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Item 2. Management’s Discussion and Analysis

2025-02-04 compared with 2024-08-06 · 170 added, 191 removed, 240 unchanged (60% of the section changed)

18 unchanged sentences

Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including, but not limited to, our business is cyclical and vulnerable to economic downturns and client spending reductions;

government shutdowns;

long-term government contracts and subject to uncertainties related to government contract appropriations;

governmental agencies may modify, curtail or terminate our contracts;

potential government shutdowns;

changes in administration or other funding directives and circumstances may cause governmental agencies to modify, curtail or terminate our contracts;

government contracts are subject to audits and adjustments of contractual terms;

long-term government contracts and subject to uncertainties related to government contract appropriations;

losses under fixed-price contracts;

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liability for misconduct by our employees or consultants;

failure to comply with laws or regulations applicable to our business;

changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business;

maintaining adequate surety and financial capacity;

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ability to continue payment of dividends;

exposure to political and economic risks in different countries, including tariffs, geopolitical events, and conflicts;

currency exchange rate and interest fluctuations;

exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events, and conflicts;

inflation, currency exchange rates and interest rate fluctuations;

changes in capital markets and stock market volatility;

retaining and recruiting key technical and management personnel;

legal claims;

legal claims and litigation;

inadequate insurance coverage;

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cybersecurity issues, IT outages and data privacy;

risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect;

risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect;

as well as other additional risks and factors discussed in this Quarterly Report on Form 10-Q and any subsequent reports we file with the SEC.

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Please review “Part II, Item 1A—Risk Factors” in this Quarterly Report for a discussion of the factors, risks and uncertainties that could affect our future results.

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

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We report our continuing business through three segments, each of which is described in further detail below:

Americas, International, and AECOM Capital.

Americas, International, and AECOM Capital (ACAP).

Such segments are organized by the differing specialized needs of the respective clients and how we manage the business.

We have aggregated operating segments into our Americas and International 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.

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, 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.

● AECOM Capital :

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) :

Primarily invests in and develops real estate projects.

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Our costs consist primarily of the compensation we pay to our employees, including salaries, fringe benefits, the costs of hiring subcontractors, other project-related expenses and sales, general and administrative costs.

In November 2023, the Board approved an increase in our stock repurchase authorization to $1.0 billion.

At June 30, 2024, we have approximately $878.6 million remaining of the Board’s repurchase authorization.

We intend to deploy future available cash towards dividends and stock repurchases consistent with our return driven capital allocation policy.

We have exited substantially all of our self-perform at-risk construction businesses.

At December 31, 2024, we had approximately $974.8 million remaining of the Board’s stock repurchase authorization.

On November 13, 2024, the Board approved an increase in our stock repurchase authorization to $1.0 billion.

We intend to deploy future available cash towards dividends and stock repurchases consistent with our returns driven capital allocation policy.

We have exited substantially all of our former self-perform at-risk construction businesses.

As part of our ongoing plan to improve profitability and maintain a reduced risk profile, we continuously evaluate our geographic exposure.

Consistent with our focus on our professional services business, we completed a transaction that transitioned the AECOM Capital team to a new platform in the third quarter of fiscal year 2024.

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

We expect to incur restructuring costs of approximately $80 million to $100 million in fiscal 2024, primarily related to ongoing actions that are expected to deliver continued efficiencies and margin improvement.

Our estimated restructuring costs include the ongoing optimization of our office real estate portfolio and exit of certain countries in Southeast Asia, subject to applicable laws, as part of our ongoing plan to evaluate our geographic exposure and reduce our risk profile.

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.

Results of Operations

Three and nine months ended June 30, 2024 compared to the three and nine months ended June 30, 2023

Three months ended December 31, 2024 compared to the three months ended December 31, 2023

Consolidated Results

Three Months Ended

Nine Months Ended

2024 December 31,

($ in millions)

Revenue $ 4,014.2 $ 3,899.9 $ 114.3 2.9 %

Cost of revenue 3,745.8 3,655.9 89.9 2.5

Gross profit 268.4 244.0 24.4 10.0

Equity in earnings (losses) of joint ventures 9.6 (29.0) 38.6 (133.1)

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Restructuring costs — (16.2) 16.2 (100.0)

Income (loss) from operations

Income from operations 237.5 163.1 74.4 45.6

Other income 6.9 2.6 4.3 165.4

Interest income 16.6 12.1 4.5 37.2

Interest expense (43.0) (41.3) (1.7) 4.1

Income (loss) from continuing operations before taxes

Income tax expense (benefit) for continuing operations

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

Income from continuing operations before taxes 218.0 136.5 81.5 59.7

Income tax expense for continuing operations 29.3 26.6 2.7 10.2

Net income from continuing operations 188.7 109.9 78.8 71.7

Net loss from discontinued operations (9.6) (1.3) (8.3) 638.5

Net income 179.1 108.6 70.5 64.9

Net income attributable to noncontrolling interests from continuing operations (11.3) (13.1) 1.8 (13.7)

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Net income attributable to noncontrolling interests (12.1) (14.2) 2.1 (14.8)

Net income (loss) attributable to AECOM from continuing operations

Net income (loss) attributable to AECOM from discontinued operations

Net income (loss) attributable to AECOM

Net income attributable to AECOM from continuing operations 177.4 96.8 80.6 83.3

Net loss attributable to AECOM from discontinued operations (10.4) (2.4) (8.0) 333.3

Net income attributable to AECOM $ 167.0 $ 94.4 $ 72.6 76.9 %

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended

Nine Months Ended

2024 December 31,

Revenue 100.0 % 100.0 %

Cost of revenue 93.3 93.7

Gross profit 6.7 6.3

Equity in earnings (losses) of joint ventures 0.2 (0.7)

