10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 2017

OR

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

For the transition period from            to          

Commission File Number 0-52423

AECOM

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 61-1088522
(I.R.S. Employer
Identification Number)

1999 Avenue of the Stars, Suite 2600
Los Angeles, California 90067

(Address of principal executive office and zip code)

(213) 593-8000

(Registrant’s telephone number, including area code)

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 x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes x    No o

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,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)	Emerging growth company o

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. Yes  o    No o

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

As of January 31, 2018, 159,169,121 shares of the registrant’s common stock were outstanding.

AECOM

INDEX

PART I.		FINANCIAL INFORMATION	1
	Item 1.	Financial Statements	1
		Consolidated Balance Sheets as of December 31, 2017 (unaudited) and September 30, 2017	1
		Consolidated Statements of Operations for the Three Months Ended December 31, 2017 (unaudited) and December 31, 2016 (unaudited)	2
		Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended December 31, 2017 (unaudited) and December 31, 2016 (unaudited)	3
		Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2017 (unaudited) and December 31, 2016 (unaudited)	4
		Notes to Consolidated Financial Statements (unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
	Item 4.	Controls and Procedures	39
PART II.		OTHER INFORMATION	39
	Item 1.	Legal Proceedings	39
	Item 1A.	Risk Factors	39
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
	Item 4.	Mine Safety Disclosure	52
	Item 6.	Exhibits	52
SIGNATURES			54

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

AECOM

Consolidated Balance Sheets

(in thousands, except share data)

	December 31, 2017			September 30, 2017
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	616,127		$	665,871
Cash in consolidated joint ventures	197,039			136,491
Total cash and cash equivalents	813,166			802,362
Accounts receivable—net	5,313,672			5,127,743
Prepaid expenses and other current assets	676,951			696,718
Income taxes receivable	38,251			55,399
TOTAL CURRENT ASSETS	6,842,040			6,682,222
PROPERTY AND EQUIPMENT—NET	631,601			621,357
DEFERRED TAX ASSETS—NET	216,742			171,331
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	370,294			364,223
GOODWILL	5,997,000			5,992,881
INTANGIBLE ASSETS—NET	411,759			415,096
OTHER NON-CURRENT ASSETS	153,515			149,846
TOTAL ASSETS	$	14,622,951		$	14,396,956
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	2,361		$	1,221
Accounts payable	2,426,469			2,249,872
Accrued expenses and other current liabilities	2,072,155			2,245,519
Income taxes payable	18,244			38,176
Billings in excess of costs on uncompleted contracts	995,914			902,812
Current portion of long-term debt	160,914			140,779
TOTAL CURRENT LIABILITIES	5,676,057			5,578,379
OTHER LONG-TERM LIABILITIES	296,578			322,199
DEFERRED TAX LIABILITY—NET	32,327			20,515
PENSION BENEFIT OBLIGATIONS	548,307			559,068
LONG-TERM DEBT	3,738,901			3,702,109
TOTAL LIABILITIES	10,292,170			10,182,270
COMMITMENTS AND CONTINGENCIES (Note 14)
AECOM STOCKHOLDERS’ EQUITY:
Common stock—authorized, 300,000,000 shares of $0.01 par value as of December 31 and September 30, 2017; issued and outstanding 159,132,336 and 157,529,419 shares as of December 31 and September 30, 2017, respectively	1,591			1,575
Additional paid-in capital	3,734,008			3,733,572
Accumulated other comprehensive loss	(704,184		)	(700,661		)
Retained earnings	1,072,954			961,640
TOTAL AECOM STOCKHOLDERS’ EQUITY	4,104,369			3,996,126
Noncontrolling interests	226,412			218,560
TOTAL STOCKHOLDERS’ EQUITY	4,330,781			4,214,686
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,622,951		$	14,396,956

See accompanying Notes to Consolidated Financial Statements.

1

AECOM

Consolidated Statements of Operations

(unaudited - in thousands, except per share data)

	Three Months Ended
	December 31, 2017			December 31, 2016
Revenue	$	4,910,832		$	4,358,349
Cost of revenue	4,774,680			4,188,376
Gross profit	136,152			169,973
Equity in earnings of joint ventures	29,720			21,471
General and administrative expenses	(34,670		)	(32,639		)
Acquisition and integration expenses	—			(15,412		)
Income from operations	131,202			143,393
Other income	2,283			860
Interest expense	(56,165		)	(53,637		)
Income before income tax (benefit) expense	77,320			90,616
Income tax (benefit) expense	(47,093		)	24,838
Net income	124,413			65,778
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13,099		)	(18,599		)
Net income attributable to AECOM	$	111,314		$	47,179
Net income attributable to AECOM per share:
Basic	$	0.70		$	0.31
Diluted	$	0.69		$	0.30
Weighted average shares outstanding:
Basic	157,909			154,255
Diluted	161,847			157,993

See accompanying Notes to Consolidated Financial Statements.

2

AECOM

Consolidated Statements of Comprehensive Income (Loss)

(unaudited—in thousands)

	Three Months Ended
	December 31, 2017			December 31, 2016
Net income	$	124,413		$	65,778
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	785			1,367
Foreign currency translation adjustments	(5,983		)	(73,924		)
Pension adjustments, net of tax	2,468			16,973
Other comprehensive loss, net of tax	(2,730		)	(55,584		)
Comprehensive income, net of tax	121,683			10,194
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	(13,892		)	(18,291		)
Comprehensive income (loss) attributable to AECOM, net of tax	$	107,791		$	(8,097	)

See accompanying Notes to Consolidated Financial Statements.

3

AECOM

Consolidated Statements of Cash Flows

(unaudited - in thousands)

	Three Months Ended December 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	124,413		$	65,778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	62,835			66,916
Equity in earnings of unconsolidated joint ventures	(29,720		)	(21,471		)
Distribution of earnings from unconsolidated joint ventures	39,480			24,370
Non-cash stock compensation	16,540			21,337
Foreign currency translation	(16,018		)	(15,387		)
Other	(1,800		)	(3,077		)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(186,098		)	47,064
Prepaid expenses and other assets	(12,517		)	(14,728		)
Accounts payable	172,481			55,460
Accrued expenses and other current liabilities	(135,684		)	(144,301		)
Billings in excess of costs on uncompleted contracts	93,102			26,019
Other long-term liabilities	(21,291		)	(30,473		)
Income taxes payable	(53,295		)	—
Net cash provided by operating activities	52,428			77,507
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	2,206			—
Cash acquired from consolidation of joint venture	7,630			—
Investment in unconsolidated joint ventures	(23,986		)	(18,372		)
Return of investment in unconsolidated joint ventures	5,030			239
Proceeds from sales of investments	161			300
Proceeds from disposal of property and equipment	10,967			2,557
Payments for capital expenditures	(29,510		)	(23,584		)
Net cash used in investing activities	(27,502		)	(38,860		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,276,451			1,634,781
Repayments of borrowings under credit agreements	(1,236,242		)	(1,607,380		)
Proceeds from issuance of common stock	9,530			9,875
Proceeds from exercise of stock options	2,715			2,067
Payments to repurchase common stock	(26,701		)	(17,494		)
Net distributions to noncontrolling interests	(16,795		)	(21,938		)
Other financing activities	(25,962		)	(26,280		)
Net cash used in financing activities	(17,004		)	(26,369		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	2,882			(6,706		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	10,804			5,572
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	802,362			692,145
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	813,166		$	697,717

See accompanying Notes to Consolidated Financial Statements.

4

AECOM

Notes to Consolidated Financial Statements

(unaudited)

1.Basis of Presentation

The accompanying consolidated financial statements of AECOM (the Company) are unaudited and, in the opinion of management, include all adjustments, including all normal recurring items necessary for a fair statement of the Company’s financial position and results of operations for the periods presented. All intercompany balances and transactions are eliminated in consolidation.

The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended September 30, 2017 (the Annual Report). The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The consolidated financial statements included in this report have been prepared consistently with the accounting policies described in the Annual Report and should be read together with the Annual Report.

The results of operations for the three months ended December 31, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2018.

The Company reports its annual results of operations based on 52 or 53-week periods ending on the Friday nearest September 30. The Company reports its quarterly results of operations based on periods ending on the Friday nearest December 31, March 31, and June 30. For clarity of presentation, all periods are presented as if the periods ended on September 30, December 31, March 31, and June 30.

2.New Accounting Pronouncements and Changes in Accounting

In May 2014, the Financial Accounting Standards Board (FASB) issued new accounting guidance which amended the existing accounting standards for revenue recognition. The new accounting guidance establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company continues to evaluate the impact of the new guidance on its consolidated financial statements, including the expected impact on its business processes, systems, and controls, and potential differences in the timing or method of revenue recognition for its contracts. The Company expects to adopt the new standard on October 1, 2018, using the modified retrospective method that may result in a cumulative effect adjustment as of the date of adoption.

In February 2016, the FASB issued new accounting guidance which changes accounting requirements for leases. The new guidance requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet. It also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. The new guidance will be effective for the Company’s fiscal year beginning October 1, 2019 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.

In February 2016, the FASB issued new accounting guidance to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under previous guidance does not, in and of itself, require redesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued new accounting guidance which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

5

In June 2016, the FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. The new guidance will replace the current “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The guidance will be effective for the Company’s fiscal year starting October 1, 2020. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.

In August 2016, the FASB issued new accounting guidance clarifying how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new guidance will be effective for the Company in its fiscal year beginning October 1, 2018, and early adoption is permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated statement of cash flows.

In October 2016, the FASB issued additional guidance on how a single decision maker considers its indirect interests when performing the primary beneficiary analysis under the variable interest model.  Under the new guidance, the single decision maker will consider its indirect interests on a proportionate basis.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued new accounting guidance to simplify the test for goodwill impairment. This guidance eliminates step two from the goodwill impairment test. Under the new guidance, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. This guidance is effective for the Company in the first quarter of fiscal 2021, and earlier adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

3.Business Acquisitions, Goodwill and Intangible Assets

The Company completed one acquisition during the three months ended December 31, 2017, and two acquisitions during the year ended September 30, 2017 for a total consideration of $5.6 million and $164.4 million, respectively. The business combinations did not meet the quantitative thresholds to require separate disclosures based on the Company’s consolidated net assets, investments and net income. The acquisitions were accounted for under the purchase method of accounting. As such, the purchase considerations were allocated to acquired tangible and intangible assets and liabilities based upon their fair values. The determination of fair values of assets and liabilities acquired requires the Company to make estimates and use valuation techniques when market value is not readily available. Transaction costs associated with business acquisitions are expensed as they are incurred.

On October 17, 2014, the Company completed the acquisition of the U.S. headquartered URS Corporation (URS), an international provider of engineering, construction, and technical services, by purchasing 100% of the outstanding shares of URS common stock. The Company paid total consideration of approximately $2.3 billion in cash and issued approximately $1.6 billion of AECOM common stock to the former stockholders and certain equity award holders of URS. In connection with the acquisition, the Company also assumed URS’s senior notes totaling $0.4 billion, net of Company repayments. The Company repaid in full URS’s $0.6 billion 2011 term loan and $0.1 billion of URS’s revolving line of credit.

The Company acquired backlog and customer relationship intangible assets valued at $973.8 million representing the fair value of existing contracts and the underlying customer relationships, that have lives ranging from 1 to 11 years (weighted average lives of approximately 3 years) in connection with the URS acquisition. Acquired accrued expenses and other current liabilities include URS project liabilities and approximately $240 million related to estimated URS legal settlements and uninsured legal damages; see Note 14, Commitments and Contingencies, including legal matters related to former URS affiliates.

Amortization of intangible assets relating to URS, included in cost of revenue, was $18.2 million and $20.9 million during the three months ended December 31, 2017 and 2016, respectively. Additionally, included in equity in earnings of joint ventures and noncontrolling interests was intangible amortization expense of $1.9 million and ($2.1) million, respectively, during the three months ended December 31, 2017 and $2.0 million and ($2.1) million, respectively, during the three months ended December 31, 2016 related to joint venture fair value adjustments.

Billings in excess of costs on uncompleted contracts includes a margin fair value liability associated with long-term contracts acquired in connection with the acquisition of URS. This margin fair value liability was $149.1 million at the acquisition date and its carrying value was $7.5 million at December 31, 2017 and $8.6 million at September 30, 2017, and is recognized as revenue on a percentage-of-completion basis as the applicable projects progress. The majority of this liability was recognized over the first two years from the acquisition date. Revenue and the related income from operations related to the margin fair value liability recognized during the three months ended December 31, 2017 and 2016 was $1.1 million and $1.6 million, respectively.

6

Acquisition and integration expenses, relating to business acquisitions, in the accompanying consolidated statements of operations comprised of the following:

	Three months ended Dec 31,
	2017		2016
	(in millions)
Severance and personnel costs	$	—	$	11.5
Professional service, real estate-related, and other expenses	—		3.9
Total	$	—	$	15.4

Included in severance and personnel costs for the three months ended December 31, 2016 was $8.7 million of severance expenses, which was substantially all  paid as of December 31, 2017. All acquisition and integration expenses are classified within the Corporate segment, as presented in Note 15.

The changes in the carrying value of goodwill by reportable segment for the three months ended December 31, 2017 were as follows:

	September 30, 2017		Acquisitions		Measurement Period Adjustments			Foreign Exchange Impact			December 31, 2017
	(in millions)
Design and Consulting Services	$	3,218.9	$	—	$	—		$	4.3		$	3,223.2
Construction Services	1,049.9		—		(2.3		)	(1.6		)	1,046.0
Management Services	1,724.1		—		—			3.7			1,727.8
Total	$	5,992.9	$	—	$	(2.3	)	$	6.4		$	5,997.0

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of December 31 and September 30, 2017, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows:

	December 31, 2017							September 30, 2017
	Gross Amount		Accumulated Amortization			Intangible Assets, Net		Gross Amount		Accumulated Amortization			Intangible Assets, Net		Amortization Period
	(in millions)														(years)
Backlog and customer relationships	$	1,304.0	$	(893.7	)	$	410.3	$	1,283.6	$	(870.2	)	$	413.4	1 – 11
Trademark / tradename	18.3		(16.8		)	1.5		18.3		(16.6		)	1.7		0.3 - 2
Total	$	1,322.3	$	(910.5	)	$	411.8	$	1,301.9	$	(886.8	)	$	415.1

Amortization expense of acquired intangible assets included within cost of revenue was $23.7 million and $25.4 million for the three months ended December 31, 2017 and 2016, respectively. The following table presents estimated amortization expense of existing intangible assets for the remainder of fiscal 2018 and for the succeeding years:

Fiscal Year	(in millions)
2018 (nine months remaining)	$	71.0
2019	87.8
2020	73.7
2021	62.8
2022	49.7
Thereafter	66.8
Total	$	411.8

7

4.Accounts Receivable—Net

Net accounts receivable consisted of the following:

	December 31, 2017			September 30, 2017
	(in millions)
Billed	$	2,511.6		$	2,317.8
Unbilled	2,254.5			2,293.5
Contract retentions	598.9			568.6
Total accounts receivable—gross	5,365.0			5,179.9
Allowance for doubtful accounts	(51.3		)	(52.2		)
Total accounts receivable—net	$	5,313.7		$	5,127.7

Billed accounts receivable represents amounts billed to clients that have yet to be collected. Unbilled accounts receivable represents the contract revenue recognized but not yet billed pursuant to contract terms or accounts billed after the period end. Substantially all unbilled receivables as of December 31, 2017 and September 30, 2017 are expected to be billed and collected within twelve months. Contract retentions represent amounts invoiced to clients where payments have been withheld pending the completion of certain milestones, other contractual conditions, or upon the completion of a project. These retention agreements vary from project to project and could be outstanding for several months or years.

Allowances for doubtful accounts have been determined through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience.

Other than the U.S. government, no single client accounted for more than 10% of the Company’s outstanding receivables at December 31, 2017 and September 30, 2017.

The Company sold trade receivables to financial institutions, of which $314.7 million and $325.2 million were outstanding as of December 31, 2017 and September 30, 2017, respectively. The Company does not retain financial or legal obligations for these receivables that would result in material losses. The Company’s ongoing involvement is limited to the remittance of customer payments to the financial institutions with respect to the sold trade receivables.

5.Joint Ventures and Variable Interest Entities

The Company’s joint ventures provide architecture, engineering, program management, construction management, operations and maintenance services, and invests in real estate, public-private partnership (P3) and infrastructure projects. Joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is typically controlled by a joint venture executive committee, comprised of representatives from the joint venture partners. The joint venture executive committee normally provides management oversight and controls decisions which could have a significant impact on the joint venture.

Some of the Company’s joint ventures have no employees and minimal operating expenses. For these joint ventures, the Company’s employees perform work for the joint venture, which is then billed to a third-party customer by the joint venture. These joint ventures function as pass through entities to bill the third-party customer. For consolidated joint ventures of this type, the Company records the entire amount of the services performed and the costs associated with these services, including the services provided by the other joint venture partners, in the Company’s result of operations. For certain of these joint ventures where a fee is added by an unconsolidated joint venture to client billings, the Company’s portion of that fee is recorded in equity in earnings of joint ventures.

The Company also has joint ventures that have their own employees and operating expenses, and to which the Company generally makes a capital contribution. The Company accounts for these joint ventures either as consolidated entities or equity method investments based on the criteria further discussed below.

8

The Company follows guidance on the consolidation of variable interest entities (VIEs) that requires companies to utilize a qualitative approach to determine whether it is the primary beneficiary of a VIE. The process for identifying the primary beneficiary of a VIE requires consideration of the factors that indicate a party has the power to direct the activities that most significantly impact the joint venture’s economic performance, including powers granted to the joint venture’s program manager, powers contained in the joint venture governing board and, to a certain extent, a company’s economic interest in the joint venture. The Company analyzes its joint ventures and classifies them as either:

·a VIE that must be consolidated because the Company is the primary beneficiary or the joint venture is not a VIE and the Company holds the majority voting interest with no significant participative rights available to the other partners; or

·a VIE that does not require consolidation and is treated as an equity method investment because the Company is not the primary beneficiary or the joint venture is not a VIE and the Company does not hold the majority voting interest.

As part of the above analysis, if it is determined that the Company has the power to direct the activities that most significantly impact the joint venture’s economic performance, the Company considers whether or not it has the obligation to absorb losses or rights to receive benefits of the VIE that could potentially be significant to the VIE.

Contractually required support provided to the Company’s joint ventures is further discussed in Note 14.

Summary of unaudited financial information of the consolidated joint ventures is as follows:

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	914.6	$	832.1
Non-current assets	203.3		188.8
Total assets	$	1,117.9	$	1,020.9
Current liabilities	$	647.8	$	524.9
Non-current liabilities	12.4		12.4
Total liabilities	660.2		537.3
Total AECOM equity	241.6		274.7
Noncontrolling interests	216.1		208.9
Total owners’ equity	457.7		483.6
Total liabilities and owners’ equity	$	1,117.9	$	1,020.9

Total revenue of the consolidated joint ventures was $623.0 million and $456.9 million for the three months ended December 31, 2017 and 2016, respectively. The assets of the Company’s consolidated joint ventures are restricted for use only by the particular joint venture and are not available for the general operations of the Company.

Summary of unaudited financial information of the unconsolidated joint ventures is as follows:

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	2,069.6	$	1,912.2
Non-current assets	787.5		749.8
Total assets	$	2,857.1	$	2,662.0
Current liabilities	$	1,726.4	$	1,570.2
Non-current liabilities	177.0		185.1
Total liabilities	1,903.4		1,755.3
Joint ventures’ equity	953.7		906.7
Total liabilities and joint ventures’ equity	$	2,857.1	$	2,662.0
AECOM’s investment in joint ventures	$	370.3	$	364.2

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Revenue	$	1,478.6	$	1,142.0
Cost of revenue	1,395.2		1,085.8
Gross profit	$	83.4	$	56.2
Net income	$	82.1	$	54.3

9

Summary of AECOM’s equity in earnings of unconsolidated joint ventures is as follows:

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Pass through joint ventures	$	13.2	$	7.5
Other joint ventures	16.5		13.9
Total	$	29.7	$	21.4

6.Pension Benefit Obligations

In the U.S., the Company sponsors various qualified defined benefit pension plans. Benefits under these plans generally are based on the employee’s years of creditable service and compensation; however, all U.S. defined benefit plans are closed to new participants and have frozen accruals.

The Company also sponsors various non-qualified plans in the U.S.; all of these plans are frozen. Outside the U.S., the Company sponsors various pension plans, which are appropriate to the country in which the Company operates, some of which are government mandated.

The following table details the components of net periodic cost for the Company’s pension plans for the three months ended December 31, 2017 and 2016:

	Three Months Ended
	December 31, 2017						December 31, 2016
	U.S.			Int’l			U.S.			Int’l
	(in millions)
Components of net periodic (benefit) cost:
Service costs	$	1.2		$	0.3		$	1.1		$	0.3
Interest cost on projected benefit obligation	5.2			7.9			4.8			7.0
Expected return on plan assets	(7.9		)	(10.7		)	(7.8		)	(10.2		)
Amortization of prior service cost	—			—			—			(0.1		)
Amortization of net loss	1.0			2.0			1.1			3.2
Settlement loss recognized	—			0.1			—			—
Net periodic (benefit) cost	$	(0.5	)	$	(0.4	)	$	(0.8	)	$	0.2

The total amounts of employer contributions paid for the three months ended December 31, 2017 were $2.5 million for U.S. plans and $6.8 million for non-U.S. plans. The expected remaining scheduled annual employer contributions for the fiscal year ending September 30, 2018 are $10.2 million for U.S. plans and $19.9 million for non-U.S. plans.

7.Debt

Debt consisted of the following:

	December 31, 2017			September 30, 2017
	(in millions)
2014 Credit Agreement	$	962.3		$	908.7
2014 Senior Notes	1,600.0			1,600.0
2017 Senior Notes	1,000.0			1,000.0
URS Senior Notes	247.8			247.7
Other debt	141.6			140.0
Total debt	3,951.7			3,896.4
Less: Current portion of debt and short-term borrowings	(163.3		)	(142.0		)
Less: Unamortized debt issuance costs	(49.5		)	(52.3		)
Long-term debt	$	3,738.9		$	3,702.1

10

The following table presents, in millions, scheduled maturities of the Company’s debt as of December 31, 2017:

Fiscal Year
2018 (nine months remaining)	$	109.7
2019	152.2
2020	123.0
2021	686.9
2022	258.2
Thereafter	2,621.7
Total	$	3,951.7

2014 Credit Agreement

The Company entered into a credit agreement (Credit Agreement) on October 17, 2014, as amended, consisting of (i) a term loan A facility in an aggregate principal amount of $1.925 billion, (ii) a term loan B facility in an aggregate principal amount of $0.76 billion, and (iii) a revolving credit facility in an aggregate principal amount of $1.05 billion. These facilities under the Credit Agreement may be increased by an additional amount of up to $500 million. The Credit Agreement’s term extends to September 29, 2021 with respect to the revolving credit facility and the term loan A facility and October 17, 2021 with respect to the term loan B facility, although the term loan B facility was paid in full on February 21, 2017. Some subsidiaries of the Company (Guarantors) have guaranteed the obligations of the borrowers under the Credit Agreement. The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of the assets of the Company and the Guarantors pursuant to a security and pledge agreement (Security Agreement). The collateral under the Security Agreement is subject to release upon fulfillment of certain conditions specified in the Credit Agreement and Security Agreement.

The Credit Agreement contains covenants that limit the ability of the Company and the ability of certain of its subsidiaries to, among other things: (i) create, incur, assume, or suffer to exist liens; (ii) incur or guarantee indebtedness; (iii) pay dividends or repurchase stock; (iv) enter into transactions with affiliates; (v) consummate asset sales, acquisitions or mergers; (vi) enter into certain types of burdensome agreements; or (vii) make investments.

On July 1, 2015, the Credit Agreement was amended to revise the definition of “Consolidated EBITDA” to increase the allowance for acquisition and integration expenses related to the acquisition of URS.

On December 22, 2015, the Credit Agreement was amended to further revise the definition of “Consolidated EBITDA” by further increasing the allowance for acquisition and integration expenses related to the acquisition of URS and to allow for an internal corporate restructuring primarily involving its international subsidiaries.

On September 29, 2016, the Credit Agreement and the Security Agreement were amended to (1) lower the applicable interest rate margins for the term loan A and the revolving credit facilities, and lower the applicable letter of credit fees and commitment fees to the revised consolidated leverage levels; (2) extend the term of the term loan A and the revolving credit facility to September 29, 2021; (3) add a new delayed draw term loan A facility tranche in the amount of $185.0 million; (4) replace the then existing $500 million performance letter of credit facility with a $500 million basket to enter into secured letters of credit outside the Credit Agreement; and (5) revise certain covenants, including the Maximum Consolidated Leverage Ratio so that the step down from a 5.00 to a 4.75 leverage ratio is effective as of March 31, 2017 as well as the investment basket for its AECOM Capital business.

On March 31, 2017, the Credit Agreement was amended to (1) expand the ability of restricted subsidiaries to borrow under “Incremental Term Loans;” (2) revise the definition of “Working Capital” as used in “Excess Cash Flow;” (3) revise the definitions for “Consolidated EBITDA” and “Consolidated Funded Indebtedness” to reflect the expected gain and debt repayment of an AECOM Capital disposition, which disposition was completed on April 28, 2017; and (4) amend provisions relating to the Company’s ability to undertake certain internal restructuring steps to accommodate changes in tax laws.

Under the Credit Agreement, the Company is subject to a maximum consolidated leverage ratio and minimum consolidated interest coverage ratio at the end of each fiscal quarter. The Company’s Consolidated Leverage Ratio was 4.0 at December 31, 2017. The Company’s Consolidated Interest Coverage Ratio was 4.7 at December 31, 2017. As of December 31, 2017, the Company was in compliance with the covenants of the Credit Agreement.

At December 31, 2017 and September 30, 2017, outstanding standby letters of credit totaled $54.8 million and $58.1 million, respectively, under the Company’s revolving credit facilities. As of December 31, 2017 and September 30, 2017, the Company had $915.2 million and $991.9 million, respectively, available under its revolving credit facility.

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2014 Senior Notes

On October 6, 2014, the Company completed a private placement offering of $800,000,000 aggregate principal amount of its unsecured 5.750% Senior Notes due 2022 (2022 Notes) and $800,000,000 aggregate principal amount of its unsecured 5.875% Senior Notes due 2024 (the 2024 Notes and, together with the 2022 Notes, the 2014 Senior Notes).

As of December 31, 2017, the estimated fair value of its 2014 Senior Notes was approximately $834.0 million for the 2022 Notes and $866.0 million for the 2024 Notes. The fair value of the 2014 Senior Notes as of December 31, 2017 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 2014 Senior Notes.

The Company may redeem the 2022 Notes, in whole or in part, at once or over time, at the specified redemption prices plus accrued and unpaid interest thereon to the redemption date. At any time prior to July 15, 2024, the Company may redeem on one or more occasions all or part of the 2024 Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a “make-whole” premium as of the date of the redemption, plus any accrued and unpaid interest to the date of redemption. In addition, on or after July 15, 2024, the 2024 Notes may be redeemed at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption.

The indenture pursuant to which the 2014 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

On November 2, 2015, the Company completed an exchange offer to exchange the unregistered 2014 Senior Notes for registered notes, as well as all related guarantees.

The Company was in compliance with the covenants relating to the 2014 Senior Notes as of December 31, 2017.

2017 Senior Notes

On February 21, 2017, the Company completed a private placement offering of $1,000,000,000 aggregate principal amount of its unsecured 5.125% Senior Notes due 2027 (the 2017 Senior Notes) and used the note proceeds to immediately retire the remaining $127.6 million outstanding on the term loan B facility as well as repay $600 million of the term loan A facility and $250 million of the revolving credit facility under its Credit Agreement.

As of December 31, 2017, the estimated fair value of the Company’s 2017 Senior Notes was approximately $1,017.5 million. The fair value of the Company’s 2017 Senior Notes as of December 31, 2017 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 2017 Senior Notes. Interest will be payable on the 2017 Senior Notes at a rate of 5.125% per annum. Interest on the 2017 Senior Notes will be payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017. The 2017 Senior Notes will mature on March 15, 2027.

At any time and from time to time prior to December 15, 2026, the Company may redeem all or part of the 2017 Senior Notes, at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date.

In addition, at any time and from time to time prior to March 15, 2020, the Company may redeem up to 35% of the original aggregate principal amount of the 2017 Senior Notes with the proceeds of one or more qualified equity offerings, at a redemption price equal to 105.125%, plus accrued and unpaid interest. Furthermore, at any time on or after December 15, 2026, the Company may redeem on one or more occasions all or part of the 2017 Senior Notes at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest.

The indenture pursuant to which the 2017 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

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

The Company was in compliance with the covenants relating to its 2017 Senior Notes as of December 31, 2017.

12

URS Senior Notes

In connection with the URS acquisition, the Company assumed URS 3.85% Senior Notes due 2017 (2017 URS Senior Notes) and the URS 5.00% Senior Notes due 2022 (2022 URS Senior Notes), totaling $1.0 billion (URS Senior Notes). The URS acquisition triggered change in control provisions in the URS Senior Notes that allowed the holders of the URS Senior Notes to redeem their URS Senior Notes at a cash price equal to 101% of the principal amount and, accordingly, the Company redeemed $572.3 million of the URS Senior Notes on October 24, 2014. The remaining 2017 URS Senior Notes matured and were fully redeemed on April 3, 2017 for $179.2 million using proceeds from a $185 million delayed draw term loan A facility tranche under the Credit Agreement. The 2022 URS Senior Notes are general unsecured senior obligations of AECOM Global II, LLC (as successor in interest to URS) and are fully and unconditionally guaranteed on a joint-and-several basis by certain former URS domestic subsidiary guarantors.

As of December 31, 2017, the estimated fair value of the 2022 URS Senior Notes was approximately $258.5 million. The carrying value of the 2022 URS Senior Notes on the Company’s Consolidated Balance Sheets as of December 31, 2017 was $247.8 million. The fair value of the 2022 URS Senior Notes as of December 31, 2017 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 2022 URS Senior Notes.

As of December 31, 2017, the Company was in compliance with the covenants relating to the 2022 URS Senior Notes.

Other Debt

Other debt consists primarily of obligations under capital leases and loans, and unsecured credit facilities. The Company’s unsecured credit facilities are primarily used for standby letters of credit issued for payment of performance guarantees. At December 31, 2017 and September 30, 2017, these outstanding standby letters of credit totaled $460.9 million and $445.7 million, respectively. As of December 31, 2017, the Company had $489.4 million available under these unsecured credit facilities.

Effective Interest Rate

The Company’s average effective interest rate on its total debt, including the effects of the interest rate swap agreements, during the three months ended December 31, 2017 and 2016 was 4.8% and 4.2%, respectively.

Interest expense in the consolidated statements of operations for the three months ended December 31, 2017 and December 31, 2016 included amortization of deferred debt issuance costs of $2.9 million and $2.8 million, respectively.

8.Derivative Financial Instruments and Fair Value Measurements

The Company uses certain interest rate derivative contracts to hedge interest rate exposures on the Company’s variable rate debt. The Company enters into foreign currency derivative contracts with financial institutions to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company’s hedging program is not designated for trading or speculative purposes.

The Company recognizes derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as accounting hedges in the accompanying consolidated statements of operations as cost of revenue, interest expense or to accumulated other comprehensive loss in the accompanying consolidated balance sheets.

Cash Flow Hedges

The Company uses interest rate swap agreements designated as cash flow hedges to fix the variable interest rates on portions of the Company’s debt. The Company also uses foreign currency contracts designated as cash flow hedges to hedge forecasted revenue transactions denominated in currencies other than the U.S. dollar. The Company initially reports any gain on the effective portion of a cash flow hedge as a component of accumulated other comprehensive loss. Depending on the type of cash flow hedge, the gain is subsequently reclassified to either interest expense when the interest expense on the variable rate debt is recognized, or to cost of revenue when the hedged revenues are recorded. If the hedged transaction becomes probable of not occurring, any gain or loss related to interest rate swap agreements or foreign currency contracts would be recognized in other income (expense). Further, the Company excludes the change in the time value of the foreign currency contracts from the assessment of hedge effectiveness. The Company records the premium paid or time value of a contract on the date of purchase as an asset. Thereafter, the Company recognizes any change to this time value in cost of revenue.

13

The notional principal, fixed rates and related expiration dates of the Company’s outstanding interest rate swap agreements were as follows:

December 31, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

September 30, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

The notional principal of outstanding foreign currency contracts to purchase Australian dollars (AUD) was AUD 13.2 million (or $9.9 million) and AUD 15.1 million (or $11.3 million) at December 31, 2017 and September 30, 2017, respectively.

Other Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts which are not designated as accounting hedges to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these contracts were not material for the three months ended December 31, 2017 and 2016.

Fair Value Measurements

The Company’s non-pension financial assets and liabilities recorded at fair values relate to derivative instruments and were not material at December 31, 2017 or 2016.

See Note 13 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive income or loss for the three months ended December 31, 2017 and 2016. Amounts recognized in accumulated other comprehensive loss from the Company’s foreign currency contracts were immaterial for all periods presented. Amounts reclassified from accumulated other comprehensive loss into income from the foreign currency options were immaterial for all periods presented. Additionally, there were no losses recognized in income due to amounts excluded from effectiveness testing from the Company’s interest rate swap agreements.

During the year ended September 30, 2015, the Company entered into a contingent consideration arrangement in connection with a business acquisition. Under the arrangement, the Company agreed to pay cash to the sellers if certain financial performance thresholds are achieved in the future. The fair value of the contingent consideration liability, net of amounts paid, as of December 31, 2017 and September 30, 2017 was $12 million and $13 million, respectively. This liability is a Level 3 fair value measurement recorded within other accrued liabilities, and was valued based on estimated future net cash flows. Any future changes in the fair value of this contingent consideration liability will be recognized in earnings during the applicable period.

9.Share-based Payments

The fair value of the Company’s employee stock option awards is estimated on the date of grant. The expected term of awards granted represents the period of time the awards are expected to be outstanding. The risk-free interest rate is based on U.S. Treasury bond rates with maturities equal to the expected term of the option on the grant date. The Company uses historical data as a basis to estimate the probability of forfeitures.

14

Stock option activity for the three months ended December 31 was as follows:

	2017				2016
	Shares of stock under options		Weighted average exercise price		Shares of stock under options		Weighted average exercise price
	(in millions)				(in millions)
Outstanding at September 30	0.7		$	31.11	0.9		$	30.36
Options granted	—		—		—		—
Options exercised	(0.1	)	27.67		(0.1	)	25.46
Options forfeited or expired	—		—		—		—
Outstanding at December 31	0.6		31.54		0.8		30.86
Vested and expected to vest in the future as of December 31	0.6		$	31.54	0.8		$	30.86

The Company grants stock units to employees under its Performance Earnings Program (PEP), whereby units are earned and issued dependent upon meeting established cumulative performance objectives and vest over a three-year service period. Additionally, the Company issues restricted stock units to employees which are earned based on service conditions. The grant date fair value of PEP awards and restricted stock unit awards is that day’s closing market price of the Company’s common stock. The weighted average grant date fair value of PEP awards were $37.90 and $38.16 during the three months ended December 31, 2017 and 2016, respectively. The weighted average grant date fair value of restricted stock unit awards were $36.93 and $38.08 during the three months ended December 31, 2017 and 2016, respectively. Total compensation expense related to these share-based payments including stock options were $16.5 million and $21.3 million during the three months ended December 31, 2017 and 2016, respectively. Unrecognized compensation expense related to total share-based payments outstanding as of December 31, 2017 and September 30, 2017 were $148.5 million and $96.8 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years.

10.Income Taxes

During the quarter ended December 31, 2017, President Trump signed what is commonly referred to as The Tax Cuts and Jobs Act (Tax Act) into law. The Tax Act reduces the Company’s U.S. federal corporate tax rate from 35% to a blended tax rate of 24.5% for the Company’s fiscal year ending September 30, 2018 and 21% for fiscal years thereafter, requires companies to pay a one-time transition tax on accumulated earnings of foreign subsidiaries, creates new taxes on certain foreign sourced earnings and eliminates or reduces certain deductions.

Given the significance of the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

At December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Tax Act; however, the Company made a reasonable estimate of the effects on its existing deferred tax balances and certain other assets and liabilities and the one-time transition tax. The Company has not been able to make a reasonable estimate of the impact on its indefinite reinvestment of earnings of certain foreign subsidiaries and therefore will continue to account for those items based on its existing accounting under ASC 740.  As further guidance and accounting interpretations are expected over the next 12 months, the Company’s analysis is considered incomplete.

Other significant provisions include a base erosion anti-abuse tax (BEAT) on excessive amounts paid to foreign related parties and a minimum tax on global intangible low-taxed income (GILTI).  The Company has not elected a method of accounting for BEAT and GILTI and will only do so after completion of the analysis of the provisions and the impact to the Company.

The Company’s effective tax rate was (60.9)% and 27.4% for the three months ended December 31, 2017 and 2016, respectively. The most significant items contributing to the difference between the statutory U.S. federal income tax rate of 24.5% and the Company’s effective tax rate for the three month period ended December 31, 2017 were a $41.7 million net benefit related to one-time U.S. federal tax law changes, a benefit of $11.2 million related to changes in uncertain tax positions primarily in the U.S. and Canada, and a benefit of $8.4 million related to income tax credits and incentives. These items are not expected to have a continuing impact on the effective tax rate for the remainder of the fiscal year except for the benefits related to income tax credits and incentives.

