Fluor 2011 Annual Report Download - page 85

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The increase in contributions to the defined benefit pension plans during 2011 was primarily due to lower
long-term interest rates coupled with the business objective to generally maintain plan assets in excess of
accumulated benefit obligations. As of December 31, 2011, 2010 and 2009, plan assets of all of the
company’s more significant benefit plans exceeded accumulated benefit obligations.
Investing Activities
Cash utilized by investing activities amounted to $436 million and $818 million in 2011 and 2009,
respectively, while cash provided by investing activities amounted to $218 million in 2010. The primary
investing activities during 2011, 2010 and 2009 included purchases, sales and maturities of marketable
securities, capital expenditures, business acquisitions and disposals of property, plant and equipment.
The company holds cash in bank deposits and marketable securities which are governed by the
company’s investment policy. This policy focuses on, in order of priority, the preservation of capital,
maintenance of liquidity and maximization of yield. These investments include money market funds which
invest in U.S. Government-related securities, bank deposits placed with highly-rated financial institutions,
repurchase agreements that are fully collateralized by U.S. Government-related securities, high-grade
commercial paper and high quality short-term and medium-term fixed income securities. During 2011 and
2009, purchases of marketable securities exceeded proceeds from the sales and maturities by $133 million
and $623 million, respectively. During 2010, proceeds from the sales and maturities of marketable
securities exceeded purchases by $438 million. The company held current and noncurrent marketable
securities of $600 million and $472 million as of December 31, 2011 and 2010, respectively.
Cash utilized by investing activities in 2011, 2010 and 2009 included capital expenditures of
$338 million, $265 million and $233 million, respectively. Capital expenditures during 2011, 2010 and 2009
included significant outflows related to the equipment business line of the Global Services segment, as well
as investments in information technology and the refurbishment of facilities. Cash flows provided by
investing activities include proceeds of $54 million in both 2011 and 2010 and $38 million in 2009 primarily
from the disposal of construction equipment associated with the equipment operations in the Global
Services segment.
During 2011, the company paid $27 million to acquire controlling interests in both NuScale
Power, LLC, an Oregon-based designer of small modular nuclear reactors, and Goar, Allison &
Associates, a Texas-based provider of sulfur technologies for upstream gas plants, downstream refineries
and gasification.
Financing Activities
Cash utilized by financing activities during 2011, 2010 and 2009 of $396 million, $390 million and
$323 million, respectively, included company stock repurchases, company dividend payments to
stockholders, proceeds from the issuance of senior notes, convertible note repayments, distributions paid
to holders of noncontrolling interests and corporate-owned life insurance loan repayments.
The company has a common stock repurchase program, authorized by the Board of Directors, to
purchase shares in open market or privately negotiated transactions at the company’s discretion.
The company repurchased 10,050,000 shares, 3,079,600 shares and 3,060,000 shares of common stock
under its current and previously authorized stock repurchase programs resulting in cash outflows of
$640 million, $175 million and $125 million in 2011, 2010 and 2009, respectively. As of December 31, 2011,
11.3 million shares could still be purchased under the existing stock repurchase program.
During 2011, 2010 and 2009, the company’s Board of Directors authorized the payment of quarterly
dividends of $0.125 per share. Dividends of $88 million, $90 million and $91 million, were paid during
2011, 2010 and 2009, respectively. Declared dividends are typically paid during the month following the
quarter in which they are declared. The payment and level of future cash dividends is subject to the
discretion of the company’s Board of Directors. On February 2, 2012, the company’s Board of Directors
authorized an increase in the company’s quarterly dividend from $0.125 per share to $0.16 per share.
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