FLUOR CORP
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
FLR$46.48+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001124198-25-000073
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001124198-26-000061
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 93 current paragraphs.
51 unchanged; 19 reworded; 23 added; 34 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Developments in Our Business
Current report
We continue to see strong client engagement across our end markets and have recently won several front-end awards that could lead to significant full awards in the coming quarters. The pipeline of opportunities continues to show strength, particularly where demand in energy, commodities and advanced technologies are driving investment. Our teams are progressing engineering and design work so projects can move expeditiously once final investment decisions are made. While one mining project in the Middle East has slowed down due to geopolitical concerns, we continue to advance other projects in the region and are well positioned to participate in rebuilding efforts once the hostilities subside. We are also well positioned for global projects driven by energy and commodity diversification as a result of geopolitical concerns caused by the conflict. We are also currently positioning for project work in Venezuela as that market stabilizes and develops.
Current report
Through our bank's execution, we completed the sale of all 71 million shares of NuScale in February 2026, generating total proceeds of $1.35 billion. As of March 31, 2026, we had an ongoing program to sell the final 40 million of our NuScale shares but those shares remained on our balance sheet during the execution window. We completed the program in April 2026 and collected total proceeds of $473 million. Since September 2025, sales of our NuScale shares have generated $2.43 billion in cash.
Current report
During 2026, we sold our ownership interest in CFHI for proceeds of $124 million. We recognized a gain of $124 million upon the sale as the investment had previously been fully impaired.
Current report
(1)In addition to the measurements under GAAP, we measure our performance by analyzing trends in adjusted net revenue (and related margin), which we determine by reducing GAAP revenue to exclude at-cost revenue associated with reimbursable contracts for the following elements, where applicable:
Current report
•amounts associated with unaffiliated subcontractor project costs that are billed to clients without meaningful markup;
Current report
•amounts associated with costs of material that are billed to clients without meaningful markup; and
Current report
•costs of CFM that are procured by our clients and which do not give rise to meaningful markup to our billings to clients.
Current report
Such at-cost revenue is generally reflected in our project estimates at equivalent amounts within the revenue and cost elements. Therefore, we believe our adjusted net revenue represents the basis for which we earn fees for our professional services. Others in our industry may have similar terms that they use to similarly measure the earnings power of their services. Even though our involvement with at-cost revenue elements as a principal gives rise to their inclusion in our consolidated revenue, the absence of meaningful markup to them elevates the importance of this non-GAAP analysis. During 2026 and 2025 Quarters, at-cost revenue was approximately $2.1 billion and $1.9 billion, respectively (or approximately 58% and 48% of consolidated revenue). Excluding the amounts of at-cost revenue from both GAAP revenue and from project cost yields an amount that we call adjusted net margin.
Current report
Revenue decreased in 2026 primarily due to a decline in execution activity for several recently completed projects and projects nearing completion as well as reduced volume on certain Mission Solutions projects partially offset by a ramp up of execution activities on several large projects in our Urban Solutions segment.
Current report
Earnings before taxes decreased in 2026 due to the impact of an unfavorable court ruling on a DOD project and cost growth on a large mining joint venture project, partially offset by the gain on the sale of CFHI.
Current report
Revenue increased in 2026 due to the ramp up of execution activities on life sciences and mining and metal projects. The increase in 2026 revenue was partially offset by a decline in execution activity for a recently completed project. During the 2026 and 2025 Quarters, at-cost revenue for Urban Solutions was approximately $1.5 billion and $1.2 billion, respectively (or approximately 63% and 57% of their segment revenue).
Current report
Segment profit and profit margin declined in 2026 due to cost growth of $37 million on a large mining joint venture project and a decline in execution activity for a recently completed project.
Current report
New awards decreased in 2026 compared to 2025 due to a large life sciences award booked in 2025. New awards in 2026 included a full notice to proceed on a large aluminum project in the Middle East, incremental work for a pharmaceutical facility, infrastructure expansion on a mine in Chile and a limited notice to proceed on a large-scale data center project in the U.S. Backlog as of March 31, 2026 increased compared to backlog at December 31, 2025 due to the new award activity. Our staffing business does not report new awards or backlog.
Current report
Revenue decreased in 2026 primarily due to a decline in execution activity for several projects nearing completion. These declines in revenue were partially offset by increased activity on a North American refinery project. During both the 2026 and 2025 Quarters, at-cost revenue for Energy Solutions was approximately $314 million and $472 million, respectively (or approximately 45% and 39% of their segment revenue).
