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Item 7. Management’s Discussion and Analysis

2025-11-19 compared with 2024-11-19 · 162 added, 209 removed, 423 unchanged (47% of the section changed)

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government shutdowns;

long-term government contracts and subject to uncertainties related to government contract appropriations;

governmental agencies may modify, curtail or terminate our contracts;

changes in administration or other funding directives and circumstances that cause governmental agencies to modify, curtail or terminate our contracts;

government contracts are subject to audits and adjustments of contractual terms;

long-term government contracts are subject to uncertainties related to government contract appropriations;

losses under fixed-price contracts;

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liability for misconduct by our employees or consultants;

failure to comply with laws or regulations applicable to our business;

changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business;

maintaining adequate surety and financial capacity;

potential high leverage and inability to service our debt and guarantees;

ability to continue payment of dividends;

exposure to political and economic risks in different countries, including tariffs, geopolitical events, and conflicts;

currency exchange rate and interest fluctuations;

our capital allocation strategy, including our ability to continue payment of dividends;

exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events, and conflicts;

inflation, currency exchange rates and interest rate fluctuations;

changes in capital markets and stock market volatility;

retaining and recruiting key technical and management personnel;

legal claims;

legal claims and litigation;

inadequate insurance coverage;

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risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect;

as well as other additional risks and factors discussed in this Annual Report on Form 10-K and any subsequent reports we file with the SEC.

risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures, as well as other additional risks and factors discussed in this Annual Report on Form 10-K and any subsequent reports we file with the SEC.

Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.

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For clarity of presentation, we present all periods as if the year ended on September 30.

We refer to the fiscal year ended September 30, 2023 as “fiscal 2023” and the fiscal year ended September 30, 2024 as “fiscal 2024.” Fiscal years 2024, 2023, and 2022 each contained 52, 52, and 52 weeks, respectively, and ended on September 27, September 29, and September 30, respectively.

We refer to the fiscal year ended September 30, 2024 as “fiscal 2024” and the fiscal year ended September 30, 2025 as “fiscal 2025.”

In this section, we discuss the results of our operations for the year ended September 30, 2025 compared to the year ended September 30, 2024.

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• International:

Planning, advisory, consulting, architectural and engineering design services and program management to public and private clients in Europe, the Middle East, India, Africa and the Asia-Australia-Pacific regions in major end markets such as transportation, water, government, facilities, environmental, and energy.

Planning, advisory, consulting, architectural and engineering design services, site supervision and program management to public and private clients in Europe, the Middle East, India, Africa and the Asia-Australia-Pacific regions in major end markets such as transportation, water, government, facilities, environmental, and energy.

• AECOM Capital (ACAP):

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We intend to deploy future available cash towards dividends and stock repurchases consistent with our returns driven capital allocation policy.

We have exited substantially all of our former self-perform at-risk construction businesses.

We have exited substantially all of our self-perform at-risk construction businesses.

As part of our ongoing plan to improve profitability and maintain a reduced risk profile, we continuously evaluate our geographic exposure.

We completed a transaction that transitioned the AECOM Capital team to a new third-party platform in the third quarter of fiscal 2024.

The team will continue to support AECOM Capital’s investment vehicles pursuant to certain advisory agreements in a manner consistent with their current obligations.

There was one business acquisition consummated during the year ended September 30, 2024, and there were no acquisitions consummated during the years ended September 30, 2023 and 2022.

Members of the legacy team continue to support AECOM Capital's investment vehicles pursuant to certain advisory agreements in a manner consistent with their historical responsibilities.

There were two business acquisition consummated during the year ended September 30, 2025.

There was one acquisition consummated during the year ended September 30, 2024 and there was no acquisition consummated during the year ended September 30, 2023.

All of our business acquisitions have been accounted for as business combinations and the results of operations of the acquired companies have been included in our consolidated results since the dates of the acquisitions.

Those results of operations were not material to our consolidated results.

Components of Income and Expense

Year Ended September 30,

2025 2024 2023 2022 2021

(in millions)

Other Financial Data:

Revenue $ 16,140 $ 16,105 $ 14,378 $ 13,148 $ 13,341

Cost of revenue 14,923 15,021 13,433 12,300 12,543

Gross profit 1,217 1,084 945 848 798

Equity in earnings (losses) of joint ventures 27 2 (279) 54 35

General and administrative expenses (158) (160) (154) (147) (155)

Restructuring costs

Restructuring and acquisition costs (59) (99) (188) (108) (48)

Income from operations $ 1,027 $ 827 $ 324 $ 647 $ 630

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Cost of revenue reflects the cost of our own personnel (including fringe benefits and overhead expense) and fees from subcontractors and other direct costs associated with revenue.

Amortization Expense of Acquired Intangible Assets

Included in our cost of revenue is amortization of acquired intangible assets.

We have ascribed value to identifiable intangible assets other than goodwill in our purchase price allocations for companies we have acquired.

These assets include, but are not limited to, backlog and customer relationships.

To the extent we ascribe value to identifiable intangible assets that have finite lives, we amortize those values over the estimated useful lives of the assets.

Such amortization expense, although non-cash in the period expensed, directly impacts our results of operations.

Equity in Earnings of Joint Ventures

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General and administrative expenses include corporate expenses, including personnel, occupancy, and administrative expenses.

Restructuring Costs

Restructuring costs are comprised of personnel and other costs, real estate costs, and costs associated with business exits primarily related to actions that are expected to deliver continued margin expansion and operating efficiencies.

Restructuring and Acquisition Costs

Restructuring and acquisition costs are comprised of personnel and other costs, real estate costs, and costs associated with business exits and acquisitions primarily related to actions that are expected to deliver continued margin expansion and operating efficiencies.

Geographic Information

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Costs attributable to claims are treated as costs of contract performance as incurred.

Government Contract Matters

Our federal government and certain state and local agency contracts are subject to, among other regulations, regulations issued under the Federal Acquisition Regulations (FAR).

These regulations can limit the recovery of certain specified indirect costs on contracts and subject us to ongoing multiple audits by government agencies such as the Defense Contract Audit Agency (DCAA).

In addition, most of our federal and state and local contracts are subject to termination at the discretion of the client.

Audits by the DCAA and other agencies consist of reviews of our overhead rates, operating systems and cost proposals to ensure that we account for such costs in accordance with the Cost Accounting Standards of the FAR (CAS).

If the DCAA determines we have not accounted for such costs consistent with CAS, the DCAA may disallow these costs.

There can be no assurance that audits by the DCAA or other governmental agencies will not result in material cost disallowances in the future.

Allowance for Doubtful Accounts and Expected Credit Losses

We record accounts receivable net of an allowance for doubtful accounts.

This allowance for doubtful accounts is estimated based on management’s evaluation of the contracts involved and the financial condition of our clients.

