What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-11-19 compared with 2023-11-15 · 169 added, 154 removed, 1145 unchanged (22% of the section changed)

39 unchanged sentences

In addition, the Company ’ s estimate of transaction price includes variable consideration associated with claims only to the extent that a significant reversal would not be probable.

Recognition of revenue and profit over time as performance obligations are satisfied for long-term fixed price contracts is highly judgmental as it requires the Company to prepare estimates of total contract revenue and total contract costs, including costs to complete in-process contracts.

Recognition of revenue and profit over time as performance obligations are satisfied for long-term fixed price and guaranteed maximum price contracts is highly judgmental as it requires the Company to prepare estimates of total contract revenue and total contract costs, including costs to complete in-process contracts.

These estimates are dependent upon a number of factors, including the accuracy 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.

As of September 30, 2023, significant claims recorded in contract assets and other non-current assets on the consolidated balance sheet were approximately $160.0 million.

Revenue recognition relating to claims is highly judgmental as the amount has been disputed by the customer and it requires the Company to prepare estimates of amounts expected to be recovered.

As of September 30, 2024, the Company has recorded revenue related to claims and reported related contract assets and other non-current assets on the consolidated balance sheet.

Revenue recognition relating to claims is highly judgmental as the amount has not been approved by the customer and it requires the Company to prepare estimates of amounts expected to be recovered.

Changes in recovery estimates can have a material effect on the amount of revenue recognized.

Auditing contract revenue recognition is complex and highly judgmental due to the variability and uncertainty associated with estimating the costs to complete and amounts expected to be recovered from claims.

Changes in these estimates would have a significant effect on the amount of contract revenue recognized.

How We Addressed the Matter in Our Audit

7 unchanged sentences

and recalculated revenues recognized.

To test revenue recognized relating to claims, we selected a sample of projects and evaluated the estimates made by management by reviewing documentation from management ’ s specialists and external counsel to support the amount of the claim.

We also tested management ’ s estimation process by performing a lookback analysis to evaluate claims settled in the current year compared to management ’ s prior year estimates.

4 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors and Stockholders of AECOM

To the Stockholders and the Board of Directors of AECOM

Opinion on Internal Control Over Financial Reporting

66 unchanged sentences

( 1,281,647 )

( 1,103,976 )

TOTAL AECOM STOCKHOLDERS’ EQUITY

21 unchanged sentences

Net income attributable to noncontrolling interests from continuing operations

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

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

Net income attributable to noncontrolling interests

17 unchanged sentences

September 30,

Other comprehensive income (loss), net of tax:

Net unrealized gain on derivatives, net of tax

Other comprehensive (loss) income, net of tax:

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

Foreign currency translation adjustments

11 unchanged sentences

BALANCE AT SEPTEMBER 30, 2021

Cumulative effect of accounting standard adoption

Other comprehensive income

Dividends declared

Other comprehensive loss

Issuance of stock

2 unchanged sentences

Other transactions with noncontrolling interests

Disposal of noncontrolling interest of business sold

Contributions from noncontrolling interests

6 unchanged sentences

Stock-based compensation

Other transactions with noncontrolling interests

Contributions from noncontrolling interests

1 unchanged sentence

BALANCE AT SEPTEMBER 30, 2023

( 1,103,976 )

Dividends declared

20 unchanged sentences

Non-cash stock compensation

Prepayment premium on redemption of unsecured senior notes

Impairment of long-lived assets

1 unchanged sentence

Foreign currency translation

Deferred income tax (benefit) expense

Deferred income tax expense (benefit)

Changes in operating assets and liabilities:

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Payment for business acquisition, net of cash required

Payments for sale of discontinued operations, net of cash disposed

2 unchanged sentences

Proceeds from sale of investments

Other investing activities

Proceeds from disposal of property and equipment

7 unchanged sentences

( 3,657,308 )

Redemption of unsecured senior notes

Prepayment premium on redemption of unsecured senior notes

Cash paid for debt issuance costs

18 unchanged sentences

Significant Accounting Policies

Organization — AECOM and its consolidated subsidiaries provide planning, consulting, architectural and engineering design services to public and private clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government.

The Company also provides construction services, including building construction and energy, infrastructure and industrial construction, primarily in the Americas.

