LOS ANGELES — AECOM Technology Corporation reported second-quarter revenue of $2.0 billion, and revenue, net of other direct costs, of $1.3 billion. Operating income of $80 million and reported net income of $54 million both increased 10 percent, and diluted earnings per share of $0.53 were up 23 percent.

“During the quarter, we executed well against our long-term objectives, including continued expansion in emerging markets and an improved mix of higher-margin technical and construction services,” said John M. Dionisio, AECOM chairman and chief executive officer. “We booked $2 billion in new wins, which contributed to our $17.1 billion in backlog. We saw strength in emerging markets — such as civil infrastructure in Asia as well as transportation and construction services in the Middle East — and we continued to drive improvements in our Management Support Services business, which included actions to diversify that operation for sustained growth and profitability. Given these results, we are reaffirming our full-year EPS guidance range of$2.40 to $2.50.”

“This was our fourth consecutive quarter of free cash flow in excess of net income, as our working-capital initiatives continue to improve returns, drive long-term value and support our capital-allocation priorities,” said Michael S. Burke, AECOM president. “We invested $65 million to repurchase 2 million shares, which brings our year-to-date total to $238 million invested to repurchase 10 million shares. We also made organic investments to advance our long-term strategy, such as the first investment by our AECOM Capital fund, which is structured to make direct investments in real estate and public-private opportunities that can benefit from our comprehensive service offerings.”

New wins and backlog
New wins of $2 billion were driven by strength in the company’s construction and transportation end markets, particularly in North America. The company’s book-to-burn ratio was 1.0 for the quarter, maintaining total backlog at March 31, 2013, of $17.1 billion. These metrics demonstrate the underlying strength of AECOM’s business as clients increasingly turn to the company for its integrated service platform and global expertise.

Tax rate
The company’s second-quarter effective tax rate of 20.6 percent, inclusive of non-controlling interest deduction, reflects the impact in the quarter of the reenactment of research and design tax credits in the U.S. The company expects its full-year effective tax rate to be 27 percent.

Cash flow
Cash flow from operations for the quarter was $85 million. Free cash flow, which includes capital expenditures of $12 million, totaled $74 million. Days sales outstanding (DSOs) improved by 7 days to 91 in the quarter. The company reconfirmed that it is well positioned to meet its fiscal 2013 target of generating free cash flow equal to or in excess of its net income.

Balance sheet
As of March 31, 2013, AECOM had $628 million of total cash and cash equivalents, $1.3 billion of debt and $1.05 billion in committed bank facilities with $717 million in unused capacity.

Business segments
In addition to providing consolidated financial results, AECOM reports separate financial information for its two segments: Professional Technical Services (PTS) and Management Support Services (MSS).

Professional Technical Services
The PTS segment delivers planning, consulting, architecture and engineering design, as well as program and construction management services to institutional, commercial and public sector clients worldwide.

Revenue of $1.77 billion declined 2 percent, and revenue, net of other direct costs, declined 5 percent to $1.11 billion, as declines in Australia and the Americas were only partially offset by growth in Asia. Profitability increased 6 percent aided by broad-based improvements in operating leverage and efficiencies.

Management Support Services
The MSS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government.

Revenue increased 7 percent to $224 million, and revenue, net of other direct costs, increased 12 percent to $142 million driven by growth in the Middle East. Operating income increased over 450 percent to $11 million, aided by improved project performance and cost structure. The company continues to expect full-year operating income, on an adjusted basis5, to double versus last year.

Fiscal 2013 outlook
AECOM’s target EPS range for fiscal 2013 is $2.40 to $2.50. EPS guidance is based on a full-year diluted share count of 103 million shares, which reflects the impact of shares repurchased through the end of the second fiscal quarter. The company expects its full-year effective tax rate to be 27 percent.

Five-year free cash flow target
AECOM reaffirms its five-year free cash flow target of $1.3 billion to $1.8 billion. This target is based on a range of assumptions related to growth, profitability and working capital requirements.