AECOM 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, operations and strategy, 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 future impacts caused by the Covid-19 coronavirus pandemic and the related economic instability and market volatility, including the reaction of governments to the coronavirus, including any prolonged period of travel, commercial or other similar restrictions, the delay in commencement, or temporary or permanent halting of construction, infrastructure or other projects, requirements that we remove our employees or personnel from the field for their protection, and delays or reductions in planned initiatives by our governmental or commercial clients or potential clients; future revenues, expenditures and business trends; future reduction of our self-perform at-risk construction exposure; future accounting estimates; future contractual performance obligations; future conversions of backlog; future capital allocation priorities including common stock repurchases, future trade receivables, future debt pay downs; future post-retirement expenses; future tax benefits and expenses , and the impacts of future tax legislation; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; future costs savings; 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, our business is cyclical and vulnerable to economic downturns and client spending reductions; government shutdowns; 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; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; high leverage and potential inability to service our debt and guarantees; exposure to Brexit and tariffs; exposure to political and economic risks in different countries; currency exchange rate fluctuations; retaining and recruiting key technical and management personnel; legal claims; inadequate insurance coverage; environmental law compliance and inadequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs;AECOM Capital's real estate development; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the Management Services transaction, including the risk that the expected benefits of the Management Services transaction or any contingent purchase price will not be realized within the expected time frame, in full or at all; as well as other additional risks and factors discussed in this Quarterly Report on Form 10-Q and any subsequent reports we file with theSEC . 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. 32 Table of Contents Overview We are a leading global provider of professional technical and management support services for governments, businesses and organizations throughout the world. We provide planning, consulting, architectural and engineering design, construction management services and investment and development services to commercial and government clients worldwide in major end markets such as transportation, facilities, environmental, energy, water and government markets. 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 and management fees. During the first quarter of fiscal 2020, we reorganized our operating and reporting structure to better align with our ongoing professional services business. This reorganization better reflected our continuing operations after the sale of our Management Services segment, our self-perform at-risk construction businesses, including our civil infrastructure and power construction businesses and the planned disposal of our oil & gas construction business. Our Management Services and self-perform at-risk construction businesses were part of our former Management Services segment and a substantial portion of our former Construction Services segment, respectively. These businesses are classified as discontinued operations in all periods presented. We report our continuing business through three segments, each of which is described in further detail below:Americas , International, andAECOM Capital (ACAP). Such segments are organized by 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.
? construction management services to commercial and government clients in the
transportation, water, government, facilities, environmental, and energy.
International: Planning, consulting, architectural and engineering design
? services to commercial and government clients in
transportation, water, government, facilities, environmental, and energy.
?
ACAP typically partners with investors and experienced developers as co-general partners. ACAP may, but is not required to, enter into contracts with our otherAECOM 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.
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TheU.S. federal government, in connection with theBiden Administration , has proposed significant legislative and executive infrastructure initiatives that, if enacted, could have a positive impact to our infrastructure business. Regarding our capital allocation policy, onNovember 13, 2020 , the Board approved an increase in our repurchase authorization to$1.0 billion . AtJune 30, 2021 , we have approximately$590 million remaining of the Board's repurchase authorization. We intend to deploy future available cash towards stock repurchases consistent with our capital allocation policy. We have exited substantially all of our self-perform at-risk construction business and expect to exit all of our non-core oil and gas markets. We have substantially completed our exit of 30 countries, subject to applicable laws, as part of our ongoing plan to improve profitability and reduce our risk profile, and we continue to evaluate our geographic exposure as part of such plan. We expect to incur restructuring costs of$40 to$50 million in fiscal year 2021 primarily related to previously announced restructuring actions that are expected to deliver continued margin improvement and efficiencies. Total cash costs for these restructuring actions are expected to be approximately$40
million to$50 million . Coronavirus Impacts
The impact of the coronavirus pandemic and measures to prevent and mitigate its spread are affecting our businesses in a number of ways:
The coronavirus and accompanying economic effects may reduce demand for our
? services and impact client spending in certain circumstances; however, the
uncertain nature of the coronavirus and its duration make it difficult for us
to predict and quantify such impact.
? We have restricted non-essential business travel, required or facilitated
employees to work remotely where appropriate.
? Non-essential construction and work on other client projects has been
temporarily halted in certain jurisdictions.
? Some contractual agreements are unable to be performed preventing us from
making or receiving payments.
The coronavirus has made estimating the future performance of our business and
? mitigating the adverse financial impact of these developments on our business
operations more difficult.
? State and local budget shortfalls in the
pipeline of pursuits and the pace of award activity.
? Certain markets, such as the
experiencing project delays that have impacted our performance and results.
