Fluor Corp Q3 2024 10-Q Filing

TL;DR

FLR's Q3 10-Q is in. Check financials for latest performance.

AI Summary

Fluor Corporation (FLR) filed its 10-Q for the period ending September 30, 2024. The filing details the company's financial performance and position during the third quarter of 2024. Specific financial figures and operational details are presented within the report, reflecting the company's ongoing business activities and strategic initiatives.

Why It Matters

This filing provides investors and analysts with a detailed look at Fluor's financial health and operational performance for the third quarter of 2024, crucial for understanding the company's current standing and future prospects.

Risk Assessment

Risk Level: medium — 10-Q filings are standard financial reports, but the specific content can reveal significant financial or operational risks.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter covered by the report.)
• 2024-11-08 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• Fluor Corp (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of the reporting period
• 2024-11-08 (date) — Filing date
• 6700 LAS COLINAS BLVD (address) — Company's business and mailing address
• IRVING, TX (location) — City and State of company's address

FAQ

Key Financial Figures

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

Filing Documents

• flr-20240930.htm (10-Q) — 1275KB
• flr2024q3ex311.htm (EX-31.1) — 10KB
• flr2024q3ex312.htm (EX-31.2) — 10KB
• flr2024q3ex321.htm (EX-32.1) — 6KB
• flr2024q3ex322.htm (EX-32.2) — 6KB
• 0001628280-24-046432.txt ( ) — 6803KB
• flr-20240930.xsd (EX-101.SCH) — 43KB
• flr-20240930_cal.xml (EX-101.CAL) — 63KB
• flr-20240930_def.xml (EX-101.DEF) — 244KB
• flr-20240930_lab.xml (EX-101.LAB) — 608KB
• flr-20240930_pre.xml (EX-101.PRE) — 422KB
• flr-20240930_htm.xml (XML) — 911KB

Notes to Financial Statements

Notes to Financial Statements 9 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 20 Item 3:

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 24 Item 4:

Controls and Procedures

Controls and Procedures 24 Changes in Consolidated Backlog (Unaudited) 25 Part II: Other Information Item 1:

Legal Proceedings

Legal Proceedings 26 Item 1A:

Risk Factors

Risk Factors 26 Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 26 Item 4: Mine Safety Disclosures 26 Item 5: Other Information 26 Item 6: Exhibits 27

Signatures

Signatures 28 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 YTD Nine months ended September 30, 2023 2023 Quarter Three months ended September 30, 2023 2024 YTD Nine months ended September 30, 2024 2024 Quarter Three months ended September 30, 2024 3ME Three months ended 9ME Nine 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 CARES Act Coronavirus Aid, Relief, and Economic Security Act CFM Customer-furnished materials CODM Chief operating decision maker COVID Coronavirus pandemic CPS Convertible preferred stock CTA Currency translation adjustment DOE U.S. Department of Energy 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 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 September 30, 9ME September 30, (in millions, except per share amounts) 2024 2023 2024 2023 Revenue $ 4,094 $ 3,963 $ 12,055 $ 11,654 Cost of revenue ( 4,006 ) ( 3,712 ) ( 11,689 ) ( 11,243 ) Gross profit 88 251 366 411 G&A ( 37 ) ( 56 ) ( 147 ) ( 177 ) Foreign currency gain (loss) ( 2 ) 23 58 ( 62 ) Operating profit 49 218 277 172 Interest expense ( 11 ) ( 14 ) ( 35 ) ( 47 ) Interest income 48 56 149 166 Earnings before taxes 86 260 391 291 Income tax expense ( 61 ) ( 79 ) ( 172 ) ( 172 ) Net earnings 25 181 219 119 Less: Net earnings (loss) attributable to NCI ( 29 ) ( 25 ) ( 63 ) ( 42 ) Net earnings attributable to Fluor $ 54 $ 206 $ 282 $ 161 Less: Dividends on CPS — 10 — 29 Less: Make-whole payment on conversion of CPS — 27 — 27 Net earnings available to Fluor common stockholders $ 54 $ 169 $ 282 $ 105 Basic EPS available to Fluor common stockholders $ 0.32 $ 1.18 $ 1.65 $ 0.73 Diluted EPS available to Fluor common stockholders $ 0.31 $ 1.15 $ 1.63 $ 0.72 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 September 30, 9ME September 30, (in millions) 2024 2023 2024 2023 Net earnings $ 25 $ 181 $ 219 $ 119 OCI, net of tax: Foreign currency translation adjustment 37 ( 25 ) ( 12 ) 40 ( 6 ) — ( 11 ) ( 4 ) Other — ( 1 ) ( 5 ) 1 Total OCI, net of tax 31 ( 26 ) ( 28 ) 37 Comprehensive income 56 155 191 156 Less: Comprehensive income (loss) attributable to NCI ( 28 ) ( 22 ) ( 62 ) ( 39 ) Comprehensive income attributable to Fluor $ 84 $ 177 $ 253 $ 195 The accompanying notes are an integral part of these financial statements. 4 Table of Contents FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET UNAUDITED (in

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 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, 2024 through the filing date of this Q3 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. Beginning in October 2024, based principally on their equity sales, we no longer met the criteria to consolidate NuScale. As a result, we will deconsolidate NuScale and anticipate recognizing a gain of $ 1.6 billion in the fourth quarter of 2024, based on a stock price of $ 13.1

