Fluor Corp Files Q2 2024 10-Q

TL;DR

FLR's Q2 10-Q is in: financials updated, business moving.

AI Summary

Fluor Corporation (FLR) filed its 10-Q for the period ending June 30, 2024. The filing details the company's financial performance and position during the second quarter of 2024. Key financial data and operational updates are provided, reflecting the company's ongoing business activities and strategic initiatives.

Why It Matters

This filing provides investors and analysts with the latest financial results and operational details for Fluor Corp, crucial for understanding the company's current performance and future outlook.

Risk Assessment

Risk Level: medium — 10-Q filings are standard disclosures, but the specific financial details and any forward-looking statements within can reveal underlying risks.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter covered by the report.)
• 20240802 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• Fluor Corp (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 20240802 (date) — Filing date
• 6700 LAS COLINAS BLVD (address) — Company's business and mailing address
• IRVING (city) — Company's location
• TX (state) — Company's location
• 75039 (zip_code) — Company's zip code

FAQ

Key Financial Figures

• $0.01 — hares of the registrant's common stock, $0.01 par value, were outstanding. Table of

Filing Documents

• flr-20240630.htm (10-Q) — 1181KB
• flr2024q2ex311.htm (EX-31.1) — 10KB
• flr2024q2ex312.htm (EX-31.2) — 10KB
• flr2024q2ex321.htm (EX-32.1) — 6KB
• flr2024q2ex322.htm (EX-32.2) — 6KB
• 0001628280-24-034242.txt ( ) — 6545KB
• flr-20240630.xsd (EX-101.SCH) — 40KB
• flr-20240630_cal.xml (EX-101.CAL) — 60KB
• flr-20240630_def.xml (EX-101.DEF) — 232KB
• flr-20240630_lab.xml (EX-101.LAB) — 585KB
• flr-20240630_pre.xml (EX-101.PRE) — 408KB
• flr-20240630_htm.xml (XML) — 884KB

Notes to Financial Statements

Notes to Financial Statements 8 Item 2:

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3:

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 23 Item 4:

Controls and Procedures

Controls and Procedures 23 Changes in Consolidated Backlog (Unaudited) 24 Part II: Other Information Item 1:

Legal Proceedings

Legal Proceedings 25 Item 1A:

Risk Factors

Risk Factors 25 Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 4: Mine Safety Disclosures 25 Item 5: Other Information 25 Item 6: Exhibits 26

Signatures

Signatures 27 1 Table of Contents Glossary of Terms The definitions and abbreviations set forth below apply to the indicated terms used throughout this filing. Abbreviation/Term Definition 2023 10-K Annual Report on Form 10-K for the year ended December 31, 2023 2023 Period Six months ended June 30, 2023 2023 Quarter Three months ended June 30, 2023 2024 Period Six months ended June 30, 2024 2024 Quarter Three months ended June 30, 2024 3ME Three months ended 6ME Six months ended AMECO American Equipment Company, Inc. AOCI Accumulated other comprehensive income (loss) APIC Additional paid-in capital ASC Accounting Standards Codification ASU Accounting Standards Update CFM Customer-furnished materials COVID Coronavirus pandemic CPS Convertible preferred stock CTA Currency translation adjustment DB plan Defined benefit pension plan DOE U.S. Department of Energy DOJ U.S. Department of Justice EPC Engineering, procurement and construction EPS Earnings (loss) per share Exchange Act Securities Exchange Act of 1934 FASB Financial Accounting Standards Board Fluor Fluor Corporation G&A General and administrative expense GAAP Accounting principles generally accepted in the United States ICFR Internal control over financial reporting IT Information technology LNG Liquefied natural gas NCI Noncontrolling interests NM Not meaningful NuScale NuScale Power Corporation OCI Other comprehensive income (loss) PP&E Property, plant and equipment RSU Restricted stock units RUPO Remaining unsatisfied performance obligations SEC Securities and Exchange Commission SGI Stock growth incentive awards Stork Stork Holding B.V. and subsidiaries TSR Total shareholder return VIE Variable interest entity 2 Table of Contents