Organization — AECOM and its consolidated subsidiaries provide planning, consulting, advisory, architectural and engineering design services, construction management and program management to public and private clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government.

Fiscal Year —The Company reports results of operations based on 52 -or 53 - week periods ending on the Friday nearest September 30.

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

Fiscal years 2023, 2022 and 2021 each contained 52 , 52 and 52 weeks, respectively, and ended on September 29, September 30, and October 1, respectively.

Fiscal years 2024, 2023 and 2022 each contained 52 , 52 and 52 weeks, respectively, and ended on September 27, September 29, and September 30, respectively.

Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform with the current period’s presentation.

87 unchanged sentences

New Accounting Pronouncements and Changes in Accounting

In December 2019, the Financial Accounting Standards Board (FASB) issued new accounting guidance which simplifies the accounting for income taxes.

The guidance amends certain exceptions to the general principles of Accounting Standards Codification (ASC) 740, Income Taxes , and simplifies several areas such as accounting for a franchise tax or similar tax that is partially based on income.

The Company adopted the new guidance starting on October 1, 2021.

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

In October 2021, the FASB issued final guidance to companies that apply ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination.

The new guidance creates an exception to the general requirement to measure acquired assets and liabilities at fair value on the acquisition date.

Under this exception, an acquirer applies ASC 606 to recognize and measure contract assets and contract liabilities on the acquisition date.

The Company adopted the new guidance starting on October 1, 2022 on a prospective basis and the revised guidance will be applied to any business combinations the Company undertakes.

In November 2023, the Financial Accounting Standards Board (FASB) amended the guidance of Accounting Standards Codification (ASC) 280, Segment Reporting , requiring public entities to disclose significant segment expenses and other segment items on an annual and interim basis.

The new guidance is effective for the Company for its interim period ending December 31, 2025, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this new guidance will have on its financial statement presentation.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance the income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid.

The update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments are effective for the Company’s annual periods beginning October 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this new guidance will have on its financial statement presentation.

Discontinued Operations, Goodwill, and Intangible Assets

5 unchanged sentences

Current and non-current assets and liabilities of these businesses not sold as of the balance sheet date are presented in the Consolidated Balance Sheets as assets and liabilities held for sale for both periods presented.

The Company completed the sale of its power and oil and gas construction businesses in fiscal 2021 and fiscal 2022, respectively.

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

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.

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

On January 28, 2022, the Company completed the sale of its oil and gas construction business to affiliates of Graham Maintenance Services LP for a purchase price of $ 14 million, subject to cash, debt and working capital adjustments.

The Company recorded a pre-tax gain of approximately $ 3.0 million on the sale, net of transaction costs.

During the third quarter of fiscal 2023, the Company collected approximately $ 9.2 million cash payment for contingent consideration completing this transaction.

In the second quarters of both fiscal 2024 and 2023, the Company recorded losses related to revised estimates of its contingent consideration receivable recognized in its civil infrastructure construction business of $ 103.1 million and $ 38.9 million, respectively.

During the third quarter of fiscal 2024, the Company resolved contingencies related to the sale of its civil infrastructure construction business and received equity in the counterparty, and the Company recorded a $ 12.7 million gain based on the fair value of the equity received.

Concurrently, the Company participated as a member of a lending group in a revolving credit facility for the counterparty, committing to fund $ 30 million that matures in May 2029.

As of September 30, 2024, the Company has funded $ 21.0 million, all of which was classified as a cash outflow in other investing activities and outstanding.

The following table represents summarized balance sheet information of assets and liabilities held for sale (in millions):

16 unchanged sentences

Cost of revenue

Gross (loss) profit

Equity in earnings of joint ventures

1 unchanged sentence

Transaction costs

Impairment of long-lived assets

Loss from operations

9 unchanged sentences

Payments for capital expenditures

The Company also recorded a $ 12.7 million non-cash gain in discontinued operations in fiscal 2024.

The changes in the carrying value of goodwill by reportable segment for the year ended September 30, 2024 were as follows:

7 unchanged sentences

(in millions)

Customer relationships

Backlog and Customer relationships

Amortization expense of acquired intangible assets included within cost of revenue was $ 18.8 million and $ 18.6 million for the years ended September 30, 2024 and 2023, respectively.

51 unchanged sentences

Total revenue

As of September 30, 2023, the Company had allocated $ 21.9 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 and the remaining 45 % thereafter.

