EX-99.1 2 a09-21664_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Fluor Corporation

Keith Stephens / Brian Mershon

6700 Las Colinas Blvd

Media Relations

Irving, Texas 75039

469.398.7624 / 469.398.7621 tel

 

 

469.398.7000 main tel

Ken Lockwood / Jason Landkamer

 

Investor Relations

 

469.398.7220 / 469.398.7222 tel

 

 

News Release

 

 

FLUOR REPORTS SECOND QUARTER EPS OF $0.93 AND

NEW AWARDS OF $6.8 BILLION

 

IRVING, TEXAS — August 10, 2009 — Fluor Corporation (NYSE: FLR) today announced financial results for its second quarter ended June 30, 2009.  Net earnings attributable to Fluor were $169 million, or $0.93 per diluted share, compared with $208 million or $1.12 per diluted share for the same period last year.  Segment profit for the quarter was $309 million, compared with $392 million in the second quarter of 2008 which included a pre-tax gain of $79 million, or $0.27 per diluted share, from the sale of the Company’s joint venture interest in the Greater Gabbard Offshore Wind Farm project.  Segment margin improved to 5.8 percent, from 5.4 percent a year ago excluding the Greater Gabbard gain.  Revenue declined 8 percent to $5.3 billion in the second quarter of 2009, down from $5.8 billion a year ago, driven by declines in the Oil & Gas, Global Services and Power segments.

 

New project awards for the second quarter were substantial at $6.8 billion, compared with $6.4 billion in new awards a year ago.  Current quarter awards included a large mining project and a $1.3 billion oil sands project.  Consolidated backlog rose to $30.9 billion, up from $29.1 billion last quarter, but down 6 percent from a year ago primarily due to cancellations and scope reductions of Oil & Gas projects during the first quarter.  At the end of the second quarter,

 


 

the company was notified that it had won the LOGCAP IV competition for northern Afghanistan, with a total contract value of potentially more than $7 billion over five years.  New awards under this contract will be recognized as specific task orders are incrementally funded.

 

Corporate G&A expense for the quarter was $42 million, down from $62 million in the second quarter of 2008.  The reduction in G&A expense is primarily due to lower compensation related expenses and overhead cost reduction efforts.  Fluor’s financial condition continues to be very strong, with cash plus current and non-current marketable securities totaling $2.3 billion, which compares with $2.4 billion a year ago.

 

“Fluor’s focus on specific near-term prospects in its diversified end markets has once again allowed us to record substantial new bookings in a very challenging economic environment,” said Chairman and Chief Executive Officer Alan Boeckmann.  “While we have posted strong results to date, we remain sensitive to the pace of global economic recovery which could impact the timing of future new awards.”

 

Outlook

 

Given the strength of our results to date, the company is maintaining its 2009 EPS guidance at a range of $3.80 to $4.10 per share.

 

Business Segments

 

Fluor’s Oil & Gas segment reported second quarter revenue of $3.0 billion, down 9 percent from the second quarter of 2008, while segment profit grew by 7 percent to $181 million.

 

2


 

Results were driven by a reduced level of project execution activity, offset by an increase in segment margin in the quarter.  New oil, gas and petrochemical awards in the second quarter totaled $2.9 billion, including the $1.3 billion award for Imperial Oil’s Kearl oil sands project in Canada.  Ending backlog at June 30, 2009 for Oil & Gas was $15.8 billion, a 25 percent decline from $20.9 billion a year ago.

 

Fluor’s Industrial & Infrastructure segment reported second quarter revenue of $998 million, up 9 percent over last year.  Segment profit for the second quarter was $34 million, compared to $121 million a year ago.  Results from last year included $79 million from the sale of Fluor’s joint venture interest in the Greater Gabbard Offshore Wind Farm project.  Segment performance for the current quarter was impacted by lower margins on certain projects due to a higher content of construction activity.  Segment new awards were $2.2 billion for the quarter, compared with $2.4 billion a year ago.  Backlog rose to $9.8 billion, up 38 percent from $7.1 billion a year ago.

 

Revenue for the Government segment was $479 million for the second quarter of 2009, compared with $300 million a year ago.  Segment profit was $34 million, up threefold from $11 million a year ago.  Improved results in the quarter were primarily due to the contributions from LOGCAP IV task orders, FEMA task orders and the favorable outcome of a claim related to a completed project in Afghanistan.  Second quarter new awards for the segment totaled $866 million, including approximately $600 million at Savannah River from American Recovery & Reinvestment Act (ARRA) stimulus funding, and $160 million for LOGCAP IV task orders.  Ending backlog rose to $974 million, a substantial increase from $316 million a year ago.