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Results of Operations
Three and nine months ended June 30, 2021 compared to the three and nine months
ended June 30, 2020
Consolidated Results
Three Months Ended Nine Months Ended
June 30, June 30, Change June 30, June 30, Change
2021 2020 $ % 2021 2020 $ %
(unaudited - in millions)
Revenue $ 3,408.4 $ 3,189.7 $ 218.7 6.9 % $ 9,987.1 $ 9,671.0 $ 316.1 3.3 %
Cost of revenue 3,206.8 3,004.6 202.2 6.7 9,405.9 9,151.3 254.6 2.8
Gross profit 201.6 185.1 16.5 8.9 581.2 519.7 61.5 11.8Equity in earnings of joint ventures 8.2 8.6 (0.4) (4.7) 23.6 32.0 (8.4)
(26.3)
General and administrative expenses (36.3)
(54.5) 18.2 (33.4) (110.7) (139.2) 28.5 (20.5)
Restructuring costs (13.0) (20.3) 7.3 (36.0) (34.8) (96.4) 61.6 (63.9)
Income from operations 160.5 118.9 41.6 35.0 459.3 316.1 143.2 45.3
Other income 4.5 3.1 1.4 45.2 11.9 9.5 2.4 25.3
Interest expense (149.0) (34.9) (114.1) 326.9 (212.5) (112.4) (100.1) 89.1Income from continuing operations before taxes 16.0
87.1 (71.1) (81.6) 258.7 213.2 45.5
21.3
Income tax (benefit) expense for continuing operations (17.8) (7.1) (10.7) 150.7 42.9 30.3 12.6
41.6
Net income from continuing operations 33.8
94.2 (60.4) (64.1) 215.8 182.9 32.9
18.0
Net loss from discontinued operations (15.4)
(0.1) (15.3) NM* (119.1) (112.7) (6.4) 5.7
Net income 18.4 94.1 (75.7) (80.4) 96.7 70.2 26.5 37.7Net income attributable to noncontrolling interests from continuing operations
(5.9) (3.1) (2.8) 90.3 (16.2) (12.4) (3.8)
30.6
Net income attributable to noncontrolling interests from discontinued operations
(1.0) (1.7) 0.7 (41.2) (3.5) (14.0) 10.5
(75.0)
Net income attributable to noncontrolling interests (6.9)
(4.8) (2.1) 43.8 (19.7) (26.4) 6.7
(25.4)
Net income attributable to
91.1 (63.2) (69.4) 199.6 170.5 29.1
17.1
Net loss attributable to
(1.8) (14.6) NM* (122.6) (126.7) 4.1
(3.2)
Net income attributable to AECOM$ 11.5
$ 89.3 $ (77.8) (87.1) %$ 77.0 $ 43.8 $ 33.2 75.8 % *NM - Not Meaningful 35 Table of Contents
The following table presents the percentage relationship of statement of operations items to revenue:
Three Months Ended Nine Months Ended
June 30, June 30, June 30, June 30,
2021 2020 2021 2020
Revenue 100.0 % 100.0 % 100.0 % 100.0 %Cost of revenue 94.1 94.2 94.2 94.6 Gross profit 5.9 5.8 5.8 5.4 Equity in earnings of joint ventures 0.2 0.3 0.2 0.3 General and administrative expenses (1.0)
(1.8) (1.1) (1.4) Restructuring costs (0.4) (0.6) (0.3) (1.0) Income from operations 4.7 3.7 4.6 3.3 Other income 0.1 0.1 0.1 0.1 Interest expense (4.3) (1.1) (2.1) (1.2)
Income from continuing operations before taxes 0.5 2.7 2.6 2.2 Income tax (benefit) expense for continuing operations (0.5) (0.3) 0.4 0.3 Net income from continuing operations 1.0 3.0 2.2 1.9 Net loss from discontinued operations (0.5) 0.0 (1.2) (1.2) Net income 0.5
3.0 1.0 0.7 Net income attributable to noncontrolling interests from continuing operations, net of tax
(0.2) (0.1) (0.2) (0.1) Net income attributable to noncontrolling interests from discontinued operations, net of tax
0.0 0.0 0.0 (0.2)
Net income attributable to noncontrolling interests (0.2) (0.1) (0.2) (0.3)
Net income attributable to AECOM from continuing operations 0.8 2.9 2.0 1.8
Net loss attributable to AECOM from discontinued operations (0.5) 0.0 (1.2) (1.4)
Net income attributable to AECOM 0.3 %
2.9 % 0.8 % 0.4 %
Revenue
Our revenue for the three months ended
Our revenue for the nine months endedJune 30, 2021 increased$316.1 million , or 3.3%, to$9,987.1 million as compared to$9,671.0 million for the corresponding period last year. The increase in revenue for the three months endedJune 30, 2021 was primarily attributable to an increase in ourAmericas and International segments of$146.9 million and$71.4 million , respectively, as discussed further below. The increase in revenue for the nine months endedJune 30, 2021 was primarily attributable to an increase in ourAmericas and International segments of$244.9 million and$70.8 million , respectively, 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 pass through costs included in revenues can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends. Pass through costs included in revenues for the three months endedJune 30, 2021 and 2020 were$1.9 billion and$1.7 billion , respectively. Pass through costs included in revenues for the nine months endedJune 30, 2021 and 2020 were$5.4 billion and$5.1 billion , respectively. Pass through costs included in revenues as a percentage of total revenue were 55% and 53% during the three months endedJune 30, 2021 and 2020, respectively. Pass through costs included in revenues as a percentage of total revenue were 54% and 52% during the nine months endedJune 30, 2021 and 2020, respectively. 36 Table of Contents Gross Profit Our gross profit for the three months endedJune 30, 2021 increased$16.5 million , or 8.9%, to$201.6 million as compared to$185.1 million for the corresponding period last year. For the three months endedJune 30, 2021 , gross profit, as a percentage of revenue, increased to 5.9% from 5.8% in the three months endedJune 30, 2020 .
