Fluor Corporation

02/17/2026 | Press release | Distributed by Public on 02/17/2026 06:08

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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. A discussion and analysis of the operating results of 2024 compared to 2023 are included in our 2024 10-K and have not been repeated in this 10-K.
We continue to see solid client engagement across our markets and a robust and diverse pipeline of opportunities, particularly where accelerated schedules and critical business needs are driving investment. While some clients are pacing commitments due to cost pressures or commodity price softness, our teams are actively advancing engineering and design work so projects can move quickly once final decisions are made. These timing shifts impacted 2025 results, but we remain focused on disciplined execution, cost management, and positioning our clients for long-term success.
Developments in Our Business
Revenue, profit and operating cash flow in 2025 was significantly impacted by a judgment on the long completed Santos project in Australia. We have appealed the Court decision and we are also working with our insurance carriers to address the obligations arising from the judgment and the costs related to the appeal. We recognized a reversal of revenue of $643 million during 2025, inclusive of committed insurance proceeds, representing the net payment to Santos made in the fourth quarter of 2025.
We slowed our execution activities at our joint venture in Mexico beginning in the second quarter of 2025 through much of the third quarter to minimize our working capital exposure to the joint venture's primary customer. The customer made significant progress payments through December 2025, which allowed us to execute a controlled restart of our project execution activities.
Prior to November 2025, we converted 15 million of our 126 million NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares and sold all 15 million of those shares for net proceeds of $605 million. We converted the remaining 111 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares upon reaching agreement with NuScale in November 2025, including the following general attributes:
•Conversion of the 111 million remaining ownership units into NuScale registered shares on a one-to-one basis;
•For open market sales, daily limitations on our NuScale sales that vary depending on defined blackout dates for NuScale;
•Voting covenant whereby we will agree to affirmatively support the expansion of NuScale's authorized share count by up to 330 million shares;
•Imposition of NuScale trading limitations on any newly authorized shares through February 2026;
•50% reduction in our benefits, if any, that may arise under the tax receivable agreement with NuScale;
•Modification of our exclusivity arrangement with NuScale; and
•Various mutual releases and non-disparagement provisions.
In November 2025, through an indirect, wholly-owned subsidiary, we entered into a variable price forward sale agreement whereby we pledged and granted a security interest in 71 million of our remaining shares in NuScale, while maintaining continuing involvement and ownership rights, and committed to sell, convey, transfer, assign and deliver those shares at the final settlement date in the first quarter of 2026. Through our bank's execution, we completed the sale of all 71 million shares of NuScale on February 13, 2026, generating total proceeds of $1.35 billion. We expect to monetize the remaining 40 million shares of NuScale via similar structured programs and expect that all remaining ownership in NuScale should be sold by the second quarter of 2026.
Our divestiture of the Stork business was substantially completed following the sale of Stork's U.K. operations in 2025. Stork's operations in continental Europe were sold in 2024.
In December 2025, we reached an agreement to sell our ownership in the fabrication yard in China for approximately $122 million. The sale is expected to close in 2026, subject to the conditions in the agreement.
