10-Q

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

For the quarterly period ended June 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number 001-31305

FOSTER WHEELER AG

(Exact name of registrant as specified in its charter)

Switzerland	98-0607469
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
80 Rue de Lausanne CH 1202 Geneva, Switzerland	1202
(Address of principal executive offices)	(Zip Code)

41 22 741 8000

(Registrant’s 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 ¨

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 ¨

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 the 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		Accelerated filer ¨
Non-accelerated filer ¨	(Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 107,867,980 registered shares (CHF 3.00 par value) were outstanding as of July 20, 2012.

FOSTER WHEELER AG

INDEX

Part I FINANCIAL INFORMATION			3
Item 1	–	Financial Statements (Unaudited):	3
		Consolidated Statement of Operations for the Quarters and Six Months Ended June 30, 2012 and 2011	3
		Consolidated Statement of Comprehensive Income for the Quarters and Six Months Ended June 30, 2012 and 2011	4
		Consolidated Balance Sheet as of June 30, 2012 and December 31, 2011	5
		Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2012 and 2011	6
		Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2012 and 2011	7
		Notes to Consolidated Financial Statements	8
Item 2	–	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3	–	Quantitative and Qualitative Disclosures about Market Risk	52
Item 4	–	Controls and Procedures	52
Part II OTHER INFORMATION			52
Item 1	–	Legal Proceedings	52
Item 1A	–	Risk Factors	52
Item 2	–	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3	–	Defaults Upon Senior Securities	53
Item 4	–	Mine Safety Disclosures	53
Item 5	–	Other Information	53
Item 6	–	Exhibits	54
Signatures			55

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands of dollars, except per share amounts)

(unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Operating revenues	$	943,026		$	1,183,878		$	1,876,122		$	2,220,130
Cost of operating revenues		803,475			1,030,266			1,597,239			1,967,263
Contract profit		139,551			153,612			278,883			252,867
Selling, general and administrative expenses		85,427			80,402			168,708			154,243
Other income, net		(10,571	)		(21,390	)		(18,755	)		(35,656	)
Other deductions, net		12,274			6,721			16,338			12,838
Interest income		(2,949	)		(4,428	)		(6,118	)		(7,703	)
Interest expense		4,249			3,427			7,665			7,306
Net asbestos-related provision		3,713			2,000			5,710			2,400
Income before income taxes		47,408			86,880			105,335			119,439
Provision for income taxes		12,291			19,044			27,175			26,327
Net income		35,117			67,836			78,160			93,112
Less: Net income attributable to noncontrolling interests		4,258			4,527			6,655			6,832
Net income attributable to Foster Wheeler AG	$	30,859		$	63,309		$	71,505		$	86,280
Earnings per share (see Note 1):
Basic	$	0.29		$	0.52		$	0.66		$	0.70
Diluted	$	0.29		$	0.52		$	0.66		$	0.70

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in thousands of dollars)

(unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net income	$	35,117		$	67,836		$	78,160		$	93,112
Other comprehensive (loss)/income, net of tax:
Foreign currency translation adjustments		(23,592	)		6,992			(9,320	)		28,222
Cash flow hedges adjustments, net of tax:
Unrealized (loss)/gain		(521	)		(898	)		(1,798	)		217
Reclassification for losses included in net income		472			888			1,038			1,745
Total cash flow hedges adjustments, net of tax		(49	)		(10	)		(760	)		1,962
Pension and other postretirement benefits adjustments, net of tax:
Net actuarial loss		-			(2,664	)		-			(2,664	)
Prior service credit		-			35,561			-			35,561
Amortization included in net periodic pension cost		2,886			1,820			5,593			4,085
Total pension and other postretirement benefits adjustments, net of tax		2,886			34,717			5,593			36,982
Other comprehensive (loss)/income, net of tax		(20,755	)		41,699			(4,487	)		67,166
Comprehensive income		14,362			109,535			73,673			160,278
Less: Comprehensive income attributable to noncontrolling interests		2,701			4,821			6,423			7,279
Comprehensive income attributable to Foster Wheeler AG	$	11,661		$	104,714		$	67,250		$	152,999

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in thousands of dollars, except share data and per share amounts)

(unaudited)

	June 30, 2012			December 31, 2011
ASSETS
Current Assets:
Cash and cash equivalents	$	767,259		$	718,049
Short-term investments		-			1,294
Accounts and notes receivable, net:
Trade		529,690			427,984
Other		87,446			97,495
Contracts in process		212,209			166,648
Prepaid, deferred and refundable income taxes		63,812			62,616
Other current assets		41,397			49,101
Total current assets		1,701,813			1,523,187
Land, buildings and equipment, net		333,519			341,987
Restricted cash		35,384			44,094
Notes and accounts receivable - long-term		6,453			6,210
Investments in and advances to unconsolidated affiliates		193,474			211,109
Goodwill		110,904			112,120
Other intangible assets, net		67,432			74,386
Asbestos-related insurance recovery receivable		141,952			157,127
Other assets		123,791			118,178
Deferred tax assets		26,404			25,482
TOTAL ASSETS	$	2,741,126		$	2,613,880
LIABILITIES, TEMPORARY EQUITY AND EQUITY
Current Liabilities:
Current installments on long-term debt	$	12,610		$	12,683
Accounts payable		343,758			250,821
Accrued expenses		222,662			237,089
Billings in excess of costs and estimated earnings on uncompleted contracts		571,591			550,746
Income taxes payable		34,821			39,645
Total current liabilities		1,185,442			1,090,984
Long-term debt		127,578			136,428
Deferred tax liabilities		44,502			44,622
Pension, postretirement and other employee benefits		165,253			171,065
Asbestos-related liability		253,713			269,520
Other long-term liabilities		161,748			160,596
Commitments and contingencies
TOTAL LIABILITIES		1,938,236			1,873,215
Temporary Equity:
Non-vested share-based compensation awards subject to redemption		8,369			4,993
TOTAL TEMPORARY EQUITY		8,369			4,993
Equity:
Registered shares:
CHF 3.00 par value; authorized: 187,989,987 shares and 187,847,379 shares, respectively; conditionally authorized: 59,639,130 shares and 59,781,738 shares, respectively; issued: 125,672,031 shares and 125,529,423 shares, respectively; outstanding: 107,867,511 shares and 108,289,003 shares, respectively.		321,646			321,181
Paid-in capital		613,453			606,053
Retained earnings		771,476			699,971
Accumulated other comprehensive loss		(534,323	)		(530,068	)
Treasury shares (outstanding: 17,804,520 shares and 17,240,420 shares, respectively)		(420,345	)		(409,390	)
TOTAL FOSTER WHEELER AG SHAREHOLDERS’ EQUITY		751,907			687,747
Noncontrolling interests		42,614			47,925
TOTAL EQUITY		794,521			735,672
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY	$	2,741,126		$	2,613,880

See notes to consolidated financial statements.

5

FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands of dollars)

(unaudited)

	Registered Shares		Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Shares			Total Foster Wheeler AG Shareholders’ Equity			Noncontrolling Interests			Total Equity
Six Months Ended June 30, 2011:
Balance at December 31, 2010	$	334,052	$	659,739 $			537,588	$	(464,504	)	$	(99,182	)	$	967,693		$	47,656		$	1,015,349
Net income		-		-			86,280		-			-			86,280			6,832			93,112
Other comprehensive income, net of tax		-		-			-		66,719			-			66,719			447			67,166
Issuance of registered shares upon exercise of stock options		1,308		9,444			-		-			-			10,752			-			10,752
Issuance of registered shares upon vesting of restricted awards		357		(357	)		-		-			-			-			-			-
Distributions to noncontrolling interests		-		-			-		-			-			-			(8,672	)		(8,672	)
Capital contribution from noncontrolling interests		-		-			-		-			-			-			125			125
Share-based compensation expense		-		7,890			-		-			-			7,890			-			7,890
Excess tax benefit related to share-based compensation		-		3			-		-			-			3			-			3
Repurchase of registered shares		-		-			-		-			(160,086	)		(160,086	)		-			(160,086	)
Balance at June 30, 2011	$	335,717	$	676,719		$	623,868	$	(397,785	)	$	(259,268	)	$	979,251		$	46,388		$	1,025,639
Six Months Ended June 30, 2012:
Balance at December 31, 2011	$	321,181	$	606,053		$	699,971	$	(530,068	)	$	(409,390	)	$	687,747		$	47,925		$	735,672
Net income		-		-			71,505		-			-			71,505			6,655			78,160
Other comprehensive loss, net of tax		-		-			-		(4,255	)		-			(4,255	)		(232	)		(4,487	)
Issuance of registered shares upon exercise of stock options		126		477			-		-			-			603			-			603
Issuance of registered shares upon vesting of restricted awards		339		(339	)		-		-			-			-			-			-
Distributions to noncontrolling interests		-		-			-		-			-			-			(11,734	)		(11,734	)
Share-based compensation expense		-		7,319			-		-			-			7,319			-			7,319
Excess tax shortfall related to share-based compensation		-		(57	)		-		-			-			(57	)		-			(57	)
Repurchase of registered shares		-		-			-		-			(10,955	)		(10,955	)		-			(10,955	)
Balance at June 30, 2012	$	321,646	$	613,453		$	771,476	$	(534,323	)	$	(420,345	)	$	751,907		$	42,614		$	794,521

See notes to consolidated financial statements.

6

FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands of dollars)

(unaudited)

	Six Months Ended June 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	78,160		$	93,112
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization		25,796			25,177
Net asbestos-related provision		5,710			2,400
Share-based compensation expense		10,694			10,092
Excess tax shortfall/(benefit) related to share-based compensation		57			(3	)
Deferred income tax provision/(benefit)		1,830			(4,518	)
Gain on sale of assets		(134	)		(816	)
Dividends, net of equity in earnings of unconsolidated affiliates		10,511			16,152
Changes in assets and liabilities:
(Increase)/decrease in receivables		(107,372	)		49,581
Net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts		(22,288	)		(25,310	)
Increase in accounts payable and accrued expenses		93,758			7,462
Net change in other current assets and liabilities		(1,895	)		(5,506	)
Net change in other long-term assets and liabilities		(14,283	)		(28,859	)
Net cash provided by operating activities		80,544			138,964
CASH FLOWS FROM INVESTING ACTIVITIES
Change in restricted cash		7,854			(12,112	)
Capital expenditures		(16,222	)		(17,277	)
Proceeds from sale of assets		289			1,327
Return of investment from unconsolidated affiliates		6,207			3
Investments in and advances to unconsolidated affiliates		(1,090	)		-
Proceeds from sale of short-term investments		1,255			-
Net cash used in investing activities		(1,707	)		(28,059	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of shares		(10,955	)		(160,086	)
Distributions to noncontrolling interests		(11,734	)		(8,672	)
Proceeds from capital contribution from noncontrolling interests		-			125
Proceeds from stock options exercised		603			11,772
Excess tax (shortfall)/benefit related to share-based compensation		(57	)		3
Repayment of debt and capital lease obligations		(6,474	)		(7,225	)
Net cash used in financing activities		(28,617	)		(164,083	)
Effect of exchange rate changes on cash and cash equivalents		(1,010	)		33,248
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		49,210			(19,930	)
Cash and cash equivalents at beginning of year		718,049			1,057,163
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	767,259		$	1,037,233

See notes to consolidated financial statements.

7

FOSTER WHEELER AG AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands of dollars, except share data and per share amounts)

(unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation — The fiscal year of Foster Wheeler AG ends on December 31 of each calendar year. Foster Wheeler AG’s fiscal quarters end on the last day of March, June and September. The fiscal years of our non-U.S. operations are the same as the parent’s. The fiscal year of our U.S. operations is the 52- or 53-week annual accounting period ending on the last Friday in December.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The consolidated financial statements and notes are presented in accordance with the requirements of Form 10-Q and do not contain certain information included in our Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), filed with the Securities and Exchange Commission on February 23, 2012. The consolidated balance sheet as of December 31, 2011 was derived from the audited financial statements included in our 2011 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America for annual consolidated financial statements.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The consolidated financial statements include the accounts of Foster Wheeler AG and all significant U.S. and non-U.S. subsidiaries, as well as certain entities in which we have a controlling interest. Intercompany transactions and balances have been eliminated. See “—Variable Interest Entities” below for further information related to the consolidation of variable interest entities.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Changes in estimates are reflected in the periods in which they become known. Significant estimates are used in accounting for long-term contracts including estimates of total costs, progress toward completion and customer and vendor claims, employee benefit plan obligations and share-based compensation plans. In addition, we also use estimates when accounting for uncertain tax positions and deferred taxes, asbestos liabilities and expected recoveries and when assessing goodwill for impairment, among others.

Revenue Recognition on Long-Term Contracts — Revenues and profits on long-term contracts are recorded under the percentage-of-completion method.

Progress towards completion on fixed-price contracts is measured based on physical completion of individual tasks for all contracts with a value of $5,000 or greater. For contracts with a value less than $5,000, progress toward completion is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method).

Progress towards completion on cost-reimbursable contracts is measured based on the ratio of quantities expended to total forecasted quantities, typically man-hours. Incentives are also recognized on a percentage-of-completion basis when the realization of an incentive is assessed as probable. We include flow-through costs consisting of materials, equipment or subcontractor services as both operating revenues and cost of operating revenues on cost-reimbursable contracts when we have overall responsibility as the contractor for the engineering specifications and procurement or procurement services for such costs. There is no contract profit impact of flow-through costs as they are included in both operating revenues and cost of operating revenues.

Contracts in process are stated at cost, increased for profits recorded on the completed effort, less billings to the customer and progress payments on uncompleted contracts. A full provision for loss contracts is made at the time the loss becomes probable regardless of the stage of completion.

8

At any point, we have numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. These estimates may be revised as additional information becomes available or as specific project circumstances change. We review all of our material contracts on a monthly basis and revise our estimates as appropriate for developments such as earning project incentive bonuses, incurring or expecting to incur contractual liquidated damages for performance or schedule issues, providing services and purchasing third-party materials and equipment at costs differing from those previously estimated and testing completed facilities, which, in turn, eliminates or confirms completion and warranty-related costs. Project incentives are recognized when it is probable they will be earned. Project incentives are frequently tied to cost, schedule and/or safety targets and, therefore, tend to be earned late in a project’s life cycle.

Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit. In the period in which a change in estimate is recognized, the cumulative impact of that change is recorded based on progress achieved through the period of change. The following table summarizes the number of separate projects that experienced final estimated contract profit revisions with an impact on contract profit in excess of $1,000 relating to the revaluation of work performed in prior periods:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Number of separate projects		9		17		17		20
Net increase in contract profit from the regular revaluation of final estimated contract profit revisions	$	8,200	$	15,800	$	31,600	$	13,500

The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global Engineering and Construction Group (“Global E&C Group”) and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

Please see Note 11 for further information related to changes in final estimated contract profit and the impact on business segment results.

Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, disputed or unapproved change orders as to both scope and price or other causes of unanticipated additional costs. We record claims as additional contract revenue if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. These two requirements are satisfied by the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in our performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim may be recorded only to the extent that contract costs relating to the claim have been incurred. Costs attributable to claims are treated as costs of contract performance as incurred and are recorded in contracts in process. Our consolidated financial statements included commercial claims of $8,600 and $6,700 as of June 30, 2012 and December 31, 2011, respectively, while substantially all costs had been incurred as of each respective date.

In certain circumstances, we may defer pre-contract costs when it is probable that these costs will be recovered under a future contract. Such deferred costs would then be included in contract costs upon execution of the anticipated contract. Deferred pre-contract costs were inconsequential as of June 30, 2012 and December 31, 2011.

Certain special-purpose subsidiaries in our Global Power Group business segment are reimbursed by customers for their costs of building and operating certain facilities over the lives of the corresponding service contracts. Depending on the specific legal rights and obligations under these arrangements, in some cases those reimbursements are treated as operating revenues at gross value and other cases as a reduction of cost.

9

Trade Accounts Receivable — Trade accounts receivable represent amounts billed to customers. In accordance with terms under our long-term contracts, our customers may withhold certain percentages of such billings until completion and acceptance of the work performed, which we refer to as retention receivables. Final payment of retention receivables might not be received within a one-year period. In conformity with industry practice, however, the full amount of accounts receivable, including such amounts withheld, are included in current assets on the consolidated balance sheet. We have not recorded a provision for the outstanding retention receivable balances as of June 30, 2012 and December 31, 2011.

Variable Interest Entities — We sometimes form separate legal entities such as corporations, partnerships and limited liability companies in connection with the execution of a single contract or project. Upon formation of each separate legal entity, we perform an evaluation to determine whether the new entity is a variable interest entity, or VIE, and whether we are the primary beneficiary of the new entity, which would require us to consolidate the new entity in our financial results. We reassess our initial determination on whether the entity is a VIE upon the occurrence of certain events and whether we are the primary beneficiary as outlined in current accounting guidelines. If the entity is not a VIE, we determine the accounting for the entity under the voting interest accounting guidelines.

An entity is determined to be a VIE if either (a) the total equity investment is not sufficient for the entity to finance its own activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (such as the ability to make decisions through voting or other rights or the obligation to absorb losses or the right to receive benefits), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb losses of the entity and/or their rights to receive benefits of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

As of June 30, 2012 and December 31, 2011, we participated in certain entities determined to be VIEs, including a gas-fired cogeneration facility in Martinez, California and a refinery/electric power generation project in Chile. We consolidate the operations of the Martinez project while we record our participation in the project in Chile on the equity method of accounting.

Please see Note 3 for further information regarding our participation in these projects.

Fair Value Measurements — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board Accounting Standards Codification, or FASB ASC, 820-10 defines fair value, establishes a three level fair value hierarchy that prioritizes the inputs used to measure fair value and provides guidance on required disclosures about fair value measurements. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Our financial assets and liabilities that are recorded at fair value on a recurring basis consist primarily of the assets or liabilities arising from derivative financial instruments and defined benefit pension plan assets. See Note 8 for further information regarding our derivative financial instruments.

The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate fair value:

Financial instruments valued independent of the fair value hierarchy:

• Cash, Cash Equivalents and Restricted Cash — The carrying value of our cash, cash equivalents and restricted cash approximates fair value because of the demand nature of many of our deposits or short-term maturity of these instruments.

Financial instruments valued within the fair value hierarchy:

• Short-term Investments — Short-term investments primarily consist of deposits with maturities in excess of three months but less than one year. Short-term investments are carried at cost plus accrued interest, which approximates fair value.

• Long-term Debt — We estimate the fair value of our long-term debt (including current installments) based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities using level 2 inputs.

• Foreign Currency Forward Contracts — We estimate the fair value of foreign currency forward contracts by obtaining quotes from financial institutions or market transactions in either the listed or over-the-counter markets, which we further corroborate with observable market data using level 2 inputs.

10

• Interest Rate Swaps — We estimate the fair value of our interest rate swaps based on quotes obtained from financial institutions, which we further corroborate with observable market data using level 2 inputs.

• Defined Benefit Pension Plan Assets — We estimate the fair value of investments in equity securities at each year-end based on quotes obtained from financial institutions. The fair value of investments in commingled funds, invested primarily in debt and equity securities, is based on the net asset values communicated by the respective asset manager. We further corroborate the above valuations with observable market data using level 1 and 2 inputs. Additionally, we hold investments in private investment funds that are valued at net asset value as communicated by the asset manager using level 3 unobservable market data inputs.

Retirement of Shares under Share Repurchase Program — Under Swiss law, the cancellation of shares previously repurchased under our share repurchase program must be approved by our shareholders. Repurchased shares remain as treasury shares on our balance sheet until cancellation.

Any repurchases will be made at our discretion in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors. The program does not obligate us to acquire any particular number of shares. The program has no expiration date and may be suspended or discontinued at any time.

All treasury shares are carried at cost on the consolidated balance sheet until the cancellation of the shares has been approved by our shareholders and the cancellation is registered with the commercial register of the Canton of Zug in Switzerland. Upon the effectiveness of the cancellation of the shares, the cost of the shares cancelled will be removed from treasury shares on the consolidated balance sheet, the par value of the cancelled shares will be removed from registered shares on the consolidated balance sheet, and the excess of the cost of the treasury shares above par value will be removed from paid-in capital on the consolidated balance sheet.

Once repurchased, treasury shares are no longer considered outstanding, which results in a reduction to the weighted-average number of shares outstanding during the reporting period when calculating earnings per share, as described below.

Earnings per Share — Basic earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the weighted-average number of shares outstanding during the reporting period.

Diluted earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the combination of the weighted-average number of shares outstanding during the reporting period and the impact of dilutive securities, if any, such as outstanding stock options and the non-vested portion of restricted stock units and performance-based restricted stock units (collectively, “restricted awards”) to the extent such securities are dilutive.

In profitable periods, outstanding stock options have a dilutive effect under the treasury stock method when the average share price for the period exceeds the assumed proceeds from the exercise of the option. The assumed proceeds include the exercise price, compensation cost, if any, for future service that has not yet been recognized in the consolidated statement of operations, and any tax benefits that would be recorded in paid-in capital when the option is exercised. Under the treasury stock method, the assumed proceeds are assumed to be used to repurchase shares in the current period. The dilutive impact of the non-vested portion of restricted awards is determined using the treasury stock method, but the proceeds include only the unrecognized compensation cost and tax benefits as assumed proceeds.

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The computations of basic and diluted earnings per share were as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income attributable to Foster Wheeler AG	$	30,859	$	63,309	$	71,505	$	86,280
Basic weighted-average number of shares outstanding		107,840,679		122,331,265		107,807,441		123,499,174
Effect of dilutive securities		2,576		515,740		60,153		637,716
Diluted weighted-average number of shares outstanding		107,843,255		122,847,005		107,867,594		124,136,890
Earnings per share:
Basic	$	0.29	$	0.52	$	0.66	$	0.70
Diluted	$	0.29	$	0.52	$	0.66	$	0.70

The following table summarizes options and restricted awards not included in the calculation of diluted earnings per share as the assumed proceeds from those options and restricted awards, on a per share basis, were greater than the average share price for the period, which would result in an antidilutive effect on diluted earnings per share:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Options not included in the computation of diluted earnings per share		2,850,267		1,347,442		2,021,500		1,340,549
Restricted awards not included in the computation of diluted earnings per share		930,884		-		-		-

2. Business Combinations

In December 2011, we acquired the stock of Graf-Wulff GmbH, a company based in Germany, for a purchase price of approximately €22,300 (approximately $29,400 at the exchange rate on the date of the acquisition), net of cash acquired. The acquired company designs, manufactures and installs equipment which utilizes circulating dry ash flue gas scrubbing technology for all types of steam generators in the power and industrial sectors. Our consolidated balance sheet as of December 31, 2011 filed in our 2011 Form 10-K included a preliminary purchase price allocation for this acquisition. As a result of finalizing our valuation of net assets acquired, we have increased the goodwill balance as of December 31, 2011 which is presented on our consolidated balance sheet and related financial statement notes for the period and six months ended June 30, 2012. The increase in goodwill was primarily attributable to an increased valuation of billings in excess of costs and estimated earnings on uncompleted contracts and a deferred tax liability related to intangible assets. The purchase price allocation and pro forma impact assuming the acquisition had occurred as of the beginning of 2011 were not significant to our consolidated financial statements. This company’s financial results are included within our Global Power Group business segment.

3. Investments

Investment in Unconsolidated Affiliates

We own a noncontrolling interest in two electric power generation projects, one waste-to-energy project and one wind farm project, which are all located in Italy, and in a refinery/electric power generation project, which is located in Chile. We also own a 50% noncontrolling interest in a project in Italy which generates earnings from royalty payments linked to the price of natural gas. Based on the outstanding equity interests of these entities, we own 41.65% of each of the two electric power generation projects in Italy, 39% of the waste-to-energy project and 50% of the wind farm project. We have a notional 85% equity interest in the project in Chile; however, we are not the primary beneficiary as a result of participation rights held by the minority shareholder. In determining that we are not the primary beneficiary, we considered the minority shareholder’s right to approve activities of the project that most significantly impact the project’s economic performance which include the right to approve or reject the annual financial (capital and operating) budget and the annual operating plan, the right to approve or reject the appointment of the general manager and senior management, and approval rights with respect to capital expenditures beyond those included in the annual budget.

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On February 27, 2010, an earthquake occurred off the coast of Chile that caused significant damage to our unconsolidated affiliate’s facility in Chile. As a result of the damage, the project’s facility suspended normal operating activities on that date and subsequently filed a claim with its insurance carrier for property damage and business interruption recoveries. Based on the assessments and cost estimate, as well as correspondence received from the insurance carrier, we expect the property damage and business interruption insurance recoveries to be sufficient to cover the costs of repairing the facility and to substantially compensate our unconsolidated affiliate for the loss of profits while the facility suspended normal operating activities. Our unconsolidated affiliate’s receivable related to the remaining balance under their property damage and business interruption insurance recovery assessment was approximately $68,100 as of June 30, 2012, which is included in current assets in the table below. The facility achieved normal operating activities in the third quarter of 2011.

The summarized financial information presented below for the project in Chile includes an estimated recovery under a property damage insurance policy sufficient to cover the costs that have been incurred to repair the facility and an estimated recovery under a business interruption insurance policy for fixed costs along with an estimated recovery for lost profits during the period that the facility suspended normal operating activities. In accordance with authoritative accounting guidance on business interruption insurance, the project recorded an estimated recovery for lost profits as substantially all contingencies related to the insurance claim had been resolved as of the third quarter of 2010.

We account for these investments in Italy and Chile under the equity method. The following is summarized financial information for these entities (each as a whole) based on where the projects are located:

	June 30, 2012				December 31, 2011
	Italy		Chile		Italy		Chile
Balance Sheet Data:
Current assets	$	149,800	$	114,256	$	168,501	$	130,880
Other assets (primarily buildings and equipment)		350,636		103,357		366,414		108,165
Current liabilities		95,272		34,626		82,164		55,590
Other liabilities (primarily long-term debt)		217,172		48,636		232,356		45,105
Net assets		187,992		134,351		220,395		138,350

	Quarter Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
	Italy		Chile		Italy		Chile		Italy		Chile		Italy		Chile
Income Statement Data:
Total revenues	$	45,989	$	26,089	$	53,307	$	27,512	$	82,740	$	50,890	$	82,724	$	48,329
Gross profit		12,217		14,776		19,658		17,726		10,452		28,677		31,725		17,855
Income before income taxes		9,717		14,198		16,667		19,699		5,470		28,396		25,923		34,465
Net earnings		5,996		11,571		10,306		13,914		3,647		23,367		15,953		25,728

Our investment in these unconsolidated affiliates is recorded within investments in and advances to unconsolidated affiliates on the consolidated balance sheet and our equity in the net earnings of these unconsolidated affiliates is recorded within other income, net on the consolidated statement of operations. The investments and equity earnings of our unconsolidated affiliates in Italy and Chile are included in our Global E&C Group and Global Power Group business segments, respectively.

Our consolidated financial statements reflect the following amounts related to our unconsolidated affiliates in Italy and Chile:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Equity in the net earnings of unconsolidated affiliates	$	8,911	$	15,586	$	15,819	$	28,079
Distributions from unconsolidated affiliates	$	23,145	$	33,733	$	31,917	$	43,410

	June 30, 2012		December 31, 2011
Total investment in unconsolidated affiliates	$	176,745	$	195,033

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Our equity earnings from our projects in Italy were $2,790 and $4,000 in the second quarter of 2012 and 2011, respectively, and were $2,428 and $6,606 in the first six months of 2012 and 2011, respectively. Our equity earnings in the first six months of 2012 were unfavorably impacted by the results of one of our projects in Italy that recorded a charge to establish a reserve against its receivable balance for emission rights earned prior to 2012 and experienced decreased earnings as a result of a facility maintenance shutdown during the first quarter of 2012.

Our equity earnings from our project in Chile were $6,121 and $11,586 in the second quarter of 2012 and 2011, respectively, and were $13,391 and $21,473 in the first six months of 2012 and 2011, respectively. The decrease in equity earnings in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, included the impact of lower marginal rates in 2012 for electrical power generation.

Equity earnings in the quarter and six months ended June 30, 2011 included our equity interest in the after tax estimated recovery under our project in Chile’s business interruption insurance policy, as described above.

We have guaranteed certain performance obligations of our project in Chile. We have a contingent obligation, which is measured annually based on the operating results of our project in Chile for the preceding year and is shared equally with our minority interest partner. We did not have a current payment obligation under this guarantee as of June 30, 2012 or December 31, 2011.

In addition, we have provided a $10,000 debt service reserve letter of credit to cover debt service payments in the event that our project in Chile does not generate sufficient cash flows to make such payments. We are required to maintain the debt service reserve letter of credit during the term of our project in Chile’s debt, which matures in 2014. As of June 30, 2012, no amounts have been drawn under this letter of credit and we do not anticipate any amounts being drawn under this letter of credit.

We also have a wholly-owned subsidiary that provides operations and maintenance services to our project in Chile, which included assessing the damage caused by the earthquake and the related repair while the facility suspended normal operating activities. We record the fees for operations and maintenance services in operating revenues on our consolidated statement of operations and the corresponding receivable in trade accounts and notes receivable on our consolidated balance sheet.

Our consolidated financial statements include the following balances related to our project in Chile:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Fees for operations and maintenance services (included in operating revenues)	$	2,623	$	2,660	$	5,257	$	5,320

	June 30, 2012		December 31, 2011
Receivable from our unconsolidated affiliate in Chile (included in trade receivables)	$	9,735	$	8,881

We also have guaranteed the performance obligations of our wholly-owned subsidiary under the operations and maintenance agreement governing our project in Chile. The guarantee is limited to $20,000 over the life of the operations and maintenance agreement, which extends through 2016. No amounts have been paid under the guarantee.

Other Investments

We are the majority equity partner and general partner of a gas-fired cogeneration project in Martinez, California, which we have determined to be a VIE as of June 30, 2012 and December 31, 2011. We were the primary beneficiary of the VIE, since we had the power to direct the activities that most significantly impact the VIE’s performance. These activities include the operations and maintenance of the facilities. Accordingly, as the primary beneficiary of the VIE, we have consolidated this entity. The aggregate net assets of this entity are presented below.

Balance Sheet Data (excluding intercompany balances):	June 30, 2012		December 31, 2011
Current assets	$	7,757	$	19,328
Other assets (primarily buildings and equipment)		39,851		39,760
Current liabilities		4,854		6,198
Other liabilities		4,335		4,462
Net assets		38,419		48,428

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4. Goodwill and Other Intangible Assets

We have tracked accumulated goodwill impairments since December 29, 2001, the first day of fiscal year 2002 and our date of adoption of the accounting guidelines related to the assessment of goodwill for impairment. There were no accumulated goodwill impairment losses as of that date. The following table provides our net carrying amount of goodwill by geographic region in which our reporting units are located:

	Global E&C Group				Global Power Group
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
U.S.	$	39,357	$	39,357	$	4,266	$	4,266
Asia		845		887		-		-
Europe		-		-		66,436		67,610
Total	$	40,202	$	40,244	$	70,702	$	71,876

Please see Note 2 for further information regarding an increase to our goodwill balance as of December 31, 2011 related to our Graf-Wulff GmbH purchase price allocation.

The following table sets forth amounts relating to our identifiable intangible assets:

	June 30, 2012							December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents	$	40,670	$	(31,055	)	$	9,615	$	40,920	$	(30,237	)	$	10,683
Trademarks		63,344		(30,075	)		33,269		63,711		(29,337	)		34,374
Customer relationships, pipeline and backlog		29,523		(10,819	)		18,704		30,586		(7,725	)		22,861
Technology		6,294		(450	)		5,844		6,468		-			6,468
Total	$	139,831	$	(72,399	)	$	67,432	$	141,685	$	(67,299	)	$	74,386

As of June 30, 2012, the net carrying amounts of our identifiable intangible assets were $54,050 for our Global Power Group and $13,382 for our Global E&C Group. Amortization expense related to identifiable intangible assets is recorded within cost of operating revenues on the consolidated statement of operations.

The following table details amortization expense related to identifiable intangible assets by period:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Amortization expense	$	2,530	$	1,649	$	5,552	$	3,297
Approximate full year amortization expense for years:
2012							$	9,300
2013								7,800
2014								7,800
2015								7,700
2016								5,300

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5. Borrowings

The following table shows the components of our long-term debt:

	June 30, 2012						December 31, 2011
	Current		Long-term		Total		Current		Long-term		Total
Capital Lease Obligations	$	2,485	$	54,430	$	56,915	$	2,463	$	56,080	$	58,543
Special-Purpose Limited Recourse Project Debt:
FW Power S.r.l.		8,213		64,470		72,683		8,308		69,757		78,065
Energia Holdings, LLC at 11.443% interest, due April 15, 2015		1,912		7,395		9,307		1,912		9,308		11,220
Subordinated Robbins Facility Exit Funding Obligations: 1999C Bonds at 7.25% interest, due October 15, 2024		-		1,283		1,283		-		1,283		1,283
Total	$	12,610	$	127,578	$	140,188	$	12,683	$	136,428	$	149,111
Estimated fair value					$	159,344					$	164,590

U.S. Senior Credit Agreement — On July 30, 2010, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.’s subsidiaries and BNP Paribas, as Administrative Agent, entered into a four-year amendment and restatement of our U.S. senior credit agreement, which we entered into in October 2006. The amended and restated U.S. senior credit agreement, which became an unsecured facility in March 2012 as described below, provides for a facility of $450,000, and includes a provision which permits future incremental increases of up to an aggregate of $225,000 in total additional availability under the facility. The amended and restated U.S. senior credit agreement permits us to issue up to $450,000 in letters of credit under the facility. Letters of credit issued under the amended and restated U.S. senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in our corporate credit rating as reported by Moody’s Investors Service, which we refer to as Moody’s, and/or Standard & Poor’s, which we refer to as S&P. We received a corporate credit rating of BBB- as issued by S&P during the third quarter of 2010, which, under the amended and restated U.S. senior credit agreement, reduced our pricing for letters of credit issued under the agreement. We received a corporate credit rating of Baa3 as issued by Moody’s during the first quarter of 2012, which led to the automatic release and termination of all liens securing our obligations under the agreement. Based on our current credit ratings, letter of credit fees for performance and financial letters of credit issued under the amended and restated U.S. senior credit agreement are 1.000% and 2.000% per annum of the outstanding amount, respectively, excluding fronting fees. We also have the option to use up to $100,000 of the $450,000 for revolving borrowings at a rate equal to adjusted LIBOR, as defined in the agreement, plus 2.000%, subject also to the performance pricing noted above.

Fees and expenses incurred in conjunction with the execution of our amended and restated U.S. senior credit agreement were approximately $4,300 and are being amortized to expense over the four-year term of the agreement, which commenced in the third quarter of 2010.

Prior to becoming an unsecured facility in March 2012, our amended and restated U.S. senior credit agreement required that the assets and/or stock of certain of our subsidiaries be held as collateral. Our amended and restated U.S. senior credit agreement contains various customary restrictive covenants that generally limit our ability to, among other things, incur additional indebtedness or guarantees, create liens or other encumbrances on property, sell or transfer certain property and thereafter rent or lease such property for substantially the same purposes as the property sold or transferred, enter into a merger or similar transaction, make investments, declare dividends or make other restricted payments, enter into agreements with affiliates that are not on an arms’ length basis, enter into any agreement that limits our ability to create liens or the ability of a subsidiary to pay dividends, engage in new lines of business, with respect to Foster Wheeler AG, change Foster Wheeler AG’s fiscal year or, with respect to Foster Wheeler AG, Foster Wheeler Ltd. and one of our holding company subsidiaries, directly acquire ownership of the operating assets used to conduct any business.

In addition, our amended and restated U.S. senior credit agreement contains financial covenants requiring us not to exceed a total leverage ratio, which compares total indebtedness to EBITDA, and to maintain a minimum interest coverage ratio, which compares EBITDA to interest expense. All such terms are defined in our amended and restated U.S. senior credit agreement. We must be in compliance with the total leverage ratio at all times, while the interest coverage ratio is measured quarterly. We have been in compliance with all financial covenants and other provisions of our U.S. senior credit agreement prior and subsequent to our amendment and restatement of the agreement.

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We had approximately $275,500 and $225,600 of letters of credit outstanding under our U.S. senior credit agreement as of June 30, 2012 and December 31, 2011, respectively. The letter of credit fees under the U.S. senior credit agreement outstanding as of June 30, 2012 and December 31, 2011 ranged from 1.000% to 2.000% of the outstanding amount, excluding fronting fees. There were no funded borrowings outstanding under our U.S. senior credit agreement as of June 30, 2012 and December 31, 2011.

6. Pensions and Other Postretirement Benefits

We have defined benefit pension plans in the United States, or U.S., the United Kingdom, or U.K., Canada, Finland, France, India and South Africa, and we have other postretirement benefit plans for health care and life insurance benefits in the U.S. and Canada.

Defined Benefit Pension Plans — Our defined benefit pension plans, or pension plans, cover certain full-time employees. Under the pension plans, retirement benefits are primarily a function of both years of service and level of compensation. The U.S. pension plans, which are closed to new entrants and additional benefit accruals, and the Canada, Finland, France and India pension plans are non-contributory. The U.K. pension plan, which is closed to new entrants and additional benefit accruals, and the South Africa pension plan are both contributory plans.

As a result of a change in the U.K. governmental standard, our U.K. pension plan adopted the use of the U.K. consumer prices index as a basis for inflationary increases in the calculation of the funded status of our U.K. pension plan during the six months ended June 30, 2011. The U.K. retail prices index was the former U.K. governmental standard that was used by our U.K. pension plan. We accounted for this change as a plan amendment as of May 31, 2011 and recognized a prior service credit in our consolidated statement of comprehensive income during the quarter and six months ended June 30, 2011 of approximately £29,600 (approximately $48,100 at the exchange rate in effect during the period).

Based on the minimum statutory funding requirements for 2012, we are not required to make any mandatory contributions to our U.S. pension plans. The following table provides details on 2012 mandatory contribution activity for our non-U.S. pension plans:

Contributions in the six months ended June 30, 2012	$	10,800
Remaining contributions expected for the year 2012		12,000
Contributions expected for the year 2012	$	22,800

We did not make any discretionary contributions during the first six months of 2012; however, we may elect to make discretionary contributions to our U.S. and/or non-U.S. pension plans during 2012.

Other Postretirement Benefit Plans — Certain employees in the U.S. and Canada may become eligible for health care and life insurance benefits (“other postretirement benefits”) if they qualify for and commence normal or early retirement pension benefits as defined in the U.S. and Canada pension plans while working for us. Additionally, one of our subsidiaries in the U.S. also has a benefit plan, referred to as the Survivor Income Plan (“SIP”), which provides coverage for an employee’s beneficiary upon the death of the employee. This plan has been closed to new entrants since 1988.

The components of net periodic benefit cost/(credit) for our defined benefit pension plans and other postretirement benefit plans were as follows:

	Defined Benefit Pension Plans												Other Postretirement Benefit Plans
	Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011			2012			2011			2012			2011
Net periodic benefit cost/(credit):
Service cost	$	262		$	333		$	537		$	702		$	12		$	20		$	36		$	47
Interest cost		13,187			15,314			26,321			30,925			569			735			1,374			1,647
Expected return on plan assets		(16,058	)		(17,830	)		(32,073	)		(35,971	)		-			-			-			-
Amortization of net actuarial loss/(gain)		4,349			3,501			8,485			6,955			93			(6	)		213			71
Amortization of prior service (credit)/cost		(396	)		9			(789	)		18			(878	)		(891	)		(1,757	)		(1,782	)
Amortization of transition obligation		12			11			25			23			-			-			-			-
Net periodic benefit cost/(credit)	$	1,356		$	1,338		$	2,506		$	2,652		$	(204	)	$	(142	)	$	(134	)	$	(17	)

The above amortization components of net periodic benefit cost are included on our consolidated statement of comprehensive income net of tax.

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7. Guarantees and Warranties

We have agreed to indemnify certain third parties relating to businesses and/or assets that we previously owned and sold to such third parties. Such indemnifications relate primarily to potential environmental and tax exposures for activities conducted by us prior to the sale of such businesses and/or assets. It is not possible to predict the maximum potential amount of future payments under these or similar indemnifications due to the conditional nature of the obligations and the unique facts and circumstances involved in each particular indemnification.

	Maximum	Carrying Amount of Liability
	Potential Payment	June 30, 2012		December 31, 2011
Environmental indemnifications	No limit	$	7,900	$	8,200
Tax indemnifications	No limit	$	-	$	-

We also maintain contingencies for warranty expenses on certain of our long-term contracts. Generally, warranty contingencies are accrued over the life of the contract so that a sufficient balance is maintained to cover our aggregate exposure at the conclusion of the project.

	Six Months Ended June 30,
	2012			2011
Warranty Liability:
Balance at beginning of year	$	93,000		$	100,300
Accruals		17,000			14,000
Settlements		(9,900	)		(9,500	)
Adjustments to provisions, including foreign currency translation		(9,200	)		(3,600	)
Balance at end of period	$	90,900		$	101,200

We are contingently liable under standby letters of credit, bank guarantees and surety bonds, totaling $983,800 and $990,300 as of June 30, 2012 and December 31, 2011, respectively, primarily for guarantees of our performance on projects currently in execution or under warranty. These amounts include the standby letters of credit issued under the U.S. senior credit agreement discussed in Note 5 and under other facilities worldwide. No material claims have been made against these guarantees, and based on our experience and current expectations, we do not anticipate any material claims.

We have also guaranteed certain performance obligations in a refinery/electric power generation project based in Chile in which we hold a noncontrolling interest. See Note 3 for further information.

8. Derivative Financial Instruments

We are exposed to certain risks relating to our ongoing business operations. The risks managed by using derivative financial instruments relate primarily to foreign currency exchange rate risk and, to a significantly lesser extent, interest rate risk. Derivative financial instruments held by our consolidated entities are recognized as assets or liabilities at fair value on our consolidated balance sheet. Our proportionate share of the fair value of derivative financial instruments held by our equity method investees is included in investments in and advances to unconsolidated affiliates on our consolidated balance sheet. The fair values of derivative financial instruments held by our consolidated entities were as follows:

Fair Values of Derivative Financial Instruments
		Asset Derivatives					Liability Derivatives
	Balance Sheet Location	June 30, 2012		December 31, 2011		Balance Sheet Location	June 30, 2012		December 31, 2011
Derivatives designated as hedging instruments:
Interest rate swap contracts	Other assets	$	-	$	-	Other long-term liabilities	$	9,292	$	8,707
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts		1,075		1,691	Contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts		6,088		6,446
Foreign currency forward contracts	Other accounts receivable		441		75	Accounts payable		247		34
Total derivatives		$	1,516	$	1,766		$	15,627	$	15,187

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Foreign Currency Exchange Rate Risk

We operate on a worldwide basis with substantial operations in Europe that subject us to foreign currency exchange rate risk mainly relative to the British pound, Euro and Polish Zloty. Under our risk management policies, we do not hedge translation risk exposure. All activities of our affiliates are recorded in their functional currency, which is typically the local currency in the country of domicile of the affiliate. In the ordinary course of business, our affiliates enter into transactions in currencies other than their respective functional currencies. We seek to minimize the resulting foreign currency transaction risk by contracting for the procurement of goods and services in the same currency as the sales value of the related long-term contract. We further mitigate the risk through the use of foreign currency forward contracts to hedge the exposed item, such as anticipated purchases or revenues, back to their functional currency.

The notional amount of our foreign currency forward contracts provides one measure of our transaction volume outstanding as of the balance sheet date. As of June 30, 2012, we had a total gross notional amount of approximately $421,500 related to foreign currency forward contracts. Amounts ultimately realized upon final settlement of these financial instruments, along with the gains and losses on the underlying exposures within our long-term contracts, will depend on actual market exchange rates during the remaining life of the instruments. The contract maturity dates range from the remainder of 2012 through 2014.

We are exposed to credit loss in the event of non-performance by the counterparties. These counterparties are commercial banks that are primarily rated “BBB+” or better by S&P (or the equivalent by other recognized credit rating agencies).

