The following discussion and analysis should be read in conjunction with our
financial statements.
Restatement of Previously Issued Financial Statements
We have determined that our previously issued financial statements contained
errors. Accordingly, we have restated our financial statements as of and for the
years ended December 31, 2018, 2017 and 2016 and our unaudited interim financial
statements as of and for each of the previously issued quarterly periods in 2019
and 2018, to correct the identified errors. Our financial statements contain
additional information related to the restatement, including descriptions of the
misstatements and the impacts on our financial statements.
Results of Operations
Initiatives impacting our 2019 operations included the following:
•      During the first quarter of 2019, we approved and initiated a broad

restructuring plan designed to optimize costs, improve operational

efficiency and support long-term sustainable growth. These restructuring


       activities included the rationalization of resources, investments, real
       estate and overhead across various geographies.

• During the second quarter of 2019, we met with a number of our clients,

subcontractors and suppliers in an attempt to bring resolution to or get

clarification on a variety of matters, including outstanding disputes and

claims, pending change orders, schedule extensions, accounts receivable

and other project close out items. The negotiations and agreements

resulting from these meetings, as well as project developments during the

second quarter, resulted in the recognition of significant charges across

three segments, which are reflected in the results for 2019.

• During the third quarter of 2019, management committed to a plan to sell

substantially all of our government and AMECO equipment businesses, while

retaining two fixed price projects (associated with the U.S. government)

and a few small international components of AMECO. The operations of these

businesses to be divested are presented as discontinued operations, net of


       tax, for all periods presented. During 2020, the company reversed its
       decision to sell the government business and will revert its results as a
       component of continuing operations for all periods to be presented
       beginning with the first quarter of 2020.

• During the third quarter of 2019, management reviewed our business lines,

markets and geographies and changed the composition of our reportable

segments to align them with the manner in which the chief executive

officer manages the business and allocates resources. The Mining,

Industrial, Infrastructure & Power segment was separated into a Mining &

Industrial segment and an Infrastructure & Power segment. The operations


       of NuScale, as well as two retained U.S. government projects, were
       combined into a newly created segment called Other. At December 31, 2019,
       we reported our operating results in the following five reportable
       segments:



• Energy & Chemicals


• Mining & Industrial


• Infrastructure & Power


• Diversified Services


• Other


Segment information for 2018 and 2017 has been recast to reflect these changes.
In light of our decision to retain our government business, beginning in the
first quarter of 2020 our government business will be reported as the Government
segment and we will report our operating results in six reportable segments.

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(in millions)                                                                  As Restated
YEAR ENDED DECEMBER 31                        2019                    2018                     2017
Revenue
Energy & Chemicals                   $  5,823.7               $  7,695.5              $  8,568.5
Mining & Industrial                     5,057.2                  3,491.0                 2,100.9
Infrastructure & Power                  1,370.4                  1,668.0                 1,810.0
Diversified Services                    2,040.1                  2,257.2                 2,295.4
Other                                      56.6                     60.8                    31.7
Revenue                              $ 14,348.0               $ 15,172.5              $ 14,806.5

Segment profit (loss) $ and margin
%
Energy & Chemicals                   $    (95.0 )  (1.63 )%   $    334.5    4.35  %   $    428.2     5.00  %
Mining & Industrial                       158.5     3.13  %         94.3    2.70  %         87.8     4.18  %
Infrastructure & Power                   (243.9 ) (17.80 )%        (30.1 ) (1.80 )%       (271.0 ) (14.97 )%
Diversified Services                       14.6     0.72  %         68.7    3.04  %         83.6     3.64  %
Other                                    (220.1 )     NM          (144.7 )    NM          (115.4 )     NM
Total segment profit (loss) $ and
margin %(1)                          $   (385.9 )  (2.69 )%   $    322.7    2.13  %   $    213.2     1.44  %

Corporate general and
administrative expense                   (159.1 )                 (118.4 )                (183.7 )
Impairment, restructuring and
other exit costs                         (532.6 )                      -                       -
Loss on pension settlement               (137.9 )                  (21.9 )                  (0.2 )
Interest expense, net                     (19.7 )                  (41.0 )                 (40.0 )
Earnings (loss) attributable to
NCI from continuing operations            (41.5 )                   46.6                    64.5
Earnings (loss) from continuing
operations before taxes                (1,276.7 )                  188.0                    53.8
Income tax expense (benefit)             (441.0 )                 (132.3 )                 (16.4 )
Net earnings (loss) from
continuing operations                $ (1,717.7 )             $     55.7              $     37.4

New awards
Energy & Chemicals                   $  3,724.1               $ 10,641.4              $  3,950.0
Mining & Industrial                     1,861.9                  8,696.1                 2,277.8
Infrastructure & Power                  2,608.7                  2,066.0                 1,525.3
Diversified Services                    2,217.2                  2,138.5                 2,007.0
Other                                     152.2                        -                       -
Total new awards                     $ 10,564.1               $ 23,542.0              $  9,760.1

Backlog
Energy & Chemicals                   $ 14,128.9               $ 17,834.5              $ 15,110.3
Mining & Industrial                     5,384.0                  8,889.3                 3,634.9
Infrastructure & Power                  6,079.4                  6,344.4                 5,915.3
Diversified Services                    2,541.6                  2,282.9                 2,451.0
Other                                     244.0                    252.4                   237.8
Total backlog                        $ 28,377.9               $ 35,603.5              $ 27,349.3

New awards related to projects
located outside of the U.S.              54%                      80%                     53%
Backlog related to projects
located outside of the U.S.              74%                      78%                     63%

NM = Not meaningful (1) Total segment profit (loss) is a non-GAAP financial measure. We believe that

total segment profit (loss) provides a meaningful perspective on our business

results as it is the aggregation of individual segment profit (loss) measures

that we use to evaluate and manage our business performance.




