Fluor Corporation (NYSE: FLR) today announced financial results
for its fiscal year ended December 31, 2016. Including adverse
fourth quarter tax effects of $45 million, or $0.32 per diluted
share, primarily as a result of new IRS regulations approved on
December 7, 2016, earnings from continuing operations attributable
to Fluor for full year 2016 were $281 million, or $2.00 per diluted
share. Excluding these adverse tax effects, the company reported a
net profit from continuing operations of $326 million, or $2.32 per
diluted share. This compares to 2015 earnings from continuing
operations attributable to Fluor of $418 million, or $2.85 per
diluted share. Consolidated segment profit for the year was $744
million, compared to $1.0 billion a year ago. Revenue of $19.0
billion in 2016 compares to $18.1 billion in the prior year. As
described in the pre-announcement release dated February 10, 2017,
the adverse tax effects of $45 million relate to the inability to
deduct or otherwise benefit certain foreign losses.
Full year new awards were $21 billion, including $8.4 billion in
Energy, Chemicals & Mining, $6.2 billion in Industrial,
Infrastructure & Power, $4.6 billion in Government and $1.8
billion in Maintenance, Modification & Asset Integrity. This
compares to $21.8 billion in new awards in 2015. Consolidated
backlog at year-end was $45 billion, compared with $44.7 billion a
year ago, reflecting growth in the Government and Industrial,
Infrastructure & Power segments.
"In 2016 we set the foundation to expand our presence in the
markets we serve. This includes our acquisition of Stork, our
investment in a fabrication facility in China and the submission of
NuScale’s small modular reactor application to the NRC. We were
also pleased with the improved slate of opportunities in
infrastructure and mining," said David Seaton, Fluor chairman and
chief executive officer.
Corporate G&A expense for 2016 was $191 million, compared
with $168 million a year ago, including Stork transaction and
integration costs and other organizational realignment expenses,
partially offset by foreign currency exchange gains. Fluor’s cash
and marketable securities at the end of the year was $2.1 billion.
During 2016, the company generated $706 million in cash flow from
operating activities and paid out $118 million in
dividends.
Outlook
The company is maintaining its EPS guidance for 2017 at the
previously announced range of $2.75 to $3.25 per diluted share.
Business Segments
Fluor’s Energy, Chemicals & Mining segment reported a
segment profit of $401 million, compared to a segment profit
of $867 million in 2015. Results for the year reflect a $265
million pre-tax charge on a petrochemical facility in the United
States. Revenue for 2016 was $9.8 billion, down from $11.9 billion
in the previous year, primarily due to a decline in project
activity in the mining and metals business line. Full year new
awards in 2016 totaled $8.4 billion, compared to $12.0 billion
in 2015. In the fourth quarter, the segment booked new awards of
$1.0 billion, including a bauxite mine in Guinea. Ending backlog
was $21.8 billion compared to $29.4 billion a year ago.
The Industrial, Infrastructure & Power segment reported
segment profit of $136 million, compared to a $45 million loss in
2015. Segment profit for 2015 included a charge related to a
gas-fired power plant in Brunswick County, Virginia. Revenue for
2016 increased 81 percent to $4.1 billion from $2.3 billion a year
ago. Results for the year reflect increased project activity in the
power business line. Full year new awards in 2016 totaled
$6.2 billion compared to $7.1 billion in 2015. New awards in
the fourth quarter were $1.3 billion including a contract for the
Novo Nordisk active pharmaceutical ingredient facility in North
Carolina. Year-end backlog was $15.1 billion, up 56 percent from
$9.7 billion a year ago. Ending backlog reflects new infrastructure
awards and project adjustments to the power business line.
The Government group reported segment profit of $85 million,
compared to $83 million a year ago. Revenue for 2016 was $2.7
billion, compared to $2.6 billion a year ago. New awards totaled
$4.6 billion for the year, up from $1.4 billion in 2015. Awards in
2016 include large multi-year awards for nuclear decommissioning
and cleanup projects. Fourth quarter 2016 new awards were $101
million and ending backlog was $5.2 billion, up 46 percent from
$3.6 billion a year ago.
