FLUOR CORP

Previous wording

•Civil unrest, security issues, labor conditions and other unforeseeable events in the countries in which we do business;

Current wording

•Exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events and conflicts, civil unrest, security issues, labor conditions and other unforeseeable events in the countries in which we do business;

Previous wording

In March 2024, we completed the sale of Stork's operations in continental Europe for $67 million. During 2024 YTD, we recognized a gain on sale of $11 million including de-recognition of Stork's net assets and cumulative foreign currency translation.

Current wording

In the 2025 Quarter, we completed the sale of Stork's U.K. operations. The sale did not have a material impact on the financial statements. In the 2024 Quarter, we completed the sale of Stork's operations in continental Europe for $67 million and recognized a gain on sale of $11 million including de-recognition of Stork's net assets and cumulative foreign currency translation. After completing the wind down of the Trinidad and Tobago operations later this year, Stork's divestiture will be complete.

Previous wording

(1)Total segment profit is a non-GAAP financial measure. We believe that total segment profit provides a meaningful perspective on our results as it is the aggregation of individual segment profit measures that we use to evaluate and manage our performance.

Current wording

(1)Total segment profit and margin are non-GAAP financial measures. We believe that total segment profit provides a meaningful perspective on our results as it is the aggregation of individual segment profit measures that we use to evaluate and manage our performance.

Previous wording

(2)Backlog as of September 30, 2024 increased from backlog as of December 31, 2023 primarily due to an award for a large life sciences project. Backlog may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur.

Current wording

(2)Backlog at March 31, 2025 was level with backlog at December 31, 2024. We booked a multi-billion award for a life sciences project during the 2025 Quarter. However, we also adjusted backlog on 2 large projects due to reductions in scope and the associated CFM. Backlog may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. Although backlog reflects business that isconsidered to be firm, cancellations, deferrals or scope adjustments may occur.

Previous wording

(3)Includes backlog of $859 million and $1.3 billion for ongoing legacy projects in a loss position as of September 30, 2024 and December 31, 2023, respectively.

Current wording

(3)Includes backlog of $585 million and $702 million for ongoing legacy projects in a loss position as of March 31, 2025 and December 31, 2024, respectively.

Previous wording

Revenue increased during the 2024 Quarter and 2024 YTD primarily driven by an increase in execution activities on several recently awarded projects in our Urban Solutions segment partially offset by revenue declines in Energy Solutions and Mission Solutions.

Current wording

Revenue increased during the 2025 Quarter primarily driven by a ramp up of execution activities on several large projects in our Urban Solutions segment partially offset by revenue declines in Energy Solutions.

Previous wording

The effective tax rate was 70.9% for the 2024 Quarter and 44.0% for 2024 YTD compared to 30.4% for the 2023 Quarter and 59.1% for 2023 YTD. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Current wording

The effective tax rate on earnings for the 2025 Quarter was (49)% compared to 56% for the 2024 Quarter. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Previous wording

Revenue declined during the 2024 Quarter and 2024 YTD primarily due to a decline in execution activity for several projects nearing completion as well as revenue on inflation-adjusted variable consideration recognized in the prior year periods. The decreases in revenue during the 2024 Quarter and 2024 YTD were partially offset by the ramp up of execution activities on chemicals projects in Canada and China.

Current wording

Revenue decreased during the 2025 Quarter due to a decline in execution activity for several projects nearing completion partially offset by the ramp up of execution activities on a chemicals project in Canada and a batteries project in Poland.

Previous wording

New awards were lower in the 2024 Quarter and 2024 YTD compared to 2023. New awards booked during the 2024 Quarter included a full notice to proceed on a downstream project in Mexico. Backlog declined during 2024 YTD due to the execution pace exceeding new award activity.

Current wording

New awards declined during the 2025 Quarter compared to the 2024 Quarter. Backlog declined during the 2025 Quarter due to the execution pace exceeding new award activity.

Previous wording

funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. For example, our new awards and backlog will not reflect the Pantex management and operations contract, recently awarded to a joint venture in which we have significant influence but a noncontrolling interest. The estimated value of the contract to the joint venture is $30 billion, if all of the 5-year options are exercised.

Current wording

New awards declined during the 2025 Quarter compared to the 2024 Quarter. Backlog included $369 million and $665 million of unfunded government contracts as of March 31, 2025 and December 31, 2024, respectively. Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods.

Previous wording

The decrease in compensation expense in the 2024 Quarter and 2024 YTD was primarily driven by lower performance-based compensation including annual bonus projections.

Current wording

The decrease in compensation expense in the 2025 Quarter was primarily driven by lower stock-based compensation, largely resulting from a decrease in our stock price and corresponding TSR metrics between December 31, 2024 and March 31, 2025.

Previous wording

operations, capacity under our credit facilities and, when necessary, access to capital markets. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.

