NEWS
CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON, HM CX, BERMUDA
MAILING ADDRESS: PERRYVILLE CORPORATE PARK, CLINTON, NJ 08809-400000
FOSTER WHEELER REPORTS STRONG EARNINGS AND RECORD LEVEL OF MAN-HOURS IN
E&C BACKLOG FOR THIRD QUARTER OF 2008
| | • | | $127.9 million of net income |
| |
| | • | | $0.88 earnings per fully diluted share |
| |
| | • | | $165.2 million consolidated EBITDA |
| |
| | • | | $1.3 billion total cash and cash equivalents |
HAMILTON, BERMUDA, November 5, 2008 — Foster Wheeler Ltd. (Nasdaq: FWLT) today reported net income for the third quarter of 2008 of $127.9 million, or $0.88 per diluted share, compared with $129.1 million, or $0.89 per diluted share, in the third quarter of 2007. Net income in the third quarters of 2008 and 2007 included asbestos-related items, as detailed in a table accompanying this release. Excluding such items from both periods, net income in the third quarter of 2008 was $129.6 million, or $0.89 per share, as compared with $120.5 million, or $0.83 per share in the year-ago quarter.
Third-quarter 2008 consolidated EBITDA (earnings before interest expense, income taxes, depreciation and amortization) was $165.2 million, compared with $179.0 million in the third quarter of 2007. Excluding the items cited above, consolidated EBITDA in the third quarter of 2008 was $167.0 million, compared with $170.3 million in the year-ago quarter.
For the first nine months of 2008, net income was $426.7 million, or $2.94 per diluted share, compared with $315.8 million, or $2.18 per diluted share, for the first nine months of 2007. Consolidated EBITDA for the first nine months of 2008 was $581.0 million, compared with $459.9 million for the first nine months of 2007. The nine-month periods of 2008 and 2007 included asbestos-related items, as outlined in the table accompanying this press release.
The following tables present quarterly and average quarterly data, both as reported and adjusted. The company believes that such figures provide meaningful comparative relevance for certain key metrics in light of the significant quarter-to-quarter variability that is inherent in the company’s financial results.
| | | | | | | | | | | | | | | | | |
| | | Actual | | Qtrly Avg. | | Actual | | Qtrly Avg. |
| (in millions) | | Q3 2008 | | 2008 | | Q3 2007 | | 2007 |
| Net income | | $ | 128 | | | $ | 142 | | | $ | 129 | | | $ | 98 | |
| Net income, as adjusted | | $ | 130 | | | $ | 132 | | | $ | 121 | | | $ | 97 | |
| Consolidated EBITDA | | $ | 165 | | | $ | 194 | | | $ | 179 | | | $ | 148 | |
| Consolidated EBITDA, as adjusted | | $ | 167 | | | $ | 183 | | | $ | 170 | | | $ | 146 | |
Foster Wheeler’s Chairman and Chief Executive Officer, Raymond J. Milchovich, said, “Our results in the third quarter of 2008 were driven by excellent operating performance in both of the company’s business groups and a lower effective tax rate, partially offset by lower contributions from our equity interests in projects in Chile and Italy.”
