FLR - Earnings call transcript Q4 2019

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Operator

Good morning and welcome to Fluor Corporation's Fourth Quarter 2019 Year-End Conference Call. Today's call 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 call will be available at approximately 10:30 AM Eastern Time today accessible on Fluor's website at investor.fluor.com. be XX will replay web available days. for The investor.fluor.com. be X:XX through AM telephone website registration replay Time through also will at Fluor's on XX A Eastern available on also accessible link a February

turn At this time ahead, Investor over opening remarks, Mr. of Landkamer. Jason Director Please the like Landkamer, I to Relations. call would for to go

Jason Landkamer

and Fluor's Thank Mike Chief us today With XXXX conference you. Good call. Financial Fluor's Chief morning Fluor's Hernandez, and Alan Steuert, welcome Executive Boeckmann, Officer. to Executive Carlos Officer; Fluor's fourth quarter Chairman; are

Our fourth quarter announcement was released earlier this morning.

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

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

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

our to SEC. the which a find factors, could risk can filings contribute potentially company's discussion You in differences with of such the

the and Given provided and finalized preliminary full its by is today the filed unaudited financial and results, be events year or information affected subsequent determinations. has could company not

call, certain Reconciliations these measures measures. to discuss non-GAAP financial of of GAAP given we are adjustments. the this comparable the practicable may amounts not nature forward-looking potential During the

from For morning. additional see our this information release

now I'll Fluor's Boeckmann, turn the call Alan Chairman. Alan? over Executive to

Alan Boeckmann

to you. investigation share are in There the morning of press reported several updates all by good this you with to today's and morning. we'd we business Jason, like you, I'll Thank that release. addressing important start

information control responding the of in is related In to our recognition, and focusing company internal Radford past an has contract. requests at own SEC's the the initially review, conducting charges the looking its company and for revenue environment, which charges on reporting the accounting financial SEC the the second data prior related and the of course As projects is company's conducting of quarter to reported, requested XXXX. documents and recorded and investigation

While on appropriate believe a that total dollar accounting recognized are the period. charges the additional limited taken project reporting amount with this correct, reporting the of we the number we of was subsequent projects along financial whether in currently was and revenue and reviewing

Let statement at believe review of of committee errors have this do is me that special Board of assistance To of formed that complete a we external the make a has a not advisers. accomplish Directors the and will material time intent been the investigation. that this, the with we

the We have actions. informed SEC of our

the and we developments Given able will Form to of projects, February. to XX-K be the internal recent the of and end two review not complete ongoing file our prior

information any change. this addition, financial and preliminary, unaudited we means In subject today is that to provide

to the our disappointing we are path comprehensive transparent audited the and manner. and delay right complete to filing financial on the confident company is it statements, of While that review are our their Board a in

of a forward, organizational I efforts to at changes and changes, the this including level. Risk and meaningful Looking our Board path Committee review management Board the establishment Fluor, at led on profitability, put to company solidly believe significant strategic refreshment tireless the our

pursue and more and enhanced lump-sum now disciplined our in continue in revised with work will selectively we bidding pursuit oversight. with We better to Board our criteria feel execution positioned and management

moment for plan I'd success. conviction in like long-term a Fluor's my to reinforce take to

backlog conditions. our problem proper the mainly projects We projects have bid expect year consists to work off that a this of the and majority of under

succeed strength next disciplined remain a our position vigilant pursuit to for and Our beyond. from management in and We decade cash that the believe risk in will unwavering position to we poised is emerge strong, firmly of will projects. of commitment our Fluor is and XXXX

our accomplish will Carlos what in and shareholders and Carlos? to markets customers. about value expect we for end that our deliver now talk with XXXX And to

Carlos Hernandez

Thanks, Alan cover coronavirus. want three morning, briefly before But begin, everyone. I I'd address to and to are main topics today. good I the like There

of we families. protect lead employees While in virus widespread putting impact and place environmental the has in their group our recognize is procedures and safety the to our taken the health,

none of have employees virus. To-date families our contracted or the their

Our levels major offices the in to now and several next China we expect ramp-up weeks. to are normal open staffing over

work. Our a and other assessing from subject We're fabrication returning XX-day on impact that local coronavirus the they most yard made has staff appropriate. be quarantine submitted notices where our of work. are force projects majeure is period also the or to have will Workers open and provinces craft before to commence and already currently

like main a the AMECO three, high-level and and our segments our one, the new prospects. businesses; of two, government today to an profile are: discuss and review criteria; Now and topics I'd three update on risk

