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Fluor Corp (FLR) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, June 30, 2021

SEC Filings

Fluor Corp

CIK: 1124198 Ticker: FLR

 

Exhibit 99.1

 

Fluor Corporation Brian Mershon
6700 Las Colinas Blvd Media Relations
Irving, Texas 75039 469.398.7621 tel
   
469.398.7000 main tel Jason Landkamer
Investor Relations
469.398.7222 tel

 

 
News Release

 

FLUOR RAISES 2021 GUIDANCE AND REPORTS SECOND QUARTER 2021 RESULTS

 

·Q2 2021 loss per share from continuing operations of $0.08; adjusted EPS from continuing operations of $0.32; raising full year adjusted EPS guidance to $0.60 to $0.80 per diluted share
   
·$600 million convertible preferred offering supports debt reduction strategy; $26 million reduction through July, anticipate substantial debt retirements in 2021
   
·$192 million received in outside investment for NuScale this year
   
·$100 million in proceeds for the sale of AMECO North America and a P3 investment; AMECO South America and Stork divestitures underway

 

IRVING, TX (August 6, 2021)

- Fluor Corporation (NYSE: FLR) announced financial results for its second quarter ended June 30, 2021. Revenue for the quarter was $3.2 billion, with a net loss from continuing operations of $14 million, or $0.08 per common share. Results for the quarter include a charge related to a legacy infrastructure project. Results were also negatively impacted by $49 million of foreign currency effects and certain other adjustments outlined in the table at the end of this release. Excluding the $49 million of other adjustments, and using the higher diluted weighted average share count for this level of earnings, adjusted earnings per diluted share were $0.32. The weighted average share count for the second quarter of 156 million reflects the effect of the convertible preferred offering. Consolidated segment profit for the quarter, which includes NuScale expenses, was $67.2 million compared to $72.4 million in the second quarter of 2020.

 


The following information was filed by Fluor Corp (FLR) on Friday, August 6, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
Or
       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to          
Commission File Number:  1-16129
FLUOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-0927079
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6700 Las Colinas Boulevard  
Irving, Texas 75039
(Address of principal executive offices) (Zip Code)
469-398-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par value per shareFLRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer
Non-accelerated filerSmaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No ý
As of July 30, 2021, 141,416,214 shares of the registrant’s common stock, $0.01 par value, were outstanding.



FLUOR CORPORATION
FORM 10-Q
TABLE OF CONTENTSPAGE

1

Glossary of Terms
The definitions and abbreviations set forth below apply to the indicated terms used throughout this filing.
Abbreviation/TermDefinition
2020 10-KAnnual Report on Form 10-K for the year ended December 31, 2020
2020 PeriodSix months ended June 30, 2020
2020 QuarterThree months ended June 30, 2020
2021 PeriodSix months ended June 30, 2021
2021 QuarterThree months ended June 30, 2021
AOCIAccumulated other comprehensive income (loss)
ASCAccounting Standards Codification
ASUAccounting Standards Update
Cont OpsContinuing operations
G&AGeneral and administrative expense
COVID-19Coronavirus pandemic
DB planDefined benefit pension plan
Disc OpsDiscontinued operations
DOEU.S. Department of Energy
EPCEngineering, procurement and construction
EPSEarnings (loss) per share
Exchange ActSecurities Exchange Act of 1934
FluorFluor Corporation
GAAPAccounting principles generally accepted in the United States
ICFRInternal control over financial reporting
LNGLiquefied natural gas
NCINoncontrolling interests
NMNot meaningful
NuScaleNuScale Power, LLC
OCIOther comprehensive income (loss)
Q2 2021 10-QQuarterly Report on Form 10-Q for the three and six months ended June 30, 2021
RSURestricted stock units
RUPORemaining unsatisfied performance obligations
SECSecurities and Exchange Commission
StorkStork Holding B.V. and subsidiaries
SMRSmall modular reactor
VIEVariable interest entity

2

PART I:  FINANCIAL INFORMATION
Item 1. Financial Statements
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED

Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except per share amounts)2021202020212020
Revenue$3,236,407 $3,734,942 $6,174,933 $7,432,636 
Cost of revenue3,176,942 3,656,048 6,022,691 7,289,895 
Gross profit59,465 78,894 152,242 142,741 
General and administrative expense(31,474)(42,598)(97,068)(76,156)
Impairment, restructuring and other exit costs— (3,824)(26,392)(106,189)
Foreign currency gain (loss)(30,386)798 (41,656)45,960 
Operating profit(2,395)33,270 (12,874)6,356 
Interest expense(15,217)(15,707)(35,941)(32,258)
Interest income4,409 5,294 8,057 17,218 
Earnings (loss) from Cont Ops before taxes(13,203)22,857 (40,758)(8,684)
Income tax expense (benefit)1,228 31,359 1,826 (30,922)
Net earnings (loss) from Cont Ops(14,431)(8,502)(42,584)22,238 
Less: Net earnings (loss) from Cont Ops attributable to NCI
(7,763)6,418 25,056 15,550 
Net earnings (loss) from Cont Ops attributable to Fluor(6,668)(14,920)(67,640)6,688 
Net earnings (loss) from Disc Ops attributable to Fluor (107,777)(10,070)(133,829)(297,637)
Net earnings (loss) attributable to Fluor$(114,445)$(24,990)$(201,469)$(290,949)
Less: Dividends on convertible preferred stock4,875 — 4,875 — 
Net earnings (loss) available to Fluor common stockholders$(119,320)$(24,990)$(206,344)$(290,949)
Basic EPS available to Fluor common stockholders
Net earnings (loss) from Cont Ops$(0.08)$(0.11)$(0.51)$0.05 
Net earnings (loss) from Disc Ops(0.76)(0.07)(0.95)(2.12)
Diluted EPS available to Fluor common stockholders
Net earnings (loss) from Cont Ops$(0.08)$(0.11)$(0.51)$0.05 
Net earnings (loss) from Disc Ops(0.76)(0.07)(0.95)(2.11)

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

3

FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
UNAUDITED
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)2021202020212020
Net earnings (loss) from Cont Ops$(14,431)$(8,502)$(42,584)$22,238 
Net earnings (loss) from Disc Ops(107,479)(9,760)(133,238)(296,950)
Net earnings (loss)$(121,910)$(18,262)$(175,822)$(274,712)
OCI, net of tax:
Foreign currency translation adjustment(1,279)31,072 1,420 (80,029)
Ownership share of equity method investees’ OCI(75)(10,654)(2,139)(18,826)
DB plan adjustments1,191 955 2,842 2,001 
Unrealized gain (loss) on hedges575 1,765 (2,476)(3,705)
Total OCI, net of tax412 23,138 (353)(100,559)
Comprehensive income (loss)(121,498)4,876 (176,175)(375,271)
Less: Comprehensive income (loss) attributable to NCI(7,859)9,149 25,051 14,441 
Comprehensive income (loss) attributable to Fluor$(113,639)$(4,273)$(201,226)$(389,712)
The accompanying notes are an integral part of these financial statements.
4

FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
UNAUDITED
(in thousands, except share and per share amounts)June 30,
2021
December 31,
2020
ASSETS   
Current assets  
Cash and cash equivalents ($635,983 and $654,852 related to VIEs)
$2,711,115 $2,198,781 
Marketable securities ($10,066 and $66 related to VIEs)
31,651 23,345 
Accounts receivable, net ($267,451 and $238,376 related to VIEs)
892,261 935,676 
Contract assets ($332,401 and $237,923 related to VIEs)
994,890 859,675 
Other current assets ($30,139 and $29,408 related to VIEs)
400,369 378,043 
Current assets held for sale895,873 638,489 
Total current assets5,926,159 5,034,009 
Noncurrent assets
Property, plant and equipment, net ($47,726 and $34,847 related to VIEs)
448,436 463,827 
Investments597,574 527,416 
Deferred taxes92,191 77,915 
Deferred compensation trusts326,562 350,427 
Goodwill206,987 207,369 
Other assets ($39,045 and $40,829 related to VIEs)
258,568 269,610 
Noncurrent assets held for sale— 379,239 
Total noncurrent assets1,930,318 2,275,803 
Total assets$7,856,477 $7,309,812 
LIABILITIES AND EQUITY 
Current liabilities
Accounts payable ($289,049 and $328,940 related to VIEs)
$1,087,404 $1,115,625 
Short-term borrowings4,738 4,890 
Contract liabilities ($354,242 and $262,811 related to VIEs)
1,149,532 1,093,761 
Accrued salaries, wages and benefits ($29,064 and $28,381 related to VIEs)
515,407 578,827 
Other accrued liabilities ($20,190 and $36,646 related to VIEs)
405,175 376,451 
Current liabilities related to assets held for sale572,776 402,483 
Total current liabilities3,735,032 3,572,037 
Long-term debt1,678,740 1,701,098 
Deferred taxes91,908 80,745 
Other noncurrent liabilities ($7,780 and $9,164 related to VIEs)
579,403 593,765 
Noncurrent liabilities related to assets for sale— 98,940 
Contingencies and commitments
Equity
Shareholders’ equity
Preferred stock — authorized 20,000,000 shares ($0.01 par value); issued and outstanding — 600,000 shares in 2021 and none issued in 2020
— 
Common stock — authorized 375,000,000 shares ($0.01 par value); issued and outstanding — 141,416,214 and 140,715,205 shares in 2021 and 2020, respectively
1,411 1,404 
Additional paid-in capital882,450 195,940 
AOCI(416,663)(416,906)
Retained earnings1,048,345 1,249,809 
Total shareholders’ equity1,515,549 1,030,247 
NCI255,845 232,980 
Total equity1,771,394 1,263,227 
Total liabilities and equity$7,856,477 $7,309,812 
The accompanying notes are an integral part of these financial statements.
5

FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
Six Months Ended
June 30,
(in thousands)20212020
OPERATING CASH FLOW  
Net earnings (loss)$(175,822)$(274,712)
Adjustments to reconcile net earnings (loss) to operating cash flow:
Impairment expense - Cont Ops26,392 102,365 
Impairment expense - Disc Ops121,476 295,239 
Depreciation42,240 54,540 
Amortization of intangibles555 2,381 
(Earnings) loss from equity method investments, net of distributions(1,990)1,216 
Loss on sale of AMECO-North America24,864 — 
(Gain) loss on sales of assets(16,610)8,205 
Stock-based compensation21,327 9,356 
Deferred taxes297 (17,424)
Net retirement plan accrual (contributions)(11,226)(7,234)
Changes in assets and liabilities(183,617)(116,775)
Other(1,764)6,931 
Operating cash flow(153,878)64,088 
INVESTING CASH FLOW
Purchases of marketable securities(31,432)(12,495)
Proceeds from the sales and maturities of marketable securities23,202 6,995 
Capital expenditures(46,275)(58,959)
Proceeds from sales of assets42,839 24,348 
Proceeds from sale of AMECO-North America71,085 — 
Investments in partnerships and joint ventures(59,829)(24,022)
Other375 4,534 
Investing cash flow(35)(59,599)
FINANCING CASH FLOW
Proceeds from issuance of preferred stock582,000 — 
Purchase and retirement of debt(4,572)— 
Dividends paid— (28,720)
Other borrowings (debt repayments)(5,922)20,567 
Distributions paid to NCI(18,177)(10,831)
Capital contributions by NCI106,019 39,520 
Taxes paid on vested restricted stock(4,353)(1,313)
Other 340 (1,435)
Financing cash flow655,335 17,788 
Effect of exchange rate changes on cash10,912 (49,883)
Increase (decrease) in cash and cash equivalents512,334 (27,606)
Cash and cash equivalents at beginning of period2,198,781 1,997,199 
Cash and cash equivalents at end of period$2,711,115 $1,969,593 

The accompanying notes are an integral part of these financial statements.
6

FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
UNAUDITED
(in thousands, except per share amounts)Preferred StockCommon StockAdditional Paid-In CapitalAOCIRetained
Earnings
Total Shareholders' EquityNCITotal
Equity
SharesAmountSharesAmount
BALANCE AS OF MARCH 31, 2021— $— 141,340 $1,410 $236,923 $(417,469)$1,162,790 $983,654 $261,003 $1,244,657 
Net earnings (loss)— — — — — — (114,445)(114,445)(7,465)(121,910)
OCI— — — — — 806 — 806 (394)412 
Issuance of convertible preferred stock600 — — 581,994 — — 582,000 — 582,000 
Distributions to NCI— — — — — — — — (9,759)(9,759)
Capital contributions by NCI— — — — — — — — 63,931 63,931 
Other NCI transactions— — — — 52,716 — — 52,716 (51,471)1,245 
Stock-based plan activity— — 76 10,817 — — 10,818 — 10,818 
BALANCE AS OF JUNE 30, 2021600 $141,416 $1,411 $882,450 $(416,663)$1,048,345 $1,515,549 $255,845 $1,771,394 

