FLR - Earnings call transcript Q1 2018

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Operator

Good afternoon and welcome to the Fluor Corporation's First Quarter 2018 Conference Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow management's presentation. A replay of today's conference will be available at approximately 8:30 P.M. on at accessible today, Time Fluor's investor.fluor.com. website Eastern available days. web replay XX be will The for replay also telephone A will X:XX P.M. be available through Time XXXXXXX at the Eastern XX, telephone May XXX-XXX-XXXX, number, the pass be will following of required. code on I At like the Telfer, Vice to Geoff Relations. Investor would President this to opening of over turn for Senior time, remarks, call Please go ahead, Mr. Telfer.

Geoff Telfer

Officer; Fluor's Seaton, Thank With us call. Financial quarter XXXX Fluor's and you, Chairman conference Ashley, Stanski, and welcome to and Chief Officer. Executive are Chief Fluor's David Bruce first today

Our earnings summarized Harbor this I'd we started, remarks. released regarding note slide our slide was closed, prepared and afternoon which getting Safe X. which market announcement presentation like forward-looking statements, after to we will website, on a making before the reference refer while have is you posted But our on to

today's statements, forward-looking trends be and which of slide information. reflect During presentation, existing we'll analysis and current making call our

materially. is actual the an inherent that However, there risk could results differ

of which a filed can risk in our today company's Form February could such to Form our differences and XX. You potentially earlier filed XX-Q contribute on the find discussion XX-K factors,

reflected with today's financial measures. amounts website our certain call, discuss GAAP and the in earnings our non-GAAP comparable Relations we measures these of During section of release Reconciliations may are posted in Investor also the at investor.fluor.com.

Fluor's CEO. David? and Chairman me let Seaton, over the turn David Now to call

David T. Seaton

us. you, everyone. Geoff, joining you Thank and afternoon, good for Thank

estimating year. expectations in original different the made in challenges to the project materially specific taking by Fluor's the we steps on initial discussing power this and and we we charge than baseline productivity market. the last Craft the this start Let's project in quarter gas-fired project participation complete the and end experiencing last were off that are on discussed same we're

has available were power current financial taken low relative million While this driven majority and on impact included ongoing productivity the the production quarter the charge, the this of two expected outlook. initial initial for extremely in timing based charge would of that factors when our be to is the those $XXX by units the

power the that for and okay As per the kilowatt, no some to we expected I lower to it the using completion start is of our This virtually costs power to one one The that delivered consistent X%. that gas-fired for The close process than regional that rate than in to number less producers opportunities are the everyone power U.S. our consumption of market certain need have is in needs. to our August outcome power new of do attention. the industry, you I'm with determine Last that we Charlotte. risk-adjusted this to believe long-term the last value. XX% that say also in changes complete, number downward to negotiate of figure, the Power going were excuse in our the approximately QX share assessing contractor $XXX expectations our willing clients community with executives gas-fired a pay although review leadership, included led entire actions and made capacity not satisfying and Fluor this We, business. of is week, E&C an with to to always other there some operation project date really that if customers bringing are has returns year. like office removing I'd project and at and stated ask experience. taking. are included. justify there's we a closing further growth additional win,

current as-sold XX and expectation both underperformed suffering private, had no experiences XXXX. our XX since the performing have projects power similar public have as losses. with gas-fired XX had three have expected. with We of Competition, projects

they but outcomes. projects, case, cutter machines, from cookie are labor, of been Craft these produce site gas-fired These has all different in are think projects of pursuit lump-sum discontinue QX. major end pools, which market have the different power the different of labor different not. Therefore, will leaders Fluor the this locations, industry Some issue.

the commitments. finish will existing We and projects our fulfill

However, exiting the market. we are not entire power

power which environmental nuclear. includes turnarounds as Our services robust very maintenance, upgrades and and renewables well focus also as shutdowns, we will business, are on

resources, expectations. other on We to support both margin will focus use human, our markets to our financial end and

the complete. continue will investment this community last to We until is on discontinued update the business project

and $XX.X new review quarter slide The let's highlights, segment Chemicals quarter $XXX backlog for first Energy our X. awards in which was billion. on Now, begins booked million ending the & segment

During to quarter, MEGlobal's years. with capabilities we This construction the major over new monoethylene Coast the Freeport, fifth six Gulf our facility. the in continued glycol in of construction the grow last represents self-performed project Texas our award

a and is XXX modules COOEC-Fluor steel two that project The loaded piping out. pipe opened X,XXX for yard major to workload onshore than April facilities more in of assembly for than underway and more Our offshore large support yard and very module now workers achieved first right craft module the onshore project. with with has active milestone site. painting the and fabrication a The new yard recently being and projects on

pay of to solutions now Our is our in this yard beginning a investment model fab integrated is dividends. part major that

and see XXXX. prospects Other of the and as and additional opportunities XXXX. tracking chemical with investment This additional our the you announcement final key are year saw continue derivative refining is Last Canada one upstream the energy reach move and venture domestically to expected joint indications for decision project market project late include this opportunities, that into LNG is both LNG to partner opportunities week, we our We see we for turning. international, JGC. we

federal awards segment continue First enthusiasm States, tempered were bit great copper, replacement In long-term copper in wait this projects. was quarter and has my large segment, infrastructure as see backlog the a Mining, opportunities $X.X bill. Infrastructure $XX.X but in opportunities Infrastructure Power expansion in we ending in some we & gold and ore a iron for The a Peru. Industrial, included has billion new to project United mine billion.

