2018 Investor Day - Seeking Alpha

© 2018 Fluor Corporation. All Rights Reserved.Fluor is a registered service mark of Fluor Corporation. November 16, 2018

2018 Investor Day

22018 INVESTOR DAY© 2018 Fluor Corporation. All Rights Reserved.Fluor is a registered service mark of Fluor Corporation.

Jason LandkamerDirector, Investor Relations

OPENING REMARKS


Safe Harbor StatementThis presentation contains forward-looking statements concerning the expected financial performance of Fluor Corporation and its subsidiaries (“we,” “our” or the “Company”) and the Company’s strategic and operation plans, including statements about our projected earnings level, expenses, market outlook, new awards, backlog levels, and client capital investments. Words such as “believes,” “expects,” “anticipates,” “assumes,” “may,” “positions,” “looking ahead,” “views,” “think,” “target,” “trend,” “can,” “appears,” “estimates,” “should,” “prospects,” “outlook,” “guidance” or other similar expressions often identify forward-looking statements. Such statements are based on current management expectations as to what may occur in the future. Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Investors are cautioned not to place undue reliance on the forward-looking statements included in this presentation, which speak only as of the date hereof. The company disclaims any intent or obligation, other than as required by law, to update this information in light of new information or future events. Additional information about potential risk factors that could affect the Company’s business and financial results is included in our Form 10-K filed on February 20, 2018.


Agenda8:00 Welcome Jason Landkamer8:05 HSE Topic: Safer Together Marc van Heyningen8:10 State of Fluor Today David Seaton8:30 Value Creation Topic: Lump Sum Projects Rick Koumouris8:50 Global Sales Overview and Outlook Jose Bustamante9:10 Finance Overview Bruce Stanski9:30 Introduction to Project Governance Jim Brittain

10:00 Break10:20 IBM / Watson Overview and Demo Ray Barnard10:40 Data-Driven Execution Matt McSorley11:05 Project Review: LNG Canada Phil Clark11:15 Project Review: Quellaveco Craig LaFortune11:25 Q&A Fluor Management11:55 Closing Remarks and Adjourn David Seaton


Marc van HeyningenVice President, Health, Safety, and Environmental

SAFER TOGETHER


2015

2013

2003

1994

2017

Our Safety Journey


Safer Together: Fluor’s New Safety Initiative

Embodies our commitment to a caring, preventive safety culture.

Increases worker and leadership engagement.

HSE site standardization: sites look, feel, know and do the same.

Share high severity near miss incident learnings

Celebrate safety successes and recognize teams

Safer Together


Safer Together Project Adoption


David SeatonChairman & Chief Executive Officer

STATE OF FLUOR TODAY


The Fluor Journey So Far


State of EPFCM - Circa 2010

SRA Model• Limited dispersed execution

• Project data not leveraged

• Siloed approach

0%

20%

40%

60%

80%

100%

1995 2002 2009

Mostly U.S.

ICA Fluor Yards only

SRAHolder

FLUOR

Client

ConsultingServices

SupplierIntegration


What We Knew in 2011

Fluor margins not sustainable

Client expectations increasing

More competitors, more sophisticated

Super cycle coming to an end


Business Transformation Initiative

Lump Sum Execution Supply Chain Self Perform

ConstructionMarket

Platforms

Themes

Differentiators

Project Execution

Supply Chain

Attack the Markets

Commercial Model10 S

olut

ion

Team

s

Data as a Strategic Asset

Forging the Workforce of

Tomorrow

Strategic Client Service

Excellence

Branding for Value

Enablers Org./InfrastructureCore Business

Organize for the Future

Drive up Corporate Value


What We Didn’t Know in 2011

Rise of populismLength of down

turnCommodity price

collapse Poor Execution


Successful Business Transformation

3rd Gen ModularICA-FluorCOOEC-Fluor JV

Other

Improved dispersed execution Predictive Analytics Data-Centric Execution Zero Base Execution

New Leadership Cost-Focus Commercial Strategies

Self-Perform Construction Elite Craft Corps

Acquired StorkOne Fluor Business ModelOrg Restructure Reduced Overhead

Significantly


Goals


How we get there

Take Advantageof Markets

ImproveExecution

Capital andCost Discipline


Market Contracting Trends (reimbursable/lump sum)

