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Fluor Corporation | 6700 Las Colinas Boulevard | Irving, Texas 75039 | fl uor.com
Fluor Corporation (NYSE: FLR) is one of the world’s largest publicly traded engineering, procurement,
construction, maintenance and project management companies. Over the past century, Fluor, through
its operating subsidiaries, has become a trusted global leader in providing exceptional services and
technical knowledge.
Clients rely on Fluor to deliver world-class solutions that optimize their assets, improve their
competitive position and increase their long-term business success. Consistently rated as one of the
world’s safest contractors, Fluor’s primary objective is to develop, execute and maintain projects on
schedule, within budget and with excellence.
Fluor is a FORTUNE 500 company with 41,000 employees operating globally.
Fluor Corporation
This annual report contains statements that may constitute forward-looking statements involving risks and uncertainties, including
statements about our projected earning levels for calendar year 2008, market outlook, new awards, backlog levels, competition, the
adequacy of funds to service debt and implementation of strategic initiatives and organizational changes. These forward-looking statements
reflect the company’s current analysis of existing information as of the date of this annual report and are subject to various risks and
uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, the
company’s actual results may differ materially from our expectations or projections. Additional information concerning factors that may
influence Fluor’s results can be found in the Form 10-K that follows this annual report under the heading “Item 1A-Risk Factors.”
FORWARD-LOOKING STATEMENTS
COVER PHOTO: Background project photo: Habshan gas complex taken in Abu Dhabi. Foreground people photo: taken in Houston, Texas.
Employees from our Greenville, South Carolina, campus.
FLUOR CORPORATION 2007 ANNUAL REPORT
THE STRENGTH OF EXPERIENCE
FLUOR CORPORATION 2007 ANNUAL REPORT

Table of contents

  • Page 1
    FLUOR CORPORATION 2007 ANNUAL REPORT THE STRENGTH OF EXPERIENCE

  • Page 2
    ... objective is to develop, execute and maintain projects on schedule, within budget and with excellence. Fluor is a FORTUNE 500 company with 41,000 employees operating globally. Employees from our Greenville, South Carolina, campus. FORWARD-LOOKING STATEMENTS This annual report contains statements...

  • Page 3
    ... development. 1975 Fluor is awarded a record-setting $4 billion contract to build a gas-gathering, treatment and transmission program for Aramco. 1982 1988 Fluor designs and constructs one of the world's largest copper mines at the Minera Escondida project in Chile. Fluor mobilizes 4,500 workers...

  • Page 4
    ... a world of opportunity in every sense. Thanks to our advanced global information systems, standardized processes and dispersed project execution model, project teams at every location have the tools to tap into the institutional knowledge they need to succeed. Together, Fluor employees continue...

  • Page 5
    ... $1.7 billion in cash and marketable securities, we have the resources to capitalize on future growth opportunities. Bay City, Texas - likely to be the first nuclear power plants built in the United States in more than 20 years. 2 Letter to Shareholders Fluor Corporation 2007 Annual Report

  • Page 6
    ... professional opportunities as a part of Fluor's team. In 2007 alone, we added over 3,700 new salaried employees - a 10 percent increase - to our organization, building on the substantial increases of recent years. Our people have chosen careers at Fluor because they can work on some of the world...

  • Page 7
    ... revenue of $16.7 2007 At A Glance billion, making 2007 another record year for Fluor. OIL & GAS Overall capital investment in oil and gas projects remains robust. That's good news for Fluor, which serves all facets of the upstream, downstream and petrochemical markets. Our global resources...

  • Page 8
    ... providing construction management and direct-hire construction expertise in support of Fluor's operating businesses in North America. Additionally, FCII supports the staffing of international construction projects and has employees working around the world. Fluor Corporation 2007 Annual Report At...

  • Page 9
    ... of Execution In 2007, energy companies across the industry continued to benefit from strong global demand for oil, gas and petrochemicals. From our engineers to our project managers and craftspeople, the Oil & Gas team worked together to convert this rising demand into outstanding growth for Fluor...