We adopted ASC Topic 606 "Revenue from Contracts with Customers" on January 1,
2018. The impact of adoption was an increase to our revenue during 2018 of $132
million, primarily in the Energy & Chemicals segment. Changes to segment revenue
and margin are discussed later in MD&A.
During 2019, we recognized charges (related to cumulative catch up adjustments
and loss projects) totaling $839 million in the Energy & Chemicals,
Infrastructure & Power and Other segments. We also recognized $533 million
related to impairments, restructuring and other exit costs. Additionally, we
settled the remaining obligations associated with our defined

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benefit pension plan in the United Kingdom and recognized a loss on pension
settlement of $138 million during 2019. During 2018, we recognized charges
totaling $417 million related to projects in the Energy & Chemicals,
Infrastructure & Power and Other segments. These project charges were partially
offset by a gain of $125 million from the sale of a joint venture interest in
the United Kingdom. Earnings in 2018 also benefitted from the adoption of ASC
606 which resulted in an increase to earnings before taxes of $132 million,
primarily in the Energy & Chemicals segment. During 2017, we recognized charges
totaling $341 million related to projects in the Energy & Chemicals,
Infrastructure & Power and Other segments.
The effective tax rate from continuing operations was (34.5%), 70.3% and 30.4%
for 2019, 2018, and 2017, respectively. The effective tax rate was unfavorably
impacted by $731 million in charges related to establishing valuation allowances
attributable to the U.S., the U.K. and Australia to reduce net deferred tax
assets. The 2018 effective tax rate was unfavorably impacted due to a $79
million increase in valuation allowances attributable to the U.S., the
Netherlands and Belgium to reduce certain deferred tax assets. The effective tax
rate for 2017 was unfavorably impacted by a $53 million tax charge resulting
from the enactment in 2017 of comprehensive tax legislation commonly referred to
as the Tax Cuts and Jobs Act (the "2017 Tax Act"). Apart from the impact of the
2017 Tax Act, the effective tax rate for 2017 benefited from the release of a
deferred tax liability as a result of the restructuring of certain international
operations and a worthless stock deduction for an insolvent foreign subsidiary.
These benefits were partially offset by the establishment of valuation
allowances on certain foreign net operating loss carryforwards. The 2018 and
2017 periods benefitted from earnings attributable to noncontrolling interests
for which income taxes are not typically our responsibility.
Our results reported by foreign subsidiaries with non-U.S. dollar functional
currencies are affected by foreign currency volatility. When the U.S. dollar
appreciates against the non-U.S. dollar functional currencies of these
subsidiaries, our reported revenue, cost and earnings, after translation into
U.S. dollars, are lower than what they would have been had the U.S. dollar
depreciated against the same foreign currencies or if there had been no change
in the exchange rates.
Our margins, in some cases, may be favorably or unfavorably impacted by a change
in the amount of materials and customer-furnished materials, which are accounted
for as pass-through costs.
As a result of adopting ASC 606 on January 1, 2018, we now generally account for
engineering and construction contracts as a single performance obligation,
resulting in a more constant recognition of revenue and margin over the term of
the contract than under the previous guidance in which we typically segmented
between the engineering and construction phases of its contracts. Prior to 2018,
changes in the mix of work performed by us had a larger impact, favorably or
unfavorably, on our margins. Segment profit margins were generally higher during
the earlier stages of the project life cycle as project execution activities
were more heavily weighted to higher margin engineering activities rather than
lower margin construction activities, particularly when there was a significant
amount of materials, including customer-furnished materials, recognized during
construction. For example, during 2017, margins in our Energy & Chemicals
segment were adversely affected by a shift in the mix of work from higher margin
engineering activities to lower margin construction activities.
The lack of broad based new awards could continue to put pressure on our
earnings streams, particularly in the Energy & Chemicals segment. The decrease
in backlog during 2019 primarily resulted from new award activity being outpaced
by work performed as well as the removal of certain contracts associated with
our joint venture in Mexico that were suspended in 2019. The increase in backlog
during 2018 primarily resulted from new award activity. As of December 31, 2019,
41 percent of our revenue backlog was reimbursable while 59 percent was for
fixed-price or lump-sum contracts. As of December 31, 2019, approximately 26
percent of consolidated backlog related to a single lump-sum project in the
Energy & Chemicals segment.
Certain of our businesses have been adversely affected by the economic impacts
of the outbreak of the novel strain of coronavirus ("COVID-19") and the steep
decline in commodity prices that occurred in the early part of 2020. Both of
these events have created significant uncertainty and economic volatility and
disruption, which have impacted and may continue to impact our business
operations. 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 conditions or financial distress, as well as governmental
budget constraints. These impacts are expected to continue or worsen if
stay-at-home, social distancing, travel restrictions and other similar orders or
restrictions remain in place for an extended period of time or are re-imposed
after being lifted or eased. Because of these events, we performed interim
impairment testing of our goodwill, intangible assets and investments. We also
evaluated the impact of these events on our reserves for credit risk and the
fair value of our assets held for sale. While significant uncertainty exists
concerning the magnitude of the impact and duration of these events, the company
expects to recognize losses ranging from $450 million to $475 million during the
first quarter of 2020, for such matters.

