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What changed in FLUOR CORP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of FLUOR CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+327 added−375 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-21)

Top changes in FLUOR CORP's 2023 10-K

327 paragraphs added · 375 removed · 241 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

96 edited+13 added−34 removed22 unchanged
Biggest changeWe focus on the energy transition markets, including asset decarbonization, carbon capture, renewable fuels, waste-to-energy, green chemicals, hydrogen, nuclear power and other low-carbon energy sources. At the same time, we continue to serve the oil, gas and chemical industries with full project life-cycle services, including expansion and modernization projects as well as in sustaining capital work.
Biggest changeWe serve the oil, gas, chemical and power industries with full project life-cycle services, including expansion and modernization projects as well as in sustaining capital work. We have an extensive skill set that is focused on energy transition markets, including asset decarbonization, carbon capture, renewable fuels, waste-to-energy, green chemicals, hydrogen, nuclear power and other low-carbon energy sources.
Item 1. Business Fluor is building a better world by applying world-class expertise in order to solve our clients' greatest challenges. We provide professional and technical solutions that deliver safe, well-executed, capital-efficient projects to clients around the globe. Fluor Corporation was incorporated in Delaware in September 2000.
Item 1. Business Fluor is building a better world by applying world-class expertise in order to solve our clients' greatest challenges. We provide professional and technical solutions that deliver safe, well-executed, capital-efficient projects to our clients around the globe. Fluor Corporation was incorporated in Delaware in September 2000.
Additionally, employees can access Fluor University, our online platform, where they can select from a wide variety of self-paced, online, virtual and instructor-led training courses. Topics range from our internally developed Fluor University courses focused on discipline-specific training, to commercially available technical learning and general knowledge topics, such as leadership, business acumen, communication and inclusive management.
Additionally, employees can access Fluor University, our online platform, where they select from a wide variety of self-paced, online, virtual and instructor-led training courses. Topics range from our internally developed courses focused on discipline-specific training, to commercially available technical learning and general knowledge topics, such as leadership, business acumen, communication and inclusive management.
Prior to that, he was Senior Vice President, Operations — Energy & Chemicals from 2019 to 2021, Senior Vice President, Global Business Development — Energy & Chemicals in 2019, Senior Vice President, Operations in Europe, Africa and the Middle East — Energy & Chemicals from 2016 to 2019. Mr. Collins joined the company in 1994. David E. Constable Mr.
Prior to that, he was Senior Vice President, Operations — Energy & Chemicals from 2019 to 2021, Senior Vice President, Global Business Development — Energy & Chemicals in 2019 and Senior Vice President, Operations in Europe, Africa and the Middle East — Energy & Chemicals from 2016 to 2019. Mr. Collins joined the company in 1994. David E. Constable Mr.
In such situations, our contracts typically provide for the payment of fees earned through the date of termination and the reimbursement of costs incurred including demobilization costs. Under reimbursable contracts, the client reimburses us based upon negotiated rates and pays us a pre-determined fee, or a fee based upon a percentage of the cost incurred in completing the project.
In such situations, our contracts typically provide for the payment of fees earned through the date of termination and the reimbursement of other costs incurred including demobilization costs. Under reimbursable contracts, the client reimburses us based upon negotiated rates and pays us a pre-determined fee, or a fee based upon a percentage of the cost incurred in completing the project.
Our Mission Solutions segment, primarily acting as a prime contractor or a major subcontractor for a number of government programs, generally performs its services under reimbursable contracts subject to applicable statutes and regulations. In many cases, these contracts include incentive fee arrangements. The programs may span many years and may be implemented by awards under multiple contracts.
Mission Solutions, primarily acting as a prime contractor or a major subcontractor for a number of government programs, generally performs its services under reimbursable contracts subject to applicable statutes and regulations. In many cases, these contracts include incentive fee arrangements. The programs may span many years and may be implemented by awards under multiple contracts.
Development Opportunities One of our top priorities is to provide ongoing training and development for our employees through multiple avenues. In 2022, we extended our catalog of leadership development offerings and methods of delivery. This included delivery of critical learning opportunities to our executives, project execution and functional employees based in offices, remote locations and project field assignments.
Development Opportunities One of our top priorities is to provide ongoing training and development for our employees through multiple avenues. In 2023, we extended our catalog of leadership development offerings and methods of delivery. This included delivery of critical learning opportunities to our executives, project execution and functional employees based in offices, remote locations and project field assignments.
In Urban Solutions, temporary staffing is a highly fragmented market with over 1,000 companies competing globally. The key competitive factors in this business line are price, service, quality, client relationships, breadth of service and the ability to identify and retain qualified personnel and geographic coverage.
The temporary staffing business is a highly fragmented market with over 1,000 companies competing globally. The key competitive factors in this business line are price, service, quality, client relationships, breadth of service and the ability to identify and retain qualified personnel and geographic coverage.
By leveraging internal and third-party yards in key regions of the world, we help our clients achieve cost and schedule savings by reducing on-site craft needs and shifting work to inherently safer and more controlled work environments.
By leveraging internal and third-party capabilities in key regions of the world, we help our clients achieve cost and schedule savings by reducing on-site craft needs and shifting work to inherently safer and more controlled work environments.
We believe the ability to complete projects on a large-scale basis, especially in a business where time to market is critical, enables us to better serve our clients and is a key competitive advantage.
We believe the ability to complete projects on a large-scale basis, especially where time to market is critical, enables us to better serve our clients and is a key competitive advantage.
A large number of companies compete against us, including U.S.-based companies such as AECOM, Amentum Services, Inc., Bechtel Group, Inc., EMCOR Group, Inc., Jacobs Solutions, Inc., KBR, Inc., Kiewit Corporation, Granite Construction, Inc. and Quanta Services, Inc., and international-based companies such as ACS Actividades de Construccion y Servicios, Balfour Beatty plc, Chiyoda Corporation, Hyundai Engineering & Construction Company, Ltd., JGC Corporation, McDermott International, Inc., Petrofac Limited, SNC-Lavalin Group, Inc., Samsung Engineering, Stantec Inc., Technip Energies N.V., Wood Group plc, and WorleyParsons Limited.
A large number of companies compete against us, including U.S.-based companies such as AECOM, Amentum Services, Inc., Bechtel Group, Inc., Black & Veatch, EMCOR Group, Inc., Jacobs Solutions, Inc., KBR, Inc., Kiewit Corporation, Granite Construction, Inc., Quanta Services, Inc. and V2X, Inc., and international-based companies such as ACS Actividades de Construccion y Servicios, Balfour Beatty plc, Chiyoda Corporation, Exyte GmbH, Hyundai Engineering & Construction Company, Ltd., JGC Corporation, McDermott International, Inc., Petrofac Limited, SNC-Lavalin Group, Inc., Samsung Engineering, Stantec Inc., Technip Energies N.V., Wood Group plc, and WorleyParsons Limited.
These activities can require us to manage, handle, remove, treat, transport and dispose of toxic, radioactive or hazardous substances, and are subject to many environmental, health and safety laws and regulations. 9 Table of Contents We believe that we are compliant with all environmental, health and safety laws and regulations.
These activities can require us to manage, handle, remove, treat, transport and dispose of toxic, radioactive or hazardous substances, and are subject to many environmental, health and safety laws and regulations. We believe that we are compliant with all environmental, health and safety laws and regulations.
We provide th ese services to our clients in a diverse set of industries worldwide including advanced technologies and manufacturing, chemicals, infrastructure, life sciences, LNG, mining and metals, nuclear project services, and oil and gas production and fuels. We are also a service provider to the U.S. federal government and governments abroad.
We provide th ese services to our clients in diverse industries worldwide including advanced technologies and manufacturing, chemicals, infrastructure, life sciences, LNG, mining and metals, nuclear project services, energy transition, and oil and gas production and fuels. We are also a service provider to the U.S. federal government and governments abroad.
Business Segments Energy Solutions We are a partner in the production of safer, cleaner and sustainable solutions to meet the world's increasing energy and chemicals demand. Our Energy Solutions segment provides EPC services for the production and fuels, chemicals, LNG and nuclear project services markets.
Business Segments Energy Solutions We are a partner in the production of safer, cleaner and sustainable solutions to meet the world's increasing energy and chemicals demand. Our Energy Solutions segment provides EPC services for the production and fuels, chemicals, LNG and power markets.
Types of Contracts While the basic terms and conditions of the contracts that we perform may vary considerably, we typically perform our work under two types of contracts: (a) reimbursable contracts and (b) lump-sum or guaranteed maximum contracts. In some markets, we are seeing hybrid contracts containing both lump-sum and reimbursable elements.
Other Matters Types of Contracts While the basic terms and conditions of the contracts that we perform may vary considerably, we typically perform our work under two broad types of contracts: (a) reimbursable contracts and (b) lump-sum or guaranteed maximum contracts. In some limited markets, we are seeing hybrid contracts containing both lump-sum and reimbursable elements.
We are also involved in offshore production facilities and in gas processing projects. In the downstream sector, our clients have been modernizing and modifying existing refineries to increase capacity, improve margins and enhance environmental performance. We are active in the repurposing of existing refining facilities for the production of renewable fuels.
We are also involved in offshore production facilities and in gas processing projects. In the downstream sector, our clients have been modernizing and modifying existing refineries to increase capacity, improve margins and reduce environmental impact. We are active in the repurposing of existing refining facilities for the production of renewable fuels.
In 2022, our employees received nearly 73,000 hours of training through Fluor University. For group-focused development and networking, our global mentoring circles provide an avenue for small groups to generate dialogue about meaningful and relevant topics related to the company, work environment and career development.
In 2023, our employees received nearly 130,000 hours of training through Fluor University, nearly double compared to 2022. For group-focused development and networking, our global mentoring circles provide an avenue for small groups to generate dialogue about meaningful and relevant topics related to the company, work environment and career development.
We are committed to taking care of our employees and preventing injuries in our offices and project locations. Our robust programs and procedures help us mitigate the hazards inherent in the work we do. We are committed to fostering a caring, preventive culture founded on proactive action by engaged employees.
We are committed to taking care of our employees and preventing injuries in our offices and project locations. Our robust programs and procedures help us mitigate the hazards inherent in the work we do. We are committed to fostering a caring, preventive culture founded on proactive action by engaged employees. We call this Safer Together SM .
As energy and chemicals projects have become more challenging geographically, geopolitically or otherwise, we believe that clients will continue to look to us to manage their complex projects based on our size, strength, global reach, experience, technical expertise and proven track record. Our role can vary with each specific project.
As energy and chemicals projects have become more challenging geographically, geopolitically or otherwise, we believe that clients will continue to look to us to manage such complex projects to draw upon our size, strength, global reach, experience, technical expertise and proven track record. Our role can vary with each specific project.
We have the capacity to design, fabricate and construct new facilities, upgrade, modernize and expand existing facilities, and rebuild facilities following fires and explosions. We also provide consulting services ranging from feasibility studies to process assessments to project finance structuring.
We have the capacity to design, fabricate and construct new facilities, upgrade, optimize, modernize and expand existing facilities, and rebuild facilities following their destruction. We also provide consulting services ranging from feasibility studies to process assessments to project finance structuring.
In civil services, we are a partner to FEMA for disaster recovery and are one of their top contractors. In defense, we deliver operations and maintenance, global logistics, EPC, life support and operations of mission critical facilities across U.S. military service organizations. We can rapidly mobilize people and equipment to deliver solutions across the globe and in the harshest environments.
In civil services, we are a partner to FEMA for disaster recovery and emergency response. In defense, we deliver operations and maintenance, global logistics, EPC, life support and operations of mission-critical facilities across U.S. military service organizations. We can rapidly mobilize people and equipment to deliver solutions across the globe and often in the harshest environments.
Constable has been Chief Executive Officer since January 2021, after serving as a member of Fluor's Board of Directors since 2019. He previously served as Chief Executive Officer (from 2011) and Chief Executive Officer and President (from 2014) of Sasol Ltd., an integrated energy and chemical company, until 2016.
Constable has been Chief Executive Officer since January 2021, after serving as a member of Fluor's Board of Directors since 2019. He previously served as Chief Executive Officer (from 2011) and Chief Executive Officer and President (from 2014) of Sasol Ltd., an integrated energy and chemical company, until 2016. Mr. Constable first joined the company in 1982. Mr.
Our services can range from basic consulting activities, often at the early stages of a project, to complete design-build, operations and maintenance contracts. • In engineering and design , we develop solutions to address our clients’ most complex problems.
General Operations Our services fall into 6 broad categories and can range from basic consulting activities, often at the early stages of a project, to complete design-build, operations and maintenance contracts. • In engineering and design , we develop solutions to address our clients’ most complex problems.
We can be responsible for some or all of the total cost of the project if the cost exceeds the guaranteed maximum price. Where the total cost is less than the negotiated guaranteed maximum price, we may receive the benefit of the cost savings based upon a negotiated agreement with the client.
We can be responsible for some or all of the total cost of the project if the cost exceeds the guaranteed maximum price. Where the total cost is less than the negotiated guaranteed maximum price, we may receive the benefit of the cost savings based upon the terms of the contract.
We are focused on delivering four key impact pillars to advance DE&I: • Champion an inclusive culture; • Recruit, develop and retain talent; • Enhance employee experience; and • Improve social progress and impact. We work with a variety of outreach, community and education organizations, including a range of universities.
We are focused on delivering 4 key impact pillars to advance inclusion: • Champion an inclusive culture; • Recruit, develop and retain talent; • Enhance employee experience; and 9 Table of Contents • Improve social progress and impact. We work with a variety of outreach, community and education organizations, including a range of universities.
We have been very active for several decades in the chemicals and petrochemicals market, with major projects in the ethylene-based markets as well as in a variety of specialty chemicals. We are also active in battery chemicals projects and we are engaging with clients on implementing lower carbon solutions on their existing and new facilities.
We have been very active for several decades in the chemicals and petrochemicals market, with major projects in the ethylene-based markets as well as in a variety of specialty chemicals. We are also active in battery chemicals projects and we execute projects to implement lower carbon solutions on existing and new chemical facilities.
Brennan 55 Executive Vice President and Chief Financial Officer James R. Breuer 54 Group President, Energy Solutions Alvin C. Collins III 49 Group President, Corporate Development and Sustainability David E. Constable 61 Chairman and Chief Executive Officer Thomas P. D'Agostino 64 Group President, Mission Solutions Stacy L. Dillow 49 Executive Vice President and Chief Human Resources Officer Mark E.
Brennan 56 Executive Vice President and Chief Financial Officer James R. Breuer 55 Group President, Energy Solutions Alvin C. Collins III 50 Group President, Corporate Development and Sustainability David E. Constable 62 Chairman and Chief Executive Officer Thomas P. D'Agostino 65 Group President, Mission Solutions Stacy L. Dillow 50 Executive Vice President and Chief Human Resources Officer Mark E.
