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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
------ ------
COMMISSION FILE NO. 1-7775
FLUOR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-0740960
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3353 MICHELSON DRIVE, IRVINE, CALIFORNIA 92698
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 975-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common Stock, $0.625 par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the registrant's voting stock held by non-
affiliates was $5,530,525,607 on January 14, 1997, based upon the average
between the highest and lowest sales prices of the registrant's Common Stock
as reported in the consolidated transactions reporting system.
Common Stock, $0.625 par value, outstanding as of January 14, 1997 --
83,921,807 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV incorporate certain information by reference from the
registrant's Annual Report to stockholders for the fiscal year ended October
31, 1996.
Part III incorporates certain information by reference from the registrant's
definitive proxy statement for the annual meeting of stockholders to be held
on March 11, 1997, which proxy statement will be filed no later than 120 days
after the close of the registrant's fiscal year ended October 31, 1996.
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PART I
ITEM 1. BUSINESS.
Fluor Corporation ("Fluor" or the "Company") was incorporated in Delaware in
1978 as a successor in interest to a California corporation of the same name
that was originally incorporated in 1924. Its executive offices are located at
3353 Michelson Drive, Irvine, California 92698, telephone number (714) 975-
2000.
Through Fluor Daniel, Inc. and other domestic and foreign subsidiaries, the
Company provides design, engineering, procurement, construction, maintenance
and other diversified services on a worldwide basis to an extensive range of
industrial, commercial, utility, natural resources, energy and governmental
clients.
The Company maintains investments in coal-related businesses through its
ownership of A. T. Massey Coal Company, Inc. ("Massey").
A summary of the Company's operations and activities by business segment and
geographic area is set forth below.
ENGINEERING AND CONSTRUCTION
The Fluor Daniel group of domestic and foreign companies ("Fluor Daniel")
provides a full range of design, engineering, procurement, construction,
maintenance and other diversified services to clients in a broad range of
industrial and geographic markets on a worldwide basis. The types of services
provided by Fluor Daniel, directly or through companies or partnerships
jointly owned or affiliations with other companies, include: feasibility
studies, conceptual design, detail engineering, procurement, project and
construction management, construction, maintenance, plant operations,
technical support, project finance, quality assurance/quality control, start-
up assistance, site evaluation, licensing, consulting, construction equipment
sales and leasing, temporary technical and non-technical staffing and
environmental services.
Fluor Constructors International, Inc. ("Fluor Constructors") is organized
and operated separately from Fluor Daniel. Fluor Constructors provides
construction management, construction and maintenance services in the United
States and Canada. Fluor Constructors is the Company's union construction arm.
The engineering and construction business is conducted under various types
of contractual arrangements, including cost reimbursable (plus fixed or
percentage fee), all-inclusive rate, unit price, fixed or maximum price and
incentive fee contracts. Contracts are either competitively bid and awarded or
individually negotiated. While, in terms of dollar amount, the majority of
contracts are of the cost reimbursable type, there has been an increase in the
volume of cost-reimbursable contracts with incentive-fee arrangements and in
the volume of fixed or unit price contracts. In certain instances, the Company
guarantees facility completion by a scheduled acceptance date and/or
achievement of certain acceptance and performance testing levels. Failure to
meet any such schedule or performance requirements could result in additional
costs and the amount of such additional costs could exceed project profit
margins.
The markets served by the business are highly competitive and for the most
part require substantial resources, particularly highly skilled and
experienced technical personnel. A large number of companies are competing in
the markets served by the business. Competition is primarily centered on
performance and the ability to provide the design, engineering, planning,
management and project execution skills required to complete complex projects
in a safe, timely and cost efficient manner. The engineering and construction
business derives its competitive strength from its diversity, reputation for
quality, cost-effectiveness, worldwide procurement capability, project
management expertise, geographic coverage, ability to meet client requirements
by performing construction on either a union or open shop basis, ability to
execute projects of varying sizes, strong safety record and lengthy experience
with a wide range of services and technologies.
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Design and engineering services provided by the engineering and construction
business involve the continual development of new and improved versions of
existing processes, materials or techniques, some of which are patented.
However, none of the existing or pending patents held or licensed by the
business are considered essential to operations. Generally, the development
and improvement of processes, materials and techniques are performed as part
of design and engineering services in connection with the projects undertaken
for various clients.
FLUOR DANIEL
Fluor Daniel's operations are organized into geographical, industry and
specialized groups responsible for identifying and capitalizing on
opportunities in their market segments. Geographical groups include Asia
Pacific, the Americas, and Europe, Africa and the Middle East which provide
geographic expertise and capability. Industry groups include Process,
Industrial, and Power and Government. Specialized groups include Diversified
Services and Sales and Marketing. The Sales and Marketing Group includes
strategic planning and project finance and provides sales and marketing
support and assistance to all of the other groups. The industry and
Diversified Services groups are described in further detail below.
Individual operating companies within the groups focus on specific clients,
industries and markets. The operating companies rely on a network of globally
located engineering offices to provide resources and expertise in support of
project execution worldwide.
While the United States will remain an important market for Fluor Daniel's
services, increasingly the largest share of opportunities are located outside
the United States. Demand for higher living standards is driving strong
economic growth in developing economies, particularly in the Asia Pacific and
Latin American regions. Expansion of basic industries is increasing
fundamental energy requirements and infrastructure needs. Globalization of
markets and geopolitical change is also stimulating strategic investments in
new production facilities in these emerging markets.
The operations of Fluor Daniel are detailed below by industry group:
Process
Services provided by the Process Group support clients through the following
operating companies: Petroleum and Petrochemicals; Production and Pipelines;
and Chemicals, Plastics and Fibers.
During fiscal 1996, Process Group contract awards included: engineering,
procurement and construction management for a hydrodesulfurization unit in
Korea, a gas turbine generator in the Philippines, an ethylene plant expansion
in Saudi Arabia, a fluid catalytic cracker unit in Texas, a L.S.D. hydrofiner
in Canada, an export terminal expansion project in Scotland, a pipeline and
export terminal in Azerbaijan, a 180 mile ethylene pipeline in Texas, a LNG
upstream facility, offshore gas platform, subsea and onshore pipelines in
Trinidad, a refrigerated storage tank in New Hampshire, a carbon graphite
expansion in South Carolina, and a resin coating plant in Great Britain;
engineering, procurement, and construction for debottlenecking of existing
facilities and an expanded lube oil plant in Indonesia, an upgrade of a
residue hydrocracker in the Slovak Republic, a polymer extrusion expansion in
Louisiana, a PTA plant in the Netherlands, a new PET facility in Mississippi;
engineering and procurement for a CDU unit revamp in Poland, a gas plant
modification in England, a gas field development including low temperature
separation unit compression and control facilities in the Netherlands, a 15
mile gas pipeline with terminal in Mexico, an acrylate facility expansion in
Texas; construction management for a refinery modernization in Poland, a lube
oil revamp in Germany, an ethylene unit revamp in Louisiana, a paraxylene
decoupling and revamp in Alabama, a paraxylene unit in Korea, a sufactant
plant in Asia, and expansion and renovation of a paint pigments plant in
Delaware; engineering for numerous maintenance shutdowns at various locations
in the USA, a propylene recovery project in Pennsylvania, an expansion of six
existing crude oil pipeline pump stations in Colombia, an ethoxics and ethanol
amines in Louisiana, an organic acids plant in Louisiana, a nylon facility in
China, a polylactide facility in Nebraska, a filter products facility in
Tennessee, a
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carbon black expansion in China, and a latex relocation in Thailand; project
management for an offshore gas compression platform and subsea pipeline in
Vietnam; construction and maintenance for evergreen small capital construction
services in Tennessee and South Carolina, and for various chemical and fiber
plants throughout the USA.
Ongoing Projects include: engineering, procurement and construction
management for an increase in capacity of two hydrodesulfurization units and
associated pipeline in Venezuela, a methanol plant in Norway, and a gas oil
hydrotreater in California, a gas injection and underground storage facility
in the Netherlands, crude oil import/export pipeline, tanks, oil pump stations
and terminal in Lithuania, a hydrotreater in Canada, and a polystyrene plant
expansion in Louisiana; engineering, procurement, and construction for a cat
feed hydrotreater in Louisiana, a fluid catalytic cracker unit in Korea, a
vinyl acetate monomer plant in Singapore, a refinery upgrade in the
Netherlands, a new film machine in an existing plant in New York, a
hydrochlorofluorocarbon plant in Kentucky, a polypropylene plant expansion in
Pennsylvania, a polymer expansion facility in Virginia, and a hydrogen
peroxide plant in Texas; engineering, procurement, construction, and program
management for a petrochemical complex in Kuwait; engineering and procurement
for a revamp of two paraxylene units in Alabama, a new propylene splitter unit
in Pennsylvania, a 354 kilometer pipeline with laterals from Mariquita to Cali
in Colombia, an oil production facility in Gabon, and four offshore platforms
in Venezuela; procurement and construction management for general facilities
and utilities of a petrochemical complex in Kuwait; engineering for three
geothermal power generation facilities in Indonesia, a metaxylene unit in
Texas, an early production system equipment and an oil field production
facility in Colombia, a CAT feed hydrotreater in Louisiana, a petroleum
refinery expansion in Abu Dhabi, a receiving terminal, pump stations, meter
stations, pipelines and export terminal in Azerbaijan, a polyethylene plant in
Texas, a debottlenecking project in Indonesia, evergreen support in Canada,
and a filter products facility in Tennessee; project management for a 200,000
barrel a day production facility with infrastructure, power generation and an
800 mile pipeline and single point mooring loading terminal in Africa, and a
nylon tire cord plant in India; construction management for an expansion and
renovation of a paint pigments plant in Delaware; construction and maintenance
for evergreen small capital construction services in Tennessee and South
Carolina; construction for an oxo alcohol and a chemical plant both in
Louisiana, and a chemical line conversion and waste water treatment plant both
in South Carolina; evergreen capital construction and maintenance services for
various chemical and fiber plants throughout the USA; services alliance in
Texas, and numerous small capital projects at various locations in the USA.
Projects completed in fiscal 1996 included: engineering, procurement and
construction management for a refinery in Thailand, a fatty acids plant in the
Philippines, modifications of a gasoline reformulation refinery in California,
a silanes plant in Germany, a flue gas desulfurization and synthetic oil
abatement project in Canada, a flue gas desulphurization, synthetic oil
abatement project in Alberta, Canada, a single point mooring and submarine
pipeline in Korea, a polymer plant in Mexico, a chemicals intermediates plant
in Spain, a cogeneration project in Kansas, a reformulated gasoline project
and a clean fuels program in California, and a polymer plant capacity increase
in Mexico; engineering, procurement, and construction for a polymer plant in
North Carolina, a chemical plant debottlenecking project in North Carolina, a
polymer plant in England, and a hydrogen peroxide plant in Canada; engineering
and procurement for modifications of a petroleum loading marine terminal in
Alaska, a reformer unit revamp in Texas, an upgrade and expansion of a parex
unit in Puerto Rico, a reformulated fuels project at a refinery in California,
a chlor-alkali/ethylene expansion of a petrochemical plant in Saudi Arabia,
expansion and renovation of a paint pigments plant in Delaware, and a
polyethylene plant in Singapore; engineering for a polyethylene plant in
Texas, a pipeline and pump systems in Alaska, refinery unit expansions and
upgrades in Kansas, a revamp and modernization of a natural gas plant in
Hungary, a phosphorus plant in Germany, gas pipeline and distribution systems
in Chile and Argentina, an LPG facility in China, and an organic acid plant
expansion in Texas; and inspection services for an existing pipeline from
Midland to Houston, Texas and existing pipelines in Oklahoma, Kansas and
Missouri.
Industrial
Services provided by the Industrial Group include a broad range of services
provided to support clients through the following operating companies: Mining
and Metals; Automotive and General Manufacturing;
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PharmBio and Chemicals; Food, Beverage and Consumer Products; Commercial and
Institutional Facilities; ADP Fluor Daniel which provides professional
services in architecture, engineering and construction management specializing
in the microelectronics market; Infrastructure; Telecommunications; Pulp and
Paper; and PACE, the operating company dedicated to serving Fluor Daniel's
alliance with Procter & Gamble.
During fiscal 1996, Industrial Group acquisitions included: Allen & Philp
Architects, Inc., a privately held United States company providing
professional services in architecture to the hospitality market; and Marshall
Contractors, Inc., a privately held United States company providing
professional services in construction management to microelectronics,
pharm/biotech, commercial & institutional, manufacturing, food & beverage, and
chemicals, plastics and fibers markets.
During fiscal 1996, Industrial Group contract awards included: engineering,
procurement and construction for a copper and gold mine in Indonesia, a
dyno/tank farm expansion in South Carolina, an ethanol facility in Canada, a
wafer facility in the Philippines, a vaccine manufacturing facility in
Maryland, and a food processing plant expansion in Tennessee; engineering,
procurement and construction management for a gold heap leach expansion, a
copper mine addition, a grass roots copper mine and a potassium chloride plant
expansion in Chile, a battery acid plant in Saudi Arabia, an automotive
transaxle facility expansion in Ohio, a wafer facility in Washington, a fine
chemicals retrofit project in Tennessee, a bulk pharmaceuticals manufacturing
facility in Ireland, a vitamin manufacturing facility in New Jersey, expansion
and rebuild of various snack food plants, a multi-product personal care
facility in China, an alliance with a client in the aluminum industry in the
United States, and cellular site buildout for eight cities in the United
States; engineering and procurement for a petro-sulphur forming plant in
Canada, a food additive processing plant in Ohio; engineering and construction
of pet foods facilities and a tile expansion facility in Greenville,
Mississippi; engineering and construction management of a propylated starch
facility in Indianapolis; construction management for a specialty steel mill
in Pennsylvania, a parking and athletic facility in Florida, an HVAC upgrade
to a distribution facility in Mississippi, the retail expansion for a
petroleum company in Colorado, a convention center in Arkansas, a conferencing
center in Florida, a hotel renovation in California, a commercial office
building and resort complex in the Philippines, a hotel in Indonesia and the
major infrastructure for a university in Saudi Arabia; engineering for a
grassroots micro mill in Nevada, grassroots gold mine in Venezuela, melt shop
facility in Indiana, general services steel mills in the United States, SX/EW
copper mine in Chile, aluminum recycle mill in the United States, a grassroots
copper mine in Canada, tool hook-up in a wafer facility in Thailand, a vitamin
manufacturing facility in Texas, an engineering alliance for a multi-product
facility in California, a potent compound bulk manufacturing facility in
Georgia, a grass roots solid dosage pharmaceutical plant in Oklahoma; an
engineering study for a tableting facility in the former Soviet Union, a high
speed rail project in Florida; construction of a distribution warehouse in
South Carolina, a camcorder/laptop battery facility in Florida and a project
management recompetition for rail transit in Los Angeles, California.
Ongoing projects include: engineering, procurement and construction for a
gold mine in Chile, a gold mine in Papua New Guinea, a dry conversion process
facility in North Carolina, rebuilding a carpet manufacturing facility in
Georgia, a contract manufacturing facility and corporate headquarters in North
Carolina, a packaging and distribution space in a brown sugar facility in
Gainesville, Florida, a paper machine expansion in Georgia and an Emergency
911 response system for Chicago, Illinois; engineering, procurement and
construction management for copper gold mine in Argentina, an iron ore
pelletizing processing facility in Brazil, a copper mine expansion in
Indonesia, an automotive assembly plant in Argentina, apparel distribution
centers at various locations throughout the United States, a silicon wafer
facility in Texas, production and packaging of an english muffin plant in
Greenwich, Connecticut, a beltway around Denver, Colorado; engineering and
construction of an engine plant expansion in Ohio; engineering and
construction management for a hotel renovation in Indonesia, a sports facility
in South Carolina and a court/detention center in Texas, a vaccine
manufacturing plant in North Carolina; construction management for a nickel
mine expansion in Indonesia, a prison project in California, the renovation of
a turbine facility in South Carolina, a tobacco processing plant in North
Carolina, a tobacco facility in the Netherlands, a train station terminal
building in Kyoto, Japan and a multi-product personal care facility in the
Philippines; construction for a personal care product plant in Puerto Rico;
engineering for an iron mine in
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Australia; maintenance services for an automotive facility in Tennessee;
project management for rail stations for the Federal Transportation
Administration in New York City, and for highway construction in Orange
County, California.
Projects completed in fiscal 1996 included: engineering, procurement and
construction for a blast furnace coal injection in Indiana, a gelcaps facility
in North Carolina; engineering, procurement and construction management of a
copper concentrator expansion in Chile, copper expansion and pipeline in
Chile, a metal aperture screen manufacturing facility in New York, a fine
chemicals manufacturing plant in Arkansas, a sodium cromoglycate facility in
the United Kingdom, a utilities upgrade and building expansion in California,
plant construction and renovation of cola bottling plants, a dextrose
expansion project in Illinois, expansion and rebuild of various snack food
plants in locations throughout the United States, two de-inking facilities and
a paper recycle facility, all in the United Kingdom and a paper products plant
in Korea; engineering and construction management for an engine manufacturing
line relocation in New Jersey and an expansion of a spice manufacturing
facility in Australia; engineering and construction of a tile expansion
facility in Greenville, Mississippi, corn processing plants and several
consumer plants in Ohio; construction management of a prison project in Texas,
an automotive assembly plant in Alabama, an HVAC upgrade to a distribution
facility in Mississippi; engineering for a copper smelter and refinery in
Indonesia, a washing machine plant in China, a wafer fabrication facility in
Utah, a paper machine rebuild in Georgia, and a paper machine addition in
Wisconsin, a shampoo facility in China; condition assessment for facilities at
twelve military installations at various locations throughout the United
States; engineering study for an automobile manufacturer to determine the
feasibility of disassembling and relocation of two North American automobile
manufacturing facilities to China; project management for rail transit for the
Los Angeles County Metropolitan Transportation Authority in California.
Power and Government
The Power and Government Group provides services to public electric
utilities, private power companies, and the United States government. The
operating companies in the group are Power Generation, Duke/Fluor Daniel,
Power Services, Government Services, Fluor Daniel Fernald and Fluor Daniel
Hanford.
During fiscal 1996, Power and Government Group contract awards included:
engineering, procurement, and construction for a 300 megawatt combined cycle
plant in Saudi Arabia; engineering, procurement, and construction management
for a cogeneration plant in Great Britain; maintenance and support for a 2 x
825 megawatt nuclear station in Maryland; program maintenance and support for
the fossil plants of a California utility; renewal of maintenance and support
services for the fossil and gas plants of a utility in Texas, Arkansas,
Louisiana, and Mississippi and a nuclear plant for a utility in Missouri;
operations and maintenance for a 151 megawatt facility in Delaware; management
and integration contractor for a major United States Department of Energy
("DOE") facility ("Hanford") in Washington; additional DOE funding for
engineering and design for nuclear materials storage plant under a
reconfiguration project in Nevada; and engineering for the waste vitrification
program at Hanford.
Ongoing projects include: procurement, engineering, construction management,
and start up for a 2 x 600 megawatt coal fired power plant in Indonesia;
operations and maintenance for a 175 megawatt diesel system in Indonesia;
engineering for a 1,200 megawatt phased combined cycle gas facility in Saudi
Arabia; engineering, procurement, and construction for a 160 megawatt
cogeneration plant in Indiana, a 240 megawatt combined cycle cogeneration
plant in Louisiana, rebuilding of a fire damaged 650 megawatt combined cycle
facility in Virginia, and a 75 megawatt bottoming cycle and 69 kilovolt
transmission line in Illinois; environmental remediation management for the
DOE former uranium processing plant in Ohio (the "Fernald Project");
engineering and construction management for various radar and weather stations
located throughout the United States for the National Oceanic and Atmospheric
Administration; engineering for a laboratory facility upgrade in Illinois, a
DOE waste vitrification plant at Hanford, the reconfiguration of the DOE
weapons program, the DOE National Engineering Laboratories in Idaho, and a
waste handling facility for the DOE at Hanford; operations and maintenance for
a 130 megawatt cogeneration facility in Virginia; management and operation
services for the Naval Petroleum and Oil Shale Reserves program for the DOE in
Colorado, Utah, and Wyoming; maintenance
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and support for a rebuild of a power plant in Texas; maintenance for a 3 x
1,270 megawatt nuclear plant in Arizona, fossil and gas generation plants in
Texas, Georgia, Louisiana, Arkansas, Mississippi, Australia, South Africa,
Florida, and Tennessee and for nuclear plants in South Carolina, Kansas,
Missouri, Virginia, Texas and Arizona.
Projects completed in fiscal 1996 included: engineering and construction for
emission monitoring equipment for various power generation sites of utilities
in Arkansas, Louisiana, Mississippi, and Texas; engineering, procurement, and
construction for a fuel cell pilot plant and a 48 megawatt combined cycle
plant in California; engineering, design, procurement and construction for a
385 megawatt pulverized coal plant in South Carolina; engineering,
procurement, construction management and start up assistance for coal
switching modifications to a coal fired facility in Indiana; engineering,
procurement, construction, and construction management for a waste to energy
facility in New York; engineering for a nuclear utility in Illinois;
engineering and construction management at a significant number of locations
throughout the United States for radar and weather stations for the National
Oceanic and Atmosphere Administration; and for a waste handling facility for
DOE in Washington.
Diversified Services
The Diversified Services Group was created in fiscal 1994 to expand certain
services provided by Fluor Daniel beyond the boundaries of the traditional
engineering and construction project cycle. These services have typically been
provided to projects in support of Fluor Daniel and have developed into core
skills. They are now offered on a stand alone basis to new clients and markets
as well as traditional clients and markets external to Fluor Daniel.
Established businesses in the group which have become more focused on
external markets include the following operating companies: Facility & Plant
Services, which provides plant maintenance, management and efficiency services
as well as plant maintenance software; TRS Staffing Solutions, which provides
technical, professional, and clerical temporary personnel as well as permanent
placements; American Equipment Company, which sells, leases, and outsources
equipment for construction and industrial needs; Environmental Services, which
provides environmental engineering and construction services; and Fluor Daniel
GTI, Inc., which provides environmental remediation services. Operating
companies focused on creating new businesses by leveraging core skills include
Fluor Daniel Technologies, which uses Fluor Daniel's extensive technical
expertise to evaluate new technologies for investment and commercialization;
and Acquion, a provider of procurement outsourcing services and electronic
catalog and ordering services that focus on streamlining the procurement work
process for clients.
During fiscal 1996, Diversified Services Group acquisitions included: the
previously reported acquisition of 55% of Groundwater Technology, Inc., an
environmental remediation company which was merged with Fluor Daniel
Environmental Services, Inc. to form Fluor Daniel GTI, Inc.; and the
acquisition of 100% of S & R Equipment Co., Inc., an Ohio based equipment
rental company; TA Group, a plant maintenance company based in the United
Kingdom; Phoenix Contracting Pty. Limited, an Australian based permanent and
temporary placement services company; and The Consol Group, Inc. and its
affiliated companies, another permanent and temporary placement services
company located in New Hampshire and doing business primarily in the New
England states.
During fiscal 1996, Diversified Services Group new awards
included: maintenance for a vehicle manufacturing facility in Argentina,
computer manufacturing plants in Arizona, Colorado, and California and
computer manufacturing plants in Florida, Texas, North Carolina; computerized
maintenance system for a steel maker in Utah and a glass products manufacturer
at various locations in the U.S.; computerized maintenance system and training
services for a refinery in Asia; engineering, procurement, and construction of
hazardous waste recycling facilities for a waste management company at various
locations in the U.S.
Ongoing projects include: a large equipment outsourcing contract at a
petrochemical plant in Texas; maintenance for a tire manufacturing facility in
Tennessee, a petrochemical plant in Texas, and a refinery in Mississippi;
environmental investigation, feasibility studies, and remediation for the
United States Army
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Environmental Center, the United States Army Corps of Engineers, and the United
States Environmental Protection Agency; engineering, procurement, and
construction management for an environmental remediation program for a toxic
waste site in Indiana; environmental investigation and evaluation at U.S.
military facilities in Hawaii, Guam and Puerto Rico; and site remediation at a
plant in Illinois.
Projects completed in fiscal 1996 included: environmental investigation and
remediation plan services for a toxic waste site in New York; and environmental
investigation, remediation design and implementation services for a chemical
waste site in Ohio.
FLUOR CONSTRUCTORS
Fluor Constructors is organized and operated separately from Fluor Daniel.
Fluor Constructors provides unionized construction management, construction and
maintenance services in the United States and Canada, both independently and as
a subcontractor to Fluor Daniel, and global support to all Fluor Daniel
industry and regional groups.
During fiscal 1996, Fluor Constructors contract awards included: construction
and construction management services for a steam turbine project in Indiana and
a wafer fabrication facility located in Camas, Washington; and maintenance and
outage support for a nuclear power plant in Maryland.
Ongoing projects include: maintenance and outage support at various plant
sites for a nuclear power plant in Missouri and for fossil fuel power plants in
Louisiana, Mississippi and Arkansas.
Projects completed in fiscal 1996 included: construction and construction
management for a reformulated gasoline project at a refinery in California, a
blast furnace coal injection facility in Indiana, a hydrocracker revamp for a
refinery in Delaware, a refrigerant production facility in Kentucky, a sulfur
dioxide unit and hydrogen peroxide project in Canada, a steam turbine project
in Indiana, and a polypropylene plant expansion in Pennsylvania, construction
management of a potable water supply system in Nevada, an Emergency 911
response system in Illinois and a waste to energy boiler replacement in New
York.
BACKLOG
Fluor Daniel's operating companies are organized into four major industry
groups: Process, Industrial, Power and Government, and Diversified Services.
The following table sets forth the consolidated backlog of Fluor's
engineering and construction segment at October 31, 1996 and 1995 by industry
group:
1996 1995
------------ ------------
(IN MILLIONS OF DOLLARS)
Industrial...................................... $ 6,496 $ 4,516
Process......................................... 4,903 6,671
Power and Government............................ 3,621 3,275
Diversified Services............................ 737 263
------------ ------------
$ 15,757 $ 14,725
============ ============
The following table sets forth the consolidated backlog of Fluor's
engineering and construction segment at October 31, 1996 and 1995 by region:
1996 1995
------------ ------------
(IN MILLIONS OF DOLLARS)
United States.................................. $ 7,326 $ 6,666
Asia Pacific................................... 4,402 3,303
Europe, Africa and Middle East................. 2,677 3,088
The Americas................................... 1,352 1,668
------------ ------------
$ 15,757 $ 14,725
============ ============
Estimated portion not to be performed during fiscal 1997: 33%
==
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The dollar amount of the backlog is not necessarily indicative of the future
earnings of Fluor related to the performance of such work. Although backlog
represents only business which is considered to be firm, there can be no
assurance that cancellations or scope adjustments will not occur. Due to
additional factors outside of Fluor's control, such as changes in project
schedules, Fluor cannot predict with certainty the portion of its October 31,
1996, backlog to be performed subsequent to fiscal 1997.
Approximately $1.1 billion of the Power and Government backlog at October
31, 1996, is attributable to the DOE Fernald Project and subject to government
funding on an annual basis. Additionally, approximately $1.0 billion of such
backlog is attributable to the DOE Hanford Project, and certain governmental
authorizations to expend this amount have been received. An additional $1.0
billion of the Power and Government backlog is attributable to the Paiton
private power project. At October 31, 1996, approximately $1.0 billion of the
Industrial Group backlog is attributable to the Batu Hijau copper and gold
mine project for Newmont Gold in Indonesia.
COAL INVESTMENT
A. T. Massey Coal Company, Inc., which is headquartered in Richmond,
Virginia, and its subsidiaries conduct Massey's coal-related businesses and
are collectively referred to herein as the "Massey Companies."
The Massey Companies produce, process and sell bituminous, low sulfur coal
of steam and metallurgical grades from 18 mining complexes (16 of which
include preparation plants) located in West Virginia, Kentucky and Tennessee.
At October 31, 1996, one of the mining complexes was still in development and
not yet producing coal. A second mining complex is idle.
Operations at certain of the facilities are conducted in part through the
use of independent contract miners. The Massey Companies also purchase and
resell coal produced by unrelated companies. Steam coal is used primarily by
utilities as fuel for power plants. Metallurgical coal is used primarily to
make coke for use in the manufacture of steel.
For each of the three years in the period ended October 31, 1996, the Massey
Companies' production (expressed in thousands of short tons) of steam coal and
metallurgical coal, respectively, was 17,578 and 13,616 for fiscal 1996,
15,790 and 11,634 for fiscal 1995, and 17,120 and 7,333 for fiscal 1994. Sales
(expressed in thousands of short tons) of coal produced by the Massey
Companies were 31,091 for fiscal year 1996, 27,410 for fiscal 1995 and 23,835
for fiscal 1994.
A large portion of the steam coal produced by the Massey Companies is sold
to domestic utilities under long-term contracts. Metallurgical coal is sold to
both foreign and domestic steel producers. Approximately 64% of the Massey
Companies' fiscal 1996 coal production was sold under long-term contracts, 60%
of which was steam coal and 40% of which was metallurgical coal. Approximately
12% of the coal tonnage sold by the Massey Companies in fiscal 1996 was sold
outside of North America.
Massey is among the five largest marketers of coal in the United States. The
coal market is a mature market with many strong competitors. Competition is
primarily dependent upon coal price, transportation cost, producer reliability
and characteristics of coal available for sale. The management of Massey
considers Massey to be generally well-positioned with respect to these factors
in comparison to its principal competitors.
Recently passed acid rain legislation is generally anticipated to benefit
prices for low sulfur coal. Massey intends to continue to evaluate and pursue,
in appropriate circumstances, the acquisition of additional low sulfur coal
reserves.
The Coal Industry Retiree Health Benefits Act of 1992 (the "Act") provides
that certain retired coal miners who were members of the United Mine Workers
of America, along with their spouses, are guaranteed health care benefits. The
Massey Companies' obligation under the Act is currently estimated to aggregate
approximately
8
$49 million which will be recognized as expense as payments are assessed. The
amount expensed during fiscal 1996 approximated $2.0 million.
The management of the Massey Companies estimates that, as of October 31,
1996, the Massey Companies had total recoverable reserves (expressed in
thousands of short tons) of 1,549,205; 620,254 of which are assigned
recoverable reserves and 928,951 of which are unassigned recoverable reserves;
and 1,128,418 of which are proven recoverable reserves and 420,787 of which are
probable recoverable reserves.
The management of the Massey Companies estimates that approximately 35% of
the total reserves listed above consist of reserves that would be considered
primarily metallurgical grade coal. They also estimate that approximately 65%
of all reserves contain less than 1% sulfur. A portion of the steam coal
reserves could be beneficiated to metallurgical grade by coal preparation
plants, and substantially all of the metallurgical coal reserves could be sold
as high quality steam coal, if market conditions warrant.
"Reserves" means that part of a coal deposit which could be economically and
legally extracted or produced at the time of the reserve determination.
"Recoverable reserves" means coal which is recoverable by the use of existing
equipment and methods under federal and state laws now in effect. "Assigned
recoverable reserves" means reserves which can reasonably be expected to be
mined from existing or planned mines and processed in existing or planned
plants. "Unassigned recoverable reserves" means reserves for which there are no
specific plans for mining and which will require for their recovery substantial
capital expenditures for mining and processing facilities. "Proven recoverable
reserves" refers to deposits of coal which are substantiated by adequate
information, including that derived from exploration, current and previous
mining operations, outcrop data and knowledge of mining conditions. "Probable
recoverable reserves" refers to deposits of coal which are based on information
of a more preliminary or limited extent or character, but which are considered
likely.
OTHER MATTERS
ENVIRONMENTAL, SAFETY AND HEALTH MATTERS
The Massey Companies are affected by and comply with federal, state and local
laws and regulations relating to environmental protection and plant and mine
safety and health, including but not limited to the federal Surface Mining
Control and Reclamation Act of 1977; Occupational Safety and Health Act; Mine
Safety and Health Act of 1977; Water Pollution Control Act, as amended by the
Clean Water Act of 1977; Black Lung Benefits Revenue Act of 1977; and Black
Lung Benefits Reform Act of 1977. It is impossible to predict the full impact
of future legislative or regulatory developments on such operations, because
the standards to be met, as well as the technology and length of time available
to meet those standards, continue to develop and change.
In fiscal 1996, Fluor expended approximately $4.9 million to comply with
environmental, health and safety laws and regulations in connection with its
coal investment, none of which were capitalized. Fluor anticipates making $8.0
million and $7.8 million in such non-capital expenditures in fiscal 1997 and
1998, respectively. Of these expenditures, $4.0 million, $5.6 million and $5.7
million for fiscal 1996, 1997 and 1998, respectively, were or are anticipated
to be for surface reclamation. Existing financial reserves are believed to be
adequate to cover actual and anticipated surface reclamation expenditures.
Other expenditures will be expensed as incurred.
Other
In 1986, the California North Coast Regional Water Quality Control Board for
the State of California requested that the Company perform a site investigation
of a property in Northern California designated as a hazardous waste site under
the California Hazardous Waste Control Act. The Company formerly owned the
property. The California Environmental Protection Agency has assumed lead
agency status for any required remedial action at the site. The Company signed
a Consent Order to perform a remedial investigation/feasibility study that will
determine the extent of contamination for purposes of determining the remedial
action required to remedy and/or remove the contamination.
9
In 1994, Fluor completed the sale of its lead business. The sale by Fluor of
its lead business included St. Joe Minerals Corporation ("St. Joe") and its
environmental liabilities for several different lead mining, smelting and
other lead related environmental sites. As a condition of the St. Joe sale,
however, Fluor retained responsibility for certain non-lead related
environmental liabilities arising out of St. Joe's former zinc mining and
smelting division, but only to the extent that such liabilities are not
covered by St. Joe's comprehensive general liability insurance. These
liabilities arise out of three zinc facilities located in Bartlesville,
Oklahoma, Monaca, Pennsylvania and Balmat, New York (the "Zinc Facilities").
In 1987, St. Joe sold its zinc mining and smelting division to Zinc
Corporation of America ("ZCA"). As part of the sale agreement, St. Joe and
Fluor agreed to indemnify ZCA for certain environmental liabilities arising
from operations conducted at the Zinc Facilities prior to the sale. During
fiscal year 1993, ZCA made claims under this indemnity as well as under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") against St. Joe for past and future environmental expenditures at
the Zinc Facilities. In fiscal year 1994, ZCA filed suit against St. Joe and
Fluor, among others, seeking compensation for environmental expenditures at
the Zinc Facilities. In fiscal year 1994, Fluor and St. Joe, among others,
executed a settlement agreement with ZCA which, among other things, cancels
the indemnity previously provided to ZCA and limits environmental expenditures
at the Zinc Facilities for which St. Joe would be responsible to no more than
approximately $10 million. Expenses incurred and payments made under the
settlement agreement are expected to be made over a period of at least five
years from the date of settlement.
