Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 27, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | FLUOR CORP | |
Entity Central Index Key | 1,124,198 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 140,618,971 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS | ||||
TOTAL REVENUE | $ 4,883,796 | $ 4,716,092 | $ 9,707,566 | $ 9,551,997 |
TOTAL COST OF REVENUE | 4,673,644 | 4,684,116 | 9,439,619 | 9,370,020 |
OTHER (INCOME) AND EXPENSES | ||||
Corporate general and administrative expense | 17,776 | 47,315 | 75,047 | 92,363 |
Interest expense | 16,784 | 16,473 | 33,896 | 34,036 |
Interest income | (8,043) | (7,863) | (15,576) | (13,898) |
Total cost and expenses | 4,700,161 | 4,740,041 | 9,532,986 | 9,482,521 |
EARNINGS (LOSS) BEFORE TAXES | 183,635 | (23,949) | 174,580 | 69,476 |
INCOME TAX EXPENSE (BENEFIT) | 52,471 | (17,317) | 55,477 | (1,246) |
NET EARNINGS (LOSS) | 131,164 | (6,632) | 119,103 | 70,722 |
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 16,332 | 17,393 | 21,861 | 34,136 |
NET EARNINGS (LOSS) ATTRIBUTABLE TO FLUOR CORPORATION | $ 114,832 | $ (24,025) | $ 97,242 | $ 36,586 |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 0.82 | $ (0.17) | $ 0.69 | $ 0.26 |
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 0.81 | $ (0.17) | $ 0.69 | $ 0.26 |
SHARES USED TO CALCULATE EARNINGS (LOSS) PER SHARE | ||||
BASIC (in shares) | 140,654 | 139,818 | 140,377 | 139,631 |
DILUTED (in shares) | 141,306 | 139,818 | 141,274 | 140,856 |
DIVIDENDS DECLARED PER SHARE | $ 0.21 | $ 0.21 | $ 0.42 | $ 0.42 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
NET EARNINGS (LOSS) | $ 131,164 | $ (6,632) | $ 119,103 | $ 70,722 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||
Foreign currency translation adjustment | (58,981) | 7,397 | (32,623) | 37,887 |
Ownership share of equity method investees' other comprehensive income (loss) | 7,569 | (6,509) | 12,550 | 1,924 |
Defined benefit pension and postretirement plan adjustments | 2,694 | 1,517 | 3,870 | 1,910 |
Unrealized gain (loss) on derivative contracts | (2,140) | (1,798) | (5,742) | 3,550 |
Unrealized gain (loss) on available-for-sale securities | (94) | 709 | (11) | |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (50,858) | 513 | (21,236) | 45,260 |
COMPREHENSIVE INCOME (LOSS) | 80,306 | (6,119) | 97,867 | 115,982 |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 15,109 | 16,987 | 20,978 | 33,988 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO FLUOR CORPORATION | $ 65,197 | $ (23,106) | $ 76,889 | $ 81,994 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents ($729,073 and $516,046 related to variable interest entities ("VIEs")) | $ 1,681,960 | $ 1,804,075 |
Marketable securities, current ($85,066 and $91,295 related to VIEs) | 101,124 | 161,134 |
Accounts and notes receivable, net ($204,035 and $327,652 related to VIEs) | 1,556,503 | 1,602,751 |
Contract assets ($200,702 and $132,500 related to VIEs) | 1,586,653 | 1,458,533 |
Other current assets ($29,942 and $9,229 related to VIEs) | 529,596 | 574,764 |
Total current assets | 5,455,836 | 5,601,257 |
Marketable securities, noncurrent | 113,622 | |
Property, plant and equipment ("PP&E") ((net of accumulated depreciation of $1,191,960 and $1,201,929) (net PP&E of $40,501 and $44,004 related to VIEs)) | 1,053,866 | 1,093,681 |
Goodwill | 558,308 | 564,683 |
Investments | 905,050 | 878,863 |
Deferred taxes | 426,671 | 316,472 |
Deferred compensation trusts | 349,651 | 381,826 |
Other assets ($26,451 and $27,631 related to VIEs) | 369,835 | 377,288 |
TOTAL ASSETS | 9,119,217 | 9,327,692 |
CURRENT LIABILITIES | ||
Trade accounts payable ($368,205 and $258,592 related to VIEs) | 1,692,897 | 1,512,740 |
Short-term borrowings | 80,561 | 27,361 |
Contracts Liabilities ($468,152 and $361,701 related to VIEs) | 943,920 | 874,036 |
Accrued salaries, wages and benefits ($27,527 and $32,678 related to VIEs) | 621,509 | 706,520 |
Other accrued liabilities ($43,867 and $44,211 related to VIEs) | 412,760 | 453,513 |
Total current liabilities | 3,751,647 | 3,574,170 |
LONG-TERM DEBT DUE AFTER ONE YEAR | 1,575,370 | 1,591,598 |
NONCURRENT LIABILITIES | 607,360 | 669,525 |
CONTINGENCIES AND COMMITMENTS | ||
Capital stock | ||
Preferred - authorized 20,000,000 shares ($0.01 par value); none issued | ||
Common - authorized 375,000,000 shares ($0.01 par value); issued and outstanding - 140,699,850 and 139,918,324 shares in 2018 and 2017, respectively | 1,406 | 1,399 |
Additional paid-in capital | 111,368 | 88,222 |
Accumulated other comprehensive loss | (422,595) | (402,242) |
Retained earnings | 3,353,176 | 3,654,931 |
Total shareholders' equity | 3,043,355 | 3,342,310 |
Noncontrolling interests | 141,485 | 150,089 |
Total equity | 3,184,840 | 3,492,399 |
TOTAL LIABILITIES AND EQUITY | $ 9,119,217 | $ 9,327,692 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, plant and equipment, accumulated depreciation | $ 1,191,960 | $ 1,201,929 |
Shareholders' equity | ||
Preferred stock, authorized shares (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued shares (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 375,000,000 | 375,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued shares (in shares) | 140,699,850 | 139,918,324 |
Common stock, outstanding shares (in shares) | 140,699,850 | 139,918,324 |
CURRENT ASSETS, VIEs | ||
Cash and cash equivalents | $ 1,681,960 | $ 1,804,075 |
Marketable securities, current | 101,124 | 161,134 |
Accounts and notes receivable, net | 1,556,503 | 1,602,751 |
Contract assets | 1,586,653 | 1,458,533 |
Other current assets | 529,596 | 574,764 |
Property, plant, and equipment | 1,053,866 | 1,093,681 |
Other noncurrent assets | 369,835 | 377,288 |
CURRENT LIABILITIES, VIEs | ||
Trade accounts payable | 1,692,897 | 1,512,740 |
Contract Liabilities | 943,920 | 874,036 |
Accrued salaries, wages and benefits | 621,509 | 706,520 |
Other accrued liabilities | 412,760 | 453,513 |
Consolidated variable interest entities | ||
CURRENT ASSETS, VIEs | ||
Cash and cash equivalents | 729,073 | 516,046 |
Marketable securities, current | 85,066 | 91,295 |
Accounts and notes receivable, net | 204,035 | 327,652 |
Contract assets | 200,702 | 132,500 |
Other current assets | 29,942 | 9,229 |
Property, plant, and equipment | 40,501 | 44,004 |
Other noncurrent assets | 26,451 | 27,631 |
CURRENT LIABILITIES, VIEs | ||
Trade accounts payable | 368,205 | 258,592 |
Contract Liabilities | 468,152 | 361,701 |
Accrued salaries, wages and benefits | 27,527 | 32,678 |
Other accrued liabilities | $ 43,867 | $ 44,211 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net earnings | $ 119,103 | $ 70,722 |
Adjustments to reconcile net earnings to cash provided (utilized) by operating activities: | ||
Depreciation of fixed assets | 102,503 | 101,921 |
Amortization of intangibles | 9,403 | 9,520 |
(Earnings) loss from equity method investments, net of distributions | 1,919 | 1,996 |
Gain on sale of property, plant and equipment | (7,347) | (6,985) |
Amortization of stock-based awards | 23,990 | 22,230 |
Deferred compensation trust | (2,826) | (24,390) |
Deferred compensation obligation | 3,145 | 19,127 |
Deferred taxes | 15,619 | 76,866 |
Net retirement plan accrual (contributions) | (3,056) | (7,008) |
Changes in operating assets and liabilities | (394,362) | 166,628 |
Other items | (691) | (2,701) |
Cash provided (utilized) by operating activities | (132,600) | 427,926 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of marketable securities | (163,788) | (171,441) |
Proceeds from the sales and maturities of marketable securities | 335,215 | 101,026 |
Capital expenditures | (110,451) | (141,553) |
Proceeds from disposal of property, plant and equipment | 40,085 | 27,908 |
Investments in partnerships and joint ventures | (16,690) | (191,124) |
Other items | (383) | 2,552 |
Cash provided (utilized) by investing activities | 83,988 | (372,632) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends paid | (59,641) | (59,281) |
Net proceeds from issuance of commercial paper | 49,645 | |
Repayment of borrowings under revolving lines of credit | (53,455) | |
Distributions paid to noncontrolling interests | (32,252) | (21,176) |
Capital contributions by noncontrolling interests | 3,760 | 4,150 |
Taxes paid on vested restricted stock | (5,490) | (6,186) |
Stock options exercised | 5,383 | 8,296 |
Other items | (1,853) | 4,501 |
Cash utilized by financing activities | (40,448) | (123,151) |
Effect of exchange rate changes on cash | (33,055) | 37,220 |
Decrease in cash and cash equivalents | (122,115) | (30,637) |
Cash and cash equivalents at beginning of period | 1,804,075 | 1,850,436 |
Cash and cash equivalents at end of period | $ 1,681,960 | $ 1,819,799 |
Principles of Consolidation
Principles of Consolidation | 6 Months Ended |
Jun. 30, 2018 | |
Principles of Consolidation | |
Principles of Consolidation | (1) Principles of Consolidation The Condensed Consolidated Financial Statements do not include footnotes and certain financial information normally presented annually under accounting principles generally accepted in the United States and, therefore, should be read in conjunction with the company’s December 31, 2017 Annual Report on Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three and six months ended June 30, 2018 may not necessarily be indicative of results that can be expected for the full year. The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly its consolidated financial position as of June 30, 2018 and December 31, 2017 and its consolidated results of operations and cash flows for the interim periods presented. All significant intercompany transactions of consolidated subsidiaries are eliminated. During the first half of 2018, the operations of the company’s mining and metals business, previously included in the Energy & Chemicals segment, have been included in the Mining, Industrial, Infrastructure & Power segment. Therefore, certain amounts disclosed in 2017 have been reclassified to conform to the 2018 presentation. Management has evaluated all material events occurring subsequent to the date of the financial statements up to the filing date of this Form 10-Q. In the first quarter of 2018, the company adopted Accounting Standards Update (“ASU”) 2014-09 (ASC Topic 606), “Revenue from Contracts with Customers” using the modified retrospective method in which the new guidance was applied retrospectively to contracts that were not completed as of January 1, 2018. Results for the reporting period beginning after January 1, 2018 have been presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with previous guidance. See Note 3 for a further discussion of the adoption and the impact on the company’s financial statements. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (2) Recent Accounting Pronouncements New accounting pronouncements implemented by the company during the first half of 2018 are discussed below or in the related notes, where appropriate. In the first quarter of 2018, the company adopted ASU 2014-09 (ASC Topic 606), “Revenue from Contracts with Customers” and related ASUs. See Note 3 for a further discussion of the adoption and the impact on the company’s financial statements. In the first quarter of 2018, the company adopted ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” This ASU amends the Financial Accounting Standards Board’s (“FASB”) hedge accounting model to enable entities to better portray their risk management activities in the financial statements. ASU 2017-12 expands an entity’s ability to hedge nonfinancial and financial risk components and eliminates the requirement to separately measure and report hedge ineffectiveness. The adoption of ASU 2017-12 did not have a material impact on the company’s financial position, results of operations or cash flows. In the first quarter of 2018, the company adopted ASU 2017-09, “Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting,” which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Entities should apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. The adoption of ASU 2017-09 did not have any impact on the company’s financial position, results of operations or cash flows. In the first quarter of 2018, the company adopted ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” ASU 2017-07 requires employers to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs arising from services rendered during the period. The other components of net periodic benefit cost are required to be presented separately from the service cost component. As a result of the adoption of ASU 2017-07, the service cost component of net periodic pension expense has been presented in “Total cost of revenue” and the other components of net periodic pension expense have been presented in “Corporate general and administrative expense” on the Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2018. Amounts in the 2017 period have not been reclassified to conform to the new presentation as the impact to the results of operations was not material. The adoption of ASU 2017-07 did not have any impact on the company’s financial position or cash flows. In the first quarter of 2018, the company adopted ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The adoption of ASU 2017-01 did not have any impact on the company’s financial position, results of operations or cash flows. In the first quarter of 2018, the company adopted ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” ASU 2016-18 requires an entity to include in its cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The adoption of ASU 2016-18 did not have any impact on the company’s cash flows. In the first quarter of 2018, the company adopted ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 amends the guidance in Accounting Standards Codification (“ASC”) 230, which often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities, and has resulted in diversity in practice in how certain cash receipts and cash payments are classified. The adoption of ASU 2016-15 did not have any impact on the company’s cash flows. In the first quarter of 2018, the company adopted ASU 2016-01, “Financial Instruments — Overall — Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and to recognize any changes in fair value in net income unless the investments qualify for a practicability exception. The adoption of ASU 2016-01 did not have any impact on the company’s financial position, results of operations or cash flows. New accounting pronouncements requiring implementation in future periods are discussed below. In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which gives entities the option to reclassify the tax effects stranded in accumulated other comprehensive income as a result of the enactment of comprehensive tax legislation, commonly referred to as the Tax Cuts and Jobs Act, to retained earnings. ASU 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. Management is currently evaluating the impact that the adoption of ASU 2018-02 will have on the company’s financial position, results of operations and cash flows. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU replace the incurred loss impairment methodology in current practice with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Management does not expect the adoption of ASU 2016-13 to have a material impact on the company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases: Amendments to the FASB Accounting Standards Codification,” and issued subsequent amendments to the initial guidance in September 2017 within ASU 2017-13 which continues to amend the existing guidance on accounting for leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. ASU 2016-02 also requires the recognition of lease assets and lease liabilities on the balance sheet, and the disclosure of key information about leasing arrangements. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. The new guidance will be applied to leases that exist or are entered into on or after January 1, 2019 without adjusting comparative periods in the financial statements. Management is currently evaluating the impact of adopting ASU 2016-02 on the company’s financial position, results of operations and cash flows. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition | |
Revenue Recognition | (3) Revenue Recognition On January 1, 2018, the company adopted ASC Topic 606, “Revenue from Contracts with Customers,” including the following ASUs: ASU 2014-09, “Revenue from Contracts with Customers” outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 outlines a five-step process for revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards, and also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Major provisions include determining which goods and services are distinct and represent separate performance obligations, how variable consideration (which may include change orders and claims) is recognized, whether revenue should be recognized at a point in time or over time and ensuring the time value of money is considered in the transaction price. ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifies the principal versus agent guidance in ASU 2014-09. ASU 2016-08 clarifies how an entity determines whether to report revenue gross or net based on whether it controls a specific good or service before it is transferred to a customer. ASU 2016-08 also reframes the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. ASU 2016-10, “Identifying Performance Obligations and Licensing” amends certain aspects of ASU 2014-09. ASU 2016-10 amends how an entity should identify performance obligations for immaterial promised goods or services, shipping and handling activities and promises that may represent performance obligations. ASU 2016-10 also provides implementation guidance for determining the nature of licensing and royalties arrangements. ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” also clarifies certain aspects of ASU 2014-09 including the assessment of collectability, presentation of sales taxes, treatment of noncash consideration, and accounting for completed contracts and contract modifications at transition. ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” allows an entity to determine the provision for loss contracts at either the contract level or the performance obligation level as an accounting policy election. The company determines its provision for loss contracts at the contract level. ASU 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” clarifies that the scope and application of ASC 610-20 on accounting for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales, applies only when the asset (or asset group) does not meet the definition of a business. ASU 2017-13, “Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments” provides guidance related to the effective dates of the ASUs noted above. The company adopted ASC Topic 606 using the modified retrospective method, and accordingly the new guidance was applied retrospectively to contracts that were not completed as of January 1, 2018 (the date of initial application). As a result, the company has recorded a cumulative effect adjustment to decrease retained earnings by $339 million as of January 1, 2018 as well as the following cumulative effect adjustments: · A decrease to accounts receivable of $50 million; · A decrease to contract assets of $19 million; · A decrease to investments of $4 million; · A decrease to other assets of $14 million; · An increase to contract liabilities of $357 million; · A decrease to other accrued liabilities of $14 million; · A decrease to noncurrent liabilities of $1 million; · An increase to deferred tax assets of $89 million; and · A decrease to noncontrolling interests of $1 million. The decrease in retained earnings primarily resulted from a change in the manner in which the company determines the unit of account for its projects (i.e., performance obligations). Under the previous guidance, the company typically segmented revenue and margin recognition between the engineering and construction phases of its contracts. Upon adoption of ASC Topic 606, engineering and construction contracts are generally accounted for as a single unit of account (a single performance obligation), resulting in a more constant recognition of revenue and margin over the term of the contract. In accordance with ASU 2017-13, certain of the company’s unconsolidated partnerships and joint ventures will not adopt ASC Topic 606 until January 1, 2019, at which time the company will record a cumulative effect adjustment which is not expected to be significant. The following tables present how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Statement of Earnings: Three Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition Total revenue $ $ $ Total cost of revenue Corporate general and administrative expense Interest expense — Interest income ) — ) Earnings before taxes Income tax expense Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Fluor Corporation Six Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition Total revenue $ $ $ Total cost of revenue Corporate general and administrative expense Interest expense — Interest income ) — ) Earnings before taxes Income tax expense Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Fluor Corporation The following table presents how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Balance Sheet: As of June 30, 2018 (in thousands) Recognition Impact of the Recognition Accounts and notes receivable, net $ $ ) $ Contract assets (previously presented as contract work in progress) ) Investments ) Deferred tax assets Other assets ) Contract liabilities (previously presented as advance billings on contracts) Other accrued liabilities ) Noncurrent liabilities ) Accumulated other comprehensive loss ) ) Retained earnings ) Noncontrolling interests The following table presents how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Statement of Cash Flows: Six Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ $ $ (Earnings) loss from equity method investments, net of distributions Deferred taxes Changes in operating assets and liabilities ) ) ) Cash utilized by operating activities ) — ) Update to Major Accounting Policies Upon adoption of ASC Topic 606, the company revised its accounting policy on revenue recognition from the policy provided in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2017. The revised accounting policy on revenue recognition is provided below. Engineering & Construction Contracts and Service Contracts The company recognizes engineering and construction contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. Engineering and construction contracts are generally accounted for as a single unit of account (a single performance obligation) and are not segmented between types of services. The company recognizes revenue using the percentage-of-completion method, based primarily on contract cost incurred to date compared to total estimated contract cost. The percentage-of-completion method (an input method) is the most faithful depiction of the company’s performance because it directly measures the value of the services transferred to the customer. Cost of revenue includes an allocation of depreciation and amortization. Customer-furnished materials, labor and equipment and, in certain cases, subcontractor materials, labor and equipment, are included in revenue and cost of revenue when management believes that the company is acting as a principal rather than as an agent (i.e., the company integrates the materials, labor and equipment into the deliverables promised to the customer). Customer-furnished materials are only included in revenue and cost when the contract includes construction activity and the company has visibility into the amount the customer is paying for the materials or there is a reasonable basis for estimating the amount. The company recognizes revenue, but not profit, on certain uninstalled materials that are not specifically produced, fabricated, or constructed for a project. Revenue on these uninstalled materials is recognized when the cost is incurred (when control is transferred). Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred when they are an integrated part of the performance obligation being transferred to the client. Customer payments on engineering and construction contracts are typically due within 30 to 45 days of billing, depending on the contract. For service contracts (including maintenance contracts) in which the company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the company’s performance completed to date, revenue is recognized when services are performed and contractually billable. For all other service contracts, the company recognizes revenue over time using the cost-to-cost percentage-of-completion method. Service contracts that include multiple performance obligations are segmented between types of services. For contracts with multiple performance obligations, the company allocates the transaction price to each performance obligation using an estimate of the stand-alone selling price of each distinct service in the contract. Revenue recognized on service contracts that have not been billed to clients is classified as a current asset under contract assets on the Condensed Consolidated Balance Sheet. Amounts billed to clients in excess of revenue recognized on service contracts to date are classified as a current liability under contract liabilities. Customer payments on service contracts are typically due within 30 to 90 days of billing, depending on the contract. Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables (typically for cost reimbursable contracts) of $1.3 billion and contract work in progress (typically for fixed-price contracts) of $273 million as of June 30, 2018. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract. Advances that are payments on account of contract assets of $650 million and $337 million as of June 30, 2018 and December 31, 2017, respectively, have been deducted from contract assets. Contract liabilities represent amounts billed to clients in excess of revenue recognized to date. The company recognized revenue of $639 million during the six months ended June 30, 2018 that was included in contract liabilities as of January 1, 2018. The company anticipates that substantially all incurred cost associated with contract assets as of June 30, 2018 will be billed and collected within one year. Variable Consideration The nature of the company’s contracts gives rise to several types of variable consideration, including claims and unpriced change orders; awards and incentive fees; and liquidated damages and penalties. The company recognizes revenue for variable consideration when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regard to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. If the requirements for recognizing revenue for claims or unapproved change orders are met, revenue is recorded only when the costs associated with the claims or unapproved change orders have been incurred. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for claims accounting have been satisfied. The company generally provides limited warranties for work performed under its engineering and construction contracts. The warranty periods typically extend for a limited duration following substantial completion of the company’s work on a project. Historically, warranty claims have not resulted in material costs incurred. Practical Expedients If the company has a right to consideration from a customer in an amount that corresponds directly with the value of the company’s performance completed to date (a service contract in which the company bills a fixed amount for each hour of service provided), the company recognizes revenue in the amount to which it has a right to invoice for services performed. The company does not adjust the contract price for the effects of a significant financing component if the company expects, at contract inception, that the period between when the company transfers a service to a customer and when the customer pays for that service will be one year or less. The company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are collected by the company from its customers (use taxes, value added taxes, some excise taxes). Remaining Unsatisfied Performance Obligations The company’s remaining unsatisfied performance obligations (“RUPO”) as of June 30, 2018 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. The company had $26.9 billion in RUPO as of June 30, 2018. The company expects to satisfy its RUPO as of June 30, 2018 over the following periods (in millions): Within 1 year $ 1 to 2 years Thereafter Total remaining unsatisfied performance obligations $ Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Disaggregation of Revenue Revenue disaggregated by reportable segment for the three and six months ended June 30, 2018 and 2017 is presented in Note 17. The following table presents revenue disaggregated by the geographic area where the work was performed for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, Revenue by Geographic Area (in millions) 2018 2017 (1) 2018 2017 (1) United States $ $ $ $ Canada Asia Pacific (includes Australia) Europe Central and South America Middle East and Africa Total revenue by geographic area $ $ $ $ (1) Prior periods amounts have not been adjusted for the adoption of ASC Topic 606 under the modified retrospective method. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss) | |
Other Comprehensive Income (Loss) | (4) Other Comprehensive Income (Loss) The tax effects of the components of other comprehensive income (loss) (“OCI”) for the three months ended June 30, 2018 and 2017 are as follows: Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Tax Tax Before-Tax Benefit Net-of-Tax Before-Tax Benefit Net-of-Tax (in thousands) Amount (Expense) Amount Amount (Expense) Amount Other comprehensive income (loss): Foreign currency translation adjustment $ ) $ $ ) $ $ ) $ Ownership share of equity method investees’ other comprehensive income (loss) ) ) ) Defined benefit pension and postretirement plan adjustments ) ) Unrealized loss on derivative contracts ) ) ) ) Unrealized loss on available-for-sale securities — — — ) ) Total other comprehensive income (loss) ) ) ) Less: Other comprehensive loss attributable to noncontrolling interests ) — ) ) — ) Other comprehensive income (loss) attributable to Fluor Corporation $ ) $ $ ) $ $ ) $ The tax effects of the components of OCI for the six months ended June 30, 2018 and 2017 are as follows: Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 Tax Tax Before-Tax Benefit Net-of-Tax Before-Tax Benefit Net-of-Tax (in thousands) Amount (Expense) Amount Amount (Expense) Amount Other comprehensive income (loss): Foreign currency translation adjustment $ ) $ $ ) $ $ ) $ Ownership share of equity method investees’ other comprehensive income: ) ) Defined benefit pension and postretirement plan adjustments ) ) Unrealized gain (loss) on derivative contracts ) ) ) Unrealized gain (loss) on available-for-sale securities ) ) ) Total other comprehensive income (loss) ) ) ) Less: Other comprehensive loss attributable to noncontrolling interests ) — ) ) — ) Other comprehensive income (loss) attributable to Fluor Corporation $ ) $ $ (20,353 ) $ $ ) $ The changes in accumulated other comprehensive income (“AOCI”) balances by component (after-tax) for the three months ended June 30, 2018 are as follows: (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of March 31, 2018 $ ) $ ) $ ) $ ) $ — $ ) Other comprehensive income (loss) before reclassifications ) — ) — ) Amounts reclassified from AOCI — — Net other comprehensive income (loss) ) ) — ) Balance as of June 30, 2018 $ ) $ ) $ ) $ ) $ — $ ) Attributable to Noncontrolling Interests: Balance as of March 31, 2018 $ ) $ — $ — $ — $ — $ ) Other comprehensive loss before reclassifications ) — — — — ) Amounts reclassified from AOCI — — — — — — Net other comprehensive loss ) — — — — ) Balance as of June 30, 2018 $ ) $ — $ — $ — $ — $ ) The changes in AOCI balances by component (after-tax) for the six months ended June 30, 2018 are as follows: (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of December 31, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) — ) — ) Amounts reclassified from AOCI — Net other comprehensive income (loss) ) ) ) Balance as of June 30, 2018 $ ) $ ) $ ) $ ) $ — $ ) Attributable to Noncontrolling Interests: Balance as of December 31, 2017 $ ) $ — $ — $ — $ — $ ) Other comprehensive loss before reclassifications ) — — — — ) Amounts reclassified from AOCI — — — — — — Net other comprehensive loss ) — — — — ) Balance as of June 30, 2018 $ ) $ — $ — $ — $ — $ ) The changes in AOCI balances by component (after-tax) for the three months ended June 30, 2017 are as follows: (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of March 31, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) — ) ) ) Amounts reclassified from AOCI — — ) ) Net other comprehensive income (loss) ) ) ) Balance as of June 30, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Attributable to Noncontrolling Interests: Balance as of March 31, 2017 $ ) $ — $ — $ ) $ — $ ) Other comprehensive loss before reclassifications ) — — ) — ) Amounts reclassified from AOCI — — — — Net other comprehensive income (loss) ) — — — ) Balance as of June 30, 2017 $ ) $ — $ — $ — $ — $ ) The changes in AOCI balances by component (after-tax) for the six months ended June 30, 2017 are as follows: (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of December 31, 2016 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications — ) Amounts reclassified from AOCI — — Net other comprehensive income (loss) ) Balance as of June 30, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Attributable to Noncontrolling Interests: Balance as of December 31, 2016 $ ) $ — $ — $ ) $ — $ ) Other comprehensive income (loss) before reclassifications ) — — — ) Amounts reclassified from AOCI — — — — Net other comprehensive income (loss) ) — — — ) Balance as of June 30, 2017 $ ) $ — $ — $ — $ — $ ) The significant items reclassified out of AOCI and the corresponding location and impact on the Condensed Consolidated Statement of Earnings are as follows: Location in Three Months Ended Six Months Ended Condensed Consolidated June 30, June 30, (in thousands) Statement of Earnings 2018 2017 2018 2017 Component of AOCI: Ownership share of equity method investees’ other comprehensive loss Total cost of revenue $ ) $ — $ ) $ — Income tax benefit Income tax expense — — Net of tax $ ) $ — $ ) $ — Defined benefit pension plan adjustments Various accounts (1) $ ) $ ) $ ) $ ) Income tax benefit Income tax expense Net of tax $ ) $ ) $ ) $ ) Unrealized gain (loss) on derivative contracts: Commodity and foreign currency contracts Total cost of revenue $ ) $ $ ) $ Interest rate contracts Interest expense ) ) ) ) Income tax benefit (expense) Income tax expense ) Net of tax ) ) ) Less: Noncontrolling interests Net earnings attributable to noncontrolling interests — ) — ) Net of tax and noncontrolling interests $ ) $ $ ) $ ) Unrealized gain (loss) on available-for-sale securities Corporate general and administrative expense $ — $ $ ) $ ) Income tax benefit (expense) Income tax expense — ) Net of tax $ — $ $ ) $ ) (1) Defined benefit pension plan adjustments were reclassified to “Corporate general and administrative expense” in 2018 and to “Total cost of revenue” and “Corporate general and administrative expense” in 2017. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes | |
Income Taxes | (5) Income Taxes The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. corporate federal income tax rate down to 21% from 35%, requires companies to pay a one-time transition tax on earnings from certain foreign subsidiaries and creates new taxes on certain foreign sourced earnings. The company applied the guidance in SAB 118 when accounting for the enactment date effects of the Tax Act, which allowed the company to make reasonable estimates at December 31, 2017. Given the complexity of the Tax Act, the company is still evaluating the tax impact and obtaining the information required to complete its accounting. Accordingly, all amounts recognized associated with the Tax Act during the first half of 2018 are provisional. Changes to the provisional estimates of the Tax Act will be recorded as a discrete item in the interim period the amounts are considered complete. The Tax Act subjects a U.S. shareholder to tax on Global Intangible Low Taxes Income (“GILTI”) earned by foreign subsidiaries. The company has not yet determined its accounting policy with respect to GILTI and has therefore included the estimate of current quarter GILTI entirely as a period cost. The effective tax rates for the three and six months ended June 30, 2018 were 28.6 percent and 31.8 percent, respectively, compared to 72.3 percent and (1.8) percent for the corresponding periods of 2017. The effective rates for the three and six months ended June 30, 2018, which reflected the lower U.S. corporate income tax rate enacted by the Tax Act, were unfavorably impacted by higher tax rates on foreign earnings and the inability to offset the losses recognized in certain jurisdictions against the income recognized in other jurisdictions. The effective rates for the three and six months ended June 30, 2017 benefitted from a worthless stock deduction on an insolvent foreign subsidiary. All periods benefitted from earnings attributable to noncontrolling interests for which income taxes are not typically the responsibility of the company. The company conducts business globally and, as a result, the company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, the Netherlands, South Africa, the United Kingdom and the United States. Although the company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. With a few exceptions, the company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2013. |
Cash Paid for Interest and Taxe
Cash Paid for Interest and Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Cash Paid for Interest and Taxes | |
Cash Paid for Interest and Taxes | (6) Cash Paid for Interest and Taxes Cash paid for interest was $36 million for both the six months ended June 30, 2018 and 2017, respectively. Income tax payments, net of refunds, were $42 million and $159 million during the six-month periods ended June 30, 2018 and 2017, respectively. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | (7) Earnings Per Share Diluted earnings per share (“EPS”) reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method. The calculations of the basic and diluted EPS for the three and six months ended June 30, 2018 and 2017 are presented below: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share amounts) 2018 2017 2018 2017 Net earnings (loss) attributable to Fluor Corporation $ $ ) $ $ Basic EPS attributable to Fluor Corporation: Weighted average common shares outstanding Basic earnings (loss) per share $ $ ) $ $ Diluted EPS attributable to Fluor Corporation: Weighted average common shares outstanding Diluted effect: Employee stock options, restricted stock units and shares and Value Driver Incentive units (1) — Weighted average diluted shares outstanding Diluted earnings (loss) per share $ $ ) $ $ Anti-dilutive securities not included above (1) Employee stock options, restricted stock units and shares, and Value Driver Incentive units of 936,000 were excluded from weighted average diluted shares outstanding for the three months ended June 30, 2017 as the shares would have an anti-dilutive effect on the net loss. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | (8) Fair Value Measurements The fair value hierarchy established by ASC 820, “Fair Value Measurement,” prioritizes the use of inputs used in valuation techniques into the following three levels: ● Level 1 — quoted prices in active markets for identical assets and liabilities ● Level 2 — inputs other than quoted prices in active markets for identical assets and liabilities that are observable, either directly or indirectly ● Level 3 — unobservable inputs The company measures and reports assets and liabilities at fair value utilizing pricing information received from third parties. The company performs procedures to verify the reasonableness of pricing information received for significant assets and liabilities classified as Level 2. The following table presents, for each of the fair value hierarchy levels required under ASC 820-10, the company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents (1) $ — $ — $ — $ — $ $ $ $ — Marketable securities, current (2) — — — — — — Deferred compensation trusts (3) — — — — Marketable securities, noncurrent (4) — — — — — — Derivative assets (5) Foreign currency contracts — — — — Liabilities: Derivative liabilities (5) Foreign currency contracts — — $ $ — $ $ — (1) Consists of registered money market funds and investment in U.S. agency securities with maturities of three months or less at the date of purchase. The fair value of the money market funds represents the net asset value of the shares of such funds as of the close of business at the end of the period. The fair value of the investments in U.S. agency securities is based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (2) Consists of investments in U.S. agency securities, U.S. Treasury securities, corporate debt securities and commercial paper with maturities of less than one year that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (3) Consists of registered money market funds and an equity index fund valued at fair value. These investments, which are trading securities, represent the net asset value of the shares of such funds as of the close of business at the end of the period based on the last trade or official close of an active market or exchange. (4) Consists of investments in U.S. agency securities, U.S. Treasury securities and corporate debt securities with maturities ranging from one year to three years that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (5) See Note 9 for the classification of foreign currency contracts on the Condensed Consolidated Balance Sheet. Foreign currency contracts are estimated using standard pricing models with market-based inputs, which take into account the present value of estimated future cash flows. The company’s financial instruments presented in the table above included available-for-sale securities as of December 31, 2017. The available-for-sale securities were made up of the following security types as of December 31, 2017: money market funds of $1 million, U.S. agency securities of $3 million, U.S. Treasury securities of $69 million, corporate debt securities of $97 million and commercial paper of $3 million. The amortized cost of these available-for-sale securities was not materially different from the fair value. The company determined that there was no other-than-temporary impairment of available-for-sale securities with unrealized losses as of December 31, 2017. During the six months ended June 30, 2018, proceeds from sales and maturities of available-for-sale securities were $175 million. There were no sales or maturities of available-for-sale securities during the three months ended June 30, 2018. Proceeds from sales and maturities of available-for-sale securities were $19 million and $44 million during the three and six months ended June 30, 2017, respectively. The carrying values and estimated fair values of the company’s financial instruments that are not required to be measured at fair value in the Condensed Consolidated Balance Sheet are as follows: June 30, 2018 December 31, 2017 Fair Value Carrying Fair Carrying Fair (in thousands) Hierarchy Value Value Value Value Assets: Cash (1) Level 1 $ $ $ $ Cash equivalents (2) Level 2 Marketable securities, current (3) Level 2 Notes receivable, including noncurrent portion (4) Level 3 Liabilities: 1.750% Senior Notes (5) Level 2 $ $ $ $ 3.375% Senior Notes (5) Level 2 3.5% Senior Notes (5) Level 2 Commercial paper (6) Level 2 — — Other borrowings, including noncurrent portion (7) Level 2 (1) Cash consists of bank deposits. Carrying amounts approximate fair value. (2) Cash equivalents consist of held-to-maturity time deposits with maturities of three months or less at the date of purchase. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. (3) Marketable securities, current consist of held-to-maturity time deposits with original maturities greater than three months that will mature within one year. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value. (4) Notes receivable are carried at net realizable value which approximates fair value. Factors considered by the company in determining the fair value include the credit worthiness of the borrower, current interest rates, the term of the note and any collateral pledged as security. Notes receivable are periodically assessed for impairment. (5) The fair value of the 1.750% Senior Notes, 3.375% Senior Notes and 3.5% Senior Notes is estimated based on quoted market prices for similar issues. (6) All of the company’s outstanding commercial paper matures within one month. The fair value of the commercial paper is based on quoted market prices in an active market. The carrying value of the outstanding commercial paper approximates fair value due to its short-term nature. (7) Other borrowings primarily represent bank loans and other financing arrangements resulting from the acquisition of Stork. The majority of these borrowings mature within one year. The carrying amount of borrowings under these arrangements approximates fair value because of the short-term maturity. |
Derivatives and Hedging
Derivatives and Hedging | 6 Months Ended |
Jun. 30, 2018 | |
Derivatives and Hedging | |
Derivatives and Hedging | (9) Derivatives and Hedging The company limits exposure to foreign currency fluctuations in most of its engineering and construction contracts through provisions that require client payments in currencies corresponding to the currencies in which cost is incurred. Certain financial exposure, which includes currency and commodity price risk associated with engineering and construction contracts, currency risk associated with monetary assets and liabilities denominated in nonfunctional currencies and risk associated with interest rate volatility, may subject the company to earnings volatility. In cases where financial exposure is identified, the company generally implements a hedging strategy utilizing derivative instruments or hedging instruments to mitigate the risk. The company’s hedging instruments are designated as either fair value or cash flow hedges in accordance with ASC 815, “Derivatives and Hedging.” The company formally documents its hedge relationships at inception, including identification of the hedging instruments and the hedged items, its risk management objectives and strategies for undertaking the hedge transaction, and the initial quantitative assessment of the hedging instrument’s effectiveness in offsetting changes in the fair value of the hedged items. The company subsequently assesses hedge effectiveness qualitatively, unless the facts and circumstances of the hedge relationship change to an extent that the company can no longer assert qualitatively that the hedge is highly effective. The fair values of all hedging instruments are recognized as assets or liabilities at the balance sheet date. For fair value hedges, the change in the fair value of the hedging instrument is offset against the change in the fair value of the underlying asset or liability through earnings. For cash flow hedges, the hedging instrument’s gain or loss due to changes in fair value is recorded as a component of AOCI and is reclassified into earnings when the hedged item settles. For derivatives that are not designated or do not qualify as hedging instruments, the change in the fair value of the derivative is offset against the change in the fair value of the underlying asset or liability through earnings. The company does not enter into derivative instruments for speculative purposes. Under ASC 815, in certain limited circumstances, foreign currency payment provisions could be deemed embedded derivatives. If an embedded foreign currency derivative is identified, the derivative is bifurcated from the host contract and the change in fair value is recognized through earnings. The company maintains master netting arrangements with certain counterparties to facilitate the settlement of derivative instruments; however, the company reports the fair value of derivative instruments on a gross basis. As of June 30, 2018, the company had total gross notional amounts of $593 million of foreign currency contracts outstanding (primarily related to the British Pound, Kuwaiti Dinar, Indian Rupee, Philippine Peso and South Korean Won) that were designated as hedging instruments. The foreign currency contracts are of varying duration, none of which extend beyond April 2020. There were no commodity contracts outstanding as of June 30, 2018. The fair values of derivatives designated as hedging instruments under ASC 815 as of June 30, 2018 and December 31, 2017 were as follows: Asset Derivatives Liability Derivatives Balance Sheet June 30, December 31, Balance Sheet June 30, December 31, (in thousands) Location 2018 2017 Location 2018 2017 Foreign currency contracts Other current assets $ $ Other accrued liabilities $ $ Foreign currency contracts Other assets Noncurrent liabilities Total $ $ $ $ During the three and six months ended June 30, 2017, the company recognized a pre-tax net gain of $1.2 million and $4.1 million, respectively, in “Corporate general and administrative expense” associated with foreign currency contracts designated as fair value hedges. There were no fair value hedges outstanding as of June 30, 2018. The pre-tax net gain recognized in earnings associated with the hedging instruments designated as fair value hedges offset the amount of losses recognized in earnings on the hedged items in the same location on the Condensed Consolidated Statement of Earnings. The after-tax amount of gain (loss) recognized in OCI associated with the derivative instruments designated as cash flow hedges was as follows: Three Months Ended Six Months Ended June 30, June 30, Cash Flow Hedges (in thousands) 2018 2017 2018 2017 Commodity contracts $ — $ ) $ — $ ) Foreign currency contracts ) ) ) Total $ ) $ ) $ ) $ The after-tax amount of gain (loss) reclassified from AOCI into earnings associated with the derivative instruments designated as cash flow hedges was as follows: Three Months Ended Six Months Ended June 30, June 30, Cash Flow Hedges (in thousands) Location of Gain (Loss) 2018 2017 2018 2017 Commodity contracts Total cost of revenue $ — $ ) $ — $ ) Foreign currency contracts Total cost of revenue ) ) Interest rate contracts Interest expense ) ) ) ) Total $ ) $ $ ) $ ) As of June 30, 2018, the company also had total gross notional amounts of $51 million of foreign currency contracts outstanding that were not designated as hedging instruments. These contracts primarily related to engineering contract obligations denominated in nonfunctional currencies. As of June 30, 2018, the company had total gross notional amounts of $77 million associated with contractual foreign currency payment provisions that were deemed embedded derivatives. Net gains of $0.5 million and net losses of $0.7 million associated with the company’s derivatives and embedded derivatives were included in “Total cost of revenue” and “Corporate general and administrative expense” for the three and six months ended June 30, 2018, respectively. There were no similar contracts of significance as of June 30, 2017. |
Retirement Benefits
Retirement Benefits | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits | |
Retirement Benefits | (10) Retirement Benefits Net periodic pension expense for the company’s defined benefit pension plans includes the following components: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2018 2017 2018 2017 Service cost $ $ $ $ Interest cost Expected return on assets ) ) ) ) Amortization of prior service credit ) ) ) ) Recognized net actuarial loss Loss on settlement — — Net periodic pension expense $ $ $ $ As a result of the adoption of ASU 2017-07 in the first quarter of 2018, the service cost component of net periodic pension expense has been presented in “Total cost of revenue” and the other components of net periodic pension expense have been presented in “Corporate general and administrative expense” on the Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2018. Amounts in the 2017 period have not been reclassified to conform to the new presentation as the impact to the results of operations was not material. In the third quarter of 2018, the company expects to execute a buy-in policy contract with an insurance company to fully insure the benefits of the defined benefit pension plan in the United Kingdom. The initial value of the insurance asset will be equal to the premium paid to secure the policy (i.e., the fair value of the plan assets plus estimated additional funding to execute the buy-in contract). Once the additional funding for the buy-in is contributed, the company does not anticipate any further material contributions to the U.K. plan. The fair value of the insurance asset will be adjusted quarterly to mirror the change in the benefit obligation. The company currently expects to contribute up to $45 million into its defined benefit pension plans during 2018, which is expected to be in excess of the minimum funding required and includes additional funding to execute the buy-in contract for the U.K. plan, as discussed above. During the six months ended June 30, 2018, contributions of approximately $9 million were made by the company. |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2018 | |
Financing Arrangements | |
