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Condensed Consolidating Financial Information

9 Months Ended

Jun. 30, 2019

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 some 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)

June 30, 2019


					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents		$	3.1		$	254.7		$	535.8		$	—		$	793.6
Accounts receivable and contract assets—net			—			2,628.7			3,199.4			—			5,828.1
Intercompany receivable			1,071.6			126.9			176.1			(1,374.6)			—
Prepaid expenses and other current assets			67.8			267.8			271.9			—			607.5
Current assets held for sale			—			—			—			—			—
Income taxes receivable			—			—			42.6			—			42.6
TOTAL CURRENT ASSETS			1,142.5			3,278.1			4,225.8			(1,374.6)			7,271.8
PROPERTY AND EQUIPMENT—NET			204.6			193.3			205.6			—			603.5
DEFERRED TAX ASSETS—NET			172.1			6.9			148.1			(166.8)			160.3
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES			6,755.0			2,129.6			—			(8,884.6)			—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES			8.8			37.8			344.9			—			391.5
GOODWILL			—			3,392.7			2,513.8			—			5,906.5
INTANGIBLE ASSETS—NET			—			183.8			71.4			—			255.2
OTHER NON-CURRENT ASSETS			32.2			44.3			129.9			—			206.4
TOTAL ASSETS		$	8,315.2		$	9,266.5		$	7,639.5		$	(10,426.0)		$	14,795.2

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt		$	14.9		$	—		$	30.0		$	—		$	44.9
Accounts payable			29.7			1,604.8			975.4			—			2,609.9
Accrued expenses and other current liabilities			105.0			875.8			1,177.1			—			2,157.9
Income taxes payable			16.7			—			26.7			—			43.4
Intercompany payable			117.1			859.9			597.5			(1,574.5)			—
Contract liabilities			—			307.8			662.1			—			969.9
Current portion of long-term debt			43.6			14.0			57.1			—			114.7
TOTAL CURRENT LIABILITIES			327.0			3,662.3			3,525.9			(1,574.5)			5,940.7
OTHER LONG-TERM LIABILITIES			118.3			241.9			338.8			—			699.0
DEFERRED TAX LIABILITY—NET			—			63.1			108.9			(166.8)			5.2
NOTE PAYABLE INTERCOMPANY—NON CURRENT			817.3			—			462.7			(1,280.0)			—
LONG-TERM DEBT			2,821.7			289.6			542.0			—			3,653.3
TOTAL LIABILITIES			4,084.3			4,256.9			4,978.3			(3,021.3)			10,298.2
TOTAL AECOM STOCKHOLDERS’ EQUITY			4,230.9			5,009.6			2,467.2			(7,404.7)			4,303.0
Noncontrolling interests			—			—			194.0			—			194.0
TOTAL STOCKHOLDERS’ EQUITY			4,230.9			5,009.6			2,661.2			(7,404.7)			4,497.0
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	8,315.2		$	9,266.5		$	7,639.5		$	(10,426.0)		$	14,795.2

Condensed Consolidating Balance Sheets

(in millions)

September 30, 2018


					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents		$	22.0		$	270.9		$	593.8		$	—		$	886.7
Accounts receivable and contract assets—net			—			2,544.7			2,924.1			—			5,468.8
Intercompany receivable			951.1			84.9			157.9			(1,193.9)			—
Prepaid expenses and other current assets			52.9			331.6			200.7			—			585.2
Current assets held for sale			—			—			59.8			—			59.8
Income taxes receivable			84.6			—			42.2			—			126.8
TOTAL CURRENT ASSETS			1,110.6			3,232.1			3,978.5			(1,193.9)			7,127.3
PROPERTY AND EQUIPMENT—NET			202.6			217.3			194.2			—			614.1
DEFERRED TAX ASSETS—NET			134.0			—			150.0			(124.6)			159.4
INVESTMENTS IN CONSOLIDATED SUBSIDIARIES			6,364.1			1,912.0			—			(8,276.1)			—
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES			13.4			49.6			247.7			—			310.7
GOODWILL			—			3,392.7			2,528.4			—			5,921.1
INTANGIBLE ASSETS—NET			—			218.6			101.3			—			319.9
OTHER NON-CURRENT ASSETS			49.9			45.6			133.1			—			228.6
TOTAL ASSETS		$	7,874.6		$	9,067.9		$	7,333.2		$	(9,594.6)		$	14,681.1

