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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

OR

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

For the transition period from                       to                     

Commission File Number 0-52423

AECOM TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

555 South Flower Street, Suite 3700

Los Angeles, California 90071

(Address of principal executive office and zip code)

(213) 593-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

As of August 3, 2009, 110,319,673 shares of the registrant’s common stock were outstanding.

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AECOM TECHNOLOGY CORPORATION

INDEX

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PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

AECOM Technology Corporation

Condensed Consolidated Balance Sheets

(in thousands, except share data)

See accompanying Notes to Condensed Consolidated Financial Statements.

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AECOM Technology Corporation

Condensed Consolidated Statements of Income

(unaudited - in thousands, except per share data)

See accompanying Notes to Condensed Consolidated Financial Statements.

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AECOM Technology Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited—in thousands)

See accompanying Notes to Condensed Consolidated Financial Statements.

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AECOM Technology Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited - in thousands)

See accompanying Notes to Condensed Consolidated Financial Statements.

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AECOM Technology Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited)

1.              Basis of Presentation

The accompanying condensed consolidated financial statements of AECOM Technology Corporation (the Company), in the opinion of management, include all adjustments necessary for a fair statement of the Company’s financial position and results of operations for the periods presented.  All inter-company balances and transactions are eliminated in consolidation.

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K/A for the fiscal year ended September 30, 2008.

The results of operations for the nine months ended June 30, 2009 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2009.

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

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to applicable Securities and Exchange Commission rules and regulations.

2.              Public Offering of Common Stock

In March 2009, the Company sold 4.6 million shares of its common stock in a public offering at a price per share of $20.20, for proceeds of approximately $91.6 million, net of underwriters’ discounts and offering costs.

3.              Adoption of New Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 165, “Subsequent Events” (SFAS 165).  Prior to SFAS 165, the authoritative guidance for subsequent events was previously addressed only in U.S. auditing standards.  SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued and requires the Company to disclose the date through which it has evaluated subsequent events and whether that was the date the financial statements were issued or available to be issued.  SFAS 165 does not apply to subsequent events or transactions that are within the scope of other applicable GAAP that provide different guidance on the accounting treatment for subsequent events or transactions.  SFAS 165 became effective for the Company on June 30, 2009 and its adoption did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position No. 107-1 and APB Opinion No. 28-1 (“FSP 107-1 and APB 28-1”), “Interim Disclosures about Fair Value of Financial Instruments.”  FSP 107-1 and APB 28-1 require fair value disclosures in both interim, as well as annual, financial statements in order to provide more timely information about the effects of current market conditions on financial instruments.  FSP 107-1 and APB 28-1 became effective for the Company in the quarter ended June 30, 2009, and their adoption did not have a material impact on the Company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” (SFAS 161), which is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand the effects of such instruments and activities on an entity’s financial position, financial performance and cash flows.  SFAS 161 was effective for the Company beginning on January 1, 2009.  The adoption of SFAS 161 did not have a material impact on the Company’s consolidated financial statements.

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The Company utilizes derivative instruments to manage interest rate risk associated with its outstanding borrowings under the Company’s revolving credit facility.  The Company’s pay-fixed interest rate swaps are designated and qualify as cash flow hedges in accordance with the associated criteria in SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133).  Accordingly, the Company’s swaps are recorded at fair value on the balance sheet, and the effective portion of changes in the fair value of the swaps, measured quarterly, is reported in other comprehensive income, net of tax.  As of June 30, 2009, four swaps were outstanding, each in a liability position, and recorded in accrued expenses and other long-term liabilities on the balance sheet.

The change in fair value related to the swaps included in other comprehensive income/(loss) for the nine months ended June 30, 2009 was $(1.3) million, net of tax.  The Company expects that substantially all amounts recorded in other comprehensive income will be recorded as interest expense over the next twelve months.  The total of these derivative liabilities as of June 30, 2009 was $2.6 million, as discussed below.  The expiration dates and fixed rates of the swap agreements are as follows:

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.  SFAS 157 was effective for the Company on October 1, 2008 for all non-pension financial assets and liabilities and for nonfinancial assets and liabilities recognized or disclosed at fair value in its consolidated financial statements on a recurring basis (at least annually).  For pension and all other nonfinancial assets and liabilities, SFAS 157 is effective for the Company on October 1, 2009.

