Fluor Corporation (NYSE: FLR) today announced financial results for its
first quarter ended March 31, 2015. Net earnings attributable to Fluor
for the first quarter were $144 million, or $0.96 per diluted share,
compared to $149 million, or $0.92 per diluted share a year ago.
Consolidated segment profit for the quarter was $276 million, compared
to $268 million in the first quarter of 2014. Segment profit results
reflect continued improvement in Oil & Gas as well as Government, partly
offset by declines in the Industrial & Infrastructure segment’s mining
and metals business line. Revenue for the first quarter was $4.5
billion, down from $5.4 billion last year, primarily due to continued
reductions in the mining and metals business line.
New awards for the quarter were $4.4 billion, including $2.9 billion in
Oil & Gas and $1.4 billion in Industrial & Infrastructure. Consolidated
backlog at the end of the quarter was $41.2 billion, up from $40.2
billion a year ago.
"Our ability to provide clients with capital efficient project execution
through our integrated solutions model continues to gain traction, as
evidenced this quarter by strong Oil & Gas performance," said Chairman
and Chief Executive Officer David Seaton. "While bookings may be slower
over the near term, we continue to see a number of high quality world
scale opportunities."
Corporate G&A expense for the first quarter of 2015 was $41 million,
compared with $38 million a year ago. During the quarter, the Company
repurchased approximately $112 million worth of Fluor shares, and paid
out $32 million in dividends to shareholders. Fluor’s cash and
marketable securities balance remains strong at $2.2 billion.
Ending backlog was reduced by approximately $1.6 billion as a result of
the strong dollar. Foreign exchange rates did not have a significant
impact on earnings for the first quarter.
Outlook
Overall, the first quarter was consistent with the Company’s prior
guidance for a slow start in 2015. As a result, the company is
maintaining its 2015 guidance range of $4.40 to $5.00 per diluted share.
This guidance excludes the effects of the previously announced
termination and settlement of Fluor’s U.S. defined benefit pension plan
which is expected in the latter part of 2015.
Business Segments
Fluor’s Oil & Gas business reported segment profit of $183 million, an
increase from $139 million in the first quarter of 2014. Revenue of $2.5
billion declined from $2.8 billion a year ago primarily due to certain
large projects progressing towards completion. Strong segment profit
performance reflects increased contributions from refining projects
awarded in 2014. New awards for the segment totaled $2.9 billion,
including a pipeline project in the United States. Ending backlog for
the Oil & Gas segment rose 8 percent, from $25.8 billion a year ago, to
end the quarter at $27.8 billion.
The Industrial & Infrastructure group reported segment profit of $71
million, a 27 percent decline from $97 million in the first quarter of
2014. Revenue for the quarter was $1.1 billion, down from $1.6 billion a
year ago. Revenue and segment profit results reflect a decline in
contributions from the mining and metals business line. New awards for
the first quarter were $1.4 billion, primarily for mining and metals and
industrial services customers. Backlog at quarter end was $7.3 billion,
down from $9.8 billion a year ago, mainly due to project execution
outpacing new award activity in the mining and metals and infrastructure
business lines.
Segment profit for the Government group was $15 million, up modestly
from $13 million a year ago. Revenue for the quarter improved 9 percent
to $646 million, due to the increased execution activities on projects
awarded in 2014. New awards totaled $74 million for the quarter, and
ending backlog was $4.2 billion, up from $2.6 billion a year ago.
Segment profit for the Global Services segment was $15 million in the
first quarter which compares to $21 million a year ago. Revenue was $130
million, down from $142 million last year. Results in the quarter were
driven by reductions in the equipment business line’s activities in
Afghanistan and Latin America.
Fluor’s Power group reported a segment loss of $9 million, compared to a
loss of $1 million a year ago. Excluding NuScale expenses of $17 million
in the first quarter and $13 million a year ago, segment profit was $8
million and $12 million respectively. Segment revenue for the quarter
decreased 12 percent to $221 million, compared with $251 million a year
ago, due to the completion of two major projects in 2014. New awards for
the quarter were $114 million compared with $166 million in the first
quarter of 2014. Ending backlog was $1.9 billion, which was comparable
with a year ago.
