FLR - Earnings call transcript Q4 2018

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Operator

Good afternoon, and welcome to the Fluor Corporation Fourth Quarter and Year-end 2018 Earnings Conference. Today's conference is being recorded. [Operator Instructions]. A replay of today's conference call will be available approximately 8:30 p.m. Eastern Time today, accessible on Fluor's website at investor.fluor.com. be XX will replay web available days. for The

passcode also through XX, Investor time, X:XX a using at telephone turn Eastern for of available conference will replay a XXX-XXX-XXXX, would number, February Additionally, opening p.m. remarks, at like Director be Time over following to telephone Relations. XXXXXXX. Landkamer, I of And the to this XXXX, the on Jason

Jason Landkamer

Fourth Chairman Thank are Quarter Chief welcome you, Fluor's XXXX today Bruce Fluor's to With was released and Financial David Call. Officer; market this Seaton, Chief afternoon Officer. and announcement Conference Executive us Fluor's after and Stanski, closed. Earnings

We prepared have which making remarks. website, our presentation posted a on while we will reference slide

regarding forward-looking X. which on I'd Slide summarized statements, getting to refer Before started, note like is to harbor you our safe

slide differ During trends of analysis we risk that and today's our making actual is inherent will existing reflect which forward-looking an materially. and results presentation, could call statements current and There information. be experience

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

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

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

David Seaton

serve have, in we expect most shareholders we markets we Thanks, by discussing Jason. than start probably you of in have Florida. are and that I us to to Good what your deliver I'd seeing the a enjoying understand window South afternoon, everyone, view to I and joining thank hope you what we that today. XXXX. like better out you're for so

chemical with to was discuss ended $XX awards awards, Latin milestones Fluor projects Energy in X, and under billion. ore new Slide XXXX. backlog mining in capture more able copper a robust with number a a If significant States, of to iron Chemical the We upturn & in the few $XX doubling in than just United can billion turn America. the including and expansion refining to you'll XXXX and with commodities from we market Australia work

award billion was project utilize in analytics Our integrated our This fully Canada XXXX and award of data we Fluor's $X.X the the significant of largest the and project history comprehensive LNG fourth in in booked largest the most quarter. one our solutions model. represents investments to

in designs to start had next expect Revenue We contributions yesterday to to XXXX Calgary. module from of engineering. accelerate revenues be that modest release fabrication we the to yards. our this in start project we as will begin review project I relatively as year a

Howe to Gordie continues expertise Rail Slide Extension core project. focus the our projects highway of that on programs. the International the with Green LA People and This X, Bridge, to group Mover and includes align large infrastructure our bridge win rail, Boston and Turning Line

Ecopetrol contracts contract extensions to We power opened things with want the reserve. We and Department solid petroleum X, late and to in about the decontamination new also replacement group last on for and from restoration a XXXX project successfully Energy group. the Slide a work And maintenance to Puerto management we to see. work some received XXXX, please. the also our was year completed at Chrysador. operations our expect key and Stork Diversified and Government had finally, and bridge banner year. for that Portsmouth and strategic support I clients the for our of our Services year technical Tappan Shell, Turn Rico operating contract winning talk include and Zee decommissioning of traffic

price or execute our few structure to with EPC significant a a seen in shift ago, during discussed months clients hybrid Day fixed a have seeking we As contracting Investor projects we under clients has structure. profile risk efficiency project governance while of developing by the meeting project our responded integrated capital limiting pricing offering demands appropriately solutions Fluor Fluor's manage and and a issues. to

execute pursuing a with our Stated awards not degree way, certainty. of Additionally, we're another projects high increasingly to is in beginning being growth pursuing new risk strategy of we predicated profitability selective that profile. can on outside

We year be to have optimistic reason and beyond. the about ahead

With the play Fluor's higher, global moving economy, forward projects, of current with strength which long-term strengths. into are operators directly

we of and work in our additional a we're We In LNG booking calling & next building year. into we feel have quarter great XXXX prospects one a of derivative award good are refining is reach are In chemical over prospects off that the as We're the throughout the We anticipate the in months. market have mining, opportunities. LNG tracking slate to opportunities some of attracting a complex what that projects we new and visibility the -- next Energy a was in in Canada are start this first we fact, Chemicals, off as cycle. to course well robust win XX over this petrochemical position great double exciting could Louisiana. And two LNG curve and more of plant and FID of year.

