Fluor 2008 Annual Report Download - page 51

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different currencies at various points in time in order to execute our project contracts globally. Non-U.S.
cash and asset balances are subject to currency fluctuations when measured period to period for financial
reporting purposes in U.S. dollars. Financial hedging may be used to minimize currency volatility for
financial reporting purposes.
We continue to expand our business in areas where bonding is required, but bonding capacity is limited.
We continue to expand our business in areas where the underlying contract must be bonded, especially
in the transportation infrastructure arena in which bonding is predominately provided by insurance
sureties. These surety bonds indemnify the client if we fail to perform our obligations under the contract.
Failure to provide a bond on terms required by a client may result in an inability to compete for or win a
project. Historically, we have had a strong surety bonding capacity but, as is typically the case, bonding is at
the surety’s sole discretion. In addition, because of the overall lack of worldwide bonding capacity, we may
find it difficult to find sureties who will provide the contract-required bonding. Moreover, these contracts
are often very large and extremely complex, which often necessitates the use of a joint venture, often with a
competitor, to bid on and perform these types of contracts, especially since it may be easier to jointly
pursue the necessary bonding. However, entering into these types of joint ventures or partnerships exposes
us to the credit and performance risks of third parties, many of whom are not as financially strong as us. If
our joint ventures or partners fail to perform, we could suffer negative results.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide
anti-bribery laws.
The U.S. Foreign Corrupt Practices Act (‘‘FCPA’’) and similar anti-bribery laws in other jurisdictions
generally prohibit companies and their intermediaries from making improper payments to non-U.S.
officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these
anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to
some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local
customs and practices. We train our staff concerning FCPA issues, and we also inform our partners,
subcontractors, agents and others who work for us or on our behalf that they must comply with FCPA
requirements. We also have procedures and controls in place to monitor internal and external compliance.
We cannot assure you that our internal controls and procedures always will protect us from the reckless or
criminal acts committed by our employees or agents. If we are found to be liable for FCPA violations
(either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could
suffer from criminal or civil penalties or other sanctions which could have a material adverse effect on our
business.
Past and future environmental, safety and health regulations could impose significant additional cost on us that
reduce our profits.
We are subject to numerous environmental laws and health and safety regulations. Our projects can
involve the handling of hazardous and other highly regulated materials which, if improperly handled or
disposed of, could subject us to civil and criminal liabilities. It is impossible to reliably predict the full
nature and effect of judicial, legislative or regulatory developments relating to health and safety
regulations and environmental protection regulations applicable to our operations. The applicable
regulations, as well as the technology and length of time available to comply with those regulations,
continue to develop and change. In addition, past activities could also have a material impact on us. For
example, when we sold our mining business formerly conducted through St. Joe Minerals Corporation, we
retained responsibility for certain non-lead related environmental liabilities, but only to the extent that
such liabilities were not covered by St. Joe’s comprehensive general liability insurance. While we are not
currently aware of any material exposure arising from our former St. Joe’s business or otherwise, the cost
of complying with rulings and regulations or satisfying any environmental remediation requirements for
which we are found responsible could be substantial and could reduce our profits.
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