16.Condensed Consolidating Financial Information

As discussed in Note 7, on October 6, 2014, AECOM issued $800.0 million aggregate principal amount of its 2022 Notes and $800.0 million aggregate principal amount of its 2024 Notes in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). AECOM filed a Registration Statement on Form S-4 relating to the offer to exchange the Notes for new 5.75% Senior Notes due 2022 and 5.875% Senior Notes due 2024 that was declared effective by the SEC on September 29, 2015. The 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.

In connection with the registration of the exchange offer, AECOM became subject to the requirements of Rule 3-10 of Regulation S-X regarding financial statements of guarantors and issuers of guaranteed securities registered or being registered with the Securities and Exchange Commission. 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, 2016

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	22.0	$	159.5	$	516.2	$	—		$	697.7
Accounts receivable—net	—		2,081.9		2,456.5		—			4,538.4
Intercompany receivable	737.9		105.0		135.5		(978.4		)	—
Prepaid expenses and other current assets	77.4		346.3		284.0		—			707.7
Income taxes receivable	12.0		—		18.7		10.6			41.3

TOTAL CURRENT ASSETS	849.3		2,692.7		3,410.9		(967.8		)	5,985.1
PROPERTY AND EQUIPMENT—NET	170.1		241.4		223.4		—			634.9
DEFERRED TAX ASSETS—NET	282.8		—		112.4		(258.8		)	136.4
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	5,976.3		1,289.2		58.1		(7,323.6		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	0.7		52.7		290.5		—			343.9
GOODWILL	—		3,318.6		2,465.8		—			5,784.4
INTANGIBLE ASSETS—NET	—		317.2		132.6		—			449.8
OTHER NON-CURRENT ASSETS	8.4		28.4		137.7		—			174.5

TOTAL ASSETS	$	7,287.6	$	7,940.2	$	6,831.4	$	(8,550.2	)	$	13,509.0


LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	1.9	$	7.3	$	5.6	$	—		$	14.8
Accounts payable	39.2		932.8		995.1		—			1,967.1
Accrued expenses and other current liabilities	105.8		1,074.9		987.8		—			2,168.5
Accrued taxes payable	—		—		0.1		10.6			10.7
Intercompany payable	88.2		837.0		171.1		(1,096.3		)	—
Billings in excess of costs on uncompleted contracts	—		239.4		420.9		—			660.3
Current portion of long-term debt	108.4		221.0		14.5		—			343.9

TOTAL CURRENT LIABILITIES	343.5		3,312.4		2,595.1		(1,085.7		)	5,165.3
OTHER LONG-TERM LIABILITIES	112.3		321.5		585.8		—			1,019.6
DEFERRED TAX LIABILITY — NET	—		271.7		—		(258.8		)	12.9
NOTE PAYABLE INTERCOMPANY—NON CURRENT	—		—		572.4		(572.4		)	—
LONG-TERM DEBT	3,455.0		278.7		17.6		—			3,751.3

TOTAL LIABILITIES	3,910.8		4,184.3		3,770.9		(1,916.9		)	9,949.1
TOTAL AECOM STOCKHOLDERS’ EQUITY	3,376.8		3,755.9		2,879.0		(6,633.3		)	3,378.4
Noncontrolling interests	—		—		181.5		—			181.5

TOTAL STOCKHOLDERS’ EQUITY	3,376.8		3,755.9		3,060.5		(6,633.3		)	3,559.9

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,287.6	$	7,940.2	$	6,831.4	$	(8,550.2	)	$	13,509.0

Condensed Consolidating Balance Sheets

(unaudited - in millions)

September 30, 2016

	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents	$	1.8	$	183.7	$	506.6	$	—		$	692.1
Accounts receivable—net	—		2,034.0		2,497.5		—			4,531.5
Intercompany receivable	760.7		151.7		152.0		(1,064.4		)	—
Prepaid expenses and other current assets	98.7		336.2		295.2		—			730.1
Income taxes receivable	28.7		—		18.4		—			47.1