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt		$	8.4		$	—		$	—		$	—		$	8.4
Accounts payable			53.6			1,616.7			1,055.7			—			2,726.0
Accrued expenses and other current liabilities			58.8			1,035.6			1,172.7			—			2,267.1
Income taxes payable			10.4			—			29.4			—			39.8
Intercompany payable			105.5			830.8			416.9			(1,353.2)			—
Contract liabilities			1.5			316.1			613.8			—			931.4
Current liabilities held for sale			—			—			22.3			—			22.3
Current portion of long-term debt			43.3			27.0			64.4			—			134.7
TOTAL CURRENT LIABILITIES			281.5			3,826.2			3,375.2			(1,353.2)			6,129.7
OTHER LONG-TERM LIABILITIES			131.6			249.0			361.5			—			742.1
DEFERRED TAX LIABILITY—NET			—			63.1			108.9			(124.7)			47.3
NOTE PAYABLE INTERCOMPANY—NON CURRENT			800.9			—			487.5			(1,288.4)			—
LONG-TERM DEBT			2,627.8			291.4			564.5			—			3,483.7
TOTAL LIABILITIES			3,841.8			4,429.7			4,897.6			(2,766.3)			10,402.8
TOTAL AECOM STOCKHOLDERS’ EQUITY			4,032.8			4,638.2			2,250.1			(6,828.3)			4,092.8
Noncontrolling interests			—			—			185.5			—			185.5
TOTAL STOCKHOLDERS’ EQUITY			4,032.8			4,638.2			2,435.6			(6,828.3)			4,278.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	7,874.6		$	9,067.9		$	7,333.2		$	(9,594.6)		$	14,681.1

Condensed Consolidating Statements of Operations

(unaudited - in millions)


		For the three months ended June 30, 2019
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Revenue		$	—		$	2,670.0		$	2,324.2		$	(14.0)		$	4,980.2
Cost of revenue			—			2,618.7			2,166.3			(14.0)			4,771.0
Gross profit			—			51.3			157.9			—			209.2
Equity in earnings from subsidiaries			149.5			125.7			—			(275.2)			—
Equity in earnings of joint ventures			—			0.6			28.0			—			28.6
General and administrative expenses			(36.0)			—			(1.5)			—			(37.5)
Loss on disposal activities			—			—			(7.4)			—			(7.4)
Income from operations			113.5			177.6			177.0			(275.2)			192.9
Other income			1.5			11.3			6.5			(14.5)			4.8
Interest expense			(50.9)			(5.2)			(14.1)			14.5			(55.7)
Income before income tax (benefit) expense			64.1			183.7			169.4			(275.2)			142.0
Income tax (benefit) expense			(19.7)			34.7			21.6			—			36.6
Net income			83.8			149.0			147.8			(275.2)			105.4
Noncontrolling interests in income of consolidated subsidiaries, net of tax			—			—			(21.7)			—			(21.7)
Net income attributable to AECOM		$	83.8		$	149.0		$	126.1		$	(275.2)		$	83.7


		For the three months ended June 30, 2018
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Revenue		$	—		$	2,818.1		$	2,356.8		$	(26.9)		$	5,148.0
Cost of revenue			—			2,731.8			2,257.9			(26.9)			4,962.8
Gross profit			—			86.3			98.9			—			185.2
Equity in earnings from subsidiaries			84.8			40.8			—			(125.6)			—
Equity in earnings of joint ventures			—			6.9			5.9			—			12.8
General and administrative expenses			(31.4)			—			(3.7)			—			(35.1)
Loss on disposal activities			—			—			(2.1)			—			(2.1)
Income from operations			53.4			134.0			99.0			(125.6)			160.8
Other income			0.4			9.6			3.2			(10.5)			2.7
Interest expense			(49.0)			(5.6)			(11.2)			10.5			(55.3)
Income before income tax (benefit) expense			4.8			138.0			91.0			(125.6)			108.2
Income tax (benefit) expense			(56.1)			54.5			34.7			—			33.1
Net income			60.9			83.5			56.3			(125.6)			75.1
Noncontrolling interest in income of consolidated subsidiaries, net of tax			—			—			(14.2)			—			(14.2)
Net income attributable to AECOM		$	60.9		$	83.5		$	42.1		$	(125.6)		$	60.9

Condensed Consolidating Statements of Operations

(unaudited - in millions)


		For the nine months ended June 30, 2019
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Revenue		$	—		$	8,097.7		$	7,021.1		$	(61.1)		$	15,057.7
Cost of revenue			—			7,824.7			6,718.9			(61.1)			14,482.5
Gross profit			—			273.0			302.2			—			575.2
Equity in earnings from subsidiaries			465.3			223.8			—			(689.1)			—
Equity in earnings of joint ventures			—			2.9			64.1			—			67.0
General and administrative expenses			(105.9)			—			(4.9)			—			(110.8)
Restructuring costs			(79.2)			—			—			—			(79.2)
Loss on disposal activities			—			—			(7.4)			—			(7.4)
Income from operations			280.2			499.7			354.0			(689.1)			444.8
Other income			3.8			35.7			15.4			(42.2)			12.7
Interest expense			(152.7)			(15.8)			(43.3)			42.2			(169.6)
Income before income tax (benefit) expense			131.3			519.6			326.1			(689.1)			287.9
Income tax (benefit) expense			(81.9)			63.8			42.0			—			23.9
Net income			213.2			455.8			284.1			(689.1)			264.0
Noncontrolling interests in income of consolidated subsidiaries, net of tax			—			—			(50.9)			—			(50.9)
Net income attributable to AECOM		$	213.2		$	455.8		$	233.2		$	(689.1)		$	213.1


