Fluor Reports Fourth Quarter and Full Year 2012 Results

  Fluor Reports Fourth Quarter and Full Year 2012 Results

  *2012 New Awards of $27.1 Billion; Ending Backlog of $38.2 Billion
  *2012 Revenue up 18 Percent to Record $27.6 Billion
  *2012 Earnings of $2.71 Per Share Including $1.57 Per Share Charge from
    Previously Announced Greater Gabbard Arbitration Ruling

Business Wire

IRVING, Texas -- February 20, 2013

Fluor Corporation (NYSE: FLR) today announced financial results for its fiscal
year ended December 31, 2012. Net earnings attributable to Fluor for 2012 were
$456 million, or $2.71 per diluted share, compared with $594 million, or $3.40
per diluted share in 2011. Earnings per share results included a charge of
approximately $1.57 per share relating to the previously announced arbitration
ruling on the Greater Gabbard project. Excluding this charge, net earnings
attributable to Fluor for 2012 would have been $4.28 per diluted share.
Consolidated segment profit for the year was $769 million, including the
impact of a $416million pre-tax charge on Greater Gabbard, which compares
with $1.0 billion in segment profit in 2011. Results in 2012 reflected strong
double-digit growth in Oil & Gas and Global Services, and strength in
Industrial & Infrastructure which was adversely impacted by the Greater
Gabbard charge. Consolidated revenue for the year totaled a record
$27.6billion, which was up 18percent from $23.4 billion a year ago, mainly
due to strong growth in the Industrial & Infrastructure and Oil & Gas business
segments.

Full year new awards were strong at $27.1 billion, compared with bookings of
$26.9billion a year ago, including $12.6 billion in Oil & Gas and $9.5
billion in Industrial & Infrastructure. Consolidated backlog at year-end was
$38.2 billion, which compares with $39.5billion a year ago.

“The underlying profitability of the Company has never been stronger,
notwithstanding the surprising and unexpected adverse arbitration decision on
our Greater Gabbard claims,” said Chairman and Chief Executive Officer David
Seaton. “We are very optimistic about the opportunities we see in our oil,
gas, petrochemical and infrastructure markets in particular, and expect to
deliver solid results in line with our guidance for 2013.”

Corporate G&A expense for the year was reduced to $151 million, from
$163million a year ago. The effective tax rate for the year was 22 percent,
reflecting the recognition of benefits associated with the favorable
resolution of various issues, including the settlement of a tax audit relating
to prior years. Fluor’s financial condition remains very strong, with cash
plus current and noncurrent marketable securities totaling $2.6billion.
During 2012, the Company generated $628 million in cash flow from operating
activities, repurchased $389 million worth of Fluor shares, and paid out
$129million in dividends.

Outlook

The Company remains encouraged by the opportunities across its diverse
end-markets, and is maintaining its EPS guidance for 2013 at the previously
announced range of $3.85 to $4.35 per diluted share.

Business Segments

Fluor’s Oil & Gas unit reported a 21 percent increase in segment profit to
$335 million in 2012, from $276million in 2011. Revenue rose by 19 percent to
$9.5 billion in 2012. The segment’s strong financial performance reflects
increasing new awards and progress on existing backlog projects. Full year new
awards in 2012 totaled $12.6 billion, which represents a 51percent increase
from $8.3 billion in 2011. In the fourth quarter, the segment booked new
awards of $1.7 billion, including petrochemical projects in North America,
Europe and Asia. Ending Oil & Gas backlog rose 21 percent from a year ago to
end 2012 at $18.2 billion.

The Industrial & Infrastructure group reported segment profit of $124 million,
down from $389 million in 2011. Segment results reflect strong growth in the
mining and metals business line and progress on large domestic infrastructure
projects, but were impacted by a $416 million pre-tax charge due to the
adverse arbitration decision in the fourth quarter relating to the Greater
Gabbard wind farm project. Total revenue for the segment rose 26percent to
$12.2 billion in 2012, mainly due to significant growth in the mining and
metals business line. New awards in 2012 were substantial at $9.5 billion, but
declined from $12.2 billion a year ago when mining and metals markets were
particularly strong. New awards in the fourth quarter were $3.0billion,
including a sizable copper mining project in South America. Year-end backlog
declined to $15.5billion, from a segment record of $19.6 billion a year ago,
reflecting lower new awards and the cancellation of two mining projects in the
third quarter that totaled $2.0 billion.

