10-Q/A

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

Or

☐        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to

Commission File Number:  1-16129

FLUOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		33-0927079
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
6700 Las Colinas Boulevard
Irving,	Texas	75039
(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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.  Yes ý No o

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý No o

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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ý

As of April 30, 2021, 141,339,543 shares of the registrant’s common stock, $0.01 par value, were outstanding.

Table of Contents

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 filed by Fluor Corporation (the "Original Filing") is to correct an inaccurate reference appearing in one of the chief executive officer's certifications filed as an exhibit to the Original Filing. Because the correction relates to one of the executive officer certifications, the Company is refiling the entire Form 10-Q. This Amendment No. 1 only affects the Exhibit and does not otherwise change or update disclosures or financial information set forth in the Original Filing.

Table of Contents

FLUOR CORPORATION

FORM 10-Q

TABLE OF CONTENTS			PAGE
	Glossary of Terms		2
Part I:	Financial Information
	Item 1:	Financial Statements
		Condensed Consolidated Statement of Operations (Unaudited)	3
		Condensed Consolidated Statement of Comprehensive Income (Loss) (Unaudited)	4
		Condensed Consolidated Balance Sheet (Unaudited)	5
		Condensed Consolidated Statement of Cash Flows (Unaudited)	6
		Condensed Consolidated Statement of Changes in Equity (Unaudited)	7
		Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3:	Quantitative and Qualitative Disclosures about Market Risk	34
	Item 4:	Controls and Procedures	35
	Changes in Consolidated Backlog (Unaudited)		36
Part II:	Other Information
	Item 1:	Legal Proceedings	37
	Item 1A:	Risk Factors	37
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	37
	Item 4:	Mine Safety Disclosures	37
	Item 6:	Exhibits	38
Signatures			39

Table of Contents

Glossary of Terms

The definitions and abbreviations set forth below apply to the indicated terms used throughout this filing.

Abbreviation/Term	Definition
2020 10-K	Annual Report on Form 10-K for the year ended December 31, 2020
2020 Quarter	Three months ended March 31, 2020
2021 Quarter	Three months ended March 31, 2021
AOCI	Accumulated other comprehensive income (loss)
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Cont Ops	Continuing operations
Corporate G&A	Corporate general and administrative expense
COVID-19	Coronavirus pandemic
DB plan	Defined benefit pension plan
Disc Ops	Discontinued operations
DOE	U.S. Department of Energy
EPC	Engineering, procurement and construction
EPS	Earnings per share
Exchange Act	Securities Exchange Act of 1934
Fluor	Fluor Corporation
GAAP	Accounting principles generally accepted in the United States
ICFR	Internal control over financial reporting
LNG	Liquefied natural gas
NCI	Noncontrolling interests
NM	Not meaningful
NuScale	NuScale Power, LLC; A designer of small modular nuclear reactors
OCI	Other comprehensive income (loss)
Q1 2021 10-Q	Quarterly Report on Form 10-Q for the three months ended March 31, 2021
RSU	Restricted stock units
RUPO	Remaining unsatisfied performance obligations
SEC	Securities and Exchange Commission
Stork	Stork Holding B.V. and subsidiaries; Acquired by Fluor in 2016
SMR	Small modular reactor
VDI	Value driver incentive
VIE	Variable interest entity

Table of Contents

PART I:  FINANCIAL INFORMATION

Item 1. Financial Statements

FLUOR CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

UNAUDITED

	Three Months Ended<br>March 31,
(in thousands, except per share amounts)	2021		2020
Revenue	$	2,938,526	$	3,697,694
Cost of revenue	2,845,750		3,633,848
Gross profit	92,776		63,846
Corporate general and administrative expense	(65,594)		(33,558)
Impairment, restructuring and other exit costs	(26,392)		(102,365)
Foreign currency gain (loss)	(11,270)		45,162
Operating profit	(10,480)		(26,915)
Interest expense	(20,724)		(16,551)
Interest income	3,649		11,925
Earnings (loss) from Cont Ops before taxes	(27,555)		(31,541)
Income tax expense (benefit)	598		(62,281)
Net earnings (loss) from Cont Ops	(28,153)		30,740
Net earnings (loss) from Disc Ops	(25,759)		(287,190)
Net earnings (loss)	(53,912)		(256,450)
Less: Net earnings (loss) attributable to NCI from Cont Ops	32,819		9,132
Net earnings (loss) attributable to Fluor from Cont Ops	(60,972)		21,608
Less: Net earnings (loss) attributable to NCI from Disc Ops	293		377
Net earnings (loss) attributable to Fluor from Disc Ops	(26,052)		(287,567)
Net earnings (loss) attributable to Fluor	$	(87,024)	$	(265,959)
Basic earnings (loss) per share attributable to Fluor
Net earnings (loss) from Cont Ops	$	(0.43)	$	0.15
Net earnings (loss) from Disc Ops	(0.19)		(2.05)
Net earnings (loss)	$	(0.62)	$	(1.90)
Diluted earnings (loss) per share attributable to Fluor
Net earnings (loss) from Cont Ops	$	(0.43)	$	0.15
Net earnings (loss) from Disc Ops	(0.19)		(2.05)
Net earnings (loss)	$	(0.62)	$	(1.90)

The accompanying notes are an integral part of these financial statements.

Table of Contents

FLUOR CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED

	Three Months Ended<br>March 31,
(in thousands)	2021		2020
Net earnings (loss)	$	(53,912)	$	(256,450)
OCI, net of tax:
Foreign currency translation adjustment	2,699		(111,101)
Ownership share of equity method investees’ OCI	(2,064)		(8,172)
DB plan adjustments	1,651		1,046
Unrealized gain (loss) on hedges	(3,051)		(5,470)
Total OCI, net of tax	(765)		(123,697)
Comprehensive income (loss)	(54,677)		(380,147)
Less: Comprehensive income (loss) attributable to NCI	32,910		5,292
Comprehensive income (loss) attributable to Fluor	$	(87,587)	$	(385,439)

The accompanying notes are an integral part of these financial statements.

Table of Contents

FLUOR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

UNAUDITED

(in thousands, except share and per share amounts)	March 31,<br>2021		December 31,<br>2020
ASSETS
Current assets
Cash and cash equivalents ($608,448 and $654,852 related to VIEs)	$	1,937,800	$	2,198,781
Marketable securities ($66 related to VIEs in both periods)	18,698		23,345
Accounts and notes receivable, net ($219,061 and $238,376 related to VIEs)	862,305		935,676
Contract assets ($364,234 and $237,923 related to VIEs)	1,007,283		859,675
Other current assets ($27,914 and $29,408 related to VIEs)	385,359		378,043
Current assets held for sale	958,092		638,489
Total current assets	5,169,537		5,034,009
Noncurrent assets
Property, plant and equipment ($36,830 and $34,847 related to VIEs)	456,733		463,827
Goodwill	206,958		207,369
Investments	520,995		527,416
Deferred taxes	81,376		77,915
Deferred compensation trusts	313,659		350,427
Other assets ($40,919 and $40,829 related to VIEs)	271,657		269,610
Noncurrent assets held for sale	—		379,239
Total noncurrent assets	1,851,378		2,275,803
Total assets	$	7,020,915	$	7,309,812
LIABILITIES AND EQUITY
Current liabilities
Accounts payable ($290,920 and $328,940 related to VIEs)	$	1,102,174	$	1,115,625
Short-term borrowings	4,704		4,890
Contract liabilities ($253,006 and $262,811 related to VIEs)	1,035,932		1,093,761
Accrued salaries, wages and benefits ($24,702 and $28,381 related to VIEs)	506,654		578,827
Other accrued liabilities ($27,553 and $36,646 related to VIEs)	296,357		376,451
Current liabilities related to assets held for sale	495,524		402,483
Total current liabilities	3,441,345		3,572,037
Long-term debt	1,678,496		1,701,098
Deferred taxes	77,583		80,745
Other noncurrent liabilities ($9,264 and $9,164 related to VIEs)	578,834		593,765
Noncurrent liabilities related to assets held for sale	—		98,940
Contingencies and commitments
Equity
Shareholders’ equity
Preferred stock — authorized 20,000,000 shares ($0.01 par value); none issued	—		—
Common stock — authorized 375,000,000 shares ($0.01 par value); issued and outstanding — 141,339,543 and 140,715,205 shares in 2021 and 2020, respectively	1,410		1,404
Additional paid-in capital	236,923		195,940
AOCI	(417,469)		(416,906)
Retained earnings	1,162,790		1,249,809
Total shareholders’ equity	983,654		1,030,247
NCI	261,003		232,980
Total equity	1,244,657		1,263,227
Total liabilities and equity	$	7,020,915	$	7,309,812

The accompanying notes are an integral part of these financial statements.

Table of Contents

FLUOR CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

UNAUDITED

	Three Months Ended<br>March 31,
(in thousands)	2021		2020
OPERATING CASH FLOW
Net earnings (loss)	$	(53,912)	$	(256,450)
Adjustments to reconcile net earnings (loss) to operating cash flow:
Impairment expense - Cont Ops	26,392		102,365
Impairment expense - Disc Ops	20,500		295,239
Depreciation	23,720		26,528
Amortization of intangibles	280		2,189
(Earnings) loss from equity method investments, net of distributions	922		1,354
(Gain) loss on sales of assets	1,729		(948)
Stock-based compensation	10,193		5,977
Deferred taxes	(5,494)		(5,055)
Net retirement plan expense (contributions)	(9,406)		(5,833)
Changes in assets and liabilities	(229,525)		(232,102)
Other	(15,952)		2,993
Operating cash flow	(230,553)		(63,743)
INVESTING CASH FLOW
Purchases of marketable securities	(6,335)		(6,115)
Proceeds from the sales and maturities of marketable securities	11,066		6,921
Capital expenditures	(30,141)		(30,094)
Proceeds from sales of property, plant and equipment	8,301		13,465
Investments in partnerships and joint ventures	(47,829)		(5,971)
Other	433		56
Investing cash flow	(64,505)		(21,738)
FINANCING CASH FLOW
Dividends paid	—		(14,700)
Other borrowings	3,264		22,203
Distributions paid to NCI	(8,418)		(2,751)
Capital contributions by NCI	42,101		19,968
Taxes paid on vested restricted stock	(4,037)		(1,208)
Other	(4,520)		(884)
Financing cash flow	28,390		22,628
Effect of exchange rate changes on cash	5,687		(63,472)
Increase (decrease) in cash and cash equivalents	(260,981)		(126,325)
Cash and cash equivalents at beginning of period	2,198,781		1,997,199
Cash and cash equivalents at end of period	$	1,937,800	$	1,870,874

The accompanying notes are an integral part of these financial statements.

Table of Contents

FLUOR CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands, except per share amounts)		Common Stock				Additional Paid-In Capital		AOCI		Retained<br>Earnings		Total Shareholders' Equity		NCI		Total<br>Equity
	Shares		Amount
BALANCE AS OF<br>DECEMBER 31, 2020		140,715		$	1,404	$	195,940	$	(416,906)	$	1,249,809	$	1,030,247	$	232,980	$	1,263,227
Net earnings (loss)		—		—		—		—		(87,024)		(87,024)		33,112		(53,912)
OCI		—		—		—		(563)		—		(563)		(202)		(765)
Distributions to NCI		—		—		—		—		—		—		(8,418)		(8,418)
Capital contributions by NCI		—		—		—		—		—		—		42,101		42,101
Other NCI transactions		—		—		34,343		—		—		34,343		(38,570)		(4,227)
Stock-based compensation		625		6		6,640		—		5		6,651		—		6,651
BALANCE AS OF<br>MARCH 31, 2021		141,340		$	1,410	$	236,923	$	(417,469)	$	1,162,790	$	983,654	$	261,003	$	1,244,657
(in thousands, except per share amounts)	Common Stock				Additional Paid-In Capital		AOCI		Retained<br>Earnings		Total Shareholders' Equity		NCI		Total<br>Equity
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Amount
BALANCE AS OFDECEMBER 31, 2019	140,174		$	1,399	$	165,314	$	(379,873)	$	1,700,912	$	1,487,752	$	96,340	$	1,584,092
Net earnings (loss)	—		—		—		—		(265,959)		(265,959)		9,509		(256,450)
Cumulative adjustment for the adoption of ASC 326	—		—		—		—		(1,977)		(1,977)		—		(1,977)
OCI	—		—		—		(119,480)		—		(119,480)		(4,217)		(123,697)
Dividends (0.10 per share)	—		—		—		—		(14,131)		(14,131)		—		(14,131)
Distributions to NCI	—		—		—		—		—		—		(2,751)		(2,751)
Capital contributions by NCI	—		—		—		—		—		—		19,968		19,968
Other NCI transactions	—		—		672		—		—		672		(329)		343
Stock-based compensation	359		4		4,764		—		—		4,768		—		4,768
BALANCE AS OFMARCH 31, 2020	140,533		$	1,403	$	170,750	$	(499,353)	$	1,418,845	$	1,091,645	$	118,520	$	1,210,165

All values are in US Dollars.

