福陸 (FLR) 2026年第三季財報電話會議：新簽合約額創紀錄達 109 億美元，在手訂單達 343 億美元

福陸公司 (Fluor Corporation, NYSE: FLR) 公布 2026 會計年度第三季單季新增得標專案金額創下歷史新高，在手訂單金額亦攀升至近十年最高水準，同時維持全年度調整後 EBITDA 財測。管理階層預期，近期取得的超大型專案將於 2027 年開始產生更實質的貢獻，工程高峰期則將落在 2028 年。

核心重點

• 營收自去年同期的 34 億美元增至 37 億美元。調整後 EBITDA 自 1.61 億美元下滑至 1.42 億美元，調整後 EPS 則自 0.68 美元升至 0.77 美元。
• 新增得標專案金額達到創公司紀錄的 109 億美元，接近單季營收的三倍。在手訂單金額增至 343 億美元，創下近十年來最高水準，其中約 70% 為成本補償型合約。
• 價值 75 億美元的加拿大液化天然氣 (LNG Canada) 專案領跑單季新簽訂單。福陸同時取得銅礦開採工程，並獲得沙凡納河 (Savannah River) 專案為期六個月的合約延展。
• 福陸維持 2026 年調整後 EBITDA 財測為 5 億至 5.25 億美元，調整後 EPS 預估維持在 2.70 至 2.80 美元。
• 管理階層預期 2027 年調整後 EBITDA 將較 2026 年呈現低雙位數百分比成長。近期取得的超大型專案預計將逐步增溫，執行高峰期預計自 2028 年展開。
• 福陸在第三季買回 3 億美元庫藏股，並持續朝 2026 年買回 14 億美元股票的目標邁進。

關鍵財務數據

年初至今 GAAP 營業現金流出為 2,100 萬美元，其中包括與 2025 年 NuScale 轉換相關的 3.57 億美元稅款支出。福陸表示，舊有專案的剩餘履約義務約為 2,000 萬美元，預計將對第四季投資現金流產生影響。

業務與營運表現

城市解決方案

城市解決方案部門獲利達 1 億美元，利潤率為 4.3%，高於去年同期的 2.6%。獲利表現受惠於後期基礎設施工程變更單、另一項基礎設施專案達成工程里程碑後獲利能力改善，以及大型生命科學專案施工作業增加。

然而，這些利多大致被一項採礦專案所認列的 2,500 萬美元費用所抵銷。福陸與合作夥伴已達成初步工程變更單協議，確立了在 2027 年年中前完工的推進路徑。

城市解決方案部門獲得 20 億美元的新增得標專案，主要由智利的兩項銅礦專案帶動。管理階層亦預期近期將釋出一項規模數十億美元的南美銅礦專案，這將是先前討論總值 300 億美元採礦專案儲備庫中釋出的首個重大專案。

在資料中心方面，福陸預計在價格敲定後，於第四季認列 TeraWulf 肯塔基州開發案前兩棟建築的專案合約。管理階層將該得標專案形容為低個位數十億美元規模的合約。第三棟建築及其他潛在廠址目前仍在討論中。

能源解決方案

能源解決方案部門獲利為 9,300 萬美元，其中包括出售 ICA-Fluor 所獲得的 7,300 萬美元收益。扣除該項處分利益後，部門獲利為 2,000 萬美元，利潤率約為 3%，主因是成熟專案完工退場的速度，快於近期得標專案進入實質執行階段的速度。

該部門入帳了價值 75 億美元的加拿大液化天然氣 (LNG Canada) 專案，並進入全面執行階段。管理階層指出，根據客戶宣布於 2030 年代初投產的時程，該專案的營收消化期可能為五至六年。

福陸亦正在敲定一座大型複循環燃氣發電設施的 EPC 合約，該客戶在推展前仍需獲得董事會批准。另一客戶的兩座單循環專案可能在 2027 年年中左右落實簽約，管理階層預期 2027 年間將敲定數項電力 EPC 合約。

在核能方面，切爾納沃德 (Cernavoda) 專案可能在 2027 年底或 2028 年初獲得全面核准放行。福陸亦在漢福德廠址 (Hanford Site) 獲得另一項 X-energy 專案，並正與知名小型模組化反應爐 (SMR) 及傳統反應爐技術供應商討論潛在合作機會。

任務解決方案

任務解決方案部門獲利從 3,400 萬美元增至 5,500 萬美元。此改善反映了美國能源部專案組合的獎勵金表現轉強，以及 EPC 業務活動的升溫。

該部門承接了額外的核燃料業務範圍，並獲得沙凡納河專案管理與營運合約六個月的展延。管理階層預計新的沙凡納河合約將於 2027 年初拍板定案。

超大型專案儲備庫

福陸未來兩年的潛在專案儲備包含 25 個超大型專案，平均規模達 45 億美元。相關機會涵蓋美國本土及國際市場的銅礦、電力、生命科學與製造業領域。

管理階層表示，這些機會多數涉及福陸已執行的前期工程設計，或是單一來源客戶的獨家談判，因此客戶董事會批准與專案經濟效益是主要關卡。該公司正投資於人工智慧 (AI)、ERP 系統更換以及其「未來專案」(Project of the Future) 計畫，以提升專案規劃、執行與後勤辦公室的營運效率。

