Fluor 2007 Annual Report Download - page 44

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Available Information
Our website address is www.fluor.com. You may obtain free electronic copies of our annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those
reports on the ‘‘Investor Relations’’ portion of our website, under the heading ‘‘SEC Filings’’ filed under
‘‘Financial Information.’’ These reports are available on our website as soon as reasonably practicable after
we electronically file them with the Securities and Exchange Commission. These reports, and any
amendments to them, are also available at the internet website of the Securities and Exchange
Commission, http://www.sec.gov. The public may also read and copy any materials we file with the
Securities and Exchange Commission at the SEC’s Public Reference Room located at 100 F Street, N.E.,
Washington, D.C., 20549. In order to obtain information about the operation of the Public Reference
Room, you may call 1-800-732-0330. We also maintain various documents related to our corporate
governance including our Corporate Governance Guidelines, our Board Committee Charters and our
Codes of Conduct at the ‘‘Investor Relations’’ portion of 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. Although downturns can impact our
entire business, our oil and gas, petrochemicals and mining and metals segments exemplify businesses that
are cyclical in nature and have historically been affected by a decrease in worldwide demand for these
projects. Industries such as these and many of the others we serve have historically been and will continue
to be vulnerable to general downturns. During economic downturns, our clients may demand more
favorable terms. In addition, our government clients may face budget deficits that prohibit them from
funding proposed and existing projects. As a result, our past results have varied considerably and may
continue to vary depending upon the demand for future projects in these industries.
We bear the risk of cost overruns in approximately 24% of the dollar value of our contracts. We may
experience reduced profits or, in some cases, losses under these contracts if cost increase above our estimates.
We conduct our business under various types of contractual arrangements. In terms of dollar-value,
the majority of our contracts allocate the risk of cost overruns to our client by requiring our client to
reimburse us for our cost. Approximately 24% of the dollar-value of our contracts are currently guaranteed
maximum price or fixed-price contracts, where we bear a significant portion of the risk for cost overruns.
Under these fixed-price contracts, contract prices are established in part on cost and scheduling estimates
which are based on a number of assumptions, including assumptions about future economic conditions,
prices and availability of labor, equipment and materials. If these estimates prove inaccurate, or
circumstances change such as unanticipated technical problems, difficulties in obtaining permits or
approvals, changes in local laws or labor conditions, weather delays, cost of raw materials, or our suppliers’
or subcontractors’ inability to perform, cost overruns may occur, and we could experience reduced profits
or, in some cases, a loss for that project.
Our continued success requires us to hire and retain qualified personnel.
Over the past year, the demand for employees who engage and are experienced in the services we
perform has continued to grow as our customers have increased their capital expenditures and the use of
our services. The success of our business is dependent upon being able to attract and retain personnel,
including engineers, project management and craft employees, who have the necessary and required
experience and expertise. Competition for these kinds of personnel is intense. In addition, as some of our
key personnel approach retirement age, we need to provide for smooth transitions, and our operations and
results may be negatively affected if we are not able to do so.
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