Brennan joined the company in 1991. James R. Breuer Mr. Breuer has been Group President, Energy Solutions since January 2021. Prior to that, he was President, Downstream — Energy & Chemicals from 2019 to 2021, Vice President and General Manager, South America — Mining & Metals from 2017 to 2019 and Director of Operations, ICA Fluor from 2013 to 2017.
Brennan joined the company in 1991. James R. Breuer Mr. Breuer has been Group President, Energy Solutions since January 2021. Prior to that, he was President, Downstream — Energy & Chemicals from 2019 to 2021, Vice President and General Manager, South America — Mining & Metals from 2017 to 2019. Mr. Breuer joined the company in 1993. Alvin C.
We have access to numerous global supply sources; however, the availability and cost of these products, components and raw materials may vary significantly from year to year due to various factors including the logistics market, client demand, prod ucer capacity, inflation, market conditions and specific material shortages. Compliance with Government Regulations We provide services at sites throughout the world.
We have access to numerous global supply sources; however, the availability and cost of these products, components and raw materials may vary significantly from year to year due to various factors including the logistics market, client demand, prod ucer capacity, inflation, market conditions and specific material shortages.
We have employees in the following regions: Region % of Global Workforce North America 36 % Europe, Africa and Middle East 21 % Central and South America 30 % Asia Pacific (includes Australia) 13 % Health and Safety Safety is one of our core values.
We have employees in the following regions: Region % of Global Workforce North America 48 % Europe, Africa and Middle East 29 % Central and South America 5 % Asia Pacific (includes Australia) 18 % Health and Safety Safety is one of our core values.
Additionally, we are an industry leader in nuclear remediation at governmental facilities providing site management, environmental remediation, and decommissioning of facilities and have been successful in addressing environmental and regulatory challenges associated with legacy and operational nuclear sites. We also provide services to commercial nuclear clients.
We deliver solutions for nuclear security and operations, nuclear waste management and laboratory management. Additionally, we are an industry leader in nuclear remediation at governmental facilities providing site management, environmental remediation, and decommissioning of facilities and have been successful in addressing environmental and regulatory challenges associated with nuclear sites. We also provide services to commercial nuclear clients.
Furthermore, negotiated fixed-price contracts may occur under a 8 Table of Contents compensation model in which we perform some of the early work on a project, including to advance the engineering, on a reimbursable basis before agreeing upon and converting to a lump-sum price for the remainder of the project.
This may reduce the risk associated with bidding in competition. Furthermore, negotiated fixed-price contracts may occur under a compensation model in which we perform some of the early work on a project, including to advance the engineering, on a reimbursable basis before agreeing upon and converting to a lump-sum price for the remainder of the project.
In 2022, Fluor and our Fluor Foundation contributed $5 million to community initiatives and programs with the majority of funding allocated to programs that support underserved minorities and women. Additionally, we expanded our Fluor Cares platform to further empower our employees to invest in organizations and causes that best resonate with them.
In 2023, Fluor and our Fluor Foundation contributed $4.2 million to community initiatives and programs with the majority of funding allocated to programs that support underserved minorities and women. Through Fluor Cares, we empower our employees to invest in organizations and causes that best resonate with them.
Community Responsibility A high-performance culture with purpose offers employees robust and enriching opportunities to help build a better world. For more than 40 years, our employee giving and volunteering program, Fluor Cares, has empowered e mployees to give back to the communities where we live and work.
Community Responsibility To foster a high-performance culture with purpose, we offer our employees robust and enriching opportunities to help meet our goal of building a better world. For more than 70 years, our employee giving and volunteering program, Fluor Cares, has empowered employees to give back to the communities where we live and work.
We also maintain various documents related to our corporate governance including our Corporate Governance Guidelines, our Board Committee Charters and our Code of Business Conduct and Ethics for Members of the Board of Directors on the “Sustainability” portion of our website under “Governance.”
We also maintain information on our website related to our corporate governance including our Corporate Governance Guidelines, our Board Committee Charters and our Code of Business Conduct and Ethics for Members of the Board of Directors.
Strategic Priorities Since January 2021, we have been guided by four strategic priorities for driving value creation for our shareholders: • Drive growth across our portfolio , by growing markets outside of the traditional oil and gas sector, including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and nuclear and civil, defense and intelligence for governments; • Pursue contracts with fair and balanced commercial terms , focusing on more favorable, risk-adjusted agreements that reward Fluor for value; • Reinforce financial discipline , maintaining a solid balance sheet by generating predictable cash flow and earnings; and • Foster a high-performance culture with purpose , by advancing our diversity, equity and inclusion efforts and promoting social progress and sustainability.
Strategic Priorities Since January 2021, we have been guided by 4 strategic priorities for driving value creation for our shareholders: • Drive growth across our portfolio , by diversifying markets outside of the traditional oil and gas sector, including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and nuclear and civil, defense and intelligence for governments; • Pursue contracts with fair and balanced commercial terms , focusing on more favorable, risk-adjusted agreements that reward Fluor for delivering value to our clients; • Reinforce financial discipline , maintaining a solid balance sheet by generating predictable cash flow and earnings with right-sized cost structure; and • Foster a high-performance culture with purpose , through excellence in execution, which brings value to all our stakeholders, and by advancing our social agenda such as our inclusion efforts and environmental sustainability.
As of December 31, 2022, the following table summarizes contract type within our ending backlog: December 31, December 31, (in millions) 2022 2021 Reimbursable $ 16,500 63 % $ 8,497 41 % Lump-Sum and Guaranteed Maximum 9,549 37 % 12,303 59 % In accordance with industry practice, most of our contracts are subject to termination at the discretion of our client.
As of December 31, 2023, the following table summarizes contract type within our ending backlog: December 31, December 31, (in millions) 2023 2022 Reimbursable $ 22,302 76 % $ 16,500 63 % Lump-Sum and Guaranteed Maximum 7,139 24 % 9,549 37 % In accordance with industry practice, most of our contracts are subject to termination at the discretion of our client.
Depending upon when in the lifecycle of a project we convert from reimbursable to lump-sum pricing, the risk may be lower because we may have had greater insight into the details of the project scope, engineering and schedule thereby reducing the number and character of the pricing assumptions in the agreed-upon lump-sum price.
Depending upon when a project converts from reimbursable to lump-sum, our risk may be lesser because we may hold greater insight into the details 7 Table of Contents of the project scope, engineering and schedule thereby reducing the number and character of the pricing assumptions in the agreed-upon lump-sum price.
We also provide services from our distributed execution centers on a cost-efficient basis. Excellence in Execution. We believe that our ability to execute, maintain and manage complex projects, large or small and often in geographically challenging locations, gives us a distinct competitive advantage. We strive to complete our projects meeting or exceeding all client specifications.
We believe that our ability to execute, maintain and manage complex projects , large or small and often in geographically challenging locations, gives us a distinct competitive advantage. We strive to complete our projects meeting or exceeding all client specifications.
We further believe that any accruals with respect to future environmental costs are adequate and that any future costs will not have a material effect on our financial position or results of operations. Some factors, however, could result in additional expenditures or the provision of additional accruals in expectation of such expenditures.
We further believe that any reserves associated with future environmental costs are adequate and that any future costs will not have a material 8 Table of Contents effect on our financial position or future results of operations. Some factors, however, could result in the recognition of additional expense.
These reports, and any amendments to them, are also available at the SEC's website, www.s ec.gov. We also use our investor relations website as a channel of distribution for important company information. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for e-mail alerts and RSS feeds.
We also use our investor relations website as a channel of distribution for important company information. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for e-mail alerts and RSS feeds.
Fields 64 Group President, Project Execution John C. Regan 53 Executive Vice President, Controller and Chief Accounting Officer John R. Reynolds 66 Executive Vice President, Chief Legal Officer and Secretary Terry W. Towle 62 Group President, Urban Solutions _______________________________________________________________________________ (1) All references are to positions held with Fluor Corporation.
Fields 65 Group President, Project Execution Anthony Morgan 57 Group President, Urban Solutions John C. Regan 54 Executive Vice President, Controller and Chief Accounting Officer John R. Reynolds 67 Executive Vice President, Chief Legal Officer and Secretary _______________________________________________________________________________ (1) All references are to positions held with Fluor Corporation.
All officers serve in their respective capacities at the pleasure of the Board of Directors. Joseph L. Brennan Mr. Brennan has been Executive Vice President and Chief Financial Officer since July 2020.
All officers serve in their respective capacities at the pleasure of the Board of Directors. Joseph L. Brennan Mr. Brennan has been Executive Vice President and Chief Financial Officer since July 2020. Prior to that, he was Senior Vice President and Operations Controller in 2020, Senior Vice President and Segment Controller — Energy & Chemicals from 2018 to 2020. Mr.
The following summarizes our human capital information as of December 31, 2022: Number of Employees Salaried Employees 19,573 Craft and Hourly Employees 17,239 TRS Agency 2,764 Total 39,576 The number of craft and hourly employees can vary in relation to the number, size and phase of execution of our projects.
The following summarizes our human capital information as of December 31, 2023: Number of Employees Salaried Employees 20,340 Craft and Hourly Employees 7,764 TRS Agency 2,083 Total 30,187 The number of craft and hourly employees can vary in relation to the number, size and phase of execution of our projects.
We provide a broad range of services including consulting, design, planning, financial structuring, engineering and construction and operation and maintenance services. Continuing urbanization and the replacement and expansion of aging infrastructure in North America continues to drive project opportunities. The segment's staffing services are provided through TRS Staffing Solutions®.
We provide a broad range of services including consulting, design, planning, financial structuring, engineering and construction and operation and maintenance services often delivered under joint ventures with other companies. Continuing urbanization and the replacement and expansion of aging infrastructure in North America continues to drive project opportunities.
This may include the delivery of services to include facility management, technical facility operations, plant readiness, commissioning, start-up and maintenance technology, small capital projects, turnaround and outage services and recapitalization of facilities and infrastructure. Among other things, we can provide key management, staffing and management skills to clients on-site at their facilities.
This may include the delivery of services to include facility management, technical facility operations, plant readiness, commissioning, start-up and maintenance technology, small capital projects, turnaround and outage services and recapitalization of facilities and infrastructure.
Mr. Breuer joined the company in 1993. Alvin C. Collins III Mr. Collins has been Group President, Corporate Development and Sustainability since January 2021.
Collins III Mr. Collins has been Group President, Corporate Development and Sustainability since January 2021.
We have continued to shift to ward data-driven execution, which we expect will enhance our ability to meet our clients' needs. Market Diversity. We serve multiple markets across a broad spectrum of industries around the globe.
We have continued to shift to ward data-driven execution, which we expect will enhance our ability to meet our clients' needs. Market Diversity. We provide services across a broad spectrum of industries around the globe. This diversification helps to mitigate the impact of the cyclicality in the markets we serve and allows us to strive for more consistent growth.
Reynolds has been Executive Vice President and Chief Legal Officer since 2019 and Secretary since 2020. Prior to that, he was Vice President and Senior Managing General Counsel from 2017 to 2019 and Managing General Counsel from 2005 to 2017. Mr. Reynolds joined the company in 1985. Terry W. Towle Mr.
Prior to that, he was Vice President and Senior Managing General Counsel from 2017 to 2019. Mr. Reynolds joined the company in 1985.
Another type of lump-sum contract is a negotiated fixed-price contract, under which we are selected as contractor first and then negotiate a lump-sum price with the client. This may reduce the risk associated with bidding in competition.
This risk may be greater when we provide a lump-sum bid in competition with other contractors because we may not be selected for the work if our bid is higher than the competition. Another type of lump-sum contract is a negotiated fixed-price contract, under which we are selected as contractor first and then negotiate a lump-sum price with the client.
However, through our predecessors, we have been in business for more than 110 years, providing services that are the essential building blocks of development and progress. Acting through our many subsidiaries and interests in joint ventures, we are one of the larger global professional services firms providing EPC, fabrication and modularization, and project management services.
Acting through our many subsidiaries and interests in joint ventures, we are one of the larger global professional services firms providing EPC, fabrication and modularization, and project management services.
The segment's nuclear and civil business holds a tier 1 position with differentiated expertise in managing complex national security missions across the Department of Energy and the National Nuclear Security Administration. We deliver solutions for nuclear security and operations, nuclear waste management and laboratory management.
Mission Solutions Mission Solutions provides high-end technical solutions to the U.S. and other governments. We believe the segment's nuclear and civil business holds a tier 1 position with differentiated expertise in managing complex national security missions across the Department of Energy and the National Nuclear Security Administration.
We are often hired as the overall program manager on large complex projects where various contractors and subcontractors are involved and multiple activities need to be integrated to ensure the success of the overall project. Our services include logistics, development of project execution plans, detailed schedules, cost forecasts, progress tracking and reporting, and the integration of EPC efforts.
We are often hired as the overall program manager on large complex projects where various contractors and subcontractors are involved and multiple activities need to be integrated into an execution plan to ensure the success of the overall project.
We operate our business through four segments: Energy Solutions, Urban Solutions, Mission Solutions and Other.
We operate our business through 3 principal segments: Energy Solutions, Urban Solutions and Mission Solutions. We also have a smaller Other segment.
Some of our contracts, regardless of type, may operate under joint ventures or other teaming arrangements. Typically, we enter into these arrangements with companies with whom we have worked previously. These arrangements are generally made to strengthen our market position or technical skills, or where the size, scale or location of the project directs the use of such arrangements.
Some of our contracts, regardless of type, may operate under joint ventures or other teaming arrangements. Typically, we prefer to enter into these arrangements with companies with whom we have worked previously.
We have an experienced management team, and utilize a systematic and disciplined approach towards identifying, assessing and managing risks. We believe that our risk management approach helps us control costs and meet clients' schedules. Sustainability. Our sustainability charter is to conduct business in a socially, economically and environmentally responsible manner.
We believe we have the ability to assess, mitigate and manage project risk, especially in difficult locations or circumstances. We have an experienced management and execution team, and utilize a systematic and disciplined approach towards identifying, assessing and managing risks. We believe that our risk management approach helps us control costs and meet clients' schedules. Sustainability.
D'Agostino has been Group President, Mission Solutions since January 2021. Prior to that, he was Group President, Government from 2017 to 2021, Senior Vice President, Sales —Government from 2015 to 2017 and Senior Vice President, Strategic Planning and Development — Government from 2013 to 2015. Mr. D'Agostino joined the company in 2013. Stacy L. Dillow Ms.
Constable was appointed Chairman of the Board in May 2022. Thomas P. D'Agostino Mr. D'Agostino has been Group President, Mission Solutions since January 2021. Prior to that, he was Group President, Government from 2017 to 2021. Mr. D'Agostino joined the company in 2013. Stacy L. Dillow Ms. Dillow has been Executive Vice President and Chief Human Resources Officer since 2019.
