Aecom 10-Q for FY2023 Q2

Aecom (ACM)

10-Q 2023-05-09 For: 2023-03-31

Added on April 09, 2026

About this 10-Q

Aecom filed this 10-Q on May 9, 2023, covering the quarter ended March 31, 2023 (FY2023 Q2).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.49B; up 8.6% from $3.21B a year earlier
Net income: $76.62M; up 84.4% from net income of $41.56M a year earlier
Diluted EPS: $0.55; up 89.7% from $0.29 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

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


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


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Balance Sheets as of March 31, 2023 (unaudited) and September 30, 2022	1

	Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2023 (unaudited) and March 31, 2022 (unaudited)	2

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2023 (unaudited) and March 31, 2022 (unaudited)	3

	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended March 31, 2023 (unaudited) and March 31, 2022 (unaudited)	4

	Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2023 (unaudited) and March 31, 2022 (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	39

Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	40

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosure	40

Item 5.	Other Information	40

Item 6.	Exhibits	41

SIGNATURES		42


	March 31,		September 30,
	2023		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	907,510	$	972,661
Cash in consolidated joint ventures		166,005		199,548
Total cash and cash equivalents		1,073,515		1,172,209
Accounts receivable—net		2,427,913		2,317,812
Contract assets		1,604,593		1,405,299
Prepaid expenses and other current assets		755,049		759,402
Current assets held for sale		110,574		79,000
Income taxes receivable		67,499		89,088
TOTAL CURRENT ASSETS		6,039,143		5,822,810
PROPERTY AND EQUIPMENT—NET		429,815		428,239
DEFERRED TAX ASSETS—NET		292,844		284,154
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES		387,103		354,983
GOODWILL		3,431,302		3,380,761
INTANGIBLE ASSETS—NET		26,813		35,552
OTHER NON-CURRENT ASSETS		221,356		293,043
OPERATING LEASE RIGHT-OF-USE ASSETS		558,150		539,773
TOTAL ASSETS	$	11,386,526	$	11,139,315
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	4,748	$	5,032
Accounts payable		2,043,230		2,027,314
Accrued expenses and other current liabilities		2,153,844		2,181,408
Income taxes payable		43,676		46,336
Contract liabilities		1,177,293		1,051,258
Current liabilities held for sale		62,193		49,249
Current portion of long-term debt		52,281		43,574
TOTAL CURRENT LIABILITIES		5,537,265		5,404,171
OTHER LONG-TERM LIABILITIES		118,057		135,795
OPERATING LEASE LIABILITIES, NON-CURRENT		603,127		595,308
LONG-TERM LIABILITIES HELD FOR SALE		275		200
DEFERRED TAX LIABILITY-NET		9,209		9,224
PENSION BENEFIT OBLIGATIONS		229,527		232,552
LONG-TERM DEBT		2,152,191		2,156,686
TOTAL LIABILITIES		8,649,651		8,533,936

COMMITMENTS AND CONTINGENCIES (Note 15)

AECOM STOCKHOLDERS’ EQUITY:
Common stock-authorized, 300,000,000 shares of $0.01 par value as of March 31, 2023 and September 30, 2022; issued and outstanding 138,724,105 and 138,933,907 shares as of March 31, 2023 and September 30, 2022, respectively		1,387		1,389
Additional paid-in capital		4,176,931		4,156,594
Accumulated other comprehensive loss		(921,087)		(979,675)
Accumulated deficits		(662,891)		(701,654)
TOTAL AECOM STOCKHOLDERS’ EQUITY		2,594,340		2,476,654
Noncontrolling interests		142,535		128,725
TOTAL STOCKHOLDERS’ EQUITY		2,736,875		2,605,379
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,386,526	$	11,139,315


	Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,
	2023		2022		2023		2022
Revenue	$	3,490,172	$	3,213,658	$	6,872,527	$	6,480,374
Cost of revenue		3,262,078		3,003,706		6,429,445		6,070,218
Gross profit		228,094		209,952		443,082		410,156

Equity in earnings of joint ventures		7,456		11,919		17,285		19,869
General and administrative expenses		(34,147)		(37,098)		(69,759)		(73,599)
Restructuring costs		(3,973)		(73,292)		(41,432)		(76,663)
Income from operations		197,430		111,481		349,176		279,763

Other income		12,305		3,329		20,175		6,203
Interest expense		(42,372)		(24,173)		(79,072)		(49,556)
Income from continuing operations before taxes		167,363		90,637		290,279		236,410
Income tax expense for continuing operations		41,105		36,011		66,870		58,567
Net income from continuing operations		126,258		54,626		223,409		177,843
Net loss from discontinued operations		(41,775)		(6,113)		(42,163)		(68,053)
Net income		84,483		48,513		181,246		109,790