Increases in the fair value of the currencies sold forward result in losses while increases in the fair value of the currencies bought forward result in gains. For foreign currency forward contracts used to mitigate currency risk on our projects, the gain or loss from the portion of the mark-to-market adjustment related to the completed portion of the underlying project is included in cost of operating revenues at the same time as the underlying foreign currency exposure occurs. The gain or loss from the remaining portion of the mark-to-market adjustment, specifically the portion relating to the uncompleted portion of the underlying project is reflected directly in cost of operating revenues in the period in which the mark-to-market adjustment occurs. We also utilize foreign currency forward contracts to mitigate non-project related currency risks, which are recorded in other deductions, net.

The gain or loss from the remaining uncompleted portion of our projects and other non-project related transactions were as follows:

	Location of Gain/(Loss)	Amount of Gain/(Loss) Recognized in Income on Derivatives
Derivatives Not Designated as	Recognized	Quarter Ended June 30,						Six Months Ended June 30,
Hedging Instruments	in Income on Derivatives	2012			2011			2012			2011
Foreign currency forward contracts	Cost of operating revenues	$	(3,646	)	$	(1,089	)	$	(500	)	$	725
Foreign currency forward contracts	Other deductions, net		(13	)		(54	)		78			16
Total		$	(3,659	)	$	(1,143	)	$	(422	)	$	741

The mark-to-market adjustments on foreign currency forward exchange contracts for these unrealized gains or losses are primarily recorded in either contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts on the consolidated balance sheet.

During the six months ended June 30, 2012 and 2011, we included net cash inflows on the settlement of derivatives of $930 and $656, respectively, within the “net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts,” a component of cash flows from operating activities on the consolidated statement of cash flows.

Interest Rate Risk

We use interest rate swap contracts to manage interest rate risk associated with a portion of our variable rate special-purpose limited recourse project debt. The aggregate notional amount of the receive-variable/pay-fixed interest rate swaps was $61,300 as of June 30, 2012.

Upon entering into the swap contracts, we designate the interest rate swaps as cash flow hedges. We assess at inception, and on an ongoing basis, whether the interest rate swaps are highly effective in offsetting changes in the cash flows of the project debt. Consequently, we record the fair value of interest rate swap contracts on our consolidated balance sheet at each balance sheet date. Changes in the fair value of the interest rate swap contracts are recorded as a component of other comprehensive income.

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The impact from interest rate swap contracts in cash flow hedging relationships for our consolidated entities was as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
(Loss)/gain recognized in other comprehensive income	$	(629	)	$	(743	)	$	(1,785	)	$	104
Loss reclassified from accumulated other comprehensive loss		450			639			935			1,255

The above balances for our consolidated entities and our proportionate share of the impact from interest rate swap contracts in cash flow hedging relationships held by our equity method investees are included on our consolidated statement of comprehensive income net of tax.

9. Share-Based Compensation Plans

Our share-based compensation plans include both stock options and restricted awards. The following table summarizes our share-based compensation expense and related income tax benefit:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Share-based compensation	$	5,768	$	5,221	$	10,694	$	10,092
Related income tax benefit		149		102		259		183

As of June 30, 2012, we had $11,908 and $18,630 of total unrecognized compensation cost related to stock options and restricted awards, respectively. Those amounts are expected to be recognized as expense over a weighted-average period of approximately two years.

We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

• Expected volatility – we estimate the volatility of our share price at the date of grant using a “look-back” period which coincides with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.

• Expected term – we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”

• Risk-free interest rate – we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.

• Dividends – we use an expected dividend yield of zero because we have not declared or paid a cash dividend since July 2001 and we do not have any plans to declare or pay any cash dividends.

We estimate the fair value of restricted share unit awards using the market price of our shares on the date of grant. We then recognize the fair value of each restricted share unit award as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period).

Certain of our executives have been awarded performance-based restricted share units, or performance RSUs. Under these awards, the number of restricted share units that ultimately vest depend on our share price performance against specified performance goals, which are defined in our performance-based award agreements. We estimate the grant date fair value of each performance RSU award using a Monte Carlo valuation model. We then recognize the fair value of each performance RSU award as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period).

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Our share-based compensation plans include a “change in control” provision, which provides for cash redemption of equity awards issued thereunder in certain limited circumstances. In accordance with Securities and Exchange Commission Accounting Series Release No. 268, “Presentation in Financial Statements of Redeemable Preferred Stocks,” we present the redemption amount of these equity awards as temporary equity on the consolidated balance sheet as the equity award is amortized during the vesting period. The redemption amount represents the intrinsic value of the equity award on the grant date. In accordance with current accounting guidance regarding the classification and measurement of redeemable securities, we do not adjust the redemption amount each reporting period unless and until it becomes probable that the equity awards will become redeemable (upon a change in control event). Upon vesting of the equity awards, we reclassify the intrinsic value of the equity awards, as determined on the grant date, to permanent equity.

Reconciliations of temporary equity for the six months ended June 30, 2012 and 2011 were as follows:

	June 30, 2012			June 30, 2011
Balance at beginning of year	$	4,993		$	4,935
Compensation cost during the period for those equity awards with intrinsic value on the grant date		6,600			5,398
Intrinsic value of equity awards vested during the period for those equity awards with intrinsic value on the grant date		(3,224	)		(3,184	)
Balance at end of period	$	8,369		$	7,149

Our articles of association provide for conditional capital for the issuance of shares under our share-based compensation plans and other convertible or exercisable securities we may issue in the future. Conditional capital decreases upon issuance of shares in connection with the exercise of outstanding stock options or vesting of restricted share units, with an offsetting increase to our issued and authorized share capital. As of June 30, 2012, our remaining available conditional capital was 59,639,130 shares.

10. Income Taxes

The tax provision for each year-to-date period is calculated by multiplying pre-tax income by the estimated annual effective tax rate for such period. Although we are a Swiss corporation, our shares are exclusively listed on a U.S. exchange; therefore, we reconcile our effective tax rate to the U.S. federal statutory rate of 35% to facilitate meaningful comparison with peer companies in the U.S. capital markets. Our effective tax rate can fluctuate significantly from period to period and may differ significantly from the U.S. federal statutory rate as a result of income taxed in various non-U.S. jurisdictions with rates different from the U.S. statutory rate, as a result of our inability to recognize a tax benefit for losses generated by certain unprofitable operations and as a result of the varying mix of income earned in the jurisdictions in which we operate. In addition, our deferred tax assets are reduced by a valuation allowance when, based upon available evidence, it is more likely than not that the tax benefit of loss carryforwards (or other deferred tax assets) will not be realized in the future. In periods when operating units subject to a valuation allowance generate pre-tax earnings, the corresponding reduction in the valuation allowance favorably impacts our effective tax rate. Conversely, in periods when operating units subject to a valuation allowance generate pre-tax losses, the corresponding increase in the valuation allowance has an unfavorable impact on our effective tax rate.

Effective Tax Rate for 2012

Our effective tax rate for the first six months of 2012 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which is expected to contribute to an approximate 16-percentage point reduction in our effective tax rate for the full year 2012, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.

• A valuation allowance increase because we are unable to recognize a tax benefit for losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which is expected to contribute to an approximate four-percentage point increase in our effective tax rate for the full year 2012.

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Effective Tax Rate for 2011

Our effective tax rate for the first six months of 2011 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which contributed to an approximate 16-percentage point reduction in our effective tax rate, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.

• A valuation allowance increase because we were unable to recognize a tax benefit for year-to-date losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which contributed to an approximate four-percentage point increase in our effective tax rate.

We monitor the jurisdictions for which valuation allowances against deferred tax assets were established in previous years, and we evaluate, on a quarterly basis, the need for the valuation allowances against deferred tax assets in those jurisdictions. Such evaluation includes a review of all available evidence, both positive and negative, in determining whether a valuation allowance is necessary.

The majority of the U.S. federal tax benefits, against which valuation allowances have been established, do not expire until 2025 and beyond, based on current tax laws.

Our subsidiaries file income tax returns in many tax jurisdictions, including the U.S., several U.S. states and numerous non-U.S. jurisdictions around the world. Tax returns are also filed in jurisdictions where our subsidiaries execute project-related work. The statute of limitations varies by jurisdiction. Because of the number of jurisdictions in which we file tax returns, in any given year the statute of limitations in a number of jurisdictions may expire within 12 months from the balance sheet date. As a result, we expect recurring changes in unrecognized tax benefits due to the expiration of the statute of limitations, none of which are expected to be individually significant. With few exceptions, we are no longer subject to U.S. (including federal, state and local) or non-U.S. income tax examinations by tax authorities for years before 2007.

A number of tax years are under audit by the relevant tax authorities in various jurisdictions, including the U.S. and several states within the U.S. We anticipate that several of these audits may be concluded in the foreseeable future, including in the remainder of 2012. Based on the status of these audits, it is reasonably possible that the conclusion of the audits may result in a reduction of unrecognized tax benefits. However, it is not possible to estimate the magnitude of any such reduction at this time. We recognize interest accrued on the unrecognized tax benefits in interest expense and penalties on the unrecognized tax benefits in other deductions, net on our consolidated statement of operations.

In the quarter and six months ended June 30, 2012, we received an adverse court decision, which we are appealing, related to an audit of a prior tax year. As a result of the decision, our provision for income taxes was increased by $1,360, our penalties on unrecognized tax benefits increased by $2,529 and our interest expense on unrecognized tax benefits increased by $318.

11. Business Segments

We operate through two business groups: our Global E&C Group and our Global Power Group.

Global E&C Group

Our Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation facilities, distribution facilities, gasification facilities and processing facilities associated with the metals and mining sector. Our Global E&C Group is also involved in the design of facilities in developing market sectors, including carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. Additionally, our Global E&C Group is also involved in the development, engineering, construction, ownership and operation of power generation facilities, from conventional and renewable sources, and of waste-to-energy facilities. Our Global E&C Group generates revenues from design, engineering, procurement, construction and project management activities pursuant to contracts which generally span up to approximately four years in duration and from returns on its equity investments in various power production facilities.

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Global Power Group

Our Global Power Group designs, manufactures and erects steam generating and auxiliary equipment for electric power generating stations, district heating and industrial facilities worldwide. Additionally, our Global Power Group owns and operates a waste-to-energy facility; holds a controlling interest and operates a combined-cycle gas turbine facility; owns a noncontrolling interest in a petcoke-fired circulating fluidized-bed facility for refinery steam and power generation; and operates a university cogeneration power facility for steam/electric generation. Our Global Power Group generates revenues from engineering activities, equipment supply, construction contracts, operating and maintenance agreements, royalties from licensing its technology, and from returns on its investments in various power production facilities.

Our Global Power Group’s steam generating equipment includes a broad range of steam generation and environmental technologies, offering independent power producers, utilities, municipalities and industrial clients high-value technology solutions for converting a wide range of fuels, such as coal, lignite, petroleum coke, oil, gas, solar, biomass, municipal solid waste and waste flue gases into steam, which can be used for power generation, district heating or industrial processes.

Corporate and Finance Group

In addition to these two business groups, which also represent two of our operating segments for financial reporting purposes, we report corporate center expenses, our captive insurance operation and expenses related to certain legacy liabilities, such as asbestos, in the Corporate and Finance Group, which also represents an operating segment for financial reporting purposes and which we refer to as the C&F Group.

Operating Revenues

We conduct our business on a global basis. Operating revenues by industry and business segment were as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Operating Revenues (Third-Party) by Industry:
Power generation	$	262,321	$	269,054	$	514,436	$	464,183
Oil refining		360,750		383,465		685,911		746,994
Pharmaceutical		13,614		15,290		26,593		26,474
Oil and gas		183,563		336,055		415,114		608,102
Chemical/petrochemical		77,427		130,409		145,747		284,386
Power plant operation and maintenance		34,913		34,235		64,193		62,564
Environmental		2,456		2,977		4,644		5,536
Other, net of eliminations		7,982		12,393		19,484		21,891
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130
Operating Revenues (Third-Party) by Business Segment:
Global E&C Group	$	666,142	$	892,080	$	1,337,015	$	1,715,823
Global Power Group		276,884		291,798		539,107		504,307
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130

EBITDA

EBITDA is the primary measure of operating performance used by our chief operating decision maker. We define EBITDA as net income attributable to Foster Wheeler AG before interest expense, income taxes, depreciation and amortization.

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A reconciliation of EBITDA to net income attributable to Foster Wheeler AG is shown below:

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
EBITDA:
Global E&C Group	$	39,917		$	54,842		$	86,845		$	96,510
Global Power Group		43,850			67,735			96,166			94,199
C&F Group *		(23,592	)		(24,291	)		(50,870	)		(45,619	)
Total		60,175			98,286			132,141			145,090
Add: Net income attributable to noncontrolling interests		4,258			4,527			6,655			6,832
Less: Interest expense		4,249			3,427			7,665			7,306
Less: Depreciation and amortization		12,776			12,506			25,796			25,177
Income before income taxes		47,408			86,880			105,335			119,439
Less: Provision for income taxes		12,291			19,044			27,175			26,327
Net income		35,117			67,836			78,160			93,112
Less: Net income attributable to noncontrolling interests		4,258			4,527			6,655			6,832
Net income attributable to Foster Wheeler AG	$	30,859		$	63,309		$	71,505		$	86,280

* Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances related to intercompany interest.

EBITDA in the above table includes the following:

	Quarter Ended June 30,					Six Months Ended June 30,
	2012			2011		2012		2011
Net (decrease)/increase in contract profit from the regular revaluation of final estimated contract profit revisions:(1)
Global E&C Group(2)	$	(2,800	)	$	1,500	$	5,100	$	3,900
Global Power Group(2)		11,000			14,300		26,500		9,600
Total	$	8,200		$	15,800	$	31,600	$	13,500
Net asbestos-related provisions:(3)
Global E&C Group	$	1,700		$	-	$	1,700	$	-
C&F Group		2,000			2,000		4,000		2,400
Total	$	3,700		$	2,000	$	5,700	$	2,400

⁽¹⁾  Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 for further information regarding changes in our final estimated contract profit.

⁽²⁾  The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global E&C Group and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 and are included in the six months ended June 30, 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

⁽³⁾  Please refer to Note 12 for further information regarding the revaluation of our asbestos liability and related asset.

The accounting policies of our business segments are the same as those described in our summary of significant accounting policies as disclosed in our 2011 Form 10-K. The only significant intersegment transactions relate to interest on intercompany balances. We account for interest on those arrangements as if they were third-party transactions (i.e., at current market rates), and we include the elimination of that activity in the results of the C&F Group.

12. Litigation and Uncertainties

Asbestos

Some of our U.S. and U.K. subsidiaries are defendants in numerous asbestos-related lawsuits and out-of-court informal claims pending in the U.S. and the U.K. Plaintiffs claim damages for personal injury alleged to have arisen from exposure to or use of asbestos in connection with work allegedly performed by our subsidiaries during the 1970s and earlier.

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United States

A summary of our U.S. claim activity is as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Number of Claims by period:
Open claims at beginning of period		124,280			123,580			124,540			124,420
New claims		1,180			1,100			2,340			2,380
Claims resolved		(780	)		(690	)		(2,200	)		(2,810	)
Open claims at end of period		124,680			123,990			124,680			123,990

We had the following U.S. asbestos-related assets and liabilities recorded on our consolidated balance sheet as of the dates set forth below. Total U.S. asbestos-related liabilities are estimated through the second quarter of 2027. Although it is likely that claims will continue to be filed after that date, the uncertainties inherent in any long-term forecast prevent us from making reliable estimates of the indemnity and defense costs that might be incurred after that date.

United States Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets recorded within:
Accounts and notes receivable-other	$	34,593	$	43,677
Asbestos-related insurance recovery receivable		118,465		131,007
Total asbestos-related assets	$	153,058	$	174,684
Asbestos-related liabilities recorded within:
Accrued expenses	$	41,050	$	50,900
Asbestos-related liability		228,649		243,400
Total asbestos-related liabilities	$	269,699	$	294,300
Liability balance by claim category:
Open claims	$	54,770	$	56,700
Future unasserted claims		214,929		237,600
Total asbestos-related liabilities	$	269,699	$	294,300

We have worked with Analysis, Research & Planning Corporation, or ARPC, nationally recognized consultants in the U.S. with respect to projecting asbestos liabilities, to estimate the amount of asbestos-related indemnity and defense costs at each year-end based on a forecast for the next 15 years. Each year we have recorded our estimated asbestos liability at a level consistent with ARPC’s reasonable best estimate. Our estimated asbestos liability decreased during the first six months of 2012 as a result of indemnity and defense cost payments totaling approximately $28,600, partially offset by an increase of $4,000 related to the accrual of our rolling 15-year asbestos-related liability estimate. The total asbestos-related liabilities are comprised of our estimates for our liability relating to open (outstanding) claims being valued and our liability for future unasserted claims through the second quarter of 2027.

Our liability estimate is based upon the following information and/or assumptions: number of open claims, forecasted number of future claims, estimated average cost per claim by disease type – mesothelioma, lung cancer and non-malignancies – and the breakdown of known and future claims into disease type – mesothelioma, lung cancer or non-malignancies, as well as other factors. The total estimated liability, which has not been discounted for the time value of money, includes both the estimate of forecasted indemnity amounts and forecasted defense costs. Total defense costs and indemnity liability payments are estimated to be incurred through the second quarter of 2027, during which period the incidence of new claims is forecasted to decrease each year. We believe that it is likely that there will be new claims filed after the second quarter of 2027, but in light of uncertainties inherent in long-term forecasts, we do not believe that we can reasonably estimate the indemnity and defense costs that might be incurred after the second quarter of 2027.

Through June 30, 2012, total cumulative indemnity costs paid, prior to insurance recoveries, were approximately $781,300 and total cumulative defense costs paid were approximately $379,500, or approximately 33% of total defense and indemnity costs. The overall historic average combined indemnity and defense cost per resolved claim through June 30, 2012 has been approximately $3.1. The average cost per resolved claim is increasing and we believe it will continue to increase in the future.

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Over the last several years, certain of our subsidiaries have entered into settlement agreements calling for insurers to make lump-sum payments, as well as payments over time, for use by our subsidiaries to fund asbestos-related indemnity and defense costs and, in certain cases, for reimbursement for portions of out-of-pocket costs previously incurred. During the first six months of 2011, our subsidiaries reached agreements with certain of their insurers to settle their disputed asbestos-related insurance coverage. As a result of these settlements, we increased our asbestos-related insurance asset and recorded settlement gains. Please see the table below for a breakout of the gains by period.

Asbestos-related assets under executed settlement agreements with insurers due in the next 12 months are recorded within accounts and notes receivable-other and amounts due beyond 12 months are recorded within asbestos-related insurance recovery receivable. Asbestos-related insurance recovery receivable also includes our best estimate of actual and probable insurance recoveries relating to our liability for pending and estimated future asbestos claims through the second quarter of 2027. Our asbestos-related assets have not been discounted for the time value of money.

Our insurance recoveries may be limited by future insolvencies among our insurers. Other than receivables related to bankruptcy court-approved settlements during liquidation proceedings, we have not assumed recovery in the estimate of our asbestos-related insurance asset from any of our currently insolvent insurers. We have considered the financial viability and legal obligations of our subsidiaries’ insurance carriers and believe that the insurers or their guarantors will continue to reimburse a significant portion of claims and defense costs relating to asbestos litigation. As of June 30, 2012 and December 31, 2011, we have not recorded an allowance for uncollectible balances against our asbestos-related insurance assets. We write-off receivables from insurers that have become insolvent; there have been no such write-offs during the six months ended June 30, 2012 and 2011. During 2011, we reached an agreement with an insurer that was under bankruptcy liquidation and for which we had written-off our receivable prior to 2011. The asset awarded under the bankruptcy liquidation for this insurer was $4,500 and was included in our asbestos-related assets as of December 31, 2011. This receivable was subsequently collected during the first six months of 2012. Other insurers may become insolvent in the future and our insurers may fail to reimburse amounts owed to us on a timely basis. If we fail to realize the expected insurance recoveries, or experience delays in receiving material amounts from our insurers, our business, financial condition, results of operations and cash flows could be materially adversely affected.

The following table summarizes our net asbestos-related provision:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Provision for revaluation	$	2,000	$	2,000	$	3,997	$	4,000
Gain on the settlement of coverage litigation		-		-		-		(1,600	)
Net asbestos-related provision	$	2,000	$	2,000	$	3,997	$	2,400

Our net asbestos-related provision is the result of our rolling 15-year asbestos liability estimate, net of anticipated insurance recoveries, partially offset by gains on the settlement of coverage litigation with asbestos insurance carriers.

The following table summarizes our approximate asbestos-related payments and insurance proceeds:

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Asbestos litigation, defense and case resolution payments	$	13,300		$	14,900		$	28,600		$	36,500
Insurance proceeds		(11,200	)		(6,900	)		(21,700	)		(16,000	)
Net asbestos-related payments	$	2,100		$	8,000		$	6,900		$	20,500

We expect to have net cash outflows of $7,900 during the full year 2012 as a result of asbestos liability indemnity and defense payments in excess of insurance settlement proceeds. This estimate assumes no additional settlements with insurance companies and no elections by us to fund additional payments. As we continue to collect cash from insurance settlements and assuming no increase in our asbestos-related insurance liability, the asbestos-related insurance receivable recorded on our consolidated balance sheet will continue to decrease.

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The estimate of the liabilities and assets related to asbestos claims and recoveries is subject to a number of uncertainties that may result in significant changes in the current estimates. Among these are uncertainties as to the ultimate number and type of claims filed, the amounts of claim costs, the impact of bankruptcies of other companies with asbestos claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, as well as potential legislative changes. Increases in the number of claims filed or costs to resolve those claims could cause us to increase further the estimates of the costs associated with asbestos claims and could have a material adverse effect on our financial condition, results of operations and cash flows.

Based on our December 31, 2011 liability estimate, an increase of 25% in the average per claim indemnity settlement amount would increase the liability by $47,700 and the impact on expense would be dependent upon available additional insurance recoveries. Assuming no change to the assumptions currently used to estimate our insurance asset, this increase would result in a charge on our consolidated statement of operations of approximately 80% of the increase in the liability. Long-term cash flows would ultimately change by the same amount. Should there be an increase in the estimated liability in excess of 25%, the percentage of that increase that would be expected to be funded by additional insurance recoveries will decline.

United Kingdom

Some of our subsidiaries in the United Kingdom have also received claims alleging personal injury arising from exposure to asbestos. To date, 1,008 claims have been brought against our U.K. subsidiaries, of which 299 remained open as of June 30, 2012. None of the settled claims have resulted in material costs to us.

The following table summarizes our asbestos-related liabilities and assets for our U.K. subsidiaries based on open (outstanding) claims and our estimate for future unasserted claims through the second quarter of 2027:

United Kingdom Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets:
Accounts and notes receivable-other	$	2,698	$	2,677
Asbestos-related insurance recovery receivable		23,487		26,120
Total asbestos-related assets	$	26,185	$	28,797
Asbestos-related liabilities:
Accrued expenses	$	2,698	$	2,677
Asbestos-related liability		25,063		26,120
Total asbestos-related liabilities	$	27,761	$	28,797
Liability balance by claim category:
Open claims	$	6,832	$	8,030
Future unasserted claims		20,929		20,767
Total asbestos-related liabilities	$	27,761	$	28,797

The liability estimates are based on a U.K. House of Lords judgment that pleural plaque claims do not amount to a compensable injury and accordingly, we have reduced our liability assessment. If this ruling is reversed by legislation, the total asbestos liability recorded in the U.K. would be approximately $41,000, with a corresponding increase in the asbestos-related asset.

Project Claims

In the ordinary course of business, we are parties to litigation involving clients and subcontractors arising out of project contracts. Such litigation includes claims and counterclaims by and against us for canceled contracts, for additional costs incurred in excess of current contract provisions, as well as for back charges for alleged breaches of warranty and other contract commitments. If we were found to be liable for any of the claims/counterclaims against us, we would incur a charge against earnings to the extent a reserve had not been established for the matter in our accounts or if the liability exceeds established reserves.

Due to the inherent commercial, legal and technical uncertainties underlying the estimation of our project claims, the amounts ultimately realized or paid by us could differ materially from the balances, if any, included in our financial statements, which could result in additional material charges against earnings, and which could also materially adversely impact our financial condition and cash flows.

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Environmental Matters

CERCLA and Other Remedial Matters

Under U.S. federal statutes, such as the Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Clean Water Act and the Clean Air Act, and similar state laws, the current owner or operator of real property and the past owners or operators of real property (if disposal of toxic or hazardous substances took place during such past ownership or operation) may be jointly and severally liable for the costs of removal or remediation of toxic or hazardous substances on or under their property, regardless of whether such materials were released in violation of law or whether the owner or operator knew of, or was responsible for, the presence of such substances. Moreover, under CERCLA and similar state laws, persons who arrange for the disposal or treatment of hazardous or toxic substances may also be jointly and severally liable for the costs of the removal or remediation of such substances at a disposal or treatment site, whether or not such site was owned or operated by such person, which we refer to as an off-site facility. Liability at such off-site facilities is typically allocated among all of the financially viable responsible parties based on such factors as the relative amount of waste contributed to a site, toxicity of such waste, relationship of the waste contributed by a party to the remedy chosen for the site and other factors.

We currently own and operate industrial facilities and we have also transferred our interests in industrial facilities that we formerly owned or operated. It is likely that as a result of our current or former operations, hazardous substances have affected the facilities or the real property on which they are or were situated. We also have received and may continue to receive claims pursuant to indemnity obligations from the present owners of facilities we have transferred, which claims may require us to incur costs for investigation and/or remediation.

We are currently engaged in the investigation and/or remediation under the supervision of the applicable regulatory authorities at two of our or our subsidiaries’ former facilities (including Mountain Top, which is described below). In addition, we sometimes engage in investigation and/or remediation without the supervision of a regulatory authority. Although we do not expect the environmental conditions at our present or former facilities to cause us to incur material costs in excess of those for which reserves have been established, it is possible that various events could cause us to incur costs materially in excess of our present reserves in order to fully resolve any issues surrounding those conditions. Further, no assurance can be provided that we will not discover additional environmental conditions at our currently or formerly owned or operated properties, or that additional claims will not be made with respect to formerly owned properties, requiring us to incur material expenditures to investigate and/or remediate such conditions.

We have been notified that we are a potentially responsible party (“PRP”) under CERCLA or similar state laws at three off-site facilities. At each of these sites, our liability should be substantially less than the total site remediation costs because the percentage of waste attributable to us compared to that attributable to all other PRPs is low. We do not believe that our share of cleanup obligations at any of the off-site facilities as to which we have received a notice of potential liability will exceed $500 in the aggregate. We have also received and responded to a request for information from the United States Environmental Protection Agency (“USEPA”) regarding a fourth off-site facility. We do not know what, if any, further actions USEPA may take regarding this fourth off-site facility.

Mountain Top

In February 1988, one of our subsidiaries, Foster Wheeler Energy Corporation (“FWEC”), entered into a Consent Agreement and Order with the USEPA and the Pennsylvania Department of Environmental Protection (“PADEP”) regarding its former manufacturing facility in Mountain Top, Pennsylvania. The order essentially required FWEC to investigate and remediate as necessary contaminants, including trichloroethylene (“TCE”), in the soil and groundwater at the facility. Pursuant to the order, in 1993 FWEC installed a “pump and treat” system to remove TCE from the groundwater. It is not possible at the present time to predict how long FWEC will be required to operate and maintain this system.

In the fall of 2004, FWEC sampled the private domestic water supply wells of certain residences in Mountain Top and identified approximately 30 residences whose wells contained TCE at levels in excess of Safe Drinking Water Act standards. The subject residences are located approximately one mile to the southwest of where the TCE previously was discovered in the soils at the former FWEC facility. Since that time, FWEC, USEPA and PADEP have cooperated in responding to the foregoing. Although FWEC believed the evidence available was not sufficient to support a determination that FWEC was responsible for the TCE in the residential wells, FWEC immediately provided the affected residences with bottled water, followed by water filters, and, pursuant to a settlement agreement with USEPA, it hooked them up to the public water system. Pursuant to an amendment of the settlement agreement, FWEC subsequently agreed with USEPA to arrange and pay for the hookup of several additional residences, even though TCE has not been detected in the wells at those residences. The hookups to the agreed-upon residences have been completed. FWEC is incurring costs related to public outreach and communications in the affected area, and it may be required to pay the agencies’ costs in overseeing and responding to the situation.

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FWEC is also incurring further costs in connection with a Remedial Investigation / Feasibility Study (“RI/FS”) that in March 2009 it agreed to conduct. In April 2009, USEPA proposed for listing on the National Priorities List (“NPL”) an area consisting of FWEC’s former manufacturing facility and the affected residences, but it also stated that the proposed listing may not be finalized if FWEC complies with its agreement to conduct the RI/FS. FWEC submitted comments opposing the proposed listing. FWEC has accrued its best estimate of the cost of the foregoing and it reviews this estimate on a quarterly basis.

Other costs to which FWEC could be exposed could include, among other things, FWEC’s counsel and consulting fees, further agency oversight and/or response costs, costs and/or exposure related to potential litigation, and other costs related to possible further investigation and/or remediation. At present, it is not possible to determine whether FWEC will be determined to be liable for some or all of the items described in this paragraph or to reliably estimate the potential liability associated with the items. If one or more third-parties are determined to be a source of the TCE, FWEC will evaluate its options regarding the potential recovery of the costs FWEC has incurred, which options could include seeking to recover those costs from those determined to be a source.

Other Environmental Matters

Our operations, especially our manufacturing and power plants, are subject to comprehensive laws adopted for the protection of the environment and to regulate land use. The laws of primary relevance to our operations regulate the discharge of emissions into the water and air, but can also include hazardous materials handling and disposal, waste disposal and other types of environmental regulation. These laws and regulations in many cases require a lengthy and complex process of obtaining licenses, permits and approvals from the applicable regulatory agencies. Noncompliance with these laws can result in the imposition of material civil or criminal fines or penalties. We believe that we are in substantial compliance with existing environmental laws. However, no assurance can be provided that we will not become the subject of enforcement proceedings that could cause us to incur material expenditures. Further, no assurance can be provided that we will not need to incur material expenditures beyond our existing reserves to make capital improvements or operational changes necessary to allow us to comply with future environmental laws.

With regard to the foregoing, the waste-to-energy facility operated by our Camden County Energy Recovery Associates, LP (“CCERA”) project subsidiary is subject to certain revisions to New Jersey’s mercury air emission regulations. The revisions made CCERA’s mercury control requirements more stringent, especially when the last phase of the revisions became effective on January 3, 2012. CCERA’s management believes that the data generated during stack testing in 2012 and the several prior years tends to indicate that the facility will be able to comply with even the most stringent of the regulatory revisions without installing additional control equipment. Estimates of the cost of installing the additional control equipment are approximately $30,000 based on our last assessment.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(amounts in thousands of dollars, except share data and per share amounts)

The following is management’s discussion and analysis of certain significant factors that have affected our financial condition and results of operations for the periods indicated below. This discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended December 31, 2011, which we refer to as our 2011 Form 10-K.

Safe Harbor Statement

This management’s discussion and analysis of financial condition and results of operations, other sections of this quarterly report on Form 10-Q and other reports and oral statements made by our representatives from time to time may contain forward-looking statements that are based on our assumptions, expectations and projections about Foster Wheeler AG and the various industries within which we operate. These include statements regarding our expectations about revenues (including as expressed by our backlog), our liquidity, the outcome of litigation and legal proceedings and recoveries from customers for claims and the costs of current and future asbestos claims and the amount and timing of related insurance recoveries. Such forward-looking statements by their nature involve a degree of risk and uncertainty. We caution that a variety of factors, including but not limited to the factors described in Part I, Item 1A, “Risk Factors,” in our 2011 Form 10-K, which we filed with the Securities and Exchange Commission, or SEC, on February 23, 2012, and the following, could cause business conditions and our results to differ materially from what is contained in forward-looking statements:

• benefits, effects or results of our redomestication or the relocation of our principal executive offices to Geneva, Switzerland;

• benefits, effects or results of our strategic renewal initiative;

• further deterioration in global economic conditions;

• changes in investment by the oil and gas, oil refining, chemical/petrochemical and power generation industries;

• changes in the financial condition of our customers;

• changes in regulatory environments;

• changes in project design or schedules;

• contract cancellations;

• changes in our estimates of costs to complete projects;

• changes in trade, monetary and fiscal policies worldwide;

• compliance with laws and regulations relating to our global operations;

• currency fluctuations;

• war, terrorist attacks and/or natural disasters affecting facilities either owned by us or where equipment or services are or may be provided by us;

• interruptions to shipping lanes or other methods of transit;

• outcomes of pending and future litigation, including litigation regarding our liability for damages and insurance coverage for asbestos exposure;

• protection and validity of our patents and other intellectual property rights;

• increasing global competition;

• compliance with our debt covenants;

• recoverability of claims against our customers and others by us and claims by third-parties against us; and

• changes in estimates used in our critical accounting policies.

Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.

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In addition, this management’s discussion and analysis of financial condition and results of operations contains several statements regarding current and future general global economic conditions. These statements are based on our compilation of economic data and analyses from a variety of external sources. While we believe these statements to be reasonably accurate, global economic conditions are difficult to analyze and predict and are subject to significant uncertainty and as a result, these statements may prove to be wrong. The challenges and drivers for each of our business segments are discussed in more detail in the section entitled “—Results of Operations-Business Segments,” within this Item 2.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in proxy statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports on Form 8-K filed or furnished with the SEC.

Overview

We operate through two business groups – the Global Engineering & Construction Group, which we refer to as our Global E&C Group, and our Global Power Group. In addition to these two business groups, we also report corporate center expenses, our captive insurance operation and expenses related to certain legacy liabilities, such as asbestos and other expenses, in the Corporate and Finance Group, which we refer to as our C&F Group.

We have been exploring, and intend to continue to explore, acquisitions within the engineering and construction industry to strategically complement or expand on our technical capabilities or access to new market segments. We are also exploring acquisitions within the power generation industry to complement the products our Global Power Group offers. In December 2011, we acquired a company based in Germany that designs, manufactures and installs equipment which utilizes circulating dry ash flue gas scrubbing technology for all types of steam generators in the power and industrial sectors. However, there is no assurance that we will consummate any acquisitions in the future.

Summary Financial Results for the Quarter and Six Months Ended June 30, 2012

Our summary financial results for the quarter and six months ended June 30, 2012 and 2011 are as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Consolidated Statement of Operations Data:
Operating revenues(1)	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130
Contract profit(1)		139,551		153,612		278,883		252,867
Selling, general and administrative expenses(1)		85,427		80,402		168,708		154,243
Net income attributable to Foster Wheeler AG		30,859		63,309		71,505		86,280
Earnings per share :
Basic		0.29		0.52		0.66		0.70
Diluted		0.29		0.52		0.66		0.70
Net cash provided by operating activities(2)						80,544		138,964

⁽¹⁾  Please refer to the section entitled “—Results of Operations” within this Item 2 for further discussion.

⁽²⁾  Please refer to the section entitled “—Liquidity and Capital Resources” within this Item 2 for further discussion.

Cash and cash equivalents totaled $767,259 and $718,049 as of June 30, 2012 and December 31, 2011, respectively.

Net income attributable to Foster Wheeler AG decreased in the second quarter of 2012, compared to the same period of 2011, primarily driven by pre-tax impacts related to decreased contract profit of $14,100, increased sales pursuit costs of $6,100, an unfavorable impact related to the change in net foreign exchange transactions of $5,100, and the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the second quarter of 2011, as well as the after-tax impact of decreased equity earnings of $6,700 and an increase in our effective tax rate.

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Net income attributable to Foster Wheeler AG decreased in the first six months of 2012, compared to the same period of 2011, primarily driven by pre-tax impacts related to increased sales pursuit costs of $12,200, the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the first six months of 2011, an unfavorable impact related to the change in net foreign exchange transactions of $3,300 and an increased net asbestos-related provision of $3,300, as well as the after-tax impact of decreased equity earnings of $12,100 and an increase in our effective tax rate, partially offset by the pre-tax impact related to increased contract profit of $26,000.

Please refer to the discussion within the section entitled “—Results of Operations” within this Item 2.

Challenges and Drivers

Our primary operating focus continues to be booking quality new business and effectively and efficiently executing our contracts. The global markets in which we operate are largely dependent on overall economic conditions and growth and the resultant demand for oil and gas, electric power, petrochemicals and refined products.

In the engineering and construction industry, we expect long-term demand to be strong for the end products produced by our clients, and we believe that this long-term demand will continue to stimulate investment by our clients in new, expanded and upgraded facilities. Our clients plan their investments based on long-term time horizons. We believe that global demand for energy, chemicals and pharmaceuticals will continue to grow over the long-term and that clients will continue to invest in new and upgraded capacity to meet that demand. Global markets in the engineering and construction industry have experienced intense competition among engineering and construction contractors and pricing pressure for contracts awarded. Additionally, some clients have been releasing, and continue to release, tranches of work on a piecemeal basis. However, we are seeing clients developing new projects and reactivating planned projects that had previously been placed on hold.

The challenges and drivers for our Global E&C Group are discussed in more detail in the section entitled “—Results of Operations-Business Segments-Global E&C Group-Overview of Segment,” within this Item 2.

We believe that there will be sustained demand in 2012, compared to 2011, for the products and services of our Global Power Group, with opportunities in Asia, the Middle East and South America driven by growing electricity demand and industrial production in these regions. However, a number of constraining market factors continue to impact the markets that we serve. These factors include political and environmental sensitivity regarding coal-fired steam generators, as well as the outlook for continued lower natural gas pricing over the next three to five years, which has increased the attractiveness of natural gas, in relation to coal, for the generation of electricity. These factors may continue in the future. The challenges and drivers for our Global Power Group are discussed in more detail in the section entitled “—Results of Operations-Business Segments-Global Power Group-Overview of Segment,” within this Item 2.

There is potential downside risk to global economic growth driven primarily by continued sovereign debt and bank funding pressures in the Eurozone, the speed at which governmental efforts directed at spending and debt reduction are being implemented, a slowdown in the economic growth rate in China and geopolitical oil supply risks, which could impact global economic growth through a significant rise in oil prices. If these risks materialize, both of our business groups could be impacted.

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New Orders and Backlog of Unfilled Orders

The tables below summarize our new orders and backlog of unfilled orders by period:

	Quarter Ended
	June 30, 2012		March 31, 2012		June 30, 2011
New orders, measured in future revenues:
Global E&C Group*	$	496,900	$	672,600	$	664,900
Global Power Group		116,200		161,700		576,000
Total*	$	613,100	$	834,300	$	1,240,900
*  Balances include the following Global E&C Group flow-through revenues, as defined in the section entitled
“—Resultsof Operations-Operating Revenues” within this Item 2 :	$	105,400	$	301,600	$	284,100

	As of
	June 30, 2012		March 31, 2012		December 31, 2011
Backlog of unfilled orders, measured in future revenues	$	3,142,000	$	3,590,400	$	3,626,100
Backlog, measured in Foster Wheeler scope*	$	2,241,300	$	2,527,300	$	2,562,300
Global E&C Group man-hours in backlog (in thousands)		10,300		10,900		11,600

* As defined in the section entitled “—Backlog and New Orders” within this Item 2.

Please refer to the section entitled “—Backlog and New Orders” within this Item 2 for further detail.

Results of Operations

Operating Revenues

	June 30, 2012		June 30, 2011		$ Change		% Change
Quarter Ended:
Global E&C Group	$	666,142	$	892,080	$	(225,938)		(25.3)%
Global Power Group		276,884		291,798		(14,914)		(5.1)%
Total	$	943,026	$	1,183,878	$	(240,852)		(20.3)%
Six Months Ended:
Global E&C Group	$	1,337,015	$	1,715,823	$	(378,808)		(22.1)%
Global Power Group		539,107		504,307		34,800		6.9%
Total	$	1,876,122	$	2,220,130	$	(344,008)		(15.5)%

We operate through two business groups: our Global E&C Group and our Global Power Group. Please refer to the section entitled “—Business Segments,” within this Item 2, for a discussion of the products and services of our business segments.

The composition of our operating revenues varies from period to period based on the portfolio of contracts in execution during any given period. Our operating revenues are further dependent upon the strength of the various geographic markets and industries we serve and our ability to address those markets and industries.

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Our operating revenues by geographic region, based upon where our projects are being executed, for the quarter and six months ended June 30, 2012 and 2011, were as follows:

	Quarter Ended June 30,									Six Months Ended June 30,
	2012		2011		$ Change			% Change		2012		2011		$ Change			% Change
Africa	$	24,909	$	27,963	$	(3,054	)		(10.9)%	$	47,661	$	82,883	$	(35,222	)		(42.5)%
Asia		191,167		229,364		(38,197	)		(16.7)%		406,081		417,679		(11,598	)		(2.8)%
Australasia and other*		119,761		308,369		(188,608	)		(61.2)%		310,519		548,390		(237,871	)		(43.4)%
Europe		240,155		248,116		(7,961	)		(3.2)%		458,932		435,744		23,188			5.3%
Middle East		64,565		55,811		8,754			15.7%		112,849		125,644		(12,795	)		(10.2)%
North America		214,694		245,276		(30,582	)		(12.5)%		373,185		478,894		(105,709	)		(22.1)%
South America		87,775		68,979		18,796			27.2%		166,895		130,896		35,999			27.5%
Total	$	943,026	$	1,183,878	$	(240,852	)		(20.3)%	$	1,876,122	$	2,220,130	$	(344,008	)		(15.5)%

* Australasia and other primarily represents Australia, New Zealand and the Pacific Islands.

Our operating revenues decreased in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, which includes decreased flow-through revenues of $277,900 and $437,200, respectively, as described below. Excluding the impact of the change in flow-through revenues and currency fluctuations, our operating revenues increased 12% and 13% in the quarter and six months ended June 30, 2012, respectively, compared to the same periods in 2011. The increase in operating revenues, excluding flow-through revenues and currency fluctuations, in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, was the result of increased operating revenues in both our Global E&C Group and our Global Power Group.

Flow-through revenues and costs result when we purchase materials, equipment or third-party services on behalf of our customer on a reimbursable basis with no profit on the materials, equipment or third-party services and where we have the overall responsibility as the contractor for the engineering specifications and procurement or procurement services for the materials, equipment or third-party services included in flow-through costs. Flow-through revenues and costs do not impact contract profit or net earnings.

Please refer to the section entitled “—Business Segments,” within this Item 2, for further discussion related to operating revenues and our view of the market outlook for both of our operating groups.

Contract Profit

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	139,551	$	153,612	$	(14,061	)		(9.2)%
Six Months Ended	$	278,883	$	252,867	$	26,016			10.3%

Contract profit is computed as operating revenues less cost of operating revenues. “Flow-through” amounts are recorded both as operating revenues and cost of operating revenues with no contract profit. Contract profit margins are computed as contract profit divided by operating revenues. Flow-through revenues reduce the contract profit margin as they are included in operating revenues without any corresponding impact on contract profit. As a result, we analyze our contract profit margins excluding the impact of flow-through revenues as we believe that this is a more accurate measure of our operating performance.

Contract profit decreased during the quarter ended June 30, 2012, compared to the same period in 2011. The decrease was the net result of decreased contract profit in our Global Power Group, partially offset by increased contract profit in our Global E&C Group.

Contract profit increased during the six months ended June 30, 2012, compared to the same period in 2011. The increase was the result of increased contract profit by both our Global E&C Group and our Global Power Group.

Please refer to the section entitled “—Business Segments,” within this Item 2, for further information related to contract profit for both of our operating groups.

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Selling, General and Administrative (SG&A) Expenses

	June 30, 2012		June 30, 2011		$ Change		% Change
Quarter Ended	$	85,427	$	80,402	$	5,025		6.2%
Six Months Ended	$	168,708	$	154,243	$	14,465		9.4%

SG&A expenses include the costs associated with general management, sales pursuit, including proposal expenses, and research and development costs.

SG&A expenses increased in the second quarter of 2012, compared to the same period in 2011, primarily as a result of increased sales pursuit costs of $6,100, partially offset by decreased general overhead costs of $900, while research and development costs were relatively unchanged.

SG&A expenses increased in the first six months of 2012, compared to the same period in 2011, primarily as a result of increased sales pursuit costs of $12,200 and increased general overhead costs of $2,500, while research and development costs were relatively unchanged.

