Foster Wheeler LTD. and Subsidiaries Consolidated Statement of Operations and Comprehensive Loss (In Thousands of Dollars, Except Per Share Amounts) Three months ended ----------------------- March 26, March 28, 2004 2003 ----------- ----------- Unfilled orders $2,138,207 $3,530,220 New orders booked 629,927 476,335 =========== =========== Revenues: Operating revenues 666,359 784,092 Other income 35,949 26,776 ----------- ----------- Total revenues 702,308 810,868 ----------- ----------- Cost and Expenses: Cost of operating revenues 591,147 727,129 Selling, general and administrative expenses 57,184 51,740 Other deductions 18,417 21,244 Minority interest 982 1,323 Interest expense 20,640 17,422 Mandatorily redeemable preferred security distributions of subsidiary trust 4,372 Interest expense on subordinated deferrable interest debentures 4,792 ----------- ----------- Total costs and expenses 693,162 823,230 ----------- ----------- Earnings/(loss) before income taxes 9,146 (12,362) Provision for income taxes 13,444 7,458 ----------- ----------- Net loss $(4,298) $(19,820) =========== =========== Other comprehensive loss : Foreign currency translation adjustments (4,004) (815) ----------- ----------- Net comprehensive loss $(8,302) $(20,635) =========== =========== Loss per share : Basic ($0.10) ($0.48) =========== =========== Diluted ($0.10) ($0.48) =========== =========== Shares outstanding( in thousands) : Basic: weighted-average number of shares outstanding 41,055 41,035 Diluted: effect of share options * * ----------- ----------- Total diluted 41,055 41,035 =========== =========== Notes: 1) Includes the following pre-tax items in the three months ended March 2004: Gain on sale of assets of $10,500; Net gain on asbestos settlements of $11,700; Contract cost reserves of $24,600; Restructuring and severance cost of $9,700. 2) Includes the following pre-tax items in the three months ended March 2003: Gain on sale of environmental assets of $15,300; Environmental contract and other cost reserves of $16,100; Restructuring cost of $10,400; Severance and other cost of $8,000. * 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. Foster Wheeler Ltd. and Subsidiaries Major Business Groups ( In thousands of Dollars ) Three months ended ----------------------- March 26, March 28, 2004 2003 ----------- ----------- Engineering and Construction (EC) (1,2) --------------------------------------- Unfilled orders $1,328,495 $2,195,693 New orders booked 473,492 262,773 Revenues 420,356 482,805 Interest expense 268 (630) Earnings before income taxes 30,562 9,805 EBITDA 33,084 12,148 Energy (E) (1,2) ---------------- Unfilled orders 812,606 1,341,753 New orders booked 156,292 210,150 Revenues 269,805 326,427 Interest expense 4,762 4,868 Earnings before income taxes 7,101 19,794 EBITDA 17,013 30,486 Corporate and Financial Services (CF) (1,2,4) --------------------------------------------- Unfilled orders (2,894) (7,226) New orders booked 143 3,412 Revenues 12,147 1,636 Interest expense (3) 20,402 17,556 Loss before income taxes (28,517) (41,961) EBITDA (7,470) (23,392) Total ----- Unfilled orders 2,138,207 3,530,220 New orders booked 629,927 476,335 Revenues 702,308 810,868 Interest expense (3) 25,432 21,794 Earnings/(loss) before income taxes 9,146 (12,362) Provision for income taxes 13,444 7,458 ----------- ----------- Net loss (4,298) (19,820) EBITDA $42,627 $19,242 1) Includes in the three months ended March 2004: Gain on sale of assets in EC of $10,500; Net gain on asbestos settlements in CF of $11,700; Contract cost reserves in E of $24,600; Restructuring and severance cost of $9,700 in (EC $400; CF $9,300). 2) Includes in the three months ended March 2003: Gain on sale of assets in EC of $15,300; Contract cost reserves of $16,100 in (EC $21,100; E ($5,000)); Restructuring cost in CF of $10,400; Severance and other cost of $8,000 in (EC $2,800; E $3,300; CF $1,900). 3) Includes interest expense on subordinated deferrable interest debentures in 2004 and mandatorily redeemable preferred security distributions of subsidiary trust in 2003. 