-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nkKnymBosqVgENCyXpcpO0KZ4vYIjYspHrxccecAYMaJOt4SDW2F/YZU8vG80JZe 7Ng5BifLSWJw/hrdPgsLXA== 0000037748-94-000016.txt : 19940318 0000037748-94-000016.hdr.sgml : 19940318 ACCESSION NUMBER: 0000037748-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940131 FILED AS OF DATE: 19940317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLUOR CORP/DE/ CENTRAL INDEX KEY: 0000037748 STANDARD INDUSTRIAL CLASSIFICATION: 1600 IRS NUMBER: 950740960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-07775 FILM NUMBER: 94516368 BUSINESS ADDRESS: STREET 1: 3333 MICHELSON DR CITY: IRVINE STATE: CA ZIP: 92730 BUSINESS PHONE: 7149752000 FORMER COMPANY: FORMER CONFORMED NAME: FLUOR CORP LTD DATE OF NAME CHANGE: 19710624 10-Q 1 TEST FILING 1Q94 10Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from to Commission File No. 1-7775 FLUOR CORPORATION (Exact name of registrant as specified in its charter) Delaware 95-0740960 (State or other jurisdiction of (I.R.S Employer I.D. No.) incorporation or organization) 3333 Michelson Drive, Irvine, CA 92730 (Address of principal executive offices) Registrant's telephone number including area code: (714)975-2000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes ( X ) No ( ) As of February 28, 1994 there were 82,186,958 shares of common stock outstanding. FLUOR CORPORATION FORM 10-Q January 31, 1994 TABLE OF CONTENTS PAGE Part I: Financial Information Condensed Consolidated Statement of Earnings for the Three Months Ended January 31, 1994 and 1993.. 2 Condensed Consolidated Balance Sheet at January 31, 1994 and October 31, 1993......................... 3 Condensed Consolidated Statement of Cash Flows for the Three Months Ended January 31, 1994 and 1993.. 5 Notes to Condensed Consolidated Financial Statements........................................ 6 Management's Discussion and Analysis of Financial Condition and Results of Operations............... 8 Condensed Consolidated Changes in Backlog.......... 11 Part II: Other Information........................ 12 Signatures........................................... 14 Part I: Financial Information FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS Three Months Ended January 31, 1994 and 1993 (In Thousands Except Per Share Amounts) UNAUDITED 1994 1993 REVENUES.............................. $2,057,665 $1,806,939 COSTS AND EXPENSES Cost of revenues.................... 1,976,626 1,740,868 Corporate administrative and general expenses................... 10,680 9,680 Interest expense.................... 4,230 4,603 Interest income..................... (4,869) (5,093) Total Costs and Expenses.............. 1,986,667 1,750,058 EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES................. 70,998 56,881 INCOME TAX EXPENSE.................... 27,000 21,200 NET EARNINGS.......................... $ 43,998 $ 35,681 NET EARNINGS PER SHARE................ $ 0.53 $ 0.43 DIVIDENDS PER COMMON SHARE............ $ 0.13 $ 0.12 SHARES USED TO CALCULATE EARNINGS PER SHARE............................... 82,415 82,210 See Accompanying Notes. -2- FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1994 and October 31, 1993 (Dollars in Thousands) ASSETS January 31, October 31, 1994 1993 * (Unaudited) Current Assets Cash and cash equivalents........... $ 258,994 $ 214,844 Marketable securities............... 87,635 97,335 Accounts and notes receivable....... 346,164 392,577 Contract work in progress........... 308,350 306,251 Net assets of discontinued operations......................... 175,960 172,822 Deferred taxes...................... 74,331 76,364 Inventories and other current assets 61,563 48,831 Total Current Assets............... 1,312,997 1,309,024 Property, plant and equipment (net of accumulated depreciation, depletion and amortization of $466,389 and $441,676, respectively) 1,135,065 1,100,909 Investments and goodwill, net......... 61,110 52,383 Other................................. 130,648 126,568 $2,639,820 $2,588,884 (Continued On Next Page) * Amounts at October 31, 1993 have been derived from audited financial statements. -3- FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1994 and October 31, 1993 (Dollars in Thousands) LIABILITIES AND SHAREHOLDERS' EQUITY January 31, October 31, 1994 1993 * (Unaudited) Current Liabilities Accounts and notes payable.......... $ 271,424 $ 289,721 Note payable to affiliate........... 13,650 30,000 Commercial paper.................... 29,983 30,053 Advance billings on contracts....... 230,351 194,695 Accrued salaries, wages and benefit plans...................... 