FLUOR CORP

Previous wording

We continue to see strong client engagement across many of our end markets. We recently won several significant awards including a limited notice to proceed on LNG Canada Phase 2, a feasibility study for the Woodsmith mining project in England and a multi-year contract for EPC services for a uranium enrichment facility in the U.S. Additionally, we entered into a long-term agreement with Aramco to support its global capital projects portfolio. The pipeline of opportunities continues to show strength, particularly where demand in energy, commodities and advanced technologies are driving investment. We are closely monitoring Middle East events, other geopolitical factors and escalation pressures and their potential impact on business opportunities and risks.

Current wording

We continue to see strong client engagement across many of our end markets. During the 2026 Quarter, we received final notice to proceed on LNG Canada Phase 2 and booked an award for $7.5 billion. We also secured several mining project awards, further reinforcing our position in key growth sectors. Our pipeline of opportunities continues to strengthen, particularly where demand in energy, commodities and advanced technologies are driving investment. We continue to closely monitor broader geopolitical dynamics and escalating regional tensions, developments in the Middle East and Venezuela, while assessing their potential impact on business opportunities and risk exposure.

Previous wording

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 wording

In early 2026, we sold our ownership interest in CFHI for proceeds of $124 million and recognized a gain of $124 million upon the sale as the investment had previously been fully impaired.

Previous wording

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 the 2026 and 2025 Quarters, at-cost revenue was approximately $2.6 billion and $2.0 billion, respectively (or approximately 60% and 51% of consolidated revenue). During 2026 and 2025 Periods, at-cost revenue was approximately $4.7 billion and $3.9 billion, respectively (or approximately 59% and 49% 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 wording

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 the 2026 and 2025 Quarters, at-cost revenue was approximately $1.7 billion and $1.8 billion, respectively (or approximately 46% and 45% of consolidated revenue). During 2026 and 2025 Periods, at-cost revenue was approximately $6.0 billion and $5.4 billion, respectively (or approximately 51% and 45% of consolidated revenue, respectively). Excluding the amounts of at-cost revenue from both GAAP revenue and from project cost yields an amount that we call adjusted net margin.

Previous wording

(3)Income tax expense includes tax benefits attributable to equity method earnings of $18 million in the 2026 Period. There was no tax benefit or expense attributable to equity method earnings in the 2026 Quarter. Income tax expense included tax expense attributable to equity method earnings of $757 million and $684 million in the 2025 Quarter and 2025 Period, respectively.

Current wording

(3)There was no tax benefit (expense) attributable to equity method earnings in the 2026 Quarter. The tax benefit (expense) attributable to equity method earnings was $18 million, $230 million and $(454) million in the 2026 Period, 2025 Quarter and 2025 Period, respectively.

Previous wording

(4)Backlog at June 30, 2026 increased compared to backlog at December 31, 2025 due to several large awards booked during the 2026 Period including a multi-year, EPC contract for a uranium enrichment facility and incremental awards in life sciences and mining. 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

(4)Backlog at September 30, 2026 increased compared to backlog at December 31, 2025 due to several large awards booked during the 2026 Period including LNG Canada Phase 2 and a multi-year, EPC contract for a uranium enrichment facility. 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.

Previous wording

Earnings before taxes increased during the 2026 Quarter and 2026 Period due to a ramp up of execution activities and the recognition of favorable close out items on certain projects partially offset by cost growth on a legacy infrastructure project. Earnings before taxes in the 2026 Period also included the impact of an unfavorable court ruling on a DOD project and cost growth on a large mining project as well as the gain on the sale of CFHI.

Current wording

Earnings before taxes increased during the 2026 Quarter and 2026 Period driven by the gain on the sale of our interest in ICA-Fluor and the Santos revenue reversal recognized in the 2025 Quarter. The increase in earnings before taxes during the 2026 Period was further bolstered by the gain on the sale of our interest in CFHI and improvements on infrastructure projects partially offset by the impact of an unfavorable court ruling on a DOD project and cost growth on a large mining joint venture project.

Previous wording

The effective tax rate on earnings, including equity method earnings, was 17% and 6% for the 2026 Quarter and the 2026 Period, respectively, compared to 24% for both the 2025 Quarter and the 2025 Period. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Current wording

The effective tax rate on earnings was 23% for the 2026 Quarter and 13% for the 2026 Period compared to 20% for the 2025 Quarter and 26% for the 2025 Period. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows:

Previous wording

Segment profit and profit margin increased during the 2026 Quarter due to the ramp up of execution activities on mining and metals projects. The increase in segment profit was partially offset by $44 million attributable to the effects of foreign currency fluctuation, a subcontractor bankruptcy and client-driven changes on an infrastructure project. This project has reached substantial completion. Comparatively, segment profit in the 2025 Quarter included forecast adjustments totaling $54 million for cost growth on 3 infrastructure projects related to subcontractor 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. Segment profit and profit margin decreased in the 2026 Period due to cost growth of $37 million on a large mining joint venture project in the first quarter of 2026 and a decline in execution activity for a recently completed project.

