Fluor Corporation (NYSE: FLR) today announced financial results
for its second quarter ended June 30, 2015. Net earnings
attributable to Fluor from continuing operations were $149 million,
or $1.00 per diluted share, compared with $163 million, or
$1.02 per diluted share a year ago. Consolidated segment
profit for the quarter was $282 million, down from $313 million in
the second quarter of 2014. Segment profit results reflect a 21
percent increase in Oil & Gas, which was offset by a decline in
the Industrial & Infrastructure, Power and Global Services
segments. Revenue for the second quarter was $4.8 billion, down
from $5.3 billion a year ago, mainly due to reductions in project
execution activities in the Industrial & Infrastructure
segment.
New awards for the quarter were $4.3 billion, including $2.7
billion in Oil & Gas, $726 million in Government and $607
million in Industrial & Infrastructure. Consolidated backlog at
the end of the quarter rose to $41.6 billion, up modestly over last
quarter and up from $40.3 billion a year ago.
"Although our backlog remains at a high level, the continued
volatility of oil prices and mined commodities clearly has slowed
the pace of new awards and tempered our expectations for the year.
However, the fact that we have maintained a healthy backlog in a
softer economic environment demonstrates that our clients are
reacting positively to our integrated solutions strategy," said
David Seaton, chairman and chief executive officer. "We continue to
focus on execution excellence for our current projects and
transforming our business to increase the value we provide to our
clients around the globe."
Corporate G&A expense for the second quarter of 2015 was $48
million, compared with $57 million a year ago. Expenses in the
quarter decreased primarily due to lower stock-based compensation
expense. During the quarter, the Company repurchased approximately
$103 million worth of Fluor shares, and paid out $31 million
in dividends to shareholders. Fluor’s cash and marketable
securities balance at quarter-end was $2.1 billion.
Outlook
The company continues to win and execute on numerous front-end
engineering awards, particularly in oil and gas, and is encouraged
by the positive comments from clients in regards to our strategy.
However, relatively low new awards this year and delays in the full
release of major projects due to the volatility mentioned above are
placing pressure on expected results for 2015. Taking into
consideration these factors and their impact on all of our business
segments, the company is reducing its 2015 guidance range of $4.40
to $5.00 per diluted share to $4.05 to $4.35 per diluted share.
This guidance excludes the effects of the previously announced
termination and settlement of Fluor’s U.S. defined benefit pension
plan which is expected in the latter part of 2015.
Business Segments
Fluor’s Oil & Gas business reported segment profit of $202
million, rising 21 percent from the second quarter of 2014. Strong
segment profit results reflect favorable performance on projects
progressing towards completion and an increase in higher margin
engineering and design activities. Revenue of $2.8 billion was down
modestly from $2.9 billion in the second quarter of 2014, as lower
revenue on large upstream projects that progressed towards
completion were largely offset by an increase in contributions from
various petrochemical and downstream projects. Second quarter new
awards for the segment totaled $2.7 billion, including additional
refining projects in Europe. Ending backlog for the Oil & Gas
segment was $28.7 billion, up 18 percent from $24.3 billion a year
ago.
The Industrial & Infrastructure group reported segment
profit of $58 million, compared with $96 million in the second
quarter of 2014. Revenue for the quarter was $1.1 billion, down
from $1.4 billion a year ago. Revenue and segment profit results
reflect a continued decline in contributions from the mining and
metals and infrastructure business lines. New awards for the second
quarter were $607 million, primarily for industrial services
customers. Backlog for the quarter was $6.7 billion, down from $9.1
billion a year ago, mainly due to substantially lower mining and
metals new awards over the past two years.
Segment profit for the Government group was $17 million, up from
$14 million a year ago. Revenue of $603 million compares to $599
million last year. Revenue for the quarter reflects increased
execution activities on projects awarded in 2014, offset by a
continued reduction in activities associated with LOGCAP IV task
order awards in Afghanistan. New awards for the quarter were $726
million, and ending backlog was $4.3 billion, down from $5.2
billion a year ago.
