What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-11-17 compared with 2020-11-19 · 163 added, 209 removed, 1251 unchanged (23% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations for the Years Ended September 30, 2021, 2020 and 2019

Consolidated Statements of Comprehensive (loss) Income for the Years Ended September 30, 2020, 2019, and 2018

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended September 30, 2021, 2020, and 2019

Consolidated Statements of Stockholders’ Equity for the Years Ended September 30, 2021, 2020, and 2019

125 unchanged sentences

OTHER LONG-TERM LIABILITIES

OPERATING LEASE LIABILITIES

OPERATING LEASE LIABILITIES, NON-CURRENT

LONG-TERM LIABILITIES HELD FOR SALE

9 unchanged sentences

Accumulated other comprehensive loss

Retained earnings

(Accumulated deficits) / Retained earnings

TOTAL AECOM STOCKHOLDERS’ EQUITY

18 unchanged sentences

Income from continuing operations before taxes

Income tax expense (benefit) for continuing operations

Income tax expense for continuing operations

Net income from continuing operations

Net loss from discontinued operations

Net (loss) income

Net income (loss)

Net income attributable to noncontrolling interests from continuing operations

3 unchanged sentences

Net loss attributable to AECOM from discontinued operations

Net (loss) income attributable to AECOM

Net (loss) income attributable to AECOM per share:

Net income (loss) attributable to AECOM

Net income (loss) attributable to AECOM per share:

Basic continuing operations per share

12 unchanged sentences

September 30,

Net (loss) income

Other comprehensive (loss) income, net of tax:

Net income (loss)

Other comprehensive loss, net of tax:

Net unrealized gain (loss) on derivatives, net of tax

1 unchanged sentence

Pension adjustments, net of tax

Other comprehensive (loss) income, net of tax

Comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

Comprehensive income (loss), net of tax

Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax

Comprehensive (loss) income attributable to AECOM, net of tax

Comprehensive income (loss) attributable to AECOM, net of tax

See accompanying Notes to Consolidated Financial Statements.

5 unchanged sentences

BALANCE AT SEPTEMBER 30, 2018

Cumulative effect of accounting standard adoption

Other comprehensive loss

Issuance of stock

Repurchases of stock under stock repurchase program

Repurchases of stock

Proceeds from exercise of options

Stock based compensation

8 unchanged sentences

Stock based compensation

Other transactions with noncontrolling interests

Disposal of noncontrolling interest of business sold

Contributions from noncontrolling interests

2 unchanged sentences

Cumulative effect of accounting standard adoption

Other comprehensive loss

Other comprehensive income

Issuance of stock

1 unchanged sentence

Stock based compensation

Other transactions with noncontrolling interests

Disposal of noncontrolling interest of business sold

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

6 unchanged sentences

Loss on disposal activities

Gain on sale of discontinued operations

Loss (gain) on sale of discontinued operations

Foreign currency translation

Write-off of debt issuance costs

Deferred income tax expense (benefit)

Deferred income tax (benefit) expense

Changes in operating assets and liabilities, net of effects of acquisitions:

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of discontinued operations, net of cash disposed

Proceeds from purchase price adjustment on business acquisition

Cash acquired from consolidation of joint venture

(Payment for) proceeds from sale of discontinued operations, net of cash disposed

Proceeds from disposal of businesses, net of cash disposed

5 unchanged sentences

Payments for capital expenditures

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

15 unchanged sentences

EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET INCREASE IN CASH AND CASH EQUIVALENTS

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

12 unchanged sentences

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

Fiscal years 2020, 2019 and 2018 each contained 53 , 52 and 52 weeks, respectively, and ended on October 2, September 27, and September 28, respectively.

Fiscal years 2021, 2020 and 2019 each contained 52 , 53 and 52 weeks, respectively, and ended on October 1, October 2, and September 27, respectively.

Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

81 unchanged sentences

New Accounting Pronouncements and Changes in Accounting

In May 2014, the Financial Accounting Standards Board (FASB) issued new accounting guidance which amended the existing accounting standards for revenue recognition.

The new accounting guidance establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services.

The Company adopted the new standard on October 1, 2018, using the modified retrospective method, which resulted in an adjustment to retained earnings of $ 7.0 million, net of tax.

Detailed disclosures regarding the adoption and other required disclosures can be found in Note 4.

In February 2016, the FASB issued new accounting guidance which changes accounting requirements for leases.

In February 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance which changes accounting requirements for leases.

The new guidance requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet.

3 unchanged sentences

In June 2016, the FASB issued a new credit loss standard that changes the impairment model for most financial assets and some other instruments.

The new guidance will replace the current ”incurred loss” approach with an ”expected loss” model for instruments measured at amortized cost.

The new guidance replaces the “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost.

It also simplifies the accounting model for purchased credit-impaired debt securities and loans.

The guidance will be effective for the Company’s fiscal year starting October 1, 2020.

The Company does not expect that the adoption of this standard will have a material impact on its consolidated financial statements.

The Company adopted the new guidance effective October 1, 2020 using a modified retrospective approach that resulted in an $ 8.0 million, net of tax, reduction to retained earnings without restating comparative periods.

Additional disclosures regarding the adoption can be found in Note 4.

In February 2018, the FASB issued new accounting guidance which provides entities the option to reclassify certain tax effects from other comprehensive income to retained earnings.

3 unchanged sentences

In August 2018, the FASB issued new accounting guidance aligning the capitalization of certain implementation costs incurred in a hosting arrangement that is a service contract with previously existing guidance for capitalizing costs incurred to develop internal-use software.

The new guidance will be effective for the Company's fiscal year starting October 1, 2020.

The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

The new guidance was effective for the Company’s fiscal year starting October 1, 2020.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued new accounting guidance amending the disclosure requirements for fair value measurements.

These improvements will require more disclosure for amounts measured at fair value, and specifically unobservable inputs used in fair value measurements.

The Company expects to adopt the new guidance starting on October 1, 2020.

The Company is currently evaluating the impact that the new guidance will have on its financial reporting process.

These improvements require more disclosure for amounts measured at fair value, and specifically unobservable inputs used in fair value measurements.

