Fluor 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 Fluor annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

Table of contents

  • Page 1

  • Page 2
    ...฀ OF฀THE฀WORLDÕS฀LARGEST฀PUBLICLY฀TRADED฀ ENGINEERING ฀PROCUREMENT ฀CONSTRUCTION ฀ MAINTENANCE฀AND฀PROJECT฀MANAGEMENT฀ COMPANIES฀฀/VER฀THE฀PAST฀CENTURY ฀ &LUOR ฀THROUGH฀ITS฀OPERATING฀SUBSIDIARIES ฀ HAS฀BECOME฀A฀TRUSTED฀GLOBAL฀LEADER฀ IN...

  • Page 3
    ... AND฀A฀DIVERSE฀PORTFOLIO฀OF฀SERVICES฀ACROSS฀ A฀WIDE฀RANGE฀OF฀INDUSTRIES฀AND฀GEOGRAPHIES฀฀ !S฀A฀TEAM ฀WE฀SHARE฀COMPREHENSIVE฀ RESOURCES฀WITH฀THE฀ABILITY฀TO฀DELIVER฀WORLD CLASS฀SOLUTIONS฀THROUGH฀THE฀APPLICATION฀OF฀ OUR฀COLLECTIVE...

  • Page 4
    ...ðCATION฀ STRATEGY฀HAS฀BECOME฀A฀TRUE฀CONTRIBUTOR฀ TO฀SHAREHOLDER฀VALUE฀ )N฀)NDUSTRIAL฀฀)NFRASTRUCTURE ฀MINING฀ AND฀METALS฀PROJECTS฀ACCOUNTED฀FOR฀ THE฀MAJORITY฀OF฀NEW฀AWARDS ฀INCLUDING฀ AN฀IRON฀ORE฀MINING฀EXPANSION฀FOR฀ "(0฀"ILLITON...

  • Page 5
    ...0OWER฀GROUP฀ 7E฀BELIEVE฀THAT฀WE฀ARE฀BETTER฀POSITIONED฀ +EY฀0OWER RELATED฀PROJECT฀AWARDS฀ INCLUDED฀THE฀DESIGN฀OF฀TWO฀NEW฀SOLAR฀ POWER฀PLANTS฀IN฀3PAIN฀AND฀A฀MASTER฀ PLAN฀DEVELOPMENT฀AWARD฀FOR฀WHAT฀WILL฀ BECOME฀ONE฀OF฀THE฀WORLD...

  • Page 6
    ...฀IN฀EMERGING฀ MARKETS ฀WHERE฀OUR฀CLIENTS฀ARE฀ EXPANDING ฀COMPETITION฀IS฀INCREASING฀ AND฀SIGNIðCANT฀BUSINESS฀OPPORTUNITIES฀ ARE฀DEVELOPING฀3TRENGTHENING฀OUR฀ COMPANYÕS฀INTERNAL฀CAPACITY฀TO฀CREATE฀ VALUE฀IS฀AN฀ONGOING฀PROCESS ฀AND฀WE...

  • Page 7
    ...฀AND฀OFFERING฀ PROACTIVE฀SOLUTIONS (OCKEY฀LEGEND฀7AYNE฀'RETZKY฀ONCE฀ While Fluor is changing the person at the helm, our direction as a company will remain the same. Our core strategy is sound - and the tenets of integrity, excellence, safety and diversity are sacred...

  • Page 8
    ...AS฀PROVIDES฀A฀FULL฀RANGE฀OF฀SERVICES฀ FOR฀SOME฀OF฀THE฀LARGEST฀UPSTREAM ฀ DOWNSTREAM฀AND฀PETROCHEMICAL฀FACILITIES฀฀ IN฀THE฀WORLD฀"Y฀COLLABORATING฀AND฀SHARING฀ RESOURCES฀WITH฀OTHER฀&LUOR฀GROUPS ฀THIS฀ TEAM฀DELIVERS฀INDUSTRY LEADING...

  • Page 9
    ...SOLUTIONS ฀ BASED฀GROUP฀PROVIDING฀OPERATIONS฀AND฀ MAINTENANCE ฀CONSTRUCTION฀EQUIPMENT฀ SERVICES ฀PROCUREMENT฀AND฀LOGISTICS ฀฀ AND฀TEMPORARY฀STAFðNG฀TO฀INDUSTRIAL฀CLIENTS฀฀ "ROADENING฀ITS฀FOOTPRINT฀DOMESTICALLY฀ AND฀INTERNATIONALLY ฀THIS฀TEAM...

  • Page 10
    ONE GOAL We're a solutions-based company with the technical expertise and financial strength to meet the most difficult and demanding assignments. While our reach is global, our goal is simple - to coordinate our industry-leading efforts to seize key opportunities and propel ourselves, ...

  • Page 11
    ฀฀!NNUAL฀2EPORT฀฀฀฀฀

  • Page 12
    ...฀EXECUTION฀ MODEL฀THAT฀BRINGS฀RESOURCES฀FROM฀MULTIPLE฀&LUOR฀OFðCES฀AROUND฀THE฀ WORLD฀TO฀WORK฀ON฀ANY฀GIVEN฀PROJECT฀IN฀ANY฀LOCATION฀AROUND฀THE฀CLOCK฀ 4HIS฀MODEL ฀WHICH฀HAS฀NOW฀BEEN฀ADOPTED฀COMPANY WIDE ฀ENABLES฀ OUR฀GLOBAL...