We also provide resources to improve employee wellbeing including various mental health awareness campaigns, our global Employee Assistance Program, site-specific wellbeing programs, and suicide prevention and mental health first aid training. Diversity, Equity and Inclusion We are committed to advancing Diversity, Equity and Inclusion ("DE&I").
We also provide resources to improve employee wellbeing including various mental health awareness campaigns, our global Employee Assistance Program, site-specific wellbeing programs, and suicide prevention and mental health first aid training. Inclusion We are committed to fostering an inclusive workplace where everyone feels they belong, have a voice and are valued for who they are and what they contribute.
Fluor’s Global University Sponsorship Program includes 24 partner institutions on six continents and we continue to grow our relationships across a range of diverse colleges and technical schools with the majority of funding focused on underserved minorities, women and veterans. We are committed to strengthening our talent pipeline by expanding our diversity lens in our recruitment and selection processes.
We sponsor 24 advanced educational institutions across 6 continents and we continue to grow our relationships across a range of diverse colleges and technical schools with the majority of funding focused on underserved minorities, women and veterans. We are committed to strengthening our talent pipeline by adjusting our recruitment efforts to cast a wide net to expand our applicant pools.
Available Information Our website address is www.fluor.com . You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports on the “Investor Relations” portion of our website as soon as reasonably practicable after we electronically file them with the SEC.
Available Information Our website address is www.fluor.com , where we provide free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports on the “Investor Relations” section. These reports, and any amendments to them, are also available at the SEC's website, www.s ec.gov.
Mr. Fields joined the company in 1981. John C. Regan Mr. Regan has been Executive Vice President, Controller and Chief Accounting Officer since June 2020.
Prior to that, he was Business Line President, Mining & Metals from 2017 to 2023. Mr. Morgan joined the company in 1990. John C. Regan Mr. Regan has been Executive Vice President, Controller and Chief Accounting Officer since June 2020.
Dillow first joined the company in 1996. Mark E. Fields Mr. Fields has been Group President, Project Execution since January 2021. Prior to that, he was Group President, Energy & Chemicals from 2019 to 2021, Senior Vice President, Energy & Chemicals Americas from 2017 to 2019 and Senior Vice President, Project Director — Energy & Chemicals from 2009 to 2017.
Prior to that, he was Group President, Energy & Chemicals from 2019 to 2021, Senior Vice President, Energy & Chemicals Americas from 2017 to 2019. Mr. Fields joined the company in 1981. 11 Table of Contents Anthony Morgan Mr. Morgan has been Group President, Urban Solutions since January 2024.
Dillow has been Executive Vice President and Chief Human Resources Officer since 2019. Prior to that, she was Head of Supply Chain Transformation, Southeast Asia and Australasia at Unilever, a consumer goods company, from 2018 to 2019. Prior to that, she was Senior Project Director — Energy & Chemicals at the company from 2014 to 2017. Ms.
Prior to that, she was Head of Supply Chain Transformation, Southeast Asia and Australasia at Unilever, a consumer goods company, from 2018 to 2019. Ms. Dillow first joined the company in 1996. Mark E. Fields Mr. Fields has been Group President, Project Execution since January 2021.
Our high-performance teams embrace opportunities, solve challenges and continuously improve. Competitive Strengths As a world-class provider of technical and professional services, we believe that we bring capital efficient business solutions to our clients. We believe that our business advantages and global positioning provide us with significant competitive strengths, including: 3 Table of Contents Safety.
Trust, accountability and fairness define our character. Collectively we thrive when we include, respect and empower one another. Our high-performance teams embrace opportunities, solve challenges and continuously improve. Competitive Strengths As a world-class provider of technical and professional services, we believe that we bring capital efficient business solutions to our clients.
Maintaining a safe and secure workplace is a key business driver for us and our clients. In our experience, whether in an office or at a jobsite, a safe environment decreases risks, provides for the well-being of all workers, enhances morale, improves productivity, reduces project cost and generally improves client relations.
In our experience, whether in an office or at a jobsite, a safe environment decreases risks, provides for the well-being of all workers, enhances 3 Table of Contents morale, improves productivity, reduces project cost and generally improves client relationships. We believe that our commitment to safety is one of our most distinguishing features. Global Execution Platform.
We also contract with governments to remediate hazardous materials, including chemical agents, as well as to decontaminate and decommission nuclear sites.
Some of our work can be performed adjacent to environmentally sensitive locations such as wetlands, lakes and rivers. We also contract with governments to remediate hazardous materials, including chemical agents, as well as to decontaminate and decommission nuclear sites.
SAFETY INTEGRITY TEAMWORK EXCELLENCE We care for each other We do what is right We work better together We deliver solutions Living Safer Together SM promotes the well-being of all people, our communities and the environment. Trust, accountability and fairness define our character. Collectively we thrive when we include, respect and empower one another.
They are not only what we believe, they are the foundation of how we achieve our purpose to build a better world. SAFETY INTEGRITY TEAMWORK EXCELLENCE We care for each other We do what is right We work better together We deliver solutions Living Safer Together SM promotes the well-being of all people, our communities and the environment.
We also specialize in providing validation and commissioning services where we not only bring new facilities into production, but we also extend the life, or improve efficiencies, of existing facilities.
In life sciences, we provide front end studies and EPC services to the pharmaceutical, biotechnology, medical device and animal health industries. We also specialize in providing validation and commissioning services where we not only bring new facilities online, but we also extend the life, or improve capabilities, of existing facilities.
Sustainability is integrated into our business practices, and our employees are engaged in delivery on our charter. Our strong, socially responsible corporate identity enables us to build and sustain the global community and provide value for our stakeholders. General Operations Our services fall into six broad categories (outlined below).
Our sustainability charter is to conduct business with social, economic and environmental responsibility. Sustainability is integrated into our business practices, and our employees are engaged in delivery on our charter, enabling us to build and sustain the global community and provide value for our stakeholders.
Project management is accountable to the client to deliver the safety, functionality and financial performance requirements of the project. • Our procurement offerings include procurement and supply chain solutions aimed at improving product quality and performance while also reducing project cost and schedule.
Such services include logistics, development of project execution plans, detailed schedules, cost forecasts, progress tracking and reporting, and the integration of EPC efforts. Project management helps us deliver on our clients' safety, functionality and financial performance requirements. • Our procurement offerings represent supply chain solutions aimed at improving product quality and performance while also reducing project cost and schedule.
We are frequently designated as program manager, and serve as such in cases where the client has facilities in multiple locations, complex phases in a single project location, or a large-scale investment in one facility. • We also provide a variety of fabrication and modularization services, including integrated engineering and modular fabrication and assembly, as well as modular construction and asset support services to clients around the globe from our joint venture yards.
We are frequently designated as program manager, and serve as such in cases where the client has facilities in multiple locations, complex phases in a single project location, or a large-scale investment in one facility. • We offer operations and maintenance services intended to enhance the efficiency of or extend the life of our clients’ facilities.
Regardless of whether our clients are new or have been with us for many decades, our ability to successfully foster relationships is a key strength. Risk Management. We believe we have the ability to assess, mitigate and manage project risk, especially in difficult locations or circumstances.
We believe that long-term relationships with existing clients serve us well by allowing us to better understand and be more responsive to their requirements. Regardless of whether our clients are new or have been with us for many decades, our ability to successfully foster relationships is a key strength. Risk Management.
Our global presence enables us to build local relationships to capitalize on opportunities as well as mobilize quickly to project sites around the world and to draw on our local knowledge and talent pools. We continue to form strategic alliances with local partners, leverage our supply chain expertise and emphasize local training programs.
As one of the larger publicly-traded EPC companies, we have a global footprint with employees located throughout the world. Our global presence enables us to build local relationships to capitalize on opportunities as well as mobilize quickly to project sites around the world and to draw on our local knowledge and talent pools.
For our intelligence clients, we have more than 600 security-cleared personnel providing critical infrastructure solutions such as data center management, operations and maintenance of secure facilities and technology platform services. We construct and renovate secure facilities around the world for a number of government departments and agencies in support of their enduring missions.
We believe we can deliver solutions to our military clients irrespective of the location or the speed required. We believe we have unmatched capabilities in this regard. For our intelligence clients, we have more than 600 security-cleared personnel providing critical solutions such as data center management, operations and maintenance of secure facilities and technology platform services.
Competition The markets served by our business are highly competitive and, for the most part, require substantial resources and highly skilled and experienced technical personnel.
These arrangements are generally made to strengthen our market position or technical skills, or where the size, scale or location of the project directs the use of such arrangements. Competition The markets served by our business are highly competitive and, for the most part, require substantial resources and highly skilled and experienced technical personnel.
Importantly, this also means excellence in execution, which brings value to all our stakeholders. In 2022, we continued to make progress on our strategic priorities. 67% of our new awards in 2022 were from outside of our traditional oil and gas markets. As of December 31, 2022, 63% of our backlog is reimbursable.
In 2023, we continued to make progress on our strategic priorities. 65% of our revenue in 2023 was from outside of our traditional oil and gas markets. As of December 31, 2023, 76% of our backlog is reimbursable.
In furtherance of our Board of Directors' commitment to sustainability, our Board of Directors and Governance Committee review and receive reports from management on our sustainability efforts. Human Capital We have built a high-performance culture with purpose and foster a diverse and inclusive workplace as a business imperative because people are our greatest asset.
Human Capital We believe we have built a high-performance culture with purpose and foster a diverse and inclusive workplace as a business imperative because people are our most critical asset.
We call this 10 Table of Contents Safer Together SM . Our 2022 safety performance, calculated in accordance with OSHA record keeping requirements, resulted in a total case incident rate of 0.31 when excluding COVID cases (or 0.34 including COVID cases), which outperformed our goal of less than 0.38 (on the same basis) and well below comparable industry benchmarks.
Our 2023 safety performance, calculated in accordance with OSHA record keeping requirements, resulted in a total case incident rate of 0.29, which outperformed our goal of less than 0.38 an d was well below comparable industry benchmarks.
In addition, through our charitable partners, we delivered nearly 2 million hours of STEM (science, technology, engineering and math) instruction to 200,000 students and teachers to equip students with the skills to participate in tomorrow's workforce. We provided 850,000 meals to the hungry.
Through our charitable partners and the volunteerism of our employees, we delivered nearly 1 million hours of STEM (science, technology, engineering and math) instruction and workforce development to 238,000 individuals to help develop the next-generation workforce. We provided 706,000 meals to the hungry.
For the advanced technologies and manufacturing market, we provide program management and EPC services to a wide variety of companies on a global basis. Our experience spans a wide variety of market segments, including advanced materials, data centers, fast-moving consumer goods, food and beverage, semiconductors, smart batteries and specialty products.
Our experience spans a wide variety of market segments, including advanced materials, data centers, fast-moving consumer goods, food and beverage, semiconductors, smart batteries and specialty products. We specialize in designing projects that incorporate lean manufacturing concepts while also satisfying clients' sustainability goals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to our Preferred Stock and our Equity • Conversion of our CPS will dilute the ownership interest of existing common stockholders or may otherwise depress the price of our common stock. • Our CPS has rights, preferences and privileges that are not held by, and are preferential to the rights of, our common stockholders, which could adversely affect the value of the common stock, our liquidity and our financial condition. • Provisions attendant to our CPS may deter or prevent a business combination that may be favorable to our common stockholders. • If we issue additional equity securities, stockholders' ownership percentages would be diluted. • Delaware law and our charter documents may impede or discourage a takeover or change of control.
Biggest changeRisks Related to our Equity and Corporate Governance Documents • If we issue additional equity securities, stockholders' ownership percentages would be diluted. • Delaware law and our charter documents may impede or discourage a takeover or change of control. Risks Related to our Operations We are vulnerable to the cyclical nature of the markets we serve.
The success of our business is dependent upon being able to attract, develop and retain personnel, including engineers, project management, craft employees and management, who have the necessary and required experience and expertise, and who will perform these services at a reasonable and competitive rate. Competition for these and other experienced personnel is intense.
The success of our business is dependent upon being able to attract, develop and retain personnel, including engineers, project management, craft employees and management, who have the necessary and required experience and expertise, and who will perform these services at a reasonable and competitive rate. Competition for experienced personnel is intense.
In the ordinary course of business in our industry, we execute specific projects and otherwise conduct certain operations through joint ventures, consortiums, partnerships and other collaborative arrangements (collectively, "ventures"). We have various ownership interests in these ventures, with such ownership typically being proportionate to our decision-making and distribution rights.
In the ordinary course of business in our industry, we execute specific projects and otherwise conduct certain operations through joint ventures, partnerships and other collaborative arrangements (collectively, "ventures"). We have various ownership interests in these ventures, with such ownership typically being proportionate to our decision-making and distribution rights.
Extraordinary or force majeure events beyond our control, such as natural or man-made disasters, severe weather conditions, public health crises such as COVID, supply chain disruption, political crises or other catastrophic events, could negatively impact our ability to operate or increase our costs to operate.
Extraordinary or force majeure events beyond our control, such as natural or man-made disasters, severe weather conditions, public health crises, supply chain disruption, political crises or other catastrophic events, could negatively impact our ability to operate or increase our costs to operate.
Loss of the services of, or failure to recruit, qualified technical and management personnel, including a preference for some candidates to work remotely, could limit our ability to successfully complete existing projects and compete for new projects.
Loss of the services of, or failure to recruit, qualified technical and management personnel, including a preference by some candidates to work remotely, could limit our ability to successfully complete existing projects and compete for new projects.
Risks Related to Indebtedness and other Credit Related Risks • Adverse credit and financial market conditions, including increasing interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us. • Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. • We may be unable to win new contract awards if we cannot provide clients with financial assurances.
Risks Related to Indebtedness and other Credit Related Risks • Adverse credit and financial market conditions, including increasing or continued high interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us. • Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. • We may be unable to win new contract awards if we cannot provide clients with financial assurances.
The precautions we take to prevent and detect fraud, misconduct or failures to comply with applicable laws and regulations may not be effective, and we could face u nknown risks or losses.
The policies and precautions we take to prevent and detect fraud, misconduct or failures to comply with applicable laws and regulations may not be effective, and we could face u nknown risks or losses.
Our clients' interest in approving new projects, budgets for capital expenditures and need for our services have in the past been, and may in the future be, adversely affected by, among other things, poor economic conditions (including inflation, slow growth or recession, changes to governments' fiscal or monetary policy and higher interest rates), low oil prices, political uncertainties and currency devaluations.
Our clients' interest in approving new projects, budgets for capital expenditures and need for our services have in the past been, and may in the future be, adversely affected by, among other things, poor economic conditions (including inflation, slow growth or recession, changes to governments' fiscal or monetary policy and higher interest rates), low oil prices, political uncertainties and currency fluctuations.
Compliance with such regulations and the associated potential costs is complicated by various countries and regions following different approaches to the regulation of climate change. Increasing scrutiny and changing expectations from investors with respect to sustainability practices may impose additional costs on us or expose us to reputational or other risks.
