On March 13, 2018, AECOM undertook a leverage neutral refinancing to extend tenure and take advantage of favorable credit market conditions, as evidenced by the resulting lower overall borrowing costs on AECOM’s Credit Agreement. A portion of the proceeds from the refinancing are expected to be used to redeem $800,000,000 aggregate principal amount of AECOM’s outstanding 5.75% Senior Notes due 2022 on March 16, 2018.
AECOM, certain of our subsidiaries and certain lenders entered into Amendment No. 5 amending the Credit Agreement, dated as of October 17, 2014 (as amended from time to time, including by Amendment No. 5, the “Credit Agreement”) by:

· Refinancing our term loan A facility to include a $510 million (US) term loan A facility with a term expiring on March 13, 2021, a $500 million Canadian (CAD) term loan A facility and a $250 million Australian (AUD) term loan A facility each with terms expiring on March 13, 2023;

· Issuing a new $600 million term loan B facility to institutional investors with a term expiring on March 13, 2025;

· Increasing the capacity of our revolving credit facility from $1.05 billion to $1.35 billion and extending its term until March 13, 2023;

· Reducing our interest rate borrowing costs as the following rates (1) the term loan B facility, at our election, Base Rate (as defined in the Credit Agreement) plus 0.75% or Eurocurrency Rate (as defined in the Credit Agreement) plus 1.75%, (2) the (US) term loan A facility, at our election, Base Rate plus 0.50% or Eurocurrency Rate plus 1.50%, and (3) the Canadian (CAD) term loan A facility, the Australian (AUD) term loan A facility, and the revolving credit facility, an initial rate of, at our election, Base Rate plus 0.75% or Eurocurrency Rate plus 1.75%, and after the end of the Company’s fiscal quarter ending June 30, 2018, Base Rate loans plus a margin ranging from .25% to 1.00% or Eurocurrency Rate plus a margin from 1.25% to 2.00%, based on the Consolidated Leverage Ratio (as defined in the Credit Agreement); and

· Revising certain covenants, including increasing the amounts available under the restricted payment negative covenant and revising the Maximum Consolidated Leverage Ratio to include a 4.5 leverage ratio through September 30, 2019 after which the leverage ratio steps down to 4.0.

gpv1 schreef: ↑12 maart 2018, 14:44 AECOM’s URS Subsidiary Wins $961M Contract to Help Manage USAF Remotely Piloted Aircraft

9 maart 2018

The URS Federal Services business of AECOM (NYSE: ACM) has won a potential $961 million contract to help the U.S. Air Force operate and maintain three kinds of remotely piloted aircraft.

URS will provide organizational-level maintenance support for the Air Force’s MQ-1 Predator, MQ-9 Reaper and RQ-4 Global Hawk RPA platforms under the indefinite-delivery/indefinite-quantity contract, the Defense Department said Friday.

Work also includes support for MQ-1 and MQ-9 pilot and sensor operators to sustain combat and training readiness of aircraft weapons systems at global tasked locations.

The Air Combat Command’s Acquisition Management and Integration Center received three offers for the IDIQ through a competitive acquisition process.

Base performance period is scheduled to be complete June 30, 2019.

The service branch will obligate $1.8 million in fiscal 2018 operations and maintenance funds at the time of award.

as we exit that portion of the fixed price EPC power market, we're still going to be in the power business, should not in the fixed price EPC arena, but it does allow us to redeploy some of those resources to markets where we think present us a much better return and much better opportunities.

For instance, the nuclear decommissioning space, we won the first big project here in the U.S. for the San Onofre decommissioning. We're focused on Diablo Canyon, which will be the next big decommissioning in the U.S. Bruce Power has a number of decommissioning activities in Canada. So, we see that as a $200 billion opportunity.

And when we look at, how do we deploy our resources, we're constantly looking for opportunities to take resources away from markets that don't present the right margin and the right risk profile. And redirect it towards opportunities that, we think, create much better margin and much better growth opportunity. So, we will certainly be doing that in the power business.

Michael S. Burke - AECOM

Okay. Thank you, operator. So, before we wrap up today's call, I just want to reiterate just a few points that support the tremendous confidence that we have in the business. First of all, we have continued to deliver not just great revenue and backlog, but clearly industry-leading revenue growth and backlog growth and further supported by the $6 billion of wins that we had in the first week of April. And so, we're now up to a $56 billion backlog that gives us quite a bit of long-term visibility.