  • Page 13
    ...฀ EARLY฀WORK฀ACTIVITIES ฀3ANTOS฀,TD฀NAMED฀ ฀฀!NNUAL฀2EPORT &LUOR฀AS฀THE฀WINNING฀CONTRACTOR฀FOR฀ THE฀ENGINEERING ฀PROCUREMENT฀AND฀ CONSTRUCTION฀%0# ฀SERVICES฀OF฀THE฀ UPSTREAM฀PORTION฀OF฀THE฀'LADSTONE฀,.'฀ PROJECT฀IN฀1UEENSLAND...

  • Page 14
    ... business lines - they see One Fluor offering solutions to their challenges." - Peter Oosterveer, Group President PROGRAM฀FOR฀0ETROLEOS฀-EXICANOS฀ 0%-%8 ฀IN฀-EXICO ฀THROUGH฀OUR฀STRONG฀ )#!฀&LUOR฀JOINT฀VENTURE฀7E฀ALSO฀WON฀THE฀ 0-#฀WORK฀FOR฀A฀NEW...

  • Page 15
    ...฀PROJECTS฀TO฀ OFFER฀OPPORTUNITIES฀AS฀WELL฀ 4O฀LEVERAGE฀THE฀ANTICIPATED฀OIL฀AND฀GAS฀ MARKET฀UPTURN ฀WE฀ARE฀STRENGTHENING฀ OUR฀GLOBAL฀RESOURCES ฀IMPROVING฀OUR฀COST฀ COMPETITIVE฀EXECUTION฀AND฀ENHANCING฀ OUR฀CLIENT฀SERVICE฀EXCELLENCE...

  • Page 16
    0NE MISSION Our primary objective is to develop, execute and maintain projects with excellence - a singular mission we achieve by marshaling a diverse global workforce to deliver world-class solutions. LUOR฀#ORPORATION

  • Page 17
    ฀฀!NNUAL฀2EPORT฀฀฀฀฀

  • Page 18
    ...OPEN฀ACCESS฀TO฀THE฀FULL฀RESOURCES฀OF฀/NE฀&LUOR฀WAS฀AN฀ IMPORTANT฀STRATEGIC฀ELEMENT฀OF฀THIS฀TEAMÕS฀ABILITY฀TO฀CAPITALIZE฀ON฀THE฀ MINING฀BOOM฀฀&ROM฀PROJECT฀MANAGERS฀TO฀INFORMATION฀TECHNOLOGY฀ SPECIALISTS ฀THEY฀WERE฀ABLE฀TO฀DRAW...

  • Page 19
    ...฀RAIL฀PROJECT ฀ A฀PUBLIC PRIVATE฀PARTNERSHIP฀LINKING฀ $ENVERÕS฀INTERNATIONAL฀AIRPORT฀TO฀THE฀ HEART฀OF฀THE฀CITY฀Ã"฀AN฀IMPORTANT฀PART฀OF฀ A฀LARGER฀PLAN฀TO฀EXPAND฀AND฀MODERNIZE฀ THE฀CITYÕS฀PUBLIC฀TRANSIT฀SYSTEM LUOR LED฀TEAM฀WILL...

  • Page 20
    ...฀JOINT฀ VENTURE ฀WAS฀CHOSEN฀FOLLOWING฀A฀HIGHLY฀ COMPETITIVE฀BIDDING฀PROCESS฀฀4HE฀ EXPECTED฀COMPLETION฀IS฀LATE N฀!BU฀$HABI ฀&LUOR฀WAS฀AWARDED฀THE฀ PROJECT฀MANAGEMENT฀CONSULTANCY฀FOR฀ THE฀NEW฀TRANSPORT฀NETWORK ฀A฀MASS TRANSIT฀PROGRAM...

  • Page 21
    ... PUBLIC PRIVATE฀MARKETS฀WHERE฀IT฀ COMPETES฀฀/UR฀ROBUST฀BALANCE฀SHEET฀ NOT฀ONLY฀GIVES฀US฀THE฀ABILITY฀TO฀BE฀AN฀ EQUITY฀CONTRIBUTOR฀FOR฀LARGE SCALE฀ PROJECTS฀Ã"฀IT฀ALSO฀PROVIDES฀THE฀LIQUIDITY฀ TO฀SUPPORT฀PROJECT฀EXECUTION ฀INSTILLING...

  • Page 22
    ONE VOICE Our stakeholders expect us to speak in one voice - responding in unison to help clients develop capital projects on schedule and within budget in order to improve their competitive position. The resulting performance strengthens our long-term success and promotes superior ...

  • Page 23
    ฀฀!NNUAL฀2EPORT฀฀฀฀฀ ฀ ฀   ฀! ฀ !NN !N NN N NU UA UAL AL A L L฀ ฀2E ฀ 2E 2EP POR PO OR O R RT T฀฀ T฀ T ฀ ฀฀฀ ฀฀ ฀฀  

  • Page 24
    ...SERVICES฀AND฀RESOURCES฀FROM฀ACROSS฀THE฀ COMPANY ฀REGARDLESS฀OF฀PROJECT฀TYPE฀OR฀LOCATION฀ $ESPITE฀A฀WEAK฀53฀ECONOMY ฀OUR฀'OVERNMENT฀GROUP฀WON฀฀BILLION฀ IN฀NEW฀AWARDS฀฀/UR฀CLIENTS฀KNOW฀THAT฀WHENEVER฀THEY฀NEED฀A฀CONTRACTOR...