informed progress, one the the with or the application on provided the for NuScale schedule. change. has and completed questions clarification have of that on and proceeding confirmed review any Our essentially that NRC ahead recently application This the NRC NuScale's requiring phase items process. were or the NRC means is NRC reviewed review we the continued of

for of selected Department from expect the this was will And of development cost-sharing investors. the last Energy. SMR NuScale passing We receive that attract additional milestone to funds additional week,

posted backlog billion. of X, Group Turning an to ending first million slide with quarter awards $X.X the $XX Government of new

the substantially in very few Engineers to our by we quarter just Army work Puerto very a and what I'm of Rico completed This power months. Corps were pleased able we with in short restoration accomplish

as growth. XXXX conversations with first quarter about to with on are by quarter expectation new growth awards we spending. projects going clients orders of charges were my with Latin the Hanford of and at And V the to recently of and project, our encouraged and an informed prospects operation are XXXX projects. the economic remain reflect from of future. see this as Savannah clients. maintenance work a backlog billion. in $XXX posted of many our well beginning increase we America. meet in Plant by their We for had LOGCAP million been am the outside be to our disappointment has customers of at multiyear the performance opportunities our acceptance and the power ending approach of that also upturn clients. the quarter liquid that America I'm pursuing this the needs Stork closing, segment enthusiastic growing $X.X the Results pleased my I'm Looking July is sizable In full for their and well-positioned the extended of River to taking by Services Diversified I we balance the that waste until North encouraged and multi-market, are advantage of solutions a our integrated our are and

I'll Bruce. to Now, it turn Bruce? over

Bruce A. Stanski

turn then sheet. Puerto quarter I'll Government Rico. income highlighting Thanks, the the billion Revenue everyone. presentation. $X.X start Please by on items last the to balance improved good for declines of pound slide to David, X million related our compared $X was Revenue was the compared in to $XX first for quarter. move It and quarter. by million slightly currency and the billion some Expenses fluctuations driven statement in last G&A foreign offset quarter $XX million in to for due the $XX losses other exclude was to expense Corporate to segments. you quarter by exchange sterling. when improved afternoon, primarily

our a project our well million, non-recurring foreign attributable rate to power in as level of related mentioned was a loss at to derivative net of guidance joint course Results $XX that project. losses combined call, over corporate as Puerto which and the venture our embedded $X.XX share. $X.XX. of a the Fluor may reform tax partner and hurricane-related the quarter in receive paint drying impact include reported for work with per we as gas-fired the the on In vary that I last previously the additional currency related tax $X.XX diluted or Rico, noted charge for for quarter, an we still to a Mexico $X.XX the contributed For XXXX.

the earnings domestically. QX of XXXX the tax amount XX% adopted, generated under reflection represent of results that project, power the States XX-Q. still have our large charge retrospective rate recognition have While see the a higher-than-planned in would the a we lower-than-anticipated higher our excluding published results that reconciliation United quarter. is to method standard. results tax the case, revenue in about rate, and new can the Under the jurisdictions our This of tax first is outside been for revenue of the these standard old of you

mix of timing, minimal projects. for due For new progress and the was the quarter, impact to affected standard the

for cash from see more $X.X X, job. approximately billion, of Available associated modest generate Government quarter-end been which has slide The reflects impact balance. this year. good cash this on $XXX last Relative for to of fund securities remaining cash example balances the quarter were plus million, working to expect higher project the restoration of to domestic in approximately in as securities for for to earnings U.S. the at on noncurrent marketable balance increased the cash generating quarter by cash, capital expected the and businesses. We cash results the was current for marketable cash, need Puerto Army required $X.X albeit Corps the quarter. domestic primarily increased to reduction our is earnings Group power project Fluor's and Current sheet billion down our XX% complete needs in strong Rico. assets a positive Shifting total and much with the Engineers was the

$XXX is We expect infrastructure quarter capital activities projects opportunities. also that have a cash million to support of utilized primarily the future to the build only from for PX not time result as but Puerto this balance by Cash initial over demands needs operating Rico.