Financing Arrangements | (11) Financing Arrangements As of June 30, 2018, the company had both committed and uncommitted lines of credit available to be used for revolving loans and letters of credit. As of June 30, 2018, letters of credit and borrowings totaling $1.6 billion were outstanding under these committed and uncommitted lines of credit. The committed lines of credit include a $1.7 billion Revolving Loan and Letter of Credit Facility and a $1.8 billion Revolving Loan and Letter of Credit Facility. Both facilities mature in February 2022. The company may utilize up to $1.75 billion in the aggregate of the combined $3.5 billion committed lines of credit for revolving loans, which may be used for acquisitions and/or general purposes. Each of the credit facilities may be increased up to an additional $500 million subject to certain conditions, and contains customary financial and restrictive covenants, including a maximum ratio of consolidated debt to tangible net worth of one-to-one and a cap on the aggregate amount of debt of the greater of $750 million or €750 million for the company’s subsidiaries. Borrowings under both facilities, which may be denominated in USD, EUR, GBP or CAD, bear interest at rates based on the Eurodollar Rate or an alternative base rate, plus an applicable borrowing margin. In connection with the Stork acquisition, the company assumed a €110 million Super Senior Revolving Credit Facility that bore interest at EURIBOR plus 3.75%. In April 2016, the company repaid and replaced the €110 million Super Senior Revolving Credit Facility with a €125 million Revolving Credit Facility which was used for revolving loans, bank guarantees, letters of credit and to fund working capital in the ordinary course of business. This replacement facility, which bore interest at EURIBOR plus .75%, expired in April 2017. Outstanding borrowings of $53 million under the €125 million Revolving Credit Facility were repaid in 2017. Letters of credit are provided in the ordinary course of business primarily to indemnify the company’s clients if the company fails to perform its obligations under its contracts. Surety bonds may be used as an alternative to letters of credit. In March 2016, the company issued €500 million of 1.750% Senior Notes (the “2016 Notes”) due March 21, 2023 and received proceeds of €497 million (or approximately $551 million), net of underwriting discounts. Interest on the 2016 Notes is payable annually on March 21 of each year, beginning on March 21, 2017. Prior to December 21, 2022, the company may redeem the 2016 Notes at a redemption price equal to 100 percent of the principal amount, plus a “make whole” premium described in the indenture. On or after December 21, 2022, the company may redeem the 2016 Notes at 100 percent of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. Additionally, the company may redeem the 2016 Notes at any time upon the occurrence of certain changes in U.S. tax laws, as described in the indenture, at 100 percent of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. In November 2014, the company issued $500 million of 3.5% Senior Notes (the “2014 Notes”) due December 15, 2024 and received proceeds of $491 million, net of underwriting discounts. Interest on the 2014 Notes is payable semi-annually on June 15 and December 15 of each year, and began on June 15, 2015. Prior to September 15, 2024, the company may redeem the 2014 Notes at a redemption price equal to 100 percent of the principal amount, plus a “make whole” premium described in the indenture. On or after September 15, 2024, the company may redeem the 2014 Notes at 100 percent of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. In September 2011, the company issued $500 million of 3.375% Senior Notes (the “2011 Notes”) due September 15, 2021 and received proceeds of $492 million, net of underwriting discounts. Interest on the 2011 Notes is payable semi-annually on March 15 and September 15 of each year, and began on March 15, 2012. The company may, at any time, redeem the 2011 Notes at a redemption price equal to 100 percent of the principal amount, plus a “make whole” premium described in the indenture. For the 2016 Notes, the 2014 Notes and the 2011 Notes, if a change of control triggering event occurs, as defined by the terms of the respective indentures, the company will be required to offer to purchase the applicable notes at a purchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest, if any, to the date of redemption. The company is generally not limited under the indentures governing the 2016 Notes, the 2014 Notes and the 2011 Notes in its ability to incur additional indebtedness provided the company is in compliance with certain restrictive covenants, including restrictions on liens and restrictions on sale and leaseback transactions. We may, from time to time, repurchase the 2016 Notes, the 2014 Notes or the 2011 Notes in the open market, in privately-negotiated transactions or otherwise in such volumes, at such prices and upon such other terms as we deem appropriate. During the second quarter of 2018, the company issued commercial paper to meet its short-term liquidity needs. Approximately $50 million in commercial paper was outstanding as of June 30, 2018 with a weighted average interest rate of 2.43%. All of the company’s outstanding commercial paper matures within one month. Other borrowings of $34 million as of June 30, 2018 and $31 million as of December 31, 2017 primarily represent bank loans and other financing arrangements associated with Stork. As of June 30, 2018, the company was in compliance with all of the financial covenants related to its debt agreements. |
Stock-Based Plans
Stock-Based Plans | 6 Months Ended |
Jun. 30, 2018 | |
Stock-Based Plans | |
Stock-Based Plans | (12) Stock-Based Plans The company’s executive and director stock-based compensation plans are described, and informational disclosures are provided, in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2017. In the first half of 2018 and 2017, restricted stock units totaling 603,111 and 402,783, respectively, were granted to executives and directors, at weighted-average grant date fair values of $57.88 per share and $52.57 per share, respectively. Restricted stock units granted to executives in 2018 and 2017 generally vest ratably over three years. Restricted stock units granted to directors in 2018 vested immediately while restricted stock units granted to directors in 2017 vested on the first anniversary of the grant. Restricted stock units awarded to directors in 2018 and 2017 and certain executives in 2017 are subject to a post-vest holding period of three years. The fair value of restricted stock units represents the closing price of the company’s common stock on the date of grant discounted for the post-vest holding period, when applicable. During the first half of 2018 and 2017, stock options for the purchase of 33,615 shares at a weighted-average exercise price of $58.15 per share and 1,103,817 shares at a weighted-average exercise price of $55.35 per share, respectively, were awarded to executives. The exercise price of options represents the closing price of the company’s common stock on the date of grant. The options granted in 2018 and 2017 vest ratably over three years and expire ten years after the grant date. In the first half of 2018 and 2017, performance-based Value Driver Incentive (“VDI”) units totaling 206,598 and 249,204, respectively, were awarded to executives. These awards vest after a period of approximately three years and contain annual performance conditions for each of the three years of the vesting period. The performance targets for each year are generally established in the first quarter of that year. Under ASC 718, performance-based awards are not deemed granted for accounting purposes until the performance targets have been established. Accordingly, only one-third of the units awarded in any given year are deemed to be granted each year of the three year vesting period. During the first half of 2018, units totaling 68,866, 72,601 and 90,931 under the 2018, 2017 and 2016 VDI plans, respectively, were granted at weighted-average grant date fair values of $66.38 per share, $56.30 per share and $52.31 per share, respectively. VDI units granted under the 2017 and 2016 VDI plans are subject to a post-vest holding period of three years. The grant date fair value is determined by adjusting the closing price of the company’s common stock on the date of grant for the post-vest holding period discount and for the effect of the market condition, when applicable. For awards granted under the 2018 and 2017 VDI plans, the number of units will be adjusted at the end of each performance period based on achievement of certain performance targets and market conditions, as defined in the VDI award agreements. For awards granted under the 2016 VDI plan, the number of units is adjusted at the end of each performance period based only on the achievement of certain performance targets, as defined in the VDI award agreement. Units granted under the 2018, 2017 and 2016 VDI plans can only be settled in company stock and are accounted for as equity awards in accordance with ASC 718. |
Noncontrolling Interests
Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2018 | |
Noncontrolling Interests | |
Noncontrolling Interests | (13) Noncontrolling Interests The company applies the provisions of ASC 810-10-45, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net earnings attributable to the parent and to the noncontrolling interests, changes in a parent’s ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. As required by ASC 810-10-45, the company has separately disclosed on the face of the Condensed Consolidated Statement of Earnings for all periods presented the amount of net earnings attributable to the company and the amount of net earnings attributable to noncontrolling interests. For the three and six months ended June 30, 2018, net earnings attributable to noncontrolling interests were $16 million and $22 million, respectively. For the three and six months ended June 30, 2017, net earnings attributable to noncontrolling interests were $17 million and $34 million, respectively. Income taxes associated with earnings attributable to noncontrolling interests were $2.3 million and $2.7 million for three and six months ended June 30, 2018, respectively. Income taxes associated with earnings attributable to noncontrolling interests were immaterial in both periods of 2017. Distributions paid to noncontrolling interests were $32 million and $21 million for the six months ended June 30, 2018 and 2017, respectively. Capital contributions by noncontrolling interests were $4 million for both the six months ended June 30, 2018 and 2017. |
Contingencies and Commitments
Contingencies and Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Contingencies and Commitments | |
Contingencies and Commitments | (14) Contingencies and Commitments The company and certain of its subsidiaries are subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, the company currently does not expect that the ultimate resolution of any open matters will have a material adverse effect on its consolidated financial position or results of operations. In May 2018, a purported shareholder filed a complaint against Fluor Corporation and certain of its current and former executives in the United States District Court for the Northern District of Texas. The plaintiff purports to represent a class of shareholders who purchased or otherwise acquired Fluor common stock from August 14, 2013 through May 3, 2018, and seeks to recover damages arising from alleged violations of federal securities laws. At this time, the company has not been served with the complaint. The company believes that the claims asserted in the complaint are without merit. Fluor Australia Ltd., a wholly-owned subsidiary of the company (“Fluor Australia”), completed a cost reimbursable engineering, procurement and construction management services project for Santos Ltd. (“Santos”) involving a large network of natural gas gathering and processing facilities in Queensland, Australia. On December 13, 2016, Santos filed an action in Queensland Supreme Court against Fluor Australia, asserting various causes of action and seeking damages of approximately AUD $1.47 billion. Santos has joined Fluor Corporation to the matter on the basis of a parent company guarantee issued for the project. The company believes that the claims asserted by Santos are without merit and is vigorously defending these claims. Based upon the present status of this matter, the company does not believe it is probable that a loss will be incurred. Accordingly, the company has not recorded a charge as a result of this action. Other Matters The company has made claims arising from the performance under its contracts. The company recognizes revenue for certain claims (including change orders in dispute and unapproved change orders in regard to both scope and price) when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The company estimates the amount of revenue to be recognized on claims using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. Similarly, the company recognizes disputed back charges to suppliers or subcontractors as a reduction of cost when the same requirements have been satisfied. The company periodically evaluates its positions and the amounts recognized with respect to all its claims and back charges. As of June 30, 2018 and December 31, 2017, the company had recorded $132 million and $124 million, respectively, of claim revenue for costs incurred to date and such costs are included in contract assets. Additional costs, which will increase the claim revenue balance over time, are expected to be incurred in future periods. The company had also recorded disputed back charges totaling $18 million as of both June 30, 2018 and December 31, 2017, respectively. The company believes the ultimate recovery of amounts related to these claims and back charges is probable in accordance with ASC 606. From time to time, the company enters into significant contracts with the U.S. government and its agencies. Government contracts are subject to audits and investigations by government representatives with respect to the company’s compliance with various restrictions and regulations applicable to government contractors, including but not limited to the allowability of costs incurred under reimbursable contracts. In connection with performing government contracts, the company maintains reserves for estimated exposures associated with these matters. |
Guarantees
Guarantees | 6 Months Ended |
Jun. 30, 2018 | |
Guarantees | |
Guarantees | (15) Guarantees In the ordinary course of business, the company enters into various agreements providing performance assurances and guarantees to clients on behalf of certain unconsolidated and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The performance guarantees have various expiration dates ranging from mechanical completion of the project being constructed to a period extending beyond contract completion in certain circumstances. The maximum potential amount of future payments that the company could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed by or on behalf of third parties under engineering and construction contracts, was estimated to be $13 billion as of June 30, 2018. Amounts that may be required to be paid in excess of estimated cost to complete contracts in progress are not estimable. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed under the contract. For lump-sum or fixed-price contracts, the performance guarantee amount is the cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, the company may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors for claims. The company assessed its performance guarantee obligation as of June 30, 2018 and December 31, 2017 in accordance with ASC 460, “Guarantees,” and the carrying value of the liability was not material. Financial guarantees, made in the ordinary course of business in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate the company to make payment in the event of a default by the borrower. These arrangements generally require the borrower to pledge collateral to support the fulfillment of the borrower’s obligation. |
Partnerships and Joint Ventures
Partnerships and Joint Ventures | 6 Months Ended |
Jun. 30, 2018 | |
Partnerships and Joint Ventures | |
