Fluor 2014 Annual Report Download - page 56

Our employees work on projects that are inherently dangerous and in locations where there are high security risks,
and a failure to maintain a safe work site could result in significant losses.
We often work on large-scale and complex projects, frequently in geographically remote or high risk
locations that are subject to political, social or economic risks, or war or civil unrest. In those locations
where we have employees or operations, we may expend significant efforts and incur substantial security
costs to maintain the safety of our personnel. In addition, our project sites can place our employees and
others near large equipment, dangerous processes or substances or highly regulated materials, and in
challenging environments. Safety is a primary focus of our business and is critical to our reputation. Often,
we are responsible for safety on the project sites where we work. Many of our clients require that we meet
certain safety criteria to be eligible to bid on contracts, and some of our contract fees or profits are subject
to satisfying safety criteria. Unsafe work conditions also have the potential of increasing employee
turnover, increasing project costs and raising our operating costs. If we fail to implement appropriate
safety procedures and/or if our procedures fail, our employees or others may suffer injuries or even loss of
life. Although we maintain functional groups whose primary purpose is to implement effective health,
safety and environmental procedures throughout our company, the failure to comply with such procedures,
client contracts or applicable regulations could subject us to losses and liability. And, despite these
activities, in these locations and at these sites, we cannot guarantee the safety of our personnel, nor
damage to or loss of work, equipment or supplies.
We may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions,
and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business
or achieve our growth objectives.
Our ongoing ability to generate cash is important for the funding of our continuing operations and the
servicing of our indebtedness. To the extent that existing cash balances and cash flow from operations,
together with borrowing capacity under our existing credit facilities, are insufficient to make investments or
acquisitions or provide needed working capital, we may require additional financing from other sources.
Our ability to obtain such additional financing in the future will depend in part upon prevailing capital
market conditions, as well as conditions in our business and our operating results; and those factors may
affect our efforts to arrange additional financing on terms that are acceptable to us. Furthermore, if global
economic, political or other market conditions adversely affect the financial institutions which provide
credit to us, it is possible that our ability to draw upon our credit facilities may be impacted. If adequate
funds are not available, or are not available on acceptable terms, we may not be able to make future
investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges.
We may be unable to win new contract awards if we cannot provide clients with letters of credit, bonds or other
security or credit enhancements.
In certain of our business lines it is industry practice for customers to require surety bonds, letters of
credit, bank guarantees or other forms of credit enhancement. Surety bonds, letters of credit or guarantees
indemnify our clients if we fail to perform our obligations under our contracts. Historically, we have had
strong surety bonding capacity due to our industry leading credit rating, but, bonding is provided at the
surety’s sole discretion. In addition, because of the overall limitations in worldwide bonding capacity, we
may find it difficult to find sufficient surety bonding capacity to meet our total surety bonding needs. With
regard to letters of credit, while we have had adequate capacity under our existing credit facilities, any
capacity that may be required in excess of our credit limits would be at our lenders’ sole discretion and
therefore is not certain. Failure to provide credit enhancements on terms required by a client may result in
an inability to compete for or win a project.
Any acquisitions, dispositions or other investments may present risks or uncertainties.
We have made and expect to continue to pursue selective acquisitions or dispositions of businesses, or
investments in strategic business opportunities. We cannot provide assurances that we will be able to locate
suitable acquisitions or investments, or that we will be able to consummate any such transactions on terms
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