Compliance with such regulations and the associated potential costs is complicated by various countries and regions following different approaches to the regulation of climate change. Increasing scrutiny and changing expectations from stakeholders with respect to sustainability practices may impose additional costs on us or expose us to reputational or other risks.
In addition, adverse credit and financial market conditions, including increasing interest rates, also adversely affect our clients' and our partners' borrowing capacity, which could result in contract cancellations or suspensions, project award and execution delays, payment delays or defaults by our clients. These disruptions could materially impact our backlog and profits.
In addition, adverse credit and financial market conditions, including increasing or continued high interest rates, also adversely affect our clients' and our partners' borrowing capacity, which could result in contract cancellations or suspensions, project award and execution delays, payment delays or defaults by our clients. These disruptions could materially impact our backlog and profits.
For example, growing concerns about climate change may result in activism, protests, legislation, international protocols or treaties, regulation or other restrictions on greenhouse gas emissions or that otherwise seek to address climate change that could affect our clients, including those who (a) are involved in the exploration, production or refining of fossil fuels, such as our Energy Solutions clients, (b) emit greenhouse gases through the combustion of fossil fuels or (c) emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods.
For example, growing concerns about climate change may result in activism, protests, legislation, international 21 Table of Contents protocols or treaties, regulation or other restrictions on greenhouse gas emissions or that otherwise seek to address climate change that could affect our clients, including those who (a) are involved in the exploration, production or refining of fossil fuels, such as our Energy Solutions clients, (b) emit greenhouse gases through the combustion of fossil fuels or (c) emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods.
Furthermore, changes to existing trade agreements may impact our business operations. We cannot predict when or whether any of these various legislative and regulatory proposals may become law or what their effect will be on us and our clients. Past and future environmental, safety and health regulations could impose significant additional costs on us that reduce our profits.
Furthermore, changes to existing trade agreements may impact our business operations. We cannot predict when or whether any of these various legislative and regulatory proposals may become law or what their effect will be on us and our clients. Past and future environmental, safety and health regulations could impose significant additional costs on us.
Competition places downward pressure on our contract prices and profit margins, and could cause us to accept contractual terms and conditions that are not 16 Table of Contents normal or customary, thereby increasing the risk of losses on such contracts. Intense competition is expected to continue in our markets, presenting us with challenges to maintain acceptable profit margins.
Competition places downward pressure on our contract prices and profit margins, and could cause us to accept contractual terms and conditions that are not normal or customary, thereby increasing the risk of losses on such contracts. Intense competition is expected to continue in our markets, presenting us with challenges to maintain acceptable profit margins.
The loss of business from a significant client could have a material adverse effect on our business, financial position and results of operations. 23 Table of Contents Our business may be negatively impacted if we are unable to adequately protect intellectual property rights. Our success is impacted by our ability to differentiate our services through our technologies and know-how.
The loss of business from a significant client could have a material adverse effect on our business, financial position and results of operations. Our business may be negatively impacted if we are unable to adequately protect intellectual property rights. Our success is impacted by our ability to differentiate our services through our technologies and know-how.
Failure to comply with applicable laws or regulations or acts of fraud or misconduct could subject us to fines and penalties, loss of security clearance and suspension or debarment from contracting with government agencies, which could weaken our ability to win contracts and have a material adverse impact on our revenues and profits.
Failure to comply with applicable laws or regulations or acts of fraud or misconduct could subject us to fines and penalties, cancellation of contracts, loss of security clearance and suspension or debarment from contracting with government agencies, which could damage our reputation, weaken our ability to win contracts and have a material adverse impact on our revenues and profits.
Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. 14 Table of Contents • We could be adversely impacted if we fail to comply with domestic and international import and export laws. • Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. • New or changing legal requirements could adversely affect us. • Past and future environmental, safety and health regulations could impose significant additional costs on us.
Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. • We could be adversely impacted if we fail to comply with domestic and international import and export laws. • Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. • New or changing legal requirements could adversely affect us. • Past and future environmental, safety and health regulations could impose significant additional costs on us.
In addition, a failure by a venture partner to 17 Table of Contents comply with applicable regulations could negatively impact our business and reputation and could result in fines, penalties, suspension or, in the case of government contracts, even debarment. We are dependent upon suppliers and subcontractors to complete many of our contracts.
In addition, a failure by a venture partner to comply with applicable regulations could negatively impact our business and reputation and could result in fines, penalties, suspension or, in the case of government contracts, even debarment. We are dependent upon suppliers and subcontractors to complete many of our contracts.
A failure by a third-party subcontractor or supplier to comply with applicable laws, rules or regulations could negatively impact our business and reputation and could result in fines, penalties, suspension, or in the case of government contracts, even debarment. Cybersecurity breaches of our systems and IT could adversely impact our ability to operate.
A failure by a third-party subcontractor or supplier to comply with applicable laws, rules or regulations could negatively impact our business and reputation and could result in fines, penalties, suspension, or in the case of government contracts, even debarment. Cybersecurity breaches of our systems and IT could adversely impact us.
Fluor is a Delaware corporation. Various anti-takeover provisions under Delaware law impose impediments on the ability of others to acquire control of us, even if a change of control would be beneficial to our stockholders. In addition, certain provisions of our charters and bylaws may impede or discourage a takeover.
Various anti-takeover provisions under Delaware law impose impediments on the ability of others to acquire control of us, even if a change of control would be beneficial to our stockholders. In addition, certain provisions of our charters and bylaws may impede or discourage a takeover.
Intense competition in the EPC industry can impact our revenue and profits. We serve markets that are highly competitive and in which a large number of multinational companies compete. These markets require substantial resources and investment in technology and skilled personnel. We also see a continuing influx of non-traditional competitors offering below-market pricing while accepting greater risk.
Intense competition in the EPC industry can impact our revenue and profits. We serve markets that are highly competitive and in which a large number of multinational companies compete. These markets require substantial resources, investment in technology and skilled personnel. We have seen a continuing influx of non-traditional competitors offering below-market pricing while accepting greater risk.
To the extent we are unable to meet these competitive challenges, we could lose revenue and experience reduced profitability. Our ability to grow requires us to hire and retain qualified personnel.
To the extent we are unable to meet these competitive challenges, we could experience reduced profitability. Our ability to grow requires us to hire and retain qualified personnel.
Such actions could 24 Table of Contents increase the costs of projects for us and our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services, which would in turn have a material adverse impact on us.
Such actions could increase the costs of projects for us and our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services, which would in turn have a material adverse impact on us.
Furthermore, if we have significant disagreements with our government clients concerning costs incurred, negative publicity could arise, which could adversely affect our industry reputation and our ability to compete for new contracts in the government arena or otherwise. Most U.S. government contracts are awarded through a rigorous competitive process.
Furthermore, if we have significant 19 Table of Contents disagreements with our government clients concerning costs incurred, negative publicity could arise, which could adversely affect our industry reputation and our ability to compete for new contracts in the government arena or otherwise. Most U.S. government contracts are awarded through a rigorous competitive process.
New or changing legal requirements could adversely affect our operating results. Our business and results of operations could be affected by the passage of laws, policies and regulations.
New or changing legal requirements could adversely affect us. Our business and results of operations could be affected by the passage of laws, policies and regulations.
The ventures generally contract directly with our client; however, services may be performed directly by the venture, or may be performed by us, our partners, or a combination thereof. Our success in many markets is impacted by the pre sence or capability of our partners.
The ventures generally contract directly with our client; however, services may be performed directly by the venture, or may be performed by us, our partners, or a combination thereof. 15 Table of Contents Our success in many markets is impacted by the pre sence or capability of our partners.
Foreign currency risks could have an adverse impact on revenue, earnings and/or backlog. Our contracts m ay subject us to foreign currency risk, particularly when project revenue is denominated in a currency different than the expected costs. A project may be denominated in different currencies at various points in time as a project progresses.
Foreign currency risks could have an adverse impact on us. Our contracts m ay subject us to foreign currency risk, particularly when project revenue is denominated in a currency different than the expected costs. Contracts may be denominated in different currencies at various points in time as a project progresses.
Our indebtedness could have important consequences, including but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; 25 Table of Contents • requiring us to dedicate a substantial portion of our cash flow from operations to servicing our debt, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes; and • limiting our flexibility in planning for, or reacting to, challenges and opportunities, and changes in our businesses and the markets in which we operate.
Our indebtedness could have important consequences, including but not limited to: • increasing our vulnerability to general adverse economic and industry conditions; • requiring us to dedicate a substantial portion of our operating cash flow to servicing our debt, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes; and • limiting our flexibility in planning for, or reacting to, challenges and opportunities, and changes in our businesses and the markets in which we operate.
We cannot predict when or whether any of these legislative proposals may become law or what effect will be on us and our clients. We may also incur additional expenses implementing U.S. and international regulations requiring additional disclosures regarding GHG emissions.
We cannot predict when or whether any of these legislative proposals may become law or what effect will be on us and our clients. We may also incur additional expenses implementing U.S. and international regulations requiring additional disclosures regarding GHG emissions and/or broader ESG-related factors.
To the extent these events occur, the total cost to the project (including any liquidated damages we become liable to pay) could be material and could, in some circumstances, equal or exceed the full value of the contract. In such events, our financial condition or results of operations could be materially and negatively impacted.
To the extent these events occur, the total cost to the project (including any liquidated damages) could be material and could, in some circumstances, equal or exceed the full value of the contract. In such events, our financial condition or results of operations could be materially and negatively impacted.
Industries served by that segment and many of the others we serve have historically been and will continue to be vulnerable to general downturns, which in turn could materially and adversely affect the demand for our services. Our revenue and earnings are largely dependent on new awards, which are driven by our clients.
Industries served by that segment and many of the others we serve have historically been and will continue to be vulnerable to general downturns, which in turn could materially and adversely affect the demand for our services. 13 Table of Contents Our revenue and earnings are largely dependent on new awards.
These risks could result in project delays, cost overruns or other problems and can include the following: • Incorrect assumptions related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation on lump-sum contracts; • Unanticipated technical problems, including design or engineering issues; • Inaccurate representations of site conditions and unanticipated changes in the project execution plan; • Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; • Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; • Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; • Reliance on historical cost and/or execution data that is not representative of current economic and/or execution conditions; • Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs or unforeseen increases in the cost of labor; • Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of import tariffs; • Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; • Failure to properly assess and update appropriate risk mitigation strategies and measures; • Difficulties related to the performance of our clients, partners, subcontractors, suppliers or other third parties; • Delays or productivity issues caused by weather; and • Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals.
These risks could result in project delays, cost overruns or other problems and can include the following: • Evolving estimates related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation on lump-sum contracts; • Unanticipated technical problems, including design or engineering issues; • Inaccurate representations of site conditions and unanticipated changes in the project execution plan; • Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; • Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; • Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; • Reliance on historical cost and/or execution data that is not representative of current economic and/or execution conditions; • Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs or unforeseen increases in the cost of labor; • Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of import tariffs; • Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; • Failure to properly assess and update appropriate risk mitigation strategies and measures; • Poor performance of our clients, partners, subcontractors, suppliers or other third parties; • Delays or productivity issues caused by weather; and • Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals. 14 Table of Contents These and other risks have in the past, and may in the future, result in our failure to achieve contractual cost or schedule commitments, safety performance, overall client satisfaction or other performance criteria.
To the extent that our international business is affected by unexpected and adverse foreign economic and political conditions and risks, we may experience project disruptions and losses. 19 Table of Contents Our backlog is subject to unexpected adjustments and cancellations.
To the extent that our international business is affected by unexpected and adverse foreign economic and political conditions and risks, we may experience project disruptions and losses. Our backlog is subject to unexpected adjustments and cancellations.
Systems implementation disruption and any other IT disruption, if not anticipated and appropriately mitigated, could have a material adverse effect on our business. We have international operations that are subject to foreign economic and political uncertainties and risks. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses.
Disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business. We have international operations that are subject to foreign economic and political uncertainties and risks. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses.
If the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in a lump-sum contract, we may suffer losses on these contracts.
If the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in lump-sum contracts, we may suffer losses on them.
Areas requiring significant estimates by our management include: • recognition of revenue, costs, profits or losses; • recognition of revenue related to project incentives, awards or other variable consideration we expect to receive; • recognition of recoveries under contract change orders or claims; • estimated amounts for project losses, warranty costs, contract close-out or other costs; • collectability of receivables and the need and amount of any allowance; • asset valuations; • income tax provisions and related valuation allowances; • determination of expense and potential liabilities under pension and other post-retirement benefit programs; and • accruals for other estimated liabilities, including litigation and insurance reserves and receivables.
Areas requiring significant estimates by our management include: • determination of profitability; 18 Table of Contents • recognition of project incentives, awards, change orders, claims or other variable consideration we expect to receive; • estimated amounts for project losses, warranty costs, contract close-out or other costs; • collectability of receivables and the need and amount of any allowance; • income tax provisions and related valuation allowances; • determination of potential liabilities under pension and other post-retirement benefit programs; and • accruals for other estimated liabilities, including litigation and insurance reserves and receivables.
However, there is no assurance that our internal controls will always protect us from the possible reckless or criminal acts committed by our employees or agents.
However, there is no assurance that our internal controls will always protect us from the possible reckless or criminal acts 24 Table of Contents committed by our employees or agents.
Climate change related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions, and other natural disasters, may have a long-term impact on our business, financial condition and results of operation.
Climate change, natural disasters and related environmental issues could have a material adverse impact on us. Climate-related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions, and other natural disasters, may have a long-term impact on our business, financial condition and results of operation.
You should read this summary together with the more detailed description of each risk factor contained below. 13 Table of Contents Risks Related to our Operations • We are vulnerable to the cyclical nature of the markets we serve. • Our revenue and earnings are largely dependent on new awards, which are driven by our clients. • The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. • Intense competition in the EPC industry can impact our revenue and profits. • Our ability to grow requires us to hire and retain qualified personnel. • The success of teaming arrangements and joint ventures depends on the satisfactory performance by our venture partners over whom we may have little or no control, and the failure of those partners to perform their obligations could impose additional obligations on us that could have a material impact on us. • We are dependent upon suppliers and subcontractors to complete many of our contracts. • Cybersecurity breaches of our systems and IT could adversely impact us. • Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate. • We have international operations that are subject to foreign economic and political uncertainties and risks.
Risks Related to our Operations • We are vulnerable to the cyclical nature of the markets we serve. • Our revenue and earnings are largely dependent on new awards. • The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. • Intense competition in the EPC industry can impact our revenue and profits. • Our ability to grow requires us to hire and retain qualified personnel. • The success of teaming arrangements and joint ventures depends on the satisfactory performance by our venture partners over whom we may have little or no control, and the failure of those partners to perform their obligations could impose additional obligations on us that could have a material impact on us. • We are dependent upon suppliers and subcontractors to complete many of our contracts. • Cybersecurity breaches of our systems and IT could adversely impact us. • Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate. • We have international operations that are subject to foreign economic and political uncertainties and risks.
Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses. • Our backlog is subject to unexpected adjustments and cancellations. • • Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. • Our businesses could be materially and adversely affected by events outside of our control. • We must successfully manage the demands, supply and operational challenges associated with the effects of widespread health concerns, such as COVID. • Our actual results could differ from the assumptions and estimates used to prepare our financial statements. • If we experience delays or defaults in client payments, we could be negatively impacted. • Our U.S. government contracts and contracting rights may be terminated or otherwise adversely impacted at any time, and our inability to win or renew government contracts during regulated procurement processes could harm our operations and reduce our projects and revenues. • Our effective tax rate and tax positions may vary. • It can be very difficult and expensive to obtain the insurance we need for our business operations. • If we do not have adequate indemnification for our nuclear services, it could adversely affect our business and financial condition. • Foreign currency risks could have an adverse impact on us. • The loss of one or a few clients could have an adverse effect on us. • Our business may be negatively impacted if we are unable to adequately protect intellectual property rights. • Our results of operations could be adversely affected as a result of asset impairments. • Climate change and related environmental issues could have a material adverse impact on our business, financial condition and results of operation. • Increasing scrutiny and changing expectations from investors with respect to sustainability practices may impose additional costs on us or expose us to reputational or other risks.
Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses. • Our backlog is subject to unexpected adjustments and cancellations. • Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. 12 Table of Contents • Our businesses could be materially and adversely affected by events outside of our control. • Our actual results could differ from the estimates used to prepare our financial statements. • If we experience delays or defaults in client payments, we could be negatively impacted. • Our U.S. government contracts and contracting rights may be terminated or otherwise adversely impacted at any time, and our inability to win or renew government contracts during regulated procurement processes could harm our operations and reduce our projects and revenues. • Our effective tax rate and tax positions may vary. • It can be very difficult and expensive to obtain the insurance we need for our business operations. • If we do not have adequate indemnification for our nuclear services, it could adversely affect our business and financial condition. • Foreign currency risks could have an adverse impact on us. • The loss of one or a few clients could have an adverse effect on us. • Our business may be negatively impacted if we are unable to adequately protect intellectual property rights. • Climate change, natural disasters and related environmental issues could have a material adverse impact on us. • Increasing scrutiny and changing expectations from stakeholders with respect to sustainability practices may impose additional costs on us or expose us to reputational or other risks. • We may be unsuccessful in implementing our strategic initiatives.
Operating in the international marketplace exposes us to a number of risks including: • abrupt changes in government policies, laws, treaties (including those impacting trade), regulations or leadership; • embargoes or other trade restrictions, including sanctions; • restrictions on currency movement; • tax or tariff changes and withholding requirements; • currency exchange rate fluctuations; • changes in labor conditions and difficulties in staffing and managing international operations, including logistical and communication challenges; • U.S. government trade or other policy changes in relation to the foreign countries in which we operate; • other regional, social, political and economic instability, including recessions and other economic crises; • natural disasters and public health crises, including pandemics; • expropriation and nationalization of our assets; • international hostilities, such as the ongoing conflict between Russia and Ukraine, which has resulted in the imposition by the U.S. and other nations of restrictive actions against Russia and certain banks, companies and individuals; and • unrest, civil strife, acts of war, terrorism and insurrection.
Operating in the international marketplace exposes us to a number of risks including: • abrupt changes in government policies, laws, treaties (including those impacting trade), regulations or leadership; • embargoes or other trade restrictions, including sanctions; • restrictions on currency movement; • tax or tariff changes and withholding requirements; • currency exchange rate fluctuations; • changes in labor conditions and difficulties in staffing and managing international operations, including logistical and communication challenges; • U.S. government trade or other policy changes in relation to the foreign countries in which we operate; • other regional, social, political and economic instability, including recessions and other economic crises; • natural disasters and public health crises, including pandemics; • expropriation and nationalization of our assets; • international hostilities, such as the ongoing conflict between Russia and Ukraine, which has resulted in the imposition by the U.S. and other nations of restrictive actions against Russia and certain banks, companies and individuals; and • unrest, civil strife, acts of war, terrorism and insurrection. 17 Table of Contents The lack of a well-developed legal system in some of the countries where we operate may make it difficult to enforce our contractual rights or to defend ourself against claims made by others.
In addition, our clients may require that we adhere to varying ESG standards. Our failure to comply with investor or client standards, which are evolving, or if we are perceived to not have responded appropriately to the growing concern for these issues could also cause reputational harm to our business and could have a material adverse effect on us.
Our failure to comply with investor or client standards, which are evolving, or if we are perceived to not have responded appropriately to the growing concern for these issues could also cause reputational harm to our business and could have a material adverse effect on us.
Estimates are based on management's reasonable assumptions and experience, but are only estimates. Our actual business and financial results could differ from our estimates of such results due to changes in facts and circumstances, which could have a material negative impact on our financial condition and reported results of operations.
Estimates are based on management's reasonable assumptions and experience, but are only estimates. Our actual business and financial results could differ from our estimates of such results due to changes in facts and circumstances, which could have a material negative impact on our financial condition and results of operations. Further, we recognize contract revenue as work on a contract progresses.
Further, we recognize contract revenue as work on a contract progresses. The cumulative amount of revenue recorded on a contract at any point is that percentage of total estimated revenue that costs incurred to date bear to estimated total costs. Accordingly, contract revenue and total cost estimates are reviewed and revised as the work progresses.
The cumulative amount of revenue recorded on a contract at any point is that percentage of total estimated revenue that costs incurred to date bear to estimated total costs. Accordingly, contract revenue and total cost estimates are reviewed and revised as the work progresses. Adjustments are reflected in contract revenue in the period when such estimates are revised.
If we or our employees are unable to obtain or retain necessary security clearances, we may not be able to win new business, and our existing government clients could terminate their contracts with us or decide not to renew them.
If we or our employees are unable to obtain or retain necessary security clearances, we may not be able to win new business, and our existing government clients could terminate their contracts with us or decide not to renew them. Our effective tax rate and tax positions may vary. We are subject to income taxes where we do business.
There is no guarantee that current oil prices will be sustained, and the timing and extent of any future improvements in demand remain uncertain.
There is no guarantee that current oil prices will be sufficient to justify clients' capital expenditures, and the timing and extent of any future improvements in demand remain uncertain.
Our actual results could differ from the assumptions and estimates used to prepare our financial statements. In preparing our financial statements, we make estimates and assumptions that affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities.
In preparing our financial statements, we make estimates and assumptions that affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities.
In other cases, our fee will not change but we will have to continue to perform work without additional fees until the performance criteria is achieved. We may also be required to pay liquidated damages if we fail to complete a project on schedule.
As a result, we may receive lower fees or lose our ability to earn incentive fees. In other cases, our fee will not change but we will have to continue to perform work without additional fees until the performance criteria is achieved. We may also incur liquidated damages if we fail to complete a project on schedule.
We may be required to incur significant costs to protect against or alleviate damage caused by systems interruptions and delays, which could have a material adverse effect on our business and results of operations.
While we have and require the maintenance of reasonable safeguards designed to protect against unavailability or loss of data, these safeguards may not be sufficient. We may be required to incur significant costs to protect against or alleviate damage caused by systems interruptions and delays, which could have a material adverse effect on our business and results of operations.
We may in the future issue additional equity securities to pay for potential acquisitions or to otherwise fund our corporate initiatives. If we do issue additional equity securities, the issuance may dilute our earnings per share and stockholders' percentage ownership. Delaware law and our charter documents may impede or discourage a takeover or change of control.
If we do issue additional equity securities, the issuance may dilute our earnings per share and stockholders' percentage ownership. Delaware law and our charter documents may impede or discourage a takeover or change of control. Fluor is a Delaware corporation.
A few clients, including the U.S. government, state governments and governmental agencies comprise a significant portion of our revenue. Although we have long-standing relationships with many of our significant clients, our clients may unilaterally reduce, fail to renew or terminate their contracts with us at any time. Most of our contracts have "termination for convenience" provisions in them.
Although we have long-standing relationships with many of our significant clients, our clients may unilaterally reduce, fail to renew or terminate their contracts with us at any time. Most of our contracts have "termination for convenience" provisions in them.
Unplanned interruptions could result from natural disasters, power loss, telecommunications failures, acts of war or terrorism, computer viruses, physical or electronic break-ins and similar events or disruptions.
Unplanned interruptions could result from natural disasters, power loss, telecommunications failures, acts of war or terrorism, computer viruses, malicious code, physical or electronic security breaches, intentional or inadvertent user misuse or error and similar events or disruptions.
For example, our risk exposure with respect to a project in an early development phase, such as engineering, will generally be less than our risk exposure on a project that is in the construction phase.
Our level of exposure to these risks may vary with each project, depending on the location of the project and its stage of completion. For example, our risk exposure with respect to a project in an early development phase, such as engineering, will generally be less than our risk exposure on a project that is in the construction phase.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters. In addition, we expect that there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters.
Divesting businesses involves risks and uncertainties, such as the difficulty separating assets related to such businesses from the businesses we retain, employee distraction, the need to obtain regulatory approvals and other third-party consents, which potentially disrupts customer and vendor relationships, and the fact that we may be subject 28 Table of Contents to additional tax obligations or loss of certain tax benefits.
Divesting businesses involves risks and uncertainties, such as the difficulty separating assets related to such businesses from the businesses we retain, employee distraction, and the need to obtain regulatory approvals and other third-party consents, which potentially disrupts customer and vendor relationships.
A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges, and suspensi on or debarment from participation in U.S. government contracts. 27 Table of Contents Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one of our employees, agents or partners could have a significant negative impact on our business and reputation.
A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges, and suspensi on or debarment from participation in U.S. government contracts. Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts.
In such instances, we may have limited control over venture decisions and actions, including ICFR, which may have an impact on our business. If internal control problems arise within a venture, or if our venture partners have financial or operational issues, there could be a material impact on our business, financial condition or results of operations.
If internal control problems arise within a venture, or if our venture partners have financial or operational issues, there could be a material impact on our business, financial condition or results of operations.
We may attempt to minimize our exposure to foreign currency risk by obtaining contract provisions that protect us from foreign currency fluctuations and/or by implementing hedging strategies utilizing derivatives. However, these actions may not always eliminate all foreign currency risk, and as a result, our profitability could be affected.
We may attempt to minimize our exposure to foreign currency risk by obtaining contract provisions that protect us from foreign currency fluctuations and/or by implementing hedging strategies utilizing derivatives.
Our ability to successfully execute these initiatives is subject to various risks and uncertainties, including regulatory intervention, which may negatively impact the realization of expected benefits. Our failure to realize the anticipated benefits, which may be due to our inability to execute, competition, economic conditions, and other risks described herein, could have a material adverse effect on us.
Our failure to realize the anticipated benefits, which may be due to our inability to execute, competition, economic conditions, and other risks described herein, could have a material adverse effect on us.
Summary Risk Factors The following summarizes the risks and uncertainties that could materially adversely affect our business, financial condition, results of operation and stock price.
Summary Risk Factors The following summarizes the risks and uncertainties that could materially adversely affect our business, financial condition, results of operation and stock price. You should read this summary together with the more detailed description of each risk factor contained below.
Historically, we have had strong surety bonding capacity due to our credit ratings, but bonding is provided at the surety's sole discretion. In addition, because of the overall limitations in worldwide bonding capacity, we may find it difficult to access sufficient surety bonding capacity to meet our total surety bonding needs.
In addition, because of the overall limitations in worldwide bonding capacity, we may find it difficult to access sufficient surety bonding capacity to meet our total surety bonding needs.
Our U.S. government clients may terminate or decide not to renew our contracts with little or no prior notice. In addition, U.S. government contracts are subject to specific regulations such as the Federal Acquisition Regulation ("FAR"), the Truth in Negotiations Act, the Cost Accounting Standards ("CAS"), the Service Contract Act and Department of Defense security regulations.
In addition, U.S. government contracts are subject to specific regulations such as the Federal Acquisition Regulation ("FAR"), the Truth in Negotiations Act, the Cost Accounting Standards ("CAS"), the Service Contract Act and Department of Defense security regulations. Failure to comply with any of these regulations and other government requirements may result in contract price adjustments, financial penalties or contract termination.
Delays in client payments may require us to make a working capital investment, which could impact our cash flows and liquidity. If a client fails to pay invoices on a timely basis or defaults, there could be a material adverse effect on our results of operations or liquidity.
If a client fails to pay invoices on a timely basis or defaults, there could be a material adverse effect on our results of operations or liquidity.
Investors and clients have increasingly focused on the ESG practices of companies, including practices with respect to human capital, emissions and environmental impact and political spending. While we have programs and initiatives in place related to our ESG practices, investors may decide to reallocate capital or to not commit capital as a result of their assessment of our practices.
While we have programs and initiatives in place related to our ESG practices, investors may decide to reallocate capital or to not commit capital as a result of their assessment of our practices. In addition, our clients may require that we adhere to varying ESG standards.
The DCAA reviews the adequacy of, and our compliance with, our internal controls and policies (including our labor, billing, accounting, purchasing, estimating, compensation and management information systems). The DCAA also has the ability to review how we have accounted for costs under the FAR and CAS. The DCAA presents its findings to the Defense Contract Management Agency ("DCMA").
The DCAA also has the ability to review how we have accounted for costs under the FAR and CAS. The DCAA presents its findings to the Defense Contract Management Agency ("DCMA").
We cannot predict the outcome of changing trade policies or other unanticipated economic or political conditions, nor can we predict the timing, strength or duration of any worldwide economic recovery or downturn or in the markets that we serve. 15 Table of Contents The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us.
The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us.
Delays in receiving necessary approvals, permits or licenses, the failure to maintain sufficient compliance programs, and other problems encountered during construction (including changes to such regulatory requirements) could have an adverse effect on us.
Delays in receiving necessary approvals, permits or licenses, the failure to maintain sufficient compliance programs, and other problems encountered during construction (including changes to such regulatory requirements) could have an adverse effect on us. 25 Table of Contents A substantial portion of our business is generated either directly or indirectly as a result of federal, state, local and foreign laws and regulations related to environmental matters.
Our effective tax rate and tax positions may vary. We are subject to income taxes where we do business. A change in tax laws, treaties or regulations, or their interpretation, in any country in which we operate could change our overall tax rate, which could have a material impact on our results of operations.
A change in tax laws, treaties or regulations, or their interpretation, in any country in which we operate could change our overall tax rate, which could have a material impact on our results of operations. In addition, significant judgment is required in determining our worldwide provision for income taxes and our judgments could prove inaccurate.
Our monetary assets and liabilities denominated in nonfunctional currencies are subject to remeasurement. In addition, the U.S. dollar value of our backlog may from time to time increase or decrease significantly due to foreign currency volatility. The loss of one or a few clients could have an adverse effect on us.
