UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended June 30, 2014 | |
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or | |
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o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
Commission File Number: 1-16129
FLUOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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33-0927079 |
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6700 Las Colinas Boulevard |
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75039 |
469-398-7000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller reporting company o |
(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of July 25, 2014, 157,512,676 shares of the registrants common stock, $0.01 par value, were outstanding.
FLUOR CORPORATION
FORM 10-Q
June 30, 2014
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
UNAUDITED
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(in thousands, except per share amounts) |
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2014 |
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2013 |
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2014 |
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2013 |
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TOTAL REVENUE |
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$ |
5,251,664 |
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$ |
7,190,328 |
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$ |
10,636,300 |
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$ |
14,375,952 |
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TOTAL COST OF REVENUE |
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4,906,352 |
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6,857,472 |
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9,978,656 |
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13,701,222 |
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OTHER (INCOME) AND EXPENSES |
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Corporate general and administrative expense |
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56,711 |
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31,918 |
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94,484 |
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64,520 |
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Interest expense |
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7,445 |
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6,448 |
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14,342 |
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13,403 |
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Interest income |
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(4,133 |
) |
(4,216 |
) |
(7,939 |
) |
(8,232 |
) | ||||
Total cost and expenses |
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4,966,375 |
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6,891,622 |
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10,079,543 |
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13,770,913 |
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EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES |
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285,289 |
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298,706 |
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556,757 |
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605,039 |
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INCOME TAX EXPENSE |
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90,126 |
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91,366 |
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168,284 |
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184,443 |
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EARNINGS FROM CONTINUING OPERATIONS |
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195,163 |
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207,340 |
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388,473 |
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420,596 |
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES |
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(85,183 |
) |
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(85,183 |
) |
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NET EARNINGS |
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109,980 |
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207,340 |
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303,290 |
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420,596 |
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LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
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32,190 |
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45,928 |
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76,426 |
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92,726 |
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NET EARNINGS ATTRIBUTABLE TO FLUOR CORPORATION |
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$ |
77,790 |
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$ |
161,412 |
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$ |
226,864 |
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$ |
327,870 |
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AMOUNTS ATTRIBUTABLE TO FLUOR CORPORATION |
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Earnings from continuing operations |
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$ |
162,973 |
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$ |
161,412 |
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$ |
312,047 |
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$ |
327,870 |
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Loss from discontinued operations, net of taxes |
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(85,183 |
) |
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(85,183 |
) |
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Net earnings |
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$ |
77,790 |
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$ |
161,412 |
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$ |
226,864 |
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$ |
327,870 |
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BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO FLUOR CORPORATION |
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Earnings from continuing operations |
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$ |
1.03 |
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$ |
0.99 |
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$ |
1.96 |
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$ |
2.02 |
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Loss from discontinued operations, net of taxes |
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(0.54 |
) |
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(0.54 |
) |
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Net earnings |
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$ |
0.49 |
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$ |
0.99 |
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$ |
1.42 |
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$ |
2.02 |
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DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO FLUOR CORPORATION |
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Earnings from continuing operations |
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$ |
1.02 |
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$ |
0.98 |
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$ |
1.93 |
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$ |
2.00 |
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Loss from discontinued operations, net of taxes |
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(0.54 |
) |
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(0.52 |
) |
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Net earnings |
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$ |
0.48 |
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$ |
0.98 |
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$ |
1.41 |
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$ |
2.00 |
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SHARES USED TO CALCULATE EARNINGS PER SHARE |
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BASIC |
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158,465 |
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162,797 |
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159,339 |
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162,603 |
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DILUTED |
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160,454 |
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164,135 |
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161,407 |
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164,064 |
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DIVIDENDS DECLARED PER SHARE |
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$ |
0.21 |
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$ |
0.16 |
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$ |
0.42 |
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$ |
0.32 |
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See Notes to Condensed Consolidated Financial Statements.
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
UNAUDITED
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(in thousands) |
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2014 |
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2013 |
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2014 |
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2013 |
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NET EARNINGS |
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$ |
109,980 |
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$ |
207,340 |
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$ |
303,290 |
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$ |
420,596 |
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OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |
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Foreign currency translation adjustment |
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13,438 |
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(41,303 |
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709 |
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(56,747 |
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Ownership share of equity method investees other comprehensive income |
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12,343 |
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5,877 |
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10,345 |
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6,091 |
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Defined benefit pension and postretirement plan adjustments |
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1,509 |
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1,584 |
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3,157 |
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8,825 |
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Unrealized gain (loss) on derivative contracts |
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934 |
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(1,994 |
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505 |
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(1,842 |
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Unrealized gain (loss) on debt securities |
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231 |
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(956 |
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213 |
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(1,097 |
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TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX |
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28,455 |
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(36,792 |
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14,929 |
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(44,770 |
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COMPREHENSIVE INCOME |
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138,435 |
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170,548 |
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318,219 |
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375,826 |
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LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
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32,555 |
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46,488 |
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72,452 |
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92,779 |
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COMPREHENSIVE INCOME ATTRIBUTABLE TO FLUOR CORPORATION |
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$ |
105,880 |
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$ |
124,060 |
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$ |
245,767 |
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$ |
283,047 |
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See Notes to Condensed Consolidated Financial Statements.
FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
UNAUDITED
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June 30, |
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December 31, |
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(in thousands, except share and per share amounts) |
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2014 |
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2013 |
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ASSETS | |||||||
CURRENT ASSETS |
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Cash and cash equivalents ($458,846 and $488,426 related to variable interest entities (VIEs)) |
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$ |
2,182,809 |
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$ |
2,283,582 |
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Marketable securities, current ($64,123 and $64,084 related to VIEs) |
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159,702 |
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186,023 |
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Accounts and notes receivable, net ($190,715 and $220,705 related to VIEs) |
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1,400,452 |
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1,274,024 |
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Contract work in progress ($264,139 and $238,895 related to VIEs) |
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1,647,520 |
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1,740,821 |
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Deferred taxes |
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327,709 |
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245,796 |
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Other current assets |
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286,653 |
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273,437 |
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Total current assets |
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6,004,845 |
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6,003,683 |
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Marketable securities, noncurrent |
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333,035 |
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275,402 |
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Property, plant and equipment (PP&E) ((net of accumulated depreciation of $1,135,634 and $1,106,925) (net PP&E of $72,548 and $87,774 related to VIEs)) |
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984,578 |
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966,953 |
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Investments and goodwill |
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306,672 |
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312,293 |
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Deferred taxes |
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113,935 |
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139,773 |
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Deferred compensation trusts |
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401,564 |
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388,408 |
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Other |
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254,322 |
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237,338 |
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TOTAL ASSETS |
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$ |
8,398,951 |
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$ |
8,323,850 |
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LIABILITIES AND EQUITY | |||||||
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CURRENT LIABILITIES |
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Trade accounts payable ($313,088 and $311,892 related to VIEs) |
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$ |
1,645,880 |
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$ |
1,641,109 |
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Convertible senior notes and other borrowings |
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29,217 |
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29,839 |
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Advance billings on contracts ($277,639 and $327,820 related to VIEs) |
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776,702 |
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743,524 |
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Accrued salaries, wages and benefits ($53,426 and $64,064 related to VIEs) |
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683,950 |
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753,452 |
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Other accrued liabilities ($27,526 and $25,517 related to VIEs) |
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435,009 |
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239,236 |
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Total current liabilities |
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3,570,758 |
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3,407,160 |
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LONG-TERM DEBT DUE AFTER ONE YEAR |
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496,825 |
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496,604 |
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NONCURRENT LIABILITIES |
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542,324 |
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539,263 |
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CONTINGENCIES AND COMMITMENTS |
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EQUITY |
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Shareholders equity |
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Capital stock |
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Preferred authorized 20,000,000 shares ($0.01 par value); none issued |
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Common authorized 375,000,000 shares ($0.01 par value); issued and outstanding 157,599,815 and 161,287,818 shares in 2014 and 2013, respectively |
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1,576 |
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1,613 |
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Additional paid-in capital |
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12,911 |
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Accumulated other comprehensive loss |
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(279,298 |
) |
(298,201 |
) | ||
Retained earnings |
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3,924,270 |
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4,040,664 |
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Total shareholders equity |
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3,646,548 |
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3,756,987 |
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Noncontrolling interests |
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142,496 |
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123,836 |
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Total equity |
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3,789,044 |
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3,880,823 |
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TOTAL LIABILITIES AND EQUITY |
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$ |
8,398,951 |
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$ |
8,323,850 |
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See Notes to Condensed Consolidated Financial Statements.
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
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Six Months Ended |
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June 30, |
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(in thousands) |
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2014 |
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2013 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net earnings |
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$ |
303,290 |
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$ |
420,596 |
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Adjustments to reconcile net earnings to cash provided (utilized) by operating activities: |
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Loss from discontinued operations, net of taxes |
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85,183 |
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|
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Depreciation of fixed assets |
|
94,863 |
|
108,781 |
| ||
Amortization of intangibles |
|
446 |
|
445 |
| ||
Loss (gain) on sales of equity method investments |
|
2,158 |
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(2,370 |
) | ||
Losses from equity method investments, net of distributions |
|
1,027 |
|
4,648 |
| ||
Gain on sale of property, plant and equipment |
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(12,146 |
) |
(6,797 |
) | ||
Restricted stock and stock option amortization |
|
23,761 |
|
20,859 |
| ||
Deferred compensation trust |
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(13,155 |
) |
(16,271 |
) | ||
Deferred compensation obligation |
|
16,446 |
|
16,367 |
| ||
Deferred taxes |
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(22,892 |
) |
28,934 |
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Excess tax benefit from stock-based plans |
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(3,857 |
) |
(3,418 |
) | ||
Retirement plan contributions, net of accruals |
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(3,628 |
) |
(1,519 |
) | ||
Changes in operating assets and liabilities |
|
(38,785 |
) |
(340,416 |
) | ||
Cash outflows from discontinued operations |
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(3,115 |
) |
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| ||
Other items |
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(3,867 |
) |
5,693 |
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Cash provided by operating activities |
|
425,729 |
|
235,532 |
| ||
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchases of marketable securities |
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(197,656 |
) |
(324,436 |
) | ||
Proceeds from the sales and maturities of marketable securities |
|
164,903 |
|
285,543 |
| ||
Capital expenditures |
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(148,916 |
) |
(121,792 |
) | ||
Proceeds from disposal of property, plant and equipment |
|
47,105 |
|
32,476 |
| ||
Proceeds from sales of equity method investments |
|
44,000 |
|
3,005 |
| ||
Investments in partnerships and joint ventures |
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(17,999 |
) |
(32,828 |
) | ||
Consolidation of a variable interest entity |
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|
|
24,675 |
| ||
Acquisitions |
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|
|
(7,674 |
) | ||
Other items |
|
1,959 |
|
2,563 |
| ||
Cash utilized by investing activities |
|
(106,604 |
) |
(138,468 |
) | ||
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|
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CASH FLOWS FROM FINANCING ACTIVITIES |
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|
|
|
| ||
Repurchase of common stock |
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(323,500 |
) |
|
| ||
Dividends paid |
|
(59,681 |
) |
(26,206 |
) | ||
Repayment of 5.625% Municipal Bonds |
|
|
|
(17,795 |
) | ||
Repayment of convertible debt and notes payable |
|
(73 |
) |
(8,569 |
) | ||
Distributions paid to noncontrolling interests |
|
(44,284 |
) |
(45,809 |
) | ||
Capital contributions by noncontrolling interests |
|
190 |
|
1,462 |
| ||
Taxes paid on vested restricted stock |
|
(11,141 |
) |
(11,252 |
) | ||
Stock options exercised |
|
15,378 |
|
11,902 |
| ||
Excess tax benefit from stock-based plans |
|
3,857 |
|
3,418 |
| ||
Other items |
|
(1,870 |
) |
(657 |
) | ||
Cash utilized by financing activities |
|
(421,124 |
) |
(93,506 |
) | ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash |
|
1,226 |
|
(53,023 |
) | ||
|
|
|
|
|
| ||
Decrease in cash and cash equivalents |
|
(100,773 |
) |
(49,465 |
) | ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
|
2,283,582 |
|
2,154,541 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
|
$ |
2,182,809 |
|
$ |
2,105,076 |
|
See Notes to Condensed Consolidated Financial Statements.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
(1) Principles of Consolidation
The Condensed Consolidated Financial Statements do not include footnotes and certain financial information normally presented annually under accounting principles generally accepted in the United States and, therefore, should be read in conjunction with the companys December 31, 2013 Annual Report on Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three and six months ended June 30, 2014 may not necessarily be indicative of results that can be expected for the full year.
The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly its consolidated financial position as of June 30, 2014 and its consolidated results of operations and cash flows for the interim periods presented. All significant intercompany transactions of consolidated subsidiaries are eliminated. Certain amounts in 2013 have been reclassified to conform to the 2014 presentation. Management has evaluated all material events occurring subsequent to the date of the financial statements up to the date this quarterly report is filed on Form 10-Q.
(2) Recent Accounting Pronouncements
New accounting pronouncements implemented by the company during the six months ended June 30, 2014 or requiring implementation in future periods are discussed below or elsewhere in the notes, where appropriate.
In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. ASU 2014-12 is effective for interim and annual reporting periods beginning after December 15, 2015. Management does not expect the adoption of ASU 2014-12 to have a material impact on the companys financial position, results of operations or cash flows in that it is currently not applicable.
In June 2014, the FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, which makes limited amendments to the guidance in Accounting Standards Codification (ASC) 860, Transfers and Servicing, on accounting for certain repurchase agreements (repos). The ASU (1) requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements); (2) eliminates accounting guidance on linked repurchase financing transactions; and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions and repurchase-to-maturity transactions) accounted for as secured borrowings. This ASU is effective for interim and annual reporting periods beginning after December 15, 2014. Management does not expect the adoption of ASU 2014-11 to have a material impact on the companys financial position, results of operations or cash flows.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 outlines a five-step process for revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards, and also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Major provisions include determining which goods and services are distinct and require separate accounting, how variable consideration (which may include change orders and claims) is recognized, whether revenue should be recognized at a point in time or over time and ensuring the time value of money is considered in the transaction price. This ASU is effective for interim and annual reporting periods beginning after December 15, 2016 and can be applied either retrospectively to each prior period presented or as a cumulative-effect adjustment as of the date of adoption. Management is currently evaluating the impact of adopting ASU 2014-09 on the companys financial position, results of operations and cash flows.
In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. This ASU requires discontinued operations treatment for disposals of a component or group of components of an entity that represent a strategic shift that has or will have a major impact on an entitys operations or financial results. ASU 2014-08 also expands the scope of ASC 205-20,
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
Discontinued Operations, to disposals of equity method investments and acquired businesses held for sale. This ASU is effective prospectively for all disposals or classifications as held for sale that occur in interim and annual reporting periods beginning after December 15, 2014. Management does not expect the adoption of ASU 2014-08 to have a material impact on the companys financial position, results of operations or cash flows.
In January 2014, the FASB issued ASU 2014-05, Service Concession Arrangements. This ASU clarifies that, unless certain circumstances are met, operating entities should not account for certain concession arrangements with public-sector entities as leases and should not recognize the related infrastructure as property, plant and equipment. This ASU is effective for interim and annual reporting periods beginning after December 15, 2014. Management does not expect the adoption of ASU 2014-05 to have a material impact on the companys financial position, results of operations or cash flows.
In the first quarter of 2014, the company adopted ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU clarifies the financial statement presentation of unrecognized tax benefits in certain circumstances. The adoption of ASU 2013-11 did not have an impact on the companys financial position, results of operations or cash flows.
In the first quarter of 2014, the company adopted ASU 2013-07, Liquidation Basis of Accounting, which clarifies when an entity should apply the liquidation basis of accounting. In addition, ASU 2013-07 provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. The adoption of ASU 2013-07 did not have an impact on the companys financial position, results of operations or cash flows.
In the first quarter of 2014, the company adopted ASU 2013-05, Parents Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The objective of ASU 2013-05 is to resolve a practice diversity in circumstances where reporting entities release cumulative translation adjustments into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The adoption of ASU 2013-05 did not have an impact on the companys financial position, results of operations or cash flows.
In the first quarter of 2014, the company adopted ASU 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date, which addresses the recognition, measurement and disclosure of certain obligations including debt arrangements, other contractual obligations and settled litigation and judicial rulings. The adoption of ASU 2013-04 did not have an impact on the companys financial position, results of operations or cash flows.
(3) Discontinued Operations
The company recorded a loss from discontinued operations of $85 million (net of taxes of $47 million) during the three months ended June 30, 2014 in connection with the reassessment of estimated loss contingencies related to the lead business of St. Joe Minerals Corporation (St. Joe) and The Doe Run Company (Doe Run) in Herculaneum, Missouri, which are discontinued operations. In 1994, the company sold its interests in St. Joe and Doe Run, along with all liabilities associated with the lead business, pursuant to a sale agreement in which the buyer agreed to indemnify the company for those liabilities. See further discussion of this matter in Note 14.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
(4) Other Comprehensive Income (Loss)
The tax effects of the components of other comprehensive income (loss) (OCI) for the three months ended June 30, 2014 and 2013 are as follows:
|
|
Three Months Ended |
|
Three Months Ended |
| ||||||||||||||
|
|
June 30, 2014 |
|
June 30, 2013 |
| ||||||||||||||
|
|
|
|
Tax |
|
|
|
|
|
Tax |
|
|
| ||||||
|
|
Before-Tax |
|
Benefit |
|
Net-of-Tax |
|
Before-Tax |
|
Benefit |
|
Net-of-Tax |
| ||||||
(in thousands) |
|
Amount |
|
(Expense) |
|
Amount |
|
Amount |
|
(Expense) |
|
Amount |
| ||||||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign currency translation adjustment |
|
$ |
21,359 |
|
$ |
(7,921 |
) |
$ |
13,438 |
|
$ |
(66,421 |
) |
$ |
25,118 |
|
$ |
(41,303 |
) |
Ownership share of equity method investees other comprehensive income |
|
19,176 |
|
(6,833 |
) |
12,343 |
|
8,272 |
|
(2,395 |
) |
5,877 |
| ||||||
Defined benefit pension and postretirement plan adjustments |
|
2,415 |
|
(906 |
) |
1,509 |
|
2,535 |
|
(951 |
) |
1,584 |
| ||||||
Unrealized gain (loss) on derivative contracts |
|
1,426 |
|
(492 |
) |
934 |
|
(3,191 |
) |
1,197 |
|
(1,994 |
) | ||||||
Unrealized gain (loss) on debt securities |
|
369 |
|
(138 |
) |
231 |
|
(1,530 |
) |
574 |
|
(956 |
) | ||||||
Total other comprehensive income (loss) |
|
44,745 |
|
(16,290 |
) |
28,455 |
|
(60,335 |
) |
23,543 |
|
(36,792 |
) | ||||||
Less: Other comprehensive income attributable to noncontrolling interests |
|
365 |
|
|
|
365 |
|
560 |
|
|
|
560 |
| ||||||
Other comprehensive income (loss) attributable to Fluor Corporation |
|
$ |
44,380 |
|
$ |
(16,290 |
) |
$ |
28,090 |
|
$ |
(60,895 |
) |
$ |
23,543 |
|
$ |
(37,352 |
) |
The tax effects of the components of OCI for the six months ended June 30, 2014 and 2013 are as follows:
|
|
Six Months Ended |
|
Six Months Ended |
| ||||||||||||||
|
|
June 30, 2014 |
|
June 30, 2013 |
| ||||||||||||||
|
|
|
|
Tax |
|
|
|
|
|
Tax |
|
|
| ||||||
|
|
Before-Tax |
|
Benefit |
|
Net-of-Tax |
|
Before-Tax |
|
Benefit |
|
Net-of-Tax |
| ||||||
(in thousands) |
|
Amount |
|
(Expense) |
|
Amount |
|
Amount |
|
(Expense) |
|
Amount |
| ||||||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Foreign currency translation adjustment |
|
$ |
3,559 |
|
$ |
(2,850 |
) |
$ |
709 |
|
$ |
(90,827 |
) |
$ |
34,080 |
|
$ |
(56,747 |
) |
Ownership share of equity method investees other comprehensive income |
|
18,232 |
|
(7,887 |
) |
10,345 |
|
8,353 |
|
(2,262 |
) |
6,091 |
| ||||||
Defined benefit pension and postretirement plan adjustments |
|
5,051 |
|
(1,894 |
) |
3,157 |
|
14,120 |
|
(5,295 |
) |
8,825 |
| ||||||
Unrealized gain (loss) on derivative contracts |
|
781 |
|
(276 |
) |
505 |
|
(2,947 |
) |
1,105 |
|
(1,842 |
) | ||||||
Unrealized gain (loss) on debt securities |
|
340 |
|
(127 |
) |
213 |
|
(1,755 |
) |
658 |
|
(1,097 |
) | ||||||
Total other comprehensive income (loss) |
|
27,963 |
|
(13,034 |
) |
14,929 |
|
(73,056 |
) |
28,286 |
|
(44,770 |
) | ||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests |
|
(3,974 |
) |
|
|
(3,974 |
) |
53 |
|
|
|
53 |
| ||||||
Other comprehensive income (loss) attributable to Fluor Corporation |
|
$ |
31,937 |
|
$ |
(13,034 |
) |
$ |
18,903 |
|
$ |
(73,109 |
) |
$ |
28,286 |
|
$ |
(44,823 |
) |
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
The changes in accumulated other comprehensive income (AOCI) balances by component (after-tax) for the three months ended June 30, 2014 are as follows:
(in thousands) |
|
Foreign |
|
Ownership Share of |
|
Defined Benefit |
|
Unrealized |
|
Unrealized |
|
Accumulated |
| ||||||
Attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of March 31, 2014 |
|
$ |
(8,615 |
) |
$ |
(34,272 |
) |
$ |
(256,649 |
) |
$ |
(8,010 |
) |
$ |
158 |
|
$ |
(307,388 |
) |
Other comprehensive income (loss) before reclassifications |
|
13,202 |
|
12,343 |
|
(548 |
) |
817 |
|
228 |
|
26,042 |
| ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
2,057 |
|
(12 |
) |
3 |
|
2,048 |
| ||||||
Net other comprehensive income |
|
13,202 |
|
12,343 |
|
1,509 |
|
805 |
|
231 |
|
28,090 |
| ||||||
Balance as of June 30, 2014 |
|
$ |
4,587 |
|
$ |
(21,929 |
) |
$ |
(255,140 |
) |
$ |
(7,205 |
) |
$ |
389 |
|
$ |
(279,298 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Attributable to Noncontrolling Interests: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of March 31, 2014 |
|
$ |
3,607 |
|
$ |
|
|
$ |
|
|
$ |
6 |
|
$ |
|
|
$ |
3,613 |
|
Other comprehensive income before reclassifications |
|
236 |
|
|
|
|
|
123 |
|
|
|
359 |
| ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
6 |
|
|
|
6 |
| ||||||
Net other comprehensive income |
|
236 |
|
|
|
|
|
129 |
|
|
|
365 |
| ||||||
Balance as of June 30, 2014 |
|
$ |
3,843 |
|
$ |
|
|
$ |
|
|
$ |
135 |
|
$ |
|
|
$ |
3,978 |
|
The changes in AOCI balances by component (after-tax) for the six months ended June 30, 2014 are as follows:
(in thousands) |
|
Foreign |
|
Ownership Share of |
|
Defined Benefit |
|
Unrealized |
|
Unrealized |
|
Accumulated |
| |||||||
Attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance as of December 31, 2013 |
|
$ |
(164 |
) |
$ |
(32,274 |
) |
$ |
(258,297 |
) |
$ |
(7,642 |
) |
$ |
176 |
|
$ |
(298,201 |
) | |
Other comprehensive income (loss) before reclassifications |
|
4,751 |
|
10,345 |
|
(951 |
) |
273 |
|
202 |
|
14,620 |
| |||||||
Amounts reclassified from AOCI |
|
|
|
|
|
4,108 |
|
164 |
|
11 |
|
4,283 |
| |||||||
Net other comprehensive income |
|
4,751 |
|
10,345 |
|
3,157 |
|
437 |
|
213 |
|
18,903 |
| |||||||
Balance as of June 30, 2014 |
|
$ |
4,587 |
|
$ |
(21,929 |
) |
$ |
(255,140 |
) |
$ |
(7,205 |
) |
$ |
389 |
|
$ |
(279,298 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Attributable to Noncontrolling Interests: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance as of December 31, 2013 |
|
$ |
7,885 |
|
$ |
|
|
$ |
|
|
$ |
67 |
|
$ |
|
|
$ |
7,952 |
| |
Other comprehensive income (loss) before reclassifications |
|
(4,042 |
) |
|
|
|
|
59 |
|
|
|
(3,983 |
) | |||||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
9 |
|
|
|
9 |
| |||||||
Net other comprehensive income (loss) |
|
(4,042 |
) |
|
|
|
|
68 |
|
|
|
(3,974 |
) | |||||||
Balance as of June 30, 2014 |
|
$ |
3,843 |
|
$ |
|
|
$ |
|
|
$ |
135 |
|
$ |
|
|
$ |
3,978 |
| |
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
The changes in AOCI balances by component (after-tax) for the three months ended June 30, 2013 are as follows:
(in thousands) |
|
Foreign |
|
Ownership Share of |
|
Defined Benefit |
|
Unrealized |
|
Unrealized Gain |
|
Accumulated Other |
| ||||||
Attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of March 31, 2013 |
|
$ |
30,961 |
|
$ |
(42,805 |
) |
$ |
(245,483 |
) |
$ |
(8,807 |
) |
$ |
813 |
|
$ |
(265,321 |
) |
Other comprehensive income (loss) before reclassifications |
|
(41,863 |
) |
5,877 |
|
(423 |
) |
(2,525 |
) |
(895 |
) |
(39,829 |
) | ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
2,007 |
|
531 |
|
(61 |
) |
2,477 |
| ||||||
Net other comprehensive income (loss) |
|
(41,863 |
) |
5,877 |
|
1,584 |
|
(1,994 |
) |
(956 |
) |
(37,352 |
) | ||||||
Balance as of June 30, 2013 |
|
$ |
(10,902 |
) |
$ |
(36,928 |
) |
$ |
(243,899 |
) |
$ |
(10,801 |
) |
$ |
(143 |
) |
$ |
(302,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Attributable to Noncontrolling Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of March 31, 2013 |
|
$ |
8,217 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
8,217 |
|
Other comprehensive income before reclassifications |
|
560 |
|
|
|
|
|
|
|
|
|
560 |
| ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net other comprehensive income |
|
560 |
|
|
|
|
|
|
|
|
|
560 |
| ||||||
Balance as of June 30, 2013 |
|
$ |
8,777 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
8,777 |
|
The changes in AOCI balances by component (after-tax) for the six months ended June 30, 2013 are as follows:
(in thousands) |
|
Foreign |
|
Ownership Share of |
|
Defined Benefit |
|
Unrealized |
|
Unrealized Gain |
|
Accumulated Other |
| ||||||
Attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of December 31, 2012 |
|
$ |
45,899 |
|
$ |
(43,019 |
) |
$ |
(252,724 |
) |
$ |
(8,960 |
) |
$ |
954 |
|
$ |
(257,850 |
) |
Other comprehensive income (loss) before reclassifications |
|
(56,801 |
) |
6,091 |
|
4,796 |
|
(2,440 |
) |
(1,012 |
) |
(49,366 |
) | ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
4,029 |
|
599 |
|
(85 |
) |
4,543 |
| ||||||
Net other comprehensive income (loss) |
|
(56,801 |
) |
6,091 |
|
8,825 |
|
(1,841 |
) |
(1,097 |
) |
(44,823 |
) | ||||||
Balance as of June 30, 2013 |
|
$ |
(10,902 |
) |
$ |
(36,928 |
) |
$ |
(243,899 |
) |
$ |
(10,801 |
) |
$ |
(143 |
) |
$ |
(302,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Attributable to Noncontrolling Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of December 31, 2012 |
|
$ |
8,723 |
|
$ |
|
|
$ |
|
|
$ |
1 |
|
$ |
|
|
$ |
8,724 |
|
Other comprehensive income before reclassifications |
|
54 |
|
|
|
|
|
|
|
|
|
54 |
| ||||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) | ||||||
Net other comprehensive income (loss) |
|
54 |
|
|
|
|
|
(1 |
) |
|
|
53 |
| ||||||
Balance as of June 30, 2013 |
|
$ |
8,777 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
8,777 |
|
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
The significant items reclassified out of AOCI and the corresponding location in and impact in the Condensed Consolidated Statement of Earnings are as follows:
|
|
Location in |
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
Condensed Consolidated |
|
June 30, |
|
June 30, |
| ||||||||
(in thousands) |
|
Statement of Earnings |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Component of AOCI: |
|
|
|
|
|
|
|
|
|
|
| ||||
Defined benefit pension plan adjustments |
|
Various accounts(1) |
|
$ |
(3,291 |
) |
$ |
(3,210 |
) |
$ |
(6,572 |
) |
$ |
(6,446 |
) |
Income tax benefit |
|
Income tax expense |
|
1,234 |
|
1,203 |
|
2,464 |
|
2,417 |
| ||||
Net of tax |
|
|
|
$ |
(2,057 |
) |
$ |
(2,007 |
) |
$ |
(4,108 |
) |
$ |
(4,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Unrealized gain (loss) on derivative contracts: |
|
|
|
|
|
|
|
|
|
|
| ||||
Commodity contracts and foreign currency contracts |
|
Total cost of revenue |
|
$ |
420 |
|
$ |
(437 |
) |
$ |
549 |
|
$ |
(125 |
) |
Interest rate contracts |
|
Interest expense |
|
(420 |
) |
(420 |
) |
(839 |
) |
(839 |
) | ||||
Income tax benefit (net) |
|
Income tax expense |
|
6 |
|
326 |
|
117 |
|
366 |
| ||||
Net of tax |
|
|
|
6 |
|
(531 |
) |
(173 |
) |
(598 |
) | ||||
Less: Noncontrolling interests |
|
Net earnings attributable to noncontrolling interests |
|
(6 |
) |
|
|
(9 |
) |
1 |
| ||||
Net of tax and noncontrolling interests |
|
|
|
$ |
12 |
|
$ |
(531 |
) |
$ |
(164 |
) |
$ |
(599 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Unrealized gain (loss) on available-for-sale securities |
|
Corporate general and administrative expense |
|
$ |
(4 |
) |
$ |
98 |
|
$ |
(17 |
) |
$ |
136 |
|
Income tax benefit (expense) |
|
Income tax expense |
|
1 |
|
(37 |
) |
6 |
|
(51 |
) | ||||
Net of tax |
|
|
|
$ |
(3 |
) |
$ |
61 |
|
$ |
(11 |
) |
$ |
85 |
|
(1) Defined benefit pension plan adjustments were reclassified primarily to total cost of revenue and corporate general and administrative expense.
(5) Income Taxes
The effective tax rate on earnings from continuing operations for the three and six months ended June 30, 2014 was 31.6 percent and 30.2 percent, respectively, compared to 30.6 percent and 30.5 percent for the corresponding periods of 2013. The slightly higher effective tax rate for the three months ended June 30, 2014 compared to the same period in the prior year was primarily due to a benefit in 2013 of U.S. federal tax research credits which has not been extended beyond 2013. The effective tax rates for the six months ended June 30, 2014 and 2013 were comparable, though 2013 benefited from the federal tax research credits and 2014 benefited from the recognition of a deferred tax benefit attributable to foreign taxes previously paid on certain unremitted foreign earnings. All periods benefited from earnings attributable to noncontrolling interests for which income taxes are not typically the responsibility of the company. The Companys effective tax rate from discontinued operations for the three and six months ended June 30, 2014 was 35.7 percent.
The company conducts business globally and, as a result, the company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, the Netherlands, South Africa, the United Kingdom and the United States. Although the company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. With few exceptions, the company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2006.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
(6) Cash Paid for Interest and Taxes
Cash paid for interest was $12 million and $11 million for the six months ended June 30, 2014 and 2013, respectively. Income tax payments, net of refunds, were $142 million and $108 million during the six-month periods ended June 30, 2014 and 2013, respectively.
(7) Earnings Per Share
Diluted earnings per share (EPS) reflects the assumed exercise or conversion of all dilutive securities using the treasury stock method.
The calculations of the basic and diluted EPS for the three and six months ended June 30, 2014 and 2013 are presented below:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
(in thousands, except per share amounts) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Amounts attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
| ||||
Earnings from continuing operations |
|
$ |
162,973 |
|
$ |
161,412 |
|
$ |
312,047 |
|
$ |
327,870 |
|
Loss from discontinued operations, net of taxes |
|
(85,183 |
) |
|
|
(85,183 |
) |
|
| ||||
Net earnings |
|
$ |
77,790 |
|
$ |
161,412 |
|
$ |
226,864 |
|
$ |
327,870 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic EPS: |
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding |
|
158,465 |
|
162,797 |
|
159,339 |
|
162,603 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic EPS attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
| ||||
Earnings from continuing operations |
|
$ |
1.03 |
|
$ |
0.99 |
|
$ |
1.96 |
|
$ |
2.02 |
|
Loss from discontinued operations, net of taxes |
|
(0.54 |
) |
|
|
(0.54 |
) |
|
| ||||
Net earnings |
|
$ |
0.49 |
|
$ |
0.99 |
|
$ |
1.42 |
|
$ |
2.02 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted EPS: |
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding |
|
158,465 |
|
162,797 |
|
159,339 |
|
162,603 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Diluted effect: |
|
|
|
|
|
|
|
|
| ||||
Employee stock options, restricted stock units and shares and Value Driver Incentive units |
|
1,555 |
|
972 |
|
1,632 |
|
1,082 |
| ||||
Conversion equivalent of dilutive convertible debt |
|
434 |
|
366 |
|
436 |
|
379 |
| ||||
Weighted average diluted shares outstanding |
|
160,454 |
|
164,135 |
|
161,407 |
|
164,064 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Diluted EPS attributable to Fluor Corporation: |
|
|
|
|
|
|
|
|
| ||||
Earnings from continuing operations |
|
$ |
1.02 |
|
$ |
0.98 |
|
$ |
1.93 |
|
$ |
2.00 |
|
Loss from discontinued operations, net of taxes |
|
(0.54 |
) |
|
|
(0.52 |
) |
|
| ||||
Net earnings |
|
$ |
0.48 |
|
$ |
0.98 |
|
$ |
1.41 |
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
|
| ||||
Anti-dilutive securities not included above |
|
680 |
|
2,516 |
|
560 |
|
1,949 |
|
During the three and six months ended June 30, 2014, the company repurchased and cancelled 1,750,885 and 4,212,685 shares of its common stock, respectively, under its stock repurchase program for $132 million and $324 million, respectively.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
(8) Fair Value of Financial Instruments
The fair value hierarchy established by ASC 820, Fair Value Measurement, prioritizes the use of inputs used in valuation techniques into the following three levels:
· Level 1 quoted prices in active markets for identical assets and liabilities
· Level 2 inputs other than quoted prices in active markets for identical assets and liabilities that are observable, either directly or indirectly
· Level 3 unobservable inputs
The company measures and reports assets and liabilities at fair value utilizing pricing information received from third parties. The company performs procedures to verify the reasonableness of pricing information received for significant assets and liabilities classified as Level 2.
The following table presents, for each of the fair value hierarchy levels required under ASC 820-10, the companys assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013:
|
|
June 30, 2014 |
|
December 31, 2013 |
| ||||||||||||||||||||
|
|
Fair Value Hierarchy |
|
Fair Value Hierarchy |
| ||||||||||||||||||||
(in thousands) |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash and cash equivalents(1) |
|
$ |
23,109 |
|
$ |
23,109 |
|
$ |
|
|
$ |
|
|
$ |
50,081 |
|
$ |
50,081 |
|
$ |
|
|
$ |
|
|
Marketable securities, current(2) |
|
82,721 |
|
|
|
82,721 |
|
|
|
111,333 |
|
|
|
111,333 |
|
|
| ||||||||
Deferred compensation trusts(3) |
|
89,403 |
|
89,403 |
|
|
|
|
|
87,507 |
|
87,507 |
|
|
|
|
| ||||||||
Marketable securities, noncurrent(4) |
|
333,035 |
|
|
|
333,035 |
|
|
|
275,402 |
|
|
|
275,402 |
|
|
| ||||||||
Derivative assets(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commodity contracts |
|
306 |
|
|
|
306 |
|
|
|
438 |
|
|
|
438 |
|
|
| ||||||||
Foreign currency contracts |
|
1,958 |
|
|
|
1,958 |
|
|
|
855 |
|
|
|
855 |
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Derivative liabilities(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commodity contracts |
|
$ |
6 |
|
$ |
|
|
$ |
6 |
|
$ |
|
|
$ |
3 |
|
$ |
|
|
$ |
3 |
|
$ |
|
|
Foreign currency contracts |
|
773 |
|
|
|
773 |
|
|
|
967 |
|
|
|
967 |
|
|
|
(1) Consists primarily of registered money market funds valued at fair value. These investments represent the net asset value of the shares of such funds as of the close of business at the end of the period.
(2) Consists of investments in U.S. agency securities, U.S. Treasury securities, corporate debt securities, commercial paper and other debt securities with maturities of less than one year that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets.
(3) Consists primarily of registered money market funds and an equity index fund valued at fair value. These investments, which are trading securities, represent the net asset value of the shares of such funds as of the close of business at the end of the period based on the last trade or official close of an active market or exchange.
(4) Consists of investments in U.S. agency securities, U.S. Treasury securities, corporate debt securities and other debt securities with maturities ranging from one year to three years that are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets.
(5) See Note 9 for the classification of commodity contracts and foreign currency contracts in the Condensed Consolidated Balance Sheet. Commodity contracts and foreign currency contracts are estimated using standard pricing models with market-based inputs, which take into account the present value of estimated future cash flows.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
All of the companys financial instruments carried at fair value are included in the table above. All of the above financial instruments are available-for-sale securities except for those held in the deferred compensation trusts (which are trading securities) and derivative assets and liabilities. The company has determined that there was no other-than-temporary impairment of available-for-sale securities with unrealized losses, and the company expects to recover the entire cost basis of the securities. The available-for-sale securities are made up of the following security types as of June 30, 2014: money market funds of $23 million, U.S. agency securities of $87 million, U.S. Treasury securities of $86 million, corporate debt securities of $237 million and commercial paper of $6 million. As of December 31, 2013, available-for-sale securities consisted of money market funds of $50 million, U.S. agency securities of $119 million, U.S. Treasury securities of $26 million, corporate debt securities of $235 million and commercial paper of $7 million. The amortized cost of these available-for-sale securities is not materially different from the fair value. During the three and six months ended June 30, 2014, proceeds from the sales and maturities of available-for-sale securities were $53 million and $117 million, respectively, compared to $131 million and $206 million for the corresponding periods of 2013.
The carrying values and estimated fair values of the companys financial instruments that are not required to be measured at fair value in the Condensed Consolidated Balance Sheet are as follows:
|
|
|
|
June 30, 2014 |
|
December 31, 2013 |
| ||||||||
|
|
Fair Value |
|
Carrying |
|
Fair |
|
Carrying |
|
Fair |
| ||||
(in thousands) |
|
Hierarchy |
|
Value |
|
Value |
|
Value |
|
Value |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Cash(1) |
|
Level 1 |
|
$ |
1,465,274 |
|
$ |
1,465,274 |
|
$ |
1,444,656 |
|
$ |
1,444,656 |
|
Cash equivalents(2) |
|
Level 2 |
|
694,426 |
|
694,426 |
|
788,845 |
|
788,845 |
| ||||
Marketable securities, current(3) |
|
Level 2 |
|
76,981 |
|
76,981 |
|
74,690 |
|
74,690 |
| ||||
Notes receivable, including noncurrent portion(4) |
|
Level 3 |
|
21,611 |
|
21,611 |
|
27,602 |
|
27,602 |
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
3.375% Senior Notes(5) |
|
Level 2 |
|
$ |
496,825 |
|
$ |
511,188 |
|
$ |
496,604 |
|
$ |
484,204 |
|
1.5% Convertible Senior Notes(5) |
|
Level 2 |
|
18,325 |
|
53,234 |
|
18,398 |
|
54,027 |
| ||||
Other borrowings(6) |
|
Level 2 |
|
10,892 |
|
10,892 |
|
11,441 |
|
11,441 |
|
(1) Cash consists of bank deposits. Carrying amounts approximate fair value.
