Fluor Reports Strong Second Quarter Results; New Awards and Backlog Surge

-- Record $5.8 Billion in New Awards

-- 17 Percent Sequential Increase in Backlog to $18.0 Billion

Fluor Corporation (NYSE:FLR) today announced financial results forits second quarter ended June 30, 2006. Revenues for the secondquarter increased 18 percent to $3.5 billion, up from $2.9 billion inthe second quarter of 2005. Net earnings were $66.6 million, or $0.74per diluted share, compared with a loss of $16.4 million, or $0.19 perdiluted share for the same period last year. Operating profits rosesharply to $161.5 million, with substantial increases from the Oil &Gas, Government, Global Services and Industrial & Infrastructuresegments compared to a year ago. Operating margins rose to 4.7percent, up from 1.1 percent a year ago. The second quarter of 2005was impacted by charges relating to an unfavorable jury verdict on aresort hotel project in the Caribbean and other project issues.

New awards for the second quarter were a record breaking $5.8billion, up from $3.2 billion a year ago. The quarter included $2.6billion in new Oil & Gas project awards and $2.3 billion in Industrial& Infrastructure awards. Consolidated backlog rose 17 percent to $18.0billion, compared with $15.4 billion at March 31, 2006.

"Fluor had a phenomenal quarter, particularly from a new awardsperspective," said Chief Executive Officer Alan Boeckmann. "Thestrength in new awards and backlog is indicative of our ability toprovide world-class engineering, construction and project managementexpertise to complex capital projects globally."

Corporate G&A expense for the quarter was $54.3 million, including$8.8 million associated with the relocation of the corporateheadquarters to the Dallas, Texas area, $3.4 million due to theadoption of accounting rule FAS123-R relating to stock-basedcompensation, and $3.3 million due to higher compensation costs. Thiscompares with $27.7 million in G&A expense a year ago, which includeda $4.2 million gain from the sale of real estate. Fluor's cash andsecurities at quarter end were $585 million, down from $654 millionlast quarter, primarily due to substantial outstanding working capitalbalances on work for the Federal Emergency Management Agency (FEMA),which are expected to be collected over the next two quarters.

Outlook

Revenue and net income for the first half reflect strongperformance across the company, which was bolstered by substantialcontributions from the Government group's disaster relief work forFEMA, reconstruction work in Iraq and the Fernald project for theDepartment of Energy. Earnings Per Share guidance for the full yearremains at a range of $2.90 to $3.20 per share, reflecting the factthat the three government programs mentioned above are nearly completeand should provide a significantly lower contribution in the secondhalf of 2006.

Business Segments

Fluor's Oil & Gas segment reported revenues of $1.3 billion, upfrom $1.2 billion in the second quarter of last year. Operating profitrose 54 percent to $76.5 million, compared to $49.6 million a yearago, with operating margins improving to 5.9 percent from 4.1 percentlast year. Margin improvement was driven in part by recognition ofprofits on completed projects. New awards were very strong across theupstream, downstream and petrochemical markets, and include thepreviously announced RasGas project in Qatar, valued at over $1billion. Backlog grew by 23 percent to $8.4 billion, up from $6.8billion last quarter.

Fluor's Industrial & Infrastructure segment reported revenue of$749.1 million, up 34 percent from $557.9 million a year ago.Operating profit for the quarter was $17.8 million, compared to a$63.8 million loss a year ago that was primarily the result of anunfavorable verdict on a hotel resort in the Caribbean. The charge waspartially reversed in the third quarter of last year after the judgein the case overturned the verdict and a settlement was reached.Operating margins rose to 2.4 percent in the second quarter, comparedwith 1.8 percent last quarter, driven by solid project progress andperformance. New awards included the previously announced SanFrancisco-Oakland Bay bridge project valued at $717 million. Backlogimproved 42 percent over last quarter to $5.4 billion.