Our gross profit for the nine months ended
Gross profit changes were due to the reasons noted in
Equity in Earnings of Joint Ventures
Our equity in earnings of joint ventures for the three months endedJune 30, 2021 was$8.2 million as compared to$8.6 million in the corresponding period last year.
Our equity in earnings of joint ventures for the nine months endedJune 30, 2021 was$23.6 million as compared to$32.0 million in the corresponding period
last year. The decrease in earnings of joint ventures for the three and nine months endedJune 30, 2021 compared to the same period in the prior year is primarily due to the completion of a sports arena construction project in theAmericas .
General and Administrative Expenses
Our general and administrative expenses for the three months endedJune 30, 2021 decreased$18.2 million , or 33.4%, to$36.3 million as compared to$54.5 million for the corresponding period last year. For the three months endedJune 30, 2021 , general and administrative expenses, as a percentage of revenue, decreased to 1.0% from 1.8% in the three months endedJune 30, 2020 . Our general and administrative expenses for the nine months endedJune 30, 2021 decreased$28.5 million , or 20.5%, to$110.7 million as compared to$139.2 million for the corresponding period last year. For the nine months endedJune 30, 2021 , general and administrative expenses, as a percentage of revenue, decreased to 1.1% from 1.4% in the nine months endedJune 30, 2020 . The decreases in general and administrative expenses were primarily due to the execution of restructuring actions taken by management to increase profitability and simplify our operating structure.
Restructuring Costs
Since the first quarter of fiscal 2019, we have been implementing a restructuring plan to improve profitability. During the three and nine months endedJune 30, 2020 , we incurred restructuring expenses of$20.3 million and$96.4 million , respectively, primarily related to personnel costs associated with recent executive transitions. During the three and nine months endedJune 30, 2021 , we incurred restructuring expenses of$13.0 million and$34.8 million , respectively, primarily related to personnel costs. We expect to incur additional restructuring costs in the last quarter of fiscal 2021 primarily related to costs optimizing our cost structure and reducing overhead costs.
Other Income
Our other income for the three months ended
Our other income for the nine months ended
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Other income is primarily comprised of interest income.
Interest Expense
Our interest expense for the three months ended
Our interest expense for the nine months ended
The increase in interest expense for the three and nine months endedJune 30, 2021 was primarily due to a$117.5 million prepayment premium related to the redemption of our remaining unsecured 5.875% Senior Notes due 2024 during the three months endedJune 30, 2021 . Income Tax (Benefit) Expense Our income tax benefit for the three months endedJune 30, 2021 was$17.8 million as compared to$7.1 million in the corresponding period last year. The increase in tax benefit for the current period compared to the corresponding period last year is due primarily to a tax benefit of$25.9 million related to a corporate tax rate change in theUnited Kingdom and the tax impacts of a decrease in overall pre-tax income of$71.1 million , partially offset by tax expense of$13.2 million due to a partial settlement of an audit in theU.S. and a tax benefit of$25.4 million related to the release of a valuation allowance in the third quarter of fiscal 2020. Our income tax expense for the nine months endedJune 30, 2021 was$42.9 million as compared to$30.3 million in the corresponding period last year. The increase in tax expense for the current period compared to the corresponding period last year is due primarily to a tax benefit of$25.4 million related to the release of a valuation allowance during fiscal 2020 and the tax impacts of an increase in overall pre-tax income of$45.5 million , partially offset by a tax benefit of$25.9 million related to a corporate tax rate change in theUnited Kingdom . During the third quarter of fiscal 2021, theUnited Kingdom enacted a corporate tax rate increase from 19% to 25% beginningApril 2023 requiring deferred tax assets and liabilities to be remeasured. The remeasurement resulted in a$25.9 million tax benefit. During the third quarter of fiscal 2021, we partially settled ourU.S. federal audit for fiscal 2015 and 2016 and recorded tax expense of$13.2 million due primarily to changes in tax attributes. During the third quarter of fiscal 2020, management approved a tax planning strategy and we began restructuring certain operations inCanada which resulted in the release of a valuation allowance related to net operating losses in the amount of$25.4 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 Loss From Discontinued Operations
During the first quarter of fiscal 2020, management approved a plan to dispose via sale our Management Services business and our self-perform at-risk construction businesses. As a result of these strategic actions, the Management Services and self-perform at-risk construction businesses were classified as discontinued operations. That classification was applied retrospectively for all periods presented. Net loss from discontinued operations increased$15.3 million to a loss of$15.4 million from a loss of$0.1 million for the three months endedJune 30, 2021 and 2020, respectively. The increase in net loss from discontinued 38
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operations for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 was primarily due to losses recorded on a potential transaction in our oil and gas business during the three months endedJune 30, 2021 . Net loss from discontinued operations increased$6.4 million to a loss of$119.1 million from a loss of$112.7 million for the nine months endedJune 30, 2021 and 2020, respectively. The increase in net loss from discontinued operations for the nine-month period endedJune 30, 2021 compared to the nine-month period endedJune 30, 2020 was primarily due to losses recorded in fiscal year 2021 on the sales of our power and civil infrastructure construction businesses compared to prior year losses on a combined cycle power plant, offset by the prior year gain on disposal of the Management Services business recorded in fiscal year 2020.