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Discontinued Operations
During 2019, management committed to a plan to sell substantially all of our
government and AMECO equipment businesses, while retaining two lump-sum projects
previously included in the government segment and a few small international
components of AMECO. These disposal groups meet the held for sale criteria, and
as a result, the underlying assets and liabilities have been classified as held
for sale for all periods presented. The operations of the disposal groups also
qualify for discontinued operations, and therefore their results have been
presented as earnings from discontinued operations, net of tax, for all periods
presented. In the first quarter of 2020, we decided to retain our government
business, which will no longer be reported as discontinued operations in 2020.
On August 1, 2019, we entered into a settlement agreement in connection with
legal matters related to a previously divested business. The resulting gain on
settlement as well as all legal fees associated with this matter were reported
in 2019's earnings from discontinued operations, net of tax.
Impairment, Restructuring and Other Exit Costs

During 2019, we initiated a broad 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, as well as the liquidation of certain components of the
AMECO business that are being excluded from sale. We expect that our
restructuring activities will be substantially completed in 2020. Asset
impairment charges included the write down of assets held for sale to fair value
less cost to sell and the write down of certain other assets to fair value.
                                                               Recognized in      Expected to be
(in millions)                                                      2019

Incurred(1)


Restructuring and other exit costs:
Severance                                                     $        63.9     $           70.0
Asset impairments                                                      90.4                 90.4

Entity liquidation costs (including the recognition of cumulative translation adjustments)

                                    83.7                 85.0
Other exit costs                                                        2.0                  5.0
Total restructuring and other exit costs                      $       240.0

$ 250.4



Impairment losses on:
Intangible customer relationships                             $        33.7
Investments                                                           256.8
Goodwill                                                                2.1
Total impairments                                             $       292.6

Impairment, restructuring and other exit costs                $       532.6

(1) Includes amounts recognized in 2019.



Given the 2019 performance in certain businesses and geographies, the
significant drop in our stock price since our second quarter earnings release,
and changes in pursuit criteria, we performed interim impairment tests of our
goodwill, intangible assets and significant investments during the third quarter
of 2019. We quantitatively determined that none of our goodwill was impaired as
of September 30, 2019. However, we recognized an impairment loss on our
intangible customer relationships associated with Stork. During the fourth
quarter of 2019, we recognized goodwill impairment of approximately $2 million
in connection with the liquidation of a business. Completion of our annual
goodwill impairment test during the fourth quarter of 2019 resulted in no
further impairment.

We also evaluated our significant investments and determined that certain of our investments were other-than-temporarily impaired as of September 30, 2019.



Segment Operations
We provide professional services in the fields of engineering, procurement,
construction, fabrication and modularization, operations, maintenance and asset
integrity, as well as project management services, on a global basis and serve a
diverse set of industries worldwide. We consider charges to include effects that
negatively impact a project's gross margin, including negative adjustments to
revenue and recognition of project losses.

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Energy & Chemicals
Revenue in 2019 decreased compared to 2018 due to a significant decline in the
volume of customer-furnished materials and project execution activities,
combined with the impact of a lower volume of broad based new awards. The
revenue decline in 2019 was partially offset by increased project execution
activity for a liquefied natural gas project in Canada. Revenue in 2018
decreased compared to 2017, primarily due to reduced volume of project execution
activity for several chemicals and downstream projects that were nearing
completion in 2017. This revenue decline was partially offset by an increase in
project execution activities for a large upstream project.
Segment profit in 2019 significantly decreased compared to 2018, primarily due
to the following 2019 items:
•      $260 million in charges resulting from late design changes,
       schedule-driven cost growth including liquidated damages, and
       subcontractor negotiations on a lump-sum, offshore project;


•      $87 million in charges resulting from schedule-driven cost growth and

client and subcontractor negotiations on two lump-sum, downstream projects

and scope reductions on a large upstream project;

• $31 million in charges resulting from the resolution of certain close-out

matters with a customer;

• $26 million in charges resulting from the write-off of pre-contract costs

due to the continued evaluation of the probability of receiving an award;

and

• $26 million of unrealized foreign currency losses associated with embedded

foreign currency derivatives of our joint venture in Mexico, primarily due

to the full suspension of certain client contracts in the second quarter

of 2019.




Segment profit in 2018 included the following items:
•      $133 million in charges for estimated cost growth on a completed,
       lump-sum, downstream project;


•      $40 million in charges resulting from estimated cost growth on the
       offshore project mentioned above;

• reduced volume of project execution activity for several downstream

projects that were nearing completion in 2017; and

• the favorable impact of the adoption of ASC 606.




