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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 March 31, 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 May 3, 2024, 136,127,400 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 March 31, 2024 (unaudited) and September 30, 2023

1

Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2024 (unaudited) and March 31, 2023 (unaudited)

2

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2024 (unaudited) and March 31, 2023 (unaudited)

3

Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended March 31, 2024 (unaudited) and March 31, 2023 (unaudited)

4

Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2024 (unaudited) and March 31, 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)

March 31, 

September 30, 

    

2024

    

2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

910,934

$

1,030,447

Cash in consolidated joint ventures

 

274,872

229,759

Total cash and cash equivalents

 

1,185,806

1,260,206

Accounts receivable—net

 

2,646,722

2,544,453

Contract assets

1,805,622

1,525,051

Prepaid expenses and other current assets

 

725,847

730,145

Current assets held for sale

105,091

95,221

Income taxes receivable

 

28,698

14,435

TOTAL CURRENT ASSETS

 

6,497,786

6,169,511

PROPERTY AND EQUIPMENT—NET

 

372,384

382,638

DEFERRED TAX ASSETS—NET

 

444,957

439,604

INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

 

137,422

139,236

GOODWILL

 

3,446,984

3,418,930

INTANGIBLE ASSETS—NET

 

16,111

17,769

OTHER NON-CURRENT ASSETS

 

118,899

218,666

OPERATING LEASE RIGHT-OF-USE ASSETS

422,850

447,044

TOTAL ASSETS

$

11,457,393

$

11,233,398

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Short-term debt

$

2,914

$

3,085

Accounts payable

 

2,304,539

2,190,755

Accrued expenses and other current liabilities

 

2,385,201

2,287,546

Income taxes payable

36,723

48,161

Contract liabilities

 

1,267,045

1,188,742

Current liabilities held for sale

51,141

45,625

Current portion of long-term debt

88,552

86,369

TOTAL CURRENT LIABILITIES

 

6,136,115

5,850,283

OTHER LONG-TERM LIABILITIES

 

119,797

123,846

OPERATING LEASE LIABILITIES, NON-CURRENT

507,518

548,851

LONG-TERM LIABILITIES HELD FOR SALE

796

792

DEFERRED TAX LIABILITY-NET

16,990

16,960

PENSION BENEFIT OBLIGATIONS

179,464

195,586

LONG-TERM DEBT

2,102,358

2,113,369

TOTAL LIABILITIES

 

9,063,038

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 March 31, 2024 and September 30, 2023; issued and outstanding 135,872,491 and 136,210,883 shares as of March 31, 2024 and September 30, 2023, respectively

 

1,359

1,362

Additional paid-in capital

 

4,267,719

4,241,523

Accumulated other comprehensive loss

 

(909,970)

(926,577)

Accumulated deficits

 

(1,160,441)

(1,103,976)

TOTAL AECOM STOCKHOLDERS’ EQUITY

 

2,198,667

2,212,332

Noncontrolling interests

 

195,688

171,379

TOTAL STOCKHOLDERS’ EQUITY

 

2,394,355

2,383,711

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

11,457,393

$

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

Six Months Ended

March 31, 

March 31, 

    

March 31, 

    

March 31, 

    

2024

    

2023

    

2024

    

2023

Revenue

$

3,943,833

$

3,490,172

$

7,843,753

$

6,872,527

Cost of revenue

3,682,659

3,262,078

7,338,609

6,429,445

Gross profit

261,174

228,094

505,144

443,082

Equity in earnings (losses) of joint ventures

19,459

7,456

(9,482)

17,285

General and administrative expenses

(44,686)

(34,147)

(80,410)

(69,759)

Restructuring costs

(35,465)

(3,973)

(51,645)

(41,432)

Income from operations

200,482

197,430

363,607

349,176

Other income

2,622

2,501

5,191

4,485

Interest income

15,422

9,804

27,524

15,690

Interest expense

(47,723)

(42,372)

(88,980)

(79,072)

Income from continuing operations before taxes

170,803

167,363

307,342

290,279

Income tax expense for continuing operations

45,385

41,105

72,043

66,870

Net income from continuing operations

125,418

126,258

235,299

223,409

Net loss from discontinued operations

(109,388)

(41,775)

(110,675)

(42,163)

Net income

16,030

84,483

124,624

181,246

Net income attributable to noncontrolling interests from continuing operations

(14,113)

(8,089)

(27,230)

(17,733)

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

(910)

221

(1,949)

1,047

Net income attributable to noncontrolling interests

(15,023)

(7,868)

(29,179)

(16,686)

Net income attributable to AECOM from continuing operations

111,305

118,169

208,069

205,676

Net loss attributable to AECOM from discontinued operations

(110,298)

(41,554)

(112,624)

(41,116)

Net income attributable to AECOM

$

1,007

$

76,615

$

95,445

$

164,560

Net income (loss) attributable to AECOM per share:

Basic continuing operations per share

$

0.82

$

0.85

$

1.53

$

1.48

Basic discontinued operations per share

$

(0.81)

$

(0.30)

$

(0.83)

$

(0.29)

Basic earnings per share

$

0.01

$

0.55

$

0.70

$

1.19

Diluted continuing operations per share

$

0.81

$

0.84

$

1.52

$

1.46

Diluted discontinued operations per share

$

(0.80)

$

(0.29)

$

(0.82)

$

(0.29)

Diluted earnings per share

$

0.01

$

0.55

$

0.70

$

1.17

Weighted average shares outstanding:

Basic

136,006

138,927

135,952

138,807

Diluted

136,712

140,335

136,907

140,489

See accompanying Notes to Consolidated Financial Statements.

