SEC Comment Letter for AECOM (ACM) — Apr 8, 2009
AECOM
Date: April 8, 2009 · CIK: 0000868857 · Accession: 0000000000-09-018249
AI Filing Summary & Sentiment
File numbers found in text: 000-52423
Referenced dates: February 6, 2009, February 6, 2009, March 26, 2009
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-7010 DIVISION OF CORPORATION FINANCE Mail Stop 7010 April 7, 2009 via U.S. mail and facsimile John M. Dionis, Chief Executive Officer AECOM Technology Corp 555 South Flower Street, Suite 3700 Los Angeles, California 90071 RE: AECOM Technology Corp Form 10-K/A for the Fiscal Year Ended September 30, 2008 Filed January 23, 2009 Proxy Statement Filed January 23, 2008 File No. 000-52423
Dear Mr. Dionis: We have reviewed your response letter dated March 26, 2009 and have the following additional comments. Form 10-K for the Fiscal Year Ended September 30, 2008
Critical Accounting Policies, page 27
Goodwill, page 29
1. We note the additional disclosure you intend to include in future filings in response to comment 3 in our letter dated February 6, 2009. Specifically, you note that in the circumstances in wh ich the components of your operating segments have discrete financial info rmation you are able to aggregate those components because they have similar economic characteristics including the nature of the services provided, the internal processes for delivering those services, and the types of customers. Pleas e revise this disclosure to clarify which reporting unit has components with disc rete financial information, as you only have two reporting units. Please also revise your disclosure for this reporting unit to clarify that the components being a ggregated also have similar operating performance, if correct. If you are unab le to state that the components being aggregated have similar operating perfor mance, please provide us with your
Mr. Dionis AECOM Technology Corp April 7, 2009 Page 2 detailed analysis as to how you determ ined the components can be aggregated into one reporting unit. Refer to pa ragraphs 30-31 of SFAS 142 and EITF Topic D-101 for guidance.
2. We further note from the disclosure you intend to include in future filings in response to comment 3 in our letter dated February 6, 2009, your statement, “[a]lthough we have various operating companies, they have been aggregated into two operating segments for segment reporting purposes, in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information.” It is unclear to us what you mean by this statement. Please advise. In this regard, SFAS 131 does not contain guidance for aggregating operating businesses into operating segments. Rather, SFAS 131 provides guidance on aggregating operating segments into reportable segments for reporting purposes. We note that you have not provided disclosure regardi ng operating segments being aggregated into reportable segments in accordance with paragraph 26.a. of SFAS 131. Please confirm to us that your CODM does not receive financial information below your current operating/reportable segments. Otherwise, please provide us with a detailed analysis as to how you determ ined your operating segments are properly aggregated to the reportable segment le vel. Please also re-address paragraph 30 of SFAS 142 regarding the identification of your reporting units for purposes of testing goodwill for impairment.
3. Acquisitions, page 62
3. We note in your response to comment 11 in our letter dated February 6, 2009, that you assessed the materiality of your acquisitions for purposes of providing the disclosures required by SFAS 141 based on Rule 3-05 of Regulation S-X. The guidance in Rule 3-05 of Re gulation S-X is not meant to determine whether the disclosures in SFAS 141 are required. As such, please re-assess each of your acquisitions completed during each period presented to determine whether each acquisition is material based on the guid ance in FASB Concept Statement 2 and SAB Topic 1:M. If you determine other acq uisitions are material, please provide the disclosures required by paragraphs 51 and 52 of SFAS 142 for each material acquisition for each period presented. Please advise. 4. We have read your response to comment 11 in our letter dated February 6, 2009, and your proposed future disclosure. Please revise your proposed future disclosure to provide the condensed balance sheet di sclosing the amount assigned to each major asset and liability caption of Earth Tech as required by paragraph 51.e. of SFAS 141. 5. We note your response to comment 11 in our letter dated February 6, 2009, regarding your acquisitions that are individually immateri al but material in the aggregate. While we note that you intend to include a brief description of Boyle
Mr. Dionis AECOM Technology Corp April 7, 2009 Page 3 Engineering Corporation and Tecsult, Inc ., this disclosure does not fully comply with the all of the require ments in paragraph 53 of SFAS 141. In future filings, please provide all of the disclosures required by paragraph 53 of SFAS 141 for your acquisitions that are material in the aggregate for each period presented.