15

The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Tax Act and refining its calculations which could potentially affect the measurement of these balances. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balance was a $36.1 million tax benefit. In addition, the Company released the deferred tax liability and recorded a tax benefit of $77.0 million related to certain foreign subsidiaries for which the undistributed earnings are not intended to be reinvested indefinitely and accrued current tax on these earnings as part of the one-time transition tax.

The Company recorded a provisional amount for the one-time transition tax liability for its foreign subsidiaries resulting in an increase in income tax expense of $71.4 million. The Company has not yet completed its calculation of the total foreign earnings and profits of its foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets at the end of the fiscal year. This amount may change when the Company finalizes the calculation of foreign earnings and finalize the amounts held in cash or other specified assets.

The Company is utilizing the annual effective tax rate method under ASC 740 to compute its interim tax provision. The Company’s effective tax rate fluctuates from quarter to quarter due to various factors including the change in the mix of global income and expenses, outcomes of administrative audits, changes in the assessment of valuation allowances due to management’s consideration of new positive or negative evidence during the quarter, and changes in enacted tax laws and their interpretations which upon enactment include possible tax reform around the world arising from the result of the base erosion and profit shifting project undertaken by the Organisation for Economic Co-operation Development which, if finalized and adopted, could have a material impact on the Company’s income tax expense and deferred tax balances.

The Company believes the outcomes which are reasonably possible within the next twelve months, including lapses in statutes of limitations, could result in a decrease of approximately $15 million in the liability for uncertain tax positions.

Generally, the Company does not provide for U.S. taxes or foreign withholding taxes on gross book-tax differences in its non-U.S. subsidiaries because such basis differences of approximately $1.7 billion are able to and intended to be reinvested indefinitely. At December 31, 2017 the Company has not determined whether it will continue to indefinitely reinvest the earnings of certain foreign subsidiaries and therefore will continue to account for these undistributed earnings based on existing accounting under ASC 740 and not accrue additional tax outside of the one-time transition tax described above. There may also be additional U.S. or foreign income tax liability upon repatriation, although the calculation of such additional taxes is not practicable.

11.Earnings Per Share

Basic earnings per share (EPS) excludes dilution and is computed by dividing net income attributable to AECOM by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income attributable to AECOM by the weighted average number of common shares outstanding and potential common shares for the period. The Company includes as potential common shares the weighted average dilutive effects of equity awards using the treasury stock method. For the three months ended December 31, 2017 and 2016, equity awards excluded from the calculation of potential common shares were not significant.

The following table sets forth a reconciliation of the denominators for basic and diluted earnings per share:

	Three Months Ended
	December 31, 2017	December 31, 2016
	(in millions)
Denominator for basic earnings per share	157.9	154.3
Potential common shares	3.9	3.7
Denominator for diluted earnings per share	161.8	158.0

12.Other Financial Information

Accrued expenses and other current liabilities consist of the following:

	December 31, 2017		September 30, 2017
	(in millions)
Accrued salaries and benefits	$	900.8	$	1,018.5
Accrued contract costs	833.5		911.9
Other accrued expenses	337.9		315.1
	$	2,072.2	$	2,245.5

16

Accrued contract costs above include balances related to professional liability accruals of $537.7 million and $547.9 million as of December 31, 2017 and September 30, 2017, respectively. The remaining accrued contract costs primarily relate to costs for services provided by subcontractors and other non-employees. Liabilities recorded related to accrued contract losses were not material as of December 31, 2017 and September 30, 2017.  The Company did not have material revisions to estimates for contracts where revenue is recognized using the percentage-of-completion method during the three months ended December 31, 2017.  The Company incurred $22.4 million of primarily severance expenses relating to restructuring activities during the three months ended December 31, 2017, of which $9.6 million was paid as of December 31, 2017.

During the twelve months ended September 30, 2016, the Company recorded revenue related to the expected accelerated recovery of a pension related entitlement from the federal government of approximately $50 million, which is included in accounts receivable-net at December 31, 2017. The entitlement resulted from pension costs that are reimbursable through certain government contracts in accordance with Cost Accounting Standards. The accelerated recognition resulted from an amendment to freeze pension benefits under URS Federal Services, Inc. Employees Retirement Plan. The actual amount of reimbursement may vary from the Company’s expectation.

13.Reclassifications out of Accumulated Other Comprehensive Loss

The accumulated balances and reporting period activities for the three months ended December 31, 2017 and 2016 related to reclassifications out of accumulated other comprehensive loss are summarized as follows (in millions):

	Pension Related Adjustments			Foreign Currency Translation Adjustments			(Loss)/Gain on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2017	$	(281.9	)	$	(418.4	)	$	(0.4	)	$	(700.7	)
Other comprehensive (loss) income before reclassification	—			(6.8		)	0.5			(6.3		)
Amounts reclassified from accumulated other comprehensive income (loss)	2.5			—			0.3			2.8
Balances at December 31, 2017	$	(279.4	)	$	(425.2	)	$	0.4		$	(704.2	)

	Pension Related Adjustments			Foreign Currency Translation Adjustments			Loss on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2016	$	(368.9	)	$	(483.7	)	$	(5.0	)	$	(857.6	)
Other comprehensive (loss) income before reclassification	13.7			(73.5		)	0.7			(59.1		)
Amounts reclassified from accumulated other comprehensive loss	3.2			—			0.6			3.8
Balances at December 31, 2016	$	(352.0	)	$	(557.2	)	$	(3.7	)	$	(912.9	)

14.Commitments and Contingencies

The Company records amounts representing its probable estimated liabilities relating to claims, guarantees, litigation, audits and investigations. The Company relies in part on qualified actuaries to assist it in determining the level of reserves to establish for insurance-related claims that are known and have been asserted against it, and for insurance-related claims that are believed to have been incurred based on actuarial analysis, but have not yet been reported to the Company’s claims administrators as of the respective balance sheet dates. The Company includes any adjustments to such insurance reserves in its consolidated results of operations. The Company’s reasonably possible loss disclosures are presented on a gross basis prior to the consideration of insurance recoveries. The Company does not record gain contingencies until they are realized. In the ordinary course of business, the Company may not be aware that it or its affiliates are under investigation and may not be aware of whether or not a known investigation has been concluded.

In the ordinary course of business, the Company may enter into various arrangements providing financial or performance assurance to clients, lenders, or partners. Such arrangements include standby letters of credit, surety bonds, and corporate guarantees to support the creditworthiness or the project execution commitments of its affiliates, partnerships and joint ventures. Performance arrangements typically have various expiration dates ranging from the completion of the project contract and extending beyond contract completion in certain circumstances such as for warranties. The Company may also guarantee that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, the Company may incur additional costs, pay liquidated damages or be held responsible for the costs incurred by the client to achieve the required performance standards. The potential payment amount of an outstanding performance arrangement is typically the remaining cost of work to be performed by or on behalf of third parties. Generally, under joint venture arrangements, if a partner is financially unable to complete its share of the contract, the other partner(s) may be required to complete those activities.

17

At December 31, 2017 and September 30, 2017, the Company was contingently liable in the amount of approximately $515.7 million and $503.8 million, respectively, in issued standby letters of credit and $5.7 billion and $5.7 billion, respectively, in issued surety bonds primarily to support project execution.

In the ordinary course of business, the Company enters into various agreements providing financial or performance assurances to clients on behalf of certain unconsolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities.

In addition, in connection with the investment activities of AECOM Capital, the Company provides guarantees of certain obligations, including guarantees for completion of projects, repayment of debt, environmental indemnity obligations and other lender required guarantees.

DOE Deactivation, Demolition, and Removal Project

Washington Group International, an Ohio company (WGI Ohio), an affiliate of URS, executed a cost-reimbursable task order with the Department of Energy (DOE) in 2007 to provide deactivation, demolition and removal services at a New York State project site that, during 2010, experienced contamination and performance issues and remains uncompleted. In February 2011, WGI Ohio and the DOE executed a Task Order Modification that changed some cost-reimbursable contract provisions to at-risk. The Task Order Modification, including subsequent amendments, requires the DOE to pay all project costs up to $106 million, requires WGI Ohio and the DOE to equally share in all project costs incurred from $106 million to $146 million, and requires WGI Ohio to pay all project costs exceeding $146 million.

Due to unanticipated requirements and permitting delays by federal and state agencies, as well as delays and related ground stabilization activities caused by Hurricane Irene in 2011, WGI Ohio has been required to perform work outside the scope of the Task Order Modification. In December 2014, WGI Ohio submitted claims against the DOE pursuant to the Contracts Disputes Acts seeking recovery of $103 million, including additional fees on changed work scope. WGI Ohio has incurred and continues to incur additional project costs outside the scope of the contract as a result of differing site and ground conditions and intends to submit additional formal claims against the DOE.

Due to significant delays and uncertainties about responsibilities for the scope of remaining work, final project completion costs and other associated costs have exceeded $100 million over the contracted and claimed amounts. WGI Ohio assets and liabilities, including the value of the above costs and claims, were measured at their fair value on October 17, 2014, the date AECOM acquired WGI Ohio’s parent company, see Note 3, which measurement has been reevaluated to account for developments pertaining to this matter.

WGI Ohio can provide no certainty that it will recover the claims submitted against DOE in December 2014, any future claims or any other project costs after December 2014 that WGI Ohio may be obligated to incur including the remaining project completion costs, which could have a material adverse effect on the Company’s results of operations.

SR-91

One of the Company’s wholly-owned subsidiaries, URS Corporation, entered into a partial fixed cost and partial time and material design agreement in 2012 with a design build contractor for a state route highway construction project in Riverside County and Orange County, California. On April 5, 2017, URS Corporation filed an $8.2 million amended complaint in the Superior Court of California against the design build contractor for its failure to pay for services performed under the design agreement. On July 3, 2017, the design build contractor filed an amended counterclaim in Superior Court alleging breaches of contract, negligent interference and professional negligence pertaining to URS Corporation’s performance of design services under the design agreement, seeking purported damages of $70 million. URS Corporation cannot provide assurances that it will be successful in the recovery of the amounts owed to it under the design agreement or in its defense against the amounts alleged under the counterclaim that URS Corporation believes are without merit and that it intends to vigorously defend against. The potential range of loss in excess of any current accrual cannot be reasonably estimated at this time, primarily because the matter involves multiple regulatory issues; there is substantial uncertainty regarding any alleged damages; and the matter is at a preliminary stage of litigation.

18

New York Department of Environmental Conservation

The following matter is disclosed pursuant to Regulation S-K, Item 103, Instruction 5.C pertaining to a government authority environmental claim exceeding $100,000 against an AECOM affiliate. In September 2017, AECOM USA, Inc., one of the Company’s wholly-owned subsidiaries, was advised by the New York State Department of Environmental Conservation (DEC) of allegations that it committed environmental permit violations pursuant to the New York Environmental Conservation Law (ECL) associated with AECOM USA, Inc.’s oversight of a stream restoration project for Schoharie County which could result in substantial penalties if calculated under the ECL’s maximum civil penalty provisions. AECOM USA, Inc. disputes this claim and intends to continue to defend this matter vigorously; however, AECOM USA, Inc., cannot provide assurances that it will be successful in these efforts. The potential range of loss in excess of any current accrual cannot be reasonably estimated at this time, primarily because the matter involves complex and unique environmental and regulatory issues; the project site involves the oversight and involvement of various local, state and federal government agencies; there is substantial uncertainty regarding any alleged damages; and the matter is in its preliminary stage of the government’s claims and any negotiations of a consent order.

15.Reportable Segments

The Company’s operations are organized into four reportable segments: Design and Consulting Services (DCS), Construction Services (CS), Management Services (MS), and AECOM Capital (ACAP). During the third quarter of fiscal 2017, operating activities of ACAP achieved a level of significance sufficient to warrant disclosure as a separate reportable segment. Prior to the third quarter of fiscal 2017, ACAP’s operating results were included in the corporate segment, and comparable periods were reclassified to reflect the change. The Company’s DCS reportable segment delivers planning, consulting, architectural, environmental, and engineering design services to commercial and government clients worldwide. The Company’s CS reportable segment provides construction services primarily in the Americas. The Company’s MS reportable segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the U.S. government. The Company’s ACAP segment invests in real estate, public-private partnership (P3) and infrastructure projects. These reportable segments are organized by the types of services provided, the differing specialized needs of the respective clients, and how the Company manages its business. The Company has aggregated various operating segments into its 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.

19

The following tables set forth summarized financial information concerning the Company’s reportable segments:

Reportable Segments:	Design and Consulting Services			Construction Services			Management Services			AECOM Capital			Corporate			Total
	(in millions)
Three Months Ended December 31, 2017:
Revenue	$	1,941.9		$	2,125.5		$	843.4		$	—		$	—		$	4,910.8
Gross profit	77.8			27.1			31.3			—			—			136.2
Equity in earnings of joint ventures	7.5			13.4			8.8			—			—			29.7
General and administrative expenses	—			—			—			(2.6		)	(32.1		)	(34.7		)
Operating income	85.3			40.5			40.1			(2.6		)	(32.1		)	131.2
Gross profit as a % of revenue	4.0		%	1.3		%	3.7		%	—			—			2.8		%
Three Months Ended December 31, 2016:
Revenue	$	1,840.8		$	1,750.2		$	767.3		$	—		$	—		$	4,358.3
Gross profit	95.2			13.8			61.0			—			—			170.0
Equity in earnings of joint ventures	4.1			4.3			13.0			—			—			21.4
General and administrative expenses	—			—			—			(2.7		)	(29.9		)	(32.6		)
Acquisition and integration expenses	—			—			—			—			(15.4		)	(15.4		)
Operating income	99.3			18.1			74.0			(2.7		)	(45.3		)	143.4
Gross profit as a % of revenue	5.2		%	0.8		%	7.9		%	—			—			3.9		%
Reportable Segments:
Total assets
December 31, 2017	$	7,118.1		$	4,270.6		$	2,679.7		$	205.6		$	349.0		$	14,623.0
September 30, 2017	6,992.6			4,114.5			2,704.6			199.1			386.2			14,397.0

16.Condensed Consolidating Financial Information

In connection with the registration of the Company’s 2014 Senior Notes that were declared effective by the SEC on September 29, 2015, AECOM became subject to the requirements of Rule 3-10 of Regulation S-X regarding financial statements of guarantors and issuers of guaranteed securities. Both the 2014 Senior Notes and the 2017 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by certain of AECOM’s directly and indirectly 100% owned subsidiaries (the Subsidiary Guarantors). Other than customary restrictions imposed by applicable statutes, there are no restrictions on the ability of the Subsidiary Guarantors to transfer funds to AECOM in the form of cash dividends, loans or advances.

The following condensed consolidating financial information, which is presented for AECOM, the Subsidiary Guarantors on a combined basis and AECOM’s non-guarantor subsidiaries on a combined basis, is provided to satisfy the disclosure requirements of Rule 3-10 of Regulation S-X.

20

Condensed Consolidating Balance Sheets

(unaudited — in millions)

December 31, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	4.1	$	213.2	$	595.9	$	—		$	813.2
Accounts receivable—net	—		2,283.7		3,030.0		—			5,313.7
Intercompany receivable	733.6		91.0		128.0		(952.6		)	—
Prepaid expenses and other current assets	91.2		305.9		279.8		—			676.9
Income taxes receivable	11.0		—		27.2		—			38.2
TOTAL CURRENT ASSETS	839.9		2,893.8		4,060.9		(952.6		)	6,842.0
PROPERTY AND EQUIPMENT—NET	165.9		220.4		245.3		—			631.6
DEFERRED TAX ASSETS—NET	154.8		111.4		251.6		(301.0		)	216.8
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,775.5		2,756.7		—		(9,532.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	8.6		52.4		309.3		—			370.3
GOODWILL	—		3,318.6		2,678.4		—			5,997.0
INTANGIBLE ASSETS—NET	—		257.4		154.4		—			411.8
OTHER NON-CURRENT ASSETS	8.7		21.2		123.6		—			153.5
TOTAL ASSETS	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	2.4	$	—	$	—	$	—		$	2.4
Accounts payable	42.5		1,098.2		1,285.8		—			2,426.5
Accrued expenses and other current liabilities	76.5		955.8		1,039.9		—			2,072.2
Income taxes payable	—		—		18.2		—			18.2
Intercompany payable	93.8		761.7		170.0		(1,025.5		)	—
Billings in excess of costs on uncompleted contracts	2.9		355.2		637.8		—			995.9
Current portion of long-term debt	110.7		27.7		22.5		—			160.9
TOTAL CURRENT LIABILITIES	328.8		3,198.6		3,174.2		(1,025.5		)	5,676.1
OTHER LONG-TERM LIABILITIES	103.5		264.0		477.4		—			844.9
DEFERRED TAX LIABILITY—NET	—		—		333.3		(301.0		)	32.3
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		472.2		(472.3		)	—
LONG-TERM DEBT	3,422.0		276.9		40.0		—			3,738.9
TOTAL LIABILITIES	3,854.4		3,739.5		4,497.1		(1,798.8		)	10,292.2
TOTAL AECOM STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,100.0		(8,987.0		)	4,104.4
Noncontrolling interests	—		—		226.4		—			226.4
TOTAL STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,326.4		(8,987.0		)	4,330.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0

21

Condensed Consolidating Balance Sheets

(in millions)

September 30, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	32.6	$	251.6	$	518.2	$	—		$	802.4
Accounts receivable—net	—		2,159.2		2,968.5		—			5,127.7
Intercompany receivable	723.6		90.9		181.4		(995.9		)	—
Prepaid expenses and other current assets	67.5		338.4		290.8		—			696.7
Income taxes receivable	4.3		—		51.1		—			55.4
TOTAL CURRENT ASSETS	828.0		2,840.1		4,010.0		(995.9		)	6,682.2
PROPERTY AND EQUIPMENT—NET	160.2		207.1		254.1		—			621.4
DEFERRED TAX ASSETS—NET	239.7		55.2		171.0		(294.6		)	171.3
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,606.2		2,865.0		—		(9,471.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	7.2		50.3		306.7		—			364.2
GOODWILL	—		3,318.6		2,674.3		—			5,992.9
INTANGIBLE ASSETS—NET	—		271.6		143.5		—			415.1
OTHER NON-CURRENT ASSETS	8.7		17.6		123.6		—			149.9
TOTAL ASSETS	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	1.1	$	—	$	0.1	$	—		$	1.2
Accounts payable	33.8		1,023.7		1,192.4		—			2,249.9
Accrued expenses and other current liabilities	92.2		1,112.9		1,040.4		—			2,245.5
Income taxes payable	—		—		38.2		—			38.2
Intercompany payable	149.2		787.5		161.4		(1,098.1		)	—
Billings in excess of costs on uncompleted contracts	3.4		313.1		586.3		—			902.8
Current portion of long-term debt	110.9		14.9		15.0		—			140.8
TOTAL CURRENT LIABILITIES	390.6		3,252.1		3,033.8		(1,098.1		)	5,578.4
OTHER LONG-TERM LIABILITIES	102.3		285.7		493.3		—			881.3
DEFERRED TAX LIABILITY—NET	—		—		315.1		(294.6		)	20.5
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		467.2		(467.3		)	—
LONG-TERM DEBT	3,366.9		281.6		53.6		—			3,702.1
TOTAL LIABILITIES	3,859.9		3,819.4		4,363.0		(1,860.0		)	10,182.3
TOTAL AECOM STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,101.6		(8,901.7		)	3,996.1
Noncontrolling interests	—		—		218.6		—			218.6
TOTAL STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,320.2		(8,901.7		)	4,214.7
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0

22

Condensed Consolidating Statements of Operations

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,433.2		$	2,489.6		$	(12.0	)	$	4,910.8
Cost of revenue	—			2,317.1			2,469.5			(12.0		)	4,774.6
Gross profit	—			116.1			20.1			—			136.2
Equity in earnings from subsidiaries	206.1			26.4			—			(232.5		)	—
Equity in earnings of joint ventures	—			12.3			17.4			—			29.7
General and administrative expenses	(32.1		)	—			(2.6		)	—			(34.7		)
Income from operations	174.0			154.8			34.9			(232.5		)	131.2
Other income	0.2			5.3			2.8			(6.0		)	2.3
Interest expense	(52.3		)	(4.7		)	(5.2		)	6.0			(56.2		)
Income before income tax expense (benefit)	121.9			155.4			32.5			(232.5		)	77.3
Income tax expense (benefit)	10.6			28.9			(86.6		)	—			(47.1		)
Net income	111.3			126.5			119.1			(232.5		)	124.4
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(13.1		)	—			(13.1		)
Net income attributable to AECOM	$	111.3		$	126.5		$	106.0		$	(232.5	)	$	111.3

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,281.5		$	2,090.1		$	(13.3	)	$	4,358.3
Cost of revenue	—			2,161.2			2,040.4			(13.3		)	4,188.3
Gross profit	—			120.3			49.7			—			170.0
Equity in earnings from subsidiaries	117.6			25.0			—			(142.6		)	—
Equity in earnings of joint ventures	—			9.9			11.5			—			21.4
General and administrative expenses	(29.9		)	—			(2.7		)	—			(32.6		)
Acquisition and integration expenses	(15.4		)	—			—			—			(15.4		)
Income from operations	72.3			155.2			58.5			(142.6		)	143.4
Other income	0.4			7.6			2.9			(10.1		)	0.8
Interest expense	(47.8		)	(5.7		)	(10.2		)	10.1			(53.6		)
Income before income tax (benefit) expense	24.9			157.1			51.2			(142.6		)	90.6
Income tax (benefit) expense	(22.3		)	35.9			11.2			—			24.8
Net income	47.2			121.2			40.0			(142.6		)	65.8
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(18.6		)	—			(18.6		)
Net income attributable to AECOM	$	47.2		$	121.2		$	21.4		$	(142.6	)	$	47.2

23

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	111.3	$	126.5	$	119.1		$	(232.5	)	$	124.4
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	0.7		—		0.1			—			0.8
Foreign currency translation adjustments	—		—		(6.0		)	—			(6.0		)
Pension adjustments, net of tax	0.8		—		1.7			—			2.5
Other comprehensive income (loss), net of tax	1.5		—		(4.2		)	—			(2.7		)
Comprehensive income, net of tax	112.8		126.5		114.9			(232.5		)	121.7
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(13.9		)	—			(13.9		)
Comprehensive income attributable to AECOM, net of tax	$	112.8	$	126.5	$	101.0		$	(232.5	)	$	107.8

	For the three months ended December 31, 2016
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	47.2	$	121.2	$	40.0		$	(142.6	)	$	65.8
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	2.9		—		(1.5		)	—			1.4
Foreign currency translation adjustments	—		—		(73.9		)	—			(73.9		)
Pension adjustments, net of tax	0.6		—		16.3			—			16.9
Other comprehensive income (loss), net of tax	3.5		—		(59.1		)	—			(55.6		)
Comprehensive income (loss), net of tax	50.7		121.2		(19.1		)	(142.6		)	10.2
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(18.3		)	—			(18.3		)
Comprehensive income (loss) attributable to AECOM, net of tax	$	50.7	$	121.2	$	(37.4	)	$	(142.6	)	$	(8.1	)

24

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(64.4	)	$	4.8		$	112.0		$	—		$	52.4
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	—			—			2.2			—			2.2
Cash acquired from consolidation of joint venture	—			—			7.6			—			7.6
Net investment in unconsolidated joint ventures	—			(3.6		)	(15.4		)	—			(19.0		)
Proceeds from sale of investments	—			—			0.2			—			0.2
Payments for capital expenditures, net of disposals	3.4			(17.0		)	(4.9		)	—			(18.5		)
Net receipts from (investment in) intercompany notes	0.6			(5.1		)	28.8			(24.3		)	—
Other intercompany investing activities	(4.2		)	82.1			—			(77.9		)	—
Net cash (used in) provided by investing activities	(0.2		)	56.4			18.5			(102.2		)	(27.5		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,240.8			—			35.7			—			1,276.5
Repayments of borrowings under credit agreements	(1,187.4		)	(4.7		)	(44.1		)	—			(1,236.2		)
Proceeds from issuance of common stock	9.5			—			—			—			9.5
Proceeds from exercise of stock options	2.7			—			—			—			2.7
Payments to repurchase common stock	(26.7		)	—			—			—			(26.7		)
Net distributions to noncontrolling interests	—			—			(16.8		)	—			(16.8		)
Other financing activities	0.9			(36.8		)	9.9			—			(26.0		)
Net (repayments) borrowings on intercompany notes	(3.7		)	(25.1		)	4.5			24.3			—
Other intercompany financing activities	—			(33.0		)	(44.9		)	77.9			—
Net cash provided by (used in) financing activities	36.1			(99.6		)	(55.7		)	102.2			(17.0		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			2.9			—			2.9
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(28.5		)	(38.4		)	77.7			—			10.8
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	32.6			251.6			518.2			—			802.4
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	4.1		$	213.2		$	595.9		$	—		$	813.2

25

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(27.0	)	$	83.2		$	21.3		$	—		$	77.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Net investment in unconsolidated joint ventures	—			(0.8		)	(17.3		)	—			(18.1		)
Proceeds from sale of investments	—			—			0.3			—			0.3
Payments for capital expenditures, net of disposals	(7.2		)	(9.7		)	(4.1		)	—			(21.0		)
Net investment in intercompany notes	(0.5		)	(8.7		)	(1.2		)	10.4			—
Other intercompany investing activities	32.1			14.4			—			(46.5		)	—
Net cash provided by (used in) investing activities	24.4			(4.8		)	(22.3		)	(36.1		)	(38.8		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,634.2			—			0.6			—			1,634.8
Repayments of borrowings under credit agreements	(1,595.2		)	(6.4		)	(5.8		)	—			(1,607.4		)
Proceeds from issuance of common stock	9.9			—			—			—			9.9
Proceeds from exercise of stock options	2.1			—			—			—			2.1
Payments to repurchase common stock	(17.5		)	—			—			—			(17.5		)
Net distributions to noncontrolling interests	—			—			(21.9		)	—			(21.9		)
Other financing activities	(10.7		)	(65.5		)	49.8			—			(26.4		)
Net borrowings on intercompany notes	—			1.1			9.3			(10.4		)	—
Other intercompany financing activities	—			(31.8		)	(14.7		)	46.5			—
Net cash provided by (used in) financing activities	22.8			(102.6		)	17.3			36.1			(26.4		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(6.7		)	—			(6.7		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	20.2			(24.2		)	9.6			—			5.6
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1.8			183.7			506.6			—			692.1
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	22.0		$	159.5		$	516.2		$	—		$	697.7

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Item 2.  Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. These statements include forward-looking statements with respect to the Company, including the Company’s business and operations, and the engineering and construction industry. Statements that are not historical facts, without limitation, including statements that use terms such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “potential,” “projects,” and “will” and that relate to our future revenues, expenditures and business trends; future accounting estimates; future conversions of backlog; future capital allocation priorities including share repurchases, trade receivables, debt pay downs; future post-retirement expenses; future tax benefits and expenses; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; and other future economic and industry conditions, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this Quarterly Report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. 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, impacts of the Tax Act (including changes in interpretations and assumptions we have made, future guidance and other actions we may take as a result of the Tax Act), that our business is cyclical and vulnerable to economic downturns and client spending reductions; we are dependent on long-term government contracts and subject to uncertainties related to government contract appropriations; governmental agencies may modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; we may experience losses under fixed-price contracts; we have limited control over operations run through our joint venture entities; we may be liable for misconduct by our employees or consultants or our failure to comply with laws or regulations applicable to our business; we may not maintain adequate surety and financial capacity; we are highly leveraged and may not be able to service our debt and guarantees; we have exposure to political and economic risks in different countries where we operate as well as currency exchange rate fluctuations; we may not be able to retain and recruit key technical and management personnel; we may be subject to legal claims; we may have inadequate insurance coverage; we are subject to environmental law compliance and may not have adequate nuclear indemnification; there may be unexpected adjustments and cancellations related to our backlog; we are dependent on partners and third parties who may fail to satisfy their obligations; we may not be able to manage pension costs; we may face cybersecurity issues and data loss; 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. Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.

All subsequent written and oral forward-looking statements concerning the Company or other matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. You are cautioned not to place undue reliance on these forward-looking statements, which speak only to the date they are made. The Company is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise. 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.

Overview

We are a leading fully integrated firm positioned to design, build, finance and operate infrastructure assets for governments, businesses and organizations in more than 150 countries. We provide planning, consulting, architectural and engineering design services to commercial and government clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government markets. We also provide construction services, including building construction and energy, infrastructure and industrial construction. In addition, we provide program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the U.S. government and also for national governments around the world.

Our business focuses primarily on providing fee-based planning, consulting, architectural and engineering design services and, therefore, our business is labor intensive. We primarily derive income from our ability to generate revenue and collect cash from our clients through the billing of our employees’ time spent on client projects and our ability to manage our costs. AECOM Capital primarily derives its income from real estate development sales.

We report our business through four segments: Design and Consulting Services (DCS), Construction Services (CS), Management Services (MS), and AECOM Capital (ACAP). Such segments are organized by the types of services provided, the differing specialized needs of the respective clients, and how we manage the business. 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.

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Our DCS segment delivers planning, consulting, architectural and engineering design services to commercial and government clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government. DCS revenue is primarily derived from fees from services that we provide, as opposed to pass-through costs from subcontractors.

Our CS segment provides construction services, including building construction and energy, infrastructure and industrial construction, primarily in the Americas. CS revenue typically includes a significant amount of pass-through costs from subcontractors.

Our MS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the U.S. government and also for national governments around the world. MS revenue typically includes a significant amount of pass-through costs from subcontractors.

Our ACAP segment invests in real estate, public-private partnership (P3) and infrastructure projects. ACAP typically partners with investors and experienced developers in the United States and Europe as co-general partners. In addition, ACAP may, but is not required to, enter into contracts with our other AECOM affiliates to provide design, engineering, construction management, development and operations and maintenance services for ACAP funded projects.

Our revenue is dependent on our ability to attract and retain qualified and productive employees, identify business opportunities, integrate and maximize the value of our recent acquisitions, allocate our labor resources to profitable and high growth markets, secure new contracts and renew existing client agreements. Demand for our services is cyclical and may be vulnerable to sudden economic downturns and reductions in government and private industry spending, which may result in clients delaying, curtailing or canceling proposed and existing projects. Moreover, as a professional services company, maintaining the high quality of the work generated by our employees is integral to our revenue generation and profitability.

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.

During our first quarter ended December 31, 2017, President Trump signed the Tax Cuts and Jobs Act legislation that went into law (Tax Act). The Tax Act reduces the Company’s U.S. federal corporate tax rate from 35% to a blended tax rate of 24.5% for the Company’s fiscal year ending September 30, 2018 and 21% for fiscal years thereafter, requires companies to pay a one-time transition tax on accumulated earnings of foreign subsidiaries, creates new taxes on certain foreign sourced earnings and eliminates or reduces certain deductions.  We have not completed our accounting for the tax effects of the Tax Act.  We have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax but we have not made any reasonable estimate of the impact on our indefinite reinvestment of earnings of certain of our foreign subsidiaries.

In December 2015, the federal legislation referred to as the Fixing America’s Surface Transportation Act (the FAST Act) was authorized. The FAST Act is a five-year federal program expected to provide infrastructure spending on roads, bridges, and public transit and rail systems. While client spending patterns are likely to remain uneven, we expect that the passage of the FAST Act will positively impact our transportation services business in the next several years.

In 2017, the U.S. federal government proposed significant legislative and executive infrastructure initiatives that, if enacted, could have a positive impact to our infrastructure business.

In September 2017, we announced our plan to allocate free cash from operations to reduce our long-term debt and lower our overall leverage ratio. After significantly reducing our leverage ratio, we plan to allocate free cash from operations to engage in a stock repurchase program.

We cannot determine if future climate change and greenhouse gas laws and policies, such as the United Nation’s COP-21 Paris Agreement, will have a material impact on our business or our clients’ business; however, we expect future environmental laws and policies could negatively impact demand for our services related to fossil fuel projects and positively impact demand for our services related to environmental, infrastructure, nuclear and alternative energy projects.

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Results of Operations

Three months ended December 31, 2017 compared to the three months ended December 31, 2016

Consolidated Results

	Three Months Ended
	December 31,			December 31,			Change
	2017			2016			$			%
	(in millions)
Revenue	$	4,910.8		$	4,358.3		$	552.5		12.7	%
Cost of revenue	4,774.6			4,188.3			586.3			14.0
Gross profit	136.2			170.0			(33.8		)	(19.9	)
Equity in earnings of joint ventures	29.7			21.4			8.3			38.8
General and administrative expenses	(34.7		)	(32.6		)	(2.1		)	6.4
Acquisition and integration expenses	—			(15.4		)	15.4			(100.0	)
Income from operations	131.2			143.4			(12.2		)	(8.5	)
Other income	2.3			0.8			1.5			187.5
Interest expense	(56.2		)	(53.6		)	(2.6		)	4.9
Income before income tax (benefit) expense	77.3			90.6			(13.3		)	(14.7	)
Income tax (benefit) expense	(47.1		)	24.8			(71.9		)	(289.9	)
Net income	124.4			65.8			58.6			89.1
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13.1		)	(18.6		)	5.5			(29.6	)
Net income attributable to AECOM	$	111.3		$	47.2		$	64.1		135.8	%

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

	Three Months Ended
	December 31, 2017		December 31, 2016
Revenue	100.0	%	100.0	%
Cost of revenue	97.2		96.1
Gross margin	2.8		3.9
Equity in earnings of joint ventures	0.6		0.5
General and administrative expenses	(0.7	)	(0.7	)
Acquisition and integration expenses	0.0		(0.4	)
Income from operations	2.7		3.3
Other income	0.0		0.0
Interest expense	(1.1	)	(1.2	)
Income before income tax (benefit) expense	1.6		2.1
Income tax (benefit) expense	(0.9	)	0.6
Net income	2.5		1.5
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(0.2	)	(0.4	)
Net income attributable to AECOM	2.3	%	1.1	%

Revenue

Our revenue for the three months ended December 31, 2017 increased $552.5 million, or 12.7%, to $4,910.8 million as compared to $4,358.3 million for the corresponding period last year.

The increase in revenue for the three months ended December 31, 2017 was primarily attributable to increases in our DCS segment of $101.1 million, our CS segment of $375.3 million, and our MS segment of $76.1 million, as discussed further below.

In the course of providing our services, we routinely subcontract for services and incur other direct costs on behalf of our clients. These costs are passed through to clients and, in accordance with industry practice and GAAP, are included in our revenue and cost of revenue. Because subcontractor and other direct costs can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends. Subcontractor and other direct costs for the quarters ended December 31, 2017 and 2016 were $2.6 billion and $2.3 billion, respectively. Subcontractor costs and other direct costs as a percentage of revenue, increased to 53% during the quarter ended December 31, 2017 from 52% during the quarter ended December 31, 2016 due to increased building construction in our CS segment, as discussed below.

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Gross Profit

Our gross profit for the three months ended December 31, 2017 decreased $33.8 million, or 19.9%, to $136.2 million as compared to $170.0 million for the corresponding period last year.  For the three months ended December 31, 2017, gross profit, as a percentage of revenue, decreased to 2.8% from 3.9% in the three months ended December 31, 2016. The decrease was primarily due to a the absence of an approximately $35 million benefit recorded in the three months ended December 31, 2016 from the settlement of the Waste Treatment Plant qui tam civil lawsuit filed pursuant to the federal False Claims Act, net of legal fees.

Billings in excess of costs on uncompleted contracts includes a margin fair value liability associated with long-term contracts acquired in connection with the acquisition of URS on October 17, 2014. Revenue and the related income from operations related to the margin fair value liability recognized during the three months ended December 31, 2017 was $1.1 million, compared with $1.6 million during the three months ended December 31, 2016. This is offset by amortization of intangible assets of $23.7 million during the three months ended December 31, 2017, compared with $25.4 million during the three months ended December 31, 2016. We do not expect the margin fair value liability recognized in recent business acquisitions will have a significant impact to gross margin in future periods.

Gross profit changes were also due to the reasons noted in DCS, CS and MS reportable segments below.

Equity in Earnings of Joint Ventures

Our equity in earnings of joint ventures for the three months ended December 31, 2017 was $29.7 million as compared to $21.4 million in the corresponding period last year.

Equity in earnings of joint ventures for the three months ended December 31, 2017 benefited from a gain from the acquisition of a previously unconsolidated joint venture in our CS segment.

General and Administrative Expenses

Our general and administrative expenses for the three months ended December 31, 2017 increased $2.1 million, or 6.4%, to $34.7 million as compared to $32.6 million for the corresponding period last year. As a percentage of revenue, general and administrative expenses was 0.7% of revenue for the three months ended December 31, 2017 and the corresponding period last year.

Acquisition and Integration Expenses

Acquisition and integration expenses, resulting from business acquisitions, were comprised of the following:

	Three months ended
	December 31, 2017		December 31, 2016
	(in millions)
Severance and personnel costs	$	—	$	11.5
Professional service, real estate-related, and other expenses	—		3.9
Total	$	—	$	15.4

Our acquisition and integration expenses associated with the URS integration are complete.

Other Income

Our other income for the three months ended December 31, 2017 increased to $2.3 million from $0.8 million for the corresponding period last year.

Other income is primarily comprised of interest income.

