flr-20251231
Table of Contents
FLUOR CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
For the fiscal year ended December 31, 2025
or
For the transition period from to
Commission file number: 1-16129
FLUOR CORPORATION
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6700 Las Colinas Boulevard
(Address of principal executive offices) (Zip Code)
469-398-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, $.01 par value per share FLR New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yesþ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. YesoNoþ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesþNoo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YesþNoo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☑
As of June 30, 2025, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was approximately $8.2 billion based on the closing sale price as reported on the New York Stock Exchange.
As of January 31, 2026, 146,564,673 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
FLUOR CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 2025
Page
Glossary of Terms 1
Forward-Looking Information 2
PART I
Item 1. Business 3
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 27
Item 1C. Cybersecurity 27
Item 2. Properties 29
Item 3. Legal Proceedings 29
Item 4. Mine Safety Disclosures 29
PART II
Item 6. [Reserved] 31
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42
Item 8. Financial Statements and Supplementary Data 43
Item 9A. Controls and Procedures 43
Item 9B. Other Information 45
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 45
PART III
Item 10. Directors, Executive Officers and Corporate Governance 46
Item 11. Executive Compensation 46
Item 14. Principal Accountant Fees and Services 47
PART IV
Item 15. Exhibits and Financial Statement Schedules 48
Signatures 51
i
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
AMECO American Equipment Company, Inc.
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
2025 10-K Annual Report on Form 10-K for the year ended December 31, 2025
AOCI Accumulated other comprehensive income (loss)
APIC Additional paid-in capital
ASC Accounting Standards Codification
ASU Accounting Standards Update
CFM Customer-furnished materials
CODM Chief operating decision maker
CPS Convertible preferred stock
CTA Currency translation adjustment
DB plan Defined benefit pension plan
DC plan Defined contribution pension plan
DOD U.S. Department of Defense (also known as Department of War)
DOE U.S. Department of Energy
DOJ U.S. Department of Justice
EPC Engineering, procurement and construction
EPS Earnings per share
Exchange Act Securities Exchange Act of 1934
FASB Financial Accounting Standards Board
FEMA U.S. Federal Emergency Management Agency
FTC Foreign tax credit
G&A General and administrative expense
GAAP Accounting principles generally accepted in the United States
GILTI Global Intangible Low-Taxed Income
ICFR Internal control over financial reporting
IP Intellectual property
IT Information technology
LNG Liquefied natural gas
NCI Noncontrolling interests
NM Not meaningful
NOL Net operating loss
NRC U.S. Nuclear Regulatory Commission
OBBB One Big Beautiful Bill, signed into U.S. law in July 2025
OCI Other comprehensive income (loss)
PBO Projected benefit obligation
PIPE Private investment in public equity
PP&E Property, plant and equipment
RSU Restricted stock units
RUPO Remaining unsatisfied performance obligations
SEC Securities and Exchange Commission
SPAC Special purpose acquisition company
TSR Total shareholder return
VIE Variable interest entity
1
Table of Contents
Forward-Looking Information
From time to time, we make certain comments and disclosures in reports and statements, including this 2025 10-K, or statements are made by our officers or directors, that, while based on reasonable assumptions, may be forward-looking in nature. Under the Private Securities Litigation Reform Act of 1995, a "safe harbor" may be provided to us for certain of these forward-looking statements. We caution readers that forward-looking statements, including disclosures which use words such as "will," "may," "could," "should," "believes," "anticipates," "plans," "expects," "intends," "estimates," "projects," "potential," “goals,” “target,” "continue" and similar statements are subject to various future risks and uncertainties which could cause actual results of operations to differ materially from expectations.
Any forward-looking statements that we may make are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those anticipated by us. Any forward-looking statements are subject to the risks, uncertainties and other factors that could cause actual results of operations, financial condition, cost reductions, acquisitions, dispositions, financing transactions, operations and other events to differ materially from those expressed or implied in such forward-looking statements.
We are subject to known risks and to potentially unknown risks. While most risks affect only future cost or revenue anticipated by us, some risks may relate to accruals that have already been reflected in earnings. Our failure to receive payments of expected amounts or the incurrence of liabilities in excess of amounts recorded, could result in charges against future earnings. As a result, we caution readers to recognize and consider the inherently uncertain nature of forward-looking statements and not to place undue reliance on them.
These factors include those referenced or described in this 2025 10-K (including in "Item 1A. — Risk Factors"). We cannot control all risks and uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should consider these risks and uncertainties when you are evaluating us and deciding whether to invest in our securities. Except as otherwise required by law, we undertake no obligation to publicly update or revise our forward-looking statements, whether as a result of new information, future events or otherwise.
Defined Terms
Except as the context otherwise requires, the terms "Fluor" or the "Registrant" as used herein are references to Fluor Corporation and its predecessors and references to the "company," "we," "us," or "our" as used herein shall include Fluor Corporation, its consolidated subsidiaries and joint ventures.
2
Table of Contents
PART I
Item 1. Business
Fluor is dedicated to building a better world by applying our world-class expertise to solve our clients' greatest challenges. We deliver professional and technical solutions that emphasize safety, operational excellence and capital efficiency for our clients. Incorporated in Delaware in September 2000, Fluor and its predecessors have served clients for over 110 years, consistently supporting development and progress. We believe we are poised to continue helping our clients meet similar needs into the foreseeable future.
Through our subsidiaries and joint ventures, we stand among the world's leading professional services firms, offering EPC and project management services. We provide these services to our clients in diverse industries worldwide including life sciences, advanced technologies and manufacturing, data centers, mining and metals, gas and nuclear derived power, infrastructure, chemicals, LNG, and oil and gas production and fuels. We are also a service provider to the U.S. federal government and governments abroad.
Our operations are organized into 3 principal segments: Urban Solutions, Energy Solutions and Mission Solutions. Additional activities are reported under our Other segment.
Strategic Priorities
We are guided by 4 strategic priorities for driving value creation for our shareholders:
•Drive growth across our portfolio by growing our market positions in energy addition, low carbon power, LNG, sustainable chemicals, data centers, semiconductors, critical metals and minerals and national security while maintaining our industry leading position in traditional oil & gas, chemicals, commodity mining, life sciences and supporting the DOE.
•Pursue contracts with fair and balanced commercial terms by focusing on pursuing contracts with more favorable, risk-adjusted terms that reward us for value, enhancing our business acumen, focusing on reimbursable terms and only considering fixed-price contracts for segments and scopes where we have a strong position and strategy for delivering expected returns.
•Reinforce financial discipline by strengthening our financial position through predictable cash flow and earnings. Our capital allocation priorities include investing in our people and growth markets, maintaining low debt leverage and returning capital to shareholders.
•Foster a high-performance culture of project delivery by using A.I. and technology to improve cost and schedule, to support quality project execution and delivering results for our clients.
In 2025, we continued to make progress on our strategic priorities. As of December 31, 2025, 81% of our backlog is reimbursable.
Our Core Values
Our Core Values serve as our behavioral compass, guiding all of our actions. They are not only what we believe, they are the foundation of how we achieve our purpose to build a better world.
SAFETY INTEGRITY TEAMWORK EXCELLENCE
Competitive Strengths
As a world-class provider of technical and professional services, we believe that we bring capital efficient business solutions to our clients. We believe that our business advantages and global positioning provide us with significant competitive strengths, including:
Safety. Maintaining a safe and secure workplace is a key business driver for us and our clients. In our experience, whether in an office or at a jobsite, our commitment to safety reduces risks, supports the well-being of our workforce,
3
Table of Contents
enhances morale, improves productivity, reduces project costs and strengthens client relationships. Our safety culture is a defining feature of our organization.
Global Execution Platform. As a leading publicly traded EPC firm, our global footprint enables us to build local relationships, seize opportunities and rapidly mobilize resources to project sites worldwide. We regularly form strategic alliances with local partners, utilize our supply chain expertise and emphasize local training programs. Our distributed execution centers deliver high quality services on a cost-efficient basis.
Excellence in Execution. We believe that our ability to execute, maintain and manage complex projects, large or small and often in geographically challenging locations, gives us a distinct competitive advantage. We strive to complete our projects meeting or exceeding all client specifications. We continue to improve our approach to data-driven execution and the use of A.I. and other technologies, which has enhanced our ability to meet our clients' needs.
Market Diversity. We offer services across a wide range of industries globally. This diversification helps mitigate the impact of market cyclicality and enables us to strive for more consistent growth. We believe that maintaining a balanced business portfolio allows us to focus on our more stable markets while capitalizing on cyclical or emerging markets when the timing is appropriate.
Client Relationships. We actively cultivate new relationships while also building on our long-term relationships with existing clients. We believe that long-term relationships with existing clients serve us well by allowing us to better understand and be more responsive to their requirements. Whether our clients are new or have been with us for many decades, our ability to successfully foster and maintain relationships remains a key strength.
Risk Management. We believe we have the ability to assess, mitigate and manage project risk, particularly in challenging locations or circumstances. Our experienced management and execution team employs a systematic and disciplined approach to identifying, assessing and managing risks. We believe that this risk management approach helps us control costs and adhere to clients' schedules.
Sustainability. Our sustainability charter is to conduct business with social, economic and environmental responsibility. Sustainability is integrated into our business practices, and our employees are engaged in delivery on our charter, enabling us to build and sustain the global community and provide value for our stakeholders.
General Operations
Our services span 6 broad categories, from consulting activities to complete design-build, operations and maintenance contracts.
•In engineering and design, we develop solutions to address our clients’ most complex challenges. Our engineering services encompass traditional engineering disciplines such as piping, mechanical, electrical, control systems, civil, structural and architectural, as well as advanced engineering specialties including process engineering, chemical engineering, simulation, integrated automation processes and interactive 3-D modeling. Through our design solutions, we offer a range of services including front-end engineering, conceptual design, estimating, feasibility studies, permitting, process simulation, technology and licensing evaluation, scope definition and siting.
•Project management involves managing all aspects of the effort to deliver projects on schedule and within budget, and is critical on every project. We are often hired as the overall program manager for large, complex projects involving multiple contractors and subcontractors, requiring the integration of various activities into a cohesive execution plan. Our project management services include logistics, development of project execution plans, detailed schedules, cost forecasts, progress tracking and reporting, and the integration of EPC efforts. This approach helps us meet our clients' safety, functionality and financial performance requirements.
•Our procurement offerings provide supply chain solutions aimed at improving product quality and performance while reducing project costs and schedules. Clients benefit from our global sourcing and supply expertise, purchasing power, technical knowledge, processes, systems and experienced global resources. Our procurement activities include strategic sourcing, material management, contracts management, buying, expediting, supplier quality inspection and logistics.
•In construction, we mobilize, execute and commission projects on a self-perform and/or subcontracted basis. We are generally responsible for project completion, often in difficult locations and under challenging circumstances. We are frequently designated as program manager, and serve as such in cases where the client has facilities in multiple locations, complex phases in a single project location, or a large-scale investment in one facility.
4
Table of Contents
•We offer operations and maintenance services designed to enhance the efficiency or extend the life of our clients’ facilities. These services may include facility management, technical facility operations, plant readiness, commissioning, start-up and maintenance technology, small capital projects, turnaround and outage services and recapitalization of facilities and infrastructure. Additionally, we can provide key management, staffing and management skills to clients on-site at their facilities.
Business Segments
Urban Solutions
We believe that ongoing urbanization is driving demand for innovative and sustainable solutions in advanced technologies and manufacturing, life sciences, mining and metals, infrastructure and professional staffing project teams. Urban Solutions includes businesses to meet our clients' needs in these evolving and growing markets.
