What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2023-02-07 · 163 added, 98 removed, 628 unchanged (29% of the section changed)

38 unchanged sentences

AECOM STOCKHOLDERS’ EQUITY:

Common stock-authorized, 300,000,000 shares of $ 0.01 par value as of December 31, 2022 and September 30, 2022;

issued and outstanding 138,953,354 and 138,933,907 shares as of December 31, 2022 and September 30, 2022, respectively

Common stock-authorized, 300,000,000 shares of $ 0.01 par value as of March 31, 2023 and September 30, 2022;

issued and outstanding 138,724,105 and 138,933,907 shares as of March 31, 2023 and September 30, 2022, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenue

9 unchanged sentences

Net income attributable to noncontrolling interests from continuing operations

Net loss attributable to noncontrolling interests from discontinued operations

Net (income) loss attributable to noncontrolling interests

Net loss (income) attributable to noncontrolling interests from discontinued operations

Net income attributable to noncontrolling interests

Net income attributable to AECOM from continuing operations

Net income (loss) attributable to AECOM from discontinued operations

Net loss attributable to AECOM from discontinued operations

Net income attributable to AECOM

11 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income, net of tax:

2 unchanged sentences

Pension adjustments, net of tax

Other comprehensive income, net of tax

Other comprehensive (loss) income, net of tax

Comprehensive income, net of tax

Noncontrolling interests in comprehensive (income) loss of consolidated subsidiaries, net of tax

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

Comprehensive income attributable to AECOM, net of tax

5 unchanged sentences

Stockholders’

BALANCE AT DECEMBER 31, 2022

Dividends declared

Other comprehensive loss

Issuance of stock

Repurchases of stock

Stock-based compensation

Contributions from noncontrolling interests

Distributions to noncontrolling interests

BALANCE AT MARCH 31, 2023

Comprehensive

Stockholders’

BALANCE AT DECEMBER 31, 2021

Dividends declared

Other comprehensive income

Issuance of stock

Repurchases of stock

Stock-based compensation

Other transactions with noncontrolling interests

Distributions to noncontrolling interests

BALANCE AT MARCH 31, 2022

Comprehensive

Stockholders’

BALANCE AT SEPTEMBER 30, 2022

6 unchanged sentences

Distributions to noncontrolling interests

BALANCE AT DECEMBER 31, 2022

BALANCE AT MARCH 31, 2023

Comprehensive

3 unchanged sentences

Dividends declared

Other comprehensive income (loss)

Other comprehensive income

Issuance of stock

4 unchanged sentences

Distributions to noncontrolling interests

BALANCE AT DECEMBER 31, 2021

BALANCE AT MARCH 31, 2022

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

(unaudited - in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

25 unchanged sentences

Repayments of borrowings under credit agreements

( 1,564,820 )

( 1,363,012 )

Cash paid for debt issuance costs

Dividends paid

Proceeds from issuance of common stock

Proceeds from exercise of stock options

Payments to repurchase common stock

17 unchanged sentences

The consolidated financial statements included in this report have been prepared consistently with the accounting policies described in the Annual Report, except as noted, and should be read together with the Annual Report.

The results of operations for the three months ended December 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2023.

The results of operations for the three and six months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2023.

As discussed in more detail in Note 3, the Company concluded that its self-perform at-risk construction businesses met the criteria for held for sale beginning in the first quarter of fiscal 2020 and met the criteria for discontinued operation classification.

5 unchanged sentences

New Accounting Pronouncements and Changes in Accounting

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

In August 2018, the Financial Accounting Standards Board (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 adopted the new guidance starting on October 1, 2021.

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

The adoption of the new guidance did not have a significant impact on the Company’s financial statements.

In December 2019, the FASB issued new accounting guidance which simplifies the accounting for income taxes.

15 unchanged sentences

In the first quarter of fiscal 2022, the Company recorded an additional $ 40.0 million loss primarily related to revisions of estimates for its working capital obligation to be paid and a contingent consideration receivable.

In the second quarter of fiscal 2023, the Company recorded a $ 38.9 million loss related to a revised estimate of its contingent consideration receivable recognized at the sale.

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.