Partnerships and Joint Ventures | (16) Partnerships and Joint Ventures In the normal course of business, the company forms partnerships or joint ventures primarily for the execution of single contracts or projects. The majority of these partnerships or joint ventures are characterized by a 50 percent or less, noncontrolling ownership or participation interest, with decision making and distribution of expected gains and losses typically being proportionate to the ownership or participation interest. Many of the partnership and joint venture agreements provide for capital calls to fund operations, as necessary. Accounts receivable related to work performed for unconsolidated partnerships and joint ventures included in “Accounts and notes receivable, net” on the Condensed Consolidated Balance Sheet were $116 million and $83 million as of June 30, 2018 and December 31, 2017, respectively. Notes receivable from unconsolidated partnerships and joint ventures included in “Accounts and notes receivable, net” and “Other assets” on the Condensed Consolidated Balance Sheet were $33 million and $22 million as of June 30, 2018 and December 31, 2017, respectively. For unconsolidated construction partnerships and joint ventures, the company generally recognizes its proportionate share of revenue, cost and profit in its Condensed Consolidated Statement of Earnings and uses the one-line equity method of accounting on the Condensed Consolidated Balance Sheet, which is a common application of ASC 810-10-45-14 in the construction industry. The company also executes projects through collaborative arrangements for which the company recognizes its relative share of revenue and cost. The equity method of accounting is also used for other investments in entities where the company has significant influence. The company’s investments in unconsolidated partnerships and joint ventures accounted for under these methods amounted to $866 million and $830 million as of June 30, 2018 and December 31, 2017, respectively, and were classified under “Investments” and “Other accrued liabilities” on the Condensed Consolidated Balance Sheet. In the fourth quarter of 2017, the company made a cash investment of $26 million in COOEC Fluor Heavy Industries Co., Ltd. (“CFHI”), a joint venture in which the company has a 49% ownership interest and Offshore Oil Engineering Co., Ltd., a subsidiary of China National Offshore Oil Corporation, has 51% ownership interest. Through CFHI, the two companies own, operate and manage the Zhuhai Fabrication Yard in China’s Guangdong province. The company has a future funding commitment of $52 million. Variable Interest Entities In accordance with ASC 810, “Consolidation,” the company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). The company considers a partnership or joint venture a VIE if it has any of the following characteristics: (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the company reassesses its initial determination of whether the partnership or joint venture is a VIE. The majority of the company’s partnerships and joint ventures qualify as VIEs because the total equity investment is typically nominal and not sufficient to permit the entity to finance its activities without additional subordinated financial support. The company also performs a qualitative assessment of each VIE to determine if the company is its primary beneficiary, as required by ASC 810. The company concludes that it is the primary beneficiary and consolidates the VIE if the company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the company is the primary beneficiary. The company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. As required by ASC 810, management’s assessment of whether the company is the primary beneficiary of a VIE is continuously performed. The net carrying value of the unconsolidated VIEs classified under “Investments” and “Other accrued liabilities” on the Condensed Consolidated Balance Sheet was a net asset of $252 million and $216 million as of June 30, 2018 and December 31, 2017, respectively. Some of the company’s VIEs have debt; however, such debt is typically non-recourse in nature. The company’s maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding necessary to satisfy the contractual obligations of the VIE. Future funding commitments as of June 30, 2018 for the unconsolidated VIEs were $65 million. In some cases, the company is required to consolidate certain VIEs. As of June 30, 2018, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.3 billion and $909 million, respectively. As of December 31, 2017, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.2 billion and $700 million, respectively. The assets of a VIE are restricted for use only for the particular VIE and are not available for general operations of the company. The company has agreements with certain VIEs to provide financial or performance assurances to clients. See Note 15 for a further discussion of such agreements. |
Operating Information by Segmen
Operating Information by Segment | 6 Months Ended |
Jun. 30, 2018 | |
Operating Information by Segment | |
Operating Information by Segment | (17) Operating Information by Segment During the first quarter of 2018, the company changed the composition of its reportable segments to align them with the manner in which the chief executive officer manages the business and allocates resources. The operations of the company’s mining and metals business, previously included in the Energy & Chemicals segment, have been included in the Mining, Industrial, Infrastructure & Power segment. The company now reports its operating results in the following four reportable segments: Energy & Chemicals; Mining, Industrial, Infrastructure & Power; Government; and Diversified Services. Segment operating information and assets for 2017 have been recast to reflect these changes. The Energy & Chemicals segment focuses on opportunities in the upstream, midstream, downstream, chemical, petrochemical, offshore and onshore oil and gas production, liquefied natural gas and pipeline markets. This segment has long served a broad spectrum of industries as an integrated solutions provider offering a full range of design, engineering, procurement, construction, fabrication and project management services. The Mining, Industrial, Infrastructure & Power segment provides design, engineering, procurement, construction and project management services to the mining and metals, transportation, life sciences, advanced manufacturing, water and power sectors. The operations of NuScale Power, LLC, which is managed as a separate operating segment, has been aggregated with the Mining, Industrial, Infrastructure & Power segment for financial reporting purposes. The Government and Diversified Services segments remain unchanged from the previous year and a description of these reportable segments is provided in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2017. Operating information by reportable segment is as follows: Three Months Ended Six Months Ended June 30, June 30, External Revenue (in millions) 2018 2017 2018 2017 Energy & Chemicals $ $ $ $ Mining, Industrial, Infrastructure & Power Government Diversified Services Total external revenue $ $ $ $ Intercompany revenue for the Diversified Services segment, excluded from the amounts shown above, was $111 million and $240 million for the three and six months ended June 30, 2018, respectively, and $155 million and $301 million for the three and six months ended June 30, 2017, respectively. Segment profit is an earnings measure that the company utilizes to evaluate and manage its business performance. 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. Three Months Ended Six Months Ended June 30, June 30, Segment Profit (Loss) (in millions) 2018 2017 2018 2017 Energy & Chemicals $ $ $ $ Mining, Industrial, Infrastructure & Power ) ) ) Government Diversified Services Total segment profit $ $ $ $ Energy & Chemicals. Segment profit for both the three and six months ended June 30, 2018 was adversely affected by pre-tax charges totaling $67 million (or $0.47 per diluted share) resulting from forecast revisions for estimated cost growth on a fixed-price downstream project. Mining, Industrial, Infrastructure & Power. Segment profit for the three and six months ended June 30, 2018 was adversely affected by pre-tax charges totaling $16 million (or $0.09 per diluted share) and $142 million (or $0.77 per diluted share), respectively, resulting from forecast revisions for estimated cost growth for a fixed-price, gas-fired power plant project, while segment profit for the three and six months ended June 30, 2017 was adversely affected by pre-tax charges totaling $194 million (or $0.89 per diluted share) and $219 million (or $0.99 per diluted share), respectively, resulting from forecast revisions for estimated cost growth for three fixed-price, gas-fired power plant projects. Segment profit for all periods included the operations of NuScale, which are primarily for research and development activities associated with the licensing and commercialization of small modular nuclear reactor technology. As discussed in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2017, NuScale has been receiving reimbursement of up to 43 percent for certain qualified expenditures under a cooperative agreement with the U.S. Department of Energy (“DOE”) since May 2014. As of June 30, 2018, NuScale had recognized substantially all of the funding available under the initial cooperative agreement. In April 2018, the DOE announced that NuScale had been selected to receive an additional cost sharing award for $40 million under the DOE’s Office of Nuclear Energy’s U.S. Industry Opportunities for Advanced Nuclear Technology Development funding opportunity announcement (“FOA”). Based on the announcement and other correspondence from the DOE, the company believes it is probable that the award will be granted and that the company will satisfy the conditions of the award. As of June 30, 2018, the company has deferred certain expenditures that qualify for reimbursement under the FOA award. NuScale expenses included in the determination of segment profit were $24 million and $47 million for the three and six months ended June 30, 2018, respectively, and $17 million and $33 million for the three and six months ended June 30, 2017, respectively. NuScale expenses were reported net of qualified reimbursable and deferred expenses totaling $12 million and $27 million for the three and six months periods of 2018, respectively, and $10 million and $20 million for the three and six month periods of 2017, respectively. A reconciliation of total segment profit to earnings before taxes is as follows: Three Months Ended Six Months Ended Reconciliation of Total Segment Profit to Earnings June 30, June 30, (Loss) Before Taxes (in millions) 2018 2017 2018 2017 Total segment profit $ $ $ $ Corporate general and administrative expense ) ) ) ) Interest income (expense), net ) ) ) ) Earnings attributable to noncontrolling interests Earnings (loss) before taxes $ $ ) $ $ Total assets by segment are as follows: June 30, December 31, Total Assets by Segment (in millions) 2018 2017 Energy & Chemicals $ $ Mining, Industrial, Infrastructure & Power Government Diversified Services The increase in total assets in the Government segment resulted from increased working capital in support of project execution activities for the power restoration project in Puerto Rico. Total assets in the Mining, Industrial, Infrastructure & Power segment as of June 30, 2018 included accounts receivable related to two subcontracts with Westinghouse Electric Company LLC (“Westinghouse”) to manage the construction workforce at the Plant Vogtle and V.C. Summer nuclear power plant projects. On March 29, 2017, Westinghouse filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, Southern District of New York. In the third quarter of 2017, the V.C. Summer project was cancelled by the owner. In the fourth quarter of 2017, the remaining scope of work on the Plant Vogtle project was transferred to a new contractor. In addition to amounts due for post-petition services, total assets as of June 30, 2018 included amounts due of $66 million and $2 million for services provided to the V.C. Summer and Plant Vogtle projects, respectively, prior to the date of the bankruptcy petition. The company has filed mechanic’s liens in South Carolina against the property of the owner of the V.C. Summer project for amounts due for pre-petition services rendered to Westinghouse. Based on the company’s evaluation of available information, the company does not expect the close-out of these projects to have a material impact on the company’s results of operations. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue recognition | |
Schedule of remaining performance obligation | The company expects to satisfy its RUPO as of June 30, 2018 over the following periods (in millions): Within 1 year $ 1 to 2 years Thereafter Total remaining unsatisfied performance obligations $ |
Schedule of disaggregation of revenue | Three Months Ended June 30, Six Months Ended June 30, Revenue by Geographic Area (in millions) 2018 2017 (1) 2018 2017 (1) United States $ $ $ $ Canada Asia Pacific (includes Australia) Europe Central and South America Middle East and Africa Total revenue by geographic area $ $ $ $ (1) Prior periods amounts have not been adjusted for the adoption of ASC Topic 606 under the modified retrospective method. |
ASU 2014-09 | |
Revenue recognition | |
Schedule of change in financial statements due to adoption of ASC Topic 606 | The following tables present how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Statement of Earnings: Three Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition Total revenue $ $ $ Total cost of revenue Corporate general and administrative expense Interest expense — Interest income ) — ) Earnings before taxes Income tax expense Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Fluor Corporation Six Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition Total revenue $ $ $ Total cost of revenue Corporate general and administrative expense Interest expense — Interest income ) — ) Earnings before taxes Income tax expense Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to Fluor Corporation The following table presents how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Balance Sheet: As of June 30, 2018 (in thousands) Recognition Impact of the Recognition Accounts and notes receivable, net $ $ ) $ Contract assets (previously presented as contract work in progress) ) Investments ) Deferred tax assets Other assets ) Contract liabilities (previously presented as advance billings on contracts) Other accrued liabilities ) Noncurrent liabilities ) Accumulated other comprehensive loss ) ) Retained earnings ) Noncontrolling interests The following table presents how the adoption of ASC Topic 606 affected certain line items in the Condensed Consolidated Statement of Cash Flows: Six Months Ended June 30, 2018 (in thousands) Recognition Impact of the Recognition CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ $ $ (Earnings) loss from equity method investments, net of distributions Deferred taxes Changes in operating assets and liabilities ) ) ) Cash utilized by operating activities ) — ) |
Other Comprehensive Income (L25
Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss) | |
Schedule of tax effects of components of other comprehensive income (loss) | Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Tax Tax Before-Tax Benefit Net-of-Tax Before-Tax Benefit Net-of-Tax (in thousands) Amount (Expense) Amount Amount (Expense) Amount Other comprehensive income (loss): Foreign currency translation adjustment $ ) $ $ ) $ $ ) $ Ownership share of equity method investees’ other comprehensive income (loss) ) ) ) Defined benefit pension and postretirement plan adjustments ) ) Unrealized loss on derivative contracts ) ) ) ) Unrealized loss on available-for-sale securities — — — ) ) Total other comprehensive income (loss) ) ) ) Less: Other comprehensive loss attributable to noncontrolling interests ) — ) ) — ) Other comprehensive income (loss) attributable to Fluor Corporation $ ) $ $ ) $ $ ) $ Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 Tax Tax Before-Tax Benefit Net-of-Tax Before-Tax Benefit Net-of-Tax (in thousands) Amount (Expense) Amount Amount (Expense) Amount Other comprehensive income (loss): Foreign currency translation adjustment $ ) $ $ ) $ $ ) $ Ownership share of equity method investees’ other comprehensive income: ) ) Defined benefit pension and postretirement plan adjustments ) ) Unrealized gain (loss) on derivative contracts ) ) ) Unrealized gain (loss) on available-for-sale securities ) ) ) Total other comprehensive income (loss) ) ) ) Less: Other comprehensive loss attributable to noncontrolling interests ) — ) ) — ) Other comprehensive income (loss) attributable to Fluor Corporation $ ) $ $ (20,353 ) $ $ ) $ |
Schedule of changes in accumulated other comprehensive income balances by component (after-tax) | (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of March 31, 2018 $ ) $ ) $ ) $ ) $ — $ ) Other comprehensive income (loss) before reclassifications ) — ) — ) Amounts reclassified from AOCI — — Net other comprehensive income (loss) ) ) — ) Balance as of June 30, 2018 $ ) $ ) $ ) $ ) $ — $ ) Attributable to Noncontrolling Interests: Balance as of March 31, 2018 $ ) $ — $ — $ — $ — $ ) Other comprehensive loss before reclassifications ) — — — — ) Amounts reclassified from AOCI — — — — — — Net other comprehensive loss ) — — — — ) Balance as of June 30, 2018 $ ) $ — $ — $ — $ — $ ) (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of December 31, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) — ) — ) Amounts reclassified from AOCI — Net other comprehensive income (loss) ) ) ) Balance as of June 30, 2018 $ ) $ ) $ ) $ ) $ — $ ) Attributable to Noncontrolling Interests: Balance as of December 31, 2017 $ ) $ — $ — $ — $ — $ ) Other comprehensive loss before reclassifications ) — — — — ) Amounts reclassified from AOCI — — — — — — Net other comprehensive loss ) — — — — ) Balance as of June 30, 2018 $ ) $ — $ — $ — $ — $ ) (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of March 31, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications ) — ) ) ) Amounts reclassified from AOCI — — ) ) Net other comprehensive income (loss) ) ) ) Balance as of June 30, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Attributable to Noncontrolling Interests: Balance as of March 31, 2017 $ ) $ — $ — $ ) $ — $ ) Other comprehensive loss before reclassifications ) — — ) — ) Amounts reclassified from AOCI — — — — Net other comprehensive income (loss) ) — — — ) Balance as of June 30, 2017 $ ) $ — $ — $ — $ — $ ) (in thousands) Foreign Ownership Defined Unrealized Unrealized Accumulated Attributable to Fluor Corporation: Balance as of December 31, 2016 $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive income (loss) before reclassifications — ) Amounts reclassified from AOCI — — Net other comprehensive income (loss) ) Balance as of June 30, 2017 $ ) $ ) $ ) $ ) $ ) $ ) Attributable to Noncontrolling Interests: Balance as of December 31, 2016 $ ) $ — $ — $ ) $ — $ ) Other comprehensive income (loss) before reclassifications ) — — — ) Amounts reclassified from AOCI — — — — Net other comprehensive income (loss) ) — — — ) Balance as of June 30, 2017 $ ) $ — $ — $ — $ — $ ) |
