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Q1 2017 Earnings Call
February 07, 2017 12:00 pm ET
William J. Gabrielski - AECOM
Michael S. Burke - AECOM
W. Troy Rudd - AECOM
Stephen M. Kadenacy - AECOM
Andrew Kaplowitz - Citigroup Global Markets, Inc.
Andrew John Wittmann - Robert W. Baird & Co., Inc.
Anna Kaminskaya - Bank of America Merrill Lynch
Jamie L. Cook - Credit Suisse Securities (USA) LLC
Steven Michael Fisher - UBS Securities LLC
Michael S. Dudas - Vertical Research Partners, LLC
Tahira Afzal - KeyBanc Capital Markets, Inc.
Brent Edward Thielman - D.A. Davidson & Co.
Chad Dillard - Deutsche Bank Securities, Inc.
Previous Statements by ACM
» AECOM Technology's (ACM) CEO Mike Burke on Q4 2016 Results - Earnings Call Transcript
» AECOM (ACM) Michael S. Burke on Q3 2016 Results - Earnings Call Transcript
» AECOM (ACM) Michael S. Burke on Q2 2016 Results - Earnings Call Transcript
As a reminder, AECOM is also simulcasting this presentation with slides at the Investors section at the www.aecom.com. Later, we will conduct a question-and-answer session. I would like to turn the call over to Will Gabrielski, Vice President, Investor Relations.
William J. Gabrielski - AECOM
Thank you, operator. Before reviewing our results, I would like to direct you to the Safe Harbor statement on page 1 of today's presentation. Today's discussion contains forward-looking statements about the future growth and financial outcomes.
Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties. Please refer to page 1 of our earnings presentation, and our periodic reports filed with the SEC for more information on our risk factors. Except as required by law, we take no obligation to update our forward-looking statements.
We are using certain non-GAAP financial measures in our presentation. The appropriate GAAP financial reconciliations are incorporated into our press release, which is posted on our website. Please note that all percentages refer to year-over-year progress except where otherwise noted.
Our discussion of financial results and guidance excludes the impact of acquisition and integration-related expenses, financing charges, the amortization of intangible assets and financial impacts associated with expected and actual dispositions of non-core businesses and assets, unless otherwise noted. Today's discussion of organic growth represents the year-over-year change on a constant currency basis.
Beginning today's presentation is Mike Burke, AECOM's Chairman and Chief Executive Officer. Mike?
Michael S. Burke - AECOM
Thank you, Will. Welcome, everyone. Joining me today are Steve Kadenacy, our President and Chief Operating Officer, and Troy Rudd, our Chief Financial Officer. I will begin with an overview of AECOM's results and discuss the trends across our business. Then, Troy will review our financial performance in greater detail. Steve will conclude with financial guidance before turning the call over for a question-and-answer session.
Please turn to slide 3. We began fiscal 2017 with substantial momentum. Over the past two years, we have invested to build the most capable company in our industry. As a result, we are ideally positioned to capitalize on the emerging tailwinds across our core infrastructure and defense markets, where we generate two-thirds of our profits.
Our first quarter results demonstrate this advantage. We delivered positive organic revenue growth across all three of our segments, highlighted by the Americas Design business, which has now grown in three of the last four quarters. We have wins of nearly $6 billion and a 1.3 book-to-burn ratio, including a record $1.7 billion of wins in Management Services and strong contributions across many of our markets. We delivered positive free cash flow, which we now have done for 18 of the past 19 quarters.
And finally, our fully integrated capabilities and focused business development investments are driving results. This trend is no more evident than in the selection of our joint venture to decommission the San Onofre nuclear plant in Southern California. This contract valued at over $1 billion is one of the largest such projects ever undertaken in the United States. Importantly, we are drawing on the capabilities of all three of our segments, which prove to be a critical factor in this pursuit.
As a result of these accomplishments, we exited the first quarter with a record $44 billion backlog, and we are on pace with our fiscal 2017 financial guidance and a five-year financial target we set in December.
Please turn to slide 4 for a discussion of our business and market trends. It is truly unique moment in our industry. A global consensus is forming on the need for substantial infrastructure investments, which is resulting in tremendous activity. This is apparent in our largest market, the Americas, where bipartisan support for infrastructure has taken center stage. This momentum began with the passage of the multi-year $305 billion Fast Act in late 2015, which gave our clients the funding visibility to advance large projects. Numerous state and local initiatives have added to this momentum including the record $200 billion of ballot measures passed last November.
And most recently both President Trump and Senate Democrats have proposed substantial $1 trillion infrastructure plans, the initial details of which are very encouraging. Various sources have identified over $100 billion of prioritized projects within the President's plan.
We are already pursuing opportunities on or have existing exposure to the vast majority of these projects. We're also pleased that the President is emphasizing the need for private sector investment, which is key to addressing long-term market demand.
In addition, early indications from the Senate Democrats' proposal are also promising. The majority of the plan's $1 trillion is concentrated in the transit and water markets where we maintain leading share. We are prioritizing our business development investments to capitalize on this momentum.