-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FNa+ZTNKHbz+N7Nu0SLv4/oY9yghtXqQgo1eyElOXQkZg06B1MRI4o+RQzN0gP2B nnYHgx7csXFM9yczOO/2FQ== 0000892569-97-000689.txt : 19970318 0000892569-97-000689.hdr.sgml : 19970318 ACCESSION NUMBER: 0000892569-97-000689 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970317 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLUOR CORP/DE/ CENTRAL INDEX KEY: 0000037748 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 950740960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07775 FILM NUMBER: 97557866 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 FORM 10-Q FOR PERIOD ENDED JANUARY 31, 1997 1 UNITED STATES 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, 1997 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________to______________ Commission File Number: 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
3353 Michelson Drive, Irvine, CA 92698 ----------------------------------------------------------------------------- (Address of principal executive offices) (714) 975-2000 ----------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 past 90 days. Yes (X) No ( ) As of February 28, 1997 there were 84,131,278 shares of common stock outstanding. 2 FLUOR CORPORATION FORM 10-Q JANUARY 31, 1997
TABLE OF CONTENTS PAGE Part I: Financial Information Condensed Consolidated Statement of Earnings for the Three Months Ended January 31, 1997 and 1996..................................................... 2 Condensed Consolidated Balance Sheet at January 31, 1997 and October 31, 1996................................................................. 3 Condensed Consolidated Statement of Cash Flows for the Three Months Ended January 31, 1997 and 1996.............................................. 5 Notes to Condensed Consolidated Financial Statements................................ 6 Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................................... 7 Changes in Backlog.................................................................. 10 Part II: Other Information.............................................................. 11 Signatures................................................................................. 12 .
3 PART I: FINANCIAL INFORMATION FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS Three Months Ended January 31, 1997 and 1996 UNAUDITED
In thousands, except per share amounts 1997 1996 ---------- ---------- REVENUES $3,434,061 $2,402,414 COSTS AND EXPENSES Cost of revenues 3,327,287 2,303,342 Corporate administrative and general expenses 10,870 13,263 Interest expense 5,542 3,441 Interest income (5,263) (7,395) ---------- ---------- Total Costs and Expenses 3,338,436 2,312,651 ---------- ---------- EARNINGS BEFORE INCOME TAXES 95,625 89,763 INCOME TAX EXPENSE 33,590 32,315 ---------- ---------- NET EARNINGS $ 62,035 $ 57,448 ========== ========== NET EARNINGS PER SHARE $ .73 $ .68 ========== ========== DIVIDENDS PER COMMON SHARE $ .19 $ .17 ========== ========== SHARES USED TO CALCULATE EARNINGS PER SHARE 84,866 84,407 ========== ==========
See Accompanying Notes. 2 4 FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1997 and October 31, 1996 UNAUDITED
January 31, October 31, $ in thousands 1997 1996* ----------- ----------- ASSETS Current Assets Cash and cash equivalents $ 124,574 $ 246,964 Marketable securities 44,121 69,378 Accounts and notes receivable 767,861 742,547 Contract work in progress 578,027 561,490 Deferred taxes 44,456 50,157 Inventory and other current assets 151,310 126,287 ---------- ---------- Total current assets 1,710,349 1,796,823 ---------- ---------- Property, Plant and Equipment (net of accumulated depreciation, depletion and amortization of $862,902 and $821,212, respectively) 1,755,170 1,677,662 Investments and goodwill, net 217,362 192,879 Other 322,394 284,362 ---------- ---------- $4,005,275 $3,951,726 ========== ==========
(Continued On Next Page) * Amounts at October 31, 1996 have been derived from audited financial statements. 3 5 FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1997 and October 31, 1996 UNAUDITED
January 31, October 31, $ in thousands 1997 1996* ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts and notes payable $ 648,442 $ 704,186 Commercial paper 159,526 29,916 Advance billings on contracts 434,617 445,807 Accrued salaries, wages and benefit plans 249,951 290,426 Other accrued liabilities 156,552 175,026 Current portion of long-term debt 2,739 207 ---------- ---------- Total current liabilities 1,651,827 1,645,568 ---------- ---------- Long-term debt due after one year 365 2,967 Deferred taxes 54,781 42,632 Other noncurrent liabilities 574,093 590,833 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 - 84,029,206 shares and 83,791,197 shares, respectively 52,518 52,369 Additional capital 582,478 573,037 Retained earnings 1,123,653 1,077,559 Unamortized executive stock plan expense (31,973) (32,538) Cumulative translation adjustments (2,467) (701) ---------- ---------- Total shareholders' equity 1,724,209 1,669,726 ---------- ---------- $4,005,275 $3,951,726 ========== ==========
