- Full year new awards of $19.5 billion; 87%
reimbursable
- Increased backlog by over 10% each of the past two years to
$29.4 billion; 76% reimbursable
- Prospect pipeline 15x ending backlog with opportunities
across all three segments
- Revamped capital structure lowers interest expense while
supporting future growth
- Anticipate improved cash flow conversion in 2024
Fluor Corporation (NYSE: FLR) announced financial results for
its year ended December 31, 2023. Revenue for 2023 was $15.5
billion and net income attributable to Fluor was $139 million, or
$0.54 per diluted share. Consolidated segment profit1 for the year
was $537 million compared to $427 million in 2022. Including the
adjustments outlined in the reconciliation table at the end of this
release, the company recognized adjusted EBITDA1 of $613 million
and adjusted diluted earnings per share1 of $2.73 for 2023.
“In 2023, we not only reached but surpassed a critical
inflection point on our journey to solidifying our position as a
technical solutions leader in the global engineering and
construction industry,” said David Constable, chairman and chief
executive officer of Fluor. "We are advancing with purpose,
bolstered by our dedicated teams, robust end markets, strong client
relationships, and a resilient capital structure. This positions us
to deliver substantial shareholder value for years to come."
Full year new awards were $19.5 billion compared to $19.8
billion a year ago. Ending backlog for 2023 was $29.4 billion
compared to $26.0 billion in the prior year. General and
administrative expenses for 2023 were $232 million compared to $237
million a year ago. Fluor’s cash and marketable securities at the
end of the year were $2.5 billion, not including $118 million in
cash and marketable securities held by NuScale.
[1] Non-GAAP Financial Measure. See “Non-GAAP Financial
Measures” for additional information.
Fourth Quarter Results
Fourth quarter 2023 results include a net loss attributable to
Fluor of $21 million, or ($0.12) per diluted share, compared to net
earnings attributable to Fluor of $9 million, or ($0.01) per
diluted share in the fourth quarter of 2022. Results for the fourth
quarter of 2023 include a settlement of claims on a legacy
infrastructure project offset by cost growth and schedule extension
on a large upstream legacy project that is scheduled to complete in
the first quarter of 2024. Results also include a $93 million loss
on sale related to the Stork business in Latin America.
Revenue for the quarter was $3.8 billion compared to $3.7
billion a year ago. Consolidated segment profit for the fourth
quarter of 2023 totaled $85 million compared to $174 million a year
ago. G&A expenses in the fourth quarter were $55 million,
compared to $89 million a year ago. New awards for the quarter were
$7.6 billion compared to $4.6 billion in 2022.
Including the adjustments outlined in the reconciliation table
at the end of this release, the company recognized adjusted EBITDA
of $145 million and adjusted EPS of $0.68 for the fourth quarter of
2023.
Outlook
We are not providing forward-looking guidance for U.S. GAAP net
earnings or U.S. GAAP earnings per share, or a quantitative
reconciliation of adjusted EBITDA or adjusted EPS guidance, because
we are unable to predict with reasonable certainty all of the
components required to provide such reconciliation without
unreasonable efforts, which are uncertain and could have a material
impact on GAAP reported results for the guidance period. See
“Non-GAAP Financial Measures” for additional information.
The company continues to be well served by the strategic
priorities set in 2021. Based on the volume of new awards received
over the past two years, early achievement of our 75% reimbursable
backlog target, and our robust and diverse prospect pipeline, the
company is establishing an adjusted EBITDA guidance for 2024 of
$600 to $700 million and adjusted EPS of $2.50 to $3.00 per
share.
The company is also reaffirming its 2026 adjusted EBITDA
guidance of $800 to $950 million.
Adjusted EPS and adjusted EBITDA guidance include items similar
to those outlined in the reconciliation table at the end of this
release.
Business Segments
Energy Solutions reported a profit of $381 million in 2023
compared to $301 million in 2022. Segment profit improved
significantly primarily due to initial recognition of
inflation-adjusted variable consideration on certain downstream
projects and due to increased execution activities on those same
projects as well as construction activities on a large LNG project.