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS UNAUDITED 3ME June 30, 6ME June 30, (in millions, except per share amounts) 2024 2023 2024 2023 Revenue $ 4,227 $ 3,939 $ 7,961 $ 7,692 Cost of revenue ( 4,049 ) ( 3,741 ) ( 7,683 ) ( 7,532 ) Gross profit 178 198 278 160 G&A ( 50 ) ( 60 ) ( 110 ) ( 121 ) Foreign currency gain (loss) 48 ( 44 ) 60 ( 86 ) Operating profit (loss) 176 94 228 ( 47 ) Interest expense ( 11 ) ( 16 ) ( 23 ) ( 32 ) Interest income 49 53 100 110 Earnings before taxes 214 131 305 31 Income tax expense ( 61 ) ( 63 ) ( 111 ) ( 93 ) Net earnings (loss) 153 68 194 ( 62 ) Less: Net earnings (loss) attributable to NCI ( 16 ) 7 ( 34 ) ( 16 ) Net earnings (loss) attributable to Fluor $ 169 $ 61 $ 228 $ ( 46 ) Less: Dividends on CPS — 10 — 20 Net earnings (loss) available to Fluor common stockholders $ 169 $ 51 $ 228 $ ( 66 ) Basic EPS available to Fluor common stockholders $ 0.99 $ 0.36 $ 1.33 $ ( 0.46 ) Diluted EPS available to Fluor common stockholders 0.97 0.35 1.32 ( 0.46 ) The accompanying notes are an integral part of these financial statements. 3 Table of Contents FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) UNAUDITED 3ME June 30, 6ME June 30, (in millions) 2024 2023 2024 2023 Net earnings (loss) $ 153 $ 68 $ 194 $ ( 62 ) OCI, net of tax: Foreign currency translation adjustment ( 5 ) 19 ( 49 ) 65 Other — 1 ( 5 ) 2 Total OCI, net of tax ( 8 ) 17 ( 58 ) 63 Comprehensive income 145 85 136 1 Less: Comprehensive income (loss) attributable to NCI ( 15 ) 7 ( 33 ) ( 16 ) Comprehensive income attributable to Fluor $ 160 $ 78 $ 169 $ 17 The accompanying notes are an integral part of these financial statements. 4 Table of Contents FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET UNAUDITED (in millions, except share and per share amounts) June 3

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 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 2023 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 present fairly 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. Management has evaluated all material events occurring subsequent to June 30, 2024 through the filing date of this Q2 2024 10-Q. Quarters are typically 13 weeks in length but, due to our December 31 year-end, the number of weeks in a reporting period may vary slightly during the year and for comparable prior year periods. We report our quarterly results of operations based on periods ending on the Sunday nearest March 31, June 30 and September 30, allowing for 13-week interim reporting periods. For clarity of presentation, all periods are labeled as if the periods ended on March 31, June 30 and September 30. 2. Recent Accounting Pronouncements We did not implement any new accounting pronouncements during the 2024 Quarter. However, we are evaluating the impact of the future disclosures that may arise under recent SEC and other promulgators' recently finalized rules and outstandin

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 3. Earnings Per Share Potentially dilutive securities include CPS, 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. 3ME June 30, 6ME June 30, (in millions, except per share amounts) 2024 2023 2024 2023 Net earnings (loss) attributable to Fluor $ 169 $ 61 $ 228 $ ( 46 ) Less: Dividends on CPS — 10 — 20 Net earnings (loss) available to Fluor common stockholders 169 51 228 ( 66 ) Weighted average common shares outstanding 171 143 171 143 Diluted effect: CPS — 27 — — Stock options, RSUs and performance-based award units 3 2 2 — Convertible debt (1) — — — — Weighted average diluted shares outstanding 174 172 173 143 Basic EPS available to Fluor common stockholders $ 0.99 $ 0.36 $ 1.33 $ ( 0.46 ) Diluted EPS available to Fluor common stockholders $ 0.97 $ 0.35 $ 1.32 $ ( 0.46 ) Anti-dilutive securities not included in shares outstanding: CPS — — — 27 Stock options, RSUs and performance-based award units 2 3 2 5 Stock delivered under capped call options (2) — — — — (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 will have 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 2024 Quarter, the weighted average price per share of our common stock was less than $ 45.37 . (2) Diluted shares outstanding does not include t

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 4. Operating Information by Segment and Geographic Area 3ME June 30, 6ME June 30, (in millions) 2024 2023 2024 2023 Revenue Energy Solutions $ 1,595 $ 1,721 $ 3,028 $ 3,333 Urban Solutions 1,831 1,202 3,309 2,411 Mission Solutions 704 705 1,305 1,354 Other 97 311 319 594 Total revenue $ 4,227 $ 3,939 $ 7,961 $ 7,692 Segment profit (loss) Energy Solutions $ 75 $ 89 $ 143 $ 178 Urban Solutions 105 76 155 55 Mission Solutions 41 40 63 47 Other ( 27 ) ( 14 ) ( 49 ) ( 104 ) Total segment profit $ 194 $ 191 $ 312 $ 176 G&A ( 50 ) ( 60 ) ( 110 ) ( 121 ) Foreign currency gain (loss) 48 ( 44 ) 60 ( 86 ) Interest income (expense), net 38 37 77 78 Earnings (loss) attributable to NCI ( 16 ) 7 ( 34 ) ( 16 ) Earnings before taxes $ 214 $ 131 $ 305 $ 31 Intercompany revenue for our professional staffing business, excluded from revenue above $ 75 $ 74 $ 156 $ 143 Energy Solutions. Segment profit declined in the 2024 Quarter and 2024 Period primarily due to lower contributions from a large project in the late stages of execution. We recognized a positive forecast adjustment upon the negotiation of change orders on the same project in the 2023 Quarter and 2023 Period. Segment profit in the 2024 Quarter and 2024 Period was also impacted by a decline in the volume of execution activity for projects completed or nearing completion as well as cost growth on a construction only subcontract executed by our joint venture in Mexico resulting in a $ 39 million (or $ 0.16 per share) charge during the 2024 Period. The decline in segment profit during the 2024 Quarter and 2024 Period was partially offset by final negotiations and handover of a large upstream legacy project which was completed during the 2024 Quarter. We recorded $ 34 million (or $ 0.20 per share) for cost growth on the now-completed project during 2023 Quarter and 2023 Period. Segment profit in the 2024 Quarter and 2024 Period also included gains of $ 20 millio