For advanced technologies and manufacturing, we deliver front-end engineering, program management and EPC services to a diverse range of companies globally. Our expertise spans a wide variety of market segments, including advanced materials, data centers, semiconductors, smart batteries, fast-moving consumer goods, food and beverage and specialty products. We specialize in designing projects that incorporate lean manufacturing principles, helping clients accelerate their time to market.
In life sciences, we offer front-end studies and EPC services to the pharmaceutical, biotechnology, medical device and animal health industries. We also specialize in providing validation and commissioning services, bringing new facilities online and extending the life or improving the capabilities of existing facilities. We believe our ability to complete large-scale projects, especially where time to market is critical, enables us to better serve our clients and is a key competitive advantage.
In mining and metals, we provide a comprehensive range of services to clients producing various commodities, including copper, lithium, rare earth minerals, iron ore, bauxite, alumina, aluminum, steel, diamond, gold and fertilizers. Our services include conceptual and feasibility studies through detailed EPC, commissioning and startup support. Many of our opportunities are located in remote or logistically challenging regions, and our scale, regional presence and experience enable us to execute large scale mining and metals projects worldwide.
In infrastructure, we support the development of projects with a focus on state departments of transportation. We provide a broad range of services, including consulting, design, planning, financial structuring, engineering, construction and operation and maintenance services. Continuing urbanization and the replacement and expansion of aging infrastructure in North America continues to drive project opportunities.
The segment's staffing services are often provided through TRS Staffing Solutions®, a global staffing specialist that supplies us and third-party clients with technical, professional and craft resources either on a contract or more permanent placement basis.
In North America, Plant & Facility Services provides clients with a comprehensive suite of outsourced and consultative reliability and maintenance services, focusing on power generation and the industrial manufacturing sector.
Energy Solutions
Our Energy Solutions segment offers EPC services for traditional oil and gas markets, including upstream, fuels, chemicals, LNG and power markets. We serve clients in these industries with comprehensive project life-cycle services, including expansion and modernization projects as well as in sustaining capital work. Our extensive skill set also supports energy transition markets, including nuclear power and other low-carbon energy sources, asset decarbonization, carbon capture, renewable fuels, green chemicals and hydrogen.
We excel at delivering large, complex projects in challenging locations, and as energy and chemicals work becomes more globally and geopolitically complex, clients rely on our expertise and proven global capabilities.
Our role is tailored to each project's requirements. We may provide front-end engineering, program management and final design services; construction management and self-perform construction; or oversight of other contractors. We also manage procurement of materials, equipment and subcontractors. Our capabilities include designing and constructing new facilities, as well as upgrading, optimizing, modernizing and expanding existing ones. Additionally, we offer consulting services ranging from feasibility studies and process assessments to project finance structuring.
In production and fuels, we deliver projects across the oil and gas value chain, including production, processing, refining and energy transition initiatives. Our upstream work covers field development, pipelines, offshore facilities and gas
5
Table of Contents
processing. Downstream, we help clients upgrade refineries for greater capacity, efficiency and sustainability, and we repurpose facilities for renewable fuels and low carbon solutions.
We have been very active for several decades in the chemicals and petrochemicals market, with major projects in the ethylene-based markets and various specialty chemicals. We are also involved in battery chemicals projects and implementing lower carbon solutions on existing and new chemical facilities.
In LNG, we have participated in a wide range of developments, including liquefaction, floating LNG facilities, mid-scale LNG solutions and regasification terminals. Our work in LNG includes feasibility studies, technology evaluations, process equipment optimization and selection, basic design, front-end engineering and design, detailed EPC and start-up assistance.
In the power market, we can provide a full range of services utilizing small modular and conventional nuclear reactor technologies, as well as solutions utilizing thermal power sources. We have extensive experience in gas-fired power plants.
Mission Solutions
Mission Solutions delivers advanced technical services to the U.S. and other governments. We believe the segment's nuclear and environmental business holds a tier 1 position with differentiated expertise in managing complex national security missions across the DOE and the National Nuclear Security Administration. We deliver solutions for nuclear security and operations, fuels enrichment, nuclear waste management and laboratory management. As an industry leader in nuclear remediation, we oversee site management, environmental remediation and decommissioning at government facilities, effectively addressing environmental and regulatory challenges. In civil services, we are a partner to FEMA for disaster recovery and emergency response.
In our national security business, we deliver operations and maintenance, global logistics, EPC, life support and operations of mission-critical facilities across U.S. military service organizations. We can rapidly mobilize people and equipment to deliver solutions globally, often in harsh environments. We are capable of delivering solutions to our military clients irrespective of the location or the speed required. We also offer a bench of security-cleared personnel providing critical solutions to clients in the intelligence community, including data center management, operations and maintenance of secure facilities and technology platform services. We construct and renovate secure facilities around the world for various agencies in support of their enduring missions.
Other
Other previously included the results of NuScale prior to its deconsolidation in October 2024, and the remaining operations of Stork which was fully divested in 2025. Results from our Other segment were immaterial for 2025.
Prior to November 2025, we converted 15 million of our 126 million NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares and sold all 15 million of those shares for net proceeds of $605 million. We converted the remaining 111 million of our 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. 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 the first quarter of 2026. Through our bank's execution, we completed the sale of all 71 million shares of NuScale on February 13, 2026, generating total proceeds of $1.35 billion. We expect to monetize the remaining 40 million shares of NuScale via similar structured programs and expect that all remaining ownership in NuScale should be sold by the second quarter of 2026.
Other Matters
Types of Contracts
While the basic terms and conditions of the contracts that we perform may vary considerably, we typically perform our work under two broad types of contracts: (a) reimbursable contracts and (b) lump-sum or guaranteed maximum contracts. In some limited markets, we are seeing hybrid contracts containing both lump-sum and reimbursable elements. For our material hybrid contracts, we split the contract and report backlog based on both the lump-sum and reimbursable elements. As of December 31, 2025, the following table summarizes contract type within our ending backlog:
6
Table of Contents
December 31, December 31,
Under reimbursable contracts, the client reimburses us based upon negotiated rates and fees. Our profit may be in the form of a fee, a simple markup applied to labor cost incurred in performing the contract, or a combination of the two. The fee element may also vary. The fee may be an incentive fee based upon achieving certain performance factors, milestones or targets; it may be a fixed amount in the contract; or it may be based upon a percentage of the cost incurred. In some cases, reimbursable contracts may be converted into lump-sum contracts. Reimbursable contracts may include significant estimated amounts of CFM.
Mission Solutions, primarily acting as a prime contractor or a major subcontractor for a number of government programs, generally performs its services under reimbursable contracts subject to applicable statutes and regulations. In many cases, these contracts include incentive fee arrangements. The programs may span many years and may be implemented by awards under multiple contracts. Some of our government contracts are known as indefinite delivery indefinite quantity (“IDIQ”) agreements. Under these arrangements, we work closely with the government to define the scope and amount of work required based upon an estimate of the maximum amount that the government desires to spend. While the scope is often not initially fully defined or does not require any specific amount of work, once the project scope is determined, additional work may be awarded to us without the need for further competitive bidding.
Under lump-sum contracts, we may bid based upon preliminary engineering drawings and specifications provided by the client. This type of contracting presents risk because, among other things, it requires us to predetermine the work to be performed, the project execution schedule and all costs associated with the work based on incomplete information, all of which requires us to make pricing assumptions based on judgment informed by prior experience on other projects. This risk may be greater when we provide a lump-sum bid in competition with other contractors because we may not be selected for the work if our bid is higher than the competition. Another type of lump-sum contract is a negotiated fixed-price contract, under which we are selected as contractor first and then negotiate a lump-sum price with the client. This may reduce the risk associated with bidding in competition. Furthermore, negotiated fixed-price contracts may occur under a compensation model in which we perform some of the early work on a project, including to advance the engineering, on a reimbursable basis before agreeing upon and converting to a lump-sum price for the remainder of the project. Depending upon when a project converts from reimbursable to lump-sum, our risk may lessen because we may hold greater insight into the details of the project scope, engineering and schedule thereby reducing the number and character of the pricing assumptions in the agreed-upon lump-sum price. Another type of lump-sum contract is a unit price contract under which we are paid a set amount for every “unit” of work performed. If we perform well under any type of lump-sum contract, we can benefit from cost savings gained from the effects of our efficiencies. However, if the project does not proceed as originally planned, we strive to develop timely change orders, but we may not be able to recover cost overruns, which may cause us to lose money.
Guaranteed maximum price contracts are reimbursable contracts except that the total fee plus the total cost cannot exceed an agreed upon guaranteed maximum price. We can be responsible for some or all of the total cost of the project if the cost exceeds the guaranteed maximum price. Where the total cost is less than the negotiated guaranteed maximum price, we may receive the benefit of the cost savings based upon the terms of the contract.
Some of our contracts, regardless of type, may operate under joint ventures or other teaming arrangements. Typically, we prefer to enter into these arrangements with companies with whom we have worked previously. These arrangements are generally made to strengthen our market position or technical skills, or where the size, scale or location of the project directs the use of such arrangements.
Competition
The markets served by our business are highly competitive and, for the most part, require substantial resources and highly skilled and experienced technical personnel. A large number of companies compete against us, including U.S.-based companies such as AECOM, Amentum Services, Inc., Bechtel Group, Inc., Black & Veatch, Burns & McDonnell, BWXT Technologies, Inc., EMCOR Group, Inc., Jacobs Solutions, Inc., KBR, Inc., Kiewit Corporation, Parsons Corporation, Turner Construction Company, V2X, Inc. and Zachry Group,and international-based companies such as ACS Actividades de Construccion y Servicios, Balfour Beatty plc, Chiyoda Corporation, Exyte GmbH, Hatch Ltd., JGC Corporation, Petrofac Limited, AtkinsRéalis, Technip Energies N.V., Wood Group plc, and WorleyParsons Limited.
Competition for our Energy Solutions and Urban Solutions segments is based on an ability to provide the design, engineering, planning, management and project execution skills required to complete complex projects in a safe, timely and
7
Table of Contents
cost-efficient manner. We believe our engineering, procurement and construction business derives its competitive strength from our market diversity, excellence in execution, reputation for quality, technology, cost-effectiveness, worldwide procurement capability, project management expertise, geographic coverage, ability to meet client requirements by performing construction on either a union or an open shop basis, ability to execute complex projects of varying sizes, strong safety record and lengthy experience with a wide range of services and technologies.
The temporary staffing business is a highly fragmented market with over 1,000 companies competing globally. The key competitive factors in this business line are price, service, quality, client relationships, breadth of service and the ability to identify and retain qualified personnel and geographic coverage.
In our Mission Solutions segment, key competitive factors are primarily centered on performance, qualified personnel with appropriate clearance credentials and the ability to provide the design, engineering, planning, management and project execution skills required to complete complex projects in a safe, timely, cost-efficient and compliant manner.
Significant Clients
For 2025, revenue earned from agencies of the U.S. government accounted for 17% of our total revenue. We perform work for these government agencies under multiple contracts and sometimes through joint venture arrangements. Additionally, revenue from a single Urban Solutions' customer spanning multiple projects amounted to 15% of our revenue in 2025.