 

3


 

The Global Services segment reported revenue of $452 million, down 35 percent from the second quarter of last year, and segment profit declined by 48 percent to $34 million.  These declines were primarily due to sharply reduced levels of small capital projects and continued delay of refinery shutdown and turnaround work.  New awards were $533 million, which compares with $673 million last year.  Backlog at quarter end was $2.6 billion at the end of the second quarter, down slightly from $2.7 billion a year ago.

 

Fluor’s Power segment reported revenue of $335 million, down 36 percent from $522 million last year.  Segment profit increased to $27 million in the second quarter, compared with $25 million a year ago.  Revenue declined as a large coal-fired project in Texas progressed closer to completion.  Segment profit and margin improved due to favorable achievement of milestones on certain projects, and a greater mix of higher margin engineering and front-end projects.  Power segment new awards were $192 million, and ending backlog for the quarter was $1.8 billion, compared with $1.9 billion a year ago.

 

Results for the Six Months

 

Net earnings attributable to Fluor for the first six months of 2009 were $374 million, or $2.05 per diluted share.  This compares with $345 million, or $1.86 per diluted share, for the first six months of 2008.  Revenue rose 5 percent to $11.1 billion, compared with $10.6 billion in the first half of last year.

 

4


 

Second Quarter Call

 

Fluor will host a conference call at 5:30 p.m. Eastern Daylight Time on Monday, August 10, which will be webcast live on the internet and can be accessed at 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.  Certain non-GAAP financial measures, as defined under SEC rules, are included in this press release and may be discussed during the conference call.  A reconciliation of these measures is included in this press release which will be posted in the investor relations section of the company’s website.

 

About Fluor Corporation

 

Fluor Corporation (NYSE: FLR) designs, builds and maintains many of the world’s most challenging and complex projects.  Through its global network of offices on six continents, the company provides comprehensive capabilities and world-class expertise in the fields of engineering, procurement, construction, commissioning, operations, maintenance and project management.  Headquartered in Irving, Texas, Fluor is a FORTUNE 200 company and had revenues of $22.3 billion in 2008.  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 outlook 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: failure to achieve projected backlog, revenue and/or earnings levels; the effects of the current worldwide financial crisis on us, our suppliers and subcontractors; the Company’s failure to receive anticipated new contract awards; client cancellations of, scope adjustments to or deferrals of existing contracts, including our government contracts that may be terminated at any time, and the related impact on staffing levels and costs; decreased capital investment or expenditures, or a failure to make anticipated increased capital investment or expenditures, by the Company’s clients; the Company’s and our clients’ ability to access capital markets; the cyclical nature of many of the markets the Company serves, which may be impacted by the current economic downturn and commodity price decreases; delays or defaults in client payments; increased costs, especially on projects governed by fixed price contracts;  failure to meet timely completion or performance standards that could result in higher costs, reduced profits or, in some cases, losses on projects; failure to obtain favorable results in existing or future litigation or dispute resolution proceedings; the financial viability of our clients, subcontractors, suppliers and joint venture or teaming

 

5


 

partners; foreign economic and political uncertainties; the potential impact of certain tax matters including, but not limited to, those from foreign operations and any audits by tax authorities; and the timely and successful implementation of strategic initiatives. 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 February 25, 2009. 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 other than as required by law to update its forward-looking statements in light of new information or future events.

 

6


 

FLUOR CORPORATION

CONSOLIDATED FINANCIAL RESULTS

(in millions, except per share amounts)

Unaudited

 

CONSOLIDATED OPERATING RESULTS

 

THREE MONTHS ENDED JUNE 30

 

2009

 

2008

 

Revenue

 

$

5,292.6

 

$

5,773.6

 

Cost and Expenses:

 

 

 

 

 

Cost of Revenue

 

4,975.6

 

5,450.0

 

Gain on sale of joint venture interest

 

—

 

(79.2

)

Corporate G&A

 

42.0

 

61.7

 

Net Interest Income

 

(3.3

)

(12.3

)

Total Cost and Expenses

 

5,014.3

 

5,420.2

 

Earnings before Income Taxes

 

278.3

 

353.4

 

Income Tax Expense

 

101.9

 

135.5

 

Net Earnings

 

176.4

 

217.9

 

Net Earnings attributable to noncontrolling interest

 

(7.1

)

(9.9

)

Net Earnings atrributable to Fluor Corporation

 

$

169.3

 

$

208.0

 

Basic Earnings per Share

 

 

 

 

 

Net Earnings

 

$

0.94

 

$

1.17

 

Weighted Average Shares

 

179.1

 

176.3

 

Diluted Earnings per Share

 

 

 

 

 

Net Earnings

 

$

0.93

 

$

1.12

 