Other Income, net

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	10,571	$	21,390	$	(10,819	)		(50.6)%
Six Months Ended	$	18,755	$	35,656	$	(16,901	)		(47.4)%

Other income, net during the quarter and six months ended June 30, 2012 consisted primarily of equity earnings of $8,300 and $15,300, respectively, generated from our investments, primarily from our ownership interests in build, own and operate projects in Italy and Chile.

Other income, net decreased in the second quarter of 2012, compared to the same period in 2011, primarily driven by decreased equity earnings in our Global Power Group’s project in Chile of $5,500, decreased equity earnings in our Global E&C Group’s projects in Italy of $1,200 and the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the second quarter of 2011.

Other income, net decreased in the first six months of 2012, compared to the same period in 2011, primarily driven by decreased equity earnings in our Global Power Group’s project in Chile of $8,100, decreased equity earnings in our Global E&C Group’s projects in Italy of $4,200 and the unfavorable impact of the inclusion of a $4,000 gain in the first six months of 2011 related to the revaluation of a contingent consideration liability.

For further information related to our equity earnings, please refer to the sections within this Item 2 entitled “—Business Segments-Global Power Group” for our Global Power Group’s project in Chile and “—Business Segments-Global E&C Group” for our Global E&C Group’s projects in Italy, as well as Note 3 to the consolidated financial statements in this quarterly report on Form 10-Q.

Other Deductions, net

	June 30, 2012		June 30, 2011		$ Change		% Change
Quarter Ended	$	12,274	$	6,721	$	5,553		82.6%
Six Months Ended	$	16,338	$	12,838	$	3,500		27.3%

Other deductions, net includes various items, such as legal fees, consulting fees, bank fees, net penalties on unrecognized tax benefits and the impact of net foreign exchange transactions within the period. Net foreign exchange transactions include the net amount of transaction losses and gains that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of our subsidiaries.

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Other deductions, net in the second quarter of 2012 consisted primarily of legal fees of $3,300, a net foreign exchange transaction loss of $3,200, net penalties on unrecognized tax benefits of $2,300, a $1,500 charge recognized by our Global E&C Group in the second quarter of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy that, due to recent legislation, was no longer an economically viable project, and bank fees of $800. The increase in other deductions, net in the second quarter of 2012, compared to the same period in 2011, was primarily the net result of an unfavorable impact of $5,100 related to the change in net foreign currency exchange transactions, increased net penalties on unrecognized tax benefits of $1,900 and the unfavorable impact of a $1,500 charge recognized by our Global E&C Group in the second quarter of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy, as further described above, partially offset by decreased legal fees of $2,600.

Other deductions, net in the first six months of 2012 consisted primarily of legal fees of $7,300, net penalties on unrecognized tax benefits of $2,700, bank fees of $1,700, a $1,500 charge recognized by our Global E&C Group in the first six months of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy, as further described above, and a net foreign exchange transaction loss of $700. The increase in other deductions, net in the first six months of 2012, compared to the same period in 2011, was primarily the net result of an unfavorable impact of $3,300 related to the change in net foreign currency exchange transactions, increased net penalties on unrecognized tax benefits of $1,600 and the unfavorable impact of a $1,500 charge recognized by our Global E&C Group in the first six months of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy, as further described above, partially offset by decreased legal fees of $2,000.

Net foreign currency exchange transaction gains and losses were primarily driven by exchange rate fluctuations on cash balances held by certain of our subsidiaries that were denominated in a currency other than the functional currency of those subsidiaries.

Please refer to the section entitled “—Provision for Income Taxes” within this Item 2 for further information related to the impact of penalties on unrecognized tax benefits during the quarter and six months ended June 30, 2012 in connection with an adverse court decision, which we are appealing, with respect to an audit of a prior tax year.

Interest Income

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	2,949	$	4,428	$	(1,479	)		(33.4)%
Six Months Ended	$	6,118	$	7,703	$	(1,585	)		(20.6)%

Interest income decreased in the quarter ended June 30, 2012, compared to the same period in 2011, primarily as a result of lower average cash and cash equivalents balances, while investment yields on cash and cash equivalents balances were relatively unchanged.

Interest income decreased in the six months ended June 30, 2012, compared to the same period in 2011, primarily as a result of lower average cash and cash equivalents balances, partially offset by higher investment yields on cash and cash equivalents balances.

Interest Expense

	June 30, 2012		June 30, 2011		$ Change		% Change
Quarter Ended	$	4,249	$	3,427	$	822		24.0%
Six Months Ended	$	7,665	$	7,306	$	359		4.9%

Interest expense increased in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, primarily as a result of increases in net interest expense on unrecognized tax benefits of $1,300 and $1,200, respectively, partially offset by the favorable impacts from decreased average borrowings, excluding foreign currency translation effects, in the quarter and six months ended June 30, 2012.

Please refer to the section entitled “—Provision for Income Taxes” within this Item 2 for further information related to the impact of interest expense on unrecognized tax benefits during the quarter and six months ended June 30, 2012 in connection with an adverse court decision, which we are appealing, with respect to an audit of a prior tax year.

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Net Asbestos-Related Provision

	June 30, 2012		June 30, 2011		$ Change		% Change
Quarter Ended	$	3,713	$	2,000	$	1,713		85.7%
Six Months Ended	$	5,710	$	2,400	$	3,310		137.9%

The net asbestos-related provision increased during the second quarter of 2012, compared to the same period in 2011, primarily as a result of the unfavorable impact of the revaluation of our U.K. asbestos-related asset of $1,700 recognized during the second quarter of 2012.

The increase in the net asbestos-related provision in the first six months of 2012, compared to the same period in 2011, was the result of the unfavorable impact of the revaluation of our U.K. asbestos-related asset of $1,700 recognized during the first six months of 2012 and the unfavorable impact of the inclusion of a gain on the settlement of coverage litigation with asbestos insurance carriers of $1,600 recognized during the first six months of 2011.

Provision for Income Taxes

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	12,291	$	19,044	$	(6,753	)		(35.5)%
Effective tax rate		25.9%		21.9%
Six Months Ended	$	27,175	$	26,327	$	848			3.2%
Effective tax rate		25.8%		22.0%

The tax provision for each year-to-date period is calculated by multiplying pre-tax income by the estimated annual effective tax rate for such period. Although we are a Swiss corporation, our shares are exclusively listed on a U.S. exchange; therefore, we reconcile our effective tax rate to the U.S. federal statutory rate of 35% to facilitate meaningful comparison with peer companies in the U.S. capital markets. Our effective tax rate can fluctuate significantly from period to period and may differ significantly from the U.S. federal statutory rate as a result of income taxed in various non-U.S. jurisdictions with rates different from the U.S. statutory rate, as a result of our inability to recognize a tax benefit for losses generated by certain unprofitable operations and as a result of the varying mix of income earned in the jurisdictions in which we operate. In addition, our deferred tax assets are reduced by a valuation allowance when, based upon available evidence, it is more likely than not that the tax benefit of loss carryforwards (or other deferred tax assets) will not be realized in the future. In periods when operating units subject to a valuation allowance generate pre-tax earnings, the corresponding reduction in the valuation allowance favorably impacts our effective tax rate. Conversely, in periods when operating units subject to a valuation allowance generate pre-tax losses, the corresponding increase in the valuation allowance has an unfavorable impact on our effective tax rate.

Effective Tax Rate for 2012

Our effective tax rate for the first six months of 2012 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which is expected to contribute to an approximate 16-percentage point reduction in our effective tax rate for the full year 2012, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.

• A valuation allowance increase because we are unable to recognize a tax benefit for losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which is expected to contribute to an approximate four-percentage point increase in our effective tax rate for the full year 2012.

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Effective Tax Rate for 2011

Our effective tax rate for the first six months of 2011 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which contributed to an approximate 16-percentage point reduction in our effective tax rate, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.

• A valuation allowance increase because we were unable to recognize a tax benefit for year-to-date losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which contributed to an approximate four-percentage point increase in our effective tax rate.

In the quarter and six months ended June 30, 2012, we received an adverse court decision, which we are appealing, related to an audit of a prior tax year. As a result of the decision, our provision for income taxes was increased by $1,400, our penalties on unrecognized tax benefits increased by $2,500 and our interest expense on unrecognized tax benefits increased by $300.

We monitor the jurisdictions for which valuation allowances against deferred tax assets were established in previous years, and we evaluate, on a quarterly basis, the need for the valuation allowances against deferred tax assets in those jurisdictions. Such evaluation includes a review of all available evidence, both positive and negative, in determining whether a valuation allowance is necessary.

The majority of the U.S. federal tax benefits, against which valuation allowances have been established, do not expire until 2025 and beyond, based on current tax laws.

Net Income Attributable to Noncontrolling Interests

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	4,258	$	4,527	$	(269	)		(5.9)%
Six Months Ended	$	6,655	$	6,832	$	(177	)		(2.6)%

Net income attributable to noncontrolling interests represents third-party ownership interests in the net income of our Global Power Group’s Martinez, California gas-fired cogeneration subsidiary and our manufacturing subsidiaries in Poland and the People’s Republic of China, as well as our Global E&C Group’s subsidiaries in Malaysia and South Africa. The change in net income attributable to noncontrolling interests is based upon changes in the net income of these subsidiaries and/or changes in the noncontrolling interests’ ownership interest in the subsidiaries.

Net income attributable to noncontrolling interests decreased in the second quarter of 2012, compared to the same period in 2011, which was the net result of decreased net income from our operations in Poland and South Africa, partially offset by increased net income from our operations in Martinez, California.

Net income attributable to noncontrolling interests was relatively unchanged in the first six months of 2012, compared to the same period in 2011, which was the net result of decreased net income from our operations in South Africa, partially offset by increased net income from our operations in Malaysia, Martinez, California and Poland.

EBITDA

EBITDA, as discussed and defined below, is the primary measure of operating performance used by our chief operating decision maker.

In addition to our two business groups, which also represent operating segments for financial reporting purposes, we report corporate center expenses, our captive insurance operation and expenses related to certain legacy liabilities, such as asbestos, in the Corporate and Finance Group, or C&F Group, which also represents an operating segment for financial reporting purposes.

	June 30, 2012		June 30, 2011		$ Change			% Change
Quarter Ended	$	60,175	$	98,286	$	(38,111	)		(38.8)%
Six Months Ended	$	132,141	$	145,090	$	(12,949	)		(8.9)%

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EBITDA decreased in the second quarter of 2012, compared to the same period in 2011, primarily driven by decreased contract profit of $14,100, increased sales pursuit costs of $6,100, decreased equity earnings of $6,700, the unfavorable impact related to the change in net foreign exchange transactions of $5,100, the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized by our Global E&C Group during the second quarter of 2011, increased net penalties on unrecognized tax benefits of $1,900 and the unfavorable impact of a $1,500 charge recognized by our Global E&C Group in the second quarter of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy that, due to recent legislation, was no longer an economically viable project.

EBITDA decreased in the first six months of 2012, compared to the same period in 2011, primarily driven by increased sales pursuit costs of $12,200, decreased equity earnings of $12,100, the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the first six months of 2011, the unfavorable impact related to the change in net foreign exchange transactions of $3,300, increased net asbestos-related provision of $3,300, increased net penalties on unrecognized tax benefits of $1,600 and the unfavorable impact of a $1,500 charge recognized by our Global E&C Group in the first six months of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy, as further described above, partially offset by increased contract profit of $26,000.

Please refer to the preceding discussion of each of these items within this “—Results of Operations” section.

See the individual segment explanations below for additional details.

EBITDA is a supplemental financial measure not defined in generally accepted accounting principles, or GAAP. We define EBITDA as income attributable to Foster Wheeler AG before interest expense, income taxes, depreciation and amortization. We have presented EBITDA because we believe it is an important supplemental measure of operating performance. Certain covenants under our U.S. senior credit agreement use an adjusted form of EBITDA such that in the covenant calculations the EBITDA as presented herein is adjusted for certain unusual and infrequent items specifically excluded in the terms of our U.S. senior credit agreement. We believe that the line item on the consolidated statement of operations entitled “net income attributable to Foster Wheeler AG” is the most directly comparable GAAP financial measure to EBITDA. Since EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net income attributable to Foster Wheeler AG as an indicator of operating performance or any other GAAP financial measure. EBITDA, as calculated by us, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. As EBITDA excludes certain financial information that is included in net income attributable to Foster Wheeler AG, users of this financial information should consider the type of events and transactions that are excluded. Our non-GAAP performance measure, EBITDA, has certain material limitations as follows:

• It does not include interest expense. Because we have borrowed money to finance some of our operations, interest is a necessary and ongoing part of our costs and has assisted us in generating revenue. Therefore, any measure that excludes interest expense has material limitations;

• It does not include taxes. Because the payment of taxes is a necessary and ongoing part of our operations, any measure that excludes taxes has material limitations; and

• It does not include depreciation and amortization. Because we must utilize property, plant and equipment and intangible assets in order to generate revenues in our operations, depreciation and amortization are necessary and ongoing costs of our operations. Therefore, any measure that excludes depreciation and amortization has material limitations.

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A reconciliation of EBITDA to net income attributable to Foster Wheeler AG is shown below.

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
EBITDA:
Global E&C Group	$	39,917		$	54,842		$	86,845		$	96,510
Global Power Group		43,850			67,735			96,166			94,199
C&F Group*		(23,592	)		(24,291	)		(50,870	)		(45,619	)
Total		60,175			98,286			132,141			145,090
Less: Interest expense		4,249			3,427			7,665			7,306
Less: Depreciation and amortization		12,776			12,506			25,796			25,177
Less: Provision for income taxes		12,291			19,044			27,175			26,327
Net income attributable to Foster Wheeler AG	$	30,859		$	63,309		$	71,505		$	86,280

* Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances related to intercompany interest.

EBITDA in the above table includes the following:	Quarter Ended June 30,					Six Months Ended June 30,
	2012			2011		2012		2011
Net (decrease)/increase in contract profit from the regular revaluation of final estimated contract profit revisions:(1)
Global E&C Group(2)	$	(2,800	)	$	1,500	$	5,100	$	3,900
Global Power Group(2)		11,000			14,300		26,500		9,600
Total(2)	$	8,200		$	15,800	$	31,600	$	13,500
Net asbestos-related provisions:(3)
Global E&C Group	$	1,700		$	-	$	1,700	$	-
C&F Group		2,000			2,000		4,000		2,400
Total	$	3,700		$	2,000	$	5,700	$	2,400

⁽¹⁾  Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 to the consolidated financial statements in this quarterly report on Form 10-Q for further information regarding changes in our final estimated contract profit.

⁽²⁾  The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global E&C Group and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 and are included in the six months ended June 30, 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

⁽³⁾  Please refer to Note 12 to the consolidated financial statements in this quarterly report on Form 10-Q for further information regarding the revaluation of our asbestos liability and related asset.

The accounting policies of our business segments are the same as those described in our summary of significant accounting policies as disclosed in our 2011 Form 10-K. The only significant intersegment transactions relate to interest on intercompany balances. We account for interest on those arrangements as if they were third-party transactions (i.e., at current market rates), and we include the elimination of that activity in the results of the C&F Group.

Business Segments

Global E&C Group

	Quarter Ended June 30,									Six Months Ended June 30,
	2012		2011		$ Change			% Change		2012		2011		$ Change			% Change
Operating revenues	$	666,142	$	892,080	$	(225,938	)		(25.3)%	$	1,337,015	$	1,715,823	$	(378,808	)		(22.1)%
EBITDA	$	39,917	$	54,842	$	(14,925	)		(27.2)%	$	86,845	$	96,510	$	(9,665	)		(10.0)%

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Results

Our Global E&C Group’s operating revenues by geographic region for the quarter and six months ended June 30, 2012 and 2011, based upon where our projects are being executed, were as follows:

	Quarter Ended June 30,									Six Months Ended June 30,
	2012		2011		$ Change			% Change		2012		2011		$ Change			% Change
Africa	$	23,637	$	27,081	$	(3,444	)		(12.7)%	$	45,211	$	82,001	$	(36,790	)		(44.9)%
Asia		92,143		163,900		(71,757	)		(43.8)%		193,901		282,598		(88,697	)		(31.4)%
Australasia and other*		119,761		308,363		(188,602	)		(61.2)%		310,519		548,384		(237,865	)		(43.4)%
Europe		143,623		121,183		22,440			18.5%		278,016		234,559		43,457			18.5%
Middle East		60,092		43,972		16,120			36.7%		105,196		104,903		293			0.3%
North America		147,161		166,409		(19,248	)		(11.6)%		253,117		347,746		(94,629	)		(27.2)%
South America		79,725		61,172		18,553			30.3%		151,055		115,632		35,423			30.6%
Total	$	666,142	$	892,080	$	(225,938	)		(25.3)%	$	1,337,015	$	1,715,823	$	(378,808	)		(22.1)%

* Australasia and other primarily represents Australia, New Zealand and the Pacific Islands.

Please refer to the “—Overview of Segment” section below for a discussion of our Global E&C Group’s market outlook.

Quarter Ended June 30, 2012

Our Global E&C Group experienced a decrease in operating revenues of 25% in the second quarter of 2012, compared to the same period in 2011. The decrease in the period was primarily driven by decreased flow-through revenues of $277,400. Excluding flow-through revenues and foreign currency fluctuations, our Global E&C Group’s operating revenues increased 20% in the second quarter of 2012, compared to the same period in 2011.

Our Global E&C Group’s EBITDA decreased in the second quarter of 2012, compared to the same period in 2011, primarily driven by the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the second quarter of 2011, the unfavorable impact of increased sales pursuit costs of $3,900, resulting from increased new proposal activity, the unfavorable impact related to the change in net foreign exchange transactions of $3,600, the unfavorable impact related to net penalties on unrecognized tax benefits of $2,300, the unfavorable impact of a $1,500 charge in the second quarter of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy that, due to recent legislation, was no longer an economically viable project and decreased equity earnings from our Global E&C Group’s projects in Italy of $1,200, partially offset by increased contract profit of $3,200. The increase in contract profit primarily resulted from increased volume of operating revenues, excluding flow-through revenues, partially offset by decreased contract profit margins.

Six Months Ended June 30, 2012

Our Global E&C Group experienced a decrease in operating revenues of 22% in the first six months of 2012, compared to the same period in 2011. The decrease in the period was primarily driven by decreased flow-through revenues of $436,600. Excluding flow-through revenues and foreign currency fluctuations, our Global E&C Group’s operating revenues increased 12% in the first six months of 2012, compared to the same period in 2011.

Our Global E&C Group’s EBITDA decreased in the first six months of 2012, compared to the same period in 2011, primarily driven by the unfavorable impact of increased sales pursuit costs of $8,100, resulting from increased new proposal activity, decreased equity earnings from our Global E&C Group’s projects in Italy of $4,200, the unfavorable impact of the inclusion of a $4,000 gain related to the revaluation of a contingent consideration liability that was recognized during the second quarter of 2011, the unfavorable impact related to the change in net foreign exchange transactions of $3,500 and the unfavorable impact of the inclusion of a $1,500 charge in the first six months of 2012 related to the write-off of capitalized costs for a wind farm development project in Italy, as further described above, partially offset by increased contract profit of $17,400. The increase in contract profit primarily resulted from increased volume of operating revenues, excluding flow-through revenues, and increased contract profit margins.

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Our equity earnings in the first six months of 2012 were unfavorably impacted by the results of one of our projects in Italy that recorded a charge to establish a reserve against its receivable balance for emission rights earned prior to 2012 and experienced decreased earnings as a result of a facility maintenance shutdown during the first quarter of 2012.

Overview of Segment

Our Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation facilities, distribution facilities, gasification facilities and processing facilities associated with the metals and mining sector. Our Global E&C Group is also involved in the design of facilities in developing market sectors, including carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. Additionally, our Global E&C Group is also involved in the development, engineering, construction, ownership and operation of power generation facilities, from conventional and renewable sources, and of waste-to-energy facilities.

Our Global E&C Group provides the following services:

• Design, engineering, project management, construction and construction management services, including the procurement of equipment, materials and services from third-party suppliers and contractors.

• Environmental remediation services, together with related technical, engineering, design and regulatory services.

• Design and supply of direct-fired furnaces, including fired heaters and waste heat recovery generators, used in a range of refinery, chemical, petrochemical, oil and gas processes, including furnaces used in our proprietary delayed coking and hydrogen production technologies.

Our Global E&C Group owns one of the leading technologies (SYDEC^SM delayed coking) used in refinery residue upgrading, in addition to other refinery residue upgrading technologies (solvent deasphalting and visbreaking), and a hydrogen production process used in oil refineries and petrochemical plants. We also own a proprietary sulfur recovery technology which is used to treat gas streams containing hydrogen sulfide for the purpose of reducing the sulfur content of fuel products and to recover a saleable sulfur by-product. Additionally, our Global E&C Group has experience with, and is able to work with, a wide range of processes owned by others.

Our Global E&C Group generates revenues from design, engineering, procurement, construction and project management activities pursuant to contracts spanning up to approximately four years in duration and generates equity earnings from returns on its noncontrolling interest investments in various power production facilities.

In the engineering and construction industry, we expect long-term demand to be strong for the end products produced by our clients, and we believe that this long-term demand will continue to stimulate investment by our clients in new, expanded and upgraded facilities. Our clients plan their investments based on long-term time horizons. We believe that global demand for energy, chemicals and pharmaceuticals will continue to grow over the long-term and that clients will continue to invest in new and upgraded capacity to meet that demand.

Global markets in the engineering and construction industry have experienced intense competition among engineering and construction contractors and pricing pressure for contracts awarded. Additionally, some clients have been releasing, and continue to release, tranches of work on a piecemeal basis. The engineering and construction industry may be further impacted by potential downside risk to global economic growth driven primarily by continued sovereign debt and bank funding pressures in the Eurozone, the speed at which governmental efforts directed at spending and debt reduction are being implemented, a slowdown in the economic growth rate in China and geopolitical oil supply risks, which could impact global economic growth through a significant rise in oil prices. If these risks materialize, our Global E&C Group could be impacted. However, we are seeing clients developing new projects and reactivating planned projects that had previously been placed on hold.

We have continued to be successful in booking contracts of varying types and sizes in our key end markets, including an owner’s engineering contract for a liquefied natural gas liquefaction facility in the U.S., an engineering and procurement award for delayed coker heaters in Asia, a front-end engineering design, or FEED, award for an upgrading unit in South America, an additional engineering, procurement and construction management, or EPCm, award for a refinery project in North America, an early detailed engineering award for a new refinery in South America, an additional EPCm award for a gas storage facility in Europe, an engineering and procurement award for a steam reformer heater in Russia, a delayed coker process award design package for an upgrader in South America, and FEED and project management consultancy awards for chemicals facilities in Asia.

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Our success in this regard is a reflection of our safety performance, our technical expertise, our project execution performance, our long-term relationships with clients, and our selective approach in pursuit of new prospects where we believe we have significant differentiators.

Global Power Group

	Quarter Ended June 30,								Six Months Ended June 30,
	2012		2011		$ Change		% Change		2012		2011		$ Change		% Change
Operating revenues	$	276,884	$	291,798	$	(14,914)		(5.1)%	$	539,107	$	504,307	$	34,800		6.9%
EBITDA	$	43,850	$	67,735	$	(23,885)		(35.3)%	$	96,166	$	94,199	$	1,967		2.1%

Results

Our Global Power Group’s operating revenues by geographic region for the quarter and six months ended June 30, 2012 and 2011, based upon where our projects are being executed, were as follows:

	Quarter Ended June 30,								Six Months Ended June 30,
	2012		2011		$ Change		% Change		2012		2011		$ Change		% Change
Africa	$	1,272	$	882	$	390		44.2%	$	2,450	$	882	$	1,568		177.8%
Asia		99,024		65,464		33,560		51.3%		212,180		135,081		77,099		57.1%
Australasia and other*		-		6		(6)		(100.0)%		-		6		(6)		(100.0)%
Europe		96,532		126,933		(30,401)		(24.0)%		180,916		201,185		(20,269)		(10.1)%
Middle East		4,473		11,839		(7,366)		(62.2)%		7,653		20,741		(13,088)		(63.1)%
North America		67,533		78,867		(11,334)		(14.4)%		120,068		131,148		(11,080)		(8.4)%
South America		8,050		7,807		243		3.1%		15,840		15,264		576		3.8%
Total	$	276,884	$	291,798	$	(14,914)		(5.1)%	$	539,107	$	504,307	$	34,800		6.9%

* Australasia and other primarily represents Australia, New Zealand and the Pacific Islands.

Please refer to the “—Overview of Segment” section below for a discussion of our Global Power Group’s market outlook.

Quarter Ended June 30, 2012

Our Global Power Group experienced a decrease in operating revenues in the second quarter of 2012, compared to the same period in 2011. The decrease was primarily driven by the unfavorable impact of foreign currency fluctuations. Excluding foreign currency fluctuations, our Global Power Group’s operating revenues increased 2% in the second quarter of 2012, compared to the same period in 2011.

Our Global Power Group’s EBITDA decreased in the second quarter of 2012, compared to the same period in 2011, primarily driven by decreased contract profit of $17,200. The decrease in contract profit primarily resulted from decreased contract profit margins, partially offset by increased volume of operating revenues, excluding the impact of foreign currency fluctuations. The decrease in EBITDA also included the unfavorable impact of decreased equity earnings from our Global Power Group’s project in Chile of $5,500 and the favorable impact of decreased legal fees of $3,200. Please see below for further discussion regarding our Global Power Group’s project in Chile.

Six Months Ended June 30, 2012

Our Global Power Group experienced an increase in operating revenues in the six months ended June 30, 2012, compared to the same period in 2011. The increase was primarily driven by increased volume of business, partially offset by the unfavorable impact of foreign currency fluctuations. Excluding foreign currency fluctuations, our Global Power Group’s operating revenues increased 13% in the six months ended June 30, 2012, compared to the same period in 2011.

Our Global Power Group’s EBITDA increased in the six months ended June 30, 2012, compared to the same period in 2011, primarily driven by increased contract profit of $8,700. The increase in contract profit primarily resulted from increased volume of operating revenues and, to a lesser extent, increased contract profit

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margins. Additionally, the increase in contract profit included the favorable impact of a settlement with a subcontractor of approximately $6,900 during the first six months of 2012 and the favorable impact of the inclusion of an out-of-period correction recorded in the six months ended June 30, 2011 for a reduction of final estimated profit of approximately $4,600, both of which are discussed in the preceding section within this Item 2 entitled “—Results of Operations-EBITDA”. The increase in EBITDA also included the unfavorable impact of decreased equity earnings from our Global Power Group’s project in Chile of $8,100 and the favorable impact of decreased legal fees of $3,400. Please see below for further discussion regarding our Global Power Group’s project in Chile.

Equity Earnings from Project in Chile

On February 27, 2010, an earthquake occurred off the coast of Chile that caused significant damage to our Global Power Group’s project in Chile. As a result of the damage, the project’s facility suspended normal operating activities on that date. The project included an estimated recovery under its business interruption insurance policy in its financial statements, which covered through the period while the facility suspended normal operating activities. In accordance with authoritative accounting guidance on business interruption insurance, the project recorded an estimated recovery for lost profits as substantially all contingencies related to the insurance claim had been resolved as of the third quarter of 2010. The facility began operating at less than normal utilization during the second quarter of 2011 and achieved normal operating activities in the third quarter of 2011.

Our equity earnings from our project in Chile were $6,100 and $11,600 in the second quarter of 2012 and 2011, respectively. Our equity earnings from our project in Chile were $13,400 and $21,500 in the six months ended June 30, 2012 and 2011, respectively. The decrease in equity earnings in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, included the impact of lower marginal rates in 2012 for electrical power generation.

Overview of Segment

Our Global Power Group designs, manufactures and erects steam generators and auxiliary equipment for electric power generating stations, district heating and power plants and industrial facilities worldwide. Our competitive differentiation in serving these markets is the ability of our products to cleanly and efficiently burn a wide range of fuels, singularly or in combination. In particular, our circulating fluidized-bed, which we refer to as CFB, steam generators are able to burn coals of varying quality, as well as petroleum coke, lignite, municipal waste, waste wood, biomass, and numerous other materials. Among these fuel sources, coal is the most widely used, and thus the market drivers and constraints associated with coal strongly affect the steam generator market and our Global Power Group’s business. Additionally, our Global Power Group owns and operates a waste-to-energy facility; holds a controlling interest and operates a combined-cycle gas turbine facility; owns a noncontrolling interest in a petcoke-fired CFB facility for refinery steam and power generation; and operates a university cogeneration power facility for steam/electric generation.

Our Global Power Group offers a number of other products and services related to steam generators, including:

• Designing, manufacturing and installing auxiliary and replacement equipment for utility power and industrial facilities, including surface condensers, feedwater heaters, coal pulverizers, steam generator coils and panels, biomass gasifiers, and replacement parts for steam generators.

• Design, supply and installation of nitrogen-oxide, or NO_x, reduction systems and components for pulverized coal steam generators such as selective catalytic reduction systems, low NO_x combustion systems, low NO_x burners, primary combustion and overfire air systems and components, fuel and combustion air measuring and control systems and components.

• Design, supply and installation of flue gas desulfurization equipment for all types of steam generators and industrial equipment.

• A broad range of site services including construction and erection services, maintenance engineering, steam generator upgrading and life extension, and plant repowering.

• Research and development in the areas of combustion, fluid and gas dynamics, heat transfer, materials and solid mechanics.

• Technology licenses to other steam generator suppliers in select countries.

We believe that there will be sustained demand in 2012, compared to 2011, for the products and services of our Global Power Group, with opportunities in Asia, the Middle East and South America driven by growing electricity demand and industrial production in these regions.

A number of constraining market factors continue to impact the markets that we serve. Political and environmental sensitivity regarding coal-fired steam generators continues to cause prospective projects utilizing coal

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as their primary fuel to be postponed or cancelled as clients experience difficulty in obtaining the required environmental permits or decide to wait for additional clarity regarding governmental regulations. The sensitivity has been especially pronounced in the U.S. and Western Europe and with the concern that coal-fired steam generators, relative to alternative fuel sources, contribute more toward global warming through the discharge of greenhouse gas emissions into the atmosphere. The outlook for continued lower natural gas pricing over the next three to five years, driven by increasing supply and new liquefied natural gas capacity, has increased the attractiveness of natural gas, in relation to coal, for the generation of electricity. In addition, the constraints on the global credit market may continue to impact some of our clients’ investment plans as these clients are affected by the availability and cost of financing, as well as their own financial strategies, which could include cash conservation. These factors could negatively impact investment in the power sector, which in turn could negatively impact our Global Power Group’s business.

There is potential downside risk to global economic growth driven primarily by continued sovereign debt and bank funding pressures in the Eurozone, the speed at which governmental efforts directed at spending and debt reduction are being implemented and geopolitical oil supply risks, which could impact global economic growth through a significant rise in oil prices. If these risks materialize, our Global Power Group could be impacted.

Longer-term, we believe that global demand for electrical energy will continue to grow. We believe that the majority of the growth will be driven by emerging economies and that solid-fuel-fired steam generators will continue to fill a significant portion of the incremental growth in new generating capacity in the emerging economies.

Globally, we see a growing need to repower older coal plants with new, more efficient and cleaner burning plants, including both coal and other fuels, in order to meet environmental, financial and reliability goals set by policy makers in many countries. The fuel flexibility of our CFB steam generators enables them to burn a wide variety of fuels other than coal and to produce carbon-neutral electricity when fired by biomass. In addition, our utility steam generators can be designed to incorporate supercritical steam technology, which we believe significantly improves power plant efficiency and reduces power plant emissions.

We are currently executing a project for four 550 MWe supercritical CFB steam generators for a power project in South Korea, which we believe is an indication of the successful scale-up of our CFB technology and further advances our CFB supercritical technology with a vertical-tube, once-through design. Commercial operation of the units is scheduled for 2015.

We completed an engineering and supply project for a pilot-scale (approximately 30 megawatt thermal, equivalent to approximately 10 megawatt electrical, or MWe) CFB steam generator, which incorporates our carbon-capturing Flexi-Burn^TM technology. Further, we are executing a project, together with other parties, which is funded by a grant agreement with the European Commission, or EC, to support the technology development of a commercial scale (approximately 300 MWe) Carbon Capture and Storage, or CCS, demonstration plant featuring our Flexi-Burn^TM CFB technology.

Recently we were awarded a contract for the construction of a large solar plant in the U.S. The solutions we provide are based on our clients’ varied needs and we believe our success in winning new awards comes from our track record of developing innovative technology to competitively combine reliability with efficiency and achieve environmental goals.

Liquidity and Capital Resources

Cash Flows Activities

Our cash and cash equivalents, short-term investments and restricted cash balances were:

	As of
	June 30, 2012		December 31, 2011		$ Change			% Change
Cash and cash equivalents	$	767,259	$	718,049	$	49,210			6.9%
Short-term investments		-		1,294		(1,294	)		(100.0)%
Restricted cash		35,384		44,094		(8,710	)		(19.8)%
Total	$	802,643	$	763,437	$	39,206			5.1%

Total cash and cash equivalents, short-term investments and restricted cash held by our non-U.S. entities as of June 30, 2012 and December 31, 2011 were $547,500 and $630,000, respectively.

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During the first six months of 2012, we experienced an increase in cash and cash equivalents of $49,200, primarily as a result of cash provided by operating activities of $80,500. The increase in cash and cash equivalents also included the net impact of capital expenditures of $16,200, distributions to noncontrolling interests of $11,700 and cash used to repurchase shares and to pay related commissions under our share repurchase program of $11,000.

Cash Flows from Operating Activities

	Six Months Ended June 30,
	2012		2011		$ Change
Net cash provided by operating activities	$	80,544	$	138,964	$	(58,420	)

Net cash provided by operating activities in the first six months of 2012 primarily resulted from cash provided by net income of $132,600, which excludes non-cash charges of $54,500, partially offset by cash used for working capital of $37,800 and mandatory contributions to our non-U.S. pension plans of $10,800.

The decrease in net cash provided by operating activities of $58,400 in the first six months of 2012, compared to the same period of 2011, resulted primarily from a decrease in cash related to working capital of $64,000 and decreased cash provided by net income of $9,000, partially offset by decreased cash used for asbestos-related activities of $13,600.

Working capital varies from period to period depending on the mix, stage of completion and commercial terms and conditions of our contracts and the timing of the related cash receipts. During the first six months of 2012, we used cash to fund working capital, as cash used for services rendered and purchases of materials and equipment exceeded cash receipts from client billings. During the first six months of 2012, we used cash to fund working capital in our Global E&C Group, partially offset by cash generated from the conversion of working capital in our Global Power Group. We generated cash from the conversion of working capital during the first six months of 2011, as cash receipts from client billings exceeded cash used for services rendered and purchases of materials and equipment.

As more fully described below in “—Outlook,” we believe our existing cash balances and forecasted net cash provided from operating activities will be sufficient to fund our operations throughout the next 12 months. Our ability to increase our cash flows from operating activities in future periods will depend in large part on the demand for our products and services and our operating performance in the future. Please refer to the sections entitled “—Global E&C Group-Overview of Segment” and “—Global Power Group-Overview of Segment” above for our view of the outlook for each of our business segments.

Cash Flows from Investing Activities

	Six Months Ended June 30,
	2012			2011			$ Change
Net cash used in investing activities	$	(1,707	)	$	(28,059	)	$	26,352

The net cash used in investing activities in the first six months of 2012 was attributable primarily to capital expenditures of $16,200, partially offset by a decrease in restricted cash, excluding foreign currency translation effects, of $7,900 and a return of investment from unconsolidated affiliates of $6,200.

The net cash used in investing activities in the first six months of 2011 was attributable primarily to capital expenditures of $17,300 and an increase in restricted cash, excluding foreign currency translation effects, of $12,100.

The capital expenditures in the first six months of 2012 and 2011 related primarily to leasehold improvements, information technology equipment and office equipment.

Cash Flows from Financing Activities

	Six Months Ended June 30,
	2012			2011			$ Change
Net cash used in financing activities	$	(28,617	)	$	(164,083	)	$	135,466

The net cash used in financing activities in the first six months of 2012 was attributable primarily to distributions to noncontrolling interests of $11,700, cash used to repurchase shares and to pay related commissions under our share repurchase program of $11,000 and repayment of debt and capital lease obligations of $6,500.

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The net cash used in financing activities in the first six months of 2011 was attributable primarily to cash used to repurchase shares and to pay related commissions under our share repurchase program of $160,100. Other financing activities included cash provided from exercises of stock options of $11,800, partially offset by distributions to noncontrolling interests of $8,700.

Outlook

Our liquidity forecasts cover, among other analyses, existing cash balances, cash flows from operations, cash repatriations, changes in working capital activities, unused credit line availability and claim recoveries and proceeds from asset sales, if any. These forecasts extend over a rolling 12-month period. Based on these forecasts, we believe our existing cash balances and forecasted net cash provided by operating activities will be sufficient to fund our operations throughout the next 12 months. Based on these forecasts, our primary cash needs will be working capital, capital expenditures, pension contributions and net asbestos-related payments. We may also use cash for acquisitions, discretionary pension plan contributions or to repurchase our shares under the share repurchase program, as described further below. The majority of our cash balances are invested in short-term interest bearing accounts with maturities of less than three months at creditworthy financial institutions around the world. Further significant deterioration of the current global economic and credit market environment, particularly in the Eurozone countries, could challenge our efforts to maintain our well-diversified asset allocation with creditworthy financial institutions and/or unfavorably impact our liquidity and financial statements. We will continue to monitor the global economic environment, particularly in those countries where we have operations or assets. We continue to consider investing some of our cash in longer-term investment opportunities, including the acquisition of other entities or operations in the engineering and construction industry or power industry and/or the reduction of certain liabilities, such as unfunded pension liabilities.

It is customary in the industries in which we operate to provide standby letters of credit, bank guarantees or performance bonds in favor of clients to secure obligations under contracts. We believe that we will have sufficient letter of credit capacity from existing facilities throughout the next 12 months.

We are dependent on cash repatriations from our subsidiaries to cover essentially all payments and expenses of our holding company in Switzerland, to cover cash needs related to our asbestos-related liability and other overhead expenses in the U.S. and, at our discretion, the acquisition of our shares under our share repurchase program, as described further below. Consequently, we require cash repatriations to Switzerland and the U.S. from our entities located in other countries in the normal course of our operations to meet our Swiss and U.S. cash needs and have successfully repatriated cash for many years. We believe that we can repatriate the required amount of cash to Switzerland and the U.S. Additionally, we continue to have access to the revolving credit portion of our U.S. senior credit facility, if needed.

Our net asbestos-related payments are the result of asbestos liability indemnity and defense costs payments in excess of insurance settlement proceeds. During the first six months of 2012, we had net asbestos-related cash outflows of approximately $6,900. We expect the 2012 full year net cash outflows to be approximately $7,900. This estimate assumes no additional settlements with insurance companies or elections by us to fund additional payments. As we continue to collect cash from insurance settlements and assuming no increase in our asbestos-related insurance liability or any future insurance settlements, the asbestos-related insurance receivable recorded on our balance sheet will continue to decrease.

On July 30, 2010, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.’s subsidiaries and BNP Paribas, as Administrative Agent, entered into a four-year amendment and restatement of our U.S. senior credit agreement, which we entered into in October 2006. The amended and restated U.S. senior credit agreement, which became an unsecured facility in March 2012 as described below, provides for a facility of $450,000, and includes a provision which permits future incremental increases of up to an aggregate of $225,000 in total additional availability under the facility. The amended and restated U.S. senior credit agreement permits us to issue up to $450,000 in letters of credit under the facility. Letters of credit issued under the amended and restated U.S. senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in our corporate credit rating as reported by Moody’s Investors Service, which we refer to as Moody’s, and/or Standard & Poor’s, which we refer to as S&P. We received a corporate credit rating of BBB- as issued by S&P during the third quarter of 2010, which, under the amended and restated U.S. senior credit agreement, reduced our pricing for letters of credit issued under the agreement. We received a corporate credit rating of Baa3 as issued by Moody’s during the first quarter of 2012, which led to the automatic release and termination of all liens securing our obligations under the agreement. Based on our current credit ratings, letter of credit fees for performance and financial letters of credit issued under the amended and restated U.S. senior credit agreement are 1.000% and 2.000% per annum of the outstanding amount, respectively, excluding fronting fees. We also have the option to use up to $100,000 of the $450,000 for revolving borrowings at a rate equal to adjusted LIBOR, as defined in the agreement, plus 2.000%, subject also to the performance pricing noted above.

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Prior to becoming an unsecured facility in March 2012, our amended and restated U.S. senior credit agreement required that the assets and/or stock of certain of our subsidiaries be held as collateral.

We had approximately $275,500 and $225,600 of letters of credit outstanding under our U.S. senior credit agreement as of June 30, 2012 and December 31, 2011, respectively. There were no funded borrowings under our U.S. senior credit agreement outstanding as of June 30, 2012 and December 31, 2011. Based on our current operating plans and cash forecasts, we do not intend to borrow under our U.S. senior credit facility over the next 12 months. Please refer to Note 5 to the consolidated financial statements in this quarterly report on Form 10-Q for further information regarding our debt obligations.

On February 27, 2010, an earthquake occurred off the coast of Chile that caused significant damage to our unconsolidated affiliate’s facility in Chile. As a result of the damage, the project’s facility suspended normal operating activities on that date and subsequently filed claims with its insurance carrier for property damage and business interruption recoveries. Based on the assessments and cost estimate, as well as correspondence received from the insurance carrier, we expect the property damage and business interruption insurance recoveries to be sufficient to cover the costs of repairing the facility and to substantially compensate our unconsolidated affiliate for the loss of profits while the facility suspended normal operating activities. Our unconsolidated affiliate’s receivable related to the remaining balance under its property damage and business interruption insurance recovery assessment was approximately $68,100 as of June 30, 2012. The facility achieved normal operating activities in the third quarter of 2011.

We are not required to make any mandatory contributions to our U.S. pension plans in 2012 based on the minimum statutory funding requirements. We made mandatory contributions totaling approximately $10,800 to our non-U.S. pension plans during the first six months of 2012. Based on the minimum statutory funding requirements for 2012, we expect to make mandatory contributions totaling approximately $22,800 to our non-U.S. pension plans for the full year. Additionally, we may elect to make discretionary contributions to our U.S. and/or non-U.S. pension plans during 2012.

On September 12, 2008, we announced a share repurchase program pursuant to which our Board of Directors authorized the repurchase of up to $750,000 of our outstanding shares and the designation of the repurchased shares for cancellation. On November 4, 2010, our Board of Directors proposed an increase to our share repurchase program of $335,000, which was approved by our shareholders at an extraordinary general meeting on February 24, 2011. On February 22, 2012, our Board of Directors proposed an additional increase to our share repurchase program of approximately $419,400, which was approved by our shareholders at our 2012 annual general meeting on May 1, 2012.

Based on the aggregate share repurchases under our program through June 30, 2012, we were authorized to repurchase up to an additional $500,000 of our outstanding shares. Any repurchases will be made at our discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors. The program does not obligate us to acquire any particular number of shares. The program has no expiration date and may be suspended or discontinued at any time. Any repurchases made pursuant to the share repurchase program will be funded using our cash on hand. Through June 30, 2012, we have repurchased 40,215,749 shares for an aggregate cost of approximately $1,004,400 since the inception of the repurchase program announced on September 12, 2008. We have executed the repurchases in accordance with 10b5-1 repurchase plans as well as other privately negotiated transactions pursuant to our share repurchase program. The 10b5-1 repurchase plans allow us to purchase shares at times when we may not otherwise do so due to regulatory or internal restrictions. Purchases under the 10b5-1 repurchase plans are based on parameters set forth in the plans. For further information, please refer to Part II, Item 2 of this quarterly report on Form 10-Q.

We have not declared or paid a cash dividend since July 2001 and we do not have any plans to declare or pay any cash dividends. Our current U.S. senior credit agreement contains limitations on cash dividend payments as well as other restricted payments.

Off-Balance Sheet Arrangements

We own several noncontrolling interests in power projects in Chile and Italy. Certain of the projects have third-party debt that is not consolidated in our balance sheet. We have also issued certain guarantees for our project in Chile. Please refer to Note 3 to the consolidated financial statements in this quarterly report on Form 10-Q for further information related to these projects.