Segment profit for Global Services was $14 million in the second
quarter, which compares to $22 million a year ago. Revenue declined
to $125 million from $144 million last year. Lower results in the
quarter were mainly driven by reductions in the equipment business
line’s activities in Afghanistan and in support of the mining and
metals industry.
Fluor’s Power group reported a segment loss of $10 million,
compared to a segment profit of $15 million a year ago. Excluding
NuScale expenses of $19 million in the second quarter and $4
million a year ago, segment profit was $9 million and $19 million
respectively. Segment profit results for the quarter reflect
reduced contributions from renewable and gas-fired facilities.
Revenue for the quarter increased 23 percent to $250 million,
compared with $204 million a year ago, due to increased execution
activities on gas-fired projects. New awards for the quarter were
$253 million, compared with $38 million in the second quarter of
2014. Ending backlog was $1.9 billion, which was comparable with
$1.7 billion a year ago.
Results for the Six
Months
Net earnings attributable to Fluor from continuing operations
for the six months ended June 30, 2015 were $293 million, or
$1.96 per diluted share. This compares with $312 million, or $1.93
per diluted share, for the first six months of 2014. Revenue
declined to $9.4 billion, compared with $10.6 billion in the first
half of last year, mainly due to a decline in contributions from
the mining and metals business line.
Second Quarter Conference
Call
Fluor will host a conference call at 5:30 p.m. Eastern time on
Thursday, July 30, 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. 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) is a global engineering and
construction firm that designs and builds some of the world's most
complex projects. The company creates and delivers innovative and
integrated solutions for its clients in engineering, procurement,
fabrication, construction, maintenance and project management on a
global basis. For more than a century, Fluor has served clients in
the energy, chemicals, government, industrial, infrastructure,
mining and power market sectors. Headquartered in Irving, Texas,
Fluor ranks 136 on the FORTUNE 500 list. With 40,000 employees
worldwide, the company's revenue for 2014 was $21.5 billion. For
more information, visit www.fluor.com or follow us on Twitter
@FluorCorp.
Forward-Looking Statements: This
release may contain forward-looking statements (including without
limitation statements to the effect that the Company or its
management "believes," "expects," "anticipates," "plans" or other
similar expressions). These forward-looking statements, including
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 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, including the Company’s commodity-based
business lines, and the Company’s vulnerability to downturns; the
Company's failure to receive anticipated new contract awards and
the related impact on revenue, earnings, staffing levels and costs;
difficulties or delays incurred in the execution of contracts,
resulting in cost overruns or liabilities, including those caused
by the performance of the Company’s clients, subcontractors,
suppliers and joint venture or teaming partners; client
cancellations of, or scope adjustments to, existing contracts, and
the related impacts on staffing levels and cost; intense
competition in the global engineering, procurement and construction
industry, which can place downward pressure on the Company’s
contract prices and profit margins; current economic conditions
affecting our clients, partners, subcontractors and suppliers,
which may result in decreased capital investment or expenditures by
the Company’s clients or other financial difficulties by our
partners, subcontractors or suppliers that may increase costs or
delay project schedules; foreign economic and political
uncertainties or changes that could lead to project disruptions,
increased costs and potential losses; failure of our joint venture
partners to perform their venture obligations; failure to obtain
favorable results in existing or future litigation or dispute
resolution proceedings or claims; client delays or defaults in
making payments; failure to meet timely completion or performance
standards that could result in higher costs, reduced profits or, in
some cases, losses on projects; liabilities arising from faulty
services; risks or uncertainties associated with events outside of
our control, such as the effects of severe weather, which may
result in project delays, increased costs, liabilities or losses on
projects; the Company’s failure, or the failure of our agents or
partners, to comply with laws, including anti-bribery laws,
international trade laws or environmental, health and safety laws
or regulations; the potential impact of certain tax matters
including, but not limited to, those from foreign operations and
ongoing audits by tax authorities; possible information technology
interruptions, security breaches or inability to protect
intellectual property; foreign exchange risks; the inability to
hire and retain qualified personnel; failure to maintain safe
worksites and international security risks; the availability of
credit and restrictions imposed by credit facilities, both for the
Company and our clients, suppliers, subcontractors or other
partners; possible limitations on bonding or letter of credit
capacity; risks or uncertainties associated with acquisitions,
dispositions and investments; the Company’s ability to secure
appropriate insurance; and restrictions on possible transactions
imposed by the Company’s charter documents and Delaware law.