  • Page 25
    ...฀SCALABLE฀STAFðNG฀AND฀EQUIPMENT ฀ ANYWHERE฀IN฀THE฀WORLD฀฀"Y฀TAPPING฀INTO฀ OUR฀GLOBAL฀NETWORK฀OF฀RESOURCES ฀WE฀ CAN฀EFðCIENTLY฀AND฀EFFECTIVELY฀MOBILIZE฀ THE฀REQUIRED฀SERVICES฀TO฀EXPEDITE฀NEW฀ ASSIGNMENTS ฀EVEN฀IN฀REMOTE฀LOCATIONS...

  • Page 26
    ... to execute projects as one team has contributed to our FORTUNE Magazine ranking as one of the engineering and construction industry's "Most Admired Companies" both in the United States and abroad. Fluor was also recognized, for the fifth straight year, as one of the "World's Most Ethical...

  • Page 27
    ฀฀!NNUAL฀2EPORT฀฀฀฀฀

  • Page 28
    ... ฀MAINTENANCE฀ PROGRAMS ฀INDUSTRIAL฀ñEET฀SERVICES ฀EQUIPMENT฀RENTALS฀AND฀PROFESSIONAL฀ STAFðNG฀AND฀TRAINING฀ 0ARTNERING฀INTERNALLY฀WITH฀OTHER฀BUSINESS฀SEGMENTS฀TO฀DELIVER฀FULLY฀ INTEGRATED ฀WORLD CLASS฀SOLUTIONS฀TO฀IMPORTANT฀GLOBAL฀ACCOUNTS...

  • Page 29
    ...seize new opportunities when client spending turns up." - Kirk Grimes, Group President 3OLUTIONS3-฀SUBSIDIARY฀REGULARLY฀฀ PROVIDES฀CLIENTS฀WITH฀EFðCIENT ฀COST EFFECTIVE฀SOLUTIONS฀FOR฀RECRUITING฀AND฀ TRAINING฀QUALIðED฀LOCAL฀WORKFORCES฀Ã"฀ ฀฀!NNUAL...

  • Page 30
    ...฀IN฀WHICH฀&LUOR฀OPERATES ฀THE฀ABILITY฀TO SUCCESSFULLY฀SERVE฀THE฀POWER฀MARKET฀HINGES฀ON฀AN฀EFðCIENT฀AND฀ EFFECTIVE฀KNOWLEDGE฀MANAGEMENT฀SYSTEM฀฀2EGARDLESS฀OF฀THE฀NATURE฀OF฀ THE฀PROJECT฀Ã"฀FROM฀FOSSIL FUELED฀PLANTS฀AND฀RENEWABLE...

  • Page 31
    ...฀PLANT฀ BETTERMENT฀SOLUTIONS฀THAT฀REDUCE฀฀ PLANT฀EMISSIONS฀฀ 7E฀HAVE฀RESTRUCTURED฀OUR฀POWER฀ SERVICES฀UNIT฀TO฀BETTER฀SERVE฀LONG TERM฀ CLIENTS฀AND฀TO฀ATTRACT฀NEW฀CUSTOMERS฀฀ 4HE฀GROUP฀HAS฀ALSO฀STRATEGICALLY฀ ALIGNED฀ITS฀BUSINESS...

  • Page 32
    New Awards and Backlog Data .%7฀!7!2$3฀"9฀3%'-%.4 9EAR฀%NDED฀$ECEMBER฀ ฀IN฀MILLIONS /IL฀฀'AS )NDUSTRIAL฀฀ )NFRASTRUCTURE 'OVERNMENT 'LOBAL฀3ERVICES 0OWER 4OTAL฀.EW฀!WARDS ฀฀ #ONSOLIDATED .EW฀!WARDS ...

  • Page 33
    ...AMOUNTS฀DUE฀THE฀COMPANY฀ ON฀A฀COMPLETED฀INFRASTRUCTURE฀JOINT฀VENTURE฀PROJECT฀IN฀#ALIFORNIA฀AND฀PRE TAX฀CHARGES฀OF฀฀MILLION฀OR฀฀PER฀DILUTED฀SHARE ฀ON฀A฀GAS ðRED฀POWER฀PROJECT฀ IN฀'EORGIA฀FOR฀ESTIMATED฀ADDITIONAL฀COSTS฀TO...

  • Page 34
    ...EINZ฀#OMPANY DMIRAL฀*OSEPH฀7฀0RUEHER 53฀.AVY฀RETIRED ฀0ROFESSOR ฀5NIVERSITY฀ OF฀6IRGINIA฀&ORMER฀53฀!... outstanding quality of his leadership and the remarkable accomplishments that characterized his tenure." - Peter Fluor 4HE฀OFðCER฀INFORMATION฀ON฀PAGE...