The factors we consider in our contract evaluations include, but are not limited to:

● Client type—federal or state and local government or commercial client;

● Historical contract performance;

● Historical collection and delinquency trends;

● Client credit worthiness;

● General economic conditions.

Contract Assets and Contract Liabilities

Contract assets represent the contract revenue recognized but not yet billed pursuant to contract terms.

Contract liabilities represent the billings to date, as allowed under the terms of a contract, but not yet recognized as contract revenue using our revenue recognition policy.

Investments in Unconsolidated Joint Ventures

We have noncontrolling interests in joint ventures accounted for under the equity method.

Fees received for and the associated costs of services performed by us and billed to joint ventures with respect to work done by us for third-party customers are recorded as our revenues and costs in the period in which such services are rendered.

In certain joint ventures, a fee is added to the respective billings from both us and the other joint venture partners on the amounts billed to the third-party customers.

These fees result in earnings to the joint venture and are split with each of the joint venture partners and paid to the joint venture partners upon collection from the third-party customer.

We record our allocated share of these fees as equity in earnings of joint ventures.

Additionally, our ACAP segment primarily invests in real estate projects.

We provide for income taxes in accordance with principles contained in ASC Topic 740, Income Taxes .

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Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets may not be realized.

The evaluation of the recoverability of the deferred tax asset requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized.

The evaluation of the recoverability of the deferred tax asset

requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized.

The weight given to the evidence is commensurate with the extent to which it can be objectively verified.

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operations and we recognize the tax impact of these initiatives, including changes in assessment of its uncertain tax positions, indefinite reinvestment exception assertions and realizability of deferred tax assets, earliest in the period when management believes all necessary internal and external approvals associated with such initiatives have been obtained, or when the initiatives are materially complete.

Goodwill and Acquired Intangible Assets

Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition.

In order to determine the amount of goodwill resulting from an acquisition, we perform an assessment to determine the value of the acquired company’s tangible and identifiable intangible assets and liabilities.

In our assessment, we determine whether identifiable intangible assets exist, which typically include backlog and customer relationships.

We test goodwill for impairment annually for each reporting unit in the beginning of the fourth quarter of the fiscal year and between annual tests, if events occur or circumstances change which suggest that goodwill should be evaluated.

Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors.

A reporting unit is defined as an operating segment or one level below an operating segment.

Our impairment tests are performed at the operating segment level as they represent our reporting units.

Goodwill is evaluated for impairment either by assessing qualitative factors or by performing a quantitative assessment.

Qualitative factors, such as overall financial performance, industry or market considerations, or other relevant events, are assessed to determine if it is more likely than not that the fair value of the reporting units is less than their carrying amounts.

During a quantitative impairment test, we estimate the fair value of the reporting unit using income and market approaches, and compare that amount to the carrying value of that reporting unit.

In the event the fair value of the reporting unit is determined to be less than the carrying value, goodwill is impaired, and an impairment loss is recognized equal to the excess, limited to the total amount of goodwill allocated to the reporting unit.

The impairment evaluation process includes, among other things, making assumptions about variables such as revenue growth rates, profitability, discount rates, and industry market multiples, which are subject to a high degree of judgment.

There are inherent uncertainties related to each of the above listed assumptions, and our judgment in applying them.

Changes in the assumptions used in our goodwill and intangible assets could result in impairment charges that could be material to our consolidated financial statements in any given period.

We have not materially changed our estimation methodology during the periods presented.

Pension Benefit Obligations

A number of assumptions are necessary to determine our pension liabilities and net periodic costs.

These liabilities and net periodic costs are sensitive to changes in those assumptions.

The assumptions include discount rates, long-term rates of return on plan assets and inflation levels limited to the United Kingdom and are generally determined based on the current economic environment in each host country at the end of each respective annual reporting period.

We evaluate the funded status of each of our retirement plans using these current assumptions and determine the appropriate funding level considering applicable regulatory requirements, tax deductibility, reporting considerations and other factors.

Based upon current assumptions, we expect to contribute $24.2 million to our international plans in fiscal 2025.

Our required minimum contributions for our U.S.

qualified plans are not significant.

In addition, we may make additional discretionary contributions.

We currently expect to contribute $11.2 million to our U.S.

plans (including benefit payments to nonqualified plans and postretirement medical plans) in fiscal 2025.

If the discount rate was reduced by 25 basis points, plan liabilities would increase by approximately $30.7 million.

If the discount rate and return on plan assets were reduced by 25 basis points, plan expense would decrease by approximately $0.4 million and increase by approximately $2.8 million, respectively.

If inflation increased by 25 basis points, plan liabilities in the United Kingdom would increase by approximately $15.1 million and plan expense would increase by approximately $0.9 million.

At each measurement date, all assumptions are reviewed and adjusted as appropriate.

With respect to establishing the return on assets assumption, we consider the long-term capital market expectations for each asset class held as an investment by the various pension plans.

In addition to expected returns for each asset class, we take into account standard deviation of returns and correlation between asset classes.

This is necessary in order to generate a distribution of possible returns which reflects diversification of assets.

Based on this information, a distribution of possible returns is generated based on the plan’s target asset allocation.

Capital market expectations for determining the long-term rate of return on assets are based on forward-looking assumptions which reflect a 20-year view of the capital markets.

In establishing those capital market assumptions and expectations, we rely on the assistance of our actuaries and our investment consultants.

We and the plan trustees review whether changes to the various plans’ target asset allocations are appropriate.

A change in the plans’ target asset allocations would likely result in a change in the expected return on asset assumptions.

In assessing a plan’s asset allocation strategy, we and the plan trustees consider factors such as the structure of the plan’s liabilities, the plan’s funded status, and the impact of the asset allocation to the volatility of the plan’s funded status, so that the overall risk level resulting from our defined benefit plans is appropriate within our risk management strategy.

Between September 30, 2023 and September 30, 2024, the aggregate worldwide pension deficit decreased from $165.3 million to $134.0 million due to an increase in the actual return on plan assets partially offset by decreased discount rates.

If the various plans do not experience future investment gains to reduce this shortfall, the deficit will be reduced by additional contributions.

