8-K
FLUOR CORP (FLR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 2020
FLUOR CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-16129 | 33-0927079 |
|---|---|---|
| (State<br>or other jurisdiction of<br> incorporation) | (Commission File Number) | (IRS Employer Identification<br> No.) |
| 6700 Las Colinas Blvd. Irving, Texas | 75039 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
(469) 398-7000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value per share | FLR | New York Stock Exchange |
| Preferred Stock Purchase Rights | FLR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On December 10, 2020, Fluor Corporation (the “Company”) announced its financial results for the quarter ended September 30, 2020. A copy of the press release (the “Earnings Release”) making this announcement is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section. Furthermore, this Current Report on Form 8-K, including the exhibit, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934.
The Company includes backlog and new awards data in the Earnings Release. Backlog is a measure of the total dollar value of work to be performed on contracts awarded and in progress. Although backlog reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. New awards measure the total dollar value of work to be performed on contracts awarded in the period. Backlog and new awards measures are regularly reported in the construction industry.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | Press<br> Release issued by Fluor Corporation on December 10, 2020 announcing its financial results for the quarter ended September<br> 30, 2020. |
| 104 | Cover<br> Page Interactive Data File, formatted in Inline XBRL, and included as Exhibit 101. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: December 10, 2020 | FLUOR CORPORATION | |
|---|---|---|
| By: | /s/ Joseph<br> L. Brennan | |
| Joseph L. Brennan | ||
| Executive Vice President and Chief Financial<br> Officer |
Exhibit 99.1
| Fluor Corporation | Brian Mershon |
|---|---|
| 6700 Las Colinas Blvd | Media Relations |
| Irving, Texas 75039 | 469.398.7621 tel |
| 469.398.7000<br> main tel | Jason Landkamer |
| Investor Relations | |
| 469.398.7222 tel | |
| News Release | |
| --- |
FLUORREPORTS THIRD QUARTER 2020 RESULTS
| · | Fluor reports earnings per share of $0.14 for the third quarter of 2020 |
|---|---|
| · | No material project execution charges in the first three quarters of 2020 |
| --- | --- |
| · | Company now current with all financial filings and debt requirements |
| --- | --- |
| · | COVID-19 continues to delay new awards as clients defer capital investments |
| --- | --- |
IRVING, Texas (December 10,2020) – Fluor Corporation (NYSE: FLR) today announced financial results for its quarter ended September 30, 2020. Revenue for the quarter was $3.8 billion and net earnings from continuing operations attributable to Fluor was $19 million, or $0.14 per share. Consolidated segment profit for the quarter was $129 million compared to $79 million a year ago. Operating cash flow in the quarter was $80 million.
New awards for the third quarter were $1.7 billion and ending backlog was $27.8 billion. Corporate general and administrative expenses for the quarter were $68 million which included foreign currency transaction losses of $30 million and investigation expenses of $19 million in the quarter.
“With today’s 10-Q filing, Fluor is now current with its financials,” said Carlos Hernandez, Fluor’s chief executive officer, “While 2020 has provided a lot of unexpected challenges for our business, we are pleased to report that for the third consecutive quarter, we have had no material project execution charges.”
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Outlook
Although Fluor has suspended its guidance for 2020, the company expects to report fourth quarter results and 2021 guidance to the investment community in February 2021. The company expects its cash balance to remain around $2 billion through the end of the year. COVID-19 continues to impact our business as clients are deferring capital investment decisions and the pandemic has slowed down our ability to fully staff and execute projects.
Business Segments
The Energy & Chemicals segment reported profit of $95 million in the third quarter of 2020 up from $85 million in the third quarter of 2019. Segment profit for the quarter improved primarily due to increased activity on a liquefied natural gas project and favorable foreign currency transaction gains. New awards were $141 million and backlog is $11.6 billion.
The Mining & Industrial segment reported profit of $18 million in the third quarter of 2020 compared to $57 million in the third quarter of 2019. Revenue and segment profit in the quarter decreased due to deferred execution activities on a few large mining projects due to COVID-19. New awards were $268 million including the influenza and antivenom cell culture facility in Australia for Seqirus. Third quarter ending backlog is $4.8 billion.
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The Infrastructure & Power segment reported profit of $6 million in the third quarter of 2020 compared to $1 million in the third quarter of 2019. Lower margin contributions from certain infrastructure projects for which charges were recognized during 2019 continue to adversely impact near term segment profit margin. In the third quarter, Fluor terminated its contract with the Maryland Department of Transportation for the Purple Line Project and removed the project from its backlog. New awards were $683 million including the Oak Hill Parkway for Texas Department of Transportation. Third quarter ending backlog is $5.6 billion.
The Government segment reported profit of $26 million in the third quarter of 2020, up from $22 million in the third quarter of 2019. Results include new awards of $188 million and ending backlog is $3.4 billion.
The Diversified Services segment reported a segment profit of $7 million in the third quarter of 2020 compared to $11 million in the third quarter of 2019. Stork divested EQIN, its equipment rental business in Europe, in the third quarter. New awards were $469 million in the quarter and ending backlog is $2.3 billion.