  • Page 10
    ... are represented on site. That's the sign of a truly global company going beyond geography to channel your resources where they can do the most good." Jason Kreuiter Site Administration Supervisor GASCO Habshan Gas Complex Expansion Project and ThirdGeneration Fluor Employee Oil & Gas 7 7

  • Page 11
    ... in the Middle East. New awards include a contract from Renewable Energy Corporation (REC) for work on a solargrade silicon production factory in the state of Washington, a $1 billion contract from the Saudi Basic Industries Corporation (SABIC) for 8 Oil & Gas Fluor Corporation 2007 Annual Report

  • Page 12
    ...as the Mexican government reinvests in energy-related resource development. OPPORTUNITIES AHEAD Our Oil & Gas business continues to win and perform substantial FEED work, which translates into large EPC opportunities for 2008 and 2009. Based on our bookings over the past year, 2008 will be a signi...

  • Page 13
    ..., and secured a deal for 140 turbines for the project - the largest agreement for offshore wind turbines to date. NEW AWARDS IN MINING In 2007, our mining and metals business won a contract for engineering, procurement and construction management (EPCM) for the Fluor's design-build services were...

  • Page 14
    ...Backlog 2006 2007 New Awards "The two years I've spent with Fluor have been the most rewarding time of my career. I enjoy working on the Bristol-Myers Squibb project because it challenges me to design in spaces with different hazard criteria and building codes. It also gives me a good feeling to...

  • Page 15
    ... solar panel plant in Asia. We also completed multiple snack food manufacturing projects throughout the United States totaling over $200 million in revenue, and we expanded our biologics work with Amgen in Puerto Rico and California. In addition, we are nearing completion of detailed engineering...

  • Page 16
    ... including transportation, mining, life sciences and telecommunications projects. Clients turn to our Industrial & Infrastructure group for its ability to execute complex projects with innovation and precision - on schedule and within budget. Fluor Corporation 2007 Annual Report Industrial...

  • Page 17
    ...the Federal Emergency Management Agency (FEMA) and the Departments of Energy, Defense and Homeland Security. We're working to expand our services to the U.S. government, while leveraging our successes to win new projects with the governments of the United Kingdom and Russia. As anticipated, 2007 was...

  • Page 18
    REVENUE BY SEGMENT GOVERNMENT 8% NEW AWARDS AND BACKLOG (DOLLARS IN BILLIONS) 3.0 2.5 2.0 1.5 1.0 0.5 0 2005 2006 2007 New Awards Backlog "I've spent all of my 23-year career at the Hanford Site, and I've been with Fluor for the last 12 years. My job is to ensure that casks of hazardous waste ...

  • Page 19
    ... unit, a leading provider of outsourced services to the federal government, once again posted solid revenue growth. Del-Jen provides everything from facility services and aircraft refueling at military bases to training programs through the Department of Labor. GOVERNMENT STRATEGIES As we work...

  • Page 20
    .... (left) Fluor is providing engineering, procurement, construction and commissioning services for the addition of ï¬,ue-gas desulphurization systems at two of South Carolina Electric & Gas Company's coalfired power plants in South Carolina. (right) Fluor Corporation 2007 Annual Report Power 17

  • Page 21
    ... enhanced efficiency in power generation by 2015. South Texas Project Electric Generating Station awarded a contract to Fluor for the engineering, procurement and construction related services for two new nuclear reactors near Bay City, Texas. 18 Power 18 Fluor Corporation 2007 Annual Report

  • Page 22
    REVENUE BY SEGMENT POWER 7% NEW AWARDS AND BACKLOG (DOLLARS IN BILLIONS) 2.5 2.0 1.5 1.0 0.5 0 2005 Backlog 2006 2007 New Awards "I've been with Fluor for 34 years, and I am always amazed at the challenges we're able to overcome on tough projects. If I had any advice for a new graduate ...

  • Page 23
    REVENUE BY SEGMENT GLOBAL SERVICES 15% NEW AWARDS AND BACKLOG (DOLLARS IN BILLIONS) 3.0 2.5 2.0 1.5 1.0 0.5 0 2005 Backlog 2006 2007 New Awards "Since I joined Fluor's P2S SECO business in 1989, I've continued to expand my knowledge and skills in ways I could never have imagined. I have learned ...