Net Income Attributable to
The factors described above resulted in net income attributable toAECOM of$11.5 million and$77.0 million for the three and nine months endedJune 30, 2021 , respectively, as compared to net income attributable toAECOM of$89.3 million and$43.8 million for the three and nine months endedJune 30, 2020 , respectively.
Results of Operations by Reportable Segment:
Americas Three Months Ended Nine Months Ended June 30, June 30, Change June 30, June 30, Change 2021 2020 $ % 2021 2020 $ % Revenue$ 2,618.5 $ 2,471.6 $ 146.9 5.9 %$ 7,644.1 $ 7,399.2 $ 244.9 3.3 % Cost of revenue 2,457.9 2,316.3 141.6 6.1 7,186.8 6,968.9 217.9 3.1 Gross profit$ 160.6 $ 155.3 $ 5.3 3.4 %$ 457.3 $ 430.3 $ 27.0 6.3 %
The following table presents the percentage relationship of statement of operations items to revenue:
Three Months Ended Nine Months Ended
June 30, June 30, June 30, June 30,
2021 2020 2021 2020
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue 93.9 93.7 94.0 94.2
Gross profit 6.1 % 6.3 % 6.0 % 5.8 %
Revenue
Revenue for our
Revenue for our
The increase in revenue for the nine months ended
Gross Profit Gross profit for ourAmericas segment for the three months endedJune 30, 2021 increased$5.3 million , or 3.4%, to$160.6 million as compared to$155.3 million for the corresponding period last year. As a percentage of revenue, gross profit decreased to 6.1% of revenue for the three months endedJune 30, 2021 from 6.3% in the corresponding period last year. 39 Table of Contents Gross profit for ourAmericas segment for the nine months endedJune 30, 2021 increased$27.0 million , or 6.3%, to$457.3 million as compared to$430.3 million for the corresponding period last year. As a percentage of revenue, gross profit increased to 6.0% of revenue for the nine months endedJune 30, 2021 from 5.8% in the corresponding period last year. The increase in gross profit and gross profit as a percentage of revenue for the three and nine months endedJune 30, 2021 was primarily due to reduced costs and a more efficient operating structure resulting from a realigned overhead and delivery structure, investments in technology, and shared service centers to enhance efficiencies. International Three Months Ended Nine Months Ended June 30, June 30, Change June 30, June 30, Change 2021 2020 $ % 2021 2020 $ % Revenue$ 789.3 $ 717.9 $ 71.4 9.9 %$ 2,341.4 $ 2,270.6 $ 70.8 3.1 % Cost of revenue 748.9 688.3 60.6 8.8 2,219.1 2,182.4 36.7 1.7 Gross profit$ 40.4 $ 29.6 $ 10.8 36.5 %$ 122.3 $ 88.2 $ 34.1 38.7 %
The following table presents the percentage relationship of statement of operations items to revenue:
Three Months Ended Nine Months Ended
June 30, June 30, June 30, June 30,
2021 2020 2021 2020
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue 94.9 95.9 94.8 96.1
Gross profit 5.1 % 4.1 % 5.2 % 3.9 %
Revenue
Revenue for our International segment for the three months ended
Revenue for our International segment for the nine months endedJune 30, 2021 increased$70.8 million , or 3.1% to$2,341.4 million as compared to$2,270.6 million for the corresponding period last year. The increase in revenue for the three and nine months endedJune 30, 2021 was primarily due to increases in theUnited Kingdom andAustralia as well as the benefit of changes in the foreign exchange rates.
Gross Profit
Gross profit for our International segment for the three months endedJune 30, 2021 increased$10.8 million , or 36.5%, to$40.4 million as compared to$29.6 million for the corresponding period last year. As a percentage of revenue, gross profit increased to 5.1% of revenue for the three months endedJune 30, 2021 from 4.1% in the corresponding period last year. Gross profit for our International segment for the nine months endedJune 30, 2021 increased$34.1 million , or 38.7%, to$122.3 million as compared to$88.2 million for the corresponding period last year. As a percentage of revenue, gross profit increased to 5.2% of revenue for the nine months endedJune 30, 2021 from 3.9% in the corresponding period last year. The increase in gross profit and gross profit as a percentage of revenue for the three and nine months endedJune 30, 2021 was primarily due to reduced costs resulting from actions taken to improve efficiency, including consolidating real estate, implementing a streamlined overhead structure, and exiting lower-returning countries. 40 Table of Contents AECOM Capital Three Months Ended Nine Months Ended June 30, June 30, Change June 30, June 30, Change 2021 2020 $ % 2021 2020 $ % Revenue$ 0.6 $ 0.2 $ 0.4
200.0 %
(133.3)
118.2 % $ (5.8) $ (5.3) $ (0.5) 9.4 %
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 increase 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 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, repurchases of common stock, and refinancing or 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 twelve months. We expect to spend approximately$75 million to$95 million in restructuring costs in fiscal 2021 associated with previously announced restructuring actions that are expected to deliver continued margin improvement and efficiencies.
