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Fluor Reports Third Quarter Results

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Fluor Corporation (NYSE:FLR) today announced financial results for its
third quarter ended September 30, 2018. Earnings attributable to Fluor
for the third quarter were $77 million, or $0.55 per diluted share,
compared to $94 million, or $0.67 per diluted share a year ago. The
effective tax rate for the quarter was 34%, due to the company being
unable to recognize tax benefits on certain foreign charges.
Consolidated segment profit for the quarter was $207 million, compared
to $203 million a year ago. Third quarter revenue was $4.7 billion
compared to $4.9 billion in the prior year.

New awards for the quarter were $9.6 billion, including $5.4 billion in
Mining, Industrial, Infrastructure & Power, $3.3 billion in Government,
$644 million in Energy & Chemicals and $336 million in Diversified
Services. Consolidated ending backlog was $34.9 billion, up from $32.9
billion a year ago.

"Our significant increase in new awards for the quarter is attributable
to the improvements in the energy and commodity markets as well as our
success in infrastructure and government," said David Seaton, Fluor
chairman and chief executive officer. "We believe our transformation to
a data driven, predictive analytics platform, combined with our
fabrication capacity and craft labor workforce, can improve cost and
schedule certainty for clients and stakeholders."

Corporate G&A expense for the third quarter of 2018 was $65 million,
compared to $46 million a year ago. Expenses for the quarter include $21
million related to UK pension settlement expenses and foreign currency
exchange fluctuations. Fluor's cash and marketable securities balance at
the end of the third quarter was $1.9 billion.

Outlook

The Company anticipates earnings for 2018 of $1.80 to $1.90 per diluted
share, excluding any impact of foreign exchange fluctuations or UK
pension settlement expenses.

Business Segments

Fluor's Energy & Chemicals segment reported segment profit of
$50 million, compared to $100 million in the third quarter of 2017.
Results for the quarter include a pre-tax charge of $46 million for
forecast revisions on a downstream project. Revenue for the segment was
$1.9 billion compared to $2.2 billion a year ago. New awards for the
segment totaled $644 million and ending backlog was $11.4 billion
compared to $16.5 billion a year ago.

The Mining, Industrial, Infrastructure & Power segment reported a
segment profit of $101 million, compared to $37 million in the third
quarter of 2017. Results for the quarter include a pre-tax charge of $35
million for forecast revisions on a gas-fired power project and a $125
million pre-tax benefit related to the Company's sale of its Seagreen
offshore investment. Revenue for the segment was $1.4 billion compared
to $1.3 billion a year ago. New awards in the third quarter were $5.4
billion, including a copper mine in Peru and an international bridge
project in Canada. Ending backlog for the segment was $16.5 billion,
compared to $10.1 billion a year ago.

The Government segment reported segment profit of $32 million, compared
to $30 million a year ago. Revenue for the quarter was $781 million,
compared to $766 million a year ago. Third quarter new awards of $3.3
billion include contract extensions for the Strategic Petroleum Reserve,
Portsmouth and Savannah River projects. Ending backlog was $5.1 billion
compared to $3.6 billion a year ago.

The Diversified Services segment reported segment profit of $24 million
in the third quarter of 2018, compared to $35 million a year ago.
Revenue for the quarter was $588 million compared to $624 million in the
third quarter of 2017. New awards totaled $336 million for the quarter,
and ending backlog was $2.0 billion compared to $2.7 billion a year ago.

Third Quarter Conference Call

Fluor will host a conference call at 5:30 p.m. Eastern time on Thursday,
November 1, which will be webcast live on the Internet and can be
accessed by logging onto 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; and other non-operating income and
expense items. 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 (loss) before taxes is
included in the press release tables. This press release also includes
forward-looking references to earnings per diluted share with certain
exclusions that would be deemed a non-GAAP financial measure under SEC
rules. Because the company is unable to reliably estimate the amounts of
the excluded items, this press release does not contain a reconciliation
to earnings per diluted share, the most directly comparable
forward-looking measure.

About Fluor Corporation

Founded in 1912, Fluor
Corporation
(NYSE:FLR) is a global engineering, procurement,
fabrication, construction and maintenance company that transforms the
world by building prosperity and empowering progress. Fluor serves its
clients by designing, building and maintaining safe, well executed,
capital-efficient projects around the world. With headquarters in
Irving, Texas, Fluor ranks 153 on the Fortune 500 list with
revenue of $19.5 billion in 2017 and has more than 56,000 employees
worldwide. For more information, please visit www.fluor.com
or follow Fluor on Facebook,
Twitter,
LinkedIn
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
"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 Company's failure
to meet cost and schedule estimates; the cyclical nature of many of the
markets the Company serves, including the Company's Energy & Chemicals
segment; the Company's failure to receive new contract awards; cost
overruns, project delays or other problems arising from project
execution activities; intense competition in the industries in which we
operate; failure of our joint venture or other partners, suppliers or
subcontractors to perform their obligations; failure to obtain favorable
results in existing or future litigation or dispute resolution
proceedings or claims; cyber-security breaches; foreign economic and
political uncertainties; client cancellations of, or scope adjustments
to, existing contracts; client delays or defaults in making payments;
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, including those relating to environmental, health and
safety matters; liabilities associated with the performance of nuclear
services; foreign currency risks; the availability of credit and
restrictions imposed by credit facilities, both for the Company and our
clients, suppliers, subcontractors or other partners; failure to
maintain safe worksites and international security risks; the inability
to hire and retain qualified personnel; 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; the use of
estimates and assumptions in preparing our financial statements; 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 20, 2018.
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.

