Fluor 2014 Annual Report Download - page 43

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Balfour Beatty, Chicago Bridge and Iron Company N.V., Chiyoda Corporation, Hyundai Engineering &
Construction Company, JGC Corporation, Samsung Engineering, Technip and WorleyParsons Limited.
In the engineering, procurement and construction arena, which is served by our Oil & Gas,
Industrial & Infrastructure and Power segments, competition is based on an ability to provide the design,
engineering, planning, management and project execution skills required to complete complex projects in a
safe, timely and cost-efficient manner. Our engineering, procurement and construction business derives its
competitive strength from our diversity, excellence in execution, reputation for quality, technology,
cost-effectiveness, worldwide procurement capability, project management expertise, geographic coverage,
ability to meet client requirements by performing construction on either a union or an open shop basis,
ability to execute projects of varying sizes, strong safety record and lengthy experience with a wide range of
services and technologies. In the operations and maintenance markets, barriers to entry are both
financially and logistically low, with the result that the industry is highly fragmented with no single
company being dominant. Competition in those markets is generally driven by reputation, price and the
capacity to perform.
The various markets served by the Global Services segment, while having some similarities to the
construction and procurement arena, tend also to have discrete issues impacting individual units. Each of
the markets we serve has a large number of companies competing in its markets. The equipment sector,
which operates in numerous markets, is highly fragmented and very competitive, with a large number of
competitors mostly operating in specific geographic areas. The competition in the equipment sector for
larger capital project services is more narrow and limited to only those capable of providing comprehensive
equipment, tool and management services. Temporary staffing is a highly fragmented market with over
1,000 companies competing globally. The key competitive factors in this business line are price, service,
quality, breadth of service and the ability to identify and retain qualified personnel and geographical
coverage.
Key competitive factors in our Government segment are primarily centered on performance and the
ability to provide the design, engineering, planning, management and project execution skills required to
complete complex projects in a safe, timely and cost-efficient manner.
Significant Clients
For 2014, revenue earned from Exxon Mobil Corporation and its affiliates and agencies of the U.S.
government accounted for 15 percent and 11 percent, respectively, of our total revenue. We perform work
for these clients under multiple contracts and sometimes through joint venture arrangements.
Raw Materials
The principal products we use in our business include structural steel, metal plate, concrete, cable and
various electrical and mechanical components. These products and components are subject to raw material
(aluminum, copper, nickel, iron ore, etc.) availability and commodity pricing fluctuations, which we
monitor on a regular basis. We have access to numerous global supply sources and we do not foresee any
unavailability of these items that would have a material adverse effect on our business in the near term.
However, the availability of these products, components and raw materials may vary significantly from year
to year due to various factors including client demand, producer capacity, market conditions and specific
material shortages.
Research and Development
Aside from our investment in NuScale Power, LLC, we generally do not engage in significant research
and development efforts for new products and services and, during the past three fiscal years, we have not
incurred cost for company- sponsored or client-sponsored research and development activities which
would be material, special or unusual in any of our business segments. See ‘‘Item 7. — Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Power’’ for further discussion
of the operations of NuScale Power, LLC.
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