This was partially offset by charges totaling $91 million for cost
growth and schedule extension on a large upstream legacy project
that is scheduled to be completed in Q1 2024. Revenue for 2023 was
$6.3 billion, up from $5.9 billion in the previous year. Revenue in
2023 increased due to the ramp up of execution activities on our
refinery projects in Mexico, chemicals projects in China, and
mid-scale LNG projects. Full year new awards in 2023 totaled $6.9
billion, compared to $6.5 billion in 2022, and included a
multi-billion-dollar reimbursable EPCM contract for the Dow
net-zero ethylene cracker and derivatives project in Canada as well
as a chemicals project in Poland. Ending backlog was $9.7 billion
compared to $9.1 billion a year ago.
Urban Solutions reported a profit of $268 million in 2023
compared to $17 million in 2022. Segment profit improved as a
result of a settlement on a legacy infrastructure project and a
discretionary fee award on a large mining project that was
completed in 2023. Full year revenue for the segment increased to
$5.3 billion compared to $4.4 billion a year ago due to the ramp up
of execution activities on several recently awarded projects
including a large metals project in the U.S., two life sciences
projects and a semiconductor project. New awards for 2023 improved
to $10.1 billion, compared to $6.9 billion in 2022, primarily from
awards for a large mining project, a metals project and a life
sciences project. Ending backlog was $14.8 billion compared to
$10.3 billion a year ago.
Mission Solutions reported a profit of $116 million in 2023
compared to $136 million a year ago. The decline in segment profit
was substantially driven by a $30 million charge recognized in the
first half of 2023 for cost growth associated with additional
schedule delays on a weapons facility project expected to complete
in mid-2024. Full year revenue for the segment of $2.7 billion
compares to $2.3 billion a year ago. Revenue increased in 2023 due
to increased execution activities on multiple DOE and Defense
contracts, and FEMA hurricane support. Full year new awards in 2023
were $1.1 billion, compared to $5.3 billion in 2022. New awards
decreased during 2023 due to a large award booked in the prior year
for a 4-year contract extension on the DOE Savannah River Site.
Ending backlog was $3.9 billion compared to $5.7 billion a year
ago.
The Other segment, which includes NuScale, Stork and the now
divested AMECO business, reported a full year loss of $228 million
compared to a loss of $27 million a year ago. Full year revenue was
$1.3 billion in 2023 and $1.2 billion in 2022. Results for the year
reflect losses on the sales of our AMECO South America business and
Stork business in Latin America.
Conference Call
Fluor will host a conference call at 9:30 a.m. Eastern Time on
Tuesday, February 20, which will be webcast live and can be
accessed at investor.fluor.com. The call will also be accessible by
telephone at 888-800-3960 (U.S./Canada) or +1 646-307-1852. The
conference ID is 4438700.
A replay of the webcast will be available for 30 days. A replay
of the call will be available by telephone for one week.
Non-GAAP Financial
Measures
This news release contains discussions of consolidated segment
profit (loss), adjusted net earnings, adjusted EPS and adjusted
EBITDA that are non-GAAP financial measures under SEC rules.
Segment profit (loss) is calculated as revenue less cost of revenue
and earnings attributable to noncontrolling interests. The company
believes that segment profit (loss) 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. Adjusted net earnings
is defined as net earnings from core operations excluding NuScale
profit (loss) and the impacts of foreign exchange fluctuations,
impairments and certain items that management believes are
unrelated to actual normalized operational performance. Net
earnings from core operations is net earnings attributable to Fluor
excluding the results of our remaining Stork and AMECO equipment
businesses that are no longer classified as discontinued operations
but that continue to be marketed for sale or that have been sold.