Government posted segment profit of $150 million, which was up from $145
million a year ago. Revenue in 2012 of $3.3 billion compares with $3.4 billion
a year ago. Segment results include substantial ongoing activities from LOGCAP
IV task orders in Afghanistan and long-term Department of Energy contracts at
the Savannah River and Portsmouth sites. New awards totaled $3.2 billion for
the year, compared with $3.7 billion in 2011 which included higher LOGCAP IV
task order volume. Ending backlog in 2012 was $978 million, which compares
with $1.1 billion a year ago.

Segment profit for Global Services rose 17 percent to $178 million in 2012,
from $152million in 2011, mainly due to growth in the operations &
maintenance and temporary staffing business lines. Revenue increased by 9
percent to $1.7 billion, reflecting growth across all business lines. Full
year new awards of $904 million compared with awards of $1.0 billion a year
ago. Ending backlog declined to $1.7 billion from $1.9billion a year ago.

Fluor’s Power group reported a segment loss of $17 million, which included
expenses of $63 million associated with the Company’s continued investment in
NuScale. This compares with profit of $81 million a year ago, which included
$7 million in NuScale expenses. Segment revenue increased to $841 million from
$743 million a year ago. Full year new awards were $884 million, compared with
$1.6 billion in 2011. The segment continues to be impacted by relatively weak
demand for new power generation projects. Power segment backlog rose modestly
to $1.9 billion, from $1.8 billion a year ago.

Fourth Quarter Results

The fourth quarter of 2012 was a net loss attributable to Fluor of $4 million,
or a loss of $0.03 per diluted share, which compared with net earnings
attributable to Fluor of $153 million, or $0.90 per diluted share, in 2011.
Fourth quarter net earnings were impacted by an after-tax charge of $265
million, or approximately $1.61 per diluted share, relating to the adverse
arbitration ruling on the Greater Gabbard wind farm project. Excluding this
charge, net earnings attributable to Fluor for the fourth quarter would have
been $1.58 per diluted share. This previously announced charge, which totaled
$416 million before tax, took strong underlying fourth quarter segment profit
results down to a consolidated segment loss of $49 million, which compares
with a segment profit of $279 million a year ago. Current quarter segment
profit benefited from favorable events including the renegotiation of the
LOGCAP IV contract which yielded a $17 million improvement in Government’s
results, and a $43 million pre-tax gain on the sale of the Company’s equity
interest in a joint venture in the U.K. which improved Industrial &
Infrastructure’s results. The quarter also benefited from a lower than
expected tax provision due to the favorable resolution of various tax matters.
Corporate G&A expenses in the fourth quarter of 2012 were $41million, below
the $61 million reported a year ago, primarily due to improvements in foreign
currency positions and lower incentive compensation expenses. Revenue for the
quarter was $7.0 billion, which represents a 12percent increase over last
year, mainly due to a significant increase in the Oil & Gas segment. Fourth
quarter new awards were $5.1 billion, including awards of $3.0 billion in
Industrial & Infrastructure and $1.7 billion in Oil & Gas.

Fourth Quarter and Year-End Conference Call

Fluor will host a conference call at 5:30 p.m. Eastern Standard Time on
Wednesday, February 20, 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. Given the size of the
charge relating to the previously announced adverse ruling on Greater Gabbard,
the Company has shown net earnings excluding the charge in order to help
better highlight underlying results. 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

For more than 100 years, Fluor Corporation (NYSE: FLR) has partnered with its
clients to design, build and maintain many of the world's most challenging and
complex capital projects. Through its global network of offices on six
continents, more than 40,000 employees provide comprehensive capabilities and
world-class expertise in the fields of engineering, procurement, construction,
commissioning, fabrication, operations, maintenance and project management.
Today, the company serves a global client base in the energy, chemicals,
government, industrial, infrastructure, operations & maintenance,
manufacturing & life sciences, mining, power and transportation sectors.
Headquartered in Irving, Texas, Fluor ranks 124 on the FORTUNE 500 list and
had revenue of $27.6 billion in 2012. For more information visit
www.fluor.com.