  • Page 24
    ... offices worldwide, our TRS business supports both Fluor and third-party clients with temporary, direct-hire and contract professional and technical staffing solutions in industries such as energy, transportation, chemicals and pharmaceuticals. From construction personnel to project managers with...

  • Page 25
    ... now generally deliver two or three of our key services at each location rather than just one. MODERATING CYCLICALITY While other Fluor groups focus on large, complex projects in their respective markets, Global Services serves a large number of clients across very diverse markets. In fact, in 2007...

  • Page 26
    ...many exciting career opportunities. The wide diversity of markets that Fluor serves offers employees the chance to work on the world's most technically challenging and complex projects - and to do so in all corners of the globe. Fluor's investments in training and strong culture of knowledge sharing...

  • Page 27
    ...% 100% 61% Oil & Gas 20% Industrial & Infrastructure 8% Global Services 8% Power 3% Government 2007 Percent 2006 Percent 2005 Percent BACKLOG BY REGION Year Ended December 31 ($ in millions) United States Europe, Africa and Middle East Asia Pacific (includes Australia) Americas Total Backlog...

  • Page 28
    ...35 per share) relating to the favorable settlement of tax audits for the years 1996 through 2000. Loss from Discontinued Operations in 2003 relates to the 2001 decision to exit non-core construction equipment and temporary staffing business. Fluor Corporation 2007 Annual Report Selected Financial...

  • Page 29
    ...Global Services and Government (1980) This officer information is for the period ending December 31, 2007. See discussion on page 41 of Form 10-K regarding executive officers as of February 29, 2008. Years in parentheses indicate the year each officer joined the company. cers Fluor Corporation...

  • Page 30
    ... M. Marventano Senior Vice President, Government Relations (2003) Joanna M. Oliva Vice President and Treasurer (2001) Richard P. Carter President, Fluor Constructors International (1983) Victor L. Prechtl Vice President and Controller (1981) Fluor Corporation 2007 Annual Report Board of...

  • Page 31
    ...' signatures, and executive officer certifications. The graph to the right depicts the company's total return to shareholders from January 1, 2002, through December 31, 2007, relative to the performance of the S&P 500 Composite Index and the Dow Jones Heavy Construction Industry Group Index ("DJ...

  • Page 32
    ...1-16129 FLUOR CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 6700 Las Colinas Boulevard Irving, Texas (Address of principal executive offices) 469-398-7000 (Registrant's telephone number, including area code...

  • Page 33
    ..., Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accountant Fees and Services ...PART IV...

  • Page 34
    ...been in business for more than 100 years. Our principal executive offices are located at 6700 Las Colinas Boulevard, Irving, Texas 75039, telephone number (469) 398-7000. Our common stock currently trades on the New York Stock Exchange under the ticker symbol ''FLR''. Fluor is a holding company that...

  • Page 35
    ...-integrated world class provider of EPCM services, we believe that our business model allows us the opportunity to bring to our clients a compelling business offering that combines excellence in execution, safety, cost containment and experience. In that regard, we believe that our business strategy...

  • Page 36
    ... studies, project development planning, technology evaluation, risk management assessment, global siting, constructability reviews, asset optimization and front-end engineering. • Our procurement team offers traditional procurement services as well as a new supply chain solutions model that is...

  • Page 37
    ...long served the global oil and gas production and processing industries as an integrated service provider offering a full range of design, engineering, procurement, construction and project management services to a broad spectrum of energy-related industries. We serve a number of specific industries...

  • Page 38
    ... to pursue attractive domestic and international opportunities with the Department of Energy, the National Nuclear Security Administration and the Nuclear Decommissioning Authority (United Kingdom). Fluor's Government Group provides engineering and construction services, as well as contingency...

  • Page 39
    ... company. AMECO supports large construction projects and plants at locations throughout North and South America, South Africa and the Middle East. Global Services serves the temporary staffing market through TRS Staffing Solutions, Inc. or TRS�. TRS is a global enterprise of staffing specialists...

  • Page 40
    ... management services for all types of facilities. In the emerging nuclear market, we are strategically positioned to offer Fluor's extensive nuclear experience on a global basis. Our services include engineering, construction and quality control. In the plant betterment market, we design, install...