 
 
FLUOR CORPORATION
CONSOLIDATED FINANCIAL RESULTS
(in millions, except per share amounts)
Unaudited
 
CONSOLIDATED OPERATING RESULTS        
 
THREE MONTHS ENDED SEPTEMBER 30 2018 2017
Revenue $ 4,658.0 $ 4,941.6
Cost and expenses:
Cost of revenue 4,432.3 4,720.0
Corporate general and administrative expense 64.7 46.0
Interest expense, net   14.5   10.2
Total cost and expenses   4,511.5   4,776.2
Earnings before taxes 146.5 165.4
Income tax expense   50.5   52.5
Net earnings 96.0 112.9
Less: Net earnings attributable to noncontrolling interests   18.7   18.4
Net earnings attributable to Fluor Corporation $ 77.3 $ 94.5
 
Basic earnings per share
Net earnings $ 0.55 $ 0.68
Weighted average shares 140.7 139.9
Diluted earnings per share
Net earnings $ 0.55 $ 0.67
Weighted average shares 141.5 140.8
 
New awards $ 9,644.1 $ 3,822.9
Backlog $ 34,898.4 $ 32,915.2
Work performed $ 4,541.8 $ 4,819.0
 
 
FLUOR CORPORATION
CONSOLIDATED FINANCIAL RESULTS
(in millions, except per share amounts)
Unaudited
 
CONSOLIDATED OPERATING RESULTS        
 
NINE MONTHS ENDED SEPTEMBER 30 2018 2017
Revenue $ 14,365.5 $ 14,493.6
Cost and expenses:
Cost of revenue 13,871.8 14,090.1
Corporate general and administrative expense 139.8 138.3
Interest expense, net   32.8   30.3
Total cost and expenses   14,044.4   14,258.7
Earnings before taxes 321.1 234.9
Income tax expense   106.0   51.3
Net earnings 215.1 183.6
Less: Net earnings attributable to noncontrolling interests   40.5   52.6
Net earnings attributable to Fluor Corporation $ 174.6 $ 131.0
 
Basic earnings per share
Net earnings $ 1.24 $ 0.94
Weighted average shares 140.5 139.7
Diluted earnings per share
Net earnings $ 1.23 $ 0.93
Weighted average shares 141.4 140.8
 
New awards $ 17,562.6 $ 9,331.0
Backlog $ 34,898.4 $ 32,915.2
Work performed $ 14,010.2 $ 14,162.3
 
 
FLUOR CORPORATION
Unaudited
 
BUSINESS SEGMENT FINANCIAL REVIEW AND U.S. GAAP RECONCILIATION
($ in millions)            
 
THREE MONTHS ENDED SEPTEMBER 30   2018     2017  
Revenue
Energy & Chemicals $ 1,902.3 $ 2,212.2
Mining, Industrial, Infrastructure & Power 1,387.3 1,339.4
Government 780.9 766.0
Diversified Services   587.5     624.0  
Total revenue $ 4,658.0   $ 4,941.6  
 
Segment profit $ and margin % (2)
Energy & Chemicals $ 50.2 2.6 % $ 100.5 4.5 %
Mining, Industrial, Infrastructure & Power (1) 100.7 7.3 % 37.1 2.8 %
Government 32.0 4.1 % 30.2 3.9 %
Diversified Services   24.2   4.1 %   35.4   5.7 %
Total segment profit $ and margin % $ 207.1 4.4 % $ 203.2 4.1 %
 
Corporate general and administrative expense (64.7 ) (46.0 )
Interest expense, net (14.5 ) (10.2 )
Earnings attributable to noncontrolling interests   18.6     18.4  
Earnings before taxes $ 146.5   $ 165.4  
 
 
 
NINE MONTHS ENDED SEPTEMBER 30   2018     2017  
Revenue
Energy & Chemicals $ 5,859.8 $ 6,490.9
Mining, Industrial, Infrastructure & Power 3,637.1 3,892.7
Government 2,971.4 2,275.4
Diversified Services   1,897.2     1,834.6  
Total revenue $ 14,365.5   $ 14,493.6  
 