Interest Expense

Our interest expense for the three months ended December 31, 2017 increased to $56.2 million as compared to $53.6 million for the corresponding period last year.

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Income Tax Expense

Our income tax (benefit)/expense for the three months ended December 31, 2017 was $(47.1) million as compared to $24.8 million in the corresponding period last year. The decrease in tax expense for the current period compared to the corresponding period last year is due primarily to a tax benefit of $41.7 million related to one-time U.S. federal tax law changes, a $11.2 million benefit related to changes in uncertain tax positions primarily in the U.S. and Canada, a $8.4 million benefit related to income tax credits and incentives, and a $6.3 million benefit related to the reduction of the U.S. federal corporate tax rate from 35% to a blended tax rate of 24.5%. These items are not expected to have a continuing impact on the effective tax rate for the remainder of the fiscal year except for the benefits related to income tax credits and incentives.

During the first quarter of 2018, President Trump signed what is commonly referred to as The Tax Cuts and Jobs Act (the Tax Act) into law.  The Tax Act reduces our U.S. federal corporate tax rate from 35% to a blended tax rate of 24.5% for the Company’s fiscal year ending September 30, 2018 and 21% for fiscal years thereafter, requires companies to pay a one-time transition tax on accumulated earnings of foreign subsidiaries, creates new taxes on certain foreign sourced earnings and eliminates or reduces certain deductions.

In the first quarter of 2018, we remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.  However, we are still analyzing certain aspects of the Tax Act and refining our calculations which could potentially affect the measurement of these balances.  The provisional amount recorded related to the remeasurement of our deferred tax balance was a $36.1 million tax benefit.  In addition, we released the deferred tax liability and recorded a tax benefit related to certain foreign subsidiaries for which the undistributed earnings are not intended to be reinvested indefinitely for $77.0 million and accrued current tax on these earnings as part of the one-time transition tax.

Also during the first quarter 2018, we recorded a provisional amount for the one-time transition tax liability for our foreign subsidiaries resulting in an increase in income tax expense of $71.4 million.  We have not yet completed our calculation of the total foreign earnings and profits of our foreign subsidiaries.  Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets at the end of the current fiscal year.  This amount may change when we finalize the calculation of foreign earnings and finalize the amounts held in cash or other specified assets.

Certain operations in Canada continue to have losses and the associated valuation allowances could be reduced if and when our current and forecast profits trend turns and sufficient evidence exists to support the release of the related valuation allowance (approximately $27 million).

We regularly integrate and consolidate our business operations and legal entity structure, and such internal initiatives could impact the assessment of uncertain tax positions, indefinite reinvestment assertions and the realizability of deferred tax assets.

Net Income Attributable to AECOM

The factors described above resulted in net income attributable to AECOM of $111.3 million for the three months ended December 31, 2017 as compared to net income attributable to AECOM of $47.2 million for the three months ended December 31, 2016.

Results of Operations by Reportable Segment:

Design and Consulting Services

	Three Months Ended
	December 31,		December 31,		Change
	2017		2016		$			%
	(in millions)
Revenue	$	1,941.9	$	1,840.8	$	101.1		5.5	%
Cost of revenue	1,864.1		1,745.6		118.5			6.8
Gross profit	$	77.8	$	95.2	$	(17.4	)	(18.3	)%

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

	Three Months Ended
	December 31, 2017		December 31, 2016
Revenue	100.0	%	100.0	%
Cost of revenue	96.0		94.8
Gross profit	4.0	%	5.2	%

Revenue

Revenue for our DCS segment for the three months ended December 31, 2017 increased $101.1 million, or 5.5%, to $1,941.9 million as compared to $1,840.8 million for the corresponding period last year.

The increase in revenue for the three months ended December 31, 2017 was attributable to increases in Europe, Middle East, India and Africa (EMIA), Asia Pacific (APAC), and the Americas, totaling approximately $70 million, as well as a favorable impact from foreign currency of approximately $30 million.

Gross Profit

Gross profit for our DCS segment for the three months ended December 31, 2017 decreased $17.4 million, or 18.3%, to $77.8 million as compared to $95.2 million for the corresponding period last year. As a percentage of revenue, gross profit decreased to 4.0% of revenue for the three months ended December 31, 2017 from 5.2% in the corresponding period last year.

The decrease in gross profit and gross profit as a percentage of revenue for the quarter ended December 31, 2017 was primarily attributable to approximately $21 million in severance costs, primarily in the Americas and EMIA.

Construction Services

	Three Months Ended
	December 31,		December 31,		Change
	2017		2016		$		%
	(in millions)
Revenue	$	2,125.5	$	1,750.2	$	375.3	21.4	%
Cost of revenue	2,098.4		1,736.4		362.0		20.8
Gross profit	$	27.1	$	13.8	$	13.3	96.4	%

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

	Three Months Ended
	December 31, 2017		December 31, 2016
Revenue	100.0	%	100.0	%
Cost of revenue	98.7		99.2
Gross profit	1.3	%	0.8	%

Revenue

Revenue for our CS segment for the three months ended December 31, 2017 increased $375.3 million, or 21.4%, to $2,125.5 million as compared to $1,750.2 million for the corresponding period last year.

The increase in revenue for the three months ended December 31, 2017 was primarily attributable to approximately $240 million in increased revenue due to the construction of residential high-rise buildings in the city of New York and sports arenas in the Americas.  Additionally, the increase was due to the inclusion of approximately $160 million of revenue from entities acquired during fiscal year 2018 and 2017.

Gross Profit

Gross profit for our CS segment for the three months ended December 31, 2017 increased $13.3 million, or 96.4%, to $27.1 million as compared to $13.8 million for the corresponding period last year. As a percentage of revenue, gross profit increased to 1.3% of revenue for the three months ended December 31, 2017 from 0.8% in the corresponding period last year.

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The increase in gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2017 was primarily due to improved project performance on an energy contract in the United States, and due to the revenue increases in our construction businesses noted above.

Management Services

	Three Months Ended
	December 31,		December 31,		Change
	2017		2016		$			%
	(in millions)
Revenue	$	843.4	$	767.3	$	76.1		9.9	%
Cost of revenue	812.1		706.3		105.8			15.0
Gross profit	$	31.3	$	61.0	$	(29.7	)	(48.7	)%

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

	Three Months Ended
	December 31, 2017		December 31, 2016
Revenue	100.0	%	100.0	%
Cost of revenue	96.3		92.1
Gross profit	3.7	%	7.9	%

Revenue

Revenue for our MS segment for the three months ended December 31, 2017 increased $76.1 million, or 9.9%, to $843.4 million as compared to $767.3 million for the corresponding period last year.

The increase in revenue for the quarter ended December 31, 2017 was primarily due to various projects with the U.S. government.

Gross Profit

Gross profit for our MS segment for the three months ended December 31, 2017 decreased $29.7 million, or 48.7%, to $31.3 million as compared to $61.0 million for the corresponding period last year. As a percentage of revenue, gross profit decreased to 3.7% of revenue for the three months ended December 31, 2017 from 7.9% in the corresponding period last year.

Gross profit and gross profit as a percentage of revenue for the three months ended December 31, 2017 decreased primarily due to the absence of an approximately $35 million benefit recorded in the three months ended December 31, 2016, from the settlement of the Waste Treatment Plant qui tam civil lawsuit filed pursuant to the federal False Claims Act, net of legal fees.

AECOM Capital

	Three Months Ended
	December 31,			December 31,			Change
	2017			2016			$		%
	(in millions)
Equity in earnings of joint ventures	$	—		$	—		$	—	—	%
General and administrative expenses	(2.6		)	(2.7		)	0.1		(3.7	)

Results of operations for ACAP did not significantly change for the three months ended December 31, 2017 compared to the same period in the prior year.

Seasonality

We experience seasonal trends in our business. The first quarter of our fiscal year (October 1 to December 31) is typically our weakest quarter. The harsher weather conditions impact our ability to complete work in parts of North America and the holiday season schedule affects our productivity during this period. Our revenue is typically higher in the last half of the fiscal year. Many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. In addition, we find that the U.S. federal government tends to authorize more work during the period preceding the end of our fiscal year, September 30. Further, our construction management revenue typically increases during the high construction season

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of the summer months. 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, which allows for more productivity from our on-site civil services. For these reasons, coupled with the number and significance of client contracts commenced and completed during a period, as well as the time of expenses incurred for corporate initiatives, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.

Liquidity and Capital Resources

Cash Flows

Our principal sources of liquidity are cash flows from operations, borrowings under our credit facilities, and access to financial markets. Our principal uses of cash are operating expenses, capital expenditures, working capital requirements, acquisitions, and repayment of debt. 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 12 months.

Generally, we do not provide for U.S. taxes or foreign withholding taxes on gross book-tax basis differences in our non-U.S. subsidiaries because such basis differences are able to and intended to be reinvested indefinitely. At December 31, 2017 we have not determined whether we will continue to indefinitely reinvest the earnings of certain 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 outside of the one-time transition tax required under the Tax Cuts and Jobs Act that was enacted on December 22, 2017. 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 December 31, 2017, cash and cash equivalents were $813.2 million, an increase of $10.8 million, or 1.3%, from $802.4 million at September 30, 2017. The increase in cash and cash equivalents was primarily attributable to cash provided by operating activities and net borrowings under our debt agreements, partially offset by capital expenditures net of proceeds from disposals, net distributions to noncontrolling interest, net investment in unconsolidated joint ventures, and repurchases of common stock.

Net cash provided by operating activities was $52.4 million for the three months ended December 31, 2017, a decrease from $77.5 million for the three months ended December 31, 2016. The decrease was primarily attributable to the timing of receipts and payments of working capital, which include accounts receivable, accounts payable, accrued expenses, and billings in excess of costs on uncompleted contracts. The sale of trade receivables to financial institutions during the three months ended December 31, 2017 provided a net benefit of $29.6 million as compared to $19.3 million during the three months ended December 31, 2016. We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable to the Company.

Net cash used in investing activities was $27.5 million for the three months ended December 31, 2017, as compared to $38.8 million for the three months ended December 31, 2016.

Net cash used in financing activities was $17.0 million for the three months ended December 31, 2017 as compared to $26.4 million for the three months ended December 31, 2016. This change was primarily attributable to net borrowings under credit agreements of $40.3 million for the three months ended December 31, 2017 as compared to $27.4 million for the three months ended December 31, 2016.

Acquisition and Integration Expenses

Acquisition and integration expenses, resulting from business acquisitions, comprised of the following (in millions):

	Three months ended Dec 31,
	2017		2016
Severance and personnel costs	$	—	$	11.5
Professional service, real estate-related, and other expenses	—		3.9
Total	$	—	$	15.4

Our acquisition and integration expenses associated with the URS integration are complete.

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Working Capital

Working capital, or current assets less current liabilities, increased $62.2 million, or 5.6%, to $1,166.0 million at December 31, 2017 from $1,103.8 million at September 30, 2017. Net accounts receivable, which includes billed and unbilled costs and fees, net of billings in excess of costs on uncompleted contracts, increased $92.9 million, or 2.2%, to $4,317.8 million at December 31, 2017 from $4,224.9 million at September 30, 2017.

Days Sales Outstanding (DSO), which includes accounts receivable, net of billings in excess of costs on uncompleted contracts, and excludes the effects of recent acquisitions, was 80 days at December 31, 2017 compared to 77 days at September 30, 2017.

In Note 4, Accounts Receivable—Net, in the notes to our consolidated financial statements, a comparative analysis of the various components of accounts receivable is provided. Substantially all unbilled receivables are expected to be billed and collected within twelve months.

Unbilled receivables related to claims are recorded only if it is probable that the claim will result in additional contract revenue and if the amount can be reliably estimated. In such cases, revenue is recorded only to the extent that contract costs relating to the claim have been incurred. Other than as disclosed, there are no material net receivables related to contract claims as of December 31, 2017 and September 30, 2017. Award fees in unbilled receivables are accrued only when there is sufficient information to assess contract performance. On contracts that represent higher than normal risk or technical difficulty, award fees are generally deferred until an award fee letter is received.

Because our revenue depends to a great extent on billable labor hours, most of our charges are invoiced following the end of the month in which the hours were worked, the majority usually within 15 days. Other direct costs are normally billed along with labor hours. However, as opposed to salary costs, which are generally paid on either a bi-weekly or monthly basis, other direct costs are generally not paid until payment is received (in some cases in the form of advances) from the customers.

Debt

Debt consisted of the following:

	December 31, 2017			September 30, 2017
	(in millions)
2014 Credit Agreement	$	962.3		$	908.7
2014 Senior Notes	1,600.0			1,600.0
2017 Senior Notes	1,000.0			1,000.0
URS Senior Notes	247.8			247.7
Other debt	141.6			140.0
Total debt	3,951.7			3,896.4
Less: Current portion of debt and short-term borrowings	(163.3		)	(142.0		)
Less: Unamortized debt issuance costs	(49.5		)	(52.3		)
Long-term debt	$	3,738.9		$	3,702.1

The following table presents, in millions, scheduled maturities of our debt as of December 31, 2017:

Fiscal Year
2018 (nine months remaining)	$	109.7
2019	152.2
2020	123.0
2021	686.9
2022	258.2
Thereafter	2,621.7
Total	$	3,951.7

2014 Credit Agreement

We entered into a credit agreement (Credit Agreement) on October 17, 2014, as amended, consisting of (i) a term loan A facility in an aggregate principal amount of $1.925 billion, (ii) a term loan B facility in an aggregate principal amount of $0.76 billion, and (iii) a revolving credit facility in an aggregate principal amount of $1.05 billion. These facilities under the Credit Agreement may be increased by an additional amount of up to $500 million. The Credit Agreement’s term extends to September 29, 2021 with respect to the revolving credit facility and the term loan A facility and October 17, 2021 with respect to the term loan B facility, although the term loan B facility was paid in full on February 21, 2017. Some of our subsidiaries (Guarantors) have guaranteed the obligations of

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the borrowers under the Credit Agreement. The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of the assets of the Company and the Guarantors pursuant to a security and pledge agreement (Security Agreement). The collateral under the Security Agreement is subject to release upon fulfillment of certain conditions specified in the Credit Agreement and Security Agreement.

The Credit Agreement contains covenants that limit our ability and the ability of certain of our subsidiaries to, among other things: (i) create, incur, assume, or suffer to exist liens; (ii) incur or guarantee indebtedness; (iii) pay dividends or repurchase stock; (iv) enter into transactions with affiliates; (v) consummate asset sales, acquisitions or mergers; (vi) enter into certain types of burdensome agreements; or (vii) make investments.

On July 1, 2015, the Credit Agreement was amended to revise the definition of “Consolidated EBITDA” to increase the allowance for acquisition and integration expenses related to the acquisition of URS.

On December 22, 2015, the Credit Agreement was amended to further revise the definition of “Consolidated EBITDA” by further increasing the allowance for acquisition and integration expenses related to the acquisition of URS and to allow for an internal corporate restructuring primarily involving its international subsidiaries.

On September 29, 2016, the Credit Agreement and the Security Agreement were amended to (1) lower the applicable interest rate margins for the term loan A and the revolving credit facilities, and lower the applicable letter of credit fees and commitment fees to the revised consolidated leverage levels; (2) extend the term of the term loan A and the revolving credit facility to September 29, 2021; (3) add a new delayed draw term loan A facility tranche in the amount of $185.0 million; (4) replace the then existing $500 million performance letter of credit facility with a $500 million basket to enter into secured letters of credit outside the Credit Agreement; and (5) revise certain covenants, including the Maximum Consolidated Leverage Ratio so that the step down from a 5.00 to a 4.75 leverage ratio is effective as of March 31, 2017 as well as the investment basket for our AECOM Capital business.

On March 31, 2017, the Credit Agreement was amended to (1) expand the ability of restricted subsidiaries to borrow under “Incremental Term Loans;” (2) revise the definition of “Working Capital” as used in “Excess Cash Flow;” (3) revise the definitions for “Consolidated EBITDA” and “Consolidated Funded Indebtedness” to reflect the expected gain and debt repayment of an AECOM Capital disposition, which disposition was completed on April 28, 2017; and (4) amend provisions relating to our ability to undertake certain internal restructuring steps to accommodate changes in tax laws.

Under the Credit Agreement, we are subject to a maximum consolidated leverage ratio and minimum consolidated interest coverage ratio at the end of each fiscal quarter. Our Consolidated Leverage Ratio was 4.0 at December 31, 2017. Our Consolidated Interest Coverage Ratio was 4.7 at December 31, 2017. As of December 31, 2017, we were in compliance with the covenants of the Credit Agreement.

At December 31, 2017 and September 30, 2017, outstanding standby letters of credit totaled $54.8 million and $58.1 million, respectively, under our revolving credit facilities. As of December 31, 2017 and September 30, 2017, we had $915.2 million and $991.9 million, respectively, available under our revolving credit facility.

2014 Senior Notes

On October 6, 2014, we completed a private placement offering of $800,000,000 aggregate principal amount of the unsecured 5.750% Senior Notes due 2022 (2022 Notes) and $800,000,000 aggregate principal amount of the unsecured 5.875% Senior Notes due 2024 (the 2024 Notes and, together with the 2022 Notes, the 2014 Senior Notes).

As of December 31, 2017, the estimated fair value of the 2014 Senior Notes was approximately $834.0 million for the 2022 Notes and $866.0 million for the 2024 Notes. The fair value of the 2014 Senior Notes as of December 31, 2017 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 2014 Senior Notes.

We may redeem the 2022 Notes, in whole or in part, at once or over time, at the specified redemption prices plus accrued and unpaid interest thereon to the redemption date. At any time prior to July 15, 2024, we may redeem on one or more occasions all or part of the 2024 Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a “make-whole” premium as of the date of the redemption, plus any accrued and unpaid interest to the date of redemption. In addition, on or after July 15, 2024, the 2024 Notes may be redeemed at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption.

The indenture pursuant to which the 2014 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

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On November 2, 2015, we completed an exchange offer to exchange the unregistered 2014 Notes for registered notes, as well as all related guarantees.

We were in compliance with the covenants relating to the 2014 Senior Notes as of December 31, 2017.

2017 Senior Notes

On February 21, 2017, we completed a private placement offering of $1,000,000,000 aggregate principal amount of our unsecured 5.125% Senior Notes due 2027 (the 2017 Senior Notes) and used the proceeds to immediately retire the remaining $127.6 million outstanding on the term loan B facility as well as repay $600 million of the term loan A facility and $250 million of the revolving credit facility under our Credit Agreement.

As of December 31, 2017, the estimated fair value of the 2017 Senior Notes was approximately $1,017.5 million. The fair value of the 2017 Senior Notes as of December 31, 2017 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 2017 Senior Notes. Interest will be payable on the 2017 Senior Notes at a rate of 5.125% per annum. Interest on the 2017 Senior Notes will be payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017. The 2017 Senior Notes will mature on March 15, 2027.

At any time and from time to time prior to December 15, 2026, we may redeem all or part of the 2017 Senior Notes, at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date.

In addition, at any time and from time to time prior to March 15, 2020, we may redeem up to 35% of the original aggregate principal amount of the 2017 Senior Notes with the proceeds of one or more qualified equity offerings, at a redemption price equal to 105.125%, plus accrued and unpaid interest. Furthermore, at any time on or after December 15, 2026, we may redeem on one or more occasions all or part of the 2017 Senior Notes at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest.

The indenture pursuant to which the 2017 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

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

We were in compliance with the covenants relating to our 2017 Senior Notes as of December 31, 2017.

URS Senior Notes

In connection with the URS acquisition, we assumed the URS 3.85% Senior Notes due 2017 (2017 URS Senior Notes) and the URS 5.00% Senior Notes due 2022 (2022 URS Senior Notes), totaling $1.0 billion (URS Senior Notes). The URS acquisition triggered change in control provisions in the URS Senior Notes that allowed the holders of the URS Senior Notes to redeem their URS Senior Notes at a cash price equal to 101% of the principal amount and, accordingly, we redeemed $572.3 million of the URS Senior Notes on October 24, 2014. The remaining 2017 URS Senior Notes matured and were fully redeemed on April 3, 2017 for $179.2 million using proceeds from a $185 million delayed draw term loan A facility tranche under the Credit Agreement. The 2022 URS Senior Notes are general unsecured senior obligations of AECOM Global II, LLC (as successor in interest to URS) and are fully and unconditionally guaranteed on a joint-and-several basis by certain former URS domestic subsidiary guarantors.

As of December 31, 2017, the estimated fair value of the 2022 URS Senior Notes was approximately $258.5 million. The carrying value of the 2022 URS Senior Notes on our Consolidated Balance Sheets as of December 31, 2017 was $247.8 million. The fair value of the 2022 URS Senior Notes as of December 31, 2017 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 2022 URS Senior Notes.

As of December 31, 2017, we were in compliance with the covenants relating to the 2022 URS Senior Notes.

Other Debt

Other debt consists primarily of obligations under capital leases and loans, and unsecured credit facilities. Our unsecured credit facilities are primarily used for standby letters of credit issued for payment of performance guarantees. At December 31, 2017 and September 30, 2017, these outstanding standby letters of credit totaled $460.9 million and $445.7 million, respectively. As of December 31, 2017, we had $489.4 million available under these unsecured credit facilities.

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Effective Interest Rate

Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements, during the three months ended December 31, 2017 and 2016 was 4.8% and 4.2%, respectively.

Interest expense in the consolidated statements of operations for the three months ended December 30, 2017 and 2016 included amortization of deferred debt issuance costs of $2.9 million and $2.8 million, respectively.

Other Commitments

We enter into various joint venture arrangements to provide architectural, engineering, program management, construction management and operations and maintenance services. The ownership percentage of these joint ventures is typically representative of the work to be performed or the amount of risk assumed by each joint venture partner. Some of these joint ventures are considered variable interest. We have consolidated all joint ventures for which we have control. For all others, our portion of the earnings is recorded in equity in earnings of joint ventures. See Note 5 in the notes to our consolidated financial statements.

Other than normal property and equipment additions and replacements, expenditures to further the implementation of our Enterprise Resource Planning system, commitments under our incentive compensation programs, amounts we may expend to repurchase stock under our stock repurchase program and acquisitions from time to time, we currently do not have any significant capital expenditures or outlays planned except as described below. 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 above, as of December 31, 2017, there was approximately $515.7 million outstanding under standby letters of credit issued primarily 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 (measured as the difference between the fair value of plan assets and the projected benefit obligation) of our pension benefit plans. The total amounts of employer contributions paid for the three months ended December 31, 2017 were $2.5 million for U.S. plans and $6.8 million for non-U.S. plans. Funding requirements for each plan are determined based on the local laws of the country where such plan resides. In certain countries, the funding requirements are mandatory while in other countries, they are discretionary. There is a required minimum contribution for one of our domestic plans; however, we may make additional discretionary contributions. In the future, such pension funding may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors. In addition, we have collective bargaining agreements with unions that require us to contribute to various third party multiemployer pension plans that we do not control or manage.

New Accounting Pronouncements and Changes in Accounting

For information regarding recent accounting pronouncements, see Notes to Consolidated Financial Statements included in Part I, Item 1.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Financial Market Risks

Financial Market Risks

We are exposed to market risk, primarily related to foreign currency exchange rates and interest rate exposure of our debt obligations that bear interest based on floating rates. We actively monitor these exposures. Our objective is to reduce, where we deem appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign exchange rates and interest rates. In order to accomplish this objective, we sometimes enter into derivative financial instruments, such as forward contracts and interest rate hedge contracts. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage our exposures. We do not use derivative financial instruments for trading purposes.

Foreign Exchange Rates

We are exposed to foreign currency exchange rate risk resulting from our operations outside of the U.S. We use foreign currency forward contracts from time to time to mitigate foreign currency risk. We limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result of this natural hedge, we generally do not need to hedge foreign currency cash flows for contract work performed. The functional currency of our significant foreign operations is the respective local currency.

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Interest Rates

Our Credit Agreement and certain other debt obligations are subject to variable rate interest which could be adversely affected by an increase in interest rates. As of December 31, 2017, we had $962.3 million in outstanding borrowings under our term credit agreements and our revolving credit facility. Interest on amounts borrowed under these agreements is subject to adjustment based on certain levels of financial performance. The applicable margin that is added to the borrowing’s base rate can range from 0.75% to 2.25%. For the three months ended December 31, 2017, our weighted average floating rate borrowings were $1,514.8 million, or $914.8 million excluding borrowings with effective fixed interest rates due to interest rate swap agreements. If short-term floating interest rates had increased by 1.00%, our interest expense for the three months ended December 31, 2017 would have increased by $2.3 million. We invest our cash in a variety of financial instruments, consisting principally of money market securities or other highly liquid, short-term securities that are subject to minimal credit and market risk.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), were effective as of December 31, 2017 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2017 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.   OTHER INFORMATION

Item 1.  Legal Proceedings

As a government contractor, we are subject to various laws and regulations that are more restrictive than those applicable to non-government contractors. Intense government scrutiny of contractors’ compliance with those laws and regulations through audits and investigations is inherent in government contracting; and from time to time, we receive inquiries, subpoenas, and similar demands related to our ongoing business with government entities. Violations can result in civil or criminal liability as well as suspension or debarment from eligibility for awards of new government contracts or option renewals.

We are involved in various investigations, claims and lawsuits in the normal conduct of our business. We are not always aware that we or our affiliates are under investigation or the status of such matters. Although the outcome of our legal proceedings cannot be predicted with certainty and no assurances can be provided, in the opinion of our management, based upon current information and discussions with counsel, with the exception of the matters in Note 14, “Commitments and Contingencies,” to the financial statements contained in this report to the extent stated therein, none of the investigations, claims and lawsuits in which we are involved is expected to have a material adverse effect on our consolidated financial position, results of operations, cash flows or our ability to conduct business. See Note 14, “Commitments and Contingencies,” to the financial statements contained in this report for a discussion of certain matters to which we are a party. The information set forth in such note is incorporated by reference into this Item 1. From time to time, we establish reserves for litigation when we consider it probable that a loss will occur.

Item 1A.  Risk Factors

We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially adversely affect our operations. The risks described below highlight some of the factors that have affected, and in the future could affect our operations. Additional risks we do not yet know of or that we currently think are immaterial may also affect our business operations. If any of the events or circumstances described in the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected.

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We have not completed our accounting for the tax effects of the United States Tax Cuts and Jobs Act legislation and the final impact of this new tax legislation on our reported results may differ materially from our current estimates.

During the first quarter of 2018, President Trump signed the Tax Cuts and Jobs Act legislation into law (Tax Act). We have not completed our accounting for the tax effects of the Tax Act.  We have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax but we have not made any reasonable estimate of the impact on our indefinite reinvestment of earnings of some foreign subsidiaries. The final impact of the Tax Act on our reported results in fiscal year 2018 and beyond may differ from the estimates provided in this periodic report, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, future guidance that may be issued, and other actions we may take as a result of the Tax Act that are different from that presently contemplated.

Demand for our services is cyclical and may be vulnerable to sudden economic downturns and reductions in government and private industry spending. If economic conditions remain uncertain and/or weaken, our revenue and profitability could be adversely affected.

Demand for our services is cyclical and may be vulnerable to sudden economic downturns and reductions in government and private industry spending that result in clients delaying, curtailing or canceling proposed and existing projects. For example, commodity price volatility has previously impacted our oil and gas business and business regions whose economies are substantially dependent on commodities prices such as the Middle East and has also impacted North American oil and gas clients’ investment decisions. In addition, our clients may find it more difficult to raise capital in the future to fund their projects due to uncertainty in the municipal and general credit markets.

Where economies are weakening, our clients may demand more favorable pricing or other terms while their ability to pay our invoices or to pay them in a timely manner may be adversely affected. Our government clients may face budget deficits that prohibit them from funding proposed and existing projects. If economic conditions remain uncertain and/or weaken and/or government spending is reduced, our revenue and profitability could be adversely affected.

We depend on long-term government contracts, some of which are only funded on an annual basis. If appropriations for funding are not made in subsequent years of a multiple-year contract, we may not be able to realize all of our anticipated revenue and profits from that project.

A substantial majority of our revenue is derived from contracts with agencies and departments of national, state and local governments. During fiscal 2017 and 2016, approximately 48% and 47%, respectively, of our revenue was derived from contracts with government entities.

Most government contracts are subject to the government’s budgetary approval process. Legislatures typically appropriate funds for a given program on a year-by-year basis, even though contract performance may take more than one year. In addition, public-supported financing such as state and local municipal bonds may be only partially raised to support existing infrastructure projects. As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each fiscal year. These appropriations, and the timing of payment of appropriated amounts, may be influenced by, among other things, the state of the economy, competing priorities for appropriation, changes in administration or control of legislatures and the timing and amount of tax receipts and the overall level of government expenditures. Similarly, the impact of an economic downturn on state and local governments may make it more difficult for them to fund infrastructure projects. If appropriations are not made in subsequent years on our government contracts, then we will not realize all of our potential revenue and profit from that contract.

If we are unable to win or renew government contracts during regulated procurement processes, our operations and financial results would be harmed.

Government contracts are awarded through a regulated procurement process. The federal government has awarded multi-year contracts with pre-established terms and conditions, such as indefinite delivery contracts, that generally require those contractors that have previously been awarded the indefinite delivery contract to engage in an additional competitive bidding process before a task order is issued. In addition, the federal government has also awarded federal contracts based on a low-price, technically acceptable criteria emphasizing price over qualitative factors, such as past performance. As a result of these competitive pricing pressures, our profit margins on future federal contracts may be reduced and may require us to make sustained efforts to reduce costs in order to realize revenues and profits under government contracts. If we are not successful in reducing the amount of costs we incur, our profitability on government contracts will be negatively impacted. In addition, we may not be awarded government contracts because of existing government policies designed to protect small businesses and under-represented minority contractors. Our inability to win or renew government contracts during regulated procurement processes could harm our operations and reduce our profits and revenues.

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Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue.

Most government contracts may be modified, curtailed or terminated by the government either at its discretion or upon the default of the contractor. If the government terminates a contract at its discretion, then we typically are able to recover only costs incurred or committed, settlement expenses and profit on work completed prior to termination, which could prevent us from recognizing all of our potential revenue and profits from that contract. In addition, for certain assignments, the U.S. government may attempt to “insource” the services to government employees rather than outsource to a contractor. If a government terminates a contract due to our default, we could be liable for excess costs incurred by the government in obtaining services from another source.

Our contracts with governmental agencies are subject to audit, which could result in adjustments to reimbursable contract costs or, if we are charged with wrongdoing, possible temporary or permanent suspension from participating in government programs.

Our books and records are subject to audit by the various governmental agencies we serve and their representatives. These audits can result in adjustments to the amount of contract costs we believe are reimbursable by the agencies and the amount of our overhead costs allocated to the agencies. If such matters are not resolved in our favor, they could have a material adverse effect on our business. In addition, if one of our subsidiaries is charged with wrongdoing as a result of an audit, that subsidiary, and possibly our company as a whole, could be temporarily suspended or could be prohibited from bidding on and receiving future government contracts for a period of time. Furthermore, as a government contractor, we are subject to an increased risk of investigations, criminal prosecution, civil fraud actions, whistleblower lawsuits and other legal actions and liabilities to which purely private sector companies are not, the results of which could materially adversely impact our business. For example, a qui tam lawsuit related to our affiliate, URS Energy and Construction, was unsealed in 2016. Qui tam lawsuits typically allege that we have made false statements or certifications in connection with claims for payment, or improperly retained overpayments, from the government. These suits may remain under seal (and hence, be unknown to us) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff.

Our substantial leverage and significant debt service obligations could adversely affect our financial condition and our ability to fulfill our obligations and operate our business.

We had approximately $4.0 billion of indebtedness (excluding intercompany indebtedness) outstanding as of December 31, 2017, of which $1.1 billion was secured obligations (exclusive of $54.8 million of outstanding undrawn letters of credit) and we have an additional $915.2 million of availability under our Credit Agreement (after giving effect to outstanding letters of credit), all of which would be secured debt, if drawn. Our financial performance could be adversely affected by our substantial leverage. We may also incur significant additional indebtedness in the future, subject to certain conditions.

This high level of indebtedness could have important negative consequences to us, including, but not limited to:

·we may have difficulty satisfying our obligations with respect to outstanding debt obligations;

·we may have difficulty obtaining financing in the future for working capital, acquisitions, capital expenditures or other purposes;

·we may need to use all, or a substantial portion, of our available excess cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities, including, but not limited to, working capital requirements, acquisitions, capital expenditures or other general corporate or business activities;

·our debt level increases our vulnerability to general economic downturns and adverse industry conditions;

·our debt level could limit our flexibility in planning for, or reacting to, changes in our business and in our industry in general;

·our substantial amount of debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors that have less debt;

·we may have increased borrowing costs;

·our clients, surety providers or insurance carriers may react adversely to our significant debt level;

·we may have insufficient funds, and our debt level may also restrict us from raising the funds necessary, to retire certain of our debt instruments tendered to us upon maturity of our debt or the occurrence of a change of control, which would constitute an event of default under certain of our debt instruments; and

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·our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, require us to maintain specified financial ratios and limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects.

Our high level of indebtedness requires that we use a substantial portion of our cash flow from operations to pay principal of, and interest on, our indebtedness, which will reduce the availability of cash to fund working capital requirements, future acquisitions, capital expenditures or other general corporate or business activities.

In addition, a portion of our indebtedness bears interest at variable rates, including borrowings under our Credit Agreement. If market interest rates increase, debt service on our variable-rate debt will rise, which could adversely affect our cash flow, results of operations and financial position. Although we may employ hedging strategies such that a portion of the aggregate principal amount of our term loans carries a fixed rate of interest, any hedging arrangement put in place may not offer complete protection from this risk. Additionally, the remaining portion of borrowings under our Credit Agreement that is not hedged will be subject to changes in interest rates.

The Budget Control Act of 2011 could significantly reduce U.S. government spending for the services we provide.

Under the Budget Control Act of 2011, an automatic sequestration process, or across-the-board budget cuts (half of which were defense-related), was triggered when the Joint Select Committee on Deficit Reduction, a committee of twelve members of Congress, failed to agree on a deficit reduction plan for the U.S. federal budget. Although the Bipartisan Budget Act of 2013 provides some sequester relief until the end of 2018, absent additional legislative or other remedial action, the sequestration requires reduced U.S. federal government spending from fiscal 2018 through fiscal 2025. A significant reduction in federal government spending or a change in budgetary priorities could reduce demand for our services, cancel or delay federal projects, and result in the closure of federal facilities and significant personnel reductions, which could have a material adverse effect on our results of operations and financial condition.

Our operations worldwide expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.

During fiscal 2017, revenue attributable to our services provided outside of the United States to non-U.S. clients was approximately 28% of our total revenue. There are risks inherent in doing business internationally, including:

·imposition of governmental controls and changes in laws, regulations or policies;

·political and economic instability, such as in the Middle East and Africa;

·civil unrest, acts of terrorism, force majeure, war, or other armed conflict;

·changes in U.S. and other national government trade policies affecting the markets for our services;

·changes in regulatory practices, tariffs and taxes;

·potential non-compliance with a wide variety of laws and regulations, including anti-corruption, export control and anti-boycott laws and similar non-U.S. laws and regulations;

·changes in labor conditions;

·logistical and communication challenges; and

·currency exchange rate fluctuations, devaluations and other conversion restrictions.

Any of these factors could have a material adverse effect on our business, results of operations or financial condition.

In addition, Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt have cut diplomatic ties and restricted business with Qatar by closing off access to that country with an air, sea and land traffic embargo. During the economic embargo, products cannot be shipped directly to Qatar from the UAE, Saudi Arabia or Bahrain and financial services may be limited. Our Qatarian business is a significant part of our Middle East operations with approximately one thousand employees. The economic embargo may make it difficult to complete ongoing Qatarian projects and could reduce future demand for our services.

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We operate in many different jurisdictions and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws.

The U.S. Foreign Corrupt Practices Act (FCPA) and similar worldwide anti-corruption laws, including the U.K. Bribery Act of 2010, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our internal policies mandate compliance with these anti-corruption laws, including the requirements to maintain accurate information and internal controls which may fall within the purview of the FCPA, its books and records provisions or its anti-bribery provisions. We operate in many parts of the world that have experienced governmental corruption to some degree; and, in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices. Despite our training and compliance programs, we cannot assure that our internal control policies and procedures always will protect us from reckless or criminal acts committed by our employees or agents. Our continued expansion outside the U.S., including in developing countries, could increase the risk of such violations in the future. In addition, from time to time, government investigations of corruption in construction-related industries affect us and our peers. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations or financial condition.

We work in international locations where there are high security risks, which could result in harm to our employees and contractors or material costs to us.

Some of our services are performed in high-risk locations, such as the Middle East, Africa, and Southwest Asia, where the country or location is suffering from political, social or economic problems, or war or civil unrest. In those locations where we have employees or operations, we may incur material costs to maintain the safety of our personnel. Despite these precautions, the safety of our personnel in these locations may continue to be at risk. Acts of terrorism and threats of armed conflicts in or around various areas in which we operate could limit or disrupt markets and our operations, including disruptions resulting from the evacuation of personnel, cancellation of contracts, or the loss of key employees, contractors or assets.

Many of our project sites are inherently dangerous workplaces. Failure to maintain safe work sites and equipment could result in environmental disasters, employee deaths or injuries, reduced profitability, the loss of projects or clients and possible exposure to litigation.

