Fluor 2011 Annual Report Download - page 59

operations or access to bonding, and are not able to provide the services or supplies necessary for our
business. In addition, in instances where Fluor relies on a single contracted supplier or subcontractor or a
small number of subcontractors, there can be no assurance that the marketplace can provide these
products or services in a timely basis, or at the costs we had anticipated. A failure by a third-party
subcontractor or supplier to comply with applicable laws, rules or regulations could negatively impact our
business and, in the case of government contracts, could result in fines, penalties, suspension or even
debarment.
The success of our joint ventures depends on the satisfactory performance by our joint venture partners of their joint
venture obligations. The failure of our joint venture partners to perform their joint venture obligations could impose
on us additional financial and performance obligations that could result in reduced profits or, in some cases,
significant losses for us with respect to the joint venture.
We enter into various joint ventures and teaming arrangements as part of our engineering,
procurement and construction businesses, including ICA Fluor and project-specific joint ventures, where
control may be shared with unaffiliated third parties. Differences in opinions or views between joint
venture partners can result in delayed decision-making or failure to agree on material issues which could
adversely affect the business and operations of the venture. At times, we also participate in joint ventures
where we are not a controlling party. In such instances, we may have limited control over joint venture
decisions and actions, including internal controls and financial reporting which may have an impact on
our business.
From time to time in order to establish or preserve a relationship, or to better ensure venture success,
we may accept risks or responsibilities for the joint venture which are not necessarily proportionate with
the reward we expect to receive. The success of these and other joint ventures also depends, in large part,
on the satisfactory performance by our joint venture partners of their joint venture obligations, including
their obligation to commit working capital, equity or credit support as required by the joint venture and to
support their indemnification and other contractual obligations. If our joint venture partners fail to
satisfactorily perform their joint venture obligations as a result of financial or other difficulties, the joint
venture may be unable to adequately perform or deliver its contracted services. Under these
circumstances, we may be required to make additional investments and provide additional services to
ensure the adequate performance and delivery of the contracted services. These additional obligations
could result in reduced profits or, in some cases, increased liabilities or significant losses for us with respect
to the joint venture. In addition, a failure by a joint venture partner to comply with applicable laws, rules or
regulations could negatively impact our business and, in the case of government contracts, could result in
fines, penalties, suspension or even debarment.
Our businesses could be materially and adversely affected by events outside of our control.
Extraordinary or force majeure events beyond our control, such as natural or man-made disasters,
could negatively impact our ability to operate. As an example, from time to time we face unexpected severe
weather conditions which may result in weather-related delays that are not always reimbursable under a
fixed-price contract; evacuation of personnel and curtailment of services; increased labor and material
costs in areas resulting from weather-related damage and subsequent increased demand for labor and
materials for repairing and rebuilding; inability to deliver materials, equipment and personnel to jobsites in
accordance with contract schedules and loss of productivity. We may remain obligated to perform our
services after any such natural or man-made event, unless a force majeure clause or other contractual
provision provides us with relief from our contractual obligations. If we are not able to react quickly to
such events, our operations may be significantly affected, which could have a negative impact on our
operations. In addition, if we cannot complete our contracts on time, we may be subject to potential
liability claims by our clients which may reduce our profits.
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