Fluor Corporation (NYSE:FLR) Q4 2019 Earnings Conference Call - Final Transcript

Sep 25, 2020 • 08:30 am ET

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Fluor Corporation (NYSE:FLR) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Alan L. Boeckmann

and then to convert as we -- just as we go into the field has always been a very successful model for us. It wasn't successful to the extent that it was practiced in the previous few years, again, because of that optimism and the lack of true risk assessment.

Carlos and I are absolutely committed, and I think the -- our investors can take it for granted, we are not going to let anything come in to this backlog that doesn't have the proper terms and conditions and the proper assessment and allotment of risk. So I think we're going to be able to address our clients in that way, and I think we can be a very strong player in the Energy & Chemicals. Now, I do think one thing will occur. You will start to see a more rational shift in the percentage of backlog that goes to reimbursable cost by following this model. But -- so I think we'll have a reliable backlog and one that we can bring to the bottom line.

Executive
Joseph L. Brennan

Yeah. Thanks, Jamie. And it's good to talk to you. I'll hit the metrics, and I'm going to play off the back of what Alan just said. I think the first key that I -- that I'm looking at and is truly kind of the benchmark is, what do you put -- what's the quality of work that we're putting into backlog in terms of not only mix but how we go through our bidding process. And we've narrowed the bidding process up over the last six or eight months. And even on today's call, we've narrowed it even further. I think that's the starting point for the quality of your earnings downstream, certainly cash flow and terms and conditions in those contracts and how we can get out in front of the cash flow curve and ultimately what we do with that within our cap structure. So those are probably the two biggest points that I'll be looking at as we start this.

In terms of where we are and funding our loss projects, as we stand on an outlook basis for 2020, we will have funded nominally $400 million of the loss projects while maintaining $2.1 billion in cash, and we will have a carryover into 2021 of an additional -- 2021 and beyond of an additional $200 million that we will be funding over the course of probably two years after that.

Analyst
Jamie Lyn Cook

Okay. That's very helpful. Thank you. I'll get back in queue.

Operator
Operator

Thank you. We'll take our next question from Steven Fisher with UBS.

Analyst
Steven Fisher

Thanks. Good morning. Congratulations on all the progress that you guys have made here. You mentioned that the strategic review is still ongoing. I wondered if you can give us some sense of the possible outcomes of the rest of that review. I mean, it sounds like the Board still believes that Fluor should be an EPC firm in some way, shape or form. Or