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, failure to achieve projected
backlog, revenue and/or earnings levels; reduced profits or losses under
contracts if costs increase above our estimates; intense competition in the
global engineering, procurement and construction industry, which can place
downward pressure on the Company’s contract prices and profit margins; the
Company's failure to receive anticipated new contract awards and the related
impacts on revenues, earnings, staffing levels and costs; failure to obtain
favorable results in existing or future litigation or dispute resolution
proceedings; current economic conditions affecting our clients, partners,
subcontractors and suppliers; delays or defaults in client payments; 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; foreign economic and political uncertainties that could lead to
project disruptions, increased costs and potential losses; failure to meet
timely completion or performance standards that could result in higher costs,
reduced profits or, in some cases, losses on projects; 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;
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; international security risks; client
cancellations of, or scope adjustments to, existing contracts, including the
Company’s government contracts that may be terminated at any time, and the
related impacts on staffing levels and cost; decreased capital investment or
expenditures, or a failure to make anticipated increased capital investment or
expenditures, by the Company’s clients; the potential impact of certain tax
matters including, but not limited to, those from foreign operations and
ongoing audits by tax authorities; the failure of financial institutions where
we hold our cash and investments; possible information technology
interruptions or inability to protect intellectual property; liabilities
arising for faulty engineering services; the impact of anti-bribery and
international trade laws and regulations; the impact of environmental, health
and safety regulations or other laws; the availability of credit and
restrictions imposed by credit facilities, both for the Company and our
clients, suppliers, subcontractors or other partners; foreign exchange risks;
the Company’s ability to hire and retain qualified personnel; failure to
maintain safe worksites; and risks or uncertainties associated with
acquisitions, dispositions and investments. 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 20, 2013.
Such filings are available either publicly or upon request from Fluor's
Investor Relations Department: (469) 398-7220. 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                   2012             2011
Revenue                                          $ 7,022.7        $ 6,252.1
Cost and expenses:
Cost of revenue                                    7,038.3          5,942.5
Corporate general and administrative               41.1             61.1
expense
Interest expense (income), net                    3.3            (0.1     )
Total cost and expenses                           7,082.7        6,003.5  
Earnings (loss) before income taxes                (60.0    )       248.6
Income tax expense (benefit)                      (89.1    )      64.8     
Net earnings                                       29.1             183.8
Less: Net earnings attributable to                33.5           30.7     
noncontrolling interests
Net earnings (loss) attributable to              $ (4.4     )     $ 153.1    
Fluor Corporation
Basic earnings (loss) per share
Net earnings (loss)                              $ (0.03    )     $ 0.91
Weighted average shares                            164.7            169.2
Diluted earnings (loss) per share
Net earnings (loss)                              $ (0.03    )     $ 0.90
Weighted average shares                            164.7            170.8
New awards                                       $ 5,116.1        $ 4,265.2
Backlog                                          $ 38,199.4       $ 39,483.7
Work performed                                   $ 6,845.1        $ 6,107.0
                                                                    
                                                                    
                                                                    
YEAR ENDED DECEMBER 31                           2012             2011
Revenue                                          $ 27,577.1       $ 23,381.4
Cost and expenses:
Cost of revenue                                    26,692.1         22,232.5
Corporate general and administrative               151.0            163.5
expense
Interest expense (income), net                    0.5            (16.4    )
Total cost and expenses                           26,843.6       22,379.6 
Earnings before income taxes                       733.5            1,001.8
Income tax expense                                162.4          303.7    
Net earnings                                       571.1            698.1
Less: Net earnings attributable to                114.8          104.4    
noncontrolling interests
Net earnings attributable to Fluor               $ 456.3         $ 593.7    
Corporation
Basic earnings per share
Net earnings                                     $ 2.73           $ 3.44
Weighted average shares                            167.1            172.5
Diluted earnings per share
Net earnings                                     $ 2.71           $ 3.40
Weighted average shares                            168.5            174.6
New awards                                       $ 27,129.2       $ 26,896.1
Backlog                                          $ 38,199.4       $ 39,483.7
Work performed                                   $ 26,899.4       $ 22,808.8
                                                                    