Raw Materials
The principal products we use in our business include structural steel, metal plate, concrete, cable and various electrical and mechanical components. These products and components are subject to raw material (aluminum, copper, nickel, iron ore, etc.) availability and pricing fluctuations, which we monitor on a regular basis. We have access to numerous global supply sources; however, the availability and cost of these products, components and raw materials may vary significantly from year to year due to various factors including the logistics market, client demand, producer capacity, inflation, market conditions and specific material shortages. Our pursuit of balanced contractual risk and implementation of various risk mitigation strategies often permits us to minimize such market-driven impacts on our contracts.
Intellectual Property
We have developed, acquired or otherwise have the right to license technology, know-how, and other proprietary rights that we maintain and protect using a variety of IP protections including patents, trade secrets, and contractual terms in commercial agreements, including confidentiality and license agreements. The various forms of protection are relied upon to support our technology offerings, such as our carbon capture and sulfur recovery service offerings.
Seasonality
Our operations can be subject to seasonal and other variations. These variations are influenced by, among other things, weather, customer spending patterns, bidding seasons, receipt of required regulatory approvals, project timing and schedules, and holidays. For example, harsher weather conditions in winter may impact our ability to complete work in parts of North America and the holiday season schedule affects our productivity during this period. For these reasons, coupled with the number and significance of client contracts commenced and completed during a particular period, as well as the timing of expenses incurred for corporate initiatives, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.
Compliance with Government Regulations
Environmental
We operate at sites around the world, including locations that involve activities related to nuclear facilities, hazardous waste, hydrocarbon production, distribution and transport, the military, and infrastructure. Some of our work takes place near environmentally sensitive areas such as wetlands, lakes and rivers.
We contract with governments to remediate hazardous materials, including chemical agents, as well as to decontaminate and decommission nuclear sites. These activities can require us to manage, handle, remove, treat, transport and dispose of toxic, radioactive or hazardous substances, and are subject to many environmental, health and safety laws and regulations.
We believe that we are compliant with environmental, health and safety requirements. We further believe that any reserves associated with future environmental costs are adequate and that any future costs will not have a material effect on our financial position or future results of operations. Some factors, however, could result in the recognition of additional
8
Table of Contents
expense. These include the imposition of more stringent requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of such costs among potentially responsible parties, or a determination that we are potentially responsible for the release of hazardous substances at sites other than those currently identified.
Government Procurement
The services we provide to the U.S. federal government are subject to Federal Acquisition Regulation, the Truth in Negotiations Act, Cost Accounting Standards, the Services Contract Act, False Claims Act, export controls rules and Department of Defense security regulations, as well as many other laws and regulations. These laws and regulations affect how we transact business with our clients and, in some instances, impose additional costs on our business operations. A violation of specific laws and regulations could lead to fines, contract termination or suspension of future contracts. Our government clients can also terminate, renegotiate, or modify any of their contracts with us at their convenience; and many of our government contracts are subject to renewal or extension annually.
Anti-Bribery and Other Regulations
We are subject to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010, and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. To the extent we export technical services, data and products outside of the U.S., we are subject to U.S. and international laws and regulations governing international trade and exports, including, but not limited to, the International Traffic in Arms Regulations, the Export Administration Regulations, and trade sanctions against embargoed countries. We provide services to the Department of Defense and other defense-related entities that often require specialized professional qualifications and security clearances. In addition, as engineering design services professionals, we are subject to a variety of local, state, federal, and foreign licensing and permit requirements and ethics rules.
Human Capital
The following summarizes our human capital information as of December 31, 2025:
Number ofEmployees
Craft and hourly employees 4,602
The number of craft and hourly employees can vary in relation to the number, size and phase of execution of our projects. Total headcount reflects an 14% reduction from last year, primarily due to the sale of our Stork business in the U.K. as well as actions taken to enhance our operational efficiency.
We have employees in the following regions:
Region % of Global Workforce
North America 58 %
Europe, Africa and Middle East 17 %
Central and South America 5 %
Asia Pacific (includes Australia) 20 %
Health and Safety
Safety is one of our core values that guides everything we do. We are deeply committed to protecting our employees and preventing injuries across our offices and project sites. Through robust programs and procedures, we work diligently to mitigate the hazards inherent in our operations.
Our goal is to foster a caring, preventive culture built on proactive action by engaged employees. We call this commitment Safer TogetherSM. Beyond physical safety, we champion overall employee wellbeing. We provide resources such as mental health awareness campaigns, our global Employee Assistance Program, site-specific wellbeing programs and training in suicide prevention and mental health first aid.
9
Table of Contents
In 2025, our safety performance, calculated in accordance with U.S. Occupational Safety and Health Administration (OSHA) record keeping requirements, achieved a total case incident rate of 0.36, surpassing our goal of less than or equal to 0.38 and outperforming comparable industry benchmarks.
Development Opportunities
One of our top priorities is to provide ongoing training and development for our employees through multiple avenues. We offer training for our executives, project execution and functional employees based in offices, remote locations and project field assignments. Additionally, employees can access Fluor University, our online platform, where they select from a wide variety of self-paced, online, virtual and instructor-led training courses. Topics range from our internally developed courses focused on discipline-specific training, to commercially available technical learning and general knowledge topics, such as leadership, business acumen and communication. In 2025, our employees received over 220,000 hours of training through Fluor University. We also offer comprehensive global initiatives targeted specifically for managers, including webinars on talent topics, monthly orientation training for new managers and a standardized resource toolkit for consistent talent development.
Community Responsibility
As part of our culture, we offer our employees robust and enriching opportunities to help meet our goal of building a better world. In 2025, Fluor and our Fluor Foundation contributed $5 million to global charitable initiatives, improving communities where we live and operate. Through our employee giving and volunteering program, Fluor Cares, we empower our employees to invest in organizations and causes that resonate with them. This employee-driven giving and volunteering effort contributed an additional $5 million in 2025. Further, employees volunteered 47,000 hours to enrich the lives of their neighbors in need.
We have longstanding global programs and local efforts tailored to the needs of the communities where we operate. Through our charitable partners and the volunteerism of our employees, we delivered 594,000 hours of STEM (science, technology, engineering and math) instruction and provided workforce development to 5,500 individuals to help inspire and prepare the next-generation workforce. We provided 940,000 meals to the hungry. We planted 58,500 trees, including large scale, multi-year efforts in 5 countries.
Information about our Executive Officers
The following information is being furnished with respect to our executive officers as of February 4, 2026:
Name Age Position with the Company (1)
Michael E. Alexander 56 Group President, Project Execution
Pierre Bechelany 60 Business Group President, Energy Solutions
James R. Breuer 57 Chief Executive Officer
Alvin C. Collins III 52 Business Group President, Mission Solutions
David E. Constable 64 Executive Chairman
Tracey H. Cook 58 Chief Human Resources Officer
James P. Elliott 47 Chief Accounting Officer and Controller
Mark E. Fields 67 Group President, Strategic Projects
Kevin B. Hammonds 54 Chief Legal Officer and Corporate Secretary
Anthony Morgan 59 Business Group President, Urban Solutions
John C. Regan 56 Chief Financial Officer
_______________________________________________________________________________
(1)All references are to positions held with Fluor Corporation. All officers serve in their respective capacities at the pleasure of the Board of Directors.
Michael E. Alexander
Mr. Alexander has been Group President, Project Execution since November 2025. Prior to that he was Business Group President, Energy Solutions from 2024 to 2025. Prior to that, he was President, Chemicals from 2019 to 2024 and President, Energy & Chemicals — Americas in 2019. He joined the company in 1991.
10
Table of Contents
Pierre Bechelany
Mr. Bechelany has been Business Group President, Energy Solutions since November 2025. Prior to that, he was President, LNG and Power — Energy Solutions from 2024 to 2025 and President, LNG — Energy Solutions from 2020 to 2023. He joined the company in 2010.
James R. Breuer
Mr. Breuer has been Chief Executive Officer since May 2025. Prior to that, he was Chief Operating Officer from 2024 to 2025, Business Group President, Energy Solutions from 2021 to 2024 and President, Downstream — Energy & Chemicals from 2019 to 2021. Mr. Breuer joined the company in 1993.
Alvin C. Collins III
Mr. Collins has been Business Group President, Mission Solutions since March 2025. Prior to that, he was Group President, Corporate Development and Sustainability from 2021 to 2025, Senior Vice President, Operations — Energy & Chemicals from 2019 to 2021 and Senior Vice President, Global Business Development — Energy & Chemicals in 2019. Mr. Collins joined the company in 1994.
David E. Constable
Mr. Constable has been Executive Chairman of the Board since May 2022. He was previously Chief Executive Officer of the company from January 2021 to May 2025, and has served as a member of Fluor's Board of Directors since 2019. He previously served as Chief Executive Officer (from 2011) and Chief Executive Officer and President (from 2014) of Sasol Ltd., an integrated energy and chemical company, until 2016. Mr. Constable first joined the company in 1982.
Tracey H. Cook
Ms. Cook has been Executive Vice President and Chief Human Resources Officer since April 2025. Prior to that, she was Senior Vice President, Human Resources from 2023 to 2025, and President of AMECO from 2014 to 2023. Ms. Cook joined the company in 1989.
Nicole Davies
Ms. Davies has been Executive Vice President, Corporate Development and Sustainability since March 2025. Prior to that, she was Senior Vice President, Business Development and Strategy — Energy Solutions from 2022 to 2025 and Vice President, Sales — Energy Solutions from 2019 to 2022. Ms. Davies joined the company in 1998.
James P. Elliott
Mr. Elliott was appointed Chief Accounting Officer in February 2026. He has been Corporate Controller since 2025. Prior to that, he was Director of Technical Accounting and Internal Reporting from 2019 to 2025. Mr. Elliott is a Certified Public Accountant recognized by the State of Texas. Mr. Elliott joined the company in 2019.
Mark E. Fields
Mr. Fields has been Group President, Strategic Projects since November 2025. Prior to that, he was Group President, Project Execution from 2021 to 2025 and Group President, Energy & Chemicals from 2019 to 2021. Mr. Fields joined the company in 1981.
Kevin B. Hammonds
Mr. Hammonds has been Executive Vice President and Chief Legal Officer since August 2024 and Corporate Secretary since May 2025. Prior to that, he was Senior Vice President, Managing General Counsel from 2020 to 2024 and Vice President, General Counsel from 2014 to 2020. He joined the company in 1996.
Anthony Morgan
Mr. Morgan has been Business Group President, Urban Solutions since January 2024. Prior to that, he was President, Mining & Metals from 2017 to 2023. Mr. Morgan joined the company in 1990.
John C. Regan
Mr. Regan has been Executive Vice President and Chief Financial Officer since March 2025. Prior to that, he was Executive Vice President, Controller and Chief Accounting Officer from 2020 to 2025. Mr. Regan is a Certified Public Accountant recognized by the State of Texas. Mr. Regan joined the company in 2020.
11
Table of Contents
Available Information
Our website address is www.fluor.com, where we provide free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports on the “Investor Relations” section as reasonably practicable after we electronically file them with, or furnish them to, the SEC. These reports, and any amendments to them, are also available at the SEC's website, www.sec.gov. We also use our investor relations website as a channel of distribution for important company information. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for e-mail alerts. We also maintain information on our website related to our corporate governance including our Corporate Governance Guidelines, our Board Committee Charters and our Code of Business Conduct and Ethics for Members of the Board of Directors.
Website references are provided throughout this document for convenience. The content on the references websites does not constitute a part of and is not incorporated by reference into this Annual Report on Form 10-K.
Item 1A. Risk Factors
We operate in a complex and rapidly changing global environment that involves numerous known and unknown risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and stock price.