The Government segment reported second quarter revenues of $816.2million, up from $647.2 million a year ago. Operating profit increasedto $24.7 million, up from $19.5 million in the second quarter of 2005.Operating margins were even with a year ago at 3.0 percent. Thepositive impact of FEMA work which began in late 2005 was offset byloss provisions of $21 million on two embassy projects and $8 millionfor higher costs to complete a project in Afghanistan.

Revenue for the Global Services segment grew 26 percent to $483.5million, from $382.8 million a year ago. Operating profit increased 70percent to $39.9 million, up from $23.5 million a year ago. Operatingmargins increased to 8.2 percent from 6.1 percent a year ago. Improvedoperating profits and margins were primarily a result of hurricanerelief support work.

Fluor's Power segment reported $105.9 million in revenue, downfrom $119.0 million in the second quarter of 2005. For the quarter,the Power segment reported operating profit of $2.6 million comparedto $3.1 million a year ago. Operating profit margin was level with ayear ago at 2.6 percent.

Results for the Six Months

Net earnings for the first six months of 2006 were $155.4 million,or $1.74 per diluted share. This compares with $31.0 million, or $0.36per diluted share, for the first six months of 2005. As previouslymentioned, results for the first half of 2005 included a pre-taxcharge of $65.0 million for a hotel project in the Caribbean. Revenuesfor the 2006 six-month period rose 22.5 percent to $7.1 billion,compared with $5.8 billion in 2005.

Second Quarter Conference Call

Fluor will host a conference call at 10:00 a.m. Eastern DaylightTime on Tuesday, August 8, 2006 which will be webcast live on theInternet and can be accessed by logging ontohttp://investor.fluor.com. The webcast will be archived for 30 daysfollowing the call.

About Fluor Corporation

Fluor Corporation (NYSE: FLR) provides services on a global basisin the fields of engineering, procurement, construction, operationsand maintenance and project management. Now headquartered in Irving,Texas, Fluor is a FORTUNE 500 company with revenues of $13.2 billionin 2005. For more information, visit www.fluor.com.

Forward-Looking Statements: This release contains forward-lookingstatements, including, without limitation, statements relating to,future backlog, revenue and earnings, expected performance of theCompany's business and the expansion of the markets which the Companyserves. The forward-looking statements are based on current managementexpectations and involve risks and uncertainties. Actual results maydiffer materially as a result of a number of factors, including, amongother things: failure to achieve projected backlog, revenue and/orearnings levels; the timely and successful implementation of strategicinitiatives; customer cancellations of, or scope adjustments to,existing contracts; difficulties or delays incurred in the executionof contracts; decreased capital investment or expenditures, or afailure to make anticipated increased capital investment orexpenditures, by the Company's clients; the Company's failure toreceive anticipated new contract awards; increased liability risks inany of the markets the Company serves; the Company's inability tosuccessfully convert front-end engineering services into futureproject awards; the cyclical nature of many of the markets the Companyserves; and, changes in global business, economic, political andsocial conditions. Caution must be exercised in relying on these andother forward-looking statements. Due to known and unknown risks, theCompany's results may differ materially from its expectations andprojections.

Additional information concerning these and other factors can befound in press releases as well as the Company's public periodicfilings with the Securities and Exchange Commission, including thediscussion under the heading "Item 1A. Business -- Company RiskFactors" in the Company's Form 10-K filed on March 1, 2006 and Form10-Q filed on May 8, 2006. Such filings are available either publiclyor upon request from Fluor's Investor Relations Department:469-398-7220. The Company disclaims any intent or obligation to updateits forward-looking statements in light of new information or futureevents.
FLUOR CORPORATION
(in millions, except per share amounts)
Unaudited

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CONSOLIDATED OPERATING RESULTS

