Fluor Corporation is a publicly owned engineering, procurement, construction, and maintenance services organization. Fluor is headquartered in the Las Colinas area of Irving, Texas. The company employs more than 41,000 international employees and maintains offices in over 25 countries. Fluor is a Fortune 500 and a S&P 500 company.
Fluor Corporation (Fluor), incorporated on September 11, 2000, is a holding company. The Company, acting through its subsidiaries, is a professional services firm, providing engineering, procurement, construction and maintenance, as well as project management services. Fluor serves a diverse set of industries, including oil and gas, chemicals and petrochemicals, transportation, mining and metals, power, life sciences, and manufacturing. Fluor is also a primary service provider to the United States federal Government. It operates in five segments: Oil & Gas, Industrial & Infrastructure, Government, Global Services and Power. Fluor Constructors International, Inc., which operates separately from the rest of its business, provides unionized management and construction services in the United States and Canada, both independently and as a subcontractor on projects in each of the segments.
The Company offers engineering, procurement, construction, maintenance and project management services, independently, as well as on a fully integrated basis. In the engineering area, Fluor’s expertise ranges from traditional engineering disciplines, such as piping, mechanical, electrical, control systems, civil, structural and architectural to advanced engineering specialties, including process engineering, chemical engineering, simulation, enterprise integration, integrated automation processes and interactive three dimensional (3-D) modeling. As part of these services, it provides conceptual design services. Also included within these services are such activities as feasibility studies, project development planning, technology evaluation, risk management assessment, global siting, constructability reviews, asset optimization and front-end engineering.
The Company’s procurement organization offers traditional procurement services, as well as supply chain solutions. Its clients benefit from its global sourcing and supply expertise, global purchasing power, technical knowledge, processes, systems and experienced global resources. Fluor’s traditional procurement activities include strategic sourcing, material management, contracts management, buying, expediting, supplier quality inspection, logistics and export control. In the construction area, the Company mobilizes, executes, commissions and demobilizes projects on a self-perform or subcontracted basis or through construction management as the owner's agent. Fluor is responsible for the completion of a project, often in difficult locations and under challenging circumstances. The Company is frequently designated as a program manager, where a client has facilities in multiple locations, complex phases in a single project location, or a large-scale investment in a facility. Depending upon the project, it often serves as the primary contractor or it may act as a subcontractor to another party.
Under Fluor’s operations and maintenance contracts, its clients ask the Company to operate and maintain large, complex facilities for them. The Company does so through the delivery of total maintenance services, facility management, plant readiness, commissioning, start-up and maintenance technology, small capital projects and turnaround and outage services. Among other things, it can provide key management, staffing and management skills to clients on-site at their facilities. Fluor’s operations and maintenance activities can also include routine and outage/turnaround maintenance services, general maintenance and asset management, and restorative, repair, predictive and prevention services. The Company is often hired as the overall program manager on large complex projects where various contractors and subcontractors are involved and multiple activities need to be integrated. Its project management services include logistics, development of project execution plans, detailed schedules, cost forecasts, progress tracking and reporting, and the integration of the engineering, procurement and construction efforts.
Oil & Gas
Fluor serves the oil and gas production and processing, and the chemical and petro-chemical industries, as an integrated service provider offering a range of design, engineering, procurement, construction and project management services to a spectrum of energy related industries. It serves a number of specific industries, including upstream oil and gas production, downstream refining, chemicals and petrochemicals. The Company has the capacity to design and construct new facilities, upgrade and revamp existing facilities, rebuild facilities following fires and explosions, and expand refineries, processing plants, petro-chemical facilities and pipeline and offshore facility installations. It also provides consulting services ranging from feasibility studies to process assessment to project finance structuring and studies. The Company’s projects in the upstream sector revolve around the production, processing and transporting of oil and gas resources, including the development of major new fields, as well as liquefied natural gas (LNG) projects. It is also involved in offshore production facilities. With the Company’s partner Grupo ICA, it maintains a joint venture known as ICA Fluor, through which it participates in the Mexican and Central American oil, gas, power, chemical and other markets.
Industrial & Infrastructure
Flour’s Industrial & Infrastructure segment provides design, engineering, procurement and construction services to the transportation, wind power, mining and metals, life sciences, telecommunications, manufacturing, commercial and institutional development, microelectronics and healthcare sectors. Fluor focuses on providing its clients with solutions. In transportation, Fluor provides a range of services, including consulting, design, planning, financial structuring, engineering and construction management, domestically and internationally. Its service offerings include transportation infrastructure, such as roads, highways, bridges and rail.
The Company’s mining and metals provides a range of services to the iron ore, copper, diamond, gold, nickel and aluminum industries, which include feasibility studies through engineering, design, procurement, construction, and commissioning and start-up support. In life sciences, it provides design, engineering, procurement, construction and construction management services to the pharmaceutical and biotechnology industries. The Company also specializes in providing validation and commissioning services where it not only brings new facilities into production but it also keep existing facilities operating. In manufacturing, it provides design, engineering, procurement, consulting, construction and construction management services to a variety of industries.