North America 70/30Industry

Reimbursable/Lump Sum

Upstream 50/50Downstream 75/25Chemicals 25/75Mining 80/20Infrastructure 5/95LS&AM 60/40Power 5/95Government 80/20Latin America 60/40

Middle East / Africa 10/90

Australia 60/40

Asia 5/95Europe 60/40


Rick KoumourisGroup President, Mining, Industrial, Infrastructure, & Power

SELECTIVITY, RISK, AND LUMP SUM PROJECTS


Before We Start….. History shows that a “Bad Lump Sum (LS)” struck at the outset greatly diminishes the

probability of a project meeting stated expectations “Bad LS” – unrealistic/incorrect estimates, flawed/incomplete execution plan, inadequate

identification of risks, unbalanced contract, unachievable commercial model However, well structured “Good LS” can also fail due to poor execution, lack of

governance, poor change management or poor decision making Increasing the success rate of LS projects Fluor takes on;

Psychology & Risk – Biases and Implications Lessons from our Past – What can we learn from “Good LS” vs. “Bad LS” Selectivity – Early sorting of the “Good” from the “Bad” Risk Identification and Management – Making the “Good” better Project Execution Governance – Delivering the As-Sold Expectations


Beware the Biases

Forms of BiasOptimism Confirmation Anchoring

Overestimate probability of success

Emphasize data which confirms what we

want/believe

Different biases can exist in different parts of the chain of

command

Remedies include:

• EPHD “Watson” insights to challenge

• Use of similar class data/history

• Awareness of bias (and self awareness)

• Use “similar class” data to challenge

• Wary of anecdotes• Awareness of Bias

(Groupthink)

• “Must Win” or “Strategic” -when communicated from leadership has implications for risk appetite

• Awareness (and self awareness) of unintended messaging

Awareness of the distinction between “risk intelligence” and “risk appetite” when discussing risk


Good Lump Sum vs. Bad Lump Sum

The notion that all LS contracts are inherently “bad” is unsupported, and counterproductive, as our markets are increasingly moving towards LS

“All happy families are alike – each unhappy family is unhappy in its own way.” ~ Tolstoy

History shows that successful LS contracts share the same underpinnings “Good LS”– High definition baseline documents including a balanced contract, a thorough risk

plan with fair risk adjusted commercials executed in accordance with the contract “Good LS” provides a highly probable path to success for a qualified team


Good Lump Sum vs. Bad Lump Sum

Segmentation analysis of major LS EPC/CM projects from 2007 with the aim of identifying symptoms or early cautions

Segments: Process technology FEED Competitor type

Goal of identifying correlation between success/failure and segment


LS Analysis (2007 – 2017)

Process TechnologyNew

16%

SUCCESS RATE

65%

Existing

FEEDNo FEED/ FEED by other

52%

FEED by Fluor

Competitor TypeOther

67%

Like Fluor

80%

100%


LS Analysis (2007 – 2017)

What does the analysis tell us? We had more success with proven process technologies We had greater success with FEED by Fluor We had better project outcomes when bidding was limited to like peers

How do we increase performance of LS projects? Selectivity Project Risk Management Project Execution Governance


Annual Strategic Plan update confirms continued participation in Segments (or entry or exit) Market/Segment Reviews focused on

Size of segment – does it offer sustainable revenues/margins? Competitive landscape – why will we win? Do we have a differentiator for that segment (or a

path to one)? Risk/Reward – Can we meet our aspirations in this segment?

Which Segments (Country, Region, Industry, Client, Commodity, Facility Scope, Services, etc.) Or meaningful intersections of segments (e.g. transit projects/USA or iron ore

projects/Australia/tier I ) Recent examples of segment selectivity decisions include:

Life Sciences added Advanced Manufacturing Segment in 2017 – data centres, composite materials

Power exited gas fired segment in 2018 Mining added underground design expertise

Market Selectivity – Which Segments?


Established process and criteria (and Approval Matrix) to evaluate which projects to Pursue or Not Pursue, and Bid or Not Bid (BnB)

Key Questions How probable or real is the opportunity (The “Go”)? Are we familiar with Client, Scope/Technology and Region? Is there an opportunity consistent with Strategic Plan Segment Selectivity (Will do/Won’t

do) - if not why is it so compelling? Regarding the competitive landscape and do we have a compelling solution and proposition

(The “Get”)? Can we meet our (risk adjusted) commercial aspirations?