  • Page 35
    Officers &ROM฀LEFT฀TO฀RIGHT $฀-ICHAEL฀3TEUERT฀3ENIOR฀6ICE฀0RESIDENT฀AND฀#HIEF฀&INANCIAL฀/FðCER ...FOR฀SALES ฀MARKETING฀ AND฀INTERNATIONAL฀BUSINESS฀HELPED฀&LUOR฀GROW฀FROM฀A฀SMALL฀ #ALIFORNIA BASED฀COMPANY฀INTO฀A฀GLOBAL฀ENGINEERING฀AND฀ ...

  • Page 36
    ...฀0LANT฀3CHERER฀POWER฀ PLANT ฀*ULIETTE ฀'EORGIA 0AGE฀฀TOP฀RIGHT฀ +ENTUCKY฀5TILITIES฀'HENT฀GENERATING฀ STATION ฀#ARROLL฀#OUNTY ฀+ENTUCKY 0AGE฀฀BOTTOM฀RIGHT฀ 0'%฀$IABLO฀#ANYON฀NUCLEAR฀PLANT฀SITE฀ SERVICES฀WORK ฀!VILA฀"EACH ฀#ALIFORNIA...

  • Page 37
    ...of incorporation or organization) 6700 Las Colinas Boulevard Irving, Texas (Address of principal executive offices) 469-398-7000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on...

  • Page 38
    ... Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ...PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management...

  • Page 39
    ...business for almost 100 years. Our principal executive offices are located at 6700 Las Colinas Boulevard, Irving, Texas 75039, telephone number (469) 398­7000. Our common stock currently trades on the New York Stock Exchange under the ticker symbol ''FLR''. Fluor Corporation...

  • Page 40
    ... project cost and exposure and generally improves client relations. We believe that our safety record is one of our most distinguishing features. Global Execution Platform As the largest U.S.­based, publicly­traded engineering, procurement, construction and maintenance company...

  • Page 41
    ...procurement services as well as supply chain solutions aimed at improving product quality and performance while also reducing project cost and schedule. Our clients benefit from our global sourcing and supply expertise, global purchasing power, technical knowledge, processes...

  • Page 42
    ... American oil, gas, power, chemical and other markets. Industrial & Infrastructure The Industrial & Infrastructure segment provides design, engineering, procurement and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial...

  • Page 43
    ...Operating primarily from offices in North and South America and Australia, we are one of the few companies with the size and experience to pursue large scale mining and metals projects in difficult locations. In life sciences, we provide design, engineering, procurement...

  • Page 44
    ... and South America, South Africa and the Middle East. Our supply chain solutions business line provides a full range of strategic sourcing solutions to help execute capital projects. Our material, equipment and subcontracted services specialists continually monitor and...

  • Page 45
    ... nuclear units, design of three units and maintenance and capital modification services provided in over 90% of the existing units operating in the current U.S. market. Through our power services business line, we offer a variety of services to owners including plant...

  • Page 46
    ... tables, we include in backlog for the Global Services segment our operations and maintenance activities that have yet to be performed. However, the equipment, temporary staffing and supply chain solutions business lines do not report backlog due to the quick turnaround...

  • Page 47
    ...number of companies are competing in the markets served by our business, including U.S.­based companies such as Bechtel Group, Inc., CH2M Hill Companies Limited, Jacobs Engineering Group, Inc., KBR Inc., the Shaw Group and URS Corporation, and international­based companies...

  • Page 48
    ... provide the design, engineering, planning, management and project execution skills required to complete complex projects in a safe, timely and cost­efficient manner. Significant Clients For 2010, revenue earned from agencies of the U.S. government and BHP Billiton accounted for 15...

  • Page 49
    ...employees, who provide support throughout the various business segments, varies in relation to the number and size of projects we have in process at any particular time. Available Information Our website address is www.fluor.com. You may obtain free electronic copies of our annual reports...

  • Page 50
    ... companies compete. Among our competitors are U.S.­based companies such as Bechtel Group, Inc., CH2M Hill Companies Limited, Jacobs Engineering Group, Inc., KBR Inc., the Shaw Group and URS Corporation, and international­based companies such as AMEC plc, Chicago Bridge and Iron...

  • Page 51
    ... to changing domestic and international economic and political conditions which are beyond our control. As of December 31, 2010, approximately 74 percent of our projected backlog consisted of revenue to be derived from projects and services to be completed outside the United...

  • Page 52
    ... to our projects or other matters. These claims generally arise in the normal course of our business. When it is determined that we have liability, we may not be covered by insurance or, if covered, the dollar amount of these liabilities may exceed our policy limits. Our professional...

  • Page 53
    ... be a reliable indicator of our future revenue or earnings. As of December 31, 2010, our backlog was approximately $34.9 billion. Our backlog generally consists of projects for which we have an executed contract or commitment with a client and reflects our expected revenue from the contract or...

  • Page 54
    ... losses for us with respect to the joint venture. We enter into various joint ventures as part of our engineering, procurement and construction businesses, including ICA Fluor and project­specific joint ventures, where control may be shared with unaffiliated third...

  • Page 55
    ... review and audit government contractors with respect to the adequacy of and our compliance with our internal control systems and policies (including our labor, billing, accounting, purchasing, estimating compensation and management information systems). Despite the...

