-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E7nlqyc67bNQBvd6TECyk+cq8werP03fent9dScaSOZLmCkOT1tYcoRJYLFzAiJx B3M78TitIdDiBn6gT3orKA== 0000892569-98-000756.txt : 19980318 0000892569-98-000756.hdr.sgml : 19980318 ACCESSION NUMBER: 0000892569-98-000756 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980317 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLUOR CORP/DE/ CENTRAL INDEX KEY: 0000037748 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 950740960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07775 FILM NUMBER: 98567523 BUSINESS ADDRESS: STREET 1: 3353 MICHELSON DR CITY: IRVINE STATE: CA ZIP: 92730 BUSINESS PHONE: 7149752000 FORMER COMPANY: FORMER CONFORMED NAME: FLUOR CORP LTD DATE OF NAME CHANGE: 19710624 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED JANUARY 31, 1998 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1998 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: 1-7775 FLUOR CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 95-0740960 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 3353 Michelson Drive, Irvine, CA 92698 - -------------------------------------------------------------------------------- (Address of principal executive offices) (714) 975-2000 - -------------------------------------------------------------------------------- (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 ( ) As of February 28, 1998 there were 82,075,374 shares of common stock outstanding. 2 FLUOR CORPORATION FORM 10-Q JANUARY 31, 1998
TABLE OF CONTENTS PAGE ------------------------------------------------------------------------------- Part I: Financial Information Condensed Consolidated Statement of Earnings for the Three Months Ended January 31, 1998 and 1997.......................................2 Condensed Consolidated Balance Sheet at January 31, 1998 and October 31, 1997.......................................................3 Condensed Consolidated Statement of Cash Flows for the Three Months Ended January 31, 1998 and 1997.................................5 Notes to Condensed Consolidated Financial Statements...................6 Management's Discussion and Analysis of Financial Condition and Results of Operations..................................................8 Changes in Backlog....................................................13 Part II: Other Information...............................................14 Signatures...................................................................15
3 PART I: FINANCIAL INFORMATION FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS Three Months Ended January 31, 1998 and 1997 UNAUDITED
In thousands, except per share amounts 1998 1997 -------------------------------------- ----------- ----------- REVENUES $ 3,399,019 $ 3,434,061 COSTS AND EXPENSES Cost of revenues 3,309,279 3,327,287 Corporate administrative and general expense 448 10,870 Interest expense 9,422 5,542 Interest income (4,588) (5,263) ----------- ----------- Total Costs and Expenses 3,314,561 3,338,436 ----------- ----------- EARNINGS BEFORE INCOME TAXES 84,458 95,625 INCOME TAX EXPENSE 29,645 33,590 ----------- ----------- NET EARNINGS $ 54,813 $ 62,035 =========== =========== EARNINGS PER SHARE BASIC $ .66 $ .75 =========== =========== DILUTED $ .66 $ .74 =========== =========== DIVIDENDS PER COMMON SHARE $ .20 $ .19 =========== =========== SHARES USED TO CALCULATE BASIC EARNINGS PER SHARE 82,575 83,054 =========== =========== DILUTED EARNINGS PER SHARE 82,636 83,649 =========== ===========
See Accompanying Notes. 2 4 FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1998 and October 31, 1997 UNAUDITED
January 31, October 31, $ in thousands 1998 1997* --------------- ---------- ---------- ASSETS Current Assets Cash and cash equivalents $ 305,413 $ 299,324 Marketable securities -- 10,089 Accounts and notes receivable 915,909 930,104 Contract work in progress 529,664 691,395 Deferred taxes 63,905 58,039 Inventory and other current assets 226,775 236,935 ---------- ---------- Total current assets 2,041,666 2,225,886 ---------- ---------- Property, Plant and Equipment (net of accumulated depreciation, depletion and amortization of $1,047,488 and $1,001,315, respectively) 1,951,083 1,938,790 Investments and goodwill, net 256,711 254,948 Other 293,676 278,216 ---------- ---------- $4,543,136 $4,697,840 ========== ==========
(Continued On Next Page) * Amounts at October 31, 1997 have been derived from audited financial statements. 3 5 FLUOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET January 31, 1998 and October 31, 1997 UNAUDITED
January 31, October 31, $ in thousands 1998 1997* --------------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts and notes payable $ 706,070 $ 878,187 Commercial paper 49,871 61,886 Advance billings on contracts 527,043 525,518 Accrued salaries, wages and benefit plans 277,094 303,490 Other accrued liabilities 257,215 221,487 Current portion of long-term debt 118 116 ----------- ----------- Total current liabilities 1,817,411 1,990,684 ----------- ----------- Long-term debt due after one year 300,439 300,508 Deferred taxes 60,917 66,739 Other noncurrent liabilities 623,805 598,859 Commitments and Contingencies Shareholders' Equity Capital stock Preferred - authorized 20,000,000 shares without par value; none issued Common - authorized 150,000,000 shares of $.625 par value; issued and outstanding - 82,786,538 shares and 83,748,111 shares, respectively 51,742 52,343 Additional capital 534,027 569,356 Retained earnings 1,198,115 1,159,996 Unamortized executive stock plan expense (28,409) (33,441) Cumulative translation adjustments (14,911) (7,204) ----------- ----------- Total shareholders' equity 1,740,564 1,741,050 ----------- ----------- $ 4,543,136 $ 4,697,840 =========== ===========