20. Commitments and Contingencies, page 88
6. We note your response to comment 16 in our letter dated February 6, 2009. As previously requested, please revise your disc losure in future filings to address the materiality of pending claims, guarantees, lit igation, audits and investigations to your cash flows in addition to your financ ial position and results of operations. As previously noted, if you believe y our pending claims, guarantees, litigation, audits and investigations could be materi al to your cash flows at the probable or reasonably possible thresholds, as defi ned in SFAS 5, please include specific disclosure of those loss contingencies in accordance with paragraphs 9-10 of SFAS 5. Proxy Statement
Compensation Discussion and Analysis, page 16
7. We note in your response to comments 18 and 21 in our letter dated February 6, 2009 that you believe disclosure of the corporate performance targets used to calculate incentive compensation would result in competitive harm. However, your response only addresses performance ta rgets for future periods rather than completed fiscal years, which is not applic able except as provided in Instruction 2 to Item 402(b) of Regulation S-K. Furt hermore, your response that disclosing target information could cause competitiv e harm could apply to many registrants. Note that under Item 402(b )(1)(v) of Regulation S-K, a filer must disclose how it determined the amount and formula for each element of compensation.
Please provide us your analysis that demonstrates that disclosing target information for previous fiscal years could cause competitive harm based on your particular facts and circumstances. E xplain to us in greater detail how competitors may gain insight into ho w the company intends to price your services. Also, explain to us how disclosing growth in EBITA, EBITA return on total invested capital, and EBITA per sh are would affect you differently than other companies who disclose these types of performance targets. We also note your response that target information may be viewed as projections and may cause confusion. However, in your fu ture MD&A and CD&A disclosure you should describe management’s strategi es, including the company’s growth strategies and bonus targets. It appears th at the bonus targets can be disclosed in a manner that will not incorrectly signal th e market about your goals and strategy
Mr. Dionis AECOM Technology Corp April 7, 2009 Page 4 because you can clearly explain what trends, events, and uncertainties are affecting the business currently a nd for the periods reported upon.
* * * *
As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your responses to our comments and provides any requested supplemental information. Detailed response letters greatly facilitate our review. Please file your response letter on EDGAR. Please understand that we may ha ve additional comments after reviewing responses to our comments. You may contact Tracey McKoy, Staff A ccountant, at (202) 551-3772 or, in her absence Tracey Houser at (202) 551-3736 or the undersigned Accounting Branch Chief at (202) 551-3355 if you have questions regard ing comments on the financial statements and related matters. Please contact Dorine Mi ller at (202) 551-3711 wi th any legal related questions. Sincerely, T e r e n c e O ’ B r i e n A c c o u n t i n g B r a n c h C h i e f
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
Mail Stop 7010
April 7, 2009
via U.S. mail and facsimile
John M. Dionis, Chief Executive Officer AECOM Technology Corp 555 South Flower Street, Suite 3700 Los Angeles, California 90071 RE: AECOM Technology Corp
Form 10-K/A for the Fiscal Year Ended September 30, 2008
Filed January 23, 2009 Proxy Statement Filed January 23, 2008 File No. 000-52423
Dear Mr. Dionis:
We have reviewed your response letter dated March 26, 2009 and have the following
additional comments. Form 10-K for the Fiscal Year Ended September 30, 2008
Critical Accounting Policies, page 27
Goodwill, page 29
1. We note the additional disclosure you intend to include in future filings in
response to comment 3 in our letter dated February 6, 2009. Specifically, you
note that in the circumstances in wh ich the components of your operating
segments have discrete financial info rmation you are able to aggregate those
components because they have similar economic characteristics including the nature of the services provided, the internal processes for delivering those
services, and the types of customers. Pleas e revise this disclosure to clarify which
reporting unit has components with disc rete financial information, as you only
have two reporting units. Please also revise your disclosure for this reporting unit
to clarify that the components being a ggregated also have similar operating
performance, if correct. If you are unab le to state that the components being
aggregated have similar operating perfor mance, please provide us with your
Mr. Dionis
AECOM Technology Corp April 7, 2009 Page 2
detailed analysis as to how you determ ined the components can be aggregated
into one reporting unit. Refer to pa ragraphs 30-31 of SFAS 142 and EITF Topic
D-101 for guidance.
2. We further note from the disclosure you intend to include in future filings in
response to comment 3 in our letter dated February 6, 2009, your statement,
“[a]lthough we have various operating companies, they have been aggregated into two operating segments for segment reporting purposes, in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information.”
It is unclear to us what you mean by this statement. Please advise. In this regard,
SFAS 131 does not contain guidance for aggregating operating businesses into
operating segments. Rather, SFAS 131 provides guidance on aggregating
operating segments into reportable segments for reporting purposes. We note that
you have not provided disclosure regardi ng operating segments being aggregated
into reportable segments in accordance with paragraph 26.a. of SFAS 131. Please confirm to us that your CODM does not receive financial information below your
current operating/reportable segments. Otherwise, please provide us with a
detailed analysis as to how you determ ined your operating segments are properly
aggregated to the reportable segment le vel. Please also re-address paragraph 30
of SFAS 142 regarding the identification of your reporting units for purposes of
testing goodwill for impairment.
