FLUOR CORP

Previous 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.

Current wording

In the 2025 Period, 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 Period, 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

We recognize the fair value of our investment in NuScale on a mark-to-market basis based upon the prevailing price of their stock on our balance sheet dates, which resulted in a pre-tax loss of $477 million for the 2025 Quarter. Our investment in NuScale consists of ownership units in NuScale’s operating subsidiary coupled with non-economic voting shares of NuScale. We have the right to collectively exchange these interests for registered and publicly-traded shares of NuScale, subject to certain timing restrictions and NuScale management’s discretion around the maximum number of exchangeable shares each period, if any. Although we use the Level 1 fair value of the publicly-traded shares, the restrictions associated with the conversion could cause the net realizable value of the investment to be different than the implied fair value. NuScale's results for the 2024 Quarter were included in our Other segment as it was prior to our deconsolidation of NuScale.

Current wording

We recognize the fair value of our investment in NuScale on a mark-to-market basis based upon the prevailing price of their stock on our balance sheet dates, which resulted in pre-tax gains of $3.2 billion and $2.7 billion for the 2025 Quarter and 2025 Period, respectively. Our investment in NuScale consists of ownership units in NuScale’s operating subsidiary coupled with voting shares of NuScale. We have the right to collectively exchange these interests for registered and publicly-traded shares of NuScale, subject to certain timing restrictions and NuScale management’s discretion around the maximum number of exchangeable shares each period, if any. Although we use the Level 1 fair value of the publicly-traded shares, the restrictions associated with the conversion could cause the net realizable value of the investment to be different than the implied fair value. NuScale's results for the 2024 Quarter and 2024 Period were included in our Other segment as it was prior to our deconsolidation of NuScale. We expect to convert 15 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares in August 2025.

Previous 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.

Current wording

(2)Backlog at June 30, 2025 was level with backlog at December 31, 2024. We booked a multi-billion award for a life sciences project during the 2025 Period. We booked significant project adjustments related to scope increases on several large projects during the 2025 Quarter and scope reductions on 2 large projects in the first quarter of 2025. 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 $585 million and $702 million for ongoing legacy projects in a loss position as of March 31, 2025 and December 31, 2024, respectively.

Current wording

(3)Includes backlog of $556 million and $702 million for ongoing legacy projects in a loss position as of June 30, 2025 and December 31, 2024, respectively.

Previous 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:

Current wording

The effective tax rate on earnings, including equity method earnings, was 24% for both the 2025 Quarter and the 2025 Period compared to 29% for the 2024 Quarter and 36% for the 2024 Period. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Previous wording

Revenue significantly increased in the 2025 Quarter due to the ramp up of execution activities on life sciences projects awarded in the last 18 months as well as revenue growth on a large metals project and a large mining project. The increase in 2025 revenue was further driven by progression to completion on a metals project in which there was a change in scope and removal of CFM.

Current wording

Revenue increased during the 2025 Quarter and 2025 Period due to the ramp up of execution activities on life sciences projects awarded in the last 18 months and a mining project. The increase in revenue during the 2025 Period was further driven by revenue growth on a large metals project and a large mining project.

Previous 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.

Current wording

Revenue decreased during the 2025 Quarter and 2025 Period due to a decline in execution activity for several projects nearing completion and for certain projects at our joint venture in Mexico where the progress to completion has slowed pending customer payment. These declines in revenue were partially offset by the ramp up of execution activities on a batteries project in Poland and a chemicals project in Canada.

Previous wording

Segment profit and profit margin declined during the 2025 Quarter due to projects nearing completion and the impact of reserves taken for a joint venture project in Mexico completed in 2019, partially offset by profit recognition on a chemicals project upon a change in percentage of completion due to a client directed change in scope. Segment profit and segment profit margin in the 2024 Quarter was adversely impacted by $29 million in cost growth on a construction only subcontract executed by our joint venture in Mexico.