mining first to sizable $X billion The year-end. fee started curve to awards, drove in with mining just awards XXXX. XXXX our at in backlog This converting over

EPC we and which here second encouraged bid to well include we're of the selection as spending by infrastructure this it our currently year, wave the recent win and with build and infrastructure as Infrastructure, studies are I as And Phase Purple project arises. for the our and modernization awards well four Transit XXXX. in to focus copper off build XXXX. the to that Authority. on win design Line In FEED positioned project government's portfolio feasibility work preferred will partner in billion several and as the expect $X working on in large to prospects Chicago of Red program Dallas, we hope are These drive We I-XXX

Heavy be Civil Heavy in enhanced Initiative will further pursued projects backlog by or Civil, smaller by the bridge projects here of and large Texas. the these addition, road In Fluor State being

we ongoing Departmental multiyear support significant in Laboratory participation well-positioned various Complex of DOE for and Government, For Defense contracts, needs. of the are National including DOE

to We LOGCAP to later high-level opportunities at contract about on year. of the waste V share Corps pursuit of liquid also more the expect this LOGCAP timing Army on work and programs. DOE with looking IV and We're contract continue the Engineers our

government Finally, I and not government impacted point our were by activities want of to shutdown. to receipt payments the

role Diversified how grow. serving we Our to XXXX, years clients. consolidation where have do a Past a we cost our continues are the of marketplace. and and period solid Services job In redefining been on their competitiveness in focusing and few of group

beyond focusing and businesses. higher-margin our We footprint & Energy are segment Chemicals expanding on

the comment and Before I XXXX discuss call our year, hand the want a to to the over again was financial strong for initiative. regarding safety I on year our to performance. results Bruce safety guidance

rate industry more hours Our than with an incident than X/X the lower XXX million average. employees work

also further which We access leadership to our on worker a made caring our and progress engagement. commitment through improve great Safer workplace culture, Together preventative safety our initiative, to includes and embraces new this and

to Now, Bruce. I'll turn the call Bruce? over

Bruce Stanski

everyone. Thank you, good David, and afternoon,

on $XXX Expenses Fluor new to per Corporate highest favorably G&A expense share. is year X. XXXX year for $X.XX results by a from our was million, ago. deferred and awards net $XX delivered year begin was the ratio down to $X.XX $XX With for earnings $XXX billion tax the since a million just billion X.X, XXXX the book-to-bill Revenue the allowance valuation for Slide our compensation or were diluted reduced $XX.X year under billion, foreign of diluted million full early is includes $XXX gains million with expenses. This XXXXs. ago. we or $XX.X impacted assets. XXXX exchange year attributed were compared for establishment share on per a Let's the

$XXX Excluding for for diluted million. Consolidated XXXX this Fluor earnings $X.XX attributed adjusted item, $XXX year or million the were profit noncash share. segment to per was

for quarter to Now of you fourth was to million X, if to per billion, Earnings quarter. results. diluted the Revenue $XX book-to-bill quarter $XX.X the our I'd second for fourth ask like new was turn with billion, fourth quarter $X.XX consecutive awards were above you for for $X.X the ratio would, share. or X Slide

reduced now online, $X X. foreign ago. compensation gas-fired downstream and Cash and an $X.X quarter favorable diluted just to fluctuations sheet allowance, the the or exchange related for fourth Excluding million the were Shifting offshore power Slide It's share year per plus both $X.XX balance quarter related project, attributed to of charge point a the Fluor also to the share. to and include earnings to $XXX million $X.XX noncash I earnings diluted valuation or $X.XX billion billion adjusted marketable to important per for and to out project. $XX $X.XX securities benefit was our project which compared mentioned, tax charges that a related on and a expenses, a a

XX% our in XX% cash XXXX, over represents total domestic available Our about and balance cash. improved of

paid also X. fourth I'll dividends, which guidance of market of in $XXX in on for stock conditions conclude $XX the For million repurchased and remarks our the million XXXX, new full my year, commenting quarter. we took we on by is and Slide advantage

establishing XXXX, NuScale mining exchange million to and of $X.XX by a tax earnings This foreign any XX% We of $X XXXX million, million, primarily to losses. of range potential a are guidance driven $XXX growth per or rate range to work. revenue approximately expenses our of over G&A double-digit $XX assumes gains expenses diluted share. $XXX XX% excludes

