Fluor Swings to Q3 Loss Amid Project Setbacks, NuScale Investment Soars

Ticker: FLR · Form: 10-Q · Filed: Nov 7, 2025

Sentiment: mixed

Topics: EPC, Energy Sector, Infrastructure, Project Management, Legal Risks, Equity Investments, Q3 Earnings

Related Tickers: FLR, SMR

TL;DR

**Fluor's Q3 was a disaster with a massive loss, but don't panic yet – NuScale's investment is carrying the year, making it a mixed bag for traders.**

AI Summary

FLUOR CORP reported a significant net loss of $697 million for the three months ended September 30, 2025, a sharp decline from a net income of $54 million in the same period of 2024. Revenue also decreased to $3,368 million from $4,094 million year-over-year. For the nine months ended September 30, 2025, the company posted a net income of $1,522 million, a substantial increase from $282 million in the prior year, primarily driven by a $2,418 million equity method earnings gain. Key business changes include a $653 million revenue reversal in Energy Solutions due to a court ruling on the Santos project and a $25 million adjustment for delay-related effects on an Urban Solutions infrastructure project. The company's total assets grew to $11,468 million from $9,143 million at December 31, 2024, largely due to a $1,918 million increase in investments, particularly in NuScale. Risks include ongoing project cost growth, arbitration rulings, and the impact of foreign currency fluctuations, which resulted in a $47 million loss for the nine months ended September 30, 2025. Strategic outlook involves the ramp-up of recently awarded projects in life sciences and mining within Urban Solutions, and the expectation of immaterial results from the 'Other' segment going forward.

Why It Matters

Fluor's Q3 net loss of $697 million, despite a strong nine-month net income of $1,522 million, signals significant project-specific challenges, particularly the $653 million revenue reversal on the Santos project. This volatility impacts investor confidence, as earnings are heavily influenced by large, lumpy equity method gains rather than consistent operational profitability. For employees, project delays and arbitration rulings could signal instability in certain segments. Customers might face increased scrutiny on project execution and cost management, while the broader market for EPC services could see Fluor's competitive position challenged by these operational setbacks, even as its strategic investment in NuScale shows substantial growth.

Risk Assessment

Risk Level: medium — The company reported a net loss of $697 million for the 2025 Quarter, a significant downturn from a $54 million net income in the 2024 Quarter. This was largely driven by a $653 million revenue reversal in the Energy Solutions segment due to a court ruling on the Santos project, indicating substantial project execution and legal risks. While the nine-month net earnings are positive at $1,522 million, this is heavily reliant on a $2,418 million equity method earnings gain, suggesting operational profitability is inconsistent.

Analyst Insight

Investors should scrutinize the sustainability of Fluor's nine-month net earnings, which are heavily skewed by the NuScale investment. Focus on the core operational profitability, particularly the Energy Solutions segment's ability to mitigate future project-related reversals and cost overruns. Consider if the NuScale investment provides sufficient long-term value to offset the current operational volatility.

Financial Highlights

revenue
$11,327M
total Assets
$11,468M
net Income
$1,522M
eps
$9.21
gross Margin
-2.2%
cash Position
$2,776M
revenue Growth
-6.0%

Revenue Breakdown

SegmentRevenueGrowth
Urban Solutions$2,343M+21.3%
Energy Solutions$262M-81.7%
Mission Solutions$761M+21.4%
Other$2M-98.0%

Key Numbers

Key Players & Entities

FAQ

What caused Fluor Corporation's net loss in the third quarter of 2025?

Fluor Corporation reported a net loss of $697 million for the three months ended September 30, 2025, primarily due to a $653 million revenue reversal in its Energy Solutions segment. This reversal was a direct result of a court ruling concerning the long-completed Santos project in Australia, requiring a payment to the customer.

How did Fluor's investment in NuScale Power Corporation impact its financial results?

Fluor's investment in NuScale Power Corporation significantly boosted its nine-month financial results. For the nine months ended September 30, 2025, Fluor recognized $2,418 million in equity method earnings from NuScale, which was a primary factor in the company's overall net earnings of $1,522 million for that period. The investment in NuScale also increased to $4,186 million as of September 30, 2025.