Government
Fluor's Government segment is a provider of engineering, construction, logistics support, contingency response and management and operations services to the United States Government. It is primarily focused on the Department of Energy, the Department of Homeland Security and the Department of Defense. For the Department of Energy, Fluor provides site management, environmental remediation, decommissioning, engineering and construction services and has addressed the environmental and regulatory challenges associated with these sites. It provides engineering and construction services, as well as logistics and contingency operations support, to the Department of Defense. Fluor supports military logistical and infrastructure needs. In combination with its subsidiary, Del-Jen, Inc., it is a provider of outsourced services to the federal Government. Fluor provides operations and maintenance services at military bases and education and training services to the Department of Labor, particularly through Job Corps programs. The company is also providing support to the Department of Homeland Security.
Global Services
The Company’s Global Services segment integrates a variety of customized service capabilities that assist industrial clients in improving the performance of their plants and facilities. Capabilities within Global Services include operations and maintenance activities, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services and temporary staffing. Global Services' activities in the operations and maintenance markets include providing facility start-up and management, plant and facility maintenance, operations support and asset management services to the oil and gas, chemicals, life sciences, mining and metals, and manufacturing industries.
Global Services includes Plant Performance Services LLC (P2S), which is a service provider in the United States, performing small capital engineering and construction, specialty welding, electrical and instrumentation, fabrication, mechanical, turnaround and demolition services. It also provides Site Services and Fleet Outsourcing through American Equipment Company, Inc. (AMECO). AMECO provides integrated construction equipment, tool, and fleet service solutions on a global basis for construction projects and plant sites of both third-party clients and clients of the Company. AMECO supports large construction projects and plants at locations throughout North and South America, South Africa and the Middle East. Global Services serves the temporary staffing market through TRS Staffing Solutions, Inc. (TRS). TRS is a global enterprise of staffing specialists that provides the Company and third-party clients with recruiting and permanent placement services and the placement of contract technical professionals.
Power
In the Power segment, the Company provides a range of services to the gas fueled, solid fuels, plant betterment, renewables, nuclear and power services markets. Its services include engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance. Through the gas fueled market, Fluor offer a range of services for simple and combined cycle reference designs, as well as Integrated Gasification Combined Cycle (IGCC) projects. Through the solid fueled and plant betterment markets, it offers a range of services for subcritical, supercritical, ultra-supercritical and circulating fluidized bed (CFB) technologies, as well as emissions reduction solutions, including selective catalytic reduction (SCR), flue gas desulphurization (FGD), and particulate and mercury controls designs.
The Company offers experience in designing and constructing coal-fired power generation facilities while delivering technology for base load capacity. Flour also offers solutions for post-combustion carbon capture and sequestration for solid fueled and gas fueled facilities, offering its Econamine FG Plus CO2 capture technology. In the renewables market, it offers a range of technology choices for solar, wind, biomass and geothermal solutions. For solar, the Company is focused on thermal technologies, such as Concentrating Solar Power (CSP), as well as Photovoltaic (PV) solar applications. In nuclear market, it is positioned to offer Fluor's nuclear experience for new build plants, capital modifications, extended power uprate (EPU) projects and operations and maintenance services. Through its power services business line, Flour offers a variety of services to owners, including plant maintenance, facility management, operations support, asset performance improvement, capital modifications and improvements, operations readiness and start-up commissioning.
The Company competes with Bechtel Group, Inc., CH2M Hill Companies Limited, Jacobs Engineering Group, Inc., KBR Inc., the Shaw Group, URS Corporation, AMEC plc, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, Foster Wheeler AG, Hyundai Engineering & Construction Company, JGC Corporation, McDermott International, Inc., Technip and WorleyParsons Limited.
This diverse customer base served Fluor well in the early 1990s when a recession crippled many construction companies. The company increased its operating profit throughout the downturn, benefiting from a $5 billion contract to manage and construct the production facilities of Saudi Aramco and other work in the Middle East resulting from the destruction of petroleum facilities during the war in the Persian Gulf.
In 1992, under the stewardship of Leslie G. McCraw, a former vice-president of Fluor who replaced Tappan a year earlier, Fluor continued to increase its profits in the engineering and construction business and augment its investment in the coal industry. For the fifth consecutive year Fluor Daniel recorded an operating profit, increasing 15 percent from 1991 to $191 million. Revenues for the year were buoyed by a $4 billion U.S. Department of Energy contract to manage the cleanup and dismantling of a plutonium plant in Fernald, Ohio. The company's coal mining concern, A.T. Massey Coal Company, increased its reserves of high-quality, low-sulfur coal to nearly one billion tons, ranking it among the five largest U.S. coal companies. While Fluor's coal business thrived, generating an operating profit of $80 million, the company's lead concern, the Doe Run Company, suffered from a considerable drop in the price of lead. By the end of the year, McCraw decided to end Fluor's presence in the lead industry, designating the Doe Run operation as a discontinued operation. He was finally able to sell the unit in April 1994.
