AECOM [ACM] Filings

10-Q 1 acm-20220331x10q.htm FORM 10-Q

Table of Contents

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, 2022

☐ 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 5, 2022, 141,038,478 shares of the registrant’s common stock were outstanding.

Table of Contents

AECOM

INDEX


PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Balance Sheets as of March 31, 2022 (unaudited) and September 30, 2021	1

	Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2022 (unaudited) and March 31, 2021 (unaudited)	2

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2022 (unaudited) and March 31, 2021 (unaudited)	3

	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended March 31, 2022 (unaudited) and March 31, 2021 (unaudited)	4

	Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2022 (unaudited) and March 31, 2021 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION	41

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 3.	Defaults Upon Senior Securities	42

Item 4.	Mine Safety Disclosure	42

Item 5.	Other Information	42

Item 6.	Exhibits	43

SIGNATURES		44

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AECOM

Consolidated Balance Sheets

(unaudited - in thousands, except share data)


	March 31,		September 30,
	2022		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	829,719	$	1,120,790
Cash in consolidated joint ventures		135,351		108,406
Total cash and cash equivalents		965,070		1,229,196
Accounts receivable—net		2,450,085		2,619,491
Contract assets		1,391,380		1,369,031
Prepaid expenses and other current assets		753,727		739,044
Current assets held for sale		77,662		139,426
Income taxes receivable		59,252		77,355
TOTAL CURRENT ASSETS		5,697,176		6,173,543
PROPERTY AND EQUIPMENT—NET		391,564		398,876
DEFERRED TAX ASSETS—NET		361,319		360,260
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES		341,452		328,906
GOODWILL		3,490,544		3,502,499
INTANGIBLE ASSETS—NET		45,486		54,867
OTHER NON-CURRENT ASSETS		291,142		307,927
OPERATING LEASE RIGHT-OF-USE ASSETS		570,603		607,076
NON-CURRENT ASSETS HELD FOR SALE		6,777		—
TOTAL ASSETS	$	11,196,063	$	11,733,954
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	3,351	$	4,369
Accounts payable		1,915,617		2,090,479
Accrued expenses and other current liabilities		2,218,969		2,174,201
Income taxes payable		61,877		50,511
Contract liabilities		996,275		1,058,643
Current liabilities held for sale		47,940		94,043
Current portion of long-term debt		39,449		49,469
TOTAL CURRENT LIABILITIES		5,283,478		5,521,715
OTHER LONG-TERM LIABILITIES		104,355		145,444
OPERATING LEASE LIABILITIES, NON-CURRENT		636,236		679,059
LONG-TERM LIABILITIES HELD FOR SALE		345		11,095
DEFERRED TAX LIABILITY-NET		5,310		5,420
PENSION BENEFIT OBLIGATIONS		350,376		383,904
LONG-TERM DEBT		2,166,310		2,157,740
TOTAL LIABILITIES		8,546,410		8,904,377

COMMITMENTS AND CONTINGENCIES (Note 15)

AECOM STOCKHOLDERS’ EQUITY:
Common stock-authorized, 300,000,000 shares of $0.01 par value as of March 31, 2022 and September 30, 2021; issued and outstanding 140,742,683 and 143,168,815 shares as of March 31, 2022 and September 30, 2021, respectively		1,407		1,432
Additional paid-in capital		4,100,905		4,115,541
Accumulated other comprehensive loss		(864,087)		(900,377)
Accumulated deficits		(706,783)		(504,126)
TOTAL AECOM STOCKHOLDERS’ EQUITY		2,531,442		2,712,470
Noncontrolling interests		118,211		117,107
TOTAL STOCKHOLDERS’ EQUITY		2,649,653		2,829,577
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,196,063	$	11,733,954

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

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,
	2022		2021		2022		2021
Revenue	$	3,213,658	$	3,265,573	$	6,480,374	$	6,578,728
Cost of revenue		3,003,706		3,070,314		6,070,218		6,199,099
Gross profit		209,952		195,259		410,156		379,629