continue guidance, quarterly earnings we and deliver in in backlog on and will up each of have will contributions second XX% than half. good This sequentially significant XXXX give do quarter earnings ramping visibility will half greater we expect We XXXX beyond. While that be first the in don't do projects improve approximately today and of will XXXX. throughout the

group X%; does the XX, Slide Diversified Infrastructure be Services, power be to X%; to to and margins year to X% we approximately X% to Government to average & Power and anticipate which be to approximately Energy full Chemicals X%. Industrial, be Mining, in services X% include Moving

ramp Mining, margins in furnished up Industrial, material. Infrastructure revenue Power & group client reflect and mining significant a Our

be revenue Excluding materials, Energy comparable the Chemicals would that our group. mining & to of clients furnished margins

margins, has mentioned, group. exclude For XXXX, NuScale The NuScale the moved the Government anticipated just into expenses. I

margin a place, awards work given we we backlog in and nature the newer, engineering Canada. how backlog the for large immediate have account the of now in of impact LNG young projects, While won't strong like EPC see we this

the of will questions. With results. the that, duration sequential the we're project, projects higher-average increase throughout our to which these expect we entire quarterly ready in drives However, operator, what is margins take deliver

Operator

[Operator Instructions].

Jamie Cook Suisse. at to first Moving Crédit

Jamie Cook

FCFO, guess, provide regards And my to my the to complete? is, second the I done? be could the it you on question David, on charges So in that terms the expected guidance. How percent with is I is guess, project if is of, color When question big? offshore

said be I XX% back think than you first year, the should earnings half half. greater the of

that, work? is the on assumptions it predicated your in And embedded additional what's Just just projects? ramp on it of rev numbers terms what of existing winning Is in rec? 'XX

David Seaton

good It's the I'll about and that. first your not as we Well, not mean, that. it. get second next about how answer said, mean, what significant frankly, normal three is. years, drive we're let to I new quick there But backlog flow story any we that no There's mean, issue. to big halfway in to feel probably visibility the really the Project's really does done. expecting awards me the where just project question. is, is of answer that a and It's, good let question Bruce a terms growth that I I expect. Bruce in

really negotiations leave it in I'd rather with and that are to moment. the We -- the customer at leave

Bruce Stanski

relative rate And how rec, about program you and down And with million the talked earning XXXX. we on Jamie, have we in more a rev could the revenue flattening we than to put our started The the the in earnings. life early something this generating cycle go. profiling, to question at elongating ramps to $XXX of our in again your $XXX off recognition streams We over burned on life Day rec we what Investor rev the much consistent standard on, and about its with of to and that year earnings is when see, later K, in before. more significantly. burn ago, pretty back talked program, is retained $XXX million we that's Relative million,

to years. four $XXX it's burn to that that, take off years do four going million, So plus to over

recognition a in we as not rev it's predict for on that going projects because is, of of rec is mode we part in So us normal considered our revenue forward earnings are here now.

will but how over give an idea you years. So -- to that that profile X.X

Operator

next Citi. Andy Moving to Kaplowitz at

Andrew Kaplowitz

you both for projects. so Analyst that David, there And last candidate were 'XX. two you said at in you billion the Day for $XX then you said a Mozambique? tracking year, of large prospects that late there mentioned LNG -- you're LNG projects Are were

in QX. big of those backlog? in the seen mentioned can slippage if don't any grow you petchem win a still you prospects? You any award in Have you project And XXXX, LNG

David Seaton

The terms quick piece answer backlog LNG It's last FID one plant that grow more of be to an going difficult, is, on without in of to to yes, LNG I the 'XX. think, we the 'XX 'XX. Marginally can in kind in them. count. get frame. Canada of again, things But significant is, LNG going into to We in earnings, and 'XX FID just Canada of finish don't those are that until XXXX like positive time and push

the to And growth about and it's real have going one good to mining there, do So hopefully our we going that be going it's in is grow. think in big XXXX have going next several And to there. least at to backlog. believe got I projects the I workload it's feel of LNG because spurt the base plants in we

