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): November 12, 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 November 12, 2020, Fluor Corporation (the “Company”) announced its financial results for the quarter ended June 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.
| ExhibitNumber | Description |
|---|---|
| 99.1 | Press Release issued by Fluor Corporation on November 12, 2020 announcing its financial results for the quarter ended June 30, 2020. |
| 104 | Cover 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: November 12, 2020 | FLUOR CORPORATION | |
|---|---|---|
| By: | /s/ Joseph L. Brennan | |
| Joseph L. Brennan | ||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
| Fluor Corporation | Brian Mershon |
|---|---|
| 6700 Las Colinas Blvd | Media Relations |
| Irving, Texas 75039 | 469.398.7621 tel |
| 469.398.7000 main tel | Jason Landkamer |
| Investor Relations | |
| 469.398.7222 tel | |
| News Release | |
| --- |
FLUORREPORTS SECOND QUARTER 2020 RESULTS
IRVING,Texas (November 12, 2020) – Fluor Corporation (NYSE: FLR) today announced financial results for its quarter ended June 30, 2020. Revenue for the quarter was $4.1 billion and net loss from continuing operations attributable to Fluor was $27 million, or $0.19 per share. Consolidated segment profit for the quarter was $61 million, compared to a loss of $393 million a year ago. Results for the quarter reflect the impact to its operations due to a severe downturn in the economy related to COVID-19. There were no material project adjustments in the quarter. Operating cash flow in the quarter was $128 million.
New awards for the second quarter were $2.2 billion and ending backlog was $29.0 billion. Corporate general and administrative expenses for the quarter were $40 million.
Outlook
Although Fluor has suspended its guidance for 2020, the company expects to report third quarter results and hold its next call with the investment community in approximately four weeks.
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BusinessSegments
The Energy & Chemicals segment reported a segment profit of $41 million in the second quarter of 2020 compared to a loss of $222 million in the second quarter of 2019. During the second quarter, the company sold its 50 percent ownership interest in Sacyr Fluor and recognized a loss of $11 million. New awards were $197 million and backlog is $12.4 billion. Award volume reflects the impact of COVID-19 and declining commodity prices on our customers’ capital spend.
The Mining & Industrial segment reported a segment profit of $30 million in the second quarter of 2020 compared to a profit of $45 million in the second quarter of 2019. New awards were $729 million and included the Gold Fields Salares Norte open pit gold mine in Chile. Second quarter ending backlog is $5.2 billion.
The Infrastructure & Power segment reported a segment profit of $4 million in the second quarter of 2020 compared to a loss of $167 million in the second 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. New awards were $61 million and backlog is $5.2 billion.
The Government segment reported a segment profit of $11 million in the second quarter of 2020 compared to $26 million in the second quarter of 2019. Results include new awards of $941 million which included an extension of an environmental management contract in South Carolina. Ending backlog is $3.8 billion.
The Diversified Services segment reported a segment loss of $5 million in the second quarter of 2020 compared to a gain of $3 million in the second quarter of 2019. Segment revenue and profit reflects significantly lower volumes in the Stork business and the staffing business resulting from reduced operations or restricted access to customer sites due to COVID-19. New awards were $262 million in the quarter and ending backlog is $2.2 billion.
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The Other segment, which is comprised of NuScale and the Radford and Warren government projects, reported a loss of $19 million in the second quarter of 2020 compared to a loss of $77 million in the second quarter of 2019. NuScale expenses in the second quarter of 2020 were $18 million. Remaining backlog in the segment is $179 million.
DiscontinuedOperations
Results from discontinued operations, which includes the held-for-sale AMECO equipment business, were a profit of $1.9 million in the second quarter of 2020 or $0.01 per share. The company expects to complete the sale of the AMECO business within the first half of 2021.
Non-GAAPFinancial 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.
