EX-99.1 2 a08-6769_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Fluor Corporation
6700 Las Colinas Blvd
Irving, Texas 75039

 

Keith Stephens / Brian Mershon
Media Relations
469.398.7624 / 469.398.7621 tel

 

 

 

469.398.7000 main tel

 

Ken Lockwood / Jason Landkamer

469.398.7255 main fax

 

Investor Relations
469.398.7220 / 469.398.7222 tel

 

 

 

News Release

 

 

FLUOR POSTS RECORD PERFORMANCE FOR 2007 AND RAISES GUIDANCE FOR
2008

 

·                  4TH QUARTER EPS $2.82; FULL YEAR 2007 $5.85

·                  4TH QUARTER NEW AWARDS $6.3 BILLION

·                  BACKLOG RISES TO $30.2 BILLION

 

IRVING, TEXAS – February 28, 2008 – Fluor Corporation (NYSE: FLR) today announced record financial results for its fourth quarter and fiscal year ended December 31, 2007.  Net earnings for 2007 rose 102 percent to a record $533 million, or $5.85 per diluted share, compared with $263 million, or $2.95 per diluted share in 2006.  In addition to very strong operating performance, net earnings in the fourth quarter included $123 million, or $1.35 per diluted share, from the final settlement of a tax audit for certain prior years.  Full year results reflect very strong growth in the Oil & Gas, Global Services, Industrial & Infrastructure and Power segments, and improved performance in the Government segment.  Consolidated operating profit for the year was $802 million, up 44 percent from $556 million a year ago.  Operating margin increased to 4.8 percent from 4.0 percent in 2006.  Revenue rose 19 percent over 2006 to a record $16.7 billion.

 

Full year new awards rose to an all-time high of $22.6 billion, up from $19.3 billion a year ago, driven by increases in Oil & Gas, Power and Global Services.  Fourth quarter new awards of $6.3 billion set a record for a single quarter and drove year-end backlog to $30.2

 


 

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billion, the company’s ninth consecutive quarterly increase and up 38 percent from the end of last year.

 

                “2007 was the best year in the company’s history, with record-breaking financial performance across all key metrics,” said Chairman and Chief Executive Officer Alan Boeckmann.  “Global demand for energy, infrastructure and basic materials are fueling substantial opportunities, and when combined with our $30 billion backlog, we expect Fluor to continue to deliver strong growth in 2008.”

 

                Corporate G&A expense for the year increased to $194 million, from $179 million a year ago, mainly due to higher incentive and stock-based compensation costs.  Fluor’s cash and marketable securities grew to $1.7 billion at year-end versus $976 million a year ago, reflecting substantial positive cash flows from operations.

 

Outlook

 

                As evidenced by the strong fourth quarter new awards, Fluor continues to be very successful at winning major new projects across the diverse markets that it serves.  The company expects ongoing strength in downstream oil and gas, polysilicon production, power generation and pollution reduction, mining and operations and maintenance.  Recent project wins in the Government segment are also encouraging, although not expected to have a material impact until late 2008.   As a result of the strength of fourth quarter new awards and very strong operating performance, the company is raising its earnings guidance for 2008 to a range of $5.10 to $5.50, from the previous range of $4.90 to $5.30 per share.

 


 

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Business Segments

 

                Fluor’s Oil & Gas segment reported a 42 percent increase in operating profit, which totaled $433 million for the year.  Revenue increased 56 percent to $8.4 billion, an increase of $3.0 billion over 2006.  Operating margin for the year was 5.2 percent.  New awards for the segment totaled $13.5 billion, a 30 percent increase over last year, driven mainly by sizable downstream refining awards.  Ending backlog rose to $18.5 billion, a 54 percent increase from $12.0 billion a year ago.

 

Fluor’s Industrial & Infrastructure segment reported operating profit of $101 million, a 32 percent increase from $76 million in 2006.  Operating margin improved to 3.0 percent from 2.4 percent a year ago.  Improved results in 2007 reflect strong contributions from mining projects and progress on major infrastructure programs in the segment.  Revenue of $3.4 billion was up 7 percent over last year.  New awards totaled $3.4 billion, which brought year-end backlog to $6.1 billion, an 11 percent increase over 2006.

 

                The Government segment posted operating profit of $29 million, up 65 percent from a year ago.  The segment’s 2006 results were adversely impacted by substantial loss provisions on fixed price projects.  As expected, revenue declined to $1.3 billion from $2.9 billion last year, mainly due to substantially lower levels of disaster relief activities for FEMA and Iraq reconstruction activity in 2007, and the completion of the Department of Energy contract at Fernald in 2006.  Operating margin improved to 2.2 percent in 2007.  New awards totaled $1.2 billion for the year, but do not yet include any values for LOGCAP IV where Fluor was awarded a contract that has been delayed pending resolution of a formal protest.  In addition, in January of

 


 

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2008, a Fluor-led team was awarded a Department of Energy contract at Savannah River which is also delayed pending resolution of a formal protest.

