FLUOR CORP (FLR) FY 2024 MD&A

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 2023 compared to 2022 are included in our 2023 10-K and have not been repeated in this 10-K.

Developments in Our Business

In the first quarter of 2024, we completed the sale of Stork's operations in continental Europe. During April 2024, we also entered into a definitive agreement to sell Stork's U.K. operations, which we completed in the first quarter of 2025. The sale did not meet the requirements for discontinued operations as of December 31, 2024 and will not have a material impact on the financial statements. In the third quarter of 2024, we decided to close our Stork operations in Trinidad and Tobago which required us to take a $7 million severance charge. After completing the wind down of the Trinidad and Tobago operations, Stork's divestiture will be complete.

Beginning in October 2024, based principally on their equity sales, we no longer met the criteria to consolidate NuScale. As a consequence, their results for all periods prior to October 2024 were consolidated, but we deconsolidated NuScale after that date and recognized a pre-tax gain of $1.6 billion in the fourth quarter of 2024, based on a stock price of $13.15 for our 126 million shares. We recognize the fair value of our investment in NuScale on a mark-to-market basis based upon the prevailing price of their stock on our balance sheet dates, which resulted in an additional pre-tax gain of $604 million for the fourth quarter of 2024. After its deconsolidation, NuScale is included in equity method earnings on our statement of operations.

32

Table of Contents

Results of Operations

33

Table of Contents

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

(2)Backlog represents the total amount of revenue we expect to record in the future based upon contracts that have been awarded to us. Backlog is stated in terms of gross revenues and may include significant estimated amounts of third-party, subcontracted, CFM and pass-through costs as well as other forms of variable consideration. For projects related to proportionately consolidated joint ventures, we include only our percentage ownership of each joint venture's backlog. We recognize new awards into backlog when we and our client have approved the contract (written or verbal) and are committed to perform our respective obligations. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Backlog differs from RUPO discussed elsewhere in this 10-K. Backlog includes the amount of revenue we expect to recognize under ongoing operations and maintenance contracts for the remainder of the current year renewal period plus up to 3 additional years if renewal is considered to be probable, while RUPO includes only the amount of revenue we expect to recognize under contracts with definite terms and substantive termination provisions. In 2025, we expect to execute approximately half of our ending 2024 backlog.

(3)Includes backlog of $702 million and $1.3 billion for legacy projects in a loss position as of December 31, 2024 and 2023, respectively.

Consolidated revenue increased in 2024 primarily driven by an increase in execution activities on several recently awarded projects in our Urban Solutions segment partially offset by revenue declines in Energy Solutions and Mission Solutions.

Earnings before taxes significantly improved in 2024 driven by an increase in execution activities on recently awarded life sciences and mining projects as well as the completion or resolution of certain legacy projects in 2024, partially offset by declines in profit due to the recognition of inflation-adjusted variable consideration on certain projects in 2023. The improvement in earnings before taxes in 2024 was also attributable to losses recognized in 2023 on the sales of our AMECO and Stork businesses in Latin America. Further, earnings before taxes in 2024 included a foreign currency gain compared to a loss in 2023.

Net earnings excluding amounts attributable to equity method earnings were as follows:

34

Table of Contents

The effective tax rate on earnings was 103%, 75% and 70% for 2024, 2023 and 2022, respectively. A reconciliation of U.S. statutory federal tax expense to total income tax expense follows:

In 2024, we received refunds of $169 million, including interest, from the IRS attributable to the 2013 tax year that was originally recognized as a receivable in 2020 pursuant to the CARES Act.

Beginning in January 2024, many non-US tax jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion Model Rules, also known as Pillar Two. Pillar Two establishes a global minimum tax of 15% on large multinational corporations. We considered the applicable tax law changes in the countries in which we operate and have determined that there is no material impact to our tax provision in 2024. We will continue to evaluate the impact of these tax law changes on future periods.

Our results were significantly impacted by evolving foreign currency rates in 2024. During 2024, the U.S. dollar appreciated against the Euro, British Pound, Canadian Dollar and Mexican Peso.

Our profit margin percentages may be favorably or unfavorably impacted by a change in the amount of CFM recorded. We record revenue on a gross basis, including CFM when we have concluded that we are a principal with respect to such materials and services, though the timing of CFM receipt can significantly impact completion percentage.

Segment Operations

We are one of the larger technical and professional services firms providing engineering and design, project management, procurement, construction, operations and maintenance, and fabrication and modularization services.