Weighted Average Shares

 

181.2

 

184.3

 

New Awards

 

$

6,770.7

 

$

6,393.3

 

Backlog

 

$

30,892.1

 

$

33,009.9

 

Work Performed

 

$

5,132.1

 

$

5,603.9

 

 

SIX MONTHS ENDED JUNE 30

 

2009

 

2008

 

Revenue

 

$

11,090.4

 

$

10,580.6

 

Cost and Expenses:

 

 

 

 

 

Cost of Revenue

 

10,424.3

 

9,999.7

 

Gain on sale of joint venture interest

 

 

 

(79.2

)

Corporate G&A

 

67.4

 

101.2

 

Net Interest Income

 

(8.0

)

(22.2

)

Total Cost and Expenses

 

10,483.7

 

9,999.5

 

Earnings before Income Taxes

 

606.7

 

581.1

 

Income Tax Expense

 

209.1

 

218.9

 

Net Earnings

 

397.6

 

362.2

 

Net Earnings attributable to noncontrolling interest

 

(23.6

)

(17.6

)

Net Earnings atrributable to Fluor Corporation

 

$

374.0

 

$

344.6

 

Basic Earnings per Share

 

 

 

 

 

Net Earnings

 

$

2.06

 

$

1.94

 

Weighted Average Shares

 

179.7

 

176.0

 

Diluted Earnings per Share

 

 

 

 

 

Net Earnings

 

$

2.05

 

$

1.86

 

Weighted Average Shares

 

181.2

 

183.5

 

New Awards

 

$

12,264.2

 

$

12,092.1

 

Backlog

 

$

30,892.1

 

$

33,009.9

 

Work Performed

 

$

10,783.0

 

$

10,208.2

 

 

7


 

FLUOR CORPORATION

Unaudited

 

BUSINESS SEGMENT FINANCIAL REVIEW

($ in millions)

 

THREE MONTHS ENDED JUNE 30

 

 

 

 

 

2009

 

2008

 

Revenue

 

 

 

 

 

 

 

 

 

Oil & Gas

 

 

 

 

 

$

3,028.3

 

$

3,342.2

 

Industrial & Infrastructure

 

 

 

 

 

998.2

 

912.5

 

Government

 

 

 

 

 

478.9

 

300.4

 

Global Services

 

 

 

 

 

452.3

 

696.1

 

Power

 

 

 

 

 

334.9

 

522.4

 

Total Revenue

 

 

 

 

 

$

5,292.6

 

$

5,773.6

 

 

 

 

 

 

 

 

 

 

 

Segment Profit Margin $ and %

 

$

 

%

 

$

 

%

 

Oil & Gas

 

$

180.8

 

6.0

 

$

169.0

 

5.1

 

Industrial & Infrastructure

 

34.1

 

3.4

 

121.4

 

13.3

 

Government

 

33.5

 

7.0

 

11.1

 

3.7

 

Global Services

 

34.1

 

7.5

 

66.1

 

9.5

 

Power

 

26.8

 

8.0

 

24.8

 

4.7

 

Total Segment Profit Margin $ and %

 

$

309.3

 

5.8

 

$

392.4

 

6.8

 

 

 

 

 

 

 

 

 

 

 

Less: Greater Gabbard Sale

 

—

 

 

 

(79.2

)

 

 

Segment Profit Margin $ and %

 

$

309.3

 

5.8

 

$

313.2

 

5.4

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED JUNE 30

 

 

 

 

 

2009

 

2008

 

Revenue

 

 

 

 

 

 

 

 

 

Oil & Gas

 

 

 

 

 

$

6,397.8

 

$

5,945.5

 

Industrial & Infrastructure

 

 

 

 

 

2,174.7

 

1,708.7

 

Government

 

 

 

 

 

849.7

 

580.1

 

Global Services

 

 

 

 

 

994.4

 

1,402.3

 

Power

 

 

 

 

 

673.8

 

944.0

 

Total Revenue

 

 

 

 

 

$

11,090.4

 

$

10,580.6

 

 

 

 

 

 

 

 

 

 

 

Segment Profit Margin $ and %

 

$

 

%

 

$

 

%

 

Oil & Gas

 

$

381.6

 

6.0

 

$

306.5

 

5.2

 

Industrial & Infrastructure

 

62.2

 

2.9

 

150.8

 

8.8

 

Government

 

61.2

 

7.2

 

18.8

 

3.2

 

Global Services

 

89.6

 

9.0

 

119.6

 

8.5

 

Power

 

47.0

 

7.0

 

45.8

 

4.9

 

Total Segment Profit Margin $ and %

 

$

641.6

 

5.8

 

$

641.5

 

6.1

 

 

 

