3Q 2018 Earnings Conference Call

Transcription

1 Fluor Corporation 3Q 2018 Earnings Conference Call THIRD QUARTER 2018

2 Safe Harbor Statement This presentation contains forward-looking statements concerning the expected financial performance of Fluor Corporation and its subsidiaries ( we, our or the Company ) and the Company s strategic and operation plans, including statements about our projected earnings level, expenses, market outlook, new awards, backlog levels, and client capital investments. Words such as believes, expects, anticipates, assumes, may, positions, looking ahead, views, think, target, trend, can, appears, estimates, should, prospects, outlook, guidance or other similar expressions often identify forward-looking statements. Such statements are based on current management expectations as to what may occur in the future. Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Investors are cautioned not to place undue reliance on the forward-looking statements included in this presentation, which speak only as of the date hereof. The company disclaims any intent or obligation, other than as required by law, to update this information in light of new information or future events. Additional information about potential risk factors that could affect the Company s business and financial results is included in our Form 10-K filed on February 20, During this presentation, we may discuss certain non-gaap financial measures. Reconciliations of these amounts, to the comparable GAAP measures, are reflected in our earnings release and are posted in the investor relations section of our website at investor.fluor.com. Reconciliations of forward-looking non-gaap financial measures are not available due to the inability to reliably estimate the amounts of items excluded from such measures. THIRD QUARTER 2018

3 Energy & Chemicals Third Quarter Highlights Segment profit of $50 million, compared to $100 million last year New awards of $644 million, compared to $1.5 billion last year Backlog of $11.4 billion, compared to $16.5 billion last year Reached FID on LNG Canada in October and will book $8.4 billion in Q4 COOEC-Fluor fabrication yard Zhuhai, China Q 17 3Q Backlog ($B) New Awards ($B) 3

4 Mining, Industrial, Infrastructure, & Power Third Quarter Highlights Segment profit of $101 million, compared to $37 million last year New awards of $5.4 billion, up from $1.7 billion last year Quellaveco copper mine in Peru Gordie Howe International Bridge in Detroit Segment backlog of $16.5 billion, vs. $10.1 billion last year $8.1 billion from mining Gov. Mario M. Cuomo bridge Tarrytown, New York Q 17 3Q 18 NuScale R&D expense for the quarter of $18 million Backlog ($B) New Awards ($B) 4

5 Government Third Quarter Highlights Segment profit of $32 million, up from $30 million last year New awards of $3.3 billion, compared to $234 million last year DOE extension of Savannah River, Portsmouth and Idaho Cleanup Project Idaho Falls, Idaho Strategic Petroleum Reserve Backlog of $5.1 billion, compared to $3.6 billion a year ago Q 17 3Q Backlog ($B) New Awards ($B) 5

6 Diversified Services Third Quarter Highlights Segment profit of $24 million, compared to $35 million a year ago New awards of $336 million, compared to $338 million a year ago Includes Stork award for offshore production platform asset integrity services in the North Sea Backlog of $2.0 billion, compared to $2.7 billion a year ago Stork maintenance operations Q 17 3Q Backlog ($B) New Awards ($B) 6

7 New Awards & Backlog NEW AWARDS ($B) BACKLOG ($B) $9.6 $32.9 $34.9 $30.9 $2.0 $0.3 $2.7 $29.1 $29.3 $2.5 $5.1 $3.6 $2.3 $2.2 $3.3 $3.8 $2.4 $2.3 DS $10.1 $5.4 Govt $9.6 $10.3 $12.4 $16.5 $0.5 $3.8 $0.7 MIIP $0.3 $3.2 $0.2 $5.4 $0.6 $2.5 E&C $1.7 $1.1 $0.4 $0.1 $3.6 $16.5 $15.1 $14.1 $12.4 $0.6 $1.3 $11.4 $1.5 $1.0 $0.7 $0.5 $0.6 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 Book-to-Bill: 0.77x 0.64x 0.53x 1.10x 2.07x 3Q new awards of $9.6B improved book-to-bill to 2.07x this quarter, up from 0.77x a year ago 7

8 3Q Backlog: $34.9 Billion Geography Contract Type Asia Pacific 9% United States 37% Fixed Price 32% EAME 30% The Americas (excl. U.S.) 24% Reimbursable 68% 8

9 Third Quarter 2018 Overview Revenue for 3Q was $4.7 billion, compared to $4.9 billion a year ago New awards of $9.6 billion compared to $5.4 billion last quarter Book-to-bill of 2.0 Highest book-to-bill ratio in over 10 years Corporate G&A expense for 3Q was $65 million, compared to $46 million a year ago Expenses for the quarter include $21 million mostly related to UK pension closeout expenses and foreign exchange fluctuations Connect 202 Project Phoenix, Arizona 9

10 Third Quarter 2018 Overview Net income attributable to Fluor for the third quarter was $77 million, or $0.55 per diluted share Results include: A tax rate of 34% compared to 29% last quarter Higher than anticipated tax rate is due to the company being impacted by certain foreign charges that could not be tax benefitted $81 million in pre-tax charges on two projects $125 million pre-tax gain on sale of Seagreen Wind Energy investment 10

11 Corporate Items 3Q Cash plus current marketable securities was $1.9 billion Quarter end available domestic cash balance was approximately 21% of total cash and marketable securities balance Quarterly dividend payment of $30 million Stork Fabrication & Welding Workshop Activities $19 million for pension closeout related expenses in the UK 11

12 Corporate Outlook EPS $ $ Guidance Commentary Quarterly G&A Expense ~$50 million/ quarter Excludes any impact of foreign exchange fluctuations or pension expenses Tax Rate 25% - 30% NuScale $75 million Expect to invest at a lower rate in

13 Segment Outlook Energy & Chemicals 4Q 2018 Margin Guidance Commentary 5.0% - 6.0% Opportunities include LNG and methanol projects Mining, Infrastructure, Industrial, & Power ~2.5% *excluding NuScale Mining opportunities in copper, iron ore, gold, and aluminum Government ~3.0% Future prospects include LOGCAP V and liquid waste contracts at Savannah River Diversified Services 4.0% - 5.0% Continued expansion opportunities in the Americas 13