The Company adopted the new guidance starting on October 1, 2020.

Adoption of the new guidance did not have a significant impact on the Company’s financial reporting process.

In August 2018, the FASB issued new accounting guidance for the disclosure requirements of defined benefit pension plans.

The amended guidance eliminates certain disclosure requirements that were no longer considered to be cost beneficial.

The Company expects to adopt the new guidance starting on October 1, 2021 and does not expect adoption of the new guidance will have a significant impact on its financial reporting process.

In March 2020, the Securities and Exchange Commission (SEC) adopted final rules that amend the financial disclosure requirement for guarantors of registered debt securities in Rule 3-10 of Regulation S-X.

1 unchanged sentence

Among other things, the new disclosures may be located outside the financial statements.

The new rule is effective January 4, 2021, and early adoption is permitted.

The new rule was effective January 4, 2021, and early adoption is permitted.

The Company adopted the new rule on March 31, 2020.

1 unchanged sentence

Discontinued Operations, Goodwill, and Intangible Assets

On October 12, 2019, the Company entered into a purchase and sale agreement with Maverick Purchaser Sub, LLC (“Purchaser”), an affiliate of American Securities LLC and Lindsay Goldberg LLC.

Per the terms of that agreement, the Company agreed to transfer the assets and liabilities constituting its Management Services business to the Purchaser.

The transaction with the Purchaser closed on January 31, 2020.

During the second quarter of fiscal 2020, the Company completed the sale of its Management Services business to Maverick Purchaser Sub, LLC (Purchaser), an affiliate of American Securities LLC and Lindsay Goldberg LLC.

The Company received total cash consideration of $ 2.28 billion inclusive of the receipt in the third quarter of fiscal 2020 of $ 122.0 million received in connection with a favorable working capital purchase price adjustment and contingent consideration of approximately $ 120 million attributable to certain claims related to prior work and engagements.

As a result of the sale, the Company recognized a pre-tax gain of $ 161.9 million.

The gain on sale was included in the net loss from discontinued operations in the Consolidated Statements of Operations.

The gain on sale was included in the net loss from discontinued operations in the Consolidated Statements of Operations in fiscal year 2020.

Additionally, in the first quarter of fiscal 2020, management approved a plan to dispose via sale the Company’s self-perform at-risk construction businesses within the next year.

5 unchanged sentences

Interest expense allocated to discontinued operations represents interest expenses for the discontinued operations’ finance leases and term loans, which were required to be settled upon the sale of the Management Services business.

During the first quarter of fiscal 2021, the Company completed the sale of its power construction business to CriticalPoint Capital, LLC.

The Company recorded an additional pre-tax loss on the sale of $ 17.3 million in fiscal 2021 related to payments for post-closing working capital adjustments.

The Company also completed the sale of its civil infrastructure construction business to affiliates of Oroco Capital in the second quarter of fiscal 2021.

During the second quarter of fiscal 2021, the Company recorded a $ 32.8 million loss related to the sale of its civil infrastructure construction businesses.

Under the terms of the sale agreement, the Company made the required cash payments and delivered the cash and cash equivalents, including cash in consolidated joint ventures, on the balance sheet at closing.

As a result, the Company recorded the net cash movement of the sale as a use of cash in the investing section of its statement of cash flows.

During the second quarter of fiscal 2020, the Company identified indicators of impairment for the self-perform at-risk construction business.

3 unchanged sentences

Accordingly, the Company recorded impairment losses for that business' goodwill of approximately $ 83.6 million and intangible assets of approximately $ 5.7 million.

These impairment losses were recorded in net loss from discontinued operations on the Consolidated Statements of Operations.

These impairment losses were recorded in net loss from discontinued operations on the Consolidated Statements of Operations in fiscal year 2020.

During the fourth quarter of fiscal 2020, the Company recorded a $ 247.2 million loss related to the remeasurement of its self-perform at-risk construction businesses to fair value less cost to sell.

18 unchanged sentences

Cost of revenue

Gross (loss) profit

Equity in earnings of joint ventures

Gain (loss) on disposal activities

Gross profit (loss)

Equity in earnings (losses) of joint ventures

(Loss) gain on disposal activities

Transaction costs

27 unchanged sentences

Revenue Recognition

On October 1, 2018, the Company adopted ASC 606 on a modified retrospective basis, which amended the accounting standards for revenue recognition.

As a result, the new guidance was applied retrospectively to contracts which were not completed as of October 1, 2018.

Contracts completed prior to October 1, 2018 were accounted for using the guidance in effect at that time.

The cumulative effect of applying the new guidance was recorded as a reduction to retained earnings at October 1, 2018 of $ 7.0 million, net of tax.

Consistent with the modified retrospective transition approach, the comparative period was not adjusted to conform with current period presentation.

The adjustment was primarily related to segmenting or combining contracts by performance obligations identified under the criteria of the new standard.

The new accounting guidance establishes principles for recognizing revenue upon the transfer of control of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services.

The Company follows accounting principles for recognizing revenue upon the transfer of control of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services.

The Company generally recognizes revenues over time as performance obligations are satisfied.

2 unchanged sentences

These costs are passed through to clients and, in accordance with GAAP, are included in the Company’s revenue and cost of revenue.

These subcontractor and other direct costs for the years ended September 30, 2020, 2019 and 2018 were $ 7.1 billion, $ 7.4 billion and $ 7.7 billion, respectively.

These pass through revenues for the years ended September 30, 2021, 2020 and 2019 were $ 7.2 billion, $ 7.1 billion and $ 7.4 billion, respectively.

Recognition of revenue and profit is dependent upon a number of factors, including the accuracy of a variety of estimates made at the balance sheet date, such as engineering progress, material quantities, the achievement of milestones, penalty provisions, labor productivity and cost estimates.

55 unchanged sentences

Total accounts receivable—gross

Allowance for doubtful accounts

Allowance for doubtful accounts and credit losses

Total accounts receivable—net

4 unchanged sentences

These retention agreements vary from project to project and could be outstanding for several months or years.

Allowances for doubtful accounts have been determined through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable as of the balance sheet date based on current and past experience.