Results of Operations
YEAR ENDED DECEMBER 31,
(in millions) 2025 2024 2023
Revenue(1)
Urban Solutions $ 9,200 $ 7,239 $ 5,262
Energy Solutions 3,554 5,976 6,307
Mission Solutions 2,720 2,594 2,655
Other 29 506 1,250
Total revenue $ 15,503 $ 16,315 $ 15,474
Segment profit (loss) $ and margin %
Urban Solutions $ 205 2.2 % $ 304 4.2 % $ 268 5.1 %
Energy Solutions (414) NM 256 4.3 % 381 6.0 %
Mission Solutions 94 3.5 % 153 5.9 % 116 4.4 %
Other 6 NM (78) NM (228) NM
Total segment profit (loss) $ and margin %(2)
$ (109) (0.7) % $ 635 3.9 % $ 537 3.5 %
G&A (196) (203) (232)
Foreign currency gain (loss) (62) 92 (98)
Interest income (expense), net 67 150 168
Earnings (loss) attributable to NCI
(11) (61) (60)
Earnings (loss) before taxes
(311) 613 315
Income tax benefit (expense) (including $92 million and $(376) million attributable to equity method earnings in 2025 and 2024, respectively)
39 (634) (236)
Net earnings (loss) before equity method earnings
(272) (21) 79
Equity method earnings
210 2,105 -
Net earnings (loss)
(62) 2,084 79
Less: Net earnings (loss) attributable to NCI
(11) (61) (60)
Net earnings (loss) attributable to Fluor
(51) 2,145 139
Less: Dividends on CPS - - 29
Less: Make-whole payment on conversion of CPS - - 27
Net earnings (loss) available to Fluor common stockholders
$ (51) $ 2,145 $ 83
New awards
Urban Solutions $ 8,688 $ 9,493 $ 10,141
Energy Solutions 1,421 3,246 6,871
Mission Solutions 1,847 1,910 1,055
Other - 474 1,461
Total new awards $ 11,956 $ 15,123 $ 19,528
New awards related to projects located outside of the U.S. 26 % 38 % 76 %
(in millions) December 31, 2025 December 31, 2024
Backlog(3)(4)
Urban Solutions $ 18,746 $ 17,749
Energy Solutions 4,601 7,605
Mission Solutions 2,189 2,727
Other - 403
Total backlog $ 25,536 $ 28,484
Backlog related to projects located outside of the U.S. 40 % 55 %
Backlog related to reimbursable projects
81 % 79 %
(1)In addition to the measurements under GAAP, we measure our performance by analyzing trends in adjusted net revenue (and related margin), which we determine by reducing GAAP revenue to exclude at-cost revenue associated with reimbursable contracts for the following elements, where applicable:
•amounts associated with unaffiliated subcontractor project costs that are billed to clients without meaningful markup;
•amounts associated with costs of material that are billed to clients without meaningful markup; and
•costs of CFM that are procured by our clients and which do not give rise to meaningful markup to our billings to clients.
Such at-cost revenue is generally reflected in our project estimates at equivalent amounts within the revenue and cost elements. Therefore, we believe our adjusted net revenue represents the basis for which we earn fees for our professional services. Others in our industry may have similar terms that they use to similarly measure the earnings power of their services. Even though our involvement with at-cost revenue elements as a principal gives rise to their inclusion in our consolidated revenue, the absence of meaningful markup to them elevates the importance of this non-GAAP analysis. During 2025 and 2024, at-cost revenue was approximately $8 billion and $7 billion, respectively (or approximately 53% and 40% of consolidated revenue). Excluding the amounts of at-cost revenue from both GAAP revenue and from project cost yields an amount that we call adjusted net margin.
(2)Total segment profit and margin are non-GAAP financial measures. We believe that total segment profit provides a meaningful perspective on our results as it is the aggregation of individual segment profit measures that we use to evaluate and manage our performance.
(3)During 2025, our backlog decreased due to the execution pace exceeding new award activity. We booked a multi-billion dollar award for a life sciences project during 2025. We booked significant positive project adjustments related to scope increases on several large projects during the second quarter of 2025 and scope reductions on 2 large projects in the first quarter of 2025.
Backlog represents the total amount of revenue we expect to record in the future based upon contracts that have been awarded to us. Backlog is stated in terms of gross revenues and may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs as well as other forms of variable consideration. For projects related to proportionately consolidated joint ventures, we include only our percentage ownership of each joint venture's backlog. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. We recognize new awards into backlog when we and our client have approved the contract (written or verbal) and are committed to perform our respective obligations. 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 in this 10-K. Backlog includes the amount of revenue we expect to recognize under ongoing operations and maintenance contracts for the remainder of the current year renewal period plus up to 3 additional years if renewal is considered to be probable, while RUPO includes only the amount of revenue we expect to recognize under contracts with definite terms and substantive termination provisions. In 2026, we expect to execute approximately half of our ending 2025 backlog.
(4)Includes backlog of $255 million and $702 million for legacy projects in a loss position as of December 31, 2025 and 2024, respectively.
