What changed in this filing

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Item 1. Business

2023-11-15 compared with 2022-11-17 · 73 added, 59 removed, 245 unchanged (35% of the section changed)

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

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.

We provide advisory, planning, consulting, architectural and engineering design, construction and program management services, and investment and development services to public- and private-sector clients worldwide in major end markets such as transportation, facilities, water, environmental, and new energy.

According to Engineering News-Record’s (ENR’s) 2023 Design Survey, we are the second largest general architectural and engineering design firm in the world, ranked by 2022 design revenue, and we are the number one ranked transportation design, facilities design, environmental engineering, environmental consulting 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 two green design firm and the number six green contractor in the world.

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

We are accelerating investments to extend our capabilities, including the expansion of our digital capabilities to create innovative ways of delivering our work and 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 initiatives, which include supporting the advancement of more energy efficient and less-carbon-intensive infrastructure.

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

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

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

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

● International :

Planning, consulting, architectural and engineering design services 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.

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

● AECOM Capital (ACAP) :

Invests primarily in and develops real estate projects.

Primarily invests 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 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, India, Africa and the Asia-Australia-Pacific regions.

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

These services include advisory, planning, consulting, architectural and engineering design, program management and construction management for public and private clients worldwide.

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

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 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.

For example, within our water service offerings, we provide water, wastewater, water supply and water resource services, which are necessary in response to climate adaptation and resilience, drought mitigation and other environmental and social impact factors as part of major capital/infrastructure projects.

These investments include capturing the value of our libraries of data to build more efficient design processes, and innovative and more advanced solutions for increasingly complex challenges, where our digital suite of products are creating a more holistic approach to our work.

Our services may be sequenced over multiple phases or multiple projects in the form of a program.

For example, in the area of program management and construction management services, our work for a client may begin with a small consulting or planning contract, and may later develop into an overall management role for the project or a series of projects, which we refer to as a program.

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Landside terminal and airside facilities, runways, and taxiways.

● Green Facilities.

Sustainably-designed new build construction or refurbishment projects, such as office buildings, data centers and other facilities with high energy demands.

● Government.

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Private and public health facilities.

Environmental.

Sustainable building design for world-class sports arenas and stadiums.

● Construction Management.

Program and construction management services for large scale building facility construction projects primarily in the Americas including:

sports arenas, modern office and residential towers, hotels, meeting and exhibition spaces, performance venues, aviation, and other facilities.

● Water and Wastewater.

Treatment facilities as well as supply, distribution and collection systems, stormwater management, desalinization, and other water reuse technologies.

● Environmental Management.

Remediation, waste handling, testing and monitoring of environmental conditions, and environmental construction management.

● Water Resources.

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

● Drought Response and Mitigation.

Designing water re-use and similar systems to enhance resiliency of water supply.

● Hazardous Chemicals.

Treating and addressing disposal of hazardous chemicals in water supplies and surrounding environments, such as per- and polyfluoroalkyl substances (PFAS).

● Environmental Management.

Waste handling, testing and monitoring of environmental conditions, and environmental construction management.

● Remediation.

Restoring and remediating natural habitats, such as in response to industrial activity related to closed or abandoned mines.

● Permitting and Community Engagement.

Advancing client projects through permitting processes, including implementation of innovative online engagement platforms, such as PlanEngage TM .

● Demand Side Management.

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Solar photovoltaic projects and environmental permitting services.

Construction Management – We provide program and construction management services for large scale building facility construction projects primarily in the Americas including:

● Sports arenas.

● Modern office and residential towers.

● Hotel and gaming facilities.

● Meeting and exhibition spaces.

● Performance venues.

● Education facilities.

● Mass transit terminals.

● Data centers.

Program Management – We provide program management and advisory services for large scale public- and private-sector infrastructure programs around the world, including:

● Megacity development.

● Transformational transportation infrastructure, such as high-speed rail.

● Environmental remediation programs.

● Energy and grid infrastructure.

● Water supply systems.

Our AECOM Capital Segment

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, owners engineer, construction management, development and operations and maintenance services for ACAP funded projects.

These partnerships 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.

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

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

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

markets across all property types.

During fiscal 2023, we initiated a process to explore strategic options for the AECOM Capital business.

This process is consistent with our focus on our professional services business.

AECOM Capital will continue to manage existing investment vehicles and investments in a manner consistent with their current obligations.

Thinking and Acting Globally

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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.

We are transforming the way we deliver work through technology and digital platforms improving the client experience and increasing efficiency.

We are transforming the way we deliver work through technology

and digital platforms improving the client experience and increasing efficiency.

Lastly, we are building upon our position as a leading ESG company, unified by our purpose to deliver a better world.

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We believe that the quality and level of service that our professionals deliver are among the highest in our industry.

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

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

We are committed to enhancing our position as a leading employer in our industry by attracting and retaining the best technical professionals in the world.

Critical to our continued success is our ability to offer a compelling employee value proposition that promises competitive pay and benefits, an inclusive environment that supports flexibility and well-being and encourages collaboration and innovation, and a shared commitment to technical excellence, continuous learning and career growth.