In evaluating our business, you should carefully consider the following discussion of material risks, events and uncertainties that make an investment in us speculative or risky in addition to other information in this Annual Report on Form 10-K. The risks described below highlight some of the factors that have affected and could affect us in the future. We may also be affected by unknown risks or risks that we currently think are immaterial. If any such events actually occur, our business, financial condition, results of operations, and stock price could be materially adversely affected. The disclosures below reflect our beliefs and opinions as to factors, events or contingencies that could materially and adversely affect us and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or arepresentation as to whether or not such factors, events or contingencies have occurred in the pastor their likelihood of occurring in the future.
Summary Risk Factors
The following summarizes the risks and uncertainties that could materially adversely affect our business, financial condition, results of operation and stock price. You should read this summary together with the more detailed description of each risk factor contained below.
Risks Related to our Operations
•We are vulnerable to the cyclical nature of the markets we serve.
•Our revenue and earnings are largely dependent on new awards.
•The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be fully recoverable and may result in reduced profits or losses that could have a material impact on us.
•Intense competition in the EPC industry can impact our revenue and profits.
•Our ability to operate profitably requires us to hire and retain qualified personnel.
•The success of teaming arrangements and joint ventures depends on the satisfactory performance by our venture partners over whom we may have little or no control, and the failure of those partners to perform their obligations could impose additional obligations on us that could have a material impact on us.
•We are dependent upon suppliers and subcontractors to complete many of our contracts.
•Cybersecurity breaches of our systems and IT could adversely impact us.
•Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate.
•We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations.
•We have international operations that are subject to foreign economic and political uncertainties and risks. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses.
•Our backlog is subject to unexpected adjustments and cancellations.
•Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses.
•Our businesses could be materially and adversely affected by events outside of our control.
•Our actual results could differ from the estimates used to prepare our financial statements.
•Our earnings are subject to volatility due to recurring fair value measurements of our investment in NuScale.
12
Table of Contents
•If we experience delays or defaults in client payments, we could be negatively impacted.
•Contracts with or funded by the U.S. federal government pose additional risks compared to contracts with or wholly-funded by private sector clients.
•Our effective tax rate and tax positions may vary.
•It can be very difficult and expensive to obtain the insurance we need for our business operations.
•If we do not have adequate indemnification for our nuclear services, it could adversely affect our business and financial condition.
•Foreign currency risks could have an adverse impact on us.
•The loss of one or a few clients could have an adverse effect on us.
•Our business may be negatively impacted if we are unable to adequately protect IP rights.
•Climate-related events, natural disasters and related environmental issues could have a material adverse impact on us.
•Increasing scrutiny and changing expectations from stakeholders with respect to sustainability practices may impose additional costs on us or expose us to reputational harm or other risks.
•We may be unsuccessful in implementing our strategic initiatives.
Risks Related to Indebtedness and Other Credit Related Risks
•Adverse credit and financial market conditions, including high interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us.
•The agreements governing our debt contain a number of restrictive covenants that limit our ability to engage in activities that may be in our interest or that create shareholder value.
•Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
•We may be unable to win new contract awards if we cannot provide clients with financial assurances.
Legal and Regulatory Risks
•We are involved in litigation and regulatory proceedings, potential liability claims and contract disputes that may have a material impact on us.
•Our failure to recover adequately on claims against project owners, subcontractors or suppliers for payment or performance could have a material effect on us.
•We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
•We could be adversely impacted if we fail to comply with domestic and international import and export laws.
•Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts.
•New or changing legal requirements could adversely affect us.
•Past and future environmental, safety and health regulations could impose significant additional costs on us.
Risks Related to our Equity and Corporate Governance Documents
•If we issue additional equity securities, stockholders' ownership percentages would be diluted.
•Delaware law and our charter documents may impede or discourage a takeover or change of control.
Risks Related to our Operations
We are vulnerable to the cyclical nature of the markets we serve.
The demand for our services is dependent upon our clients' capital investments. Our clients' interest in approving new projects, budgets for capital expenditures and need for our services have in the past been, and may in the future be, adversely affected by, among other things, poor economic conditions (including inflation, tariffs, slow growth or recession, changes to governments' fiscal or monetary policy and high interest rates), low or volatile oil and gas prices or other commodity prices, political uncertainties and currency fluctuations. Clients have been and remain selective in how they allocate their capital, especially the larger scale projects in which we specialize. For example, capital expenditures by our clients are influenced by factors such as prevailing hydrocarbon prices and expectations about future prices for underlying commodities, technological advances, the costs of exploration, production and delivery of product, domestic and international political, military, regulatory and economic conditions and other similar factors. There is no guarantee that current commodity prices will be sufficient to justify clients' capital expenditures, and the timing and extent of any future improvements in demand remain uncertain. The end markets we serve have historically been and will continue to be vulnerable to general downturns, which in turn could materially and adversely affect the demand for our services.
13
Table of Contents
Our revenue and earnings are largely dependent on new awards.
The award and timing of projects is unpredictable and driven by our clients. Awards, including expansions of existing projects, often involve complex and lengthy negotiations and competitive bidding processes. These processes can be impacted by a wide variety of factors including a client's decision to not proceed with the development of a project, governmental approvals, financing contingencies (including governmental support), commodity prices, environmental conditions and overall market and economic conditions. We do not always win contracts that we have bid on for a variety of reasons such as price, a client's perception of our ability to perform and/or perceived technology advantages held by others. Many of our competitors may be more inclined to take greater risks or include terms and conditions that we might not deem acceptable, especially when the markets for the services we typically offer are relatively soft. Because a significant portion of our revenue is generated from large projects, our results can fluctuate depending on whether and when large project awards occur and the commencement and progress of work under large contracts already awarded. As a result, we are subject to the risk of losing new awards to competitors or the risk that revenue may not be derived from awarded projects as quickly as anticipated. Additionally, uncertain economic and political conditions may make it difficult for our clients, our vendors and us to accurately forecast and plan future business activities. For example, changes to U.S. policies related to global trade and tariffs, and responsive changes in policy by foreign jurisdictions, have resulted in the past and may result in future uncertainty surrounding the global economy as well as retaliatory trade measures implemented by other countries. We cannot predict the outcome of changing trade policies or other unanticipated economic or political conditions, nor can we predict the timing, strength or duration of any worldwide economic recovery or downturn.
Following contract award, we may also encounter significant expense, delay, contract modification or even contract loss. Additionally, certain awards have been and may in the future be contested and/or otherwise involved in legal proceedings, inquiries or other similar developments outside of our control, which may result in significant delays in the project timeline or the wholesale cancellation or termination of a project. Any project delays, cancellations or contract modifications following the award of a contract could have an adverse effect on us.
The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be fully recoverable and may result in reduced profits or losses that could have a material impact on us.
Because our projects are often technically complex, with multiple phases occurring over several years, we incur risks in our project execution activities. These risks could result in project delays, cost overruns or other problems and can include the following:
•Evolving estimates related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation and tariffs on lump-sum contracts;
•Unanticipated technical problems, including design or engineering issues;
•Inaccurate representations of site conditions and unanticipated changes in the project execution plan;
•Project modifications creating unanticipated costs or delays and failure to properly manage project modifications;
•Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations;
•Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule;
•Reliance on historical cost and/or execution data that is not representative of current economic and/or execution conditions;
•Failure to accurately estimate the timing and cost of projects, including due to inflation, tariffs, supply chain disruption, rising construction costs or unforeseen increases in the cost of labor;
•Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of tariffs;
•Failure to properly make judgments in accordance with applicable professional standards, including engineering standards;
•Failure to properly assess and update appropriate risk mitigation strategies and measures;
14
Table of Contents
•Poor performance of our clients, partners, subcontractors, suppliers or other third parties;
•Delays or productivity issues caused by climate-related events or other natural disasters; and
•Changes in local laws or difficulties or delays in obtaining permits, rights of way or other governmental approvals.
These and other risks have in the past, and may in the future, result in our failure to achieve contractual cost or schedule commitments, or to satisfy safety performance, overall client satisfaction or other performance criteria. As a result, we may receive lower fees or lose our ability to earn incentive fees. In other cases, our fee will not change but we will have to continue to perform work without additional revenue until the performance criteria is achieved. We may also incur liquidated damages if we fail to complete a project on its contractual timeline. In addition, if we fail to meet guaranteed performance or quality standards, we may be held responsible under the guarantee or warranty provisions of our contract for cost impact to the client, generally in the form of contractually agreed-upon liquidated damages or an obligation to re-perform work. To the extent these events occur, the total cost to the project (including any liquidated damages) could be material and could, in some circumstances, equal or exceed the full value of the contract. In such events, our financial condition or results of operations could be materially and negatively impacted.
In circumstances where the contract is lump-sum or the revenue is otherwise fixed, we bear significant risk for delays and cost overruns. Reimbursable contract types, such as those that include negotiated hourly billing rates, may restrict the kinds or amounts of costs that are reimbursable, therefore exposing us to the risk that we may incur certain costs in executing these contracts that are above our estimates and not recoverable from our clients.
Intense competition in the EPC industry can impact our revenue and profits.
We serve markets that are highly competitive and in which a large number of multinational companies compete. These markets require substantial resources, investment in technology and skilled personnel. We have seen a continuing influx of non-traditional competitors offering below-market pricing while accepting greater risk. Competition places downward pressure on our contract prices and profit margins, and could cause us to accept contractual terms and conditions that are not normal or customary, thereby increasing the risk of reduced profitability on such contracts. Intense competition is expected to continue in our markets, presenting us with challenges to maintain acceptable profit margins. To the extent we are unable to meet these competitive challenges, we could experience reduced profitability.
Our ability to operate profitably requires us to hire and retain qualified personnel.
The success of our business is dependent upon being able to attract, develop and retain personnel, including engineers, project management, craft employees and management, who have the necessary and required experience and expertise, and who will perform these services at a reasonable and competitive rate. Competition for experienced personnel can be intense. It may be difficult to attract and retain qualified individuals with the expertise and in the timeframe demanded by our clients. In certain geographic areas, for example, we may be unable to satisfy the demand for our services because of our inability to deploy qualified personnel. Also, it may be difficult to replace personnel who hold government required credentials. Loss of the services of, or failure to recruit, qualified technical and management personnel, could limit our ability to successfully complete existing projects and compete for new projects. In addition, as costs related to our workforce are dependent on market conditions, inflationary pressure has increased, and may continue to increase, labor costs in certain geographic areas.
As some of our executives and other key personnel approach retirement age or otherwise leave the company, we need to provide for smooth transitions, which requires succession planning to identify and integrate new personnel into leadership roles. Changes in our management team may disrupt our business and the failure to successfully transition and assimilate executives or other key personnel could adversely affect our results. If we are unable to employ a sufficient number of skilled personnel or effectively implement appropriate succession plans, our ability to pursue projects may be adversely affected and the costs of executing our existing and future projects may increase.
In addition, the cost of providing our services, including the extent to which we utilize our workforce, affects our profitability. For example, the uncertainty of contract award timing and unexpected award cancellations can present difficulties in matching our workforce size with project needs. If an expected contract award is delayed or not received, we could incur costs resulting from excess staff, reductions in staff, or redundancy of facilities that could have a material adverse impact on us. Increased labor costs can also impact our customers' decision making with respect to the viability or timing of certain projects, which could result in project delays or cancellations and in turn have a material adverse impact on us.
15
Table of Contents
The success of teaming arrangements and joint ventures depends on the satisfactory performance by our venture partners over whom we may have little or no control, and the failure of those partners to perform their obligations could impose additional obligations on us that could have a material impact on us.
