Exhibit 99.3
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Sverdrup Corporation
Condensed Consolidated Financial Statements
At October 2, 1998 and October 3, 1997
and for Each of the Nine Month Periods Then Ended
(Unaudited)
Page 1
Sverdrup Corporation
Unaudited Consolidated Condensed Balance Sheets
At October 2, 1998 and October 3, 1997
(In thousands, except share information)
1998 1997
- ---------------------------------------------- -------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 6,524 $ 9,443
Accounts receivable 176,264 169,183
Prepaid expenses and other 12,621 12,984
- ---------------------------------------------- -------- --------
Total current assets 195,409 191,610
- ---------------------------------------------- -------- --------
Investments in Real Estate 10,862 21,613
Property and Equipment, Net 30,384 25,422
Other Assets 23,920 34,321
- ---------------------------------------------- -------- --------
$260,575 $272,966
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 62,597 $ 65,075
Contract billings in excess of earnings 37,249 28,706
Accrued expenses 29,024 29,416
Income taxes 3,558 5,350
Current maturities of long-term debt 10,019 18,104
- ---------------------------------------------- -------- --------
Total current liabilities 142,447 146,651
- ---------------------------------------------- -------- --------
Long-term Debt, Less Current Maturities 34,639 34,955
- ---------------------------------------------- -------- --------
Other Long-term Liabilities 17,161 30,974
- ---------------------------------------------- -------- --------
Commitments and Contingencies
- ----------------------------------------------
Stockholders' Equity:
Capital stock:
Common stock, $0.0625 par value;
authorized - 10,000,000 shares;
issued - 7,911,900 shares;
outstanding - 3,143,687 and
3,410,801 shares, respectively 197 214
Retained earnings 71,846 67,552
Shares held in trust (5,715) (7,380)
- ---------------------------------------------- -------- --------
Total stockholders' equity 66,328 60,386
- ---------------------------------------------- -------- --------
$260,575 $272,966
======== ========
See the accompanying notes.
Page 2
Sverdrup Corporation
Unaudited Consolidated Condensed Statements of Income
For the Nine Months Ended October 2, 1998 and October 3, 1997
(In thousands)
1998 1997
- ------------------------------ -------- --------
Revenues:
Professional services $264,393 $257,710
Construction 285,278 225,114
Facilities operations 189,250 171,714
Real estate operations 9,546 16,382
- ------------------------------ -------- --------
Total revenues 748,467 670,920
- ------------------------------ -------- --------
Costs and Expenses:
Productive salaries 65,532 60,051
Project costs 90,276 98,111
Salary-related expenses 27,681 24,905
General expenses 74,515 66,229
Reimbursable costs 463,185 386,570
Real estate expenses 5,758 8,561
- ------------------------------ -------- --------
Total costs and expenses 726,947 644,427
- ------------------------------ -------- --------
Operating Income 21,520 26,493
Interest Expense, Net (1,870) (2,768)
Other Income, Net 337 33
- ------------------------------ -------- --------
Income Before Taxes 19,987 23,758
- ------------------------------ -------- --------
Income Tax Expense (8,201) (8,676)
- ------------------------------ -------- --------
Net Income $ 11,786 $ 15,082
============================== ======== ========
See the accompanying notes.
Page 3
Sverdrup Corporation
Unaudited Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended October 2, 1998 and October 3, 1997
(In thousands)
1998 1997
- ---------------------------------------------------- -------- --------
Cash Flows from Operating Activities:
Net income $ 11,786 $ 15,082
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation and amortization 4,171 4,118
Deferred income taxes (944) (2,723)
Equity in income of real estate ventures (1,656) (6,220)
Cash distributions from real estate ventures 7,439 7,203
Gains on disposals of property (1,880) (794)
Direct write-offs of accounts receivable 680 87
Changes in operating assets and liabilities:
(Increase) in accounts and notes receivable,
prepaid expenses and other assets (4,866) (43,811)
Increase in payables, accrued expenses,
other liabilities 10,209 21,651
- ---------------------------------------------------- -------- --------
Net cash provided (used) 24,939 (5,407)
- ---------------------------------------------------- -------- --------
Cash Flows from Investing Activities:
Additions to property and equipment, net
of disposals (8,830) (4,003)
Proceeds from sales of real estate 4,355 4,794
- ---------------------------------------------------- -------- --------
Net cash provided (used) (4,475) 791
- ---------------------------------------------------- -------- --------
Cash Flows from Financing Activities:
Proceeds from the sales of stock, and the
exercise of stock options 3,886 3,738
Proceeds from new borrowings 450 8,600
Principal payments on debt (8,959) (11,356)
Purchases of common stock, less amounts
amounts financed with debt (8,060) (4,179)
Dividends paid (2,360) (1,226)
Other (48) -
- ---------------------------------------------------- -------- --------
Net cash used (15,091) (4,423)
- ---------------------------------------------------- -------- --------
Increase (Decrease) in Cash and Cash Equivalents 5,373 (9,039)
Cash and Cash Equivalents at the Beginning
of the Period 1,151 18,482
- ---------------------------------------------------- -------- --------
Cash and Cash Equivalents at the End
of the Period $ 6,524 $ 9,443
==================================================== ======== ========
See the accompanying notes.
Page 4
Sverdrup Corporation
Notes to Unaudited Consolidated Condensed Financial Statements
1. The accompanying consolidated condensed financial statements have been
prepared by Sverdrup Corporation (the "Company"), without audit, pursuant
to the interim period reporting requirements of Form 10-Q. Consequently,
certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary for the fair presentation of its
consolidated financial position at October 2, 1998 and October 3, 1997, and
its consolidated results of operations and cash flows for the nine months
ended October 2, 1998 and October 3, 1997.
The Company's interim results of operations are not necessarily indicative
of the results to be expected for the full year.
2. Included in receivables at October 2, 1998 and October 3, 1997 were
unbilled amounts totaling $79,903,000 and $67,155,000, respectively.
3. Property, equipment and improvements are stated at cost and consisted of
the following at October 2, 1998 and October 3, 1997 (in thousands):
1998 1997
- -------------------------------------------- -------- --------
Office buildings and land $ 14,953 $ 13,174
Leasehold improvements and computer
software 19,252 15,844
Furniture and equipment 47,208 43,637
- -------------------------------------------- -------- --------
81,413 72,655
Accumulated depreciation
and amortization (51,029) (47,233)
- -------------------------------------------- -------- --------
$ 30,384 $ 25,422
======== ========
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Sverdrup Corporation
Notes to Unaudited Consolidated Condensed Financial Statements
4. The following table summarizes the Company's investments and ventures in
real estate at October 2, 1998 and October 3, 1997 (in thousands):
1998 1997
- ------------------------------------- ------- -------
Operating properties $ 9,086 $12,354
Ventures 4,439 11,635
Land held for development - 1,154
Accumulated depreciation and
amortization (2,663) (3,530)
- ------------------------------------- ------- -------
$10,862 $21,613
======= =======
5. During the nine months ended October 2, 1998 and October 3, 1997, the
Company made cash payments of $2,601,000 and $3,234,000, respectively, for
interest and $5,518,000 and $4,958,000, respectively, for income taxes.
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