Accrued Professional Liability Costs

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Consolidated Results

Fiscal Year Ended

Fiscal Year Ended Change

September 30,

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($ in millions)

Revenue $ 16,139.6 $ 16,105.5 $ 34.1 0.2 %

Cost of revenue 14,922.9 15,021.2 (98.3) (0.7)

Equity in earnings (losses) of joint ventures

Gross profit 1,216.7 1,084.3 132.4 12.2

Equity in earnings of joint ventures

27.0 2.1 24.9 1,185.7

General and administrative expenses (157.8) (160.1) 2.3 (1.4)

Restructuring cost

Restructuring and acquisition costs

(59.4) (98.9) 39.5 (39.9)

Income from operations 1,026.5 827.4 199.1 24.1

Other income 10.5 17.6 (7.1) (40.3)

Interest income 62.9 58.6 4.3 7.3

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Net loss from discontinued operations (75.4) (105.0) 29.6 (28.2)

Net income 636.2 460.2 176.0 38.2

Net income attributable to noncontrolling interests from continuing operations (73.3) (59.3) (14.0) 23.6

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2025 September 30,

Revenue 100.0 % 100.0 %

Cost of revenue 92.5 93.3

Equity in earnings (losses) of joint ventures

Gross profit 7.5 6.7

Equity in earnings of joint ventures

General and administrative expenses (0.9) (1.0)

Restructuring costs

Restructuring and acquisition costs

Income from operations 6.4 5.1

Other income 0.1 0.1

Interest income 0.4 0.4

4 unchanged sentences

Net loss from discontinued operations (0.5) (0.6)

Net income 3.9 2.9

Net income attributable to noncontrolling interests from continuing operations (0.5) (0.4)

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Our revenue for the year ended September 30, 2025 increased $34.1 million, or 0.2%, to $16,139.6 million as compared to $16,105.5 million for the corresponding period last year.

Revenue increased across most of our end markets as a result of increased investment by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S.

The portion of revenue excluding pass-through revenues attributable to subcontractors increased for the year ended September 30, 2025.

Underlying revenue excluding pass-through revenues increased across most of our end markets as a result of increased investment by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S.

and similar large programs in our largest end markets globally.

Our Water end market has been benefiting from increased investment to address drought, flooding, and drinking water scarcity.

Our Transportation end market has been benefitting from incremental surface and transit investments across the globe, while our Environment end market has been benefiting from infrastructure that requires permitting and compliance, as well as investments in energy.

Our Facilities end market has been benefiting from positive trends in asset maintenance repositioning and demand for modern, efficient facilities.

Our Water end market has been benefiting from increased investment to address drought, flooding, emerging containment remediation, water storage, and clean and safe drinking water.

Our Transportation end market has been benefitting from incremental investments across the globe to modernize transportation infrastructure and address growth and urbanization trends, while our Environment end market has been benefiting from infrastructure that requires permitting and compliance, and remediation as well as investments in energy.

Our Facilities end market has been benefiting from positive public sector investment, trends in asset maintenance and repositioning as well as demand for modern, efficient facilities.

The quantification of the impact of these trends by end market is noted within our Americas and International reportable segments discussion below, where applicable, and represents substantially all of our revenue change.

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Cost of Revenue

Our cost of revenue increased to $15,021.2 million for the year ended September 30, 2024 compared to $13,433.0 million for the corresponding period last year, an increase of $1,588.2 million, or 11.8%.

Our cost of revenue decreased to $14,922.9 million for the year ended September 30, 2025 compared to $15,021.2 million for the corresponding period last year, a decrease of $98.3 million, or 0.7%.

Substantially all of the change in our cost of revenue for the year ended September 30, 2025 occurred in our Americas and International reportable segments, which is discussed in more detail below.

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Gross profit changes were due to the reasons noted in Americas and International reportable segments below.

Equity in Earnings (Losses) of Joint Ventures

Our equity in earnings of joint ventures for the year ended September 30, 2024 was $2.1 million as compared to equity in loss of $279.4 million in the corresponding period last year.

The increase in equity in earnings of joint ventures for the year ended September 30, 2024 compared to the same period in the prior year was primarily due to impairment losses recorded by our AECOM Capital segment in fiscal 2023 that did not repeat to the same extent in fiscal 2024.

Equity in Earnings of Joint Ventures

Our equity in earnings of joint ventures for the year ended September 30, 2025 was $27.0 million as compared to $2.1 million in the corresponding period last year.

The increase in equity in earnings of joint ventures for the year ended September 30, 2025 compared to the same period in the prior year was primarily due to impairment losses recorded by our AECOM Capital segment in fiscal 2024 that did not repeat in fiscal 2025.

General and Administrative Expenses

Our general and administrative expenses for the year ended September 30, 2024 increased $6.5 million, or 4.2%, to $160.1 million as compared to $153.6 million for the corresponding period last year.

Our general and administrative expenses for the year ended September 30, 2025 decreased $2.3 million, or 1.4%, to $157.8 million as compared to $160.1 million for the corresponding period last year.

For the year ended September 30, 2025, general and administrative expenses as a percentage of revenue decreased to 0.9% from 1.0% for the corresponding period last year.

Restructuring Costs

Restructuring costs are comprised of personnel costs, real estate costs, and costs associated with business exits.

The decrease in general and administrative expenses for the year ended September 30, 2025 was primarily due to ongoing efforts to drive efficiencies and streamline operations.

Restructuring and Acquisition Costs

Restructuring and acquisition costs are comprised of personnel costs, real estate costs, and costs associated with business acquisitions and exits.

During the fiscal year ended September 30, 2025, we incurred total restructuring expenses of $59.4 million primarily related to actions taken for acquisitions and optimizing our organization structure.

During fiscal year ended September 30, 2024, we incurred total restructuring expenses of $98.9 million primarily related to costs incurred to continue to align our real estate portfolio with our employee flexibility initiatives, continue our exit of certain countries in Southeast Asia, drive support function efficiency, and reduce our risk profile.

During fiscal year ended September 30, 2023, we incurred total restructuring expenses of $188.4 million, primarily related to actions taken to align our real estate portfolio with our employee flexibility initiatives and costs incurred in preparation for the exit of specific countries in Southeast Asia.

Our other income for the year ended September 30, 2024 increased to $17.6 million from $8.3 million for the corresponding period last year.

The increase in other income for the year ended September 30, 2024 was primarily due to the increase in fair value of our investments measured at fair value.

Our other income for the year ended September 30, 2025 decreased to $10.5 million from $17.6 million for the corresponding period last year.

The decrease in other income for the year ended September 30, 2025 was primarily due to the decrease in fair value of our investments measured at fair value.

Interest Income

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Our interest expense for the year ended September 30, 2025 was $184.3 million as compared to $185.4 million for the corresponding period last year.

The increase in interest expense for the year ended September 30, 2024 was primarily due to an increase in our debt as well as $7.6 million in financing charges recorded in fiscal 2024 related to the New Credit Facilities, defined below.

The decrease in interest expense for the year ended September 30, 2025 was primarily due to additional financing charges recorded in fiscal 2024 related to the New Credit Facilities, defined below, that did not repeat in the current fiscal year.

Income Tax Expense

Our income tax expense for the year ended September 30, 2025 was $204.0 million compared to $152.9 million for the year ended September 30, 2024.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $504.8 million, an increase in tax benefit of $29.2 million related to changes in valuation allowances, an increase in tax expense of $20.2 million related to the sale of ACAP investments, a decrease in tax expense of $15.6 million related to foreign residual income, an increase in tax expense of $10.0 million related to nondeductible costs, and an increase in tax expense of $9.1 million related to uncertain tax positions.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $197.4 million, an increase in tax expense of $28.1 million related to changes in uncertain tax positions, an increase in tax expense of $24.6 million related to state income taxes, a reduction in tax expense of $20.2 million related to the sale of ACAP investments in fiscal 2024, and a tax benefit of $20.1 million related to deferred tax assets recognized due to legal entity restructuring implemented in fiscal 2025.