2

AECOM

Consolidated Statements of Comprehensive Income

(unaudited—in thousands)

Three Months Ended

Six Months Ended

March 31, 

March 31, 

    

March 31, 

    

March 31, 

    

2024

    

2023

    

2024

    

2023

Net income

$

16,030

$

84,483

$

124,624

$

181,246

Other comprehensive income, net of tax:

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

4,811

(7,564)

(9,401)

(9,381)

Foreign currency translation adjustments

(27,129)

8,627

33,035

86,751

Pension adjustments, net of tax

2,008

(3,672)

(6,990)

(18,519)

Other comprehensive (loss) income, net of tax

(20,310)

(2,609)

16,644

58,851

Comprehensive (loss) income, net of tax

(4,280)

81,874

141,268

240,097

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

(14,895)

(7,985)

(29,216)

(16,949)

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

$

(19,175)

$

73,889

$

112,052

$

223,148

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 DECEMBER 31, 2023

$

1,360

$

4,245,340

$

(889,788)

$

(1,109,616)

$

2,247,296

$

180,922

$

2,428,218

Net income

1,007

1,007

15,023

16,030

Dividends declared

(30,782)

(30,782)

(30,782)

Other comprehensive loss

(20,182)

(20,182)

(128)

(20,310)

Issuance of stock

1

5,822

5,823

5,823

Repurchases of stock

(2)

998

(21,050)

(20,054)

(20,054)

Stock-based compensation

15,559

15,559

15,559

Contributions from noncontrolling interests

2,616

2,616

Distributions to noncontrolling interests

(2,745)

(2,745)

BALANCE AT MARCH 31, 2024

$

1,359

$

4,267,719

$

(909,970)

$

(1,160,441)

$

2,198,667

$

195,688

$

2,394,355

    

    

Accumulated 

    

    

Total 

    

    

Additional 

Other 

AECOM 

Non-

Total 

Common 

Paid-In 

Comprehensive

Accumulated

Stockholders’ 

Controlling 

Stockholders’ 

    

Stock

    

Capital

    

 Loss

    

Deficits

    

Equity

    

Interests

    

Equity

BALANCE AT DECEMBER 31, 2022

$

1,390

$

4,161,716

$

(918,361)

$

(689,111)

$

2,555,634

$

137,259

$

2,692,893

Net income

76,615

76,615

7,868

84,483

Dividends declared

(25,394)

(25,394)

(25,394)

Other comprehensive loss

(2,726)

(2,726)

117

(2,609)

Issuance of stock

1

4,388

4,389

4,389

Repurchases of stock

(4)

(1,875)

(25,001)

(26,880)

(26,880)

Stock-based compensation

12,702

12,702

12,702

Contributions from noncontrolling interests

4

4

Distributions to noncontrolling interests

(2,713)

(2,713)

BALANCE AT MARCH 31, 2023

$

1,387

$

4,176,931

$

(921,087)

$

(662,891)

$

2,594,340

$

142,535

$

2,736,875

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

95,445

95,445

29,179

124,624

Dividends declared

(60,856)

(60,856)

(60,856)

Other comprehensive income

16,607

16,607

37

16,644

Issuance of stock

10

16,710

16,720

16,720

Repurchases of stock

(13)

(21,125)

(91,054)

(112,192)

(112,192)

Stock-based compensation

30,611

30,611

30,611

Contributions from noncontrolling interests

5,492

5,492

Distributions to noncontrolling interests

(10,399)

(10,399)

BALANCE AT MARCH 31, 2024

$

1,359

$

4,267,719

$

(909,970)

$

(1,160,441)

$

2,198,667

$

195,688

$

2,394,355

    

    

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

164,560

164,560

16,686

181,246

Dividends declared

(50,792)

(50,792)

(50,792)

Other comprehensive income

58,588

58,588

263

58,851

Issuance of stock

11

17,614

17,625

17,625

Repurchases of stock

(13)

(21,872)

(75,005)

(96,890)

(96,890)

Stock-based compensation

24,595

24,595

24,595

Contributions from noncontrolling interests

676

676

Distributions to noncontrolling interests

(3,815)

(3,815)

BALANCE AT MARCH 31, 2023

$

1,387

$

4,176,931

$

(921,087)

$

(662,891)

$

2,594,340

$

142,535

$

2,736,875

See accompanying Notes to Consolidated Financial Statements.

5

AECOM

Consolidated Statements of Cash Flows

(unaudited - in thousands)

Six Months Ended March 31, 

    

2024

    

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

124,624

$

181,246

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

87,508

87,786

Equity in losses (earnings) of unconsolidated joint ventures

 

12,882

(15,545)

Distribution of earnings from unconsolidated joint ventures

 

12,903

27,126

Non-cash stock compensation

30,611

24,595

Loss on sale of discontinued operations

103,085

40,160

Foreign currency translation

8,125

6,768

Other

(274)

2,615

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

Accounts receivable and contract assets

 

(383,534)

(376,005)

Prepaid expenses and other assets

 

(5,625)

24,136

Accounts payable

 

147,593

31,542

Accrued expenses and other current liabilities

 

84,169

(11,683)

Contract liabilities

78,109

126,035

Other long-term liabilities

 

(62,758)

(17,321)

Net cash provided by operating activities

237,418

131,455

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for business acquisition, net of cash acquired

(18,686)

Investment in unconsolidated joint ventures

(29,930)

(26,127)

Return of investment in unconsolidated joint ventures

6,352

Proceeds from sale of investments

3,180

4,786

Proceeds from disposal of property and equipment

249

256

Payments for capital expenditures

(76,734)<