Fluor 2013 Annual Report Download - page 75

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25 basis points, plan liabilities for the U.S. and non-U.S. plans would increase by approximately $16 million
and $42 million, respectively.
Segment Operations
The company provides professional services on a global basis in the fields of engineering,
procurement, construction, fabrication and modularization, commissioning, maintenance and project
management. The company is organized into five principal business segments: Oil & Gas, Industrial &
Infrastructure, Government, Global Services and Power. For more information on the business segments
see ‘‘Item 1. — Business’’ above.
Oil & Gas
Revenue and segment profit for the Oil & Gas segment are summarized as follows:
Year Ended December 31,
(in millions) 2013 2012 2011
Revenue $11,519.8 $9,513.9 $7,961.7
Segment profit 441.1 334.7 275.6
Revenue in 2013 increased 21 percent compared to 2012, primarily driven by higher project execution
activities for various upstream and petrochemical projects in different regions. Major contributors to the
increase included an oil sands facility in Canada, a coal bed methane project in Australia and a grassroots
petrochemical project in the Middle East. This revenue growth was partially offset by reduced volume on
certain projects at or near substantial completion, including two oil refineries in the United States and
upstream services for two other Canadian oil sands projects. Revenue for 2012 increased nearly 20 percent
compared to 2011 as a result of broad-based growth in the segment, including the coal bed methane gas
project in Australia, the petrochemical complex in the Middle East and a major mine replacement project
in Canada.
Segment profit in 2013 increased 32 percent compared to 2012 primarily due to the project execution
activities driving the revenue growth discussed above, as well as contributions from two petrochemical
projects in North America, a gas processing project in Kazakhstan and an upstream project in Russia.
Segment profit in 2012 increased 21 percent compared to 2011 and was driven by the same projects
responsible for the revenue growth, including higher contributions from the coal bed methane gas project
in Australia, as well as numerous other geographically dispersed projects.
Segment profit margin was 3.8 percent in 2013, compared to 3.5 percent in both 2012 and 2011. The
current year improvement is predominantly due to the factors discussed above that resulted in increases in
revenue and segment profit and reflects greater leverage of segment overhead compared to the prior years.
New awards in the Oil & Gas segment were $12.9 billion in 2013, $12.6 billion in 2012, and $8.3 billion
in 2011. New awards in 2013 included two petrochemical facilities in North America, an upstream project
in Russia, a grassroots upgrader project in Canada and additional releases on a gas processing project in
Kazakhstan. New awards in 2012 included an oil sands bitumen processing facility in Canada, the gas
processing project in Kazakhstan and a petrochemicals complex in the United States. New awards in 2011
included a petrochemicals complex in the Middle East and upstream services associated with an oil sands
bitumen processing facility in Canada.
Backlog for the Oil & Gas segment was $20.0 billion as of December 31, 2013 compared to
$18.2 billion as of December 31, 2012 and $15.1 billion as of December 31, 2011. The higher ending
backlog for the two most recent years is reflective of the higher levels of new award activity for those years.
Although market conditions remain competitive, there is continued demand for new capacity in oil and gas
production and petrochemicals. The segment remains well positioned for new project activity in these
markets. The competitive environment is expected to continue and, in certain cases, may result in more
lump-sum project execution.
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