管理階層財測指引

福陸維持以下 2026 會計年度財測展望：

一般及行政費用展望未包含更換 ERP 以及其他技術與 AI 升級所需的最高 1,500 萬美元外部成本。管理階層預期，全年度新增合約出貨比 (book-to-burn ratio) 可能接近 1.4 倍，並應維持遠高於 1.0 倍的水準。

預期 2026 年營收組合約為城市解決方案佔 65%、能源解決方案佔 20%、任務解決方案佔 15%。GAAP 部門利潤率假設約為：城市解決方案 2.5%、能源解決方案 7%、任務解決方案 6.5%。

展望 2027 年，管理階層預期調整後 EBITDA 將較 2026 年基準成長低雙位數百分比。該同期比較已計入因出售 ICA-Fluor 而減少的約 4,500 萬美元 2026 年年初至今息稅前利潤 (EBIT)。福陸預期新增合約出貨比將高於 1.0 倍，並計劃將未來的股票買回規模定在預期年度自由現金流約五成水準。

風險與觀察重點

• 某位簽署成本補償合約的客戶於 10 月底變更了一項進行中專案的工作範圍。福陸初步評估顯示，在手訂單金額最快可能在第四季減少約 20 億美元。管理階層表示，此項變更純屬個別專案狀況，且已反映在其初步的 2027 年展望中。
• 近期得標的超大型專案通常需要約兩年時間才能接近獲利高峰期，因此儘管在手訂單強勁，近期對獲利的貢獻仍相對有限。
• 第三季受惠於有利的專案結案與結算款項，管理階層預期第四季不會重現此類項目。
• 福陸指出地緣政治風險、勞動力市場緊縮、成本上升以及物流中斷等執行挑戰，需要及早與供應鏈展開對接協商。
• 大型得標專案的簽約時程仍具不確定性，因為許多專案需獲得客戶董事會批准，且必須跨過財務門檻。
• 能源解決方案部門正經歷過渡期，成熟專案陸續結束，而較新的得標專案尚未進入實質執行階段。

分析師問答精選

• 資料中心： TeraWulf 肯塔基州專案的前兩棟建築代表第四季潛在得標專案，規模達數十億美元低段。第三棟建築及其他廠址可能帶來額外工程範疇。
• 電力專案： 福陸進展最順利的燃氣發電機會是一座等待客戶董事會批准的複循環設施。兩座單循環專案機會則可能在 2027 年年中左右落實簽約。
• 2027-2028 年獲利增溫： 管理階層預期產能利用率將在 2027 年逐步改善，特別是能源解決方案部門，隨後在 2028 年隨著超大型專案邁向執行高峰期而迎來更顯著的成長。
• 利潤率： 管理階層表示，新增得標專案的利潤率優於其在 2025 年初投資人日的預期。隨著執行規模擴大，專案層級的利潤率、間接費用分攤與產能利用率預計都將進一步改善。
• 資本配置： 福陸持續評估有助於深化專業能力並推動獲利增長的收購機會，但管理階層日益傾向將潛在交易視為 2027 年的考量事項。
• 核能專案儲備： 管理階層表示，潛在的前期工程公告可能於 2027 年浮現，而規模更大的 EPC 專案機會則可能接續在 2028 年與 2029 年到來。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Hello, everyone. Thank you for joining us, and welcome to Fluor's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] A web replay of today's conference call will be available at approximately 10:30 a.m. Eastern Time today, accessible on Fluor's website at investor.fluor.com. At this time, for opening remarks, I would like to turn the call over to Jason Landkamer, Vice President, Investor Relations. Please go ahead.

Jason Landkamer

Thank you, operator. Good morning, and welcome to Fluor's 2026 Third Quarter Earnings Call. Jim Breuer, Fluor's Chief Executive Officer; and John Regan, Fluor's Chief Financial Officer, are with us today. Fluor issued its third quarter earnings release earlier this morning, and a slide presentation is posted on our website that we will reference while making prepared remarks. Before getting started, I would like to refer you to our safe harbor note regarding forward-looking statements, which is summarized on Slide 2.

During today's presentation, we will be making forward-looking statements, which reflect our current analysis of existing trends and information. There is an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences in our 2025 Form 10-K and our Form 10-Q, which was filed earlier today.

During this call, we will discuss certain non-GAAP financial measures. Reconciliations of these amounts to the comparable GAAP measures are reflected in today's slide presentation and posted in the Investor Relations section of our website at investor.fluor.com. With that, I'll now turn the call over to Jim Breuer, Fluor's Chief Executive Officer. Jim?

James Breuer

Thank you, Jason, and good morning, everyone. This was another strong quarter with record awards, a growing backlog, and continued capital returns to shareholders. I'd like to start by sharing some observations from the Fluor Supply Chain Summit that we hosted this quarter in Greenville, South Carolina. Please turn to Slide 3.

The Summit, now in its third edition, brought together 230 vendors and contractors from around the world alongside clients and Fluor leaders. It was an opportunity to align our partners on upcoming projects and on the collaboration needed to deliver them for our shared clients. Over the next 4 years, Fluor plans to spend approximately $50 billion in procurement and contracts on our projects. And as we look to grow our business, we will rely on our supply chain relationships to help us turn new opportunities into successful project delivery.

