Fluor
Corporation (NYSE: FLR) today announced financial results for its
first quarter ended March 31, 2017. Net earnings attributable to Fluor
for the first quarter were $61 million, or $0.43 per diluted share,
compared to $104 million, or $0.74 per diluted share a year ago. The
primary reason for the decline in year-over-year results is the
progression of our current projects from higher margin engineering
activities to lower margin construction activities. Results for the
quarter include a pre-tax charge of approximately $30 million for
unanticipated cost increases on projects in the Industrial,
Infrastructure & Power segment, as well as a pre-tax foreign exchange
expense as the result of a strengthening Mexican peso, partially offset
by favorable tax benefits. Consolidated segment profit for the quarter
was $133 million, compared to $241 million a year ago. First quarter
revenue of $4.8 billion compares to $4.4 billion in the prior year.
New awards for the quarter were $2.3 billion, including $817 million in
Energy, Chemicals & Mining, $777 million in Industrial, Infrastructure &
Power, $546 million in Diversified Services (previously Maintenance,
Modification & Asset Integrity) and $173 million in Government.
Consolidated ending backlog of $41.6 billion compares to $46.0 billion a
year ago.
"We continue to experience headwinds as it relates to the timing of
client capital decisions as we come off of one of the lowest commodity
cycles this industry has seen in recent history," said David Seaton,
Fluor chairman and chief executive officer. “However, we still see the
same prospects and the ability for the trend to reverse as we move into
the second half of 2017 and beyond.”
Corporate G&A expense for the first quarter of 2017 was $45 million,
compared with $55 million a year ago. Fluor’s cash and marketable
securities balance at the end of the first quarter was $2.2 billion.
During the quarter, the company generated $270 million in cash from
operating activities, and paid out $30 million in dividends.
Outlook
In light of the lower than expected first quarter result, and,
secondarily, risk around the pace of new awards and revenue for the next
few quarters, the Company is revising its 2017 guidance for EPS to a
range of $2.25 to $2.75 per diluted share, from the previous range of
$2.75 to $3.25 per diluted share.
Business Segments
Fluor’s Energy, Chemicals & Mining segment reported segment profit of
$88 million, compared to $182 million in the first quarter of 2016.
Results for the quarter reflect a continued shift from high margin
engineering activities to lower margin construction activities and a
foreign exchange expense based on the strengthening of the Mexican peso.
First quarter 2017 revenue was $2.3 billion compared to $2.4 billion a
year ago. New awards for the segment totaled $817 million, and ending
backlog was $20.3 billion compared to $26.8 billion a year ago.
The Industrial, Infrastructure & Power segment reported a segment loss
of $6.7 million, compared to a segment profit of $12 million in the
first quarter of 2016. Results for the quarter include approximately $30
million in pre-tax project expenses primarily related to a forecast
adjustment on a gas-fired power project. Revenue for the segment
increased 44 percent to $1.2 billion from $833 million a year ago. New
awards in the first quarter were $777 million including the A10
Zuidasdok motorway project in the Netherlands. Ending backlog for the
segment was $14.6 billion, up from $10.3 billion a year ago.
The Government segment reported segment profit of $29 million, compared
to $17 million a year ago. Revenue for the segment increased 12 percent
to $765 million from $686 million a year ago. First quarter new awards
of $173 million included a multi-year services contract and additional
funding for the Paducah Gaseous Diffusion Plant project. Ending backlog
was $3.7 billion, down from $5.2 billion a year ago. Ending backlog
reflects an adjustment to the Magnox RSRL project in the United Kingdom,
which will now end in August 2019.
The Diversified Services segment reported a segment profit of $23
million in the first quarter of 2017, compared to $30 million a year
ago. Revenue for the quarter was $569 million compared to $461 million
in the first quarter of 2016. Results for the quarter reflect the
inherent seasonality of the Stork business. New awards totaled $546
million for the quarter, and ending backlog was $2.9 billion, down from
$3.7 billion a year ago.
First Quarter Conference Call
Fluor will host a conference call at 5:30 p.m. Eastern time on Thursday,
May 4, 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.
Non-GAAP Financial Measure
This press release contains a discussion of consolidated segment profit
that would be deemed a non-GAAP financial measure under SEC rules.