Revenue decreased in 2025 primarily due to the reversal of previously recognized revenue of $643 million for a judgment on the long-completed Santos project in Australia as well as a decline in execution activity for Energy Solutions projects nearing completion. However, revenue in both Urban Solutions and Mission Solutions increased in 2025 due to the ramp up of execution activities on life sciences and mining and metals projects and an increase in volume on a DOE project.
Earnings before taxes decreased during 2025 due to the same factors that impacted revenue above as well as cost growth on 3 infrastructure projects for subcontracted design errors, price escalation and schedule impacts.
Net earnings (loss) excluding amounts attributable to equity method earnings were as follows:
YEAR ENDED
DECEMBER 31,
(in millions) 2025 2024
Earnings (loss) before taxes $ (311) $ 613
Income tax benefit (expense ) 39 (634)
Less: Income tax benefit (expense) attributable to equity method earnings 92 (376)
Income tax expense and effective tax rate, excluding amount attributable to equity method earnings (53) (17) % (258) 42 %
Net earnings (loss) excluding amount attributable to equity method earnings $ (364) $ 355
Equity method earnings $ 210 $ 2,105
Income tax benefit (expense) and effective tax rate attributable to equity method earnings 92 (44) % (376) 18 %
Equity method earnings, net of related income tax expense $ 302 $ 1,729
Net earnings (loss) $ (62) $ 2,084
The effective tax rate on earnings, including equity method earnings, was 39%, 103% and 75% for 2025, 2024 and 2023, respectively. A reconciliation of U.S. statutory federal tax expense to total income tax expense follows:
Year Ended December 31,
(in millions) 2025
U.S. statutory federal tax expense (includes equity method earnings)
$ (21) 21 %
Increase (decrease) in taxes resulting from:
State and local income taxes
61 (60) %
Foreign tax effects:
Australia
Valuation allowance
34 (34) %
Other
(11) 11 %
Other foreign jurisdictions
60 (59) %
Valuation allowance (130) 129 %
Foreign tax credits
(56) 55 %
NCI - - %
Other, net 24 (24) %
Total income tax benefit
$ (39) 39 %
In July 2025, the OBBB Act, which includes a broad range of U.S. tax reforms, was signed into law. The OBBB Act did not have a material impact on our consolidated results.
Our results were significantly impacted by evolving foreign currency rates in 2025. During 2025, the U.S. dollar depreciated against the Euro, British Pound, Canadian Dollar and Mexican Peso.
Our profit margin percentages may be favorably or unfavorably impacted by a change in the amount of CFM recorded. We record revenue on a gross basis, including CFM, when we have concluded that we are a principal with respect to such materials and services, though the timing of CFM receipt can significantly impact completion percentage.
Segment Operations
Urban Solutions
Revenue increased in 2025 due to the ramp up of execution activities on life sciences and mining and metal projects. The increase in 2025 revenue was partially offset by a decline in execution activity for recently completed projects and projects nearing completion. During 2025 and 2024, at-cost revenue for Urban Solutions was approximately $5 billion and $4 billion, respectively (or approximately 59% and 51% of their segment revenue).
Segment profit in 2025 decreased due to forecast adjustments for cost growth on 3 infrastructure projects related to subcontracted design errors, price escalation, schedule impacts partially offset by the refinement of expected recovery on these same projects. These forecast adjustments of $108 million were partially offset by improved performance on other infrastructure projects, a favorable negotiation with a designer on a separate infrastructure project and the ramp up of life sciences projects. The changes in segment profit margin in 2025 reflect these same factors.
New awards in 2025 included a large multi-billion dollar pharmaceutical facility, two significant mining projects and construction contracts for 2 infrastructure projects. Backlog increased in 2025 due to the new award activity. Our staffing business does not report new awards or backlog.
Results for the fourth quarter of 2025.Segment profit in the fourth quarter of 2025 decreased due to a portion of the forecast adjustments for cost growth on the infrastructure projects discussed above.