On October 1, 2020, the Company adopted accounting pronouncements issued by the FASB regarding the changes to the way in which entities estimate credit losses for most financial assets, including accounts receivable and contract assets.

The new guidance requires the Company to maintain an allowance for credit losses, which represent the portion of its financial assets that it does not expect to collect over their contractual life.

The Company considers a broad range of information to estimate expected credit losses including the related ages of past due balances, projections of credit losses based on historical trends, and collection history and credit quality of its clients.

Negative macroeconomic trends or delays in payment of outstanding receivables could result in an increase in the estimated credit losses.

No single client accounted for more than 10 % of the Company’s outstanding receivables at September 30, 2021 and September 30, 2020.

98 unchanged sentences

Plan amendments

Plan curtailments

Foreign currency translation (gain) loss

133 unchanged sentences

Common collective funds

Assets held by insurance company

Derivative instruments

22 unchanged sentences

Cash equivalents are mostly comprised of short-term money-market instruments and are valued at cost, which approximates fair value.

For equity investment funds not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker, or investment manager.

For investment funds not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker, or investment manager.

These funds are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as Level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager.

Fixed income investment funds categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or quoted prices of securities with similar characteristics.

Fixed income investment funds, not traded on an active exchange, categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or quoted prices of securities with similar characteristics.

Hedge funds categorized as Level 3 are valued based on valuation models that include significant unobservable inputs and cannot be corroborated using verifiable observable market data.

20 unchanged sentences

2027 Senior Notes

URS Senior Notes

Current portion of debt and short-term borrowings

3 unchanged sentences

Credit Agreement

The Company entered into a credit agreement (Credit Agreement) on October 17, 2014, which, as amended to date, consists of (i) a term loan A facility that includes a $ 510 million (US) term loan A facility with a term expiring on March 13, 2021 and a $ 500 million Canadian dollar (CAD) term loan A facility and a $ 250 million Australian dollar (AUD) term loan A facility, each with terms expiring on March 13, 2023;

(ii) a $ 600 million term loan B facility with a term expiring on March 13, 2025;

and (iii) a revolving credit facility in an aggregate principal amount of $ 1.35 billion with a term expiring on March 13, 2023.

Some of subsidiaries of the Company (Guarantors) have guaranteed the obligations of the borrowers under the Credit Agreement.

The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of the assets of the Company and the Guarantors pursuant to a security and pledge agreement (Security Agreement).

The collateral under the Security Agreement is subject to release upon fulfillment of conditions specified in the Credit Agreement and Security Agreement.

The Credit Agreement contains covenants that limit the ability of the Company and the ability of some of its subsidiaries to, among other things:

(i) create, incur, assume, or suffer to exist liens;

(ii) incur or guarantee indebtedness;

(iii) pay dividends or repurchase stock;

(iv) enter into transactions with affiliates;

(v) consummate asset sales, acquisitions or mergers;

(vi) enter into various types of burdensome agreements;

or (vii) make investments.

On July 1, 2015, the Credit Agreement was amended to revise the definition of “Consolidated EBITDA” to increase the allowance for acquisition and integration expenses related to the Company’s acquisition of the URS Corporation (URS) in October 2014.

On December 22, 2015, the Credit Agreement was amended to further revise the definition of “Consolidated EBITDA” by further increasing the allowance for acquisition and integration expenses related to the acquisition of URS and to allow for an internal corporate restructuring primarily involving the Company’s international subsidiaries.

On September 29, 2016, the Credit Agreement and the Security Agreement were amended to (1) lower the applicable interest rate margins for the term loan A and the revolving credit facilities, and lower the applicable letter of credit fees and commitment fees to the revised consolidated leverage levels;

(2) extend the term of the term loan A and the revolving credit facility to September 29, 2021;

(3) add a new delayed draw term loan A facility tranche in the amount of $ 185.0 million;

(4) replace the then existing $ 500 million performance letter of credit facility with a $ 500 million basket to enter into secured letters of credit outside the Credit Agreement;

and (5) revise covenants, including the Maximum Consolidated Leverage Ratio so that the step down from a 5.00 to a 4.75 leverage ratio is effective as of March 31, 2017 as well as the investment basket for the Company’s AECOM Capital business.

On March 31, 2017, the Credit Agreement was amended to (1) expand the ability of restricted subsidiaries to borrow under “Incremental Term Loans;” (2) revise the definition of “Working Capital” as used in “Excess Cash Flow;” (3) revise the definitions for “Consolidated EBITDA” and “Consolidated Funded Indebtedness” to reflect the expected gain and debt repayment of an AECOM Capital disposition, which disposition was completed on April 28, 2017;

and (4) amend provisions relating to the Company’s ability to undertake internal restructuring steps to accommodate changes in tax laws.

On March 13, 2018, the Credit Agreement was amended to (1) refinance the existing term loan A facility to include a $ 510 million (US) term loan A facility with a term expiring on March 13, 2021 and a $ 500 million CAD term loan A facility and a $ 250 million AUD term loan A facility each with terms expiring on March 13, 2023;

(2) issue a new $ 600 million term loan B facility to institutional investors with a term expiring on March 13, 2025;

(3) increase the capacity of the Company’s revolving credit facility from $ 1.05 billion to $ 1.35 billion and extend its term until March 13, 2023;

(4) reduce the Company’s interest rate borrowing costs as follows:

(a) the term loan B facility, at the Company’s election, Base Rate (as defined in the Credit Agreement) plus 0.75 % or Eurocurrency Rate (as defined in the Credit Agreement) plus 1.75 %, (b) the (US) term loan A facility, at the Company’s election, Base Rate plus 0.50 % or Eurocurrency Rate plus 1.50 %, and (c) the Canadian (CAD) term loan A facility, the Australian (AUD) term loan A facility, and the revolving credit facility, an initial rate of, at the Company’s election, Base Rate plus 0.75 % or Eurocurrency Rate plus 1.75 %, and after the end of the Company’s fiscal quarter ended June 30, 2018, Base Rate loans plus a margin ranging from 0.25 % to 1.00 % or Eurocurrency Rate plus a margin from 1.25 % to 2.00 %, based on the Consolidated Leverage Ratio (as defined in the Credit Agreement);

(5) revise covenants including increasing the amounts available under the restricted payment negative covenant and revising the Maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) to include a 4.5 leverage ratio through September 30, 2019 after which the leverage ratio stepped down to 4.0 .