McCraw also oversaw a speeding up of the diversification program started by his predecessor, with 1994 standing out as a key turning point. That year Fluor Daniel aggressively expanded into new industry markets and geographic regions; by early 1995 the unit had operations in more than 80 countries and in 25 industry areas. The corporation also created a new unit, the Diversified Services Group, which began providing a variety of engineering- and construction-related services, including procurement, temporary staffing, and equipment rental and sales. Revenues subsequently soared, from $7.85 billion in 1993 to $11.02 billion in 1996 (an increase of more than 40 percent), while net income climbed from $166.8 million to $268.1 million over the same period (more than 60 percent). Among the major projects that Fluor Daniel was contracted to build during this period--either alone or through a consortium--were a $1 billion petrochemical complex in Kuwait; a $5 billion cleanup effort at a former U.S. Department of Energy plutonium production facility in Hanford, Washington; the $1.6 million Batu Hijau copper and gold mining project in Indonesia; and a $4.8 billion high-speed rail system in Florida.
The big expansion push engineered by McCraw hit a snag in early 1997 when Fluor's profits began suffering from a spate of low-margin contracts and increased competition stemming from industry overcapacity. In February 1997 the company announced that it would take a $140 million pretax charge to cover cost overruns on two major contracts and would launch a restructuring aimed at cutting $100 million out of its bloated overhead, which had reached nearly $700 million because of McCraw's worldwide expansion. A number of new overseas offices that had been opened were shuttered and more than 100 executives left the company. As 1997 continued, however, Fluor's situation worsened thanks to the Asian economic crisis that erupted that summer. In late 1997 the company announced another restructuring. Continuing to pull back from the diversification program, Fluor Daniel was reorganized into four market-focused segments: energy and chemicals; government, environment, and telecommunications; industrial; and mining and minerals. It also began to be more selective about the projects it took on. In early 1998 McCraw took early retirement for health reasons.
After several months of management by an executive committee, Fluor installed a new chairman and CEO in July 1998, Philip J. Carroll, who became the first outsider named chairman in company history. Carroll took the position after a company policy requiring top executives to retire at age 60 forced him to leave his job as president and CEO of Shell Oil Company, the U.S. unit of Anglo-Dutch petroleum giant Royal Dutch/Shell Group. The appointment of an outsider surprised many observers, but Carroll's experience turning Shell around appeared key. In October 1998, soon after Carroll came on board, Fluor abandoned its attempt to sell American Equipment Company, its equipment rental and sales unit, having announced its intention to divest the unit only the previous March. The decision followed the collapse of negotiations with the leading bidder.
Carroll then initiated a much more significant restructuring, which was announced in March 1999. Fluor was reorganized into five semiautonomous business units, the three most important of which were: Fluor Daniel, A.T. Massey Coal, and Fluor Global Services. The last of these was a successor to the Diversified Services Group, and included American Equipment, staffing services, operations and maintenance services, consulting services, and services for the governmental and telecommunications sectors. The restructuring also involved a large-scale overhaul of the Fluor Daniel unit. In order to slash an additional $160 million from Fluor's still bloated overhead, 15 of Fluor Daniel's 75 domestic and overseas offices were closed and about 5,000 jobs were eliminated from the workforce. While not abandoning any existing contracts, Fluor Daniel planned to concentrate on five core areas in the future: chemicals and process (including pharmaceuticals and biotechnology); oil, gas, and power; infrastructure (transportation); mining; and manufacturing (particularly consumer products, food and beverage, microelectronics, and light metals). Fluor Daniel aimed to focus on its 200 largest customers and those industries in which its projects achieved the largest profit margins. For the fiscal year ending in October 1999, a $130 million charge contributed to a 56 percent drop in profits, to $104.2 million. Revenues fell for the second straight year, reflecting the narrowing scope of the company's engineering and construction operations.
Early results of the latest revamp were encouraging though tentative. Revenues continued their expected decline but net income was on the increase, resulting in a clear improvement in profit margins. The spike in oil prices during 2000 boded well for Fluor Daniel's energy unit, and the economic recovery in several key markets provided additional early 21st-century optimism for the still globally active Fluor Corporation.
Principal Subsidiaries: ADP Marshall Contractors Inc.; American Equipment Company, Inc.; A.T. Massey Coal Company, Inc.; Fluor Constructors International, Inc.; Fluor Daniel Inc.; Fluor Daniel Williams Brothers; Fluor Daniel Pty. Ltd. (Australia); Fluor Daniel Brasil; Fluor Daniel Canada Inc.; Fluor Daniel Wright Limited (Canada); Fluor Daniel Chile, S.A.; Fluor Daniel China, Inc.; Fluor Daniel India Private Limited; Fluor Daniel Eastern, Inc. (Indonesia); Fluor Daniel (Malaysia) Sdn. Bhd.; ICA Fluor Daniel (Mexico); Fluor Daniel B.V. (Netherlands); Fluor Daniel Consultants B.V. (Netherlands); Fluor Daniel Sucursal del Peru; Fluor Daniel Pacific Inc. (Philippines); Fluor Daniel Eurasia Inc. (Russia); Fluor Daniel Arabia Limited (Saudi Arabia); Fluor Daniel Engineers & Constructors Ltd. (Singapore); Fluor Daniel South Africa Pty. Ltd.; Fluor Daniel España, S.A. (Spain); Fluor Daniel Group Inc. (United Arab Emirates); Fluor Daniel International Limited (U.K.); Fluor Daniel Limited (U.K.); Tecnofluor Inc. (Venezuela).
