Fluor Corp. said Tuesday it has discovered more errors in past financial statements filed with the Securities and Exchange Commission.
In addition, the Texas-based Energy Department contractor reported in an SEC filing that a major creditor and trustee, Wells Fargo Bank National Association, last month asserted a “notice of default” against Fluor for failing to submit certain financial records in a timely manner. If Fluor does not “cure” this problem within 90 days of the Aug. 5 notice, Wells Fargo said it could declare an “event of default” and demand all outstanding securities to be payable immediately.
As of Aug. 31, Fluor had a cash balance of $2.1 billion and continues to have adequate liquidity “to meet all operational and project needs, and has no outstanding loans under its revolving credit facilities,” according to the filing.
In late April, the Department of Justice ordered Fluor to turn over various documents about charges reported by the company during the second quarter of 2019. The Department of Justice has not commented on the probe. This was two months after the SEC started its own probe into Fluor’s financial reporting and accounting during 2019.
In the Tuesday filing, Fluor said its in-house auditing committee has discovered additional errors in past financial filings for the years ended Dec. 31, 2018, 2017, and 2016. Also, each report of the interim quarterly periods for 2018 and 2019 “should not be relied upon,” Fluor said, because of material errors in those well.
The Sept. 8 Fluor filing did not go into detail about the errors, but said the company’s internal review is ongoing and could still turn up other mistakes.
Fluor said it has tightened its financial controls and estimates the entirety of the proposed adjustments to prior SEC filings will hurt the cumulative pretax earnings reported from 2016 through Sept. 30, 2019, by $3.8 million.
The financial filing did not list any Energy Department projects as being subject to reporting errors, but one Defense Department project being constructed by Fluor at the Radford Army Ammunition Plant in Radford, Va., was cited. It does not go into detail about what the error involved.
Fluor has yet to file a formal earnings report with the SEC in 2020 or say when it expects to file one. The company did say Tuesday it expects to take non-cash charges for the first quarter of 2020 amounting to between $450 million and $475 million. The charges are due to a variety of factors, ranging from the impact of COVID-19 to intangibles including potentially reduced value of certain assets for sale.
A Fluor spokesman declined to elaborate on the financial filing.
Fluor is the lead partner in billions of dollars worth of contracts for DOE’s Office of Environmental Management. This includes the management contract for the Savannah River Site in South Carolina, along with the remediation contracts for the Idaho National Laboratory and the Portsmouth Site in Ohio.
