AECOM(ACM)2024-02-06 16:00Revenue and Profitability - Revenue for Q4 2023 increased to $3,899.92 million, up 15.3% from $3,382.36 million in Q4 2022[6] - Net income attributable to AECOM for Q4 2023 was $94.44 million, compared to $87.95 million in Q4 2022[6] - Diluted earnings per share for Q4 2023 were $0.69, compared to $0.63 in Q4 2022[6] - Comprehensive income attributable to AECOM for Q4 2023 was $131.23 million, down from $149.26 million in Q4 2022[8] - Net income for the three months ended December 31, 2023, was $108.6 million, compared to $96.8 million in the same period in 2022[11] - Revenue increased from $41.7 billion to $54.6 billion, a 30.9% increase[23] - Total revenue increased from $3,382.4 billion to $3,899.9 billion, a 15.3% increase, with Americas contributing $3,038.9 billion[32] - Revenue recognized from contract liabilities increased from $423.0 billion to $527.0 billion, a 24.6% increase[34] - Consolidated joint ventures total revenue for Q4 2023 was $505.1 million, compared to $484.8 million in Q4 2022[45] - The company's total revenue for the three months ended December 31, 2023, was $3,899.9 million, with a gross profit of $244.0 million[117] - Revenue for the three months ended December 31, 2023 increased by $517.5 million (15.3%) to $3,899.9 million compared to $3,382.4 million in the same period last year[130][132] - Gross profit for the three months ended December 31, 2023 increased by $29.0 million (13.5%) to $244.0 million, but gross profit margin decreased to 6.3% from 6.4%[130][134] - Americas segment revenue for the three months ended December 31, 2023 increased by $459.4 million (17.8%) to $3,038.7 million, driven by growth in Water, Transportation, and Program Management businesses[146][149] - Pass-through revenue for the three months ended December 31, 2023 was $2.2 billion (56% of total revenue), compared to $1.8 billion (53%) in the same period last year[133] - Gross profit for the Americas segment increased by $8.1 million (5.0%) to $171.0 million in Q4 2023, compared to $162.9 million in the same period last year, driven by revenue growth and strength in Water, Transportation, and Program Management markets[150] - International segment revenue grew by $58.2 million (7.2%) to $861.0 million in Q4 2023, primarily due to growth in the UK, Middle East, and Australia, led by Transportation, Facilities, and Water markets[153] - International segment gross profit increased by $21.0 million (40.5%) to $72.8 million in Q4 2023, with gross profit margin rising to 8.5% from 6.5% due to revenue growth and cost reductions[154] - The company's revenue for the three months ended December 31, 2023, was $1,941.9 million, with a gross profit of $116.1 million[195] - The company's net income attributable to AECOM was $13.1 million for the three months ended December 31, 2023[195] Cash Flow and Liquidity - Total cash and cash equivalents decreased to $1,192.26 million as of December 31, 2023, from $1,260.21 million as of September 30, 2023[5] - Net cash provided by operating activities in Q4 2023 was $143.1 million, compared to $120.0 million in Q4 2022[11] - Payments for business acquisitions in Q4 2023 were $18.7 million, with no such payments in Q4 2022[11] - Cash and cash equivalents decreased from $1.9 billion to $1.0 billion, a 47.4% decline[22] - Cash and cash equivalents decreased by $68.9 million (5.5%) to $1,193.3 million at December 31, 2023, mainly due to $92.1 million used for stock repurchases[161] - Net cash provided by operating activities increased by $23.1 million to $143.1 million in Q4 2023, driven by higher net income and non-cash adjustments[161] - Net cash used in investing activities rose by $41.6 million to $86.8 million in Q4 2023, primarily due to increased capital expenditures and a business acquisition[164] - Net cash used in financing activities increased by $34.9 million to $126.3 million in Q4 2023, mainly due to higher stock repurchases and dividend payments[165] - Working capital decreased by $39.7 million (12.4%) to $279.5 million at December 31, 2023, while Days Sales Outstanding (DSO) increased to 67 days from 65 days[166] - The company had $1,145.6 million available under its revolving credit facility as of December 31, 2023[181] - The company's total assets were $5,833.2 million as of December 31, 2023, compared to $5,848.4 million as of September 30, 2023[193] - The company's total liabilities were $5,032.4 million as of December 31, 2023, compared to $5,016.0 million as of September 30, 2023[193] - Outstanding borrowings under term credit agreements and revolving credit facility were $1,112.4 million as of December 31, 2023, and $1,119.8 million as of September 30, 2023[201] - Weighted average floating rate borrowings for the three months ended December 31, 2023, were $1,540.8 million, or $840.8 million excluding borrowings with effective fixed interest rates[201] - A 