Fluor : 2021 Strategy Day Presentation

Fluor Strategy Day 2021

Fluor Strategy Day

January 28, 2021

© 2021 Fluor Corporation.

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Safe Harbor Statement

This presentation contains forward-looking statements concerning the expected financial and operational performance of Fluor Corporation and its subsidiaries ("we," "our" or the "Company") and the Company's strategic and operational plans, including statements about our business prospects, strategic and operational initiatives, project management, and projected earnings, revenue, proceeds, margins, expenses, expense reductions, market outlook, new awards, and backlog levels. Words such as "believes," "expects," "anticipates," "assumes," "intends," "plans," "will," "may," "should," "positions," "looking ahead," "views," "think," "target," "trend," "can," "appears," "estimates," "prospects," "outlook," "guidance" or other similar expressions identify forward-looking statements. Such statements are based on current management expectations and involve risks and uncertainties, known and unknown, which can cause actual results to differ materially from the Company's expectations and projections. Factors that could cause actual results to differ materially include, among other things, the cyclical nature of many of the markets the Company serves; the Company's failure to receive new contract awards; cost overruns, project delays or other problems arising from project execution activities, including the failure to meet cost and schedule estimates; failure of our joint venture or other partners, suppliers or subcontractors to perform their obligations; client delays or defaults in making payments; risks or uncertainties associated with planned dispositions, including factors affecting the ability to realize anticipated proceeds or dispose of associated liabilities; asset impairments; and unanticipated expenses arising from restructuring activities. 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 September 25, 2020 and our reports on Form 10-Q filed on October 22, 2020, November 12, 2020 and December 10, 2020.

During this presentation, we may discuss certain non-GAAP financial measures. Reconciliations of forward-lookingnon-GAAP financial measures are not available due to the inability to reliably estimate the amounts of items excluded from such measures, which may be significant.

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Fluor Strategy Day 2021

Sustainability Leadership at Fluor

Al Collins

Fluor Strategy Day 2021

© 2021 Fluor Corporation.

Sustainability Leadership at Fluor

• Comprehensive sustainability program
• • Community
  • Environmental
  • Health & Safety
  • Supply Chain
  • Employees & Workplace
  • Ethics and governance
• Report annually since 2008
• History of awards and recognition

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Fluor's role in Sustainability: past

	1983	1992	2008	2007 - 2012	2012 - 2014
	Photovoltaic	Carbon Capture	Biofuels Production	Polysilicon	Carbon Capture
			Facility		and Storage

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Fluor's role in Sustainability: 2013 - present

	2013	2014	2017	2018	2019
	Solar	Gas Sulphur Recovery	Clean Products	Tier 3 Emissions	Clean Fuels
			Upgrade	Reduction

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Fluor's role in Sustainability: future

Enabling reliable renewable energy

• Grid stability
• Scalability cost effectiveness
• Lithium-ionalternatives

Driving first wave of low carbon H2

• Pre-combustion
• Post-combustion
• Pyrolysis

Carbon to Value	Long duration	Waste to Energy	Hydrogen
energy storage

Converting CO2

• Valuable end products
• Alternative sequestration
• Piloting with Fluor CO2 capture IP on front end

Scaling innovation

• Waste and methane elimination
• Syngas / H2 production
• Carbon net-zero / net- negative

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Fluor Strategy Day 2021

Advancing Diversity, Equity

and Inclusion (DE&I)

Stacy Dillow

Fluor Strategy Day 2021

© 2021 Fluor Corporation.

DE&I - Four Impact Pillars

Champion		Recruit,	Enhance	Improve
an Inclusive		Develop and	Employee	Social Progress
Culture	1	Retain Talent2	Experience 3	and Impact 4

Q4'202 regional	United States
Inclusion Councils	and Australia

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DE&I Goals and Commitments

Increase women and diverse representation in leadership

US HBCU and HSI Sponsorship

$1 million over the next three years to select universities in support of Black and Hispanic STEM education

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© 2021 Fluor Corporation.

Agenda

Welcome	Jason Landkamer
Sustainability Leadership at Fluor	Al Collins
Advancing DE&I	Stacy Dillow
Opening Remarks	Alan Boeckmann
Building a Better Future	David Constable
Financial Strategy	Joe Brennan
Project Execution and Risk Management	Mark Fields
Urban Solutions
Infrastructure	Terry Towle
Advanced Technology & Life Sciences	Juan Hernandez
Mining & Metals	Tony Morgan
Mission Solutions	Tom D'Agostino
Energy Solutions	Jim Breuer
LNG Canada Project Update	Phil Clark
Summary and Q&A	David Constable