(in thousands, except per share amounts)Preferred StockCommon StockAdditional Paid-In CapitalAOCIRetained
Earnings
Total Shareholders' EquityNCITotal
Equity
SharesAmountSharesAmount
BALANCE AS OF
DECEMBER 31, 2020
— $— 140,715 $1,404 $195,940 $(416,906)$1,249,809 $1,030,247 $232,980 $1,263,227 
Net earnings (loss)— — — — — — (201,469)(201,469)25,647 (175,822)
OCI— — — — — 243 — 243 (596)(353)
Issuance of convertible preferred stock600 — — 581,994 — — 582,000 — 582,000 
Distributions to NCI— — — — — — — — (18,177)(18,177)
Capital contributions by NCI— — — — — — — — 106,032 106,032 
Other NCI transactions— — — — 87,059 — — 87,059 (90,041)(2,982)
Stock-based plan activity— — 701 17,457 — 17,469 — 17,469 
BALANCE AS OF JUNE 30, 2021600 $141,416 $1,411 $882,450 $(416,663)$1,048,345 $1,515,549 $255,845 $1,771,394 

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









7

FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
UNAUDITED
(in thousands, except per share amounts)Common StockAdditional Paid-In CapitalAOCIRetained
Earnings
Total Shareholders' EquityNCITotal
Equity
SharesAmount
BALANCE AS OF MARCH 31, 2020140,533 $1,403 $170,750 $(499,353)$1,418,845 $1,091,645 $118,520 $1,210,165 
Net earnings (loss)— — — — (24,990)(24,990)6,728 (18,262)
OCI— — — 20,717 — 20,717 2,421 23,138 
Distributions to NCI— — — — — — (8,080)(8,080)
Capital contributions by NCI— — — — — — 19,552 19,552 
Other NCI transactions— — 1,064 — — 1,064 31 1,095 
Stock-based plan activity32 — 3,275 — 11 3,286 — 3,286 
BALANCE AS OF JUNE 30, 2020140,565 $1,403 $175,089 $(478,636)$1,393,866 $1,091,722 $139,172 $1,230,894 

(in thousands, except per share amounts)Common StockAdditional Paid-In CapitalAOCIRetained
Earnings
Total Shareholders' EquityNCITotal
Equity
SharesAmount
BALANCE AS OF
DECEMBER 31, 2019
140,174 $1,399 $165,314 $(379,873)$1,700,912 $1,487,752 $96,340 $1,584,092 
Net earnings (loss)— — — — (290,949)(290,949)16,237 (274,712)
Cumulative adjustment for the adoption of ASC 326— — — — (1,977)(1,977)— (1,977)
OCI— — — (98,763)— (98,763)(1,796)(100,559)
Dividends ($0.10 per share)
— — — — (14,120)(14,120)— (14,120)
Distributions to NCI— — — — — — (10,831)(10,831)
Capital contributions by NCI— — — — — — 39,520 39,520 
Other NCI transactions— — 1,736 — — 1,736 (298)1,438 
Stock-based plan activity391 8,039 — — 8,043 — 8,043 
BALANCE AS OF JUNE 30, 2020140,565 $1,403 $175,089 $(478,636)$1,393,866 $1,091,722 $139,172 $1,230,894 

The accompanying notes are an integral part of these financial statements.
8


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED

1. Principles of Consolidation

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

The financial statements included herein are unaudited. In management's opinion, they contain all adjustments of a normal recurring nature which are necessary to present fairly our financial position and our operating results as of and for the interim periods presented. All significant intercompany transactions of consolidated subsidiaries are eliminated. Certain amounts in 2020 have been reclassified to conform to the 2021 presentation, which includes the segregation of Disc Ops and assets and liabilities held for sale. Segment operating information for 2020 has been recast to reflect changes in the composition of our reportable segments during 2021. Certain amounts in tables may not total or agree to the financial statements due to immaterial rounding differences. Management has evaluated all material events occurring subsequent to June 30, 2021 through the filing date of this Q2 2021 10-Q.
Quarters are typically 13 weeks in length but, due to our annual period ending on December 31, the number of weeks in a reporting period may vary slightly during the year and for comparable prior year periods. We report our quarterly results of operations based on periods ending on the Sunday nearest March 31, June 30 and September 30, allowing for a 13-week quarter. For clarity of presentation, all periods are presented as if the periods ended on March 31, June 30 and September 30.
In the first quarter of 2021, we committed to a plan to sell our Stork business. This plan and our plan to sell the remaining AMECO equipment business remains unchanged. Therefore, both Stork and AMECO are reported as Disc Ops. We expect to complete the sale of Stork and the remaining AMECO operations near the end of this year or early in 2022. The assets and liabilities of the Stork and AMECO businesses are classified as held for sale for all periods presented.
2. Recent Accounting Pronouncements
Accounting pronouncements that were implemented by us during the 2021 Period

In the first quarter of 2021, we adopted ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which simplifies accounting for convertible instruments and the application of the derivatives scope exception for contracts in our own equity. ASU 2020-06 eliminates two of the three models in the current guidance that require separating embedded conversion features from convertible instruments and also eliminates some of the requirements for equity classification. ASU 2020-06 also addresses how convertible instruments are accounted for in the diluted EPS calculation. The adoption did not have any impact on our financial statements.
9


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
3. Earnings Per Share
Potentially dilutive securities include convertible preferred stock, stock options, RSUs, restricted stock and performance-based award units. Diluted EPS reflects the assumed exercise or conversion of all dilutive securities using the if-converted and treasury stock methods. In computing diluted EPS, only securities that are actually dilutive are included.
(in thousands, except per share amounts)Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Net earnings (loss) from Cont Ops attributable to Fluor$(6,668)$(14,920)$(67,640)$6,688 
Less: Dividends on convertible preferred stock4,875 — 4,875 — 
Net earnings (loss) from Cont Ops available to Fluor common stockholders(11,543)(14,920)(72,515)6,688 
Net earnings (loss) from Disc Ops attributable to Fluor(107,777)(10,070)(133,829)(297,637)
Net earnings (loss) available to Fluor common stockholders$(119,320)$(24,990)$(206,344)$(290,949)
Weighted average common shares outstanding141,374 140,536 141,137 140,399 
Diluted effect:
Convertible preferred stock(1)
— — 
Stock options, RSUs, restricted stock and performance-based award units(1)
411
Weighted average diluted shares outstanding141,374140,536141,137140,810
Basic EPS available to Fluor common stockholders:
Net earnings (loss) from Cont Ops$(0.08)$(0.11)$(0.51)$0.05 
Net earnings (loss) from Disc Ops(0.76)(0.07)(0.95)(2.12)
Diluted EPS available to Fluor common stockholders:
Net earnings (loss) from Cont Ops$(0.08)$(0.11)$(0.51)$0.05 
Net earnings (loss) from Disc Ops(0.76)(0.07)(0.95)(2.11)
(1) Anti-dilutive securities not included in shares outstanding14,457 384 8,178 — 
4. Operating Information by Segment and Geographic Area
During the first quarter of 2021, we changed the composition of our segments to implement our new strategy and to pursue opportunities in our designated markets. We now report our operating results as follows: Energy Solutions, Urban Solutions, Mission Solutions and Other. Segment operating information and assets for 2020 have been recast to conform to these changes.
Energy Solutions focuses on energy transition, chemicals, LNG, and traditional oil and gas opportunities. The segment is pursuing new opportunities emerging in the energy transition market including carbon capture, green chemicals, hydrogen, biofuels and other low carbon energy sources. The segment also continues to provide EPC services for the oil, gas and petrochemical industries.
Urban Solutions focuses on mining, metals, advanced technologies, manufacturing, life sciences, infrastructure and professional staffing services.
10