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Backlog and New Orders

New orders are recorded and added to the backlog of unfilled orders based on signed contracts as well as agreed letters of intent, which we have determined are legally binding and likely to proceed. Although backlog represents only business that is considered likely to be performed, cancellations or scope adjustments may and do occur. The elapsed time from the award of a contract to completion of performance may be up to approximately four years. The dollar amount of backlog is not necessarily indicative of our future earnings related to the performance of such work due to factors outside our control, such as changes in project schedules, scope adjustments or project cancellations. We cannot predict with certainty the portion of backlog to be performed in a given year. Backlog is adjusted quarterly to reflect new orders, project cancellations, deferrals, revised project scope and cost and sales of subsidiaries, if any.

Backlog measured in Foster Wheeler scope reflects the dollar value of backlog excluding third-party costs incurred by us on a reimbursable basis as agent or principal, which we refer to as flow-through costs. Foster Wheeler scope measures the component of backlog with profit potential and corresponds to our services plus fees for reimbursable contracts and total selling price for fixed-price or lump-sum contracts.

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New Orders, Measured in Terms of Future Revenues

	June 30, 2012						June 30, 2011
	Global E&C Group		Global Power Group		Total		Global E&C Group		Global Power Group		Total
By Project Location:
Quarter Ended
North America	$	91,000	$	67,400	$	158,400	$	81,100	$	51,900	$	133,000
South America		60,900		8,800		69,700		156,500		9,200		165,700
Europe		120,500		30,300		150,800		112,400		46,700		159,100
Asia		101,100		9,500		110,600		219,500		468,000		687,500
Middle East		65,100		200		65,300		29,400		100		29,500
Africa		4,400		-		4,400		5,700		100		5,800
Australasia and other*		53,900		-		53,900		60,300		-		60,300
Total	$	496,900	$	116,200	$	613,100	$	664,900	$	576,000	$	1,240,900
Six Months Ended
North America	$	144,300	$	108,000	$	252,300	$	165,100	$	134,500	$	299,600
South America		132,000		16,300		148,300		225,600		13,100		238,700
Europe		333,900		110,000		443,900		262,900		77,800		340,700
Asia		202,000		43,300		245,300		303,700		480,400		784,100
Middle East		110,300		300		110,600		55,600		8,100		63,700
Africa		17,400		-		17,400		53,200		5,800		59,000
Australasia and other*		229,600		-		229,600		318,600		-		318,600
Total	$	1,169,500	$	277,900	$	1,447,400	$	1,384,700	$	719,700	$	2,104,400
By Industry:
Quarter Ended
Power generation	$	18,900	$	86,500	$	105,400	$	4,900	$	545,600	$	550,500
Oil refining		210,700		-		210,700		483,600		-		483,600
Pharmaceutical		20,500		-		20,500		17,700		-		17,700
Oil and gas		157,500		-		157,500		73,900		-		73,900
Chemical/petrochemical		73,500		-		73,500		74,900		-		74,900
Power plant operation and maintenance		5,200		29,700		34,900		3,800		30,400		34,200
Environmental		2,100		-		2,100		1,600		-		1,600
Other, net of eliminations		8,500		-		8,500		4,500		-		4,500
Total	$	496,900	$	116,200	$	613,100	$	664,900	$	576,000	$	1,240,900
Six Months Ended
Power generation	$	45,900	$	224,600	$	270,500	$	8,200	$	667,400	$	675,600
Oil refining		519,500		-		519,500		807,500		-		807,500
Pharmaceutical		35,400		-		35,400		25,600		-		25,600
Oil and gas		364,100		-		364,100		350,400		-		350,400
Chemical/petrochemical		171,400		-		171,400		162,500		-		162,500
Power plant operation and maintenance		10,900		53,300		64,200		9,000		52,300		61,300
Environmental		5,500		-		5,500		3,200		-		3,200
Other, net of eliminations		16,800		-		16,800		18,300		-		18,300
Total	$	1,169,500	$	277,900	$	1,447,400	$	1,384,700	$	719,700	$	2,104,400

* Australasia and other primarily represents Australia, New Zealand and the Pacific Islands.

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Backlog, Measured in Terms of Future Revenues

	As of June 30, 2012						As of December 31, 2011
	Global E&C Group		Global Power Group		Total		Global E&C Group		Global Power Group		Total
By Contract Type:
Lump-sum turnkey	$	-	$	120,800	$	120,800	$	-	$	164,300	$	164,300
Other fixed-price		468,200		790,500		1,258,700		515,400		997,200		1,512,600
Reimbursable		1,727,000		35,500		1,762,500		1,904,800		44,400		1,949,200
Total	$	2,195,200	$	946,800	$	3,142,000	$	2,420,200	$	1,205,900	$	3,626,100
By Project Location:
North America	$	370,200	$	195,900	$	566,100	$	483,200	$	217,400	$	700,600
South America		315,800		27,500		343,300		328,100		25,500		353,600
Europe		668,000		183,400		851,400		637,100		234,500		871,600
Asia		361,600		532,700		894,300		413,300		711,100		1,124,400
Middle East		320,300		7,300		327,600		275,700		15,000		290,700
Africa		60,000		-		60,000		104,700		2,400		107,100
Australasia and other*		99,300		-		99,300		178,100		-		178,100
Total	$	2,195,200	$	946,800	$	3,142,000	$	2,420,200	$	1,205,900	$	3,626,100
By Industry:
Power generation	$	314,000	$	830,900	$	1,144,900	$	304,000	$	1,090,000	$	1,394,000
Oil refining		1,261,300		-		1,261,300		1,468,400		-		1,468,400
Pharmaceutical		33,800		-		33,800		28,200		-		28,200
Oil and gas		256,800		-		256,800		303,600		-		303,600
Chemical/petrochemical		308,200		-		308,200		287,900		-		287,900
Power plant operations and maintenance		-		115,900		115,900		-		115,900		115,900
Environmental		4,100		-		4,100		3,600		-		3,600
Other, net of eliminations		17,000		-		17,000		24,500		-		24,500
Total	$	2,195,200	$	946,800	$	3,142,000	$	2,420,200	$	1,205,900	$	3,626,100
Backlog, measured in terms of Foster Wheeler Scope	$	1,304,000	$	937,300	$	2,241,300	$	1,365,900	$	1,196,400	$	2,562,300
Global E&C Group Man-hours in Backlog (in thousands)		10,300				10,300		11,600				11,600

* Australasia and other primarily represents Australia, New Zealand and the Pacific Islands.

The foreign currency translation impact on backlog and Foster Wheeler scope backlog resulted in decreases of $9,100 and $11,900, respectively, as of June 30, 2012 compared to December 31, 2011.

Inflation

The effect of inflation on our financial results is minimal. Although a majority of our revenues are realized under long-term contracts, the selling prices of such contracts, established for deliveries in the future, generally reflect estimated costs to complete the projects in these future periods. In addition, many of our projects are reimbursable at actual cost plus a fee, while some of the fixed-price contracts provide for price adjustments through escalation clauses.

Application of Critical Accounting Estimates

Our consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America. Management and the Audit Committee of our Board of Directors approve the critical accounting policies. A full discussion of our critical accounting policies and estimates is included in our

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annual report on Form 10-K for the year ended December 31, 2011. We did not have a significant change to the application of our critical accounting policies and estimates during the first six months of 2012.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the first six months of 2012, there were no material changes in the market risks as described in our annual report on Form 10-K for the year ended December 31, 2011.

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this report, our chief executive officer and our chief financial officer carried out an evaluation, with the participation of our Disclosure Committee and management, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Exchange Act Rule 13a-15. Based on this evaluation, our chief executive officer and our chief financial officer concluded, at the reasonable assurance level, that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting in the quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Please refer to Note 12 to the consolidated financial statements in this quarterly report on Form 10-Q for a discussion of legal proceedings, which is incorporated by reference in this Part II.

ITEM 1A.  RISK FACTORS

Information regarding our risk factors appears in Part I, Item 1A, “Risk Factors,” in our annual report on Form 10-K for the year ended December 31, 2011, which we filed with the SEC on February 23, 2012. There have been no material changes in those risk factors.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers (amounts in thousands of dollars, except share data and per share amounts).

On September 12, 2008, we announced a share repurchase program pursuant to which our Board of Directors authorized the repurchase of up to $750,000 of our outstanding shares and the designation of the repurchased shares for cancellation. On November 4, 2010, our Board of Directors proposed an increase to our share repurchase program of $335,000, which was approved by our shareholders at an extraordinary general meeting on February 24, 2011. On February 22, 2012, our Board of Directors proposed an additional increase to our share repurchase program of approximately $419,398, which was approved by our shareholders at our 2012 annual general meeting on May 1, 2012. Under Swiss law, the repurchase of shares in excess of 10% of the company’s share capital must be approved in advance by the company’s shareholders. As of the May 1, 2012 increase, we were authorized to repurchase up to $500,000 of our outstanding shares.

For further information related to our share repurchase program and the cancellation of shares under Swiss law, please refer to Note 1 to the consolidated financial statements in this quarterly report on Form 10-Q.

The following table provides information with respect to purchases under our share repurchase program during the second quarter of 2012.

Fiscal Month	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs			Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2012 through April 30, 2012		-	$	-		-
May 1, 2012 through May 31, 2012		-		-		-
June 1, 2012 through June 30, 2012		-		-		-
Total		-	$	-		-	(2)	$	500,000

(1) During the second quarter of 2012, we did not repurchase any shares pursuant to our share repurchase program. We were authorized to repurchase up to an additional $500,000 of our outstanding shares as of June 30, 2012. The repurchase program has no expiration date and may be suspended for periods or discontinued at any time. We did not repurchase any shares other than through our publicly announced repurchase program.

(2) As of June 30, 2012, an aggregate of 40,215,749 shares were purchased for a total of $1,004,398 since the inception of the repurchase program announced on September 12, 2008.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

ITEM 5.  OTHER INFORMATION

None.

53

ITEM 6. EXHIBITS

Exhibit No.	Exhibits
3.1	Articles of Association of Foster Wheeler AG.
3.2	Organizational Regulations of Foster Wheeler AG. (Filed as Exhibit 3.1 to Foster Wheeler AG’s Form 8-K, filed on May 4, 2012, and incorporated herein by reference.)
23.1	Consent of Analysis, Research & Planning Corporation.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of J. Kent Masters.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Franco Baseotto.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of J. Kent Masters.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Franco Baseotto.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

54

SIGNATURES

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.

FOSTER WHEELER AG

(Registrant)

Date: July 31, 2012	/s/ J. KENT MASTERS
	J. KENT MASTERS
	CHIEF EXECUTIVE OFFICER
Date: July 31, 2012	/s/ FRANCO BASEOTTO
	FRANCO BASEOTTO
	EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER

55

EX-3.1

Exhibit 3.1

Statuten der	Articles of Association of
Foster Wheeler AG	Foster Wheeler AG
mit Sitz in Baar	domiciled in Baar
I.       Firma, Sitz, Zweck und Dauer der Gesellschaft	I.       Company Name, Domicile, Purpose and Duration of the Company
Art. 1 Firma und Sitz	Art. 1 Name and Domicile
Unter der Firma	Under the company name of
Foster Wheeler AG (Foster Wheeler Ltd.) (Foster Wheeler SA)	Foster Wheeler AG (Foster Wheeler Ltd.) (Foster Wheeler SA)
besteht eine Aktiengesellschaft gemäss den Bestimmungen des schweizerischen Obligationenrechts (OR) mit Sitz in Baar.	a corporation exists according to the provisions of the Swiss Code of Obligations (the “CO”) having its seat in Baar.
Art. 2 Zweck	Art. 2 Purpose
1Zweck der Gesellschaft ist der Erwerb, das Halten, das Verwalten, die Verwertung und der Verkauf, direkt oder indirekt, von Beteiligungen an Unternehmen in der Schweiz und im Ausland, insbesondere Unternehmen, die im Ingenieur- und Bauwesen, wie auch in Entwicklung, Konstruktion, Besitz und Betrieb von Kraftwerkseinrichtungen und Kraftwerken sowie in der Finanzierung dieser Aktivitäten tätig sind.	1The purpose of the Company is to acquire, hold, manage, exploit and sell, whether directly or indirectly, participations in businesses in Switzerland and abroad, including but not limited to businesses which are involved in engineering and construction services, the design, manufacture and ownership of power equipment and the ownership and operation of power production and power generation facilities as well as to provide financing for these purposes.
2Die Gesellschaft kann Zweignieder-lassungen und Tochtergesellschaften im	2The Company is empowered to open and maintain domestic and foreign branch

Statuten / Articles of Association—Foster Wheeler AG 2

In- und Ausland errichten, kann sich an Unternehmen im In- und Ausland beteiligen, kann Vertretungen übernehmen, alle Geschäfte eingehen und Verträge abschliessen sowie alles unternehmen, was den Gesellschaftszweck fördert oder direkt und indirekt in den Geschäftsbereich der Gesellschaft fällt. Die Gesellschaft kann Finanzierungen für eigene oder fremde Rechnung vornehmen, sowie Garantien und ähnliche Rechtsgeschäfte zu Gunsten von assoziierten Gesellschaften oder Drittparteien eingehen. Die Gesellschaft kann Grundstücke erwerben, halten, verwalten, belasten und veräussern wie auch Patente, Lizenzen und weiteres geistiges Eigentum erwerben, verwerten, belasten und verkaufen.	offices and subsidiaries, to participate in other domestic or foreign enterprises, to take over agencies, to engage in business and to enter into agreements, and to take all other measures or engage in any other activities which are appropriate to promote the purpose of the Company or are directly or indirectly within the scope of its activities. It may also undertake financing for its own account or for the account of third parties, as well as enter into promise agreements and provide guarantees in favour of associated companies and third parties. The Company may acquire, hold, manage, mortgage and sell real estate as well as acquire, exploit, encumbrance and sell patents, licenses and other intangible assets.
Art. 3 Dauer	Art. 3 Duration
Die Dauer der Gesellschaft ist unbeschränkt.	The duration of the Company is unlimited.
II.     Aktienkapital	II.     Share Capital
Art. 4 Aktien	Art. 4 Shares
1Das Aktienkapital der Gesellschaft beträgt CHF 324’867’009. Es ist eingeteilt in 108’289’003 Namenaktien mit einem Nennwert von CHF 3.- je Aktie.	1The Company’s share capital is CHF 324,867,009. It is divided into 108,289,003 registered shares of CHF 3 par value each.
2Das Aktienkapital ist voll liberiert.	2The share capital is fully paid up.
Art. 5 Bedingtes Aktienkapital	Art. 5 Conditional Share Capital
1Das Aktienkapital der Gesellschaft wird im Maximalbetrag von CHF 179’345’214 durch Ausgabe von höchstens 59’781’738 vollständig zu liberierenden Namenaktien mit einem Nennwert von je CHF 3.— erhöht	1The share capital of the Company shall be increased by an amount not exceeding CHF 179,345,214 through the issue of a maximum of 59,781,738 registered shares, payable in full, each with a par value of CHF 3.—
(a)     im Zusammenhang mit der Ausübung	(a)     in connection with the exercise of

Statuten / Articles of Association—Foster Wheeler AG 3

von Optionsrechten, welche Verwaltungsratsmitgliedern der Gesellschaft sowie Angestellten und Beauftragten, Beratern und anderen Personen, welche für die Gesellschaft, ihre Gruppengesellschaften, oder ihre Partner Dienstleistungen erbringen, eingeräumt wurden;	option rights granted to Directors of the Company and employees, contractors, consultants or other persons providing services to the Company, its Subsidiaries or affiliates;
(b)     im Zusammenhang mit der Ausübung von Wandel-, Options-, Tausch-, Bezugs-, oder ähnlichen Rechten (nachfolgend als die “Aktienbezugsrechte”), welche Dritten oder Aktionären im Zusammenhang mit neuen oder bereits begebenen Anleihen (inklusive Wandel- und Optionsanleihen), Optionen, Warrants, oder anderen Finanzmarktinstrumen-ten (inklusive die Aktienbezugsrechte, welche den Inhabern der ausstehenden Class A Warrants von der er Foster Wheeler Ltd., Hamilton, Bermuda, herausgegeben wurden), die von der Gesellschaft, einer ihrer Gruppen-gesellschaften oder einer deren Rechtsvorgänger gewährt wurden oder noch gewährt werden (die mit den Aktienbezugsrechten verbundenen Finanzmarktinstrumente nachfolgend die “Finanzinstrumente mit Bezugsrechten”).	(b)     through the exercise of conversion, option, exchange, warrant or similar rights granted to third parties or shareholders in connection with bonds (including convertible bonds and bonds with options), options, warrants, notes or other securities newly or already issued (including rights granted to the holders of outstanding class A warrants issued by Foster Wheeler Ltd., Hamilton, Bermuda) by the Company, by one of its Subsidiaries or any of their respective predecessors.
2Der Verwaltungsrat legt die Ausgabekonditionen für die Finanzinstrumente mit Bezugsrechten inklusive der Aktienbezugsrechte fest.	2The Board of Directors shall determine the issue conditions for the securities including the conditions for the conversion, option, exchange, warrant or similar rights.
3Die Bezugsrechte der Aktionäre bezüglich der Aktien, welche gemäss diesem Artikel ausgegeben werden, sind ausgeschlossen. Berechtigt zum Bezug neuer Aktien sind die obgenannten Inhaber der jeweiligen Aktienbezugsrechte gemäss Art. 5 Abs. 1 lit. b, respektive die in Art. 5 Abs. 1 lit. a obstehend aufgeführten Personen.	3Shareholders’ pre-emptive rights are excluded with respect to new shares issued in accordance with this article. Holders of the conversion, option, exchange, warrant or similar rights according to article 5 para 1 lit. b and the persons listed in article 5 para 1 lit. a above, respectively, are entitled to the new shares.
4Die Vorwegzeichnungsrechte der Aktionäre bei der Ausgabe von Finanzinstrumenten mit Bezugsrechten,	4Shareholders’ advance subscription rights with regard to the issuance of the Company or one of its group companies of

Statuten / Articles of Association—Foster Wheeler AG 4

können durch Beschluss des Verwaltungsrates beschränkt oder aufgehoben werden, wenn die Ausgabe (i) zum Zweck der Finanzierung oder Refinanzierung einer Übernahme von Unternehmen, Unternehmensteilen, Beteiligungen oder neuen Investitionen dient oder (ii) auf nationalen oder internationalen Finanzmärkten oder durch Privatplatzierung erfolgt.	any new bonds, option, warrants, notes or other securities granting conversion, option, exchange, warrant or similar rights may be restricted or excluded by decision of the Board of Directors if the issuance (i) is for purposes of financing or refinancing the acquisition of companies, parts of companies or holdings, or new investments, or (ii) occurs on the national or international capital markets or through a private placement.
Werden Vorwegzeichnungsrechte beschränkt oder aufgehoben, gilt folgendes:	If advance subscription rights are restricted or excluded, then
(1)     Die Finanzinstrumente mit Bezugsrechten sind zu den marktüblichen Bedingungen auszugeben;	(1)     the bonds, option, warrants, notes or other securities granting conversion, option, exchange, warrant or similar rights are to be placed at market conditions;
(2)     die Frist zur Ausübung von Aktienbezugsrechten darf zwanzig Jahre nicht übersteigen; und	(2)     the conversion, exchange or exercise period is not to exceed twenty years from the date of the issuance of the securities granting the respective conversion, option, exchange, warrant or similar rights; and
(3)     der Umwandlungs-, Tausch-, oder Ausübungspreis für die neuen Aktien hat mindestens dem Marktpreis im Zeitpunkt der Emission der betreffenden Finanzierungsinstru-mente mit Bezugsrechten zu entsprechen.	(3)     the conversion, exchange or exercise price for the subscription of new shares is to be set at least in line with the market conditions prevailing at the date on which the securities granting these rights are issued.
5Neue Aktien, welche gemäss Art. 5 Abs. 1 lit. a ausgegeben werden, können zu einem Preis ausgegeben werden, der unter dem aktuellen Marktpreis liegt. Der Verwaltungsrat bestimmt die genauen Ausgabekonditionen sowie den Ausgabepreis der Aktien.	5Any new shares issued in accordance with article 5 para 1 lit. a may be issued at a price below the then-current market price. The Board of Directors shall specify the precise conditions of issue including the issue price of the shares.
6Der Erwerb von Namenaktien durch Ausübung von Wandel- und Optionsrechten sowie alle weiteren Übertragungen von Namenaktien unterliegen den Beschränkungen gemäss Art. 8 der Statuten.	6The acquisition of registered shares through the exercise of conversion rights or warrants and any further transfers of registered shares shall be subject to the restrictions specified in article 8 of the Articles of Association.

Statuten / Articles of Association—Foster Wheeler AG 5

Art. 6 Genehmigtes Aktienkapital	Art. 6 Authorized Capital
1Der Verwaltungsrat ist ermächtigt, das Aktienkapital jederzeit bis zum 2. Mai 2013 im Maximalbetrag von CHF 186’953’868 durch Ausgabe von höchstens 62’317’956 vollständig zu liberierenden Namenaktien mit einem Nennwert von CHF 3.— je Aktie zu erhöhen.	1The Board of Directors is authorized to increase the share capital at any time until 2 May 2013 by an amount not exceeding CHF 186’953’868 through the issuance of up to 62’317’956 fully paid up registered shares with a nominal value of CHF 3.— each.
2Erhöhungen durch Festübernahme und Erhöhungen in Teilbeträgen sind zulässig. Der Ausgabepreis, der Zeitpunkt der Dividendenberechtigung und die Art der zu leistenden Einlage und deren Liberierung (inklusive Sacheinlage oder Sachübernahme) werden vom Verwaltungsrat bestimmt.	2Increases through firm underwriting or in partial amounts are permitted. The issue price, the period of entitlement to dividends and the type of consideration or the contribution or underwriting in kind shall be determined by the Board of Directors.
3Der Verwaltungsrat kann nicht ausgeübte Bezugsrechte verfallen lassen oder kann Bezugsrechte, welche nicht ausgeübt wurden, oder Aktien, für welche Bezugsrechte nicht ausgeübt wurden, zu Marktkonditionen platzieren oder anderweitig im Interesse der Gesellschaft verwenden.	3The Board of Directors may allow the preemptive rights that have not been exercised to expire, or it may place the preemptive rights which have not been exercised or shares the preemptive rights of which have not been exercised at market conditions or use them otherwise in the interest of the Company.
4Der Verwaltungsrat kann die Bezugsrechte der Aktionäre entziehen und sie Dritten zuweisen, wenn die neuen Aktien zu folgenden Zwecken verwendet werden:	4The Board of Directors is authorized to withdraw or limit the pre-emptive rights of the shareholders and to allocate them to third parties in the event of the use of these shares for the purpose of
(a)     für die Ausgabe von neuen Aktien, wenn der Ausgabebetrag der neuen Aktien unter Berücksichtigung des Marktpreises festgesetzt wird;	(a)     issuing the new shares, if the issue price of the new shares is determined by reference to the market price;
(b)     für den Erwerb von Unternehmen mittels Aktientausch;	(b)     takeover of enterprises through the exchange of shares;
(c)     für die Finanzierung des Erwerbs von Unternehmen, Unternehmensteilen oder Unternehmensbeteiligungen, oder für die Finanzierung von neuen Investmentprojekten der Gesellschaft;	(c)     financing of the takeover of enterprises or parts thereof, or of participations, or of new investment projects of the Company, or the refinancing of any of the foregoing;

Statuten / Articles of Association—Foster Wheeler AG 6

(d)     für die private oder öffentliche, nationale oder internationale Platzierung von Aktien, um die Transaktionen in lit. c zu finanzieren;	(d)     a national or international private or public placement of shares to finance transactions mentioned in lit. c above;
(e)     für die Erweiterung des Aktionariats in gewissen Finanz- oder Investorenmärkten, mit dem Zweck einer Beteiligung von strategischen Partnern oder im Zusammenhang mit der Kotierung von neuen Aktien an in- und ausländischen Börsen;	(e)     broadening the shareholder constituency in certain financial or investor markets, for purposes of the participation of strategic partners, or in connection with the listing of new shares on domestic or foreign stock exchanges;
(f)      für nationale und internationale Aktienplatzierungen zum Zweck der Erhöhung der Streubesitzes oder zur Einhaltung anwendbarer Kotierungsvorschriften;	(f)      national and international offerings of shares for the purpose of increasing the free float or to meet applicable listing requirements;
(g)     für die Einräumung einer Mehrzuteilungsoption (“greenshoe”) an ein oder mehrere Finanzinstitute im Zusammenhang mit einer Aktienplatzierung;	(g)     an over- allotment option (“greenshoe”) being granted to one or more financial institutions in connection with an offering of shares;
(h)     für die Beteiligung von Verwaltungsräten der Gesellschaft sowie von Mitarbeitern, Beauftragten, Beratern oder anderen Personen, die der Gesellschaft oder einer ihrer Tochtergesellschaften oder Partnern Dienstleistungen erbringen;	(h)     participation of Directors of the Company and employees, contractors, consultants or other persons providing services to the Company, a group company or an affiliate;
(i)      um Kapital auf eine schnelle und flexible Weise zu beschaffen, welche ohne die Ausschliessung der Bezugsrechte der bestehenden Aktionäre nur schwer möglich wäre.	(i)      raising capital in a fast and flexible manner, which would hardly be achieved without the exclusion of the pre-emptive rights of the existing shareholders.
5Der Erwerb von Namenaktien aus genehmigtem Kapital zu allgemeinen Zwecken sowie alle weiteren Übertragungen von Namenaktien unterliegen den Besch-ränkungen gemäss Art. 8 der Statuten.	5The acquisition of registered shares out of authorized share capital for general purposes and any further transfers of registered shares shall be subject to the restrictions specified in Art. 8 of the Articles of Association.

Statuten / Articles of Association—Foster Wheeler AG 7

Art. 7 Form der Aktien	Art. 7 Form of Shares
1Die Aktionäre sind jederzeit berechtigt, von der Gesellschaft eine Bestätigung für die Anzahl der von ihnen gehaltenen Aktien zu erhalten. Die Aktionäre haben keinen Anspruch darauf, dass Aktienzertifikate gedruckt und ausgeliefert werden. Nichtverurkundete Aktien können als Wertrechte (im Sinne des Obligationenrechts) und Bucheffekten (im Sinne des Bucheffektengesetzes) ausgestaltet werden.	1A shareholder may at any time request from the Company an attestation of the number of registered shares held by it. The shareholder is not entitled, however, to request that certificates representing the registered shares be printed and delivered. Uncertificated shares may take the form of book-entry securities (Wertrechte, within the meaning of the Code of Obligations) and intermediary-held securities (Bucheffekten, within the meaning of the Intermediary-Held Securities Act).
2Die Gesellschaft kann zu jedem Zeitpunkt Aktienzertifikate herausgeben und kann zudem, das Einverständnis des Aktionärs vorausgesetzt, bereits herausgegebene Aktienzertifikate ersatzlos annullieren.	2The Company may at any time issue and deliver certificates for the shares, and may, with the consent of the shareholder, cancel issued certificates that are delivered to it without replacement.
3Nichtverurkundete Aktien und die damit verbundenen Rechte können durch Zession übertragen werden, welche sämtliche zugehörigen Rechte der übertragenen Aktien umfasst. Eine solche Zession bedarf zur Wirksamkeit gegenüber der Gesellschaft der Anzeige an die Gesellschaft. Werden nichtverurkundete Aktien für Aktionäre von einem Transfer Agenten, einer Trust-Gesellschaft, Bank oder einer ähnlichen Gesellschaft, welche die Buchwerte der Aktien führt (nachfolgend als der “Transfer Agent”) verwaltet, so können diese Aktien und die damit verbundenen Rechte nur unter Mitwirkung des Transfer Agent übertragen werden.	3Shares not represented by certificates may be transferred by written assignment, which assignment must encompass all appurtenant rights connected with the transferred shares. For the assignment to be valid against the Company, notification to the Company shall be required. If shares not represented by certificates are administered on behalf of a shareholder by a transfer agent, trust company, bank or similar entity handling the book entries of such shares (the “Transfer Agent”), such shares and the appurtenant rights associated therewith may be transferred only with the cooperation of the Transfer Agent.
4Werden nicht-verurkundete Aktien zugunsten von jemand anderem als dem Transfer Agent verpfändet, so ist zur Gültigkeit der Verpfändung eine Anzeige an den Transfer Agent erforderlich. Eine Anzeige an die Gesellschaft ist nicht erforderlich.	4If shares not represented by certificates are pledged in favor of any person other than the Transfer Agent, notification to such Transfer Agent shall be required for the pledge to be effective. A notice to the Company is not necessary.
5Für den Fall, dass die Gesellschaft	5If the Company decides to issue and

Statuten / Articles of Association—Foster Wheeler AG 8

beschliesst, Aktienzertifikate zu drucken und auszugeben, müssen die Aktienzertifikate die Unterschrift von zwei zeichnungsberechtigten Personen tragen. Mindestens eine dieser Personen muss ein Mitglied des Verwaltungsrates sein. Faksimile-Unterschriften sind erlaubt.	deliver share certificates, the share certificates shall bear the signatures of two duly authorized signatories of the Company, at least one of which shall be a Director. These signatures may be facsimile signatures.
6Die Gesellschaft kann in jedem Fall Aktienzertifikate ausgeben, die mehr als eine Aktie verkörpern.	6The Company may in any event issue share certificates representing more than one share.
7Falls die Gesellschaft an einer ausländischen Börse kotiert ist, ist die Gesellschaft berechtigt, die einschlägigen ausländischen Bestimmungen im Zusammenhang mit diesem Artikel zu befolgen.	7In case the Company is listed on any foreign stock exchange the Company is permitted to comply with the relevant rules and regulations that are applied in that foreign jurisdiction with regard to the subject of this article.
Art. 8 Aktienbuch	Art. 8 Shareholders Register
1Die Gesellschaft oder von ihr beauftragte Dritte führen ein Aktienbuch. Darin werden die Eigentümer und Nutzniesser der Aktien inklusive (falls anwendbar) Nominees mit Namen und Vornamen, Wohnort und Adresse (bei juristischen Personen mit Firma und Sitz), der Anzahl und Beschreibung der gehaltenen Aktien, dem Datum, zu welchem eine Person ins Aktienbuch eingetragen wurde wie auch das Datum, an welchem eine Person ihre Aktionärseigenschaft aufgegeben hat, eingetragen.	1The Company shall maintain, itself or through a third party, a share register. The share register shall list the surname, first name and address (in the case of legal entities, the company name and company seat) of the owners and usufructuaries of the shares, including, if applicable, the Nominees, the number and description of the shares held, the date on which each person was entered in the register and the date on which any person ceased to be a shareholder.
2Ändert eine im Aktienbuch eingetragene Person ihre Adresse, so hat sie dies dem Aktienbuchführer mitzuteilen. Solange dies nicht geschehen ist, gelten alle brieflichen Mitteilungen der Gesellschaft an die im Aktienbuch eingetragenen Personen als rechtsgültig an die bisher im Aktienbuch eingetragene Adresse erfolgt. Die Gesellschaft ist berechtigt, die im Aktienbuch vermerkten Aktionäre als den Eigentümer der jeweiligen Aktien zu behandeln. Die Gesellschaft ist nicht verpflichtet, nicht dem Aktienbuch entsprechende Ansprüche Dritter auf	2Any person recorded in the share register shall notify the share registrar of any change in address. Until such notification shall have occurred, all written communication from the Company to persons of record shall be deemed to have validly been made if sent to the address recorded in the share register. The Company shall be entitled to treat the registered shareholder of any share as the owner thereof and accordingly shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person. Dividends and

Statuten / Articles of Association—Foster Wheeler AG 9

Aktien der Gesellschaft anzuerkennen. Alle Dividenden und weiteren Leistungen der Gesellschaft erfolgen ausschliesslich an die im Aktienbuch eingetragenen Personen.	other distributions of the Company will be provided exclusively to the Persons registered in the share register.
3Wer Aktien der Gesellschaft erwirbt, wird auf Antrag hin im Aktienbuch als Aktionär mit Stimmrecht eingetragen, falls der Verwaltungsrat der Eintragung als Aktionär mit Stimmrecht zustimmt. Die Eintragung kann gestützt auf die in diesem Art. 8 genannten Gründe verweigert werden.	3Acquirers of shares shall be recorded upon request in the share register as shareholders with voting rights, provided that the Board of Directors approves the entry. Registration may be refused on the grounds listed in this article 8.
4Erklärt ein Erwerber auf Anfrage des Verwaltungsrates nicht ausdrücklich, dass er die Aktien im eigenen Namen und für eigene Rechnung erworben hat, kann die Eintragung als Aktionär mit Stimmrecht im Aktienbuch verweigert werden. Vorbehältlich Art. 8 Abs. 5 werden Treuhänder und Nominees nur dann im Aktienbuch mit Stimmrecht eingetragen, wenn sie sich gegenüber der Gesellschaft insbesondere dazu verpflichten, jederzeit auf schriftliche Anfrage hin die Namen, Adressen und Aktienbestände von Personen offen zu legen, für welche sie Aktien halten. Wenn ein Clearing Nominee Vollmachten an Teilnehmer gewährt, müssen die Teilnehmer gegenüber der Gesellschaft auf deren schriftliche Anfrage hin die Namen, Adressen und Aktienbestände jeder Person offen legen, welche bei den Teilnehmern Aktien deponiert hat. Der Verwaltungsrat kann mittels einem Ermessensentscheid die Wirksamkeit der obgenannten Vollmachten nicht anerkennen, wenn sich die Teilnehmer weigern, gegenüber der Gesellschaft die obstehenden Umstände offen zu legen. Der Verwaltungsrat ist berechtigt, Clearing Nominees ganz oder teilweise von den Regelungen gemäss Absatz 4 zu befreien.	4The entry of shares as shares with voting rights may be refused by the Board of Directors, if a shareholder who acquired shares does not expressly declare upon request that such shareholder has acquired the shares in its own name and for its own account, provided that, subject to article 8 section 5, the Board of Directors may register Nominees in the share register as shareholders entitled to vote if they undertake in particular the obligation to disclose to the Company at its written request at any time the names, addresses and the share holdings of each person for whom such Nominee is holding shares. If a Clearing Nominee grants proxies to Participants, the Participants must disclose to the Company at its written request the names, addresses and share holdings of each of the Persons who have deposited shares of the Company with such Participant. The Board of Directors may, in its discretion, refuse to give effect to any such proxy if a Participant fails to make the required disclosure. The Board of Directors is authorized to exempt Clearing Nominees from all or some of the requirements set out in this subsection 4.
5Keine natürliche oder juristische Person wird mit Stimmrecht im Umfang von 10% oder mehr des im Handelsregister eingetragenen Aktienkapitals im Aktienregister eingetragen. Diese	5No Person shall be registered with voting rights for 10 % or more of the share capital as recorded in the commercial register. This limitation on registration also applies with respect to shares held by

Statuten / Articles of Association—Foster Wheeler AG 10

Begrenzung der Eintragung findet auch Anwendung auf Aktien, welche von Nominees für Personen gehalten werden, welche an 10 % oder mehr der Aktien wirtschaftlich berechtigt sind (wie in Art. 33 der Statuten definiert), wobei dies unabhängig davon gilt, ob die Aktien des individuellen Nominees die im vorangehenden Satz festgesetzte Begrenzung überschreiten. Der Verwaltungsrat ist berechtigt, Ausnahmen zuzulassen und insbesondere Clearing Nominees im Ausmass von 10 % oder mehr zu registrieren. Die Aktien, welche die Grenze nach diesem Abs. 5 überschreiten, werden im Aktienbuch als Aktien ohne Stimmrecht registriert. Des weiteren ist der Verwaltungsrat berechtigt, von einer Person, die wirtschaftlich an einer Beteiligung an der Gesellschaft im Umfang von 10 % oder mehr des im Handelsregister eingetragenen Aktienkapitals berechtigt ist und dies öffentlich offengelegt hat (insbesondere im Rahmen einer Offenlegung an die SEC oder an die Gesellschaft), Auskunft darüber zu verlangen, ob und allenfalls über welche Nominees oder andere Personen sie als wirtschaftlicher Eigentümer diese Aktien hält.	Nominees on behalf of a Person which Beneficially Owns 10 % or more of the shares of the Company, whether or not any such individual Nominee’s holdings exceed the limit set forth in the preceding sentence. The Board is authorized to grant exceptions to the limitation on registration set forth in this section, including to register in particular Clearing Nominees with 10 % or more of the shares of the Company. The shares exceeding the limit set forth in this section 5 shall be entered in the share register as shares without voting rights. In furtherance of the provisions of this section, the Board of Directors is authorized at any time to request from any Person which discloses publicly, including in any filing with the SEC, or to the Company that it Beneficially Owns 10 % or more of the shares of the Company, that such Person provide information with respect to all of its shares that it Beneficially Owns which are being held by Nominees or other Persons on its behalf.
6Juristische Personen, die durch Kapital, Stimmkraft, Leitung oder auf andere Weise miteinander verbunden sind, sowie alle natürlichen oder juristischen Personen, welche sich durch Absprache, Syndikat oder auf andere Weise zum Zwecke der Umgehung dieser Limite zusammentun, als eine Person im Sinne dieses Artikel 8.	6Legal entities that are linked to one another through capital, voting rights, management or in any other manner, as well as all natural persons or legal entities achieving an understanding or forming a syndicate or otherwise acting in concert to circumvent the regulations concerning the limitation on registration, shall be counted as one Person within the meaning of this article 8.
7Lehnt der Verwaltungsrat die Eintragung als Aktionär mit Stimmrecht ab, be-nachrichtigt er den Aktionär innerhalb von 20 Tagen seit dem Eingang des Ein-tragungsgesuchs. Nicht anerkannte Aktionäre werden als Aktionäre ohne Stimmrecht ins Aktienbuch eingetragen.	7If the Board of Directors refuses to register a shareholder as a shareholder with voting rights, it shall notify the shareholder of such refusal within 20 days upon receipt of the application. Non-recognized shareholders shall be entered in the share register as shareholders without voting rights.

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8Der Verwaltungsrat kann nach Anhörung eines eingetragenen Aktionärs oder Nominees Eintragungen im Aktienbuch mit Rückwirkung auf das Datum der Eintragung streichen, wenn diese durch falsche Angaben zustande gekommen sind. In jedem Fall muss der Betroffene über die Streichung sofort informiert werden.	8After hearing the shareholder or Nominee, the Board of Directors may cancel, with retroactive effect as of the date of the registration, the registration of shareholders if the registration was effected based on false information. The respective shareholder or Nominee shall be informed immediately of the cancellation of the registration.
9Der Verwaltungsrat regelt die Einzelheiten und erlässt Reglemente über die Eintragung von Aktionären, Nominees und Clearing Nominees mit dem Ziel, die Anwendung und Einhaltung dieses Art. 8 zu gewährleisten. In berechtigten Fällen, aber nicht ausschliesslich etwa im Zusammenhang mit der Übernahme von Unternehmen oder Unternehmensteilen, kann der Verwaltungsrat oder eine vom Verwaltungsrat bezeichnete Stelle Ausnahmen von den obgenannten Beschränkungen oder den damit verbundenen Verfahren gewähren.	9The Board of Directors shall specify the details and issue regulations concerning the registration of shareholders, Nominees and Clearing Nominees to ensure the application of and compliance with this article 8. In justified cases, including (but not limited to) in connection with the takeover of enterprises or parts of enterprises, the Board of Directors or a committee designated by the Board of Directors may allow exemptions from the limitation for registration in the share register or the procedures applicable in connection therewith.
10Die in diesem Artikel 8 geregelte Eintragungsbeschränkung gilt auch für Aktien, die über die Ausübung eines Vorwegzeichnungs-, Bezugs-, Options-, Tausch-, oder Wandelrechts gezeichnet oder erworben werden.	10The limitation for registration provided for in this article 8 shall also apply to shares acquired or subscribed by the exercise of pre-emptive, advance subscription, option, exchange or conversion rights.
11Falls die Gesellschaft an einer ausländischen Börse kotiert ist, ist die Gesellschaft berechtigt, die einschlägigen ausländischen Bestimmungen im Zusammenhang mit diesem Artikel zu befolgen.	11In case the Company is listed on any foreign stock exchange the Company is permitted to comply with the relevant rules and regulations that are applied in that foreign jurisdiction with regard to the subject of this article.
12Betreffend Aktionärsrechten von Aktien, welche durch einen Clearing Nominiee gehalten werden, gilt Folgendes: Stimmrechte können durch den Clearing Nominee uneinheitlich und Auskunfts-, Informations- und Klagerechte auch nur für einen Teil der gehaltenen Aktien ausgeübt werden. Vollmachten für die Ausübung sämtlicher Aktionärsrechte (inklusive Klagerechte) können auch nur für einen	12With regard to shareholders’ rights of shares which are held by a Clearing Nominee the following applies: The Clearing Nominee may exercise voting rights in a heterogeneous manner and the rights to obtain and review information as well as the right to sue may be exercised with regard to specific portions of the shares held by a Clearing Nominee. Proxies granted to exercise any shareholders’

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Teil der Aktien ausgestellt werden. Werden Aktien vom Clearing Nominee an den wirtschaftlich Berechtigten oder auf Anordnung des wirtschaftlich Berechtigten an einen Dritten übertragen, bleiben sämtliche Aktionärsrechte von dieser Übertragung unberührt und können vom neuen Inhaber der Aktionärsrechte ausgeübt werden.	rights (including rights to sue) may be granted for specific portions of the shares held by a Clearing Nominee only. Shareholders’ rights shall not be affected in any way by a transfer of shares from the Clearing Nominee to the Beneficial Owner or, upon instruction of the Beneficial Owner, to a third party and the new holder of such transferred shares shall be able to exercise these shareholders’ rights.
13Betreffend Aktionärsklagen wird insbesondere für die Beurteilung des Rechtschutzinteresses und des Schadens auch die Position des wirtschaftlich Berechtigten berücksichtigt.	13With regard to suits and claims of shareholders, the position of the Beneficial Owner shall be taken into account, in particular with regard to the appraisal of damages and legitimate interests of parties involved in proceedings.
Art. 9 Ausübung von Aktionärsrechten	Art 9 Exercise of Rights
1Stimmrechte und damit verbundene Rechte können gegenüber der Gesellschaft nur von Aktionären, Nutzniessern oder Nominees ausgeübt werden, die im Aktienbuch als Aktionäre mit Stimmrecht eingetragen wurden. Art. 16 der Statuten bleibt vorbehalten.	1Voting rights and appurtenant rights associated therewith may be exercised in relation to the Company by a shareholder, usufructuary of shares or Nominee only to the extent that such person is recorded in the share register as a shareholder entitled to vote. Article 16 remains reserved.
2Die Gesellschaft anerkennt nur einen Vertreter pro Aktie.	2The Company recognizes only one representative per share.