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

As of September 30, 2024, the Company had allocated $ 19.8 billion of transaction price to unsatisfied or partially satisfied performance obligations, of which approximately 60 % is expected to be satisfied within the next twelve months .

The majority of the remaining performance obligation after the first 12 months is expected to be recognized over a two-year period.

Contract liabilities represent billings as of the balance sheet date, as allowed under the terms of a contract, but not yet recognized as contract revenue pursuant to the Company’s revenue recognition policy.

The Company recognized revenue of $ 801.0 million and $ 1,043.7 million during the years ended September 30, 2024 and 2023, respectively, that was included in contract liabilities as of September 30, 2023 and 2022, respectively.

3 unchanged sentences

Contract assets represent the amount of contract revenue recognized but not yet billed pursuant to contract terms or accounts billed after the balance sheet date.

Net accounts receivable consisted of the following:

30 unchanged sentences

Depreciation expense for the fiscal years ended September 30, 2024, 2023 and 2022 was $ 152.3 million, $ 152.3 million, and $ 147.0 million, respectively.

Depreciation is calculated using primarily the straight-line method over the estimated useful lives of the

assets, or in the case of leasehold improvements and capitalized leases, the lesser of the remaining term of the lease or its estimated useful life.

Depreciation is calculated using primarily the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements and capitalized leases, the lesser of the remaining term of the lease or its estimated useful life.

Joint Ventures and Variable Interest Entities

26 unchanged sentences

Total liabilities

Total AECOM (deficit) equity

Total AECOM deficit

Noncontrolling interests

28 unchanged sentences

Other joint ventures

During fiscal 2023, the Company initiated a process to explore strategic options for the AECOM Capital business, consistent with the Company's focus on its professional services business.

The Company 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.

During the third quarter of fiscal 2023, the Company identified indicators of impairment in the equity method investments held in its AECOM Capital segment.

2 unchanged sentences

In the third quarter of fiscal 2023, the Company recorded an impairment loss of $ 307.0 million to reduce the carrying value of these investments to their estimated fair values.

This impairment did not relate to investments in respect of which affiliates of AECOM Capital provide advisory services or manage third party capital.

During the first quarter of fiscal 2024, the Company recorded an additional impairment loss of $ 35.9 million.

These impairments do not relate to investments in respect of which affiliates of AECOM Capital provide advisory services or manage third party capital.

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

20 unchanged sentences

Benefits and expenses paid

Actuarial (gain) loss

Actuarial loss (gain)

Plan settlements

Plan amendments

Foreign currency translation (gain) loss

56 unchanged sentences

Amortization of net loss (gain)

Settlement (gain) loss recognized

Settlement loss (gain) recognized

Net periodic benefit cost (credit)

43 unchanged sentences

Asset Category:

Property and other

Diversified and other

The Company’s domestic and foreign plans seek a competitive rate of return relative to an appropriate level of risk depending on the funded status and obligations of each plan and typically employ both active and passive investment management strategies.

14 unchanged sentences

Fixed income funds

Common collective funds

Derivative instruments

Absolute return fund

Derivative instruments and other

As of September 30, 2023, the fair values of the Company’s pension plan assets by major asset categories were as follows:

8 unchanged sentences

Fixed income funds

Common collective funds

Derivative instruments

Changes for the year ended September 30, 2022 in the fair value of the Company’s recurring post-retirement plan Level 3 assets are as follows:

Actual return

on plan assets,

September 30,

reporting date

Ending balance

(in millions)

Level 3 Assets

Absolute return fund

Derivative instruments and other

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

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

These funds are categorized as Level 2 if the custodian obtains

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

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

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

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

Hedge funds are valued by independent administrators.

Depending on the nature of the assets, the general partners or independent administrators use both the income and market approaches in their models.

The market approach consists of analyzing market transactions for comparable assets while the income approach uses earnings or the net present value of estimated future cash flows adjusted for liquidity and other risk factors.

As of September 30, 2023, there were no material changes to the valuation techniques.

Common collective funds are valued based on net asset value (NAV) per share or unit as a practical expedient as reported by the fund manager, multiplied by the number of shares or units held as of the measurement date.

Common collective investment funds are valued based on net asset value (NAV) per share or unit as a practical expedient as reported by the fund manager, multiplied by the number of shares or units held as of the measurement date.