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
Mission Solutions focuses on federal agencies across the U.S. government and select international opportunities. These include, among others, the DOE, the Department of Defense, the Federal Emergency Management Agency and intelligence agencies. Mission Solutions includes the Radford and Warren projects which were previously reported in the Other segment.
Other now includes only the operations of NuScale.
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2021202020212020
Revenue
Energy Solutions$1,319.1 $1,498.0 $2,310.0 $2,857.2 
Urban Solutions1,210.2 1,512.5 2,404.5 3,104.8 
Mission Solutions707.1 724.4 1,460.4 1,470.6 
Total revenue$3,236.4 $3,734.9 $6,174.9 $7,432.6 
Segment profit (loss)
Energy Solutions$109.2 $42.7 $111.4 $36.8 
Urban Solutions(68.4)38.5 (38.6)89.9 
Mission Solutions44.9 9.7 88.6 41.8 
Other(18.5)(18.5)(34.2)(41.3)
Total segment profit (loss)$67.2 $72.4 $127.2 $127.2 
G&A(31.5)(42.6)(97.1)(76.2)
Impairment, restructuring and other exit costs— (3.8)(26.4)(106.2)
Foreign currency gain (loss)(30.4)0.8 (41.7)46.0 
Interest income (expense), net(10.8)(10.4)(27.9)(15.0)
Earnings (loss) from Cont Ops attributable to NCI(7.7)6.4 25.1 15.5 
Earnings (loss) from Cont Ops before taxes$(13.2)$22.8 $(40.8)$(8.7)
Energy Solutions. Segment profit for the 2021 Quarter and 2021 Period benefitted from the negotiation of change orders, scope increases and cost improvements across numerous projects. Both periods also benefitted from the collection of previously reserved accounts receivable and the reversal of the related provision. The increases in 2021 were partially offset by losses on embedded foreign currency derivatives. Segment profit for the 2020 Period was adversely affected by the recognition of reserves for expected credit losses on aged receivables and COVID-19 related cost growth.
Urban Solutions. Segment profit for the 2021 Quarter and 2021 Period included a project charge of $138 million (or $0.72 per share) for procurement and subcontractor cost growth, delays and disruptions in the schedule of a legacy infrastructure project. We believe that these cost growth factors may be at least partially recoverable under the contract. However, we expect that it will require several quarters to analyze recoverability and negotiate with our client before recognizing incremental revenue for these factors. The decline in segment profit in the 2021 Period was partially offset by the favorable resolution of a long-standing customer dispute on a rail project. We also sold our interest in an infrastructure joint venture and recognized a gain of $20 million during the 2021 Quarter and 2021 Period. Intercompany revenue for our professional staffing business, excluded from the amounts shown above, was $69 million and $139 million for the 2021 Quarter and 2021 Period, respectively, and $62 million and $139 million for the 2020 Quarter and 2020 Period, respectively.
Mission Solutions. Segment profit for the 2021 Quarter and 2021 Period benefitted from increased execution activity on our DOE projects, higher than anticipated performance-based fees and the release of COVID-19 cost reserves, partially offset by a decline in execution activity on army logistics and life support programs in Afghanistan and Africa.
Other. During the 2021 Period, JGC Holdings Corporation, GS Energy and IHI Corporation invested a combined $100 million in NuScale. Fluor and its advisors continue to engage with potential investors and capital providers to fund NuScale's path to commercialization.

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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NuScale expenses included in the determination of segment loss were as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2021202020212020
NuScale expenses$(34.8)$(39.1)$(65.9)$(74.6)
Less: Reimbursable expenses16.3 20.6 31.7 33.3 
Segment loss$(18.5)$(18.5)$(34.2)$(41.3)
Total assets by segment are as follows:
(in millions)June 30,
2021
December 31,
2020
Energy Solutions$1,118.5 $1,010.9 
Urban Solutions1,204.9 1,122.5 
Mission Solutions548.9 575.8 
Other35.6 37.8 
Revenue by project location follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2021202020212020
North America$2,065.4 $2,429.3 $4,037.1 $4,757.8 
Asia Pacific (includes Australia)409.5 342.7 746.1 651.4 
Europe379.1 623.1 634.0 1,100.0 
Central and South America301.0 210.5 565.7 634.2 
Middle East and Africa81.4 129.3 192.0 289.2 
Total revenue$3,236.4 $3,734.9 $6,174.9 $7,432.6 
5. Impairment, Restructuring and Other Exit Costs
Impairment
We did not recognize any impairment expense in Cont Ops during the 2021 and 2020 Quarters. Impairment expense, included in Cont Ops, for the 2021 and 2020 Periods is summarized as follows:
Six Months Ended
June 30,
(in thousands)20212020
Impairment expense:
Energy Solutions' equity method investment$26,392 $86,096 
Information technology assets— 16,269 
Total impairment expense$26,392 $102,365 
Our business has been adversely affected by the economic impacts of the outbreak of COVID-19 and the steep decline in oil prices that occurred in the early part of 2020. These events have created significant uncertainty and economic volatility and disruption, which have impacted and may continue to impact our business. We have experienced, and may continue to experience, reductions in demand for certain of our services and the delay or abandonment of ongoing or anticipated projects due to our clients’, suppliers’ and other third parties’ diminished financial condition or financial distress, as well as governmental budget constraints. These impacts may continue or worsen under prolonged stay-at-home, social distancing, travel restrictions and other similar orders or restrictions. Significant uncertainty still exists concerning the magnitude of the
12


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
impact and duration of these events, as well as our potential to make recovery from our clients pursuant to the contract and under rule of law. Because of these events, we performed interim impairment testing of our goodwill, intangible assets and investments during the 2020 Period, pursuant to which we recognized the impairment expense on an equity method investment and IT assets. We also recognized impairment expense on goodwill and intangible assets associated with the Stork business, now included in Disc Ops.
The valuation of our equity method investments utilized unobservable Level 3 inputs based on the investee's forecast of anticipated volumes and overhead absorption in a cyclical business.
Restructuring and Other Exit Costs
During 2019, we initiated a restructuring plan designed to optimize costs and improve operational efficiency. These efforts primarily relate to the rationalization of resources, investments, real estate and overhead across various geographies. Our recognition of costs for the planned restructuring activities was substantially completed by the end of 2020. Restructuring costs of $4 million, primarily related to severance, were recognized during both the 2020 Quarter and 2020 Period. We did not recognize any material restructuring costs during 2021.
A reconciliation of our restructuring liabilities follows:
(in thousands)SeveranceLease Exit CostsTotal
Balance as of December 31, 2019$30,479 $564 $31,043 
Restructuring charges accrued during the period3,720 334 4,054 
Cash payments / settlements during the period(18,858)(793)(19,651)
Currency translation1,140 1,141 
Balance as of December 31, 2020$16,481 $106 $16,587 
Cash payments / settlements during the period$(13,794)$— $(13,794)
Currency translation(54)— (54)
Balance as of June 30, 2021$2,633 $106 $2,739 
6. Income Taxes