Urban Solutions

Revenue in 2024 significantly increased compared to 2023 primarily due to the ramp up of execution activities on several recently awarded projects including two life sciences projects, a large metals project, a green steel project and a large mining project.

Segment profit increased in 2024 due to the ramp up of several recently awarded projects, partially offset by cost growth on an infrastructure project. Segment profit in 2024 included an agreement to the terms of a change order on a legacy infrastructure project compared to a $59 million charge for rework associated with subcontractor design errors and related schedule impacts on the same project during 2023. Further, segment profit in 2023 included the favorable settlement of a claim on an international bridge project. The changes in segment profit margin in 2024 reflect these same factors.

New awards in 2024 included a large life sciences project, an incremental award on a large metals project as well as several significant contract extensions for Plant & Facility Services. Backlog increased during 2024 due to these 2 large awards. Our staffing business does not report new awards or backlog.

Results for the fourth quarter of 2024. Segment profit in the fourth quarter of 2024 significantly decreased due to the favorable settlement of a claim on an international bridge project during 2023.

35

Table of Contents

Energy Solutions

Revenue declined during 2024 primarily due to a decline in execution activity for several projects nearing completion, a deferral of revenue recognized on a large project due to reduced productivity and lower revenue on our refinery projects in Mexico as well as revenue on inflation-adjusted variable consideration recognized in 2023. The decreases in revenue during 2024 were partially offset by the ramp up of execution activities on 3 chemicals projects.

Segment profit declined in 2024 primarily due to the initial recognition of inflation-adjusted variable consideration on certain downstream projects during 2023. Segment profit in 2024 was also impacted by cost growth related to schedule delays and reduced productivity on a large project in the late stages of execution. We recognized a positive adjustment upon the negotiation of change orders on the same project in 2023. Further, cost growth on a construction-only subcontract executed by our joint venture in Mexico resulted in charges totaling $66 million during 2024. The decrease in segment profit during 2024 was partially offset by final negotiations and handover of a large upstream legacy project which was completed during the second quarter of 2024. We recorded $91 million for cost growth on the now-completed project during 2023. Segment profit in 2024 also included gains of $47 million on embedded foreign currency derivatives compared to a loss of $17 million in 2023. The changes in segment profit margin in 2024 reflect these same factors.

New awards and backlog were lower in 2024 compared to 2023. New awards booked during 2024 included a full notice to proceed on a downstream project in Mexico. Backlog declined during 2024 due to the execution pace exceeding new award activity.

Results for the fourth quarter of 2024. Segment profit in the fourth quarter of 2024 significantly increased which reflected $33 million for cost growth and schedule extension in 2023 on the now-completed, large upstream legacy project.

Mission Solutions

Revenue declined slightly during 2024 compared to 2023 primarily due to the cancellation of a project in late 2023.

Segment profit and profit margin significantly improved during 2024 primarily due to the recognition of a $30 million charge in 2023 for cost growth associated with schedule delays on a weapons facility project that is now complete. The increase in segment profit and profit margin in 2024 was further driven by improved performance on 2 DOE contracts in 2024, partially offset by the cancellation of the aforementioned project.

New awards increased during 2024 compared to 2023 due to task order contracts awarded under the Air Force Contract Augmentation Program V as well as contract extension awards at two DOE sites. Backlog included $665 million and $2.7 billion of unfunded government contracts as of December 31, 2024 and 2023, respectively. Unfunded backlog reflects our estimate of future revenue under awarded government contracts for which funding has not yet been appropriated. We do not report new awards or backlog for projects related to our equity method investments even though these awards may be significant contributors to earnings in future periods. For example, our new awards and backlog does not reflect the Pantex management and operations contract, recently awarded to a joint venture in which we have significant influence but a noncontrolling interest. The estimated value of the contract to the joint venture is $30 billion, if all of the 5-year options are exercised.

Other

Other includes the operations of NuScale prior to deconsolidation and the operations of the remaining Stork and AMECO business prior to their sale.

36

Table of Contents

Segment profit in 2024 includes a $7 million charge for severance expected upon liquidation of Stork's operations in Trinidad and Tobago as well as an $11 million gain on the sale of Stork's operations in continental Europe. We completed the sale of Stork's U.K. operations in the first quarter of 2025. With the completion of the Stork U.K. divestiture, we expect the results of this segment to be immaterial in 2025.

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).

G&A

The decrease in compensation expense in 2024 was primarily driven by lower performance-based compensation. The increase in exit costs in 2024 was driven by the Stork divestiture.