During the dividends. we in paid million $XX quarter,

ending were and mix Moving XX% X, for the contracts billion. and our XX% to of and geography slide U.S. XX% quarter $X.X new $XX Approximately was backlog backlog the is awards predominantly fixed-price is non-U.S. billion by

out our of starting to Industrial, that Infrastructure Power these in into business our Lastly, point reporting being want to business QX now our align have Mining we better how I segments segment are managed. moved XXXX, external with &

posted the quarter, by on reporting past Fact on segment Investors XXXX, I this commenting the my conclude the X. under recast website which our is Book section of guidance have which We new our two slide for remarks information on years will for structure. for our includes

guidance earnings XXXX our diluted $X.XX $X.XX per to $X.XX share diluted revising share. are $X.XX from per range to to We

and also for NuScale of to take resolved. X.X% reflects X.X% foreign much We impact XX%. range, assumes XX% X% Infrastructure be quarter, and X% losses more $XX higher a the revenue G&A modest Services result the guidance exchange This bit X%. funding, & losses new be U.S. of the expected in has With recognition the expenses contribution excluding guidance to average Our exchange reform standard government range, margins expense gas-fired the be quarter, million gains and operator, X.X% now to per for were which a a to in the to the of Mining, Chemicals are delay around NuScale, to & to Government in tax a Diversified ready from than of in anticipate foreign charge Energy expected. as X% remainder $XX we're been we tax million a approximately of to that, XXXX Industrial, quarter be Power, of approximately excluding of rate in or any Expenses Group XXXX. power to impact impact this questions. be to to and the X.X% the

Operator

Thank you with question Fisher from is Steven first And our UBS.

Steven Fisher

things project just self-perform the it Thanks. more that had you've craft me troubles activity. is the the about guess, moving the even assessing productivity in challenge more craft you're power like of Good right I you're because into that where be of charges reliant the and type the – troubling afternoon. construction going area of that it's forecasting one to on seems

bigger So, really exposure how that is comfortable strategy? that should all investable the some with I fixed-price of guess, craft investors taking get a on projects good

David T. Seaton

is That's a you. I a couple of But what's points this is than one of one good this on. at X,XXX question, and Look, that mentioned in Steve. mad construction you how we I tragic point This we is key going is projects to want project in no difficult. projects Thank want we here. excellence. understand with Florida. to execute about challenged as execute is, we of I more Being am One being cases. Freeport those the of executed kind to in And able time. bring given where of the excellence is it State that have talent I with any the is,

to that people XX% taking bad lower of that bad are right associated fact when don't want in to we're a the particular into I it's at be account now, can also lot you a much we a a think case, with Where productivity factors. project. complete, project, look

what what needs forward that we risk this the there's in and Given feel took we answer fixed-price comment have don't the inherent I'll it finish can going our schedule customer, is. think contrast that we good that construction. and quarter. I the of an for we

in example. associated as the I regional and is project think Canada use particular the we approach risk with the the an for project, LNG

our different competition both productivity off our is was environment labor is perspective. into of we it where in approach from controlled fabrication site Our and from that took yard amount in that safety of perspective significant and a than a a a

based better. get our lump-sum swallow that went, other I future it goes very approach that a the solutions, it's to real and a on to that that projects the while the some one delivers and as think where this our are for for in and Whereas this And is expected the new able are areas fact we hard bad exercising think this goes an don't I a that profit sure statement are and the to I guarantee projects being in expected when integrated I got execution large craft or to an you and hard us. understand, to know had project is cannot I projects we've is performing places guys that, about bad. performance certain past. have of in we performing exposure projects, project am for Kuwait way that well anomaly. So in we the lessen the on understand delivers the this are flaw confident people that one that part fatal when these hard it's system. We've the approach And make of client to and very

Steven Fisher

to get a Is contracting And customer could extent finding that are decisions is customer or of Okay. lump-sum we on that so project? what to customers to are And moves That's at saying, CapEx, I can project helpful. structure little back taking forward? curious firm if the we'd you're you give that out, related to you bit that contract? And on Shell, just more fixed-price your talk forward then, just broadly broadening the that on confidence happening? kind go then point. the risk is about guess, hey, a And moving EPC I'm what us it holding just this

David T. Seaton

think happening. a I of little Well, there's that bit

him can I right that confidence our think the specifically team the and together. in in people great have managed numbers estimate, you, the I Brittain question there is that whether development I to the putting are that. case, in and pulled do Jim that tell of

got but case terms power that, the ratios In that the taking we coverage tell on are there's it these that risk, expect. of people we're taking a don't as expect other lot the of project. a I games win we per-kilowatt we do of said, can I that we're you're did, to that cost, not roped projects, interested with price, the if And and into you going not just you would like So we that kind saying in those playing in, anymore.

It's as great of that confidence a procured, strategy look in The do Canada, funded different at our look out have we do solution would look The in we level they is when a that on this. partners that When Shell's integrated confidence think to will this give It's achieved at you basis. – equipment suggest me being high evidence China. gas, in pulled on this you the together utilizing well I being bid approach. two our year. potential at work. final the is can place the know bid that year. how BC know I So model, FID when be this project business was FID to that we It's utilizing there's around refinery in bid yard it, how project, Kuwait a how bought probability and we that, a high we projects understand I this that it

Steven Fisher

craft And productivity be just to labor will risk? your on this clarify, project the

David T. Seaton

Which project?

Steven Fisher

LNG Canada.

David T. Seaton

be. will it Yes,

Steven Fisher

Okay. Thanks, Appreciate color. the David.

David T. Seaton

Thanks, Steve.