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Restructuring costs 0.0 (0.4)

Income (loss) from operations

Income from operations 5.9 4.2

Other income 0.2 0.1

Interest income 0.4 0.3

Interest expense (1.1) (1.1)

Income (loss) from continuing operations before taxes

Income tax expense (benefit) for continuing operations

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

Income from continuing operations before taxes 5.4 3.5

Income tax expense for continuing operations

Net income from continuing operations 4.7 2.8

Net loss from discontinued operations (0.2) 0.0

Net income 4.5 2.8

Net income attributable to noncontrolling interests from continuing operations (0.3) (0.3)

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Net income attributable to noncontrolling interests (0.3) (0.4)

Net income (loss) attributable to AECOM from continuing operations

Net income (loss) attributable to AECOM from discontinued operations

Net income (loss) attributable to AECOM

Our revenue for the three months ended June 30, 2024 increased $487.6 million, or 13.3%, to $4,151.2 million as compared to $3,663.6 million for the corresponding period last year.

Our revenue for the nine months ended June 30, 2024 increased $1,458.9 million, or 13.8%, to $11,995.0 million as compared to $10,536.1 million for the corresponding period last year.

Revenue increased across most of our end markets as a result of increased investment in infrastructure, sustainability and resilience, and energy transition driven by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S.

Net income attributable to AECOM from continuing operations 4.4 2.5

Net loss attributable to AECOM from discontinued operations (0.2) (0.1)

Net income attributable to AECOM 4.2 % 2.4 %

Our revenue for the three months ended December 31, 2024 increased $114.3 million, or 2.9%, to $4,014.2 million as compared to $3,899.9 million for the corresponding period last year.

Revenue increased across most of our end markets as a result of increased investment by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S.

and similar large programs in our largest end markets globally.

Our Water end market has been benefiting from increased investment to address drought, flooding, and drinking water scarcity.

Our Transportation end market has been benefitting from incremental surface and transit investments across the globe, while our Environment end market has been benefiting from infrastructure that requires permitting and compliance, as well as investments in new energy.

Our Facilities end market has been benefiting from positive trends in decarbonization and green design.

Our Water end market has been benefiting from increased investment to address drought, flooding, emerging contaminant remediation, water storage,and clean and safe drinking water.

Our Transportation end market has been benefiting from incremental investments across the globe to modernize transportation infrastructure and address growth and urbanization trends, while our Environment end market has been benefiting from infrastructure that requires permitting, compliance, and remediation as well as investments in energy.

Our Facilities end market has been benefiting from positive trends in asset maintenance repositioning and demand for modern, efficient facilities.

The quantification of the impact of these trends by end market is noted within our Americas and International reportable segments discussion below, where applicable, and represents substantially all of our revenue change.

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Because these pass-through revenues can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends.

Pass-through revenues for the quarters ended June 30, 2024 and 2023 were $2.3 billion and $2.0 billion, respectively.

Pass-through revenues for the nine months ended June 30, 2024 and 2023 were $6.6 billion and $5.6 billion, respectively.

Pass-through revenue as a percentage of revenue was 56% and 54% during the three months ended June 30, 2024 and 2023, respectively.

Pass-through revenue as a percentage of revenue was 55% and 53% during the nine months ended June 30, 2024 and 2023, respectively.

Pass-through revenues for the quarters ended December 31, 2024 and 2023 were $2.2 billion for both periods.

Pass-through revenue as a percentage of total revenue was 55% and 56% during the three months ended December 31, 2024 and 2023, respectively.

Cost of Revenue

Our cost of revenue increased to $3,866.1 million for the three months ended June 30, 2024 compared to $3,413.5 million for the corresponding period last year, an increase of $452.6 million, or 13.3%.

Our cost of revenue increased to $11,204.8 million for the nine months ended June 30, 2024 compared to $9,842.9 million in for the corresponding period last year, an increase of $1,361.9 million, or 13.8%.

Substantially all of the change in our cost of revenue for the three and nine months ended June 30, 2024 occurred in our Americas and International reportable segments, which is discussed in more detail below.

Our gross profit for the three months ended June 30, 2024 increased $35.0 million, or 14.0%, to $285.1 million as compared to $250.1 million for the corresponding period last year.

For the three months ended June 30, 2024, gross profit, as a percentage of revenue, increased to 6.9% from 6.8% in the corresponding period last year.

Our gross profit for the nine months ended June 30, 2024 increased $97.0 million, or 14.0%, to $790.2 million as compared to $693.2 million for the corresponding period last year.

For the nine months ended June 30, 2024 and 2023, gross profit, as a percentage of revenue, remained unchanged at 6.6%.

Our cost of revenue increased to $3,745.8 million for the three months ended December 31, 2024 compared to $3,655.9 million for the corresponding period last year, an increase of $89.9 million, or 2.5%.

Substantially all of the change in our cost of revenue for the three months ended December 31, 2024 occurred in our Americas and International reportable segments, which is discussed in more detail below.

Our gross profit for the three months ended December 31 , 2024 increased $24.4 million, or 10.0%, to $268.4 million as compared to $244.0 million for the corresponding period last year.

For the three months ended December 31, 2024, gross profit, as a percentage of revenue, increased to 6.7% from 6.3% in the corresponding period last year.

Gross profit changes were due to the reasons noted in our Americas and International reportable segments below.

Equity in Earnings of Joint Ventures

Our equity in earnings of joint ventures for the three months ended June 30, 2024 was $7.7 million as compared to equity in losses of $303.5 million in the corresponding period last year.