In the ordinary course of business in our industry, we execute projects and otherwise conduct certain operations through joint ventures, partnerships and other collaborative arrangements (collectively, "ventures"). We have various ownership interests in these ventures, with such ownership typically being proportionate to our decision-making and distribution rights. The ventures generally contract directly with our client; however, services may be performed directly by the venture, or may be performed by us, our partners, or a combination thereof.
Our success in many markets is impacted by the presence or capability of our partners. If we are unable to compete alone, or with a quality partner, our ability to win work and successfully execute our projects may be impacted. Differences in opinions or views between venture partners can result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of our ventures. In many of the countries in which we engage in joint ventures, it may be difficult to enforce our contractual rights under the applicable joint venture agreement.
At times, we also participate in ventures with other parties. In such instances, we may have limited control over venture decisions and actions, including ICFR, which may have an impact on our business. If internal control problems arise within a venture, or if our venture partners have financial or operational issues, there could be a material impact on us.
The success of our ventures also depends, in large part, on the satisfactory performance by our venture partners of their obligations, including their obligation to commit working capital, equity or credit support as required by the venture and to support their indemnification and other contractual obligations. If our venture partners fail to satisfactorily perform their obligations, the venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, we may be required to make additional investments and provide additional services to ensure the adequate performance and delivery of the contracted services and to meet any performance guarantees. From time to time, in order to establish or preserve a client relationship, or to better ensure venture success, we may accept risks or responsibilities for the venture that are not necessarily proportionate with the reward we expect to receive or that may differ from risks or responsibilities we would normally accept in our own operations. We may also be subject to joint and several liability under the contracts for venture projects. These additional obligations could result in reduced profits or, in some cases, increased liabilities or significant losses for us with respect to the venture, and in turn, our business and operations. In addition, a failure by a venture partner to comply with applicable regulations could negatively impact our business and reputation and could result in fines, penalties, suspension or, in the case of government contracts, even debarment.
We are dependent upon suppliers and subcontractors to complete many of our contracts.
Some of the work performed under our contracts is performed by third-party subcontractors. We also rely on third-party suppliers to provide much of the equipment and materials used for projects. If we are unable to hire qualified subcontractors or find qualified suppliers, our ability to successfully or timely complete a project could be impacted. If the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in lump-sum contracts, we may suffer losses on them. If a supplier or subcontractor fails to provide supplies, technology, equipment or services as required under a contract to us, our joint venture partner, our client or any other party involved in the project for any reason, or provides supplies, technology, equipment or services that are not an acceptable quality, we may be required to source those supplies, technology, equipment or services on a delayed basis or at a higher price than anticipated, which could impact our profitability. In addition, faulty workmanship, equipment or materials could impact the overall project, resulting in claims against us for failure to meet required project specifications. These risks may be intensified during an economic downturn if these suppliers or subcontractors experience financial difficulties or find it difficult to obtain sufficient financing to fund their operations or access to bonding, and are not able to provide the services or supplies necessary for our business. A failure by a third-party subcontractor or supplier to comply with applicable laws, rules or regulations could negatively impact our business and reputation and could result in fines, penalties, suspension, or in the case of government contracts, even debarment.
Cybersecurity breaches of our systems and IT could adversely impact us.
Our business depends on the secure processing, storage, and transmission of confidential and sensitive information, including personal data of our employees, subcontractors, suppliers, business partners and clients. The various administrative and technical controls we have implemented to protect our systems and data from unauthorized access, cyber-attacks, and other cybersecurity breaches and our endeavors to require our third-party providers to adhere to industry recognized security standards may be insufficient to prevent all cybersecurity breaches or cyber-attacks. The risk of a cybersecurity breach or cyber-attack applies to any company with whom we do business and could adversely affect us, particularly when working collaboratively in shared workspaces or computing environments. Our efforts to protect information on our network and put
16
Table of Contents
technical and/or contractual measures in place to protect information exchanges with other third parties with whom we work may be unsuccessful, and we cannot control or manage the safety and security of any third-party computing environment.In addition, because the techniques used to obtain unauthorized access to IT networks and systems change frequently, we and others with whom we work may be unable to anticipate these techniques or implement adequate preventative measures.As cybersecurity threats become more sophisticated and difficult to detect, our ability to promptly prevent, detect and mitigate the effects of cyber-attacks and other cybersecurity breaches may be impacted, potentially resulting in material adverse effects.
In the event of a cybersecurity breach or cyber-attack, we may experience operational disruptions, financial losses, legal claims, and reputational damage. Additionally, it may take considerable time for us to investigate and evaluate the full impact of a cybersecurity breach or cyber-attack, which may inhibit our ability to provide prompt, full and reliable information about cybersecurity incidents to our clients, regulators and the public. We may also incur significant costs to remediate the effects of such incidents, including costs associated with investigating the incident, repairing or replacing damaged systems and compensating affected parties.
We may also be subject to legal and regulatory actions, investigations, and penalties related to cybersecurity breaches and the unauthorized disclosure of confidential information or personal data, which may result in significant fines, sanctions, and legal fees, as well as damage to our reputation and customer relationships.In addition, data protection and cybersecurity laws are continuously evolving at a rapid pace and on a global level, which add heightened risk and additional costs in assessing, implementing and managing compliance measures that affect business operations.Any failure to comply with these laws and regulations or an exposure of information covered by such laws and regulations, including, without limitation, in connection with a cybersecurity breach, could have a negative impact on us.
The insurance we maintain that specifically covers cybersecurity threats may not sufficiently cover all types of losses or claims that we might experience, including losses from delays in our ability to provide services to our customers, reputational harm or the costs to improve security against future similar threats or losses arising from the computing environments and systems managed by others.
Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate.
We are heavily reliant on computer, information and communications technology and related systems, some of which are hosted by third-party providers. From time to time, we experience system interruptions and delays that may be planned for upgrades or that may be unplanned. Unplanned interruptions could result from natural disasters, power loss, telecommunications failures, acts of war or terrorism, errors or other defects in the design or implementation of the applicable system, computer viruses, malicious code, physical or electronic security breaches, intentional or inadvertent user misuse or error and similar events or disruptions. Any of these or other events could cause system interruptions, delays, loss of critical or sensitive data (including personal or financial data) or loss of funds; could delay or prevent operations (including the processing of transactions and reporting of financial results); and could adversely affect us. Safeguards designed to protect against unavailability or loss of data may not be sufficient. We may be required to incur significant costs to protect against or alleviate damage caused by systems interruptions and delays, which could have a material adverse effect on our business and results of operations.
We continue to evaluate the need to upgrade and/or replace our systems and network infrastructure to protect our computing environment, to stay current on vendor supported products, to improve the efficiency of our systems and for other business reasons. The implementation of new technology systems and tools could adversely impact our operations by imposing substantial capital expenditures, demands on management time, risks of delays, complications in setup or configuration or other difficulties in transitioning to new systems. Our systems implementations also may not result in productivity improvements at the levels anticipated. Disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business.
We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations.
Artificial intelligence, machine learning, data science and similar technologies (collectively, “AI”), including third-party AI tools, may be enabled by, or integrated into, some of our business processes and solutions. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms may be flawed or biased. Datasets used to train or develop AI systems may be insufficient, of inferior quality, or contain biased, or incorrect or incomplete information. The use of AI subjects us to additional risk and liability exposure relating to confidentiality, intellectual property infringement, and client use restrictions. Our AI governance review process and self-imposed requirement to implement safeguards before adopting AI may not be adequate to protect against
17
Table of Contents
these risks and challenges. Additionally, the laws and regulations concerning the use of AI continue to evolve. If the use or integration of AI systems, or the outputs generated by such systems, were determined to be non-compliant (e.g., in relation to IP or data privacy rights or in relation to the deployment of AI for certain activities or use cases), this may adversely affect us. It is possible that emerging regulations may limit or block the use of AI in our business or otherwise impose restrictions that may adversely affect the efficiency of our business processes or solutions that were utilizing AI technologies.
The safeguards we have implemented, including policies and procedures, governance reviews, technical measures where feasible, and contractual obligations relating to the ethical use of AI, may not be adequate or effective, and we cannot guarantee or control how third parties with whom we do business may utilize AI, which subjects us to increased risk and exposure relating to confidentiality and information security and information accuracy. If a breach of confidentiality or error or defect were to occur as a result of using AI, directly or indirectly, it could adversely affect our business, reputation, financial condition and results of operations.
Our competitors may incorporate AI into their product and service offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our business, financial condition and results of operations.
We have international operations that are subject to foreign economic and political uncertainties and risks. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses.
Our business is subject to international economic and political conditions that change (sometimes frequently) for reasons that are beyond our control. We expect that a significant portion of our revenue and profits will continue to come from non-U.S. projects for the foreseeable future.
Operating in the international marketplace exposes us to a number of risks including:
•abrupt changes in government policies, laws, treaties (including those impacting trade), regulations or leadership;
•embargoes or other trade restrictions, including sanctions;
•restrictions on currency movement;
•tax or tariff changes and withholding requirements;
•currency exchange rate fluctuations;
•changes in labor conditions and difficulties in staffing and managing international operations, including logistical and communication challenges;
•U.S. government trade or other policy changes in relation to the foreign countries in which we operate;
•other regional, social, political and economic instability, including recessions and other economic crises;
•natural disasters and public health crises, including pandemics;
•expropriation and nationalization of our assets or projects;
•international hostilities, such as the ongoing Russia-Ukraine conflict and political and economic instability and conflict in the Middle East; and
•other unrest, civil strife, acts of war, terrorism and insurrection.
The lack of a well-developed legal system in some of the countries where we operate may make it difficult to enforce our contractual rights or to defend ourselves against claims made by others. We operate in locations where there is a significant amount of political risk. In addition, nationalization, military action or continued unrest could impact the supply or pricing of oil, disrupt our operations in the region and elsewhere, and increase our security costs. Any alleged or actual failure to comply with any sanctions or trade control measures implemented in response to international conflicts may subject us to government scrutiny, civil and/or criminal proceedings, sanctions and other liabilities. Our level of exposure to these risks may vary with each project, depending on the location of the project and its stage of completion. For example, our risk exposure with respect to a project in an early development phase, such as engineering, will generally be less than our risk exposure on a project that is in the construction phase. To the extent that our international business is affected by unexpected and adverse foreign economic and political conditions and risks, we may experience project disruptions and losses.
18
Table of Contents
Our backlog is subject to unexpected adjustments and cancellations.
Our backlog generally consists of projects for which we have an executed contract or commitment with a client and reflects our expected revenue from the contract or commitment, which is often subject to revision over time. There is no guarantee that the revenue projected in our backlog will be realized or profitable or will not be subject to delay or suspension. Project cancellations, scope adjustments or deferrals, or foreign currency fluctuations may occur with respect to contracts reflected in our backlog and could reduce the value of our backlog and the revenue and profits that we actually earn; or, may cause the rate at which we perform on our backlog to decrease. Most of our contracts have termination for convenience provisions in them allowing clients to cancel projects. Our contracts typically provide for the payment of fees earned through the date of termination and the reimbursement of costs incurred including demobilization costs. In addition, projects may remain in our backlog for an extended period of time. During periods of economic slowdown, or decreases and/or instability in oil and gas prices, the risk of projects being suspended, delayed or canceled generally increases. Finally, poor project execution could also impact our backlog and profits. Such developments could have a material adverse effect on us.
Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses.