The accompanying notes are an integral part of these financial statements.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

1.  Principles of Consolidation
   

These financial statements do not include footnotes and certain financial information normally presented annually under GAAP, and therefore, should be read in conjunction with our 2020 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. Although such estimates are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available, our reported results of operations may not necessarily be indicative of results that we expect for the full year.

The financial statements included herein are unaudited. In management's opinion, they contain all adjustments of a normal recurring nature which are necessary to present fairly our financial position and our operating results as of and for the interim periods presented. All significant intercompany transactions of consolidated subsidiaries are eliminated. Certain amounts in 2020 have been reclassified to conform to the 2021 presentation, which includes the segregation of Disc Ops and assets and liabilities held for sale. Segment operating information for 2020 has been recast to reflect changes in the composition of our reportable segments during 2021. Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. Management has evaluated all material events occurring subsequent to March 31, 2021 through the filing date of this Q1 2021 10-Q.

Quarters are typically 13 weeks in length but, due to our fiscal year ending on December 31, the number of weeks in a reporting period may vary slightly during the year and for comparable prior year periods. We report our quarterly results of operations based on periods ending on the Sunday nearest March 31, June 30 and September 30, allowing for a 13-week quarter. For clarity of presentation, all periods are presented as if the periods ended on March 31, June 30 and September 30.

In the first quarter of 2021, we committed to a plan to sell our Stork business, and our plan to sell the AMECO equipment business remains unchanged. Therefore, both Stork and AMECO are reported as Disc Ops. We expect to complete the sale of Stork before the end of the first quarter of 2022 and the sale of AMECO within the first half of 2021. The assets and liabilities of the Stork and AMECO businesses are classified as held for sale for all periods presented.

2.  Recent Accounting Pronouncements
   

Accounting pronouncements that were implemented by us during the 2021 Quarter

In the first quarter of 2021, we adopted ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which simplifies accounting for convertible instruments and the application of the derivatives scope exception for contracts in our own equity. ASU 2020-06 eliminates two of the three models in the current guidance that require separating embedded conversion features from convertible instruments and also eliminates some of the requirements for equity classification. ASU 2020-06 also addresses how convertible instruments are accounted for in the diluted EPS calculation. The adoption did not have any impact on our financial statements.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

3.   Earnings Per Share
   

Potentially dilutive securities include stock options, RSUs, restricted stock and performance-based award units. Diluted EPS reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.

	Three Months Ended<br>March 31,
(in thousands, except per share amounts)	2021		2020
Amounts attributable to Fluor:
Net earnings (loss) from Cont Ops	$	(60,972)	$	21,608
Net earnings (loss) from Disc Ops	(26,052)		(287,567)
Net earnings (loss)	$	(87,024)	$	(265,959)
Basic EPS attributable to Fluor:
Weighted average common shares outstanding	140,900		140,262
Net earnings (loss) from Cont Ops	$	(0.43)	$	0.15
Net earnings (loss) from Disc Ops	(0.19)		(2.05)
Net earnings (loss)	$	(0.62)	$	(1.90)
Diluted EPS attributable to Fluor:
Weighted average common shares outstanding	140,900		140,262
Dilutive effects:
Stock options, RSUs, restricted stock and performance-based award units (1)	—		—
Weighted average diluted shares outstanding	140,900		140,262
Net earnings (loss) from Cont Ops	$	(0.43)	$	0.15
Net earnings (loss) from Disc Ops	(0.19)		(2.05)
Net earnings (loss)	$	(0.62)	$	(1.90)
(1) Anti-dilutive securities not included in shares outstanding	1,900		438

4.  Operating Information by Segment and Geographic Area
   

During the first quarter of 2021, we changed the composition of our segments to implement our new strategy and to pursue opportunities in our designated markets. We now report our operating results as follows: Energy Solutions, Urban Solutions, Mission Solutions and Other. Segment operating information and assets for 2020 have been recast to conform to these changes.

Energy Solutions focuses on energy transition, chemicals, LNG, and traditional oil and gas opportunities. The segment is pursuing new opportunities emerging in the energy transition market including carbon capture, green chemicals, hydrogen, biofuels and other low carbon energy sources. The segment also continues to provide EPC services for the oil, gas and petrochemical industries.

Urban Solutions focuses on mining, metals, advanced technologies, manufacturing, life sciences, infrastructure and professional staffing services.

Mission Solutions focuses on federal agencies across the U.S. government and select international opportunities. These include, among others, the DOE, the Department of Defense, the Federal Emergency Management Agency and intelligence agencies. Mission Solutions includes the Radford and Warren projects which were previously reported in the Other segment.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

Other now includes only the operations of NuScale.

	Three Months Ended<br>March 31,
(in millions)	2021		2020
Revenue
Energy Solutions	$	991.0	$	1,359.3
Urban Solutions	1,194.2		1,592.2
Mission Solutions	753.3		746.2
Total revenue	$	2,938.5	$	3,697.7
Segment profit (loss)
Energy Solutions	$	2.2	$	(5.9)
Urban Solutions	29.8		51.3
Mission Solutions	43.6		32.1
Other	(15.7)		(22.8)
Total segment profit (loss)	$	59.9	$	54.7
Corporate G&A	(65.5)		(33.6)
Impairment, restructuring and other exit costs	(26.4)		(102.4)
Foreign currency gain (loss)	(11.3)		45.2
Interest income (expense), net	(17.1)		(4.6)
Earnings (loss) attributable to NCI from Cont Ops	32.8		9.1
Earnings (loss) from Cont Ops before taxes	$	(27.6)	$	(31.6)

Energy Solutions. Segment profit in the 2021 Quarter included an expense of $29 million related to an embedded foreign currency derivative. Segment profit in the 2020 Quarter included the adverse impacts of the recognition of reserves totaling $55 million for expected credit losses associated with certain joint venture clients, as well as margin diminution on a percentage-of-completion basis resulting from project positions taken with respect to COVID-19 related schedule delays and associated cost growth.

Urban Solutions. Intercompany revenue for our professional staffing business, excluded from the amounts shown above, was $69 million and $77 million for the 2021 Quarter and 2020 Quarter, respectively.

Other. NuScale expenses included in the determination of segment loss are reported net of qualified reimbursable expenses of $15 million and $13 million during the 2021 Quarter and 2020 Quarter, respectively. During the 2021 Quarter, JGC Holdings Corporation invested $40 million in NuScale. We and our advisors continue to engage with potential investors and capital providers to fund NuScale's path to commercialization.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

Total assets by segment are as follows:

(in millions)	March 31,<br>2021		December 31,<br>2020
Energy Solutions	$	1,017.6	$	1,010.9
Urban Solutions	1,134.0		1,122.5
Mission Solutions	620.9		575.8
Other	37.8		37.8
Corporate	3,281.9		3,574.7
Disc Ops - Assets held for sale	928.7		988.1
Total assets	$	7,020.9	$	7,309.8

Revenue by project location follows:

	Three Months Ended<br>March 31,
(in millions)	2021		2020
North America	$	1,971.6	$	2,328.5
Asia Pacific (including Australia)	336.7		308.7
Europe	254.9		476.9
Central and South America	264.7		423.7
Middle East and Africa	110.6		159.9
Total revenue	$	2,938.5	$	3,697.7

5.    Impairment, Restructuring and Other Exit Costs

Impairment

Impairment expense is summarized as follows:

	Three Months Ended<br>March 31,
(in thousands)	2021		2020
Impairment expense:
Energy Solutions' equity method investments	$	26,392	$	86,096
Information technology assets	—		16,269
Total impairment expense	$	26,392	$	102,365

Our business has been adversely affected by the economic impacts of the outbreak of COVID-19 and the steep decline in oil prices that occurred in the early part of 2020. These events have created significant uncertainty and economic volatility and disruption, which have impacted and may continue to impact our business. We have experienced, and may continue to experience, reductions in demand for certain of our services and the delay or abandonment of ongoing or anticipated projects due to our clients’, suppliers’ and other third parties’ diminished financial condition or financial distress, as well as governmental budget constraints. These impacts may continue or worsen under prolonged stay-at-home, social distancing, travel restrictions and other similar orders or restrictions. Significant uncertainty still exists concerning the magnitude of the impact and duration of these events. Because of these events, we performed interim impairment testing of our goodwill, intangible assets and investments during the 2020 Quarter. We recognized the above impairment expense on equity method investments and IT assets. We also recognized impairment expense on goodwill and intangible assets associated with the Stork business, now included in Disc Ops.

The valuation of our equity method investments utilized unobservable Level 3 inputs based on the investee's forecast of anticipated volumes and overhead absorption in a cyclical business.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

Restructuring and Other Exit Costs

During 2019, we initiated a restructuring plan designed to optimize costs and improve operational efficiency. These efforts primarily related to the rationalization of resources, investments, real estate and overhead across various geographies. Our recognition of costs for the planned restructuring activities was substantially completed by the end of 2020. The company did not recognize any material restructuring costs during the 2021 and 2020 Quarters.

A reconciliation of our restructuring liability follows:

(in thousands)	Severance		Lease Exit Costs		Total
Balance as of December 31, 2019	$	30,479	$	564	$	31,043
Restructuring charges accrued during the period	3,720		334		4,054
Cash payments / settlements during the period	(18,858)		(793)		(19,651)
Currency translation	1,140		1		1,141
Balance as of December 31, 2020	$	16,481	$	106	$	16,587
Cash payments / settlements during the period	$	(6,332)	$	—	$	(6,332)
Currency translation	(650)		—		(650)
Balance as of March 31, 2021	$	9,499	$	106	$	9,605

6.  Income Taxes
   

The effective tax rate on earnings (loss) from Cont Ops for the 2021 Quarter was (2.2)% compared to 197.5% for the 2020 Quarter. The effective tax rate in 2021 was unfavorably impacted by the increase in the valuation allowances against certain deferred benefits, primarily related to US net operating losses. The effective tax rate in 2020 was favorably impacted by the effect of the CARES Act on us. This 2020 benefit was offset by an increase in the valuation allowance against foreign tax credit carryforwards and certain foreign losses, as well as a small addition to uncertain tax benefits. Earnings attributable to NCI from Cont Ops, for which income taxes are not typically our responsibility, favorably impacted the effective tax rate for the 2021 Quarter.

7.  Cash Paid for Interest and Taxes
   

	Three Months Ended March 31,
(in thousands)	2021		2020
Cash paid for:
Interest	$	29,784	$	26,624
Income taxes (net of refunds)	31,794		7,486

8.  Partnerships and Joint Ventures
   

In the normal course of business, we form partnerships or joint ventures primarily for the execution of single contracts or projects. The majority of these partnerships or joint ventures are characterized by a 50 percent or less noncontrolling ownership or participation interest with decision making and distribution of expected gains and losses typically being proportionate to the ownership or participation interest. Many of the partnership and joint venture agreements provide for capital calls to fund operations, as necessary. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in “Accounts and notes receivable, net” was $215 million and $207 million as of March 31, 2021 and December 31, 2020, respectively.

One of our more significant joint ventures is COOEC Fluor, in which we have a 49% ownership interest. COOEC Fluor owns, operates and manages the Zhuhai Fabrication Yard in China’s Guangdong province. We made a capital contribution of $26 million to the joint venture during the 2021 Quarter, which satisfied our contractual funding requirements.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

Variable Interest Entities

We assess our partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. We consider a partnership or joint venture a VIE if it has any of the following characteristics:

(a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support,

(b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or

(c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

Upon the occurrence of certain events, we reassess our initial determination of whether the partnership or joint venture is a VIE. The majority of our partnerships and joint ventures qualify as VIEs because the total equity investment is typically nominal and not sufficient to permit the entity to finance its activities without additional subordinated financial support.

We also perform a qualitative assessment of each VIE to determine if we are its primary beneficiary. We conclude that we are the primary beneficiary and consolidate the VIE if we have both:

(a) the power to direct the economically significant activities of the entity and

(b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE.

We consider the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if we are the primary beneficiary. We also consider all parties that have direct or implicit variable interests when determining whether we are the primary beneficiary. Management's assessment of whether we are the primary beneficiary of a VIE is continuously performed.