Our project sites often put our employees and others in close proximity with mechanized equipment, moving vehicles, chemical and manufacturing processes, and highly regulated materials. On some project sites, we may be responsible for safety and, accordingly, we have an obligation to implement effective safety procedures. If we fail to implement these procedures or if the procedures we implement are ineffective, we may suffer the loss of or injury to our employees, as well as expose ourselves to possible litigation. As a result, our failure to maintain adequate safety standards and equipment could result in reduced profitability or the loss of projects or clients, and could have a material adverse impact on our business, financial condition, and results of operations.

Cyber security breaches of our systems and information technology could adversely impact our ability to operate.

We develop, install and maintain information technology systems for ourselves, as well as for customers. Client contracts for the performance of information technology services, as well as various privacy and securities laws, require us to manage and protect sensitive and confidential information, including federal and other government information, from disclosure. We also need to protect our own internal trade secrets and other business confidential information from disclosure. We face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to our and our clients’ proprietary or classified information. We rely on industry-accepted security measures and technology to securely maintain all confidential and proprietary information on our information systems. We have devoted and will continue to devote significant resources to the security of our computer systems, but they may still be vulnerable to these threats. A user who circumvents security measures could misappropriate confidential or proprietary information, including information regarding us, our personnel and/or our clients, or cause interruptions or malfunctions in operations. As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.

An impairment charge of goodwill could have a material adverse impact on our financial condition and results of operations.

Because we have grown in part through acquisitions, goodwill and intangible assets-net represent a substantial portion of our assets. Under generally accepted accounting principles in the United States (GAAP), we are required to test goodwill carried in our Consolidated Balance Sheets for possible impairment on an annual basis based upon a fair value approach and whenever events occur that indicate impairment could exist. These events or circumstances could include a significant change in the business climate, including a significant sustained decline in a reporting unit’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of our business, a significant sustained decline in our market capitalization and other factors.

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In addition, if we experience a decrease in our stock price and market capitalization over a sustained period, we would have to record an impairment charge in the future. The amount of any impairment could be significant and could have a material adverse impact on our financial condition and results of operations for the period in which the charge is taken.

Our business and operating results could be adversely affected by losses under fixed-price or guaranteed maximum price contracts.

Fixed-price contracts require us to either perform all work under the contract for a specified lump-sum or to perform an estimated number of units of work at an agreed price per unit, with the total payment determined by the actual number of units performed. In addition, we may enter guaranteed maximum price contracts where we guarantee a price or delivery date. At September 30, 2017, our contracted backlog was comprised of 42%, 30%, and 28% cost-reimbursable, guaranteed maximum price, and fixed-price contracts, respectively.  Fixed-price contracts expose us to a number of risks not inherent in cost-plus and time and material price contracts, including underestimation of costs, ambiguities in specifications, unforeseen costs or difficulties, problems with new technologies, delays beyond our control, fluctuations in profit margins, failures of subcontractors to perform and economic or other changes that may occur during the contract period. In addition, our exposure to construction cost overruns may increase over time as we increase our construction services. Losses under fixed-price or guaranteed contracts could be substantial and adversely impact our results of operations.

Our failure to meet contractual schedule or performance requirements that we have guaranteed could adversely affect our operating results.

In certain circumstances, we can incur liquidated or other damages if we do not achieve project completion by a scheduled date. If we or an entity for which we have provided a guarantee subsequently fails to complete the project as scheduled and the matter cannot be satisfactorily resolved with the client, we may be responsible for cost impacts to the client resulting from any delay or the cost to complete the project. Our costs generally increase from schedule delays and/or could exceed our projections for a particular project. In addition, project performance can be affected by a number of factors beyond our control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors. Material performance problems for existing and future contracts could cause actual results of operations to differ from those anticipated by us and also could cause us to suffer damage to our reputation within our industry and client base.

We may not be able to maintain adequate surety and financial capacity necessary for us to successfully bid on and win contracts.

In line with industry practice, we are often required to provide surety bonds, standby letters of credit or corporate guarantees to our clients that indemnify the customer should our affiliate fail to perform its obligations under the terms of a contract. As of December 31, 2017 and September 30, 2017, we were contingently liable for $5.7 billion and $5.7 billion, respectively, in issued surety bonds primarily to support project execution. A surety may issue a performance or payment bond to guarantee to the client that our affiliate will perform under the terms of a contract. If our affiliate fails to perform under the terms of the contract, then the client may demand that the surety provide the contracted services under the performance or payment bond. In addition, we would typically have obligations to indemnify the surety for any loss incurred in connection with the bond. If a surety bond or a letter of credit is required for a particular project and we are unable to obtain an appropriate surety bond or letter of credit, we may not be able to pursue that project which in turn could have a material adverse impact on our business, financial condition, results of operations, and cash flows.

We conduct a portion of our operations through joint venture entities, over which we may have limited control.

Approximately 13% of our fiscal 2017 revenue was derived from our operations through joint ventures or similar partnership arrangements, where control may be shared with unaffiliated third parties. As with most joint venture arrangements, differences in views among the joint venture participants may result in delayed decisions or disputes. We also cannot control the actions of our joint venture partners; and we typically have joint and several liability with our joint venture partners under the applicable contracts for joint venture projects. These factors could potentially adversely impact the business and operations of a joint venture and, in turn, our business and operations.

Operating through joint ventures in which we are minority holders results in us having limited control over many decisions made with respect to projects and internal controls relating to projects. Sales of our services provided to our unconsolidated joint ventures were approximately 2% of our fiscal 2017 revenue. We generally do not have control of these unconsolidated joint ventures. These joint ventures may not be subject to the same requirements regarding internal controls and internal control over financial reporting that we follow. As a result, internal control problems may arise with respect to these joint ventures, which could have a material adverse effect on our financial condition and results of operations and could also affect our reputation in the industries we serve.

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We participate in certain joint ventures where we provide guarantees and may be adversely impacted by the failure of the joint venture or its participants to fulfill their obligations.

We have investments in and commitments to certain joint ventures with unrelated parties, including in connection with construction services, government services, and the investment activities of ACAP. Real estate and infrastructure joint ventures are inherently risky and may result in future losses since real estate markets are impacted by economic trends and government policies that we do not control. These joint ventures from time to time may borrow money to help finance their activities and in certain circumstances, we are required to provide guarantees of certain obligations of our affiliated entities. In addition, in connection with the investment activities of ACAP, the Company provides guarantees of certain obligations, including guarantees for completion of projects, repayment of debt, environmental indemnity obligations and other lender required guarantees. If these entities are not able to honor their obligations under the guarantees, we may be required to expend additional resources or suffer losses, which could be significant.

Systems and information technology interruption and unexpected data or vendor loss could adversely impact our ability to operate.

We rely heavily on computer, information and communications technology and related systems to properly operate. From time to time, we experience occasional system interruptions and delays. If we are unable to effectively upgrade our systems and network infrastructure and take other steps to protect our systems, the operation of our systems could be interrupted or delayed. Our computer and communications systems and operations could be damaged or interrupted by natural disasters, telecommunications failures, acts of war or terrorism and similar events or disruptions. Any of these or other events could cause system interruption, delays and loss of critical data, or delay or prevent operations, and adversely affect our operating results.

We also rely in part on third-party software and information technology vendors to run our critical accounting, project management and financial information systems. We depend on our software and information technology vendors to provide long-term software and hardware support for our information systems. Our software and information technology vendors may decide to discontinue further development, integration or long-term software and hardware support for our information systems, in which case we may need to abandon one or more of our current information systems and migrate some or all of our accounting, project management and financial information to other systems, thus increasing our operational expense, as well as disrupting the management of our business operations.

Misconduct by our employees, partners or consultants or our failure to comply with laws or regulations applicable to our business could cause us to lose customers or lose our ability to contract with government agencies.

As a government contractor, misconduct, fraud or other improper activities caused by our employees’, partners’ or consultants’ failure to comply with laws or regulations could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with procurement regulations, environmental regulations, regulations regarding the protection of sensitive government information, legislation regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, and anti-corruption, anti-competition, export control and other applicable laws or regulations. Our failure to comply with applicable laws or regulations, misconduct by any of our employees or consultants or our failure to make timely and accurate certifications to government agencies regarding misconduct or potential misconduct could subject us to fines and penalties, loss of government granted eligibility, cancellation of contracts and suspension or debarment from contracting with government agencies, any of which may adversely affect our business.

We may be required to contribute additional cash to meet our significant underfunded benefit obligations associated with pension benefit plans we manage or multiemployer pension plans in which we participate.

We have defined benefit pension plans for employees in the United States, United Kingdom, Canada, Australia, and Ireland. At September 30, 2017, our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately $553.0 million. In the future, our pension deficits may increase or decrease depending on changes in the levels of interest rates, pension plan performance and other factors that may require us to make additional cash contributions to our pension plans and recognize further increases in our net pension cost to satisfy our funding requirements. If we are forced or elect to make up all or a portion of the deficit for unfunded benefit plans, our results of operations could be materially and adversely affected.

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A multiemployer pension plan is typically established under a collective bargaining agreement with a union to cover the union-represented workers of various unrelated companies. Our collective bargaining agreements with unions will require us to contribute to various multiemployer pension plans; however, we do not control or manage these plans. For the year ended September 30, 2017, we contributed $48.8 million to multiemployer pension plans. Under the Employee Retirement Income Security Act, an employer who contributes to a multiemployer pension plan, absent an applicable exemption, may also be liable, upon termination or withdrawal from the plan, for its proportionate share of the multiemployer pension plan’s unfunded vested benefit. If we terminate or withdraw from a multiemployer plan, absent an applicable exemption (such as for some plans in the building and construction industry), we could be required to contribute a significant amount of cash to fund the multiemployer plan’s unfunded vested benefit, which could materially and adversely affect our financial results; however, since we do not control the multiemployer plans, we are unable to estimate any potential contributions that could be required.

New legal requirements could adversely affect our operating results.

Our business and results of operations could be adversely affected by the passage of new climate change, defense, environmental, infrastructure and other laws, policies and regulations. Growing concerns about climate change and greenhouse gases, such as those adopted under the United Nations COP-21 Paris Agreement or the EPA Clean Power Plan, may result in the imposition of additional environmental regulations for our clients’ fossil fuel projects. For example, legislation, international protocols, regulation or other restrictions on emissions regulations could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services. In addition, relaxation or repeal of laws and regulations, or changes in governmental policies regarding environmental, defense, infrastructure or other industries we serve could result in a decline in demand for our services, which could in turn negatively impact our revenues. We cannot predict when or whether any of these various proposals may be enacted or what their effect will be on us or on our customers.

We may be subject to substantial liabilities under environmental laws and regulations.

Our services are subject to numerous environmental protection laws and regulations that are complex and stringent. Our business involves in part the planning, design, program management, construction and construction management, and operations and maintenance at various sites, including but not limited to, pollution control systems, nuclear facilities, hazardous waste and Superfund sites, contract mining sites, hydrocarbon production, distribution and transport sites, military bases and other infrastructure-related facilities. We also regularly perform work, including oil field and pipeline construction services in and around sensitive environmental areas, such as rivers, lakes and wetlands. In addition, we have contracts with U.S. federal government entities to destroy hazardous materials, including chemical agents and weapons stockpiles, as well as to decontaminate and decommission nuclear facilities. These activities may require us to manage, handle, remove, treat, transport and dispose of toxic or hazardous substances. We also own and operate several properties in the U.S. and Canada that have been used for the storage and maintenance of equipment and upon which hydrocarbons or other wastes may have been disposed or released. Past business practices at companies that we have acquired may also expose us to future unknown environmental liabilities.

Significant fines, penalties and other sanctions may be imposed for non-compliance with environmental laws and regulations, and some environmental laws provide for joint and several strict liabilities for remediation of releases of hazardous substances, rendering a person liable for environmental damage, without regard to negligence or fault on the part of such person. These laws and regulations may expose us to liability arising out of the conduct of operations or conditions caused by others, or for our acts that were in compliance with all applicable laws at the time these acts were performed. For example, there are a number of governmental laws that strictly regulate the handling, removal, treatment, transportation and disposal of toxic and hazardous substances, such as Comprehensive Environmental Response Compensation and Liability Act of 1980, and comparable state laws, that impose strict, joint and several liabilities for the entire cost of cleanup, without regard to whether a company knew of or caused the release of hazardous substances. In addition, some environmental regulations can impose liability for the entire cleanup upon owners, operators, generators, transporters and other persons arranging for the treatment or disposal of such hazardous substances related to contaminated facilities or project sites. Other federal environmental, health and safety laws affecting us include, but are not limited to, the Resource Conservation and Recovery Act, the National Environmental Policy Act, the Clean Air Act, the Clean Air Mercury Rule, the Occupational Safety and Health Act, the Toxic Substances Control Act and the Superfund Amendments and Reauthorization Act and the Energy Reorganization Act of 1974, as well as other comparable national and state laws. Liabilities related to environmental contamination or human exposure to hazardous substances, or a failure to comply with applicable regulations could result in substantial costs to us, including cleanup costs, fines and civil or criminal sanctions, third-party claims for property damage or personal injury or cessation of remediation activities. Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability.

Demand for our oil and gas services fluctuates.

Demand for our oil and natural gas services fluctuates, and we depend on our customers’ willingness to make future expenditures to explore for, develop and produce oil and natural gas in the U.S. and Canada. For example, the past volatility in the price of oil and natural gas has significantly decreased existing and future projects. Our customers’ willingness to undertake future projects depends largely upon prevailing industry conditions that are influenced by numerous factors over which we have no control, such as the anticipated future prices for natural gas and crude oil.

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Failure to successfully integrate acquisitions could harm our operating results.

We have grown in part as a result of acquisitions. For example, in July 2017 we acquired Shimmick Construction Company, Inc. We cannot assure that suitable acquisitions or investment opportunities will continue to be identified or that any of these transactions can be consummated on favorable terms or at all. Any future acquisitions will involve various inherent risks, such as:

·our ability to accurately assess the value, strengths, weaknesses, liabilities and potential profitability of acquisition candidates;

·the potential loss of key personnel of an acquired business;

·increased burdens on our staff and on our administrative, internal control and operating systems, which may hinder our legal and regulatory compliance activities;

·liabilities related to pre-acquisition activities of an acquired business and the burdens on our staff and resources to comply with, conduct or resolve investigations into such activities;

·post-acquisition integration challenges; and

·post-acquisition deterioration in an acquired business that could result in lower or negative earnings contribution and/or goodwill impairment charges.

Furthermore, during the acquisition process and thereafter, our management may need to assume significant transaction-related responsibilities, which may cause them to divert their attention from our existing operations. If our management is unable to successfully integrate acquired companies, our operating results could be harmed. In addition, even if the operations of an acquisition are integrated successfully, we may not realize the full benefits of the acquisition, including the synergies, cost savings, or sales or growth opportunities that we expect. These benefits may not be achieved within the anticipated time frame, or at all.

Although we expect to realize certain benefits as a result of our acquisitions, there is the possibility that we may be unable to successfully integrate our businesses in order to realize the anticipated benefits of the acquisitions or do so within the intended timeframe.

We have been, and will continue to be, required to devote significant management attention and resources to integrating the business practices and operations of the acquired companies with our business. Difficulties we may encounter as part of the integration process include the following:

·the consequences of a change in tax treatment, including the costs of integration and compliance and the possibility that the full benefits anticipated from the acquisition will not be realized;

·any delay in the integration of management teams, strategies, operations, products and services;

·diversion of the attention of each company’s management as a result of the acquisition;

·differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration;

·the ability to retain key employees;

·the ability to create and enforce uniform standards, controls, procedures, policies and information systems;

·the challenge of integrating complex systems, technology, networks and other assets into those of ours in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

·potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition, including costs to integrate beyond current estimates;

·the ability to deduct or claim certain tax attributes or benefits such as operating losses, business or foreign tax credits; and

·the disruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies.

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Any of these factors could adversely affect each company’s ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the acquisition or could reduce each company’s earnings or otherwise adversely affect our business and financial results.

The agreements governing our debt contain a number of restrictive covenants which will limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest.

The Credit Agreement and the indentures governing our debt contain a number of significant covenants that impose operating and other restrictions on us and our subsidiaries. Such restrictions affect or will affect, and in many respects limit or prohibit, among other things, our ability and the ability of certain of our subsidiaries to:

·incur additional indebtedness;

·create liens;

·pay dividends and make other distributions in respect of our equity securities;

·redeem our equity securities;

·distribute excess cash flow from foreign to domestic subsidiaries;

·make certain investments or certain other restricted payments;

·sell certain kinds of assets;

·enter into certain types of transactions with affiliates; and

·effect mergers or consolidations.

In addition, our Credit Agreement also requires us to comply with a consolidated interest coverage ratio and consolidated leverage ratio. Our ability to comply with these ratios may be affected by events beyond our control.

These restrictions could limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans, and could adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.

A breach of any of these covenants or our inability to comply with the required financial ratios could result in a default under all or certain of our debt instruments. If an event of default occurs, our creditors could elect to:

·declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable;

·require us to apply all of our available cash to repay the borrowings; or

·prevent us from making debt service payments on certain of our borrowings.

If we were unable to repay or otherwise refinance these borrowings when due, the applicable creditors could sell the collateral securing certain of our debt instruments, which constitutes substantially all of our domestic and foreign, wholly owned subsidiaries’ assets.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our Credit Agreement are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. A 1.00% increase in such interest rates would increase total interest expense under our Credit Agreement for the three months ended December 31, 2017 by $2.3 million, including the effect of our interest rate swaps. We may, from time to time, enter into additional interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk and could be subject to credit risk themselves.

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If we are unable to continue to access credit on acceptable terms, our business may be adversely affected.

The changing nature of the global credit markets could make it more difficult for us to access funds, refinance our existing indebtedness, enter into agreements for uncommitted bond facilities and new indebtedness, replace our existing revolving and term credit agreements or obtain funding through the issuance of our securities. We use credit facilities to support our working capital and acquisition needs. There is no guarantee that we can continue to renew our credit facility on terms as favorable as those in our existing credit facility and, if we are unable to do so, our costs of borrowing and our business may be adversely affected.

Our ability to grow and to compete in our industry will be harmed if we do not retain the continued services of our key technical and management personnel and identify, hire, and retain additional qualified personnel.

There is strong competition for qualified technical and management personnel in the sectors in which we compete. We may not be able to continue to attract and retain qualified technical and management personnel, such as engineers, architects and project managers, who are necessary for the development of our business or to replace qualified personnel in the timeframe demanded by our clients. Our planned growth may place increased demands on our resources and will likely require the addition of technical and management personnel and the development of additional expertise by existing personnel. In addition, we may occasionally enter into contracts before we have hired or retained appropriate staffing for that project. Also, some of our personnel hold government granted eligibility that may be required to obtain certain government projects. If we were to lose some or all of these personnel, they would be difficult to replace. In addition, we rely heavily upon the expertise and leadership of our senior management. If we are unable to retain executives and other key personnel, the roles and responsibilities of those employees will need to be filled, which may require that we devote time and resources to identify, hire and integrate new employees. Loss of the services of, or failure to recruit, key technical and management personnel could limit our ability to successfully complete existing projects and compete for new projects.

Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications we and they need to perform services for our customers.

A number of government programs require contractors to have certain kinds of government granted eligibility, such as security clearance credentials. Depending on the project, eligibility can be difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain the necessary eligibility, including local ownership requirements, we may not be able to win new business, and our existing customers could terminate their contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract.

Our industry is highly competitive and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share.

We are engaged in a highly competitive business. The markets we serve are highly fragmented and we compete with a large number of regional, national and international companies. Certain of these competitors have greater financial and other resources than we do. Others are smaller and more specialized, and concentrate their resources in particular areas of expertise. The extent of our competition varies according to the particular markets and geographic area. In addition, the technical and professional aspects of some of our services generally do not require large upfront capital expenditures and provide limited barriers against new competitors.

The degree and type of competition we face is also influenced by the type and scope of a particular project. Our clients make competitive determinations based upon qualifications, experience, performance, reputation, technology, customer relationships and ability to provide the relevant services in a timely, safe and cost-efficient manner. Increased competition may result in our inability to win bids for future projects and loss of revenue, profitability and market share.

If we extend a significant portion of our credit to clients in a specific geographic area or industry, we may experience disproportionately high levels of collection risk and nonpayment if those clients are adversely affected by factors particular to their geographic area or industry.

Our clients include public and private entities that have been, and may continue to be, negatively impacted by the changing landscape in the global economy. While outside of the U.S. federal government, no one client accounted for over 10% of our revenue for fiscal 2017, we face collection risk as a normal part of our business where we perform services and subsequently bill our clients for such services, or when we make equity investments in majority or minority controlled large-scale client projects and other long-term capital projects before the project completes operational status or completes its project financing. In the event that we have concentrated credit risk from clients in a specific geographic area or industry, continuing negative trends or a worsening in the financial condition of that specific geographic area or industry could make us susceptible to disproportionately high levels of default by those clients. Such defaults could materially adversely impact our revenues and our results of operations.

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Our services expose us to significant risks of liability and our insurance policies may not provide adequate coverage.

Our services involve significant risks of professional and other liabilities that may substantially exceed the fees that we derive from our services. In addition, we sometimes contractually assume liability to clients on projects under indemnification agreements. We cannot predict the magnitude of potential liabilities from the operation of our business. In addition, in the ordinary course of our business, we frequently make professional judgments and recommendations about environmental and engineering conditions of project sites for our clients. We may be deemed to be responsible for these judgments and recommendations if such judgments and recommendations are later determined to be inaccurate. Any unfavorable legal ruling against us could result in substantial monetary damages or even criminal violations.

Our professional liability policies cover only claims made during the term of the policy. Additionally, our insurance policies may not protect us against potential liability due to various exclusions in the policies and self-insured retention amounts. Partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse effect on our business.

Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations.

We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. If any of our third-party insurers fail, suddenly cancel our coverage or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase and the management of our business operations would be disrupted. In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

If we do not have adequate indemnification for our services related to nuclear materials, it could adversely affect our business and financial condition.

We provide services to the Department of Energy and the nuclear energy industry in the ongoing maintenance and modification, as well as the decontamination and decommissioning, of nuclear energy plants. Indemnification provisions under the Price-Anderson Act available to nuclear energy plant operators and Department of Energy contractors do not apply to all liabilities that we might incur while performing services as a radioactive materials cleanup contractor for the Department of Energy and the nuclear energy industry. If the Price-Anderson Act’s indemnification protection does not apply to our services or if our exposure occurs outside the U.S., our business and financial condition could be adversely affected either by our client’s refusal to retain us, by our inability to obtain commercially adequate insurance and indemnification, or by potentially significant monetary damages we may incur.

We also provide services to the United Kingdom’s Nuclear Decommissioning Authority (NDA) relating to clean-up and decommissioning of the United Kingdom’s public sector nuclear sites. Indemnification provisions under the Nuclear Installations Act 1965 available to nuclear site licensees, the Atomic Energy Authority, and the Crown, and contractual indemnification from the NDA do not apply to all liabilities that we might incur while performing services as a clean-up and decommissioning contractor for the NDA. If the Nuclear Installations Act 1965 and contractual indemnification protection does not apply to our services or if our exposure occurs outside the United Kingdom, our business and financial condition could be adversely affected either by our client’s refusal to retain us, by our inability to obtain commercially adequate insurance and indemnification, or by potentially significant monetary damages we may incur.

Our backlog of uncompleted projects under contract is subject to unexpected adjustments and cancellations and, thus may not accurately reflect future revenue and profits.

At December 31, 2017, our contracted backlog was approximately $23.4 billion, our awarded backlog was approximately $22.0 billion and our unconsolidated joint venture backlog was approximately $3.4 billion for a total backlog of $48.8 billion. Our contracted backlog includes revenue we expect to record in the future from signed contracts and, in the case of a public sector client, where the project has been funded. Our awarded backlog includes revenue we expect to record in the future where we have been awarded the work, but the contractual agreement has not yet been signed. We cannot guarantee that future revenue will be realized from either category of backlog or, if realized, will result in profits. Many projects may remain in our backlog for an extended period of time because of the size or long-term nature of the contract. In addition, from time to time, projects are delayed, scaled back or canceled. These types of backlog reductions adversely affect the revenue and profits that we ultimately receive from contracts reflected in our backlog.

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We have submitted claims to clients for work we performed beyond the initial scope of some of our contracts. If these clients do not approve these claims, our results of operations could be adversely impacted.

We typically have pending claims submitted under some of our contracts for payment of work performed beyond the initial contractual requirements for which we have already recorded revenue. In general, we cannot guarantee that such claims will be approved in whole, in part, or at all. Often, these claims can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to accurately predict when these claims will be fully resolved. When these types of events occur and unresolved claims are pending, we have used working capital in projects to cover cost overruns pending the resolution of the relevant claims. If these claims are not approved, our revenue may be reduced in future periods.

In conducting our business, we depend on other contractors, subcontractors and equipment and material providers. If these parties fail to satisfy their obligations to us or other parties or if we are unable to maintain these relationships, our revenue, profitability and growth prospects could be adversely affected.

We depend on contractors, subcontractors and equipment and material providers in conducting our business. There is a risk that we may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontractor, or our failure to extend existing task orders or issue new task orders under a subcontract. Also, to the extent that we cannot acquire equipment and materials at reasonable costs, or if the amount we are required to pay exceeds our estimates, our ability to complete a project in a timely fashion or at a profit may be impaired. In addition, if any of our subcontractors fail to deliver on a timely basis the agreed-upon supplies and/or perform the agreed-upon services, our ability to fulfill our obligations as a prime contractor may be jeopardized; we could be held responsible for such failures and/or we may be required to purchase the supplies or services from another source at a higher price. This may reduce the profit to be realized or result in a loss on a project for which the supplies or services are needed.

We also rely on relationships with other contractors when we act as their subcontractor or joint venture partner. Our future revenue and growth prospects could be adversely affected if other contractors eliminate or reduce their subcontracts or joint venture relationships with us, or if a government agency terminates or reduces these other contractors’ programs, does not award them new contracts or refuses to pay under a contract. In addition, due to “pay when paid” provisions that are common in subcontracts in certain countries, including the U.S., we could experience delays in receiving payment if the prime contractor experiences payment delays.

If clients use our reports or other work product without appropriate disclaimers or in a misleading or incomplete manner, or if our reports or other work product are not in compliance with professional standards and other regulations, our business could be adversely affected.

The reports and other work product we produce for clients sometimes include projections, forecasts and other forward-looking statements. Such information by its nature is subject to numerous risks and uncertainties, any of which could cause the information produced by us to ultimately prove inaccurate. While we include appropriate disclaimers in the reports that we prepare for our clients, once we produce such written work product, we do not always have the ability to control the manner in which our clients use such information. As a result, if our clients reproduce such information to solicit funds from investors for projects without appropriate disclaimers and the information proves to be incorrect, or if our clients reproduce such information for potential investors in a misleading or incomplete manner, our clients or such investors may threaten to or file suit against us for, among other things, securities law violations. For example, in August 2016, AECOM Australia and other parties entered into a settlement related to, among other things, alleged deficiencies in AECOM Australia’s traffic forecast. If we were found to be liable for any claims related to our client work product, our business could be adversely affected.

In addition, our reports and other work product may need to comply with professional standards, licensing requirements, securities regulations and other laws and rules governing the performance of professional services in the jurisdiction where the services are performed. We could be liable to third parties who use or rely upon our reports and other work product even if we are not contractually bound to those third parties. These events could in turn result in monetary damages and penalties.

Failure to adequately protect, maintain, or enforce our rights in our intellectual property may adversely limit our competitive position.

Our success depends, in part, upon our ability to protect our intellectual property. We rely on a combination of intellectual property policies and other contractual arrangements to protect much of our intellectual property where we do not believe that trademark, patent or copyright protection is appropriate or obtainable. Trade secrets are generally difficult to protect. Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our intellectual property or otherwise take appropriate steps to enforce our rights. Failure to adequately protect, maintain, or enforce our intellectual property rights may adversely limit our competitive position.

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Negotiations with labor unions and possible work actions could divert management attention and disrupt operations. In addition, new collective bargaining agreements or amendments to agreements could increase our labor costs and operating expenses.

We regularly negotiate with labor unions and enter into collective bargaining agreements. The outcome of any future negotiations relating to union representation or collective bargaining agreements may not be favorable to us. We may reach agreements in collective bargaining that increase our operating expenses and lower our net income as a result of higher wages or benefit expenses. In addition, negotiations with unions could divert management attention and disrupt operations, which may adversely affect our results of operations. If we are unable to negotiate acceptable collective bargaining agreements, we may have to address the threat of union-initiated work actions, including strikes. Depending on the nature of the threat or the type and duration of any work action, these actions could disrupt our operations and adversely affect our operating results.

Our charter documents contain provisions that may delay, defer or prevent a change of control.

Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to stockholders. These provisions include the following:

·ability of our Board of Directors to authorize the issuance of preferred stock in series without stockholder approval;

·vesting of exclusive authority in our Board of Directors to determine the size of the board (subject to limited exceptions) and to fill vacancies;

·advance notice requirements for stockholder proposals and nominations for election to our Board of Directors; and

·prohibitions on our stockholders from acting by written consent.

Changes in tax laws could increase our worldwide tax rate and materially affect our results of operations.

Many international legislative and regulatory bodies have proposed and/or enacted legislation and begun investigations of the tax practices of multinational companies and, in the European Union (EU), the tax policies of certain EU member states. Since 2013, the European Commission (EC) has been investigating tax rulings granted by tax authorities in a number of EU member states with respect to specific multinational corporations to determine whether such rulings comply with EU rules on state aid, as well as more recent investigations of the tax regimes of certain EU member states. If the EC determines that a tax ruling or tax regime violates the state aid restrictions, the tax authorities of the affected EU member state may be required to collect back taxes for the period of time covered by the ruling. Due to the large scale of our U.S. and international business activities, many of these proposed and enacted changes to the taxation of our activities could increase our worldwide effective tax rate and harm results of operations. Tax changes,  including limitations on the ability to defer U.S. taxation on earnings outside of the U.S., could increase our worldwide effective tax rate and harm results of operations.

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

Stock Repurchase Program

On September 21, 2017, the Company’s Board of Directors announced a new capital allocation policy that authorized the repurchase of up to $1.0 billion in AECOM common stock. Stock repurchases can be made through open market purchases or other methods, including pursuant to a Rule 10b5-1 plan. Since August 2011, the Company has purchased a total of 27.4 million shares at an average price of $24.10 per share, for a total cost of $660.1 million under a previous stock repurchase program. No stock repurchases were made under the new or the previous stock repurchase program in the three months ended December 31, 2017.

Item 4.  Mine Safety Disclosure

The Company does not act as the owner of any mines, but we may act as a mining operator as defined under the Federal Mine Safety and Health Act of 1977 where we may be a lessee of a mine, a person who operates, controls or supervises such mine, or an independent contractor performing services or construction of such mine. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.

Item 6.  Exhibits

The following documents are filed as Exhibits to the Report:

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			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	11/16/2017
10.1#	AECOM Technology Corporation Change in Control Severance Policy for Key Executives — Revised Schedule A				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
95	Mine Safety Disclosure				X
101.INS	XBRL Instance Document				X
101.SCH	XBRL Taxonomy Extension Schema Document				X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				X

# Management contract or compensatory plan or arrangement.

*Document has been furnished and not filed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AECOM
Date: February 7, 2018	By:	/S/ W. TROY RUDD
		W. Troy Rudd
		Executive Vice President and Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

AECOM TECHNOLOGY CORPORATION

CHANGE IN CONTROL SEVERANCE POLICY FOR KEY EXECUTIVES

Section 1.Introduction

This AECOM Technology Corporation Change in Control Severance Policy for Key Executives, as may be amended from time to time (the “Policy”) is effective as of March 5, 2009 (the “Effective Date”).  The compensation and benefits payable under the Policy are payable in connection with certain Change in Control events that occur after the Effective Date.  The purpose of the Policy is to provide for the payment of severance benefits to Key Executives (as defined below) of AECOM Technology Corporation (the “Company”) or one of its subsidiaries in connection with a Change in Control.  The Policy will be in lieu of and not in addition to any severance benefit arrangement, change of control severance agreement or employment agreement that provides for severance benefits in existence between the Key Executive and the Company (or any subsidiary), notwithstanding the terms of any such arrangement or agreement, and no benefits will be paid under the Policy to any Key Executive unless such Key Executive agrees to forgo any payments or benefits under such other arrangement or agreement.  The Policy is intended to be an unfunded plan that is maintained primarily to provide severance compensation and benefits to a select group of “management or highly compensated employees” within the meaning of Sections 201, 301, and 401 of ERISA, and therefore to be exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA.

Section 2.Definitions

For purposes of the Policy, the following terms are defined as follows:

(a)“Administrator” means the Compensation and Organization Committee of the Board.

(b)“Average Bonus” means (i) if the employee has served as a Key Executive for at least one full fiscal year prior to the fiscal year in which the Termination Date occurs, the average annual bonus awarded to the Key Executive in respect of each of the Company’s three (3) fiscal years preceding the fiscal year in which the Termination Date occurs (or such lesser number of full fiscal years during which the Key Executive was employed by the Company as a Key Executive), (ii) if the employee has not served as a Key Executive for at least one full fiscal year prior to the fiscal year in which the Termination Date occurs (but has been employed by the Company for at least one full fiscal year), the average annual bonus awarded to the Key Executive in each of the Company’s three fiscal years preceding the fiscal year in which the Termination Date occurs (or such lesser number of full fiscal years during which the Key Executive was employed by the Company prior to termination of employment), or (iii) if the employee has been employed by the Company for less than one full fiscal year, the greater of the annualized target bonus amount and the actual prorated bonus amount awarded to the Key Executive for such partial fiscal year.

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(c)“Base Salary” means the Key Executive’s annual base salary as in effect at the time of a Change in Control or a Termination Date, whichever is greater.

(d)“Board” means the Board of Directors of the Company.

(e)“Cause” means, except as otherwise required by applicable law with respect to Key Executives employed outside of the United States and unless otherwise defined in an employment agreement or other written agreement between a Key Executive and the Company (which definition would control in the event of any conflict with the definition in this Section 2(e)), (i) the commission of an act of fraud or theft against the Company; (ii) conviction (including a guilty plea or plea of nolo contendere) of any felony; (iii) conviction (including a guilty plea or plea of nolo contendere) of any misdemeanor involving moral turpitude which could, in the Administrator’s opinion, cause material injury to the Company; (iv) a material violation of any material Company policy; (v) willful or repeated non-performance or substandard performance of material duties to the Company which is not cured within thirty (30) days after written notice thereof to the Key Executive; or (vi) violation of any local, state or federal laws, rules or regulations in connection with or during performance of the Key Executive’s duties to the Company that could, in the Administrator’s opinion, cause material injury to the Company, which violation, if curable, is not cured within thirty (30) days after notice thereof to the Key Executive.

(f)“Change in Control” means the consummation of the first to occur of:

(i)except pursuant to the exception applicable to clause (iii) below, any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities;

(ii)except pursuant to the exception applicable to clause (iii) below, a change in the composition of the Board occurring within a one-year period, as a result of which fewer than a majority of the directors are Incumbent Directors;

(iii)the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation in which the holders of the Company’s outstanding voting securities immediately prior to such merger or consolidation receive, in exchange for their voting securities of the Company in consummation of such merger or consolidation, securities possessing at least fifty percent (50%) of the total voting power represented by the outstanding voting securities of the surviving entity (or ultimate parent thereof) immediately after such merger or consolidation; or

(iv)the consummation of the sale, lease or other disposition by the Company of all or substantially all the Company’s assets.

(g)“Disability” means, except as otherwise required by applicable law with respect to Key Executives employed outside of the United States, that the Key Executive becomes unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

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(h)“Good Reason” means, except as otherwise required by applicable law with respect to Key Executives employed outside of the United States and unless otherwise defined in an employment or other written agreement between a Key Executive and the Company (which definition would control in the event of any conflict with the definition in this Section 2(i)), a termination of a Key Executive’s employment with the Company by the Key Executive, upon written notice within ninety (90) days following the event or circumstance that Employee believes constitutes Good Reason (which notice specifically identifies such event or circumstance) and after giving the Company thirty (30) days to cure such event or circumstance (if curable) after the receipt of such notice, if, other than for Cause, any of the following has occurred: (i) any material reduction in the Key Executive’s Base Salary; (ii) a material reduction in the Key Executive’s authority, duties or responsibilities, (iii) the material breach by the Company (or any subsidiary) of any written employment agreement between the Key Executive and the Company (or any subsidiary) or (iv) the transfer of the Key Executive’s primary workplace by more than fifty (50) miles from the Key Executive’s then existing primary workplace; provided, however, that, in each case, the Key Executive resigns within thirty (30) days after the expiration of the Company’s cure period referred to above.

(i)“Incumbent Directors” means directors who either (i) are members of the Board as of the Effective Date, or (ii) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Board.

(j)“Involuntary Termination” means any termination of the Key Executive’s employment with the Company by the Company for any reason other than Cause or the Key Executive’s death or Disability, or any termination of the Key Executive’s employment with the Company by the Key Executive for Good Reason.

(k)“Key Executive” means an executive employee of the Company or any of its subsidiaries who has been designated by the Administrator as eligible to participate in the Policy and listed on Schedule A attached hereto (as amended from time to time).

(l)“PEP Awards” means performance earnings program awards granted pursuant to the Company’s 2006 Stock Incentive Plan (or any successor or replacement plan).