  • Page 41
    ...a percentage of the cost incurred. Our Government segment, as a prime contractor or a major subcontractor for a number of United States government programs, generally performs its services under cost reimbursable contracts although subject to applicable statutes and regulations. In many cases, these...

  • Page 42
    ... the design, engineering, planning, management and project execution skills required to complete complex projects in a safe, timely and cost-efficient manner. Significant Customers For 2007, 2006 and 2005, revenue earned directly or indirectly from agencies of the United States government accounted...

  • Page 43
    ...identified. Number of Employees The following table sets forth the number of employees of Fluor and its subsidiaries engaged in our business segments as of December 31, 2007: Total Employees Salaried Employees: Oil & Gas ...Industrial & Infrastructure Government ...Global Services ...Power ...Other...

  • Page 44
    ... our website, www.fluor.com, under ''Corporate Governance.'' Item 1A. Risk Factors We are vulnerable to the cyclical nature of the markets we serve. The demand for our services and products is dependent upon the existence of projects with engineering, procurement, construction and management needs...

  • Page 45
    ... under the Federal False Claims Act that, if an unfavorable result occurs, could impact our profits and financial condition, as well as our ability to obtain future government work. For example, government agencies such as the U.S. Defense Contract Audit Agency (the ''DCAA'') routinely review and...

  • Page 46
    ... Shaw Group and URS Corporation, and international companies such as Foster Wheeler Ltd., Technip, WorleyParsons Limited and AMEC plc. In particular, the engineering and construction markets are highly competitive and require substantial resources and capital investment in equipment, technology and...

  • Page 47
    ... for us with respect to the joint venture. We enter into various joint ventures as part of our engineering, procurement and construction businesses, including ICA Fluor and project-specific joint ventures. The success of these and other joint ventures depends, in large part, on the satisfactory...

  • Page 48
    ... respect to a project in an early development stage will generally be less than our risk exposure with respect to a project in the middle of construction. To the extent that our international business is affected by unexpected and adverse foreign economic and political conditions, we may experience...

  • Page 49
    ... in the number or scope of these laws or regulations, or changes in government policies regarding the funding, implementation or enforcement of such laws and regulations, could significantly reduce the size of one of our markets and limit our opportunities for growth or reduce our revenue below...

  • Page 50
    ... to satisfy International Trade Compliance regulations may adversely affect us. Fluor's global operations require importing and exporting goods and technology across international borders on a regular basis. Fluor's policy mandates strict compliance with U.S. and foreign international trade laws...

  • Page 51
    ...acquire control of us, even if the acquisition would be beneficial to our shareholders. Accordingly, shareholders may be limited in the ability to obtain a premium for their shares. Systems and information technology interruption could adversely impact our ability to operate. As a global company, we...

  • Page 52
    ... location and general character of the major existing facilities: Location Interest United States and Canada: Aliso Viejo, California ...Calgary, Alberta ...Charlotte, North Carolina ...Dallas, Texas ...Greenville, South Carolina ...Houston (Sugar Land), Texas ...Irvine, California ...Irving, Texas...

  • Page 53
    ...fourth quarter of 2007. Executive Officers of the Registrant Information regarding the company's executive officers is set forth under the caption ''Executive Officers of the Registrant'' in Part III, Item 10, of this Form 10-K and is incorporated herein by this reference. PART II Item 5. Market for...

  • Page 54
    ... The following table provides information as of the three months ending December 31, 2007 about purchases by the company of equity securities that are registered by the company pursuant to Section 12 of the Securities Exchange Act of 1934 (the ''Exchange Act''): Total Number of Shares Purchased as...

  • Page 55
    ...' equity per common share Common shares outstanding at year end OTHER DATA New awards Backlog at year end Capital expenditures - continuing operations Cash provided by (used in) operating activities Salaried employees Craft/hourly employees Total employees $22,590.1 30,170.8 284.2 905.0 25,842...

  • Page 56
    ... completion of environmental work on a large Department of Energy (''DOE'') project and hurricane relief efforts for the Federal Emergency Management Agency (''FEMA'') in 2006 and lower embassy and Iraq construction work in 2007. Revenue in the Power segment in 2007 increased significantly...

