What changed in this filing

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Item 1. Business

2022-11-17 compared with 2021-11-17 · 46 added, 37 removed, 258 unchanged (24% of the section changed)

5 unchanged sentences

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.

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 five green contractor 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.

We provide advisory, 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, water, environmental, and new energy.

According to Engineering News-Record’s (ENR’s) 2022 Design Survey, we are the second largest general architectural and engineering design firm in the world, ranked by 2021 design revenue, and we are ranked as the largest environmental and transportation engineering and environmental science firm in the world.

In addition, we are ranked by ENR as the leading firm in a number of design end markets, including several water infrastructure-related markets, as well as the number one green design firm and the number six green contractor 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 and to create innovative ways of solving the world’s most complex challenges.

Clients are turning to us to create solutions to achieve their Environmental, Social, and Governance (ESG) objectives with a focus on sustainability and resilience, such as supporting the advancement of more efficient energy infrastructure.

With our market leading capabilities, we are uniquely well suited to address these challenges.

Our business focuses primarily on providing fee-based planning, consulting, architectural and engineering design services and, therefore, our business is primarily driven by knowledge-based services.

Our business focuses primarily on providing fee-based knowledge-based services.

We primarily derive income from our ability to generate revenue and collect cash from our clients through the billing of our employees’ time spent on client projects and our ability to manage our costs.

1 unchanged sentence

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

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.

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 sale 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 represented a substantial portion of the revenue of our former Construction Services segment, respectively.

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

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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 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.

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, facilities, water, government, environmental, and energy.

● International:

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.

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

● AECOM Capital (ACAP):

Investments primarily in real estate projects.

Invests primarily in and develops real estate projects.

Our Americas and International Segments

Our Americas and International segments comprise a broad array of services, generally provided on a fee-for-service basis.

These services include planning, consulting, architectural and engineering design, program management and construction management for industrial, commercial, institutional and government clients worldwide.

These services include advisory, planning, consulting, architectural and engineering design, program management and construction management for industrial, commercial, institutional and government clients worldwide.

For each of these services, our technical expertise includes civil, structural, process, mechanical, geotechnical systems and electrical engineering, architectural, landscape and interior design, urban and regional planning, project economics, cost consulting and environmental, health and safety work.

Our Americas segment provides services generally in the United States, Canada and Latin America.

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

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

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.

For example, within our environmental 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.

For example, in fiscal 2022, we launched PipeInsights™, which is a digital pipe inspection tool that accelerates the time and reduces the cost of inspection with a high degree of accuracy with embedded Machine Learning capabilities.

Our services may be sequenced over multiple phases.

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● Educational.

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

College and university campuses and other educational facilities.

● Health Care.

For example, private and public health facilities.

Private and public health facilities.

Environmental.

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ACAP typically partners with investors and experienced developers as co-general partners.

ACAP may, but is not required to, enter into contracts with our other AECOM affiliates to provide design, engineering, construction management, development and operations and maintenance services for ACAP funded projects.

ACAP may, but is not required to, enter into contracts with our other AECOM affiliates to provide design, owners engineer, construction management, development and operations and maintenance services for ACAP funded projects.

ACAP development activity is conducted through joint ventures or subsidiaries that may be consolidated or unconsolidated for financial reporting purposes depending on the extent and nature of our ownership interest.

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Our strategy is focused on setting a new standard of excellence in the professional services industry.

First, our recently simplified operating structure promotes greater connectivity and collaboration across our seven regions and five global business lines.

First, our operating structure promotes greater connectivity and collaboration across our seven regions and five global business lines.

We drive growth by prioritizing our core markets, leaning into our greatest strengths and ensuring our best talent and resources are focused on nurturing client relationships.

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Through our projects and our operations, we have both a significant opportunity and a responsibility to protect, enhance and restore the world’s natural and social systems.

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.

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.

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 increasingly ambitious greenhouse gas emissions reduction targets.