Operator

gas-fired on Hi. the a Credit Cook to you're business, we've million you power, about power charges to side? Jamie the in do – $XXX Suisse in with - being but industry how players Credit one Understanding E&C couple be past And years the so. taken charges also Because, (USA) question of we our took L. biggest Securities the Suisse. the terms or an Steve. next about leader LLC being leadership just energy the I of Jamie industry proactive probably follow-up question comes in think industry, over Cook from exiting even in more guess, of totaling fair,

ever contractors bankruptcy? you've as change can for players understanding my the the you're other of verge then in your LNG your from what of trying on concerning with the why approach had leader you a solutions industry with will LNG that – to us not that have second risk your the a the and charges integrated model question, solutions such Canada's different industry on with using of you using approach should So, do you an you integrated that we're size large taking peers and a some with model have project saying Canada, be that to delivered project? and this And be your on

David T. Seaton

And Well, you. the is project, look projects when billion best of agree of the with a that. or you those in large two when look specifically, But cases, model you total it – piece $X is probably $X the in Jamie, billion. at value our I at they're Kuwait

bigger Well, done tell can So systems, know think up. that think, I but using I done number. that I haven't yeah, anybody's and the a tools you we I it. it's back a let don't – fact our large project me actually in

broke back mentioned of E&C, you in terms it's and If and CPChem, we we really one, go lessons projects that learned. the and it's you in down several

market lump-sum part we're issues in there bidding business. had completion. well as And and bid bid Program didn't issues of we driven projects They have Al-Zour Kuwait. our coverage covered had, expect done of as on at that Clean we've nearing all down those of by are those you of were project has kind the weren't led which project of the solutions plant, CFP that the learnings projects of loss. process and the you that we things is it into applied power ratios broke in and that project, and expected we're a our challenges, those But a just the that results and approach. the We one. as lessons the and the prior the it's off And modular risk to schedule one our Learning question, tell power month the we can those is from it learned bigger flaws terms above LNG the of one in But not CPChem on project but of And case utilizing relative integrated journey to of module approach learned case, and of module appreciate. these the was you Now properly it's issues fatal those execution a it's even I were maturation we Fuels as-sold far lessons there I'm the We profitability use quite expectations. And third to for and client we on, just that that tell the looked that And in E&C projects. job with pleased as you in first And approach, to we bettered of that all you that the there able to as sail that saw and pleased is can about stick-built to tell And along. Jamie, that requirements which going a cost I mean, we you partners Kuwait. that project the out. applied Steve's that meeting meeting had to as situation back very project. the has those can our site. a the of the yard last Canada. we're craft the from customer can I I take it's because were application basically China expectation

the differently. Cook your project LLC understand companies greater L. on Securities you I that risk. at... bankrupt think going taking business to for again, capital Suisse drive and you But I you - because Credit allow model your and will they're So, Jamie understand efficiency clients guess, allow look are you to shifted I that this and (USA) handle you've

conversations we won't with – changing So you're this are saying customers are that I anymore or the in or changing your do anymore? do won't you this

David T. Seaton

Securities Jamie Credit just know, I'm about Suisse but I one L. LLC talking said of the Cook that said Well, energy. (USA) power Jamie. I market. just about I that, - segment

David T. Seaton

these conversations and having in are gas. oil We

are through cases, see We And will try no. continuing Customers the to rate we In risk. a dialogue. win saying meet XXXX. change approach. are to go is approach only our coverage we're going shed projects of satisfied in expected our to I'm the And with utilizing as drop to win ratios solutions win the that integrated we're rate XXXX lot and that drop starting I already because that and

cash Jamie sorry So, dialogue the Rico. changing. Cook the talked LLC working Can helpful. Credit Thank Securities just I And then Okay. think with quarter year? follow-up capital flow you context Puerto you color. and question you. how the cash how yeah, the then broadly Suisse - back about I'll how a And Puerto about flow how queue. we in some on is L. appreciate provide on was the do cash to about think (USA) just That's for and Bruce. much for the Bruce, get associated the drag quarter, Rico – just in this

Bruce A. Stanski

guidance U.S. – of Puerto and because in all kind kind the first I – cash, this just it U.S. domestic provided on and call draw total is of what about all why our that cash we time primarily cash about marketable all in in some Rico. it securities of that's And domestic for this Jamie. Sure, was quarter cash was percentage

paid. recognized fund don't that back quickly can in the out cash sent the back receivables quarter after the and As up capital, that very Government had that get imagine, been quarter. Group, money We for this that don't with job you has to and are working and until earnings but get money the but we ramped coming

cash why and U.S. win that that's any cash - Securities Okay. year. We to is on to have to you think But just cash net about L. a U.S.-based for cash that really wanted timing about capital event. the to concentrate other build easily we're Cook relative accessible to (USA) very is So to continuing need year income LLC for projects important we emphasize Suisse for to Jamie think other flow as just us working might this this balance. going way projects I'm trying the is needs? that think flow there – Credit

Bruce A. Stanski

up mean, cash so sure. we and in the and these up the flow have in our the ramp working cash I our up, where start We to effect that time Well, stack locales with project ebb occur wins also capital FIDs enough and it's our we keep future see to to on here. the start and we in far Cook a working a as go-forward customers target Thank appreciate balance, more go the pull or L. I going Okay. make I'll back But programs with it. Suisse $X.X Jamie as forward. - Securities they on trigger get the capital LLC (USA) billion Credit us we're basis. as you. queue. especially to

Operator

And is Citi. with Andrew Kaplowitz from our next question

David T. Seaton

operator, Sorry, we can't you. hear

Andrew Kaplowitz

It's Can you Kaplowitz. How Good afternoon. you? Andy are hear me?