  • Page 57
    ...Oil & Gas markets and large awards in Industrial & Infrastructure and Power. As of December 31, 2007, approximately 56 percent of consolidated backlog relates to projects located outside of the United States. For a more detailed discussion of operating performance of each business segment, corporate...

  • Page 58
    ... Earnings and generally uses the one-line equity method of accounting in the Consolidated Balance Sheet. The most significant application of the proportionate consolidation method is in the Oil & Gas, Industrial & Infrastructure and Government segments. The company's accounting for project specific...

  • Page 59
    ... The company provides professional services on a global basis in the fields of engineering, procurement, construction and maintenance (''EPCM'') and is organized into five business segments: Oil & Gas, Industrial & Infrastructure, Government, Global Services and Power. The Oil & Gas segment...

  • Page 60
    ... and healthcare facilities. The Government segment provides engineering, construction, contingency response, management and operations services to the United States government. The Global Services segment includes operations and maintenance activities, small capital project engineering and execution...

  • Page 61
    ... London Connect Project, a $500 million lump-sum project to design and install a telecommunications network that allows reception and transmissions throughout the London Underground system. The company has recognized $42 million in 2007 and an aggregate of $116 million in claims revenue relating to...

  • Page 62
    ... 17.7 $2,708.2 83.7 Revenue in the last three years includes reconstruction activity in Iraq and work for environmental restoration, engineering, construction, site operations and maintenance services at two major DOE sites: the Fernald Environmental Management Project (''Fernald'') in Ohio, which...

  • Page 63
    ...and supply chain solutions business lines do not report backlog due to the short turnaround between the receipt of new awards and the recognition of revenue. Accordingly, new awards and backlog for the segment relate to the operations and maintenance activities only. In recent years, Global Services...

  • Page 64
    ... include a $1.7 billion award for the Oak Grove coal-fired power units in Texas for Luminant, a unit of Energy Future Holdings Corporation. New awards of $635 million during 2006 included a plant retrofit project in South Carolina. New awards of $1.0 billion during 2005 included a contract for the...

  • Page 65
    ... in corporate administrative and general expense was $14.2 million and $5.7 million during 2006 and 2005, respectively. The corporate facility in California was sold in 2005. The cost to construct the new Texas headquarters totaled $60 million and was funded from available cash resources including...

  • Page 66
    ... New York against General Electric Company and certain operating subsidiaries as well as Saudi American General Electric, a Saudi Arabian corporation. The complaint seeks damages in connection with the procurement, engineering and construction of the Rabigh Combined Cycle Power Plant in Saudi Arabia...

  • Page 67
    ... for construction of the new corporate headquarters facility in Texas, but otherwise relate primarily to the equipment operations in the Global Services segment that support engineering and construction projects. The increase in these capital expenditures over the past three years related largely...

  • Page 68
    ...price and the market price on the date of conversion. In December 2004, the company filed a ''shelf'' registration statement for the issuance of up to $500 million of any combination of debt securities or common stock, the proceeds from which could be used for debt retirement, the funding of working...

  • Page 69
    ... for engineering and project execution office facilities in Sugar Land, Texas, the United Kingdom and various other U.S and international locations, equipment used in connection with long-term construction contracts and other personal property. Uncertain tax contingencies are positions taken...

  • Page 70
    ... Telecommunications Limited (''GeneSYS''), in which the company owns a 45 percent interest and HSBC Infrastructure Fund Management Limited owns a 55 percent interest. The project was entered into with the United Kingdom Secretary of State for Transport (the ''Highways Agency'') to design, build...

  • Page 71
    ... high-occupancy toll (''HOT'') lanes project in Virginia. The project is a public-private partnership between the Virginia Department of Transportation (''VDOT'') and Capital Beltway Express LLC, a joint venture in which the company has a ten percent interest and Transurban (USA) Inc. has a 90...

  • Page 72
    ... with generally accepted accounting principles in the U.S. In connection with the preparation of the company's annual consolidated financial statements, management of the company has undertaken an assessment of the effectiveness of the company's internal control over financial reporting based...

  • Page 73
    ...become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Fluor Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO...

  • Page 74
    ... flows, and shareholders' equity for each of the three years in the period ended December 31, 2007 of Fluor Corporation and our report dated February 29, 2008 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Dallas, Texas February 29, 2008 Changes in Internal Control over Financial...