As it relates to its non-pension financial assets and liabilities and for nonfinancial assets and liabilities recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually), the adoption of SFAS 157 did not have a material impact on the Company’s consolidated financial statements.  The Company is still in the process of evaluating the impact that SFAS 157 will have on its pension related financial assets and liabilities and its other nonfinancial assets and liabilities.

The following table summarizes the Company’s non-pension financial assets and liabilities measured at fair value on a recurring basis (at least annually) as of June 30, 2009 (in millions):

As of September 30, 2007, the Company adopted certain provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158).  SFAS 158 has an additional requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position, effective for the Company’s fiscal year ending September 30, 2009.  In the first quarter of fiscal 2009, the Company changed its measurement date for the defined benefit pension plans to correspond to its fiscal year-end and recorded a charge to beginning retained earnings of $2.7 million, net of tax, for the impact of the cumulative difference in the Company’s pension expense between the two measurement dates.

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In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159).  SFAS 159 allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (“fair value option”).  The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs as described under SFAS 159.  If the fair value option is elected for an instrument, SFAS 159 specifies that unrealized gains and losses for that instrument be reported in earnings at each subsequent reporting date.  SFAS 159 was effective for the Company on October 1, 2008.  The Company did not apply the fair value option to any of its outstanding instruments and, therefore, SFAS 159 did not have an impact on the Company’s consolidated financial statements.

4.               Recently Issued Accounting Pronouncements

In June 2009, the FASB issued Statement of SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167).  SFAS 167 amends FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” by replacing the quantitative-based risks and rewards calculation for determining the primary beneficiary of a variable interest entity with a qualitative approach that focuses on identifying which enterprise has a controlling financial interest in a variable interest entity.  The primary beneficiary of a variable interest entity has both the: (1) power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (2) obligation to absorb losses or the right to receive benefits from the variable interest entity.  Additionally, this standard requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity.  SFAS 167 also requires enhanced disclosures that will provide users of financial statements more transparent information about an enterprise’s involvement in a variable interest entity.  SFAS 167 is effective for the Company on October 1, 2010.  The Company is currently evaluating the impact SFAS 167 on its financial statements.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” (SFAS 168).  SFAS 168 establishes the FASB Accounting Standards Codification as the recognized source of authoritative accounting principles to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  SFAS 168 is effective for the Company for the interim period ending September 30, 2009.  SFAS 168 does not change GAAP and will not have a material impact on the Company’s consolidated financial statements.

In April 2008, the FASB issued Staff Position No. 142-3, “Determination of the Useful Life of Intangible Assets” (FSP 142-3).  FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142.  FSP 142-3 is effective for the Company as of October 1, 2009.  The Company is currently evaluating the impact FSP 142-3 may have on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (SFAS 141R).  SFAS 141R significantly changes the way companies account for business combinations and will generally require more assets acquired and liabilities assumed to be measured at their acquisition-date fair value.  Under SFAS 141R, legal fees and other transaction-related costs are expensed as incurred and are no longer included in goodwill as a cost of acquiring the business.  SFAS 141R also requires, among other things, acquirers to estimate the acquisition-date fair value of any contingent consideration and to recognize any subsequent changes in the fair value of contingent consideration in earnings.  In addition, restructuring costs the acquirer expected, but was not obligated to incur, such as costs to exit an activity or terminate or relocate employees, will be recognized as post-combination costs separately from the business acquisition.  This accounting standard is effective beginning October 1, 2009.  The Company is currently evaluating the impact of SFAS 141R on its financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (SFAS 160).  SFAS 160 requires all entities to report noncontrolling interests in subsidiaries as a separate component of equity in the consolidated financial statements.  SFAS 160 establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation.  Under SFAS 160, companies will no longer recognize a gain or loss on partial disposals of a subsidiary where control is retained.  In addition, in partial acquisitions, where control is obtained, the acquiring company will recognize and measure at fair value 100 percent of the assets and liabilities, including goodwill, as if the entire target company had been acquired.  SFAS 160 is effective beginning October 1, 2009.  The Company is currently evaluating the impact of SFAS 160 on its financial statements.

