<Page>
Exhibit 99.1
Foster Wheeler Announces Second-Quarter Financial Results
HAMILTON, Bermuda--(BUSINESS WIRE)--Aug. 4, 2004--Foster Wheeler Ltd.
(OTCBB:FWLRF) today reported net earnings of $29.8 million for the second
quarter of 2004, or $0.61 per diluted share. This compares with a net loss for
the same quarter of last year of $29.3 million, or $0.72 per diluted share.
Revenues for the second quarter of 2004 totaled $669.8 million compared with
$935.8 million in the second quarter of last year. Consolidated earnings before
income taxes, interest expense, depreciation and amortization (EBITDA) for the
second quarter of 2004 were $83.6 million compared with $9.0 million in the
second quarter of 2003.
The quarter's results included a pre-tax gain of $8.7 million on the sale
of development rights related to an Italian power project. The sale of the power
project development rights was recorded as a one-time gain, and the company
anticipates no further such sales this year. However, the business in Italy has
historically developed and sold such project rights, and it is actively
continuing to develop other project rights that are expected to be offered for
sale in the future. The quarter's results also included a net pre-tax asbestos
gain of $1.7 million, and pre-tax charges of $4.7 million for professional
service expenses and severance benefits driven by the company's balance sheet
and operational restructuring process. Last year's quarter included pre-tax
charges of $16.0 million for professional services and severance benefits,
pre-tax charges of $6.1 million resulting from pension curtailment and
revaluation, and net pre-tax charges of $19.5 million related to five North
American projects.
"Project execution by our North American Power and European Engineering
and Construction Group operations was better than expected and drove our
quarterly earnings," said Raymond J. Milchovich, chairman, president and chief
executive officer. "During the quarter, we successfully completed several large
projects ahead of schedule, earned performance bonuses, passed performance
tests, and agreed with a customer to eliminate any warranty obligations on a
major project. Although I am extremely pleased with these results, I do not
expect to see earnings of this magnitude for the balance of the year. Several
large contracts were completed during the second quarter, and, over the
remainder of this year, we do not expect our remaining backlog to generate the
level of profits reported this quarter."
For the six months ended June 25, 2004, revenues were $1.4 billion, down
from $1.7 billion in the first six months of last year. The net earnings for the
period were $25.5 million compared with a net loss of $49.2 million in the first
six months of 2003. Pre-tax charges of $60.8 million were included in the first
six months of 2003.
Extension for Filing Form 10-Q
The company today is extending through August 9, 2004 the time for filing
its Form 10-Q for the second quarter of 2004. It is doing so because one of the
company's foreign subsidiaries is a party to performance bonding arrangements
with financial institutions which contain certain financial covenants. The
company requires additional time to evaluate its compliance and course of action
with respect to these financial covenants. In connection with this analysis, the
company is also evaluating the effectiveness of its disclosure controls and
procedures.
The company expects its usual earnings conference call to be rescheduled
for a date in the near future, which date will be separately announced.
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Worldwide Cash and Domestic Liquidity
Worldwide, total cash and short-term investments at the end of the
quarter were $404.7 million, compared with $430.2 million at year-end 2003, and
$419.3 million at the end of the second quarter of 2003. The quarter-end cash
and short-term investments included $327.2 million held by non-U.S.
subsidiaries. As of June 25, 2004, the company's indebtedness was $1.0 billion,
down $16 million from year-end 2003 and $75 million from the end of the second
quarter of 2003.
"Assuming we successfully complete our equity-for-debt exchange offer and
replace our existing revolving credit facility with a new multi-year facility,
we forecast that our domestic liquidity, which includes cash and unused credit
line availability, will remain sufficient throughout the next 12 months,"
commented Mr. Milchovich.
The company recently announced that significant numbers of institutional
investors have agreed to tender their securities in the exchange offer. The
company is in the process of distributing offering materials related to the
exchange offer as amended. The exchange offer has been extended through August
30, 2004, subject to further extension.
Bookings and Segment Performance
New orders booked during the second quarter of 2004 were $707.0 million,
up approximately 9% from $647.1 million in the second quarter of last year. In
the quarter, new orders exceeded revenues for the first time since the third
quarter of 2002. The company's backlog at the end of the second quarter of 2004
was $2.3 billion, down from $3.3 billion at the end of the second quarter of
2003, and essentially flat with year-end 2003.