THREE MONTHS ENDED JUNE 30 2006 2005
------------------------------------------------ ---------- ----------
Revenues $3,456.4 $2,919.9
Costs and Expenses:
Cost of Revenues 3,294.9 2,888.0
Corporate G&A 54.3 27.7
Net Interest Expense (Income) 0.7 (1.4)
---------- ----------
Total Costs and Expenses 3,349.9 2,914.3
---------- ----------
Earnings before Income Taxes 106.5 5.6
Income Tax Expense 39.9 22.0
---------- ----------
Net Earnings (Loss) $66.6 $(16.4)
========== ==========
Basic Earnings (Loss) per Share
Net Earnings (Loss) $0.77 $(0.19)
Weighted Average Shares 86.3 85.0
Diluted Earnings (Loss) per Share
Net Earnings (Loss) $0.74 $(0.19)
Weighted Average Shares 89.6 85.0
New Awards $5,755.6 $3,230.3
Backlog $18,030.2 $15,666.4
Work Performed $3,350.5 $2,857.5


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SIX MONTHS ENDED JUNE 30 2006 2005
------------------------------------------------ ---------- ----------
Revenues $7,081.3 $5,779.7
Costs and Expenses:
Cost of Revenues 6,735.4 5,629.3
Corporate G&A 96.1 65.8
Net Interest Expense (Income) 0.5 (1.6)
---------- ----------
Total Costs and Expenses 6,832.0 5,693.5
---------- ----------
Earnings before Income Taxes 249.3 86.2
Income Tax Expense 93.9 55.2
---------- ----------
Net Earnings $155.4 $31.0
========== ==========
Basic Earnings per Share
Net Earnings $1.81 $0.37
Weighted Average Shares 86.1 84.3
Diluted Earnings per Share
Net Earnings $1.74 $0.36
Weighted Average Shares 89.3 85.6
New Awards $9,581.4 $6,581.0
Backlog $18,030.2 $15,666.4
Work Performed $6,891.4 $5,663.9



FLUOR CORPORATION
Unaudited

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BUSINESS SEGMENT FINANCIAL REVIEW
($ in millions)
--------------------------------------

THREE MONTHS ENDED JUNE 30 2006 2005
-------------------------------------- --------- ---------
Revenues
Oil & Gas $1,301.7 $1,213.0
Industrial & Infrastructure 749.1 557.9
Government 816.2 647.2
Global Services 483.5 382.8
Power 105.9 119.0
--------- ---------
Total revenues $3,456.4 $2,919.9
========= =========

Operating Profit (Loss) Margin $ and % $ % $ %
--------- ---- --------- ------
Oil & Gas $76.5 5.9 $49.6 4.1
Industrial & Infrastructure 17.8 2.4 (63.8) (11.4)
Government 24.7 3.0 19.5 3.0
Global Services 39.9 8.2 23.5 6.1
Power 2.6 2.6 3.1 2.6
--------- ---------
Total Operating Profit (Loss)
Margin $ and % $161.5 4.7 $31.9 1.1
========= =========



SIX MONTHS ENDED JUNE 30 2006 2005
-------------------------------------- --------- ---------
Revenues
Oil & Gas $2,492.9 $2,396.9
Industrial & Infrastructure 1,511.9 1,228.2
Government 1,950.0 1,208.4
Global Services 942.8 748.2
Power 183.7 198.0
--------- ---------
Total revenues $7,081.3 $5,779.7
========= =========

Operating Profit (Loss) Margin $ and % $ % $ %
--------- ---- --------- ------
Oil & Gas $133.2 5.3 $103.9 4.3
Industrial & Infrastructure 31.4 2.1 (43.0) (3.5)
Government 103.2 5.3 28.6 2.4
Global Services 75.5 8.0 54.7 7.3
Power 2.6 1.4 6.2 3.1
--------- ---------
Total Operating Profit (Loss)
Margin $ and % $345.9 4.9 $150.4 2.6
========= =========