The second point I want to make is we expect continued momentum in the business mainly due to the growth in the higher margin segments of DCS and MS, and that gives us a great deal of comfort and confidence in the long-term profitable growth of this business.

And then, finally, and most importantly, we remain committed to driving value for our shareholders and you saw that evidenced by some of the strategic decisions that we announced today. We are constantly looking at how we allocate capital and ensuring that we are focused on the right capital allocation to the right growth opportunities and that caused us to de-risk our portfolio by extracting ourselves from the EPC power market. And it caused us to redeploy capital away from the Canadian heavy crude Oil & Gas business and that will allow us to accelerate the stock buyback program that we have previously announced once we get to our desired debt ratio of 2.5 times during this fiscal year.

So, we are quite confident in the current state of our business and even more confident in the future of our business. So, thank you for your continued interest in AECOM and thank you for participating today. Have a great day.

AECOM awarded 15-year, US$3.1 billion contract to provide U.S. Air Force with range support services
LOS ANGELES (May 23, 2018) — AECOM (NYSE:ACM), a premier, fully integrated global infrastructure firm, announced today that its wholly owned subsidiary, JT4 Limited Liability Company (LLC), was awarded in the month of April a 15-year contract from the U.S. Air Force for Joint Range Technical Services (J-Tech II). The US$3.1 billion, cost-plus-award-fee contract is expected to be completed by April 15, 2033. The value of this contract, along with previous contracts in this services sector, will be added to AECOM’s backlog for the third quarter of fiscal year 2018.
“We are honored to continue our relationship with the U.S. Air Force and Navy, serving as their primary partner for range support services,” said Michael S. Burke, AECOM’s chairman and chief executive officer. “Leveraging our expanded capabilities and scale, this substantial award underscores the continued transformational backlog growth that we are driving in our Management Services business, our highest-margin segment.”
“For many years, we have established an excellent track record of providing services through the J-Tech program,” said John C. Vollmer, AECOM’s president of its Management Services group. “We have supported testing and training missions with a commitment to safety, innovation and operational excellence. Our continued partnership with the U.S. Air Force and Navy speaks to our success in safely and successfully supporting this very important program.”
Through this contract, AECOM will continue to provide for operation, maintenance and sustainment of the western test and training ranges. Work will be performed at the 412th Test Wing, California; Utah Test and Training Range, Utah; Nevada Test and Training Range, Nevada; the Naval Air Warfare Center Weapons Division, California; and the Space Test and Training Range, Colorado.

Free cash flow was $48 million. Our cash flow was positive for the 23rd time in 25 quarters, however, this was below our normal third quarter performance.

There were a few items that impacted this result. First, we continue to make investments in growth. We grew by double digits in the quarter but this growth required a working capital investment to accelerate and deliver storm recovery work.

While we expect this work to remain at high levels, billings have increased and we expect cash flow to improve in the fourth quarter and into 2019. Second, through the course of selling noncore parts of the oil and gas business, there was some distraction in the business that led to a few larger collections shifting into the fourth quarter and possibly 2019.

Finally, AECOM Capital realizations are expected to benefit our cash flow in the fourth quarter this year versus the third quarter last year. While we still expect free cash flow to meet or exceed $600 million for a fourth straight year, because of these impacts we expect to be closer to the low end of our $600 million to $800 million guidance. However, I want to emphasize that we have not experienced a fundamental shift in the cash generative nature of our business.

I don't want to get too specific on 2019 yet, but I take your point. Things are looking better than expected and all the signs we're seeing now and the momentum of the business leads us to believe that we're going to do better than our five-year guidance numbers in 2019.

&

And just in terms of your question on cash, there's nothing fundamentally changed in our business. As I said this in the prepared comments as to how we convert earnings to cash. And as Mike said, in our five-year plan we had expected 5% organic growth.

And so, we are ahead of that now. We have more confidence in that. But I don't see that impacting our three year – or sorry our five-year free cash flow. And the other thing that we're seeing is we are seeing an improved mix more towards U.S. base and North American clients which again also brings down the DSOs over the long term. And we'd see that improvement helping working capital over the five years.