(m)“PEP Performance Cycle” means the performance cycle set forth in a Key Executive’s PEP Award agreement.

(n)“Termination Date” means the date the Key Executive’s employment with the Company terminates.

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Section 3.Eligibility For Benefits

Subject to the requirements set forth in this Section 3 and the limitations set forth in Section 1, the Company will provide the severance benefits described in Sections 4(a) through (c) of the Policy to a Key Executive whose termination of employment with the Company is an Involuntary Termination that occurs within the period (the “Protection Period”) that (A) begins with the ninetieth (90th) day preceding a Change in Control and (B) ends twenty-four (24) months following such Change in Control, contingent in some circumstances on the occurrence of the Change in Control, as described below; and provided, that, in the case of an Involuntary Termination that occurs within the Protected Period and preceding a Change in Control, such Involuntary Termination must either be (i) at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise connected to or in anticipation of a Change in Control.  In addition, the Company will provide the severance benefit described in Sections 4(d) and (e), if applicable, to each Key Executive, upon the occurrence of a Change in Control.  In addition, in order to be eligible to receive benefits under the Policy, except as otherwise required by applicable law with respect to Key Executives employed outside of the United States, the Key Executive must execute, within 45 days following the Termination Date, a general waiver and release of claims in favor of the Company and its affiliates in a form provided by the Company (a “Release”), and such release must become effective in accordance with its terms.

Section 4.Policy Benefits

(a)Accelerated Vesting of Equity Awards Upon an Involuntary Termination.

(i)Termination Within Protection Period and Preceding a Change in Control.  In the event of an Involuntary Termination within ninety (90) days preceding a Change in Control, the Key Executive shall not forfeit or further vest in any unvested equity awards between the termination date and the date of the Change in Control, but (x) all such outstanding, unvested stock options, restricted stock units and other equity-based compensation awards that are subject only to time and service-based vesting criteria (and not performance-based vesting criteria) held by the Key Executive on the date of such Involuntary Termination shall vest in full upon the occurrence of the Change in Control; and (y) all such outstanding, unvested PEP Awards and other equity-based compensation awards that are subject to performance-based vesting criteria held by the Key Executive on the date of such Involuntary Termination shall vest in full upon the occurrence of the Change in Control based on actual performance achievement measured as of the date of the Change in Control.

(ii)Termination Within Protection Period and Following a Change in Control.  In the event of an Involuntary Termination within twenty-four (24) months following a Change in Control, all outstanding, unvested stock options, restricted stock units and other equity-based compensation awards held by the Key Executive on the date of such Involuntary Termination (including awards that are subject only to time and service-based vesting criteria and awards that prior to the Change in Control were subject to performance-based vesting criteria), shall become immediately and fully vested and, to the extent applicable, exercisable, and, to the extent applicable, any restrictions or conditions on such awards shall immediately lapse.

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(iii)Termination Anytime Within Protection Period.  In the event of an Involuntary Termination anytime within the Protection Period, with respect to an equity award consisting of a vested stock option or stock appreciation right (including awards that become vested upon such Involuntary Termination), such stock option or stock appreciation right shall continue to be exercisable for a period following the termination date as prescribed in the plan, terms and conditions or agreement governing such stock option or stock appreciation right, but in no event later than the expiration date of such stock option or stock appreciation right.

(b)Severance Payment.  In the event of an Involuntary Termination within the Protection Period, so long the Release has theretofore become effective in accordance with its terms, the Key Executive shall receive: (i) a lump sum severance payment equal to the multiple of the sum of the Key Executive’s Base Salary and Average Bonus set forth across from such Key Executive’s name on Schedule A (if no multiple is listed on Schedule A, the multiple shall be deemed to be 1.5), payable on the sixtieth (60th) day following the Termination Date, and (ii) a pro rata annual bonus payment (under the annual incentive compensation plan applicable to the Key Executive) for the year in which the Involuntary Termination occurs, based upon the number of full months between the beginning of the applicable annual performance period and the Termination Date and based upon the target level of performance, payable when bonuses are otherwise payable to the Company’s executives (or, if later, the sixtieth (60th) day following the Termination Date).

(c)Medical Coverage Continuation.  In the event of an Involuntary Termination within the Protection Period, the Key Executive and his or her covered dependents shall be entitled to reimbursement of COBRA coverage so that the premium cost to the Key Executive remains the same as if the Key Executive remained employed during such period for the number of years equal to the multiple set forth across from each Key Executive’s name on Schedule A, or, if earlier, until the Key Executive and his or her covered dependents, if any, become eligible for health insurance coverage through another source, in each case, in accordance with the terms thereof.  Notwithstanding the foregoing, the foregoing benefit can be provided, at the Company’s sole discretion, in the form of a lump sum taxable severance payment in lieu of the COBRA subsidy if the COBRA subsidy is found to be discriminatory pursuant to applicable guidance.

(d)Conversion of PEP Awards.  Upon the occurrence of  a Change in Control, each Key Executive who remains employed at the time of the Change in Control shall, with respect to all outstanding, unvested PEP Awards and any other equity-based compensation awards subject to performance-based vesting criteria that are held by such Key Executive immediately prior to a Change in Control, be deemed to have satisfied any performance-based vesting criteria based on the actual Company’s achievement with respect to such  performance-based vesting criteria through the date of the Change in Control (as determined by the Administrator), and following the Change in Control any such awards shall continue to vest based upon the time or service-based vesting criteria, if any, to which the award is subject.

(e)Accelerated Vesting of Equity Awards Upon a Change in Control.  If, upon the occurrence of a Change in Control, the surviving entity does not assume or replace with equivalent awards (as determined by the Administrator prior to the Change in Control) all of the outstanding, unvested PEP Awards (after applying Section 4(d)), stock options, restricted stock units and other equity-based compensation awards held by a Key Executive, all of such outstanding, unvested awards held by such Key Executive shall become vested and, to the extent applicable, exercisable as of immediately prior to such Change in Control in the same manner as described in Section 4(a) assuming that each Key Executive’s employment were terminated in an Involuntary Termination.

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Section 5.Limitations on Benefits

(a)Certain Reductions and Offsets.  Notwithstanding any other provision of the Policy to the contrary, except as otherwise required by applicable law with respect to Key Executives employed outside of the United States, any amounts payable to a Key Executive under the Policy will be reduced (but not below zero) by any payments by the Company to such individual under any other policy, plan, program or arrangement, including, without limitation, any change of control severance agreement or employment agreement between the Key Executive and the Company that provides for severance benefits in existence, or any contract between the Key Executive and any entity, to the extent such payments are conditioned, at least in part, on termination of employment and are based on the Key Executive’s continued receipt of his or her Base Salary and/or annual bonus opportunity.  Furthermore, to the extent that any federal, state or local laws, including, without limitation, so-called “plant closing” laws, require the Company to give advance notice or make a payment of any kind to a Key Executive because of that Key Executive’s involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, change of control, or any other similar event or reason, the benefits payable under the Policy will either be reduced or eliminated.  The benefits provided under the Policy are intended to satisfy any and all statutory obligations that may arise out of a Key Executive’s involuntary termination of employment for the foregoing reasons, and the Administrator will so construe and implement the terms of the Policy.

(b)Mitigation.  Except as otherwise specifically provided herein, the Key Executive will not be required to mitigate damages or the amount of any payment provided under the Policy by seeking other employment or other form of remuneration for services, nor will the amount of any payment provided for under the Policy be reduced by any compensation earned by any Key Executive as a result of employment by another employer or any retirement benefits received by such Key Executive after his or her Involuntary Termination.

(c)Termination of Benefits.  Benefits under the Policy will terminate immediately if the Key Executive, at any time, violates any proprietary information or confidentiality obligation to the Company or any obligations under the Policy.

(d)Non-Duplication of Benefits.  No Key Executive is eligible to receive benefits under the Policy more than one time.

(e)Indebtedness of Key Executives.  If the Key Executive is indebted to the Company or an affiliate of the Company at his or her Termination Date, the Company reserves the right to offset any severance payments under the Policy by the amount of such indebtedness.

(f)Excise Taxes.

(i)In the event that any benefits payable to a Key Executive pursuant to the Policy (“Payments”) (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) but for this Section 5(f) would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise

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Tax”), then the Key Executive’s Payments hereunder shall be either (a) provided to the Key Executive in full, or (b) provided to the Key Executive as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by the Key Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax.  Unless the Company and the Key Executive otherwise agree in writing, any determination required under this Section 5(f) shall be made in writing in good faith by a nationally recognized accounting firm selected by the Company (the “Accountants”).  In the event that the payments and/or benefits are to be reduced pursuant to this Section 5(f), such payments and benefits shall be reduced such that the reduction of compensation to be provided to Key Executive as a result of this Section 5(f) is minimized.  In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A (as defined below) and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.  For purposes of making the calculations required by this Section 5(f), the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority.  The Company and the applicable Key Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 5(f).  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 5(f).

(ii)If, notwithstanding any reduction described in this Section 5(f), the IRS determines that a Key Executive is liable for the Excise Tax as a result of the receipt of any Payments, then the Key Executive shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that the Key Executive challenges the final IRS determination, a final judicial determination, a portion of the Payments equal to the “Repayment Amount.” The Repayment Amount shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Key Executive’s net after-tax proceeds with respect to the Payments (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such benefits) shall be maximized.  The Repayment Amount shall be zero if a Repayment Amount of more than zero would not result in the Key Executive’s net after-tax proceeds with respect to the Payments being maximized.  If the Excise Tax is not eliminated pursuant to this Section 5(f), the Key Executive shall pay the Excise Tax.

(iii)Notwithstanding any other provision of this Section 5(f), if (A) there is a reduction in the payment of the Payments to a Key Executive as described in this Section 5(f), (B) the IRS later determines that the Key Executive is liable for the Excise Tax, the payment of which would result in the maximization of the Key Executive’s net after-tax proceeds (calculated as if the Key Executive’s benefits had not previously been reduced), and (C) the Key Executive pays the Excise Tax, then the Company shall pay to the Key Executive those Payments which were reduced pursuant to this Section 5(f) as soon as administratively possible after the Key Executive pays the Excise Tax so that the Key Executive’s net after-tax proceeds with respect to the payment of the Payments are maximized.

7

(g)Section 409A Compliance.

(i)This Policy is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”) or an exemption from Section 409A.  The Company shall undertake to administer, interpret, and construe this Policy in a manner that does not result in the imposition on a Key Executive of any additional tax, penalty, or interest under Section 409A.  Each payment under this Policy shall be treated as a separate payment for purposes of Section 409A.

(ii)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Policy providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(iii)Notwithstanding anything herein to the contrary, in the event that a Key Executive is a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit (whether under this Policy or otherwise) that is considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), to the extent necessary to avoid the imposition of excise taxes under Section 409A, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Key Executive or (B) the date of the Key Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 5(g) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Key Executive in a lump sum without interest, and any remaining payments and benefits due under this Policy shall be paid or provided in accordance with the normal payment dates specified for them herein.

(iv)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, all such payments shall be made on or before the last day of calendar year following the calendar year in which the expense occurred.

(v)With respect to any PEP Award or restricted stock unit held by a Key Executive that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A, notwithstanding anything in this Policy or the applicable award agreement to the contrary, the settlement of each such award (to the extent accelerated as a result of the application of Section 4 hereof) shall not occur until the earliest of (A) the Change in Control if such Change in Control constitutes a “change in the ownership of the corporation,” a “change in effective control of the corporation” or a “change in the ownership of a substantial portion of the assets of the corporation,” within the meaning of Section 409A(a)(2)(A)(v) of the Code, (B) the date such award would otherwise be settled pursuant to the terms of the applicable award agreement and (C) the applicable Termination Date.

8

Section 6.Right To Interpret Policy; Amendment and Termination

(a)Exclusive Discretion.  The Administrator will have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Policy and to construe and interpret the Policy and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Policy, including, but not limited to, the eligibility to participate in the Policy and amount of benefits paid under the Policy.  The rules, interpretations, computations and other actions of the Administrator will be binding and conclusive on all persons.

(b)Amendment or Termination.

(i)Prior to the occurrence of a Change in Control, the Board or the Administrator may amend or terminate the Policy at any time and from time to time.  Termination or amendment of the Policy shall not affect any obligation of the Company under the Policy, which has accrued and is unpaid as of the effective date of the termination or amendment.  Unless and until a Change in Control shall have occurred, a Key Executive shall not have any vested rights under the Policy or any agreement entered into pursuant to the Policy.

(ii)From and after the occurrence of a Change in Control, no provision of the Policy shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Key Executive and by an authorized officer of the Company (other than the Key Executive).

(iii)Notwithstanding anything herein to the contrary, the Board or the Administrator may amend the Policy (which amendment shall be effective upon its adoption or at such other time designated by the Board or the Administrator, as applicable) at any time as may be necessary to avoid the imposition of any additional taxes or penalties under Section 409A; provided, however, that any such amendment shall be implemented in such a manner as to preserve, to the greatest extent possible, the terms and conditions of the Policy as in existence immediately prior to any such amendment.

Section 7.No Implied Employment Contract

The Company and each Key Executive acknowledge that each Key Executive’s employment is and shall continue to be at-will, as defined under applicable law, and that the Policy shall not be deemed a contract of employment.  If a Key Executive’s employment terminates for any reason other than an Involuntary Termination, the Key Executive shall not be entitled to any benefits, damages, awards or compensation under Section 4 of the Policy, but may be entitled to payments or benefits in accordance with the Company’s other established employee plans and practices or pursuant to other agreements with the Company.

Section 8.Successors

(a)Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will assume the obligations under the Policy and agree expressly to perform the obligations under the Policy in the same manner and to

9

the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under the Policy, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 8(a) or which becomes bound by the terms of the Policy by operation of law or otherwise.

(b)Key Executive’s Successors.  The terms of the Policy and all rights of the Key Executive hereunder will inure to the benefit of, and be enforceable by, the Key Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

Section 9.Legal Construction

The Policy is intended to be governed by and will be construed in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of Delaware.

Section 10.Claims, Inquiries And Appeals

(a)Applications for Benefits and Inquiries.  Any application for benefits, inquiries about the Policy or inquiries about present or future rights under the Policy must be submitted to the Administrator in writing.

(b)Denial of Claims.  In the event that any application for benefits is denied in whole or in part, the Administrator must notify the applicant, in writing, of the denial of the application, and of the applicant’s right to review the denial.  The written notice of denial will be set forth in a manner designed to be understood by the applicant and will include specific reasons for the denial, specific references to the Policy provision upon which the denial is based, a description of any information or material that the Administrator needs to complete the review and an explanation of the Policy’s review procedure.

This written notice will be given to the applicant within ninety (90) days after the Administrator receives the application, unless special circumstances require an extension of time, in which case, the Administrator has up to an additional ninety (90) days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Administrator is to render its decision on the application.  If written notice of denial of the application for benefits is not furnished within the specified time, the application will be deemed to be denied.  The applicant will then be permitted to appeal the denial in accordance with the Review Procedure described below.

(c)Request for a Review.  Any person (or that person’s authorized representative) for whom an application for benefits is denied (or deemed denied), in whole or in part, may appeal the denial by submitting a request for a review to the Administrator within sixty (60) days after the application is denied (or deemed denied).  The Administrator will give the applicant (or his or her representative) an opportunity to review pertinent documents in preparing a request for a review.  A request for a review will be in writing and will be addressed to:

10

AECOM Technology Corporation

555 South Flower St.
Suite 3700
Los Angeles, CA 90071-2300

Attn: General Counsel

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent.  The Administrator may require the applicant to submit additional facts, documents or other material as it may find necessary or appropriate in making its review.

(d)Decision on Review.  The Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period.  The Administrator will give prompt, written notice of its decision to the applicant.  In the event that the Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by the applicant, the specific Policy provisions upon which the decision is based.  If written notice of the Administrator’s decision is not given to the applicant within the time prescribed in this Subsection (d), the application will be deemed denied on review.

(e)Rules and Procedures.  The Administrator will establish rules and procedures, consistent with the Policy and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims.  The Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s own expense.

(f)Exhaustion of Remedies.  No legal action for benefits under the Policy may be brought until the claimant (i) has submitted a written application for benefits in accordance with the procedures described by Section 10(a) above, (ii) has been notified by the Administrator that the application is denied (or the application is deemed denied due to the Administrator’s failure to act on it within the established time period), (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 10(c) above and (iv) has been notified in writing that the Administrator has denied the appeal (or the appeal is deemed to be denied due to the Administrator’s failure to take any action on the claim within the time prescribed by Section 10(d) above).

Section 11.Basis Of Payments To And From Policy

All benefits under the Policy will be paid by the Company.  The Policy will be unfunded, and benefits hereunder will be paid only from the general assets of the Company.

11

Section 12.Other Policy Information

(a)Employer Identification Numbers.  The Employer Identification Number assigned to the Company (which is the “Policy Sponsor” as that term is used in ERISA) by the Internal Revenue Service is 61-1088522.

(b)Agent for the Service of Legal Process.  The agent for the service of legal process with respect to the Policy is AECOM Technology Corporation, 555 South Flower St., Suite 3700, Los Angeles, CA 90071-2300.

(c)Policy Sponsor and Administrator.  The “Policy Sponsor” and the “Administrator” of the Policy is AECOM Technology Corporation, 555 South Flower St., Suite 3700, Los Angeles, CA 90071-2300.  The Policy Sponsor’s and Administrator’s telephone number is (213) 593-8000.  The Administrator is the named fiduciary charged with the responsibility for administering the Policy.

Section 13.Miscellaneous

(a)Notice.  Notices and all other communications contemplated by the Policy will be in writing and will be deemed to have been duly given either (i) when personally delivered or sent by facsimile or other electronic transmission (including e-mail) or (ii) five (5) days after being mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of the Key Executive, mailed notices shall be addressed to him or her at the home address or facsimile number or e-mail address which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices or notices sent by facsimile shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its General Counsel.

(b)No Waiver.  The failure of a party to insist upon strict adherence to any term of the Policy on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of the Policy.

(c)Severability.  In the event that any one or more of the provisions of the Policy shall be or become invalid, illegal or unenforceable in any respect or to any degree, the validity, legality and enforceability of the remaining provisions of the Policy shall not be affected thereby.  The parties intend to give the terms of the Policy the fullest force and effect so that is any provision shall be found to be invalid or unenforceable, the court reaching such conclusion may modify or interpret such provision in a manner that shall carry out the parties’ intent and shall be valid and enforceable.

(d)Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof or to affect the meaning thereof.

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(e)Specific Performance.  If in the opinion of any court of competent jurisdiction the covenants described in Section 5(c) of the Policy are not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended.  Any breach of the covenants contained in Section 5(c) would irreparably injure the Company.  Accordingly, the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 5(c) would be inadequate and, in the event of such a breach or threatened breach, the Company may, without posting any bond, in addition to pursuing any other remedies it may have in law or in equity, obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available against the Key Executive from any court having jurisdiction over the matter, restraining any further violation of the Policy by the Key Executive.

(f)Creditor Status of Key Executives.  In the event that any Key Executive acquires a right to receive payments from the Company under the Policy such right shall be no greater than the right of any unsecured general creditor of the Company.

(g)Facility of Payment.  If it shall be found that (i) a Key Executive entitled to receive any payment under the Policy is physically or mentally incompetent to receive such payment and to give a valid release therefor, and (ii) another person or an institution is then maintaining or has custody of such Key Executive, and no guardian, committee, or other representative of the estate of such person has been duly appointed by a court of competent jurisdiction, the payment may be made to such other person or institution referred to in (ii) above, and the release shall be a valid and complete discharge for the payment.

(h)Withholding Taxes.  The Company may withhold from any amounts payable under the Policy such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

13

SCHEDULE A

Key Executive	Severance Payment Multiple
Michael S. Burke	2 times
Dan P. McQuade	1.5 times
Randall A. Wotring	1.5 times
Carla J. Christofferson	1.5 times
Mary E. Finch	1.5 times
William T. Rudd	1.5 times
Sean Chiao	1.5 times
Steve Morriss	1.5 times
Lara Poloni	1.5 times
John Vollmer	1.5 times

14

EX-31.1

EXHIBIT 31.1

Certification Pursuant to

Rule 13a-14(a)/15d-14(a)

I, Michael S. Burke, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of AECOM;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  February 7, 2018

/S/ MICHAEL S. BURKE

Michael S. Burke

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification Pursuant to

Rule 13a-14(a)/15d-14(a)

I, W. Troy Rudd, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of AECOM;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  February 7, 2018

/S/ W. TROY RUDD

W. Troy Rudd

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

Certification Pursuant to

18 U.S.C. Section 1350

In connection with the Quarterly Report of AECOM (the “Company”) on Form 10-Q for the quarterly period ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael S. Burke, Chief Executive Officer of the Company, and W. Troy Rudd, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ MICHAEL S. BURKE

Michael S. Burke

Chairman and Chief Executive Officer

February 7, 2018

/S/ W. TROY RUDD

W. Troy Rudd

Executive Vice President and Chief Financial Officer

February 7, 2018

EX-95

EXHIBIT 95

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires domestic mine operators to disclose violations and orders issued under the Federal Mine Safety and Health Act of 1977 (the Mine Act) by the federal Mine Safety and Health Administration (MSHA).  We do not act as the owner of any mines but we may act as a mining operator as defined under the Mine Act where we may be a lessee of a mine, a person who operates, controls or supervises such mine, or as an independent contractor performing services or construction of such mine.

The following table provides information for the three months ended December 31, 2017.

Mine (1)	Mine Act §104 Violations (2)	Mine Act §104(b) Orders (3)	Mine Act §104(d) Citations and Orders (4)	Mine Act §110(b)(2) Violations (5)	Mine Act §107(a) Orders (6)	Proposed Assessments from MSHA (In dollars ($))		Mining Related Fatalities	Mine Act §104(e) Notice (yes/no) (7)	Pending Legal Action before Federal Mine Safety and Health Review Commission (yes/no) (8)
Black Thunder Project	1	0	0	0	0	$	126.00	0	No	No
Monsanto Quarry	0	0	0	0	0	$	232.00	0	No	No

(1)United States mines.

(2)The total number of violations received from MSHA under §104 of the Mine Act, which includes citations for health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.

(3)The total number of orders issued by MSHA under §104(b) of the Mine Act, which represents a failure to abate a citation under §104(a) within the period of time prescribed by MSHA.

(4)The total number of citations and orders issued by MSHA under §104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

(5)The total number of flagrant violations issued by MSHA under §110(b)(2) of the Mine Act.

(6)The total number of orders issued by MSHA under §107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.

(7)A written notice from the MSHA regarding a pattern of violations, or a potential to have such pattern under §104(e) of the Mine Act.

(8)The following Pending Legal Action Table provides information for the three months ended December 31, 2017.

Mine	Number Pending Legal Actions	Contests of Penalty Assessments	Legal Action Initiated	Legal Action Resolved
Black Thunder Project	0	0	0	0
Monsanto Quarry	0	0	0	0

XML

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2017	Jan. 31, 2018
Document and Entity Information
Entity Registrant Name	AECOM
Entity Central Index Key	0000868857
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		159,169,121
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 616,127	$ 665,871
Cash in consolidated joint ventures	197,039	136,491
Total cash and cash equivalents	813,166	802,362
Accounts receivable-net	5,313,672	5,127,743
Prepaid expenses and other current assets	676,951	696,718
Income taxes receivable	38,251	55,399
TOTAL CURRENT ASSETS	6,842,040	6,682,222
PROPERTY AND EQUIPMENT-NET	631,601	621,357
DEFERRED TAX ASSETS-NET	216,742	171,331
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	370,294	364,223
GOODWILL	5,997,000	5,992,881
INTANGIBLE ASSETS-NET	411,759	415,096
OTHER NON-CURRENT ASSETS	153,515	149,846
TOTAL ASSETS	14,622,951	14,396,956
CURRENT LIABILITIES:
Short-term debt	2,361	1,221
Accounts payable	2,426,469	2,249,872
Accrued expenses and other current liabilities	2,072,155	2,245,519
Income taxes payable	18,244	38,176
Billings in excess of costs on uncompleted contracts	995,914	902,812
Current portion of long-term debt	160,914	140,779
TOTAL CURRENT LIABILITIES	5,676,057	5,578,379
OTHER LONG-TERM LIABILITIES	296,578	322,199
DEFERRED TAX LIABILITY-NET	32,327	20,515
PENSION BENEFIT OBLIGATIONS	548,307	559,068
LONG-TERM DEBT	3,738,901	3,702,109
TOTAL LIABILITIES	10,292,170	10,182,270
COMMITMENTS AND CONTINGENCIES (Note 14)
AECOM STOCKHOLDERS' EQUITY:
Common stock-authorized, 300,000,000 shares of $0.01 par value as of December 31 and September 30, 2017; issued and outstanding 159,132,336 and 157,529,419 shares as of December 31 and September 30, 2017, respectively	1,591	1,575
Additional paid-in capital	3,734,008	3,733,572
Accumulated other comprehensive loss	(704,184)	(700,661)
Retained earnings	1,072,954	961,640
TOTAL AECOM STOCKHOLDERS' EQUITY	4,104,369	3,996,126
Noncontrolling interests	226,412	218,560
TOTAL STOCKHOLDERS' EQUITY	4,330,781	4,214,686
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 14,622,951	$ 14,396,956

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Sep. 30, 2017
Consolidated Balance Sheets
Common stock, authorized shares	300,000,000	300,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, issued shares	159,132,336	157,529,419
Common stock, outstanding shares	159,132,336	157,529,419

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Operations
Revenue	$ 4,910,832	$ 4,358,349
Cost of revenue	4,774,680	4,188,376
Gross profit	136,152	169,973
Equity in earnings of joint ventures	29,720	21,471
General and administrative expenses	(34,670)	(32,639)
Acquisition and integration expenses		(15,412)
Income from operations	131,202	143,393
Other income	2,283	860
Interest expense	(56,165)	(53,637)
Income before income tax (benefit) expense	77,320	90,616
Income tax (benefit) expense	(47,093)	24,838
Net income	124,413	65,778
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13,099)	(18,599)
Net income attributable to AECOM	$ 111,314	$ 47,179
Net income attributable to AECOM per share:
Basic (in dollars per share)	$ 0.70	$ 0.31
Diluted (in dollars per share)	$ 0.69	$ 0.30
Weighted average shares outstanding:
Basic (in shares)	157,909	154,255
Diluted (in shares)	161,847	157,993

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 124,413	$ 65,778
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	785	1,367
Foreign currency translation adjustments	(5,983)	(73,924)
Pension adjustments, net of tax	2,468	16,973
Other comprehensive loss, net of tax	(2,730)	(55,584)
Comprehensive income, net of tax	121,683	10,194
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	(13,892)	(18,291)
Comprehensive income (loss) attributable to AECOM, net of tax	$ 107,791	$ (8,097)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 124,413	$ 65,778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	62,835	66,916
Equity in earnings of unconsolidated joint ventures	(29,720)	(21,471)
Distribution of earnings from unconsolidated joint ventures	39,480	24,370
Non-cash stock compensation	16,540	21,337
Foreign currency translation	(16,018)	(15,387)
Other	(1,800)	(3,077)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(186,098)	47,064
Prepaid expenses and other assets	(12,517)	(14,728)
Accounts payable	172,481	55,460
Accrued expenses and other current liabilities	(135,684)	(144,301)
Billings in excess of costs on uncompleted contracts	93,102	26,019
Other long-term liabilities	(21,291)	(30,473)
Income taxes payable	(53,295)
Net cash provided by operating activities	52,428	77,507
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	2,206
Cash acquired from consolidation of joint venture	7,630
Investment in unconsolidated joint ventures	(23,986)	(18,372)
Return of investment in unconsolidated joint ventures	5,030	239
Proceeds from sales of investments	161	300
Proceeds from disposal of property and equipment	10,967	2,557
Payments for capital expenditures	(29,510)	(23,584)
Net cash used in investing activities	(27,502)	(38,860)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,276,451	1,634,781
Repayments of borrowings under credit agreements	(1,236,242)	(1,607,380)
Proceeds from issuance of common stock	9,530	9,875
Proceeds from exercise of stock options	2,715	2,067
Payments to repurchase common stock	(26,701)	(17,494)
Net distributions to noncontrolling interests	(16,795)	(21,938)
Other financing activities	(25,962)	(26,280)
Net cash used in financing activities	(17,004)	(26,369)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	2,882	(6,706)
NET INCREASE IN CASH AND CASH EQUIVALENTS	10,804	5,572
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	802,362	692,145
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 813,166	$ 697,717

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Basis of Presentation

3 Months Ended

Dec. 31, 2017

Basis of Presentation

Basis of Presentation

1.Basis of Presentation

The accompanying consolidated financial statements of AECOM (the Company) are unaudited and, in the opinion of management, include all adjustments, including all normal recurring items necessary for a fair statement of the Company’s financial position and results of operations for the periods presented. All intercompany balances and transactions are eliminated in consolidation.

The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended September 30, 2017 (the Annual Report). The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The consolidated financial statements included in this report have been prepared consistently with the accounting policies described in the Annual Report and should be read together with the Annual Report.

The results of operations for the three months ended December 31, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2018.

The Company reports its annual results of operations based on 52 or 53-week periods ending on the Friday nearest September 30. The Company reports its quarterly results of operations based on periods ending on the Friday nearest December 31, March 31, and June 30. For clarity of presentation, all periods are presented as if the periods ended on September 30, December 31, March 31, and June 30.

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New Accounting Pronouncements and Changes in Accounting

3 Months Ended

Dec. 31, 2017

New Accounting Pronouncements and Changes in Accounting

New Accounting Pronouncements and Changes in Accounting

2.New Accounting Pronouncements and Changes in Accounting

In May 2014, the Financial Accounting Standards Board (FASB) issued new accounting guidance which amended the existing accounting standards for revenue recognition. The new accounting guidance establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company continues to evaluate the impact of the new guidance on its consolidated financial statements, including the expected impact on its business processes, systems, and controls, and potential differences in the timing or method of revenue recognition for its contracts. The Company expects to adopt the new standard on October 1, 2018, using the modified retrospective method that may result in a cumulative effect adjustment as of the date of adoption.

In February 2016, the FASB issued new accounting guidance which changes accounting requirements for leases. The new guidance requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet. It also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. The new guidance will be effective for the Company’s fiscal year beginning October 1, 2019 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.

In February 2016, the FASB issued new accounting guidance to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under previous guidance does not, in and of itself, require redesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued new accounting guidance which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. The new guidance will replace the current “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The guidance will be effective for the Company’s fiscal year starting October 1, 2020. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.

In August 2016, the FASB issued new accounting guidance clarifying how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new guidance will be effective for the Company in its fiscal year beginning October 1, 2018, and early adoption is permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated statement of cash flows.

In October 2016, the FASB issued additional guidance on how a single decision maker considers its indirect interests when performing the primary beneficiary analysis under the variable interest model.  Under the new guidance, the single decision maker will consider its indirect interests on a proportionate basis.  The Company adopted the new guidance on October 1, 2017, and the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued new accounting guidance to simplify the test for goodwill impairment. This guidance eliminates step two from the goodwill impairment test. Under the new guidance, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. This guidance is effective for the Company in the first quarter of fiscal 2021, and earlier adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

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Business Acquisitions, Goodwill and Intangible Assets

3 Months Ended

Dec. 31, 2017

Business Acquisitions, Goodwill and Intangible Assets

Business Acquisitions, Goodwill and Intangible Assets

3.Business Acquisitions, Goodwill and Intangible Assets

The Company completed one acquisition during the three months ended December 31, 2017, and two acquisitions during the year ended September 30, 2017 for a total consideration of $5.6 million and $164.4 million, respectively. The business combinations did not meet the quantitative thresholds to require separate disclosures based on the Company’s consolidated net assets, investments and net income. The acquisitions were accounted for under the purchase method of accounting. As such, the purchase considerations were allocated to acquired tangible and intangible assets and liabilities based upon their fair values. The determination of fair values of assets and liabilities acquired requires the Company to make estimates and use valuation techniques when market value is not readily available. Transaction costs associated with business acquisitions are expensed as they are incurred.

On October 17, 2014, the Company completed the acquisition of the U.S. headquartered URS Corporation (URS), an international provider of engineering, construction, and technical services, by purchasing 100% of the outstanding shares of URS common stock. The Company paid total consideration of approximately $2.3 billion in cash and issued approximately $1.6 billion of AECOM common stock to the former stockholders and certain equity award holders of URS. In connection with the acquisition, the Company also assumed URS’s senior notes totaling $0.4 billion, net of Company repayments. The Company repaid in full URS’s $0.6 billion 2011 term loan and $0.1 billion of URS’s revolving line of credit.

The Company acquired backlog and customer relationship intangible assets valued at $973.8 million representing the fair value of existing contracts and the underlying customer relationships, that have lives ranging from 1 to 11 years (weighted average lives of approximately 3 years) in connection with the URS acquisition. Acquired accrued expenses and other current liabilities include URS project liabilities and approximately $240 million related to estimated URS legal settlements and uninsured legal damages; see Note 14, Commitments and Contingencies, including legal matters related to former URS affiliates.

Amortization of intangible assets relating to URS, included in cost of revenue, was $18.2 million and $20.9 million during the three months ended December 31, 2017 and 2016, respectively. Additionally, included in equity in earnings of joint ventures and noncontrolling interests was intangible amortization expense of $1.9 million and ($2.1) million, respectively, during the three months ended December 31, 2017 and $2.0 million and ($2.1) million, respectively, during the three months ended December 31, 2016 related to joint venture fair value adjustments.

Billings in excess of costs on uncompleted contracts includes a margin fair value liability associated with long-term contracts acquired in connection with the acquisition of URS. This margin fair value liability was $149.1 million at the acquisition date and its carrying value was $7.5 million at December 31, 2017 and $8.6 million at September 30, 2017, and is recognized as revenue on a percentage-of-completion basis as the applicable projects progress. The majority of this liability was recognized over the first two years from the acquisition date. Revenue and the related income from operations related to the margin fair value liability recognized during the three months ended December 31, 2017 and 2016 was $1.1 million and $1.6 million, respectively.

Acquisition and integration expenses, relating to business acquisitions, in the accompanying consolidated statements of operations comprised of the following:

	Three months ended Dec 31,
	2017		2016
	(in millions)
Severance and personnel costs	$	—	$	11.5
Professional service, real estate-related, and other expenses	—		3.9
Total	$	—	$	15.4

Included in severance and personnel costs for the three months ended December 31, 2016 was $8.7 million of severance expenses,  which was substantially all  paid as of December 31,  2017. All acquisition and integration expenses are classified within the Corporate segment, as presented in Note 15.

The changes in the carrying value of goodwill by reportable segment for the three months ended December 31, 2017 were as follows:

	September 30, 2017		Acquisitions		Measurement Period Adjustments			Foreign Exchange Impact			December 31, 2017
	(in millions)
Design and Consulting Services	$	3,218.9	$	—	$	—		$	4.3		$	3,223.2
Construction Services	1,049.9		—		(2.3		)	(1.6		)	1,046.0
Management Services	1,724.1		—		—			3.7			1,727.8
Total	$	5,992.9	$	—	$	(2.3	)	$	6.4		$	5,997.0

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of December 31 and September 30, 2017, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows:

	December 31, 2017							September 30, 2017
	Gross Amount		Accumulated Amortization			Intangible Assets, Net		Gross Amount		Accumulated Amortization			Intangible Assets, Net		Amortization Period
	(in millions)														(years)
Backlog and customer relationships	$	1,304.0	$	(893.7	)	$	410.3	$	1,283.6	$	(870.2	)	$	413.4	1 – 11
Trademark / tradename	18.3		(16.8		)	1.5		18.3		(16.6		)	1.7		0.3 - 2
Total	$	1,322.3	$	(910.5	)	$	411.8	$	1,301.9	$	(886.8	)	$	415.1

Amortization expense of acquired intangible assets included within cost of revenue was $23.7 million and $25.4 million for the three months ended December 31, 2017 and 2016, respectively. The following table presents estimated amortization expense of existing intangible assets for the remainder of fiscal 2018 and for the succeeding years:

Fiscal Year	(in millions)
2018 (nine months remaining)	$	71.0
2019	87.8
2020	73.7
2021	62.8
2022	49.7
Thereafter	66.8
Total	$	411.8

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Accounts Receivable - Net

3 Months Ended

Dec. 31, 2017

Accounts Receivable - Net

Accounts Receivable - Net

4.Accounts Receivable—Net

Net accounts receivable consisted of the following:

	December 31, 2017			September 30, 2017
	(in millions)
Billed	$	2,511.6		$	2,317.8
Unbilled	2,254.5			2,293.5
Contract retentions	598.9			568.6
Total accounts receivable—gross	5,365.0			5,179.9
Allowance for doubtful accounts	(51.3		)	(52.2		)
Total accounts receivable—net	$	5,313.7		$	5,127.7

Billed accounts receivable represents amounts billed to clients that have yet to be collected. Unbilled accounts receivable represents the contract revenue recognized but not yet billed pursuant to contract terms or accounts billed after the period end. Substantially all unbilled receivables as of December 31, 2017 and September 30, 2017 are expected to be billed and collected within twelve months. Contract retentions represent amounts invoiced to clients where payments have been withheld pending the completion of certain milestones, other contractual conditions, or upon the completion of a project. These retention agreements vary from project to project and could be outstanding for several months or years.

Allowances for doubtful accounts have been determined through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience.

