What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-11-17 compared with 2020-11-19 · 58 added, 72 removed, 237 unchanged (35% of the section changed)

4 unchanged sentences

We refer to the fiscal year ended September 30, 2020 as “fiscal 2020” and the fiscal year ended September 30, 2021 as “fiscal 2021.”

We are a premier global infrastructure consulting firm, delivering professional services throughout the project lifecycle – from planning, architecture, design and engineering to program and construction management.

We partner with our clients in the public and private sectors to solve some of their most complex infrastructure challenges on projects spanning transportation, buildings, water, governments, energy and the environment.

According to Engineering News-Record’s (ENR’s) 2020 Design Survey, we are the second largest general architectural and engineering design firm in the world, ranked by 2019 design revenue, and we are ranked as the largest environment firm in the world.

In addition, we are ranked by ENR as the leading firm in a number of design end markets, including transportation, general building and certain water-related markets, as well as the number two green design firm and the number four green contractor in the world.

We utilize our scale and the strength of our workforce to create innovative solutions for our clients.

We are a leading global provider of professional infrastructure consulting services for governments, businesses and organizations throughout the world.

We provide planning, consulting, architectural and engineering design, construction and program management services and investment and development services to commercial and government clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government.

According to Engineering News-Record’s (ENR’s) 2021 Design Survey, we are the second largest general architectural and engineering design firm in the world, ranked by 2020 design revenue, and we are ranked as the largest environmental engineering firm in the world.

We utilize our scale and the strength of our workforce to create innovative solutions for our clients, including investments to accelerate the expansion of our digital services and solutions.

Increasingly, clients are turning to us to shape solutions to achieve their Environmental, Social, and Governance (ESG) objectives.

3 unchanged sentences

AECOM Capital primarily derives its income from real estate development sales and management fees.

On January 31, 2020, we completed the sale of our Management Services (MS) business to an affiliate of American Securities LLC and Lindsay Goldberg LLC.

Starting in the first quarter of fiscal 2020, our self-perform at-risk construction business met the criteria for held for sale.

Collectively, the Management Services business and the self-perform at-risk construction businesses met the criteria for discontinued operation classification.

During the first quarter of fiscal 2020, we reorganized our operating and reporting structure to better align with our ongoing professional services business.

The businesses that comprised the Management Services reportable segment and the civil infrastructure, power and oil and gas construction businesses in the former Construction Services (CS) reportable segment were classified as discontinued operations.

This reorganization better reflected our continuing operations after the sale of our Management Services segment, the sale of our self-perform at-risk civil infrastructure and power construction businesses and the planned disposal of our oil & gas construction business.

Our Management Services and self-perform at-risk construction businesses were part of our former Management Services segment and a substantial portion of our former Construction Services segment, respectively.

These businesses are classified as discontinued operations in all periods presented.

We report our continuing business through three segments, each of which is described in further detail below:

2 unchanged sentences

We have aggregated various operating segments into our reportable segments based on their similar characteristics, including similar long-term financial performance, the nature of services provided, internal processes for delivering those services, and types of customers.

Planning, consulting, architectural and engineering design, and construction management services to commercial and government clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities, environmental, and energy.

Planning, consulting, architectural and engineering design, and construction and program management services to commercial and government clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities, environmental, and energy.

● International:

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

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

● AECOM Capital (ACAP):

6 unchanged sentences

Our International segment provides similar services generally in Europe, the Middle East, Africa and Asia-Pacific regions.

With our technical and management expertise, we are able to provide our clients a broad spectrum of services.

For example, within our environmental management service offerings, we provide remediation, regulatory compliance planning and management, environmental modeling, environmental and social impact assessment and environmental permitting for major capital/infrastructure projects.

With our technical, advisory and program management expertise, we are able to provide our clients a broad spectrum of services.

For example, within our environmental management service offerings, we provide remediation, regulatory compliance planning and management, environmental modeling, climate adaptation and resilience, environmental and social impact assessment and environmental permitting for major capital/infrastructure projects.

In addition, our industry is undergoing a digital transformation, and we are investing in digital capabilities to extend our advantages, improve overall delivery, and create distinct solutions for clients that differentiate us from competitors.