If that business. you as X. slide part strategic review government Fluor's of to plans position, would was company announced it its please Last improve the all of to sell to substantially the turn financial fall initiating

benefits through of our generating flow proceed the sale the of restructuring we early to look our and longer that and for we in position such and no of we asset. it with confidence liquidity deem realized advisable some options or solid QX the this As gained cash important attractive viable plan, necessary

the will cease in As discontinued reported be quarter a retain result, have XXXX. business we decided to a this to first of as operation which

plan of significant is to AMECO It the this end unchanged. the transaction front quarter. business one to buyers by intent with sell potential to progress more and our or remains have this the our second On progress continues made

risk our to turning Now profile.

imbalance proven a be As to Alan mentioned for our risk challenge industry. has

budget and directly into improved oversight. realignment our a our As which implement continue include engineering, we procurement providing of now report a stronger management the business These result, controls. actions enhance disciplines, and to units profile significant take to actions risk-mitigating risk

revised the unreasonable meet the results pursuit, As to pursuit an negotiations with our criteria wanted risks year. example of and both to in cost to and Fluor. around able proceed alignment benefited a and assigned the participated with were contractor. project client we the discipline to client new where we The that schedule bid proposal Through our -- contract and we conform client outlined outlined last we the recently

& on awards the an of be expected quarter segments. turn is Chemicals to update to $XX.X fourth in Energy new backlog In Now slide our billion. and billion $X.X ending booked for X we please

New awards by for a to chemical make in for facility and manufacturing China. phase a nylon used EPC include materials fibers -- INVISTA for specialty other polymers,

services detailed We also for construction help on The in contract to Polyols project India's dependence Limited. engineering, intended and includes petrochemical India booked Petroleum procurement the design, imports. Petrochemicals management Bharat reduce Corporation the

the This which EPFC three for we won technology. the under were current project booked Corporation's Silo -- PDH guidelines the and was built recently plants we We with our first in Kuwait Canada, PDH have of XXXX. bid Petroleum same quarter

fourth is Canada in the OSBL and quarter, project. ISBL LNG piling Our the Kitimat year. recently which project underway. will next fabrication activities into continue of celebrated the cut yards in portions We the Both started first for well steel

progress our are monitor achieving our to reviews. next the continue completing We and on major milestones model focused XX%

This Moving relatively to our forecast. project project. revised to is its staying close offshore

for by awards Rovuma the XXXX led will project. New Mozambique be LNG

We expect to are to proceed. and under book limited this project project this a this currently year notice executing

half Formosa have budget. about execute team packages this and optimistic partners our into forward. various in Fluor along this and of that Last the and expect on project second on XXXX with Technip the project Louisiana XXXX. awarded of see is project about in schedule Sunshine remain to this now moving We assembled strong we designed project and EPC a quarter JGC talked to the

a also petrochemical refinery We Asia and America see number and Europe, North of in projects Pacific.

Industrial Now X. & turning Slide to on Mining

were $X.X billion backlog to of Advanced in end a $X.X year group. by driven about for were our awards and quarter contracts Technologies with awards the data Manufacturing expect Fourth and EPC We new quarter fourth centers billion.

FEED to we into we have back Mining EPC been anticipated, completing in awards half the of have in as work see been light awards XXXX XXXX. the but expect convert

prospects lithium copper, continue led and to by bauxite Our be opportunities.

remains very strong. position Our market

and We them relationships working with industry projects around have with great leaders execute complex the the successfully world. to are

Infrastructure the was at billion. quarter For the Power, & fourth end $X.X of backlog

modest. quarter New awards the fourth in were

at XXXX, record win improving where state lower that We're to the While for focusing new the to a projects. right right in track on level have we of expect we infrastructure continue states, right infrastructure. the have see the we level on to interest we are awards confident

to selected Energy's to were X. an Government, we expected In of ended Central quarter we venture year the billion. Hanford joint Slide with $X.X the Cleanup Now Richland, partners Last Department our lead near backlog Contract of please were the turn Washington. Plateau – and at site

billion. pursuing the end end backlog was XXXX. were the the of of Hanford decision expect a from XXXX Fluor Services, year we We to towards February. we Contract also hear In Tank $X.X Closure expect Diversified and to a this at previously with site to

well historic is for and complete Our positioned restructuring XXXX. almost

Now X. turning Slide to

and not fixed progress in government two Both our our any continuing projects Warren NuScale. Warren to in are take expect the to The of additions Radford other includes do we and quarter. segment the forecast fourth Radford additional projects, investment and and

NuScale, for it the application approval its its receive no with open year. December, on IV milestone the track concluded NRC NuScale a final in items. design cleared As in to when major review this of Phase design September remains of

in by Funding million We're cost of half actively financial Energy the this earlier $XXX XXXX additional third-party potential was in approved investors. discussions in provided month, of Also up engaged investors. saving to the systems. second Department with

Mike? highlights call the and provide for now few outlook our over XXXX. turn to I'll And Mike to for XXXX a

Mike Steuert

Please Thank X. you, to turn Slide Carlos.