Other than the U.S. government, no single client accounted for more than 10% of the Company’s outstanding receivables at December 31, 2017 and September 30, 2017.

The Company sold trade receivables to financial institutions, of which $314.7 million and $325.2 million were outstanding as of December 31, 2017 and September 30, 2017, respectively. The Company does not retain financial or legal obligations for these receivables that would result in material losses. The Company’s ongoing involvement is limited to the remittance of customer payments to the financial institutions with respect to the sold trade receivables.

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Joint Ventures and Variable Interest Entities

3 Months Ended

Dec. 31, 2017

Joint Ventures and Variable Interest Entities

Joint Ventures and Variable Interest Entities

5.Joint Ventures and Variable Interest Entities

The Company’s joint ventures provide architecture, engineering, program management, construction management, operations and maintenance services, and invests in real estate, public-private partnership (P3) and infrastructure projects. Joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is typically controlled by a joint venture executive committee, comprised of representatives from the joint venture partners. The joint venture executive committee normally provides management oversight and controls decisions which could have a significant impact on the joint venture.

Some of the Company’s joint ventures have no employees and minimal operating expenses. For these joint ventures, the Company’s employees perform work for the joint venture, which is then billed to a third-party customer by the joint venture. These joint ventures function as pass through entities to bill the third-party customer. For consolidated joint ventures of this type, the Company records the entire amount of the services performed and the costs associated with these services, including the services provided by the other joint venture partners, in the Company’s result of operations. For certain of these joint ventures where a fee is added by an unconsolidated joint venture to client billings, the Company’s portion of that fee is recorded in equity in earnings of joint ventures.

The Company also has joint ventures that have their own employees and operating expenses, and to which the Company generally makes a capital contribution. The Company accounts for these joint ventures either as consolidated entities or equity method investments based on the criteria further discussed below.

The Company follows guidance on the consolidation of variable interest entities (VIEs) that requires companies to utilize a qualitative approach to determine whether it is the primary beneficiary of a VIE. The process for identifying the primary beneficiary of a VIE requires consideration of the factors that indicate a party has the power to direct the activities that most significantly impact the joint venture’s economic performance, including powers granted to the joint venture’s program manager, powers contained in the joint venture governing board and, to a certain extent, a company’s economic interest in the joint venture. The Company analyzes its joint ventures and classifies them as either:

· a VIE that must be consolidated because the Company is the primary beneficiary or the joint venture is not a VIE and the Company holds the majority voting interest with no significant participative rights available to the other partners; or

· a VIE that does not require consolidation and is treated as an equity method investment because the Company is not the primary beneficiary or the joint venture is not a VIE and the Company does not hold the majority voting interest.

As part of the above analysis, if it is determined that the Company has the power to direct the activities that most significantly impact the joint venture’s economic performance, the Company considers whether or not it has the obligation to absorb losses or rights to receive benefits of the VIE that could potentially be significant to the VIE.

Contractually required support provided to the Company’s joint ventures is further discussed in Note 14.

Summary of unaudited financial information of the consolidated joint ventures is as follows:

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	914.6	$	832.1
Non-current assets	203.3		188.8
Total assets	$	1,117.9	$	1,020.9
Current liabilities	$	647.8	$	524.9
Non-current liabilities	12.4		12.4
Total liabilities	660.2		537.3
Total AECOM equity	241.6		274.7
Noncontrolling interests	216.1		208.9
Total owners’ equity	457.7		483.6
Total liabilities and owners’ equity	$	1,117.9	$	1,020.9

Total revenue of the consolidated joint ventures was $623.0 million and $456.9 million for the three months ended December 31, 2017 and 2016, respectively. The assets of the Company’s consolidated joint ventures are restricted for use only by the particular joint venture and are not available for the general operations of the Company.

Summary of unaudited financial information of the unconsolidated joint ventures is as follows:

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	2,069.6	$	1,912.2
Non-current assets	787.5		749.8
Total assets	$	2,857.1	$	2,662.0
Current liabilities	$	1,726.4	$	1,570.2
Non-current liabilities	177.0		185.1
Total liabilities	1,903.4		1,755.3
Joint ventures’ equity	953.7		906.7
Total liabilities and joint ventures’ equity	$	2,857.1	$	2,662.0
AECOM’s investment in joint ventures	$	370.3	$	364.2

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Revenue	$	1,478.6	$	1,142.0
Cost of revenue	1,395.2		1,085.8
Gross profit	$	83.4	$	56.2
Net income	$	82.1	$	54.3

Summary of AECOM’s equity in earnings of unconsolidated joint ventures is as follows:

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Pass through joint ventures	$	13.2	$	7.5
Other joint ventures	16.5		13.9
Total	$	29.7	$	21.4

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Pension Benefit Obligations

3 Months Ended

Dec. 31, 2017

Pension Benefit Obligations

Pension Benefit Obligations

6.Pension Benefit Obligations

In the U.S., the Company sponsors various qualified defined benefit pension plans. Benefits under these plans generally are based on the employee’s years of creditable service and compensation; however, all U.S. defined benefit plans are closed to new participants and have frozen accruals.

The Company also sponsors various non-qualified plans in the U.S.; all of these plans are frozen. Outside the U.S., the Company sponsors various pension plans, which are appropriate to the country in which the Company operates, some of which are government mandated.

The following table details the components of net periodic cost for the Company’s pension plans for the three months ended December 31, 2017 and 2016:

	Three Months Ended
	December 31, 2017						December 31, 2016
	U.S.			Int’l			U.S.			Int’l
	(in millions)
Components of net periodic (benefit) cost:
Service costs	$	1.2		$	0.3		$	1.1		$	0.3
Interest cost on projected benefit obligation	5.2			7.9			4.8			7.0
Expected return on plan assets	(7.9		)	(10.7		)	(7.8		)	(10.2		)
Amortization of prior service cost	—			—			—			(0.1		)
Amortization of net loss	1.0			2.0			1.1			3.2
Settlement loss recognized	—			0.1			—			—
Net periodic (benefit) cost	$	(0.5	)	$	(0.4	)	$	(0.8	)	$	0.2

The total amounts of employer contributions paid for the three months ended December 31, 2017 were $2.5 million for U.S. plans and $6.8 million for non-U.S. plans. The expected remaining scheduled annual employer contributions for the fiscal year ending September 30, 2018 are $10.2 million for U.S. plans and $19.9 million for non-U.S. plans.

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Debt

3 Months Ended

Dec. 31, 2017

Debt

Debt

7.Debt

Debt consisted of the following:

	December 31, 2017			September 30, 2017
	(in millions)
2014 Credit Agreement	$	962.3		$	908.7
2014 Senior Notes	1,600.0			1,600.0
2017 Senior Notes	1,000.0			1,000.0
URS Senior Notes	247.8			247.7
Other debt	141.6			140.0
Total debt	3,951.7			3,896.4
Less: Current portion of debt and short-term borrowings	(163.3		)	(142.0		)
Less: Unamortized debt issuance costs	(49.5		)	(52.3		)
Long-term debt	$	3,738.9		$	3,702.1

The following table presents, in millions, scheduled maturities of the Company’s debt as of December 31, 2017:

Fiscal Year
2018 (nine months remaining)	$	109.7
2019	152.2
2020	123.0
2021	686.9
2022	258.2
Thereafter	2,621.7
Total	$	3,951.7

2014 Credit Agreement

The Company entered into a credit agreement (Credit Agreement) on October 17, 2014, as amended, consisting of (i) a term loan A facility in an aggregate principal amount of $1.925 billion, (ii) a term loan B facility in an aggregate principal amount of $0.76 billion, and (iii) a revolving credit facility in an aggregate principal amount of $1.05 billion. These facilities under the Credit Agreement may be increased by an additional amount of up to $500 million. The Credit Agreement’s term extends to September 29, 2021 with respect to the revolving credit facility and the term loan A facility and October 17, 2021 with respect to the term loan B facility, although the term loan B facility was paid in full on February 21, 2017. Some subsidiaries of the Company (Guarantors) have guaranteed the obligations of the borrowers under the Credit Agreement. The borrowers’ obligations under the Credit Agreement are secured by a lien on substantially all of the assets of the Company and the Guarantors pursuant to a security and pledge agreement (Security Agreement). The collateral under the Security Agreement is subject to release upon fulfillment of certain conditions specified in the Credit Agreement and Security Agreement.

The Credit Agreement contains covenants that limit the ability of the Company and the ability of certain of its subsidiaries to, among other things: (i) create, incur, assume, or suffer to exist liens; (ii) incur or guarantee indebtedness; (iii) pay dividends or repurchase stock; (iv) enter into transactions with affiliates; (v) consummate asset sales, acquisitions or mergers; (vi) enter into certain types of burdensome agreements; or (vii) make investments.

On July 1, 2015, the Credit Agreement was amended to revise the definition of “Consolidated EBITDA” to increase the allowance for acquisition and integration expenses related to the acquisition of URS.

On December 22, 2015, the Credit Agreement was amended to further revise the definition of “Consolidated EBITDA” by further increasing the allowance for acquisition and integration expenses related to the acquisition of URS and to allow for an internal corporate restructuring primarily involving its international subsidiaries.

On September 29, 2016, the Credit Agreement and the Security Agreement were amended to (1) lower the applicable interest rate margins for the term loan A and the revolving credit facilities, and lower the applicable letter of credit fees and commitment fees to the revised consolidated leverage levels; (2) extend the term of the term loan A and the revolving credit facility to September 29, 2021; (3) add a new delayed draw term loan A facility tranche in the amount of $185.0 million; (4) replace the then existing $500 million performance letter of credit facility with a $500 million basket to enter into secured letters of credit outside the Credit Agreement; and (5) revise certain covenants, including the Maximum Consolidated Leverage Ratio so that the step down from a 5.00 to a 4.75 leverage ratio is effective as of March 31, 2017 as well as the investment basket for its AECOM Capital business.

On March 31, 2017, the Credit Agreement was amended to (1) expand the ability of restricted subsidiaries to borrow under “Incremental Term Loans;” (2) revise the definition of “Working Capital” as used in “Excess Cash Flow;” (3) revise the definitions for “Consolidated EBITDA” and “Consolidated Funded Indebtedness” to reflect the expected gain and debt repayment of an AECOM Capital disposition, which disposition was completed on April 28, 2017; and (4) amend provisions relating to the Company’s ability to undertake certain internal restructuring steps to accommodate changes in tax laws.

Under the Credit Agreement, the Company is subject to a maximum consolidated leverage ratio and minimum consolidated interest coverage ratio at the end of each fiscal quarter. The Company’s Consolidated Leverage Ratio was 4.0 at December 31, 2017. The Company’s Consolidated Interest Coverage Ratio was 4.7 at December 31, 2017. As of December 31, 2017, the Company was in compliance with the covenants of the Credit Agreement.

At December 31, 2017 and September 30, 2017, outstanding standby letters of credit totaled $54.8 million and $58.1 million, respectively, under the Company’s revolving credit facilities. As of December 31, 2017 and September 30, 2017, the Company had $915.2 million and $991.9 million, respectively, available under its revolving credit facility.

2014 Senior Notes

On October 6, 2014, the Company completed a private placement offering of $800,000,000 aggregate principal amount of its unsecured 5.750% Senior Notes due 2022 (2022 Notes) and $800,000,000 aggregate principal amount of its unsecured 5.875% Senior Notes due 2024 (the 2024 Notes and, together with the 2022 Notes, the 2014 Senior Notes).

As of December 31, 2017, the estimated fair value of its 2014 Senior Notes was approximately $834.0 million for the 2022 Notes and $866.0 million for the 2024 Notes. The fair value of the 2014 Senior Notes as of December 31, 2017 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 2014 Senior Notes.

The Company may redeem the 2022 Notes, in whole or in part, at once or over time, at the specified redemption prices plus accrued and unpaid interest thereon to the redemption date. At any time prior to July 15, 2024, the Company may redeem on one or more occasions all or part of the 2024 Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a “make-whole” premium as of the date of the redemption, plus any accrued and unpaid interest to the date of redemption. In addition, on or after July 15, 2024, the 2024 Notes may be redeemed at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption.

The indenture pursuant to which the 2014 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

On November 2, 2015, the Company completed an exchange offer to exchange the unregistered 2014 Senior Notes for registered notes, as well as all related guarantees.

The Company was in compliance with the covenants relating to the 2014 Senior Notes as of December 31, 2017.

2017 Senior Notes

On February 21, 2017, the Company completed a private placement offering of $1,000,000,000 aggregate principal amount of its unsecured 5.125% Senior Notes due 2027 (the 2017 Senior Notes) and used the note proceeds to immediately retire the remaining $127.6 million outstanding on the term loan B facility as well as repay $600 million of the term loan A facility and $250 million of the revolving credit facility under its Credit Agreement.

As of December 31, 2017, the estimated fair value of the Company’s 2017 Senior Notes was approximately $1,017.5 million. The fair value of the Company’s 2017 Senior Notes as of December 31, 2017 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 2017 Senior Notes. Interest will be payable on the 2017 Senior Notes at a rate of 5.125% per annum. Interest on the 2017 Senior Notes will be payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017. The 2017 Senior Notes will mature on March 15, 2027.

At any time and from time to time prior to December 15, 2026, the Company may redeem all or part of the 2017 Senior Notes, at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date.

In addition, at any time and from time to time prior to March 15, 2020, the Company may redeem up to 35% of the original aggregate principal amount of the 2017 Senior Notes with the proceeds of one or more qualified equity offerings, at a redemption price equal to 105.125%, plus accrued and unpaid interest. Furthermore, at any time on or after December 15, 2026, the Company may redeem on one or more occasions all or part of the 2017 Senior Notes at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest.

The indenture pursuant to which the 2017 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events. The indenture also contains customary negative covenants.

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

The Company was in compliance with the covenants relating to its 2017 Senior Notes as of December 31, 2017.

URS Senior Notes

In connection with the URS acquisition, the Company assumed URS 3.85% Senior Notes due 2017 (2017 URS Senior Notes) and the URS 5.00% Senior Notes due 2022 (2022 URS Senior Notes), totaling $1.0 billion (URS Senior Notes). The URS acquisition triggered change in control provisions in the URS Senior Notes that allowed the holders of the URS Senior Notes to redeem their URS Senior Notes at a cash price equal to 101% of the principal amount and, accordingly, the Company redeemed $572.3 million of the URS Senior Notes on October 24, 2014. The remaining 2017 URS Senior Notes matured and were fully redeemed on April 3, 2017 for $179.2 million using proceeds from a $185 million delayed draw term loan A facility tranche under the Credit Agreement. The 2022 URS Senior Notes are general unsecured senior obligations of AECOM Global II, LLC (as successor in interest to URS) and are fully and unconditionally guaranteed on a joint-and-several basis by certain former URS domestic subsidiary guarantors.

As of December 31, 2017, the estimated fair value of the 2022 URS Senior Notes was approximately $258.5 million. The carrying value of the 2022 URS Senior Notes on the Company’s Consolidated Balance Sheets as of December 31, 2017 was $247.8 million. The fair value of the 2022 URS Senior Notes as of December 31, 2017 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 2022 URS Senior Notes.

As of December 31, 2017, the Company was in compliance with the covenants relating to the 2022 URS Senior Notes.

Other Debt

Other debt consists primarily of obligations under capital leases and loans, and unsecured credit facilities. The Company’s unsecured credit facilities are primarily used for standby letters of credit issued for payment of performance guarantees. At December 31, 2017 and September 30, 2017, these outstanding standby letters of credit totaled $460.9 million and $445.7 million, respectively. As of December 31, 2017, the Company had $489.4 million available under these unsecured credit facilities.

Effective Interest Rate

The Company’s average effective interest rate on its total debt, including the effects of the interest rate swap agreements, during the three months ended December 31, 2017 and 2016 was 4.8% and 4.2%, respectively.

Interest expense in the consolidated statements of operations for the three months ended December 31, 2017 and December 31, 2016 included amortization of deferred debt issuance costs of $2.9 million and $2.8 million, respectively.

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Derivative Financial Instruments and Fair Value Measurements

3 Months Ended

Dec. 31, 2017

Derivative Financial Instruments and Fair Value Measurements

Derivative Financial Instruments and Fair Value Measurements

8.Derivative Financial Instruments and Fair Value Measurements

The Company uses certain interest rate derivative contracts to hedge interest rate exposures on the Company’s variable rate debt. The Company enters into foreign currency derivative contracts with financial institutions to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company’s hedging program is not designated for trading or speculative purposes.

The Company recognizes derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as accounting hedges in the accompanying consolidated statements of operations as cost of revenue, interest expense or to accumulated other comprehensive loss in the accompanying consolidated balance sheets.

Cash Flow Hedges

The Company uses interest rate swap agreements designated as cash flow hedges to fix the variable interest rates on portions of the Company’s debt. The Company also uses foreign currency contracts designated as cash flow hedges to hedge forecasted revenue transactions denominated in currencies other than the U.S. dollar. The Company initially reports any gain on the effective portion of a cash flow hedge as a component of accumulated other comprehensive loss. Depending on the type of cash flow hedge, the gain is subsequently reclassified to either interest expense when the interest expense on the variable rate debt is recognized, or to cost of revenue when the hedged revenues are recorded. If the hedged transaction becomes probable of not occurring, any gain or loss related to interest rate swap agreements or foreign currency contracts would be recognized in other income (expense). Further, the Company excludes the change in the time value of the foreign currency contracts from the assessment of hedge effectiveness. The Company records the premium paid or time value of a contract on the date of purchase as an asset. Thereafter, the Company recognizes any change to this time value in cost of revenue.

The notional principal, fixed rates and related expiration dates of the Company’s outstanding interest rate swap agreements were as follows:

December 31, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

September 30, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

The notional principal of outstanding foreign currency contracts to purchase Australian dollars (AUD) was AUD 13.2 million (or $9.9 million) and AUD 15.1 million (or $11.3 million) at December 31, 2017 and September 30, 2017, respectively.

Other Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts which are not designated as accounting hedges to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these contracts were not material for the three months ended December 31, 2017 and 2016.

Fair Value Measurements

The Company’s non-pension financial assets and liabilities recorded at fair values relate to derivative instruments and were not material at December 31, 2017 or 2016.

See Note 13 for accumulated balances and reporting period activities of derivatives related to reclassifications out of accumulated other comprehensive income or loss for the three months ended December 31, 2017 and 2016. Amounts recognized in accumulated other comprehensive loss from the Company’s foreign currency contracts were immaterial for all periods presented. Amounts reclassified from accumulated other comprehensive loss into income from the foreign currency options were immaterial for all periods presented. Additionally, there were no losses recognized in income due to amounts excluded from effectiveness testing from the Company’s interest rate swap agreements.

During the year ended September 30, 2015, the Company entered into a contingent consideration arrangement in connection with a business acquisition. Under the arrangement, the Company agreed to pay cash to the sellers if certain financial performance thresholds are achieved in the future. The fair value of the contingent consideration liability, net of amounts paid, as of December 31, 2017 and September 30, 2017 was $12 million and $13 million, respectively. This liability is a Level 3 fair value measurement recorded within other accrued liabilities, and was valued based on estimated future net cash flows. Any future changes in the fair value of this contingent consideration liability will be recognized in earnings during the applicable period.

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Share-based Payments

3 Months Ended

Dec. 31, 2017

Share-based Payments

Share-based Payments

9.Share-based Payments

The fair value of the Company’s employee stock option awards is estimated on the date of grant. The expected term of awards granted represents the period of time the awards are expected to be outstanding. The risk-free interest rate is based on U.S. Treasury bond rates with maturities equal to the expected term of the option on the grant date. The Company uses historical data as a basis to estimate the probability of forfeitures.

Stock option activity for the three months ended December 31 was as follows:

	2017				2016
	Shares of stock under options		Weighted average exercise price		Shares of stock under options		Weighted average exercise price
	(in millions)				(in millions)
Outstanding at September 30	0.7		$	31.11	0.9		$	30.36
Options granted	—		—		—		—
Options exercised	(0.1	)	27.67		(0.1	)	25.46
Options forfeited or expired	—		—		—		—
Outstanding at December 31	0.6		31.54		0.8		30.86
Vested and expected to vest in the future as of December 31	0.6		$	31.54	0.8		$	30.86

The Company grants stock units to employees under its Performance Earnings Program (PEP), whereby units are earned and issued dependent upon meeting established cumulative performance objectives and vest over a three-year service period. Additionally, the Company issues restricted stock units to employees which are earned based on service conditions. The grant date fair value of PEP awards and restricted stock unit awards is that day’s closing market price of the Company’s common stock. The weighted average grant date fair value of PEP awards were $37.90 and $38.16 during the three months ended December 31, 2017 and 2016, respectively. The weighted average grant date fair value of restricted stock unit awards were $36.93 and $38.08 during the three months ended December 31, 2017 and 2016, respectively. Total compensation expense related to these share-based payments including stock options were $16.5 million and $21.3 million during the three months ended December 31, 2017 and 2016, respectively. Unrecognized compensation expense related to total share-based payments outstanding as of December 31, 2017 and September 30, 2017 were $148.5 million and $96.8 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years.

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Income Taxes

3 Months Ended

Dec. 31, 2017

Income Taxes

Income Taxes

10.   Income Taxes

During the quarter ended December 31, 2017, President Trump signed what is commonly referred to as The Tax Cuts and Jobs Act (Tax Act) into law. The Tax Act reduces the Company’s U.S. federal corporate tax rate from 35% to a blended tax rate of 24.5% for the Company’s fiscal year ending September 30, 2018 and 21% for fiscal years thereafter, requires companies to pay a one-time transition tax on accumulated earnings of foreign subsidiaries, creates new taxes on certain foreign sourced earnings and eliminates or reduces certain deductions.

Given the significance of the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

At December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Tax Act; however, the Company made a reasonable estimate of the effects on its existing deferred tax balances and certain other assets and liabilities and the one-time transition tax. The Company has not been able to make a reasonable estimate of the impact on its indefinite reinvestment of earnings of certain foreign subsidiaries and therefore will continue to account for those items based on its existing accounting under ASC 740.  As further guidance and accounting interpretations are expected over the next 12 months, the Company’s analysis is considered incomplete.

Other significant provisions include a base erosion anti-abuse tax (BEAT) on excessive amounts paid to foreign related parties and a minimum tax on global intangible low-taxed income (GILTI).  The Company has not elected a method of accounting for BEAT and GILTI and will only do so after completion of the analysis of the provisions and the impact to the Company.

The Company’s effective tax rate was (60.9)% and 27.4% for the three months ended December 31, 2017 and 2016, respectively. The most significant items contributing to the difference between the statutory U.S. federal income tax rate of 24.5% and the Company’s effective tax rate for the three month period ended December 31, 2017 were a $41.7 million net benefit related to one-time U.S. federal tax law changes, a benefit of $11.2 million related to changes in uncertain tax positions primarily in the U.S. and Canada, and a benefit of $8.4 million related to income tax credits and incentives. These items are not expected to have a continuing impact on the effective tax rate for the remainder of the fiscal year except for the benefits related to income tax credits and incentives.

The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Tax Act and refining its calculations which could potentially affect the measurement of these balances. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balance was a $36.1 million tax benefit. In addition, the Company released the deferred tax liability and recorded a tax benefit of $77.0 million related to certain foreign subsidiaries for which the undistributed earnings are not intended to be reinvested indefinitely and accrued current tax on these earnings as part of the one-time transition tax.

The Company recorded a provisional amount for the one-time transition tax liability for its foreign subsidiaries resulting in an increase in income tax expense of $71.4 million. The Company has not yet completed its calculation of the total foreign earnings and profits of its foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets at the end of the fiscal year. This amount may change when the Company finalizes the calculation of foreign earnings and finalize the amounts held in cash or other specified assets.

The Company is utilizing the annual effective tax rate method under ASC 740 to compute its interim tax provision. The Company’s effective tax rate fluctuates from quarter to quarter due to various factors including the change in the mix of global income and expenses, outcomes of administrative audits, changes in the assessment of valuation allowances due to management’s consideration of new positive or negative evidence during the quarter, and changes in enacted tax laws and their interpretations which upon enactment include possible tax reform around the world arising from the result of the base erosion and profit shifting project undertaken by the Organisation for Economic Co-operation Development which, if finalized and adopted, could have a material impact on the Company’s income tax expense and deferred tax balances.

The Company believes the outcomes which are reasonably possible within the next twelve months, including lapses in statutes of limitations, could result in a decrease of approximately $15 million in the liability for uncertain tax positions.

Generally, the Company does not provide for U.S. taxes or foreign withholding taxes on gross book-tax differences in its non-U.S. subsidiaries because such basis differences of approximately $1.7 billion are able to and intended to be reinvested indefinitely. At December 31, 2017 the Company has not determined whether it will continue to indefinitely reinvest the earnings of certain foreign subsidiaries and therefore will continue to account for these undistributed earnings based on existing accounting under ASC 740 and not accrue additional tax outside of the one-time transition tax described above. There may also be additional U.S. or foreign income tax liability upon repatriation, although the calculation of such additional taxes is not practicable.

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Earnings Per Share

3 Months Ended

Dec. 31, 2017

Earnings Per Share

Earnings Per Share

11.   Earnings Per Share

Basic earnings per share (EPS) excludes dilution and is computed by dividing net income attributable to AECOM by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income attributable to AECOM by the weighted average number of common shares outstanding and potential common shares for the period. The Company includes as potential common shares the weighted average dilutive effects of equity awards using the treasury stock method. For the three months ended December 31, 2017 and 2016, equity awards excluded from the calculation of potential common shares were not significant.

The following table sets forth a reconciliation of the denominators for basic and diluted earnings per share:

	Three Months Ended
	December 31, 2017	December 31, 2016
	(in millions)
Denominator for basic earnings per share	157.9	154.3
Potential common shares	3.9	3.7
Denominator for diluted earnings per share	161.8	158.0

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Other Financial Information

3 Months Ended

Dec. 31, 2017

Other Financial Information

Other Financial Information

12.   Other Financial Information

Accrued expenses and other current liabilities consist of the following:

	December 31, 2017		September 30, 2017
	(in millions)
Accrued salaries and benefits	$	900.8	$	1,018.5
Accrued contract costs	833.5		911.9
Other accrued expenses	337.9		315.1
	$	2,072.2	$	2,245.5

Accrued contract costs above include balances related to professional liability accruals of $537.7 million and $547.9 million as of December 31, 2017 and September 30, 2017, respectively. The remaining accrued contract costs primarily relate to costs for services provided by subcontractors and other non-employees. Liabilities recorded related to accrued contract losses were not material as of December 31, 2017 and September 30, 2017.  The Company did not have material revisions to estimates for contracts where revenue is recognized using the percentage-of-completion method during the three months ended December 31, 2017.  The Company incurred $22.4 million of primarily severance expenses relating to restructuring activities during the three months ended December 31, 2017, of which $9.6 million was paid as of December 31, 2017.

During the twelve months ended September 30, 2016, the Company recorded revenue related to the expected accelerated recovery of a pension related entitlement from the federal government of approximately $50 million, which is included in accounts receivable-net at December 31, 2017. The entitlement resulted from pension costs that are reimbursable through certain government contracts in accordance with Cost Accounting Standards. The accelerated recognition resulted from an amendment to freeze pension benefits under URS Federal Services, Inc. Employees Retirement Plan. The actual amount of reimbursement may vary from the Company’s expectation.

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Reclassifications out of Accumulated Other Comprehensive Loss

3 Months Ended

Dec. 31, 2017

Reclassifications out of Accumulated Other Comprehensive Loss

Reclassifications out of Accumulated Other Comprehensive Loss

13.   Reclassifications out of Accumulated Other Comprehensive Loss

The accumulated balances and reporting period activities for the three months ended December 31, 2017 and 2016 related to reclassifications out of accumulated other comprehensive loss are summarized as follows (in millions):

	Pension Related Adjustments			Foreign Currency Translation Adjustments			(Loss)/Gain on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2017	$	(281.9	)	$	(418.4	)	$	(0.4	)	$	(700.7	)
Other comprehensive (loss) income before reclassification	—			(6.8		)	0.5			(6.3		)
Amounts reclassified from accumulated other comprehensive income (loss)	2.5			—			0.3			2.8
Balances at December 31, 2017	$	(279.4	)	$	(425.2	)	$	0.4		$	(704.2	)

	Pension Related Adjustments			Foreign Currency Translation Adjustments			Loss on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2016	$	(368.9	)	$	(483.7	)	$	(5.0	)	$	(857.6	)
Other comprehensive (loss) income before reclassification	13.7			(73.5		)	0.7			(59.1		)
Amounts reclassified from accumulated other comprehensive loss	3.2			—			0.6			3.8
Balances at December 31, 2016	$	(352.0	)	$	(557.2	)	$	(3.7	)	$	(912.9	)

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Commitments and Contingencies

3 Months Ended

Dec. 31, 2017

Commitments and Contingencies

Commitments and Contingencies

14.   Commitments and Contingencies

The Company records amounts representing its probable estimated liabilities relating to claims, guarantees, litigation, audits and investigations. The Company relies in part on qualified actuaries to assist it in determining the level of reserves to establish for insurance-related claims that are known and have been asserted against it, and for insurance-related claims that are believed to have been incurred based on actuarial analysis, but have not yet been reported to the Company’s claims administrators as of the respective balance sheet dates. The Company includes any adjustments to such insurance reserves in its consolidated results of operations. The Company’s reasonably possible loss disclosures are presented on a gross basis prior to the consideration of insurance recoveries. The Company does not record gain contingencies until they are realized. In the ordinary course of business, the Company may not be aware that it or its affiliates are under investigation and may not be aware of whether or not a known investigation has been concluded.

In the ordinary course of business, the Company may enter into various arrangements providing financial or performance assurance to clients, lenders, or partners. Such arrangements include standby letters of credit, surety bonds, and corporate guarantees to support the creditworthiness or the project execution commitments of its affiliates, partnerships and joint ventures. Performance arrangements typically have various expiration dates ranging from the completion of the project contract and extending beyond contract completion in certain circumstances such as for warranties. The Company may also guarantee that a project, when complete, will achieve specified performance standards. If the project subsequently fails to meet guaranteed performance standards, the Company may incur additional costs, pay liquidated damages or be held responsible for the costs incurred by the client to achieve the required performance standards. The potential payment amount of an outstanding performance arrangement is typically the remaining cost of work to be performed by or on behalf of third parties. Generally, under joint venture arrangements, if a partner is financially unable to complete its share of the contract, the other partner(s) may be required to complete those activities.

At December 31, 2017 and September 30, 2017, the Company was contingently liable in the amount of approximately $515.7 million and $503.8 million, respectively, in issued standby letters of credit and $5.7 billion and $5.7 billion, respectively, in issued surety bonds primarily to support project execution.

In the ordinary course of business, the Company enters into various agreements providing financial or performance assurances to clients on behalf of certain unconsolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities.

In addition, in connection with the investment activities of AECOM Capital, the Company provides guarantees of certain obligations, including guarantees for completion of projects, repayment of debt, environmental indemnity obligations and other lender required guarantees.

DOE Deactivation, Demolition, and Removal Project

Washington Group International, an Ohio company (WGI Ohio), an affiliate of URS, executed a cost-reimbursable task order with the Department of Energy (DOE) in 2007 to provide deactivation, demolition and removal services at a New York State project site that, during 2010, experienced contamination and performance issues and remains uncompleted. In February 2011, WGI Ohio and the DOE executed a Task Order Modification that changed some cost-reimbursable contract provisions to at-risk. The Task Order Modification, including subsequent amendments, requires the DOE to pay all project costs up to $106 million, requires WGI Ohio and the DOE to equally share in all project costs incurred from $106 million to $146 million, and requires WGI Ohio to pay all project costs exceeding $146 million.

Due to unanticipated requirements and permitting delays by federal and state agencies, as well as delays and related ground stabilization activities caused by Hurricane Irene in 2011, WGI Ohio has been required to perform work outside the scope of the Task Order Modification. In December 2014, WGI Ohio submitted claims against the DOE pursuant to the Contracts Disputes Acts seeking recovery of $103 million, including additional fees on changed work scope. WGI Ohio has incurred and continues to incur additional project costs outside the scope of the contract as a result of differing site and ground conditions and intends to submit additional formal claims against the DOE.

Due to significant delays and uncertainties about responsibilities for the scope of remaining work, final project completion costs and other associated costs have exceeded $100 million over the contracted and claimed amounts. WGI Ohio assets and liabilities, including the value of the above costs and claims, were measured at their fair value on October 17, 2014, the date AECOM acquired WGI Ohio’s parent company, see Note 3, which measurement has been reevaluated to account for developments pertaining to this matter.

WGI Ohio can provide no certainty that it will recover the claims submitted against DOE in December 2014, any future claims or any other project costs after December 2014 that WGI Ohio may be obligated to incur including the remaining project completion costs, which could have a material adverse effect on the Company’s results of operations.

SR-91

One of the Company’s wholly-owned subsidiaries, URS Corporation, entered into a partial fixed cost and partial time and material design agreement in 2012 with a design build contractor for a state route highway construction project in Riverside County and Orange County, California. On April 5, 2017, URS Corporation filed an $8.2 million amended complaint in the Superior Court of California against the design build contractor for its failure to pay for services performed under the design agreement. On July 3, 2017, the design build contractor filed an amended counterclaim in Superior Court alleging breaches of contract, negligent interference and professional negligence pertaining to URS Corporation’s performance of design services under the design agreement, seeking purported damages of $70 million. URS Corporation cannot provide assurances that it will be successful in the recovery of the amounts owed to it under the design agreement or in its defense against the amounts alleged under the counterclaim that URS Corporation believes are without merit and that it intends to vigorously defend against. The potential range of loss in excess of any current accrual cannot be reasonably estimated at this time, primarily because the matter involves multiple regulatory issues; there is substantial uncertainty regarding any alleged damages; and the matter is at a preliminary stage of litigation.

New York Department of Environmental Conservation

The following matter is disclosed pursuant to Regulation S-K, Item 103, Instruction 5.C pertaining to a government authority environmental claim exceeding $100,000 against an AECOM affiliate. In September 2017, AECOM USA, Inc., one of the Company’s wholly-owned subsidiaries, was advised by the New York State Department of Environmental Conservation (DEC) of allegations that it committed environmental permit violations pursuant to the New York Environmental Conservation Law (ECL) associated with AECOM USA, Inc.’s oversight of a stream restoration project for Schoharie County which could result in substantial penalties if calculated under the ECL’s maximum civil penalty provisions. AECOM USA, Inc. disputes this claim and intends to continue to defend this matter vigorously; however, AECOM USA, Inc., cannot provide assurances that it will be successful in these efforts. The potential range of loss in excess of any current accrual cannot be reasonably estimated at this time, primarily because the matter involves complex and unique environmental and regulatory issues; the project site involves the oversight and involvement of various local, state and federal government agencies; there is substantial uncertainty regarding any alleged damages; and the matter is in its preliminary stage of the government’s claims and any negotiations of a consent order.

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Reportable Segments

3 Months Ended

Dec. 31, 2017

Reportable Segments

Reportable Segments

15.   Reportable Segments

The Company’s operations are organized into four reportable segments: Design and Consulting Services (DCS), Construction Services (CS), Management Services (MS), and AECOM Capital (ACAP). During the third quarter of fiscal 2017, operating activities of ACAP achieved a level of significance sufficient to warrant disclosure as a separate reportable segment. Prior to the third quarter of fiscal 2017, ACAP’s operating results were included in the corporate segment, and comparable periods were reclassified to reflect the change. The Company’s DCS reportable segment delivers planning, consulting, architectural, environmental, and engineering design services to commercial and government clients worldwide. The Company’s CS reportable segment provides construction services primarily in the Americas. The Company’s MS reportable segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the U.S. government. The Company’s ACAP segment invests in real estate, public-private partnership (P3) and infrastructure projects. These reportable segments are organized by the types of services provided, the differing specialized needs of the respective clients, and how the Company manages its business. The Company has aggregated various operating segments into its 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.

The following tables set forth summarized financial information concerning the Company’s reportable segments:

Reportable Segments:	Design and Consulting Services			Construction Services			Management Services			AECOM Capital			Corporate			Total
	(in millions)
Three Months Ended December 31, 2017:
Revenue	$	1,941.9		$	2,125.5		$	843.4		$	—		$	—		$	4,910.8
Gross profit	77.8			27.1			31.3			—			—			136.2
Equity in earnings of joint ventures	7.5			13.4			8.8			—			—			29.7
General and administrative expenses	—			—			—			(2.6		)	(32.1		)	(34.7		)
Operating income	85.3			40.5			40.1			(2.6		)	(32.1		)	131.2
Gross profit as a % of revenue	4.0		%	1.3		%	3.7		%	—			—			2.8		%
Three Months Ended December 31, 2016:
Revenue	$	1,840.8		$	1,750.2		$	767.3		$	—		$	—		$	4,358.3
Gross profit	95.2			13.8			61.0			—			—			170.0
Equity in earnings of joint ventures	4.1			4.3			13.0			—			—			21.4
General and administrative expenses	—			—			—			(2.7		)	(29.9		)	(32.6		)
Acquisition and integration expenses	—			—			—			—			(15.4		)	(15.4		)
Operating income	99.3			18.1			74.0			(2.7		)	(45.3		)	143.4
Gross profit as a % of revenue	5.2		%	0.8		%	7.9		%	—			—			3.9		%
Reportable Segments:
Total assets
December 31, 2017	$	7,118.1		$	4,270.6		$	2,679.7		$	205.6		$	349.0		$	14,623.0
September 30, 2017	6,992.6			4,114.5			2,704.6			199.1			386.2			14,397.0

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Condensed Consolidating Financial Information

3 Months Ended

Dec. 31, 2017

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

16.Condensed Consolidating Financial Information

In connection with the registration of the Company’s 2014 Senior Notes that were declared effective by the SEC on September 29, 2015, AECOM became subject to the requirements of Rule 3-10 of Regulation S-X regarding financial statements of guarantors and issuers of guaranteed securities. Both the 2014 Senior Notes and the 2017 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by certain of AECOM’s directly and indirectly 100% owned subsidiaries (the Subsidiary Guarantors). Other than customary restrictions imposed by applicable statutes, there are no restrictions on the ability of the Subsidiary Guarantors to transfer funds to AECOM in the form of cash dividends, loans or advances.