  • Page 75
    ... Power Senior Vice President, HSE, Security & Industrial Relations Senior Vice President, Human Resources and Administration Group President, Global Services Chief Legal Officer and Secretary Group President, Government Vice President and Controller Group President, Energy & Chemicals Vice President...

  • Page 76
    ... to October 2003 and Group Executive, Fluor Global Services from September 2001 to February 2002. Prior to that, he was President and Chief Executive Officer of TradeMC, a developer and promoter of supplier networks for the procurement of capital goods in which the company had an ownership interest...

  • Page 77
    ... website at www.fluor.com under the ''Investor Relations'' portion of our website. Shareholders may also request a free copy of our Corporate Governance Guidelines from the address and phone number set forth under ''Code of Ethics'' above. Certifications In 2007, we submitted to the New York Stock...

  • Page 78
    ... and Management and Related Stockholder Matters The information required by this item is included in the ''Stock Ownership and Stock-Based Holdings of Executive Officers and Directors,'' ''Stock Ownership of Certain Beneficial Owners,'' ''Executive Compensation'' and ''Equity Compensation Plan...

  • Page 79
    ....5 to the registrant's Quarterly Report on Form 10-Q filed on May 5, 2005). Fluor Corporation 2000 Restricted Stock Plan for Non-Employee Directors, as amended and restated on November 1, 2007.* Fluor Corporation Executive Deferred Compensation Plan, as amended and restated effective April 21, 2003...

  • Page 80
    ...'s Annual Report on Form 10-K filed on March 31, 2003). Directors' Life Insurance Summary (incorporated by reference to Exhibit 10.12 to the registrant's Registration Statement on Form 10/A (Amendment No. 1) filed on November 22, 2000). Fluor Executives' Supplemental Benefit Plan.* Fluor Corporation...

  • Page 81
    ... of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.* Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.* New...

  • Page 82
    ... by the undersigned, thereunto duly authorized. FLUOR CORPORATION By: /s/ D. MICHAEL STEUERT D. Michael Steuert, Senior Vice President and Chief Financial Officer February 29, 2008 Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report on Form 10-K has been signed...

  • Page 83
    ... W. Prueher /s/ LORD ROBIN W. RENWICK, K.C.M.G. Lord Robin W. Renwick, K.C.M.G. /s/ PETER S. WATSON Peter S. Watson /s/ SUZANNE H. WOOLSEY Suzanne H. Woolsey Director Director Director Director Director February 29, 2008 February 29, 2008 February 29, 2008 February 29, 2008 February 29, 2008 50

  • Page 84
    FLUOR CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS PAGE Report of Independent Registered Public Accounting Firm ...Consolidated Statement of Earnings ...Consolidated Balance Sheet ...Consolidated Statement of Cash Flows ...Consolidated Statement of Shareholders' Equity ...

  • Page 85
    ... of accounting for stock-based compensation and defined benefit pension and other postretirement plans, respectively. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Fluor Corporation's internal control over financial reporting...

  • Page 86
    FLUOR CORPORATION CONSOLIDATED STATEMENT OF EARNINGS Year Ended December 31, 2006 (in thousands, except per share amounts) 2007 2005 TOTAL REVENUE TOTAL COST OF REVENUE OTHER (INCOME) AND EXPENSES Corporate administrative and general expense Interest expense Interest income Total cost and ...

  • Page 87
    ..., 2007 December 31, 2006 (in thousands, except share amounts) ASSETS CURRENT ASSETS Cash and cash equivalents Marketable securities Accounts and notes receivable, net Contract work in progress Deferred taxes Other current assets Total current assets PROPERTY, PLANT AND EQUIPMENT Land Buildings and...

  • Page 88
    ...Minority interest Adjust deferred compensation trust assets to fair value Adjust deferred compensation obligation to fair value Funding of deferred compensation trust Taxes paid on vested restricted stock Tax settlement with IRS Deferred taxes Stock option tax benefit Retirement plan accrual, net of...

  • Page 89
    FLUOR CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY Unamortized Accumulated Executive Other Additional Stock Plan Comprehensive Shares Amount Capital Expense Income (Loss) 84,538 - - - - 758 1,525 - - (184) (37) 488 87,088 - - $845 - - - - 8 15 - - (2) - 5 $871 - - $507,133 - - - - 41,...