Net Interest Income (Expense)

The decrease in net interest income during 2024 was primarily due to a decrease in 2024 interest rates earned on cash deposits including at our joint ventures in Canada and Mexico as well as the interest savings following the extinguishment of our 2024 Notes at the end of 2023.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our significant accounting policies are described in the notes to our financial statements. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on information available through the date of the issuance of the financial statements and, accordingly, actual results in future periods could differ from these estimates. Significant judgments and estimates used in the preparation of our financial statements apply to the following critical accounting policies:

Revenue Recognition for Long-Term Contracts. We recognize our engineering and construction contract revenue over time as we provide services to satisfy our performance obligations. We generally use the cost-to-cost percentage-of-completion measure of progress as it best depicts how control transfers to our clients. The cost-to-cost approach measures progress towards completion based on the ratio of cost incurred to date compared to total estimated contract cost. Use of the cost-to-cost measure of progress requires us to prepare estimates of total expected revenue and cost to complete our projects.

CFM are included in revenue and cost of revenue when (1) we believe that we are acting as a principal rather than as an agent, (2) the contract includes construction activity and (3) we have visibility into the amount the customer is paying for the materials or there is a reasonable basis for estimating the amount. If we lose visibility mid-project, we cease recognizing future CFM but do not de-recognize previous amounts of CFM.

37

Table of Contents

Due to the nature of our industry, there is significant complexity in our estimation of total expected revenue and cost, for which we must make significant judgments. Our contracts with our customers may contain several types of variable consideration, including claims, unpriced change orders, award and incentive fees, liquidated damages and penalties or other provisions that can either increase or decrease the contract price to arrive at estimated revenue. Certain variable consideration, such as award and incentive fees, generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We estimate variable consideration at the most likely amount to which we expect to be entitled upon completion of a project. We include estimated amounts in the transaction price to the extent it is probable we will realize that amount. Our estimates of variable consideration and our determination of its inclusion in project revenue are based on an assessment of our anticipated performance and other information that may be available to us.

At a project level, we have specific practices and procedures to review our estimate of total revenue and cost. Each project team reviews the progress and execution of our performance obligations, which impact the project’s accounting outcome. As part of this process, the project team reviews information such as any outstanding key contract matters, progress towards completion and the related program schedule and identified risks and opportunities. The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our project estimates, which can change from period to period due to a variety of factors including:

•Complexity in original design;

•Extent of changes from original design;

•Different site conditions than assumed in our bid;

•The productivity, availability and skill level of labor;

•Weather conditions when executing a project;

•The technical maturity of the technologies involved;

•Length of time to complete the project;

•Availability and cost of equipment and materials;

•Subcontractor and joint venture partner performance;

•Expected costs of warranties; and

•Our ability to recover for additional contract costs.

We recognize changes in contract estimates on a cumulative catch-up basis in the period in which the changes are identified. Such changes in contract estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in prior periods. Changes in contract estimates may also result in the reversal of previously recognized revenue if the current estimate adversely differs from the previous estimate. If we estimate that a project will have costs in excess of revenue, we recognize the total loss in the period it is identified.

Fair Value Measurements. We are required to use fair value measurement techniques with inputs that require the use of estimates and involve significant judgment for our impairment testing and in measuring held for sale assets. We estimate the fair value of our assets by considering the results of either the income-based or market-based valuation approach. 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. 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 impacted by volatility in interest rates. Preparation of long-term forecasts involve significant judgments involving consideration of our backlog, expected future awards, customer attrition, working capital assumptions, and general market trends and conditions. Significant changes in these forecasts or any valuation assumptions, such as the discount rate selected, could affect the estimated fair value of our assets and could result in impairment expenses. 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.

We elected the fair value option of accounting for our investment in NuScale that would have otherwise been recorded under the equity method of accounting. We recognize the fair value of our investment in NuScale on a mark-to-market basis based upon the prevailing price of their stock on our balance sheet dates, which may subject our consolidated earnings to volatility. No estimates are used in the determination of the fair value of our investment in NuScale.

Recent Accounting Pronouncements

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

Litigation and Matters in Dispute Resolution

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

38

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity arises from available cash and cash equivalents and marketable securities, cash generated from operations, capacity under our credit facility and, when necessary, access to capital markets. We have committed and uncommitted lines of credit available for revolving loans and letters of credit. We believe that for at least the next 12 months, anticipated cash generated from operations, along with our unused credit capacity and cash position, is sufficient to support operating requirements and debt maturities. We regularly review our sources and uses of liquidity and may pursue opportunities to address our liquidity needs.