 

Operating profit for the Global Services segment grew by 32 percent in 2007 to $201 million, from last year’s $152 million, reflecting strong performance across the segment.  Revenue rose 15 percent to $2.5 billion, mainly driven by growth in operations and maintenance work and the equipment services business line.  Operating margin rose to 8.2 percent compared with 7.1 percent a year ago.  Full year new awards of $2.2 billion were up 39 percent over 2006, bringing year-end backlog to $2.5 billion.

 

Fluor’s Power segment reported operating profit of $38 million, a substantial improvement over $4 million in 2006.   Revenue more than doubled to $1.2 billion, reflecting strong new awards and progress on power generation and plant betterment projects.   Operating margin was 3.3 percent compared with 0.8 percent a year ago.  New awards in 2007 totaled $2.2 billion, including two 800 megawatt coal-fired power units in Texas.  Power segment backlog was $2.4 billion at year-end, up from $1.3 billion at the end of 2006.

 

Fourth Quarter Results

 

Net earnings for the fourth quarter were $259 million, or $2.82 per diluted share, compared with $81 million, or 90 cents per diluted share in 2006.  The fourth quarter of 2007 included $123 million, or $1.35 per diluted share, from the final settlement of an Internal Revenue Service income tax audit for certain prior years.  Operating profit for the fourth quarter increased 51 percent to $248 million, up from $164 million a year ago.  All business segments posted very

 


 

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strong growth in the quarter, except Government which was modestly lower.  Revenue for the quarter rose 30 percent to $4.7 billion, compared with $3.6 billion a year ago, reflecting significant increases in the Oil & Gas, Industrial & Infrastructure and Power segments.  Fourth quarter new awards of $6.3 billion were 29 percent higher than the same quarter in 2006.

 

Fourth Quarter and Year-End Conference Call

 

                Fluor will host a conference call at 9:30 a.m. Eastern Standard Time on Thursday, February 28, which will be webcast live on the internet and can be accessed by logging onto http://investor.fluor.com.  A supplemental slide presentation will be available shortly before the call begins.  The webcast and presentation will be archived for 30 days following the call.

 

About Fluor Corporation

 

                Fluor Corporation (NYSE: FLR) provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management.  Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company with revenue of $16.7 billion in 2007.  For more information, visit www.fluor.com.

 

Forward-Looking Statements: This release contains forward-looking statements, including, without limitation, statements relating to future backlog, revenue and earnings, expected performance of the Company’s business and the expansion of the markets which the Company serves. The forward-looking statements are based on current management expectations and involve risks and uncertainties. Actual results may differ materially as a result of a number of factors, including, among other things: the cyclical nature of many of the markets the Company serves; difficulties or delays incurred in the execution of contracts, including performance issues caused in whole or in part by our joint venture or teaming partners, resulting in cost overruns or liabilities; the Company’s ability to hire and retain qualified personnel; failure to achieve projected backlog, revenue and/or earnings levels; failure to meet timely completion or performance standards that could result in higher costs, reduced profits or, in some cases, losses on projects; customer cancellations of, or scope adjustments to, existing contracts; the ability of the government to unilaterally terminate the Company’s contracts; failure to obtain favorable results in existing or future litigation or dispute resolution proceedings; the potential impact of certain tax matters including, but not limited to, those from foreign operations and any audits by tax authorities;

 


 

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the timely and successful implementation of strategic initiatives; decreased capital investment or expenditures, or a failure to make anticipated increased capital investment or expenditures, by the Company’s clients; the Company’s failure to receive anticipated new contract awards; increased liability risks in any of the markets the Company serves; the Company’s inability to successfully convert front-end engineering services into future project awards; and, changes in global business, economic, political and social conditions. Caution must be exercised in relying on these and other forward-looking statements. Due to known and unknown risks, the Company’s results may differ materially from its expectations and projections.

 

Additional information concerning these and other factors can be found in press releases as well as the Company’s public periodic filings with the Securities and Exchange Commission, including the discussion under the heading “Item 1A.Risk Factors” in the Company’s Form 10-K filed on March 1, 2007. Such filings are available either publicly or upon request from Fluor’s Investor Relations Department: (469) 398-7220. The Company disclaims any intent or obligation to update its forward-looking statements in light of new information or future events.