In fiscal 1996, Fluor and St. Joe prosecuted cost recovery claims against
another potentially responsible party for the Bartlesville facility. The
Federal District Court for Oklahoma rendered Judgment in favor of Fluor and
St. Joe, among others, which Judgment has become final and non-appealable. The
District Court's Judgment further reduces Fluor and St. Joe's liability with
respect to the Bartlesville facility. In addition, St. Joe has initiated legal
proceedings against certain of its insurance carriers alleging that the
investigative and remediation costs, for which St. Joe is or may be
responsible, including costs incurred prior to the sale of St. Joe and costs
related to the Zinc Facilities, are covered by insurance. A portion of any
recoveries received from the insurance carriers would be, pursuant to the St.
Joe sale agreement, for the benefit of Fluor. In January 1995, St. Joe
executed a settlement agreement with one of its primary insurance carriers
that provided coverage for a minor portion of the applicable coverage periods.
In May 1995, St. Joe received a favorable ruling from the Orange County
Superior Court which ordered St. Joe's other primary insurance carrier to
provide a defense to St. Joe for certain environmental liabilities, including
the Zinc Facilities. This insurer has appealed the Superior Court's order. St.
Joe continues to pursue its other primary insurance carrier for additional
payments. Inasmuch as the insurance proceedings remain in the early stages of
litigation, no credit or offset (other than for amounts actually received in
settlement or judgment), has been taken into account by Fluor in establishing
its reserves for future environmental costs.
The Company believes, based upon present information available to it, that
its reserves with respect to future environmental costs are adequate and such
future costs will not have a material effect on the Company's consolidated
financial position, results of operations or liquidity. However, the
imposition of more stringent requirements under environmental laws or
regulations, new developments or changes regarding site cleanup costs or the
allocation of such costs among potentially responsible parties, or a
determination that the Company is potentially responsible for the release of
hazardous substances at sites other than those currently identified, could
result in additional expenditures or the provision of additional reserves in
expectation of such expenditures.
NUMBER OF EMPLOYEES
The following table sets forth the number of salaried and craft/hourly
employees of Fluor and its subsidiaries engaged in Fluor's business segments
as of October 31, 1996:
SALARIED CRAFT/HOURLY TOTAL
-------- ------------ ------
Engineering and Construction.................... 26,568 23,084 49,652
Coal............................................ 946 1,863 2,809
------ ------ ------
27,514 24,947 52,461
====== ====== ======
10
OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
The financial information for business segments and geographic areas is
included in the Operations by Business Segment and Geographic Area section of
the Notes to Consolidated Financial Statements in Fluor's 1996 Annual Report
to stockholders, which section is incorporated herein by reference.
ITEM 2. PROPERTIES.
Major Facilities
Operations of Fluor and its subsidiaries are conducted in both owned and
leased properties. In addition, certain owned or leased properties of Fluor
and its subsidiaries are leased or subleased to third party tenants. The
following table describes the general character of the major existing
facilities, exclusive of mines, coal preparation plants and their adjoining
offices:
LOCATION INTEREST
-------- --------
Corporate Headquarters:
Irvine, California................................................. Leased
Engineering and Construction Offices:
Alberton, South Africa............................................. Leased
Al Khobar, Saudi Arabia (Dhahran area)............................. Owned
Amherst, New Hampshire............................................. Leased
Anchorage, Alaska.................................................. Leased
Appleton, Wisconsin................................................ Leased
Arlington, Texas................................................... Leased
Arlington, Virginia................................................ Leased
Asturias, Spain.................................................... Leased
Austin, Texas...................................................... Leased
Bakersfield, California............................................ Leased
Bangkok, Thailand.................................................. Leased
Beijing, People's Republic of China................................ Leased
Bergen op Zoom, Netherlands........................................ Leased
Bogota, Columbia................................................... Leased
Brisbane, Australia................................................ Leased
Budapest, Hungary.................................................. Leased
Caguas, Puerto Rico................................................ Owned
Calgary, Canada.................................................... Leased
Camberley, England................................................. Leased
Caracas, Venezuela................................................. Leased
Charlotte, North Carolina.......................................... Leased
Charleston, West Virginia.......................................... Leased
Chesapeake, Virginia............................................... Leased
Chicago, Illinois.................................................. Leased
Cincinnati, Ohio................................................... Leased
Columbia, Maryland................................................. Leased
Corpus Christi, Texas.............................................. Leased
Dallas, Texas...................................................... Leased
Deer Park, Texas................................................... Leased
Dubai, United Arab Emirates........................................ Leased
Dusseldorf, Germany................................................ Leased
East Providence, Rhode Island...................................... Leased
Elmhurst, Illinois................................................. Leased
11
LOCATION INTEREST
-------- --------
Florham Park, New Jersey.................................. Leased
Fort Lauderdale, Florida.................................. Leased
Fort Wayne, Indiana....................................... Leased
Golden, Colorado.......................................... Leased
Grand Rapids, Michigan.................................... Owned
Greenville, South Carolina................................ Owned and Leased
Haarlem, Netherlands...................................... Owned and Leased
Hanoi, Vietnam............................................ Leased
Ho Chi Minh City, Vietnam................................. Leased
Hoffman Estates, Illinois................................. Leased
Holbrook, New York........................................ Leased
Hong Kong................................................. Leased
Houston (Sugar Land office), Texas........................ Owned
Irvine, California........................................ Leased
Jakarta, Indonesia........................................ Leased
Kansas City, Missouri..................................... Leased
Kent, Washington.......................................... Leased
Kingsgrove, Australia..................................... Leased
Kuala Lumpur, Malaysia.................................... Leased
La Serena, Chile.......................................... Leased
Leduc, Canada............................................. Leased
Leipzig, Germany.......................................... Leased
Lenexa, Kansas............................................ Leased
Lexington, Kentucky....................................... Leased
Lima, Peru................................................ Leased
Little River, South Carolina.............................. Leased
London (Uxbridge), England................................ Leased
Manchester, England....................................... Leased
Manila, Philippines....................................... Leased
Marietta, Georgia......................................... Leased
Martinez, California...................................... Leased
Mauldin, South Carolina................................... Leased
Melbourne, Australia...................................... Leased
Memphis, Tennessee........................................ Leased
Mexico City, Mexico....................................... Owned
Montreal, Canada.......................................... Leased
Morrisville, North Carolina............................... Leased
Moscow, Russia............................................ Leased
Nashville, Tennessee...................................... Leased
New Delhi, India.......................................... Leased
New York, New York........................................ Leased
Norwood, Massachusetts.................................... Leased
Oceanside, California..................................... Leased
Pasadena, Texas........................................... Leased
Pensacola, Florida........................................ Leased
Perrysburg, Ohio.......................................... Owned
Perth, Australia.......................................... Leased
Phoenix, Arizona.......................................... Leased
Philadelphia, Pennsylvania (Marlton, New Jersey office)... Leased
Pittsburgh, Pennsylvania.................................. Leased
Richardson, Texas......................................... Leased
12
LOCATION INTEREST
-------- --------
Richland, Washington........................................... Leased
Richmond, Virginia............................................. Leased
Riverdale, Illinois............................................ Owned
Rotterdam, Netherlands......................................... Leased
Rotorua, New Zealand........................................... Leased
Rumford, Rhode Island.......................................... Leased
Sacramento, California......................................... Leased
Salem, New Hampshire........................................... Leased
San Juan, Puerto Rico.......................................... Leased
Santa Clara, California........................................ Leased
Santiago, Chile................................................ Owned
Schenectady, New York.......................................... Leased
Scott, Louisiana............................................... Leased
Seoul, Korea................................................... Leased
Shanghai, China................................................ Leased
Singapore...................................................... Leased
Solon, Ohio.................................................... Leased
South San Francisco, California................................ Leased
Stafford, Texas................................................ Leased
Stockton, California........................................... Leased
Stuttgart, Germany............................................. Leased
Tampa, Florida................................................. Leased
Tempe, Arizona................................................. Leased
Tokyo, Japan................................................... Leased
Torrance, California........................................... Leased
Trenton, New Jersey............................................ Leased
Tucuman, Argentina............................................. Leased
Tulsa, Oklahoma................................................ Leased
Urbandale, Iowa................................................ Leased
Vancouver, Canada.............................................. Leased
Ventura, California............................................ Leased
Washington, D.C. .............................................. Leased
Westchester, Pennsylvania...................................... Leased
West Columbia, South Carolina.................................. Leased
Wichita, Kansas................................................ Leased
Wiesbaden, Germany............................................. Leased
Windsor, Connecticut........................................... Leased
Wixom, Michigan................................................ Owned
Coal Offices:
(Kentucky, Tennessee, Virginia, West Virginia)................. Owned
Coal Properties
See Item 1, Business, of this report for additional information regarding
the coal operations and properties of Fluor.
ITEM 3. LEGAL PROCEEDINGS.
Fluor and its subsidiaries, incident to their business activities, are
parties to a number of legal proceedings in various stages of development,
including but not limited to those described below. The majority of these
proceedings, other than environmental proceedings, involve matters as to which
liability, if any, of Fluor or its subsidiaries would be adequately covered by
insurance. With respect to litigation outside the scope of applicable
13
insurance coverage and to the extent insured claims may exceed liability
limits, it is the opinion of the management of Fluor, based on reports of
counsel, that these matters individually and in the aggregate will not have a
material adverse effect upon the consolidated financial position or results of
operations of Fluor.
In July 1987, four lawsuits were filed against R. T. Vanderbilt Company,
Inc., Gouverneur Talc Company, Inc., St. Joe and Fluor for personal injury and
wrongful death allegedly due to asbestos, talc and silicon exposure in certain
New York mines. Subsequent to July 1987, 16 additional lawsuits have been
filed. All of these suits (representing a total of 213 plaintiffs) have been
filed with the New York Supreme Court, St. Lawrence County, New York. The
total damages claimed in these cases, referred to as Bailey, Baker, Beane, et
al. v. R. T. Vanderbilt Company, Inc., et al. (the claims have not been
consolidated), are $287 million against all defendants. Plaintiffs also seek
an unspecified amount of punitive damages against all defendants. In October
1996, Fluor's motion for summary judgment was granted and, therefore, Fluor is
no longer a party to any of the pending lawsuits. Additionally, the Court
dismissed the complaints of 24 former St. Joe employees.
On May 3, 1994 William T. Watt instituted an action against Fluor Daniel,
Inc. and Fernald Environmental Restoration Management Corporation ("FERMCO",
now known as Fluor Daniel Fernald, Inc.), in the United States District Court,
Southern District of Ohio, pursuant to 31 U.S.C. (S)(S) 3729-32, the False
Claims Act (the "Act"). Watt is seeking to recover civil penalties and damages
for alleged false claims submitted to the Department of Energy ("DOE") of the
United States arising out of work performed at Fernald, Ohio pursuant to
FERMCO's Environmental Restoration Management Contract with the DOE. After
investigation pursuant to the Act, the United States government elected not to
intervene. Motions for summary judgment are pending. Trial has been postponed,
and no new date has been set. Watt has claimed damages of $92 million. If Watt
were to prevail at trial, damages would be trebled, and other statutory
penalties would attach.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT(/1/)
Leslie G. McCraw, age 62
Director since 1984; Chairman of Executive Committee and member of
Governance Committee; Chairman of the Board since 1991; Chief Executive
Officer since 1990; formerly Vice Chairman of the Board from 1990; formerly
President from 1988; joined the Company in 1975.
Dennis W. Benner, age 55
Vice President and Chief Information Officer since November 1994; formerly
Vice President and General Manager, Information, and Vice President and
General Manager, Target Marketing Services, for TRW from 1992 and 1986,
respectively.
Charles J. Bradley, Jr., age 61
Vice President, Human Resources and Administration since 1986; joined the
Company in 1958.
J. Michal Conaway, age 48
Senior Vice President and Chief Financial Officer since December 1996;
formerly Vice President and Chief Financial Officer since May 1994; formerly
Vice President, Finance, from 1993; formerly Vice President and Chief
Financial Officer of National Gypsum Company and its parent, Aancor Holdings,
Inc., from 1988.
Lawrence N. Fisher, age 52
Senior Vice President, Law and Corporate Secretary, since March 1996;
formerly Vice President, Corporate Law and Assistant Secretary from 1984;
joined the Company in 1974.
14
James O. Rollans, age 54
Chief Administrative Officer since May 1994; Senior Vice President since
1992; formerly Chief Financial Officer from 1992; formerly Vice President,
Corporate Communications from 1982; joined the Company in 1982.
EXECUTIVE OPERATING OFFICERS(/1/)
Hugh K. Coble, age 62
Director since 1984; Vice Chairman since April 1994; formerly Group
President of Fluor Daniel, Inc.(/2/) from 1986; joined the Company in 1966.
Dennis G. Bernhart, age 51
Group President, The Americas, of Fluor Daniel, Inc.(/2/) since May 1994;
formerly President, Latin America, Middle East and Africa, of that company
from 1993; formerly Vice President, Sales, from 1982; joined the Company in
1968.
Don L. Blankenship, age 46
Director since September 1996; Chairman of the Board and Chief Executive
Officer of A.T. Massey Coal Company, Inc.(/3/) since January 1992; formerly
President and Chief Operating Officer of that subsidiary from 1990; formerly
President of Massey Coal Services, Inc.(/4/) from 1989; joined Rawl Sales &
Processing Co.(/5/) in 1982.
Alan L. Boeckmann, age 48
Group President, Chemical Processes and Industrial, of Fluor Daniel,
Inc.(/2/) since January 1996; formerly Vice President of Chemicals, Plastics &
Fibers of that company from June 1994; formerly Vice President and General
Manager of that company from 1992; formerly Vice President-Engineering
Services, of that company from 1989; joined the Company in 1974.
Richard D. Carano, age 57
Group President, Asia/Pacific, of Fluor Daniel, Inc.(/2/) since May 1994;
formerly President, Asia/Pacific, of that company from 1993; formerly Vice
President, Sales, of that company from 1987; joined the Company in 1970.
E. David Cole, Jr., age 59
Group President, Process, of Fluor Daniel, Inc.(/2/) since May 1994;
formerly Vice President, Petroleum and Petrochemicals, of that company from
1987; joined the Company in 1965.
Charles R. Cox, age 54
Group President, Industrial, of Fluor Daniel, Inc.(/2/) since May 1994;
formerly President, Operations Centers, of that company from 1989; joined the
Company in 1969.
Richard A. Flinton, age 66
Chairman of the Board of Fluor Constructors International, Inc.(/6/) since
1989; joined the Company in 1960.
Thomas P. Merrick, age 59
Vice President, Strategic Planning, of Fluor Daniel, Inc.(/2/) since May
1994; formerly Vice President, Technology, of that company from 1993; formerly
Vice President, Government Sales, of that company from 1989; joined the
Company in 1984.
15
Charles R. Oliver, Jr., age 53
Group President, Sales, Marketing and Strategic Planning of Fluor Daniel,
Inc.(/2/) since May 1994; formerly President, Business Units, of that company
from 1993; formerly President, Hydrocarbon Sector, from 1986; joined the
Company in 1970.
Carel J.C. Smeets, age 57
Group President, Europe, Africa and Middle East, of Fluor Daniel, Inc.(/2/)
since May 1994; formerly Vice President, European Operations, of that company
from 1991; formerly Vice President and Managing Director, the Netherlands,
from 1985; joined the Company in 1969.
James C. Stein, age 53
Group President, Diversified Services, of Fluor Daniel, Inc.(/2/) since May
1994; formerly President, Business Units, of that company from 1993; formerly
President, Industrial Sector, of that company from 1986; joined the Company in
1964.
Richard M. Teater, age 48
Group President, Power and Government, of Fluor Daniel, Inc.(/2/) since May
1994; formerly President, Power, of that company from 1993; formerly Vice
President, Power Marketing, of that company from 1990; formerly Vice
President, Industrial Marketing, of that company from 1988; joined the Company
in 1980.
- --------
(/1/) Except where otherwise indicated, all references are to positions held
with Fluor.
(/2/) Fluor Daniel, Inc., which provides design, engineering, procurement,
construction management, maintenance and other diversified services to a
wide range of industrial, commercial, utility, natural resources, energy
and governmental clients, is an indirectly wholly-owned subsidiary of
Fluor.
(/3/) A.T. Massey Coal Company, Inc. ("A. T. Massey"), is an indirectly wholly-
owned subsidiary of Fluor which, along with A. T. Massey's subsidiaries,
conducts A. T. Massey's coal-related businesses.
(/4/) Massey Coal Services, Inc. is a wholly-owned subsidiary of A. T. Massey.
(/5/) Rawl Sales & Processing Co. is a wholly-owned subsidiary of A. T. Massey.
(/6/) Fluor Constructors International, Inc., a wholly-owned subsidiary of
Fluor, provides construction and maintenance services to a variety of
clients.
16
PART II
Information for Items 5, 6 and 7 is contained in Fluor's 1996 Annual Report
to stockholders, which information is incorporated herein by reference (and
except for these sections, and sections incorporated herein by reference in
Items 1 and 8 of this report, Fluor's 1996 Annual Report to stockholders is
not to be deemed filed as part of this report):
ANNUAL REPORT TO
STOCKHOLDERS
ITEM NO. TITLE SECTION
- -------- ----- ----------------
ITEM 5. Market for Registrant's Common Equity and Related
Stockholder Matters................................. Stockholders' Reference
ITEM 6. Selected Financial Data............................. Selected Financial Data
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. Management's Discussion
and Analysis
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information for Item 8 is included in Fluor's consolidated financial
statements as of October 31, 1996 and 1995, and for each of the three years in
the period ended October 31, 1996, and Fluor's unaudited quarterly financial
data for the two year period ended October 31, 1996, in the Consolidated
Financial Statements (including the Consolidated Balance Sheet, Consolidated
Statement of Earnings, Consolidated Statement of Cash Flows, Consolidated
Statement of Shareholders' Equity and Notes to Consolidated Financial
Statements) and Quarterly Financial Data sections of Fluor's 1996 Annual
Report to stockholders, which are incorporated herein by reference. The report
of independent auditors on Fluor's consolidated financial statements is in the
Reports of Management and Independent Auditors section of Fluor's 1996 Annual
Report to stockholders, and is also incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning Fluor's executive officers is included under the
caption "Executive Officers of the Registrant" in Part I, following Item 4.
Other information required by this item is included in the Biographical
section of the Election of Directors portion of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed with the Securities and
Exchange Commission (the "Commission") not later than 120 days after the close
of Fluor's fiscal year ended October 31, 1996.
ITEM 11. EXECUTIVE COMPENSATION.
Fluor maintains certain employee benefit plans and programs in which its
executive officers and directors are participants. Copies of these plans and
programs are set forth or incorporated by reference as Exhibits 10.1 through
10.20 inclusive to this report. Certain of these plans and programs provide
for payment of benefits or for acceleration of vesting of benefits upon the
occurrence of a change of control of Fluor as that term is defined in such
plans and programs. The amounts payable thereunder would represent an
increased cost to be paid by Fluor (and indirectly by its stockholders) in the
event of a change in control of Fluor. This increased cost would be a factor
to be taken into account by a prospective purchaser of the Company in
determining whether, and at what price, it would seek control of the Company
and whether it would seek the removal of then existing management.
17
If a change of control were to have occurred on October 31, 1996, the
additional amounts payable by Fluor, either in cash or in stock, if each of
the five most highly compensated executive officers and all executive officers
as a group were thereupon involuntarily terminated without cause would be as
follows:
RESTRICTED SUPPLEMENTAL
STOCK BENEFIT
INDIVIDUAL OR GROUP PLANS(1) PLAN(2)
------------------- ----------- ------------
Leslie G. McCraw................................... $ 4,315,238 $1,210,261
Hugh K. Coble...................................... 3,211,296 756,414
Don L. Blankenship................................. 1,446,106 284,364
James O. Rollans................................... 1,642,304 170,618
James C. Stein..................................... 1,097,828 113,746
All Executive Officers (19) including the above.... $23,306,731 $4,034,293
- --------
(1) Value at October 31, 1996 of previously awarded restricted stock which
would vest upon change of control.
(2) Lump sum entitlement of previously awarded benefits which would vest upon
change of control.
Further disclosure required by this item is included in the Organization and
Compensation Committee Report on Executive Compensation and Executive
Compensation and Other Information sections of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is included in the Stock Ownership section
of the Election of Directors portion of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is included in the Other Matters section
of the Election of Directors portion of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements: The financial statements required to be
filed hereunder are listed on page 23 hereof. See Part II,
Item 8 of this report for information regarding the
incorporation by reference herein of such financial
statements.
2. Financial Statement Schedules: All schedules have been
omitted since the required information is not present or not
present in amounts sufficient to require submission of the
schedule, or because the information required is included in
the consolidated financial statements and notes thereto.
3. Exhibits:
3.1 Restated Certificate of Incorporation of Fluor Corporation
[filed as Exhibit 3.1 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1987 and incorporated
herein by reference]
3.2 Restated Bylaws (as amended effective January 28, 1997) of
Fluor Corporation
18
4.1 Indenture dated July 1, 1986 between Fluor Corporation and Irving
Trust Company, trustee [filed as Exhibit 4 to Registration No. 33-
6960 for the issuance of up to $250 million of debt securities and
incorporated herein by reference]
4.2 Fluor Corporation Dividend Reinvestment Plan (as amended and
restated June 30, 1995) [filed as Exhibit 4.2 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1995 and
incorporated herein by reference]
EXECUTIVE COMPENSATION PLANS/PROGRAMS
10.1 Fluor Corporation and Subsidiaries Executive Incentive Compensation
Plan (as amended and restated through September 15, 1988) [filed as
Exhibit 10.2 to Fluor's quarterly report on Form 10-Q for the
quarterly period ended July 31, 1996 and incorporated herein by
reference]
10.2 Fluor Executive Deferred Compensation Program (as amended and
restated effective May 1, 1995) [filed as Exhibit 10.2 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1995 and incorporated herein by this reference]
10.3 Fluor Corporation Deferred Directors' Fees Program (as amended
through November 15, 1983) [filed as Exhibit 10.4 to Fluor's
quarterly report on Form 10-Q for the quarterly period ended April
30, 1995 and incorporated herein by reference]
10.4 1977 Fluor Executive Stock Plan (as amended by Amendment No. 4
effective December 9, 1986) [filed as Exhibit 10.6 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.5 1981 Fluor Executive Stock Plan (as amended by Amendment No. 3
effective December 9, 1986) [filed as Exhibit 10.9 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.6 1982 Fluor Executive Stock Option Plan (as amended by Amendment No.
2 effective December 9, 1986) [filed as Exhibit 10.10 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1986 and incorporated herein by reference]
10.7 Fluor Executives' Health Plan Summary [filed as Exhibit 10.11 to
Fluor's annual report on Form 10-K for the fiscal year ended October
31, 1985 and incorporated herein by reference]
10.8 Directors' Life Insurance Summary [filed as Exhibit 10(i) to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1980 and incorporated herein by reference]
10.9 Executive Tax Services Plan (as amended and effective as of November
1, 1993) [filed as Exhibit 10.10 to Fluor's annual report on Form
10-K for the fiscal year ended October 31, 1993 and incorporated
herein by reference]
10.10 Executive Personal Financial Counseling Plan (as amended and
effective as of November 1, 1993) [filed as Exhibit 10.11 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1993 and incorporated herein by reference]
10.11 Company Automobile Policy Summary [filed as Exhibit 10.15 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1989 and incorporated herein by reference]
10.12 Fluor Executives' Supplemental Benefit Plan (as amended by First
Amendment effective November 15, 1983) [filed as Exhibit 10.16 to
Fluor's annual report on Form 10-K for the fiscal year ended October
31, 1983 and incorporated herein by reference]
10.13 1988 Fluor Executive Stock Plan (as amended and restated effective
December 6, 1994) [filed as Exhibit 10.13 to Fluor's annual report
on Form 10-K for the fiscal year ended October 31, 1995 and
incorporated herein by reference]
10.14 Fluor Corporation Change of Control Compensation Plan (as amended
and restated by Second Amendment effective October 1, 1989) [filed
as Exhibit 10.19 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1989 and incorporated herein by
reference]
19
10.15 Fluor Special Executive Incentive Plan (as amended effective December 6,
1994) [filed as Exhibit 10.15 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1995 and incorporated herein by
reference]
10.16 Retirement Plan for Outside Directors (effective as of May 1, 1992)
[filed as Exhibit 10.18 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1992 and incorporated herein by reference]
10.17 Officer Severance Plan (effective as of March 7, 1994) [filed as Exhibit
10.19 to Fluor's annual report on Form 10-K for the fiscal year ended
October 31, 1994 and incorporated herein by reference]
10.18 Directors' Achievement Award Program (effective as of December 6, 1994)
[filed as Exhibit 10.18 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1995 and incorporated herein by reference]
10.19 Fluor Corporation Stock Plan for Non-Employee Directors (adopted
effective March 14, 1995) [filed as Exhibit 10.21 to Fluor's quarterly
report on Form 10-Q for the quarterly period ended April 30, 1995 and
incorporated herein by reference]
10.20 1996 Fluor Executive Stock Plan (effective March 12, 1996 as amended
December 10, 1996)
OTHER CONTRACTS
10.21 Concourse Lease dated as of July 26, 1985 between Fluor Corporation and
Fluor Engineers, Inc. (an entity now having the corporate name of Fluor
Daniel, Inc.) with respect to a portion of the International
Headquarters facility located in Irvine, California, formerly owned by
Fluor (the "Irvine facility"); Schedule of substantially identical
Building Pod Lease and Corporate Tower Lease; and Assignment of Master
Leases dated July 26, 1985, assigning Fluor's lessor interest to Crow
Winthrop Operating Partnership ("CWOP") [filed as Exhibit 10.21 to
Fluor's annual report on Form 10-K for the fiscal year ended October 31,
1985 and incorporated herein by reference]
10.22 Amendment to Master Leases by and between CWOP, Fluor Daniel, Inc. and
Fluor Corporation dated as of November 1, 1989 with respect to the
Irvine facility [filed as Exhibit 10.19 to Fluor's annual report on Form
10-K for the fiscal year ended October 31, 1991 and incorporated herein
by reference]
13 1996 Annual Report to stockholders (with the exception of the
information incorporated by reference into Items 1, 5, 6, 7 and 8 of
this report, Fluor's 1996 Annual Report to stockholders is not deemed to
be filed as part of this report)
21 Fluor Corporation Subsidiaries
23 Consent of Independent Auditors--Ernst & Young LLP
24.1 Manually signed Power of Attorney executed by certain Fluor directors
and officers
24.2 Manually signed Powers of Attorney executed by certain Fluor directors
27 Financial Data Schedule
(b) Reports on Form 8-K:
None were filed during the last quarter of the period covered by this
report.
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FLUOR CORPORATION
J. M. CONAWAY
January 28, 1997 By __________________________________
J. M. Conaway, Senior Vice
President and Chief Financial
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
* Director, Chairman January 28, 1997
- ------------------------------------- of the Board and
L. G. McCraw Chief Executive
Officer
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
J. M. CONAWAY Senior Vice January 28, 1997
- ------------------------------------- President and Chief
J. M. Conaway Financial Officer
OTHER DIRECTORS:
* Director January 28, 1997
- -------------------------------------
D. A. Blankenship
* Director January 28, 1997
- -------------------------------------
C. A. Campbell, Jr.
* Director January 28, 1997
- -------------------------------------
H. K. Coble
* Director January 28, 1997
- -------------------------------------
P. J. Fluor
* Director January 28, 1997
- -------------------------------------
D. P. Gardner
Director January 28, 1997
- -------------------------------------
T. L. Gossage
* Director January 28, 1997
- -------------------------------------
W. R. Grant
* Director January 28, 1997
- -------------------------------------
B. R. Inman
* Director January 28, 1997
- -------------------------------------
R. V. Lindsay
21
SIGNATURE TITLE DATE
--------- ----- ----
* Director January 28, 1997
- -------------------------------------
V. S. Martinez
* Director January 28, 1997
- -------------------------------------
B. Mickel
* Director January 28, 1997
- -------------------------------------
M. R. Seger
R. M. BUKATY
*By__________________________________
R. M. Bukaty,
Attorney-in-fact
Manually signed Powers of Attorney authorizing L. N. Fisher, R. M. Bukaty
and R. R. Dryden and each of them, to sign the annual report on Form 10-K for
the fiscal year ended October 31, 1996 and any amendments thereto as
attorneys-in-fact for certain directors and officers of the registrant are
included herein as Exhibits 24.1 and 24.2.
22
FLUOR CORPORATION
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
ITEM 14(a)
1. FINANCIAL STATEMENTS
The following financial statements are contained in Fluor's 1996 Annual
Report to stockholders:
Consolidated Balance Sheet at October 31, 1996 and 1995
Consolidated Statement of Earnings for the years ended October 31, 1996,
1995 and 1994
Consolidated Statement of Cash Flows for the years ended October 31,
1996, 1995 and 1994
Consolidated Statement of Shareholders' Equity for the years ended
October 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements and notes thereto.
23
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------- ------------
3.1 Restated Certificate of Incorporation of Fluor
Corporation [filed as Exhibit 3.1 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1987 and incorporated herein by reference]
3.2 Restated Bylaws (as amended effective January 28,
1997) of Fluor Corporation
4.1 Indenture dated July 1, 1986 between Fluor Corporation
and Irving Trust Company, trustee [filed as Exhibit 4
to Registration No. 33-6960 for the issuance of up to
$250 million of debt securities and incorporated
herein by reference]
4.2 Fluor Corporation Dividend Reinvestment Plan (as
amended and restated June 30, 1995)
[filed as Exhibit 4.2 to Fluor's annual report on Form
10-K for the fiscal year ended October 31, 1995 and
incorporated herein by reference.]
EXECUTIVE COMPENSATION PLANS/PROGRAMS
10.1 Fluor Corporation and Subsidiaries Executive Incentive
Compensation Plan (as amended and restated through
September 15, 1988) [filed as Exhibit 10.2 to Fluor's
quarterly report on Form 10-Q for the quarterly period
ended July 31, 1996 and incorporated herein by
reference]
10.2 Fluor Executive Deferred Compensation Program (as
amended and restated effective May 1, 1995) [filed as
Exhibit 10.2 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1995 and
incorporated herein by this reference]
10.3 Fluor Corporation Deferred Directors' Fees Program (as
amended through November 15, 1983) [filed as Exhibit
10.4 to Fluor's quarterly report on Form 10-Q for the
quarterly period ended April 30, 1995 and incorporated
herein by reference]
10.4 1977 Fluor Executive Stock Plan (as amended by
Amendment No. 4 effective December 9, 1986) [filed as
Exhibit 10.6 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.5 1981 Fluor Executive Stock Plan (as amended by
Amendment No. 3 effective December 9, 1986) [filed as
Exhibit 10.9 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.6 1982 Fluor Executive Stock Option Plan (as amended by
Amendment No. 2 effective December 9, 1986) [filed as
Exhibit 10.10 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.7 Fluor Executives' Health Plan Summary [filed as
Exhibit 10.11 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1985 and
incorporated herein by reference]
10.8 Directors' Life Insurance Summary [filed as Exhibit
10(i) to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1980 and incorporated
herein by reference]
10.9 Executive Tax Services Plan (as amended and effective
as of November 1, 1993) [filed as Exhibit 10.10 to
Fluor's annual report on Form 10-K for the fiscal year
ended October 31, 1993 and incorporated herein by
reference]
10.10 Executive Personal Financial Counseling Plan (as
amended and effective as of November 1, 1993) [filed
as Exhibit 10.11 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1993 and
incorporated herein by reference]
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------- ------------
10.11 Company Automobile Policy Summary [filed as Exhibit
10.15 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1989 and incorporated
herein by reference]
10.12 Fluor Executives' Supplemental Benefit Plan (as
amended by First Amendment effective November 15,
1983) [filed as Exhibit 10.16 to Fluor's annual report
on Form 10-K for the fiscal year ended October 31,
1983 and incorporated herein by reference]
10.13 1988 Fluor Executive Stock Plan (as amended and
restated effective December 6, 1994) [filed as Exhibit
10.13 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1995 and incorporated
herein by reference]
10.14 Fluor Corporation Change of Control Compensation Plan
(as amended and restated by Second Amendment effective
October 1, 1989) [filed as Exhibit 10.19 to Fluor's
annual report on Form 10-K for the fiscal year ended
October 31, 1989 and incorporated herein by reference]
10.15 Fluor Special Executive Incentive Plan (as amended
effective December 6, 1994) [filed as Exhibit 10.15 to
Fluor's annual report on Form 10-K for the fiscal year
ended October 31, 1995 and incorporated herein by
reference]
10.16 Retirement Plan for Outside Directors (effective as of
May 1, 1992) [filed as Exhibit 10.18 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1992 and incorporated herein by reference]
10.17 Officer Severance Plan (effective as of March 7, 1994)
[filed as Exhibit 10.19 to Fluor's annual report on
Form 10-K for the fiscal year ended October 31, 1994
and incorporated herein by reference]
10.18 Directors' Achievement Award Program (effective as of
December 6, 1994)
[filed as Exhibit 10.18 to Fluor's annual report on
Form 10-K for the fiscal year ended October 31, 1995
and incorporated herein by reference]
10.19 Fluor Corporation Stock Plan for Non-Employee
Directors (adopted effective March 14, 1995) [filed as
Exhibit 10.21 to Fluor's quarterly report on Form 10-Q
for the quarterly period ended April 30, 1995 and
incorporated herein by reference]
10.20 1996 Fluor Executive Stock Plan (effective March 12,
1996, as amended December 10, 1996)
OTHER CONTRACTS
10.21 Concourse Lease dated as of July 26, 1985 between
Fluor Corporation and Fluor Engineers, Inc. (an entity
now having the corporate name of Fluor Daniel, Inc.)
with respect to a portion of the International
Headquarters facility located in Irvine, California,
formerly owned by Fluor (the "Irvine facility");
Schedule of substantially identical Building Pod Lease
and Corporate Tower Lease; and Assignment of Master
Leases dated July 26, 1985, assigning Fluor's lessor
interest to Crow Winthrop Operating Partnership
("CWOP") [filed as Exhibit 10.21 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1985 and incorporated herein by reference]
10.22 Amendment to Master Leases by and between CWOP, Fluor
Daniel, Inc. and Fluor Corporation dated as of
November 1, 1989 with respect to the Irvine facility
[filed as Exhibit 10.19 to Fluor's annual report on
Form 10-K for the fiscal year ended October 31, 1991
and incorporated herein by reference]
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------- ------------
13 1996 Annual Report to stockholders (with the exception
of the information incorporated by reference into Items
1, 5, 6, 7 and 8 of this report, Fluor's 1996 Annual
Report to stockholders is not deemed to be filed as
part of this report)
21 Fluor Corporation Subsidiaries
23 Consent of Independent Auditors--Ernst & Young LLP
24.1 Manually signed Power of Attorney executed by certain
Fluor directors and officers
24.2 Manually signed Powers of Attorney executed by certain
Fluor directors
27 Financial Data Schedule
EX-3.2
2
RESTATED BY-LAWS OF FLUOR CORPORATION
Exhibit 3.2
RESTATED BYLAWS
(as amended January 28, 1997)
OF
FLUOR CORPORATION
(a Delaware corporation)
ARTICLE I
OFFICES
Section 1.01 Registered Office. The registered office of FLUOR
-----------------
CORPORATION (hereinafter called the "Corporation") in the State of Delaware
shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent,
and the name of the registered agent at that address shall be The Prentice-Hall
Corporation System, Inc.