Global Engineering and Construction (E&C) Group
| | | | | | | | | | | | | | | | | |
| | | Actual | | Qtrly Avg. | | Actual | | Qtrly Avg. |
| (in millions) | | Q3 2008 | | 2008 | | Q3 2007 | | 2007 |
| New orders booked (FW Scope) | | $ | 664 | | | $ | 605 | | | $ | 698 | | | $ | 538 | |
| Operating revenues (FW Scope) | | $ | 637 | | | $ | 566 | | | $ | 522 | | | $ | 536 | |
| Segment EBITDA | | $ | 123 | | | $ | 138 | | | $ | 129 | | | $ | 126 | |
| EBITDA Margin (FW Scope) | | | 19.3 | % | | | 24.3 | % | | | 24.8 | % | | | 23.6 | % |
| | • | | Segment EBITDA was $122.8 million in the third quarter of 2008, modestly below the average quarter of 2007, due in part to timing and mix of contracts. In addition, results in the third quarter of 2008 were unfavorably impacted by $5.5 million due to an increase in the tax rate on partially owned Italian power projects, an impairment charge of $2.2 million on a minority interest in a power project development in Italy, and a $6.1 million reversal of previous exchange-rate gains. These factors contributed to a reduction in EBITDA margin on scope revenue, relative to the average margin of 2007. |
| |
| | • | | New orders booked in Foster Wheeler Scope were $664.3 million in the third quarter of 2008, 24% above the average quarter of 2007. |
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| | • | | Backlog in Foster Wheeler Scope was $1.8 billion at the end of the third quarter of 2008, up modestly compared with the year-ago period. |
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| | • | | At the end of the third quarter of 2008, the number of man-hours in backlog amounted to 14.4 million, an all-time record for this Group. |
Global Power Group (GPG)
| | | | | | | | | | | | | | | | | |
| | | Actual | | Qtrly Avg. | | Actual | | Qtrly Avg. |
| (in millions) | | Q3 2008 | | 2008 | | Q3 2007 | | 2007 |
| New orders booked (FW Scope) | | $ | 432 | | | $ | 386 | | | $ | 303 | | | $ | 499 | |
| Operating revenues (FW Scope) | | $ | 428 | | | $ | 426 | | | $ | 345 | | | $ | 354 | |
| Segment EBITDA | | $ | 65 | | | $ | 66 | | | $ | 58 | | | $ | 35 | |
| EBITDA Margin (FW Scope) | | | 15.1 | % | | | 15.5 | % | | | 16.9 | % | | | 9.8 | % |
| | • | | Segment EBITDA was $64.8 million in the third quarter of 2008, an 86% increase compared with the average quarter of 2007. The results were driven by strong operating performance on quality contracts in backlog. The EBITDA margin on scope revenue was 15.1% in the third quarter of 2008, as compared to 9.8% for the average quarter of 2007. Excluding the 2007 impact of a $30 million reserve for a legacy power project, the average quarterly EBITDA for that year was $42 million and the average EBITDA margin on scope revenue was 12%. |
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| | • | | Operating revenues in Foster Wheeler Scope were $428.0 million in the third quarter of 2008, an increase of 21% compared with the average quarter of 2007. |
| |
| | • | | Backlog in Foster Wheeler Scope was $1.4 billion at the end of the third quarter of 2008. |
Milchovich noted, “In 2008, Foster Wheeler expects to have its third consecutive year of record-setting net income, with record performance in both of our two business groups.
“In the third quarter, our E&C Group reported that new orders in Foster Wheeler scope were 24% above the average quarter of 2007 — and the Group had a record-level of man-hours in backlog, despite the absence of any mega contracts signed in the quarter. Moreover, in light of the prospects the company is currently tracking, we are cautiously optimistic that E&C could end 2008 with additional growth in the number of man-hours in backlog.
“In our Global Power Group, new orders rebounded from the level of the second quarter of this year, but were 13% below the average quarter of 2007, reflecting ongoing delays in North American prospects and sporadic schedule slippage in some European prospects. We expect GPG to generate a record level of EBITDA
2
in 2008, but current market conditions are likely to challenge EBITDA performance in GPG in 2009,” said Milchovich.
Share Repurchase Program
On September 12, 2008, the Company announced that its board of directors had authorized a $750 million program. Under this authorization, the company purchased 1.3 million common shares during the third quarter of 2008, and 9.2 million common shares in October. The Company has approximately $412 million remaining under the existing authorization.
Calculation of EBITDA
EBITDA is a supplemental financial measure not defined in generally accepted accounting principles or GAAP. The Company defines EBITDA as income before interest expense, income taxes, depreciation and amortization. The Company has presented EBITDA because it believes it is an important supplemental measure of operating performance. EBITDA, after adjustment for certain unusual and infrequent items specifically excluded in the terms of the Company’s current and prior senior credit agreements, is used for certain covenants under its current and prior senior credit agreements. The Company believes that the line item on its consolidated statements of operations and comprehensive income entitled “net income” is the most directly comparable GAAP financial measure to EBITDA. Since EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or any other GAAP financial measure.
EBITDA, as calculated by the Company, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company’s ability to fund its cash needs. As EBITDA excludes certain financial information that is included in net income, users of this financial information should consider the type of events and transactions that are excluded.