(2) Cash equivalents consist of held-to-maturity time deposits with maturities of three months or less at the date of purchase. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments.
(3) Marketable securities, current consist of held-to-maturity time deposits with original maturities greater than three months that will mature within one year. The carrying amounts of these time deposits approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value.
(4) Notes receivable are carried at net realizable value which approximates fair value. Factors considered by the company in determining the fair value include the credit worthiness of the borrower, current interest rates, the term of the note and any collateral pledged as security. Notes receivable are periodically assessed for impairment.
(5) The fair value of the 3.375% Senior Notes and 1.5% Convertible Senior Notes are estimated based on quoted market prices for similar issues.
(6) Other borrowings represent amounts outstanding under a short-term credit facility. The carrying amount of borrowings under this credit facility approximates fair value because of the short-term maturity.
(9) Derivatives and Hedging
The company limits exposure to foreign currency fluctuations in most of its engineering and construction contracts through provisions that require client payments in currencies corresponding to the currencies in which cost is incurred. Certain financial
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
exposure, which includes currency and commodity price risk associated with engineering and construction contracts, currency risk associated with monetary assets and liabilities denominated in nonfunctional currencies and risk associated with interest rate volatility, may subject the company to earnings volatility. In cases where financial exposure is identified, the company generally implements a hedging strategy utilizing derivative instruments as hedging instruments to mitigate the risk. These hedging instruments are designated as either fair value or cash flow hedges in accordance with ASC 815, Derivatives and Hedging. The company formally documents its hedge relationships at inception, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. The company also formally assesses, both at inception and at least quarterly thereafter, whether the hedging instruments are highly effective in offsetting changes in the fair value of the hedged items. The fair values of all hedging instruments are recognized as assets or liabilities at the balance sheet date. For fair value hedges, the effective portion of the change in the fair value of the hedging instrument is offset against the change in the fair value of the underlying asset or liability through earnings. For cash flow hedges, the effective portion of the hedging instruments gains or losses due to changes in fair value are recorded as a component of AOCI and are reclassified into earnings when the hedged items settle. Any ineffective portion of a hedging instruments change in fair value is immediately recognized in earnings. The company does not enter into derivative instruments for speculative purposes. The company maintains master netting arrangements with certain counterparties to facilitate the settlement of derivative instruments; however, the company reports the fair value of derivative instruments on a gross basis.
As of June 30, 2014, the company had total gross notional amounts of $165 million of foreign currency contracts and $7 million of commodity contracts outstanding relating to engineering and construction contract obligations and monetary assets and liabilities denominated in nonfunctional currencies. The foreign currency contracts are of varying duration, none of which extend beyond June 2016. The commodity contracts are of varying duration, none of which extend beyond May 2017. The impact to earnings due to hedge ineffectiveness was immaterial for the three and six months ended June 30, 2014 and 2013.
The fair values of derivatives designated as hedging instruments under ASC 815 as of June 30, 2014 and December 31, 2013 were as follows:
|
|
Asset Derivatives |
|
Liability Derivatives |
| ||||||||||||
|
|
Balance Sheet |
|
June 30, |
|
December 31, |
|
Balance Sheet |
|
June 30, |
|
December 31, |
| ||||
(in thousands) |
|
Location |
|
2014 |
|
2013 |
|
Location |
|
2014 |
|
2013 |
| ||||
Commodity contracts |
|
Other current assets |
|
$ |
75 |
|
$ |
296 |
|
Other accrued liabilities |
|
$ |
6 |
|
$ |
3 |
|
Foreign currency contracts |
|
Other current assets |
|
1,859 |
|
855 |
|
Other accrued liabilities |
|
585 |
|
967 |
| ||||
Commodity contracts |
|
Other assets |
|
231 |
|
142 |
|
Noncurrent liabilities |
|
|
|
|
| ||||
Foreign currency contracts |
|
Other assets |
|
99 |
|
|
|
Noncurrent liabilities |
|
188 |
|
|
| ||||
Total |
|
|
|
$ |
2,264 |
|
$ |
1,293 |
|
|
|
$ |
779 |
|
$ |
970 |
|
The pre-tax net gains recognized in earnings associated with the hedging instruments designated as fair value hedges for the three and six months ended June 30, 2014 and 2013 were as follows:
|
|
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
|
|
June 30, |
|
June 30, |
| ||||||||
Fair Value Hedges (in thousands) |
|
Location of Gain |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Foreign currency contracts |
|
Corporate general and administrative expense |
|
$ |
2,092 |
|
$ |
326 |
|
$ |
3,351 |
|
$ |
4,145 |
|
The net gains recognized in earnings on hedging instruments for the fair value hedges noted in the table above offset the net losses recognized in earnings on the hedged items in the same locations in the Condensed Consolidated Statement of Earnings.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
The after-tax amount of gain (loss) recognized in OCI associated with the derivative instruments designated as cash flow hedges was as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
Cash Flow Hedges (in thousands) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Commodity contracts |
|
$ |
92 |
|
$ |
1 |
|
$ |
(51 |
) |
$ |
32 |
|
Foreign currency contracts |
|
724 |
|
(2,526 |
) |
323 |
|
(2,472 |
) | ||||
Total |
|
$ |
816 |
|
$ |
(2,525 |
) |
$ |
272 |
|
$ |
(2,440 |
) |
The after-tax amount of gain (loss) reclassified from AOCI into earnings associated with the derivative instruments designated as cash flow hedges was as follows:
|
|
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
|
|
June 30, |
|
June 30, |
| ||||||||
Cash Flow Hedges (in thousands) |
|
Location of Gain (Loss) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Commodity contracts |
|
Total cost of revenue |
|
$ |
(8 |
) |
$ |
13 |
|
$ |
70 |
|
$ |
60 |
|
Foreign currency contracts |
|
Total cost of revenue |
|
282 |
|
(282 |
) |
290 |
|
(135 |
) | ||||
Interest rate contracts |
|
Interest expense |
|
(262 |
) |
(262 |
) |
(525 |
) |
(524 |
) | ||||
Total |
|
|
|
$ |
12 |
|
$ |
(531 |
) |
$ |
(165 |
) |
$ |
(599 |
) |
(10) Retirement Benefits
Net periodic pension expense for the U.S. and non-U.S. defined benefit pension plans includes the following components:
|
|
U.S. Pension Plan |
|
Non-U.S. Pension Plans |
| ||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
Three Months Ended |
|
Six Months Ended |
| ||||||||||||||||
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
| ||||||||||||||||
(in thousands) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||||||
Service cost |
|
$ |
950 |
|
$ |
1,614 |
|
$ |
1,900 |
|
$ |
3,227 |
|
$ |
4,176 |
|
$ |
3,814 |
|
$ |
8,329 |
|
$ |
7,696 |
|
Interest cost |
|
7,918 |
|
7,275 |
|
15,837 |
|
14,550 |
|
8,881 |
|
7,919 |
|
17,685 |
|
15,936 |
| ||||||||
Expected return on assets |
|
(7,526 |
) |
(7,744 |
) |
(15,052 |
) |
(15,488 |
) |
(12,361 |
) |
(11,421 |
) |
(24,609 |
) |
(22,980 |
) | ||||||||
Amortization of prior service cost |
|
188 |
|
25 |
|
375 |
|
51 |
|
|
|
|
|
|
|
|
| ||||||||
Recognized net actuarial loss |
|
1,108 |
|
1,510 |
|
2,217 |
|
3,020 |
|
1,996 |
|
1,675 |
|
3,980 |
|
3,375 |
| ||||||||
Net periodic pension expense |
|
$ |
2,638 |
|
$ |
2,680 |
|
$ |
5,277 |
|
$ |
5,360 |
|
$ |
2,692 |
|
$ |
1,987 |
|
$ |
5,385 |
|
$ |
4,027 |
|
The company currently expects to fund approximately $30 million to $60 million into its defined benefit pension plans during 2014, which is expected to be in excess of the minimum funding required. During the six months ended June 30, 2014, contributions of approximately $12 million were made by the company.
(11) Financing Arrangements
In May 2014, the company entered into a $1.7 billion Revolving Loan and Letter of Credit Facility Agreement (Credit Facility) that matures in 2019. Borrowings under the Credit Facility bear interest at rates based on the Eurodollar Rate or an alternative base rate, plus an applicable borrowing margin. The Credit Facility may be increased up to an additional $500 million subject to certain conditions, and contains customary financial and restrictive covenants, including a maximum ratio of consolidated debt to tangible net worth of one-to-one and a cap on the aggregate amount of debt of $750 million for the companys subsidiaries. On the same day, the company terminated its $1.2 billion Revolving Performance Letter of Credit Facility Agreement dated December 14, 2010 and all outstanding letters of credit thereunder have been assigned or otherwise transferred to the new Credit Facility.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
In conjunction with the Credit Facility, the company also amended its existing $1.8 billion Revolving Loan and Letter of Credit Facility Agreement dated November 9, 2012 to extend the maturity date to May 2019 and increase the cap on the aggregate amount of debt for the companys subsidiaries from $600 million to $750 million.
In September 2011, the company issued $500 million of 3.375% Senior Notes (the 2011 Notes) due September 15, 2021 and received proceeds of $492 million, net of underwriting discounts and debt issuance costs. Interest on the 2011 Notes is payable semi-annually on March 15 and September 15 of each year, and began on March 15, 2012. The company may, at any time, redeem the 2011 Notes at a redemption price equal to 100 percent of the principal amount, plus a make whole premium described in the indenture. Additionally, if a change of control triggering event occurs, as defined by the terms of the indenture, the company will be required to offer to purchase the 2011 Notes at a purchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The company is generally not limited under the indenture governing the 2011 Notes in its ability to incur additional indebtedness provided the company is in compliance with certain restrictive covenants, including restrictions on liens and restrictions on sale and leaseback transactions.
In February 2004, the company issued $330 million of 1.5% Convertible Senior Notes (the 2004 Notes) due February 15, 2024 and received proceeds of $323 million, net of underwriting discounts. In December 2004, the company irrevocably elected to pay the principal amount of the 2004 Notes in cash. The 2004 Notes are convertible if a specified trading price of the companys common stock (the trigger price) is achieved and maintained for a specified period. The trigger price condition was satisfied during the fourth quarter of 2013 and second quarter of 2014 and the 2004 Notes were therefore classified as short-term debt as of December 31, 2013 and June 30, 2014, respectively. During the six months ended June 30, 2014, holders converted less than $0.1 million of the 2004 Notes in exchange for the principal balance owed in cash plus 1,727 shares of the companys common stock. During the six months ended June 30, 2013, holders converted less than $0.1 million of the 2004 Notes in exchange for the principal balance owed in cash plus 61 shares of the companys common stock.
The following table presents information related to the liability and equity components of the 2004 Notes:
|
|
June 30, |
|
December 31, |
| ||
(in thousands) |
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Carrying value of the equity component |
|
$ |
19,516 |
|
$ |
19,519 |
|
Principal amount and carrying value of the liability component |
|
18,325 |
|
18,398 |
| ||
The 2004 Notes are convertible into shares of the companys common stock (par value $0.01 per share) at a conversion rate of 36.6729 shares per each $1,000 principal amount of the 2004 Notes. Interest expense for the three and six month periods included original coupon interest of less than $0.1 million and $0.1 million, respectively, during both 2014 and 2013. The if-converted value of $52 million was in excess of the principal value as of June 30, 2014.
In July 2013, the company established a short-term credit facility to purchase land and construction equipment associated with the equipment operations in the Global Services segment. Outstanding borrowings under the facility were $11 million as of both June 30, 2014 and December 31, 2013.
As of June 30, 2014, the company was in compliance with all of the financial covenants related to its debt agreements.
(12) Stock-Based Plans
The companys executive and director stock-based compensation plans are described, and informational disclosures provided, in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2013. In the first half of 2014 and 2013, restricted stock units and restricted shares totaling 370,014 and 468,695, respectively, were granted to executives and directors, at weighted-average per share prices of $79.06 and $61.30, respectively. For the companys executives, the restricted units and shares granted in 2014 and 2013 generally vest ratably over three years. For the companys directors, the restricted units and shares granted in 2014 and 2013 vest or vested on the first anniversary of the grant. During the first half of 2014 and 2013, options for the purchase of 684,486 shares at a weighted-average exercise price of $79.19 per share and 884,574 shares at a weighted-average exercise price of $61.45 per share, respectively, were awarded to executives. The options granted in 2014 and 2013 vest ratably over three years. The options expire ten years after the grant date. In the first half
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
of 2014 and 2013, performance-based Value Driver Incentive (VDI) units totaling 315,551 and 385,742, respectively, were granted to executives at weighted-average per share prices of $79.19 and $61.45, respectively. The number of units is adjusted at the end of each performance period based on the achievement of performance criteria. The VDI awards granted in 2014 and 2013 vest after a period of approximately three years.
(13) Noncontrolling Interests
The company applies the provisions of ASC 810-10-45, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net earnings attributable to the parent and to the noncontrolling interests, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated.
As required by ASC 810-10-45, the company has separately disclosed on the face of the Condensed Consolidated Statement of Earnings for all periods presented the amount of net earnings attributable to the company and the amount of net earnings attributable to noncontrolling interests. For the three and six months ended June 30, 2014, net earnings attributable to noncontrolling interests were $32 million and $76 million, respectively. For the three and six months ended June 30, 2013, net earnings attributable to noncontrolling interests were $46 million and $93 million, respectively. Income taxes associated with earnings attributable to noncontrolling interests were immaterial in both periods presented. Distributions paid to noncontrolling interests were $44 million and $46 million for the six months ended June 30, 2014 and 2013, respectively. Capital contributions by noncontrolling interests were $0.2 million and $1 million for the six months ended June 30, 2014 and 2013, respectively.
(14) Contingencies and Commitments
The company and certain of its subsidiaries are subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. The company currently does not expect that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial position or results of operations.
As of June 30, 2014, several matters were in the litigation and dispute resolution process. The following discussion provides a background and current status of these matters:
St. Joe Minerals Matters
Since 1995, the company has been named as a defendant in a number of lawsuits alleging injuries resulting from the lead business of St. Joe Minerals Corporation (St. Joe) and The Doe Run Company (Doe Run) in Herculaneum, Missouri, which are discontinued operations. The company was named as a defendant in these lawsuits as a result of its ownership or other interests in St. Joe and Doe Run in the period between 1981 and 1994. In 1994, the company sold its interests in St. Joe and Doe Run, along with all liabilities associated with the lead business, pursuant to a sale agreement in which the buyer agreed to indemnify the company for those liabilities. Until December 2010, substantially all the lawsuits were settled and paid by the buyer; and in all cases the company was fully released.
In December 2010, the buyer settled with certain plaintiffs without obtaining a release for the benefit of the company, leaving the company to defend its case with these plaintiffs in the City of St. Louis Circuit Court. In late July 2011, the jury reached an unexpected verdict in this case, ruling in favor of 16 of the plaintiffs and against the company and certain former subsidiaries for $38.5 million in compensatory and economic damages and $320 million in punitive damages. In August 2011, the court entered judgments based on the verdict. In December 2011, the company appealed the judgments of the court.
In June 2014, the Missouri Court of Appeals issued its opinion reversing and remanding to the trial court the award of $240 million in punitive damages against Fluor. In addition, the appellate court upheld the judgment for $38.5 million in compensatory and economic damages and $80 million of punitive damages against the company and its former subsidiaries to whom the company has provided certain indemnities relating to the St. Joe and Doe Run businesses. Both parties have filed motions for rehearing with respect to various aspects of the opinion and to transfer the matter to the Missouri Supreme Court. The company will also continue to take steps to enforce its rights to indemnification described above. As a result of the companys reassessment of an estimated loss contingency in this matter, the company recorded a loss from discontinued operations of $85 million (net of taxes of $47 million) during the three months ended June 30, 2014.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
The company, the buyer and other entities are defendants in 19 additional lawsuits (including consolidated lawsuits) relating to the lead business of St. Joe and Doe Run. The company believes it has strong defenses to these lawsuits and is vigorously defending its position. The company is unable to estimate a range of possible losses in these lawsuits. In addition, the company has filed claims for indemnification under the sale agreement and for other matters raised in these lawsuits. If the company were unsuccessful in any of these lawsuits, or in the prosecution of and collection on our indemnity claims, the company could recognize a material charge within discontinued operations.
Conex International v. Fluor Enterprises, Inc.
In November 2006, a Jefferson County, Texas, jury reached an unexpected verdict in the case of Conex International (Conex) v. Fluor Enterprises Inc. (FEI), ruling in favor of Conex and awarding $99 million in damages related to a 2001 construction project.
In 2001, Atofina (now part of Total Petrochemicals Inc.) hired Conex International to be the mechanical contractor on a project at Atofinas refinery in Port Arthur, Texas. FEI was also hired to provide certain engineering advice to Atofina on the project. There was no contract between Conex and FEI. Later in 2001 after the project was complete, Conex and Atofina negotiated a final settlement for extra work on the project. Conex sued FEI in September 2003, alleging damages for interference and misrepresentation and demanding that FEI should pay Conex the balance of the extra work charges that Atofina did not pay in the settlement. Conex also asserted that FEI interfered with Conexs contract and business relationship with Atofina. The jury verdict awarded damages for the extra work and the alleged interference.
The company appealed the decision and the judgment against the company was reversed in its entirety in December 2008. Both parties appealed the decision to the Texas Supreme Court, and the court denied both petitions. The company requested rehearing on two issues to the Texas Supreme Court, and that request was denied. The Texas Supreme Court remanded the matter to the trial court for a new trial. The matter was stayed, pending resolution of certain technical issues associated with the 2011 bankruptcy filing by the plaintiffs parent. These issues have been resolved. The matter has been remanded to the court in Jefferson County, Texas. Based upon the present status of this matter, the company does not believe that there is a reasonable possibility that a loss will be incurred.
Other Matters
The company and certain of its clients have made claims arising from the performance under its contracts. The company recognizes revenue, but not profit, for certain claims (including change orders in dispute and unapproved change orders in regard to both scope and price) when it is determined that recovery of incurred costs is probable and the amounts can be reliably estimated. Under ASC 605-35-25, these requirements are satisfied when (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the companys performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. The company periodically evaluates its position and the amounts recognized in revenue with respect to all its claims. Recognized claims against clients amounted to $26 million as of June 30, 2014, and are included in contract work in progress in the accompanying Condensed Consolidated Balance Sheet. There were no recognized claims against clients as of December 31, 2013.
From time to time, the company enters into significant contracts with the U.S. government and its agencies. Government contracts are subject to audits and investigations by government representatives with respect to the companys compliance with various restrictions and regulations applicable to government contractors, including but not limited to the allowability of costs incurred under reimbursable contracts. In connection with performing government contracts, the company maintains reserves for estimated exposures associated with these matters.
(15) Guarantees
In the ordinary course of business, the company enters into various agreements providing performance assurances and guarantees to clients on behalf of certain unconsolidated and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
performance guarantees have various expiration dates ranging from mechanical completion of the facilities being constructed to a period extending beyond contract completion in certain circumstances. The maximum potential amount of future payments that the company could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed by or on behalf of third parties under engineering and construction contracts, was estimated to be $14.1 billion as of June 30, 2014. Amounts that may be required to be paid in excess of estimated cost to complete contracts in progress are not estimable. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed under the contract. For lump-sum or fixed-price contracts, the performance guarantee amount is the cost to complete the contracted work, less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, the company may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors for claims. The company assessed its performance guarantee obligation as of June 30, 2014 and December 31, 2013 in accordance with ASC 460, Guarantees and the carrying value of the liability was not material.
Financial guarantees, made in the ordinary course of business in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate the company to make payment in the event of a default by the borrower. These arrangements may require the borrower to pledge collateral to support the fulfillment of the borrowers obligation.
(16) Variable Interest Entities
Variable Interest Entities
In the normal course of business, the company forms partnerships or joint ventures primarily for the execution of single contracts or projects. The majority of these partnerships or joint ventures are characterized by a 50 percent or less, noncontrolling ownership or participation interest, with decision making and distribution of expected gains and losses typically being proportionate to the ownership or participation interest. Many of the partnership and joint venture agreements provide for capital calls to fund operations, as necessary. Such funding is infrequent and is not anticipated to be material. The company accounts for its partnerships and joint ventures in accordance with ASC 810.
In accordance with ASC 810, the company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The company considers a partnership or joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entitys activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the company reassesses its initial determination of whether the partnership or joint venture is a VIE. The majority of the companys partnerships and joint ventures qualify as VIEs because the total equity investment is typically nominal and not sufficient to permit the entity to finance its activities without additional subordinated financial support.
The company also performs a qualitative assessment of each VIE to determine if the company is its primary beneficiary, as required by ASC 810. The company concludes that it is the primary beneficiary and consolidates the VIE if the company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the company is the primary beneficiary. The company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. As required by ASC 810, managements assessment of whether the company is the primary beneficiary of a VIE is continuously performed.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
In most cases, when the company is not the primary beneficiary and not required to consolidate the VIE, the proportionate consolidation method of accounting is used for joint ventures and partnerships in the construction industry, whereby the company recognizes its proportionate share of revenue, cost and profit in its Condensed Consolidated Statement of Earnings and uses the one-line equity method of accounting in the Condensed Consolidated Balance Sheet, which is a common application of ASC 810-10-45-14 in the construction industry. The equity and cost methods of accounting for the investments are also used, depending on the companys respective ownership interest, amount of influence over the VIE and the nature of services provided by the VIE. The net carrying value of the unconsolidated VIEs classified under Investments and goodwill and Other accrued liabilities in the Condensed Consolidated Balance Sheet was a net asset of $96 million and $122 million as of June 30, 2014 and December 31, 2013, respectively. Some of the companys VIEs have debt; however, such debt is typically non-recourse in nature. The companys maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. Future funding commitments as of June 30, 2014 for the unconsolidated VIEs were $20 million.
In some cases, the company is required to consolidate certain VIEs. As of June 30, 2014, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.2 billion and $675 million, respectively. As of December 31, 2013, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $1.2 billion and $731 million, respectively. The assets of a VIE are restricted for use only for the particular VIE and are not available for general operations of the company.
None of the VIEs are individually material to the companys results of operations, financial position or cash flows except for the Fluor SKM joint venture, a consolidated joint venture formed for the execution of an iron ore project in Australia, which was material to the companys revenue for the 2013 period. The companys results of operations included revenue related to the Fluor SKM joint venture of $102 million and $267 million for the three and six months ended June 30, 2014, respectively, and $538 million and $1.3 billion for the three and six months ended June 30, 2013, respectively.
(17) Operating Information by Segment
Operating information by reportable segment is as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
External Revenue (in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Oil & Gas |
|
$ |
2,817.5 |
|
$ |
2,856.5 |
|
$ |
5,547.2 |
|
$ |
5,625.8 |
|
Industrial & Infrastructure |
|
1,486.5 |
|
3,082.3 |
|
3,154.6 |
|
6,214.5 |
| ||||
Government |
|
598.6 |
|
674.5 |
|
1,191.8 |
|
1,425.8 |
| ||||
Global Services |
|
145.1 |
|
154.4 |
|
287.8 |
|
304.3 |
| ||||
Power |
|
204.0 |
|
422.6 |
|
454.9 |
|
805.6 |
| ||||
Total external revenue |
|
$ |
5,251.7 |
|
$ |
7,190.3 |
|
$ |
10,636.3 |
|
$ |
14,376.0 |
|
The Global Services segment represents a combination of other operating segments that do not meet the ASC 280 requirements for separate disclosure or aggregation. Intercompany revenue for the Global Services segment, excluded from the amounts shown above, was $139 million and $275 million for the three and six months ended June 30, 2014, respectively, and $126 million and $243 million for the three and six months ended June 30, 2013, respectively.
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
Segment Profit (in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Oil & Gas |
|
$ |
167.4 |
|
$ |
106.8 |
|
$ |
305.3 |
|
$ |
211.3 |
|
Industrial & Infrastructure |
|
97.1 |
|
129.4 |
|
197.4 |
|
256.3 |
| ||||
Government |
|
13.9 |
|
13.6 |
|
26.4 |
|
54.9 |
| ||||
Global Services |
|
19.8 |
|
27.6 |
|
38.6 |
|
55.3 |
| ||||
Power |
|
14.9 |
|
10.6 |
|
13.5 |
|
3.8 |
| ||||
Total segment profit |
|
$ |
313.1 |
|
$ |
288.0 |
|
$ |
581.2 |
|
$ |
581.6 |
|
Power segment profit for the three and six months ended June 30, 2014 included the operations of NuScale, which are primarily for research and development activities associated with the licensing and commercialization of small modular nuclear reactor technology. In the second quarter of 2014, NuScale entered into a cost-sharing agreement with the U.S. Department of Energy (DOE) establishing the terms and conditions of a multi-year funding award and, as a result, accrued for the reimbursement of $17 million of certain qualified expenditures. The NuScale expenses, included in the determination of segment profit, were $4 million and $17 million (net of the $17 million accrual for both periods), respectively, for the three and six months ended June 30, 2014 and $13 million and $28 million, respectively, for the three and six months ended June 30, 2013. The company will recognize the cost-sharing award with the DOE, when earned, as a reduction of Total cost of revenue in the Condensed Consolidated Statement of Earnings and, correspondingly, as an increase to segment profit in the period for which the related costs are recognized, with the exception of certain pre-award costs which were recognized in the second quarter of 2014 upon entering into the cost-sharing agreement.
A reconciliation of total segment profit to earnings from continuing operations before taxes is as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
Reconciliation of Total Segment Profit to Earnings from |
|
June 30, |
|
June 30, |
| ||||||||
Continuing Operations Before Taxes (in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
Total segment profit |
|
$ |
313.1 |
|
$ |
288.0 |
|
$ |
581.2 |
|
$ |
581.6 |
|
Corporate general and administrative expense |
|
(56.7 |
) |
(31.9 |
) |
(94.5 |
) |
(64.5 |
) | ||||
Interest income (expense), net |
|
(3.3 |
) |
(2.2 |
) |
(6.4 |
) |
(5.2 |
) | ||||
Earnings attributable to noncontrolling interests |
|
32.2 |
|
44.8 |
|
76.4 |
|
93.1 |
| ||||
Earnings from continuing operations before taxes |
|
$ |
285.3 |
|
$ |
298.7 |
|
$ |
556.7 |
|
$ |
605.0 |
|
Total assets by segment are as follows:
|
|
June 30, |
|
December 31, |
| ||
Total Assets by Segment (in millions) |
|
2014 |
|
2013 |
| ||
Oil & Gas |
|
$ |
1,795.7 |
|
$ |
1,643.8 |
|
Industrial & Infrastructure |
|
896.4 |
|
909.7 |
| ||
Government |
|
512.1 |
|
580.6 |
| ||
Global Services |
|
822.4 |
|
758.9 |
| ||
Power |
|
128.8 |
|
154.9 |
| ||
FLUOR CORPORATION
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and notes and the companys December 31, 2013 Annual Report on Form 10-K. For purposes of reviewing this document, segment profit is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests excluding: corporate general and administrative expense; interest expense; interest income; domestic and foreign income taxes; other non-operating income and expense items; and loss from discontinued operations.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made herein, including statements regarding the companys projected revenue and earnings levels, cash flow and liquidity, new awards and backlog levels and the implementation of strategic initiatives and organizational changes are forward-looking in nature. We wish to caution readers that forward-looking statements, including disclosures which use words such as the company believes, anticipates, expects, estimates and similar statements are subject to various risks and uncertainties which could cause actual results of operations to differ materially from expectations. Factors potentially contributing to such differences include, among others:
· Difficulties or delays incurred in the execution of contracts, or failure to accurately estimate the resources and time necessary for our contracts, resulting in cost overruns or liabilities, including those caused by the performance of our clients, subcontractors, suppliers and joint venture or teaming partners;
· Intense competition in the global engineering, procurement and construction industry, which can place downward pressure on our contract prices and profit margins;
· The companys failure to receive anticipated new contract awards and the related impact on revenue, earnings, staffing levels and cost;
· The cyclical nature of many of the markets the company serves, including our commodity-based business lines, and our vulnerability to downturns;
· A failure to obtain favorable results in existing or future litigation or dispute resolution proceedings (including claims for indemnification), or claims against project owners, subcontractors or suppliers;
· Current economic conditions affecting our clients, partners, subcontractors and suppliers, which may result in decreased capital investment or expenditures, or a failure to make anticipated increased capital investment or expenditures, by the companys clients or other financial difficulties by our partners, subcontractors or suppliers;
· Client cancellations of, or scope adjustments to, existing contracts and the related impacts on staffing levels and cost;
· Changes in global business, economic (including currency risk), political and social conditions;
· Civil unrest, security issues, labor conditions and other unforeseeable events in the countries in which we do business, resulting in unanticipated losses;
· Client delays or defaults in making payments;
· Failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects;
· Liabilities arising from faulty services that could result in significant professional or product liability, warranty or other claims;
· Failure of our suppliers, subcontractors or joint venture partners to provide supplies or services at the agreed-upon levels or times;
· The impact of anti-bribery and international trade laws and regulations;
· Repercussions of events beyond our control, such as severe weather conditions, that may significantly affect operations, result in higher cost or subject the company to liability claims by our clients;
· The potential impact of certain tax matters including, but not limited to, those from foreign operations and the ongoing audits by tax authorities;
· Possible systems and information technology interruptions or the failure to adequately protect intellectual property rights;
· Foreign exchange risks;
· Failure to maintain safe work sites;
· The impact of past and future environmental, health and safety regulations including climate change regulations;
· Possible limitations of bonding or letter of credit capacity;
· The companys ability to secure appropriate insurance;
· The availability of credit and restrictions imposed by credit facilities, both for the company and our clients, suppliers, subcontractors or other partners;
· The risks associated with acquisitions, dispositions or other investments;
· Limitations on cash transfers from subsidiaries that may restrict the companys ability to satisfy financial obligations or to pay interest or principal when due on outstanding debt; and
· Restrictions on possible transactions imposed by our charter documents and Delaware law.
Any forward-looking statements that we may make are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those anticipated by us. Any forward-looking statements are subject to the risks, uncertainties and other factors that could cause actual results of operations, financial condition, cost reductions, acquisitions, dispositions, financing transactions, operations, expansion, consolidation and other events to differ materially from those expressed or implied in such forward-looking statements.
Due to known and unknown risks, the companys actual results may differ materially from its expectations or projections. While most risks affect only future cost or revenue anticipated by the company, some risks may relate to accruals that have already been reflected in earnings. The companys failure to receive payments of accrued amounts or incurrence of liabilities in excess of amounts previously recognized could result in a charge against future earnings. As a result, the reader is cautioned to recognize and consider the inherently uncertain nature of forward-looking statements and not to place undue reliance on them.
Additional information concerning these and other factors can be found in the companys press releases and periodic filings with the Securities and Exchange Commission, including the discussion under the heading Item 1A. Risk Factors in the companys Form 10-K filed February 18, 2014. These filings are available publicly on the SECs website at http://www.sec.gov, on the companys website at http://investor.fluor.com or upon request from the companys Investor Relations Department at (469) 398-7220. The company cannot control such risk factors and other uncertainties, and in many cases, cannot predict the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. These risks and uncertainties should be considered when evaluating the company and deciding whether to invest in its securities. Except as otherwise required by law, the company undertakes no obligation to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
RESULTS OF OPERATIONS
Summary
Consolidated revenue for the three months ended June 30, 2014 decreased 27 percent to $5.3 billion from $7.2 billion for the three months ended June 30, 2013. Consolidated revenue for the six months ended June 30, 2014 decreased 26 percent to $10.6 billion from $14.4 billion for the first half of the prior year. The revenue decreases in the current year periods were principally due to a significant decline in project execution activities in the mining and metals business line of the Industrial & Infrastructure segment.
Earnings from continuing operations attributable to Fluor Corporation were $163 million or $1.02 per diluted share, and $312 million, or $1.93 per diluted share, for the three and six months ended June 30, 2014, respectively, compared to earnings from continuing operations attributable to Fluor Corporation of $161 million or $0.98 per diluted share, and $328 million, or $2.00 per diluted share, for the corresponding periods of 2013. Earnings from continuing operations attributable to Fluor Corporation in the second quarter of 2014 were essentially flat when compared to the prior year period, with higher contributions from the Oil & Gas segment being offset by lower contributions from the mining and metals business line of the Industrial & Infrastructure segment and higher general and administrative expenses. The slight decrease in earnings from continuing operations attributable to Fluor Corporation during the six months ended June 30, 2014 resulted from lower contributions from the mining and metals business line of the Industrial & Infrastructure segment, the Government segment and the Global Services segment, as well as higher general and administrative expenses (see further discussion below), which were largely offset by significantly higher contributions from the Oil & Gas segment.
As discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, the company recorded a loss from discontinued operations of $85 million (net of taxes of $47 million) during the three months ended June 30, 2014 in connection with the reassessment of estimated loss contingencies related to the lead business of St. Joe Minerals Corporation (St. Joe) and The Doe Run Company (Doe Run) in Herculaneum, Missouri, which are discontinued operations. In 1994, the company sold its interests in St. Joe and Doe Run, along with all liabilities associated with the lead business, pursuant to a sale agreement in which the buyer agreed to indemnify the company for those liabilities.
The company is still experiencing a highly competitive business environment, with pressure on margins. However, the Oil & Gas segment has continued to show signs of improvement, particularly for the upstream and petrochemicals markets. In some
cases, margins may be favorably or unfavorably impacted by a change in the mix of work performed. For example, in the results of the first six months of 2014, the Oil & Gas segment experienced a higher segment profit margin due to a shift in the mix of work to higher margin engineering activities from lower margin construction activities. This shift corresponds to an increase in contributions from projects that are in the early stages of the project life cycle compared to a year ago.
In addition to the strengthening of the upstream and petrochemicals markets of the Oil & Gas segment, certain other market trends continue. First, the mining and metals business line of the Industrial & Infrastructure segment has continued to slow as major capital investment decisions by most mining customers have been deferred. Second, the federal government has continued to close bases in the execution of the Logistics Civil Augmentation Program (LOGCAP IV) for the United States Army in Afghanistan, which has reduced the volume of work for the Government segment.
The effective tax rate on earnings from continuing operations for the three and six months ended June 30, 2014 was 31.6 percent and 30.2 percent, respectively, compared to 30.6 percent and 30.5 percent for the corresponding periods of 2013. The slightly higher effective tax rate for the three months ended June 30, 2014 compared to the same period in the prior year was primarily due to a benefit in 2013 of U.S. federal tax research credits which has not been extended beyond 2013. The effective tax rates for the six months ended June 30, 2014 and 2013 were comparable, though 2013 benefited from the federal tax research credits and 2014 benefited from the recognition of a deferred tax benefit attributable to foreign taxes previously paid on certain unremitted foreign earnings. All periods benefited from earnings attributable to noncontrolling interests for which income taxes are not typically the responsibility of the company. The Companys effective tax rate from discontinued operations for the three and six months ended June 30, 2014 was 35.7 percent.
Consolidated new awards were $5.9 billion and $16.5 billion for the three and six months ended June 30, 2014, respectively, compared to new awards of $7.2 billion and $13.7 billion for the three and six months ended June 30, 2013, respectively. The Oil & Gas and Government segments were the major contributors to the new award activity in the first half of 2014. Approximately 83 percent of consolidated new awards for the six months ended June 30, 2014 were for projects located outside of the United States compared to 66 percent for the first six months of 2013.
Consolidated backlog as of June 30, 2014 was $40.3 billion compared to $37.0 billion as of June 30, 2013. The increase in backlog was primarily due to significant new awards in the Oil & Gas and Government segments, partially offset by a decline in backlog in the mining and metals business line of the Industrial & Infrastructure segment. As of both June 30, 2014 and June 30, 2013, approximately 70 percent of consolidated backlog related to projects outside of the United States. Although backlog reflects business which is considered to be firm, cancellations or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost, and deferrals, as appropriate.
Oil & Gas
Revenue and segment profit for the Oil & Gas segment are summarized as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
(in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
2,817.5 |
|
$ |
2,856.5 |
|
$ |
5,547.2 |
|
$ |
5,625.8 |
|
Segment profit |
|
167.4 |
|
106.8 |
|
305.3 |
|
211.3 |
| ||||
Revenue for the three and six months ended June 30, 2014 was level compared to the corresponding periods in 2013. The segment experienced significant increased project execution activities for several projects, including petrochemical projects on the Gulf Coast of the United States, a gas processing project in Kazakhstan and an upstream production facility in Russia. These increases were offset by revenue declines for certain large projects completed or progressing toward completion, including a refinery project in the United States, certain oil sands processing facilities in Canada and a coal bed methane gas project in Australia.
Segment profit for the three and six months ended June 30, 2014 increased 57 percent and 44 percent, respectively, compared to the three and six months ended June 30, 2013. This improvement was largely attributable to the Gulf Coast petrochemical projects, the gas processing project in Kazakhstan and the upstream production facility in Russia that were mentioned previously, as well as an upstream project in the Middle East that is nearing completion. Segment profit margin for the three and six months ended June 30, 2014 was 5.9 percent and 5.5 percent, respectively, compared to 3.7 percent and 3.8 percent for the corresponding periods of 2013. This improvement was primarily due to the performance of the projects that fueled the increase in segment profit in the current year periods discussed above, as well as a shift in the mix of work in the segment from lower
margin construction activities to higher margin engineering activities. This shift corresponds to an increase in contributions during the first two quarters of 2014 from projects that are in the early stages of the project life cycle compared to a year ago, including some of the Gulf Coast petrochemicals projects, the gas processing project in Kazakhstan and the upstream production facility in Russia.
New awards for the three and six months ended June 30, 2014 were $1.5 billion and $10.3 billion, compared to $3.3 billion and $6.4 billion for the corresponding periods of 2013. Current quarter new awards included a refinery project in Belgium. Backlog as of June 30, 2014 increased 29 percent to $24.2 billion compared to $18.7 billion as of June 30, 2013. The growth in backlog was due to the strength of the new award activity in the first half of 2014, reflecting continued demand for new capacity in oil and gas production, petrochemicals and gas liquefaction. The segment remains well positioned for new project activity in these markets. Market conditions remain competitive and, in certain cases, may result in more lump-sum contracts.
Total assets in the segment increased to $1.8 billion as of June 30, 2014 from $1.6 billion as of December 31, 2013.
Industrial & Infrastructure
Revenue and segment profit for the Industrial & Infrastructure segment are summarized as follows:
|
|
|
|
|
|
|
|
|
| ||||
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
(in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
1,486.5 |
|
$ |
3,082.3 |
|
$ |
3,154.6 |
|
$ |
6,214.5 |
|
Segment profit |
|
97.1 |
|
129.4 |
|
197.4 |
|
256.3 |
| ||||
Revenue for the three and six months ended June 30, 2014 decreased 52 percent and 49 percent, respectively, compared to the three and six months ended June 30, 2013, primarily as a result of decreased volume in the mining and metals business line.
Segment profit for the three and six months ended June 30, 2014 decreased 25 percent and 23 percent, respectively, from the corresponding periods in the prior year, primarily as a result of the significant volume decline in the mining and metals business line. Partially offsetting this reduction in segment profit was the favorable impact of project closeout activities for certain mining projects and improved performance from the infrastructure business line, including significant progress toward completion on a domestic road project.