  • Page 90
    ... in revenue and cost of revenue 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...

  • Page 91
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) substantially all incurred cost associated with contract work in progress at December 31, 2007 will be billed and collected in 2008. The company recognizes certain significant claims for recovery of incurred cost when it is ...

  • Page 92
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) disclosure and transition. This interpretation is effective for fiscal years beginning after December 15, 2006, and the company adopted this interpretation in the first quarter of 2007. As a result of the adoption of FIN 48, ...

  • Page 93
    ... work in progress are from clients in various industries and locations throughout the world. Most contracts require payments as the projects progress or in certain cases advance payments. The company generally does not require collateral, but in most cases can place liens against the property, plant...

  • Page 94
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) recommended by SFAS 123-R, net earnings and earnings per share would have been reduced to the pro forma amounts as follows: Year Ended December 31, 2005 (in thousands) Net earnings As reported Stock-based employee compensation...

  • Page 95
    ... effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of SFAS 157 or SFAS 159 to have a material impact on the company's financial position, results of operations and cash flows. In December 2007, the FASB issued SFAS No. 141R, ''Business Combinations...

  • Page 96
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Consolidated Statement of Cash Flows The changes in operating assets and liabilities as shown in the Consolidated Statement of Cash Flows comprise: 2007 (in thousands) Year Ended December 31, 2006 2005 (Increase) decrease in:...

  • Page 97
    ...and liabilities are as follows: December 31, 2007 2006 (in thousands) Deferred tax assets: Accrued liabilities not currently deductible: Employee compensation and benefits Employee time-off accrual Project and non-project reserves Workers' compensation insurance accruals Tax basis of investments in...

  • Page 98
    ...the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, the Netherlands, South Africa, the United Kingdom and...

  • Page 99
    ...contribution retirement and defined benefit pension plans for eligible employees. The defined benefit pension plans are primarily related to domestic and international engineering and construction salaried employees and U.S. craft employees. Contributions to defined contribution retirement plans are...

  • Page 100
    ... end of each respective annual reporting period. 2007 December 31, 2006 2005 For determining benefit obligations at year-end: Discount rates Rates of increase in compensation levels For determining net periodic cost for the year: Discount rates Rates of increase in compensation levels Expected long...

  • Page 101
    ... status of all of the plans: December 31, 2007 2006 (in thousands) Change in pension benefit obligation Benefit obligation at beginning of year Service cost Interest cost Employee contributions Currency translation Actuarial (gain) loss Benefits paid Benefit obligation at end of year Change in plan...

  • Page 102
    ... 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. The...

  • Page 103
    ... significantly in the future. 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. F-20

  • Page 104
    ...of retention or for performance and completion guarantees on engineering and construction contracts. At December 31, 2007, the company had utilized $994 million of its credit capacity. In addition, the company has $113 million in credit lines for general purposes in addition to the amount above. The...

  • Page 105
    ... 15, 2024 and received proceeds of $323 million, net of underwriting discounts. Interest on the Notes is payable semi-annually on February 15 and August 15 of each year. The Notes are convertible into shares of the company's common stock par value $0.01 per share, at a conversion rate of 17.875...

  • Page 106
    ...on results of operations or financial position. The company has deferred compensation and retirement arrangements for certain key executives which generally provide for payments upon retirement, death or termination of employment. The deferrals can earn either market-based fixed or variable rates of...

  • Page 107
    ... returned to the company. For the years 2007, 2006 and 2005, recognized compensation expense of $23.7 million, $28.1 million and $18.5 million, respectively, is included in corporate administrative and general expense related to restricted stock. The fair value of restricted stock that vested during...

  • Page 108
    ...volatility. Information related to options outstanding at December 31, 2007 is summarized below: Options Outstanding Weighted Average Weighted Remaining Average Contractual Life Exercise (In Years) Price Options Exercisable Range of Exercise Prices Number Outstanding Number Excercisable Weighted...

  • Page 109
    ... 31, 2007, several matters are in the litigation and dispute resolution process. The following discussion provides a background and current status of these matters: Infrastructure Joint Venture Project The company participates in a 50/50 joint venture that is executing a fixed-price transportation...