Current wording

Segment profit and profit margin declined during the 2025 Quarter and 2025 Period due to a decline in execution activity for several projects nearing completion and for certain projects at our joint venture in Mexico where the progress to completion has slowed pending customer payment and the recognition of $31 million for an arbitration ruling on a fabrication project at our joint venture in Mexico that was completed in 2021. The decline in segment profit during the 2025 Period was partially offset by profit recognition on a chemicals project upon a change in percentage of completion due to a client directed change in scope. Segment profit and segment profit margin in the 2024 Period was adversely impacted by $39 million in cost growth on a construction only subcontract executed by our joint venture in Mexico. Segment profit in the 2025 Quarter and 2025 Period also included losses of $11 million and $13 million, respectively, on embedded foreign currency derivatives compared to gains of $20 million and $27 million, respectively, in the 2024 Quarter and 2024 Period. In July 2025, we and our joint venture partners concluded negotiations for COVID recovery on LNG Canada, with no material impact on earnings.

Previous 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.

Current wording

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

Previous wording

Revenue in the 2025 Quarter was level with revenue in the 2024 Quarter. Revenue growth due to increased volume on a DOE project and FEMA hurricane relief efforts was offset by revenue declines resulting from reduced volume on a different DOE project and the recognition of an additional reserve resulting from a recent ruling on a long-standing claim on a project completed in 2019.

Current wording

Revenue increased during the 2025 Quarter and 2025 Period primarily due to an increase in project execution volumes across certain of our DOE projects as well as increased volume associated with FEMA hurricane relief efforts, partially offset by revenue declines resulting from reduced volume on a DOD project. Revenue for the 2025 Period included the recognition of an additional reserve resulting from a recent ruling on a long-standing claim on a project completed in 2019.

Previous wording

Segment profit and profit margin declined during the 2025 Quarter compared to the 2024 Quarter due to an additional reserve of $28 million resulting from a recent ruling on a long-standing claim on a project completed in 2019 partially offset by volume-related growth on a DOE project.

Current wording

Segment profit and profit margin declined during the 2025 Quarter due to a decline in execution activity for a DOD project as well as increased legal costs, partially offset by an increase in earnings from DOE projects and newly awarded DOE and DOD projects accounted for under the equity method of accounting. Segment profit and profit margin declined during the 2025 Period primarily due to an additional reserve of $28 million resulting from a recent ruling on a long-standing claim on a project completed in 2019.

Previous 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.

Current wording

New awards declined during the 2025 Period compared to the 2024 Period. New awards booked during the 2025 Quarter included short-term extensions at two DOE sites and additional funding for ongoing hurricane relief efforts. Backlog included $38 million and $665 million of unfunded government contracts as of June 30, 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

NuScale's results for the 2024 Quarter were included in our Other segment as it was prior to our deconsolidation of NuScale in October 2024. In the 2025 Quarter, we completed the sale of Stork's operations in the U.K. and recognized a gain on sale of $7 million compared to an $11 million gain on the sale of Stork's operations in continental Europe in the 2024 Quarter. We expect results from our Other segment to be immaterial for 2025.

Current wording

NuScale's results for the 2024 Quarter and 2024 Period were included in our Other segment as it was prior to our deconsolidation of NuScale in October 2024. In the 2025 Period, we completed the sale of Stork's operations in the U.K. and recognized a gain on sale of $7 million compared to an $11 million gain on the sale of Stork's operations in continental Europe in the 2024 Period. We expect results from our Other segment to be immaterial for 2025.

Previous 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.

Current wording

The decrease in compensation expense in the 2025 Quarter and 2025 Period was primarily driven by lower performance-based compensation.

Previous wording

Our credit facility contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, which is a one notch downgrade from both agencies' current ratings. If we are required to provide collateral, it would consist broadly of liens on our U.S. assets.

Current wording

Our credit facility contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, which is a one notch downgrade from both agencies' current ratings. If we were required to provide collateral, it would consist broadly of liens on our U.S. assets.

Previous 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.

Current wording

As of June 30, 2025, letters of credit totaling $463 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 $1.1 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 June 30, 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 $852 million.