Adjusted EPS is defined as adjusted net earnings divided by
adjusted weighted average diluted shares outstanding. Adjusted
weighted average diluted shares outstanding assumes the conversion
of our convertible preferred stock. Adjusted EBITDA is defined as
net earnings from operations before interest, income taxes,
depreciation and amortization (EBITDA), further adjusted by the
same items excluded from adjusted net earnings. The company
believes adjusted net earnings, adjusted EPS and adjusted EBITDA
allow investors to evaluate the company’s ongoing earnings on a
normalized basis and make meaningful period-over-period
comparisons. However, non-GAAP measures have limitations as
analytical tools and should not be considered in isolation from or
a substitute for measures of financial performance prepared in
accordance with U.S. GAAP. In addition, these non-GAAP measures are
not necessarily comparable to similarly titled measures reported by
other companies. Reconciliations of consolidated segment profit
(loss), adjusted net earnings, adjusted EPS and adjusted EBITDA to
the most comparable GAAP measures are included in the press release
tables. The company is unable to provide a reconciliation of its
adjusted EPS and adjusted EBITDA guidance to the most comparable
GAAP measure without unreasonable efforts because it is unable to
predict with reasonable certainty all of the components required to
provide such reconciliation, including the impact of foreign
exchange fluctuations, which are uncertain and could have a
material impact on GAAP reported results for the guidance
period.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is building a better world by
applying world-class expertise to solve its clients’ greatest
challenges. Fluor’s 30,000 employees provide professional and
technical solutions that deliver safe, well-executed,
capital-efficient projects to clients around the world. Fluor had
revenue of $15.5 billion in 2023 and is ranked 303 among the
Fortune 500 companies. With headquarters in Irving, Texas, Fluor
has provided engineering, procurement and construction services for
more than 110 years. For more information, please visit
www.fluor.com or follow Fluor on Facebook, LinkedIn, X and
YouTube.
Forward-Looking Statements: This release may contain
forward-looking statements (including without limitation statements
to the effect that the Company or its management "will,"
"believes," "expects," “anticipates,” "plans" or other similar
expressions). These forward-looking statements, including
statements relating to strategic and operation plans, future
growth, new awards, backlog, earnings and the outlook for the
company’s business.
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; the Company's failure to receive
new contract awards; cost overruns, project delays or other
problems arising from project execution activities, including the
failure to meet cost and schedule estimates; intense competition in
the industries in which we operate; the inability to hire and
retain qualified personnel; failure of our joint venture or other
partners to perform their obligations; the failure of our
suppliers, subcontractors and other third parties to adequately
perform services under our contracts; cyber-security breaches;
possible information technology interruptions; foreign economic and
political uncertainties; client cancellations of, or scope
adjustments to, existing contracts; failure to maintain safe
worksites and international security risks; risks or uncertainties
associated with events outside of our control, including weather
conditions, pandemics, public health crises, political crises or
other catastrophic events; the use of estimates in preparing our
financial statements; client delays or defaults in making payments;
uncertainties, restrictions and regulations impacting our
government contracts; the potential impact of certain tax matters;
the Company's ability to secure appropriate insurance; liabilities
associated with the performance of nuclear services; foreign
currency risks; the loss of one or a few clients that account for a
significant portion of the Company's revenues; failure to
adequately protect intellectual property rights; climate change,
natural disasters and related environmental issues; increasing
scrutiny with respect to sustainability practices; risks related to
our indebtedness; 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; failure to obtain
favorable results in existing or future litigation and regulatory
proceedings, dispute resolution proceedings or claims, including
claims for additional costs; failure by us or our employees, agents
or partners to comply with laws; new or changing legal
requirements, including those relating to environmental, health and
safety matters; and restrictions on possible transactions imposed
by our 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 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 20, 2024. Such filings are available either publicly or
upon request from Fluor's Investor Relations Department: (469)
398-7222. 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.