The aggregate carrying value of unconsolidated VIEs (classified under both "Investments” and “Other accrued liabilities”) was a net asset of $182 million and $174 million as of March 31, 2021 and December 31, 2020, respectively. Some of our VIEs have debt; however, such debt is typically non-recourse in nature. Our maximum exposure to loss as a result of our investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding necessary to satisfy the contractual obligations of the VIE. Future funding commitments as of March 31, 2021 for the unconsolidated VIEs were $57 million.

In some cases, we are required to consolidate certain VIEs. As of March 31, 2021, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.3 billion and $630 million, respectively. As of December 31, 2020, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.2 billion and $688 million, respectively. The assets of a VIE are restricted for use only for the particular VIE and are not available for our general operations.

We have agreements with certain VIEs to provide financial or performance assurances to clients, as discussed elsewhere.

9.  Guarantees
   

In the ordinary course of business, we enter into various agreements providing performance assurances and guarantees to our clients on behalf of certain unconsolidated and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support project execution commitments. Performance guarantees have various expiration dates ranging from mechanical completion of the project to a period extending beyond contract completion. The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $16 billion as of March 31, 2021. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed. For lump-sum contracts, the performance guarantee amount is the

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, we may have recourse to third parties, such as owners, partners, subcontractors or vendors for claims. The performance guarantee obligation was not material as of March 31, 2021 and December 31, 2020.

10. Contingencies and Commitments

We and certain of our subsidiaries are subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, we currently do not expect that the ultimate resolution of any open matters will have a material adverse effect on our financial position or results of operations.

Since May 2018, purported shareholders have filed various complaints against Fluor and certain of its current and former executives in the U.S. District Court for the Northern District of Texas. The plaintiffs purport to represent a class of shareholders who purchased or otherwise acquired Fluor common stock from August 14, 2013 through February 14, 2020, and seek to recover damages arising from alleged violations of federal securities laws. These claims are based on statements concerning Fluor’s internal and disclosure controls, risk management, revenue recognition, and Fluor’s gas-fired power business, which plaintiffs assert were materially misleading. As of May 26, 2020, these complaints have been consolidated into one matter. We filed a motion to dismiss the matter on July 1, 2020. The motion was granted in part on May 5, 2021, and as a result the Court dismissed with prejudice all allegations except those relating to a single statement made in 2015 about one gas-fired power project. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of this action.

Since September 2018, ten separate purported shareholders' derivative actions were filed against current and former members of the Board of Directors, as well as certain of Fluor’s current and former executives. Fluor is named as a nominal defendant in the actions. These derivative actions purport to assert claims on behalf of Fluor and make substantially the same factual allegations as the securities class action matter discussed above and seek various forms of monetary and injunctive relief. These actions are pending in Texas state court (District Court for Dallas County), the U.S. District Court for the District of Delaware, the U.S. District Court for the Northern District of Texas, and the Court of Chancery of the State of Delaware. Certain of these actions were consolidated and stayed, at least while our motion to dismiss was pending in the securities class action matter. We anticipate seeking a further stay until final resolution of the securities class action. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of these actions.

Fluor Australia Ltd., our wholly-owned subsidiary (“Fluor Australia”), completed a cost reimbursable engineering, procurement and construction management services project for Santos Ltd. (“Santos”) involving a large network of natural gas gathering and processing facilities in Queensland, Australia. On December 13, 2016, Santos filed an action in Queensland Supreme Court against Fluor Australia, asserting various causes of action and seeking damages and/or a refund of contract proceeds paid of approximately AUD $1.47 billion. Santos has joined Fluor to the matter on the basis of a parent company guarantee issued for the project. We believe that the claims asserted by Santos are without merit and we are vigorously defending these claims. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of this action.

Fluor Limited, our wholly-owned subsidiary (“Fluor Limited”), and Fluor Arabia Limited, a partially-owned subsidiary (“Fluor Arabia”), completed cost reimbursable engineering, procurement and construction management services for Sadara Chemical Company (“Sadara”) involving a large petrochemical facility in Jubail, Kingdom of Saudi Arabia. On August 23, 2019, Fluor Limited and Fluor Arabia Limited commenced arbitration proceedings against Sadara after it refused to pay invoices totaling approximately $100 million due under the contracts. As part of the arbitration proceedings, Sadara has asserted various counterclaims for damages and/or a refund of contract proceeds paid totaling approximately $636 million against Fluor Limited and Fluor Arabia Limited. We believe that the counterclaims asserted by Sadara are without merit and are vigorously defending these claims. While no assurance can be given as to the ultimate outcome of the counterclaims, we do not believe it is probable that a loss will be incurred in excess of amounts reserved for this matter. Accordingly, we have not recorded any further liability as a result of the counterclaims.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

Various wholly-owned subsidiaries of Fluor, in conjunction with a partner, TECHINT, (“Fluor/TECHINT”) performed engineering, procurement and construction management services on a cost reimbursable basis for Barrick Gold Corporation involving a gold mine and ore processing facility on a site straddling the border between Argentina and Chile. In 2013 Barrick terminated the Fluor/TECHINT agreements for convenience and not due to the performance of Fluor/TECHINT. On August 12, 2016, Barrick filed a notice of arbitration against Fluor/TECHINT, demanding damages and/or a refund of contract proceeds paid of not less than $250 million under various claims relating to Fluor/TECHINT’s alleged performance. Proceedings were suspended while the parties explored a possible settlement. In August 2019, Barrick drew down $36 million of letters of credit from Fluor/TECHINT ($24 million from Fluor and $12 million from TECHINT). Thereafter, Barrick proceeded to reactivate the arbitration. In December 2020, Barrick and Fluor/TECHINT exchanged detailed statements of claim and counterclaim pursuant to which Barrick's claim against Fluor/TECHINT now totals approximately $330 million. We believe that the claims asserted by Barrick are without merit and are vigorously defending these claims. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of these claims.

Other Matters

We periodically evaluate our positions and the amounts recognized with respect to all our claims and back charges. As of both March 31, 2021 and December 31, 2020, we had recorded $216 million of claim revenue for costs incurred to date. Additional costs, which will increase the claim revenue balance over time, are expected to be incurred in future periods. We had no material disputed back charges to suppliers or subcontractors as of March 31, 2021 and December 31, 2020.

From time to time, we enter into contracts with the U.S. government and its agencies. Government contracts are subject to audits and investigations by government representatives with respect to our compliance with various restrictions and regulations applicable to government contractors, including but not limited to the allowability of costs incurred under reimbursable contracts. In connection with performing government contracts, we maintain reserves for estimated exposures associated with these matters.

Our operations are subject to and affected by federal, state and local laws and regulations regarding the protection of the environment. We maintain reserves for potential future environmental cost where such obligations are either known or considered probable, and can be reasonably estimated. We believe that our reserves with respect to future environmental cost are adequate and such future cost will not have a material effect on our consolidated financial position or results of operations.

In February 2020, we announced that the SEC is conducting an investigation and has requested documents and information related to projects for which we recorded charges in the second quarter of 2019. In April 2020, Fluor received a subpoena from the U.S. Department of Justice (“DOJ”) seeking documents and information related to the second quarter 2019 charges; certain of the projects associated with those charges; and certain project accounting, financial reporting and governance matters. We are coordinating responses to the SEC and DOJ and cooperating in providing the requested documents and information, which efforts are ongoing.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

11. Contract Assets and Liabilities

The following summarizes information about our contract assets and liabilities:

(in millions)	March 31,<br>2021		December 31,<br>2020
Information about contract assets:
Contract assets
Unbilled receivables - reimbursable contracts	$	641	$	590
Contract work in progress - lump-sum contracts	366		270
Contract assets	$	1,007	$	860
Advance billings deducted from contract assets	$	266	$	308
	Three Months Ended<br>March 31,
(in millions)	2021		2020
Information about contract liabilities:
Revenue recognized that was included in contract liabilities as of January 1	$	494	$	488

12. Remaining Unsatisfied Performance Obligations

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

(in millions)	March 31, 2021
Within 1 year	$	10,783
1 to 2 years	6,438
Thereafter	6,029
Total RUPO	$	23,250

During the 2021 Quarter, we removed approximately $1 billion from RUPO due to the cancellation of a chemicals project in North America.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

13. Debt and Lines of Credit

Debt consisted of the following:

(in thousands)	March 31, 2021		December 31, 2020
Borrowings under credit facility	$	—	$	—
Current:
Other borrowings	$	4,704	$	4,890
Long-term:
Senior Notes
2023 Notes	$	588,050	$	611,250
Unamortized discount on 2023 Notes	(242)		(283)
Unamortized deferred financing costs	(1,043)		(1,203)
2024 Notes	500,000		500,000
Unamortized discount on 2024 Notes	(1,996)		(2,130)
Unamortized deferred financing costs	(1,564)		(1,670)
2028 Notes	600,000		600,000
Unamortized discount on 2028 Notes	(950)		(981)
Unamortized deferred financing costs	(3,759)		(3,885)
Total long-term	$	1,678,496	$	1,701,098

Credit Facility

As of March 31, 2021, letters of credit totaling $414 million were outstanding under our $1.65 billion credit facility, which matures in February 2023. The credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.65 to 1.0, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.5 billion, defined in the amended credit facility, which may be reduced to $1.25 billion upon the repayment of debt. The credit facility also contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, such collateral consisting broadly of our U.S. assets. Borrowings under the facility, which may be denominated in USD, EUR, GBP or CAD, bear interest at a base rate, plus an applicable borrowing margin. As of March 31, 2021, our financial covenants limited our further borrowings to approximately $869 million, although no amounts were drawn.

Uncommitted Lines of Credit

As of March 31, 2021, letters of credit totaling $927 million were outstanding under uncommitted lines of credit, although no amounts were drawn.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

14. Fair Value Measurements

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

	March 31, 2021								December 31, 2020
	Fair Value Hierarchy								Fair Value Hierarchy
(in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Deferred compensation trusts(1)	$	10,168	$	10,168	$	—	$	—	$	9,626	$	9,626	$	—	$	—
Derivative assets(2)
Foreign currency	22,987		—		22,987		—		22,667		—		22,667		—
Commodity	2,211		—		2,211		—		806		—		806		—
Liabilities:
Derivative liabilities(2)
Foreign currency	$	4,928	$	—	$	4,928	$	—	$	2,571	$	—	$	2,571	$	—
Commodity	2,715		—		2,715		—		5,059		—		5,059		—

_________________________________________________________

(1)    Consists of registered money market funds and an equity index fund. These investments, which are trading securities, represent the net asset value as of the close of business at the end of the period based on the last trade or official close of an active market or exchange.

(2)    Foreign currency and commodity derivatives are estimated using pricing models with market-based inputs, which take into account the present value of estimated future cash flows.

We have measured assets and liabilities held for sale and certain other impaired assets at fair value on a nonrecurring basis.

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

		March 31, 2021				December 31, 2020
(in thousands)	Fair Value<br>Hierarchy	Carrying<br>Value		Fair<br>Value		Carrying<br>Value		Fair<br>Value
Assets:
Cash(1)	Level 1	$	1,101,980	$	1,101,980	$	1,180,024	$	1,180,024
Cash equivalents(2)	Level 2	835,820		835,820		1,018,757		1,018,757
Marketable securities(2)	Level 2	18,698		18,698		23,345		23,345
Notes receivable, including noncurrent portion(3)	Level 3	26,485		26,485		28,488		28,488
Liabilities:
2023 Senior Notes(4)	Level 2	$	586,765	$	580,035	$	609,764	$	578,554
2024 Senior Notes(4)	Level 2	496,440		514,620		496,200		494,045
2028 Senior Notes(4)	Level 2	595,291		610,236		595,134		599,220
Other borrowings(5)	Level 2	4,704		4,704		4,890		4,890

_________________________________________________________

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

(2)     The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(3)    Notes receivable are carried at net realizable value which approximates fair value. Factors considered in determining the fair value include the credit worthiness of the borrower, current interest rates, the term of the note and any collateral pledged as security. Notes receivable are periodically assessed for impairment.

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

(5)    Other borrowings represent bank loans and other financing arrangements which mature within one year. The carrying amount of borrowings under these arrangements approximates fair value because of the short-term maturity.

15. Stock-Based Compensation

Our executive and director stock-based compensation plans are described more fully in the 2020 10-K. In the 2021 Quarter, RSUs totaling 545,527 were granted to executives at a weighted-average grant date fair value of $18.13 per share. RSUs granted to executive officers in 2021 and 2020 generally vest over three years. The fair value of RSUs represents the closing price of our common stock on the date of grant.

