Exhibit 99.1
Fluor Corporation | Keith Stephens / Brian Mershon |
6700 Las Colinas Blvd | Media Relations |
Irving, Texas 75039 | 469.398.7624 / 469.398.7621 tel |
| |
469.398.7000 main tel | Ken Lockwood / Jason Landkamer |
| Investor Relations |
| 469.398.7220 / 469.398.7222 tel |
News Release
FLUOR REPORTS RECORD NEW AWARDS OF $9.3 BILLION, BOOSTING
BACKLOG TO $30.2 BILLION
IRVING, TEXAS — July 26, 2010 — Fluor Corporation (NYSE: FLR) today announced financial results for its second quarter ended June 30, 2010. Net earnings attributable to Fluor were $157 million, or $0.87 per diluted share, compared with $169 million or $0.93 per diluted share for the same period last year. Segment profit for the quarter was $262 million, compared with $309 million in the second quarter of 2009, driven mainly by strength in Industrial & Infrastructure and Power which was offset by lower results in Oil & Gas. Segment margin was 5.1 percent, compared with 5.8 percent a year ago. Revenue was $5.2 billion in the second quarter of 2010, just under last year’s $5.3 billion.
New project awards for the second quarter were a record $9.3 billion, surpassing the company’s previous high for a single quarter, well above the quarterly run rate of approximately $3 billion in the prior three quarters. Awards in the quarter included $7.2 billion in Industrial & Infrastructure driven by new mining and metals projects, $1.0 billion of Oil & Gas awards and approximately $600 million of Government awards. Consolidated backlog rose to $30.2 billion, up from $25.7 billion last quarter, and compared with $30.9 billion a year ago.
Corporate G&A expense for the quarter was $28 million, down from $42 million in the second quarter of 2009. The lower G&A expense is primarily due to lower compensation costs. Fluor’s financial condition continues to be very strong, with cash plus current and noncurrent marketable securities totaling $2.1 billion, which compares with $2.3 billion a year ago.
“Fluor has once again demonstrated the tremendous power of its diversified business model with the recognition of record new awards and growing backlog led by our global mining business,” said Chairman and Chief Executive Officer Alan Boeckmann. “Looking ahead to the balance of 2010, we see the potential for continued strong new awards in the second half, especially in our mining, oil and gas, and infrastructure businesses.”
Outlook
Given the strength of results in the second quarter, the company is raising the lower end of its 2010 EPS guidance to a range of $2.90 to $3.20 per share, from the previous range of $2.80 to $3.20 per share.
Business Segments
Fluor’s Oil & Gas segment reported second quarter revenue of $1.8 billion, down 42 percent from the second quarter of 2009. Segment profit declined to $98 million, compared with $181 million a year ago, driven mainly by lower revenues. New oil and gas awards in the second quarter totaled $1.0 billion, driven by international awards including a program management contract on the Shah Gas program in Abu Dhabi, which compares with $2.9 billion a year ago. During the quarter, Fluor was selected for the upstream facilities component of
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Santos’ Gladstone Liquefied Natural Gas (GLNG) project in Australia. Approximately $45 million was included in second quarter new awards, with a full contract award expected in late 2010 or early 2011. Ending backlog at June 30, 2010 for Oil & Gas was $10.2 billion, which compares with $15.8 billion a year ago.
Fluor’s Industrial & Infrastructure segment reported second quarter revenue of $1.8 billion, up 82 percent over last year. Segment profit for the second quarter increased 42 percent from a year ago to $48 million. Increased results for the current quarter were mainly attributable to substantially higher levels of mining and infrastructure project activity. Segment new awards were a record $7.2 billion for the quarter, compared with $2.2 billion a year ago, including a large aluminum program in Saudi Arabia valued at approximately $3 billion, a copper project in Chile valued at $1.4 billion, a copper/gold project in Mongolia valued at approximately $1 billion, and a $1 billion copper/gold project in Australia. Backlog rose to a segment record of $16.1 billion, increasing $5.6 billion over last quarter, and up 65 percent from a year ago.