We're executing projects in an uncertain environment. Geopolitical risk, tight labor markets, rising costs, and logistics disruptions demand an agile and resilient supply of goods and services. Engaging early in project planning with contractors and vendors helps us anticipate constraints and build more credible estimates, schedules, and execution plans. These efforts matter because of what our clients need: a well-thought-out, capital-efficient execution plan before committing a project and delivery certainty once execution begins.

The summit reinforced that our supply chain partners are ready for the challenge. We have strong relationships built over multiple projects, and we see the opportunity to extend those relationships across new projects in different business lines. Turning to Slide 4. We had some significant accomplishments during the quarter. First, we're experiencing robust growth. New awards were $10.9 billion, a record for Fluor, and backlog is now $34.3 billion, the highest level we've seen this decade. These projects will ramp up to full execution over the next 2 years, solidifying our future earnings growth. And we have additional meaningful awards expected in the near future.

Second, our capability to execute mega projects is an important differentiator. Our resume, our people, systems, and footprint set us apart in the marketplace. And I'll discuss this in greater detail in a minute. And finally, we are steadfast in our approach to capital allocation. We're investing in capabilities and creating shareholder value.

Turning to Slide 5, Urban Solutions. Here are a few highlights for the quarter. New awards were $2 billion, headlined by 2 copper projects in Chile. Our strategy in mining is producing tangible results, and the need for capacity expansion is clear. Clients want a partner that can carry a project from early engineering through construction with a special focus on supply chain, as I mentioned earlier. Looking ahead in the near term, we're well positioned for the release of a multibillion-dollar copper project in South America, where we are already doing early work. This will be the first large award coming out of our $30 billion mining pipeline that we mentioned last quarter.

In the data center market, we recently announced a contract with TeraWulf for the development and construction of a 3-building site in Kentucky. We expect to recognize an award for the first 2 buildings in the fourth quarter upon finalization of pricing. In Life Sciences, we're executing feasibility studies for several clients, including a new facility for Bayer. We expect these studies to develop into larger awards as we progress through 2027.

Finally, in infrastructure, we continue to work off our remaining legacy projects. I-35 Phase 2 is on track to open its main lanes by year-end, and LA People Mover should complete shortly thereafter. On this project, we and our project partners are working collaboratively with LAWA to ensure the safe completion of systems demonstration to support passenger service availability.

Moving to Slide 6. In Energy Solutions, our next growth cycle is beginning with the LNG Canada full notice to proceed, which we booked in the third quarter for $7.5 billion. I'm pleased with how we collaborated with a client in these negotiations, resulting in a favorable outcome for both sides. The execution plan reflects the benefits of extensive replication, and the contract incorporates valuable learnings from Phase 1 related to labor availability, geopolitical risk, and other events outside of contractor control. Working alongside our JV partner, we are now in full execution mode and are off to a strong start.

In power, momentum continues to build, where we're performing planning work on a large gas fueled facility. With this client, we're finalizing the EPC contract for the first of what could be several plants. Our near-term portfolio looks promising, and we expect several EPC contracts next year. Now specific to nuclear power, on the Cernavoda project, our JV team is finalizing the LNTP phase and positioning the project for a full release sometime in late '27 or early '28.

Additionally, in nuclear, I'm pleased to share that we continue to expand our relationship with X-energy with a new award for a project at the Hanford Site. This is our second project that will utilize this SMR technology. And in anticipation of the next wave of nuclear development, we continue to deepen our engagement with multiple technology providers to support the pipeline of projects ahead.

In domestic refining, we're seeing a resurgence in front-end activity. In addition to the work for America First Refining, which grew this quarter, we're also supporting other major U.S. refiners in advancing the early phases of their expansion projects. As I noted last quarter, we expect this front-end work to translate into EPC opportunities in 2027 and '28. We're also positioning for the emerging opportunities in the Middle East and Venezuela. In the Middle East, we remain engaged with our clients and anticipate more clarity in 2027 on new work. These opportunities will be incremental to our current work across all 3 segments. And in Venezuela, we're taking steps to reestablish our presence, including a local partnership. As a reminder, we have a long history of delivering energy projects in Venezuela.

Turning to Mission Solutions on Slide 7. We continue to ramp up on our nuclear fuels work and booked additional scope on the EPC project we announced last quarter. We also recognized a 6-month extension of our management and operation scope at Savannah River, and we anticipate a decision on the new contract early next year. And we're encouraged by the recent announcement from the NNSA approving the start of full-scale construction on the Savannah River Plutonium Processing Facility.

Before I turn the call over to John, I want to spend a moment discussing what is one of our key strengths in the marketplace: our capability to execute mega projects. Please turn to Slide 8. At Fluor, we are proud to execute projects of all sizes, but our skill set to execute very large projects sets us apart and is a market differentiator. For perspective, our prospect pipeline in the next 2 years includes 25 mega projects with an average size of $4.5 billion, and we're well positioned to capture many of them.

Mega projects require a different level of capability, and the complexity grows exponentially with size. They demand the ability to move seamlessly from front-end development through engineering and into construction, supported by a global supply chain team and experienced leadership and a trained workforce. Success takes rigorous project controls and risk management and the financial strength to ensure delivery over multiple years.