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5.               Business Acquisitions

On July 25, 2008, the Company completed the acquisition of the Earth Tech business unit of Tyco International Ltd. (Earth Tech), pursuant to a Purchase Agreement (Purchase Agreement) dated as of February 11, 2008, by and among the Company, Tyco International Finance, S.A. and other seller parties thereto.  Earth Tech provides a broad range of technical and consulting services, including architecture, engineering, and design and build services to water/wastewater, environmental, transportation, and facilities clients globally.  The Company acquired Earth Tech to increase its global presence, particularly in the Americas, Europe and Australia.  This acquisition also strengthened the Company’s water and wastewater business, while augmenting its leadership position in the environmental, facilities and transportation sectors.  The total purchase price for Earth Tech, net of proceeds from non-strategic Earth Tech businesses sold to date of $112 million, as described in Note 6 below, was approximately $354 million, in cash.  This total purchase price does not include the proceeds from the planned divestitures of certain Earth Tech assets being held for sale.  See also Note 6.  No gain or loss resulted from the sales of Earth Tech operations since they were sold for amounts that materially approximated their fair values at the acquisition date.  Goodwill related to Earth Tech is partially due to the fact that the values inherent in professional services businesses are largely attributable to existing human capital.

The table below presents summarized unaudited pro forma operating results assuming that the Company had acquired Earth Tech at the beginning of the fiscal year ended September 30, 2008 (in millions, except per share data).  Other acquisitions completed during the periods presented were not material.

During the quarter ended June 30, 2009, the Company completed acquisitions for an aggregate purchase price of $20.8 million in cash, $6.0 million in promissory notes, and $12.4 million in stock.

6.              Discontinued Operations

As part of the July 2008 acquisition of Earth Tech into its Professional Technical Services segment, the Company acquired certain non-strategic businesses that it intends to divest.  Concurrent with the close of the purchase of Earth Tech, the Company divested Earth Tech’s Water & Power Technologies and North American Contract Operations businesses and Earth Tech’s Mexican operations.  Additionally, the Company divested Earth Tech’s Swedish business in September 2008, certain assets of the U.K. business in May 2009 and intends to divest certain international businesses and non-strategic contracts in the U.S. and Canada.  As a result, certain international businesses and non-strategic contracts in the U.S. and Canada have been segregated from continuing operations and presented as discontinued operations in the accompanying Consolidated Statements of Income and Cash Flows and as held for sale in the accompanying Consolidated Balance Sheet in accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

For the three and nine months ended June 30, 2009, the summarized results of the discontinued operations, included in the Company’s results of operations, are as follows (in millions):

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Pursuant to Amendment No. 2 to the Purchase Agreement of Earth Tech, by and among the Company, Tyco International Finance, S.A. and other seller parties thereto, the parties agreed to, among other things, delay the legal transfer of Earth Tech’s U.K. businesses to the Company until certain third party consents to the transaction were obtained.  In May 2009, the Company received the consents and legal ownership of the U.K. businesses, and has divested and intends to divest certain of the assets (UK Assets) of the U.K. businesses.  No gain or loss resulted from the sales of UK Assets since they were sold for amounts that materially approximated their fair values at the acquisition date.  The remaining unsold UK Assets have been segregated from continuing operations and presented as discontinued operations in the accompanying Consolidated Statements of Income and of Cash Flows and as held for sale in the accompanying Consolidated Balance Sheet for all periods presented.  Accordingly, $0.7 million of income from continuing operations before taxes was reclassified to discontinued operations, net of tax, during fiscal 2009.  On the Consolidated Balance Sheet, the Company reclassified $78.0 million and $87.3 million of assets to assets held for sale, and $52.4 million and $62.3 million of liabilities to liabilities held for sale as of June 30, 2009 and September 30, 2008, respectively.