3. Acquisitions, page 62
3. We note in your response to comment 11 in our letter dated February 6, 2009, that
you assessed the materiality of your acquisitions for purposes of providing the disclosures required by SFAS 141 based on Rule 3-05 of Regulation S-X. The
guidance in Rule 3-05 of Re gulation S-X is not meant to determine whether the
disclosures in SFAS 141 are required. As such, please re-assess each of your
acquisitions completed during each period presented to determine whether each acquisition is material based on the guid ance in FASB Concept Statement 2 and
SAB Topic 1:M. If you determine other acq uisitions are material, please provide
the disclosures required by paragraphs 51 and 52 of SFAS 142 for each material
acquisition for each period presented. Please advise.
4. We have read your response to comment 11 in our letter dated February 6, 2009,
and your proposed future disclosure. Please revise your proposed future
disclosure to provide the condensed balance sheet di sclosing the amount assigned
to each major asset and liability caption of Earth Tech as required by paragraph
51.e. of SFAS 141.
5. We note your response to comment 11 in our letter dated February 6, 2009,
regarding your acquisitions that are individually immateri al but material in the
aggregate. While we note that you intend to include a brief description of Boyle
Mr. Dionis
AECOM Technology Corp April 7, 2009 Page 3
Engineering Corporation and Tecsult, Inc ., this disclosure does not fully comply
with the all of the require ments in paragraph 53 of SFAS 141. In future filings,
please provide all of the disclosures required by paragraph 53 of SFAS 141 for
your acquisitions that are material in the aggregate for each period presented.
20. Commitments and Contingencies, page 88
6. We note your response to comment 16 in our letter dated February 6, 2009. As
previously requested, please revise your disc losure in future filings to address the
materiality of pending claims, guarantees, lit igation, audits and investigations to
your cash flows in addition to your financ ial position and results of operations.
As previously noted, if you believe y our pending claims, guarantees, litigation,
audits and investigations could be materi al to your cash flows at the probable or
reasonably possible thresholds, as defi ned in SFAS 5, please include specific
disclosure of those loss contingencies in accordance with paragraphs 9-10 of
SFAS 5.
Proxy Statement
Compensation Discussion and Analysis, page 16
7. We note in your response to comments 18 and 21 in our letter dated February 6,
2009 that you believe disclosure of the corporate performance targets used to
calculate incentive compensation would result in competitive harm. However,
your response only addresses performance ta rgets for future periods rather than
completed fiscal years, which is not applic able except as provided in Instruction 2
to Item 402(b) of Regulation S-K. Furt hermore, your response that disclosing
target information could cause competitiv e harm could apply to many registrants.
Note that under Item 402(b )(1)(v) of Regulation S-K, a filer must disclose how it
determined the amount and formula for each element of compensation.
Please provide us your analysis that demonstrates that disclosing target
information for previous fiscal years could cause competitive harm based on your
particular facts and circumstances. E xplain to us in greater detail how
competitors may gain insight into ho w the company intends to price your
services. Also, explain to us how disclosing growth in EBITA, EBITA return on total invested capital, and EBITA per sh are would affect you differently than
other companies who disclose these types of performance targets. We also note
your response that target information may be viewed as projections and may
cause confusion. However, in your fu ture MD&A and CD&A disclosure you
should describe management’s strategi es, including the company’s growth
strategies and bonus targets. It appears th at the bonus targets can be disclosed in a
manner that will not incorrectly signal th e market about your goals and strategy
Mr. Dionis
AECOM Technology Corp April 7, 2009 Page 4
because you can clearly explain what trends, events, and uncertainties are
affecting the business currently a nd for the periods reported upon.
* * * *
As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Please furnish a letter that keys your
responses to our comments and provides any requested supplemental information.
Detailed response letters greatly facilitate our review. Please file your response letter on
EDGAR. Please understand that we may ha ve additional comments after reviewing
responses to our comments. You may contact Tracey McKoy, Staff A ccountant, at (202) 551-3772 or, in her
absence Tracey Houser at (202) 551-3736 or the undersigned Accounting Branch Chief at
(202) 551-3355 if you have questions regard ing comments on the financial statements
and related matters. Please contact Dorine Mi ller at (202) 551-3711 wi th any legal related
questions.
Sincerely,
T e r e n c e O ’ B r i e n A c c o u n t i n g B r a n c h C h i e f