To this point, in fiscal 2022, we were among the first companies globally to have set net zero emissions reduction targets approved by the Science Based Targets Initiative (SBTi), which are designed to exceed the goals of the Paris Agreement on climate change.

These net zero emissions reduction goals include a near-term target to reduce Scope 1, 2 and 3 emissions by 50% by 2030 and a long-term target to reduce total emissions by 90% by 2040.

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

1 unchanged sentence

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.

In addition, we are leading on decarbonization measurement, biodiversity impact and re-wilding through our innovative work at the National Capital Laboratory (NCL) in the U.K., where we are restoring 100 acres of forest and reintroducing lost species.

Our work at the NCL won the 2022 Verdantix Innovation Excellence Award for Sustainability Strategy Implementation for success in analyzing and measuring biodiversity impact.

We maintain an internal Global ESG Council to coordinate and drive our ESG initiatives across AECOM worldwide, and our Board 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/esg.

12 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.

AECOM supports community uptake of approved Covid-19 vaccines as the most effective measure to end the 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.

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 .

2 unchanged sentences

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.

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.

As we move beyond the pandemic, we are continuing to evolve the way we work and offer our employees more freedom of movement and more choices in their personal and professional lives.

Freedom to Grow is our global framework designed to support employees in finding the balance and flexibility they need to be their best and deliver for clients, and a key factor in our ability to attract and retain talent.

Employees and managers can evaluate work schedules and locations and align on an arrangement that prioritizes client and team responsibilities while supporting individual needs and includes two-to-three days a week in the office as an expectation.

Our Freedom to Grow program goes far beyond just when and where we work.

We consider our people’s holistic experience, respecting diversity in work, communication and thinking styles.

Workplace of the future .

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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.

Technical and professional development.

We continue to invest in our people and programs that enrich our employees’ experience, foster a culture of collaboration and opportunity with an emphasis on global connectivity and leader effectiveness, and position AECOM as the best place to work in our industry.

These efforts include offering competitive employee health and well-being programs to support employees and their families, expanding access to and developing professional and technical training programs, delivering new digital tools to enhance connectivity, networking and collaborations among employees, introducing four distinct career paths.

Our digital learning platform, AECOM University, delivers self-directed, personalized learning experiences for critical skill building, technical certification and continued education.

We also provide high-quality, structured training programs through our Global Business Line Technical Academies, which are created by our global experts and business line leaders to deliver the latest technical training courses on key global topics, practices and markets that are relevant to our global business.

A full range of professional development programs called Leadership at all Levels cultivates innovative thinkers, supportive managers, and impactful leaders through coaching and skill building at every career level.

These programs are based on our four pillars of Leadership Capabilities, which outline the behaviors we want our leaders to demonstrate and exemplify for the collective success as an organization.

Purpose and impact .

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cost-reimbursable contracts, guaranteed maximum price contracts, and fixed-price contracts.

For the year ended September 30, 2022, our revenue was comprised of 41%, 33%, and 26% cost-reimbursable, guaranteed maximum price, and fixed-price contracts, respectively.

Cost-Reimbursable Contracts

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Guaranteed Maximum Price Contracts

Guaranteed maximum price contracts (GMP) share many of the same contract provisions as cost-plus and fixed-price contracts.

Guaranteed maximum price (GMP) contracts share many of the same contract provisions as cost-plus and fixed-price contracts.

As with cost-plus contracts, clients are provided a disclosure of all project costs, and a lump sum percentage fee is separately identified.

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There may be risks associated with completing these projects profitably if we are not able to perform our services within the fixed-price contract terms.

For the year ended September 30, 2021, our revenue was comprised of 40%, 34%, and 26% cost-reimbursable, guaranteed maximum price, and fixed-price contracts, respectively.

Joint Ventures

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

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.

Our backlog for the year ended September 30, 2022 increased $1.6 billion, or 4.1%, to $40.2 billion as compared to $38.6 billion for the corresponding period last year, primarily due to an increase in our Americas design and construction management business.

The following summarizes backlog (in billions):

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

What changed 10-K

Item 1. Business