The Maintenance, Modification & Asset Integrity segment
reported segment profit of $122 million for 2016, compared to $127
million a year ago. Revenue for the year was $2.5 billion, compared
to $1.4 billion in 2015 and reflects ten months of contribution
from the Stork business. Full year new awards in 2016 totaled $1.8
billion compared to $1.4 billion in 2015. New awards in the fourth
quarter were $357 million and ending backlog was $2.9 billion, up
36 percent from $2.1 billion a year ago.
Fourth Quarter Results
Earnings for the fourth quarter of 2016 were $70 million, or
$0.50 per diluted share. Excluding the adverse tax effects
previously mentioned, the company reported a net profit from
continuing operations of $115 million, or $0.82 per diluted share.
For the fourth quarter of 2015, the company reported a loss of $51
million, or $0.36 per diluted share. However, excluding
non-operating pension settlement expenses of $147 million, or $1.04
per diluted share after-tax, the company had a net profit from
continuing operations of $96 million, or $0.68 per diluted share
for the fourth quarter of 2015. Segment profit for the fourth
quarter of 2016 was $249 million, up from $234 million a year ago.
Corporate G&A expenses in the fourth quarter of 2016 were
$56 million, compared with $54 million a year ago. Revenue for
the quarter was $5.0 billion and new awards were $2.8 billion.
Fourth Quarter and Year-End Conference
Call
Fluor will host a conference call at 9:00 a.m. Eastern time on
Friday, February 17, 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.
Non-GAAP Financial
Measure
This press release contains a discussion of consolidated segment
profit that would be deemed a non-GAAP financial measure under SEC
rules. Segment profit is calculated as revenue less cost of revenue
and earnings attributable to noncontrolling interests excluding:
corporate general and administrative expense; interest expense;
interest income; domestic and foreign income taxes; other
non-operating income and expense items; and loss from discontinued
operations. The company believes that consolidated segment profit
provides a meaningful perspective on its business results as it is
the aggregation of individual segment profit measures that the
company utilizes to evaluate and manage its business performance. A
reconciliation of this measure to earnings from continuing
operations before taxes is included in the press release tables.
This press release also contains a discussion of net profit from
continuing operations (and net profit per diluted share), excluding
certain expenses relating to the settlement of the U.S. defined
benefit pension plan that would be deemed a non-GAAP financial
measure. The company believes the exclusion of the pension expense
allows investors to evaluate its ongoing earnings potential on a
normalized basis and make meaningful period-over-period
comparisons.
This press release also contains a discussion of earnings from
continuing operations (and net earnings per diluted share),
excluding the adverse tax effects on certain foreign losses that
would be deemed a non-GAAP financial measure. The company believes
the exclusion of the impact from these tax effects is appropriate
because it allows investors to better evaluate the company's
earnings from operations and make meaningful period-over-period
comparisons.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering,
procurement, fabrication, construction and maintenance company that
designs, builds and maintains capital-efficient facilities for its
clients on six continents. For more than a century, Fluor has
served our clients by delivering innovative and integrated
solutions across the globe. With headquarters in Irving, Texas,