See Accompanying Notes. *Amounts at October 31, 1996 have been derived from audited financial statements. 4 6 FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended January 31, 1997 and 1996 UNAUDITED
$ in thousands 1997 1996 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 62,035 $ 57,448 Adjustments to reconcile net earnings to cash (utilized by) provided by operating activities: Depreciation, depletion and amortization 56,987 42,412 Deferred taxes 18,394 9,818 Change in operating assets and liabilities (185,221) (57,957) Other, net (18,931) (11,108) --------- --------- Cash (utilized by) provided by operating activities (66,736) 40,613 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (138,119) (107,910) E & C businesses acquired (30,603) - Proceeds from sales/maturities of marketable securities 25,257 21,521 Purchase of marketable securities - (33,636) Proceeds from sale of property, plant and equipment 7,074 5,956 Investments, net (9,469) (27,168) Trust fund contribution (22,593) - Other, net (6,853) (6,579) --------- --------- Cash utilized by investing activities (175,306) (147,816) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 128,544 11,970 Payments on long-term debt - (320) Cash dividends paid (15,941) (14,176) Stock options exercised 8,615 11,021 Other, net (1,566) (254) --------- --------- Cash provided by financing activities 119,652 8,241 --------- --------- Decrease in cash and cash equivalents (122,390) (98,962) Cash and cash equivalents at beginning of period 246,964 292,934 --------- --------- Cash and cash equivalents at end of period $ 124,574 $ 193,972 ========= =========
See Accompanying Notes. 5 7 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, 1996 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, 1997 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, 1997 and its consolidated results of operations and cash flows for the three months ended January 31, 1997 and 1996. Certain 1996 amounts have been reclassified to conform with the 1997 presentation. (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, $ in thousands 1997 1996 ----------- ----------- Coal $ 36,866 $ 28,809 Supplies and other 49,424 45,118 -------- -------- $ 86,290 $ 73,927 ======== ========
(4) Cash paid for interest was $4.6 million and $1.2 million for the three month periods ended January 31, 1997 and 1996, respectively. Income tax payments, net of refunds, were $19 million and $4 million during the three month periods ended January 31, 1997 and 1996, respectively. 6 8 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 and the company's October 31, 1996 annual report on Form 10-K. RESULTS OF OPERATIONS Revenues for the three month period ended January 31, 1997 were $3.4 billion compared with $2.4 billion for the same period of 1996. Net earnings for the three month period ended January 31, 1997 were $62.0 million compared with $57.4 million for the same period of 1996. The increase in net earnings is primarily due to higher earnings from the Coal segment and lower corporate administrative and general expenses, offset by lower net interest. ENGINEERING AND CONSTRUCTION Revenues for the Engineering and Construction segment increased 45 percent for the three month period ended January 31, 1997 compared with the same period of 1996, due primarily to an increase in the volume of work performed. Despite the growth in revenues, operating profit for the three months ended January 31, 1997 increased only slightly compared with the same period of 1996. First quarter 1997 results were impacted by two items. As part of its normal review process, the company determined that certain of its actuarially determined insurance accruals substantially exceeded anticipated liabilities. Accordingly, a credit was recorded to adjust these accruals to appropriate levels. A majority of the insurance related credit was offset by provisions on two fixed price power projects identified as part of the company's recurring evaluation of projects in progress. Evaluation of cost implications and recoupment opportunities will continue in the second quarter, however, the company determined it was appropriate to record provisions at this time. Margins, which may fluctuate from time to time as a result of changes in both the timing and mix of engineering and construction projects, declined in the first quarter of 1997 compared with the same period of 1996. Lower margins reflect the impact of the stage of completion and mix of projects in progress, competitive market conditions and slower than anticipated earnings growth on recent investments. New awards for the three months ended January 31, 1997 were $3.6 billion compared with $3.0 billion for the three months ended January 31, 1996. Approximately 45 percent of first quarter 1997 new awards were for projects located outside the United States. The uncertain timing and, in some cases, large size of new awards can create variability in the company's award pattern, consequently, future award trends are difficult to predict with certainty. There were no significant large project awards in the first quarter of 1997. 7 9 The following table sets forth backlog for each of the company's Engineering and Construction business groups:
January 31, October 31, January 31, $ in millions 1997 1996 1996 ----------- ----------- ---------- Process $ 5,236 $ 4,903 $ 7,316 Industrial 6,374 6,496 4,061 Power/Government 3,430 3,621 3,157 Diversified Services 937 737 574 ------- ------- ------- Total backlog $15,977 $15,757 $15,108 ======= ======= ======= U.S. $ 7,486 $ 7,326 $ 6,642 Outside U.S. 8,491 8,431 8,466 ------- ------- ------- Total backlog $15,977 $15,757 $15,108 ======= ======= =======
The composition of backlog by business group has remained relatively unchanged since year end. Although backlog reflects business which is considered to be firm, cancellations or scope adjustments do occur. Backlog has been adjusted to reflect project cancellations, deferrals, and revised project scope and cost, both upwards and downwards. COAL Revenues increased 18 percent for the three month period ended January 31, 1997 compared with the same period in 1996. The increase was due primarily to increased sales of both metallurgical and steam coal, offset slightly by lower steam coal prices. The increase in metallurgical coal revenues reflects an increased market share of sales to steel producers. Steam coal revenues increased due primarily to higher demand from electric utility customers. Gross profit and operating profit increased for the three months ended January 31, 1997 compared with the same period in 1996 due primarily to the increased sales volume of both metallurgical and steam coal and lower costs of metallurgical coal. OTHER Net interest for the three months ended January 31, 1997 decreased compared with the same period of 1996 due primarily to lower interest earning assets in addition to higher short-term interest bearing liabilities. 8 10 In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123). Adoption of the new accounting standards prescribed by SFAS No. 123 is optional. The company will adopt the "disclosure only" alternative under SFAS No. 123 and continue accounting for its plans under previous accounting standards. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128). SFAS No. 128 redefines the standards for computing earnings per share and is effective for the company's fiscal year 1998. The company believes adoption of the new standards will not have a material impact on future earnings per share calculations. FINANCIAL POSITION AND LIQUIDITY The change in operating assets and liabilities from period to period is affected by the mix, stage of completion and commercial terms of engineering and construction projects. In 1996, operating working capital was favorably impacted by the receipt of a large customer advance. The company expects to have adequate resources available from operating cash flows, cash and short-term investments, revolving credit and other banking facilities, capital market sources and commercial paper to provide for its capital needs for the foreseeable future. During December 1996 the company filed a shelf registration statement with the Securities and Exchange Commission for the sale of up to $400 million of debt securities. In March 1997, $300 million of 6.95 percent notes due on March 1, 2007 were issued under this filing. The company anticipates using the proceeds for general corporate purposes, which may include working capital, capital expenditures, the reduction of commercial paper balances, a previously announced share repurchase program and possible acquisitions. In December 1996, TRS Staffing Solutions, the company's provider of temporary staffing personnel, acquired the ConSol group, which specializes in staffing personnel in the fields of information technology and allied health. For the three months ended January 31, 1997, capital expenditures were $138.1 million, including $88 million related to Massey Coal. Dividends paid in the three months ended January 31, 1997 were $15.9 million ($.19 per share) compared with $14.2 million ($.17 per share) for the same period of 1996. 9 11 FLUOR CORPORATION CHANGES IN BACKLOG Three Months Ended January 31, 1997 and 1996 UNAUDITED
$ in millions 1997 1996 --------- --------- Backlog - beginning of period $15,757.4 $14,724.9 New awards 3,590.6 2,988.5 Adjustments and cancellations, net (243.2) (434.6) Work performed (3,128.3) (2,170.6) --------- --------- Backlog - end of period $15,976.5 $15,108.2 ========= =========
10 12 PART II : OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. None. (b) Reports on Form 8-K. None. 11 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 17, 1997 /s/ J. Michal Conaway ---------------------------------------- J. Michal Conaway, Senior Vice President and Chief Financial Officer /s/ V.L. Prechtl -------------------------------------------- V. L. Prechtl, Vice President and Controller 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AT JANUARY 31, 1997 AND THE CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED JANUARY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS OCT-31-1997 JAN-31-1997 124,574 44,121 767,861 0 86,290 1,710,349 2,618,072 862,902 4,005,275 1,651,827 365 0 0 52,518 1,671,691 4,005,275 0 3,434,061 0 3,327,287 0 0 5,542 95,625 33,590 62,035 0 0 0 62,035 .73 .73
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