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Fluor Strategy Day 2021

Building a Better Future

David Constable

Fluor Strategy Day 2021

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Fluor's New Management Team

CEO

David Constable

Corporate Dev.	Project	Execution	Energy	Solutions	Urban	Solutions	Mission	Solutions	Corporate
& Sustainability
Mark Fields	Jim Breuer	Terry Towle	Tom D'Agostino	Functions
Al Collins
										 Finance
										Joe Brennan
										 Human Resources
										Stacy Dillow
										 Legal / Compliance
										John Reynolds
										 Information
										Technology
										Robert Taylor

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Building a Better Future by becoming the preeminent leader in professional and technical solutions

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Industry 4.0		Energy Transition
	and Urbanization

Mega

Trends

Beyond		Stakeholder
Globalization		Engagement

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© 2021 Fluor Corporation.

Industry 4.0	Fluor Opportunities

• Technical innovation
• Medical advancements
• Connected devices
• Artificial intelligence
• Automation and robotics
• Data-drivenprocesses

		Digital twin
Life sciences

Data centers	Artificial intelligence

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Energy Transition and Urbanization

• Population growth
• Resource scarcity
• Climate change
• Government policy

Fluor Opportunities

Energy efficiency	Biofuels / carbon capture

Efficient infrastructure

High demand metals

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Beyond Globalization	Fluor Opportunities

Populism
Trade barriers
Regionalization	Local supply chains	Reshoring manufacturing

Government intelligence

Mission support

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Stakeholder Engagement	Fluor Opportunities

• Investors
• Clients
• Employees
• Communities
• Governments

Energy transition		Sustainability

New ways of working	Technology expertise

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Fluor Strengths and Capabilities

World-Class Expertise

Engineering

Technology

Supply chain

Program management

Construction management

Global platform

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Near-term Market Outlook

Global Economy

Election Impact

 Recovery in second half of 2021

 Government policy expected to support energy transition and infrastructure

Commodities

 Strong price signals for mining, metals and chemicals

Data Storage

Growth Data storage and computing support growth in data centers

© 2021 Fluor Corporation.

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Fluor's Small Modular Reactor (SMR) strategy

• Sell down our NuScale equity in 2021
• Position for preferred project execution services

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Strategic Priorities

Drive growth

Pursue

Foster a high

Reinforce

across the

contracts with

performance

financial

portfolio

fair and

culture with

discipline

balanced

purpose

terms

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Strategic Priorities and Goals

Drive growth

across the

portfolio

70% of revenue from non- traditional oil & gas segments by 2023

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Strategic Priorities and Goals

Pursue

contracts with

fair and

balanced

terms

Backlog mix will be more than 75% reimbursable by 2024

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Strategic Priorities and Goals

Foster a high performance culture with purpose

• Improve employee engagement annually
• Increase women & diversity in leadership positions
• Net Zero in 2023

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Strategic Priorities and Goals

Reinforce

financial

discipline

By 2024

• Debt to capitalization ratio of 20 - 40%
• Return on invested capital of 20%
• Overhead reduction of $100 million
• EPS range of $3.00 - $3.50

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Fluor Strategy Day 2021

Financial Strategy

Joe Brennan

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Financial Strategic Actions

Restructure the balance sheet to produce sufficient free cash flow to support the go-forward business strategy

Improve	Lower debt	Renew line
of credit
Liquidity	to capitalization
facilities
	ratio

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Improve Liquidity

ACCOMPLISHMENTS TO DATE

Real Estate Sales

Reduced global real estate footprint by ~20%

P3 Monetization

Generated cash proceeds ~$20 million

AMECO Divestiture	Sold AMECO Jamaica in Q3 2020
Reduction of capital expenditures

Stork Divestiture

Sold EQIN (equipment rental) in Q3 2020

Overhead Savings	Achieved run rate savings of $100 million in
overhead savings in 2020

2021 EXPECTATIONS

• Realize $20 to $50 million
• Sell North American investments
• Received Letter of Intent for AMECO North America Q1'21
• Decision on AMECO South America
• Will be listed as discontinued operations
• Expect additional savings

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Lower Debt to Capitalization Ratio
		3Q 2020
	Shareholders' Equity	$1,592 M
	Debt	$1,734 M
	Total Capitalization	$3,326 M
	Debt to Capitalization Ratio	52%	2020 Shareholders' Equity is Q3'20
	actual ending balance

Shareholders' Equity excludes AOCI

Targeting debt to capitalization ratio below 40% by

reducing debt $300 - $500 million

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Renew Committed Lines of Credit

Outstanding Lines of Credit and Long-term Debt by Maturity Date (in millions)

$3,500 *

		Debt		Credit Facilities

		2016 notes	2014 notes				2018 notes
		1.750%	3.50%				4.25%
		€ 500	$500				$600
2021	2022	2023	2024	2025	2026	2027	2028