Segment profit in 2017 included charges totaling $44 million for estimated cost
growth on the downstream project mentioned above.
The changes in segment profit margin in 2019 and 2018 were primarily
attributable to the same factors that affected revenue and segment profit.
We are currently in discussions with the clients of the two lump-sum, downstream
projects mentioned above over unapproved change orders totaling $66 million for
cost growth and extension of time due to client-caused delays. Our current
forecasts are based on the probability of favorably resolving these matters.
Revenue and segment profit could be adversely affected if these matters are not
successfully resolved, including the assessment of liquidated damages for which
our combined maximum exposure for both projects is approximately $121 million.
New awards in 2019 included a downstream project in the United Kingdom as well
as chemicals projects in China, India and on the U.S. gulf coast. New awards in
2018 included a liquefied natural gas export facility in Canada as well as an
engineering and procurement contract for a refinery in Texas. New awards in 2017
included an offshore project in the North Sea, a propylene oxide project in
Texas, a petrochemical project in Malaysia and two refinery projects in Texas.
The decrease in backlog during 2019 resulted primarily from new award activity
being outpaced by work performed as well as the removal of certain contracts
associated with our joint venture in Mexico that were suspended during 2019. The
increase in backlog during 2018 resulted from the new award activity discussed
above.
Mining & Industrial
Revenue in 2019 increased compared to 2018 primarily due to increased project
execution activities for several large mining projects as well as work performed
for an advanced manufacturing client. Revenue in 2018 increased compared to 2017
primarily due to increased project execution activity for several large mining
projects.
Segment profit in 2019 increased compared to 2018 due to the increased volume of
project execution activities for the projects mentioned above as well as a
benefit of $31 million recognized in 2019 resulting from a favorable resolution
of a

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longstanding customer dispute. Segment profit in 2018 increased compared to 2017
due to the increased volume of project execution activities for the projects
mentioned above. The changes in segment profit margin in 2019 and 2018 were
primarily attributable to the same factors impacting segment profit in those
years.
New awards in 2019 included an advanced manufacturing project in the
Netherlands. New awards in 2018 included a copper project in the south of Peru,
an iron ore replacement mine in Australia and a mine expansion project in Peru.
New awards in 2017 included a mining project in Chile.
The decrease in backlog during 2019 was primarily due to new award activity
being outpaced by work performed. The increase in backlog during 2018 primarily
resulted from the new award activity discussed above.
Infrastructure & Power
Revenue in 2019 decreased compared to 2018 primarily due to the substantial
completion of certain large power projects during 2019. This decline was
partially offset by increased project execution activities on several
infrastructure projects. Revenue also reflects the adverse impact of various
forecast revisions discussed below. Revenue in 2018 decreased compared to 2017
primarily due to reduced levels of project execution activity for the large
power projects discussed above. This decline was partially offset by increased
project execution activities on certain infrastructure projects.
Segment profit in 2019 significantly decreased compared to 2018, primarily due
to the following 2019 charges:
•      $135 million, including the settlement of client disputes, as well as cost

growth related to certain close-out matters, on three lump-sum, gas-fired


       power plant projects that were substantially complete as of December 31,
       2019; and

• $133 million resulting from late engineering changes and schedule-driven


       cost growth, as well as negotiations with clients and subcontractors on
       pending change orders, for several infrastructure projects.

Segment profit in 2018 included the following items: • $188 million in charges on one of the aforementioned power projects as a

result of cost growth; and

• $125 million gain associated with the sale of a joint venture interest in

the United Kingdom.




Segment profit in 2017 was adversely affected by charges totaling $260 million
resulting from estimated cost growth at the three lump-sum, gas-fired power
plant projects.
The changes in segment profit margin in 2019 and 2018 were primarily
attributable to the same factors impacting segment profit in those years. Lower
margin contributions from certain infrastructure projects for which charges were
recognized during 2019 may continue to adversely impact near term segment profit
margin.
New awards in 2019 included a large infrastructure project in Texas and the Red
and Purple Line Modernization project for the Chicago Transit Authority. New
awards in 2018 included an international bridge project in Canada and the Los
Angeles International Airport Automated People Mover project. New awards in 2017
included the Southern Gateway project in Texas, the A10 Zuidasdok infrastructure
project in Amsterdam and the Green Line Light Rail Extension project in Boston.
The decrease in backlog during 2019 was primarily due to work performed and
project cancellations outpacing new award activity. The increase in backlog
during 2018 primarily resulted from the new award activity discussed above.
Diversified Services
As discussed elsewhere, most of the operating results of our AMECO equipment
business are now included in discontinued operations. Certain operations of
AMECO, primarily in Mexico, are in the process of being liquidated and did not
meet the qualifications of discontinued operations. These retained operations
will remain in the Diversified Services segment until liquidation is complete.
Revenue in 2019 decreased compared to 2018, primarily due to lower volumes in
the Stork business in Europe, the cancellation of a large operations and
maintenance project in North America in 2018 and scope reductions on a
maintenance project in Australia. The decline in 2019 revenue was further driven
by scope reductions on a large power services project in the U.S. and lower
volumes at the AMECO equipment business in Mexico. The revenue declines in 2019
were partially offset by higher contributions from the staffing business in
North America and Europe. Revenue in 2018 remained relatively flat compared to
2017. Revenue growth from Stork operations in Latin America and the staffing
business were offset by the cancellation of the large operations and maintenance
project in North America and revenue declines in the equipment and power
services businesses.