Section 1.02 Principal Office. The principal office for the transaction
----------------
of the business of the Corporation shall be at 3353 Michelson Drive, Irvine,
California 92698. The Board of Directors (hereinafter called the "Board") is
hereby granted full power and authority to change said principal office from one
location to another.
Section 1.03 Other Offices. The Corporation may also have an office or
-------------
offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01 Annual Meetings. Annual meetings of the stockholders of
---------------
the Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings may be held at such
time, date and place as the Board shall determine by resolution.
Section 2.02 Special Meetings. Special meetings of the stockholders of
----------------
the Corporation for any purpose or purposes may be called at any time by the
Board, or by a committee of the Board which has been duly designated by the
Board and whose powers and authority, as provided in a resolution of the Board
or in the Bylaws, include the power to call such meeting, but such special
meetings may not be called by any other person or persons; provided, however,
that if and to the extent that any special meetings of stockholders may be
called by any other person or persons specified in any provisions of the
Certificate of Incorporation or any amendment thereto or any certificate filed
under Section 151(g) of the Delaware General Corporation Law (or its successor
statute as in effect from time to time
hereafter), then such special meeting may also be called by the person or
persons, in the manner, at the times and for the purposes so specified.
Section 2.03 Place of Meetings. All meetings of the stockholders shall
-----------------
be held at such places, within or without the State of Delaware, as may from
time to time be designated by the person or persons calling the respective
meeting and specified in the respective notices or waivers of notice thereof.
Section 2.04 Notice of Stockholder Business. At an annual meeting of
------------------------------
the stockholders, only such business shall be conducted as shall have been
properly brought before the meeting (a) by or at the direction of the Board of
Directors or (b) by any stockholder of the Corporation who complies with the
notice procedures set forth in this Section 2.04. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to or mailed and received at
the principal office of the Corporation, not less than 30 days nor more than 60
days prior to the meeting; provided, however, that in the event that less than
40 days' notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the 10th day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. A stockholder's notice to the Secretary shall set forth as
to each matter the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the books of the Corporation, of the
stockholder proposing such business, (c) the class and number of shares of the
Corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding anything
in the Bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section
2.04. The Chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 2.04, and if he or she
should so determine, he or she shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Section 2.05 Notice of Meetings. Except as otherwise required by law,
------------------
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder of record entitled to vote at such meeting by delivering a
typewritten or printed notice thereof to him or her personally, or by depositing
such notice in the United States mail, in a postage prepaid envelope, directed
to him or her at his or her post office address furnished by him or her to the
Secretary of the Corporation for such purpose or, if he or she shall not have
furnished to the Secretary his or her address for such purposes, then at his or
her post office address last known to the Secretary, or by transmitting a notice
thereof to him or her at such address by telegraph, cable or wireless. Except
as otherwise expressly required by law, no publication of any notice of a
meeting of the stockholders shall be required. Every notice of a meeting of the
stockholders shall state the place, date and hour of the meeting, and, in the
case of a special meeting, shall also state the
2
purpose or purposes for which the meeting is called. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall have
waived such notice and such notice shall be deemed waived by any stockholder who
shall attend such meeting in person or by proxy, except a stockholder who shall
attend such meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Except as otherwise expressly required by law,
notice of any adjourned meeting of the stockholders need not be given if the
time and place thereof are announced at the meeting at which the adjournment is
taken.
Section 2.06 Quorum. Except in the case of any meeting for the election
------
of directors summarily ordered as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation entitled
to be voted thereat, present in person or by proxy, shall constitute a quorum
for the transaction of business at any meeting of the stockholders of the
Corporation or any adjournment thereof. In the absence of a quorum at any
meeting or any adjournment thereof, a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat or, in
the absence therefrom of all the stockholders, any officer entitled to preside
at, or to act as secretary of, such meeting may adjourn such meeting from time
to time. At any such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally called.
Section 2.07 Voting.
------
(a) Each stockholder shall, at each meeting of the stockholders, be
entitled to vote in person or by proxy each share or fractional share of the
stock of the Corporation having voting rights on the matter in question and
which shall have been held by him or her and registered in his or her name on
the books of the Corporation:
(i) on the date fixed pursuant to Section 6.05 of the Bylaws as
the record date for the determination of stockholders entitled to notice of and
to vote at such meeting, or
(ii) if no such record date shall have been so fixed, then (a) at
the close of business on the day next preceding the day on which notice of the
meeting shall be given or (b) if notice of the meeting shall be waived, at the
close of business on the day next preceding the day on which meeting shall be
held.
(b) Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors in such other corporation is held, directly or indirectly, by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity shall
be entitled to vote such stock. Persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the Corporation
he or she shall have expressly empowered the pledgee to vote thereon, in which
case only the pledgee, or his or her proxy, may represent such stock and vote
thereon. Stock having voting power standing of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or with respect to
which two or more
3
persons have the same fiduciary relationship, shall be voted in accordance with
the provisions of the General Corporation Law of the State of Delaware.
(c) Any such voting rights may be exercised by the stockholder entitled
thereto in person or by his or her proxy appointed by an instrument in writing,
subscribed by such stockholder or by his or her attorney thereunto authorized
and delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period. The attendance at any meeting of a
stockholder who may theretofore have given a proxy shall not have the effect of
revoking the same unless he or she shall in writing so notify the secretary of
the meeting prior to the voting of the proxy. At any meeting of the
stockholders all matters, except as otherwise provided in the Certificate of
Incorporation, in the Bylaws or by law, shall be decided by the vote of a
majority in voting interest of the stockholders present in person or by proxy
and entitled to vote thereat and thereon, a quorum being present. The vote at
any meeting of the stockholders on any question need not be by ballot, unless so
directed by the chairman of the meeting. On a vote by ballot each ballot shall
be signed by the stockholder voting, or by his or her proxy, if there be such
proxy, and it shall state the number of shares voted.
Section 2.08 List of Stockholders. The Secretary of the Corporation
--------------------
shall prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the entire
duration thereof, and may be inspected by any stockholder who is present.
Section 2.09 Judges. If at any meeting of the stockholders a vote by
------
written ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
or her ability. Such judges shall decide upon the qualification of the voters
and shall report the number of shares represented at the meeting and entitled to
vote on such question, shall conduct and accept the votes, and, when the voting
is completed shall ascertain and report the number of shares voted respectively
for and against the question. Reports of the judges shall be in writing and
subscribed and delivered by them to the Secretary of the Corporation. The
judges need not be stockholders of the Corporation, and any officer of the
Corporation may be a judge on any question other than a vote for or against a
proposal in which he or she shall have a material interest.
4
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 General Powers. The property, business and affairs of the
--------------
Corporation shall be managed by the Board.
Section 3.02 Number. The authorized number of directors of the
------
Corporation shall be thirteen and such authorized number shall not be changed
except by a Bylaw or amendment thereof duly adopted by the stockholders in
accordance with the Certificate of Incorporation or by the Board amending this
Section 3.02.
Section 3.03 Election of Directors. The directors shall be elected by
---------------------
the stockholders of the Corporation, and at each election the persons receiving
the greatest number of votes, up to the number of directors then to be elected,
shall be the persons then elected. The election of directors is subject to any
provisions contained in the Certificate of Incorporation relating thereto,
including any provisions for a classified board and for cumulative voting.
Section 3.04 Notice of Stockholder Nominees. Only persons who are
------------------------------
nominated in accordance with the procedures set forth in the Bylaws shall be
eligible for election as directors. Nominations of persons for election to the
Board of Directors of the Corporation may be made at a meeting of stockholders
(a) by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation entitled to vote for the election of directors at the meeting
who complies with the notice procedures set forth in this Section 3.04. Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be delivered to
or mailed and received at the principal office of the Corporation not less than
30 days nor more than 60 days prior to the meeting; provided, however, that in
the event that less than 40 days' notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. Such stockholder's notice shall set forth (a)
as to each person whom the stockholder proposes to nominate for election or re-
election as a director, all information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including without limitation such person's
written consent to be named in the proxy statement as a nominee and to serve as
a director if elected); and (b) as to the stockholder proposing such nomination
(i) the name and address, as they appear on the books of the Corporation, of
such stockholder, and (ii) the class and number of shares of the Corporation
which are beneficially owned by such stockholder. At the request of the Board
of Directors any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that information
required to be set forth in a stockholder's notice of nomination which pertains
to the nominee. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in the
Bylaws. The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures
5
prescribed by the Bylaws, and if he or she should so determine, he or she shall
so declare to the meeting and the defective nomination shall be disregarded.
Section 3.05 Mandatory Retirement. The Chairman of the Board and the
--------------------
President and any former Chairman of the Board and any former President, if
serving as a director of the Corporation at age 72, shall retire from the Board
at the end of the calendar year in which his or her 72nd birthday occurs. Each
other employee or former employee of the Corporation or its subsidiaries serving
as a director of the Corporation at age 65 shall retire from the Board at the
end of the calendar year in which his or her 65th birthday occurs unless the
Chairman of the Board recommends and the Board approves his or her continued
service as a non-employee director. Each other employee of the Corporation or
its subsidiaries under age 65 serving as a director of the Corporation who
elects to take early retirement or who for any other reason is no longer an
officer of the Corporation or its subsidiaries shall retire from the Board as of
the date he or she ceases to be an officer unless the Chairman of the Board
recommends and the Board approves his or her continued directorship. Each non-
employee director of the Corporation serving at age 72 shall retire from the
Board at the end of the calendar year in which his or her 72nd birthday occurs.
For purposes of this Section, "end of the calendar year" shall include the
period ending with the seventh day of January next following.
Section 3.06 Resignations. Any director of the Corporation may resign
------------
at any time by giving written notice to the Board or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately upon
its receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 3.07 Vacancies. Except as otherwise provided in the Certificate
---------
of Incorporation, any vacancy in the Board, whether because of death,
resignation, disqualification, an increase in the number of directors, or any
other cause, may be filled by vote of the majority of the remaining directors,
although less than a quorum. Each director so chosen to fill a vacancy shall
hold office until his or her successor shall have been elected and shall qualify
or until he or she shall resign or shall have been removed.
Section 3.08 Place of Meeting, etc. The Board may hold any of its
---------------------
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of notice
of any such meeting. Directors may participate in any regular or special
meeting of the Board by means of conference telephone or similar communications
equipment pursuant to which all persons participating in the meeting of the
Board can hear each other, and such participation shall constitute presence in
person at such meeting.
Section 3.09 First Meeting. The Board shall meet as soon as practicable
-------------
after each annual election of directors and notice of such first meeting shall
not be required.
Section 3.10 Regular Meetings. Regular meetings of the Board may be
----------------
held at such times as the Board shall from time to time by resolution
determine. If any day fixed for a meeting shall be a legal holiday at the place
where the meeting is to be held, then the meeting
6
shall be held at the same hour and place on the next succeeding business day not
a legal holiday. Except as provided by law, notice of regular meetings need not
be given.
Section 3.11 Special Meetings. Special meetings of the Board may be
----------------
called at any time by the Chairman of the Board or the President or by any two
directors, to be held at the principal office of the Corporation, or at such
other place or places, within or without the State of Delaware, as the person or
persons calling the meeting may designate.
Notice of all special meetings of the Board shall be given to each
director by two days' service of the same by telegram, by letter, or
personally. Such notice may be waived by any director and any meeting shall be
a legal meeting without notice having been given if all the directors shall be
present thereat or if those not present shall, either before or after the
meeting, sign a written waiver of notice of, or a consent to, such meeting or
shall after the meeting sign the approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or be
made a part of the minutes of the meeting.
Section 3.12 Quorum and Manner of Acting. Except as otherwise provided
---------------------------
in the Bylaws or by law, the presence of a majority of the authorized number of
directors shall be required to constitute a quorum for the transaction of
business at any meeting of the Board, and all matters shall be decided at any
such meeting, a quorum being present, by the affirmative votes of a majority of
the directors present. In the absence of a quorum, a majority of directors
present at any meeting may adjourn the same from time to time until a quorum
shall be present. Notice of any adjourned meeting need not be given. The
directors shall act only as a Board, and the individual directors shall have no
power as such.
Section 3.13 Action by Consent. Any action required or permitted to be
-----------------
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or such committee.
Section 3.14 Compensation. No stated salary need be paid directors, as
------------
such, for their services, but, by resolution of the Board, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board or an annual directors' fee may be paid; provided
that nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefore. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
Section 3.15 Committees. The Board may, by resolution passed by a
----------
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. Former employees of
the Corporation or its subsidiaries who are no longer officers of the
Corporation or its subsidiaries, if serving as a director of the Corporation,
shall not be eligible to serve as a member of any committee of the Board.
Except as otherwise provided in the Board resolution designating a committee,
the presence of a majority of the authorized number of members of such committee
shall be required to constitute a quorum for
7
the transaction of business at any meeting of such committee. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise all the powers and authority of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have any power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of the
dissolution, or amending the Bylaws of the Corporation; and unless the
resolution of the Board expressly so provides, no such committee shall have the
power or authority to declare a dividend or to authorize the issuance of stock.
Any such committee shall keep written minutes of its meetings and report the
same to the Board at the next regular meeting of the Board.
Section 3.16 Officers of the Board. The Board shall have a Chairman of
---------------------
the Board and may, at the discretion of the Board, have a Vice Chairman and
other officers. The Chairman of the Board and the Vice Chairman shall be
appointed from time to time by the Board, unless such positions are elected
offices of the Corporation, currently filled, and shall have such powers and
duties as shall be designated by the Board.
ARTICLE IV
OFFICERS
Section 4.01 Officers. The officers of the Corporation shall be a
--------
Chairman of the Board, a Chief Executive Officer, a Secretary, a Treasurer and
such other officers as may be appointed by the Board as the business of the
Corporation may require. Officers shall have such powers and duties as are
permitted or required by law or as may be specified by or in accordance with
resolutions of the Board. Any number of offices may be held by the same
person. Unless the Board shall otherwise determine, the Chairman of the Board
shall be the Chief Executive Officer of the Corporation. In the absence of any
contrary determination by the Board, the Chief Executive Officer shall, subject
to the power and authority of the Board, have general supervision, direction and
control of the officers, employees, business and affairs of the Corporation.
Section 4.02 Election and Term. The officers of the Corporation shall
-----------------
be elected annually by the Board. The Board may at any time and from time to
time elect such additional officers as the business of the Corporation may
require. Each officer shall hold his or her office until his or her successor
is elected and qualified or until his or her earlier resignation or removal.
Section 4.03 Removal and Resignation. Any officer may be removed,
-----------------------
either with or without cause, by a majority of the directors at the time in
office, at any regular or special meeting of the Board. Any officer may resign
at any time by giving notice to the Board. Such resignation shall take effect
at the time specified in such notice or, in the absence of such specification,
at the date of the receipt by the Board of such notice. Unless otherwise
specified in such notice, the acceptance of such resignation shall not be
necessary to make it effective.
8
Section 4.04 Vacancies. Any vacancy occurring in any office of the
---------
Corporation by death, resignation, removal or otherwise, shall be filled in the
manner prescribed in these Bylaws for the regular appointment to such office.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
Section 5.01 Execution of Contracts. The Board, except as in the Bylaws
----------------------
otherwise provided, may authorize any officer or officers, agent or agents, to
enter into any contract or execute any instrument in the name and on behalf of
the Corporation, and such authority may be general or confined to specific
instances; and unless so authorized by the Board or by the Bylaws, no officer,
agent or employee shall have any power or authority to bind the Corporation by
any contract or engagement or to pledge its credit or to render it liable for
any purpose or in any amount.
Section 5.02 Checks, Drafts, etc. All checks, drafts or other orders
-------------------
for payment of money, notes or other evidence of indebtedness, issued in the
name of or payable to the Corporation, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Board. Each such person shall give such bond, if any, as
the Board may require.
Section 5.03 Deposit. All funds of the Corporation not otherwise
-------
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, the Chief Executive
Officer, the President or the Treasurer (or any other officer or officers,
assistant or assistants, agent or agents, or attorney or attorneys of the
Corporation who shall from time to time be determined by the Board) may endorse,
assign and deliver checks, drafts and other orders for the payment of money
which are payable to the order of the Corporation.
Section 5.04 General and Special Bank Accounts. The Board may from time
---------------------------------
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of the Bylaws, as it may deem expedient.
9
ARTICLE VI
SHARES AND THEIR TRANSFER
Section 6.01 Certificates for Stock. Every owner of stock of the
----------------------
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him or her. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
President and by the Secretary. Any or all of the signatures on the
certificates may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon any
such certificate shall thereafter have ceased to be such officer, transfer agent
or registrar before such certificate is issued, such certificate may
nevertheless be issued by the Corporation with the same effect as though the
person who signed such certificate, or whose facsimile signature shall have been
placed thereupon, were such officer, transfer agent or registrar at the date of
issue. A record shall be kept of the respective names of the persons, firms or
corporations owning the stock represented by such certificates, the number and
class of shares represented by such certificates, respectively, and the
respective dates thereof, and in case of cancellation the respective dates of
cancellation. Every certificate surrendered to the Corporation for exchange or
transfer shall be cancelled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 6.04 of
the Bylaws.
Section 6.02 Transfers of Stock. Transfers of shares of stock of the
------------------
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his or her attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary, or with a transfer clerk or
a transfer agent appointed as provided in Section 6.03 of the Bylaws, and upon
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact shall be stated
expressly in the entry of transfer if, when the certificate or certificates
shall be presented to the Corporation for transfer, both the transferor and the
transferee request the Corporation to do so.
Section 6.03 Regulations. The Board may make such rules and regulations
-----------
as it may deem expedient, not inconsistent with the Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
Section 6.04 Lost, Stolen, Destroyed, And Mutilated Certificates. In
---------------------------------------------------
any case of loss, theft, destruction, or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction,
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided,
10
however, that a new certificate may be issued without requiring any bond when,
in the judgment of the Board, it is proper so to do.
Section 6.05 Fixing Date for Determination of Stockholders of Record.
--------------------------------------------- ---------
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any other
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other action. If, in any case involving the determination of
stockholders for any purpose other than notice of or voting at a meeting of
stockholders, the Board shall not fix such a record date, the record date for
determining stockholders for such purpose shall be the close of business on the
day on which the Board shall adopt the resolution relating thereto. A
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of such meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Seal. The Board shall provide a corporate seal, which
----
shall be in the form of a circle and shall bear the name of the Corporation and
words and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.
Section 7.02 Waiver of Notices. Whenever notice is required to be given
-----------------
by the Bylaws or the Certificate of Incorporation or by law, the person entitled
to said notice may waive such notice in writing, either before or after the time
stated therein, and such waiver shall be deemed equivalent to notice.
Section 7.03 Fiscal Year. The fiscal year of the Corporation shall end
-----------
on the 31st day of October of each year.
Section 7.04 Amendments. The Bylaws, or any of them, may be rescinded,
----------
altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by
vote of a majority of the number of directors then in office as directors,
acting at any meeting of the Board, or (ii) by the vote of the holders of not
less than 80% of the total voting power of all outstanding shares of voting
stock of the Corporation, at any annual meeting of stockholders, without
previous notice, or at any special meeting of stockholders, provided that notice
of such proposed amendment, modification, repeal or adoption is given in the
notice of special meeting. Any Bylaws made or altered by the stockholders may
be altered or repealed by the Board or may be altered or repealed by the
stockholders.
11
EX-10.20
3
1996 FLUOR EXECUTIVE STOCK PLAN
EXHIBIT 10.20
FLUOR CORPORATION
1996 FLUOR EXECUTIVE STOCK PLAN
(As amended December 10, 1996)
ARTICLE I
DEFINITIONS
Sec. 1.1 DEFINITIONS
-----------
As used herein, the following terms shall have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Award" shall mean an award of Restricted Stock pursuant to the
provisions of Article VI hereof.
(b) "Awardee" shall mean an Eligible Employee to whom Restricted Stock has
been awarded hereunder.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change of Control" of the Company shall be deemed to have occurred if,
(i) a third person, including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, acquires shares of the Company having twenty-
five percent or more of the total number of votes that may be cast for the
election of directors of the Company, or (ii) as the result of any cash tender
or exchange offer, merger or other business combination, or any combination of
the foregoing transactions (a "Transaction"), the persons who were directors of
the Company before the Transaction shall cease to constitute a majority of the
Board of the Company or any successor to the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Organization and Compensation Committee of
the Board.
(g) "Company" shall mean Fluor Corporation.
(h) "Eligible Employee" shall mean an employee who is an officer of the
Company or any Subsidiary or who is a member of the Executive Management Team of
the Company and its Subsidiaries.
(i) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
(j) "Executive Management Team" shall mean those employees who have been
determined to be eligible to participate in the Fluor Corporation and
Subsidiaries
1
Executive Incentive Compensation Program or in other similar management
incentive compensation programs of any Subsidiary.
(k) "Fair Market Value" shall mean the average of the highest price and
the lowest price per share at which the Stock is sold in the regular way on the
New York Stock Exchange on the day an Option is granted hereunder or, in the
absence of any reported sales on such day, the first preceding day on which
there were such sales.
(l) "Incentive Stock Option" shall mean an incentive stock option, as
defined under Section 422 of the Code and the regulations thereunder, to
purchase Stock.
(m) "Nonqualified Stock Option" shall mean a stock option other than an
Incentive Stock Option to purchase Stock.
(n) "Option" shall mean an option to purchase Stock granted pursuant to the
provisions of Article V hereof and refers to both Incentive Stock Options and
Nonqualified Stock Options.
(o) "Optionee" shall mean an Eligible Employee to whom an Option has been
granted hereunder.
(p) "Plan" shall mean the 1996 Fluor Executive Stock Plan, the current
terms of which are set forth herein.
(q) "Prior Plans" shall mean the 1971 Fluor Stock Option Plan, the 1977
Fluor Executive Stock Plan, the 1981 Fluor Executive Stock Plan, the 1982 Fluor
Executive Stock Option Plan and the 1988 Fluor Executive Stock Plan.
(r) "Restricted Stock" shall mean Stock that may be awarded to an Eligible
Employee by the Committee pursuant to Article VI hereof, which is
nontransferable and subject to a substantial risk of forfeiture until specific
conditions are met. Conditions may be based on continuing employment or
achievement of preestablished performance objectives.
(s) "Return on Average Shareholders' Equity" shall mean, for any fiscal
year, the percentage amount reported as "Return on Average Shareholders Equity"
in the "Highlights" section of the Company's Annual Report to Stockholders for
such fiscal year.
(t) "Restricted Stock Agreement" shall mean the agreement between the
Company and the Awardee with respect to Restricted Stock awarded hereunder.
2
(u) "Stock" shall mean the Common Stock of the Company or, in the event
that the outstanding shares of Stock are hereafter changed into or exchanged for
shares of a different stock or securities of the Company or some other
corporation, such other stock or securities.
(v) "Stock Option Agreement" shall mean the agreement between the Company
and the Optionee under which the Optionee may purchase Stock hereunder.
(w) "Stock Payment" shall mean a payment in shares of Stock to replace all
or any portion of the compensation (other than base salary) that would otherwise
become payable to any Eligible Employee of the Company.
(x) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital stock of which is owned, directly or indirectly, by the
Company or any partnership or joint venture in which either the Company or such
a corporation is at least a twenty percent (20%) equity participant.
(y) "Ten Year Treasury Yield" shall mean, for any fiscal period, the daily
average percent per annum yield for U.S. Government Securities - 10 year
Treasury constant maturities, as published in the Federal Reserve statistical
release or any successor publication.
ARTICLE II
GENERAL
Sec. 2.1 NAME
----
This Plan shall be known as the "1996 Fluor Executive Stock Plan".
Sec. 2.2 PURPOSE
-------
The purpose of the Plan is to advance the interests of the Company and its
stockholders by affording to Eligible Employees of the Company and its
Subsidiaries an opportunity to acquire or increase their proprietary interest in
the Company by the grant to such employees of Options or Awards under the terms
set forth herein. By thus encouraging such employees to become owners of Company
shares, the Company seeks to motivate, retain and attract those highly competent
individuals upon whose judgment, initiative, leadership and continued efforts
the success of the Company in large measure depends.
Sec. 2.3 EFFECTIVE DATE
--------------
3
The Plan shall become effective upon its approval by the holders of a
majority of the shares of Stock of the Company represented at an annual or
special meeting of the stockholders of the Company.
Sec. 2.4 LIMITATIONS
-----------
Subject to adjustment pursuant to the provisions of Section 10.1 hereof,
the aggregate number of shares of Stock which may either be issued as Awards,
subject to Options or issued pursuant to the exercise of Options shall not
exceed the sum of (a) 4,000,000 plus (b) that number of shares represented by
options, awards or rights under Prior Plans which expire or are otherwise
terminated at any time after the original effective date of this Plan. Any such
shares may be either authorized and unissued shares or shares issued and
thereafter acquired by the Company.
Sec. 2.5 OPTIONS AND AWARDS GRANTED UNDER PLAN
-------------------------------------
Shares of Stock with respect to which an Option granted hereunder shall
have been exercised, and shares of Stock received pursuant to a Restricted Stock
Agreement executed hereunder with respect to which the restrictions provided for
in Section 6.3 hereof shall have lapsed, shall not again be available for Option
or Award grant hereunder. If Options granted hereunder shall expire or
terminate for any reason without being wholly exercised, or if Restricted Stock
is acquired by the Company pursuant to the provisions of paragraph (c) of
Section 6.3 hereof, new Options or Awards may be granted hereunder covering the
number of shares to which such Option expiration or termination or Restricted
Stock acquisition relates.
ARTICLE III
PARTICIPANTS
Sec. 3.1 ELIGIBILITY
-----------
Any Eligible Employee shall be eligible to participate in the Plan;
provided, however, that no member of the Committee shall be eligible to
participate while a member of the Committee. The Committee may grant Options or
Awards to any Eligible Employee in accordance with such determinations as the
Committee from time to time in its sole discretion shall make.
ARTICLE IV
ADMINISTRATION
4
Sec. 4.1 DUTIES AND POWERS OF COMMITTEE
------------------------------
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have sole discretion and authority
to determine from among Eligible Employees those to whom and the time or times
at which Options or Awards may be granted, the number of shares of Stock to be
subject to each Option or Award and the period for the exercise of such Option
which need not be the same for each grant hereunder. Subject to the express
provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the details and provisions of each Stock Option
Agreement and Restricted Stock Agreement, and to make all other determinations
necessary or advisable in the administration of the Plan.
Sec. 4.2 MAJORITY RULE
-------------
A majority of the members of the Committee shall constitute a quorum, and
any action taken by a majority present at a meeting at which a quorum is present
or any action taken without a meeting evidenced by a writing executed by a
majority of the whole Committee shall constitute the action of the Committee.
Sec. 4.3 COMPANY ASSISTANCE
------------------
The Company shall supply full and timely information to the Committee on
all matters relating to eligible employees, their employment, death, retirement,
disability or other termination of employment, and such other pertinent facts as
the Committee may require. The Company shall furnish the Committee with such
clerical and other assistance as is necessary in the performance of its duties.
ARTICLE V
OPTIONS
Sec. 5.1 OPTION GRANT AND AGREEMENT
--------------------------
Each Option granted hereunder shall be evidenced by minutes of a meeting or
the written consent of the Committee and by a written Stock Option Agreement
dated as of the date of grant and executed by the Company and the Optionee,
which Agreement shall set forth such terms and conditions as may be determined
by the Committee consistent with the Plan. In no event shall the total number of
shares of Stock subject to Options granted hereunder to any Eligible Employee in
any fiscal year exceed five percent (5%) of the total number of shares
authorized to be issued under the Plan on the effective date of the Plan.
Sec. 5.2 PARTICIPATION LIMITATION
------------------------
5
The Committee shall not grant an Incentive Stock Option to any employee for
such number of shares of Stock that, immediately after the grant, the total
number of shares of Stock owned or subject to Options exercisable by and/or
Awards outstanding in the hands of such employee (or by such persons whose
shares such employee is considered as owning pursuant to the provisions of the
second succeeding sentence) exceed ten percent of the total combined voting
power of all classes of stock of the Company. This restriction does not apply
if, at the time such Incentive Stock Option is granted, the Incentive Stock
Option purchase price is at least 110% of the Fair Market Value on the date of
grant and the Incentive Stock Option by its terms is not exercisable after the
expiration of five (5) years from the date of grant. For purposes of this
Section 5.2, an employee shall be considered as owning the stock owned, directly
or indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors and lineal descendants; and the stock owned, directly
or indirectly, by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its shareholders, partners
or beneficiaries.
Sec. 5.3 OPTION PRICE
------------
The purchase price of Stock under each Option will be determined by the
Committee but may not be less than the Fair Market Value on the date of grant.
Sec. 5.4 OPTION PERIOD
-------------
Each Option granted hereunder must be granted within ten years from the
effective date of the Plan. The period for the exercise of each Option shall be
determined by the Committee, but in no instance shall such period exceed ten
years from the date of grant of the Option.
Sec. 5.5 OPTION EXERCISE
---------------
(a) Options granted hereunder may not be exercised unless and until the
Optionee shall have been or remained in the employ of the Company or
its Subsidiaries for one year from and after the date such Option was
granted, except as otherwise provided in Section 5.7 hereof.
(b) Options may be exercised with respect to whole shares only, for such
shares of Stock and within the period permitted for the exercise
thereof as determined by the Committee, and shall be exercised by
written notice of intent to exercise the Option with respect to a
specified number of shares delivered to the Company at its principal
office in the State of California, and payment in full to the Company
at said office of the amount of the Option price for the number of
shares of Stock with respect to which the Option is then being
exercised. The purchase price may be paid by the assignment and
delivery to the Company of shares of Stock or a combination of cash
and shares of Stock equal in value to the exercise price. Any
6
shares assigned and delivered to the Company in payment or partial
payment of the purchase price will be valued at their Fair Market
Value on the exercise date.
(c) The Fair Market Value of the Stock at the date of grant for which any
employee may exercise Incentive Stock Options in any calendar year
under the Plan (or any other stock option plan of the Company adopted
after December 31, 1986) may not exceed $100,000.
Sec. 5.6 NONTRANSFERABILITY OF OPTION
----------------------------
No Option shall be transferred by an Optionee otherwise than in accordance
with such rules as may be established by the Committee from time to time.
During the lifetime of an Optionee, the Option shall be exercisable only in
accordance with such rules as may be established by the Committee from time to
time.
Sec. 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
--------------------------------------------------
(a) If, prior to a date one year from the date on which an Option shall
have been granted, the Optionee's employment with the Company or its
Subsidiaries shall be terminated by the Company or Subsidiary with or
without cause, or by the act of the Optionee, the Optionee's right to
exercise such Option shall terminate and all rights thereunder shall
cease; provided, however, that if the Optionee shall die, retire or
become permanently and totally disabled, as determined in accordance
with applicable Company personnel policies, or if the Optionee's
employment with the Company or its Subsidiaries shall be terminated
within two years after a Change of Control of the Company and such
termination occurs prior to a date one year from the date on which an
Option shall have been granted, such Option shall become exercisable
in full on the date of such death, retirement, disability or
termination of employment.
(b) If, on or after one year from the date on which an Option shall have
been granted, an Optionee's employment with the Company or its
Subsidiaries shall be terminated for any reason other than death,
retirement or permanent total disability, or within two years
following a Change of Control of the Company, the Optionee shall have
the right, during the period ending three months after such
termination, to exercise such Option to the extent that it was
exercisable at the date of such termination and shall not have been
exercised, subject, however, to the provisions of Section 5.4 hereof.
(c) Upon termination of an Optionee's employment with the Company or its
Subsidiaries by reason of retirement or permanent total disability, as
determined in accordance with applicable Company personnel policies,
or within two years following a Change of Control of the Company, such
Optionee shall have the
7
right, during the period ending three years after such termination, to
exercise his Option in full, without regard to any installment
exercise provisions, to the extent that it shall not have been
exercised, subject, however, to the provisions of Section 5.4 hereof.
(d) If an Optionee shall die (i) while in the employ of the Company or its
Subsidiaries, or (ii) within three months after termination of
employment where such termination did not occur either by reason of
retirement or permanent total disability or within two years following
a Change of Control of the Company, or (iii) within three years after
termination of employment where such termination occurred either by
reason of retirement or permanent total disability or within two years
following a Change of Control of the Company, the executor or
administrator of the estate of the decedent or the person or persons
to whom an Option granted hereunder shall have been validly
transferred by the executor or the administrator pursuant to a will or
the laws of descent and distribution shall have the right, during the
period ending three years after the date of the Optionee's death, to
exercise the Optionee's Option (A) in full, without regard to any
installment exercise provisions, to the extent that it shall not have
been exercised, if the Optionee shall have died while in the employ of
the Company or its Subsidiaries or within three years after
termination of employment where such termination occurred either by
reason of retirement or permanent total disability or within two years
following a Change of Control of the Company, or (B), to the extent
that it was exercisable at the date of the Optionee's death and shall
not have been exercised, if the Optionee shall have died within three
months after termination of employment where such termination did not
occur by reason of either retirement or permanent total disability or
within two years following a Change of Control of the Company,
subject, however, to the provisions of Section 5.4 hereof.
(e) No transfer of an Option by the Optionee by a will or by the laws of
descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and
an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer
and the acceptance by the transferee or transferees of the terms and
conditions of such Op tion.
(f) The foregoing notwithstanding, the Committee may elect, in its sole
discretion, to make grants of Options which have provisions regarding
the effect of death or other termination of employment which are
different than those set forth in paragraphs (a) through (d) of this
Section 5.7, provided that such provisions do not materially increase
the benefits that would otherwise accrue to an Optionee under
paragraphs (a) through (d) of this Section 5.7.
8
Sec. 5.8 RIGHTS AS STOCKHOLDER
---------------------
An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares subject to such Option prior to the
purchase of such shares by exercise of such Option as provided herein.