Net income attributable to noncontrolling interests from continuing operations		(8,089)		(5,592)		(17,733)		(11,048)
Net loss (income) attributable to noncontrolling interests from discontinued operations		221		(1,364)		1,047		4,363
Net income attributable to noncontrolling interests		(7,868)		(6,956)		(16,686)		(6,685)

Net income attributable to AECOM from continuing operations		118,169		49,034		205,676		166,795
Net loss attributable to AECOM from discontinued operations		(41,554)		(7,477)		(41,116)		(63,690)
Net income attributable to AECOM	$	76,615	$	41,557	$	164,560	$	103,105

Net income (loss) attributable to AECOM per share:
Basic continuing operations per share	$	0.85	$	0.35	$	1.48	$	1.18
Basic discontinued operations per share	$	(0.30)	$	(0.06)	$	(0.29)	$	(0.45)
Basic earnings per share	$	0.55	$	0.29	$	1.19	$	0.73

Diluted continuing operations per share	$	0.84	$	0.34	$	1.46	$	1.16
Diluted discontinued operations per share	$	(0.29)	$	(0.05)	$	(0.29)	$	(0.44)
Diluted earnings per share	$	0.55	$	0.29	$	1.17	$	0.72

Weighted average shares outstanding:
Basic		138,927		141,060		138,807		141,419
Diluted		140,335		142,626		140,489		143,631


					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


	Six Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	181,246	$	109,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		87,786		85,176
Equity in earnings of unconsolidated joint ventures		(15,545)		(16,519)
Distribution of earnings from unconsolidated joint ventures		27,126		13,407
Non-cash stock compensation		24,595		21,719
Loss on sale of discontinued operations		40,160		45,586
Foreign currency translation		6,768		14,588
Other		2,615		8,059
Changes in operating assets and liabilities:
Accounts receivable and contract assets		(376,005)		139,651
Prepaid expenses and other assets		24,136		67,791
Accounts payable		31,542		(197,252)
Accrued expenses and other current liabilities		(11,683)		74,731
Contract liabilities		126,035		(62,417)
Other long-term liabilities		(17,321)		(111,082)
Net cash provided by operating activities		131,455		193,228

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for sale of discontinued operations, including cash disposed		—		(43,690)
Investment in unconsolidated joint ventures		(26,127)		(12,335)
Return of investment in unconsolidated joint ventures		6,352		1,731
Proceeds from sale of investments		4,786		8,312
Proceeds from disposal of property and equipment		256		579
Payments for capital expenditures		(68,819)		(48,489)
Net cash used in investing activities		(83,552)		(93,892)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements		1,544,751		1,335,742
Repayments of borrowings under credit agreements		(1,564,820)		(1,363,012)
Cash paid for debt issuance costs		—		(155)
Dividends paid		(46,217)		(21,198)
Proceeds from issuance of common stock		12,494		12,034
Proceeds from exercise of stock options		4,112		—
Payments to repurchase common stock		(95,191)		(312,794)
Net distributions to noncontrolling interests		(3,139)		(5,471)
Other financing activities		646		(13,777)
Net cash used in financing activities		(147,364)		(368,631)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		3,548		1,674
NET DECREASE IN CASH AND CASH EQUIVALENTS		(95,913)		(267,621)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,176,772		1,234,792
CASH AND CASH EQUIVALENTS AT END OF PERIOD		1,080,859		967,171
LESS CASH AND CASH EQUIVALENTS INCLUDED IN CURRENT ASSETS HELD FOR SALE		(7,344)		(2,101)
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS AT END OF PERIOD	$	1,073,515	$	965,070


			Foreign
	September 30,		Exchange		March 31,
	2022		Impact		2023

	(in millions)
Americas	$	2,610.7	$	4.0	$	2,614.7
International		770.1		46.5		816.6
Total	$	3,380.8	$	50.5	$	3,431.3


	March 31, 2023						September 30, 2022
	Gross		Accumulated		Intangible		Gross		Accumulated		Intangible		Amortization
	Amount		Amortization		Assets, Net		Amount		Amortization		Assets, Net		Period

	(in millions)												(years)
Customer relationships	$	668.2	$	(641.4)	$	26.8	$	663.0	$	(627.4)	$	35.6	1 - 11


Fiscal Year	(in millions)
2023 (six months remaining)	$	9.0
2024		17.2
2025		0.6
Total	$	26.8


Fiscal Year
2023 (six months remaining)	$	32.2
2024		78.7
2025		45.4
2026		408.1
2027		1,005.7
Thereafter		656.0
Total	$	2,226.1


March 31, 2023
Notional Amount	Notional Amount	Fixed	Effective	Expiration
Currency	(in millions)	Rate	Date	Date
USD	400.0	1.349%	February 2023	March 2028