We often work on complex projects, frequently in geographically remote or high-risk locations that are subject to political, social or economic risks, or war or civil unrest. In those locations where we have employees or operations, we may expend significant efforts and incur substantial security costs to maintain safety. In addition, our project sites can place our employees and others near large equipment, dangerous processes or substances or highly regulated materials, and in challenging environments. Safety is a primary focus of our business and is critical to our reputation and performance. Many of our clients require that we meet certain safety criteria to be eligible to bid on contracts, and some of our contract fees or profits are subject to satisfying safety criteria. Unsafe work conditions also have the potential of increasing employee turnover, increasing project costs and raising our operating costs. If we fail to implement appropriate safety procedures or if our procedures fail, our employees or others may suffer injuries or loss of life, the completion of a project could be delayed and we could experience investigations or litigation. The safety function we rely on to implement effective health, safety and environmental procedures throughout our company may be ineffective, and the failure to comply with such procedures, client contracts or applicable regulations could subject us to losses and liability. Despite these activities we cannot guarantee the safety of our personnel, nor can we guarantee our work, equipment or supplies will be free from damage.
Our businesses could be materially and adversely affected by events outside of our control.
Extraordinary or force majeure events beyond our control, such as natural or man-made disasters, severe weather conditions, public health crises, supply chain disruption, geopolitical conflicts, political crises or other catastrophic events, could negatively impact our ability to operate or increase our costs to operate. Such events may result in disruptions to our operations; evacuation of personnel; increased labor and material costs or shortages; inability to deliver materials, equipment and personnel to job sites in accordance with contract schedules; and loss of productivity. When making contract proposals, we rely heavily on our estimates of costs and timing to complete the associated projects, as well as assumptions regarding technical issues, but those estimates and assumptions may ultimately prove to be incorrect. Additionally, we may remain obligated to perform our services after any natural or human-caused events, unless certain contractual provisions allow for relief from such obligations. The extra costs incurred as a result of these events may not be reimbursed by our clients. If we are not able to react quickly to such events, or if a high concentration of our projects is impacted by such an event, our operations may be adversely affected. In addition, if we cannot complete our contracts on time, we may be subject to potential liability claims by our clients, which may reduce our profits and result in losses.
Our actual results could differ from the estimates used to prepare our financial statements.
In preparing our financial statements, we make estimates and assumptions that affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Areas requiring development of significant estimates include:
•determination of profitability;
•recognition of project incentives, awards, change orders, claims or other variable consideration we expect to receive;
•estimated amounts for project losses, warranty costs, contract close-out or other costs;
•income tax provisions and related valuation allowances; and
•accruals for other estimated liabilities, including litigation and insurance reserves and receivables.
19
Table of Contents
Estimates are based on reasonable assumptions and experience, but are only estimates. Our actual business and financial results can differ from our estimates of such results due to changes in facts and circumstances, which can have a material negative impact on our financial condition and results of operations. Further, we recognize contract revenue as work on a contract progresses. The cumulative amount of revenue recorded on a contract at any point is that percentage of total estimated revenue that costs incurred to date bear to estimated total costs. Accordingly, contract revenue and total cost estimates are reviewed and revised as the work progresses. Adjustments are reflected in contract revenue in the period when such estimates are revised. Such adjustments are at times material and result in reduced profitability.
Our earnings are subject to volatility due to recurring fair value measurements of our investment in NuScale.
Since October 2024, we account for our investment in NuScale using the fair value option for equity method investments, under which we measure our investment at fair value on a recurring basis using the prevailing price of NuScale's stock on our balance sheet dates. The fair value of our investment in NuScale is subject to the fluctuations of NuScale's stock price, which subjects our consolidated earnings to volatility. The price of NuScale's stock has experienced significant volatility since it commenced trading in May 2022, and the volatility may continue in the future in response to many factors, including factors beyond the control of us or NuScale. As a result of the recurring fair value measurements, we may recognize non-cash gains or losses in future periods, some of which could be material.
If we experience delays or defaults in client payments, we could be negatively impacted.
Because of the nature of our contracts, we sometimes commit resources to projects prior to receiving payments from clients in amounts sufficient to cover expenditures as they come due. Some of our clients have found it difficult to pay our invoices timely, increasing the risk that our accounts receivable could become uncollectible and ultimately be written off. In certain cases, our clients for our large projects are project-specific entities that do not have significant assets other than their interests in the project. From time to time, it is difficult for us to collect payments owed to us by these clients. In addition, clients may request extension of the payment terms otherwise agreed to under our contracts. Delays in client payments may require us to make a working capital investment, which could impact our cash flows and liquidity. If a client fails to pay invoices on a timely basis or defaults, there could be a material adverse effect on our results of operations or liquidity.
Contracts with or funded by the U.S. government pose additional risks compared to contracts with or wholly-funded by private sector clients.
We have a significant portfolio of U.S. federal government contracts, including those that we have in place with the DOE and DOD. U.S. government contracts are subject to various uncertainties, including, but not limited to:
•significant delays in funding appropriations, reductions in spending and changes in budgetary priorities that could reduce demand for our services, cancel or delay federal projects, and result in the closure of federal facilities and significant personnel reductions;
•disruptions to departments or agencies (including as result of budget deficits, government shutdowns and federal sequestration) that could interrupt communications with departments and agencies, result in program cancellations, disruptions and/or stop work orders, limit the government’s ability to make timely payments, and limit our ability to perform under existing contracts and compete for new projects;
•oversight audits by government agencies and profit and cost controls, which could result in withholding or delay of payments to us; and
•changes in the federal administration and/or congressional leadership and other policy and economic changes that could adversely impact us.
The U.S. government is under no obligation to maintain program funding at any specific level, and funds for a program may even be eliminated. Our U.S. government clients may terminate or decide not to renew our contracts with little or no prior notice.
In addition, U.S. government contracts are subject to specific regulations such as the Federal Acquisition Regulation ("FAR"), the Truth in Negotiations Act, the Cost Accounting Standards ("CAS"), the Service Contract Act and Department of Defense security regulations. Failure to comply with any of these regulations and other government requirements may result in contract price adjustments, financial penalties or contract termination. Our U.S. government contracts are also subject to audits, cost reviews and investigations by U.S. government oversight agencies such as the U.S. Defense Contract Audit Agency (the "DCAA"). The DCAA reviews the adequacy of, and our compliance with, our internal controls and policies (including our labor, billing, accounting, purchasing, estimating, compensation and management information systems). The DCAA also has the ability to review how we have accounted for costs under the FAR and CAS. The DCAA presents its findings to the Defense
20
Table of Contents
Contract Management Agency ("DCMA"). Should the DCMA determine that we have not complied with the terms of our contract and applicable statutes and regulations, or if they believe that we have engaged in inappropriate accounting or other activities, payments to us may be disallowed or we could be required to refund previously collected payments. Additionally, we may be subject to criminal and civil penalties, suspension or debarment from future government contracts, and qui tam litigation brought by private individuals on behalf of the U.S. government under the False Claims Act, which could include claims for treble damages. These suits may remain under seal (and hence, be unknown to us) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff. Furthermore, if we have significant disagreements with our government clients concerning costs incurred, negative publicity could arise, which could adversely affect our industry reputation and our ability to compete for new contracts in the government arena or otherwise.
Most U.S. government contracts are awarded through a rigorous competitive process. The U.S. government has increasingly relied upon multiple-year contracts with pre-established terms and conditions that generally require those contractors that have been previously awarded the contract to engage in an additional competitive bidding process for each task order issued under the contract. Such processes require successful contractors to anticipate requirements and develop rapid-response bid and proposal teams as well as dedicated supplier relationships and delivery systems to react to these needs. We face rigorous competition and significant pricing pressures in order to win these task orders. If we are not successful in containing costs or able to timely respond to government requests, we may not win additional awards. Moreover, even if we are qualified to work on a government contract, we may be impacted in our pursuit of work by government policies designed to protect small businesses or certain other types of contractors.
Many of our U.S. government contracts require security clearances. Depending upon the level of clearance required, security clearances can be difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain necessary security clearances, we may not be able to win new business, and our existing government clients could terminate their contracts with us or decide not to renew them.
Our effective tax rate and tax positions may vary.
We are subject to income taxes where we do business. A change in tax laws, treaties or regulations, or their interpretation, in any country in which we operate could change our overall tax rate, which could have a material impact on our results of operations. In addition, significant judgment is required in determining our worldwide provision for income taxes and our judgments could prove inaccurate. There are many transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax authorities, and our tax estimates and tax positions could be materially affected by many factors including the final outcome of tax audits and related litigation, the introduction of new tax accounting standards, legislation, regulations and related interpretations, our global mix of earnings, our ability to realize deferred tax assets and changes in uncertain tax positions. Future changes in our tax rate or adverse changes in tax laws could have a material adverse effect on us. We may also be exposed to limitations on our ability to reinvest earnings from operations in one country to fund our operations in other countries due to tax laws in different jurisdictions.
It can be very difficult and expensive to obtain the insurance we need for our business operations.
We maintain insurance both as a corporate risk management strategy and to satisfy the requirements of many of our contracts. Although we have been generally able to cover our insurance needs, there can be no assurances that we can secure all necessary or appropriate insurance in the future, or that such insurance can be economically secured. For example, catastrophic events can result in decreased coverage limits, more limited coverage, increased premium costs or deductibles. We also monitor the financial health of our insurance providers. Our insurance is purchased from a number of leading providers, often in layered insurance or quota share arrangements. If any of our third-party insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their obligations to us, then our overall risk exposure and operational expenses could increase and our business operations could be interrupted.
If we do not have adequate indemnification for our nuclear services, it could adversely affect our business and financial condition.
We provide services to the DOE and the nuclear energy industry in the on-going maintenance and modification of nuclear facilities as well as decontamination and decommissioning activities of nuclear plants. The Price-Anderson Act generally indemnifies parties performing services to nuclear power plants and DOE contractors; however, not all of our activities are covered. Thus, if the Price-Anderson Act indemnification protections do not apply to our services, or if the exposure occurs outside of the U.S. in a region that does not have protections comparable to the Price-Anderson Act, we could be adversely affected by our client's refusal to contract with us, by our inability to obtain commercially reasonable insurance or third-party indemnification, or by the potentially significant monetary damages we could incur.
21
Table of Contents
Foreign currency risks could have an adverse impact on us.
Our contracts may subject us to foreign currency risk, particularly when project revenue is denominated in a currency different from its expected costs. Contracts may be denominated in different currencies at various points in time as a project progresses. We may attempt to minimize our exposure to foreign currency risk by obtaining contract provisions that protect us from foreign currency fluctuations and/or by implementing hedging strategies utilizing derivatives. However, these actions may not always eliminate all foreign currency risk, and as a result, our profitability or cash flows could be affected.
Our monetary assets and liabilities denominated in nonfunctional currencies are subject to remeasurement which introduces potential profit volatility. In addition, the U.S. dollar value of our backlog may from time to time increase or decrease significantly due to foreign currency volatility.
The loss of one or a few clients could have an adverse effect on us.
A few clients, including the U.S. government, state governments and governmental agencies comprise a significant portion of our revenue. Although we have long-standing relationships with our most significant clients, our clients may unilaterally reduce, fail to renew or terminate their contracts with us at any time. The loss of business from a significant client could have a material adverse effect on us.
Our business may be negatively impacted if we are unable to adequately protect IP rights.