Revenue for the Government segment was $777 million for the second quarter of 2010, up 62 percent from $479 million a year ago. Segment profit was $35 million, up from last year’s results which included $15 million from a favorable project settlement. Improved results in the quarter were primarily due to increased contributions from LOGCAP IV task orders in Afghanistan. Second quarter new awards totaled $638 million, including $542 million for LOGCAP IV task orders. Segment backlog at the end of the quarter was $635 million, which is
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down from $974 million a year ago due to project execution activities related to American Recovery and Reinvestment Act work at the Savannah River site.
The Global Services segment reported revenue of $327 million, on par with $341 million in the second quarter of last year. Segment profit was $32 million, a 24 percent increase from a year ago, reflecting higher margins in the equipment services business line and contributions from the operations and maintenance business line in support of the Gulf Coast oil spill cleanup. New awards were $359 million, which compares with $371 million last year. Backlog at quarter end was $2.1 billion at the end of the second quarter, up 16 percent from $1.8 billion a year ago.
Fluor’s Power segment reported revenue of $469 million, up 5 percent from last year. Segment profit increased 41 percent to $50 million in the second quarter, mainly due to the recognition of additional fees upon the successful completion of a large coal-fired power plant and substantial progress on other projects in the segment. The segment’s positive results in the quarter were impacted by a $51 million provision for the estimated additional costs to complete a gas-fired power plant in Georgia. Power segment new awards were $82 million, and ending backlog for the quarter was $1.1 billion, compared with $2.6 billion a year ago.
Results for the Six Months
Net earnings attributable to Fluor for the six months ended June 30, 2010 were $294 million, or $1.63 per diluted share. This compares with $374 million, or $2.05 per diluted share, for the first six months of 2009. Revenue was $10.1 billion, compared with $11.1 billion in the first half of last year.
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Second Quarter Call
Fluor will host a conference call at 5:30 p.m. Eastern Daylight Time on Monday, July 26, 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. The Company expects to file its Form 10-Q with the SEC on Tuesday, July 27, 2010.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) designs, builds and maintains many of the world’s most challenging and complex projects. Through its global network of offices on six continents, the company provides comprehensive capabilities and world-class expertise in the fields of engineering, procurement, construction, commissioning, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 200 company and had revenues of $22 billion in 2009. For more information visit www.fluor.com.
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 failure to achieve projected backlog, revenue and/or earnings levels; 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 staffing levels