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Segment profit in 2019 decreased compared to 2018 primarily driven by the above
mentioned reduced volumes of higher margin specialty services in the operations
and maintenance business and the closure of the AMECO equipment business in
Mexico. The decline in segment profit in 2019 was further driven by charges
recognized in the second quarter related to negotiations with clients and joint
venture partners. Segment profit in 2018 decreased compared to 2017, primarily
due to the cancellation of the large operations and maintenance project in North
America and lower contributions from the power services businesses. The declines
in segment profit margin in 2019 and 2018 were primarily due to the same factors
affecting segment profit.
The increase in backlog during 2019 was primarily due to a large award for the
power services business. The reduction in backlog during 2018 resulted from
scope changes on certain power services projects and the cancellation of the
large operations and maintenance project in North America. The equipment and
staffing businesses do not report backlog or new awards.
Other
Other includes the operations of NuScale, as well as two lump-sum projects that
are being excluded from the sale of the government business, including a plant
for which we serve as a subcontractor to a commercial client (the "Radford"
project) and a weapons storage and maintenance facility that commenced earlier
this year (the "Warren" project). The Radford and Warren projects are projecting
losses as of December 31, 2019.
Segment loss in 2019 included charges totaling $59 million resulting from
forecast revisions for cost growth on the Warren project and charges totaling
$83 million resulting from forecast revisions for late engineering changes and
cost growth related to the Radford project. Segment loss in 2018 and 2017
included charges totaling $56 million and $37 million, respectively, on the
Radford project. Our forecast for both projects is based on our assessment of
the probable cost to finish the projects as well as our assessment of the
recovery of unapproved change orders. The Radford project includes the
construction of a complex, large-scale nitrocellulose manufacturing facility.
The Warren project requires the procurement and installation of certain
first-of-a-kind technologies that are inherently more difficult to estimate. If
our forecasts for these projects are not achieved, revenue and segment profit
could be further adversely affected. We continue to pursue recovery of all
unapproved change orders associated with these projects.
NuScale expenses, net of qualified reimbursable expenses, included in the
determination of segment loss, were $66 million, $74 million and $76 million
during 2019, 2018 and 2017, respectively.
Corporate and Other Matters
(in millions)                                    As Restated
YEAR ENDED DECEMBER 31              2019       2018        2017
Corporate G&A
Compensation                      $  98.9    $ 112.0     $ 119.8
Professional fees                    21.5       19.7        16.4

Foreign currency (gains) losses 26.6 (33.4 ) 20.4 Other

                                12.1       20.1        27.1
Corporate G&A                     $ 159.1    $ 118.4     $ 183.7


During 2019 and 2017, most major foreign currencies strengthened against the
U.S. dollar resulting in foreign currency exchange losses. However, in 2018,
most major foreign currencies weakened against the U.S. dollar resulting in
foreign currency exchange gains.
The decrease in net interest expense during 2019 was primarily attributable to
an increase in interest income from time deposits held at the large LNG project
in Canada in 2019 as well as the payment of a "make-whole" premium associated
with the redemption of $500 million of 3.375% Senior Notes in 2018.
Discussion of 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.

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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 contract 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.
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 award fees,
incentive fees, liquidated damages or other provisions that can either increase
or decrease the contract price to arrive at estimated revenue. These variable
amounts generally are awarded upon achievement of certain performance metrics,
program milestones or cost targets and can be based upon customer discretion. We
estimate variable consideration at the most likely amount to which we expect to
be entitled. 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 for
accounting purposes 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 for factors such
as:
•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;
•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.
Variable Consideration. The nature of our contracts gives rise to several types
of variable consideration, including claims, unpriced change orders, award and
incentive fees, liquidated damages and penalties. We consider variable
consideration in the development of our project forecasts so that our forecasted
revenue reflects the amount of consideration we expect to be probable of
recovering without a future significant reversal. We estimate the amount of
revenue attributable to variable consideration using the expected value method
(i.e., the sum of a probability-weighted amount) or the most likely amount
method, whichever offers better prediction. Significant judgments are required
in developing estimates for variable consideration.
Fair Value Measurements. We are often required to use fair value measurement
techniques with inputs that require the use of estimates and involve significant
judgment. These circumstances include:
•Annual goodwill impairment testing of reporting units when quantitative
analysis is deemed necessary
•Impairment testing of intangible assets when impairment indicators are present
•       Impairment testing of investments as part of other than temporary

impairment assessments when impairment indicators are present




•Fair value assessments of businesses held for sale that are reported at fair
value less cost to sell
•Purchase price allocations for acquired businesses