Stock options for the purchase of 481,626 shares at a weighted-average exercise price of $17.96 per share were awarded to executives during the 2021 Quarter. The exercise price of options represents the closing price of our common stock on the date of grant. The options granted in 2021 and 2020 generally vest over three years and generally expire ten years after the grant date.

Performance-based award units totaling 613,868 were awarded to executive officers during the 2021 Quarter. These awards generally vest after a period of 3 years and contain annual performance conditions for each of the 3 years of the vesting period. Under GAAP, performance-based awards are not deemed granted until the performance targets have been established. The performance targets for each year are generally established in the first quarter. Accordingly, only one-third of the units awarded in any given year are deemed to be granted each year of the 3 year vesting periods. During 2021, the following units were granted:

	Performance-based Award Units Granted in 2021	Weighted Average<br>Grant Date<br>Fair Value<br>Per Share
2021 Performance Award Plan	204,623	$20.49
2020 Performance Award Plan	385,455	$19.98
2019 Performance Award Plan	116,844	$20.18

The number of units are adjusted at the end of each performance period based on achievement of certain performance targets and market conditions, as defined in the award agreements. The grant date fair value is determined by adjusting the closing price of our common stock on the date of grant for the effect of the market condition. Units granted under the 2021, 2020 and 2019 performance award plans can only be settled in our stock and are accounted for as equity awards under GAAP.

There were no RSUs, options or performance-based award units awarded to executives during the 2020 Quarter. Instead, RSUs, options and performance-based award units were awarded to executives in September 2020 following the filing of our 2019 10-K.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

16. Retirement Plans

Net periodic pension expense for our DB plans includes the following components:

		Three Months Ended<br>March 31,
(in thousands)	Location of Component	2021		2020
Service cost	Cost of revenue	$	4,393	$	4,205
Interest cost	Corporate G&A	1,778		2,240
Expected return on assets	Corporate G&A	(7,239)		(6,304)
Amortization of prior service credit	Corporate G&A	(218)		(218)
Recognized net actuarial loss	Corporate G&A	1,437		1,138
Net periodic pension expense		$	151	$	1,061

We currently expect to contribute up to $16 million into our DB plans during 2021, which we expect to be in excess of the minimum funding required. During the three months ended March 31, 2021, we made contributions of approximately $10 million.

17. Derivatives and Hedging

We attempt to limit foreign currency exposure in most of our contracts by denominating contract revenue in the currencies in which cost is incurred. Certain financial exposure, which includes currency and commodity price risk associated with engineering and construction contracts and currency risk associated with monetary assets and liabilities denominated in nonfunctional currencies, may subject us to earnings volatility. We may implement a hedging strategy utilizing derivatives instruments or hedging instruments to mitigate such risk. Our hedging instruments are designated as either fair value or cash flow hedges. We formally document our hedge relationships at inception, including identification of the hedging instruments and the hedged items, our risk management objectives and strategies for undertaking the hedge transaction, and the initial quantitative assessment of the hedging instrument's effectiveness in offsetting changes in the fair value of the hedged items. We subsequently assess hedge effectiveness qualitatively, unless the hedge relationship is no longer highly effective. All hedging instruments are recorded at fair value. For fair value hedges, the change in fair value is offset against the change in the fair value of the underlying asset or liability through earnings. For cash flow hedges, the change in fair value is recorded as a component of AOCI and is reclassified into earnings when the hedged item settles. For derivatives that are not designated or do not qualify as hedging instruments, the change in the fair value of the derivative is offset against the change in the fair value of the underlying asset or liability through earnings. In certain limited circumstances, foreign currency payment provisions could be deemed embedded derivatives. If an embedded foreign currency derivative is identified, the derivative is bifurcated from the host contract and the change in fair value is recognized through earnings. We maintain master netting arrangements with certain counterparties to facilitate the settlement of derivative instruments; however, we report the fair value of derivatives on a gross basis.

Derivatives Designated as Hedges

As of March 31, 2021, we had total gross notional amounts of $656 million of foreign currency contracts outstanding (primarily related to the Canadian Dollar, Chinese Yuan, British Pound, Euro, Indian Rupee and Philippine Peso) that were designated as hedges. These foreign currency contracts are of varying duration, none of which extend beyond December 2024. There were no commodity contracts outstanding that were designated as hedges as of March 31, 2021.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

The fair values of derivatives designated as hedging instruments follows:

	Asset Derivatives					Liability Derivatives
(in thousands)	Balance Sheet<br>Location	March 31,<br>2021		December 31,<br>2020		Balance Sheet<br>Location	March 31,<br>2021		December 31,<br>2020
Foreign currency contracts	Other current assets	$	16,789	$	20,004	Other accrued liabilities	$	1,244	$	4
Foreign currency contracts	Other assets	2,795		2,184		Noncurrent liabilities	49		25
Total		$	19,584	$	22,188		$	1,293	$	29

The after-tax amount of gain (loss) recognized in OCI and reclassified from AOCI into earnings associated with derivative instruments designated as cash flow hedges follows:

	After-Tax Amount of Gain (Loss) Recognized in OCI					After-Tax Amount of Gain (Loss) Reclassified from AOCI into Earnings
	Three Months Ended<br>March 31,					Three Months Ended<br>March 31,
Cash Flow Hedges (in thousands)	2021		2020		Location of Gain (Loss)	2021		2020
Foreign currency contracts	$	872	$	(5,140)	Cost of revenue	$	4,342	$	626
Commodity contracts	—		(111)		Cost of revenue	—		12
Interest rate contracts	—		—		Interest expense	(419)		(419)
Total	$	872	$	(5,251)		$	3,923	$	219

Derivatives Not Designated as Hedges

As of March 31, 2021, we also had total gross notional amounts of $197 million of foreign currency contracts and $28 million of commodity contracts outstanding that were not designated as hedges. The foreign currency contracts primarily related to contract obligations denominated in nonfunctional currencies. The fair value of derivatives not designated as hedges, as well as the associated gains and losses were not material for any period presented.

18. Other Comprehensive Income (Loss)

The components of OCI follow:

	Three Months Ended<br>March 31, 2021						Three Months Ended<br>March 31, 2020
(in thousands)	Before-Tax<br>Amount		Tax<br>Benefit<br>(Expense)		Net-of-Tax<br>Amount		Before-Tax<br>Amount		Tax<br>Benefit<br>(Expense)		Net-of-Tax<br>Amount
OCI:
Foreign currency translation adjustments	$	2,710	$	(11)	$	2,699	$	(111,101)	$	—	$	(111,101)
Ownership share of equity method investees’ OCI	(2,439)		375		(2,064)		(2,519)		(5,653)		(8,172)
DB plan adjustments	1,200		451		1,651		1,002		44		1,046
Unrealized gain (loss) on hedges	(3,449)		398		(3,051)		(5,874)		404		(5,470)
Total OCI	(1,978)		1,213		(765)		(118,492)		(5,205)		(123,697)
Less: OCI attributable to NCI	(202)		—		(202)		(4,217)		—		(4,217)
OCI attributable to Fluor	$	(1,776)	$	1,213	$	(563)	$	(114,275)	$	(5,205)	$	(119,480)

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

The changes in AOCI balances follow:

(in thousands)	Foreign<br>Currency<br>Translation		Ownership<br>Share of<br>Equity Method<br>Investees’ OCI		DB Plans		Unrealized<br>Gain (Loss)<br>on Hedges		AOCI, Net
Attributable to Fluor:
Balance as of December 31, 2020	$	(260,960)	$	(53,984)	$	(118,589)	$	16,627	$	(416,906)
OCI before reclassifications	2,901		(2,203)		—		872		1,570
Amounts reclassified from AOCI	—		139		1,651		(3,923)		(2,133)
Net OCI	2,901		(2,064)		1,651		(3,051)		(563)
Balance as of March 31, 2021	$	(258,059)	$	(56,048)	$	(116,938)	$	13,576	$	(417,469)
Attributable to NCI:
Balance as of December 31, 2020	$	(4,168)	$	—	$	—	$	—	$	(4,168)
OCI before reclassifications	(202)		—		—		—		(202)
Amounts reclassified from AOCI	—		—		—		—		—
Net OCI	(202)		—		—		—		(202)
Balance as of March 31, 2021	$	(4,370)	$	—	$	—	$	—	$	(4,370)
Attributable to Fluor:
Balance as of December 31, 2019	$	(242,950)	$	(35,456)	$	(99,197)	$	(2,270)	$	(379,873)
OCI before reclassifications	(106,884)		(8,313)		—		(5,251)		(120,448)
Amounts reclassified from AOCI	—		141		1,046		(219)		968
Net OCI	(106,884)		(8,172)		1,046		(5,470)		(119,480)
Balance as of March 31, 2020	$	(349,834)	$	(43,628)	$	(98,151)	$	(7,740)	$	(499,353)
Attributable to NCI:
Balance as of December 31, 2019	$	(5,051)	$	—	$	—	$	—	$	(5,051)
OCI before reclassifications	(4,217)		—		—		—		(4,217)
Amounts reclassified from AOCI	—		—		—		—		—
Net OCI	(4,217)		—		—		—		(4,217)
Balance as of March 31, 2020	$	(9,268)	$	—	$	—	$	—	$	(9,268)

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

The reclassifications out of AOCI follow:

	Location in Statement of Operations		Three Months Ended<br>March 31,
(in thousands)		2021			2020
Component of AOCI:
Ownership share of equity method investees’ OCI	Cost of revenue		$	(186)		$	(188)
Income tax benefit	Income tax expense (benefit)		47			47
Net of tax			$	(139)		$	(141)
DB plan adjustments	Corporate G&A		$	(1,200)		$	(1,002)
Income tax expense	Income tax expense (benefit)		(451)			(44)
Net of tax			$	(1,651)		$	(1,046)
Unrealized gain (loss) on derivative contracts:
Commodity and foreign currency contracts	Various accounts(1)		$	5,218		$	642
Interest rate contracts	Interest expense		(419)			(419)
Income tax expense	Income tax expense (benefit)		(876)			(4)
Net of tax			$	3,923		$	219

(1)Gains and losses on commodity and foreign currency derivative contracts were reclassified to "Cost of revenue" and "Corporate G&A".

19. Discontinued Operations

In the first quarter of 2021, we committed to a plan to sell our Stork business, which had previously represented the majority of operations from our former diversified services segment. Our plan to sell the AMECO equipment business remains unchanged.

Impairment expense, included in Disc Ops, is summarized as follows:

	Three Months Ended<br> March 31, 2021		Three Months Ended March 31, 2020
(in thousands)	Stork			Stork		AMECO		Total
Impairment expense:
Goodwill	$	12,700		$	168,568	$	12,300	$	180,868
Intangible customer relationships	—			26,671		—		26,671
Fair value adjustment and expected costs associated with sale	7,800			—		87,700		87,700
Total impairment expense	$	20,500		$	195,239	$	100,000	$	295,239

As part of our assessment of goodwill, the fair value of the reporting unit was determined using an income based approach that utilized unobservable Level 3 inputs, including significant management assumptions such as expected awards, forecasted revenue and operating margins, weighted average cost of capital, working capital assumptions and general market trends and conditions.

The customer relationships' valuation approach utilized unobservable Level 3 inputs including ranges of assumptions of long-term revenue growth from 2% to 5.5% with a weighted average of 2.4%, weighted average cost of capital of 12% and a customer attrition factor of 10%.

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

The fair value of the AMECO assets were determined using a combination of observable level 2 inputs, including indicative offers and ongoing negotiations for the related assets.