Our credit facility contains provisions that will require us to provide collateral to secure the facility should we be downgraded to BB by S&P and Ba2 by Moody's, which is a one notch downgrade from both agencies' current ratings. If we are required to provide collateral, it would consist broadly of liens on our U.S. assets.

As of December 31, 2024, letters of credit totaling $483 million were outstanding under our $1.8 billion credit facility, which was amended in February 2025 to increase the facility to $2.2 billion and extend the maturity to February 2028. The prior and amended credit facility contains customary financial covenants, including a debt-to-capitalization ratio that cannot exceed 0.60 to 1.00, based upon total shareholders' equity excluding AOCI, a limitation on the aggregate amount of debt of the greater of $750 million or €750 million for our subsidiaries, and a minimum liquidity threshold of $1.2 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 or GBP, bear interest at a base rate, plus an applicable borrowing margin. As of December 31, 2024 and through the issuance of this 10-K, we had not made any borrowings under our credit line. We have a sublimit of up to $1.0 billion in aggregate cash advances and financial letters of credit available to us under our credit facility with a current borrowing capacity of $834 million.

Cash and cash equivalents combined with marketable securities were $3.0 billion and $2.6 billion as of December 31, 2024 and 2023, respectively. Our cash balance as of December 31, 2023 includes cash held by NuScale of $118 million. With the deconsolidation of NuScale beginning in October 2024, cash balances held by NuScale are no longer included in our cash and cash equivalents. Cash and cash equivalents are held in numerous accounts throughout the world to fund our global project execution activities. Non-U.S. cash and cash equivalents amounted to $1.1 billion as of both December 31, 2024 and 2023. 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.

In evaluating our liquidity needs, we consider cash and cash equivalents held by our consolidated variable interest entities (joint ventures and partnerships). These amounts (which totaled $333 million and $491 million as of December 31, 2024 and 2023, 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 $79 million and $80 million as of December 31, 2024 and 2023, respectively) are likely to be sustained or consumed over the near term for project execution activities and the cash flow requirements of our various foreign operations. In some cases, it may not be financially efficient to move cash and cash equivalents between countries due to statutory dividend limitations and/or adverse tax consequences. We did not consider any cash to be permanently reinvested outside the U.S. as of December 31, 2024 and 2023, other than unremitted earnings required to meet our working capital and long-term investment needs in non-U.S. foreign jurisdictions where we operate.

In December 2024, we used $125 million to repurchase and cancel 2,353,280 shares of common stock under our repurchase program. Over 28,000,000 shares could still be purchased under the repurchase program as of December 31, 2024. Between January 1, 2025 and February 14, 2025, we repurchased and canceled approximately 0.7 million shares of our common stock for $37 million. We will continue to repurchase shares of our stock throughout 2025 to return capital to our shareholders.

39

Table of Contents

Operating Activities

Cash flows from operating activities result primarily from our core EPC activities and are affected by our earnings level and changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by our volume of work and billing schedules on our projects. These levels are also impacted by the stage of completion and commercial terms of engineering and construction projects, as well as our execution of our projects compared to their budget. Working capital requirements also vary by project and the payments terms agreed to with our clients, vendors and subcontractors. Most contracts require payments as the projects progress. Additionally, certain projects receive advance payments from clients. A typical trend for our lump-sum projects is to have higher cash balances during the initial phases of execution due to deposits paid to us which then diminish toward the end of the construction phase. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects. We maintain cash reserves and borrowing facilities to provide additional working capital in the event that a project’s net operating cash outflows exceed its available cash balances. As of December 31, 2024, our backlog included $702 million for ongoing legacy projects in a loss position, including approximately $237 million of estimated unfunded losses associated therewith. The comparable amounts in 2023 were $1.3 billion of backlog and $344 million of unfunded losses.

40

Table of Contents

Our operating cash flow for 2024 significantly improved driven by decreases in working capital on several large projects. The improvement in operating cash flow was also attributable to customer payments on several large projects, distributions from joint ventures of $367 million and refunds of $169 million, including interest, from the IRS attributable to the 2013 tax year that was originally recognized as a receivable in 2020 pursuant to the CARES Act. We also funded an estimated $99 million on loss projects during 2024.

Investing Activities

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

Capital expenditures in 2024 were primarily related to improvements to our new office lease in Houston compared to expenditures for construction equipment and investments in IT in 2023.