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 September 30, 9ME September 30, (in millions, except per share amounts) 2024 2023 2024 2023 Net earnings attributable to Fluor $ 54 $ 206 $ 282 $ 161 Less: Dividends on CPS — 10 — 29 Less: Make-whole payment on conversion of CPS — 27 — 27 Net earnings available to Fluor common stockholders 54 169 282 105 Weighted average common shares outstanding 171 144 171 143 Diluted effect: CPS — — — — Stock options, RSUs and performance-based award units 3 3 3 3 Convertible debt (1) — — — — Weighted average diluted shares outstanding 174 147 174 146 Basic EPS available to Fluor common stockholders $ 0.32 $ 1.18 $ 1.65 $ 0.73 Diluted EPS available to Fluor common stockholders $ 0.31 $ 1.15 $ 1.63 $ 0.72 Anti-dilutive securities not included in shares outstanding: CPS — 26 — 27 Stock options, RSUs and performance-based award units 1 2 2 2 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 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 2024 Quarter, the weighted average price per share of our common stock was $ 47.17 which resulted in the additio

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 4. Operating Information by Segment and Geographic Area 3ME September 30, 9ME September 30, (in millions) 2024 2023 2024 2023 Revenue Energy Solutions $ 1,428 $ 1,553 $ 4,456 $ 4,886 Urban Solutions 1,931 1,431 5,240 3,842 Mission Solutions 635 655 1,940 2,009 Other 100 324 419 917 Total revenue $ 4,094 $ 3,963 $ 12,055 $ 11,654 Segment profit (loss) Energy Solutions $ 50 $ 177 $ 193 $ 355 Urban Solutions 68 66 223 121 Mission Solutions 45 38 108 84 Other ( 46 ) ( 5 ) ( 95 ) ( 108 ) Total segment profit $ 117 $ 276 $ 429 $ 452 G&A ( 37 ) ( 56 ) ( 147 ) ( 177 ) Foreign currency gain (loss) ( 2 ) 23 58 ( 62 ) Interest income (expense), net 37 42 114 120 Earnings (loss) attributable to NCI ( 29 ) ( 25 ) ( 63 ) ( 42 ) Earnings before taxes $ 86 $ 260 $ 391 $ 291 Intercompany revenue for our professional staffing business, excluded from revenue above $ 70 $ 77 $ 226 $ 221 Energy Solutions. Segment profit declined in the 2024 Quarter and 2024 YTD primarily due to the initial recognition of inflation-adjusted variable consideration on certain downstream projects during the 2023 Quarter and 2023 YTD. Segment profit in 2024 YTD was also impacted by lower contributions from a large project in the late stages of execution. We recognized a positive adjustment upon the negotiation of change orders on the same project in 2023 YTD. Further, cost growth on a construction-only subcontract executed by our joint venture in Mexico resulted in a $ 57 million (or $ 0.23 per share) charge during 2024 YTD. The decrease in segment profit during 2024 YTD was partially offset by final negotiations and handover of a large upstream legacy project which was completed during the second quarter of 2024. We recorded $ 58 million (or $ 0.34 per share) for cost growth on the now-completed project during 2023 YTD. Segment profit in the 2024 Quarter and 2024 YTD also included gains of $ 20 million and $ 47 million, respectively, on em

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED Other . Segment profit (loss) for NuScale, Stork and AMECO follows: 3ME September 30, 9ME September 30, (in millions) 2024 2023 2024 2023 NuScale (1) $ ( 40 ) $ ( 19 ) $ ( 100 ) $ ( 71 ) Stork ( 6 ) 14 6 25 AMECO — — ( 1 ) ( 62 ) Segment profit (loss) $ ( 46 ) $ ( 5 ) $ ( 95 ) $ ( 108 ) (1) As of September 30, 2024, we had an approximate 50 % ownership in NuScale. In March 2024, we completed the sale of Stork's operations in continental Europe for $ 67 million. During 2024 YTD, 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 as early as the first quarter of 2025, 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 September 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 2023 YTD, 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) September 30, 2024 December 31, 2023 Energy Solutions $ 847 $ 1,053 Urban Solutions 1,462 1,211 Mission Solutions 676 577 Other 218 509 Corporate 3,897 3,623 Total assets $ 7,100 $ 6,973 Revenue by project location follows: 3ME September 30, 9ME September 30, (in millions) 2024 2023 2024 2023 North America $ 2,877 $ 2,609 $ 8,177 $ 8,022 Asia Pacific (includes Australia) 475 442 1,476 1,203 Europe 590 640 1,923 1,682 Central a

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 5. Income Taxes The effective tax rate on earnings was 70.9 % for the 2024 Quarter and 44.0 % for 2024 YTD compared to 30.4 % for the 2023 Quarter and 59.1 % for 2023 YTD. During 2024 YTD, we received a refund of $ 169 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. 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 September 30, 9ME September 30, (In millions) 2024 2023 2024 2023 U.S statutory federal income tax expense 18 $ 55 82 $ 61 Increase (decrease) in taxes resulting from: Valuation allowance, net 16 18 46 94 Foreign tax impacts 13 ( 2 ) 14 14 Noncontrolling interest 6 5 14 9 Sale of AMECO South America — — — ( 10 ) Reserve for uncertain tax positions 2 — ( 2 ) — Other adjustments 4 — 13 3 Total income tax expense $ 61 $ 79 $ 172 $ 172 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 $ 230 million and $ 307 million were included in other accrued liabilities as of September 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 $ 183 million and $ 174 million as of September 30, 2024 and December 31, 2023, respectively. Variable Interest Entities The aggregate carrying value of unconsolidated VIEs (classified under both "Investments" and "Other accrued liabilities") was a net asset of $ 183 million and $ 91 million as of September 3

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 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, suc