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Fluor Corp. Reports Operating Results (10-Q)

November 01, 2012 | About:
10qk

10qk

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Fluor Corp. (FLR) filed Quarterly Report for the period ended 2012-09-30.

Fluor Corporation has a market cap of $9.24 billion; its shares were traded at around $57.66 with a P/E ratio of 15.6 and P/S ratio of 0.4. The dividend yield of Fluor Corporation stocks is 1.2%. Fluor Corporation had an annual average earning growth of 16.9% over the past 10 years. GuruFocus rated Fluor Corporation the business predictability rank of 4.5-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 September 30, 2012: money market funds of $2 million, U.S. agency securities of $166 million, U.S. Treasury securities of $70 million, corporate debt securities of $188 million and other securities of $9 million. As of December 31, 2011, available-for-sale securities consisted of money market funds of $24 million, U.S. agency securities of $238 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 and nine months ended September 30, 2012, proceeds from the sales

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 and nine months ended September 30, 2012, earnings attributable to noncontrolling interests were $28.0 million and $82.3 million, respectively, and the related tax effect was $0.2 million and $0.9 million, respectively. For the three and nine months ended September 30, 2011, earnings attributable to noncontrolling interests were $26.2 million and $74.5 million, respectively, and the related tax effect was less than $0.1 million and $0.8 million, respectively. Distributions paid to noncontrolling interests were $61.9 million and $72.3 million for the nine

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 Australia, which is material to the companys revenue. The companys results of operations included revenue related to the Fluor SKM joint venture of $1.0 billion and $2.5 billion for the three and nine months ended September 30, 2012, respectively, and $407 million and $1.3 billion for the three and nine months ended September 30, 2011, respectively.

Net earnings attributable to Fluor Corporation were $145 million, or $0.86 per diluted share, and $461 million, or $2.72 per diluted share, for the three and nine months ended September 30, 2012, compared to net earnings attributable to Fluor Corporation of $135 million, or $0.78 per diluted share, and $441 million, or $2.51 per diluted share, for the corresponding periods of 2011. In the 2012 periods, there was improved performance in the Industrial & Infrastructure, Oil & Gas and Global Services segments, offset somewhat by lower earnings in the Power and Government segments.

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 nine months ended September 30, 2012, purchases of marketable securities exceeded proceeds from sales and maturities of such securities by $89 million. During the nine months ended September 30, 2011, proceeds from sales and maturities of marketable securities exceeded purchases by $95 million. The company held current and noncurrent marketable securities of $689 million and $600 million as of September 30, 2012 and December 31, 2011, respectively.

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