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and cost; decreased capital investment or expenditures, or a failure to make anticipated increased capital investment or expenditures, by the Company’s clients; difficulties or delays incurred in the execution of contracts, including performance by the Company’s joint venture or teaming partners, resulting in cost overruns or liabilities; failure to meet timely completion or performance standards that could result in higher costs, reduced profits or, in some cases, losses on projects; 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 financial viability of the Company’s clients, subcontractors, suppliers and joint venture or teaming partners; client cancellations of, or scope adjustments to, existing contracts, including the Company’s government contracts that may be terminated at any time, and the related impacts on staffing levels and cost; delays or defaults in client payments; the availability of credit and restrictions imposed by credit facilities, both for the Company and our clients; failure to obtain favorable results in existing or future litigation or dispute resolution proceedings; failure to maintain safe worksites; foreign economic and political uncertainties; the potential impact of certain tax matters including, but not limited to, those from foreign operations and ongoing audits by tax authorities; the Company’s ability to hire and retain qualified personnel; and the timely and successful implementation of strategic initiatives. 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 25, 2010. 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
CONSOLIDATED FINANCIAL RESULTS
(in millions, except per share amounts)
Unaudited
CONSOLIDATED OPERATING RESULTS
THREE MONTHS ENDED JUNE 30 | | 2010 | | 2009 | |
Revenue | | $ | 5,152.1 | | $ | 5,292.6 | |
Cost and Expenses: | | | | | |
Cost of Revenue | | 4,868.4 | | 4,975.6 | |
Corporate G&A | | 27.8 | | 42.0 | |
Interest Income, net | | (3.2 | ) | (3.3 | ) |
Total Cost and Expenses | | 4,893.0 | | 5,014.3 | |
Earnings before Income Taxes | | 259.1 | | 278.3 | |
Income Tax Expense | | 80.7 | | 101.9 | |
Net Earnings | | 178.4 | | 176.4 | |
Net Earnings attributable to noncontrolling interest | | (21.0 | ) | (7.1 | ) |
Net Earnings attributable to Fluor Corporation | | $ | 157.4 | | $ | 169.3 | |
Basic Earnings per Share | | | | | |
Net Earnings | | $ | 0.88 | | $ | 0.94 | |
Weighted Average Shares | | 178.2 | | 179.1 | |
Diluted Earnings per Share | | | | | |
Net Earnings | | $ | 0.87 | | $ | 0.93 | |
Weighted Average Shares | | 180.7 | | 181.2 | |
New Awards | | $ | 9,345.4 | | $ | 6,770.7 | |
Backlog | | $ | 30,159.4 | | $ | 30,892.1 | |
Work Performed | | $ | 5,045.2 | | $ | 5,132.1 | |
SIX MONTHS ENDED JUNE 30 | | 2010 | | 2009 | |
Revenue | | $ | 10,071.0 | | $ | 11,090.4 | |
Cost and Expenses: | | | | | |
Cost of Revenue | | 9,526.7 | | 10,424.3 | |
Corporate G&A | | 58.7 | | 67.4 | |
Interest Income, net | | (6.6 | ) | (8.0 | ) |
Total Cost and Expenses | | 9,578.8 | | 10,483.7 | |
Earnings before Income Taxes | | 492.2 | | 606.7 | |
Income Tax Expense | | 160.1 | | 209.1 | |
Net Earnings | | 332.1 | | 397.6 | |
Net Earnings attributable to noncontrolling interest | | (38.1 | ) | (23.6 | ) |
Net Earnings attributable to Fluor Corporation | | $ | 294.0 | | $ | 374.0 | |
Basic Earnings per Share | | | | | |
Net Earnings | | $ | 1.65 | | $ | 2.06 | |
Weighted Average Shares | | 178.2 | | 179.7 | |
Diluted Earnings per Share | | | | | |
Net Earnings | | $ | 1.63 | | $ | 2.05 | |
Weighted Average Shares | | 180.7 | | 181.2 | |
New Awards | | $ | 12,704.5 | | $ | 12,264.2 | |
Backlog | | $ | 30,159.4 | | $ | 30,892.1 | |