While for cash, results, fourth plus Cash slightly completed we year project. strong, are from preliminary unable final the a ago. billion, XXXX. to was expected closeout marketable at from to million $XXX year-end flow securities highlights be financial up can we key our is a announce $X Fluor's of in unaudited provide a quarter benefiting

cash. cash domestic of XX% available balance year-end at represents total Our

to exchange expected gains a ago, Corporate a G&A year as be XXXX by primarily losses up for ago. million, million driven year foreign expense $XXX $XXX compared is from to

of is of $XXX cost million; following. of be exit with million pension million of XXXX, and million; tax million, XXXX, associated charges $XXX $XXX settlement costs dividend plan. of noncash year we full million XXXX, of be $XXX deferred impacting the paid Restructuring of $XX a for noncash other would $XXX given $XX and write-off approximately reduction Primary which to noncash announced performance and noncash; assets impairment the in For our expense are our payments dividends U.K. the the million. expected our in

to to want the of update discuss provide slide our initiatives, strategic our I Before September. outlook, Please on XX. XXXX on call financial in few a we review an addressed I turn

assets For our interest seen we including significant PX our Europe. have in those initiative, in monetization

received We indications our assets. also have of American for interest

overhead We make across are organization. progress on the continuing expenses reducing to

related have In the and past started overhead few real months, our to estate reduce we expense. footprint

million this previously fourth the by run the savings annual of achieve to expect We quarter disclosed in of rate $XXX year.

to continue our We are of financial us transactions that and process other to debt position. sheet examining enhancing along AMECO strengthen with the through our cash the position reduction of allow will and in our sale balance

to other to goal substantial asset sufficient rating. sales cash Our remains receivable and maintain investment-grade our generate from collections,

commenting on I will slide our guidance conclude which for by is XXXX, XX. on

$X.XX adjusted We operations. continuing XXXX are share establishing of earnings guidance per a share from range $X.XX per to

restructuring any special excluding guidance. from are other expense We or items nonrecurring our

are from expect as excluding third-party guidance, provided be our We by NuScale funding we also investors. expenses additional will

we Our which to reporting discontinued business, guidance excludes also we as are and this any operations. earnings divest year our AMECO from expect

improvement rate modestly for Reflecting $XX expect XXXX, restructuring XX%; over a $XX pursuit XXXX; assumptions down expense in approximately new costs. backlog and minor XXXX $XX tax growth quarter; we approximately XXXX million on to criteria, year-end include to of per with a revised Our awards million adjusted in XXXX. revenue compared modest million G&A in approximately of

to below previously $XXX utilized our approximately of announced quarter, In I fourth cash million fund Projects on what cash the XXXX. in want comment we anticipated. also we Challenge flow to

requirements occurred We already $XXX funding first of which our two-thirds so in this XXXX. remaining million projects, fund have in expect portion we A the far to to loss quarter. approximately of cash of related has

X%; of and progresses. of Moving Services Infrastructure Chemicals the to X.X%; margins of to & Diversified to anticipate approximately finally, full margins Power X% margins approximately X%; as in X.X% of the to & We approximately and Government XX. Industrial Energy to of Mining X%. improving year X% & X% year slide margins margins approximately group X%,

beyond note turn we can remarks that we to over and our financial additional want filings G&A no -- in today we it to or our delay our information press that in release. excuse in Before Q&A, regarding there's the share what provided me, we

we term, reviews While concluded when the Form be anticipate may are near investigation SEC our XX-K complete. the not in filing our

that, we ready take With questions. are operator, to

Operator

Thank you. first now [Operator our Fisher Instructions] Please Steven question We'll from take from go UBS. ahead.

open. is line Your

Steven Fisher

I'll guess questions further but Thanks. some have those. the I Great. morning. SEC investigation, to hold did have Good on on I off

Because what I a now being to business before. would delayed like are to is few So seeing which you in which have maybe $X.XX could to revenues earnings something seems of extent your months of relative guess, ago? guidance part contributing be starting have with, would what like government a thought the meaningful you the XXXX, there it XXXX been $X.XX

