Fluor Corporation (NYSE: FLR) today provided updates on the two projects that it noted on February 18, 2020 were subject to developments contributing to the delay of Fluor’s Form 10-K filing.
As announced last Friday, Fluor, along with its joint venture partners on the Purple Line Rail Project in Maryland, informed the lead contracting and finance consortium for the project of the joint venture’s intent to terminate the design-build contract. Due to circumstances outside of the joint venture’s control, there were multiple delays on the project and the joint venture was unable to obtain the time and cost relief to which it is entitled from the Maryland Department of Transportation (MDOT) and Maryland Transportation Authority (MTA). The lack of resolution on the impacts of third-party lawsuits, delayed right-of-way acquisition, and changes to regulations and third-party agreements made the joint venture’s continued participation unsustainable.
This decision avoids the joint venture having to fund significant future delay and impact costs associated with completing the project. As provided for under the contract, the joint venture will work with MDOT and the MTA to ensure an orderly transition. This process is expected to take approximately 60 to 90 days and is reimbursable under the contract. As a result of this termination, Fluor’s project backlog will be reduced by approximately $1.2 billion.
The company is finalizing its review of the other outstanding project and, based on its work to date, does not anticipate any material adjustments.
“Fluor has a long history of completing complex and diverse projects around the world,” said Carlos Hernandez, chief executive officer of Fluor. “We are disappointed that our joint venture was unable to reach a successful resolution with our client on the Purple Line project. However, Fluor will continue to combine fiscal responsibility with operational excellence when successfully executing and delivering projects for our clients across the globe.”
About Fluor Corporation
Founded in 1912, Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company that transforms the world by building prosperity and empowering progress. Fluor serves its clients by designing, building and maintaining safe, well executed, capital-efficient projects around the world. With headquarters in Irving, Texas, Fluor ranks 164 on the Fortune 500 list with revenue of $19.2 billion in 2018 and has more than 47,000 employees worldwide. For more information, please visit www.fluor.com or follow Fluor on Facebook, Twitter, LinkedIn and YouTube.
Forward-Looking Statements: This release contains forward-looking statements (including without limitation statements to the effect that the Company or its management "believes," "expects," ”plans,” “intends,” is “positioned” or other similar expressions). These forward-looking statements, including statements relating to future costs on projects and the outcome of ongoing reviews of projects, are based on current management expectations and involve risks and uncertainties. Actual results may differ materially as a result of a number of factors, including, among other things, the severity and duration of the COVID-19 pandemic and actions by governments, business and individuals in response to the pandemic, including the duration and severity of economic disruptions. Additional information concerning other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Item 1A. Risk Factors" in the Company's Form 10-K filed on February 21, 2019. Additional or unforeseen effects from the COVID-19 pandemic may give rise to or amplify these risks. Such filings are available either publicly or upon request from Fluor's Investor Relations Department: (469) 398-7222. The Company disclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new information or future events.
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