighted average shares outstanding:
Basic		158,550		156,621		157,941		156,519
Diluted		160,718		158,416		160,687		159,010

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Comprehensive Income (Loss)

(unaudited—in thousands)


	Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2020		2019		2020		2019

Net (loss) income	$	(76,966)	$	93,519	$	(23,872)	$	158,605

Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax		144		(4,058)		3,175		(10,356)
Foreign currency translation adjustments		(91,688)		22,754		(43,482)		965
Pension adjustments, net of tax		32,311		(3,427)		22,712		1,903
Other comprehensive (loss) income, net of tax		(59,233)		15,269		(17,595)		(7,488)
Comprehensive (loss) income, net of tax		(136,199)		108,788		(41,467)		151,117
Noncontrolling interests in comprehensive (loss) income of consolidated subsidiaries, net of tax		(8,835)		(15,819)		(21,432)		(29,444)
Comprehensive (loss) income attributable to AECOM, net of tax	$	(145,034)	$	92,969	$	(62,899)	$	121,673

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Stockholders’ Equity

(unaudited—in thousands)


					Accumulated				Total
			Additional		Other				AECOM		Non-		Total
	Common		Paid-In		Comprehensive		Retained		Stockholders’		Controlling		Stockholders’
	Stock		Capital		Loss		Earnings		Equity		Interests		Equity

BALANCE AT DECEMBER 31, 2019	$	1,582	$	3,956,596	$	(822,666)	$	537,490	$	3,673,002	$	186,402	$	3,859,404
Net (loss) income		—		—		—		(86,126)		(86,126)		9,160		(76,966)
Other comprehensive loss		—		—		(58,908)		—		(58,908)		(325)		(59,233)
Issuance of stock		10		9,931		—		—		9,941		—		9,941
Repurchases of stock		(3)		(11,686)		—		—		(11,689)		—		(11,689)
Stock based compensation		—		5,282		—		—		5,282		—		5,282
Other transactions with noncontrolling interests		—		—		—		—		—		1,002		1,002
Disposal of noncontrolling interest of business sold		—		—		—		—		—		(60,089)		(60,089)
Contributions from noncontrolling interests		—		—		—		—		—		3,368		3,368
Distributions to noncontrolling interests		—		—		—		—		—		(5,497)		(5,497)
BALANCE AT MARCH 31, 2020	$	1,589	$	3,960,123	$	(881,574)	$	451,364	$	3,531,502	$	134,021	$	3,665,523


					Accumulated				Total
			Additional		Other				AECOM		Non-		Total
	Common		Paid-In		Comprehensive		Retained		Stockholders’		Controlling		Stockholders’
	Stock		Capital		Loss		Earnings		Equity		Interests		Equity

BALANCE AT DECEMBER 31, 2018	$	1,570	$	3,845,145	$	(726,145)	$	957,230	$	4,077,800	$	172,629	$	4,250,429
Net income		—		—		—		77,845		77,845		15,674		93,519
Other comprehensive income		—		—		15,124		—		15,124		145		15,269
Issuance of stock		14		43,218		—		—		43,232		—		43,232
Repurchases of stock		(11)		(227)		—		(29,989)		(30,227)		—		(30,227)
Stock based compensation		—		16,162		—		—		16,162		—		16,162
Other transactions with noncontrolling interests		—		—		—		—		—		13,735		13,735
Distributions to noncontrolling interests		—		—		—		—		—		(7,245)		(7,245)
BALANCE AT MARCH 31, 2019	$	1,573	$	3,904,298	$	(711,021)	$	1,005,086	$	4,199,936	$	194,938	$	4,394,874

Table of Contents

AECOM

Consolidated Statements of Stockholders’ Equity

(unaudited—in thousands)


					Accumulated				Total
			Additional		Other				AECOM		Non-		Total
	Common		Paid-In		Comprehensive		Retained		Stockholders’		Controlling		Stockholders’
	Stock		Capital		Loss		Earnings		Equity		Interests		Equity

BALANCE AT SEPTEMBER 30, 2019	$	1,575	$	3,953,650	$	(864,197)	$	599,548	$	3,690,576	$	208,774	$	3,899,350
Net (loss) income		—		—		—		(45,522)		(45,522)		21,650		(23,872)
Cumulative effect of accounting standard adoption		—		—		—		(87,787)		(87,787)		—		(87,787)
Other comprehensive income		—		—		(17,377)		—		(17,377)		(218)		(17,595)
Issuance of stock		27		15,247		—		—		15,274		—		15,274
Repurchases of stock		(13)		(35,311)		—		(14,875)		(50,199)		—		(50,199)
Stock based compensation		—		26,537		—		—		26,537		—		26,537
Other transactions with noncontrolling interests		—		—		—		—		—		816		816
Disposal of noncontrolling interest of business sold		—		—		—		—		—		(60,089)		(60,089)
Contributions from noncontrolling interests		—		—		—		—		—		6,181		6,181
Distributions to noncontrolling interests		—		—		—		—		—		(43,093)		(43,093)
BALANCE AT MARCH 31, 2020	$	1,589	$	3,960,123	$	(881,574)	$	451,364	$	3,531,502	$	134,021	$	3,665,523

