FLR
#A lot of the resources are fungible within the Company.
We have the ability to move people around to different projects.
I don't think from a leadership perspective we really have an issue.
We are always going to bring new people in with the skills that we need.
When you look at what's in front of us, obviously light rail is going to be important, so we're going to need rail expertise.
As I mentioned, there's going to be a lot of bridge work, so we're going to need some bridge expertise.
I feel pretty good in being able to bring those folks on as necessary.
We'll clearly add, be additive to that.
I don't see a capacity issue.
We have added ---+ when you think about the resources from the two nukes and Stork, we're over 60,000 employees now.
I still believe we're the employer of choice, given our ability to retain people.
I think that we can move ---+ we're going to reallocate resources around the globe.
I think our dispersed model is working, and showing that we don't need to hire and fire like the normal cycles that have dictated in the past.
I point to Houston as an example.
It's been as high as ---+ at least in the last little while ---+ as high as 4,800 people.
It's around 2,800 people now, and it has been for 2.5 years, three years.
We don't expect it to drop much more than that.
Again, some of the things we've done to perfect the dispersed execution model I think gives us a lot more stability in the ---+ across the portfolio, but it also shows that when we need to turn the crank, we can bring in the people we need, almost regardless of how big we need to be.
So do I.
No, I don't think so.
I've said this in previous discussions with some of you.
I lived in Saudi Arabia in the 1990s.
I remember 1997 oil was $17 a barrel, up from $11.
Even though oil is in the places to where it's more difficult to get to than maybe then, they were still ---+ Saudi Aramco was still spending $30 billion a year, right.
They're still going to spend at $40 and $50 and $60.
They don't need to get back in most cases to peak for them to be efficient and profitable.
I don't think we need to re-tool any more than we've already re-tooled.
I think the things that we've done to become more competitive and satisfy that capital efficiency need by our customers puts us in a position to be extremely robust and profitable as we go into the next wave.
Yes, it's not a high-revenue type company.
It's basically service revenue, people.
You're not going to see a huge bump in revenue, but I think you will see some good bumps in profitability.
The short answer is absolutely, we're already seeing opportunities that arise that maybe we didn't have access to before.
I think that the fact that Stork is owned by Fluor now gives customers confidence that they are there for the longer term.
There might have been some question before in terms of their viability.
We're seeing great response from the customers in terms of their interest in hiring Stork, and we're in some markets where Fluor physically wasn't present, that helps Fluor in those geographic regions.
There's lots of head room, I believe, in the US Gulf Coast.
When you look at the installed capital base in the Gulf Coast, it's a huge number of facilities and assets that need to be managed and need maintenance and modification, shut-down turn-arounds, those kinds of things that make Stork very attractive, in terms of their delivery model.
I think that we just scratched the surface.
I think there's great growth opportunity for that segment of the business.
Just anecdotally, as soon as the transaction was announced, Stork management had incoming phone calls from their customers saying great now that you're going to be a part of Fluor, we would like you to propose on doing this, or increasing your scope for that.
Clearly, there's benefits associated with the two companies being together.
No, it's a good question.
We've seen this before, and we certainly see it now.
I would argue that it's a huge mistake, because typically those people don't do the types of services that we do.
We've got real examples where that has happened in terms of FEED projects in oil and gas in previous cycles, and not that long ago, where they had people available, so they said well let's let them do the FEED.
Then they came to us to actually re-do the FEED, because the answer that they got was too expensive and not the right schedule.
They probably don't like to hear me say that, but we are really good at those kinds of things, and they are really good at producing product.
We're better positioned, our industry's better positioned to do those kinds of things.
But they've got pressures that they've got to deal with in terms of employment.
Some cases, they can't ebb and flow like a Company like ours can, and we understand that.
We'll be there to help them when they need it.
The $140 million is scheduled for ---+
Later in the year.
Third quarter
Most likely third quarter.
It will be recorded as an investment in a joint venture, as opposed to a capital expenditure.
Other than that, there is no other planned capital, other than I mentioned the $300 million roughly of CapEx that we expect in the more normal course, over the course of the year.
That may (inaudible - multiple speakers) side, but that's the only other thing that we're considering at this point.
No.
I mean, it's always going to ---+ there's always going to be timing events, but I expect the relationship between working capital and earnings and therefore cash flow and earnings to be pretty consistent with what it has been in the past, absent little movements of time, where something comes in before or right after a quarter end.
<UNK>, how do you feel about your draft choices.
(laughter)
We hope so.
Well, we're not going to really talk about it.
But it's the kind of thing that all companies are dealing with, and it's kind of a one-off thing.
Thank you.
Thank you, <UNK>.
Thank you, operator, and thanks to all of you for participating today.
As I said in the opening remarks, and certainly in the Q&A, we continue to see that low commodity prices are driving customers to extend projects and delay FID decisions based on cash flow.
This, I think coupled with a little bit slower pace associated with some of the larger projects we have won over the past couple of years, and the long-term O&M contracts we've recently put into place in infrastructure and others, have a slower burn, but provide I think a more stable revenue trajectory.
The revised 2016 guidance range reflects I think this reality.
While our capital structure is sound and our cash flow generation remains robust, we remain disciplined in how we use our cash, and will continue to do so as we look at lowering our cost of business and internal costs associated with it.
Finally, we continue to invest for the long term.
As you've seen with our recent investments in the fab yard and certainly Stork, it positions our Company to not only take care of ---+ capture market share in the traditional markets, but it also allows us to show growth in some of the longer-term aspects of our business.
With that, we greatly appreciate your interest in Fluor, and your confidence in our Company.
Thank you, and have a good evening.