The following condensed consolidating financial information, which is presented for AECOM, the Subsidiary Guarantors on a combined basis and AECOM’s non-guarantor subsidiaries on a combined basis, is provided to satisfy the disclosure requirements of Rule 3-10 of Regulation S-X.

Condensed Consolidating Balance Sheets

(unaudited — in millions)

December 31, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	4.1	$	213.2	$	595.9	$	—		$	813.2
Accounts receivable—net	—		2,283.7		3,030.0		—			5,313.7
Intercompany receivable	733.6		91.0		128.0		(952.6		)	—
Prepaid expenses and other current assets	91.2		305.9		279.8		—			676.9
Income taxes receivable	11.0		—		27.2		—			38.2
TOTAL CURRENT ASSETS	839.9		2,893.8		4,060.9		(952.6		)	6,842.0
PROPERTY AND EQUIPMENT—NET	165.9		220.4		245.3		—			631.6
DEFERRED TAX ASSETS—NET	154.8		111.4		251.6		(301.0		)	216.8
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,775.5		2,756.7		—		(9,532.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	8.6		52.4		309.3		—			370.3
GOODWILL	—		3,318.6		2,678.4		—			5,997.0
INTANGIBLE ASSETS—NET	—		257.4		154.4		—			411.8
OTHER NON-CURRENT ASSETS	8.7		21.2		123.6		—			153.5
TOTAL ASSETS	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	2.4	$	—	$	—	$	—		$	2.4
Accounts payable	42.5		1,098.2		1,285.8		—			2,426.5
Accrued expenses and other current liabilities	76.5		955.8		1,039.9		—			2,072.2
Income taxes payable	—		—		18.2		—			18.2
Intercompany payable	93.8		761.7		170.0		(1,025.5		)	—
Billings in excess of costs on uncompleted contracts	2.9		355.2		637.8		—			995.9
Current portion of long-term debt	110.7		27.7		22.5		—			160.9
TOTAL CURRENT LIABILITIES	328.8		3,198.6		3,174.2		(1,025.5		)	5,676.1
OTHER LONG-TERM LIABILITIES	103.5		264.0		477.4		—			844.9
DEFERRED TAX LIABILITY—NET	—		—		333.3		(301.0		)	32.3
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		472.2		(472.3		)	—
LONG-TERM DEBT	3,422.0		276.9		40.0		—			3,738.9
TOTAL LIABILITIES	3,854.4		3,739.5		4,497.1		(1,798.8		)	10,292.2
TOTAL AECOM STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,100.0		(8,987.0		)	4,104.4
Noncontrolling interests	—		—		226.4		—			226.4
TOTAL STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,326.4		(8,987.0		)	4,330.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0

Condensed Consolidating Balance Sheets

(in millions)

September 30, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	32.6	$	251.6	$	518.2	$	—		$	802.4
Accounts receivable—net	—		2,159.2		2,968.5		—			5,127.7
Intercompany receivable	723.6		90.9		181.4		(995.9		)	—
Prepaid expenses and other current assets	67.5		338.4		290.8		—			696.7
Income taxes receivable	4.3		—		51.1		—			55.4
TOTAL CURRENT ASSETS	828.0		2,840.1		4,010.0		(995.9		)	6,682.2
PROPERTY AND EQUIPMENT—NET	160.2		207.1		254.1		—			621.4
DEFERRED TAX ASSETS—NET	239.7		55.2		171.0		(294.6		)	171.3
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,606.2		2,865.0		—		(9,471.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	7.2		50.3		306.7		—			364.2
GOODWILL	—		3,318.6		2,674.3		—			5,992.9
INTANGIBLE ASSETS—NET	—		271.6		143.5		—			415.1
OTHER NON-CURRENT ASSETS	8.7		17.6		123.6		—			149.9
TOTAL ASSETS	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	1.1	$	—	$	0.1	$	—		$	1.2
Accounts payable	33.8		1,023.7		1,192.4		—			2,249.9
Accrued expenses and other current liabilities	92.2		1,112.9		1,040.4		—			2,245.5
Income taxes payable	—		—		38.2		—			38.2
Intercompany payable	149.2		787.5		161.4		(1,098.1		)	—
Billings in excess of costs on uncompleted contracts	3.4		313.1		586.3		—			902.8
Current portion of long-term debt	110.9		14.9		15.0		—			140.8
TOTAL CURRENT LIABILITIES	390.6		3,252.1		3,033.8		(1,098.1		)	5,578.4
OTHER LONG-TERM LIABILITIES	102.3		285.7		493.3		—			881.3
DEFERRED TAX LIABILITY—NET	—		—		315.1		(294.6		)	20.5
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		467.2		(467.3		)	—
LONG-TERM DEBT	3,366.9		281.6		53.6		—			3,702.1
TOTAL LIABILITIES	3,859.9		3,819.4		4,363.0		(1,860.0		)	10,182.3
TOTAL AECOM STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,101.6		(8,901.7		)	3,996.1
Noncontrolling interests	—		—		218.6		—			218.6
TOTAL STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,320.2		(8,901.7		)	4,214.7
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0

Condensed Consolidating Statements of Operations

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,433.2		$	2,489.6		$	(12.0	)	$	4,910.8
Cost of revenue	—			2,317.1			2,469.5			(12.0		)	4,774.6
Gross profit	—			116.1			20.1			—			136.2
Equity in earnings from subsidiaries	206.1			26.4			—			(232.5		)	—
Equity in earnings of joint ventures	—			12.3			17.4			—			29.7
General and administrative expenses	(32.1		)	—			(2.6		)	—			(34.7		)
Income from operations	174.0			154.8			34.9			(232.5		)	131.2
Other income	0.2			5.3			2.8			(6.0		)	2.3
Interest expense	(52.3		)	(4.7		)	(5.2		)	6.0			(56.2		)
Income before income tax expense (benefit)	121.9			155.4			32.5			(232.5		)	77.3
Income tax expense (benefit)	10.6			28.9			(86.6		)	—			(47.1		)
Net income	111.3			126.5			119.1			(232.5		)	124.4
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(13.1		)	—			(13.1		)
Net income attributable to AECOM	$	111.3		$	126.5		$	106.0		$	(232.5	)	$	111.3

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,281.5		$	2,090.1		$	(13.3	)	$	4,358.3
Cost of revenue	—			2,161.2			2,040.4			(13.3		)	4,188.3
Gross profit	—			120.3			49.7			—			170.0
Equity in earnings from subsidiaries	117.6			25.0			—			(142.6		)	—
Equity in earnings of joint ventures	—			9.9			11.5			—			21.4
General and administrative expenses	(29.9		)	—			(2.7		)	—			(32.6		)
Acquisition and integration expenses	(15.4		)	—			—			—			(15.4		)
Income from operations	72.3			155.2			58.5			(142.6		)	143.4
Other income	0.4			7.6			2.9			(10.1		)	0.8
Interest expense	(47.8		)	(5.7		)	(10.2		)	10.1			(53.6		)
Income before income tax (benefit) expense	24.9			157.1			51.2			(142.6		)	90.6
Income tax (benefit) expense	(22.3		)	35.9			11.2			—			24.8
Net income	47.2			121.2			40.0			(142.6		)	65.8
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(18.6		)	—			(18.6		)
Net income attributable to AECOM	$	47.2		$	121.2		$	21.4		$	(142.6	)	$	47.2

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	111.3	$	126.5	$	119.1		$	(232.5	)	$	124.4
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	0.7		—		0.1			—			0.8
Foreign currency translation adjustments	—		—		(6.0		)	—			(6.0		)
Pension adjustments, net of tax	0.8		—		1.7			—			2.5
Other comprehensive income (loss), net of tax	1.5		—		(4.2		)	—			(2.7		)
Comprehensive income, net of tax	112.8		126.5		114.9			(232.5		)	121.7
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(13.9		)	—			(13.9		)
Comprehensive income attributable to AECOM, net of tax	$	112.8	$	126.5	$	101.0		$	(232.5	)	$	107.8

	For the three months ended December 31, 2016
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	47.2	$	121.2	$	40.0		$	(142.6	)	$	65.8
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	2.9		—		(1.5		)	—			1.4
Foreign currency translation adjustments	—		—		(73.9		)	—			(73.9		)
Pension adjustments, net of tax	0.6		—		16.3			—			16.9
Other comprehensive income (loss), net of tax	3.5		—		(59.1		)	—			(55.6		)
Comprehensive income (loss), net of tax	50.7		121.2		(19.1		)	(142.6		)	10.2
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(18.3		)	—			(18.3		)
Comprehensive income (loss) attributable to AECOM, net of tax	$	50.7	$	121.2	$	(37.4	)	$	(142.6	)	$	(8.1	)

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(64.4	)	$	4.8		$	112.0		$	—		$	52.4
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	—			—			2.2			—			2.2
Cash acquired from consolidation of joint venture	—			—			7.6			—			7.6
Net investment in unconsolidated joint ventures	—			(3.6		)	(15.4		)	—			(19.0		)
Proceeds from sale of investments	—			—			0.2			—			0.2
Payments for capital expenditures, net of disposals	3.4			(17.0		)	(4.9		)	—			(18.5		)
Net receipts from (investment in) intercompany notes	0.6			(5.1		)	28.8			(24.3		)	—
Other intercompany investing activities	(4.2		)	82.1			—			(77.9		)	—
Net cash (used in) provided by investing activities	(0.2		)	56.4			18.5			(102.2		)	(27.5		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,240.8			—			35.7			—			1,276.5
Repayments of borrowings under credit agreements	(1,187.4		)	(4.7		)	(44.1		)	—			(1,236.2		)
Proceeds from issuance of common stock	9.5			—			—			—			9.5
Proceeds from exercise of stock options	2.7			—			—			—			2.7
Payments to repurchase common stock	(26.7		)	—			—			—			(26.7		)
Net distributions to noncontrolling interests	—			—			(16.8		)	—			(16.8		)
Other financing activities	0.9			(36.8		)	9.9			—			(26.0		)
Net (repayments) borrowings on intercompany notes	(3.7		)	(25.1		)	4.5			24.3			—
Other intercompany financing activities	—			(33.0		)	(44.9		)	77.9			—
Net cash provided by (used in) financing activities	36.1			(99.6		)	(55.7		)	102.2			(17.0		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			2.9			—			2.9
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(28.5		)	(38.4		)	77.7			—			10.8
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	32.6			251.6			518.2			—			802.4
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	4.1		$	213.2		$	595.9		$	—		$	813.2

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(27.0	)	$	83.2		$	21.3		$	—		$	77.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Net investment in unconsolidated joint ventures	—			(0.8		)	(17.3		)	—			(18.1		)
Proceeds from sale of investments	—			—			0.3			—			0.3
Payments for capital expenditures, net of disposals	(7.2		)	(9.7		)	(4.1		)	—			(21.0		)
Net investment in intercompany notes	(0.5		)	(8.7		)	(1.2		)	10.4			—
Other intercompany investing activities	32.1			14.4			—			(46.5		)	—
Net cash provided by (used in) investing activities	24.4			(4.8		)	(22.3		)	(36.1		)	(38.8		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,634.2			—			0.6			—			1,634.8
Repayments of borrowings under credit agreements	(1,595.2		)	(6.4		)	(5.8		)	—			(1,607.4		)
Proceeds from issuance of common stock	9.9			—			—			—			9.9
Proceeds from exercise of stock options	2.1			—			—			—			2.1
Payments to repurchase common stock	(17.5		)	—			—			—			(17.5		)
Net distributions to noncontrolling interests	—			—			(21.9		)	—			(21.9		)
Other financing activities	(10.7		)	(65.5		)	49.8			—			(26.4		)
Net borrowings on intercompany notes	—			1.1			9.3			(10.4		)	—
Other intercompany financing activities	—			(31.8		)	(14.7		)	46.5			—
Net cash provided by (used in) financing activities	22.8			(102.6		)	17.3			36.1			(26.4		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(6.7		)	—			(6.7		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	20.2			(24.2		)	9.6			—			5.6
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1.8			183.7			506.6			—			692.1
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	22.0		$	159.5		$	516.2		$	—		$	697.7

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Business Acquisitions, Goodwill and Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2017

Business Acquisitions, Goodwill and Intangible Assets

Schedule of acquisition and integration expenses

	Three months ended Dec 31,
	2017		2016
	(in millions)
Severance and personnel costs	$	—	$	11.5
Professional service, real estate-related, and other expenses	—		3.9
Total	$	—	$	15.4

Schedule of changes in the carrying value of goodwill by reportable segment

	September 30, 2017		Acquisitions		Measurement Period Adjustments			Foreign Exchange Impact			December 31, 2017
	(in millions)
Design and Consulting Services	$	3,218.9	$	—	$	—		$	4.3		$	3,223.2
Construction Services	1,049.9		—		(2.3		)	(1.6		)	1,046.0
Management Services	1,724.1		—		—			3.7			1,727.8
Total	$	5,992.9	$	—	$	(2.3	)	$	6.4		$	5,997.0

Schedule of finite-lived intangible assets by major class

	December 31, 2017							September 30, 2017
	Gross Amount		Accumulated Amortization			Intangible Assets, Net		Gross Amount		Accumulated Amortization			Intangible Assets, Net		Amortization Period
	(in millions)														(years)
Backlog and customer relationships	$	1,304.0	$	(893.7	)	$	410.3	$	1,283.6	$	(870.2	)	$	413.4	1 – 11
Trademark / tradename	18.3		(16.8		)	1.5		18.3		(16.6		)	1.7		0.3 - 2
Total	$	1,322.3	$	(910.5	)	$	411.8	$	1,301.9	$	(886.8	)	$	415.1

Schedule of estimated future amortization expense of intangible assets

Fiscal Year	(in millions)
2018 (nine months remaining)	$	71.0
2019	87.8
2020	73.7
2021	62.8
2022	49.7
Thereafter	66.8
Total	$	411.8

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Accounts Receivable - Net (Tables)

3 Months Ended

Dec. 31, 2017

Accounts Receivable - Net

Schedule of net accounts receivable

	December 31, 2017			September 30, 2017
	(in millions)
Billed	$	2,511.6		$	2,317.8
Unbilled	2,254.5			2,293.5
Contract retentions	598.9			568.6
Total accounts receivable—gross	5,365.0			5,179.9
Allowance for doubtful accounts	(51.3		)	(52.2		)
Total accounts receivable—net	$	5,313.7		$	5,127.7

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Joint Ventures and Variable Interest Entities (Tables)

3 Months Ended

Dec. 31, 2017

Joint Ventures and Variable Interest Entities

Summary of unaudited financial information of the consolidated joint ventures

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	914.6	$	832.1
Non-current assets	203.3		188.8
Total assets	$	1,117.9	$	1,020.9
Current liabilities	$	647.8	$	524.9
Non-current liabilities	12.4		12.4
Total liabilities	660.2		537.3
Total AECOM equity	241.6		274.7
Noncontrolling interests	216.1		208.9
Total owners’ equity	457.7		483.6
Total liabilities and owners’ equity	$	1,117.9	$	1,020.9

Summary of unaudited financial information of the unconsolidated joint ventures

	December 31, 2017		September 30, 2017
	(in millions)
Current assets	$	2,069.6	$	1,912.2
Non-current assets	787.5		749.8
Total assets	$	2,857.1	$	2,662.0
Current liabilities	$	1,726.4	$	1,570.2
Non-current liabilities	177.0		185.1
Total liabilities	1,903.4		1,755.3
Joint ventures’ equity	953.7		906.7
Total liabilities and joint ventures’ equity	$	2,857.1	$	2,662.0
AECOM’s investment in joint ventures	$	370.3	$	364.2

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Revenue	$	1,478.6	$	1,142.0
Cost of revenue	1,395.2		1,085.8
Gross profit	$	83.4	$	56.2
Net income	$	82.1	$	54.3

Summary of AECOM's equity in earnings of unconsolidated joint ventures

	Three Months Ended
	December 31, 2017		December 31, 2016
	(in millions)
Pass through joint ventures	$	13.2	$	7.5
Other joint ventures	16.5		13.9
Total	$	29.7	$	21.4

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Pension Benefit Obligations (Tables)

3 Months Ended

Dec. 31, 2017

Pension Benefit Obligations

Components of net periodic cost for the Company's pension plans

	Three Months Ended
	December 31, 2017						December 31, 2016
	U.S.			Int’l			U.S.			Int’l
	(in millions)
Components of net periodic (benefit) cost:
Service costs	$	1.2		$	0.3		$	1.1		$	0.3
Interest cost on projected benefit obligation	5.2			7.9			4.8			7.0
Expected return on plan assets	(7.9		)	(10.7		)	(7.8		)	(10.2		)
Amortization of prior service cost	—			—			—			(0.1		)
Amortization of net loss	1.0			2.0			1.1			3.2
Settlement loss recognized	—			0.1			—			—
Net periodic (benefit) cost	$	(0.5	)	$	(0.4	)	$	(0.8	)	$	0.2

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Debt (Tables)

3 Months Ended

Dec. 31, 2017

Debt

Schedule of debt

	December 31, 2017			September 30, 2017
	(in millions)
2014 Credit Agreement	$	962.3		$	908.7
2014 Senior Notes	1,600.0			1,600.0
2017 Senior Notes	1,000.0			1,000.0
URS Senior Notes	247.8			247.7
Other debt	141.6			140.0
Total debt	3,951.7			3,896.4
Less: Current portion of debt and short-term borrowings	(163.3		)	(142.0		)
Less: Unamortized debt issuance costs	(49.5		)	(52.3		)
Long-term debt	$	3,738.9		$	3,702.1

Schedule of maturities of debt

The following table presents, in millions, scheduled maturities of the Company’s debt as of December 31, 2017:

Fiscal Year
2018 (nine months remaining)	$	109.7
2019	152.2
2020	123.0
2021	686.9
2022	258.2
Thereafter	2,621.7
Total	$	3,951.7

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Derivative Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2017

Derivative Financial Instruments and Fair Value Measurements

Notional principle, fixed rates and related expiration dates of outstanding interest rate swap agreements

December 31, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

September 30, 2017
Notional Amount (in millions)		Fixed Rate		Expiration Date
$	300.0	1.63	%	June 2018
300.0		1.54	%	September 2018

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Share-based Payments (Tables)

3 Months Ended

Dec. 31, 2017

Share-based Payments

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	2017				2016
	Shares of stock under options		Weighted average exercise price		Shares of stock under options		Weighted average exercise price
	(in millions)				(in millions)
Outstanding at September 30	0.7		$	31.11	0.9		$	30.36
Options granted	—		—		—		—
Options exercised	(0.1	)	27.67		(0.1	)	25.46
Options forfeited or expired	—		—		—		—
Outstanding at December 31	0.6		31.54		0.8		30.86
Vested and expected to vest in the future as of December 31	0.6		$	31.54	0.8		$	30.86

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Earnings Per Share (Tables)

3 Months Ended

Dec. 31, 2017

Earnings Per Share

Reconciliation of the denominators for basic and diluted EPS

	Three Months Ended
	December 31, 2017	December 31, 2016
	(in millions)
Denominator for basic earnings per share	157.9	154.3
Potential common shares	3.9	3.7
Denominator for diluted earnings per share	161.8	158.0

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Other Financial Information (Tables)

3 Months Ended

Dec. 31, 2017

Other Financial Information

Schedule of accrued expenses and other current liabilities

	December 31, 2017		September 30, 2017
	(in millions)
Accrued salaries and benefits	$	900.8	$	1,018.5
Accrued contract costs	833.5		911.9
Other accrued expenses	337.9		315.1
	$	2,072.2	$	2,245.5

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Reclassifications out of Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Dec. 31, 2017

Reclassifications out of Accumulated Other Comprehensive Loss

Schedule of accumulated balances and reporting period activities related to reclassifications out of accumulated other comprehensive loss

The accumulated balances and reporting period activities for the three months ended December 31, 2017 and 2016 related to reclassifications out of accumulated other comprehensive loss are summarized as follows (in millions):

	Pension Related Adjustments			Foreign Currency Translation Adjustments			(Loss)/Gain on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2017	$	(281.9	)	$	(418.4	)	$	(0.4	)	$	(700.7	)
Other comprehensive (loss) income before reclassification	—			(6.8		)	0.5			(6.3		)
Amounts reclassified from accumulated other comprehensive income (loss)	2.5			—			0.3			2.8
Balances at December 31, 2017	$	(279.4	)	$	(425.2	)	$	0.4		$	(704.2	)

	Pension Related Adjustments			Foreign Currency Translation Adjustments			Loss on Derivative Instruments			Accumulated Other Comprehensive Loss
Balances at September 30, 2016	$	(368.9	)	$	(483.7	)	$	(5.0	)	$	(857.6	)
Other comprehensive (loss) income before reclassification	13.7			(73.5		)	0.7			(59.1		)
Amounts reclassified from accumulated other comprehensive loss	3.2			—			0.6			3.8
Balances at December 31, 2016	$	(352.0	)	$	(557.2	)	$	(3.7	)	$	(912.9	)

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Reportable Segments (Tables)

3 Months Ended

Dec. 31, 2017

Reportable Segments

Summarized financial information concerning the Company's reportable segments

Reportable Segments:	Design and Consulting Services			Construction Services			Management Services			AECOM Capital			Corporate			Total
	(in millions)
Three Months Ended December 31, 2017:
Revenue	$	1,941.9		$	2,125.5		$	843.4		$	—		$	—		$	4,910.8
Gross profit	77.8			27.1			31.3			—			—			136.2
Equity in earnings of joint ventures	7.5			13.4			8.8			—			—			29.7
General and administrative expenses	—			—			—			(2.6		)	(32.1		)	(34.7		)
Operating income	85.3			40.5			40.1			(2.6		)	(32.1		)	131.2
Gross profit as a % of revenue	4.0		%	1.3		%	3.7		%	—			—			2.8		%
Three Months Ended December 31, 2016:
Revenue	$	1,840.8		$	1,750.2		$	767.3		$	—		$	—		$	4,358.3
Gross profit	95.2			13.8			61.0			—			—			170.0
Equity in earnings of joint ventures	4.1			4.3			13.0			—			—			21.4
General and administrative expenses	—			—			—			(2.7		)	(29.9		)	(32.6		)
Acquisition and integration expenses	—			—			—			—			(15.4		)	(15.4		)
Operating income	99.3			18.1			74.0			(2.7		)	(45.3		)	143.4
Gross profit as a % of revenue	5.2		%	0.8		%	7.9		%	—			—			3.9		%
Reportable Segments:
Total assets
December 31, 2017	$	7,118.1		$	4,270.6		$	2,679.7		$	205.6		$	349.0		$	14,623.0
September 30, 2017	6,992.6			4,114.5			2,704.6			199.1			386.2			14,397.0

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Condensed Consolidating Financial Information (Tables)

3 Months Ended

Dec. 31, 2017

Condensed Consolidating Financial Information

Schedule of Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets

(unaudited — in millions)

December 31, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	4.1	$	213.2	$	595.9	$	—		$	813.2
Accounts receivable—net	—		2,283.7		3,030.0		—			5,313.7
Intercompany receivable	733.6		91.0		128.0		(952.6		)	—
Prepaid expenses and other current assets	91.2		305.9		279.8		—			676.9
Income taxes receivable	11.0		—		27.2		—			38.2
TOTAL CURRENT ASSETS	839.9		2,893.8		4,060.9		(952.6		)	6,842.0
PROPERTY AND EQUIPMENT—NET	165.9		220.4		245.3		—			631.6
DEFERRED TAX ASSETS—NET	154.8		111.4		251.6		(301.0		)	216.8
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,775.5		2,756.7		—		(9,532.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	8.6		52.4		309.3		—			370.3
GOODWILL	—		3,318.6		2,678.4		—			5,997.0
INTANGIBLE ASSETS—NET	—		257.4		154.4		—			411.8
OTHER NON-CURRENT ASSETS	8.7		21.2		123.6		—			153.5
TOTAL ASSETS	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	2.4	$	—	$	—	$	—		$	2.4
Accounts payable	42.5		1,098.2		1,285.8		—			2,426.5
Accrued expenses and other current liabilities	76.5		955.8		1,039.9		—			2,072.2
Income taxes payable	—		—		18.2		—			18.2
Intercompany payable	93.8		761.7		170.0		(1,025.5		)	—
Billings in excess of costs on uncompleted contracts	2.9		355.2		637.8		—			995.9
Current portion of long-term debt	110.7		27.7		22.5		—			160.9
TOTAL CURRENT LIABILITIES	328.8		3,198.6		3,174.2		(1,025.5		)	5,676.1
OTHER LONG-TERM LIABILITIES	103.5		264.0		477.4		—			844.9
DEFERRED TAX LIABILITY—NET	—		—		333.3		(301.0		)	32.3
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		472.2		(472.3		)	—
LONG-TERM DEBT	3,422.0		276.9		40.0		—			3,738.9
TOTAL LIABILITIES	3,854.4		3,739.5		4,497.1		(1,798.8		)	10,292.2
TOTAL AECOM STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,100.0		(8,987.0		)	4,104.4
Noncontrolling interests	—		—		226.4		—			226.4
TOTAL STOCKHOLDERS’ EQUITY	4,099.0		5,892.4		3,326.4		(8,987.0		)	4,330.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,953.4	$	9,631.9	$	7,823.5	$	(10,785.8	)	$	14,623.0

Condensed Consolidating Balance Sheets

(in millions)

September 30, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	32.6	$	251.6	$	518.2	$	—		$	802.4
Accounts receivable—net	—		2,159.2		2,968.5		—			5,127.7
Intercompany receivable	723.6		90.9		181.4		(995.9		)	—
Prepaid expenses and other current assets	67.5		338.4		290.8		—			696.7
Income taxes receivable	4.3		—		51.1		—			55.4
TOTAL CURRENT ASSETS	828.0		2,840.1		4,010.0		(995.9		)	6,682.2
PROPERTY AND EQUIPMENT—NET	160.2		207.1		254.1		—			621.4
DEFERRED TAX ASSETS—NET	239.7		55.2		171.0		(294.6		)	171.3
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,606.2		2,865.0		—		(9,471.2		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	7.2		50.3		306.7		—			364.2
GOODWILL	—		3,318.6		2,674.3		—			5,992.9
INTANGIBLE ASSETS—NET	—		271.6		143.5		—			415.1
OTHER NON-CURRENT ASSETS	8.7		17.6		123.6		—			149.9
TOTAL ASSETS	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	1.1	$	—	$	0.1	$	—		$	1.2
Accounts payable	33.8		1,023.7		1,192.4		—			2,249.9
Accrued expenses and other current liabilities	92.2		1,112.9		1,040.4		—			2,245.5
Income taxes payable	—		—		38.2		—			38.2
Intercompany payable	149.2		787.5		161.4		(1,098.1		)	—
Billings in excess of costs on uncompleted contracts	3.4		313.1		586.3		—			902.8
Current portion of long-term debt	110.9		14.9		15.0		—			140.8
TOTAL CURRENT LIABILITIES	390.6		3,252.1		3,033.8		(1,098.1		)	5,578.4
OTHER LONG-TERM LIABILITIES	102.3		285.7		493.3		—			881.3
DEFERRED TAX LIABILITY—NET	—		—		315.1		(294.6		)	20.5
NOTE PAYABLE INTERCOMPANY—NON CURRENT	0.1		—		467.2		(467.3		)	—
LONG-TERM DEBT	3,366.9		281.6		53.6		—			3,702.1
TOTAL LIABILITIES	3,859.9		3,819.4		4,363.0		(1,860.0		)	10,182.3
TOTAL AECOM STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,101.6		(8,901.7		)	3,996.1
Noncontrolling interests	—		—		218.6		—			218.6
TOTAL STOCKHOLDERS’ EQUITY	3,990.1		5,806.1		3,320.2		(8,901.7		)	4,214.7
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,850.0	$	9,625.5	$	7,683.2	$	(10,761.7	)	$	14,397.0

Schedule of Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,433.2		$	2,489.6		$	(12.0	)	$	4,910.8
Cost of revenue	—			2,317.1			2,469.5			(12.0		)	4,774.6
Gross profit	—			116.1			20.1			—			136.2
Equity in earnings from subsidiaries	206.1			26.4			—			(232.5		)	—
Equity in earnings of joint ventures	—			12.3			17.4			—			29.7
General and administrative expenses	(32.1		)	—			(2.6		)	—			(34.7		)
Income from operations	174.0			154.8			34.9			(232.5		)	131.2
Other income	0.2			5.3			2.8			(6.0		)	2.3
Interest expense	(52.3		)	(4.7		)	(5.2		)	6.0			(56.2		)
Income before income tax expense (benefit)	121.9			155.4			32.5			(232.5		)	77.3
Income tax expense (benefit)	10.6			28.9			(86.6		)	—			(47.1		)
Net income	111.3			126.5			119.1			(232.5		)	124.4
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(13.1		)	—			(13.1		)
Net income attributable to AECOM	$	111.3		$	126.5		$	106.0		$	(232.5	)	$	111.3

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,281.5		$	2,090.1		$	(13.3	)	$	4,358.3
Cost of revenue	—			2,161.2			2,040.4			(13.3		)	4,188.3
Gross profit	—			120.3			49.7			—			170.0
Equity in earnings from subsidiaries	117.6			25.0			—			(142.6		)	—
Equity in earnings of joint ventures	—			9.9			11.5			—			21.4
General and administrative expenses	(29.9		)	—			(2.7		)	—			(32.6		)
Acquisition and integration expenses	(15.4		)	—			—			—			(15.4		)
Income from operations	72.3			155.2			58.5			(142.6		)	143.4
Other income	0.4			7.6			2.9			(10.1		)	0.8
Interest expense	(47.8		)	(5.7		)	(10.2		)	10.1			(53.6		)
Income before income tax (benefit) expense	24.9			157.1			51.2			(142.6		)	90.6
Income tax (benefit) expense	(22.3		)	35.9			11.2			—			24.8
Net income	47.2			121.2			40.0			(142.6		)	65.8
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(18.6		)	—			(18.6		)
Net income attributable to AECOM	$	47.2		$	121.2		$	21.4		$	(142.6	)	$	47.2

Schedule of Consolidating Statements of Comprehensive Income

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	111.3	$	126.5	$	119.1		$	(232.5	)	$	124.4
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	0.7		—		0.1			—			0.8
Foreign currency translation adjustments	—		—		(6.0		)	—			(6.0		)
Pension adjustments, net of tax	0.8		—		1.7			—			2.5
Other comprehensive income (loss), net of tax	1.5		—		(4.2		)	—			(2.7		)
Comprehensive income, net of tax	112.8		126.5		114.9			(232.5		)	121.7
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(13.9		)	—			(13.9		)
Comprehensive income attributable to AECOM, net of tax	$	112.8	$	126.5	$	101.0		$	(232.5	)	$	107.8

	For the three months ended December 31, 2016
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	47.2	$	121.2	$	40.0		$	(142.6	)	$	65.8
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	2.9		—		(1.5		)	—			1.4
Foreign currency translation adjustments	—		—		(73.9		)	—			(73.9		)
Pension adjustments, net of tax	0.6		—		16.3			—			16.9
Other comprehensive income (loss), net of tax	3.5		—		(59.1		)	—			(55.6		)
Comprehensive income (loss), net of tax	50.7		121.2		(19.1		)	(142.6		)	10.2
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—		—		(18.3		)	—			(18.3		)
Comprehensive income (loss) attributable to AECOM, net of tax	$	50.7	$	121.2	$	(37.4	)	$	(142.6	)	$	(8.1	)

Schedule on Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2017
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(64.4	)	$	4.8		$	112.0		$	—		$	52.4
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	—			—			2.2			—			2.2
Cash acquired from consolidation of joint venture	—			—			7.6			—			7.6
Net investment in unconsolidated joint ventures	—			(3.6		)	(15.4		)	—			(19.0		)
Proceeds from sale of investments	—			—			0.2			—			0.2
Payments for capital expenditures, net of disposals	3.4			(17.0		)	(4.9		)	—			(18.5		)
Net receipts from (investment in) intercompany notes	0.6			(5.1		)	28.8			(24.3		)	—
Other intercompany investing activities	(4.2		)	82.1			—			(77.9		)	—
Net cash (used in) provided by investing activities	(0.2		)	56.4			18.5			(102.2		)	(27.5		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,240.8			—			35.7			—			1,276.5
Repayments of borrowings under credit agreements	(1,187.4		)	(4.7		)	(44.1		)	—			(1,236.2		)
Proceeds from issuance of common stock	9.5			—			—			—			9.5
Proceeds from exercise of stock options	2.7			—			—			—			2.7
Payments to repurchase common stock	(26.7		)	—			—			—			(26.7		)
Net distributions to noncontrolling interests	—			—			(16.8		)	—			(16.8		)
Other financing activities	0.9			(36.8		)	9.9			—			(26.0		)
Net (repayments) borrowings on intercompany notes	(3.7		)	(25.1		)	4.5			24.3			—
Other intercompany financing activities	—			(33.0		)	(44.9		)	77.9			—
Net cash provided by (used in) financing activities	36.1			(99.6		)	(55.7		)	102.2			(17.0		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			2.9			—			2.9
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(28.5		)	(38.4		)	77.7			—			10.8
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	32.6			251.6			518.2			—			802.4
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	4.1		$	213.2		$	595.9		$	—		$	813.2

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)

	For the three months ended December 31, 2016
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES	$	(27.0	)	$	83.2		$	21.3		$	—		$	77.5
CASH FLOWS FROM INVESTING ACTIVITIES:
Net investment in unconsolidated joint ventures	—			(0.8		)	(17.3		)	—			(18.1		)
Proceeds from sale of investments	—			—			0.3			—			0.3
Payments for capital expenditures, net of disposals	(7.2		)	(9.7		)	(4.1		)	—			(21.0		)
Net investment in intercompany notes	(0.5		)	(8.7		)	(1.2		)	10.4			—
Other intercompany investing activities	32.1			14.4			—			(46.5		)	—
Net cash provided by (used in) investing activities	24.4			(4.8		)	(22.3		)	(36.1		)	(38.8		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,634.2			—			0.6			—			1,634.8
Repayments of borrowings under credit agreements	(1,595.2		)	(6.4		)	(5.8		)	—			(1,607.4		)
Proceeds from issuance of common stock	9.9			—			—			—			9.9
Proceeds from exercise of stock options	2.1			—			—			—			2.1
Payments to repurchase common stock	(17.5		)	—			—			—			(17.5		)
Net distributions to noncontrolling interests	—			—			(21.9		)	—			(21.9		)
Other financing activities	(10.7		)	(65.5		)	49.8			—			(26.4		)
Net borrowings on intercompany notes	—			1.1			9.3			(10.4		)	—
Other intercompany financing activities	—			(31.8		)	(14.7		)	46.5			—
Net cash provided by (used in) financing activities	22.8			(102.6		)	17.3			36.1			(26.4		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(6.7		)	—			(6.7		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	20.2			(24.2		)	9.6			—			5.6
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1.8			183.7			506.6			—			692.1
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	22.0		$	159.5		$	516.2		$	—		$	697.7

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Basis of Presentation (Details)	3 Months Ended
	Dec. 31, 2017
Minimum
Length of fiscal year	364 days
Maximum
Length of fiscal year	371 days

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Business Acquisitions, Goodwill and Intangible Assets - URS Acquisition (Details) $ in Millions		3 Months Ended		12 Months Ended
	Oct. 17, 2014 USD ($)	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($) item
Business acquisition
Number of acquisition | item		1		2
Total consideration		$ 5.6		$ 164.4
Amortization of intangible assets		23.7	$ 25.4
URS
Business acquisition
Ownership acquired (in percent)	100.00%
Total consideration	$ 2,300.0
Consideration paid by issuing stock	1,600.0
Senior notes assumed, net of Company repayments	400.0
Repayment of acquiree term loan as part of consideration	600.0
Repayment of acquiree line of credit as part of consideration	100.0
Accrued expenses and other current liabilities	240.0
Amortization of intangible assets of acquiree for the period		18.2	20.9
Fair value adjustment of joint ventures		1.9	2.0
Fair value adjustment of noncontrolling interests		(2.1)	(2.1)
Fair value of margin liability	$ 149.1
Carrying value margin fair value liability		7.5		$ 8.6
Margin liability recognition period ( in years)	2 years
Revenue and related income from operations related to margin fair value liability		$ 1.1	$ 1.6
URS | Customer relationships, contracts and backlog
Business acquisition
Acquired backlog and customer relationship assets	$ 973.8
URS | Customer relationships, contracts and backlog | Minimum
Business acquisition
Useful life (in years)	1 year
URS | Customer relationships, contracts and backlog | Maximum
Business acquisition
Useful life (in years)	11 years
URS | Customer relationships, contracts and backlog | Weighted Average
Business acquisition
Useful life (in years)	3 years