First Quarter Conference Call
Fluor will host a conference call at 5:30 p.m. Eastern time on Thursday,
April 30, 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 109 on the FORTUNE 500 list. With 40,000
employees worldwide, the company's revenue for 2014 was $21.5 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, 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; the Company's failure to receive
anticipated new contract awards and the related impacts on revenues,
earnings, staffing levels and costs; 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; client
cancellations of, or scope adjustments to, existing contracts, and the
related impacts on staffing levels and cost; intense competition in the
global engineering, procurement and construction industry, which can
place downward pressure on the Company’s contract prices and profit
margins; 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; foreign economic and political
uncertainties that could lead to project disruptions, increased costs
and potential losses; failure to obtain favorable results in existing or
future litigation or dispute resolution proceedings; 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; 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
Company’s failure, or the failure of our agents or partners, to comply
with laws, including anti-bribery laws, international trade laws or
environmental, health and safety laws or regulations; the potential
impact of certain tax matters including, but not limited to, those from
foreign operations and ongoing audits by tax authorities; possible
information technology interruptions, security breaches or inability to
protect intellectual property; foreign exchange risks; the inability to
hire and retain qualified personnel; failure to maintain safe worksites
and international security risks; the availability of credit and
restrictions imposed by credit facilities, both for the Company and our
clients, suppliers, subcontractors or other partners; possible
limitations on bonding or letter of credit capacity; risks or
uncertainties associated with acquisitions, dispositions and
investments; and the Company’s ability to secure appropriate insurance.
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, 2015. Such filings are available either publicly
or upon request from Fluor's Investor Relations Department: (469)
398-7070. 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.
|
|
|
|
|
FLUOR CORPORATION
|
|
CONSOLIDATED FINANCIAL RESULTS
|
|
(in millions, except per share amounts)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED OPERATING RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
|
|
$
|
4,548.6
|
|
|
$
|
5,384.6
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
4,251.2
|
|
|
|
5,072.3
|
|
Corporate general and administrative expense
|
|
|
|
41.1
|
|
|
|
37.8
|
|
Interest expense, net
|
|
|
|
7.4
|
|
|
|
3.0
|
|
Total cost and expenses
|
|
|
|
4,299.7
|
|
|
|
5,113.1
|
|
Earnings before taxes
|
|
|
|
248.9
|
|
|
|
271.5
|
|
Income tax expense
|
|
|
|
83.3
|
|
|
|
78.2
|
|
Net earnings
|
|
|
|
165.6
|
|
|
|
193.3
|
|
Less: Net earnings attributable to noncontrolling interests
|
|
|
|
21.5
|
|
|
|
44.2
|
|
Net earnings attributable to Fluor Corporation
|
|
|
$
|
144.1
|
|
|
$
|
149.1
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
0.98
|
|
|
$
|
0.93
|
|
Weighted average shares
|
|
|
|
147.7
|
|
|
|
160.2