Principal Operating Units: Fluor Daniel; Fluor Global Services; Fluor Signature Services; A.T. Massey Coal; Fluor Constructors International.
Principal Competitors: ABB Ltd.; AGRA Inc.; Ansaldo; ARCADIS NV; Arch Coal, Inc.; Bechtel Group, Inc.; Black & Veatch; Bouygues S.A.; CH2M Hill Companies, Ltd.; Day & Zimmermann, Inc.; Foster Wheeler Corporation; Groupe GTM; Halliburton Company; Hyundai Group; J.S. Alberici Construction Co., Inc.; Kajima Corporation; Kvaerner ASA; McDermott International, Inc.; Ogden Corporation; Peter Kiewit Sons', Inc.; Philip Services Corp.; Philipp Holzmann Group; Raytheon Company; Samsung Corporation; Stone & Webster, Incorporated; Technip.
OVERALL
Beta: 1.23
Market Cap (Mil.): $11,706.17
Shares Outstanding (Mil.): 176.83
Annual Dividend: 0.50
Yield (%): 0.76
FINANCIALS
FLR Industry Sector
P/E (TTM): 33.57 40.19 16.87
EPS (TTM): -47.44 -- --
ROI: 11.15 1.06 3.27
ROE: 10.51 1.48 5.85
Statistics:
Public Company
Incorporated: 1924 as Fluor Construction Company
Employees: 53,561
Sales: $12.42 billion (1999)
Stock Exchanges: New York Chicago Pacific Amsterdam London Swiss
Ticker Symbol: FLR
NAIC: 212111 Bituminous Coal and Lignite Surface Mining; 213113 Support Activities for Coal Mining; 233310 Manufacturing and Industrial Building Construction; 233320 Commercial and Institutional Building Construction; 234110 Highway and Street Construction; 234930 Industrial Nonbuilding Structure Construction; 234990 All Other Heavy Construction; 235950 Building Equipment and Other Machinery Installation Contractors; 421520 Coal and Other Mineral and Ore Wholesalers; 421810 Construction and Mining (Except Petroleum) Machinery and Equipment Wholesalers; 532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing; 541310 Architectural Services; 541330 Engineering Services; 811310 Commercial and Industrial Machinery and Equipment (Except Automotive and Electronic) Repair and Maintenance
Key Dates:
1890: John Simon Fluor and his two older brothers start a saw and paper mill called Rudolph Fluor & Brother.
1903: The company is renamed Fluor Brothers Construction Company.
1912: Fluor travels to California and starts his own general construction business.
1924: Fluor incorporates his business as Fluor Construction Company.
1929: Company is reincorporated as Fluor Corporation, Ltd.
1930: Peter Fluor expands the company's operations outside of California.
1950: The company's stock begins trading over the counter.
1957: The company's stock begins trading on the New York and Pacific exchanges.
1967: Fluor's diversification into offshore drilling commences.
1969: Company enters the mining and metals industry through the purchase of Utah Construction and Mining Company.
1971: Engineering and construction activities are consolidated into Fluor Engineers and Constructors, Inc.
1984: David S. Tappan, Jr., becomes CEO.
Mid-1980s:Fluor divests all of its oil properties, some gold operations, and all its offshore drilling facilities.
1991: Leslie G. McGraw takes over as CEO.
1997: Decreasing profits lead to restructuring efforts and a pullback from the expansion program launched three years earlier.
1998: McGraw steps down as CEO and is replaced by Philip Carroll, the first outsider named chairman in company history.
1999: Major restructuring divides the company into five semiautonomous business units: Fluor Daniel, Fluor Global Services, A.T. Massey Coal, Fluor Constructors International, and Fluor Signature Services; Fluor Daniel is organized into five units, 15 of its offices are closed, and its workforce is reduced by 5,000.
Name Age Since Current Position
Boeckmann, Alan 62 2011 Non-Executive Chairman of the Board
Seaton, David 49 2011 Chief Executive Officer, Director
Steuert, D. Michael 62 2001 Chief Financial Officer, Senior Vice President
Grimes, Kirk 53 2003 Group President - Global Services
Dobbs, Stephen 54 2009 Senior Group President - Industrial & Infrastructure and Global Services
Dunning, David 59 2009 Group President - Power
Oosterveer, Peter 53 2009 Group President - Energy & Chemicals
Stanski, Bruce 50 2009 Group President - Government
Hernandez, Carlos 56 2007 Senior Vice President, Chief Legal Officer, Secretary
Gilkey, Glenn 52 2008 Senior Vice President - Human Resources and Administration
Smalley, Gary 52 2008 Vice President, Controller
Hopkins, John 57 2009 Group Executive - Corporate Development
Fluor, Peter 63 2003 Lead Independent Director
O'Hare, Dean 68 1997 Independent Director
Hackett, James 57 2001 Independent Director
Kresa, Kent 73 2003 Independent Director
Woolsey, Suzanne 69 2004 Independent Director
Prueher, Joseph 68 2003 Independent Director
Barker, Peter 62 2007 Independent Director
Sultan, Nader 62 2009 Independent Director
Berkery, Rosemary 57 2010 Independent Director
Address:
One Enterprise Drive
Aliso Viejo, California 92656-2606
U.S.A.
