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Fluor Corp. Reports Operating Results (10-Q)

May 03, 2012 | About:
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10qk

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Fluor Corp. (FLR) filed Quarterly Report for the period ended 2012-03-31.

Fluor Corp-new has a market cap of $9.87 billion; its shares were traded at around $56.53 with a P/E ratio of 17.1 and P/S ratio of 0.4. The dividend yield of Fluor Corp-new stocks is 1.1%. Fluor Corp-new had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated Fluor Corp-new the business predictability rank of 2.5-star.

Highlight of Business Operations:

All of the companys financial instruments carried at fair value are included in the table above. All of the above financial instruments are available-for-sale securities except for those held in the deferred compensation trusts, which are trading securities, and derivative assets and liabilities. The company has determined that there was no other-than-temporary impairment of available-for-sale securities with unrealized losses, and the company expects to recover the entire cost basis of the securities. The available-for-sale securities are made up of the following security types as of March 31, 2012: money market funds of $2 million, U.S. agency securities of $237 million, U.S. Treasury securities of $45 million, corporate debt securities of $214 million and other securities of $5 million. As of December 31, 2011, available-for-sale securities consisted of money market funds of $24 million, U.S. agency securities of $237 million, U.S. Treasury securities of $99 million, corporate debt securities of $235 million, and other securities of $5 million. The amortized cost of these available-for-sale securities is not materially different than the fair value. During the three months ended March 31, 2012 and 2011, proceeds from the sales and maturities of available-for-sale securities were $178 million and $149 million, respectively.

As required by ASC 810-10-45, the company has separately disclosed on the face of the Condensed Consolidated Statement of Earnings for all periods presented the amount of net earnings attributable to the company and the amount of net earnings attributable to noncontrolling interests. For the three months ended March 31, 2012 and 2011, earnings attributable to noncontrolling interests were $22.6 million and $21.7 million, respectively, and the related tax effect was $0.3 million and $0.2 million, respectively. Distributions paid to noncontrolling interests were $19.8 million and $27.2 million for the three months ended March 31, 2012 and 2011, respectively. Capital contributions by noncontrolling interests were $1.4 million for the three months ended March 31, 2012.

None of the VIEs are individually material to the companys results of operations, financial position or cash flows except for the Fluor SKM joint venture, a consolidated joint venture formed for the execution of an iron ore joint venture project in Western Australia. As of March 31, 2012, the carrying value of the assets and liabilities of the Fluor SKM joint venture, were $149 million and $173 million, respectively. As of December 31, 2011, the carrying value of the assets and liabilities of the Fluor SKM joint venture were $92 million and $112 million, respectively. The companys results of operations included revenue related to the Fluor SKM joint venture of $585 million and $424 million for the three months ended March 31, 2012 and 2011, respectively.

Cash and cash equivalents were $1.9 billion as of March 31, 2012 compared to $2.2 billion as of December 31, 2011. Cash and cash equivalents combined with current and noncurrent marketable securities were $2.7 billion and $2.8 billion as of March 31, 2012 and December 31, 2011, respectively. Cash and cash equivalents are held in numerous accounts throughout the world to fund the companys global project execution activities. As of March 31, 2012 and December 31, 2011, cash and cash equivalents held outside the United States amounted to $1.4 billion and $1.5 billion, respectively. The company did not consider any cash to be permanently reinvested overseas as of March 31, 2012 and December 31, 2011 and, as a result, has accrued the U.S. deferred tax liability on foreign earnings, as appropriate.

The company holds cash in bank deposits and marketable securities which are governed by the companys investment policy. This policy focuses on, in order of priority, the preservation of capital, maintenance of liquidity and maximization of yield. These investments include money market funds which invest in U.S. Government-related securities, bank deposits placed with highly-rated financial institutions, repurchase agreements that are fully collateralized by U.S. Government-related securities, high-grade commercial paper and high quality short-term and medium-term fixed income securities. During the three months ended March 31, 2012, purchases of marketable securities exceeded proceeds from the sales and maturities by $133 million. During the three months ended March 31, 2011, proceeds from the sales and maturities of marketable securities exceeded purchases by $7 million. The company held current and noncurrent marketable securities of $728 million and $600 million as of March 31, 2012 and December 31, 2011, respectively.

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