Fluor Reports Fourth Quarter and Full Year 2023 Results
-
Full year new awards of
$19.5 billion ; 87% reimbursable -
Increased backlog by over 10% each of the past two years to
$29.4 billion ; 76% reimbursable - Prospect pipeline 15x ending backlog with opportunities across all three segments
- Revamped capital structure lowers interest expense while supporting future growth
- Anticipate improved cash flow conversion in 2024
“In 2023, we not only reached but surpassed a critical inflection point on our journey to solidifying our position as a technical solutions leader in the global engineering and construction industry,” said
Full year new awards were
[1] Non-GAAP Financial Measure. See “Non-GAAP Financial Measures” for additional information.
Fourth Quarter Results
Fourth quarter 2023 results include a net loss attributable to Fluor of
Revenue for the quarter was
Including the adjustments outlined in the reconciliation table at the end of this release, the company recognized adjusted EBITDA of
Outlook
We are not providing forward-looking guidance for
The company continues to be well served by the strategic priorities set in 2021. Based on the volume of new awards received over the past two years, early achievement of our 75% reimbursable backlog target, and our robust and diverse prospect pipeline, the company is establishing an adjusted EBITDA guidance for 2024 of
The company is also reaffirming its 2026 adjusted EBITDA guidance of
Adjusted EPS and adjusted EBITDA guidance include items similar to those outlined in the reconciliation table at the end of this release.
Business Segments
Energy Solutions reported a profit of
Urban Solutions reported a profit of
Mission Solutions reported a profit of
The Other segment, which includes NuScale, Stork and the now divested AMECO business, reported a full year loss of
Conference Call
Fluor will host a conference call at
A replay of the webcast will be available for 30 days. A replay of the call will be available by telephone for one week.
Non-GAAP Financial Measures
This news release contains discussions of consolidated segment profit (loss), adjusted net earnings, adjusted EPS and adjusted EBITDA that are non-GAAP financial measures under
About
Forward-Looking Statements: This release may contain forward-looking statements (including without limitation statements to the effect that the Company or its management "will," "believes," "expects," “anticipates,” "plans" or other similar expressions). These forward-looking statements, including statements relating to strategic and operation plans, future growth, new awards, backlog, earnings and the outlook for the company’s business.
Actual results may differ materially as a result of a number of factors, including, among other things, the cyclical nature of many of the markets the Company serves; 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; intense competition in the industries in which we operate; the inability to hire and retain qualified personnel; failure of our joint venture or other partners to perform their obligations; the failure of our suppliers, subcontractors and other third parties to adequately perform services under our contracts; cyber-security breaches; possible information technology interruptions; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; failure to maintain safe worksites and international security risks; risks or uncertainties associated with events outside of our control, including weather conditions, pandemics, public health crises, political crises or other catastrophic events; the use of estimates in preparing our