Fluor brings these capabilities together: a global footprint, proven tools and systems, a resume spanning 6 continents, and teams who have delivered some of the world's largest and most complex projects. And we continue to evolve and improve. We're investing in AI, in our ERP replacement, and in our Project of the Future initiative to strengthen the tools and systems required to plan and execute projects. The goal is to deliver greater project certainty and to reduce cost and schedule for our clients. And for our shareholders, our mega project capability allows us to be selective, pursue work that fits our core strengths, and generate attractive returns. With that, I'll turn the call over to John.

John Regan

Thanks, Jim. Good morning, everyone. Today, I'd like to cover a few topics, including Q3 results, capital allocation, plus our outlook for the balance of '26 and some early framing for 2027. Let's start with consolidated results on Slide 10. For the third quarter, revenue was $3.7 billion, up from $3.4 billion a year ago. Adjusted EBITDA was $142 million compared with $161 million a year ago. And adjusted EPS was $0.77 compared with $0.68 last year.

Our EPS metrics benefit from the 32 million shares that we have retired over the past 12 months. As a reminder, the prior year GAAP results for Q3 included a $653 million revenue reversal related to the Santos court ruling. So the year-over-year GAAP results are not meaningful on a stand-alone basis. Our '26 GAAP results also include the $73 million gain on ICA-Fluor, our former JV in Mexico. I'll put some perspective around what the sale means for next year a bit later.

New awards were $10.9 billion, led by LNG Canada, mining awards for copper, and a 6-month extension for Savannah River. New awards were almost 3x quarterly revenue, which significantly bolsters our expectations of future earnings growth. Ending backlog was $34.3 billion and is now about 70% reimbursable, in large part due to the LNG Canada award. We anticipate the percentage of our reimbursable backlog to trend down to the 60s as we convert the pipeline of attractive power opportunities into backlog. Our approach to risk remains disciplined and consistent. Reimbursable work continues to be an important contracting model, but we will accept fixed pricing where the returns are higher, risks are commercially balanced, and where the scope is within our proven execution capabilities.

Let's look at our business segments on Slide 11. Urban Solutions reported segment profit of $100 million, which is a 4.3% margin compared with last year's 2.6%. The improvement reflected a late-stage change order on the legacy infrastructure project, improved profitability on another infrastructure project that reached a construction milestone during Q3, increased execution activity on a large life sciences project, as well as the $25 million effect in '25 for delays at LBJ. Q3 results in '26 also included $25 million for a charge on a mining project, the same project that we discussed in Q1 this year. Working with our partner, we have reached a preliminary agreement on a change order that establishes the path to completing this project by mid-'27.

Energy Solutions reported segment profit of $93 million, including the $73 million gain for the ICA-Fluor sale. This means that segment profit was otherwise $20 million or about a 3% margin. This compared with $120 million a year ago without the Santos effect. ES' profitability declined as mature projects rolled off faster than recently awarded projects entered meaningful execution. The graphic we'll show later on Slide 14 illustrates how we see projects generate earnings across our execution window, including these major energy projects.

Mission Solutions reported segment profit of $55 million, up from $34 million a year ago. The increase was driven by improved award fee performance across the DOE portfolio and the ramp-up of EPC execution. We ended Q3 with $3.1 billion in cash and equivalents versus $2.8 billion a year ago. That balance supports our planned share repurchases and gives us capacity to internally invest in key enablers, which will drive future growth. This includes our people and systems plus inorganic opportunities.

Operating cash flow for the quarter exceeded expectations at $186 million. Our year-to-date operating cash usage of $21 million under GAAP includes the tax payment in Q2 for the 2025 NuScale conversion, which totaled $357 million. The impact on Q4 guidance to come a little later. As it relates to our legacy projects, we did not have any funding in Q3 as the late-stage change order I mentioned offset any Q3 funding requirements. Moreover, the revised forecast now means that our remaining obligations are around $20 million and are expected to hit Q4 investing cash flow in their entirety.

Turning to Slide 12. Our financial position remains on solid footing, and our capital allocation priorities have not changed. We will keep shareholder value creation in focus while preserving the flexibility to invest in the business. Under the current chapter of our repurchases, which began in Q4 of '24, we spent more than $2 billion to retire our shares, including $300 million in the third quarter. This translates to more than 20% of our outstanding shares over the last 24 months. We remain on pace for $1.4 billion in repurchases for all of '26.

Turning to our internal investments. We continue to build momentum with our Project of the Future and our AI initiatives. We have also made good progress on the design of our ERP replacement, and we expect to enter the detailed design phase of that transformational project by mid-'27. Collectively, these represent a profound step forward in our technology and will streamline both our execution playbook and the internal efforts arising from project execution. Separately, we continue to evaluate selected inorganic opportunities, but it looks increasingly like it's a 2027 consideration.

With that context, let's turn to guidance beginning on Slide 13. We are maintaining our full year 2026 adjusted EBITDA guidance of $500 million to $525 million, which implies a full year adjusted EPS range between $2.70 and $2.80, given our expected share repurchase tempo. We conditioned both of these ranges last quarter when we announced the divestiture of ICA-Fluor. So the guidance principally means continued execution against our backlog.