Accordingly, these NAV-based investments have been excluded from the fair value hierarchy.

18 unchanged sentences

Credit Agreement

On February 8, 2021, the Company entered into the 2021 Refinancing Amendment to the Credit Agreement (as amended, modified or otherwise supplemented, 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.

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

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

On April 19, 2024, the Company entered into Amendment No.

14 to Syndicated Facility Agreement (as amended, modified or otherwise supplemented, the “Credit Agreement”), pursuant to which the Company obtained a new $ 1,500,000,000 revolving credit facility (the “New Revolving Credit Facility”), a new $ 750,000,000 term loan A facility (the “New Term A Facility” and, together with the New Revolving Credit Facility, the “New Pro Rata Facilities”) and a new $ 700,000,000 term loan B facility (the “New Term B Facility” and, together with the New Pro Rata Facilities, the “New Credit Facilities”).

The New Revolving Credit Facility and the New Term A Facility mature on April 19, 2029.

The New Term B Facility matures on April 19, 2031.

The New Term A Facility and the New Term B Facility were borrowed in full on April 19, 2024 in U.S.

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

dollars or in certain foreign currencies.

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

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

The New Credit Facilities replace in full the Company’s existing revolving credit facility (the “Original Revolving Credit Facility”), term loan A facility and term loan B facility, and borrowings under the New Credit Facilities were used to refinance in full the Company’s existing credit facilities and for general corporate purposes.

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

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

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

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

The Term B Facility matures on April 13, 2028.

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

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

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.

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.

On May 23, 2023, the Company entered into Amendment No.

12 to the Credit Agreement, pursuant to which LIBOR as a benchmark rate of interest was replaced by, in the case of US Dollar-denominated loans, a secured overnight financing rate subject to a spread adjustment, and, in the case of loans denominated in other currencies, other customary successor rates, subject in certain cases to a spread adjustment.

On May 23, 2023, the Company entered into Amendment No.

13 to the Credit Agreement, pursuant to which the spread adjustments with respect to the Revolving Credit Facility and the Term A Facility was amended.

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

The applicable interest rate for U.S.

Dollar-denominated loans under the Revolving Credit Facility and the Term A Facility is calculated at a per annum rate equal to, at the Company’s option, (a) the Term SOFR (as defined in the Credit Agreement) plus an applicable margin (the “SOFR Applicable Margin”), which is currently at 1.2250 % or (b) the Base Rate (as defined in the Credit Agreement) plus an applicable margin (the “Base Rate Applicable Margin,” and together with the SOFR Applicable Margin, the “Applicable Margins”), which is currently at 0.2250 %.

The applicable interest rate for loans under the Revolving Credit Facility denominated in other currencies is calculated at a per annum rate equal to a customary floating reference rate for such currency specified in the Credit Agreement plus the SOFR Applicable Margin.

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

The Applicable Margins for the Term A Facility and the Revolving Credit Facility and the commitment fees for the Revolving Credit Facility will be adjusted on an annual basis based on the Company’s achievement of preset thresholds for each Sustainability Metric.

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

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

On October 29, 2024, the Company entered into Amendment No.

15 to Syndicated Facility Agreement, pursuant to which the Company reduced the interest rate spread applicable to its New Term B Facility.

Borrowings under (a) the New Revolving Credit Facility (in U.S.

dollars) and the New Term A Facility bear interest at a rate per annum equal to, at the Company’s option, (i) a Term SOFR rate (with a 0 % floor and SOFR adjustment of 0.10 %) or (ii) a base rate (with a 0 % floor), in each case, plus an applicable margin of 1.225 % in the case of the Term SOFR rate and 0.25 % in the case of the base rate, and (b) the New Revolving Credit Facility in currencies other than U.S.

dollars bear interest at a rate per annum equal to the applicable reference rate for such currency (including any related adjustments), plus an applicable margin of 1.225 %.

The applicable margin is subject, in each case, to adjustment based on the Company’s consolidated leverage ratio from time to time.

Borrowings under the New Term B Facility, after giving effect to Amendment No.

15 to Syndicated Facility Agreement, bear interest at a rate per annum equal to, at the Company’s option, (a) a Term SOFR rate (with a 0 % floor and a SOFR adjustment of 0 %) or (b) a base rate (with a 0 % floor), in each case, plus an applicable margin of 1.75 % in the case of the Term SOFR rate and 0.75 % in the case of the base rate.

