Fluor Corporation

The 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 Floor's website at investor.floor.com. At this time, for opening remarks, I would like to turn the call over to Jason Landkammer, Vice President, Investor Relations. Please go ahead.

Thanks, Ian. Good morning and welcome to Floor's 2025 First Quarter Earnings Call. Jim Brewer, Floor's Chief Executive Officer, and John Regan, Floor's Chief Financial Officer, are with us today. Floor issued its first 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'd like to refer 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 2024 Form 10-K and our 10-Q, 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 Jim Brewer, Floor's Chief Executive Officer. Jim?

Thank you, Jason. Good morning, everyone, and thank you for joining us today. Please turn to slide three. I would like to start by thanking everyone who joined us last month in Indianapolis and on the webcast for our strategy update as we roll out the next chapter of our strategy for the period 2025 to 2028. As a quick recap, This slide provides a high-level look at how this strategy is going to evolve from Chapter 1, fix and build, to Chapter 2, grow and execute. Under reinforced financial discipline, our focus will shift from revitalizing the capital structure, which we've accomplished, to generating cash and earnings. As we discussed a few weeks ago, we will continue to pursue fair and balanced contract terms, maintaining our robust pursuant and risk principles while focusing on commercial acumen across all levels of the company. As we grow across the portfolio, we will focus on target markets in our three segments and consider bolt-on acquisitions that add specific technical capabilities in certain areas. And finally, at Fluor, our high-performance culture is centered around project delivery. This is how we create value for our stakeholders. Strong and healthy client relationships are a critical element to building trust and delivering results. We will continue to develop and promote these areas of excellence to ensure we remain at the forefront of our industry. Now, let's start to our operating review, beginning on slide four. Revenue for the first quarter was $4 billion. Consolidated new awards for the quarter were strong at $5.8 billion, led by two significant awards in Urban Solutions. Our book-to-burn ratio for the quarter was 1.5. New awards were 87% reimbursable, and our total backlog is now $28.7 billion, of which 79% is reimbursable. Our backlog reflects significant awards in life sciences and infrastructure, offset by a reduction in scope on two large projects. Moving to our business segments, please turn to slide six. Urban Solutions, our largest and most diverse business, reported profit of $70 million in the first quarter. Results in this segment reflect the significant ramp-up of execution activities with the new awards secured over the past 18 months, including several life sciences and metals projects. New awards for the quarter were $5.3 billion, compared to $4.9 billion a year ago. Ending backlog, now at $20.2 billion, represents 70% of LURE's total backlog. Now, please turn to slide seven. ATLS had another very strong quarter and continues to build our execution capabilities to meet client demand. Last month, we were pleased to announce a new award from one of the world's leading pharmaceutical makers to provide EPCM services for the next phase of their multibillion-dollar investment. This combined program is a world-class endeavor. underpinned by the close collaboration between Fluor, our customer, and our execution partners. It is also a great example of Fluor's continued commitment to the life sciences market. In fact, over the past 50 years, we've worked on 1500 life sciences projects for clients in 30 countries. This business line is also making significant advances on existing projects. For example, At our biotech project in Denmark, earlier this month, we successfully doubled bioreactor capacity. When fully operational, this will be the largest biologic facility of its kind. We're excited about the opportunities that lie ahead for ATLS. Over the next few quarters, we see opportunities in pharmaceuticals and advanced manufacturing. In the semiconductor space, we're tracking the clean room opportunity with an existing client. Finally, we continue to advance the design for a data center in the U.S. under the master services agreement we signed last year with a major technology provider. In mining and metals, we received a services award for the Rakodik copper gold project in Pakistan. This award is a precursor to future EP and CM support services on this project. and it further cements our reputation as a world leader in large-scale copper concentrators. Looking ahead, we see interest in green steel production, multiple opportunities with an existing aluminum client, and increasing focus on projects to grow copper production in North and South America. Moving to slide eight, In infrastructure, new awards include $682 million for a construction contract for TxDOT in the College Station area. The project involves widening a 12-mile stretch of highway from two lanes to three in each direction. This is a key commuter and commercial route for the state. Construction is set to begin this summer. The Gordie Howe project is now 96% complete. And we're on track to hand over the U.S. port of entry in July, getting us closer to our completion date this fall. Moving to energy solutions, please turn to slide nine. Segment profit was $47 million, compared to $68 million a year ago. Results reflect projects nearing completion and a reserve related to a long completed project at our joint venture in Mexico. This was partially offset by increased profit recognition on the chemicals project due to a client-directed change in scope and its impact on profit take-up. New awards for the quarter totaled $315 million and included additional pre-feed services for the Aramco petrochemical facility in Saudi Arabia. In April, we learned of Dow's decision to slow down construction site activities on their Path to Zero project due to market and financial considerations. Dow has instructed Fluor to complete home office engineering and procurement efforts to enhance construction readiness in advance of equipment deliveries expected in the coming quarters. Dow has stated that they remain committed to completing the project. On LNG Canada, field progress is advancing to the final stages, with 782 out of 837 systems having achieved mechanical completion. In recent weeks, the project received an LNG commissioning cargo to facilitate equipment testing and cool down of the facility. This marks another important completion milestone. I'm increasingly confident in the progress made by our team as we enter the final stretch of this project. Our next significant milestone will be the achievement of Ready for Startup on Train 1, which will enable the client to start producing LNG. Prospects for the next three quarters include a chemical recycling plant and a gas compression project. Moving on to slide 10. Mission Solutions reported segment profit of $5 million for the first quarter, compared to $22 million a year ago. Results reflect a reserve of $28 million, stemming from a recent ruling on a longstanding claim related to a support services contract completed in 2019. We were also informed that we lost the re-compete for the Strategic Petroleum Reserve, a project that Fluor has managed over the past 11 years. If we're unsuccessful in our protest, we would transition to work in the second half of this year. New awards of $164 million included bookings for the DOE, FEMA, and the Army. Ending backlog for the quarter was $2.4 billion. Over the next few quarters, we expect to hear about the full release of the Savannah River Plutonium Pit Facility as well as several strategic opportunities in the national security space. Before I turn over the call to John, I wanted to share a few observations from my interactions with clients over the past few weeks in the context of the current economic sentiment. Our clients are always looking for the best way to deploy their capital on projects. Decisions include where to build, the size of facilities, the best supply chain solution, and the timing of projects. Fluor's grow and execute strategy and supply chain acumen position us well to support these efforts, whether domestic or international. We're seeing clients forge ahead with their projects where there is a clear time to market driver. They're not slowing down. However, there are some clients that are more sensitive to cost and GDP growth, and they require further market clarity and cost certainty before committing to final investment decisions. Nonetheless, these clients continue to issue work releases to advance the underlying engineering and design until full project awards are signed. Looking at our remaining new awards outlook for this year, We are already engaged and providing services on over 90% of underlying award revenue. Let me now turn the call over to John for the financial update. John?