FLUOR CORPORATION
Unaudited

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SELECTED BALANCE SHEET ITEMS
($ in millions, except per share amounts)
---------------------------------------------
JUNE 30, DECEMBER 31,
2006 2005
------------ ------------
Cash and Cash Equivalents $584.8 $789.0
Total Current Assets 3,280.6 3,108.2
Total Assets 4,812.6 4,574.4
Total Short-Term Debt 430.0 330.0
Total Current Liabilities 2,384.2 2,339.3
Long-term Debt 129.9 92.0
Shareholders' Equity 1,790.2 1,630.6

Total Debt to Capitalization % 23.8% 20.6%
Shareholders' Equity Per Share $20.44 $18.72

----------------------------------------------------------------------

SELECTED CASH FLOW ITEMS
($ in millions)
---------------------------------------------
SIX MONTHS ENDED JUNE 30
-------------------------
2006 2005
------------ ------------

Cash Provided (Utilized) by Operating
Activities $(243.9) $176.8
------------ ------------

Investing Activities
Capital Expenditures (110.8) (86.2)
Other Items 14.6 12.5
------------ ------------
Cash Utilized by Investing Activities (96.2) (73.7)
------------ ------------

Financing Activities
Increase (decrease) in short-term
borrowings 100.0 (30.0)
Non-Recourse Project Financing 32.4 --
Issuance of Common Stock -- 41.8
Cash Dividends (17.8) (27.6)
Other Items 24.9 33.9
------------ ------------
Cash Provided by Financing Activities 139.5 18.1
------------ ------------

Effect of Exchange Rate Changes on Cash (3.6) (36.7)
------------ ------------

------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents $(204.2) $84.5
============ ============


----------------------------------------------------------------------

Depreciation $56.1 $48.7
============ ============



FLUOR CORPORATION
Supplemental Fact Sheet
Unaudited

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NEW AWARDS
($ in millions)

THREE MONTHS ENDED JUNE 30 2006 2005 % Chg
------------------------------------ ------------- ------------- -----

Oil & Gas $2,644 46% $1,220 38% 117 %
Industrial & Infrastructure 2,267 39% 348 11% 551 %
Government 443 8% 349 11% 27 %
Global Services 280 5% 748 23% (63)%
Power 122 2% 565 17% (78)%

-------- ---- -------- ----
TOTAL NEW AWARDS $5,756 100% $3,230 100% 78 %
======== ==== ======== ====

SIX MONTHS ENDED JUNE 30 2006 2005 % Chg
------------------------------------ ------------- ------------- -----

Oil & Gas $4,448 46% $2,700 41% 65 %
Industrial & Infrastructure 2,939 31% 940 14% 213 %
Government 1,208 13% 793 12% 52 %
Global Services 859 9% 1,502 23% (43)%
Power 127 1% 646 10% (80)%

-------- ---- -------- ----
TOTAL NEW AWARDS $9,581 100% $6,581 100% 46 %
======== ==== ======== ====

------------------------------------ -------- ------------- ----------

BACKLOG TRENDS
($ in millions)

AS OF JUNE 30 2006 2005 % Chg
------------------------------------ ------------- ------------- -----

Oil & Gas $8,353 46% $5,982 38% 40 %
Industrial & Infrastructure 5,355 30% 4,479 29% 20 %
Government 699 4% 1,165 7% (40)%
Global Services 2,529 14% 3,106 20% (19)%
Power 1,094 6% 934 6% 17 %

-------- ---- -------- ----
TOTAL BACKLOG $18,030 100% $15,666 100% 15 %
======== ==== ======== ====

United States $6,420 36% $5,475 35% 17 %
The Americas 3,058 17% 3,519 22% (13)%
Europe, Africa and the Middle East 7,657 42% 5,598 36% 37 %
Asia Pacific 895 5% 1,074 7% (17)%

-------- ---- -------- ----
TOTAL BACKLOG $18,030 100% $15,666 100% 15 %
======== ==== ======== ====

(FLRF)