financial statements; client delays or defaults in making payments; uncertainties, restrictions and regulations impacting our government contracts; the potential impact of certain tax matters; the Company's ability to secure appropriate insurance; liabilities associated with the performance of nuclear services; foreign currency risks; the loss of one or a few clients that account for a significant portion of the Company's revenues; failure to adequately protect intellectual property rights; climate change, natural disasters and related environmental issues; increasing scrutiny with respect to sustainability practices; risks related to our indebtedness; the availability of credit and restrictions imposed by credit facilities, both for the Company and our clients, suppliers, subcontractors or other partners; possible limitations on bonding or letter of credit capacity; failure to obtain favorable results in existing or future litigation and regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure by us or our employees, agents or partners to comply with laws; new or changing legal requirements, including those relating to environmental, health and safety matters; and restrictions on possible transactions imposed by our charter documents and
Additional information concerning these and other factors can be found in the Company's public periodic filings with the
SUMMARY OF FINANCIALS AND
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||
|
|
||||||||||||||||||||
(in millions) |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||||||||||||
Revenue |
|
|
|
|
|
|
|
|
|
||||||||||||
Energy Solutions |
$ |
1,422 |
|
|
$ |
1,775 |
|
|
|
$ |
6,307 |
|
|
$ |
5,872 |
|
|
||||
Urban Solutions |
|
1,420 |
|
|
|
1,093 |
|
|
|
|
5,262 |
|
|
|
4,373 |
|
|
||||
Mission Solutions |
|
646 |
|
|
|
509 |
|
|
|
|
2,655 |
|
|
|
2,289 |
|
|
||||
Other |
|
332 |
|
|
|
332 |
|
|
|
|
1,250 |
|
|
|
1,210 |
|
|
||||
Total revenue |
$ |
3,820 |
|
|
$ |
3,709 |
|
|
|
$ |
15,474 |
|
|
$ |
13,744 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment profit (loss) $ and margin % |
|
|
|
|
|
|
|
|
|||||||||||||
Energy Solutions |
|
26 |
|
1.8 |
% |
|
124 |
|
7.0 |
% |
|
|
381 |
|
6.0 |
% |
|
301 |
|
5.1 |
% |
Urban Solutions |
|
147 |
|
10.4 |
% |
|
38 |
|
3.5 |
% |
|
|
268 |
|
5.1 |
% |
|
17 |
|
0.4 |
% |
Mission Solutions |
|
31 |
|
4.8 |
% |
|
20 |
|
3.9 |
% |
|
|
116 |
|
4.4 |
% |
|
136 |
|
5.9 |
% |
Other |
|
(119 |
) |
NM |
|
|
(8 |
) |
NM |
|
|
|
(228 |
) |
NM |
|
|
(27 |
) |
NM |
|
Total segment profit $ and margin % |
$ |
85 |
|
2.2 |
% |
$ |
174 |
|
4.7 |
% |
|
$ |
537 |
|
3.50 |
% |
$ |
427 |
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
G&A |
|
(55 |
) |
|
|
(89 |
) |
|
|
|
(232 |
) |
|
|
(237 |
) |
|
||||
Impairment |
|
— |
|
|
|
(40 |
) |
|
|
|
— |
|
|
|
24 |
|
|
||||
Gain (loss) on pension settlement |
|
— |
|
|
|
42 |
|
|
|
|
— |
|
|
|
42 |
|
|
||||
Foreign currency gain (loss) |
|
(36 |
) |
|
|
(27 |
) |
|
|
|
(98 |
) |
|
|
25 |
||||||
Interest income (expense), net |
|
49 |
|
|
|
31 |
|
|
|
|
168 |
|
|
|
35 |
|
|
||||
Earnings (loss) attributable to NCI |
|
(19 |
) |
|
(41 |
) |
|
|
|
(60 |
) |
|
|
(72 |
) |
|
|||||
Earnings before taxes |
|
24 |
|
|
|
50 |
|
|
|
|
315 |
|
|
|
244 |
|
|
||||
Income tax expense |
|
(64 |
) |
|
|
(82 |
) |
|
|
|
(236 |
) |
|
|
(171 |
) |
|
||||
Net earnings (loss) |
$ |
(40 |
) |
|
$ |
(32 |
) |
|
|
$ |
79 |
|
|
$ |
73 |
|
|
||||
Less: Net earnings (loss) attributable to NCI |
|
(19 |
) |
|
|
(41 |
) |
|
|
|
(60 |
) |
|
|
(72 |
) |
|
||||
Net earnings attributable to Fluor |
$ |
(21 |
) |
|
$ |
9 |
|
|
|
$ |
139 |
