SEC Filings

10-Q
AECOM filed this Form 10-Q on 02/06/2019
Entire Document
 

Table of Contents

 

Guaranteed Maximum Price Contracts (GMP)

 

GMP contracts share many of the same contract provisions as cost-plus and fixed-price contracts. As with cost-plus contracts, clients are provided a disclosure of all the project costs, and a lump sum or percentage fee is separately identified. The Company provides clients with a guaranteed price for the overall project (adjusted for change orders issued by clients) and a schedule including the expected completion date. Cost overruns or costs associated with project delays in completion could generally be the Company’s responsibility. For many of the Company’s commercial or residential GMP contracts, the final price is generally not established until the Company has subcontracted a substantial percentage of the trade contracts with terms consistent with the master contract, and it has negotiated additional contractual limitations, such as waivers of consequential damages as well as aggregate caps on liabilities and liquidated damages. Revenue is recognized for GMP contracts as project costs are incurred relative to total estimated project costs.

 

Fixed-Price Contracts

 

Fixed price contracts include both lump-sum and fixed-unit price contracts. Under lump-sum contracts, the Company performs all the work under the contract for a specified fee. Lump-sum contracts are typically subject to price adjustments if the scope of the project changes or unforeseen conditions arise. Under fixed-unit price contracts, the Company performs a number of units of work at an agreed price per unit with the total payment under the contract determined by the actual number of units delivered. Revenue is recognized for fixed-price contracts using the input method measured on a cost-to-cost basis.

 

The following tables present the Company’s revenues disaggregated by revenue sources:

 

 

 

Three months ended

 

 

 

December 31,
2018

 

December 31,
2017

 

 

 

(in millions)

 

Cost reimbursable

 

$

2,571.6

 

$

2,357.2

 

Guaranteed maximum price

 

1,024.0

 

1,178.6

 

Fixed price

 

1,441.9

 

1,375.0

 

Total revenue

 

$

5,037.5

 

$

4,910.8

 

 

 

 

Three months ended

 

 

 

December 31,
2018

 

December 31,
2017

 

 

 

(in millions)

 

Americas

 

$

4,070.4

 

$

3,928.6

 

Europe, Middle East, Africa

 

550.1

 

589.3

 

Asia Pacific

 

417.0

 

392.9

 

Total revenue

 

$

5,037.5

 

$

4,910.8

 

 

Revenues in Europe, Middle East, Africa and Asia Pacific are primarily reported in the Company’s DCS segment. As of December 31, 2018, the Company had allocated $20.1 billion of transaction price to unsatisfied or partially satisfied performance obligations, of which approximately 60% is expected to be satisfied within the next twelve months.

 

The Company’s timing of revenue recognition may not be consistent with its rights to bill and collect cash from its clients. Those rights are generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of work or when services are performed. The Company’s accounts receivable represent amounts billed to clients that have yet to be collected and represent an unconditional right to cash from its clients. Contract assets represent the amount of contract revenue recognized but not yet billed pursuant to contract terms or accounts billed after the balance sheet date. Contract liabilities represent billings as of the balance sheet date, as allowed under the terms of a contract, but not yet recognized as contract revenue pursuant to the Company’s revenue recognition policy.

 

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