On November 13, 2018, the Credit Agreement was amended to revise the definition of "Consolidated EBITDA"

to increase corporate restructuring allowances and provide for additional flexibility under the covenants for non-core asset dispositions, among other changes.

On January 28, 2020, AECOM entered into Amendment No.

7 to the Credit Agreement which modifies the asset disposition covenant to permit the sale of the Management Services business and the mandatory prepayment provision so that only outstanding term loans were prepaid using the net proceeds from the sale.

On May 1, 2020, the Company entered into Amendment No.

8 to the Credit Agreement which allows for borrowings to be made, until three months after closing, up to an aggregate principal amount of $ 400,000,000 under a secured delayed draw term loan facility, the proceeds of which are permitted to be used to pay all or a portion of the amounts payable in connection with any tender for or redemption or repayment of the Company's or its subsidiaries' existing senior unsecured notes and any associated fees and expenses.

The amendment also revised certain terms and covenants in the Credit Agreement, including by, among other things, the maximum leverage ratio covenant to 4.00 :1.00, subject to increases to 4.50 :1.00 for certain specified periods in connection with certain material acquisitions, increasing the potential size of incremental facilities under the Credit Agreement, revising the definition of "Consolidated EBITDA"

to provide for additional flexibility in the calculation thereof and adding a Eurocurrency Rate floor of 0.75 % to the interest rate under the revolving credit facility.

On July 30, 2020, the Company drew $ 248.5 million on its secured delayed draw term loan facility for the purpose of redeeming all of the 2022 URS Senior Notes.

Under the Credit Agreement, the Company is subject to a maximum consolidated leverage ratio and minimum consolidated interest coverage ratio at the end of each fiscal quarter.

On February 8, 2021, the Company entered into the 2021 Refinancing Amendment to the Credit Agreement (the “Credit Agreement”), pursuant to which the Company amended and restated its Syndicated Credit Facility Agreement, dated as of October 17, 2014 (as amended prior to February 8, 2021, the “Original Credit Agreement”), between the Company, as borrower, Bank of America, N.A., as administrative agent, and other parties thereto.

The Credit Agreement consists of a $ 1,150,000,000 revolving credit facility (the “Revolving Credit Facility”) and a $ 246,968,737.50 term loan A facility (the “Term A Facility,” together with the Revolving Credit Facility, the “Credit Facilities”), each of which mature on February 8, 2026.

The outstanding loans under the Term A Facility were borrowed in U.S.

Loans under the Revolving Credit Facility may be borrowed, and the Letters of Credit thereunder may be issued, in U.S.

dollars or certain foreign currencies.

The proceeds of the Revolving Credit Facility may be used from time to time for ongoing working capital and for other general corporate purposes.

The proceeds of the Revolving Credit Facility and the Term A Loan facility borrowed on February 8, 2021 were used to refinance the existing revolving credit facility and the existing term loan facility under the Original Credit Agreement and to pay related fees and expenses.

The Credit Agreement permits and the Company to designate certain of its subsidiaries as additional co-borrowers from time to time.

Currently, there are no co-borrowers under the Credit Facilities.

The applicable interest rate under the Credit Agreement is calculated at a per annum rate equal to, at the Company’s option, (a) the Eurocurrency Rate (as defined in the Credit Agreement) plus an applicable margin (the “LIBOR Applicable Margin”), which is currently at 1.50 % or (b) the Base Rate (as defined in the Credit Agreement) plus an applicable margin (the “Base Rate Applicable Margin” and together with the LIBOR Applicable Margin, the “Applicable Margins”), which is currently at 0.50 %.

The Credit Agreement includes certain environmental, social and governance (ESG) metrics relating to the Company’s CO 2 emissions and its percentage of employees who identify as women (each, a “Sustainability Metric”).

The Applicable Margins and the commitment fees for the revolving credit facility will be adjusted on an annual basis based on the Company’s achievement of preset thresholds for each Sustainability Metric.

Some of the Company’s material subsidiaries (the “Guarantors”) have guaranteed the Company’s obligations of the borrowers under the Credit Agreement, subject to certain exceptions.

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

The Credit Agreement contains customary negative covenants that include, among other things, limitations on the ability of the Company and certain of its 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 their respective assets, taken as a whole, and transact with affiliates.

The Company is also required to maintain a consolidated interest coverage ratio of at least 3.00 to 1.00 and 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 Covenants”).

The Company’s consolidated leverage ratio was 2.4 at September 30, 2021.

The Company’s Consolidated Interest Coverage Ratio was 5.0 at September 30, 2020.

As of September 30, 2021, the Company was in compliance with the covenants of the Credit Agreement.

At September 30, 2020 and 2019, outstanding standby letters of credit totaled $ 19.0 million and $ 22.8 million, respectively, under the Company’s revolving credit facilities.

As of September 30, 2020 and 2019, the Company had $ 1,331.0 million and $ 1,327.2 million, respectively, available under its revolving credit facility.

The Credit Agreement contains customary affirmative covenants, including, among other things, compliance with applicable law, preservation of existence, maintenance of properties and of insurance, and keeping proper books and records.

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.

On April 13, 2021, the Company entered into Amendment No.

10 to the Credit Agreement, pursuant to which the lenders thereunder provided a secured term “B” credit facility (the “Term B Facility”) to the Company in an aggregate principal amount of $ 700,000,000 .

The Term B Facility matures on April 13, 2028.

The proceeds of the Term B Facility were used to fund the purchase price, fees and expenses in connection with the Company’s cash tender offer to purchase up to $ 700,000,000 aggregate purchase price (not including any accrued and unpaid interest) of its outstanding 5.875 % Senior Notes due 2024.

The Term B Facility is subject to the same affirmative and negative covenants and events of default as the Term A Facility previously incurred pursuant to the existing Credit Agreement (except that the Financial Covenants in the Credit Agreement do not apply to the Term B Facility).