  • Page 110
    ... New York against General Electric Company and certain operating subsidiaries as well as Saudi American General Electric, a Saudi Arabian corporation. The complaint seeks damages in connection with the procurement, engineering and construction of the Rabigh Combined Cycle Power Plant in Saudi Arabia...

  • Page 111
    ... million in damages related to a 2001 construction project. In 2001, Atofina (now part of Total Petrochemicals Inc.) hired Conex International to be the mechanical contractor on a project at Atofina's refinery in Port Arthur, Texas. FEI was also hired to provide certain engineering advice to Atofina...

  • Page 112
    ... Telecommunications Limited (''GeneSYS''), in which the company owns a 45 percent interest and HSBC Infrastructure Fund Management Limited owns a 55 percent interest. The project was entered into with the United Kingdom Secretary of State for Transport (the ''Highways Agency'') to design, build...

  • Page 113
    ... high-occupancy toll (''HOT'') lanes project in Virginia. The project is a public-private partnership between the Virginia Department of Transportation (''VDOT'') and Capital Beltway Express LLC, a joint venture in which the company has a ten percent interest and Transurban (USA) Inc. has a 90...

  • Page 114
    ... fields of engineering, procurement, construction and maintenance. Operations are organized in five industry segments: Oil & Gas, Industrial & Infrastructure, Government, Global Services and Power. The Oil & Gas segment provides design, engineering, procurement, construction and project management...

  • Page 115
    FLUOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Operating Information by Segment Year Ended December 31, 2007 2006 2005 (in millions) External revenue Oil & Gas Industrial & Infrastructure Government Global Services Power Total external revenue Operating profit (loss) Oil &...

  • Page 116
    ... Enterprise-Wide Disclosures $- - (3) $(3) $ - 4 1 $ 5 $(15) 2 4 $ (9) External Revenue Year Ended December 31, 2007 2006 2005 (in millions) Total Assets At December 31, 2007 2006 United States Canada Asia Pacific (includes Australia) Europe Central and South America Middle East and Africa...

  • Page 117
    ...Earnings before taxes in the third quarter of 2007 include a provision of $20.9 million in the Government segment on a fixed-price project. The third quarter of 2006 includes provisions totaling $168 million on fixed-price contracts in the Government and Industrial & Infrastructure segments. During...

  • Page 118
    ... Quarterly Report on Form 10-Q filed on May 5, 2005). Fluor Corporation 2000 Restricted Stock Plan for Non-Employee Directors, as amended and restated on November 1, 2007.* Fluor Corporation Executive Deferred Compensation Program, as amended and restated effective April 21, 2003.* Fluor Corporation...

  • Page 119
    ...Independent Registered Public Accounting Firm.* Certification of Chief Executive Officer of Fluor Corporation.* Certification of Chief Financial Officer of Fluor Corporation.* Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934...

  • Page 120
    ... 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 I, Alan L. Boeckmann, certify that: 1. I have reviewed this annual report on Form 10-K of Fluor Corporation; 2. Based on my knowledge, this report does not contain any...

  • Page 121
    ... 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 I, D. Michael Steuert, certify that: 1. I have reviewed this annual report on Form 10-K of Fluor Corporation; 2. Based on my knowledge, this report does not contain any...

  • Page 122
    ... 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350 In connection with the Annual Report of Fluor Corporation (the ''Company'') on Form 10-K for the period ended December 31, 2007, as filed with...

  • Page 123
    ... the Annual Report of Fluor Corporation (the ''Company'') on Form 10-K for the period ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the ''Report''), I, D. Michael Steuert, Senior Vice President and Chief Financial Officer of the Company, certify...

  • Page 124
    ... Dallas, TX 75201 Annual Shareholders' Meeting Please visit investor.ï¬,uor.com for information regarding the time and location of our shareholders' meeting. Stock Trading Fluor's stock is traded on the New York Stock Exchange. Common stock domestic trading symbol: FLR. Company Contacts Shareholders...

  • Page 125
    Fluor Corporation | 6700 Las Colinas Boulevard | Irving, Texas 75039 | ï¬,uor.com