Equity in earnings of joint ventures		11,919		7,157		19,869		15,358
General and administrative expenses		(37,098)		(36,007)		(73,599)		(74,367)
Restructuring costs		(73,292)		(8,746)		(76,663)		(21,784)
Income from operations		111,481		157,663		279,763		298,836

Other income		3,329		3,477		6,203		7,330
Interest expense		(24,173)		(32,800)		(49,556)		(63,451)
Income from continuing operations before taxes		90,637		128,340		236,410		242,715
Income tax expense for continuing operations		36,011		35,148		58,567		60,749
Net income from continuing operations		54,626		93,192		177,843		181,966
Net loss from discontinued operations		(6,113)		(47,914)		(68,053)		(103,666)
Net income		48,513		45,278		109,790		78,300

Net income attributable to noncontrolling interests from continuing operations		(5,592)		(4,845)		(11,048)		(10,259)
Net (income) loss attributable to noncontrolling interests from discontinued operations		(1,364)		(1,074)		4,363		(2,554)
Net income attributable to noncontrolling interests		(6,956)		(5,919)		(6,685)		(12,813)

Net income attributable to AECOM from continuing operations		49,034		88,347		166,795		171,707
Net loss attributable to AECOM from discontinued operations		(7,477)		(48,988)		(63,690)		(106,220)
Net income attributable to AECOM	$	41,557	$	39,359	$	103,105	$	65,487

Net income (loss) attributable to AECOM per share:
Basic continuing operations per share	$	0.35	$	0.60	$	1.18	$	1.15
Basic discontinued operations per share	$	(0.06)	$	(0.33)	$	(0.45)	$	(0.71)
Basic earnings per share	$	0.29	$	0.27	$	0.73	$	0.44

Diluted continuing operations per share	$	0.34	$	0.59	$	1.16	$	1.13
Diluted discontinued operations per share	$	(0.05)	$	(0.33)	$	(0.44)	$	(0.70)
Diluted earnings per share	$	0.29	$	0.26	$	0.72	$	0.43

Weighted average shares outstanding:
Basic		141,060		147,770		141,419		149,597
Diluted		142,626		149,519		143,631		151,632

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Comprehensive Income

(unaudited—in thousands)


	Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2022		2021		2022		2021

Net income	$	48,513	$	45,278	$	109,790	$	78,300

Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax		17,087		1,064		20,636		1,953
Foreign currency translation adjustments		9,096		(20,065)		3,899		31,886
Pension adjustments, net of tax		9,030		42		11,763		(10,711)
Other comprehensive income (loss), net of tax		35,213		(18,959)		36,298		23,128
Comprehensive income, net of tax		83,726		26,319		146,088		101,428
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax		(7,084)		(5,904)		(6,693)		(13,003)
Comprehensive income attributable to AECOM, net of tax	$	76,642	$	20,415	$	139,395	$	88,425

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

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, 2021	$	1,413	$	4,085,333	$	(899,172)	$	(676,902)	$	2,510,672	$	115,567	$	2,626,239
Net income		—		—		—		41,557		41,557		6,956		48,513
Dividends declared		—		—		—		(21,445)		(21,445)		—		(21,445)
Other comprehensive income		—		—		35,085		—		35,085		128		35,213
Issuance of stock		—		4,154		—		—		4,154		—		4,154
Repurchases of stock		(6)		(487)		—		(49,993)		(50,486)		—		(50,486)
Stock-based compensation		—		11,905		—		—		11,905		—		11,905
Other transactions with noncontrolling interests		—		—		—		—		—		35		35
Distributions to noncontrolling interests		—		—		—		—		—		(4,475)		(4,475)
BALANCE AT MARCH 31, 2022	$	1,407	$	4,100,905	$	(864,087)	$	(706,783)	$	2,531,442	$	118,211	$	2,649,653