Energy Solutions
Revenue decreased in 2025 primarily due to the reversal of previously recognized revenue of $643 million for a judgment on the long completed Santos project in Australia. The revenue decrease was further driven by a decline in execution activity for several projects nearing completion and for certain projects at our joint venture in Mexico where we slowed our execution activities beginning in the second quarter of 2025 through much of the third quarter as previously discussed. The customer made significant progress payments in the latter half of 2025, which allowed us to execute a controlled restart of our project execution activities. The declines in revenue were partially offset by the ramp up of execution activities on a batteries project in Poland. During both 2025 and 2024, at-cost revenue for Energy Solutions was approximately $2 billion (or approximately 49% and 37% of their segment revenue).
Segment profit and profit margin declined in 2025 due to the judgment on the Santos project.
New awards were lower in 2025 compared to 2024. Backlog declined during 2025 due to the execution pace exceeding new award activity.
Results for the fourth quarter of 2025.Segment profit in the fourth quarter of 2025 was consistent with the fourth quarter of 2024.
Mission Solutions
Revenue increased in 2025 primarily due to an increase in project execution volume associated with a construction project for the DOE and hurricane claims administration support for FEMA, partially offset by reduced volumes on 2 DOE projects. Revenue in 2025 also included the recognition of revenue reserves for certain disputed costs on a DOD project and an adverse ruling on a long-standing claim for a project completed in 2019. During both 2025 and 2024, Mission Solutions had no meaningful amounts of at-cost revenue.
Segment profit and profit margin declined in 2025 primarily due to the recognition of revenue reserves for certain disputed costs on a DOD project and an adverse ruling on a long-standing claim for a project completed in 2019.
New awards in 2025 were stable with 2024 and included a six-year contract to extend our presence at the Portsmouth site. Backlog included $1.0 billion and $665 million of unfunded government contracts as of December 31, 2025 and 2024, respectively. Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods.
Results for the fourth quarter of 2025.Segment profit in the fourth quarter of 2025 decreased due to the recognition of revenue reserves for certain disputed costs on a DOD project.
Other
Prior to its deconsolidation in October 2024, the results of NuScale were presented in our Other segment. In 2025, we completed the sale of Stork's operations in the U.K. and recognized a gain on sale of $7 million compared to an $11 million gain on the sale of Stork's operations in continental Europe in 2024. The results from our Other segment were immaterial for 2025.
G&A
YEAR ENDED DECEMBER 31,
(in millions) 2025 2024 2023
G&A
Compensation $ 99 $ 143 $ 165
Severance and restructuring costs 43 13 11
Legal & professional fees 24 13 10
Facilities 7 15 14
Reserve for legacy legal claims 4 - 3
Other 19 19 29
G&A $ 196 $ 203 $ 232
The decrease in compensation expense in 2025 was primarily driven by lower stock price-driven compensation and performance-based compensation. During 2025, we recognized severance and exit costs primarily related to certain international office closures.
Net Interest Income (Expense)
The decrease in net interest income during 2025 was primarily due to a decrease in interest rates as well as cash balances at certain of our larger joint ventures.
Equity Method Earnings
YEAR ENDED DECEMBER 31,
(in millions) 2025 2024
Equity method earnings
Gain (loss) on the fair value of our investment in NuScale $ (419) $ 2,221
Gain on the fair value of the forward sale contract of NuScale shares 208 -
Gain on the sale of NuScale shares 336 -
Other 85 (116)
Equity method earnings $ 210 $ 2,105
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our significant accounting policies are described in the notes to our financial statements. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on information available through the date of the issuance of the financial statements and, accordingly, actual results in future periods could differ from these estimates. Significant judgments and estimates used in the preparation of our financial statements apply to the following critical accounting policies:
Revenue Recognition for Engineering & Construction Contracts.We recognize our engineering and construction contract revenue over time as we provide services to satisfy our performance obligations. We generally use the cost-to-cost percentage-of-completion measure of progress as it best depicts how control transfers to our clients. The cost-to-cost approach measures progress towards completion based on the ratio of cost incurred to date compared to total estimated contract cost. Use of the cost-to-cost measure of progress requires us to prepare estimates of total expected revenue and cost to complete our projects.