The Company’s non-GAAP performance measure, EBITDA, has certain material limitations as follows:
| | • | | It does not include interest expense. Because the Company has borrowed money to finance some of its operations, interest is a necessary and ongoing part of its costs and has assisted the Company in generating revenue. Therefore, any measure that excludes interest has material limitations; |
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| | • | | It does not include taxes. Because the payment of taxes is a necessary and ongoing part of the Company’s operations, any measure that excludes taxes has material limitations; and |
| |
| | • | | It does not include depreciation and amortization. Because the Company must utilize property, plant and equipment and intangible assets in order to generate revenues in its operations, depreciation and amortization are necessary and ongoing costs of its operations. Therefore, any measure that excludes depreciation and amortization has material limitations. |
Calculation of EBITDA Margin
Segment EBITDA margin is calculated by dividing business unit operating revenues in Foster Wheeler Scope into business unit EBITDA.
Foster Wheeler Scope
Foster Wheeler Scope represents that portion of unfilled orders, new orders booked and operating revenues on which profit can be earned. Foster Wheeler Scope excludes revenues relating to third-party costs incurred by the Company as agent or principal on a reimbursable basis. The Company began comprehensively reporting Foster Wheeler Scope as of 2005.
Conference Call Information
Foster Wheeler Ltd. plans to hold a conference call today, Wednesday, November 5, at 8:30 a.m. (Eastern) to discuss its financial results for the third quarter of 2008.
The call will be accessible to the public by telephone or webcast, and the Company will post an accompanying slide presentation in the investor relations section of its web site (www.fwc.com). To listen to the call by telephone, dial 973-935-8752 (conference I.D. No. 67006427#) approximately ten minutes before
3
the call. The conference call will also be available over the Internet at www.fwc.com or through StreetEvents at www.streetevents.com.
A replay of the call will be available on the company’s web site as well as by telephone. To listen to the replay by telephone, dial 706-645-9291 (replay passcode 67006427# required) starting one hour after the conclusion of the call through 8:00 p.m. (Eastern) on Friday, December 5, 2008. The replay can also be accessed on the Company’s web site for four weeks following the call.
Foster Wheeler Ltd. is a global engineering and construction contractor and power equipment supplier delivering technically advanced, reliable facilities and equipment. The company employs over 14,000 talented professionals with specialized expertise dedicated to serving clients through one of its two primary business groups. The company’s Global Engineering & Construction Group designs and constructs leading-edge processing facilities for the upstream oil and gas, LNG and gas-to-liquids, refining, chemicals and petrochemicals, power, environmental, pharmaceuticals, biotechnology and healthcare industries. The company’s Global Power Group is a world leader in combustion and steam generation technology that designs, manufactures and erects steam generating and auxiliary equipment for power stations and industrial facilities and also provides a wide range of aftermarket services. The Company is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. For more information about Foster Wheeler, please visit our Web site at www.fwc.com.
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08-333
Safe Harbor Statement
Foster Wheeler news releases may contain forward-looking statements that are based on management’s assumptions, expectations and projections about the Company and the various industries within which the Company operates. These include statements regarding the Company’s expectations about revenues (including as expressed by its backlog), its liquidity, the outcome of litigation and legal proceedings and recoveries from customers for claims and the costs of current and future asbestos claims and the amount and timing of related insurance recoveries. Such forward-looking statements by their nature involve a degree of risk and uncertainty. The Company cautions that a variety of factors, including but not limited to the factors described in Part I, Item 1A “Risk Factors” of the Company’s 2007 Form 10-K, which was filed with the SEC on February 26, 2008 and the following, could cause the Company’s business conditions and results to differ materially from what is contained in forward-looking statements: changes in the rate of economic growth in the United States and other major international economies, changes in investment by the oil and gas, oil refining, chemical/petrochemical and power industries, changes in the financial condition of its customers, changes in regulatory environments, changes in project design or schedules, contract cancellations, changes in estimates made by the Company of costs to complete projects, changes in trade, monetary and fiscal policies worldwide, compliance with laws and regulations relating to its global operations, currency fluctuations, war and/or terrorist attacks on facilities either owned by the Company or where equipment or services are or may be provided by the Company, interruptions to shipping lanes or other methods of transit, outcomes of pending and future litigation, including litigation regarding the Company’s liability for damages and insurance coverage for asbestos exposure, protection and validity of its patents and other intellectual property rights, increasing competition by foreign and domestic companies, compliance with its debt covenants, recoverability of claims against its customers and others by the Company and claims by third parties against the Company, and changes in estimates used in its critical accounting policies. Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond the Company’s control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by the Company. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures the Company makes in proxy statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports on Form 8-K filed with the Securities and Exchange Commission.