Fluor Corporation (Fluor), incorporated on September 11, 2000, is a holding company. The Company, acting through its subsidiaries, is a professional services firm, providing engineering, procurement, construction and maintenance, as well as project management services. Fluor serves a diverse set of industries, including oil and gas, chemicals and petrochemicals, transportation, mining and metals, power, life sciences, and manufacturing. Fluor is also a primary service provider to the United States federal Government. It operates in five segments: Oil & Gas, Industrial & Infrastructure, Government, Global Services and Power. Fluor Constructors International, Inc., which operates separately from the rest of its business, provides unionized management and construction services in the United States and Canada, both independently and as a subcontractor on projects in each of the segments.
The Company offers engineering, procurement, construction, maintenance and project management services, independently, as well as on a fully integrated basis. In the engineering area, Fluor’s expertise ranges from traditional engineering disciplines, such as piping, mechanical, electrical, control systems, civil, structural and architectural to advanced engineering specialties, including process engineering, chemical engineering, simulation, enterprise integration, integrated automation processes and interactive three dimensional (3-D) modeling. As part of these services, it provides conceptual design services. Also included within these services are such activities as feasibility studies, project development planning, technology evaluation, risk management assessment, global siting, constructability reviews, asset optimization and front-end engineering.
The Company’s procurement organization offers traditional procurement services, as well as supply chain solutions. Its clients benefit from its global sourcing and supply expertise, global purchasing power, technical knowledge, processes, systems and experienced global resources. Fluor’s traditional procurement activities include strategic sourcing, material management, contracts management, buying, expediting, supplier quality inspection, logistics and export control. In the construction area, the Company mobilizes, executes, commissions and demobilizes projects on a self-perform or subcontracted basis or through construction management as the owner's agent. Fluor is responsible for the completion of a project, often in difficult locations and under challenging circumstances. The Company is frequently designated as a program manager, where a client has facilities in multiple locations, complex phases in a single project location, or a large-scale investment in a facility. Depending upon the project, it often serves as the primary contractor or it may act as a subcontractor to another party.
Under Fluor’s operations and maintenance contracts, its clients ask the Company to operate and maintain large, complex facilities for them. The Company does so through the delivery of total maintenance services, facility management, plant readiness, commissioning, start-up and maintenance technology, small capital projects and turnaround and outage services. Among other things, it can provide key management, staffing and management skills to clients on-site at their facilities. Fluor’s operations and maintenance activities can also include routine and outage/turnaround maintenance services, general maintenance and asset management, and restorative, repair, predictive and prevention services. The Company is often hired as the overall program manager on large complex projects where various contractors and subcontractors are involved and multiple activities need to be integrated. Its project management services include logistics, development of project execution plans, detailed schedules, cost forecasts, progress tracking and reporting, and the integration of the engineering, procurement and construction efforts.
Oil & Gas
Fluor serves the oil and gas production and processing, and the chemical and petro-chemical industries, as an integrated service provider offering a range of design, engineering, procurement, construction and project management services to a spectrum of energy related industries. It serves a number of specific industries, including upstream oil and gas production, downstream refining, chemicals and petrochemicals. The Company has the capacity to design and construct new facilities, upgrade and revamp existing facilities, rebuild facilities following fires and explosions, and expand refineries, processing plants, petro-chemical facilities and pipeline and offshore facility installations. It also provides consulting services ranging from feasibility studies to process assessment to project finance structuring and studies. The Company’s projects in the upstream sector revolve around the production, processing and transporting of oil and gas resources, including the development of major new fields, as well as liquefied natural gas (LNG) projects. It is also involved in offshore production facilities. With the Company’s partner Grupo ICA, it maintains a joint venture known as ICA Fluor, through which it participates in the Mexican and Central American oil, gas, power, chemical and other markets.
Industrial & Infrastructure
Flour’s Industrial & Infrastructure segment provides design, engineering, procurement and construction services to the transportation, wind power, mining and metals, life sciences, telecommunications, manufacturing, commercial and institutional development, microelectronics and healthcare sectors. Fluor focuses on providing its clients with solutions. In transportation, Fluor provides a range of services, including consulting, design, planning, financial structuring, engineering and construction management, domestically and internationally. Its service offerings include transportation infrastructure, such as roads, highways, bridges and rail.
The Company’s mining and metals provides a range of services to the iron ore, copper, diamond, gold, nickel and aluminum industries, which include feasibility studies through engineering, design, procurement, construction, and commissioning and start-up support. In life sciences, it provides design, engineering, procurement, construction and construction management services to the pharmaceutical and biotechnology industries. The Company also specializes in providing validation and commissioning services where it not only brings new facilities into production but it also keep existing facilities operating. In manufacturing, it provides design, engineering, procurement, consulting, construction and construction management services to a variety of industries.