Segment profit (loss) $ and margin % (2)
Energy & Chemicals $ 253.1 4.3 % $ 308.4 4.8 %
Mining, Industrial, Infrastructure & Power (1) (27.0 ) (0.7 )% (130.8 ) (3.4 )%
Government 155.3 5.2 % 78.9 3.5 %
Diversified Services   71.8   3.8 %   94.4   5.1 %
Total segment profit $ and margin % $ 453.2 3.2 % $ 350.9 2.4 %
 
Corporate general and administrative expense (139.8 ) (138.3 )
Interest expense, net (32.8 ) (30.3 )
Earnings attributable to noncontrolling interests   40.5     52.6  
Earnings before taxes $ 321.1   $ 234.9  

(1)

 

Includes research and development expenses associated with NuScale
totaling $18 million and $65 million for the three and nine months
ended September 30, 2018, respectively, compared to $20 million
and $53 million for the three and nine months ended September 30,
2017, respectively.

(2)

Segment profit margin % is calculated as segment profit divided by
segment revenue.

 
 
FLUOR CORPORATION
Unaudited
       
SELECTED BALANCE SHEET ITEMS
($ in millions)
SEPTEMBER 30, DECEMBER 31,
  2018     2017  
Cash and marketable securities, including noncurrent $ 1,922.8 $ 2,078.8
Total current assets 5,584.2 5,601.3
Total assets 9,148.0 9,327.7
Total short-term debt 56.9 27.4
Total current liabilities 3,662.1 3,574.2
Long-term debt 1,667.4 1,591.6
Shareholders' equity 3,043.0 3,342.3
 
 
 
SELECTED CASH FLOW ITEMS
($ in millions)
 
NINE MONTHS ENDED SEPTEMBER 30   2018     2017  
 
Cash provided (utilized) by operating activities $ (11.3 ) $ 550.6  
 
Investing activities
Net sales and maturities (purchases) of marketable securities 29.4 (54.0 )
Capital expenditures (148.7 ) (216.3 )
Proceeds from disposal of property, plant and equipment 60.9 55.9
Investments in partnerships and joint ventures (33.8 ) (241.6 )
Other items   20.5     -  
Cash utilized by investing activities   (71.7 )   (456.0 )
 
Financing activities
Dividends paid (89.2 ) (88.6 )
Proceeds from issuance of 4.250% Senior Notes 598.7 -
Repayment of 3.375% Senior Notes (503.3 ) -
Repayment of borrowings under revolving lines of credit - (53.5 )
Net proceeds from issuance of commercial paper 24.5 -
Debt issuance costs (5.0 ) -
Distributions paid to noncontrolling interests, net of capital
contributions
(30.4 ) (19.2 )
Other items   (3.7 )   1.1  
Cash utilized by financing activities   (8.4 )   (160.2 )
 
Effect of exchange rate changes on cash   (32.9 )   42.2  
 
Decrease in cash and cash equivalents $ (124.3 ) $ (23.4 )
 
 
Depreciation $ 150.6   $ 153.9  
 
 
FLUOR CORPORATION
Supplemental Fact Sheet
Unaudited
               
NEW AWARDS
($ in millions)
 
THREE MONTHS ENDED SEPTEMBER 30 2018 2017
 
Energy & Chemicals $ 644 7 % $ 1,526 40 %
Mining, Industrial, Infrastructure & Power 5,370 56 % 1,725 45 %
Government 3,294 34 % 234 6 %
Diversified Services   336     3 %   338     9 %
Total new awards $ 9,644     100 % $ 3,823     100 %
 
 
NINE MONTHS ENDED SEPTEMBER 30 2018 2017
 
Energy & Chemicals $ 1,858 11 % $ 2,973 32 %
Mining, Industrial, Infrastructure & Power 10,343 59 % 3,403 36 %
Government 4,079 23 % 1,516 16 %
Diversified Services   1,283     7 %   1,439     16 %
Total new awards $ 17,563     100 % $ 9,331     100 %
 
 
BACKLOG TRENDS
($ in millions)
 
AS OF SEPTEMBER 30 2018 2017
 
Energy & Chemicals $ 11,352 33 % $ 16,472 50 %
Mining, Industrial, Infrastructure & Power 16,499 47 % 10,131 31 %
Government 5,065 14 % 3,572 11 %
Diversified Services   1,982     6 %   2,740     8 %
Total backlog $ 34,898     100 % $ 32,915     100 %
 
 
United States $ 12,864 37 % $ 13,159 40 %
The Americas (excluding the United States) 8,378 24 % 3,626 11 %
Europe, Africa and the Middle East 10,515 30 % 14,179 43 %
Asia Pacific (including Australia)   3,141     9 %   1,951     6 %
Total backlog $ 34,898     100 % $ 32,915     100 %

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