And of in that not the just of kind of pending. Mozambique in. are a looking one are talk prospects, at considered proposals it we're good look are we about list -- leads, -- preparation at projects I'm E&C on We of in then I'll different they feel both that quickly. in kind and But things -- about we of projects. and groupings the that

terms projects fee -- healthy which the plants that remarks, globe. FEED or EPFC XXXX. preparation the we're are prepared and on pending copper that decided pretty during are to of the the of a that be prospects to But column, about to there's significant X mining, in we're around I or also them pursuing in there's number in that EPC EPC in additional things awarded prefeasibility XX Just leads awards In the starting the chase, have we out-years. or that mentioned

new you the So means that in business that and of guys and what well those. on terms schedule earnings as know as anybody, values award

in that Stork rec, much. heard just You've it's the more from terms made I and mining. at and solution I adding done we're in able the the And and are why of proposals group has tunnel front the of expand oil the very can importantly, their I'm what's think And where a first those you, I mean, earning it's end them and means be changes starting and in infrastructure the to what allows into of you we not -- think to we I machine the truly believe really with only the spend at we're what to bullish a Government we've but starting of about enthusiastic getting I'm we're better of to not feel prospects are. day. of can a that's the me hold. job two is we've little good work, -- 'XX gives flat the when in end to at, the looking year is, has is we XXXX it and we of the look visibility and in systems, deliver made bit because governance streams and signal profitability a to investments and I tremendous future I continuing think, I beyond, loaded. about And the life past, capture the at the beginning tools us, and not the to of I see locked quarters, about -- the when telling made, tell to And train. rev their the XXXX, see offering. to be. you going look changes and coming where and actually so us terms to that being service we're us but, I'm are think portfolio more wins integrated that the gas Stork as

Andrew Kaplowitz

David, that's very helpful.

it Is know lower guess, margin. cycle just margins CFM. you ask you infrastructure because, sense to Infrastructure me don't I the but the mentioned for concern the of I NuScale, if of -- just X% sort excludes about sort higher were that margin. X% I X% reconcile me of we for the you the something maybe are the in guidance the history, know projects, I about context of this I is that Let thought, high I mining that, single-digits. project kind in this in Maybe cycle? passive could MII&P think understand us?

David Seaton

I'll start, and more give then Bruce can color.

part prepared it I of all kind Bruce? of the get a the as will the that the starting, on project not -- infrastructure you're stages of timing those of those early just because you think mentioned than projects lot I going those the are So mix, right? matures. on is the profitability remarks, in to in

Bruce Stanski

Yes, here way quarter a we're fourth the Andy. look And take we operating there. took, just that X.X% about project margin adjustment if we that the at for MIIP, the just

line in with remove get margins the our that & in kind all our in like we material services prepared Chemicals. through very So CFM, if forward, are that very get Energy customer guidance on that we at consistent books, the is going much of with we what that but our goes value-added remarks, my

with that the nature book it's customer and burn that of just So we furnished how off backlog material.

Operator

will next go to Afzal We Tahira at KeyBanc.

Tahira Afzal

it's get about should framework to sort wanted came sense. Canada, just very I be Any across you were on that think just and site. of on early great updates But watch you you a how and David, of helpful? you said, we know project. LNG a So provided the would

David Seaton

sufficient is in we market in terms given ahead The project, in Based everybody, got of First the otherwise. of size equipment of the out Early labor good the on the and done believe very actually successful there LNG this we're the office there, have time. in and of be the was Canada. are myself The will I that that be lead engineering. the team signs there we're in good client long to are Well, labor all in in the We scrutiny, a the I with. happy this that particular province with we're out delivering because place relationships in including wasn't there's pieces our on in of progressing, I in positive project site. on plant to way those that. do really involvement a doing and reviews, -- think very We've Nations market Calgary.

Tahira Afzal

Got it.

X.X When Okay, with start can David. to And and do then, first to a outlooks over the we've been you have month, gas to and what seen in point you've line oil saying, improve CapEx of pricing, companies where months David, updates push yourself? get on FIDs very been that from really competitive positive. we the flash the think even dynamic really the last stuff for notably you major

David Seaton

for always at You ask one or of that you least question, Tahira, do.

some our structure, efficiency. fit look What chain our are relative that the come is cost that people now in and use more disciplined until from sure they behaviors. I like to making that because and the think, because on projects are to project decisions needs. margin making can one a the whatever going very somebody of associated I dogfight just absolutely to that you it. in to we work answered of business get burn tell pretty in of day. project being have describe decides part win how predatory of single This lucky these of Fluor's there. the you're we've in But of of see And risk this terms end not every in There's we're that of mode them. don't it, nature And supply words I'll project strategic, to we delivery critical the is for answer continuing it been and towards some and our challenges always way right I improvements the to our with you'd is next I margin, is and that still