Schedule of significant items reclassified out of AOCI and corresponding location and impact | Location in Three Months Ended Six Months Ended Condensed Consolidated June 30, June 30, (in thousands) Statement of Earnings 2018 2017 2018 2017 Component of AOCI: Ownership share of equity method investees’ other comprehensive loss Total cost of revenue $ ) $ — $ ) $ — Income tax benefit Income tax expense — — Net of tax $ ) $ — $ ) $ — Defined benefit pension plan adjustments Various accounts (1) $ ) $ ) $ ) $ ) Income tax benefit Income tax expense Net of tax $ ) $ ) $ ) $ ) Unrealized gain (loss) on derivative contracts: Commodity and foreign currency contracts Total cost of revenue $ ) $ $ ) $ Interest rate contracts Interest expense ) ) ) ) Income tax benefit (expense) Income tax expense ) Net of tax ) ) ) Less: Noncontrolling interests Net earnings attributable to noncontrolling interests — ) — ) Net of tax and noncontrolling interests $ ) $ $ ) $ ) Unrealized gain (loss) on available-for-sale securities Corporate general and administrative expense $ — $ $ ) $ ) Income tax benefit (expense) Income tax expense — ) Net of tax $ — $ $ ) $ ) (1) Defined benefit pension plan adjustments were reclassified to “Corporate general and administrative expense” in 2018 and to “Total cost of revenue” and “Corporate general and administrative expense” in 2017. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Schedule of calculations of basic and diluted EPS | Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share amounts) 2018 2017 2018 2017 Net earnings (loss) attributable to Fluor Corporation $ $ ) $ $ Basic EPS attributable to Fluor Corporation: Weighted average common shares outstanding Basic earnings (loss) per share $ $ ) $ $ Diluted EPS attributable to Fluor Corporation: Weighted average common shares outstanding Diluted effect: Employee stock options, restricted stock units and shares and Value Driver Incentive units (1) — Weighted average diluted shares outstanding Diluted earnings (loss) per share $ $ ) $ $ Anti-dilutive securities not included above (1) Employee stock options, restricted stock units and shares, and Value Driver Incentive units of 936,000 were excluded from weighted average diluted shares outstanding for the three months ended June 30, 2017 as the shares would have an anti-dilutive effect on the net loss. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | June 30, 2018 December 31, 2017 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents (1) $ — $ — $ — $ — $ $ $ $ — Marketable securities, current (2) — — — — — — Deferred compensation trusts (3) — — — — Marketable securities, noncurrent (4) — — — — — — Derivative assets (5) Foreign currency contracts — — — — Liabilities: Derivative liabilities (5) Foreign currency contracts — — $ $ — $ $ — (1) Consists of registered money market funds and investment in U.S. agency securities with maturities of three months or less at the date of purchase. The fair value of the money market funds represents the net asset value of the shares of such funds as of the close of business at the end of the period. The fair value of the investments in U.S. agency securities is based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (2) Consists of investments in U.S. agency securities, U.S. Treasury securities, corporate debt securities and commercial paper with maturities of less than one year that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (3) Consists of registered money market funds and an equity index fund valued at fair value. These investments, which are trading securities, represent the net asset value of the shares of such funds as of the close of business at the end of the period based on the last trade or official close of an active market or exchange. (4) Consists of investments in U.S. agency securities, U.S. Treasury securities and corporate debt securities with maturities ranging from one year to three years that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets. (5) See Note 9 for the classification of foreign currency contracts on the Condensed Consolidated Balance Sheet. Foreign currency contracts are estimated using standard pricing models with market-based inputs, which take into account the present value of estimated future cash flows. |
Schedule of carrying values and estimated fair values of financial instruments not required to be measured at fair value | June 30, 2018 December 31, 2017 Fair Value Carrying Fair Carrying Fair (in thousands) Hierarchy Value Value Value Value Assets: Cash (1) Level 1 $ $ $ $ Cash equivalents (2) Level 2 Marketable securities, current (3) Level 2 Notes receivable, including noncurrent portion (4) Level 3 Liabilities: 1.750% Senior Notes (5) Level 2 $ $ $ $ 3.375% Senior Notes (5) Level 2 3.5% Senior Notes (5) Level 2 Commercial paper (6) Level 2 — — Other borrowings, including noncurrent portion (7) Level 2 (1) Cash consists of bank deposits. Carrying amounts approximate fair value. (2) Cash equivalents consist of held-to-maturity time deposits with maturities of three months or less at the date of purchase. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. (3) Marketable securities, current consist of held-to-maturity time deposits with original maturities greater than three months that will mature within one year. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value. (4) Notes receivable are carried at net realizable value which approximates fair value. Factors considered by the company in determining the fair value include the credit worthiness of the borrower, current interest rates, the term of the note and any collateral pledged as security. Notes receivable are periodically assessed for impairment. (5) The fair value of the 1.750% Senior Notes, 3.375% Senior Notes and 3.5% Senior Notes is estimated based on quoted market prices for similar issues. (6) All of the company’s outstanding commercial paper matures within one month. The fair value of the commercial paper is based on quoted market prices in an active market. The carrying value of the outstanding commercial paper approximates fair value due to its short-term nature. (7) Other borrowings primarily represent bank loans and other financing arrangements resulting from the acquisition of Stork. The majority of these borrowings mature within one year. The carrying amount of borrowings under these arrangements approximates fair value because of the short-term maturity. |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivatives and Hedging | |
Schedule of fair values of derivatives designated as hedging instruments under ASC 815 | Asset Derivatives Liability Derivatives Balance Sheet June 30, December 31, Balance Sheet June 30, December 31, (in thousands) Location 2018 2017 Location 2018 2017 Foreign currency contracts Other current assets $ $ Other accrued liabilities $ $ Foreign currency contracts Other assets Noncurrent liabilities Total $ $ $ $ |
Schedule of after-tax amount of gain (loss) recognized in OCI and reclassified from AOCI into earnings associated with derivative instruments designated as cash flow hedges | The after-tax amount of gain (loss) recognized in OCI associated with the derivative instruments designated as cash flow hedges was as follows: Three Months Ended Six Months Ended June 30, June 30, Cash Flow Hedges (in thousands) 2018 2017 2018 2017 Commodity contracts $ — $ ) $ — $ ) Foreign currency contracts ) ) ) Total $ ) $ ) $ ) $ The after-tax amount of gain (loss) reclassified from AOCI into earnings associated with the derivative instruments designated as cash flow hedges was as follows: Three Months Ended Six Months Ended June 30, June 30, Cash Flow Hedges (in thousands) Location of Gain (Loss) 2018 2017 2018 2017 Commodity contracts Total cost of revenue $ — $ ) $ — $ ) Foreign currency contracts Total cost of revenue ) ) Interest rate contracts Interest expense ) ) ) ) Total $ ) $ $ ) $ ) |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Pension Plans | |
Retirement Benefits | |
Schedule of components of net periodic pension expense | Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2018 2017 2018 2017 Service cost $ $ $ $ Interest cost Expected return on assets ) ) ) ) Amortization of prior service credit ) ) ) ) Recognized net actuarial loss Loss on settlement — — Net periodic pension expense $ $ $ $ |
Operating Information by Segm30
Operating Information by Segment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Operating Information by Segment | |
Schedule of operating information and assets by reportable segment | Three Months Ended Six Months Ended June 30, June 30, External Revenue (in millions) 2018 2017 2018 2017 Energy & Chemicals $ $ $ $ Mining, Industrial, Infrastructure & Power Government Diversified Services Total external revenue $ $ $ $ Three Months Ended Six Months Ended June 30, June 30, Segment Profit (Loss) (in millions) 2018 2017 2018 2017 Energy & Chemicals $ $ $ $ Mining, Industrial, Infrastructure & Power ) ) ) Government Diversified Services Total segment profit $ $ $ $ June 30, December 31, Total Assets by Segment (in millions) 2018 2017 Energy & Chemicals $ $ Mining, Industrial, Infrastructure & Power Government Diversified Services |
Schedule of Reconciliation of Total Segment Profit to Earnings (Loss) Before Taxes | Three Months Ended Six Months Ended Reconciliation of Total Segment Profit to Earnings June 30, June 30, (Loss) Before Taxes (in millions) 2018 2017 2018 2017 Total segment profit $ $ $ $ Corporate general and administrative expense ) ) ) ) Interest income (expense), net ) ) ) ) Earnings attributable to noncontrolling interests Earnings (loss) before taxes $ $ ) $ $ |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue recognition | |||
Retained earnings | $ 3,353,176 | $ 3,654,931 | |
Accounts receivable | 1,556,503 | 1,602,751 | |
Contract assets | 1,586,653 | 1,458,533 | |
Investments | 905,050 | 878,863 | |
Other assets | 369,835 | 377,288 | |
Contract Liabilities | 943,920 | 874,036 | |
Other accrued liabilities | 412,760 | 453,513 | |
Noncurrent liabilities | 607,360 | 669,525 | |
Deferred tax assets | 426,671 | 316,472 | |
Noncontrolling interests | 141,485 | $ 150,089 | |
ASU 2014-09 | Impact of the Adoption of ASC Topic 606 | |||
Revenue recognition | |||
Retained earnings | (314,942) | $ (339,000) | |
Accounts receivable | (35,617) | (50,000) | |
Contract assets | (108,227) | (19,000) | |
Investments | (3,390) | (4,000) | |
Other assets | (13,404) | (14,000) | |
Contract Liabilities | 245,274 | 357,000 | |
Other accrued liabilities | (12,819) | (14,000) | |
Noncurrent liabilities | (1,268) | (1,000) | |
Deferred tax assets | 81,914 | 89,000 | |
Noncontrolling interests | $ 330 | $ (1,000) |
Revenue Recognition - Effect of
Revenue Recognition - Effect of changes in Condensed Consolidated Statement of Earnings due to adoption of ASC Topic 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue recognition | ||||
Total revenue | $ 4,883,796 | $ 4,716,100 | $ 9,707,566 | $ 9,552,000 |
Total cost of revenue | 4,673,644 | 4,684,116 | 9,439,619 | 9,370,020 |
Corporate general and administrative expense | 17,776 | 47,315 | 75,047 | 92,363 |
Interest expense | 16,784 | 16,473 | 33,896 | 34,036 |
Interest income | (8,043) | (7,863) | (15,576) | (13,898) |
Earnings before taxes | 183,635 | (23,949) | 174,580 | 69,476 |
Income tax expense | 52,471 | (17,317) | 55,477 | (1,246) |
Net earnings | 131,164 | (6,632) | 119,103 | 70,722 |
Net earnings attributable to noncontrolling interests | 16,332 | 17,393 | 21,861 | 34,136 |
Net earnings attributable to Fluor Corporation | 114,832 | $ (24,025) | 97,242 | $ 36,586 |
Recognition Under Previous Guidance | ASU 2014-09 | ||||
Revenue recognition | ||||
Total revenue | 4,853,351 | 9,675,411 | ||
Total cost of revenue | 4,673,560 | 9,438,837 | ||
Corporate general and administrative expense | 16,874 | 74,459 | ||
Interest expense | 16,784 | 33,896 | ||
Interest income | (8,043) | (15,576) | ||
Earnings before taxes | 154,176 | 143,795 | ||
Income tax expense | 46,775 | 49,781 | ||
Net earnings | 107,401 | 94,014 | ||
Net earnings attributable to noncontrolling interests | 15,194 | 20,568 | ||
Net earnings attributable to Fluor Corporation | 92,207 | 73,446 | ||
Impact of the Adoption of ASC Topic 606 | ASU 2014-09 | ||||
Revenue recognition | ||||
Total revenue | 30,445 | 32,155 | ||
Total cost of revenue | 84 | 782 | ||
Corporate general and administrative expense | 902 | 588 | ||
Earnings before taxes | 29,459 | 30,785 | ||
Income tax expense | 5,696 | 5,696 | ||
Net earnings | 23,763 | 25,089 | ||
Net earnings attributable to noncontrolling interests | 1,138 | 1,293 | ||
Net earnings attributable to Fluor Corporation | $ 22,625 | $ 23,796 |
Revenue Recognition - Effect 33
Revenue Recognition - Effect of changes in Condensed Consolidated Balance Sheet due to adoption of ASC Topic 606 (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue recognition | |||
Accounts and notes receivable, net | $ 1,556,503 | $ 1,602,751 | |
Contract assets | 1,586,653 | 1,458,533 | |
Investments | 905,050 | 878,863 | |
Deferred tax assets | 426,671 | 316,472 | |
Other assets | 369,835 | 377,288 | |
Contract Liabilities | 943,920 | 874,036 | |
Other accrued liabilities | 412,760 | 453,513 | |
Noncurrent liabilities | 607,360 | 669,525 | |
Accumulated other comprehensive loss | (422,595) | (402,242) | |
Retained earnings | 3,353,176 | 3,654,931 | |
Noncontrolling interests | 141,485 | $ 150,089 | |
ASU 2014-09 | Recognition Under Previous Guidance | |||
Revenue recognition | |||
Accounts and notes receivable, net | 1,592,120 | ||
Contract assets | 1,694,880 | ||
Investments | 908,440 | ||
Deferred tax assets | 344,757 | ||
Other assets | 383,239 | ||
Contract Liabilities | 698,646 | ||
Other accrued liabilities | 425,579 | ||
Noncurrent liabilities | 608,628 | ||
Accumulated other comprehensive loss | (427,296) | ||
Retained earnings | 3,668,118 | ||
Noncontrolling interests | 141,155 | ||
ASU 2014-09 | Impact of the Adoption of ASC Topic 606 | |||
Revenue recognition | |||
Accounts and notes receivable, net | (35,617) | $ (50,000) | |
Contract assets | (108,227) | (19,000) | |
Investments | (3,390) | (4,000) | |
Deferred tax assets | 81,914 | 89,000 | |
Other assets | (13,404) | (14,000) | |
Contract Liabilities | 245,274 | 357,000 | |
Other accrued liabilities | (12,819) | (14,000) | |
Noncurrent liabilities | (1,268) | (1,000) | |
Accumulated other comprehensive loss | 4,701 | ||
Retained earnings | (314,942) | (339,000) | |
Noncontrolling interests | $ 330 | $ (1,000) |
Revenue Recognition - Effect 34
Revenue Recognition - Effect of changes in Condensed Consolidated Statement of Cash Flows due to adoption of ASC Topic 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net earnings | $ 131,164 | $ (6,632) | $ 119,103 | $ 70,722 |
(Earnings) loss from equity method investments, net of distributions | 1,919 | 1,996 | ||
Deferred taxes | 15,619 | 76,866 | ||
Changes in operating assets and liabilities | (394,362) | 166,628 | ||
Cash utilized by operating activities | (132,600) | $ 427,926 | ||
Recognition Under Previous Guidance | ASU 2014-09 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net earnings | 107,401 | 94,014 | ||
(Earnings) loss from equity method investments, net of distributions | 1,137 | |||
Deferred taxes | 8,840 | |||
Changes in operating assets and liabilities | (361,712) | |||
Cash utilized by operating activities | (132,600) | |||
Impact of the Adoption of ASC Topic 606 | ASU 2014-09 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net earnings | $ 23,763 | 25,089 | ||
(Earnings) loss from equity method investments, net of distributions | 782 | |||
Deferred taxes | 6,779 | |||
Changes in operating assets and liabilities | $ (32,650) |
Revenue Recognition - Engineeri
Revenue Recognition - Engineering & Construction Contracts and Service Contracts (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Changes in contract assets, liabilities | ||
Unbilled receivables included in contract assets | $ 1,300 | |
Contract work in progress included in contract assets | 273 | |
Amount received as payments towards contract assets | 650 | $ 337 |
Revenue recognised in contract liabilities | $ 639 | |
Maximum | ||
Changes in contract assets, liabilities | ||
Period by which all cost associated with contract assets will be billed | 1 year | |
Engineering and construction contracts | Maximum | ||
Changes in contract assets, liabilities | ||
Collection period | 45 days | |
Engineering and construction contracts | Minimum | ||
Changes in contract assets, liabilities | ||
Collection period | 30 days | |
Service Contract | Maximum | ||
Changes in contract assets, liabilities | ||
Collection period | 90 days | |
Service Contract | Minimum | ||
Changes in contract assets, liabilities | ||
Collection period | 30 days |
Revenue Recognition - Practical
Revenue Recognition - Practical Expedient (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Practical expedient | |
Contract price not adjusted for the effects of financing component | true |
Revenue Recognition - Performan
Revenue Recognition - Performance obligation (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue Recognition | |
Remaining performance obligation | $ 26,885 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue Recognition | |
Remaining performance obligation | $ 14,359 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue Recognition | |
Remaining performance obligation | $ 9,824 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue Recognition | |
Remaining performance obligation | $ 2,702 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, period | 0 years |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of revenue | ||||
Total revenue | $ 4,883,796 | $ 4,716,100 | $ 9,707,566 | $ 9,552,000 |
United States | ||||
Disaggregation of revenue | ||||
Total revenue | 2,220,200 | 2,484,400 | 4,539,200 | 5,015,300 |
Canada | ||||
Disaggregation of revenue | ||||
Total revenue | 42,600 | 424,500 | 118,300 | 921,400 |
Asia Pacific (includes Australia) | ||||