TOTAL CURRENT ASSETS	889.9		2,705.6		3,469.7		(1,064.4		)	6,000.8
PROPERTY AND EQUIPMENT—NET	169.3		236.5		239.2		—			645.0
DEFERRED TAX ASSETS—NET	265.2		—		129.8		(223.5		)	171.5
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES	6,031.7		1,408.4		58.4		(7,498.5		)	—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES	0.7		48.6		281.2		—			330.5
GOODWILL	—		3,286.6		2,537.2		—			5,823.8
INTANGIBLE ASSETS—NET	—		334.0		145.4		—			479.4
OTHER NON-CURRENT ASSETS	8.4		71.4		139.1		—			218.9


TOTAL ASSETS	$	7,365.2	$	8,091.1	$	7,000.0	$	(8,786.4	)	$	13,669.9



LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	3.1	$	7.3	$	15.9	$	—		$	26.3
Accounts payable	45.8		907.0		958.1		—			1,910.9
Accrued expenses and other current liabilities	201.2		1,137.1		1,046.5		—			2,384.8
Accrued taxes payable	—		—		10.8		—			10.8
Intercompany payable	114.1		857.9		208.8		(1,180.8		)	—
Billings in excess of costs on uncompleted contracts	—		237.5		394.4		—			631.9
Current portion of long-term debt	108.2		222.1		9.7		—			340.0


TOTAL CURRENT LIABILITIES	472.4		3,368.9		2,644.2		(1,180.8		)	5,304.7
OTHER LONG-TERM LIABILITIES	115.7		349.3		632.4		—			1,097.4
DEFERRED TAX LIABILITY — NET	—		236.6		—		(223.5		)	13.1
NOTE PAYABLE INTERCOMPANY—NON CURRENT	—		—		563.5		(563.5		)	—
LONG-TERM DEBT	3,411.2		273.4		17.6		—			3,702.2


TOTAL LIABILITIES	3,999.3		4,228.2		3,857.7		(1,967.8		)	10,117.4
TOTAL AECOM STOCKHOLDERS’ EQUITY	3,365.9		3,862.9		2,956.7		(6,818.6		)	3,366.9
Noncontrolling interests	—		—		185.6		—			185.6


TOTAL STOCKHOLDERS’ EQUITY	3,365.9		3,862.9		3,142.3		(6,818.6		)	3,552.5


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,365.2	$	8,091.1	$	7,000.0	$	(8,786.4	)	$	13,669.9

Condensed Consolidating Statements of Operations

(unaudited - in millions)

	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	—			2,161.3			2,040.3			(13.3		)	4,188.3

Gross Profit	—			120.2			49.8			—			170.0
Equity in earnings from subsidiaries	120.3			(0.1		)	0.7			(120.9		)	—
Equity in earnings of joint ventures	—			9.9			11.5			—			21.4
General and administrative expenses	(32.6		)	—			—			—			(32.6		)
Acquisition and integration expenses	(15.4		)	—			—			—			(15.4		)

Income from operations	72.3			130.0			62.0			(120.9		)	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			131.9			54.7			(120.9		)	90.6
Income tax (benefit) expense	(22.3		)	35.9			11.2			—			24.8

Net income	47.2			96.0			43.5			(120.9		)	65.8
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(18.6		)	—			(18.6		)

Net income attributable to AECOM	$	47.2		$	96.0		$	24.9		$	(120.9	)	$	47.2

	For the three months ended December 31, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Revenue	$	—		$	2,236.3		$	2,094.2		$	(32.8	)	$	4,297.7
Cost of Revenue	—			2,182.5			2,007.1			(32.8		)	4,156.8

Gross Profit	—			53.8			87.1			—			140.9
Equity in earnings from subsidiaries	54.9			(40.3		)	0.8			(15.4		)	—
Equity in earnings of joint ventures	—			4.5			20.7			—			25.2
General and administrative expenses	(27.6		)	(1.1		)	—			—			(28.7		)
Acquisition and integration expenses	(41.0		)	—			—			—			(41.0		)
Loss on disposal activities	—			—			(41.0		)	—			(41.0		)