The applicable interest rate for the Term B Facility is calculated at a per annum rate equal to, at the Company’s option, (a) the Eurocurrency Rate (as defined in the Credit Agreement) plus 1.75 % or (b) the Base Rate (as defined in the Credit Agreement) plus 0.75 %.

On June 25, 2021, the Company entered into Amendment No.

11 to the Credit Agreement, pursuant to which the lenders have provided to the Company an additional $ 215,000,000 in aggregate principal amount under the Term A Facility.

The Company used the net proceeds from the increase in the Term A Facility (together with cash on hand), to (i) redeem all of the Company’s remaining 5.875 % Senior Notes due 2024 and (ii) pay fees and expenses related to such redemption.

At September 30, 2021 and September 30, 2020, letters of credit totaled $ 5.2 million and $ 19.0 million, respectively, under the Company’s revolving credit facilities.

As of September 30, 2021 and September 30, 2020, the Company had $ 1,144.8 million and $ 1,331.0 million, respectively, available under its revolving credit facility.

2024 Senior Notes

On October 6, 2014, the Company completed a private placement offering of $ 800,000,000 aggregate principal amount of the unsecured 5.750 % Senior Notes due 2022 (2022 Notes) and $ 800,000,000 aggregate principal amount of the unsecured 5.875 % Senior Notes due 2024 (the 2024 Notes and, together with the 2022 Notes, the 2014 Senior Notes).

On November 2, 2015, the Company completed an exchange offer to exchange the unregistered 2014 Senior Notes for registered notes, as well as all related guarantees.

On March 16, 2018, the Company redeemed all of the 2022 Notes at a redemption price that was 104.313 % of the principal amount outstanding plus accrued and unpaid interest.

The March 16, 2018 redemption resulted in a $ 34.5 million prepayment premium, which was included in interest expense.

As of September 30, 2020, the estimated fair value of the 2024 Notes was approximately $ 863.0 million.

The fair value of the 2024 Notes as of September 30, 2020 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 2024 Notes.

On July 21, 2020, the Company completed a cash tender offer at par for up to $ 639 million in aggregate principal amount of the 2024 Notes and the 2017 Senior Notes.

The Company accepted for purchase all of 2024 Notes validly tendered and not validly withdrawn pursuant to the cash tender offer, amounting to $ 2.7 million aggregate principal amount of the 2024 Notes at par.

The Company made the cash tender offer at par to satisfy obligations under the indentures governing the 2024 Notes and the 2017 Senior Notes relating to the use of certain cash proceeds from its disposition of the Management Services business, which was completed on January 31, 2020.

At any time prior to July 15, 2024, the Company may redeem on one or more occasions all or part of the 2024 Notes at a redemption price equal to the sum of (i) 100 % of the principal amount thereof, plus (ii) a “make-whole” premium as of the date of the redemption, plus any accrued and unpaid interest to the date of redemption.

In addition, on or after July 15, 2024, the 2024 Notes may be redeemed at a redemption price of 100 % of the principal amount thereof, plus accrued and unpaid interest to the date of redemption.

The indenture pursuant to which the 2024 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.

The indenture also contains customary negative covenants.

The Company was in compliance with the covenants relating to the 2024 Notes as of September 30, 2020.

On October 6, 2014, the Company completed a private placement offering of $ 800,000,000 aggregate principal amount of the unsecured 5.875 % Senior Notes due 2024 (the “2024 Notes”).

On June 25, 2021, the Company redeemed the remaining principal amount of the 2024 Notes outstanding at such time.

The redemption price of the 2024 Notes was 115.108 % of the remaining outstanding aggregate principal amount, amounting to $ 217.5 million, plus accrued and unpaid interest.

The amounts paid were funded using the proceeds from the additional draw down from the Term A Facility described above and cash on hand.

The redemption of the 2024 Notes in the third quarter of fiscal 2021 resulted in a $ 117.5 million prepayment premium, which was included in interest expense.

2027 Senior Notes

On February 21, 2017, the Company completed a private placement offering of $ 1,000,000,000 aggregate principal amount of its unsecured 5.125 % Senior Notes due 2027 (the 2017 Senior Notes) and used the proceeds to immediately retire the remaining $ 127.6 million outstanding on the then existing term loan B facility as well as repay $ 600 million of the term loan A facility and $ 250 million of the revolving credit facility under its Credit Agreement.

On February 21, 2017, the Company completed a private placement offering of $ 1,000,000,000 aggregate principal amount of its unsecured 5.125 % Senior Notes due 2027 (the “2027 Senior Notes”).

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

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The fair value of the 2027 Senior Notes as of September 30, 2021 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 2027 Senior Notes.

Interest will be payable on the 2017 Senior Notes at a rate of 5.125 % per annum.

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.

1 unchanged sentence

At any time and from time to time prior to December 15, 2026, the Company 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.

At any time on or after December 15, 2026, the Company may redeem on one or more occasions all or part of the 2017 Senior Notes at a redemption price equal to 100 % of their principal amount, plus accrued and unpaid interest.

On or after December 15, 2026, the Company may redeem all or part of the 2027 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.

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URS Senior Notes

In connection with the URS acquisition, the Company assumed the URS 3.85 % Senior Notes due 2017 (2017 URS Senior Notes) and the URS 5.00 % Senior Notes due 2022 (2022 URS Senior Notes), totaling $ 1.0 billion (URS Senior Notes).

The URS acquisition triggered change in control provisions in the URS Senior Notes that allowed the holders of the URS Senior Notes to redeem their URS Senior Notes at a cash price equal to 101 % of the principal amount and, accordingly, the Company redeemed $ 572.3 million of the URS Senior Notes on October 24, 2014.

The remaining 2017 URS Senior Notes matured and were fully redeemed on April 3, 2017 for $ 179.2 million using proceeds from a $ 185 million delayed draw term loan A facility tranche under the Credit Agreement.

In connection with the 2014 acquisition of the URS Corporation (URS), the Company assumed the URS 5.00 % Senior Notes due 2022 (the “2022 URS Senior Notes”).