Current report
Segment profit and profit margin increased in 2026 primarily due to the recognition of favorable close out items on 3 projects, offset slightly by an acceleration of profit recognition in the 2025 Quarter due to a change of scope on another project.
Current report
Revenue declined in 2026 largely due to the completion of the contractual periods of performance at 2 DOE projects, one in the Gulf Coast region and one in Ohio. We continue to participate as a minority partner in the new joint venture providing services to the DOE site in Ohio. Additionally, revenue declined due to reduced hurricane support and emergency relief services volume. These revenue declines were partially offset by increased service volume at a DOE site in South Carolina. During both the 2026 and 2025 Quarters, Mission Solutions had no meaningful amounts of at-cost revenue.
Current report
Segment profit and profit margin declined in 2026 primarily due to the recognition of a $96 million charge resulting from the outcome of a court ruling on a lawsuit filed against us in 2013. Segment profit in 2025 reflected an additional reserve of $28 million resulting from an adverse ruling on a long-standing claim on a project completed in 2019.
Current report
Equity Method Earnings
Current report
In February 2026, we completed the sale of 71 million shares of NuScale via a variable price forward sale agreement, generating total proceeds of $1.35 billion. In April 2026, we completed the sale of the final 40 million shares of NuScale via variable price forward sale agreements, generating total proceeds of $473 million, and thereby completing the divestiture of our ownership interest in NuScale. Since September 2025, sales of our NuScale shares have generated $2.43 billion in cash.
Current report
During 2026, we spent $516 million to repurchase and cancel 11 million shares of common stock under our repurchase program. In February 2026, our board authorized a 30 million share expansion to the repurchase program. Over 28 million shares could still be purchased under the program as of March 31, 2026. We are targeting approximately $1.4 billion in share repurchases in 2026.
Current report
In February 2026, we completed the sale of 71 million shares of NuScale via a variable price forward sale agreement, generating total proceeds of $1.35 billion. We also completed the sale of the final 40 million shares of NuScale in April 2026 for total proceeds of $473 million.
Current report
Capital contributions by NCI represent cash inflows from partners of consolidated partnership or joint ventures created primarily for the execution of single contracts or projects. Capital contributions by NCI during the 2026 Quarter related to an infrastructure joint venture.
Removed paragraphs (34)
Previous report
•Earnings volatility due to recurring fair value measurements of our investment in NuScale;
Previous report
The ultimate effect of emerging trade policies, cost escalation, and broader economic and geopolitical dynamics across our markets remains uncertain. Clients prioritizing accelerated schedules have largely maintained capital investment plans, while others facing cost pressures or low commodity prices, such as chemicals, have postponed commitments pending improved visibility. We continue to advance engineering and design work in anticipation of future investment decisions. While these delays could temper earnings growth in 2026 relative to prior assumptions, we remain focused on mitigating cost impacts on behalf of our clients and positioning for long-term opportunities. We will continue to monitor policy developments and collaborate with clients to manage risks, though the ultimate outcome of these factors cannot be determined at this time.
Previous report
Revenue in the 2025 Quarter was significantly impacted by a court ruling on the long completed Santos project in Australia. We have appealed the Court decision and we are also working with our insurance carriers to address the obligations arising from the expected judgment and the costs related to the appeal. We recognized a reversal of revenue of $653 million during the 2025 Quarter, inclusive of committed insurance proceeds, representing the estimated net payment due to our customer upon judgment if no other insurance proceeds are agreed to.
Previous report
We slowed our execution activities at our joint venture in Mexico beginning in the second quarter of 2025 through much of the third quarter to minimize our working capital exposure to the joint venture's primary customer. The customer has since made significant progress payments through October 2025, allowing us to begin a controlled restart of our project execution activities.
Previous report
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 $401 million for the 2025 Quarter and a pre-tax gain of $2.3 billion for the 2025 Period. 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. During the 2025 Quarter, we converted 15 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares. We sold 10 million of those shares for net proceeds of $414 million during the 2025 Quarter. During October 2025, we sold an additional 5 million of shares in NuScale for net proceeds of $191 million.