What were the key revenue changes across Fluor's business segments?

For the three months ended September 30, 2025, Urban Solutions revenue increased to $2,343 million from $1,931 million, while Energy Solutions revenue significantly decreased to $262 million from $1,428 million due to the Santos project reversal. Mission Solutions revenue increased to $761 million from $635 million, and the 'Other' segment revenue became immaterial at $2 million.

What specific project issues affected Fluor's Urban Solutions segment profit?

Fluor's Urban Solutions segment profit decreased in the 2025 Quarter due to a $25 million adjustment for delay-related effects on an infrastructure project. For the 2025 Period, segment profit included forecast adjustments totaling $54 million for cost growth on three infrastructure projects, stemming from subcontracted design errors, price escalation, and schedule impacts.

What is the impact of the Santos project court ruling on Fluor's Energy Solutions segment?

The court ruling on the Santos project in Australia led to a significant reversal of previously recognized revenue of $653 million in Fluor's Energy Solutions segment for the 2025 Quarter. This ruling will require a payment to the customer once the judgment is formally entered, directly impacting the segment's profitability.

How has Fluor's share repurchase program affected its outstanding shares?

Fluor's share repurchase program led to a decrease in outstanding common stock. As of October 31, 2025, 161,182,507 shares of common stock were outstanding, down from 169,228,759 shares at December 31, 2024. The company repurchased $365 million of common stock during the nine months ended September 30, 2025.

What new accounting standards did Fluor adopt or expect to adopt?

In 2025, Fluor adopted ASU 2023-05 regarding joint ventures. The company expects to adopt ASU 2023-09 (income taxes paid disclosure) in 2025, ASU 2025-05 (credit losses for accounts receivable) in 2026, and ASU 2024-03 (disaggregation of income statement expenses) and ASU 2025-03 (identifying accounting acquirer in VIEs) in 2027. ASU 2025-06 (internal use software) is effective in 2028, and its impact is being assessed.

What was Fluor's operating cash flow for the nine months ended September 30, 2025?

Fluor's operating cash flow for the nine months ended September 30, 2025, was a negative $21 million. This contrasts sharply with a positive operating cash flow of $501 million for the same period in 2024, indicating a significant reduction in cash generated from core operations.

What is the significance of the 'Other' segment for Fluor going forward?

The 'Other' segment, which previously included NuScale and Stork operations, is expected to be immaterial for Fluor in 2025 and beyond. NuScale was deconsolidated in Q4 2024, and Stork's operations were sold, including a $7 million gain on the sale of Stork's U.K. operations in the 2025 Period.

How did foreign currency fluctuations impact Fluor's earnings?

Foreign currency fluctuations resulted in a loss of $4 million for the three months ended September 30, 2025, and a more substantial loss of $47 million for the nine months ended September 30, 2025. This contrasts with a gain of $58 million in the nine months ended September 30, 2024, indicating a negative shift in currency impacts on earnings.

Risk Factors

Industry Context

Fluor operates in the engineering, procurement, and construction (EPC) sector, which is cyclical and sensitive to global economic conditions and capital spending by clients in energy, infrastructure, and government sectors. The industry faces intense competition, project execution risks, and is subject to regulatory scrutiny. Trends include a growing demand for sustainable infrastructure, energy transition projects, and advanced manufacturing facilities.

Regulatory Implications

Fluor's operations are subject to various regulations, including environmental standards, labor laws, and international trade policies. Adverse rulings, such as the Santos project court decision, highlight the significant impact of legal and regulatory environments on financial performance. Compliance with evolving environmental and safety regulations is also critical.

What Investors Should Do

  1. Monitor the impact of the Santos project court ruling and any further developments.
  2. Analyze the performance and integration of new projects in Urban Solutions.
  3. Assess the ongoing investment in NuScale and its future contribution to earnings.
  4. Evaluate the company's ability to manage project cost growth and execution risks.