Clients are asking for innovative and more advanced solutions to increasingly complex challenges, where our digital suite of products and investments in innovation are creating a more holistic approach to our work.

Our services may be sequenced over multiple phases.

1 unchanged sentence

Program and construction management contracts may employ small or large project teams and, in many cases, operate as an outsourcing arrangement with our staff located at the project site.

We provide the services in these segments both directly and through joint ventures or similar partner arrangements to the following end markets or business sectors:

We provide the services in these segments both directly and through joint ventures or similar arrangements to the following end markets or business sectors:

Transportation.

14 unchanged sentences

● Commercial and Leisure Facilities.

For example, corporate headquarters, high-rise office towers, historic buildings, hotels, leisure, sports and entertainment facilities and corporate campuses.

Corporate headquarters, high-rise office towers, historic buildings, hotels, leisure, sports and entertainment facilities and corporate campuses.

● Educational.

For example, college and university campuses.

For example, college and university campuses and other educational facilities.

● Health Care.

For example, private and public health facilities.

● Correctional.

For example, detention and correctional facilities.

Environmental.

5 unchanged sentences

Regional-scale floodplain mapping and analysis for public agencies, along with the analysis and development of protected groundwater resources for companies in the bottled water industry.

Energy/Power.

● Demand Side Management.

3 unchanged sentences

● Alternative/Renewable Energy.

Production facilities such as ethanol plants, wind farms and micro hydropower and geothermal subsections of regional power grids.

Production facilities such as ethanol plants, onshore and offshore wind farms and micro hydropower and geothermal subsections of regional power grids.

● Hydropower/Dams.

15 unchanged sentences

In addition, in connection with the investment activities of ACAP, AECOM or an affiliate may provide guarantees of certain financial obligations, including guarantees for completion of projects, repayment of debt, environmental indemnity obligations, and other lender required guarantees.

In October 2019, AECOM-Canyon Partners, a joint venture between ACAP and Canyon Partners, LLC, a global alternative asset management firm, announced the final closing of an investment fund with just over $500 million in total commitments.

The platform focuses on investing in co-general partner equity opportunities with high quality partners, primarily targeting “build-to-core” investments in the top 25 U.S.

ACAP focuses on investing in co-general partner equity opportunities with high quality partners, primarily targeting “build-to-core” investments in the top 25 U.S.

markets across all property types.

12 unchanged sentences

We are committed to addressing the effects of climate change as a key priority for our sustainability program by improving resilience and working to advance ambitious greenhouse gas emissions reduction targets.

Having achieved our previous emissions reduction targets ahead of schedule, we have set new science-based targets for 2025 that are in alignment with the Paris Agreement's goals to limit the worst effects of climate change:

a 20% reduction in Scope 1 and 2 emissions and a 10% reduction in supply chain emissions from our 2018 baseline.

Our new targets have been independently validated by the Science Based Targets initiative (SBTi) and, at the time of validation, AECOM was the first and only US-based company in the engineering and construction sector to have set SBTi targets.

In addition, we continue to invest in proprietary innovations and solutions to combat globally pervasive emerging contaminants, such as our patented DE-FLUORO TM water treatment solution to destroy per- and polyfluoroalkyl substances (PFAS) on-site.

We were the first company in the engineering sector to have set emissions reduction targets approved by the Science Based Targets Initiative (SBTi), designed to meet the goals of the Paris Agreement on climate change.

Through this and other enterprise initiatives, we announced even more ambitious targets as part of our Sustainable Legacies strategy that include commitments to becoming net-zero in our Scope 1, 2 and 3 emissions by 2030.

These commitments build upon our commitments as a signatory to the UN Global Compact.

In addition, we continue to invest in proprietary innovations and digital solutions.

This includes a solution to combat globally pervasive emerging contaminants, such as our proprietary DE-FLUORO TM water treatment solution to destroy per and polyfluoroalkyl substances (PFAS) on-site.

It also includes our SewerLogic solution, which is a machine learning cloud-based digital tool that improves efficiencies of asset management and inspection services of sewer lines.

We have established an internal Global ESG Council to coordinate and drive our ESG initiatives across AECOM worldwide, and our Board, including through its Committees, has oversight over ESG matters.