Disc Ops information follows:

	Three Months Ended<br>March 31, 2021								Three Months Ended<br>March 31, 2020
(in thousands)	Stork		AMECO		Other		Total		Stork		AMECO		Other		Total
Revenue	$	384,252	$	40,716	$	—	$	424,968	$	420,012	$	61,387	$	—	$	481,399
Cost of revenue	381,083		43,970		1,050		426,103		418,818		49,094		5,696		473,608
Gross Profit	3,169		(3,254)		(1,050)		(1,135)		1,194		12,293		(5,696)		7,791
Corporate G&A	(378)		—		—		(378)		—		(14)		(7)		(21)
Impairment expense	(20,500)		—		—		(20,500)		(195,239)		(100,000)		—		(295,239)
Foreign currency gain (loss)	10		832		—		842		(1,146)		(72)		—		(1,218)
Operating profit	(17,699)		(2,422)		(1,050)		(21,171)		(195,191)		(87,793)		(5,703)		(288,687)
Interest (expense) income, net	(1,353)		104		—		(1,249)		(1,645)		50		—		(1,595)
Earnings (loss) before taxes from Disc Ops	(19,052)		(2,318)		(1,050)		(22,420)		(196,836)		(87,743)		(5,703)		(290,282)
Income tax expense (benefit)	2,624		715		—		3,339		(4,550)		1,458		—		(3,092)
Net earnings (loss) from Disc Ops	(21,676)		(3,033)		(1,050)		(25,759)		(192,286)		(89,201)		(5,703)		(287,190)
Less: Net earnings (loss) attributable to NCI from Disc Ops	294		(1)		—		293		377		—		—		377
Net earnings (loss) attributable to Fluor from Disc Ops	$	(21,970)	$	(3,032)	$	(1,050)	$	(26,052)	$	(192,663)	$	(89,201)	$	(5,703)	$	(287,567)

Table of Contents

FLUOR CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

The following summarized information related to assets and liabilities classified as held for sale:

	March 31, 2021												December 31, 2020
(in thousands)	Stork		AMECO		Other		Total from Disc Ops		Other Assets and Liabilities from Cont Ops		Total		Stork		AMECO		Other		Total from Disc Ops		Other Assets and Liabilities from Cont Ops		Total
Accounts and notes receivable, net	$	208,151	$	42,649	$	10,476	$	261,276	$	—	$	261,276	$	245,105	$	42,797	$	10,475	$	298,377	$	—	$	298,377
Contract assets	128,215		1,913		—		130,128		—		130,128		108,152		2,188		—		110,340		—		110,340
Other current assets	43,483		51,528		—		95,011		—		95,011		45,384		73,618		—		119,002		—		119,002
Current assets held for sale	379,849		96,090		10,476		486,415		—		486,415		398,641		118,603		10,475		527,719		—		527,719
Property, plant and equipment, net	90,686		82,190		—		172,876		24,508		197,384		97,258		67,380		—		164,638		24,538		189,176
Goodwill	121,374		—		—		121,374		—		121,374		141,889		—		—		141,889		—		141,889
Investments	4,240		—		—		4,240		4,861		9,101		4,649		—		—		4,649		5,064		9,713
Other assets	123,384		20,434		—		143,818		—		143,818		135,421		13,810		—		149,231		—		149,231
Noncurrent assets held for sale(1)	339,684		102,624		—		442,308		29,369		471,677		379,217		81,190		—		460,407		29,602		490,009
Total assets held for sale	$	719,533	$	198,714	$	10,476	$	928,723	$	29,369	$	958,092	$	777,858	$	199,793	$	10,475	$	988,126	$	29,602	$	1,017,728
Accounts payable	$	119,177	$	13,823	$	—	$	133,000	$	—	$	133,000	$	116,580	$	17,388	$	13	$	133,981	$	—	$	133,981
Short-term borrowings	22,115		—		—		22,115		—		22,115		20,525		—		—		20,525		—		20,525
Contract liabilities	41,252		784		—		42,036		—		42,036		46,997		782		—		47,779		—		47,779
Accrued salaries, wages and benefits	63,396		6,542		—		69,938		—		69,938		57,626		7,152		—		64,778		—		64,778
Other accrued liabilities	111,358		14,127		—		125,485		—		125,485		113,965		11,977		—		125,942		—		125,942
Current liabilities held for sale	357,298		35,276		—		392,574		—		392,574		355,693		37,299		13		393,005		—		393,005
Noncurrent liabilities held for sale(1)	89,913		13,037		—		102,950		—		102,950		98,940		9,478		—		108,418		—		108,418
Total liabilities held for sale	$	447,211	$	48,313	$	—	$	495,524	$	—	$	495,524	$	454,633	$	46,777	$	13	$	501,423	$	—	$	501,423

(1) Noncurrent assets and liabilities held for sale as of March 31, 2021 were classified as current given the expected timing of the sale.

Our cash flow information for the 2021 and 2020 Quarters included the following activities related to Disc Ops:

	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
(in thousands)	Stork	AMECO	Total	Stork	AMECO	Total
Capital expenditures	(3,344)	(10,832)	(14,176)	(6,415)	(8,073)	(14,488)

Table of Contents

FLUOR CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our financial statements and our 2020 10-K. Except as the context otherwise requires, the terms Fluor or the Registrant, as used herein, are references to Fluor and its predecessors and references to the company, we, us, or our, as used herein, shall include Fluor, its consolidated subsidiaries and joint ventures.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made herein, including statements regarding our projected revenue and earnings levels, cash flow and liquidity, new awards and backlog levels and the implementation of strategic initiatives are 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 wish to caution readers that forward-looking statements, including disclosures which use words such as we “believe,” “anticipate,” “expect,” “estimate” and similar statements, are subject to various risks and uncertainties which could cause actual results of operations to differ materially from expectations. Factors potentially contributing to such differences include, among others:

•The severity and duration of the COVID-19 pandemic and actions by governments, businesses and individuals in response to the pandemic;

•The cyclical nature of many of the markets we serve and our clients' vulnerability to downturns, which may result in decreased capital investment or expenditures and reduced demand for our services;

•Our failure to receive anticipated new contract awards and the related impact on revenue, earnings, staffing levels and cost;

•Failure to accurately estimate the cost and schedule for our contracts, resulting in cost overruns or liabilities, including those related to project delays and those caused by the performance of our clients, subcontractors, suppliers and joint venture or teaming partners;

•Intense competition in the global EPC industry, which can place downward pressure on our contract prices and profit margins and may increase our contractual risks;

•Failure of our joint venture partners to perform their venture obligations, which could impact the success of those ventures and impose additional financial and performance obligations on us, resulting in reduced profits or losses;

•Cybersecurity breaches of our systems and information technology;

•Civil unrest, security issues, labor conditions and other unforeseeable events in the countries in which we do business, resulting in unanticipated losses;

•Project cancellations, scope adjustments or deferrals, or foreign currency fluctuations, that could reduce the amount of our backlog and the revenue and profits that we earn;

•Inability to maintain safe work sites;

•Repercussions of events beyond our control, such as severe weather conditions, natural disasters, pandemics, political crises or other catastrophic events, that may significantly affect operations, result in higher cost or subject the company to liability claims by our clients;

•Differences between our actual results and the assumptions and estimates used to prepare our financial statements;

•Client delays or defaults in making payments;

•Failure of our suppliers or subcontractors to provide supplies or services at the agreed-upon levels or times;

•Uncertainties, restrictions and regulations impacting our government contracts;

•The inability to hire and retain qualified personnel;

•The potential impact of changes in tax laws and other tax matters including, but not limited to, those from foreign operations, the realizability of our deferred tax assets and the ongoing audits by tax authorities;

•Possible systems and information technology interruptions;

•The impact of anti-bribery and international trade laws and regulations;

•Our ability to secure appropriate insurance;

•The failure to be adequately indemnified for our nuclear services;

•The loss of business from one or more significant clients;

•The failure to adequately protect intellectual property rights;

•Impairments to goodwill, investments, deferred tax assets or other intangible assets;

•Failure to maintain an effective system of internal controls;

•Failure to prepare and timely file our periodic reports, which limits our access to public markets to raise debt and equity capital and restricts our ability to issue equity securities;

Table of Contents

•The restatement of certain of our previously issued consolidated financial statements, which may result in unanticipated costs and may affect investor confidence and our reputation;

•The availability of credit and restrictions imposed by credit facilities, both for us and our clients, suppliers,

subcontractors or other partners;

•Possible limitations of bonding or letter of credit capacity;

•Failure to obtain favorable results in existing or future litigation, regulatory proceedings or dispute resolution proceedings (including claims for indemnification), or claims against project owners, subcontractors or suppliers;

•Failure of our employees, agents or partners to comply with laws, which could result in harm to our reputation and reduced profits or losses;

•The impact of new or changing legal requirements, as well as past and future environmental, health and safety regulations including climate change regulations;

•Failure to successfully implement our strategic and operational initiatives;

•The risks associated with acquisitions, dispositions or other investments, including the failure to successfully integrate acquired businesses; and

•Restrictions on possible transactions imposed by our charter documents and Delaware law.

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, expansion, consolidation and other events to differ materially from those expressed or implied in such forward-looking statements.

Our actual results may differ materially from our expectations or projections. While most risks affect only future cost or revenue, some risks may relate to accruals that have already been reflected in earnings. Our failure to receive payments of accrued amounts or incurrence of liabilities in excess of amounts previously recognized could result in future charges. As a result, readers should recognize and consider the inherently uncertain nature of forward-looking statements and not place undue reliance on them.

Additional information concerning these and other factors can be found in our press releases and periodic filings with the SEC, including the 2020 10-K. These filings are available publicly on the SEC’s website at http://www.sec.gov, on our website at http://investor.fluor.com or upon request from our Investor Relations Department at (469) 398-7070. We cannot control such risk factors and other uncertainties, and in many cases, cannot predict the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. These risks and uncertainties should be considered when evaluating Fluor 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.

Results of Operations

During the first quarter of 2021, we changed the composition of our segments to implement our new strategy and to pursue opportunities in our designated markets. We now report our operating results in four reportable segments as follows: Energy Solutions, Urban Solutions, Mission Solutions and Other. Segment operating information and assets for 2020 have been recast to conform to these changes.

In the first quarter of 2021, we also committed to a plan to sell our Stork business, which had previously represented the majority of operations from our former diversified services segment. Our plan to sell the AMECO equipment business remains unchanged. Therefore, both Stork and AMECO are reported as Disc Ops along with other immaterial operations. We expect to complete the sale of Stork before the end of the first quarter of 2022 and the sale of AMECO within the first half of 2021. The assets and liabilities of the Stork and AMECO businesses are classified as held for sale for all periods presented.

Table of Contents

(In millions)
THREE MONTHS ENDED MARCH 31				2020
Revenue
Energy Solutions	991.0			$	1,359.3
Urban Solutions				1,592.2
Mission Solutions				746.2
Total revenue	2,938.5			$	3,697.7
Segment profit (loss) and margin %
Energy Solutions	2.2	0.2	%	$	(5.9)	(0.4)	%
Urban Solutions		2.5	%	51.3		3.2	%
Mission Solutions		5.8	%	32.1		4.3	%
Other		NM		(22.8)		NM
Total segment profit (loss) and margin % (1)	59.9	2.0	%	$	54.7	1.5	%
Corporate G&A				(33.6)
Impairment, restructuring and other exit costs				(102.4)
Foreign currency gain (loss)				45.2
Interest expense, net				(4.6)
Earnings (loss) attributable to NCI from Cont Ops				9.1
Earnings (loss) from Cont Ops before taxes				(31.6)
Income tax expense (benefit)				(62.3)
Net earnings (loss) from Cont Ops				30.7
Less: Net earnings (loss) attributable to NCI from Cont Ops				9.1
Net earnings (loss) attributable to Fluor from Cont Ops	(61.0)			$	21.6
New awards
Energy Solutions	1,609.3			$	1,542.3
Urban Solutions				1,607.8
Mission Solutions				684.0
Total new awards	3,662.4			$	3,834.1
New awards related to projects located outside of the U.S.				58%
Backlog				December 31,<br>2020
Energy Solutions	11,097.2			$	11,020.5
Urban Solutions				9,224.1
Mission Solutions				2,899.5
Total backlog	23,791.7			$	23,144.1
Backlog related to projects located outside of the U.S.				64%
Backlog related to lump-sum projects				60%

All values are in US Dollars.

(1) Total segment profit (loss) is a non-GAAP financial measure. We believe that total segment profit (loss) provides a meaningful perspective on our results as it is the aggregation of individual segment profit (loss) measures that we use to evaluate and manage our performance.

Our business has been adversely affected by the economic impacts of the outbreak of COVID-19 and the steep decline in oil prices that occurred in the early part of 2020. These events have created significant uncertainty and economic volatility and disruption, which have impacted and may continue to impact our business. We have experienced, and may continue to experience, reductions in demand for certain of our services and the delay or abandonment of ongoing or anticipated projects due to our clients’, suppliers’ and other third parties’ diminished financial condition or financial distress, as well as governmental budget constraints. Although we initially assessed our project estimates for COVID-19 during the first quarter of 2020, estimating isolated COVID-19 effects became increasingly difficult to measure. Our estimates reflect our best assessment of project results inclusive of COVID-19 effects, which have been dynamic as our projects have seen changes in prevailing regulations as COVID-19 cases crested and fell. These impacts may continue or worsen under prolonged stay-at-home, social

Table of Contents

distancing, travel restrictions and other similar orders or restrictions. Significant uncertainty still exists concerning the magnitude of the impact and duration of these events.

During 2021, consolidated revenue declined primarily due to volume declines on Energy Solutions and Urban Solutions projects, principally for projects which were completed or nearing completion. The revenue decline in 2021 was further compounded by COVID-19 related delays on certain large projects.