 

 

 

 

 

 

 

 

Less: Greater Gabbard Sale

 

—

 

 

 

(79.2

)

 

 

Segment Profit Margin $ and %

 

$

641.6

 

5.8

 

$

562.3

 

5.3

 

 

8


 

FLUOR CORPORATION

Unaudited

 

SELECTED BALANCE SHEET ITEMS

($ in millions, except per share amounts)

 

 

 

JUNE 30,

 

DECEMBER 31,

 

 

 

2009

 

2008

 

Cash and Marketable Securities, including noncurrent

 

$

2,325.5

 

$

2,130.8

 

Total Current Assets

 

4,908.0

 

4,668.5

 

Total Assets

 

6,907.9

 

6,423.6

 

Total Short-Term Debt

 

121.7

 

133.2

 

Total Current Liabilities

 

3,290.3

 

3,162.2

 

Long-term Debt

 

17.7

 

17.7

 

Shareholders’ Equity

 

2,996.1

 

2,671.3

 

 

 

 

 

 

 

Total Debt to Capitalization % (based on Shareholders’ Equity)

 

4.4

%

5.3

%

Shareholders’ Equity Per Share

 

$

16.66

 

$

14.71

 

 

 

 

 

 

 

SELECTED CASH FLOW ITEMS

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED JUNE 30

 

2009

 

2008

 

 

 

 

 

 

 

Cash Provided by Operating Activities

 

$

380.0

 

$

690.3

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital Expenditures

 

(120.6

)

(127.1

)

Net (purchases) maturities of Marketable Securities

 

(834.5

)

(343.0

)

Proceeds from sale of joint venture interest

 

 

 

79.2

 

Other Items

 

18.2

 

17.0

 

Cash Utilized by Investing Activities

 

(936.9

)

(373.9

)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

Repurchase of common shares

 

(61.3

)

—

 

Cash Dividends

 

(45.6

)

(44.5

)

Repayment of Convertible Debt

 

(11.9

)

(5.1

)

Other Items

 

(15.5

)

23.2

 

Cash Utilized by financing Activities

 

(134.3

)

(26.4

)

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash

 

38.8

 

20.4

 

 

 

 

 

 

 

Decrease in Cash and Cash Equivalents

 

$

(652.4

)

$

310.4

 

 

 

 

 

 

 

Depreciation

 

$

88.6

 

$

78.5

 

 

9


 

FLUOR CORPORATION

Supplemental Fact Sheet

Unaudited

 

NEW AWARDS

($ in millions)

 

THREE MONTHS ENDED JUNE 30

 

2009

 

2008

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

2,937

 

43

%

$

3,016

 

47

% 

(3

)%

Industrial & Infrastructure

 

2,243

 

33

%

2,411

 

38

%

(7

)%

Government

 

866

 

13

%

87

 

1

%

NM

 

Global Services

 

533

 

8

%

673

 

11

%

(21

)%

Power

 

192

 

3

%

206

 

3

%

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL NEW AWARDS

 

$

6,771

 

100

% 

$

6,393

 

100

%

6

%

 

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED JUNE 30

 

2009

 

2008

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

4,961

 

40

%

$

7,303

 

60

%

(32

)%

Industrial & Infrastructure

 

4,770

 

39

%

2,797

 

23

%

71

%

Government

 

1,109

 

9

%

186

 

2

%

NM

 

Global Services

 

809

 

7

%

1,310

 

11

%

(38

)%

Power

 

615

 

5

%

496

 

4

%

24

%

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL NEW AWARDS

 

$

12,264

 

100

% 

$

12,092

 

100

% 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

BACKLOG TRENDS

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS OF JUNE 30

 

2009

 

2008

 

% Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas

 

$

15,770

 

51

%

$

20,920

 

63

%

(25

)%

Industrial & Infrastructure

 

9,778

 

32

%

7,095

 

22

%

38

%

Government

 

974

 

3

%

316

 

1

%

NM

 

Global Services

 

2,587

 

8

%

2,744

 

8

%

(6

)%

Power

 

1,783

 

6

%

1,935

 

6

%

(8

)%

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL BACKLOG

 

$

30,892

 

100

% 

$

33,010

 

100

%

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

12,590

 

41

%

$

14,914

 

45

%

(16

)%

The Americas

 

5,457

 

17

%

1,503

 

5

%

NM

 

Europe, Africa and the Middle East

 

9,236

 

30

%

14,173

 

43

%

(35

)%

Asia Pacific

 

3,609

 

12

%

2,420

 

7

%

49

%

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL BACKLOG

 

$

30,892

 

100

%

$

33,010

 

100

%

(6

)%

 

NM = Not meaningful

 

10