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

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

The Credit Agreement contains customary negative covenants that include, among other things, limitations on the ability of the Company and certain of its subsidiaries, subject to certain exceptions, to incur liens and debt, make investments, dispositions, and restricted payments, change the nature of their business, consummate mergers, consolidations and the sale of all or substantially all of

their respective assets, taken as a whole, and transact with affiliates.

The Company is also required to maintain a consolidated interest coverage ratio of at least 3.00 to 1.00 and a consolidated leverage ratio of less than or equal to 4.00 to 1.00 (subject to certain adjustments in connection with permitted acquisitions), tested on a quarterly basis (the “Financial Covenants”).

The Financial Covenants do not apply to the Term B Facility.

The Company’s consolidated leverage ratio was 2.00 to 1.00 at September 30, 2023.

The Company is also required to maintain 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 Covenant”).

The Financial Covenant does not apply to the New Term B Facility.

As of September 30, 2024, the Company was in compliance with the covenants of the Credit Agreement.

1 unchanged sentence

The Credit Agreement contains customary events of default, including, among other things, nonpayment of principal, interest or fees, cross-defaults to other debt, inaccuracies of representations and warranties, failure to perform covenants, events of bankruptcy and insolvency, change of control and unsatisfied judgments, subject in certain cases to notice and cure periods and other exceptions.

At September 30, 2023 and September 30, 2022, letters of credit totaled $ 4.4 million and $ 4.4 million, respectively, under our Revolving Credit Facility.

As of September 30, 2023 and September 30, 2022, we had $ 1,145.6 million and $ 1,145.6 million, respectively, available under our revolving credit facility.

At September 30, 2024 and September 30, 2023, letters of credit totaled $ 4.4 million and $ 4.4 million, respectively, under the Company’s New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

As of September 30, 2024 and September 30, 2023, the Company had $ 1,495.6 million and $ 1,145.6 million, respectively, available under its New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

2027 Senior Notes

42 unchanged sentences

February 2023

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

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

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

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

4 unchanged sentences

In the event one-month SOFR exceeds 3.465 %, the Company will pay the spread between prevailing one-month SOFR and 3.465 %.

See Note 17 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive income for the years ended September 30, 2024, 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.

Other Foreign Currency Forward Contracts

2 unchanged sentences

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 September 30, 2023 and were $ 17.2 million and $ 37.5 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 SOFR rate curves, futures, volatilities and basis spreads (when applicable).

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

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 SOFR rate curves, futures, volatilities and basis spreads (when applicable).

As discussed in Note 3, The Company received an equity investment in the civil infrastructure construction business buyer and concurrently participated as a member of a lending group in a revolving credit facility.

The Company elected the fair value option for its equity investment due to the availability of quoted prices of identical assets.

The fair value option was also elected for the credit facility investment.

Changes in fair value of both investments are classified within other income on the consolidated statements of operations.

The Company records interest income at the stated coupon rate of the credit facility and classifies it within interest income on the consolidated statement of operations.

Fair value for the equity investment is determined using Level 1 inputs, and fair value of the credit facility investment is determined using Level 3 inputs, such as estimated cash flows and estimated discount rates.

The Company recorded a gain of $ 7.2 million in other income during the year ended September 30, 2024 representing the increase in fair value of these investments.

Below are the Company’s non-pension financial assets and liabilities recorded at fair value on a recurring basis within the ASC 820-10 fair value hierarchy:

As of September 30, 2024

Quoted Prices in

Active Markets for

Identical Assets

Balance Sheet Location

Inputs (Level 2)

(in millions)

Interest rate contracts

Other current assets

Interest rate contracts

Other non-current assets

Interest rate contracts

Other current liabilities

Interest rate contracts

Other long-term liabilities

Credit facility investment

Other non-current assets

Equity investment

Other non-current assets

Total net assets at fair value

As of September 30, 2023

Quoted Prices in

Active Markets for

Identical Assets

Balance Sheet Location

Inputs (Level 2)

(in millions)

Interest rate contracts

Other current assets

Interest rate contracts

Other non-current assets

Total net assets at fair value

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 investment assets:

Year-ended September 30, 2024

Gains/(Losses)

Interest Earned

Ending Balance

(in millions)

Credit facility investment including accrued interest

Concentration of Credit Risk

99 unchanged sentences

The Company grants stock units to employees under its Performance Earnings Program (PEP), whereby units are earned and issued dependent upon meeting established cumulative performance objectives and vest over a three-year service period.