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 18, 2015. Such filings are
available either publicly or upon request from Fluor's Investor
Relations Department: (469) 398-7070. 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.
FLUOR CORPORATION
CONSOLIDATED FINANCIAL RESULTS (in millions, except per
share amounts) Unaudited CONSOLIDATED
OPERATING RESULTS THREE MONTHS ENDED JUNE 30
2015 2014 Revenue $ 4,810.1 $ 5,251.7 Cost and
expenses: Cost of revenue 4,516.1 4,906.4 Corporate general and
administrative expense 47.8 56.7 Interest expense, net 7.4
3.3 Total cost and expenses 4,571.3
4,966.4 Earnings from continuing operations before taxes
238.8 285.3 Income tax expense 78.1 90.1
Earnings from continuing operations 160.7 195.2 Loss from
discontinued operations, net of taxes - (85.2 ) Net
earnings 160.7 110.0 Less: Net earnings attributable to
noncontrolling interests 12.2 32.2 Net
earnings attributable to Fluor Corporation $ 148.5 $ 77.8
Amounts attributable to Fluor Corporation: Earnings from continuing
operations $ 148.5 $ 163.0 Loss from discontinued operations, net
of taxes - (85.2 ) Net earnings $ 148.5 $ 77.8
Basic earnings (loss) per share attributable to Fluor Corporation:
Earnings from continuing operations $ 1.02 $ 1.03 Loss from
discontinued operations, net of taxes - (0.54 ) Net
earnings $ 1.02 $ 0.49 Weighted average shares 146.3 158.5
Diluted earnings (loss) per share attributable to Fluor
Corporation: Earnings from continuing operations $ 1.00 $ 1.02 Loss
from discontinued operations, net of taxes - (0.54 )
Net earnings $ 1.00 $ 0.48 Weighted average shares 147.9
160.5 New awards $ 4,268.4 $ 5,863.1 Backlog $ 41,592.0 $ 40,328.2
Work performed $ 4,684.7 $ 5,106.6
FLUOR CORPORATION CONSOLIDATED FINANCIAL
RESULTS (in millions, except per share amounts)
Unaudited CONSOLIDATED OPERATING RESULTS
SIX MONTHS ENDED JUNE 30 2015
2014 Revenue $ 9,358.8 $ 10,636.3 Cost and expenses: Cost of
revenue 8,767.3 9,978.7 Corporate general and administrative
expense 88.9 94.5 Interest expense, net 14.9 6.4
Total cost and expenses 8,871.1 10,079.6
Earnings from continuing operations before taxes 487.7 556.7
Income tax expense 161.4 168.2 Earnings from
continuing operations 326.3 388.5 Loss from discontinued
operations, net of taxes - (85.2 ) Net earnings 326.3
303.3 Less: Net earnings attributable to noncontrolling interests
33.7 76.4 Net earnings attributable to Fluor
Corporation $ 292.6 $ 226.9 Amounts attributable to Fluor
Corporation: Earnings from continuing operations $ 292.6 $ 312.1
Loss from discontinued operations, net of taxes -
(85.2 ) Net earnings $ 292.6 $ 226.9 Basic earnings (loss)