Project Selectivity – Which Projects?


Project Risk Management

Begins with having complete, credible and prescriptive baseline documents Defined Scope of Work - Execution Plan - Schedule - Cost estimate (and supporting

design definition) - Clear understanding of our and owner’s obligations (contract) A Commercial/Pricing model which clearly shows how and where we make money

Starting point to begin the process of risk identification and quantification

Ongoing, consistent & methodical status review of each risk element and the aggregate risk register to continuously inform project status


A consistent monthly review of the status of our projects

Established Project Status Review (PSR) and prescriptive documentation which has evolved over decades

PSR- objective, accurate, and timely information- informs proposed mitigating actions when needed

Success hinges on methodical and disciplined reviews

Inclusion of Watson insights allows for elimination of bias

Project Governance


Selectivity to drive Coverage (Margin + Contingency) upwards

Risk Management & Governance to eliminate Leakage

What results do we expect?

2015 2016 2017 2018

Cove

rage

Rat

io

Improving Coverage Ratio


Our imperatives are to deliver capital efficiency & certainty of outcomes to our Clients

Capital efficiency Application of Integrated Solutions (IS) is the path to capital efficiency for our Clients

Certainty of outcomes Market Selectivity points Fluor to where IS can add most value for Clients and Fluor Project selectivity & risk management ensure we pursue & structure “Good LS” Integrated Solutions and execution governance increase the certainty of outcomes,

for Fluor and for our Clients

Today and The Future


Jose BustamanteExecutive Vice President, Business Development & Strategy

GLOBAL SALES OVERVIEW AND OUTLOOK


New Awards & Backlog

$37.6

$32.9$30.9 $29.1 $29.3

$34.9

2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18

$3.2$3.8

$3.2$2.5

$5.4

$9.6$8.5

2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18

BACKLOG ($B)NEW AWARDS ($B)

*

*LNG CANADA AS OF NOV 1ST


Fluor Market Cycles

Accelerating Growth

Decelerating Growth

AcceleratingDecline

DeceleratingDecline

Chemicals

Downstream

Government

Pipelines

Infrastructure

Power-Renewables

Life Sciences

Upstream

LNG

Power-Fossil

Adv. Mfg/StaffingConstruction Equip

Copper

Offshore

Iron Ore

SustainingCapital


Energy & Chemicals

Focus AreasLNGChemicalsDownstreamUpstreamOffshorePipelines

Market Growth

8%

15.1

19.8

2017A 2018 YTD*

Backlog ($B)

4.0

10.3

2017A 2018 YTD*

New Awards ($B)

0

20

40

60

80

100

120

140

2014 2015 2016 2017 2018

Brent Crude Price ($USD/bbl)

Source: Thompson Reuters

*includes LNG Canada (4Q booking)


Mining, Industrial, Infrastructure and Power

Focus Areas Copper Iron ore Pot ash Bauxite/Alumina Biotechnology

Market Growth

5%

9.6

16.5

2017A 2018 YTD

Backlog ($B)

4.0

10.3

2017A 2018 YTD

New Awards ($B)

Advanced Materials Transportation Renewable Energy

Mining Cycle Duration

Infrastructure Investment

Industrial

100

150

200

250

300

2015 2016 2017e 2018f 2019f 2020fSource: ARTBA

US Transportation Market ($B)

40

60

80

100

2014 2015 2016 2017 2018Source: US Census Bureau

US Manuf. Construction Spend ($B)

Source: Bank of Canada


E&C and M&M Capital Expenditures

100

150

200

2017A 2018E 2019E

Energy & Chemicals ($B)

50

100

2017A 2018E 2019E

Mining & Metals ($B)

Source: Bloomberg, Fluor internal estimates

Largest IOC’s & Mining Clients


Diversified Services

Focus AreasMaintenanceConstruction equipmentProject staffingAsset integrity

Market Growth

2%

2.52.0

2017A 2018 YTD

Backlog ($B)

2.01.3

2017A 2018 YTD

New Awards ($B)

Billings

Rental Equipment

40

45

50

55

60

Aug-17 Nov-17 Feb-18 May-18 Aug-18

Source: AIA

AIA Billings Index

0

25

50

75

2017 2018 2019 2020 2021 2022Source: American Rental Association

Construction Rental Equipment ($B)