Segment profit margin for the three and six months ended June 30, 2014 was 6.5 percent and 6.3 percent, respectively, compared to 4.2 percent and 4.1 percent, respectively, for the same periods in the prior year. Segment profit margins increased primarily because, in the prior year periods, the mining and metals business line had a significantly higher content of customer-furnished materials, which are accounted for as pass-through costs. Segment profit margins were also affected by the factors noted above that impacted revenue and segment profit.
New awards for the three months ended June 30, 2014 were $1.2 billion compared to $3.6 billion for the second quarter of 2013. The current year period included a new award for a large manufacturing facility in the United States. Backlog decreased to $9.2 billion as of June 30, 2014 compared to $16.2 billion as of June 30, 2013. This decline was due to the work-off of backlog outpacing the reduced new award activity in the mining and metals business line since the second quarter of last year and the cancellation of a mining project during the fourth quarter of 2013 which removed $1.8 billion of backlog. The mining and metals business line has experienced the deferral of major capital investment decisions by most mining customers due to softening commodity demand and project-specific circumstances. The timing of when capital investment by these mining customers could resume is uncertain.
Total assets in the Industrial & Infrastructure segment were $896 million as of June 30, 2014 compared to $910 million as of December 31, 2013.
Government
Revenue and segment profit for the Government segment are summarized as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
(in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
598.6 |
|
$ |
674.5 |
|
$ |
1,191.8 |
|
$ |
1,425.8 |
|
Segment profit |
|
13.9 |
|
13.6 |
|
26.4 |
|
54.9 |
| ||||
Revenue for the three and six months ended June 30, 2014 decreased 11 percent and 16 percent, respectively, compared to the same periods in the prior year. A majority of the decrease for both periods was due to a reduction in project execution activities for the LOGCAP IV Project in Afghanistan. Both of the three month and six month current year periods benefitted from volume increases from the Savannah River Site Management and Operating Project in South Carolina, which contributed lower revenue in the prior year as a result of the federal governments budget sequestration, and the recently awarded Strategic Petroleum Reserve Project.
Segment profit for the three months ended June 30, 2014 was essentially flat when compared to the same period of the prior year. Items that affected segment profit in the current year quarter, which included the decline in volume for LOGCAP IV and lower contributions from certain other projects, were similar in magnitude to the $17 million charge that was taken in the second quarter of 2013, as the result of an adverse judgment associated with the companys final claim on an embassy project. Segment profit for the six months ended June 30, 2014 decreased 52 percent compared to the first six months of the prior year, primarily as a result of reduced contributions from LOGCAP IV. In the six month period of the prior year, the previously mentioned second quarter 2013 embassy charge was partially offset by the favorable effect of the close-out of certain prior year indirect rates in the first quarter of 2013.
Segment profit margin for the three and six months ended June 30, 2014 was 2.3 percent and 2.2 percent, respectively, compared to 2.0 percent and 3.9 percent for the three and six months ended June 30, 2013. The decline in the segment profit margin for the first six months of 2014 compared to the corresponding period of the prior year was primarily due to the factors noted above affecting revenue and segment profit.
New awards for the three months ended June 30, 2014 were $3.1 billion compared to $256 million for the same period in the prior year. The current quarter new awards included a multi-year nuclear decommissioning project in the United Kingdom and the fourth option year under LOGCAP IV. Backlog was $5.2 billion as of June 30, 2014 compared to $531 million as of June 30, 2013. The increase in backlog is due to the current quarter new award of the multi-year nuclear decommissioning project noted above, the first quarter 2014 new award of the Strategic Petroleum Reserve Project and the inclusion in backlog of the unfunded portion of multi-year government contract awards which the company began reporting in its backlog as of December 31, 2013 to be more comparable to industry practice. Total backlog included $4.0 billion of unfunded government contracts as of June 30, 2014.
Total assets in the Government segment decreased to $512 million as of June 30, 2014 from $581 million as of December 31, 2013, primarily due to a reduction in working capital to support the declining volume of LOGCAP IV project execution activities.
Global Services
Revenue and segment profit for the Global Services segment are summarized as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
(in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
145.1 |
|
$ |
154.4 |
|
$ |
287.8 |
|
$ |
304.3 |
|
Segment profit |
|
19.8 |
|
27.6 |
|
38.6 |
|
55.3 |
| ||||
Revenue decreased six percent for the three months ended June 30, 2014 compared to the same period in 2013 due to the equipment business lines reduced volume of mining-related activities in Latin America, partially offset by improved equipment rental activities in Mexico. Revenue decreased five percent for the six months ended June 30, 2014 compared to the
corresponding period in the prior year, principally due to the equipment business line. Decreased volume in equipment rental activities in Africa and Latin America for the first half of 2014 was somewhat offset by increased volume in Mexico and North America.
Segment profit for the three months ended June 30, 2014 decreased 28 percent compared to the three months ended June 30, 2013, principally as the result of reduced contributions from the equipment business line in Latin America. Segment profit decreased 30 percent for the first six months of 2014 compared to the first six months of 2013, primarily as the result of the net volume decrease in the equipment business line, as mentioned above. The continued transition to a new business model in the supply chain solutions business line and start-up costs for joint venture companies in the fabrication business line also contributed to the segment profit decrease and more than offset an improvement in segment profit by the temporary staffing business line.
Segment profit margin for the three and six months ended June 30, 2014 was 13.7 percent and 13.4 percent, respectively, compared to 17.9 percent and 18.2 percent for the three and six months ended June 30, 2013. The decreases in segment profit margin were the net result of the factors that reduced revenue and segment profit, as discussed above.
The equipment, temporary staffing and supply chain solutions business lines do not report backlog or new awards.
Total assets in the Global Services segment were $822 million as of June 30, 2014 compared to $759 million as of December 31, 2013.
Power
Revenue and segment profit for the Power segment are summarized as follows:
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
(in millions) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
|
$ |
204.0 |
|
$ |
422.6 |
|
$ |
454.9 |
|
$ |
805.6 |
|
Segment profit |
|
14.9 |
|
10.6 |
|
13.5 |
|
3.8 |
| ||||
Revenue for the three and six months ended June 30, 2014 decreased significantly compared to the three and six months ended June 30, 2013, principally due to a decrease in project execution activities on two solar power projects in the western United States and a gas-fired power plant in Texas that are all progressing towards completion.
Segment profit and segment profit margin for the three and six months ended June 30, 2014 increased compared to the three and six months ended June 30, 2013, primarily due to an accrual in the second quarter of 2014 for the reimbursement of $17 million of certain qualified expenditures as part of a cost-sharing award with the U.S. Department of Energy (DOE) and NuScale. The NuScale expenses, included in the determination of segment profit, were $4 million and $17 million (net of the $17 million accrual for both periods), respectively, for the three and six months ended June 30, 2014 and $13 million and $28 million, respectively, for the three and six months ended June 30, 2013. In addition, exclusive of NuScale, the net overall performance of the segments projects declined in the current year periods when compared to the prior year periods, with no single project being individually significant.
The operations of NuScale are primarily for research and development activities associated with the licensing and commercialization of small modular nuclear reactor technology. Although part of the Power segment, these activities could provide future benefits to both commercial and government clients. In May 2014, NuScale entered into a Cooperative Agreement establishing the terms and conditions of a multi-year funding award totaling $217 million under the DOEs Small Modular Reactor Licensing Technical Support Program. This cost-sharing award allows NuScale to use the DOE funds to cover first-of-a-kind engineering costs associated with small modular reactor design development and certification. The DOE will provide cost reimbursement for up to 43 percent of qualified expenditures incurred during the period from June 1, 2014 to May 31, 2019. The Cooperative Agreement also provides for reimbursement of pre-award costs incurred from September 18, 2013 to May 31, 2014. The company will recognize the cost-sharing award as a reduction of Total cost of revenue in the Condensed Consolidated Statement of Earnings and, correspondingly, as an increase to segment profit in the period for which the related costs are recognized, with the exception of certain pre-award costs which were recognized in the second quarter of 2014 upon entering into the cost-sharing agreement. A portion of the DOE cost-sharing award has been funded, with funding for future years subject to U.S. Congressional appropriations.
Although there has been a recent increase in bidding and proposal activity, the Power segment continues to be affected by relatively weak demand for new power generation. Market segments with the most likely near term opportunities include gas-fired combined cycle generation, renewable energy, and air emissions compliance projects for existing coal-fired power plants. New awards in the second quarter of 2014 were $38 million compared to $59 million in the second quarter of 2013. Backlog was $1.7 billion as of June 30, 2014 and $1.6 billion as of June 30, 2013.
Total assets in the Power segment were $129 million as of June 30, 2014 and $155 million as of December 31, 2013.
Other
Corporate general and administrative expense for the three and six months ended June 30, 2014 was $57 million and $94 million, respectively, compared to $32 million and $65 million for the three and six months ended June 30, 2013, respectively. The increases for the three and six month periods ended June 30, 2014 compared to the corresponding periods of the prior year were primarily attributable to higher compensation expense (much of it stock price-driven) and organizational realignment expense (mostly severance). Net interest expense was $3 million and $6 million during the three and six months periods ended June 30, 2014, respectively, compared to $2 million and $5 million during the corresponding periods of 2013. Income tax expense for the three and six months ended June 30, 2014 and 2013 is discussed above under Summary.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 of the Notes to Condensed Consolidated Financial Statements.
LITIGATION AND MATTERS IN DISPUTE RESOLUTION
See Note 14 of the Notes to Condensed Consolidated Financial Statements.
LIQUIDITY AND FINANCIAL CONDITION
Liquidity is provided by available cash and cash equivalents and marketable securities, cash generated from operations, credit facilities and access to capital markets. The company has committed and uncommitted lines of credit totaling $5.4 billion, which may be used for revolving loans, letters of credit and/or general purposes. The company believes that for at least the next 12 months, cash generated from operations, along with its unused credit capacity of $4.2 billion and substantial cash position, is sufficient to support operating requirements. However, the company regularly reviews its sources and uses of liquidity and may pursue opportunities to increase its liquidity position. The companys conservative financial strategy and consistent performance have earned it strong credit ratings, resulting in competitive advantage and continued access to the capital markets. As of June 30, 2014, the company was in compliance with all its covenants related to its debt agreements. The companys total debt to total capitalization (debt-to-capital) ratio as of June 30, 2014 was 12.6 percent compared to 12.3 percent as of December 31, 2013.
Cash Flows
Cash and cash equivalents were $2.2 billion as of June 30, 2014 compared to $2.3 billion as of December 31, 2013. Cash and cash equivalents combined with current and noncurrent marketable securities were $2.7 billion as of both June 30, 2014 and December 31, 2013. Cash and cash equivalents are held in numerous accounts throughout the world to fund the companys global project execution activities. As of June 30, 2014 and December 31, 2013, non-U.S. cash and cash equivalents amounted to $1.2 billion and $1.1 billion, respectively. Non-U.S. cash and cash equivalents exclude deposits of U.S. legal entities that are either swept into overnight, offshore accounts or invested in short-term, offshore time deposits, for which there is unrestricted access. The company did not consider any cash to be permanently reinvested overseas as of June 30, 2014 and December 31, 2013 and, as a result, has accrued the U.S. deferred tax liability on foreign earnings, as appropriate.
Operating Activities
Cash flows from operating activities result primarily from earnings sources and are affected by changes in operating assets and liabilities which consist primarily of working capital balances. Working capital levels vary from period to period and are primarily affected by the companys volume of work. These levels are also impacted by the mix, stage of completion and commercial terms of engineering and construction projects, as well as the companys execution of its projects within budget. Working capital requirements also vary by project and relate to clients in various industries and locations throughout the world. Most contracts require payments as the projects progress. The company evaluates the counterparty credit risk of third parties as
part of its project risk review process and in determining the appropriate level of reserves. The company maintains adequate reserves for potential credit losses and generally such losses have been minimal and within managements estimates. Additionally, certain projects receive advance payments from clients. A normal trend for these projects is to have higher cash balances during the initial phases of execution which then level out toward the end of the construction phase. As a result, the companys cash position is reduced as customer advances are worked off, unless they are replaced by advances on other projects. The company maintains cash reserves and borrowing facilities to provide additional working capital in the event that a projects net operating cash outflows exceed its available cash balances.
During the first half of 2014, working capital increased modestly due to an increase in accounts receivable partially offset by a decrease in contract work in progress. The drivers of these fluctuations were:
· An increase in accounts receivable in the Oil & Gas segment. The higher accounts receivable balance in 2014 resulted primarily from normal billing and collection activities for various projects, including the coal bed methane gas project in Australia, and was not indicative of any significant collection or liquidity issues.
· Decreases in contract work in progress in the Oil & Gas and Power segments that resulted primarily from normal project execution activities. A significant contributor to the decrease in contract work in progress in the Oil & Gas segment was the coal bed methane gas project in Australia. The decrease in contract work in progress in the Power segment resulted from numerous projects.
During the first half of 2013, working capital increased primarily due to increases in accounts receivable and contract work in progress and a decrease in advance billings. Significant drivers of these fluctuations were:
· Increases in accounts receivable in the Oil & Gas and Industrial & Infrastructure segments, which resulted principally from normal billing activities associated with numerous projects and was not indicative of any significant collection or liquidity issues.
· Increases in contract work in progress in the Oil & Gas and Industrial & Infrastructure segments that were partially offset by decreases in the Government segment. These fluctuations primarily resulted from normal project execution activities. A significant increase in contract work in progress for the Australian coal bed methane gas project in the Oil & Gas segment was offset by a decrease in work in progress for the LOGCAP IV Project in the Government segment.
· Decreases in advance billings in the Oil & Gas and Government segments, which were the result of normal project execution activities for several projects.
Cash provided by operating activities was $426 million for the six months ended June 30, 2014 compared to $236 million for the corresponding period of the prior year. The period-over-period improvement in cash flows from operating activities was primarily attributable to a significantly smaller net increase in working capital when comparing the two periods, with the largest contributor being a decrease in contract work in progress for the coal bed methane gas project in Australia in the Oil & Gas segment.
The company contributed approximately $12 million into its defined benefit pension plans during the six months ended June 30, 2014 compared to $9 million during the corresponding period of the prior year. The company expects to fund approximately $30 million to $60 million during 2014.
In May 2014, NuScale entered into a Cooperative Agreement establishing the terms and conditions of a multi-year funding award totaling $217 million under the DOEs Small Modular Reactor Licensing Technical Support Program. For further discussion of the Cooperative Agreement, see Power above.
Investing Activities
Cash utilized by investing activities amounted to $107 million and $138 million for the six months ended June 30, 2014 and 2013, respectively. The primary investing activities included purchases, sales and maturities of marketable securities, capital expenditures, disposals of property, plant and equipment, business acquisitions, and investments in and sales of partnerships and joint ventures. Investing activities during the first half of 2013 also included the consolidation of a variable interest entity (VIE) that had previously been accounted for using the proportionate consolidation method in which cash for this VIE was not required to be consolidated.
The company holds cash in bank deposits and marketable securities which are governed by the companys investment policy. This policy focuses on, in order of priority, the preservation of capital, maintenance of liquidity and maximization of yield.
These investments include money market funds which invest in U.S. Government-related securities, bank deposits placed with highly-rated financial institutions, repurchase agreements that are fully collateralized by U.S. Government-related securities, high-grade commercial paper and high quality short-term and medium-term fixed income securities. During the six months ended June 30, 2014 and 2013, purchases of marketable securities exceeded proceeds from sales and maturities of such securities by $33 million and $39 million, respectively. The company held combined current and noncurrent marketable securities of $493 million and $461 million as of June 30, 2014 and December 31, 2013, respectively.
Capital expenditures of $149 million and $122 million for the six months ended June 30, 2014 and 2013, respectively, primarily related to construction equipment associated with equipment operations in the Global Services segment, as well as investments in information technology and replacement or refurbishment of facilities. Proceeds from the disposal of property, plant and equipment of $47 million and $32 million during the first half of 2014 and 2013, respectively, primarily related to the disposal of construction equipment associated with the equipment operations in the Global Services segment.
During the first half of 2014, the company sold its interest in two joint ventures in the Industrial & Infrastructure segment for $44 million. The company had a 10 percent interest in both joint ventures and accounted for these investments using the equity method.
During the first half of 2013, the company paid $8 million to acquire an Australian-based company that specializes in fabrication and pressure welding. The company continues to make investments in partnerships or joint ventures primarily for the execution of single contracts or projects. Investments in unconsolidated partnerships and joint ventures were $18 million and $33 million during the six months ended June 30, 2014 and 2013, respectively.
Financing Activities
Cash utilized by financing activities during the six months ended June 30, 2014 and 2013 of $421 million and $94 million, respectively, included company stock repurchases, company dividend payments to stockholders, repayments of debt and distributions paid to holders of noncontrolling interests.
Cash utilized by financing activities included the repurchase and cancellation of 4,212,685 shares of companys common stock for $324 million in the first half of 2014 under its stock repurchase program.
Quarterly cash dividends are typically paid during the month following the quarter in which they are declared. Therefore, dividends declared in the fourth quarter of 2013 were paid in the first quarter of 2014. However, dividends declared in the fourth quarter of 2012 were paid in December 2012. Quarterly cash dividends of $0.21 per share and $0.16 per share were declared in the second quarter of 2014 and 2013, respectively. The payment and level of future cash dividends is subject to the discretion of the companys Board of Directors.
In September 2011, the company issued $500 million of 3.375% Senior Notes (the 2011 Notes) due September 15, 2021 and received proceeds of $492 million, net of underwriting discounts and debt issuance costs. Interest on the 2011 Notes is payable semi-annually on March 15 and September 15 of each year, and began on March 15, 2012. The company may, at any time, redeem the 2011 Notes at a redemption price equal to 100 percent of the principal amount, plus a make whole premium described in the indenture. Additionally, if a change of control triggering event occurs, as defined by the terms of the indenture, the company will be required to offer to purchase the 2011 Notes at a purchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The company is generally not limited under the indenture governing the 2011 Notes in its ability to incur additional indebtedness provided the company is in compliance with certain restrictive covenants, including restrictions on liens and restrictions on sale and leaseback transactions. These covenants are not expected to impact the companys liquidity or capital resources.
In February 2004, the company issued $330 million of 1.5% Convertible Senior Notes (the 2004 Notes) due February 15, 2024 and received proceeds of $323 million, net of underwriting discounts. Proceeds from the 2004 Notes were used to pay off the then-outstanding commercial paper and $100 million was used to obtain ownership of engineering and corporate office facilities in California through payoff of the lease financing. In December 2004, the company irrevocably elected to pay the principal amount of the 2004 Notes in cash. The 2004 Notes are convertible if a specified trading price of the companys common stock (the trigger price) is achieved and maintained for a specified period. The trigger price condition was satisfied during the fourth quarter of 2013 and second quarter of 2014 and the 2004 Notes were therefore classified as short-term debt as of December 31, 2013 and June 30, 2014, respectively. During the six months ended June 30, 2014, holders converted less than $0.1 million of the 2004 Notes in exchange for the principal balance owed in cash plus 1,727 shares of the companys common stock. During the six months ended June 30, 2013, holders converted less than $0.1 million of the 2004 Notes in exchange for the principal balance owed in cash plus 61 shares of the companys common stock. The company does not know the timing or principal amount of the remaining 2004 Notes that may be presented for conversion by the holders in the future. Additionally,
the 2004 Notes are currently redeemable at the option of the company, in whole or in part, at 100 percent of the principal amount plus accrued and unpaid interest. Available cash balances will be used to satisfy any principal and interest payments. Shares of the company stock will be issued to satisfy any appreciation between the conversion price and the market price on the date of conversion.
During the first half of 2013, the company redeemed its 5.625% Municipal Bonds for $18 million, or 100% of their principal amount, and also paid $9 million on the remaining balances of various notes payable that were assumed in connection with the 2012 acquisition of an equipment company.
Distributions paid to holders of noncontrolling interests represent cash outflows to partners of consolidated partnerships or joint ventures created primarily for the execution of single contracts or projects. Distributions paid were $44 million and $46 million during the six months ended June 30, 2014 and 2013, respectively. Distributions in both 2014 and 2013 primarily related to mining joint venture projects in Argentina and Australia.
Effect of Exchange Rate Changes on Cash
Unrealized translation gains and losses resulting from changes in functional currency exchange rates are reflected in the cumulative translation component of accumulated other comprehensive loss. During the six months ended June 30, 2014, some major foreign currencies strengthened against the U.S. dollar resulting in unrealized translation gains of $1 million related to cash held by foreign subsidiaries. During the six months ended June 30, 2013, most major foreign currencies weakened against the U.S. dollar resulting in unrealized translation losses of $53 million related to cash held by foreign subsidiaries. The cash held in foreign currencies will primarily be used for project-related expenditures in those currencies, and therefore the companys exposure to exchange gains and losses is generally mitigated.
Off-Balance Sheet Arrangements
Guarantees and Commitments
In May 2014, the company entered into a $1.7 billion Revolving Loan and Letter of Credit Facility Agreement (Credit Facility) that matures in 2019. Borrowings under the Credit Facility bear interest at rates based on the Eurodollar Rate or an alternative base rate, plus an applicable borrowing margin. The Credit Facility may be increased up to an additional $500 million subject to certain conditions, and contains customary financial and restrictive covenants, including a maximum ratio of consolidated debt to tangible net worth of one-to-one and a cap on the aggregate amount of debt of $750 million for the companys subsidiaries. On the same day, the company terminated its $1.2 billion Revolving Performance Letter of Credit Facility Agreement dated December 14, 2010 and all outstanding letters of credit thereunder have been assigned or otherwise transferred to the new Credit Facility.
In conjunction with the Credit Facility, the company also amended its existing $1.8 billion Revolving Loan and Letter of Credit Facility Agreement dated November 9, 2012 to extend the maturity date to May 2019 and increase the cap on the aggregate amount of debt for the company subsidiaries from $600 million to $750 million.
As of June 30, 2014, the company had a combination of committed and uncommitted lines of credit that totaled $5.4 billion. These lines may be used for revolving loans, letters of credit and/or general purposes. Letters of credit are provided in the ordinary course of business primarily to indemnify the companys clients if the company fails to perform its obligations under its contracts. As of June 30, 2014, letters of credit and borrowings under credit facilities totaling $1.2 billion were outstanding under these committed and uncommitted lines of credit. As an alternative to letters of credit, surety bonds are used as a form of credit enhancement.
In the ordinary course of business, the company enters into various agreements providing performance assurances and guarantees to clients on behalf of certain consolidated and unconsolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The performance guarantees have various expiration dates ranging from mechanical completion of the facilities being constructed to a period extending beyond contract completion in certain circumstances. The maximum potential amount of future payments that the company could be required to make under outstanding performance guarantees, which represents the remaining cost of work to be performed by or on behalf of third parties under engineering and construction contracts, was estimated to be $14.1 billion as of June 30, 2014. Amounts that may be required to be paid in excess of estimated cost to complete contracts in progress are not estimable. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed under the contract. For lump-sum or fixed-price contracts, the performance guarantee amount is the cost to complete the contracted work less amounts remaining to be billed to the client
under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract, the company may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors for claims. The company assessed its performance guarantee obligation as of June 30, 2014 and December 31, 2013 in accordance with ASC 460, Guarantees and the carrying value of the liability was not material.
Financial guarantees, made in the ordinary course of business in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate the company to make payment in the event of a default by the borrower. These arrangements may require the borrower to pledge collateral to support the fulfillment of the borrowers obligation.
Variable Interest Entities
In the normal course of business, the company forms partnerships or joint ventures primarily for the execution of single contracts or projects. The company evaluates each partnership and joint venture to determine whether the entity is a VIE. If the entity is determined to be a VIE, the company assesses whether it is the primary beneficiary and needs to consolidate the entity.
For further discussion of the companys VIEs, see Note 16 to the Condensed Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes to market risk in the first half of 2014. Accordingly, the disclosures provided in the Annual Report on Form 10-K for the year ended December 31, 2013 remain current.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on their evaluation as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) are effective, based upon an evaluation of those controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 of the Exchange Act.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
FLUOR CORPORATION
CHANGES IN CONSOLIDATED BACKLOG
UNAUDITED
|
|
Three Months Ended |
| ||||
|
|
June 30, |
| ||||
(in millions) |
|
2014 |
|
2013 |
| ||
Backlog beginning of period |
|
$ |
40,162.6 |
|
$ |
37,459.7 |
|
New awards |
|
5,863.1 |
|
7,194.0 |
| ||
Adjustments and cancellations, net |
|
(590.9 |
) |
(568.9 |
) | ||
Work performed |
|
(5,106.6 |
) |
(7,035.9 |
) | ||
Backlog end of period |
|
$ |
40,328.2 |
|
$ |
37,048.9 |
|
|
|
Six Months Ended |
| ||||
|
|
June 30, |
| ||||
(in millions) |
|
2014 |
|
2013 |
| ||
Backlog beginning of period |
|
$ |
34,907.1 |
|
$ |
38,199.4 |
|
New awards |
|
16,531.6 |
|
13,705.7 |
| ||
Adjustments and cancellations, net |
|
(762.0 |
) |
(784.6 |
) | ||
Work performed |
|
(10,348.5 |
) |
(14,071.6 |
) | ||
Backlog end of period |
|
$ |
40,328.2 |
|
$ |
37,048.9 |
|
Fluor and its subsidiaries, as part of their normal business activities, are parties to a number of legal proceedings and other matters in various stages of development. Management periodically assesses our liabilities and contingencies in connection with these matters based upon the latest information available. We disclose material pending legal proceedings pursuant to Securities and Exchange Commission rules and other pending matters as we may determine to be appropriate.
For information on matters in dispute, see Note 13 to the Consolidated Financial Statements included in the companys Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on February 18, 2014, and Note 14 to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q.
There have been no material changes from our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) The following table provides information about purchases by the company during the quarter ended June 30, 2014 of equity securities that are registered by the company pursuant to Section 12 of the Exchange Act.
Issuer Purchases of Equity Securities
Period |
|
Total Number |
|
Average |
|
Total Number |
|
Maximum |
| |
|
|
|
|
|
|
|
|
|
| |
April 1, 2014 April 30, 2014 |
|
194,612 |
|
$ |
76.70 |
|
194,141 |
|
12,593,318 |
|
|
|
|
|
|
|
|
|
|
| |
May 1, 2014 May 31, 2014 |
|
1,183,443 |
|
74.70 |
|
1,183,020 |
|
11,410,298 |
| |
|
|
|
|
|
|
|
|
|
| |
June 1, 2014 June 30, 2014 |
|
377,392 |
|
75.76 |
|
373,724 |
|
11,036,574 |
| |
|
|
|
|
|
|
|
|
|
| |
Total |
|
1,755,447 |
|
$ |
75.15 |
|
1,750,885 |
|
|
|
(1) Consists of 1,750,885 shares of company stock repurchased and cancelled by the company under its stock repurchase program for total consideration of $132 million and 4,562 shares cancelled as payment for statutory withholding taxes upon the vesting of restricted stock issued pursuant to equity based employee benefit plans.
(2) The share repurchase program was originally announced on November 3, 2011 for 12,000,000 shares and was subsequently amended on February 6, 2013 and February 6, 2014 to increase the size of the program by 8,000,000 and 6,000,000 shares, respectively. The company continues to repurchase shares from time to time in open market transactions or privately negotiated transactions, including through pre-arranged trading programs, at its discretion, subject to market conditions and other factors and at such time and in amounts that the company deems appropriate.
EXHIBIT INDEX
Exhibit |
|
Description |
3.1 |
|
Amended and Restated Certificate of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrants Current Report on Form 8-K filed on May 8, 2012). |
|
|
|
3.2 |
|
Amended and Restated Bylaws of the registrant (incorporated by reference to Exhibit 3.2 to the registrants Current Report on Form 8-K filed on May 8, 2012). |
|
|
|
4.1 |
|
Indenture between Fluor Corporation and The Bank of New York, as trustee, dated as of February 17, 2004 (incorporated by reference to Exhibit 4.1 to the registrants Current Report on Form 8-K filed on February 17, 2004). |
|
|
|
4.2 |
|
First Supplemental Indenture between Fluor Corporation and The Bank of New York, as trustee, dated as of February 17, 2004 (incorporated by reference to Exhibit 4.2 to the registrants Current Report on Form 8-K filed on February 17, 2004). |
|
|
|
4.3 |
|
Senior Debt Securities Indenture between Fluor Corporation and Wells Fargo Bank, National Association, as trustee, dated as of September 8, 2011 (incorporated by reference to Exhibit 4.3 to the registrants Current Report on Form 8-K filed on September 8, 2011). |
|
|
|
4.4 |
|
First Supplemental Indenture between Fluor Corporation and Wells Fargo Bank, National Association, as trustee, dated as of September 13, 2011 (incorporated by reference to Exhibit 4.4 to the registrants Current Report on Form 8-K filed on September 13, 2011). |
|
|
|
4.5 |
|
Second Supplemental Indenture between Fluor Corporation and Wells Fargo Bank, National Association, as trustee, dated as of June 22, 2012 (incorporated by reference to Exhibit 4.2 to the registrants Form S-3ASR filed on June 22, 2012). |
|
|
|
10.1 |
|
Fluor Corporation 2000 Restricted Stock Plan for Non-Employee Directors, as amended and restated effective January 1, 2010 (incorporated by reference to Exhibit 10.3 to the registrants Quarterly Report on Form 10-Q filed on May 10, 2010). |
|
|
|
10.2 |
|
Fluor Executive Deferred Compensation Plan, as amended and restated effective April 21, 2003 (incorporated by reference to Exhibit 10.5 to the registrants Annual Report on Form 10-K filed on February 29, 2008). |
|
|
|
10.3 |
|
Fluor Corporation Deferred Directors Fees Program, as amended and restated effective January 1, 2002 (incorporated by reference to Exhibit 10.9 to the registrants Annual Report on Form 10-K filed on March 31, 2003). |
|
|
|
10.4 |
|
Directors Life Insurance Summary (incorporated by reference to Exhibit 10.12 to the registrants Registration Statement on Form 10/A (Amendment No. 1) filed on November 22, 2000). |
|
|
|
10.5 |
|
Fluor Executives Supplemental Benefit Plan (incorporated by reference to Exhibit 10.8 to the registrants Annual Report on Form 10-K filed on February 29, 2008). |
|
|
|
10.6 |
|
Executive Severance Plan (incorporated by reference to Exhibit 10.7 to the registrants Annual Report on Form 10-K filed on February 22, 2012). |
|
|
|
10.7 |
|
Fluor Corporation 2001 Fluor Stock Appreciation Rights Plan, as amended and restated on November 1, 2007 (incorporated by reference to Exhibit 10.12 to the registrants Annual Report on Form 10-K filed on February 29, 2008). |
|
|
|
10.8 |
|
Fluor Corporation 2003 Executive Performance Incentive Plan, as amended and restated as of March 30, 2005 (incorporated by reference to Exhibit 10.15 to the registrants Quarterly Report on Form 10-Q filed on May 5, 2005). |
|
|
|
10.9 |
|
Form of Compensation Award Agreements for grants under the Fluor Corporation 2003 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.16 to the registrants Quarterly Report on Form 10-Q filed on November 9, 2004). |
|
|
|
10.10 |
|
Summary of Fluor Corporation Non-Management Director Compensation (incorporated by reference to Exhibit 10.12 to the registrants Quarterly Report on Form 10-Q filed on August 2, 2012). |
|
|
|
10.11 |
|
Fluor Corporation 409A Deferred Directors Fees Program, as amended and restated effective as of January 1, 2013 (incorporated by reference to Exhibit 10.13 to the registrants Annual Report on Form 10-K filed on February 20, 2013). |
10.12 |
|
Fluor 409A Executive Deferred Compensation Program, as amended and restated effective January 1, 2014 (incorporated by reference to Exhibit 10.13 to the registrants Annual Report on Form 10-K filed on February 18, 2014). |
|
|
|
10.13 |
|
Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.1 to the registrants Current Report on Form 8-K filed on May 3, 2013). |
|
|
|
10.14 |
|
Form of Indemnification Agreement entered into between the registrant and each of its directors and executive officers (incorporated by reference to Exhibit 10.21 to the registrants Annual Report on Form 10-K filed on February 25, 2009). |
|
|
|
10.15 |
|
Retention Award granted to Stephen B. Dobbs on February 7, 2008 (incorporated by reference to Exhibit 10.22 to the registrants Annual Report on Form 10-K filed on February 25, 2009). |
|
|
|
10.16 |
|
Retention Award granted to David T. Seaton on February 7, 2008 (incorporated by reference to Exhibit 10.23 to the registrants Annual Report on Form 10-K filed on February 25, 2009). |
|
|
|
10.17 |
|
Form of Stock Option Agreement under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.28 to the registrants Quarterly Report on Form 10-Q filed on May 10, 2010). |
|
|
|
10.18 |
|
Form of Restricted Stock Unit Agreement under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.29 to the registrants Quarterly Report on Form 10-Q filed on May 10, 2010). |
|
|
|
10.19 |
|
Form of Non-U.S. Stock Growth Incentive Award Agreement under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.30 to the registrants Quarterly Report on Form 10-Q filed on May 10, 2010). |
|
|
|
10.20 |
|
Form of Restricted Unit Award Agreement under the Fluor Corporation 2000 Restricted Stock Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.28 to the registrants Quarterly Report on Form 10-Q filed on August 4, 2011). |
|
|
|
10.21 |
|
Form of Restricted Stock Agreement under the Fluor Corporation 2000 Restricted Stock Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.29 to the registrants Quarterly Report on Form 10-Q filed on August 4, 2011). |
|
|
|
10.22 |
|
Form of Change in Control Agreement entered into between the registrant and each of its executive officers (incorporated by reference to Exhibit 10.1 to the registrants Current Report on Form 8-K filed on June 29, 2010). |
|
|
|
10.23 |
|
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012, among Fluor Corporation, the Lenders thereunder, BNP Paribas, as Administrative Agent and an Issuing Lender, Bank of America, N.A., as Syndication Agent, and Citibank, N.A. and The Bank of Tokyo - Mitsubishi UFJ, Ltd., as Co-Documentation Agents (incorporated by reference to Exhibit 10.29 to the registrants Annual Report on Form 10-K filed on February 20, 2013). |
|
|
|
10.24 |
|
Amendment No. 1 dated as of May 28, 2014 to that certain Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012, among Fluor Corporation, the Lenders thereunder, BNP Paribas, as Administrative Agent and an Issuing Lender, Bank of America, N.A., as Syndication Agent, and Citibank, N.A. and The Bank of Tokyo - Mitsubishi UFJ, Ltd., as Co-Documentation Agents.* |
|
|
|
10.25 |
|
Revolving Loan and Letter of Credit Facility Agreement dated as of May 28, 2014, among Fluor Corporation, the Lenders thereunder, BNP Paribas, as Administrative Agent and an Issuing Lender, Bank of America, N.A., as Syndication Agent, and Citibank, N.A. and The Bank of Tokyo - Mitsubishi UFJ, Ltd., as Co-Documentation Agents.* |
|
|
|
10.26 |
|
Form of Value Driver Incentive Award Agreement (payable in shares) under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.33 to the registrants Quarterly Report on Form 10-Q filed on May 3, 2012). |
|
|
|
10.27 |
|
Form of Option Agreement (with international grant language) under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.38 to the registrants Quarterly Report on Form 10-Q filed on May 5, 2011). |
|
|
|
10.28 |
|
Form of Restricted Stock Unit Agreement (with international grant language) under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.39 to the registrants Quarterly Report on Form 10-Q filed on May 5, 2011). |
10.29 |
|
Form of Non-U.S. Stock Growth Incentive Award Agreement under the Fluor Corporation Amended and Restated 2008 Executive Performance Incentive Plan (incorporated by reference to Exhibit 10.40 to the registrants Quarterly Report on Form 10-Q filed on May 5, 2011). |
|
|
|
10.30 |
|
Offer of Employment Letter from Fluor Corporation to Biggs C. Porter (incorporated by reference to Exhibit 10.38 to the registrants Quarterly Report on Form 10-Q filed on May 3, 2012). |
|
|
|
10.31 |
|
Retention Award granted to David R. Dunning on September 26, 2013 (incorporated by reference to Exhibit 10.36 to the registrants Annual Report on Form 10-K filed on February 18, 2014). |
|
|
|
10.32 |
|
Retirement and Release Agreement dated as of April 28, 2014, between Fluor Corporation and Stephen B. Dobbs (incorporated by reference to Exhibit 10.32 to the registrants Quarterly Report on Form 10-Q filed on May 1, 2014). |
|
|
|
31.1 |
|
Certification of Chief Executive Officer of Fluor Corporation.* |
|
|
|
31.2 |
|
Certification of Chief Financial Officer of Fluor Corporation.* |
|
|
|
32.1 |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.* |
|
|
|
32.2 |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.* |
|
|
|
101.INS |
|
XBRL Instance Document.* |
|
|
|
101.SCH |
|
XBRL Taxonomy Extension Schema Document.* |
|
|
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document.* |
|
|
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document.* |
|
|
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document.* |
|
|
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document.* |
* New exhibit filed with this report.
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2014 and 2013, (ii) the Condensed Consolidated Balance Sheet as of June 30, 2014 and December 31, 2013, and (iii) the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2014 and 2013.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
FLUOR CORPORATION |
|
|
|
|
Date: July 31, 2014 |
/s/ Biggs C. Porter |
|
Biggs C. Porter |
|
Executive Vice President and Chief Financial Officer |
|
|
|
|
Date: July 31, 2014 |
/s/ Gary G. Smalley |
|
Gary G. Smalley |
|
Senior Vice President and Controller |
Exhibit 10.24
EXECUTION COPY
AMENDMENT NO. 1
Dated as of May 28, 2014
to
REVOLVING LOAN AND LETTER OF CREDIT FACILITY AGREEMENT
Dated as of November 9, 2012
THIS AMENDMENT NO. 1 (Amendment) is made as of May 28, 2014 by and among Fluor Corporation (the Borrower), the financial institutions listed on the signature pages hereof and BNP Paribas, as Administrative Agent (the Administrative Agent), under that certain Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012 by and among the Borrower, the Lenders and the Administrative Agent (as amended, supplemented or otherwise modified from time to time, the Facility Agreement). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Facility Agreement.
WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent agree to certain amendments to the Facility Agreement;
WHEREAS, the Lenders party hereto and the Administrative Agent have agreed to such amendments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent have agreed to enter into this Amendment.
1. Amendments to Facility Agreement. Effective as of the date of satisfaction of the conditions precedent set forth in Section 2 below, the Facility Agreement is hereby amended as follows:
(a) Section 1.01 of the Facility Agreement is amended to add the following new definitions therein in the appropriate alphabetical order and, where applicable, replace the corresponding previously existing definitions:
Additional Commitment Lender has the meaning specified in Section 2.25(d).
Change in Law has the meaning specified in Section 2.17(a).
Competitor means any Person that is engaged directly, as a significant part of its activities, in the business of delivering engineering, procurement, construction, maintenance, and project management to governments and clients in diverse industries.
Eurodollar Rate means, for any Interest Rate Determination Date with respect to any Eurodollar Rate Revolving Advances for any Interest Period therefor, an interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
rate per annum obtained by dividing (i) (a) the rate per annum determined by the Administrative Agent administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate as reasonably determined by the Administrative Agent) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date (as set forth by Bloomberg Information Service or any successor thereto or any other service selected by Administrative Agent which has been nominated by ICE Benchmark Administration Limited as an authorized information vendor for the purpose of displaying such rates) (in each case the Eurodollar Screen Rate); provided that, if the Eurodollar Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement or (b) in the event the rate referenced in the preceding clause (a) is not available at such time for such Interest Period (the Impacted Interest Period), then the Eurodollar Rate for such Interest Period shall be the Interpolated Rate; provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement, by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. It is understood and agreed that all of the terms and conditions of this definition of Eurodollar Rate shall be subject to Section 2.05(e).