Accumulated

Total

Additional

Other

AECOM

Non-

Price	37.45	EPS	-1
Shares	158	P/E	-32
MCap	5,906	P/FCF	8
Net Debt	2,205	EBIT	-184
TEV	8,111	TEV/EBIT	-44
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-05-06
10-Q	2019-12-31	Filed 2020-02-05
10-K	2019-09-30	Filed 2019-11-13
10-Q	2019-06-28	Filed 2019-08-07
10-Q	2019-03-29	Filed 2019-05-08
10-Q	2018-12-28	Filed 2019-02-06
10-K	2018-09-28	Filed 2018-11-13
10-Q	2018-06-29	Filed 2018-08-08
10-Q	2018-03-30	Filed 2018-05-09
10-Q	2017-12-29	Filed 2018-02-07
10-K	2017-09-29	Filed 2017-11-14
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-10
10-Q	2016-12-30	Filed 2017-02-08
10-K	2016-09-30	Filed 2016-11-16
10-Q	2016-07-01	Filed 2016-08-10
10-Q	2016-04-01	Filed 2016-05-11
10-Q	2016-01-01	Filed 2016-02-10
10-K	2015-10-02	Filed 2015-11-25
10-Q	2015-06-30	Filed 2015-08-12
10-Q	2015-04-03	Filed 2015-05-13
10-Q	2015-01-02	Filed 2015-02-11
10-K	2014-09-30	Filed 2014-11-17
10-Q	2014-06-30	Filed 2014-08-06
10-Q	2014-03-31	Filed 2014-05-07
10-Q	2013-12-31	Filed 2014-02-05
10-K	2013-09-30	Filed 2013-11-13
10-Q	2013-06-30	Filed 2013-08-07
10-Q	2013-03-31	Filed 2013-05-08
10-Q	2012-12-31	Filed 2013-02-06
10-K	2012-09-30	Filed 2012-11-19
10-Q	2012-06-30	Filed 2012-08-08
10-Q	2012-03-31	Filed 2012-05-07
10-Q	2011-12-31	Filed 2012-02-06
10-K	2011-09-30	Filed 2011-11-21
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-06
10-Q	2010-12-31	Filed 2011-02-09
10-K	2010-09-30	Filed 2010-11-22
10-Q	2010-06-30	Filed 2010-08-06
10-Q	2010-03-31	Filed 2010-05-07
10-Q	2009-12-31	Filed 2010-02-10

8-K	2020-05-19	Regulation FD, Exhibits
8-K	2020-05-05	Earnings, Exhibits
8-K	2020-04-03	Regulation FD, Exhibits
8-K	2020-03-10	Officers, Shareholder Vote
8-K	2020-01-28	Enter Agreement, M&A, Earnings, Regulation FD, Exhibits
8-K	2019-12-10	Regulation FD, Exhibits
8-K	2019-11-27	Officers, Exhibits
8-K	2019-11-22	Officers, Exhibits
8-K	2019-11-18	Enter Agreement, Officers, Other Events, Exhibits
8-K	2019-11-12	Earnings, Exhibits
8-K	2019-10-12
8-K	2019-08-23	Officers, Exhibits
8-K	2019-08-06	Earnings, Exhibits
8-K	2019-06-17	Regulation FD, Exhibits
8-K	2019-05-08	Earnings, Exhibits
8-K	2019-03-06	Shareholder Vote
8-K	2019-02-04	Earnings, Exhibits
8-K	2018-11-14	Amend Bylaw, Exhibits
8-K	2018-11-12	Earnings, Exhibits
8-K	2018-08-09	Regulation FD, Exhibits
8-K	2018-08-07	Earnings, Exhibits
8-K	2018-05-08	Earnings, Exhibits
8-K	2018-03-13	Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K	2018-02-28	Shareholder Vote
8-K	2018-02-14	Regulation FD
8-K	2018-02-06	Earnings, Exhibits

EX-10.1	acm-20200331xex10d1.htm
EX-10.2	acm-20200331xex10d2.htm
EX-10.3	acm-20200331xex10d3.htm
EX-10.4	acm-20200331xex10d4.htm
EX-31.1	acm-20200331xex31d1.htm
EX-31.2	acm-20200331xex31d2.htm
EX-32	acm-20200331xex32.htm
EX-95	acm-20200331xex95.htm

ACM 10Q Quarterly Report

AECOM Earnings 2020-03-31