Disaggregation of revenue | ||||
Total revenue | 397,600 | 207,400 | 629,300 | 404,500 |
Europe | ||||
Disaggregation of revenue | ||||
Total revenue | 1,252,500 | 977,700 | 2,438,300 | 2,010,500 |
Central and South America | ||||
Disaggregation of revenue | ||||
Total revenue | 344,900 | 209,600 | 885,900 | 372,600 |
Middle East and Africa | ||||
Disaggregation of revenue | ||||
Total revenue | $ 626,000 | $ 412,500 | $ 1,096,600 | $ 827,700 |
Other Comprehensive Income (L39
Other Comprehensive Income (Loss) - Tax Effects of Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | $ (65,422) | $ 1,740 | $ (34,124) | $ 72,981 |
Less: Other comprehensive loss attributable to noncontrolling interests | (1,223) | (406) | (883) | (148) |
Other comprehensive income (loss) attributable to Fluor Corporation | (64,199) | 2,146 | (33,241) | 73,129 |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | 14,564 | (1,227) | 12,888 | (27,721) |
Other comprehensive income (loss) attributable to Fluor Corporation, Tax Benefit (Expense) | 14,564 | (1,227) | 12,888 | (27,721) |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (50,858) | 513 | (21,236) | 45,260 |
Less: Other comprehensive income (loss) attributable to noncontrolling interests, Net-of-Tax | (1,223) | (406) | (883) | (148) |
Other comprehensive income (loss) attributable to Fluor Corporation, Net-of-Tax | (49,635) | 919 | (20,353) | 45,408 |
Foreign currency translation adjustment | ||||
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | (75,585) | 12,013 | (48,667) | 60,671 |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | 16,604 | (4,616) | 16,044 | (22,784) |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (58,981) | 7,397 | (32,623) | 37,887 |
Ownership share of equity method investees' other comprehensive income (loss): | ||||
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | 9,352 | (9,811) | 15,611 | 3,576 |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | (1,783) | 3,302 | (3,061) | (1,652) |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 7,569 | (6,509) | 12,550 | 1,924 |
Defined benefit pension and postretirement plan adjustments | ||||
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | 3,366 | 2,428 | 4,883 | 3,056 |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | (672) | (911) | (1,013) | (1,146) |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 2,694 | 1,517 | 3,870 | 1,910 |
Unrealized gain (loss) on derivative contracts | ||||
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | (2,555) | (2,739) | (7,085) | 5,697 |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | 415 | 941 | 1,343 | (2,147) |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $ (2,140) | (1,798) | (5,742) | 3,550 |
Unrealized gain (loss) on available-for-sale securities | ||||
Other comprehensive income (loss), Before-Tax Amount: | ||||
Total other comprehensive income (loss) | (151) | 1,134 | (19) | |
Other comprehensive income (loss), Tax (Benefit) Expense: | ||||
Total other comprehensive income (loss), Tax Benefit (Expense) | 57 | (425) | 8 | |
Other comprehensive income (loss), Net-of-Tax Amount: | ||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $ (94) | $ 709 | $ (11) |
Other Comprehensive Income (L40
Other Comprehensive Income (Loss) - Changes in AOCI Balances by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | $ 3,492,399 | |||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $ (50,858) | $ 513 | (21,236) | $ 45,260 |
BALANCE | 3,184,840 | 3,184,840 | ||
Accumulated Other Comprehensive Income (Loss), Net | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (372,960) | (452,180) | (402,242) | (496,669) |
Other comprehensive income (loss) before reclassifications | (53,629) | (410) | (26,896) | 43,123 |
Amounts reclassified from AOCI | 3,994 | 1,329 | 6,543 | 2,285 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (49,635) | 919 | (20,353) | 45,408 |
BALANCE | (422,595) | (451,261) | (422,595) | (451,261) |
Foreign Currency Translation | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (185,159) | (256,169) | (211,177) | (286,449) |
Other comprehensive income (loss) before reclassifications | (57,758) | 7,807 | (31,740) | 38,087 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (57,758) | 7,807 | (31,740) | 38,087 |
BALANCE | (242,917) | (248,362) | (242,917) | (248,362) |
Ownership Share of Equity Method Investees' Other Comprehensive Income (Loss) | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (27,633) | (23,480) | (32,614) | (31,913) |
Other comprehensive income (loss) before reclassifications | 7,417 | (6,509) | 11,893 | 1,924 |
Amounts reclassified from AOCI | 152 | 657 | ||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 7,569 | (6,509) | 12,550 | 1,924 |
BALANCE | (20,064) | (29,989) | (20,064) | (29,989) |
Defined Benefit Pension and Postretirement Plans | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (150,882) | (167,274) | (152,058) | (167,667) |
Amounts reclassified from AOCI | 2,694 | 1,517 | 3,870 | 1,910 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 2,694 | 1,517 | 3,870 | 1,910 |
BALANCE | (148,188) | (165,757) | (148,188) | (165,757) |
Unrealized Gain (Loss) on Derivative Contracts | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (9,286) | (5,075) | (5,684) | (10,375) |
Other comprehensive income (loss) before reclassifications | (3,288) | (1,619) | (7,049) | 3,125 |
Amounts reclassified from AOCI | 1,148 | (183) | 1,307 | 373 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (2,140) | (1,802) | (5,742) | 3,498 |
BALANCE | (11,426) | (6,877) | (11,426) | (6,877) |
Unrealized Gain (Loss) on Available-for-Sale Securities | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (182) | (709) | (265) | |
Other comprehensive income (loss) before reclassifications | (89) | (13) | ||
Amounts reclassified from AOCI | (5) | 709 | 2 | |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (94) | 709 | (11) | |
BALANCE | (276) | (276) | ||
Accumulated Other Comprehensive Income (Loss), Net Attributable to Noncontrolling Interests | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (1,122) | (408) | (1,462) | (666) |
Other comprehensive income (loss) before reclassifications | (1,223) | (412) | (883) | (187) |
Amounts reclassified from AOCI | 6 | 39 | ||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (1,223) | (406) | (883) | (148) |
BALANCE | (2,345) | (814) | (2,345) | (814) |
Foreign Currency Translation Attributable to Noncontrolling Interests Attributable to Noncontrolling Interests | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (1,122) | (404) | (1,462) | (614) |
Other comprehensive income (loss) before reclassifications | (1,223) | (410) | (883) | (200) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | (1,223) | (410) | (883) | (200) |
BALANCE | $ (2,345) | (814) | $ (2,345) | (814) |
Unrealized Gain (Loss) on Derivative Contracts Attributable to Noncontrolling Interests | ||||
Changes in AOCI balances by component (after-tax) | ||||
BALANCE | (4) | (52) | ||
Other comprehensive income (loss) before reclassifications | (2) | 13 | ||
Amounts reclassified from AOCI | 6 | 39 | ||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $ 4 | $ 52 |
Other Comprehensive Income (L41
Other Comprehensive Income (Loss) - Significant Items Reclassified Out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Total cost of revenue | $ (4,673,644) | $ (4,684,116) | $ (9,439,619) | $ (9,370,020) |
Interest expense | (16,784) | (16,473) | (33,896) | (34,036) |
Corporate general and administrative expense | (17,776) | (47,315) | (75,047) | (92,363) |
Income tax benefit (expense) | (52,471) | 17,317 | (55,477) | 1,246 |
NET EARNINGS (LOSS) | 131,164 | (6,632) | 119,103 | 70,722 |
Net earnings attributable to noncontrolling interests | 16,332 | 17,393 | 21,861 | 34,136 |
NET EARNINGS (LOSS) ATTRIBUTABLE TO FLUOR CORPORATION | 114,832 | (24,025) | 97,242 | 36,586 |
Ownership Share of Equity Method Investees' Other Comprehensive Income (Loss) | Reclassified out of AOCI | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Total cost of revenue | (203) | (899) | ||
Income tax benefit | 51 | 242 | ||
Net of tax | (152) | (657) | ||
Defined Benefit Pension and Postretirement Plans | Reclassified out of AOCI | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Adjustments | (3,366) | (2,428) | (4,883) | (3,056) |
Income tax benefit | 672 | 911 | 1,013 | 1,146 |
Net of tax | (2,694) | (1,517) | (3,870) | (1,910) |
Unrealized Gain (Loss) on Derivative Contracts | Reclassified out of AOCI | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Income tax benefit (expense) | 603 | (116) | 650 | 227 |
NET EARNINGS (LOSS) | (1,148) | 177 | (1,307) | (412) |
Net earnings attributable to noncontrolling interests | (6) | (39) | ||
NET EARNINGS (LOSS) ATTRIBUTABLE TO FLUOR CORPORATION | (1,148) | 183 | (1,307) | (373) |
Unrealized Gain (Loss) on Derivative Contracts | Reclassified out of AOCI | Commodity contracts and foreign currency contracts | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Total cost of revenue | (1,332) | 713 | (1,118) | 200 |
Unrealized Gain (Loss) on Derivative Contracts | Reclassified out of AOCI | Interest rate contracts | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Interest expense | $ (419) | (420) | (839) | (839) |
Unrealized Gain (Loss) on Available-for-Sale Securities | Reclassified out of AOCI | ||||
Reclassifications out of accumulated other comprehensive income (loss) | ||||
Corporate general and administrative expense | 9 | (1,134) | (3) | |
Income tax benefit (expense) | (4) | 425 | 1 | |
NET EARNINGS (LOSS) | $ 5 | $ (709) | $ (2) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | |||||
U.S. corporate federal income tax rate | 21.00% | 35.00% | |||
Effective tax rate, continuing operations (as a percent) | 28.60% | 72.30% | 31.80% | (1.80%) |
Cash Paid for Interest and Ta43
Cash Paid for Interest and Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash paid during the year for: | ||
Interest | $ 36 | $ 36 |
Income taxes (net of refunds) | $ 42 | $ 159 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share | ||||
Net earnings (loss) attributable to Fluor Corporation | $ 114,832 | $ (24,025) | $ 97,242 | $ 36,586 |
Basic EPS attributable to Fluor Corporation: | ||||
Weighted average common shares outstanding (in shares) | 140,654 | 139,818 | 140,377 | 139,631 |
Basic earnings (loss) per share (in dollars per share) | $ 0.82 | $ (0.17) | $ 0.69 | $ 0.26 |
Diluted EPS attributable to Fluor Corporation: | ||||
Weighted average common shares outstanding (in shares) | 140,654 | 139,818 | 140,377 | 139,631 |
Diluted effect: | ||||
Employee stock options, restricted stock units and shares and Value Driver Incentive units (in shares) | 652 | 897 | 1,225 | |
Weighted average diluted shares outstanding (in shares) | 141,306 | 139,818 | 141,274 | 140,856 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.81 | $ (0.17) | $ 0.69 | $ 0.26 |
Anti-dilutive securities not included above (in shares) | 4,041 | 5,028 | 4,100 | 4,436 |
Earnings per Share - Employee s
Earnings per Share - Employee stock options, restricted stock units and value driver incentives (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share | ||||
Anti-dilutive securities not included above (in shares) | 4,041,000 | 5,028,000 | 4,100,000 | 4,436,000 |
Employee stock options, restricted stock units and shares, and Value Driver Incentive units | ||||
Earnings Per Share | ||||
Anti-dilutive securities not included above (in shares) | 936,000 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Fair value of assets and liabilities measured on recurring basis | |||||
Derivative assets | $ 13,269 | $ 13,269 | $ 25,139 | ||
Derivative liabilities | 23,755 | 23,755 | 27,700 | ||
Proceeds from sale and maturity of available-for-sale securities | |||||
Proceeds from the sales and maturities of available-for-sale securities | 0 | $ 19,000 | $ 175,000 | $ 44,000 | |
Marketable securities, available-for-sale | Minimum | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Debt securities maturity period | 1 year | ||||
Marketable securities, available-for-sale | Maximum | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Debt securities maturity period | 3 years | ||||
Fair Value, Measurements, Recurring | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Cash and cash equivalents | 1,301 | ||||
Marketable securities, current | 57,783 | ||||
Deferred compensation trusts | 25,064 | $ 25,064 | 23,256 | ||
Marketable securities, noncurrent | 113,622 | ||||
Fair Value, Measurements, Recurring | Money market funds | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Available-for-sale securities | 1,000 | ||||
Fair Value, Measurements, Recurring | U.S. agency securities | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Available-for-sale securities | 3,000 | ||||
Fair Value, Measurements, Recurring | U.S. Treasury securities | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Available-for-sale securities | 69,000 | ||||
Fair Value, Measurements, Recurring | Corporate debt securities | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Available-for-sale securities | 97,000 | ||||
Fair Value, Measurements, Recurring | Commercial paper | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Available-for-sale securities | 3,000 | ||||
Other-than-temporary impairment of available-for-sale securities | 0 | ||||
Fair Value, Measurements, Recurring | Foreign currency contracts | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Derivative assets | 16,817 | 16,817 | 29,766 | ||
Derivative liabilities | 23,801 | 23,801 | 29,127 | ||
Fair Value, Measurements, Recurring | Level 1 | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Cash and cash equivalents | 701 | ||||
Deferred compensation trusts | 25,064 | 25,064 | 23,256 | ||
Fair Value, Measurements, Recurring | Level 2 | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Cash and cash equivalents | 600 | ||||
Marketable securities, current | 57,783 | ||||
Marketable securities, noncurrent | 113,622 | ||||
Fair Value, Measurements, Recurring | Level 2 | Foreign currency contracts | |||||
Fair value of assets and liabilities measured on recurring basis | |||||
Derivative assets | 16,817 | 16,817 | 29,766 | ||
Derivative liabilities | $ 23,801 | $ 23,801 | $ 29,127 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Not Required to be Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2016 | Nov. 30, 2014 | Sep. 30, 2011 |
1.750% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Interest rate (as a percent) | 1.75% | 1.75% | 1.75% | ||
3.375% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Interest rate (as a percent) | 3.375% | 3.375% | 3.375% | ||
3.5% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Interest rate (as a percent) | 3.50% | 3.50% | 3.50% | ||
Carrying Value | Level 2 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Marketable securities, current | $ 101,124 | $ 103,351 | |||
Carrying Value | Level 2 | 1.750% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 580,814 | 597,674 | |||
Carrying Value | Level 2 | 3.375% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 497,282 | 496,859 | |||
Carrying Value | Level 2 | 3.5% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 493,800 | 493,320 | |||
Carrying Value | Level 2 | Commercial paper | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 49,902 | ||||
Carrying Value | Level 2 | Other borrowings, including noncurrent portion | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 34,133 | 31,106 | |||
Carrying Value | Level 3 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Notes receivable, including noncurrent portion | 35,027 | 26,006 | |||
Fair Value | Level 2 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Marketable securities, current | 101,124 | 103,351 | |||
Fair Value | Level 2 | 1.750% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 607,140 | 622,277 | |||
Fair Value | Level 2 | 3.375% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 500,200 | 512,475 | |||
Fair Value | Level 2 | 3.5% Senior Notes | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 488,615 | 513,480 | |||
Fair Value | Level 2 | Commercial paper | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 49,902 | ||||
Fair Value | Level 2 | Other borrowings, including noncurrent portion | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Debt | 34,133 | 31,106 | |||
Fair Value | Level 3 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Notes receivable, including noncurrent portion | 35,027 | 26,006 | |||
Bank deposits | Carrying Value | Level 1 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Cash and cash equivalents | 1,128,476 | 1,104,316 | |||
Bank deposits | Fair Value | Level 1 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Cash and cash equivalents | 1,128,476 | 1,104,316 | |||
Time deposits | Carrying Value | Level 2 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Cash and cash equivalents | 553,484 | 698,458 | |||
Time deposits | Fair Value | Level 2 | |||||
Estimated fair values of the company's financial instruments that are not measured at fair value on a recurring basis | |||||
Cash and cash equivalents | $ 553,484 | $ 698,458 |
Derivatives and Hedging - Notio
Derivatives and Hedging - Notional Amounts and Fair Values (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value | ||
Asset Derivatives | $ 13,269 | $ 25,139 |
Liability Derivatives | 23,755 | 27,700 |
Commodity contracts | ||
Derivatives, Fair Value | ||
Total gross notional amount | 0 | |
Foreign currency contracts | ||
Derivatives, Fair Value | ||
Total gross notional amount | 593,000 | |
Foreign currency contracts | Other current assets | ||
Derivatives, Fair Value | ||
Asset Derivatives | 10,395 | 18,667 |
Foreign currency contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Derivatives | 2,874 | 6,472 |
Foreign currency contracts | Other accrued liabilities | ||
Derivatives, Fair Value | ||