Government
Fluor's Government segment is a provider of engineering, construction, logistics support, contingency response and management and operations services to the United States Government. It is primarily focused on the Department of Energy, the Department of Homeland Security and the Department of Defense. For the Department of Energy, Fluor provides site management, environmental remediation, decommissioning, engineering and construction services and has addressed the environmental and regulatory challenges associated with these sites. It provides engineering and construction services, as well as logistics and contingency operations support, to the Department of Defense. Fluor supports military logistical and infrastructure needs. In combination with its subsidiary, Del-Jen, Inc., it is a provider of outsourced services to the federal Government. Fluor provides operations and maintenance services at military bases and education and training services to the Department of Labor, particularly through Job Corps programs. The company is also providing support to the Department of Homeland Security.
Global Services
The Company’s Global Services segment integrates a variety of customized service capabilities that assist industrial clients in improving the performance of their plants and facilities. Capabilities within Global Services include operations and maintenance activities, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services and temporary staffing. Global Services' activities in the operations and maintenance markets include providing facility start-up and management, plant and facility maintenance, operations support and asset management services to the oil and gas, chemicals, life sciences, mining and metals, and manufacturing industries.
Global Services includes Plant Performance Services LLC (P2S), which is a service provider in the United States, performing small capital engineering and construction, specialty welding, electrical and instrumentation, fabrication, mechanical, turnaround and demolition services. It also provides Site Services and Fleet Outsourcing through American Equipment Company, Inc. (AMECO). AMECO provides integrated construction equipment, tool, and fleet service solutions on a global basis for construction projects and plant sites of both third-party clients and clients of the Company. AMECO supports large construction projects and plants at locations throughout North and South America, South Africa and the Middle East. Global Services serves the temporary staffing market through TRS Staffing Solutions, Inc. (TRS). TRS is a global enterprise of staffing specialists that provides the Company and third-party clients with recruiting and permanent placement services and the placement of contract technical professionals.
Power
In the Power segment, the Company provides a range of services to the gas fueled, solid fuels, plant betterment, renewables, nuclear and power services markets. Its services include engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance. Through the gas fueled market, Fluor offer a range of services for simple and combined cycle reference designs, as well as Integrated Gasification Combined Cycle (IGCC) projects. Through the solid fueled and plant betterment markets, it offers a range of services for subcritical, supercritical, ultra-supercritical and circulating fluidized bed (CFB) technologies, as well as emissions reduction solutions, including selective catalytic reduction (SCR), flue gas desulphurization (FGD), and particulate and mercury controls designs.
The Company offers experience in designing and constructing coal-fired power generation facilities while delivering technology for base load capacity. Flour also offers solutions for post-combustion carbon capture and sequestration for solid fueled and gas fueled facilities, offering its Econamine FG Plus CO2 capture technology. In the renewables market, it offers a range of technology choices for solar, wind, biomass and geothermal solutions. For solar, the Company is focused on thermal technologies, such as Concentrating Solar Power (CSP), as well as Photovoltaic (PV) solar applications. In nuclear market, it is positioned to offer Fluor's nuclear experience for new build plants, capital modifications, extended power uprate (EPU) projects and operations and maintenance services. Through its power services business line, Flour offers a variety of services to owners, including plant maintenance, facility management, operations support, asset performance improvement, capital modifications and improvements, operations readiness and start-up commissioning.
The Company competes with Bechtel Group, Inc., CH2M Hill Companies Limited, Jacobs Engineering Group, Inc., KBR Inc., the Shaw Group, URS Corporation, AMEC plc, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, Foster Wheeler AG, Hyundai Engineering & Construction Company, JGC Corporation, McDermott International, Inc., Technip and WorleyParsons Limited.
This diverse customer base served Fluor well in the early 1990s when a recession crippled many construction companies. The company increased its operating profit throughout the downturn, benefiting from a $5 billion contract to manage and construct the production facilities of Saudi Aramco and other work in the Middle East resulting from the destruction of petroleum facilities during the war in the Persian Gulf.
In 1992, under the stewardship of Leslie G. McCraw, a former vice-president of Fluor who replaced Tappan a year earlier, Fluor continued to increase its profits in the engineering and construction business and augment its investment in the coal industry. For the fifth consecutive year Fluor Daniel recorded an operating profit, increasing 15 percent from 1991 to $191 million. Revenues for the year were buoyed by a $4 billion U.S. Department of Energy contract to manage the cleanup and dismantling of a plutonium plant in Fernald, Ohio. The company's coal mining concern, A.T. Massey Coal Company, increased its reserves of high-quality, low-sulfur coal to nearly one billion tons, ranking it among the five largest U.S. coal companies. While Fluor's coal business thrived, generating an operating profit of $80 million, the company's lead concern, the Doe Run Company, suffered from a considerable drop in the price of lead. By the end of the year, McCraw decided to end Fluor's presence in the lead industry, designating the Doe Run operation as a discontinued operation. He was finally able to sell the unit in April 1994.