See Accompanying Notes * Amounts at October 31, 1997 have been derived from audited financial statements. 4 6 FLUOR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended January 31, 1998 and 1997 UNAUDITED
$ in thousands 1998 1997 --------------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 54,813 $ 62,035 Adjustments to reconcile net earnings to cash provided by (utilized by) operating activities: Depreciation, depletion and amortization 69,663 56,987 Deferred taxes (8,052) 18,394 Changes in operating assets and liabilities, excluding effects of businesses acquired 24,187 (185,221) Other, net 19,527 (18,931) --------- --------- Cash provided by (utilized by) operating activities 160,138 (66,736) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (100,656) (138,119) E & C businesses acquired -- (30,603) Proceeds from sales/maturities of marketable securities 10,089 25,257 Proceeds from sale of property, plant and equipment 12,942 7,074 Investments, net (5,454) (9,469) Contribution to deferred compensation trust -- (22,593) Other, net (6,773) (6,853) --------- --------- Cash utilized by investing activities (89,852) (175,306) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings (11,185) 128,544 Cash dividends paid (16,694) (15,941) Stock options exercised 61 8,615 Purchases of common stock (35,204) -- Other, net (1,175) (1,566) --------- --------- Cash (utilized by) provided by financing activities (64,197) 119,652 --------- --------- Increase (decrease) in cash and cash equivalents 6,089 (122,390) Cash and cash equivalents at beginning of period 299,324 246,964 --------- --------- Cash and cash equivalents at end of period $ 305,413 $ 124,574 ========= =========
See Accompanying Notes 5 7 FLUOR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED (1) The condensed consolidated financial statements do not include footnotes and certain financial information normally presented annually under generally accepted accounting principles and, therefore, should be read in conjunction with the Company's October 31, 1997 annual report on Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three months ended January 31, 1998 are not necessarily indicative of results that can be expected for the full year. The condensed consolidated financial statements included herein are unaudited; however, they contain all adjustments (consisting of normal recurring accruals) which, in the opinion of the Company, are necessary to present fairly its consolidated financial position at January 31, 1998 and its consolidated results of operations and cash flows for the three months ended January 31, 1998 and 1997. Certain 1997 amounts have been reclassified to conform with the 1998 presentation. (2) Inventories comprise the following:
January 31, October 31, $ in thousands 1998 1997 ------------------------- ----------- ----------- Coal $ 39,338 $ 54,419 Equipment for sale/rental 79,081 74,574 Supplies and other 46,594 46,455 -------- -------- $165,013 $175,448 ======== ========
6 8 FLUOR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) UNAUDITED (3) Effective November 1, 1997, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share" which specifies the method of computation, presentation and disclosure for earnings per share ("EPS"). The new standard requires presentation of two EPS amounts, basic and diluted. Basic EPS is calculated by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net earnings by the weighted average number of common shares and common share equivalents outstanding for the period. Currently, the Company's common share equivalents consist solely of stock options. EPS amounts for prior periods have been adjusted to conform with the provisions of the new standard. (4) Cash paid for interest was $3.8 million and $4.6 million for the three month periods ended January 31, 1998 and 1997, respectively. Income tax receipts, net of payments, were $15.6 million for the first quarter in 1998 reflecting the receipt of a $30 million tax refund on January 30, 1998. Income tax payments, net of refunds, were $19 million during the three month period ended January 31, 1997. 7 9 FLUOR CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is provided to increase understanding of, and should be read in conjunction with, the condensed consolidated financial statements and accompanying notes and the Company's October 31, 1997 annual report on Form 10-K. FORWARD-LOOKING INFORMATION Any of the comments in this Form 10-Q that refer to the Company's estimated or future results, including its estimates of the cost savings, and the timing of cost savings, from its previously announced cost reduction program, are forward-looking and reflect the Company's current analysis of existing trends and information. Actual results may differ materially from current expectations or projections based on a number of factors affecting the Company's businesses. These factors include, but are not limited to, cost overruns on fixed, maximum or unit-priced contracts, contract performance risk, the uncertain timing of awards and revenues under contracts, project financing risk, credit risk, risks associated with government