Previous report
As of September 30, 2025, our investment in NuScale consisted of the 5 million unsold shares that were converted during September 2025 and 111 million ownership units in NuScale’s operating subsidiary coupled with associated voting shares of NuScale. During November 2025, we reached agreement with NuScale that includes the following general attributes:
Previous report
•Conversion of all 111 million remaining ownership units into NuScale registered shares on a one-to-one basis. Immediately upon conversion, we may begin selling the converted shares subject to daily limitations that vary depending on defined blackout dates for NuScale;
Previous report
•Voting covenant whereby we will agree to affirmatively support the expansion of NuScale’s authorized share count by up to 330 million shares;
Previous report
•Imposition of NuScale trading limitations on any newly authorized shares through February 2026;
Previous report
•50% reduction in our benefits, if any, that may arise under the tax receivable agreement with NuScale;
Previous report
•Modification of our exclusivity arrangement with NuScale; and
Previous report
•Various mutual releases and non-disparagement provisions.
Previous report
We expect to begin our monetization under a structured sale program within days, and expect that the program could be completed by the end of April 2026. We will provide more information regarding our use of proceeds, including for income taxes arising from the conversion, once we have more information about the NuScale share price on the day of conversion.
Previous report
In the 2025 Period, we completed the sale of Stork's U.K. operations for $61 million. 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. Our divestiture of the Stork business is substantially complete.
Previous report
Revenue decreased during the 2025 Quarter and 2025 Period primarily due to the reversal of previously recognized revenue of $653 million for a court ruling on the long completed Santos project in Australia as well as a decline in execution activity for Energy Solutions projects nearing completion. However, revenue in both Urban Solutions and Mission Solutions increased during the 2025 Quarter and 2025 Period due to the ramp up of execution activities on life sciences and mining projects and an increase in volume on a DOE project.
Previous report
Earnings before taxes decreased during the 2025 Quarter and 2025 Period due to the same factors that impacted revenue above as well as an adjustment for delay-related effects on an infrastructure project. Earnings before taxes in the 2025 Period were also impacted by cost growth on 3 infrastructure projects for subcontracted design errors, price escalation and schedule impacts.
Previous report
Income tax expense in the 2025 Quarter and 2025 Period was significantly impacted by a lack of recognizable benefit for the Santos ruling. We continue to seek ways to create deductibility for that matter.
Previous report
In July 2025, the OBBB Act, which includes a broad range of U.S. tax reforms, was signed into law. The OBBB Act did not have a material impact on our consolidated results.
Previous report
Beginning in January 2024, many non-US tax jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion Model Rules, also known as Pillar Two. Pillar Two establishes a global minimum tax of 15% on large multinational corporations. We considered the applicable tax law changes in the countries in which we operate and have determined that there is no material impact to our tax provision for the 2025 Quarter or 2025 Period. We will continue to evaluate the impact of these tax law changes on future periods.
Previous report
Our profit margin percentages may be favorably or unfavorably impacted by a change in the amount of CFM recorded. We record revenue on a gross basis, including CFM, when we have concluded that we are a principal with respect to such materials and services, though the timing of CFM receipt can significantly impact completion percentage.
Previous report
Revenue increased during the 2025 Quarter and 2025 Period due to the ramp up of execution activities on recently awarded life sciences projects 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 report
Segment profit in the 2025 Quarter and 2025 Period decreased due to an adjustment of $25 million for delay-related effects on an infrastructure project partially offset by a favorable negotiation with a designer on a separate infrastructure project as well as the ramp up of recently awarded projects in life sciences and mining. Segment profit in the 2025 Period also included forecast adjustments totaling $54 million for cost growth on 3 infrastructure projects related to subcontracted design errors, price escalation and schedule impacts partially offset by a refinement of our expected recovery from claims against our subcontractors on these same projects. The changes in segment profit margin in the 2025 Quarter and 2025 Period reflect these same factors.
Previous report
New awards increased during the 2025 Quarter compared to the 2024 Quarter due to incremental awards on a mining project and a life sciences project booked in the 2025 Quarter. Backlog increased during the 2025 Period due to a large EPC award for a second multi-billion dollar pharmaceutical facility in Indiana booked during the first quarter of 2025. Our staffing business does not report new awards or backlog.
Previous report
Revenue decreased during the 2025 Quarter and 2025 Period primarily due to the reversal of previously recognized revenue of $653 million for a court ruling on the long completed Santos project in Australia that will require payment to our customer once the judgment is entered. The revenue decrease was further driven by a decline in execution activity for several projects nearing completion and for certain projects at our joint venture in Mexico where we slowed our execution activities beginning in the second quarter of 2025 through much of the third quarter pending customer payment. The customer has since made significant progress payments through October 2025, allowing us to begin a controlled restart of our project execution activities. The 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 report
Segment profit and profit margin declined during the 2025 Quarter and 2025 Period due to the same factors that impacted revenue above partially offset by an increase on a large project nearing completion. Segment profit and profit margin in the 2025 Period was also impacted by the recognition of $31 million for an arbitration ruling on a fabrication project at our joint venture in Mexico that was completed in 2021. Segment profit and segment profit margin in the 2024 Period was adversely impacted by $57 million in cost growth on a construction-only subcontract executed by our joint venture in Mexico.
