FLUOR CORP

1. Principles of Consolidation

These financial statements do not include footnotes and certain financial information presented annually under GAAP, and therefore, should be read in conjunction with our 2025 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. Although such estimates are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available, our reported results of operations may not necessarily be indicative of results that we expect for the full year.

The financial statements included herein are unaudited. We believe they contain all adjustments of a normal recurring nature which are necessary to fairly present our financial position and our operating results as of and for the periods presented. All significant intercompany transactions of consolidated subsidiaries are eliminated. Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. We have evaluated all material events occurring subsequent to September 30, 2026 through the filing date of this 10-Q.

2. Recent Accounting Pronouncements

In 2026, we adopted ASU 2025-05 on measurement of credit losses for accounts receivable and contract assets. This ASU introduces a practical expedient allowing us to assume that conditions at the balance sheet date remain unchanged over the life of these assets. The adoption did not have any impact on our consolidated results.

During 2024, the FASB issued ASU 2024-03 on the disaggregation of income statement expenses or "DISE." This ASU requires additional footnote disclosure of the details of certain income statement expense line items, without changing amounts reported on the consolidated income statement. ASU 2024-03 is first effective for our annual reporting for 2027 and for our quarterly reporting beginning in 2028. We do not expect this ASU to have any impact on our consolidated results.

In May 2025, the FASB issued ASU 2025-03 on identifying the accounting acquirer in transactions involving VIEs. This ASU revises the guidance to require consideration of the same factors used in other business combinations when the legal acquiree is a VIE that qualifies as a business and the transaction is effected primarily through the exchange of equity interests. ASU 2025-03 is effective for our annual and quarterly reporting for 2027. We do not expect this ASU to have any impact on our consolidated results.

In September 2025, the FASB issued ASU 2025-06 to make targeted improvements to the guidance on internal use software. This ASU removes all references to project stages in ASC 350-40 and clarifies the threshold that entities apply to begin capitalizing costs. ASU 2025-06 is effective for our annual and quarterly reporting for 2028 and may be applied using a prospective, retrospective or modified transition approach. We are assessing any impact this ASU may have on our future software expenditures.

In December 2025, the FASB issued ASU 2025‑11 on interim reporting. This ASU clarifies when interim reporting requirements apply, standardizes the form and content of interim financial statements and notes, and introduces a disclosure principle requiring entities to report events occurring after year end that have a material impact. ASU 2025‑11 is effective for our annual and quarterly reporting for 2028. We do not expect this ASU to have any impact on our consolidated results.

3. Earnings Per Share

Potentially dilutive securities include convertible debt, stock options, RSUs and performance-based award units. Diluted EPS reflects the assumed exercise or conversion of all dilutive securities using the if-converted and treasury stock methods. In computing diluted EPS, only securities that are actually dilutive are included.

(1) Holders of our 2029 Notes may convert their notes at a conversion price of $45.37 per share when the stock price exceeds $58.98 for 20 of the last 30 days preceding quarter end. Upon conversion, we will repay the principal amount of the notes in cash and may elect to convey the conversion premium in cash, shares of our common stock or a combination of both. The conversion feature of our 2029 Notes has a dilutive impact on EPS when the average market price of our common stock exceeds the conversion price of $45.37 per share for the quarter. During the 2026 Quarter, the weighted average price of our common stock exceeded $45.37 resulting in the addition of 1.7 million shares to diluted shares outstanding. During the 2025 Quarter, the weighted average price of our common stock was below the minimum conversion price.

4. Operating Information by Segment and Geographic Area

Urban Solutions. Segment profit 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 (or $0.18 per share) on a large mining joint venture project. Segment profit in the 2025 Quarter included $25 million (or $0.15 per share) for the delay-related effects on an infrastructure project. Segment profit in the 2026 Period included the second quarter recognition of $44 million (or $0.23 per share) attributable to foreign currency fluctuation, a subcontractor bankruptcy and client-driven changes on a substantially completed infrastructure project and cost growth of $62 million (or $0.44 per share) on the mining joint venture project. Comparatively, segment profit in the 2025 Period included cost growth on 3 infrastructure projects totaling $54 million (or $0.30 per share) related to subcontractor design errors, price escalation and schedule impacts.