1.00% increase in short-term floating interest rates would have increased interest expense by $2.1 million for the three months ended December 31, 2023[201] - The applicable margin added to the borrowing's base rate ranges from 0.25% to 1.00%, and for eurocurrency rate borrowings, it ranges from 1.25% to 2.00%[201] Assets and Liabilities - Accounts receivable—net stood at $2,524.50 million as of December 31, 2023, slightly down from $2,544.45 million as of September 30, 2023[5] - Contract assets increased to $1,744.52 million as of December 31, 2023, up from $1,525.05 million as of September 30, 2023[5] - Total liabilities increased to $8,961.70 million as of December 31, 2023, from $8,849.69 million as of September 30, 2023[5] - Total assets increased to $11,389.92 million as of December 31, 2023, from $11,233.40 million as of September 30, 2023[5] - Total stockholders' equity as of December 31, 2023, was $2.43 billion, up from $2.38 billion as of September 30, 2023[10] - Accumulated other comprehensive loss improved to $889.8 million as of December 31, 2023, from $926.6 million as of September 30, 2023[10] - Receivables and contract assets decreased from $93.3 billion to $84.9 billion, a 9.0% decline[22] - Goodwill increased from $3,418.9 billion to $3,458.7 billion, a 1.2% increase, driven by acquisitions and foreign exchange impacts[25] - Net accounts receivable decreased from $2,544.5 billion to $2,524.5 billion, a 0.8% decline[36] - Total assets of consolidated joint ventures decreased to $869.3 million in December 2023 from $882.2 million in September 2023[45] - Unconsolidated joint ventures total assets increased to $2,234.0 million in December 2023 from $2,173.7 million in September 2023[47] - AECOM's investment in unconsolidated joint ventures decreased to $132.5 million in December 2023 from $139.2 million in September 2023[47] - Total debt as of December 31, 2023 was $2,215.0 million, with $1,012.3 million maturing in 2027[54] - The company's consolidated leverage ratio was 2.00 to 1.00 at December 31, 2023, well below the 4.00 to 1.00 covenant limit[63] - The company has $1,150,000,000 revolving credit facility and $246,968,737.50 term loan A facility, both maturing on February 8, 2026[55] - Letters of credit totaled $4.4 million as of December 31, 2023 and September 30, 2023 under the Company's Revolving Credit Facility[67] - The Company had $1,145.6 million available under its revolving credit facility as of December 31, 2023 and September 30, 2023[67] - The estimated fair value of the 2027 Senior Notes was approximately $979.8 million as of December 31, 2023[68] - Outstanding standby letters of credit totaled $887.6 million and $878.9 million as of December 31, 2023 and September 30, 2023, respectively[70] - The Company's average effective interest rate on its total debt was 5.4% and 5.1% during the three months ended December 31, 2023 and 2022, respectively[70] - The company's consolidated leverage ratio was 2.00 to 1.00 at December 31, 2023, and it was in compliance with the covenants of the Credit Agreement[180] - The estimated fair value of the 2027 Senior Notes was approximately $979.8 million as of December 31, 2023[182] - The company's average effective interest rate on total debt was 5.4% for the three months ended December 31, 2023, compared to 5.1% for the same period in 2022[185] - The company's outstanding standby letters of credit totaled $887.6 million as of December 31, 2023[184] - The company's total liabilities were $5,032.4 million as of December 31, 2023, compared to $5,016.0 million as of September 30, 2023[193] - Outstanding borrowings under term credit agreements and revolving credit facility were $1,112.4 million as of December 31, 2023, and $1,119.8 million as of September 30, 2023[201] - Weighted average floating rate borrowings for the three months ended December 31, 2023, were $1,540.8 million, or $840.8 million excluding borrowings with effective fixed interest rates[201] - A 1.00% increase in short-term floating interest rates would have increased interest expense by $2.1 million for the three months ended December 31, 2023[201] - The applicable margin added to the borrowing's base rate ranges from 0.25% to 1.00%, and for eurocurrency rate borrowings, it ranges from 1.25% to 2.00%[201] Joint Ventures and Investments - Equity in losses of joint ventures for Q4 2023 was $28.94 million, compared to earnings of $9.83 million in Q4 2022[6] - Consolidated joint ventures total revenue for Q4 2023 was $505.1 million, compared to $484.8 million in Q4 2022[45] - Total assets of consolidated joint ventures decreased to $869.3 million in December 2023 from $882.2 million in September 2023[45] - Unconsolidated joint ventures total assets increased to $2,234.0 million in December 2023 from $2,173.7 million in September 2023[47] - AECOM's investment in unconsolidated joint ventures decreased to $132.5 million in December 2023 from $139.2 million in September 2023[47] - Equity in losses of joint ventures for the three months ended December 31, 2023 was $29.0 million, compared to earnings of $9.8 million in the same period last year[130][134] - Equity in earnings of joint ventures decreased by $42.5 million (758.9%) to $(36.9) million in Q4 2023, primarily due to impairment losses recognized in fiscal 2024[157] Restructuring and Expenses - The company recorded a $38.9 million loss in Q2 2023 related to a revised estimate of contingent consideration receivable from the sale of its civil infrastructure construction business[21] - The company completed the sale of its power and oil and gas construction businesses in fiscal 2021 and 2022, respectively[21] - Dividends declared in Q4 2023 amounted to $30.1 million, an increase from $25.4 million in Q4 2022[10] - Stock repurchases in Q4 2023 totaled $92.1 million, up from $70.0 million in Q4 2022[10] - The company is evaluating the impact of new FASB guidance on segment reporting and income tax disclosures, effective for annual periods beginning October 1, 2025[16][17] - Total compensation expense related to share-based payments was $15.1 million and $11.9 million during the three months ended December 31, 2023 and 2022, respectively[81] - The Company's effective tax rate was 19.5% and 21.0% for the three months ended December 31, 2023 and 2022, respectively[82] - The Company settled its tax audit in Hong Kong for fiscal year 2011 through fiscal year 2021 and recorded a tax benefit of $6.9 million[83] - The Company's non-pension financial assets and liabilities recorded at fair value were $13.9 million, $23.5 million, and $2.4 million as of December 31, 2023[78] - The Company entered into new interest rate swap agreements with a notional value of $400.0 million to manage the interest rate exposure of its variable rate loans[75] - Total lease cost for the three months ended December 31, 2023 was $53.9 million, compared to $55.1 million in the same period in 2022[94] - Operating lease assets as of December 31, 2023 were $437.8 million, a decrease from $447.0 million as of September 30, 2023[95] - Total current lease liabilities as of December 31, 2023 were $171.9 million, compared to $164.8 million as of September 30, 2023[95] - Weighted average remaining lease term for operating leases as of December 31, 2023 was 6.2 years, down from 6.4 years as of September 30, 2023[95] - Cash paid for operating cash flows from operating leases for the three months ended December 31, 2023 was $46.2 million, compared to $49.0 million in the same period in 2022[96] - Total remaining lease payments under operating leases as of December 31, 2023 were $785.6 million, with $134.3 million due in 2024[96] - Accrued salaries and benefits as of December 31, 2023 were $564.5 million, down from $599.8 million as of September 30, 2023[99] - The company incurred restructuring expenses of $16.2 million in the first three months of fiscal 2024, including $8.7 million in personnel costs and $7.5 million in real estate costs[99] - Restructuring costs for the three months ended December 31, 2023 were $16.2 million, primarily related to real estate portfolio alignment and Southeast Asia exits[130][137] - The company expects to incur restructuring costs of $50 million to $70 million in fiscal 2024, primarily related to office real estate optimization and Southeast Asia exits[128] - The company's Board approved an increase in stock repurchase authorization to $1.0 billion in November 2023, with $950.0 million remaining at December 31, 2023[126] - The company exited substantially all of its self-perform at-risk construction businesses as part of its plan to improve profitability and reduce risk[126] - The company's revenue is dependent on its ability to attract and retain qualified employees, secure new contracts, and manage currency rate fluctuations[125] Pension and Employee Benefits - Employer contributions to pension plans for Q4 2023 totaled $8.5 million ($2.3 million for U.S. plans and $6.2 million for non-U.S. plans)[52] - Expected remaining employer contributions for fiscal year 2024 are $26.6 million ($10.6 million for U.S. plans and $16.0 million for non-U.S. plans)[52] - The company's defined benefit pension plans had an aggregate deficit of approximately $157.9 million at December 31, 2023[189] ESG and Credit Agreements - The Credit Agreement includes ESG metrics that adjust interest rates based on CO2 emissions and percentage of female employees[61] - The company has $1,150,000,000 revolving credit facility and $246,968,737.50 term loan A facility, both maturing on February 8, 2026[55] - Letters of credit totaled $4.4 million as of December 31, 2023 and September 30, 2023 under the Company's Revolving Credit Facility[67] - The Company had $1,145.6 million available under its revolving credit facility as of