Fluor (FLR) risk factors, FY2024 10-K

Risks Related to our Operations

1. 01We are vulnerable to the cyclical nature of the markets we serve
2. 02Our revenue and earnings are largely dependent on new awards
3. 03The nature of our contracts, particularly our lump-sum contracts, subject us to risks associated with delays and cost overruns, which may not be fully recoverable and may result in reduced profits or losses that could have a material impact on us
4. 04Intense competition in the EPC industry can impact our revenue and profits
5. 05Our ability to operate profitably requires us to hire and retain qualified personnel
6. 06The success of teaming arrangements and joint ventures depends on the satisfactory performance by our venture partners over whom we may have little or no control, and the failure of those partners to perform their obligations could impose additional obligations on us that could have a material impact on us
7. 07We are dependent upon suppliers and subcontractors to complete many of our contracts
8. 08Cybersecurity breaches of our systems and IT could adversely impact us
9. 09Systems and IT interruption, as well as new systems implementation, could adversely impact our ability to operate
10. 10We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations
11. 11We have international operations that are subject to foreign economic and political uncertainties and risks. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses
12. 12Our backlog is subject to unexpected adjustments and cancellations
13. 13Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses
14. 14Our businesses could be materially and adversely affected by events outside of our control
15. 15Our actual results could differ from the estimates used to prepare our financial statements
16. 16Our earnings are subject to volatility due to recurring fair value measurements of our investment in NuScale
17. 17If we experience delays or defaults in client payments, we could be negatively impacted
18. 18Our U.S. government contracts and contracting rights may be terminated or otherwise adversely impacted at any time, and our inability to win or renew government contracts during regulated procurement processes could harm our operations and reduce our projects and revenues
19. 19Our effective tax rate and tax positions may vary
20. 20It can be very difficult and expensive to obtain the insurance we need for our business operations
21. 21If we do not have adequate indemnification for our nuclear services, it could adversely affect our business and financial condition
22. 22Foreign currency risks could have an adverse impact on us
23. 23The loss of one or a few clients could have an adverse effect on us
24. 24Our business may be negatively impacted if we are unable to adequately protect IP rights
25. 25Our clients require broad ownership rights in the work product and other materials we deliver. If we are unable to retain ownership of our IP and improvements thereto, it may affect our ability to provide similar services and other projects in the future, which could have a material adverse effect on us
26. 26Climate change, natural disasters and related environmental issues could have a material adverse impact on us
27. 27Increasing scrutiny and changing expectations from stakeholders with respect to sustainability practices may impose additional costs on us or expose us to reputational or other risks
28. 28We may be unsuccessful in implementing our strategic initiatives

Risks Related to Indebtedness and Other Credit Related Risks

1. 29Adverse credit and financial market conditions, including increasing or continued high interest rates, could impair our clients', our partners' and our own borrowing capacity, which could negatively affect us
2. 30The agreements governing our debt contain a number of restrictive covenants that limit our ability to engage in activities that may be in our interest or that create shareholder value
3. 31Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates
4. 32We may be unable to win new contract awards if we cannot provide clients with financial assurances

Legal and Regulatory Risks

1. 33We are involved in litigation and regulatory proceedings, potential liability claims and contract disputes that may have a material impact on us
2. 34Our failure to recover adequately on claims against clients, subcontractors or suppliers for payment or performance could have a material effect on us
3. 35We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws
4. 36We could be adversely impacted if we fail to comply with domestic and international import and export laws
5. 37Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts
6. 38New or changing legal requirements could adversely affect us
7. 39Past and future environmental, safety and health regulations could impose significant additional costs on us

Risks Related to our Equity and Corporate Governance Documents

1. 40If we issue additional equity securities, stockholders' ownership percentages would be diluted
2. 41Delaware law and our charter documents may impede or discourage a takeover or change of control