CFM are included in revenue and cost of revenue when (1) we believe that we are acting as a principal rather than as an agent, (2) the contract includes construction activity and (3) we have visibility into the amount the customer is paying for the materials or there is a reasonable basis for estimating the amount. If we lose visibility mid-project, we cease recognizing
future CFM but do not de-recognize previous amounts of CFM.
Due to the nature of our industry, there is significant complexity in our estimation of total expected revenue and cost, for which we must make significant judgments. Our contracts with our customers may contain several types of variable consideration, including claims, unpriced change orders, award and incentive fees, liquidated damages and penalties or other provisions that can either increase or decrease the contract price to arrive at estimated revenue. Certain variable consideration, such as award and incentive fees, generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We estimate variable consideration at the most likely amount to which we expect to be entitled upon completion of a project. We include estimated amounts in the transaction price to the extent it is probable we will realize that amount. Our estimates of variable consideration and our determination of its inclusion in project revenue are based on an assessment of our anticipated performance and other information that may be available to us.
At a project level, we have specific practices and procedures to review our estimate of total revenue and cost. Each project team reviews the progress and execution of our performance obligations, which impact the project's accounting outcome. As part of this process, the project team reviews information such as any outstanding key contract matters, progress towards completion and the related program schedule and identified risks and opportunities. The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our project estimates, which can change from period to period due to a variety of factors including:
•Complexity in original design;
•Extent of changes from original design;
•Different site conditions than assumed in our bid;
•The productivity, availability and skill level of labor;
•Weather conditions when executing a project;
•The technical maturity of the technologies involved;
•Length of time to complete the project;
•Availability and cost of equipment and materials;
•Subcontractor and joint venture partner performance;
•Expected costs of warranties; and
•Our ability to recover for additional contract costs.
We recognize changes in contract estimates on a cumulative catch-up basis in the period in which the changes are identified. Such changes in contract estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in prior periods. Changes in contract estimates may also result in the reversal of previously recognized revenue if the current estimate adversely differs from the previous estimate. If we estimate that a project will have costs in excess of revenue, we recognize the total loss in the period it is identified.
Fair Value Measurements. We elected the fair value option of accounting for our investment in NuScale that would have otherwise been recorded under the equity method of accounting. We recognize the fair value of our investment in NuScale on a mark-to-market basis based upon the prevailing price of their stock on our balance sheet dates, which may subject our consolidated earnings to volatility. We recognize the fair value of our forward sale contract in NuScale shares based on the difference between the closing price of NuScale at December 31, 2025 and the year-to-date settlement price calculated per the agreement plus a discounted growth assumption through the estimated settlement date. No estimates are used in the determination of the fair value of our investment in NuScale or the forward sale contract.
Recent Accounting Pronouncements
Item is described in the Notes to Financial Statements.
Litigation and Matters in Dispute Resolution
Item is described in the Notes to Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facility and, when necessary, access to capital markets. In 2026, liquidity is expected to be positively impacted by the proceeds from the sales of NuScale shares and the fabrication yard in China. 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, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.
Our credit facility 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, which is a one notch downgrade from both agencies' current ratings. If we were required to provide collateral, it would consist broadly of liens on our U.S. assets.
As of December 31, 2025, letters of credit totaling $424 million were outstanding under our $2.2 billion credit facility, which matures in February 2028. This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, based upon total shareholders' equity excluding AOCI, 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 $1.1 billion, all as defined in the amended credit facility, which may be reduced to $1.0 billion upon the repayment of debt. Borrowings under the facility, which may be denominated in USD, EUR or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of December 31, 2025 and through the issuance of this 10-K, we had not made any borrowings under our credit line. We have a sub-limit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $901 million.
Cash and cash equivalents combined with marketable securities were $2.2 billion and $3.0 billion as of December 31, 2025 and 2024, respectively. 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 $820 million and $1.1 billion as of December 31, 2025 and 2024. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are invested in offshore, overnight accounts or short-term time deposits, to which there is unrestricted access.