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AboutFluor 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-LookingStatements: This release may contain forward-looking statements (including without limitation statements to the effect thatthe Company or its management "will," "believes," "expects," "plans," "continue"is "positioned" or other similar expressions). These forward-looking statements, including statements relating to ourexpectations as to the filing of our quarterly reports on Form 10-Q, strategic and operation plans, and projected cash balancesand liquidity are based on current management expectations and involve risks and uncertainties.
Actualresults may differ materially as a result of a number of factors, including, among other things, theseverity and duration of the COVID-19 pandemic and actions by governments, businesses and individuals in response to the pandemic,including the duration and severity of economic disruptions; 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, including the failure to meet cost and schedule estimates;failure to remediate material weaknesses in our internal controls over financial reporting or the failure to maintain an effectivesystem of internal controls; failure to prepare and timely file our periodic reports; the restatement of certain of our previouslyissued consolidated financial statements; intense competition in the industries in which we operate; failure to obtain favorableresults in existing or future litigation and regulatory proceedings, dispute resolution proceedings or claims, including claimsfor additional costs; failure of our joint venture or other partners, suppliers or subcontractors to perform their obligations;cyber-security breaches; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existingcontracts; failure to maintain safe worksites and international security risks; risks or uncertainties associated with eventsoutside of our control, including weather conditions, pandemics, public health crises, political crises or other catastrophicevents; the use of estimates and assumptions in preparing our financial statements; client delays or defaults in making payments;the failure of our suppliers, subcontractors and other third parties to adequately perform services under our contracts; risksrelated to our indebtedness; the availability of credit and restrictions imposed by credit facilities, both for the Company andour clients, suppliers, subcontractors or other partners; possible limitations on bonding or letter of credit capacity; failureto successfully implement our strategic and operational initiatives; risks or uncertainties associated with acquisitions, dispositionsand investments; risks arising from the inability to successfully integrate acquired businesses; uncertainties, restrictions andregulations impacting our government contracts; the inability to hire and retain qualified personnel; the potential impact ofcertain tax matters; possible information technology interruptions or inability to protect intellectual property; the Company’sfailure, 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 those relating to climate change and environmental, health and safety matters; liabilitiesassociated with the performance of nuclear services; foreign currency risks; the loss of one or a few clients that account fora significant portion of the Company's revenues; damage to our reputation; failure to adequately protect intellectual propertyrights; asset impairments; and restrictions on possible transactions imposed by our charter documents, Delaware law and our stockholderrights agreement. Caution must be exercised in relying on these and other forward-looking statements. Due to known and unknownrisks, the Company’s results may differ materially from its expectations and projections.
Additionalinformation concerning these and other factors can be found in the Company's public periodic filings with the Securities and ExchangeCommission, including the discussion under the heading "Item 1A. Risk Factors" in the Company's Form 10-K filed on September25, 2020. 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 lightof new information or future events.