SUMMARY OF FINANCIALS AND U.S. GAAP RECONCILIATION OF
CONSOLIDATED SEGMENT PROFIT (LOSS)(1) (2)
Three Months Ended
Year Ended
December 31,
December 31,
(in millions)
2023
2022
2023
2022
Revenue
Energy Solutions
$
1,422
$
1,775
$
6,307
$
5,872
Urban Solutions
1,420
1,093
5,262
4,373
Mission Solutions
646
509
2,655
2,289
Other
332
332
1,250
1,210
Total revenue
$
3,820
$
3,709
$
15,474
$
13,744
Segment profit (loss) $ and margin
%
Energy Solutions
26
1.8
%
124
7.0
%
381
6.0
%
301
5.1
%
Urban Solutions
147
10.4
%
38
3.5
%
268
5.1
%
17
0.4
%
Mission Solutions
31
4.8
%
20
3.9
%
116
4.4
%
136
5.9
%
Other
(119
)
NM
(8
)
NM
(228
)
NM
(27
)
NM
Total segment profit $ and margin
%
$
85
2.2
%
$
174
4.7
%
$
537
3.50
%
$
427
3.1
%
G&A
(55
)
(89
)
(232
)
(237
)
Impairment
—
(40
)
—
24
Gain (loss) on pension settlement
—
42
—
42
Foreign currency gain (loss)
(36
)
(27
)
(98
)
25
Interest income (expense), net
49
31
168
35
Earnings (loss) attributable to NCI
(19
)
(41
)
(60
)
(72
)
Earnings before taxes
24
50
315
244
Income tax expense
(64
)
(82
)
(236
)
(171
)
Net earnings (loss)
$
(40
)
$
(32
)
$
79
$
73
Less: Net earnings (loss) attributable to
NCI
(19
)
(41
)
(60
)
(72
)
Net earnings attributable to
Fluor
$
(21
)
$
9
$
139
$
145
New awards
Energy Solutions
$
2,153
$
916
$
6,871
$
6,512
Urban Solutions
5,052
3,351
10,141
6,900
Mission Solutions
40
36
1,055
5,347
Other
363
294
1,461
1,056
Total new awards
$
7,608
$
4,597
$
19,528
$
19,815
New awards related to projects located
outside of the U.S.
76%
46%
Backlog (in millions)
December 31,
2023
December 31, 2022
Energy Solutions
$
9,722
$
9,134
Urban Solutions
14,848
10,270
Mission Solutions
3,945
5,666
Other
926
979
Total backlog
$
29,441
$
26,049
Backlog related to projects located
outside of the U.S.
62%
49%
Backlog related to reimbursable
projects
76%
63%
(1) Certain amounts in tables may not
total or agree back to the financial statements due to immaterial
rounding differences.
(2) Please see page 1 of the 2023 10-K for
the definitions and abbreviations set forth below apply to the
indicated terms used throughout this filing.
SUMMARY OF CASH FLOW INFORMATION
Year Ended December
31,
(in millions)
2023
2022
OPERATING CASH FLOW
$
212
$
31
INVESTING CASH FLOW
Proceeds from sales and maturities
(purchases) of marketable securities
(141
)
(64
)
Capital expenditures
(106
)
(75
)
Proceeds from sales of assets (net of cash
divested)
(5
)
95
Investments in partnerships and joint
ventures
(33
)
(53
)
Other
8
19
Investing cash flow
(277
)
(78
)
FINANCING CASH FLOW
Proceeds from issuance of 2029 Notes, net
of issuance costs
560
—
Capped call transactions related to 2029
Notes
(73
)
—
Purchases and retirement of debt
(249
)
(41
)
Proceeds from NuScale de-SPAC
transaction
—
341
Proceeds from sale of NuScale interest
—
107
Dividends paid on CPS
(29
)
(39
)
Make-whole payment on conversion of
CPS
(27
)
—
Distributions paid to NCI
(53
)
(60
)
Capital contributions by NCI
10
21
Other
(12
)
(14
)
Financing cash flow
127
315
Effect of exchange rate changes on
cash
18
(38
)
Increase in cash and cash equivalents
80
230
Cash and cash equivalents at beginning of
year
2,439
2,209
Cash and cash equivalents at end of
year
$
2,519
$
2,439
Cash paid during the year for:
Interest
$
53
$
54
Income taxes (net of refunds)
169
99
Noncash investing and financing