The Other segment, which is comprised of NuScale and the Radford and Warren government projects, reported a loss of $23 million in the third quarter of 2020 compared to a loss of $97 million in the third quarter of 2019. NuScale expenses in the third quarter of 2020 were $22 million. Remaining backlog in the segment is $145 million.
Discontinued Operations
Results from discontinued operations, which includes the held-for-sale AMECO equipment business, were immaterial. During the quarter, Fluor sold its AMECO Jamaica business for $18 million net of working capital and recognized a loss of $1 million. The company expects to complete the sale of the remaining AMECO business within the first half of 2021.
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Non-GAAP Financial Measures
This news release contains a discussion of consolidated segment profit from continuing operations 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 the following: corporate general and administrative expense; impairment, restructuring and other exit costs; interest expense; interest income; domestic and foreign income taxes; other non-operating income and expense items; and earnings from discontinued operations. The company believes that consolidated segment profit from continuing operations 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 consolidated segment profit from continuing operations to earnings from continuing operations before taxes is included in the press release table.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company with projects and offices on six continents. Fluor’s 45,000 employees build a better world and provide sustainable solutions by designing, building and maintaining safe, well executed projects. Fluor had revenue of $17.3 billion in 2019 and is ranked 181 among the Fortune 500 companies. With headquarters in Irving, Texas, Fluor has served its clients for more than 100 years. For more information, please visit www.fluor.com or follow Fluor on Twitter, LinkedIn, Facebook and YouTube.
Forward-Looking Statements:This release may contain forward-looking statements (including without limitation statements to the effect that the Companyor its management "will," "believes," "expects," "plans," "continue" is "positioned"or other similar expressions). These forward-looking statements, including statements relating to strategic and operation plans,future growth, backlog, earnings and the outlook for the company’s business, projected cash balances and liquidity are basedon current management expectations and involve risks and uncertainties.
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Actual results may differmaterially as a result of a number of factors, including, among other things, the severity and durationof the COVID-19 pandemic and actions by governments, businesses and individuals in response to the pandemic, including the durationand severity of economic disruptions; the cyclical nature of many of the markets the Company serves, including the Company’sEnergy & Chemicals segment; the Company's failure to receive new contract awards; cost overruns, project delays or other problemsarising from project execution activities, including the failure to meet cost and schedule estimates; failure to remediate materialweaknesses in our internal controls over financial reporting or the failure to maintain an effective system of internal controls;failure to prepare and timely file our periodic reports; the restatement of certain of our previously issued consolidated financialstatements; intense competition in the industries in which we operate; failure to obtain favorable results in existing or futurelitigation and regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failureof our joint venture or other partners, suppliers or subcontractors to perform their obligations; cyber-security breaches; foreigneconomic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; failure to maintainsafe worksites and international security risks; risks or uncertainties associated with events outside of our control, includingweather conditions, pandemics, public health crises, political crises or other catastrophic events; the use of estimates and assumptionsin preparing our financial statements; client delays or defaults in making payments; the failure of our suppliers, subcontractorsand other third parties to adequately perform services under our contracts; risks related to our indebtedness; the availabilityof credit and restrictions imposed by credit facilities, both for the Company and our clients, suppliers, subcontractors or otherpartners; possible limitations on bonding or letter of credit capacity; failure to successfully implement our strategic and operationalinitiatives; risks or uncertainties associated with acquisitions, dispositions and investments; risks arising from the inabilityto successfully integrate acquired businesses; uncertainties, restrictions and regulations impacting our government contracts;the inability to hire and retain qualified personnel; the potential impact of certain tax matters; possible information technologyinterruptions or inability to protect intellectual property; the Company’s failure, or the failure of our agents or partners,to comply with laws; the Company's ability to secure appropriate insurance; new or changing legal requirements, including thoserelating to climate change and environmental, health and safety matters; liabilities associated with the performance of nuclearservices; foreign currency risks; the loss of one or a few clients that account for a significant portion of the Company's revenues;damage to our reputation; failure to adequately protect intellectual property rights; asset impairments; and restrictions on possibletransactions imposed by our charter documents, Delaware law and our stockholder rights agreement. Caution must be exercised inrelying on these and other forward-looking statements. Due to known and unknown risks, the Company’s results may differmaterially from its expectations and projections.
Additional information concerningthese and other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, includingthe discussion under the heading "Item 1A. Risk Factors" in the Company's Form 10-K filed on September 25, 2020. Suchfilings are available either publicly or upon request from Fluor's Investor Relations Department: (469) 398-7222. The Companydisclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new informationor future events.