I that I has know about I said. our So to made just where bit, shaken in credibility we're pretty a feel able I been but being we've and improvements, know headed little deliver good what

as looking these and XXXX, think how are. projects large said, So at how I because I and start a think XXXX just of you -- of lot long I XXXX,

improvement of that outlook I going what for going those to and terms is of in margin out-years. terms think we're significant to see EPS be in

Operator

We'll go at Wittmann next to Baird. Andrew

Andrew Wittmann

make for you offshore on refinery I and and million could On calculated charge understood basis project could, would $XX guess, quarter, charges I questions everyone for be looking charge, if maybe the you about these have million million a think, charge Bruce. the these? a on power see charges. to that, like been it as plant verify decoupling the the total correct? we project in to the $XX and quarter these on are to of sure wanted finish part the and wanted took those I looks this if I pretax that Are the $XX of pretax as well the I that was at just refinery, one up. million numbers $XX

Bruce Stanski

correct. charges $X.XX quarter. for the were They're The

Andrew Wittmann

Okay, yes.

those should As something we just that those or to rate translate we tax the to $X.XX? translate use about, to XX% what, like EPS,

Bruce Stanski

Yes.

on tax rate average here. tax an You roll can because later we're for adjusting our use forward

the for but charges. on about unusual Our tune to XX% of -- was tax of the quarter tax XX%, XX% because these rate in

Andrew Wittmann

The valuation sense. makes allowances, Right.

Bruce Stanski

XX% is a good number to use.

Andrew Wittmann

Yes.

understand guess, was a And a to in segment. similar then the given the bit cost? like little significant FX maybe that, and EPS quarter like I a compensation includes heading pretty benefit or Okay. pretax the on the this quantify an either looks the here, was, was on maybe what's specifically, question It to I So here look you what you'd tailwind corporate going pool going the talked corporate already think, probably into FX basis not baked what just, in can was bonus just your or quarter? to a what

Bruce Stanski

under about that reduced our Actually of rate, the with other exchange and half pretty half our was for equally that $XX $XX incentive million about payments run making. we're the we're comp foreign was about million,

Andrew Wittmann

guidance there's I And Got guess, I need a in-year, in you guess, the some expected level I always that you it, rates the thinking guys question burn XX% and is, and in expect amount okay. a in then, burn have this guess, looking I Very of your obviously XX-K you just you backlog to total posted at, this about always have this book to revenue your for-the-year of that here the and year year. historical I you're you helpful. understand in year growth context is just about how 'XX. wanted burn. component that that of expecting overall are that's given that your --

Bruce Stanski

the you're rates, I XXXX. for burn guess, looking at XX-K

we have longer them. Canada, forward, programs tail LNG much look these a we that As particularly have, on larger like

So X, X or longer. the of are duration instead X of years the years projects,

as So the awards. large 'XX of the nature burn rate these will slow of we because down large, go into

will a is right duration should guiding rate on what which you. X be. But kind think or of time if is help going -- by X not exactly of you help increase the that to So we're lot, I burn now years, that kind

Operator

next Dudas go Vertical Research. Michael We'll at to

Michael Dudas

that client choosing bit backlog. relative with coming share pickup selectivity -- it the and the maybe that the up be sounds can big relative to difference a comfortable and like big solutions Tahira expectations, to and what backlog what going Andy's of on in we you're future XXXX you Fluor's that year win forward. year? in because And integrated you're to obviously need It record about from for and a current you seeing to levels you're be booking your feel are see more little relative XXXX you standpoint? power selective relative to sounds a following really questions and delta made could David, to rates this real changes you've Do the earnings what providing do like,

David Seaton

Yes.

I'll think last answer the part first. I

XXXX, intake. the we -- go I not first I XXXX we pretty going The see average mean, part think year give the number 'XX. less mean, anything but I -- you wouldn't it's But jump. as of still I a when number, another even -- in I'm 'XX it's robust to with significant really Canada number. are and of started the significant started and terms we we without 'XX LNG that, two, clearly expect a with was through still our

learnings talked nobody behind selectivity, previous can remind that from there's in happy last you is work years. guarantee even I than issues booked would more quarters as the think Now into I us. and going applied, ago. because years relative I've two there's had and to back those and 'XX have we I XXXX already But learnings we as I the 'XX I And booked come in think that been were X X that

and help shape to able So some to of think customers that of become them we're winning. selective. of And we to have the opportunity opportunity that the equation the both more there in process, approach, we've been these projects for derisk some given sides I the the integrated go in solutions