Cash and cash equivalents held by our consolidated variable interest entities (which totaled $328 million and $333 million as of December 31, 2025 and 2024, respectively) were not necessarily readily available for general purposes. We do not include our share of cash held by our proportionately consolidated joint ventures and partnerships in our consolidated cash balances even though these amounts may be significant. We also consider the extent to which client advances (which totaled $14 million and $79 million as of December 31, 2025 and 2024, 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 December 31, 2025 and 2024, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.
In 2025, we sold 15 million of our NuScale shares for net proceeds of $605 million. In February 2026, we completed the sale of 71 million shares of NuScale via a variable price forward sale agreement, generating total proceeds of $1.35 billion. We expect to monetize the remaining 40 million shares of NuScale using similar structured programs and expect that all remaining ownership in NuScale should be sold by the second quarter of 2026.
During 2025, we used $754 million to repurchase and cancel 18 million shares of common stock under our repurchase program. Over 10 million shares could still be purchased under the repurchase program as of December 31, 2025, but in February 2026 our board authorized a 30 million share expansion to the repurchase program. We are targeting approximately $1.4 billion in share repurchases in 2026, including $500 million in the first quarter.
Year Ended December 31,
(in millions) 2025 2024 2023
OPERATING CASH FLOW(1)
$ (387) $ 828 $ 212
INVESTING CASH FLOW
Proceeds from the sale of NuScale shares
605 - -
Proceeds from sales and maturities (purchases) of marketable securities 75 (60) (141)
Capital expenditures (50) (164) (106)
NuScale cash deconsolidated
- (131) -
Proceeds from sales of assets (net of cash divested)
63 82 (5)
Investments in partnerships and joint ventures (278) (93) (33)
Return of capital from partnerships and joint ventures 22 34 8
Other - (1) -
Investing cash flow 437 (333) (277)
FINANCING CASH FLOW
Repurchase of common stock (754) (125) -
Proceeds from issuance of 2029 Notes, net of issuance costs - - 560
Capped call transactions related to 2029 Notes - - (73)
Purchases and retirement of debt (37) (57) (249)
Proceeds from NuScale share issuance (net of issuance fees) - 80 -
Dividends paid on CPS - - (29)
Make-whole payment on conversion of CPS - - (27)
Distributions paid to NCI (64) (14) (53)
Capital contributions by NCI 65 - 10
Other (7) - (12)
Financing cash flow (797) (116) 127
Effect of exchange rate changes on cash 53 (69) 18
Increase (decrease) in cash and cash equivalents
(694) 310 80
Cash and cash equivalents at beginning of year 2,829 2,519 2,439
Cash and cash equivalents at end of year $ 2,135 $ 2,829 $ 2,519
(1) Operating cash flow in 2025 included a payment of $642 million to Santos, net of insurance recoveries, for a judgment related to a reimbursable project completed by us in 2015.
Operating Activities
Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and 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 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 as well as 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 lump-sum 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. As of December 31, 2025, our backlog included $255 million for ongoing legacy projects in a loss position, including approximately $212 million of estimated unfunded losses associated therewith. The comparable amounts in 2024 were $702 million of backlog and $237 million of unfunded losses.
Our operating cash flow for 2025 was significantly impacted by $642 million paid to Santos, net of insurance recoveries, upon a judgment over Santos' efforts to recover costs related to a reimbursable project completed by us in 2015. This decline was partially offset by decreases in working capital on several large projects as well as distributions from a large Energy Solutions joint venture. During 2025, we funded $74 million on 2 consolidated infrastructure projects.
Investing Activities
During 2025, we converted all 126 million of our NuScale voting shares (along with the associated ownership units in NuScale's operating subsidiary) into registered shares. We sold 15 million of those shares for net proceeds of $605 million during 2025. In February 2026, we completed the sale of 71 million shares for proceeds of $1.35 billion.
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 in 2025 primarily related to investments in IT compared to expenditures for improvements to our new office lease in Houston in 2024.
Net proceeds from sales of assets during 2025 included $61 million from the sale of Stork's U.K. operations compared to $67 million from the sale of Stork's European business in 2024.