Second-quarter new bookings for the Engineering and Construction (E&C)
Group were $601.9 million, up from $460.4 million during the year-ago quarter
and at the highest level for our current E&C businesses since the fourth quarter
of 2001. The Group's quarter-end backlog was $1.6 billion, down $0.6 billion
compared with $2.2 billion at the end of the second quarter of 2003, but up from
$1.3 billion at year-end 2003. Revenues for the E&C Group in the second quarter
of 2004 were $426.1 million, down approximately 19% compared with $529.2 million
in the second quarter of 2003. The Group's EBITDA was $55.9 million this
quarter, up substantially from $13.9 million for the same period last year.
Included in EBITDA for this quarter is a gain of $8.7 million on the sale of the
development rights on a power project in Italy. Last year's EBITDA included a
gain of $2.5 million on the settlement of a claim and losses of $15.0 million on
three separate projects.
New bookings in the second quarter for the Energy Group were $105.2
million, compared with $187.4 million in second quarter 2003. Backlog at
quarter-end was $692.8 million, down substantially from $1.2 billion at the end
of the second quarter of 2003. Energy Group revenues for the quarter were $256.3
million, compared with $409.3 million in the same quarter of 2003. The Group's
EBITDA for the quarter was $48.3 million compared with $29.3 million in the same
quarter last year.
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Non-Cash Amounts Related to Asbestos
The company settled with additional asbestos insurance carriers during
the second quarter of 2004, reversing an additional $1.7 million of a $68.1
million non-cash charge recorded in the fourth quarter of 2003. This brings, as
anticipated, the total amount of the 2003 charge reversed to $13.4 million. The
company plans to continue its strategy of settling with insurance carriers by
monetizing policies or arranging coverage in place agreements. This strategy is
designed to reduce future cash payments from the company to cover asbestos
liabilities. The company continues to project that it will not be required to
fund any asbestos liabilities from its cash flow before 2010.
Calculation of EBITDA
Management uses several financial metrics to measure the performance of
the company's business segments. EBITDA is a supplemental, non-generally
accepted accounting principle (GAAP) financial measure. EBITDA is defined as
earnings/(loss) before taxes, interest expense, depreciation and amortization.
The company presents EBITDA because it believes it is an important supplemental
measure of operating performance. A reconciliation of EBITDA, a non-GAAP
financial measure, to net earnings/(loss), a GAAP measure, is shown below.
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RECONCILIATION OF EBITDA TO NET EARNINGS/(LOSS)
(In Millions of Dollars)
Three months ended June 25, 2004
Corporate
&
E&C Energy Financial Total
------------------------------
EBITDA 55.9 48.3 (20.6) 83.6
Less: Interest Expense(*) 2.8 8.3 14.5 25.6
Less: Depreciation and amortization 2.7 5.1 0.6 8.4
------------------------------
Earnings/(loss) before income taxes 50.4 34.9 (35.7) 49.6
Less: Provision/(benefit) for income
taxes 12.5 17.9 (10.6) 19.8
------------------------------
------------------------------
Net earnings/(loss) 37.9 17.0 (25.1) 29.8
------------------------------
Three months ended June 27, 2003
Corporate
&
E&C Energy Financial Total
------------------------------
EBITDA 13.9 29.3 (34.2) 9.0
Less: Interest Expense(*) 1.4 7.2 14.3 22.9
Less: Depreciation and amortization 2.2 5.2 1.1 8.5
------------------------------
Earnings/(loss) before income taxes 10.3 16.9 (49.6) (22.4)
Less: Provision/(benefit) for income
taxes 2.2 6.1 (1.4) 6.9
------------------------------
------------------------------
Net earnings/(loss) 8.1 10.8 (48.2) (29.3)
------------------------------
(*) Includes interest expense on subordinated deferrable interest
debentures in 2004 and mandatorily redeemable preferred security
distributions of subsidiary trust in 2003.
<Page>
The company believes that the line item on its consolidated statement of
operations entitled "net earnings/(loss)" is the most directly comparable GAAP
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 earnings/(loss) as an indicator of operating performance.
EBITDA, as the company calculates it, 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 compared with net earnings/(loss), the
most directly comparable GAAP financial measure, users of this financial
information should consider the type of events and transactions which are
excluded. EBITDA, adjusted for certain unusual and infrequent items specifically
excluded in the terms of the Senior Credit Facility, is also used as a measure
for certain covenants under the Senior Credit Facility.
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 substantial amounts of money to finance some of its
operations, interest is a necessary and ongoing part of its costs
and has assisted it in generating revenue. Therefore, any measure
that excludes interest expense has material limitations;
-- 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;
-- It does not include depreciation. Because the company must utilize
substantial property, plant and equipment in order to generate
revenues in its operations, depreciation is a necessary and
ongoing part of its costs. Therefore any measure that excludes
depreciation has material limitations.