15 unchanged sentences

Three months ended

Six months ended

Cost of revenue

Gross profit (loss)

Gross (loss) profit

Equity in earnings of joint ventures

8 unchanged sentences

Three months ended

Six months ended

Payments for capital expenditures

The changes in the carrying value of goodwill by reportable segment for the three months ended December 31, 2022 were as follows:

The changes in the carrying value of goodwill by reportable segment for the six months ended March 31, 2023 were as follows:

September 30,

1 unchanged sentence

International

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of December 31, 2022 and September 30, 2022, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows:

December 31, 2022

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of March 31, 2023 and September 30, 2022, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows:

March 31, 2023

September 30, 2022

1 unchanged sentence

Customer relationships

Amortization expense of acquired intangible assets included within cost of revenue was $ 4.7 million for the three months ended December 31, 2022 and 2021.

Amortization expense of acquired intangible assets included within cost of revenue were $ 9.3 million and $ 9.5 million for the six months ended March 31, 2023 and 2022, respectively.

The following table presents estimated amortization expense of existing intangible assets for the remainder of fiscal 2023 and for the succeeding years:

(in millions)

2023 (nine months remaining)

2023 (six months remaining)

Revenue Recognition

4 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 pass-through revenues for the three months ended December 31, 2022 and 2021 were $ 1.8 billion and $ 1.7 billion, respectively.

These pass-through revenues for the six months ended March 31, 2023 and 2022 were $ 3.6 billion and $ 3.3 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.

26 unchanged sentences

Three months ended

Six months ended

(in millions)

3 unchanged sentences

Three months ended

Six months ended

(in millions)

2 unchanged sentences

Total revenue

As of December 31, 2022, the Company had allocated $ 22.5 billion of transaction price to unsatisfied or partially satisfied performance obligations, of which approximately 55 % is expected to be satisfied within the next twelve months .

As of March 31, 2023, the Company had allocated $ 22.2 billion of transaction price to unsatisfied or partially satisfied performance obligations, of which approximately 55 % is expected to be satisfied within the next twelve months .

Contract liabilities represent amounts billed to clients in excess of revenue recognized to date.

The Company recognized revenue of $ 423.0 million and $ 466.2 million during the three months ended December 31, 2022 and 2021, respectively, that was included in contract liabilities as of September 30, 2022 and 2021, respectively.

The Company recognized revenue of $ 696.9 million and $ 458.5 million during the six months ended March 31, 2023 and 2022, respectively, that was included in contract liabilities as of September 30, 2022 and 2021, respectively.

The Company’s timing of revenue recognition may not be consistent with its rights to bill and collect cash from its clients.

10 unchanged sentences

Total accounts receivable—net

Substantially all contract assets as of December 31, 2022 and September 30, 2022 are expected to be billed and collected within twelve months , except for claims.

Significant claims recorded in contract assets and other non-current assets were approximately $ 110 million as of both December 31, 2022 and September 30, 2022.

Substantially all contract assets as of March 31, 2023 and September 30, 2022 are expected to be billed and collected within twelve months, except for claims.

Significant claims recorded in contract assets and other non-current assets were approximately $ 140 million as of March 31, 2023 and $ 110 million as of September 30, 2022.

The asset related to the Deactivation, Demolition, and Removal Project retained from the MS Purchaser as defined in and discussed in Note 15 is presented in prepaid expense and other current assets from continuing operations in the Consolidated Balance Sheet.

2 unchanged sentences

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 December 31, 2022 and September 30, 2022.

The Company sold trade receivables to financial institutions, of which $ 245.9 million and $ 240.3 million were outstanding as of December 31, 2022 and September 30, 2022, respectively.

No single client accounted for more than 10 % of the Company’s outstanding receivables at March 31, 2023 and September 30, 2022.

The Company sold trade receivables to financial institutions, of which $ 256.2 million and $ 240.3 million were outstanding as of March 31, 2023 and September 30, 2022, respectively.

The Company does not retain financial or legal obligations for these receivables that would result in material losses.

31 unchanged sentences

Total liabilities and owners’ equity

Total revenue of the consolidated joint ventures was $ 484.8 million and $ 301.2 million for the three months ended December 31, 2022 and 2021, respectively.

Total revenue of the consolidated joint ventures was $ 941.7 million and $ 627.3 million for the six months ended March 31, 2023 and 2022, respectively.

The assets of the Company’s consolidated joint ventures are restricted for use only by the particular joint venture and are not available for the general operations of the Company.

10 unchanged sentences

AECOM’s investment in unconsolidated joint ventures

Three Months Ended

Six Months Ended

(in millions)

1 unchanged sentence

Summary of AECOM’s equity in earnings of unconsolidated joint ventures is as follows:

Three Months Ended

Six Months Ended

(in millions)

10 unchanged sentences

The components of net periodic benefit cost other than the service cost component are included in other income in the consolidated statement of operations.