Fluor ranks 155 on the FORTUNE 500 list with revenue of $19 billion
in 2016 and has more than 60,000 employees worldwide. For more
information, please 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," is “positioned” or other similar
expressions). These forward-looking statements, including
statements relating to future growth, backlog, earnings and the
outlook for the Company’s business 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 Energy,
Chemicals & Mining commodity-based segment; the Company's
failure to receive new contract awards; the Company’s failure to
meet cost and schedule estimates; difficulties or delays incurred
in the execution of contracts, 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; intense competition in
the industries in which we operate; current economic conditions
affecting our clients, partners, subcontractors and suppliers;
foreign economic and political uncertainties; failure of our joint
venture or other partners, suppliers or subcontractors to perform
their obligations; cyber-security breaches; 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; liabilities arising from faulty services; risks or
uncertainties associated with events outside of our control,
including weather conditions; the Company’s failure, or the failure
of our agents or partners, to comply with laws; the potential
impact of certain tax matters; possible information technology
interruptions or inability to protect intellectual property; new or
changing legal requirements; liabilities associated with the
performance of nuclear services; 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; risks arising from
the inability to successfully integrate acquired businesses; and
the Company’s ability to secure appropriate insurance. 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 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 17, 2017. 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 DECEMBER 31
2016 2015 Revenue $ 4,989.6 $ 4,370.7 Cost and
expenses: Cost of revenue 4,740.5 4,118.3 Pension settlement charge
- 230.5 Corporate general and administrative expense 56.2 53.6
Interest expense, net 14.2 7.6 Total cost and
expenses 4,810.9 4,410.0 Earnings (loss) from
continuing operations before taxes 178.7 (39.3 ) Income tax expense
(benefit) 107.7 (6.9 ) Earnings (loss) from
continuing operations 71.0 (32.4 ) Loss from discontinued
operations, net of taxes - (0.6 ) Net earnings (loss)
71.0 (33.0 ) Less: Net earnings attributable to noncontrolling
interests 0.5 18.4 Net earnings (loss)
attributable to Fluor Corporation $ 70.5 $ (51.4 ) Amounts
attributable to Fluor Corporation: Earnings (loss) from continuing
operations $ 70.5 $ (50.8 ) Loss from discontinued operations, net
of taxes - (0.6 ) Net earnings (loss) $ 70.5 $ (51.4
) Basic earnings (loss) per share attributable to Fluor
Corporation: Earnings (loss) from continuing operations $ 0.51 $
(0.36 ) Loss from discontinued operations, net of taxes -
- Net earnings (loss) $ 0.51 $ (0.36 ) Weighted
average shares 139.3 140.9 Diluted earnings (loss) per share
attributable to Fluor Corporation: Earnings (loss) from continuing
operations $ 0.50 $ (0.36 ) Loss from discontinued operations, net
of taxes - - Net earnings (loss) $ 0.50 $
(0.36 ) Weighted average shares 141.1 140.9 New awards $
2,824.5 $ 7,835.7 Backlog $ 45,011.9 $ 44,726.1 Work performed $
4,881.5 $ 4,246.8
FLUOR CORPORATION
CONSOLIDATED FINANCIAL RESULTS (in millions, except per
share amounts) Unaudited
CONSOLIDATED OPERATING RESULTS YEAR ENDED DECEMBER
31 2016 2015 Revenue $ 19,036.5 $ 18,114.0 Cost
and expenses: Cost of revenue 18,246.2 17,019.3 Gain related to a
partial sale of a subsidiary - (68.2 ) Pension settlement charge -