164,261 194,270 Other accrued liabilities........... 221,017 190,447 Current portion of long-term debt... 2,099 1,687 Total Current Liabilities.......... 932,785 930,873 Long-term debt due after one year..... 59,226 59,637 Deferred taxes........................ 51,514 51,642 Other noncurrent liabilities.......... 517,382 502,610 Commitments and contingencies Shareholders' Equity Capital stock Preferred - authorized 20,000,000 shares without par value, none issued Common - authorized 150,000,000 shares of $0.625 par value; issued and outstanding - 82,144,429 shares and 82,093,207 shares, respectively............. 51,340 51,308 Additional capital.................. 479,636 478,204 Retained earnings (since October 31, 1987).............................. 568,004 534,678 Unamortized executive stock plan expense............................ (15,941) (16,828) Cumulative translation adjustments.. (4,126) (3,240) Total Shareholders' Equity......... 1,078,913 1,044,122 $2,639,820 $2,588,884 See Accompanying Notes. * Amounts at October 31, 1993 have been derived from audited financial statements. -4- FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended January 31, 1994 and 1993 (Dollars in Thousands) UNAUDITED 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings.......................... $ 43,998 $ 35,681 Adjustments to reconcile net earnings to cash provided (utilized) by operating activities: Depreciation, depletion and amortization..................... 27,134 28,501 Increase in net assets of discontinued operations.......... (3,138) (17,132) Deferred taxes..................... 906 (8,746) Change in operating assets and liabilities...................... 50,353 (62,999) Other, net......................... 2,236 8,473 Cash provided (utilized) by operating activities.......................... 121,489 (16,222) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures................ (64,644) (35,212) Proceeds from sale of property, plant and equipment................ 2,766 5,318 Sale of marketable securities....... 9,700 18,039 Other, net.......................... 647 2,642 Cash utilized by investing activities. (51,531) (9,213) CASH FLOWS FROM FINANCING ACTIVITIES Payments on note payable to affiliate.......................... (16,350) -- Cash dividends paid................. (10,672) (9,825) Payments on long-term debt.......... (72) (16,121) Stock options exercised............ 1,852 6,063 Other, net.......................... (566) (8,459) Cash utilized by financing activities. (25,808) (28,342) Increase (decrease) in cash and cash equivalents.................... 44,150 (53,777) Cash and cash equivalents at beginning of period................. 214,844 195,346 Cash and cash equivalents at end of period.............................. $ 258,994 $ 141,569 See Accompanying Notes. -5- FLUOR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED (1) The condensed consolidated financial statements do not include footnotes and certain financial information normally presented annually under generally accepted accounting principles and, therefore, should be read in conjunction with the company's October 31, 1993 annual report on Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three months ended January 31, 1994 are not necessarily indicative of results that can be expected for the full year. The condensed consolidated financial statements included herein are unaudited; however, they contain all adjustments (consisting of normal recurring accruals) which, in the opinion of the company, are necessary to present fairly its consolidated financial position at January 31, 1994 and the consolidated results of operations and cash flows for the three months ended January 31, 1994 and 1993. (2) Earnings per share is based on the weighted average number of common and, when appropriate, common equivalent shares outstanding in each period. Common equivalent shares are included when the effect of the potential exercise of stock options is dilutive. (3) Inventories comprise the following: January 31, October 31, 1994 1993 (Dollars in Thousands) Coal........................... $ 16,008 $ 15,375 Supplies and other............. 