McCraw also oversaw a speeding up of the diversification program started by his predecessor, with 1994 standing out as a key turning point. That year Fluor Daniel aggressively expanded into new industry markets and geographic regions; by early 1995 the unit had operations in more than 80 countries and in 25 industry areas. The corporation also created a new unit, the Diversified Services Group, which began providing a variety of engineering- and construction-related services, including procurement, temporary staffing, and equipment rental and sales. Revenues subsequently soared, from $7.85 billion in 1993 to $11.02 billion in 1996 (an increase of more than 40 percent), while net income climbed from $166.8 million to $268.1 million over the same period (more than 60 percent). Among the major projects that Fluor Daniel was contracted to build during this period--either alone or through a consortium--were a $1 billion petrochemical complex in Kuwait; a $5 billion cleanup effort at a former U.S. Department of Energy plutonium production facility in Hanford, Washington; the $1.6 million Batu Hijau copper and gold mining project in Indonesia; and a $4.8 billion high-speed rail system in Florida.
The big expansion push engineered by McCraw hit a snag in early 1997 when Fluor's profits began suffering from a spate of low-margin contracts and increased competition stemming from industry overcapacity. In February 1997 the company announced that it would take a $140 million pretax charge to cover cost overruns on two major contracts and would launch a restructuring aimed at cutting $100 million out of its bloated overhead, which had reached nearly $700 million because of McCraw's worldwide expansion. A number of new overseas offices that had been opened were shuttered and more than 100 executives left the company. As 1997 continued, however, Fluor's situation worsened thanks to the Asian economic crisis that erupted that summer. In late 1997 the company announced another restructuring. Continuing to pull back from the diversification program, Fluor Daniel was reorganized into four market-focused segments: energy and chemicals; government, environment, and telecommunications; industrial; and mining and minerals. It also began to be more selective about the projects it took on. In early 1998 McCraw took early retirement for health reasons.
After several months of management by an executive committee, Fluor installed a new chairman and CEO in July 1998, Philip J. Carroll, who became the first outsider named chairman in company history. Carroll took the position after a company policy requiring top executives to retire at age 60 forced him to leave his job as president and CEO of Shell Oil Company, the U.S. unit of Anglo-Dutch petroleum giant Royal Dutch/Shell Group. The appointment of an outsider surprised many observers, but Carroll's experience turning Shell around appeared key. In October 1998, soon after Carroll came on board, Fluor abandoned its attempt to sell American Equipment Company, its equipment rental and sales unit, having announced its intention to divest the unit only the previous March. The decision followed the collapse of negotiations with the leading bidder.
Carroll then initiated a much more significant restructuring, which was announced in March 1999. Fluor was reorganized into five semiautonomous business units, the three most important of which were: Fluor Daniel, A.T. Massey Coal, and Fluor Global Services. The last of these was a successor to the Diversified Services Group, and included American Equipment, staffing services, operations and maintenance services, consulting services, and services for the governmental and telecommunications sectors. The restructuring also involved a large-scale overhaul of the Fluor Daniel unit. In order to slash an additional $160 million from Fluor's still bloated overhead, 15 of Fluor Daniel's 75 domestic and overseas offices were closed and about 5,000 jobs were eliminated from the workforce. While not abandoning any existing contracts, Fluor Daniel planned to concentrate on five core areas in the future: chemicals and process (including pharmaceuticals and biotechnology); oil, gas, and power; infrastructure (transportation); mining; and manufacturing (particularly consumer products, food and beverage, microelectronics, and light metals). Fluor Daniel aimed to focus on its 200 largest customers and those industries in which its projects achieved the largest profit margins. For the fiscal year ending in October 1999, a $130 million charge contributed to a 56 percent drop in profits, to $104.2 million. Revenues fell for the second straight year, reflecting the narrowing scope of the company's engineering and construction operations.
Early results of the latest revamp were encouraging though tentative. Revenues continued their expected decline but net income was on the increase, resulting in a clear improvement in profit margins. The spike in oil prices during 2000 boded well for Fluor Daniel's energy unit, and the economic recovery in several key markets provided additional early 21st-century optimism for the still globally active Fluor Corporation.
Principal Subsidiaries: ADP Marshall Contractors Inc.; American Equipment Company, Inc.; A.T. Massey Coal Company, Inc.; Fluor Constructors International, Inc.; Fluor Daniel Inc.; Fluor Daniel Williams Brothers; Fluor Daniel Pty. Ltd. (Australia); Fluor Daniel Brasil; Fluor Daniel Canada Inc.; Fluor Daniel Wright Limited (Canada); Fluor Daniel Chile, S.A.; Fluor Daniel China, Inc.; Fluor Daniel India Private Limited; Fluor Daniel Eastern, Inc. (Indonesia); Fluor Daniel (Malaysia) Sdn. Bhd.; ICA Fluor Daniel (Mexico); Fluor Daniel B.V. (Netherlands); Fluor Daniel Consultants B.V. (Netherlands); Fluor Daniel Sucursal del Peru; Fluor Daniel Pacific Inc. (Philippines); Fluor Daniel Eurasia Inc. (Russia); Fluor Daniel Arabia Limited (Saudi Arabia); Fluor Daniel Engineers & Constructors Ltd. (Singapore); Fluor Daniel South Africa Pty. Ltd.; Fluor Daniel España, S.A. (Spain); Fluor Daniel Group Inc. (United Arab Emirates); Fluor Daniel International Limited (U.K.); Fluor Daniel Limited (U.K.); Tecnofluor Inc. (Venezuela).