Generally, we do not provide forU.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. AtJune 30, 2021 , we have determined that we will continue to indefinitely reinvest the earnings of some 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 onDecember 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. AtJune 30, 2021 , cash and cash equivalents, including cash and cash equivalents included in current assets held for sale, were$1,054.9 million , a decrease of$763.3 million , or 42.0%, from$1,818.2 million atSeptember 30, 2020 . The decrease in cash and cash equivalents was primarily attributable to cash used to repurchase common stock and cash disposed with the sales of the at-risk power and civil infrastructure construction businesses. 41 Table of Contents Net cash provided by operating activities was$386.6 million for the nine months endedJune 30, 2021 , compared to net cash used in operating activities of$319.7 million for the nine months endedJune 30, 2020 . The year over year improvement in operating cash flow was partly due to sales of the Management Services business in the second quarter of fiscal 2020, the power construction business in the first quarter of 2021 and the civil infrastructure business in the second quarter of fiscal 2021, which led to a favorable year over year impact to operating cash flow of approximately$223.9 million when comparing the nine months endedJune 30, 2021 with the prior year. The remaining increase in operating cash flow in the nine-month period endedJune 30, 2021 compared to the prior year was attributable to improvements in working capital of approximately$415.1 million and an increase in earnings adjusted for non-cash items of approximately$67.3 million for the nine months endedJune 30, 2021 compared to the nine months endedJune 30, 2020 . The sale of trade receivables to financial institutions during the nine months endedJune 30, 2021 provided a net benefit of$73.7 million as compared to a net unfavorable impact of$156.9 million during the nine months endedJune 30, 2020 . We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable
to us. Net cash used in investing activities was$401.7 million for the nine months endedJune 30, 2021 , as compared to net cash provided by investing activities of$2,074.1 million for the nine months endedJune 30, 2020 . Cash flow from investing activities decreased primarily due to the change in proceeds, net of cash disposed, from the sales of the at-risk power and civil infrastructure construction businesses during the nine months endedJune 30, 2021 , which was an outflow of$265.9 million , compared to the$2,218.9 million of proceeds, net of cash disposed, received from the sale of the Management Services business in the nine months endedJune 30, 2020 . Net cash used in financing activities was$754.9 million for the nine months endedJune 30, 2021 as compared to$1,405.5 million for the nine months endedJune 30, 2020 . The decrease from the prior year was primarily attributable to debt repayment using the proceeds from the sale of the Management Services business in the nine months endedJune 30, 2020 , offset by increased stock repurchases under the Stock Repurchase Program during the nine months endedJune 30, 2021 . Total borrowings under our credit agreement may vary during the period as we regularly draw and repay amounts to fund working capital. Working Capital Working capital, or current assets less current liabilities, decreased$871.4 million , or 60.5%, to$568.5 million atJune 30, 2021 from$1,439.9 million atSeptember 30, 2020 . Net accounts receivable and contract assets, net of contract liabilities, decreased to$3,087.4 million atJune 30, 2021 from$3,535.3 million atSeptember 30, 2020 . The change in working capital is primarily due to the change in cash and cash equivalents during the nine months endedJune 30, 2021 , as described above.
Days Sales Outstanding (DSO), which includes net accounts receivable and
contract assets, net of contract liabilities, was 79 days at
In Note 4, Revenue Recognition, in the notes to our consolidated financial statements, a comparative analysis of the various components of accounts receivable is provided. Except for claims, substantially all contract assets are expected to be billed and collected within twelve months.
Contract assets 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. Award fees in contract assets 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.