ARTICLE VI
AWARDS
Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT
------------------------------------------
The Committee may grant Awards of Restricted Stock to Awardees. No Awards
may be made during any fiscal year unless, for the preceding fiscal year, Return
on Average Shareholders' Equity exceeded the Ten Year Treasury Yield by more
than three percentage points. Each Award granted hereunder must be granted
within ten years from the effective date of the Plan and shall be evidenced by
minutes of a meeting or the written consent of the Committee. The Committee
shall from time to time establish various Award grade levels which shall set
forth the maximum number of shares which may be awarded annually to each
Eligible Employee in each grade level. The Committee shall have the sole
discretion and authority to make an Award to an Eligible Employee of less than
the maximum number of shares applicable to his assigned grade level or to make
no Award at all to any such Eligible Employee. In no event shall the total
number of shares of Restricted Stock awarded to an Eligible Employee in any
fiscal year exceed 15,000. The Awardee shall be entitled to receive the Stock
subject to such Award only if the Company and the Awardee, within 30 days after
the date of the Award, enter into a written Restricted Stock Agreement dated as
of the date of the Award, which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the Plan.
Sec. 6.2 CONSIDERATION FOR ISSUANCE
--------------------------
No shares of Restricted Stock shall be issued to an Awardee hereunder
unless and until the Committee shall have determined that consideration has been
received by the Company, in the form of labor performed for or services actually
rendered to the Company by the Awardee, having a fair value of not less than the
then fair market value of a like number of shares of Stock subject to all of the
herein provided conditions and restrictions applicable to Restricted Stock, but
in no event less than the par value of such shares.
Sec. 6.3 RESTRICTIONS ON SALE OR OTHER TRANSFER
--------------------------------------
Each share of Stock received pursuant to each Restricted Stock Agreement
shall be subject to acquisition by Fluor Corporation, and may not be sold or
otherwise transferred except pursuant to the following provisions:
9
(a) The shares of Stock represented by the Restricted Stock Agreement
shall be held in book entry form with the Company's transfer agent
until the restrictions lapse in accordance with the conditions
established by the Committee pursuant to Section 6.4 hereof, or until
the shares of stock are forfeited pursuant to paragraph (c) of this
Section 6.3. Notwithstanding the foregoing, the Awardee may request
that, prior to the lapse of the restrictions or forfeiture of the
shares, certificates evidencing such shares be issued in his name and
delivered to him, and each such certificate shall bear the following
legend:
"The shares of Fluor Corporation common stock evidenced by this
certificate are subject to acquisition by Fluor Corporation, and such
shares may not be sold or otherwise transferred except pursuant to the
provisions of the Restricted Stock Agreement by and between Fluor
Corporation and the registered owner of such shares."
(b) No such shares may be sold, transferred or otherwise alienated or
hypothecated so long as such shares are subject to the restriction
provided for in this Section 6.3.
(c) Unless the Committee in its discretion determines otherwise, upon an
Awardee's termination of employment for any reason, all of the
Awardee's Restricted Stock remaining subject to restriction shall be
acquired by the Company effective as of the date of such termination
of employment. Upon the occurrence or non-occurrence of such other
events as shall be determined by the Committee and specified in the
Awardee's Restricted Stock Agreement relating to any such Restricted
Stock, all of such Restricted Stock remaining subject to restriction
shall be acquired by the Company upon the occurrence or non-occurrence
of such event.
Sec. 6.4 LAPSE OF RESTRICTIONS
---------------------
The restrictions imposed upon Restricted Stock under Section 6.3 above will
lapse in accordance with such conditions as are determined by the Committee and
set forth in the Restricted Stock Agreement.
Sec. 6.5 RIGHTS AS STOCKHOLDER
---------------------
Subject to the provisions of Section 6.3 hereof, upon the issuance to the
Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of
a stockholder with respect to such Stock, including the right to vote the shares
and receive all dividends and other distributions paid or made with respect
thereto.
10
ARTICLE VII
STOCK CERTIFICATES
Sec. 7.1 STOCK CERTIFICATES
------------------
The Company shall not be required to issue or deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted hereunder or
any portion thereof, or received as Restricted Stock pursuant to a Restricted
Stock Agreement executed hereunder, prior to fulfillment of all of the following
conditions:
(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed;
(b) the completion of any registration or other qualification of such
shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee shall in its sole
discretion deem necessary or advisable;
(c) the obtaining of any approval or other clearance from any federal or
state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the exercise of
the Option or the execution of the Restricted Stock Agreement as the
Committee from time to time may establish for reasons of
administrative convenience.
ARTICLE VIII
STOCK PAYMENT
Sec. 8.1 STOCK PAYMENT
-------------
The Committee may approve payments of Stock to any Eligible Employee for
all or any portion of the compensation (other than base salary) that would
otherwise become payable to such Eligible Employee in cash.
ARTICLE IX
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
Sec. 9.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
-----------------------------------------------
The Board may at any time, upon recommendation of the Committee, terminate,
and may at any time and from time to time and in any respect amend or modify,
the Plan, provided,
11
however, that no such action of the Board without approval of the stockholders
of the Company may:
(a) increase the total number of shares of Stock subject to the Plan by
more than 10%, except as contemplated in Section 10.1 hereof;
(b) materially increase the benefits accruing to participants under the
Plan;
(c) withdraw the administration of the Plan from the Committee; or
(d) permit any person while a member of the Committee to receive an Option
or Restricted Stock under the Plan; and provided further, that no
termination, amendment or modification of the Plan shall in any manner
affect any Stock Option Agreement or Restricted Stock Agreement
theretofore executed pursuant to the Plan without the consent of such
Optionee or Awardee.
ARTICLE X
MISCELLANEOUS
Sec. 10.1 ADJUSTMENT PROVISIONS
---------------------
(a) Subject to Section 10.1(b) below, if the outstanding shares of Stock
of the Company are increased, decreased, or exchanged for a different
number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with
respect to such shares of Stock or other securities, through merger,
consolidation, sale of all or substantially all of the property of the
Company, reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other distribution with
respect to such shares of Stock or other securities, an appropriate
and proportionate adjustment may be made in (i) the maximum number and
kind of shares provided in Section 2.4, (ii) the number and kind of
shares or other securities subject to the outstanding Options and
Awards, and (iii) the price for each share or other unit of any other
securities subject to outstanding Options without change in the
aggregate purchase price or value as to which such Options remain
exercisable.
(b) Adjustments under Section 10.1(a) will be made by the Committee, whose
determination as to what adjustments will be made and the extent
thereof will be final, binding, and conclusive. No fractional
interests will be issued under the Plan resulting from any such
adjustments.
Sec. 10.2 CONTINUATION OF EMPLOYMENT
--------------------------
12
Nothing in the Plan or in any instrument executed pursuant to the Plan
will confer upon any Eligible Employee any right to continue in the employ of
the Company or any Subsidiary or affect the right of the Company or any
Subsidiary to terminate the employment of any Eligible Employee at any time with
or without cause.
Sec. 10.3 COMPLIANCE WITH GOVERNMENT REGULATIONS
--------------------------------------
No shares of Stock will be issued hereunder unless and until all
applicable requirements imposed by federal and state securities and other laws,
rules, and regulations and by any regulatory agencies having jurisdiction and by
any stock exchanges upon which the Stock may be listed have been fully met. As
a condition precedent to the issuance of shares of Stock pursuant hereto, the
Company may require the employee to take any reasonable action to comply with
such requirements.
Sec. 10.4 PRIVILEGES OF STOCK OWNERSHIP
-----------------------------
No employee and no beneficiary or other person claiming under or through
such employee will have any right, title, or interest in or to any shares of
Stock allocated or reserved under the Plan or subject to any Option or Award
except as to such shares of Stock, if any, that have been issued to such
employee.
Sec. 10.5 WITHHOLDING
-----------
The Company may make such provisions as it deems appropriate to withhold
any taxes the Company determines it is required to withhold in connection with
any Option or Award. The Company may require the employee to satisfy any
relevant tax requirements before authorizing any issuance of Stock to the
employee. Such settlement may be made in cash or Stock.
Sec. 10.6 NONTRANSFERABILITY
------------------
No Option or Award and no other right under the Plan, contingent or
otherwise, will be assignable or subject to any encumbrance, pledge, or charge
of any nature, except in accordance with such rules as may be established by the
Committee from time to time.
Sec. 10.7 OTHER COMPENSATION PLANS
------------------------
The adoption of the Plan shall not affect any other stock option or
incentive or other compensation plans in effect for the Company or any
Subsidiary, nor shall the Plan preclude the Company from establishing any other
forms of incentive or other compensation for employees of the Company or any
Subsidiary.
13
Sec. 10.8 PLAN BINDING ON SUCCESSORS
--------------------------
The Plan shall be binding upon the successors and assigns of the Company.
Sec. 10.9 SINGULAR, PLURAL; GENDER
------------------------
Whenever used herein, nouns in the singular shall include the plural, and
the masculine pronoun shall include the feminine gender.
Sec. 10.10 HEADINGS, ETC., NO PART OF PLAN
-------------------------------
Headings of Articles and Sections hereof are inserted for convenience and
reference; they constitute no part of the Plan.
14
EX-13
4
1996 ANNUAL REPORT TO STOCKHOLDERS
Fluor Corporation
================================================================================
Mission Statement
As Fluor Daniel employees, our mission is to assist clients in attaining a
competitive advantage by delivering quality services of unmatched value.
Company Description
Fluor Corporation is one of the world's largest international engineering,
construction, maintenance and diversified services companies, with an important
investment in low-sulfur coal. Fluor Daniel, the company's principal operating
business, provides a broader range of technical services to more clients in more
industries and geographic locations than any global competitor. Fluor Daniel
provides global capability from more than 80 offices worldwide. A. T. Massey,
Fluor's coal operation, ranks among the top five U.S. coal companies, producing
high-quality, low-sulfur steam coal for the electric generating industry, as
well as industrial customers, and metallurgical coal for the steel industry.
On the Cover
Fluor Corporation is dedicated to accelerated, consistent, long-term growth. We
hope you enjoy this year's annual report, which has taken a lighthearted
approach to conveying some serious messages about the company's strategy and
growth potential.
Table of Contents
1 Key Highlights
2 1996 Key Achievements
3 Letter to Stockholders
4 Accelerating Growth - No Borders, No Limits
7 Operations Report
21 Financials
22 Operating Statistics
23 Selected Financial Data
24 Management's Discussion and Analysis
28 Consolidated Financial Statements
44 Reports of Management and Independent Auditors
45 Quarterly Financial Data
45 Worldwide Offices
46 Directors
48 Officers
49 Stockholders' Reference
1996 Annual Report
================================================================================
Key Highlights
Net earnings increased 16 percent to $268 million or $3.17 per share, a new
record.
Earnings from continuing operations have grown on average more than 15 percent
annually for the past nine years.
New awards increased 22 percent to a record $12.5 billion; backlog grew 7
percent to $15.8 billion.
Fluor Daniel reported operating profits up 12 percent to $320 million, the
highest in its history.
Diversified Services, the extension of core competencies, was a major
contributor to Fluor Daniel's growth and is enhancing future earnings potential.
A.T. Massey posted record operating profits of $135 million, up 21 percent.
Fluor Daniel and Massey further improved their excellent safety records. Fluor
Daniel remains the world's safest contractor.
Acquisition activity and capital spending to enhance the company's growth
potential increased significantly in 1996.
Quarterly cash dividends for 1997 were raised 12 percent to 19 cents per share,
representing a payout of approximately 24 percent of 1996 earnings.
Fluor stock increased 16 percent in fiscal 1996 from $56.50 to $65.50.
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- -------------------------------------
84 119 153 135 167 192 232 268
- -------------------------------------
Earnings from
Continuing Operations
dollars in millions
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- -------------------------------------
.14 .24 .32 .40 .48 .52 .60 .68
- -------------------------------------
Dividends
dollars
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- -------------------------------------
.28 .23 .21 .18 .15 .11 .10 .07*
- -------------------------------------
Safety Performance
Lost Workday Incidence Rates for Fluor Daniel
*70 times better than the National Industry Average
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- ---------------------------------------------------------------
28 3/4 32 3/8 45 5/8 44 5/8 40 3/4 49 1/2 56 1/2 65 1/2
- ---------------------------------------------------------------
Stock Price
dollars
Fluor Corporation 2
==============================================================================
1996 Key Achievements
Percent
$ in thousands, except per share amounts 1996 1995 Change
- --------------------------------------------------------------------------------------------------------
Fiscal Year
Revenues $ 11,015,192 $ 9,301,384 18
Net earnings 268,084 231,768 16
Earnings per share $ 3.17 $ 2.78 14
Return on average shareholders' equity 17.4% 17.6% --
Capital expenditures $ 392,436 $ 318,942 23
New awards $ 12,487,800 $ 10,257,100 22
Produced coal sold (thousands of short tons) 31,091 27,410 13
Cash dividends per common share $ .68 $ .60 13
-------------------------------------------
At Fiscal Year End
Working capital $ 151,255 $ 173,026 -13
Total assets 3,951,726 3,228,906 22
Backlog* 15,757,400 14,724,900 7
Capitalization
Long-term debt 2,967 2,873 3
Shareholders' equity 1,669,726 1,430,814 17
-------------------------------------------
Total capitalization $ 1,672,693 $ 1,433,687 17
Long-term debt as a percent of total capitalization .2% .2% --
Shareholders' equity per common share $ 19.93 $ 17.20 16
Closing stock price $ 65.50 $ 56.50 16
-------------------------------------------
Salaried employees 27,514 18,880 46
Craft/hourly employees 24,947 22,798 9
-------------------------------------------
Total employees 52,461 41,678 26
-------------------------------------------
The quarterly dividend was increased from $.15 per share to $.17 per share in
the first quarter of 1996 and to $.19 per share in the first quarter of 1997.
*Backlog does not reflect A.T. Massey Coal operations or certain Diversified
Services activities.
[GRAPH APPEARS HERE]
- ---------------------------------
Operating Profit by
Segment 1996
- ---------------------------------
. E&C 70%
. Coal 30%
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- -------------------------------------
6.1 7.2 6.6 6.6 7.9 8.5 9.3 11.0
- -------------------------------------
Revenues from
Continuing Operations
dollars in billions
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- -------------------------------------
130 126 107 273 172 237 319 392
- -------------------------------------
Capital Expenditures
Excludes discontinued operations
dollars in millions
- -------------------------------------
. E&C . Coal
1996 Annual Report 3
================================================================================
Dear Fellow Stockholder
In reflecting on the past year, I'm struck by a number of strong beliefs. First,
there is a feeling of just how fortunate I am to be part of the Fluor Daniel and
Massey teams, both clear leaders in their respective industries. Second, there
is the constant reinforcement that those teams are made up of such outstanding
and dedicated members who are constantly challenging the status quo as they seek
to improve in all aspects. Third, there is the realization that we are
exceptionally well positioned to benefit from explosive global expansion of so
many industries. Each day we see the importance and power of liberalized trade
and investment policies.
Your company just completed the best year in its history. Records were
set in four key areas: earnings up 16 percent; revenues up 18 percent; new
awards up a strong 22 percent; and a safety performance which surpassed last
year's impressive results and reconfirms that Fluor Daniel is indeed the safest
contractor worldwide.
Most of our markets were highly active. In our Fluor Daniel operations,
demand for petroleum/petrochemical and chemical facilities; a number of mining,
electronics, telecommunication, consumer product projects and power
opportunities; along with important new projects from the U.S. Department of
Energy, all helped to improve performance.
Our Diversified Services Group recorded a particularly strong year,
including positive results from recent acquisitions. As reported to you in
previous annual reports, we are providing certain of our core competencies to
clients outside the typical project cycle, thereby increasing our growth and
profit potential.
In A.T. Massey's operations, demand for low-sulfur steam and
metallurgical coal also remained strong. This, together with our new longwall
mining installation, which dramatically reduces cost and increases output, and
our unique ability to rapidly shift production to meet customer needs, combined
to help give Massey its best year ever.
Results from continuing operations have now grown on average 15 percent
for the past nine years, ranking us among the best performing of all U.S.
industry. Yet we believe we can do better in both growth rate and return on
shareholders' equity. As we continually remind employees worldwide, this company
has only scratched the surface of its potential.
As we look ahead, we are very encouraged about our prospects. Global
economic expansion and capital spending appear to be on a sustainable, upward
trend, with Latin America, Asia Pacific, the Middle East, and Central and
Eastern Europe heading the list. But just as significant, the strategy we have
embraced--to provide more services to more clients in more locations than any
global competitor and to do so in a way which is BETTER, FASTER, CHEAPER and
SAFER--is facilitating accomplishment of the many stretch goals we have set for
ourselves.
In building upon last year's success, you should know that we contemplate
further actions designed to increase shareholder value. For the past three
years, we have made a number of strategic investments, both in acquisitions and
internal expansion with such moves as the opening of new offices, the relocation
of key executives to be closer to markets and clients, and development of
important new technologies and services. While many of these investments are
beginning to show results, we are mindful that initiatives of this kind tend to
bring along corresponding increases in operating expenses, causing pressure on
margins. Throughout 1997, we will take steps to strengthen our margins through
achievement of greater cost efficiencies in our operations and projects, and
continue to be highly selective in those projects we choose to pursue.
In the pages which follow, we discuss the vital importance that culture
continues to play in our ongoing success. We truly see no borders nor limits to
our market potential and what we can achieve when we fully focus our global
resources. Our core strengths are the envy of our industry, and the culture we
are creating assures their long-term viability.
In referencing our many successes, I would be remiss if I did not
acknowledge the contributions of our Board. You should know that your Board is
actively involved in overseeing company initiatives and last fall spent several
days with our Leadership Team reviewing overall company direction and strategy.
Through their knowledge of our businesses and
[PICTURE APPEARS HERE]
perspectives on our industry, many thoughtful observations were put forth which
have been key to firming up our plans for the future. It was with a great deal
of pleasure that we welcomed two new directors to our Board. Don L. Blankenship,
chairman and chief executive officer of A.T. Massey, was elected in September.
Thomas L. Gossage, retired chairman and former president and chief executive
officer of Hercules, Inc., was elected in January. Both bring very valuable
business perspectives and will be a strength for us in the future.
This is truly an exciting time for Fluor. On behalf of our employees
worldwide, I want to thank our many clients for their trust and confidence in
our work, and you-our owners-for your support in the past, and confidence in our
future. If you have questions or comments, don't hesitate to contact us.
/s/ Les McCraw
Les McCraw
Chairman and Chief Executive Officer
January 16, 1997
Fluor Corporation 4
================================================================================
Accelerating Growth
[ART APPEARS HERE]
No Borders, No Limits
In today's business climate, most companies are devising strategies for growth
or scenarios to accelerate it. Many of these strategies are designed around an
organization's core strengths. Fortunately for us, we believe we have core
strengths which clearly separate us from our principal competitors--a strong
global presence, the most diverse array of services in the industry, a healthy
diversity of markets served, the flexibility to rapidly shift resources to
meet any client need, use of the most advanced technology, a low-sulfur coal
business positioned for growth, financial strength and a safety record second
to none.
But if our many years of success have taught us a single, fundamental
lesson, it's that the core strengths of any company have a way of being
transitory, sustained for periods of time but then gone for reasons which are
often difficult to grasp.
Sustaining and building upon core strengths as a strategy to achieve
and accelerate growth is, therefore, a challenging goal to attain. We believe
the answer, however, lies in something basic to every business
enterprise--culture.
For the most part, a company either has a culture which is designed to
consistently achieve excellence, or one which allows mediocrity or even under-
performance to routinely occur. The culture we're creating throughout our
company is, in many ways, our distinguishing characteristic and one of
continuous performance improvement. It gives us self-confidence and enables us
to set aggressive goals, guides our behavior and establishes how we act--how we
anticipate our clients'
1996 Annual Report 5
================================================================================
needs, how we devise solutions, how we apply and focus our resources--in effect,
how we think about and approach our work.
The genesis of our new culture change began in 1994 when seven company
leaders carved out a plan designed to keep us competitive amid a quickly
changing world marketplace. Known as "Task Force A," the members of this group
knew the company possessed tremendous potential and was capable of creating a
far more powerful future! The key? Find a way to unleash this potential from
within.
The task required more than the traditional reengineering--it required
that we reinvent ourselves and embrace a full-scale cultural transformation.
This ongoing transformation is based upon the six characteristics below. These
words exemplify the workplace we're striving to create.
Client Focused
Growth Oriented
Empowering (Enabling)
Entrepreneurial
Cost Effective
Accountability Driven
By embracing these culture traits, the rewards for our clients,
shareholders and employees will be significant. The phrase most often used by
employees today to describe how we want to be perceived is BETTER, FASTER,
CHEAPER and SAFER than any global competitor. We intend to become the
unquestioned leading diversified services company in the world.
As we assess our efforts to date, we are encouraged by the progress we
have made. Earlier this year, we established the Chairman's Award to recognize
operations within the company whose performance in cultural transformation is
particularly noteworthy. We wanted to honor those organizations which
demonstrated and modeled superior levels of leadership. Three of our
operations were singled out among a number of candidates and received the
first-ever Chairman's Award for truly exemplifying our new culture:
The PACE operating company epitomizes client focus as it assists its sole
client, Procter & Gamble (P&G), in achieving its goals to meet worldwide
market demand. PACE, which is working in 11 countries for P&G, provided
cost-effective, value-added services and has been a critical element in
reducing client capital expenditures.
American Equipment Company's (AMEC) vision is to become one of the largest
and most profitable equipment services companies in the world. It is
accomplishing this through an entrepreneurial, empowered and quality-driven
culture. AMEC has demonstrated dramatic global growth as it has aggressively
marketed its services to new clients and expanded its distribution network in
the Latin America and Asia Pacific regions.
As one of Fluor Daniel's 80 offices worldwide, the Camberley operation in the
U.K. has transformed itself by dramatically expanding its business to a much
more diverse group of clients. It has broadened its geographic reach. By both
creating an empowered team and striking an optimum balance between risk-taking
and accountability, Camberley is succeeding in accelerating its growth
potential.
We are proud of these achievements and see these as role models for the
entire company. We are strongly bound to the belief that cultural
transformation will enable us to accelerate the impressive success we have
enjoyed in recent years. Evidence in this regard is apparent--our clients are
consistently rewarding us with record numbers of new projects; our
shareholders recognize our potential for accelerated growth, and our employees
are fully committed to achieving our vision for the future.
Our success is dependent upon the outstanding achievements of our
thousands of employees working together around the world. We thank them for
their efforts and dedication in making the company the best it can be. We are
fortunate to have added a great deal of new talent this past year. Most have
joined us through significant new projects and acquisitions. We welcome them
to our company, and look forward to the benefits that their diversity of
experience and capabilities will contribute.
As we see it, there are no boundaries, no barriers, no borders, no
limits. Our thinking, our strategies, our approach to the marketplace have no
constraints. This reflects our culture, our operating philosophy--a culture,
we believe, that will serve us well for many years to come!
Fluor Corporation 6
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Markets Served
Industrial
Automotive and General Manufacturing, Consumer Products, Commercial and
Institutional Facilities, Electronics, Food and Beverage, Infrastructure, Mining
and Metals, Pharmaceuticals and Biotechnology,
Pulp and Paper, Telecommunications
Power/Government
Power Generation, Power Services, Government Services
Process
Chemicals, Plastics and Fibers; Petroleum and Petrochemicals; Production and
Pipelines
Diversified Services
Construction Equipment Sales and Services, Environmental, Facility and Plant
Services, Procurement, Technology, TRS Staffing Solutions
A.T. Massey Coal
Electric Power Generation, General Industrial, Steel Production
[GRAPH APPEARS HERE]
89 90 91 92* 93 94 95 96
- ---------------------------------------
7.1 7.6 8.5 10.9 8.0 8.1 10.3 12.5
- ---------------------------------------
New Awards
dollars in billions
*Included $2.2 billion for a five-year contract with the U.S. Dept. of Energy
[GRAPH APPEARS HERE]
- -------------------------------------
Backlog by Industry
1996
- -------------------------------------
. Industrial 41%
. Power 10%
. Government 13%
. Process 31%
. Diversified Services 5%
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- ----------------------------------------------
8.4 9.6 11.2 14.7 14.8 14.0 14.7 15.8
- ----------------------------------------------
Backlog -
International vs. U.S.
dollars in billions
- -------------------------------------
. International . U.S.
[GRAPH APPEARS HERE]
- -------------------------------------
Backlog by Region
1996
- -------------------------------------
. Asia Pacific 22%
. Australia 6%
. Canada 1%
. Europe 9%
. Latin America 8%
. Middle East 8%
. United States 46%
[GRAPH APPEARS HERE]
89 90 91 92 93 94 95 96
- ----------------------------------------
117 135 166 191 221 259 286 320
- ----------------------------------------
E&C Operating Profit
dollars in millions
1996 Annual Report 7
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Operations
[ART APPEARS HERE]
Engineering and Construction
In 1996, Fluor Daniel's operating profit was $320 million, up 12 percent--the
highest in the company's history. Backlog at year end was $15.8 billion,
representing a broad diversity of markets, geographic locations and services.
New awards in 1996 were a record $12.5 billion, up 22 percent from 1995, and the
prospects for new business in an expanding international economy remain strong.
Fluor Daniel's commitment to continued growth is being achieved by
expanding our services, and broadening the markets and geographic locations we
serve. Our diversity provides a wide range of opportunities and allows us to be
selective in pursuing projects where we have a competitive advantage and which
offer the best return on our resources. Our offices and capabilities are linked
electronically, which provides flexibility to rapidly respond to client needs
anywhere in the world and allows for greater use of our high-value engineering
centers. The alignment of our organization along both industry and regional
lines gives us the ability to grow as the market demands.
To enhance future growth, strategic investments are being made to
strengthen and expand our capabilities in existing markets, as well as extend
our core competencies into new growth sectors and regions. The company's ability
to capitalize on opportunities is supported by our entrepreneurial culture, in
which accountability and client focus are key attributes.
Fluor Corporation 8
================================================================================
Asia Pacific
From the infrastructure markets of emerging countries to the high-technology
industries of developed nations, the Asia Pacific region holds the most diverse
and rapidly expanding market opportunities. Activity is strong in the
hydrocarbon, chemical and mining industries, and needs in the region include
power, energy, industrial facilities, infrastructure, consumer products and
telecommunications.
Our 26-year presence in Indonesia positions us to capitalize on growth
opportunities, which are being enhanced by changes in investment and tax laws to
attract foreign investment. The Mining operating company is providing full-scope
services on the $1 billion Batu Hijau copper and gold project. We also have a
continuous presence on P.T. Freeport Indonesia's mine expansion in Irian Jaya
and are providing construction management services for Inco's smelter expansion
project in South Sulawesi. Increased power needs and emphasis on deregulation
and private enterprise are presenting several opportunities. Duke/Fluor Daniel
is providing engineering and construction services for the $2.5 billion Paiton
power plant and P.T. Freeport Indonesia's 3x65-megawatt coal-fired power plant,
and is operating its power generation assets in Irian Jaya. Requirements to
upgrade refineries to comply with the phase-out of lead in gasoline means a
continued strong market for our Petroleum & Petrochemicals operating company. It
is providing services for the debottlenecking of an existing refinery and the
addition of a new lube oil complex in Cilacap for Pertamina--Indonesia's
national oil company. Additionally, our Commercial & Institutional operating
company is working for Jakarta International Hotel Development on two projects:
renovating the Hotel Borobudur Inter-Continental--Jakarta's landmark five-star
hotel--and building the Conrad complex, a mixed-use hotel, office and retail
center.
Significant investment in Malaysia is creating opportunities,
particularly in electronics, chemicals and refining. Our Petroleum &
Petrochemicals operating company and Mitsubishi Heavy Industries agreed to
jointly pursue projects in the liquefied natural gas (LNG) market and won its
first engineering award for the Malaysia LNG TIGA project.
Singapore's open, entrepreneurial economy and excellent international
trading links are creating multiple opportunities in the electronics, chemical
and petrochemical industries. Our Chemicals, Plastics & Fibers operating company
is working on a vinyl acetate monomer plant for Hoechst Celanese.
The Philippines has an expanding economy, and growth can be seen in the
electronics, infrastructure, telecommunication and energy-related industries.
Commercial & Institutional is providing design and construction services for
Asian Appraisal Holdings' 21-story office building in Alabang, which will house
Fluor Daniel's high-value engineering center. Our electronics operating company,
ADP Fluor Daniel, is working on a wafer-testing facility for Analog Devices.
PACE--our operating company dedicated to Procter & Gamble--is working in 11
countries, including the Philippines, where it is building a grass-roots
consumer products plant.
[PICTURE APPEARS HERE]
Capitalizing on increased demand for electrical power throughout the Asia
Pacific region, Fluor Daniel is providing project management, engineering,
procurement, construction and start-up services for a 112-megawatt
combined-cycle cogeneration power plant in Thailand for Air Products and
Chemicals, Inc. as owner's engineer, on behalf of Bangkok Cogeneration Co.,
Ltd., a Thailand-based joint venture. Clockwise from top: Benito Lariosa, piping
engineer; John Antonovich, lead piping engineer; Somkiat Lertvittayatan,
mechanical/piping engineer; David Hunt, Air Products and Chemicals project
engineer; and Lou Chow, process engineer.
1996 Annual Report 9
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In Taiwan, Fluor Daniel reestablished its office in Taipei to take
advantage of increased opportunities in the electronics, power generation,
telecommunication, and petroleum and petrochemical industries. ADP Fluor Daniel
is providing architectural and engineering services for Mosel Vitelic's
semiconductor wafer fabrication facilities complex in Hsinchu.
Thailand's stability and pro-business policies are fostering strong
activity in the petrochemical, chemical, power, automotive, telecommunication,
electronics and maintenance industries. Duke/Fluor Daniel is providing
full-scope services for Air Products and Chemicals' 112-megawatt combined-cycle
cogeneration power plant. In 1996, we completed the $1.3 billion Rayong refinery
three months ahead of schedule, and we now are working on Chevron Far East's
benzene and paraxylene project. Our Telecommunications operating company has
growing wireline business activity in both Thailand and the Philippines.
Production, trade and investment reforms are creating opportunities in
India's power, hydrocarbon, petrochemical, steel and light industry markets, and
our high-value engineering center in New Delhi is well positioned to capitalize
on these prospects. Chemicals, Plastics & Fibers is working on a project for
DuPont, with which it has a strategic alliance, and Petroleum & Petrochemicals
is executing a detailed feasibility report for the Indian Oil Corporation's
planned refinery in Paradeep. In November 1996, Fluor Daniel signed a memorandum
of understanding with Tata Technodyne Ltd to jointly undertake engineering,
procurement and construction work in the country's core industrial sectors,
including steel, power, hydrocarbons, ports and cement.
China's long-term reforms continue to expand the market-oriented areas of
the economy, and there is award potential in the automotive, consumer product,
chemical, petrochemical, power and telecommunication industries. Our Beijing and
Shanghai offices are well positioned to capitalize on the many opportunities.
PACE is executing phase one of Procter & Gamble's Tidalwave multiproducts plant
in Tianjin, which will be its largest facility in the Asia Pacific region.
Petroleum & Petrochemicals is working on Shell's lube oil blending facility and
providing front-end engineering for Chevron's polystyrene plant. Full-scope
services are being provided by Chemicals, Plastics & Fibers for two expansion
projects: the DuPont nylon plant in Qingdao and the Cabot Carbon Black Facility
production unit in Shanghai.
Korea has embarked on a massive infrastructure program, and Fluor
Daniel's high-technology capabilities give us a competitive edge. Our
Infrastructure operating company and its consortium members were selected to
build a passenger terminal at Inchon International Airport in Seoul--Fluor
Daniel's first infrastructure project in Korea. Petroleum & Petrochemicals is
working on the billion-dollar Yukong refinery modernization and expansion
project.
Fluor Daniel continues to pursue public works projects in Japan,
leveraging our relationships with Japanese contractors. Teamed with Obayashi
Corporation, we're designing and constructing the Kyoto train station terminal.
[PHOTOGRAPH APPEARS HERE]
PACE, Fluor Daniel's operating company dedicated to serving
Procter & Gamble, supports that client's global expansion, which
includes a new consumer products plant in the Philippines. Fluor
Daniel's high-value engineering center in Manila is providing
engineering, procurement, construction management and start-up
services. From left: Bernadette Tuazon, PDS coordinator; Anthony
Gonzales, piping application specialist; Neil Abraham, country
manager; and Delfin Bumanglag, structural application
specialist.
Fluor Corporation 10
================================================================================
In Australia, Fluor Daniel's volume of work has grown significantly, with
an emphasis on mining, as well as power plant operations and maintenance. The
acquisition of Signet Engineering Group--an Australian-based company with
expertise in gold, diamond and mineral processing--has strengthened our
capabilities to serve these active markets. We completed a feasibility study for
Mt. Isa Mines' Enterprise Mine, are providing services for its new copper
mine--which will be one of the world's largest mines--and are managing its
copper smelter upgrade. We also are providing full-scope services for Ernest
Henry Mining Pty Ltd's gold and copper mine in Cloncurry. In mining as well as
other industries, many Australian companies are outsourcing maintenance
services. Fluor Daniel has been awarded maintenance contracts by Argyle Diamond
Mine and for Westrail's standard gauge railway system. For nearly 30 years, we
also have been providing restoration and maintenance services for Hamersley Iron
Pty Ltd's railway in Western Australia.
Latin America
Improved political stability and growing, market-focused economies are fostering
a more favorable environment for capital investment in Latin America. While a
decline in copper pricing has dampened mining expenditures, significant activity
continues. Across a variety of industries, the greatest opportunities for Fluor
Daniel are expected in Venezuela, Chile, Brazil, Mexico, Argentina and Peru.
[PHOTOGRAPH APPEARS HERE]
Increased investment in Argentina's emerging mining industry has
expanded Fluor Daniel's opportunities in Latin America. Through
strategic partnering with SADE, one of Argentina's leading
engineering and construction firms, Fluor Daniel is providing
engineering, procurement and construction services for an 80,000
tons-per-day copper concentrator and associated facilities for
Minera Alumbrera Limited. From left: Chief Field Engineer David
Stayshich, Superintendents Joe Wells and Mickey Misetich, and
Field Engineers Jose Luis Papis and Jim Breuer.
Having the strongest free-market economy in the region, Chile's
participation in Mercosur--the trading block which includes Argentina, Brazil,
Paraguay and Uruguay--will help it and the southern region diversify its
markets. In the mining industry, Fluor Daniel continues to work for Escondida on
an oxide leach project and has been awarded a $350 million, three-year services
partnership contract to operate and maintain its camp facility in Antofagasta.
With rich natural resources, a diversified industrial base and a strong
privatization campaign, Argentina's expanding economy offers opportunities in
mining, hydrocarbons, power generation, automotive and other consumer products.
Partnered with SADE, one of Argentina's leading engineering and construction
firms, the Mining operating company is designing and building a copper
concentrator for Minera Alumbrera Limited--our first major project in Argentina.
We are providing a full complement of services to the Cerro Vanguardia gold mine
project.