18,698 17,459 $ 34,706 $ 32,834 (4) Cash paid for interest was $3.0 million and $5.3 million for the three month periods ended January 31, 1994 and 1993, respectively. Income tax payments, net of refunds, were $7.0 million and $17.3 million in the three month periods ended January 31, 1994 and 1993, respectively. -6- (5) The Internal Revenue Service is currently examining the company's income tax returns for years 1987 through 1989. Management does not expect the resolution of any tax issues raised by the IRS for these years to have a material adverse effect on the company's consolidated financial position or results of operations. (6) In November 1992, the company announced its decision to exit its Lead business. As of October 31, 1992, the Lead business was classified as a discontinued operation and adjusted to estimated net realizable value. The company believes that its reserves for loss on disposal are adequate at January 31, 1994 in relation to its consolidated financial statements taken as a whole. During 1993 and the first quarter of 1994, the company made substantial progress toward the disposition of its Lead business. While the outcome of such disposition cannot be determined with certainty at this time, management's intent to dispose of the Lead business remains unaltered and management believes that a disposal will be accomplished during fiscal 1994. (7) In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No. 112). The statement requires accrual of the estimated cost of benefits provided by the employer to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 is not required by the company until fiscal year 1995. Although the precise method and impact of implementation is not known at this time, management believes the effect, based on the company's current benefit programs, will not be material. -7- FLUOR CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is provided to increase understanding of, and should be read in conjunction with, the condensed consolidated financial statements and accompanying notes. RESULTS OF OPERATIONS Revenues for the three month period ended January 31, 1994, increased to $2.1 billion from $1.8 billion for the same period in 1993. Net earnings for the three month period ended January 31, 1994 were $44.0 million compared with $35.7 million for the same period of 1993. ENGINEERING AND CONSTRUCTION Revenues for the Engineering and Construction segment increased 14 percent for the three month period ended January 31, 1994 compared with the same period in 1993, primarily due to an increase in the level of work performed. Engineering and Construction operating profit increased in the first quarter of 1994 compared with the first quarter of 1993 due to the increased volume of work performed, as well as a slight improvement in margins. The company experienced an increase in new awards of 13 percent to $2.3 billion for the three months ended January 31, 1994 compared with $2.1 billion for the three months ended January 31, 1993. New awards within the Hydrocarbon sector represented approximately 65 percent of total new awards for the first quarter of 1994. Over 70 percent of first quarter 1994 new awards consisted of international work, with the majority located in the European and Asia Pacific regions. This reflects new work within certain international markets, particularly within the Hydrocarbon sector, together with relatively modest domestic business opportunities. Backlog at both January 31, 1994 and October 31, 1993 was $14.8 billion, down slightly from $14.9 billion at January 31, 1993. The following table sets forth backlog for each of the company's business sectors: -8- January 31, October 31, January 31, ($ in millions) 1994 1993 1993 Hydrocarbon $ 6,861 $ 6,198 $ 4,666 Government 2,364 2,520 2,859 Process 2,333 2,441 3,294 Industrial 2,479 2,706 3,041 Power 778 889 1,076 Total $ 14,815 $ 14,754 $ 14,936 The ratio of international to total backlog was 43 percent at January 31, 1994. COAL Revenues for the Coal segment increased 9 percent for the three month period ended January 31, 1994 compared with the same period in 1993. This increase is due to a 20 percent increase in the sales volume of produced coal more than offsetting a decline in the sales volume of brokered coal. The sales price and cost per ton for both produced and brokered coal in the first quarter of 1994 was essentially unchanged compared with the same period of 1993. Gross margin increased due to a higher percentage of produced coal, which has a higher margin than brokered coal. Operating profit for the three months ended January 31, 1994 increased 23 percent compared with the three months ended January 31, 1993 primarily due to increased gross margin. OTHER Corporate administrative and general expenses increased $1.0 million for the three months ended January 31, 1994, compared with the same period of 1993 due primarily to higher stock price driven compensation plan expense. Net interest income for the three months ended January 31, 1994 was essentially