Work Performed | | $ | 9,841.0 | | $ | 10,783.0 | |
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FLUOR CORPORATION
Unaudited
BUSINESS SEGMENT FINANCIAL REVIEW
($ in millions)
THREE MONTHS ENDED JUNE 30 | | 2010 | | | | 2009 (1) | | | |
Revenue | | | | | | | | | |
Oil & Gas | | $ | 1,760.6 | | | | $ | 3,028.3 | | | |
Industrial & Infrastructure | | 1,819.4 | | | | 998.2 | | | |
Government | | 776.7 | | | | 478.9 | | | |
Global Services | | 326.8 | | | | 340.6 | | | |
Power | | 468.6 | | | | 446.6 | | | |
Total Revenue | | $ | 5,152.1 | | | | $ | 5,292.6 | | | |
| | | | | | | | | |
Segment Profit $ and Margin % | | | | | | | | | |
Oil & Gas | | $ | 97.7 | | 5.5 | % | $ | 180.8 | | 6.0 | % |
Industrial & Infrastructure | | 48.3 | | 2.7 | % | 34.1 | | 3.4 | % |
Government | | 35.1 | | 4.5 | % | 33.5 | | 7.0 | % |
Global Services | | 31.7 | | 9.7 | % | 25.6 | | 7.5 | % |
Power | | 49.6 | | 10.6 | % | 35.3 | | 7.9 | % |
Total Segment Profit $ and Margin % | | $ | 262.4 | | 5.1 | % | $ | 309.3 | | 5.8 | % |
| | | | | | | | | |
Corporate general and administrative expense | | (27.8 | ) | | | (42.0 | ) | | |
Interest income, net | | 3.2 | | | | 3.4 | | | |
Earnings attributable to noncontrolling interests | | 21.3 | | | | 7.6 | | | |
Earnings before Taxes | | $ | 259.1 | | | | $ | 278.3 | | | |
SIX MONTHS ENDED JUNE 30 | | 2010 | | | | 2009 (1) | | | |
Revenue | | | | | | | | | |
Oil & Gas | | $ | 3,900.0 | | | | $ | 6,397.8 | | | |
Industrial & Infrastructure | | 3,062.8 | | | | 2,174.7 | | | |
Government | | 1,439.5 | | | | 849.7 | | | |
Global Services | | 665.9 | | | | 762.3 | | | |
Power | | 1,002.8 | | | | 905.9 | | | |
Total Revenue | | $ | 10,071.0 | | | | $ | 11,090.4 | | | |
| | | | | | | | | |
Segment Profit Margin $ and % | | | | | | | | | |
Oil & Gas | | $ | 190.0 | | 4.9 | % | $ | 381.6 | | 6.0 | % |
Industrial & Infrastructure | | 80.0 | | 2.6 | % | 62.2 | | 2.9 | % |
Government | | 70.4 | | 4.9 | % | 61.2 | | 7.2 | % |
Global Services | | 59.1 | | 8.9 | % | 73.0 | | 9.6 | % |
Power | | 106.1 | | 10.6 | % | 63.6 | | 7.0 | % |
Total Segment Profit Margin $ and % | | $ | 505.6 | | 5.0 | % | $ | 641.6 | | 5.8 | % |
| | | | | | | | | |
Corporate general and administrative expense | | (58.7 | ) | | | (67.4 | ) | | |
Interest income, net | | 6.6 | | | | 8.0 | | | |
Earnings attributable to noncontrolling interests | | 38.7 | | | | 24.6 | | | |
Earnings before Taxes | | $ | 492.2 | | | | $ | 606.8 | | | |
(1) | Effective January 1, 2010, the Company moved the power services business to the Power segment from the Global Services segment. Revenue, Segment Profit and Margin for 2009 have been recast to reflect this change. |
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FLUOR CORPORATION
Unaudited
SELECTED BALANCE SHEET ITEMS
($ in millions, except per share amounts)
| | JUNE 30, | | DECEMBER 31, | |
| | 2010 | | 2009 | |
Cash and Marketable Securities, including noncurrent | | $ | 2,084.8 | | $ | 2,625.8 | |
Total Current Assets | | 5,201.4 | | 5,122.1 | |
Total Assets | | 7,267.9 | | 7,178.5 | |
Total Short-Term Debt | | 99.6 | | 109.8 | |
Total Current Liabilities | | 3,182.1 | | 3,301.4 | |
Long-term Debt | | 17.7 | | 17.7 | |
Shareholders’ Equity | | 3,528.7 | | 3,305.5 | |
| | | | | |
Total Debt to Capitalization % (based on Shareholders’ Equity) | | 3.2 | % | 3.7 | % |
Shareholders’ Equity Per Share | | $ | 19.74 | | $ | 18.48 | |
SELECTED CASH FLOW ITEMS
($ in millions)
SIX MONTHS ENDED JUNE 30 | | 2010 | | 2009 | |