The increase in equity earnings was primarily due to impairment losses recorded in our AECOM Capital segment during the third quarter of fiscal 2023 that did not repeat in 2024.

Our equity in losses of joint ventures for the nine months ended June 30, 2024 was $1.8 million as compared to $286.2 million in the corresponding period last year.

The decrease in equity losses of joint ventures was primarily due to impairment losses recorded by our AECOM Capital segment in fiscal year 2023 that did not repeat to the same extent in fiscal year 2024.

Our equity in earnings of joint ventures for the three months ended December 31, 2024 was $9.6 million as compared to equity in losses of $29.0 million in the corresponding period last year.

The increase in equity in earnings of joint ventures for the three months ended December 31, 2024 compared to the same period in the prior year was primarily due to impairment losses of $35.9 million recorded by our AECOM Capital segment in fiscal 2024 that did not repeat in fiscal 2025.

General and Administrative Expenses

Our general and administrative expenses for the three months ended June 30, 2024 decreased $6.7 million, or 15.6%, to $36.2 million as compared to $42.9 million for the corresponding period last year.

For the three months ended June 30, 2024, general and administrative expenses, as a percentage of revenue, was 0.9% as compared to 1.2% in the corresponding period last year.

Our general and administrative expenses for the nine months ended June 30, 2024 increased $3.9 million, or 3.5%, to $116.6 million as compared to $112.7 million for the corresponding period last year.

For the nine months ended June 30, 2024, general and administrative expenses, as a percentage of revenue, was 1.0% as compared to 1.1% from the corresponding period last year.

The decrease in general and administrative expenses for the three months ended June 30, 2024 compared to the comparable period in the prior year was primarily due to lower expenses in the AECOM Capital reportable segment.

Our general and administrative expenses for the three months ended December 31, 2024 increased $4.8 million, or 13.4%, to $40.5 million as compared to $35.7 million for the corresponding period last year.

For the three months ended December 31, 2024, general and administrative expenses, as a percentage of revenue, was 1.0% which was consistent with the corresponding period last year.

The increase in general and administrative expenses was primarily due to increased costs related to investments to drive organic growth.

Restructuring Costs

Restructuring expenses are comprised of personnel costs, real estate costs, and costs associated with business exits.

During the three and nine months ended June 30, 2024, we incurred total restructuring expenses of $29.1 million and $80.7 million, respectively, primarily related to costs incurred to align our real estate portfolio with our employee flexibility initiatives, continue our exit of certain countries in Southeast Asia, drive support function efficiency, and reduce our risk profile.

During the three and nine months ended June 30, 2023, we incurred total restructuring expenses of $9.1 million and $50.5 million, respectively, primarily related to costs incurred in preparation for the exit of specific countries in Southeast Asia.

Our other income for the three months ended June 30, 2024 decreased to $1.0 million from $1.7 million for the corresponding period last year.

Our other income for the nine months ended June 30, 2024 decreased to $6.2 million from $6.3 million for the corresponding period last year.

Restructuring costs are comprised of personnel costs, real estate costs, and costs associated with business exits.

No new transformative restructuring actions were initiated during the three months ended December 31, 2024.

During the three months ended December 31, 2023, we incurred restructuring costs of $16.2 million, primarily related to costs incurred to continue to align our real estate portfolio with our employee flexibility initiatives, and continue our exit of certain countries in Southeast Asia.

Our other income for the three months ended December 31, 2024 increased to $6.9 million from $2.6 million for the corresponding period last year.

The increase in other income for the three months ended December 31, 2024 was primarily due to the increase in fair value of our investments measured at fair value.

Interest Income

Our interest income for the three months ended June 30, 2024 increased to $15.8 million from $8.8 million for the corresponding period last year.

Our interest income for the nine months ended June 30, 2024 increased to $43.3 million from $24.4 million for the corresponding period last year.

The increases in interest income for the three and nine months ended June 30, 2024 were primarily due to an increase in interest rates on our interest-bearing assets.

Our interest income for the three months ended December 31, 2024 increased to $16.6 million from $12.1 million for the corresponding period last year.

The increase in interest income for the three months ended December 31, 2024 was primarily due to an increase in our interest-bearing assets.

Interest Expense

Our interest expense for the three months ended June 30, 2024 was $51.4 million as compared to $38.8 million for the corresponding period last year.

Our interest expense for the nine months ended June 30, 2024 was $140.4 million as compared to $117.9 million for the corresponding period last year.

The increases in interest expense for the three and nine months ended June 30, 2024 were primarily due to an increase in interest rates on the variable component of our debt as well as $5.8 million in financing charges recorded in the three months ended June 30, 2024 related to the New Credit Facilities, defined below.

Our interest expense for the three months ended December 31, 2024 was $43.0 million as compared to $41.3 million for the corresponding period last year.

The increase in interest expense for the three months ended December 31, 2024 was primarily due to an increase in our debt as compared to the prior year.

Income Tax Expense

Our income tax expense for the three months ended June 30, 2024 was $46.1 million as compared to a tax benefit of $20.0 million in the corresponding period last year.

Our income tax expense for the nine months ended June 30, 2024 was $118.1 million as compared to $46.9 million in the corresponding period last year.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to a tax benefit recorded in the third quarter of fiscal 2023 of $65.0 million related to the AECOM Capital impairment charge, an increase in tax benefit of $10.4 million related to income tax credits and incentives, an increase in tax expense of $7.5 million related to foreign residual income, a tax benefit of $6.9 million related to an audit settlement, and an increase in tax expense of $3.6 million related to foreign tax rate differential.