75

100

125

150

2017 2018 2019 2020 2021 2022Source: Oxford Economics

Global Construction IndexConstruction


Government

Focus AreasNuclear securityEnvironmental

managementIntelligence communityContingency operations

Market Growth

3%

3.85.1

2017A 2018 YTD

Backlog ($B)

2.64.1

2017A 2018 YTD

New Awards ($B)

U.S. DOE

U.S. DoD

400

500

600

700

FY15 FY16 FY17 FY18 FY19 FY20Source: US DoD Budget Requests

DoD Funding ($B)

0

10

20

30

2014 2015 2016 2017 2018Source: US Treasury

US DOE Budget Outlays ($B)


Key Differentiator : Integrated SolutionsStrategic advantage of fabrication and construction self-perform capabilities

Enable integrated EPFC

execution

Provide control over full schedule

Capture margin from additional

services

Eliminating interface risks


COOEC-FLUOR Heavy Industries (CFHI)


Scope Value Progression

Engineering only

EP & Fabrication

EPF & Construction

EPFC + O&M

ControlServ

ices

Additional Margin Streams

Cost &Schedule Certainty

E & Procurement

Earn

ings

Earn

ings


Bruce StanskiChief Financial Officer

FINANCE OVERVIEW


Three Main Financial Focuses in 2019 and Beyond

Deliver onour promises

ControlCost

GenerateCash


Committed to meeting or exceeding expectations Re-establish consistent track record / focus on predictability Leverage investments in technology and innovation Capitalize on concurrent market up cycles Deliver excess capital to shareholders

Deliver On Our Promises


Early in projects we recognize less profit than we would have under the old revenue recognition standards

But as projects continue we will take more profit which elongates the earnings cycle

Revenue Recognition

10%3%

37%

17%

32%

31%

10%

26%

8%

17%

3% 6%

Old Rev Rec New Rev Rec

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

ENGINEERING CONSTRUCTION

Profit Split by Year (Old vs. New Rev Rec)

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Old Rev Rec PGM New Rev Rec PGM


Peak Margins by Segment

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

Government

Diversified Services

MIIP

E&C

Typical Segment Margins Peak Segment Margins

8.0% - 9.0%

6.0% - 7.0%

5.5% - 6.5%

3.5% - 4.0%

PEAK MARGINS


Action Item Commitment

Reduce NuScale spend • Reduce 2019 spend to $40MM from $75MM in 2018

Exit marginal businesses• Exited U.S. lump-sum gas-fired power business in 2018• Reduced exposure to offshore wind development

(Sale of Seagreen)• Aggressively manage exposure to non-core end markets

Monetize investments• Focus assets on highest return end markets• Drive new earnings streams• Leverage Global Execution Centers• Benefit from prolonged OpEx cycle via Stork

Manage corporate G&A expense • Corporate G&A expense is in-line with revenue

Control Costs & Investments


While Fluor guides to $50MM in G&A each quarter, there is a lot of variability in that number Normalized corporate G&A has moved in-line with

revenue

Compensation is incentive based

Nonrecurring expenses include FX, pension expenses, and restructuring costs

Expenses in 2018 include select early cycle investments in technology, training, and project execution standardization

Control CostCorporate G&A Expense

$61$49 $48

$102

$90 $78

$28$53

$14

2016 2017 2018 YTDOverhead Incentive Compensation Nonrecurring Expenses


Fluor has been committed to square footage reduction and efficiency Since 2015, Fluor has reduced its major office real estate

footprint by over 500 thousand sq. ft. Planned and committed reductions will reduce footprint

by an additional 21%

Average sq. ft./seat has been reduced by 11% while seating capacity has remained flat for offices that have been densified

In down cycle we shed real estate, in up cycle we leverage efficiency Over next three years, we expect to increase revenue per

square foot by approximately 45%

Optimize Real Estate Footprint

$3.7

$2.9

$2.4 $2.6 $2.7

$2.9

$-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

2013 2014 2015 2016 2017 2018YTD

Major Office* Revenue per Sq. Ft. (in $M)

*Includes 22 of our largest offices


Focused on driving available domestic cash to $1B Participate in Public Private Partnership (PPP)

investments Fund our share of joint ventures Look for strategic niche M&A opportunities Return capital to shareholders Able to quickly deploy cash as needed

− In Puerto Rico, Fluor was able to use available cash to restore power after Hurricane Maria; this cash is returned with earnings