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED Other . Segment profit (loss) for NuScale, Stork and AMECO follows: 3ME June 30, 6ME June 30, (in millions) 2024 2023 2024 2023 NuScale (1) $ ( 28 ) $ ( 23 ) $ ( 61 ) $ ( 52 ) Stork 1 9 12 10 AMECO — — — ( 62 ) Segment profit (loss) $ ( 27 ) $ ( 14 ) $ ( 49 ) $ ( 104 ) (1) As of June 30, 2024, we had an appro ximate 51 % ow nership in NuScale. In March 2024, we completed the sale of Stork's operations in continental Europe for $ 67 million. During the 2024 Period, we recognized a gain on sale of $ 11 million including de-recognition of Stork's net assets and cumulative foreign currency translation. During April 2024, we also entered into a definitive sale agreement for Stork's U.K. operations, which could close in late 2024, most significantly dependent upon regulatory approval. The financial statement effects for this proposed U.K. sale did not meet the requirements for discontinued operations and held-for-sale reporting as of June 30, 2024. The transaction, as agreed to, is not expected to have a material earnings impact when consummated. In March 2023, we sold our AMECO South America business, which included operations in Chile and Peru. This transaction marked the completion of the AMECO divestiture. Upon the sale of AMECO South America in the 2023 Period, we recognized a $ 60 million negative earnings impact, including $ 35 million associated with foreign currency translation. Total assets by segment are as follows: (in millions) June 30, 2024 December 31, 2023 Energy Solutions $ 956 $ 1,053 Urban Solutions 1,336 1,211 Mission Solutions 585 577 Other 226 509 Corporate 3,708 3,623 Total assets $ 6,811 $ 6,973 Revenue by project location follows: 3ME June 30, 6ME June 30, (in millions) 2024 2023 2024 2023 North America $ 2,929 $ 2,762 $ 5,299 $ 5,413 Asia Pacific (includes Australia) 558 436 1,001 761 Europe 558 530 1,333 1,042 Central and South America 136 177 203 398 Middle East and Afri

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 5. Income Taxes The effective tax rate on earnings was 28.5 % for the 2024 Quarter and 36.4 % for the 2024 Period compared to 48.1 % for the 2023 Quarter and 300.0 % for the 2023 Period. During the 2024 Quarter, we received a refund of $ 77 million, including interest, from the IRS attributable to the 2013 tax year that was originally recognized as a receivable in 2020 pursuant to the CARES Act. Tax refunds of $ 82 million remain unpaid but are anticipated to be received later in 2024. The underlying assets were included in other current assets as of December 31, 2023. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows: 3ME June 30, 6ME June 30, (In millions) 2024 2023 2024 2023 U.S statutory federal income tax expense $ 45 $ 27 $ 64 $ 6 Increase (decrease) in taxes resulting from: Valuation allowance, net 35 23 30 75 Foreign tax impacts ( 6 ) 8 1 16 Noncontrolling interest 3 ( 1 ) 7 3 Sale of AMECO South America — — — ( 10 ) Reserve for uncertain tax positions ( 21 ) — ( 4 ) — Other adjustments 2 6 10 5 Total income tax expense $ 61 $ 63 $ 111 $ 93 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 $ 199 million and $ 307 million were included in other accrued liabilities as of June 30, 2024 and December 31, 2023, respectively, and consisted primarily of provision for anticipated losses on two legacy infrastructure projects. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in "Accounts receivable, net" was $ 193 million and $ 174 million as of June 30, 2024 and December 31, 2023, respectively. Variable Interest Entities The aggregate carrying value of unconsolidated VIEs (classified under both "Investm

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 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 was no t material as of June 30, 2024 and December 31, 2023. 8. 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 a loss may be incurred in any of the matters identified below, including a loss 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. 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 positi