|
|
$ |
145 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
New awards |
|
|
|
|
|
|
|
|
|
||||||||||||
Energy Solutions |
$ |
2,153 |
|
|
$ |
916 |
|
|
|
$ |
6,871 |
|
|
$ |
6,512 |
|
|
||||
Urban Solutions |
|
5,052 |
|
|
|
3,351 |
|
|
|
|
10,141 |
|
|
|
6,900 |
|
|
||||
Mission Solutions |
|
40 |
|
|
|
36 |
|
|
|
|
1,055 |
|
|
|
5,347 |
|
|
||||
Other |
|
363 |
|
|
|
294 |
|
|
|
|
1,461 |
|
|
|
1,056 |
|
|
||||
Total new awards |
$ |
7,608 |
|
|
$ |
4,597 |
|
|
|
$ |
19,528 |
|
|
$ |
19,815 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
New awards related to projects located outside of the |
|
76% |
46% |
Backlog (in millions) |
|
|
|
|
||||
Energy Solutions |
|
$ |
9,722 |
|
|
$ |
9,134 |
|
Urban Solutions |
|
|
14,848 |
|
|
|
10,270 |
|
Mission Solutions |
|
|
3,945 |
|
|
|
5,666 |
|
Other |
|
|
926 |
|
|
|
979 |
|
Total backlog |
|
$ |
29,441 |
|
|
$ |
26,049 |
|
|
|
|
|
|
||||
Backlog related to projects located outside of the |
|
|
62% |
|
|
49% |
||
Backlog related to reimbursable projects |
|
|
76% |
|
|
63% |
(1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. |
(2) Please see page 1 of the 2023 10-K for the definitions and abbreviations set forth below apply to the indicated terms used throughout this filing. |
SUMMARY OF CASH FLOW INFORMATION
|
Year Ended |
||||||
(in millions) |
2023 |
|
2022 |
||||
OPERATING CASH FLOW |
$ |
212 |
|
|
$ |
31 |
|
|
|
|
|
||||
INVESTING CASH FLOW |
|
|
|
||||
Proceeds from sales and maturities (purchases) of marketable securities |
|
(141 |
) |
|
|
(64 |
) |
Capital expenditures |
|
(106 |
) |
|
|
(75 |
) |
Proceeds from sales of assets (net of cash divested) |
|
(5 |
) |
|
|
95 |
|
Investments in partnerships and joint ventures |
|
(33 |
) |
|
|
(53 |
) |
Other |
|
8 |
|
|
|
19 |
|
Investing cash flow |
|
(277 |
) |
|
|
(78 |
) |
|
|
|
|
||||
FINANCING CASH FLOW |
|
|
|
||||
Proceeds from issuance of 2029 Notes, net of issuance costs |
|
560 |
|
|
|
— |
|
Capped call transactions related to 2029 Notes |
|
(73 |
) |
|
|
— |
|
Purchases and retirement of debt |
|
(249 |
) |
|
|
(41 |
) |
Proceeds from NuScale de- |
|
— |
|
|
|
341 |
|
Proceeds from sale of NuScale interest |
|
— |
|
|
|
107 |
|
Dividends paid on CPS |
|
(29 |
) |
|
|
(39 |
) |
Make-whole payment on conversion of CPS |
|
(27 |
) |
|
|
— |
|
Distributions paid to NCI |
|
(53 |
) |
|
|
(60 |
) |
Capital contributions by NCI |
|
10 |
|
|
|
21 |
|
Other |
|
(12 |
) |
|
|
(14 |
) |
Financing cash flow |
|
127 |
|
|
|
315 |
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
18 |
|
|
|
(38 |
) |
Increase in cash and cash equivalents |
|
80 |
|
|
|
230 |
|
Cash and cash equivalents at beginning of year |
|
2,439 |
|
|
|
2,209 |
|
Cash and cash equivalents at end of year |
$ |
2,519 |
|
|
$ |
2,439 |
|
|
|
|
|
||||
Cash paid during the year for: |
|
|
|
||||
Interest |
$ |
53 |
|
|
$ |
54 |
|
Income taxes (net of refunds) |
|
169 |
|
|
|
99 |
|
Noncash investing and financing activities: |
|
|
|
||||
Marketable securities transferred to trustee to discharge the 2024 Notes |
$ |
262 |
|
|
$ |
— |
|
Debt assumed by buyer of Stork Latin America |
|
19 |
|
|
|
— |
|
|
|
|
|
RECONCILIATION OF |
|||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
(In millions, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net earnings (loss) attributable to Fluor |
$ |
(21 |
) |
|
$ |
9 |
|
|
$ |
139 |
|
|
$ |
145 |
|
Less: Dividends on CPS |
|
— |
|
|
|
10 |
|
|
|
29 |
|
|
|
39 |
|
Less: Make-whole payment on conversion of CPS |
|
— |
|
|
|
— |
|
|
|
27 |
|
|
|
— |
|
Net earnings (loss) available to Fluor common stockholders |
|
(21 |