Additional information regarding our ESG initiatives is located on the investor relations section of our website, at https://investors.aecom.com/.

Additional information regarding our ESG initiatives is located on the investor relations section of our website, at https://investors.aecom.com/esg.

Human Capital Management

The foundation of our continuing success as a premier professional services enterprise is the ability to attract and retain the industry’s best, diverse talent by providing a culture of equity, diversity, inclusion, development, opportunity and empowerment.

This understanding informs our approach to managing our human capital resources

Our principal asset is our employees, and large percentages of our employees have technical and professional backgrounds and undergraduate and/or advanced degrees.

3 unchanged sentences

We are committed to enhancing our position as a leading employer in our industry.

Our culture and reputation as a leader in the engineering and construction sector enables us to recruit and retain some of the best available talent in the countries we operate in.

We believe in a culture of equity, diversity and inclusion, and we are committed to advancing safe and respectful work environments where our employees are invited to bring their talents, backgrounds and expertise to bear on some of the world’s most complex problems and where every person has the opportunity to thrive personally and professionally.

We are committed to engaging our employees globally to understand regional inclusion and diversity opportunities, building leadership accountability and expanding recruitment efforts to foster a workforce reflective of our communities.

To continue attracting and retaining some of the most talented employees in our industry, we ensure employees have the tools and resources they need to hone their skills, develop strong leadership behaviors and advance their careers.

The foundation of our continuing success is our ability to attract, recruit and retain the industry’s best, diverse talent by offering a compelling employee value proposition that promises competitive pay and benefits, flexibility and a foundation of learning and career growth, an inclusive culture that supports well-being and encourages collaboration and innovation, and a shared commitment to our values and purpose.

This understanding informs our approach to managing our human capital resources.

Our human capital objectives and initiatives are overseen by our Board as per our Corporate Governance Guidelines.

3 unchanged sentences

We maintain our industry’s best-in-class lost workday case and recordable incident rates, and our safety performance is consistently recognized by key clients across the regions where we work as well as by recognized safety organizations.

AECOM supports community uptake of approved Covid-19 vaccines as the most effective measure to end the current global pandemic and we strongly encourage that employees receive an approved vaccine.

Employees supporting clients through site visits and face-to-face meetings abide by client-worksite Covid-19 protocols, which may include documentation establishing proof of immunization or proof of negative Covid-19 test.

Throughout the pandemic we have taken and will continue to take critical steps to keep our people, clients and communities safe from Covid-19.

Equity, diversity and inclusion .

While ED&I has always been a part of our culture, we continue to advance efforts globally to integrate our principles into all aspects of our work and measure results.

We are focused on four key areas:

1) Building diverse talent through our recruitment efforts, as well as offering internships (including virtual internships during the Covid-19 pandemic) and partnering with nonprofit organizations and universities, 2) Enriching communities through pro-bono work, volunteerism, philanthropy and strategic partnerships, 3) Expanding understanding and empathy among employees through community-building, training and family-friendly benefit policies, and 4) Prioritizing the social impact and benefits of ED&I into every project we pursue and the innovative solutions we deliver.

Employee experience .

We continue to enhance our employee programs, workplace culture and digital technologies to support employees and managers in more effective and efficient ways to execute their work and meaningfully engage with clients.

These efforts include employee wellness and wellbeing programs to better support employees while working remotely during the Covid-19 pandemic and beyond, expanding access and technical training programs through our online education portal, AECOM University, delivering new digital tools to boost connectivity among employees, and advancing frontline leadership programs.

We are committed to advancing equity, diversity and inclusion in our organization and within our industry.

We build safe and respectful work environments where our employees are invited to bring their talents, backgrounds and expertise to bear on some of the world’s most complex problems and where every person has the opportunity to thrive personally and professionally.

We are advancing efforts globally in four key areas:

1) Building a workforce reflective of the communities we serve through our recruitment efforts, building leadership accountability, and partnering with nonprofit organizations and universities to build the talent pipeline for the future, 2) Enriching communities through pro-bono work, volunteerism, philanthropy and strategic partnerships, 3) Expanding understanding and empathy among employees through employee resource groups, ED&I events and celebrations, and family-friendly benefit policies, and 4) Prioritizing social equity and impact in every project we pursue and the innovative solutions we deliver.