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III.   Organisation der Gesellschaft	III.   Organization of the Company
A.     Die Generalversammlung	A.     Shareholders’ Meeting
Art. 10 Befugnisse	Art. 10 Authority
1Die Generalversammlung ist das oberste Organ der Gesellschaft. Sie hat die folgenden unübertragbaren Befugnisse:	1The General Meeting of Shareholders is the supreme corporate body of the Company. It has the following inalienable rights:
(a)     Die Festsetzung und die Änderung der Statuten;	(a)     The adoption and amendment of the Articles of Association;
(b)     Die Wahl der Mitglieder des Verwaltungsrates und der externen Revisionsstelle;	(b)     Election of the Directors and the external audit firm;
(c)     Die Genehmigung des Jahresberichts und des Konzernberichts der Gesellschaft;	(c)     Approval of the annual report and the consolidated annual report of the Company;
(d)     Die Genehmigung der Jahresrechnung und die Beschlussfassung über die Verwendung des Bilanzgewinns, insbesondere die Festsetzung der Dividende und der Gewinnbeteiligung der Geschäftsleitung; und	(d)     Approval of the annual financial statement as well as the resolution to use the balance sheet profit, in particular, the declaration of dividends and profit sharing by directors; and
(e)     Die Entlastung der Mitglieder des Verwaltungsrates.	(e)     To grant discharge to the Directors.
2Wenn der Verwaltungsrat eine spezifische Vorlage der Generalversammlung zur Konsultativabstimmung vorlegt, kann diese darüber abstimmen.	2The General Meeting of Shareholders can have a consultative vote on specific issues proposed by the Board of Directors in any other matter as it deems necessary to the Board of Directors.
Art. 11 Ordentliche und ausserordentliche Generalversammlung	Art. 11 Ordinary and Extraordinary General Meeting of Shareholders
1Die ordentliche Generalversammlung findet alljährlich innerhalb von sechs Monaten nach Abschluss des	1An Ordinary General Meeting of Shareholders is to be held yearly within six months following the close of the business

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Geschäftsjahres statt. Sie wird durch den Verwaltungsrat oder durch die Revisionsstelle einberufen. Der Verwaltungsrat bestimmt den Zeitpunkt und den Ort der Generalversammlung, die entweder innerhalb oder ausserhalb der Schweiz stattfindet.	year. It is called by the Board of Directors or by the auditors. The Board of Directors determines the time and location either within or outside Switzerland of the General Meeting of Shareholders.
2Ausserordentliche Generalversammlungen werden so oft als nötig vom Verwaltungsrat und nötigenfalls durch die Revisionsstelle sowie in den anderen vom Gesetz vorgesehenen Fällen einberufen.	2Extraordinary General Meetings of Shareholders shall be called as often as necessary by the Board of Directors or, if necessary, by the auditors as well as in all other cases required by law.
3Unter Bezugnahme auf den Zweck der Einberufung und die Verhandlungs-gegenstände können ein oder mehrere Aktionäre, die mindestens 10% des im Handelsregister eingetragenen Aktien-kapitals der Gesellschaft vertreten, vom Verwaltungsrat die Einberufung einer ausserordentlichen Generalversammlung per schriftlichem Antrag verlangen. Der schriftliche Antrag soll die Verhandlungsgegenstände, die gestellten Anträge, sowie die weiteren Angaben, welche gemäss anwendbaren Gesetzes- und Kotierungsvorschriften notwendig sind, enthalten.	3Stating the purpose of the meeting and the agenda to be submitted, one or more shareholders representing at least ten per cent of the share capital may request the Board of Directors, in writing to call an Extraordinary General Meeting of Shareholders. The request shall contain an agenda, the respective proposals as well as any other information required under the applicable laws and stock exchange rules.
Art. 12 Sprache	Art. 12 Language
Die Generalversammlung wird auf englisch abgehalten. Vorbehalten bleibt ein anderslautender Beschluss des Verwaltungsrats.	General Meetings of Shareholders will, unless the Board decides otherwise be conducted in English.
Art. 13 Einberufung	Art. 13 Notice
1Die Einberufung der Generalversammlung erfolgt durch einmalige Publikation im Schweizerischen Handelsamtsblatt (“SHAB”).	1Notice of a General Meeting of Shareholders is given by means of a single publication in the Swiss Official Journal of Commerce (“SHAB”).
2Zwischen dem Tag der Publikation und dem Tag der Durchführung der Generalversammlung dürfen nicht mehr als sechzig und nicht weniger als zwanzig Tage	2Between the day of the publication and the day of the meeting there must be a time period of no more than sixty days nor less than twenty days. The notice of the

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liegen. Die Einberufung der Generalversammlung muss das Datum, die Uhrzeit und den Ort der Generalversammlung, die Traktanden, die Anträge des Verwaltungsrates und die Anträge derjenigen Aktionäre angegeben, welche die Durchführung einer Generalversammlung oder die Traktandierung eines Verhandlungsgegenstandes nach den Bestimmungen von Art. 14 beantragt haben.	General Meeting of shareholders must indicate the day, time and place of the meeting, the specific agenda items, the motions of the Board of Directors and the motions of the shareholders who have requested the General Meeting of Shareholders or that an item to be included on the agenda in accordance with the regulation of Article 14.
3Spätestens zwanzig Kalendertage vor der Generalversammlung sind der Geschäftsbericht und der Bericht der Revisionsstelle zur Einsicht für die Aktionäre am Gesellschaftssitz aufzulegen. Jeder Aktionär ist berechtigt zu beantragen, dass ihm der Geschäftsbericht und der Bericht der Revisionsstelle gebührenfrei und umgehend zugestellt werden. Die im Aktienbuch vermerkten Aktionäre werden schriftlich über die Verfügbarkeit dieser Dokumente benachrichtigt.	3The annual report and the auditors’ report shall be made available for inspection by the shareholders at the registered office of the Company at least twenty days prior to the date of the Ordinary General Meeting of Shareholders. Each Shareholder is entitled to request prompt delivery of a copy of the annual report and the auditor’s report free of charge. Shareholders registered in the share register shall be notified of the availability of these documents in writing.
4Der Verwaltungsrat ist berechtigt, das Aktienbuch auf einen bestimmten Zeitpunkt, der auf nicht mehr als 60 Tage vor der Generalversammlung festgesetzt werden darf, zu schliessen.	4The Board of Directors may fix a record date not more than sixty days prior to the holding of any General Meeting of Shareholders.
Art. 14 Traktandierung	Art. 14 Agenda
1An einer Generalversammlung darf nur über die Gegenstände abgestimmt werden, die	1At any General Meeting of Shareholders, only such business shall be conducted as shall have been brought before the meeting
a)       direkt vom Verwaltungsrat oder im Auftrag des Verwaltungsrats oder	a)       by or at the direction of the Board of Directors or
b)       von einem Aktionär nach dem Verfahren dieses Art. 14	b)       by any shareholder of the Company who complies with the procedures set forth in this Article 14.
traktandiert werden.
2Das Traktandierungsbegehren eines Aktionärs für die ordentliche General-versammlung muss mindestens 45	2To be timely for consideration at the Ordinary General Meeting of Shareholders, a shareholder’s notice must be received by

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Kalendertage vor dem Jahrestag des sog. Proxy Statements der Gesellschaft (wie es bei der SEC eingereicht wurde) welches im Jahr zuvor den Aktionären im Zusammenhang mit der letztjährigen ordentlichen Generalversammlung mitgeteilt wurde, beim Sekretär der Gesellschaft eingereicht werden. Das Traktandierungsbegehren muss in schriftlicher Form gestellt werden und bezüglich jedem vorgebrachten Traktandum die nachfolgenden Informationen enthalten:	the Secretary at the Company’s principal executive offices not less than 45 calendar days in advance of the anniversary of the date of the Company’s proxy statement (as filed with the SEC) released to shareholders in connection with the previous year’s Ordinary General Meeting of Shareholders. To be in proper written form, a shareholder’s notice to the Secretary shall set forth in writing as to each matter the shareholder proposes to bring before the General Meeting of Shareholders, containing:
a)       eine kurze Beschreibung des gewünschten Traktandums sowie die Gründe, weshalb dieses Traktandum von der Generalversammlung verhandelt werden soll;	a)       a brief description of the business desired to be brought before the ordinary General Meeting of Shareholders and the reasons for conducting such business at the ordinary General Meeting of Shareholders;
b)       der Name und die Adresse des traktandierenden Aktionärs, wie sie im Aktienbuch registriert sind; und	b)       the name and address, as they appear in the share register, of the shareholder proposing such business; and
c)       sämtliche weiteren Informationen, welche unter den anwendbaren Gesetzes- und Kotierungs-bestimmungen verlangt werden.	c)       all other information required under the applicable laws and stock exchange rules.
3Über Verhandlungsgegenstände, die nicht traktandiert sind, können von der Generalversammlung keine Beschlüsse gefasst werden. Die von Gesetzes wegen geltenden Ausnahmen bleiben vorbehalten.	3No resolution shall be passed at a General Meeting of Shareholders on matters which do not appear on the agenda except those permitted by law.
Art. 15 Vorsitz, Protokoll	Art. 15 Chairperson, Minutes
1Vorbehältlich eines anderslautenden Beschlusses des Verwaltungsrates soll der Präsident des Verwaltungsrates, oder in seiner Abwesenheit der Vize-Präsident (falls einer gewählt wurde) den Vorsitz an der Generalversammlung führen (nachfolgend als der “Vorsitzende”).	1Unless otherwise determined by the Board of Directors the General Meeting of Shareholders shall be chaired by the Chairperson of the Board of Directors, or, in his absence, by the Deputy Chairperson, if one is elected.

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2Der Vorsitzende bestimmt einen Protokollführer und kann die Stimmenzähler, die alle nicht Aktionäre sein müssen, bestimmen.	2The Chairperson shall designate a Secretary for the Minutes and may designate the Scrutineers who do not need to be shareholders.
3Der Verwaltungsrat ist für die Protokollführung verantwortlich. Das Protokoll ist vom Vorsitzenden und vom Protokollführer zu unterzeichnen.	3The Board of Directors is responsible for the keeping of the Minutes, which are to be signed by the Chairperson and by the Secretary.
4Der Vorsitzende der Generalversammlung hat sämtliche Leitungsbefugnisse, die für die ordnungsgemässe Durchführung der Generalversammlung nötig und geeignet sind.	4The acting chair of the General Meeting of Shareholders shall have all powers and authority necessary and appropriate to ensure the orderly conduct of the General Meeting of Shareholders.
Art. 16 Recht auf Teilnahme, Stimmrecht	Art. 16 Right to Participation, Voting Rights
1Unter Vorbehalt anderslautender Bestimmungen in diesen Statuten kann jeder Aktionär, der im Aktienbuch als Aktionär mit Stimmrecht eingetragen ist, an der Generalversammlung und deren Beschlüssen teilnehmen.	1Except as otherwise provided in these Articles of Association, each shareholder recorded in the share register with voting rights is entitled to participate at the General Meeting of Shareholders and in any vote taken.
2Vorbehältlich den Bestimmungen in diesem Art. 16 berechtigt jede Aktie, die im Aktienbuch als Aktie mit Stimmrecht eingetragen ist, zu einer Stimme. Art. 693 Abs. 3 OR bleibt dabei vorbehalten. Mittels Vollmacht kann jeder Aktionär seine Aktien in der Generalversammlung durch einen oder mehrere Dritte vertreten lassen, die selber nicht Aktionäre sein müssen.	2Subject to the other provisions of this article 16, each share recorded in the share register as a share with voting rights confers one vote on its holder. Art. 693 para. 3 CO remains reserved. By means of proxy, each shareholder may have each of his shares represented in a General Meeting of Shareholders by one or more third persons who do not need to be shareholders.
3Sobald und solange eine Person 10% oder mehr des im Handelsregister eingetragenen Aktienkapitals kontrolliert (“kontrolliertes Aktienkapital”, wie gemäss Art. 33 der Statuten definiert), werden die Stimmrechte dieser Person an einer Generalversammlung auf 10% (minus eine Stimme) der Stimmrechte der im Handelsregister eingetragenen Aktien beschränkt. Die untenstehenden Art. 16 Abs. 4 und 5 dieser Statuten bleiben vorbehalten.	3Subject to article 16 para 4 and 5 below, if and so long as the Controlled Shares of any Person constitute 10% or more of the registered share capital recorded in the commercial register, such Person shall be entitled to cast votes at any General Meeting of Shareholders in the aggregate equal to one vote less than 10% of all the number of votes conferred by all the registered share capital recorded in the Commercial Register.

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4In besonderen Fällen, beispielweise um die Stimmrechtsausübung von Aktien, welche für wirtschaftliche Eigentümer von Nominees gehalten werden, zu ermöglichen, oder bei der Übernahme von Unternehmen und Unternehmensteilen, kann der Verwaltungsrat durch Reglement oder basierend auf Vereinbarungen von der in diesem Artikel vorgesehenen Begrenzung abweichen. Vorbehältlich abweichender, durch den Verwaltungsrat in seinem Reglement zu erlassenden Bestimmungen, findet die Stimmrechtsbeschränkung in Art. 16 Abs. 3 keine Anwendung auf Clearing Nominees.	4The Board of Directors may by means of regulations or agreements depart from the limit contained in article 16 section 3, including without limitation to permit the exercise of voting rights in respect of shares held by Nominees or to permit voting rights in special cases, including (but not limited to) in connection with the take-over of enterprises or parts of enterprises. Unless the Board of Directors, by means of regulations, determines otherwise, the voting limit contained in article 16 section 3 shall not apply to Clearing Nominees.
5Die Begrenzung in Art. 16 Abs. 3 gilt zudem nicht für die Ausübung des Stimmrechts gemäss den gesetzlichen Bestimmungen über institutionelle Aktionärsvertreter.	5The limit contained in article 16 section 3 shall not apply to the exercise of voting rights pursuant to the statutory rules on institutional shareholder representatives.
Art. 17 Beschlüsse und Wahlen	Art. 17 Resolutions and Elections
1Die Generalversammlung fasst ihre Beschlüsse und entscheidet Wahlen mit der Mehrheit der abgegebenen Stimmen, wobei “broker non-votes”, Stimment-haltungen sowie leere und ungültige Stimmen nicht berücksichtigt werden. Anderslautende gesetzliche oder statutarische Bestimmungen bleiben vorbehalten.	1The General Meeting of Shareholders shall take resolutions and carry out its elections with a majority of the share votes cast (broker non-votes, abstentions and blank and invalid ballots shall be disregarded), to the extent that neither the law nor the Articles of Association provide otherwise.
2Der Vorsitzende der Generalversammlung kann weitere Verfahrensregeln bezüglich des Abstimm- und Wahlverfahrens festlegen.	2The Chairperson of the General Meeting of Shareholders shall determine further details regarding the voting and election procedure.
3Die Abstimmungen und Wahlen erfolgen offen, es sei denn, dass die Generalversammlung eine schriftliche Abstimmung oder Wahl beschliesst, oder der Vorsitzende dies anordnet. Der Vorsitzende kann Abstimmungen und Wahlen auch mittels elektronischem Verfahren durchführen lassen. Elektronische Abstimmungen und Wahlen sind schriftlichen Abstimmungen und	3Resolutions and elections shall be decided by a show of hands, unless a written ballot is resolved by the General Meeting of Shareholders or is ordered by the acting chairperson of the General Meeting of Shareholders. The acting chairperson may also hold resolutions and elections by use of an electronic voting system. Electronic resolutions and elections shall be considered equal to resolutions and

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Wahlen gleichgestellt.	elections taken by way of a written ballot.
4Der Vorsitzende kann eine offene Wahl oder Abstimmung immer durch eine schriftliche oder elektronische wiederholen lassen, sofern nach seiner Meinung Zweifel am Abstimmungsergebnis bestehen. In diesem Fall gilt die vorausgegangene offene Wahl oder Abstimmung als nicht geschehen.	4The chairperson of the General Meeting of Shareholders may at any time order that an election or resolution decided by a show of hands be repeated by way of a written or electronic ballot if he considers the vote to be in doubt. The resolution or election previously held by a show of hands shall then be deemed to have not taken place.
Art. 18 Beschlussquoren	Art. 18 Supermajority Voting
1Ein Beschluss der Generalversammlung, der mindestens zwei Drittel der abgegebenen Stimmen und die absolute Mehrheit der Aktiennennwerte der abgegebenen Stimmen auf sich vereinigt, ist erforderlich für:	1A resolution of the General Meeting of Shareholders passed by at least two thirds of the share votes cast and the absolute majority of the par value of the share votes cast is required for:
(a)     Die Änderung des Gesellschaftszwecks;	(a)     change of the Company’s purpose;
(b)     Die Einführung von Stimmrechtsaktien;	(b)     the creation of shares with privileges regarding voting rights;
(c)     Die Beschränkung der Übertragbarkeit von Namenaktien;	(c)     the restriction of the transferability of registered shares;
(d)     Eine bedingte oder genehmigte Kapitalerhöhung;	(d)     an increase of capital, authorized or subject to a condition;
(e)     Eine Kapitalerhöhung aus Eigenkapital, gegen Sacheinlage oder zwecks Sachübernahme und die Gewährung von besonderen Vorteilen;	(e)     an increase of capital out of equity, against contributions in kind, or for the purpose of acquisition of assets and the granting of special benefits;
(f)      Die Beschränkung oder Aufhebung des Bezugsrechts;	(f)      the limitation or withdrawal of preemptive rights;
(g)     Die Verlegung des Sitzes der Gesellschaft;	(g)     the change of the domicile of the Company;
(h)     Die Auflösung der Gesellschaft;	(h)     the dissolution of the Company;
(i)      Die Fälle gemäss Art. 18 und 64 des Fusionsgesetzes; und	(i)      the cases listed in Art. 18 and 64 of the Swiss Merger Law (“Fusionsgesetz”); and

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(j)      Jede Änderung oder Anpassung der Artikel 8, 9, oder 16 dieser Statuten.	(j)      any alteration or amendment of the articles 8, 9 and 16 of these Articles of Association.
2Die Zustimmung der Generalversammlung mit mindestes zwei Dritteln der abgegebenen Stimmen ist erforderlich für die Abwahl eines Verwaltungsratsmitglieds.	2A resolution of the General Meeting of Shareholders passed by at least two thirds of the share votes cast is required for the removal of a Director.
3Für die Änderung dieses Artikels, bzw. der entsprechenden Abschnitte dieses Artikels gilt ein Beschlussquorum, das gleich hoch wie das in der jeweiligen Bestimmung vorgesehene Beschlussquorum ist.	3Any alteration of this article or any section thereof requires a quorum equal to the quorum stated in the respective provision.
Art. 19 Präsenzquorum	Art. 19 Presence Quorum
1Jeder Beschluss und jede Wahl der Generalversammlung setzt voraus, dass bei der Eröffnung der Generalversammlung mindestens 50 % der Aktien, welche im Aktienbuch mit Stimmrecht registriert sind, entweder persönlich oder per Vollmacht, von einer oder mehreren Personen vertreten sind. Anderslautende gesetzliche und statutarische Bestimmungen bleiben vorbehalten.	1At any General Meeting of the Shareholders, except as otherwise expressly required by law or by these Articles, one or more persons present in person and representing, at the time when the General Meeting of Shareholders proceeds to business, in person or by proxy in excess of 50% of the total shares registered in the share register as entitled to vote shall form a quorum for the transaction of any business.
2Die Aktionäre können mit der Behandlung der Traktanden fortfahren, selbst wenn Aktionäre nach Bekanntgabe des Erreichens des Präsenzquorums durch den Vorsitzenden die Generalversammlung verlassen und damit weniger als das geforderte Präsenzquorum an der Generalversammlung verbleibt.	2The shareholders present at a General Meeting of Shareholders may continue to transact business, despite the withdrawal of shareholders from such General Meeting of Shareholders following announcement of the presence quorum at the meeting.
Art. 20 Vollmacht/Vertretung	Art. 20 Proxy / Representation
Der Verwaltungsrat erlässt Verfahrensregeln für die Teilnahme und die Vertretung von Aktionären an der Generalversammlung.	The Board of Directors shall issue the procedural rules for participation and representation of shareholders at the General Meeting of Shareholders.

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B.     Verwaltungsrat	B.     Board of Directors
Art. 21 Wahl, Amtsdauer, Zusammensetzung	Art. 21 Election, Term of Office, Constitution
1Der Verwaltungsrat besteht aus wenigstens drei und höchstens zwanzig Mitgliedern.	1The Board of Directors shall consist of a minimum of three and a maximum of 20 members.
2Die Amtsdauer darf drei Jahre nicht übersteigen. Für die Auslegung dieses Artikel 21 wird ein Jahr als die Zeitperiode zwischen zwei einander folgenden ordentlichen Generalversammlungen der Gesellschaft definiert.	2The term of office shall not exceed three years. For purposes of this Article 21, a year shall mean the period between two consecutive Ordinary General Meetings of Shareholders.
3Der Verwaltungsrat bestimmt die erste Amtszeit jedes Verwaltungsratsmitgliedes so, dass jedes Jahr, soweit wie möglich, eine gleiche Anzahl Verwaltungsratsmitglieder neu gewählt oder wiedergewählt werden und so, dass alle Mitglieder des Verwaltungsrates innert drei Jahren zur Wiederwahl stehen. An jeder weiteren ordentlichen Generalversammlung nach der ursprünglichen Wahl und Klassifizierung des Verwaltungsrats im Jahr 2009 werden diejenigen Verwaltungsräte, die neu als Nachfolger von Verwaltungsräten, deren Amtszeit abgelaufen ist, gewählt werden, eine Amtszeit von drei Jahren antreten. Tritt ein Verwaltungsrat vor der Beendigung seiner Amtszeit ab, soll der neu gewählte Verwaltungsrat die Amtszeit seines Vorgängers zu Ende führen.	3The Board of Directors shall determine the first term of office of each Director in such a way that each year, as nearly as possible, an equal number of Directors shall be newly elected or re-elected and in such manner that all Directors will have been subject to re-election after a period of three years. At each Ordinary General Meeting of Shareholders following the initial election and classification of the Board of Directors in 2009, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire three years after their election. Newly-appointed Directors shall complete the term of office of their predecessors.
4Der Verwaltungsrat konstituiert sich selber. Er wählt seinen Präsidenten und einen Sekretär, der weder Aktionär noch Mitglied des Verwaltungsrates zu sein braucht.	4The Board of Directors shall constitute itself. It appoints its Chairperson as well as a Secretary who does not need to be a shareholder or a Director.

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Art. 22 Delegation	Art. 22 Delegation
Der Verwaltungsrat hat die Oberleitung der Gesellschaft sowie die Aufsicht über die Geschäftsleitung. Er vertritt die Gesellschaft gegenüber Dritten und kann in allen Angelegenheiten Beschluss fassen, welche nicht gemäss Gesetz, Statuten oder Organisationsreglement einem anderen Organ der Gesellschaft zugewiesen oder vorbehalten sind.	The Board of Directors is entrusted with the ultimate direction of the Company as well as the supervision of the management. It represents the Company towards third parties and attends to all matters which are not delegated to or reserved for another corporate body of the Company by law, the Articles of Association or organizational regulations.
Art. 23 Duties	Art. 23 Duties
1Der Verwaltungsrat hat folgende unübertragbare und unentziehbare Befugnisse:	1The Board of Directors has the following non-transferable and irrevocable duties:
(a)     Die Oberleitung der Gesellschaft und die Erteilung der nötigen Weisungen;	(a)     to ultimately direct the Company and issue the necessary directives;
(b)     Die Festlegung der Organisation;	(b)     to determine the organization;
(c)     Die Ausgestaltung des Rechnungswesens, des internen Kontrollsystems (ICS), der Finanzkontrolle und der Finanzplanung sowie die Durchführung einer Risikoprüfung;	(c)     to organize the accounting, the Internal Control System (ICS), the financial control, and the financial planning as well as to perform a risk assessment;
(d)     Die Ernennung und Abberufung der mit der Geschäftsführung und der Vertretung betrauten Personen sowie die Erteilung und Entziehung von Zeichnungsberechtigungen;	(d)     to appoint and recall the persons entrusted with the management and representation of the Company and to grant and revoke signatory power;
(e)     Die Oberaufsicht über die Geschäftsführung, insbesondere im Hinblick auf die Befolgung der Gesetze, Statuten, Reglemente und Weisungen;	(e)     to ultimately supervise the persons entrusted with the management, in particular with respect to compliance with the law and with the Articles of Association, regulations and directives;
(f)      Die Erstellung des Geschäftsberichts sowie die Vorbereitung der Generalversammlung und die Umsetzung deren Beschlüsse;	(f)      to prepare the business report, as well as the General Meeting of Shareholders and to implement the latter’s resolutions;

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(g)     Die Benachrichtigung des Richters im Fall der Überschuldung;	(g)     to inform the judge in the event of over-indebtedness;
(h)     Die Beschlussfassung über die nachträgliche Liberierung von nicht vollständig liberierten Aktien;	(h)     to pass resolutions regarding the subsequent payment of capital with respect to non-fully paid-in shares;
(i)      Die Beschlussfassung über die Feststellung von Kapitalerhöhungen und die entsprechenden Statutenänderungen;	(i)      to pass resolutions confirming increases in share capital and regarding the amendments to the Articles of Association entailed thereby;
(j)      Untersuchungen im Zusammenhang mit der Einhaltung der gesetzlichen Vorschriften über die Ernennung, die Wahl und die Befähigung der Revisionsstelle; und	(j)      to examine compliance with the legal requirements regarding the appointment, election and the professional qualifications of the auditors; and
(k)     Die Umsetzung von Verträgen gemäss Art. 12, 36 und 70 des Fusionsgesetzes.	(k)     to execute the agreements pursuant to Art. 12, 36 and 70 of the Swiss Merger Law.
2Der Verwaltungsrat kann überdies in allen Angelegenheiten Beschluss fassen, die nicht nach Gesetz oder Statuten der Generalversammlung vorbehalten sind.	2In addition, the Board of Directors may pass resolutions with respect to all matters that are not reserved to the General Meeting of Shareholders by law or under these Articles of Association.
3Der Verwaltungsrat kann die Vorbereitung und Umsetzung seiner Beschlüsse und die Überwachung gewisser Aufgaben an Ausschüsse oder an bestimmte Mitglieder übertragen. Er ist befugt, die Geschäftsführung der Gesellschaft ganz oder teilweise einem oder mehreren Mitgliedern des Verwaltungsrates oder Dritten zu übertragen. Zu diesem Zweck erlässt der Verwaltungsrat ein Organisationsreglement.	3The Board of Directors may entrust the preparation and the execution of its decisions or the supervision of certain tasks to committees or to particular Directors. It is empowered to transfer the management of the Company in whole or in part to one or several of its Directors or to third parties. For this purpose, the Board of Directors enacts organizational regulations.
Art. 24 Organisation	Art. 24 Organization
1Der Präsident des Verwaltungsrates beruft die Verwaltungsratssitzungen ein und leitet die Verhandlungen. Jeder Verwaltungsrat ist befugt mit schriftlichem Begehren an den Präsidenten die Einberufung einer	1The Chairperson of the Board of Directors calls the meetings and presides over the debates. Each Director is entitled to request the calling of a meeting by giving written notice to the Chairperson. The

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Verwaltungsratssitzung zu verlangen. Die Organisation der Sitzungen, die Beschlussfähigkeit und die Beschlussfassung des Verwaltungsrates haben dem Organisationsreglement zu entsprechen.	organization of the meetings, the presence quorum and the passing of resolutions of the Board of Directors shall be in compliance with the organizational regulation.
2Der Verwaltungsratspräsident kann im Rahmen seiner Befugnisse als Verwaltungsrat abstimmen, ihm kommt aber kein Stichentscheid zu.	2The Chairperson shall have a vote in his or her capacity as a Director, but shall have no casting vote.
3Über die Verhandlungen und Beschlüsse des Verwaltungsrates wird ein Protokoll geführt. Das Protokoll ist vom Verwaltungsratspräsidenten und vom Protokollführer zu unterzeichnen.	3Minutes shall be kept of the deliberations and resolutions of the Board of Directors. The Minutes shall be signed by the Chairperson and the Secretary of the Board of Directors.
Art. 25 Zeichnungsberechtigung	Art. 25 Signatory Rights
Die rechtsgültige Vertretung der Gesellschaft durch die Verwaltungsratsmitglieder und weitere Personen wird im Organisationsreglement geregelt und soll beim zuständigen Handelsregisteramt eingetragen werden.	The due and valid representation of the Company by Directors and other persons shall be set forth in organizational regulations and shall be duly registered with the competent commercial register.
Art. 26 Schadloshaltung und Versicherungs-leistungen	Art. 26 Indemnification and Insurance Coverage
1Soweit gesetzlich zulässig, hält die Gesellschaft aktuelle und ehemalige Mitglieder des Verwaltungsrates und der Geschäftsleitung sowie deren Erben, Konkurs- oder Nachlassmassen aus Gesellschaftsmitteln für Schäden, Verluste und Kosten aus drohenden, hängigen oder abgeschlossenen Klagen, Verfahren oder Untersuchungen zivil-, straf-, verwaltungsrechtlicher oder anderer Natur (beispielsweise und nicht ausschliesslich Verantwortlichkeiten gestützt auf Vertragsrecht, Haftpflichtrecht und anderes anwendbares ausländisches Recht und alle angemessenen Anwalts-, Prozess- und anderen Kosten und Auslagen) schadlos, welche ihnen oder ihren Erben, Konkurs- oder Nachlassmassen (i) aufgrund von tatsächlichen oder behaupteten	1The Company shall indemnify and hold harmless, to the fullest extent permitted by law, the existing and former Directors and officers of the Company, and their heirs, executors and administrators out of the assets of the Company from and against all damages, losses, liabilities and expenses in connection with threatened, pending or completed actions, proceedings or investigations, whether civil, criminal, administrative or other (including, but not limited to, liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of (i) any act done or alleged to be done,

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Handlungen, Zustimmungen oder Unterlassungen im Zusammenhang mit der Ausübung ihrer Pflichten oder behaupteten Pflichten oder (ii) aufgrund ihrer Position als Mitglied des Verwaltungsrates oder der Geschäftsleitung der Gesellschaft oder (iii) auf Aufforderung der Gesellschaft hin als Mitglied des Verwaltungsrates, der Geschäftsleitung oder als Arbeitnehmer oder Agent einer anderen Gesellschaft eines Trusts oder eines anderen Unternehmens tätig sind oder waren, entstehen oder entstehen können. Diese Pflicht zur Schadloshaltung besteht nicht, soweit in einem endgültigen und rechtskräftigen Entscheid eines zuständigen Gerichts, Schiedsgerichts oder einer zuständigen Verwaltungsbehörde entschieden worden ist, dass eine der genannten Personen ihre Pflichten als Mitglied des Verwaltungsrates oder der Geschäftsleitung absichtlich oder grobfahrlässig verletzt hat.	concurred or alleged to be concurred in or omitted or alleged to be omitted in or about the execution of their duty, or alleged duty, or (ii) serving as Director or officer of the Company, or (iii) serving at the request of the Company as director, officer, or employee or agent of another corporation, partnership, trust or other enterprise. This indemnity shall not extend to any matter in which any of said persons is found, in a final judgment or decree of a court, arbitral tribunal or governmental or administrative authority of competent jurisdiction not subject to appeal, to have committed an intentional or grossly negligent breach of said person’s duties as Director or officer.
2Ohne den vorstehenden Absatz einzuschränken, soll die Gesellschaft aktuellen und ehemaligen Verwaltungsräten und Mitgliedern der Geschäftsleitung die Gerichts- und Anwaltskosten vorschiessen, die im Zusammenhang mit zivil-, straf- oder verwaltungsrechtlichen Verfahren oder im Zusammenhang mit Untersuchungen, wie in vorstehendem Absatz beschrieben, anfallen. Die Gesellschaft kann solche Kostenvorschüsse ablehnen oder zurückfordern, sofern ein zuständiges Gericht oder eine zuständige Verwaltungsbehörde rechtskräftig feststellt, dass der entsprechende Verwaltungsrat oder das entsprechende Mitglied der Geschäftsleitung eine vorsätzliche oder grob fahrlässige Verletzung ihrer gesetzlichen Pflichten als Mitglied des Verwaltungsrates oder der Geschäftsleitung begangen hat.	2Without limiting the foregoing, the Company shall advance to existing and former Directors and officers court costs and attorney fees in connection with civil, criminal, administrative or investigative proceedings as described in the preceding paragraph. The Company may reject and/or recover such advanced costs if a court or governmental or administrative authority of competent jurisdiction not subject to appeal holds that the Director or officer in question has committed an intentional or grossly negligent breach of his statutory duties as a Director or officer.
3Die Gesellschaft kann Haftpflicht-versicherungen für ihre Verwaltungsräte und Mitglieder der Geschäftsleitung	3The Company may procure directors’ and officers’ liability insurance for the Directors and officers of the Company. The insurance

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abschliessen. Die Versicherungsprämien werden der Gesellschaft oder ihren Tochtergesellschaften in Rechnung gestellt und durch diese bezahlt.	premiums shall be charged to and paid by the Company or its subsidiaries.
C.     Revisionsstelle	C.     Auditors
Art. 27 Revisionspflicht, Wahl und Ernennung der Revisionsstelle	Art. 27 Duty of Audit, Election and Appointment of Auditors
1Die Generalversammlung wählt die Revisionsstelle gemäss den Bestimmungen dieses Artikels. Die Revisionsstelle ist im Handelsregister einzutragen.	1The General Meeting of Shareholders shall elect the auditors according to the terms of this article. The auditors are to be registered in the commercial register.
2Die Revisionsstelle führt eine ordentliche Revision der Jahresrechnung der Gesellschaft durch.	2The auditors shall perform a regular audit of the Company’s annual financial statements.
3Der Verwaltungsrat überwacht die Einhaltung der entsprechenden Vorschriften und schlägt der Generalversammlung eine Revisionsstelle zur Wahl vor, welche die gesetzlichen Voraussetzungen erfüllt, insbesondere betreffend der Befähigung und der Unabhängigkeit gemäss den Bestimmungen des OR (Art. 727 ff.) und des Revisionsaufsichtsgesetzes.	3The Board of Directors shall monitor compliance with these requirements and nominate for election by the General Meeting of Shareholders such auditors which meet the respective requirements, in particular, regarding qualification and independence pursuant to the provisions of the CO (Art. 727 et seq.) and the applicable law on supervision of auditors.
4Die Amtsdauer der Revisionsstelle beträgt ein Jahr. Sie endet mit der Genehmigung der Jahresrechnung. Wiederwahl und Abberufung sind jederzeit möglich.	4The auditors’ term of office shall be one year. It shall end with the approval of the last annual financial accounts. Reelection and revocation are possible at any time.
5Die Generalversammlung kann eine zusätzliche, spezielle Revisionsstelle für eine Amtsdauer von drei Jahren wählen, welche Prüfungsbestätigungen, wie beispielsweise im Rahmen von Kapitalerhöhungen, abgibt.	5The General Meeting of Shareholders may appoint special auditors for a term of three years, to provide attestations such as attestations required for capital increases.
Art. 28 Rechte und Pflichten	Art. 28 Duties and Rights
1Der Revisionsstelle obliegen die Pflichten gemäss Art. 728 ff. OR.	1The auditors rights and obligations are those foreseen in Art. 728 et seq. CO.

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2Die Revisionsstelle muss an der Generalversammlung, die über die Genehmigung der Jahresrechnung und, falls erforderlich, der Konzernrechnung sowie über die Verwendung des Bilanzgewinns Beschluss fasst, anwesend sein.	2The auditors must attend the General Meeting of Shareholders which approves the annual financial accounts as well as, if applicable, the consolidated financial statements and which resolves upon the distribution of the profits.
IV.    Buchführung, Geschäftsjahr, Dividenden, Mitteilungen, Liquidation	IV.    Accounting Principles, Business Year, Dividends, Information, Liquidation
Art. 29 Business Year and Accounting Principles	Art. 29 Business Year and Accounting Principles
1Der Verwaltungsrat legt das Geschäftsjahr fest.	1The business year is to be determined by the Board of Directors.
2Die Jahresrechnung, bestehend aus Erfolgsrechnung, Bilanz und Anhängen, wird in Übereinstimmung mit den Bestimmungen des OR, insbesondere Art. 662a ff. und 958 ff. OR, und den allgemein anerkannten kaufmännischen Grundsätzen und den gebräuchlichen Regeln der Branche erstellt.	2The annual accounts, consisting of the profit and loss statement, the balance sheet and the annex, shall be drawn up in accordance with the provisions of the Swiss Code of Obligations, in particular Art. 662a et seq. and 958 et seq. CO, and in accordance with generally accepted commercial principles and customary rules in that business area.
Art. 30 Verwendung des Gewinns	Art. 30 Distribution of Profits
1Über den Bilanzgewinn verfügt die Generalversammlung im Rahmen der anwendbaren gesetzlichen Vorschriften, insbesondere Art. 671 ff. OR, nach eigenem Ermessen.	1Subject to the legal provisions regarding the distribution of profits, in particular Art. 671 et seq. CO, the profits as shown on the balance sheet may be allocated by the General Meeting of Shareholders at its discretion.
2Die Dividende darf erst nach Abzug der Mittel für die gesetzliche Reserve bestimmt werden. Dividenden, welche nicht innerhalb von fünf Jahren nach ihrem Auszahlungsdatum bezogen werden (oder in der Vergangenheit nicht bezogen wurden) fallen an die Gesellschaft.	2The dividend may only be determined after the transfers foreseen by law to the compulsory reserve funds have been deducted. All dividends unclaimed (and which have been unclaimed in the past) within a period of five years after their due date shall be forfeited to the Company.

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Art. 31 Auflösung und Liquidation	Art. 31 Dissolution and Liquidation
1Die Generalversammlung kann jederzeit die Auflösung und Liquidation der Gesellschaft nach Massgabe der gesetzlichen und statutarischen Vorschriften beschliessen.	1The General Meeting of Shareholders may at any time resolve the dissolution and liquidation of the Company in accordance with the provisions of the law and of the Articles of Association.
2Die Liquidation wird durch den Verwaltungsrat durchgeführt, sofern sie nicht durch die Generalversammlung anderen Personen übertragen wird.	2The liquidation shall be carried out by the Board of Directors to the extent that the General Meeting of Shareholders has not entrusted the same to other persons.
3Die Liquidation der Gesellschaft erfolgt nach Massgabe von Art. 742 ff. OR. Die Liquidatoren sind befugt, über die Aktiven der Gesellschaft (inkl. Grundeigentum) mittels privatrechtlichen Verträgen zu verfügen.	3The liquidation of the Company shall take place in accordance with Art. 742 et seq. CO. The liquidators are authorized to dispose of the assets (including real estate) by way of private contract.
4Nach Tilgung aller Schulden wird das Nettovermögen der Gesellschaft im Verhältnis der einbezahlten Beträge unter den Aktionären verteilt.	4After all debts have been satisfied, the net proceeds shall be distributed among the shareholders in proportion to the amounts paid-in.
Art. 32 Mitteilungen	Art. 32 Information
1Das Publikationsorgan der Gesellschaft ist das SHAB.	1The publication instrument of the Company is the SHAB.
2Einladungen an die Aktionäre und Mitteilungen der Gesellschaft werden im SHAB veröffentlicht.	2Shareholder invitations and communications of the Company shall be published in the SHAB.
3Schriftliche Bekanntmachungen der Gesellschaft an die Aktionäre werden auf dem ordentlichen Postweg an die letzte im Aktienbuch verzeichnete Adresse des Aktionärs oder des bevollmächtigten Empfängers gesendet. Finanzinstitute, welche Aktien für wirtschaftlich Berechtigte halten und als solche im Aktienbuch eingetragen sind, gelten als bevollmächtigte Empfänger.	3Written communications by the Company to its shareholders shall be sent by ordinary mail to the last address of the shareholders or authorized recipient recorded in the share register. Financial institutions holding shares for Beneficial Owners and recorded in such capacity in the share register shall be deemed to be authorized recipients.

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Art. 33 Definitionen	Art. 33 Definitions
•        “Wirtschaftlich berechtigt” im Bezug zu einer Person wird definiert als die Gesellschaftsaktien, von welchen diese Person direkt oder indirekt wirtschaftlicher Eigentümer ist;	•        “Beneficially Own” with respect to any Person shall mean shares of the Company of which such Person is, directly or indirectly, the Beneficial Owner;
•        “Wirtschaftlicher Eigentümer” im Bezug zu den Aktien der Gesellschaft wird definiert als jede Person, welche an den Aktien wirtschaftlich berechtigt ist, wie dies unter den Bestimmungen der Sektion 13(d) des Exchange Act sowie den dazugehörigen Reglementen definiert ist;	•        “Beneficial Owner” with respect to shares of the Company shall mean any Person who “beneficially owns” such shares within the meaning of Section 13(d) of the Exchange Act and the rules and regulations thereunder;
•        “Clearing Nominee” wird definiert als ein Nominee der Clearing Stelle der Aktien der Gesellschaft (wie Cede & Co., dem Nominee der Depository Trust Company, einer Clearing- und Depositenstelle in den Vereinigten Staaten von Amerika) und die Depository Trust Company;	•        “Clearing Nominee” means nominees of clearing organizations for the shares of the Company (such as Cede & Co., the Nominee of the Depository Trust Company, a United States securities depositary and clearing agency) and the Depository Trust Company;
•        “OR” wird definiert als Schweizerisches Obligationenrecht (Systematische Sammlung des Schweizer Recht, Nr. 220);	•        “CO” means the Swiss Code of Obligation (Systematic collection of Swiss law, Nr. 220);
•        “Gesellschaft” wird definiert als Foster Wheeler AG, welche im Handelsregister des Kantons Zug eingetragen ist;	•        “Company” means Foster Wheeler AG, duly registered with the commercial register of the canton of Zug;
•        “Kontrollierte Aktien/kontrolliertes Aktienkapital” einer Person wird definiert als diejenigen als stimmberechtigt im Aktienbuch eingetragenen Aktien der Gesellschaft, deren Stimmrechte von einer Person kontrolliert werden, und zwar entweder: (i) direkt; (ii) in Bezug auf US-Personen, unter Anwendung der Zurechnungs-kriterien der “constructive ownership rules”, gemäss den Sektionen 958(a)	•        “Controlled Shares” of any Person means all shares of the Company registered in the share register with voting rights owned by such Person, whether: (i) directly; (ii) with respect to Persons who are U.S. Persons, by application of the attribution and constructive ownership rules of Sections 958(a) and 958(b) of the United States Internal Revenue Code of 1986, as amended; or, (iii) directly or indirectly

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und 958 (b) des “Internal Revenue Code” der Vereinigten Staaten von Amerika von 1986 (inklusive sämtlicher Anpassungen) oder (iii) direkt oder indirekt als wirtschaftlicher Eigentümer;	as Beneficial Owner;
•        “Verwaltungsrat” wird definiert als Verwaltungsrat der Gesellschaft;	•        “Director” means a member of the board of directors of the Company;
•        “Exchange Act” wird definiert als das Gesetz des Kongresses der Vereinigten Staaten von Amerika, bekannt als “Securities Exchange Act” von 1934, inklusive sämtlicher Anpassungen seit dem Erlass des Gesetzes.	•        “Exchange Act” means the Act of United States Congress known as the Securities Exchange Act of 1934, as the same has been or hereafter may be amended from time to time;
•        “Nominee” wird definiert als eine Person, welche die Aktien direkt oder indirekt für die wirtschaftlich berechtigte Person hält;	•        “Nominee” means a Person holding the shares in its own name directly or indirectly on behalf of the Beneficial Owner;
•        “Teilnehmer” wird definiert als jeder Teilnehmer einer Clearing-Stelle für welche ein Clearing Nominee handelt;	•        “Participant” means any participant of a clearing organization for which a Clearing Nominee is acting;
•        “Person” wird definiert als jede natürliche Person, Kapitalgesellschaft, Trust, rechts- oder nicht-rechtsfähige Personengruppe oder jeder andere privat- oder öffentlichrechtliche Rechtsträger inklusive der Regierung eines Landes, bzw. eine einer Regierung untergeordnete Regierungsorganisation oder ein politischer Gliedstaat;	•        “Person” means any individual, general or limited partnership, corporation, association, trust, estate, company (including a limited liability company) or any other entity or organization including a government, a political subdivision or agency or instrumentality thereof;
•        “SEC” wird definiert als die “Securities and Exchange Commission” der Vereinigten Staaten von Amerika, die gemäss den Bestimmungen des Exchange Act geschaffen wurde;	•        “SEC” means the Securities and Exchange Commission of the United States of America as established under the Exchange Act;
•        “SHAB” wird definiert als das Schweizerische Handelsamtsblatt	•        “SHAB” means the Swiss Official Journal of Commerce.
•        “Tochtergesellschaft” wird definiert als jede andere Gesellschaft, die per Mehrheit der stimmberechtigten Aktien direkt oder indirekt von der Gesellschaft beherrscht wird;	•        “Subsidiary” means any other corporation of which a majority of the voting shares are owned, directly or indirectly, by the Company;

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•        “Transfer Agent” wird definiert als ein Trust, eine Gesellschaft, eine Bank oder eine ähnliche Rechtskörperschaft, welche die Bucheinträge von nicht-zertifizierten Aktien verwaltet;	•        “Transfer Agent” means a trust, company, bank or similar entity handling the book entries of non-certificated shares;
•        “US-Person” wird definiert als (i) eine natürliche Person, welche ihren Wohnsitz in den Vereinigten Staaten von Amerika hat oder Staatsbürger dieses Landes ist, (ii) eine juristische Person oder jede Rechtseinheit, die unter den Bestimmungen der Bundeseinkommenssteuergesetzgebung der Vereinigten Staaten von Amerika als juristische Person angesehen wird und welche unter dem Recht der Vereinigten Staaten von Amerika oder dem Recht eines Bundesstaats (der District of Columbia eingeschlossen) organisiert ist, (iii) eine Vermögenseinheit, welche der Bundeseinkommenssteuer der Vereinigten Staaten von Amerika, und zwar unabhängig von der Einkommensquelle, untersteht und (iv) ein Trust, wenn ein Gericht der Vereinigten Staaten von Amerika die vorrangige Aufsicht über die Trustverwaltung führt sowie einer oder mehrere US Personen ermächtigt sind, sämtliche substantiellen Entscheide des Trusts zu kontrollieren.	•        “U.S. Person” means (i) an individual who is a citizen or resident of the United States, (ii) a corporation or partnership (or other entity treated as a corporation or partnership for United States federal income tax purposes) organized under the laws of the United States or any state thereof including the District of Columbia, (iii) an estate that is subject to United States federal income tax on its income regardless of its source, and (iv) a trust if a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust.
Art. 34 Sacheinlage	Art. 34 Contribution in Kind
Im Zug der Kapitalerhöhung vom 9. Februar 2009 übernimmt die Gesellschaft 1’000 voll liberierte Aktien der Foster Wheeler Ltd., Hamilton, Bermuda, handelnd als Nominee für ihre Aktionäre (d.h. in eigenem Namen aber auf Rechnung ihrer Aktionäre) mit einem Nennwert von USD 0.01 je Aktie und einem Wert von CHF 4’359’298.80 je Aktie gemäss Sacheinlagevertrag vom 9. Februar 2009. Im Gegenzug gibt die Gesellschaft 126’382’580 Namenaktien mit einem Nennwert von CHF 3.— je Aktie aus und weist sie Foster Wheeler Ltd., Hamilton,	In connection with the capital increase dated 9 February 2009, the Company acquires from Foster Wheeler Ltd., Hamilton, Bermuda, acting as a nominee for its shareholders (i.e. in its own name but for the account for its shareholders), 1’000 fully paid up shares, with a nominal value of USD 0.01 each, in Foster Wheeler Ltd. which are valued at CHF 4’359’298.80 each pursuant to the contribution in kind agreement dated 9 February 2009. In return, the Company will issue 126’382’580 registered shares in the Company with a par value of CHF 3.— each

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Bermuda, zu, wobei Foster Wheeler Ltd., Hamilton, Bermuda, als Nominee für ihre Aktionäre handelt.	and allocate them to Foster Wheeler Ltd., Hamilton, Bermuda, acting as a nominee for the shareholders of Foster Wheeler Ltd., Hamilton, Bermuda.
Art. 35 Übersetzung	Art. 35 Translation
Diese Statuten existieren in deutscher und englischer Fassung. Die deutsche Fassung geht vor.	A German and an English version exist of these Articles of Association. The German version shall prevail.
Baar, den 1. Mai 2012	Baar, 1 May 2012

EX-23.1

EXHIBIT 23.1

CONSENT OF ANALYSIS, RESEARCH & PLANNING CORPORATION

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 33-34694, 333-25945, 33-59739, 333-77125, 333-88912, 333-134592) of Foster Wheeler AG (the “Company”) of (i) the references to us in the form and context in which they appear in the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2012, and (ii) the use of or reliance on the information contained in our report to the Company to assist the Company in setting forth an estimate of the Company’s total liability for asbestos-related indemnity and defense costs in such registration statements.