The effective tax rate on earnings (loss) from Cont Ops was (9.3)% for the 2021 Quarter and (4.5)% for the 2021 Period compared to 137.2% and 356.1% for the corresponding periods of 2020. The effective tax rate in 2021 was unfavorably impacted by the increase in the valuation allowances against foreign tax credit carryforwards and certain foreign losses. This 2021 unfavorable impact was partially offset by favorable foreign tax differential. The effective tax rate in the 2020 Period was favorably impacted by the release of valuation allowances and rate benefits resulting from the carryback of our 2019 federal net operating loss as allowed by the CARES Act. This benefit was partially offset by an increase in the valuation allowance against foreign tax credit carryforwards and certain foreign losses, as well as a small addition to uncertain tax benefits. Earnings attributable to non-controlling interests from continuing operations, for which income taxes are not typically our responsibility, favorably impacted the effective tax rate for the 2021 Period.
7. Cash Paid for Interest and Taxes
Six Months Ended June 30,
(in thousands)20212020
Cash paid for:
Interest$42,074 $38,361 
Income taxes (net of refunds)68,200 31,649 
8. Partnerships and Joint Ventures

In the normal course of business, we form partnerships or joint ventures primarily for the execution of single contracts or projects. The majority of these partnerships or joint ventures are characterized by a 50 percent or less noncontrolling
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
ownership or participation interest with decision making and distribution of expected gains and losses typically being proportionate to the ownership or participation interest. Many of the partnership and joint venture agreements provide for capital calls to fund operations, as necessary. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in “Accounts receivable, net” was $218 million and $207 million as of June 30, 2021 and December 31, 2020, respectively.

One of our more significant joint ventures is COOEC Fluor, in which we have a 49% ownership interest. COOEC Fluor owns, operates and manages the Zhuhai Fabrication Yard in China’s Guangdong province. We made a capital contribution of $26 million to the joint venture during the first quarter of 2021, which satisfied our contractual funding requirements.
During the 2021 Quarter, we sold our 10% ownership interest in an infrastructure joint venture and recognized a gain of $20 million, which was included in Urban Solutions' segment profit. During the 2020 Quarter, we sold our 50% ownership interest in Sacyr Fluor and recognized a loss of $11 million, which was included in Energy Solutions' segment profit.
Variable Interest Entities

The aggregate carrying value of unconsolidated VIEs (classified under both "Investments” and “Other accrued liabilities”) was a net asset of $65 million and $174 million as of June 30, 2021 and December 31, 2020, respectively. Some of our VIEs have debt; however, such debt is typically non-recourse in nature. Our maximum exposure to loss as a result of our investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding necessary to satisfy the contractual obligations of the VIE. Future funding commitments as of June 30, 2021 for the unconsolidated VIEs were $57 million.
In some cases, we are required to consolidate certain VIEs. As of June 30, 2021, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.4 billion and $718 million, respectively. As of December 31, 2020, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.2 billion and $688 million, respectively. The assets of a VIE are restricted for use only for the particular VIE and are not available for our general operations.
We have agreements with certain VIEs to provide financial or performance assurances to clients, as discussed elsewhere.
9. Guarantees
In the ordinary course of business, we enter into various agreements providing performance assurances and guarantees to our clients on behalf of certain unconsolidated and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support project execution commitments. Performance guarantees have various expiration dates ranging from mechanical completion to a period extending beyond contract completion. The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $12 billion as of June 30, 2021. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed. For lump-sum contracts, the performance guarantee amount is the cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, we may have recourse to third parties, such as owners, partners, subcontractors or vendors for claims. The performance guarantee obligation was not material as of June 30, 2021 and December 31, 2020.
10. Contingencies and Commitments

We and certain of our subsidiaries are subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, we currently do not expect that the ultimate resolution of any open matters will have a material adverse effect on our financial position or results of operations.
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
The following disclosures for commitments and contingencies have been updated since the matter was presented in the 2020 10-K.

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

Since September 2018, ten separate purported shareholders' derivative actions were filed against current and former members of the Board of Directors, as well as certain of Fluor’s current and former executives. Fluor is named as a nominal defendant in the actions. These derivative actions purport to assert claims on behalf of Fluor and make substantially the same factual allegations as the securities class action matter discussed above and seek various forms of monetary and injunctive relief. These actions are pending in Texas state court (District Court for Dallas County), the U.S. District Court for the District of Delaware, the U.S. District Court for the Northern District of Texas, and the Court of Chancery of the State of Delaware. Certain of these actions were consolidated and stayed, at least while our motion to dismiss was pending in the securities class action matter. We anticipate seeking a further stay until final resolution of the securities class action. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of these actions.
There have been no changes to the disclosures for the following commitments and contingencies since the matter was presented in the 2020 10-K.

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

Fluor Limited, our wholly-owned subsidiary (“Fluor Limited”), and Fluor Arabia Limited, a partially-owned subsidiary
(“Fluor Arabia”), completed cost reimbursable engineering, procurement and construction management services for Sadara Chemical Company (“Sadara”) involving a large petrochemical facility in Jubail, Kingdom of Saudi Arabia. On August 23, 2019, Fluor Limited and Fluor Arabia Limited commenced arbitration proceedings against Sadara after it refused to pay invoices totaling approximately $100 million due under the contracts. As part of the arbitration proceedings, Sadara has asserted various counterclaims for damages and/or a refund of contract proceeds paid totaling approximately $574 million against Fluor Limited and Fluor Arabia Limited. We believe that the counterclaims asserted by Sadara are without merit and are vigorously defending these claims. While no assurance can be given as to the ultimate outcome of the counterclaims, we do not believe it is probable that a loss will be incurred in excess of amounts reserved for this matter. Accordingly, we have not recorded any further liability as a result of the counterclaims.
Various wholly-owned subsidiaries of Fluor, in conjunction with a partner, TECHINT, (“Fluor/TECHINT”) performed engineering, procurement and construction management services on a cost reimbursable basis for Barrick Gold Corporation involving a gold mine and ore processing facility on a site straddling the border between Argentina and Chile. In 2013 Barrick terminated the Fluor/TECHINT agreements for convenience and not due to the performance of Fluor/TECHINT. On August 12, 2016, Barrick filed a notice of arbitration against Fluor/TECHINT, demanding damages and/or a refund of contract proceeds paid of not less than $250 million under various claims relating to Fluor/TECHINT’s alleged performance. Proceedings were
15