					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, 2020	$	1,486	$	4,038,149	$	(876,792)	$	(254,639)	$	2,908,204	$	111,973	$	3,020,177
Net income		—		—		—		39,359		39,359		5,919		45,278
Other comprehensive loss		—		—		(18,944)		—		(18,944)		(15)		(18,959)
Issuance of stock		4		7,901		—		—		7,905		—		7,905
Repurchases of stock		(22)		(1,220)		—		(121,572)		(122,814)		—		(122,814)
Stock-based compensation		—		9,259		—		—		9,259		—		9,259
Other transactions with noncontrolling interests		—		—		—		—		—		(1,727)		(1,727)
Disposal of noncontrolling interest of business sold		—		—		—		—		—		(10,969)		(10,969)
Contributions from noncontrolling interests		—		—		—		—		—		147		147
Distributions to noncontrolling interests		—		—		—		—		—		(1,597)		(1,597)
BALANCE AT MARCH 31, 2021	$	1,468	$	4,054,089	$	(895,736)	$	(336,852)	$	2,822,969	$	103,731	$	2,926,700

Table of Contents


					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, 2021	$	1,432	$	4,115,541	$	(900,377)	$	(504,126)	$	2,712,470	$	117,107	$	2,829,577
Net income		—		—		—		103,105		103,105		6,685		109,790
Dividends declared		—		—		—		(42,951)		(42,951)		—		(42,951)
Other comprehensive income		—		—		36,290		—		36,290		8		36,298
Issuance of stock		19		13,584		—		—		13,603		—		13,603
Repurchases of stock		(44)		(49,939)		—		(262,811)		(312,794)		—		(312,794)
Stock-based compensation		—		21,719		—		—		21,719		—		21,719
Other transactions with noncontrolling interests		—		—		—		—		—		(118)		(118)
Contributions from noncontrolling interests		—		—		—		—		—		2		2
Distributions to noncontrolling interests		—		—		—		—		—		(5,473)		(5,473)
BALANCE AT MARCH 31, 2022	$	1,407	$	4,100,905	$	(864,087)	$	(706,783)	$	2,531,442	$	118,211	$	2,649,653


					Accumulated		Retained		Total
			Additional		Other		Earnings/		AECOM		Non-		Total
	Common		Paid-In		Comprehensive		(Accumulated		Stockholders’		Controlling		Stockholders’
	Stock		Capital		Loss		Deficits)		Equity		Interests		Equity

BALANCE AT SEPTEMBER 30, 2020	$	1,570	$	4,035,414	$	(918,674)	$	174,248	$	3,292,558	$	120,986	$	3,413,544
Net income		—		—		—		65,487		65,487		12,813		78,300
Cumulative effect of accounting standard adoption		—		—		—		(7,979)		(7,979)		—		(7,979)
Other comprehensive income		—		—		22,938		—		22,938		190		23,128
Issuance of stock		19		16,995		—		—		17,014		—		17,014
Repurchases of stock		(121)		(22,942)		—		(568,608)		(591,671)		—		(591,671)
Stock-based compensation		—		24,622		—		—		24,622		—		24,622
Other transactions with noncontrolling interests		—		—		—		—		—		580		580
Disposal of noncontrolling interest of business sold		—		—		—		—		—		(24,039)		(24,039)
Contributions from noncontrolling interests		—		—		—		—		—		226		226
Distributions to noncontrolling interests		—		—		—		—		—		(7,025)		(7,025)
BALANCE AT MARCH 31, 2021	$	1,468	$	4,054,089	$	(895,736)	$	(336,852)	$	2,822,969	$	103,731	$	2,926,700

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

AECOM

Consolidated Statements of Cash Flows

(unaudited - in thousands)


	Six Months Ended March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	109,790	$	78,300
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		85,176		80,828
Equity in earnings of unconsolidated joint ventures		(16,519)		(23,384)
Distribution of earnings from unconsolidated joint ventures		13,407		16,705
Non-cash stock compensation		21,719		24,622
Impairment of long-lived assets		—		95,814
Loss on sale of discontinued operations		45,586		50,117
Foreign currency translation		14,588		(8,304)
Other		8,059

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