Freedom to Grow .

As a result of the pandemic, the concept of work is changing, employee values are shifting, and offices are no longer the only workplace.

A key factor in our ability to attract and retain top talent is offering flexible or hybrid work options.

Freedom to Grow is our global framework designed to support employees in finding the balance and flexibility they need to do their best, deliver for clients, and bring their whole selves to work.

Starting with giving employees flexibility in where and when they work – a desire expressed in surveys conducted during the pandemic – employees and managers can evaluate work schedules and work locations and align on an approach that prioritizes client and team responsibilities while supporting individual needs.

The guiding rule is that if an arrangement works for the employee, the manager, the team, and most importantly, the client, then the arrangement works for AECOM.

Workplace of the future .

Drawing upon the experiences of our professionals, who have remained highly productive while working remotely during the Covid-19 pandemic, we have invited their input and ideas to begin to shape the future ways of working at AECOM.

In particular, through a global competition, we challenged our professionals to consider how new workspaces can support health, collaboration and camaraderie, how technology and tools can be leveraged to ensure continuing productivity and client engagement, and what they need to be well and engaged.

Many of the resulting ideas are being implemented regionally and globally.

Community responsibility .

Through strategic nonprofit partnerships, pro-bono work, skills-based volunteering and philanthropy, Blueprint for a Better World , our corporate responsibility platform, is focused on delivering access to safe and secure infrastructure to those who need it most, creating opportunity for the leaders of tomorrow and protecting our planet so that our company can fulfill its purpose to deliver a better world.

Drawing on the experiences of our teams and our clients during the pandemic, we developed a space and technology framework that allows for seamless connectivity between home offices, company offices and client sites, and a new global workplace design that accounts for reduced capacity requirements and prioritizes sustainability, collaboration and engagement.

We are also advancing initiatives to enable the digital delivery of our work by establishing best practices and governance protocols for the digital reuse of core elements of the design process.

Employee experience .

We continue to enhance our employee programs, workplace culture and digital technologies to support employees and managers with tools and resources they need to deliver excellence for their clients and teams.

These efforts include employee safety, health and wellness programs to support employees and their families during the Covid-19 pandemic and beyond, expanding access to and developing professional and technical training programs through our online education portal, AECOM University, delivering new digital tools to enhance connectivity, networking and collaborations among employees, and advancing frontline manager and leadership development programs.

Purpose and impact .

As the world’s trusted infrastructure consulting firm and a leader in environmental, social and corporate governance (ESG), we are determined and well-positioned to deliver positive, impactful and Sustainable Legacies for our company, our communities and our planet.

Through strategic nonprofit partnerships, pro-bono work, skills-based volunteering and philanthropy, and Blueprint for a Better World , our corporate responsibility platform, we are focused on delivering access to safe and secure infrastructure to those who need it most, creating opportunity for the leaders of tomorrow and protecting our planet so that our company can fulfill its purpose to deliver a better world.

As part of the Blueprint pro-bono program, our technical experts partnered with nonprofit organizations in their local communities to provide critical design, engineering and infrastructure solutions.

In fiscal 2020, we continued to further our employees’ passion through the Blueprint Travel Grant program, which included building dormitories to further Peruvian girls’ education, purifying drinking water on the Zinga Islands of Uganda, strengthening engineering ecosystems in Sub-Saharan Africa, and designing and fundraising for a women and children’s center in Kosovo.

In addition, we sustained our commitment to our enterprise strategic nonprofit partners – Engineers Without Borders and Water for People.

In addition, we have maintained our commitment to our enterprise strategic nonprofit partners – Engineers Without Borders and Water for People.

Our clients consist primarily of national, state, regional and local governments, public and private institutions and major corporations.

16 unchanged sentences

Under time-and-materials price contracts, we negotiate hourly billing rates and charge clients based on the actual time we expend on the project.

In addition, clients reimburse us for materials and other direct incidental expenditures incurred in connection with our performance under the contract.

In addition, clients reimburse us for materials and other direct incidental expenditures, including payments to subcontractors, incurred in connection with our performance under the contract.

