Fluor 2011 Annual Report Download - page 80

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Government
Revenue and segment profit for the Government segment are summarized as follows:
Year Ended December 31,
(in millions) 2011 2010 2009
Revenue $3,398.2 $3,038.0 $1,983.2
Segment profit 145.5 142.2 116.8
Revenue in 2011 and 2010 increased 12 percent and 53 percent compared to 2010 and 2009,
respectively, principally due to an increase in the volume of work for the Logistics Civil Augmentation
Program (‘‘LOGCAP IV’’) for the United States Army in Afghanistan. Project execution activities
associated with the gaseous diffusion plant contract for the Department of Energy in Portsmouth, Ohio
(the ‘‘Portsmouth Project’’), awarded in the first quarter of 2011, also contributed to the 2011 revenue
increase, though the impact was largely offset by a reduction in revenue attributable to the close-out of the
American Recovery and Reinvestment Act (‘‘ARRA’’) funded work at the Savannah River Site
Management and Operating Project (the ‘‘Savannah River Project’’) in South Carolina and the completion
of many task orders for the U.S. Army Corps of Engineers Transatlantic Programs Center (‘‘CETAC’’)
logistics program in Iraq. Revenue growth in 2010 for the Savannah River Project and ARRA funded work
at the Savannah River Project site was offset by a decrease in revenue at the Hanford Environmental
Management Project (the ‘‘Hanford Project’’) in the state of Washington, which was completed in 2009.
Segment profit during 2011 and 2010 increased two percent and 22 percent compared to 2010 and
2009, respectively, primarily due to additional contributions from higher levels of project execution
activities on LOGCAP IV task orders. The growth in segment profit for 2011 was also attributable to the
Portsmouth Project, though reduced contributions from CETAC task orders and the ARRA work at
Savannah River more than offset its positive impact.
Segment profit margin was 4.3 percent, 4.7 percent and 5.9 percent for the years ended December 31,
2011, 2010 and 2009, respectively. The higher segment profit margin in 2009 was primarily attributable to
the favorable resolution of disputed items and warranty obligations for the Bagram Air Base contract in
Afghanistan that resulted in the recognition of $15.3 million of segment profit during the year.
New awards were $3.7 billion during 2011, $2.8 billion during 2010 and $2.3 billion during 2009.
The increase in new award activity in 2011 was primarily attributable to the initial contract funding for the
Portsmouth Project and increased funding for LOGCAP IV task orders. New awards in 2011 also included
the annual funding for the Savannah River Project. Significant new awards for 2010 included LOGCAP IV
task orders, which drove the increase in new award activity compared to 2009, and the annual funding for
the Savannah River Project. Significant new awards for 2009 included the annual funding for the Savannah
River Project, the multi-year ARRA funding at the Savannah River Project site and LOGCAP IV task
orders. The company reports new awards for LOGCAP IV as individual task orders are awarded
and funded.
Backlog was $1.1 billion as of December 31, 2011, $751 million as of December 31, 2010 and
$1.0 billion as of December 31, 2009. The growth in backlog during 2011 was driven by the initial contract
funding for the Portsmouth Project and increased funding for LOGCAP IV task orders. The higher
backlog in 2009 compared to 2010 was primarily due to the multi-year funding for ARRA work at the
Savannah River Project site that was a new award in 2009, and partially worked off by the end of 2010.
Total assets in the Government segment were $800 million as of December 31, 2011, $1.1 billion as of
December 31, 2010 and $660 million as of December 31, 2009. The decrease in total assets in 2011
compared to 2010 was mainly due to a decrease in working capital related to the LOGCAP IV task orders.
The increase in total assets in 2010 compared to 2009 corresponded to an increase in working capital to
support project execution activities, particularly for LOGCAP IV task orders.
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