I has and rather better would of get the I opposed when market customers that deliver asset delivery as dust these and up that being I back think really us into will And for become that think with answer somebody with what be believe can consultant dropped improve but that wouldn't schedule, the and to of more I we've headed. selective. competitors. they're my and take bids that a looking believe But bottom and from our do that what that's prices. Over I maybe been matter the allow my come we're more also cloud of these competitiveness, money at to the you cost for in And efficient a and seen company, looking more would rate yes, is or the customer small doesn't time, size the consultative So I this do able customer line a say, I've pretty one the I money when to of at time, deliver and subset the for efficiency go-to sale subset a to mousetrap, is mode and back that really industry, assets. or sticking to during becoming to more more. increased -- never win to the sure raise execution, we the right a that where look can and suggest. up three doing line. of opposed bottom say continue go as a coming of it drop time projects we terms with same that's netting hasn't period to we've -- the we're and are a the of it that

Michael Dudas

To there step big setting asset the do how Is up earnings take that where you're you thinking relative pretty in today the different companies future to your of this through other lot a opportunities and further, activity of appetite power, how or people, utilization, your as we've your shakeout landscape tools? and for seen feel requirements acquisitions? that one in And levels? for in project you're Fluor, ramp

David Seaton

we of and we that how and and one are showed Investor bid of we think the requirements how phases you -- the how the tools start really I go about Day. feel made I we the in discipline to going of we've to those projects, governance systems, terms around projects, in some and be. and investments what this various good

differentiates their in coming which hires, about those at I've up. rates, folks, that the And the that. execute is really, look look green, a of There really going attrition know, spent indicators of we scars new don't speak. the over excited we of a the think they've in in I a months world young, time maybe seeing effective putting feel that designs over because they're last, And those XX probably talented they're got lot terms but look feel are us From I all of at folks we of these on good mix an next capable are from with talent the how our good people efficient more to we're all really I standpoint, projects. we actually also much and designing. competition relying that's what and we're people those backs, also be programs. so to on group field people. about they're the really college I at So

that attract in wave those in doing we're things terms pretty talent, of the we is arm the some next I new I've that, the notwithstanding the that as the seen grow to I So organization confident and require still can we continue going at apply feel of our organization, we'll there's arise. talent, of I a ability breadth think may industry talent as But the really but where ever and resources things it. in is specialty depth the to be look resource tangential best that when shot in healthy that frankly, those to of think standpoint, robust. and from markets a organically grow

Operator

We'll Deutsche next to go Dillard at Chad Bank.

Chad Dillard

just end you was do above understandable early the then. segment? fourth the book-to-bill X.Xx in which come started book-to-bill, given So curious around E&C, just LNG since book-to-bill Canada quarter. resulting your Xx if see the market you growth think a slowing back back that of the suggests And of at 'XX global whether in award big customers a is fears like to for you the out like pretty can I to get the slowdown the you've

Bruce Stanski

target Well, we question, I it and Chad, increasing. the LNG. prospect be where see start a taking us. especially resources Canada LNG consumed a to the lot the Canada year second going appreciate the book-to-bill of out of for half was your is

have could significant were a because successful used jobs, very or and integrated job and we chase it award was it those well other matched using X to our we're or at chase this it. solutions strategy we so to X instead And resources X

book-to-bill So this say that back XXXX. because year, spent resources to what's out we we job. our that don't to forward into energy, Same going thing win the into

we have might any the quite that fruition lot come on of jobs that there a prospects XXXX, we but going books. jobs not infrastructure expect While David the -- commodities prospects come will we're as jobs, large the chasing those size, mining about jobs on. the to in the well that efforts be large be do And on as those spent refining, will talked to

X.X. question, over that second see to your simple in where half the book-to-bill So long you're but up we'll asking, XXXX to of answer

Chad Dillard

then to helpful. That's Services. And Diversified just over switching

Energy footprint What How capabilities planning beyond I investment markets think, the just to personnel David, of to new talked you in in targeting? your an Chemicals. you actually expand prepared of and remarks, are sorts needed about be big will there? get