By:	/S/ THOMAS VASQUEZ
Name:	Thomas Vasquez
Title:	Vice President
Analysis, Research & Planning Corporation
July 27, 2012

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, J. Kent Masters, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foster Wheeler AG;

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: July 31, 2012	/S/ J. KENT MASTERS
	J. KENT MASTERS
	CHIEF EXECUTIVE OFFICER

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Franco Baseotto, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foster Wheeler AG;

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: July 31, 2012	/S/ FRANCO BASEOTTO
	FRANCO BASEOTTO
	EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Foster Wheeler AG (the “Company”) on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Kent Masters, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.

Date: July 31, 2012	/s/ J. KENT MASTERS
	J. KENT MASTERS
	CHIEF EXECUTIVE OFFICER

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Foster Wheeler AG (the “Company”) on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Franco Baseotto, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.

Date: July 31, 2012	/s/ FRANCO BASEOTTO
	FRANCO BASEOTTO
	EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER

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Investments (Schedule of Variable Interest Entities - Table) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments
Current assets	$ 7,757	$ 19,328
Other assets (primarily buildings and equipment)	39,851	39,760
Current liabilities	4,854	6,198
Other liabilities	4,335	4,462
Net assets	$ 38,419	$ 48,428

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Derivative Financial Intruments (Schedule of Interest Rate Derivatives) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Derivative Instruments, Gain (Loss) [Line Items]
(Loss)/gain recognized in Other comprehensive income	$ (629)	$ (743)	$ (1,785)	$ 104
Loss reclassified from Accumulated other comprehensive loss	$ 450	$ 639	$ 935	$ 1,255

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Pensions and Other Postretirement Benefits (Pension benefits contributions) (Details) (Non-U.S. Pension Plan [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Non-U.S. Pension Plan [Member]
Contributions made through period end	$ 10,800
Remaining contributions expected for fiscal year 2012	12,000
Contributions expected for fiscal year 2012	$ 22,800

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Derivative Financial Instruments (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Total gross notional amount related to foreign currency forward contracts	$ 421,500
Net cash inflows/(outflows) on the settlement of derivatives	930	656
Aggregate notional amount of the receive-variable/pay-fixed interest rate swaps at end of period	$ 61,300
Derivative, Lower Remaining Maturity Range	2012
Derivative, Higher Remaining Maturity Range	2014

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Borrowings (Components of long-term debt) (Parenthetical) (Details)	Jun. 30, 2012	Dec. 31, 2011
Secured Debt - Energia Holdings [Member]
Interest rate on term loan	11.443%	11.443%
1999C Bonds [Member]
Interest rate on term loan	7.25%	7.25%

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Summary of Significant Accounting Policies (Options not included in diluted earnings calculation) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options not included in the computation of diluted earnings per share	2,850,267	1,347,442	2,021,500	1,340,549
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options not included in the computation of diluted earnings per share	930,884	0	0	0

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Share-Based Compensation Plans (Reconciliation of temporary equity) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Share - Based Compensation Plans [Abstract]
Balance at beginning of period	$ 4,993	$ 4,935
Compensation cost during the period for those equity awards with intrinsic value on the grant date	6,600	5,398
Intrinsic value of equity awards vested during the period for those equity awards with intrinsic value on the grant date	(3,224)	(3,184)
Balance at end of period	$ 8,369	$ 7,149

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Pensions and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2012

Pensions and Other Postretirement Benefits [Abstract]

Pension Benefits Contributions - Table

Contributions in the six months ended June 30, 2012	$	10,800
Remaining contributions expected for the year 2012		12,000
Contributions expected for the year 2012	$	22,800

Defined Benefit Plan - Table

		Defined Benefit Pension Plans								Other Postretirement Benefit Plans
	Quarter Ended				Six Months Ended				Quarter Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
		2012		2011		2012		2011		2012		2011		2012		2011
Net periodic benefit cost/(credit):
Service cost	$	262	$	333	$	537	$	702	$	12	$	20	$	36	$	47
Interest cost		13,187		15,314		26,321		30,925		569		735		1,374		1,647
Expected return on plan assets		(16,058)		(17,830)		(32,073)		(35,971)		-		-		-		-
Amortization of net actuarial loss/(gain)		4,349		3,501		8,485		6,955		93		(6)		213		71
Amortization of prior service (credit)/cost		(396)		9		(789)		18		(878)		(891)		(1,757)		(1,782)
Amortization of transition obligation		12		11		25		23		-		-		-		-
Net periodic benefit cost/(credit)	$	1,356	$	1,338	$	2,506	$	2,652	$	(204)	$	(142)	$	(134)	$	(17)

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Pension and Other Postretirement Benefits (Narrative) (Details) (United Kingdom [Member]) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011 USD ($)	Jun. 30, 2011 GBP (£)
U.K pension plan amendment due to adoption of the consumer price index recognized prior service credit in comprehensive income	$ 48,100	£ 29,600

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Goodwill and Other Intangible Assets (Finite-lived intangible assets table) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Total identifiable intangible assets - Gross Carrying Amount	$ 139,831	$ 141,685
Total identifiable intangible assets - Accumulated Amortization	(72,399)	(67,299)
Total identifiable intangible assets - net carrying amount	67,432	74,386
Patents [Member]
Total identifiable intangible assets - Gross Carrying Amount	40,670	40,920
Total identifiable intangible assets - Accumulated Amortization	(31,055)	(30,237)
Total identifiable intangible assets - net carrying amount	9,615	10,683
Trademarks [Member]
Total identifiable intangible assets - Gross Carrying Amount	63,344	63,711
Total identifiable intangible assets - Accumulated Amortization	(30,075)	(29,337)
Total identifiable intangible assets - net carrying amount	33,269	34,374
Customer Relationships Pipeline And Backlog [Member]
Total identifiable intangible assets - Gross Carrying Amount	29,523	30,586
Total identifiable intangible assets - Accumulated Amortization	(10,819)	(7,725)
Total identifiable intangible assets - net carrying amount	18,704	22,861
Patented Technology [Member]
Total identifiable intangible assets - Gross Carrying Amount	6,294	6,468
Total identifiable intangible assets - Accumulated Amortization	(450)	0
Total identifiable intangible assets - net carrying amount	$ 5,844	$ 6,468

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Investments (Equity in the Net Earnings of Partially Owned Affiliates - Table) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Schedule of Equity Method Investments [Line Items]
Equity in net earnings of unconsolidated affiliates	$ 8,911	$ 15,586	$ 15,819	$ 28,079
Distrubutions from unconsolidated affiliates	23,145	33,733	31,917	43,410
Investment in unconsolidated affiliates	$ 176,745		$ 176,745		$ 195,033

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Derivative Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Asset Derivatives	$ 1,516	$ 1,766
Liability Derivatives	15,627	15,187
Designated as Hedging Instrument [Member] | Other Assets [Member] | Interest Rate Contract [Member]
Asset Derivatives	0	0
Designated as Hedging Instrument [Member] | Other Long-Term Liabilities [Member] | Interest Rate Contract [Member]
Liability Derivatives	9,292	8,707
Not Designated as Hedging Instrument [Member] | Contracts In Process Or Billings In Excess Of Costs And Estimated Earnings On Uncompleted Contracts [Member] | Foreign Exchange Contract [Member]
Asset Derivatives	1,075	1,691
Liability Derivatives	6,088	6,446
Not Designated as Hedging Instrument [Member] | Other accounts receivable [Member] | Foreign Exchange Contract [Member]
Asset Derivatives	441	75
Not Designated as Hedging Instrument [Member] | Other accounts payable [Member] | Foreign Exchange Contract [Member]
Liability Derivatives	$ 247	$ 34

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Litigation and Uncertainties (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012 claims	Jun. 30, 2011 claims	Jun. 30, 2012 claims	Jun. 30, 2011 claims	Dec. 31, 2011 claims	Mar. 31, 2012 claims	Mar. 31, 2011 claims	Dec. 31, 2010 claims
Environmental Matters [Member]
Aggregate potential liability, maximum	$ 500,000		$ 500,000
Estimates of the cost of installing additional control equipment	30,000,000		30,000,000
United Kingdom [Member]
Asbestos related open claims number	299		299
Number of asbestos claims brought against United Kingdom	1,008		1,008
Asbestos related liability upon pleural plaque ruling	41,000,000		41,000,000
United States [Member]
Asbestos related open claims number	124,680	123,990	124,680	123,990	124,540	124,280	123,580	124,420
Asbestos litigation, defense and case resolution payments	13,300,000	14,900,000	28,600,000	36,500,000
Provision for revaluation	2,000,000	2,000,000	3,997,000	4,000,000
Total cumulative indemnity costs paid through the balance sheet date	781,300,000		781,300,000
Total cumulative defense costs paid through the balance sheet date	379,500,000		379,500,000
Portion of total defense and indemnity costs that represent defense costs	33.00%		33.00%
Historic average combined indemnity and defense cost per resolved claim	3,100		3,100
Expected cash outflows as a result of asbestos liability indemnity and defense payment in excess of issuance settlement proceeds			(7,900,000)
Average per claim indemnity increase rate					25.00%
Estimated impact on the asbestos related liability from an increase of 25% in the average per claim indemnity settlement amount					47,700,000
Percentage of the asbestos related liability reserve that would result in an additional expense to be recognized in the statement of operations for a 25% increase in the average asbestos-related claim indemnity settlement amount and assuming no change in the assumptions currently used to estimate the asbestos-related insurance asset					80.00%
Asbestos insurer recovery receivable					$ 4,500,000

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Business Segments (Reconciliation of EBITDA to Net Income Attributable to Foster Wheeler - Table) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
EBITDA	$ 60,175		$ 98,286		$ 132,141		$ 145,090
Add: Net income attributable to noncontrolling interests	4,258		4,527		6,655		6,832
Less: Interest expense	4,249		3,427		7,665		7,306
Less: Depreciation and amortization	12,776		12,506		25,796		25,177
Income before income taxes	47,408		86,880		105,335		119,439
Less: Provision for income taxes	12,291		19,044		27,175		26,327
Net income	35,117		67,836		78,160		93,112
Less: Net income attributable to noncontrolling interests	4,258		4,527		6,655		6,832
Net income attributable to Foster Wheeler AG	30,859		63,309		71,505		86,280
Net increase/(decrease) in contract profit from the regular revaluation of final estimated contract profit revisions	8,200		15,800		31,600		13,500
Net asbestos-related provision	3,713		2,000		5,710		2,400
The current period impact of out-of period corrections related to the reduction of final estimated profit							(7,800)
Global E and C Group [Member]
EBITDA	39,917		54,842		86,845		96,510
Net increase/(decrease) in contract profit from the regular revaluation of final estimated contract profit revisions	(2,800)	[1],[2]	1,500	[1],[2]	5,100	[1],[2]	3,900	[1],[2]
Net asbestos-related provision	1,700		0		1,700		0
The current period impact of out-of period corrections related to the reduction of final estimated profit							(3,200)
Global Power Group [Member]
EBITDA	43,850		67,735		96,166		94,199
Net increase/(decrease) in contract profit from the regular revaluation of final estimated contract profit revisions	11,000	[1],[2]	14,300	[1],[2]	26,500	[1],[2]	9,600	[1],[2]
The current period impact of out-of period corrections related to the reduction of final estimated profit							(4,600)
Favorable subcontract settlement recognized in the changes in final estimated contract profit revisions					6,900
C and F Group [Member]
EBITDA	(23,592)	[3]	(24,291)	[3]	(50,870)	[3]	(45,619)	[3]
Net asbestos-related provision	$ 2,000	[4]	$ 2,000	[4]	$ 4,000	[4]	$ 2,400	[4]

[1] Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 for further information regarding changes in our final estimated contract profit.

[2] The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global E&C Group and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 and are included in the six months ended June 30, 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

[3] Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances related to intercompany interest.

[4] Please refer to Note 12 for further information regarding the revaluation of our asbestos liability and related asset.

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Borrowings (Narrative) (Details) (US Senior Credit Agreement [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
US Senior Credit Agreement [Member]
Line of Credit Facility, Description on U.S. Senior Credit Agreement	U.S. Senior Credit Agreement — On July 30, 2010, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.’s subsidiaries and BNP Paribas, as Administrative Agent, entered into a four-year amendment and restatement of our U.S. senior credit agreement, which we entered into in October 2006. The amended and restated U.S. senior credit agreement, which became an unsecured facility in March 2012 as described below, provides for a facility of $450,000, and includes a provision which permits future incremental increases of up to an aggregate of $225,000 in total additional availability under the facility. The amended and restated U.S. senior credit agreement permits us to issue up to $450,000 in letters of credit under the facility. Letters of credit issued under the amended and restated U.S. senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in our corporate credit rating as reported by Moody’s Investors Service, which we refer to as Moody’s, and/or Standard & Poor’s, which we refer to as S&P. We received a corporate credit rating of BBB- as issued by S&P during the third quarter of 2010, which, under the amended and restated U.S. senior credit agreement, reduced our pricing for letters of credit issued under the agreement. We received a corporate credit rating of Baa3 as issued by Moody’s during the first quarter of 2012, which led to the automatic release and termination of all liens securing our obligations under the agreement. Based on our current credit ratings, letter of credit fees for performance and financial letters of credit issued under the amended and restated U.S. senior credit agreement are 1.000% and 2.000% per annum of the outstanding amount, respectively, excluding fronting fees. We also have the option to use up to $100,000 of the $450,000 for revolving borrowings at a rate equal to adjusted LIBOR, as defined in the agreement, plus 2.000%, subject also to the performance pricing noted above.
Letters of credit capacity under the credit facility	$ 450,000
Fees and expenses in conjunction with the execution of senior credit agreement	4,300
Letters of credit facility, amount outstanding	275,500	225,600
Letter of credit fees under U.S. senior credit agreement, Minimum	1.00%	1.00%
Letter of credit fees under U.S. senior credit agreement, Maximum	2.00%	2.00%
Borrowing capacity under credit facility	450,000
Amount of option to use for revolving borrowings	100,000
Line of Credit Facility, Aggregate Additional Uncommited Capacity	$ 225,000
Line of Credit Facility, Interest Rate Description	a rate equal to adjusted LIBOR, as defined in the agreement, plus 2.000%, subject also to the performance pricing

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Business Combinations

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Business Combinations

2. Business Combinations

In December 2011, we acquired the stock of Graf-Wulff GmbH, a company based in Germany, for a purchase price of approximately €22,300 (approximately $29,400 at the exchange rate on the date of the acquisition), net of cash acquired.  The acquired company designs, manufactures and installs equipment which utilizes circulating dry ash flue gas scrubbing technology for all types of steam generators in the power and industrial sectors.  Our consolidated balance sheet as of December 31, 2011 filed in our 2011 Form 10-K included a preliminary purchase price allocation for this acquisition.As a result of finalizingourvaluation of net assets acquired, we have increased thegoodwill balance as of December 31, 2011 which is presented on our consolidated balance sheetand related financial statement notes for the period and six months ended June 30, 2012. The increase in goodwill was primarily attributable to an increased valuation ofbillings in excess of costs and estimated earnings on uncompleted contracts and a deferred tax liability related to intangible assets. The purchase price allocation and pro forma impact assuming the acquisition had occurred as of the beginning of 2011 were not significant to our consolidated financial statements.  This company's financial results are included within our Global Power Group business segment.

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Litigation and Uncertainties (Asbestos-Related Open Claims Rollforward) (Details) (United States [Member])	3 Months Ended		6 Months Ended
	Jun. 30, 2012 claims	Jun. 30, 2011 claims	Jun. 30, 2012 claims	Jun. 30, 2011 claims
United States [Member]
Open claims at beginning of period	124,280	123,580	124,540	124,420
New claims	1,180	1,100	2,340	2,380
Claims resolved	(780)	(690)	(2,200)	(2,810)
Open claims at end of period	124,680	123,990	124,680	123,990

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Goodwill and Other Intangible Assets (Intangible assets amortization schedule) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Goodwill and Other Intangible Assets
Amortization expense	$ 2,530	$ 1,649	$ 5,552	$ 3,297
Amortization expense - forecast for 2012				9,300
Amortization expense - forecast for 2013				7,800
Amortization expense - forecast for 2014				7,800
Amortization expense - forecast for 2015				7,700
Amortization expense - forecast for 2016				$ 5,300

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Business Segments (Tables)

6 Months Ended

Jun. 30, 2012

Business Segments [Abstract]

Operating Revenues by Industry and Business Segment - Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Operating Revenues (Third-Party) by Industry:
Power generation	$	262,321	$	269,054	$	514,436	$	464,183
Oil refining		360,750		383,465		685,911		746,994
Pharmaceutical		13,614		15,290		26,593		26,474
Oil and gas		183,563		336,055		415,114		608,102
Chemical/petrochemical		77,427		130,409		145,747		284,386
Power plant operation and maintenance		34,913		34,235		64,193		62,564
Environmental		2,456		2,977		4,644		5,536
Other, net of eliminations		7,982		12,393		19,484		21,891
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130
Operating Revenues (Third-Party) by Business Segment:
Global E&C Group	$	666,142	$	892,080	$	1,337,015	$	1,715,823
Global Power Group		276,884		291,798		539,107		504,307
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130

Segment Reporting Information - Table

			Quarter Ended June 30,				Six Months Ended June 30,
				2012		2011		2012		2011
EBITDA:
	Global E&C Group		$	39,917	$	54,842	$	86,845	$	96,510
	Global Power Group			43,850		67,735		96,166		94,199
	C&F Group *			(23,592)		(24,291)		(50,870)		(45,619)
		Total		60,175		98,286		132,141		145,090
Add: Net income attributable to noncontrolling interests				4,258		4,527		6,655		6,832
Less: Interest expense				4,249		3,427		7,665		7,306
Less: Depreciation and amortization				12,776		12,506		25,796		25,177
Income before income taxes				47,408		86,880		105,335		119,439
Less: Provision for income taxes				12,291		19,044		27,175		26,327
Net income				35,117		67,836		78,160		93,112
Less: Net income attributable to noncontrolling interests				4,258		4,527		6,655		6,832
Net income attributable to Foster Wheeler AG			$	30,859	$	63,309	$	71,505	$	86,280
______________
* Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances
		related to intercompany interest.
EBITDA in the above table includes the following:			Quarter Ended June 30,				Six Months Ended June 30,
				2012		2011		2012		2011
Net (decrease)/increase in contract profit from the regular
	revaluation of final estimated contract profit revisions:(1)
	Global E&C Group(2)		$	(2,800)	$	1,500	$	5,100	$	3,900
	Global Power Group(2)			11,000		14,300		26,500		9,600
		Total	$	8,200	$	15,800	$	31,600	$	13,500
Net asbestos-related provisions:(3)
	Global E&C Group		$	1,700	$	-	$	1,700	$	-
	C&F Group			2,000		2,000		4,000		2,400
		Total	$	3,700	$	2,000	$	5,700	$	2,400

______________

(1)Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 for further information regarding changes in our final estimated contract profit.

(2)The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global E&C Group and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 and are included in the six months ended June 30, 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

(3)Please refer to Note 12 for further information regarding the revaluation of our asbestos liability and related asset.

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Share-Based Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2012

Share - Based Compensation Plans [Abstract]

Share-Based Compensation Expense and Related Tax-Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Share-based compensation	$	5,768	$	5,221	$	10,694	$	10,092
Related income tax benefit		149		102		259		183

Reconciliation of Temporary Equity-Table

		June 30, 2012		June 30, 2011
Balance at beginning of year		$	4,993	$	4,935
Compensation cost during the period for those equity awards with
	intrinsic value on the grant date		6,600		5,398
Intrinsic value of equity awards vested during the period for
	those equity awards with intrinsic value on the grant date		(3,224)		(3,184)
Balance at end of period		$	8,369	$	7,149

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Share-Based Compensation Plans (Summary of share-based compensation expense and related income tax benefit) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Share - Based Compensation Plans [Abstract]
Share-based Compensation	$ 5,768	$ 5,221	$ 10,694	$ 10,092
Related income tax benefit	$ 149	$ 102	$ 259	$ 183

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Goodwill and Other Intangible Assets (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Total identifiable intangible assets - net carrying amount	$ 67,432	$ 74,386
Global E and C Group [Member]
Total identifiable intangible assets - net carrying amount	13,382
Global Power Group [Member]
Total identifiable intangible assets - net carrying amount	$ 54,050

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Litigation and Uncertainties (Tables)

6 Months Ended

Jun. 30, 2012

United States [Member]

Asbestos-Related Open Claims Rollforward- Table

	Quarter Ended June 30,		Six Months Ended June 30,
Number of Claims by period:	2012	2011	2012	2011
Open claims at beginning of period	124,280	123,580	124,540	124,420
New claims	1,180	1,100	2,340	2,380
Claims resolved	(780)	(690)	(2,200)	(2,810)
Open claims at end of period	124,680	123,990	124,680	123,990

Asbestos-Related Assets and Liabilities - Table

United States Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets recorded within:
Accounts and notes receivable-other	$	34,593	$	43,677
Asbestos-related insurance recovery receivable		118,465		131,007
Total asbestos-related assets	$	153,058	$	174,684
Asbestos-related liabilities recorded within:
Accrued expenses	$	41,050	$	50,900
Asbestos-related liability		228,649		243,400
Total asbestos-related liabilities	$	269,699	$	294,300
Liability balance by claim category:
Open claims	$	54,770	$	56,700
Future unasserted claims		214,929		237,600
Total asbestos-related liabilities	$	269,699	$	294,300

U.S. Net Asbestos - Related Provision- Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Provision for revaluation	$	2,000	$	2,000	$	3,997	$	4,000
Gain on the settlement of coverage litigation		-		-		-		(1,600)
Net asbestos-related provision	$	2,000	$	2,000	$	3,997	$	2,400

U.S. Asbestos-Related Payments And Insurance Settlement Proceeds- Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Asbestos litigation, defense and case resolution payments	$	13,300	$	14,900	$	28,600	$	36,500
Insurance proceeds		(11,200)		(6,900)		(21,700)		(16,000)
Net asbestos-related payments	$	2,100	$	8,000	$	6,900	$	20,500

United Kingdom [Member]

Asbestos-Related Assets and Liabilities - Table

United Kingdom Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets:
Accounts and notes receivable-other	$	2,698	$	2,677
Asbestos-related insurance recovery receivable		23,487		26,120
Total asbestos-related assets	$	26,185	$	28,797
Asbestos-related liabilities:
Accrued expenses	$	2,698	$	2,677
Asbestos-related liability		25,063		26,120
Total asbestos-related liabilities	$	27,761	$	28,797
Liability balance by claim category:
Open claims	$	6,832	$	8,030
Future unasserted claims		20,929		20,767
Total asbestos-related liabilities	$	27,761	$	28,797

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Summary of Significant Accounting Policies (Projects with final estimated contract profit revisions whose impact exceeded $1 million) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012 projects	Jun. 30, 2011 projects	Jun. 30, 2012 projects	Jun. 30, 2011 projects
Summary of Significant Accounting Policies [Abstract]
Number of contracts that had final estimated contract profit revisions whose impact on contract profit exceeded $1 million	9	17	17	20
Net increase/(decrease) in contract profit from the regular revaluation of final estimated contract profit revisions	$ 8,200	$ 15,800	$ 31,600	$ 13,500

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of Presentation — The fiscal year of Foster Wheeler AG ends on December 31 of each calendar year. Foster Wheeler AG's fiscal quarters end on the last day of March, June and September. The fiscal years of our non-U.S. operations are the same as the parent's. The fiscal year of our U.S. operations is the 52- or 53-week annual accounting period ending on the last Friday in December.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The consolidated financial statements and notes are presented in accordance with the requirements of Form 10-Q and do not contain certain information included in our Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), filed with the Securities and Exchange Commission on February 23, 2012. The consolidated balance sheet as of December 31, 2011 was derived from the audited financial statements included in our 2011 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America for annual consolidated financial statements.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The consolidated financial statements include the accounts of Foster Wheeler AG and all significant U.S. and non-U.S. subsidiaries, as well as certain entities in which we have a controlling interest. Intercompany transactions and balances have been eliminated. See “—Variable Interest Entities” below for further information related to the consolidation of variable interest entities.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Changes in estimates are reflected in the periods in which they become known. Significant estimates are used in accounting for long-term contracts including estimates of total costs, progress toward completion and customer and vendor claims, employee benefit plan obligations and share-based compensation plans. In addition, we also use estimates when accounting for uncertain tax positions and deferred taxes, asbestos liabilities and expected recoveries and when assessing goodwill for impairment, among others.

Revenue Recognition on Long-Term Contracts — Revenues and profits on long-term contracts are recorded under the percentage-of-completion method.

Progress towards completion on fixed-price contracts is measured based on physical completion of individual tasks for all contracts with a value of $5,000 or greater. For contracts with a value less than $5,000, progress toward completion is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method).

Progress towards completion on cost-reimbursable contracts is measured based on the ratio of quantities expended to total forecasted quantities, typically man-hours. Incentives are also recognized on a percentage-of-completion basis when the realization of an incentive is assessed as probable. We include flow-through costs consisting of materials, equipment or subcontractor services as both operating revenues and cost of operating revenues on cost-reimbursable contracts when we have overall responsibility as the contractor for the engineering specifications and procurement or procurement services for such costs. There is no contract profit impact of flow-through costs as they are included in both operating revenues and cost of operating revenues.

Contracts in process are stated at cost, increased for profits recorded on the completed effort, less billings to the customer and progress payments on uncompleted contracts. A full provision for loss contracts is made at the time the loss becomes probable regardless of the stage of completion.

At any point, we have numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. These estimates may be revised as additional information becomes available or as specific project circumstances change. We review all of our material contracts on a monthly basis and revise our estimates as appropriate for developments such as earning project incentive bonuses, incurring or expecting to incur contractual liquidated damages for performance or schedule issues, providing services and purchasing third-party materials and equipment at costs differing from those previously estimated and testing completed facilities, which, in turn, eliminates or confirms completion and warranty-related costs. Project incentives are recognized when it is probable they will be earned. Project incentives are frequently tied to cost, schedule and/or safety targets and, therefore, tend to be earned late in a project's life cycle.

Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit. In the period in which a change in estimate is recognized, the cumulative impact of that change is recorded based on progress achieved through the period of change. The following table summarizes the number of separate projects that experienced final estimated contract profit revisions with an impact on contract profit in excess of $1,000 relating to the revaluation of work performed in prior periods:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Number of separate projects			9		17		17		20
Net increase in contract profit from the regular
	revaluation of final estimated contract profit revisions	$	8,200	$	15,800	$	31,600	$	13,500

The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months endedJune 30,2011 included the impact of two out-of-period correctionsfor reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global Engineering and Construction Group (“Global E&C Group”)andour Global Power Group of approximately $3,200 and $4,600, respectively.The corrections were recorded in the first quarter of 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

Please see Note 11 for further information related to changes in final estimated contract profitand the impact on business segment results.

Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, disputed or unapproved change orders as to both scope and price or other causes of unanticipated additional costs. We record claims as additional contract revenue if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. These two requirements are satisfied by the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in our performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim may be recorded only to the extent that contract costs relating to the claim have been incurred. Costs attributable to claims are treated as costs of contract performance as incurred and are recorded in contracts in process. Our consolidated financial statements includedcommercial claims of $8,600 and $6,700 as of June 30, 2012 and December 31, 2011, respectively, while substantially all costs had been incurred as of each respective date.

In certain circumstances, we may defer pre-contract costs when it is probable that these costs will be recovered under a future contract. Such deferred costs would then be included in contract costs upon execution of the anticipated contract.Deferred pre-contract costs were inconsequentialas of June 30, 2012 and December 31, 2011.

Certain special-purpose subsidiaries in our Global Power Group business segment are reimbursed by customers for their costs ofbuilding and operating certain facilities over the lives of the corresponding service contracts. Depending on the specific legal rights and obligations under these arrangements, in some cases those reimbursements are treated as operating revenues at gross value and other cases as a reduction of cost.

Trade Accounts Receivable — Trade accounts receivable represent amounts billed to customers. In accordance with terms under our long-term contracts, our customers may withhold certain percentages of such billings until completion and acceptance of the work performed, which we refer to as retention receivables. Final payment of retention receivables mightnot be received within a one-year period. In conformity with industry practice, however, the full amount of accounts receivable, including such amounts withheld, are included in current assets on the consolidated balance sheet.We have not recorded a provision for the outstanding retention receivable balances as of June 30, 2012 and December 31, 2011.

Variable Interest Entities—We sometimes form separate legal entities such as corporations, partnerships and limited liability companies in connection with the execution of a single contract or project. Upon formation of each separate legal entity, we perform an evaluation to determine whether the new entity is a variable interest entity, or VIE, and whether we are the primary beneficiary of the new entity, which would require us to consolidate the new entity in our financial results. We reassess our initial determination on whether the entity is a VIE upon the occurrence of certain events and whether we are the primary beneficiary as outlined in current accounting guidelines. If the entity is not a VIE, we determine the accounting for the entity under the voting interest accounting guidelines.

An entity is determined to be a VIE if either (a) the total equity investment is not sufficient for the entity to finance its own activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (such as the ability to make decisions through voting or other rights or the obligation to absorb losses or the right to receive benefits), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb losses of the entity and/or their rights to receive benefits of the entity, and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

As of June 30, 2012 and December 31, 2011, we participated in certain entities determined to be VIEs, including a gas-fired cogeneration facility in Martinez, California and a refinery/electric power generation project in Chile.We consolidate the operations of the Martinez project while we record our participation in the project in Chile on the equity method of accounting.

Please see Note 3 for further information regarding our participation in these projects.

Fair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board Accounting Standards Codification, or FASB ASC, 820-10 defines fair value, establishes a three level fair value hierarchy that prioritizes the inputs used to measure fair valueand provides guidance on required disclosures about fair value measurements. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Our financial assets and liabilities that are recorded at fair value on a recurring basis consist primarily of the assets or liabilities arising from derivative financial instruments and defined benefit pension plan assets. See Note 8for further information regarding our derivative financial instruments.

The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate fair value:

Financial instruments valued independent of the fair value hierarchy:

• Cash, Cash Equivalents and Restricted Cash— The carrying value of our cash, cash equivalents and restricted cash approximates fair value because of the demand nature of many of our deposits or short-term maturity of these instruments.

  Financial instruments valued within the fair value hierarchy:

• Short-term Investments — Short-term investments primarily consist of deposits with maturities in excess of three months but less than one year. Short-term investments are carried at cost plus accrued interest, which approximates fair value.
• Long-term Debt — We estimate the fair value of our long-term debt (including current installments) based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturitiesusing level 2 inputs.
• Foreign Currency Forward Contracts — We estimate the fair value of foreign currency forward contracts by obtaining quotes from financial institutions or market transactions in either the listed or over-the-counter markets, which we further corroborate with observable market datausing level 2 inputs.
• Interest Rate Swaps— We estimate the fair value of our interest rate swaps based on quotes obtained from financial institutions, which we further corroborate with observable market datausing level 2 inputs.
• Defined Benefit Pension Plan Assets — We estimate the fair value of investments in equity securities at each year-end based on quotes obtained from financial institutions. The fair value of investments in commingled funds, invested primarily in debt and equity securities, is based on the net asset values communicated by the respective asset manager. We further corroborate the above valuations with observable market data using level 1 and 2 inputs. Additionally, we hold investments in private investment funds that are valued at net asset value as communicated by the asset manager using level 3 unobservable market data inputs.

Retirement of Shares under Share Repurchase Program — Under Swiss law, the cancellation of shares previously repurchased under our share repurchase program must be approved by our shareholders. Repurchased shares remain as treasury shares on our balance sheet until cancellation.

Any repurchases will be made at our discretion in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors.   The program does not obligate us to acquire any particular number of shares. The program has no expiration date and may be suspended or discontinued at any time.

All treasury shares are carried at cost on the consolidated balance sheet until the cancellation of the shares has been approved by our shareholders and the cancellation is registered with the commercial register of the Canton of Zug in Switzerland. Upon the effectiveness of the cancellation of the shares, the cost of the shares cancelled will be removed from treasury shares on the consolidated balance sheet, the par value of the cancelled shares will be removed from registered shares on the consolidated balance sheet, and the excess of the cost of the treasury shares above par value will be removed from paid-in capital on the consolidated balance sheet.

Once repurchased, treasury shares are no longer considered outstanding, which results in a reduction to the weighted-average number of shares outstanding during the reporting period when calculating earnings per share, as described below.

Earnings per Share — Basic earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the weighted-average number of shares outstanding during the reporting period.

Diluted earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the combination of the weighted-average number of shares outstanding during the reporting period and the impact of dilutive securities, if any, such as outstanding stock options and the non-vested portion of restricted stock units and performance-based restricted stock units (collectively, “restricted awards”) to the extent such securities are dilutive.

In profitable periods, outstanding stock options have a dilutive effect under the treasury stock method when the average share price for the period exceeds the assumed proceeds from the exercise of the option. The assumed proceeds include the exercise price, compensation cost, if any, for future service that has not yet been recognized in the consolidated statement of operations, and any tax benefits that would be recorded in paid-in capital when the option is exercised. Under the treasury stock method, the assumed proceeds are assumed to be used to repurchase shares in the current period. The dilutive impact of the non-vested portion of restricted awards is determined using the treasury stock method, but the proceeds include only the unrecognized compensation cost and tax benefits as assumed proceeds.

The computations of basic and diluted earnings per share were as follows:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Net income attributable to Foster Wheeler AG		$	30,859	$	63,309	$	71,505	$	86,280
Basic weighted-average number of shares outstanding			107,840,679		122,331,265		107,807,441		123,499,174
Effect of dilutive securities			2,576		515,740		60,153		637,716
Diluted weighted-average number of shares outstanding			107,843,255		122,847,005		107,867,594		124,136,890
Earnings per share:
	Basic	$	0.29	$	0.52	$	0.66	$	0.70
	Diluted	$	0.29	$	0.52	$	0.66	$	0.70

The following table summarizes options and restricted awards not included in the calculation of diluted earnings per share as the assumed proceeds from those optionsand restricted awards, on a per share basis, were greaterthan the average share price for the period, which would result in an antidilutive effect on diluted earnings per share:

		Quarter Ended June 30,		Six Months Ended June 30,
		2012	2011	2012	2011
Options not included in the computation of
	diluted earnings per share	2,850,267	1,347,442	2,021,500	1,340,549
Restricted awards not included in the computation of
	diluted earnings per share	930,884	-	-	-

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Summary of Significant Accounting Policies (Basic and diluted earnings per share - Table) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Earnings Per Share [Abstract]
Net income attributable to Foster Wheeler AG	$ 30,859	$ 63,309	$ 71,505	$ 86,280
Basic weighted-average number of shares outstanding	107,840,679	122,331,265	107,807,441	123,499,174
Effect of dilutive securities	2,576	515,740	60,153	637,716
Diluted weighted-average number of shares outstanding	107,843,255	122,847,005	107,867,594	124,136,890
Basic earnings per share	$ 0.29	$ 0.52	$ 0.66	$ 0.70
Diluted earnings per share	$ 0.29	$ 0.52	$ 0.66	$ 0.70

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Investments (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Equity in the net earnings/(loss) of unconsolidated affiliates	$ 8,911	$ 15,586	$ 15,819	$ 28,079
Project Which Generates Earnings From Royalty Payments Linked to the Price of Natural Gas in Italy [Member]
Investment in unconsolidated affiliates	50.00%		50.00%
Waste-to-Energy Project in Italy [Member]
Investment in unconsolidated affiliates	39.00%		39.00%
Wind Farm Project in Italy [Member]
Investment in unconsolidated affiliates	50.00%		50.00%
Refinery / Power Generation Project in Chile [Member]
Investment in unconsolidated affiliates	85.00%		85.00%
Chile [Member]
Equity in the net earnings/(loss) of unconsolidated affiliates	6,121	11,586	13,391	21,473
Unconsolidated affiliate insurance recovery assessment receivable, current	68,100		68,100
Debt service letter of credit	10,000		10,000
Guarantee for obligation under Chile based project operation and maintenance agreement	20,000		20,000
Italy [Member]
Equity in the net earnings/(loss) of unconsolidated affiliates	$ 2,790	$ 4,000	$ 2,428	$ 6,606
Two Electric Power Generation Projects in Italy [Member]
Investment in unconsolidated affiliates	41.65%		41.65%

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Derivative Financial Instruments (Income on Derivatives) (Details) (Foreign Exchange Contract [Member], Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss)/gain recognized in income on derivatives	$ (3,659)	$ (1,143)	$ (422)	$ 741
Cost of Operating Revenues [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss)/gain recognized in income on derivatives	(3,646)	(1,089)	(500)	725
Other deductions, net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss)/gain recognized in income on derivatives	$ (13)	$ (54)	$ 78	$ 16

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CONSOLIDATED STATEMENT OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
CONSOLIDATED STATEMENT OF OPERATIONS
Operating revenues	$ 943,026	$ 1,183,878	$ 1,876,122	$ 2,220,130
Cost of operating revenues	803,475	1,030,266	1,597,239	1,967,263
Contract profit	139,551	153,612	278,883	252,867
Selling, general and administrative expenses	85,427	80,402	168,708	154,243
Other income, net	(10,571)	(21,390)	(18,755)	(35,656)
Other deductions, net	12,274	6,721	16,338	12,838
Interest income	(2,949)	(4,428)	(6,118)	(7,703)
Interest expense	4,249	3,427	7,665	7,306
Net asbestos-related provision	3,713	2,000	5,710	2,400
Income before income taxes	47,408	86,880	105,335	119,439
Provision for income taxes	12,291	19,044	27,175	26,327
Net income	35,117	67,836	78,160	93,112
Less: Net income attributable to noncontrolling interests	4,258	4,527	6,655	6,832
Net income attributable to Foster Wheeler AG	$ 30,859	$ 63,309	$ 71,505	$ 86,280
Earnings per share (see Note 1):
Basic	$ 0.29	$ 0.52	$ 0.66	$ 0.70
Diluted	$ 0.29	$ 0.52	$ 0.66	$ 0.70

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Borrowings (Components of long-term debt) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current	$ 12,610	$ 12,683
Long-term	127,578	136,428
Total	140,188	149,111
Estimated fair value of long-term debt	159,344	164,590
Capital Lease Obligations [Member]
Current	2,485	2,463
Long-term	54,430	56,080
Total	56,915	58,543
Secured Debt-FW Power Srl [Member]
Current	8,213	8,308
Long-term	64,470	69,757
Total	72,683	78,065
Secured Debt - Energia Holdings [Member]
Current	1,912	1,912
Long-term	7,395	9,308
Total	9,307	11,220
1999C Bonds [Member]
Current	0	0
Long-term	1,283	1,283
Total	$ 1,283	$ 1,283

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) In Thousands	Total	Registered Shares [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Shares [Member]	Total Foster Wheeler AG Shareholders' Equity [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2010	$ 1,015,349	$ 334,052	$ 659,739	$ 537,588	$ (464,504)	$ (99,182)	$ 967,693	$ 47,656
Net income	93,112			86,280			86,280	6,832
Other comprehensive income, net of tax	67,166				66,719		66,719	447
Issuance of registered shares upon exercise of stock options	10,752	1,308	9,444				10,752
Issuance of registered shares upon vesting of restricted awards		357	(357)
Distributions to noncontrolling interests	(8,672)							(8,672)
Capital contribution from noncontrolling interests	125							125
Share-based compensation expense	7,890		7,890				7,890
Excess tax (shortfall)/benefit related to share-based compensation	3		3				3
Repurchase of registered shares	(160,086)					(160,086)	(160,086)
Balance at Jun. 30, 2011	1,025,639	335,717	676,719	623,868	(397,785)	(259,268)	979,251	46,388
Balance at Dec. 31, 2011	735,672	321,181	606,053	699,971	(530,068)	(409,390)	687,747	47,925
Net income	78,160			71,505			71,505	6,655
Other comprehensive income, net of tax	(4,487)				(4,255)		(4,255)	(232)
Issuance of registered shares upon exercise of stock options	603	126	477				603
Issuance of registered shares upon vesting of restricted awards		339	(339)
Distributions to noncontrolling interests	(11,734)							(11,734)
Share-based compensation expense	7,319		7,319				7,319
Excess tax (shortfall)/benefit related to share-based compensation	(57)		(57)				(57)
Repurchase of registered shares	(10,955)					(10,955)	(10,955)
Balance at Jun. 30, 2012	$ 794,521	$ 321,646	$ 613,453	$ 771,476	$ (534,323)	$ (420,345)	$ 751,907	$ 42,614

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Income Taxes (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Tax Contingency [Line Items]
U.S. federal statutory rate			35.00%	35.00%
Impact on the effective tax rate for total changes in the valuation allowance			4.00%	4.00%
Impact on the effective tax rate for income earned in the jurisdictions with tax rates lower than the U.S. statutory rate			(16.00%)	(16.00%)
Provision for income taxes	$ 12,291	$ 19,044	$ 27,175	$ 26,327
Tax Audit Court Decision [Member]
Income Tax Contingency [Line Items]
Provision for income taxes	1,360		1,360
Penalties on unrecognized tax benefits	2,529		2,529
Interest expense accrued on unrecognzed tax benefits	$ 318		$ 318