7.              Accounts Receivable—Net

Net accounts receivable consisted of the following as of June 30, 2009 and September 30, 2008:

Billed accounts receivable represent amounts billed to clients that have yet to be collected.  Unbilled accounts receivable represent revenue recognized but not yet billed pursuant to contract terms or accounts billed after the period end.  Substantially all unbilled receivables as of June 30, 2009 and September 30, 2008 are expected to be billed and collected within twelve months of such date.  Contract retentions represent amounts invoiced to clients where payments have been withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project.  These retention agreements vary from project to project and could be outstanding for several months or years.

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

Other than the U.S. government, no single client accounted for more than 10% of the Company’s accounts receivable as of June 30, 2009 or September 30, 2008.

8.              Goodwill and Acquired Intangible Assets

The changes in the carrying value of goodwill by reporting segment for the nine months ended June 30, 2009 were as follows:

Post-acquisition adjustments to goodwill in part relate to additional consideration paid for businesses as a result of finalizing working capital adjustments.  In addition, in connection with the Earth Tech acquisition, the Company began to formulate plans at the date of acquisition for workforce reductions and facility closures.  The Company has substantially completed post acquisition procedures relating to the plans for facilities and severance liabilities.  The Company is in the process of finalizing its project related liabilities. Earth Tech is described in Note 5 above. 

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The following table presents, in millions, post-acquisition adjustments recorded in the current year:

The following table summarizes activity relating to severance and facility purchase accounting liabilities for Earth Tech during the nine months ended June 30, 2009:

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of June 30, 2009 and September 30, 2008, included in intangible assets—net in the accompanying condensed consolidated balance sheets, were as follows:

At the time of acquisition, the Company preliminarily estimates the amount of the identifiable intangible assets acquired based upon historical valuations and the facts and circumstances available at the time.  The Company determines the value of the identifiable intangible assets as soon as possible, but not more than 12 months from the date of the acquisition.

The following table presents, in thousands, estimated amortization expense of existing intangible assets for the remainder of fiscal 2009 and for the succeeding years:

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9.              Disclosures About Pension Benefit Obligations

The following table details the components of net periodic benefit cost for the plans for the three and nine months ended June 30, 2009 and 2008:

The total amounts of employer contributions paid for the nine months ended June 30, 2009 were $6.0 million for U.S. plans and $11.8 million for non-U.S. plans.  The expected remaining scheduled annual employer contributions for fiscal year ending September 30, 2009 are $1.1 million for U.S. plans and $6.1 million for non-U.S. plans.  Included in other long-term liabilities are net pension liabilities of $97.8 and $116.3 million as of June 30, 2009 and September 30, 2008, respectively.

10.       Other Financial Information

The components of accumulated other comprehensive loss are as follows:

Accrued expenses consist of the following:

Accrued contract costs above include balances related to professional liability risks of $98.4 and $84.2 million as of June 30, 2009 and September 30, 2008, respectively.

11.       Reportable Segments

The Company’s operations are organized into two reportable segments: Professional Technical Services and Management Support Services.  This segmentation corresponds to how the Company manages its business as well as the underlying characteristics of its markets.

Management internally analyzes the results of its operations using several non-GAAP measures.  One such measure is revenue, net of other direct costs.  A significant portion of the Company’s revenue relates to services provided by subcontractors and other non-employees that it categorizes as other direct costs.  Other direct costs are segregated from cost of revenue resulting in revenue, net of other direct costs, which is a measure of work performed by Company employees.  The Company has included information on revenue, net of other direct costs, as it believes that it provides a valuable perspective on its results of operations.

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