Aecom (ACM) risk factors, FY2024 10-K

Risks Related to Our Markets, Customers and Business

1. 01Our industry is highly competitive, and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share
2. 02Our ability to compete in our industry will be harmed if we do not retain the continued services of our senior management and key technical personnel
3. 03Demand for our services is cyclical and vulnerable to sudden economic downturns and reductions in government and private industry spending. If economic conditions remain uncertain and/or weaken, our revenue and profitability could be adversely affected
4. 04A substantial portion of our revenue is derived from contracts with agencies and departments of national, state, and local governments. During fiscal 2024 and 2023, approximately 46% and 43%, respectively, of our revenue was derived from contracts with government entities
5. 05If we are unable to win or renew government contracts during regulated procurement processes, our operations and financial results would be harmed
6. 06Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue
7. 07Our contracts with governmental agencies are subject to audit, which could result in adjustments to reimbursable contract costs or, if we are charged with wrongdoing, possible temporary or permanent suspension from participating in government programs

Risks Related to our Capital Structure

1. 08The agreements governing our debt contain a number of restrictive covenants which will limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest
2. 09Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
3. 10If we are unable to continue to access credit on acceptable terms, our business may be adversely affected

Risks Related to our International Operations

1. 11Our operations worldwide expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations and impacts from inflation that could harm our business and financial results
2. 12We operate in many different jurisdictions and we could be adversely affected by legislative actions of governments, as well as violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws
3. 13We work in international locations where there are high security risks, which could result in harm to our employees and contractors or material costs to us

Risks Related to Our Operations and Technology

1. 14Many of our project sites are inherently dangerous workplaces. Failure to maintain safe work sites and equipment could result in environmental disasters, employee deaths or injuries, reduced profitability, the loss of projects or clients and possible exposure to litigation
2. 15Cybersecurity threats, information technology systems outages and data privacy incidents could adversely harm our business

Risks Related to Contracts and Joint Ventures

1. 16Our business and operating results could be adversely affected by losses under fixed-price or guaranteed maximum price contracts
2. 17Our failure to meet contractual schedule or performance requirements that we have guaranteed could adversely affect our operating results
3. 18We may not be able to maintain adequate surety and financial capacity necessary for us to successfully bid on and win contracts
4. 19We conduct a portion of our operations through joint venture entities, over which we may have limited control
5. 20We participate in joint ventures where we provide guarantees and may be adversely impacted by the failure of the joint venture or its participants to fulfill their obligations
6. 21AECOM Capital’s real estate development and investment activities are inherently risky and may result in a future loss

Risks Related to Laws and Regulations

1. 22Misconduct by our employees, subcontractors, partners or consultants or our failure to comply with laws or regulations applicable to our business could cause us to lose customers or lose our ability to contract with government agencies
2. 23We may be subject to substantial liabilities under environmental laws and regulations

Risks Related to Climate Change

1. 24Climate change, natural disasters and related environmental issues could have a material adverse impact on us
2. 25There is a rapidly evolving awareness and focus from stakeholders with respect to environmental, social and governance practices, which could affect our business

Risks Related to Acquisitions and Divestitures

1. 26We may be unable to successfully execute or effectively integrate acquisitions and divestitures may not occur as planned
2. 27Our plans to divest businesses are subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated time frame, or at all, and will involve significant time and expense, which could disrupt or adversely affect our business

Other Risks

1. 28An impairment charge of goodwill could have a material adverse impact on our financial condition and results of operations
2. 29We may be required to contribute additional cash to meet our significant underfunded benefit obligations associated with pension benefit plans we manage or multiemployer pension plans in which we participate
3. 30We may experience disproportionately high levels of collection risk and nonpayment if clients in specific geographic areas or industries are adversely affected by factors particular to their geographic area or industry
4. 31Our services expose us to significant risks of liability and our insurance policies may not provide adequate coverage
5. 32Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations
6. 33If we do not have adequate indemnification for our services related to nuclear materials, it could adversely affect our business and financial condition
7. 34Our backlog of uncompleted projects under contract is subject to unexpected adjustments and cancellations and, thus may not accurately reflect future revenue and profits
8. 35From time to time, we submit claims to clients for work we performed beyond the initial scope of some of our contracts. If these clients do not approve these claims, our results of operations could be adversely impacted
9. 36In conducting our business, we depend on other contractors, subcontractors and equipment and material providers. If these parties fail to satisfy their obligations to us or other parties or if we are unable to maintain these relationships, our revenue, profitability and growth prospects could be adversely affected
10. 37If clients use our reports or other work product without appropriate disclaimers or in a misleading or incomplete manner, or if our reports or other work product are not in compliance with professional standards and other regulations, our business could be adversely affected
11. 38Failure to adequately protect, maintain, or enforce our rights in our intellectual property may adversely limit our competitive position
12. 39Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications we and they need to perform services for our customers
13. 40Negotiations with labor unions and possible work actions could divert management attention and disrupt operations. In addition, new collective bargaining agreements or amendments to agreements could increase our labor costs and operating expenses
14. 41Our charter documents contain provisions that may delay, defer or prevent a change of control
15. 42We cannot guarantee the timing, amount or payment of dividends
16. 43Changes in tax laws could increase our worldwide tax rate and materially affect our results of operations