Total segment profit improved during the 2021 Quarter due to the adverse impacts of COVID-19 and expected credit losses recognized during the 2020 Quarter. The improvement in total segment profit in 2021 included the favorable resolution of certain client matters but was diminished by the factors driving the decline in revenue described above.

Impairment, Restructuring and Other Exit Costs

Impairment expense, included in Cont Ops, is summarized as follows:

	Three Months Ended<br>March 31,
(in thousands)	2021		2020
Impairment expense:
Equity method investments in Energy Solutions	$	26,392	$	86,096
Information technology assets	—		16,269
Total impairment expense	$	26,392	$	102,365

Impairment expense, included in Disc Ops, is summarized as follows:

	Three Months Ended<br> March 31, 2021		Three Months Ended March 31, 2020
(in thousands)	Stork			Stork		AMECO		Total
Impairment expense:
Goodwill	$	12,700		$	168,568	$	12,300	$	180,868
Intangible customer relationships	—			26,671		—		26,671
Fair value adjustment and expected costs associated with sale	7,800			—		87,700		87,700
Total impairment expense	$	20,500		$	195,239	$	100,000	$	295,239

The effective tax rate on earnings (loss) from Cont Ops for the 2021 Quarter was (2.2)% compared to 197.5% for the 2020 Quarter. The effective tax rate in 2021 was unfavorably impacted by the increase in the valuation allowances against certain deferred benefits, primarily related to US net operating losses. The effective tax rate in 2020 was favorably impacted by the effect of the CARES Act on us. This 2020 benefit was offset by an increase in the valuation allowance against foreign tax credit carryforwards and certain foreign losses, as well as a small addition to uncertain tax benefits. Earnings attributable to NCI from Cont Ops, for which income taxes are not typically our responsibility, favorably impacted the effective tax rate for the 2021 Quarter.

The lack of broad based new awards could continue to put pressure on our future earning streams, particularly in the Energy Solutions segment. The modest increase in backlog during 2021 primarily resulted from new award activity outpacing work performed. During the 2021 Quarter, we removed approximately $1 billion from backlog due to the cancellation of a chemicals project in North America. Backlog included $1.6 billion for projects in a loss position as of March 31, 2021. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Backlog differs from RUPO discussed elsewhere. RUPO includes only the amount of revenue we expect to recognize under contracts with definite terms and substantive termination provisions.

Segment Operations

Energy Solutions

Revenue in 2021 decreased compared to 2020 due to significant declines in the volume of execution activities for a large upstream project as well as several downstream and chemicals projects nearing completion, the absence of planned revenue from a canceled chemicals project in North America and COVID-19 related delays at a liquefied natural gas project. The revenue decline in 2021 was partially offset by the ramp up of execution activities for a chemicals project.

Table of Contents

Segment profit in 2021 was adversely affected by an expense of $29 million related to an embedded foreign currency derivative. Segment profit in 2020 was adversely affected by the recognition of reserves totaling $55 million for expected credit losses, as well as margin diminution arising from the initial recognition of COVID-19 related schedule delays and associated cost growth. Excluding these items, segment profit declined in 2021 due to the reduced execution activity for the upstream, downstream and chemicals projects discussed above as well as an increase in overhead. The change in segment profit margin was attributable to the same factors affecting segment profit.

New awards in 2021 increased compared to 2020 due to an incremental award for a refinery project in Mexico. Backlog increased during the 2021 Quarter despite the cancellation of a chemicals project in North America. Although we expect to benefit from opportunities in the chemicals and non-traditional oil and gas markets, the lack of broad based new awards could continue to put pressure on the segment's earnings in the near and intermediate term.

Urban Solutions

Revenue in 2021 decreased compared to 2020 primarily due to the nearing completion of two data center projects in Europe, slower progress on a large mining project in South America due to COVID-19 restrictions and a decline in the volume of execution activities on a mining project in Australia.

Segment profit in 2021 declined compared to 2020 due to the impacts of COVID-19 on the large mining project in South America, the nearing completion of the data center projects in Europe and forecast revisions for cost-to-complete on two infrastructure projects. The decline in segment profit in 2021 was partially offset by the favorable resolution of a long-standing customer dispute and favorable adjustments for commercial close out of a completed project. The change in segment profit margin was attributable to the same factors affecting segment profit.

New awards in 2021 decreased compared to 2020 partly due to more selectivity in project pursuits and delayed procurement efforts by many of our clients. In addition, we booked a significant North American steel project in the 2020 Quarter. New awards in the 2021 Quarter included a large life sciences project in Europe. Backlog increased slightly during the 2021 Quarter due to this award coupled with reduced burn as discussed above. Backlog included $1.4 billion for projects in a loss position as of March 31, 2021. Our staffing business does not report new awards or backlog.

Mission Solutions

Revenue in 2021 remained relatively flat compared to 2020. Increased execution activity at our DOE project sites and an increase in projected performance scores on several projects during the 2021 Quarter was offset by a decrease in execution activity on army logistics assistance programs in Afghanistan and Africa.

The increase in segment profit in 2021 was substantially driven by favorable contract modifications and increased execution activity on our DOE projects as well as the increase in projected performance scores on several projects. These effects were partially offset by the decrease in execution activity on army logistics assistance programs in Afghanistan and Africa. The increase in segment profit margin was driven by these same factors.

New awards in 2021 increased compared to 2020 due to extensions on a nuclear decontamination and decommissioning contract in Ohio and an environmental cleanup contract in Idaho. Backlog increased slightly during the 2021 Quarter due to the new award activity. Backlog included $1.0 billion of unfunded government contracts as of both March 31, 2021 and December 31, 2020.

Other

Other includes the operations of NuScale. NuScale expenses included in the determination of segment loss were reported net of qualified reimbursable expenses of $15 million and $13 million during the 2021 Quarter and 2020 Quarter, respectively. During the 2021 Quarter, JGC Holdings Corporation invested $40 million in NuScale. We and our advisors continue to engage with potential investors and capital providers to fund NuScale's path to commercialization.

Table of Contents

Corporate and Other Matters

	Three Months Ended<br>March 31,
(in millions)	2021		2020
Corporate G&A
Compensation	$	57.6	$	18.8
SEC investigation / Internal review costs	2.7		2.0
Other	5.3		12.8
Corporate G&A	$	65.6	$	33.6

The increase in compensation expense in the 2021 Quarter was primarily due to higher stock price driven compensation on liability awards, as our stock price increased from the date of grant to the closing price on March 31, 2021. Lower levels of compensation expense were recognized during the 2020 Quarter primarily due to the deferral of long-term incentive award issuances until the latter half of 2020, as compared to the 2021 Quarter.

The increase in net interest expense during the 2021 Quarter was primarily attributable to costs incurred to refinance our credit facility as well as a decrease in interest income driven by lower interest rates in the 2021 Quarter compared to the 2020 Quarter.

We announced in January 2021 that we had begun an undertaking to substantially reduce our overhead costs. Although we have not satisfied the requirements to recognize charges for any restructurings for the 2021 undertaking, we are likely to recognize expense later in 2021.

Critical Accounting Estimates

Fair Value Measurements. During the 2021 Quarter, we performed interim impairment testing of our goodwill associated with Stork and recognized impairment expense of $13 million, which was included in Disc Ops. All other factors being equal, a one hundred basis point change in the discount rate used in the valuation of goodwill would change the fair value by $25 million.

Recent Accounting Pronouncements

Item is described more fully in the Notes to Financial Statements.

Litigation and Matters in Dispute Resolution

Item is described more fully in the Notes to Financial Statements.

LIQUIDITY AND FINANCIAL CONDITION

Our liquidity is provided by available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facilities and, when necessary, access to the capital markets. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements, but we do have our credit facility and our 2023 Notes maturing in the next 24 months. We regularly review our sources and uses of liquidity and may pursue opportunities to increase our liquidity position to address upcoming maturities.

As of March 31, 2021, letters of credit totaling $414 million were outstanding under our $1.65 billion credit facility, which matures in February 2023. The credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.65 to 1.0, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold, defined in the amended credit facility, of $1.5 billion which may be reduced to $1.25 billion upon the repayment of debt. The credit facility also contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, such collateral consisting broadly of our U.S. assets. Borrowings under the facility, which may be denominated in USD, EUR, GBP or CAD, bear interest at a base rate, plus an applicable borrowing margin. As of March 31, 2021, our financial covenants limited our further borrowings to approximately $869 million, although no amounts were drawn.

Cash and cash equivalents combined with marketable securities were $2.0 billion as of March 31, 2021 and $2.2 billion as of December 31, 2020. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $987 million and $984 million as of March 31, 2021 and December 31, 2020, respectively. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are

Table of Contents

either swept into overnight, offshore accounts or invested in offshore, short-term time deposits, to which there is unrestricted access.

In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships). These amounts (which totaled $608 million and $655 million as of March 31, 2021 and December 31, 2020, respectively) were not necessarily readily available for general purposes. We also consider the extent to which client advances (which totaled $101 million and $80 million as of March 31, 2021 and December 31, 2020, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of March 31, 2021 and December 31, 2020, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

	Three Months Ended<br>March 31,
(in thousands)	2021		2020
OPERATING CASH FLOW	$	(230,553)	$	(63,743)
INVESTING CASH FLOW
Proceeds from sales and maturities (purchases) of marketable securities	4,731		806
Capital expenditures	(30,141)		(30,094)
Proceeds from sales of property, plant and equipment	8,301		13,465
Investments in partnerships and joint ventures	(47,829)		(5,971)
Other	433		56
Investing cash flow	(64,505)		(21,738)
FINANCING CASH FLOW
Dividends paid	—		(14,700)
Other borrowings	3,264		22,203
Distributions paid to NCI	(8,418)		(2,751)
Capital contributions by NCI	42,101		19,968
Other	(8,557)		(2,092)
Financing cash flow	28,390		22,628
Effect of exchange rate changes on cash	5,687		(63,472)
Increase (decrease) in cash and cash equivalents	(260,981)		(126,325)
Cash and cash equivalents at beginning of period	2,198,781		1,997,199
Cash and cash equivalents at end of period	$	1,937,800	$	1,870,874
Cash paid during the quarter for:
Interest	$	29,784	$	26,624
Income taxes (net of refunds)	31,794		7,486

Table of Contents

Operating Activities

Cash flows from operating activities result primarily from our EPC activities and are affected by changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and the billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project and the payments terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances.

Our operating cash flow for the 2021 Quarter was negatively impacted by increased funding of COVID-19 costs on our projects, higher cash payments of Corporate G&A (including the timing and extent of employee bonuses) and increased tax payments.

We contributed $10 million and $7 million into our DB plans during the 2021 Quarter and 2020 Quarter, respectively. We expect to contribute up to $16 million to our DB plans during 2021, which is expected to be in excess of the minimum funding required. The remaining obligations under our Dutch DB plan may be settled in late 2021, subject to regulatory approval. If the plan is settled, we expect that any deferred pension costs in AOCI would be reclassified to earnings upon settlement.

NuScale expenses were $16 million and $23 million for the 2021 Quarter and 2020 Quarter, respectively, and were reported net of qualified reimbursable expenses of $15 million and $13 million during the 2021 Quarter and 2020 Quarter, respectively. Capital contributions by NuScale's NCI holders, which reduced the need for additional funding from Fluor in the 2021 Quarter, are discussed below.

Investing Activities

We hold cash in bank deposits and marketable securities which are governed by our investment policy. This policy focuses on, in order of priority, the preservation of capital, maintenance of liquidity and maximization of yield. These investments may include money market funds, bank deposits placed with highly-rated financial institutions, repurchase agreements that are fully collateralized by U.S. Government-related securities, high-grade commercial paper and high quality short-term and medium-term fixed income securities.

Capital expenditures are primarily related to construction equipment associated with equipment operations now included in Disc Ops, as well as expenditures for facilities and investments in information technology. Proceeds from the disposal of property, plant and equipment are primarily related to the disposal of construction equipment associated with the equipment business in Disc Ops.

Investments in unconsolidated partnerships and joint ventures in the 2021 quarter included a $26 million capital contribution to COOEC Fluor, which satisfied our contractual funding requirements, as well as capital contributions to a recently formed Mission Solutions joint venture. There were no significant investments in unconsolidated partnerships and joint ventures in the 2021 quarter.

Financing Activities

We have a common stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. As of March 31, 2021, over 10 million shares could still be purchased under the existing stock repurchase program, although we don't have any immediate intent to begin such repurchases.

Quarterly cash dividends of $0.10 per share were declared in the fourth quarter of 2019 and paid in the first quarter of 2020. We suspended our dividend during April 2020. The payment and level of future cash dividends is subject to the discretion of our Board of Directors.