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| | | | | | | |
Media Contact: | | Maureen Bingert | | 908 730 4444 | | maureen_bingert@fwc.com |
Investor Relations: | | Scott Lamb | | 908 730 4155 | | scott_lamb@fwc.com |
Other Inquiries: | | | | 908 730 4000 | | fw@fwc.com |
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Foster Wheeler Ltd. and Subsidiaries
Condensed Consolidated Statement of Operations
(in thousands of dollars, except share data and per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | Fiscal Quarters Ended | | | Fiscal Nine Months Ended | |
| | | September 26, | | | September 28, | | | September 26, | | | September 28, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Operating revenues | | $ | 1,718,355 | | | $ | 1,299,872 | | | $ | 5,215,101 | | | $ | 3,641,760 | |
Cost of operating revenues | | | (1,489,095 | ) | | | (1,101,912 | ) | | | (4,522,654 | ) | | | (3,067,442 | ) |
| | | | | | | | | | | | | |
Contract profit | | | 229,260 | | | | 197,960 | | | | 692,447 | | | | 574,318 | |
| | | | | | | | | | | | | | | | | |
Selling, general & administrative expenses | | | (74,831 | ) | | | (62,686 | ) | | | (218,771 | ) | | | (180,079 | ) |
Other income, net | | | (1,178 | ) | | | 22,319 | | | | 36,995 | | | | 43,730 | |
Other deductions, net | | | (8,986 | ) | | | (7,672 | ) | | | (27,080 | ) | | | (33,075 | ) |
Interest income | | | 12,457 | | | | 12,467 | | | | 35,155 | | | | 24,263 | |
Interest expense | | | (5,193 | ) | | | (4,716 | ) | | | (16,204 | ) | | | (14,652 | ) |
Minority interest in income of consolidated affiliates | | | (834 | ) | | | (1,765 | ) | | | (1,859 | ) | | | (5,038 | ) |
Net asbestos-related gain/(provision) | | | (1,725 | ) | | | 8,633 | | | | 30,738 | | | | 8,633 | |
| | | | | | | | | | | | | |
| |
Income before income taxes | | | 148,970 | | | | 164,540 | | | | 531,421 | | | | 418,100 | |
Provision for income taxes | | | (21,050 | ) | | | (35,439 | ) | | | (104,683 | ) | | | (102,324 | ) |
| | | | | | | | | | | | | |
Net income | | $ | 127,920 | | | $ | 129,101 | | | $ | 426,738 | | | $ | 315,776 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Shares Outstanding: | | | | | | | | | | | | | | | | |
Weighted-average number of common shares outstanding for basic earnings per common share | | | 144,030,570 | | | | 142,517,528 | | | | 143,980,815 | | | | 141,034,618 | |
| | | | | | | | | | | | | | | | | |
Weighted-average number of common shares outstanding for diluted earnings per common share | | | 145,199,596 | | | | 145,092,464 | | | | 145,349,931 | | | | 144,566,094 | |
| | | | | | | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.89 | | | $ | 0.91 | | | $ | 2.96 | | | $ | 2.24 | |
| | | | | | | | | | | | | |
Diluted | | $ | 0.88 | | | $ | 0.89 | | | $ | 2.94 | | | $ | 2.18 | |
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5
Foster Wheeler Ltd. and Subsidiaries
Condensed Consolidated Balance Sheet
(in thousands of dollars)
(unaudited)
| | | | | | | | | |
| | | September 26, | | | December 28, | |
| | | 2008 | | | 2007 | |
ASSETS | | | | | | | | |
Current Assets: | | | | | | | | |
Cash and cash equivalents | | $ | 1,308,924 | | | $ | 1,048,544 | |
Accounts and notes receivable, net: | | | | | | | | |
Trade | | | 634,975 | | | | 580,883 | |
Other | | | 121,518 | | | | 98,708 | |
Contracts in process | | | 291,466 | | | | 239,737 | |
Prepaid, deferred and refundable income taxes | | | 39,955 | | | | 36,532 | |
Other current assets | | | 30,102 | | | | 39,979 | |
| | | | | | | |
Total current assets | | | 2,426,940 | | | | 2,044,383 | |
| | | | | | | |
| | | | | | | | | |