  • Page 56
    ... of existing government policies designed to protect small businesses and under­ represented minority contractors. Our inability to win or renew government contracts during the procurement processes could harm our operations. Our project execution activities may result...

  • Page 57
    ...or if our procedures fail, our employees or others may suffer injuries or even loss of life. Although we maintain functional groups whose primary purpose is to implement effective health, safety and environmental procedures throughout our company, the failure to comply with such...

  • Page 58
    ... Afghanistan and Iraq, where the country or location is subject to political, social or economic risks, or war or civil unrest. In those locations where we have employees or operations, we may incur substantial security costs to maintain the safety of our personnel. Despite these activities...

  • Page 59
    ...effect on our operations and financial condition. However, legislation and regulation regarding climate change could also increase the pace of development of carbon capture and storage projects, alternative transportation, alternative energy facilities, such as wind...

  • Page 60
    ...appropriately sized workforce, our ability to transition employees from completed projects to new projects or between internal business groups, and our need to devote resources to non­chargeable activities such as training or business development. While our estimates are based...

  • Page 61
    ... shares. Systems and information technology interruption and breaches in data security could adversely impact our ability to operate and our operating results. As a global company, we are heavily reliant on computer, information and communications technology and related systems in...

  • Page 62
    ...: Location Interest United States: Aliso Viejo, California ...Greenville, South Carolina ...Houston (Sugar Land), Texas ...Irving, Texas (Corporate Headquarters) Canada: Calgary, Alberta ...South America: Santiago, Chile ...Europe, Africa and Middle East: Al Khobar, Saudi Arabia ...Farnborough...

  • Page 63
    ... Submission of Matters to a Vote of Security Holders The company did not submit any matters to a vote of security holders during the fourth quarter of 2010. Executive Officers of the Registrant Information regarding the company's executive officers is set forth under the...

  • Page 64
    ... upon the vesting of restricted stock issued pursuant to equity based employee benefit plans and 2,700,000 shares of company stock repurchased and cancelled by the company during the fourth quarter of 2010 under its stock repurchase program for total consideration of $158,068,441...

  • Page 65
    ... share and employee information: 2010 Year Ended December 31, 2009 2008 2007 2006 CONSOLIDATED OPERATING RESULTS Total revenue Earnings before taxes(1)(2) Net earnings attributable to Fluor Corporation(1) Earnings per share(1)(3)(4) Basic Diluted Return on average shareholders' equity...

  • Page 66
    ... in 2009. The decrease in earnings for 2010 was primarily due to the impact of charges totaling $343 million for the Greater Gabbard Project in the United Kingdom and a charge totaling $95 million for a completed infrastructure joint venture project in California, both...

  • Page 67
    ...fired power project in Georgia for estimated additional costs to complete the project. The company reported lower corporate general and administrative expense in 2010 when compared to 2009, primarily as a result of overhead reduction efforts and lower management incentive compensation...

  • Page 68
    ...activity in the mining and metals business line. As of December 31, 2010, approximately 74 percent of consolidated backlog related to projects located outside of the United States. For a more detailed discussion of operating performance of each business segment, corporate general...

  • Page 69
    ... are often formed for the single business purpose of executing a specific project and allow the company to share risks and /or secure specialty skills required for project execution. The company evaluates at inception each partnership and joint venture to determine if it qualifies as...

  • Page 70
    ... Operations The company provides professional services on a global basis in the fields of engineering, procurement, construction, maintenance and project management. The company is organized into five business segments: Oil & Gas, Industrial & Infrastructure, Government...

  • Page 71
    ...business environment. New awards in the Oil & Gas segment were $9.7 billion in 2010, $7.0 billion in 2009 and $15.1 billion in 2008. New awards in 2010 included upstream services associated with a liquefied natural gas project in Australia valued at $3.5 billion and an oil sands program in Canada...

  • Page 72
    ... in the life sciences market and reduced margins on Greater Gabbard Project execution activities in the infrastructure business line. In addition, the segment experienced lower margins in 2009 as the result of the consolidation of a large mining project joint venture in which...

  • Page 73
    ... in total assets in 2010 compared to 2009 was primarily attributable to a reduction in work in process on the Greater Gabbard Project with the installation of certain offshore materials and the write­off of the investment for the infrastructure joint venture project in California...

  • Page 74
    ... the execution of Logistics Civil Augmentation Program (''LOGCAP IV'') task orders for the United States Army in Afghanistan. Revenue growth in both 2010 and 2009 for the Savannah River Site Management and Operating Project (''the Savannah River Project'') in South Carolina and...

  • Page 75
    ... operations and maintenance activities may not contribute to ending backlog. In addition, the equipment, temporary staffing and supply chain solutions business lines do not report backlog or new awards. Total assets in the Global Services segment were $824 million as of December 31, 2010...

  • Page 76
    ... 31, 2008. The decline in backlog since 2009 is primarily because the work performed on the Oak Grove project, major gas­fired power plant projects in Texas, Virginia and Georgia, and certain other projects was not replaced by new award activity. Total assets in the Power segment...

  • Page 77
    ... increase in the valuation allowance associated with net operating losses. A significant portion of the $152 million tax benefit resulted from the financial impact of the 2010 Greater Gabbard Project charges on the foreign subsidiary. The effective tax rate for 2008 was favorably impacted by...

