1. Imagine the result Cash Flow Imagine the result

2.  Gross Revenue  Net Revenue  Effective Multiplier  Financial Billability  Operating Income ( Income after Corporate Overhead)  Return on Net Revenue ( Income percent of net revenue)  Bookings  Backlog þ DRO ( Days Revenue Outstanding ) Key Financial Metrics

3. Imagine the result Why Does Cash Flow Matter? 90% of AUS’s total tangible assets are cash & receivables making DRO the key balance sheet metric Allows us to fund investments, make acquisitions and invest in growth Key measurement of our financial health to clients, business partners, and shareholders.

4. Imagine the result Cash Management Cycle Client Go/No Go Opportunity Go/No Go ProposalContract Project Execution Invoicing CollectionsCloseout

5. Imagine the result Credit Review The credit review is a key element of the client approval process. Typically requires a 24 hour turnaround Coordinated through credit and collections managers with their available resources D&Bs/D&B Alert Program (Existing Clients) Credit Applications SEC search – Annual Reports, 10Ks, 10Qs Public Records Internet Moody Existing clients internal payment history

6. Imagine the result The Go / No-Go Decision For Non-Public Companies: Review payment history and financial condition with finance Detailed review of D&B report – PAYDEX Score Negotiate high multipliers, push for retainers, especially for new or Non-tier clients.

7. Imagine the result The D&B Report What’s in it? History Operations Public Filings - UCC Filings – collateral agreements Suits, Judgments, Liens – bankruptcy records Paydex – 3/12 month score – how vendors are being paid Company Financials – balance sheet, P&L, trend analysis, financial ratios, statement of cash flow, etc. Special Events – work force changes, natural disaster's, earnings updates, ownership changes, stock/bond issuance/redemptions The Credit Rating – Tangible net worth combined with key credit factors (1-4)

8. Imagine the result What’s an FSS? Financial Stress Score from D&B Lowest risk 1 – highest risk 5 Score of 1 indicates a failure rate (bankruptcy) of 1.2% or 120 per 10,000 companies Represents risk of severe financial stress over the next 12 months Model uses statistics from D&B files to predict deterioration including but not limited to; Trade payments Balance Sheet/P&L Operational/ownership changes Relationships to other firms’ in same industry and all firms in database Industry, size, years in business, etc.

9. Imagine the result What’s an CCSC? Commercial Credit Score Class from D&B Lowest risk 1 – Highest risk 5 Predicts likelihood of a firm paying in a severely delinquent manner (90+ days past terms) over the next 12 months Based upon a statistically valid model and the most recent payment information in D&Bs files Uses some of the same criteria as the FSS but more emphasis on payment statistics

10. Imagine the result During Contract Negotiations… Educate the client on our process, terms Ensure contract spells out all invoicing requirements Understand and document client’s schedule for invoicing Request Retainer – if possible With private sector clients – know your state’s lien right requirements Develop a cash flow model to look at timing of cash and cost on lump sum projects Negotiate favorable payment milestones

11. Imagine the result During Contract Negotiations Avoid Payment terms outside of 30 days Discounts for prompt payments Retainage if possible – may not be Unfavorable milestone billing requirements Volume Discounts Credit Card payments, whenever possible Subcontractor not on pay-when- paid terms

12. Imagine the result Unbilled AR

13. Imagine the result Unbilled Revenue Definition Unbilled Revenue = JTD Revenue – JTD Billings Goal: No Balance over 45 Days In a perfect world there should never be any Unbilled over 45 Days 0-30 Days is the current month (Labor posted in open account period) 31-60 Days is the prior month (Labor posted in prior account period) – should be billed by day 45 Any Unbilled > 45 days at this point has a story OR is potentially at risk of not being billed.

14. Imagine the result Unbilled Monitoring Activities Work with PM Weekly UB Reports available “Who charged my project this week” is a very useful tool in managing unbilled. If UB is not billable –write down the revenue as soon as possible Monitoring Unbilled can and should be part of all project reviews

15. Imagine the result Accounts Receivable (Billed AR)

16. Imagine the result Accounts Receivable Definition: All amounts billed to clients, but unpaid. Strive toward industry best in class of 45 days or less. Days outstanding is a critical element of project management – measure of quality and client satisfaction. We need to be proactive in our monitoring – don’t be afraid to ask!

17. Imagine the result Accounts Receivable Monitoring Activities 15 Day Call Criteria – All invoices greater than $10,000 posted to our accounting systems 15 days prior. Call is an opportunity to contact the client and verify that the invoice was received. This is NOT a Collection Call, it is a courtesy call. Used to identify potential invoice processing delays. There are a number of ways to verify receipt of invoice: PM can delegate to Project Assistant to verify. PM can request the Invoice Specialist confirm receipt. Credit and collections team can contact Client to confirm Email confirmation that the invoice was delivered.

18. Imagine the result Accounts Receivable Monitoring Activities – Con’t. Revenue detailed exceptions report (i.e. balance 90+ days and greater than $10K) Incorporate discussion of accounts receivable into project reviews and/or monthly financial meetings Continue follow-up with clients, especially when greater than 60 days

19. Imagine the result DRO and Interest Calculation

20. Imagine the result Income Statement - Expense Items A/R Interest Finance charge based on project DRO; 10% in excess of 91 days; credit of 10% if lower than 75 days The business unit interest charge is the total of the projects in the business unit Accounts Receivable + Unbilled Revenue Average Revenue Past 91 days DRO =

21. Imagine the result Days Revenue Outstanding Calculation Previous Period AR/UB: BILLED AR $ 20,767 UNBILLED AR $ 19,659 TOTAL UB/AR $ 40,427 If DRO < 75 Days: Interest Calculation 51 – 75 = (24) days Interest rate (month) 10%(APR)/(12 months) = 0.8333% (24) days * $790 = ($18,983) Revenue Earned Under 65 days Interest: Charge/(Credit) ($ 18,983) * 0.833% = ($158) Average Revenue per Day = Last 3 mo Gross Revenue/91 days $71,978/91=$790 Avg Rev/Day DRO = TOTAL UB AND AR $ 40,427/ Avg Rev per Day $790 = 51 DAYS If DRO > 91 Days: 11 days * $790 = $8,700 Revenue Earned Over 91 days Interest: Charge/(Credit) $ 8,700 * 0.833% = $72 102 – 91 = 11 days

22. Imagine the result CREDIT IS A PRIVILEGE AND NOT A RIGHT Economic conditions and a firm’s credit policy are the primary drivers of the level/aging of accounts receivable

23. Imagine the result Remember Positive Cash Flow is the #1 sign of a healthy business