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Business Combinations (Narrative) (Details) (Graf-Wulff GmbH [Member]) In Thousands, unless otherwise specified	0 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2011 EUR (€)
Date of acquisition	December 2011	December 2011
Name of acquired entity	Graf-Wulff GmbH	Graf-Wulff GmbH
Purchase price of acquisition	$ 29,400	€ 22,300

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Litigation and Uncertainties (Summary of asbestos related payments and insurance settlement proceeds - Table) (Details) (United States [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
United States [Member]
Asbestos litigation, defense and case resolution payments	$ 13,300	$ 14,900	$ 28,600	$ 36,500
Insurance proceeds	(11,200)	(6,900)	(21,700)	(16,000)
Net asbestos-related payments	$ 2,100	$ 8,000	$ 6,900	$ 20,500

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Investments (Tables)

6 Months Ended

Jun. 30, 2012

Investments

Equity Method Investments, Summarized Financial Data - Table

	June 30, 2012				December 31, 2011
		Italy		Chile		Italy		Chile
Balance Sheet Data:
Current assets	$	149,800	$	114,256	$	168,501	$	130,880
Other assets (primarily buildings and equipment)		350,636		103,357		366,414		108,165
Current liabilities		95,272		34,626		82,164		55,590
Other liabilities (primarily long-term debt)		217,172		48,636		232,356		45,105
Net assets		187,992		134,351		220,395		138,350

	Quarter Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
		Italy		Chile		Italy		Chile		Italy		Chile		Italy		Chile
Income Statement Data:
Total revenues	$	45,989	$	26,089	$	53,307	$	27,512	$	82,740	$	50,890	$	82,724	$	48,329
Gross profit		12,217		14,776		19,658		17,726		10,452		28,677		31,725		17,855
Income before income taxes		9,717		14,198		16,667		19,699		5,470		28,396		25,923		34,465
Net earnings		5,996		11,571		10,306		13,914		3,647		23,367		15,953		25,728

Equity in the net earnings of unconsolidated affiliates- Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Equity in the net earnings of unconsolidated affiliates	$	8,911	$	15,586	$	15,819	$	28,079
Distributions from unconsolidated affiliates	$	23,145	$	33,733	$	31,917	$	43,410
					June 30, 2012		December 31, 2011
Total investment in unconsolidated affiliates					$	176,745	$	195,033

Refinery/Power Generation Project in Chile - Table

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Fees for operations and maintenance services
	(included in operating revenues)	$	2,623	$	2,660	$	5,257	$	5,320
						June 30, 2012		December 31, 2011
Receivable from our unconsolidated affiliate
	in Chile (included in trade receivables)					$	9,735	$	8,881

Schedule of Variable Interests - Table

Balance Sheet Data (excluding intercompany balances):	June 30, 2012		December 31, 2011
Current assets	$	7,757	$	19,328
Other assets (primarily buildings and equipment)		39,851		39,760
Current liabilities		4,854		6,198
Other liabilities		4,335		4,462
Net assets		38,419		48,428

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Investments (Equity Method Investments, Summarized Financial Data - Table) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Italy [Member]
Current assets	$ 149,800		$ 149,800		$ 168,501
Other assets (primarily buildings and equipment)	350,636		350,636		366,414
Current liabilities	95,272		95,272		82,164
Other liabilities (primarily long-term debt)	217,172		217,172		232,356
Net assets	187,992		187,992		220,395
Total revenues	45,989	53,307	82,740	82,724
Gross profit	12,217	19,658	10,452	31,725
Income before income taxes	9,717	16,667	5,470	25,923
Net earnings	5,996	10,306	3,647	15,953
Chile [Member]
Current assets	114,256		114,256		130,880
Other assets (primarily buildings and equipment)	103,357		103,357		108,165
Current liabilities	34,626		34,626		55,590
Other liabilities (primarily long-term debt)	48,636		48,636		45,105
Net assets	134,351		134,351		138,350
Total revenues	26,089	27,512	50,890	48,329
Gross profit	14,776	17,726	28,677	17,855
Income before income taxes	14,198	19,699	28,396	34,465
Net earnings	$ 11,571	$ 13,914	$ 23,367	$ 25,728

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2012

Borrowings [Abstract]

Components of Long-Term Debt- Table

			June 30, 2012						December 31, 2011
			Current		Long-term		Total		Current		Long-term		Total
Capital Lease Obligations			$	2,485	$	54,430	$	56,915	$	2,463	$	56,080	$	58,543
Special-Purpose Limited Recourse Project Debt:
	FW Power S.r.l.			8,213		64,470		72,683		8,308		69,757		78,065
	Energia Holdings, LLC at 11.443% interest,
		due April 15, 2015		1,912		7,395		9,307		1,912		9,308		11,220
Subordinated Robbins Facility Exit Funding Obligations:
	1999C Bonds at 7.25% interest, due October 15, 2024			-		1,283		1,283		-		1,283		1,283
Total			$	12,610	$	127,578	$	140,188	$	12,683	$	136,428	$	149,111
Estimated fair value							$	159,344					$	164,590

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 78,160	$ 93,112
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	25,796	25,177
Net asbestos-related provision	5,710	2,400
Share-based compensation expense	10,694	10,092
Excess tax shortfall/(benefit) related to share-based compensation	57	(3)
Deferred income tax provision/(benefit)	1,830	(4,518)
Gain on sale of assets	(134)	(816)
Dividends, net of equity in earnings of unconsolidated affiliates	10,511	16,152
Changes in assets and liabilities:
(Increase)/decrease in receivables	(107,372)	49,581
Net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts	(22,288)	(25,310)
Increase in accounts payable and accrued expenses	93,758	7,462
Net change in other current assets and liabilities	(1,895)	(5,506)
Net change in other long-term assets and liabilities	(14,283)	(28,859)
Net cash provided by operating activities	80,544	138,964
CASH FLOWS FROM INVESTING ACTIVITIES
Change in restricted cash	7,854	(12,112)
Capital expenditures	(16,222)	(17,277)
Proceeds from sale of assets	289	1,327
Return of investment from unconsolidated affiliates	6,207	3
Investments in and advances to unconsolidated affiliates	(1,090)	0
Proceeds from sale of short-term investments	1,255	0
Net cash used in investing activities	(1,707)	(28,059)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of shares	(10,955)	(160,086)
Distributions to noncontrolling interests	(11,734)	(8,672)
Proceeds from capital contribution from noncontrolling interests	0	125
Proceeds from stock options exercised	603	11,772
Excess tax (shortfall)/benefit related to share-based compensation	(57)	3
Repayment of debt and capital lease obligations	(6,474)	(7,225)
Net cash used in financing activities	(28,617)	(164,083)
Effect of exchange rate changes on cash and cash equivalents	(1,010)	33,248
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	49,210	(19,930)
Cash and cash equivalents at beginning of year	718,049	1,057,163
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 767,259	$ 1,037,233

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income	$ 35,117	$ 67,836	$ 78,160	$ 93,112
Other comprehensive (loss)/income, net of tax:
Foreign currency translation adjustments	(23,592)	6,992	(9,320)	28,222
Cash flow hedges adjustments, net of tax:
Unrealized (loss)/gain	(521)	(898)	(1,798)	217
Reclassification for losses included in net income	472	888	1,038	1,745
Total cash flow hedges adjustments, net of tax	(49)	(10)	(760)	1,962
Pension and other postretirement benefits adjustment, net of tax:
Net actuarial loss	0	(2,664)	0	(2,664)
Prior Service Credit	0	35,561	0	35,561
Amortization included in net periodic pension cost	2,886	1,820	5,593	4,085
Total pension and other postretirement benefits adjustments, net of tax	2,886	34,717	5,593	36,982
Other comprehensive (loss)/income, net of tax	(20,755)	41,699	(4,487)	67,166
Comprehensive Income	14,362	109,535	73,673	160,278
Less: Comprehensive income attibutable to noncontrolling interests	2,701	4,821	6,423	7,279
Comprehensive income attributable to Foster Wheeler AG	$ 11,661	$ 104,714	$ 67,250	$ 152,999

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

10. Income Taxes

The tax provision for each year-to-date period is calculated by multiplying pre-tax income by the estimated annual effective tax rate for such period. Although we are a Swiss corporation, our shares are exclusively listed on a U.S. exchange; therefore, we reconcile our effective tax rate to the U.S. federal statutory rate of 35% to facilitate meaningful comparison with peer companies in the U.S. capital markets. Our effective tax rate can fluctuate significantly from period to period and may differ significantly from the U.S. federal statutory rate as a result of income taxed in various non-U.S. jurisdictions with rates different from the U.S. statutory rate, as a result of our inability to recognize a tax benefit for losses generated by certain unprofitable operations and as a result of the varying mix of income earned in the jurisdictions in which we operate. In addition, our deferred tax assets are reduced by a valuation allowance when, based upon available evidence, it is more likely than not that the tax benefit of loss carryforwards (or other deferred tax assets) will not be realized in the future. In periods when operating units subject to a valuation allowance generate pre-tax earnings, the corresponding reduction in the valuation allowance favorably impacts our effective tax rate. Conversely, in periods when operating units subject to a valuation allowance generate pre-tax losses, the corresponding increase in the valuation allowance has an unfavorable impact on our effective tax rate.

Effective Tax Rate for 2012

Our effective tax rate for the first six months of 2012 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which is expected to contribute to an approximate 16-percentage point reduction in our effective tax rate for the full year 2012, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.
• A valuation allowance increase because we are unable to recognize a tax benefit for losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which is expected to contribute to an approximate four-percentage point increase in our effective tax rate for the full year 2012.

Effective Tax Rate for 2011

Our effective tax rate for the first six months of 2011 was lower than the U.S. statutory rate of 35% due principally to the net impact of the following:

• Income earned in non-U.S. jurisdictions which contributed to an approximate 16-percentage point reduction in our effective tax rate, primarily because of tax rates lower than the U.S. statutory rate, as well as additional impacts from equity income of joint ventures, tax incentives and credits, and other items.
• A valuation allowance increase because we were unable to recognize a tax benefit for year-to-date losses subject to a valuation allowance in certain jurisdictions (primarily in the U.S.), which contributed to an approximate four-percentage point increase in our effective tax rate.

We monitor the jurisdictions for which valuation allowances against deferred tax assets were established in previous years, and we evaluate, on a quarterly basis, the need for the valuation allowances against deferred tax assets in those jurisdictions. Such evaluation includes a review of all available evidence, both positive and negative, in determining whether a valuation allowance is necessary.

The majority of the U.S. federal tax benefits, against which valuation allowances have been established, do not expire until 2025 and beyond, based on current tax laws.

Our subsidiaries file income tax returns in many tax jurisdictions, including the U.S., several U.S. states and numerous non-U.S. jurisdictions around the world. Tax returns are also filed in jurisdictions where our subsidiaries execute project-related work. The statute of limitations varies by jurisdiction. Because of the number of jurisdictions in which we file tax returns, in any given year the statute of limitations in a number of jurisdictions may expire within 12 months from the balance sheet date. As a result, we expect recurring changes in unrecognized tax benefits due to the expiration of the statute of limitations, none of which are expected to be individually significant. With few exceptions, we are no longer subject to U.S. (including federal, state and local) or non-U.S. income tax examinations by tax authorities for years before 2007.

A number of tax years are under audit by the relevant tax authorities in various jurisdictions, including the U.S. and several states within the U.S. We anticipate that several of these audits may be concluded in the foreseeable future, including in the remainder of 2012. Based on the status of these audits, it is reasonably possible that the conclusion of the audits may result in a reduction of unrecognized tax benefits. However, it is not possible to estimate the magnitude of any such reduction at this time. We recognize interest accrued on the unrecognized tax benefits in interest expense and penalties on the unrecognized tax benefits in other deductions, net on our consolidated statement of operations.

In the quarter and six months ended June 30, 2012, we received an adverse court decision, which we are appealing,related to an audit of a prior tax year. As a result of the decision, our provision for income taxes was increased by $1,360, our penalties on unrecognized tax benefits increased by $2,529 and our interest expense on unrecognized tax benefits increased by $318.

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Document Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 20, 2012
Document And Entity Information [Abstract]
Entity Registrant Name	Foster Wheeler AG
Entity Central Index Key	0001130385
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		107,867,980

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Business Segments

6 Months Ended

Jun. 30, 2012

Business Segments [Abstract]

Business Segments

11. Business Segments

We operate through two business groups: our Global E&C Group and our Global Power Group.

Global E&C Group

Our Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation facilities, distribution facilities, gasification facilities and processing facilities associated with the metals and mining sector. Our Global E&C Group is also involved in the design of facilities in developing market sectors, including carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. Additionally, our Global E&C Group is also involved in the development, engineering, construction, ownership and operation of power generation facilities, from conventional and renewable sources, and of waste-to-energy facilities. Our Global E&C Group generates revenues from design, engineering, procurement, construction and project management activities pursuant to contracts which generally span up to approximately four years in duration and from returns on its equity investments in various power production facilities.

Global Power Group

Our Global Power Group designs, manufactures and erects steam generating and auxiliary equipment for electric power generating stations, district heating and industrial facilities worldwide. Additionally, our Global Power Group owns and operates a waste-to-energy facility; holds a controlling interest and operates a combined-cycle gas turbine facility; owns a noncontrolling interest in a petcoke-fired circulating fluidized-bedfacility for refinery steam and power generation; and operates a university cogeneration power facility for steam/electric generation. Our Global Power Group generates revenues from engineering activities, equipment supply, construction contracts, operating and maintenance agreements, royalties from licensing its technology, and from returns on its investments in various power production facilities.

Our Global Power Group's steam generating equipment includes a broad range of steam generation and environmental technologies, offering independent power producers, utilities, municipalities and industrial clients high-value technology solutions for converting a wide range of fuels, such as coal, lignite, petroleum coke, oil, gas, solar, biomass, municipal solid waste and waste flue gases into steam, which can be used for power generation, district heating or industrial processes.

Corporate and Finance Group

In addition to these two business groups, which also represent two of our operating segments for financial reporting purposes, we report corporate center expenses, our captive insurance operation and expenses related to certain legacy liabilities, such as asbestos, in the Corporate and Finance Group, which also represents an operating segment for financial reporting purposes and which we refer to as the C&F Group.

Operating Revenues

We conduct our business on a global basis. Operating revenues by industry and business segment were as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Operating Revenues (Third-Party) by Industry:
Power generation	$	262,321	$	269,054	$	514,436	$	464,183
Oil refining		360,750		383,465		685,911		746,994
Pharmaceutical		13,614		15,290		26,593		26,474
Oil and gas		183,563		336,055		415,114		608,102
Chemical/petrochemical		77,427		130,409		145,747		284,386
Power plant operation and maintenance		34,913		34,235		64,193		62,564
Environmental		2,456		2,977		4,644		5,536
Other, net of eliminations		7,982		12,393		19,484		21,891
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130
Operating Revenues (Third-Party) by Business Segment:
Global E&C Group	$	666,142	$	892,080	$	1,337,015	$	1,715,823
Global Power Group		276,884		291,798		539,107		504,307
Total	$	943,026	$	1,183,878	$	1,876,122	$	2,220,130

EBITDA

EBITDA is the primary measure of operating performance used by our chief operating decision maker.We define EBITDA as net income attributable to Foster Wheeler AG before interest expense, income taxes, depreciation and amortization.

A reconciliation of EBITDA to net income attributable to Foster Wheeler AG is shown below:

			Quarter Ended June 30,				Six Months Ended June 30,
				2012		2011		2012		2011
EBITDA:
	Global E&C Group		$	39,917	$	54,842	$	86,845	$	96,510
	Global Power Group			43,850		67,735		96,166		94,199
	C&F Group *			(23,592)		(24,291)		(50,870)		(45,619)
		Total		60,175		98,286		132,141		145,090
Add: Net income attributable to noncontrolling interests				4,258		4,527		6,655		6,832
Less: Interest expense				4,249		3,427		7,665		7,306
Less: Depreciation and amortization				12,776		12,506		25,796		25,177
Income before income taxes				47,408		86,880		105,335		119,439
Less: Provision for income taxes				12,291		19,044		27,175		26,327
Net income				35,117		67,836		78,160		93,112
Less: Net income attributable to noncontrolling interests				4,258		4,527		6,655		6,832
Net income attributable to Foster Wheeler AG			$	30,859	$	63,309	$	71,505	$	86,280
______________
* Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances
		related to intercompany interest.
EBITDA in the above table includes the following:			Quarter Ended June 30,				Six Months Ended June 30,
				2012		2011		2012		2011
Net (decrease)/increase in contract profit from the regular
	revaluation of final estimated contract profit revisions:(1)
	Global E&C Group(2)		$	(2,800)	$	1,500	$	5,100	$	3,900
	Global Power Group(2)			11,000		14,300		26,500		9,600
		Total	$	8,200	$	15,800	$	31,600	$	13,500
Net asbestos-related provisions:(3)
	Global E&C Group		$	1,700	$	-	$	1,700	$	-
	C&F Group			2,000		2,000		4,000		2,400
		Total	$	3,700	$	2,000	$	5,700	$	2,400

______________

(1)Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 for further information regarding changes in our final estimated contract profit.

(2)The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months ended June 30, 2011 included the impact of two out-of-period corrections for reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global E&C Group and our Global Power Group of approximately $3,200 and $4,600, respectively. The corrections were recorded in the first quarter of 2011 and are included in the six months ended June 30, 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

(3)Please refer to Note 12 for further information regarding the revaluation of our asbestos liability and related asset.

The accounting policies of our business segments are the same as those described in our summary of significant accounting policies as disclosed in our 2011 Form 10-K. The only significant intersegment transactions relate to interest on intercompany balances. We account for interest on those arrangements as if they were third-party transactions (i.e., at current market rates), and we include the elimination of that activity in the results of the C&F Group.

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CONSOLIDATED BALANCE SHEET (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 767,259	$ 718,049
Short-term investments	0	1,294
Accounts and notes receivable, net:
Trade	529,690	427,984
Other	87,446	97,495
Contracts in process	212,209	166,648
Prepaid, deferred and refundable income taxes	63,812	62,616
Other current assets	41,397	49,101
Total current assets	1,701,813	1,523,187
Land, buildings and equipment, net	333,519	341,987
Restricted cash	35,384	44,094
Notes and accounts receivable - long-term	6,453	6,210
Investments in and advances to unconsolidated affiliates	193,474	211,109
Goodwill	110,904	112,120
Other intangible assets, net	67,432	74,386
Asbestos related insurance recovery receivable	141,952	157,127
Other assets	123,791	118,178
Deferred tax assets	26,404	25,482
TOTAL ASSETS	2,741,126	2,613,880
LIABILITIES, TEMPORARY EQUITY AND EQUITY
Current installments on long-term debt	12,610	12,683
Accounts payable	343,758	250,821
Accrued expenses	222,662	237,089
Billings in excess of costs and estimated earnings on uncompleted contracts	571,591	550,746
Income taxes payable	34,821	39,645
Total current liabilities	1,185,442	1,090,984
Long-term debt	127,578	136,428
Deferred tax liabilities	44,502	44,622
Pension, postretirement and other employee benefits	165,253	171,065
Asbestos-related liability	253,713	269,520
Other long-term liabilities	161,748	160,596
Commitments and contingencies
TOTAL LIABILITIES	1,938,236	1,873,215
Temporary Equity:
Non-vested share-based compensation awards subject to redemption	8,369	4,993
TOTAL TEMPORARY EQUITY	8,369	4,993
Equity:
Registered shares: CHF 3.00 par value; authorized: 187,989,987 shares and 187,847,379 shares, respectively; conditionally authorized: 59,639,130 shares and 59,781,738 shares, respectively; issued: 125,672,031 shares and 125,529,423 shares, respectively; outstanding: 107,867,511 shares and 108,289,003 shares, respectively.	321,646	321,181
Paid-in capital	613,453	606,053
Retained earnings	771,476	699,971
Accumulated other comprehensive loss	(534,323)	(530,068)
Treasury shares (outstanding: 17,804,520 shares and 17,240,420 shares, respectively)	(420,345)	(409,390)
TOTAL FOSTER WHEELER AG SHAREHOLDERS' EQUITY	751,907	687,747
Noncontrolling interests	42,614	47,925
TOTAL EQUITY	794,521	735,672
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY	$ 2,741,126	$ 2,613,880

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Borrowings

6 Months Ended

Jun. 30, 2012

Borrowings [Abstract]

Borrowings

5. Borrowings

The following table shows the components of our long-term debt:

			June 30, 2012						December 31, 2011
			Current		Long-term		Total		Current		Long-term		Total
Capital Lease Obligations			$	2,485	$	54,430	$	56,915	$	2,463	$	56,080	$	58,543
Special-Purpose Limited Recourse Project Debt:
	FW Power S.r.l.			8,213		64,470		72,683		8,308		69,757		78,065
	Energia Holdings, LLC at 11.443% interest,
		due April 15, 2015		1,912		7,395		9,307		1,912		9,308		11,220
Subordinated Robbins Facility Exit Funding Obligations:
	1999C Bonds at 7.25% interest, due October 15, 2024			-		1,283		1,283		-		1,283		1,283
Total			$	12,610	$	127,578	$	140,188	$	12,683	$	136,428	$	149,111
Estimated fair value							$	159,344					$	164,590

U.S. Senior Credit Agreement — On July 30, 2010, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.'s subsidiaries and BNP Paribas, as Administrative Agent, entered into a four-year amendment and restatement of our U.S. senior credit agreement, which we entered into in October 2006. The amended and restated U.S. senior credit agreement, which became an unsecured facility in March 2012 as described below, provides for a facility of $450,000, and includes a provision which permits future incremental increases of up to an aggregate of $225,000 in total additional availability under the facility. The amended and restated U.S. senior credit agreement permits us to issue up to $450,000 in letters of credit under the facility. Letters of credit issued under the amended and restated U.S. senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in our corporate credit rating as reported by Moody's Investors Service, which we refer to as Moody's, and/or Standard & Poor's, which we refer to as S&P. We received a corporate credit rating of BBB- as issued by S&P during the third quarter of 2010, which, under the amended and restated U.S. senior credit agreement, reduced our pricing for letters of credit issued under the agreement. We received a corporate credit rating of Baa3 as issued by Moody's during the first quarter of 2012, which led to the automatic release and termination of all liens securing our obligations under the agreement. Based on our current credit ratings, letter of credit fees for performance and financial letters of credit issued under the amended and restated U.S. senior credit agreement are 1.000% and 2.000% per annum of the outstanding amount, respectively, excluding fronting fees. We also have the option to use up to $100,000 of the $450,000 for revolving borrowings at a rate equal to adjusted LIBOR, as defined in the agreement, plus 2.000%, subject also to the performance pricing noted above.

Fees and expenses incurred in conjunction with the execution of our amended and restated U.S. senior credit agreement were approximately $4,300 and are being amortized to expense over the four-year term of the agreement, which commenced in the third quarter of 2010.

Prior to becoming an unsecured facility in March 2012, our amended and restated U.S. senior credit agreement required that the assets and/or stock of certain of our subsidiaries be held as collateral. Ouramended and restated U.S. senior credit agreement contains various customary restrictive covenants that generally limit our ability to, among other things, incur additional indebtedness or guarantees, create liens or other encumbrances on property, sell or transfer certain property and thereafter rent or lease such property for substantially the same purposes as the property sold or transferred, enter into a merger or similar transaction, make investments, declare dividends or make other restricted payments, enter into agreements with affiliates that are not on an arms' length basis, enter into any agreement that limits our ability to create liens or the ability of a subsidiary to pay dividends, engage in new lines of business, with respect to Foster Wheeler AG, change Foster Wheeler AG's fiscal year or, with respect to Foster Wheeler AG, Foster Wheeler Ltd. and one of our holding company subsidiaries, directly acquire ownership of the operating assets used to conduct any business.

In addition, ouramended and restated U.S. senior credit agreement contains financial covenants requiring us not to exceed a total leverage ratio, which compares total indebtedness to EBITDA, and to maintain a minimum interest coverage ratio, which compares EBITDA to interest expense. All such terms are defined in ouramended and restated U.S. senior credit agreement. We must be in compliance with the total leverage ratio at all times, while the interest coverage ratio is measured quarterly. We have been in compliance with all financial covenants and other provisions of our U.S. senior credit agreement prior and subsequent to our amendment and restatement of the agreement.

We had approximately $275,500and $225,600 of letters of credit outstanding under our U.S. senior credit agreement as of June 30,2012 and December 31, 2011, respectively. The letter of credit fees under the U.S. senior credit agreement outstanding as of June 30, 2012 and December 31, 2011 ranged from 1.000% to 2.000% of the outstanding amount, excluding fronting fees. There were no funded borrowings outstanding under our U.S. senior credit agreement as of June 30, 2012 and December 31, 2011.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

4. Goodwill and Other Intangible Assets

We have tracked accumulated goodwill impairments since December 29, 2001, the first day of fiscal year 2002 and our date of adoption of the accounting guidelines related to the assessment of goodwill for impairment. There were no accumulated goodwill impairment losses as of that date. The following table provides our net carrying amount of goodwill by geographic region in which our reporting units are located:

	Global E&C Group				Global Power Group
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
U.S.	$	39,357	$	39,357	$	4,266	$	4,266
Asia		845		887		-		-
Europe		-		-		66,436		67,610
Total	$	40,202	$	40,244	$	70,702	$	71,876

Please see Note 2 for further information regardingan increase to our goodwill balance as of December 31, 2011 related to our Graf-Wulff GmbHpurchase price allocation.

The following table sets forth amounts relating to our identifiable intangible assets:

		June 30, 2012						December 31, 2011
		Gross				Net		Gross				Net
		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
		Amount		Amortization		Amount		Amount		Amortization		Amount
Patents		$	40,670	$	(31,055)	$	9,615	$	40,920	$	(30,237)	$	10,683
Trademarks			63,344		(30,075)		33,269		63,711		(29,337)		34,374
Customer relationships,
	pipeline and backlog		29,523		(10,819)		18,704		30,586		(7,725)		22,861
Technology			6,294		(450)		5,844		6,468		-		6,468
Total		$	139,831	$	(72,399)	$	67,432	$	141,685	$	(67,299)	$	74,386

As of June 30,2012, the net carrying amounts of our identifiable intangible assets were $54,050for our Global Power Group and $13,382 for our Global E&C Group. Amortization expense related to identifiable intangible assets is recorded within cost of operating revenues on the consolidated statement of operations.

The following table details amortization expense related to identifiable intangible assets by period:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Amortization expense		$	2,530	$	1,649	$	5,552	$	3,297
Approximate full year amortization expense for years:
	2012							$	9,300
	2013								7,800
	2014								7,800
	2015								7,700
	2016								5,300

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets

Net Carrying Amount of Goodwill by Geographic Region and Business Segment - Table

	Global E&C Group				Global Power Group
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
U.S.	$	39,357	$	39,357	$	4,266	$	4,266
Asia		845		887		-		-
Europe		-		-		66,436		67,610
Total	$	40,202	$	40,244	$	70,702	$	71,876

Finite-lived Intangible Assets - Table

		June 30, 2012						December 31, 2011
		Gross				Net		Gross				Net
		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
		Amount		Amortization		Amount		Amount		Amortization		Amount
Patents		$	40,670	$	(31,055)	$	9,615	$	40,920	$	(30,237)	$	10,683
Trademarks			63,344		(30,075)		33,269		63,711		(29,337)		34,374
Customer relationships,
	pipeline and backlog		29,523		(10,819)		18,704		30,586		(7,725)		22,861
Technology			6,294		(450)		5,844		6,468		-		6,468
Total		$	139,831	$	(72,399)	$	67,432	$	141,685	$	(67,299)	$	74,386

Intangible Assets Amortization Schedule - Table

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Amortization expense		$	2,530	$	1,649	$	5,552	$	3,297
Approximate full year amortization expense for years:
	2012							$	9,300
	2013								7,800
	2014								7,800
	2015								7,700
	2016								5,300

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Litigation and Uncertainties

6 Months Ended

Jun. 30, 2012

Litigation and Uncertainties

Litigation and Uncertainties

12. Litigation and Uncertainties

Asbestos

Some of our U.S. and U.K. subsidiaries are defendants in numerous asbestos-related lawsuits and out-of-court informal claims pending in the U.S. and the U.K. Plaintiffs claim damages for personal injury alleged to have arisen from exposure to or use of asbestos in connection with work allegedly performed by our subsidiaries during the 1970s and earlier.

United States

A summary of our U.S. claim activity is as follows:

	Quarter Ended June 30,		Six Months Ended June 30,
Number of Claims by period:	2012	2011	2012	2011
Open claims at beginning of period	124,280	123,580	124,540	124,420
New claims	1,180	1,100	2,340	2,380
Claims resolved	(780)	(690)	(2,200)	(2,810)
Open claims at end of period	124,680	123,990	124,680	123,990

We had the following U.S. asbestos-related assets and liabilities recorded on our consolidated balance sheet as of the dates set forth below. Total U.S. asbestos-related liabilities are estimated through the second quarter of 2027. Although it is likely that claims will continue to be filed after that date, the uncertainties inherent in any long-term forecast prevent us from making reliable estimates of the indemnity and defense costs that might be incurred after that date.

United States Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets recorded within:
Accounts and notes receivable-other	$	34,593	$	43,677
Asbestos-related insurance recovery receivable		118,465		131,007
Total asbestos-related assets	$	153,058	$	174,684
Asbestos-related liabilities recorded within:
Accrued expenses	$	41,050	$	50,900
Asbestos-related liability		228,649		243,400
Total asbestos-related liabilities	$	269,699	$	294,300
Liability balance by claim category:
Open claims	$	54,770	$	56,700
Future unasserted claims		214,929		237,600
Total asbestos-related liabilities	$	269,699	$	294,300

We have worked with Analysis, Research & Planning Corporation, or ARPC, nationally recognized consultants in the U.S. with respect to projecting asbestos liabilities, to estimate the amount of asbestos-related indemnity and defense costs at each year-end based on a forecast for the next 15 years. Each year we have recorded our estimated asbestos liability at a level consistent with ARPC's reasonable best estimate. Our estimated asbestos liability decreased during the first six months of 2012 as a result of indemnity and defense cost payments totaling approximately $28,600, partially offset by an increase of $4,000 related to the accrual of our rolling 15-year asbestos-related liability estimate. The total asbestos-related liabilities are comprised of our estimates for our liability relating to open (outstanding) claims being valued and our liability for future unasserted claims through the second quarter of 2027.

Our liability estimate is based upon the following information and/or assumptions: number of open claims, forecasted number of future claims, estimated average cost per claim by disease type – mesothelioma, lung cancer and non-malignancies – and the breakdown of known and future claims into disease type – mesothelioma, lung cancer or non-malignancies, as well as other factors. The total estimated liability, which has not been discounted for the time value of money, includes both the estimate of forecasted indemnity amounts and forecasted defense costs. Total defense costs and indemnity liability payments are estimated to be incurred through the second quarter of 2027, during which period the incidence of new claims is forecasted to decrease each year. We believe that it is likely that there will be new claims filed after the second quarter of 2027, but in light of uncertainties inherent in long-term forecasts, we do not believe that we can reasonably estimate the indemnity and defense costs that might be incurred after the second quarter of 2027.

Through June 30, 2012, total cumulative indemnity costs paid, prior to insurance recoveries, were approximately $781,300 and total cumulative defense costs paid were approximately $379,500, or approximately 33% of total defense and indemnity costs. The overall historic average combined indemnity and defense cost per resolved claim through June 30, 2012 has been approximately $3.1. The average cost per resolved claim is increasing and we believe it will continue to increase in the future.

Over the last several years, certain of our subsidiaries have entered into settlement agreements calling for insurers to make lump-sum payments, as well as payments over time, for use by our subsidiaries to fund asbestos-related indemnity and defense costs and, in certain cases, for reimbursement for portions of out-of-pocket costs previously incurred. During the first six months of 2011, our subsidiaries reached agreements with certain of their insurers to settle their disputed asbestos-related insurance coverage. As a result of these settlements, we increased our asbestos-related insurance asset and recorded settlement gains. Please see the table below for a breakout of the gains by period.

Asbestos-related assets under executed settlement agreements with insurers due in the next 12 months are recorded within accounts and notes receivable-other and amounts due beyond 12 months are recorded within asbestos-related insurance recovery receivable. Asbestos-related insurance recovery receivable also includes our best estimate of actual and probable insurance recoveries relating to our liability for pending and estimated future asbestos claims through the second quarterof 2027. Our asbestos-related assets have not been discounted for the time value of money.

Our insurance recoveries may be limited by future insolvencies among our insurers. Other than receivables related to bankruptcy court-approved settlements during liquidation proceedings, we have not assumed recovery in the estimate of our asbestos-related insurance asset from any of our currently insolvent insurers. We have considered the financial viability and legal obligations of our subsidiaries' insurance carriers and believe that the insurers or their guarantors will continue to reimburse a significant portion of claims and defense costs relating to asbestos litigation. As of June 30, 2012 and December 31, 2011, we have not recorded an allowance for uncollectible balances against our asbestos-related insurance assets. We write-off receivables from insurers that have become insolvent; there have been no such write-offs during the six months endedJune 30, 2012 and 2011. During 2011, we reached an agreement with an insurer that was under bankruptcy liquidation and for which we had written-off our receivable prior to 2011. The asset awarded under the bankruptcy liquidation for this insurer was $4,500 and was included in our asbestos-related assets as of December 31, 2011. This receivable was subsequently collected during the first six months of 2012. Other insurers may become insolvent in the future and our insurers may fail to reimburse amounts owed to us on a timely basis. If we fail to realize the expected insurance recoveries, or experience delays in receiving material amounts from our insurers, our business, financial condition, results of operations and cash flows could be materially adversely affected.

The following table summarizes our net asbestos-related provision:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Provision for revaluation	$	2,000	$	2,000	$	3,997	$	4,000
Gain on the settlement of coverage litigation		-		-		-		(1,600)
Net asbestos-related provision	$	2,000	$	2,000	$	3,997	$	2,400

Our net asbestos-related provision is the result of our rolling 15-year asbestos liability estimate, net of anticipated insurance recoveries, partially offset by gains on the settlement of coverage litigation with asbestos insurance carriers.

The following table summarizes our approximate asbestos-related payments and insurance proceeds:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Asbestos litigation, defense and case resolution payments	$	13,300	$	14,900	$	28,600	$	36,500
Insurance proceeds		(11,200)		(6,900)		(21,700)		(16,000)
Net asbestos-related payments	$	2,100	$	8,000	$	6,900	$	20,500

We expect to have net cash outflows of $7,900during the full year 2012as a result of asbestos liability indemnity and defense payments in excess of insurance settlement proceeds. This estimate assumes no additional settlements with insurance companies and no elections by us to fund additional payments. As we continue to collect cash from insurance settlements and assuming no increase in our asbestos-related insurance liability, the asbestos-related insurance receivable recorded on our consolidated balance sheet will continue to decrease.

The estimate of the liabilities and assets related to asbestos claims and recoveries is subject to a number of uncertainties that may result in significant changes in the current estimates. Among these are uncertainties as to the ultimate number and type of claims filed, the amounts of claim costs, the impact of bankruptcies of other companies with asbestos claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, as well as potential legislative changes. Increases in the number of claims filed or costs to resolve those claims could cause us to increase further the estimates of the costs associated with asbestos claims and could have a material adverse effect on our financial condition, results of operations and cash flows.

Based on ourDecember 31, 2011 liability estimate, an increase of 25% in the average per claim indemnity settlement amount would increase the liability by $47,700 and the impact on expense would be dependent upon available additional insurance recoveries. Assuming no change to the assumptions currently used to estimate our insurance asset, this increase would result in a charge on our consolidated statement of operations of approximately 80% of the increase in the liability. Long-term cash flows would ultimately change by the same amount. Should there be an increase in the estimated liability in excess of 25%, the percentage of that increase that would be expected to be funded by additional insurance recoveries will decline.

United Kingdom

Some of our subsidiaries in the United Kingdom have also received claims alleging personal injury arising from exposure to asbestos. To date, 1,008 claims have been brought against our U.K. subsidiaries, of which 299 remained open as of June 30, 2012. None of the settled claims have resulted in material costs to us.

The following table summarizes our asbestos-related liabilities and assets for our U.K. subsidiaries based on open (outstanding) claims and our estimate for future unasserted claims through the second quarter of 2027:

United Kingdom Asbestos	June 30, 2012		December 31, 2011
Asbestos-related assets:
Accounts and notes receivable-other	$	2,698	$	2,677
Asbestos-related insurance recovery receivable		23,487		26,120
Total asbestos-related assets	$	26,185	$	28,797
Asbestos-related liabilities:
Accrued expenses	$	2,698	$	2,677
Asbestos-related liability		25,063		26,120
Total asbestos-related liabilities	$	27,761	$	28,797
Liability balance by claim category:
Open claims	$	6,832	$	8,030
Future unasserted claims		20,929		20,767
Total asbestos-related liabilities	$	27,761	$	28,797

The liability estimates are based on a U.K. House of Lords judgment that pleural plaque claims do not amount to a compensable injury and accordingly, we have reduced our liability assessment. If this ruling is reversed by legislation, the total asbestos liability recorded in the U.K. would be approximately $41,000, with a corresponding increase in the asbestos-related asset.

Project Claims

In the ordinary course of business, we are parties to litigation involving clients and subcontractors arising out of project contracts. Such litigation includes claims and counterclaims by and against us for canceled contracts, for additional costs incurred in excess of current contract provisions, as well as for back charges for alleged breaches of warranty and other contract commitments. If we were found to be liable for any of the claims/counterclaims against us, we would incur a charge against earnings to the extent a reserve had not been established for the matter in our accounts or if the liability exceeds established reserves.

Due to the inherent commercial, legal and technical uncertainties underlying the estimation of our project claims, the amounts ultimately realized or paid by us could differ materially from the balances, if any, included in our financial statements, which could result in additional material charges against earnings, and which could also materially adversely impact our financial condition and cash flows.

Environmental Matters

CERCLA and Other Remedial Matters

Under U.S. federal statutes, such as the Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Clean Water Act and the Clean Air Act, and similar state laws, the current owner or operator of real property and the past owners or operators of real property (if disposal of toxic or hazardous substances took place during such past ownership or operation) may be jointly and severally liable for the costs of removal or remediation of toxic or hazardous substances on or under their property, regardless of whether such materials were released in violation of law or whether the owner or operator knew of, or was responsible for, the presence of such substances. Moreover, under CERCLA and similar state laws, persons who arrange for the disposal or treatment of hazardous or toxic substances may also be jointly and severally liable for the costs of the removal or remediation of such substances at a disposal or treatment site, whether or not such site was owned or operated by such person, which we refer to as an off-site facility. Liability at such off-site facilities is typically allocated among all of the financially viable responsible parties based on such factors as the relative amount of waste contributed to a site, toxicity of such waste, relationship of the waste contributed by a party to the remedy chosen for the site and other factors.

We currently own and operate industrial facilities and we have also transferred our interests in industrial facilities that we formerly owned or operated. It is likely that as a result of our current or former operations, hazardous substances have affected the facilities or the real property on which they are or were situated. We also have received and may continue to receive claims pursuant to indemnity obligations from the present owners of facilities we have transferred, which claims may require us to incur costs for investigation and/or remediation.

We are currently engaged in the investigation and/or remediation under the supervision of the applicable regulatory authorities at two of our or our subsidiaries' former facilities (including Mountain Top, which is described below). In addition, we sometimes engage in investigation and/or remediation without the supervision of a regulatory authority. Although we do not expect the environmental conditions at our present or former facilities to cause us to incur material costs in excess of those for which reserves have been established, it is possible that various events could cause us to incur costs materially in excess of our present reserves in order to fully resolve any issues surrounding those conditions. Further, no assurance can be provided that we will not discover additional environmental conditions at our currently or formerly owned or operated properties, or that additional claims will not be made with respect to formerly owned properties, requiring us to incur material expenditures to investigate and/or remediate such conditions.

We have been notified that we are a potentially responsible party (“PRP”) under CERCLA or similar state laws at three off-site facilities. At each of these sites, our liability should be substantially less than the total site remediation costs because the percentage of waste attributable to us compared to that attributable to all other PRPs is low. We do not believe that our share of cleanup obligations at any of the off-site facilities as to which we have received a notice of potential liability will exceed $500 in the aggregate. We have also received and responded to a request for information from the United States Environmental Protection Agency (“USEPA”) regarding a fourth off-site facility. We do not know what, if any, further actions USEPA may take regarding this fourth off-site facility.

Mountain Top

In February 1988, one of our subsidiaries, Foster Wheeler Energy Corporation (“FWEC”), entered into a Consent Agreement and Order with the USEPA and the Pennsylvania Department of Environmental Protection (“PADEP”) regarding its former manufacturing facility in Mountain Top, Pennsylvania. The order essentially required FWEC to investigate and remediate as necessary contaminants, including trichloroethylene (“TCE”), in the soil and groundwater at the facility. Pursuant to the order, in 1993 FWEC installed a “pump and treat” system to remove TCE from the groundwater. It is not possible at the present time to predict how long FWEC will be required to operate and maintain this system.

In the fall of 2004, FWEC sampled the private domestic water supply wells of certain residences in Mountain Top and identified approximately 30 residences whose wells contained TCE at levels in excess of Safe Drinking Water Act standards. The subject residences are located approximately one mile to the southwest of where the TCE previously was discovered in the soils at the former FWEC facility. Since that time, FWEC, USEPA and PADEP have cooperated in responding to the foregoing. Although FWEC believed the evidence available was not sufficient to support a determination that FWEC was responsible for the TCE in the residential wells, FWEC immediately provided the affected residences with bottled water, followed by water filters, and, pursuant to a settlement agreement with USEPA, it hooked them up to the public water system. Pursuant to an amendment of the settlement agreement, FWEC subsequently agreed with USEPA to arrange and pay for the hookup of several additional residences, even though TCE has not been detected in the wells at those residences.  The hookups to the agreed-upon residences have been completed. FWEC is incurring costs related to public outreach and communications in the affected area, and it may be required to pay the agencies' costs in overseeing and responding to the situation.

FWEC is also incurring further costs in connection with a Remedial Investigation / Feasibility Study (“RI/FS”) that in March 2009 it agreed to conduct. In April 2009, USEPA proposed for listing on the National Priorities List (“NPL”) an area consisting of FWEC's former manufacturing facility and the affected residences, but it also stated that the proposed listing may not be finalized if FWEC complies with its agreement to conduct the RI/FS. FWEC submitted comments opposing the proposed listing. FWEC has accrued its best estimate of the cost of the foregoing and it reviews this estimate on a quarterly basis.

Other costs to which FWEC could be exposed could include, among other things, FWEC's counsel and consulting fees, further agency oversight and/or response costs, costs and/or exposure related to potential litigation, and other costs related to possible further investigation and/or remediation. At present, it is not possible to determine whether FWEC will be determined to be liable for some or all of the items described in this paragraph or to reliably estimate the potential liability associated with the items. If one or more third-parties are determined to be a source of the TCE, FWEC will evaluate its options regarding the potential recovery of the costs FWEC has incurred, which options could include seeking to recover those costs from those determined to be a source.

Other Environmental Matters

Our operations, especially our manufacturing and power plants, are subject to comprehensive laws adopted for the protection of the environment and to regulate land use. The laws of primary relevance to our operations regulate the discharge of emissions into the water and air, but can also include hazardous materials handling and disposal, waste disposal and other types of environmental regulation. These laws and regulations in many cases require a lengthy and complex process of obtaining licenses, permits and approvals from the applicable regulatory agencies. Noncompliance with these laws can result in the imposition of material civil or criminal fines or penalties. We believe that we are in substantial compliance with existing environmental laws. However, no assurance can be provided that we will not become the subject of enforcement proceedings that could cause us to incur material expenditures. Further, no assurance can be provided that we will not need to incur material expenditures beyond our existing reserves to make capital improvements or operational changes necessary to allow us to comply with future environmental laws.

