Fluor 2011 Annual Report Download - page 142

FLUOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
$1.8 billion, $2.4 billion and $1.5 billion, respectively. As of December 31, 2011, the carrying values of the
assets and liabilities of the Fluor SKM joint venture were $92 million and $112 million, respectively. As of
December 31, 2010, the carrying values of the assets and liabilities of the Fluor SKM joint venture were
$106 million and $130 million, respectively.
Eagle P3 Commuter Rail Project
In August 2010, the company was awarded its $1.7 billion share of the Eagle P3 Commuter Rail
Project in the Denver metropolitan area. The project is a public-private partnership between the Regional
Transportation District in Denver, Colorado (‘‘RTD’’) and Denver Transit Partners (‘‘DTP’’), a wholly-
owned subsidiary of Denver Transit Holdings LLC (‘‘DTH’’), a joint venture in which the company has a
10 percent interest, with two additional partners each owning a 45 percent interest. Under the agreement,
RTD owns and oversees the addition of railways, facilities and rolling stock for three new commuter and
light rail corridors in the Denver metropolitan area. RTD is funding the construction of the railways and
facilities through the issuance of $398 million of private activity bonds, as well as from various other
sources, including federal grants. RTD advanced the proceeds of the private activity bonds to DTP as a
loan that is non-recourse to the company and will be repaid to RTD over the life of the concession
agreement. DTP, as concessionaire, will design, build, finance, operate and maintain the railways, facilities
and rolling stock under a 35-year concession agreement. The company has determined that DTH is a VIE
for which the company does not qualify as the primary beneficiary. DTH is accounted for under the equity
method of accounting. Based on contractual documents, the company’s maximum exposure to loss relating
to its investments in DTH is limited to its future funding commitment of $5 million, plus the carrying value
of its investment of less than $1 million.
The construction of the railways and facilities is being performed through subcontract arrangements
by Denver Transit Systems (‘‘DTS’’) and Denver Transit Constructors (‘‘DTC’’), construction joint
ventures in which the company has an ownership interest of 50 percent and 40 percent, respectively. The
company has determined that DTS and DTC are VIEs for which the company is the primary beneficiary.
Therefore, the company consolidates the accounts of DTS and DTC in its financial statements. As of
December 31, 2011, the combined carrying values of the assets and liabilities of DTS and DTC were
$133 million and $113 million, respectively. As of December 31, 2010, the combined carrying values of the
assets and liabilities of DTS and DTC were $124 million and $118 million, respectively. The company has
provided certain performance guarantees on behalf of DTS.
Interstate 495 Capital Beltway Project
In December 2007, the company was awarded the $1.3 billion Interstate 495 Capital Beltway
high-occupancy toll (‘‘HOT’’) lanes project in Virginia. The project is a public-private partnership between
the Virginia Department of Transportation (‘‘VDOT’’) and Capital Beltway Express LLC, a joint venture
in which the company has a 10 percent interest and Transurban (USA) Inc. has a 90 percent interest
(‘‘Fluor-Transurban’’). Under the agreement, VDOT owns and oversees the addition of traffic lanes,
interchange improvements and construction of HOT lanes on 14 miles of the I-495 Capital Beltway in
northern Virginia. Fluor-Transurban, as concessionaire, will develop, design, finance, construct, maintain
and operate the improvements and HOT lanes under an 80 year concession agreement. The construction is
being financed through grant funding from VDOT, non-recourse borrowings from issuance of public
tax-exempt bonds, a non-recourse loan from the federal Transportation Infrastructure Finance Innovation
Act (TIFIA), which is administered by the U.S. Department of Transportation and equity contributions
from the joint venture members.
The construction of the improvements and HOT lanes are being performed by a construction joint
venture in which the company has a 65 percent interest and Lane Construction has a 35 percent interest
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