Key Dates

Glossary

Equity Method Earnings
The portion of a company's net income or loss that is recognized from its investment in an associate or joint venture, where the investor has significant influence but not control. (A significant driver of Fluor's net income for the nine months ended September 30, 2025, totaling $2,418 million.)
Revenue Reversal
The act of canceling or undoing previously recognized revenue, often due to a change in circumstances, legal rulings, or contract disputes. (Fluor experienced a $653 million revenue reversal in Energy Solutions due to a court ruling on the Santos project.)
VIEs
Variable Interest Entities are legal entities whose ownership interests lack sufficient equity at risk for the entity to finance its activities without additional financial support from other parties. (Amounts related to VIEs are noted in various line items on the balance sheet, indicating their involvement in Fluor's financial structure.)
NCI
Noncontrolling Interest represents the portion of equity of a subsidiary that is not attributable to the parent company. (Net earnings (loss) attributable to NCI are subtracted to arrive at net earnings (loss) attributable to Fluor.)
Basic EPS
Earnings Per Share calculated by dividing the net income or loss attributable to common shareholders by the weighted-average number of common shares outstanding. (Fluor reported a basic EPS loss of $4.30 for the three months ended September 30, 2025, compared to $9.21 earnings per share for the nine months ended September 30, 2025.)

Year-Over-Year Comparison

Fluor Corporation reported a significant downturn in its three-month performance, with net earnings plummeting from $54 million to a $697 million net loss, and revenue decreasing from $4,094 million to $3,368 million. This was largely driven by a substantial $653 million revenue reversal in Energy Solutions due to a court ruling. However, for the nine-month period, net earnings saw a substantial increase from $282 million to $1,522 million, primarily due to $2,418 million in equity method earnings. Total assets have grown considerably from $9,143 million to $11,468 million, with a notable increase in investments, particularly in NuScale.

Filing Stats: 5,215 words · 21 min read · ~17 pages · Grade level 16.1 · Accepted 2025-11-06 19:00:53

Key Financial Figures

Filing Documents

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 18 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 abbreviations and definitions set forth below apply to the Fluor-specific terms used throughout this filing. Abbreviation/Term Definition Fluor Fluor Corporation NuScale NuScale Power Corporation SGI Stock growth incentive awards Stork Stork Holding B.V. and subsidiaries The abbreviations and definitions set forth below apply to the indicated terms used throughout this filing. Abbreviation/Term Definition 2024 10-K Annual Report on Form 10-K for the year ended December 31, 2024 2024 Period Nine months ended September 30, 2024 2024 Quarter Three months ended September 30, 2024 2025 Period Nine months ended September 30, 2025 2025 Quarter Three months ended September 30, 2025 3ME Three months ended 9ME Nine months ended AOCI Accumulated other comprehensive income (loss) APIC Additional paid-in capital ASC Accounting Standards Codification ASU Accounting Standards Update CFM Customer-furnished materials CTA Currency translation adjustment DOD U.S. Department of Defense (recently renamed Department of War) 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 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 OBBB One Big Beautiful Bill, signed into U.S. law in July 2025 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 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) 2025 2024 2025 2024 Revenue $ 3,368 $ 4,094 $ 11,327 $ 12,055 Cost of revenue ( 3,817 ) ( 4,006 ) ( 11,580 ) ( 11,689 ) Gross profit (loss) ( 449 ) 88 ( 253 ) 366 G&A ( 43 ) ( 37 ) ( 131 ) ( 147 ) Foreign currency gain (loss) ( 4 ) ( 2 ) ( 47 ) 58 Operating profit (loss) ( 496 ) 49 ( 431 ) 277 Interest expense ( 11 ) ( 11 ) ( 31 ) ( 35 ) Interest income 24 48 79 149 Earnings (loss) before taxes ( 483 ) 86 ( 383 ) 391 Income tax benefit (expense) (including $ 230 million tax benefit and $( 454 ) million tax expense attributable to equity method earnings (loss) in 2025 Quarter and 2025 Period, respectively) 177 ( 61 ) ( 536 ) ( 172 ) Net earnings (loss) before equity method earnings (loss) ( 306 ) 25 ( 919 ) 219 Equity method earnings (loss) ( 401 ) — 2,418 — Net earnings (loss) ( 707 ) 25 1,499 219 Less: Net earnings (loss) attributable to NCI ( 10 ) ( 29 ) ( 23 ) ( 63 ) Net earnings (loss) attributable to Fluor $ ( 697 ) $ 54 $ 1,522 $ 282 Basic EPS $ ( 4.30 ) $ 0.32 $ 9.21 $ 1.65 Diluted EPS $ ( 4.30 ) $ 0.31 $ 9.13 $ 1.63 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) 2025 2024 2025 2024 Net earnings (loss) $ ( 707 ) $ 25 $ 1,499 $ 219 OCI, net of taxes: Foreign currency translation adjustment ( 5 ) 37 66 ( 12 ) Other 1 ( 6 ) 2 ( 16 ) Total OCI, net of taxes ( 4 ) 31 68 ( 28 ) Comprehensive income (loss) ( 711 ) 56 1,567 191 Less: Comprehensive income (loss) attributable to NCI ( 10 ) ( 28 ) ( 23 ) ( 62 ) Comprehensive income (loss) attributable to Fluor $ ( 701 ) $ 84 $ 1,590 $ 253 The accompanying notes are an integral part of these financial state