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When performing quantitative fair value or impairment evaluations, we estimate
the fair value of our assets by taking into consideration the results of both
income-based and market-based valuation approaches. 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 weighted-average cost of capital for the
applicable reporting unit 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. Preparation of
long-term forecasts involve significant judgments involving consideration of our
backlog, expected future awards, customer attribution, 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 charges. 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.
During the third quarter of 2019, we performed quantitative testing of our
goodwill, intangibles and other investments. The majority of our goodwill
resides in our Diversified Services reporting unit. Based on the testing
performed, the fair value of the Diversified Services reporting unit exceeded
its carrying value, including goodwill, by 20%. All other factors being equal, a
one hundred basis point increase in the discount rate used in the valuation
would have resulted its fair value exceeding its carrying value by 7%. During
the third quarter of 2019, we recognized impairment charges of $257 million
related to certain investments and $34 million related to customer relationship
intangible assets. All other factors being equal, a one hundred basis point
change in the discount rates used in these valuations would have affected these
impairments by $20 million and $4 million, respectively.
Restructuring Accruals. We recognize and accrue restructuring related
termination benefits when the recognition criteria in the applicable GAAP has
been met, depending on the nature of the termination benefit. Recognition of
termination benefits requires the use of estimates in determining the expected
termination benefits payable, when they are probable of being realized and can
be reasonably estimated. Our estimates consider the number of employees that we
expect will be eligible to receive the benefit and the amount of benefit
potentially payable to each employee based on either the terms of the plan or
statutory entitlement.
Recent Accounting Pronouncements
Recent accounting pronouncements are discussed in our financial statements.
Litigation and Matters in Dispute Resolution
Litigation and matters in dispute resolution are discussed in our financial
statements.
Liquidity and Capital Resources
Liquidity is provided by available cash and cash equivalents and marketable
securities, cash generated from operations, credit facilities and access to
capital markets, including the use of commercial paper. We have both committed
and uncommitted lines of credit available to be used for revolving loans and
letters of credit. As of December 31, 2019, our financial covenants limit our
borrowings to approximately $1 billion under our committed credit facilities
which expire in February 2022. We believe that for at least the next 12 months,
cash generated from operations, along with our unused credit capacity and cash
position, is sufficient to support operating requirements. However, we regularly
review our sources and uses of liquidity and may pursue opportunities to
increase our liquidity position. Our committed credit facilities contain
customary financial and restrictive covenants, including the timely filing of
financial statements and a debt-to-capitalization ratio that cannot exceed 0.6
to 1.0. In order to accommodate the delays in filing our financial statements,
we have entered into amendments with our lenders to extend the deadline for
filing this 2019 10-K to September 30, 2020 and to extend the first, second and
third quarter deadlines to October 31, November 30 and December 31, 2020,
respectively, and we believe that we will satisfy the extended deadlines. Future
losses and impairment charges could further reduce the amount of available
credit capacity under our committed facilities.
Cash Flows
Cash and cash equivalents combined with marketable securities were $2.0 billion
as of both December 31, 2019 and 2018, respectively. 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 $944
million and $964 million as of December 31, 2019 and 2018, respectively.
Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that
are either swept into overnight, offshore accounts or invested in offshore,
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 $393 million and $392 million as of December 31,

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2019 and 2018, respectively, as reflected on the Consolidated Balance Sheet)
were not necessarily readily available for general purposes. We also consider
the extent to which client advances (which totaled $69 million and $109 million
as of December 31, 2019 and 2018, 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 overseas as of December 31, 2019
and 2018, other than unremitted earnings required to meet our working capital
and long-term investment needs in foreign jurisdictions where we operate.
                                                                              As Restated
                                                                Year Ended December 31,
(in thousands)                                           2019            2018            2017
OPERATING CASH FLOW                                  $   219,018     $   162,164     $   601,971

INVESTING CASH FLOW
Proceeds from sales and maturities (purchases) of
marketable securities                                    207,374          57,591         (20,924 )
Capital expenditures                                    (180,842 )      (210,998 )      (283,107 )
Proceeds from sales of property, plant and equipment      65,977          81,038          96,102
Proceeds from sale of joint venture interest                   -         124,942               -
Investments in partnerships and joint ventures           (52,305 )       (73,145 )      (273,117 )
Other                                                     40,268          21,955          (3,232 )
Investing cash flow                                       80,472           1,383        (484,278 )

FINANCING CASH FLOW
Repurchase of common stock                                     -         (50,022 )             -
Dividends paid                                          (118,073 )      (118,734 )      (117,995 )
Proceeds from issuance of Senior Notes                         -         598,722               -
Repayment of 3.375% Senior Notes                               -        (503,285 )             -
Repayment of borrowings under revolving line of
credit                                                         -               -         (53,455 )
Distributions paid to NCI                                (33,674 )       (63,523 )       (47,215 )
Capital contributions by NCI                              64,646           5,128           6,397
Other                                                      9,802          (8,777 )        (3,234 )
Financing cash flow                                      (77,299 )      (140,491 )      (215,502 )

Effect of exchange rate changes on cash                   10,262         (62,385 )        51,448
Increase (decrease) in cash and cash equivalents         232,453         (39,329 )       (46,361 )
Cash and cash equivalents at beginning of year         1,764,746       1,804,075       1,850,436
Cash and cash equivalents at end of year             $ 1,997,199     $

1,764,746 $ 1,804,075




Operating Activities
Cash flows from operating activities result primarily from earnings sources and
are affected by changes in operating assets and liabilities which consist
primarily of working capital balances for projects. Working capital levels vary
from year to year and are primarily affected by our volume of work. 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 within
budget. Working capital requirements also vary by project and the payment terms
agreed to with our clients, vendors and subcontractors. Most contracts require
payments as the projects progress. We evaluate the counterparty credit risk of
third parties as part of its project risk review process. We maintain adequate
reserves for potential credit losses and generally such losses have been minimal
and within management's estimates. Additionally, certain projects receive
advance payments from clients. A normal trend for these projects is to have
higher cash balances during the initial phases of execution which then level out
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 our available cash balances.

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During 2019, working capital significantly decreased. Specific factors related
to the change in working capital include:
•      Decreases in accounts receivable which resulted primarily from normal

billing and collections for several projects in the Mining & Industrial

segment as well as the LOGCAP IV program in Afghanistan, now included in

discontinued operations.