Land, buildings and equipment, net | | | 364,377 | | | | 337,485 | |
Restricted cash | | | 26,430 | | | | 20,937 | |
Notes and accounts receivable – long-term | | | 2,103 | | | | 2,941 | |
Investments in and advances to unconsolidated affiliates | | | 210,168 | | | | 198,346 | |
Goodwill, net | | | 65,060 | | | | 53,345 | |
Other intangible assets, net | | | 61,705 | | | | 61,190 | |
Asbestos-related insurance recovery receivable | | | 287,695 | | | | 324,588 | |
Other assets | | | 90,934 | | | | 93,737 | |
Deferred income taxes | | | 102,154 | | | | 112,036 | |
| | | | | | | |
TOTAL ASSETS | | $ | 3,637,566 | | | $ | 3,248,988 | |
| | | | | | | |
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current Liabilities: | | | | | | | | |
Current installments on long-term debt | | $ | 19,490 | | | $ | 19,368 | |
Accounts payable | | | 360,675 | | | | 372,531 | |
Accrued expenses | | | 319,329 | | | | 331,814 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | | | 835,236 | | | | 744,236 | |
Income taxes payable | | | 69,919 | | | | 55,824 | |
| | | | | | | |
Total current liabilities | | | 1,604,649 | | | | 1,523,773 | |
| | | | | | | |
| | | | | | | | | |
Long-term debt | | | 203,582 | | | | 185,978 | |
Deferred income taxes | | | 81,139 | | | | 81,008 | |
Pension, postretirement and other employee benefits | | | 254,308 | | | | 290,741 | |
Asbestos-related liability | | | 334,142 | | | | 376,803 | |
Other long-term liabilities and minority interest | | | 203,843 | | | | 216,916 | |
Commitments and contingencies | | | | | | | | |
| | | | | | | |
TOTAL LIABILITIES | | | 2,681,663 | | | | 2,675,219 | |
| | | | | | | |
| | | | | | | | | |
Temporary Equity: | | | | | | | | |
| | | | | | | | | |
Non-vested restricted awards subject to redemption | | | 4,892 | | | | 2,728 | |
| | | | | | | |
TOTAL TEMPORARY EQUITY | | | 4,892 | | | | 2,728 | |
| | | | | | | |
| | | | | | | | | |
Shareholders’ Equity: | | | | | | | | |
Preferred shares | | | — | | | | — | |
Common shares | | | 1,430 | | | | 1,439 | |
Paid-in capital | | | 1,346,884 | | | | 1,385,311 | |
Accumulated deficit | | | (127,857 | ) | | | (554,595 | ) |
Accumulated other comprehensive loss | | | (269,446 | ) | | | (261,114 | ) |
| | | | | | | |
TOTAL SHAREHOLDERS’ EQUITY | | | 951,011 | | | | 571,041 | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | |
TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY | | $ | 3,637,566 | | | $ | 3,248,988 | |
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6
Foster Wheeler Ltd. and Subsidiaries
Business Segments
(in thousands of dollars)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | Fiscal Quarters Ended | | Fiscal Nine Months Ended |
| | | September 26, | | September 28, | | September 26, | | September 28, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
Global Engineering & Construction Group | | | | | | | | | | | | | | |
Backlog — in future revenues | | $ | 5,810,600 | | | $ | 4,893,500 | | | $ | 5,810,600 | | | $ | 4,893,500 | |
New orders booked — in future revenues | | | 955,200 | | | | 1,572,000 | | | | 2,308,800 | | | | 2,875,200 | |
Operating revenues | | | 1,287,405 | | | | 951,402 | | | | 3,928,136 | | | | 2,626,816 | |
EBITDA | | | 122,828 | | | | 129,232 | | | | 412,976 | | | | 395,364 | |
| | | | | | | | | | | | | | | | | |
Foster Wheeler Scope(1): | | | | | | | | | | | | | | | | |
Backlog — in Foster Wheeler Scope | | | 1,754,700 | | | | 1,645,100 | | | | 1,754,700 | | | | 1,645,100 | |
New orders booked — in Foster Wheeler Scope | | | 664,300 | | | | 697,800 | | | | 1,814,800 | | | | 1,547,300 | |
Operating revenues — in Foster Wheeler Scope | | | 637,424 | | | | 521,543 | | | | 1,699,445 | | | | 1,534,621 | |
