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Q4 2012 Earnings Call
February 20, 2013 5:30 pm ET
Kenneth H. Lockwood - Vice President of Corporate Finance and Investor Relations
David T. Seaton - Chairman, Chief Executive Officer and Chairman of Executive Committee
Biggs C. Porter - Chief Financial Officer and Senior Vice President
Jamie L. Cook - Crédit Suisse AG, Research Division
Alan Fleming - Barclays Capital, Research Division
Alexander J. Rygiel - FBR Capital Markets & Co., Research Division
Steven Fisher - UBS Investment Bank, Research Division
Brian Konigsberg - Vertical Research Partners, LLC
Tahira Afzal - KeyBanc Capital Markets Inc., Research Division
Michael S. Dudas - Sterne Agee & Leach Inc., Research Division
Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division
John B. Rogers - D.A. Davidson & Co., Research Division
Sameer Rathod - Macquarie Research
Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division
Will Gabrielski - Lazard Capital Markets LLC, Research Division
Previous Statements by FLR
» Fluor Management Discusses Q3 2012 Results - Earnings Call Transcript
» Fluor Management Discusses Q2 2012 Results - Earnings Call Transcript
» Fluor's CEO Discusses Q1 2012 Results - Earnings Call Transcript
At this time, for opening remarks, I'd like to turn the call over to Ken Lockwood, Vice President of Investor Relations. Please go ahead.
Kenneth H. Lockwood
Thanks, operator. Welcome, everyone, to Fluor's Fourth Quarter and 2012 Year End Conference Call. With us today are David Seaton, Fluor's Chairman and Chief Executive Officer; and Biggs Porter, Fluor's Chief Financial Officer. Our earnings announcement was released this afternoon after the market closed, and we have posted a slide presentation on our website, which we will reference while making our prepared remarks.
Before getting started, I'd like to refer you to our Safe Harbor note regarding forward-looking statements, which is summarized on Slide 2. During today's call and slide presentation, we will be making forward-looking statements, which reflect our current analysis of existing trends and information. There is an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences, in the company's Form 10-K, which was also filed earlier today.
During this call, we may discuss certain non-GAAP financial measures. Reconciliations of these amounts with the comparable GAAP measures are reflected in our earnings release and are posted in the Investor Relations section of our website at investor.fluor.com.
With that, I'd like to turn the call over to David Seaton, Fluor's Chairman and CEO. David?
David T. Seaton
Thanks, Ken, and good afternoon, everyone, and thank you for joining us. I'll apologize ahead of time for any sniffles or coughs that occur during my answers or prepared remarks. I'm fighting a little bit of a cold here. But as Ken said, today we want to review our fourth quarter and full year 2012 results and discuss our outlook for 2013.
If you'll turn to Slide 3, I'd like to cover the 2012 full year performance. Net earnings attributable to Fluor for the year were $456 million or $2.71 per diluted share, which compares to $594 million or $3.40 per share in 2011. Our financial results for 2012 were impacted by the unexpected adverse arbitration decision on the Greater Gabbard claim, which we announced back in November. After a thorough evaluation of the arbiter's decision, we booked a pretax charge of $416 million or $1.57 per diluted share on an after-tax basis. Excluding this charge, net earnings attributable to Fluor for 2012 would have been $4.28 per diluted share.
Segment profits results for 2012 reflected strong double-digit growth in Oil & Gas and Global Services, with strength in Industrial & Infrastructure, notwithstanding the Greater Gabbard arbitration decision.
Fluor delivered in that case a quality project, which is generating electricity at a rate that the client has said is ahead of their own expectations. And as you're aware, we expect arbitration proceedings in the client's counterclaim to commence in the spring.
Consolidated revenue for the year was a record $27.6 billion, representing an 18% increase over last year, due in part to strong growth in Oil & Gas segment, as well as Mining & Metals business lines.
New awards for 2012 were strong at $27.1 billion, including $12.6 billion in Oil & Gas and $9.5 billion in Industrial & Infrastructure. Consolidated backlog at year end was $38.2 billion, which compares to $39.5 billion a year ago. In addition, we have seen improvement in the margin of our backlog over the last several quarters.
Now please turn to Slide 4. Oil & Gas awards in the quarter include a petrochemical facility for BASF in Europe and Asia and a petrochemical facility for Braskem in Mexico. Oil & Gas backlog ended the year at $18.2 billion, which represents a 21% increase over a year ago.
Now the Oil & Gas group continues to see strong demand for front-end engineering contracts, especially for petrochemical facilities. As we move through 2013, we expect a balanced slate of new awards with major prospects across upstream, downstream and chemical market -- petrochemical markets.
The Industrial & Infrastructure grew the backlog. At the end of the year, it was $15.5 billion, which is down from $20 billion a year ago. This decline was driven by significant progress on existing mining projects coupled with the cancellation of 2 mining projects in the third quarter of last year that totaled $2 billion.