Segment profit is calculated as revenue less cost of revenue and
earnings attributable to noncontrolling interests excluding: corporate
general and administrative expense; interest expense; interest income;
domestic and foreign income taxes; and other non-operating income and
expense items. The company believes that consolidated segment profit
provides a meaningful perspective on its business results as it is the
aggregation of individual segment profit measures that the company
utilizes to evaluate and manage its business performance. A
reconciliation of this measure to earnings before taxes is included in
the press release tables.
About Fluor Corporation
Fluor
Corporation (NYSE: FLR) is a global engineering, procurement,
fabrication, construction and maintenance company that designs, builds
and maintains capital-efficient facilities for its clients on six
continents. For more than a century, Fluor has served our clients by
delivering innovative and integrated solutions across the globe. With
headquarters in Irving, Texas, Fluor ranks 155 on the FORTUNE 500
list with revenue of $19 billion in 2016 and has more than 60,000
employees worldwide. For more information, please visit www.fluor.com
or follow us 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," is “positioned” or other similar expressions).
These forward-looking statements, including statements relating to
future growth, backlog, earnings and the outlook for the Company’s
business 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 Energy,
Chemicals & Mining commodity-based segment; the Company's failure to
receive new contract awards; the Company’s failure to meet cost and
schedule estimates; difficulties or delays incurred in the execution of
contracts, 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; intense competition in the industries in which we operate;
current economic conditions affecting our clients, partners,
subcontractors and suppliers; foreign economic and political
uncertainties; failure of our joint venture or other partners, suppliers
or subcontractors to perform their obligations; cyber-security breaches;
failure to obtain favorable results in existing or future litigation or
dispute resolution proceedings or claims; client delays or defaults in
making payments; failure to meet timely completion or performance
standards; liabilities arising from faulty services; risks or
uncertainties associated with events outside of our control, including
weather conditions; the Company’s failure, or the failure of our agents
or partners, to comply with laws; the potential impact of certain tax
matters; possible information technology interruptions or inability to
protect intellectual property; new or changing legal requirements;
liabilities associated with the performance of nuclear services; 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; risks arising from the inability to successfully integrate
acquired businesses; 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 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 17, 2017.
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
|
|
|
|
2017
|
|
|
2016
|
|
Revenue
|
|
|
|
$
|
4,835.9
|
|
|
$
|
4,423.9
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
4,686.0
|
|
|
|
4,168.1
|
|
Corporate general and administrative expense
|
|
|
|
|
45.0
|
|
|
|
55.1
|
|
Interest expense, net
|
|
|
|
|
11.5
|
|
|
|
11.5
|
|
Total cost and expenses
|
|
|
|
|
4,742.5
|
|
|
|
4,234.7
|
|