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
suspended while the parties explored a possible settlement. In August 2019, Barrick drew down $36 million of letters of credit from Fluor/TECHINT ($24 million from Fluor and $12 million from TECHINT). Thereafter, Barrick proceeded to reactivate the arbitration. In December 2020, Barrick and Fluor/TECHINT exchanged detailed statements of claim and counterclaim pursuant to which Barrick's claim against Fluor/TECHINT now totals approximately $330 million. We believe that the claims asserted by Barrick are without merit and are vigorously defending these claims. While no assurance can be given as to the ultimate outcome of this matter, we do not believe it is probable that a loss will be incurred. Accordingly, we have not recorded any liability as a result of these claims.
Other Matters

We periodically evaluate our positions and the amounts recognized with respect to all our claims and back charges. As of June 30, 2021 and December 31, 2020, we had recorded $215 million and $216 million, respectively, of claim revenue for costs incurred to date. Additional costs, which will increase the claim revenue balance over time, are expected to be incurred in future periods. We had no material disputed back charges to suppliers or subcontractors as of June 30, 2021 and December 31, 2020.

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

Our operations are subject to and affected by federal, state and local laws and regulations regarding the protection of the environment. We maintain reserves for potential future environmental cost where such obligations are either known or considered probable, and can be reasonably estimated. We believe that our reserves with respect to future environmental cost are adequate and such future cost will not have a material effect on our consolidated financial position or results of operations.
In February 2020, we announced that the SEC is conducting an investigation and has requested documents and information related to projects for which we recorded charges in the second quarter of 2019. In April 2020, Fluor received a subpoena from the U.S. Department of Justice (“DOJ”) seeking documents and information related to the second quarter 2019 charges; certain of the projects associated with those charges; and certain project accounting, financial reporting and governance matters. Such inquiries are ongoing, and we have continued to respond to the SEC and DOJ and cooperate in these investigations.
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
11. Contract Assets and Liabilities

The following summarizes information about our contract assets and liabilities:
(in millions)June 30, 2021December 31, 2020
Information about contract assets:
Contract assets
Unbilled receivables - reimbursable contracts$621 $590 
Contract work in progress - lump-sum contracts374 270 
Contract assets$995 $860 
Advance billings deducted from contract assets$240 $308 
Six Months Ended
June 30,
(in millions)20212020
Information about contract liabilities:
Revenue recognized that was included in contract liabilities as of January 1$794 $591 
12. Remaining Unsatisfied Performance Obligations

We estimate that our RUPO will be satisfied over the following periods:
(in millions)June 30, 2021
Within 1 year$10,231 
1 to 2 years5,881 
Thereafter4,536 
Total RUPO$20,648 
During the 2021 Period, we removed approximately $2 billion from RUPO due to the cancellation of a chemicals project and a steel project in North America.
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
13. Debt and Letters of Credit

Debt consisted of the following:
(in thousands)June 30, 2021December 31, 2020
Borrowings under credit facility$— $— 
Current:
Other borrowings$4,738 $4,890 
Long-term:
Senior Notes
2023 Notes$588,740 $611,250 
Unamortized discount on 2023 Notes(213)(283)
Unamortized deferred financing costs(917)(1,203)
2024 Notes499,000 500,000 
Unamortized discount on 2024 Notes(1,861)(2,130)
Unamortized deferred financing costs(1,459)(1,670)
2028 Notes600,000 600,000 
Unamortized discount on 2028 Notes(917)(981)
Unamortized deferred financing costs(3,633)(3,885)
Total long-term$1,678,740 $1,701,098 

Credit Facility

As of June 30, 2021, letters of credit totaling $431 million were outstanding under our $1.65 billion credit facility, which matures in February 2023. The credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.65 to 1.0, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.5 billion, defined in the amended credit facility, which may be reduced to $1.25 billion upon the repayment of debt. The credit facility also contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, such collateral consisting broadly of our U.S. assets. Borrowings under the facility, which may be denominated in USD, EUR, GBP or CAD, bear interest at a base rate, plus an applicable borrowing margin. As of June 30, 2021, we could have borrowed an additional $783 million under our existing credit facility.
Uncommitted Lines of Credit
As of June 30, 2021, letters of credit totaling $915 million were outstanding under uncommitted lines of credit, although no amounts were drawn.
Senior Notes
In June 2021, we used a portion of the proceeds from the issuance of preferred stock to redeem $5 million of outstanding 2023 and 2024 Notes. We recognized $0.1 million in losses related to these redemptions which is included in G&A. In July 2021, we redeemed $21 million of outstanding 2023 and 2024 Notes and recognized $0.8 million in losses.
14. Preferred Stock

In May 2021, we issued 600,000 shares of Series A 6.5% cumulative perpetual convertible preferred stock in a private placement transaction involving a limited number of qualified institutional buyers.

The preferred stock, with respect to dividend rights or rights upon liquidation, winding-up or dissolution of Fluor, ranks (i) senior to all classes of common stock and to each other class of capital stock or series of preferred stock established after the issuance of the Series A preferred stock except in certain circumstances and (ii) junior to the our existing and future indebtedness.
18


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED

The preferred stock does not have a maturity date. Cumulative cash dividends on the preferred stock are payable at an annual rate of 6.5% quarterly in arrears on February 15, May 15, August 15 and November 15, beginning on August 15, 2021, upon declaration of the dividend by our Board of Directors. Dividends accumulate from the most recent date on which dividends have been paid or, if no dividends have been paid, from the first date of original issuance of the preferred stock. At June 30, 2021, $5 million of dividends on the preferred stock were accumulated however no amounts had been declared or accrued. In July 2021, our Board of Directors approved the payment of a total preferred stock dividend of $10 million.

Each share of preferred stock has a liquidation preference of $1,000 per share, plus accumulated but unpaid dividends, and is convertible, at the holder's option at any time into 44.9585 shares of our common stock per share of preferred stock. The conversion rate is subject to certain customary adjustments, but no payment or adjustment for accumulated but unpaid dividends will be made upon conversion, subject to certain limited exceptions. The preferred stock may not be redeemed by us; however, we may, at any time on or after May 20, 2022, elect to cause all outstanding shares of preferred stock to be automatically converted into shares of our common stock at the conversion rate, subject to certain conditions (and, if such automatic conversion occurs prior May 20, 2024, the payment of a cash make-whole premium). If a “make-whole fundamental change” occurs, we will in certain circumstances be required to increase the conversion rate for a holder who elects to convert its shares of preferred stock in connection with such make-whole fundamental change.