Investments in partnerships and joint ventures in 2025 included $158 million in funding on a proportionately consolidated loss project for an infrastructure joint venture, $38 million in funding on an Energy Solutions joint venture and $33 million in funding to a separate infrastructure joint venture to make a legal settlement payment. Investments in partnerships and joint ventures in 2024 included capital contributions to an infrastructure joint venture, an Energy Solutions joint venture and a Mission Solutions joint venture.
Return of capital from partnerships and joint ventures in 2024 included capital distribution from an infrastructure joint venture.
In December 2025, we reached an agreement to sell our ownership in the fabrication yard in China for approximately $122 million. The sale is expected to close in 2026, subject to the conditions in the agreement.
Financing Activities
We have an ongoing stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. During 2025, we repurchased 18 million shares of common stock under the repurchase program for total consideration of $754 million. As of December 31, 2025, over 10 million shares could still be purchased under the repurchase program which was expanded by 30 million shares by our board in February 2026.
Key provisions of our debt and debt-related matters are described in the notes to the financial statements. During 2025 and 2024, we redeemed $37 million and $57 million, respectively, of aggregate outstanding 2028 Notes, with an immaterial impact on earnings in both years. During 2023, we redeemed the remaining €129 million of outstanding 2023 Notes for $140 million and completed a tender offer in which we repurchased $115 million of outstanding 2024 Notes, excluding accrued interest, for consideration of $975.03 per $1,000 principal amount of the notes.
In August 2023, we issued our 1.125% Convertible Senior Notes (the "2029 Notes"). The conversion rate for the 2029 Notes is 22.0420 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $45.37 per share. Holders may convert their 2029 Notes any time before May 2029 under the following conditions:
•if the last reported price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to $58.98 on each applicable trading day;
•during the 5-business day period after any 5-consecutive trading day period in which the trading price of the 2029 Notes was less than 98% of the product of the last reported stock price and the conversion rate;
•if we call any or all of the 2029 Notes for redemption; or
•upon the occurrence of specified events as described in the applicable indenture.
In addition, holders may convert their 2029 Notes any time beginning in May 2029 and prior to maturity without regard to the foregoing circumstances. Upon any conversion, we will repay the principal amount of the notes in cash and may elect to convey the conversion premium in any combination of cash and shares of our common stock. Certain events could cause the conversion rate to increase, including a make-whole fundamental change or redemption, but in no event will the conversion rate for a single note exceed 29.2056 shares of our common stock, other than for customary adjustments described in the applicable indenture.
After August 2026, we may elect to redeem up to all of the outstanding 2029 Notes if our common stock has a prevailing per share closing price in excess of $58.98. In such election, all principal would be settled in cash and could result in a make-whole premium if the holders also elect to convert. We may elect to pay any make-whole premium in any combination of cash and shares of our common stock.
In connection with the 2029 Notes offering, we entered into capped call transactions with certain banks. The strike price of the capped call options corresponds to the conversion price of the 2029 Notes of $45.37 per share. The capped call options are expected to offset potential dilution to our common stock upon conversion of any 2029 Notes and/or offset any cash payments we are required to make for any conversion premium if our stock price is greater than $45.37. The upper limit of the capped calls is $68.48 per share. If our stock price exceeds $68.48, there would be unmitigated dilution and/or no offset of any cash payments attributable to the amount by which our stock exceeds the cap price. We will not be required to make any cash payments to option counterparties upon the exercise of capped call options, but we will be entitled to receive from them shares of our common stock or an amount of cash based on the amount by which the market price of our common stock exceeds the strike price of the capped calls.
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 2025 related to 2 consolidated infrastructure projects and a Mission Solutions joint venture. Distributions in 2024 related to the same Mission Solutions joint venture.
During 2024, prior to its deconsolidation, NuScale received $80 million in proceeds from the issuance of their common stock.
Letters of Credit
As of December 31, 2025, letters of credit totaling $424 million were outstanding under committed lines of credit. As of December 31, 2025, letters of credit totaling $918 million were outstanding under uncommitted lines of credit including letters of credit totaling $347 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided 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 $14 billion as of December 31, 2025.
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.
Fluor Corporation published this content on February 17, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 17, 2026 at 12:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]