- Record New Awards of $10.7 Billion; Ending Backlog Rises to $40.2 Billion - up $5.3 Billion from Last Quarter
- Oil & Gas Segment Profit up 32 Percent
Fluor Corporation (NYSE: FLR) today announced financial results for its
first quarter ended March 31, 2014. Net earnings attributable to Fluor
for the first quarter were $149 million, or $0.92 per diluted share,
compared to $166 million, or $1.02 per diluted share a year ago.
Consolidated segment profit for the quarter was $268 million, compared
to $294 million in the first quarter of 2013. Segment profit results
included a 32 percent increase in Oil & Gas, offset by declines in the
Company’s other segments. Revenue for the first quarter was $5.4
billion, down from $7.2 billion last year, mainly due to a significant
reduction in revenue from the Industrial & Infrastructure segment’s
mining and metals business line.
New awards for the quarter were a record $10.7 billion, including $8.8
billion in Oil & Gas, $924 million in Industrial & Infrastructure and
$748 million in Government. Consolidated backlog at the end of the
quarter rose to $40.2 billion, up $5.3 billion over last quarter, and up
from $37.5 billion a year ago.
"Our Oil & Gas group continues to perform extremely well, posting nearly
$9 billion in new awards and growing profitability by 32 percent," said
Chairman and Chief Executive Officer David Seaton. "However, our overall
expectations for the year are tempered by continued weakness in a number
of our other end markets.”
Corporate G&A expense for the first quarter of 2014 was $38 million,
compared with $33 million a year ago. During the quarter, the Company
repurchased approximately $200 million worth of Fluor shares, and paid
out $26 million in dividends to shareholders. Fluor’s cash and
marketable securities balance remains strong at $2.6 billion.
Outlook
Overall, the first quarter was consistent with the Company’s prior
guidance for a slow start in 2014. While Oil & Gas financial performance
in the first quarter exceeded our expectations, and mining project
closeouts helped boost Industrial & Infrastructure performance, results
for Power, Government and Global Services fell short. The outlook for
Oil & Gas is on track and very positive; however, after assessing the
full year outlook for Fluor’s overall portfolio, the Company is
adjusting its full year 2014 EPS guidance downward to a range of $4.10
to $4.45, from the prior range of $4.10 to $4.60 per diluted share.
Business Segments
Fluor’s Oil & Gas business reported segment profit of $138 million,
rising 32 percent from the first quarter of 2013. Revenue of $2.7
billion was level with the revenue reported in the first quarter of
2013. The strong segment profit performance reflects increased
contributions from upstream and petrochemical projects and an increase
in higher margin engineering and design activities. New awards for the
segment totaled $8.8 billion, including a portion of the engineering,
procurement and construction of an LNG project in Canada, as well as a
major clean fuels refinery project in Kuwait, a refinery expansion in
Canada, a pipeline project in Mexico and a chemicals project in
Malaysia. Ending backlog for the Oil & Gas segment rose 38 percent, from
$18.6 billion a year ago, to end the quarter at $25.7 billion.
The Industrial & Infrastructure group reported segment profit of $100
million, compared with $127 million in the first quarter of 2013.
Revenue for the quarter was $1.7 billion, down from $3.1 billion a year
ago. As expected, revenue and segment profit results reflect a decline
in contributions from the mining and metals business line, partly offset
by growth in the infrastructure and industrial services business lines.
New awards for the first quarter were $924 million, including additional
scope on a copper project in Peru and an iron ore facility in Australia.
Backlog for the quarter was $9.9 billion, down from $16.0 billion a year
ago, mainly due to substantially lower mining and metals new awards over
the past year.
The Government group reported segment profit of $13 million, down from
$41 million a year ago, primarily due to lower task order volume on the
LOGCAP IV contract in Afghanistan. Results in the first quarter of 2013
benefited from the successful close out of prior year indirect rate
negotiations. Revenue for the quarter declined 21 percent to $593
million, due to the reduction in LOGCAP IV task order volume. New awards
totaled $748 million for the quarter, including a five year contract to
maintain the United States’ Strategic Petroleum Reserve for the
Department of Energy. Ending backlog was $2.6 billion, up from $2.4
billion last quarter.
Segment profit for the Global Services segment was $19 million in the
first quarter which compares to $28 million a year ago. Revenue declined
modestly to $143 million. Lower results in the quarter were driven by
reductions in the equipment business line’s activities in the mining
sector in Africa and Latin America.
Fluor’s Power group reported a segment loss of $1 million, after
including expenses of $13 million associated with the Company’s
continued investment in NuScale. This represents an improvement from a
segment loss of $7 million a year ago, which included $15 million of
NuScale expenses. Segment revenue for the quarter decreased 34 percent
to $251 million, compared with $383 million a year ago, as two solar
projects and a gas-fired power plant are near completion. New awards for
the quarter were $166 million compared with $448 million in the first
quarter of 2013. Ending backlog was $1.9 billion, which was comparable
with $1.9 billion a year ago.