Liability Derivatives | 18,020 | 19,046 |
Foreign currency contracts | Noncurrent liabilities | ||
Derivatives, Fair Value | ||
Liability Derivatives | $ 5,735 | $ 8,654 |
Derivatives and Hedging - Gains
Derivatives and Hedging - Gains (Losses) Associated with Fair Value and Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) recognized in OCI | $ (3,288) | $ (1,619) | $ (7,049) | $ 3,125 |
After-tax amount of gain (loss) reclassified from AOCI into earnings | (1,148) | 183 | (1,307) | (373) |
Commodity contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) recognized in OCI | (11) | (8) | ||
Commodity contracts | Total cost of revenue | ||||
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) reclassified from AOCI into earnings | (2) | (36) | ||
Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) recognized in OCI | (3,288) | (1,608) | (7,049) | 3,133 |
Foreign currency contracts | Total cost of revenue | ||||
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) reclassified from AOCI into earnings | (886) | 447 | (783) | 187 |
Foreign currency contracts | Corporate general and administrative expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Pre-tax net gain associated with hedging instruments designated as fair value hedges, recognized in earnings | 1,200 | 0 | 4,100 | |
Interest rate contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) | ||||
After-tax amount of gain (loss) reclassified from AOCI into earnings | $ (262) | $ (262) | $ (524) | $ (524) |
Derivatives and Hedging - Deriv
Derivatives and Hedging - Derivative Contracts Not Designated as Hedging Instruments (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
Foreign currency contracts | ||
Derivatives | ||
Total gross notional amount | $ 593 | $ 593 |
Embedded derivatives | ||
Derivatives | ||
Total gross notional amount | 77 | 77 |
Embedded derivatives | Total cost of revenue | ||
Derivatives | ||
Net losses (gains) associated with derivative contracts | (0.5) | 0.7 |
Not designated as hedging instrument | Foreign currency contracts | ||
Derivatives | ||
Total gross notional amount | $ 51 | $ 51 |
Retirement Benefits (Details)
Retirement Benefits (Details) - Defined Benefit Pension Plans - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net periodic pension expense for defined benefit pension plans | ||||
Service cost | $ 4,537 | $ 4,519 | $ 9,208 | $ 8,913 |
Interest cost | 5,714 | 5,457 | 11,581 | 10,750 |
Expected return on assets | (9,978) | (9,893) | (20,234) | (19,484) |
Amortization of prior service credit | (236) | (203) | (479) | (398) |
Recognized net actuarial loss | 1,859 | 2,977 | 3,770 | 3,808 |
Loss on settlement | 1,893 | 1,893 | ||
Net periodic pension expense | 3,789 | $ 2,857 | 5,739 | $ 3,589 |
Company contributions | 9,000 | |||
Maximum | ||||
Net periodic pension expense for defined benefit pension plans | ||||
Expected contributions during 2018 | $ 45,000 | $ 45,000 |
Financing Arrangements - Credit
Financing Arrangements - Credit Facilities (Details) - 6 months ended Jun. 30, 2018 € in Millions, $ in Millions | USD ($) | EUR (€) | USD ($) |
Lines of credit | |||
Financing Arrangements | |||
Amount outstanding under credit facilities | $ 1,600 | ||
Committed credit line | Lines of credit | |||
Financing Arrangements | |||
Maximum borrowing capacity | 3,500 | ||
Committed credit line | Lines of credit | $1.7 billion Revolving Loan and Letter of Credit Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | 1,700 | ||
Maximum borrowing capacity additional amount, subject to certain conditions | $ 500 | ||
Committed credit line | Lines of credit | $1.7 billion Revolving Loan and Letter of Credit Facility | Maximum | |||
Financing Arrangements | |||
Ratio of consolidated debt to tangible net worth (as a percent) | 100.00% | ||
Committed credit line | Lines of credit | $1.7 billion Revolving Loan and Letter of Credit Facility | Maximum | Subsidiaries | |||
Financing Arrangements | |||
Aggregate amount of debt | € 750 | 750 | |
Committed credit line | Lines of credit | $1.8 billion Revolving Loan and Letter of Credit Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | 1,800 | ||
Maximum borrowing capacity additional amount, subject to certain conditions | $ 500 | ||
Committed credit line | Lines of credit | $1.8 billion Revolving Loan and Letter of Credit Facility | Maximum | |||
Financing Arrangements | |||
Ratio of consolidated debt to tangible net worth (as a percent) | 100.00% | ||
Aggregate amount of debt | € 750 | 750 | |
Committed credit line | Revolving Credit Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | $ 1,750 |
Financing Arrangements - Senior
Financing Arrangements - Senior notes and debt related to Stork (Details) $ in Millions | Mar. 01, 2016EUR (€) | Apr. 30, 2017 | Apr. 30, 2016EUR (€) | Mar. 31, 2016EUR (€) | Mar. 31, 2016USD ($) | Nov. 30, 2014USD ($) | Sep. 30, 2011USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
1.750% Senior Notes | |||||||||
Debt instruments | |||||||||
Debt issued | € | € 500,000,000 | ||||||||
Interest rate (as a percent) | 1.75% | 1.75% | 1.75% | ||||||
Proceeds from issuance of notes, net of underwriting discounts | € 497,000,000 | $ 551 | |||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
1.750% Senior Notes | Change of control triggering event | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 101.00% | ||||||||
1.750% Senior Notes | On or after December 21, 2022 | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
1.750% Senior Notes | Minimum | Prior to December 21, 2022 | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
3.5% Senior Notes | |||||||||
Debt instruments | |||||||||
Debt issued | $ 500 | ||||||||
Interest rate (as a percent) | 3.50% | 3.50% | 3.50% | ||||||
Proceeds from issuance of notes, net of underwriting discounts | $ 491 | ||||||||
3.5% Senior Notes | Change of control triggering event | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 101.00% | ||||||||
3.5% Senior Notes | On or after September 15, 2024 | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
3.5% Senior Notes | Minimum | Prior to September 15, 2024 | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
3.375% Senior Notes | |||||||||
Debt instruments | |||||||||
Debt issued | $ 500 | ||||||||
Interest rate (as a percent) | 3.375% | 3.375% | 3.375% | ||||||
Proceeds from issuance of notes, net of underwriting discounts | $ 492 | ||||||||
Redemption price at which debt may be redeemed (as a percent) | 100.00% | ||||||||
3.375% Senior Notes | Change of control triggering event | |||||||||
Debt instruments | |||||||||
Redemption price at which debt may be redeemed (as a percent) | 101.00% | ||||||||
Commercial paper | |||||||||
Debt instruments | |||||||||
Outstanding commercial paper | $ 50 | ||||||||
Weighted average interest rate | 2.43% | ||||||||
Lines of credit | Committed credit line | |||||||||
Debt instruments | |||||||||
Maximum borrowing capacity | $ 3,500 | ||||||||
Lines of credit | Committed credit line | Super Senior Revolving Credit Facility | |||||||||
Debt instruments | |||||||||
Repayment of outstanding borrowings | € | € 110,000,000 | ||||||||
Lines of credit | Committed credit line | April 2016 Revolving Credit Facility due April 2017 | |||||||||
Debt instruments | |||||||||
Maximum borrowing capacity | € | € 125,000,000 | ||||||||
Repayment of outstanding borrowings | $ 53 | ||||||||
Stork Holding B.V. | |||||||||
Debt instruments | |||||||||
Other borrowings | $ 34 | $ 31 | |||||||
Stork Holding B.V. | Super Senior Revolving Credit Facility | |||||||||
Debt instruments | |||||||||
Maximum borrowing capacity | € | € 110,000,000 | ||||||||
Euribor | Lines of credit | Committed credit line | April 2016 Revolving Credit Facility due April 2017 | |||||||||
Debt instruments | |||||||||
Margin added to variable rate (as a percent) | 0.75% | ||||||||
Euribor | Stork Holding B.V. | Super Senior Revolving Credit Facility | |||||||||
Debt instruments | |||||||||
Margin added to variable rate (as a percent) | 3.75% |
Stock-Based Plans (Details)
Stock-Based Plans (Details) - Executives - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Restricted stock units | ||
Stock-Based Plans | ||
Granted (in shares) | 603,111 | 402,783 |
Granted, weighted average grant date fair value (in dollars per share) | $ 57.88 | $ 52.57 |
Post-vest holding period | 3 years | 3 years |
Vesting period | 3 years | 3 years |
Stock Options | ||
Stock-Based Plans | ||
Options awarded (in shares) | 33,615 | 1,103,817 |
Options awarded, weighted average exercise price (in dollars per share) | $ 58.15 | $ 55.35 |
Vesting period | 3 years | 3 years |
Term of stock-based award | 10 years | 10 years |
Stock-based VDI units | ||
Stock-Based Plans | ||
Granted (in shares) | 206,598 | 249,204 |
Vesting period | 3 years | 3 years |
Stock-based VDI units | 2016 VDI Plan | ||
Stock-Based Plans | ||
Post-vest holding period | 3 years | |
Expected amount of shares granted (in shares) | 90,931 | |
Expected weighted average grant date fair value (in dollars per share) | $ 52.31 | |
Stock-based VDI units | 2017 VDI Plan | ||
Stock-Based Plans | ||
Post-vest holding period | 3 years | |
Expected amount of shares granted (in shares) | 72,601 | |
Expected weighted average grant date fair value (in dollars per share) | $ 56.30 | |
Stock-based VDI units | 2018 VDI Plan | ||
Stock-Based Plans | ||
Expected amount of shares granted (in shares) | 68,866 | |
Expected weighted average grant date fair value (in dollars per share) | $ 66.38 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Noncontrolling Interests | ||||
Net earnings attributable to noncontrolling interests | $ 16,332 | $ 17,393 | $ 21,861 | $ 34,136 |
Distributions paid to noncontrolling interests | 32,252 | 21,176 | ||
Income taxes attributable to noncontrolling interests | $ 2,300 | 2,700 | ||
Capital contributions by noncontrolling interests | $ 3,760 | $ 4,150 |
Contingencies and Commitments (
Contingencies and Commitments (Details) $ in Millions, $ in Millions | Dec. 13, 2016AUD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Contingencies and Commitments | |||
Damages sought | $ 1,470 | ||
Contracts receivable, claims and uncertain amounts | $ 132 | $ 124 | |
Amount of disputed back charges | $ 18 | $ 18 |
Guarantees (Details)
Guarantees (Details) $ in Billions | Jun. 30, 2018USD ($) |
Performance Guarantee | |
Guarantees | |
Estimated performance guarantees outstanding | $ 13 |
Partnerships and Joint Ventur58
Partnerships and Joint Ventures - Ownership and Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Partnership | Majority | ||
Variable interest entity information | ||
Entity's interest in partnership or joint venture (as a percent) | 50.00% | |
Joint ventures | Majority | ||
Variable interest entity information | ||
Entity's interest in partnership or joint venture (as a percent) | 50.00% | |
Unconsolidated variable interest entities | Accounts and notes receivable, net | ||
Variable interest entity information | ||
Receivables related to work performed for unconsolidated partnerships and joint ventures | $ 116 | $ 83 |
Notes receivable | $ 33 | |
Unconsolidated variable interest entities | Other assets | ||
Variable interest entity information | ||
Notes receivable | $ 22 |
Partnerships and Joint Ventur59
Partnerships and Joint Ventures - Unconsolidated Partnerships and Joint Ventures and Equity Method Investments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Partnerships and Joint Ventures | ||
Investments in unconsolidated partnerships and joint ventures under equity method | $ 866 | $ 830 |
Partnerships and Joint Ventur60
Partnerships and Joint Ventures - Joint Venture Investment Agreement (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2017USD ($)company | Jun. 30, 2018USD ($) | |
COOEC Fluor Heavy Industries Co., Ltd. | ||
Commitments | ||
Cash investment in joint venture | $ 26 | |
Ownership interest in joint venture (as a percent) | 49.00% | |
Offshore Oil Engineering Co., Ltd. | COOEC Fluor Heavy Industries Co., Ltd. | ||
Commitments | ||
Ownership interest in joint venture (as a percent) | 51.00% | |
COOEC Fluor Heavy Industries Co., Ltd. | ||
Commitments | ||
Number of parties to joint venture | company | 2 | |
Commitment amount | $ 52 |
Partnerships and Joint Ventur61
Partnerships and Joint Ventures - Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Unconsolidated variable interest entities | ||
Variable interest entity information | ||
Net carrying value of the unconsolidated VIEs | $ 252 | $ 216 |
Unconsolidated variable interest entities | Future funding commitment | ||
Variable interest entity information | ||
Commitment amount | 65 | |
Consolidated variable interest entities | ||
Variable interest entity information | ||
Carrying value of assets | 1,300 | 1,200 |
Carrying value of liabilities | $ 909 | $ 700 |
Operating Information by Segm62
Operating Information by Segment - Reportable Segments (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Operating Information by Segment | |
Number of reportable segments | 4 |
Operating Information by Segm63
Operating Information by Segment - External Revenue and Segment Profit (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
External revenue | ||||
Revenues | $ 4,883,796 | $ 4,716,092 | $ 9,707,566 | $ 9,551,997 |
Reportable segments | ||||
Segment Profit (Loss) | ||||
Segment Profit (Loss) | 193,800 | 14,600 | 246,100 | 147,900 |
Energy & Chemicals | ||||
External revenue | ||||
Revenues | 2,014,500 | 2,150,100 | 3,957,500 | 4,278,700 |
Energy & Chemicals | Reportable segments | ||||
Segment Profit (Loss) | ||||
Segment Profit (Loss) | 97,200 | 123,600 | 202,900 | 208,000 |
Mining, Industrial, Infrastructure & Power | ||||
External revenue | ||||
Revenues | 1,339,500 | 1,180,400 | 2,249,800 | 2,553,300 |
Mining, Industrial, Infrastructure & Power | Reportable segments | ||||
Segment Profit (Loss) | ||||
Segment Profit (Loss) | 16,400 | (165,000) | (127,700) | (167,800) |
Government | ||||
External revenue | ||||
Revenues | 863,400 | 744,200 | 2,190,600 | 1,509,400 |
Government | Reportable segments | ||||
Segment Profit (Loss) | ||||
Segment Profit (Loss) | 51,400 | 19,700 | 123,300 | 48,700 |
Diversified Services | ||||
External revenue | ||||
Revenues | 666,400 | 641,400 | 1,309,700 | 1,210,600 |
Diversified Services | Reportable segments | ||||
Segment Profit (Loss) | ||||
Segment Profit (Loss) | 28,800 | 36,300 | 47,600 | 59,000 |
Diversified Services | Intercompany | ||||
External revenue | ||||
Revenues | $ 111,000 | $ 155,000 | $ 240,000 | $ 301,000 |
Operating Information by Segm64
Operating Information by Segment - Additional Operating Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Nu Scale Power | U.S. Department of Energy | ||||
Segment reporting information | ||||
Reimbursement Percentage (as a percent) | 43.00% | |||
Energy & Chemicals | ||||
Segment reporting information | ||||
Effect of forecast revision on estimated project cost | $ 67 | $ 67 | ||
Effect of forecast revision on estimated project cost, in dollars per diluted share | $ 0.47 | $ 0.47 | ||
Mining, Industrial, Infrastructure & Power | ||||
Segment reporting information | ||||
Effect of forecast revision on estimated project cost | $ 16 | $ 194 | $ 142 | $ 219 |
Effect of forecast revision on estimated project cost, in dollars per diluted share | $ 0.09 | $ 0.89 | $ 0.77 | $ 0.99 |
Reportable segments | Mining, Industrial, Infrastructure & Power | Nu Scale Power | U.S. Department of Energy | ||||
Segment reporting information | ||||
Qualified expenses reimbursed | $ 40 | |||
Reportable segments | Mining, Industrial, Infrastructure & Power | Nu Scale Power | Cost-sharing agreement, research and development activities | U.S. Department of Energy | Total cost of revenue | ||||
Segment reporting information | ||||
Research and development expense | $ 24 | $ 17 | 47 | $ 33 |
Qualified reimbursable and deferred expenses | $ 12 | $ 10 | $ 27 | $ 20 |
Operating Information by Segm65
Operating Information by Segment - Reconciliation to Consolidated Amounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation of total segment profit to earnings (loss) before taxes | ||||
Corporate general and administrative expense | $ (17,776) | $ (47,315) | $ (75,047) | $ (92,363) |
Earnings attributable to noncontrolling interests | (16,332) | (17,393) | (21,861) | (34,136) |
EARNINGS (LOSS) BEFORE TAXES | 183,635 | (23,949) | 174,580 | 69,476 |
Reportable segments | ||||
Reconciliation of total segment profit to earnings (loss) before taxes | ||||
Total segment profit | 193,800 | 14,600 | 246,100 | 147,900 |
Corporate general and administrative expense | (17,800) | (47,300) | (75,000) | (92,400) |
Interest income (expense), net | (8,700) | (8,600) | (18,300) | (20,100) |
Earnings attributable to noncontrolling interests | 16,300 | 17,400 | 21,800 | 34,100 |
EARNINGS (LOSS) BEFORE TAXES | $ 183,600 | $ (23,900) | $ 174,600 | $ 69,500 |
Operating Information by Segm66
Operating Information by Segment - Total Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Segment reporting information | ||
Total assets | $ 9,119,217 | $ 9,327,692 |
Reportable segments | Energy & Chemicals | ||
Segment reporting information | ||
Total assets | 1,602,400 | 1,674,200 |
Reportable segments | Mining, Industrial, Infrastructure & Power | ||
Segment reporting information | ||
Total assets | 1,054,700 | 1,067,300 |
Reportable segments | Government | ||
Segment reporting information | ||
Total assets | 1,023,100 | 732,000 |
Reportable segments | Diversified Services | ||
Segment reporting information | ||
Total assets | $ 1,957,400 | $ 2,120,400 |
Operating Information by Segm67
Operating Information by Segment - Subcontracts (Details) - Mining, Industrial, Infrastructure & Power $ in Millions | Jun. 30, 2018USD ($)item |
Westinghouse | |
Segment reporting information | |
Number Of Subcontracts | item | 2 |
V.C. Summer | |
Segment reporting information | |
Accounts receivable | $ 66 |
Plant Vogtle | |
Segment reporting information | |
Accounts receivable | $ 2 |