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Debt
Debt consisted of the following:
June 30, September 30,
2021 2020
(in millions)
Credit Agreement $ 1,156.9 $ 248.5
2024 Senior Notes - 797.3
2027 Senior Notes 997.3 997.3
Other debt 79.7 41.9
Total debt 2,233.9 2,085.0Less: Current portion of debt and short-term borrowings (55.2)
(20.9)
Less: Unamortized debt issuance costs (24.9)
(23.0)
Long-term debt $ 2,153.8 $ 2,041.1 The following table presents, in millions, scheduled maturities of our debt as
of
Fiscal Year 2021 (three months remaining)$ 14.9 2022 48.2 2023 38.1 2024 39.4 2025 34.2 Thereafter 2,059.1 Total$ 2,233.9 Credit Agreement
We entered into a credit agreement (Credit Agreement) onOctober 17, 2014 , which, as amended to date, consists of (i) a term loan A facility that included a$510 million (US) term loan A facility with a term that expired onMarch 13, 2021 and a$500 million Canadian dollar (CAD) term loan A facility and a$250 million Australian dollar (AUD) term loan A facility, each with terms expiring onMarch 13, 2023 ; (ii) a$600 million term loan B facility with a term expiring onMarch 13, 2025 ; and (iii) a revolving credit facility in an aggregate principal amount of$1.35 billion with a term expiring onMarch 13, 2023 . Some of our subsidiaries (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 our assets and our Guarantors' assets pursuant to a security and pledge agreement (Security Agreement). The collateral under the Security Agreement is subject to release upon fulfillment of conditions specified in the Credit Agreement and Security Agreement. The Credit Agreement contains covenants that limit our ability and the ability of some 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 various types of burdensome agreements; or (vii) make investments. OnJuly 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 our acquisition of theURS Corporation (URS) inOctober 2014 . OnDecember 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 our international subsidiaries. 43 Table of Contents
OnSeptember 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 toSeptember 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 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 ofMarch 31, 2017 as well as the investment basket for ourAECOM Capital business. OnMarch 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 anAECOM Capital disposition, which disposition was completed onApril 28, 2017 ; and (4) amend provisions relating to the our ability to undertake internal restructuring steps to accommodate changes in tax laws. OnMarch 13, 2018 , the Credit Agreement was amended to (1) refinance the existing term loan A facility to include a$510 million (US) term loan A facility with a term expiring onMarch 13, 2021 and a$500 million CAD term loan A facility and a$250 million AUD term loan A facility each with terms expiring onMarch 13, 2023 ; (2) issue a new$600 million term loan B facility to institutional investors with a term expiring onMarch 13, 2025 ; (3) increase the capacity of the our revolving credit facility from$1.05 billion to$1.35 billion and extend its term untilMarch 13, 2023 ; (4) reduce our interest rate borrowing costs as follows: (a) the term loan B facility, at our election, Base Rate (as defined in the Credit Agreement) plus 0.75% or Eurocurrency Rate (as defined in the Credit Agreement) plus 1.75%, (b) the (US) term loan A facility, at our election, Base Rate plus 0.50% or Eurocurrency Rate plus 1.50%, and (c) the Canadian (CAD) term loan A facility, the Australian (AUD) term loan A facility, and the revolving credit facility, an initial rate of, at our election, Base Rate plus 0.75% or Eurocurrency Rate plus 1.75%, and after the end of our fiscal quarter endedJune 30, 2018 , Base Rate loans plus a margin ranging from 0.25% to 1.00% or Eurocurrency Rate plus a margin from 1.25% to 2.00%, based on the Consolidated Leverage Ratio (as defined in the Credit Agreement); and (5) revise covenants including increasing the amounts available under the restricted payment negative covenant and revising the Maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) to include a 4.5 leverage ratio throughSeptember 30, 2019 after which the leverage ratio stepped down to 4.0.
On
OnJanuary 28, 2020 , we entered into Amendment No. 7 to the Credit Agreement which modifies the asset disposition covenant to permit the sale of our Management Services business and the mandatory prepayment provision so that only outstanding term loans are prepaid using the net proceeds from the sale. OnMay 1, 2020 , we entered into Amendment No. 8 to the Credit Agreement which allows for borrowings to be made, until three months after closing, up to an aggregate principal amount of$400,000,000 under a secured delayed draw term loan facility, the proceeds of which are permitted to be used to pay all or a portion of the amounts payable in connection with any tender for or redemption or repayment of our or our subsidiaries' existing senior unsecured notes and any associated fees and expenses. The amendment also revised certain terms and covenants in the Credit Agreement, including by, among other things, the maximum leverage ratio covenant to 4.00:1.00, subject to increases to 4.50:1.00 for certain specified periods in connection with certain material acquisitions, increasing the potential size of incremental facilities under the Credit Agreement, revising the definition of "Consolidated EBITDA" to provide for additional flexibility in the calculation thereof and adding a Eurocurrency Rate floor of 0.75% to the interest rate under the revolving credit facility.
On
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OnFebruary 8, 2021 , we entered into the 2021 Refinancing Amendment to the Credit Agreement, pursuant to which the maturity of the revolving credit facility and the term loans outstanding under the Credit Agreement were extended toFebruary 8, 2026 . In addition, the refinancing amendment reduced the size of the revolving credit facility to$1,150,000,000 . The applicable interest rate under the Credit Agreement is calculated at a per annum rate equal to, at our option, (a) the Eurocurrency Rate (as defined in the Credit Agreement) plus an applicable margin (the "LIBOR Applicable Margin"), which is currently at 1.50% or (b) the Base Rate (as defined in the Credit Agreement) plus an applicable margin (the "Base Rate Applicable Margin" and together with the LIBOR Applicable Margin, the "Applicable Margins"), which is currently at 0.50%. The Credit Agreement includes certain environmental, social and governance (ESG) metrics relating to our CO2 emissions and our percentage of employees who identify as women (each, a "Sustainability Metric"). The Applicable Margins and the commitment fees for the revolving credit facility will be adjusted on an annual basis based on our achievement of preset thresholds for each Sustainability Metric. OnApril 13, 2021 , we entered into Amendment No. 10 to the Credit Agreement, pursuant to which the lenders thereunder provided a secured term "B" credit facility (Term B Facility) to the Company in an aggregate principal amount of$700,000,000 . The Term B Facility matures onApril 13, 2028 . The proceeds of the Term B Facility were used to fund the purchase price, fees and expenses in connection with our cash tender offer to purchase up to$700,000,000 aggregate purchase price (not including any accrued and unpaid interest) of our outstanding 5.875% Senior Notes due 2024. The Term B Facility is subject to the same affirmative and negative covenants and events of default as the existing term loans previously incurred pursuant to the existing Credit Agreement (except that the financial covenants in the existing Credit Agreement do not apply to the Term B Facility). The applicable interest rate for the Term B Facility is calculated at a per annum rate equal to, at our option, (a) the Eurocurrency Rate (as defined in the Credit Agreement) plus 1.75% or (b) the Base Rate (as defined in the Credit Agreement) plus 0.75%.