The following table details the components of net periodic benefit cost for the Company’s pension plans for the three months ended December 31, 2022 and 2021:

The following table details the components of net periodic benefit cost for the Company’s pension plans for the three and six months ended March 31, 2023 and 2022:

Three Months Ended

December 31, 2022

December 31, 2021

Six Months Ended

March 31, 2023

March 31, 2022

March 31, 2023

March 31, 2022

(in millions)

4 unchanged sentences

Amortization of net loss (gain)

Settlement loss recognized

Net periodic benefit cost (credit)

The total amounts of employer contributions paid for the three months ended December 31, 2022 were $ 2.5 million for U.S.

The total amounts of employer contributions paid for the six months ended March 31, 2023 were $ 4.0 million for U.S.

plans and $ 12.6 million for non-U.S.

9 unchanged sentences

Long-term debt

The following table presents, in millions, scheduled maturities of the Company’s debt as of December 31, 2022:

2023 (nine months remaining)

The following table presents, in millions, scheduled maturities of the Company’s debt as of March 31, 2023:

2023 (six months remaining)

Credit Agreement

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.

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.

At the time of amendment, the Credit Agreement consisted 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.

10 unchanged sentences

The Credit Agreement contains provisions addressing the end of the use of LIBOR as a benchmark rate of interest and a mechanism for determining an alternative benchmark rate of interest.

When the provisions are triggered, LIBOR would be replaced by a secured overnight financing rate (SOFR)-based rate, which will be subject to a spread adjustment which may be positive, negative or zero.

When the provisions are triggered, LIBOR would be replaced by a secured overnight financing rate (SOFR)-based rate, which will be subject to a spread adjustment.

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.

2 unchanged sentences

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 2.20 to 1.00 at December 31, 2022.

As of December 31, 2022, the Company was in compliance with the covenants of the Credit Agreement.

The Company’s consolidated leverage ratio was 2.20 to 1.00 at March 31, 2023.

As of March 31, 2023, the Company was in compliance with the covenants of the Credit Agreement.

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.

8 unchanged sentences

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

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 December 31, 2022 and September 30, 2022, letters of credit totaled $ 4.4 million and $ 4.4 million, respectively, under the Company’s Revolving Credit Facility.

As of December 31, 2022 and September 30, 2022, the Company had $ 1,145.6 million and $ 1,145.6 million, respectively, available under its revolving credit 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 March 31, 2023 and September 30, 2022, letters of credit totaled $ 4.4 million and $ 4.4 million, respectively, under the Company’s Revolving Credit Facility.

As of March 31, 2023 and September 30, 2022, the Company had $ 1,145.6 million and $ 1,145.6 million, respectively, available under its revolving credit facility.

2027 Senior Notes

1 unchanged sentence

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.

As of December 31, 2022, the estimated fair value of the 2027 Senior Notes was approximately $ 959.9 million.

The fair value of the 2027 Senior Notes as of December 31, 2022 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.

As of March 31, 2023, the estimated fair value of the 2027 Senior Notes was approximately $ 972.4 million.

The fair value of the 2027 Senior Notes as of March 31, 2023 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 is payable on the 2027 Senior Notes at a rate of 5.125 % per annum.

5 unchanged sentences

The indenture also contains customary negative covenants.

The Company was in compliance with the covenants relating to the 2027 Senior Notes as of December 31, 2022.

The Company was in compliance with the covenants relating to the 2027 Senior Notes as of March 31, 2023.

Other Debt and Other Items

1 unchanged sentence

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 December 31, 2022 and September 30, 2022, these outstanding standby letters of credit totaled $ 871.1 million and $ 640.3 million, respectively.

As of December 31, 2022, the Company had $ 425.0 million available under these unsecured credit facilities.

At March 31, 2023 and September 30, 2022, these outstanding standby letters of credit totaled $ 860.5 million and $ 640.3 million, respectively.

As of March 31, 2023, the Company had $ 441.6 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 and interest rate cap agreements, during the three months ended December 31, 2022 and 2021 was 5.1% and 3.4% , respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three months ended December 31, 2022 and 2021 of $ 1.2 million and $ 1.2 million, respectively.

The Company’s average effective interest rate on its total debt, including the effects of the interest rate swap and interest rate cap agreements, during the six months ended March 31, 2023 and 2022 was 5.2% and 3.3% , respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three and six months ended March 31, 2023 of $ 1.2 million and $ 2.4 million, respectively, and for the three and six months ended March 31, 2022 of $ 1.2 million and $ 2.5 million, respectively.