However, these actions may not always eliminate all foreign currency risk, and as a result, our profitability could be affected. 20 Table of Contents Our monetary assets and liabilities denominated in nonfunctional currencies are subject to remeasurement. In addition, the U.S. dollar value of our backlog may from time to time increase or decrease significantly due to foreign currency volatility.
If our operating performance declines, or if we are unable to comply with any covenant, we may need to obtain amendments to our credit agreements or waivers from the lenders to avoid default. These factors could have a material adverse effect on us. We may be unable to win new contract awards if we cannot provide clients with financial assurances.
If our operating performance declines, or if we are unable to comply with any covenant, we may need to obtain amendments to our credit agreements or waivers from the lenders to avoid default.
A significant 22 Table of Contents reduction in federal government spending or a change in budgetary priorities could reduce demand for our services, cancel or delay federal projects, and result in the closure of federal facilities and significant personnel reductions, which could have a material adverse effect on our results of operations and financial condition.
A significant reduction in federal government spending or a change in budgetary priorities could reduce demand for our services, cancel or delay federal projects, and result in the closure of federal facilities and significant personnel reductions. Changes in U.S. government priorities, which can occur due to policy changes or economic changes, could adversely impact our revenues.
Furthermore, while we maintain insurance that specifically covers cybersecurity threats, our coverage may not sufficiently cover all types of losses or claims that may arise.
While we maintain insurance that specifically covers cybersecurity threats, our coverage may not sufficiently cover all types of losses or claims that we might experience. Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate.
In many of the countries in which we engage in joint ventures, it may be difficult to enforce our contractual rights under the applicable joint venture agreement. At times, we also participate in ventures where we are not a controlling party or where we team with unaffiliated parties on a particular project.
In many of the countries in which we engage in joint ventures, it may be difficult to enforce our contractual rights under the applicable joint venture agreement. At times, we also participate in ventures with other parties. In such instances, we may have limited control over venture decisions and actions, including ICFR, which may have an impact on our business.
Changes in U.S. government priorities, which can occur due to policy changes or economic changes, could adversely impact our revenues. The U.S. government is under no obligation to maintain program funding at any specific level, and funds for a program may even be eliminated.
The U.S. government is under no obligation to maintain program funding at any specific level, and funds for a program may even be eliminated. Our U.S. government clients may terminate or decide not to renew our contracts with little or no prior notice.
W e may retain exposure on financial or performance guarantees and other contractual, employment, pension and severance obligations, and potential liabilities that may arise under law because of the disposition or the subsequent failure of an acquirer.
W e may retain exposure on financial or performance guarantees and other contractual, employment, pension and severance obligations, and potential liabilities that may arise under law because of the disposition or the subsequent failure of an acquirer. 22 Table of Contents Risks Related to Indebtedness and other Credit Related Risks Adverse credit and financial market conditions, including increasing or continued high interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us.
It is a common industry practice for clients to require us to provide surety bonds, letters of credit, bank guarantees or other forms of financial assurance as credit enhancements. Surety bonds, letters of credit or guarantees indemnify our clients if we fail to perform our contractual obligations.
These factors could have a material adverse effect on us. 23 Table of Contents We may be unable to win new contract awards if we cannot provide clients with financial assurances. It is a common industry practice for clients to require us to provide surety bonds, letters of credit, bank guarantees or other forms of financial assurance as credit enhancements.
In addition, if we cannot complete our contracts on time, we may be subject to potential liability claims by our clients, which may reduce our profits and result in losses. We must successfully manage the demands, supply and operational challenges associated with the effects of widespread health concerns, such as COVID.
In addition, if we cannot complete our contracts on time, we may be subject to potential liability claims by our clients, which may reduce our profits and result in losses. Our actual results could differ from the estimates used to prepare our financial statements.
Because of the nature of our contracts, we sometimes commit resources to projects prior to receiving payments from clients in amounts sufficient to cover expenditures as they come due. Some of our clients have found it difficult to pay our invoices timely, increasing the risk that our accounts receivable could become uncollectible and ultimately be written off.
Such adjustments could be material and could result in reduced profitability. If we experience delays or defaults in client payments, we could be negatively impacted. Because of the nature of our contracts, we sometimes commit resources to projects prior to receiving payments from clients in amounts sufficient to cover expenditures as they come due.
In addition, nationalization, military action or continued unrest could impact the supply or pricing of oil, disrupt our operations in the region and elsewhere, and increase our security costs. Our level of exposure to these risks may vary with each project, depending on the location of the project and its stage of completion.
We operate in locations where there is a significant amount of political risk. In addition, nationalization, military action or continued unrest could impact the supply or pricing of oil, disrupt our operations in the region and elsewhere, and increase our security costs.
Failure to comply with any of these regulations and other government requirements may result in contract price adjustments, financial penalties or contract termination. Our U.S. government contracts are also subject to audits, cost reviews and investigations by U.S. government oversight agencies such as the U.S. Defense Contract Audit Agency (the "DCAA").
Our U.S. government contracts are also subject to audits, cost reviews and investigations by U.S. government oversight agencies such as the U.S. Defense Contract Audit Agency (the "DCAA"). The DCAA reviews the adequacy of, and our compliance with, our internal controls and policies (including our labor, billing, accounting, purchasing, estimating, compensation and management information systems).
In certain cases, our clients for our large projects are project-specific entities that do not have significant assets other than their interests in the project. From time to time, it is difficult for us to collect payments owed to us by these clients. In addition, clients may request extension of the payment terms otherwise agreed to under our contracts.
From time to time, it is difficult for us to collect payments owed to us by these clients. In addition, clients may request extension of the payment terms otherwise agreed to under our contracts. Delays in client payments may require us to make a working capital investment, which could impact our cash flows and liquidity.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Major Facilities Our operations are conducted at both owned and leased properties in U.S. and foreign locations totaling approximately 7 million re ntable square feet, up 0.2 million square feet from last year. Our executive offices are located at 6700 Las Colinas Boulevard, Irving, Texas.
Biggest changeItem 2. Properties Major Facilities Our operations are conducted at both owned and leased properties in U.S. and foreign locations totaling approximately 7.1 million rentable square feet, which is comparable to last year. Our executive offices are located at 6700 Las Colinas Boulevard, Irving, Texas.
While we have operations worldwide, the following summarizes our more significant existing facilities: 30 Table of Contents Location Interest United States: Greenville, South Carolina Owned Houston (Sugar Land), Texas Leased Irving, Texas (Corporate Headquarters) Owned Southern California (Aliso Viejo and Long Beach) Leased Canada: Calgary, Alberta Owned Vancouver, British Columbia Leased Latin America: Santiago, Chile Owned and Leased Europe, Africa and Middle East: Al Khobar, Saudi Arabia Owned Amsterdam, the Netherlands Owned Farnborough, England Owned and Leased Gliwice, Poland Owned Johannesburg, South Africa Leased Utrecht, the Netherlands Leased Asia/Asia Pacific: Manila, the Philippines Owned and Leased New Delhi, India Leased Perth, Australia Leased Shanghai, China Leased In addition, we lease or own a number of individually insignificant offices, warehouses and equipment yards strategically located throughout the world.
While we have operations worldwide, the following summarizes our more significant existing facilities: 27 Table of Contents Location Interest United States: Greenville, South Carolina Owned Houston & Sugar Land, Texas Leased Irving, Texas (Corporate Headquarters) Owned Southern California (Aliso Viejo and Long Beach) Leased Canada: Calgary, Alberta Owned Vancouver, British Columbia Leased Latin America: Santiago, Chile Owned and Leased Europe, Africa and Middle East: Al Khobar, Saudi Arabia Owned Amsterdam, the Netherlands Owned Farnborough, England Owned and Leased Gliwice, Poland Owned Johannesburg, South Africa Leased Utrecht, the Netherlands Leased Asia and Pacific Region: Manila, the Philippines Owned and Leased New Delhi, India Leased Perth, Australia Leased Shanghai, China Leased In addition, we lease or own a number of individually insignificant offices, warehouses and equipment yards strategically located throughout the world.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor information on legal proceedings and matters in dispute, see the Consolidated Financial Statements in this report. Item 4. Mine Safety Disclosures None. 31 Table of Contents PART II
Biggest changeFor information on legal proceedings and matters in dispute, see the Consolidated Financial Statements in this report. Item 4. Mine Safety Disclosures None. 28 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDollars, for the calendar years ended December 31, 2018, 2019, 2020, 2021 and 2022 of $100 invested on December 31, 2017 in our common stock, the S&P MidCap 400 Index and the Dow Jones Heavy Construction Industry Group Index. 32 Table of Contents Year Ended December 31, 2017 2018 2019 2020 2021 2022 Fluor Corporation $ 100.00 $ 63.39 $ 38.34 $ 32.78 $ 50.84 $ 71.13 S&P MidCap 400 Index $ 100.00 $ 88.90 $ 112.17 $ 127.48 $ 159.01 $ 138.18 Dow Jones Heavy Construction Industry Group Index $ 100.00 $ 73.89 $ 99.12 $ 120.35 $ 180.21 $ 207.33
Biggest changeDollars, for the calendar years ended December 31, 2019, 2020, 2021, 2022 and 2023 of $100 invested on December 31, 2018 in our common stock, the S&P MidCap 400 Index and the Dow Jones Heavy Construction Industry Group Index. 29 Table of Contents Year Ended December 31, 2018 2019 2020 2021 2022 2023 Fluor Corporation $ 100.00 $ 58.07 $ 51.70 $ 80.19 $ 112.21 $ 126.81 S&P MidCap 400 Index $ 100.00 $ 126.09 $ 143.39 $ 178.85 $ 155.42 $ 180.90 Dow Jones Heavy Construction Industry Group Index $ 100.00 $ 133.82 $ 162.88 $ 243.89 $ 280.60 $ 337.69 Item 6. [Reserved]
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs (1) October 1–October 31, 2022 — $ — — 10,513,093 November 1–November 30, 2022 — — — 10,513,093 December 1–December 31, 2022 — — — 10,513,093 Total — $ — — _______________________________________________________________________________ (1) The share repurchase program, as amended, totals 34,000,000 shares.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs (1) October 1–October 31, 2023 — $ — — 10,513,093 November 1–November 30, 2023 — — — 10,513,093 December 1–December 31, 2023 — — — 10,513,093 Total — $ — — _______________________________________________________________________________ (1) The share repurchase program, as amended, totals 34,000,000 shares.
Issuer Purchases of Equity Securities The following table provides information for the three months ended December 31, 2022 about purchases by the company of equity securities that have been registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Issuer Purchases of Equity Securities The following table provides information for the 3 months ended December 31, 2023 about purchases by the company of equity securities that have been registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Any future cash dividends will depend upon our results of operations, financial condition, cash requirements and such other factors as our Board of Directors may deem relevant. At January 31, 2023, there were 4,041 st ockholders of record of our common stock.
Any future cash dividends will depend upon our results of operations, financial condition, cash requirements and such other factors as our Board of Directors may deem relevant. At January 31, 2024, there were 3,842 st ockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAMECO-North America 95 146 112 Investments in partnerships and joint ventures (53) (80) (29) Other 19 (9) 5 Investing cash flow (78) (122) (41) FINANCING CASH FLOW Proceeds from NuScale de-SPAC transaction 341 — — Proceeds from sale of NuScale interest 107 — — Proceeds from issuance of CPS — 582 — Purchases and retirement of debt (41) (525) — Debt extinguishment costs — (2) — Dividends paid (on CPS in 2022 and 2021 and common stock in 2020) (39) (19) (29) Distributions paid to NCI (60) (109) (23) Capital contributions by NCI 21 202 110 Other (14) (7) (10) Financing cash flow 315 122 48 Effect of exchange rate changes on cash (38) (15) 9 Increase (decrease) in cash and cash equivalents 230 10 202 Cash and cash equivalents at beginning of year 2,209 2,199 1,997 Cash and cash equivalents at end of year $ 2,439 $ 2,209 $ 2,199 Cash paid during the year for: Interest $ 54 $ 90 $ 66 Income taxes (net of refunds) 99 75 65 Operating Activities Cash flows from operating activities result primarily from our EPC activities and are affected by our earnings level and changes in working capital associated with such activities.
Biggest changeYear Ended December 31, (in millions) 2023 2022 2021 OPERATING CASH FLOW $ 212 $ 31 $ 25 INVESTING CASH FLOW Proceeds from sales and maturities (purchases) of marketable securities (141) (64) (104) Capital expenditures (106) (75) (75) Proceeds from sales of assets (net of cash divested) (5) 95 146 Investments in partnerships and joint ventures (33) (53) (80) Other 8 19 (9) Investing cash flow (277) (78) (122) FINANCING CASH FLOW Proceeds from issuance of 2029 Notes, net of issuance costs 560 — — Capped call transactions related to 2029 Notes (73) — — Purchases and retirement of debt (249) (41) (525) Proceeds from NuScale de-SPAC transaction — 341 — Proceeds from sale of NuScale interest — 107 — Proceeds from issuance of CPS — — 582 Dividends paid on CPS (29) (39) (19) Make-whole payment on conversion of CPS (27) — — Distributions paid to NCI (53) (60) (109) Capital contributions by NCI 10 21 202 Other (12) (14) (9) Financing cash flow 127 315 122 Effect of exchange rate changes on cash 18 (38) (15) Increase in cash and cash equivalents 80 230 10 Cash and cash equivalents at beginning of year 2,439 2,209 2,199 Cash and cash equivalents at end of year $ 2,519 $ 2,439 $ 2,209 Cash paid during the year for: Interest $ 53 $ 54 $ 90 Income taxes (net of refunds) 169 99 75 Noncash investing and financing activities: Marketable securities transferred to trustee to discharge the 2024 Notes $ 262 $ — $ — Debt assumed by buyer of Stork Latin America 19 — — 38 Table of Contents Operating Activities Cash flows from operating activities result primarily from our EPC activities and are affected by our earnings levels and changes in working capital associated with such activities.
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.
Working capital requirements also vary by project and the payment 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.
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 December 31, 2022, over 10 million shares could still be purchased under the existing stock repurchase program, although we do not have any immediate intent to begin such repurchases.
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 December 31, 2023, over 10 million shares could still be purchased under the existing stock repurchase program, although we do not have any immediate intent to begin such repurchases.
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. 40 Table of Contents In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships).
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. 37 Table of Contents In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships).
We are often required to use fair value measurement techniques with inputs that require the use of estimates and involve significant judgment.
We are required to use fair value measurement techniques with inputs that require the use of estimates and involve significant judgment.