• Decreases in contract assets which resulted primarily from normal project


       execution activities for several projects in the Energy & Chemicals and
       Infrastructure & Power segments.


•      Increases in contract liabilities resulting from loss provisions and
       forecast adjustments for several projects in the Energy & Chemicals and
       Other segments.


Our working capital accounts as of December 31, 2018 reflect the adoption of ASC
606. Excluding the non-cash impact of adopting ASC 606, working capital
increased. Specific factors related to the change in working capital include:
•      Increases in contract assets which resulted primarily from normal project

execution activities on a large mining project and several infrastructure

projects, partially offset by decreases in contract assets on several

Energy & Chemicals projects.

• A decrease in contract liabilities in the Energy & Chemicals segment,


       which resulted primarily from normal project execution activities on
       several large projects.

• An increase in accounts payable in the Mining & Industrial segment, which

resulted from normal invoicing activities on a large mining project.

• A decrease in other current assets, driven primarily by the receipt of

income tax refunds in 2018.




During 2017, working capital decreased primarily due to decreases in accounts
receivable and contract assets partially offset by an increase in prepaid income
taxes and a decrease in accounts payable. Specific factors related to these
drivers include:
•      A decrease in accounts receivable, primarily related to collections from
       an Energy & Chemicals joint venture project in the United States.


•      A decrease in contract assets in the Energy & Chemicals segment, which
       resulted primarily from normal project execution activities.


•      A decrease in accounts payable in the Energy & Chemicals segment, which
       resulted primarily from normal invoicing and payment activities.


The increase in cash provided by operating activities in 2019 resulted from a
higher level of working capital inflows compared to 2018. The decrease in cash
provided by operating activities in 2018 resulted primarily from a higher level
of working capital outflows compared to 2017.
We made income tax payments (net of refunds) of $204 million, $(28) million and
$175 million in 2019, 2018 and 2017, respectively.
Cash from operating activities is used to provide contributions to our defined
contribution and defined benefit pension plans. Contributions into the defined
contribution plans during 2019, 2018 and 2017 were $115 million, $150 million
and $165 million, respectively. We contributed approximately $15 million, $45
million and $15 million into our defined benefit pension plans during 2019, 2018
and 2017, respectively. Company contributions to defined benefit pension plans
during 2018 included additional funding required to execute a buy-in policy
contract with an insurance company to fully insure the benefits of the plan in
the United Kingdom. In 2019, we approved the termination of the U.K. plan
effective December 27, 2019 and the U.K. plan moved from "buy-in" to "buy-out"
status, at which point the remaining benefit obligations were transferred to the
insurer and we were relieved of any further obligation. During 2019, we recorded
a loss on pension settlement of $138 million, which consisted primarily of
unrecognized actuarial losses included in accumulated other comprehensive loss
and did not have an impact on our cash position. Assuming no changes in current
assumptions, we expect to contribute up to $15 million to our defined benefit
pension plans in 2020, which is expected to be in excess of the minimum funding
required.
All periods included the operations of NuScale, which are primarily for research
and development activities associated with the licensing and commercialization
of small modular nuclear reactor technology. NuScale expenses included in the
determination of segment profit were $66 million, $74 million and $76 million
during 2019, 2018 and 2017, respectively.

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NuScale expenses for 2019, 2018 and 2017 were reported net of qualified
reimbursable expenses of $44 million, $62 million and $48 million, respectively.
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 primarily related to construction equipment associated with
the equipment business now included in discontinued operations, as well as
expenditures for facilities and investments in information technology. Proceeds
from the disposal of property, plant and equipment primarily related to the
disposal of construction equipment associated with the equipment business in
discontinued operations.
In 2018, we sold our interest in a joint venture in the United Kingdom.
Investments in unconsolidated partnerships and joint ventures in 2019 included
capital contributions to two infrastructure joint ventures in the United States.
Investments in 2018 included capital contributions to an infrastructure joint
venture in the United States as well as investments in COOEC Fluor. Investments
in 2017 included capital contributions to an Energy & Chemicals joint venture in
the United States and investments in COOEC Fluor. We have a future funding
commitment to COOEC Fluor of $26 million due at the end of 2020.
Financing Activities
We have a common stock repurchase program, authorized by the Board of Directors,
to purchase shares in the open market or privately negotiated transactions at
our discretion. In 2018, we repurchased 1,097,126 shares of common stock under
our current and previously authorized stock repurchase programs. As of
December 31, 2019, 10,513,093 shares could still be purchased under the existing
stock repurchase program.
Quarterly cash dividends are typically paid during the month following the
quarter in which they are declared. Therefore, dividends declared in the fourth
quarter of 2019 were paid in the first quarter of 2020. Quarterly cash dividends
of $0.21 per share were declared in 2018 and 2017 and in the first, second and
third quarters of 2019. Quarterly cash dividends of $0.10 per share were
declared in the fourth quarter of 2019. We have suspended our dividend as of
April 29, 2020. The payment and level of future cash dividends is subject to the
discretion of our Board of Directors.
During the second and third quarters of 2018, we issued commercial paper to meet
our short-term liquidity needs. All of the outstanding commercial paper was
repaid in October 2018.
In August 2018, we issued $600 million of 4.250% Senior Notes (the "2018 Notes")
due September 15, 2028 and received proceeds of $595 million, net of
underwriting discounts. Interest on the 2018 Notes is payable semi-annually on
March 15 and September 15 of each year, beginning on March 15, 2019.