The shares of preferred stock have no voting rights except if and when dividends on the preferred stock are in arrears and have been unpaid with respect to six or more quarterly dividend payment dates (whether or not consecutive). In such events, the holders of the preferred stock would be entitled to elect two additional directors to the board of directors. Such voting rights are exercisable until all dividends in arrears have been paid in full, at which time the voting rights and the term of the two additional directors terminate.

Concurrent with the issuance of the convertible preferred stock, 200,000 shares of preferred stock previously designated as Series A Junior Participating Preferred Stock were eliminated and returned to the status of authorized but unissued shares of preferred stock, without designation.
15. Fair Value Measurements
The following table delineates assets and liabilities that are measured at fair value on a recurring basis:
 June 30, 2021December 31, 2020
 Fair Value HierarchyFair Value Hierarchy
(in thousands)TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:        
Deferred compensation trusts(1)
$10,760 $10,760 $— $— $9,626 $9,626 $— $— 
Derivative assets(2)
Foreign currency23,855 — 23,855 — 22,667 — 22,667 — 
Commodity4,257 — 4,257 — 806 — 806 — 
Liabilities:
Derivative liabilities(2)
Foreign currency$5,291 $— $5,291 $— $2,571 $— $2,571 $— 
Commodity209 — 209 — 5,059 — 5,059 — 
_________________________________________________________
(1)    Consists of registered money market funds and an equity index fund. These investments, which are trading securities, represent the net asset value at the close of business of the period based on the last trade or official close of an active market or exchange.
(2)    Foreign currency and commodity derivatives are estimated using pricing models with market-based inputs, which take into account the present value of estimated future cash flows.
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
We have measured assets and liabilities held for sale and certain other impaired assets at fair value on a nonrecurring basis.
The following summarizes information about financial instruments that are not required to be measured at fair value :
  June 30, 2021December 31, 2020
(in thousands)Fair Value
Hierarchy
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Assets:     
Cash(1)
Level 1$1,424,542 $1,424,542 $1,180,024 $1,180,024 
Cash equivalents(2)
Level 21,286,573 1,286,573 1,018,757 1,018,757 
Marketable securities(2)
Level 231,651 31,651 23,345 23,345 
Notes receivable, including noncurrent portion(3)
Level 325,381 25,381 28,488 28,488 
Liabilities: 
2023 Senior Notes(4)
Level 2$587,610 $600,573 $609,764 $578,554 
2024 Senior Notes(4)
Level 2495,680 527,727 496,200 494,045 
2028 Senior Notes(4)
Level 2595,450 610,188 595,134 599,220 
Other borrowings(5)
Level 24,738 4,738 4,890 4,890 
_________________________________________________________
(1)    Cash consists of bank deposits. Carrying amounts approximate fair value.
(2)    The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value.
(3)    Notes receivable are carried at net realizable value which approximates fair value. Factors considered in determining the fair value include the credit worthiness of the borrower, current interest rates, the term of the note and any collateral pledged as security. Notes receivable are periodically assessed for impairment.
(4)     The fair value of the Senior Notes was estimated based on the quoted market prices and Level 2 inputs.
(5)    Other borrowings represent bank loans and other financing arrangements which mature within one year. The carrying amount of borrowings under these arrangements approximates fair value because of the short-term maturity.
16. Stock-Based Compensation
Our executive and director stock-based compensation plans are described more fully in the 2020 10-K. In the 2021 Period, RSUs totaling 596,391 were granted to executives and directors at a weighted-average grant date fair value of $18.67 per share. RSUs granted to executive officers in 2021 and 2020 generally vest over three years. RSUs granted to directors in 2021 and 2020 vested upon grant. The fair value of RSUs represents the closing price of our common stock on the date of grant.
Stock options for the purchase of 481,626 shares at a weighted-average exercise price of $17.96 per share were awarded to executives during the 2021 Period. The exercise price of options represents the closing price of our common stock on the date of grant. The options granted in 2021 and 2020 generally vest over three years and expire ten years after the grant date.
Performance-based award units totaling 613,868 were awarded to executive officers during the 2021 Period. These awards generally vest after a period of 3 years and contain annual performance conditions for each of the 3 years of the vesting period. Under GAAP, performance-based awards are not deemed granted until the performance targets have been established. The performance targets for each year are generally established in the first quarter. Accordingly, only one-third of the units awarded in any given year are deemed to be granted each year of the 3 year vesting periods. During 2021, the following units were granted for GAAP purposes:
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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
Performance-based Award Units Granted in 2021Weighted Average
Grant Date
Fair Value
Per Share
2021 Performance Award Plan204,623$20.49
2020 Performance Award Plan385,455$19.98
2019 Performance Award Plan116,844$20.18
The number of units are adjusted at the end of each performance period based on achievement of certain performance targets and market conditions, as defined in the award agreements. The grant date fair value is determined by adjusting the closing price of our common stock on the date of grant for the effect of the market condition. Units granted under the 2021, 2020 and 2019 performance award plans can only be settled in our stock and are accounted for as equity awards.
There were no RSUs, options or performance-based award units awarded to executives during the 2020 Period. Instead, RSUs, options and performance-based award units were awarded to executives in September 2020 following the filing of our 2019 10-K.
17. Retirement Plans
Net periodic pension expense for our DB plans includes the following components:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)Location of Component2021202020212020
Service costCost of revenue$4,398 $4,196 $8,791 $8,400 
Interest costCorp G&A1,779 2,235 3,557 4,476 
Expected return on assetsCorp G&A(7,248)(6,288)(14,487)(12,592)
Amortization of prior service creditCorp G&A(218)(218)(436)(436)
Recognized net actuarial lossCorp G&A1,439 1,134 2,876 2,272 
Net periodic pension expense$150 $1,059 $301 $2,120 
We currently expect to contribute up to $16 million into our DB plans during 2021, which we expect to be in excess of the minimum funding required. During the 2021 Period, we made contributions of approximately $12 million.
In addition to our DB plans, we participate in multiemployer pension plans for unionized construction and maintenance craft employees. Company contributions, based on the hours worked by employees covered under various collective bargaining agreements, are recognized as net periodic pension expense. Upon withdrawal from a multiemployer plan, we may have an obligation to make additional contributions for our share of any unfunded benefit obligation, but only if we do not meet the requirements of any applicable exemptions. For one of our discontinued operations, we participate in one multiemployer plan in which we are aware of a significant unfunded benefit obligation. However, we believe we qualify for an exemption and do not believe we have a probable payment to the plan. Therefore, we have not recognized a liability related to this unfunded benefit obligation.
18. Derivatives and Hedging
Derivatives Designated as Hedges
As of June 30, 2021, we had total gross notional amounts of $517 million of foreign currency contracts outstanding (primarily related to the Canadian Dollar, Chinese Yuan, British Pound, Euro, Indian Rupee and Philippine Peso) that were designated as hedges. These foreign currency contracts are of varying duration, none of which extend beyond December 2024. There were no commodity contracts outstanding that were designated as hedges as of June 30, 2021.
21