For reference, through the first 9 months of '26, we have delivered $351 million of adjusted EBITDA. So our range implies fourth quarter adjusted EBITDA of roughly $150 million to $175 million and adjusted EPS of about $0.85 to $0.95. Importantly, Q3 included some favorable closeouts and settlements that we don't expect to repeat in Q4. So that means real growth in recurring earnings. While some investors may dismiss these closeout efforts as onetime events, they represent the culmination of the earnings from across the project's execution, and I commend those teams for the good outcomes this quarter.

Our other key full year assumptions are outlined on the slide, including an adjusted operating cash flow of $430 million to $460 million. Full year new awards book-to-burn ratio potentially approaching 1.4x, with FID on some mega projects over the next few months, but in any case, would be well above 1 for all of '26. G&A will be approximately $180 million to $190 million, which excludes up to $15 million in outside costs for the replacement of our ERP and for other technology and AI enhancements, which I touched on earlier.

We assume a full year tax rate of 25% to 27% and a revenue split of approximately 65% Urban, 20% Energy, and 15% Mission. Assuming these splits, we expect full year segment margins of approximately 2.5% in Urban, 7% in Energy, and 6.5% in Mission, all on a GAAP basis, including CFM. Most of our refreshed guidance aligns to Q2, though the G&A growth was offset by PGM growth in refreshing the overall EBITDA guidance.

Before I close out Q4, one point worth connecting. The higher G&A and the higher operating cash flow guidance are directly linked. We've built the uplifted cash generation into our incentive comp projections, so stronger cash flow gave rise to higher G&A under the pay-for-performance model. Also, during late October, one of our reimbursable clients notified us of changes to its project scope. We are still evaluating the impact on backlog, but based on our early assessment, we could expect a reduction of approximately $2 billion as early as Q4.

Please turn to Slide 14. I'd like to put some preliminary context to next year's numbers when we compare them to the '26 outlook. For adjusted EBITDA, we expect the growth percentage to be in the low double digits compared to '26. This assumes several changes to the earnings base, which I will describe, the expected gradual ramp-up of contributions from recent large awards, and the absence of the same level of closeout on major energy projects. A big factor is the sale of ICA-Fluor, which removes approximately $45 million of EBIT that we recognized year-to-date in '26. So the growth in '27 is far higher for our retained business.

Spending on Project of the Future and our ERP implementation will continue into '27. And although that spending will hit our GAAP P&L in whole or in part, they are important expenditures that define how we'll conduct business for years to come and are excluded from the year-over-year EBITDA growth target. As illustrated on the sample burn curve on the slide, our recent mega project awards will enter the earnings stream in '27, but large projects generally take 2 years to approach peak earnings. These mega projects also execute over longer horizons than the work they are replacing, with peak activity starting in 2028. We expect earnings to build as these projects move into full execution.

Furthermore, our awards pipeline remains strong heading into '27 when we expect a book-to-burn greater than 1. We also plan to continue share repurchases anchored around half of expected annual free cash flow. We'll be adding to these preliminary 2027 views during February's call. To summarize our thinking coming out of Q3, the core business remains healthy. We delivered record new awards, simplified the portfolio, substantially advanced completion on legacy projects, and continue to direct value to our shareholders. And with that, we're ready to open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Sangita Jain from KeyBanc Capital Markets.

分析師問答

Sangita Jain

So I want to ask about the TeraWulf award that you recently announced that you will book in 4Q. Maybe you can share the sizing of that award and whether there is further upsizing prospects in that award beyond the first 3 buildings.

James Breuer

Sangita, thanks for the question. This is Jim. Yes, we're excited about entering that project. It would be for the first 2 buildings, a low single-digit multibillion award. There's a third building at the site that is being estimated and therefore, released a little bit later. And we're also in conversations with that client for potentially other sites. So yes, it could grow. The focus right now is on the first 2 buildings, followed by the third building at the Kentucky site.

Sangita Jain

Got it. And then on the operating cash flow in third quarter and the outlook, can you help us on what is driving that stronger outlook and the potential M&A targets that you're looking at for 2027?

John Regan

Sangita, it's Regan. So operating cash flow is a really good story in the quarter and in the outlook. So during the -- and it plays across all 3 segments. So I'll talk about what's in the rearview -- rearview mirror and what's to come. So during the quarter, with respect to Urban Solutions, it was in-flight projects and working capital -- better working capital management across the portfolio, maybe with a little bit of a concentration in ATLS. So that was fantastic.

On the Energy Solutions side of things, the ultimate liability and funding of the warranty exposure at LNG was much lower than we had expected coming out of Q2. So our ability to work that down with less cash meant we were able to dividend out more of that money. So that money came to us again in quarter 3 at a larger quantum than we had expected at the time of the Q2 print.

And then on the Mission Solutions side, as we said in the kind of the EBITDA bring-down for them, they had excellent fee scores across the DOE portfolio. And so when the federal government wrapped up its fiscal year in September, our fee scores were much better. And so that hit earnings in Q3, but will give us a tailwind on the cash flow when we make collection of that in Q4. That all hang together.

Sangita Jain

Yes, that's very helpful.

John Regan

And then on the inorganic opportunities, look, I think we continue to look to build to our depth and to add to kind of the earnings growth that we're expecting. Clearly, we're flush with cash in terms of being able to make those acquisitions, but just haven't been able to get them across the goal line, be increased in focus over the next few quarters. And as I signaled in the prepared statements, we'll look for something -- a little more transparency there in 2027.

