AECOM

and welcome to the ACOM second quarter 2023 conference call. I would like to inform all participants this call is being recorded at the request of ACOM. This broadcast is the copyrighted property of ACOM. Any rebroadcast of this information in whole or part that the prior written permission of ACOM is prohibited. As a reminder, ACOM is also simulcasting this presentation with slides at the investors section at www.acom.com. Later, we will conduct a question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you choose to enjoy your question, please press star followed by two. I would now like to turn the call over to Will Gabrielski, Senior Vice President, Finance, Treasury, and Investor Relations.

Thank you, Operator. I would like to direct your attention to the safe harbor statement of page one of today's presentation. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainty, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. We use certain non-GAAP financial measures in our presentation. The appropriate GAAP reconciliations are incorporated into our materials, which are posted to our website. Any references to segment margins or segment-adjusted operating margins will reflect the performance for the Americas and international segments. When discussing revenue and revenue growth, we will refer to net service revenue, or NSR, which is defined as revenue excluding pass-through revenue. NSR and backlog growth rates are presented on a constant currency basis unless otherwise noted. Beginning this quarter, results for AECOM Capital will be reported as non-core and will be excluded from current and comparable prior period adjusted results. Today's remarks will focus on continuing operations, excluding AECOM Capital. On today's call, Troy Rudd, our Chief Executive Officer, will review our key accomplishments, our strategy, and our outlook for the business. Laura Poloni, our President, will discuss the key operational successes and priorities. And Garb Kapoor, our Chief Financial Officer, will review our financial performance and outlook in greater detail. We will conclude with a question and answer session. With that, I will turn the call over to Troy.

Thank you, Will, and thank you all for joining us today. The strength of our second quarter performance was underpinned by our competitive advantage, our technical leadership, and our disciplined returns-focused capital allocation policy. Our leadership position was reaffirmed last month by E&R, where we were again recognized as the top-ranked transportation and facilities design firm. We also continue to hold the number one rankings in environmental engineering and environmental science. These recognitions are well-deserved, and I would like to thank all of our people for a strong first half of the year and for building a company that reflects our shared purpose of delivering a better world. Turning to our financial performance, our second quarter results were highlighted by 8% organic NSR growth in our design business, continued margin expansion, a new quarterly high for adjusted EBITDA, and strong EPS growth. Importantly, our quarterly wins, backlog, and pipeline of opportunities hit record levels, with proposals and bids submitted continuing to accelerate at a very strong rate. This is reflective of the competitive advantages we have created through investing in our teams, expanding our addressable market, and by focusing our time and capital on the highest returning organic growth opportunities. Our performance included a record quarter of wins and a 1.5 book-to-burn ratio in the design business, with strength across both the Americas and international segments. Our win rates are well ahead of both internal benchmarks and historical performance. We are winning more than half of every dollar we bid, and on large global bids in the first half of the year, we are winning at an even greater than 70% rate. This success has transformed the composition of our backlog. Today, 30% of wins are valued at greater than $25 million, more than double what it was just a few years ago. When combined with our higher margins, we have substantial visibility and even greater confidence in delivering on our long-term objectives. Please turn to the next slide. Key to our success is the realization of several elements of our strategy. First, collaboration. We've instilled a cultural of collaboration and technical excellence to ensure that we bring the best and brightest thinking to each and every pursuit. Having a truly diverse set of experiences and ideas to solve some of the most challenging infrastructure problems has been a key competitive differentiator. Second, expanding our addressable market. Organic investments in advisory and program management have elevated our engagement with clients and extended our opportunities. Third, investing in our teams. We have made substantial investments in benefits programs, work-life flexibility, technical excellence, and leadership development to enhance our employees' value proposition. As a result, against a backdrop of rising demand and stagnant overall workforce growth, voluntary attrition rates are substantially ahead of our internal targets and key benchmarks for professional services companies. Fourth, discipline allocation of time and capital. Our first dollar of capital goes towards the highest returning organic growth opportunities. This has resulted in our record high backlog and win rate and expanded earnings capacity of the business. And we are confident that additional award decisions in the second half of the year will further expand our visibility. Finally, superior value creation. After investing in organic growth, we deploy our strong cash flow to the next highest returning opportunities, which for us remains share repurchases and dividends. As a result, we have returned more than $1.6 billion of capital to shareholders since September 2020, and have repurchased more than 16% of shares outstanding at a highly attractive return. Please turn to the next slide. Looking ahead, the three secular megatrends benefiting our markets are accelerating. These include continued investment in global infrastructure, sustainability and resilience, and long-term supply chain and energy transitions. As these recent winds indicate, we are in a leading position to deliver as these trends gain momentum. Let me share a few examples. First, in the areas of sustainability and resilience, we were recently selected to provide PFAS remedial investigation and feasibility studies for the U.S. Army National Guard. This wind drew on our environmental and water expertise, multiple decades of PFAS-related client work, and innovative solutions to address the long-term management of PFAS. We were also selected to deliver technical and program management services for a large wastewater treatment program in California. This win builds on several large water wins we've had in the western United States over the past several quarters and reinforces our leading position ahead of accelerating investments to address long-term water security. Second, we continue to demonstrate our leadership in energy transitions and decarbonization. Most recently, the Office of Clean Energy and Demonstrations for the U.S. Department of Energy awarded us a contract that draws on the expertise of our environment and water teams in advancing competitive grants for new clean energy solutions under the IIJA. In addition, for the City of Rialto, we combined our sustainability and energy expertise to develop and design a comprehensive microgrid solution to enhance operational resiliency for the City's wastewater treatment plant. We're now leading the implementation of this project while also aiding both the City and its water utility in procuring tax incentives available under the IIJA and WIFIA. This project is also a great example of our expanded addressable market where we are able to play a more meaningful role in our client's success by engaging earlier and providing multiple professional services. Finally, our world-class program management capabilities continue to create a competitive advantage as projects increase in size and complexity. Several wins in the quarter, such as the sizable California Water project that I mentioned a moment ago and a large international airport project are great representations of the power of combining our technical expertise with program management to create a higher value solutions for our clients. As a result, NSR and the program management business has grown at a strong double-digit annual pace over the last several years, and we continue to see opportunities for growth ahead. Taken together, we are executing exceptionally well on our key priorities. I'm pleased with the discipline of our leadership to continue to deliver organic growth, invest and build in our backlog, invest in our people and expand our competitive advantage, all while continuing to improve our margins. With a robust growth outlook across our core markets, we remain confident in delivering superior long-term value to our stakeholders. With that, I will turn the call over to Laura.