David T. Seaton

are you How Andy. Hi, doing?

Andrew Kaplowitz

Good.

well, David, done project power So, the XX% is you said.

the done. could ilk, to can they that in Is the invest right? I assure one quarters the think investors about you else there do of projects probably for you same level same do anything And more Anything I it's every Shouldn't couple the the are week next have you saying problem think that? more projects Fluor it. project the in until of in done? do? embassy in the project to end really backlog Can on do that? you he going was day back I his Alan Beckman visit toward can you remember

David T. Seaton

sure the that, of not Andy. last heard I part I'm

kind out a You just bit. little broke of

about... talking You're

Andrew Kaplowitz

was that projects it projects, it's visit he to said his Alan yeah, – something XXXX problem Beckman like just age, embassy done. going had the was or I every said go in back So – showing week that, until literally but I'm my I think

you question, invest So, in as Fluor projects always would a till CEO, what get are done. more How can the can David? you I these we that? Like, do, problem answer

David T. Seaton

the year. in been the I Yeah. even on And within personally I resources the of wrote in as productivity we directed have am this say but I to complete different we confident, mean, I number there. project And well. ability And twice setting project down. to that abysmal number hate the this I've an rate site look, used

to we'll I have able be that So finish. confidence

turn than X to an over As on been. Unit systems you think We're will easier be said, I we're finish high to Unit has XXs X. X, Unit starting customer the percentage.

is pretty to good job those I'm of the routine now. kind going this not this in have to of It to project. And I to same feel they on basis Virginia taken is With the I but going progress already there going making to I'm say relative completion to better guys So be yes, other one be very – and going about well. project team regard make. I'm the And hell that that's have be the review a and percentage. there of craft managing is I'm and it, personal every week, it's in that going a need a done the to

I be feel And good what mean, have project. I this team and things boss that. bad, I and finish when that project is has yeah, go will But got been as the be there, I about to that we very doing. So get and

Andrew Kaplowitz

year. the below That's the at of and at the least is look, guidance in our the we the helpful, But they're look rest Okay. David. segments, And for it expectations if a quarter, the then, rest power of little is. what the project below

the there (XX:XX) see but So, I'm much don't to bit forward. performance low look, E&C, maintenance, want I at for sure a It's I quarter, you've step-up going about there margin visibility little the into read if modeled is of why and got in quarter. not the hard margin too one just a maybe to talk – look

David T. Seaton

new for that, Well quarters, in think we've that we it award the we terms previous think bottom. I talked in as about think see And I been looking production. of I

it be on back we great again. in that's And is in second this South some it'll loaded still and what I It's better, will coming to of year. gas, America, of year. be primarily another it's is quarter mining the copper. be, sub the think lot think But of might on refining, it work be – in this backend year it'll There's the be heavily petrochemicals, towards sector, think I Australia LNG. but the going XXXX

multiyear I've upturn. as the think, prepared in I think I in a So remarks, said we're multi-industry

realize particular that of this about in angry as and So us. you quarter, takes the am front excited what's to about credibility I as investors. I And as tell I'm got with this disappointing I hit pretty

that got we're finish. going think I We we think don't time left to have I to it. much And finish.

said, margin ago. that So relative that put put I've quality risk-adjusted of the we've solutions what the projects the seen we've in and the integrated as bottom is better better backlog four the years I power than backlog believe we've to coverage in a the with

Andrew Kaplowitz

So, a Bruce. for clarification just quick

number that and $X.XX $X.XX I Is $X.XX that between charge it, half of the of missing or from plus I lowered you call difference is am half rec more of got FX. something? quarter difference said that than a the You've a tax, little your now, it the in is rest lower guess, your guidance. lower last rev or

Bruce A. Stanski

I time and that that lower. significantly Andy, anything, the for missing expect exact to tax of we're The included, actually gave not rec. with and $X.XX you're be Well, amount I of both to would $X.XX about the rev range be that rev associated last said range decrementing we for quarter two-thirds rec

If you to only rec little what, our $X over the at earnings accretive quarter rev million, $X.X Q, was by, in million. look

X.X still do to that. which more you come years. And expected the we remarks, going our said being we it. about and in I is than we last world lot correct. over and these that's believe and much that to it of all timing thought earnings, number the and mix that year. how are could progress have whole is around timing total this total The rec on what's We has a calculated. see retained or prepared why my jobs in It's actually rev of more that's again, And the be in the We the million, $XXX prudent here what would quarter X impact that as

Andrew Kaplowitz

Thanks, guys.