(Loss) income from operations	(13.7		)	16.9			67.6			(15.4		)	55.4
Other income	0.8			8.9			2.5			(9.2		)	3.0
Interest expense	(53.3		)	(5.7		)	(9.7		)	9.2			(59.5		)

(Loss) income before income tax (benefit) expense	(66.2		)	20.1			60.4			(15.4		)	(1.1		)
Income tax (benefit) expense	(45.8		)	18.1			14.2			12.8			(0.7		)

Net (loss) income	(20.4		)	2.0			46.2			(28.2		)	(0.4		)
Noncontrolling interest in income of consolidated subsidiaries, net of tax	—			—			(20.0		)	—			(20.0		)

Net (loss) income attributable to AECOM	$	(20.4	)	$	2.0		$	26.2		$	(28.2	)	$	(20.4	)

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)

	For the three months ended December 31, 2016
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net income	$	47.2	$	96.0	$	43.5		$	(120.9	)	$	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		96.0		(15.6		)	(120.9		)	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	$	96.0	$	(33.9	)	$	(120.9	)	$	(8.1	)

	For the three months ended December 31, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net (loss) income	$	(20.4	)	$	2.0		$	46.2		$	(28.2	)	$	(0.4	)
Other comprehensive income (loss), net of tax:
Net unrealized gain on derivatives, net of tax	3.9			—			1.4			—			5.3
Foreign currency translation adjustments	—			—			(97.7		)	—			(97.7		)
Pension adjustments, net of tax	0.6			(4.7		)	4.8			—			0.7

Other comprehensive income (loss), net of tax	4.5			(4.7		)	(91.5		)	—			(91.7		)

Comprehensive loss, net of tax	(15.9		)	(2.7		)	(45.3		)	(28.2		)	(92.1		)
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax	—			—			(18.3		)	—			(18.3		)

Comprehensive loss attributable to AECOM, net of tax	$	(15.9	)	$	(2.7	)	$	(63.6	)	$	(28.2	)	$	(110.4	)

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		)
Net purchase 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

	For the three months ended December 31, 2015
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total

CASH FLOWS FROM OPERATING ACTIVITIES	$	(265.1	)	$	295.0		$	48.1		$	—		$	78.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of businesses and property	—			—			37.6			—			37.6
Net investment in unconsolidated joint ventures	—			(0.5		)	(7.2		)	—			(7.7		)
Net sales of investments	—			—			11.0			—			11.0
Payments for capital expenditures, net of disposals	(5.3		)	(9.0		)	13.4			—			(0.9		)
Receipts from intercompany notes receivable	7.0			39.7			—			(46.7		)	—
Other intercompany investing activities	342.4			21.9			—			(364.3		)	—

Net cash used in investing activities	344.1			52.1			54.8			(411.0		)	40.0

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements	1,220.7			—			2.0			—			1,222.7
Repayments of borrowings under credit agreements	(1,283.8		)	(5.8		)	(15.3		)	—			(1,304.9		)
Cash paid for debt and equity issuance costs	(1.2		)	—			—			—			(1.2		)
Proceeds from issuance of common stock	6.9			—			—			—			6.9
Proceeds from exercise of stock options	3.0			—			—			—			3.0
Payments to repurchase common stock	(17.3		)	—			—			—			(17.3		)
Excess tax benefit from share-based payment	3.3			—			—			—			3.3
Net distributions to noncontrolling interests	—			—			(37.8		)	—			(37.8		)
Other financing activities	(9.7		)	(31.7		)	28.4			—			(13.0		)
Intercompany notes repayments	—			—			(46.7		)	46.7			—
Other intercompany financing activities	—			(339.7		)	(24.6		)	364.3			—

Net cash used in financing activities	(78.1		)	(377.2		)	(94.0		)	411.0			(138.3		)

EFFECT OF EXCHANGE RATE CHANGES ON CASH	—			—			(5.6		)	—			(5.6		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	0.9			(30.1		)	3.3			—			(25.9		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1.3			162.4			520.2			—			683.9

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	2.2		$	132.3		$	523.5		$	—		$	658.0