FLUOR CORPORATION
Unaudited
                                                             
BUSINESS
SEGMENT
FINANCIAL
REVIEW
($ in
millions)
                                                                             
THREE MONTHS
ENDED DECEMBER             2012                            2011       
31
Revenue
Oil & Gas                  $ 2,626.6                        $ 2,109.6
Industrial &                 2,843.6                          2,707.5
Infrastructure
Government                   793.1                            849.4
Global                       468.8                            403.2
Services
Power                       290.6                          182.4    
Total revenue              $ 7,022.7                       $ 6,252.1  
                                                                             
Segment profit
(loss) $ and
margin %
Oil & Gas                  $ 90.0             3.4  %        $ 71.4           3.4  %
Industrial &                 (231.8   )       (8.2 )%         120.8          4.5  %
Infrastructure
Government                   51.5             6.5  %          36.7           4.3  %
Global                       43.9             9.4  %          40.4           10.0 %
Services
Power                        (2.5     )       (0.9 )%         9.3           5.1  %
Total segment
profit (loss)              $ (48.9    )       (0.7 )%       $ 278.6          4.5  %
$ and margin %
                                                                             
Corporate
general and                  (41.1    )                       (61.1    )
administrative
expense
Interest
(expense)                    (3.3     )                       0.1
income, net
Earnings
attributable
to                          33.3                           31.0     
noncontrolling
interests
Earnings
(loss) before              $ (60.0    )                     $ 248.6    
taxes
                                                                             
                                                                             
YEAR ENDED                 2012                            2011       
DECEMBER 31
Revenue
Oil & Gas                  $ 9,513.9                        $ 7,961.7
Industrial &                 12,195.7                         9,700.4
Infrastructure
Government                   3,304.7                          3,398.2
Global                       1,721.7                          1,577.7
Services
Power                       841.1                          743.4    
Total revenue              $ 27,577.1                      $ 23,381.4 
                                                                             
Segment profit
(loss) $ and
margin %
Oil & Gas                  $ 334.7            3.5  %        $ 275.6          3.5  %
Industrial &                 124.3            1.0  %          389.3          4.0  %
Infrastructure
Government                   149.7            4.5  %          145.5          4.3  %
Global                       177.6            10.3 %          151.8          9.6  %
Services
Power                        (16.9    )       (2.0 )%         81.1          10.9 %
Total segment
profit $ and               $ 769.4            2.8  %        $ 1,043.3        4.5  %
margin %
                                                                             
Corporate
general and                  (151.0   )                       (163.5   )
administrative
expense
Interest
(expense)                    (0.5     )                       16.4
income, net
Earnings
attributable
to                          115.6                          105.6    
noncontrolling
interests
Earnings                   $ 733.5                         $ 1,001.8  
before taxes
                                                                             


FLUOR CORPORATION
Unaudited
                                                        
SELECTED BALANCE SHEET ITEMS
($ in millions, except per share
amounts)
                                             DECEMBER 31,         DECEMBER 31,
                                             2012                 2011
Cash and marketable securities,              $  2,610.0           $  2,761.4
including noncurrent
Total current assets                            6,094.1              5,878.7
Total assets                                    8,276.0              8,268.4
Total short-term debt                           20.8                 19.5
Total current liabilities                       3,887.1              3,838.2
Long-term debt                                  520.2                513.5
Shareholders' equity                            3,341.3              3,395.5
                                                                     
Total debt to capitalization %                  13.9    %            13.6    %
(based on shareholders' equity)
Shareholders' equity per share               $  20.58             $  20.09
                                                                     
                                                                     
SELECTED CASH FLOW ITEMS
($ in millions)
                                                                     
