Fluor [FLR] 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.
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. 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.
Fluor said it has tightened its financial controls and estimates the entirety of the proposed adjustments will hurt the cumulative pretax earnings reported from 2016 through Sept. 30, 2019, by $3.8 million.
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.