	2023						2022
		Weighted			Weighted			Weighted			Weighted
		Average			Average			Average			Average
	Restricted	Grant-Date			Grant-Date		Restricted	Grant-Date			Grant-Date
	Stock Units	Fair Value		PEP Units	Fair Value		Stock Units	Fair Value		PEP Units	Fair Value
	(in millions)			(in millions)			(in millions)			(in millions)
Outstanding at September 30,	1.0	$	53.05	0.7	$	60.60	1.3	$	38.88	1.2	$	37.22
Granted	0.3	$	83.64	0.2	$	94.65	0.3	$	74.32	0.2	$	85.48
PEP units earned	—	$	—	0.2	$	43.19	—	$	—	0.6	$	27.90
Vested	(0.4)	$	44.95	(0.4)	$	43.19	(0.5)	$	29.36	(1.3)	$	27.89
Outstanding at March 31,	0.9	$	65.75	0.7	$	75.53	1.1	$	53.02	0.7	$	60.64


		As of		As of
(in millions except as noted)	Balance Sheet Classification	March 31, 2023		September 30, 2022
Assets:
Operating lease assets	Operating lease right-of-use assets	$	558.1	$	539.8
Finance lease assets	Property and equipment – net		59.4		49.4
Total lease assets		$	617.5	$	589.2

Liabilities:
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	147.7	$	145.6
Finance lease liabilities	Current portion of long-term debt		21.9		18.1
Total current lease liabilities			169.6		163.7
Non-current:
Operating lease liabilities	Operating lease liabilities, noncurrent		603.1		595.3
Finance lease liabilities	Long-term debt		37.8		32.0
Total non-current lease liabilities		$	640.9	$	627.3


	Three months ended				Six months ended
	March 31,		March 31,		March 31,		March 31,
	2023		2022		2023		2022

	(in millions)
Cost reimbursable	$	1,511.3	$	1,378.9	$	3,026.2	$	2,686.5
Guaranteed maximum price		1,151.0		1,004.9		2,239.2		2,072.6
Fixed-price		827.8		829.9		1,607.1		1,721.3
Total revenue	$	3,490.1	$	3,213.7	$	6,872.5	$	6,480.4


	Three months ended				Six months ended
	March 31,		March 31,		March 31,		March 31,
	2023		2022		2023		2022

	(in millions)
Americas	$	2,630.3	$	2,400.5	$	5,209.9	$	4,864.6
Europe, Middle East, India, Africa		494.1		457.6		942.1		898.5
Asia-Australia-Pacific		365.7		355.6		720.5		717.3
Total revenue	$	3,490.1	$	3,213.7	$	6,872.5	$	6,480.4


	March 31,		September 30,
	2023		2022

	(in millions)
Billed	$	2,040.1	$	1,931.4
Contract retentions		464.1		490.4
Total accounts receivable—gross		2,504.2		2,421.8
Allowance for doubtful accounts and credit losses		(76.3)		(104.0)
Total accounts receivable—net	$	2,427.9	$	2,317.8


	March 31,
	2023		September 30,
	(unaudited)		2022

	(in millions)
Current assets	$	721.1	$	630.8
Non-current assets		74.1		73.8
Total assets	$	795.2	$	704.6

Current liabilities	$	642.5	$	530.6
Non-current liabilities		1.5		1.5
Total liabilities		644.0		532.1
Total AECOM equity		21.1		56.7
Noncontrolling interests		130.1		115.8
Total owners’ equity		151.2		172.5
Total liabilities and owners’ equity	$	795.2	$	704.6


	Operating Leases		Finance Leases

Fiscal Year	(in millions)
2023 (six months remaining)	$	90.4	$	11.9
2024		164.3		22.6
2025		137.9		16.8
2026		110.0		9.7
2027		83.3		2.3
Thereafter		278.5		0.1
Total lease payments	$	864.4	$	63.4
Less: Amounts representing interest	$	(113.6)	$	(3.7)
Total lease liabilities	$	750.8	$	59.7


			Foreign				Accumulated
	Pension		Currency		Gain/(Loss)on		Other
	Related		Translation		Derivative		Comprehensive
	Adjustments		Adjustments		Instruments		Loss
Balances at December 31, 2022	$	(232.1)	$	(721.4)	$	35.1	$	(918.4)
Other comprehensive (loss) income before reclassification		(4.2)		8.5		(5.6)		(1.3)
Amounts reclassified from accumulated other comprehensive income (loss)		0.5		—		(1.9)		(1.4)
Balances at March 31, 2023	$	(235.8)	$	(712.9)	$	27.6	$	(921.1)