OnJune 25, 2021 , we entered into Amendment No. 11 to the Credit Agreement, pursuant to which the lenders have provided to the Company an additional$215,000,000 in aggregate principal amount under the Term A Facility. The Term A Facility matures onFebruary 8, 2026 . We used the net proceeds from the increase in the Term A Facility (together with cash on hand), to (i) redeem all of the Company's remaining 5.875% Senior Notes due 2024 and (ii) pay fees and expenses related to such redemption. We are required to maintain a consolidated interest coverage ratio of at least 3.00 to 1.00 and a consolidated leverage ratio of less than or equal to 4.00 to 1.00 (subject to certain adjustments in connection with permitted acquisitions), tested on a quarterly basis.
Our consolidated leverage ratio was 2.5 at
AtJune 30, 2021 andSeptember 30, 2020 , letters of credit totaled$11.2 million and$19.0 million , respectively, under our revolving credit facilities. As ofJune 30, 2021 andSeptember 30, 2020 , we had$1,138.8 million and$1,331.0 million , respectively, available under our revolving credit facility. 2024 Senior Notes OnOctober 6, 2014 , we completed a private placement offering of$800,000,000 aggregate principal amount of the unsecured 5.875% Senior Notes due 2024 (the 2024 Notes). OnNovember 2, 2015 , we completed an exchange offer to exchange the unregistered 2024 Senior Notes for registered notes, as well as all related guarantees. OnJuly 21, 2020 , we completed a cash tender offer at par for up to$639 million in aggregate principal amount of the 2024 Notes and the 2027 Senior Notes. We accepted for purchase all of 2024 Notes validly tendered and not validly withdrawn pursuant to the cash tender offer, amounting to$2.7 million aggregate principal amount of the 2024 Notes at par. We made the cash tender offer at par to satisfy obligations under the indentures governing the 2024 Notes and the 2027 Senior Notes relating to the use of certain cash proceeds from the disposition of our Management Services business, which was completed onJanuary 31, 2020 . 45 Table of Contents
OnApril 26, 2021 , we completed a cash tender offer for up to$700 million in aggregate purchase price (not including any accrued and unpaid interest) of the 2024 Notes. We accepted for purchase all of 2024 Notes validly tendered and not validly withdrawn pursuant to the cash tender offer, amounting to$608.3 million aggregate principal amount of the 2024 Notes. The aggregate purchase price paid in connection with the tender offer was$697.2 million (inclusive of the tender offer premiums paid pursuant to the terms of the tender offer), plus accrued and unpaid interest. The amounts paid were funded using the proceeds from the Term B Facility described above and cash on hand. OnApril 6, 2021 , we, the guarantors with respect to the 2024 Notes, and the trustee with respect to the 2024 Notes executed and delivered a supplemental indenture to the 2024 Notes (Supplemental Indenture), which became effective onApril 6, 2021 . The Supplemental Indenture became operative onApril 13, 2021 , upon our acceptance of the 2024 Notes for purchase and payment therefore at the early settlement date of theApril 2021 tender offer. With respect to the Supplemental Indenture, each of the following sections in the indenture relating to the 2024 Notes were deleted: (i) Section 4.03, "SEC Reports"; (ii) Section 4.04, "Compliance Certificate"; (iii) Section 4.05, "Taxes"; (iv) Section 4.06, "Stay, Extension and Usury Laws"; (v) Section 4.07, "Limitation on Restricted Payments"; (vi) Section 4.08, "Limitation on Restrictions on Distributions from Restricted Subsidiaries"; (vii) Section 4.09, "Limitations on Indebtedness"; (viii) Section 4.10, "Limitation on Sales of Assets and Subsidiary Stock"; (ix) Section 4.11, Limitation on Transactions with Affiliates"; (x) Section 4.12, "Limitation on Liens"; (xi) Section 4.14, "Change of Control"; (xii) Section 4.18, "Future Subsidiary Guarantors"; (xiii) Section 4.19, "Suspension of Covenants"; (xiv) Section 4.20, "Additional Interest Notice"; and (xv) Section 6.01(a), "Events of Default" (subsections (3) through (7) thereof (inclusive)). Certain modifications to Section 3.01, "Notices to Trustee"; Section 3.02(a) "Selection of Notes to Be Redeemed"; Section 3.03(a) "Notice of Redemption"; Section 4.15 "Corporate Existence"; Section 5.01, "Merger and Consolidation"; and Section 5.02, "Successor Corporation " were also made. OnJune 25, 2021 , we redeemed the remaining 2024 Notes. The redemption price of the 2024 Notes was 115.108% of the remaining outstanding aggregate principal amount, amounting to$217.5 million , plus accrued and unpaid interest. The amounts paid were funded using the proceeds from the additional draw down from the Term A Facility described above and cash on hand. The redemption of the 2024 Notes in the third quarter of fiscal 2021 resulted in a$117.5 million prepayment premium, which was included interest expense. 2027 Senior Notes OnFebruary 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 2027 Senior Notes). OnJune 30, 2017 , we completed an exchange offer to exchange the unregistered 2027 Senior Notes for registered notes,
as well as related guarantees.