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SUMMARY FINANCIALS AND U.S. GAAP RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT
| Nine Months Ended September 30, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) | 2019 | 2020 | 2019 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Energy & Chemicals | 1,336.0 | $ | 1,611.6 | $ | 4,187.4 | $ | 4,485.2 | ||||||||||||
| Mining & Industrial | 920.9 | 1,374.0 | 3,107.8 | 3,703.6 | |||||||||||||||
| Infrastructure & Power | 386.5 | 392.5 | 1,247.1 | 965.9 | |||||||||||||||
| Government | 753.7 | 718.2 | 2,173.2 | 2,196.2 | |||||||||||||||
| Diversified Services | 370.3 | 521.7 | 1,210.3 | 1,525.0 | |||||||||||||||
| Other | 35.8 | 10.6 | 87.0 | 32.7 | |||||||||||||||
| Revenue | 3,803.2 | $ | 4,628.6 | $ | 12,012.8 | $ | 12,908.6 | ||||||||||||
| Segment profit (loss) and margin % | |||||||||||||||||||
| Energy & Chemicals | 94.9 | 7.1 | % | $ | 84.7 | 5.3 | % | $ | 129.4 | 3.1 | % | $ | (125.1 | ) | (2.8 | )% | |||
| Mining & Industrial | 18.2 | 2.0 | % | 56.9 | 4.1 | % | 86.7 | 2.8 | % | 129.1 | 3.5 | % | |||||||
| Infrastructure & Power | 6.4 | 1.7 | % | 0.9 | 0.2 | % | 15.1 | 1.2 | % | (188.0 | ) | (19.5 | )% | ||||||
| Government | 25.7 | 3.4 | % | 22.4 | 3.1 | % | 67.1 | 3.1 | % | 87.2 | 4.0 | % | |||||||
| Diversified Services | 7.1 | 1.9 | % | 10.5 | 2.0 | % | 7.4 | 0.6 | % | 22.2 | 1.5 | % | |||||||
| Other | (22.9 | ) | (64.0 | )% | (96.6 | ) | NM | (63.7 | ) | (73.2 | )% | (200.2 | ) | NM | |||||
| Total segment profit (loss) and margin % (1) | 129.4 | 3.4 | % | $ | 78.8 | 1.7 | % | $ | 242.0 | 2.0 | % | $ | (274.8 | ) | (2.1 | )% | |||
| Corporate G&A | (68.1 | ) | (11.2 | ) | (93.8 | ) | (119.7 | ) | |||||||||||
| Impairment, restructuring and other exit costs | — | (334.0 | ) | (302.7 | ) | (388.0 | ) | ||||||||||||
| Interest expense, net | (13.4 | ) | (4.9 | ) | (31.3 | ) | (14.7 | ) | |||||||||||
| Earnings (loss) attributable to NCI from Cont Ops | 4.3 | 12.5 | 20.5 | (2.4 | ) | ||||||||||||||
| Earnings (loss) from Cont Ops before taxes | 52.2 | (258.8 | ) | (165.3 | ) | (799.6 | ) | ||||||||||||
| Income tax expense (benefit) | 28.8 | 495.3 | (6.9 | ) | 434.8 | ||||||||||||||
| Net earnings (loss) from Cont Ops | 23.4 | $ | (754.1 | ) | $ | (158.4 | ) | $ | (1,234.4 | ) | |||||||||
| New awards | |||||||||||||||||||
| Energy & Chemicals | 141.2 | $ | 256.3 | 1,880.8 | 1,990.7 | ||||||||||||||
| Mining & Industrial | 268.2 | 118.8 | 2,598.0 | 1,335.5 | |||||||||||||||
| Infrastructure & Power | 682.6 | 1,992.7 | 751.2 | 2,542.2 | |||||||||||||||
| Government | 187.8 | 1,130.1 | 1,813.1 | 1,853.5 | |||||||||||||||
| Diversified Services | 468.5 | 259.8 | 1,087.4 | 1,643.4 | |||||||||||||||
| Other | — | 0.5 | — | 152.1 | |||||||||||||||
| Total new awards | 1,748.3 | $ | 3,758.2 | $ | 8,130.5 | $ | 9,517.4 | ||||||||||||
| New awards related to projects located outside of the U.S. | 54 | % | 40 | % |
All values are in US Dollars.
| (1) | Total<br> segment profit (loss) is a non-GAAP financial measure. We believe that total segment<br> profit (loss) provides a meaningful perspective on our results as it is the aggregation<br> of individual segment profit (loss) measures that we use to evaluate and manage our performance. |
|---|
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| Backlog | September 30,<br><br>2020 | December 31,<br><br>2019 | ||||
|---|---|---|---|---|---|---|
| Energy & Chemicals | $ | 11,609.2 | $ | 14,128.9 | ||
| Mining & Industrial | 4,777.6 | 5,383.9 | ||||
| Infrastructure & Power | 5,577.7 | 6,079.4 | ||||
| Government | 3,353.4 | 3,556.1 | ||||
| Diversified Services | 2,311.1 | 2,541.6 | ||||
| Other | 145.2 | 244.0 | ||||
| Total backlog | $ | 27,774.2 | $ | 31,933.9 | ||
| Backlog related to projects located outside of the U.S. | 63 | % | 67 | % | ||
| Backlog related to lump-sum projects | 53 | % | 52 | % |
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