And the the expectations margin but off, segment too isn't think were. for E&C far I

much projects in and been So now but revenue about would what little on E&C little lower they seeing of a few be how are going proceeding. to you're the months have think a revenues thinking a I what bit than ago? talk front bit, you said were up maybe just are we the

Carlos Hernandez

have XXXX that is, a one question. been into happened, had couple projects that have XXXX, that as Yes, tell have thanks them. been of the several in projects new methanol from canceled, been can moved being you Steve, me projects awards that there Rovuma of canceled, couple let What of -- for

that's, probably of in high. So been to XXXX, the number not a revenue right-hand the We for why projects. think, but revenue reason I is still the movement there modest bit has growth a as little -- the expect do

Steven Fisher

release And If the just developments there? talked your some more? miss projects? those then, talking remarks in you about a bit you're about are two prepared you Can what are What little didn't on in it developments that recent the Okay. what were, I projects. recent talk

still I big some but making on And picture results negative then, quarterly mean, the maybe you're the is surprises turnaround, have bigger the here. clearly that, progress

to you. your I going Thank terms more have visibility of now to extent going you -- what's some So guess do on and what around in in forward arms quarters? cleaner

Mike Steuert

in events result in various file me few and open able of investigations, why word lot here parts. a a a a Form that's answer the more projects. remain which the bit for use our expect And of And turns year we -- the financials to use question as XX-K. be precise the little the as -- Yes, on the Because subsequent we're let different word that of can't not out.

estimates prior in complete are our And filing us to because part, that adjust a for driven requires occur impacts others. the year. that comment more that's sensitive a a why impacts accounting projects. to we events our There that's, couple made all that just those of of perhaps date. projects the percent changes than to all we indicated subsequent that little that large And That for that that really

the some We've liabilities a had non-recurring, the that pension had costs. in costs allowed was year Certainly, essentially we for unusual pension fourth past cap quarter expenses. reduce over on really the thing to which were That and our some us good adjustment, U.K. restructuring Fluor. future

of improve expect that and as we'll E&C see or expect in restructuring those into well of those company the as that terms the And move indicated, we year. of continue as sectors -- think in well I I we -- as to We through costs XXXX. move do some to segments made XXXX. other comment as performance the through we we

So operational. it's

be We improved are performance seeing throughout to that's gradual going XXXX.

Steven Fisher

helpful. But or I something just, the Okay. sensitivity again, there's I That's developments that different? know their the are projects in two this performance, if some projects. deteriorating could. Is is on these here,

Mike Steuert

Form those left of have projects as projects We'll our transpires deterioration that the how we quarter No, for see issue through the subsequent adjustments. open we before as It's it's se. XX-K. we've move first performance a that per not all file to

Steven Fisher

it over. turn Okay. Thanks. I'll

Operator

Suisse. next now ahead. Credit question go Jamie Please Cook And our from take we'll from

open. Your line is

Jamie Cook

and my million two-third the which on flow what's any in about versus But $XXX second cash side. think flow of your XXXX. for half question, if Understanding, in first morning. generation the drag said cash I year, Mike, of we you Good guess cash expectation terms is is Hi. first half? of how the

up material to trying -- Do trying decisions there's to updated if to right. And do sales, I I'm asset AMECO in there billion want is like other that just Is the are $X question we get driving we're it Government off now we potential to second that what selling big, how reduce understand it still for sales. now? other how an sale. Thank the sounds proceeds is just assets is, know just potentially number and then could then, it understand Is cyclicality? asset the proceeds? And guess I reading to I'm the guess be on it the given process thought we have I'm given my you. table.

Mike Steuert

Okay.

and our you've quarter as past, then receive me be you first depending quite the up a substantially as strengthens through as cash Let very year. on be It's on we Seasonally, and down, even somewhat through cash how our the well. in we as It the cash move negative. bit -- burn flow the as you can year is flow move move from address advances flow. through month-to-month, seen that advances can variable. and But projects we

loss to as to And quarter But we going of the our portion generation our we operations do flow we strengthen need to expect were through cash from in second cash the that about to XXXX. fund that the of expect move projects we've a talked fund capital XXXX. do we substantial

generation should see to those for expect fund part projects our of in plan losses cash our we So, now the right our XXXX. flow on the major

Jamie Cook

Okay.