The remaining $ 248.5 million principal amount of the 2022 URS Senior Notes were fully redeemed on August 31, 2020 using proceeds from a $ 248.5 million secured delayed draw term loan facility under the Credit Agreement, at a redemption price that was 106.835 % of the principal amount outstanding plus accrued and unpaid interest.

The August 31, 2020 redemption resulted in a $ 17.0 million prepayment premium, which was included in interest expense.

The August 31, 2020 redemption resulted in a $ 17.0 million prepayment premium, which was included in interest expense during the year ended September 30, 2020.

Other Debt and Other Items

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The Company’s 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, 2020 and 2019, these outstanding standby letters of credit totaled $ 510.1 million and $ 470.9 million, respectively.

At September 30, 2021 and September 30, 2020, these outstanding standby letters of credit totaled $ 478.5 million and $ 510.1 million, respectively.

As of September 30, 2021, the Company had $ 463.6 million available under these unsecured credit facilities.

Effective Interest Rate

The Company’s average effective interest rate on its total debt, including the effects of the interest rate swap agreements, during the years ended September 30, 2020, 2019 and 2018 was 5.3% , 5.1% and 5.1% , respectively.

The Company’s average effective interest rate on its total debt, including the effects of the interest rate swap agreements and excluding the effects of prepayment premiums included in interest expense, during the years ended September 30, 2021, 2020 and 2019 was 4.4% , 5.3% and 5.1% , respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the years ended September 30, 2021, 2020 and 2019 of $ 10.2 million, $ 5.4 million and $ 5.0 million, respectively.

Derivative Financial Instruments and Fair Value Measurements

The Company uses certain interest rate derivative contracts to hedge interest rate exposures on the Company’s variable rate debt.

The Company uses interest rate derivative contracts to hedge interest rate exposures on the Company’s variable rate debt.

The Company enters into foreign currency derivative contracts with financial institutions to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations.

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The Company initially reports any gain on the effective portion of a cash flow hedge as a component of accumulated other comprehensive loss.

Depending on the type of cash flow hedge, the gain is subsequently reclassified to interest expense when the interest expense on the variable rate debt is recognized.

The gain or loss is subsequently reclassified to interest expense when the interest expense on the variable rate debt is recognized.

If the hedged transaction becomes probable of not occurring, any gain or loss related to interest rate swap agreements would be recognized in other income.

The notional principal in U.S.

dollar (USD), Canadian dollar (CAD), and Australian dollar (AUD), fixed rates and related expiration dates of the Company’s outstanding interest rate swap agreements were as follows:

The notional principal, fixed rates and related effective and expiration dates of the Company’s outstanding interest rate swap agreements were as follows:

September 30, 2021

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February 2023

September 30, 2020

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February 2023

September 2022

February 2023

Subsequent to the end of the third quarter of fiscal 2021, the Company entered into new interest rate swap agreements with a notional value of $ 400.0 million to manage the interest rate exposure of its variable rate loans.

The new swaps will become effective February 2023 and terminate in March 2028.

By entering into the swap agreements, the Company converted a portion of the LIBOR rate-based liability into a fixed rate liability.

The Company will pay a fixed rate of 1.349 % and receive payment at the prevailing one-month LIBOR.

Other Foreign Currency Forward Contracts

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See Note 17 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive income or loss for the years ended September 30, 2021, 2020 and 2019.

Amounts recognized in accumulated other comprehensive loss from the Company’s foreign currency options were immaterial for all years presented.

Amounts reclassified from accumulated other comprehensive loss into income from the foreign currency options were immaterial for all years presented.

Additionally, there were no material losses recognized in income due to amounts excluded from effectiveness testing from the Company’s interest rate swap agreements.

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Retained earnings decreased $ 87.8 million due to the adoption, primarily from impairment of the right-of-use assets associated with office building leases.

Consistent with its restructuring plan to improve profitability in the fourth quarter of fiscal 2019, the Company evaluated its real estate portfolio to better align with the ongoing business.

The Company identified leased assets that were not recoverable, and recorded an adjustment to retained earnings upon adoption reflecting the impairment of those long-lived leased assets.

Fair value of the right-of-use assets was determined primarily using Level 3 inputs, such as discounted cash flows.

The Company also applied transition elections that allow it to avoid reassessment of whether expired or expiring leases are or contain leases, lease classification, and initial direct costs.

The Company also applied transition elections that allow it to avoid reassessment of lease definition, classification, or direct costs relating to expired or expiring leases.

Adoption of the new lease guidance did not significantly change the Company’s accounting for finance leases, which were previously referred to as capital leases.

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September 30, 2021

September 30, 2020

(in millions)

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Variable lease cost

Short-term lease cost

Total lease cost

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Balance Sheet Classification

Sept 30, 2020

September 30, 2021

September 30, 2020

Operating lease assets

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Total non-current lease liabilities

Sept 30, 2020

September 30, 2021

September 30, 2020

Weighted average remaining lease term (in years):

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Fiscal Year Ended

Sept 30, 2020

September 30,

(in millions)

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See also Note 13.

Accelerated Share Repurchase —In August 2018, the Company entered into an accelerated share repurchase (ASR) with JPMorgan Chase Bank, National Association (JPMorgan) to repurchase $ 150 million of its common stock.

During the quarter ended September 30, 2018, JPMorgan delivered 4.0 million shares to the Company, at which point the Company’s shares outstanding were reduced and accounted for as a reduction to retained earnings.

The initial share delivery represented the minimum amount of shares JPMorgan was contractually obligated to provide under the ASR agreement.

The ASR completed on October 11, 2018, which resulted in the delivery of an additional 0.6 million shares to the Company from JPMorgan.

Share-Based Payments

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Exercisable as of September 30, 2021

The aggregate intrinsic value of stock options exercised during the year ended September 30, 2018 was $ 0.9 million.

The fair value of the Company’s employee stock option awards is estimated on the date of grant.

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Income before income taxes included income from domestic operations of $ 98.6 million, $ 52.9 million, and $ 133.0 million for fiscal years ended September 30, 2021, 2020 and 2019 and income from foreign operations of $ 310.2 million, $ 179.7 million, and $ 116.2 million for fiscal years ended September 30, 2021, 2020 and 2019.