Operator

Your next question comes from the line of Steven Fisher from UBS.

Steven Fisher

Congrats on all the awards. Obviously, the election is topical this week. I'm curious if you can just discuss the election impact on data center and your energy business and perhaps your booking opportunities more broadly. And curious what conversations you've had with customers in the last couple of days.

James Breuer

Steve, this is Jim. Yes, we're obviously following the implications of the election very closely. I think we need to let the dust settle a little bit. We're looking at potential impacts on energy, data centers, et cetera, et cetera. But I think if you step back a little bit, the markets that we pursue, Steve, whether it's in the mission space or the private sector space, most of them have bipartisan support. Yes, there's a little bit of growing concerns around the data center ecosystem. But we feel that the data center work that we have today and the power work that we're hoping to book in the next few months is pretty resilient.

And I'll also take you even further back around Fluor's diversity of markets, whether it's domestic or international, copper, life sciences, manufacturing, iron ore. We feel pretty good that our diversity is working as we're not overly exposed to some of the concerns that are out there. On the positive side, both sides of the aisle are very determined to work on permitting reform. I think the permitting reform momentum that's building in the country is going to do well for some of the work we're pursuing. So I think all in all, yes, there are some areas of attention, but we don't expect any significant impact on our company's trajectory.

Steven Fisher

Okay. That's helpful. And then maybe drilling into the gas-fired opportunity. You talked about some of the larger opportunities there. I assume those are all combined cycles. Can you just talk about what still has to happen to book those? And then can you talk about any simple cycle opportunities you might have? To what extent are any potential customers reaching out to you? And if not, why not? It seems like there's quite a bit of that activity going on and a need for contractors.

James Breuer

We are pursuing those -- both of those types of projects, Steve. We have -- our most matured opportunity is the combined cycle. But shortly thereafter, we're working on 2 simple cycles for a different client that we hope to convert, I would say, around the middle of next year. So you're right. There are both types of projects out there. We're pursuing both of them, talking to several clients. So we -- as I said in my remarks, we expect several EPC contracts to be live next year.

Steven Fisher

And just to clarify, is the next few months on the bigger ones, what still has to happen to book those?

James Breuer

Sorry. It's just we're working collaboratively with the client on the estimate, the execution plan, and the contract terms. And all that is very mature. Now the client -- in the case of the first project, they have to go to their Board for approval. And once they get that approval, they will give us the go-ahead and start.

Operator

Your next question comes from the line of Andrew Kaplowitz from Citi.

Andrew Kaplowitz

Jim, I think we all understand that the geopolitical environment these days is quite fluid. But maybe just frame this award cycle a little more versus what you've seen in the past. I think you're going to book more than $25 billion this year. I think you just said next year would be over 1 again in terms of book-to-bill. Do you think '27 could be similar to '26 where book-to-bill could be way over 1? And do you expect bookings to grow in '27 versus '26 despite, obviously, you booked LNG Canada, which is a large project this year?

James Breuer

So Andy, all good questions and questions that we're analyzing and addressing as a team, obviously, every day. So '26 is going to be a good year. As you can tell, we're already at $20 billion essentially at Q3 and anything in Q4 is additive to that. We're saying, as John said earlier, '27 is going to be greater than 1 book-to-burn. Part of the challenge we have is the same story we've been telling you all along is we sometimes struggle defining the exact timing of these big awards. So for example, there's -- we feel very good about a large mining award in South America coming up in the next few months. It could land in Q4, it could land in Q1. That makes a difference when you look at the full fiscal year, but it doesn't really make a difference to us. The work comes in, we start executing it.

So I don't know what the exact number for '27 will be yet. We'll have more clarity in the beginning of next year. I can tell you that both years are going to be good. Therefore, backlog is going to continue to grow. And it's fairly -- fairly diversified. It's gas-fired power, it's copper, it's data center work, it's life sciences, it's advanced manufacturing, it's Mission Solutions. Refining, it's picking up. There may be a nuclear award there. So we feel good about diversity. We feel good about the clear line of sight we have to these projects. The exact timing is not always up to us, but we feel good about both this year, of course, and next year.

John Regan

I think it comes back in large part to the Board oversight that you referenced with respect to the power project that once they get clearance from their own governance structure, that's the important hurdle for us to get over in terms of booking.

Andrew Kaplowitz

Very helpful, guys. And then we appreciate the color, the initial thoughts on '27 EBITDA. But maybe can you give us a little more color on how to think about '27 from a utilization perspective? Are you still relatively underutilized as you ramp up, particularly in Energy Solutions? And that's part of [indiscernible] like the friction in terms of how quickly you can grow? And then obviously, we're not going to talk about guidance for '28, but could you have a bigger step-up? I mean, I see the chart in terms of utilization helping margins as you go into '28, so a much bigger step-up in earnings then.

James Breuer

Yes, Andy, so utilization will improve in '27 and in '28. You bring up -- obviously, you understand the company, and so you bring up a good point. It's not just the large EPC -- EPC awards. It's also the services that we're also building up, whether it's in front-end refining work or life sciences or even some early chemicals work. The objective is not just to do the large projects, which in themselves have significant utilization, but also continue to feed and replenish the pipeline with services-only work that then will feed the EPCM awards for '28 and '29. So I do expect a gradual improvement of utilization, including in Energy Solutions in '27, but the big step, I think, is going to be in '28.