David Seaton

those if that gas of types at where to gave that's Novo the oil refining processing, the terms mean, Well, the us pipeline into -- had down is It's look kind and and are would Gamble you the the and most business with the things. and But we market. piece clearly after were, already in we targets. most side I that is gas, owners industrial expect. hurt an key optimize the place. Further of projects opportunity of the market, it gas of just segment certainly what markets that think And from industries to one regional, going fine that our when we and & kinds Procter I of big like But oil kind fabric they terms you've and Nordisk, chemicals when Gulf were maintenance, to probably in of got markets just but you us you start the bought our the going is look into of of dropped, a to further a served. key kind offshore to like when of future, fact at Coast it petrochemical is be be in growth. wasn't going it Stork the

in be dabbled maintain mining us. huge place. finally, years still building America us. going a South and gone -- the Well, in big then Europe big who in market better But right we've to there to by we're that places than a stay is only business. Some now are for facilities those

on just a we wouldn't color those looking take on little that's leverage it's Diversified in focus that? and Stork. So basically, relationships we just the we're not we have -- Services, of those because big that countries, advantage why folks how So at those do how kind of

flatten capital. the successful of spending those the business, peaks, the temporary the gone, big If mining Same And that very components if that thing business TRS, those refining been we're you staffing you'll guys mining and petrochemicals markets direct-hire blown projects or clearly, our our when And like for us are look business, business as you allows will. were I kind always see to AMECO respond of around has see coming, when at doing. well. them

improving, EPC like water for it the business the the when of those guys too. raises side almost it's level is So

So again, I finishing towards feel pretty we prospects, good about projects. get their growth as these

is a guess. typical project, play EPC the a it longer-term So than I burn on

Operator

Jerry next go and to Sachs we'll Revich. Goldman And

Jerry Revich

the that? David, you expand hybrid mentioned what structures prospect sort on risk on fixed financials seeing just approach? cost-plus? of you hopefully, historically type that at an type have customers E&C XXXX, projects likely you of you list, Can also Are and greater growing in contract. for So opting in that price. get And will project LNG you as look your which opportunity be been

is work, more appetite of backlog now price? undertake XX% considering And to so level fixed-price the fixed your what's

David Seaton

is and pass that some to seeing advantage risk said some a key about that in little behaviors to goes they're market community. and we're was around the believe trying we're comfortable asked the discipline on of earlier bit needy, in the more. globe back the Yes, is This kind taking I range change the that mean, contracting they customers bidding. to of question of and in that the where of we maybe What

But so oil like. of more the a stuff, or got And fixed-price companies traditional that are so FEED good. some towards front-end the international it's basis moving on whether far you've some

Was I'm So some that question? feedback. a hearing

Jerry Revich

No, please ahead. go

David Seaton

because, to we I I an regardless and in approaches the I our because and sure apologize. what that kind provide, some need. We're than which what a the trying it's frankly, hearing the make successful we've think to of more they're is. the was that just can relationships we've move we're that also I interested of to able knitting mentioned hybrid our new some perfected. where approach into feedback. say been of fits just But we're procurement of sticking of to LSTK,

services. and some engineering services, projects So the fixed are procurement terms of in

in EP. attack the are them place of fixing And not that, unit, it's a but In kind that's because price. cases, number we're labor, the of units. Some of some taking fixed around the questionable not we're

said So and three hybrid best earlier, what our of see towards I bids ability think strategy based is opposed I just, on the looking to as really implementation a to the help dust. we're more clients the cloud as

the in provide be and is we've as to mixed issues outcome to But but going last that terms years I it's I the that a systems the years. bag. the earlier, limit a said sure more we've tools governance over confident I'm that can't say going really few changes for Fluor experienced made limit, of eliminate, So and few last over and

Jerry Revich

terms what about additional close over the -- us comfort monitoring our so get estimate talk red the offshore shown context, that that projects you not can of Maybe help office help actively around can us flags, that at around in the comfort can think budget And the to we are are just list or being with they arms us what's just about build you margin like just Just of project, we the for -- you E&C folks as that executive X% XXXX? charges? just remind the sizeable... build within how size looks

David Seaton

answer margin operating to performing is those in going to a about X% There's X,XXX X,XXX a only projects, projects year. I'm of are those dollar-wise, way. different as-sold or it and better. profit. do XX% this We at below of are

rest we've in the are the greenlighted. yellow. And red. easier ones. the projects, or And vast majority about There's are in term think red the already of would talked I our argue, I maybe X% X% So

Jerry Revich

Okay. -- on comment size you can of date, the And -- start the in completion date of the offshore terms project and completion that?