Income tax (benefit) expense was comprised of:

Income tax expense was comprised of:

Fiscal Year Ended

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(in millions)

Total current income tax expense (benefit)

Total deferred income tax (benefit) expense

Total income tax (benefit) expense

Total current income tax expense

Total deferred income tax benefit

Total income tax expense

The major elements contributing to the difference between the U.S.

federal statutory rate of 21 % for fiscal years ended September 30, 2020 and 2019 and 24.5 % for fiscal year ended September 30, 2018, respectively, and the effective tax rate are as follows:

federal statutory rate of 21 % for fiscal years ended September 30, 2021, 2020 and 2019 and the effective tax rate are as follows:

Fiscal Year Ended

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Foreign residual income

Nondeductible costs

Return to provision

Foreign tax rate differential

Income tax credits and incentives

Valuation allowance

Audit settlement

Foreign tax rate differential

Change in uncertain tax positions

Nondeductible costs

Income tax credits and incentives

Tax rate changes

Return to provision

Exclusion of tax on non-controlling interests

Tax exempt income

Audit settlement

Impact of changes in tax law

Other items, net

Total income tax expense (benefit)

Total income tax expense

During fiscal 2021, the United Kingdom enacted a corporate tax rate increase from 19 % to 25 % beginning April 2023 requiring deferred tax assets and liabilities to be remeasured.

The remeasurement resulted in a $ 25.9 million tax benefit, which is included in tax rate changes above.

During fiscal 2021, the Company partially settled its U.S.

federal audit for fiscal 2015 and 2016 and recorded tax expense of $ 13.2 million due primarily to changes in tax attributes.

During fiscal 2020, the Company 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 $ 31.7 million.

The Company is now forecasting the utilization of the net operating losses within the foreseeable future.

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

During fiscal 2018, the Company recorded a valuation allowance of $ 38.1 million against foreign tax credits related to deferred tax assets in the U.S.

In its determination of the realizability of its deferred tax assets, the Company evaluated positive evidence consisting of forecasts of foreign tax credit utilization against future foreign source income, earnings trends over a sustainable period, positive economic conditions in the industries the Company operates in, possible prudent and feasible tax planning strategies (net of costs to implement the tax planning strategies) and actual usage of foreign tax credit carryforwards.

The Company also evaluated negative evidence consisting of significant foreign tax credits and U.S.

tax law changes that restrict the usage of foreign tax credits.

This evaluation was conducted on a tax jurisdictional basis or legal entity basis, as applicable, and based on the weighing of all positive and negative evidence, a determination was made as to the realizability of the deferred tax assets on that same basis.

During fiscal 2019, the Company reevaluated the valuation allowance based on positive evidence and negative evidence including new positive evidence related to the issuance of regulations during the first quarter related to The Tax Cuts and Jobs Act (Tax Act) and forecasting the utilization of the foreign tax credits within the foreseeable future.

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

During fiscal 2019, the Company reevaluated a valuation allowance of $ 38.1 million against foreign tax credits in the U.S.

based on new positive evidence related to the issuance of regulations related to The Tax Cuts and Jobs Act (Tax Act) and forecasting the utilization of the foreign tax credits within the foreseeable future.

Based on the weighing of all positive and negative evidence the Company determined that a valuation allowance was no longer needed and released the valuation allowance resulting in a tax benefit of $ 38.1 million.

During fiscal 2018, President Trump signed what is commonly referred to as the Tax Act into law.

The Tax Act reduced the Company's U.S.

federal corporate tax rate from 35 % to a blended tax rate of 24.5 % for its fiscal year ending September 30, 2018 and 21 % for fiscal years thereafter, required companies to pay a one-time transition tax on accumulated earnings of foreign subsidiaries, created new taxes on foreign sourced earnings and eliminated or reduced deductions.

During fiscal 2018, the Company recorded tax expense of $ 38.9 million related to the remeasurement of its U.S.

deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 %.

In addition, the Company released the deferred tax liability and recorded a tax benefit related to foreign subsidiaries for which the undistributed earnings are not intended to be reinvested indefinitely for $ 79.8 million and accrued $ 53.4 million of tax expense related to the one-time transition tax.

During fiscal 2019, the Company completed the calculation of the total foreign earnings and profits of foreign subsidiaries and recorded a tax benefit of $ 1.5 million.

During fiscal 2018, the Company had a favorable settlement for R&D credits and recorded a tax benefit of $ 19.9 million.

In addition, the Company effectively settled the U.S.

federal income tax examination for URS pre-acquisition tax years 2012, 2013 and 2014 and recorded an additional benefit of $ 27.7 million related to various adjustments.

The Company is currently under tax audit in several jurisdictions including the U.S and believe the outcomes which are reasonably possible within the next twelve months, including lapses in statutes of limitations, could result in adjustments, but will not result in a material change in the liability for uncertain tax positions.

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Net deferred tax assets

As of September 30, 2020 and 2019, the Company has available unused foreign and state net operating loss (NOL) carryforwards of $ 710.2 million and $ 505.3 million, respectively, which expire at various dates over the next several years and capital loss carryforwards of $ 355.7 million which expire in 2025;

As of September 30, 2021, and 2020, the Company has available unused foreign and state net operating loss (NOL) carryforwards of $ 667.0 million and $ 710.2 million, respectively, which expire at various dates over the next several years and capital loss carryforwards of $ 184.1 million and $ 355.7 million, respectively, which expire in 2025 and 2026;

some foreign NOL carryforwards never expire.

1 unchanged sentence

As of September 30, 2021, and 2020, gross deferred tax assets were $ 901.0 million and $ 956.6 million, respectively.

The Company has recorded a valuation allowance of $ 217.5 million and $ 120.6 million at September 30, 2020 and 2019, respectively, primarily related to foreign and state net operating loss carryforwards, capital loss carryforwards, tax credits and other deferred tax assets.

The Company has recorded a valuation allowance of $ 197.7 million and $ 217.5 million as of September 30, 2021 and 2020, respectively, primarily related to foreign and state net operating loss carryforwards, capital loss carryforwards, tax credits and other deferred tax assets.