Previous 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.

Current wording

Cash and cash equivalents combined with marketable securities were $2.3 billion and $3.0 billion as of June 30, 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 $880 million as of June 30, 2025 and $1.1 billion as of 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 $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.

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 $401 million and $333 million as of June 30, 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 $46 million and $79 million as of June 30, 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 June 30, 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

In the 2025 Quarter, we used $142 million to repurchase and cancel 3,576,745 shares of common stock under our repurchase program. Over 24,000,000 shares could still be purchased under the repurchase program as of March 31, 2025. Between April 1, 2025 and April 25, 2025, we repurchased and canceled approximately 1.5 million shares of our common stock for $51 million. We expect to repurchase approximately $150 million of our stock during the second quarter of 2025 and approximately $300 million of our stock during the latter half of 2025.

Current wording

In the 2025 Period, we used $295 million to repurchase and cancel 7.6 million shares of common stock under our repurchase program. Over 20 million shares could still be purchased under the repurchase program as of June 30, 2025. Between July 1, 2025 and July 25, 2025, we repurchased and canceled approximately 0.8 million shares of our common stock for $41 million. We are targeting the repurchase $150 million to $200 million of our stock during the latter half of 2025.

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 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.

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 as well as the payment 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 June 30, 2025, our backlog included $556 million for ongoing legacy projects in a loss position, including approximately $158 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

Our operating cash flow is typically lower in the first quarter of each year due to the timing of payout of employee incentive awards from the prior year. Our operating cash flow for the 2025 and 2024 Quarters was also negatively impacted by increases in working capital on several large projects.

Current wording

Our operating cash flow is typically lower in the first half of the year due to the timing of payout of employee incentive awards from the prior year. Our operating cash flow for the 2025 Period was also negatively impacted by increases in working capital on several large projects. During the 2025 Period, we funded $25 million on a single consolidated loss infrastructure project.

Previous 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.

Current wording

Capital expenditures in 2025 primarily related to investments in IT compared to expenditures for improvements to our new office lease in Houston in 2024.

Previous wording

Net proceeds from sales of assets during the 2025 Quarter included $61 million from the sale of Stork's U.K. operations compared to $29 million from the sale of Stork's European business in the 2024 Quarter. We received additional proceeds of $38 million from the sale of Stork Europe in April 2024.

Current wording

Net proceeds from sales of assets during the 2025 Period included $61 million from the sale of Stork's U.K. operations compared to $67 million from the sale of Stork's European business in the 2024 Period.

Previous wording

Investments in unconsolidated partnerships and joint ventures in the 2025 Quarter included $55 million in funding on a loss project for an infrastructure joint venture.

Current wording

Investments in partnerships and joint ventures in the 2025 Period included $85 million in funding on a proportionately consolidated loss project for an infrastructure joint venture and $33 million in funding to a separate infrastructure joint venture to make a legal settlement payment. Investments in partnerships and joint ventures in the 2024 Period included capital contributions to an infrastructure joint venture.

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. 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.

Current wording

We have an ongoing 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 million shares to the repurchase program. During the 2025 Period, we repurchased 7.6 million shares of common stock under the repurchase program for total consideration of $295 million. Since we restarted the program in the fourth quarter of 2024, a total of 10 million shares have been purchased for $420 million.

Previous wording

During the 2025 and 2024 Quarters, we redeemed $18 million and $10 million, respectively, of the aggregate outstanding 2028 Notes, with an immaterial impact on earnings in both periods.

Current wording

During the 2025 and 2024 Periods, we redeemed $36 million and $24 million, respectively, of aggregate outstanding 2028 Notes, with an immaterial impact on earnings in both periods.

Previous 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.

Current wording

As of June 30, 2025, letters of credit totaling $463 million were outstanding under committed lines of credit. As of June 30, 2025, letters of credit totaling $941 million were outstanding under uncommitted lines of credit including letters of credit totaling $347 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 $15 billion as of March 31, 2025.

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 $14 billion as of June 30, 2025.