Additionally, the Company issues restricted stock units to employees which are earned based on service conditions.

Additionally, the Company issues restricted stock units to employees and directors which are earned based on service conditions.

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 unit, PEP unit, and Stock Option activity for the year ended September 30 was as follows:

Stock Options

Exercise Price

(in millions)

Restricted stock unit and PEP unit activity for the year ended September 30 was as follows:

(in millions)

2 unchanged sentences

PEP units earned (unearned)

Vested / Exercised

Outstanding at September 30, 2022

PEP units earned (unearned)

Vested / Exercised

Outstanding at September 30, 2023

PEP units earned (unearned)

Vested / Exercised

Outstanding at September 30, 2024

Total compensation expense related to these share-based payments including stock options was $ 61.5 million, $ 45.9 million, and $ 38.5 million during the years ended September 30, 2024, 2023 and 2022, respectively.

Unrecognized compensation expense related

to total share-based payments outstanding as of September 30, 2023 and 2022 was $ 48.3 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 .

Income (loss) before income taxes included loss from domestic operations of $ 129.2 million, income of $ 235.2 million, and income of $ 98.6 million for fiscal years ended September 30, 2023, 2022 and 2021 and income from foreign operations of $ 342.6 million, $ 315.4 million, and $ 310.2 million for fiscal years ended September 30, 2023, 2022 and 2021.

Unrecognized compensation expense related to total share-based payments outstanding as of September 30, 2024 and 2023 was $ 68.7 million and $ 48.3 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years .

Income before income taxes included income from domestic operations of $ 233.0 million, loss of $ 129.2 million, and income of $ 235.2 million for fiscal years ended September 30, 2024, 2023 and 2022 and income from foreign operations of $ 485.2 million, $ 342.6 million, and $ 315.4 million for fiscal years ended September 30, 2024, 2023 and 2022.

Income tax expense was comprised of:

5 unchanged sentences

Total current income tax expense

Total deferred income tax benefit

Total deferred income tax expense (benefit)

Total income tax expense

9 unchanged sentences

Foreign residual income

Valuation allowance

Nondeductible costs

ACAP investment sale

Change in uncertain tax positions

Tax rate changes

Audit settlement

Foreign tax rate differential

Income tax credits and incentives

Valuation allowance

Exclusion of tax on non-controlling interests

Tax exempt income

Tax rate changes

Return to provision

Foreign tax rate differential

Tax exempt income

Other items, net

Total income tax expense

During fiscal 2024, the Company recorded an increase in tax benefit of $ 38.4 million related to state income taxes due to apportionment factor changes for fiscal years 2016 through 2023.

This benefit was partially offset by an increase in tax expense of $ 23.0 million related to uncertain tax positions.

During fiscal 2024, the Company sold certain ACAP investments and recorded a reduction in valuation allowances of $ 21.0 million and a reduction in deferred tax assets of $ 20.2 million.

In addition, the Company recorded a valuation allowance of $ 9.3 million related to the remaining ACAP investments.

During fiscal 2024, the Company approved a tax planning strategy and restructured certain operations in Canada which resulted in a release of a valuation allowance related to net operating losses and other deferred tax assets of $ 11.7 million.

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

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

During fiscal 2024, the Company settled its tax audit in Hong Kong for fiscal year 2011 through fiscal year 2021 and recorded a tax benefit of $ 6.9 million due primarily to changes in uncertain tax positions.

During fiscal 2023, valuation allowances in the amount of $ 21.0 million related to the AECOM Capital impairment charge were established for the portion of the charge that is not expected to be realized.

1 unchanged sentence

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.

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

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

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

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

The Company is currently under tax audit in several jurisdictions including the U.S.

and believe the outcomes which are reasonably possible within the next twelve months, including lapses in statutes of limitations, could result in adjustments, but will not result in a material change in the liability for uncertain tax positions.

where its federal income tax returns for fiscal 2017 through 2020 are being examined by the IRS.