Other borrowings represent short-term bank loans and other financing arrangements associated with Stork.

Table of Contents

Distributions paid to holders of NCI represent cash outflows to partners of consolidated partnerships or joint ventures created primarily for the execution of single contracts or projects. Distributions in the 2021 Quarter primarily related to a transportation joint venture project in the United States. Distributions in the 2020 Quarter were not significant.

Capital contributions by NCI during the 2021 Quarter primarily related to JGC Holdings Corporation's $40 million investment in NuScale. We and our advisors continue to engage with potential investors and capital providers to fund NuScale's path to commercialization. Capital contributions by NCI during the 2020 Quarter primarily related to 3 transportation joint venture projects.

Effect of Exchange Rate Changes on Cash

During the 2021 Quarter, most major foreign currencies strengthened against the U.S. dollar resulting in unrealized translation gains of $3 million, of which $6 million related to cash held by foreign subsidiaries. During the 2020 Quarter, most major foreign currencies weakened against the U.S. dollar resulting in unrealized translation losses of $111 million, of which $63 million related to cash held by foreign subsidiaries. The cash held in foreign currencies will primarily be used for project-related expenditures in those currencies, and therefore our exposure to exchange gains and losses is generally mitigated.

Off-Balance Sheet Arrangements

Letters of Credit

As of March 31, 2021, letters of credit totaling $414 million were outstanding under committed lines of credit, and letters of credit totaling $927 million were outstanding under uncommitted lines of credit. Letters of credit are provided in the ordinary course of business primarily to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Guarantees

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $16 billion as of March 31, 2021

Financial guarantees, made in the ordinary course of business in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate us to make payment in the event of a default by the borrower. These arrangements generally require the borrower to pledge collateral to support the fulfillment of the borrower’s obligation.

Sustainability

Our sustainability mission envisions meeting the needs of our clients while conducting business in a socially, economically and environmentally responsible manner to the benefit of current and future generations, thereby creating value for all stakeholders. We help clients safeguard the environment, conserve energy, protect lives and strengthen economies and social structures of communities.

As a key priority for our sustainability program, we have committed to reduce our greenhouse gas emissions. Early in 2021, we committed to achieving net zero emissions for Scopes 1 and 2 absolute greenhouse gas emissions by the end of 2023.

We have a Sustainability Committee to oversee our sustainability policies, strategies and programs. The Sustainability Committee includes representatives from each of our business segments, as well as a cross-functional team of subject matter experts from communications, health, safety and environmental, investor relations and legal, who serve as advisors to the Sustainability Committee. In furtherance of our Board of Directors' commitment to sustainability, our Governance Committee reviews and receives reports from management on our sustainability efforts.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to market risk during the 2021 Quarter. Accordingly, the disclosures provided in the 2020 10-K remain relevant.

Table of Contents

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on their evaluation as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) are effective as required by paragraph (b) of Rule 13a-15 or Rule 15d-15 of the Exchange Act.

Changes in Internal Control over Financial Reporting

There were no changes to our ICFR that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our ICFR.

Table of Contents

FLUOR CORPORATION

CHANGES IN CONSOLIDATED BACKLOG

UNAUDITED

	Three Months Ended<br>March 31,
(in millions)	2021		2020
Backlog, January 1	$	23,144.1	$	29,392.3
New awards	3,662.4		3,834.1
Adjustments and cancellations, net (1)	(105.5)		(523.2)
Work performed	(2,909.3)		(3,661.4)
Backlog, March 31	$	23,791.7	$	29,041.8

(1) During the 2021 Quarter, we removed approximately $1 billion from backlog due to the cancellation of a chemicals project in North America.

Table of Contents

PART II:  OTHER INFORMATION

Item 1. Legal Proceedings

As part of our normal business activities, we are party to a number of legal proceedings and other matters in various stages of development. Management periodically assesses our liabilities and contingencies in connection with these matters based upon the latest information available. We disclose material pending legal proceedings pursuant to SEC rules and other pending matters as we may determine to be appropriate.

Additional information on matters in dispute may be found in Item 8 of the 2020 10-K and Item 1 of this Q1 2021 10-Q.

Item 1A. Risk Factors

There have been no material changes from our risk factors as disclosed in the 2020 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c)    The following table provides information for the quarter ended March 31, 2021 about purchases by the company of equity securities that have been registered pursuant to Section 12 of the Exchange Act.

Issuer Purchases of Equity Securities

Period	Total Number<br>of Shares<br>Purchased	Average<br>Price Paid<br>per Share		Total Number<br>of Shares<br>Purchased as<br>Part of Publicly<br>Announced Plans<br>or Programs	Maximum<br><br>Number of<br><br>Shares that May<br><br>Yet Be Purchased<br><br>Under the Plans or<br><br>Program (1)
January 1 — January 31, 2021	—	$	—	—	10,513,093
February 1 — February 28, 2021	—	—		—	10,513,093
March 1 — March 31, 2021	—	—		—	10,513,093
Total	—	$	—	—

_________________________________________________________

(1)    The share repurchase program, as amended, totals 34,000,000 shares. We may repurchase shares from time to time in open market or privately negotiated transactions, including through pre-arranged trading programs, at our discretion, subject to market conditions and other factors and at such time and in amounts that we deem appropriate.

Item 4. Mine Safety Disclosures

None.

Table of Contents

Item 6.     Exhibits

EXHIBIT INDEX

Exhibit	Description
3.1	Amended and Restated Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K (Commission file number 1-16129) filed on May 8, 2012).
3.2	Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.2 to the registrant's Current Report on Form 8-K (Commission file number 1-16129) filed on February 9, 2016).
10.1	$1,650,000 Second Amended and Restated Revolving Loan and Letter of Credit Facility Agreement dated as of February 19, 2021, among the registrant, the Lenders thereunder, BNP Paribas, as Administrative Agent and an Issuing Lender, Bank of America, N.A., as Syndication Agent, and Citibank, N.A. and Wells Fargo Bank, National Association, as Co-Documentation Agents (incorporated by reference to Exhibit 10.48 to the registrant's Annual Report on Form 10-K (Commission file number 1-16129) filed on February 26, 2021).
10.2	Term Sheet, effective January 16, 2021, between the registrant and Taco de Haan.*
10.3	Consulting Agreement, effective March 22, 2021, between the registrant and D. Michael Steuert.*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(b) of the Exchange Act.*
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350.*
32.2	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350.*
32.3	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350.*
101.INS	Inline XBRL Instance Document.*
101.SCH	Inline XBRL Taxonomy Extension Schema Document.*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.*
104	The cover page from the Company's Q1 2021 10-Q for the three months ended March 31, 2021, formatted in Inline XBRL (included in the Exhibit 101 attachments).*

_______________________________________________________________________

*    New exhibit filed with this report.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			FLUOR CORPORATION
Date:	May 7, 2021	By:	/s/ Joseph L. Brennan
			Joseph L. Brennan
			Chief Financial Officer

39

Document

Exhibit 10.2

Term Sheet for Taco de Haan

The parties shall work together in good faith to promptly complete and execute: (i) a full employment agreement which shall supercede any and all other employment agreements; and (ii) other necessary ancillary documents/agreements. Such documents are intended to be consistent with the Term Sheet and intended to include other customary terms that are consistent with applicable policies and practices.

Parties	Taco de Haan (“Executive”)<br><br><br><br>Fluor BV ("Company”)<br><br>Taurus avenue 155 in (2132 LS) Hoofddorp, Netherlands
Effective Date	January 11, 2021
Employment Period	Indefinite employment (no change). Existing years of service based on initial hire start date of employment (1 Nov. 1995) will be retained.<br><br><br><br>Executive’s transfer to Stork will be addressed via a separate tripartite “Employment Transfer Agreement” at a later date as mutually agreed.
Position/Title	Will have a change in title to “EVP, Office of the CEO”; Executive will no longer be a Section 16b Officer when Stork moves to discontinued operations.
Labor Grade Level	No change (remain LG 35)
Duties/Reporting relationships	Duties: No change<br><br><br><br>Reporting relationships: No change
Annual base salary	Remains the same and is subject to annual review by Fluor Corp.’s Board of Directors.<br><br><br><br>The Company will continue to apply a quarterly exchange rate correction at its expense from US$ salary to Euro based on Aug. 4, 2017 exchange rate while Executive is employed by the Company.<br><br><br><br>Executive’s compensation and other terms of employment upon transfer to Stork to be addressed in a Stork Employment & Employee Transfer Agreement (not the Fluor employment agreement).
Annual bonus	No change. The bonus shall in no event be included in the calculation of any (employment) benefits, any other calculations or severance payment.
Long Term Incentives (“LTI”)	No change of target from 2020 level. Notwithstanding the foregoing, any such LTI awards to be addressed via separate documents (not employment agreement) as per current practice. The LTI, regardless of when it is issued, shall in no event be included in the calculation of any (employment) benefits, any other calculations or severance payment.
Employee benefits and Fringe benefits	No change
---	---
Expenses	No change
Retention Bonus	Treatment of outstanding retention agreement in the form of special Restricted Stock Units award will be addressed in a separate document (outside the Employment Agreement) to permit for full vesting following a successful Stork Change in Control (“SCIC”) that takes place before the set retention date (11 Nov. 2022). This retention bonus shall in no event be included in the calculation of any (employment) benefits, any other calculations or severance payment.
Transaction Bonus	Executive will be eligible for a transaction bonus based on 50% of gross base annual salary (including holiday pay), subject to applicable withholdings, if there is a Stork divestiture within a specific time-frame that will be set forth in a separate Transaction Bonus Agreement. The “trigger” for the SCIC benefits will be the sale of 100% of Stork’s shares or assets. Notwithstanding the foregoing, Executive will have an opportunity to earn a pro- rated Transaction Bonus if less than 100% but more than 75% of Stork’s stock or assets are successfully divested. The Transaction Bonus and corresponding conditions for payment of any such transaction bonus will be set forth in detail in a separate Transaction Bonus Agreement (not in the employment agreement). This Transaction Bonus shall in no event be included in the calculation of any (employment) benefits, any other calculations or severance payment.
Treatment of LTI awards after SCIC	Notwithstanding the retirement age requirements, treatment of outstanding LTI following a successful SCIC will be addressed in a separate LTI document at the time of sale to permit for continued vesting in accordance with normal Fluor policy.<br><br><br><br>Any new LTI awards granted in 2021 (and subsequently) will permit continued vesting, in accordance with normal Fluor policy, following a successful SCIC. This will be addressed in a separate LTI document.
Indemnification	Indemnification Agreement with Fluor Corp. dated June 5, 2017 agreement remains in place.
Directors’ & Officers’ Insurance	No change
Termination Notice under Fluor employment	The employment contract may be terminated by Executive in compliance with the current statutory notice period and the Company may terminate the employment contract subject to 12 months’ notice; notice to be issued in writing. The employment contract will automatically end in any event without notice being required on the day on which the Executive reaches state pension age. Executive’s transfer to Stork shall not trigger the termination notice requirements for either party.
Termination Notice under Stork employment	The employment contract may be terminated by Executive in compliance with the current statutory notice period. If Executive is terminated by Stork, Stork will provide Executive with a notice period of 12 months. This will be addressed in a separate Stork employment agreement. The employment contract will automatically end in any event without notice being required on the day on which the Executive reaches state pension age. The successful completion of a SCIC (without a corresponding termination of Executive’s employment) shall not trigger any right to termination notice.
---	---
Severance	Executive shall receive one (1) year gross base salary (including holiday pay) as a severance payment, subject to applicable withholdings, upon Executive’s involuntary termination of employment by the company (except if Executive is terminated upon reaching state pension age). This severance payment is intended to include all severance that becomes due under Dutch law and company policy. Executive will therefore not be entitled to additional severance under Dutch law or company policy. The calculation of the severance payment shall not include any annual bonus, retention bonus, transaction bonus, or any LTI. Executive’s transfer to Stork shall not trigger the right to severance pay. The successful completion of a SCIC (without a corresponding written notice of termination of Executive’s employment) shall not trigger any right to severance.
Termination for “cause”	Executive shall not receive any severance benefits or retention/transaction bonus if Executive is terminated for cause, within the meaning of article 7:677, 7:678, or if Executive is terminated for culpable behavior within the meaning of article 7:669 of the Dutch Civil Code, or for violating the employment agreement, or for conduct that is a violation of the policies of the Company or the Code of Business Conduct and Ethics. Executive shall be entitled only to a cash payment equal to the sum of (a) Executive's unpaid base salary through the date of termination and (b) accrued and unused vacation pay.<br><br><br><br>Outstanding LTI will be governed by the underlying awards and agreements.
Restrictive Covenants	Executive will comply with applicable restrictive covenants while Executive remains employed by a Fluor subsidiary.
Return of Company Property	Executive shall be required to return all property belonging to the Company or its affiliates (including, but not limited to, any Company- provided laptops, computers, cell phones, and similar address books, wireless electronic mail devices or other equipment, or documents and property belonging to the Company or any of its affiliates) upon termination of employment.
Regulatory Investigation; Cooperation	Executive must agree to cooperate with the Company in connection with any claims, complaints, charges, actions, lawsuits or similar proceedings which may be brought against the Company or its affiliates. The Company will expect cooperation both during and after the employment relationship ends.
Non-Disclosure / Confidentiality	Executive must agree not to directly or indirectly, transmit or disclose to any person or entity any Confidential Information (as defined by the Company in the employment agreement) or use any Confidential Information for Executive’s own benefit or the benefit of any other company. Confidentiality and non-disclosure covenants will be subject to standard exceptions (e.g., disclosure required by law, to tax/legal advisors and immediate family and permitted whistleblower matters).
---	---
Definitive Documentation	The parties shall work together in good faith to promptly complete and execute: (i) a full employment agreement which shall supercede any and all other employment agreements; and (ii) other necessary ancillary documents/agreements. Such documents are intended to be consistent with the Term Sheet and intended to include other customary terms that are consistent with applicable policies and practices.