Previous report
Revenue increased during the 2025 Quarter and 2025 Period primarily due to an increase in project execution volume associated with a construction project for the DOE and hurricane relief efforts for FEMA, partially offset by reduced volumes on a DOE project and a DOD project. The 2025 Quarter also included the recognition of allowances for certain questioned and disputed costs on a DOD project and revenue associated with the favorable resolution of a long-standing claim. Revenue for the 2025 Period reflected the recognition of revenue reserves resulting from a ruling on a long-standing claim for a project completed in 2019.
Previous report
Segment profit and profit margin declined during the 2025 Quarter due to the recognition of allowances for certain questioned and disputed costs on a DOD project mostly offset by the favorable resolution on a long-standing claim. Segment profit and profit margin declined during the 2025 Period primarily due to the recognition of revenue reserves of $28 million resulting from a ruling on a long-standing claim on a project completed in 2019.
Previous report
Other
Previous report
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 and beyond.
Previous report
During the 2025 Quarter, we converted 15 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares. We sold 10 million of those shares for net proceeds of $414 million during the 2025 Quarter. During October 2025, we sold an additional 5 million of shares in NuScale for net proceeds of $191 million.
Previous report
In the 2025 Period, we used $365 million to repurchase and cancel 9 million shares of common stock under our repurchase program. Over 19 million shares could still be purchased under the repurchase program as of September 30, 2025. We are targeting the repurchase of approximately $800 million of our stock for the period from November 2025 through February 2026, primarily using our operating cash flow and with proceeds from the NuScale shares that we converted in September 2025. We expect to use a substantial portion of prospective monetization from the November 2025 conversion toward additional share repurchases after February 2026, which amount we expect will hinge on the proceeds emanating from the monetization process.
Previous report
During the 2025 Quarter, we sold 10 million of shares in NuScale for net proceeds of $414 million.
Previous report
Return of capital from partnerships and joint ventures in the 2024 Period included capital distribution from an infrastructure joint venture.
Previous report
During the 2024 Period, NuScale received $80 million in proceeds from the issuance of their common stock. NuScale was a fully consolidated subsidiary at September 30, 2024.
Reworded paragraphs (19)
Previous 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.
Current wording
(2)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 at September 30, 2025 approximated 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 second quarter of 2025 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 is considered to be firm, cancellations, deferrals or scope adjustments may occur.
Current wording
(3)Backlog at March 31, 2026 was level with backlog at December 31, 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 is considered to be firm, cancellations, deferrals or scope adjustments may occur. During the 2026 Quarter, project adjustments totaling $1.1 billion included a scope increase on a DOE project and an increase in CFM on a metals project.
Previous wording
(3)Includes backlog of $394 million and $702 million for ongoing legacy projects in a loss position as of September 30, 2025 and December 31, 2024, respectively.
Current wording
(4)Includes backlog of $169 million and $255 million for legacy projects in a loss position as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
The effective tax rate on earnings, including equity method earnings, was 20% for the 2025 Quarter and 26% for the 2025 Period compared to 71% for the 2024 Quarter and 44% for the 2024 Period. 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 (4)% for the 2026 Quarter compared to 19% for the 2025 Quarter. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:
Previous 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.
Current wording
New awards in the 2026 Quarter were consistent with new awards in the 2025 Quarter. Backlog declined in 2026 due to the execution pace exceeding new award activity.
Previous wording
New awards increased during the 2025 Quarter and 2025 Period. New awards in the 2025 Quarter included a six-year contract to extend our presence at the Portsmouth Gaseous Diffusion Plant in Ohio. Backlog included $1.1 billion and $665 million of unfunded government contracts as of September 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
Current wording
New awards increased in 2026 compared to 2025. Backlog included $1.1 billion and $1.0 billion of unfunded government contracts as of March 31, 2026, and December 31, 2025, 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 2025 Period was primarily driven by lower stock price-driven compensation and performance-based compensation. During the 2025 Quarter, we recognized severance and exit costs primarily related to certain international office closures.
Current wording
The increase in compensation expense in the 2026 Quarter was primarily driven by higher stock price-driven compensation.