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 2024 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, 2025 through the filing date of this 10-Q. 2. Recent Accounting Pronouncements In 2025, we adopted ASU 2023-05, which requires certain joint ventures to apply a new basis of accounting upon formation by recognizing and initially measuring most of their assets and liabilities at fair value. The guidance does not apply to joint ventures that may be proportionately consolidated and those that are collaborative arrangements. The adoption did not have any impact on our consolidated results. During 2023, the FASB issued ASU 2023-09, which requires us to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes and to provide more details in our rate reconciliation about items that meet a quantitative threshold. ASU 2023-09 is effective for annual reporting beginning in 2025.

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 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. 3ME September 30, 9ME September 30, (in millions, except per share amounts) 2025 2024 2025 2024 Net earnings (loss) attributable to Fluor $ ( 697 ) $ 54 $ 1,522 $ 282 Weighted average common shares outstanding 162 171 165 171 Diluted effect: Stock options, RSUs and performance-based award units — 3 1 3 Convertible debt (1) — — — — Weighted average diluted shares outstanding 162 174 167 174 Basic EPS $ ( 4.30 ) $ 0.32 $ 9.21 $ 1.65 Diluted EPS $ ( 4.30 ) $ 0.31 $ 9.13 $ 1.63 Anti-dilutive securities not included in shares outstanding: Stock options, RSUs and performance-based award units 3 1 1 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 2025 Quarter, the weighted average price of our common stock was below the minimum conversion price. During the 2024 Quarter, the weighted average price of our common stock was $ 47.17 which resulted in the addition of 484,208 shares to diluted shares outstanding during the 2024 Quarter. 9 Table of Contents FLUOR CORPORATION

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) 2025 2024 2025 2024 Revenue Urban Solutions $ 2,343 $ 1,931 $ 6,570 $ 5,240 Energy Solutions 262 1,428 2,611 4,456 Mission Solutions 761 635 2,120 1,940 Other 2 100 26 419 Total revenue $ 3,368 $ 4,094 $ 11,327 $ 12,055 Cost of revenue Urban Solutions $ ( 2,297 ) $ ( 1,863 ) $ ( 6,447 ) $ ( 5,011 ) Energy Solutions ( 793 ) ( 1,376 ) ( 3,077 ) ( 4,260 ) Mission Solutions ( 724 ) ( 584 ) ( 2,038 ) ( 1,819 ) Other ( 3 ) ( 182 ) ( 19 ) ( 598 ) Total cost of revenue $ ( 3,817 ) $ ( 4,005 ) $ ( 11,581 ) $ ( 11,689 ) Segment profit (loss) Urban Solutions $ 61 $ 68 $ 160 $ 223 Energy Solutions ( 533 ) 50 ( 470 ) 193 Mission Solutions 34 45 73 108 Other ( 1 ) ( 46 ) 7 ( 95 ) Total segment profit (loss) $ ( 439 ) $ 117 $ ( 230 ) $ 429 G&A ( 43 ) ( 37 ) ( 131 ) ( 147 ) Foreign currency gain (loss) ( 4 ) ( 2 ) ( 47 ) 58 Interest income (expense), net 13 37 48 114 Earnings (loss) attributable to NCI ( 10 ) ( 29 ) ( 23 ) ( 63 ) Earnings (loss) before taxes $ ( 483 ) $ 86 $ ( 383 ) $ 391 Intercompany revenue for our professional staffing business, excluded from revenue above $ 58 $ 70 $ 178 $ 226 Urban Solutions. Segment profit in the 2025 Quarter and 2025 Period decreased due to an adjustment of $ 25 million (or $ 0.15 per share) for delay-related effects on an infrastructure project partially offset by a favorable negotiation with a designer on a separate infrastructure project as well as the ramp up of recently awarded projects in life sciences and mining. Segment profit in the 2025 Period included forecast adjustments totaling $ 54 million (or $ 0.30 per share) for cost growth on 3 infrastructure projects related to subcontracted design errors, price escalation and schedule impacts partially offset by a refinement of our expected recovery from claims against our subcontractors on these same pr