activities:
Marketable securities transferred to
trustee to discharge the 2024 Notes
$
262
$
—
Debt assumed by buyer of Stork Latin
America
19
—
RECONCILIATION OF U.S. GAAP NET
EARNINGS TO ADJUSTED NET EARNINGS AND U.S. GAAP EARNINGS PER SHARE
TO ADJUSTED EARNINGS PER SHARE (1)
Three Months Ended
Year Ended
December 31,
December 31,
(In millions, except per share
amounts)
2023
2022
2023
2022
Net earnings (loss) attributable to
Fluor
$
(21
)
$
9
$
139
$
145
Less: Dividends on CPS
—
10
29
39
Less: Make-whole payment on conversion of
CPS
—
—
27
—
Net earnings (loss) available to Fluor
common stockholders
(21
)
(1
)
83
106
Exclude: Stork and AMECO businesses
marketed for sale
88
(18
)
133
(39
)
Exclude: Tax expense on Stork and
AMECO
5
3
8
1
Net earnings (loss) from core
operations*
$
72
$
(16
)
$
224
$
68
Adjustments:
Dividends on CPS
$
—
$
10
$
29
$
39
Make-whole payment on conversion of
CPS
—
—
27
—
NuScale loss
32
28
94
72
(Gain) loss on embedded derivatives
(6
)
3
17
3
Tax expense (benefit) on embedded
derivatives
2
(1
)
(5
)
(1
)
Reserve for legacy legal claims
—
—
3
6
Foreign currency (gain) loss
36
27
98
(25
)
Tax expense (benefit) on foreign currency
gain/loss
(7
)
(3
)
(20
)
1
SEC investigation
(12
)
25
—
38
NuScale marketing costs borne by Fluor
—
—
5
—
Impairment
—
43
—
(17
)
(Gain) loss on pension settlement
—
(42
)
—
(42
)
Adjusted net earnings
$
117
$
74
$
472
$
141
Diluted EPS available to Fluor common
stockholders
$
(0.12
)
$
(0.01
)
$
0.54
$
0.73
Adjusted EPS
$
0.68
$
0.43
$
2.73
$
0.82
Weighted average common shares
outstanding
170
142
150
142
CPS
—
27
20
27
Assumed issuance of shares under equity
awards
3
3
3
3
Adjusted weighted average diluted
shares outstanding
173
172
173
172
*Core operations excludes the results of
our Stork business and remaining AMECO equipment business that no
longer meet all of the requirements to be classified as
discontinued operations but that continue to be marketed for sale
or that have been sold.
(1) Certain amounts in tables may not
total or agree back to the financial statements due to immaterial
rounding differences.
RECONCILIATION OF U.S. GAAP NET
EARNINGS TO ADJUSTED EBITDA (1)
Three Months Ended
Year Ended
December 31,
December 31,
Net earnings (loss) attributable to
Fluor
$
(21
)
$
9
$
139
$
145
Interest (income) expense, net
(49
)
(31
)
(168
)
(35
)
Income tax expense
64
82
236
171
Depreciation & amortization
18
18
74
73
EBITDA
$
12
$
78
$
281
$
354
Adjustments:
Other: NuScale, Stork and AMECO (earnings)
loss
$
115
$
2
$
209
$
10
Energy Solutions: (Gain) loss on embedded
derivatives
(6
)
3
17
3
G&A: NuScale marketing costs borne by
Fluor
—
—
5
—
G&A: Reserve for legacy legal
claims
—
—
3
6
G&A: Foreign currency (gain)/loss
36
27
98
(25
)
G&A: SEC investigation
(12
)
25
—
38
Impairment
—
43
—
(17
)
Loss on pension settlement
—
(42
)
—
(42
)
Adjusted EBITDA
$
145
$
136
$
613
$
327
(1) Certain amounts in tables may not
total or agree back to the financial statements due to immaterial
rounding differences.
#corp
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version on businesswire.com: https://www.businesswire.com/news/home/20240220181367/en/
Brett Turner Media Relations 864.281.6976 tel Jason Landkamer
Investor Relations 469.398.7222 tel
Fluor (NYSE:FLR)
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