Notes to Editor:
1. Consolidated Statements follow.
2. Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction, manufacturing,
project development and management, research and plant operation services.
Foster Wheeler serves the refining, upstream oil and gas, LNG and
gas-to-liquids, petrochemicals, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries. The corporation is based in Hamilton, Bermuda, and
its operational headquarters are in Clinton, New Jersey, USA. For more
information about Foster Wheeler, visit our Web site at http://www.fwc.com.
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3. Safe Harbor Statement
This news release contains 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 our expectations regarding revenues (including as expressed by our
backlog), 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 under the heading "Business--Risk Factors of
the Business" in the company's most recent annual report on Form 10-K/A 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 power, oil and gas, pharmaceutical,
chemical/petrochemical and environmental industries, changes in the financial
condition of our customers, changes in regulatory environment, 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, currency fluctuations, war and/or terrorist attacks
on facilities either owned or where equipment or services are or may be
provided, outcomes of pending and future litigation, including litigation
regarding our liability for damages and insurance coverage for asbestos
exposure, protection and validity of patents and other intellectual property
rights, increasing competition by foreign and domestic companies, changes in
financial markets, compliance with debt covenants, monetization of certain power
systems facilities, implementation of our restructuring plan, recoverability of
claims against customers and others, changes in estimates used in 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 our
control. You should consider the areas of risk described above in connection
with any forward-looking statements that may be made by us.
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Foster Wheeler Ltd. and Subsidiaries
------------------------------------
Consolidated Statement of Earnings - Summary
--------------------------------------------
(In Thousands of Dollars, Except Per Share Amounts)
---------------------------------------------------
Three months ended Six months ended
------------------ ----------------
June 2004 June 2003 June 2004 June 2003
----------- ----------- ----------- ----------
Unfilled orders $ 2,276,930 $ 3,345,266 $ 2,276,930 $ 3,345,266
New orders booked 707,044 647,088 1,336,971 1,123,423
=========== =========== =========== ===========
Revenues:
Operating revenues 635,019 922,238 1,301,378 1,706,330
Other income 34,821 13,568 70,770 40,344
----------- ----------- ----------- -----------
Total revenues and
other income 669,840 935,806 1,372,148 1,746,674
----------- ----------- ----------- -----------
Cost and Expenses:
Cost of operating
revenues 528,994 859,215 1,120,141 1,586,344
Selling, general &
administrative
expenses 56,458 47,388 113,642 99,128
Other deductions 7,158 25,674 25,575 46,918
Minority interest 1,989 3,035 2,971 4,358
Interest expense 20,747 18,410 41,387 35,832
Mandatorily redeemable
preferred security
distributions of
subsidiary trust 4,487 8,859
Interest expense on
subordinated
deferrable interest
debentures 4,901 9,693
----------- ----------- ----------- -----------
Total costs and
expenses 620,247 958,209 1,313,409 1,781,439
----------- ----------- ----------- -----------
Earnings /(loss) before
income taxes 49,593 (22,403) 58,739 (34,765)
Provision for income
taxes 19,758 6,935 33,202 14,393
----------- ----------- ----------- -----------
Net earnings/(loss) 29,835 (29,338) 25,537 (49,158)
----------- ----------- ----------- -----------
Other comprehensive
income / (loss):
Foreign currency
translation
adjustments (5,694) 99 (9,698) (716)
Minimum pension
liability adjustment (13,511) (13,511)
----------- ----------- ----------- -----------
Net comprehensive
income / (loss) $ 24,141 $ (42,750)$ 15,839 $ (63,385)
=========== =========== =========== ===========
Earnings/(loss) per
share :
Basic $0.73 ($0.72) $0.62 ($1.20)
=========== =========== =========== ===========
Diluted $0.61 ($0.72) $0.60 ($1.20)
=========== =========== =========== ===========
Shares outstanding (in
thousands) :
Basic: weighted-
average number of
shares outstanding 41,055 41,044 41,055 41,039
Diluted : effect of
share options and
convertible debt 13,095 (*) 13,108 (*)
----------- ----------- ----------- -----------
Total diluted 54,150 41,044 54,163 41,039
=========== =========== =========== ===========
See attached schedule of gains and charges for the three and six
months ended June 2004 and 2003.
(*) The effect of the share options and convertible debt were not
included in the calculation of diluted earnings per share as they
were antidilutive due to the loss.