  • Page 78
    .... Other As of December 31, 2010, a number of matters relating to completed and in progress projects are in the dispute resolution process. These include the Greater Gabbard Project and a completed infrastructure joint venture project in California, which are discussed above under ''- Industrial...

  • Page 79
    ... 2010, 2009 and 2008 included purchases, sales and maturities of marketable securities; capital expenditures; and disposals of property, plant and equipment. Investing activities in 2008 also included the sale of the joint venture interest in the Greater Gabbard Project. The company...

  • Page 80
    ...partnerships or joint ventures created primarily for the execution of single contracts or projects. Distributions paid were $84 million, $76 million and $24 million in 2010, 2009 and 2008, respectively. The significant increase in 2010 and 2009 compared to 2008...

  • Page 81
    ... Entities.'' During 2010, the company repaid $32 million in principal related to loans against the cash surrender value of corporate­owned life insurance policies. On December 15, 2008, the company registered shares of its common and preferred stock, debt securities and warrants...

  • Page 82
    ... conditions; however, management is unable to predict with certainty the amount and mix of future business. Variable Interest Entities In the normal course of business, the company forms partnerships or joint ventures primarily for the execution of single contracts or projects...

  • Page 83
    ...and amounts outstanding cannot be reasonably predicted. Operating leases are primarily for engineering and project execution office facilities in Sugar Land, Texas, the United Kingdom and various other U.S and international locations, equipment used in connection with long­term...

  • Page 84
    ... operational effectiveness of the company's internal control over financial reporting. Based on this assessment, management has concluded that the company's internal control over financial reporting was effective as of December 31, 2010. Because of its inherent limitations, internal control...

  • Page 85
    ... opinion, Fluor Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the...

  • Page 86
    ... to the company's executive officers: Name Age Position with the Company (1) Stephen B. Dobbs ... 54 Senior Group President, Industrial & Infrastructure and Global Services David R. Dunning ... 59 Group President, Power Glenn C. Gilkey ... 52 Senior Vice President, Human Resources and...

  • Page 87
    .... Oosterveer joined the company in 1989. David T. Seaton Mr. Seaton was named Chief Executive Officer of the Company and became a member of the Board of Directors, effective February 2, 2011. Prior to that, he was Chief Operating Officer from November 2009 to February 2011; Senior Group President...

  • Page 88
    ...our code of ethics or waivers from our code of ethics applicable to our chief executive officer, chief financial officer, and principal accounting officer and controller by posting such changes or waivers to our website. Corporate Governance We have adopted Corporate Governance Guidelines...

  • Page 89
    ... Compensation Plan Information The following table provides information as of December 31, 2010 with respect to the shares of common stock that may be issued under the Company's equity compensation plans: (a) (b) (c) Number of securities to be Weighted average Number of securities...

  • Page 90
    ... 2000 Restricted Stock Plan for Non­Employee Directors, as amended and restated on November 1, 2007 (incorporated by reference to Exhibit 10.4 to the registrant's Annual Report on Form 10­K filed on February 29, 2008). Fluor Corporation Executive Deferred Compensation Plan, as...

  • Page 91
    ... to David T. Seaton on February 7, 2008 (incorporated by reference to Exhibit 10.23 to the registrant's Annual Report on Form 10­K filed on February 25, 2009). Form of Value Driver Incentive Award Agreement under the Fluor Corporation 2008 Executive Performance Incentive Plan...

  • Page 92
    ... to Exhibit 10.28 to the registrant's Quarterly Report on Form 10­Q filed on May 10, 2010). Form of Restricted Stock Unit Agreement (with double trigger change of control) under the Fluor Corporation 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.29 to...

  • Page 93
    ....* New exhibit filed with this report. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Earnings for the years ended December 31, 2010, 2009 and 2008...

  • Page 94
    ... undersigned, thereunto duly authorized. FLUOR CORPORATION By: /s/ D. MICHAEL STEUERT D. Michael Steuert, Senior Vice President and Chief Financial Officer February 23, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report on Form 10­K has been...

  • Page 95
    Signature Title Date /s/ JAMES T. HACKETT James T. Hackett /s/ KENT KRESA Kent Kresa /s/ DEAN R. O'HARE Dean R. O'Hare /s/ JOSEPH W. PRUEHER Joseph W. Prueher /s/ NADER H. SULTAN Nader H. Sultan /s/ SUZANNE H. WOOLSEY Suzanne H. Woolsey Director February 23, 2011 Director ...

  • Page 96
    FLUOR CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS PAGE Report of Independent Registered Public Accounting Firm ... Consolidated Statement of Earnings ... Consolidated Balance Sheet ... Consolidated Statement of Cash Flows ... Consolidated Statement of Equity ... Notes...

  • Page 97
    ... with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Fluor Corporation's internal control over financial reporting as of December 31, 2010, based on...

  • Page 98
    ... OF EARNINGS Year Ended December 31, 2009 (in thousands, except per share amounts) 2010 2008 TOTAL REVENUE TOTAL COST OF REVENUE Cost of revenue Gain on sale of joint venture interest OTHER (INCOME) AND EXPENSES Corporate general and administrative expense Interest expense Interest income...