John Regan

Yes. Agreed. And that was at the root of Slide 14 that hopefully landed well with you, Andy.

Andrew Kaplowitz

It did. Just one quick follow-up, John. Any reason why Urban was light in revenue in Q3? Was something happened there?

John Regan

No. I think that's just a typical burn across their portfolio.

Operator

Your next question comes from the line of Jamie Cook from Truist Securities.

Jamie Cook

Congratulations on a good bookings in a fairly noneventful quarter. I guess just 2 questions. One, Jim, you talked about your strength in mega and you talked about 25 projects that you're looking at that have an average size of $4.5 billion. Can you just help us understand what markets largely are driving that? And just interested in the competitive dynamics on these projects, how many other players you're bidding against? Or is it more a function of -- just a function of whether or not the project goes forward because there's not a lot of people that have the capability that Fluor has. And then my second question, just on nuclear, congratulations on X-energy and the SMR. Just wondering if you can elaborate what else is to come on the nuke side, whether it's traditional or SMR and just sort of the time frame associated with that.

James Breuer

Thanks, Jamie. So on the mega project portfolio, pipeline portfolio, it's copper, it's power, it's life sciences, it's manufacturing, and it's both U.S. and international. So it's fairly diverse. Many of them -- I can't say all of the 25, but the majority of the 25 we're doing the front-end work or we are in sole-source conversations with clients in case of -- for example, in the case of these utilities. So we're really not bidding competitively these large mega projects. They're more negotiated deals. And the biggest hurdle to win the work is whether the project gets approved by the client's Board and it overcomes its financial hurdles.

As far as nuclear, so we're doing 2 projects with X-energy now. And we talked about Cernavoda. So that's a conventional nuclear in Romania, and that project is now the LNTP is almost done, and they're working the financial picture to hopefully go into EPC in late '27, maybe '28. Above that, we are in conversations with 2 very established nuclear technology providers, one in the SMR space and one in the conventional reactor space about establishing partnerships to tackle projects together. So we don't have anything to announce today, neither names of technologies or projects, but I can tell you, you would very much recognize these 2 names. It's a go-to-market strategy and as our country and other countries are getting more and more serious about building these large projects. So this is a longer play as far as announcements, probably front-end announcements in '27 and EPC announcements in '28 and '29.

Jamie Cook

Okay. And sorry, just one follow-up. Just as these mega projects move forward and just the constraints that there are in labor, do you see your business model evolving more towards strategic partnerships versus work that's been more transactional historically? I'm just wondering what the implications are for potentially less cyclical earnings or a more stable earnings stream opportunity going forward.

James Breuer

No, that's exactly right, Jamie. We're working hard on growth, but predictability. So whether it's in the execution of the project in partnerships with other contractors or longer-term account relationship with clients, there's a lot of effort on the team to try to provide more predictability to the earnings. But we're balancing that with our growth objectives.

Operator

Your next question comes from the line of Michael Dudas from Vertical Research.

Michael Dudas

Jim, as your bookings and the business evolves over the next few years, you just -- it seems like we can characterize the business right now is pretty clean. The legacy projects, thank goodness, we're not going to have to talk about those much or if at all, in '27. And given where your mix of reimbursable lump sum and the margins you're booking in the current and with the expected backlog, how does the positioning look from a return and margin standpoint into the next few years versus the prior large project cycles maybe with similar different end markets that Fluor has executed. I'm assuming there's a much more visible and predictability in this and maybe I'm assuming better margin accretion. Maybe you can address that, that would be helpful.

James Breuer

Sure. Thanks, Mike. Let me say a couple of things here. One, we are pleased with the margins of the new awards we're seeing so far. We are seeing better margins in these awards than we were expecting 1.5 years ago when we had our Investor Day, Mike in early '25. So that's encouraging. We're paying a lot of attention to the lump sum versus reimbursable mix. We're seeing good margins on both. Obviously, they're very different. Lump sum has higher margins. And so that's why they're an important aspect of our portfolio. We're also working hard with our teams on improving the margins on the reimbursable work given the demand for qualified resources in the marketplace.

So yes, as we grow the company, the backlog and the revenue, that's going to help margin. There's going to be better utilization as we talked about, but we're also driving higher margin performance on the individual projects. So I think over the next several years, as these big projects start entering into their peak production mode, if you will, as John explained, we expect margins to grow materially.

John Regan

Yes. So maybe I'll just append there. We do expect project level margins to improve. And then certainly, with the additional scale, we're going to get more absorption of the overhead. So even bottom line margin should be expanding as we get into that peak execution window.

Michael Dudas

And I'm assuming, John, that with the ERP and the technology, maybe you can frame a little bit of what contribution or absorption impact that could have in this discussion as well?

John Regan

Yes, it's a great question. It's a little bit of a variable right now that's difficult to foretell. But certainly, our expectations coming out of that are going to be a much leaner organization. So I think about better technologies, making us more efficient in the bidding process, ultimately in the planning process, certainly in the execution and in the back office. It's just a little difficult in the moment to say it's going to trigger a 200 basis point improvement or something of that. But that's why we're so keen to get on to the -- advance the project of the future and incorporate those learnings into the ERP design, because it's very tempting what it could do to our margins. But certainly, we would expect up and to the right.