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Foster Wheeler Ltd. and Subsidiaries
------------------------------------
Major Business Groups
---------------------
( In Thousands of Dollars )
---------------------------
Three months ended Six months ended
------------------ ----------------
June 2004 June 2003 June 2004 June 2003
--------- --------- --------- ---------
Engineering and
Construction (EC)
- ------------------
Unfilled orders $1,586,906 $2,188,642 $1,586,906 $2,188,642
New orders booked 601,933 460,384 1,075,425 723,157
Revenues 426,128 529,184 846,484 1,011,989
---------------------- ----------------------
EBITDA 55,926 13,940 91,130 27,058
Less: Interest expense 2,817 1,367 5,205 1,707
Less: Depreciation and
amortization 2,697 2,223 4,951 5,196
---------------------- ----------------------
Earnings before income
taxes 50,412 10,350 80,974 20,155
Provision for income
taxes 12,467 2,213 22,592 5,180
---------------------- ----------------------
Net earnings 37,945 8,137 58,382 14,975
---------------------- ----------------------
Energy (E)
- ----------
Unfilled orders 692,781 1,163,620 692,781 1,163,620
New orders booked 105,211 187,366 261,503 397,516
Revenues 256,324 409,288 526,129 735,715
---------------------- ----------------------
EBITDA 48,332 29,322 68,713 60,166
Less: Interest expense 8,324 7,208 16,454 12,434
Less: Depreciation and
amortization 5,058 5,239 10,208 11,063
---------------------- ----------------------
Earnings before income
taxes 34,950 16,875 42,051 36,669
Provision for income
taxes 17,948 6,129 25,948 12,626
---------------------- ----------------------
Net earnings 17,002 10,746 16,103 24,043
---------------------- ----------------------
Corporate and Financial
Services (CF) (2)
- ----------------------
Unfilled orders (2,757) (6,996) (2,757) (6,996)
New orders booked (100) (662) 43 2,750
Revenues (12,612) (2,666) (465) (1,030)
---------------------- ----------------------
EBITDA (20,662) (34,294) (33,620) (59,014)
Less: Interest expense
(1) 14,507 14,322 29,421 30,550
Less: Depreciation and
amortization 600 1,012 1,245 2,025
---------------------- ----------------------
Loss before income taxes (35,769) (49,628) (64,286) (91,589)
Provision for income
taxes (10,657) (1,407) (15,338) (3,413)
---------------------- ----------------------
Net loss (25,112) (48,221) (48,948) (88,176)
---------------------- ----------------------
Total
- -----
Unfilled orders 2,276,930 3,345,266 2,276,930 3,345,266
New orders booked 707,044 647,088 1,336,971 1,123,423
Revenues 669,840 935,806 1,372,148 1,746,674
---------------------- ----------------------
EBITDA 83,596 8,968 126,223 28,210
Less: Interest expense
(1) 25,648 22,897 51,080 44,691
Less: Depreciation and
amortization 8,355 8,474 16,404 18,284
---------------------- ----------------------
Earnings/(loss) before
income taxes 49,593 (22,403) 58,739 (34,765)
Provision for income
taxes 19,758 6,935 33,202 14,393
---------------------- ----------------------
Net earnings / (loss) 29,835 (29,338) 25,537 (49,158)
---------------------- ----------------------
See attached schedule of gains and charges by group for the three and
six months ended June 2004 and 2003.
(1)Includes interest expense on subordinated deferrable debentures in
2004 and mandatorily redeemable preferred security distributions
of subsidiary trust in 2003.
(2)Includes intersegment eliminations
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Foster Wheeler Ltd.