XML

Business Acquisitions, Goodwill and Intangible Assets - Expenses (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2016 USD ($)
Business Acquisitions, Goodwill and Intangible Assets
Severance and personnel costs	$ 11,500
Professional service, real estate-related, and other expenses	3,900
Total	15,412
Severance expense	$ 8,700

XML

Business Acquisitions, Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2017 USD ($)
Changes in the carrying value of goodwill by reporting segment
Goodwill at the beginning of the period	$ 5,992,881
Measurement Period Adjustments	(2,300)
Foreign Exchange Impact	6,400
Goodwill at the end of the period	5,997,000
Design and Consulting Services
Changes in the carrying value of goodwill by reporting segment
Goodwill at the beginning of the period	3,218,900
Foreign Exchange Impact	4,300
Goodwill at the end of the period	3,223,200
Construction Services
Changes in the carrying value of goodwill by reporting segment
Goodwill at the beginning of the period	1,049,900
Measurement Period Adjustments	(2,300)
Foreign Exchange Impact	(1,600)
Goodwill at the end of the period	1,046,000
Management Services
Changes in the carrying value of goodwill by reporting segment
Goodwill at the beginning of the period	1,724,100
Foreign Exchange Impact	3,700
Goodwill at the end of the period	$ 1,727,800

XML

Business Acquisitions, Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Identifiable intangible assets with finite useful lives
Gross Amount	$ 1,322,300	$ 1,301,900
Accumulated Amortization	(910,500)	(886,800)
Intangible Assets, Net	411,759	415,096
Backlog and customer relationships
Identifiable intangible assets with finite useful lives
Gross Amount	1,304,000	1,283,600
Accumulated Amortization	(893,700)	(870,200)
Intangible Assets, Net	$ 410,300	413,400
Backlog and customer relationships | Minimum
Identifiable intangible assets with finite useful lives
Amortization Period	1 year
Backlog and customer relationships | Maximum
Identifiable intangible assets with finite useful lives
Amortization Period	11 years
Trademark / tradename
Identifiable intangible assets with finite useful lives
Gross Amount	$ 18,300	18,300
Accumulated Amortization	(16,800)	(16,600)
Intangible Assets, Net	$ 1,500	$ 1,700
Trademark / tradename | Minimum
Identifiable intangible assets with finite useful lives
Amortization Period	3 months 18 days
Trademark / tradename | Maximum
Identifiable intangible assets with finite useful lives
Amortization Period	2 years

XML

Business Acquisitions, Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Business Acquisitions, Goodwill and Intangible Assets
Amortization expense	$ 23,700	$ 25,400
Estimated amortization expense for the remainder of fiscal 2018 and for the succeeding years
2018 (nine months remaining)	71,000
2019	87,800
2020	73,700
2021	62,800
2022	49,700
Thereafter	66,800
Intangible Assets, Net	$ 411,759		$ 415,096

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Accounts Receivable - Net (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Billed	$ 2,511,600	$ 2,317,800
Unbilled	2,254,500	2,293,500
Contract retentions	598,900	568,600
Total accounts receivable-gross	5,365,000	5,179,900
Allowance for doubtful accounts	(51,300)	(52,200)
Total accounts receivable-net	$ 5,313,672	$ 5,127,743
Additional disclosures
Unbilled receivables are expected to be billed and collected (in months)	12 months	12 months
Trade receivables sold, outstanding	$ 314,700	$ 325,200
Other than U.S government outstanding receivables
Additional disclosures
Number of Customers	0	0
Outstanding receivables (as a percent)	10.00%	10.00%

XML

Joint Ventures and Variable Interest Entities - Consolidated (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2017 USD ($) employee	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)
Financial Information
Minimum number of employees | employee	0
Current assets	$ 6,842,040		$ 6,682,222
TOTAL ASSETS	14,622,951		14,396,956
Current liabilities	5,676,057		5,578,379
TOTAL LIABILITIES	10,292,170		10,182,270
Total AECOM equity	4,104,369		3,996,126
Noncontrolling interests	226,412		218,560
TOTAL STOCKHOLDERS' EQUITY	4,330,781		4,214,686
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	14,622,951		14,396,956
Joint ventures summarized financial information
Revenue	4,910,832	$ 4,358,349
Consolidated Joint Ventures
Financial Information
Current assets	914,600		832,100
Non-current assets	203,300		188,800
TOTAL ASSETS	1,117,900		1,020,900
Current liabilities	647,800		524,900
Non-current liabilities	12,400		12,400
TOTAL LIABILITIES	660,200		537,300
Total AECOM equity	241,600		274,700
Noncontrolling interests	216,100		208,900
TOTAL STOCKHOLDERS' EQUITY	457,700		483,600
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,117,900		$ 1,020,900
Joint ventures summarized financial information
Revenue	$ 623,000	$ 456,900

XML

Joint Ventures and Variable Interest Entities - Unconsolidated (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Financial Information
Current assets	$ 6,842,040		$ 6,682,222
TOTAL ASSETS	14,622,951		14,396,956
Current liabilities	5,676,057		5,578,379
TOTAL LIABILITIES	10,292,170		10,182,270
Total AECOM equity	4,104,369		3,996,126
Noncontrolling interests	226,412		218,560
TOTAL STOCKHOLDERS' EQUITY	4,330,781		4,214,686
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	14,622,951		14,396,956
AECOM's investment in joint ventures	370,294		364,223
Joint ventures summarized financial information
Revenue	4,910,832	$ 4,358,349
Cost of revenue	4,774,680	4,188,376
Gross profit	136,152	169,973
Net income	124,413	65,778
Unconsolidated Joint Ventures
Financial Information
Current assets	2,069,600		1,912,200
Non-current assets	787,500		749,800
TOTAL ASSETS	2,857,100		2,662,000
Current liabilities	1,726,400		1,570,200
Non-current liabilities	177,000		185,100
TOTAL LIABILITIES	1,903,400		1,755,300
TOTAL STOCKHOLDERS' EQUITY	953,700		906,700
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	2,857,100		2,662,000
AECOM's investment in joint ventures	370,300		$ 364,200
Joint ventures summarized financial information
Revenue	1,478,600	1,142,000
Cost of revenue	1,395,200	1,085,800
Gross profit	83,400	56,200
Net income	$ 82,100	$ 54,300

XML

Joint Ventures and Variable Interest Entities - Equity in Earnings (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Financial Information
Equity in earnings of joint ventures	$ 29,720	$ 21,471
Unconsolidated Joint Ventures | Pass through joint ventures
Financial Information
Equity in earnings of joint ventures	13,200	7,500
Unconsolidated Joint Ventures | Other Joint Ventures
Financial Information
Equity in earnings of joint ventures	$ 16,500	$ 13,900

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Pension Benefit Obligations (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
United States Pension Plan of US Entity, Defined Benefit
Components of net periodic (benefit) cost:
Service costs	$ 1.2	$ 1.1
Interest cost on projected benefit obligation	5.2	4.8
Expected return on plan assets	(7.9)	(7.8)
Amortization of net loss	1.0	1.1
Net periodic (benefit) cost	(0.5)	(0.8)
Change in benefit obligation:
Employer contributions	2.5
Expected remaining scheduled annual employer contributions for the current fiscal year	10.2
Foreign Pension Plan, Defined Benefit
Components of net periodic (benefit) cost:
Service costs	0.3	0.3
Interest cost on projected benefit obligation	7.9	7.0
Expected return on plan assets	(10.7)	(10.2)
Amortization of prior service cost		(0.1)
Amortization of net loss	2.0	3.2
Settlement loss recognized	0.1
Net periodic (benefit) cost	(0.4)	$ 0.2
Change in benefit obligation:
Employer contributions	6.8
Expected remaining scheduled annual employer contributions for the current fiscal year	$ 19.9

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Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Oct. 17, 2014
Debt
Total debt	$ 3,951,700	$ 3,896,400
Less: Current portion of debt and short-term borrowings	(163,300)	(142,000)
Less: Unamortized debt issuance costs	(49,500)	(52,300)
Long-term debt	3,738,901	3,702,109
2014 Credit Agreement
Debt
Total debt	962,300	908,700
2014 Senior Notes
Debt
Total debt	1,600,000	1,600,000
2017 Senior Notes
Debt
Total debt	1,000,000	1,000,000
URS Senior Notes
Debt
Total debt	247,800	247,700	$ 1,000,000
Other Debt
Debt
Total debt	$ 141,600	$ 140,000

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Debt - Scheduled Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Scheduled maturities of debt:
2018 (nine months remaining)	$ 109.7
2019	152.2
2020	123.0
2021	686.9
2022	258.2
Thereafter	2,621.7
Total debt	$ 3,951.7	$ 3,896.4

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Debt - 2014 Credit Agreement (Details) $ in Millions			3 Months Ended	6 Months Ended
	Sep. 29, 2016 USD ($)	Oct. 17, 2014 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2017	Sep. 30, 2017 USD ($)
Secured letter of credit outside credit agreement
Debt agreements
Borrowing capacity	$ 500.0
2014 Credit Agreement
Debt agreements
Increase in borrowing capacity		$ 500.0
Maximum consolidated leverage ratio covenant	5.00			4.75
Consolidated leverage ratio			4.0
Consolidated interest coverage ratio			4.7
2014 Credit Agreement | Term loan A
Debt agreements
Borrowing capacity		1,925.0
Increase in borrowing capacity	$ 185.0
2014 Credit Agreement | Term loan B
Debt agreements
Borrowing capacity		760.0
2014 Credit Agreement | Revolving credit facility
Debt agreements
Borrowing capacity		$ 1,050.0
Outstanding letters of credit			$ 54.8		$ 58.1
Remaining borrowing capacity under credit facility			$ 915.2		$ 991.9

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Debt - 2014 Senior Notes (Details) - 2014 Senior Notes - USD ($)	Oct. 06, 2014	Dec. 31, 2017
The 2022 Notes
Debt
Principal amount	$ 800,000,000
Interest rate (as a percent)	5.75%
Fair value of debt instrument		$ 834,000,000
The 2024 Notes
Debt
Principal amount	$ 800,000,000
Interest rate (as a percent)	5.875%
Fair value of debt instrument		$ 866,000,000
The 2024 Notes | Prior to July 15 2024
Debt
Redemption price equal to principal amount (in percent)	100.00%
The 2024 Notes | On or after July 15, 2024
Debt
Redemption price equal to principal amount (in percent)	100.00%

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Debt - 2017 Senior Notes (Details) - USD ($)	Feb. 21, 2017	Dec. 31, 2017
Term loan A
Debt
Amount of debt redeemed	$ 600,000,000
Term loan B
Debt
Amount of debt redeemed	127,600,000
Revolving credit facility
Debt
Amount of debt redeemed	250,000,000
2017 Senior Notes
Debt
Principal amount	$ 1,000,000,000
Interest rate (as a percent)	5.125%
Fair value of debt instrument		$ 1,017,500,000
2017 Senior Notes | Prior to December 15, 2026
Debt
Redemption price equal to principal amount (in percent)	100.00%
2017 Senior Notes | Prior to March 15, 2020
Debt
Maximum principal amount that can be redeemed using proceeds from equity offerings(in percent)	35.00%
Redemption price equal to principal using proceeds from equity offerings (in percent)	105.125%
2017 Senior Notes | On or after December 15, 2026
Debt
Redemption price equal to principal amount (in percent)	100.00%

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Debt - URS Senior Notes (Details) - USD ($) $ in Millions	Oct. 24, 2014	Dec. 31, 2017	Sep. 30, 2017	Apr. 03, 2017	Oct. 17, 2014
Debt
Debt		$ 3,951.7	$ 3,896.4
URS Senior Notes
Debt
Debt		247.8	$ 247.7		$ 1,000.0
URS Senior Notes | 2017 URS Senor Notes
Debt
Interest rate (as a percent)					3.85%
Redemption price equal to principal using proceeds from equity offerings (in percent)	101.00%
Amount of debt redeemed	$ 572.3			$ 179.2
URS Senior Notes | 2022 URS Senior Notes
Debt
Interest rate (as a percent)					5.00%
Fair value of debt instrument		258.5
Debt		$ 247.8

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Debt - Other Debt (Details) - Other Debt - Standby letter of credit - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Debt
Outstanding letters of credit	$ 460.9	$ 445.7
Remaining borrowing capacity under credit facility	$ 489.4

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Debt - Effective Interest Rate (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt
Effective interest rate including effects of interest rate swap agreements	4.8%	4.2%
Amortization of deferred debt issuance costs	$ 2.9	$ 2.8

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Derivative Financial Instruments and Fair Value Measurements - Cash Flow Hedges (Details) - Designated as Hedging Instrument - Cash Flow Hedging AUD in Millions, $ in Millions	Dec. 31, 2017 AUD	Dec. 31, 2017 USD ($)	Sep. 30, 2017 AUD	Sep. 30, 2017 USD ($)
Interest Rate Swap June 2018
Derivative financial instruments
Notional Amount		$ 300.0		$ 300.0
Fixed Rate (as a percent)	1.63%	1.63%	1.63%	1.63%
Interest Rate Swap September 2018
Derivative financial instruments
Notional Amount		$ 300.0		$ 300.0
Fixed Rate (as a percent)	1.54%	1.54%	1.54%	1.54%
Foreign currency contracts
Derivative financial instruments
Notional principal of derivative exchange contracts	AUD 13.2	$ 9.9	AUD 15.1	$ 11.3

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Derivative Financial Instruments and Fair Value Measurements - Fair Value Measurements (Details) - USD ($)	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Level 3
Derivative financial instruments
Fair value of contingent consideration liability	$ 12,000,000	$ 13,000,000
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swap agreements
Derivative financial instruments
Losses Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing and Ineffective Portion)	$ 0

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Share-based Payments (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Stock options, Weighted average exercise price
Recognized compensation expense	$ 16.5	$ 21.3
Vesting period	3 years
Unrecognized compensation expense	$ 148.5		$ 96.8
Employee Stock Option
Shares of stock under options
Balance at the beginning of the period (in shares)	0.7	0.9
Options exercised (in shares)	(0.1)	(0.1)
Balance at the end of the period (in shares)	0.6	0.8
Vested and expected to vest in the future at the end of the period (in shares)	0.6	0.8
Stock options, Weighted average exercise price
Balance at the beginning of the period (in dollars per share)	$ 31.11	$ 30.36
Options exercised (in dollars per share)	27.67	25.46
Balance at the end of the period (in dollars per share)	31.54	30.86
Vested and expected to vest in the future at the end of the period (in dollars per share)	$ 31.54	30.86
Performance Earnings Program
Stock options, Weighted average exercise price
Vesting period	3 years
Weighted average grant-date fair value of stock options granted (in dollars per share)	$ 37.90	38.16
Restricted Stock Units (RSUs)
Stock options, Weighted average exercise price
Weighted average grant-date fair value of stock options granted (in dollars per share)	$ 36.93	$ 38.08

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Income Taxes
Federal statutory rate (as a percent)			21.00%		35.00%
Blended statutory rate (as a percentage)				24.50%
Effective tax rate (as a percent)	(60.90%)	27.40%
Net benefit from Tax Cuts and Jobs Acts of 2017	$ 41.7
Benefit from change in uncertain tax positions in US and Canada	11.2
Benefit from income tax credits and incentives	8.4
Provisional amount related to remeasurement of deferred tax balance	36.1
Provisional amount of tax benefit related to releasing of deferred tax liability	77.0
Provisional amount of income tax expense related to transition tax on foreign subsidiaries	71.4
Decrease in liability for uncertain tax positions	$ (15.0)
Gross book-tax differences from non-U.S. subsidiaries					$ 1,700.0

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Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Earnings Per Share
Denominator for basic earnings per share (in shares)	157,909	154,255
Potential common shares (in shares)	3,900	3,700
Denominator for diluted earnings per share (in shares)	161,847	157,993

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Other Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Accrued expenses and other current liabilities
Accrued salaries and benefits	$ 900,800	$ 1,018,500
Accrued contract costs	833,500	911,900
Other accrued expenses	337,900	315,100
Total accrued expenses	2,072,155	2,245,519
Restructuring charges	22,400
Payments for restructuring charges	9,600
Accounts receivable-net	5,313,672	5,127,743
Accelerated recovery of pension entitlement
Accrued expenses and other current liabilities
Accounts receivable-net	50,000
Professional liability accrual
Accrued expenses and other current liabilities
Accrued contract costs	$ 537,700	$ 547,900

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Reclassifications out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accumulated balances
Balance at the beginning of the period	$ (700,661)	$ (857,600)
Other comprehensive (loss) income before reclassification	(6,300)	(59,100)
Amounts reclassified from accumulated other comprehensive income (loss)	2,800	3,800
Balance at the end of the period	(704,184)	(912,900)
Pension Related Adjustments
Accumulated balances
Balance at the beginning of the period	(281,900)	(368,900)
Other comprehensive (loss) income before reclassification		13,700
Amounts reclassified from accumulated other comprehensive income (loss)	2,500	3,200
Balance at the end of the period	(279,400)	(352,000)
Foreign Currency Translation Adjustments
Accumulated balances
Balance at the beginning of the period	(418,400)	(483,700)
Other comprehensive (loss) income before reclassification	(6,800)	(73,500)
Balance at the end of the period	(425,200)	(557,200)
(Loss)/Gain on Derivative Instruments
Accumulated balances
Balance at the beginning of the period	(400)	(5,000)
Other comprehensive (loss) income before reclassification	500	700
Amounts reclassified from accumulated other comprehensive income (loss)	300	600
Balance at the end of the period	$ 400	$ (3,700)

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Commitments and Contingencies (Details) - USD ($)			1 Months Ended
	Jul. 03, 2017	Apr. 05, 2017	Sep. 30, 2017	Dec. 31, 2014	Dec. 31, 2017
URS | Design build contractor
Commitments and Contingencies
Damages claimed, value	$ 70,000,000	$ 8,200,000
Standby letter of credit
Commitments and Contingencies
Contingency liability			$ 503,800,000		$ 515,700,000
Surety Bond
Commitments and Contingencies
Surety bonds issued			5,700,000,000		5,700,000,000
AECOM USA, Inc. | Minimum
Commitments and Contingencies
Damages claimed, value			$ 100,000
DOE Deactivation, Demolition, And Removal Project | Department of Energy | Maximum
Commitments and Contingencies
Cost-reimbursement at risk					106,000,000
DOE Deactivation, Demolition, And Removal Project | WGI Ohio and DOE | Minimum
Commitments and Contingencies
Cost-reimbursement at risk					106,000,000
DOE Deactivation, Demolition, And Removal Project | WGI Ohio and DOE | Maximum
Commitments and Contingencies
Cost-reimbursement at risk					146,000,000
DOE Deactivation, Demolition, And Removal Project | WGI Ohio
Commitments and Contingencies
Claim to DOE, including additional fees				$ 103,000,000
Possible costs which may exceed contracted amounts				$ 100,000,000
DOE Deactivation, Demolition, And Removal Project | WGI Ohio | Minimum
Commitments and Contingencies
Cost-reimbursement at risk					$ 146,000,000

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Reportable Segments (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)
Summarized financial information concerning the Company's reportable segments
Number of reportable segments | segment	4
Revenue	$ 4,910,832	$ 4,358,349
Gross profit	136,152	169,973
Equity in earnings of joint ventures	29,720	21,471
General and administrative expenses	(34,670)	(32,639)
Acquisition and integration expenses		(15,412)
Operating income	$ 131,202	$ 143,393
Gross profit as a % of revenue	2.80%	3.90%
Total Assets	$ 14,622,951		$ 14,396,956
Corporate
Summarized financial information concerning the Company's reportable segments
General and administrative expenses	(32,100)	$ (29,900)
Acquisition and integration expenses		(15,400)
Operating income	(32,100)	(45,300)
Total Assets	349,000		386,200
Design and Consulting Services
Summarized financial information concerning the Company's reportable segments
Revenue	1,941,900	1,840,800
Gross profit	77,800	95,200
Equity in earnings of joint ventures	7,500	4,100
Operating income	$ 85,300	$ 99,300
Gross profit as a % of revenue	4.00%	5.20%
Total Assets	$ 7,118,100		6,992,600
Construction Services
Summarized financial information concerning the Company's reportable segments
Revenue	2,125,500	$ 1,750,200
Gross profit	27,100	13,800
Equity in earnings of joint ventures	13,400	4,300
Operating income	$ 40,500	$ 18,100
Gross profit as a % of revenue	1.30%	0.80%
Total Assets	$ 4,270,600		4,114,500
Management Services
Summarized financial information concerning the Company's reportable segments
Revenue	843,400	$ 767,300
Gross profit	31,300	61,000
Equity in earnings of joint ventures	8,800	13,000
Operating income	$ 40,100	$ 74,000
Gross profit as a % of revenue	3.70%	7.90%
Total Assets	$ 2,679,700		2,704,600
AECOM Capital
Summarized financial information concerning the Company's reportable segments
General and administrative expenses	(2,600)	$ (2,700)
Operating income	(2,600)	$ (2,700)
Total Assets	$ 205,600		$ 199,100

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Condensed Consolidating Financial Information - Debt (Details)	3 Months Ended
	Dec. 31, 2017
Condensed Consolidating Financial Information
Ownership of directly and indirectly owned subsidiaries (as a percent)	100.00%

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Condensed Consolidating Financial Information - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
CURRENT ASSETS:
Total cash and cash equivalents	$ 813,166	$ 802,362	$ 697,717	$ 692,145
Accounts receivable-net	5,313,672	5,127,743
Prepaid expenses and other current assets	676,951	696,718
Income taxes receivable	38,251	55,399
TOTAL CURRENT ASSETS	6,842,040	6,682,222
PROPERTY AND EQUIPMENT-NET	631,601	621,357
DEFERRED TAX ASSETS-NET	216,742	171,331
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	370,294	364,223
GOODWILL	5,997,000	5,992,881
INTANGIBLE ASSETS-NET	411,759	415,096
OTHER NON-CURRENT ASSETS	153,515	149,846
TOTAL ASSETS	14,622,951	14,396,956
CURRENT LIABILITIES:
Short-term debt	2,361	1,221
Accounts payable	2,426,469	2,249,872
Accrued expenses and other current liabilities	2,072,155	2,245,519
Income taxes payable	18,244	38,176
Billings in excess of costs on uncompleted contracts	995,914	902,812
Current portion of long-term debt	160,914	140,779
TOTAL CURRENT LIABILITIES	5,676,057	5,578,379
OTHER LONG-TERM LIABILITIES	844,900	881,300
DEFERRED TAX LIABILITY-NET	32,327	20,515
LONG-TERM DEBT	3,738,901	3,702,109
TOTAL LIABILITIES	10,292,170	10,182,270
TOTAL AECOM STOCKHOLDERS' EQUITY	4,104,369	3,996,126
Noncontrolling interests	226,412	218,560
TOTAL STOCKHOLDERS' EQUITY	4,330,781	4,214,686
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	14,622,951	14,396,956
Reportable Legal Entities | Parent
CURRENT ASSETS:
Total cash and cash equivalents	4,100	32,600	22,000	1,800
Intercompany receivable	733,600	723,600
Prepaid expenses and other current assets	91,200	67,500
Income taxes receivable	11,000	4,300
TOTAL CURRENT ASSETS	839,900	828,000
PROPERTY AND EQUIPMENT-NET	165,900	160,200
DEFERRED TAX ASSETS-NET	154,800	239,700
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,775,500	6,606,200
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	8,600	7,200
OTHER NON-CURRENT ASSETS	8,700	8,700
TOTAL ASSETS	7,953,400	7,850,000
CURRENT LIABILITIES:
Short-term debt	2,400	1,100
Accounts payable	42,500	33,800
Accrued expenses and other current liabilities	76,500	92,200
Intercompany payable	93,800	149,200
Billings in excess of costs on uncompleted contracts	2,900	3,400
Current portion of long-term debt	110,700	110,900
TOTAL CURRENT LIABILITIES	328,800	390,600
OTHER LONG-TERM LIABILITIES	103,500	102,300
NOTE PAYABLE INTERCOMPANY-NON CURRENT	100	100
LONG-TERM DEBT	3,422,000	3,366,900
TOTAL LIABILITIES	3,854,400	3,859,900
TOTAL AECOM STOCKHOLDERS' EQUITY	4,099,000	3,990,100
TOTAL STOCKHOLDERS' EQUITY	4,099,000	3,990,100
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	7,953,400	7,850,000
Reportable Legal Entities | Guarantor Subsidiaries
CURRENT ASSETS:
Total cash and cash equivalents	213,200	251,600	159,500	183,700
Accounts receivable-net	2,283,700	2,159,200
Intercompany receivable	91,000	90,900
Prepaid expenses and other current assets	305,900	338,400
TOTAL CURRENT ASSETS	2,893,800	2,840,100
PROPERTY AND EQUIPMENT-NET	220,400	207,100
DEFERRED TAX ASSETS-NET	111,400	55,200
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	2,756,700	2,865,000
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	52,400	50,300
GOODWILL	3,318,600	3,318,600
INTANGIBLE ASSETS-NET	257,400	271,600
OTHER NON-CURRENT ASSETS	21,200	17,600
TOTAL ASSETS	9,631,900	9,625,500
CURRENT LIABILITIES:
Accounts payable	1,098,200	1,023,700
Accrued expenses and other current liabilities	955,800	1,112,900
Intercompany payable	761,700	787,500
Billings in excess of costs on uncompleted contracts	355,200	313,100
Current portion of long-term debt	27,700	14,900
TOTAL CURRENT LIABILITIES	3,198,600	3,252,100
OTHER LONG-TERM LIABILITIES	264,000	285,700
LONG-TERM DEBT	276,900	281,600
TOTAL LIABILITIES	3,739,500	3,819,400
TOTAL AECOM STOCKHOLDERS' EQUITY	5,892,400	5,806,100
TOTAL STOCKHOLDERS' EQUITY	5,892,400	5,806,100
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	9,631,900	9,625,500
Reportable Legal Entities | Non-Guarantor Subsidiaries
CURRENT ASSETS:
Total cash and cash equivalents	595,900	518,200	$ 516,200	$ 506,600
Accounts receivable-net	3,030,000	2,968,500
Intercompany receivable	128,000	181,400
Prepaid expenses and other current assets	279,800	290,800
Income taxes receivable	27,200	51,100
TOTAL CURRENT ASSETS	4,060,900	4,010,000
PROPERTY AND EQUIPMENT-NET	245,300	254,100
DEFERRED TAX ASSETS-NET	251,600	171,000
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	309,300	306,700
GOODWILL	2,678,400	2,674,300
INTANGIBLE ASSETS-NET	154,400	143,500
OTHER NON-CURRENT ASSETS	123,600	123,600
TOTAL ASSETS	7,823,500	7,683,200
CURRENT LIABILITIES:
Short-term debt		100
Accounts payable	1,285,800	1,192,400
Accrued expenses and other current liabilities	1,039,900	1,040,400
Income taxes payable	18,200	38,200
Intercompany payable	170,000	161,400
Billings in excess of costs on uncompleted contracts	637,800	586,300
Current portion of long-term debt	22,500	15,000
TOTAL CURRENT LIABILITIES	3,174,200	3,033,800
OTHER LONG-TERM LIABILITIES	477,400	493,300
DEFERRED TAX LIABILITY-NET	333,300	315,100
NOTE PAYABLE INTERCOMPANY-NON CURRENT	472,200	467,200
LONG-TERM DEBT	40,000	53,600
TOTAL LIABILITIES	4,497,100	4,363,000
TOTAL AECOM STOCKHOLDERS' EQUITY	3,100,000	3,101,600
Noncontrolling interests	226,400	218,600
TOTAL STOCKHOLDERS' EQUITY	3,326,400	3,320,200
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	7,823,500	7,683,200
Eliminations
CURRENT ASSETS:
Intercompany receivable	(952,600)	(995,900)
TOTAL CURRENT ASSETS	(952,600)	(995,900)
DEFERRED TAX ASSETS-NET	(301,000)	(294,600)
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	(9,532,200)	(9,471,200)
TOTAL ASSETS	(10,785,800)	(10,761,700)
CURRENT LIABILITIES:
Intercompany payable	(1,025,500)	(1,098,100)
TOTAL CURRENT LIABILITIES	(1,025,500)	(1,098,100)
DEFERRED TAX LIABILITY-NET	(301,000)	(294,600)
NOTE PAYABLE INTERCOMPANY-NON CURRENT	(472,300)	(467,300)
TOTAL LIABILITIES	(1,798,800)	(1,860,000)
TOTAL AECOM STOCKHOLDERS' EQUITY	(8,987,000)	(8,901,700)
TOTAL STOCKHOLDERS' EQUITY	(8,987,000)	(8,901,700)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ (10,785,800)	$ (10,761,700)

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Condensed Consolidating Financial Information - Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Condensed Consolidating Statements of Operations
Revenue	$ 4,910,832	$ 4,358,349
Cost of revenue	4,774,680	4,188,376
Gross profit	136,152	169,973
Equity in earnings of joint ventures	29,720	21,471
General and administrative expenses	(34,670)	(32,639)
Acquisition and integration expenses		(15,412)
Income from operations	131,202	143,393
Other income	2,283	860
Interest expense	(56,165)	(53,637)
Income before income tax (benefit) expense	77,320	90,616
Income tax (benefit) expense	(47,093)	24,838
Net income	124,413	65,778
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13,099)	(18,599)
Net income attributable to AECOM	111,314	47,179
Reportable Legal Entities | Parent
Condensed Consolidating Statements of Operations
Equity in earnings from subsidiaries	206,100	117,600
General and administrative expenses	(32,100)	(29,900)
Acquisition and integration expenses		(15,400)
Income from operations	174,000	72,300
Other income	200	400
Interest expense	(52,300)	(47,800)
Income before income tax (benefit) expense	121,900	24,900
Income tax (benefit) expense	10,600	(22,300)
Net income	111,300	47,200
Net income attributable to AECOM	111,300	47,200
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statements of Operations
Revenue	2,433,200	2,281,500
Cost of revenue	2,317,100	2,161,200
Gross profit	116,100	120,300
Equity in earnings from subsidiaries	26,400	25,000
Equity in earnings of joint ventures	12,300	9,900
Income from operations	154,800	155,200
Other income	5,300	7,600
Interest expense	(4,700)	(5,700)
Income before income tax (benefit) expense	155,400	157,100
Income tax (benefit) expense	28,900	35,900
Net income	126,500	121,200
Net income attributable to AECOM	126,500	121,200
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statements of Operations
Revenue	2,489,600	2,090,100
Cost of revenue	2,469,500	2,040,400
Gross profit	20,100	49,700
Equity in earnings of joint ventures	17,400	11,500
General and administrative expenses	(2,600)	(2,700)
Income from operations	34,900	58,500
Other income	2,800	2,900
Interest expense	(5,200)	(10,200)
Income before income tax (benefit) expense	32,500	51,200
Income tax (benefit) expense	(86,600)	11,200
Net income	119,100	40,000
Noncontrolling interests in income of consolidated subsidiaries, net of tax	(13,100)	(18,600)
Net income attributable to AECOM	106,000	21,400
Eliminations
Condensed Consolidating Statements of Operations
Revenue	(12,000)	(13,300)
Cost of revenue	(12,000)	(13,300)
Equity in earnings from subsidiaries	(232,500)	(142,600)
Income from operations	(232,500)	(142,600)
Other income	(6,000)	(10,100)
Interest expense	6,000	10,100
Income before income tax (benefit) expense	(232,500)	(142,600)
Net income	(232,500)	(142,600)
Net income attributable to AECOM	$ (232,500)	$ (142,600)

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Condensed Consolidating Financial Information - Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 124,413	$ 65,778
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	785	1,367
Foreign currency translation adjustments	(5,983)	(73,924)
Pension adjustments, net of tax	2,468	16,973
Other comprehensive loss, net of tax	(2,730)	(55,584)
Comprehensive income, net of tax	121,683	10,194
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	(13,892)	(18,291)
Comprehensive income (loss) attributable to AECOM, net of tax	107,791	(8,097)
Reportable Legal Entities | Parent
Consolidated Statements of Comprehensive Income (Loss)
Net income	111,300	47,200
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	700	2,900
Pension adjustments, net of tax	800	600
Other comprehensive loss, net of tax	1,500	3,500
Comprehensive income, net of tax	112,800	50,700
Comprehensive income (loss) attributable to AECOM, net of tax	112,800	50,700
Reportable Legal Entities | Guarantor Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
Net income	126,500	121,200
Other comprehensive income (loss), net of tax:
Comprehensive income, net of tax	126,500	121,200
Comprehensive income (loss) attributable to AECOM, net of tax	126,500	121,200
Reportable Legal Entities | Non-Guarantor Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
Net income	119,100	40,000
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax	100	(1,500)
Foreign currency translation adjustments	(6,000)	(73,900)
Pension adjustments, net of tax	1,700	16,300
Other comprehensive loss, net of tax	(4,200)	(59,100)
Comprehensive income, net of tax	114,900	(19,100)
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	(13,900)	(18,300)
Comprehensive income (loss) attributable to AECOM, net of tax	101,000	(37,400)
Eliminations
Consolidated Statements of Comprehensive Income (Loss)
Net income	(232,500)	(142,600)
Other comprehensive income (loss), net of tax:
Comprehensive income, net of tax	(232,500)	(142,600)
Comprehensive income (loss) attributable to AECOM, net of tax	$ (232,500)	$ (142,600)

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Condensed Consolidating Financial Information - Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Condensed Consolidating Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES	$ 52,428	$ 77,507
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	2,206
Cash acquired from consolidation of joint venture	7,630
Net investment in unconsolidated joint ventures	(19,000)	(18,100)
Proceeds from sale of investments	161	300
Payments for capital expenditures, net of disposals	(18,500)	(21,000)
Net cash used in investing activities	(27,502)	(38,860)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,276,451	1,634,781
Repayments of borrowings under credit agreements	(1,236,242)	(1,607,380)
Proceeds from issuance of common stock	9,530	9,875
Proceeds from exercise of stock options	2,715	2,067
Payments to repurchase common stock	(26,701)	(17,494)
Net distributions to noncontrolling interests	(16,795)	(21,938)
Other financing activities	(25,962)	(26,280)
Net cash used in financing activities	(17,004)	(26,369)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	2,882	(6,706)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	10,804	5,572
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	802,362	692,145
CASH AND CASH EQUIVALENTS AT END OF PERIOD	813,166	697,717
Reportable Legal Entities | Parent
Condensed Consolidating Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES	(64,400)	(27,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures, net of disposals	3,400	(7,200)
Net receipts from (investment in) intercompany notes	600	(500)
Other intercompany investing activities	(4,200)	32,100
Net cash used in investing activities	(200)	24,400
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,240,800	1,634,200
Repayments of borrowings under credit agreements	(1,187,400)	(1,595,200)
Proceeds from issuance of common stock	9,500	9,900
Proceeds from exercise of stock options	2,700	2,100
Payments to repurchase common stock	(26,700)	(17,500)
Other financing activities	900	(10,700)
Net (repayments) borrowings on intercompany notes	(3,700)
Net cash used in financing activities	36,100	22,800
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(28,500)	20,200
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	32,600	1,800
CASH AND CASH EQUIVALENTS AT END OF PERIOD	4,100	22,000
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES	4,800	83,200
CASH FLOWS FROM INVESTING ACTIVITIES:
Net investment in unconsolidated joint ventures	(3,600)	(800)
Payments for capital expenditures, net of disposals	(17,000)	(9,700)
Net receipts from (investment in) intercompany notes	(5,100)	(8,700)
Other intercompany investing activities	82,100	14,400
Net cash used in investing activities	56,400	(4,800)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings under credit agreements	(4,700)	(6,400)
Other financing activities	(36,800)	(65,500)
Net (repayments) borrowings on intercompany notes	(25,100)	1,100
Other intercompany financing activities	(33,000)	(31,800)
Net cash used in financing activities	(99,600)	(102,600)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(38,400)	(24,200)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	251,600	183,700
CASH AND CASH EQUIVALENTS AT END OF PERIOD	213,200	159,500
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES	112,000	21,300
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from purchase price adjustment to business acquisition	2,200
Cash acquired from consolidation of joint venture	7,600
Net investment in unconsolidated joint ventures	(15,400)	(17,300)
Proceeds from sale of investments	200	300
Payments for capital expenditures, net of disposals	(4,900)	(4,100)
Net receipts from (investment in) intercompany notes	28,800	(1,200)
Net cash used in investing activities	18,500	(22,300)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	35,700	600
Repayments of borrowings under credit agreements	(44,100)	(5,800)
Net distributions to noncontrolling interests	(16,800)	(21,900)
Other financing activities	9,900	49,800
Net (repayments) borrowings on intercompany notes	4,500	9,300
Other intercompany financing activities	(44,900)	(14,700)
Net cash used in financing activities	(55,700)	17,300
EFFECT OF EXCHANGE RATE CHANGES ON CASH	2,900	(6,700)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	77,700	9,600
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	518,200	506,600
CASH AND CASH EQUIVALENTS AT END OF PERIOD	595,900	516,200
Eliminations
CASH FLOWS FROM INVESTING ACTIVITIES:
Net receipts from (investment in) intercompany notes	(24,300)	10,400
Other intercompany investing activities	(77,900)	(46,500)
Net cash used in investing activities	(102,200)	(36,100)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings on intercompany notes	24,300	(10,400)
Other intercompany financing activities	77,900	46,500
Net cash used in financing activities	$ 102,200	$ 36,100