1124198--2/25/2010--FLUOR

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{cost, contract, operation}

{regulation, government, change}

{capital, credit, financial}

{acquisition, growth, future}

{operation, international, foreign}

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{condition, economic, financial}

{regulation, change, law}

{loss, insurance, financial}

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{cost, operation, labor}

{cost, regulation, environmental}

{investment, property, distribution}

{provision, law, control}

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Our backlog is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of our future earnings. Our revenue and earnings are largely dependent on the award of new contracts which we do not directly control. Intense competition in the engineering and construction industry could reduce our market share and profits. The ongoing worldwide financial crisis will likely affect a portion of our client base, subcontractors and suppliers and could materially affect our backlog and profits. We are dependent upon third parties to complete many of our contracts. Our vulnerability to the cyclical nature of certain markets we serve is exacerbated during economic downturns. Reduced activity and spending from our hydrocarbon clients could adversely impact our backlog, revenue and earnings. If we experience delays and/or defaults in client payments, we could suffer liquidity problems or we could be unable to recover all expenditures. We may experience reduced profits or losses under or, in some cases, cancellations or deferrals of, contracts if costs increase above estimates. We may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business or achieve our growth objectives. The success of our joint ventures depends on the satisfactory performance by our joint venture partners of their joint venture obligations. The failure of our joint venture partners to perform their joint venture obligations could impose on us additional financial and performance obligations that could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture. If we are unable to form teaming arrangements, our ability to compete for and win certain contracts may be negatively impacted. Our government contracts may be terminated at any time. Also, if we do not comply with restrictions and regulations imposed by the government, our government contracts may be terminated and we may be unable to enter into future government contracts. The termination of our government contracts could significantly reduce our expected revenue and profits. Fluctuations and changes in the government's spending priorities could adversely impact our business expectations. If we guarantee the timely completion or performance standards of a project, we could incur additional cost to cover our guarantee obligations. The nature of our engineering and construction business exposes us to potential liability claims and contract disputes which may reduce our profits. Our failure to recover adequately on claims against project owners for payment could have a material effect on us. We have international operations that are subject to foreign economic and political uncertainties. Unexpected and adverse changes in the foreign countries in which we operate could result in project disruptions, increased cost and potential losses. Our employees work on projects that are inherently dangerous and a failure to maintain a safe work site could result in significant losses. We work in international locations where there are high security risks, which could result in harm to our employees or unanticipated cost. Foreign exchange risks may affect our ability to realize a profit from certain projects. We continue to expand our business in areas where surety bonding is required, but surety bonding capacity is limited. We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. We could be adversely impacted if we fail to comply with domestic and international export laws. Past and future environmental, safety and health regulations could impose significant additional cost on us that reduce our profits. We may be affected by market or regulatory responses to climate change. Our effective tax rate may increase. Our actual results could differ from the assumptions and estimates used to prepare our financial statements. Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded revenue or profits. We maintain a workforce based upon current and anticipated workloads. If we do not receive future contract awards or if these awards are delayed, significant cost may result. Our continued success requires us to hire and retain qualified personnel. Any future acquisitions may not be successful. In the event we make acquisitions using our stock as consideration, we would dilute share ownership. It can be very difficult or expensive to obtain the insurance we need for our business operations. As a holding company, we are dependent on our subsidiaries for cash distributions to fund debt payments. Delaware law and our charter documents may impede or discourage a takeover or change of control. Systems and information technology interruption could adversely impact our ability to operate.

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1124198--2/25/2010--FLUOR_CORP