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FLUOR CORPORATION
2003฀ANNUAL฀REPORT
CAPITALIZING ON GLOBAL DIVERSIFICATION

Table of contents

  • Page 1
    FLUOR ฀ CORPORATION 2003฀ANNUAL฀REPORT CAPITALIZING ฀ ON ฀ GLOBAL ฀ DIVERSIFICATION

  • Page 2
    ...RETURN฀ON฀EQUITY฀FROM CONTINUING฀OPERATIONS percent 10.0 9.0 8.8 128 170 179 17.0 20.1 18.5 Table฀of฀Contents 1 4 6฀ 20฀ 21฀ 22฀ 23฀ 24 Letter At-a-Glance Operations Report New Awards & Backlog Data Selected Financial Data Officers Board of Directors Form 10-K 01 02 03...

  • Page 3
    ... clean fuels, life sciences, power and transportation. During 2003, we completed three acquisitions that support our goal to grow our Government and Operations & Maintenance (O&M) businesses. Our focus on expanding our participation in the federal services market showed substantial results in 2003...

  • Page 4
    ..., we expect to build on the growth achieved in new awards and backlog during 2003, driven by anticipated increases in capital spending by a number of major clients. We remain convinced that the market for our services, particularly in the global oil and gas industry, is in the early stages of a long...

  • Page 5
    ...were pleased to welcome Admiral Joseph Wilson Prueher to Fluor's board of directors. He brings an international, informed and seasoned set of perspectives, as well as valuable expertise on China and the federal government. Following 35 years of distinguished service in the U.S. Navy, Admiral Prueher...

  • Page 6
    ... of history's master builders, we design, execute and maintain the infrastructures that support the progress and expansion of civilization. Fluor฀Corporation฀is฀one฀of฀the฀world's฀largest,฀฀ publicly฀owned฀engineering,฀procurement,฀construction฀ and฀maintenance฀(EPCM...

  • Page 7
    ... ranked No. 1 or No. 2 on Engineering News-Record (ENR) magazine's annual list of "Top 400 Contractors." FLUOR ฀ HAS ฀ AN ฀ INTERNATIONAL ฀ PRESENCE ฀฀ WITH ฀ OPERATIONS ฀ AROUND ฀ THE ฀ WORLD Argentina Australia Azerbaijan Bahamas Brazil Canada The฀Netherlands Peru...

  • Page 8
    ... EXXONMOBIL,฀AGIP฀KAZAKHSTAN฀ NORTH฀CASPIAN฀OPERATING฀ COMPANY฀(KCO),฀KUWAIT฀OIL฀ COMPANY,฀LUKOIL,฀MARATHON฀ ASHLAND฀PETROLEUM,฀PEMEX฀฀ GAS,฀SASOL,฀SAUDI฀YANBU฀ PETROCHEMICALS,฀SHELL,฀฀ SUNCOR฀ENERGY,฀SYNCRUDE,฀ TENGIZCHEVROIL฀(TCO),฀WOODSIDE...

  • Page 9
    ... N ฀ 2003 ฀ A NNUA L ฀ R E PO R T OIL ฀ & ฀ GAS the early stages of a major capital investment cycle. Fluor has performed front-end engineering on a number of major oil and gas projects, which tend to be very large, complex multi-year programs in challenging geographic locations. Because...

  • Page 10
    ... Gulf Coast. During the year, Fluor was also successful in winning a number of smaller, strategic awards that position the company well for future opportunities with key clients. These include the long-term consulting services agreement with the Kuwait Oil Company for their capital spending program...

  • Page 11
    ...$26 million 0.0 0.0 01 completed 02 03 in prior years. Overall earnings performance 01 02 on legacy projects which had been OPERATING PROFIT OPERATING P in 2003 reflected continuing strength in life sciences and strong growth in Fluor's trans- dollars in millio dollars in millions portation business...

  • Page 12
    ... Minnesota is the first best-value and the largest design/ build contract ever awarded by the Minnesota Department Fluor฀is฀executing฀an฀฀ integrated฀engineering,฀ procurement,฀construction฀ management,฀and฀validation฀(EPCMV)฀project฀for฀฀ Eli฀Lilly's฀large-scale...

  • Page 13
    ...a significant share of work as these projects move forward. In November 2003, Fluor was awarded a contract to serve as the managing partner of the project-execution consortium for a $700 million chemicals complex to be located in Shanghai, China. Fluor's share of the contract award is 50 percent, or...

