Discontinued Operations - (Notes)

9 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

In the third quarter of 2019, management committed to a plan to sell substantially all of its government and AMECO equipment businesses, while retaining two fixed-price projects previously included in the government segment and a few small international components of AMECO. The company expects to complete the sale of both businesses within one year. Management has concluded that these disposal groups have met the criteria to be classified as held for sale beginning in the third quarter of 2019, and as a result, the assets and liabilities of the government and AMECO businesses have been classified as held for sale on the Condensed Consolidated Balance Sheet as of September 30, 2019 and December 31, 2018. Management has also concluded that the operations of the disposal groups qualify for discontinued operations presentation because their disposal represents a strategic shift that will have a major effect on the company's financial results. Therefore, the results of the government and AMECO businesses that are expected to be sold have been presented as earnings from discontinued operations, net of tax, in the Condensed Consolidated Statement of Operations for all periods presented.

On August 1, 2019, the company entered into a settlement agreement in connection with legal matters related to a previously divested business. The resulting gain on settlement as well as all legal fees associated with this matter were reported in earnings from discontinued operations, net of tax, in the Condensed Consolidated Statement of Operations and are included in "Other" in the tables below.

Earnings from discontinued operations for the three months ended September 30, 2019 and 2018 were as follows:



	Three Months Ended September 30, 2019												Three Months Ended September 30, 2018
(in thousands)	Government			AMECO			Other			Total			Government			AMECO			Other			Total
Revenue	$	718,153		$	73,102		$	—		$	791,255		$	754,543		$	61,177		$	—		$	815,720
Cost of revenue	693,750			70,546			—			764,296			718,219			60,068			—			778,287
Corporate general and administrative expense	603			40			(27,848		)	(27,205		)	594			87			1,923			2,604
Interest expense (income), net	(123		)	(107		)	—			(230		)	(64		)	(125		)	—			(189		)
Total cost and expenses	694,230			70,479			(27,848		)	736,861			718,749			60,030			1,923			780,702
Earnings (loss) before taxes from discontinued operations	23,923			2,623			27,848			54,394			35,794			1,147			(1,923		)	35,018
Income tax expense (benefit)	5,570			580			6,438			12,588			23,067			(852		)	(442		)	21,773
Net earnings (loss) from discontinued operations	18,353			2,043			21,410			41,806			12,727			1,999			(1,481		)	13,245
Less: Net earnings attributable to noncontrolling interests from discontinued operations	2,185			—			—			2,185			4,481			—			—			4,481
Net earnings (loss) attributable to Fluor Corporation from discontinued operations	$	16,168		$	2,043		$	21,410		$	39,621		$	8,246		$	1,999		$	(1,481	)	$	8,764

Earnings from discontinued operations for the nine months ended September 30, 2019 and 2018 were as follows:



	Nine Months Ended September 30, 2019												Nine Months Ended September 30, 2018
(in thousands)	Government			AMECO			Other			Total			Government			AMECO			Other			Total
Revenue	$	2,196,176		$	197,708		$	—		$	2,393,884		$	2,907,000		$	190,217		$	—		$	3,097,217
Cost of revenue	2,102,747			211,913			—			2,314,660			2,740,053			170,406			—			2,910,459
Corporate general and administrative expense	2,735			189			(22,929		)	(20,005		)	3,235			242			3,151			6,628
Interest expense (income), net	(1,101		)	(280		)	—			(1,381		)	(208		)	(282		)	—			(490		)
Total cost and expenses	2,104,381			211,822			(22,929		)	2,293,274			2,743,080			170,366			3,151			2,916,597
Earnings (loss) before taxes from discontinued operations	91,795			(14,114		)	22,929			100,610			163,920			19,851			(3,151		)	180,620
Income tax expense (benefit)	21,034			(2,535		)	5,301			23,800			64,140			3,285			(725		)	66,700
Net earnings (loss) from discontinued operations	70,761			(11,579		)	17,628			76,810			99,780			16,566			(2,426		)	113,920
Less: Net earnings attributable to noncontrolling interests from discontinued operations	7,803			—			—			7,803			9,013			—			—			9,013
Net earnings (loss) attributable to Fluor Corporation from discontinued operations	$	62,958		$	(11,579	)	$	17,628		$	69,007		$	90,767		$	16,566		$	(2,426	)	$	104,907

