AECOM Earnings 2020-06-30

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 June 30, 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 July 31, 2020, 160,388,749 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 June 30, 2020 (unaudited) and September 30, 2019 (unaudited)	1

	Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2020 (unaudited) and June 30, 2019 (unaudited)	2

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2020 (unaudited) and June 30, 2019 (unaudited)	3

	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended June 30, 2020 (unaudited) and June 30, 2019 (unaudited)	4

	Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2020 (unaudited) and June 30, 2019 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

Item 4.	Controls and Procedures	49

PART II.	OTHER INFORMATION	49

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

Item 4.	Mine Safety Disclosure	66

Item 5.	Other Information	66

Item 6.	Exhibits	66

SIGNATURES		68

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AECOM

Consolidated Balance Sheets

(unaudited - in thousands, except share data)


	June 30,		September 30,
	2020		2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,229,479	$	777,476
Cash in consolidated joint ventures		101,789		108,163
Total cash and cash equivalents		1,331,268		885,639
Accounts receivable—net		2,811,876		2,869,216
Contract assets		1,679,983		1,581,806
Prepaid expenses and other current assets		668,739		515,593
Current assets held for sale		743,819		1,633,302
Income taxes receivable		54,677		49,089
TOTAL CURRENT ASSETS		7,290,362		7,534,645
PROPERTY AND EQUIPMENT—NET		388,864		405,605
DEFERRED TAX ASSETS—NET		382,834		288,949
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES		240,525		256,131
GOODWILL		3,466,584		3,476,813
INTANGIBLE ASSETS—NET		81,995		99,636
OTHER NON-CURRENT ASSETS		153,173		172,134
OPERATING LEASE RIGHT-OF-USE ASSETS		645,391		—
NON-CURRENT ASSETS HELD FOR SALE		395,325		2,316,995
TOTAL ASSETS	$	13,045,053	$	14,550,908

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	10,437	$	47,835
Accounts payable		2,098,617		2,410,838
Accrued expenses and other current liabilities		2,171,389		1,878,319
Income taxes payable		35,966		59,541
Contract liabilities		945,885		851,040
Current liabilities held for sale		475,116		1,163,654
Current portion of long-term debt		14,261		50,527
TOTAL CURRENT LIABILITIES		5,751,671		6,461,754
OTHER LONG-TERM LIABILITIES		132,047		266,304
OPERATING LEASE LIABILITIES		737,438		—
LONG-TERM LIABILITIES HELD FOR SALE		96,915		313,962
DEFERRED TAX LIABILITY—NET		37,910		4,511
PENSION BENEFIT OBLIGATIONS		355,215		387,042
LONG-TERM DEBT		2,047,988		3,217,985
TOTAL LIABILITIES		9,159,184		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 June 30, 2020 and September 30, 2019; issued and outstanding 160,213,426 and 157,482,983 shares as of June 30, 2020 and September 30, 2019, respectively		1,602		1,575
Additional paid-in capital		4,008,202		3,953,650
Accumulated other comprehensive loss		(805,613)		(864,197)
Retained earnings		540,703		599,548
TOTAL AECOM STOCKHOLDERS’ EQUITY		3,744,894		3,690,576
Noncontrolling interests		140,975		208,774
TOTAL STOCKHOLDERS’ EQUITY		3,885,869		3,899,350
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,045,053	$	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				Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
	2020		2019		2020		2019

Revenue	$	3,189,679	$	3,360,029	$	9,671,026	$	10,128,972
Cost of revenue		3,004,600		3,206,174		9,151,334		9,706,884
Gross profit		185,079		153,855		519,692		422,088

Equity in earnings of joint ventures		8,573		9,186		32,006		32,418
General and administrative expenses		(54,482)		(37,534)		(139,133)		(110,867)
Restructuring costs		(20,300)		—		(96,438)		(79,170)
Income from operations		118,870		125,507		316,127		264,469

Other income		3,119		4,329		9,557		11,075
Interest expense		(34,925)		(40,497)		(112,413)		(121,329)
Income from continuing operations before taxes		87,064		89,339		213,271		154,215
Income tax (benefit) expense for continuing operations		(7,184)		27,203		30,326		(3,114)
Net income from continuing operations		94,248		62,136		182,945		157,329
Net (loss) income from discontinued operations		(126)		43,252		(112,695)		106,664
Net income		94,122		105,388		70,250		263,993

Net income attributable to noncontrolling interests from continuing operations		(3,138)		(6,092)		(12,428)		(17,930)
Net income attributable to noncontrolling interests from discontinued operations		(1,645)		(15,558)		(14,005)		(32,961)
Net income attributable to noncontrolling interests		(4,783)		(21,650)		(26,433)		(50,891)

Net income attributable to AECOM from continuing operations		91,110		56,044		170,517		139,399
Net (loss) income attributable to AECOM from discontinued operations		(1,771)		27,694		(126,700)		73,703
Net income attributable to AECOM	$	89,339	$	83,738	$	43,817	$	213,102

Net income attributable to AECOM per share:
Basic continuing operations per share	$	0.57	$	0.36	$	1.07	$	0.89
Basic discontinued operations per share	$	(0.01)	$	0.17	$	(0.79)	$	0.47
Basic earnings per share	$	0.56	$	0.53	$	0.28	$	1.36

