What changed in this filing

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Item 1. Business

2024-11-19 compared with 2023-11-15 · 46 added, 68 removed, 250 unchanged (31% of the section changed)

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We refer to the fiscal year ended September 30, 2023 as “fiscal 2023” and the fiscal year ended September 30, 2024 as “fiscal 2024.”

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 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 are a leading global provider of professional infrastructure consulting and advisory 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 public and private clients worldwide in major end markets such as transportation, facilities, water, environmental, and energy.

According to Engineering News-Record’s (ENR’s) 2024 Design Survey, we are the second largest general architectural and engineering design firm in the world, ranked by 2023 design revenue, and we are the number one ranked water, 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.

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.

Clients are increasingly seeking our technical expertise to solve the world’s most complex and large scale infrastructure related challenges.

Aging infrastructure, increasing urbanization, and growing energy demand create growth secular tailwinds for our markets.

Our global network of technical experts, combined with our ability to advise, consult, design, and deliver program management services creates a competitive advantage.

Our scale also creates the capacity for investment in digital capabilities that further enhance our delivery capabilities and value proposition.

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, 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.

Planning, advisory, 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 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.

Planning, advisory, 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) :

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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 each of these services, our technical expertise includes civil engineering, structural engineering, digital, 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 design and technical consulting, advisory and program management expertise, we are able to provide our clients a broad spectrum of services across the life cycle of their assets.

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.

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 and enhance our client experience.

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.

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

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 a broader advisory, design or overall management role for the project or a series of projects, which we refer to as a program.

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

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.

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

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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.

● Energy Efficient Facilities.

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

● Government.

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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.

sports arenas, modern office and residential towers, hotels, convention centers, performance venues, aviation, and other facilities.

● Water and Wastewater.

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

Environment and Energy.

● Environmental Management.

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● Alternative/Renewable Energy.

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

● Hydropower/Dams.

Hydroelectric power stations, dams, spillways, and flood control systems.

Solar photovoltaic projects and environmental permitting services.

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

Production facilities such as ethanol plants, onshore and offshore wind farms, hydroelectric power, dams, flood control systems and geothermal subsections of regional power grids.

Program Management – We integrate the complexity of large-scale programs and projects through tailored approaches, proven methodologies, and multidisciplinary solutions to deliver transformative outcomes for our clients and the communities they serve, including:

● Megacity development.

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● Water supply systems.

Water and Environment Advisory – We provide expertise driven advisory services to infrastructure clients through the development of high-value strategies blending strategic direction with real-world expertise and deep collaboration, including:

● Digital Water Advisory and Consulting.

● Emerging Contaminants.

● Resource Management.

● Asset Management.

● Water Supply Optimization.

● Environmental Consulting.

Our AECOM Capital Segment

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

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.

These partnerships may, but are 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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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.

We completed a transaction that transitioned the AECOM Capital team to a new third-party platform in the third quarter of fiscal 2024.

The team will continue to support AECOM Capital’s investment vehicles pursuant to certain advisory agreements in a manner consistent with their current obligations.

Thinking and Acting Globally

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

First, our 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 six 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.

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.

Environmental, Social and Governance Matters

We are committed to being a leader in environmental sustainability, social responsibility, and corporate governance.

We embrace sustainability by striving to make a positive, lasting impact on society and the environment.

Sustainability is at the core of what we do and how we operate — focusing on the environmental, social and governance impact of our business.

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 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.

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

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

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.

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

Human Capital Management

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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.

Through our Thrive with AECOM program, we are focused on fostering an inclusive environment within AECOM and beyond by building diverse talent, expanding understanding, enriching communities and thinking without limits.

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

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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 .

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

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

We are advancing efforts globally in four key areas:

1) Building a workforce reflective of the communities we serve through our recruitment efforts, building leadership accountability, and partnering with nonprofit organizations and universities to build the talent pipeline for the future;

2) Enriching communities through pro-bono work, volunteerism, philanthropy and strategic partnerships;

3) Expanding understanding and empathy among employees through employee resource groups, ED&I events and celebrations, and family-friendly benefit policies;

and 4) Prioritizing social equity and impact in every project we pursue and the innovative solutions we deliver.

Freedom to Grow .

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

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

Workplace of the future .

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

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

Technical and professional development.

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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.

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 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.

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Purpose and impact .

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

Our purpose of delivering a better world is at the core of all that we do.

As the world’s trusted infrastructure consulting firm, we are determined and well-positioned to deliver positive, impactful and Sustainable Legacies for our company, our communities and our planet.

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.

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.

We maintain an internal Global Sustainable Legacies Council focused on executing on our purpose and ensuring that our actions are as strong as our policies.

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

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We report transaction price allocated to remaining unsatisfied performance obligations (RUPO) of $19.8 billion, as described in Note 4, Revenue Recognition, in the notes to our consolidated financial statements.

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

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

Accordingly, RUPO is $17.6 billion lower than backlog.

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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, 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.

Our backlog for the year ended September 30, 2024 decreased $2.2 billion, or 5.6%, to $37.4 billion as compared to $39.6 billion for the corresponding period last year, primarily due to a decrease in our Americas Construction Management design business.

The following summarizes backlog (in billions):

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state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available.

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

Further, our construction management revenue typically increases during the summer months when weather and daylight hours are more conducive to outdoor activities.

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.

Our construction and project management services also typically expand during the summer months when weather and daylight hours are more conducive to outdoor activities.

The first quarter of our fiscal year (October 1 to December 31) is typically our lowest revenue quarter.

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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