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED Mission Solutions. Segment profit declined during the 2025 Quarter due to the recognition of allowances for certain questioned and disputed costs on a DOD project mostly offset by the favorable resolution of a long-standing claim. Segment profit declined during the 2025 Period primarily due to the recognition of revenue reserves of $ 28 million (or $ 0.16 per share) resulting from a ruling on a long-standing claim for a project completed in 2019. Other . Other included the operations of NuScale prior to deconsolidation in the fourth quarter of 2024 and the operations of the Stork businesses prior to their sale. In the 2025 Period, we completed the sale of Stork's operations in the U.K. and recognized a gain on sale of $ 7 million compared to an $ 11 million gain on the sale of Stork's operations in continental Europe in the 2024 Period. We expect results from our Other segment to be immaterial for 2025 and beyond. Total assets by segment are as follows: (in millions) September 30, 2025 December 31, 2024 Urban Solutions $ 1,931 $ 1,472 Energy Solutions 769 729 Mission Solutions 809 734 Other 4 72 Corporate 3,769 3,870 Investment in NuScale 4,186 2,266 Total assets $ 11,468 $ 9,143 Revenue by project location follows: 3ME September 30, 9ME September 30, (in millions) 2025 2024 2025 2024 North America $ 2,921 $ 2,877 $ 8,331 $ 8,177 Asia Pacific (includes Australia) ( 365 ) 475 257 1,476 Europe 648 590 2,212 1,923 Central and South America 127 113 412 315 Middle East and Africa 37 39 115 164 Total revenue $ 3,368 $ 4,094 $ 11,327 $ 12,055 11 Table of Contents FLUOR CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 5. Income Taxes The effective tax rate on earnings, including equity method earnings, was 20 % for the 2025 Quarter and 26 % for the 2025 Period compared to 71 % for the 2024 Quarter and 44 % for the 2024 Period. A reconciliation of U.S. statutory federal income tax expense to income tax expense follows: 3ME September 30, 9ME September 30, (In millions) 2025 2024 2025 2024 U.S statutory federal income tax (benefit) expense $ ( 186 ) $ 18 $ 427 $ 82 Increase (decrease) in taxes resulting from: Valuation allowance, net 71 16 79 46 Foreign tax impacts ( 55 ) 13 ( 63 ) 14 Noncontrolling interest 2 6 5 14 Reserve for uncertain tax positions 1 2 ( 1 ) ( 2 ) Other adjustments 1 4 14 13 Total income tax (benefit) expense $ ( 177 ) $ 61 $ 536 $ 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 $ 58 million and $ 292 million were included in other accrued liabilities as of September 30, 2025 and December 31, 2024, respectively, and consisted primarily of provision for anticipated losses on a legacy infrastructure project and an Energy Solutions joint venture. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in "Accounts receivable, net" was $ 206 million and $ 175 million as of September 30, 2025 and December 31, 2024, respectively. During the 2025 Quarter, we converted 15 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares. We sold 10 million of those shares for net proceeds of $ 414 million during the 2025 Quarter. During October 2025, we sold an additional 5 million of shares in NuScale for net proceeds of $ 191 million. In addition, during November 2025 we reac

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS UNAUDITED 7. 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 $ 13 billion as of September 30, 2025. 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 was no t material as of September 30, 2025 and December 31, 2024. 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 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,

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