Earnings before taxes
|
|
|
|
|
93.4
|
|
|
|
189.2
|
|
Income tax expense
|
|
|
|
|
16.1
|
|
|
|
70.2
|
|
Net earnings
|
|
|
|
|
77.3
|
|
|
|
119.0
|
|
Less: Net earnings attributable to noncontrolling interests
|
|
|
|
|
16.7
|
|
|
|
14.7
|
|
Net earnings attributable to Fluor Corporation
|
|
|
|
$
|
60.6
|
|
|
$
|
104.3
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
$
|
0.43
|
|
|
$
|
0.75
|
|
Weighted average shares
|
|
|
|
|
139.4
|
|
|
|
139.0
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
$
|
0.43
|
|
|
$
|
0.74
|
|
Weighted average shares
|
|
|
|
|
141.0
|
|
|
|
140.9
|
|
|
|
|
|
|
|
|
|
|
New awards
|
|
|
|
$
|
2,313.3
|
|
|
$
|
4,681.4
|
|
Backlog
|
|
|
|
$
|
41,607.1
|
|
|
$
|
45,989.5
|
|
Work performed
|
|
|
|
$
|
4,733.5
|
|
|
$
|
4,311.3
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT FINANCIAL REVIEW AND U.S. GAAP RECONCILIATION
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
|
2017
|
|
|
|
|
|
2016
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy, Chemicals & Mining
|
|
|
|
$
|
2,302.2
|
|
|
|
|
|
|
$
|
2,443.5
|
|
|
|
|
|
Industrial, Infrastructure & Power
|
|
|
|
|
1,199.3
|
|
|
|
|
|
|
|
833.3
|
|
|
|
|
|
Government
|
|
|
|
|
765.2
|
|
|
|
|
|
|
|
686.0
|
|
|
|
|
|
Diversified Services
|
|
|
|
|
569.2
|
|
|
|
|
|
|
|
461.1
|
|
|
|
|
|
Total revenue
|
|
|
|
$
|
4,835.9
|
|
|
|
|
|
|
$
|
4,423.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) $ and margin %
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy, Chemicals & Mining
|
|
|
|
$
|
88.3
|
|
|
|
3.8
|
%
|
|
|
$
|
182.0
|
|
|
|
7.4
|
%
|
|
Industrial, Infrastructure & Power (1)
|
|
|
|
|
(6.7
|
)
|
|
|
(0.6
|
)%
|
|
|
|
11.9
|
|
|
|
1.4
|
%
|
|
Government
|
|
|
|
|
29.0
|
|
|
|
3.8
|
%
|
|
|
|
17.1
|
|
|
|
2.5
|
%
|
|
Diversified Services
|
|
|
|
|
22.6
|
|
|
|
4.0
|
%
|
|
|
|
30.1
|
|
|
|
6.5
|
%
|
|
Total segment profit $ and margin %
|
|
|
|
$
|
133.2
|
|
|
|
2.8
|
%
|
|
|
$
|
241.1
|
|
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate general and administrative expense
|
|
|
|
|
(45.0
|
)
|
|
|
|
|
|
|
(55.1
|
)
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(11.5
|
)
|
|
|
|
|
|
|
(11.5
|
)
|
|
|
|
|
Earnings attributable to noncontrolling interests
|
|
|
|
|
16.7
|
|
|
|
|
|
|
|
14.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
|
|
|
|
$
|
93.4
|
|
|
|
|
|
|
$
|
189.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes research and development expenses associated with NuScale
totaling $16 million and $26 million for three months ended March 31,
2017 and 2016, respectively.
(2) Segment profit margin % is calculated as segment profit divided by
segment revenue.
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED BALANCE SHEET ITEMS
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARCH 31,
|
|
|
|
DECEMBER 31,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
Cash and marketable securities, including noncurrent
|
|
|
|
$
|
2,180.9
|
|
|
|
|
$
|
2,105.0
|
|
|
Total current assets
|
|
|
|
|
5,560.3
|
|
|
|
|
|
5,610.3
|
|
|
Total assets
|
|
|
|
|
9,160.3
|
|
|
|
|
|
9,216.4
|
|
|
Total short-term debt
|
|
|
|
|
40.9
|
|
|
|
|
|
82.2
|
|
|
Total current liabilities
|
|
|
|
|
3,676.4
|
|
|
|
|
|
3,816.0
|
|
|
Long-term debt
|
|
|
|
|
1,526.0
|
|
|
|
|
|
1,517.9
|
|
|
Shareholders' equity
|
|
|
|
|
3,220.8
|
|
|
|
|
|
3,125.2
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CASH FLOW ITEMS
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
|
|
$
|
270.2
|
|
|
|
|
$