Diluted continuing operations per share	$	0.56	$	0.35	$	1.06	$	0.88
Diluted discontinued operations per share	$	(0.01)	$	0.17	$	(0.79)	$	0.46
Diluted earnings per share	$	0.55	$	0.52	$	0.27	$	1.34

Weighted average shares outstanding:
Basic		160,119		157,429		158,667		156,822
Diluted		161,835		159,787		161,070		159,269

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Comprehensive Income

(unaudited—in thousands)


	Three Months Ended				Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
	2020		2019		2020		2019

Net income	$	94,122	$	105,388	$	70,250	$	263,993

Other comprehensive income (loss), net of tax:
Net unrealized (loss) gain on derivatives, net of tax		(18)		(3,570)		3,157		(13,926)
Foreign currency translation adjustments		71,595		(6,073)		28,113		(5,108)
Pension adjustments, net of tax		4,617		2,464		27,329		4,367
Other comprehensive income (loss), net of tax		76,194		(7,179)		58,599		(14,667)
Comprehensive income, net of tax		170,316		98,209		128,849		249,326
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax		(5,016)		(21,846)		(26,448)		(51,290)
Comprehensive income attributable to AECOM, net of tax	$	165,300	$	76,363	$	102,401	$	198,036

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 MARCH 31, 2020	$	1,589	$	3,960,123	$	(881,574)	$	451,364	$	3,531,502	$	134,021	$	3,665,523
Net income		—		—		—		89,339		89,339		4,783		94,122
Other comprehensive income		—		—		75,961		—		75,961		233		76,194
Issuance of stock		13		37,859		—		—		37,872		—		37,872
Repurchases of stock		—		(280)		—		—		(280)		—		(280)
Stock based compensation		—		10,500		—		—		10,500		—		10,500
Other transactions with noncontrolling interests		—		—		—		—		—		3,545		3,545
Contributions from noncontrolling interests		—		—		—		—		—		2,108		2,108
Distributions to noncontrolling interests		—		—		—		—		—		(3,715)		(3,715)
BALANCE AT JUNE 30, 2020	$	1,602	$	4,008,202	$	(805,613)	$	540,703	$	3,744,894	$	140,975	$	3,885,869



					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 income		—		—		—		43,817		43,817		26,433		70,250
Cumulative effect of accounting standard adoption		—		—		—		(87,787)		(87,787)		—		(87,787)
Other comprehensive income		—		—		58,584		—		58,584		15		58,599
Issuance of stock		40		53,106		—		—		53,146		—		53,146
Repurchases of stock		(13)		(35,591)		—		(14,875)		(50,479)		—		(50,479)
Stock based compensation		—		37,037		—		—		37,037		—		37,037
Other transactions with noncontrolling interests		—		—		—		—		—		4,361		4,361
Disposal of noncontrolling interest of business sold		—		—		—		—		—		(60,089)		(60,089)
Contributions from noncontrolling interests		—		—		—		—		—		8,289		8,289
Distributions to noncontrolling interests		—		—		—		—		—		(46,808)		(46,808)
BALANCE AT JUNE 30, 2020	$	1,602	$	4,008,202	$	(805,613)	$	540,703	$	3,744,894	$	140,975	$	3,885,869

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 MARCH 31, 2019	$	1,573	$	3,904,298	$	(711,021)	$	1,005,086	$	4,199,936	$	194,938	$	4,394,874
Net income		—		—		—		83,738		83,738		21,650		105,388
Other comprehensive loss		—		—		(7,375)		—		(7,375)		196		(7,179)
Issuance of stock		4		11,154		—		—		11,158		—		11,158
Repurchases of stock		—		(109)		—		—		(109)		—		(109)
Stock based compensation		—		15,656		—		—		15,656		—		15,656
Contributions from noncontrolling interests		—		—		—		—

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	2020-06-30	Filed 2020-08-05
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	2020-08-31	Leave Agreement, Exhibits
8-K	2020-08-10	Officers, Other Events, Exhibits
8-K	2020-08-04	Officers
8-K	2020-07-30	Earnings, Off-BS Arrangement, Other Events, Exhibits
8-K	2020-07-21	Other Events, Exhibits
8-K	2020-06-16
8-K	2020-06-15
8-K	2020-05-26
8-K	2020-05-19
8-K	2020-05-05
8-K	2020-04-03
8-K	2020-03-10
8-K	2020-01-28
8-K	2019-12-10
8-K	2019-11-27
8-K	2019-11-22
8-K	2019-11-18
8-K	2019-11-12
8-K	2019-10-12
8-K	2019-08-23
8-K	2019-08-06
8-K	2019-06-17
8-K	2019-05-08
8-K	2019-03-06
8-K	2019-02-04
8-K	2018-11-14
8-K	2018-11-12
8-K	2018-08-09
8-K	2018-08-07
8-K	2018-05-08
8-K	2018-03-13
8-K	2018-02-28
8-K	2018-02-14
8-K	2018-02-06

EX-10.1	acm-20200630xex10d1.htm
EX-10.2	acm-20200630xex10d2.htm
EX-10.3	acm-20200630xex10d3.htm
EX-31.1	acm-20200630xex31d1.htm
EX-31.2	acm-20200630xex31d2.htm
EX-32	acm-20200630xex32.htm
EX-95	acm-20200630xex95.htm

ACM 10Q Quarterly Report

AECOM Earnings 2020-06-30