Fluor 2004 Annual Report Download - page 3

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FLUOR CORPORATION 2004 ANNUAL REPORT
for growth
a foundation
Building
DEAR VALUED SHAREHOLDER:
As 2004 began, the management team of
Fluor® knew it would be a year to stretch the
tremendous potential of this great organization
in order to deliver solid performance for our
clients and our shareholders. With the global
economy strengthening, we set a goal to signifi-
cantly grow our company and its market share
in a number of industry sectors. We planned to
do all this while maintaining our discipline to the
fundamentals of operational excellence, which
have served us well for years.
I am proud to report that the hard work and dedication of our
employees worldwide have enabled us to meet and, in many cases,
exceed our objectives. We delivered our fifth consecutive year of earn-
ings growth in 2004 and set a record for new awards—the highest in
our history—which is a clear reflection of Fluor’s industry leadership.
Backlog also ended the year up sharply, building the foundation for
further growth in revenues and earnings in 2005 and beyond.
ALAN L. BOECKMANN
Chairman and Chief Executive Officer
Revenues from
Continuing Operations
dollars in billions
10.0
02
8.8
03
9.4
04
Earnings from
Continuing Operations
dollars in millions
170
02
179
03
187
04
Stock Price
At Year-End
dollars
28.00
02
39.64
03
54.51
04
2004 OPERATIONAL PERFORMANCE
Our strategy of being the most diversified provider
of capital services continues to serve us well. In 2004,
net earnings were $187 million, or $2.25 per share,
which was the high end of our guidance to Wall
Street. This compares with earnings from continuing
operations of $179 million, or $2.23 per share, a year
ago. Our earnings grew in 2004, offsetting the incre-
mental decline in Power over the past two years. With
no further decline expected in this segment, future
growth will flow directly to our bottom line. Impor-
tantly, Fluor has delivered compounded annual
earnings growth of approximately 10 percent over
the past five years.
All of our business groups, with the lone exception of Power, increased earnings in 2004, with particular strength coming
from our Government and Oil & Gas segments. This performance was achieved by leveraging our competitive strengths and
dedication to superior execution across the full spectrum of our markets.
As I previously mentioned, new awards in 2004 were a record $13.0 billion, up 31 percent from $10.0 billion last year.
As a result, consolidated backlog grew 39 percent to $14.8 billion, up from $10.6 billion at the end of 2003. Encouragingly,
new awards were quite broad-based, driving backlog growth in all business segments with the exception of Power. Especially
strong performance was delivered by our Industrial & Infrastructure segment, which increased its backlog by 73 percent, and
in Oil & Gas, which grew 40 percent to $4.8 billion. Encouragingly, Power began to see a reversal of its downward trend in
backlog, rebounding to nearly the same level as a year ago.