First Quarter Conference Call
Fluor will host a conference call at 5:30 p.m. Eastern time on Thursday,
May 1, which will be webcast live on the Internet and can be accessed by
logging onto http://investor.fluor.com.
A supplemental slide presentation will be available shortly before the
call begins. The webcast and presentation will be archived for 30 days
following the call. Certain non-GAAP financial measures, as defined
under SEC rules, are included in this press release and may be discussed
during the conference call. A reconciliation of these measures is
included in this press release which will be posted in the investor
relations section of the Company’s website.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering and construction
firm that designs and builds some of the world's most complex projects.
The company creates and delivers innovative solutions for its clients in
engineering, procurement, fabrication, construction, maintenance and
project management on a global basis. For more than a century, Fluor has
served clients in the energy, chemicals, government, industrial,
infrastructure, mining and power market sectors. Headquartered in
Irving, Texas, Fluor ranks 110 on the FORTUNE 500 list. With more than
40,000 employees worldwide, the company's revenue for 2013 was $27.4
billion. Visit Fluor at www.fluor.com
and follow on Twitter @FluorCorp.
Forward-Looking Statements: This
release may contain forward-looking statements (including without
limitation statements to the effect that the Company or its management
"believes," "expects," "anticipates," "plans" or other similar
expressions). These forward-looking statements, including
statements relating to future backlog, revenue and earnings, expected
performance of the Company's business and the outlook of the markets
which the Company serves are based on current management expectations
and involve risks and uncertainties. Actual results may differ
materially as a result of a number of factors, including, among other
things, difficulties or delays incurred in the execution of contracts,
resulting in cost overruns or liabilities, including those caused by the
performance of the Company’s clients, subcontractors, suppliers and
joint venture or teaming partners; intense competition in the global
engineering, procurement and construction industry, which can place
downward pressure on the Company’s contract prices and profit margins;
the Company's failure to receive anticipated new contract awards and the
related impacts on revenues, earnings, staffing levels and costs; the
cyclical nature of many of the markets the Company serves, including the
Company’s commodity-based business lines, and the Company’s
vulnerability to downturns; failure to obtain favorable results in
existing or future litigation or dispute resolution proceedings; current
economic conditions affecting our clients, partners, subcontractors and
suppliers, which may result in decreased capital investment or
expenditures by the Company’s clients or may increase costs or delay
project schedules; client cancellations of, or scope adjustments to,
existing contracts, and the related impacts on staffing levels and cost;
delays or defaults in client payments; failure to meet timely completion
or performance standards that could result in higher costs, reduced
profits or, in some cases, losses on projects; foreign economic and
political uncertainties that could lead to project disruptions,
increased costs and potential losses; international security risks;
liabilities arising from faulty services; risks or uncertainties
associated with events outside of our control, such as the effects of
severe weather, which may result in project delays, increased costs,
liabilities or losses on projects; the potential impact of certain tax
matters including, but not limited to, those from foreign operations and
ongoing audits by tax authorities; the impact of anti-bribery and
international trade laws and regulations; possible information
technology interruptions or inability to protect intellectual property;
foreign exchange risks; failure to maintain safe worksites; the impact
of environmental, health and safety regulations or other laws; possible
limitations on bonding or letter of credit capacity; the Company’s
ability to secure appropriate insurance; the availability of credit and
restrictions imposed by credit facilities, both for the Company and our
clients, suppliers, subcontractors or other partners; and risks or
uncertainties associated with acquisitions, dispositions and investments.
Caution must be exercised in relying on these and other
forward-looking statements. Due to known and unknown risks, the
Company’s results may differ materially from its expectations and
projections.
Additional information concerning these and other factors can be
found in press releases as well as the Company's public periodic filings
with the Securities and Exchange Commission, including the discussion
under the heading "Item 1A. Risk Factors" in the Company's Form 10-K
filed on February 18, 2014. Such filings are available either publicly
or upon request from Fluor's Investor Relations Department: (469)
398-7220. The Company disclaims any intent or obligation other than as
required by law to update its forward-looking statements in light of new
information or future events.