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
0.96
|
|
|
$
|
0.92
|
|
Weighted average shares
|
|
|
|
149.9
|
|
|
|
162.4
|
|
New awards
|
|
|
$
|
4,447.7
|
|
|
$
|
10,668.5
|
|
Backlog
|
|
|
$
|
41,194.8
|
|
|
$
|
40,162.6
|
|
Work performed
|
|
|
$
|
4,419.0
|
|
|
$
|
5,241.9
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT FINANCIAL REVIEW
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2015
|
|
|
|
|
2014 (1)
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
2,471.6
|
|
|
|
|
|
$
|
2,782.8
|
|
|
|
|
Industrial & Infrastructure
|
|
|
|
1,080.2
|
|
|
|
|
|
|
1,615.7
|
|
|
|
|
Government
|
|
|
|
646.0
|
|
|
|
|
|
|
593.2
|
|
|
|
|
Global Services
|
|
|
|
129.7
|
|
|
|
|
|
|
142.0
|
|
|
|
|
Power
|
|
|
|
221.1
|
|
|
|
|
|
|
250.9
|
|
|
|
|
Total revenue
|
|
|
$
|
4,548.6
|
|
|
|
|
|
$
|
5,384.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) $ and margin %
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
183.3
|
|
|
7.4
|
%
|
|
|
$
|
139.1
|
|
|
5.0
|
%
|
|
Industrial & Infrastructure
|
|
|
|
71.1
|
|
|
6.6
|
%
|
|
|
|
97.2
|
|
|
6.0
|
%
|
|
Government
|
|
|
|
14.8
|
|
|
2.3
|
%
|
|
|
|
12.5
|
|
|
2.1
|
%
|
|
Global Services
|
|
|
|
15.3
|
|
|
11.8
|
%
|
|
|
|
20.7
|
|
|
14.6
|
%
|
|
Power (2)
|
|
|
|
(8.6
|
)
|
|
(3.9
|
)%
|
|
|
|
(1.4
|
)
|
|
(0.6
|
)%
|
|
Total segment profit $ and margin %
|
|
|
$
|
275.9
|
|
|
6.1
|
%
|
|
|
$
|
268.1
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate general and administrative expense
|
|
|
|
(41.1
|
)
|
|
|
|
|
|
(37.8
|
)
|
|
|
|
Interest expense, net
|
|
|
|
(7.4
|
)
|
|
|
|
|
|
(3.0
|
)
|
|
|
|
Earnings attributable to noncontrolling interests
|
|
|
|
21.5
|
|
|
|
|
|
|
44.2
|
|
|
|
|
Earnings before taxes
|
|
|
$
|
248.9
|
|
|
|
|
|
$
|
271.5
|
|
|
|
(1) Effective January 1, 2015, the company implemented certain
organizational changes that impacted the composition of its reportable
segments. Revenue and segment profit for the Oil & Gas, Industrial &
Infrastructure and Global Services segments in 2014 have been recast to
reflect these changes.
(2) Includes research and development expenses associated with NuScale
totaling $17 million and $13 million for the three months ended March
31, 2015 and 2014, respectively.
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
SELECTED BALANCE SHEET ITEMS
|
|
|
|
|
|
|
|
($ in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
MARCH 31,
|
|
|
DECEMBER 31,
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Cash and marketable securities, including noncurrent
|
|
|
$
|
2,211.6
|
|
|
|
$
|
2,441.9
|
|
|
Total current assets
|
|
|
|
5,379.3
|
|
|
|
|
5,758.0
|
|
|
Total assets
|
|
|
|
7,619.2
|
|
|
|
|
8,194.4
|
|
|
Total short-term debt
|
|
|
|
27.7
|
|
|
|
|
28.7
|
|
|
Total current liabilities
|
|
|
|
2,819.7
|
|
|
|
|
3,330.9
|
|
|
Long-term debt
|
|
|
|
992.2
|
|
|
|
|
991.7
|
|
|
Shareholders' equity
|
|
|
|
3,068.7
|
|
|
|
|
3,110.9
|
|
|
|
|
|
|
|
|
|
|
Total debt to capitalization % (based on shareholders' equity)
|
|
|
|
24.9
|
%
|
|
|
|
24.7
|
%
|
|
Shareholders' equity per share
|
|
|
$
|
20.88
|
|
|
|
$
|
20.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CASH FLOW ITEMS
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
|
$
|
39.3
|
|
|
|
$
|
186.7
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Net (purchases) sales and maturities of marketable securities
|
|
|
|
47.6
|
|
|
|
|
(45.6
|
)
|
|
Capital expenditures
|
|
|
|
(73.9
|
)
|
|
|