per share attributable to Fluor Corporation: Earnings from
continuing operations $ 1.99 $ 1.96 Loss from discontinued
operations, net of taxes - (0.54 ) Net earnings $
1.99 $ 1.42 Weighted average shares 147.0 159.3 Diluted
earnings (loss) per share attributable to Fluor Corporation:
Earnings from continuing operations $ 1.96 $ 1.93 Loss from
discontinued operations, net of taxes - (0.52 ) Net
earnings $ 1.96 $ 1.41 Weighted average shares 148.9 161.4
New awards $ 8,716.1 $ 16,531.6 Backlog $ 41,592.0 $ 40,328.2 Work
performed $ 9,103.6 $ 10,348.5
FLUOR CORPORATION Unaudited BUSINESS
SEGMENT FINANCIAL REVIEW ($ in millions) THREE
MONTHS ENDED JUNE 30
2015
2014 (1)
Revenue Oil & Gas $ 2,751.2 $ 2,857.3 Industrial &
Infrastructure 1,080.0 1,448.1 Government 603.1 598.6 Global
Services 125.4 143.7 Power 250.4 204.0
Total revenue $ 4,810.1 $
5,251.7 Segment profit (loss) $ and margin
% Oil & Gas $ 202.3 7.4 % $ 167.2 5.9 % Industrial &
Infrastructure 58.3 5.4 % 95.6 6.6 % Government 17.2 2.9 % 13.9 2.3
% Global Services 14.1 11.2 % 21.5 15.0 % Power (2) (10.1 )
(4.0 )% 14.9 7.3 %
Total segment profit $ and
margin % $ 281.8 5.9 % $
313.1 6.0 % Corporate general and
administrative expense (47.8 ) (56.7 ) Interest expense, net (7.4 )
(3.3 ) Earnings attributable to noncontrolling interests
12.2 32.2
Earnings from continuing
operations before taxes $ 238.8 $
285.3 SIX MONTHS ENDED JUNE 30
2015
2014 (1)
Revenue Oil & Gas $ 5,222.8 $ 5,640.1 Industrial &
Infrastructure 2,160.3 3,063.8 Government 1,249.1 1,191.8 Global
Services 255.1 285.7 Power 471.5 454.9
Total revenue $ 9,358.8 $
10,636.3 Segment profit (loss) $ and margin
% Oil & Gas $ 385.6 7.4 % $ 306.2 5.4 % Industrial &
Infrastructure 129.4 6.0 % 192.8 6.3 % Government 32.0 2.6 % 26.4
2.2 % Global Services 29.4 11.5 % 42.3 14.8 % Power (2)
(18.7 ) (4.0 )% 13.5 3.0 %
Total segment profit $
and margin % $ 557.7 6.0 % $
581.2 5.5 % Corporate general and
administrative expense (88.9 ) (94.5 ) Interest expense, net (14.9
) (6.4 ) Earnings attributable to noncontrolling interests
33.8 76.4
Earnings from continuing
operations before taxes $ 487.7 $
556.7 (1) Effective January 1, 2015, the
company implemented certain organizational changes that impacted
the composition of its reportable segments. Revenue and segment
profit for the Oil & Gas, Industrial & Infrastructure and
Global Services segments in 2014 have been recast to reflect these
changes. (2) Includes research and development expenses
associated with NuScale totaling $19 million and $36 million,
respectively, for three and six months ended June 30, 2015 compared
to $4 million and $17 million, respectively, for three and six
months ended June 30, 2014.
