Amentum Holdings, Inc.(AMTM) - 2025 Q3 - Quarterly Report

PART I: FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section provides the company's unaudited condensed consolidated financial statements and related explanatory notes Condensed Consolidated Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 27, 2025 | September 27, 2024 | | :-------------------------------- | :------------ | :----------------- | | Total assets | $11,808 | $11,974 | | Total liabilities | $7,219 | $7,422 | | Total shareholders' equity | $4,589 | $4,552 | | Cash and cash equivalents | $738 | $452 | | Goodwill | $5,616 | $5,556 | | Intangible assets, net | $2,075 | $2,623 | | Long-term debt, net of current portion | $4,441 | $4,643 | Condensed Consolidated Statements of Operations Details the company's revenues, operating income, and net income (loss) for the three and nine months ended June 27, 2025, and June 28, 2024 Condensed Consolidated Statements of Operations (Three Months Ended, in millions, except per share data) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | % Change | | :----------------------------------------- | :------------ | :------------ | :---------------- | :------- | | Revenues | $3,561 | $2,142 | $1,419 | 66.2% | | Operating income | $103 | $89 | $14 | 15.7% | | Net income (loss) attributable to common shareholders | $10 | $(26) | $36 | -138.5% | | Basic EPS | $0.04 | $(0.29) | $0.33 | -113.8% | | Diluted EPS | $0.04 | $(0.29) | $0.33 | -113.8% | Condensed Consolidated Statements of Operations (Nine Months Ended, in millions, except per share data) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | % Change | | :----------------------------------------- | :------------ | :------------ | :---------------- | :------- | | Revenues | $10,468 | $6,176 | $4,292 | 69.5% | | Operating income | $345 | $264 | $81 | 30.7% | | Net income (loss) attributable to common shareholders | $26 | $(108) | $134 | -124.1% | | Basic EPS | $0.11 | $(1.20) | $1.31 | -109.2% | | Diluted EPS | $0.11 | $(1.20) | $1.31 | -109.2% | Condensed Consolidated Statements of Comprehensive Income (Loss) Outlines the company's comprehensive income (loss), including net income and other comprehensive income (loss) components Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Net income (loss) including non-controlling interests | $(1) | $(24) | | Other comprehensive income (loss), net of tax | $14 | $2 | | Comprehensive income (loss) | $13 | $(22) | Condensed Consolidated Statements of Comprehensive Income (Loss) (Nine Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Net income (loss) including non-controlling interests | $22 | $(105) | | Other comprehensive income (loss), net of tax | $20 | $(7) | | Comprehensive income (loss) | $42 | $(112) | Condensed Consolidated Statements of Shareholders' Equity Summarizes changes in the company's shareholders' equity, including retained deficit and accumulated other comprehensive income - Total Shareholders' Equity increased from $4,552 million at September 27, 2024, to $4,589 million at June 27, 2025[11][18] - Retained deficit improved from $(527) million to $(501) million during the nine months ended June 27, 2025[11][18] - Accumulated other comprehensive income increased from $23 million to $43 million during the nine months ended June 27, 2025[11][18] Condensed Consolidated Statements of Cash Flows Provides an overview of cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Nine Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | | :------------------------------------ | :------------ | :------------ | :---------------- | | Net cash provided by operating activities | $273 | $160 | $113 | | Net cash provided by (used in) investing activities | $236 | $(8) | $244 | | Net cash used in financing activities | $(231) | $(189) | $(42) | | Net change in cash and cash equivalents | $286 | $(34) | $320 | - The increase in operating cash flow was due to a $289 million increase in cash earnings from the CMS merger, partially offset by $176 million in changes in operating assets and liabilities[133] - Investing cash flow increased significantly due to the $360 million sale of the Rapid Solutions business[134][136] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1 — Basis of Presentation Details the company's business, segment realignment, and the significant impact of the CMS merger on financial comparability - Amentum Holdings, Inc. is a global advanced engineering and technology solutions provider to U.S. and allied government agencies[22] - The company realigned its reporting structure into two segments: Digital Solutions (DS) and Global Engineering Solutions (GES)[23] - The merger with Jacobs' Critical Mission Solutions (CMS) business on September 27, 2024, significantly impacts the comparability of current and future financial results to historical results[24][25] Note 2 — Recent Accounting Pronouncements Discusses the company's evaluation of new FASB Accounting Standards Updates (ASUs) on Segment Reporting and Income Taxes - ASU No. 2023-07, Segment Reporting, requires disclosure of significant segment expenses and other segment items, effective for fiscal years beginning after December 15, 2023[28] - ASU No. 2023-09, Income Taxes, enhances transparency of income tax disclosures, effective for fiscal years beginning after December 15, 2024[29] - The company is currently evaluating the impacts of both new standards on its consolidated financial statements[28][29] Note 3 — Acquisition and Divestiture Details the CMS acquisition via a Reverse Morris Trust transaction and the divestiture of the Rapid Solutions business - Completed merger with CMS on September 27, 2024, in a Reverse Morris Trust transaction, with CMS shareholders owning 58.5% of outstanding common stock[30] - Total consideration for the CMS acquisition was $4,032 million, with a preliminary allocation including $2,918 million in goodwill and $1,805 million in intangible assets[31][36] - Sold the Rapid Solutions business to Lockheed Martin Corporation for $360 million in cash on June 26, 2025; the sale was not classified as discontinued operations[37] Note 4 — Revenues Disaggregates revenues by customer type, contract type, and geographic location, highlighting growth drivers and remaining performance obligations Total Revenues by Segment (in millions) | Period | DS | GES |