 


 

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FLUOR CORPORATION

CONSOLIDATED FINANCIAL RESULTS

(in millions, except per share amounts)

Unaudited

 

CONSOLIDATED OPERATING RESULTS

 

THREE MONTHS ENDED DECEMBER 31

 

2007

 

2006

 

Revenues

 

$

4,712.5

 

$

3,633.2

 

Costs and Expenses:

 

 

 

 

 

Cost of Revenues

 

4,464.2

 

3,469.3

 

Corporate G&A

 

51.8

 

50.1

 

Net Interest Income

 

(17.5

)

(5.0

)

Total Costs and Expenses

 

4,498.5

 

3,514.4

 

Earnings before Income Taxes

 

214.0

 

118.8

 

Income Tax Expense (Benefit)

 

(45.5

)

38.1

 

Net Earnings

 

$

259.5

 

$

80.7

 

Basic Earnings per Share

 

 

 

 

 

Net Earnings

 

$

2.96

 

$

0.93

 

Weighted Average Shares

 

87.5

 

86.8

 

Diluted Earnings per Share

 

 

 

 

 

Net Earnings

 

$

2.82

 

$

0.90

 

Weighted Average Shares

 

91.8

 

89.3

 

New Awards

 

$

6,315.4

 

$

4,904.1

 

Backlog

 

$

30,170.8

 

$

21,877.7

 

Work Performed

 

$

4,587.1

 

$

3,469.7

 

 

YEAR ENDED DECEMBER 31

 

2007

 

2006

 

Revenues

 

$

16,691.0

 

$

14,078.5

 

Costs and Expenses:

 

 

 

 

 

Cost of Revenues

 

15,888.5

 

13,522.0

 

Corporate G&A

 

193.9

 

178.8

 

Net Interest Income

 

(40.5

)

(4.3

)

Total Costs and Expenses

 

16,041.9

 

13,696.5

 

Earnings before Income Taxes

 

649.1

 

382.0

 

Income Tax Expense

 

115.8

 

118.5

 

Net Earnings

 

$

533.3

 

$

263.5

 

Basic Earnings per Share

 

 

 

 

 

Net Earnings

 

$

6.11

 

$

3.05

 

Weighted Average Shares

 

87.3

 

86.3

 

Diluted Earnings per Share

 

 

 

 

 

Net Earnings

 

$

5.85

 

$

2.95

 

Weighted Average Shares

 

91.1

 

89.2

 

New Awards

 

$

22,590.1

 

$

19,276.2

 

Backlog

 

$

30,170.8

 

$

21,877.7

 

Work Performed

 

$

16,264.0

 

$

13,637.0

 

 


 

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FLUOR CORPORATION

Unaudited

 

BUSINESS SEGMENT FINANCIAL REVIEW

($ in millions)

 

THREE MONTHS ENDED DECEMBER 31

 

2007

 

 

 

2006

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

2,369.5

 

 

 

$

1,492.6

 

 

 

Industrial & Infrastructure

 

999.0

 

 

 

858.9

 

 

 

Government

 

300.5

 

 

 

359.7

 

 

 

Global Services

 

685.6

 

 

 

710.6

 

 

 

Power

 

357.9

 

 

 

211.4

 

 

 

Total revenues

 

$

4,712.5

 

 

 

$

3,633.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit (Loss) Margin $ and %

 

$

 

%

 

$

 

%

 

Oil & Gas

 

$

132.5

 

5.6

 

$

85.7

 

5.7

 

Industrial & Infrastructure

 

30.5

 

3.1

 

23.5

 

2.7

 

Government

 

5.7

 

1.9

 

9.7

 

2.7

 

Global Services

 

58.8

 

8.6

 

45.4

 

6.4

 

Power

 

20.8

 

5.8

 

(0.4

)

(0.2

)

Total Operating Profit (Loss) Margin $ and %

 

$

248.3

 

5.3

 

$

163.9

 

4.5

 

 

 

 

 

 

 

 

 

 

 

YEAR ENDED DECEMBER 31

 

2007

 

 

 

2006

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

8,369.9

 

 

 

$

5,368.0

 

 

 

Industrial & Infrastructure

 

3,385.0

 

 

 

3,171.1

 

 

 

Government

 

1,308.2

 

 

 

2,859.9

 

 

 

Global Services

 

2,460.0

 

 

 

2,137.9

 

 

 

Power

 

1,167.9

 

 

 

541.6

 

 

 

Total revenues

 

$

16,691.0

 

 

 

$

14,078.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit Margin $ and %

 

$

 

%

 

$

 

%

 

Oil & Gas

 

$

432.8

 

5.2

 

$

305.7

 

5.7

 

Industrial & Infrastructure

 

101.0

 

3.0

 

76.4

 

2.4

 