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

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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 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.

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, including any necessary actions in response to local and global health crises.

Equity, diversity and inclusion .

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Freedom to Grow .

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.

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 three days a week in the office or at project sites as an expectation.

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

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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.

Technical excellence is the foundation of our business—it’s how we harness the power of our teams’ technical skills and expertise to deliver high quality solutions for clients and communities we serve.

We strive to be home to our industry's best technical minds — professionals who thrive in an environment that encourages their collaboration and innovation and celebrates great project and client outcomes.

We have invested in a robust learning ecosystem that keeps our employees project-ready with 'on the job' technical training, future-ready with new digital tools, thought leadership and programs that inspire innovation, and globally connected within their technical practice and strategic partnerships.

Our digital learning platform, AECOM University, delivers high-quality and personalized learning experiences, including our Global Technical Academies.

Created by us for us, Academies deliver structured and self-directed technical training courses on key

global topics, practices and markets that are relevant to our business.

Our Technical Practice Network connects nearly 20,000 professionals every day in a global online community to enable networking, collaboration and problem solving.

In addition, our full range of professional development programs, called Leadership at all Levels, enhance business and leadership skills.

From early career and graduate programs, to practical manager training, and executive coaching and leadership development, we are supporting development 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.

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

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

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

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

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

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

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Under fixed-unit price contracts, we perform a number of units of work at an agreed price per unit with the total payment under the contract determined by the actual number of units delivered.

Revenue is recognized for fixed-price contracts using the input method measured on a cost-to-cost basis.

Revenue is recognized for fixed-price contracts using the input method measured on a cost-to-cost basis as the Company believes this is the best measure of progress towards completion.

Some of our fixed-price contracts require us to provide surety bonds or parent company guarantees to assure our clients that their project will be completed in accordance with the terms of the contracts as further disclosed in Note 18—Commitments and Contingencies.

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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, 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.

Our backlog for the year ended September 30, 2023 increased $1.0 billion, or 2.5%, to $41.2 billion as compared to $40.2 billion for the corresponding period last year, primarily due to an increase in our International design business.

The following summarizes backlog (in billions):

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Further, our construction management revenue typically increases during the high construction season of the summer months.

Within the United States, as well as other parts of the world, our business generally benefits from milder weather conditions in our fiscal fourth quarter, which allows for more productivity from our on-site civil services.

Within the United States, as well as other parts of the world, our business generally benefits from milder weather conditions in our fiscal fourth quarter.

Our construction and project management services also typically expand during the high construction season of the summer months.

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Risk management is an integral part of our project management approach and our project execution process.

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

We have an Office of Risk Management that reviews and oversees the risk profile of our operations through a tiered process of formal risk committees with the highest-risk pursuits subject to vetting at each tier.

Following contract execution, and commencement of delivery, projects are monitored via a formal monthly or quarterly project-review process designed to ensure project performance and risk mitigation.

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

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

We maintain insurance covering professional liability and claims involving bodily injury and property damage, among other coverages.

Wherever possible, we endeavor to eliminate or reduce the risk of loss on a project through the use of quality assurance/control, risk management, workplace safety and similar methods.

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Liabilities related to environmental contamination or human exposure to hazardous substances, comparable national and state laws or a failure to comply with applicable regulations could result in substantial costs to us, including cleanup costs, fines and civil or criminal sanctions, third-party claims for property damage or personal injury, or cessation of remediation activities.

Some of our business operations are covered by Public Law 85-804, which provides for indemnification by the U.S federal government against claims and damages arising out of unusually hazardous or nuclear activities performed at the request of the U.S.

Some of our business operations are covered by Public Law 85-804, which provides for indemnification by the U.S.

federal government against claims and damages arising out of unusually hazardous or nuclear activities performed at the request of the U.S.

federal government.

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The services we provide to the U.S.

federal government are subject to Federal Acquisition Regulation, the Truth in Negotiations Act, Cost Accounting Standards, the Services Contract Act, export controls rules and Department of Defense (DOD) security regulations, as well as many other laws and regulations.

federal government are subject to Federal Acquisition Regulation, the Truth in Negotiations Act, Cost Accounting Standards, the Services Contract Act, False Claims Act, export controls rules and Department of Defense (DOD) security regulations, as well as many other laws and regulations.

These laws and regulations affect how we transact business with our clients and, in some instances, impose additional costs on our business operations.

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We are subject to the U.S.

Foreign Corrupt Practices Act and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business.

Bribery Act of 2010 prohibits both domestic and international bribery, as well as bribery across both private and public sectors.

In addition, an organization that “fails to prevent bribery” committed by anyone associated with the organization can be charged under the U.K.

Bribery Act unless the organization can establish the defense of having implemented “adequate procedures” to prevent bribery.

Foreign Corrupt Practices Act, the U.K.

Bribery Act of 2010, and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business.

To the extent we export technical services, data and products outside of the U.S., we are subject to U.S.

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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