Proceeds from sales of assets during 2024 included $67 million for the sale of our Stork's European business compared to $17 million for the sale of our AMECO South America business in 2023.

Investments in unconsolidated partnerships and joint ventures in 2024 included capital contributions to 3 infrastructure joint ventures and an Energy Solutions joint venture compared to capital contributions to 3 infrastructure joint ventures and a Mission Solutions joint venture in 2023.

Return of capital from partnerships and joint ventures in 2024 included capital distribution from an infrastructure joint venture.

Financing Activities

We have a stock repurchase program, authorized by our Board of Directors, to purchase shares in the open market or privately negotiated transactions at our discretion. In November 2024, the Board authorized an additional 20,000,000 shares to the repurchase program. In December 2024, we repurchased 2,353,280 shares of common stock under the repurchase program for total consideration of $125 million. As of December 31, 2024, over 28,000,000 shares could still be purchased under the repurchase program.

Key provisions of our debt and debt-related matters are described in the notes to the financial statements. During 2024, we redeemed $57 million of aggregate outstanding 2028 Notes. During 2023, we redeemed the remaining €129 million of outstanding 2023 Notes for $140 million and completed a tender offer in which we repurchased $115 million of outstanding 2024 Notes, excluding accrued interest, for consideration of $975.03 per $1,000 principal amount of the notes.

In August 2023, we issued our 1.125% Convertible Senior Notes (the “2029 Notes”). The conversion rate for the 2029 Notes is 22.0420 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $45.37 per share. Holders may convert their 2029 Notes any time before May 2029 under the following conditions:

•if the last reported price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to $58.98 on each applicable trading day;

•during the 5-business day period after any 5-consecutive trading day period in which the trading price of the 2029 Notes was less than 98% of the product of the last reported stock price and the conversion rate;

•if we call any or all of the 2029 Notes for redemption; or

•upon the occurrence of specified events as described in the applicable indenture.

In addition, holders may convert their 2029 Notes any time beginning in May 2029 and prior to maturity without regard to the foregoing circumstances. Upon any conversion, we will repay the principal amount of the notes in cash and may elect to convey the conversion premium in any combination of cash and shares of our common stock. Certain events could cause the conversion rate to increase, including a make-whole fundamental change or redemption, but in no event will the conversion rate for a single note exceed 29.2056 shares of our common stock, other than for customary adjustments described in the applicable indenture.

After August 2026, we may elect to redeem up to all of the outstanding 2029 Notes if our common stock has a prevailing per share closing price in excess of $58.98. In such election, all principal would be settled in cash and could result in a make-whole premium if the holders also elect to convert. We may elect to pay any make-whole premium in any combination of cash and shares of our common stock.

41

Table of Contents

In connection with the 2029 Notes offering, we entered into capped call transactions with certain banks. The strike price of the capped call options corresponds to the conversion price of the 2029 Notes of $45.37 per share. The capped call options are expected to offset potential dilution to our common stock upon conversion of any 2029 Notes and/or offset any cash payments we are required to make for any conversion premium if our stock price is greater than $45.37. The upper limit of the capped calls is $68.48 per share. If our stock price exceeds $68.48, there would be unmitigated dilution and/or no offset of any cash payments attributable to the amount by which our stock exceeds the cap price. We will not be required to make any cash payments to option counterparties upon the exercise of capped call options, but we will be entitled to receive from them shares of our common stock or an amount of cash based on the amount by which the market price of our common stock exceeds the strike price of the capped calls.

Distributions paid to holders of NCI represent cash outflows to partners of consolidated partnerships or joint ventures created primarily for the execution of single contracts or projects. Distributions in 2024 related to a Mission Solutions joint venture.

During 2024, prior to deconsolidation, NuScale received $80 million in proceeds from the issuance of their common stock.

Letters of Credit

As of December 31, 2024, letters of credit totaling $483 million were outstanding under committed lines of credit. As of December 31, 2024, letters of credit totaling $944 million were outstanding under uncommitted lines of credit including letters of credit totaling $344 million for two lump-sum projects in Kuwait that are substantially complete except for the resolution of unapproved change orders and extension of time claims. Letters of credit are ordinarily provided to indemnify our clients if we fail to perform our obligations under our contracts. Surety bonds may be used as an alternative to letters of credit.

Guarantees

The maximum potential amount of future payments that we could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed, was estimated to be $16 billion as of December 31, 2024.

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