The increasingly market-oriented Peruvian economy is creating
opportunities, predominantly in natural resources. Production & Pipelines is
leading one of the two consortium teams vying in a design competition for an
alliance contract for Shell and Mobil's $2 billion Camisea gas development
program in the Peruvian jungle. When complete, it will transport natural gas
across the Andes mountains to Lima.
Brazil's natural resources remain a major, long-term economic strength,
and its large population provides a strong consumer market. Power Services is
providing management and outage services on boilers in the Bahia state
1996 Annual Report 11
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for Copene. In the mining industry, we are providing services to the Samarco
Iron Pelletizing project.
In Venezuela, oil and energy-related investments continue to dominate.
Fluor Daniel's 25-year presence and its five-year equity investment in
Tecnofluor give us a strong position. Petroleum & Petrochemicals and Tecnofluor
are providing services to revamp a desulfurization complex at Lagoven's Amuay
refinery. In Trinidad and Tobago, Production & Pipelines is part of an alliance
which is providing full-scope services for Amoco's LNG Upstream development
project.
Mexico is gaining investors' confidence as the chemical, refining, power,
telecommunication, petrochemical, pharmaceutical and automotive markets expand.
ICA Fluor Daniel, jointly owned by Fluor Daniel and Grupo ICA, recently
installed a 5,300-kilometer fiber-optic network for Avantel, a joint venture
between MCI and Banamex. In the power industry, ICA Fluor Daniel successfully
completed construction of the 700-megawatt Tuxpan oil-fired plant and
200-megawatt Temescal hydro facility. Additionally, it began engineering and
construction on the 600-megawatt Samalayuca combined-cycle facility and
100-megawatt cogeneration facility at Altamira. ICA Fluor Daniel also is working
with Automotive & Manufacturing on Navistar's new truck assembly plant, and with
Chemicals, Plastics & Fibers on a silica plant. In Puerto Rico, our primary
opportunities are in the electronics, power, petrochemical and pharmaceutical
industries.
[PHOTOGRAPH APPEARS HERE]
Positioned to capitalize on renewed growth in the pharmaceutical
and biotechnology industries, the PharmBio & Chemicals operating
company formed a strategic alliance with Genentech, a leading
biotechnology company, to provide project-related engineering
services for its manufacturing and research and development
facilities in South San Francisco. Front row, from left: Ron
Keich, senior piping designer; K.K. Wong, senior electrical
engineer; Nancy Wong, process engineer; Annette Baird, senior
process engineer; James Panek, Genentech vice president,
Engineering and Facilities; Fred Nowbakh, senior HVAC engineer.
Back row, from left: Ramesh Kamath, Genentech director, Project
Engineering; Karen Brockwell, Genentech director, Process &
Automation Engineering; and Allan Wenzel, regional manager.
Middle East and Africa
As a leader in the refining and production industry, we are diversifying our
market participation across the Middle East, particularly in Saudi Arabia,
Kuwait, the United Arab Emirates, Qatar, Oman, as well as other countries on the
Mediterranean. Opportunities are arising in the petrochemical, chemical and
power markets, primarily in Saudi Arabia, Kuwait and Abu Dhabi. Gas-to-power
projects are developing throughout the region.
With more than 25 percent of the world's petroleum reserves, Saudi Arabia
offers significant opportunities. Petroleum & Petrochemicals is providing
initial engineering services for a proposed $2.1 billion petrochemical facility
in Yanbu. Additionally, we are providing full-scope services, including program
management, for Saudi Chevron Petrochemical's Aromax(R) project in Jubail.
In Kuwait, Chemicals, Plastics & Fibers is working on the $1.4 billion
Equate petrochemical plant. Front-end engineering and design work for Abu Dhabi
National Oil Company's planned $1.8 billion Ruwais oil refinery expansion
continues for Petroleum & Petrochemicals.
Reflecting the positive new democracies of the South African region,
Fluor Daniel re-acquired Fluor S.A. (Pty) Limited, a South African-based
engineering and construction company which was divested by Fluor 10 years ago.
The 35-year old company's strong reputation and experience provide it the entry
to serve a multitude of diverse markets. The Food & Beverage operating company
is providing diverse services to a variety of clients, such as
Fluor Corporation 12
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African Products and Pillsbury Brands Africa, as well as being part of an
alliance to investigate the feasibility of a grass-roots facility for South
African Breweries. Our Metals company has teamed with a local consulting firm to
expand Hulett's aluminum rolling mill. Power Services is performing maintenance
services at seven power plants for Eskom, which supplies more than half the
electrical power for the African continent and 97 percent of the power for the
Republic of South Africa. Carlton Paper selected our Pulp & Paper operating
company to provide services for its recycled paper deinking plant. Work in the
refining and synfuels sector continues, particularly with Sasol, Caltex, Shell
and British Petroleum. In Chad and Cameroon, Production & Pipelines is providing
preliminary project management services for a planned oil field development and
transportation project for an Exxon-led group. Mining studies are being
performed in Zambia, Zaire and Zimbabwe, and future work is anticipated.
North America
The U.S. market has opportunities across the infrastructure, government,
electronics, power, food, chemical, pharmaceutical and automotive industries. In
February, a consortium led by Fluor Daniel was chosen to begin development of
the first high-speed passenger rail system in the U.S. Subject to obtaining
financing, the Florida Overland EXpress--or FOX--rail system will cost
approximately $5 billion. Additionally, our work on Denver's E-470 toll road has
strengthened our reputation and experience to serve this market.
[PHOTOGRAPH APPEARS HERE]
Fluor Daniel is using its global resources and diverse strengths
to provide program management services to the U.S. Department of
Energy's Hanford project, one of the largest and most complex
environmental cleanup efforts in the country. From left: Jennifer
Curtis, general counsel; Larry Olguin, project director,
Facility Stabilization; Gus Mattsson, project director, Waste
Management; Mike Skriba, project director, Engineering &
Technology; Nancy Williams, project director, Spent Nuclear
Fuel; and Sal Marchetti, project director, Tank Waste
Remediation System.
Government Services is focusing on capturing a larger share of work from
the U.S. Department of Energy (DOE), Department of Defense and other government
agencies. In August, we won a $5 billion, five-year contract to lead a team
providing cleanup, management and integration services at the DOE's Hanford site
in Washington. At the DOE's Ohio site, Fluor Daniel Fernald developed an
innovative plan to accelerate cleanup of the site, which will result in project
completion more than a decade ahead of the original schedule. This approach is
being applied by the DOE at numerous sites.
Additionally, Government Services won the right to exclusively negotiate
for a seven-year contract to design and manage construction at the Los Alamos
National Laboratory in New Mexico. We also have been selected by the Federal
Emergency Management Agency to negotiate on a five-year Infrastructure Support
Services contract.
In October, Fluor Daniel acquired Marshall Contractors and integrated its
microelectronics business with ADP Fluor Daniel. This unit is providing services
for a wafer fabrication facility in Washington for WaferTech. Our PharmBio &
Chemicals operating company also will work closely with Marshall to leverage its
expertise and client relations in the pharmaceutical industry.
As U.S. utilities transition to a deregulated environment, they are
reducing expenditures and improving efficiency by outsourcing maintenance and
capital projects. Power Services has established a strategic alliance with
Southern California Edison to provide maintenance and technical services at all
of its fossil-fuel plants. In the nuclear power sector, we are supplying ongoing
support at Union
1996 Annual Report 13
================================================================================
Electric sites, and are providing maintenance services to Baltimore Gas &
Electric in Maryland, as well as to 14 other nuclear units across the U.S. In an
alliance with Primary Energy, a subsidiary of NIPSCO Industries, we continue to
successfully build modern, environmentally sensitive, low-cost energy facilities
at major industrial sites.
Increased sales volume in the pharmaceutical industry is creating
opportunities for PharmBio & Chemicals. We are providing a variety of services
for MedImmune's vaccine facility. Strategic alliances were formed this year with
Eli Lilly to provide services for its biotechnology facilities worldwide, and
with Genentech to assist with its capital projects.
In the rapidly expanding wireless telecommunication market, we're working
with AT&T Wireless Services and Aerial Communication in the U.S., and are
supporting AT&T in Taiwan and other international locations. Additional
telecommunication, radio frequency and network engineering work has come from
the formation of a Fluor Daniel and Mobile Systems International joint-venture
company, Wireless Engineering Services Group. In the emergency communications
market, we have ongoing contracts with the cities of Chicago, San Francisco, San
Diego and Phoenix.
The automotive industry is expanding globally, and consumer demand is
fueling the manufacturing segment. Automotive & Manufacturing continues to work
with global automotive industry leaders on projects, such as the Mercedes Benz
assembly plant in Alabama and ongoing work with Honda in Ohio. On the
manufacturing side, we are building state-of-the-art, automated distribution
centers for Levi Strauss & Co. in the U.S. and the U.K.
[PHOTOGRAPH APPEARS HERE]
The growing demand for telecommunication services worldwide
is creating new growth opportunities for Fluor Daniel. The
Telecommunications operating company assisted AT&T in the
build-out of its state-of-the-art wireless communications
system in Chicago by providing engineering, procurement and
construction management services. Jim McLean, project
director, left, and Judith Hiatt-Rabb, project procurement
manager.
Marathon Architects/Engineers/Planners, a division of our Pulp & Paper
operating company, and Commercial & Institutional are working together on
Rayonier's new research and development facility in Georgia. Pulp & Paper has a
long-term presence doing both large- and small-scale projects for Mead
Corporation at its Ohio facility.
Our offices in Canada continue to serve a growing domestic market in
mining and hydrocarbons, while leveraging their presence to serve Canadian
clients in pursuit of export business worldwide. PharmBio & Chemicals is
performing design and construction services of an ethanol production plant for
Commercial Alcohols.
Europe
The drive for greater efficiency and cost competitiveness on a global scale is
causing Western European clients to consolidate and restructure. The chemical
industry continues to invest. Central and Eastern Europe are focused on
upgrading industrial facilities and infrastructure. Political and economic
uncertainty in Russia continues to slow near-term development, but Russia holds
significant market potential for the long-term.
In Western Europe, our Chemicals, Plastics & Fibers operating company is
working for Eastman Chemicals in Rotterdam, Imperial Chemical Industries in the
U.K. and DuPont in several locations. In March, Fluor Daniel and Bertrams formed
Chemgineering Holding Ltd, which strengthens our pharmaceutical,
Fluor Corporation 14
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biotechnology and fine chemical capabilities in this region. We were awarded
pharmaceutical projects in Ireland, Belgium and Germany, and continue to support
Procter & Gamble's European operations. In The Netherlands, Petroleum &
Petrochemicals is completing the multibillion-dollar Per+ refinery project for
Shell, and Production & Pipelines is designing and building a major underground
gas storage facility for NAM, a company jointly owned by Shell and Exxon.
In the Central European market, investment is being made in the Polish
refining industry to prepare it for market deregulation in 1998. Our ownership
of Prosynchem has opened doors for us in the hydrocarbon market, including the
revamp of a refinery's crude distillation plant in Plock. Fluor Daniel,
Prosynchem and Prochem--a Polish industrial engineering company in which we have
a 35 percent ownership interest--are serving as managing contractor for a
refinery modernization for Rafineria Gdanska S.A. In Slovakia, Fluor Daniel and
Mitsubishi Heavy Industries are working on Slovnaft A.S.' hydrocracking plant.
Prochem is working on a variety of projects in the chemical and consumer product
markets as well.
The Former Soviet Union, particularly the Caspian Sea area, holds
increasing opportunities, primarily in the upstream oil and gas market.
Production & Pipelines is providing full-scope services for the northern route
of Azerbaijan International Operating Company's Early Oil Transportation System
pipeline, and is working with several organizations on potential oil and gas
projects which may result from new emphasis in the Caspian and surrounding
fields.
[PHOTOGRAPH APPEARS HERE]
Fluor Daniel's strong client focus emphasizes building long-term
relationships to sustain continuing business opportunities.
Based on significant past project experience worldwide with both
Imperial Chemical Industries (ICI) and Union Carbide, the
Chemicals, Plastics & Fibers operating company is the managing
contractor for a joint project to expand an existing ethylene
oxide plant and build a new ethylene glycol facility in the U.K.
From left: Brian Dovner, safety officer; John Bartlett,
construction manager; John Norman, project manager; John
Wilkinson, ICI construction engineer; John Arrowsmith, piping
superintendent; Dave Proctor, civil superintendent; and Keith
Largue, instrument superintendent.
Diversified Services
The Diversified Services Group is furthering our diversification strategy to
capitalize on service industry opportunities by expanding existing businesses
and leveraging the market potential of our core competencies. This strategy
offers significant growth potential and minimizes the cyclical-nature effects of
the engineering and construction business.
In most cases, Diversified Services' operating companies carry profit
margins higher than our traditional engineering and construction business, and
because of their service nature, they generally do not generate significant
backlog. As one of the fastest growing parts of our company, Diversified
Services has been achieving rapid growth for the past several years, and the
prospects for future growth remain strong.
ACQUION
ACQUION, a global provider of supply chain management and related services,
brings companies together to buy, sell, trade and barter, emphasizing the use of
information technology.
It has developed several proprietary electronic commerce systems. Global
Electronic Trading Services (GETS) offers immediate access to electronic
catalogs and bid boards, on-line procurement applications, electronic data
interchange, and procurement card capabilities. BASE (Buyer and Seller Exchange)
serves as a central site for industrial electronic catalogs, helping buyers seek
out a special category of industrial commodity suppliers.
1996 Annual Report 15
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In June, ACQUION and Duke Power Company teamed to deliver all aspects of
supply chain management to the utility industry.
American Equipment Company
American Equipment Company (AMEC) sells, rents and maintains construction tools
and equipment worldwide. It is operating in 10 countries and is working to:
expand operations in existing territories; partner with companies to expand its
markets and customer base; target strategic acquisitions to improve its
distribution network; and use innovative marketing methods to market used
equipment via the Internet.
AMEC was ranked by Rental Equipment Register as the fifth largest
equipment rental company in the U.S. It is expanding in Latin America with the
establishment of new operations in Mexico and Chile. In the Asia Pacific region,
AMEC has offices in Jakarta, Singapore and Manila, where it has a joint venture
with a Philippine company to lease and supply construction equipment in the
Philippines and China. AMEC has a joint venture in Shanghai, China, to rent
large cranes on a fully operated basis. This year's acquisition of S&R
Equipment, with six locations in the Midwest U.S., allows AMEC to serve the
region's automotive and manufacturing industries.
[PICTURE APPEARS HERE]
American Equipment Company's equipment yard in Santiago, Chile, serves Fluor
Daniel projects and the broader equipment market in South America. The company
has demonstrated dramatic global growth as it has aggressively marketed its
services to new clients and expanded in Latin America and the Asia Pacific
region. From left: Victor Olivero, shop foreman; Guisella Echeverria, rental
coordinator; and Hector Duran, procurement specialist.
Environmental
In May, Fluor Daniel acquired 55 percent of Groundwater Technology, Inc., (GTI),
through a merger with Environmental Services to form Fluor Daniel GTI. GTI's
environmental technologies, and its remediation and site closure implementation
capabilities, combined with Fluor Daniel's project management expertise and
resources, create a uniquely competitive company in the commercial and
government arenas. By combining environmental expertise with industry-specific
process knowledge, Fluor Daniel GTI and Pulp & Paper are providing broad-based
environmental services to one of the largest U.S. paper, paperboard and
packaging companies at its 150 North American facilities.
Fluor Daniel retained certain environmental capabilities in the
Environmental Strategies operating company, which consists primarily of an
investment in Molten Metal Technology (MMT); engineering, procurement and
construction of water and wastewater treatment facilities; and Total Business
Solutions (TBS). TBS develops and implements integrated solutions for clients'
environmental challenges, including efficient downsizing, maximizing financial
returns from divestiture or redeployment of fixed assets. TBS reduces
environmental liabilities and optimizes financial returns for the divestiture of
environmentally impaired surplus properties. Environmental Strategies is
providing services to MMT on a catalytic extraction process (CEP) project for a
recycling plant in Texas, and also to M4 Environmental L.P., which utilizes
MMT's
Fluor Corporation 16
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proprietary CEP technology to process hazardous and radioactive waste for
the U.S. Departments of Energy and Defense and the U.S. Enrichment Corporation,
and mixed waste for commercial clients.
Facility & Plant Services
Facility & Plant Services (F&PS) sells optimized work process solutions for
clients' facilities and operating business problems. With projects underway
around the world, F&PS serves a range of process and manufacturing clients with
a client-focused, results-oriented strategy.
Expanding through acquisitions and partnerships, F&PS purchased the
U.K.'s T.A. Group Limited--a maintenance, consultancy and manpower services
company--and is integrating its operations to provide pan-European capabilities.
Partnerships in Asia are focused on serving Singapore, Indonesia, Malaysia and
Thailand. F&PS' presence in Latin America and Mexico continues to expand with
additional projects.
To provide total solutions to clients, the Consulting operating company
was integrated into several operating divisions of F&PS. Global Location
Strategies offers location analysis, and incentive and acquisition negotiations
on behalf of owners, as well as other services, such as systems integration,
material distribution and logistics, computer simulation, and alignment and
process consulting.
[PICTURE APPEARS HERE]
The growing trend toward outsourcing of services is creating a strong market for
the Facility & Plant Services (F&PS) operating company. F&PS is providing
operations, maintenance and facility engineering services to six of IBM's North
American facilities. At the Tucson, Arizona, facility are, from left: Pete
Garcia, Sr., operations technician; Jim Price, industrial hygienist; Heather
Keiser, security officer; David Dryburgh, engineering coordinator; Ruben Palma,
maintenance technician; Star McNally, security officer; Rodney Jeter, tool and
model maker; Pete Garcia, Jr., maintenance technican; and Don Garcia, tool and
model maker.
F&PS captured a significant share of operations and maintenance services
for Imperial Chemical Industries, working closely with the Chemicals, Plastics &
Fibers operating company. It teamed with Automotive & Manufacturing to provide
maintenance services to Volkswagen's production facility in Argentina. The
Operations and Maintenance Services division is working at six of IBM's North
American facilities--one of the largest total facilities management contracts to
be awarded in the private sector.
Technologies
Fluor Daniel Technologies (FDT) identifies profitable business opportunities in
technology-based ventures. It participates with partners to commercialize
ventures by supplying people and resources, and helping with marketing and
distribution.
During the past year, FDT has launched new businesses in the areas of
materials transfer, metals purification, accelerated battery recharging,
alternative explosive methods, process optimization solutions, close-range
photogrammetry and information management. One example is Soli-Flo, a joint
venture company of FDT and Xetex Corporation, which offers the dredging and
environmental remediation industries' first low-turbidity sediment removal
technology.
FDT has launched the Prometheus Alliance, linking together a number of
Fortune 500 companies to develop and leverage a portion of their intellectual
property and other resources. A member's unused technology could be
commercialized through the alliance, providing revenue from previously idle
assets.
1996 Annual Report 17
===============================================================================
TRS Staffing Solutions
TRS Staffing Solutions (TRS) is a global supplier of technical,
professional--and in certain markets--office and administrative support staffing
solutions. It provides premium engineering and design, information technology,
accounting, finance and administrative support personnel in temporary, contract
and direct-hire positions. In 1996, TRS opened 13 offices in the U.S., Canada,
Singapore, South Africa, Australia and the U.K.
TRS has become a significant force in the Australian and European
staffing markets. Acquisitions have provided entry into certain market niches
and provided management expertise in the specialist staffing sectors of
information technology and services, and accounting and finance. The 1995
acquisition of Management Resources Group in the U.K., the 1996 acquisitions of
Phoenix Contracting Pty Ltd in Australia and T.A. Group Limited in the U.K.,
along with TRS' January 1997 acquisition of the ConSol group in the U.S., are
broadening its global presence, expanding its information systems and technology
staffing capabilities and heightening its reputation in a fast-growing industry.
[PHOTOGRAPH APPEARS HERE]
ADP Fluor Daniel is teamed with Fluor Constructors, Duke/Fluor
Daniel, Fluor Daniel GTI and American Equipment Company to
provide engineering services and manage construction of
WaferTech's wafer fabrication facility in Camas, Washington. The
acquisition of Marshall Contractors further expands Fluor
Daniel's strong capabilities to serve the global electronics
market. From left: Ruben Sermeno, FCII general superintendent;
Chris Brown, AMEC project manager; Steve Martin, ADP Fluor
Daniel program manager; Arthur Chuang, WaferTech facilities
manager; and Frank Chen, ADP Fluor Daniel civil engineer.
Fluor Constructors International
Fluor Constructors International, Inc. (FCII) is the union arm of Fluor
Corporation. The company provides construction management and direct-hire
construction expertise to Fluor Daniel and others in North America. On
WaferTech's wafer fabrication facility project in Washington, FCII conducted the
largest concrete slab pour in U.S. history--a two-day, continuous pour of 16,000
cubic yards of concrete to form a vibration-free slab. Additionally, FCII staffs
international projects and has employees working at numerous projects around the
world.
FCII has executed projects in virtually every business sector, performing
stand-alone construction and providing maintenance services to clients in the
U.S. and Canada. The company has served a diverse range of government agencies
as well. FCII is one of only a few construction and maintenance contractors to
be ISO-9002 certified.
Fluor Corporation 18
===============================================================================
C o a l
[CARTOON APPEARS HERE]
Coal
A.T. Massey, through its operating subsidiaries, produces high-quality,
low-sulfur steam coal for the electric generating industry and industrial
customers, and metallurgical coal for the steel industry. Massey delivered
strong operating profit growth in 1996, up 21 percent to $135 million. Total
volume of coal sold increased 13 percent to 31 million tons.
Growth in operating profit was due to increased sales volume and lower
costs. Massey's strategy is to ensure that its production facilities, reserve
base and transportation options meet client needs, while providing maximum
flexibility to quickly shift production to the best market opportunities within
the steam, industrial and metallurgical coal markets, including increased sales
to export markets. This strategy has been enhanced by the success in further
reducing costs through productivity improvements and reserve selection, and it
allows Massey to focus on opportunities which provide the highest possible
profit margin.
Massey is now the fastest-growing coal company in the Eastern U.S. and
the leading coal producer in Central Appalachia. Massey has been investing in
its future, adding high-quality, low-sulfur coal reserves, and increasing its
production capacity and flexibility in order to deliver sustained growth.
Since 1991, Massey has doubled its reserve base of high-quality,
low-sulfur coal. These new reserves are located near existing Massey operations
and provide increased production on a highly cost-effective basis. Focusing
operations in a concentrated
1996 Annual Report 19
===============================================================================
[GRAPH OF COAL OPERATING PROFIT APPEARS HERE]
YEAR 89 90 91 92 93 94 95 96
- --------------------------------------------------------------------------------
DOLLARS IN MILLIONS 51 60 61 80 81/*/ 95 111 135
================================================================================
/*/ Excludes nonrecurring charge of $10 million
[GRAPH OF COAL SOLD MILLIONS OF SHORT TONS APPEARS HERE]
YEAR 89 90 91 92 93 94 95 96
- --------------------------------------------------------------------------------
PRODUCED/PURCHASED 17/9 19/8 17/7 18/4 21/2 24/1 27 31
================================================================================
[GRAPH OF COAL RESERVES APPEARS HERE]
YEAR 89 90 91 92 93 94 95 96
- --------------------------------------------------------------------------------
MILLIONS OF
SHORT TONS 737 784 761 972 1,089 1,411 1,499 1,549
================================================================================
[PHOTOGRAPH APPEARS HERE]
Massey Coal's new longwall at the Upper Big Branch mine in West
Virginia is significantly improving both productivity and
safety. In April, crews started mining the longwall's first
panel, a block of coal 1,000 feet wide and three miles long. In
the foreground: Kevin Lovely, mechanic/computer specialist; and
Eugene Williams and J.D. Pettry, general laborers.
geographical area provides cost advantages which accrue from greater
utilization of production capacity and favorable distribution logistics. These
investments have positioned the company to capitalize on growth opportunities in
metallurgical and steam coal markets, as well as the export market. In 1996,
metallurgical coal sales volume increased 17 percent, while steam coal sales
volume increased 11 percent. Export coal sales volume increased 47 percent from
3.8 million tons in 1995 to 5.6 million tons in 1996.
Massey is now the largest coal shipper on both the Norfolk Southern and
the CSX railroads. Massey's diversity of transportation options--three rail
lines, the Ohio river barge system and truck delivery--adds to Massey's overall
cost competitiveness and market flexibility.
During 1996, two new mining operations --Eagle Energy and Green
Valley--were acquired. Utilizing Massey's exceptional capability to improve
productivity and reduce costs, Eagle Energy substantially improved its
performance and profitability. The Green Valley acquisition added to Massey's
high-quality reserves. At existing operations, Massey installed a longwall,
developed five new mines, expanded a coal preparation plant and constructed a
new railroad loadout.
Massey's productivity, already near the highest in the industry, is
improving further now that its first longwall is running at the Upper Big Branch
mine in Raleigh County, West Virginia. A longwall mining system greatly
increases productivity and reserve recovery in large coal seams. A second
longwall was acquired with the purchase of Eagle Energy.
Fluor Corporation 20
================================================================================
Increased production from the new longwall is being processed at Massey's
state-of-the-art preparation plant at Marfork. The Marfork plant has been
expanded three times in the past two years to handle increasing shipments of
metallurgical coal and is a key element in Massey's strategy to expand market
share. Capacity at Marfork has increased 85 percent, and the plant now is
handling more than 7 million tons annually.
Massey's high-quality, low-sulfur reserve base and its ability to
increase production cost-effectively position it to capitalize on either volume
or price increases which may result from increased demand for low-sulfur coal by
electric utilities to meet clean air requirements, while fully capitalizing on
existing strength in the metallurgical coal market. Overall growth in U.S.
demand for electricity increased approximately 2.5 percent in 1996. A decline in
the contribution from nuclear-generated power for certain Massey customers
further enhanced demand for coal-fired power.
Opportunities in the export market are expanding as a result of
privatization and reduction or elimination of government subsidies for European
mines. To capitalize on this opportunity, Massey has expanded its sales coverage
of Western and Central Europe.
Massey is well positioned to take advantage of future opportunities which
may be created by deregulation of the utility industry. As deregulation forces
utilities to become more cost competitive, they will seek energy providers, such
as Massey, which can help them improve performance through superior product
quality, better service and lower cost. In a deregulated environment, coal ranks
among the lowest-cost energy sources, and may gain an increasing advantage as
nuclear plants age and face recommissioning and waste disposal problems.
[PICTURE APPEARS HERE]
Expansion of Massey's state-of-the-art Marfork Preparation Plant in West
Virginia was completed this year, increasing processing capacity by 85 percent
to 2,400 tons per hour. From left: Macey Biggers, manager, Quality Control;
Lance Compton, plant superintendent; and Randy Shrewsberry, plant maintenance
superintendent.
Worker safety is of paramount importance at Massey and is ensured by a
Safety First program, exceeding federal and state requirements. Safety
performance has been improved by more than 40 percent since 1989 with the
non-fatal days lost incidence rate dropping from 6.4 to 3.6 in 1996. Safety is
engineered into every phase of coal production and monitored by a safety audit
program, which reviews all aspects of the mining operation and weighs each
operation against the toughest safety standards in the coal industry.
Massey's strategy is to ensure that it meets client needs with its modern
production facilities, adequate reserve base and flexible transportation
options. Profitability growth is maintained by a combination of strategies,
productivity improvements, reserve selection, and focusing on markets providing
the highest profit margin. Massey is positioned to quickly shift production to
the best market opportunities within the steam, industrial and metallurgical
coal markets.
1996 Annual Report 21
===============================================================================
Financials
[CARTOON APPEARS HERE]
Financial Table of Contents
24 Management's Discussion and Analysis
28 Consolidated Balance Sheet
30 Consolidated Statement of Earnings
31 Consolidated Statement of Cash Flows
32 Consolidated Statement of Shareholders' Equity
33 Notes to Consolidated Financial Statements
42 Segment Information
44 Reports of Management and Independent Auditors
45 Quarterly Financial Data
Fluor Corporation 22
================================================================================
Operating Statistics
$ in millions / Year ended October 31, 1996 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
Engineering and Construction
Work performed $ 9,870 $ 8,379 $ 7,673 $ 7,110 $ 5,889 $ 5,792
Revenues 10,054 8,452 7,718 7,134 5,904 5,813
Operating profit 320 286 259 221 191 166
New awards 12,488 10,257 8,072 8,001 10,868 8,532
Backlog $ 15,757 $ 14,725 $ 14,022 $ 14,754 $ 14,706 $ 11,181
Salaried employees 26,568 18,090 16,433 17,215 17,443 17,602
----------------------------------------------------------------------------------------
$ in millions / Year ended October 31, 1990 1989 1988
- -----------------------------------------------------------------------------------
Engineering and Construction
Work performed $ 6,353 $ 5,241 $ 4,268
Revenues 6,383 5,312 4,225
Operating profit 135 117 51
New awards 7,632 7,135 5,955
Backlog $ 9,558 $ 8,361 $ 6,659
Salaried employees 19,829 17,519 15,576
---------------------------------------
$ in millions / At October 31, 1996 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
Backlog by Group and Location
Industrial $ 6,496 41% $ 4,516 31% $ 3,564 25% $ 3,449 23% $ 3,737 25% $ 4,127 37%
Process 4,903 31 6,671 45 7,668 55 7,430 50 6,305 43 5,043 45
Power/Government 3,621 23 3,275 22 2,369 17 3,212 22 3,804 26 1,445 13
Diversified Services 737 5 263 2 421 3 663 5 860 6 566 5
---------------------------------------------------------------------------------------------------------------
Total backlog $15,757 100% $14,725 100% $14,022 100% $14,754 100% $14,706 100% $11,181 100%
===============================================================================================================
United States $ 7,326 46% $ 6,666 45% $ 6,802 49% $ 9,045 61% $10,649 72% $ 7,915 71%
Asia Pacific 4,402 28 3,303 23 1,662 12 1,679 11 608 4 377 3
EAME* 2,677 17 3,088 21 4,387 31 3,178 22 2,389 17 2,174 20
Americas 1,352 9 1,668 11 1,171 8 852 6 1,060 7 715 6
---------------------------------------------------------------------------------------------------------------
Total backlog $15,757 100% $14,725 100% $14,022 100% $14,754 100% $14,706 100% $11,181 100%
===============================================================================================================
$ in millions / At October 31, 1990 1989 1988
- ---------------------------------------------------------------------------
Backlog by Group and Location
Industrial $3,592 38% $ 4,136 49% $ 3,100 47
Process 4,434 46 3,144 38 2,612 39
Power/Government 1,058 11 777 9 847 13
Diversified Services 474 5 304 4 100 1
-----------------------------------------------------
Total backlog $9,558 100% $ 8,361 100% $6,659 100%
=====================================================
United States $6,724 70% $ 6,404 77% $5,298 80
Asia Pacific 812 9 287 3 251 4
EAME* 1,345 14 634 8 494 7
Americas 677 7 1,036 12 616 9
-----------------------------------------------------
Total backlog $9,558 100% $ 8,361 100% $6,659 100%
=====================================================
* EAME represents Europe, Africa and the Middle East.
$ in thousands / in thousands of short tons
Year ended October 31, 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------------
Coal
Revenues $960,827 $849,758 $767,725 $716,591 $696,721 $758,481 $865,809 $815,558 $783,719
Operating profit $134,526 $111,033 $ 95,198 $ 70,680 $ 80,281 $ 60,709 $ 60,241 $ 51,007 $ 50,375
Produced coal sold
Steam coal 17,520 15,777 16,702 16,036 13,711 13,536 13,058 11,942 11,057
Metallurgical coal 13,571 11,633 7,133 5,156 3,827 3,446 5,538 4,640 3,968
------------------------------------------------------------------------------------------------------
Total produced coal sold 31,091 27,410 23,835 21,192 17,538 16,982 18,596 16,582 15,025
Purchased coal sold* -- -- 1,284 2,302 4,402 6,578 7,989 9,300 10,038
Total employees 2,809 2,479 1,954 1,431 1,252 1,133 1,214 1,435 1,232
------------------------------------------------------------------------------------------------------
* Purchased coal sales were immaterial in 1996 and 1995.