		For the nine months ended June 30, 2018
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Revenue		$	—		$	8,230.1		$	6,688.3		$	(68.7)		$	14,849.7
Cost of revenue			—			7,950.0			6,505.8			(68.7)			14,387.1
Gross profit			—			280.1			182.5			—			462.6
Equity in earnings from subsidiaries			272.7			103.8			—			(376.5)			—
Equity in earnings of joint ventures			—			30.9			24.7			—			55.6
General and administrative expenses			(90.8)			—			(9.2)			—			(100.0)
Impairment of assets held for sale, including goodwill			—			—			(168.2)			—			(168.2)
Loss on disposal activities			—			—			(2.1)			—			(2.1)
Income from operations			181.9			414.8			27.7			(376.5)			247.9
Other income			10.8			20.1			9.9			(23.3)			17.5
Interest expense			(194.3)			(14.5)			(26.5)			23.3			(212.0)
(Loss) income before income tax (benefit) expense			(1.6)			420.4			11.1			(376.5)			53.4
Income tax (benefit) expense			(54.1)			149.4			(133.7)			—			(38.4)
Net income			52.5			271.0			144.8			(376.5)			91.8
Noncontrolling interest in income of consolidated subsidiaries, net of tax			—			—			(39.3)			—			(39.3)
Net income attributable to AECOM		$	52.5		$	271.0		$	105.5		$	(376.5)		$	52.5

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)


		For the three months ended June 30, 2019
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net income		$	83.8		$	149.0		$	147.8		$	(275.2)		$	105.4
Other comprehensive (loss) income, net of tax:
Net unrealized loss on derivatives, net of tax			(2.6)			—			(0.9)			—			(3.5)
Foreign currency translation adjustments			—			—			(6.1)			—			(6.1)
Pension adjustments, net of tax			0.7			—			1.7			—			2.4
Other comprehensive (loss) income, net of tax			(1.9)			—			(5.3)			—			(7.2)
Comprehensive income, net of tax			81.9			149.0			142.5			(275.2)			98.2
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax			—			—			(21.9)			—			(21.9)
Comprehensive income attributable to AECOM, net of tax		$	81.9		$	149.0		$	120.6		$	(275.2)		$	76.3


		For the three months ended June 30, 2018
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net income		$	60.9		$	83.5		$	56.3		$	(125.6)		$	75.1
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax			0.9			—			(0.2)			—			0.7
Foreign currency translation adjustments			—			—			(67.2)			—			(67.2)
Pension adjustments, net of tax			0.3			—			14.8			—			15.1
Other comprehensive income (loss), net of tax			1.2			—			(52.6)			—			(51.4)
Comprehensive income , net of tax			62.1			83.5			3.7			(125.6)			23.7
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax			—			—			(14.0)			—			(14.0)
Comprehensive income (loss) attributable to AECOM, net of tax		$	62.1		$	83.5		$	(10.3)		$	(125.6)		$	9.7

Consolidating Statements of Comprehensive Income (Loss)

(unaudited - in millions)


		For the nine months ended June 30, 2019
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net income		$	213.2		$	455.8		$	284.1		$	(689.1)		$	264.0
Other comprehensive loss, net of tax:
Net unrealized loss on derivatives, net of tax			(6.7)			—			(7.2)			—			(13.9)
Foreign currency translation adjustments			—			—			(5.1)			—			(5.1)
Pension adjustments, net of tax			2.1			(1.2)			3.4			—			4.3
Other comprehensive loss, net of tax			(4.6)			(1.2)			(8.9)			—			(14.7)
Comprehensive income, net of tax			208.6			454.6			275.2			(689.1)			249.3
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax			—			—			(51.3)			—			(51.3)
Comprehensive income attributable to AECOM, net of tax		$	208.6		$	454.6		$	223.9		$	(689.1)		$	198.0


		For the nine months ended June 30, 2018
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net income		$	52.5		$	271.0		$	144.8		$	(376.5)		$	91.8
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on derivatives, net of tax			1.5			—			(1.7)			—			(0.2)
Foreign currency translation adjustments			—			—			(57.7)			—			(57.7)
Pension adjustments, net of tax			1.8			—			(0.3)			—			1.5
Other comprehensive income (loss), net of tax			3.3			—			(59.7)			—			(56.4)
Comprehensive income, net of tax			55.8			271.0			85.1			(376.5)			35.4
Noncontrolling interests in comprehensive income of consolidated subsidiaries, net of tax			—			—			(40.5)			—			(40.5)
Comprehensive income (loss) attributable to AECOM, net of tax		$	55.8		$	271.0		$	44.6		$	(376.5)		$	(5.1)

