AECOM is leading the multi-disciplinary coastal protection initiative that spans landscape architecture, planning policy, urban design, architecture and engineering. The 3.5-mile-long project aims to improve access to the waterfront and increase community green space for health and leisure activities.
Second Quarter Fiscal 2021
All statements in this communication other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, coronavirus impacts, risk profile and investment strategies, any statements regarding future economic conditions or performance, and the expected financial and operational results of AECOM. 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; impacts caused by the coronavirus and the related economic instability and market volatility, including the reaction of governments to the coronavirus, including any prolonged period of travel, commercial or other similar restrictions, the delay in commencement, or temporary or permanent halting, of construction, infrastructure or other projects, requirements that we remove our employees or personnel from the field for their protection, and delays or reductions in planned initiatives by our governmental or commercial clients or potential clients; 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 laws or regulations applicable to our business; maintaining adequate surety and financial capacity; high leverage and potential inability to service our debt and guarantees; exposure to Brexit; 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; risks associated with the benefits and costs of the Management Services transaction, including the risk that the expected benefits of the Management Services transaction or any contingent purchase price will not be realized within the expected time frame, in full or at all; 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. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.
Non-GAAP Financial Information
This press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company believes that non-GAAP financial measures such as adjusted EPS, adjusted EBITDA, adjusted net/operating income, adjusted tax rate, net service revenue and free cash flow provide a meaningful perspective on its business results as the Company utilizes this information to evaluate and manage the business. We use adjusted EBITDA, adjusted EPS, adjusted net/operating income and adjusted tax rate to exclude the impact of non-operating items, such as amortization expense, taxes 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. We present net service revenue to exclude subcontractor costs from revenue to provide investors with a better understanding of our operational performance. We present segment adjusted operating margin to reflect segment operating performance of our Americas and International segments, excluding AECOM Capital.
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 is found in the Regulation G Information tables at the back of this release.
Second Quarter Fiscal 2021 Page 1
Chief Executive Officer
Chief Financial Officer
Second Quarter Fiscal 2021
Our Second Quarter Accomplishments
Continued Margin Expansion
Double-Digit EBITDA Growth
Segment Adjusted1 Operating Margins2
Adjusted1 EBITDA3 (millions)
Proud of how our teams have delivered strong performance against an uncertain backdrop
NSR increased by 1% over the prior year
Further expanded our industry-leading margins with 140 basis points of improvement to 13.1%
Adjusted1 EBITDA3 increased by 11% to $202 million
Adjusted1 EPS increased by 22% to $0.67, which is a new quarterly record for the Professional Services business
Backlog continues to provide strong visibility
Backlog in the global design business increased by 8%
Contracted backlog, which is a leading indicator of revenue growth, increased by 13%, including 4% growth in the design business
Executing against our capital allocation priorities with $755 million of stock repurchases since Sept. 2020, including continued repurchases in the second quarter
Maintain $700 million of remaining stock repurchase capacity under the existing Board authorization
Second Quarter Fiscal 2021 Page 3
Improving Market Trends and Execution of Our Strategy Providing Confidence
State and local clients, our largest public-sector client base, are on stronger financial ground following $350 billion of financial support provided in the March COVID Relief bill
Debate on federal infrastructure legislation in the U.S. continues to advance - while no benefits are contemplated in our guidance, we are well positioned due to our leadership in infrastructure and ESG priorities
ESG, sustainability and resilience are increasingly key drivers of client spending - including environmental remediation, clean water, new energy, electrification, PFAS and others - all markets where we lead
Conditions in our larger international markets are improving - including strengthening growth outlooks in the U.K., Canada, Hong Kong and Australia, while we focus on the health and safety of our teams in India
Benefiting from new energy and greater collaboration as a result of our Think and Act Globally strategy as we bring the full strength of our consulting capabilities to bear for our clients around the world
OPERATING FROM A POSITION OF STRENGTH
(up from #3)
Source: 2020/2021 ENR Rankings, reflecting global revenue.
Second Quarter Fiscal 2021 Page 4
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