Generate Domestic Cash

(250)

(200)

(150)

(100)

(50)

-

50

100

150

200

Puerto Rico Cash Flow ($M)

Cash Inflow Cash Outflow


No expected diversion of cash to fund loss position projects

Multi-market upcycles will increase net income and more quickly grow cash balance

Cash advances on fixed price projects stay with the project

Maintain cash balances in locations of future cash uses (projects)

Improve flow of project working capital balances through better alignment of contract and supply chain terms

Maintain Cash Discipline for Projects


Effective utilization of capital structure to invest in projects that meet a high return criteria

Investment decisions are made independent of business line desire to pursue EPCM bid

Currently have over a dozen open investments

Average return for all investments is 31 percent

Equity Investment Returns

0%

20%

40%

60%

A B C

IRR for Significant Investments

Target IRR: 20 – 40%


Cost Profile – Typical Fluor Project

Values shown are illustrative, actual results vary.

Direct & Indirect Project Cost 92.9¢

Client FurnishedMaterial

Engineering Labor

Fabrication Materials OtherConstruction Labor

Sub-contracts


Cost Profile - Traditional SolutionDirect & Indirect Project Cost 92.9¢


Engineering Labor


Sub-contracts



Cost Profile - Integrated SolutionsDirect & Indirect Project Cost < 92.9¢


Engineering Labor


Sub-contracts



Jim BrittainGroup President, Energy & Chemicals

PROJECT GOVERNANCE


Project Governance = Project Predictability


Project Governance Focuses on both "Bid Governance" & "Execution Governance" Established Office of Project Management & Execution Governance (PMEG)

Established criteria for higher risk project along with additional governance (Deep Dive Red Team Review, Watson Analytics, The Historian)

Revised Bid-No-Bid, Approval Matrix and Review Requirements for Bids

Prime Contract Manager

Need for Change


Project Governance In Action (Watson Analytics) Challenges On Recent Project Pursuit

European Refinery Project with multiple locations Greenfield & Revamp Works

Aggressive Schedule with schedule completion LDs EU Construction Cost Risks – performance reliant on

cost and schedule of subcontractors Condensed Pre-FEED / FEED and Early EPC works

already ongoing (site prep, piling, TF)

Project Governance Results from Red Team Review developed de-risked pursuit model Schedule Risk Analysis of critical path performed

and analyzed for engineering in support of 1 pass engineering and early procurement schedule added to dead band

Revised early works strategy Developed low risk early procurement strategy Adjusted construction strategy, Tier-1

Construction Contractors and Integrated Construction Subcontractor Partnership

Changed execution Model – Stork self perform construction

Revised risk / reward execution model


Fluor developed Advance Work Packaging by integrating Construction Driven Execution Concepts early in the project cycle

Fluor’s Integrated Solutions Model makes it possible to merge deliverables and eliminate duplication of effort

Supported by Fluor’s tools and systems

Starts in Home Office and delivers to Field

AWP increases productivity by delivering constraint free Installation Work Packages

Demonstrated 15-18% Cost Savings

Governing Construction - Advanced Work Packaging

AWP/WFP Implemented on 18 Projects


Project Governance In Action – Advance Work Packaging Large Marque Project Challenges On Recent Project

Large scale mega Upstream Project Scope -Engineering, Procurement & Construction Management

Reimbursable Contract Challenging logistics Labor shortages

Project Governance - AWP Client visited Canadian project site to witness

AWP in action and implementation on project Provide sub-contractor access to Fluor tools &

systems to prepare IWPs Target of 90 days of constraint free work

packages available at all times ~10,000 IWP released (~30,000 total) ~12,000 constraints removed early Tool time increased by 10% Increased productivity by 25% Field productivity >1.0 Reduced cost by increased productivity,

minimized delays and avoided rework


Brings all aspects of Fluor’s offering together in one solution to provide: Single-point responsibility – FEED through EPFC Continuity from engineering to fabrication to construction site Minimized interfaces Maximum accountability High Productivity High Quality Improved Safety Full control to improve cost

and schedule certainty

Fabrication - Creating Execution Certainty

Engineering

Procurement

Fabrication

Construction


COOEC – Fluor Heavy Industries Fabrication Yard

2018 Fabrication CFHI Yard Metrics Safety significantly better than industry avg.

>6,000 MT Steel / month

>45,000 piping welds / month

~2% Weld reject rate

~1% Structural steel reject rate

~4% Pipe reject rate


LNG Canada


Project Governance = Project Predictability

© 2018 Fluor Corporation. All Rights Reserved.Fluor is a registered service mark of Fluor Corporation. November 16, 2018