Eurodollar Screen Rate has the meaning assigned to such term in the definition of Eurodollar Rate.
Existing Maturity Date has the meaning specified in Section 2.25(a).
Extending Lender has the meaning specified in Section 2.25(b).
Extension Date has the meaning specified in Section 2.25(a).
Governmental Authority means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator (including any central bank or any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).
Impacted Interest Period has the meaning assigned to such term in the definition of Eurodollar Rate.
Interpolated Rate means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Eurodollar Screen Rate for the longest period (for which the Eurodollar Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the Eurodollar Screen Rate for the shortest period (for which the Eurodollar Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.
Issuing Lender means BNPP, Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation and, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and at the request of the Borrower, any other Lender that agrees to be an Issuing Lender hereunder,
each in its capacity as an issuer of Letters of Credit hereunder, and its successors, and the term Issuing Lenders means all such Persons, collectively.
Lender Notice Date has the meaning specified in Section 2.25(b).
Maturity Date means May 28, 2019, subject to extension (in the case of each Lender consenting thereto) as provided in Section 2.25; provided, however, that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.
Non-Extending Lender has the meaning specified in Section 2.25(b).
Sanctions has the meaning specified in Section 4.14.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business.
(b) The definition of Applicable Percentage appearing in Section 1.01 of the Facility Agreement is amended to delete the phrase to make Revolving Advances appearing in the second sentence thereof.
(c) The definition of Applicable Rate appearing in Section 1.01 of the Facility Agreement is amended to amend and restate each pricing grid set forth therein in its entirety to read as follows:
|
|
|
|
|
|
Applicable Rate for Revolving | ||
Pricing |
|
Ratings |
|
Applicable Rate |
|
Eurodollar Rate |
|
Base Rate |
1 |
|
A/A2 or better |
|
7.0 basis points |
|
87.5 basis points |
|
0 basis points |
2 |
|
A-/A3 |
|
9.0 basis points |
|
100.0 basis points |
|
0 basis points |
3 |
|
BBB+/Baa1 |
|
12.0 basis points |
|
112.5 basis points |
|
12.5 basis points |
4 |
|
BBB/Baa2 or worse |
|
15.0 basis points |
|
125.0 basis points |
|
25.0 basis points |
Pricing |
|
Ratings |
|
Applicable Rate |
|
Applicable Rate |
1 |
|
A/A2 or better |
|
87.5 basis points |
|
50.0 basis points |
2 |
|
A-/A3 |
|
100.0 basis points |
|
55.0 basis points |
3 |
|
BBB+/Baa1 |
|
112.5 basis points |
|
62.5 basis points |
4 |
|
BBB/Baa2 or worse |
|
125.0 basis points |
|
70.0 basis points |
(d) The definition of Base Rate appearing in Section 1.01 of the Facility Agreement is amended to delete the word or appearing immediately after clause (b) thereof and replace such word with the word and.
(e) The definition of Consolidated Debt appearing in Section 1.01 of the Facility Agreement is amended to (i) delete the phrase FASB Interpretation No. 46, Consolidation of Variable Interest Entities (January 2003) appearing in the parenthetical therein and replace such phrase with the phrase the Accounting Standards Codification 810, Consolidation, (ii) delete the phrase by separate line item appearing therein and (iii) delete the phrase non-recourse to the Borrower and its Subsidiaries appearing at the end thereof and replace such phrase with the phrase debt related to a variable interest entity.
(f) The definition of Debt appearing in Section 1.01 of the Facility Agreement is amended to (i) delete the phrase FASB Interpretation No. 46, Consolidation of Variable Interest Entities (January 2003) appearing in the parenthetical in last sentence thereof and replace such phrase with the phrase the Accounting Standards Codification 810, Consolidation, (ii) delete the phrase by separate line item appearing in last sentence thereof and (iii) delete the phrase non-recourse to the Borrower and its Subsidiaries appearing at the end thereof and replace such phrase with the phrase debt related to a variable interest entity.
(g) The definition of Defaulting Lender appearing in Section 1.01 of the Facility Agreement is amended to delete each reference to Loans appearing therein and replace each such reference with the phrase Revolving Advances.
(h) The definition of GAAP appearing in Section 1.01 of the Facility Agreement is amended to delete the reference to December 31, 2011 appearing therein and replace such reference with a reference to December 31, 2013.
(i) The definition of Material Adverse Change appearing in Section 1.01 of the Facility Agreement is amended to delete the reference to December 31, 2011 appearing therein and replace such reference with a reference to December 31, 2013.
(j) The definition of Permitted Cover appearing in Section 1.01 of the Facility Agreement is amended to delete the phrase excluding the Lenders appearing in the parenthetical therein and replace such phrase with the phrase excluding Letters of Credit issued pursuant to this Agreement.
(k) The definition of Permitted Investments appearing in Section 1.01 of the Facility Agreement is amended to (i) delete the word and appearing immediately after clause (iv) thereof and add the word and immediately after clause (ii) thereof, (ii) delete clauses (iii) and (v) thereof in their entirety, (iii) change clause (iv) thereof to new clause (iii) thereof and (iv) delete the amount $100,000,000 appearing therein and replace such amount with the amount $10,000,000,000.
(l) The definition of Required Lenders appearing in Section 1.01 of the Facility Agreement is amended to delete the phrase if the commitment of each Lender to make Revolving Advances appearing therein and replace such phrase with the phrase if the Commitment of each Lender.
(m) Section 2.05(a) of the Facility Agreement is amended to delete the word unpaid appearing immediately after the phrase the Borrower shall pay interest on the therein and replace such word with the word outstanding.
(n) Section 2.05(b)(ii) of the Facility Agreement is amended to delete the phrase , nine appearing therein.
(o) Section 2.05(b)(iii) of the Facility Agreement is amended to delete the word next appearing immediately before the phrase preceding Business Day appearing therein and replace such word with the word immediately.
(p) Section 2.07(b) of the Facility Agreement is amended to (i) add the phrase or stated immediately after the phrase The face appearing in the fifth sentence thereof and (ii) add the following sentence immediately after the first sentence thereof:
For the avoidance of doubt, if the Maturity Date shall be extended pursuant to Section 2.25, Maturity Date as referenced in this clause (b) shall refer to the Maturity Date as extended pursuant to Section 2.25; provided that, notwithstanding anything in this Agreement (including Section 2.25 hereof) or any other Loan Document to the contrary, the Maturity Date, as such term is used in reference to the Issuing Lender or any Letter of Credit issued thereby, may not be extended without the prior written consent of the relevant Issuing Lender.
(q) Section 2.12(a) of the Facility Agreement is amended to add the following sentence to the end thereof:
All such cash collateral amounts shall be held in a separate account and shall not be commingled with other funds of the Administrative Agent unless the Administrative Agent elects to make a Permitted Investment, as described below.
(r) Section 2.12(d) of the Facility Agreement is amended to add the phrase Permitted Investments immediately before the phrase activities shall be for the account of appearing in the fifth sentence thereof.
(s) Section 2.14 of the Facility Agreement is amended to (i) add the phrase without set-off, deduction or counterclaim, immediately following the phrase New York, New York, appearing in clause (a) thereof and (ii) delete the reference to Sections 7.09 and 8.03 appearing in clause (d) thereof and replace such reference with a reference to Sections 7.06 and 8.03.
(t) Section 2.17 of the Facility Agreement is amended to (i) add the parenthetical (any such occurrence, a Change in Law) to the end of the first paragraph of clause (a) thereof and (ii) amend and restate clause (b) thereof to read as follows:
(b) Capital Adequacy. If after the date hereof, any Lender shall have determined that the adoption of any applicable law, rule or regulation regarding capital adequacy or liquidity requirements, or any Change in Law occurs, or compliance by any Lender (or its Lending Office or any Person directly or indirectly owning or controlling such Lender) with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lenders capital as a consequence of its obligations hereunder to a level below that which such Lender could have achieved but for such adoption, change or compliance (taking into consideration such Lenders policies with respect to capital adequacy and liquidity) by an amount deemed by such Lender to be material, then from time to time, within 10 Business Days after demand by such Lender (with a copy to
the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.
(u) Section 2.22 of the Facility Agreement is amended to delete each reference to Loans appearing in the last paragraph thereof and replace each such reference with the phrase Revolving Advances.
(v) Section 2.24 of the Facility Agreement is amended to delete each reference to the Company appearing therein and to replace each such reference with the Borrower.
(w) Article II of the Facility Agreement is amended to add the following as a new Section 2.25 thereof:
SECTION 2.25. Extension of Maturity Date.
(a) Requests for Extension. The Borrower may, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 60 days and not later than 30 days prior to each anniversary of the date of this Agreement (each such date, an Extension Date), request that each Lender extend such Lenders Maturity Date to the date that is one year after the Maturity Date then in effect for such Lender (the Existing Maturity Date).
(b) Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later than the date that is 15 days after the date on which the Administrative Agent received the Borrowers extension request (the Lender Notice Date), advise the Administrative Agent whether or not such Lender agrees to such extension (each Lender that determines to so extend its Maturity Date, an Extending Lender). Each Lender that determines not to so extend its Maturity Date (a Non-Extending Lender) shall notify the Administrative Agent of such fact promptly after such determination (but in any event no later than the Lender Notice Date), and any Lender that does not so advise the Administrative Agent on or before the Lender Notice Date shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree, and it is understood and agreed that no Lender shall have any obligation whatsoever to agree to any request made by the Borrower for extension of the Maturity Date.
(c) Notification by Administrative Agent. The Administrative Agent shall notify the Borrower of each Lenders determination under this Section no later than the date that is 15 days prior to the applicable Extension Date (or, if such date is not a Business Day, on the next preceding Business Day).
(d) Additional Commitment Lenders. The Borrower shall have the right, but shall not be obligated, on or before the applicable Maturity Date for any Non-Extending Lender to replace such Non-Extending Lender with, and add as Lenders under this Agreement in place thereof, one or more banks, financial institutions or other entities (each, an Additional Commitment Lender) approved by the Administrative Agent in accordance with the procedures provided in Section 2.24, each of which Additional Commitment Lenders shall have entered into an Assignment and Assumption Agreement (in accordance with and subject to the restrictions contained in Section 8.06, with the Borrower or replacement Lender obligated to pay any applicable processing or
recordation fee) with such Non-Extending Lender, pursuant to which such Additional Commitment Lenders shall, effective on or before the applicable Maturity Date for such Non-Extending Lender, assume a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lenders Commitment hereunder on such date). The Administrative Agent may effect such amendments to this Agreement as are reasonably necessary to provide for any such extensions with the consent of the Borrower but without the consent of any other Lenders.
(e) Minimum Extension Requirement. If (and only if) the total of the Commitments in respect of the Revolving Facility Sublimit of the Lenders that have agreed to extend their Maturity Date and the additional Commitments of the Additional Commitment Lenders is more than 50% of the aggregate amount of the Revolving Facility Sublimit in effect immediately prior to the applicable Extension Date, then, effective as of the applicable Extension Date, the Maturity Date of each Extending Lender and of each Additional Commitment Lender shall be extended to the date that is one year after the Existing Maturity Date (except that, if such date is not a Business Day, such Maturity Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a Lender for all purposes of this Agreement and shall be bound by the provisions of this Agreement as a Lender hereunder and shall have the obligations of a Lender hereunder.
(f) Conditions to Effectiveness of Extension. Notwithstanding the foregoing, (x) no more than two (2) extensions of the Maturity Date shall be permitted hereunder and (y) any extension of any Maturity Date pursuant to this Section 2.25 shall not be effective with respect to any Lender unless:
(i) no Default shall have occurred and be continuing on the applicable Extension Date and immediately after giving effect thereto;
(ii) all representations and warranties of the Borrower contained in Article IV of this Agreement (other than the representation and warranty of the Borrower contained in Section 4.04(b) hereof) shall be true (except that for purposes of this Section 2.25(f), the representations and warranties contained in Section 4.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 5.01(a)) on and as of the applicable Extension Date and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(iii) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries shall have occurred and be continuing on and as of the applicable Extension Date and after giving effect thereto which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents; and
(iv) the Administrative Agent shall have received a certificate from the Borrower signed by a senior vice president, the chief financial officer or the treasurer of the Borrower (A) certifying the accuracy of the foregoing clauses (i),
(ii) and (iii) and (B) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such extension.
(g) Maturity Date for Non-Extending Lenders. On the Maturity Date of each Non-Extending Lender, (i) the Commitment of each Non-Extending Lender shall automatically terminate and (ii) the Borrower shall repay such Non-Extending Lender in accordance with Section 2.03 (and shall pay to such Non-Extending Lender all of the other Obligations owing to it under this Agreement) and after giving effect thereto shall prepay any Revolving Advances outstanding on such date (and pay any additional amounts required pursuant to Section 8.03(d)) to the extent necessary to keep outstanding Revolving Advances ratable with any revised Applicable Percentages of the respective Lenders effective as of such date, and the Administrative Agent shall administer any necessary reallocation of the outstanding Revolving Advances and LC Exposures (without regard to any minimum borrowing, pro rata borrowing and/or pro rata payment requirements contained elsewhere in this Agreement).
(h) Conflicting Provisions. This Section shall supersede any provisions in Section 2.14 or Section 8.05 to the contrary.
(x) Section 3.02(c) of the Facility Agreement is amended to delete the word After appearing at the beginning of the first sentence thereof and to replace such word with At the time of and immediately after.
(y) Section 4.04(a) of the Facility Agreement is amended to delete each reference to December 31, 2011 appearing therein and replace each such reference with a reference to December 31, 2013.
(z) Section 4.10 of the Facility Agreement is amended to add the following sentence to the end thereof:
The Borrower will not, directly or indirectly, use the proceeds of the Revolving Advances or Letters of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Revolving Advances, whether as underwriter, advisor, investor, or otherwise).
(aa) Article IV of the Facility Agreement is amended to add the following as a new Section 4.14 thereof:
SECTION 4.14. Sanctions.
None of the Borrower, any of its Subsidiaries or any director, officer or Affiliate or, to the knowledge of the Borrower, any employee or agent, of the Borrower or any of its Subsidiaries is an individual or entity (Person) that is, or is owned or controlled by Persons that: (i) are the subject of any sanctions administered or enforced by the U.S. Department of the Treasurys Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majestys Treasury, or other relevant sanctions authority (collectively, Sanctions), or
(ii) have a place of business or are organized or resident in a country or territory that is, or whose government is, the subject of comprehensive Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria.
(bb) Section 5.01 of the Facility Agreement is amended to (i) delete the phrase 100 days appearing in clause (a) thereof and replace such phrase with the phrase one hundred (100) days, (ii) delete the phrase 55 days appearing in clause (b) thereof and replace such phrase with the phrase fifty-five (55) days and (iii) delete the phrase three quarters appearing in clause (b) thereof and replace such phrase with the phrase three (3) quarters.
(cc) Section 5.04 of the Facility Agreement is amended to add the phrase , subject in each case to Section 8.06(a) at the end of the parenthetical appearing in clause (i) thereof.
(dd) Section 5.07(b) of the Facility Agreement is amended to delete the amount $600,000,000 appearing therein and replace such amount with the amount $750,000,000.
(ee) Section 5.08 of the Facility Agreement is amended to (i) delete the word and immediately following clause (viii) thereof, (ii) change clause (ix) thereof to new clause (x) thereof and (iii) add the following as a new clause (ix) thereof:
(ix) Liens incurred or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance or other types of social security (other than a Lien imposed by ERISA) or to secure the performance of tenders, statutory obligations, bid and appeals bonds, contracts (other than for the repayment of borrowed money) and surety and performance bonds (including, without limitation, Liens securing obligations under indemnity agreements for surety bonds); and
(ff) Article V of the Facility Agreement is amended to add the following as a new Section 5.13 thereof:
SECTION 5.13. Use of Proceeds.
The Borrower will not, directly or indirectly, use the proceeds of the Revolving Advances or Letters of Credit in violation of Section 4.10.
(gg) Section 6.01(a) of the Facility Agreement is amended to delete the reference to three days appearing therein and replace such reference with a reference to three (3) days.
(hh) Section 6.01(b) of the Facility Agreement is amended to add the phrase , or Section 5.13 immediately after the word inclusive appearing therein.
(ii) Section 6.01(i) of the Facility Agreement is amended to delete the amount $50,000,000 appearing therein and replace such amount with the amount $100,000,000.
(jj) Section 6.01 of the Facility Agreement is amended to delete each reference to 30 days appearing in clauses (c), (h), (i), (j) and (l) thereof and replace each such reference with a reference to thirty (30) days.
(kk) Section 7.02 of the Facility Agreement is amended to add the phrase or the Administrative Agent is not a Lender hereunder immediately after the phrase unless the context otherwise requires appearing in the first sentence thereof.
(ll) Section 7.10 of the Facility Agreement is amended to (i) add the phrase Lenders or their Affiliates identified in this Agreement as immediately before the phrase Joint Lead Arrangers appearing therein, (ii) delete the phrase listed on the cover page hereof appearing therein and (iii) delete the word except appearing immediately after the phrase the other Loan Documents, therein and replace such word with the phrase other than, in the case of Lenders those applicable to all Lenders as such and.
(mm) Section 8.03 of the Facility Agreement is amended to (i) add the phrase or the use of proceeds of the Revolving Advances or Letters of Credit immediately prior to the parenthetical (collectively, Losses) appearing in clause (c) thereof, (ii) delete the phrase the Indemnitees appearing in clause (c)(i) thereof and replace such phrase with such Indemnitee, (iii) delete the word Loan appearing in clause (d) thereof and replace such word with the phrase Revolving Advance, (iv) delete the word or appearing between clauses (a) and (b) of clause (d) thereof and (v) add the following as a new clause (c) to clause (d) thereof:
or (c) the assignment of any Eurodollar Rate Revolving Advance other than on the last day of an Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.23;
(nn) Section 8.05 of the Facility Agreement is amended to (i) add the phrase modify the definition of Required Lenders or to the beginning of clause (vii) thereof, (ii) delete the word and appearing immediately before clause (b) in the last sentence thereof and (iii) add the phrase and (c) the Maturity Date of this Agreement may be extended pursuant to the requirements contained in Section 2.25 of this Agreement to the end of the last sentence thereof.
(oo) Section 8.06 of the Facility Agreement is amended to (i) add the phrase and Obligations immediately following the phrase any of its rights appearing in clause (a) thereof, (ii) delete the word competitor appearing in clause (b)(F) thereof and replace such word with Competitor and (iii) delete the phrase an agent appearing in clause (c) thereof and replace such phrase with a non-fiduciary agent.
(pp) Section 8.10 of the Facility Agreement is amended to amend and restate the first paragraph thereof in its entirety to read as follows:
In accordance with normal procedures regarding proprietary information supplied by customers, each of the Lenders agrees to keep confidential information relating to the Borrower or any Subsidiary received pursuant to or in connection with this Agreement and the transactions contemplated hereby (the Information), provided that nothing herein shall be construed to prevent the Administrative Agent, any Issuing Lender or any Lender from disclosing such Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over the Administrative Agent, such Issuing Lender or such Lender or any of their respective Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) which has been publicly disclosed (other than as a result of a breach of this Section), (iv) which has been lawfully obtained on a nonconfidential basis by the Administrative Agent, any Issuing Lender or any of the Lenders from a Person other than the Borrower, any Subsidiary, the Administrative Agent, any Issuing Lender or any other Lender, (v) to any participant in or assignee of, or prospective participant in or assignee of, all or any part of the rights and obligations of the Administrative Agent, such Issuing Lender or such Lender under this Agreement or to any actual or prospective counterparty (or its advisors) to any securitization, swap or
derivative transaction relating to the Borrower, any Subsidiary, and the Obligations (provided that such participant, assignee or counterparty, or prospective participant, assignee or counterparty agrees to comply with the confidentiality requirements set forth in this Section 8.10), (vi) to the Administrative Agents, such Issuing Lenders or such Lenders independent auditors or outside legal counsel, (vii) to its Affiliates (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (viii) to any other party to this Agreement or (ix) to the extent required in connection with the exercise of any remedies, the enforcement of rights hereunder or any litigation relating to this Agreement to which the Administrative Agent, such Issuing Lender or such Lender is a party (and the Administrative Agent, such Issuing Lender or such Lender shall use its commercially reasonable efforts to give prior notice of any such disclosure under this clause (ix) to the extent permitted by applicable law; provided that the disclosing party shall have no liability to the Borrower as a result of any failure to provide such prior notice).
(qq) Section 8.14 of the Facility Agreement is amended to delete the word NONEXCLUSIVE appearing therein and to replace such word with EXCLUSIVE.
(rr) Section 8.16 of the Facility Agreement is amended and restated in its entirety to read as follows:
SECTION 8.16. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, the Borrower acknowledges and agrees, and acknowledges its Affiliates understanding, that: (i) the credit facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arms-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Joint Lead Arrangers and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of the Administrative Agent, each Joint Lead Arranger and each Lender is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or any Joint Lead Arranger or any Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, the Joint Lead Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has any obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) the Administrative Agent, the Joint Lead Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Joint Lead Arrangers and the Lenders with respect to any breach or alleged breach of any advisory, agency or fiduciary duty.
(ss) Annex 1 to Exhibit B to the Facility Agreement is amended to (i) change clause (vii) appearing in Section 1.2 thereof to a new clause (viii) of Section 1.2 thereof and (ii) add (vii) it is not a Competitor of the Borrower and as a new clause (vii) of Section 1.2 thereof.
2. Conditions of Effectiveness. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:
(a) The Administrative Agent shall have received:
(i) counterparts of this Amendment duly executed by the Borrower, each of the Lenders, each of the Issuing Lenders and the Administrative Agent;
(ii) a certificate, dated as of the date hereof, of the Secretary or Assistant Secretary of the Borrower (A) attaching a true and complete copy of the resolutions of its Board of Directors authorizing the execution and delivery of this Amendment by the Borrower and the performance of the Borrowers obligations hereunder and under the Facility Agreement as amended by this Amendment, and of all other documents evidencing other necessary action (in form and substance reasonably satisfactory to the Administrative Agent) taken by it to authorize this Amendment, the amended Facility Agreement and the transactions contemplated hereby and thereby, (B) attaching a true and complete copy of its certificate of incorporation and bylaws, (C) certifying that said certificate of incorporation and bylaws are true and complete copies thereof, are in full force and effect and have not been amended or modified, and (D) setting forth the incumbency of its officer or officers who may sign this Amendment, including therein a signature specimen of such officer or officers;
(iii) a certificate of good standing for the Borrower from the Secretary of State of the State of Delaware, dated a recent date prior to this Amendment;
(iv) a certificate, dated as of the date hereof, signed by a senior vice president, the chief financial officer or the treasurer of the Borrower certifying as of the date hereof (x) that after giving effect to this Amendment (A) no Default has occurred and is continuing, (B) all representations and warranties of the Borrower contained in Article IV of the Facility Agreement, as amended hereby, are true and correct as of the date hereof, (C) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries has occurred and is continuing which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents (as amended hereby), (D) there exists no Material Adverse Change and (E) there exists no injunction, writ, preliminary restraining order or other order of any nature issued by any Governmental Authority in any respect directly affecting the transactions provided for herein or by the Facility Agreement as amended hereby and no action or proceeding by or before any Governmental Authority has been commenced and is pending or, to the knowledge of the Borrower, threatened, seeking to prevent or delay the transactions contemplated by this Amendment and the Loan Documents (as amended hereby) or
challenging any other terms and provisions hereof or thereof or seeking any damages in connection therewith and (y) the current Ratings; and
(v) an opinion of counsel for the Borrower covering such matters relating to the transactions contemplated hereby and by the Facility Agreement (as amended hereby) as the Administrative Agent may reasonably request, dated as of the date hereof.
(b) The Administrative Agent shall have received, for the account of each Lender party hereto that delivers its executed signature page to this Amendment by no later than the date and time specified by the Administrative Agent, an upfront fee in an amount equal to the amount previously disclosed to the Lenders.
(c) The Borrower shall have paid, to the extent invoiced, all out-of-pocket expenses of the Administrative Agent (including reasonable attorneys fees and expenses) in connection with this Amendment and the other Loan Documents.
3. Representations and Warranties of the Borrower. The Borrower hereby represents and warrants that this Amendment and the Facility Agreement, as amended hereby, constitute valid and binding agreements of the Borrower, enforceable in accordance with their terms.
4. Reference to and Effect on the Facility Agreement.
(a) Upon the effectiveness hereof, each reference to the Facility Agreement in the Facility Agreement or any other Loan Document shall mean and be a reference to the Facility Agreement as amended hereby.
(b) Except as specifically amended above, the Facility Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Facility Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.
(d) This Amendment is a Loan Document.
5. Governing Law; Waiver of Trial by Jury. This Amendment shall be construed in accordance with and governed by the law of the State of New York. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
6. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
7. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Signatures delivered by facsimile or PDF shall have the same force and effect as manual signatures delivered in person.
[Signature Pages Follow]
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.
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FLUOR CORPORATION, as the Borrower | |
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By: |
/s/ James M. Lucas |
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Name: James M. Lucas | |
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Title: Senior Vice President, Tax and Treasurer |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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BNP PARIBAS, as Administrative Agent, an Issuing Lender and individually as a Lender | |
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By: |
/s/ Jamie Dillon |
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Name: Jamie Dillon | |
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Title: Managing Director | |
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By: |
/s/ Joseph Mack |
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Name: Joseph Mack | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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BANK OF AMERICA, N.A., as an Issuing Lender and individually as a Lender | |
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By: |
/s/ Arthur Ng |
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Name: Arthur Ng | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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CITIBANK, N.A., as a Lender | |
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By: |
/s/ Brian Reed |
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Name: Brian Reed | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as an Issuing Lender and individually as a Lender | |
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By: |
/s/ Jason Krogh |
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Name: Jason Krogh | |
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Title: Authorized Signatory |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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STANDARD CHARTERED BANK, as a Lender | |
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By: |
/s/ Steven Aloupis |
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Name: Steven Aloupis | |
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Title: Managing Director | |
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By: |
/s/ Hsing H. Huang |
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Name: Hsing H. Huang | |
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Title: Associate Director |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, as a Lender | |
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By: |
/s/ Blake Wright |
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Name: Blake Wright | |
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Title: Managing Director | |
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By: |
/s/ James Austin |
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Name: James Austin | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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THE BANK OF NOVA SCOTIA, as a Lender | |
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By: |
/s/ Diane Emanuel |
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Name: Diane Emanuel | |
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Title: Managing Director |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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LLOYDS BANK PLC, as a Lender | |
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By: |
/s/ Daven Popat |
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Name: Daven Popat | |
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Title: Senior Vice President P003 | |
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By: |
/s/ Karen Weich |
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Name: Karen Weich | |
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Title: Vice President W011 |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender | |
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By: |
/s/ Dhiren Desai |
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Name: Dhiren Desai | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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SUMITOMO MITSUI BANKING CORPORATION, as an Issuing Lender and individually as a Lender | |
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By: |
/s/ David W. Kee |
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Name: David W. Kee | |
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Title: Managing Director |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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ING BANK N.V., Dublin Branch, as a Lender | |
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By: |
/s/ Maurice Kenny |
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Name: Maurice Kenny | |
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Title: Director | |
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By: |
/s/ Aidan Neill |
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Name: Aidan Neill | |
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Title: Director |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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SANTANDER BANK, N.A., as a Lender | |
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By: |
/s/ William Maag |
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Name: William Maag | |
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Title: Senior Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, as a Lender | |
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By: |
/s/ Robert Grillo |
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Name: Robert Grillo | |
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Title: Director |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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BARCLAYS BANK PLC, as a Lender | |
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By: |
/s/ Clare Morgan |
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Name: Clare Morgan | |
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Title: Assistant Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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U.S. BANK NATIONAL ASSOCIATION, as a Lender | |
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By: |
/s/ Joe K. Dancy |
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Name: Joe K. Dancy | |
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Title: Vice President |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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INTESA SANPAOLO S.P.A., as a Lender | |
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By: |
/s/ Manuela Insana |
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Name: Manuela Insana | |
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Title: VP & Relationship Manager | |
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By: |
/s/ Gianluca Fiore |
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Name: Gianluca Fiore | |
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Title: Global Relationship Manager |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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WESTPAC BANKING CORPORATION, as a Lender | |
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By: |
/s/ Richard Yarnold |
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Name: Richard Yarnold | |
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Title: Senior Relationship Manager | |
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Corporate and Institutional Banking |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
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GOLDMAN SACHS BANK USA, as a Lender | |
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By: |
/s/ Mark Walton |
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Name: Mark Walton | |
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Title: Authorized Signatory |
Signature Page to Amendment No. 1
Fluor Corporation
Revolving Loan and Letter of Credit Facility Agreement dated as of November 9, 2012
Exhibit 10.25
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EXECUTION COPY
$1,700,000,000
REVOLVING LOAN AND LETTER OF CREDIT FACILITY AGREEMENT
among
FLUOR CORPORATION,
as Borrower,
BNP PARIBAS,
as Administrative Agent and an Issuing Lender,
BANK OF AMERICA, N.A.
as Syndication Agent,
CITIBANK, N.A. and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
as Co-Documentation Agents,
and
THE LENDERS PARTY HERETO
May 28, 2014
BNP PARIBAS SECURITIES CORP.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
CITIGROUP GLOBAL MARKETS, INC. and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
as Joint Bookrunners and Joint Lead Arrangers
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS |
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1 |
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SECTION 1.01. |
Definitions |
1 |
SECTION 1.02. |
Other Definitional Provisions |
14 |
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ARTICLE II REVOLVING ADVANCES AND LETTERS OF CREDIT |
14 | |
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SECTION 2.01. |
Revolving Advances |
14 |
SECTION 2.02. |
Making the Revolving Advances |
14 |
SECTION 2.03. |
Repayment of Revolving Advances |
16 |
SECTION 2.04. |
Optional Prepayments of Revolving Advances; Voluntary Termination or Reduction of Commitments |
16 |
SECTION 2.05. |
Interest on Revolving Advances |
17 |
SECTION 2.06. |
Conversion and Continuation of Revolving Advances |
19 |
SECTION 2.07. |
Issuance of Letters of Credit |
19 |
SECTION 2.08. |
Participations in Letters of Credit |
21 |
SECTION 2.09. |
Reimbursement in Respect of Letters of Credit |
22 |
SECTION 2.10. |
Disbursement Procedures for Letters of Credit; Reporting |
23 |
SECTION 2.11. |
Interest on LC Disbursements and Reimbursement of Other Amounts |
24 |
SECTION 2.12. |
Cash Collateralization |
24 |
SECTION 2.13. |
Obligations |
26 |
SECTION 2.14. |
General Provisions as to Payments |
26 |
SECTION 2.15. |
Computation of Interest and Fees |
27 |
SECTION 2.16. |
Taxes; Net Payments |
28 |
SECTION 2.17. |
Increased Costs |
30 |
SECTION 2.18. |
Illegality |
31 |
SECTION 2.19. |
Fees |
31 |
SECTION 2.20. |
Evidence of Debt |
32 |
SECTION 2.21. |
Use of Proceeds |
33 |
SECTION 2.22. |
Defaulting Lenders |
33 |
SECTION 2.23. |
Replacement of Lenders |
35 |
SECTION 2.24. |
Incremental Commitments |
35 |
SECTION 2.25. |
Extension of Maturity Date |
37 |
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ARTICLE III CONDITIONS PRECEDENT |
38 | |
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SECTION 3.01. |
Closing Date |
38 |
SECTION 3.02. |
Conditions to All Revolving Advances and Letters of Credit |
39 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES |
40 | |
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SECTION 4.01. |
Corporate Existence and Power |
40 |
SECTION 4.02. |
Corporate and Governmental Authorization; Contravention |
40 |
SECTION 4.03. |
Binding Effect |
41 |
SECTION 4.04. |
Financial Information |
41 |
SECTION 4.05. |
Litigation |
41 |
SECTION 4.06. |
Compliance with ERISA |
41 |
SECTION 4.07. |
Taxes |
41 |
SECTION 4.08. |
Material Subsidiaries |
42 |
SECTION 4.09. |
Not an Investment Company |
42 |
SECTION 4.10. |
Business of the Borrower; Use of Proceeds |
42 |
SECTION 4.11. |
No Misleading Statements |
42 |
SECTION 4.12. |
Environmental Matters |
42 |
SECTION 4.13. |
No Default |
43 |
SECTION 4.14. |
Sanctions |
43 |
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ARTICLE V COVENANTS |
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43 |
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SECTION 5.01. |
Information |
43 |
SECTION 5.02. |
Payment of Obligations |
45 |
SECTION 5.03. |
Maintenance of Property; Insurance |
45 |
SECTION 5.04. |
Conduct of Business and Maintenance of Existence |
46 |
SECTION 5.05. |
Compliance with Laws |
46 |
SECTION 5.06. |
Keeping of Records; Inspection of Property, Books and Records |
46 |
SECTION 5.07. |
Debt |
46 |
SECTION 5.08. |
Negative Pledge |
47 |
SECTION 5.09. |
Consolidations, Mergers and Sales of Assets |
47 |
SECTION 5.10. |
Payment of Taxes, Etc. |
48 |
SECTION 5.11. |
Pari-passu Obligations |
48 |
SECTION 5.12. |
Further Assurances |
48 |
SECTION 5.13. |
Use of Proceeds |
48 |
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ARTICLE VI DEFAULTS |
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48 |
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SECTION 6.01. |
Events of Default |
48 |
SECTION 6.02. |
Remedies |
50 |
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ARTICLE VII THE ADMINISTRATIVE AGENT |
51 | |
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SECTION 7.01. |
Appointment and Authorization |
51 |
SECTION 7.02. |
Rights as a Lender |
51 |
SECTION 7.03. |
Reliance by Administrative Agent |
51 |
SECTION 7.04. |
Delegation of Duties |
52 |
SECTION 7.05. |
Exculpatory Provisions |
52 |
SECTION 7.06. |
Indemnification |
53 |
SECTION 7.07. |
Non-Reliance on Administrative Agent and Other Lenders |
53 |
SECTION 7.08. |
Resignation of Administrative Agent |
53 |
SECTION 7.09. |
Agent With Respect to Cash Collateral Accounts |
54 |
SECTION 7.10. |
No Other Duties, etc. |
54 |
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ARTICLE VIII MISCELLANEOUS |
55 | |
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SECTION 8.01. |
Notices |
55 |
SECTION 8.02. |
No Waivers |
55 |
SECTION 8.03. |
Expenses; Taxes; Indemnification |
56 |
SECTION 8.04. |
Sharing of Set-Offs |
57 |
SECTION 8.05. |
Amendments and Waivers |
58 |
SECTION 8.06. |
Successors and Assigns |
58 |
SECTION 8.07. |
Collateral |
60 |
SECTION 8.08. |
Governing Law |
61 |
SECTION 8.09. |
Counterparts; Effectiveness |
61 |
SECTION 8.10. |
Confidentiality |
61 |
SECTION 8.11. |
Captions |
62 |
SECTION 8.12. |
Severability |
62 |
SECTION 8.13. |
Integration |
62 |
SECTION 8.14. |
Consent To Jurisdiction; Waiver Of Venue |
62 |
SECTION 8.15. |
Service of Process |
63 |
SECTION 8.16. |
No Advisory or Fiduciary Responsibility |
63 |
SECTION 8.17. |
WAIVER OF TRIAL BY JURY |
63 |
SECTION 8.18. |
Interest Rate Limitation |
64 |
SECTION 8.19. |
Judgment Currency |
64 |
SECTION 8.20. |
USA Patriot Act |
64 |
SECTION 8.21. |
Termination of Commitments under Existing Facilities |
65 |
LIST OF EXHIBITS AND SCHEDULES | |
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EXHIBIT A |
FORM OF OPINION OF COUNSEL FOR THE BORROWER |
EXHIBIT B |
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT |
EXHIBIT C |
FORM OF CERTIFICATE OF ASSISTANT SECRETARY TO THE BORROWER |
EXHIBIT D |
FORM OF NOTICE OF REVOLVING BORROWING |
EXHIBIT E |
FORM OF NOTICE OF CONVERSION/CONTINUATION |
EXHIBIT F |
FORM OF REVOLVING NOTE |
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SCHEDULE 1.01(a) |
COMMITMENTS AND APPLICABLE PERCENTAGES |
SCHEDULE 1.01(b) |
EXISTING LETTERS OF CREDIT |
SCHEDULE 5.08 |
EXISTING LIENS |
REVOLVING LOAN AND LETTER OF CREDIT FACILITY AGREEMENT
REVOLVING LOAN AND LETTER OF CREDIT FACILITY AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this Agreement) dated as of May 28, 2014 among FLUOR CORPORATION, a Delaware corporation (the Borrower), the LENDERS party hereto from time to time, and BNP PARIBAS, as Administrative Agent and an Issuing Lender.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
The following terms, as used herein, have the following meanings:
Additional Commitment Lender has the meaning specified in Section 2.25(d).
Administrative Agent means BNPP, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
Administrative Agents Account means the account of the Administrative Agent as the Administrative Agent shall specify in writing to the Credit Parties.
Affiliate means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. The term control (including the terms controlled by or under common control with) means the possession, direct or indirect, of the power to vote 50% or more of the securities having ordinary voting power for the election of directors of such Person or to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or by contract or otherwise.
Aggregate Commitments means the Commitments of all the Lenders, which as of the Closing Date is $1,700,000,000, as such amount may be increased or reduced from time to time, as the case may be, pursuant to the terms and conditions hereof.
Applicable Percentage means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lenders Commitment at such time. If the Commitment of each Lender and the obligation of the Issuing Lenders to issue Letters of Credit have been terminated pursuant to Section 6.02 or if the Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 1.01(a) or in the Assignment and Assumption Agreement or Incremental Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable.
Applicable Rate means, from time to time, the following rates per annum, based upon the Ratings as set forth below:
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Applicable Rate for Revolving | ||
Pricing |
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Ratings |
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Applicable Rate |
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Eurodollar Rate |
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Base Rate |
1 |
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A/A2 or better |
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7.0 basis points |
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87.5 basis points |
|
0 basis points |
2 |
|
A-/A3 |
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9.0 basis points |
|
100.0 basis points |
|
0 basis points |
3 |
|
BBB+/Baa1 |
|
12.0 basis points |
|
112.5 basis points |
|
12.5 basis points |
4 |
|
BBB/Baa2 or worse |
|
15.0 basis points |
|
125.0 basis points |
|
25.0 basis points |
Pricing |
|
Ratings |
|
Applicable Rate |
|
Applicable Rate |
1 |
|
A/A2 or better |
|
87.5 basis points |
|
50.0 basis points |
2 |
|
A-/A3 |
|
100.0 basis points |
|
55.0 basis points |
3 |
|
BBB+/Baa1 |
|
112.5 basis points |
|
62.5 basis points |
4 |
|
BBB/Baa2 or worse |
|
125.0 basis points |
|
70.0 basis points |
Ratings means the ratings of the non-credit-enhanced, senior unsecured long-term debt of the Borrower as set forth by S&P and Moodys; provided that if no such rating is available, Ratings shall mean the Borrowers issuer rating from Moodys and the Borrowers corporate credit rating from S&P; provided further that (a) if the respective Ratings issued by the foregoing rating agencies differ by one level, then the Pricing Level for the higher of such Ratings shall apply (with the Rating for Pricing Level 1 being the highest and the Rating for Pricing Level 4 being the lowest); (b) if there is a split in Ratings of more than one level, then the Pricing Level that is one level higher than the Pricing Level of the lower Rating shall apply; (c) if the Borrower has only one Rating, the Pricing Level for that Rating shall apply; and (d) if the Borrower does not have any Rating, Pricing Level 4 shall apply.
Initially, the Applicable Rate shall be determined based upon the Ratings specified in the certificate delivered pursuant to Section 3.01(a)(iv). Thereafter, each change in the Applicable Rate resulting from a publicly announced change in the Ratings shall be effective, in the case of an upgrade or downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.