239.9 Corporate general and administrative expense 191.1 168.3
Interest expense, net 52.6 28.1 Total cost and
expenses 18,489.9 17,387.4 Earnings from
continuing operations before taxes 546.6 726.6 Income tax expense
219.2 245.9 Earnings from continuing
operations 327.4 480.7 Loss from discontinued operations, net of
taxes - (5.7 ) Net earnings 327.4 475.0 Less: Net
earnings attributable to noncontrolling interests 46.0
62.5 Net earnings attributable to Fluor Corporation $
281.4 $ 412.5 Amounts attributable to Fluor
Corporation: Earnings from continuing operations $ 281.4 $ 418.2
Loss from discontinued operations, net of taxes -
(5.7 ) Net earnings $ 281.4 $ 412.5 Basic earnings
(loss) per share attributable to Fluor Corporation: Earnings from
continuing operations $ 2.02 $ 2.89 Loss from discontinued
operations, net of taxes - (0.04 ) Net earnings $
2.02 $ 2.85 Weighted average shares 139.2 144.8
Diluted earnings (loss) per share attributable to Fluor
Corporation: Earnings from continuing operations $ 2.00 $ 2.85 Loss
from discontinued operations, net of taxes - (0.04 )
Net earnings $ 2.00 $ 2.81 Weighted average shares 140.9
146.7 New awards $ 20,959.2 $ 21,846.2 Backlog $ 45,011.9 $
44,726.1 Work performed $ 18,612.2 $ 17,614.9
FLUOR CORPORATION
Unaudited BUSINESS SEGMENT FINANCIAL REVIEW AND
U.S. GAAP RECONCILIATION ($ in millions) THREE
MONTHS ENDED DECEMBER 31
2016
2015 (1)
Revenue Energy, Chemicals & Mining $ 2,509.1 $ 2,818.2
Industrial, Infrastructure & Power 1,122.9 540.3 Government
694.9 647.6 Maintenance, Modification & Asset Integrity
662.7 364.6
Total revenue $
4,989.6
$ 4,370.7 Segment profit
(loss) $ and margin % (3) Energy, Chemicals & Mining
$ 153.7 6.1 % $ 211.0 7.5 % Industrial, Infrastructure & Power
(2) 44.1 3.9 % (29.6 ) (5.5 )% Government 19.6 2.8 % 21.1 3.3 %
Maintenance, Modification & Asset Integrity 31.2
4.7 % 31.5 8.6 %
Total segment profit $ and margin
% $ 248.6 5.0 % $
234.0 5.4 % Pension settlement charge -
(230.5 ) Corporate general and administrative expense (56.2 ) (53.6
) Interest expense, net (14.2 ) (7.6 ) Earnings attributable to
noncontrolling interests 0.5 18.4
Earnings (loss) from continuing operations before taxes
$ 178.7 $ (39.3 )
YEAR ENDED DECEMBER 31 2016
2015 (1)
Revenue Energy, Chemicals & Mining $ 9,754.2 $ 11,865.4
Industrial, Infrastructure & Power 4,094.5 2,264.0 Government
2,720.0 2,557.4 Maintenance, Modification & Asset Integrity
2,467.8 1,427.2
Total revenue
$ 19,036.5 $ 18,114.0
Segment profit (loss) $ and margin % (3)
Energy, Chemicals & Mining $ 401.5 4.1 % $ 866.6 7.3 %
Industrial, Infrastructure & Power (2) 135.8 3.3 % (44.9 ) (2.0
)% Government 85.1 3.1 % 83.1 3.2 % Maintenance, Modification &
Asset Integrity 121.9 4.9 % 127.4 8.9 %
Total segment profit $ and margin % $ 744.3
3.9 % $ 1,032.2 5.7 %
Gain related to a partial sale of a subsidiary - 68.2
Pension settlement charge - (239.9 ) Corporate general and
administrative expense (191.1 ) (168.3 ) Interest expense, net
(52.6 ) (28.1 ) Earnings attributable to noncontrolling interests
46.0 62.5
Earnings from continuing
operations before taxes $ 546.6 $
726.6 (1) During the first quarter of 2016,
the company changed the composition of its reportable segments to
better reflect the diverse end markets that the company serves.
Segment operating information for 2015 has been recast to reflect
these changes. (2) Includes research and development
expenses associated with NuScale totaling $22 million and $15
million for three months ended December 31, 2016 and 2015,
respectively, and $92 million and $80 million for the years ended
December 31, 2016 and 2015, respectively. (3) Segment profit
margin % is calculated as segment profit divided by segment
revenue.
