FLUOR CORPFLR
FLUOR CORP Income Taxes Disclosure
Income Taxes
The components of income tax expense (benefit) are as follows:
| Year Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
Federal | $ | 235 | $ | (10) | $ | (3) | |||||||||||
| Foreign | 138 | 214 | 240 | ||||||||||||||
| State and local | 190 | 13 | 12 | ||||||||||||||
| Total current | 563 | 217 | 249 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (477) | 326 | — | ||||||||||||||
| Foreign | (37) | 19 | (13) | ||||||||||||||
| State and local | (88) | 72 | — | ||||||||||||||
| Total deferred | (602) | 417 | (13) | ||||||||||||||
| Total income tax expense | $ | (39) | $ | 634 | $ | 236 | |||||||||||
A reconciliation of U.S. statutory federal tax expense to total income tax benefit follows:
| Year Ended December 31, | ||||||||
| (in millions) | 2025 | |||||||
U.S. statutory federal tax expense (includes equity method earnings) | $ | (21) | 21 | % | ||||
| Increase (decrease) in taxes resulting from: | ||||||||
State and local income taxes(1) | 61 | (60) | % | |||||
Foreign tax effects: | ||||||||
Australia: | ||||||||
Valuation allowance | 34 | (34) | % | |||||
Other | (11) | 11 | % | |||||
Other foreign jurisdictions | 60 | (59) | % | |||||
| Valuation allowance | (130) | 129 | % | |||||
Foreign tax credits | (56) | 55 | % | |||||
| Other, net | 24 | (24) | % | |||||
Total income tax benefit | $ | (39) | 39 | % | ||||
(1) State taxes in Alabama, Indiana, South Carolina made up the majority of the tax effect in this category for 2025.
A reconciliation of the provision for income taxes to the amount computed by applying the 21% of statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:
| Year Ended December 31, | |||||||||||
| (in millions) | 2024 | 2023 | |||||||||
U.S. statutory federal tax expense (includes equity method earnings) | $ | 571 | $ | 66 | |||||||
| Increase (decrease) in taxes resulting from: | |||||||||||
| State and local income taxes | 66 | 6 | |||||||||
Sale of foreign subsidiaries | — | (10) | |||||||||
| NCI | 13 | 13 | |||||||||
| Foreign tax differential, net | 53 | 48 | |||||||||
| Valuation allowance, net | (97) | 122 | |||||||||
| Other, net | 28 | (9) | |||||||||
| Total income tax expense | $ | 634 | $ | 236 | |||||||
Deferred taxes reflect the tax effects of differences between the amounts recorded as assets and liabilities for financial reporting purposes and the amounts recognized for income tax purposes. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
| December 31, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Accrued liabilities not currently deductible: | |||||||||||
| Employee compensation and benefits | $ | 86 | $ | 98 | |||||||
| Project and non-project reserves | 22 | 50 | |||||||||
Revenue recognition | 52 | 44 | |||||||||
| Net operating loss carryforward | 397 | 362 | |||||||||
| Tax basis of investment in excess of book basis, net | 473 | 135 | |||||||||
| U.S. foreign tax credit carryforward | 331 | 663 | |||||||||
| AOCI | 27 | 29 | |||||||||
| Other | 85 | 92 | |||||||||
| Total deferred tax assets | 1,473 | 1,473 | |||||||||
| Valuation allowance | (1,179) | (1,241) | |||||||||
| Deferred tax assets, net | $ | 294 | $ | 232 | |||||||
| Deferred tax liabilities: | |||||||||||
| Book basis of property and equipment in excess of tax basis | (58) | (52) | |||||||||
| Book basis of investments in excess of tax basis | (4) | (546) | |||||||||
Dividend withholding on unremitted foreign earnings | (54) | (59) | |||||||||
| Other | (13) | (13) | |||||||||
| Total deferred tax liabilities | (129) | (670) | |||||||||
Net deferred tax assets (liabilities) | $ | 165 | $ | (438) | |||||||
As of December 31, 2025, we intend to indefinitely reinvest the portion of unremitted foreign earnings required to support working capital and long‑term investment needs in the jurisdictions where we operate. Earnings in excess of those requirements are expected to be available for distribution. We have not recorded deferred tax liabilities related to earnings that are designated as indefinitely reinvested, primarily for foreign withholding and income taxes that would be due upon remittance. We do not anticipate taking any actions that would result in the taxation of earnings for which we have asserted indefinite reinvestment.