funding of contracts, market conditions impacting realization of investments, market conditions in the domestic and international coal market, relatively mild weather conditions which may lower demand for steam coal and the state of the economic and political conditions worldwide. These forward-looking statements represent the Company's judgment only as of the date of this Form 10-Q. As a result, the reader is cautioned not to rely on these forward-looking statements. The Company disclaims any intent or obligation to update these forward-looking statements. Additional information concerning these and other factors can be found in press releases as well as the Company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Certain Factors and Trends Affecting Fluor and Its Businesses--Forward-Looking Statements" in the Company's Form 8-K filed May 6, 1997, which is hereby incorporated by reference and attached hereto as Exhibit 99.1. RESULTS OF OPERATIONS Revenues decreased one percent for the three month period ended January 31, 1998 compared with the same period of 1997. Net earnings for the three month period ended January 31, 1998 were $54.8 million compared with $62.0 million for the same period of 1997. The decrease in net earnings was primarily due to lower earnings for the Engineering and Construction segment, partially offset by lower corporate administrative and general expense. 8 10 ENGINEERING AND CONSTRUCTION Revenues for the Engineering and Construction segment decreased two percent for the three month period ended January 31, 1998 compared with the same period of 1997, due primarily to a decrease in the volume of work performed, partially offset by higher revenues from the segment's Diversified Services units. Operating profit for the three months ended January 31, 1998 decreased 28 percent to $53.4 million, compared with $74.0 million during the same period of 1997. Operating margins for the first quarter of 1998 reflect lower average project margins, partially offset by savings from cost initiative actions undertaken in 1997. Provisions of $21.0 million were recognized in the first quarter of 1997 for cost overruns on two fixed price power projects, including a power project located outside of the United States. The loss in the first quarter on this project reflected additional costs then identified to be incurred arising primarily from bad weather, lack of timely site access, unexpected design changes and low labor productivity. The loss on the second project, which is located in the United States, was due primarily to startup problems, craft employee turnover and operation of the plant control system. The company also recognized in the first quarter of 1997 a credit totaling $25.0 million related to certain actuarially determined insurance accruals. New awards for the three months ended January 31, 1998 were $2.6 billion compared with $3.6 billion for the three months ended January 31, 1997, due to the effect of a lower percentage of large projects and project selectivity by the Company in an effort to improve project profitability. Approximately 49 percent of first quarter 1998 new awards were for projects located outside the United States. There were no project awards in excess of $400 million in the first quarter of 1998. The uncertain timing and, in some cases, large size of new awards can create variability in the company's award pattern. Consequently, future award trends are difficult to predict with certainty. Furthermore, the global effect of the recent turmoil in Asian financial markets could result in the delay of awards during the remainder of fiscal year 1998. 9 11 The following table sets forth backlog for each of the Company's Engineering and Construction business groups:
January 31, October 31, January 31, $ in millions 1998 1997 1997 - ------------- ------- ------- ------- Process $ 6,563 $ 6,384 $ 5,236 Industrial 4,677 5,178 6,374 Power/Government 1,908 2,092 3,430 Diversified Services 870 716 937 ------- ------- ------- Total backlog $14,018 $14,370 $15,977 ======= ======= ======= U.S. $ 5,819 $ 5,665 $ 7,486 Outside U.S. 8,199 8,705 8,491 ------- ------- ------- Total backlog $14,018 $14,370 $15,977 ======= ======= =======
The composition of backlog by business group has remained relatively unchanged since year end. At January 31, 1998, approximately 26 percent of the Company's backlog is in the Asia Pacific region, including Australia. Due to the nature of the projects included in backlog, the Company has not experienced any significant disruption in ongoing project execution related to the recent turmoil in Asian financial markets. Although backlog reflects business which is considered to be firm, cancellations or scope adjustments may occur. Backlog is adjusted to reflect any known project cancellations, deferrals, and revised project scope and cost, both upward and downward. On March 9, 1998, the Company announced that it intends to pursue options to either divest or restructure its equipment sales and rental unit, American Equipment Company. If market conditions warrant, the Company intends to use the after-tax proceeds from any such transaction to fund its ongoing share repurchase program. COAL Revenues increased 17 percent for the three month period ended January 31, 1998 compared with the same period in 1997. The increase was due primarily to increased sales volume of both metallurgical and steam coal, partially offset by lower steam coal prices. The increase