Disputes can arise with tax authorities involving issues related to the timing of deductions, the calculation and use of credits, and the taxation of income in various tax jurisdictions because of differing interpretations or application of tax laws, regulations, and relevant facts.

The IRS is currently auditing certain tax credits and the methodology for calculating the credits.

While the Company has historically been able to sustain the credits in previous audit cycles without adjustment, the Company believes it’s reasonably possible there could be an adjustment to the liability for uncertain tax positions within the next twelve months related to this matter.

However, given the early stages of the audit of these credits, the Company is not able to reasonably estimate the range of potential outcomes.

Generally, the Company would reverse its valuation allowance in a particular tax jurisdiction if the positive evidence examined, such as projected and sustainable earnings or a tax-planning strategy that allows for the usage of the deferred tax asset, is sufficient to overcome significant negative evidence, such as large net operating loss carryforwards or a cumulative history of losses in recent years.

29 unchanged sentences

some foreign NOL carryforwards never expire.

In addition, as of September 30, 2023, the Company has unused state and foreign research and development credits of $ 27.2 million and $ 9.6 million, respectively, and other credits of $ 10.4 million which expire at various dates over the next several years.

In addition, as of September 30, 2024, the Company has unused federal, state and foreign research and development credits of $ 28.4 million, $ 27.8 million and $ 4.6 million, respectively, and other credits of $ 9.7 million which expire at various dates over the next several years.

As of September 30, 2024 and 2023, gross deferred tax assets were $ 678.9 million and $ 773.7 million, respectively.

The Company has recorded a valuation allowance of $ 171.2 million and $ 154.4 million as of September 30, 2023 and 2022, respectively,

primarily related to foreign and state net operating loss carryforwards, capital loss carryforwards, tax credits and other deferred tax assets.

The Company has recorded a valuation allowance of $ 160.9 million and $ 171.2 million as of September 30, 2024 and 2023, respectively, primarily related to foreign and state net operating loss carryforwards, capital loss carryforwards, tax credits and other deferred tax assets.

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

Although realization is not assured, based on the Company’s assessment, the Company has concluded that it is more likely than not that the remaining gross deferred tax asset (exclusive of deferred tax liabilities) of $ 518.0 million will be realized and, as such, no additional valuation allowance has been provided.

The net increase in the valuation allowance of $ 16.8 million is primarily attributable to an increase in valuation allowances of $ 21.0 million related to the AECOM Capital impairment charge in the US, a decrease in valuation allowances on foreign net operating losses and currency translation adjustments of $ 3.3 million, and decreases in valuation allowances of $ 0.9 million related to state net operating losses and credits.

The net decrease in the valuation allowance of $ 10.3 million is primarily attributable to a decrease in valuation allowances of $ 11.7 million related to the ACAP sale in the US, a decrease in valuation allowances on capital losses of $ 10.4 million, an increase in valuation allowances on foreign net operating losses and currency translation adjustments of $ 12.3 million, and decreases in valuation allowances of $ 0.6 million related to state net operating losses and credits.

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

33 unchanged sentences

Diluted EPS is computed by dividing net income attributable to AECOM by the weighted average number of common shares outstanding and potential common shares for the period.

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

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

For the periods presented, equity awards excluded from the calculation of potential common shares were not significant.

21 unchanged sentences

The Company did not have material revisions to estimates for contracts where revenue is recognized using the input method during the twelve months ended September 30, 2024 and 2023.

For the year ended September 30, 2023, the Company incurred restructuring expenses of $ 188.4 million, included personnel and other costs of $ 91.6 million and real estate costs of $ 96.8 million, of which $ 53.3 million was accrued and unpaid at September 30, 2023.

During the year ended September 30, 2022, the Company incurred restructuring expenses of $ 107.5 million, of which $ 69.1 million was related to the exit of our Russia-related businesses.

The remaining $ 38.4 million related to actions to improve margins and deliver efficiencies.

These expenses included personnel and other costs of $ 27.5 million and real estate costs of $ 10.9 million, of which $ 7.9 million was accrued and unpaid at September 30, 2022.

For the year ended September 30, 2024, the Company incurred restructuring expenses of $ 98.9 million, which included labor - related costs of $ 18.7 million and non - labor costs of $ 80.2 million, of which $ 11.9 million was accrued and unpaid at September 30, 2024.