) |
|
|
(1 |
) |
|
|
83 |
|
|
|
106 |
|
Exclude: Stork and AMECO businesses marketed for sale |
|
88 |
|
|
|
(18 |
) |
|
|
133 |
|
|
|
(39 |
) |
Exclude: Tax expense on Stork and AMECO |
|
5 |
|
|
|
3 |
|
|
|
8 |
|
|
|
1 |
|
Net earnings (loss) from core operations* |
$ |
72 |
|
|
$ |
(16 |
) |
|
$ |
224 |
|
|
$ |
68 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Dividends on CPS |
$ |
— |
|
|
$ |
10 |
|
|
$ |
29 |
|
|
$ |
39 |
|
Make-whole payment on conversion of CPS |
|
— |
|
|
|
— |
|
|
|
27 |
|
|
|
— |
|
NuScale loss |
|
32 |
|
|
|
28 |
|
|
|
94 |
|
|
|
72 |
|
(Gain) loss on embedded derivatives |
|
(6 |
) |
|
|
3 |
|
|
|
17 |
|
|
|
3 |
|
Tax expense (benefit) on embedded derivatives |
|
2 |
|
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(1 |
) |
Reserve for legacy legal claims |
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
6 |
|
Foreign currency (gain) loss |
|
36 |
|
|
|
27 |
|
|
|
98 |
|
|
|
(25 |
) |
Tax expense (benefit) on foreign currency gain/loss |
|
(7 |
) |
|
|
(3 |
) |
|
|
(20 |
) |
|
|
1 |
|
|
|
(12 |
) |
|
|
25 |
|
|
|
— |
|
|
|
38 |
|
NuScale marketing costs borne by Fluor |
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Impairment |
|
— |
|
|
|
43 |
|
|
|
— |
|
|
|
(17 |
) |
(Gain) loss on pension settlement |
|
— |
|
|
|
(42 |
) |
|
|
— |
|
|
|
(42 |
) |
Adjusted net earnings |
$ |
117 |
|
|
$ |
74 |
|
|
$ |
472 |
|
|
$ |
141 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS available to Fluor common stockholders |
$ |
(0.12 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.54 |
|
|
$ |
0.73 |
|
Adjusted EPS |
$ |
0.68 |
|
|
$ |
0.43 |
|
|
$ |
2.73 |
|
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
170 |
|
|
|
142 |
|
|
|
150 |
|
|
|
142 |
|
CPS |
|
— |
|
|
|
27 |
|
|
|
20 |
|
|
|
27 |
|
Assumed issuance of shares under equity awards |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Adjusted weighted average diluted shares outstanding |
|
173 |
|
|
|
172 |
|
|
|
173 |
|
|
|
172 |
|
|
|
|
|
|
|
|
|
||||||||
*Core operations excludes the results of our Stork business and remaining AMECO equipment business that no longer meet all of the requirements to be classified as discontinued operations but that continue to be marketed for sale or that have been sold. |
|||||||||||||||
(1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. |
RECONCILIATION OF |
|
|
||||||||||
|
Three Months Ended |
Year Ended |
||||||||||
|
|
|
||||||||||
|
|
|
|
|
||||||||
Net earnings (loss) attributable to Fluor |
$ |
(21 |
) |
$ |
9 |
|
$ |
139 |
|
$ |
145 |
|
Interest (income) expense, net |
|
(49 |
) |
|
(31 |
) |
|
(168 |
) |
|
(35 |
) |
Income tax expense |
|
64 |
|
|
82 |
|
|
236 |
|
|
171 |
|
Depreciation & amortization |
|
18 |
|
|
18 |
|
|
74 |
|
|
73 |
|
EBITDA |
$ |
12 |
|
$ |
78 |
|
$ |
281 |
|
$ |
354 |
|
|
|
|
|
|
||||||||
Adjustments: |
|
|
|
|
||||||||
Other: NuScale, Stork and AMECO (earnings) loss |
$ |
115 |
|
$ |
2 |
|
$ |
209 |
|
$ |
10 |
|
Energy Solutions: (Gain) loss on embedded derivatives |
|
(6 |
) |
|
3 |
|
|
17 |
|
|
3 |
|
G&A: NuScale marketing costs borne by Fluor |
|
— |
|
|
— |
|
|
5 |
|
|
— |
|
G&A: Reserve for legacy legal claims |
|
— |
|
|
— |
|
|
3 |
|
|
6 |
|
G&A: Foreign currency (gain)/loss |
|
36 |
|
|
27 |
|
|
98 |
|
|
(25 |
) |
G&A: |
|
(12 |
) |
|
25 |
|
|
— |
|
|
38 |
|
Impairment |
|
— |
|
|
43 |
|
|
— |
|
|
(17 |
) |
Loss on pension settlement |
|
— |
|
|
(42 |
) |
|
— |
|
|
(42 |
) |
Adjusted EBITDA |
$ |
145 |
|
$ |
136 |
|
$ |
613 |
|
$ |
327 |
|
(1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. |
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