YEAR ENDED DECEMBER 31                       2012                 2011
                                                                     
Cash provided by operating                   $  628.4            $  889.7   
activities
                                                                     
Investing activities
Net sales and maturities (purchases)            143.3                (133.4  )
of marketable securities
Capital expenditures                            (254.7  )            (338.2  )
Proceeds from disposal of property,             77.8                 53.8
plant and equipment
Investments in partnerships and                 (30.8   )            (8.1    )
joint ventures
Proceeds from sale of a cost method             55.1                 11.0
investment and other assets
Other items                                    (29.1   )           (21.5   )
Cash utilized by investing                     (38.4   )           (436.4  )
activities
                                                                     
Financing activities
Repurchase of common stock                      (389.2  )            (639.6  )
Dividends paid                                  (128.7  )            (87.7   )
Proceeds from issuance of 3.375%                -                    495.6
Senior Notes
Repayment of convertible debt and               (7.5    )            (77.2   )
notes payable
Distributions paid to noncontrolling
interests, net of capital                       (98.0   )            (80.9   )
contributions
Other Items                                    6.8                (6.0    )
Cash utilized by financing                     (616.6  )           (395.8  )
activities
                                                                     
Effect of exchange rate changes on             19.7               (31.1   )
cash
                                                                  
Increase (decrease) in cash and cash         $  (6.9    )         $  26.4    
equivalents
                                                                     
                                                                     
Depreciation                                 $  210.4            $  199.4   
                                                                     

                                                                
FLUOR CORPORATION
Supplemental Fact Sheet
Unaudited

                                                                                     
NEW AWARDS
($ in
millions)
                                                                                     
THREE MONTHS
ENDED DECEMBER           2012                             2011                       % Chg
31
                                                                                     
Oil & Gas                $ 1,668        33  %             $ 2,549        60  %       (35 )%
Industrial &               3,030        59  %               504          12  %       501 %
Infrastructure
Government                 115          2   %               125          3   %       (8  )%
Global                     211          4   %               140          3   %       51  %
Services
Power                     92        2   %              947       22  %       (90 )%
Total new                $ 5,116     100 %             $ 4,265     100 %       20  %
awards
                                                                                     
YEAR ENDED               2012                             2011                       % Chg
DECEMBER 31
                                                                                     
Oil & Gas                $ 12,602       47  %             $ 8,325        31  %       51  %
Industrial &               9,516        35  %               12,238       45  %       (22 )%
Infrastructure
Government                 3,223        12  %               3,724        14  %       (13 )%
Global                     904          3   %               1,028        4   %       (12 )%
Services
Power                     884       3   %              1,581     6   %       (44 )%
Total new                $ 27,129    100 %             $ 26,896    100 %       1   %
awards
                                                                                     
                                                                                     
                                                                                     
BACKLOG TRENDS
($ in
millions)
                                                                                     
AS OF DECEMBER           2012                             2011                       % Chg
31
                                                                                     
Oil & Gas                $ 18,181       48  %             $ 15,068       38  %       21  %
Industrial &               15,472       40  %               19,601       49  %       (21 )%
Infrastructure
Government                 978          3   %               1,091        3   %       (10 )%
Global                     1,691        4   %               1,881        5   %       (10 )%
Services
Power                     1,877     5   %              1,843     5   %       2   %
Total backlog            $ 38,199    100 %             $ 39,484    100 %       (3  )%
                                                                                     
United States            $ 9,445        25  %             $ 8,572        22  %       10  %
The Americas
(excluding the             13,355       35  %               12,223       31  %       9   %
United States)
Europe, Africa
and the Middle             9,553        25  %               8,172        21  %       17  %
East
Asia Pacific
(including                5,846     15  %              10,517    26  %       (44 )%
Australia)
Total backlog            $ 38,199    100 %             $ 39,484    100 %       (3  )%

Contact:

Fluor Corporation
Media Relations
Keith Stephens, 469-398-7624
or
Brian Mershon, 469-398-7621
or
Investor Relations
Ken Lockwood, 469-398-7220
or
Jason Landkamer, 469-398-7222
 
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