For the year ended September 30, 2023, the Company incurred restructuring expenses of $ 188.4 million, which included personnel and other costs of $ 91.6 million and real estate costs of $ 96.8 million,of which $ 53.3 million was accrued and unpaid at September 30, 2023.

On September 12, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.22 per share, which was paid on October 18, 2024 to stockholders of record as of the close of business on October 2, 2024.

9 unchanged sentences

Balances at September 30, 2022

Other comprehensive income (loss) before reclassification

Other comprehensive (loss) income before reclassification

Amounts reclassified from accumulated other comprehensive loss

28 unchanged sentences

At September 30, 2024, the Company has capital commitments of $ 5.9 million to the Fund over the next 4 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.

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, limited debt repayment, environmental indemnity obligations and other lender required guarantees.

In February 2024, the Company was informed of a potential liability as one of the indemnitors on a divested business’ surety bonds.

The Company does not have sufficient information to determine the range of potential impacts, however, it is reasonably possible that the Company may incur additional costs related to these bonds.

In connection with the resolution of contingencies related to the sale of the civil infrastructure construction business, the Company agreed to act as an additional guarantor on the counterparty’s existing debt, which matured on September 30, 2024.

Department of Energy Deactivation, Demolition, and Removal Project

15 unchanged sentences

Refinery Turnaround Project

A Former Affiliate of the Company entered into an agreement to perform turnaround maintenance services during a planned shutdown at a refinery in Montana in December 2017.

The Former Affiliate of the Company entered into an agreement to perform turnaround maintenance services during a planned shutdown at a refinery in Montana in December 2017.

The turnaround project was completed in February 2019.

2 unchanged sentences

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.

In August 2019, following a subcontractor complaint filed in the Thirteen Judicial District Court of Montana

asserting claims against the refinery owner and the Company’s Former Affiliate, the refinery owner crossclaimed against the Company’s Former Affiliate and the subcontractor.

In August 2019, following a subcontractor complaint filed in the Thirteen Judicial District Court of Montana asserting claims against the refinery owner and the Company’s Former Affiliate, the refinery owner crossclaimed against the Company’s Former Affiliate and the subcontractor.

In October 2019, following the subcontractor’s dismissal of its claims, the Company’s Former Affiliate removed the matter to federal court and cross claimed against the refinery owner.

6 unchanged sentences

Reportable Segments and Geographic Information

The Company’s reportable segments are presented according to their geographic regions and business activities.

The Americas segment provides planning, consulting, architectural and engineering design services, and construction management services to public and private clients in the United States, Canada, and Latin America, while the International segment provides similar professional services to public and private clients in Europe, the Middle East, India, Africa, and the Asia-Australia-Pacific regions.

The Company’s AECOM Capital (ACAP) segment primarily invests in and develops real estate projects.

These reportable segments are organized by the differing specialized needs of the respective clients, and how the Company manages its business.

The Company has aggregated various operating segments into its 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.

The Company manages its operations under three reportable segments according to their geographic regions and business activities.

In identifying its reportable segments, the Company considered the financial information provided to its chief operating decision maker (CODM), who is the chief executive officer.

The financial data is organized by geographic region and global business lines.

The CODM uses this information to allocate resources and assess the performance of the segments primarily based on revenue less pass - through revenue and attributable earnings before interest, tax, and amortization expense.

After considering various factors, including the development and utilization of financial data to the CODM, the Company concluded that identifying its operating segments by geography was consistent with the objectives of ASC 280-10.

Certain operating segments have been aggregated based on similar characteristics, including long-term financial performance, the nature of services provided, internal process for delivering those services, and types of customers, to arrive at the Company’s reportable segments.

The Company’s Americas reportable segment provides planning, consulting, architectural and engineering design services, and construction management services to public and private clients in the United States, Canada, and Latin America and is comprised of the Design and Consulting Services Americas and Construction Management operating segments.

The Company’s International reportable segment provides similar professional services to public and private clients in Europe and India, the Middle East and Africa, Asia, and Australia and New Zealand and is comprised of the operating segments in those geographic regions.

The Company’s AECOM Capital (ACAP) operating segment is its own reportable segment and primarily invests in and develops real estate projects.

Certain expenses that are determined to be related to the Company as a whole are not deemed to be part of an operating segment but are reported within Corporate.

The following tables set forth summarized financial information concerning the Company’s reportable segments:

50 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data