Fluor announced that the company received an adverse decision from an arbitration panel regarding its claims for additional compensation related to the Greater Gabbard Offshore Wind Farm Project.
Through its claims, the company sought to recover compensation for schedule and cost impacts arising from delays, disruption and productivity issues which the company believes were attributable to the client and other third parties.
As a result of the decision, Fluor expects to record a pre-tax charge of approximately $400 million in the fourth quarter, which was not considered in its most recent earnings guidance for 2012. With the project substantially complete, the decision is not expected to have a material adverse impact on cash flow.
“Fluor delivered a quality project, and we are extremely disappointed with this unexpected decision, especially considering recent statements that acknowledge that all 140 turbines are commissioned and exporting electricity, and the overall performance is more than 10 percent ahead of the client’s expectations,” said Chairman and Chief Executive Officer David Seaton.
[mappress]
Press release, November 19, 2012; Image: rwe