These circumstances include: • Impairment testing of goodwill and indefinite-lived intangibles when quantitative analysis is deemed necessary • Impairment testing of long-lived assets when impairment indicators are present • Impairment testing of investments as part of other than temporary impairment assessments when impairment indicators are present • Fair value assessments of businesses held for sale that are reported at fair value less cost to sell 39 Table of Contents When performing quantitative fair value or impairment evaluations, we estimate the fair value of our assets by considering the results of either or both income-based and market-based valuation approaches.
These circumstances include: • Impairment testing of goodwill and indefinite-lived intangibles when quantitative analysis is deemed necessary • Impairment testing of long-lived assets when impairment indicators are present • Impairment testing of investments as part of other than temporary impairment assessments when impairment indicators are present • Fair value assessments of businesses held for sale that are reported at fair value less cost to sell When performing quantitative fair value or impairment evaluations, we estimate the fair value of our assets by considering the results of either or both income-based and market-based valuation approaches.
We did not consider any cash to be permanently reinvested outside the U.S. as of December 31, 2022 and 2021, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.
We did not consider any cash to be permanently reinvested outside the U.S. as of December 31, 2023 and 2022, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.
The weighted-average cost of capital is comprised of the cost of equity and the cost of debt with a weighting for each that reflects our current capital structure which can be significantly impacted by volatility in interest rates as seen during 2022.
The weighted-average cost of capital is comprised of the cost of equity and the cost of debt with a weighting for each that reflects our current capital structure which can be significantly impacted by volatility in interest rates as seen during 2023.
Under the income approach, we prepare a discounted cash flow valuation model using recent forecasts and compare the estimated fair value of each asset to its carrying value. Cash flow forecasts are discounted using the appropriate weighted-average cost of capital at the date of evaluation.
Under the income approach, we prepare a discounted cash flow valuation model using recent forecasts and compare the estimated fair value of each asset 36 Table of Contents to its carrying value. Cash flow forecasts are discounted using the appropriate weighted-average cost of capital at the date of evaluation.
These amounts (which totaled $706 million and $630 million as of December 31, 2022 and 2021, 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.
These amounts (which totaled $491 million and $706 million as of December 31, 2023 and 2022, 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 $102 million and $127 million as of December 31, 2022 and 2021, 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.
We also consider the extent to which client advances (which totaled $80 million and $102 million as of December 31, 2023 and 2022, 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.
Cash balances as of December 31, 2022 and 2021 include cash and cash equivalents and marketable securities held by NuScale of $338 million and $90 million, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities.
Cash balances as of December 31, 2023 and 2022 include cash and cash equivalents and marketable securities held by NuScale of $118 million and $338 million, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities.
This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, 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 $1.2 billion, all as defined in the amended credit facility.
This credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, 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 $1.2 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, GBP or CAD, bear interest at a base rate, plus an applicable borrowing margin. As of December 31, 2022 and through the issuance of this 10-K, we had not made any borrowings under our credit line and maintained a borrowing capacity of $819 million.
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 December 31, 2023 and through the issuance of this 10-K, we had not made any borrowings under our credit facility.
These variable amounts 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.
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.
Net Interest Income (Expense) The increase in net interest income during 2022 was primarily due to an increase in interest rates on cash deposits including at our joint ventures in Canada and Mexico as well as the redemption of $509 million of 2023 and 2024 Notes in the latter half of 2021.
Net Interest Income (Expense) The increase in net interest income during 2023 was primarily due to an increase in interest rates earned on cash deposits including at our joint ventures in Canada and Mexico as well as the interest savings following the redemption of the 2023 Notes.
Non-U.S. cash and cash equivalents amounted to $1.1 billion as of December 31, 2022 and $992 million as of December 31, 2021.
Non-U.S. cash and cash equivalents amounted to $1.1 billion as of both December 31, 2023 and 2022.
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.
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.
While we experienced reductions in demand for certain services and the delay or abandonment of ongoing or anticipated projects during the COVID pandemic, our ability to win work was not materially impacted by COVID during 2022.
While we experienced reductions in demand for certain services and the delay or abandonment of ongoing or anticipated projects during the COVID pandemic, our ability to win work was not materially impacted by COVID during 2023, as most of our markets and our clients' spending patterns have returned to pre-COVID norms.
Energy Solutions Revenue in 2022 increased due to the ramp up of execution activities on a chemicals project in China, recently awarded mid-scale LNG projects and refinery projects in Mexico partially offset by declines in the volume of execution activity for projects nearing completion.
Energy Solutions Revenue in 2023 increased due to the ramp up of execution activities on our refinery projects in Mexico, chemicals projects in China and mid-scale LNG projects. These increases to revenue were partially offset by a decline in execution activity for projects nearing completion and lower revenue on an LNG project.
In 2022, we finalized the settlement of the remaining obligations of this plan and recognized a gain on settlement of $42 million. Segment Operations We provide professional services in the fields of EPC, fabrication and modularization, and project management services, on a global basis and serve a diverse set of industries worldwide.
In 2022, we finalized the settlement of the remaining obligations of this plan and recognized a gain on settlement of $42 million. Segment Operations We are one of the larger global professional services firms providing EPC, fabrication and modularization, and project management services.
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 two notch downgrade from our current S&P credit rating of BBB- and a one notch downgrade from our current Moody's credit rating of Ba1.
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.
Backlog included $3.9 billion and $445 million of unfunded government contracts as of December 31, 2022 and 2021, respectively. Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. 37 Table of Contents Other Other includes the operations of NuScale, Stork and the remaining AMECO business.
Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. 34 Table of Contents Other Other includes the operations of NuScale, Stork and the remaining AMECO business prior to their sale.
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.
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.
The reversal relates primarily to remeasurement under held-and-used impairment criteria, for which CTA balances are excluded from carrying value. Gain (Loss) on Pension Settlement In 2021, we settled the majority of the obligations of our largest DB plan, which provided retirement benefits to certain employees in the Netherlands, and recognized a loss on settlement of $198 million.
Gain (Loss) on Pension Settlement In 2021, we settled the majority of the obligations of our then largest DB plan, which provided retirement benefits to certain employees in the Netherlands, and recognized a loss on settlement of $198 million.
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.
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 were primarily related to construction equipment on certain infrastructure projects as well as expenditures for facilities and investments in IT.
G&A YEAR ENDED DECEMBER 31, (in millions) 2022 2021 2020 G&A Compensation $ 145 $ 164 $ 122 SEC investigation / Internal review costs 38 27 42 Facilities 16 14 15 Exit costs 7 — — Reserve for legacy legal claims 5 — — Severance 1 8 4 Gain on sale of land and buildings (11) (13) — Other 36 26 32 G&A $ 237 $ 226 $ 215 The decrease in compensation expense in 2022 compared to 2021 was driven by $6 million of salary reductions associated with lower headcount and $10 million in lower incentive compensation for our executives.
G&A YEAR ENDED DECEMBER 31, (in millions) 2023 2022 2021 G&A Compensation $ 165 $ 145 $ 164 SEC investigation / Internal review costs 1 38 27 Facilities 14 16 14 Exit costs 6 7 — Reserve for legacy legal claims 3 5 — Severance 5 1 8 Gain on sale of land and buildings — (11) (13) Other 38 36 26 G&A $ 232 $ 237 $ 226 The increase in compensation expense in 2023 was driven by higher performance-based compensation, including annual bonus projections and the effects of our higher stock price on stock-based liability awards.
Under the market approach, we consider market information such as multiples of comparable publicly traded companies and/or completed sales transactions to develop or validate our fair value conclusions, when appropriate and available. As part of our assessment of goodwill in 2022, we recognized impairment expense of $40 million in our Other segment.
Under the market approach, we consider market information such as multiples of comparable publicly traded companies and/or completed sales transactions to develop or validate our fair value conclusions, when appropriate and available. Recent Accounting Pronouncements Item is described more fully in the Notes to Financial Statements.
Item 7. 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.
Item 7. 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 2022 compared to 2021 are included in our 2022 10-K and have not been repeated in this 10-K.
Other borrowings (debt repayments) represent short-term bank loans and other financing arrangements associated with Stork. 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 2022 primarily related to a transportation joint venture.
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 2023 related to a Mission Solutions joint venture and 2 infrastructure joint ventures.
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. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.
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.
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.
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.
Impairment Impairment expense, included in Cont Ops, for 2022, 2021 and 2020 is summarized as follows: Year Ended December 31, (in millions) 2022 2021 2020 Impairment: Goodwill associated with the Other reporting unit $ 40 $ 13 $ 169 Intangible customer relationship associated with Stork — — 27 Energy Solutions' equity method investments — 28 86 Information technology assets — 16 16 Fair value adjustment of Stork and AMECO assets (63) 233 74 Total impairment $ (24) $ 290 $ 372 During 2022, we reversed $63 million of impairment originally recognized in 2021 when our Stork and AMECO businesses were classified as held for sale.
Impairment Impairment expense, included in Cont Ops, for 2022 and 2021 is summarized as follows: Year Ended December 31, (in millions) 2022 2021 Impairment: Goodwill associated with Stork and AMECO $ 40 $ 13 Energy Solutions' equity method investments — 28 IT assets — 16 Fair value adjustment of Stork and AMECO assets (63) 233 Total impairment $ (24) $ 290 We did not recognize any material impairment expense in 2023.
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.
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, 2023, our backlog included $1.3 billion for loss projects, including $344 million of estimated unfunded losses associated therewith.
These actions resulted in a reduction of risk related to the exposure to liquidated damages in the project forecasts. 33 Table of Contents YEAR ENDED DECEMBER 31, (in millions) 2022 2021 2020 Revenue Energy Solutions $ 5,872 $ 4,956 $ 5,271 Urban Solutions 3,921 4,416 5,854 Mission Solutions 2,289 3,063 3,033 Other 1,662 1,721 1,630 Total revenue $ 13,744 $ 14,156 $ 15,788 Segment profit (loss) $ and margin % Energy Solutions $ 301 5.1 % $ 250 5.0 % $ 169 3.2 % Urban Solutions 3 0.1 % 38 0.9 % 161 2.8 % Mission Solutions 136 5.9 % 155 5.1 % 87 2.9 % Other (13) NM (28) NM (75) NM Total segment profit (loss) $ and margin % (1) $ 427 3.1 % $ 415 2.9 % $ 342 2.2 % G&A (237) (226) (215) Impairment 24 (290) (380) Gain (loss) on pension settlement 42 (198) — Foreign currency gain (loss) 25 (13) (47) Interest income (expense), net 35 (73) (46) Earnings (loss) from Cont Ops attributable to NCI (72) 39 68 Earnings (loss) from Cont Ops before taxes 244 (346) (278) Income tax (expense) benefit (171) (20) (23) Net earnings (loss) from Cont Ops 73 (366) (301) Less: Net earnings (loss) from Cont Ops attributable to NCI (72) 39 68 Net earnings (loss) from Cont Ops attributable to Fluor 145 (405) (369) Less: Dividends on CPS 39 24 — Net earnings (loss) from Cont Ops available to Fluor common stockholders $ 106 $ (429) $ (369) New awards Energy Solutions $ 6,511 $ 3,313 $ 2,013 Urban Solutions 6,799 2,721 3,563 Mission Solutions 5,347 2,718 1,883 Other 1,158 1,218 1,546 Total new awards $ 19,815 $ 9,970 $ 9,005 New awards related to projects located outside of the U.S. 46 % 61 % 58 % (in millions) December 31, 2022 December 31, 2021 Backlog Energy Solutions $ 9,134 $ 9,324 Urban Solutions 9,900 7,048 Mission Solutions 5,666 2,562 Other 1,349 1,866 Total backlog $ 26,049 $ 20,800 Backlog related to projects located outside of the U.S. 49 % 65 % Backlog related to lump-sum projects 37 % 59 % (1) Total segment profit (loss) is a non-GAAP financial measure.
We recognized a $93 million negative earnings impact on sale, including $33 million associated with foreign currency translation. 30 Table of Contents Results of Operations YEAR ENDED DECEMBER 31, (in millions) 2023 2022 2021 Revenue Energy Solutions $ 6,307 $ 5,872 $ 4,956 Urban Solutions 5,262 4,373 4,832 Mission Solutions 2,655 2,289 3,063 Other 1,250 1,210 1,305 Total revenue $ 15,474 $ 13,744 $ 14,156 Segment profit (loss) $ and margin % Energy Solutions $ 381 6.0 % $ 301 5.1 % $ 250 5.0 % Urban Solutions 268 5.1 % 17 0.4 % 41 0.9 % Mission Solutions 116 4.4 % 136 5.9 % 155 5.1 % Other (228) NM (27) NM (31) NM Total segment profit $ and margin % (1) $ 537 3.5 % $ 427 3.1 % $ 415 2.9 % G&A (232) (237) (226) Impairment — 24 (290) Gain (loss) on pension settlement — 42 (198) Foreign currency gain (loss) (98) 25 (13) Interest income (expense), net 168 35 (73) Earnings (loss) from Cont Ops attributable to NCI (60) (72) 39 Earnings (loss) from Cont Ops before taxes 315 244 (346) Income tax (expense) benefit (236) (171) (20) Net earnings (loss) from Cont Ops 79 73 (366) Less: Net earnings (loss) from Cont Ops attributable to NCI (60) (72) 39 Net earnings (loss) from Cont Ops attributable to Fluor 139 145 (405) Less: Dividends on CPS 29 39 24 Less: Make-whole payment on conversion of CPS 27 — — Net earnings (loss) from Cont Ops available to Fluor common stockholders $ 83 $ 106 $ (429) New awards Energy Solutions $ 6,871 $ 6,512 $ 3,313 Urban Solutions 10,141 6,900 2,877 Mission Solutions 1,055 5,347 2,718 Other 1,461 1,056 1,062 Total new awards $ 19,528 $ 19,815 $ 9,970 New awards related to projects located outside of the U.S. 76 % 46 % 61 % (in millions) December 31, 2023 December 31, 2022 Backlog (2)(3) Energy Solutions $ 9,722 $ 9,134 Urban Solutions 14,848 10,270 Mission Solutions 3,945 5,666 Other 926 979 Total backlog $ 29,441 $ 26,049 Backlog related to projects located outside of the U.S. 62 % 49 % Backlog related to lump-sum projects 24 % 37 % 31 Table of Contents (1) Total segment profit is a non-GAAP financial measure.
New awards in 2021 included a large life sciences project in Europe. New awards in 2020 included a highway project in Texas. Backlog increased during 2022 due to the new award activity. Backlog declined during 2021 due to the cancellation of a steel project coupled with lower new awards. Our staffing business does not report new awards or backlog.
New awards significantly increased in 2023 due to awards for a large mining project, a metals project and a life sciences project. Backlog increased during 2023 due to the new award activity. Our staffing business does not report new awards or backlog. Results for the fourth quarter of 2023.
Our operating cash flow is typically lower in the first quarter of each year due to the timing of payout of employee incentive awards from the prior year. Investing Activities We hold cash in bank deposits and marketable securities which are governed by our investment policy.