Our success is impacted by our ability to differentiate our services through our technologies and know-how. This includes the ability to protect IP rights. We utilize a combination of patents, copyrights, trade secrets, confidentiality agreements and other contractual arrangements to protect our interests. However, these methods only provide limited protection and may not adequately protect our interests. Our employees, contractors and joint venture partners are subject to confidentiality obligations, but this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or infringement of our IP rights. This can be especially true in certain foreign countries where IP does not have equivalent protections as in the U.S., or when our joint venture partner is a competitor who will gain access to our procedures and know-how while working with us in the performance of services.
Our clients require broad ownership rights in the work product and other materials we deliver. If we are unable to retain ownership of our IP and improvements thereto, it may affect our ability to provide similar services and other projects in the future, which could have a material adverse effect on us.
Our competitors or others may independently develop technology substantially similar to our trade secret technology or we may be unsuccessful in preserving our IP rights in the future. Our IP rights could be invalidated, circumvented, challenged or infringed upon. Litigation to determine the scope of IP rights, even if ultimately successful, could be costly and could divert management's attention.
In addition, our clients or other third parties may also provide us with their technology and IP. There is a risk that we may not sufficiently protect against improper use, access or dissemination and, as a result, we could be subject to claims and litigation and resulting liabilities, loss of contracts or other consequences that could have an adverse impact on us.
We also hold licenses from third parties utilized in our business operations. If we are no longer able to license such technology on commercially reasonable terms or otherwise, we could be adversely affected. When we license our IP to third parties, the scope of such license grant is generally limited. If such third party exceeds the scope of the license grant, and if we are unable to detect unauthorized use of our IP or otherwise take appropriate steps to enforce our rights, our revenue and margins will be adversely impacted, and the value of our IP portfolio may be adversely affected.
Climate-related events, natural disasters and related environmental issues could have a material adverse impact on us.
Climate-related events, such as the frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions, and other natural disasters, may have short-term, intermediate and long-term impacts on our business, financial condition and results of operation. Our efforts to mitigate our business risks associated with climate-related events and natural disasters cannot eliminate those risks, and we recognize that there are inherent climate-related and environmental risks regardless of where we conduct our businesses. For example, a catastrophic natural disaster could negatively impact any of our office locations and our project locations. Access to clean water and reliable energy in the communities where we conduct our business is critical to our operations. Accordingly, a natural disaster has the potential to disrupt our and our clients’ businesses and may cause us to experience work stoppages, supply chain disruptions, project delays, financial losses and additional costs to resume operations, including increased insurance costs or loss of cover, legal liability and reputational losses.
22
Table of Contents
Further, climate-related and environmental risks span across the full spectrum of the markets we serve. The direct physical risks that climate-related events and environmental issues pose, such as rising sea levels and temperatures, and acute events, such as hurricanes, droughts and wildfires, are common to each of these industries. Our clients could face increased costs to maintain their assets, which could result in reduced profitability and fewer resources for strategic investment. These types of physical risks could in turn lead to transitional risks (i.e., the degree to which society responds to climate and environmental matters). For example, concerns about climate and environmental matters may result in activism, protests, legislation, international protocols or treaties, regulation or other restrictions on greenhouse gas emissions or that otherwise seek to address climate and environmental matters that could affect our clients, including those who (a) are involved in the exploration, production or refining of hydrocarbons, such as our Energy Solutions clients, (b) emit greenhouse gases through the combustion of hydrocarbons or (c) emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods. Such actions could increase the costs of projects for us and our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services, which would in turn have a material adverse impact on us. However, policy changes and climate legislation could also accelerate energy transition, including the development of carbon capture and storage projects, alternative transportation, alternative energy facilities, such as wind farms or nuclear reactors, or incentivize increased implementation of clean fuels projects, which could positively impact the demand for our services. We cannot predict when or whether any of these legislative proposals may become law or what effect they will have on us and our clients.
We will also continue to incur additional expenses implementing U.S. and international regulations requiring additional disclosures regarding GHG emissions and/or broader sustainability-related factors. Compliance with such regulations and the associated potential costs is complicated by various countries and regions following different approaches to the regulation of climate and environmental matters.
Increasing scrutiny and changing expectations from stakeholders with respect to sustainability practices may impose additional costs on us or expose us to reputational harm or other risks.
Investors, clients, governments and other stakeholders have continued to focus on the sustainability practices of companies, including practices with respect to human capital, emissions and environmental impact and political spending. Expectations and requirements evolve rapidly, vary in their support for or rejection of such matters, and are largely out of our control, and our sustainability initiatives and disclosures in response to such expectations and requirements may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting, litigation and insurance), change in demand for certain services, change in our competitiveness, enhanced or modified compliance or disclosure obligations, or other adverse impacts to our business or results of operations, including reputational harm. While we have programs and initiatives in place related to our sustainability practices, investors may decide to reallocate capital or to not commit capital as a result of their assessment of our practices. In addition, our clients may require that we adhere to varying sustainability standards. Our failure to comply with investor or client standards, which are evolving and may differ, or if we are perceived to not have responded appropriately to the growing concern for, or opposition to, these issues could also cause reputational harm to our business and could have a material adverse effect on us. In addition, organizations that provide ratings information to investors on sustainability matters may have unfavorable views on us, which may lead to negative sentiment or divestment.
In addition, while we may create and publish voluntary disclosures regarding sustainability matters, many of the statements in those voluntary disclosures are based on expectations and assumptions that may not be representative of current or actual risks, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many sustainability matters. In addition, there are increasing and inconsistent levels of regulation, disclosure-related and otherwise, with respect to sustainability matters. For example, the Corporate Sustainability Reporting Directive in the European Union as well as new sustainability-related disclosure requirements in U.S. states and other jurisdictions require companies to provide significantly expanded sustainability and other climate-related disclosures. Requirements from the SEC, European or other regulators may require us to incur significant costs to comply and distract our management and Board of Directors. We may also face material risks from the potential reversal or modification of these regulations, and reversal or material modification of these regulations could lead to the loss of time and resources already invested to prepare for these requirements. Many of these costs may not be recoverable from our clients.
We may be unsuccessful in implementing our strategic initiatives.
Our ability to successfully execute strategic initiatives, including plans to monetize our remaining stake in NuScale, is subject to various risks and uncertainties, which may negatively impact the realization of expected benefits. We cannot predict the trading price of shares of NuScale's common stock and the market value of the NuScale shares are subject to market volatility and other factors beyond the control of us or NuScale, including general economic, financial and business
23
Table of Contents
conditions. We intend to complete the sale of our shares in NuScale by the end of Q2 2026, but there can be no assurance regarding the ultimate timing of such monetization process. Unanticipated developments could delay, prevent of otherwise adversely affect the monetization process, including but not limited to financial market conditions.
Risks Related to Indebtedness and Other Credit Related Risks
Adverse credit and financial market conditions, including high interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us.
Our ability to access cash is important for the funding of our operations, investing in ventures, the servicing of our indebtedness, paying dividends and making acquisitions. To the extent that existing cash balances and operating cash flow, together with borrowing capacity under our credit facility, are insufficient to make investments or acquisitions or provide needed working capital, we may require additional financing from other sources. Our ability to obtain such additional financing will depend upon prevailing capital market conditions, including those arising due to events occurring in our industry, as well as conditions in our business and our operating results; and those factors may affect our efforts to negotiate terms that are acceptable to us. Furthermore, if global economic, industry, political or other market conditions adversely affect the financial institutions that provide credit to us, our ability to establish or draw upon our credit facility, or refinance borrowings as they mature, may be impacted. In addition, a downgrade in our credit rating could increase the cost of our borrowings or their refinancing, limit access to sources of financing or lead to other adverse consequences such as requirements for liens or other forms of financial assurance. If adequate funds are not available, or are not available on acceptable terms, we may be unable to make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges.
In addition, adverse credit and financial market conditions, including high interest rates, also adversely affect our clients' and our partners' borrowing capacity, which could result in contract cancellations or suspensions, project award and execution delays, payment delays or defaults by our clients. These disruptions could materially impact us.
The agreements governing our debt contain a number of restrictive covenants that limit our ability to engage in activities that may be in our interest or that create shareholder value.
Our credit facility and the indentures governing our debt contain a number of significant covenants that impose operating and other restrictions on us and our subsidiaries. Such restrictions affect or will affect and, in many respects, limit or prohibit, among other things, our ability and the ability of some of our subsidiaries to:
•incur additional indebtedness;
•create liens;
•pay dividends and make other distributions in respect of our equity securities;
•make investments or other restricted payments;
•sell assets;
•enter into transactions with affiliates; and
•effect mergers or consolidations.
In addition, our credit facility requires us to maintain specified financial covenants. A breach of any of these covenants could result in a default. If a default occurs, the relevant lenders could elect to accelerate payments due or decline access to the facility for further borrowings. If our operating performance declines, or if we are unable to comply with any covenant, we may need to obtain amendments to our credit agreements or waivers from the lenders to avoid default. These factors could have a material adverse effect on us.
Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates.
Our indebtedness could have important consequences, including but not limited to:
•increasing our vulnerability to general adverse economic and industry conditions;
24
Table of Contents
•requiring us to dedicate a substantial portion of our operating cash flow to servicing our debt, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes; and
•limiting our flexibility in planning for, or reacting to, challenges and opportunities, and changes in our businesses and the markets in which we operate.
Our ability to service our debt will depend on our future operating performance and financial results, which may be subject to factors beyond our control, including general economic, financial and business conditions. If we do not have sufficient cash flow to service our debt, we may need to refinance all or part of our existing debt, borrow more money or sell securities or assets, some or all of which may not be available to us at acceptable terms or at all. In addition, we may need to incur additional debt in the future in the ordinary course. Although the terms of our credit agreements and our indentures allow us to incur additional debt, there are limitations which may preclude us from incurring the desired amount.
We may be unable to win new contract awards if we cannot provide clients with financial assurances.
It is a common industry practice for clients to require us to provide surety bonds, letters of credit, bank guarantees or other forms of financial assurance as credit enhancements. Surety bonds, letters of credit or guarantees indemnify our clients if we fail to perform our contractual obligations. Historically, we have had strong surety bonding capacity due to our credit ratings, but bonding is provided at the surety's sole discretion. In addition, because of the overall limitations in worldwide bonding capacity, we may find it difficult to access sufficient surety bonding capacity to meet our total surety bonding needs. For letters of credit, we have historically had adequate capacity under our existing credit facility, but any capacity that may be required in excess of our credit limits would be at our lenders' sole discretion. Failure to provide credit enhancements on terms required by a client may result in an inability to compete for or win a project.
Legal and Regulatory Risks
We are involved in litigation and regulatory proceedings, potential liability claims and contract disputes that may have a material impact on us.
We are subject to a variety of legal or regulatory proceedings, liability claims or contract disputes. Our operating activities expose us to claims against us by clients, subcontractors or suppliers for recovery of costs they incurred in excess of what they expected to incur, or for which they believe they are not contractually liable. We may be named as a defendant in legal proceedings where parties may make a claim for damages or other remedies with respect to our projects or other matters, including shareholder litigation. During times of economic uncertainty, especially with regard to our commodity-based clients, claim frequencies and amounts tend to increase.
In proceedings where it is determined that we have liability, we may not be covered by insurance or these liabilities may exceed our coverage. In addition, even where insurance is maintained for such exposure, the policies have deductibles resulting in our assuming exposure for a layer of coverage with respect to any such claims. Our professional liability coverage is on a "claims-made" basis covering only claims actually made during the policy period. Any liability not covered by our insurance, in excess of our insurance limits or, if covered by insurance but subject to a high deductible, could have a material adverse impact on us.