level with the same period of 1993 due to the decline in interest expense offsetting a similar decline in interest income. The effective income tax rate for the three month period ended January 31, 1994 was essentially unchanged compared with the same period of 1993. -9- In November 1992, the Financial Accounting Standards board issued Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No. 112). The statement requires accrual of the estimated cost of benefits provided by the employer to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 is not required by the company until fiscal year 1995. Although the precise method and impact of implementation is not known at this time, management believes the effect, based on the company's current benefit programs, will not be material. DISCONTINUED OPERATIONS In November 1992, the company announced its decision to exit its Lead business. As of October 31, 1992 the Lead business was classified as a discontinued operation and adjusted to estimated net realizable value. The company believes that its reserves for loss on disposal are adequate at January 31, 1994 in relation to its consolidated financial statements taken as a whole. During 1993 and the first quarter of 1994, the company made substantial progress toward the disposition of its Lead business. While the outcome of such disposition cannot be determined with certainty at this time, management's intent to dispose of the Lead business remains unaltered and management believes that a disposal will be accomplished during fiscal 1994. FINANCIAL POSITION AND LIQUIDITY The company expects to have adequate resources available from cash and short-term investments currently on hand, plus available revolving credit facilities, capital market sources, and its commercial paper program to provide for its financing needs for the foreseeable future. For the three months ended January 31, 1994, capital expenditures were $64.6 million including $53.3 million related to on-going coal mine development. Dividends paid in the three months ended January 31, 1994 were $10.7 million ($.13 per share) compared with $9.8 million ($.12 per share) for the same period of 1993. The long-term debt to total capital ratio decreased slightly to 5.2 percent at January 31, 1994, compared with 5.4 percent at October 31, 1993, due to the increase in shareholders' equity from earnings net of dividends. -10- FLUOR CORPORATION CONDENSED CONSOLIDATED CHANGES IN BACKLOG (Dollars in Millions) UNAUDITED For the Three Months Ended January 31, 1994 1993 Backlog - beginning of period....... $ 14,753.5 $ 14,706.0 New awards.......................... 2,334.2 2,056.6 Adjustments and cancellations, net.. (407.3) (194.8) Work performed...................... (1,865.5) (1,632.3) Backlog - end of period............. $ 14,814.9 $ 14,935.5 -11- FLUOR CORPORATION PART II - Other Information Item 4. Submission of Matters to a Vote of Security Holders. (a) Date of meeting. The annual meeting of stockholders of Fluor Corporation was held on March 8, 1994 at the Hyatt Hotel, 17900 Jamboree Boulevard, Irvine, California. (b) Election of Directors. Directors elected - David P. Gardner 65,064,590 FOR 665,914 VOTED TO WITHHOLD AUTHORITY Gerald M. Glenn 65,099,700 FOR 630,804 VOTED TO WITHHOLD AUTHORITY William R. Grant 65,030,974 FOR 699,530 VOTED TO WITHHOLD AUTHORITY Vincent L. Kontny 65,107,330 FOR 623,174 VOTED TO WITHHOLD AUTHORITY Vilma S. Martinez 65,043,353 FOR 687,151 VOTED TO WITHHOLD AUTHORITY Other directors continuing in office - Hugh K. Coble Peter J. Fluor Bobby R. Inman Robert V. Lindsay Leslie G. McCraw Buck Mickel Dr. Martha R. Seger David S. Tappan, Jr. -12- (c) Matters voted upon Ratification of the appointment of Ernst & Young as auditors for 1994: 65,107,330 FOR 101,602 AGAINST 521,572 ABSTAIN -0- BROKER NON-VOTE Approval of amendments to 1988 Executive Stock Plan and executive compensation performance goals: 57,071,151 FOR 7,173,322 AGAINST 1,385,475 ABSTAIN 100,556 BROKER NON-VOTE Stockholder proposal regarding a senior executive and director compensation ceiling: 4,218,092 FOR 44,358,447 AGAINST 3,926,305 ABSTAIN 13,227,660 BROKER NON-VOTE (d) Terms of settlement between registrant and any other participant. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. None. (b) Reports on Form 8-K. None. -13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FLUOR CORPORATION (Registrant) Date: March 16, 1994 /s/ P.J. Trimble P.J. Trimble, Senior Vice President - Law and Secretary /s/ J. Michal Conaway J. Michal Conaway, Vice President - Finance -14- -----END PRIVACY-ENHANCED MESSAGE-----