Fluor Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Dudas - Vertical Research - Analyst : First, maybe for David or Jim, as you put together your outlook for 2025 and some of the crosscurrents that you've highlighted in your prepared remarks, On the book to bill that could be well above one, maybe a little bit more thought on timing in the areas. Certainly, you highlighted Energy Solutions reloading, but in the Urban side, which has really been a big driver in the last couple of years, maybe some a little bit more visibility on how that will be booked and the margins that you're seeing on some of these opportunities in the Urban Solutions area relative to the mixture business?

Question: Michael Dudas - Vertical Research - Analyst : Maybe how when you look at the maybe upcoming data center cycle relative to say your let's say life science or semi cycle and like where are we in in maybe early inning or what innings you're in and the magnitude and scope of what you would be providing and what those numbers would look like when you heard those kind of. Prospects of the bookings.

Question: Michael Dudas - Vertical Research - Analyst : I'm sorry, I apologize. On the data center site, maybe compared to like your life science or semiconductor electronic space and what we're in and what when you convert those prospects, what type of size of projects and what scope that you'd be providing as you move through this looks like a long cycle of build out on the AI front.

Question: Sangita Jain - KeyBanc Capital Markets - Analyst : If I can ask one on NuScale , I believe that there was a due date to execute a term sheet for the strategic virus. I'm just wondering if that is still the case or if there's a change in your thinking on the timing of the monetization.

Question: Sangita Jain - KeyBanc Capital Markets - Analyst : Great, I appreciate that, and I know you guys mentioned in your prepared marks regarding the new administration and the EO, but there's also been a lot of confusing news regarding spending freezes, so maybe you can give us an update on where you stand with your federal government contracts, whether it's FEMA or NNSA or the Department of Defense, and if you're seeing any movement there.

Question: Jamie Cook - Truist Securities - Analyst : I guess my first question just on LNGC, JGC announced cost increases I think last week in conjunction with their earnings, and you mentioned some stuff in your prepared remarks. So can you just give us more color there? Were there any cost increase that you guys incurred in the quarter associated with that project and your margins for ES next year 3.5 to 4.5%, so. At the low end, the margins are lower than what you're expecting this year at the low end of the range, so does that. Reflect LNGC and then just my second question on the guide for the year, I think you mentioned that it would be more back end loaded if you could just help us, how we think about first half versus second half just so this street calibrates estimates correctly. Thank you.

Question: Andy Wittmann - Baird - Analyst : Yeah, great, and thanks for taking my questions. Maybe Joe, one for you. I just kind of looking at the cash flow guidance here $450 million, $500 million. That's that or maybe slightly above the net income guidance, which is a pretty good outcome. It's particularly concerned here. You've got, I guess $237 million of burn associated with these legacy projects, yet a pretty good OCF number. So I guess my question is, got a couple parts to it. Which is what are the offsets that are leading to maybe, considering you've got this burden for legacy, what's the offset on the positives that are there more JV cash distributions that are kind of propping up the The OCF guidance that you give here, are you expecting in 2024 you came into the year expecting to burn a lot more on the legacy projects than you actually did because during the year you got some you got some relief on those projects. I'm thinking about Gordie . I'm thinking about LAX . Of those things I think helps offset some of the cash. So are you looking for some of these offsets in 25 to deliver this number, or can you just talk maybe about some of the moving parts inside of that?

Question: Andy Wittmann - Baird - Analyst : Okay, appreciate that, and then I guess maybe David, one for you talked about the. The potential to attach power generation, including thermal to the data center and being a more holistic solution. I think obviously that makes a lot of sense and stands to reason, just as it relates to the thermal side. I mean this is a business obviously you guys have had a long issue you mentioned that, but from investors' point of view, this was a business that was kind of shut down because of the fixed price nature of the business. I would imagine that the experts that you had in the company might not any longer be with the company. How do you position the business rebuilding a team? Presumably you'd only do it on a reimbursable basis? How do you credibly rebuild that team? To deliver that solution, and can you just, as per the answer to that question, can you just talk about how advanced any discussions on the power generation side are for you on the thermal side.

Question: Steven Fisher - UBS - Analyst : But thanks, good morning and congratulations to all of the new roles. Just wanted to follow up on the NuScale discussion. I'm just curious data, I mean, has anything changed in terms of the negotiations? I mean, are you actually making progress? I know investors are kind of sitting a little bit anxiously hoping you're able to lock in some of the value in the marketplace, so I understand it's probably hard to discuss negotiations that are ongoing, but I'm just wondering if there's any other comfort you can offer investors that that you are actually making tangible progress towards some monetization.

Question: Steven Fisher - UBS - Analyst : Okay, that's helpful. And then just to follow up on Jamie's question about the Energy Solutions margins, I guess I'm still a little unclear about why the first half at least is a little bit low, given that it sounds like the mix should be. Much higher in terms of engineering services, which should be higher margins. Is it was the point that you basically there's just an under absorption of the project management resources and staffing that you have and that offsets that the higher engineering mix. And then I guess more broadly, David, I think during a lot of your tenure, the message has really been about a focus on putting higher margins into backlog. And I'm wondering if that under Jim and John, is that going to be sort of still the ongoing message here or is anything kind of changed in in that regard? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 18, 2025 / 1:30PM, FLR.N - Q4 2024 Fluor Corp Earnings Call

Question: Brent Thielman - D.A. Davidson - Analyst : I just had a question on the financial guidance inputs and specifically just around the interest income expectation of $80 million in 2025. I think you realized $150 in 2024. It just, it, can you bridge the difference there? Are there any other cash outflows you need to be aware of, understand you're going to have some share repurchases in there, but. I want to understand that.

Question: Brent Thielman - D.A. Davidson - Analyst : Understood. Yeah, and I guess just to follow up and all the conversation around the stronger book to burn , I think, well understood Urban Solutions is going to continue to be a nice driver here. I guess I'm more curious on the timing and Energy Solutions as we advance through 2025. Are you so cautiously optimistic or optimistic, we might see an inflection in this kind of downward trend and backlog. It's developed more recently I'm just trying to get a sense of when you think some of these opportunities start to accelerate there.