In other legal or regulatory proceedings, liability claims or contract disputes, we may be covered by indemnification agreements that may at times be difficult to enforce. Even if enforceable, it may be difficult to recover under these agreements if the indemnitor does not have the ability to financially support the indemnity. Litigation and regulatory proceedings are subject to inherent uncertainties, and unfavorable rulings could occur, including for monetary damages. If we were to receive an unfavorable ruling in a matter, our business and results of operations could be materially harmed. Such proceedings can also be costly, time-consuming, disruptive to operations and distracting to management, regardless of the outcome. Our estimates regarding loss contingencies related to pending proceedings may not be accurate, and we could be required to pay significantly more for certain proceedings than we currently anticipate.
Our failure to recover adequately on claims against clients, subcontractors or suppliers for payment or performance could have a material effect on us.
We occasionally bring claims against clients and partners for additional costs exceeding the contract price or for amounts not included in the original contract price. Similarly, we present change orders and claims to our subcontractors and suppliers. If we fail to properly provide notice or document the nature of change orders or claims, or are otherwise unsuccessful in negotiating a reasonable settlement, we could incur reduced profits, cost overruns and in some cases a loss on the project. These types of claims can occur due to matters such as owner-caused delays or changes from the initial project scope, which result in additional cost. These claims can result in lengthy and costly proceedings, and it is often difficult to
25
Table of Contents
accurately predict when these claims will be fully resolved. When these types of events occur and while unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. A failure to promptly recover on these types of claims could have a material adverse impact on our liquidity and financial results.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to officials or others for the purpose of obtaining or retaining business. We operate in many parts of the world that have experienced corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices, and our policies mandating compliance with these anti-bribery laws may not be effective. There is no assurance that our efforts to train our personnel concerning anti-bribery laws and issues, our efforts to inform our partners, subcontractors, suppliers, agents and others who work for us or on our behalf, or our internal controls and procedures to monitor compliance will always protect us from possible reckless or criminal acts committed by our employees or agents. If we are found to be liable for anti-bribery law violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others including our partners, agents, subcontractors or suppliers), we could suffer from criminal or civil penalties or other sanctions, including contract cancellations or debarment, and damaged reputation, any of which could have a material adverse effect on us. Litigation or investigations relating to alleged or suspected violations of anti-bribery laws, even if ultimately such litigation or investigations demonstrate that we did not violate anti-bribery laws, could be costly and could distract management.
We could be adversely impacted if we fail to comply with domestic and international import and export laws.
Our global operations require importing and exporting goods and technology across international borders on a regular basis. Our policies mandate strict compliance with U.S. and foreign international trade laws. To the extent we export technical services, data and products outside of the U.S., we are subject to regulations governing international trade and exports including but not limited to the International Traffic in Arms Regulations, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the Department of Treasury. From time to time, we identify certain inadvertent or potential export or related violations. These violations may include, for example, transfers without required governmental authorization. A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges, and suspension or debarment from participation in U.S. government contracts.
Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts.
Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one of our employees, agents or partners could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with anti-corruption, export control and environmental regulations; federal procurement regulations, regulations regarding the pricing of labor and other costs in government contracts and regulations regarding the protection of sensitive government information; regulations on lobbying or similar activities; regulations pertaining to the ICFR; and various other applicable laws or regulations. The policies and precautions we take to prevent and detect fraud, misconduct or failures to comply with applicable laws and regulations may not be effective, and we could face unknown risks or losses. Failure to comply with applicable laws or regulations or acts of fraud or misconduct could subject us to fines and penalties, cancellation of contracts, loss of security clearance and suspension or debarment from contracting with government agencies, which could damage our reputation, weaken our ability to win contracts and have a material adverse impact on us.
New or changing legal requirements could adversely affect us.
Our business and results of operations could be affected by the passage of laws, policies and regulations. The implementation of trade barriers, countervailing duties, or border taxes, or the addition, relaxation or repeal of laws, policies and regulations regarding the industries and sectors in which we work could result in a decline in demand for our services, or may make the manner in which we perform our services, less profitable. Furthermore, changes to existing trade agreements may impact our business operations. We cannot predict when or whether any of these various legislative and regulatory proposals may become law or what their effect will be on us and our clients.
Past and future environmental, safety and health regulations could impose significant additional costs on us.
We are subject to numerous environmental laws and health and safety regulations. Our projects can involve the handling of hazardous and other highly regulated materials, including nuclear and other radioactive materials, which, if
26
Table of Contents
improperly handled or disposed of, could subject us to civil and criminal liabilities. It is impossible to reliably predict the full nature and effect of judicial, legislative or regulatory developments relating to health and safety regulations and environmental protection regulations applicable to our operations. The applicable regulations, as well as the length of time available to comply with those regulations, continue to develop and change. The cost of complying with regulations, satisfying any environmental remediation requirements for which we may be found responsible, or satisfying claims or judgments alleging personal injury, property damage or natural resource damages as a result of exposure to, or contamination by, hazardous materials, including as a result of commodities such as lead or asbestos-related products, could be substantial, may not be covered by insurance, could impact profitability and materially impact our operations.
We are subject to a number of regulations such as those from the U.S. Nuclear Regulatory Commission and non-U.S. regulatory bodies, such as the International Atomic Energy Commission and the European Union, which can have a substantial effect on our nuclear-related projects. Delays in receiving necessary approvals, permits or licenses, the failure to maintain sufficient compliance programs, and other problems encountered during construction (including changes to such regulatory requirements) could have an adverse effect on us.
A substantial portion of our business is generated either directly or indirectly as a result of federal, state, local and foreign laws and regulations related to environmental matters. A reduction in the number or scope of these laws or regulations, or changes in government policies regarding the funding, implementation or enforcement of such laws and regulations, could significantly reduce the size of one of our markets and limit our opportunities for growth or reduce our revenue below current levels.
Risks Related to our Equity and Corporate Governance Documents
If we issue additional equity securities, stockholders' ownership percentages would be diluted.
We may in the future issue additional equity securities to pay for potential acquisitions or to otherwise fund our corporate initiatives. If we do issue additional equity securities, the issuance may dilute our earnings per share and stockholders' percentage ownership, to the extent that our existing shareholders do not participate in the issuance.
Delaware law and our charter documents may impede or discourage a takeover or change of control.
Fluor is a Delaware corporation. Various anti-takeover provisions under Delaware law impose impediments on the ability of others to acquire control of us, even if a change of control would be beneficial to our stockholders. In addition, certain provisions of our charters and bylaws may impede or discourage a takeover. For example:
•stockholders may not act by written consent;
•there are various restrictions on the ability of a stockholder to call a special meeting or to nominate a director for election; and
•our Board of Directors can authorize the issuance of preferred shares.
These types of provisions in our charters and bylaws could also make it more difficult for a third party to acquire us, even if the acquisition would be beneficial to our equity holders.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
We maintain a cybersecurity program designed to assess, identify and manage risks from cybersecurity threats that may result in adverse effects on the confidentiality, integrity and availability of our information systems. Security, privacy, information governance and compliance professionals are assigned to administer the program with oversight by our senior management team.
We have integrated cybersecurity risk into our broader enterprise risk management framework. Our cyber risk program leverages internationally recognized standards as appropriate. We use a combination of technology controls, human oversight and processes to actively monitor and protect our network and systems. All employees participate in a number of information security training programs. Employees receive training on how to spot and report cyber risks and events through our global cybersecurity awareness program. In addition, we hold cybersecurity risk insurance.
27
Table of Contents
We engage outside experts to evaluate and review our cybersecurity programs. These external reviews include regular audits, threat assessments, vulnerability scans, simulated attacks and other advice regarding information security practices. We regularly conduct incident response exercises with key stakeholders.
To manage risks associated with third-party service providers, we typically require new vendors with access to our computing environment or access to confidential or sensitive data to undergo a risk assessment from our information security team. We conduct periodic reviews of these vendors to evaluate compliance with our cybersecurity policies. We strive to ensure that our contracts with such vendors require them to maintain security controls in line with industry best practices, applicable laws and our policies. We rely on vendors to notify us in a timely manner of material cybersecurity incidents, by virtue of the documents governing their relationship with us or applicable law.
Governance
Cybersecurity is overseen by our Board of Directors with assistance from the Audit Committee. Our Board of Directors receives quarterly reports from management which may address a broad range of cybersecurity and IT topics, including trends, regulatory developments, data security policies and practices, cybersecurity incidents, current and projected threat assessments and ongoing efforts to prevent, detect and respond to critical threats.
Our Audit Committee, which is responsible for oversight of cybersecurity risks, periodically reviews and discusses with management, including the Chief Information Officer ("CIO") and the Chief Information Security Officer ("CISO"), risk issues associated with cybersecurity and policies and controls intended to mitigate those risks.
Our CISO, who has extensive cybersecurity knowledge and skills gained from over 25 years of work experience, heads the team responsible for cybersecurity. Our CISO’s team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards and processes. The team includes senior professionals, many with more than 15 years of cybersecurity expertise and industry certifications such as Certified Information Security Systems Professional, CompTIA Security+, Global Information Assurance Certification, and Certified Ethical Hacker. Members of the team are provided with opportunities to attend external training, conferences, and other events to keep abreast of the latest cybersecurity trends. Our CISO receives ongoing updates from his team regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Our CISO meets with our Audit Committee at least annually to discuss cybersecurity risk and related issues. These meetings may encompass a broad range of topics, including:
•cybersecurity initiatives and strategies,
•cybersecurity events,
•emerging threats,
•regulatory requirements, and
•industry standards.
In the event of a cybersecurity incident, we have an incident response plan which sets forth a framework to report and document such incidents to our cybersecurity incident response team. This framework aims to enable the response team to take actions to monitor, mitigate and remediate such incidents in a timely manner. Cybersecurity incidents are regularly reported to the CIO and CISO and certain critical events are reported to the CEO and the crisis management team comprised of senior executives. We also have protocols in place by which certain cybersecurity incidents are reported to the Board of Directors as part of their oversight of cybersecurity matters.
Cybersecurity Risks, Threats and Material Incidents
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results or operations or financial condition, and we do not believe that such risks are reasonably likely to have such an effect over the long term. While we are not aware of any cybersecurity incidents through the date of this report that have materially affected us, there can be no guarantee that we will not be the subject of future material cybersecurity incidents. Additional information on cybersecurity risks we face can be found in Item 1A of this 10-K, which should be read in conjunction with the foregoing information.
28
Table of Contents
Item 2. Properties
Major Facilities
Our global operations span 3.7 million rentable square feet across both owned and leased properties. Our executive offices are located at 6700 Las Colinas Boulevard, Irving, Texas. Given the dynamic nature of our business, the extent of facility utilization by specific segment varies and cannot be precisely stated. Additionally, some of our properties are leased or subleased to third-party tenants.
In addition to our significant facilities, we lease or own a number of individually smaller offices, warehouses and equipment yards strategically located worldwide. While we maintain a global presence, the following summarizes our more significant existing facilities:
Location Interest
United States:
Greenville, South Carolina Owned and Leased
Houston, Texas Leased
Irving, Texas (Corporate Headquarters) Owned
Southern California (Aliso Viejo and Long Beach) Leased
Canada:
Calgary, Alberta Owned
Vancouver, British Columbia Leased
Latin America:
Santiago, Chile Owned and Leased
Europe, Africa and the Middle East:
Al Khobar, Saudi Arabia Owned
Amsterdam, Netherlands Owned
Farnborough, England Owned and Leased
Gliwice, Poland Owned and Leased