1996 Annual Report 23
================================================================================
Selected Financial Data
In millions, except per share amounts 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
Consolidated Operating Results
Revenues $ 11,015.2 $ 9,301.4 $ 8,485.3 $ 7,850.2 $ 6,600.7
Earnings from continuing operations before taxes 413.2 362.2 303.3 242.2 215.4
Earnings from continuing operations, net 268.1 231.8 192.4 166.8 135.3
Earnings (loss) from discontinued operations, net -- -- -- -- (96.6)
Cumulative effect of change in accounting principle, net -- -- -- -- (32.9)
Net earnings 268.1 231.8 192.4 166.8 5.8
Earnings per share
Continuing operations 3.17 2.78 2.32 2.03 1.65
Discontinued operations -- -- -- -- (1.18)
Cumulative effect of change in accounting principle -- -- -- -- (.40)
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings per share $ 3.17 $ 2.78 $ 2.32 $ 2.03 $ .07
Return on average shareholders' equity 17.4% 17.6% 17.1% 17.4% .6%
Cash dividends per common share .68 $ .60 $ .52 $ .48 $ .40
Consolidated Financial Position
Current assets $ 1,796.8 $ 1,411.6 $ 1,258.4 $ 1,309.1 $ 1,138.6
Current liabilities 1,645.5 1,238.6 1,021.3 930.9 845.4
----------------------------------------------------------------------
Working capital 151.3 173.0 237.1 378.2 293.2
Property, plant and equipment, net 1,677.7 1,435.8 1,274.4 1,100.9 1,046.9
Total assets 3,951.7 3,228.9 2,824.8 2,588.9 2,365.5
Capitalization
Long-term debt 3.0 2.9 24.4 59.6 61.3
Shareholders' equity 1,669.7 1,430.8 1,220.5 1,044.1 880.8
----------------------------------------------------------------------
Total capitalization $ 1,672.7 $ 1,433.7 $ 1,244.9 $ 1,103.7 $ 942.1
Percent of total capitalization
Long-term debt .2% .2% 2.0% 5.4% 6.5%
Shareholders' equity 99.8% 99.8% 98.0% 94.6% 93.5%
Shareholders' equity per common share $ 19.93 $ 17.20 $ 14.79 $ 12.72 $ 10.81
Common shares outstanding at October 31 83.8 83.2 82.5 82.1 81.5
Other Data
New awards $ 12,487.8 $10,257.1 $ 8,071.5 $ 8,000.9 $10,867.7
Backlog at year end 15,757.4 14,724.9 14,021.9 14,753.5 14,706.0
Capital expenditures 392.4 318.9 236.6 171.5 287.0
Cash provided by operating activities $ 406.9 $ 366.4 $ 458.6 $ 188.7 $ 306.1
In millions, except per share amounts 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------------------
Consolidated Operating Results
Revenues $ 6,572.0 $7,248.9 $ 6,127.2 $5,008.9
Earnings from continuing operations before taxes 228.4 153.6 135.6 62.0
Earnings from continuing operations, net 153.1 119.4 84.1 38.6
Earnings (loss) from discontinued operations, net 11.0 35.2 28.6 21.6
Cumulative effect of change in accounting principle, net -- -- -- --
Net earnings 164.1 154.6 112.7 60.2
Earnings per share
Continuing operations 1.87 1.47 1.04 .48
Discontinued operations .14 .43 .36 .27
Cumulative effect of change in accounting principle -- -- -- --
--------------------------------------------------------
Net earnings per share $ 2.01 $ 1.90 $ 1.40 $ .75
Return on average shareholders' equity 20.2% 23.3% 21.5% 14.2%
Cash dividends per common share .32 $ .24 $ .14 $ .02
Consolidated Financial Position
Current assets $ 1,159.5 $1,222.8 $ 1,036.4 $1,001.0
Current liabilities 848.2 984.0 797.7 786.1
-------------------------------------------------------
Working capital 311.3 238.8 238.7 214.9
Property, plant and equipment, net 1,092.7 925.3 775.3 729.8
Total assets 2,421.4 2,475.8 2,154.3 2,075.7
Capitalization
Long-term debt 75.7 57.6 62.5 95.0
Shareholders' equity 900.6 741.3 589.9 467.1
-------------------------------------------------------
Total capitalization $ 976.3 $ 798.9 $ 652.4 $ 562.1
Percent of total capitalization
Long-term debt 7.8% 7.2% 9.6% 16.9%
Shareholders' equity 92.2% 92.8% 90.4% 83.1%
Shareholders' equity per common share 11.10 $ 9.22 $ 7.39 $ 5.91
Common shares outstanding at October 31 81.1 80.4 79.8 79.1
Other Data
New awards $ 8,531.6 $7,632.3 $ 7,135.3 $ 5,955.2
Backlog at year end 11,181.3 9,557.8 8,360.9 6,658.6
Capital expenditures 159.7 155.7 139.2 86.3
Cash provided by operating activities $ 219.0 $ 353.1 $ 265.1 $ 17.7
See Management's Discussion and Analysis on pages 24 to 27 and Notes to
Consolidated Financial Statements on pages 33 to 43 for information relating to
significant items affecting the results of operations. The quarterly dividend
was increased from $.02 per share to $.04 per share in the second quarter of
1989, to $.06 per share in the first quarter of 1990, to $.08 per share in the
first quarter of 1991, to $.10 per share in the first quarter of 1992, to $.12
per share in the first quarter of 1993, to $.13 per share in the first quarter
of 1994, to $.15 per share in the first quarter of 1995, to $.17 per share in
the first quarter of 1996 and to $.19 per share in the first quarter of 1997.
Fluor Corporation 24
==============================================================================
Management's Discussion and Analysis
The following discussion and analysis is provided to increase understanding of,
and should be read in conjunction with, the consolidated financial statements
and accompanying notes.
Results of Operations
The company currently operates in two business segments: Engineering and
Construction and Coal. The Engineering and Construction segment provides design,
engineering, procurement, construction, maintenance and other diversified
services to clients in a broad range of industrial and geographic markets on a
worldwide basis. The Coal segment produces, processes and sells high-quality,
low-sulfur steam coal for the electric generating industry as well as industrial
customers, and metallurgical coal for the steel industry.
Engineering and Construction Segment
Total 1996 new awards were $12.5 billion compared with $10.3 billion in 1995 and
$8.1 billion in 1994. The following table sets forth new awards for each of the
segment's business groups:
$ in millions / Year ended October 31, 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
Process $ 4,061 33% $ 3,859 38% $ 4,432 55%
Industrial 6,182 49 4,313 42 2,948 37
Power/Government 1,428 11 1,873 18 516 6
Diversified Services 817 7 212 2 176 2
- ----------------------------------------------------------------------------------------------------------------
Total new awards $ 12,488 100% $ 10,257 100% $ 8,072 100%
================================================================================================================
U.S. $5,749 46% $ 4,495 44% $ 3,165 39%
Outside U.S. 6,739 54 5,762 56 4,907 61
- ----------------------------------------------------------------------------------------------------------------
Total new awards $ 12,488 100% $ 10,257 100% $ 8,072 100%
================================================================================================================
During 1996, 54 percent of new awards came from projects located outside
of the United States, compared with 56 percent and 61 percent in 1995 and 1994,
respectively. The company's future award prospects include several large-scale
international projects. The large size and uncertain timing of these projects
can create variability in the company's award pattern; consequently, future
award trends are difficult to predict with certainty. Process Group new awards
reflect this variability, as fewer large-scale project awards were received in
1996 compared with 1995 and 1994. In 1996, this was partially offset by smaller
to medium sized awards. Growth in the Industrial Group's new awards in 1996 is
due primarily to significant activity in the mining and metals sector, including
a $1 billion award for the procurement, construction and management services of
a copper and gold mine in Indonesia, in addition to increases in the
telecommunications and pharmaceuticals sectors. The growth in the Industrial
Group's new awards in 1995 compared with 1994 is due primarily to significant
new awards activity in the automotive and mining and metals operating sectors,
along with continued growth in demand for consumer products, particularly in
developing countries. The Power/Government Group's new awards in 1996 reflect
the company being selected to manage the environmental cleanup of the Department
of Energy's Hanford site, a former plutonium production facility located in
southeastern Washington state. The initial five-year contract is valued at $5
billion with potential contract extensions for an additional five years and $5
billion. This work is expected to be added to backlog on an annual basis as
congressional authority to expend the funds is received. The initial authorized
phase of $1 billion was recognized as a new award in the fourth quarter of 1996.
The growth in the Power/Government Group's new awards in 1995 compared with 1994
is due primarily to an award totaling over $1 billion relating to a power plant
to be constructed in Paiton, Indonesia. The increase in the Diversified Services
Group's new awards in 1996 was due primarily to the award of facility management
service contracts for IBM at various facilities located throughout the United
States.
Backlog at October 31, 1996, 1995 and 1994 was $15.8 billion, $14.7
billion and $14.0 billion, respectively. The Process Group's backlog continued
to decline in 1996, reflecting the work off of certain large-scale projects.
Backlog for the other engineering and construction business groups increased,
reflecting the higher new award
24
1996 Annual Report 25
================================================================================
activity as well as the impact of acquisitions. Although backlog reflects
business which is considered to be firm, cancellations or scope adjustments do
occur. Backlog has been adjusted to reflect project cancellations, deferrals,
and revised project scope and cost, both upwards and downwards. The net
reduction in backlog from project adjustments and cancellations during the year
ended October 31, 1996 was $1.6 billion, compared with $1.2 billion and $1.1
billion for the years ended October 31, 1995 and 1994, respectively.
Engineering and Construction revenues increased to $10.1 billion in 1996
compared with $8.5 billion in 1995 and $7.7 billion in 1994 due primarily to
increases in the volume of work performed. U.S. revenues increased in 1996,
reflecting both growth within the Diversified Services Group and an overall
improving U.S. economy. Export revenues increased in 1996 compared with 1995 and
1994 as the result of substantial engineering work performed in the U.S. for a
petrochemical complex in Kuwait. Excluding the Kuwait project, export revenues
continued to decline in 1996, reflecting the company's efforts to provide a
higher percentage of engineering services through its international offices.
Engineering and Construction operating profits increased 12 percent to $320
million in 1996, compared with $286 million in 1995 and $259 million in 1994 due
primarily to an increase in the volume of work performed, partially offset by
continued high levels of investment spending for strategic business development.
These expenditures are expensed as incurred and reflect the company's pursuit of
business opportunities across numerous global markets. Margins declined slightly
in 1996 from 1995 and 1994 levels due to the increased investment spending,
competitive market conditions and the mix of engineering and construction
projects. Margins were also adversely impacted by losses incurred in connection
with a mining project in South America. The majority of the company's
Engineering and Construction contracts provide for reimbursement of costs plus a
fixed or percentage fee. In the highly competitive markets served by this
segment, there is an increasing trend for cost-reimbursable contracts with
incentive-fee arrangements and fixed or unit price contracts. In certain
instances, the company has provided guaranteed completion dates and/or
achievement of other performance criteria. Failure to meet schedule or
performance guarantees can result in non-reimbursable costs which could exceed
project profit margins. The company continues to focus on improving operating
margins by lowering the cost of delivering services through its global network
of offices, allowing greater use of high-value engineering centers located in
lower cost areas of the world.
During 1996, the company continued to enhance its growth potential by
expanding existing businesses through both internal expansion and strategic
acquisitions, particularly within the Diversified Services Group. Diversified
Services continues to expand by marketing services directly to clients that
previously have been provided as support for engineering and construction
projects, while also capitalizing on emerging international markets. In most
cases, Diversified Services' operating companies typically carry profit margins
higher than traditional engineering and construction projects, and because of
their more purely service nature, they generally do not generate significant
backlog as a measure of their activity. Supplementing internal growth were the
following acquisitions: In May 1996, the company consummated a merger between
one of its subsidiaries, Fluor Daniel Environmental Services, Inc., and
Groundwater Technology, Inc., wherein the company acquired an approximate 55
percent interest in the newly named company, Fluor Daniel GTI, Inc.; in March
1996, American Equipment Company, Inc., the company's equipment rental and sales
subsidiary, acquired S&R Equipment Company, Inc.; and, in October 1996, the
company acquired Marshall Contractors, Inc.
In addition to the acquisitions noted above, during 1996 the company
finalized a number of smaller acquisitions, primarily in selected niche markets.
All acquisitions have been accounted for under the purchase method of accounting
and their results of operations have been included in the company's consolidated
financial statements from the respective acquisition dates. If these
acquisitions had been made at the beginning of 1996, results of operations would
not have differed materially from actual results.
Coal Segment
Revenues and operating profit from Coal operations in 1996 were
$961 million and $135 million, respectively, compared with $850 million and $111
million in 1995. Revenues and operating profit in 1994 were $768 million and $95
million.
25
Fluor Corporation 26
==============================================================================
Revenues increased in 1996 due primarily to increased sales volume of
both metallurgical and steam coal. Metallurgical coal revenues increased due
primarily to the continued strong demand by steel producers and the capturing of
a larger share of the metallurgical coal market. Steam coal sales benefited from
the severe winter in 1996 as electric utilities replenished their depleted
inventory levels. Gross profit and operating profit increased in 1996 compared
with 1995 due primarily to the increased sales volume and lower costs of both
metallurgical and steam coal combined with improved pricing of metallurgical
coal.
Revenues increased in 1995 compared with 1994 due primarily to increased
sales volume of metallurgical coal, which more than offset lower demand for
steam coal due to the prior year's mild winter weather conditions. Metallurgical
coal sales increased in 1995 due to the strong demand by steel producers.
Operating profit increased 17 percent in 1995 due primarily to the increased
sales volume of metallurgical coal which has a higher margin than steam coal.
Other
Net interest income for the year ended October 31, 1996 decreased $7.9 million
compared with the same period of 1995 due primarily to both lower interest
earning assets and higher interest bearing liabilities. Net interest income
increased in 1995 compared with 1994 due largely to higher rates of return on
short-term investments and the prepayment of a 13.5 percent note in the first
quarter of 1995.
Corporate administrative and general expense in 1996 was
level with 1995 as lower corporate overhead was offset by higher
performance-driven compensation plan expense. Corporate administrative and
general expense increased slightly in 1995 compared with 1994 due primarily to
higher performance-driven compensation plan expense partially offset by lower
corporate overhead.
Effective November 1, 1995, the company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). The adoption
of SFAS No. 121 had no impact on the company's consolidated results of
operations or financial position.
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). Adoption of the new accounting standards
prescribed by SFAS No. 123 is optional. The company intends to continue
accounting for its plans under previous accounting standards and beginning in
1997 will adopt the "disclosure only" alternative available under SFAS No. 123.
Discontinued Operations
On April 7, 1994, the company completed the sale of its Lead business for
initial cash proceeds of approximately $52 million plus deferred amounts to be
paid in installments over periods ranging from five to eight years.
The sale by the company of its Lead business included St. Joe Minerals
Corporation ("St. Joe") and its environmental liabilities for several different
lead mining, smelting and other lead related environmental sites. As a condition
of the St. Joe sale, however, the company retained responsibility for certain
non-lead related environmental liabilities, arising out of St. Joe's former zinc
mining and smelting division, but only to the extent that such liabilities are
not covered by St. Joe's comprehensive general liability insurance.
The zinc mining and smelting division of St. Joe was sold to Zinc
Corporation of America ("ZCA") in 1987. As part of the sale agreement, St. Joe
and the company agreed to indemnify ZCA in the event that certain environmental
liabilities arise from three Zinc facilities (the "Zinc Facilities"). During
1993, ZCA made claims under this indemnity as well as under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") against St.
Joe. In 1994, ZCA filed suit against St. Joe and the company, among others,
seeking compensation. In 1994, the company and St. Joe, among others, executed a
settlement agreement with ZCA, which among other things, cancels the indemnity
previously provided to ZCA and limits environmental expenditures at the Zinc
Facilities for which St. Joe
26
1996 Annual Report 27
===============================================================================
would be responsible to no more than approximately $10 million. This amount had
been previously reserved by the company. Expenses incurred and payments made
under the settlement agreement are expected to be made over a period of at least
five years from the date of settlement.
Financial Position and Liquidity
The increase in cash flows from operating activities in 1996 is due primarily to
higher earnings, partially offset by increases in operating assets and
liabilities. During 1996, increases in receivables and contract work in progress
were only partially offset by increases in certain project related short-term
liabilities. These increases were primarily the result of acquisitions and the
volume of work in progress. These changes in operating assets and liabilities
from year to year are affected by the mix, stage of completion and commercial
terms of engineering and construction projects. The increase in cash utilized by
investing activities in 1996 compared with 1995 and 1994 is primarily
attributable to increased capital expenditures and acquisitions by both the
Engineering and Construction and Coal operations, partially offset by increased
proceeds from the sales and maturities of marketable securities. Capital
expenditures and acquisitions by the Coal operations have been directed
primarily towards acquiring additional coal reserves. Engineering and
Construction capital expenditures and acquisitions were primarily for American
Equipment and directed towards expanding the machinery and equipment rental
business. Investing activity in 1994 included the initial pretax proceeds from
the sale of the Lead business. Cash utilized by financing activities consisted
primarily of dividend payments and the payment of certain long-term debt,
partially offset by an increase in short-term borrowings.
The long-term debt to capitalization ratio at October 31, 1996 and 1995
was less than 1.0 percent.
The company has on hand and access to sufficient sources of funds to
meet its anticipated operating, expansion and capital needs. Significant short-
and long-term lines of credit are maintained with banks which, along with cash
on hand and marketable securities, provide adequate operating liquidity.
Liquidity is also provided by the company's commercial paper program under which
there was $30 million outstanding at both October 31, 1996 and 1995.
Additionally, during December 1996 the company filed a shelf registration
statement with the Securities and Exchange Commission for the sale of up to $400
million of debt securities. The filing will enable the company to issue debt
from time to time during the next two years. Proceeds from any offering will be
used for general corporate purposes, which may include working capital
requirements, capital expenditures and possible acquisitions.
Cash dividends increased to $56.8 million ($.68 per share) in 1996 from
$49.7 million ($.60 per share) in 1995 and $42.8 million ($.52 per share) in
1994. Quarterly dividends have been increased in each of the past three years to
the current level of $.19 per share.
Although the company is affected by inflation and the cyclical nature of
the industry, its Engineering and Construction operations are generally
protected by the ability to recover cost increases in most contracts. Coal
operations produce a commodity which is internationally traded at prices
established by market factors outside the control of the company. However,
commodity prices generally tend over the long-term to correlate with
inflationary trends, and the company's substantial coal reserves provide a hedge
against the long-term effects of inflation. Although the company has taken
actions to reduce its dependence on external economic conditions, management is
unable to predict with certainty the amount and mix of future business.
27
Fluor Corporation 28
==============================================================================
Consolidated Balance Sheet
$ in thousands / At October 31, 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $ 246,964 $ 292,934
Marketable securities 69,378 137,758
Accounts and notes receivable 742,547 470,104
Contract work in progress 561,490 362,910
Inventories 73,927 63,284
Deferred taxes 50,157 55,088
Other current assets 52,360 29,593
-----------------------------------
Total current assets 1,796,823 1,411,671
-----------------------------------
Property, Plant and Equipment
Land 63,969 62,309
Buildings and improvements 329,358 312,981
Machinery and equipment 1,424,999 1,063,547
Mining properties and mineral rights 644,415 590,145
Construction in progress 36,133 37,402
-----------------------------------
2,498,874 2,066,384
Less accumulated depreciation, depletion and amortization 821,212 630,573
-----------------------------------
Net property, plant and equipment 1,677,662 1,435,811
-----------------------------------
Other Assets
Goodwill, net of accumulated amortization of $18,589 and $11,778, respectively 84,772 33,303
Investments 108,107 88,488
Other 284,362 259,633
-----------------------------------
Total other assets 477,241 381,424
-----------------------------------
$ 3,951,726 $ 3,228,906
===================================
1996 Annual Report 29
================================================================================
$ in thousands / At October 31, 1996 1995
- ----------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Accounts and notes payable $ 704,186 $ 372,301
Commercial paper 29,916 29,937
Advance billings on contracts 445,807 393,438
Accrued salaries, wages and benefit plan liabilities 290,426 269,812
Other accrued liabilities 175,026 148,782
Current portion of long-term debt 207 24,375
-------------------------------
Total current liabilities 1,645,568 1,238,645
-------------------------------
Long-Term Debt Due After One Year 2,967 2,873
Noncurrent Liabilities
Deferred taxes 42,632 44,211
Other 590,833 512,363
-------------------------------
Total noncurrent liabilities 633,465 556,574
-------------------------------
Contingencies and Commitments
Shareholders' Equity
Capital stock
Preferred--authorized 20,000,000 shares without par value, none issued
Common--authorized 150,000,000 shares of $.625 par value; issued and
outstanding in 1996--83,791,197 shares and in 1995--83,164,866 shares 52,369 51,978
Additional capital 573,037 538,503
Retained earnings 1,077,559 866,305
Unamortized executive stock plan expense (32,538) (26,865)
Cumulative translation adjustment (701) 893
-------------------------------
Total shareholders' equity 1,669,726 1,430,814
-------------------------------
$3,951,726 $3,228,906
===============================
See Notes to Consolidated Financial Statements.
Fluor Corporation 30
================================================================================
Consolidated Statement of Earnings
In thousands, except per share amounts / Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues
Engineering and construction services $10,054,365 $8,451,626 $7,717,542
Coal 960,827 849,758 767,725
-----------------------------------------------------
Total revenues 11,015,192 9,301,384 8,485,267
-----------------------------------------------------
Cost of Revenues
Engineering and construction services 9,739,148 8,171,351 7,466,274
Coal 826,301 738,725 672,527
-----------------------------------------------------
Total cost of revenues 10,565,449 8,910,076 8,138,801
Other (Income) and Expenses
Corporate administrative and general expense 48,120 48,636 47,855
Interest expense 16,051 13,385 16,861
Interest income (27,646) (32,927) (21,549)
-----------------------------------------------------
Total cost and expenses 10,601,974 8,939,170 8,181,968
-----------------------------------------------------
Earnings Before Taxes 413,218 362,214 303,299
Income Tax Expense 145,134 130,446 110,900
-----------------------------------------------------
Net Earnings $ 268,084 $ 231,768 $ 192,399
=====================================================
Earnings Per Share $ 3.17 $ 2.78 $ 2.32
====================================================
Shares Used to Calculate Earnings Per Share 84,566 83,428 82,796
=====================================================
See Notes to Consolidated Financial Statements.
1996 Annual Report 31
===============================================================================
Consolidated Statement of Cash Flows
In thousands / Year ended October 31, 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net earnings $ 268,084 $ 231,768
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation, depletion and amortization 194,129 146,957
Deferred taxes 12,631 1,709
Changes in operating assets and liabilities (60,353) 9,408
Other, net (7,632) (23,491)
-------------------------------------
Cash provided by operating activities 406,859 366,351
-------------------------------------
Cash Flows From Investing Activities
Capital expenditures (392,436) (318,942)
E&C businesses acquired (87,085) (16,230)
Coal companies acquired (5,010) --
Purchase of marketable securities (67,069) (132,934)
Proceeds from sales and maturities of marketable securities 134,496 115,553
Investments, net 3,991 (16,667)
Proceeds from sale of property, plant and equipment 29,486 17,406
Initial pretax cash proceeds from sale of discontinued operations -- --
Other, net (12,699) (29,221)
-------------------------------------
Cash utilized by investing activities (396,326) (381,035)
-------------------------------------
Cash Flows From Financing Activities
Cash dividends paid (56,830) (49,712)
Payments on debt (42,456) (35,604)
Increase (decrease) in short-term borrowings 26,109 9,980
Stock options exercised 17,351 9,757
Decrease in note payable to affiliate -- --
Other, net (677) (1,271)
-------------------------------------
Cash utilized by financing activities (56,503) (66,850)
-------------------------------------
(Decrease) increase in cash and cash equivalents (45,970) (81,534)
Cash and cash equivalents at beginning of year 292,934 374,468
-------------------------------------
Cash and cash equivalents at end of year $ 246,964 $ 292,934
=====================================
In thousands / Year ended October 31, 1994
- ----------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net earnings $ 192,399
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation, depletion and amortization 114,258
Deferred taxes 2,801
Changes in operating assets and liabilities 141,723
Other, net 7,428
---------
Cash provided by operating activities 458,609
---------
Cash Flows From Investing Activities
Capital expenditures (236,623)
E&C businesses acquired --
Coal companies acquired (38,164)
Purchase of marketable securities (60,213)
Proceeds from sales and maturities of marketable securities 39,930
Investments, net 214
Proceeds from sale of property, plant and equipment 18,271
Initial pretax cash proceeds from sale of discontinued operations 51,869
Other, net (1,172)
---------
Cash utilized by investing activities (225,888)
---------
Cash Flows From Financing Activities
Cash dividends paid (42,828)
Payments on debt (1,994)
Increase (decrease) in short-term borrowings (10,096)
Stock options exercised 11,946
Decrease in note payable to affiliate (30,000)
Other, net (125)
---------
Cash utilized by financing activities (73,097)
---------
(Decrease) increase in cash and cash equivalents 159,624
Cash and cash equivalents at beginning of year 214,844
---------
Cash and cash equivalents at end of year $ 374,468
=========
See Notes to Consolidated Financial Statements.
Fluor Corporation 32
================================================================================
Consolidated Statement of Shareholders' Equity
Unamortized
Common Stock Executive Cumulative
In thousands, except per share amounts ------------------- Additional Retained Stock Plan Translation
Year ended October 31, 1994, 1995 and 1996 Shares Amount Capital Earnings Expense Adjustment Total
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at October 31, 1993 82,093 $51,308 $478,204 $ 534,678 $(16,828) $(3,240) $ 1,044,122
----------------------------------------------------------------------------------
Net earnings 192,399 192,399
Cash dividends ($.52 per share) (42,828) (42,828)
Exercise of stock options, net 396 248 11,698 11,946
Stock option tax benefit 4,046 4,046
Amortization of executive stock plan expense 3,837 3,837
Issuance of restricted stock, net 19 11 1,128 (1,481) (342)
Tax benefit from reduction of valuation
allowance for deferred tax assets 3,728 3,728
Translation adjustment (net of deferred taxes
of $2,268) 3,548 3,548
----------------------------------------------------------------------------------
Balance at October 31, 1994 82,508 51,567 498,804 684,249 (14,472) 308 1,220,456
----------------------------------------------------------------------------------
Net earnings 231,768 231,768
Cash dividends ($.60 per share) (49,712) (49,712)
Exercise of stock options, net 264 165 9,592 9,757
Stock option tax benefit 2,460 2,460
Amortization of executive stock plan expense 3,684 3,684
Issuance of restricted stock, net 393 246 20,320 (16,077) 4,489
Tax benefit from reduction of valuation
allowance for deferred tax assets 7,327 7,327
Translation adjustment (net of deferred taxes
of $374) 585 585
----------------------------------------------------------------------------------
Balance at October 31, 1995 83,165 51,978 538,503 866,305 (26,865) 893 1,430,814
----------------------------------------------------------------------------------
Net earnings 268,084 268,084
Cash dividends ($.68 per share) (56,830) (56,830)
Exercise of stock options, net 466 291 17,060 17,351
Stock option tax benefit 3,977 3,977
Amortization of executive stock plan expense 5,723 5,723
Issuance of restricted stock, net 160 100 11,084 (11,396) (212)
Tax benefit from reduction of valuation
allowance for deferred tax assets 2,413 2,413
Translation adjustment (net of deferred taxes
of $1,019) (1,594) (1,594)
----------------------------------------------------------------------------------
Balance at October 31, 1996 83,791 $52,369 $573,037 $1,077,559 $(32,538) $ (701) $1,669,726
==================================================================================
See Notes to Consolidated Financial Statements.
1996 Annual Report 33
================================================================================
Notes to Consolidated Financial Statements
Major Accounting Policies
Principles of Consolidation
The financial statements include the accounts of the company and its
subsidiaries. The equity method of accounting is used for investment ownership
ranging from 20 percent to 50 percent. Investment ownership of less than 20
percent is accounted for on the cost method. All significant intercompany
transactions of consolidated subsidiaries are eliminated. Certain 1995 and 1994
amounts have been reclassified to conform with the 1996 presentation.
Use of Estimates
The preparation of the financial statements of the company requires management
to make estimates and assumptions that affect reported amounts. These estimates
are based on information available as of the date of the financial statements.
Therefore, actual results could differ from those estimates.
Engineering and Construction Contracts
The company recognizes engineering and construction contract revenues using the
percentage-of-completion method, based primarily on contract costs incurred to
date compared with total estimated contract costs. Customer-furnished materials,
labor and equipment, and in certain cases subcontractor materials, labor and
equipment, are included in revenues and cost of revenues when management
believes that the company is responsible for the ultimate acceptability of the
project. Contracts are 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 costs or losses, if any, are recognized in the period in which they are
determined. Revenues recognized in excess of amounts billed are classified as
current assets under contract work in progress. Amounts received from clients in
excess of revenues recognized to date are classified as current liabilities
under advance billings on contracts. The company anticipates that substantially
all incurred costs associated with contract work in progress at October 31, 1996
will be billed and collected in 1997.
Depreciation, Depletion and Amortization
Additions to property, plant and equipment are recorded at cost. Assets other
than mining properties and mineral rights are depreciated principally using the
straight-line method over the following estimated useful lives: buildings and
improvements--3 to 50 years and machinery and equipment--2 to 30 years. Mining
properties and mineral rights are depleted on the units-of-production method.
Leasehold improvements are amortized over the lives of the respective leases.
Goodwill is amortized on the straight-line method over periods not longer than
40 years.
Exploration, Development and Reclamation
Coal exploration costs are expensed as incurred. Development and acquisition
costs of coal properties, when expected to be significant, are capitalized in
mining properties and depleted. The company accrues for post-mining reclamation
costs as coal is mined. Reclamation of disturbed acreage is performed as a
normal part of the mining process.
Income Taxes
Deferred tax assets and liabilities are recognized for the expected future tax
consequences of events that have been recognized in the company's financial
statements or tax returns.
Earnings Per Share
Earnings per share is based on the weighted average number of common shares and,
when appropriate, common equivalent shares outstanding in each period. Common
equivalent shares, primarily stock options, are included when the effect of
exercise would be dilutive.
Fluor Corporation 34
================================================================================
Marketable Securities
All investment securities are considered to be available-for-sale and carried at
fair value. Management determines classification at the time of purchase and
reevaluates its appropriateness at each balance sheet date. The company's
investments primarily include short-term, highly liquid investment grade debt
securities. As of October 31, 1996 and 1995 there were no material gross
unrealized gains or losses as the carrying value of the security portfolio
approximated fair value. Gross realized gains and losses on sales of securities
for the years ended October 31, 1996 and 1995 were also not material. The cost
of securities sold is based on the specific identification method. As of
October 31, 1996 approximately $21 million of securities mature within one year,
$44 million mature in the next two to three years and approximately $4 million
mature after three years.
Inventories
Inventories are stated at the lower of cost or market using the average cost
method. Inventories comprise:
$ in thousands / At October 31, 1996 1995
- -------------------------------------------------------------------------------
Coal $28,809 $28,874
Supplies and other 45,118 34,410
--------------------
$73,927 $63,284
====================
Long-Lived Assets
Effective November 1, 1995, the company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). The adoption
of SFAS No. 121 had no impact on the company's consolidated results of
operations or financial position.
Foreign Currency
The company's utilization of derivative financial instruments is substantially
limited to the use of forward exchange contracts to hedge foreign currency
transactions entered into in the ordinary course of business and not to engage
in currency speculation. The company's forward exchange contracts do not subject
the company to risk from exchange rate movements because gains and losses on
such contracts offset losses and gains, respectively, on the assets, liabilities
or transactions being hedged. Accordingly, the unrealized gains and losses are
deferred and included in the measurement of the related foreign currency
transaction. At October 31, 1996, the company had approximately $68 million of
foreign exchange contracts outstanding relating to lease commitments and
contract obligations. The forward exchange contracts generally require the
company to exchange U.S. dollars for foreign currencies at maturity, at rates
agreed to at inception of the contracts. If the counterparties to the exchange
contracts (primarily AA rated international banks) do not fulfill their
obligations to deliver the contracted currencies, the company could be at risk
for any currency related fluctuations. The company limits exposure to foreign
currency fluctuations in most of its engineering and construction contracts
through provisions that require client payments in U.S. dollars or other
currencies corresponding to the currency in which costs are incurred. As a
result, the company generally does not need to hedge foreign currency cash flows
for contract work performed. The amount of any gain or loss on these contracts
in 1996 and 1995 was immaterial. The contracts are of varying duration, none of
which extend beyond December 1, 1999. The functional currency of all significant
foreign operations is the local currency.
Concentrations of Credit Risk
The company provides a variety of financing arrangements for its engineering and
construction clients. The majority of accounts receivable and all contract work
in progress are from engineering and construction clients in various industries
and locations throughout the world. Most contracts require payments as the
projects progress or in
1996 Annual Report 35
================================================================================
certain cases advance payments. The company generally does not require
collateral, but in most cases can place liens against the property, plant or
equipment constructed if a default occurs. Accounts receivable from customers of
the company's Coal operations are primarily concentrated in the steel and
utility industries. The company maintains adequate reserves for potential credit
losses and such losses have been minimal and within management's estimates.
Consolidated Statement of Cash Flows
Securities with maturities of 90 days or less at the date of purchase are
classified as cash equivalents. Securities with maturities beyond 90 days are
classified as marketable securities and are carried at fair market value. The
changes in operating assets and liabilities as shown in the Consolidated
Statement of Cash Flows comprise:
$ in thousands / Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------
Decrease (increase) in:
Accounts and notes receivable $ (78,632) $(141,505) $ 73,905
Contract work in progress (176,137) (52,488) (2,626)
Inventories (8,743) (10,581) (18,042)
Other current assets (18,465) 6,292 (8,493)
Increase in:
Accounts payable 167,350 35,334 43,523
Advance billings on contracts 43,382 172,062 25,406
Accrued liabilities 10,892 294 28,050
--------------------------------------
Changes in operating assets and liabilities $ (60,353) $ 9,408 $141,723
======================================
Cash paid during the year for:
Interest expense $ 11,832 $ 7,672 $ 12,830
Income tax payments, net 120,570 121,508 81,306
Acquisitions and Disposition
During the last three years, the company completed certain business acquisitions
in connection with its strategic long-term growth goals. These acquisitions were
in both the Engineering and Construction and Coal segments. The Engineering and
Construction acquisitions were concentrated primarily within the Diversified
Services Group, consistent with the company's strategy of diversification to
strengthen its growth potential while mitigating the down cycles of individual
markets, segments or geographic regions.
The following summarizes major Engineering and Construction
acquisitions:
1996:
Groundwater Technology, Inc. ("GTI"), a publicly traded company headquartered in
Massachusetts, that provides detailed, scientific environmental assessment and
remediation programs, as well as other environmental support services. Under the
terms of the transaction, the company consummated a merger between one of its
subsidiaries, Fluor Daniel Environmental Services, Inc., and GTI wherein the
company acquired an approximate 55 percent interest in the newly named company,
Fluor Daniel GTI, Inc.
S&R Equipment Company, Inc., a privately held U.S. company based in Ohio, that
specializes in high-lift equipment rentals.
Marshall Contractors, Inc., a privately held U.S. company based in Rhode Island,
that provides specialized construction services to the microelectronics,
pharmaceuticals, biotechnology, foods and related industries.
These businesses and other smaller acquisitions were purchased for $87
million. The fair value of assets acquired, including goodwill of $50 million,
was $329 million, and liabilities assumed totaled $242 million.
1995:
Management Resources Group, plc, a privately held company headquartered in
London, England, that provides permanent and temporary placement services for
accounting, information technology and office personnel.
Anderson DeBartolo Pan, Inc., a privately held U.S. company based in Arizona,
that provides professional services in engineering, architectural and
construction management to the microelectronics market and the health care,
hospitality and sports facilities industries.
Fluor Corporation 36
================================================================================
A majority interest in Prosynchem S.A., a privately held company headquartered
in Gliwice, Poland, that provides engineering and construction services to
clients in the petroleum, petrochemicals, chemicals and environmental industries
in Poland and other Eastern European countries.
These businesses and other smaller acquisitions were purchased for $16
million. The fair value of assets acquired, including goodwill of $16 million,
was $30 million, and liabilities assumed totaled $14 million.
There were no significant Engineering and Construction acquisitions in 1994.
Massey Coal Company ("Massey") purchased five coal mining companies
during 1994 through 1996. The aggregate purchase price was $43 million and
included the fair value of assets acquired, consisting of $89 million of
property, plant and equipment, and mining rights, $5 million of working capital
and other assets, net of other liabilities assumed of $51 million. These
acquisitions, along with capital expenditures, have been directed primarily
towards acquiring additional coal reserves.
All of the above acquisitions have been accounted for under the purchase
method of accounting and their results of operations have been included in the
company's consolidated financial statements from the respective acquisition
dates. If these acquisitions had been made at the beginning of 1996, 1995 or
1994, pro forma results of operations would not have differed materially from
actual results.
From time to time, the company enters into investment arrangements,
including joint ventures, that are related to its Engineering and Construction
business. During 1996 and 1995, the majority of these expenditures related to
ongoing investments in an equity fund that focuses on energy related projects
and a number of smaller, diversified ventures. In 1994, the majority of joint
venture investment activity related to the acquisition of a minority interest in
Prochem S.A., one of Poland's largest engineering and construction companies.