Current wording

Segment profit and profit margin increased during the 2026 Quarter due to improved project performance and profitability upon successful milestone achievement on an infrastructure project and the ramp up of execution activities on a life sciences project. Segment profit in the 2026 Quarter included cost growth of $25 million on a large mining joint venture project. Segment profit in the 2025 Quarter included $25 million for the delay-related effects on an infrastructure project. Segment profit in the 2026 Period included the second quarter recognition of $44 million attributable to foreign currency fluctuation, a subcontractor bankruptcy and client-driven changes on a substantially completed infrastructure project and cost growth of $62 million on the mining joint venture project. Comparatively, segment profit in the 2025 Period included cost growth on 3 infrastructure projects totaling $54 million related to subcontractor design errors, price escalation and schedule impacts.

Previous wording

New awards increased during the 2026 Quarter compared to the 2025 Quarter. New awards in the 2026 Quarter included an EPCM award for a fertilizer project in Canada and an incremental life sciences award in the U.S. Backlog as of June 30, 2026 increased compared to backlog at December 31, 2025 due to the new award activity in the 2026 Period. Our staffing business does not report new awards or backlog.

Current wording

New awards increased during the 2026 Quarter and included 2 large mining awards. Backlog as of September 30, 2026 increased compared to backlog at December 31, 2025 due to the new award activity in the 2026 Period. Our staffing business does not report new awards or backlog.

Previous wording

Revenue decreased during the 2026 Quarter and 2026 Period primarily due to a decline in execution activity for several projects nearing completion. During the 2026 and 2025 Quarters, at-cost revenue for Energy Solutions was approximately $322 million and $522 million, respectively (or approximately 45% and 46% of their segment revenue). During the 2026 and 2025 Periods, at-cost revenue for Energy Solutions was approximately $636 million and $994 million, respectively (or approximately 45% and 42% of their segment revenue).

Current wording

Revenue increased during the 2026 Quarter primarily due to the reversal of previously recognized revenue in the 2025 Quarter for a court ruling related to the long-completed Santos project. Revenue decreased during the 2026 Period primarily due to a decline in execution activity for projects nearing completion including LNG Canada Phase 1 partially offset by the initial execution activities on Phase 2. During the 2026 and 2025 Quarters, at-cost revenue for Energy Solutions was approximately $303 million and $337 million, respectively (or approximately 45% and 37% of their segment revenue excluding the Santos revenue reversal in 2025). During the 2026 and 2025 Periods, at-cost revenue for Energy Solutions was approximately $939 million and $1.3 billion, respectively (or approximately 45% and 41% of their segment revenue excluding the Santos revenue reversal in 2025).

Previous wording

Revenue declined during the 2026 Quarter and 2026 Period largely due to a reduction in overall services volume within our portfolio of DOE projects as well as for hurricane support and emergency relief services. During the 2026 and 2025 Quarters, at-cost revenue for Mission Solutions was approximately $358 million and $314 million, respectively (or approximately 50% and 41% of their segment revenue). During the 2026 and 2025 Periods, at-cost revenue for Mission Solutions was approximately $638 million and $525 million, respectively (or approximately 52% and 39% of their segment revenue).

Current wording

Revenue declined slightly during the 2026 Quarter and 2026 Period largely due to a reduction in overall services volume within our portfolio of DOE projects as well as for natural disaster relief services, offset by contributions from our nuclear portfolio. During the 2026 and 2025 Quarters, at-cost revenue for Mission Solutions was approximately $80 million and $100 million, respectively (or approximately 11% and 13% of their segment revenue). During the 2026 and 2025 Periods, at-cost revenue for Mission Solutions was approximately $243 million and $310 million, respectively (or approximately 12% and 15% of their segment revenue).

Previous wording

Segment profit and profit margin increased during the 2026 Quarter primarily due to improved award fee performance within our DOE portfolio. Segment profit and profit margin declined during the 2026 Period primarily due to the recognition of a $98 million charge during the first quarter of 2026, resulting from the outcome of a court ruling on a lawsuit filed against us in 2013. Segment profit during the 2025 Period reflected an additional reserve of $28 million resulting from an adverse ruling on a long-standing claim on a project completed in 2019.

Current wording

Segment profit and profit margin increased during the 2026 Quarter primarily due to improved award fee performance and project contributions within our nuclear portfolio. Segment profit and profit margin declined during the 2026 Period primarily due to a charge of $100 million, mostly recognized in the first quarter of 2026, resulting from the outcome of a court ruling on a lawsuit filed against us in 2013. Segment profit during the 2025 Period reflected an additional reserve of $28 million resulting from an adverse ruling on a long-standing claim on a project completed in 2019.