| | | | | | | | | | | | | | | | | |
Global Power Group | | | | | | | | | | | | | | | | |
Backlog — in future revenues | | | 1,451,600 | | | | 1,379,600 | | | | 1,451,600 | | | | 1,379,600 | |
New orders booked — in future revenues | | | 435,100 | | | | 306,500 | | | | 1,165,700 | | | | 1,403,100 | |
Operating revenues | | | 430,950 | | | | 348,470 | | | | 1,286,965 | | | | 1,014,944 | |
EBITDA | | | 64,753 | | | | 58,390 | | | | 197,547 | | | | 99,780 | |
| | | | | | | | | | | | | | | | | |
Foster Wheeler Scope(1): | | | | | | | | | | | | | | | | |
Backlog — in Foster Wheeler Scope | | | 1,438,700 | | | | 1,366,500 | | | | 1,438,700 | | | | 1,366,500 | |
New orders booked — in Foster Wheeler Scope | | | 432,200 | | | | 303,000 | | | | 1,156,900 | | | | 1,393,500 | |
Operating revenues — in Foster Wheeler Scope | | | 428,006 | | | | 345,019 | | | | 1,278,106 | | | | 1,005,419 | |
| | | | | | | | | | | | | | | | | |
Corporate & Finance Group(2) | | | | | | | | | | | | | | | | |
EBITDA | | | (22,338 | ) | | | (8,645 | ) | | | (29,532 | ) | | | (35,272 | ) |
| | | | | | | | | | | | | | | | | |
Consolidated | | | | | | | | | | | | | | | | |
Backlog — in future revenues | | | 7,262,200 | | | | 6,273,100 | | | | 7,262,200 | | | | 6,273,100 | |
New orders booked — in future revenues | | | 1,390,300 | | | | 1,878,500 | | | | 3,474,500 | | | | 4,278,300 | |
Operating revenues | | | 1,718,355 | | | | 1,299,872 | | | | 5,215,101 | | | | 3,641,760 | |
EBITDA | | | 165,243 | | | | 178,977 | | | | 580,991 | | | | 459,872 | |
| | | | | | | | | | | | | | | | | |
Foster Wheeler Scope(1): | | | | | | | | | | | | | | | | |
Backlog — in Foster Wheeler Scope | | | 3,193,400 | | | | 3,011,600 | | | | 3,193,400 | | | | 3,011,600 | |
New orders booked — in Foster Wheeler Scope | | | 1,096,500 | | | | 1,000,800 | | | | 2,971,700 | | | | 2,940,800 | |
Operating revenues — in Foster Wheeler Scope | | | 1,065,430 | | | | 866,562 | | | | 2,977,551 | | | | 2,540,040 | |
| | |
| (1) | | Foster Wheeler Scope represents that portion of backlog, new orders booked and operating revenues on which profit can be earned. Foster Wheeler Scope excludes revenues relating to third-party costs incurred by the company as agent or principal on a reimbursable basis. |
| |
| (2) | | Includes intersegment eliminations. |
7
Foster Wheeler Ltd. and Subsidiaries
Reconciliations of EBITDA and Foster Wheeler Scope
(in thousands of dollars)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Fiscal Twelve | |
| | | | | | | | | | | | | | | | | | | Months | |
| | | Fiscal Quarters Ended | | | Fiscal Nine Months Ended | | | Ended | |
| | | September 26, | | | September 28, | | | September 26, | | | September 28, | | | December 28, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | | | 2007 | |
Reconciliation of EBITDA to Net Income | | | | | | | | | | | | | | | | | | | |
EBITDA: | | | | | | | | | | | | | | | | | | | |
Global Engineering & Construction | | $ | 122,828 | | | $ | 129,232 | | | $ | 412,976 | | | $ | 395,364 | | | $ | 505,647 | |
Global Power Group | | | 64,753 | | | | 58,390 | | | | 197,547 | | | | 99,780 | | | | 139,177 | |
Corporate & Finance Group | | | (22,338 | ) | | | (8,645 | ) | | | (29,532 | ) | | | (35,272 | ) | | | (52,984 | ) |
| | | | | | | | | | | | | | | | |
Consolidated EBITDA | | | 165,243 | | | | 178,977 | | | | 580,991 | | | | 459,872 | | | | 591,840 | |
Less: Interest expense | | | (5,193 | ) | | | (4,716 | ) | | | (16,204 | ) | | | (14,652 | ) | | | (19,855 | ) |