During the three months ended December 31, 2023, 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.

Net Income (Loss) From Discontinued Operations

Our income tax expense for the three months ended December 31, 2024 was $29.3 million as compared to

$26.6 million in the corresponding period last year.

The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $81.5 million, partially offset by a tax benefit of $20.1 million related to deferred tax assets recognized due to legal entity restructuring implemented in the first quarter of fiscal 2025, and a tax benefit of $6.9 million related to an audit settlement in the first quarter of fiscal 2024 that did not repeat if fiscal 2025.

During the first quarter of fiscal 2025, we recognized deferred tax assets of $20.1 million related to legal entity restructuring.

The restructuring resulted in the recognition of deferred tax assets related to tax attributes that are expected to be utilized against future taxable income.

During the first quarter of fiscal 2024, we settled our 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.

Net Loss From Discontinued Operations

During the first quarter of fiscal 2020, management approved a plan to dispose of via sale our self-perform at-risk construction businesses.

As a result of these strategic actions, the self-perform at-risk construction businesses were classified as discontinued operations.

Net income from discontinued operations was $5.7 million for the three months ended June 30, 2024 compared to a net loss of $7.6 million for the three months ended June 30, 2023, an increase of $13.3 million.

The increase in net income from discontinued operations was primarily due to the settlement of contingent consideration related to the sale of our civil infrastructure construction business, which results in a $12.7 million gain.

Net loss from discontinued operations was $105.0 million for the nine months ended June 30, 2024 and was $49.8 million for the nine months ended June 30, 2023, an increase of $55.2 million.

The increase in net loss from discontinued operations was primarily due to revisions of estimated contingent consideration related to the sale of our civil infrastructure construction business.

Net Income (Loss) Attributable to AECOM

The factors described above resulted in net income attributable to AECOM of $134.3 million and $229.7 million for the three and nine months ended June 30, 2024 as compared to net (loss) income attributable to AECOM of $(134.7) million and $29.9 million for the three and nine months ended June 30, 2023.

Net loss from discontinued operations was $9.6 million for the three months ended December 31, 2024 and was $1.3 million for the three months ended December 31, 2023, an increase of $8.3 million.

The increase was primarily due to a change in our expected recovery on a project completed prior to the sale of our at-risk power construction business.

Net Income Attributable to AECOM

The factors described above resulted in net income attributable to AECOM of $167.0 million for the three months ended December 31, 2024 as compared to net income attributable to AECOM of $94.4 million for the three months ended December 31, 2023.

Results of Operations by Reportable Segment

Three Months Ended

Nine Months Ended

2024 December 31,

($ in millions)

Revenue $ 3,112.0 $ 3,038.7 $ 73.3 2.4 %

Cost of revenue 2,921.8 2,867.7 54.1 1.9

Gross profit $ 190.2 $ 171.0 $ 19.2 11.2 %

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended

Nine Months Ended

2024 December 31,

Revenue 100.0 % 100.0 %

Cost of revenue 93.9 94.4

Revenue for our Americas segment for the three months ended June 30, 2024 increased $417.4 million, or 14.8%, to $3,246.9 million as compared to $2,829.5 million for the corresponding period last year.

The increase in revenue for the three months ended June 30, 2024 was driven by organic growth and an increase in pass-through revenues of $336.1 million due to a higher proportion of contracts requiring us to subcontract work on behalf of our clients and revenue from growth in the Americas, including growth in our Transportation end market of $64.1 million, or 12.6%, and growth in our Water and Environment end markets of $33.4 million, or 6.7%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Revenue for our Americas segment for the nine months ended June 30, 2024 increased $1,285.2 million, or 16.0%, to $9,324.2 million as compared to $8,039.0 million for the corresponding period last year.

The increase in revenue for the nine months ended June 30, 2024 was driven by organic growth and an increase in pass-through revenues of $1,052.4 million due to a higher proportion of contracts requiring us to subcontract work on behalf of our clients and revenue from increased project activity in the Americas, including growth in our Water and Environment end markets of $154.9 million, or 10.9%, and growth in our Transportation end market of $189.0 million, or 12.9%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Gross profit 6.1 % 5.6 %

Revenue for our Americas segment for the three months ended December 31, 2024 increased $73.3 million, or 2.4%, to $3,112.0 million as compared to $3,038.7 million for the corresponding period last year.

The increase in revenue for the three months ended December 31, 2024 was primarily driven by organic growth.

Pass-through revenues on contracts for which we subcontract work on behalf of our clients was flat compared to the corresponding period last year.

Revenue from increased project activity in the Americas included growth in our Transportation end market of $58.7 million, or 11.3%, Water and Environment end markets of $35.7 million, or 7.1%, and Energy end market of $19.6 million, or 58.5%, partially offset by a decrease in our Facilities end market of $39.8 million, or 2.0%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Cost of Revenue

Cost of revenue for the three months ended June 30, 2024 increased by $396.4 million, or 15.0%, to $3,043.0 million compared to $2,646.6 million for the corresponding period last year.

Cost of revenue for the nine months ended June 30, 2024 increased by $1,245.0 million, or 16.6%, to $8,764.9 million compared to $7,519.9 million for the corresponding period last year.

The increases in cost of revenue for the three and nine months ended June 30, 2024 were consistent with the increases in revenue.

The increases in cost of revenue for the three and nine months ended June 30, 2024 were due to an increase in subcontractor and other direct costs of $336.1 million and $1,052.4 million, respectively, due to a higher proportion of contracts requiring us to subcontract work on behalf of our clients, with the balance of the increases due to higher labor costs compared to the same periods in the prior year.

Gross profit for our Americas segment for the three months ended June 30, 2024 increased $21.0 million, or 11.5%, to $203.9 million as compared to $182.9 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 6.3% of revenue for the three months ended June 30, 2024 from 6.5% in the corresponding period last year.

Gross profit for our Americas segment for the nine months ended June 30, 2024 increased $40.2 million, or 7.7%, to $559.3 million as compared to $519.1 million for the corresponding period last year.

As a percentage of revenue, gross profit decreased to 6.0% of revenue for the nine months ended June 30, 2024 from 6.5% in the corresponding period last year.

The increases in gross profit for the three and nine months ended June 30, 2024 were primarily due to revenue growth and execution efficiencies realized from restructuring actions.

Cost of revenue for our Americas segment for the three months ended December 31, 2024 increased by $54.1 million, or 1.9%, to $2,921.8 million compared to $2,867.7 million for the corresponding period last year.

The increase in cost of revenue for the three months ended December 31, 2024 was consistent with the increases in revenue.

The increase in cost of revenue for the three months ended December 31, 2024 was due to higher labor volume compared to the same period in the prior year.

Gross profit for our Americas segment for the three months ended December 31, 2024 increased $19.2 million, or 11.2%, to $190.2 million as compared to $171.0 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 6.1% of revenue for the three months ended December 31, 2024 from 5.6% in the corresponding period last year.

The increase in gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2024 was primarily due to revenue growth and delivery efficiencies realized from cost reductions.

In addition, underlying revenue, excluding pass-through revenues, increased as noted above.

The decrease in gross profit as a percentage of revenue was due to an increase in pass-through revenues for the three and nine months ended June 30, 2024 as compared to last year.

International

Three Months Ended

Nine Months Ended

2024 December 31,

($ in millions)

Revenue $ 902.0 $ 861.0 $ 41.0 4.8%

Cost of revenue 824.0 788.2 35.8 4.5

Gross profit $ 78.0 $ 72.8 $ 5.2 7.1%

The following table presents the percentage relationship of statement of operations items to revenue:

Three Months Ended

Nine Months Ended

2024 December 31,

Revenue 100.0 % 100.0 %

Cost of revenue 91.4 91.5

Revenue for our International segment for the three months ended June 30, 2024 increased $69.9 million, or 8.4%, to $904.2 million as compared to $834.3 million for the corresponding period last year.

The increase in revenue for the three months ended June 30, 2024 was primarily due to growth in the Middle East of $30.9 million and Europe of $24.9 million compared to the corresponding period last year.

Growth was led by our Facilities, Water and Environment, and Transportation end markets, which increased $27.9 million, or 8.6%, $21.2 million, or 12.1%, and $15.9 million, or 5.1%, respectively, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Revenue for our International segment for the nine months ended June 30, 2024 increased $173.1 million, or 6.9%, to $2,670.0 million as compared to $2,496.9 million for the corresponding period last year.

The increase in revenue for the nine months ended June 30, 2024 was primarily due to increased growth in Europe of $86.7 million and the Middle East of $74.0 million compared to the corresponding period last year.

Growth was led by our Facilities, Water and Environment, and Transportation end markets, which increased $87.2 million, or 9.0%, $41.7 million, or 8.0%, and $33.9 million, or 3.7%, respectively, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Gross profit 8.6 % 8.5 %

Revenue for our International segment for the three months ended December 31, 2024 increased $41.0 million, or 4.8%, to $902.0 million as compared to $861.0 million for the corresponding period last year.

The increase in revenue for the three months ended December 31, 2024 was primarily due to growth in the Middle East of $34.7 million and the U.K.

of $4.1 million, partially offset by a decrease in Australia of $7.9 million, compared to the corresponding period last year.

Growth was led by our Facilities end market, which increased $51.4 million, or 15.6%, partially offset by a decrease in our Transportation end market of $13.3 million, or 4.2%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.

Cost of Revenue

Cost of revenue for the three months ended June 30, 2024 increased $56.2 million, or 7.3%, to $823.1 million as compared to $766.9 million for the corresponding period last year.

The increase in cost of revenue for the three months ended June 30, 2024 was due to increases in subcontractor and other direct costs of $29.7 million and labor expenses of $26.6 million.

Cost of revenue for the nine months ended June 30, 2024 increased $116.9 million, or 5.0%, to $2,439.9 million as compared to $2,323.0 million for the corresponding period last year.

The increase in cost of revenue for the nine months ended June 30, 2024 was due to an increase in labor expenses of $87.9 million.

Cost of revenue for the three and nine months ended June 30, 2024 decreased as a percentage of revenue compared to the same periods in the prior year.

Gross profit for our International segment for the three months ended June 30, 2024 increased $13.7 million, or 20.3%, to $81.1 million as compared to $67.4 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 9.0% of revenue for the three months ended June 30, 2024 from 8.1% in the corresponding period last year.

Gross profit for our International segment for the nine months ended June 30, 2024 increased $56.2 million, or 32.3%, to $230.1 million as compared to $173.9 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 8.6% of revenue for the nine months ended June 30, 2024 from 7.0% in the corresponding period last year.

The increases in gross profit and gross profit as a percentage of revenue for the three and nine months ended June 30, 2024 were primarily due to an increase in revenue and reduced costs resulting from ongoing exiting of lower margin countries, ongoing investments in enterprise capability centers, shared service centers, and delivery efficiencies.

Cost of revenue our International segment for the three months ended December 31, 2024 increased $35.8 million, or 4.5%, to $824.0 million as compared to $788.2 million for the corresponding period last year.

The increase in cost of revenue for the three months ended December 31, 2024 was consistent with the increase in revenue and was due to increases in subcontractor and other direct costs of $20.7 million and labor expenses of $15.1 million.

Gross profit for our International segment for the three months ended December 31, 2024 increased $5.2 million, or 7.1%, to $78.0 million as compared to $72.8 million for the corresponding period last year.

As a percentage of revenue, gross profit increased to 8.6% of revenue for the three months ended December 31, 2024 from 8.5% in the corresponding period last year.

The increase in gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2024 were primarily due to an increase in revenue and reduced costs resulting from ongoing exiting of lower margin countries, ongoing investments to expand enterprise capability centers, shared service centers, and delivery efficiencies.

AECOM Capital

Three Months Ended

Nine Months Ended

2024 December 31,

($ in millions)

Revenue $ 0.2 $ 0.2 $ — — %

Equity in earnings (losses) of joint ventures $ 1.2 $ (36.9) $ 38.1 (103.3) %

General and administrative expenses $ (2.4) $ (2.4) $ — — %

Equity in earnings of joint ventures for the three months ended June 30, 2024 increased $307.9 million, or 100.2%, to $0.7 million compared to a loss of $307.2 million for the corresponding period last year.

The increase in equity in earnings of joint ventures was primarily due to an impairment loss recorded in fiscal year 2023 that did not repeat.

Equity in losses of joint ventures for the nine months ended June 30, 2024 decreased $277.9 million, or 91.3%, to a loss of $26.5 million compared to a loss of $304.4 million for the corresponding period last year.

The change in equity in earnings of joint ventures for the nine months ended June 30, 2024 was primarily due to impairment losses recognized in the fiscal 2023 that did not repeat to the same extent in fiscal 2024.

The decrease of $3.4 million in general and administrative expenses for the three months ended June 30, 2024 compared to the corresponding period last year was due to lower continuing expenses related to the transition of the AECOM Capital team.

The increase of $3.1 million in general and administrative expenses for the nine months ended June 30, 2024 compared to the corresponding period last year was due to nonrecurring expenses related to the transition and realization of strategic options around the AECOM Capital business.

Equity in earnings of joint ventures for the three months ended December 31, 2024 increased $38.1 million, or 103.3%, to $1.2 million compared to a loss of $36.9 million for the corresponding period last year.

The change in equity in earnings of joint ventures for the three months ended December 31, 2024 was primarily due to impairment losses of $35.9 million recognized in the fiscal 2024 that did not repeat in fiscal 2025.

We experience seasonal trends in our business.

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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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We believe our anticipated sources of liquidity including operating cash flows, existing cash and cash equivalents, borrowing capacity under our revolving credit facility and our ability to issue debt or equity, if required, will be sufficient to meet our projected cash requirements for at least the next twelve months.

We expect to spend approximately $110 million in restructuring costs in fiscal 2024 associated with ongoing restructuring actions that are expected to deliver continued margin improvement and efficiencies.

We expect to spend approximately $45 million for restructuring costs in fiscal 2025 associated with restructuring actions taken in prior periods that are expected to deliver continued margin improvement and efficiencies.

Generally, we do not provide for U.S.

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subsidiaries because such basis differences are able to and intended to be reinvested indefinitely.

At June 30, 2024, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting under ASC 740 and not accrue additional tax.

At December 31, 2024, we have determined that we will continue to indefinitely reinvest the earnings of some foreign subsidiaries and, therefore, we will continue to account for these undistributed earnings based on our existing accounting under ASC 740 and not accrue additional tax.

Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

Based on the available sources of cash flows discussed above, we anticipate we will continue to have the ability to permanently reinvest these remaining amounts.

At June 30, 2024, cash and cash equivalents, including cash and cash equivalents included in current assets held for sale, were $1,648.2 million, an increase of $386.0 million, or 30.6%, from $1,262.2 million at September 30, 2023.

The increase in cash and cash equivalents was primarily attributable to $320.1 million in net cash proceeds pursuant to Amendment No.

14 of the Credit Agreement.

Net cash provided by operating activities was $528.7 million for the nine months ended June 30, 2024 as compared to $410.8 million for the nine months ended June 30, 2023.

The change was primarily attributable to an increase in cash provided by working capital of approximately $146.7 million and an increase in net income of approximately $217.2 million, offset by a decrease in adjustments for non-cash items of approximately $246.0 million.

The sale of trade receivables to financial institutions included in operating cash flows increased $39.0 million during the nine months ended June 30, 2024 compared to the nine months ended June 30, 2023.

At December 31, 2024, cash and cash equivalents, including cash and cash equivalents included in current assets held for sale, were $1,584.7 million, a decrease of $0.2 million from $1,584.9 million at September 30, 2024.

Net cash provided by operating activities was $151.1 million for the three months ended December 31, 2024 as compared to $143.1 million for the three months ended December 31, 2023.

The change was primarily attributable to an increase in net income of approximately $70.6 million and cash provided by changes in working capital of $30.5 million, partially offset by a decrease in adjustments for non-cash items of approximately $93.1 million.

The sale of trade receivables to financial institutions included in operating cash flows increased $66.2 million during the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable to us.

Net cash used in investing activities was $185.9 million for the nine months ended June 30, 2024, as compared to $106.5 million for the nine months ended June 30, 2023.

The change was primarily attributable to an increase in cash payments for capital expenditures of approximately $12.0 million, cash paid for a business acquisition, net of cash acquired of $18.7 million, and $27.1 million cash funded pursuant to the revolving credit facility with the counterparty to our sale of the civil infrastructure construction business.

Net cash provided by financing activities was $44.4 million for the nine months ended June 30, 2024 as compared to $204.0 million net cash used by financing activities for the nine months ended June 30, 2023.

The change from prior year was primarily attributable to a $15.8 million increase in stock repurchases under our stock repurchase program, a $14.1 million increase in dividends paid, offset by $320.1 million in net cash proceeds pursuant to Amendment No.

14 of the Credit Agreement.

Net cash used in investing activities was $24.7 million for the three months ended December 31, 2024, as compared to $86.8 million for the three months ended December 31, 2023.

The change was primarily attributable to cash repayments of $16.3 million on the revolving credit facility from the counterparty to our sale of our civil infrastructure construction business and a decrease in cash payments for capital expenditures of approximately $16.0 million.

Net cash used in financing activities was $121.3 million for the three months ended December 31, 2024 as compared to $126.3 million for the three months ended December 31, 2023.

The decrease from prior year was primarily attributable to a $33.2 million decrease in stock repurchases under our stock repurchase program partially offset by higher distributions to noncontrolling interests of $24.8 million.

Total borrowings under our Credit Agreement may vary during the period as we regularly draw and repay amounts to fund working capital.

Working Capital

Working capital, or current assets less current liabilities, increased $509.8 million, or 159.7%, to $829.0 million at June 30, 2024 from $319.2 million at September 30, 2023.

Net accounts receivable and contract assets, net of contract liabilities, increased to $3,283.3 million at June 30, 2024 from $2,880.8 million at September 30, 2023.

Days Sales Outstanding (DSO), which includes net accounts receivable and contract assets, net of contract liabilities, was 69 days at June 30, 2024 compared to 65 days at September 30, 2023.

Working capital, or current assets less current liabilities, increased $57.8 million, or 7.2%, to $859.8 million at December 31, 2024 from $802.0 million at September 30, 2024.

Net accounts receivable and contract assets, net of contract liabilities, decreased to $3,144.0 million at December 31, 2024 from $3,301.4 million at September 30, 2024.

Days Sales Outstanding (DSO), which includes net accounts receivable and contract assets, net of contract liabilities, was 69 days at December 31, 2024 compared to 70 days at September 30, 2024.

In Note 4, Revenue Recognition, in the notes to our consolidated financial statements, a comparative analysis of the various components of accounts receivable is provided.

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2027 Senior Notes 997.3 997.3

Other debt 104.9 95.9

Total debt 2,547.1 2,539.8

Current portion of debt and short-term borrowings (69.4) (66.9)

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Long-term debt $ 2,456.0 $ 2,450.3

The following table presents, in millions, scheduled maturities of our debt as of June 30, 2024:

2024 (three months remaining)

The following table presents, in millions, scheduled maturities of our debt as of December 31, 2024:

2025 (nine months remaining) $ 61.3

Thereafter 662.9

Total $ 2,547.1

Credit Agreement

On February 8, 2021, we entered into the 2021 Refinancing Amendment to Credit Agreement (as amended, modified or otherwise supplemented, the “Credit Agreement”), pursuant to which we amended and restated its Syndicated 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 “Original Revolving Credit Facility”) and a $246,968,737.50 term loan A facility (the “Original Term A Facility,”), each of which would have matured on February 8, 2026.

The proceeds of the Original Revolving Credit Facility and the Original 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.

On April 19, 2024, we entered into Amendment No.

10 to Credit Agreement, pursuant to which the lenders thereunder provided us a secured term B credit facility (the “Original Term B Facility,” and together with the Original Term A Facility and Original Revolving Credit Facility, the “Original Credit Facilities”) in an aggregate principal amount of $700,000,000.

The Original Term B Facility would have matured on April 13, 2028.

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

On June 25, 2021, we entered into Amendment No.

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

We used the net proceeds from the increase in the Original Term A Facility (together with cash on hand), to (i) redeem all of our remaining 5.875% Senior Notes due 2024 and (ii) pay fees and expenses related to such redemption.

On May 23, 2023, we entered into Amendment No.

12 to Credit Agreement, pursuant to which LIBOR as a benchmark rate of interest was replaced by, in the case of U.S.

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, we entered into Amendment No.

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

On April 19, 2024, we entered into Amendment No.

14 to Syndicated Facility Agreement, pursuant to which we 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”).

14 to Syndicated Facility Agreement (as amended, modified or otherwise supplemented, the "Credit Agreement"), pursuant to which we 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.

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dollars or in certain foreign currencies.

The New Credit Facilities replace in full the Original Revolving Credit Facility, the Original Term A Facility and the Original Term B Facility, and borrowings under the New Credit Facilities were used to refinance in full the Original Credit Facilities and for general corporate purposes.

The New Credit Facilities replace in full our existing 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 our existing credit facilities and for general corporate purposes.

The Credit Agreement permits us to designate certain of our subsidiaries as additional co-borrowers from time to time.

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

On October 29, 2024, we entered into Amendment No.

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

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

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The applicable margin is subject, in each case, to adjustment based on our consolidated leverage ratio from time to time.

Borrowings under the New Term B Facility bear interest at a rate per annum equal to, at our 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 1.875% in the case of the Term SOFR rate and 0.875% in the case of the base rate.

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 our 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 our material subsidiaries (the “Guarantors”) have guaranteed our 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 our assets and the Guarantors’ assets, subject to certain exceptions.

The Credit Agreement contains customary negative covenants that include, among other things, limitations on our ability and certain of our 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 our respective assets and transact with affiliates.

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

We are 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 June 30, 2024, we were in compliance with the covenants of the Credit Agreement.

As of December 31, 2024, we were in compliance with the covenants of the Credit Agreement.

The Credit Agreement contains customary affirmative covenants, including, among other things, compliance with applicable law, preservation of existence, maintenance of properties and of insurance, and keeping proper books and records.

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 June 30, 2024 and September 30, 2023, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

As of June 30, 2024 and September 30, 2023, we had $1,495.6 million and $1,145.6 million, respectively, available under our New Revolving Credit Facility and Original Revolving Credit Facility, respectively.

At December 31, 2024 and September 30, 2024, letters of credit totaled $4.4 million and $4.4 million, respectively, under our New Revolving Credit Facility.

As of December 31, 2024 and September 30, 2024, we had $1,495.6 million and $1,495.6 million, respectively, available under our New Revolving Credit Facility.

2027 Senior Notes

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On June 30, 2017, we completed an exchange offer to exchange the unregistered 2027 Senior Notes for registered notes, as well as related guarantees.

As of June 30, 2024, the estimated fair value of the 2027 Senior Notes was approximately $974.9 million.

The fair value of the 2027 Senior Notes as of June 30, 2024 was derived by taking the mid-point of the trading prices from an observable market input (Level 2) in the secondary bond market and multiplying it by the outstanding balance of the 2027 Senior Notes.

As of December 31, 2024, the estimated fair value of the 2027 Senior Notes was approximately $979.8 million.

The fair value of the 2027 Senior Notes as of December 31, 2024 was derived by taking the mid-point of the trading prices from an observable market input (Level 2) in the secondary bond market and multiplying it by the outstanding balance of the 2027 Senior Notes.

Interest is payable on the 2027 Senior Notes at a rate of 5.125% per annum.

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The indenture also contains customary negative covenants.

We were in compliance with the covenants relating to the 2027 Senior Notes as of June 30, 2024.

We were in compliance with the covenants relating to the 2027 Senior Notes as of December 31, 2024.

Other Debt and Other Items

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

At June 30, 2024 and September 30, 2023, these outstanding standby letters of credit totaled $909.4 million and $878.9 million, respectively.

As of June 30, 2024, we had $407.1 million available under these unsecured credit facilities.

At December 31, 2024 and September 30, 2024, these outstanding standby letters of credit totaled $930.2 million and $934.5 million, respectively.

As of December 31, 2024, we had $390.9 million available under these unsecured credit facilities.

Effective Interest Rate

Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements and interest rate cap agreements during the nine months ended June 30, 2024 and 2023 was 5.5% and 5.3%, respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three and nine months ended June 30, 2024 of $4.0 million and $6.4 million, respectively, and for the three and nine months ended June 30, 2023 of $1.2 million and $3.7 million, respectively.

Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements and interest rate cap agreements during the three months ended December 31, 2024 and 2023 was 5.2% and 5.4%, respectively.

Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three months ended December 31, 2024 and 2023 of $1.4 million and $1.2 million, respectively.

Other Commitments

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However, if we acquire additional businesses in the future or if we embark on other capital-intensive initiatives, additional working capital may be required.

Under our secured revolving credit facility and other facilities discussed in Other Debt and Other Items above, as of June 30, 2024, there was approximately $913.8 million, including both continuing and discontinued operations, outstanding under standby letters of credit primarily issued in connection with general and professional liability insurance programs and for contract performance guarantees.

Under our secured revolving credit facility and other facilities discussed in Other Debt and Other Items above, as of December 31, 2024, there was approximately $934.6 million, including both continuing and discontinued operations, outstanding under standby letters of credit primarily issued in connection with general and professional liability insurance programs and for contract performance guarantees.

For those projects for which we have issued a performance guarantee, if the project subsequently fails to meet guaranteed performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the client to achieve the required performance standards.

We recognized on our balance sheet the funded status of our pension benefit plans, measured as the difference between the fair value of plan assets and the projected benefit obligation.

At June 30, 2024, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $133.8 million.

The total amounts of employer contributions paid for the nine months ended June 30, 2024 were $8.6 million for U.S.

At December 31, 2024, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $119.9 million.

The total amounts of employer contributions paid for the three months ended December 31, 2024 were $2.9 million for U.S.

plans and $6.1 million for non-U.S.

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Refer to our Annual Report on Form 10-K for the year ended September 30, 2024 for a discussion of our contractual obligations.

There have been no changes, outside of the ordinary course of business, to these contractual obligations during the nine months ended June 30, 2024.

There have been no changes, outside of the ordinary course of business, to these contractual obligations during the three months ended December 31, 2024.

Condensed Combined Financial Information

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All intercompany balances and transactions are eliminated in the presentation of the combined financial statements.

Amounts provided do not represent our total consolidated amounts as of June 30, 2024 and September 30, 2023, and for the nine months ended June 30, 2024.

Amounts provided do not represent our total consolidated amounts as of December 31, 2024 and September 30, 2024, and for the three months ended December 31, 2024.

Condensed Combined Balance Sheets

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(unaudited - in millions)

June 30, 2024

September 30, 2023

December 31, 2024 September 30, 2024

Current assets $ 3,390.2 $ 3,405.2

Non-current assets 3,001.5 3,033.6

Total assets $ 6,391.7 $ 6,438.8

Current liabilities $ 2,807.0 $ 2,918.1

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(unaudited - in millions)

For the nine months ended

June 30, 2024

For the three months ended

December 31, 2024

Revenue $ 2,319.4

Cost of revenue 2,134.6

Gross profit 184.8

Net income from continuing operations 122.5

Net loss from discontinued operations —

Net income $ 122.5

Net income attributable to AECOM $ 122.5

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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-Q

Item 2. Management’s Discussion and Analysis