|
114.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Net (purchases) sales and maturities of marketable securities
|
|
|
|
|
41.3
|
|
|
|
|
|
98.7
|
|
|
Capital expenditures
|
|
|
|
|
(66.9
|
)
|
|
|
|
|
(48.6
|
)
|
|
Proceeds from disposal of property, plant and equipment
|
|
|
|
|
14.7
|
|
|
|
|
|
25.9
|
|
|
Investments in partnerships and joint ventures
|
|
|
|
|
(86.0
|
)
|
|
|
|
|
(402.4
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
|
|
-
|
|
|
|
|
|
(240.8
|
)
|
|
Other items
|
|
|
|
|
0.6
|
|
|
|
|
|
7.2
|
|
|
Cash utilized by investing activities
|
|
|
|
|
(96.3
|
)
|
|
|
|
|
(560.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Repurchase of common stock
|
|
|
|
|
-
|
|
|
|
|
|
(9.7
|
)
|
|
Dividends paid
|
|
|
|
|
(30.0
|
)
|
|
|
|
|
(29.9
|
)
|
|
Proceeds from issuance of 1.75% Senior Notes
|
|
|
|
|
-
|
|
|
|
|
|
552.9
|
|
|
Debt issuance costs
|
|
|
|
|
-
|
|
|
|
|
|
(3.2
|
)
|
|
Repayment of Stork Notes and other borrowings
|
|
|
|
|
-
|
|
|
|
|
|
(326.3
|
)
|
|
Borrowings under revolving lines of credit
|
|
|
|
|
-
|
|
|
|
|
|
760.0
|
|
|
Repayment of borrowings under revolving lines of credit
|
|
|
|
|
(53.5
|
)
|
|
|
|
|
(760.0
|
)
|
|
Distributions paid to noncontrolling interests, net of capital
contributions
|
|
|
|
|
(8.6
|
)
|
|
|
|
|
(11.6
|
)
|
|
Other Items
|
|
|
|
|
14.6
|
|
|
|
|
|
(1.4
|
)
|
|
Cash provided (utilized) by financing activities
|
|
|
|
|
(77.5
|
)
|
|
|
|
|
170.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
20.7
|
|
|
|
|
|
22.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
$
|
117.1
|
|
|
|
|
$
|
(252.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
$
|
50.7
|
|
|
|
|
$
|
47.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLUOR CORPORATION
|
|
Supplemental Fact Sheet
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy, Chemicals & Mining
|
|
|
|
$
|
817
|
|
|
35
|
%
|
|
|
|
$
|
579
|
|
|
12
|
%
|
|
Industrial, Infrastructure & Power
|
|
|
|
|
777
|
|
|
34
|
%
|
|
|
|
|
1,433
|
|
|
31
|
%
|
|
Government
|
|
|
|
|
173
|
|
|
7
|
%
|
|
|
|
|
2,266
|
|
|
48
|
%
|
|
Diversified Services
|
|
|
|
|
546
|
|
|
24
|
%
|
|
|
|
|
404
|
|
|
9
|
%
|
|
Total new awards
|
|
|
|
$
|
2,313
|
|
|
100
|
%
|
|
|
|
$
|
4,682
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BACKLOG TRENDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS OF MARCH 31
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy, Chemicals & Mining
|
|
|
|
$
|
20,349
|
|
|
49
|
%
|
|
|
|
$
|
26,786
|
|
|
58
|
%
|
|
Industrial, Infrastructure & Power
|
|
|
|
|
14,628
|
|
|
35
|
%
|
|
|
|
|
10,319
|
|
|
23
|
%
|
|
Government
|
|
|
|
|
3,702
|
|
|
9
|
%
|
|
|
|
|
5,180
|
|
|
11
|
%
|
|
Diversified Services
|
|
|
|
|
2,928
|
|
|
7
|
%
|
|
|
|
|
3,705
|
|
|
8
|
%
|
|
Total backlog
|
|
|
|
$
|
41,607
|
|
|
100
|
%
|
|
|
|
$
|
45,990
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
$
|
21,738
|
|
|
52
|
%
|
|
|
|
$
|
19,782
|
|
|
43
|
%
|
|
The Americas (excluding the United States)
|
|
|
|
|
3,012
|
|
|
7
|
%
|
|
|
|
|
9,797
|
|
|
21
|
%
|
|
Europe, Africa and the Middle East
|
|
|
|
|
15,287
|
|
|
37
|
%
|
|
|
|
|
13,756
|
|
|
30
|
%
|
|
Asia Pacific (including Australia)
|
|
|
|
|
1,570
|
|
|
4
|
%
|
|
|
|
|
2,655
|
|
|
6
|
%
|
|
Total backlog
|
|
|
|
$
|
41,607
|
|
|
100
|
%
|
|
|
|
$
|
45,990
|
|
|
100
|
%
|
Fluor CorporationMedia RelationsBrian Mershon, 469-398-7621orBrett Turner, 864-281-6976orInvestor RelationsGeoff Telfer, 469-398-7070orJason Landkamer, 469-398-7222