Principal Operating Units: Fluor Daniel; Fluor Global Services; Fluor Signature Services; A.T. Massey Coal; Fluor Constructors International.
Principal Competitors: ABB Ltd.; AGRA Inc.; Ansaldo; ARCADIS NV; Arch Coal, Inc.; Bechtel Group, Inc.; Black & Veatch; Bouygues S.A.; CH2M Hill Companies, Ltd.; Day & Zimmermann, Inc.; Foster Wheeler Corporation; Groupe GTM; Halliburton Company; Hyundai Group; J.S. Alberici Construction Co., Inc.; Kajima Corporation; Kvaerner ASA; McDermott International, Inc.; Ogden Corporation; Peter Kiewit Sons', Inc.; Philip Services Corp.; Philipp Holzmann Group; Raytheon Company; Samsung Corporation; Stone & Webster, Incorporated; Technip.
OVERALL
Beta: 1.23
Market Cap (Mil.): $11,706.17
Shares Outstanding (Mil.): 176.83
Annual Dividend: 0.50
Yield (%): 0.76
FINANCIALS
FLR Industry Sector
P/E (TTM): 33.57 40.19 16.87
EPS (TTM): -47.44 -- --
ROI: 11.15 1.06 3.27
ROE: 10.51 1.48 5.85
Statistics:
Public Company
Incorporated: 1924 as Fluor Construction Company
Employees: 53,561
Sales: $12.42 billion (1999)
Stock Exchanges: New York Chicago Pacific Amsterdam London Swiss
Ticker Symbol: FLR
NAIC: 212111 Bituminous Coal and Lignite Surface Mining; 213113 Support Activities for Coal Mining; 233310 Manufacturing and Industrial Building Construction; 233320 Commercial and Institutional Building Construction; 234110 Highway and Street Construction; 234930 Industrial Nonbuilding Structure Construction; 234990 All Other Heavy Construction; 235950 Building Equipment and Other Machinery Installation Contractors; 421520 Coal and Other Mineral and Ore Wholesalers; 421810 Construction and Mining (Except Petroleum) Machinery and Equipment Wholesalers; 532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing; 541310 Architectural Services; 541330 Engineering Services; 811310 Commercial and Industrial Machinery and Equipment (Except Automotive and Electronic) Repair and Maintenance
Key Dates:
1890: John Simon Fluor and his two older brothers start a saw and paper mill called Rudolph Fluor & Brother.
1903: The company is renamed Fluor Brothers Construction Company.
1912: Fluor travels to California and starts his own general construction business.
1924: Fluor incorporates his business as Fluor Construction Company.
1929: Company is reincorporated as Fluor Corporation, Ltd.
1930: Peter Fluor expands the company's operations outside of California.
1950: The company's stock begins trading over the counter.
1957: The company's stock begins trading on the New York and Pacific exchanges.
1967: Fluor's diversification into offshore drilling commences.
1969: Company enters the mining and metals industry through the purchase of Utah Construction and Mining Company.
1971: Engineering and construction activities are consolidated into Fluor Engineers and Constructors, Inc.
1984: David S. Tappan, Jr., becomes CEO.
Mid-1980s:Fluor divests all of its oil properties, some gold operations, and all its offshore drilling facilities.
1991: Leslie G. McGraw takes over as CEO.
1997: Decreasing profits lead to restructuring efforts and a pullback from the expansion program launched three years earlier.
1998: McGraw steps down as CEO and is replaced by Philip Carroll, the first outsider named chairman in company history.
1999: Major restructuring divides the company into five semiautonomous business units: Fluor Daniel, Fluor Global Services, A.T. Massey Coal, Fluor Constructors International, and Fluor Signature Services; Fluor Daniel is organized into five units, 15 of its offices are closed, and its workforce is reduced by 5,000.
Name Age Since Current Position
Boeckmann, Alan 62 2011 Non-Executive Chairman of the Board
Seaton, David 49 2011 Chief Executive Officer, Director
Steuert, D. Michael 62 2001 Chief Financial Officer, Senior Vice President
Grimes, Kirk 53 2003 Group President - Global Services
Dobbs, Stephen 54 2009 Senior Group President - Industrial & Infrastructure and Global Services
Dunning, David 59 2009 Group President - Power
Oosterveer, Peter 53 2009 Group President - Energy & Chemicals
Stanski, Bruce 50 2009 Group President - Government
Hernandez, Carlos 56 2007 Senior Vice President, Chief Legal Officer, Secretary
Gilkey, Glenn 52 2008 Senior Vice President - Human Resources and Administration
Smalley, Gary 52 2008 Vice President, Controller
Hopkins, John 57 2009 Group Executive - Corporate Development
Fluor, Peter 63 2003 Lead Independent Director
O'Hare, Dean 68 1997 Independent Director
Hackett, James 57 2001 Independent Director
Kresa, Kent 73 2003 Independent Director
Woolsey, Suzanne 69 2004 Independent Director
Prueher, Joseph 68 2003 Independent Director
Barker, Peter 62 2007 Independent Director
Sultan, Nader 62 2009 Independent Director
Berkery, Rosemary 57 2010 Independent Director
Address:
One Enterprise Drive
Aliso Viejo, California 92656-2606
U.S.A.
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