Our operating cash flow is typically lower in the first quarter of each year due to the timing of payout of employee incentive awards from the prior year. In 2024, we expect to receive a significant tax refund. Investing Activities 2023 investing activities were significantly impacted by the purchase of U.S.
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. During the first quarter of 2022, we suspended any new investment in our Russian operations.
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. (2) Backlog represents the total amount of revenue we expect to record in the future based upon contracts that have been awarded to us.
During 2022, consolidated revenue declined slightly due to volume declines on projects which were completed or nearing completion in the Urban Solutions and Mission Solutions segments.
Consolidated revenue increased in 2023 due to the ramp up of execution activities on several projects in Energy Solutions, Urban Solutions and Mission Solutions partially offset by declines in the volume of execution activity for projects which were completed or nearing completion.
A reconciliation of U.S. statutory federal income tax expense (benefit) to income tax expense (benefit) from Cont Ops follows: Year Ended December 31, (in millions) 2022 2021 2020 U.S. statutory federal tax expense (benefit) $ 51 $ (73) $ (58) Increase (decrease) in taxes resulting from: State and local income taxes — 12 (12) Other permanent items, net 10 36 — NCI 15 (7) (9) Foreign tax differential, net (106) (11) 38 Valuation allowance, net 194 103 167 Other changes to uncertain tax positions — 1 7 Stranded tax effects from AOCI — (52) — CARES Act benefit 2 2 (125) Other, net 5 9 15 Total income tax expense $ 171 $ 20 $ 23 Our results were significantly impacted by evolving foreign currency rates in 2022.
A reconciliation of U.S. statutory federal income tax expense (benefit) to income tax expense (benefit) follows: Year Ended December 31, (in millions) 2023 2022 2021 U.S. statutory federal tax expense (benefit) $ 66 $ 51 $ (73) Increase (decrease) in taxes resulting from: State and local income taxes 6 — 12 Goodwill Impairment — 10 36 Sale of foreign subsidiaries (10) — — NCI 13 15 (7) Foreign tax differential, net 48 (106) (11) Valuation allowance, net 122 194 103 Stranded tax effects from AOCI — — (52) Other, net (9) 7 12 Total income tax expense $ 236 $ 171 $ 20 32 Table of Contents In 2021, the Organization for Economic Cooperation and Development announced a framework on base erosion and profit shifting.
Investments in unconsolidated partnerships and joint ventures in 2020 included capital contributions to two infrastructure joint ventures in the United States. Financing Activities As a result of the reverse recapitalization, NuScale recognized cash of $341 million, consisting of $235 million in PIPE funding and $145 million in cash in trust, partially offset by transaction costs of $39 million.
As a result of the reverse recapitalization, NuScale recognized cash of $341 million during 2022, consisting of $235 million in PIPE funding and $145 million in cash in trust, partially offset by transaction costs of $39 million. In April 2022, we sold approximately 5% of the ownership of NuScale to Japan NuScale Innovation, LLC for $107 million.
LIQUIDITY AND CAPITAL RESOURCES Our liquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facilities and, when necessary, access to capital markets. We have committed and uncommitted lines of credit available for revolving loans and letters of credit.
Litigation and Matters in Dispute Resolution Item is described more fully 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 facilities and, when necessary, access to capital markets.
RUPO includes only the amount of revenue we expect to recognize under contracts with definite terms and substantive termination provisions.
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.
We expect to address the maturity of the 2024 Notes through available liquidity, cash generated by our operations or via a new securities issue. As of December 31, 2022, letters of credit totaling $394 million were outstanding under our $1.8 billion credit facility, which was amended in February 2023 to extend the maturity to February 2026.
As of December 31, 2023, letters of credit totaling $477 million were outstanding under our $1.8 billion credit facility, which matures in February 2026 and was amended in August 2023 to permit the issuance of the 2029 Notes.
Letters of Credit As of December 31, 2022, letters of credit totaling $394 million were outstanding under committed lines of credit and letters of credit totaling $909 million were outstanding under uncommitted lines of credit. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts.
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.
The change in segment profit margin in 2022 and 2021 reflects these same factors. New awards in 2022 increased due to a large award for a chemicals project in China and mid-scale LNG projects in North America. New awards in 2021 increased due to awards for a refinery project in Mexico.
The increase in segment profit margin in 2023 reflects these same factors. 33 Table of Contents New awards and backlog increased in 2023 due to awards for reimbursable EPCM contracts for 2 large chemicals projects in North America as well as a chemicals project in Poland. Results for the fourth quarter of 2023.
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 $15 billion as of December 31, 2022.
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 $15 billion as of December 31, 2023. 40 Table of Contents 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.
Estimates are based on information available through the 38 Table of Contents 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 Long-Term Contracts.
Significant judgments and estimates used in the preparation of our financial statements apply to the following critical accounting policies: 35 Table of Contents Revenue Recognition for Long-Term Contracts. We recognize our engineering and construction contract revenue over time as we provide services to satisfy our performance obligations.
Mission Solutions Revenue in 2022 decreased primarily due to the completion of a DOE contract in 2021, the completion of a contingency and humanitarian support project in the first quarter of 2022 and the closure of LOGCAP in Afghanistan partially offset by increased execution activities on three DOE contracts. Revenue in 2021 was flat compared to 2020.
Mission Solutions Revenue increased in 2023 due to increased execution activities for 3 DOE contracts, 2 defense contracts, a nuclear power project that was recently terminated and FEMA hurricane support. The increase in revenue was partially offset by the completion of a contingency and humanitarian support project in 2022 and an airfield construction project in early 2023.
YEAR ENDED DECEMBER 31, (in millions) 2022 2021 2020 NuScale (1) $ (73) $ (69) $ (84) Stork 59 35 (6) AMECO 1 6 15 Segment profit (loss) $ (13) $ (28) $ (75) (1) NuScale expenses included in the determination of segment profit were as follows: NuScale expenses $ (179) $ (169) $ (159) Less: DOE reimbursable expenses 74 69 71 NuScale expenses, net (105) (100) (88) Less: Attributable to NCI 32 31 4 NuScale profit (loss) $ (73) $ (69) $ (84) The increase in NuScale expenses during 2022 and 2021 was primarily due to an increase in compensation. 2022 also had a slight increase in insurance and R&D.
YEAR ENDED DECEMBER 31, (in millions) 2023 2022 2021 NuScale (1) $ (106) $ (73) $ (69) Stork (55) 45 32 AMECO (67) 1 6 Segment profit (loss) $ (228) $ (27) $ (31) (1) NuScale expenses included in the determination of segment profit were as follows: NuScale expenses $ (246) $ (179) $ (169) Less: DOE reimbursable expenses 64 74 69 NuScale expenses, net (182) (105) (100) Less: Attributable to NCI 76 32 31 NuScale profit (loss) $ (106) $ (73) $ (69) Segment profit in 2023 includes a $60 million negative earnings impact on the sale of our AMECO South America business (including $35 million for foreign currency translation) and a $93 million negative earnings impact on the sale of our Stork business in Latin America (including cash paid to the buyer of $31 million and $33 million for foreign currency translation).
Segment profit in 2022 reflects a $86 million charge for additional rework and schedule delays on a highway project, a $54 million charge for cost growth and delay mitigation costs on an international bridge project and a $35 million charge for subcontractor cost escalation and productivity estimates on an automated people mover project.
Segment profit in 2023 includes the settlement of a claim on an international bridge project compared to the recognition of $54 million in cost growth and delay mitigation costs on the same project in 2022.
Revenue in 2021 decreased due to declines in the volume of execution activities for projects nearing completion and the cancellation of a chemicals project in North America partially offset by the ramp up of execution activities on a refinery project in Mexico and a chemicals project in China.
The revenue increases in 2023 were partially offset by declines in the volume of execution activity for projects nearing completion including a large mining project. Segment profit in 2023 significantly improved.
Investments in unconsolidated partnerships and joint ventures in 2022 included capital contributions to a Mission Solutions joint venture and an infrastructure joint venture.
Investments in unconsolidated partnerships and joint ventures in 2023 included capital contributions to a Mission Solutions joint venture and 3 infrastructure joint ventures. Financing Activities In August 2023, we issued $575 million of 1.125% Convertible Senior Notes (the “2029 Notes”) due August 15, 2029 and received net proceeds of $560 million.
Removed
Results of Operations During the first quarter of 2022, we determined that our Stork business and the remaining unsold AMECO equipment business no longer met all of the requirements to be classified as Disc Ops, primarily as a result of uncertainties related to the timing of this sale.
Added
Developments in Our Business We have retained Stork's North American operations, which largely consists of our operations and maintenance business owned by Fluor prior to our acquisition of Stork. This business, renamed Plant & Facility Services, is included in our Urban Solutions segment for all periods presented.
Removed
Therefore, both Stork and the remaining AMECO business are reported as Cont Ops for all periods presented and included in our Other segment. In the second quarter of 2022, NuScale became a public company (NYSE ticker:SMR) through a reverse recapitalization with a public shell company. We continue to control and consolidate NuScale.
Added
In March 2023, we sold our AMECO South America business, which included operations in Chile and Peru. This transaction marked the completion of the AMECO divestiture for total proceeds of $144 million, including $17 million in 2023. Previous AMECO divestitures included assets in Africa, the Caribbean, Mexico and North America.
Removed
In the third quarter of 2022, we agreed to arrangements to facilitate the sail away of a legacy upstream project from the fabrication yard in China. These agreements reduced our exposure to liquidated damages and created partially client funded incentives for the fabricator. Sail away was accomplished during the fourth quarter of 2022.
Added
Upon the sale of AMECO South America in 2023, we recognized a $60 million negative earnings impact, including $35 million associated with foreign currency translation. In August and September 2023, we completed the issuance of the 2029 Notes and the conversion of all our CPS. In December 2023, we discharged the remaining outstanding 2024 Notes.
Removed
During the fourth quarter of 2022, the Infrastructure business line progressed commercial resolution of various claims on several projects. A global claim for time and cost relief was submitted to the client on an international bridge project and agreements in principle for schedule relief were achieved on two other domestic infrastructure projects.
Added
In doing so, we irrevocably transferred interest-bearing Treasury securities to the trustee of the 2024 Notes. In 2023, we agreed to sell Stork's European business. This transaction is expected to close in the first half of 2024. However, the conditions imposed by the SPA prevent us from classifying the business as held-for-sale.
Removed
We have evaluated our financial exposure through December 31, 2022 and do not believe that, should existing conditions in Eastern Europe persist, 34 Table of Contents we would have a material impairment of our assets. Our backlog on projects in the impacted region is not significant to future revenue or margin.
Added
In December 2023, we sold the Stork business in Latin America, largely for the assumption of debt by the purchaser.
Removed
We continue to monitor the circumstances in Eastern Europe and wind down our existing contractual obligations while complying with all regulatory limitations placed on new and existing business for projects and clients based in the region.
Added
Backlog is stated in terms of gross revenues and may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs. For projects related to proportionately consolidated joint ventures, we include only our percentage ownership of each joint venture's backlog.
Removed
During 2021, consolidated revenue declined due to volume declines on projects which were completed or nearing completion in the Energy Solutions and Urban Solutions segments as well as the cancellation of three large projects that were in progress in the prior year. Segment profit for 2022 was relatively flat compared to 2021.
Added
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.
Removed
During 2021, improvements in segment profit in the Energy Solutions, Mission Solutions and Other segments were partially offset by a significant decline in segment profit for Urban Solutions where we recognized a $138 million charge for procurement and subcontractor cost growth on a legacy infrastructure project.
Added
(3) Includes backlog of $1.3 billion and $1.8 billion for legacy projects in a loss position as of December 31, 2023 and 2022, respectively.
Removed
The effective tax rate from Cont Ops was 70%, (6%) and (8%) for 2022, 2021 and 2020, respectively.
Added
For example, in the fourth quarter of 2023, we finalized an agreement for COVID-related relief on a single infrastructure project that caused our project level revenue assumptions to increase by $127 million.
Removed
During 2022, the U.S. dollar appreciated significantly against the Euro, the British Pound and the Canadian Dollar.
Added
Segment profit for 2023 significantly improved due to higher execution activity on several projects as well as the initial recognition of inflation-adjusted variable consideration on certain downstream projects and incentive fees on a mining project. Segment profit in 2023 further benefitted from the settlement of project claims and arbitration.
Removed
Our profit margin percentages, in some cases, may be favorably or unfavorably impacted by a change in the amount of CFM, which are accounted for as pass-through costs. 35 Table of Contents The increase in backlog resulted from significant new awards booked during 2022, particularly during the third quarter.
Added
Despite the improvements in segment profit in 2023, we recognized charges on 3 legacy projects for cost growth and also recognized $153 million negative earnings impact on the sales of our AMECO and Stork businesses in Latin America. The effective tax rate on earnings from Cont Ops was 75%, 70% and (6%) for 2023, 2022 and 2021, respectively.
Removed
Segment profit in 2022 was higher due to an increase in execution activities and volume from new and existing LNG projects as well as the ramp up of execution activities on the chemicals project in China and the refinery projects in Mexico partially offset by declines in the volume of execution activity for projects nearing completion.
Added
The framework includes Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations, at a minimum rate of 15%. Multiple sets of guidance have been and continue to be issued.
Removed
The increase in segment profit in 2022 was further driven by adjustments to our COVID-related positions on a project.
Added
Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or are in the process of enacting legislation in future years. Pillar Two is expected to be applicable to us beginning January 1, 2024.
Removed
Segment profit in 2021 increased due to the ramp up of execution activities on the refinery project in Mexico and the LNG project in Canada and the collection of previously reserved accounts receivable but was partially offset by losses on embedded foreign currency derivatives, the decline in execution activity for projects nearing completion and the cancellation of the chemicals project in North America.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur outstanding letters of credit are locked in at credit spread, not borrowing spread. Therefore, our exposure to interest rate risk is not material. However, in the future, new debt issuances could be exposed to increasing interest rates. Item 8.
Biggest changeOur long-term debt typically features a fixed-rate coupon. The fees we pay on our outstanding letters of credit are also fixed rates based on our credit spread. Therefore, our exposure to floating interest rates is not material. However, in the future, any new debt issuances could be exposed to increasing interest rates or feature floating interest rates. Item 8.
When the U.S. dollar appreciates against the non-U.S. dollar functional currencies of these subsidiaries, our reported revenue, cost and earnings, after translation into U.S. dollars, are lower than what they would have been had the U.S. dollar depreciated against the same foreign currencies or if there had been no change in the exchange rates. 43 Table of Contents Our long-term debt typically features a fixed-rate coupon.
When the U.S. dollar appreciates against the non-U.S. dollar functional currencies of these subsidiaries, our reported revenue, cost and earnings, after translation into U.S. dollars, are lower than what they would have been had the U.S. dollar depreciated against the same foreign currencies or if there had been no change in the exchange rates.

Other FLR 10-K year-over-year comparisons