FLUOR CORPORATION Unaudited SELECTED
BALANCE SHEET ITEMS ($ in millions, except per share
amounts) JUNE 30, DECEMBER 31, 2015
2014 Cash and marketable securities, including noncurrent $
2,132.4 $ 2,441.9 Total current assets 5,202.7 5,758.0 Total assets
7,560.4 8,194.4 Total short-term debt - 28.7 Total current
liabilities 2,742.5 3,330.9 Long-term debt 992.5 991.7
Shareholders' equity 3,116.6 3,110.9 Total debt to
capitalization % (based on shareholders' equity) 24.2 % 24.7 %
Shareholders' equity per share $ 21.44 $ 20.93
SELECTED CASH FLOW ITEMS ($ in millions)
SIX MONTHS ENDED JUNE 30 2015 2014
Cash provided by operating activities $
204.2
$
425.7 Investing activities Net
(purchases) sales and maturities of marketable securities 38.2
(32.8 ) Capital expenditures (133.5 ) (148.9 ) Proceeds from
disposal of property, plant and equipment 54.9 47.1 Proceeds from
sales of equity method investments - 44.0 Investments in
partnerships and joint ventures (47.5 ) (18.0 ) Other items
0.9 2.0
Cash utilized by investing
activities (87.0 ) (106.6
) Financing activities Repurchase of common
stock (214.3 ) (323.5 ) Dividends paid (63.5 ) (59.7 ) Repayment of
convertible debt and other borrowings (28.4 ) (0.1 ) Distributions
paid to noncontrolling interests, net of capital contributions
(39.5 ) (44.1 ) Other Items (10.7 ) 6.3
Cash utilized by financing activities (356.4
) (421.1 ) Effect of exchange
rate changes on cash (30.2 )
1.2 Decrease in cash and cash
equivalents $
(269.4 ) $
(100.8 )
Depreciation $
94.7 $
94.9
FLUOR CORPORATION Supplemental Fact
Sheet Unaudited NEW AWARDS ($ in
millions) THREE MONTHS ENDED JUNE 30 2015
2014 (1)
% Chg Oil & Gas $ 2,682 63 % $ 1,520 26 % 76 %
Industrial & Infrastructure 607 14 % 1,217 20 % (50 )%
Government 726 17 % 3,088 53 % (76 )% Power 253 6 %
38 1 % NM
Total new awards $
4,268 100 % $ 5,863
100 % (27 )%
SIX MONTHS ENDED JUNE 30 2015
2014 (1)
% Chg Oil & Gas $ 5,586 64 % $ 10,371 63 % (46 )%
Industrial & Infrastructure 1,963 23 % 2,121 13 % (7 )%
Government 800 9 % 3,836 23 % (79 )% Power 367 4 %
204 1 % 80 %
Total new awards $
8,716 100 % $ 16,532
100 % (47 )%
BACKLOG TRENDS ($ in millions)
AS OF JUNE 30
2015 (2)
2014 (1)
% Chg Oil & Gas $ 28,657 69 % $ 24,316 60 % 18 %
Industrial & Infrastructure 6,688 16 % 9,129 23 % (27 )%
Government 4,306 10 % 5,184 13 % (17 )% Power 1,941 5
% 1,699 4 % 14 %
Total backlog $
41,592 100 % $ 40,328
100 % 3 % United
States $ 14,284 34 % $ 12,293 30 % 16 % The Americas (excluding the
United States) 11,703 28 % 12,328 31 % (5 )% Europe, Africa and the
Middle East 12,333 30 % 13,555 34 % (9 )% Asia Pacific (including
Australia) 3,272 8 % 2,152 5 %
52 %
Total backlog $ 41,592 100
% $ 40,328 100 %
3 % (1) Effective January 1, 2015, the company
implemented certain organizational changes that impacted the
composition of its reportable segments. New awards and backlog for
the Oil & Gas and Industrial & Infrastructure segments in
2014 have been recast to reflect these changes. (2) Backlog
was negatively impacted by approximately $1.2 billion in the first
half of 2015 due to a strengthening U.S. dollar compared to most
major foreign currencies. NM - Not meaningful
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150730006508/en/
Fluor CorporationMedia RelationsBrian Mershon,
469-398-7621orBrett Turner, 864-281-6976orInvestor RelationsGeoff
Telfer, 469-398-7070orJason Landkamer, 469-398-7222
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