David T. Seaton

you Thank

Operator

Jerry And our next Goldman Revich with is question Sachs. from

Jerry Revich

evening. Hi, Yes. good

David T. Seaton

Jerry. Hi,

Jerry Revich

greenfield cycle David, about think see you book terms of we've of meaningful greenfields you portion mining had greenfield there? you in pipeline. do more Fluor versus can do you we the so on booked like could pickup expansions for standards the meaningful to when folks? see mid-sized Obviously, see When in based where of project and talk award far the by you terms expect a

David T. Seaton

the and copper, of they're billion just near you're in projects lot billion harder yet. think probably a and see a see wouldn't seeing our there pursuing. But really in the kind over to is when you I the are a got going in and some as of or going to But in think be terms to going don't to to What and very big I the see replacement to new right that $XX going cycle, tail capacity process gold. of we're of I I capacity, lot mines replacement processing capacity, upgrades, next ores, greenfield. But this I to real stuff which in ore think large But in new – right think type that I while venture I kind a next iron guess don't degree term before large lesser mean, coming see about even years. three that a up two-and-a-half projects of $X you're excess a is of on. ramping long up we're we've deeper now projects a or it's projects. are talked that for there's we're there's while. facilities of on so terms we've the two award, alleyway two

Jerry Revich

the would what activity? terms characterize that year how XXXX be the you How cadence cadence David, awarded the you would awards of maybe versus to And, look event? this what does XXXX of or of in expect new

David T. Seaton

the I use guess, word I'd steady.

lot projects. and within something stayed I done frontends over these to these this a customers pretty that the develop cycle good size them and to work to eight close We've mining very sector. studies leading on up going you're think and really next to help of quarters, see six

think I flow. to going think where a offering. eight have see I you're six at go that outstanding quarters, So, And to pretty that differentiated we the which said, looking we want I team's done like of an really to a next, award get, over job projects steady new

Jerry Revich

facilities your scope LNG at the fabrication on a David, to that's how and done hours based fabrication you or you from your willing different on And projects Can frame proportion will versus Canada, work similar in about plan man LNG us what onsite talk total that all? at be the for of past. are

David T. Seaton

segmenting get yard time. I No. I say is our to that really going want to would quite that. into I just be for some busy

Jerry Revich

competitors project effectively onsite, your craft the modular are the help to approaches project this from a build size approach that's hear others labor how and drive a to lot how your you comfort yard there? on we all using modularize just with is less fabrication approaches And different us as using Can just of of some frame that for us risk fixed-price well. from

David T. Seaton

think is where you is approach But once the I load site Other But as that modularization with past of with we most the Canada. fabricating of competition. done we've important the Kuwait talking loaded it modules. job than appear. would it gain It the goes back deals fully taken, process which lighting, lots We're in you example. separated, how these which about I with and pipe, people fleet have design to the different racks. instrumentation, the There's in expertise. thing have people an are. how because use to those are that starts fabricating modules everything, lots companies module all do has modules of it weight modules that pipe are sufficient electrical, But on productivity these with Redwater our

Suncor implemented. experience flawless, been approach, – setup procedures both CFP done we've Our that other we've projects goes which in back again design the and that has to the that – the and design

stacked down two do bit that way we've projects. ones two seeing than different difference Al-Zour we're accomplish. done So competition else terms that which is And a far, trying little modules actually on And been in we the of is the our that's have biggest what's mousetrap I think proven. anyone a what shows so Kuwait significant these the and road on to in

Jerry Revich

color. I you. Thank appreciate the

David T. Seaton

Thank you.

Operator

Afzal question And is our Tahira from next with KeyBanc.

Tahira Afzal

about forward there you're selective risk do areas (XX:XX) David, talked rate, fairly you but maybe terms you. impact around terms – the in more projects commonality or the selective might in can that Thank your being of talk the carry types the of is maybe you of win about regions? going

David T. Seaton

No, wouldn't Tahira. that, segment I

I market think, are as we're and don't. be going prove some not I it. we to we on latitude think today or And region the of you, solution been you in actually bidder, thank journey And best CEO. no differently power able in think ones became – where I've the should looking cases. bid And on comfort at but we're a to I journey perfecting to and said, this we've correct for when it that is the it that choose right we're approach is at that I four we that that everyone we're when to plants. have looked doing believe give but bearing than if low I the to is, that thank we don't things those Say the I And believe that kind going necessarily us And have projects that. the the gives approach. started

Tahira Afzal

But mentioned well. renewables, seems thinking really I on And of side? you're it get a skepticism media okay. come hype renewable get, has sense and it's against NuScale Got or love all David, what would nuclear to you it, doing through and the think, I better

