risk management in the government market: fluor’s perspectiveecrisponsor.org/presentations/w1-2...

Risk Management in the Government Market: Fluor’s Perspective

Tom D’Agostino President Fluor Government Group

ECRI Washington, DC December 2017

***COMPANY CONFIDENTIAL*** © 2016 Fluor. All Rights Reserved. | HO20160647

Agenda

Corporate Overview Government Group Structure Government Group Outlook Risk Mitigation

1


Fluor Profile

One of the world’s largest publicly traded engineering, procurement, construction and maintenance companies

Designs, builds and maintains capital-efficient facilities for clients on six continents

Delivers integrated solutions for clients in multiple market sectors

Serving more than 4,000 clients in over 100 countries

#149 on the 2017 FORTUNE® 500 list; revenue of $19 billion in 2016

More than 60,000 employees executing projects globally

105-year Fluor legacy

2

Dallas, Texas Fluor Corporate Headquarters


Corporate Financial Performance

3

Standard & Poor’s Moody’s Fitch

Long-term Ratings: A- Baa1 BBB+

Short-term Ratings: A-2 P-2 F-2

Outlook: Stable Stable Stable

The financial data is correct as of 12/31/16.

Revenue: $19 billion New awards: $21 billion Backlog: $45 billion Fluor Corporation’s investment grade ratings:

FLR Celebrating NYSE 60 Years in 2017


Corporate Revenue Performance

4

21.518.1 19

0

5

10

15

20

25

30

35

40

2014 2015 2016

Revenue in US$ Billions


Corporate New Award Performance

5

28.8

21.8 21

0

5

10

15

20

25

30

35

40

2014 2015 2016

New Awards in US$ Billions


Corporate Backlog Performance

6

42.5 44.7 45

0

5

10

15

20

25

30

35

40

45

2014 2015 2016

Backlog in US$ Billions


Differentials

Executing work in challenging locations Global supply chain Mobilizing diverse workforces Joint ventures and alliances worldwide

7


Client Markets

8


Government Group

9

Fluor Government Group provides a variety of services to the U.S. and select international governments, including:

Contingency operations

Construction

Emergency response & recovery

Environmental & nuclear

Decontamination & decommissioning

Waste management

Base operations & services

Secure Services


Government Group Worldwide Projects

10

Savannah River National Laboratory Aiken, South Carolina

U.S. DOE Portsmouth Site D&D Piketon, Ohio

U.S. Army LOGCAP IV Afghanistan, Africa & Caribbean

BAE Radford Army Ammunition Plant Radford, Virginia

NAS Pensacola Base Operations Pensacola, Florida

Power Restoration Puerto Rico


Government Group Overview

11


Government Group State of the Business

12

$000s

40+ ACTIVE PROJECTS

MORE THAN

7,200 EMPLOYEES

WORLDWIDE

40+ ACTIVE PROJECTS

2,512 2,557 2,720 3,130

- 500

1,000 1,500 2,000 2,500 3,000 3,500

2014 2015 2016 2017 OL

Revenue


Government Group Markets

Focused where customers have an obligation to fund

Markets large, stable, and expected to grow National security remains a priority Readiness of military a priority

Bow wave of environmental management work

Potential for more favorable regulatory/contracting environment

Cost and schedule are drivers

13

LOGAP – Africa Idaho Radford Secure Services


Government Group Risk Categories

Project Execution

Shifting Agendas & Priorities

14

Geopolitical Staffing & Training

Shrinking U.S. Government

Spend/Budget

Government Audit

Business Systems

Financial

Employee Safety & Security


Employee Safety & Security

15


Geopolitical

16

Afghanistan Horn of Africa


Staffing & Training

17


Project Execution

18


0 10 20 30 40 50 60 70 80 90 100

2014

2015

2016

2017

Number of Audits per Year

Year

Government Agency Active Audit Count by Year DCAA

DCMAOther

$7.8 Million At Risk 20 Active DCAA Auditors




$$ At Risk / DCAA Headcount

Government Audit

19


Case Study: LOGCAP Ebola

20

Scope: Performed construction and logistics services for U.S. Army in Liberia and Senegal including airport runway repairs, building housing camps and Ebola treatment centers Challenges:

– Building scalable tent cities capable of supporting nearly 3,000 personnel

– 72 hour deployment response time – Maintaining safety and health of employees – Repatriating employees (quarantine)


Conclusion

21

Dynamic risk environment Attention to detail is critical Risk management is a team sport


Questions?

risk management in the government market: fluor’s perspectiveecrisponsor.org/presentations/w1-2...

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