Less: Depreciation/amortization(1) | | | (11,080 | ) | | | (9,721 | ) | | | (33,366 | ) | | | (27,120 | ) | | | (41,691 | ) |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 148,970 | | | | 164,540 | | | | 531,421 | | | | 418,100 | | | | 530,294 | |
Provision for income taxes | | | (21,050 | ) | | | (35,439 | ) | | | (104,683 | ) | | | (102,324 | ) | | | (136,420 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 127,920 | | | $ | 129,101 | | | $ | 426,738 | | | $ | 315,776 | | | $ | 393,874 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Foster Wheeler Scope Operating Revenues to Operating Revenues | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Global Engineering & Construction Group | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Foster Wheeler Scope operating revenues | | $ | 637,424 | | | $ | 521,543 | | | $ | 1,699,445 | | | $ | 1,534,621 | | | $ | 2,144,199 | |
Flow-through revenues | | | 649,981 | | | | 429,859 | | | | 2,228,691 | | | | 1,092,195 | | | | 1,537,060 | |
| | | | | | | | | | | | | | | | |
Operating revenues | | | 1,287,405 | | | | 951,402 | | | | 3,928,136 | | | | 2,626,816 | | | | 3,681,259 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Global Power Group | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | �� | | | |
Foster Wheeler Scope operating revenues | | | 428,006 | | | | 345,019 | | | | 1,278,106 | | | | 1,005,419 | | | | 1,413,462 | |
Flow-through revenues | | | 2,944 | | | | 3,451 | | | | 8,859 | | | | 9,525 | | | | 12,522 | |
| | | | | | | | | | | | | | | | |
Operating revenues | | | 430,950 | | | | 348,470 | | | | 1,286,965 | | | | 1,014,944 | | | | 1,425,984 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Foster Wheeler Scope operating revenues | | | 1,065,430 | | | | 866,562 | | | | 2,977,551 | | | | 2,540,040 | | | | 3,557,661 | |
Flow-through revenues | | | 652,925 | | | | 433,310 | | | | 2,237,550 | | | | 1,101,720 | | | | 1,549,582 | |
| | | | | | | | | | | | | | | | |
Operating revenues | | $ | 1,718,355 | | | $ | 1,299,872 | | | $ | 5,215,101 | | | $ | 3,641,760 | | | $ | 5,107,243 | |
| | | | | | | | | | | | | | | | |
| | |
| (1) | | The depreciation / amortization by business segment: |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Fiscal Twelve | |
| | | Fiscal Quarters Ended | | | Fiscal Nine Months Ended | | | Months Ended | |
| | | September 26, | | | September 28, | | | September 26, | | | September 28, | | | December 28, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | | | 2007 | |
Global Engineering & Construction Group | | $ | (5,523 | ) | | $ | (4,432 | ) | | $ | (16,523 | ) | | $ | (11,310 | ) | | $ | (17,485 | ) |
Global Power Group | | | (5,190 | ) | | | (4,947 | ) | | | (15,787 | ) | | | (14,784 | ) | | | (22,835 | ) |
Corporate & Finance Group | | | (367 | ) | | | (342 | ) | | | (1,056 | ) | | | (1,026 | ) | | | (1,371 | ) |
| | | | | | | | | | | | | | | | |
Total depreciation / amortization | | $ | (11,080 | ) | | $ | (9,721 | ) | | $ | (33,366 | ) | | $ | (27,120 | ) | | $ | (41,691 | ) |
| | | | | | | | | | | | | | | | |
8
Foster Wheeler Ltd. and Subsidiaries
EBITDA, Net Income and Diluted Earnings Per Common Share Reconciliation
(in thousands of dollars, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Quarters Ended | |
| | | September 26, 2008 | | | September 28, 2007 | |
| | | | | | | | | | | Diluted Earnings | | | | | | | | | | | Diluted Earnings | |
| | | | | | | | | | | Per Common | | | | | | | | | | | Per Common | |
| | | EBITDA | | | Net Income | | | Share | | | EBITDA | | | Net Income | | | Share | |
| | | | | | | | | | | |
As adjusted | | $ | 166,968 | | | $ | 129,645 | | | $ | 0.89 | | | $ | 170,344 | | | $ | 120,468 | | | $ | 0.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