During fiscal 2025, we recorded a reserve of $47.0 million related to uncertain tax positions associated with federal and state tax credits claimed for years subject to examination by the tax authorities.

The reserve reflects our assessment that it is more likely than not that a portion of the credits may not be sustained under examination based on recent discussions and developments related to our ongoing audits.

During fiscal 2025, we recognized deferred tax assets of $20.1 million related to legal entity restructuring.

The restructuring resulted in the recognition of deferred tax assets related to tax attributes that are expected to be utilized against future taxable income.

During fiscal 2024, we recorded an increase in tax benefit of $38.4 million related to state income taxes due to apportionment factor changes for fiscal years 2016 through 2023.

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During fiscal 2024, we approved a tax planning strategy and restructured certain operations in Canada which resulted in a release of a valuation allowance related to net operating losses and other deferred tax assets of $11.7 million.

We are now forecasting the utilization of the net operating losses within the foreseeable future.

The positive evidence was evaluated against any negative evidence to determine the valuation allowance was no longer needed.

During fiscal 2024, we settled the tax audit in Hong Kong for fiscal year 2011 through fiscal year 2021 and recorded a tax benefit of $6.9 million due primarily to changes in uncertain tax positions.

During fiscal 2023, valuation allowances in the amount of $21.0 million related to the ACAP impairment charge were established for the portion of the charge that is not expected to be realized.

During fiscal 2022, valuation allowances in the amount of $21.9 million primarily related to net operating losses in certain foreign entities were released due to sufficient positive evidence.

The positive evidence included a realignment of our global transfer pricing methodology which resulted in forecasting the utilization of the net operating losses within the foreseeable future.

The OECD has introduced the Base Erosion and Profit Shifting (BEPS) 2.0 framework which includes Pillar 2.

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Many countries have enacted the Pillar 2 global minimum tax regime including some countries where we operate.

The implementation of Pillar 2 will affect our financial statements beginning October 1, 2024.

Based on our current analysis, we do not expect the implementation of Pillar 2 to have a material impact on our financial statements.

The company is actively monitoring developments related to Pillar 2 and will continue to assess the potential impact.

The implementation of Pillar 2 does not have a material impact on our consolidated financial statements for fiscal 2025.

The company is actively monitoring developments related to Pillar 2 and will continue to assess the impact.

On July 4, 2025, the U.S.

government enacted the One Big Beautiful Bill Act which permanently extends many provisions of the Tax Cuts and Jobs Act of 2017 and introduces new tax provisions relevant for multinational businesses.

Most of the new provisions take effect starting in fiscal 2026.

Based on our assessment, we do not expect the legislation to have a material impact on our consolidated financial statements.

We are currently under tax audit in several jurisdictions including the U.S.

where our federal income tax returns for fiscal 2017 through 2020 are being examined by the IRS.

Disputes can arise with tax authorities involving issues related to the timing of deductions, the calculation and use of credits, and the taxation of income in various tax jurisdictions because of differing interpretations or application of tax laws, regulations, and relevant facts.

Disputes can arise with tax authorities involving issues related

to the timing of deductions, the calculation and use of credits, and the taxation of income in various tax jurisdictions because of differing interpretations or application of tax laws, regulations, and relevant facts.

The IRS is currently auditing certain tax credits and the methodology for calculating the credits.

While we have historically been able to sustain the credits in previous audit cycles without adjustment, we believe it’s reasonably possible there could be an adjustment to the liability for uncertain tax positions within the next twelve months related to this matter.

However, given the early stages of the audit of these credits, we are not able to reasonably estimate the range of potential outcomes.

We will continue to monitor developments related to the examination and will adjust the reserve as necessary based on changes in facts and circumstances, including the resolution of the audit.

We regularly integrate and consolidate our business operations and legal entity structure, and such internal initiatives could impact the assessment of uncertain tax positions, indefinite reinvestment assertions and the realizability of deferred tax assets.

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As a result of these strategic actions, the self-perform at-risk construction businesses were classified as discontinued operations.

Net loss from discontinued operations was $105.0 million for the year ended September 30, 2024 and net loss was $57.2 million for the year ended September 30, 2023, an increase of $47.8 million.

The increase in net loss from discontinued operations for the year ended September 30, 2024 was primarily due to revisions of estimated contingent consideration related to the sale of our civil infrastructure construction business that did not occur to the same extent in fiscal 2023.

Net loss from discontinued operations was $75.4 million for the year ended September 30, 2025 compared to $105.0 million for the year ended September 30, 2024, a decrease of $29.6 million.

The decrease in net loss from discontinued operations for the year ended September 30, 2025 was primarily due to the settlement of contingent consideration related to the sale of our civil infrastructure construction business in fiscal 2024 that did not recur in fiscal 2025 partially offset by a revision to estimated recoveries on a refinery turnaround project resulting from unfavorable court orders that occurred in fiscal 2025.

Net Income Attributable to AECOM

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( in millions)

Revenue $ 12,525.9 $ 12,485.7 $ 40.2 0.3 %

Cost of revenue 11,643.8 11,726.6 (82.8) (0.7)

Gross profit $ 882.1 $ 759.1 $ 123.0 16.2 %

The following table presents the percentage relationship of statement of operations items to revenue:

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2025 September 30,

Revenue 100.0 % 100.0 %

Cost of revenue 93.0 93.9

Gross profit 7.0 % 6.1 %

Revenue for our Americas segment for the year ended September 30, 2025 increased $40.2 million, or 0.3%, to $12,525.9 million as compared to $12,485.7 million for the corresponding period last year.

The increase in revenue for the year ended September 30, 2024 was driven by organic growth and an increase in pass-through revenues of $1,224.4 million due to a higher proportion of contracts requiring us to subcontract work on behalf of our clients and revenue from increased project activity in the Americas, including growth in our Transportation end market of $224.2 million, or 11.2%, and Water and Environment end markets of $194.8 million, or 10.1%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Pass-through revenues on contracts for which we subcontract work on behalf of our clients decreased $307.4 million for the year ended September 30, 2025 compared to the corresponding period last year.

Revenue from increased project activity in the Americas included growth in our Transportation end market of $261.1 million, or 11.7%, and our Water and Environment end markets of $127.4 million, or 6.0%, offset by a decrease in our Facilities end market of $344.7 million, or 4.3%, compared to the corresponding period last year.

Cost of Revenue

Cost of revenue for our Americas segment for the year ended September 30, 2024 increased by $1,450.6 million, or 14.1%, to $11,726.6 million compared to $10,276.0 million for the corresponding period last year.