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)


		For the nine months ended June 30, 2019
								Non-
					Guarantor			Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total

CASH FLOWS FROM OPERATING ACTIVITIES		$	(31.5)		$	116.7		$	(101.3)		$	—		$	(16.1)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of business, net of cash disposed			—			—			37.4			—			37.4
Net investment in unconsolidated joint ventures			(3.1)			(12.3)			(85.3)			—			(100.7)
Net proceeds from sale of investments			—			—			8.8			—			8.8
Payments for capital expenditures, net of disposals			(30.7)			(17.4)			(21.0)			—			(69.1)
Net (investment in) receipts from intercompany notes			(12.1)			7.7			(27.7)			32.1			—
Other intercompany investing activities			(96.6)			(48.2)			—			144.8			—
Net cash used in investing activities			(142.5)			(70.2)			(87.8)			176.9			(123.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements			6,279.3			—			117.2			—			6,396.5
Repayments of borrowings under credit agreements			(6,107.1)			(24.8)			(131.1)			—			(6,263.0)
Proceeds from issuance of common stock			24.4			—			—			—			24.4
Payments to repurchase common stock			(82.7)			—			—			—			(82.7)
Net distributions to noncontrolling interests			—			—			(58.8)			—			(58.8)
Other financing activities			21.2			(6.7)			15.6			—			30.1
Net borrowings (repayments) on intercompany notes			20.0			24.8			(12.7)			(32.1)			—
Other intercompany financing activities			—			(56.0)			200.8			(144.8)			—
Net cash provided by (used in) financing activities			155.1			(62.7)			131.0			(176.9)			46.5
EFFECT OF EXCHANGE RATE CHANGES ON CASH			—			—			0.1			—			0.1
NET DECREASE IN CASH AND CASH EQUIVALENTS			(18.9)			(16.2)			(58.0)			—			(93.1)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR			22.0			270.9			593.8			—			886.7
CASH AND CASH EQUIVALENTS AT END OF YEAR		$	3.1		$	254.7		$	535.8		$	—		$	793.6

Condensed Consolidating Statements of Cash Flows

(unaudited - in millions)


		For the nine months ended June 30, 2018
								Non-
					Guarantor			Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total

CASH FLOWS FROM OPERATING ACTIVITIES		$	(59.9)		$	257.3		$	45.3		$	—		$	242.7
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
Proceeds from disposal of business, net of cash disposed			—			—			19.5			—			19.5
Net investment in unconsolidated joint ventures			(5.2)			(9.4)			(48.7)			—			(63.3)
Net payments for purchase of investments			—			—			(17.5)			—			(17.5)
Payments for capital expenditures, net of disposals			(19.8)			(34.2)			(11.6)			—			(65.5)
Net investment in intercompany notes			(85.4)			(545.3)			(73.8)			704.5			—
Other intercompany investing activities			109.9			504.9			—			(614.8)			—
Net cash used in investing activities			(0.5)			(84.0)			(122.3)			89.7			(117.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under credit agreements			6,701.2			—			737.9			—			7,439.1
Repayments of borrowings under credit agreements			(6,509.5)			(14.0)			(131.4)			—			(6,654.9)
Redemption of unsecured senior notes			(800.0)			—			—			—			(800.0)
Prepayment premium on redemption of unsecured senior notes			(34.5)			—			—			—			(34.5)
Cash paid for debt issuance costs			(10.7)			—			—			—			(10.7)
Proceeds from issuance of common stock			27.3			—			—			—			27.3
Proceeds from exercise of stock options			3.2			—			—			—			3.2
Payments to repurchase common stock			(29.3)			—			—			—			(29.3)
Net distributions to noncontrolling interests			—			—			(72.7)			—			(72.7)
Other financing activities			8.8			(26.6)			26.5			—			8.7
Net borrowings (repayments) on intercompany notes			673.3			(4.8)			36.0			(704.5)			—
Other intercompany financing activities			—			(80.0)			(534.8)			614.8			—
Net cash provided by (used in) financing activities			29.8			(125.4)			61.5			(89.7)			(123.8)
EFFECT OF EXCHANGE RATE CHANGES ON CASH			—			—			(2.8)			—			(2.8)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS			(30.6)			47.9			(18.3)			—			(1.0)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR			32.6			254.9			514.9			—			802.4
CASH AND CASH EQUIVALENTS AT END OF YEAR		$	2.0		$	302.8		$	496.6		$	—		$	801.4