Application means a letter of credit application in the standard form thereof (or such other form as may be reasonably acceptable to the applicable Issuing Lender) required by the applicable Issuing Lender and acceptable to the Borrower for the issuance of letters of credit generally.
Approved Fund means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Assignment and Assumption Agreement means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 8.06(b)), and accepted by the Administrative Agent, substantially in the form of Exhibit B attached hereto or any other form approved by the Administrative Agent.
Availability Period means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.04(c), and (c) the date of termination of the commitment of each Lender to make Revolving Advances and of the obligation of the Issuing Lenders to issue Letters of Credit pursuant to Section 6.02.
Base Rate means, for any day, a rate per annum equal to the highest of:
(a) the prime commercial lending rate of interest established by BNPP in New York, New York from time to time as its prime rate;
(b) the sum of one-half of one-percent (1/2%) plus the Federal Funds Rate for such day; and
(c) the Eurodollar Rate for an Interest Period of one month beginning on such day (or if such day is not a Business Day, on the immediately preceding Business Day) plus one- percent (1%) per annum.
The prime rate means the rate of interest per annum publicly announced from time to time by BNPP as its prime rate in effect at its principal office in New York City. Any change in such prime rate announced by BNPP shall take effect at the opening of business on the day specified in the public announcement of such change.
Base Rate Revolving Advance means a Revolving Advance that bears interest as provided in Section 2.05(a).
BNPP means BNP Paribas and its successors.
Borrower has the meaning specified in the preamble to this Agreement.
Business Day means any day except a Saturday, Sunday or other day on which commercial banks in the States of California, Texas or New York are authorized or required by law, regulation or executive order to close; provided, however, that when used in connection with a Eurodollar Rate Revolving Advance, the term Business Day does not include any day on which banks are not open for dealings in Dollar deposits in the London interbank market.
Change in Law has the meaning specified in Section 2.17(a).
Closing Date means May 28, 2014.
Code means the Internal Revenue Code of 1986, as amended, or any successor statute.
Co-Documentation Agents means each of Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Co-Documentation Agents, in their capacities as co-documentation agents, and their respective successors in such capacities.
Commitment means, at any time, for any Lender, the amounts set forth opposite such Lenders name on Schedule 1.01(a) hereto under the heading Aggregate Commitment and Amount of Aggregate Commitment Attributable to Revolving Facility Sublimit or in the Assignment and Assumption Agreement or Incremental Joinder Agreement pursuant to which such Lender becomes a party hereto, as such amount may be adjusted from time to time pursuant to the terms and conditions hereof.
Commitment Fee has the meaning specified in Section 2.19(a).
Competitor means any Person that is engaged directly, as a significant part of its activities, in the business of delivering engineering, procurement, construction, maintenance, and project management to governments and clients in diverse industries.
Computation Date has the meaning specified in Section 2.12(b).
Consolidated Debt means, at any date, the total Debt of the Borrower and its Consolidated Subsidiaries, determined on a consolidated basis as of such date; provided, that Consolidated Debt of the Borrower and its Consolidated Subsidiaries shall exclude Debt of variable interest entities which is identified (as required by and referenced in the Accounting Standards Codification 810, Consolidation, as may be modified or supplemented) in the balance sheet of the Borrower and its Consolidated Subsidiaries as debt related to a variable interest entity.
Consolidated Subsidiary means any Subsidiary or other entity the accounts of which, at any date, would be, in accordance with GAAP, consolidated with those of the Borrower in its consolidated financial statements as of such date.
Consolidated Tangible Net Worth means, at any date, the consolidated stockholders equity of the Borrower and its Consolidated Subsidiaries less their consolidated Intangible Assets, all determined as of such date in accordance with GAAP. For purposes of this definition Intangible Assets means the amount (to the extent reflected in determining such consolidated stockholders equity) of (i) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by the Borrower or a Consolidated Subsidiary, and (ii) all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, organization or developmental expenses and other intangible items.
Controlled Group means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code.
Credit Party means each of the Administrative Agent, each Issuing Lender, each Lender and their respective successors and assigns, and Credit Parties means all such Persons, collectively.
Debt of any Person means, at any date, without duplication, (i) all indebtedness of such Person for borrowed money which would be classified as a liability of such Person in accordance with GAAP on such Persons balance sheets, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (except for notes relating to self insurance programs of such Person and/or its Subsidiaries which are not classified as current liabilities of such Person or any of its Subsidiaries) which would be classified as a liability of such Person in accordance with GAAP on such Persons balance sheets, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business and foreign exchange
transactions, (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities or property, which obligations or any portion thereof may, in accordance with their terms, become due on or before the Maturity Date, (vi) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts actually paid under a letter of credit, a bankers acceptance or similar instrument, (vii) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, (viii) all Debt of others Debt Guaranteed by such Person, and (ix) all payment obligations of such Person under any interest rate protection agreement (including, without limitation, any interest rate swaps, caps, floors, collars and similar agreements). Notwithstanding anything to the contrary contained herein, Debt of the Borrower and its Consolidated Subsidiaries shall exclude Debt of variable interest entities which is identified (as required by and referenced in the Accounting Standards Codification 810, Consolidation, as may be modified or supplemented) in the balance sheet of the Borrower and its Consolidated Subsidiaries as debt related to a variable interest entity.
Debt Guarantee by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term Debt Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term Debt Guarantee used as a verb has a corresponding meaning.
Default means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
Defaulting Lender means any Lender, as reasonably determined by the Administrative Agent, that has (a) failed to fund any portion of its Revolving Advances or participations in any Letter of Credit within three Business Days of the date required to be funded by it hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lenders determination that one or more conditions precedent to funding as described in Section 3.02 (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) notified the Borrower, the Administrative Agent, the applicable Issuing Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lenders obligation to fund a Revolving Advance hereunder and states that such position is based on such Lenders determination that a condition precedent to funding as described in Section 3.02 (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) failed, within three (3) Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Revolving Advances and/or to fund participations in the then outstanding Letters of Credit, (d) otherwise failed to pay over to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22) upon delivery of written notice of such determination to the Borrower, each Issuing Lender and each Lender.
Dollar Equivalent means, at any time for the determination thereof, the amount of Dollars which could be purchased with the amount of the relevant Foreign Currency by the Administrative Agent or the applicable Issuing Lender, as the case may be, (in accordance with normal banking procedures) at the spot exchange rate therefor at about 2:00 p.m. (New York City time) on such date of determination.
Dollars or $ refers to lawful money of the United States of America.
Environmental Laws means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment, or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment, including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof.
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
Escalating LC means each Letter of Credit that, by its terms or the terms of the Application related thereto, provides for one or more increases in the stated amount thereof.
euro means the single currency of participating member states of the European Union.
Eurocurrency Liabilities has the meaning specified in Regulation D of the FRB, as in effect from time to time.
Eurodollar Rate means, for any Interest Rate Determination Date with respect to any Eurodollar Rate Revolving Advances for any Interest Period therefor, an interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the rate per annum obtained by dividing (i) (a) the rate per annum determined by the Administrative Agent administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate as reasonably determined by the Administrative Agent) for deposits (for delivery on the first day of such period) with a term equivalent
to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date (as set forth by Bloomberg Information Service or any successor thereto or any other service selected by Administrative Agent which has been nominated by ICE Benchmark Administration Limited as an authorized information vendor for the purpose of displaying such rates) (in each case the Eurodollar Screen Rate); provided that, if the Eurodollar Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement or (b) in the event the rate referenced in the preceding clause (a) is not available at such time for such Interest Period (the Impacted Interest Period), then the Eurodollar Rate for such Interest Period shall be the Interpolated Rate; provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement, by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. It is understood and agreed that all of the terms and conditions of this definition of Eurodollar Rate shall be subject to Section 2.05(e).
Eurodollar Rate Revolving Advance has the meaning specified in Section 2.05(b).
Eurodollar Rate Reserve Percentage means, with respect to any Interest Period for any Eurodollar Rate Revolving Advance, the reserve percentage applicable on the Interest Rate Determination Date under regulations issued from time to time by the FRB (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.
Eurodollar Screen Rate has the meaning assigned to such term in the definition of Eurodollar Rate.
Event of Default has the meaning specified in Section 6.01.
Excess has the meaning specified in Section 2.12(b).
Exchange Equivalent means, at any time for the determination thereof, with respect to any amount (the Original Amount) of Dollars, the amount of any relevant Foreign Currency which would be required to buy the Original Amount of Dollars by the Administrative Agent (in accordance with normal banking procedures) at the spot exchange rate therefor at about 2:00 p.m. (New York City time) on such date of determination.
Existing Facility means the credit facility evidenced by the U.S.$1,200,000,000 Revolving Performance Letter of Credit Facility Agreement, dated as of December 14, 2010, among the Borrower, the lenders party thereto and BNP Paribas, as administrative agent, as amended.
Existing Letters of Credit means the letters of credit described by letter of credit number, face amount, name of beneficiary and date of expiry on Schedule 1.01(b) attached hereto.
Existing Maturity Date has the meaning specified in Section 2.25(a).
Expiration Date has the meaning specified in Section 2.07(b).
Extending Lender has the meaning specified in Section 2.25(b).
Extension Date has the meaning specified in Section 2.25(a).
FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
Federal Funds Rate means, for any day (the accrual date), the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on the accrual date, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the accrual date is not a Business Day, the Federal Funds Rate for the accrual date shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for the accrual date shall be the average rate quoted to BNPP on the accrual date (or next preceding Business Day) on such transactions as determined by the Administrative Agent.
Fee Letters means, collectively (i) that certain letter agreement among BNP Paribas, BNP Paribas Securities Corp. and the Borrower dated as of May 2, 2014, (ii) that certain letter agreement among BNP Paribas, BNP Paribas Securities Corp., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and the Borrower dated as of May 2, 2014, (iii) that certain letter agreement among Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and the Borrower dated as of May 2, 2014, (iv) that certain letter agreement between Citigroup Global Markets, Inc. and the Borrower dated as of May 2, 2014 and (v) that certain letter agreement between The Bank of Tokyo-Mitsubishi UFJ, Ltd. and the Borrower dated as of May 2, 2014, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.
Financial Letter of Credit means a financial standby letter of credit issued for the account of the Borrower, or for the account of the Borrower on behalf of, or in support of obligations of, any of the Borrowers Subsidiaries, or which otherwise backs bank guarantees issued by any Issuing Lender or its correspondent bank to support such financial letters of credit, in each case which must qualify as a financial guarantee type letter of credit under applicable laws and regulations.
Foreign Currency means Pounds Sterling, euro, Japanese Yen, Australian Dollar, New Zealand Dollar, Mexican Peso, Canadian Dollar, Singapore Dollar and/or any other currency acceptable to the applicable Issuing Lender, as the context requires.
Foreign Lender has the meaning specified in Section 2.16(b). FRB means the Board of Governors of the Federal Reserve System of the United States.
Fund means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
GAAP means generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.04(a) as of and for the fiscal year ended December 31, 2013.
Governmental Authority means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator (including any central bank or any
supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).
Impacted Interest Period has the meaning assigned to such term in the definition of Eurodollar Rate.
Incremental Commitment Increase has the meaning specified in Section 2.24.
Incremental Commitment Increase Effective Date has the meaning specified in Section 2.24.
Incremental Increase Lender means, at any time, any bank or other financial institution that agrees to provide any portion of any Incremental Commitment Increase in accordance with Section 2.24.
Incremental Joinder Agreement has the meaning specified in Section 2.24.
Industry Standards has the meaning specified in Section 5.03(b).
Information has the meaning specified in Section 8.10.
Interest Period has the meaning specified in Section 2.05(b).
Interest Rate Determination Date means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.
Interest Type refers to the distinction between Revolving Advances bearing interest at the Base Rate and Revolving Advances bearing interest at the Eurodollar Rate.
Interpolated Rate means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Eurodollar Screen Rate for the longest period (for which the Eurodollar Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the Eurodollar Screen Rate for the shortest period (for which the Eurodollar Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.
ISP means, with respect to any Letter of Credit, the International Standby Practices 1998 published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).
Issuing Lender means BNPP, Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and at the request of the Borrower, any other Lender that agrees to be an Issuing Lender hereunder, each in its capacity as an issuer of Letters of Credit hereunder, and its successors, and the term Issuing Lenders means all such Persons, collectively.
Joint Lead Arrangers means each of BNP Paribas Securities Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets, Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., in their capacities as joint bookrunners and joint lead arrangers, and their respective successors in such capacities.
Joint Venture means any joint venture, partnership or other minority-owned entity (other than a Subsidiary) in which the Borrower or any of its Subsidiaries or other Affiliates owns an interest.
LC Disbursement means a payment made by any Issuing Lender pursuant to a Letter of Credit.
LC Exposure means at any time, the sum of (i) the aggregate undrawn amount of all Letters of Credit at such time (provided that, with respect to any Escalating LC, such aggregate undrawn amount shall equal the maximum amount (after giving effect to all possible increases) available to be drawn under such Escalating LC) plus (ii) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be outstanding in the amount so remaining available to be drawn.
Lender means each Person listed on Schedule 1.01(a) and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption Agreement or Incremental Joinder Agreement (other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption Agreement), including any Incremental Increase Lender, and their successors and assigns.
Lender Notice Date has the meaning specified in Section 2.25(b).
Lending Office means, as to each Lender, its office located at its address set forth on the signature pages hereof, or such office as may be set forth as a Lending Office of a Lender in any Assignment and Assumption Agreement accepted by the Administrative Agent pursuant to Section 8.06(b), or such other office as such Lender may hereafter designate as its Lending Office by notice to the Borrower and the Administrative Agent.
Letter of Credit means (a) any Financial Letter of Credit or any Performance Letter of Credit, in each case denominated in Dollars or in a Foreign Currency issued pursuant to this Agreement, which letter of credit is in a form reasonably acceptable to the applicable Issuing Lender, and (b) any Existing Letter of Credit, in each case as such letter of credit may be amended, modified, extended, renewed or replaced from time to time, in each case in accordance with this Agreement.
Letter of Credit Fee has the meaning specified in Section 2.19(b).
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
Loan Documents means this Agreement, each Application, each Letter of Credit, each Revolving Note, the Fee Letters, any security or collateral documents to be delivered thereunder and any other documents or certificates to be delivered thereunder or in connection therewith and all amendments thereto and substitutions and replacements therefor and modifications thereof.
Material Adverse Change means any material and adverse change in the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its Consolidated Subsidiaries (taken as a whole) since December 31, 2013 which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents at any time up to and including the Maturity Date.
Material Plan has the meaning specified in Section 6.01(i).
Material Subsidiary means at any time a Subsidiary which as of such time meets the definition of a significant subsidiary contained as of the date hereof in Regulation S-X of the SEC.
Maturity Date means May 28, 2019, subject to extension (in the case of each Lender consenting thereto) as provided in Section 2.25; provided, however, that if such date is not a Business Day, the Maturity Date shall be the immediately preceding Business Day.
Maximum Rate has the meaning specified in Section 8.18.
Moodys means Moodys Investors Service, Inc. and any successor thereto.
Non-Defaulting Lender means, at any time, each Lender that is not a Defaulting Lender at such time.
Non-Extending Lender has the meaning specified in Section 2.25(b).
Notice of Conversion/Continuation means a notice substantially in the form of Exhibit E attached hereto.
Notice of Revolving Borrowing means a notice substantially in the form of Exhibit D attached hereto.
Obligations means the collective reference to all obligations and liabilities of the Borrower to the Credit Parties (including, without limitation, the reimbursement obligations payable hereunder and all other obligations and liabilities of the Borrower in respect of any Letter of Credit and any Revolving Advance and interest thereon as provided for herein, and interest accruing at the then applicable rate provided in this Agreement after the maturity of such obligations and liabilities and interest accruing at the then applicable rate provided in this Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent, the Joint Lead Arrangers, the Issuing Lenders or the Lenders that are required to be paid by the Borrower pursuant to the terms of this Agreement or any other Loan Document).
Participant Register has the meaning specified in Section 8.06(c).
Patriot Act has the meaning specified in Section 8.20.
PBGC means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
Performance Letter of Credit means a standby letter of credit issued for the account of the Borrower, or for the account of the Borrower on behalf of, or in support of obligations of, any of the Related Entities, to support, or to back bank guarantees issued by other banks to support, the Borrowers and the Related Entities performance under specific project engineering, procurement, construction, maintenance and related activities and/or contracts.
Permitted Cover means the provision of cover by arranging for the issuance of one or more standby letters of credit issued by a bank (excluding Letters of Credit issued pursuant to this Agreement), and on terms and conditions, in each case satisfactory to the Administrative Agent and the Issuing Lenders.
Permitted Investments means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing no more than one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing no more than one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moodys; and (iii) certificates of deposit or bankers acceptances maturing no more than one year after such date or overnight bank deposits, in each case issued, accepted by or of any Lender, or any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia, which amounts may be withdrawn at any time without penalty, and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moodys that (a) is at least adequately capitalized (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $10,000,000,000.
Person means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
Plan means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (i) maintained by the Borrower or any Subsidiary for employees of the Borrower or any Subsidiary or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Borrower or any Subsidiary is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
Ratings has the meaning specified in the definition of Applicable Rate.
Register has the meaning specified in Section 8.06(h).
Regulation U means Regulation U of the FRB, as in effect from time to time.
Related Entity means any Subsidiary, Affiliate or Joint Venture of the Borrower.
Related Parties means, with respect to any Person, such Persons Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Persons Affiliates.
Required Lenders means, at any time, Lenders having more than 50% of the Aggregate Commitments or, if the Commitment of each Lender and the obligation of the Issuing Lenders to issue Letters of Credit hereunder have been terminated pursuant to Section 6.02, Lenders holding in the aggregate more than 50% of the aggregate outstanding amount of all Revolving Advances and all LC Exposure (with the aggregate amount of each Lenders risk participation in LC Exposure being deemed held by such Lender for purposes of this definition).
Revolving Advance has the meaning specified in Section 2.01(a).
Revolving Borrowing means a borrowing consisting of simultaneous Revolving Advances of the same Interest Type and, in the case of Eurodollar Rate Revolving Advances, having the same Interest Period, made by the Lenders pursuant to Section 2.01.
Revolving Facility Sublimit means $750,000,000.
Revolving Note means a promissory note made by the Borrower in favor of a Lender evidencing Revolving Advances made by such Lender, substantially in the form of Exhibit F attached hereto.
Sanctions has the meaning specified in Section 4.14.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business.
SEC means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary or Subsidiaries of the Borrower.
Syndication Agent means Bank of America, N.A., as Syndication Agent, in its capacity as syndication agent, and its successors in such capacity.
Taxes has the meaning specified in Section 2.16(a).
UCC means the Uniform Commercial Code as in effect from time to time under the laws of the State of New York.
Unfunded Vested Liabilities means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all vested nonforfeitable benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.
Unused Commitment means, with respect to any Lender at any time, (a) such Lenders Commitment at such time, minus (b) the sum of (i) the aggregate principal amount of all Revolving Advances of such Lender outstanding at such time, plus (ii) such Lenders LC Exposure outstanding at such time.
Utilization means, on any date, the sum of (i) the aggregate principal amount of all Revolving Advances outstanding at such time, plus (ii) the total LC Exposure outstanding at such time.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the meanings given such terms herein when used in the Loan Documents or any certificate, opinion or other document made or delivered pursuant hereto or thereto, unless otherwise defined therein.
(b) As used in the Loan Documents and in any certificate, opinion or other document made or delivered pursuant hereto or thereto, accounting terms not defined in Section 1.01, and accounting terms partly defined in Section 1.01, to the extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words hereof, herein, hereto and hereunder and similar words when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, schedule and exhibit references contained herein shall refer to Sections hereof or schedules or exhibits hereto unless otherwise expressly provided herein.
(d) The word or shall not be exclusive; may not is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the singular number include the plural, and words in the plural include the singular.
(f) Unless specifically provided in a Loan Document to the contrary, references to time shall refer to New York City time.
ARTICLE II
REVOLVING ADVANCES AND LETTERS OF CREDIT
SECTION 2.01. Revolving Advances.
(a) Subject to the terms and conditions set forth herein, each Lender severally agrees to make advances in Dollars (each a Revolving Advance) to the Borrower from time to time on any Business Day during the Availability Period, in an amount for each such Revolving Advance not to exceed such Lenders Unused Commitment in respect of the Revolving Facility Sublimit on such Business Day; provided that at no time shall (i) the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders plus the aggregate LC Exposure (or the Dollar Equivalent thereof (calculated as of the date of the requested Revolving Advance and any other applicable date of determination)) of all of the Lenders exceed the Aggregate Commitments or (ii) the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders plus the aggregate LC Exposure (or the Dollar Equivalent thereof (calculated as of the date of the requested Revolving Advance and any other applicable date of determination)) in respect of Financial Letters of Credit exceed the Revolving Facility Sublimit.
(b) Each Revolving Borrowing shall be in an aggregate amount of $3,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Advances made by the Lenders ratably according to their respective Commitments in respect of the Revolving Facility Sublimit. Within the foregoing limits, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.04 and reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Advances.
(a) Each Revolving Advance. Each Revolving Borrowing shall be made in Dollars on notice received by the Administrative Agent from the Borrower (pursuant to a Notice of Revolving
Borrowing) not later than 12:00 noon (New York City time): (i) on the Business Day prior to the date of such Revolving Borrowing if such Revolving Borrowing consists of Base Rate Revolving Advances, and (ii) on the third Business Day prior to the date of such Revolving Borrowing if such Revolving Borrowing consists of Eurodollar Rate Revolving Advances. Each such Notice of Revolving Borrowing shall be irrevocable upon receipt by the Administrative Agent.
(b) Revolving Advances by Lenders. If the Administrative Agent receives a Notice of Revolving Borrowing, the Administrative Agent shall promptly (and in any event not later than 2:00 p.m. (New York City time) on the Business Day prior to the date of such Revolving Borrowing or, if such Revolving Borrowing consists of Eurodollar Rate Revolving Advances, the third Business Day prior to the date of such Revolving Borrowing) give each Lender notice of such Notice of Revolving Borrowing. Each Lender shall, before 1:30 p.m. (New York City time) on the date of such Revolving Borrowing in the case of any Revolving Borrowing to be made on such date, make available for the account of its Lending Office to the Administrative Agent such Lenders ratable portion of such Revolving Borrowing by depositing immediately available funds in Dollars in the Administrative Agents Account. Unless the Administrative Agent shall have received written notice from a Lender prior to the date of any Revolving Borrowing hereunder that such Lender will not make available to the Administrative Agent such Lenders ratable portion of such Revolving Borrowing, the Administrative Agent may assume that such Lender has made such ratable portion available to the Administrative Agent on the date of such Revolving Borrowing in accordance with the terms hereof and the Administrative Agent may, in reliance upon such assumption, but shall not be required to, make available to or for the account of the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent and the Administrative Agent makes such ratable portion available to the Borrower, such Lender and the Borrower, without prejudice to any rights or remedies that the Borrower may have against such Lender, severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to or for the account of the Borrower until the date such amount is repaid to the Administrative Agent, at (A) in the case of the Borrower, the interest rate applicable at the time to the Revolving Advances comprising such Revolving Borrowing, and (B) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. If such Lender shall pay to the Administrative Agent such amount, such amount so paid shall constitute such Lenders Revolving Advance as part of the relevant Revolving Borrowing for purposes of this Agreement and, to the extent that the Borrower previously paid such amount to the Administrative Agent, the Administrative Agent will refund to the Borrower such amount so paid, but without interest.
(c) Disbursement of Revolving Advances. Upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make funds for any Revolving Borrowing available to the Borrower by crediting such amount to the account designated by the Borrower in the applicable Notice of Revolving Borrowing, subject to the Administrative Agents receipt of funds from the Lenders, and provided that the Administrative Agent shall first make a portion of such funds equal to any outstanding LC Disbursement under any Letter of Credit and any interest accrued and unpaid thereon to and as of such date, available to the applicable Issuing Lender for reimbursement of such LC Disbursement and payment of such interest.
SECTION 2.03. Repayment of Revolving Advances. The Borrower shall repay to each Lender (in accordance with the provisions of Section 2.14(a)) on the Maturity Date the aggregate principal amount of all Revolving Advances owing to such Lender outstanding on the Maturity Date.
SECTION 2.04. Optional Prepayments of Revolving Advances; Voluntary Termination or Reduction of Commitments.
(a) Optional Prepayments. The Borrower may, upon prior notice to the Administrative Agent (which shall be given not later than 12:00 noon (New York City time) on the day of prepayment in the case of prepayment of Base Rate Revolving Advances and three Business Days in advance in the case of prepayment of Eurodollar Rate Revolving Advances) stating the proposed date and aggregate principal amount of the prepayment and the Interest Type of Revolving Advances to be prepaid (and if such notice is given the Borrower shall), prepay in whole or in part, without premium or penalty, the outstanding principal of Revolving Advances of such Interest Type, together with, in the case of any prepayment of Eurodollar Rate Revolving Advances, interest thereon to the date of such prepayment on the principal amounts prepaid (plus, in the case of prepayment of Eurodollar Rate Revolving Advances prior to the end of the applicable Interest Period, any additional amount for which the Borrower shall be obligated pursuant to Section 8.03(d)); provided, however, that each partial prepayment of Revolving Advances shall be in an aggregate principal amount of not less than $3,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Application of Prepayments. Prepayments of the Revolving Advances made pursuant to this Section 2.04 shall be first applied to prepay LC Disbursements then outstanding until such LC Disbursements are paid in full, and second applied to prepay Revolving Advances then outstanding comprising part of the same Revolving Borrowings until such Revolving Advances are paid in full. The amount remaining (if any) after the prepayment in full of the Revolving Advances then outstanding shall be applied as set forth in Section 2.14(d).
(c) Voluntary Termination or Reduction of Commitments. The Borrower may, upon notice to the Administrative Agent, irrevocably terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 1:00 p.m. (New York City time) five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, (x) the sum of the aggregate LC Exposure (or the Dollar Equivalent thereof) plus the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders would exceed the Aggregate Commitments or (y) the sum of the aggregate LC Exposure (or the Dollar Equivalent thereof) in respect of Financial Letters of Credit plus the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders would exceed the Revolving Facility Sublimit. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage. All fees accrued in respect of the Aggregate Commitments until the effective date of any termination or reduction of the Aggregate Commitments shall be paid on the effective date of such termination or reduction, as applicable.
SECTION 2.05. Interest on Revolving Advances. The Borrower shall pay interest on the unpaid principal amount of each Revolving Advance from the date of such Revolving Advance until such principal is paid in full at the applicable rate set forth below.
(a) Interest on Base Rate Revolving Advances. Except as otherwise provided in this Agreement, the Borrower shall pay interest on the outstanding principal amount of each Base Rate Revolving Advance, from the date of such Base Rate Revolving Advance until such principal amount is paid in full, payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing on the first such date to occur after the Closing Date, and on the Maturity Date, at a fluctuating interest rate per annum equal, subject to Section 2.05(d), to the Base Rate plus the Applicable Rate in effect from time to time.
(b) Interest Periods for Eurodollar Rate Revolving Advances. The Borrower may, pursuant to Section 2.05(c), elect to have the interest on the principal amount of all or any portion of any Revolving Advances made or to be made to the Borrower under Section 2.01, in each case ratably according to the respective outstanding principal amounts of Revolving Advances owing to each Lender (each such principal amount owing to a Lender as to which such election has been made being a Eurodollar Rate Revolving Advance owing to such Lender), determined and payable for a specified period (an Interest Period for such Eurodollar Rate Revolving Advance) in accordance with Section 2.05(c), provided, however, that the Borrower may not (i) make any such election with respect to any LC Disbursements, or (ii) have more than ten Eurodollar Rate Revolving Advances owing to any Lender outstanding at any one time. Each Interest Period shall be one, two, three, six or twelve months, or such other periods as may be agreed by all Lenders, at the Borrowers election pursuant to Section 2.05(c); provided, however, that:
(i) the first day of an Interest Period for any Eurodollar Rate Revolving Advance shall be either the last day of any then current Interest Period for such Revolving Advance or, if there shall be no then current Interest Period for such Revolving Advance, any Business Day;
(ii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following month, the last day of such Interest Period shall occur on the immediately preceding Business Day;
(iii) whenever the first day of any Interest Period occurs on a day of the month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months of such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month; and
(iv) no Interest Period shall extend beyond the Maturity Date.
(c) Interest on Eurodollar Rate Revolving Advances. The Borrower may from time to time, on the condition that no Default or Event of Default has occurred and is continuing, and subject to the provisions of Sections 2.05(b) and 2.05(e), elect to pay interest on all or any portion of any Revolving Advances during any Interest Period therefor at a rate per annum equal to the sum of the Eurodollar Rate for such Interest Period for such Revolving Advances plus the Applicable Rate in effect from time to time, by notice, specifying the amount of the Revolving Advances as to which such election is made (which amount shall aggregate at least $3,000,000 or any multiple of $1,000,000 in excess thereof) and the first day and duration of such Interest Period, received by the Administrative Agent before 12:00 noon (New York City time) three Business Days prior to the first day of such Interest Period. If the Borrower
has made such election for Eurodollar Rate Revolving Advances for any Interest Period, the Borrower shall pay interest on the unpaid principal amount of such Eurodollar Rate Revolving Advances during such Interest Period, payable in arrears on the last day of such Interest Period and, in the case of any Interest Period which is longer than three months, on each three-month anniversary of the first day of such Interest Period, in each case at a rate equal, subject to Section 2.05(d), to the sum of the Eurodollar Rate for such Interest Period for such Eurodollar Rate Revolving Advances plus the Applicable Rate in effect from time to time during such Interest Period. On the last day of each Interest Period for any Eurodollar Rate Revolving Advance, the unpaid principal balance thereof shall automatically become and bear interest as a Base Rate Revolving Advance, except to the extent that the Borrower has elected to pay interest on all or any portion of such amount for a new Interest Period commencing on such day in accordance with this Section 2.05(c). Each notice by the Borrower under this Section 2.05(c) shall be irrevocable upon receipt by the Administrative Agent.
(d) Default Interest. Upon the occurrence and during the continuance of an Event of Default, (i) interest shall accrue, after as well as before judgment, on any Revolving Advance then outstanding at a rate that is 2% per annum in excess of the interest rate otherwise payable under this Agreement with respect to such Revolving Advance (which, for the avoidance of doubt, shall include the Applicable Rate); provided that, in the case of any Eurodollar Rate Revolving Advance, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Revolving Advance shall thereupon become a Base Rate Revolving Advance and shall thereafter bear interest, after as well as before judgment, at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Base Rate Revolving Advances, (ii) Letter of Credit Fees shall accrue, after as well as before judgment, at a rate which is 2% per annum in excess of the rate otherwise payable under this Agreement, (iii) reimbursement obligations in respect of LC Disbursements payable under Section 2.09(a) shall accrue, after as well as before judgment, at a rate which is 2% per annum in excess of the Letter of Credit Fee plus the Base Rate in effect from time to time and (iv) interest shall accrue, to the fullest extent permitted by law, after as well as before judgment, and except as otherwise provided in Section 2.11 or clauses (i), (ii) or (iii) above, on any overdue principal, interest or other amounts payable hereunder (including the Commitment Fee) at a rate that is 2% per annum in excess of the interest rate otherwise payable under this Agreement with respect to Base Rate Revolving Advances. Such interest and other amounts shall be payable upon demand. Payment or acceptance of the increased rates of interest provided for in this Section 2.05(d) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent, any Lender or any other Credit Party.
(e) Suspension of Eurodollar Rate Revolving Advances.
(i) Illegality. Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to perform its obligations hereunder to make Eurodollar Rate Revolving Advances or to continue to fund or maintain Eurodollar Rate Revolving Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each Eurodollar Rate Revolving Advance will automatically, upon such demand, convert into a Base Rate Revolving Advance, and (ii) the obligation of the Lenders to make, or to convert Revolving Advances into, Eurodollar Rate Revolving Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist.
(ii) Other Circumstances. If, with respect to any Eurodollar Rate Revolving Advances, (A) the Administrative Agent shall determine in good faith (which determination shall be
conclusive) that the Eurodollar Rate cannot be determined in accordance with the definition thereof, or (B) the Required Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Revolving Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Revolving Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Revolving Advance will automatically, on the last day of the then existing Interest Period therefor, convert into a Base Rate Revolving Advance and (ii) the obligation of the Lenders to make, or to convert Revolving Advances into, Eurodollar Rate Revolving Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.
(f) Suspension on Event of Default. Upon the occurrence and during the continuance of any Event of Default, (i) each Eurodollar Rate Revolving Advance will automatically, on the last day of the then existing Interest Period therefor, convert into a Base Rate Revolving Advance and (ii) the obligation of the Lenders to make, or to convert Revolving Advances into, Eurodollar Rate Revolving Advances shall be suspended.
SECTION 2.06. Conversion and Continuation of Revolving Advances.
(a) Optional. So long as no Default or Event of Default shall have occurred and then be continuing, the Borrower shall have the option: (i) to convert at any time all or any part of any Revolving Advance equal to $3,000,000 and integral multiples of $1,000,000 in excess of that amount from one Interest Type comprising the same Revolving Borrowing into Revolving Advances of the other Interest Type; provided, a Eurodollar Rate Revolving Advance may only be converted on the expiration of the Interest Period applicable to such Eurodollar Rate Revolving Advance unless the Borrower shall pay all amounts due under Section 8.03(d) in connection with any such conversion; or (ii) upon the expiration of any Interest Period applicable to any Eurodollar Rate Revolving Advance, to continue all or any portion of such Revolving Advance equal to $3,000,000 and integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Revolving Advance. The Borrower shall deliver a Notice of Conversion/Continuation to the Administrative Agent no later than 12:00 noon (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Revolving Advance) and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Revolving Advance). Except as otherwise provided herein, a Notice of Conversion/Continuation for conversion to, or continuation of, any Eurodollar Rate Revolving Advances shall be irrevocable and binding on the Borrower and shall be subject to Section 8.03(d). Each conversion of Revolving Advances comprising part of the same Revolving Borrowing shall be made ratably among the Lenders in accordance with their applicable Commitments in respect of the Revolving Facility Sublimit.
(b) Mandatory. On the date on which the aggregate unpaid principal amount of Eurodollar Rate Revolving Advances comprising any Revolving Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $3,000,000, such Revolving Advances shall automatically convert into Base Rate Revolving Advances.
SECTION 2.07. Issuance of Letters of Credit.
(a) Letter of Credit Request. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of, and each Issuing Lender, in reliance on the agreements of the Lenders set forth in Section 2.08 hereof, agrees to issue Financial Letters of Credit and Performance Letters of Credit at any time and from time to time during the period from the Closing Date through the date that is seven Business Days prior to the Maturity Date. To request the issuance of a Letter of Credit,
the Borrower shall deliver to the applicable Issuing Lender and the Administrative Agent (reasonably in advance of the requested date of issuance, and, in any event, not less than five Business Days prior to such requested date of issuance) an Application requesting the issuance of such Letter of Credit and specifying the date of issuance (which shall be a Business Day), the address of the beneficiary thereof, the amount and currency of such Letter of Credit, the type of such Letter of Credit (Financial Letter of Credit or Performance Letter of Credit) and such other information as shall be necessary to prepare such Letter of Credit (and the Administrative Agent shall promptly provide notice to each Lender of each issuance of a Letter of Credit hereunder). To request the amendment of a Letter of Credit, the Borrower shall deliver to the applicable Issuing Lender and the Administrative Agent (reasonably in advance of the requested date of amendment, and, in any event, not less than three Business Days prior to such requested date of amendment) an Application requesting the amendment of such Letter of Credit and specifying such other information as shall be necessary to prepare such amendment (and the Administrative Agent shall promptly provide notice to each Lender of each amendment of a Letter of Credit hereunder). Notwithstanding anything to the contrary contained herein, no Issuing Lender shall issue or amend any Letter of Credit if, after giving effect to such issuance or amendment, (i) the aggregate LC Exposure (or the Dollar Equivalent thereof) plus the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders shall exceed the Aggregate Commitments or (ii) the aggregate LC Exposure (or the Dollar Equivalent thereof) in respect of Financial Letters of Credit plus the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders shall exceed the Revolving Facility Sublimit. The applicable Issuing Lender shall obtain confirmation of the immediately preceding sentence in writing from the Administrative Agent prior to issuing or amending any Letter of Credit hereunder. The Borrowers reimbursement obligations in respect of each Existing Letter of Credit, and each Lenders participation obligations in connection therewith, shall be governed by the terms of this Agreement.
(b) Terms of Letters of Credit. Each Letter of Credit shall expire on an expiry date (such date being the Expiration Date) not later than the seventh Business Day prior to the Maturity Date. For the avoidance of doubt, if the Maturity Date shall be extended pursuant to Section 2.25, Maturity Date as referenced in this clause (b) shall refer to the Maturity Date as extended pursuant to Section 2.25; provided that, notwithstanding anything in this Agreement (including Section 2.25 hereof) or any other Loan Document to the contrary, the Maturity Date, as such term is used in reference to the Issuing Lender or any Letter of Credit issued thereby, may not be extended without the prior written consent of the relevant Issuing Lender. In the event that the applicable Issuing Lenders office is closed on the applicable Expiration Date, such date shall be extended to the next Business Day on which such office is open. Each Letter of Credit shall be issued hereunder so long as the applicable Issuing Lender, in its sole discretion, determines that (i) such issuance is lawful, (ii) in the case of Financial Letters of Credit, such Letter of Credit qualifies as (x) a financial guarantee-type letter of credit under applicable rules and regulations and (y) in the case of backing Financial Letters of Credit, an independent undertaking for regulatory purposes, (iii) in the case of Performance Letters of Credit, such Letter of Credit qualifies as (x) a performance based letter of credit under applicable rules and regulations and (y) in the case of backing Performance Letters of Credit, an independent undertaking for regulatory purposes and (iv) such issuance does not violate any terms or provisions of this Agreement or any limitations on the amount of Letters of Credit an Issuing Lender may issue hereunder as separately agreed between the Issuing Lender and the Borrower. Each Letter of Credit shall be denominated in Dollars or in a Foreign Currency. The face or stated amount of any Letter of Credit shall not be less than $100,000 (or the Exchange Equivalent thereof determined as of the date of issuance) or such lesser amount as is acceptable to the applicable Issuing Lender. At no time shall (i) the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders plus the aggregate LC Exposure (or the Dollar Equivalent thereof) of all of the Lenders exceed the Aggregate Commitments or (ii) the aggregate outstanding principal amount of the Revolving Advances of all of the Lenders plus the aggregate LC Exposure (or the Dollar Equivalent thereof) in respect of Financial Letters of Credit exceed the Revolving Facility Sublimit. The applicable
Issuing Lender shall not be under any obligation to issue or amend any Letter of Credit if (i) the issuance or amendment of such Letter of Credit would violate one or more policies of the applicable Issuing Lender or any limitations on the amount of Letters of Credit such Issuing Lender may issue hereunder as separately agreed between the Issuing Lender and the Borrower or (ii) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the applicable Issuing Lender from issuing or amending such Letter of Credit, or any law applicable to such Issuing Lender or any request or directive from any Governmental Authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular. In the event of any inconsistency between the terms and conditions of any Application delivered by the Borrower pursuant to Section 3.02 and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control. The applicable Issuing Lender will promptly deliver to the Administrative Agent a true and complete copy of each Letter of Credit issued by it hereunder and each amendment thereto.
(c) Letters of Credit Issued on behalf of Subsidiaries and Other Related Entities. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of the Borrower on behalf of a Subsidiary or any other Related Entity, the Borrower shall be unconditionally obligated to reimburse the applicable Issuing Lender hereunder for any and all drawings under such Letter of Credit relating thereto. The Borrower will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent or the applicable Issuing Lender may reasonably request in order to effect fully the purposes of this Section 2.07(c).