Derivative Financial Instruments and Fair Value Measurements

3 unchanged sentences

The Company recognizes derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value.

The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as

accounting hedges in the accompanying consolidated statements of operations as cost of revenue, interest expense or to accumulated other comprehensive loss in the accompanying consolidated balance sheets.

The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as accounting hedges in the accompanying consolidated statements of operations as cost of revenue, interest expense or to accumulated other comprehensive loss in the accompanying consolidated balance sheets.

Cash Flow Hedges

4 unchanged sentences

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

December 31, 2022

March 31, 2023

Notional Amount

2 unchanged sentences

February 2023

September 30, 2022

16 unchanged sentences

The Company uses foreign currency forward contracts which are not designated as accounting hedges to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary.

Gains and losses on these contracts were not material for the three months ended December 31, 2022 and 2021.

Gains and losses on these contracts were not material for the six months ended March 31, 2023 and 2022.

Fair Value Measurements

The Company’s non-pension financial assets and liabilities recorded at fair value relate to the interest rate swap and interest rate cap agreements included in other current assets and other non-current assets on December 31, 2022 and were $ 14.6 million, and $ 34.1 million, respectively.

The Company’s non-pension financial assets and liabilities recorded at fair value relate to the interest rate swap and interest rate cap agreements included in other current assets, other non-current assets and other current liabilities on March 31, 2023 and were $ 14.3 million, $ 25.8 million, and $ 1.9 million, respectively.

The fair values of the interest rate swap and interest rate cap agreements included in other current assets and other non-current assets on September 30, 2022 were $ 9.4 million and $ 41.8 million, respectively.

The fair values of the interest rate swap and interest rate cap agreements were derived by taking the net present value of the expected cash flows using observable market inputs (Level 2) such as LIBOR or SOFR rate curves, futures, volatilities and basis spreads (when applicable).

See Note 14 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive loss for the three months ended December 31, 2022 and 2021.

See Note 14 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive loss for the six months ended March 31, 2023 and 2022.

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

3 unchanged sentences

The grant date fair value of PEP awards and restricted stock unit awards is primarily based on that day’s closing market price of the Company’s common stock.

Restricted stock units and PEP units activity for the three months ended December 31 was as follows:

Restricted stock units and PEP units activity for the six months ended March 31 was as follows:

(in millions)

4 unchanged sentences

PEP units earned

Outstanding at December 31,

Total compensation expense related to these share-based payments including stock options was $ 11.9 million and $ 9.8 million during the three months ended December 31, 2022 and 2021, respectively.

Unrecognized compensation expense related to total share-based payments outstanding as of December 31, 2022 and September 30, 2022 was $ 71.7 million and $ 45.9 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years .

The Company’s effective tax rate was 21.0 % and 15.5 % for the three months ended December 31, 2022 and 2021, respectively.

Outstanding at March 31,

Total compensation expense related to these share-based payments including stock options was $ 24.6 million and $ 21.7 million during the six months ended March 31, 2023 and 2022, respectively.

Unrecognized compensation expense related to total share-based payments outstanding as of March 31, 2023 and September 30, 2022 was $ 64.2 million and $ 45.9 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years .

The Company’s effective tax rate was 23.1 % and 24.8 % for the six months ended March 31, 2023 and 2022, respectively.

The most significant items contributing to the difference between the statutory U.S.

federal corporate tax rate of 21.0 % and the Company’s effective tax rate for the three-month period ended December 31, 2022 were a tax benefit of $ 8.6 million related to income tax credits and incentives and tax expense of $ 8.5 million related to foreign residual income.

federal corporate tax rate of 21.0 % and the Company’s effective tax rate for the six-month period ended March 31, 2023 were a tax benefit of $ 23.6 million related to income tax credits and incentives, tax expense of $ 19.1 million related to foreign residual income, and tax expense of $ 9.0 million related to state income taxes.

These items are expected to have a continuing impact on the effective tax rate for the remainder of the fiscal year.

The most significant items contributing to the difference between the statutory U.S.

federal corporate tax rate of 21.0 % and the Company’s effective tax rate for the three-month period ended December 31, 2021 were a tax benefit of $ 21.9 million related to changes in valuation allowances, tax expense of $ 16.1 million primarily related to changes in foreign uncertain tax positions, a tax benefit of $ 13.3 million related to income tax credits and incentives, and a tax expense of $ 11.6 million related to foreign residual income.

