USA: Flour Net Earnings Up

Fluor Corporation today announced financial results for its fiscal year ended December 31, 2011. Net earnings attributable to Fluor for 2011 were $594 million, or $3.40 per diluted share, compared with $357 million, or $1.98 per diluted share in 2010.

Consolidated segment profit for the year was $1.0 billion, compared with $621 million in 2010 which was impacted by significant pre-tax charges on two infrastructure projects. Results in 2011 reflect a substantial increase in the profit contribution from the Industrial & Infrastructure (I&I) segment. Consolidated revenue for the year totaled a record $23.4 billion, which was up 12 percent from $20.8 billion a year ago, mainly due to strong growth in the mining and metals business line within the I&I segment.

Full year new awards were strong at $26.9 billion, which compares with record bookings of $27.4 billion a year ago, reflecting substantial mining & metals orders in the I&I segment and sizable orders in Oil & Gas. Consolidated backlog rose to a new year-end high of $39.5 billion, up 13 percent from a year ago.

 “I am pleased that Fluor has delivered another year of strong new awards, resulting in double-digit backlog growth and earnings per share at the top end of our expectations for 2011,” said Chairman and Chief Executive Officer David Seaton. “We continue to have a strong prospect list which supports our growth projection for 2012.”

Corporate G&A expense for the year rose to $163 million, up from $156 million a year ago, mainly due to higher management incentive compensation which was partially offset by overhead cost reductions. Fluor’s financial condition remains very strong, with cash plus current and noncurrent marketable securities totaling $2.8 billion, which is up from $2.6 billion a year ago. During 2011, the Company generated $890 million in cash flow from operating activities, repurchased $640 million worth of Fluor shares, and paid out $88 million in dividends. The Company also took advantage of attractive market rates and completed a $500 million offering of 10-year unsecured notes to enhance cash balances in the United States.

 Business Segments

Fluor’s Oil & Gas unit reported segment profit of $276 million in 2011, down from $344 million in 2010 which included higher margin contribution from projects that were completed or nearing completion. Revenue rose by 3 percent to $8.0 billion in 2011. Full year new awards in 2011 totaled $8.3 billion, which compares with $9.7 billion in 2010. In the fourth quarter, the segment booked a $1.5 billion award for the construction management of Syncrude Canada Ltd.’s Mildred Lake project in Alberta, Canada. Ending Oil & Gas backlog rose 6 percent from a year ago to end 2011 at $15.1 billion.

The Industrial & Infrastructure group reported segment profit of $389 million, reflecting strong profits from the mining & metals and infrastructure business lines. This compares with a segment loss of $170 million in 2010. The Greater Gabbard Offshore Wind Farm project, which is nearing completion, has experienced a number of issues which substantially increased the estimated cost to complete the project. On the Greater Gabbard project, results for 2011 included charges of $60 million, while 2010 was impacted by provisions totaling $343 million. Results for 2010 were also impacted by a $95 million charge related to a bankruptcy court ruling on a completed road project. Total revenue for the segment rose 41 percent to $9.7 billion in 2011, mainly due to increases in mining & metals project volume. New awards remained strong at $12.2 billion, which compares with $12.5 billion last year. Year-end backlog rose to a segment record $19.6 billion, representing a 16 percent increase over 2010.

 Fourth Quarter Results

Net earnings attributable to Fluor for the fourth quarter of 2011 were $153 million, or $0.90 per diluted share, compared with $117 million, or $0.65 per diluted share, in 2010. Fourth quarter segment profit totaled $279 million, compared with $77 million a year ago which included pre-tax charges of $180 million on the Greater Gabbard Offshore Wind Farm project and $28 million on a gas-fired power plant in Georgia. Fluor’s tax rate in the fourth quarter of 2011, at 26 percent, was lower than expected due to the favorable resolution of various tax issues and audits. Fluor’s consolidated tax expense in the fourth quarter of 2010 included a $152 million benefit from the tax restructuring of a foreign subsidiary, largely arising from the financial impact of the Greater Gabbard losses on the affected subsidiary. Corporate G&A expenses in the fourth quarter of 2011 were $61 million, which compares with $58 million reported a year ago. Revenue for the quarter of $6.3 billion was 19 percent higher than last year, mainly due to a significant increase in Industrial & Infrastructure. Fourth quarter new awards were $4.3 billion, including awards of $2.5 billion in Oil & Gas, $947 million in Power and $504 million in I&I.

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Offshore WIND staff, February 23, 2012