(d) Applicability of ISP. Unless otherwise expressly agreed by the applicable Issuing Lender and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the ISP shall apply to each Letter of Credit.
(e) Existing Letters of Credit. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
SECTION 2.08. Participations in Letters of Credit.
On the Closing Date with respect to each Existing Letter of Credit and upon the issuance of any other Letter of Credit (or upon a Person becoming a Lender hereunder), in each case without any further action on the part of the Issuing Lenders or the Lenders, the applicable Issuing Lender hereby grants to each Lender, and each Lender hereby acquires from the applicable Issuing Lender, a participation in such Letter of Credit equal to such Lenders Applicable Percentage of the aggregate amount available to be drawn under such type of Letter of Credit (Financial Letter of Credit or Performance Letter of Credit). In consideration and in furtherance of the foregoing, each such Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Lender, such Lenders Applicable Percentage (calculated in accordance with the Commitments in respect of the applicable type of Letter of Credit) of each LC Disbursement made by the applicable Issuing Lender and not reimbursed for any reason by the Borrower on the date due as provided in Section 2.09 hereof, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations and make payments pursuant to this paragraph in respect of each Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever (other than the issuance of any Letter of Credit in excess of the amounts described in Section 2.07(a) as of the date of issuance and other than amendments to any Letter of Credit in violation of Section 8.05 to provide for an Expiration Date subsequent to the Maturity Date), including the occurrence and continuance of a Default or such participation or payment exceeding such Lenders
Commitments or the Aggregate Commitments or the Revolving Facility Sublimit by reason of currency fluctuations, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
SECTION 2.09. Reimbursement in Respect of Letters of Credit.
(a) Reimbursement Obligations. If any Issuing Lender shall make any LC Disbursement, such Issuing Lender shall promptly notify the Borrower and the Administrative Agent of such LC Disbursement, and the Borrower shall reimburse such Issuing Lender through the Administrative Agent in an amount equal to such LC Disbursement by paying such Issuing Lender through the Administrative Agent in Dollars an amount equal to such LC Disbursement (or the Dollar Equivalent thereof, as applicable): (i) not later than 2:00 p.m. (New York City time) on the Business Day immediately following the date that such Issuing Lender notifies the Borrower that such LC Disbursement is made by such Issuing Lender or (ii), if the Borrower shall have received notice of such LC Disbursement later than 2:00 p.m. (New York City time) on any Business Day or on a day that is not a Business Day, not later than 2:00 p.m. (New York City time) on the immediately following Business Day. If the Borrower fails to make such payment under this paragraph at the time specified in the preceding sentence, the applicable Issuing Lender shall notify each Lender and the Administrative Agent of the applicable LC Disbursement, the payment in Dollars then due from the Borrower in respect thereof and such Lenders Applicable Percentage thereof. The amounts set forth in such notice shall be conclusive absent manifest error. Upon the receipt of such notice, (x) the Borrower shall be deemed to have submitted, as of the date that such LC Disbursement is made, a Notice of Revolving Borrowing (and shall be deemed to have made certifications, representations and warranties set forth therein) for a Revolving Advance consisting of a Base Rate Revolving Advance in the amount of such LC Disbursement (or the Dollar Equivalent thereof, as applicable), (y) if all terms and conditions set forth herein for making a Revolving Advance (other than the receipt of a Notice of Revolving Borrowing) shall have been satisfied, such Revolving Advance shall be made as provided in Sections 2.01 and 2.02 except that the amount of such Revolving Advance shall be disbursed to the applicable Issuing Lender and (z) such Revolving Advance shall be subject to and governed by the terms and conditions hereof. In the event a Revolving Advance is not made as provided in the immediately preceding sentence for any reason (including as a result of any failure to fulfill the applicable conditions set forth in Section 2.02 or Article III) or any Revolving Advance made pursuant to the immediately preceding sentence is insufficient to reimburse the applicable Issuing Lender for such LC Disbursement in full, each Lender shall forthwith pay to the applicable Issuing Lender through the Administrative Agent in Dollars its Applicable Percentage of the unreimbursed LC Disbursement. If any amount required to be paid by any Lender in respect of an unreimbursed LC Disbursement pursuant to this Section 2.09 is not made available to the applicable Issuing Lender by such Lender on the date such payment is due (the due date), the applicable Issuing Lender shall be entitled to recover from such Lender, on demand, such amount with interest thereon calculated from the due date at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.09, to the extent that Lenders have made payments pursuant to this Section 2.09 to reimburse such Issuing Lender, then the Administrative Agent shall distribute such payment received from the Borrower to such Lenders as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse any Issuing Lender for any LC Disbursement shall not relieve the Borrower of its obligation to reimburse such LC Disbursement. Each Lender acknowledges and agrees that its obligations under this Section 2.09 shall survive the payment by the Borrower of all LC Disbursements and any termination of this Agreement. Without limiting the foregoing, in the event that any reimbursement of an LC Disbursement by the Borrower to any Issuing Lender is required to be repaid to the Borrower (pursuant to a proceeding in bankruptcy or otherwise), then the applicable Issuing Lender shall continue to be entitled to recover from each Lender, on demand, the portion of such repaid amount as shall be determined in accordance with this Section 2.09.
(b) Obligations Absolute. Subject to the provisions of this Agreement, the Borrowers obligation to reimburse LC Disbursements as provided in Section 2.09(a) shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any Issuing Lender under any Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, (iv) the existence of any claim, setoff, defense or other right that the Borrower or any Subsidiary or Affiliate thereof may at any time have against any beneficiary of any Letter of Credit, any Credit Party or any other Person, whether under this Agreement or any other related or unrelated agreement or transaction, or (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.09, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers obligations hereunder. The Lenders, the Issuing Lenders and the Administrative Agent shall not have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of any Issuing Lender. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the applicable Issuing Lender (as finally determined by a court of competent jurisdiction), such Issuing Lender shall be deemed to have exercised care in each determination relating to the foregoing. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of any Letter of Credit, the applicable Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
SECTION 2.10. Disbursement Procedures for Letters of Credit; Reporting.
(a) Disbursement Procedures for Letters of Credit. The applicable Issuing Lender shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The applicable Issuing Lender shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Lender has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Lender or the obligations of the Lenders with respect to any such LC Disbursement.
(b) Reporting. Each Issuing Lender shall, no later than the tenth Business Day following the last day of each month, provide to the Administrative Agent (and the Administrative Agent shall forward to the Lenders) schedules, in form and substance reasonably satisfactory to the Administrative Agent, showing the date of issue, account party, applicable currency, amount in such currency and Expiration Date for each Letter of Credit issued by such Issuing Lender hereunder and outstanding at any time during such month.
SECTION 2.11. Interest on LC Disbursements and Reimbursement of Other Amounts.
In the event the Borrower fails to reimburse any applicable Issuing Lender in full for any LC Disbursement by the time prescribed in Section 2.09(a) and a Revolving Advance is not made as provided in Section 2.09(a) or any Revolving Advance made pursuant to Section 2.09(a) is insufficient to reimburse the applicable Issuing Lender for such LC Disbursement in full, (i) the unpaid or unreimbursed amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, after as well as before judgment, at a rate per annum equal to the sum of (x) the Letter of Credit Fee and (y) the Base Rate plus 2.0%, and (ii) the Borrower shall also reimburse the applicable Issuing Lender upon demand for any losses incurred by such Issuing Lender in connection with changes in the foreign exchange rates as a result of the Borrowers failure to reimburse such LC Disbursement by the time prescribed in Section 2.09(a). Interest accrued pursuant to this Section 2.11 shall be for the account of the applicable Issuing Lender, except that interest accrued on and after the date of payment by any Lender pursuant to Section 2.09(a) to reimburse the applicable Issuing Lender shall be for the account of such Lender to the extent of such payment.
SECTION 2.12. Cash Collateralization.
(a) Deposit of Collateral Upon an Event of Default. If any Event of Default shall occur and be continuing, then on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders, as applicable, demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash in Dollars equal to the Dollar Equivalent of the aggregate LC Exposure as of such date plus any accrued and unpaid fees thereon; provided that (i) the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default described in paragraph (g) or (h) of Section 6.01 and (ii) the Borrower shall be obligated, from time to time and upon demand by the Administrative Agent, to deposit additional amounts into said account in cash in Dollars as necessary to maintain an amount on deposit equal to the amount (including, with respect to LC Exposure denominated in Foreign Currencies, the Dollar Equivalent thereof) of the total aggregate LC Exposure plus any accrued and unpaid fees thereon (as determined at any time). All such cash collateral amounts shall be held in a separate account and shall not be commingled with other funds of the Administrative Agent unless the Administrative Agent elects to make a Permitted Investment, as described below.
(b) Deposit of Collateral for Foreign Exchange Differential. In addition to the foregoing, if on any Computation Date (as defined below) (i) the outstanding principal amount of Revolving Advances plus the Dollar Equivalent of aggregate LC Exposure exceeds the Aggregate Commitments or (ii) the outstanding principal amount of Revolving Advances plus the Dollar Equivalent of aggregate LC Exposure in respect of Financial Letters of Credit exceeds the Revolving Facility Sublimit (any such excess amounts described in the foregoing clauses (i) and (ii), the Excess), in each case, by $10,000,000 or more, the Administrative Agent shall provide notice thereof to the Borrower and demand the deposit of cash collateral pursuant to this paragraph. On the Business Day on which the Borrower receives such notice, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders and the Issuing Lenders, an amount in cash in Dollars equal to the full amount of such Excess; provided that the Borrower shall be obligated, from time to time and upon demand by the Administrative Agent, to deposit additional amounts into said account in cash in Dollars as necessary to maintain an amount on deposit equal to the Excess (as determined at any time). The Administrative Agent shall produce copies of any calculations or reports relating to the
foregoing upon written request from the Borrower or any Lender. The Administrative Agent may, and at the instruction of the Required Lenders or the Borrower shall, undertake such calculations at any time; provided that in any event the Administrative Agent shall undertake such calculations at least once per calendar quarter and, in the case of any request by the Borrower, not more often than once per week, and the Administrative Agent shall not be required to undertake such calculations more frequently than once per calendar month without its consent. Each day upon or as of which the Administrative Agent undertakes the calculations described above in this Section 2.12(b) is referred to herein as a Computation Date. If the Borrower is required to provide an amount of cash collateral under this clause (b) as a result of any Excess, and the Administrative Agent shall subsequently determine on any Computation Date that the amount of such Excess is less than the amount on deposit in respect of the existence of such Excess, then (provided there is no Default then in existence) such excess amount of cash, if greater than $1,000,000 (to the extent not applied as aforesaid), shall be returned to the Borrower within three (3) Business Days after request therefor by the Borrower.
(c) Deposit of Collateral for Defaulting Lenders. In addition to the foregoing and subject to Section 2.22, if any Lender becomes a Defaulting Lender and while any LC Exposure exists, for so long as such Lender is a Defaulting Lender and such LC Exposure exists, then within two (2) Business Days following notice by the Administrative Agent demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall (i) deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, and/or (ii) subject to the following proviso (2), provide Permitted Cover, in each case an amount in cash in Dollars equal to the Dollar Equivalent of such Defaulting Lenders Applicable Percentage of the aggregate LC Exposure as of such date; provided that (1) the Borrower shall be obligated, from time to time and within two (2) Business Days following notice by the Administrative Agent demanding the deposit of additional cash collateral and/or Permitted Cover pursuant to this paragraph, to deposit additional amounts into said account in cash in Dollars, and/or to provide additional Permitted Cover, in each case as necessary to maintain an amount on deposit and/or Permitted Cover equal to the Dollar Equivalent of such Defaulting Lenders Applicable Percentage of the then aggregate LC Exposure and (2) the foregoing option to provide Permitted Cover in lieu of cash collateral shall only be available to the Borrower for a period not to exceed one (1) month after such notice by the Administrative Agent demanding deposit of cash collateral and upon the expiration of such period, the Borrower shall deposit cash collateral in the amount of such Defaulting Lenders LC Exposure as contemplated by this clause (c) and the failure to provide such deposit shall constitute an Event of Default. Payment by the Borrower of such cash collateral or provision of Permitted Cover shall not relieve the Defaulting Lender of its obligations hereunder, and the Borrower shall retain all of its rights and remedies hereunder and under applicable law against any such Defaulting Lender.
(d) Cash Collateral Accounts. Each deposit and Permitted Cover under Sections 2.12(a), (b) and (c) shall be held by the Administrative Agent (subject to Section 7.09) as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. If required by the Administrative Agent, the Borrower shall enter into any pledge or security agreement and any UCC financing statement with respect to such cash collateral in favor of the Administrative Agent as the Administrative Agent shall require. Such deposits shall be invested in Permitted Investments selected by the Administrative Agent in its sole discretion. All losses and expenses incurred as a result of such Permitted Investment activities shall be for the account of the Borrower. Interest or profits, if any, on such investments shall accumulate in such accounts for the account of the Borrower. Moneys in such accounts shall be applied by the Administrative Agent (i) to reimburse Issuing Lenders for LC Disbursements for which they have not been reimbursed; and (ii) to the extent not so applied, may be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or any other Obligations or to cover any losses in respect of any Excess; provided that moneys in such accounts relating to the Borrowers obligations under Section 2.12(c) shall
be applied by the Administrative Agent to reimburse the Issuing Lenders on a ratable basis for the applicable Defaulting Lenders Applicable Percentage of LC Disbursements for which the Issuing Lenders have not been reimbursed. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, and all Defaults are subsequently cured or waived and no Excess is then in existence, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Excess, and the Administrative Agent shall subsequently determine that the amount of such Excess is equal to or less than the amount on deposit in respect of the existence of such Excess, provided there is no Default then in existence, such excess amount of cash, if greater than $1,000,000 (to the extent not applied as aforesaid), shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Lender becoming a Defaulting Lender, and such Lender ceases to be a Defaulting Lender or the LC Exposure and Revolving Advances outstanding are subsequently reduced such that the amount of cash collateral provided therefor exceeds such Defaulting Lenders Applicable Percentage of the sum of the LC Exposure and Revolving Advances outstanding, such cash collateral (or excess amount of cash collateral, if applicable), to the extent not previously applied to the Defaulting Lenders obligations hereunder, shall be returned to the Borrower within three (3) Business Days after request therefor by the Borrower.
(e) Custody of Cash Collateral. Beyond the exercise of reasonable care in the custody thereof and investment of cash collateral deposits pursuant to the terms hereof, the Administrative Agent shall have no duty as to any cash collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the cash collateral in its possession if the cash collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or damage to any of the cash collateral or for any diminution in the value thereof by reason of the act or omission of any agent or bailee selected by the Administrative Agent in good faith. All expenses and liabilities incurred by the Administrative Agent in connection with taking, holding and disposing of any cash collateral (including customary custody and similar fees with respect to any cash collateral held directly by the Administrative Agent), shall be paid by the Borrower from time to time upon demand.
SECTION 2.13. Obligations.
Anything in this Agreement to the contrary notwithstanding, each of the Borrower and each Lender shall continue to be bound by all of its obligations hereunder, including without limitation, its obligations under Sections 2.03, 2.08 and 2.09, until such time as all outstanding Revolving Advances have been paid in full, each Letter of Credit has expired and no further Obligation, LC Exposure or Commitment exists.
SECTION 2.14. General Provisions as to Payments.
(a) Manner and Time of Payment. The Borrower shall make each payment hereunder (including, without limitation, in respect of the LC Disbursements), and interest thereon, and all fees due in respect of the transactions contemplated by this Agreement in Dollars in Federal or other funds immediately available in New York, New York, without set-off, deduction or counterclaim, to the Administrative Agent at its address referred to in Section 8.01(a). Except as otherwise provided in Section 2.05(b)(ii), whenever any such payment shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or additional compensation. If the date
for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. Any payment made by the Borrower after 2:00 p.m. (New York City time) on any day shall be deemed to have been made on the next Business Day for the purpose of calculating interest on amounts outstanding in respect of any Obligations. All payments required to be made by the Borrower hereunder shall be made in Dollars and shall be made without setoff or counterclaim.
(b) Application of Payments to Principal and Interest. All payments in respect of the principal amount of any Obligations hereunder shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Obligations on a date when interest is due and payable with respect to such Obligations) shall be applied to the payment of interest before application to principal.
(c) Apportionment of Payments. The Administrative Agent will promptly distribute to each Lender its ratable share of each payment received by the Administrative Agent which is for the account of the Lenders.
(d) Application of Funds. (i) All payments received from the Borrower by the Administrative Agent which are not reasonably identifiable by the Administrative Agent shall be applied by the Administrative Agent against the Obligations, and (ii) any amounts received on account of the Obligations after the exercise of remedies provided for in Section 6.02 (or after the Revolving Advances have automatically become immediately due and payable and the LC Exposure has automatically been required to be cash collateralized as set forth in the proviso to Section 6.02), in each case in the following order of priority: (A) to the payment of all amounts for which the Administrative Agent is entitled to compensation, reimbursement and indemnification under any Loan Document and all advances made by the Administrative Agent thereunder for the account of the Borrower, and to the payment of all reasonable costs and expenses paid or incurred by the Administrative Agent in connection with the Loan Documents, all in accordance with Sections 7.06 and 8.03 and the other terms of this Agreement and the Loan Documents; (B) thereafter, to the extent of any excess such proceeds, to the payment of all other Obligations for the ratable benefit of the holders thereof (subject to the provisions of Section 2.14(b) hereof); and (C) thereafter, to the extent of any excess such proceeds, to the Borrower or as otherwise required by applicable law.
(e) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Revolving Advances, to fund participations in Letters of Credit and to make payments pursuant to Section 7.06 are several and not joint. The failure of any Lender to make the Revolving Advance to be made by it as part of any Revolving Borrowing, to fund any such participation or to make any payment under Section 7.06 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving Advance, to purchase its participation or to make its payment under Section 7.06.
SECTION 2.15. Computation of Interest and Fees.
Interest on all amounts owed hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Base Rate (calculated at other than the Federal Funds Rate or the Eurodollar Rate) shall be computed on the basis of a year of 365 days or, if applicable, 366 days, and in each case all interest hereunder shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All fees due and payable hereunder shall, unless expressly otherwise provided for, be computed on the basis of a year of 360 days for the actual number of days elapsed.
SECTION 2.16. Taxes; Net Payments.
(a) Net Payments. Any and all payments by the Borrower under this Agreement shall be made free and clear of and without deduction for any and all current or future taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings and all liabilities with respect thereto excluding (i) income taxes imposed on the net income of any Lender; (ii) franchise taxes imposed on the net income of any Lender, in each case by the jurisdiction under the laws of which such Lender is organized, domiciled, resident or doing business or any political subdivision thereof and (iii) any United States federal withholding taxes imposed under FATCA (all such non-excluded taxes, levies, imposts, deductions, fees, assessments, duties, charges, withholdings and liabilities, collectively or individually, Taxes). If the Borrower shall be required to deduct any Taxes from or in respect of any sum payable hereunder to a Lender (i) the sum payable shall be increased by the amount (an additional amount) necessary so that after making all required deductions such Lender shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. Within 30 days after the date of any payment of Taxes pursuant to this paragraph (a), the Borrower shall furnish to the Administrative Agent a receipt issued by the relevant Governmental Authority or other evidence satisfactory to the Administrative Agent of payment thereof. The Borrower will indemnify each Lender (subject to such Lender having complied with paragraph (b) below) and hold each Lender harmless for the full amount of all Taxes paid or payable by such Lender with respect to this Agreement and any and all amounts received by such Lender hereunder, and any liability (including penalties, interest and expenses (including reasonable attorneys fees and expenses)) arising therefrom or with respect thereto whether or not such Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared by such Lender, absent manifest error, shall be final, conclusive and binding for all purposes. The obligations of the Borrower under this Section 2.16 shall survive the termination of this Agreement and the Commitments and the payment of all amounts payable under the Loan Documents.
(b) Evidence of Exemption from Withholding. Each Lender which is a foreign corporation within the meaning of Section 1442 of the Code, including the Administrative Agent acting as an intermediary or agent for such a Lender (each, a Foreign Lender), shall deliver to the Borrower such certificates, documents or other evidence as the Borrower may reasonably require from time to time as are necessary to establish that such Foreign Lender is not subject to withholding (or is subject to a reduced rate of withholding) under Section 1441 or 1442 of the Code or as may be necessary to establish, under any law hereafter imposing upon the Borrower, an obligation to withhold any portion of the payments made by the Borrower under the Loan Documents, that payments to the Administrative Agent for the account of such Foreign Lender are not subject to withholding (or are subject to a reduced rate of withholding), in any event to include: (i) two original copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY, as appropriate (or any successor forms), properly completed and duly executed by such Foreign Lender, and such other documentation required under the Code and reasonably requested by the Borrower, to establish that such Foreign Lender is not subject to, or is subject to a reduced rate of, deduction or withholding of United States federal income tax with respect to any payments to such Foreign Lender of principal, interest, fees or other amounts payable under any of the Loan Documents, or (ii) if such Foreign Lender is not a bank or other Person described in Section 881(c)(3) of the Code and cannot deliver either Internal Revenue Service Form W-8BEN (to the extent such form would document a claim or exemption from withholding pursuant to an applicable income tax treaty) or W-8ECI or W-8IMY pursuant to clause (i) above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any successor form) (to the extent such forms document the status of the Foreign Lender as other than a United States Person), properly completed and duly executed by such Foreign Lender, and such other documentation required under the Code and reasonably requested by the Borrower to establish that such Foreign Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Foreign Lender of interest under any of the Loan Documents. If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States federal withholding tax rate in excess of zero, United States federal withholding tax at such rate shall be considered excluded from Taxes as defined in Section 2.16(a).
(c) FATCA. If a payment made to a Lender under any Loan Document would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lenders obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph (c), FATCA shall include any amendments made to FATCA after the date of this Agreement.
(d) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 30 days after demand therefor, for (i) any Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the Borrower to do so), (ii) any taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings attributable to such Lenders failure to comply with the provisions of Section 8.06(c) relating to the maintenance of a Participant Register and (iii) any taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings excluded by the first sentence of paragraph (a) above attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such amounts were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).
SECTION 2.17. Increased Costs.
(a) Change in Law, Etc. In the event that any law, regulation, treaty or directive hereafter enacted, promulgated, approved or issued or any change in any currently existing law, regulation, treaty or directive therein or in the interpretation or application thereof by any Governmental Authority charged with the administration thereof or compliance by any Credit Party (or any Person directly or indirectly owning or controlling such Credit Party) with any request or directive, whether or not having the force of law, from any central bank or other Governmental Authority, agency or instrumentality (including, without limitation, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, in each case regardless of the date enacted, adopted or issued) (any such occurrence, a Change in Law):
(i) does or shall subject any Credit Party to any taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings (other than (A) Taxes, (B) taxes, levies, imposts, deductions, fees, assessments, duties, charges or withholdings excluded by the first sentence of Section 2.16(a)) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(ii) does or shall impose, modify or make applicable any reserve, special deposit, compulsory loan, assessment, increased cost or similar requirement against assets held by, or deposits of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Credit Party in respect of any Eurodollar Rate Revolving Advance or any Letter of Credit or participations therein (except any such reserve requirement reflected in the definition of Eurodollar Rate);
and the result of any of the foregoing is to increase the cost to such Credit Party of agreeing to make or of making, funding or maintaining Revolving Advances or of making, issuing, renewing, creating or maintaining any Letter of Credit or participation therein, or its commitment to lend or to issue or create any such Letter of Credit or participate therein, or to reduce any amount receivable hereunder in respect of any Revolving Advance or any Letter of Credit or participation therein, then, in any such case, the Borrower shall pay such Credit Party, upon its demand, any additional amounts necessary to compensate
such Credit Party for such additional cost or reduction in such amount receivable which such Credit Party deems to be material as determined by such Credit Party. A statement setting forth the calculations of any additional amounts payable pursuant to the foregoing sentence submitted by a Credit Party to the Borrower shall be conclusive absent manifest error. The obligations of the Borrower under this Section 2.17 shall survive the termination of this Agreement and the Commitments and payment of the Obligations and all other amounts payable under the Loan Documents. Failure to demand compensation pursuant to this Section 2.17 shall not constitute a waiver of such Credit Partys right to demand such compensation. To the extent that any increased costs of the type referred to in this Section 2.17 are being incurred by a Credit Party and such costs can be eliminated or reduced by the transfer of such Credit Partys participation or Commitment to another of its branches, and to the extent that such transfer is not inconsistent with such Credit Partys internal policies of general application and only if, as determined by such Credit Party in its sole discretion, the transfer of such participation or Commitment, as the case may be, would not otherwise materially adversely affect such participation or such Credit Party, the Borrower may request, and such Lender shall use reasonable efforts to effect, such transfer.
(b) Capital Adequacy. If after the date hereof, any Lender shall have determined that the adoption of any applicable law, rule or regulation regarding capital adequacy or liquidity requirements, or any Change in Law occurs, or compliance by any Lender (or its Lending Office or any Person directly or indirectly owning or controlling such Lender) with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lenders capital as a consequence of its obligations hereunder to a level below that which such Lender could have achieved but for such adoption, change or compliance (taking into consideration such Lenders policies with respect to capital adequacy and liquidity) by an amount deemed by such Lender to be material, then from time to time, within 10 Business Days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.
(c) Notification. Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 2.17. A certificate of any Lender claiming compensation under this Section 2.17 and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.
SECTION 2.18. Illegality.
Notwithstanding anything herein to the contrary, no Issuing Lender shall at any time be obligated to issue a Letter of Credit or agree to any extension or amendment thereof if such issuance, creation, extension or amendment would conflict with, or cause any Issuing Lender to exceed any limits imposed by, any law or requirements of any applicable Governmental Authority.
SECTION 2.19. Fees.
(a) The Borrower agrees to pay to the Administrative Agent, for the account of each Lender in accordance with its Applicable Percentage, a commitment fee (the Commitment Fee) equal to the product of the Applicable Rate then in effect times the average daily amount by which (i) the Aggregate Commitments in effect from time to time exceed (ii) the Utilization from time to time. The Commitment Fee shall accrue at all times during the Availability Period through and including the last Business Day of March, June, September and December of each year, including at any time during which one or more of the conditions in Article III is not met, and shall be payable in arrears on the third Business Day following the last Business Day of March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and on the last day of the Availability Period. Notwithstanding the foregoing or anything else contained in this Agreement to the contrary, for purposes of calculating the LC Exposure in connection with determining the applicable Commitment Fee, the parties hereto acknowledge and agree that to the extent any Escalating LC is then issued and outstanding, the applicable Commitment Fee shall accrue at 150% of the Commitment Fee which would be applicable solely by reference to the Applicable Rate multiplied by the difference between (x) the maximum amount (after giving effect to all possible increases) available to be drawn thereunder and (y) the amount then available to be drawn under such Escalating LC.
(b) The Borrower agrees to pay to the Administrative Agent, for the account of each Lender in accordance with its Applicable Percentage, a letter of credit fee (the Letter of Credit Fee), calculated daily with respect to such Lenders participations in Letters of Credit issued hereunder, equal to the product of (i) the Applicable Rate then in effect times (ii) the actual daily maximum face or stated amount of each Letter of Credit outstanding (in the case of any Escalating LC, such amount shall equal the amount then available to be drawn under such Escalating LC). Letter of Credit Fees payable pursuant to this paragraph (b) shall accrue through and including the last Business Day of March, June, September and December of each year and be payable in arrears on the third Business Day following the last Business Day of March, June, September and December of each year, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which all Commitments terminate and any such fees accruing after the date on which all Commitments terminate shall be payable on demand. The sum of each daily calculation, if in a currency other than Dollars, shall be converted to the Dollar Equivalent thereof on the date the applicable payment is due.
(c) The Borrower agrees to pay directly to each Issuing Lender, for its own account, a fronting fee with respect to each Letter of Credit issued by such Issuing Lender, at the rate per annum, and computed on the basis, separately agreed upon between the Borrower and such Issuing Lender, which fronting fee will be paid on a quarterly basis in arrears. Such fronting fee payable to any Issuing Lender shall accrue through and including the last Business Day of March, June, September and December of each year and be payable in arrears on the third Business Day following the last Business Day of March, June, September and December (or such other day as specified by the applicable Issuing Lender) of each year, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which all Commitments terminate and any such fees accruing after the date on which all Commitments terminate shall be payable on demand. In addition, the Borrower shall pay directly to each Issuing Lender, for its own account, such Issuing Lenders standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder in the amounts and at the times separately agreed upon.
(d) In addition to any of the foregoing fees, the Borrower agrees to pay to the Administrative Agent, the Joint Lead Arrangers and their Affiliates such other fees in the amounts and at the times separately agreed upon.
(e) All fees payable hereunder shall be paid on the dates due, in Dollars and in immediately available funds, to the Administrative Agent (or to the applicable Issuing Lender, in the case of fees payable to it) for distribution, in the case of Commitment Fees and Letter of Credit Fees, to the Lenders. Fees paid shall not be refundable under any circumstances. Any fee not due on a specific date shall be due on demand.
SECTION 2.20. Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Revolving
Advance made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Revolving Advance made hereunder, the Interest Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof.
(c) The entries made in the accounts maintained pursuant to paragraph (a) or (b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Revolving Advances in accordance with the terms of this Agreement.
(d) Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Note, which shall evidence such Lenders Revolving Advances in addition to such accounts maintained pursuant to paragraph (a) or (b) of this Section. Each Lender may attach schedules to its Revolving Note and endorse thereon the date, Interest Type (if applicable), amount and maturity of its Revolving Advances and payments with respect thereto.
SECTION 2.21. Use of Proceeds.
The proceeds of the Revolving Advances (other than any Revolving Advances made pursuant to Section 2.09(a)) shall be available (and the Borrower agrees that it shall use such proceeds) to refinance in part the Existing Facility and to provide working capital for the Borrower and its Subsidiaries and, subject to the provisions of this Agreement and the other Loan Documents, for other general corporate purposes of the Borrower and its Subsidiaries. No portion of the proceeds of any borrowing under this Agreement shall be used by the Borrower or any of its Subsidiaries in any manner that might cause the borrowing or the application of such proceeds to violate Regulation U or any other regulation of the FRB or to violate the Securities Exchange Act of 1934, as amended from time to time, and any successor statute, in each case as in effect on the date or dates of such borrowing and such use of proceeds.
SECTION 2.22. Defaulting Lenders.
Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) if any LC Exposure exists at the time a Lender is a Defaulting Lender, all or any part of such Defaulting Lenders LC Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated (x) without regard to such Defaulting Lenders Commitment and (y) in accordance with the Commitments in respect of the applicable type of Letter of Credit) but only to the extent that (i) the conditions set forth in Section 3.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (ii) such reallocation does not cause any Non-Defaulting Lenders Applicable Percentage (calculated (x) without regard to such Defaulting Lenders Commitment and (y) in accordance with the Commitments in respect of the applicable type of Letter of Credit) of the Utilization to exceed such Non-Defaulting Lenders Commitment in respect of the applicable type of
Letter of Credit. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lenders increased exposure following such reallocation;
(b) if the reallocation described in clause (a) above cannot, or can only partially, be effected, the Borrower shall within two (2) Business Days following notice by the Administrative Agent cash collateralize or (to the extent permitted by Section 2.12(c)) provide Permitted Cover for such Defaulting Lenders LC Exposure in accordance with the procedures set forth in Section 2.12 for so long as such LC Exposure is outstanding and to the extent such LC Exposure is not otherwise reallocated pursuant to clause (a) above;
(c) the Commitment and LC Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 8.05), provided that any waiver, amendment or modification extending or increasing the Commitment of such Defaulting Lender or reducing the principal of any LC Disbursement made by such Defaulting Lender shall require the consent of such Defaulting Lender;
(d) (i) if such Defaulting Lenders LC Exposure is reallocated pursuant to the foregoing clause (a), the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any Letter of Credit Fees otherwise payable to such Defaulting Lender pursuant to Section 2.19(b) with respect to such Defaulting Lenders LC Exposure that has been reallocated to such Non-Defaulting Lender and (y) not be required to pay the Commitment Fees to such Defaulting Lender pursuant to Section 2.19(a) with respect to such reallocated portion of such Defaulting Lenders LC Exposure, (ii) if the Borrower cash collateralizes or provides (to the extent permitted by Section 2.12(c)) Permitted Cover for any portion of such Defaulting Lenders LC Exposure pursuant to the foregoing clause (b), the Borrower shall not be required to pay the Letter of Credit Fees or Commitment Fees to such Defaulting Lender pursuant to Sections 2.19(a) and (b) with respect to such Defaulting Lenders LC Exposure during the period such Defaulting Lenders LC Exposure is cash collateralized or covered by Permitted Cover and (iii) if any portion of such Defaulting Lenders LC Exposure is neither reallocated nor cash collateralized pursuant to this Section 2.22, the Borrower shall pay to the applicable Issuing Lenders the amount of any such Letter of Credit Fees otherwise payable to such Defaulting Lender pursuant to Section 2.19(b); and
(e) no Issuing Lender shall be required to issue, amend or increase any Letter of Credit unless it is satisfied that cash collateral or (to the extent permitted by Section 2.12(c)) Permitted Cover will be provided by the Borrower in accordance with the foregoing clause (b).
If the Borrower, the Administrative Agent and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Revolving Advances of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Advances and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments then in effect (without giving effect to Section 2.22(a)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties,
no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a Defaulting Lender.
SECTION 2.23. Replacement of Lenders.
If any Lender requests compensation under Section 2.17, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender is a Defaulting Lender, or if any Lender does not consent to a proposed amendment, waiver, consent or modification with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate (in accordance with and subject to the restrictions contained in, and consents required by, Section 8.06), without recourse, all of their interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 8.06(b);
(b) such Lender shall have received payment of an amount equal to the aggregate outstanding amount of its LC Disbursements and/or Revolving Advances, as the case may be, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents from the assignee (to the extent of such outstanding LC Disbursements and/or Revolving Advances, as the case may be, and accrued interest and fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for compensation under Section 2.17 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.24. Incremental Commitments.
The Borrower may at any time, and from time to time, by notice to the Administrative Agent, request an increase in the Aggregate Commitments (provided that there shall be no increase in the Revolving Facility Sublimit pursuant to this Section 2.24) provided for under this Agreement by an amount (in the aggregate for all such requests) not exceeding $500,000,000 (each such increase, an Incremental Commitment Increase); provided, that (i) the maximum Aggregate Commitment hereunder shall not at any given time be in excess of $2,200,000,000, (ii) the maximum Revolving Facility Sublimit shall not at any given time be in excess of $750,000,000, (iii) any such Incremental Commitment Increase shall be in a minimum amount of $25,000,000 and any whole multiple of $10,000,000 in excess thereof and (iv) each Incremental Commitment Increase will be treated as a Commitment under this Agreement; provided, further, that (i) no Lender shall be required to provide all or any portion of such Incremental Commitment Increase and (ii) no Default or Event of Default shall have occurred and be continuing or would result after giving effect to such Incremental Commitment Increase on the Incremental Commitment Increase Effective Date. To achieve the full amount of a requested increase, the Borrower
may also invite additional banks or other financial institutions to become Incremental Increase Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent (each such joinder agreement, an Incremental Joinder Agreement); provided that each Incremental Increase Lender shall be subject to the approval of the Administrative Agent and each Issuing Lender (such approval in each case not to be unreasonably withheld or delayed) and the approval of the Borrower, but not the approval of any other Lender. If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the Incremental Commitment Increase Effective Date) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Incremental Commitment Increase Effective Date.
On each Incremental Commitment Increase Effective Date, each Lender, immediately prior to all Incremental Commitment Increases occurring on such Incremental Commitment Increase Effective Date, will automatically and without further action be deemed to have assigned to each Incremental Increase Lender providing a portion of the Incremental Commitment Increase on such Incremental Commitment Increase Effective Date, and each such Incremental Increase Lender will automatically and without further action be deemed to have assumed, a portion of such Lenders participations hereunder in outstanding Letters of Credit such that, after giving effect to each such deemed assignment and assumption of participations, each Lender (including each Incremental Increase Lender) shall hold its Applicable Percentage (including any additional Commitments of the Incremental Increase Lenders) of the participations hereunder in Letters of Credit.
Notwithstanding anything to the contrary set forth herein, the terms of each Incremental Commitment Increase shall be identical to the Commitments made as of the Closing Date except that the Applicable Rate in respect of the Letter of Credit Fee and/or the Commitment Fee and any other pricing terms (including upfront fees) shall be determined by the Borrower and the applicable Incremental Increase Lenders.
As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate signed by a senior vice president, the chief financial officer or the treasurer of the Borrower (i) certifying that such Incremental Commitment Increase and the performance of the Borrowers obligations thereunder (in form and substance reasonably satisfactory to the Administrative Agent) have been duly authorized (and attaching any evidence thereof reasonably requested by the Administrative Agent), and (ii) certifying that, as of the Incremental Commitment Increase Effective Date, before and after giving effect to such Incremental Commitment Increase, (A) the representations and warranties contained in Article IV and the other Loan Documents are true (except that for such purposes, the representations and warranties contained in Section 4.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 5.01(a)), (B) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries shall have occurred and be continuing which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents and (C) no Default shall have occurred and be continuing.
Solely with respect to any Incremental Commitment Increase, this Section shall supersede any provisions in Sections 2.14(c), 2.14(d), 8.04 or 8.05 to the contrary. In connection with any Incremental Commitment Increase, the Administrative Agent and the Borrower may, without the consent of any Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.24.
SECTION 2.25. Extension of Maturity Date.
(a) Requests for Extension. The Borrower may, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 60 days and not later than 30 days prior to each anniversary of the date of this Agreement (each such date, an Extension Date), request that each Lender extend such Lenders Maturity Date to the date that is one year after the Maturity Date then in effect for such Lender (the Existing Maturity Date).
(b) Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later than the date that is 15 days after the date on which the Administrative Agent received the Borrowers extension request (the Lender Notice Date), advise the Administrative Agent whether or not such Lender agrees to such extension (each Lender that determines to so extend its Maturity Date, an Extending Lender). Each Lender that determines not to so extend its Maturity Date (a Non-Extending Lender) shall notify the Administrative Agent of such fact promptly after such determination (but in any event no later than the Lender Notice Date), and any Lender that does not so advise the Administrative Agent on or before the Lender Notice Date shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree, and it is understood and agreed that no Lender shall have any obligation whatsoever to agree to any request made by the Borrower for extension of the Maturity Date.
(c) Notification by Administrative Agent. The Administrative Agent shall notify the Borrower of each Lenders determination under this Section no later than the date that is 15 days prior to the applicable Extension Date (or, if such date is not a Business Day, on the next preceding Business Day).
(d) Additional Commitment Lenders. The Borrower shall have the right, but shall not be obligated, on or before the applicable Maturity Date for any Non-Extending Lender to replace such Non-Extending Lender with, and add as Lenders under this Agreement in place thereof, one or more banks, financial institutions or other entities (each, an Additional Commitment Lender) approved by the Administrative Agent in accordance with the procedures provided in Section 2.24, each of which Additional Commitment Lenders shall have entered into an Assignment and Assumption Agreement (in accordance with and subject to the restrictions contained in Section 8.06, with the Borrower or replacement Lender obligated to pay any applicable processing or recordation fee) with such Non-Extending Lender, pursuant to which such Additional Commitment Lenders shall, effective on or before the applicable Maturity Date for such Non-Extending Lender, assume a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lenders Commitment hereunder on such date). The Administrative Agent may effect such amendments to this Agreement as are reasonably necessary to provide for any such extensions with the consent of the Borrower but without the consent of any other Lenders.