Previous wording

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 decreased during the 2026 Quarter compared to the 2025 Quarter. New awards in the 2026 Quarter included the extension of the Savannah River DOE contract. Backlog included $900 million and $1.0 billion of unfunded government contracts as of September 30, 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

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 certain joint venture interests. 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 certain joint venture interests. 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. We will begin negotiations during the fourth quarter of 2026 to extend or renew our existing credit facility in the first quarter of 2027, subject to market conditions.

Previous wording

As of June 30, 2026, letters of credit totaling $335 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, 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.

Current wording

As of September 30, 2026, letters of credit totaling $572 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, 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 $925 million.

Previous wording

Cash and cash equivalents combined with marketable securities were $3.0 billion and $2.2 billion as of June 30, 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 $806 million as of June 30, 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.

Current wording

Cash and cash equivalents combined with marketable securities were $3.1 billion and $2.2 billion as of September 30, 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 $828 million as of September 30, 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

Cash and cash equivalents held by our consolidated variable interest entities (which totaled $320 million and $328 million as of June 30, 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 $16 million and $14 million as of June 30, 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 June 30, 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.

Current wording

Cash and cash equivalents held by our consolidated variable interest entities (which totaled $300 million and $328 million as of September 30, 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 $14 million as of both September 30, 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 September 30, 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

During 2026, we spent $816 million to repurchase and cancel 17 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 22 million shares could still be purchased under the program as of June 30, 2026. We are targeting approximately $1.4 billion in share repurchases in 2026.

Current wording

During 2026, we spent $1.1 billion to repurchase and cancel over 23 million shares of common stock under our repurchase program. In February 2026, our board authorized a 30 million share expansion to the repurchase program. Approximately 17 million shares could still be purchased under the program as of September 30, 2026. We are targeting approximately $1.4 billion in share repurchases in 2026.

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 June 30, 2026, our backlog included $119 million for ongoing legacy projects in a loss position, including approximately $68 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. We expect funding on legacy loss projects to be substantially complete by the end of 2026.

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.

Previous wording

Operating cash flow in the 2026 Period included federal and state tax payments totaling $357 million primarily related to the 2025 conversion our shares in NuScale. Operating cash flow for the 2026 Period also included distributions from a large Energy Solutions joint venture and several Mission Solutions joint ventures. During the 2026 Period, we funded $103 million on 2 consolidated infrastructure projects. Our operating cash flow for the 2025 Period was negatively impacted by increases in working capital on several large projects.

Current wording

Operating cash flow in the 2026 Period included federal and state tax payments totaling $357 million related to the 2025 conversion of our shares in NuScale. Operating cash flow for the 2026 Period also included distributions from a large Energy Solutions joint venture and several Mission Solutions joint ventures. During the 2026 Period, we funded $98 million on 2 consolidated infrastructure projects. 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.

Previous wording

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 wording

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. During the 2025 Period, we sold 10 million of shares in NuScale for net proceeds of $414 million.

Previous wording

Proceeds from sales of assets during the 2026 Period 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 Period.

Current wording

Proceeds from sales of assets during the 2026 Period included $175 million from the sale of our ownership interest in ICA-Fluor and $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 Period.

Previous wording

Investments in partnerships and joint ventures included funding to an infrastructure loss project of $64 million and $85 million during the 2026 Period and 2025 Period, respectively. During the 2025 Period, we also paid $33 million to a different infrastructure joint venture for a legal settlement.

Current wording

Investments in partnerships and joint ventures included funding to an infrastructure loss project of $64 million and $120 million during the 2026 Period and 2025 Period, respectively. Investments in partnerships and joint ventures in the 2025 Period also included $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.

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. During the 2026 Period, we repurchased 17 million shares of common stock under the repurchase program for total consideration of $816 million. Since we restarted the program in the fourth quarter of 2024, a total of 38 million shares have been purchased for $1.7 billion through June 2026.

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 Period, we repurchased over 23 million shares of common stock under the repurchase program for total consideration of $1.1 billion. Since we restarted the program in the fourth quarter of 2024, a total of 44 million shares have been purchased for $2.0 billion through September 2026.

Previous wording

During the 2025 Quarter, we redeemed $36 million of the aggregate outstanding 2028 Notes. The impact on earnings was immaterial.

Current wording

During the 2026 and 2025 Periods, we redeemed $15 million and $37 million, respectively, of the aggregate outstanding 2028 Notes, with an immaterial impact on earnings in both periods.

Previous wording

As of June 30, 2026, letters of credit totaling $335 million were outstanding under committed lines of credit. As of June 30, 2026, letters of credit totaling $762 million were outstanding under uncommitted lines of credit including letters of credit totaling $97 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 September 30, 2026, letters of credit totaling $572 million were outstanding under committed lines of credit. As of September 30, 2026, letters of credit totaling $716 million were outstanding under uncommitted lines of credit including letters of credit totaling $60 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.