Energy Solutions. Segment profit significantly improved during the 2026 Quarter and 2026 Period primarily due to the gain on the sale of ICA-Fluor. Segment profit in the 2025 Quarter and 2025 Period included the reversal of previously recognized revenue of $653 million (or $3.99 per share) for a court ruling on the long-completed Santos project.

Mission Solutions. Segment profit increased during the 2026 Quarter primarily due to improved award fee performance and project contributions within our nuclear portfolio. Segment profit declined during the 2026 Period primarily due to a charge of $100 million (or $0.71 per share), 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 (or $0.16 per share) resulting from an adverse ruling on a long-standing claim on a project completed in 2019.

Total assets by segment are as follows:

Revenue by project location follows:

5. Income Taxes

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:

6. Partnerships and Joint Ventures

Many of our partnership and joint venture agreements provide for capital calls to fund operations, as necessary. Investments in a loss position of $134 million and $47 million were included in other accrued liabilities as of September 30, 2026 and December 31, 2025, respectively, and consisted primarily of provisions for anticipated losses on a mining project and an Energy Solutions joint venture as of September 30, 2026 and solely on the same Energy Solutions joint venture as of

December 31, 2025. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in “Accounts receivable, net” was $241 million and $219 million as of September 30, 2026 and December 31, 2025, respectively.

In July 2026, we sold our ownership interest in ICA-Fluor for proceeds of $175 million, resulting in a pre-tax gain of $73 million and related tax expense of $18 million.

In early 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.

Variable Interest Entities

The aggregate carrying value of unconsolidated VIEs (classified under both "Investments” and “Other accrued liabilities”) was a net asset of $423 million and $425 million as of September 30, 2026 and December 31, 2025, respectively. Some of our VIEs have debt which is non-recourse to us. Our maximum exposure to loss as a result of our investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding necessary to satisfy the contractual obligations of the VIE. Future funding commitments as of September 30, 2026 for the unconsolidated VIEs were $26 million.

We are required to consolidate certain VIEs. Assets and liabilities associated with the operations of our consolidated VIEs are presented on the balance sheet. The assets of a VIE are restricted for use only for the particular VIE and are not available for our general operations. We have agreements with certain VIEs to provide financial or performance assurances to clients, as discussed elsewhere.

7. Investment in NuScale

We converted our remaining NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares upon reaching agreement with NuScale in November 2025. Also in November 2025, through an indirect, wholly-owned subsidiary, we entered into a variable price forward sale agreement whereby we pledged and granted a security interest in 71 million of our remaining shares in NuScale, while maintaining continuing involvement and ownership rights, and committed to sell, convey, transfer, assign and deliver those shares at the final settlement date in February 2026. 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.

In February 2026, we entered into 3 variable price forward sale agreements similar to the November agreement for the final 40 million of our NuScale shares. Through our banks' execution, we completed the sale of the final 40 million shares of NuScale in April 2026, generating total proceeds of $473 million, and thereby completing the divestiture of our ownership interest in NuScale.

The components of equity method earnings (loss) are as follows:

8. Guarantees

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 $12 billion as of September 30, 2026. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed. For lump-sum contracts, the performance guarantee amount is the cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, we may have recourse to third parties, such as owners, partners, subcontractors or vendors for claims. The performance guarantee obligation wasnot material as of September 30, 2026 and December 31, 2025.

9. Contingencies and Commitments

We and certain of our subsidiaries are subject to litigation, claims and other commitments and contingencies, including matters arising in the ordinary course of business, of which the asserted value may be significant. We record accruals in the financial statements for contingencies when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While there is at least a reasonable possibility that other losses may be incurred in excess of amounts accrued, management is unable to estimate the possible loss or range of loss or has determined such amounts to be immaterial, except as otherwise noted below. At present, except as set forth below, we do not expect that the ultimate resolution of any open matters will have a material adverse effect on our financial position or results of operations. However, legal proceedings and regulatory and governmental matters are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable outcomes could involve substantial monetary damages, fines, penalties and other expenditures. An unfavorable outcome might result in a material adverse impact on our business, results of operations or financial position. We might also enter into an agreement to settle one or more such matters if we determine such settlement is in the best interests of our stakeholders, and any such settlement could include substantial payments.

The following disclosures for commitments and contingencies are new or have been updated since the matter was presented in the 2025 10-K.