(e) Minimum Extension Requirement. If (and only if) the total of the Commitments in respect of the Revolving Facility Sublimit of the Lenders that have agreed to extend their Maturity Date and the additional Commitments of the Additional Commitment Lenders is more than 50% of the aggregate amount of the Revolving Facility Sublimit in effect immediately prior to the applicable Extension Date, then, effective as of the applicable Extension Date, the Maturity Date of each Extending Lender and of each Additional Commitment Lender shall be extended to the date that is one year after the Existing Maturity Date (except that, if such date is not a Business Day, such Maturity Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a Lender for all purposes of this Agreement and shall be bound by the provisions of this Agreement as a Lender hereunder and shall have the obligations of a Lender hereunder.
(f) Conditions to Effectiveness of Extension. Notwithstanding the foregoing, (x) no more than two (2) extensions of the Maturity Date shall be permitted hereunder and (y) any extension of any Maturity Date pursuant to this Section 2.25 shall not be effective with respect to any Lender unless:
(i) no Default shall have occurred and be continuing on the applicable Extension Date and immediately after giving effect thereto;
(ii) all representations and warranties of the Borrower contained in Article IV of this Agreement (other than the representation and warranty of the Borrower contained in Section 4.04(b) hereof) shall be true (except that for purposes of this Section 2.25(f), the representations and warranties contained in Section 4.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 5.01(a)) on and as of the applicable Extension Date and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(iii) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries shall have occurred and be continuing on and as of the applicable Extension Date and after giving effect thereto which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents; and
(iv) the Administrative Agent shall have received a certificate from the Borrower signed by a senior vice president, the chief financial officer or the treasurer of the Borrower (A) certifying the accuracy of the foregoing clauses (i), (ii) and (iii) and (B) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such extension.
(g) Maturity Date for Non-Extending Lenders. On the Maturity Date of each Non-Extending Lender, (i) the Commitment of each Non-Extending Lender shall automatically terminate and (ii) the Borrower shall repay such Non-Extending Lender in accordance with Section 2.03 (and shall pay to such Non-Extending Lender all of the other Obligations owing to it under this Agreement) and after giving effect thereto shall prepay any Revolving Advances outstanding on such date (and pay any additional amounts required pursuant to Section 8.03(d)) to the extent necessary to keep outstanding Revolving Advances ratable with any revised Applicable Percentages of the respective Lenders effective as of such date, and the Administrative Agent shall administer any necessary reallocation of the outstanding Revolving Advances and LC Exposures (without regard to any minimum borrowing, pro rata borrowing and/or pro rata payment requirements contained elsewhere in this Agreement).
(h) Conflicting Provisions. This Section shall supersede any provisions in Section 2.14 or Section 8.05 to the contrary.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Closing Date.
The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:
(a) Receipt of Documentation. The Administrative Agent shall have received:
(i) counterparts of this Agreement signed by the Borrower, the Administrative Agent, each Issuing Lender as of the Closing Date and each Lender;
(ii) a certificate, dated the Closing Date, of the Secretary or Assistant Secretary of the Borrower, substantially in the form of Exhibit C: (A) attaching a true and complete copy of the resolutions of its Board of Directors authorizing the execution and delivery of this Agreement and the other Loan Documents by the Borrower and the performance of the Borrowers obligations thereunder, and of all other documents evidencing other necessary action (in form and substance reasonably satisfactory to the Administrative Agent) taken by it to authorize the Loan Documents and the transactions contemplated thereby, (B) attaching a true and complete copy of its certificate of incorporation and bylaws, (C) certifying that said certificate of incorporation and bylaws are true and complete copies thereof, are in full force and effect and have not been amended or modified, and (D) setting forth the incumbency of its officer or officers who may sign the Loan Documents, including therein a signature specimen of such officer or officers;
(iii) a certificate of good standing for the Borrower from the Secretary of State for the State of Delaware, dated a recent date prior to the Closing Date; and
(iv) a certificate, dated the Closing Date, signed by a senior vice president, the chief financial officer or the treasurer of the Borrower to the effect set forth in paragraphs (b) and (c) of Section 3.02 and certifying (A) that, as of the Closing Date, there exists no Material Adverse Change and (B) the current Ratings.
(b) Opinions. The Administrative Agent shall have received an opinion of counsel for the Borrower addressed to the Credit Parties, substantially in the form of Exhibit A, covering such matters relating to the transactions contemplated hereby as the Administrative Agent may reasonably request, dated the Closing Date.
(c) Termination of Existing Credit Facility. The Existing Facility shall have been terminated and any obligations thereunder (other than the Existing Letters of Credit) shall have been repaid and the commitments thereunder shall have been terminated and each Existing Letter of Credit shall have become a Letter of Credit hereunder.
(d) Fees and Expenses Due to the Credit Parties. All fees and expenses due and payable to the Administrative Agent, the Joint Lead Arrangers and any other Credit Party shall have been paid.
(e) Fees and Expenses of Special Counsel. The fees and expenses of Sidley Austin LLP, special counsel to the Administrative Agent, in connection with the preparation, negotiation and closing of the Loan Documents shall have been paid.
SECTION 3.02. Conditions to All Revolving Advances and Letters of Credit.
The following conditions must be satisfied prior to the making of each Revolving Advance and the issuance of each Letter of Credit:
(a) Notice; Application. In the case of the making of a Revolving Advance, the Administrative Agent shall have received a Notice of Revolving Borrowing. In the case of the issuance of a Letter of Credit, the Administrative Agent and the applicable Issuing Lender shall have received: (i)
the notice required by Section 2.07(a) hereof; and (ii) an Application in the form required by the applicable Issuing Lender duly completed by the Borrower.
(b) Absence of Litigation. There shall be no injunction, writ, preliminary restraining order or other order of any nature issued by any Governmental Authority in any respect directly affecting the transactions provided for herein and no action or proceeding by or before any Governmental Authority shall have been commenced and be pending or, to the knowledge of the Borrower, threatened, seeking to prevent or delay the transactions contemplated by the Loan Documents or challenging any other terms and provisions hereof or thereof or seeking any damages in connection therewith.
(c) Representations and Warranties; No Default. At the time of and immediately after giving effect to the applicable Revolving Borrowing or the issuance of the applicable Letter of Credit: (i) no Default shall have occurred and be continuing, (ii) all representations and warranties of the Borrower contained in Article IV of this Agreement (other than the representation and warranty of the Borrower contained in Section 4.04(b) hereof) shall be true (except that for purposes of this Section 3.02, the representations and warranties contained in Section 4.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 5.01(a)), and (iii) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries shall have occurred and be continuing which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents.
(d) Commitments and LC Exposure. Both before and immediately after giving effect to the applicable Revolving Borrowing or the issuance of the applicable Letter of Credit, (i) the Dollar Equivalent of the total LC Exposure plus the outstanding principal amount of all Revolving Advances shall not exceed the Aggregate Commitments and (ii) the Dollar Equivalent of the total LC Exposure in respect of Financial Letters of Credit plus the outstanding principal amount of all Revolving Advances shall not exceed the Revolving Facility Sublimit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power.
The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents (i) are within the Borrowers corporate power, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official, (iv) do not contravene or constitute a default under any provision of applicable law or regulation, or of the certificate of incorporation or by-laws of the Borrower, and (v) do not contravene or constitute a default under, or result in the creation of any Lien under, any material agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower.
SECTION 4.03. Binding Effect.
This Agreement has been duly executed and delivered by the Borrower and constitutes a valid and binding agreement of the Borrower, enforceable in accordance with its terms.
SECTION 4.04. Financial Information.
(a) Balance Sheet. The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of December 31, 2013 and the related consolidated statements of earnings and of cash flow for the fiscal year then ended, reported on by Ernst & Young LLP and set forth in the Borrowers 2013 Form 10-K, a copy of which has been made available to each of the Lenders, fairly present, in conformity with GAAP, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and changes in financial position for such fiscal year.
(b) Material Adverse Change. There exists no Material Adverse Change.
SECTION 4.05. Litigation.
There is no action, suit or proceeding pending or to the knowledge of the Borrower threatened against or affecting the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official (i) which could reasonably be expected to have a material adverse effect on the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, taken as a whole, and the Borrowers ability to perform its obligations under the Loan Documents at any time up to and including the Maturity Date, or (ii) which purports to affect the legality, validity or enforceability of this Agreement or any other Loan Document.
SECTION 4.06. Compliance with ERISA.
The Borrower and its Subsidiaries have fulfilled their obligations under the minimum funding standards of ERISA with respect to each Plan and are in compliance in all material respects with the currently applicable provisions of ERISA, noncompliance with which could reasonably be expected to have a material adverse effect on the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, taken as a whole, and the Borrowers ability to perform its obligations under the Loan Documents at any time up to and including the Maturity Date.
SECTION 4.07. Taxes.
The Borrower and its Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary other than any such taxes or assessments being currently contested in good faith and other than where the failure to so file or pay would not have a material adverse effect on the business, financial position, results of operations or properties of the Borrower and its Consolidated Subsidiaries taken as a whole or, alternatively, on the ability of the Borrower to perform its obligations under the Loan Documents at any time up to and including the Maturity Date. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are adequate.
SECTION 4.08. Material Subsidiaries.
Each of the Borrowers Material Subsidiaries is duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, and has all requisite power and authority and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
SECTION 4.09. Not an Investment Company.
The Borrower is not an investment company within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.10. Business of the Borrower; Use of Proceeds.
The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U), and no Revolving Advance or LC Disbursement will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. To the extent permitted by Section 2.07(b), the purpose of (i) each Financial Letter of Credit shall be to support the obligations of the Borrower or any of the Borrowers Subsidiaries as a financial guarantee type letter of credit or to back bank guarantees issued by any Issuing Lender or its correspondent bank to support such Financial Letters of Credit and (ii) each Performance Letter of Credit shall be to support, or to back bank guarantees issued by other banks to support, the Borrowers and the Related Entities performance under specific project engineering, procurement, construction, maintenance and related activities and/or contracts. Neither the issuance of any Letter of Credit or the making of any Revolving Advance nor the payment of any Obligation will violate any applicable law or regulation. The Borrower will not, directly or indirectly, use the proceeds of the Revolving Advances or Letters of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Revolving Advances, whether as underwriter, advisor, investor, or otherwise).
SECTION 4.11. No Misleading Statements.
No written information, exhibit or report furnished by or at the direction of the Borrower or any Subsidiary to the Administrative Agent or any Lender in connection with this Agreement contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not misleading.
SECTION 4.12. Environmental Matters.
In the ordinary course of its business, the Borrower conducts an ongoing review of the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries, in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for clean-up or closure of properties now or previously owned, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Borrower has reasonably concluded that Environmental Laws are not likely to have a material adverse effect on the business, financial condition, results of operations or properties of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or, alternatively, on the Borrowers ability to perform its obligations under the Loan Documents at any time up to and including the Maturity Date.
SECTION 4.13. No Default.
No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
SECTION 4.14. Sanctions.
None of the Borrower, any of its Subsidiaries or any director, officer or Affiliate or, to the knowledge of the Borrower, any employee or agent, of the Borrower or any of its Subsidiaries is an individual or entity (Person) that is, or is owned or controlled by Persons that: (i) are the subject of any sanctions administered or enforced by the U.S. Department of the Treasurys Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majestys Treasury, or other relevant sanctions authority (collectively, Sanctions), or (ii) have a place of business or are organized or resident in a country or territory that is, or whose government is, the subject of comprehensive Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment or any LC Exposure or any other Obligation hereunder remains outstanding:
SECTION 5.01. Information.
The Borrower will deliver to each of the Lenders:
(a) Annual Financial Statements. As soon as available and in any event within one hundred (100) days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of earnings and cash flow for such fiscal year, as set forth in the Borrowers annual report for the fiscal year then ended as filed with the SEC on form 10-K, setting forth in each case in comparative form the figures for the previous fiscal year, audited and accompanied by a report and opinion of Ernst & Young LLP or other independent public accountants of nationally recognized standing, which report and opinion shall be prepared in a manner acceptable to the SEC and shall not be subject to any going concern or like qualification or exception or any qualification or exception as to the scope of such audit;
(b) Quarterly Financial Statements. As soon as available and in any event within fifty-five (55) days after the end of each of the first three (3) quarters of each fiscal year of the Borrower, an unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of earnings and cash flow for such quarter and for the portion of the Borrowers fiscal year ended at the end of such quarter, as set forth in the Borrowers quarterly report for the fiscal quarter then ended as filed with the SEC on Form 10-Q, all certified by the chief financial officer or the chief accounting officer of the Borrower that they are (i) complete and fairly present the financial condition of the Borrower and its Consolidated Subsidiaries as at the dates indicated and the results of their operations and changes in their cash flow for the periods indicated; (ii) disclose all
liabilities of the Borrower and its Consolidated Subsidiaries that are required to be reflected or reserved against under GAAP, whether liquidated or unliquidated, fixed or contingent; and (iii) have been prepared in accordance with GAAP (subject to normal year-end adjustments);
(c) Certificate of Chief Financial Officer. Simultaneously with the delivery of each set of financial statements referred to in paragraphs (a) and (b) above, a certificate of the chief financial officer, the treasurer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Section 5.07 on the date of such financial statements, (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto, and (iii) describing the parties, subject matter, and nature and amount of relief granted to the prevailing party in any litigation or proceeding in which a final judgment or order which is either for the payment of money in an amount equal to or exceeding $25,000,000 (or the Exchange Equivalent thereof) or which grants any material non-monetary relief to the prevailing party therein was rendered against the Borrower or any Subsidiary (whether or not satisfied or stayed) during the most recently ended fiscal quarter;
(d) Notice of Default. Forthwith upon knowledge of the occurrence of any Default, a certificate of the chief financial officer, the treasurer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;
(e) Other Financial Statements. Promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed;
(f) SEC Filings. Promptly upon the filing thereof, copies of (i) all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower or any Subsidiary shall have filed with the SEC, and (ii) all other reports which the Borrower or any Subsidiary shall have filed with the SEC or any national securities exchange, unless the Borrower or such Subsidiary is not permitted to provide copies thereof to the Lenders pursuant to applicable laws or regulations;
(g) ERISA Reportable Events. If and when any member of the Controlled Group (i) gives or is required to give notice to the PBGC of any reportable event (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability in excess of $20,000,000 (or the Exchange Equivalent thereof) under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan, a copy of such notice;
(h) Notice of Rating Change. Promptly upon the Borrowers obtaining knowledge thereof, notice of any withdrawal or change or proposed withdrawal or change in any Ratings;
(i) Notices from Beneficiaries. Immediately upon the Borrowers receipt thereof, a copy of any writing delivered by any beneficiary under any Letter of Credit to the Borrower or any of its Subsidiaries indicating such beneficiarys intention to draw under the applicable Letter of Credit;
(j) Notice of Changes in Accounting Policies. Promptly following any such change, notice of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary; and
(k) Other Financial Information. From time to time such additional information regarding the financial position or business of the Borrower or any Subsidiary as the Administrative Agent, at the reasonable request of any Lender, may request.
Documents required to be delivered pursuant to Section 5.01(a), (b), (e), (f) or (k) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically (including, without limitation, via Debt Domain or any similar platform) and if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents, or provides a link thereto on the Borrowers website on the Internet at the website address listed on the Borrowers signature page hereto; provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender, and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
SECTION 5.02. Payment of Obligations.
The Borrower will pay and discharge, and will cause each Subsidiary to pay and discharge, at or before maturity, all their respective material obligations and liabilities, except where the same may be contested in good faith by appropriate proceedings or where the failure to so pay and discharge would not have a material adverse effect on the consolidated financial position of the Borrower and its Consolidated Subsidiaries, and will maintain, and will cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
(a) Maintenance of Property. The Borrower will keep, and will cause each Material Subsidiary to keep, all material items of property useful and necessary in its business in good working order and condition, ordinary wear and tear and damage from casualty excepted.
(b) Insurance. The Borrower will maintain, and will cause each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their real and personal property in at least such amounts and against at least such risks as are usually insured against by companies of established repute engaged in the same or similar business as the Borrower or such Subsidiary and owning similar assets (Industry Standards), except where such risks are covered by self insurance so long as the amount of such self insurance and the risks covered thereby are consistent with Industry Standards. The Borrower will promptly furnish to the Lenders such information as to insurance carried or self insurance maintained as may be reasonably requested in writing by the Administrative Agent on behalf of any Lender.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
The Borrower will preserve, renew and keep in full force and effect, and will cause each Material Subsidiary to preserve, renew and keep in full force and effect, its respective legal existence and good standing under the laws of the jurisdiction of its organization and its respective rights, privileges and franchises necessary or desirable in the normal conduct of business; provided that nothing in this Section 5.04 shall prevent the Borrower or any Subsidiary from (i) merging into, consolidating with, or selling, leasing or otherwise transferring all of its assets to the Borrower or a Subsidiary (so long as, in the case of the Borrower taking any such action, the applicable Subsidiary assumes all Obligations pursuant to a written agreement acceptable to the Administrative Agent, subject in each case to Section 8.06(a)), or (ii) abandoning or disposing of any of its assets or abandoning or terminating any right or franchise if (A) disposition or termination does not violate any other provision of this Agreement and (B) all such abandonments, dispositions and terminations do not in the aggregate materially and adversely affect the business, assets, financial condition or results of operations of the Borrower and its Consolidated Subsidiaries, taken as a whole, or, alternatively, the ability of the Borrower to perform its obligations under the Loan Documents at any time up to and including the Maturity Date.
SECTION 5.05. Compliance with Laws.
The Borrower will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, orders, and requirements of governmental authorities (including, without limitation, ERISA, Environmental Laws and the rules and regulations thereunder), except where failure to so comply would not have a material adverse effect on the business, financial position, results of operations or properties of the Borrower and its Consolidated Subsidiaries taken as a whole or, alternatively, on the ability of the Borrower to perform its obligations under the Loan Documents at any time up to and including the Maturity Date.
SECTION 5.06. Keeping of Records; Inspection of Property, Books and Records.
The Borrower will keep, and will cause each Subsidiary to keep, proper books of record and account in accordance with GAAP consistently applied; and will permit, and will cause each Subsidiary to permit, the Administrative Agent, any of the Lenders or any agents or representatives of the Administrative Agent or any Lender, at the Administrative Agents or such Lenders expense, to visit and inspect any of its respective properties, to examine any of its respective books and records and (subject to Section 8.10) to discuss its respective affairs, finances and accounts with any of its respective officers, directors, employees and independent public accountants, all at such times and as often as may reasonably be desired, in each case upon reasonable notice and during normal business hours. Notwithstanding anything to the contrary in this Section 5.06, none of the Borrower or any of its Subsidiaries will be required to disclose, permit the inspection, examination or discussion of, any document, information or other matter in respect of which such disclosure is then prohibited by law or any agreement binding on the Borrower or any of its Subsidiaries.
SECTION 5.07. Debt.
(a) Debt to Tangible Net Worth Ratio. The ratio of Consolidated Debt to Consolidated Tangible Net Worth will at no time exceed 1.00 to 1.00.
(b) Total Debt. The total Debt of all Consolidated Subsidiaries of the Borrower, excluding the Debt, if any, owed by such Consolidated Subsidiaries to the Borrower or another Consolidated Subsidiary of the Borrower, will at no time exceed an amount equal to $750,000,000 (or the Exchange Equivalent thereof).
SECTION 5.08. Negative Pledge.
Neither the Borrower nor any Subsidiary will create, assume or suffer to exist any Lien securing Debt on any asset now owned or hereafter acquired by it, or assign any right to receive income, except:
(i) Liens existing on the date of this Agreement and disclosed on Schedule 5.08 attached hereto and any renewals or extensions thereof, provided that the property covered thereby is not changed;
(ii) any Lien existing on any asset of any Person at the time such Person becomes a Subsidiary or is merged into or consolidated with an Borrower or a Subsidiary; provided that (i) such Lien is not created in contemplation of such event, (ii) such Lien shall not apply to any other property or asset of the Borrower or any of its Subsidiaries, and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be;
(iii) any Lien on any asset securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring or constructing such asset; provided that (i) such Lien attaches to such asset concurrently with or within 180 days after the acquisition or construction thereof and (ii) such Lien shall not apply to any other property or asset of the Borrower or any of its Subsidiaries;
(iv) any Lien existing on any asset prior to the acquisition thereof by the Borrower or a Subsidiary and not created primarily in contemplation of such acquisition;
(v) any Lien arising out of the refinancing, extension, renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section 5.08, provided that such Debt is not increased and is not secured by any additional assets;
(vi) Liens securing judgments for the payment of money not constituting an Event of Default under Section 6.01(j);
(vii) any Lien on or with respect to the property or assets of any Subsidiary securing obligations owing to the Borrower or another Subsidiary;
(viii) rights of offset and bankers liens in connection with Debt permitted hereby;
(ix) Liens incurred or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance or other types of social security (other than a Lien imposed by ERISA) or to secure the performance of tenders, statutory obligations, bid and appeals bonds, contracts (other than for the repayment of borrowed money) and surety and performance bonds (including, without limitation, Liens securing obligations under indemnity agreements for surety bonds); and
(x) Liens not otherwise permitted by the foregoing clauses of this Section 5.08 securing Debt in an aggregate principal amount at any time outstanding not to exceed ten percent (10%) of Consolidated Tangible Net Worth.
SECTION 5.09. Consolidations, Mergers and Sales of Assets.
The Borrower will not (i) except to the extent expressly permitted in Section 5.04 hereof, consolidate or merge with or into any other Person; provided that the Borrower may merge with a Person if (A) the Borrower is the surviving corporation to such merger and (B) after giving effect to any such
merger no Default shall have occurred hereunder and all representations and warranties shall be true and correct or (ii) except as permitted pursuant to the foregoing clause (i), sell, lease or otherwise transfer, directly or indirectly, all or any substantial part of the assets of the Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 5.10. Payment of Taxes, Etc.
The Borrower will pay, and will cause each Subsidiary to pay, before the same become delinquent, all taxes, assessments and governmental charges imposed upon it or any of its properties, except where the same may be contested in good faith by appropriate proceedings, or where any failure to so pay would not have a material adverse effect on the business, financial position, results of operations or properties of the Borrower and its Consolidated Subsidiaries taken as a whole or, alternatively, on the ability of the Borrower to perform its obligations under the Loan Documents at any time up to and including the Maturity Date, and the Borrower will maintain, and will cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of the same.
SECTION 5.11. Pari-passu Obligations.
The obligations under this Agreement shall constitute direct, unconditional, senior, unsubordinated, general obligations of the Borrower and will rank at least pari-passu (in priority of payment) with all other existing and future senior, unsecured, unsubordinated obligations of the Borrower resulting from any indebtedness for borrowed money or Debt Guarantee.
SECTION 5.12. Further Assurances.
At any time or from time to time upon the request of the Administrative Agent, the Borrower will, at its expense, promptly execute, acknowledge and deliver such further documents (including collateral agreements, UCC financing statements and the like pursuant to Section 2.12) and do such other acts and things as the Administrative Agent may reasonably request in order to effect fully the purposes of the Loan Documents.
SECTION 5.13. Use of Proceeds.
The Borrower will not, directly or indirectly, use the proceeds of the Revolving Advances or Letters of Credit in violation of Section 4.10.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.
Each of the following events (each an Event of Default) shall constitute an Event of Default hereunder:
(a) the Borrower shall fail to pay (i) when due, any amount of principal of any Revolving Advance or any LC Disbursement, or (ii) within three (3) days after the same becomes due, any interest on any Revolving Advance or any LC Disbursement, any fees or any other amount payable hereunder; or
(b) the Borrower shall fail to observe or perform any covenant contained in Section 2.12 or Sections 5.07 to 5.11, inclusive, or Section 5.13; or
(c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by paragraph (a) or (b) above) for thirty (30) days after the earlier to occur of (i) written notice thereof having been given to the Borrower by the Administrative Agent at the request of any Lender or (ii) actual knowledge thereof by the Borrower or any of its Subsidiaries of such failure; or
(d) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any payment in respect of any Debt (other than the Obligations) having an aggregate principal amount of at least $100,000,000 (or the Exchange Equivalent thereof) when due or within any applicable grace period; or
(f) any event shall occur or condition shall exist which results in the acceleration of the maturity of any Debt of the Borrower or any Subsidiary having an aggregate principal amount of at least $100,000,000 (or the Exchange Equivalent thereof); or such Debt shall be declared due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof, excluding, however, prepayments of Debt required upon disposition in the ordinary course of business of collateral securing such Debt so long as such Liens and dispositions are permitted hereby; or, for the avoidance of doubt, such Debt shall be required to be cash collateralized prior to the stated maturity thereof as a result of any event of default with respect to such Debt (excluding cash collateralization solely as a result of currency exchange fluctuations or Defaulting Lenders); or
(g) the Borrower or any Subsidiary shall commence a voluntary case or other proceeding seeking to adjudicate the Borrower or any Subsidiary having total assets of $100,000,000 (or the Exchange Equivalent thereof) or more as bankrupt or insolvent, seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the entry of an order for relief or the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or for any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or shall take any corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against the Borrower or any Subsidiary having total assets of $100,000,000 (or the Exchange Equivalent thereof) or more seeking to adjudicate it as bankrupt or insolvent, seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seeking the entry of an order for relief or the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or for any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty (30) days; or an order for relief shall be entered against the Borrower or any Subsidiary having total assets of $100,000,000 (or the Exchange Equivalent thereof) or more under the federal bankruptcy laws as now or hereafter in effect; or
(i) any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $100,000,000 (or the Exchange Equivalent thereof) which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA except where the failure to so pay would not (in the opinion of the Required Lenders) have a material adverse effect on the business, financial position, results of operations or properties of the Borrower and its Consolidated Subsidiaries taken as a whole or alternatively, on the Borrowers ability to perform its obligations under the Loan Documents at
any time up to and including the Maturity Date; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities in an amount that would have a material adverse effect on the Borrower and its Consolidated Subsidiaries taken as a whole and the Borrowers ability to perform its obligations under the Loan Documents at any time up to and including the Maturity Date (collectively, a Material Plan) shall be filed under Title IV of ERISA by any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary of any Material Plan against any member of the Controlled Group to enforce Section 515 of ERISA and such proceeding shall not have been dismissed within thirty (30) days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or
(j) to the extent not insured against, one or more final judgments or orders for the payment of money aggregating in excess of $100,000,000 (or the Exchange Equivalent thereof) shall be rendered against the Borrower or any Subsidiary and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgments or orders or (ii) any of such judgments or orders shall continue unsatisfied and unstayed by reason of a pending appeal or otherwise for a period of thirty (30) days; or
(k) (i) any Person or group of Persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under said Act) of 35% or more of the outstanding shares of common stock of the Borrower; or (ii) at any time during any period of twelve consecutive calendar months a majority of the Board of Directors of the Borrower shall not consist of individuals who were either directors of the Borrower on the first day of such period (original directors) or appointed as or nominated to be directors either (A) by individuals including a majority of those of the original directors who have not, prior to such appointment or nomination, resigned or died, or (B) by a duly constituted committee of the Board of Directors of the Borrower, a majority of which consists of the original directors; or
(l) all or any substantial part of the property of the Borrower and its Subsidiaries (taken as a whole) shall be condemned, seized or otherwise appropriated, or custody or control of such property shall be assumed, by any court or governmental agency of competent jurisdiction, and such property shall be retained for a period of thirty (30) days, which condemnation, seizure or other appropriation could reasonably be expected to have a material adverse effect on the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, taken as a whole, and the Borrowers ability to perform its obligations under the Loan Documents at any time up to and including the Maturity Date; or
(m) any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or the Borrower contests in any manner the validity or enforceability of any provision of any Loan Document; or the Borrower denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document.
SECTION 6.02. Remedies.
Upon the occurrence and during the continuance of any Event of Default (other than any event specified in paragraph (g) or (h) of Section 6.01): (a) the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, require, without notice or demand, either or both of the
following, at the same or different times: (i) that any or all of the LC Exposure, the Revolving Advances and all other Obligations, although not yet due, be immediately due and payable, and thereupon such LC Exposure, Revolving Advances and all other such Obligations shall be immediately due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower, and (ii) that all Commitments be terminated, and thereupon all Commitments shall terminate immediately; and in any event, the Administrative Agent shall have in any jurisdiction where enforcement is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the UCC; and (b) the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, require the Borrower to deposit cash collateral in Dollars with the Administrative Agent and otherwise perform all of its obligations under Section 2.12; provided that upon the occurrence of any event specified in paragraph (g) or (h) of Section 6.01, (x) such cash collateral referred to in clause (b) above shall be immediately deposited with the Administrative Agent in accordance with the provisions of Section 2.12 and (y) all Commitments shall automatically terminate and such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization.
Each of the Lenders and each Issuing Lender hereby irrevocably appoints BNPP to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.
SECTION 7.02. Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term Lender or Lenders shall, unless otherwise expressly indicated or unless the context otherwise requires or the Administrative Agent is not a Lender hereunder, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
SECTION 7.03. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Revolving Advance, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the applicable Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to the making of such Revolving Advance or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 7.04. Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
SECTION 7.05. Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 6.02 and 8.05) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or an Issuing Lender.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
SECTION 7.06. Indemnification.
To the extent that the Borrower for any reason fails to indefeasibly pay any amount required pursuant to Section 8.03(a) or Section 8.03(c) to be paid by it to the Administrative Agent (or any sub-agent thereof), any Issuing Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Lender or such Related Party, as the case may be, such Lenders Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or such Issuing Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or such Issuing Lender in connection with such capacity. The obligations of the Lenders under this Section 7.06 are subject to the provisions of Section 2.14(e).
SECTION 7.07. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender and each Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
SECTION 7.08. Resignation of Administrative Agent.
(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or an Issuing Lender under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed), and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successors appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section) . The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agents resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 8.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
(b) Any resignation by BNPP as Administrative Agent pursuant to this Section shall also constitute its resignation as an Issuing Lender. Upon the acceptance of a successors appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender, (b) the retiring Issuing Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.
SECTION 7.09. Agent With Respect to Cash Collateral Accounts.
Each Lender hereby authorizes the Administrative Agent, on behalf of and for the benefit of Lenders, to be the agent for and representative of the Lenders and the Issuing Lenders with respect to any cash collateral accounts. Anything contained in any of the Loan Documents to the contrary notwithstanding, the Borrower, the Administrative Agent, each Lender and each Issuing Lender hereby agree that no Lender or Issuing Lender shall have any right individually to realize upon any cash collateral accounts, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by the Administrative Agent, on behalf of the Lenders and the Issuing Lenders, in accordance with the terms hereof. In furtherance, and not by limitation, of the foregoing, without written consent or authorization from the Lenders or the Issuing Lenders, the Administrative Agent may, in accordance with the terms of this Agreement, release any Lien encumbering any of the cash collateral and execute any documents or instruments necessary to accomplish any of the foregoing.
SECTION 7.10. No Other Duties, etc.
Anything herein to the contrary notwithstanding, none of the Lenders or their Affiliates identified in this Agreement as Joint Lead Arrangers, the Syndication Agent, the Co-Documentation Agents or any other agent (other than the Administrative Agent) shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, other than, in the case of Lenders those applicable to all Lenders as such and in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices.
(a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices, requests and other communications to any party hereunder shall be in writing (including telecopy and including electronic mail and Internet or intranet websites such as Debt Domain or any similar platform to the extent provided in Section 8.01(b)) and shall be given to such party at its address, telecopy number or electronic mail address set forth on the signature pages hereof or such other address, telecopy number or electronic mail address as such party may hereafter specify for the purpose by notice to the Administrative Agent, the Issuing Lenders and the Borrower. Each such notice, request or other communication shall be effective (i) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, (ii) if given by telecopy, when such telecopy has been received by the addressee thereof, (iii) if delivered through electronic communications (including electronic mail and Internet or intranet websites such as Debt Domain or any similar platform) to the extent provided in Section 8.01(b) below, as provided in such Section 8.01(b) or (iv) if given by any other means, when delivered at the address specified in this Section 8.01(a); provided that notices to the Administrative Agent or any Issuing Lender under Article II shall not be effective until received. The Administrative Agent and the Issuing Lenders shall not be liable for any errors in transmission or the illegibility of any telecopied documents. In the event the Borrower sends the Administrative Agent or any Issuing Lender a manually signed confirmation of previously sent facsimile instructions, the Administrative Agent and the Issuing Lenders shall have no duty to compare it against the previous instructions received by the Administrative Agent or the Issuing Lenders nor shall the Administrative Agent or any Issuing Lender have any responsibility should the contents or the written confirmation differ from the facsimile instructions acted upon by the Administrative Agent or any Issuing Lender.
(b) Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites such as Debt Domain or any similar platform) pursuant to procedures approved by the Administrative Agent; provided that (i) the foregoing shall not apply to notices to any Lender or the Issuing Lenders pursuant to Article II if such Lender or such Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication and (ii) in the case of notices and other communications posted to an Internet or intranet website (such as Debt Domain or any similar platform), notice thereof shall be sent to each intended recipient at its e-mail address that such notice or communication is available and identifying the website address therefor. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
SECTION 8.02. No Waivers.
No failure or delay by the Administrative Agent, any Issuing Lender or any Lender in exercising any right, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.03. Expenses; Taxes; Indemnification.
(a) Expenses. The Borrower agrees to pay on demand: (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Joint Lead Arrangers (including the reasonable fees, charges and disbursements of counsel), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any Issuing Lender in connection with the issuance, creation, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or any Issuing Lender (including the fees, charges and disbursements of any counsel), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Revolving Advances made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Revolving Advances or Letters of Credit.
(b) Taxes. The Borrower shall pay any and all transfer taxes, documentary taxes, recording taxes, stamp taxes, excise taxes or similar taxes or assessments or other charges payable or determined to be payable in connection with the execution, delivery, filing and recording of the Loan Documents and any other documents to be delivered under the Loan Documents (but excluding taxes imposed on the net income of any Lender), and agrees to save the Administrative Agent, each Issuing Lender and each Lender harmless from and against any and all liabilities with respect to or resulting from the Borrowers delay in paying or omission to pay such taxes.
(c) Indemnification; Waiver of Consequential Damages. The Borrower agrees to defend, indemnify, pay and hold harmless the Administrative Agent (in its capacity as such), each Issuing Lender (in its capacity as such), each Lender and each of the Joint Lead Arrangers and their Affiliates and their respective officers, directors, employees and agents (collectively, the Indemnitees) from and against any and all losses, obligations, penalties, actions, judgments, claims, damages, liabilities, disbursements and expenses (including reasonable attorneys fees and expenses, which may include the allocated cost of internal counsel, and settlement costs) of any kind or nature whatsoever, whether direct, indirect or consequential, and whether based on any federal, state or foreign laws, statutes, rules or regulations, on common law or equitable cause or on contract or otherwise, which may be imposed on, incurred by or asserted against the Indemnitees in any way related to or arising out of this Agreement or the other Loan Documents, or the transactions contemplated hereby or thereby or the use of proceeds of the Revolving Advances or Letters of Credit (collectively, Losses), except any such Losses (i) resulting from the gross negligence or willful misconduct of such Indemnitee or (ii) resulting from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitees obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction, provided that nothing in this Section 8.03(c) shall obligate the Borrower to pay the normal expenses of the Administrative Agent in the administration of this Agreement in the absence of pending or threatened litigation or other proceedings or the claims or threatened claims of others and then only to the extent arising therefrom.
To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Revolving Advance or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in this Section 8.03(c) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee.
(d) Breakage. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense reasonably incurred by it as a result of: (a) any continuation, conversion, payment or prepayment of any Eurodollar Rate Revolving Advance on a day other than the last day of the Interest Period for such Eurodollar Rate Revolving Advance (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Revolving Advance) to prepay, borrow, continue or convert any Eurodollar Rate Revolving Advance on the date or in the amount notified by the Borrower; or (c) the assignment of any Eurodollar Rate Revolving Advance other than on the last day of an Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.23; in each case, including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Eurodollar Rate Revolving Advance or from fees payable to terminate the deposits from which such funds were obtained but excluding any loss of anticipated profits. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
(e) Survival. The obligations of the Borrower under this Section 8.03 shall survive the termination of this Agreement, the termination of the Aggregate Commitments hereunder and payment of the Obligations.
SECTION 8.04. Sharing of Set-Offs. Each Lender agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Obligations owing to such Lender which is greater than the proportion received by any other Lender in respect of the aggregate amount of principal and interest due with respect to Obligations owing to such other Lender, the Lender receiving such proportionately greater payment shall purchase such participations in the LC Exposure of the other Lenders or Revolving Advances of the other Lenders, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the LC Exposure of the Lenders or Revolving Advances of the Lenders shall be shared by the Lenders pro rata; provided that nothing in this Section 8.04 shall impair the right of any Lender to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its LC Exposure or other Obligations owing to such Lender. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of any participation in any Revolving Advances or a participation in any LC Exposure, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 8.04 would apply, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 8.04 to share in the benefits of any recovery on such secured claim. The Borrower hereby authorizes BNPP and each other Lender, in accordance with the provisions of this Section 8.04, to so set-off and apply any and all such deposits held and other indebtedness owing by BNPP or such other Lender to or for the credit or the account of the Borrower and hereby authorizes BNPP and each such other Lender to permit such set-off and application by BNPP or such other Lender; provided that any such set-off rights shall not apply to the accounts or deposits of any of Borrowers foreign Subsidiaries.
SECTION 8.05. Amendments and Waivers. Any provision of this Agreement or any other Loan Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Lenders (and, if the rights or duties of the Administrative Agent or any Issuing Lender are affected thereby, by the Administrative Agent or each affected Issuing Lender, as the case may be); provided that no such amendment, waiver or modification shall: (i) extend or increase any Commitment of any Lender or subject any Lender to any additional obligation without the written consent of such Lender, (ii) reduce the principal of or rate or amount of interest on any Revolving Advance or any LC Disbursement or any fees without the written consent of each Lender directly affected thereby, (iii) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby, (iv) extend the terms of any Letter of Credit (other than as set forth below) without the written consent of each Lender directly affected thereby, (v) amend this Section 8.05 without the written consent of each Lender, (vi) change Section 2.14(c), Section 2.14(d) or Section 8.04 or any other provision of this Agreement in a manner that would alter the pro rata sharing or disbursement of payments required thereby without the written consent of each Lender, or (vii) modify the definition of Required Lenders or change the percentage of the Commitments or the number of Lenders which shall be required for the Lenders or any of them to take any action under this Section 8.05 or any other provision of this Agreement without the written consent of each Lender; provided further, that each of the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding the foregoing, so long as no Default or Event of Default has occurred and is continuing, (a) the Expiration Date of any Letter of Credit may be extended with the consent of the applicable Issuing Lender and the Borrower to a date not later than the seventh Business Day prior to the Maturity Date, (b) any Letter of Credit may be amended in any other manner with the consent of the applicable Issuing Lender and the Borrower so long as such Letter of Credit, as so amended, complies with Section 2.07 of this Agreement and (c) the Maturity Date of this Agreement may be extended pursuant to the requirements contained in Section 2.25 of this Agreement.
SECTION 8.06. Successors and Assigns.
(a) Binding Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights and Obligations under this Agreement without the consent of each Lender.