Alan Boeckmann

one comment add just that. to me Let more

I'm the on is at of the that actions keep Mike But as of came team -- exactly Government implementation think to the look and out this said our you really the with operational group, swift all right. comment I Carlos and review. strategic pleased

a means possible. this generate our strengthened have cash our at this we investment-grade recall, believe financial now And credit rating, we see to make pleased position, primary maintaining I'm we're is and to extremely we and objective. where with additional regard. -- in So that that you'll if

Carlos Hernandez

Yes.

to just very both It's business. because and we substantially business me viable Let interest a from and very strong something well-funded many we've strategic got earnings Government valuable add reimbursable. [ph]. the known buyers reason, [plan] for is that cash had flow And that, always financial and

when that Most be Alan keep But that going going of -- to were contributor for to and to stated, able is business. credit the significant and so Government to buyers the we're flow, divest has reasons a as that announced organization. to this our we're we able pleased cash we're approached us the earnings of we keep

our efforts been generation. on focused and cash people very conservation have Our and

As the in the $X.X we a result, we than had which as of XXXX, billion anticipated. more of end is had bank,

have this successful same to been We more of in a expect year claims year. do monetizing number and next the of and

sale, by encouraged AMECO -- will excess PX We're be And the half. with reduced investment more in of real course, we've the raise or significant proceeding efforts of And in cost cash interest the will The of dividend and our cash our which the capital than associated resulting relieve annual estate. we're savings us cost by and reductions business. expenditures savings. that the

really Government we're And stated, talented maintaining Government. of the keep investment-grade the to going as obviously to combination objective of sheet and support an its Mike and these of very the strong drove So people. our to rating, benefits our decision factors keep maintain balance a

Jamie Cook

to you before AMECO were an provided we because to for Government just think together? about range it one, when the AMECO a business range updated provide if how and you're do But willing have

and just And that what the PX strategic As I'm remain Fluor's estate investments? to about real you're Fluor's then, is thinking it the portfolio? contemplating will other assets

Mike Steuert

this, rating domestic real amount of of to but the PX to we're give our of sell AMECO, transactions our individual modestly combination Jamie, sale debt of on of give maintain we some the -- investment-grade estate, investments, and on us necessary position. our reduce will not our to we cash that sale haven't think do ranges going cash the enhance

Jamie Cook

Thanks. get back Okay. I’ll in queue.

Operator

from And Citi. now Please next go Andrew ahead. we'll question from our take Kaplowitz

Your line is open.

Andy Lee

Thanks taking for Lee Andy my question. for Kaplowitz. It's guys. Hey, on Andy

in comparing in XXXX question little Services. your E&C our the margins guidance of bit terms first QX the a different Diversified that just for & segments Infrastructure margins Power and lower our outlook So for XXXX seemed to the

So just the else just difference lower-than-expected or there driving few or the a can months about that? there? little ago, bit it talk is you versus mean, a is anything is it seasonality, revenue I like that's

Carlos Hernandez

the we've that start for off to Andy to follow-up. past have is me said answer year are problem be let a still XXXX transition of going the Mike – in and Look, with that working So ask us. maybe And that projects. part of I'll we we – some

to marketplace. when so gave credibility trying our we we're And the in guidance, regain

So Mike, seeing the there's in still we a we that, are add understanding make to go. progress year But a believe that be you lot going going XXXX. we want we're guidance giving we through as of are it to unknown to something? do

Mike Steuert

the took charges projects we year outlook zero often the margins projects We for of year. infrastructure and lower will have with in this we a that that's last on commented margin number through have the impacting infrastructure

Andy Lee

Okay. Got it. on secondly And – NuScale. on the then

But now to necessary guys versus new think the you the for it likely fund how you just to ourselves investors funding ultimately? NuScale. investors find I mentioned to hope find is –

Alan Boeckmann

This Alan. is

to me Let that. respond

with It's gate that the of the the milestone the attract gate process improved. We probably in is think starting we're coming NuScale. response. of a that will are entire statement right give investors. the into us – the several that through Carlos cover the it most plus actually in significant potential get to will to that process. X. in overhead fairly cost opportunity that mentioned is this funding rote maybe now our That be seeing The is for And through critical projects We significant rest September. investors confidence to approval provide that NRC third-party investors discussions

good do realization. it's asked – it. well entity glad I'm you believe a way to We is this that we its commercial yeah, question. So very on

Andy Lee

it. Okay. Thanks. Got

Operator

Baird. We'll from ahead. Andrew now take question from go next Wittmann our Please

is line open. Your

Andrew Wittmann

Excuse me.