The increase in cost of revenue for the year ended September 30, 2024 was consistent with the increases in revenue.

The increase in cost of revenue for the year ended September 30, 2024 was due to an increase in subcontractor and other direct costs of $1,224.4 million due to a higher proportion of contracts requiring us to subcontract work on behalf of our clients, with the balance of the increases due to higher labor volume compared to the same periods in the prior year.

Cost of revenue for our Americas segment for the year ended September 30, 2025 decreased by $82.8 million, or 0.7%, to $11,643.8 million compared to $11,726.6 million for the corresponding period last year.

The decrease in cost of revenue for the year ended September 30, 2025 was primarily due to the decreases in subcontractor and other direct costs offset by increased project activity.

Gross profit for our Americas segment for the year ended September 30, 2025 increased $123.0 million, or 16.2%, to $882.1 million as compared to $759.1 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 6.1% of revenue for the year ended September 30, 2024 from 6.4% in the corresponding period last year.

The increase in gross profit for the year ended September 30, 2024 was primarily due to revenue growth and delivery efficiencies realized from cost reductions.

In addition, underlying revenue, excluding pass-through revenues, increased as noted above.

The decrease in gross profit as a percentage of revenue was due to an increase in pass-through revenues for the year ended September 30, 2024 as compared to last year.

As a percentage of revenue, gross profit increased to 7.0% of revenue for the year ended September 30, 2025 from 6.1% in the corresponding period last year.

The increase in gross profit for the year ended September 30, 2025 was primarily due to the benefit from restructuring actions taken last year, growth in enterprise capability centers, ongoing continuous improvement initiatives, and growth in higher margin advisory services.

International

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(in millions)

Revenue $ 3,613.2 $ 3,618.4 $ (5.2) (0.1) %

Cost of revenue 3,279.1 3,294.6 (15.5) (0.5)

Gross profit $ 334.1 $ 323.8 $ 10.3 3.2 %

The following table presents the percentage relationship of statement of operations items to revenue:

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2025 September 30,

Revenue 100.0 % 100.0 %

Cost of revenue 90.8 91.1

Revenue for our International segment for the year ended September 30, 2024 increased $216.3 million, or 6.4%, to $3,618.4 million as compared to $3,402.1 million for the corresponding period last year.

The increase in revenue for the year ended September 30, 2024 was primarily due to growth in Europe of $104.5 million and the Middle East of $133.3 million compared to the corresponding period last year.

Growth was led by our Facilities, Water and Environment, and Transportation end markets, which increased $119.2 million, or 9.0%, $52.7 million, or 7.3%, and $31.5 million, or 2.5%, respectively, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Gross profit 9.2 % 8.9 %

Revenue for our International segment for the year ended September 30, 2025 decreased $5.2 million, or 0.1%, to $3,613.2 million as compared to $3,618.4 million for the corresponding period last year.

Revenue for the year ended September 30, 2025 decreased primarily due to a $66.3 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our client compared to the corresponding period in the prior year.

The decrease in revenue was primarily attributable to a $67.9 million, or 5.2%, decrease in our Transportation end market, partially offset by growth in our Water and Environment end market of $40.2 million, or 5.2%, and in our Transportation end market of $18.8 million, or 1.3%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Cost of Revenue

Cost of revenue for our International segment for the year ended September 30, 2024 increased $137.6 million, or 4.4%, to $3,294.6 million as compared to $3,157.0 million for the corresponding period last year.

The increase in cost of revenue for the year ended September 30, 2024 was consistent with the increase in revenue and was due to increases in subcontractor and other direct costs of $40.4 million and labor expenses of $97.1 million.

Cost of revenue for our International segment for the year ended September 30, 2025 decreased $15.5 million, or 0.5%, to $3,279.1 million as compared to $3,294.6 million for the corresponding period last year.

The decrease in cost of revenue for the year ended September 30, 2025 was primarily due to a decrease compared to the corresponding period in the prior year of subcontractor and other direct costs of $66.3 million, partially offset by increased project activity.

Gross profit for our International segment for the year ended September 30, 2025 increased $10.3 million, or 3.2%, to $334.1 million as compared to $323.8 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 9.2% of revenue for the year ended September 30, 2025 from 8.9% in the corresponding period last year.

The increase in gross profit and gross profit as a percentage of revenue for the year ended September 30, 2024 were primarily due to an increase in revenue and reduced costs resulting from ongoing exiting of lower margin countries, ongoing investments to expand enterprise capability centers, shared service centers, and delivery efficiencies.

The increase in gross profit and gross profit as a percentage of revenue for the year ended September 30, 2025 were primarily due to benefits from restructuring actions taken last year, ongoing exits from lower margin countries, growth in the enterprise capability centers, and continuous improvement initiatives.

AECOM Capital

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(in millions)

Revenue $ 0.5 $ 1.4 $ (0.9) (64.3) %

Equity in losses of joint ventures $ (0.5) $ (26.9) $ 26.4 (98.1) %

General and administrative expenses $ (9.0) $ (15.0) $ 6.0 (40.0) %

Equity in losses of joint ventures for the year ended September 30, 2024 decreased $277.0 million, or 91.1%, to $26.9 million compared to a loss of $303.9 million for the corresponding period last year.

The change in equity in losses of joint ventures for the year ended September 30, 2024 was primarily due to impairment losses recognized in the fiscal 2023 that did not repeat to the same extent in fiscal 2024.

The increase of $2.4 million in general and administrative expenses for the year ended September 30, 2024 compared to the corresponding period last year was due to nonrecurring expenses related to the evaluation of strategic options and the transition of the AECOM Capital business to a third-party platform.

Equity in losses of joint ventures for the year ended September 30, 2025 was $0.5 million compared to a loss of $26.9 million for the corresponding period last year.

The change in equity in losses of joint ventures for the year ended September 30, 2025 was primarily due to impairment losses of $35.9 million recognized in the fiscal 2024 that did not repeat in fiscal 2025.

The decrease of $6.0 million in general and administrative expenses for the year ended September 30, 2025 compared to the corresponding period last year was due to nonrecurring expenses related to the evaluation of strategic options and the transition of the AECOM Capital business to a third-party platform that occurred in fiscal year 2024 but did not repeat in fiscal year 2025.

Liquidity and Capital Resources

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subsidiaries because such basis differences are able to and intended to be reinvested indefinitely.

At September 30, 2024, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting under ASC 740 and not accrue additional tax.

At September 30, 2025, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting

under ASC 740 and not accrue additional tax.

Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

Based on the available sources of cash flows discussed above, we anticipate we will continue to have the ability to permanently reinvest these remaining amounts.

At September 30, 2024, cash and cash equivalents, including cash and cash equivalents included in current assets held for sale, were $1,584.9 million, an increase of $322.7 million, or 25.6%, from $1,262.2 million at September 30, 2023.