Current wording

operations, capacity under our credit facility and, when necessary, access to capital markets. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs that arise.

Previous wording

As of September 30, 2024, letters of credit totaling $483 million were outstanding under our $1.8 billion credit facility, which matures in February 2026. This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00 based upon total shareholders' equity excluding AOCI, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.2 billion, all as defined in the amended credit facility, which may be reduced to $1.0 billion upon the repayment of debt. Borrowings under the facility, which may be denominated in USD, EUR or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of September 30, 2024 and through the issuance of this 10-Q, we had not made any borrowings under our credit facility. We have a sub-limit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $758 million.

Current wording

As of March 31, 2025, letters of credit totaling $465 million were outstanding under our $2.2 billion credit facility, which matures in February 2028. This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, based upon total shareholders' equity excluding AOCI, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.2 billion, all as defined in the amended credit facility, which may be reduced to $1.0 billion upon the repayment of debt. Borrowings under the facility, which may be denominated in USD, EUR or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of March 31, 2025 and through the issuance of this 10-Q, we had not made any borrowings under our credit facility. We have a sublimit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $856 million.

Previous wording

Cash and cash equivalents combined with marketable securities were $3.0 billion and $2.6 billion as of September 30, 2024 and December 31, 2023, respectively. Cash balances as of September 30, 2024 and December 31, 2023 include cash and cash equivalents and marketable securities held by NuScale of $131 million and $118 million, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $1.4 billion and $1.1 billion as of September 30, 2024 and December 31, 2023, respectively. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are invested in offshore, overnight accounts or short-term time deposits, to which there is unrestricted access.

Current wording

Cash and cash equivalents combined with marketable securities were $2.5 billion and $3.0 billion as of March 31, 2025 and December 31, 2024, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $1.1 billion as of both March 31, 2025 and December 31, 2024. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are invested in offshore, overnight accounts or short-term time deposits, to which there is unrestricted access.

Previous wording

In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships). These amounts (which totaled $518 million and $491 million as of September 30, 2024 and December 31, 2023, respectively) were not necessarily readily available for general purposes. We do not include our share of cash held by our proportionately consolidated joint ventures and partnerships in our consolidated cash balances even though these amounts may be significant. We also consider the extent to which client advances (which totaled $64 million and $80 million as of September 30, 2024 and December 31, 2023, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of September 30, 2024 and December 31, 2023, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

Current wording

In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships). These amounts (which totaled $325 million and $333 million as of March 31, 2025 and December 31, 2024, respectively) were not necessarily readily available for general purposes. We do not include our share of cash held by our proportionately consolidated joint ventures and partnerships in our consolidated cash balances even though these amounts may be significant. We also consider the extent to which client advances (which totaled $48 million and $79 million as of March 31, 2025 and December 31, 2024, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of March 31, 2025 and December 31, 2024, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

Previous wording

Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project and the payments terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our lump-sum projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances. As of September 30, 2024, our backlog included $859 million for ongoing legacy projects in a loss position, including approximately $270 million of estimated unfunded losses associated therewith. The comparable amounts in December 31, 2023 were $1.3 billion of backlog and $344 million of unfunded losses.

Current wording

Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project and the payments terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our lump-sum projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances. As of March 31, 2025, our backlog included $585 million for ongoing legacy projects in a loss position, including approximately $189 million of estimated unfunded losses associated therewith. The comparable amounts at December 31, 2024 were $702 million of backlog and $237 million of unfunded losses.

Previous wording

Capital expenditures in 2024 YTD primarily related to improvements to our new office lease in Houston compared to expenditures for construction equipment and investments in IT in 2023 YTD.

Current wording

Capital expenditures in 2025 primarily related to investments in IT compared to expenditures for improvements to our new office lease in Houston as well as construction equipment on infrastructure projects in 2024.

Previous wording

We have a stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. As of September 30, 2024, over 10 million shares could still be purchased under the existing stock repurchase program. In November 2024, the Board authorized an additional 20,000,000 shares to the repurchase program.

Current wording

We have a stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. In November 2024, the Board authorized an additional 20,000,000 shares to the repurchase program. During 2025 Quarter, we repurchased 3,576,745 shares of common stock under the repurchase program for total consideration of $142 million. As of March 31, 2025, over 24,000,000 shares could still be purchased under the repurchase program.

Previous wording

As of September 30, 2024, letters of credit totaling $483 million were outstanding under committed lines of credit. As of September 30, 2024, letters of credit totaling $946 million were outstanding under uncommitted lines of credit including letters of credit totaling $460 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Current wording

As of March 31, 2025, letters of credit totaling $465 million were outstanding under committed lines of credit. As of March 31, 2025, letters of credit totaling $941 million were outstanding under uncommitted lines of credit including letters of credit totaling $344 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Previous wording

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $13 billion as of September 30, 2024.

Current wording

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $15 billion as of March 31, 2025.