talked extra you've got about I a bit to $XXX that accomplish understand today, what – that million talked on to the restructuring million run wanted putting cash just is I delivers that incremental expect $XXX previously more $XXX just that on needed here. savings that we want go are rate savings Mike actions. to planned cost Looks or is. million that little cash line? guys. the And Sorry, to into clarify about for restructuring you're into should bottom the extra like and of you about charges savings that call restructuring the

Mike Steuert

So the costs generate are some real footprint of estate and going savings restructuring our reduce forward. to

headcount going Some other contribute business overhead. to the corporate in as savings to in the before, reduce reduce restructuring in business result rate to million occur costs also the They'll units. $XXX in run in are units majority the ones the and even of part improvement And savings. And is be overhead as lower we opposed mentioned to allocations to corporate. that will reflected that

So you numbers even going things. in range much it the see forward, that business you – it the of of corporate won't all It's but won't rather a see in margins. wide

of range Some a just taken cost wide the non-cash it's our improve to structure of is and and cash actions company. it across

Andrew Wittmann

cost do But okay. you the your you'll is exceed to though expecting So that targets that – outlined on – previous be synergies? you able

Mike Steuert

We see we of in the business to we the $XXX expected Yes, savings quarter cost said this million year. fourth in by do. our

Andrew Wittmann

Okay.

Mike Steuert

expense. the lot to – that margins business the a opposed in in the in will of business be corporate G&A guess, I unit units as

Andrew Wittmann

Great.

course. Of

Okay. was And then awards. question second just guess on the I my

don't product petchem largest one I award. in the if job Chinese for like seems So, job EPC comment for in the awards the of if of That quarter here. you I large know the but like here maybe large it this awards guess, nylon on seemed could as and one quarter the the the not the

size recall are and that I how you're particular? price risk? the job to I in going the job the just China. of to get to execute that to And the a China. that in just while of I EPC in manage seeing on an been yard that wanted you wanted you're terms one sense of And on risk fixed know fabrication for a you've job? going the can't particularly And lump-sum how is understand obviously,

Carlos Hernandez

meets then Yes. us that And our one for our and happened adequate we're That that's comfortable to with a we And And get information ways have with this scope of and one. is the lump-sum to project what's with information a to for all vendor that the some thanks as do have procurement and now lump-sum and that comfortable can defined question. projects the at development point phase. we the projects exactly adequately reimbursable FEED respect criteria. converted

We have basis project at some been will on that reimbursable we and point, it lump-sum. executing to convert a

Andrew Wittmann

it. was Mike very nice Got more a million kind $XXX detail question a that. job closeout. is clerical was then And of that? you on here. a little The closeout bit I wondering just just if could give us What

Mike Steuert

disclosing are not We that.

Andrew Wittmann

Okay. Thanks.

Operator

question take now from from And Michael Research. next our we'll Dudas Vertical Please go ahead.

open. is line Your

Michael Dudas

projects this projects ramp out the you XXXX? moving Good in with in oil for that or transition bit ground for morning you're delays happen your you given get XXXX remarks to called pipeline relative how the indications gentlemen. certainly slight a what right. the decline a Maybe from I in in could some markets to more relative that towards aside backlog confidence what's reasonable guess for the later to Carlos anticipate maybe look virus prepared your looking insight the announced on you some remarks at your in prepared you year -- the happening clients you little indicated and that add given in looking a hearing does give to

Carlos Hernandez

at very point. of that our E&C It some we in much identified solid looks Well, pipeline. pretty this pipeline

develop to picking full working that we what on we've into EPC we're see work going is FEEDs think work. been the in have up more mining I EPC as in mining

new in by definitely going awards. pipeline going but XXXX to result to definitely So, sorry exceed I'm is we're exceed I XXXX that -- a going can't we're exceed lot, new to say XXXX our but XXXX awards that

Michael Dudas

into kind side, bit And the that price second the like you're though on inflect sensing visibility is a into XXXX move energy sense there could with that of given your caution of relative going maybe as is year? clients? But a of the a from there we half oil and buyers

Carlos Hernandez

don't a plans. to the as I capital forward their coronavirus. are we as But they that talk Well, with they going don't concerned about obviously -- impediment see clients long-term expenditure

disciplined obviously, are they any I that more be going clients expect our But contracted to don't than are now have much announced. what more than plans the past the So, been they had about previously in that.

Michael Dudas

follow-up Contract know is now see or into then of little on very these And business mean the back re-competes changes play Terrific. more as risk side how it's cash you model for view fold and I what Plateau can you later got the in what and some into Government model, I you Government my even have, as the bit improved revenues into on XXXX maybe what Fluor's the we click opportunities. through this and supportive a booking move XXXX? flow that that out that

Carlos Hernandez

managing. you in position Well, as space with labs know have the very strong we a a we're DOE number that very, of

this well-positioned interest And a is But have the We with obviously, I business those have awards of lot from going prospective additional areas our that business of, in a be the FEMA changing. LOGCAP are to strong is as not think -- well. side but for we're as predictable of business that the in the And business. as well buyers lot we to have -- of we government.