• Credit Facilities mature in February 2022 but will become current in February 2021

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Financial Targets

Achieve investment grade credit rating with both agencies

Reduce risk in backlog

Maintain cash balance

Reduce debt to capitalization ratio

Overhead reductions

ROIC Target

Earnings Per Share

• Cash flow leverage ratio (debt / EBITDA) less than 2.5
• Predictable profitability and higher returns
• 2021 cash balance above $2.0 billion
• Below 40% by 2022
• Targeting an additional $100 million by 2024
• 20% by 2024
• EPS range of $3.00 - $3.50 by 2024

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Fluor Strategy Day 2021

Project Execution and Risk Management

Mark Fields

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Pursuit Principles and Goal

Pursuit principles

• Clear understanding of scope
• Healthy relationship with our clients
• Fair and balanced distribution of risk

75% of our backlog will be

reimbursable by 2024

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Project Post-Mortem

Reasons for failure

Unverified third-party FEED package

Risk process not followed

Lack of fair and balanced contractual terms

Out-of-sequence execution

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Progress Toward De-risking the Backlog

Past Q3'19

Plan 2021

	Reimbursable		Reimbursable
	Cost	Fixed Price	Cost
Fixed Price	45%	53%
55%		47%

Goal 2024

Fixed Price

25%

Reimbursable Cost

75%

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Fixed Price Success Elements

• Align goals and interests
• Good client relationships
• Proven teams, experienced execution
• In-sequenceconstruction
• Fair and balanced terms

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Fluor Strategy Day 2021

Urban Solutions:

Infrastructure

Terry Towle

© 2021 Fluor Corporation.

Urban Solutions:

Infrastructure

Strategic Focus Areas

TRENDS

Energy

Transition &

Urbanization

Energy

Transition &

Urbanization

Stakeholder Engagement

• Aging highways costing $160B/year
• 30% of US bridges beyond their design life
• Urban growth of 51 million people
• Improved mobility and decreased road congestion
• Competitor risk appetite slowing
• Increase in failed procurement
• Coverage ratios increasing

Proven Highway Expansions

Replicate Texas Model

Diligence and

Selectivity

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Texas Region

13 projects

valued at $5.6B

Project	Contract
SH 130	2002
SH 161	2010
Horseshoe	2013
Bergstrom	2015
Southern Gateway	2017
Ennis Co 287	2017
IH 20	2017
SH 360	2018
US 77	2019
IH20 Duncanville	2019
IH 635 LBJ	2019
Grants Lane	2020
Oak Hill	2020

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Oak Hill Parkway

Austin, Texas

• Client: TxDOT
• Partner: Balfour Beatty
• Scope: Design Build with Warranty
• Project Description:
• • "Y" Project located 10 miles from ongoing 183 South project
  • 7 miles of additional lanes
  • Shared use path
  • Ponds, tree paths, aesthetics

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Fluor Strategy Day 2021

Urban Solutions:

Advanced Technologies & Life Sciences

Juan Hernandez

© 2021 Fluor Corporation.

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Urban Solutions:

Advanced Technologies & Life Sciences

Advanced Technologies		Advanced Manufacturing		Life Sciences

c

 Data Centers	 Fast Moving Consumer Goods	 Biologics
 Semiconductors	 Specialty Products	 Pharma
 Smart Batteries	 Advanced Materials	 Animal Health
	 Food and Beverage	 Medical Devices

Knowledge Based Solutions • Diversity • Innovation • Accessibility • Transformational Delivery

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Urban Solutions:
Advanced Technologies & Life Sciences	Strategic Focus Areas
TRENDS

	 On demand consumption of expert
Beyond	knowledge
Globalization	 Minimal risk of disruption
	 De-risking supply chains
	 Digitalization in manufacturing operations
Industry 4.0	 Improved reliability
	 Optimized life cycle costs
	 Consumer evolution
Stakeholder	 Health
Engagement	 Sustainability
	 Social responsibility

Global

Technology

Hubs

Deliver Knowledge- based solutions

Transform Execution and Delivery model

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Urban Solutions: Advanced Technologies & Life Sciences

Accelerating our strategic journey …

STRATEGIC GROWTH

IMPLEMENTATION

Key regional locations

• Establishing global technology hubs

Human		Investing, training, and empowering our people
Capital

Moving up the value chain

• Creating a new Professional and Technical Services Segment

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Fluor Strategy Day 2021

Urban Solutions:

Mining & Metals

Tony Morgan

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Urban Solutions:

Mining & Metals

TRENDS

Strategic Focus Areas

Energy Transition & Urbanization

Beyond Globalization

Stakeholder

Engagement

Industry 4.0

• Underground mining
• Battery metals
• Copper concentrators
• Safe jurisdictions
• Lower emissions
• Energy efficiency
• Sustainable practices
• Digital twin
• Automation
• Remote monitoring

Centers of

Excellence

Local Teams

Material

Handling

Digital

Mine

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Metals Required for Energy Transition

Solar

Al

13

26

29

82

28

14

30

Fe

Cu

Pb

Ni

Si

Zn

Aluminum

Iron

Copper

Lead

Nickel

Silicon

Zinc

Wind

Al13

Fe26

Cu29

Pb82

Zn30

Co27

Mn25

Cr24

Mo42

Aluminum

Iron

Copper

Lead

Zinc

Cobalt

Manganese

Chromium

Molybdenum

Electric

13

26

29

82

28

14

25

3

6

22

27

Li

C

Ti

Al

Fe

Cu

Pb

Ni

Si

Co

Mn

Vehicles

Aluminum

Iron

Copper

Lead

Nickel

Silicon

Cobalt

Manganese

Lithium

Carbon

Titanium

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Fluor Strategy Day 2021

Mission Solutions

Tom D'Agostino

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Mission Solutions

TRENDS

Beyond Globalization
	Advanced solutions
	Trusted partner
Industry 4.0	Talent/clearances
	Rapid response
	Community involvement
Stakeholder
Engagement

Strategic Focus Areas

Expand core; grow in complementary markets

Build digitally- enabled mission solutions portfolio

Transform workforce for next gen challenges

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Strategic direction

Core and complimentary growth

Expand our core business

Mission critical operations and labs

Offer knowledge- based solutions

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Fluor Strategy Day 2021

Energy Solutions

Jim Breuer

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Energy Solutions

TREND

	 Address dual challenge
	 Decarbonize energy supply
Energy Transition &	 Meet new regulatory policies
Urbanization
 Right technology solutions
	 Sustainable operations

Strategic Focus Areas

Decarbonize existing assets

Low carbon energy sources

Traditional oil & gas

NuScale project development

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NuScale recent milestones

• Received design certification approval
• U.S. Department of Energy approved a multi-yearcost-share award for up to $1.4 billion
• Multiple investors have taken equity positions in NuScale
• NuScale and Fluor recently signed contracts with UAMPS
• In active discussion with multiple clients

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Fluor Strengths

• Broad industry experience
• Technical expertise
• Full project life-cycle delivery
• Technology evaluation and selection
• Strong relationships with partners

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Energy Transition

Ongoing Fluor Work in Decarbonization

Renewable	Refinery	Battery	Carbon	Small Modular
Fuels	Electrification	Chemicals	Capture	Reactor

Fluor Strategy Day 2021

© 2021 Fluor Corporation.

Summary

Foster a high performance culture with purpose

• Improve employee engagement annually
• Increase women & diversity in leadership positions
• Net Zero in 2023

ACTIONS:

Advance DE&I

Promote social progress Lead in sustainability

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Summary

Drive growth

across the

portfolio

70% of revenue from non-traditional oil & gas segments

ACTIONS:

• Organic growth in energy transition, chemicals, mining, life sciences and infrastructure
• Invest in advanced technologies and government
• Strategic knowledge hires

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Summary

Pursue

contracts with

fair and

balanced

terms

Backlog mix will be more than 75% reimbursable by 2024

ACTION:

Focus on reimbursable work

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Summary

Reinforce

financial

discipline

By 2024

• Debt to capitalization ratio of 20 - 40%
• Return on invested capital of 20%
• Overhead reduction of $100 million
• EPS range of $3.00 - $3.50

ACTION:

Rebuild balance sheet Predictable cash flow Reduce overhead Lower debt

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Summary

STRATEGIC PRIORITIES

Foster a high performance culture with purpose

Drive growth across the portfolio

Pursue contracts with fair and balanced terms

Reinforce financial discipline

ACTIONS

• Advance DE&I
• Promote social progress
• Lead in sustainability
• Organic growth in energy transition, chemicals, mining, life sciences and infrastructure
• Invest in advanced technologies and government
• Strategic knowledge hires
• Focus on reimbursable work
• Rebuild balance sheet
• Predictable cash flow
• Reduce overhead
• Lower debt

GOALS

• Improve employee engagement annually
• Increase women and diversity in leadership
• Net Zero in 2023
• 70% of revenue from non-traditional oil & gas segments by 2023
• Backlog mix will be more than 75% reimbursable by 2024

By 2024

• Debt to capitalization of 20 - 40%
• Return on invested capital of 20%
• Overhead reduction of $100 million
• EPS range of $3.00 - $3.50

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