4

Document

Exhibit 10.3

[Letterhead of FDEE Consulting, Inc.]

March 22, 2021

D Michael Steuert

2032 Bantry Drive

Roanoke, TX 76262

Dear Mike:

This letter will confirm the Agreement between Mike Steuert, (the “Consultant”), and FDEE Consulting, Inc., (the "Company").

I.     Scope of Services: The Consultant agrees to render advisory and consultation services to the Company as and when the Company may from time to time request. Each assignment will be made in writing with a description of the assignment and schedule for completion. Normal consulting services to be provided under this Agreement include Consultant providing assistance and advice to Fluor Corporation’s finance team. Consultant may also from time to time be requested to engage in special consulting services consisting of (a) providing assistance to the Company with respect to responding to inquiries related to Fluor’s financial reporting during Fluor Corporation’s fiscal years 2016 through the 2nd quarter of 2020 as well as (b) providing advice, and reasonable cooperation with requests for assistance related to any litigation or disputes involving the Company, its subsidiaries, parents, related entities, or joint ventures, as may be requested by the Company or its legal counsel, regarding any matter, dispute or controversy of which Consultant has or may have reason to have knowledge, information, or expertise. Special consulting services, if requested, shall also include Consultant’s reasonable cooperation in connection with such claims or actions including being available to meet with counsel to prepare for discovery, a hearing, or trial and to act as a witness. If Consultant is called as a witness by the Company, the SEC, DOJ or any other regulatory agency, or any party in private litigation to give testimony (oral or written) in any matter, Consultant and the Company understand that Consultant is to answer proper questions truthfully. The Company acknowledges Consultant’s right to representation by separate counsel in connection with any such testimony, at Company expense, should he so choose. The payment for services referenced below is not, and shall not, be contingent upon the content of the Consultant’s testimony in the course of an investigation, hearing, or litigation nor shall it be contingent on the outcome of any such investigation, hearing, or litigation. The Company authorizes the Chief Legal Officer of Fluor Corporation, or his designee, to approve written assignments to the Consultant hereunder.

In performing services under this Agreement, the Consultant shall operate as and have the status of an independent contractor and shall not act as or be an agent or employee of the Company. For this reason, all of the Consultant's activities will be at his own risk, and the Consultant shall not be entitled to, and hereby waives and disclaims any right to, benefits which Company may provide to employees of Company, including but not limited to Workers' Compensation or similar benefits or other insurance protection provided by the Company. The Consultant will make his own arrangements for medical insurance and insurance coverage for the activities to be performed hereunder. This paragraph is not intended to, and does not, waive any rights to indemnity or defense arising out of Consultant’s prior position as an officer of the Company.

As an independent contractor, the Consultant will be solely responsible for determining the means, methods, time and place of performing the services subject to the Company's overall schedule requirements and maintaining

March 22, 2021

Page 2 of 5

interfaces necessary for the services and the Company will receive only the results of the Consultant's performance of the foregoing services.

II.    Term: The term of this Agreement shall begin March 22, 2021, and shall expire on December 31, 2023 unless otherwise modified by subsequent written agreement signed by Consultant and an authorized representative of the Company.

III.    Payment for Services: The Company shall compensate the Consultant for the actual hours worked by the Consultant for services specifically approved by the Company during the term of this agreement as follows:

(i)Initial Retainer: Company shall cause its parent, Fluor Corporation to issue Consultant an initial retainer as follows: Shares of Fluor Corporation common stock in an amount equal to $500,000.00 (“Target Amount”) as determined by taking the closing share price for such shares on the date that is five (5) business days following the date of this Agreement, and dividing the Target Amount by such closing share price (the “Share Grant”). As a condition to the Share Grant, if requested, Consultant shall execute Fluor Corporation’s form of share grant agreement. Such shares shall be delivered by Fluor Corporation to Consultant within thirty (30) days following the date of this Agreement.

(ii)Fee for Normal Consulting Services: In addition, Consultant will be paid $880,000 for normal consulting services which shall be paid out in quarterly payments of $110,000 each, gross, with the first payment commencing om the first normal Fluor payroll in January 2022 (estimated to be on or about January 7, 2022) with the remaining payments paid every 90 days thereafter until fully paid.

(iii)Fee for Special Consulting Services: In the event Company requests Consultant to perform special consulting services as described above, in addition to the fee referenced in the previous paragraph, Consultant will be paid an hourly fee of Five Hundred Dollars ($500.00) per hour for such special consulting services;

(iv)The Consultant agrees services will not be provided in excess of 420 hours for the term of this agreement;

(v)The Consultant agrees services will not be provided in excess of 125 hours per month for the term of this agreement;

(vi)Under no circumstances shall Consultant work more than 40 hours in a week.

(vii)The Consultant will be reimbursed for any reasonable business expenses incurred while providing services to the Company during the term of this Agreement.

(viii)Applicable taxes including FICA (Social Security and Medicare) taxes will be withheld on all payments made to Consultant. A Form W-2 for the Consultant’s 2021 and any subsequent year's consulting compensation will be provided.

IV.    Invoicing: Within 30 days following the end of each quarter, the Consultant will furnish the Company with an invoice detailing the time devoted to the Company's service during such quarter and a description of activities

March 22, 2021

Page 3 of 5

performed on behalf of the Company. The individual responsible for approving the Consultant’s assignments must approve all invoices submitted by Consultant before Company pays the invoice. The Company shall pay such invoice within thirty (30) days of receipt and approval. The Company reserves the right to reject invoices more than 60 days past due.

V.    Inventions, Patents and Confidential Information: Consultant shall promptly disclose to the Company all discoveries, developments, improvements, inventions and other intangible rights ("Inventions") arising from performance of Consultant's services hereunder and hereby assigns said Inventions to the Company and shall execute all documents required to complete exclusive ownership by the Company or to secure patents, if deemed appropriate in the sole discretion of the Company.

VI. Confidential Information. The Consultant agrees that any information which he obtains while performing services in his consulting capacity concerning the business or operations of the Company, its affiliates or third parties with whom it conducts business (including, but not as a limitation, technical information) shall be used only to perform such services and, with the exception of disclosures to Consultant’s legal counsel for purposes of obtaining advice from that counsel, shall not be disclosed to anyone outside the Company, except with the prior written authorization of the Company. Further, to the extent any such information is in written form, all such documents are considered company property and must be returned to the Company upon termination of this Agreement. The obligations of this paragraph shall survive any termination of this Agreement and do not apply to any information which has been publicly released or is in the public knowledge or literature.

However, nothing in this agreement prohibits or restricts Consultant from either filing charges/complaints with any governmental agency or participating in an investigation or a proceeding before any governmental agency responsible for the enforcement of any local, state or federal law. In addition, nothing in this agreement prohibits Consultant from: (i) reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity, including but not limited to, the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Congress, Occupational Health and Safety Administration, or any agency Inspector General; (ii) making any other disclosures that are protected under the whistleblower provisions of federal law or regulations; or (iii) otherwise fully participating in any whistleblower programs, including the right to receive an incentive award authorized under federal statute or regulation for information provided to the Securities & Exchange Commission or any other federal regulatory or law enforcement agency.

VII.    Supplier Expectations: The Consultant has read and understands Fluor’s Business Conduct and Ethics Expectations for Suppliers and Contractors (the Supplier Expectations) and Consultant will do nothing to violate the Supplier Expectations.

VIII.    Anti-Corruption: The Consultant will not make and has not made directly or indirectly, any payments or given anything of value to any third party, including any foreign official, foreign political party or foreign party candidate in connection with the Company's activities or in obtaining or retaining business from any government agency or instrumentality. The Consultant shall promptly notify the Company if in the course of any business for which Consultant provides or may have provided consulting services to the Company, Consultant is approached, asked or requested or offers to make any payments or giving anything of value to any third party. Additionally, Consultant agrees that during the entire term of this Agreement Consultant will not act as an agent, official, or employee of any foreign government, or foreign political party, or a candidate for foreign office, and that the fees and expenses that will be paid to Consultant under this Agreement will not be paid directly or indirectly to any such agent, official, employee, party or candidate on behalf of Company.

March 22, 2021

Page 4 of 5

IX.    Corporate Assets: Consultant is expected to respect the Company's assets as he would his own. Corporate assets take many forms (land, building, equipment, etc.). Consultant is required to return any assets or related documents to Company.

X.    Compliance with Law: The Consultant agrees to fully comply with the United States Foreign Corrupt Practices Act (Public Law 95-213, 95th Congress, December 19, 1977) and all other applicable State and United States Laws. The Consultant acknowledges that Fluor Corporation and its subsidiaries require their vendors and suppliers to fully comply with the laws of the United States.

XI.    NonCompetition: During the term of this Agreement, Consultant may be engaged in a broad range of transactions and other matters involving interests that may differ from those of Company or its affiliates. In that regard, Consultant agrees that it will not in any manner, directly or indirectly, provide services, advice or other assistance to any firm or business, which is similar to or competitive with the business of the Company and its affiliates without Company’s prior written approval..

XII.    Entire Agreement: This Agreement consists of this letter and corresponding attachments Exhibits A & B referenced above. This Agreement, as defined in this paragraph, sets forth the full and complete understanding of the parties as of the date above stated, and supersedes any and all agreements and representations made or dated prior hereto with respect to the consulting services to be provided by Consultant. This Agreement can only be amended in writing and signed by the duly authorized representatives of the parties.

XIII.    Governing Law: This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas.

Kindly indicate your agreement with the foregoing by executing the duplicate originals of this letter in the space below and returning a fully signed duplicate original to us.

	FDEE CONSULTING, INC.
By:	/s/ Stacy Dillow
	Stacy Dillow
	President

Accepted and Agreed:

/s/ D. Michael Steuert	March 22, 2021
Mike Steuert	Date

Document

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, David E. Constable, certify that:

1.    I have reviewed this Amendment No. 1 on Form 10-Q/A of Fluor Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 7, 2021	By:	/s/ David E. Constable
		David E. Constable
		Chief Executive Officer

Document

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Joseph L. Brennan, certify that:

1. I have reviewed this Amendment No. 1 on Form 10-Q/A of Fluor Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 7, 2021	By:	/s/ Joseph L. Brennan
		Joseph L. Brennan
		Executive Vice President and Chief Financial Officer

Document

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)

OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Fluor Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David E. Constable, Chief Executive Officer of the Company, certify, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

•    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

•    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 7, 2021	By:	/s/ David E. Constable
		David E. Constable
		Chief Executive Officer

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Document

Exhibit 32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)

OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the Amendment No. 1 to the Quarterly Report of Fluor Corporation (the “Company”) on Form 10-Q/A for the period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David E. Constable, Chief Executive Officer of the Company, certify, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

•    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

•    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 7, 2021	By:	/s/ David E. Constable
		David E. Constable
		Chief Executive Officer

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Document

Exhibit 32.3

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)

OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the Amendment No. 1 to the Quarterly Report of Fluor Corporation (the “Company”) on Form 10-Q/A for the period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph L. Brennan, Chief Financial Officer of the Company, certify, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

•    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

•    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 7, 2021	By:	/s/ Joseph L. Brennan
		Joseph L. Brennan
		Executive Vice President and Chief Financial Officer

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.