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|
|
|
|
|
|
FLUOR CORPORATION
|
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CONSOLIDATED FINANCIAL RESULTS
|
|
(in millions, except per share amounts)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED OPERATING RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2014
|
|
|
2013
|
|
Revenue
|
|
|
$
|
5,384.6
|
|
|
$
|
7,185.6
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
5,072.3
|
|
|
|
6,843.8
|
|
Corporate general and administrative expense
|
|
|
|
37.8
|
|
|
|
32.6
|
|
Interest expense, net
|
|
|
|
3.0
|
|
|
|
2.9
|
|
Total cost and expenses
|
|
|
|
5,113.1
|
|
|
|
6,879.3
|
|
Earnings before taxes
|
|
|
|
271.5
|
|
|
|
306.3
|
|
Income tax expense
|
|
|
|
78.2
|
|
|
|
93.0
|
|
Net earnings
|
|
|
|
193.3
|
|
|
|
213.3
|
|
Less: Net earnings attributable to noncontrolling interests
|
|
|
|
44.2
|
|
|
|
46.8
|
|
Net earnings attributable to Fluor Corporation
|
|
|
$
|
149.1
|
|
|
$
|
166.5
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
0.93
|
|
|
$
|
1.02
|
|
Weighted average shares
|
|
|
|
160.2
|
|
|
|
162.4
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
0.92
|
|
|
$
|
1.02
|
|
Weighted average shares
|
|
|
|
162.4
|
|
|
|
164.0
|
|
New awards
|
|
|
$
|
10,668.5
|
|
|
$
|
6,511.7
|
|
Backlog
|
|
|
$
|
40,162.6
|
|
|
$
|
37,459.7
|
|
Work performed
|
|
|
$
|
5,241.9
|
|
|
$
|
7,035.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT FINANCIAL REVIEW
|
|
|
|
|
|
|
|
|
|
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|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
|
|
$
|
2,729.7
|
|
|
|
|
$
|
2,769.3
|
|
|
|
|
Industrial & Infrastructure
|
|
|
|
|
|
1,668.1
|
|
|
|
|
|
3,132.2
|
|
|
|
|
Government
|
|
|
|
|
|
593.2
|
|
|
|
|
|
751.2
|
|
|
|
|
Global Services
|
|
|
|
|
|
142.7
|
|
|
|
|
|
149.9
|
|
|
|
|
Power
|
|
|
|
|
|
250.9
|
|
|
|
|
|
383.0
|
|
|
|
|
Total revenue
|
|
|
|
|
$
|
5,384.6
|
|
|
|
|
$
|
7,185.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) $ and margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
|
|
$
|
137.9
|
|
|
5.1
|
%
|
|
$
|
104.5
|
|
|
3.8
|
%
|
|
Industrial & Infrastructure
|
|
|
|
|
|
100.3
|
|
|
6.0
|
%
|
|
|
126.9
|
|
|
4.1
|
%
|
|
Government
|
|
|
|
|
|
12.5
|
|
|
2.1
|
%
|
|
|
41.3
|
|
|
5.5
|
%
|
|
Global Services
|
|
|
|
|
|
18.8
|
|
|
13.2
|
%
|
|
|
27.7
|
|
|
18.5
|
%
|
|
Power
|
|
|
|
|
|
(1.4
|
)
|
|
(0.6
|
)%
|
|
|
(6.8
|
)
|
|
(1.8
|
)%
|
|
Total segment profit $ and margin %
|
|
|
|
|
$
|
268.1
|
|
|
5.0
|
%
|
|
$
|
293.6
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate general and administrative expense
|
|
|
|
|
|
(37.8
|
)
|
|
|
|
|
(32.6
|
)
|
|
|
|
Interest expense, net
|
|
|
|
|
|
(3.0
|
)
|
|
|
|
|
(2.9
|
)
|
|
|
|
Earnings attributable to noncontrolling interests
|
|
|
|
|
|
44.2
|
|
|
|
|
|
48.2
|
|
|
|
|
Earnings before taxes
|
|
|
|
|
$
|
271.5
|
|
|
|
|
$
|
306.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
SELECTED BALANCE SHEET ITEMS
|
|
|
|
|
|
|
|
($ in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
MARCH 31,
|
|
|
DECEMBER 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
Cash and marketable securities, including noncurrent
|
|
|
$
|
2,648.5
|
|
|
|
$
|
2,745.0
|
|
|
Total current assets
|
|
|
|
5,614.8
|
|
|
|
|
6,003.7
|
|
|
Total assets
|
|
|
|
7,991.9
|
|
|
|
|
8,323.9
|
|
|
Total short-term debt
|
|
|
|
29.4
|
|
|
|
|
29.8
|
|
|
Total current liabilities
|
|
|
|
3,144.8
|
|
|
|
|
3,407.2
|
|
|
Long-term debt
|
|
|
|
496.7
|
|
|
|
|
496.6
|
|
|
Shareholders' equity
|
|
|
|
3,690.7
|
|
|
|
|
3,757.0
|
|
|
|
|
|
|
|
|
|
|
Total debt to capitalization % (based on shareholders' equity)
|
|
|
|
12.5