In March 2026, a federal court jury in the U.S. District Court for South Carolina found in Fluor’s favor onthree offour claims brought against it by private plaintiffs (known as “Relators”) alleging violations of the United States False Claims Act concerning Fluor’s support of American and allied warfighters in Afghanistan under a military support contract. On the remaining claim, which involved Fluor’s management of materials, the jury awarded $15 million in damages, which is subject to trebling under the False Claims Act. We filed post-trial motions to set aside the jury verdict and enter judgment in Fluor’s favor. The Relators have asked the Court to increase the jury verdict and for penalties and attorneys’ fees. Post-trial motions are currently pending. Following resolution of those motions, the court will enter a final judgment, which either party may appeal. A final judgment is possible by the fourth quarter of 2026. Although Fluor is challenging the jury verdict, we recognized a charge in the first quarter of 2026 reflecting the jury verdict, Fluor’s historic attorneys’ fees and an estimate of liability for the Relators’ attorneys’ fees.

In February 2026, alleged NuScale Power Corporation shareholders filed a complaint in the U.S. District Court for the District of Oregon against NuScale, two NuScale executives, and Fluor. In July 2026, the plaintiffs filed an amended complaint, adding (among others) two current Fluor employees who are former NuScale directors as individual defendants. The plaintiffs purport to represent a class of shareholders who purchased or otherwise acquired NuScale securities between March 3, 2025, and November 6, 2025, and seek to recover damages arising from alleged violations of federal securities laws. These claims are based on statements concerning NuScale’s relationship with ENTRA1 Energy LLC, which statements the plaintiffs assert were materially misleading. Plaintiffs allege Fluor failed to prevent or correct the challenged statements and then benefited from insider trading before they were corrected. We intend to contest these claims and filed a motion to dismiss in September 2026.

There have been no substantive changes to the disclosures for the following commitments and contingencies since the matter was presented in the 2025 10-K.

Fluor Australia Ltd., our wholly-owned subsidiary (“Fluor Australia”), completed a cost reimbursable engineering, procurement and construction management services project for Santos Ltd. (“Santos”) involving a large network of natural gas gathering and processing facilities in Queensland, Australia. On December 13, 2016, Santos filed an action in Queensland Supreme Court (the “Court”) against Fluor Australia, asserting various causes of action and seeking damages and/or a refund of contract proceeds paid of AUD $1.47 billion. Santos joined Fluor to the matter on the basis of a parent company guarantee issued for the project. On July 14, 2023, a panel of 3 referees appointed by the Court (the "Panel”) recommended judgment for Santos on claims that the Panel valued at approximately AUD $790 million excluding interest and costs. While the project contract contains a liability cap of approximately AUD $236 million, the Panel found that the liability cap did not apply to Santos’s claims. Following interim applications and hearings, in August 2025, the Court generally accepted the recommendations of the Panel. In December 2025, we made a payment to Santos of $649 million, net of GST, in accordance with the Court’s orders. Santos’s legal fees will be assessed in a separate process. After allowing for committed insurance proceeds and reserves, we recognized a reduction to revenue of $643 million reflecting the net estimated impact of the judgment. Discussions with our insurers are ongoing and, if successful, may further reduce the ultimate obligation. We have appealed the Court's decision to the Queensland Court of Appeal and the appeal hearing concluded in August 2026. We expect a decision in or before the first quarter of 2027. In mid-October 2025, five of our more than 30 insurers filed a complaint in the Superior Court of California, County of Orange, disputing coverage by seeking various declaratory judgments. We have reached an agreement with these carriers to dismiss the action without prejudice subject to a standstill/tolling agreement.

In September 2025, purported shareholders filed a complaint against Fluor and certain of its current and former executives in the U.S. District Court for the Northern District of Texas. The plaintiffs purport to represent a class of shareholders who purchased or otherwise acquired Fluor securities between February 18, 2025 and July 31, 2025, and seek to recover damages arising from alleged violations of federal securities laws. These claims are based on statements concerning market conditions, rising costs on three infrastructure projects and the effectiveness of our risk mitigation strategies, which statements the plaintiffs assert were materially misleading. We intend to contest these claims, and are awaiting a decision from the Court in respect of our motion to dismiss, upon which briefing was completed in August 2026.

