FLUOR CORP Q4 FY2024 earnings call

• CEO transition: David Constable to become Executive Chairman, Jim Brewer to be CEO effective May 1.
• Financial results: Full year revenue $16.3 billion, net income $2.1 billion ($12.30 per diluted share).
• Segment highlights: Urban Solutions backlog at $17.7B, Energy Solutions backlog down, Mission Solutions backlog firm. ATLS, Mining, Infrastructure, Energy, Mission segments had specific project updates.
• NuScale: Deconsolidated in Oct 2024, resulting in pretax gain. Negotiations ongoing for long-term monetization.
• Capital structure: Strengthened with share repurchase program, Stork U.K. sale, real estate footprint reduced to 3.7 million sq ft.

Urban Solutions

• Quarter profit: $81 million vs. $147 million a year ago. New awards for the quarter totaled $1.4 billion. Full-year ending backlog grew by 20% to $17.7 billion, up from $14.8 billion a year ago.

ATLS

• Received an incremental award of $243 million for Lilly's LP1 project in Lebanon, Indiana. Semiconductor manufacturer in Arizona awarded tool installation work. 2025 opportunities include Lilly's Indiana project expansion, peptide manufacturing facility, and data center work.

Mining and Metals

• Received an award for a debottlenecking project in Australia. 2025 focus on developing capacity for key resources (copper, green steel, lithium, iron ore) with tracking opportunities worth tens of billions.

Infrastructure

• Gordie Howe project 94% complete, LAX Automated People Mover 93% complete, I-635 LBJ project 70% complete. Selectively pursuing opportunities in Texas, North Carolina, and the Netherlands.

Energy Solutions

• Q4 segment profit: $63 million vs. $26 million a year ago. New awards totaled $406 million. Ending backlog: $7.6 billion vs. $9.7 billion a year ago. LNG Canada project 95% complete. NuScale negotiations ongoing.

Mission Solutions

• Q4 segment profit: $45 million vs. $31 million a year ago. New awards: $429 million. Ending backlog: $2.7 billion vs. $3.9 billion a year ago. Well-positioned on recompetes/extensions with DoD and DOE.

• 2025 EBITDA guidance: $575M-$675M; operating cash flow: $450M-$500M; EPS: $2.25-$2.75.
• New awards book-to-burn ratio well above 1; revenue growth ~15%; net interest income ~$80M; G&A ~$180M; tax rate ~30%-35%.
• Segment margins: Urban 4%-5%, Energy 3.5%-4.5%, Mission 5%-6%.

• Jury verdict: $116M provision related to jury verdict against joint venture on infrastructure project.
• Nuclear space: Monetization of NuScale taking patience due to start-up pre-commercialization mode.
• Federal contracts: Uncertainties regarding spending freezes, but mission solutions work considered top priority.
• Supply chain: Challenges with insulation installation on LNG Canada project piping/equipment.

Q: About book-to-bill and data centers, Michael Dudas asked for more visibility on timing and scope.

A: Jim Breuer mentioned data centers are early in the cycle, with major hyperscalers investing billions, and Fluor well-positioned with master agreements.

Q: Sangita Jain asked about NuScale monetization timing and federal government contracts.

A: David Constable said negotiations ongoing, taking patience in nuclear space; federal contracts work considered top priority.

Q: Jamie Cook asked about Energy Solutions margins and cash flow.

A: Joseph Brennan said pivot from big projects to Urban Solutions causes initial margin drag, but improvement expected later.

Q: Andrew Wittmann asked about cash flow offsets and power generation.

A: Joseph Brennan said cash flow guide absorbs legacy project burn, with JV distributions and ongoing business generation; David Constable and Jim Breuer discussed rebuilding thermal power team on reimbursable basis.

Q: Steven Fisher asked about NuScale negotiations and Energy Solutions margins.

A: David Constable said NuScale talks ongoing, patience needed; Joseph Brennan explained Energy Solutions margin pivot due to shift to Urban Solutions.

Q: Brent Thielman asked about interest income and Energy Solutions backlog.

A: John Regan said JV cash repatriation and share repurchases affect interest income; Jim Breuer said Energy Solutions inflection likely in 2026 due to client FID timing.