Break


Ray BarnardExecutive Vice President, Systems & Supply Chain

IBM / WATSON OVERVIEW


Leveraging Fluor domain expertise together with IBM T.J. Watson Research Center to create two proprietary predictive analytics systems EPC Project Health Diagnostics (EPHDSM) powered by Watson Market Dynamics / Spend Analytics (MD/SASM) powered by Watson

Deliver value from proposal through execution phases Innovation leading to Strategic Competitive Advantage First of their kind systems in EPC industry Meaningful and actionable business insights Rapidly predict best-in-class pricing globally, project status and outcomes, and

improves quality and services Thousands of sophisticated mathematical data analytics models leveraged

Vision


ValueEPHDSM

Deliver fact based insights and early warning indicators on project performance

Predict issues such as rising costs or schedule delays based on historical trends and patterns

Identify the root causes of issues and the potential impacts of changes as input to the decision-making process including estimate analysis, forecast evaluation, project risk assessment and critical path analysis

Drive more certainty into project schedules and costs for our clients

MD/SASM

Leading edge tool providing supply chain insight and precise estimates

Sourcing and negotiation strategy Showcases market trends for key raw materials

and potential opportunities and risks for timing of purchases

Validate and benchmark current pricing trends against data from multiple projects and identify most competitive suppliers globally

Combines historical and current pricing on materials to predict future prices by incorporating raw materials, currency, and market intelligence

Incorporates project specific requirements such as sourcing country, suppliers, etc.


2015 Data collection

Semantic data modeling

Fluor ontology Correlation

analysis Predictive

models 1st Engineering

deep dive

2016 Descriptive

analytics EPHD user

interface Diagnostic

Neural Network (DNN)

Improved data quality and data collection

2017 Executive

dashboard Automated

standard story Sr. executive

reviews Expert driven

predictive models 1st Construction

deep dive Tail end

engineering prediction models

2018 Project Health

Monitor control system (PHMcs)

Cognitive interface to EPHD

Enhanced data visualization and descriptive analytics

Feature bundle/belief network

“Watson” best fit selection

EPHDSM Timeline

Note: Italicized items are under development


EPHDSM Metrics

New EPC and EPFC projects being added as engineering starts General criteria:

− Projects over $500 million in Total Installed Cost (TIC)− E&C, Power and Mining− Will expand criteria to include additional business lines and TIC values


MD/SASM Timeline20

15 Data collection

2016

2017

2018 Material

Market Bulletin (MMB) Equipment &

Materials• Pipe• Steel• Vessels• Pumps• Fittings• Flanges

Equipment & Materials• Valves (manual

& automatic) Stick-built

Contracts Modules

• Pipe Rack• Process Logistics

Storyboard access to Lump Sum projects Executive

Dashboard Equipment &

Materials• E&I • Other

mechanical categories

Note: Italicized items are under development


In The Future… “Construction” Continues on EPHDSM

Evaluate potential construction execution analytics (CEA) viability – congestion modelingCost prediction models validation/testing

Belief network/feature bundle predictive modelingMulti-modal Cognitive user interface (UI)Continue expansion of descriptive analytics and UI

PM Forecast monitor and Hierarchical Prediction ModelHigher order “Watson” AI


IBM / WATSON VIDEO


YESTERDAY’S KNOWLEDGE

TODAY’S INTELLIGENCE

BETTER TOMORROW


Matt McSorleyExecutive Vice President, Project Support Services

DATA-DRIVEN EXECUTION


Lack of investment in R&D and IT/Data Solutions

Engineering output/hour has lagged other industries

Construction productivity is flat or decreased over the last 40 years

Limited focus and no consistency of data

Challenges with project predictions

Engineering & Construction Industry

Significant opportunity to differentiate Data provided by McKinsey


Inconsistency of data causes: Inability to estimate accurately Challenges with forecasting Excessive hours spent in project set up and data

scrubbing Inability to compare projects Difficulty using systems to perform data analytics

Industry issue driven by different markets and Clients

Focus on the right data and not all dataDecisions made with accurate historical data…not

opinions

Data-Centric Execution


Unison is an integral part of Fluor’s drive towards data-centric execution. It is data standardization, consistent work processes and the capture and application of historical data to achieve accurate forecasting for more predicable project outcomes.