Government

 

29.3

 

2.2

 

17.7

 

0.6

 

Global Services

 

201.4

 

8.2

 

152.4

 

7.1

 

Power

 

38.0

 

3.3

 

4.3

 

0.8

 

Total Operating Profit Margin $ and %

 

$

802.5

 

4.8

 

$

556.5

 

4.0

 

 


 

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FLUOR CORPORATION

Unaudited

 

SELECTED BALANCE SHEET ITEMS

($ in millions, except per share amounts)

 

 

 

DECEMBER 31, 2007

 

DECEMBER 31, 2006

 

Cash and Marketable Securitites

 

$

1,714.4

 

$

976.1

 

Total Current Assets

 

4,059.5

 

3,323.6

 

Total Assets

 

5,796.2

 

4,874.9

 

Total Short-Term Debt

 

307.2

 

372.5

 

Total Current Liabilities

 

2,860.1

 

2,406.3

 

Long-term Debt

 

17.7

 

187.1

 

Shareholders’ Equity

 

2,274.5

 

1,730.5

 

 

 

 

 

 

 

Total Debt to Capitalization %

 

12.5

%

24.4

%

Shareholders’ Equity Per Share

 

$

25.65

 

$

19.66

 

 

 

SELECTED CASH FLOW ITEMS

($ in millions)

 

 

 

YEAR ENDED DECEMBER 31

 

 

 

2007

 

2006

 

 

 

 

 

 

 

Cash Provided by Operating Activities

 

$

905.0

 

$

296.1

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital Expenditures

 

(284.2

)

(274.1

)

Net Purchases of Marketable Securities

 

(539.2

)

0.0

 

Other Items

 

30.0

 

36.3

 

Cash Utilized by Investing Activities

 

(793.4

)

(237.8

)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

Cash Dividends

 

(70.4

)

(52.9

)

Other Items

 

104.1

 

171.3

 

Cash Provided by Financing Activities

 

33.7

 

118.4

 

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash

 

53.8

 

10.3

 

 

 

 

 

 

 

Increase in Cash and Cash Equivalents

 

$

199.1

 

$

187.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

$

144.9

 

$

124.1

 

 


 

Page 10 of 10

 

FLUOR CORPORATION

Supplemental Fact Sheet

Unaudited

 

 

NEW AWARDS

($ in millions)

 

THREE MONTHS ENDED DECEMBER 31

 

2007

 

2006

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

4,176

 

66%

 

$

3,024

 

61%

 

38%

 

Industrial & Infrastructure

 

1,456

 

23%

 

773

 

16%

 

88%

 

Government

 

207

 

3%

 

231

 

5%

 

(10)%

 

Global Services

 

370

 

6%

 

526

 

11%

 

(30)%

 

Power

 

106

 

2%

 

350

 

7%

 

(70)%

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL NEW AWARDS

 

$

6,315

 

100%

 

$

4,904

 

100%

 

29%

 

 

YEAR ENDED DECEMBER 31

 

2007

 

2006

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

13,540

 

60%

 

$

10,410

 

54%

 

30%

 

Industrial & Infrastructure

 

3,364

 

15%

 

4,455

 

23%

 

(24)%

 

Government

 

1,223

 

5%

 

2,170

 

11%

 

(44)%

 

Global Services

 

2,237

 

10%

 

1,606

 

9%

 

39%

 

Power

 

2,226

 

10%

 

635

 

3%

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL NEW AWARDS

 

$

22,590

 

100%

 

$

19,276

 

100%

 

17%

 

 

 

BACKLOG TRENDS

($ in millions)

 

AS OF DECEMBER 31

 

2007

 

2006

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

18,517

 

61%

 

$

11,986

 

55%

 

54%

 

Industrial & Infrastructure

 

6,053

 

20%

 

5,438

 

25%

 

11%

 

Government

 

740

 

3%

 

840

 

4%

 

(12)%

 

Global Services

 

2,481

 

8%

 

2,337

 

10%

 

6%

 

Power

 

2,380

 

8%

 

1,277

 

6%

 

86%

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL BACKLOG

 

$

30,171

 

100%

 

$

21,878

 

100%

 

38%

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

13,326

 

44%

 

$

9,010

 

41%

 

48%

 

The Americas

 

1,855

 

6%

 

2,692

 

12%

 

(31)%

 

Europe, Africa and the Middle East

 

12,894

 

43%

 

9,080

 

42%

 

42%

 

Asia Pacific

 

2,096

 

7%

 

1,096

 

5%

 

91%

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL BACKLOG

 

$

30,171

 

100%

 

$

21,878

 

100%

 

38%

 

 

NM=Not meaningful

 

FLRF