(b) Successors and Assigns. (i) Each Lender may assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments and the Revolving Advances and LC Exposure held by it); provided, however, that (A) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (B) the aggregate amount of the Commitments, Revolving Advances and LC Exposure of the assigning Lender being assigned pursuant to each such assignment shall (1) not be less than $5,000,000 and shall be an integral multiple of $1,000,000 or (2) be the remaining amount of such Lenders Commitments, Revolving Advances and LC Exposure, (C) each such assignment and proposed assignee is subject to the prior written consent of the Administrative Agent, the Issuing Lenders and, so long as no Default has occurred and is continuing, the Borrower (which consents shall not be unreasonably withheld); provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; provided further, however, that the consent of the Administrative Agent, and the Borrower shall not be required with respect to any such assignment by any Lender to (x) an Affiliate of such Lender, (y) an Approved Fund or (z) another Lender, (D) no such assignment shall be made to the Borrower or any of the Borrowers Affiliates or Subsidiaries, (E) no such
assignment shall be made to a natural person, (F) no such assignment may be made to a Competitor of the Borrower and (G) the assigning Lender shall pay or cause to be paid to the Administrative Agent a processing and recordation fee of $3,500 (except in the case of an assignment to an Affiliate of the assigning Lender). For each assignment, the parties to such assignment shall execute and deliver to the Administrative Agent for its acceptance and recording an Assignment and Assumption Agreement, together with such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment and Assumption Agreement may be required to deliver pursuant to Section 2.16. Upon the execution, delivery, acceptance and recording by the Administrative Agent, from and after the effective date specified in any Assignment and Assumption Agreement, the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Assumption Agreement, the assignor Lender thereunder shall be released from its obligations under the Loan Documents. From and after the effective date of any such assignment (1) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such assignment, have (in addition to any such rights and obligations theretofore held by it) the rights and obligations of a Lender hereunder, shall have Commitments equal to the Commitments assigned to it (in addition to any Commitments theretofore held by it), and shall have LC Exposure and Revolving Advances equal to the LC Exposure and Revolving Advances assigned to it (in addition to any LC Exposure and Revolving Advances theretofore held by it) and (2) the assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment, relinquish its rights (other than any rights which survive the termination of this Agreement under Section 8.03) and be released from its obligations under this Agreement (and, in the case of an assignment covering all or the remaining portion of an assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto). From time to time, at the request of any Lender, the Administrative Agent shall notify the Lenders of the current Commitments of all Lenders.
(c) Sub-Participations. Subject to Section 8.06(d), a Lender may at any time grant sub-participations to one or more banks or other entities in or to all or any part of its rights and obligations under this Agreement, and to the extent of any such sub-participation (unless otherwise stated therein and except as provided below) the purchaser of such sub-participation shall, to the fullest extent permitted by law, have the same rights and benefits hereunder as it would have if it were such Lender hereunder; provided, however, that (i) such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the Issuing Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement pursuant to which any Lender may grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder, including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such sub-participation agreement may provide that such Lender will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of Section 8.05 without the consent of the participant. Each Lender agrees to notify the Borrower and the Administrative Agent of the amount of each such sub-participation and the identity of each such sub-participant. Each Lender that sells a sub-participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each sub-participant and the principal amounts (and stated interest) of each sub-participants interest in the obligations under the Loan Documents (the Participant Register); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participants interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such sub-participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(d) Lender Treated as Owner. The Administrative Agent, the Issuing Lenders and the Borrower may, for all purposes of this Agreement, treat any Lender as the owner and holder of LC Exposure and Revolving Advances until written notice of assignment shall have been received by them.
(e) No Right to Greater Payment. No assignee, participant or other transferee of any Lenders rights shall be entitled to receive any greater payment under Section 2.17 than such Lender would have been entitled to receive with respect to the rights transferred, unless such transfer is made (i) with the Borrowers prior written consent (which consent shall not be unreasonably withheld) or by reason of the provisions of this Agreement requiring such Lender to designate a different Lending Office under certain circumstances, or (ii) at a time when the circumstances giving rise to such greater payment did not exist.
(f) Electronic Execution of Assignments. The words execution, signed, signature, and words of like import in any Assignment and Assumption Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(g) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Revolving Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction over such Lender; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(h) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Revolving Notes owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive absent manifest error, and, subject to Section 8.06(d), the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
SECTION 8.07. Collateral.
Each of the Lenders represents to the Administrative Agent and each of the other Lenders that it in good faith is not relying upon any margin stock (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement.
SECTION 8.08. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 8.09. Counterparts; Effectiveness.
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 8.10. Confidentiality.
In accordance with normal procedures regarding proprietary information supplied by customers, each of the Lenders agrees to keep confidential information relating to the Borrower or any Subsidiary received pursuant to or in connection with this Agreement and the transactions contemplated hereby (the Information), provided that nothing herein shall be construed to prevent the Administrative Agent, any Issuing Lender or any Lender from disclosing such Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over the Administrative Agent, such Issuing Lender or such Lender or any of their respective Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) which has been publicly disclosed (other than as a result of a breach of this Section), (iv) which has been lawfully obtained on a nonconfidential basis by the Administrative Agent, any Issuing Lender or any of the Lenders from a Person other than the Borrower, any Subsidiary, the Administrative Agent, any Issuing Lender or any other Lender, (v) to any participant in or assignee of, or prospective participant in or assignee of, all or any part of the rights and obligations of the Administrative Agent, such Issuing Lender or such Lender under this Agreement or to any actual or prospective counterparty (or its advisors) to any securitization, swap or derivative transaction relating to the Borrower, any Subsidiary, and the Obligations (provided that such participant, assignee or counterparty, or prospective participant, assignee or counterparty agrees to comply with the confidentiality requirements set forth in this Section 8.10), (vi) to the Administrative Agents, such Issuing Lenders or such Lenders independent auditors or outside legal counsel, (vii) to its Affiliates (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (viii) to any other party to this Agreement or (ix) to the extent required in connection with the exercise of any remedies, the enforcement of rights hereunder or any litigation relating to this Agreement to which the Administrative Agent, such Issuing Lender or such Lender is a party (and the Administrative Agent, such Issuing Lender or such Lender shall use its commercially reasonable efforts to give prior notice of any such disclosure under this clause (ix) to the extent permitted by applicable law; provided that the disclosing party shall have no liability to the Borrower as a result of any failure to provide such prior notice).
Each of the Administrative Agent, the Lenders and the Issuing Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable law, including Federal and state securities laws.
SECTION 8.11. Captions.
All Section headings are inserted for convenience of reference only and shall not be used in any way to modify, limit, construe or otherwise affect this Agreement.
SECTION 8.12. Severability.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 8.13. Integration.
All exhibits to a Loan Document shall be deemed to be a part thereof. The Loan Documents embody the entire agreement and understanding among the Borrower, the Administrative Agent, the Issuing Lenders and the Lenders with respect to the subject matter thereof and supersede all prior agreements and understandings among the Borrower, the Administrative Agent and the Lenders with respect to the subject matter thereof.
SECTION 8.14. Consent To Jurisdiction; Waiver Of Venue.
(a) THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
SECTION 8.15. Service of Process.
EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.01. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 8.16. No Advisory or Fiduciary Responsibility.
In connection with all aspects of each transaction contemplated hereby, the Borrower acknowledges and agrees, and acknowledges its Affiliates understanding, that: (i) the credit facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arms-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Joint Lead Arrangers and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, each of the Administrative Agent, each Joint Lead Arranger and each Lender is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or any Joint Lead Arranger or any Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, the Joint Lead Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent nor any Joint Lead Arranger nor any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, the Joint Lead Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Borrower hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Joint Lead Arrangers and the Lenders with respect to any breach or alleged breach of any advisory, agency or fiduciary duty.
SECTION 8.17. WAIVER OF TRIAL BY JURY.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.18. Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the Maximum Rate). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Revolving Advances or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 8.19. Judgment Currency.
(a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency under this Agreement or any other Loan Document, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used will be that at which in accordance with normal banking procedures the Administrative Agent could purchase Dollars with such other currency in New York, New York at 12:00 noon (New York City time) on the Business Day preceding that on which final judgment is given.
(b) The Borrowers obligations hereunder shall be required to be satisfied in Dollars. The obligation of the Borrower in respect of any sum due from it to any Credit Party hereunder will, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent the recipient thereof may in accordance with normal banking procedures purchase Dollars (after subtracting all expenses incurred in converting such currency to Dollars) with such other currency on the Business Day immediately following such receipt; if the Dollars so purchased are less than the sum originally due to the recipient in Dollars, the Borrower agrees, as a separate obligation and notwithstanding any judgment, to indemnify the recipient against such loss, and, if the Dollars so purchased exceed the sum originally due to the recipient in Dollars, the recipient agrees to remit to the Borrower such excess (after subtracting all expenses incurred in converting such currency to Dollars).
(c) The agreements in this Section 8.19 shall survive payment of any such judgment.
SECTION 8.20. USA Patriot Act. Each Lender that is subject to the Patriot Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the Patriot Act), it is required to obtain, verify and record information that identifies the Borrower and each Related Entity, which information includes the name and address of the Borrower and each Related Entity and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower and each Related Entity in accordance with the Patriot Act. The Borrower will, and will cause each of its Subsidiaries to, provide, to the extent commercially reasonable or required by requirements of law, such information and take such actions as
are reasonably requested by the Administrative Agent or any Lender to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.
SECTION 8.21. Termination of Commitments under Existing Facilities. Each of the signatories hereto that is also a party to the U.S.$1,200,000,000 Revolving Performance Letter of Credit Facility Agreement, dated as of December 14, 2010, among the Borrower, the lenders party thereto and BNP Paribas, as administrative agent, (as amended, the Existing Credit Agreement), hereby agrees that, as of the Closing Date, all of the commitments to extend credit under the Existing Credit Agreement will be terminated automatically and any and all required notices and notice periods in connection with such termination are hereby waived and of no further force and effect.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
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FLUOR CORPORATION, | |
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as the Borrower | |
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By: |
/s/ James M. Lucas |
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Name: |
James M. Lucas |
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Title: |
Senior Vice President and Treasurer |
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Address: | |
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6700 Las Colinas Boulevard | |
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Irving, Texas 75039 | |
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Attention: Jim M. Lucas | |
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Telecopier: (469) 398-7285 | |
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Electronic Mail: jim.lucas@fluor.com | |
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Website Address: www.fluor.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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BNP PARIBAS, as Administrative Agent, an Issuing Lender and individually as a Lender | |
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By: |
/s/ Jamie Dillon |
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Name: Jamie Dillon |
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Title: Managing Director |
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By: |
/s/ Joseph Mack |
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Name: Joseph Mack |
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Title: Vice President |
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BNP Paribas | |
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787 Seventh Avenue | |
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New York, NY 10019 | |
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Addresses for Notices to BNPP as Administrative Agent: | |
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BNP Paribas | |
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787 Seventh Avenue | |
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New York, NY 10019 | |
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Attention: Jamie Dillon | |
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Telecopier: (415) 291-0563 | |
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Electronic Mail: jamie.dillon@us.bnpparibas.com | |
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Attention: Joseph Mack | |
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Telecopier: (415) 291-0563 | |
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Electronic Mail: joseph.mack@us.bnpparibas.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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With copies to: |
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BNP Paribas |
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787 Seventh Avenue |
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New York, New York 10019 |
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Attention: Terri Knuth |
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Electronic Mail: |
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terri.knuth@us.bnpparibas.com |
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BNP Paribas |
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525 Washington Boulevard |
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Jersey City, New Jersey 07310 |
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Attention: Wendy Lau |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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nyls.agency.support@us.bnpparibas.com |
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Attention: Dina Wilson |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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nyls.agency.support@us.bnpparibas.com |
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Addresses for Notices to BNPP as an Issuing Lender and for Other Notices relating to Letters of Credit: |
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BNP Paribas |
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787 Seventh Avenue |
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New York, NY 10019 |
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Attention: Nicholas Rogers |
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Telecopier: (212) 841-3830 |
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Electronic Mail: nicholas.rogers@us.bnpparibas.com |
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Attention: Jamie Dillon |
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Telecopier: (415) 291-0563 |
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Electronic Mail: jamie.dillon@us.bnpparibas.com |
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Attention: Joseph Mack |
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Telecopier: (415) 291-0563 |
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Electronic Mail: joseph.mack@us.bnpparibas.com |
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Attention: Deborah Scholl |
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Telecopier: (312) 977-2234 |
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Electronic Mail: deborah.scholl@us.bnpparibas.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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With copies to: |
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BNP Paribas |
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787 Seventh Avenue |
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New York, New York 10019 |
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Attention: Terri Knuth |
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Electronic Mail: |
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terri.knuth@us.bnpparibas.com |
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BNP Paribas |
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525 Washington Boulevard |
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Jersey City, New Jersey 07310 |
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Attention: Wendy Lau |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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nyls.agency.support@us.bnpparibas.com |
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Attention: Dina Wilson |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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nyls.agency.support@us.bnpparibas.com |
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Attention: Maria Albuquerque |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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NYTFStandby@us.bnpparibas.com |
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Attention: Maritza Leung |
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Telecopier: (201) 850-4020 |
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Electronic Mail: |
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NYTFStandby@us.bnpparibas.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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BANK OF AMERICA, N.A., | |
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as Syndication Agent, as an Issuing Lender and individually as a Lender | |
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By: |
/s/ Arthur Ng |
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Name: Arthur Ng | |
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Title: Vice President | |
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Addresses for Notices: | |
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315 Montgomery Street, 6th Floor | |
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San Francisco, CA 94104 | |
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Attention: Arthur Ng | |
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Telecopier: 415-913-4771 | |
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Electronic Mail: Arthur.ng@baml.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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CITIBANK, N.A., | |
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as a Co-Documentation Agent and individually as a Lender | |
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By: |
/s/ Brian Reed |
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Name: Brian Reed | |
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Title: Vice President | |
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Address for Notices: | |
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1615 Brett Road | |
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Building III | |
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New Castle, DE 19720 | |
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Attention: Prabhakaran Loganathan | |
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Telecopier: 212-994-0847 | |
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Electronic Mail: gloriginationops@citigroup.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., | |
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as a Co-Documentation Agent, as an Issuing Lender and individually as a Lender | |
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By: |
/s/ Jason Krogh |
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Name: Jason Krogh | |
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Title: Authorized Signatory | |
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Address for Notices: | |
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1251 Avenue of the Americas | |
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New York, New York 10020-1104 | |
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Attention: Us Corporate Banking (Christina Schuschel) | |
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Telecopier: 212-782-6440 with a copy to 312-696-4535 | |
|
Electronic Mail: cschuschel@us.mufg.jp |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
THE BANK OF NOVA SCOTIA, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Diane Emanuel |
|
Name: Diane Emanuel | |
|
Title: Managing Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
650 West Georgia Street, Suite 1800 | |
|
Vancouver, British Columbia | |
|
V6B 4N7 | |
|
| |
|
Attention: Scott Nickel / Meadow Wu | |
|
Telecopier: 1-604-697-2200 | |
|
Electronic Mail: scott.nickel@scotiabank.com; | |
|
meadow.wu@scotiabank.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Blake Wright |
|
Name: Blake Wright | |
|
Title: Managing Director | |
|
|
|
|
By: |
/s/ James Austin |
|
Name: James Austin | |
|
Title: Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
227 W Monroe Street, Suite 3800 | |
|
Chicago, IL 60610 | |
|
| |
|
Attention: James Austin | |
|
Telecopier: 312-220-7333 | |
|
Electronic Mail: james.austin@ca-cib.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
ING BANK N.V., Dublin Branch, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Maurice Kenny |
|
Name: Maurice Kenny | |
|
Title: Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Block 4, Dundrum Town Centre | |
|
Sandyford Road, Dundrum | |
|
Dublin, A6 - Ireland | |
|
| |
|
Attention: Alan Maher | |
|
Telecopier: + 353 1638 40 72 | |
|
Electronic Mail: WLO.EXE.DFIL.CB.Location@ing.nl | |
|
|
|
|
By: |
/s/ Aidan Neill |
|
Name: Aidan Neill | |
|
Title: Director |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
LLOYDS BANK PLC, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Daven Popat |
|
Name: Daven Popat | |
|
Title: Senior Vice President P003 | |
|
|
|
|
By: |
/s/ Karen Weich |
|
Name: Karen Weich | |
|
Title: Vice President W011 | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
1095 Avenue of the Americas | |
|
35th Floor | |
|
New York, NY 10036 | |
|
| |
|
Attention: Noriko Daido | |
|
Telecopier: 212-930-5033 | |
|
Electronic Mail: NewYorkOperations@lbusa.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
STANDARD CHARTERED BANK, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Steven Aloupis |
|
Name: Steven Aloupis | |
|
Title: Managing Director | |
|
|
|
|
By: |
/s/ Hsing H. Huang |
|
Name: Hsing H. Huang | |
|
Title: Associate Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
1095 Avenue of the Americas | |
|
New York, NY 10036 | |
|
| |
|
Attention: Connie Au | |
|
Telecopier: 646-455-6531 | |
|
Electronic Mail: Connie.Au@sc.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
SUMITOMO MITSUI BANKING CORPORATION, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ David W. Kee |
|
Name: David W. Kee | |
|
Title: Managing Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Sumitomo Mitsui Banking Corporation | |
|
277 Park Avenue | |
|
New York, NY 10172 | |
|
| |
|
Attention: Kimberly Dawn Rosario | |
|
Telecopier: 212-224-5192 | |
|
Electronic Mail: Kimberly_Dawn_Rosario@smbcgroup.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Dhiren Desai |
|
Name: Dhiren Desai | |
|
Title: Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
550 California St., 14th Fl. | |
|
MAC A0112-145 | |
|
San Francisco, CA 94104 | |
|
| |
|
Attention: Dhiren Desai | |
|
Telecopier: 415-834-7622 | |
|
Electronic Mail: dhiren.d.desai@wellsfargo.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Robert Grillo |
|
Name: Robert Grillo | |
|
Title: Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
277 Park Avenue | |
|
New York, NY 10172 | |
|
| |
|
Attention: Geoffrey Pack | |
|
Telecopier: 212-801-9736 | |
|
Electronic Mail: Geoffrey.pack@anz.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
SANTANDER BANK, N.A., | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ William Maag |
|
Name: William Maag | |
|
Title: Senior Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
601 Penn Street | |
|
Reading, PA 19601 | |
|
| |
|
Attention: Jennifer Heil | |
|
Telecopier: 484-338-2831 | |
|
Electronic Mail: participations@santander.us |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
BARCLAYS BANK PLC, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Clare Morgan |
|
Name: Clare Morgan | |
|
Title: Assistant Vice President | |
|
|
|
|
By: |
/s/ Samuel Coward |
|
Name: Samuel Coward | |
|
Title: Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Barclays Bank PLC | |
|
1 Churchill Place | |
|
London E14 5HP | |
|
| |
|
Attention: Gail Erskine | |
|
Telecopier: | |
|
Electronic Mail: gail.erskine1@barclays.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
U.S. BANK NATIONAL ASSOCIATION, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Joe K. Dancy |
|
Name: Joe K. Dancy | |
|
Title: Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
214 North Tryon Street, 30th Floor | |
|
Charlotte, NC 28202 | |
|
| |
|
Attention: Joe Dancy | |
|
Telecopier: 704-335-2815 | |
|
Electronic Mail: joe.dancy@usbank.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
HSBC BANK USA, NATIONAL ASSOCIATION, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Brian B. Myers |
|
Name: Brian B. Myers | |
|
Title: SVP Corporate Banking | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
CTLA Loan Admin. | |
|
452 Fifth Avenue | |
|
New York, NY 10018 | |
|
| |
|
Attention: CTLA Loan Admin. | |
|
Telecopier: 847-793-3415 | |
|
Electronic Mail: CTLANY.LoanAdmin@us.hsbc.com | |
|
| |
|
Copy notices to: Brian Myers | |
|
Address: 6363 N. State Hwy, 161, Suite 125 | |
|
Irving, TX 75039 | |
|
Email: brian.b.myers@us.hsbc.com | |
|
Fax: 972-367-1050 |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
Mizuho Bank, Ltd., | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Donna DeMagistris |
|
Name: Donna DeMagistris | |
|
Title: Authorized Signatory | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Mizuho Bank, Ltd. | |
|
1800 Plaza Ten, Harborside Financial Center | |
|
Jersey City, NJ 07311 | |
|
| |
|
Attention: Pamela Chen | |
|
Telecopier: 201-626-9941 | |
|
Electronic Mail: Law_UsCorp1@mizuhocbus.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
GOLDMAN SACHS BANK USA, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Mark Walton |
|
Name: Mark Walton | |
|
Title: Authorized Signatory | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
30 Hudson Street, 5th Floor | |
|
Jersey City, NJ 07302 | |
|
| |
|
Attention: Michelle Latzoni | |
|
Electronic Mail: gsd.link@gs.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
INTESA SANPAOLO S.P.A., | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Manuela Insana |
|
Name: Manuela Insana | |
|
Title: VP & Relationship Manager | |
|
|
|
|
By: |
/s/ Gianluca Fiore |
|
Name: Gianluca Fiore | |
|
Title: Global Relationship Manager | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Intesa Sanpaolo S.p.A., New York Branch | |
|
One William Street | |
|
New York, NY 10004 | |
|
| |
|
Attention: Manuela Insana | |
|
Telecopier: 212-809-9780 | |
|
Electronic Mail: Manuela.insana@intesasanpaolo.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
WESTPAC BANKING CORPORATION, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Richard Yarnold |
|
Name: Richard Yarnold | |
|
Title: Director | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
Credit | |
|
| |
|
575 Fifth Ave., Level 39 | |
|
New York, NY 10017 | |
|
USA | |
|
| |
|
Attention: Richard Yarnold | |
|
Telecopier: n/a | |
|
Electronic Mail: ryarnold@westpac.com.au | |
|
jakemuller@westpac.com.au | |
|
| |
|
Administrative/Operations | |
|
| |
|
55 Market Street, Level 12 | |
|
Sydney, NSW, 2000 | |
|
Australia | |
|
| |
|
Attention: LoansAdmin | |
|
Telecopier: +44 207 621 7608 | |
|
Electronic Mail: loansadmin@westpac.com.au |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
|
REGIONS BANK, | |
|
as a Lender | |
|
| |
|
|
|
|
By: |
/s/ Richard M. Prewitt |
|
Name: Richard M. Prewitt | |
|
Title: Senior Vice President | |
|
| |
|
| |
|
Address for Notices: | |
|
| |
|
1717 McKinney Avenue | |
|
Suite 1100 | |
|
Dallas, TX 75202 | |
|
| |
|
Attention: Rick Prewitt | |
|
Telecopier: 469-608-2838 | |
|
Electronic Mail: rick.prewitt@regions.com |
Signature Page to
Revolving Loan And Letter Of Credit Facility Agreement
Schedule 1.01(a)
COMMITMENTS AND APPLICABLE PERCENTAGES
Lender |
|
Aggregate |
|
Amount of |
|
Applicable |
| ||
|
|
|
|
|
|
|
| ||
BNP Paribas |
|
$ |
121,250,000.00 |
|
$ |
53,492,647.06 |
|
7.132352941 |
% |
Bank of America, N.A. |
|
$ |
121,250,000.00 |
|
$ |
53,492,647.06 |
|
7.132352941 |
% |
Citibank, N.A. |
|
$ |
121,250,000.00 |
|
$ |
53,492,647.06 |
|
7.132352941 |
% |
The Bank of Tokyo-Mitsubishi UFJ, Ltd. |
|
$ |
121,250,000.00 |
|
$ |
53,492,647.06 |
|
7.132352941 |
% |
The Bank of Nova Scotia |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Credit Agricole Corporate & Investment Bank |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
ING Bank N.V., Dublin Branch |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Lloyds Bank plc |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Standard Chartered Bank |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Sumitomo Mitsui Banking Corporation |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Wells Fargo Bank, National Association |
|
$ |
85,000,000.00 |
|
$ |
37,500,000.00 |
|
5.000000000 |
% |
Australia and New Zealand Banking Group Limited |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
Santander Bank, N.A. |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
Barclays Bank plc |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
U.S. Bank National Association |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
HSBC Bank USA, National Association |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
Mizuho Bank, Ltd. |
|
$ |
70,000,000.00 |
|
$ |
30,882,352.94 |
|
4.117647059 |
% |
Goldman Sachs Bank USA |
|
$ |
50,000,000.00 |
|
$ |
22,058,823.53 |
|
2.941176471 |
% |
Intesa Sanpaolo S.p.A. |
|
$ |
50,000,000.00 |
|
$ |
22,058,823.53 |
|
2.941176471 |
% |
Westpac Banking Corporation |
|
$ |
50,000,000.00 |
|
$ |
22,058,823.53 |
|
2.941176471 |
% |
Regions Bank |
|
$ |
50,000,000.00 |
|
$ |
22,058,823.53 |
|
2.941176471 |
% |
Totals |
|
$ |
1,700,000,000.00 |
|
$ |
750,000,000.00 |
|
100.000000000 |
% |
Schedule 1.01(b)
EXISTING LETTERS OF CREDIT
Issuing |
|
LC No. |
|
Iss. Date |
|
Exp. |
|
Face Amount |
BNP Paribas |
|
04105538 |
|
7/25/11 |
|
10/14/14 |
|
USD 7,500,000.00 |
BNP Paribas |
|
04106307 |
|
8/25/11 |
|
9/10/15 |
|
CAD11,300,000.00 |
BNP Paribas |
|
04107457 |
|
10/4/11 |
|
10/4/14 |
|
USD 1,000,000.00 |
BNP Paribas |
|
04109014 |
|
12/1/11 |
|
12/15/14 |
|
USD 11,000,000.00 |
BNP Paribas |
|
04109049 |
|
12/2/11 |
|
12/15/14 |
|
USD 22,500,000.00 |
BNP Paribas |
|
04109583 |
|
12/21/11 |
|
11/15/14 |
|
USD 1,500,000.00 |
BNP Paribas |
|
04110364 |
|
1/25/12 |
|
1/31/15 |
|
AUD 55,000,000.00 |
BNP Paribas |
|
04111472 |
|
3/12/12 |
|
3/31/15 |
|
USD 3,100,000.00 |
BNP Paribas |
|
04111751 |
|
3/23/12 |
|
3/30/15 |
|
USD 55,647.00 |
BNP Paribas |
|
04112356 |
|
4/17/12 |
|
4/28/15 |
|
EUR 520,700.00 |
BNP Paribas |
|
04112358 |
|
4/17/12 |
|
4/28/15 |
|
EUR 520,700.00 |
BNP Paribas |
|
04113515 |
|
6/1/12 |
|
6/1/15 |
|
EUR 118,500.00 |
BNP Paribas |
|
04114447 |
|
7/13/12 |
|
6/1/15 |
|
USD 980,400.00 |
BNP Paribas |
|
04114725 |
|
7/27/12 |
|
7/27/15 |
|
USD 33,693,465.00 |
BNP Paribas |
|
04114823 |
|
7/31/12 |
|
7/31/14 |
|
USD 40,225,103.00 |
BNP Paribas |
|
04115599 |
|
9/4/12 |
|
9/4/15 |
|
USD 2,250,000.00 |
BNP Paribas |
|
04115850 |
|
9/13/12 |
|
9/13/14 |
|
EUR 742,884.40 |
BNP Paribas |
|
04116094 |
|
9/26/12 |
|
9/26/14 |
|
USD 19,500,000.00 |
BNP Paribas |
|
04117113 |
|
11/2/12 |
|
11/2/14 |
|
EUR 112,600.00 |
BNP Paribas |
|
04122711 |
|
7/1/13 |
|
8/15/14 |
|
USD 2,606,266.00 |
BNP Paribas |
|
04125043 |
|
10/15/13 |
|
4/4/15 |
|
USD 1,533,629.50 |
BNP Paribas |
|
04125630 |
|
11/12/13 |
|
11/12/14 |
|
USD 16,000,000.00 |
BNP Paribas |
|
04127338 |
|
1/29/14 |
|
1/31/15 |
|
USD 2,994,938.20 |
BNP Paribas |
|
04128798 |
|
4/7/14 |
|
8/31/16 |
|
USD 2,000,000.00 |
BNP Paribas |
|
04129215 |
|
4/30/14 |
|
4/29/15 |
|
CAD 10,000,000.00 |
BNP Paribas |
|
91907527 |
|
3/20/09 |
|
3/20/15 |
|
EUR 150,908.00 |
BNP Paribas |
|
91919711 |
|
1/7/11 |
|
7/30/14 |
|
USD 5,000,000.00 |
J. P. Morgan Chase Bank |
|
TFTS-349493 |
|
9/26/12 |
|
6/30/15 |
|
USD 1,000,000.00 |
Schedule 5.08
EXISTING LIENS
None.
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (this Assignment and Assumption) is dated as of the Effective Date set forth below and is entered into by and between [the][each]1 Assignor identified in item 1 below ([the][each, an] Assignor) and [the][each]2 Assignee identified in item 2 below ([the][each, an] Assignee). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3 hereunder are several and not joint.]4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the Credit Agreement), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below the interest in and to all of [the Assignors][the respective Assignors] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to that represents the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] identified below (including, without limitation, the Letters of Credit included in such facility) (all of the foregoing being referred to herein collectively as [the][an] Assigned Interest). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
1. Assignor[s]:
2. Assignee[s]:
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]
3. Borrower: Fluor Corporation
4. Administrative Agent: BNP Paribas as the administrative agent under the Credit Agreement
1 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
2 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
3 Select as appropriate.
4 Include bracketed language if there are either multiple Assignors or multiple Assignees.
5. Credit Agreement: Revolving Loan and Letter of Credit Facility Agreement, dated as of May 28, 2014, among Fluor Corporation, the Lenders from time to time party thereto and BNP Paribas, as Administrative Agent.
6. Assigned Interest:
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[7. Trade Date: ]9
Effective Date: , 201 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
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5 List each Assignor, as appropriate.
6 List each Assignee, as appropriate
7 Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
8 Set forth, to at least 12 decimals, as a percentage of the Commitments/Loans of all Lenders thereunder.
9 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.
[Consented to and]10 Accepted: |
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BNP PARIBAS, as |
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as Administrative Agent and as an Issuing Lender |
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[OTHER ISSUING LENDERS], as |
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10 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
[Consented to:]11 |
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FLUOR CORPORATION |
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11 To be added only if the consent of the Borrower and/or other parties (e.g. Issuing Lenders) is required by the terms of the Credit Agreement.
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
FLUOR CORPORATION
$1,700,000,000 REVOLVING LOAN AND LETTER OF CREDIT FACILITY AGREEMENT
DATED AS OF MAY 28, 2014
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of Credit Agreement or any other instrument or document delivered pursuant thereto, other than this Assignment and Assumption (herein collectively the Loan Documents) or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 8.06(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 8.06(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest on the basis of which it has made such analysis and decision, (v) it is not a Competitor of the Borrower and (vi) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the
Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption and the rights and obligations of the parties hereunder shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York), without regard to conflicts of laws principles. In the event of any inconsistency between this Assignment and Assumption and the Credit Agreement, the provisions of the Credit Agreement shall govern.
EXHIBIT C
FORM OF [ASSISTANT SECRETARYS] CERTIFICATE
[ ], 2014
The undersigned, the [Assistant Secretary] of Fluor Corporation, a Delaware corporation (the Borrower), hereby certifies pursuant to Section 3.01(a)(ii) of the Revolving Loan and Letter of Credit Facility Agreement (the Agreement; capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms as set forth in the Agreement), dated as of May 28, 2014, among the Borrower, the Lenders thereunder and BNP Paribas, as Administrative Agent, that I am the duly appointed [Assistant Secretary] of the Borrower, and further certify as follows:
1. Annexed hereto as Annex A is a true, complete and correct copy of all resolutions of the Board of Directors of the Borrower, relating to the Agreement and the transactions contemplated thereby, all of which resolutions are in full force and effect on the date hereof.
2. Annexed hereto as Annexes B and C, respectively, are true, complete and correct copies of the certificate of incorporation and the by-laws of the Borrower, including, without limitation, all amendments thereof to the date hereof, which certificate of incorporation and by-laws are presently in effect on and as of the date hereof.
3. The following persons are duly elected or appointed, as the case may be, and qualified officers of the Borrower holding the offices indicated opposite their respective names, and the signatures appearing opposite their respective names and offices are the genuine signatures of such persons:
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IN WITNESS WHEREOF, I have hereunto set my hand as of the date first above written.
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I, [ ], hereby certify that I am the duly elected or appointed, as the case may be, and qualified [ ] of the Borrower, as of the date hereof.
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ANNEX A
TO
[ASSISTANT SECRETARYS] CERTIFICATE
RESOLUTIONS
ANNEX B
TO
[ASSISTANT SECRETARYS] CERTIFICATE
CERTIFICATE OF INCORPORATION
ANNEX C
TO
[ASSISTANT SECRETARYS] CERTIFICATE
BYLAWS
EXHIBIT D
FORM OF NOTICE OF REVOLVING BORROWING
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[Date] |
BNP Paribas, as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
Attention: [ ]
BNP Paribas
787 Seventh Avenue
New York, NY 10019
Telephone: [ ]
Telecopier: [ ]
E-mail: [ ]
FLUOR CORPORATION
Ladies and Gentlemen:
The undersigned, Fluor Corporation, refers to the Revolving Loan and Letter of Credit Facility Agreement, dated as of May 28, 2014 (as amended, supplemented, amended and restated or otherwise modified from time to time, the Credit Agreement, the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders party thereto and BNP Paribas, as Administrative Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Revolving Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Revolving Borrowing (the Proposed Revolving Borrowing):
(a) The Business Day of the Proposed Revolving Borrowing is , 201 .
(b) The Revolving Advances comprising the Proposed Revolving Borrowing are [Base Rate Revolving Advances] [Eurodollar Rate Revolving Advances].
(c) The aggregate amount of the Proposed Revolving Borrowing is $ .
[(d) The initial Interest Period for each Eurodollar Rate Revolving Advance made as part of the Proposed Revolving Borrowing is month[s].]
(e) Funds are requested to be disbursed to the Borrowers following account:
Account No.
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Revolving Borrowing:
(i) there is no injunction, writ, preliminary restraining order or other order of any nature issued by any Governmental Authority in any respect directly affecting the transactions provided for herein and no action or proceeding by or before any Governmental Authority shall have been commenced and be pending or, to the knowledge of the Borrower, threatened, seeking to prevent or delay the transactions contemplated by the Loan Documents or challenging any other terms and provisions hereof or thereof or seeking any damages in connection therewith;
(ii) all representations and warranties of the Borrower contained in Article IV of the Credit Agreement (other than the representation and warranty of the Borrower contained in Section 4.04(b) hereof) are true (except that for purposes hereof, the representations and warranties contained in Section 4.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 5.01(a));
(iii) no event has occurred and is continuing, or would result from such Proposed Revolving Borrowing or from the application of the proceeds therefrom, that constitutes a Default;
(iv) no default or event of default under any project engineering, procurement, construction, maintenance and related activities and/or contracts of the Borrower or any of its Subsidiaries shall have occurred and be continuing which could reasonably be expected to materially and adversely affect the ability of the Borrower to perform its obligations under the Loan Documents; and
(v) both before and immediately after giving effect to the Proposed Revolving Borrowing, (x) the outstanding aggregate principal amount of all Revolving Advances plus the Dollar Equivalent of the total LC Exposure shall not exceed the Aggregate Commitments and (y) the outstanding aggregate principal amount of all Revolving Advances plus the Dollar Equivalent of the total LC Exposure in respect of Financial Letters of Credit shall not exceed the Revolving Facility Sublimit.
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EXHIBIT E
FORM OF NOTICE OF CONVERSION/CONTINUATION
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[Date] |
BNP Paribas, as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
Attention: [ ]
BNP Paribas
787 Seventh Avenue
New York, NY 10019
Telephone: [ ]
Telecopier: [ ]
E-mail: [ ]
FLUOR CORPORATION
Ladies and Gentlemen:
The undersigned, Fluor Corporation, refers to the Revolving Loan and Letter of Credit Facility Agreement, dated as of May 28, 2014 (as amended, supplemented, amended and restated or otherwise modified from time to time, the Credit Agreement, the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders party thereto and BNP Paribas, as Administrative Agent, hereby gives you notice, irrevocably, pursuant to Section 2.06 of the Credit Agreement that the undersigned hereby requests a conversion or continuation of Revolving Advances under the Credit Agreement, and in that connection sets forth below the information relating to such conversion or continuation:
(a) The Business Day of the conversion/continuation is , 20 .
(b) The aggregate amount of Revolving Advances being converted/continued is $ .
(c) Nature of conversion/continuation:
o Conversion of Base Rate Revolving Advances to Eurodollar Rate Revolving Advances
o Conversion of Eurodollar Rate Revolving Advances to Base Rate Revolving Advances
o Continuation of Eurodollar Rate Revolving Advances as such
(d) If Revolving Advances are being continued as or converted to Eurodollar Rate Revolving Advances, the duration of the new Interest Period that commences on the conversion/continuation date is month[s].
The undersigned hereby certifies that no event has occurred and is continuing, or would result from such conversion or continuation, that constitutes a Default.
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EXHIBIT F
FORM OF REVOLVING NOTE
, 20
FOR VALUE RECEIVED, the undersigned, FLUOR CORPORATION (the Borrower), hereby promises to pay (the Lender), on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of Revolving Advances (as defined in such Credit Agreement) due and payable by the Borrower to the Lender on the Maturity Date under that certain Revolving Loan and Letter of Credit Facility Agreement, dated as of May 28, 2014 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the Credit Agreement; the terms defined therein being used herein as therein defined), among the Borrower, certain Lenders party thereto and BNP Paribas, as Administrative Agent.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving Advance from the date of such Revolving Advance until such principal amount is paid in full, at such interest rates, and at such times as are specified in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in Federal or other immediately available funds at the Administrative Agents office specified in the Credit Agreement. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.
This Revolving Note (this Note) is one of the Revolving Notes referred to in the Credit Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part and other benefits as provided therein. Upon the occurrence and during the continuance of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. Revolving Advances made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender and the Administrative Agent in the ordinary course of business. In the event of any conflict between the accounts and records maintained by the Lender and the accounts and records maintained by the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Revolving Advances and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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Signature Page to
Revolving Note
REVOLVING ADVANCES AND PAYMENTS WITH RESPECT THERETO
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, David T. Seaton, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Fluor Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 31, 2014 |
By: |
/s/ David T. Seaton |
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David T. Seaton |
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Chairman and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Biggs C. Porter, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Fluor Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 31, 2014 |
By: |
/s/ Biggs C. Porter |
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Biggs C. Porter, |
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Executive Vice President and |
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Chief Financial Officer |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Fluor Corporation (the Company) on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, David T. Seaton, Chairman and Chief Executive Officer of the Company, certify, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
· the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
· the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: July 31, 2014 |
By: |
/s/ David T. Seaton |
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David T. Seaton, |
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Chairman and Chief Executive Officer |
A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Fluor Corporation (the Company) on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Biggs C. Porter, Executive Vice President and Chief Financial Officer of the Company, certify, for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
· the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
· the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: July 31, 2014 |
By: |
/s/ Biggs C. Porter |
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Biggs C. Porter, |
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Executive Vice President and |
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Chief Financial Officer |
A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Operating Information by Segment (Details 2) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2014
|
Jun. 30, 2013
|
Jun. 30, 2014
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Jun. 30, 2013
|
|
Reconciliation of total segment profit to earnings from continuing operations before taxes | ||||
Corporate general and administrative expense | $ (56,711,000) | $ (31,918,000) | $ (94,484,000) | $ (64,520,000) |
Interest income (expense), net | (3,300,000) | (2,200,000) | (6,400,000) | (5,200,000) |
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | 285,289,000 | 298,706,000 | 556,757,000 | 605,039,000 |
Reportable segments
|
||||
Reconciliation of total segment profit to earnings from continuing operations before taxes | ||||
Total segment profit | 313,100,000 | 288,000,000 | 581,200,000 | 581,600,000 |
Reconciling item | Attributable to Noncontrolling Interest:
|
||||
Reconciliation of total segment profit to earnings from continuing operations before taxes | ||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES | $ 32,200,000 | $ 44,800,000 | $ 76,400,000 | $ 93,100,000 |
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2014
|
Jun. 30, 2013
|
Jun. 30, 2014
|
Jun. 30, 2013
|
|
Noncontrolling Interests | ||||
Net earnings attributable to noncontrolling interests | $ 32,190 | $ 45,928 | $ 76,426 | $ 92,726 |
Distributions paid to noncontrolling interest holders | 44,284 | 45,809 | ||
Capital contribution from noncontrolling interests | $ 190 | $ 1,462 |
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