FLUOR
CORPORATION Unaudited SELECTED BALANCE SHEET
ITEMS ($ in millions, except per share amounts)
DECEMBER 31, DECEMBER 31, 2016 2015
Cash and marketable securities, including noncurrent $ 2,105.0 $
2,367.6 Total current assets 5,610.3 5,105.4
(1)
Total assets 9,216.4 7,625.4
(1)
Total short-term debt 82.2 - Total current liabilities 3,816.0
2,935.4 Long-term debt 1,517.9 986.6
(1)
Shareholders' equity 3,125.2 2,997.3
SELECTED CASH FLOW
ITEMS ($ in millions) YEAR ENDED DECEMBER
31 2016 2015 Cash provided by operating
activities $
705.9 $
849.1
Investing activities Net (purchases) sales and maturities of
marketable securities 162.1 25.3 Capital expenditures (235.9 )
(240.2 ) Proceeds from disposal of property, plant and equipment
81.1 94.3 Proceeds from sale of buildings - 82.1 Proceeds from a
partial sale of a subsidiary - 45.6 Investments in partnerships and
joint ventures (518.2 ) (91.1 ) Acquisitions, net of cash acquired
(240.7 ) - Other items 10.2 17.5
Cash utilized by investing activities (741.4
) (66.5 ) Financing
activities Repurchase of common stock (9.7 ) (509.7 ) Dividends
paid (118.0 ) (125.2 ) Proceeds from issuance of 1.75% Senior Notes
552.9 - Debt issuance costs (3.5 ) -
Repayment of Stork Notes, convertible debt
and other borrowings
(333.7
)
(28.4 ) Borrowings under revolving lines of credit 882.1 -
Repayment of borrowings under revolving lines of credit (917.0 ) -
Distributions paid to noncontrolling
interests, net of capital contributions
(48.8
)
(53.7 ) Other Items (14.7 ) (11.2 )
Cash utilized
by financing activities (10.4 )
(728.2 ) Effect of exchange rate changes on
cash (53.6 ) (97.6 )
Decrease in cash and cash equivalents
$
(99.5 ) $
(43.2 )
Depreciation $
211.1 $
188.7
(1) Certain amounts in 2015 have been reclassified to
conform to the 2016 presentation due to the implementation of new
accounting pronouncements.
FLUOR CORPORATION
Supplemental Fact Sheet Unaudited
NEW AWARDS ($ in millions) THREE MONTHS
ENDED DECEMBER 31 2016
2015 (1)
Energy, Chemicals & Mining $ 1,027 36 % $ 2,159 28 %
Industrial, Infrastructure & Power 1,339 47 % 5,161 66 %
Government 101 4 % 352 4 % Maintenance, Modification & Asset
Integrity 357 13 % 164 2
%
Total new awards $ 2,824
100 % $ 7,836 100
% YEAR ENDED DECEMBER 31 2016
2015 (1)
Energy, Chemicals & Mining $ 8,422 40 % $ 11,981 55 %
Industrial, Infrastructure & Power 6,200 30 % 7,064 33 %
Government 4,562 22 % 1,429 6 % Maintenance, Modification &
Asset Integrity 1,775 8 % 1,372
6 %
Total new awards $ 20,959
100 % $ 21,846
100 % BACKLOG TRENDS
($ in millions) AS OF DECEMBER 31 2016
2015 (1)
Energy, Chemicals & Mining $ 21,831 48 % $ 29,365 66 %
Industrial, Infrastructure & Power 15,115 34 % 9,682 21 %
Government 5,194 12 % 3,560 8 % Maintenance, Modification &
Asset Integrity 2,872 6 % 2,119
5 %
Total backlog $ 45,012
100 % $ 44,726
100 % United States $ 23,188 52 % $ 18,167 41
% The Americas (excluding the United States) 3,135 7 % 10,530 23 %
Europe, Africa and the Middle East 16,732 37 % 13,351 30 % Asia
Pacific (including Australia) 1,957 4 %
2,678 6 %
Total backlog $ 45,012
100 % $ 44,726
100 % (1) During the first quarter of
2016, the company changed the composition of its reportable
segments to better reflect the diverse end markets that the company
serves. New awards and backlog for 2015 have been recast to reflect
these changes.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170217005120/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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