Previous wording
Ourliquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, proceeds from the sales of NuScale shares, 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.
Current wording
Ourliquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facility and, when necessary, access to capital markets. In 2026, liquidity was positively impacted by proceeds from the sales of NuScale shares and CFHI. 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.
Previous wording
As of September 30, 2025, letters of credit totaling $409 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 September 30, 2025 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 $902 million.
Current wording
As of March 31, 2026, letters of credit totaling $413 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 March 31, 2026 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 $903 million.
Previous wording
Cash and cash equivalents combined with marketable securities were $2.8 billion and $3.0 billion as of September 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 $903 million as of September 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.
Current wording
Cash and cash equivalents combined with marketable securities were $3.2 billion and $2.2 billion as of March 31, 2026 and December 31, 2025, 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 $939 million as of March 31, 2026 and $820 million as of December 31, 2025. 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 $355 million and $333 million as of September 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 $20 million and $79 million as of September 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 September 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.
Current wording
Cash and cash equivalents held by our consolidated variable interest entities (which totaled $336 million and $328 million as of March 31, 2026 and December 31, 2025, 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 $10 million and $14 million as of March 31, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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 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 September 30, 2025, our backlog included $394 million for ongoing legacy projects in a loss position, including approximately $117 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 March 31, 2026, our backlog included $169 million for ongoing legacy projects in a loss position, including approximately $181 million of estimated unfunded losses associated therewith. The comparable amounts at December 31, 2025 were $255 million of backlog and $212 million of unfunded losses.
Previous wording
Our operating cash flow for the 2025 Period was negatively impacted by lower earnings. Operating cash flow for the 2025 Quarter significantly improved primarily due to decreases in working capital on several large projects as well as distributions from a large Energy Solutions joint venture. During the 2025 Period, we funded $61 million on 2 consolidated infrastructure projects. We expect a significant payment will be due to Santos during the fourth quarter of 2025 upon the expected judgment from the Court over Santos’ efforts to recover costs related to a reimbursable project completed by us in 2015.
Current wording
Operating cash flow for the 2026 Quarter significantly improved despite the annual payout of employee incentive awards. The increase in operating cash flow is primarily due to decreases in working capital on several large projects as well as distributions from a large Energy Solutions joint venture and a Mission Solutions joint venture. During the 2026 Quarter, we funded $55 million on a consolidated infrastructure project. Our operating cash flow for the 2025 Quarter was negatively impacted by increases in working capital on several large projects. 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.
Previous 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.
Current wording
Capital expenditures in 2026 primarily related to investments in construction equipment on infrastructure projects and in IT compared to primarily IT investments in 2025.
Previous 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.
Current wording
Proceeds from sales of assets during the 2026 Quarter included $124 million from the sale of our ownership interest in CFHI compared to $61 million from the sale of Stork's U.K. operations during the 2025 Quarter.
Previous wording
Investments in partnerships and joint ventures in the 2025 Period included $120 million in funding on a proportionately consolidated loss project for an infrastructure joint venture, $38 million in funding on an Energy Solution 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, an Energy Solutions joint venture and a Mission Solutions joint venture.
Current wording
Investments in partnerships and joint ventures in the 2026 Quarter included $32 million in funding on a proportionately consolidated loss project for an infrastructure joint venture compared to $55 million during the 2025 Quarter.
Previous 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 8.9 million shares of common stock under the repurchase program for total consideration of $365 million. Since we restarted the program in the fourth quarter of 2024, a total of 11 million shares have been purchased for $490 million.
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. During the 2026 Quarter, we repurchased 11 million shares of common stock under the repurchase program for total consideration of $516 million. Since we restarted the program in the fourth quarter of 2024, a total of 32 million shares have been purchased for $1.4 billion.
Previous wording
During the 2025 and 2024 Periods, we redeemed $37 million and $44 million, respectively, of aggregate outstanding 2028 Notes, with an immaterial impact on earnings in both periods.
Current wording
During the 2025 Quarter, we redeemed $18 million of the aggregate outstanding 2028 Notes. The impact on earnings was immaterial.
Previous wording
As of September 30, 2025, letters of credit totaling $409 million were outstanding under committed lines of credit. As of September 30, 2025, letters of credit totaling $918 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.
Current wording
As of March 31, 2026, letters of credit totaling $413 million were outstanding under committed lines of credit. As of March 31, 2026, letters of credit totaling $851 million were outstanding under uncommitted lines of credit including letters of credit totaling $343 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
these awards may be significant contributors to earnings in future periods.