Net asbestos-related gain/(provision) | | | (1,725 | ) | | | (1,725 | ) | | $ | (0.01 | ) | | | 8,633 | | | | 8,633 | | | $ | 0.06 | |
| | | | | | | | | | | |
| |
As reported | | $ | 165,243 | | | $ | 127,920 | | | $ | 0.88 | | | $ | 178,977 | | | $ | 129,101 | | | $ | 0.89 | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Nine Months Ended | |
| | | September 26, 2008 | | | September 28, 2007 | |
| | | | | | | | | | | Diluted Earnings | | | | | | | | | | | Diluted Earnings | |
| | | | | | | | | | | Per Common | | | | | | | | | | | Per Common | |
| | | EBITDA | | | Net Income | | | Share | | | EBITDA | | | Net Income | | | Share | |
| | | | | | | | | | | |
As adjusted | | $ | 550,253 | | | $ | 396,000 | | | $ | 2.73 | | | $ | 451,239 | | | $ | 307,143 | | | $ | 2.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
Net asbestos-related gain | | | 30,738 | | | | 30,738 | | | | 0.21 | | | | 8,633 | | | | 8,633 | | | | 0.06 | |
| | | | | | | | | | | |
| |
As reported | | $ | 580,991 | | | $ | 426,738 | | | $ | 2.94 | | | $ | 459,872 | | | $ | 315,776 | | | $ | 2.18 | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Fiscal Twelve Months Ended | |
| | | December 28, 2007 | |
| | | | | | | | | | | Diluted Earnings | |
| | | | | | | | | | | Per Common | |
| | | EBITDA | | | Net Income | | | Share | |
| | | | | | |
As adjusted | | $ | 585,695 | | | $ | 387,729 | | | $ | 2.68 | |
| | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | |
Net asbestos-related gain | | | 6,145 | | | | 6,145 | | | | 0.04 | |
| | | | | | |
| |
As reported | | $ | 591,840 | | | $ | 393,874 | | | $ | 2.72 | |
| | | | | | |
9
Foster Wheeler Ltd. And Subsidiaries
Average Calculations
(in thousands of dollars)
(unaudited)
| | | | | | | | | | | | | | | | | |
| | | | | | | 2007 | | Fiscal Nine | | 2008 |
| | | 2007 | | Quarterly | | Months Ended | | Quarterly |
| | | Full Year | | Average | | September 26, | | Average |
| | | Amount | | Amount * | | 2008 | | Amount ** |
Consolidated | | | | | | | | | | | | | | | | |
Net income | | $ | 393,874 | | | $ | 98,469 | | | $ | 426,738 | | | $ | 142,246 | |
Adjusted net income | | | 387,729 | | | | 96,932 | | | | 396,000 | | | | 132,000 | |
Consolidated EBITDA | | | 591,840 | | | | 147,960 | | | | 580,991 | | | | 193,664 | |
Consolidated EBITDA, as adjusted | | | 585,695 | | | | 146,424 | | | | 550,253 | | | | 183,418 | |
| | | | | | | | | | | | | | | | | |
Global Engineering & Construction Group | | | | | | | | | | | | | | | | |
New orders booked — in Foster Wheeler Scope | | $ | 2,150,800 | | | $ | 537,700 | | | $ | 1,814,800 | | | $ | 604,933 | |
Operating revenues — in Foster Wheeler Scope | | | 2,144,199 | | | | 536,050 | | | | 1,699,445 | | | | 566,482 | |
Segment EBITDA | | | 505,647 | | | | 126,412 | | | | 412,976 | | | | 137,659 | |
EBITDA margin | | | 23.6 | % | | | 23.6 | % | | | 24.3 | % | | | 24.3 | % |
| | | | | | | | | | | | | | | | | |
Global Power Group | | | | | | | | | | | | | | | | |
New orders booked — in Foster Wheeler Scope | | $ | 1,996,000 | | | $ | 499,000 | | | $ | 1,156,900 | | | $ | 385,633 | |
Operating revenues — in Foster Wheeler Scope | | | 1,413,462 | | | | 353,366 | | | | 1,278,106 | | | | 426,035 | |
Segment EBITDA | | | 139,177 | | | | 34,794 | | | | 197,547 | | | | 65,849 | |
EBITDA margin | | | 9.8 | % | | | 9.8 | % | | | 15.5 | % | | | 15.5 | % |
| | |
| * | | To calculate the quarterly average dollar amounts, the company divided reported annual figures by four. |
| |
| ** | | To calculate the quarterly average dollar amounts, the company divided reported nine-month figures by three. |
10