The increase in cash and cash equivalents was primarily attributable to $320.1 million in net cash proceeds pursuant to Amendment No.

14 of the Credit Agreement.

At September 30, 2025, cash and cash equivalents were $1,585.7 million, an increase of $0.9 million, or 0.1%, from $1,584.9 million at September 30, 2024, which included cash and cash equivalents included in current assets held for sale in fiscal year 2024.

Net cash provided by operating activities was $821.6 million for the year ended September 30, 2025 as compared to $827.5 million for the year ended September 30, 2024.

The change was primarily attributable to an increase in net income of approximately $360.1 million, offset by a decrease in cash provided by working capital of approximately $200.4 million and a decrease in adjustments for non-cash items of approximately $28.2 million.

The sale of trade receivables to financial institutions included in operating cash flows increased $32.7 million during the year ended September 30, 2024 compared to the year ended September 30, 2023.

The change was primarily attributable to an increase in net income of approximately $176.0 million and cash provided by changes in working capital of $8.3 million, offset by a decrease in adjustments for non-cash items of approximately $190.1 million.

The sale of trade receivables to financial institutions included in operating cash flows decreased $38.0 million during the year ended September 30, 2025 compared to the year ended September 30, 2024.

We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable to us.

Net cash used in investing activities was $413.2 million for the year ended September 30, 2025, as compared to $210.6 million for the year ended September 30, 2024.

The change was primarily attributable to an increase in cash payments for capital expenditures of approximately $14.0 million, cash paid for a business acquisition, net of cash acquired of $18.7 million, and $21.0 million cash funded pursuant to the revolving credit facility with the counterparty to our sale of the civil infrastructure construction business.

The change was primarily attributable to cash payments for business acquisitions, net of cash acquired, of $212.5 million in fiscal year 2025 compared to $18.7 million in fiscal year 2024.

Net cash used in financing activities was $403.7 million for the year ended September 30, 2025, as compared to $295.5 million for the year ended September 30, 2024.

The change from the prior year was primarily attributable to $320.1 million in net cash proceeds pursuant to Amendment No.

14 of the Credit Agreement, offset by a $101.1 million increase in stock repurchases under our stock repurchase program, and a $19.0 million increase in dividends paid.

14 of the Credit Agreement that occurred in the third quarter of fiscal 2024, partially offset by the $191.3 million of net additional borrowings in fiscal year 2025 from the issuance of the 2033 Senior Notes and the redemption of the 2027 Senior Notes.

Total borrowings under our Credit Agreement may vary during the period as we regularly draw and repay amounts to fund working capital.

Working Capital

Working capital, or current assets less current liabilities, increased $482.8 million, or 151.3%, to $802.0 million at September 30, 2024 from $319.2 million at September 30, 2023.

Net accounts receivable and contract assets, net of contract liabilities, increased to $3,301.4 million at September 30, 2024 from $2,880.8 million at September 30, 2023.

Working capital, or current assets less current liabilities, decreased $119.7 million, or 17.6%, to $801.4 million at September 30, 2025 from $681.7 million at September 30, 2024.

Net accounts receivable and contract assets, net of contract liabilities, decreased to $3,194.4 million at September 30, 2025 from $3,301.4 million at September 30, 2024.

Days Sales Outstanding (DSO), which includes net accounts receivable and contract assets, net of contract liabilities, was 74 days at September 30, 2025 compared to 70 days at September 30, 2024.

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2027 Senior Notes — 997.3

2033 Senior Notes 1,200.0 —

Other debt 103.8 95.9

Total debt 2,743.7 2,539.8

Current portion of debt and short-term borrowings (66.3) (66.9)

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The following table presents, in millions, scheduled maturities of our debt as of September 30, 2025:

Thereafter 1,856.0

Total $ 2,743.7

Credit Agreement

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dollars or in certain foreign currencies.

The New Credit Facilities replace in full our existing revolving credit facility (the “Original Revolving Credit Facility”), term loan A facility and term loan B facility, and borrowings under the New Credit Facilities were used to refinance in full our existing credit facilities and for general corporate purposes.

The New Credit Facilities replace in full our then-existing revolving credit facility, term loan A facility and term loan B facility, and borrowings under the New Credit Facilities were used to refinance in full our existing credit facilities and for general corporate purposes.

The Credit Agreement permits us to designate certain of our subsidiaries as additional co-borrowers from time to time.

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Borrowings under (a) the New Revolving Credit Facility (in U.S.

dollars) and the New Term A Facility bear interest at a rate per annum equal to, at our option, (i) a Term SOFR rate (with a 0% floor and SOFR adjustment of 0.10%) or (ii) a base rate (with a 0% floor), in each case, plus an applicable margin of 1.225% in the case of the Term SOFR rate and 0.25% in the case of the base rate, and (b) the New Revolving Credit Facility in currencies other than U.S.

dollars) and the New Term A Facility bear interest at a rate per annum equal to, at our option, (i) a Term SOFR rate (with a 0% floor and SOFR adjustment of 0.10%) or (ii) a base rate (with a 0% floor), in each case, as of September 30, 2025 plus an applicable margin of 1.225% in the case of the Term SOFR rate and 0.225% in the case of the base rate, and (b) the New Revolving Credit Facility in currencies other than U.S.

dollars bear interest at a rate per annum equal to the applicable reference rate for such currency (including any related adjustments), plus an applicable margin of 1.225%.

The applicable margin is subject, in each case, to adjustment based on our consolidated leverage ratio from time to time.

The applicable margin is subject, in each case, to adjustment based on the Company’s consolidated leverage ratio from time to time.

Borrowings under the New Term B Facility, after giving effect to Amendment No.

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The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of our assets and the Guarantors’ assets, subject to certain exceptions.

The Credit Agreement contains customary negative covenants that include, among other things, limitations on our ability and certain of our subsidiaries, subject to certain exceptions, to incur liens and debt, make investments, dispositions, and restricted payments, change the nature of their business, consummate mergers, consolidations and the sale of all or substantially all of our respective assets and transact with affiliates.

The Credit Agreement contains customary negative covenants that include, among other things, limitations on our ability and certain of our subsidiaries, subject to certain exceptions, to incur liens and debt, make investments, dispositions, and restricted payments, change the nature of our business, consummate mergers, consolidations and the sale of all or substantially all of our respective assets and transact with affiliates.

We are also required to maintain a consolidated leverage ratio of less than or equal to 4.00 to 1.00 (subject to certain adjustments in connection with permitted acquisitions), tested on a quarterly basis (the “Financial Covenant”).

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The Credit Agreement contains customary events of default, including, among other things, nonpayment of principal, interest or fees, cross-defaults to other debt, inaccuracies of representations and warranties, failure to perform covenants, events of bankruptcy and insolvency, change of control and unsatisfied judgments, subject in certain cases to notice and cure periods and other exceptions.