In September 2018, we used a portion of the proceeds from the 2018 Notes to
fully redeem its $500 million 3.375% Senior Notes (the "2011 Notes") due
September 15, 2021. The redemption price of $503 million was equal to 100
percent of the principal amount of the 2011 Notes plus a "make-whole" premium of
$3 million.
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 2019 primarily related to a
mining joint venture project in Chile. Distributions in 2018 and 2017 primarily
related to transportation joint venture projects in the United States. Capital
contributions by joint venture partners in 2019 primarily relates to initial
investments from new partners in NuScale.
Effect of Exchange Rate Changes on Cash
During 2019 and 2017, most major foreign currencies strengthened against the
U.S. dollar resulting in unrealized translation gains of $101 million and $110
million, respectively, of which $10 million and $51 million, respectively,
related to cash held by foreign subsidiaries. During 2018, most major foreign
currencies weakened against the U.S. dollar resulting in unrealized translation
losses of $117 million of which $62 million related to cash held by foreign
subsidiaries. The cash held in foreign currencies will primarily be used for
project-related expenditures in those currencies, and therefore our exposure to
exchange gains and losses is generally mitigated.

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Off-Balance Sheet Arrangements
As of December 31, 2019, letters of credit totaling $371 million were
outstanding under our committed lines of credit, which consist of a $1.7 billion
Revolving Loan and Letter of Credit Facility and a $1.8 billion Revolving Loan
and Letter of Credit Facility. Both facilities mature in February 2022. Each of
the credit facilities contain customary financial and restrictive covenants,
including the timely filing of financial statements and a debt-to-capitalization
ratio that cannot exceed 0.6 to 1.0 and a limitation on the aggregate amount of
debt of the greater of $750 million or €750 million for our subsidiaries.
Borrowings under both facilities, which may be denominated in USD, EUR, GBP or
CAD, bear interest at rates based on the Eurodollar Rate or an alternative base
rate, plus an applicable borrowing margin.

As of December 31, 2019, letters of credit totaling $1.0 billion were also
outstanding under uncommitted lines of credit.
Letters of credit are provided in the ordinary course of business primarily 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, Inflation and Variable Interest Entities
Guarantees
In the ordinary course of business, we enter into various agreements providing
performance assurances and guarantees to our clients. These agreements are
entered into primarily to support project execution commitments. The performance
guarantees have various expiration dates ranging from mechanical completion of
the project 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 $17 billion as of December 31, 2019.
Amounts that may be required to be paid in excess of estimated cost to complete
contracts in progress are not estimable. 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 or fixed-price
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,
co-venturers, subcontractors or vendors for claims. The performance guarantee
obligation was not material as of December 31, 2019 and 2018.
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.
Inflation
Although inflation and cost trends affect our results, we mitigate these trends
by seeking to fix our cost at or soon after the time of award on lump-sum or
fixed-price contracts or to recover cost increases in cost reimbursable
contracts.
Variable Interest Entities
We frequently form joint ventures or partnerships with others primarily for the
execution of single contracts or projects. We assess our joint ventures and
partnerships at inception to determine if any meet the qualifications of a VIE
as defined in GAAP. If a joint venture or partnership is a VIE and we are the
primary beneficiary, the joint venture or partnership is consolidated and our
partners' interests are recognized as NCI. For further discussion of our VIEs,
see "Discussion of Critical Accounting Policies and Estimates" above and
Notes to the Consolidated Financial Statements.

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Contractual Obligations
Contractual obligations as of December 31, 2019 are summarized as follows:
                                                                  Payments Due by Period
Contractual Obligations              Total      1 year or less     2-3 years     4-5 years    Over 5 years
(in millions)
Debt:
2016 Notes                        $     557   $         -        $         -   $       557   $           -
2014 Notes                              495             -                  -           495               -
2018 Notes                              595             -                  -             -             595
Other borrowings                         44            39                  5             -               -
Interest on debt obligations(1)         344            55                106            88              95
Operating leases(2)                     335            78                114            71              72
Finance leases                            1             1                  -             -               -
Uncertain tax positions                  22             -                  -             -              22
Joint venture contributions             103            26                 21            56               -
Pension minimum funding(3)               49            10                 20            19               -
Other post-employment benefits            8             1                  3             2               2
Other compensation-related
obligations(4)                          415            80                138           112              85
Total                             $   2,968   $       290        $       407   $     1,400   $         871

(1) Interest is based on the borrowings that are presently outstanding and the

timing of payments indicated in the above table.

(2) Operating leases are primarily for engineering and project execution office

facilities in various U.S and international locations, equipment used in

connection with long-term construction contracts and other personal property.

Some of the operating leases are included in our discontinued operations.

(3) We generally provide funding to our international pension plans to at least

the minimum required by applicable regulations. In determining the minimum

required funding, we utilize current actuarial assumptions and exchange rates

to forecast estimates of amounts that may be payable for up to five years in

the future. In management's judgment, minimum funding estimates beyond a

five-year time horizon cannot be reliably estimated. Where minimum funding as

determined for each individual plan would not achieve a funded status to the

level of accumulated benefit obligations, additional discretionary funding

may be provided from available cash resources.

(4) Principally deferred executive compensation.

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