  • Page 99
    FLUOR CORPORATION CONSOLIDATED BALANCE SHEET December 31, 2010 December 31, 2009 (in thousands, except share amounts) ASSETS CURRENT ASSETS Cash and cash equivalents ($381,479 and $172,991 related to variable interest entities (''VIEs'')) Marketable securities, current Accounts and ...

  • Page 100
    ... contribution by joint venture partners Repayment of corporate­owned life insurance loans Taxes paid on vested restricted stock Stock options exercised Stock plans tax benefit Other items Cash utilized by financing activities Effect of exchange rate changes on...

  • Page 101
    ... taxes of $1,856) Total comprehensive income Dividends ($0.50 per share) Distributions to noncontrolling interests Stock plan activity Repurchase of common stock Debt conversions BALANCE AS OF DECEMBER 31, 2009 Comprehensive income Net earnings Foreign currency translation adjustment of...

  • Page 102
    ... to the 2010 presentation. Management has evaluated all material events occurring subsequent to the date of the financial statements up to the date and time this annual report is filed on Form 10­K. Stock Split On May 7, 2008, the Board of Directors approved a two­for­one stock split that was...

  • Page 103
    ... of the project. Contracts are generally segmented between types of services, such as engineering and construction, and accordingly, gross margin related to each activity is recognized as those separate services are rendered. Changes to total estimated contract cost...

  • Page 104
    ... by dividing net earnings attributable to Fluor Corporation by the weighted average number of common shares outstanding during the period. Potentially dilutive securities include employee stock options, restricted stock units and shares, and the 1.5% Convertible Senior...

  • Page 105
    ...) Net earnings attributable to Fluor Corporation Basic EPS: Weighted average common shares outstanding Basic earnings per share Diluted EPS: Weighted average common shares outstanding Diluted effect: Employee stock options and restricted stock units and shares Conversion equivalent of...

  • Page 106
    ... limited circumstances, foreign currency payment provisions could be deemed embedded derivatives. As of December 31, 2010, 2009 and 2008, the company had no significant embedded derivatives in any of its contracts. On January 1, 2008, the company adopted a policy to offset fair value...

  • Page 107
    ... joint venture project in California. In the third quarter of 2009, the company became aware of the non­collectability of a client receivable for a paper mill in the Global Services segment related to work performed in 2009. Consequently, the company...

  • Page 108
    ...120 1,451 (137) $1,314 During 2010 and 2009, functional currency exchange rates for most of the company's international operations strengthened against the U.S. dollar, resulting in unrealized translation gains. During 2008, functional currency exchange rates for most...

  • Page 109
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2. Consolidated Statement of Cash Flows The changes in operating assets and liabilities as shown in the Consolidated Statement of Cash Flows are comprised of: 2010 (in thousands) Year Ended December 31, 2009 2008 (Increase)...

  • Page 110
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of U.S. statutory federal income tax expense to income tax expense is as follows: Year Ended December 31, 2010 2009 2008 (in thousands) U.S. statutory federal tax expense Increase (decrease) in taxes ...

  • Page 111
    ... 2010 2009 (in thousands) Deferred tax assets: Accrued liabilities not currently deductible: Employee compensation and benefits Employee time­off accrual Project and non­project reserves Workers' compensation insurance accruals Tax basis of investments in excess of book basis Net operating...

  • Page 112
    ... before taxes in the United States in 2010 decreased compared to 2009 primarily due to charges for the gas­fired power project in Georgia in the Power segment (see ''- Power'') and charges for the completed infrastructure joint venture project in California in the Industrial...

  • Page 113
    ..., 2010, 2009 and 2008, respectively, is primarily related to domestic engineering and construction operations. The defined benefit pension plans are primarily related to domestic and international engineering and construction salaried employees and U.S. craft employees. Contributions...

  • Page 114
    ...public U.S. and international equities, U.S. private equities and fixed income securities. U.S. Pension Plan December 31, 2010 2009 2008 Non-U.S. Pension Plans December 31, 2010 2009 2008 For determining projected benefit obligation at year­end: Discount rates Rates of increase in compensation...

  • Page 115
    ... international companies, common or collective trusts with underlying investments in common and preferred stocks and limited partnerships. Publicly traded corporate equity securities are valued at the last reported sale price on the last business day of the year of the plans...

  • Page 116
    ... liabilities of the company's U.S. and non­U.S. defined benefit pension plans that are measured at fair value on a recurring basis as of December 31, 2010 and 2009: U.S. Pension Plan December 31, 2010 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant...

  • Page 117
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Non-U.S. Pension Plans December 31, 2010 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) ...

  • Page 118
    ... 31, 2010 2009 Change in projected benefit obligation Benefit obligation at beginning of year Service cost Interest cost Employee contributions Currency translation Actuarial (gain) loss Plan amendments Other Benefits paid Projected benefit obligation at end of year Change in plan assets...

  • Page 119
    ...company's U.S. defined benefit pension plans, the company and certain of its subsidiaries provide health care and life insurance benefits for certain retired U.S. employees. The health care and life insurance plans are generally contributory, with retiree contributions adjusted annually...

  • Page 120
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table sets forth the change in benefit obligation of the company's postretirement benefit plans: Year Ended December 31, 2010 2009 (in thousands) Change in postretirement benefit obligation Benefit obligation ...