As ofJune 30, 2021 , the estimated fair value of the 2027 Senior Notes was approximately$1,109.5 million . The fair value of the 2027 Senior Notes as ofJune 30, 2021 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 2027 Senior Notes. Interest is payable on the 2027 Senior Notes at a rate of 5.125% per annum. Interest on the 2027 Senior Notes is payable semi-annually onMarch 15 andSeptember 15 of each year, commencing onSeptember 15, 2017 . The 2027 Senior Notes will mature onMarch 15, 2027 .
At any time and from time to time prior toDecember 15, 2026 , we may redeem all or part of the 2027 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. The indenture pursuant to which the 2027 Senior Notes were issued contains customary events of default, including, among other things, payment default, exchange default, failure to provide notices thereunder and provisions related to bankruptcy events. The indenture also contains customary negative covenants. We were in compliance with the covenants relating to the 2027 Senior Notes as ofJune 30, 2021 . 46 Table of Contents URS Senior Notes
In connection with the 2014 acquisition of the
The remaining$248.5 million principal amount of the 2022 URS Senior Notes were fully redeemed onAugust 31, 2020 using proceeds from a$248.5 million secured delayed draw term loan facility under the Credit Agreement, at a redemption price that was 106.835% of the principal amount outstanding plus accrued and unpaid interest. TheAugust 31, 2020 redemption resulted in a$17.0 million prepayment premium, which was included in interest expense during the year
endedSeptember 30, 2020 . Other Debt and Other Items 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 in connection with general and professional liability insurance programs and for contract performance guarantees. AtJune 30, 2021 andSeptember 30, 2020 , these outstanding standby letters of credit totaled$489.6 million and$510.1 million , respectively. As ofJune 30, 2021 , we had$443.1 million available under these unsecured credit facilities. Effective Interest Rate Our average effective interest rate on our total debt, including the effects of the interest rate swap agreements and excluding the effects of prepayment premiums included in interest expense, during the nine months endedJune 30, 2021 and 2020 was 4.7% and 5.2%, respectively. Interest expense in the consolidated statements of operations included amortization of deferred debt issuance costs for the three and nine months endedJune 30, 2021 of$4.6 million and$9.0 million , respectively, and for the three and nine months endedJune 30, 2020 of$1.3 million and$3.8 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, Joint Ventures and Variable Interest Entities, in the notes to our consolidated financial statements. Other than normal property and equipment additions and replacements, expenditures to further the implementation of our various information technology systems, commitments under our incentive compensation programs, amounts we may expend to repurchase stock under our stock repurchase program and acquisitions from time to time and disposition costs, 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 and Other Items above, as ofJune 30, 2021 , there was approximately$500.2 million , including both continuing and discontinued operations, outstanding under standby letters of credit primarily issued 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. 47 Table of Contents
We recognized on our balance sheet the funded status of our pension benefit plans, measured as the difference between the fair value of plan assets and the projected benefit obligation. AtJune 30, 2021 , our defined benefit pension plans had an aggregate deficit (the excess of projected benefit obligations over the fair value of plan assets) of approximately$400.0 million . The total amounts of employer contributions paid for the nine months endedJune 30, 2021 were$10.1 million forU.S. plans and$18.9 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 some 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. For the year endedSeptember 30, 2020 , we contributed$4.0 million to multiemployer pension plans. Contractual Obligations Refer to our Annual Report on Form 10-K for the year endedSeptember 30, 2020 for a discussion of our contractual obligations. There have been no changes, outside of the ordinary course of business, to these contractual obligations during the nine months endedJune 30, 2021 .
Condensed Combined Financial Information
In connection with the registration of the Company's 2014 Senior Notes that were declared effective by theSEC onSeptember 29, 2015 ,AECOM became subject to the requirements of Rule 3-10 of Regulation S-X, as amended, regarding financial statements of guarantors and issuers of guaranteed securities. Both the 2014 Senior Notes and the 2027 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by some ofAECOM'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 toAECOM in the form of cash dividends, loans or advances. The following tables present condensed combined summarized financial information forAECOM and the Subsidiary Guarantors. All intercompany balances and transactions are eliminated in the presentation of the combined financial statements. Amounts provided do not represent our total consolidated amounts as ofJune 30, 2021 andSeptember 30, 2020 , and for the nine months endedJune 30, 2021 .
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