With regard to the foregoing, the waste-to-energy facility operated by our Camden County Energy Recovery Associates, LP (“CCERA”) project subsidiary is subject to certain revisions to New Jersey's mercury air emission regulations. The revisions made CCERA's mercury control requirements more stringent, especially when the last phase of the revisions became effective on January 3, 2012. CCERA's management believes that the data generated during stack testing in 2012 and the several prior years tends to indicate that the facility will be able to comply with even the most stringent of the regulatory revisions without installing additional control equipment. Estimates of the cost of installing the additional control equipment are approximately $30,000 based on our last assessment.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

8. Derivative Financial Instruments

We are exposed to certain risks relating to our ongoing business operations. The risks managed by using derivative financial instruments relate primarily to foreign currency exchange rate risk and, to a significantly lesser extent, interest rate risk. Derivative financial instruments held by our consolidated entities are recognized as assets or liabilities at fair value on our consolidated balance sheet. Our proportionate share of the fair value of derivative financial instruments held by our equity method investees is included in investments in and advances to unconsolidated affiliates on our consolidated balance sheet. The fair values of derivative financial instruments held by our consolidated entities were as follows:

Fair Values of Derivative Financial Instruments
					Asset Derivatives						Liability Derivatives
			Balance Sheet		June 30,		December 31,		Balance Sheet		June 30,		December 31,
			Location		2012		2011		Location		2012		2011
Derivatives designated as
		hedging instruments:
	Interest rate swap
		contracts	Other assets		$	-	$	-	Other long-term liabilities		$	9,292	$	8,707
Derivatives not designated
		as hedging instruments:
	Foreign currency		Contracts in process or						Contracts in process or
		forward contracts		billings in excess of costs						billings in excess of costs
				and estimated earnings on						and estimated earnings on
				uncompleted contracts		1,075		1,691		uncompleted contracts		6,088		6,446
	Foreign currency
		forward contracts	Other accounts receivable			441		75	Accounts payable			247		34
Total derivatives					$	1,516	$	1,766			$	15,627	$	15,187

Foreign Currency Exchange Rate Risk

We operate on a worldwide basis with substantial operations in Europe that subject us to foreign currency exchange rate risk mainly relative to the British pound, Euro and Polish Zloty. Under our risk management policies, we do not hedge translation risk exposure. All activities of our affiliates are recorded in their functional currency, which is typically the local currency in the country of domicile of the affiliate. In the ordinary course of business, our affiliates enter into transactions in currencies other than their respective functional currencies. We seek to minimize the resulting foreign currency transaction risk by contracting for the procurement of goods and services in the same currency as the sales value of the related long-term contract. We further mitigate the risk through the use of foreign currency forward contracts to hedge the exposed item, such as anticipated purchases or revenues, back to their functional currency.

The notional amount of our foreign currency forward contracts provides one measure of our transaction volume outstanding as of the balance sheet date. As of June 30,2012, we had a total gross notional amount ofapproximately $421,500related to foreign currency forward contracts. Amounts ultimately realized upon finalsettlement of these financial instruments, along with the gains and losses on the underlying exposures within our long-term contracts, will depend on actual market exchange rates during the remaining life of the instruments. The contract maturity dates range from the remainder of 2012 through 2014.

We are exposed to credit loss in the event of non-performance by the counterparties. These counterparties are commercial banks that are primarily rated “BBB+” or better by S&P (or the equivalent by other recognized credit rating agencies).

Increases in the fair value of the currencies sold forward result in losses while increases in the fair value of the currencies bought forward result in gains. For foreign currency forward contracts used to mitigate currency risk on our projects, the gain or loss from the portion of the mark-to-market adjustment related to the completed portion of the underlying project is included in cost of operating revenues at the same time as the underlying foreign currency exposure occurs. The gain or loss from the remaining portion of the mark-to-market adjustment, specifically the portion relating to the uncompleted portion of the underlying project is reflected directly in cost of operating revenues in the period in which the mark-to-market adjustment occurs. We also utilize foreign currency forward contracts to mitigate non-project related currency risks, which are recorded in other deductions, net.

The gain or loss from the remaining uncompleted portion of our projects and other non-project related transactions were as follows:

	Location of Gain/(Loss)	Amount of Gain/(Loss) Recognized in Income on Derivatives
Derivatives Not Designated as	Recognized	Quarter Ended June 30,				Six Months Ended June 30,
Hedging Instruments	in Income on Derivatives		2012		2011		2012		2011
Foreign currency forward contracts	Cost of operating revenues	$	(3,646)	$	(1,089)	$	(500)	$	725
Foreign currency forward contracts	Other deductions, net		(13)		(54)		78		16
Total		$	(3,659)	$	(1,143)	$	(422)	$	741

The mark-to-market adjustments on foreign currency forward exchange contracts for these unrealized gains or losses are primarily recorded in either contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts on the consolidated balance sheet.

During the six months endedJune 30, 2012 and 2011, we included net cash inflows on the settlement of derivatives of $930 and $656, respectively, within the “net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts,” a component of cash flows from operating activities on the consolidated statement of cash flows.

Interest Rate Risk

We use interest rate swap contracts to manage interest rate risk associated with a portion of our variable rate special-purpose limited recourse project debt. The aggregate notional amount of the receive-variable/pay-fixed interest rate swaps was $61,300as of June 30, 2012.

Upon entering into the swap contracts, we designate the interest rate swaps as cash flow hedges. We assess at inception, and on an ongoing basis, whether the interest rate swaps are highly effective in offsetting changes in the cash flows of the project debt. Consequently, we record the fair value of interest rate swap contracts on our consolidated balance sheet at each balance sheet date. Changes in the fair value of the interest rate swap contracts are recorded as a component of other comprehensive income.

The impact from interest rate swap contracts in cash flow hedging relationships for our consolidated entities was as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
(Loss)/gain recognized in other comprehensive income	$	(629)	$	(743)	$	(1,785)	$	104
Loss reclassified from accumulated other comprehensive loss		450		639		935		1,255

The above balances for our consolidated entities and our proportionate share of the impact from interest rate swap contracts in cash flow hedging relationships held by our equity method investees are included on our consolidated statement of comprehensive income net of tax.

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Business Segments (Operating Revenues By Industry and by Segment - Table) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Operating revenues	$ 943,026	$ 1,183,878	$ 1,876,122	$ 2,220,130
Global E and C Group [Member]
Operating revenues	666,142	892,080	1,337,015	1,715,823
Global Power Group [Member]
Operating revenues	276,884	291,798	539,107	504,307
Power Generation [Member]
Operating revenues	262,321	269,054	514,436	464,183
Oil Refining [Member]
Operating revenues	360,750	383,465	685,911	746,994
Pharmaceutical [Member]
Operating revenues	13,614	15,290	26,593	26,474
Oil and Gas [Member]
Operating revenues	183,563	336,055	415,114	608,102
Chemical / Petrochemical [Member]
Operating revenues	77,427	130,409	145,747	284,386
Power Plant Operation and Maintenance [Member]
Operating revenues	34,913	34,235	64,193	62,564
Environmental [Member]
Operating revenues	2,456	2,977	4,644	5,536
Other Industry, Net of Eliminations [Member]
Operating revenues	$ 7,982	$ 12,393	$ 19,484	$ 21,891

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Pensions and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Pensions and Other Postretirement Benefits [Abstract]

Pensions and Other Postretirement Benefits

6. Pensions and Other Postretirement Benefits

We have defined benefit pension plans in the United States, or U.S., the United Kingdom, or U.K., Canada, Finland, France, India and South Africa, and we have other postretirement benefit plans for health care and life insurance benefits in the U.S. and Canada.

Defined Benefit Pension Plans — Our defined benefit pension plans, or pension plans, cover certain full-time employees. Under the pension plans, retirement benefits are primarily a function of both years of service and level of compensation. The U.S. pension plans, which are closed to new entrants and additional benefit accruals, and the Canada, Finland, France and India pension plans are non-contributory. The U.K. pension plan, which is closed to new entrants and additional benefit accruals, and the South Africa pension plan are both contributory plans.

As a result of a change in the U.K. governmental standard, our U.K. pension plan adopted the use of the U.K. consumer prices index as a basis for inflationary increases in the calculation of the funded status of our U.K. pension plan during the six months ended June 30, 2011. The U.K. retail prices index was the former U.K. governmental standard that was used by our U.K. pension plan. We accounted for this change as a plan amendment as of May 31, 2011 and recognized a prior service credit in our consolidated statement of comprehensive income during the quarter and six months ended June 30, 2011 of approximately £29,600 (approximately $48,100 at the exchange rate in effect during the period).

Based on the minimum statutory funding requirements for 2012, we are not required to make any mandatory contributions to our U.S. pension plans. The following table provides details on 2012 mandatory contribution activity for our non-U.S. pension plans:

Contributions in the six months ended June 30, 2012	$	10,800
Remaining contributions expected for the year 2012		12,000
Contributions expected for the year 2012	$	22,800

We did not make any discretionary contributions during the first six months of 2012; however, we may elect to make discretionary contributions to our U.S. and/or non-U.S. pension plans during 2012.

Other Postretirement Benefit Plans — Certain employees in the U.S. and Canada may become eligible for health care and life insurance benefits (“other postretirement benefits”) if they qualify for and commence normal or early retirement pension benefits as defined in the U.S. and Canada pension plans while working for us. Additionally, one of our subsidiaries in the U.S. also has a benefit plan, referred to as the Survivor Income Plan (“SIP”), which provides coverage for an employee's beneficiary upon the death of the employee. This plan has been closed to new entrants since 1988.

The components of net periodic benefit cost/(credit) for our defined benefit pension plans and other postretirement benefit plans were as follows:

		Defined Benefit Pension Plans								Other Postretirement Benefit Plans
	Quarter Ended				Six Months Ended				Quarter Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
		2012		2011		2012		2011		2012		2011		2012		2011
Net periodic benefit cost/(credit):
Service cost	$	262	$	333	$	537	$	702	$	12	$	20	$	36	$	47
Interest cost		13,187		15,314		26,321		30,925		569		735		1,374		1,647
Expected return on plan assets		(16,058)		(17,830)		(32,073)		(35,971)		-		-		-		-
Amortization of net actuarial loss/(gain)		4,349		3,501		8,485		6,955		93		(6)		213		71
Amortization of prior service (credit)/cost		(396)		9		(789)		18		(878)		(891)		(1,757)		(1,782)
Amortization of transition obligation		12		11		25		23		-		-		-		-
Net periodic benefit cost/(credit)	$	1,356	$	1,338	$	2,506	$	2,652	$	(204)	$	(142)	$	(134)	$	(17)

The above amortization components of net periodic benefit cost are included on our consolidated statement of comprehensive income net of tax.

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Guarantees and Warranties

6 Months Ended

Jun. 30, 2012

Guarantees and Warranties [Abstract]

Guarantees and Warranties

7. Guarantees and Warranties

We have agreed to indemnify certain third parties relating to businesses and/or assets that we previously owned and sold to such third parties. Such indemnifications relate primarily to potential environmental and tax exposures for activities conducted by us prior to the sale of such businesses and/or assets. It is not possible to predict the maximum potential amount of future payments under these or similar indemnifications due to the conditional nature of the obligations and the unique facts and circumstances involved in each particular indemnification.

	Maximum	Carrying Amount of Liability
	Potential Payment	June 30, 2012		December 31, 2011
Environmental indemnifications	No limit	$	7,900	$	8,200
Tax indemnifications	No limit	$	-	$	-

We also maintain contingencies for warranty expenses on certain of our long-term contracts. Generally, warranty contingencies are accrued over the life of the contract so that a sufficient balance is maintained to cover our aggregate exposure at the conclusion of the project.

	Six Months Ended June 30,
Warranty Liability:		2012		2011
Balance at beginning of year	$	93,000	$	100,300
Accruals		17,000		14,000
Settlements		(9,900)		(9,500)
Adjustments to provisions, including foreign currency translation		(9,200)		(3,600)
Balance at end of period	$	90,900	$	101,200

We are contingently liable under standby letters of credit, bank guarantees and surety bonds, totaling $983,800 and $990,300 as of June 30,2012 and December 31, 2011, respectively, primarily for guarantees of our performance on projects currently in execution or under warranty. These amounts include the standby letters of credit issued under the U.S. senior credit agreement discussed in Note 5 and under other facilities worldwide. No material claims have been made against these guarantees, and based on our experience and current expectations, we do not anticipate any material claims.

We have also guaranteed certain performance obligations in a refinery/electric power generation project based in Chile in which we hold a noncontrolling interest. See Note 3 for further information.

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Share-Based Compensation Plans

6 Months Ended

Jun. 30, 2012

Share - Based Compensation Plans [Abstract]

Share-Based Compensation Plans

9. Share-Based Compensation Plans

Our share-based compensation plans include both stock options and restricted awards. The following table summarizes our share-based compensation expense and related income tax benefit:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Share-based compensation	$	5,768	$	5,221	$	10,694	$	10,092
Related income tax benefit		149		102		259		183

As of June 30, 2012, we had $11,908 and $18,630 of total unrecognized compensation cost related to stock options and restricted awards, respectively. Those amounts are expected to be recognized as expense over a weighted-average period of approximately two years.

We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

• Expected volatility – we estimate the volatility of our share price at the date of grant using a “look-back” period which coincides with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.

• Expected term – we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”
• Risk-free interest rate – we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.
• Dividends – we use an expected dividend yield of zero because we have not declared or paid a cash dividend since July 2001 and we do not have any plans to declare or pay any cash dividends.

We estimate the fair value of restricted share unit awards using the market price of our shares on the date of grant. We then recognize the fair value of each restricted share unit award as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period).

Certain of our executives have been awarded performance-based restricted share units, or performance RSUs. Under these awards, the number of restricted share units that ultimately vest depend on our share price performance against specified performance goals, which are defined in our performance-based award agreements. We estimate the grant date fair value of each performance RSU award using a Monte Carlo valuation model. We then recognize the fair value of each performance RSU award as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period).

Our share-based compensation plans include a “change in control” provision, which provides for cash redemption of equity awards issued thereunder in certain limited circumstances. In accordance with Securities and Exchange Commission Accounting Series Release No. 268, “Presentation in Financial Statements of Redeemable Preferred Stocks,” we present the redemption amount of these equity awards as temporary equity on the consolidated balance sheet as the equity award is amortized during the vesting period. The redemption amount represents the intrinsic value of the equity award on the grant date. In accordance with current accounting guidance regarding the classification and measurement of redeemable securities, we do not adjust the redemption amount each reporting period unless and until it becomes probable that the equity awards will become redeemable (upon a change in control event). Upon vesting of the equity awards, we reclassify the intrinsic value of the equity awards, as determined on the grant date, to permanent equity.

Reconciliations of temporary equity for the six months endedJune 30, 2012 and 2011 were as follows:

		June 30, 2012		June 30, 2011
Balance at beginning of year		$	4,993	$	4,935
Compensation cost during the period for those equity awards with
	intrinsic value on the grant date		6,600		5,398
Intrinsic value of equity awards vested during the period for
	those equity awards with intrinsic value on the grant date		(3,224)		(3,184)
Balance at end of period		$	8,369	$	7,149

Our articles of association provide for conditional capital for the issuance of shares under our share-based compensation plans and other convertible or exercisable securities we may issue in the future. Conditional capital decreases upon issuance of shares in connection with the exercise of outstanding stock options or vesting of restricted share units, with an offsetting increase to our issued and authorized share capital. As of June 30, 2012, our remaining available conditional capital was 59,639,130 shares.

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Litigation and Uncertainties (Summary of asbestos related provision activity - Table) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net asbestos-related provision	$ 3,713	$ 2,000	$ 5,710	$ 2,400
United States [Member]
Provision for revaluation	2,000	2,000	3,997	4,000
Gain on settlement of coverage litigation	0	0	0	(1,600)
Net asbestos-related provision	$ 2,000	$ 2,000	$ 3,997	$ 2,400

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Litigation and Uncertainties (UK Asbestos related assets and liabilities - Table) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Asbestos-related assets:
Asbestos related insurance recovery receivable	$ 141,952	$ 157,127
Asbestos-related liabilities:
Asbestos-related liability	253,713	269,520
United Kingdom [Member]
Asbestos-related assets:
Accounts and notes receivable-other	2,698	2,677
Asbestos related insurance recovery receivable	23,487	26,120
Total asbestos-related assets	26,185	28,797
Asbestos-related liabilities:
Accrued expenses	2,698	2,677
Asbestos-related liability	25,063	26,120
Total asbestos-related liabilities	27,761	28,797
Liability balance by claim category:
Open claims	6,832	8,030
Future unasserted claims	20,929	20,767
Total asbestos-related liabilities	$ 27,761	$ 28,797

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Litigation and Uncertainties (US Asbestos related assets and liabilities - Table) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Asbestos-related assets:
Asbestos related insurance recovery receivable	$ 141,952	$ 157,127
Asbestos-related liabilities:
Asbestos-related liability	253,713	269,520
United States [Member]
Asbestos-related assets:
Accounts and notes receivable-other	34,593	43,677
Asbestos related insurance recovery receivable	118,465	131,007
Total asbestos-related assets	153,058	174,684
Asbestos-related liabilities:
Accrued expenses	41,050	50,900
Asbestos-related liability	228,649	243,400
Total asbestos-related liabilities	269,699	294,300
Liability balance by claim category:
Open claims	54,770	56,700
Future unasserted claims	214,929	237,600
Total asbestos-related liabilities	$ 269,699	$ 294,300

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Summary of Significant Accounting Policies (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011 Global E and C Group [Member]	Jun. 30, 2012 Global Power Group [Member]	Jun. 30, 2011 Global Power Group [Member]
Favorable subcontract settlement recognized in the changes in final estimated contract profit revisions					$ 6,900
The current period impact of out-of period corrections related to the reduction of final estimated profit	(7,800)			(3,200)		(4,600)
Assumed recovery of commercial claims		$ 8,600	$ 6,700

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Guarantees and Warranties (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Warranty Liability
Balance at beginning of year	$ 93,000	$ 100,300
Accruals	17,000	14,000
Settlements	(9,900)	(9,500)
Adjustments to provisions, including foreign currency translation	(9,200)	(3,600)
Balance at end of period	90,900	101,200
Amount we are contingently liable for under standby letters of credit, bank guarantees and surety bonds	983,800		990,300
Environmental Indemnifications [Member]
Maximum Potential Payment	No limit
Carrying Amount of Liability	7,900		8,200
Tax Indemnifications [Member]
Maximum Potential Payment	No limit
Carrying Amount of Liability	$ 0		$ 0

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Projects With Final Estimated Contract Profit Revisions Whose Impact Exceeds $1 million - Table

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Number of separate projects			9		17		17		20
Net increase in contract profit from the regular
	revaluation of final estimated contract profit revisions	$	8,200	$	15,800	$	31,600	$	13,500

Basic and Diluted EPS - Table

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Net income attributable to Foster Wheeler AG		$	30,859	$	63,309	$	71,505	$	86,280
Basic weighted-average number of shares outstanding			107,840,679		122,331,265		107,807,441		123,499,174
Effect of dilutive securities			2,576		515,740		60,153		637,716
Diluted weighted-average number of shares outstanding			107,843,255		122,847,005		107,867,594		124,136,890
Earnings per share:
	Basic	$	0.29	$	0.52	$	0.66	$	0.70
	Diluted	$	0.29	$	0.52	$	0.66	$	0.70

Antidilutive Securities - Table

		Quarter Ended June 30,		Six Months Ended June 30,
		2012	2011	2012	2011
Options not included in the computation of
	diluted earnings per share	2,850,267	1,347,442	2,021,500	1,340,549
Restricted awards not included in the computation of
	diluted earnings per share	930,884	-	-	-

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Guarantees and Warranties (Tables)

6 Months Ended

Jun. 30, 2012

Guarantees and Warranties [Abstract]

Guarantor Obligations - Table

	Maximum	Carrying Amount of Liability
	Potential Payment	June 30, 2012		December 31, 2011
Environmental indemnifications	No limit	$	7,900	$	8,200
Tax indemnifications	No limit	$	-	$	-

Warranty Liability Rollforward-Table

	Six Months Ended June 30,
Warranty Liability:		2012		2011
Balance at beginning of year	$	93,000	$	100,300
Accruals		17,000		14,000
Settlements		(9,900)		(9,500)
Adjustments to provisions, including foreign currency translation		(9,200)		(3,600)
Balance at end of period	$	90,900	$	101,200

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Pensions and Other Postretirement Benefits (Components of net periodic benefit cost and changes recognized in other comprehensive income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost/(Credit):
Service cost	$ 262	$ 333	$ 537	$ 702
Interest cost	13,187	15,314	26,321	30,925
Expected return on plan assets	(16,058)	(17,830)	(32,073)	(35,971)
Amortization of net actuarial loss/(gain)	4,349	3,501	8,485	6,955
Amortization of prior service (credit)/cost	(396)	9	(789)	18
Amortization of transition obligation	12	11	25	23
Net periodic benefit cost/(credit)	1,356	1,338	2,506	2,652
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost/(Credit):
Service cost	12	20	36	47
Interest cost	569	735	1,374	1,647
Expected return on plan assets	0	0	0	0
Amortization of net actuarial loss/(gain)	93	(6)	213	71
Amortization of prior service (credit)/cost	(878)	(891)	(1,757)	(1,782)
Amortization of transition obligation	0	0	0	0
Net periodic benefit cost/(credit)	$ (204)	$ (142)	$ (134)	$ (17)

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Goodwill and Other Intangible Assets (Net carrying amount of goodwill by geographic region) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Goodwill	$ 110,904	$ 112,120
Global E and C Group [Member]
Goodwill	40,202	40,244
Global E and C Group [Member] | United States [Member]
Goodwill	39,357	39,357
Global E and C Group [Member] | Asia [Member]
Goodwill	845	887
Global E and C Group [Member] | Europe [Member]
Goodwill	0	0
Global Power Group [Member]
Goodwill	70,702	71,876
Global Power Group [Member] | United States [Member]
Goodwill	4,266	4,266
Global Power Group [Member] | Asia [Member]
Goodwill	0	0
Global Power Group [Member] | Europe [Member]
Goodwill	$ 66,436	$ 67,610

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CONSOLIDATED BALANCE SHEET (Parenthetical) (CHF)	Jun. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheet (Parenthetical) [Abstract]
Registered share par value in CHF	3.00	3.00
Registered shares authorized	187,989,987	187,847,379
Registered shares conditionally authorized	59,639,130	59,781,738
Registered shares issued	125,672,031	125,529,423
Registered shares outstanding	107,867,511	108,289,003
Treasury shares outstanding	17,804,520	17,240,420

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Investments

6 Months Ended

Jun. 30, 2012

Investments

Investments

3.Investments

Investment in Unconsolidated Affiliates

We own a noncontrolling interest in two electric power generation projects, one waste-to-energy project and one wind farm project,which are all located in Italy, and in a refinery/electric power generation project,which is located in Chile. We also own a 50%noncontrolling interest in a project in Italy which generates earnings from royalty payments linked to the price of natural gas. Based on the outstanding equity interests of these entities, we own 41.65% of each of the two electric power generation projects in Italy, 39% of the waste-to-energy project and 50% of the wind farm project. We have a notional 85% equity interest in the project in Chile; however, we are not the primary beneficiary as a result of participation rights held by the minority shareholder. In determining that we are not the primary beneficiary, we considered the minority shareholder's right to approve activities of the project that most significantly impact the project's economic performance which include the right to approve or reject the annual financial (capital and operating) budget and the annual operating plan, the right to approve or reject the appointment of the general manager and senior management, and approval rights with respect to capital expenditures beyond those included in the annual budget.

On February 27, 2010, an earthquake occurred off the coast of Chile that caused significant damage to our unconsolidated affiliate's facility in Chile.  As a result of the damage, the project's facility suspended normal operating activities on that date and subsequently fileda claim with its insurance carrier for property damage and business interruption recoveries. Based on the assessments and cost estimate, as well as correspondence received from the insurance carrier, we expect the property damage and business interruption insurance recoveries to be sufficient to cover the costs of repairing the facility and to substantially compensate our unconsolidated affiliate for the loss of profits while the facility suspended normal operating activities. Our unconsolidated affiliate's receivablerelated to the remaining balance under their property damage and business interruption insurance recovery assessment was approximately $68,100as of June 30, 2012, which is included in current assets in the table below. The facility achieved normal operating activities in the third quarter of 2011.

The summarized financial information presented below for the project in Chile includes an estimated recovery under a property damage insurance policy sufficient to cover the costs that have been incurred to repair the facility and an estimated recovery under a business interruption insurance policy for fixed costs along with an estimated recovery for lost profits during the period that the facility suspended normal operating activities. In accordance with authoritative accounting guidance on business interruption insurance, the project recorded an estimated recovery for lost profits as substantially all contingencies related to the insurance claim had been resolved as of the third quarter of 2010.

We account for these investments in Italy and Chile under the equity method. The following is summarized financial information for these entities (each as a whole) based on where the projects are located:

	June 30, 2012				December 31, 2011
		Italy		Chile		Italy		Chile
Balance Sheet Data:
Current assets	$	149,800	$	114,256	$	168,501	$	130,880
Other assets (primarily buildings and equipment)		350,636		103,357		366,414		108,165
Current liabilities		95,272		34,626		82,164		55,590
Other liabilities (primarily long-term debt)		217,172		48,636		232,356		45,105
Net assets		187,992		134,351		220,395		138,350

	Quarter Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
		Italy		Chile		Italy		Chile		Italy		Chile		Italy		Chile
Income Statement Data:
Total revenues	$	45,989	$	26,089	$	53,307	$	27,512	$	82,740	$	50,890	$	82,724	$	48,329
Gross profit		12,217		14,776		19,658		17,726		10,452		28,677		31,725		17,855
Income before income taxes		9,717		14,198		16,667		19,699		5,470		28,396		25,923		34,465
Net earnings		5,996		11,571		10,306		13,914		3,647		23,367		15,953		25,728

Our investment in these unconsolidated affiliates is recorded within investments in and advances to unconsolidated affiliates on the consolidated balance sheet and our equity in the net earnings of these unconsolidated affiliates is recorded within other income, net on the consolidated statement of operations. The investments and equity earnings of our unconsolidated affiliates in Italy and Chile are included in our Global E&C Group and Global Power Group business segments, respectively.

Our consolidated financial statements reflect the following amounts related to our unconsolidated affiliates in Italy and Chile:

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
Equity in the net earnings of unconsolidated affiliates	$	8,911	$	15,586	$	15,819	$	28,079
Distributions from unconsolidated affiliates	$	23,145	$	33,733	$	31,917	$	43,410
					June 30, 2012		December 31, 2011
Total investment in unconsolidated affiliates					$	176,745	$	195,033

Our equity earnings from our projects in Italy were $2,790 and $4,000 in the second quarter of 2012 and 2011, respectively, and were $2,428 and $6,606 in the first six months of 2012 and 2011, respectively. Our equity earnings in the first six months of 2012 were unfavorably impacted by the results of one of our projects in Italy that recorded a charge to establish a reserve against its receivable balance for emission rights earned prior to 2012 and experienced decreased earnings as a result of a facility maintenance shutdown during the first quarter of 2012.

Our equity earnings from our project in Chile were $6,121 and $11,586 in the second quarter of 2012 and 2011, respectively, and were $13,391 and $21,473 in the first six months of 2012 and 2011, respectively. The decrease in equity earnings in the quarter and six months ended June 30, 2012, compared to the same periods in 2011, included the impact of lower marginal rates in 2012 for electrical power generation.

Equity earnings in the quarter and six months endedJune 30, 2011 included our equity interest in the after tax estimated recovery under our project in Chile's business interruption insurance policy, as described above.

We have guaranteed certain performance obligations of our project in Chile. We have a contingent obligation, which is measured annually based on the operating results of our project in Chile for the preceding year and is shared equally with our minority interest partner. We did not have a current payment obligation under this guarantee as of June 30, 2012 or December 31, 2011.

In addition, we have provided a $10,000 debt service reserve letter of credit to cover debt service payments in the event that our project in Chile does not generate sufficient cash flows to make such payments. We are required to maintain the debt service reserve letter of credit during the term of ourproject in Chile's debt, which matures in 2014. As of June 30, 2012,no amounts have been drawn under this letter of credit and we do not anticipate any amounts being drawn under this letter of credit.

We also have a wholly-owned subsidiary that provides operations and maintenance services to ourproject in Chile, whichincluded assessing the damage caused by the earthquake and the related repair while the facility suspendednormal operating activities. We record the fees for operations and maintenance services in operating revenues on our consolidated statement of operations and the corresponding receivable in trade accounts and notes receivable on our consolidated balance sheet.

Our consolidated financial statements include the following balances related to our project in Chile:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Fees for operations and maintenance services
	(included in operating revenues)	$	2,623	$	2,660	$	5,257	$	5,320
						June 30, 2012		December 31, 2011
Receivable from our unconsolidated affiliate
	in Chile (included in trade receivables)					$	9,735	$	8,881

We also have guaranteed the performance obligations of our wholly-owned subsidiary under the operations and maintenance agreement governing our project in Chile. The guarantee is limited to $20,000 over the life of the operations and maintenance agreement, which extends through 2016. No amounts have been paid under the guarantee.

Other Investments

We are the majority equity partner and general partner of a gas-fired cogeneration project in Martinez, California, which we have determined to be a VIE as of June 30, 2012and December 31, 2011. We were the primary beneficiaryof theVIE, since we had the power to direct the activities that most significantly impact the VIE's performance. These activities include the operations and maintenance of the facilities. Accordingly, as the primary beneficiary of the VIE,we have consolidated this entity. The aggregate net assets of this entity are presented below.

Balance Sheet Data (excluding intercompany balances):	June 30, 2012		December 31, 2011
Current assets	$	7,757	$	19,328
Other assets (primarily buildings and equipment)		39,851		39,760
Current liabilities		4,854		6,198
Other liabilities		4,335		4,462
Net assets		38,419		48,428

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Share-Based Compensation Plans (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 Y
Number of years of weighted-average period expected to be recognized as expense	2
Remaining available conditional capital shares	59,639,130
Stock Options [Member]
Unrecognized compensation cost	11,908
Restricted Stock Units (RSUs) [Member]
Unrecognized compensation cost	18,630

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Financial Instruments - Table

Fair Values of Derivative Financial Instruments
					Asset Derivatives						Liability Derivatives
			Balance Sheet		June 30,		December 31,		Balance Sheet		June 30,		December 31,
			Location		2012		2011		Location		2012		2011
Derivatives designated as
		hedging instruments:
	Interest rate swap
		contracts	Other assets		$	-	$	-	Other long-term liabilities		$	9,292	$	8,707
Derivatives not designated
		as hedging instruments:
	Foreign currency		Contracts in process or						Contracts in process or
		forward contracts		billings in excess of costs						billings in excess of costs
				and estimated earnings on						and estimated earnings on
				uncompleted contracts		1,075		1,691		uncompleted contracts		6,088		6,446
	Foreign currency
		forward contracts	Other accounts receivable			441		75	Accounts payable			247		34
Total derivatives					$	1,516	$	1,766			$	15,627	$	15,187

Amount of Gain/(Loss) Recognized In Income On Derivatives - Table

	Location of Gain/(Loss)	Amount of Gain/(Loss) Recognized in Income on Derivatives
Derivatives Not Designated as	Recognized	Quarter Ended June 30,				Six Months Ended June 30,
Hedging Instruments	in Income on Derivatives		2012		2011		2012		2011
Foreign currency forward contracts	Cost of operating revenues	$	(3,646)	$	(1,089)	$	(500)	$	725
Foreign currency forward contracts	Other deductions, net		(13)		(54)		78		16
Total		$	(3,659)	$	(1,143)	$	(422)	$	741

Cash Flow Hedge Gain/(Loss) Reclassified to Interest Expense, Net - Table

	Quarter Ended June 30,				Six Months Ended June 30,
		2012		2011		2012		2011
(Loss)/gain recognized in other comprehensive income	$	(629)	$	(743)	$	(1,785)	$	104
Loss reclassified from accumulated other comprehensive loss		450		639		935		1,255

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Investments (Refinery/power generation project in Chile - Table) (Details) (Chile [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Chile [Member]
Fees for operations and maintenance services (included in operating revenues)	$ 2,623	$ 2,660	$ 5,257	$ 5,320
Receivable from our unconsolidated affiliate in Chile (included in trade receivables)	$ 9,735		$ 9,735		$ 8,881

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Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation — The fiscal year of Foster Wheeler AG ends on December 31 of each calendar year. Foster Wheeler AG's fiscal quarters end on the last day of March, June and September. The fiscal years of our non-U.S. operations are the same as the parent's. The fiscal year of our U.S. operations is the 52- or 53-week annual accounting period ending on the last Friday in December.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The consolidated financial statements and notes are presented in accordance with the requirements of Form 10-Q and do not contain certain information included in our Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), filed with the Securities and Exchange Commission on February 23, 2012. The consolidated balance sheet as of December 31, 2011 was derived from the audited financial statements included in our 2011 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America for annual consolidated financial statements.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The consolidated financial statements include the accounts of Foster Wheeler AG and all significant U.S. and non-U.S. subsidiaries, as well as certain entities in which we have a controlling interest. Intercompany transactions and balances have been eliminated. See “—Variable Interest Entities” below for further information related to the consolidation of variable interest entities.

Use of Estimates

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Changes in estimates are reflected in the periods in which they become known. Significant estimates are used in accounting for long-term contracts including estimates of total costs, progress toward completion and customer and vendor claims, employee benefit plan obligations and share-based compensation plans. In addition, we also use estimates when accounting for uncertain tax positions and deferred taxes, asbestos liabilities and expected recoveries and when assessing goodwill for impairment, among others.

Revenue Recognition on Long-Term Contracts

Revenue Recognition on Long-Term Contracts — Revenues and profits on long-term contracts are recorded under the percentage-of-completion method.

Progress towards completion on fixed-price contracts is measured based on physical completion of individual tasks for all contracts with a value of $5,000 or greater. For contracts with a value less than $5,000, progress toward completion is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method).

Progress towards completion on cost-reimbursable contracts is measured based on the ratio of quantities expended to total forecasted quantities, typically man-hours. Incentives are also recognized on a percentage-of-completion basis when the realization of an incentive is assessed as probable. We include flow-through costs consisting of materials, equipment or subcontractor services as both operating revenues and cost of operating revenues on cost-reimbursable contracts when we have overall responsibility as the contractor for the engineering specifications and procurement or procurement services for such costs. There is no contract profit impact of flow-through costs as they are included in both operating revenues and cost of operating revenues.

Contracts in process are stated at cost, increased for profits recorded on the completed effort, less billings to the customer and progress payments on uncompleted contracts. A full provision for loss contracts is made at the time the loss becomes probable regardless of the stage of completion.

At any point, we have numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. These estimates may be revised as additional information becomes available or as specific project circumstances change. We review all of our material contracts on a monthly basis and revise our estimates as appropriate for developments such as earning project incentive bonuses, incurring or expecting to incur contractual liquidated damages for performance or schedule issues, providing services and purchasing third-party materials and equipment at costs differing from those previously estimated and testing completed facilities, which, in turn, eliminates or confirms completion and warranty-related costs. Project incentives are recognized when it is probable they will be earned. Project incentives are frequently tied to cost, schedule and/or safety targets and, therefore, tend to be earned late in a project's life cycle.

Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit. In the period in which a change in estimate is recognized, the cumulative impact of that change is recorded based on progress achieved through the period of change. The following table summarizes the number of separate projects that experienced final estimated contract profit revisions with an impact on contract profit in excess of $1,000 relating to the revaluation of work performed in prior periods:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Number of separate projects			9		17		17		20
Net increase in contract profit from the regular
	revaluation of final estimated contract profit revisions	$	8,200	$	15,800	$	31,600	$	13,500

The changes in final estimated contract profit revisions for our Global Power Group were increased during the six months ended June 30, 2012 for a favorable settlement with a subcontractor of approximately $6,900 recognized in the first quarter of 2012. The changes in final estimated contract profit revisions during the six months endedJune 30,2011 included the impact of two out-of-period correctionsfor reductions of final estimated profit totaling approximately $7,800, which included final estimated profit reductions in our Global Engineering and Construction Group (“Global E&C Group”)andour Global Power Group of approximately $3,200 and $4,600, respectively.The corrections were recorded in the first quarter of 2011 as they were not material to previously issued financial statements, nor were they material to the full year 2011 financial statements.

Please see Note 11 for further information related to changes in final estimated contract profitand the impact on business segment results.

Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, disputed or unapproved change orders as to both scope and price or other causes of unanticipated additional costs. We record claims as additional contract revenue if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. These two requirements are satisfied by the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in our performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim may be recorded only to the extent that contract costs relating to the claim have been incurred. Costs attributable to claims are treated as costs of contract performance as incurred and are recorded in contracts in process. Our consolidated financial statements includedcommercial claims of $8,600 and $6,700 as of June 30, 2012 and December 31, 2011, respectively, while substantially all costs had been incurred as of each respective date.

In certain circumstances, we may defer pre-contract costs when it is probable that these costs will be recovered under a future contract. Such deferred costs would then be included in contract costs upon execution of the anticipated contract.Deferred pre-contract costs were inconsequentialas of June 30, 2012 and December 31, 2011.

Certain special-purpose subsidiaries in our Global Power Group business segment are reimbursed by customers for their costs ofbuilding and operating certain facilities over the lives of the corresponding service contracts. Depending on the specific legal rights and obligations under these arrangements, in some cases those reimbursements are treated as operating revenues at gross value and other cases as a reduction of cost.

Trade Accounts Receivable

Trade Accounts Receivable — Trade accounts receivable represent amounts billed to customers. In accordance with terms under our long-term contracts, our customers may withhold certain percentages of such billings until completion and acceptance of the work performed, which we refer to as retention receivables. Final payment of retention receivables mightnot be received within a one-year period. In conformity with industry practice, however, the full amount of accounts receivable, including such amounts withheld, are included in current assets on the consolidated balance sheet.We have not recorded a provision for the outstanding retention receivable balances as of June 30, 2012 and December 31, 2011.

Variable Interest Entities

Variable Interest Entities—We sometimes form separate legal entities such as corporations, partnerships and limited liability companies in connection with the execution of a single contract or project. Upon formation of each separate legal entity, we perform an evaluation to determine whether the new entity is a variable interest entity, or VIE, and whether we are the primary beneficiary of the new entity, which would require us to consolidate the new entity in our financial results. We reassess our initial determination on whether the entity is a VIE upon the occurrence of certain events and whether we are the primary beneficiary as outlined in current accounting guidelines. If the entity is not a VIE, we determine the accounting for the entity under the voting interest accounting guidelines.

An entity is determined to be a VIE if either (a) the total equity investment is not sufficient for the entity to finance its own activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (such as the ability to make decisions through voting or other rights or the obligation to absorb losses or the right to receive benefits), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb losses of the entity and/or their rights to receive benefits of the entity, and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

As of June 30, 2012 and December 31, 2011, we participated in certain entities determined to be VIEs, including a gas-fired cogeneration facility in Martinez, California and a refinery/electric power generation project in Chile.We consolidate the operations of the Martinez project while we record our participation in the project in Chile on the equity method of accounting.

Please see Note 3 for further information regarding our participation in these projects.

Fair Value Measurements

Fair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board Accounting Standards Codification, or FASB ASC, 820-10 defines fair value, establishes a three level fair value hierarchy that prioritizes the inputs used to measure fair valueand provides guidance on required disclosures about fair value measurements. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Our financial assets and liabilities that are recorded at fair value on a recurring basis consist primarily of the assets or liabilities arising from derivative financial instruments and defined benefit pension plan assets. See Note 8for further information regarding our derivative financial instruments.

The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate fair value:

Financial instruments valued independent of the fair value hierarchy:

• Cash, Cash Equivalents and Restricted Cash— The carrying value of our cash, cash equivalents and restricted cash approximates fair value because of the demand nature of many of our deposits or short-term maturity of these instruments.

  Financial instruments valued within the fair value hierarchy:

• Short-term Investments — Short-term investments primarily consist of deposits with maturities in excess of three months but less than one year. Short-term investments are carried at cost plus accrued interest, which approximates fair value.
• Long-term Debt — We estimate the fair value of our long-term debt (including current installments) based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturitiesusing level 2 inputs.
• Foreign Currency Forward Contracts — We estimate the fair value of foreign currency forward contracts by obtaining quotes from financial institutions or market transactions in either the listed or over-the-counter markets, which we further corroborate with observable market datausing level 2 inputs.
• Interest Rate Swaps— We estimate the fair value of our interest rate swaps based on quotes obtained from financial institutions, which we further corroborate with observable market datausing level 2 inputs.
• Defined Benefit Pension Plan Assets — We estimate the fair value of investments in equity securities at each year-end based on quotes obtained from financial institutions. The fair value of investments in commingled funds, invested primarily in debt and equity securities, is based on the net asset values communicated by the respective asset manager. We further corroborate the above valuations with observable market data using level 1 and 2 inputs. Additionally, we hold investments in private investment funds that are valued at net asset value as communicated by the asset manager using level 3 unobservable market data inputs.

Retirement of Shares under Share Repurchase Program

Retirement of Shares under Share Repurchase Program — Under Swiss law, the cancellation of shares previously repurchased under our share repurchase program must be approved by our shareholders. Repurchased shares remain as treasury shares on our balance sheet until cancellation.

Any repurchases will be made at our discretion in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors.   The program does not obligate us to acquire any particular number of shares. The program has no expiration date and may be suspended or discontinued at any time.

All treasury shares are carried at cost on the consolidated balance sheet until the cancellation of the shares has been approved by our shareholders and the cancellation is registered with the commercial register of the Canton of Zug in Switzerland. Upon the effectiveness of the cancellation of the shares, the cost of the shares cancelled will be removed from treasury shares on the consolidated balance sheet, the par value of the cancelled shares will be removed from registered shares on the consolidated balance sheet, and the excess of the cost of the treasury shares above par value will be removed from paid-in capital on the consolidated balance sheet.

Once repurchased, treasury shares are no longer considered outstanding, which results in a reduction to the weighted-average number of shares outstanding during the reporting period when calculating earnings per share, as described below.

Earnings per Share

Earnings per Share — Basic earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the weighted-average number of shares outstanding during the reporting period.

Diluted earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the combination of the weighted-average number of shares outstanding during the reporting period and the impact of dilutive securities, if any, such as outstanding stock options and the non-vested portion of restricted stock units and performance-based restricted stock units (collectively, “restricted awards”) to the extent such securities are dilutive.

In profitable periods, outstanding stock options have a dilutive effect under the treasury stock method when the average share price for the period exceeds the assumed proceeds from the exercise of the option. The assumed proceeds include the exercise price, compensation cost, if any, for future service that has not yet been recognized in the consolidated statement of operations, and any tax benefits that would be recorded in paid-in capital when the option is exercised. Under the treasury stock method, the assumed proceeds are assumed to be used to repurchase shares in the current period. The dilutive impact of the non-vested portion of restricted awards is determined using the treasury stock method, but the proceeds include only the unrecognized compensation cost and tax benefits as assumed proceeds.

The computations of basic and diluted earnings per share were as follows:

		Quarter Ended June 30,				Six Months Ended June 30,
			2012		2011		2012		2011
Net income attributable to Foster Wheeler AG		$	30,859	$	63,309	$	71,505	$	86,280
Basic weighted-average number of shares outstanding			107,840,679		122,331,265		107,807,441		123,499,174
Effect of dilutive securities			2,576		515,740		60,153		637,716
Diluted weighted-average number of shares outstanding			107,843,255		122,847,005		107,867,594		124,136,890
Earnings per share:
	Basic	$	0.29	$	0.52	$	0.66	$	0.70
	Diluted	$	0.29	$	0.52	$	0.66	$	0.70

The following table summarizes options and restricted awards not included in the calculation of diluted earnings per share as the assumed proceeds from those optionsand restricted awards, on a per share basis, were greaterthan the average share price for the period, which would result in an antidilutive effect on diluted earnings per share:

		Quarter Ended June 30,		Six Months Ended June 30,
		2012	2011	2012	2011
Options not included in the computation of
	diluted earnings per share	2,850,267	1,347,442	2,021,500	1,340,549
Restricted awards not included in the computation of
	diluted earnings per share	930,884	-	-	-