Michael Dudas

Appreciate, Lot sight. of Carlos. you. this pointed bright the Thank

Carlos Hernandez

Thank Mike. Yeah. you,

Operator

Sachs. Revich And from take next we'll now, you. question ahead. Goldman go from our Please Thank Jerry

open. is line Your

Jerry Revich

Yes, hi, good morning everyone.

Carlos Hernandez

Jerry. Hi,

Jerry Revich

that scope include cash about? to outflows how projects, additional as for would Warren and talking we're helpful? $XXX And you complete around Radford us that the legacy a be context just of sense of million of addressable many projects out well? can $XXX what expected Just give million the So does

Mike Steuert

second projects XX Yes. the charges that It the on. we quarter includes in took really

those that actually There's handful those of that Now represent cash. a settlements all don't cash are of flow. generated

And we some that include of Radford adjustments the non-cash. have And in $XXX some And and the accounting them then are But of does XXXX. two-thirds it Warren. funding subsequent and that requirements the were forward yes, that's that cash this what expect just represents. of million about going occur year to ones of do again,

Jerry Revich

include that had And in on say that of did sorry, non-cash projects the Radford QX include how many a appreciating fact And Warren? bunch you charges? identified projects does Does the it total? and

Mike Steuert

I Radford include I exact it of would XX outflows. material at number and don't It hand, say does perhaps the yes, will cash to X have XX the Warren, Right. does. but represent

Jerry Revich

X percentage be projects will XXXX Okay. you the to exiting on of your hit And current schedules? those completion lastly, if XX what

Mike Steuert

we're a complete But most be by of the as to expect the will will will Warren We in occur XXXX. in just end That's why lot funding of started that XXXX XXXX. of some recent over roll the such as complete those into end ones XXXX. the more A saying of we we majority XXXX. few

Jerry Revich

what just it range And about services you one sorry, Considering talk let these Government these business considering XXXX? XXXX, add more substantial chop exiting the a please. there's continuing into looks to folks me the gave of like you projects to just still number the on can time projects retain wood confidence on

Carlos Hernandez

by will going largest be the Well is number PX to one have going Jerry in by end maybe of we AMECO have number monetization of be savings to buyer we're cash. to CapEx. we're that QX. expect a which And We're sell have to a as QX claims. we selling of in going we to of having -- -- and generate mentioned, The ways a

one we quarter For those. in example, the that recorded the just one fourth is of

be generate that we some need So going we're the to to the the project of then to we have cash cover and charges. million that able $XXX increasing confidence

Jerry Revich

you. Thank Okay.

Operator

go from And Deutsche our next now Dillard ahead. we'll take Chad Please from question Bank.

open. is line Your

Chad Dillard

guys. morning, good Hi,

Carlos Hernandez

Good morning.

Mike Steuert

Good morning.

Chad Dillard

sure just I the cash want make So had for to around arms conversions I XXXX. my

a restructuring flow talked realizing burn, projects into of about but wanted ultimately, the just target understand hoping bridge cash achieve to cash million expecting I what of about in also XXXX? post you leverage you provide So closeouts net I it's to guys guess income And to cash working you from was sort from swings are $XXX could CapEx. capital

Mike Steuert

for cash having flow statements single project go you for project-by-project different manage that and really we aggressively And It's Given to hard complex time from basis. different we where beginning Fluor positive. very guidance. to finalizing down are, reconciliation cash we're giving It's way guidance. cash we is we're is for why cash not our earnings every be to very profile. the XXXX. of detailed our for And the a most a we it's through our something on all the because really very intent and This flow projects it a is has manage earnings cash. give balance, first That's our

obviously, also on projects but Now, announced pursue of position complicated remain aggressively one we project JV that. a quarter the positive in fact we that's in the cash that basis. when have a our projects very a position It's by those loss in we like is a second

the time. cash and that We projects are have pull over it. complicates in we that out complete that that the not partners really impacts And

provide So year, as in required return cash flow. of our retaining through fund we're we high of But And insight operations XXXX. project guidance from losses. giving now, terms level we'll business cash that both fund from right on flow continuing expect most we expectation just to the the will our government this additional go including in

Chad Dillard

question Got it. little what just It's margin bit guidance. wider certainly then E&C historically. been the a And it's on than

So you the talk could bookends just of was to about and I think how each what just about that? represent hoping

Mike Steuert

margins right. that such part the LNG XXXX the other E&C year. projects throughout of The in again the our the the projects for reflects of awarded of some in looking other how progress we go in throughout this margins, as some year. projects were first Obviously year, lower and as some as of kick All these we were

year. quarter-to-quarter it the we impacted -- as strengths. fact by that highly the margin XXXX that's So the the these And really in impacts we how our specific development expect projects it's what impacts That's progress very move why improving is margins throughout year. throughout

Chad Dillard

it I’ll Thanks. pass on.