The Company has performed an assessment of positive and negative evidence, including the nature, frequency, and severity of cumulative financial reporting losses in recent years, the future reversal of existing temporary differences, predictability of future taxable income exclusive of reversing temporary differences of the character necessary to realize the asset, relevant carryforward periods, taxable income in carry-back years if carry-back is permitted under tax law, and prudent and feasible tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset that would otherwise expire.

Although realization is not assured, based on the Company’s assessment, the Company has concluded that it is more likely than not that the remaining gross deferred tax asset (exclusive of deferred tax liabilities) of $ 703.3 million will be realized and, as such, no additional valuation allowance has been provided.

The net increase in the valuation allowance of $ 96.9 million is primarily attributable to an increase in valuation allowances of $ 71.2 million related to capital losses, partially offset by the release of a valuation allowance of $ 31.7 million related to net operating losses and other deferred tax assets in Canada, the utilization of $ 1.5 million of foreign net operating loss carryforwards in the current year and increases in valuation allowances for unbenefitable losses.

The net decrease in the valuation allowance of $ 19.8 million is primarily attributable to a decrease in valuation allowances of $ 49.5 million related to capital losses, partially offset by increases in valuation allowances of $ 29.6 million for foreign unbenefitable losses.

Generally, the Company does not provide for U.S.

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As of September 30, 2021, the accrued interest and penalties were $ 20.0 million and $ 3.9 million, respectively, excluding any related income tax benefits.

At September 30, 2019, the accrued interest and penalties were $ 20.3 million and $ 4.3 million, respectively, excluding any related income tax benefits.

As of September 30, 2020, the accrued interest and penalties were $ 18.9 million and $ 2.7 million, respectively, excluding any related income tax benefits.

The Company files income tax returns in numerous tax jurisdictions, including the U.S., and numerous U.S.

37 unchanged sentences

Fair value of the long-lived assets was determined primarily using Level 3 inputs, such as discounted cash flows.

During the twelve months ended September 30, 2020, the Company applied for subsidies in accordance with various government legislations.

The Company recognized $ 23.2 million during fiscal year 2020 as a reduction to cost of revenues as the expected amount of the subsidy.

Reclassifications out of Accumulated Other Comprehensive Loss

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Balances at September 30, 2020

Comprehensive

Balances at September 30, 2020

Other comprehensive income (loss) before reclassification

Amounts reclassified from accumulated other comprehensive loss

Balances at September 30, 2021

Commitments and Contingencies

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These agreements are entered into primarily to support the project execution commitments of these entities.

The Company’s registered investment adviser jointly manages and sponsors the AECOM-Canyon Equity Fund, L.P.

The Company’s investment adviser jointly manages and sponsors the AECOM-Canyon Equity Fund, L.P.

(the “Fund”), in which the Company indirectly holds an equity interest and has an ongoing capital commitment to fund investments.

At September 30, 2020, the Company has capital commitments of approximately $ 22.1 million to the Fund over the next 8 years .

At September 30, 2021, the Company has capital commitments of $ 19.3 million to the Fund over the next 7 years .

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

9 unchanged sentences

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

The Company intends to appeal these decisions by December 30, 2020.

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.

22 unchanged sentences

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 to the Purchaser including the Former Affiliate, however, the Refinery Turnaround project, including related claims and liabilities, remained as part of the Company's self-perform at-risk construction business which is classified within discontinued operations.

The parties have agreed on a February 28, 2022 deadline for close of discovery in this matter.

On January 31, 2020, the Company completed the sale of its Management Services business to the Purchaser including the Former Affiliate, however, the Refinery Turnaround Project, including related claims and liabilities, has been retained by the Company.

The Company intends to vigorously prosecute and defend this matter;

4 unchanged sentences

This reorganization better reflects the continuing operations of the Company after the sale of its former Management Services reportable segment and planned disposal of its self-perform at-risk construction businesses discussed in Note 3.

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

The businesses that comprised the Company's former Management

Services reportable segment and the civil infrastructure, power and oil and gas construction businesses in the former Construction Services reportable segment were classified as discontinued operations.

The former Design and Consulting Services reportable segment and construction management business in the former Construction Services reportable segment were reformed around geographic regions.

12 unchanged sentences

Restructuring costs

Operating income (loss)

Operating income

Segment assets

4 unchanged sentences

Restructuring costs

Gain on disposal activities

Impairment of long lived assets

Operating income (loss)

Operating income

Segment assets

3 unchanged sentences

General and administrative expenses

Operating income (loss)

Restructuring costs

Gain on disposal activities

Impairment of long lived assets

Operating income

Segment assets

27 unchanged sentences

Net income from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

Net loss from discontinued operations

Net income attributable to noncontrolling interests from continuing operations

1 unchanged sentence

Net income attributable to noncontrolling interests

Net income (loss) attributable to AECOM from continuing operations

Net income (loss) attributable to AECOM from discontinued operations

Net income (loss) attributable to AECOM

Net income attributable to AECOM per share:

Net income attributable to AECOM from continuing operations

Net loss attributable to AECOM from discontinued operations

Net income attributable to AECOM

Net income (loss) attributable to AECOM per share:

Basic continuing operations per share

11 unchanged sentences

Restructuring costs

Impairment of long-lived assets

Gain on disposal activities

Income from operations

Interest expense

(Loss) income from continuing operations before taxes

Income tax (benefit) expense for continuing operations

Income from continuing operations before taxes

Income tax expense (benefit) for continuing operations

Net income from continuing operations

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Net income (loss) attributable to AECOM

Net income (loss) attributable to AECOM per share:

Net income attributable to AECOM per share:

Basic continuing operations per share

5 unchanged sentences

Weighted average shares outstanding:

Subsequent Events

On October 16, 2020, the Company closed on the sale of its Power construction business to CriticalPoint Capital, LLC.

Prior to the sale, the Power construction business was classified within discontinued operations.

The Company has repurchased approximately 7.0 million shares for approximately $ 318.7 million since the beginning of fiscal year 2021.

AECOM Technology Corporation

11 unchanged sentences

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 8. Financial Statements and Supplementary Data