  • Page 121
    ... on the last business day are valued at the last reported bid price. Consists of investments in U.S. agency securities, U.S. Treasury securities, international government and government­related securities, corporate debt securities and other debt securities with maturities ranging from one to...

  • Page 122
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2010, 2009 and 2008, proceeds from the available­for­sale securities were $522 million, $196 million and $36 million, respectively. The estimated fair values of the company's financial instruments that are not...

  • Page 123
    ...The fair values of derivatives designated as hedging instruments under ASC 815 as of December 31, 2010 and 2009 were as follows: Asset Derivatives (in thousands) Commodity swaps Foreign currency forwards Commodity swaps Foreign currency forwards Total derivatives Balance Sheet Location Other...

  • Page 124
    ...$(5,191) (477) $(5,668) During 2010, the company recognized gains of $3.6 million in corporate general and administrative expense related to settled foreign currency forward contracts which were not designated as hedges for accounting purposes. These foreign currency...

  • Page 125
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) on the Notes is payable semi­annually on February 15 and August 15 of each year. The Notes are convertible into shares of the company's common stock par value $0.01 per share, at a conversion rate of 35.9104...

  • Page 126
    ..., 2010 and 2009, respectively. Periodic changes in fair value of these trust investments, most of which are unrealized, are recognized in earnings, and serve to mitigate participants' investment results which are also reflected in earnings. 9. Stock Plans The company's executive stock plans...

  • Page 127
    ...ended 2010 and $13 million for each of the years ended 2009 and 2008, respectively. As discussed above, the company effected a two­for­one stock split that was paid on July 16, 2008 in the form of a stock dividend. Accordingly, restricted stock and stock option activity...

  • Page 128
    .... Generally, upon termination of employment, restricted stock units and restricted shares which have not vested are forfeited. For the years 2010, 2009 and 2008, recognized compensation expense of $32 million, $23 million and $25 million, respectively, is included in corporate general and...

  • Page 129
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) primarily to office facilities, equipment used in connection with long­term construction contracts and other personal property. The company's obligations for minimum rentals under non­cancelable operating leases are as ...

  • Page 130
    ... with the Greater Gabbard Project, a $1.8 billion lump­sum project to provide engineering, procurement and construction services for the client's offshore wind farm project in the United Kingdom. The dispute relates to the company's claim for additional compensation for schedule...

  • Page 131
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) schedule extensions, scope changes causing material deviations from the Standard Embassy Design, increased costs to meet client requirements for additional security­cleared labor, site conditions at certain ...

  • Page 132
    ...and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The performance guarantees have various expiration dates ranging from mechanical...

  • Page 133
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. Variable Interest Entities In the normal course of business, the company forms partnerships or joint ventures primarily for the execution of single contracts or projects. These partnerships or joint ventures are typically ...

  • Page 134
    ... accounting considerations. Rapid Growth Project In 2008, the Fluor SKM joint venture was awarded the initial program management, engineering and construction management contract for the expansion of port, rail and mine facilities for BHP Billiton Limited's iron ore mining project...

  • Page 135
    ... Beltway high­occupancy toll (''HOT'') lanes project in Virginia. The project is a public­private partnership between the Virginia Department of Transportation (''VDOT'') and Capital Beltway Express LLC, a joint venture in which the company has a 10 percent interest and Transurban...

  • Page 136
    ... non­recourse to the joint venture members. 14. Operations by Business Segment and Geographical Area The company provides professional services in the fields of engineering, procurement, construction and maintenance, as well as project management, on a global basis and serves a diverse...

  • Page 137
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Operating Information by Segment Year Ended December 31, 2010 2009 2008 (in millions) External revenue Oil & Gas Industrial & Infrastructure Government Global Services Power Total external revenue Segment profit (...

  • Page 138
    ...Global Services segment. The operating results and total assets presented above have been recast to reflect this change. Enterprise-Wide Disclosures External Revenue Year Ended December 31, 2010 2009 2008 (in millions) Total Assets As of December 31, 2010 2009 United States Canada...

  • Page 139
    ...reported in corporate general and administrative expense: Year Ended December 31, 2010 2009 2008 (in millions) Loss on sale of building Other items* Total * $ - $ - $16.4 1.6 1.7 1.4 $1.6 $1.7 $17.8 Includes the impact of adopting Financial Accounting Standards Board Staff...

  • Page 140
    ... joint venture project and the Greater Gabbard Project are discussed in ''12. Contingencies and Commitments'' above. Net earnings and Net earnings attributable to Fluor Corporation in 2010 included a $152 million ($0.84 per diluted share) tax benefit for a worthless stock...

  • Page 141
    ... &OR฀-ORE฀)NFORMATION฀6ISIT฀฀ WWWPAPERCALCULATORORG 2EGISTRAR฀AND฀4RANSFER฀!GENT฀ ".9฀-ELLON฀3HAREOWNER฀3ERVICES฀ ฀7ASHINGTON฀"OULEVARD฀ *ERSEY฀#ITY OR฀CHANGE฀OF฀ADDRESS ฀LOST฀DIVIDENDS฀OR฀LOST฀ STOCK฀CERTIðCATES ฀WRITE฀OR฀TELEPHONE...

  • Page 142
    ฀,AS฀#OLINAS฀"LVD )RVING ฀4EXAS฀ ñUORCOM