Operator

Michael ahead. our Bank America. you. Thank take go question We'll Feniger Please next from of from

un-mute Your line. your open. Mr. Feniger Feniger, line please is I'm away. Mr. stepped afraid

Our Markets. from Please Capital from ahead. is next go question Sean KeyBanc Eastman

is open. line Your

Sean Eastman

gentlemen. my taking for Hi, question. Thanks

around door? would a that the in around fund dynamic. little going needed to a around just the that year portion loss are claims are just particular projects. pin the around And possible a line flow, comments of on sight It gives fund terms able much to the Just being those the what claims of to back operating of substantial confidence things what's cash down cash context get if your be bit how helpful to getting in be seem to given you those driving tricky cash of in

Mike Steuert

or Sure. it's forecast complex. It's I mean, observation is tricky that your difficult revenue. claim to correct

difficulties forecast. get XXXX on have flow cash so don't it into difficult how a spotty based going manage of But rely You'd forward to lot not significant our looking and any revenue. We the factor for on is claim we There's to lawyers your to because so at involved. money. that business is

some And years can claims of to take resolve. the

Sean Eastman

you versus balance XQ the targeted it Okay. divestitures, meaningfully tick billion we $X That's fairly I'm the the line a laid government that's here wondering see on billion cash in seems. out retaining achieving now with that But of in just point we some did at readily on up time XXXX? whether $X and that goal achieved And had post domestic helpful. then available balance XQ guys see

Mike Steuert

receivables that sales remains through sheet certainly year. contribute forward. collection personal sales we of asset asset my to outstanding going move are our through working AMECO that on that potential move as other all So and will balance the we're the and XXXX, various that towards we But goal as

Sean Eastman

PX Okay. half, it's whether half line? rough a second first on, sales, of and And then in terms kind estate is there real thought time of the of any kind versus

Mike Steuert

to are differently. And we let put It's --given me both. going it financials our be --

we to And right cash position, maximize of going we're the opposed get we to try financial proceed very our going deliberative, in to very, as value And and how something do are with be to terms those effort Given use sales. just quick. upfront.

Sean Eastman

me. surprisingly, whether Yards light in Fab several LNG work issues or pause to there? for you impacting articles this Got just Yard around Fab any seen about the it, in China, not of kind in deliveries written of curious, the coronavirus I've okay, some of delays at foresee last outbreak quick some module one Canada, of

Carlos Hernandez

No.

when February don't Our on work wait Yard at we we up point, see see we'll ramp delays. got any But completely. obviously, to XX. and this back And

Sean Eastman

time. Okay, gentlemen. Thanks I it. the for appreciate

Carlos Hernandez

Thank you.

Operator

like I'd Mike conference appears Mr. additional remarks. the time. to there It or this closing no are Steuert, turn questions for to at you, further back any

Mike Steuert

Before we of to changes the financial want I accounting are That are just that could statements because events. are open. impact subject a that period of reiterate, conclude, subsequent we we still processes, books now, where future our to the in

reasonably they are as go we hope reviews, the perhaps projects, it, that we as as mention occur that's change to And that projects our did somewhat why possible. more large we the there, are two because that to of completion were soon successful through

what's the And to how impossible the did remainder just next we and Everybody those that's two mention has are that, through go why forecast happen. books month. of we it's going open, be that to projects. to as this And aware month

Carlos Hernandez

Okay. structure of you strategy operator. tangible down that, started to Mike, all of on to you today. our the thank you. Last call path for with our thank to we changes position and and year, long-term business making And actionable participating And success. thanks for

of our forward. And a our now, to will positive our results with by business we deliver sense clients And continue look we act driven talented workforce, to and urgency ahead shareholders. our as drive to

to appreciate So Fluor. your we support greatly

you. Thank

Operator

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

disconnect. You may now

Fluor (FLR) 18 Feb 202019 Q4 Earnings call transcript