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
The fair values of derivatives designated as hedging instruments follows:
 Asset DerivativesLiability Derivatives
(in thousands)Balance Sheet
Location
June 30,
2021
December 31,
2020
Balance Sheet
Location
June 30,
2021
December 31,
2020
Foreign currency contractsOther current assets$16,802 $20,004 Other accrued liabilities$975 $
Foreign currency contractsOther assets2,902 2,184 Noncurrent liabilities52 25 
Total $19,704 $22,188  $1,027 $29 
The after-tax amount of gain (loss) recognized in OCI associated with derivative instruments designated as cash flow hedges follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
Cash Flow Hedges (in thousands)2021202020212020
Foreign currency contracts5,315 1,143 6,188 (3,997)
Commodity contracts— — (108)
5,315 1,146 6,188 (4,105)
The after-tax amount of gain (loss) reclassified from AOCI into earnings associated with derivative instruments designated as cash flow hedges follows:
  Three Months Ended
June 30,
Six Months Ended
June 30,
Cash Flow Hedges (in thousands)Location of Gain (Loss)2021202020212020
Foreign currency contractsCost of revenue$5,159 $(88)$9,502 $538 
Commodity contractsCost of revenue— (112)— (100)
Interest rate contractsInterest expense(419)(419)(838)(838)
Total $4,740 $(619)$8,664 $(400)
Derivatives Not Designated as Hedges
As of June 30, 2021, we also had total gross notional amounts of $175 million of foreign currency contracts and $27 million of commodity contracts outstanding that were not designated as hedges. The foreign currency contracts primarily related to contract obligations denominated in nonfunctional currencies. The fair value of derivatives not designated as hedges, as well as the associated gains and losses were not material for any period presented.
22


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
19. Other Comprehensive Income (Loss)
The components of OCI follow:
Three Months Ended
June 30, 2021
Three Months Ended
June 30, 2020
(in thousands)Before-Tax
Amount
Tax
Benefit
(Expense)
Net-of-Tax
Amount
Before-Tax
Amount
Tax
Benefit
(Expense)
Net-of-Tax
Amount
OCI:      
Foreign currency translation adjustments$(1,279)$— $(1,279)$31,072 $— $31,072 
Ownership share of equity method investees’ OCI(847)772 (75)(14,901)4,247 (10,654)
DB plan adjustments1,201 (10)1,191 998 (43)955 
Unrealized gain (loss) on hedges806 (231)575 1,297 468 1,765 
Total OCI(119)531 412 18,466 4,672 23,138 
Less: OCI attributable to NCI(394)— (394)2,421 — 2,421 
OCI attributable to Fluor$275 $531 $806 $16,045 $4,672 $20,717 

Six Months Ended
June 30, 2021
Six Months Ended
June 30, 2020
(in thousands)Before-Tax
Amount
Tax
Benefit
(Expense)
Net-of-Tax
Amount
Before-Tax
Amount
Tax
Benefit
(Expense)
Net-of-Tax
Amount
OCI:
Foreign currency translation adjustments$1,431 $(11)$1,420 $(80,029)$— $(80,029)
Ownership share of equity method investees’ OCI(3,287)1,148 (2,139)(17,420)(1,406)(18,826)
DB plan adjustments2,401 441 2,842 2,001 — 2,001 
Unrealized gain (loss) on hedges(2,643)167 (2,476)(4,577)872 (3,705)
Total OCI(2,098)1,745 (353)(100,025)(534)(100,559)
Less: OCI attributable to NCI(596)— (596)(1,796)— (1,796)
OCI attributable to Fluor$(1,502)$1,745 $243 $(98,229)$(534)$(98,763)

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FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
The changes in AOCI balances follow:
(in thousands)Foreign
Currency
Translation
Ownership
Share of
Equity Method
Investees’ OCI
DB PlansUnrealized
Gain (Loss)
on Hedges
AOCI, Net
Attributable to Fluor:     
Balance as of March 31, 2021$(258,059)$(56,048)$(116,938)$13,576 $(417,469)
OCI before reclassifications(885)(220)— 5,315 4,210 
Amounts reclassified from AOCI— 145 1,191 (4,740)(3,404)
Net OCI(885)(75)1,191 575 806 
Balance as of June 30, 2021$(258,944)$(56,123)$(115,747)$14,151 $(416,663)
Attributable to NCI:
Balance as of March 31, 2021$(4,370)$— $— $— $(4,370)
OCI before reclassifications(394)— — — (394)
Amounts reclassified from AOCI— — — — — 
Net OCI(394)— — — (394)
Balance as of June 30, 2021$(4,764)$— $— $— $(4,764)
(in thousands)Foreign
Currency
Translation
Ownership
Share of
Equity Method
Investees’ OCI
DB PlansUnrealized
Gain (Loss)
on Hedges
AOCI, Net
Attributable to Fluor:     
Balance as of December 31, 2020$(260,960)$(53,984)$(118,589)$16,627 $(416,906)
OCI before reclassifications2,016 (2,423)— 6,188 5,781 
Amounts reclassified from AOCI— 284 2,842 (8,664)(5,538)
Net OCI2,016 (2,139)2,842 (2,476)243 
Balance as of June 30, 2021$(258,944)$(56,123)$(115,747)$14,151 $(416,663)
Attributable to NCI:
Balance as of December 31, 2020$(4,168)$— $— $— $(4,168)
OCI before reclassifications(596)— — — (596)
Amounts reclassified from AOCI— — — — — 
Net OCI(596)— — — (596)
Balance as of June 30, 2021$(4,764)$— $— $— $(4,764)
24


FLUOR CORPORATION
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
(in thousands)Foreign
Currency
Translation
Ownership
Share of
Equity Method
Investees’ OCI
DB PlansUnrealized
Gain (Loss)
on Hedges
AOCI, Net
Attributable to Fluor:     
Balance as of March 31, 2020$(349,834)$(43,628)$(98,151)$(7,740)$(499,353)
OCI before reclassifications28,651 (10,786)1,146 19,012 
Amounts reclassified from AOCI— 132 954 619 1,705 
Net OCI28,651 (10,654)955 1,765 20,717 
Balance as of June 30, 2020$(321,183)$(54,282)$(97,196)$(5,975)$(478,636)
Attributable to NCI:
Balance as of March 31, 2020$(9,268)$— $— $— $(9,268)
OCI before reclassifications2,421