As of December 31, 2025, tax credit carryforwards and tax loss carryforwards are as follows:
| (in millions) | Federal FTC | State NOLs | Foreign NOLs | ||||||||||||||
| Expiration periods: | |||||||||||||||||
2026-2030 | $ | 54 | $ | 4 | $ | 66 | |||||||||||
2031-2035 | 277 | 110 | 23 | ||||||||||||||
2036-2045 | — | 185 | 2 | ||||||||||||||
| Indefinite | — | 248 | 1,360 | ||||||||||||||
During 2025, we were in a 3-year cumulative loss on a jurisdictional basis in the Australia, the Netherlands and the U.K. Such cumulative loss constitutes significant negative evidence (with regards to future taxable income) for assessing likelihood of realization. We also considered positive evidence but concluded it did not outweigh this significant negative evidence of a 3-year cumulative loss. Accordingly, we recognized non-cash charges to tax expense of 48 million against certain net foreign deferred tax assets during 2025. In 2025, all of NuScale’s Class B voting common shares were converted into Class A common shares. For U.S. federal income tax purposes, the conversion was treated as a taxable capital transaction, resulting in the
recognition of approximately $3.7 billion of capital gain, which was included in the Company’s taxable income for the year. To reduce the current tax liability associated with the recognized gain, the Company utilized prior‑year foreign tax credits, capital loss carryforwards, and U.S. federal general business credits. In connection with the utilization of these tax attributes, the Company released $398 million of valuation allowances previously recorded against them. Following the recognition of the NuScale deferred gain, no additional sources of taxable income remained to support the realization of certain deferred tax assets. Based on management’s assessment that these deferred tax assets are not more likely than not to be realized, the Company recorded a valuation allowance of $268 million during the year. The Company maintained a partial valuation allowance related to NuScale’s deferred tax assets, as these attributes are expected to be carried back as capital losses to offset the current‑year recognized capital gain.
In the normal course of business, we are subject to examination by taxing authorities worldwide, including such major jurisdictions as Australia, Canada, Chile, the Netherlands, the United Kingdom, and the United States. Although we believe our reserves for our tax positions are reasonable, the outcome of tax audits could be materially different, both favorably and unfavorably. With a few exceptions, we are no longer subject to U.S. federal, state and local, or foreign income tax examinations for years before 2012.
A summary of unrecognized tax benefits follows:
| (in millions) | 2025 | 2024 | |||||||||
| Balance at beginning of year | $ | 33 | $ | 52 | |||||||
| Change in tax positions of prior years | — | 15 | |||||||||
| Change in tax positions of current year | — | — | |||||||||
| Reduction in tax positions for statute expirations | — | (1) | |||||||||
| Reduction in tax positions for audit settlements | (2) | (33) | |||||||||
| Balance at end of year | $ | 31 | $ | 33 | |||||||
If recognized, the total amount of unrecognized tax benefits as of December 31, 2025 and 2024, would favorably impact the effective tax rates by $13 million and $15 million, respectively. We had $22 million of accrued interest and penalties as of both December 31, 2025 and 2024.
U.S. and foreign earnings (loss) before taxes, including equity method earnings, are as follows:
| Year Ended December 31, | |||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||
| United States | $ | (196) | $ | 1,589 | $ | 185 | |||||
| Foreign | 95 | 1,129 | 130 | ||||||||
| Total | $ | (101) | $ | 2,718 | $ | 315 | |||||
Cash paid for income taxes, net of refunds, was as follows:
| Year Ended December 31, | |||||
| (in millions) | 2025 | ||||
Federal | $ | 2 | |||
State and local: | |||||
Other | 58 | ||||
Foreign: | |||||
Canada | 69 | ||||
Other | 84 | ||||
Total cash paid for income taxes, net of refunds | $ | 213 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Sep 25, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 18, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.