At September 30, 2024 and September 30, 2023, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

As of September 30, 2024 and September 30, 2023, we had $1,495.6 million and $1,145.6 million, respectively, available under our New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

At September 30, 2025 and September 30, 2024, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility.

As of September 30, 2025 and September 30, 2024, we had $1,495.6 million and $1,495.6 million, respectively, available under our New Revolving Credit Facility.

2027 Senior Notes

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On June 30, 2017, we completed an exchange offer to exchange the unregistered 2027 Senior Notes for registered notes, as well as related guarantees.

In July 2025, we used a portion of the proceeds of the 2033 Senior Notes (defined below) to purchase $732,914,000 in principal amount of the 2027 Senior Notes that were validly tendered and not validly withdrawn at or prior to the expiration date of our tender offer for the 2027 Senior Notes.

In August 2025, we redeemed the remaining 2027 Senior Notes with a portion of the proceeds of the 2033 Senior Notes.

The purchase and redemption included an aggregate make-whole payment of $9.1 million.

2033 Senior Notes

On July 22, 2025, we completed an offering of $1,200,000,000 aggregate principal amount of our 6.000% Senior Notes due 2033 (the “2033 Senior Notes”).

As of September 30, 2025, the estimated fair value of the 2033 Senior Notes was approximately $1,227.0 million.

The fair value of the 2033 Senior Notes as of September 30, 2025 was derived by taking the mid-point of the trading prices from an observable market input (Level 2) in the secondary bond market and multiplying it by the outstanding balance of the 2033 Senior Notes.

Interest is payable on the 2027 Senior Notes at a rate of 5.125% per annum.

Interest on the 2027 Senior Notes is payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017.

The 2027 Senior Notes will mature on March 15, 2027.

At any time and from time to time prior to December 15, 2026, we may redeem all or part of the 2027 Senior Notes, at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date.

On or after December 15, 2026, we may redeem all or part of the 2027 Senior Notes at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest on the redemption date.

The indenture pursuant to which the 2027 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide notices thereunder and provisions related to bankruptcy events.

Interest will be payable on the 2033 Senior Notes at a rate of 6.000% per annum.

Interest on the 2033 Senior Notes will be payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026.

The 2033 Senior Notes will mature on August 1, 2033.

Prior to August 1, 2028, we may redeem all or part of the 2033 Senior Notes at a redemption price equal to 100% of the principal amount to be redeemed, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to, but excluding, the redemption date.

In addition, prior to August 1, 2028, we may redeem up to 40% of the aggregate principal amount of the 2033 Senior Notes with proceeds from certain equity offerings at a redemption price equal to 106% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Furthermore, at any time on or after August 1, 2028, we may redeem on one or more occasions all or part of the 2033 Senior Notes at the redemption prices set forth below, plus accrued and unpaid interest thereon to, but excluding, the redemption date, if redeemed during the 12-month period beginning on August 1 of each of the years indicated below:

2028 103.000%

2029 101.500%

2030 and thereafter 100.000%

The indenture pursuant to which the 2033 Senior Notes were issued contains customary events of default, including, among other things, payment default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events.

The indenture also contains customary negative covenants.`

We were in compliance with the covenants relating to the 2027 Senior Notes as of September 30, 2024.

Other Debt and Other Items

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The unsecured credit facilities are primarily used for standby letters of credit issued in connection with general and professional liability insurance programs and for contract performance guarantees.

At September 30, 2024 and 2023, these outstanding standby letters of credit totaled $934.5 million and $878.9 million, respectively.

At September 30, 2025 and September 30, 2024, these outstanding standby letters of credit totaled $899.4 million and $934.5 million.

As of September 30, 2025, we had $367.4 million available under these unsecured credit facilities.

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In the future, such pension funding may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors.

In addition, we have collective bargaining agreements with unions that require us to contribute to various third-party multiemployer plans that we do not control or manage.

In addition, we have

collective bargaining agreements with unions that require us to contribute to various third-party multiemployer plans that we do not control or manage.

For the year ended September 30, 2025, we contributed $2.7 million to multiemployer pension plans.

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Non-current assets 3,189.2

Total assets $ 6,556.5

Current liabilities $ 2,853.8

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(unaudited - in millions)

For the twelve months ended

September 30, 2024

For the twelve months ended September 30, 2025

Revenue $ 9,458.6

Cost of revenue 9,011.7

Gross profit 446.9

Net income from continuing operations 86.0

Net loss from discontinued operations —

Net income $ 86.0

Net income attributable to AECOM $ 86.0

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In the ordinary course of business, we may enter into various arrangements providing financial or performance assurance to clients, lenders, or partners.

Such arrangements include standby letters of credit, surety bonds, and corporate guarantees to support the creditworthiness or the project execution commitments of our affiliates, partnerships and joint ventures.

Such arrangements include standby letters of credit, surety bonds, and corporate guarantees to support the creditworthiness or the project execution commitments of its affiliates, partnerships and joint ventures.

The Company’s unsecured credit arrangements are used for standby letters of credit issued in connection with general and professional liability insurance programs and for contract performance guarantees.

At September 30, 2024 and September 30, 2023, these outstanding standby letters of credit totaled $934.5 million and $878.9 million, respectively.

At September 30, 2025 and 2024, these outstanding standby letters of credit totaled $899.4 million and $934.5 million, respectively.

As of September 30, 2025, the Company had $367.4 million available under these unsecured credit facilities.

Performance arrangements typically have various expiration dates ranging from the completion of the project contract and extending beyond contract completion in some circumstances such as for warranties.

We may also guarantee that a project, when complete, will achieve specified performance standards.

If the project subsequently fails to meet guaranteed performance standards, we may incur additional costs, pay liquidated damages or be held responsible for the costs incurred by the client to achieve the required performance standards.

The Company may also guarantee that a project, when complete, will achieve specified performance standards.

If the project subsequently fails to meet guaranteed performance standards, the Company may incur additional costs, pay liquidated damages or be held responsible for the costs incurred by the client to achieve the required performance standards.

The potential payment amount of an outstanding performance arrangement is typically the remaining cost of work to be performed by or on behalf of third parties.

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(the “Fund”), in which we indirectly hold an equity interest and have an ongoing capital commitment to fund investments.

At September 30, 2024, we have capital commitments of $5.9 million to the Fund over the next 4 years.

At September 30, 2025, the Company has capital commitments of $5.1 million to the Fund over the next three years.

In addition, in connection with the investment activities of AECOM Capital, we provide guarantees of certain contractual obligations, including guarantees for completion of projects, limited debt repayment, environmental indemnity obligations and other lender required guarantees.

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We do not have sufficient information to determine the range of potential impacts, however, it is reasonably possible that we may incur additional costs related to these bonds.

