Fluor 2014 Annual Report Download - page 127

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FLUOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
plans were included in noncurrent liabilities. To fund these obligations, the company has established non-
qualified trusts, which are classified as noncurrent assets. These trusts primarily hold company-owned life
insurance policies, reported at cash surrender value, and marketable equity securities, reported at fair
value. These trusts were valued at $405 million and $388 million as of December 31, 2014 and 2013,
respectively. Periodic changes in value of these trust investments, most of which are unrealized, are
recognized in earnings, and serve to mitigate changes to obligations included in noncurrent liabilities which
are also reflected in earnings.
The company maintains appropriate levels of insurance for business risks, including workers
compensation and general liability. Insurance coverages contain various retention amounts for which the
company provides accruals based on the aggregate of the liability for reported claims and an actuarially
determined estimated liability for claims incurred but not reported. Other noncurrent liabilities included
$27 million and $28 million as of December 31, 2014 and 2013, respectively, relating to these liabilities. For
certain professional liability risks the company’s retention amount under its claims-made insurance policies
does not include an accrual for claims incurred but not reported because there is insufficient claims history
or other reliable basis to support an estimated liability. The company believes that retained professional
liability amounts are manageable risks and are not expected to have a material adverse impact on results of
operations or financial position.
10. Stock-Based Plans
The company’s executive stock-based plans provide for grants of nonqualified or incentive stock
options, restricted stock awards or units, stock appreciation rights and performance-based Value Driver
Incentive (‘‘VDI’’) units. All executive stock-based plans are administered by the Organization and
Compensation Committee of the Board of Directors (‘‘Committee’’) comprised of outside directors, none
of whom are eligible to participate in the executive plans. Recorded compensation cost for stock-based
payment arrangements, which is generally recognized on a straight-line basis, totaled $45 million,
$54 million and $40 million for the years ended December 31, 2014, 2013 and 2012, respectively, net of
recognized tax benefits of $27 million, $32 million and $24 million for the years ended 2014, 2013 and 2012,
respectively.
F-34