4) Includes intersegment eliminations. Foster Wheeler Ltd. and Subsidiaries Condensed Consolidated Balance Sheet (In Thousands of Dollars) ----------- ----------- March 26, Dec. 26, ASSETS 2004 2003 ----------- ----------- CURRENT ASSETS: Cash and cash equivalents $375,614 $364,095 Short-term investments 5,128 13,390 Accounts and notes receivable 522,442 556,414 Contracts in process and inventories 127,184 173,293 Prepaid, deferred and refundable income taxes 30,663 37,160 Prepaid expenses 31,965 30,024 ----------- ----------- Total current assets 1,092,996 1,174,376 ----------- ----------- Land, buildings and equipment 622,172 622,729 Less accumulated depreciation 318,566 313,114 ----------- ----------- Net book value 303,606 309,615 Restricted cash 73,021 52,685 Notes and accounts receivable - long-term 6,280 6,776 Investment and advances 88,786 98,651 Goodwill, net 50,993 51,121 Other intangible assets, net 70,308 71,568 Prepaid pension cost and related benefit asset 7,131 7,240 Asbestos-related insurance recovery receivable 480,786 495,400 Other assets 184,536 182,151 Deferred income taxes 60,500 56,947 ----------- ----------- TOTAL ASSETS $2,418,943 $2,506,530 ----------- ----------- LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES: Current installments on long-term debt $20,945 $20,979 Bank loans 121 Accounts payable and accrued expenses 585,262 686,662 Estimated costs to complete long-term contracts 578,049 552,754 Advance payments by customers 67,865 50,248 Income taxes 60,729 62,996 ----------- ----------- Total current liabilities 1,312,850 1,373,760 ----------- ----------- Corporate and other debt less current installments 332,348 333,729 Special-purpose project debt less current installments 115,735 119,281 Capital lease obligations 62,295 62,373 Deferred income taxes 11,164 9,092 Pension, postretirement and other employee benefits 303,961 295,133 Asbestos-related liability 502,287 526,200 Other long-term liabilities and minority interest 119,229 124,792 Subordinated Robbins exit funding obligations 112,003 111,589 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 42,813 Commitments and contingencies - - ----------- ----------- TOTAL LIABILITIES. 3,299,685 3,378,970 ----------- ----------- SHAREHOLDERS' DEFICIT: Common Stock 40,772 40,772 Paid-in capital 201,841 201,841 Retained deficit (815,352) (811,054) Accumulated other comprehensive loss (308,003) (303,999) ----------- ----------- TOTAL SHAREHOLDERS' DEFICIT (880,742) (872,440) ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $2,418,943 $2,506,530 ----------- ----------- Foster Wheeler Ltd. Summary of Charges / (Gains) (In Thousands of Dollars) ---------------------------------- Three months ended March 26, 2004 ---------------------------------- E & C Energy C & F Total -------- ------- -------- -------- (Gains) on asbestos settlements (11,700) (11,700) (Gains) on sale of assets (10,500) (10,500) Re-evaluation of contract cost estimates 24,600 24,600 Restructuring and credit agreement costs 9,300 9,300 Severance cost 400 400 Legal settlements and other provisions -------- ------- -------- -------- Total (10,100) 24,600 (2,400) 12,100 -------- ------- -------- -------- --------------------------------- Three months ended March 28, 2003 --------------------------------- E & C Energy C & F Total -------- ------- ------- -------- (Gains) on asbestos settlements (Gains) on sale of assets (15,300) (15,300) Re-evaluation of contract cost estimates 21,100 (5,000) 16,100 Restructuring and credit agreement costs 10,400 10,400 Severance cost 2,800 3,300 100 6,200 Legal settlements and other provisions 1,800 1,800 -------- ------- ------- -------- Total 8,600 (1,700) 12,300 19,200 -------- ------- ------- -------- Foster Wheeler Ltd. and Subsidiaries Reconciliation of EBITDA to Net Earnings/(Loss) (In Thousands of Dollars) ------------------- Three months ended: ------------------- March 26, March 28, 2004 2003 --------- --------- Consolidated Total ------------------ EBITDA $42,627 $19,242 Less Interest Expense (*) 25,432 21,794 Less Depreciation and Amortization 8,049 9,810 --------- --------- Earnings/(Loss) Before Income Taxes 9,146 (12,362) Provision for Income Taxes 13,444 7,458 --------- --------- Net Loss (4,298) (19,820) --------- --------- Engineering & Construction -------------------------- EBITDA 33,084 12,148 Less Interest Expense 268 (630) Less Depreciation and Amortization 2,254 2,973 --------- --------- Earnings Before Income Taxes 30,562 9,805 Provision for Income Taxes 10,125 2,967 --------- --------- Net Earnings 20,437 6,838 --------- --------- Energy ------ EBITDA 17,013 30,486 Less Interest Expense 4,762 4,868 Less Depreciation and Amortization 5,150 5,824 --------- --------- Earnings Before Income Taxes 7,101 19,794 Provision for Income Taxes 8,000 6,497 --------- --------- Net (Loss)/Earnings (899) 13,297 --------- --------- Corporate & Financial --------------------- EBITDA (7,470) (23,392) Less Interest Expense (*) 20,402 17,556 Less Depreciation and Amortization 645 1,013 --------- --------- Loss Before Income Taxes (28,517) (41,961) Provision for Income Taxes (4,681) (2,006) --------- --------- Net Loss $(23,836) $(39,955) --------- --------- (*) Includes interest expense on subordinated deferrable interest debentures in 2004 and mandatorily redeemable preferred security distributions of subsidiary trust in 2003.