On April 7, 1994, the company completed the sale of its Lead business
for initial cash proceeds of approximately $52 million plus deferred amounts to
be paid in installments over periods ranging from five to eight years. The
closing of the sale had no impact on the company's earnings beyond what was
originally recognized when the Lead business was discontinued in 1992. Revenues
from the Lead business were approximately $71 million for the five month period
through the date of sale in 1994.
Income Taxes
The income tax expense (benefit) included in the Consolidated Statement of
Earnings is as follows:
$ in thousands / Year ended October 31, 1996 1995 1994
- -----------------------------------------------------------------------------------------
Current:
Federal $ 94,864 $ 88,762 $ 58,420
Foreign 25,872 26,803 37,151
State and local 11,767 13,172 12,528
----------------------------------
Total current 132,503 128,737 108,099
----------------------------------
Deferred:
Federal 13,081 (10,776) (2,145)
Foreign 1,974 11,953 4,673
State and local (2,424) 532 273
----------------------------------
Total deferred 12,631 1,709 2,801
----------------------------------
Total income tax expense $145,134 $130,446 $110,900
==================================
A reconciliation of U.S. statutory federal income tax expense to the
company's income tax expense on earnings is as follows:
$ in thousands / Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------
U.S. statutory federal income tax expense $144,626 $126,775 $106,155
Increases (decreases) in taxes resulting from:
State and local income taxes 9,542 9,288 8,498
Effect of non-U.S. tax rates 6,057 5,682 7,412
Depletion (11,054) (10,497) (9,560)
Other, net (4,037) (802) (1,605)
------------------------------------
Total income tax expense $145,134 $130,446 $110,900
====================================
1996 Annual Report 37
================================================================================
Deferred taxes reflect the tax effects of differences between the
amounts recorded as assets and liabilities for financial reporting purposes and
the amounts recorded for income tax purposes. The tax effects of significant
temporary differences giving rise to deferred tax assets and liabilities are as
follows:
$ in thousands / At October 31, 1996 1995
- ------------------------------------------------------------------------------------------
Deferred tax assets:
Accrued liabilities not currently deductible $ 174,772 $ 156,925
Tax basis of building in excess of book basis 22,999 23,149
Other 69,375 79,120
-------------------------
Total deferred tax assets 267,146 259,194
Valuation allowance for deferred tax assets (38,655) (44,397)
-------------------------
Deferred tax assets, net 228,491 214,797
-------------------------
Deferred tax liabilities:
Coal mining property and equipment book
basis in excess of tax basis (147,550) (128,238)
Tax on unremitted non-U.S. earnings (27,715) (34,688)
Other (45,701) (40,994)
-------------------------
Total deferred tax liabilities (220,966) (203,920)
-------------------------
Net deferred tax assets $ 7,525 $ 10,877
=========================
The company established a valuation allowance to reduce certain deferred
tax assets to amounts that are more likely than not to be realized. Some of this
allowance relates to deferred tax assets existing at the date of the company's
1987 quasi-reorganization. Reductions in the valuation allowance relating to
these 1987 deferred tax assets are credited to additional capital.
Residual income taxes of approximately $12 million have not been
provided on approximately $30 million of undistributed earnings of certain
foreign subsidiaries at October 31, 1996, because the company intends to keep
those earnings reinvested indefinitely.
United States and foreign earnings before taxes are as follows:
$ in thousands / Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------
United States $ 363,687 $ 249,776 $ 196,397
Foreign 49,531 112,438 106,902
---------------------------------------
Total $ 413,218 $ 362,214 $ 303,299
=======================================
Retirement Benefits
The company sponsors contributory and non-contributory defined contribution
retirement and defined benefit pension plans for eligible employees.
Contributions to defined contribution retirement plans are based on a percentage
of the employee's compensation. Expense recognized for these plans of
approximately $75 million in 1996, $69 million in 1995 and $67 million in 1994,
is primarily related to domestic engineering and construction operations.
Contributions to defined benefit pension plans are generally at the minimum
annual amount required by applicable regulations. Payments to retired employees
under these plans are generally based upon length of service and/or a percentage
of qualifying compensation. The defined benefit pension plans are primarily
related to international engineering and construction operations, U.S. craft
employees and coal operations.
Net periodic pension income for defined benefit pension plans includes
the following components:
$ in thousands / Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------
Service cost incurred during the period $ 14,284 $ 12,385 $ 14,310
Interest cost on projected benefit obligation 22,248 21,578 20,275
Income and gains on assets invested (75,861) (50,776) (7,907)
Net amortization and deferral 33,868 11,198 (34,255)
-----------------------------------
Net periodic pension income $ (5,461) $ (5,615) $ (7,577)
===================================
The following assumptions were used in the determination of net periodic
cost:
Year ended October 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------
Discount rates 6.75-8.5% 7.75-9.25% 7.0-8.0%
Rates of increase in compensation levels 3.25-5.5% 4.0-6.25% 3.5-5.0%
Expected long-term rates of return on assets 5.75-9.5% 6.75-10.25% 6.0-10.0%
Fluor Corporation 38
================================================================================
The following table sets forth the plans' funded status and the pension
assets which have been recognized in the company's Consolidated Balance Sheet:
$ in thousands / At October 31, 1996 1995
- -----------------------------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Vested benefit obligation $274,872 $253,444
Nonvested benefit obligation 9,590 9,708
-------------------
Accumulated benefit obligation $284,462 $263,152
===================
Plan assets at fair value (primarily listed stocks and bonds) $488,458 $427,145
Projected benefit obligation (319,066) (307,759)
-------------------
Plan assets in excess of projected benefit obligation 169,392 119,386
Unrecognized net loss (gain) (42,411) 1,962
Unrecognized net assets at implementation (15,191) (18,590)
-------------------
Pension assets $111,790 $102,758
===================
Amounts shown above at October 31, 1996 and 1995 exclude the projected benefit
obligation of approximately $114 million and $117 million, respectively, and an
equal amount of associated plan assets relating to discontinued operations.
In recognition of the current economic environment in each plan's
respective host country, as of November 1, 1996 the company will adjust the
discount rates used in the determination of its benefit obligations to 6.5--8.25
percent and the rates of salary increases to 3.0--5.25 percent.
Massey participates in multiemployer defined benefit pension plans for
its union employees. Pension expense was less than $1 million in each of the
years ended October 31, 1996, 1995 and 1994. Under the Coal Industry Retiree
Health Benefits Act of 1992, Massey is required to fund medical and death
benefits of certain beneficiaries. Massey's obligation under the Act is
estimated to aggregate approximately $49 million at October 31, 1996, which will
be recognized as expense as payments are assessed. The expense recorded for such
benefits was $2 million for each of the years ended October 31, 1996 and 1995
and $4 million for the year ended October 31, 1994.
In addition to the company's defined benefit pension plans, the company
and certain of its subsidiaries provide health care and life insurance benefits
for certain retired employees. The health care and life insurance plans are
generally contributory, with retiree contributions adjusted annually. Service
costs are accrued currently.
The accumulated postretirement benefit obligation at October 31, 1996
and 1995 was determined in accordance with the current terms of the company's
health care plans, together with relevant actuarial assumptions and health care
cost trend rates projected at annual rates ranging from 10.6 percent in 1997
down to 5 percent in 2005 and beyond. The effect of a one-percent annual
increase in these assumed cost trend rates would increase the accumulated
postretirement benefit obligation and the aggregate of the annual service and
interest costs by approximately 14 percent.
Net periodic postretirement benefit cost includes the following
components:
$ in thousands / Year ended October 31, 1996 1995 1994
- -----------------------------------------------------------------------------------------------
Service cost incurred during the period $1,672 $1,172 $1,352
Interest cost on accumulated
postretirement benefit obligation 5,755 4,899 4,153
-------------------------------
Net periodic postretirement benefit cost $7,427 $6,071 $5,505
===============================
The following table sets forth the plans' funded status and accumulated
postretirement benefit obligation which has been fully accrued in the company's
Consolidated Balance Sheet:
$ in thousands / At October 31, 1996 1995
- -----------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees $49,912 $51,787
Fully eligible active participants 16,462 4,821
Other active plan participants 17,944 14,705
Unrecognized loss (8,545) (6,426)
------------------
Accrued postretirement benefit obligation $75,773 $64,887
==================
The discount rate used in determining the accumulated postretirement
benefit obligation was 7.75 percent and 7.5 percent at October 31, 1996 and
1995, respectively.
1996 Annual Report 39
================================================================================
The preceding information does not include amounts related to benefit
plans applicable to employees associated with certain contracts with the U.S.
Department of Energy because the company is not responsible for the current or
future funded status of these plans.
Fair Value of Financial Instruments
The estimated fair value of the company's financial instruments are as follows:
1996 1995
------------------------------------------------------
Carrying Carrying
$ in thousands / At October 31, Amount Fair Value Amount Fair Value
- ------------------------------------------------------------------------------------------------
Assets:
Cash and cash equivalents $246,964 $246,964 $292,934 $292,934
Marketable securities 69,378 69,378 137,758 137,758
Notes receivable including
noncurrent portion 116,809 120,463 83,515 86,769
Long-term investments 48,920 47,948 30,990 32,127
Liabilities:
Commercial paper
and notes payable 67,007 67,007 36,409 36,409
Long-term debt including
current portion 3,174 3,174 27,248 28,420
Other noncurrent
financial liabilities 2,556 2,556 2,572 2,572
Off-balance sheet
financial instruments:
Foreign currency
contract obligations -- (1,726) -- (2,146)
Letters of credit -- 700 -- 572
Lines of credit -- 747 -- 997
Fair values were determined as follows:
The carrying amounts of cash and cash equivalents, short-term notes
receivable, commercial paper and notes payable approximates fair value because
of the short-term maturity of these instruments.
Marketable securities and long-term investments are based on quoted
market prices for these or similar instruments. Long-term notes receivable are
estimated by discounting future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings.
The fair value of long-term debt, including current portion, is
estimated based on quoted market prices for the same or similar issues or on the
current rates offered to the company for debt of the same maturities.
Other noncurrent financial liabilities consist primarily of deferred
payments, for which cost approximates fair value.
Foreign currency contract obligations are estimated by obtaining quotes
from brokers.
Letters of credit and lines of credit amounts are based on fees
currently charged for similar agreements or on the estimated cost to terminate
or settle the obligations.
Long-Term Debt
Long-term debt comprises:
$ in thousands / At October 31, 1996 1995
- ------------------------------------------------------------------------------------------
Deutsche mark financing, with a currency exchange
agreement fixing the repayments in U.S. dollars
at an effective interest rate of 9.5%, paid in 1996 $ -- $23,644
Other notes 3,174 3,604
--------------------
3,174 27,248
Less: Current portion 207 24,375
--------------------
Long-term debt due after one year $ 2,967 $ 2,873
====================
Long-term debt due after one year matures in 1998.
The company has unsecured committed revolving long-term lines of credit
with banks from which it may borrow for general corporate purposes up to a
maximum of $250 million. Commitment and facility fees are paid on these lines.
In addition, the company has $973 million in short-term uncommitted lines of
credit. Borrowings under lines of credit and revolving credit agreements bear
interest at prime or rates based on the London Interbank Offered Rate ("LIBOR"),
domestic certificates of deposit or other rates which are mutually acceptable to
the banks and the company. At October 31, 1996, no amounts were outstanding
under the committed lines of credit. As of that date, $268 million of the short-
term uncommitted lines of credit were used to support undrawn letters of credit
issued in the ordinary course of business.
The company had $30 million in unsecured commercial paper outstanding at
both October 31, 1996 and 1995. The commercial paper was issued at a discount
with an effective interest rate of 5.3 percent and 5.8 percent in 1996 and 1995,
respectively. Maturities of commercial paper ranged from 28 to 91 days in 1996
and 14 to 90 days in 1995.
Fluor Corporation 40
================================================================================
The weighted average maturities were 21 and 14 days at October 31, 1996 and
1995, respectively. The maximum and average balances outstanding for the years
ended October 31, 1996 and 1995 were $75 million and $38 million, respectively,
and $75 million and $21 million, respectively, with weighted average interest
rates of 5.5 percent and 5.9 percent, respectively.
Other Noncurrent Liabilities
The company maintains appropriate levels of insurance for business risks.
Insurance coverages contain various deductible amounts for which the company
provides accruals based on the aggregate of the liability for reported claims
and an actuarially determined estimated liability for claims incurred but not
reported. Other noncurrent liabilities include $92 million and $108 million at
October 31, 1996 and 1995, respectively, relating to these liabilities.
Stock Plans
The company's executive stock plans, approved by the shareholders, provide
for grants of nonqualified or incentive stock options, restricted stock awards
and stock appreciation rights ("SARS"). All executive stock plans are
administered by the Organization and Compensation Committee of the Board of
Directors ("Committee") comprised of outside directors, none of whom are
eligible to participate in the plans. Stock options may be granted with or
without SARS. Grant prices are determined by the Committee and are established
at the fair market value of the company's common stock at the date of grant.
Options and SARS normally extend for 10 years and become exercisable over a
vesting period determined by the Committee, which is presently in installments
of 25 percent per year commencing one year from the date of grant. The company
issued 66,860 options and 561,000 options in 1996 and 1995, respectively, that
will vest only if certain performance related conditions are met.
Restricted stock awards issued under the plans provide that shares awarded may
not be sold or otherwise transferred until restrictions as established by the
Committee have lapsed. Upon termination of employment, shares upon which
restrictions have not lapsed must be returned to the company. Restricted stock
issued under the plans totaled 172,770 and 405,089 shares in 1996 and 1995,
respectively.
The following table summarizes stock option activity:
Price Per
Stock Options Share
- -------------------------------------------------------------------------------------------
Outstanding at October 31, 1993 2,490,444 $ 12-44
Granted 59,480 51
Expired or canceled (82,374) 36-44
Exercised (396,044) 12-44
--------------------------
Outstanding at October 31, 1994 2,071,506 12-51
--------------------------
Granted 2,034,270 43-59
Expired or canceled (23,834) 35-51
Exercised (266,336) 12-51
--------------------------
Outstanding at October 31, 1995 3,815,606 12-59
--------------------------
Granted 1,046,700 56-68
Expired or canceled (56,010) 43-64
Exercised (466,918) 12-59
--------------------------
Outstanding at October 31, 1996 4,339,378 $ 12-68
==========================
Exercisable at:
October 31, 1995 1,406,583 $ 12-51
October 31, 1996 1,536,063 $ 12-59
--------------------------
Available for grant at:
October 31, 1995 230,992
October 31, 1996 3,130,927
----------
Available for grant includes shares which may be granted as either stock options
or restricted stock, as determined by the Committee under the 1996 and 1988
Fluor Executive Stock Plans.
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). Adoption of the new accounting standards
prescribed by SFAS No. 123 is optional. The company intends to continue
accounting for its plans under previous accounting standards and beginning in
1997 will adopt the "disclosure only" alternative available under SFAS N0. 123.
1996 Annual Report 41
================================================================================
Lease Obligations
Net rental expense amounted to approximately $77 million, $67 million, and $60
million in 1996, 1995, and 1994, respectively. The company's lease obligations
relate primarily to office facilities, equipment used in connection with
long-term construction contracts and other personal property.
The company's obligations for minimum rentals under noncancelable leases
are as follows:
$ in thousands /At October 31, 1996
- ------------------------------------------------------------------------
1997 $37,644
1998 34,432
1999 22,135
2000 10,273
2001 7,327
Thereafter $36,958
At October 31, 1996 and 1995, obligations under capital leases of
approximately $4 million and $5 million, respectively, are included in other
noncurrent liabilities.
Contingencies and Commitments
The company and certain of its subsidiaries are involved in litigation in the
ordinary course of business. The company and certain of its engineering and
construction subsidiaries are contingently liable for commitments and
performance guarantees arising in the ordinary course of business. Claims
arising from engineering and construction contracts have been made against the
company by clients, and the company has made certain claims against clients for
costs incurred in excess of the current contract provisions. The company does
not expect that the foregoing matters will have a material adverse effect on its
consolidated financial position or results of operations.
Financial guarantees, made in the ordinary course of business on behalf
of clients and others in certain limited circumstances, are entered into with
financial institutions and other credit grantors and generally obligate the
company to make payment in the event of a default by the borrower. Most
arrangements require the borrower to pledge collateral in the form of property,
plant and equipment which is deemed adequate to recover amounts the company
might be required to pay. As of October 31, 1996, the company had extended
financial guarantees on behalf of certain clients and other unrelated third
parties totaling approximately $42 million.
The company's operations are subject to and affected by federal, state
and local laws and regulations regarding the protection of the environment. The
company maintains reserves for potential future environmental costs where such
obligations are either known or considered probable, and can be reasonably
estimated.
The sale by the company of its Lead business included St. Joe Minerals
Corporation ("St. Joe") and its environmental liabilities for several different
lead mining, smelting and other lead-related environmental sites. As a condition
of the St. Joe sale, however, the company retained responsibility for certain
non-lead-related environmental liabilities arising out of St. Joe's former zinc
mining and smelting division, but only to the extent that such liabilities are
not covered by St. Joe's comprehensive general liability insurance. These
liabilities arise out of three zinc facilities located in Bartlesville,
Oklahoma; Monaca, Pennsylvania; and Balmat, New York (the "Zinc Facilities").
In 1987 St. Joe sold its zinc mining and smelting division to Zinc
Corporation of America ("ZCA"). As part of the sale agreement, St. Joe and the
company agreed to indemnify ZCA for certain environmental liabilities arising
from operations conducted at the Zinc Facilities prior to the sale. During 1993
ZCA made claims under this indemnity as well as under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") against St.
Joe for past and future environmental expenditures at the Zinc Facilities. In
1994 ZCA filed suit against St. Joe and the company, among others, seeking
compensation for environmental expenditures at the Zinc Facilities. In 1994 the
company and St. Joe, among others, executed a settlement agreement with ZCA
which, among other things, cancels the indemnity previously provided to ZCA and
limits environmental expenditures at the Zinc Facilities for which St. Joe would
be responsible to no more than approximately $10 million, which was previously
fully reserved by the company. Expenses incurred and payments made under the
settlement agreement would be made over a period of at least five years from the
date of settlement.
Fluor Corporation 42
================================================================================
In fiscal 1996, the company and St. Joe prosecuted cost recovery claims
against another potentially responsible party for the Bartlesville facility. The
Federal District Court for Oklahoma rendered Judgment in favor of the company
and St. Joe, among others, which Judgment has become final and non-appealable.
The District Court's Judgment further reduces the company's and St. Joe's
liability with respect to the Bartlesville facility. In addition, St. Joe has
initiated legal proceedings against certain of its insurance carriers alleging
that the investigative and remediation costs for which St. Joe is or may be
responsible, including costs incurred prior to the sale of St. Joe and costs
related to the Zinc Facilities, are covered by insurance. A portion of any
recoveries received from the insurance carriers would be, pursuant to the St.
Joe sale agreement, for the benefit of the company. In January 1995, St. Joe
executed a settlement agreement with one of its primary insurance carriers that
provided coverage for a minor portion of the applicable coverage periods. In May
1995, St. Joe received a favorable ruling from the Orange County Superior Court
which ordered St. Joe's other primary insurance carrier to provide a defense to
St. Joe for certain environmental liabilities, including the Zinc Facilities.
This insurer has appealed the Superior Court's order. St. Joe continues to
pursue its other primary insurance carrier for additional payments. Inasmuch as
the insurance proceedings remain in the early stages of litigation, no credit or
offset (other than for amounts actually received in settlement or judgment) has
been taken into account by the company in establishing its reserves for future
environmental costs.
The company believes, based upon present information available to it,
that its reserves with respect to future environmental costs are adequate and
such future costs will not have a material effect on the company's consolidated
financial position, results of operations or liquidity. However, the imposition
of more stringent requirements under environmental laws or regulations, new
developments or changes regarding site cleanup costs or the allocation of such
costs among potentially responsible parties, or a determination that the company
is potentially responsible for the release of hazardous substances at sites
other than those currently identified, could result in additional expenditures,
or the provision of additional reserves in expectation of such expenditures.
Operations by Business Segment and Geographic Area
The Engineering and Construction segment, the company's principal operating
business, includes subsidiaries engaged in the design, engineering, procurement,
construction, technical services and maintenance of facilities for process,
industrial, power/government and diversified services clients. Coal segment
amounts include the operations of Massey.
In 1995, revenue included approximately $2 billion from subsidiaries of
Shell Oil Company related primarily to two projects that were awarded in 1993.
Identifiable assets are those tangible and intangible assets used in the
operation of each of the business segments and geographic areas. Corporate
assets are principally cash and cash equivalents, marketable securities and
nontrade receivables.
Engineering services for international projects are often performed
within the United States or a country other than where the project is located.
Revenues associated with these services have been classified within the
geographic area where the work was performed.
1996 Annual Report 43
===============================================================================
Operations by Business Segment
Revenues
-----------------------------------------------------
$ in millions 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------------
Engineering and Construction $10,054.4 $8,451.6 $ 7,717.6
Coal 960.8 849.8 767.7
-----------------------------------------------------
$11,015.2 $9,301.4 $8,485.3
=====================================================
Identifiable Assets Capital Expenditures
----------------------------------------- ----------------------------------------------------
$ in millions 1996 1995 1994 1996 1995 1994
- ---------------------------------------------------------------------------- ----------------------------------------------------
Engineering and Construction $2,213.4 $ 1,572.6 $ 1,288.5 $ 171.6 $ 137.1 $ 72.5
Coal 1,384.0 1,191.2 1,076.5 220.8 181.8 164.1
Corporate 354.3 465.1 459.8 -- -- --
----------------------------------------- ----------------------------------------------------
$3,951.7 $3,228.9 $2,824.8 $392.4 $318.9 $236.6
========================================= ====================================================
Operations by Geographic Area
Revenues Operating Profit
----------------------------------------- ----------------------------------------------------
$ in millions 1996 1995 1994 1996 1995 1994
- ---------------------------------------------------------------------------- ----------------------------------------------------
United States $ 6,783.5 $5,814.5 $ 6,100.3 $396.5 $297.4 $284.9
Europe 1,426.6 1,637.2 1,166.4 23.6 27.7 23.5
Central and South America 1,210.0 801.2 197.8 (13.9) 9.6 14.9
Asia Pacific 1,042.8 780.0 673.2 36.5 49.4 12.8
Middle East and Africa 287.6 30.5 89.6 4.7 7.2 6.1
Canada 264.7 238.0 258.0 7.1 5.7 12.1
----------------------------------------- ----------------------------------------------------
$11,015.2 $9,301.4 $ 8,485.3 $454.5 $397.0 $354.3
========================================= ====================================================
Operations by Business Segment
Operating Profit
-----------------------------------------
$ in millions 1996 1995 1994
- -----------------------------------------------------------------------------
Engineering and Construction $320.0 $286.0 $259.1
Coal 134.5 111.0 95.2
-----------------------------------------
$454.5 $397.0 $354.3
=========================================
Depreciation, Depletion and Amortization
-----------------------------------------
$ in millions 1996 1995 1994
- -----------------------------------------------------------------------------
Engineering and Construction $ 88.7 $ 62.9 $ 47.1
Coal 105.4 83.7 66.8
Corporate -- .4 .4
-----------------------------------------
$194.1 $147.0 $114.3
=========================================
Operations by Geographic Area
Identifiable Assets
----------------------------------------
$ in millions 1996 1995 1994
- ----------------------------------------------------------------------------
United States $3,392.3 $2,764.2 $ 2,463.1
Europe 158.4 204.3 147.5
Central and South America 145.6 92.3 41.9
Asia Pacific 165.0 84.2 107.5
Middle East and Africa 30.8 21.4 20.2
Canada 59.6 62.5 44.6
----------------------------------------
$3,951.7 $3,228.9 $2,824.8
========================================
Included in United States revenues are export sales to unaffiliated customers of
approximately $1 billion in 1996, $680 million in 1995 and $857 million in 1994.
The following table reconciles business segment operating profit with the
earnings before taxes:
$ in millions 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
Operating profit $454.5 $397.0 $354.3
Interest income, net 11.6 19.5 4.7
Corporate administrative and general expense (48.1) (48.6) (47.9)
Other items, net (4.8) (5.7) (7.8)
-------------------------------------------------
Earnings before taxes $ 413.2 $362.2 $303.3
=================================================
Fluor Corporation 44
================================================================================
Reports of Management and Independent Auditors
Management
The company is responsible for preparation of the accompanying consolidated
balance sheet and the related consolidated statements of earnings, cash flows
and shareholders' equity. These statements have been prepared in conformity with
generally accepted accounting principles and management believes that they
present fairly the company's consolidated financial position and results of
operations. The integrity of the information presented in the financial
statements, including estimates and judgments relating to matters not concluded
by fiscal year end, is the responsibility of management. To fulfill this
responsibility, an internal control structure designed to protect the company's
assets and properly record transactions and events as they occur has been
developed, placed in operation and maintained. The internal control structure is
supported by an extensive program of internal audits and is tested and evaluated
by the independent auditors in connection with their annual audit. The Board of
Directors pursues its responsibility for financial information through an Audit
Committee of Directors who are not employees. The internal auditors and the
independent auditors have full and free access to the Committee. Periodically,
the Committee meets with the independent auditors without management present to
discuss the results of their audits, the adequacy of the internal control
structure and the quality of financial reporting.
/s/ Les McCraw /s/ J. Michal Conaway
Les McCraw J. Michal Conaway
Chairman of the Board and Senior Vice President and
Chief Executive Officer Chief Financial Officer
Independent Auditors
Board of Directors and Shareholders
Fluor Corporation
We have audited the accompanying consolidated balance sheet of Fluor Corporation
as of October 31, 1996 and 1995, and the related consolidated statements of
earnings, cash flows, and shareholders' equity for each of the three years in
the period ended October 31, 1996. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Fluor
Corporation at October 31, 1996 and 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
October 31, 1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Orange County, California
November 19, 1996
1996 Annual Report 45
===============================================================================
Quarterly Financial Data (Unaudited)
The following is a summary of the quarterly results of operations:
First Second Third Fourth
$ in thousands, except per share amounts Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------
1996
Revenues $ 2,402,414 $ 2,582,229 $ 2,702,821 $ 3,327,728
Gross margin 99,072 105,054 112,862 132,755
Earnings before taxes 89,763 97,082 104,866 121,507
Net earnings 57,448 63,700 68,077 78,859
Earnings per share $ .68 $ .75 $ .81 $ .93
1995
Revenues $ 2,059,626 $ 2,229,313 $ 2,436,831 $ 2,575,614
Gross margin 84,931 95,342 100,946 110,089
Earnings before taxes 79,124 86,984 94,579 101,527
Net earnings 50,323 55,322 60,152 65,971
Earnings per share $ .61 $ .66 $ .72 $ .79
Worldwide Offices
Abu Dhabi, United Arab Emirates Kuala Lumpur, Malaysia
Albuquerque, New Mexico Kuwait City, Kuwait
Anchorage, Alaska Leipzig, Germany
Appleton, Wisconsin Lima, Peru
Arlington, Virginia London, England
Asturias, Spain Manchester, England
Bakersfield, California Manila, Philippines
Baku, Azerbaijan Melbourne, Australia
Bangkok, Thailand Mexico City, Mexico
Basel, Switzerland Miami, Florida
Beijing, People's Republic of China Moscow, Russia
Bergen op Zoom, Netherlands Nashville, Tennessee
Bogota, Colombia New Delhi, India
Brisbane, Australia New York, New York
Buenos Aires, Argentina Norwood, Massachusetts
Calgary, Alberta, Canada Perth, Australia
Camberley, England Philadelphia, Pennsylvania
Caracas, Venezuela Phoenix, Arizona
Charlotte, North Carolina Richland, Washington
Chicago, Illinois Richmond, Virginia
Cincinnati, Ohio Rumford, Rhode Island
Corpus Christi, Texas Sacramento, California
Dallas, Texas San Francisco, California
Denver, Colorado San Juan, Puerto Rico
Detroit, Michigan Santa Clara, California
Dhahran, Saudi Arabia Santiago, Chile
Dubai, United Arab Emirates Sao Paulo, Brazil
Dusseldorf, Germany Seoul, Korea
Gliwice, Poland Shanghai, People's Republic of China
Greenville, South Carolina Singapore
Haarlem, Netherlands Sudbury, Ontario, Canada
Hanoi, Vietnam Taipei, Taiwan
Ho Chi Minh City, Vietnam Tokyo, Japan
Hong Kong Tucson, Arizona
Houston, Texas Tulsa, Oklahoma
Idaho Falls, Idaho Vancouver, British Columbia, Canada
Irvine, California Warsaw, Poland
Jakarta, Indonesia Washington, D.C.
Johannesburg, South Africa Wiesbaden, Germany
Kingston, Ontario, Canada
Fluor Corporation 46
================================================================================
Directors
[PHOTO OF LES MCCRAW APPEARS HERE]
Les McCraw, 62, is Chairman of the Board and Chief Executive Officer. Joining
the company in 1975, he led the formation of Fluor Daniel in 1986. He was
elected President of Fluor Corporation in 1988, and Chief Executive Officer in
1990. Mr. McCraw also is a director of Allergan and New York Life, and is active
in a number of business and civic organizations at the local, state and national
levels. (1984) /(1)(3)/
[PHOTO OF DON L. BLANKENSHIP APPEARS HERE]
Don L. Blankenship, 46, is President, Chief Executive Officer and Chairman of
the Board of A.T. Massey. He brings important diversified business perspective
to the Board's deliberations, as well as valuable expertise in the coal
industry. Mr. Blankenship serves on the Board of Advisors of the Mary Babb
Randolph Cancer Center of West Virginia at West Virginia University, and is a
director of the World Coal Institute, and the West Virginia Mining and
Reclamation Association. (1996)
[PHOTO OF HUGH K. COBLE APPEARS HERE]
Hugh K. Coble, 62, is Vice Chairman of Fluor Corporation. He joined Fluor in
1966 and has served in numerous positions throughout his career, including
several posts overseas with responsibilities for both international marketing
and operations. As a recognized global executive, Mr. Coble was part of the team
that led the formation of Fluor Daniel. Mr. Coble is a director of The Duriron
Company and Beckman Instruments, Inc. (1984)
[PHOTO OF GOVERNOR CARROLL CAMPBELL, JR. APPEARS HERE]
Governor Carroll Campbell, Jr., 56, is President and Chief Executive Officer of
the American Council of Life Insurance. He is a former two-term Governor of
South Carolina and has demonstrated leadership in public policy pertaining to
job and business creation, and social and fiscal matters. From 1978 to 1986, he
served in the U.S. House of Representatives and was a member of the
Appropriations and Ways and Means committees. He was chairman of the National
Governor's Association 1993-94. Governor Campbell is a director of AVX
Corporation and Norfolk Southern Corporation. (1995) /(2)(3)/
[PHOTO OF PETER J. FLUOR APPEARS HERE]
Peter J. Fluor, 49, is President and Chief Executive Officer of Texas Crude
Energy, Inc. Mr. Fluor brings extensive knowledge of the oil and gas industry, a
key market for Fluor Daniel. He also serves as a director of Seagull Energy
Corporation and Texas Commerce Bank. (1984) /(2)(4)/
[PHOTO OF DAVID P. GARDNER APPEARS HERE]
Dr. David P. Gardner, 63, is President of the William and Flora Hewlett
Foundation and former President of both the University of California and the
University of Utah. His extensive career in education provides valuable
perspective on a topic of key importance to a professional services company like
Fluor. Dr. Gardner is also a director of John Alden Financial Corporation and
First Security Corporation. (1988) /(3)(4)/
[PHOTO OF WILLIAM R. GRANT APPEARS HERE]
William R. Grant, 72, is Chairman of the Board of Galen Associates, a healthcare
venture capital group, former Chairman of MacKay-Shield Financial Corporation
and President of Smith Barney. Mr. Grant adds extensive financial community
perspective to the Board. Additionally, he has taken a leading role in providing
counsel on current issues in corporate governance. He is also a director of
Allergan, New York Life, Seagull Energy, SmithKline Beecham, Witco Corporation
and several small, private companies in the Galen portfolio. (1982) /(1)(2)(4)/
[PHOTO OF THOMAS L. GOSSAGE APPEARS HERE]
Thomas L. Gossage, 62, is the retired Chairman and former President and Chief
Executive Officer of Hercules Incorporated. He brings global business operations
perspective, as well as valuable expertise in the chemical industry. Mr. Gossage
also serves as a director of The Dial Corporation and Alliant Techsystems Inc.,
and is Vice Chairman of the Georgia Tech Advisory Board and a member of the
Board of Trustees of the Georgia Tech Foundation, Inc. (1997) /(4)/
[PHOTO OF ADMIRAL BOBBY R. INMAN APPEARS HERE]
Admiral Bobby R. Inman, 65, retired U.S. Navy, served as Director of the
National Security Agency and Deputy Director of Central Intelligence. Admiral
Inman's depth of political insight, awareness of global changes and
understanding of technology serves Fluor Corporation well. He is also a director
of Science Applications International, SBC Communications, Temple-Inland and
Xerox. (1985) /(1)(3)(4)/
[PHOTO OF ROBERT V. LINDSAY APPEARS HERE]
Robert V. Lindsay, 71, is the retired former President of J.P. Morgan & Co.,
Incorporated. Mr. Lindsay's 38-year career at J.P. Morgan encompassed a broad
range of responsibilities which have provided extensive experience in
international banking and finance. He also serves as a director of Chubb, First
Hudson Valley Bank, Russell Reynolds Associates, Inc. and United Meridian, and
is senior advisor to Unibank Denmark A/S. (1982) /(1)(2)(4)/
[PHOTO OF VILMA S. MARTINEZ APPEARS HERE]
Vilma S. Martinez, 53, is a Partner at the law firm of Munger, Tolles & Olson,
and the former President and General Counsel for the Mexican-American Legal
Defense and Educational Fund (MALDEF). Her position of national prominence in
both the business and legal communities gives her key insights on workforce
issues. Ms. Martinez is also a director of Anheuser-Busch Companies, Inc. and
Sanwa Bank California, and serves on a variety of advisory boards and community
organizations. (1993) /(2)(3)/
[PHOTO OF BUCK MICKEL APPEARS HERE]
Buck Mickel, 71, is Fluor's retired Vice Chairman of the Board. Mr. Mickel has
served the company since 1948. Beginning his career at Daniel Construction
Company, which was acquired by Fluor in 1977, he later served in senior officer
positions for Fluor. His broad business connections and strong regional
associations continually contribute ideas and opportunities for the company. Mr.
Mickel also serves as a director of Delta Woodside Industries, Duke Power,
Emergent Group, Insignia Financial, Liberty Corporation and RSI Holdings. (1977)
/(3)/
[PHOTO OF DR. MARTHA R. SEGER APPEARS HERE]
Dr. Martha R. Seger, 64, is a Distinguished Visiting Professor of Finance at
Hillsdale College and former member of the Board of Governors of the Federal
Reserve System. Dr. Seger's career included numerous positions which have
yielded significant experience in the fields of finance, economics and
international banking. She is also a director of Amoco, Providian Corp., Johnson
Controls, Kroger, Tucson Electric and Xerox. (1991) /(2)(3)/
Years in parentheses indicate the year each director was elected to the Board.
Except as indicated, all positions are with the company.
1996 Annual Report 47
===============================================================================
Board Committees
Fluor Corporation's Board of Directors reflects many of the characteristics
which are key to a strong, thoughtful approach to corporate governance and
oversight. With 13 members comprised of three inside and 10 outside directors,
the Board possesses a good balance of both engineering and construction
expertise and overall business know-how.
There are four formal meetings a year with numerous telephone
discussions as necessary to handle matters requiring Board approval. Altogether
there are four standing committees--the Executive Committee, Audit Committee,
Corporate Governance Committee, and the Organization and Compensation Committee.
Through work on its committees and ongoing interactions with members of
executive management, the Board is involved in practically every activity
critical to the company's operating success, with a particular emphasis on
corporate direction and strategy.
Executive Committee/(1)/
Chairman: Les McCraw
The Executive Committee acts on behalf of the Board with its full authority on
matters which require resolution between regular Board meetings. The committee
is comprised of the Chairman of the Board and the chairmen of the Board's three
standing committees. This approach is in contrast to the committee's previous
mission and structure when it met monthly and was composed solely of inside
management. The committee changed to its current approach two years ago when the
company transitioned to a Board comprised primarily of outside directors.
Audit Committee/(2)/
Chairman: Robert V. Lindsay
The Audit Committee represents the Board in oversight of the company's financial
condition, its reporting procedures and financial controls. Among the
committee's many responsibilities are review of the company's annual report,
Form 10-K and Proxy statement. It also meets regularly with the company's
internal auditors and financial management team to review accounting controls
and practices. In addition, it meets both annually and quarterly with Ernst &
Young, the company's independent auditors, to review the scope of its work and
to assure that appropriate policies and procedures are in order. Finally, the
committee nominates the firm of independent auditors for appointment by the
Board and ratification by shareholders.
Governance Committee/(3)/
Chairman: Admiral Bobby R. Inman
The Governance Committee focuses on the membership, roles and responsibilities,
and performance of the Board of Directors. The committee recommends the
organizational structure of the Board and the assignment of members to
committees where much of the Board's work is conducted. All outside directors
serve on at least two committees. In its search for new members, the committee
looks for diversity of gender and race, as well diversity in experience to help
ensure the strongest capability possible in providing oversight and perspective.
In addition, the committee facilitates participation by all directors in the
affairs of the corporation. The accessibility between the Board and company
management not only provides better insight to the directors on company
activities but also facilitates the experience of the Board being readily
available to company management whenever and wherever it can be most useful.
Organization and Compensation Committee/(4)/
Chairman: William R. Grant
The Organization and Compensation Committee provides guidance and oversight
regarding the company's organizational structure; the quality, diversity and
depth of the executive management team; and the effectiveness of the company's
compensation programs for senior employees. The primary focus and philosophy of
all company compensation programs is to ensure that they are linked directly to
initiatives which will yield increasing levels of shareholder value. Currently,
for example, 76 percent of Chairman Les McCraw's annual compensation is at risk
and dependent upon the achievement of specified objectives, financial results
and the Board's evaluation of his total performance. For other members of senior
management, approximately 68 percent of the total compensation is at risk. As
the company heads into 1997, the committee believes that management compensation
is properly aligned and incentivised for further enhancement of shareholder
value.
Senior International Advisors
Chester A. Crocker, 55, is the Landegger Distinguished Research Professor of
Diplomacy at the School of Foreign Service of Georgetown University. Mr. Crocker
also serves as Chairman of the Board of the United States Institute of Peace.
Sir Robin Renwick, 58, is a Director of the merchant bank, Robert Fleming, and
British Airways. During his distinguished 30-year career in the British Foreign
Service, he served in senior posts in New Delhi, Paris and London, including
advising Prime Minister Margaret Thatcher in the negotiations to end the
Rhodesian War and negotiations with the European Community. Sir Robin was
British Ambassador to South Africa (1987-91) and British Ambassador to the
United States of America (1991-95).
Fluor Corporation 48
===============================================================================
Executive Leadership Team
Les McCraw
Chairman and Chief Executive Officer (1975)
Hugh K. Coble
Vice Chairman (1966)
Dennis W. Benner
Vice President and Chief Information Officer
(1994)
Dennis G. Bernhart
Group President--Americas (1968)
Fluor Daniel
Don L. Blankenship
Chairman, President and Chief Executive Officer
A. T. Massey Coal Company, Inc. (1982)
Alan L. Boeckmann
Group President--Chemical Processes and
Industrial (1979)
Fluor Daniel
Chuck Bradley
Vice President--Human Resources and
Administration (1958)
Richard D. Carano
Group President--Asia Pacific (1970)
Fluor Daniel
E. David Cole, Jr.
Group President--Petroleum/Petrochemical
Processes and Project Services (1965)
Fluor Daniel
J. Michal Conaway
Senior Vice President and Chief Financial Officer
(1993)
Charles R. Cox
Group President--Industrial (1969)
Fluor Daniel
================================================================================
Lawrence N. Fisher
Senior Vice President--Law and Secretary
(1974)
Richard A. Flinton
Chairman
Fluor Constructors International, Inc. (1960)
Thomas P. Merrick
Vice President--Strategic Planning (1984)
Fluor Daniel
Charles R. Oliver, Jr.
Group President--Global Sales, Project Finance,
and Middle East and India (1970)
Fluor Daniel
James O. Rollans
Senior Vice President and Chief Administrative
Officer (1982)
Carel J. C. Smeets
Group President--Europe, Former Soviet Union
and Africa (1969)
Fluor Daniel
Jim Stein
Group President--Diversified Services (1964)
Fluor Daniel
R. M. (Dick) Teater
Group President--Power and Government (1980)
Fluor Daniel
Other Senior Executives
Betty H. Bowers
Vice President--Government Relations (1974)
Lila J. Churney
Vice President--Investor Relations (1980)
Jan L. Donovan
Assistant Secretary (1983)
J. Robert Fluor II
Vice President--Community Relations (1967)
Stephen F. Hull
Vice President and Treasurer (1996)
================================================================================
Thomas H. Morrow
Vice President--Tax (1984)
Victor L. Prechtl
Vice President and Controller (1981)
Lee C. Tashjian, Jr.
Vice President--Corporate Relations (1995)
W. Mack Torrence
Vice President--Project Finance (1989)
A. T. Massey Coal Company, Inc.
Don L. Blankenship
Chairman, President and Chief Executive Officer
(1982)
Madeleine M. Curle
Vice President--Benefits (1993)
Jerry M. Eyster
Vice President--Corporate Development (1987)
James L. Gardner
Senior Vice President and General Counsel
(1993)
Bennett K. Hatfield
Vice President--Planning (1983)
Richard M. Hendrick
Senior Vice President--Mining and Preparation
(1992)
Wynston D. Holbrook
Executive Vice President--Sales (1972)
Baxter F. Phillips, Jr.
Vice President--Administration (1981)
H. Drexel Short
Senior Vice President--Group Operations (1981)
Stanley C. Suboleski
Vice President of Operations--Strategy (1993)
James S. Twigg
Vice President and Chief Financial Officer and
Treasurer (1981)
================================================================================
Fluor Constructors International, Inc.
Richard A. Flinton
Chairman (1960)
Lawrence R. Copeland
President (1969)
Years in parentheses indicate the year each officer or executive joined the
company.
Company Contacts
Shareholders may call
(800) 854-0141
Stockholder Services
Lawrence N. Fisher
(714) 975-6961
Investor Relations [PICTURE APPEARS HERE]
Lila J. Churney
(714) 975-3909
Fluor's investor relations activities are dedicated to providing investors with
complete and timely information. All investor questions are welcome.
1996 Annual Report
================================================================================
Stockholders' Reference
Common Stock Information
At December 31, 1996, there were 83,904,038 shares outstanding and approximately
13,400 stockholders of record of Fluor's common stock.
The following table sets forth for the periods indicated the cash dividends
paid per share of common stock and the high and low sales prices of such common
stock as reported in the Consolidated Transactions Reporting System.
Common Stock and Dividend Information
Price Range
Dividends ------------------------
Per Share High Low
Fiscal 1996
First Quarter $.17 $ 68 $ 54 3/4
Second Quarter .17 71 7/8 61 7/8
Third Quarter .17 67 3/8 57 3/4
Fourth Quarter .17 67 3/8 59 1/2
-----
$.68
Fiscal 1995
First Quarter $.15 $ 50 3/4 $ 41 1/4
Second Quarter .15 52 45 1/2
Third Quarter .15 59 1/2 49 1/8
Fourth Quarter .15 59 3/8 54
-----
$.60
Form 10-K
A copy of the Form 10-K, which is filed with the Securities and Exchange
Commission, is available upon request.
Write to:
Senior Vice President-Law
Fluor Corporation
3353 Michelson Drive
Irvine, California 92698
(714) 975-2000
Registrar and Transfer Agent
ChaseMellon Shareholder Services, L.L.C.
400 South Hope Street
Fourth Floor
Los Angeles, California 90071
and
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
For change of address, lost dividends, or lost
stock certificates, write or telephone:
ChaseMellon Shareholder Services, L.L.C.
469 Washington Bridge Station
New York, NY 10033
Attn: Securityholder Relations
(800) 813-2847
Independent Auditors
Ernst & Young LLP
18400 Von Karman Avenue
Irvine, California 92612
Annual Stockholders' Meeting
Annual report and proxy statement are mailed
about February 1. Fluor's annual meeting of
stockholders will be held at 9:00 a.m. on
March 11, 1997, at the
Fluor Daniel Houston Complex
One Fluor Daniel Drive
Sugar Land, Texas
Stock Trading
Fluor's stock is traded on the New York, Midwest,
Pacific, Amsterdam, London and Swiss Stock
Exchanges. Common stock domestic trading
symbol: FLR.
Dividend Reinvestment Plan
Fluor's Dividend Reinvestment Plan provides stockholders of record with the
opportunity to conveniently and economically increase their ownership in Fluor.
Through the Plan, stockholders can automatically reinvest their cash dividends
in shares of Fluor common stock. Optional cash investments may also be made in
additional Fluor shares ranging from a minimum of $100 per month to a maximum of
$10,000 per quarter. For details on the Plan, contact Fluor's agent, ChaseMellon
Shareholder Services (800) 813-2847.
Duplicate Mailings
Shares owned by one person but held in different forms of the same name result
in duplicate mailing of stockholder information at added expense to the company.
Such duplication can be eliminated only at the direction of the stockholder.
Please notify ChaseMellon Shareholder Services in order to eliminate
duplication.
History of Stock Dividends and Splits Since Going Public in 1950
08/23/57 20% Stock Dividend
12/15/61 5% Stock Dividend
03/11/63 5% Stock Dividend
03/09/64 5% Stock Dividend
03/08/65 5% Stock Dividend
02/14/66 5% Stock Dividend
03/24/66 2 for 1 Stock Split
03/27/67 5% Stock Dividend
02/09/68 5% Stock Dividend
03/22/68 2 for 1 Stock Split
05/16/69 5% Stock Dividend
03/06/70 5% Stock Dividend
03/05/71 5% Stock Dividend
03/10/72 5% Stock Dividend
03/12/73 5% Stock Dividend
03/11/74 3 for 2 Stock Split
08/13/79 3 for 2 Stock Split
07/18/80 2 for 1 Stock Split
Web page address:
www.fluor.com
Design: Baker Design Associates
Photography: Jim Sims, Various
Illustration: Danny Shanahan, Kevin Sprouls
Printing: George Rice & Sons.
EX-21
5
FLUOR CORPORATION SUBSIDIARIES
EXHIBIT 21
==========
FLUOR CORPORATION SUBSIDIARIES
Organized
Name of Company Under Laws of
=============== =============
FLUOR CORPORATION (Subsidiaries 1) Delaware
American Construction Equipment Company, Inc. California
American Equipment Company, Inc. S. Carolina
AMECO Services Inc. Delaware
AMEC Equipment Licensing France
S & R Equipment Co., Inc. Ohio
Apex Coal Company Virginia
Claiborne Fuels, Inc. California
Coral Drilling, C.A. Venezuela
Daniel International Corporation S. Carolina
Daniel Navarra, S.A. Spain
Fluor Daniel Engineering, Inc. Ohio
Materiales y Equipos Auxiliares para la
Construccion, S.A. Spain
FD Services, Inc. California
Norfolk Maintenance Corporation California
Fluor Abadan Limited Bermuda
Fluor Atlantic Limited Bermuda
Fluor Continental Limited Bermuda
FD Engineers & Constructors, Inc. California
Acquion, Inc. California
Fluor Constructors International, Inc. California
Fluor Constructors Canada Ltd. Canada
Fluor Constructors Indonesia, Inc. California
Fluor Management and Technical Services, Inc. California
Fluor Daniel America, Ltda. California
Fluor Daniel Engineers & Consultants Ltd. Mauritius
Fluor Daniel, Inc. California
ADP Fluor Daniel, Inc. Arizona
ADP/FD of Nevada, Inc. Nevada
ADP/Fluor Daniel International, Inc. Delaware
ADP/Marshall, LLC (2) Delaware
Applied Recruiting Company Texas
Efdee Connecticut Architects, Inc. Connecticut
Efdee Engineering Corporation N. Carolina
Efdee Mississippi Architects, A Professional
Association Mississippi
Efdee New York Engineers & Architects P.C. New York
Encee Architecture Services, P.C. N. Carolina
FD Mexico, Inc. Delaware
FDAE Corporation New Jersey
FDEE Consulting, Inc. California
FDHM, Inc. California
FD/MK Limited Liability Company (3) Delaware
Fluor Daniel, Inc. - Philippines Philippines
Fluor Daniel Fernald, Inc. California
Fluor Environmental Resources Management
Services, Inc. Delaware
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Chile, Inc. California
Fluor Daniel Chile Ingenieria y Con-
struccion S.A. Chile
Ingenieria y Construcciones Fluor Daniel
Chile Limitada Chile
Fluor Colombia Limited Delaware
Fluor Cyprus Limited Cyprus
Fluor Daniel, a Professional Architectural
Corporation Louisiana
Fluor Daniel A&E Services, Inc. California
Fluor Daniel Alaska, Inc. Alaska
Fluor Daniel Alumatech, Inc. Delaware
Fluor Daniel Asia, Inc. California
P.T. Nusantara Power Services (2) Indonesia
Fluor Daniel Brasil Engenharia e Servicos Ltda. Brazil
Fluor Daniel B.V. Netherlands
Acquion B.V. Netherlands
Fluor Daniel Consultants B.V. Netherlands
Fluor Daniel Engineering and Construction
Services Limited Turkey
International Refinery Contractors C.V.(4) Netherlands
International Refinery Contractors B.V.(5) Netherlands
Prochem S.A.(6) Poland
Prosynchem Sp.z o.o. Poland
Surplus International Management Services
(SIMS) B.V. Netherlands
Technical Resource Services B.V. Netherlands
Fluor Daniel Belgium, N.V. Belgium
Fluor Daniel Canada, Inc. Canada
Soana Holdings Ltd. Canada
Fluor Daniel Wright Ltd. Canada
Compania Minera Explowel Ecuador
Lynx Geosystems Inc. Canada
Saskwright Engineers Limited Canada
Wright Engineers (Chile) Limitada Chile
Wright Engineers Limitada Peru Peru
Wright Engineers Pty. Limited Australia
TRS Recruiting Services Canada, Inc. Canada
Wright Engineers (International) Limited Bermuda
Fluor Daniel Caribbean, Inc. Delaware
Daniel Construction Company, Inc. Tennessee
Daniel/McCarthy Limited Ireland
Daniel/McCarthy International Limited Ireland
DMIS, Inc. S. Carolina
Facility & Plant Services, Inc. S. Carolina
2
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Daniel Export Services, Inc. Delaware
Fluor Daniel International (Malaysia)
Sdn. Bhd. Malaysia
Fluor Daniel Maintenance Services, Inc. Delaware
Fluor Daniel Services Corporation Delaware
Fluor Daniel China, Inc. California
Fluor Daniel China Services, Inc. California
Fluor Daniel China Technology, Inc. California
Fluor Daniel Coal Services International, Inc. Delaware
Fluor Daniel Construction Company California
Fluor Daniel Development Corporation California
Crown Energy Company New Jersey
Fluor Daniel Modesto, Inc. California
Fluor Daniel Temecula, Inc. California
Fluor Daniel Tempe, Inc. California
Fluor Daniel Ada, Inc.(5) Idaho
Gloucester Limited, Inc. California
Gloucester Limited II, Inc. California
Tarrant Energy, Inc. California
Fluor Daniel Eastern, Inc. California
P.T. Fluor Daniel Indonesia Indonesia
Fluor Daniel Energy Investments, Inc. Delaware
Fluor Daniel Engineers & Constructors, Inc. Delaware
Fluor Daniel Project Consultants
(Shenzhen) Co., Ltd. P.R.C.
Fluor Daniel Engineers & Constructors, Ltd. California
AEC International, Ltd. (3) Korea
Project Administrative Services, Limited(5) Hong Kong
Fluor Daniel Environmental Strategies, Inc. Delaware
Fluor Daniel Espana, S.A. California
Daniel International (Saudi Arabia) Ltd. Saudi Arabia
Fluor Arabia Limited (5) Saudi Arabia
Fluor Daniel Eurasia, Inc. California
Fluor Daniel Florida Rail, Inc. Delaware
Fluor Daniel GmbH West Germany
Fluor Daniel Group, Inc. Delaware
Chemgineering Holding Company GmbH (7) Switzerland
Fluor Daniel Chemgineering (8) Switzerland
Fluor Daniel GTI, Inc. (9) Delaware
Fluor Daniel Hanford, Inc. Washington
Fluor Daniel India, Inc. California
Fluor Daniel International Limited U.K.
Fluor Daniel Limited U.K.
Fluor Norge A/S Norway
Fluor Ocean Services Limited U.K.
Management Resource Group PLC (The) U.K.
TRS Staffing Solutions (U.K.) Ltd. U.K.
3
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Daniel (Japan) Inc. Japan
Fluor Daniel Kft. Hungary
Fluor Daniel Latin America, Inc. California
Fluor-Daniel (Malaysia) Sdn. Bhd. Malaysia
Fluor Daniel Mexico S.A. California
ICA-Fluor Daniel, S. de R.L. de C.V. (10) Mexico
Fluor Daniel Northwest, Inc. Washington
Fluor Daniel Northwest Services, Inc. Washington
Ameco Services, S. de R.L. de C.V. Mexico
TRS International Group, S. de R.L. de C.V. Mexico
Fluor Daniel Mining & Metals, Ltd. California
Fluor Daniel Pty. Ltd. Australia
Civil and Mechanical Maintenance Pty. Ltd. Australia
Fluor Daniel Constructors Pty. Ltd. Australia
Fluor Daniel Power & Maintenance
Services Pty. Ltd. Australia
Fluor Daniel Gas Services Pty. Ltd. Australia
Fluor Daniel (Qld) Pty. Ltd. Australia
TRS International Group Pty. Ltd. Australia
Fluor Daniel New Zealand Limited California
Fluor Daniel (NPOSR), Inc. Delaware
Fluor Daniel Overland Express, Inc. Delaware
Fluor Daniel Overseas, Inc. California
Fluor Daniel P.R.C., Ltd. California
Fluor Daniel Pacific, Inc. California
Fluor Daniel Properties Limited U.K.
Fluor Daniel Pulp & Paper, Inc. California
Fluor Daniel S.A. France
Fluor Daniel, S.A. Spain
Fluor Daniel Sales Corporation West Indies
Fluor Daniel South America Limited California
Fluor Daniel South East Asia, Ltd. California
Fluor Daniel Southeast, Inc. California
Fluor Daniel Technical Services, Inc. Texas
Fluor Daniel Thailand, Ltd. California
Fluor-Doris, Inc. Texas
Fluor Engineers, Inc. Delaware
Tecnofluor, C.A. (11) Venezuela
Tecnoconsult Ingenieros Consultores, S.A.(11) Venezuela
Fluor Egypt Egypt
Fluor Engineering Corporation Michigan
Fluor Hong Kong Limited Hong Kong
Fluor Indonesia, Inc. California
P.T. Panca Perintis Indonesia Indonesia
Fluor International, Inc. California
4
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor International Limited Bermuda
Fluor Iran Iran
Fluor Italia S.r.l. Italy
Fluor-Korea Corporation, Ltd. (The) Korea
Fluor Mideast Limited Bermuda
Fluor Ocean Services International, Inc. California
Fluor Plant Services International, Inc. California
Fluor Plant Services International Ltd. Bermuda
Fluor International Nigeria Limited Nigeria
Fluor Technical Services Limited California
Fluor Texas, Inc. Texas
Fluor Venezuela, S.A. Venezuela
Fluorven Limited California
Knightsford Limited Guernsey
Marshall Contractors, Inc. Rhode Island
Nutmeg Valley Resources, Inc. California
Ranhill-Fluor Daniel Sdn. Bhd. Malaysia
Rienzi Limited Guernsey
Red Tower Limited Guernsey
Rippleshell Limited Guernsey
Soli.Flo, LLC (12) Delaware
Soli.Flo, Inc. California
Soli.Flo Partners, L.P. California
Stanhope Management Services Limited U.K.
TDF, Inc. California
Venezco, Inc. California
Whidbey Services Co. Nevada
Williams Brothers Engineering Company Delaware
Fluor Daniel Argentina, Inc. Delaware
Williams Brothers Engineering Limited U.K.
Williams Brothers Engineering Pty. Ltd. Australia
Williams Brothers International Limited Guernsey
Williams Brothers Petroleum Services, Inc. Delaware
Williams Brothers Process Services, Inc. Delaware
Wilmore/Fluor Modesto LLC (5) California
Wireless Engineering Services Group, LLC (5) Delaware
Wright Engineers, Inc. Nevada
Fluor Daniel India Private Limited India
Fluor Daniel Offshore Ltd. Mauritius
Fluor Daniel Telecommunications Corporation California
Indo-Mauritian Affiliates Limited Mauritius
Power Maintenance Services, Inc. Delaware
Strategic Organizational Systems Enterprises, Inc. California
5
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Strategic Organizational Systems Enterprises, Inc. (cont'd.)
Strategic Organizational Systems Construction
Division, Inc. California
Strategic Organizational Systems Environ-
mental Division, Inc. Oklahoma
Strategic Organizational Systems Environ-
mental Division, Inc. Louisiana
Strategic Organizational Systems Environ-
mental Engineering Division, Inc. Texas
SOS International, Inc. Alabama
Strategic Organizational Systems
Environmental Engineering
California Division, Inc. California
Strategic Organizational Systems Southern
California Division Inc. California
TRS International Payroll Co. Texas
TRS Staffing Solutions, Inc. S. Carolina
Corico Corporation N. Hampshire
The Consol Group, Inc. (14) N. Hampshire
Contract Solutions - Boston LLC (14) Massachusetts
Contract Solutions, Inc. N. Hampshire
The Consol Group, Inc. (14) N. Hampshire
Contract Solutions - Boston LLC (15) Massachusetts
Corico Office Professionals, Inc. N. Hampshire
The Consol Group, Inc. (14) N. Hampshire
TRS International Group, Inc. Delaware
TRS International Group Asia Pacific, Inc. California
TRS Management Resources, Inc. S. Carolina
Fluor Daniel Illinois, Inc. Delaware
Fluor Daniel Intercontinental, Inc. California
Fluor Daniel Nigeria Limited (13) Nigeria
Fluor Daniel Venture Group, Inc. California
Fluor Gulf Communications, Inc. California
Micogen Inc. California
Micogen Limited I, Inc. California
Micogen Limited II, Inc. California
United Nuclear Services, Inc. Ohio
Soli.Flo LLC (12) Delaware
Springfield Resource Recovery, Inc. Mass.
Fluor Distribution Companies, Inc. California
Fluor Mideast Limited California
Fluor (Nigeria) Limited Nigeria
Fluor Oil and Gas Corporation California
Fluor Real Estate Services, Inc. Delaware
Fluor Reinsurance Investments, Inc. Delaware
FRES, Inc. Delaware
Micogen Limited III, Inc. California
Middle East Fluor California
Pinnacle Insurance Co., Inc. Hawaii
St. Joe Carbon Fuels Corporation Delaware
6
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation (continued)
SJM Holding Corporation
Allegheny Coal Corporation
Massey Coal Company (partnership)
A. T. Massey Coal Company, Inc. (continued)
Aracoma Coal Company, Inc. W. Virginia
Barnabus Land Company W. Virginia
Ben Creek Coal Company W. Virginia
Big Bear Mining Company W. Virginia
Black Knight Mine Development Co. W. Virginia
Boone East Development Co. W. Virginia
Boone West Development Co. W. Virginia
Cabinawa Mining Company W. Virginia
Central Penn Energy Company, Inc. Pennsylvania
Central West Virginia Energy Company W. Virginia
Ceres Land Company W. Virginia
Cline & Chambers Coal Company, Inc. Kentucky
Dehue Coal Company W. Virginia
Douglas Pocahontas Coal Corporation W. Virginia
DRIH Corporation Delaware
Duchess Coal Company W. Virginia
Elk Run Coal Company, Inc. W. Virginia
Appalachian Capital Management Corp. W. Virginia
Bishop Mine Development Co. W. Virginia
Black Castle Mine Development Co. W. Virginia
Black King Mine Development Co. W. Virginia
Chess Processing Company W. Virginia
Marfork Coal Company, Inc. W. Virginia
Continuity Venture Capital Corp. W. Virginia
Progressive Venture Capital Corp. W. Virginia
Massey Capital Management Corp. W. Virginia
Massey New Era Capital Corp. W. Virginia
New Massey Capital Corp. W. Virginia
Preferred Management Capital Corp. W. Virginia
Rawl Sales Venture Capital Corp. W. Virginia
Sprouse Creek Venture Capital Corp. W. Virginia
Support Mining Company W. Virginia
Federal Development Corporation W. Virginia
Goals Coal Company W. Virginia
Green Valley Coal Company W. Virginia
Haden Farms, Inc. Virginia
Hazy Ridge Coal Company W. Virginia
Hillsboro Coal Company Pennsylvania
Hopkins Creek Coal Company Kentucky
Imec, Inc. Kentucky
Independence Coal Company, Inc. W. Virginia
Jacks Branch Coal Company W. Virginia
Joboner Coal Company Kentucky
Lauren Land Company Kentucky
Lewco Development Company W. Virginia
Lick Branch Coal Company W. Virginia
Long Fork Coal Company Kentucky
7
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
SJM Holding Corporation
Allegheny Coal Corporation
Massey Coal Company (partnership)
A. T. Massey Coal Company, Inc.
Long Fork Coal Company (continued)
Bandytown Coal Company W. Virginia
Eagle Energy, Inc. W. Virginia
Martin County Coal Corporation Kentucky
Pilgrim Mining Company, Inc. Kentucky
Massey Coal Sales Company, Inc. Virginia
Massey Coal Services, Inc. W. Virginia
Massey Consulting Services, Inc. Virgina
Massey Fuels Corporation Virginia
Menefee Land Company, Inc. Colorado
New Ridge Mining Company Kentucky
Nicco Corporation W. Virginia
Majestic Mining, Inc. Texas
Omar Mining Company W. Virginia
Peerless Eagle Coal Co. W. Virginia
Pennsylvania Mine Services, Inc. Pennsylvania
Mine Maintenance, Inc. Pennsylvania
Performance Coal Company W. Virginia
Continuity Venture Capital Corp. W. Virginia
SPM Capital Management Corp. W. Virginia
Rawl Sales & Processing Co. W. Virginia
Capstan Mining Company Colorado
Feats Venture Capital Corp. W. Virginia
Lynn Branch Coal Company, Inc. W. Virginia
Massey Coal Capital Corp. W. Virginia
Massey New Era Capital Corp. W. Virginia
New Massey Capital Corp. W. Virginia
Preferred Management Capital Corp. W. Virginia
Rawl Sales Venture Capital Corp. W. Virginia
Sprouse Creek Venture Capital Corp. W. Virginia
Sun Coal Company, Inc. Colorado
Sycamore Fuels, Inc. W. Virginia
Crystal Fuels Company W. Virginia
Road Fork Development Company, Inc. Kentucky
Robinson-Phillips Coal Company W. Virginia
Rockridge Coal Company W. Virginia
Rum Creek Coal Sales, Inc. W. Virginia
Vantage Mining Company Kentucky
Russell Fork Coal Company W. Virginia
SC Coal Corporation Delaware
Shannon-Pocahontas Coal Corporation W. Virginia
Sidney Coal Company, Inc. Kentucky
Stirrat Coal Company W. Virginia
Stone Mining Company Kentucky
T.C.H. Coal Co. Kentucky
Tennessee Consolidated Coal Company Tennessee
8
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
SJM Holding Corporation
Allegheny Coal Corporation
Massey Coal Company (partnership)
A. T. Massey Coal Company, Inc.
Tennessee Consolidated Coal Company (continued)
Chestnut Coal Company, Inc. Tennessee
Tennessee Energy Corp. Tennessee
Town Creek Coal Company W. Virginia
Tug Valley Land Company, Inc. W. Virginia
Vesta Mining Company Pennsylvania
White Buck Coal Company W. Virginia
Williams Mountain Coal Company W. Virginia
Wyomac Coal Company, Inc. W. Virginia
Compania Minera San Jose del Peru S.A. Peru
Mineral Resource Development Corporation Delaware
Robil International Corporation Delaware
St. Joe Erzbergbaugesellschaft m.b.H. Austria
St. Joe Exploracion Minera Inc. Delaware
St. Joe Exploracion Minera Inc.y Cia., S.R.C. Spain
St. Joe Luisito de Oro Inc. Delaware
St. Joe Luisito de Oro Inc. y Cia. S.R.C. Spain
St. Joe Minera de Espana, S.A. Spain
St. Joe South Pacific Pty. Limited Australia
St. Joe Bonaparte Pty. Limited Australia
St. Joe International Petroleum Corporation Delaware
St. Joe Egypt Exploration Corporation Delaware
St. Joe Minerals Corporation & Cia. Brazil
Coral Empreendimentos e Participacoes Ltda. Brazil
Comercial de Minerios do Sul do
Para Ltda. - COMIPA Brazil
Mineracao Alabastro Ltda. Brazil
Mineracao Sao Felix Ltda. Brazil
United Plant Services, Inc. Delaware
WODECO Nigeria Limited Nigeria
Zenith Coal Company, Inc. S. Carolina
---------------------------- ------------
(1) Does not include certain subsidiaries which if considered in the aggregate
as a single subsidiary, would not constitute a significant subsidiary
(2) 40% ownership
(3) 51% ownership
(4) 49.50% ownership
(5) 50% ownership
(6) 35% ownership
(7) 45% ownership
(8) 19.99% ownership
(9) 25% ownership
(10) 49% ownership
(11) 19.99% ownership
(12) 25% ownership
(13) 60% ownership
(14) 33 1/3% ownership
(15) 66 2/3% ownership
9
EX-23
6
CONSENT OF INDEPENDENT AUDITORS
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report on Form
10-K of Fluor Corporation of our report dated November 19, 1996, included in
the 1996 Annual Report to stockholders of Fluor Corporation.
We also consent to the incorporation by reference of our report dated
November 19, 1996, with respect to the consolidated financial statements of
Fluor Corporation incorporated by reference in the Annual Report on Form 10-K
for the year ended October 31, 1996, in the Registration Statements and
related Prospectuses pertaining to: Form S-3 No. 333-18315 for the issuance of
senior debt securities; Form S-8 No. 333-18151 for the 1996 Fluor Executive
Stock Plan; Form S-8 No. 33-58557 for the Fluor Corporation Stock Plan for
Non-Employee Directors; Form S-8 No. 33-31440 for the 1988 Fluor Executive
Stock Plan; Form S-8 No. 2-77532 for the 1982 Fluor Incentive Stock Option
Plan, 1981 Fluor Executive Stock Plan, 1977 Fluor Executive Stock Plan and
1971 Fluor Stock Option Plan; and Form S-8 No. 2-72712 for the Fluor
Corporation Salaried Employees' Savings Investment Plan.
ERNST & YOUNG LLP
Orange County, California
January 24, 1997
EX-24.1
7
POWER OF ATTORNEY
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and officer of
FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute
and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and each of them,
with full power to act without the other, as his true and lawful attorneys-in-
fact and agents, for him and in his name, place and stead, in any and all
capacities, to sign the annual report on Form 10-K for the fiscal year ended
October 31, 1996, and any and all amendments thereto, to be filed by Fluor
with the Securities and Exchange Commission and to file such annual report and
any amendments, with any and all exhibits thereto, and any and all other
information and documents in connection therewith, with the Securities and
Exchange Commission; and the undersigned does hereby ratify and confirm as his
own act and deed all that such attorneys-in-fact and agents, and each of them
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as
of the 28th day of January, 1997.
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
L. G. McCRAW Director, Chairman
- ------------------------------------- of the Board and
L. G. McCraw Chief Executive
Officer
EX-24.2
8
POWER OF ATTORNEY
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
D. L. BLANKENSHIP
---------------------------------------
D. L. Blankenship
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
C. A. CAMPBELL, JR.
---------------------------------------
C. A. Campbell, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
H. K. COBLE
---------------------------------------
H. K. Coble
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
P. J. FLUOR
---------------------------------------
P. J. Fluor
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
D. P. GARDNER
---------------------------------------
D. P. Gardner
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
W. R. GRANT
_____________________________________
W. R. Grant
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
B. R. INMAN
_____________________________________
B. R. Inman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
R. V. LINDSAY
_____________________________________
R. V. Lindsay
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as her true and lawful
attorneys-in-fact and agents, for her and in her name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
V. S. MARTINEZ
_____________________________________
V. S. Martinez
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
B. MICKEL
_____________________________________
B. Mickel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and R. R. DRYDEN and
each of them, with full power to act without the other, as her true and lawful
attorneys-in-fact and agents, for her and in her name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1996, and any and all amendments thereto, to be filed by
Fluor with the Securities and Exchange Commission and to file such annual
report and any amendments, with any and all exhibits thereto, and any and all
other information and documents in connection therewith, with the Securities
and Exchange Commission; and each of the undersigned does hereby ratify and
confirm as his own act and deed all that such attorneys-in-fact and agents,
and each of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 14th day of January, 1997.
M. R. SEGER
_____________________________________
M. R. Seger