| | | | | |
Cash Provided (Utilized) by Operating Activities | | $ | (227.4 | ) | $ | 384.8 | |
| | | | | |
Investing Activities | | | | | |
Net (purchases) sales and maturities of Marketable Securities | | 267.1 | | (834.5 | ) |
Capital Expenditures | | (123.4 | ) | (120.6 | ) |
Other Items | | 8.1 | | 18.2 | |
Cash Provided (Utilized) by Investing Activities | | 151.8 | | (936.9 | ) |
| | | | | |
Financing Activities | | | | | |
Repurchase of common stock | | (17.1 | ) | (61.3 | ) |
Dividends paid | | (45.1 | ) | (45.6 | ) |
Repayment of Convertible Debt | | (10.1 | ) | (11.9 | ) |
Distributions paid to noncontrolling interests, net of contributions | | (32.3 | ) | (14.1 | ) |
Repayment of corporate-owned life insurance loans | | (32.2 | ) | — | |
Other Items | | (8.7 | ) | (6.2 | ) |
Cash Utilized by financing Activities | | (145.5 | ) | (139.1 | ) |
| | | | | |
Effect of Exchange Rate Changes on Cash | | (28.8 | ) | 38.8 | |
| | | | | |
Decrease in Cash and Cash Equivalents | | $ | (249.9 | ) | $ | (652.4 | ) |
| | | | | |
Depreciation | | $ | 91.5 | | $ | 88.6 | |
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FLUOR CORPORATION
Supplemental Fact Sheet
Unaudited
NEW AWARDS
($ in millions)
THREE MONTHS ENDED JUNE 30 | | 2010 | | 2009 (1) | | % Chg | |
| | | | | | | | | | | |
Oil & Gas | | $ | 1,033 | | 11 | % | $ | 2,937 | | 43 | % | (65 | )% |
Industrial & Infrastructure | | 7,233 | | 77 | % | 2,243 | | 33 | % | 222 | % |
Government | | 638 | | 7 | % | 866 | | 13 | % | (26 | )% |
Global Services | | 359 | | 4 | % | 371 | | 6 | % | (3 | )% |
Power | | 82 | | 1 | % | 354 | | 5 | % | (77 | )% |
| | | | | | | | | | | |
TOTAL NEW AWARDS | | $ | 9,345 | | 100 | % | $ | 6,771 | | 100 | % | 38 | % |
SIX MONTHS ENDED JUNE 30 | | 2010 | | 2009 (1) | | % Chg | |
| | | | | | | | | | | |
Oil & Gas | | $ | 2,435 | | 19 | % | $ | 4,961 | | 40 | % | (51 | )% |
Industrial & Infrastructure | | 8,220 | | 65 | % | 4,770 | | 39 | % | 72 | % |
Government | | 1,066 | | 8 | % | 1,109 | | 9 | % | (4 | )% |
Global Services | | 744 | | 6 | % | 476 | | 4 | % | 56 | % |
Power | | 239 | | 2 | % | 948 | | 8 | % | (75 | )% |
| | | | | | | | | | | |
TOTAL NEW AWARDS | | $ | 12,704 | | 100 | % | $ | 12,264 | | 100 | % | 4 | % |
BACKLOG TRENDS
($ in millions)
AS OF JUNE 30 | | 2010 | | 2009 (1) | | % Chg | |
| | | | | | | | | | | |
Oil & Gas | | $ | 10,209 | | 34 | % | $ | 15,770 | | 51 | % | (35 | )% |
Industrial & Infrastructure | | 16,145 | | 53 | % | 9,778 | | 32 | % | 65 | % |
Government | | 635 | | 2 | % | 974 | | 3 | % | (35 | )% |
Global Services | | 2,096 | | 7 | % | 1,811 | | 6 | % | 16 | % |
Power | | 1,074 | | 4 | % | 2,559 | | 8 | % | (58 | )% |
| | | | | | | | | | | |
TOTAL BACKLOG | | $ | 30,159 | | 100 | % | $ | 30,892 | | 100 | % | (2 | )% |
| | | | | | | | | | | |
United States | | $ | 8,302 | | 28 | % | $ | 12,590 | | 41 | % | (34 | )% |
The Americas | | 7,971 | | 26 | % | 5,457 | | 17 | % | 46 | % |
Europe, Africa and the Middle East | | 9,635 | | 32 | % | 9,236 | | 30 | % | 4 | % |
Asia Pacific | | 4,251 | | 14 | % | 3,609 | | 12 | % | 18 | % |
| | | | | | | | | | | |
TOTAL BACKLOG | | $ | 30,159 | | 100 | % | $ | 30,892 | | 100 | % | (2 | )% |
(1) | Effective January 1, 2010, the Company moved the power services business to the Power segment from the Global Services segment. New Awards and Backlog for 2009 have been recast to reflect this change. |
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