UnisonSM

Unison is not a tool or software, it is a new way of working


UnisonSM is About the Data…


Linked with standard systems:

Execution Responsibility

Quantification

Material Pricing

Subcontract Management

Engineering Data Maturity

Document Control

Scheduling

Project Controls & EstimatingName System

The Mobilizer Project Personnel Management

The Administrator Project Controls Data Management

The Projector Project Financial Forecast Generator

The Coordinator Change Management

The Resourcer Project Staffing & Utility System

The Generator Services Cost & Revenue Generator

The Tracker Planning & Progress

The Estimator Conceptual & Detailed Estimating

The Forecaster Capital Cost Forecast

The Reporter Business Intelligence Reporting


Quality – The right data, context, accuracy, format, place and purpose

Standards – Identifies reference and master data attributes with one set of definitions and usage

Stewardship – Manages data assets and enforces policies

Practices & Work Instructions – Data modeling, naming, retention, quality and security

How Is Data Being Governed?“…the overall management of the availability, usability, integrity and security of the data employed in a project.”


Phil ClarkSenior Vice President Project Director LNG Canada

PROJECT REVIEW:LNG CANADA


Shell (40%), PETRONAS (25%), PetroChina (15%), Mitsubishi Corporation (15%) and KOGAS (5%)

Phase 1 (Trains 1 & 2) Lump sum EPFC contract Reimbursable start-up support

Limited Notice to Proceed Received June 1st Incorporated JFJV bid enhancements into FEED

package LNTP period requested by Fluor to update project

baseline Excellent internal & client relations and working

relationships developed Commenced engagement with First Nations, local

community and key contractors

FID achieved October 1st Full Notice to Proceed received October

30th Mobilizing to site for:

− Early works & site establishment

− Establish a community footprint

Phase 2 (Trains 3 & 4)− Client has option to award Phase 2− Initial study has been released

LNG Canada Project – Project Facts


Strong JGC Fluor JV partnership JGC Corporation− Involved in more than 50 LNG trains

globally − Third of the world’s LNG trains Fluor Corporation− 70 years of Canadian project experience− Innovative modularization − Self-perform construction experience− Executed the world’s largest projects in

remote locations like Kitimat

LNG Canada Project – Why JGC Fluor Joint Venture?


Project Milestones

2018 Before mid decadeMajor Recruitment/ Employment


LNG Canada Project – Start to Finish!

Project Siteapprox. 1,100 acres


Craig LaFortuneSenior Vice PresidentProject Director, Quellaveco

PROJECT REVIEW:QUELLAVECO


Anglo American (Owner) Headquarters in London, UK

− Listed on London & Johannesburg stock exchanges− Established in 1917

Mining Operations in South Africa, North/South America & Australia Produce Diamonds, Copper, Platinum, Coal, Nickel and Iron Ore 69,000 employees worldwide

Project partner is Mitsubishi (40%)

Quellaveco


One of the world’s largest undeveloped copper resources, located in the Southern Region of Peru

127,500 tons of ore per day

Proven grinding / flotation process

Extensive Feasibility Study finished Feb 2018

Full investment decision Aug 2018

Investment Value is 5+ Billion USD

First Ore is in 2022

Quellaveco


Why Fluor? Strong presence in South America Extensive experience with the

project Excellent credentials (e.g. CV1/2) Strong Project Mgmt. Team Senior Mgmt. Relationships

Fluor Services Engineering

− Multiple Offices Procurement Construction Management and Pre-

Commissioning Reimbursable contract with

incentives

Quellaveco and Fluor


High Mountain Vizcachas Dam and 96km Water Pipeline

Mine Area Asana Diversion System, Primary Crushing,

Overland Conveyor and Truck Maintenance

Plant Area Grinding, Flotation, Filtration

Tailings Starter Dam, Cyclones, Launder / Tunnels

Infrastructure Roads, Power Supply

Project Details


High Mountain


Mine


Plant


Q&A


David SeatonChairman & Chief Executive Officer

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2018 Investor Day - Seeking Alpha

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Transcript of 2018 Investor Day - Seeking Alpha