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SUMMARY FINANCIALS AND U.S. GAAP RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT
| Six Months Ended June 30, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) | 2019 | 2020 | 2019 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Energy & Chemicals | 1,495.9 | $ | 1,398.9 | $ | 2,851.4 | $ | 2,873.6 | ||||||||||||
| Mining & Industrial | 1,013.0 | 1,278.3 | 2,186.9 | 2,329.6 | |||||||||||||||
| Infrastructure & Power | 474.7 | 229.4 | 860.5 | 573.4 | |||||||||||||||
| Government | 701.8 | 721.9 | 1,419.4 | 1,478.0 | |||||||||||||||
| Diversified Services | 382.9 | 514.9 | 840.1 | 1,003.3 | |||||||||||||||
| Other | 22.7 | 3.0 | 51.2 | 22.1 | |||||||||||||||
| Total revenue | 4,091.0 | $ | 4,146.4 | $ | 8,209.5 | $ | 8,280.0 | ||||||||||||
| Segment profit (loss) and margin % | |||||||||||||||||||
| Energy & Chemicals | 41.0 | 2.7 | % | $ | (222.0 | ) | (15.9 | )% | $ | 34.6 | 1.2 | % | $ | (209.8 | ) | (7.3 | )% | ||
| Mining & Industrial | 29.8 | 2.9 | % | 44.7 | 3.5 | % | 68.4 | 3.1 | % | 72.2 | 3.1 | % | |||||||
| Infrastructure & Power | 3.5 | 0.7 | % | (167.2 | ) | (72.9 | )% | 8.7 | 1.0 | % | (189.0 | ) | (33.0 | )% | |||||
| Government | 10.5 | 1.5 | % | 26.4 | 3.7 | % | 41.4 | 2.9 | % | 64.8 | 4.4 | % | |||||||
| Diversified Services | (4.8 | ) | (1.3 | )% | 3.0 | 0.6 | % | 0.3 | —% | 11.7 | 1.2 | % | |||||||
| Other | (19.3 | ) | (85.0 | )% | (77.4 | ) | NM | (40.8 | ) | (79.7 | )% | (103.5 | ) | NM | |||||
| Total segment profit (loss) and margin %(1) | 60.7 | 1.5 | % | $ | (392.5 | ) | (9.5 | )% | $ | 112.6 | 1.4 | % | $ | (353.6 | ) | (4.3 | )% | ||
| Corporate G&A | (39.7 | ) | (49.9 | ) | (25.7 | ) | (108.6 | ) | |||||||||||
| Impairment, restructuring and other exit costs | (5.1 | ) | (26.7 | ) | (302.6 | ) | (54.0 | ) | |||||||||||
| Interest expense, net | (11.7 | ) | (4.1 | ) | (18.0 | ) | (9.8 | ) | |||||||||||
| Earnings (loss) attributable to NCI from Cont Ops | 6.7 | (38.7 | ) | 16.2 | (14.8 | ) | |||||||||||||
| Earnings (loss) from Cont Ops before taxes | 10.9 | (511.9 | ) | (217.5 | ) | (540.8 | ) | ||||||||||||
| Income tax (expense) benefit | (31.1 | ) | 75.8 | 35.7 | 60.5 | ||||||||||||||
| Net earnings (loss) from Cont Ops | (20.2 | ) | $ | (436.1 | ) | $ | (181.8 | ) | $ | (480.3 | ) | ||||||||
| New awards | |||||||||||||||||||
| Energy & Chemicals | 197.3 | $ | 731.7 | 1,739.6 | 1,734.4 | ||||||||||||||
| Mining & Industrial | 729.2 | 493.5 | 2,329.7 | 1,216.7 | |||||||||||||||
| Infrastructure & Power | 61.3 | 16.4 | 68.6 | 549.5 | |||||||||||||||
| Government | 941.3 | 543.1 | 1,625.3 | 723.4 | |||||||||||||||
| Diversified Services | 262.0 | 573.8 | 619.0 | 1,383.6 | |||||||||||||||
| Other | — | 0.5 | — | 151.6 | |||||||||||||||
| Total new awards | 2,191.1 | $ | 2,359.0 | $ | 6,382.2 | $ | 5,759.2 | ||||||||||||
| New awards related to projects located outside of the U.S. | 56 | % | 56 | % |
All values are in US Dollars.
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| Backlog | June 30,<br> 2020 | December 31,<br> 2019 | ||||
|---|---|---|---|---|---|---|
| Energy & Chemicals | $ | 12,358.5 | $ | 14,128.9 | ||
| Mining & Industrial | 5,235.6 | 5,383.9 | ||||
| Infrastructure & Power | 5,212.5 | 6,079.4 | ||||
| Government | 3,817.6 | 3,556.1 | ||||
| Diversified Services | 2,230.4 | 2,541.6 | ||||
| Other | 178.5 | 244.0 | ||||
| Total backlog | $ | 29,033.1 | $ | 31,933.9 | ||
| Backlog related to projects located outside of the U.S. | 63 | % | 67 | % | ||
| (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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