During the three-month period ended December 31, 2021, valuation allowances in the amount of $ 21.9 million primarily related to net operating losses in certain foreign entities were released due to sufficient positive evidence.

federal corporate tax rate of 21.0 % and the Company’s effective tax rate for the six-month period ended March 31, 2022 were a tax benefit of $ 26.5 million related to income tax credits and incentives, tax expense of $ 19.5 million related to foreign residual income, a tax benefit of $ 13.9 million related to changes in valuation allowances, tax expense of $ 14.9 million primarily related to changes in foreign uncertain tax positions, and tax expense of $ 11.1 million related to state income taxes.

During the six-month period ended March 31, 2022, valuation allowances in the amount of $ 21.9 million primarily related to net operating losses in certain foreign entities were released due to sufficient positive evidence.

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

16 unchanged sentences

The Company includes as potential common shares the weighted average dilutive effects of equity awards using the treasury stock method.

For the three months ended December 31, 2022 and 2021, equity awards excluded from the calculation of potential common shares were not significant.

For the three and six months ended March 31, 2023 and 2022, equity awards excluded from the calculation of potential common shares were not significant.

The following table sets forth a reconciliation of the denominators for basic and diluted earnings per share:

Three Months Ended

Six Months Ended

(in millions)

13 unchanged sentences

Three Months Ended

December 31, 2022

December 31, 2021

Six Months Ended

March 31, 2023

March 31, 2022

March 31, 2023

March 31, 2022

(in millions)

8 unchanged sentences

Balance Sheet Classification

December 31, 2022

March 31, 2023

September 30, 2022

14 unchanged sentences

Total non-current lease liabilities

December 31, 2022

March 31, 2023

September 30, 2022

6 unchanged sentences

Additional cash flow information related to leases is as follows:

Three Months Ended

Six Months Ended

(in millions)

9 unchanged sentences

(in millions)

2023 (nine months remaining)

2023 (six months remaining)

Total lease payments

8 unchanged sentences

Other accrued expenses

Accrued contract costs above include balances related to professional liability accruals of $ 725.4 million and $ 713.6 million as of December 31, 2022 and September 30, 2022, respectively.

Accrued contract costs above include balances related to professional liability accruals of $ 707.7 million and $ 713.6 million as of March 31, 2023 and September 30, 2022, respectively.

The remaining accrued contract costs primarily relate to costs for services provided by subcontractors and other non-employees.

Liabilities recorded related to accrued contract losses were not material as of December 31, 2022 and September 30, 2022.

The Company did not have material revisions to estimates for contracts where revenue is recognized using the input method during the three months ended December 31, 2022 and 2021.

During the first three months of fiscal 2023, the Company incurred restructuring expenses of $ 37.5 million, including personnel and other costs of $ 36.2 million and real estate costs of $ 1.3 million, of which $ 32.6 million was accrued and unpaid at December 31, 2022.

During the first three months of fiscal 2022, the Company incurred restructuring expenses of $ 3.4 million, including personnel and other costs of $ 2.2 million and real estate costs of $ 1.2 million, of which $ 0.3 million was accrued and unpaid at December 31, 2021.

On November 17, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.18 per share, which was paid on January 20, 2023 to stockholders of record as of January 4, 2023.

As of December 31, 2022, accrued and unpaid dividends totaled $ 26.6 million and were classified within other accrued expenses on the consolidated balance sheet.

Liabilities recorded related to accrued contract losses were not material as of March 31, 2023 and September 30, 2022.

The Company did not have material revisions to estimates for contracts where revenue is recognized using the input method during the six months ended March 31, 2023 and 2022.

During the first half of fiscal 2023, the Company incurred restructuring expenses of $ 41.4 million, including personnel and other costs of $ 39.0 million and real estate costs of $ 2.4 million, of which $ 30.7 million was accrued and unpaid at March 31, 2023.

During the first half of fiscal 2022, the Company incurred restructuring expenses of $ 76.7 million, of which $ 69.1 million was related to the exit of our Russia-related businesses.

The remaining $ 7.6 million related to actions to improve margins and deliver efficiencies.

These expenses included personnel and other costs of $ 5.4 million and real estate costs of $ 2.2 million, of which $ 0.6 million was accrued and unpaid at March 31, 2022.

On March 1, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.18 per share, which was paid on April 21, 2023 to stockholders of record as of April 5, 2023.

As of March 31, 2023, accrued and unpaid dividends totaled $ 26.5 million and were classified within other accrued expenses on the consolidated balance sheet.