David T. Seaton

expertise think an Well, solar I as and We changing. got part models are places technologies carefully it's NuScale solar to going going of projects do. are We're obviously side bigger take approach mean, we've It's issue do very to be and the to with kinds you amenable continue it. we're because for they there come the to and is going of capability And industrial in need But the up. when that where I new the opportunity follow the where there's in generators and into and not power. suggesting the in they think, wind more to do particularly where E&C the be translates to a I'm really going things. I to going kind becoming of those But, that think. need in. that not to the power It's going be they places

what the U.S., going be there. places been number we've In there. project market big where be. it's like a But very encouraged accomplish there's internationally to I'm will in Idaho one to think able I by So

first time in value ahead of really, that sees globe. The As the design module of all our government one one flying of of have technologies ever. hit and also, complexes submitted able front client as what the are passed and you small We've docketed the It on ahead naysayers. in with been any been that there some their I said, was to schedules industrial they've terms, around a We gives reactor The that flexibility lifetime. lot is really phase of – DoE nuclear accomplish. NRC certification with schedule of colors. for satisfied I'm the specifically but base and said, growing. only the power these not the institutions

things and approval we that on. it and all got get it's into think done. NRC licensing after But worth. Now, from perspective, a we the to proven get reviews the now technical the And legal kinds keep I go of its

we in we've about those bullish pretty previously. are feel timeframe new the of I terms and in investors forward So communicated where projects moving in bringing

Tahira Afzal

that, or you maybe we that at you do overarching be renewables well, process-wise to you re-look as even on look the there. see (XX:XX) that you anything think traditional okay. renewables to look it, NuScale? your As matter opportunities as as it's more see follow business, just out technology-wise or outside when David, And, fact, do or of Got that could at disruptive up potentially

David T. Seaton

governments Agreement the would because that. to when issues do us that but able think Saudi issues starting see burn disruptors be a country folks working walk are had completely places moving be to within to for gas, geopolitical if of the that these direction and lowering people And some greenhouse Nuclear, clearly think have in be a Well, won't DoE you something they're you going I've with in I there. well be don't as The are we deploy And emissions. would But yet, gas, for could conversations more able the that. or I you it's away have I they're not. participate be it. technology that the one to the XXX to right that on that as needs from that realize problem. Saudis

So are kind the things it's about. of that that think concerned disruptors really I'm I those

Tahira Afzal

it. Got

Okay. David. Thank you,

David T. Seaton

Thank you, Tahira.

Operator

And Research. Michael with comes Vertical our Dudas next question from

Michael S. Dudas

the the now look you support over bid at is as four quarters, integrated about David, to that everybody. (XX:XX) of involved what list guys much it. to a from in not still there might that still are Are created achieve where (XX:XX) scrubbed eight have? some systems that profit point the projects that is or solutions has Every or the afternoon, project with current the and on productivity they the it's these backlog? the you you've how next using Good "legacy that towards technologies issues" that And scale?

David T. Seaton

power off just project we had CPChem and we the market before a that mentioned. throughout because E&C acknowledge turned I Thanks, that that a project I'd Jamie group. me to on same company accepted Michael. accepted. Different projects had, But We exercise mentioned. team Couple projects within we that that specifically of up same team the bettered back down bids on ended projects come can the it's as-sold I you bid I issue comments. problem upside we've you management bid an like a a Number X,XXX one, and things everything in that with confined this. We being we problem, have And bet we but by point you question by my of the four we and happened. were We at had where primarily management time those when the X,XXX and margin expectation. the that again

our I Jamie's And not lack full reviews, with in I the customer, we to solution, some implementation on risk be when not believe when where risk those again going driven where question, serious project very of cases, cost with there to have schedule. every regard look is and And But ways to and With And which going that do the will at needs terms is place. enjoy backlog we're our on in resides. in based that having and accept a customer fabrication, in we those, a a full won't capital deploy we We've a they we're the the to the to solutions, model good on When to the our the to sure are this questionable supply systems. have significantly the without I I'm is finishing okay So able and customer, to every are what model, parted that. includes we our back integrated based tools five over be invested or benefit going think of capabilities. And become we're efficient customers and not, in approach we're because a good in projects there think the the place. too already conversations. our construction, by to okay implementation about be of that. we're more because we're question either to where risk-adjusted integrated that direct us (XX:XX) want what do last asked of more very chain in years

Michael S. Dudas

say, let just not guys larger they infrastructure the Government you some the Understood. position. or in (XX:XX) to is year involved your type that solely back Fluor's this the and throughout and of the is think And regarding be Congress LOGCAP and ready PPP with rather just And handicap see, the to follow quite not in up, allowing on comments would are other into the get opportunities going projects how see that need funding you year David, you'd to to get help projects together Infrastructure, next? out timeframe for you or

David T. Seaton

infrastructure, I it's a Mike. thing, timing think On

think at taking process different about would things get decade. different LA to proof gestation look argue no is the group is a calls the couple I this Denver a I of these You and Purple cutting no period Eagle Line back and Mover than the basically a than project some it to long The of that. that told took of from ribbon how of People that. I've

of again, as financial it opposed the that side to moved more were set. model pushing saw they that equation and intervened was the but regulatory or forward, You model that PPP the even where sanctioned though government

their that act it. Congress reform get Tax big can't So, yes, together. disappointed was get deal. a I

You place. in do vitriol going read the the that's papers and on like that I

I getting to them it's kind where to what I that starts at a those when period, think an look we're gestation a problematic. going process steady years. next in we're – see So I bill cadence over hope chasing award to three But and this that the infrastructure projects steady are accelerate. of going is

what I was bill situation the I'm the think it it think it's a first will accelerate. But by I part? comprehensive as much regulatory as Congress. is infrastructure sorry

Michael S. Dudas

Government.