Operator

Your next question comes from the line of Andrew Wittmann from Baird.

Andrew J. Wittmann

I always like to just try to understand the quarter a little bit better. So that's where I'm going to go here. Particularly, I guess I wanted to start on the Urban Solutions segment here. And just you mentioned a couple of moving pieces. I guess we do have that the joint venture mine was $25 million to the negative. First on that one, is that a consolidated JV or unconsolidated? And then you have some good guys here, too. I think you mentioned a favorable claim. There was -- in the press release, you talked about a milestone achievement, I guess. Are those good guys more than the 25? I'm just trying to get a sense of what maybe the underlying margin of Urban was. And I'd love it if you give the numbers, I don't expect that you will, but just understanding how they compared to the 25 bad guy. Just to get a better understanding of what's happening there would be helpful, I think.

John Regan

Yes. Andy, I'll tackle that one. So the project itself is a partial consolidation. So it's a 50-50 joint venture. So the income statement has got the typical effects you'd see for our ownership percentage. And you are right, it was a downer in the quarter, and it was largely offset by the 2 things in infrastructure space. So one was on the -- one of our projects here in Dallas. And so we were successful with change orders that did give us a positive to our earnings. Again, those were -- you said claim, we said change order. So maybe I correct the record there. But those were things that we were looking to drive to conclusion before year-end. So it was a good outcome for us that we landed it in Q3 and a little bit better than we had expected in establishing the forecast or the outlook.

And then on the milestone, that's a different project that hit, as we said, that milestone in Q3 and caused an overall reevaluation of effort to go. And when we did that, there was a reduction in that effort forecasted and applied against percent complete, all of which gave rise to a tailwind. I would say the totality of those 3 things roughly offset each other. So what you see in Urban is really kind of the expectation moving into Q4 when there may be a slight uplift to what we think will come from them in Q4.

Andrew J. Wittmann

That's great. That's really clear. I'm smiling. I didn't know if I'd get that fulsome of an answer, and I did. So thank you for that, John. Also, I guess I wanted to -- on energy, I wanted to kind of dig in a little bit here, too. Obviously, we can see kind of the underlying segment profit there. Obviously, I heard full notice to proceed on LNGC 2. Obviously, that's going to have a big contribution and with full notice to proceed. I would imagine that's going to ramp. And obviously, you got Slide 14 that talks about the company's overall ramp. But maybe just to understand how this one goes, like what is the expected completion date over which we should be thinking about that $7.5 billion being burned. I think that would just give some people some framing as to how this is going to contribute to their earnings as well.

James Breuer

Yes, Andy, this is Jim. So a couple of comments. The graph on that slide is intended to show a theoretical project. So it's not the corporation. It's a typical large mega project. So as far as LNGC, the client has announced start-up in the early 30s, I believe, first half of the 30s, so you can extrapolate from that a 5- to 6-year burn.

John Regan

Yes. And that project is a little different because we did have the sizable limited notice to proceed. And so we're maybe hitting the ground running a little faster on that versus what's on Slide 14, but it's also a really large project. So maybe not quite so much in the first year. So it's complicated, but we wanted to put Slide 14 out there to give us a frame to be able to comment on things like this.

Operator

Your next question comes from the line of Steven Fisher from UBS.

Steven Fisher

I just wanted to ask about that potential $2 billion backlog scope reduction, Jim, that you mentioned. Anything more you can say about what's driving that and the likelihood of that happening or not?

James Breuer

Yes, Steve, go ahead. Go ahead.

John Regan

Yes. Maybe I'll tackle it. Steve, this is something that came up really late last month. So it's still very much a developing story. So it's a change in scope on a project. And so it's not as simple as a situations we've had in the past, it's a project cancellation. And so we know sort of with an amount of precision what that impact is. So it's still under evaluation. As we said, it's a reimbursable contract, so you can intuit what those margins might be. But we think it's in that $2 billion range, and we think we will be able to see -- we'll see that -- those final amounts and have a derecognition going into quarter 4. But we -- it's more than nominal. So we wanted to make sure that we were being transparent with you guys on that is to come.

Steven Fisher

And just in terms of -- is this sort of more kind of a macro environment kind of thing or just something company-specific, project specific? Just sort of any sort of color there.

John Regan

Yes. I think it's just project specific and kind of somewhat ordinary in terms of in-flight projects and clients from time to time reevaluating the scope of what they want us to do.

Operator

This concludes -- your next, Andrew Kaplowitz from Citi.

Andrew Kaplowitz

Sorry, John, can I just ask one follow-up there. Does your guidance then for '27, your initial guidance like include the impact from this project? Like how do we think about that?

John Regan

Yes. So everything that we talked about today is incorporated into that preliminary guidance.

Operator

Now this concludes our question-and-answer session. I would like to turn the call back to Jim Breuer for closing remarks.

James Breuer

Thank you, operator, and thank you for joining today's call. I'm very pleased with our record new awards and the health of our pipeline and excited about our ability to deliver shareholder returns in the years ahead. Thank you, and have a good day.

Operator

This concludes today's call. Thank you all for attending. You may now disconnect.