Fluor 2011 Annual Report Download - page 81

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Global Services
Revenue and segment profit for the Global Services segment are summarized as follows:
Year Ended December 31,
(in millions) 2011 2010 2009
Revenue $1,577.7 $1,508.6 $1,578.1
Segment profit 151.8 133.3 106.6
Revenue in 2011 increased five percent compared to 2010 principally due to the equipment business
line which experienced a higher volume of work in Afghanistan and South America. A decrease in current
year revenue attributable to the close-out of the Gulf Coast oil spill cleanup project in 2010 was offset by
an increase in other 2011 operations and maintenance business line project execution activities and an
increase in revenue in the temporary staffing business line. Revenue decreased four percent during 2010
compared to the prior year primarily due to the reduction in the equipment business line’s Iraq business
activities. This revenue decline was partially offset by an increase in revenue related to the Gulf Coast oil
spill cleanup in the operations and maintenance business line.
Segment profit during 2011 increased 14 percent compared to 2010, primarily due to the improved
performance from the equipment business line, as noted above. Increased segment profit in the current
year from the temporary staffing business line was offset by a decrease in contributions from the
operations and maintenance business line, the latter of which was primarily the result of the close-out of
the Gulf Coast oil spill cleanup project in the prior year. Segment profit during 2010 increased 25 percent
compared to 2009 primarily because 2009 included a $45 million charge related to the uncollectability of a
client receivable for a paper mill where the company’s scope of work was to recommission, start up and
operate the facility. Segment profit in 2010 benefitted from the Gulf Coast oil spill cleanup activities,
though the resulting positive contribution was more than offset by the overall weak economic conditions
impacting all business lines, including the continued delay and reduction in capital work and maintenance
activities in the operations and maintenance business line and reduced activity in the domestic and
European operations of the temporary staffing business line.
Segment profit margin was 9.6 percent, 8.8 percent and 6.8 percent for the years ended December 31,
2011, 2010 and 2009. Segment profit margin for 2011 was higher compared to 2010 due to improvement in
margins in the equipment business line’s activities in Afghanistan and South America. The lower 2009
segment profit margin was due to the factors that impacted segment profit noted above, particularly the
charge related to the write-off of the uncollectable receivable for the paper mill project.
New awards in the Global Services segment were $1.0 billion during 2011, $1.6 billion during 2010 and
$903 million during 2009. The operations and maintenance business line continues to experience lower
volume with existing clients, as well as delayed new client releases. New awards for all three years included
new work and renewals for key clients, such as IBM (all years), ALCOA (all years), Procter & Gamble (all
years) and SAPREF of South Africa (2010).
Backlog for the Global Services segment was $1.9 billion as of December 31, 2011, $2.1 billion as of
December 31, 2010 and $1.8 billion as of December 31, 2009. Operations and maintenance activities that
have yet to be performed comprise Global Services backlog. Short-duration operations and maintenance
activities may not contribute to ending backlog. In addition, the equipment, temporary staffing and supply
chain solutions business lines do not report backlog or new awards.
Total assets in the Global Services segment were $937 million as of December 31, 2011, $824 million
as of December 31, 2010 and $745 million as of December 31, 2009. The increase in the segment’s total
assets in 2011 corresponded to an increase in working capital and equipment to support the equipment
business line. The increase in total assets in 2010 was due to an increase in working capital to support
projects in the operations and maintenance business line, additional working capital to support ongoing
equipment transactions and an expansion of the equipment fleet to support long-term agreements.
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