|
%
|
|
|
|
12.3
|
%
|
|
Shareholders' equity per share
|
|
|
$
|
23.17
|
|
|
|
$
|
23.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CASH FLOW ITEMS
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Cash provided (utilized) by operating activities
|
|
|
$
|
186.7
|
|
|
|
$
|
(21.7
|
)
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Net (purchases) sales and maturities of marketable securities
|
|
|
|
(45.6
|
)
|
|
|
|
(25.1
|
)
|
|
Capital expenditures
|
|
|
|
(66.6
|
)
|
|
|
|
(56.9
|
)
|
|
Proceeds from disposal of property, plant and equipment
|
|
|
|
24.6
|
|
|
|
|
15.7
|
|
|
Investments in partnerships and joint ventures
|
|
|
|
(5.0
|
)
|
|
|
|
(7.4
|
)
|
|
Consolidation of a variable interest entity
|
|
|
|
-
|
|
|
|
|
24.7
|
|
|
Acquisitions
|
|
|
|
-
|
|
|
|
|
(7.7
|
)
|
|
Other items
|
|
|
|
(1.1
|
)
|
|
|
|
4.4
|
|
|
Cash utilized by investing activities
|
|
|
|
(93.7
|
)
|
|
|
|
(52.3
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
Repurchase of common stock
|
|
|
|
(192.3
|
)
|
|
|
|
-
|
|
|
Dividends paid
|
|
|
|
(26.0
|
)
|
|
|
|
-
|
|
|
Repayment of 5.625% Municipal Bonds
|
|
|
|
-
|
|
|
|
|
(17.8
|
)
|
|
Repayment of convertible debt and notes payable
|
|
|
|
-
|
|
|
|
|
(8.6
|
)
|
|
Distributions paid to noncontrolling interests, net of capital
contributions
|
|
|
|
(15.9
|
)
|
|
|
|
(17.7
|
)
|
|
Stock options exercised
|
|
|
|
14.1
|
|
|
|
|
5.8
|
|
|
Other Items
|
|
|
|
(4.9
|
)
|
|
|
|
(4.8
|
)
|
|
Cash utilized by financing activities
|
|
|
|
(225.0
|
)
|
|
|
|
(43.1
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(9.5
|
)
|
|
|
|
(22.6
|
)
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
$
|
(141.5
|
)
|
|
|
$
|
(139.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
$
|
48.5
|
|
|
|
$
|
54.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Supplemental Fact Sheet
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2014
|
|
2013
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
8,830
|
|
83
|
%
|
|
$
|
3,064
|
|
47
|
%
|
|
NM
|
|
|
Industrial & Infrastructure
|
|
|
|
924
|
|
9
|
%
|
|
|
2,244
|
|
34
|
%
|
|
(59
|
)%
|
|
Government
|
|
|
|
748
|
|
7
|
%
|
|
|
756
|
|
12
|
%
|
|
(1
|
)%
|
|
Power
|
|
|
|
166
|
|
1
|
%
|
|
|
448
|
|
7
|
%
|
|
(63
|
)%
|
|
Total new awards
|
|
|
$
|
10,668
|
|
100
|
%
|
|
$
|
6,512
|
|
100
|
%
|
|
64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BACKLOG TRENDS
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS OF MARCH 31
|
|
|
2014
|
|
2013
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
25,669
|
|
64
|
%
|
|
$
|
18,561
|
|
49
|
%
|
|
38
|
%
|
|
Industrial & Infrastructure
|
|
|
|
9,922
|
|
25
|
%
|
|
|
15,991
|
|
43
|
%
|
|
(38
|
)%
|
|
Government
|
|
|
|
2,648
|
|
6
|
%
|
|
|
964
|
|
3
|
%
|
|
NM
|
|
|
Power
|
|
|
|
1,924
|
|
5
|
%
|
|
|
1,944
|
|
5
|
%
|
|
(1
|
)%
|
|
Total backlog
|
|
|
$
|
40,163
|
|
100
|
%
|
|
$
|
37,460
|
|
100
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
$
|
12,902
|
|
32
|
%
|
|
$
|
12,121
|
|
32
|
%
|
|
6
|
%
|
|
The Americas (excluding the United States)
|
|
|
|
13,703
|
|
34
|
%
|
|
|
11,373
|
|
30
|
%
|
|
20
|
%
|
|
Europe, Africa and the Middle East
|
|
|
|
11,226
|
|
28
|
%
|
|
|
9,555
|
|
26
|
%
|
|
17
|
%
|
|
Asia Pacific (including Australia)
|
|
|
|
2,332
|
|
6
|
%
|
|
|
4,411
|
|
12
|
%
|
|
(47
|
)%
|
|
Total backlog
|
|
|
$
|
40,163
|
|
100
|
%
|
|
$
|
37,460
|
|
100
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - Not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
Fluor CorporationMedia RelationsBrian Mershon, 469-398-7621orEric Krantz, 281-263-6030orInvestor RelationsKen Lockwood, 469-398-7220orJason Landkamer, 469-398-7222