Time-and-material price contracts may also have a fixed-price element in the form of not-to-exceed or guaranteed maximum price provisions.

31 unchanged sentences

Backlog is expressed in terms of gross revenue and, therefore, may include significant estimated amounts of third party or pass-through costs to subcontractors and other parties.

Backlog for our consolidated subsidiaries is comprised of contracted backlog and awarded backlog.

Our contracted backlog includes revenue we expect to record in the future from signed contracts, and in the case of a public client, where the project has been funded.

We report transaction price allocated to remaining unsatisfied performance obligations (RUPO) of $18.7 billion, as described in Note 4, Revenue Recognition, in the notes to our consolidated financial statements.

The most significant difference between our contracted backlog and RUPO is revenue related to service contracts that extend beyond the termination provision of those contracts.

Our contracted backlog includes revenues for service contracts expected to be earned over the term of that contract.

Guidance for the calculation of RUPO requires us to assume the contract will be terminated at its earliest convenience, resulting in RUPO to be $0.6 billion lower than contracted backlog.

Our awarded backlog includes revenue we expect to record in the future where we have been awarded the work, but the contractual agreement has not yet been signed.

The net results of our unconsolidated joint ventures are recognized as equity earnings, and awarded and contracted backlog representing our proportionate share of work to be performed by unconsolidated joint ventures is not presented as revenue in our Consolidated Statements of Operations.

The most significant differences between our backlog and RUPO are backlog contains revenue we expect to record in the future where we have been awarded the work, but the contractual agreement has not yet been signed, unconsolidated joint venture backlog where we expect to realize income through equity earnings rather than revenue, and revenue related to service contracts that extend beyond the termination provision of those contracts, where RUPO requires us to assume the contract will be terminated at its earliest convenience.

Accordingly, RUPO is $19.9 billion lower than backlog.

For non-government contracts, our backlog includes future revenue at contract rates, excluding contract renewals or extensions that are at the discretion of the client.

4 unchanged sentences

Many of our contracts require us to provide services over more than one year.

Our backlog for the year ended September 30, 2020 increased $4.7 billion, or 12.9%, to $41.2 billion as compared to $36.5 billion for the corresponding period last year, primarily due to an increase in our construction management business.

The following summarizes contracted and awarded backlog (in billions):

Our backlog for the year ended September 30, 2021 decreased $2.6 billion, or 6.3%, to $38.6 billion as compared to $41.2 billion for the corresponding period last year, primarily due to a decrease in our construction management business.

The following summarizes backlog (in billions):

September 30,

Contracted backlog:

Americas segment

International segment

Total contracted backlog

Awarded backlog:

Americas segment

International segment

Total awarded backlog

Unconsolidated joint venture backlog:

Americas segment

International segment

Total unconsolidated joint venture backlog

Total backlog

Americas segment

International segment

Total backlog

The markets we serve are highly fragmented and we compete with a large number of regional, national and international companies.

22 unchanged sentences

We have an Office of Risk Management that reviews and oversees the risk profile of our operations.

Also, pursuant to our internal delegations of authority, we have an internal process whereby a group of senior members of our risk management team evaluate risk through internal risk analyses of higher-risk projects, contracts or other business decisions.

Also, pursuant to our internal delegations of authority, a group of senior members of our risk management team evaluates risk through internal risk analyses of higher-risk projects, contracts or other business decisions.

We maintain insurance covering professional liability and claims involving bodily injury and property damage.

43 unchanged sentences

The reports we file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy materials, including any amendments, are available free of charge on our website at www.aecom.com as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC.

The SEC also maintains a web site (www.sec.gov) containing reports, proxy and information statements, and other information that we file with the SEC.

The SEC also maintains a website (www.sec.gov) containing reports, proxy and information statements, and other information that we file with the SEC.

Our Corporate Governance Guidelines and our Code of Ethics are available on our website at www.aecom.com under the “Investors” section.

Copies of the information identified above may be obtained without charge from us by writing to AECOM, 300 South Grand Avenue, 9 th Floor, Los Angeles, California 90071, Attention:

Copies of the information identified above may be obtained without charge from us by writing to AECOM, 13355 Noel Road, Suite 400, Dallas, Texas 75240, Attention:

Corporate Secretary.

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 1. Business