David Seaton

I'm but going I get we're the that, to any halfway not into sorry. done, further As said, than about project

Operator

at next of Bank Anna Kaminskaya to move America. We'll

Anna Kaminskaya

do or I picture other growth we start I sounds with a at bigger conservative about outlook and they outlook. XXXX, flow pretty growth upbeat are commentary question. more not much from just the you companies, backlog for in the next Maybe see the for year. if names much energy look But can look at and everybody companies If EPC their then you from

guess, the of that conservative specific your where Is outlook outlook? connects just from I what's companies do So upbeat market with Are comfort companies? how being positive for play? disconnect? XXXX the guiding the outlook from I you the initiatives your XXXX perspective, get for it we just and mean, energy

David Seaton

That's question. a great

are The piece bullishness industry. in that is of that fact more the first diverse comes our we than part most of from our

provide what's Point with bit to number not projects simply be we're on while think just gun-shy their on of least little the that long changed markets. the the opportunities. conversations or point they outlook a In at of what announcing the companies in growth the price are two, gone companies gas and in on last the oil volatility you guys that I because in little term. the of terms see energy one. be those oil side, and energy terms would haven't in my energy us So in with number relying That will

not. that are terms is going their high-value So is the of whether not a really project project to process, change in decision-making

growth it in which again business. Novo of other cadence the customers circumspect growth sequence in that our terms you're I & of mentioned why little that in Services being we've seeing of seen in I them the a and manufacturing some Gamble I on into I that really is or people terms it the we've "industrial" companies. goes their Diversified fits includes of Procter a look Nordisk at what But to bit think seen that and of how the in in infrastructure and portfolio point the outlook. lot -- sector, like

boat. the because we're bit bit the little diversity we the maybe more on one and look provides to drive different way in not So of a at we a the industry just little marketplace things, positive a look to beholding

oil company is of has It to mining that want statement Fluor responded don't that look. you say of and got big how terms is. us isn't able the we've important piece to gas to important us. $X that I think worth very in I'm billion our billion Now to overall being with a infrastructure of to $X And to strategy. backlog in clearly pleased that is not and But diversity

Anna Kaminskaya

your And maybe cycles, close free XXXX? Bruce. between helpful. we conversion cash about for Canada were flow is get getting is to think somewhere for for your you question like working flow I of especially more kind year, those free LNG What can look like How we coming your cash previous kicking look at levels with flow because sheet XXX% next the That's should cash to to of XXX% some next free capital the next in? year? in? Can balance and

Bruce Stanski

look minus And dividends a asked we any because when other look that's expenditures -- we obviously and at at question, good generally cash and expenses. net we I'm free earnings we glad flow, have, that capital you kind then of

those of are starting running are in number into look joint large a well. and on that as ventures up we investing As projects projects we XXXX,

capital So will start forward We'll be at XXXX. is as we free if a up amount go half business. priorities, using those in supporting first our we cash fair to programs our our cash. of of see first our the you And look

start Then will once those time. for it, on I cash see been as reasons expect it cash, progresses. that's I very, year field to be need of as So whole we're you're very objective than stated. We to quoting as we'll and with a the going the be the very exactly these revenue our far spinoff we're projects numbers starting. But -- large. where what be generating the And in the little projects for the for the less

Anna Kaminskaya

next can north at free charges, we should year. just how, Or cash of think some baseline of XXX% the was project least disappointing conversion that? get with But XXXX for given and just to I the so trying you that a go flow guess,

Bruce Stanski

generate are and Again, start I large but more think to for use important that if us to cash that's those XXXX up less. reasonable, jobs in you're it's think talking beyond. going I to cash that maybe a about even really little X.X,

Operator

turn for back additional does remarks. conclude things Seaton, And I'll Mr. the session. any question-and-answer that over to you

David Seaton

us. confidence think, XXXX you you made leading Thank we coming and we only programs message at but is going have of industry, thank and the as me as businesses excited start I at we, as as our an prove in have can the the and going group future gives 'XX, we on much, I'm the profitability. lot these optimism 'XX, not best believe we've we that least participating that grow an and future look today. big into that the exciting and And cycle for year a be Q&A, call this the about for 'XX, said people as that's We well itself. the to investments to in I I and And our in of in business think beyond. people do up. the really, 'XX very capitalize people

So we look Fluor forward to of of soon. really appreciate seeing support and your all you

Operator

us again, conference. that once for gentlemen, does to and today's And Ladies conclude today. again, everyone I'd like thank joining

Fluor (FLR) 21 Feb 192018 Q4 Earnings call transcript