In connection with the resolution of contingencies related to the sale of the civil infrastructure construction business, we agreed to act as an additional guarantor on the counterparty’s existing debt, which matured on September 30, 2024.

Department of Energy Deactivation, Demolition, and Removal Project

A former affiliate of the Company, Amentum Environment & Energy, Inc., f/k/a AECOM Energy and Construction, Inc.

(“Former Affiliate”), executed a cost-reimbursable task order with the Department of Energy (DOE) in 2007 to provide deactivation, demolition and removal services at a New York State project site that, during 2010, experienced contamination and performance issues.

In February 2011, the Former Affiliate and the DOE executed a Task Order Modification that changed some cost-reimbursable contract provisions to at-risk.

The Task Order Modification, including subsequent amendments, required the DOE to pay all project costs up to $106 million, required the Former Affiliate and the DOE to equally share in all project costs incurred from $106 million to $146 million, and required the Former Affiliate to pay all project costs exceeding $146 million.

Due to unanticipated requirements and permitting delays by federal and state agencies, as well as delays and related ground stabilization activities caused by Hurricane Irene in 2011, the Former Affiliate was required to perform work outside the scope of the Task Order Modification.

In December 2014, the Former Affiliate submitted an initial set of claims against the DOE pursuant to the Contracts Disputes Acts seeking recovery of $103 million, including additional fees on changed work scope (the “2014 Claims”).

On December 6, 2019, the Former Affiliate submitted a second set of claims against the DOE seeking recovery of an additional $60.4 million, including additional project costs and delays outside the scope of the contract as a result of differing site and ground conditions (the “2019 Claims”).

The Former Affiliate also submitted three alternative breach of contract claims to the 2014 and 2019 Claims that may entitle the Former Affiliate to recovery of $148.5 million to $329.4 million.

On December 30, 2019, the DOE denied the Former Affiliate’s 2014 Claims.

On September 25, 2020, the DOE denied the Former Affiliate’s 2019 Claims.

The Company filed an appeal of these decisions on December 20, 2020 in the Court of Federal Claims.

Deconstruction, decommissioning and site restoration activities are complete.

On January 31, 2020, the Company completed the sale of its Management Services business, including the Former Affiliate who worked on the DOE project, to Maverick Purchaser Sub LLC (“MS Purchaser”), an affiliate of American Securities LLC and Lindsay Goldberg LLC.

The Company and the MS Purchaser agreed that all future DOE project claim recoveries and costs will be split 10% to the MS Purchaser and 90% to the Company with the Company retaining control of all future strategic legal decisions.

The Company intends to vigorously pursue all claimed amounts but can provide no certainty that the Company will recover 2014 Claims and 2019 Claims submitted against the DOE, or any additional incurred claims or costs, which could have a material adverse effect on the Company’s results of operations.

Refinery Turnaround Project

The Former Affiliate of the Company entered into an agreement to perform turnaround maintenance services during a planned shutdown at a refinery in Montana in December 2017.

The turnaround project was completed in February 2019.

Due to circumstances outside of the Company’s Former Affiliate’s control, including client directed changes and delays and the refinery’s condition, the Company’s Former Affiliate performed additional work outside of the original contract over $90 million and is entitled to payment from the refinery owner of approximately $144 million.

In March 2019, the refinery owner sent a letter to the Company’s Former Affiliate alleging it incurred approximately $79 million in damages due to the Company’s Former Affiliate’s project performance.

In April 2019, the Company’s Former Affiliate filed and perfected a $132 million construction lien against the refinery for unpaid labor and materials costs.

In August 2019, following a subcontractor complaint filed in the Thirteen Judicial District Court of Montana asserting claims against the refinery owner and the Company’s Former Affiliate, the refinery owner crossclaimed against the Company’s Former Affiliate and the subcontractor.

In October 2019, following the subcontractor’s dismissal of its claims, the Company’s Former Affiliate removed the matter to federal court and cross claimed against the refinery owner.

In December 2019, the refinery owner claimed $93.0 million in damages and offsets against the Company’s Former Affiliate.

On January 31, 2020, the Company completed the sale of its Management Services business, including the Former Affiliate, to the MS Purchaser;

however, the Refinery Turnaround Project, including related claims and liabilities, has been retained by the Company.

Trial is expected to begin in the second quarter of fiscal year 2025.

The Company intends to vigorously prosecute and defend this matter;

however, the Company cannot provide assurance that the Company will be successful in these efforts.

The resolution of this matter and any potential range of loss cannot be reasonably determined or estimated at this time, primarily because the matter raises complex legal issues that Company is continuing to assess.

Contractual Obligations and Commitments

The following summarizes our contractual obligations and commercial commitments as of September 30, 2025:

Contractual Obligations and Commitments

Contractual Obligations and Commitments Total Less than

One Year One to

Three Years Three to

Five Years More than

(in millions)

Debt $ 2,743.7 $66.3 $53.3 $768.1 $1,856.0

Interest on debt 975.8 163.6 332.2 256.0 224.0

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Pension funding obligations (1)

35.8 35.8 — — —

Total contractual obligations and commitments $ 4,519.3 $ 429.3 $ 639.3 $ 1,197.4 $ 2,253.3

_______________________________________________________________

(1) Represents expected fiscal 2026 contributions to fund our defined benefit pension and other postretirement plans.

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New Accounting Pronouncements and Changes in Accounting

In November 2023, the Financial Accounting Standards Board (FASB) amended the guidance of Accounting Standards Codification (ASC) 280, Segment Reporting , requiring public entities to disclose significant segment expenses and other segment items on an annual and interim basis.

The new guidance is effective for the Company for its interim period ending December 31, 2025, with early adoption permitted.

We are currently evaluating the impact that the adoption of this new guidance will have on our financial statement presentation.

The new guidance is effective for the Company for its annual financial statements in fiscal year 2025 and for its interim financial statements in fiscal year 2026.

The adoption of the new guidance did not significantly impact our financial presentation.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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We are currently evaluating the impact that the adoption of this new guidance will have on our financial statement presentation.

In November 2024, the FASB issued ASU 2024-03 requiring public entities to provide disaggregated disclosures in the notes of the financial statements of certain categories of expenses that are included in expense line items on the face of the income statement on an interim basis.

The new guidance is effective for the Company for its annual financial statements in fiscal year 2027 and for its interim financial statements in fiscal year 2028, with early adoption permitted.

We are currently evaluating the impact that the adoption of this new guidance will have on our financial statements.

In September 2025, the FASB issued ASU 2025-06 to clarify and modernize the accounting for costs related to internal-use software.

The guidance removes references to project stages used in ASC 350-40 and clarifies the threshold entities should apply to begin capitalizing internal-use software costs.

The new guidance is effective for us starting October 1, 2028, and we may apply the guidance using a prospective, retrospective, or modified transition approach.

We are currently evaluating the impact that the adoption of this new guidance will have on our financial presentation.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis