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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission File Number 000-52423

AECOM

(Exact name of registrant as specified in its charter)

Delaware

    

61-1088522

State or Other Jurisdiction Of
Incorporation or Organization

I.R.S. Employer Identification Number

13355 Noel Road

Dallas, Texas

75240

Address of Principal Executive Offices

Zip Code

(972) 788-1000

Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

 

Common Stock, $0.01 par value

ACM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

As of August 1, 2024, 134,066,746 shares of the registrant’s common stock were outstanding.

AECOM

INDEX

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

1

Consolidated Balance Sheets as of June 30, 2024 (unaudited) and September 30, 2023

1

Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)

2

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)

3

Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)

4

Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)

6

Notes to Consolidated Financial Statements (unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

42

Item 4.

Controls and Procedures

43

PART II.

OTHER INFORMATION

43

Item 1.

Legal Proceedings

43

Item 1A.

Risk Factors

43

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3.

Defaults Upon Senior Securities

44

Item 4.

Mine Safety Disclosure

44

Item 5.

Other Information

44

Item 6.

Exhibits

45

SIGNATURES

46

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AECOM

Consolidated Balance Sheets

(unaudited - in thousands, except share data)

June 30, 

September 30, 

    

2024

    

2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

1,349,172

$

1,030,447

Cash in consolidated joint ventures

 

295,640

229,759

Total cash and cash equivalents

 

1,644,812

1,260,206

Accounts receivable—net

 

2,660,421

2,544,453

Contract assets

1,884,755

1,525,051

Prepaid expenses and other current assets

 

732,455

730,145

Current assets held for sale

135,970

95,221

Income taxes receivable

 

60,251

14,435

TOTAL CURRENT ASSETS

 

7,118,664

6,169,511

PROPERTY AND EQUIPMENT—NET

 

356,878

382,638

DEFERRED TAX ASSETS—NET

 

398,871

439,604

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

 

140,629

139,236

GOODWILL

 

3,448,160

3,418,930

INTANGIBLE ASSETS—NET

 

11,515

17,769

OTHER NON-CURRENT ASSETS

 

151,590

218,666

OPERATING LEASE RIGHT-OF-USE ASSETS

420,291

447,044

TOTAL ASSETS

$

12,046,598

$

11,233,398

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Short-term debt

$

2,522

$

3,085

Accounts payable

 

2,436,736

2,190,755

Accrued expenses and other current liabilities

 

2,414,250

2,287,546

Income taxes payable

44,893

48,161

Contract liabilities

 

1,261,853

1,188,742

Current liabilities held for sale

65,762

45,625

Current portion of long-term debt

63,628

86,369

TOTAL CURRENT LIABILITIES

 

6,289,644

5,850,283

OTHER LONG-TERM LIABILITIES

 

123,402

123,846

OPERATING LEASE LIABILITIES, NON-CURRENT

496,681

548,851

LONG-TERM LIABILITIES HELD FOR SALE

782

792

DEFERRED TAX LIABILITY-NET

17,784

16,960

PENSION BENEFIT OBLIGATIONS

168,085

195,586

LONG-TERM DEBT

2,451,544

2,113,369

TOTAL LIABILITIES

 

9,547,922

8,849,687

COMMITMENTS AND CONTINGENCIES (Note 15)

AECOM STOCKHOLDERS’ EQUITY:

Common stock-authorized, 300,000,000 shares of $0.01 par value as of June 30, 2024 and September 30, 2023; issued and outstanding 135,702,623 and 136,210,883 shares as of June 30, 2024 and September 30, 2023, respectively

 

1,357

1,362

Additional paid-in capital

 

4,318,755

4,241,523

Accumulated other comprehensive loss

 

(914,989)

(926,577)

Accumulated deficits

 

(1,106,797)

(1,103,976)

TOTAL AECOM STOCKHOLDERS’ EQUITY

 

2,298,326

2,212,332

Noncontrolling interests

 

200,350

171,379

TOTAL STOCKHOLDERS’ EQUITY

 

2,498,676

2,383,711

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

12,046,598

$

11,233,398

See accompanying Notes to Consolidated Financial Statements.

1

AECOM

Consolidated Statements of Operations

(unaudited - in thousands, except per share data)

Three Months Ended

Nine Months Ended

June 30, 

June 30, 

    

June 30, 

    

June 30, 

    

2024

    

2023

    

2024

    

2023

Revenue

$

4,151,251

$

3,663,549

$

11,995,004

$

10,536,076

Cost of revenue

3,866,207

3,413,471

11,204,816

9,842,916

Gross profit

285,044

250,078

790,188

693,160

Equity in earnings (losses) of joint ventures

7,647

(303,503)

(1,835)

(286,218)

General and administrative expenses

(36,209)

(42,883)

(116,619)

(112,642)

Restructuring costs

(29,025)

(9,115)

(80,670)

(50,547)

Income (loss) from operations

227,457

(105,423)

591,064

243,753

Other income

963

1,797

6,154

6,282

Interest income

15,817

8,802

43,341

24,492

Interest expense

(51,370)

(38,868)

(140,350)

(117,940)

Income (loss) from continuing operations before taxes

192,867

(133,692)

500,209

156,587

Income tax expense (benefit) for continuing operations

46,035

(20,000)

118,078

46,870

Net income (loss) from continuing operations

146,832

(113,692)

382,131

109,717

Net income (loss) from discontinued operations

5,677

(7,607)

(104,998)

(49,770)

Net income (loss)

152,509

(121,299)

277,133

59,947

Net income attributable to noncontrolling interests from continuing operations

(17,355)

(11,829)

(44,585)

(29,562)

Net income attributable to noncontrolling interests from discontinued operations

(881)

(1,573)

(2,830)

(526)

Net income attributable to noncontrolling interests

(18,236)

(13,402)

(47,415)

(30,088)

Net income (loss) attributable to AECOM from continuing operations

129,477

(125,521)

337,546

80,155

Net income (loss) attributable to AECOM from discontinued operations

4,796

(9,180)

(107,828)

(50,296)

Net income (loss) attributable to AECOM

$

134,273

$

(134,701)

$

229,718

$

29,859

Net income (loss) attributable to AECOM per share:

Basic continuing operations per share

$

0.95

$

(0.90)

$

2.48

$

0.58

Basic discontinued operations per share

$

0.04

$

(0.07)

$

(0.79)

$

(0.36)

Basic earnings per share

$

0.99

$

(0.97)

$

1.69

$

0.22

Diluted continuing operations per share

$

0.95

$

(0.90)

$

2.47

$

0.57

Diluted discontinued operations per share

$

0.03

$

(0.07)

$

(0.79)

$

(0.36)

Diluted earnings per share

$

0.98

$

(0.97)

$

1.68

$

0.21

Weighted average shares outstanding:

Basic

136,025

138,741

135,976

138,785

Diluted

136,790

138,741

136,868

140,339

See accompanying Notes to Consolidated Financial Statements.

2

AECOM

Consolidated Statements of Comprehensive Income

(unaudited—in thousands)

Three Months Ended

Nine Months Ended

June 30, 

June 30, 

    

June 30, 

    

June 30, 

    

2024

    

2023

    

2024

    

2023

Net income (loss)

$

152,509

$

(121,299)

$

277,133

$

59,947

Other comprehensive income, net of tax:

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

(375)

7,234

(9,776)

(2,147)

Foreign currency translation adjustments

(4,422)

18,274

28,613

105,025

Pension adjustments, net of tax

(260)

(5,404)

(7,250)

(23,923)

Other comprehensive income, net of tax

(5,057)

20,104

11,587

78,955

Comprehensive income (loss), net of tax

147,452

(101,195)

288,720

138,902

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

(18,198)

(13,234)

(47,414)

(30,183)

Comprehensive income (loss) attributable to AECOM, net of tax

$

129,254

$

(114,429)

$

241,306

$

108,719

See accompanying Notes to Consolidated Financial Statements.

3

AECOM

Consolidated Statements of Stockholders’ Equity

(unaudited—in thousands)

Accumulated 

Total 

Additional 

Other 

AECOM 

Non-

Total 

Common 

Paid-In 

Comprehensive

Accumulated

Stockholders’ 

Controlling 

Stockholders’ 

    

Stock

    

Capital

    

 Loss

    

Deficits

    

Equity

    

Interests

    

Equity

BALANCE AT MARCH 31, 2024

$

1,359

$

4,267,719

$

(909,970)

$

(1,160,441)

$

2,198,667

$

195,688

$

2,394,355

Net income

134,273

134,273

18,236

152,509

Dividends declared

(30,338)

(30,338)

(30,338)

Other comprehensive loss

(5,019)

(5,019)

(38)

(5,057)

Issuance of stock

3

36,887

36,890

36,890

Repurchases of stock

(5)

(54)

(50,291)

(50,350)

(50,350)

Stock-based compensation

14,203

14,203

14,203

Contributions from noncontrolling interests

3,037

3,037

Distributions to noncontrolling interests

(16,573)

(16,573)

BALANCE AT JUNE 31, 2024

$

1,357

$

4,318,755

$

(914,989)

$

(1,106,797)

$

2,298,326

$

200,350

$

2,498,676

    

    

Accumulated 

    

    

Total 

    

    

Additional 

Other 

AECOM 

Non-

Total 

Common 

Paid-In 

Comprehensive

Accumulated

Stockholders’ 

Controlling 

Stockholders’ 

    

Stock

    

Capital

    

 Loss

    

Deficits

    

Equity

    

Interests

    

Equity

BALANCE AT MARCH 31, 2023

$

1,387

$

4,176,931

$

(921,087)

$

(662,891)

$

2,594,340

$

142,535

$

2,736,875

Net loss

(134,701)

(134,701)

13,402

(121,299)

Dividends declared

(25,236)

(25,236)

(25,236)

Other comprehensive income

20,272

20,272

(168)

20,104

Issuance of stock

4

33,821

33,825

33,825

Repurchases of stock

(6)

(10)

(50,004)

(50,020)

(50,020)

Stock-based compensation

16,285

16,285

16,285

Contributions from noncontrolling interests

14,539

14,539

Distributions to noncontrolling interests

(2,748)

(2,748)

BALANCE AT JUNE 30, 2023

$

1,385

$

4,227,027

$

(900,815)

$

(872,832)

$

2,454,765

$

167,560

$

2,622,325

4

    

Accumulated 

Total 

Additional 

Other 

AECOM 

Non-

Total 

Common 

Paid-In 

Comprehensive

Accumulated

Stockholders’ 

Controlling 

Stockholders’ 

    

Stock

    

Capital

    

 Loss

    

Deficits

    

Equity

    

Interests

    

Equity

BALANCE AT SEPTEMBER 30, 2023

$

1,362

$

4,241,523

$

(926,577)

$

(1,103,976)

$

2,212,332

$

171,379

$

2,383,711

Net income

229,718

229,718

47,415

277,133

Dividends declared

(91,194)

(91,194)

(91,194)

Other comprehensive income

11,588

11,588

(1)

11,587

Issuance of stock

13

53,597

53,610

53,610

Repurchases of stock

(18)

(21,179)

(141,345)

(162,542)

(162,542)

Stock-based compensation

44,814

44,814

44,814

Contributions from noncontrolling interests

8,529

8,529

Distributions to noncontrolling interests

(26,972)

(26,972)

BALANCE AT JUNE 30, 2024

$

1,357

$

4,318,755

$

(914,989)

$

(1,106,797)

$

2,298,326

$

200,350

$

2,498,676

    

    

Accumulated 

    

    

Total 

    

    

Additional 

Other 

AECOM 

Non-

Total 

Common 

Paid-In 

Comprehensive

Accumulated

Stockholders’ 

Controlling 

Stockholders’ 

    

Stock

    

Capital

    

 Loss

    

Deficits

    

Equity

    

Interests

    

Equity

BALANCE AT SEPTEMBER 30, 2022

$

1,389

$

4,156,594

$

(979,675)

$

(701,654)

$

2,476,654

$

128,725

$

2,605,379

Net income

29,859

29,859

30,088

59,947

Dividends declared

(76,028)

(76,028)

(76,028)

Other comprehensive income

78,860

78,860

95

78,955

Issuance of stock

15

51,435

51,450

51,450

Repurchases of stock

(19)

(21,882)

(125,009)

(146,910)

(146,910)

Stock-based compensation

40,880

40,880

40,880

Contributions from noncontrolling interests

15,215

15,215

Distributions to noncontrolling interests

(6,563)

(6,563)

BALANCE AT JUNE 30, 2023

$

1,385

$

4,227,027

$

(900,815)

$

(872,832)

$

2,454,765

$

167,560

$

2,622,325

See accompanying Notes to Consolidated Financial Statements.

5

AECOM

Consolidated Statements of Cash Flows

(unaudited - in thousands)

Nine Months Ended June 30, 

    

2024

    

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

277,133

$

59,947

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

 

133,873

131,047

Equity in losses of unconsolidated joint ventures

 

5,235

287,958

Distribution of earnings from unconsolidated joint ventures

 

15,141

31,878

Non-cash stock compensation

44,814

40,880

Loss on sale of discontinued operations

90,412

40,160

Foreign currency translation

3,670

7,187

Other

4,652

4,644

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable and contract assets

 

(514,407)

(452,702)

Prepaid expenses and other assets

 

20,613

(4,127)

Accounts payable

 

290,587

96,033

Accrued expenses and other current liabilities

 

164,926

32,109

Contract liabilities

72,917

171,892

Other long-term liabilities

 

(80,852)

(36,111)

Net cash provided by operating activities

528,714

410,795

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for business acquisition, net of cash acquired

(18,686)

Investment in unconsolidated joint ventures

(48,352)

(44,844)

Return of investment in unconsolidated joint ventures