Fluor Corporation

Web replay will be available for 30 days. A telephone replay will also be available for seven days through a registration link also accessible on Fluor's website at investor.fluor.com. At this time for opening remarks, I would like to turn the call over to Jason Lankemer, head of investor relations. Please go ahead, Mr. Lankemer.

Thanks, Rob. Good morning and welcome to Fluor's 2023 fourth quarter earnings call. David Constable, Floor's Chairman and Chief Executive Officer, and Joe Brennan, Floor's Chief Financial Officer, are with us today. Floor issued its fourth quarter earnings release earlier this morning, and a slide presentation is posted on our website that we will reference while making prepared remarks. Before getting started, I would like to refer you to our Safe Harbor note regarding forward-looking statements, which is summarized on slide two. During today's presentation, we'll be making forward-looking statements which reflect our current analysis of existing trends and information. There is an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences, in our 2023 Form 10-K, which was filed earlier today. During this call, we will discuss certain non-GAAP financial measures. Reconciliations of these amounts to the comparable GAAP measures are reflected in our earnings release and posted in the Investor Relations section of our website at investor.floor.com. With that, I'll now turn the call over to David Constable, Flourish Chairman and Chief Executive Officer. David?

Well, thank you, Jason, and good morning, everyone. Thank you for joining us today. Please turn to slide three. To get started today, let me highlight the impact that Flour has made in local communities this past year. First, through Flour Cares, that's our employee giving and volunteering program, we donated $4 million to worthy causes in 2023. That represents a 17% increase over 2022. In addition, the Fleur Foundation contributed $4.2 million to community initiatives and programs, with much of that funding going to support underserved groups. Fleur employees donated more than 33,500 volunteer hours in 2023, and that's an increase of 49% over our efforts the previous year. We provided nearly 1 million hours of science, technology, engineering and math instruction to 237,000 students, and we provided 706,000 meals to those in need. As part of our commitment to sustainability, we planted 29,000 trees, including the reconstruction of a mangrove forest on the Philippines coast, plus a large-scale multi-year tree planting effort across four continents. These are just a few examples in the past year of the generosity of our employees and the company which has helped Flora continue our honorable and long history of giving back. Please turn to slide four. It has now been three years since the launch of our new Building a Better Future strategy and the unveiling of our long-term financial targets. 2023 was a pivotal year in which we achieved some significant milestones. Our continued focus on operational excellence has allowed us to move past the inflection point in our path to creating significant shareholder value. I'm extremely proud of the results we've achieved and very thankful for all the efforts put forth by our employees worldwide. We'll discuss more about our future view of Fluor, including our prospects and financial outlook, in just a moment. In 2023, we were successful in converting our high-quality prospect pipeline into new awards, a trend we expect to continue in 2024. Revenue for the year was $15.5 billion, up 13% from 2022. Our full year new awards in 2023 totaled $19.5 billion, with a book-to-burn ratio of 1.3. Through our disciplined pursuit of contracts, 87% of our new awards were reimbursable, and our total backlog is now 76% reimbursable, a full year ahead of our strategic goal. This is a significant improvement from 41% two years ago. And importantly, The current project mix across all business lines is the most diverse it has been in years. Now let's look at an overview of our fourth quarter highlights. Please turn to slide six. Beginning with Urban Solutions, segment profit for the quarter was $147 million, up from $38 million a year ago. Results include a $69 million effect from a settlement on long-standing claims on the Gordie Howe Bridge project, and a favorable determination on another legacy infrastructure project. At Gordie, the team made tremendous progress this past year on the bridge and both ports of entry. We're on track to complete the bridge span this summer and will then start the handover process for the ports of entry. We are very pleased to have a resolution on Gordie that defines our cash funding obligations and solidifies the path to project completion in 2025. Our infrastructure group continues to focus on legacy project completions as its top priority heading into 2024. New awards for the quarter totaled $5.1 billion and included a multi-billion dollar reimbursable award from BHP for stage two of their Janssen Potash project in Canada. In addition, we booked a $1.7 billion reimbursable award with H2 Green Steel. This will be the world's first renewable hydrogen-based integrated steel mill. The site is expected to produce 5 million tons of sustainable steel annually by 2030. Ending backlog for the full year improved to $14.8 billion from $10.3 billion a year ago and is now 71% reimbursable. Moving on to slide 7. Mission Solutions reported a segment profit of $31 million in the fourth quarter compared to $20 million a year ago. New awards were modest in the quarter and ending backlog was $3.9 billion compared to $5.7 billion a year ago. During the quarter, the Mission Solutions Group took steps to enhance our technical service offerings to better serve customers in the national security market. Moving to Energy Solutions, please turn to slide 8. Energy Solutions reported a fourth quarter segment profit of $26 million compared to $124 million in 2022. Segment profit for the quarter reflects the impact of a large project nearing completion and $33 million in cost growth and schedule extension on a large upstream legacy project, which is scheduled to complete this quarter. This charge does not reflect additional opportunities for cost recovery from subcontractors or the client. Results also include a $6 million gain on embedded foreign currency derivatives. Fourth quarter new awards of $2.2 billion. include a $1.3 billion dollar reimbursable contract for a chemical project in Poland. In addition, our Ecoflour joint venture booked extra work on a large EPC project in Mexico. We also received an award for engineering services on a major Middle East chemicals project. Ending backlog was $9.7 billion dollars, up from $9.1 billion a year ago. At LNG Canada, the project is 90% complete overall and has transitioned into the systems completion phase. We expect to begin safe startup activities later this year. Before I turn the call over to Joe, I want to provide an update on our investment in NuScale. With respect to NuScale monetization, we continue to be engaged in an exclusive diligence process with a strategic investor that would provide an accelerated path to commercialization and does so in a way that maximizes returns for floor shareholders. We expect to have an update in the first half of this year. With that, let me turn the call over to Joe for the financial update.