The carrying amounts of the major classes of assets and liabilities included as part of discontinued operations and classified as held for sale as of September 30, 2019 and December 31, 2018 were as follows:



	September 30, 2019										December 31, 2018
(in thousands)	Government		AMECO		Total from Discontinued Operations		Other Assets and Liabilities from Continuing Operations⁽²⁾		Total		Government		AMECO		Total from Discontinued Operations
Accounts and notes receivable, net	$	109,536	$	82,388	$	191,924	$	2,543	$	194,467	$	202,837	$	95,652	$	298,489
Contract assets	349,610		4,057		353,667		2,936		356,603		411,777		2,285		414,062
Other current assets	23,675		59,489		83,164		305		83,469		15,076		58,018		73,094
Current assets held for sale	$	482,821	$	145,934	$	628,755	$	5,784	$	634,539	$	629,690	$	155,955	$	785,645

Property, plant and equipment, net	$	10,080	$	233,788	$	243,868	$	70,937	$	314,805	$	10,714	$	257,077	$	267,791
Goodwill	58,029		12,337		70,366		1,499		71,865		58,029		12,337		70,366
Investments	32,767		—		32,767		6,309		39,076		35,354		—		35,354
Other assets	15,096		6,412		21,508		—		21,508		2,021		1,067		3,088
Noncurrent assets held for sale⁽¹⁾	$	115,972	$	252,537	$	368,509	$	78,745	$	447,254	$	106,118	$	270,481	$	376,599
Total assets held for sale	$	598,793	$	398,471	$	997,264	$	84,529	$	1,081,793	$	735,808	$	426,436	$	1,162,244

Trade accounts payable	$	180,597	$	33,797	$	214,394	$	550	$	214,944	$	219,617	$	20,608	$	240,225
Short-term borrowings	767		—		767		—		767		—		—		—
Contract liabilities	64,196		2,333		66,529		—		66,529		51,129		4,280		55,409
Accrued salaries, wages and benefits	71,873		9,348		81,221		—		81,221		64,387		7,182		71,569
Other accrued liabilities	11,716		7,573		19,289		2,646		21,935		10,473		3,139		13,612
Current liabilities held for sale	$	329,149	$	53,051	$	382,200	$	3,196	$	385,396	$	345,606	$	35,209	$	380,815

Noncurrent liabilities held for sale⁽¹⁾	$	24,462	$	4,485	$	28,947	$	—	$	28,947	$	16,113	$	1,385	$	17,498
Total liabilities held for sale	$	353,611	$	57,536	$	411,147	$	3,196	$	414,343	$	361,719	$	36,594	$	398,313

(1) Noncurrent assets and liabilities held for sale as of September 30, 2019 were classified as current on the Condensed Consolidated Balance Sheet as the company expects to complete the sale of both the government and AMECO businesses within one year.

(2) Other assets and liabilities held for sale from continuing operations were not recast as of December 31, 2018 because the balances were not significant.

The Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2019 and 2018 included the following activities related to discontinued operations:



	Nine Months Ended September 30, 2019									Nine Months Ended September 30, 2018
(in thousands)	Government			AMECO			Total			Government			AMECO			Total
Depreciation of fixed assets	$	2,952		$	44,560		$	47,512		$	2,489		$	55,666		$	58,155
Amortization of stock-based awards	4,432			383			4,815			4,064			317			4,381
Capital expenditures	(2,216		)	(59,048		)	(61,264		)	(5,614		)	(35,538		)	(41,152		)