Reclassifications out of Accumulated Other Comprehensive Loss

The accumulated balances and reporting period activities for the three months ended December 31, 2022 and 2021 related to reclassifications out of accumulated other comprehensive loss are summarized as follows (in millions):

The accumulated balances and reporting period activities for the three and six months ended March 31, 2023 and 2022 related to reclassifications out of accumulated other comprehensive loss are summarized as follows (in millions):

Gain/(Loss)on

Comprehensive

Balances at September 30, 2022

Other comprehensive income (loss) before reclassification

Balances at December 31, 2022

Other comprehensive (loss) income before reclassification

Amounts reclassified from accumulated other comprehensive income (loss)

Balances at March 31, 2023

(Loss)/Gain on

Comprehensive

Balances at December 31, 2021

Other comprehensive income (loss) before reclassification

Amounts reclassified from accumulated other comprehensive loss

Balances at March 31, 2022

Gain/(Loss)on

Comprehensive

Balances at September 30, 2022

Other comprehensive (loss) income before reclassification

Amounts reclassified from accumulated other comprehensive income (loss)

Balances at March 31, 2023

(Loss)/Gain on

2 unchanged sentences

Other comprehensive income (loss) before reclassification

Amounts reclassified from accumulated other comprehensive income (loss)

Balances at December 31, 2021

Amounts reclassified from accumulated other comprehensive loss

Balances at March 31, 2022

Commitments and Contingencies

7 unchanged sentences

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

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

At December 31, 2022 and September 30, 2022, these outstanding standby letters of credit totaled $ 871.1 million and $ 640.3 million, respectively.

As of December 31, 2022, the Company had $ 425.0 million available under these unsecured credit facilities.

The Company’s

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

At March 31, 2023 and September 30, 2022, these outstanding standby letters of credit totaled $ 860.5 million and $ 640.3 million, respectively.

As of March 31, 2023, the Company had $ 441.6 million available under these unsecured credit facilities.

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

3 unchanged sentences

Generally, under joint venture arrangements, if a partner is financially unable to complete its share of the contract, the other partner(s) may be required to complete those activities.

At December 31, 2022, the Company was contingently liable in the amount of approximately $ 875.5 million in issued standby letters of credit and $ 4.5 billion in issued surety bonds primarily to support project execution.

At March 31, 2023, the Company was contingently liable in the amount of approximately $ 864.9 million in issued standby letters of credit and $ 4.7 billion in issued surety bonds primarily to support project execution.

In the ordinary course of business, the Company enters into various agreements providing financial or performance assurances to clients on behalf of certain unconsolidated partnerships, joint ventures and other jointly executed contracts.

2 unchanged sentences

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

At December 31, 2022, the Company has capital commitments of $ 12.3 million to the Fund over the next 6 years .

At March 31, 2023, the Company has capital commitments of $ 10.9 million to the Fund over the next 6 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.

23 unchanged sentences

The potential range of loss in excess of any current accrual cannot be reasonably estimated at this time primarily because the matter involves complex and unique environmental and regulatory issues.

the project site involves the oversight and involvement of various local, state and federal government agencies;

there is substantial uncertainty regarding any alleged damages;

and the matter is in its preliminary stages.

The project site involves the oversight and involvement of various local, state and federal government agencies and there is substantial uncertainty regarding any alleged damages.

The stream restoration project is ongoing.

Refinery Turnaround Project

2 unchanged sentences

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

In March 2019, the refinery owner sent a letter to the Company’s Former

Affiliate alleging it incurred approximately $ 79 million in damages due to the Company’s Former Affiliate’s project performance.

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

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

17 unchanged sentences

($ in millions)

Three Months Ended December 31, 2022:

Three Months Ended March 31, 2023:

Equity in earnings of joint ventures

1 unchanged sentence

Restructuring costs

Operating income

Gross profit as a % of revenue

Three Months Ended March 31, 2022:

Equity in earnings of joint ventures

General and administrative expenses

Restructuring costs

Operating income

Gross profit as a % of revenue

Six Months Ended March 31, 2023:

Equity in earnings of joint ventures

General and administrative expenses

Restructuring costs

Operating income (loss)

Gross profit as a % of revenue

Three Months Ended December 31, 2021:

Six Months Ended March 31, 2022:

Equity in earnings of joint ventures

4 unchanged sentences

Reportable Segments:

December 31, 2022

March 31, 2023

September 30, 2022

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-Q

Item 1. Financial Statements