Summary of gains / (charges)
(In Thousands of Dollars)
Three months ended June 25, 2004
------------------------------------
E & C Energy C & F Total
--------- -------- -------- --------
Gain on asbestos settlements 1,700 1,700
Gain on sale of assets 8,700 8,700
Re-evaluation of contract cost
estimates 43,700 4,100 47,800
Restructuring and credit agreement
costs (4,500) (4,500)
Severance (200) (200)
Legal and other 2,900 2,900
--------- -------- -------- --------
Total 52,200 7,000 (2,800) 56,400
--------- -------- -------- --------
Six months ended June 25, 2004
------------------------------------
E & C Energy C & F Total
--------- -------- -------- --------
Gain on asbestos settlements 13,400 13,400
Gain on sale of assets 19,200 19,200
Re-evaluation of contract cost
estimates 43,700 (20,500) 23,200
Restructuring and credit agreement
costs (13,800) (13,800)
Severance (600) (600)
Legal and other 2,900 2,900
--------- -------- -------- --------
Total 62,300 (17,600) (400) 44,300
--------- -------- -------- --------
Three months ended June 27, 2003
------------------------------------
E & C Energy C & F Total
--------- -------- -------- --------
Gain on sale of assets
Re-evaluation of contract cost
estimates (15,000) (7,000) (22,000)
Recovery of project claims 2,500 2,500
Restructuring and credit agreement
costs (10,100) (10,100)
Severance (1,000) (1,400) (2,400)
Increased pension and
postretirement medical costs 1,600 (7,700) (6,100)
Legal and other (3,500) (3,500)
--------- -------- -------- --------
Total (11,900) (7,000) (22,700) (41,600)
--------- -------- -------- --------
Six months ended June 27, 2003
------------------------------------
E & C Energy C & F Total
--------- -------- -------- --------
Gain on sale of assets 15,300 15,300
Re-evaluation of contract cost
estimates (36,100) (2,000) (38,100)
Recovery of project claims 2,500 2,500
Restructuring and credit agreement
costs (20,500) (20,500)
Severance (3,800) (3,300) (1,500) (8,600)
Increased pension and
postretirement medical costs 1,600 (7,700) (6,100)
Legal and other (5,300) (5,300)
--------- -------- -------- --------
Total (20,500) (5,300) (35,000) (60,800)
--------- -------- -------- --------
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Foster Wheeler Ltd. and Subsidiaries
Condensed Consolidated Balance Sheet
(In Thousands of Dollars)
June 25, December 26,
ASSETS 2004 2003
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 321,829 $ 364,095
Short-term investments 25,342 13,390
Accounts and notes receivable 472,026 556,414
Contracts in process and inventories 146,335 173,293
Prepaid, deferred and refundable income taxes 24,093 37,160
Prepaid expenses 28,348 30,024
----------- -----------
Total current assets 1,017,973 1,174,376
----------- -----------
Land, buildings and equipment 605,655 622,729
Less accumulated depreciation 321,118 313,114
----------- -----------
Net book value 284,537 309,615
Restricted cash 57,507 52,685
Notes and accounts receivable - long-term 10,879 6,776
Investment and advances 100,957 98,651
Goodwill, net 51,015 51,121
Other intangible assets, net 69,456 71,568
Prepaid pension cost and related benefit asset 6,903 7,240
Asbestos-related insurance recovery receivable 455,394 495,400
Other assets 173,683 182,151
Deferred income taxes 61,656 56,947
----------- -----------
TOTAL ASSETS $2,289,960 $2,506,530
----------- -----------
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current installments on long-term debt $ 137,468 $ 20,979
Bank loans 121
Accounts payable 243,032 305,286
Accrued expenses 337,827 381,376
Estimated costs to complete long-term
contracts 454,551 552,754
Advance payments by customers 74,095 50,248
Income taxes 68,041 62,996
----------- -----------
Total current liabilities 1,315,014 1,373,760
----------- -----------
Corporate and other debt less current
installments 205,436 333,729
Special-purpose project debt less current
installments 112,760 119,281
Capital lease obligations 63,882 62,373
Deferred income taxes 8,644 9,092
Pension, postretirement and other employee
benefits 301,773 295,133
Asbestos-related liability 472,891 526,200
Other long-term liabilities and minority
interest 121,029 124,792
Subordinated Robbins exit funding obligations 112,418 111,589
Convertible subordinated notes 210,000 210,000
Mandatorily redeemable preferred securities of
subsidiary trust holding solely junior
subordinated deferrable interest debentures 175,000
Deferred accrued mandatorily redeemable
preferred security distributions of
subsidiary trust 38,021
Subordinated deferrable interest debentures 175,000
Deferred accrued interest on subordinated
deferrable interest debentures 47,714
Commitments and contingencies - -
----------- -----------
TOTAL LIABILITIES 3,146,561 3,378,970
----------- -----------
SHAREHOLDERS' DEFICIT:
Common Stock 40,772 40,772
Paid-in capital 201,841 201,841
Accumulated deficit (785,517) (811,054)
Accumulated other comprehensive loss (313,697) (303,999)
----------- -----------
TOTAL SHAREHOLDERS' DEFICIT (856,601) (872,440)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $2,289,960 $2,506,530
----------- -----------
CONTACT: Foster Wheeler Ltd.
Media:
Maureen Bingert, 908-730-4444
or
Investors:
John Doyle, 908-730-4270
or
Other Inquiries:
908-730-4000