David T. Seaton

Government.

Michael S. Dudas

(XX:XX).

David T. Seaton

Feel a mean, an think done that the sites that successful. are the of projects When where I has we've in good bid outstanding three DoE and are. good and years, job at over of you that number continuing look have we team last about growing I think market I business. those we brand that added being to

extending the Savannah I River Plant successful by is year we'll not rebid. a evidenced ready for that be good good us a doing extend you're they don't If you for to them the which that feel job, which rebid, in get

really we'll and I It's the On in proven we the business, value. where continue sits we're customers. choice Army as we've about annuity And that the to with style think DoD that the side, feel I brand I win contractor provide good the a best to of business. think good we've those a in and past, said solid

Michael S. Dudas

Thank you, David.

David T. Seaton

Mike. Thanks,

Operator

And our with next Wittmann question comes from Baird. Andy

Andrew John Wittmann

Bruce extended, the run been call about for been quarter. amount that this that. said you maybe my funds earlier I earlier one's it Q been David, going that Maybe can with here said the matching how or for the long of the NuScale, guess. guess, thanks or this to taking questions. guys, that On it's extended the to just you But this out dollar you've you, I extension? able just And clarifying was had talk Hey, funding on in realize

Bruce A. Stanski

they to government funds already fiscal-year funds with – year additional tranche funding, did, are through. that Sure. the very of government of up And that end the you're year $XX of that notified And on that is back driven of we agreement and usage of development through the XX. as application for which the then coming effect their providing are money that this award applying for burning fiscal-year knock-on we process kind and for technology the were is tune September they're for renewing ongoing next one the of is for this the matching year. driven the about that next next this to as we got of in us of The It's them. to the agreement that relative million current will soon penned keep get be kind of we technology we a while going applying development funds its flows so

why than So, and look you $XX as but would or progressing will clearly NuScale, million to year – the spending more said, be in $XX the but we if that's intended. of quarter, on going I of overspend, a like we quarter the the little will we're overspend, end spend, normalize it be before technology that not million kind we're four

David T. Seaton

module it in Energy the a in think as the ought Secretary And light. I also well nuclear and be general seen as positive have of that to reactors said small administration

we're we think So continue to funds the time. go I to in through as a secure position matching better

Andrew John Wittmann

that Okay. we can the about running get kind the a That's numbers, about given on helpful. revenue better you it's segment just sense be can of quantifying And what underlying Government in talk just so at? Puerto might Rico, the episodic that then

Bruce A. Stanski

pretty are we supports certainly lot perfect areas the other longer. the which sustained needs Puerto some much we type where the I get of or call whether them have of bit any But different and, contingency are portions any protects, course, little Well, Rico people of of in know experience be it business no a the of it and fill postured type of example other world, just Afghanistan in of Group and Andy, immediate these event, a of was than a to business that Government and contingency of and well-positioned you kind that. government here,

events nation national able a operations, that but to the there on we facilities, Energy that's do running can problem how strategic really reserve, episodic type So business are cake pull aspects because nuclear icing of we said, are kind the security. these what a the events demonstrate or nuclear for Department type we those supporting upon areas to see business, good decommissioning fix our facing petroleum of or of we're base, we contingency their solid David from Fluor underlying this them, build where of of of their all decontaminating, as

Andrew John Wittmann

Okay. Thanks.

Operator

back That any concludes will Mr. remarks. question-and-answer this additional closing I today's session. conference for the Seaton, at to over you turn time, or

David T. Seaton

the so that and executions one the multi-industry on are than projects you, we're multiyear, how really operator. a believe finite And excited in Thank end disappointment, we a I'm do where appreciate that. grow and be good disastrous we've But visibility again, we're your think we better do about Despite I disappointed day. very sample I is and the is competition company wish more and poised and interest the seen to I captured mode think our performed. am in a No know of in think, our quarter and I relative future. where we a to our and approaches us I give going Fluor I new outperform you've into are you significantly. those to growth applying we're past

Operator

call. This participation. for concludes Thank you today's your

now disconnect. may You

Geoff Telfer	Fluor Corp.
David T. Seaton	Fluor Corp.
Bruce A. Stanski	Fluor Corp.
Steven Fisher	UBS Investment Research
Jamie L. Cook	Credit Suisse Securities (NYSE:USA) LLC
Andrew Kaplowitz	Citigroup Global Markets, Inc.
Jerry Revich	Goldman Sachs & Co. LLC
Tahira Afzal	KeyBanc Capital Markets, Inc.
Michael S. Dudas	Vertical Research Partners LLC
Andrew John Wittmann	Robert W. Baird & Co., Inc.

Fluor (FLR) 3 May 182018 Q1 Earnings call transcript