							AECOM
Reportable Segments:	Americas			International			Capital		Corporate		Total

	($ in millions)
Three Months Ended March 31, 2023:
Revenue	$	2,630.2		$	859.8		$	0.1	$	—	$	3,490.1
Gross profit		173.3			54.7			0.1		—		228.1
Equity in earnings of joint ventures		4.9			5.4			(2.8)		—		7.5
General and administrative expenses		—			—			(2.9)		(31.3)		(34.2)
Restructuring costs		—			—			—		(3.9)		(3.9)
Operating income		178.2			60.1			(5.6)		(35.2)		197.5
Gross profit as a % of revenue		6.6	%		6.4	%		—		—		6.5	%

Three Months Ended March 31, 2022:
Revenue	$	2,399.9		$	813.3		$	0.5	$	—	$	3,213.7
Gross profit		160.4			49.1			0.5		—		210.0
Equity in earnings of joint ventures		3.2			5.7			3.1		—		12.0
General and administrative expenses		—			—			(2.6)		(34.6)		(37.2)
Restructuring costs		—			—			—		(73.3)		(73.3)
Operating income		163.6			54.8			1.0		(107.9)		111.5
Gross profit as a % of revenue		6.7	%		6.0	%		—		—		6.5	%

Six Months Ended March 31, 2023:
Revenue	$	5,209.5		$	1,662.6		$	0.4	$	—	$	6,872.5
Gross profit		336.2			106.5			0.4		—		443.1
Equity in earnings of joint ventures		5.8			8.7			2.8		—		17.3
General and administrative expenses		—			—			(5.6)		(64.2)		(69.8)
Restructuring costs		—			—			—		(41.4)		(41.4)
Operating income (loss)		342.0			115.2			(2.4)		(105.6)		349.2
Gross profit as a % of revenue		6.5	%		6.4	%		—		—		6.4	%

Six Months Ended March 31, 2022:
Revenue	$	4,863.4		$	1,615.7		$	1.3	$	—	$	6,480.4
Gross profit		310.4			98.5			1.3		—		410.2
Equity in earnings of joint ventures		6.4			9.3			4.2		—		19.9
General and administrative expenses		—			—			(5.6)		(68.0)		(73.6)
Restructuring costs		—			—			—		(76.7)		(76.7)
Operating income (loss)		316.8			107.8			(0.1)		(144.7)		279.8
Gross profit as a % of revenue		6.4	%		6.1	%		—		—		6.3	%


Reportable Segments:

Total assets
March 31, 2023	$	7,290.3	$	2,659.0	$	305.8	$	1,020.8
September 30, 2022	$	7,232.2	$	2,467.9	$	264.9	$	1,095.3


	For the six months ended
	March 31, 2023
Revenue	$	3,340.5

Cost of revenue		3,082.5
Gross profit		258.0

Net income from continuing operations		73.8
Net loss from discontinued operations		—
Net income	$	73.8

Net income attributable to AECOM	$	73.8


				Total Number of	Maximum
				Shares Purchased	Approximate Dollar
	Total Number			as Part of Publicly	Value that May Yet Be
	of Shares	Average Price		Announced Plans	Purchased Under the
Fiscal Period	Purchased	Paid Per Share		or Programs	Plans or Programs

January 1 - 31, 2023	—	$	—	—	$	527,050,000
February 1 - 28, 2023	—		—	—		527,050,000
March 1- 31, 2023	300,971		83.08	300,971		502,045,000
Total	300,971	$	83.08	300,971

			Incorporated by Reference
			(Exchange Act Filings Located
			at File No. 0-52423)
Exhibit				Filing	Filed
Numbers	Description	Form	Exhibit	Date	Herewith

3.1	Amended and Restated Certificate of Incorporation	Form 10-K	3.1	11/21/2011

3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation	Form S-4	3.2	8/1/2014

3.3	Certificate of Correction of Amended and Restated Certificate of Incorporation	Form 10-K	3.3	11/17/2014

3.4	Certificate of Amendment to the Certificate of Incorporation	Form 8-K	3.1	1/9/2015

3.5	Certificate of Amendment to the Certificate of Incorporation	Form 8-K	3.1	3/3/2017

3.6	Amended and Restated Bylaws of the Company	Form 8-K	3.2	11/20/2020

10.1	Employment Agreement, dated March 1, 2023, by and between AECOM and Lara Poloni				X

31.1	Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X

31.2	Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X

32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X

101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 were formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.				X

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL				X


	AECOM


Date: May 9, 2023	By:	/S/ GAURAV KAPOOR
		Gaurav Kapoor
		Chief Financial Officer

Dated: May 9, 2023
	/S/ W. TROY RUDD
	W. Troy Rudd
	Chief Executive Officer
	(Principal Executive Officer)