  • Page 14
    ... remain modest, primarily focused on emergency response networks or for secure communications systems to address heightened security concerns. Fluor was awarded work in each of these areas during 2003, including design of a new Emergency Operations Center for the City of Los Angeles.

  • Page 15
    ... OF TOTAL OPERATING Increased security-related issues andPROFIT additional long-term outsourcing opportunities are driving higher spending levels across a variety of federal programs. These new areas Global Services 24% best practices and its wide range of skills to serve the allow Fluor to leverage...

  • Page 16
    ...฀of฀ Engineers,฀Fluor฀provides฀ program฀management,฀฀ procurement,฀logistics฀฀ and฀construction฀management฀services.฀As฀of฀ February฀2003,฀this฀effort฀ has฀exceeded฀2,000฀tons฀฀ of฀ocean฀freight฀and฀150฀ tons฀of฀air฀freight฀valued...

  • Page 17
    ..., adding essential execution resources with the necessary security clearances. SM PAGE ฀ 15 ฀ J.A.฀Jones฀International,฀ recently฀acquired฀by฀ Fluor,฀provided฀turnkey฀ design-build฀services฀to฀ the฀U.S.฀Department฀of฀ State฀Overseas฀Buildings฀ Operations...

  • Page 18
    ... Fluor's core competencies and complement the company's EPCM business focus. 01 02 03 Services include operations and maintenance (O&M), NEW AWARDS & BACKLOG project site services and industrial fleet outsourcing, plant performance services, temporary staffing, construction services and global...

  • Page 19
    ... operations and maintaining world-class safety performance. The company was awarded the National Safety Council's 2003 Industry Leader Award for achieving the best safety performance in its industry. TRS® Staffing Solutions, Fluor's temporary staffing business, is focused on supporting Fluor's EPCM...

  • Page 20
    ... new power projects awarded in the U.S. While awards for new projects were extremely modest in 2003, Fluor focused on executing its strong backlog of power work, successfully completing six projects during the year and generating $77 million in operating profit. Backlog for Power at the end of the...

  • Page 21
    ... of Fluor Corporation, providing construction management and direct-hire construction expertise in support of Fluor's operating businesses in North America. Additionally, FCII supports the staffing of international construction projects and has employees working around the world. FCII has executed...

  • Page 22
    ... LO G ฀ BY ฀ REGIO N ฀ ฀ At฀December฀31฀ ฀ (in฀millions) 2003฀ ฀ Dollars฀ Percent฀ 2002฀ ฀ Dollars฀ Percent฀ 2001 Dollars฀ Percent ฀ ฀ ฀ ฀ United฀States฀ Americas฀ Europe,฀Africa,฀and฀Middle฀East฀ Asia฀Pacific฀(includes฀Australia...

  • Page 23
    ...฀of฀operations฀of฀Massey฀and฀the฀non-core฀businesses฀for฀all฀periods฀presented฀have฀been฀reclassified฀and฀are฀presented฀as฀discontinued฀฀ operations.฀In฀addition,฀the฀company฀changed฀to฀a฀calendar-year฀basis฀of฀reporting฀financial...

  • Page 24
    ...Vice President and Treasurer (2001) Chief Legal Officer and Secretary (1974) H. ฀ STEVEN ฀ GILBERT RONALD ฀ E. ฀ PITTS Senior Vice President, Human Resources and Administration (1970) KIRK ฀ D. ฀ GRIMES President, Fluor Constructors International (1976) VICTOR ฀ L. ฀ PRECHTL Vice...

  • Page 25
    ...and chief executive officer of The Chubb Corporation. He is also a director of H.J. Heinz Company. (1997) (1) (2) (3) ADMIRAL ฀ JOSEPH ฀ W. ฀ PRUEHER 72, is a financial economist and former member of the Board of Governors of the Federal Reserve System. She is also a director of Massey Energy...

  • Page 26
    ... of our results of operations and financial condition, our financial statements, notes and supplementary data. A listing of our executive officers with brief biographies. Also directs readers to our proxy statement for the details on our board of directors and executive compensation. PART ฀ III...

  • Page 27
    ... Annual report and proxy statement are mailed about April 1. Fluor's annual meeting of shareholders will be held at 9:00 a.m. on April 28, 2004 at the Fluor Engineering Campus located at One Fluor Daniel Drive, Aliso Viejo, California. STOCK ฀ TRADING Shareholders may vote their proxies 24 hours...

  • Page 28
    Fluor Corporation One Enterprise Drive Aliso Viejo, CA 92656 Features available to you on www.fluor.com Investor฀ Relations © 2004 Fluor Corporation All rights reserved.