In October 2025, a purported shareholders' derivative action was filed against current and former members of our Board of Directors, as well as certain current and former executives in the U.S. District Court for the Northern District of Texas. Fluor is named as a nominal defendant in the action. The action purports to assert claims on behalf of Fluor and makes substantially the same factual allegations as the securities class action matter discussed above and seeks various forms of declaratory and monetary relief, as well as corporate reforms. Four further derivative actions were filed in November and December 2025, and June 2026, all of which are also based on the same factual allegations. We intend to contest the derivative claims, which are all now stayed. In addition, in November 2025, a Fluor shareholder made a Section 220 demand to Fluor for certain books and records. Further, three investigation demands were made on Fluor’s Board (in January, February and June 2026).

10. Contract Assets and Liabilities

The following summarizes information about our contract assets and liabilities:

We periodically evaluate our project forecasts and the amounts recognized with respect to claims. We include estimated amounts for claims in project revenue to the extent it is probable we will realize those amounts. As of September 30, 2026 and December 31, 2025, we had recorded $226 million and $214 million, respectively, of revenue associated with claims for costs incurred to date. Additional costs, which will increase this balance over time, are expected to be incurred in future periods. We had $97 million and $105 million of back charges that may be disputed as of September 30, 2026 and December 31, 2025, respectively.

11. Remaining Unsatisfied Performance Obligations

We estimate that our RUPO will be satisfied over the following periods:

12. Debt and Letters of Credit

Debt consisted of the following:

Credit Facility

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. As of September 30, 2026, we had not made any borrowings under our credit facility line and maintained a borrowing capacity of $925 million.

Uncommitted Lines of Credit

As of September 30, 2026, letters of credit totaling $716 million were outstanding under uncommitted lines of credit.

Redemption of 2028 Notes

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.

13. Fair Value Measurements

The following table delineates assets and liabilities that are measured at fair value on a recurring basis:

(1) We recognized 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. As of September 30, 2026, weno longer held an investment in NuScale. Our investment in NuScale consisted of 111 million shares as of December 31, 2025.

(2) In February 2026, we entered into 3 variable price forward sale agreements (described elsewhere) for our NuScale shares. The fair value of these forward contracts, which met the definition of a derivative, represented the difference between the closing price of NuScale at the balance sheet date and the year-to-date settlement price calculated per the agreement plus a discounted growth assumption through the estimated settlement date. These forward contracts were fully settled in April 2026. As a result, no derivative asset remained as of September 30, 2026. The derivative assets were included in other current assets on the balance sheet as of December 31, 2025.

The following summarizes information about financial instruments that are not required to be measured at fair value:

(1) Cash consists of bank deposits. Carrying amounts approximate fair value.

(2) Cash equivalents and marketable securities primarily consist of time deposits. Carrying amounts approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value.

(3) The fair value of the Senior Notes was estimated based on quoted market prices and Level 2 inputs.

14. Stock-Based Compensation

Our executive and director stock-based compensation plans are described more fully in the 2025 10-K.

Equity Awards

Performance-based award units totaling 170,109 and 278,193 were awarded to most officers, including all Section 16 officers, during the 2026 and 2025 Periods, respectively. These awards generally cliff vest after 3 years and contain annual performance conditions for each of the 3 years of the vesting period. Under GAAP, performance-based elements of such awards are not deemed granted until the performance targets have been established. The performance targets for each year are generally established in the first quarter.

For awards granted under the 2026 and 2025 performance award plan,70% of the award is earned based on achievement of earnings before taxes targets over three 1-year periods and 30% of the award is earned based on our 3-year cumulative TSR relative to companies in the S&P 500 on the date of the award. For awards granted under the 2024 performance award plan,80% of the award is earned based on achievement of earnings before taxes targets over three 1-year periods and 20% of the award is earned based on our 3-year cumulative TSR relative to companies in the S&P 500 on the date of the award. The performance component of these awards is deemed granted when targets are set while the TSR component of these awards is deemed granted upon issuance. During the 2026 Period, the following units were granted based upon the establishment of performance targets:

For awards granted under these performance award plans, the number of units are adjusted at the end of each performance period based on attainment of certain performance targets and on market conditions, pursuant to the terms of the award agreements. As of September 30, 2026, there were 140,888 shares associated with performance awards that had been awarded to employees, but which are not deemed granted due to the underlying performance targets having not yet been established.

Liability Awards

SGI awards granted to executives vest and become payable at a rate of 1/3 of the total award each year. Performance-based awards were awarded to non-Section 16 executives and will be settled in cash on a single date each year.