|
(66.6
|
)
|
|
Proceeds from disposal of property, plant and equipment
|
|
|
|
29.9
|
|
|
|
|
24.6
|
|
|
Investments in partnerships and joint ventures
|
|
|
|
(21.5
|
)
|
|
|
|
(5.0
|
)
|
|
Other items
|
|
|
|
(0.2
|
)
|
|
|
|
(1.1
|
)
|
|
Cash utilized by investing activities
|
|
|
|
(18.1
|
)
|
|
|
|
(93.7
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
Repurchase of common stock
|
|
|
|
(111.7
|
)
|
|
|
|
(192.3
|
)
|
|
Dividends paid
|
|
|
|
(32.4
|
)
|
|
|
|
(26.0
|
)
|
|
Distributions paid to noncontrolling interests, net of capital
contributions
|
|
|
|
(2.8
|
)
|
|
|
|
(15.9
|
)
|
|
Stock options exercised
|
|
|
|
0.9
|
|
|
|
|
14.1
|
|
|
Other Items
|
|
|
|
(8.0
|
)
|
|
|
|
(4.9
|
)
|
|
Cash utilized by financing activities
|
|
|
|
(154.0
|
)
|
|
|
|
(225.0
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(49.0
|
)
|
|
|
|
(9.5
|
)
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
$
|
(181.8
|
)
|
|
|
$
|
(141.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
$
|
47.8
|
|
|
|
$
|
48.5
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Supplemental Fact Sheet
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
2015
|
|
|
2014 (1)
|
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
2,903
|
|
|
65
|
%
|
|
|
$
|
8,850
|
|
|
83
|
%
|
|
|
(67
|
)%
|
|
Industrial & Infrastructure
|
|
|
|
1,357
|
|
|
30
|
%
|
|
|
|
904
|
|
|
8
|
%
|
|
|
50
|
%
|
|
Government
|
|
|
|
74
|
|
|
2
|
%
|
|
|
|
748
|
|
|
7
|
%
|
|
|
(90
|
)%
|
|
Power
|
|
|
|
114
|
|
|
3
|
%
|
|
|
|
166
|
|
|
2
|
%
|
|
|
(31
|
)%
|
|
Total new awards
|
|
|
$
|
4,448
|
|
|
100
|
%
|
|
|
$
|
10,668
|
|
|
100
|
%
|
|
|
(58
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BACKLOG TRENDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS OF MARCH 31
|
|
|
2015 (2)
|
|
|
2014 (1)
|
|
|
% Chg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
|
|
$
|
27,818
|
|
|
67
|
%
|
|
|
$
|
25,795
|
|
|
64
|
%
|
|
|
8
|
%
|
|
Industrial & Infrastructure
|
|
|
|
7,263
|
|
|
18
|
%
|
|
|
|
9,796
|
|
|
24
|
%
|
|
|
(26
|
)%
|
|
Government
|
|
|
|
4,171
|
|
|
10
|
%
|
|
|
|
2,648
|
|
|
7
|
%
|
|
|
58
|
%
|
|
Power
|
|
|
|
1,943
|
|
|
5
|
%
|
|
|
|
1,924
|
|
|
5
|
%
|
|
|
1
|
%
|
|
Total backlog
|
|
|
$
|
41,195
|
|
|
100
|
%
|
|
|
$
|
40,163
|
|
|
100
|
%
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
$
|
15,245
|
|
|
37
|
%
|
|
|
$
|
12,902
|
|
|
32
|
%
|
|
|
18
|
%
|
|
The Americas (excluding the United States)
|
|
|
|
11,426
|
|
|
28
|
%
|
|
|
|
13,703
|
|
|
34
|
%
|
|
|
(17
|
)%
|
|
Europe, Africa and the Middle East
|
|
|
|
11,559
|
|
|
28
|
%
|
|
|
|
11,226
|
|
|
28
|
%
|
|
|
3
|
%
|
|
Asia Pacific (including Australia)
|
|
|
|
2,965
|
|
|
7
|
%
|
|
|
|
2,332
|
|
|
6
|
%
|
|
|
27
|
%
|
|
Total backlog
|
|
|
$
|
41,195
|
|
|
100
|
%
|
|
|
$
|
40,163
|
|
|
100
|
%
|
|
|
3
|
%
|
(1) Effective January 1, 2015, the company implemented certain
organizational changes that impacted the composition of its reportable
segments. New awards and backlog for the Oil & Gas and Industrial &
Infrastructure segments in 2014 have been recast to reflect these
changes.
(2) Backlog as of March 31, 2015 was reduced by approximately $1.6
billion due to a strengthening U.S. dollar compared to most major
foreign currencies, of which $1.5 billion related to the Oil & Gas
segment.
Fluor CorporationMedia RelationsBrian Mershon, 469-398-7621orInvestor RelationsGeoff Telfer, 469-398-7070orJason Landkamer, 469-398-7222