in metallurgical coal revenues reflects primarily an increased demand by steel producers. Steam coal market prices declined as overall demand was down due to recent mild winter weather conditions. Despite lower prices, steam coal revenues increased due primarily to higher sales volume to existing electric utility customers. Operating profit for the three months ended January 31, 1998 was $36.7 million compared with $32.6 million for the same period in 1997. Gross profit and operating profit increased for the three months ended January 31, 1998 compared with the same period in 1997 due primarily to the increased sales volume of both metallurgical and steam coal, offset by lower pricing of steam coal. 10 12 OTHER Net interest for the three months ended January 31, 1998 increased compared with the same period of 1997 due primarily to $300 million in new long-term debt issued in March 1997. Corporate administrative and general expense in the first quarter ended January 31, 1998 was lower compared with the same period in 1997 due primarily to a credit of approximately $10 million related to a long-term incentive compensation plan. The Company accrues for certain long-term incentive awards whose ultimate cost is dependent on attainment of various performance targets set by the Organization and Compensation Committee (the "Committee") of the Board of Directors. Under the long-term incentive compensation plan referred to above, the performance target expired, without amendment or extension by the Committee, on December 31, 1997. FINANCIAL POSITION AND LIQUIDITY At January 31, 1998, the Company had cash and cash equivalents of $305.4 million and a long-term debt to total capital ratio of 14.7 percent. At January 31, 1997, the Company had cash and cash equivalents of $124.6 million and a long-term debt to total capital ratio of less than one percent. The Company expects to have adequate resources available from operating cash flows, cash and short-term investments, revolving credit and other banking facilities, capital market sources and commercial paper to provide for its capital needs for the foreseeable future. Operating activities generated $160.1 million in cash during the three month period ended January 31, 1998, compared with cash utilized by operations of $66.7 million during the same period in 1997. The increase in cash generated from operating activities is due primarily to a decrease in project related operating assets and liabilities. The change in operating assets and liabilities from period to period is affected by the mix, stage of completion, and commercial terms of engineering and construction projects. Cash was also positively impacted by the receipt of a $30 million tax refund on January 30, 1998. During the first quarter of 1998, the Company purchased 942,400 shares of its common stock for a total of $35 million in connection with its ongoing share repurchase program initiated during fiscal 1997. For the three months ended January 31, 1998, capital expenditures were $101 million, including $41 million related to Massey Coal. Dividends paid in the three months ended January 31, 1998 were $16.7 million ($.20 per share) compared with $15.9 million ($.19 per share) for the same period of 1997. 11 13 FINANCIAL INSTRUMENTS The Company's utilization of derivative financial instruments is substantially limited to the use of forward exchange contracts to hedge foreign currency transactions entered into in the ordinary course of business and not to engage in currency speculation. At January 31, 1998 and October 31, 1997, the Company had forward foreign exchange contracts of less than one year duration, to exchange principally Japanese yen, Canadian dollars, Australian dollars, French francs and Dutch guilders for U.S. dollars. In addition, the Company has a forward currency contract to exchange U.S. dollars for British pounds sterling to hedge annual lease commitments which expire in 1999. The total gross notional amount of these contracts at January 31, 1998 and October 31, 1997 was $146 million and $78 million, respectively. Forward contracts to purchase foreign currency represented $138 million and $74 million and forward contracts to sell foreign currency represented $8 million and $4 million, at January 31, 1998 and October 31, 1997, respectively. NEW ACCOUNTING PRONOUNCEMENTS In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS No. 131). SFAS No. 131 establishes new standards for reporting information about operating segments in interim and annual financial statements. This statement is effective for the Company's fiscal year 1999. 12 14 FLUOR CORPORATION CHANGES IN BACKLOG Three Months Ended January 31, 1998 and 1997 UNAUDITED
$ in millions 1998 1997 - -------------- ----------- ----------- Backlog - beginning of period $ 14,370.0 $ 15,757.4 New awards 2,602.1 3,590.6 Adjustments and cancellations, net 2.6 (243.2) Work performed (2,956.6) (3,128.3) --------- ----------- Backlog - end of period $ 14,018.1 $ 15,976.5 =========== ===========
13 15 PART II : OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 3 Restated Bylaws (as amended effective March 10, 1998) of Fluor Corporation. 27 Financial Data Schedule. 99.1 Current Report on Form 8-K filed May 6, 1997. (b) Reports on Form 8-K. None. 14 16 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. FLUOR CORPORATION ----------------------------------------------- (Registrant) Date: March 17, 1998 /s/ J. Michal Conaway ----------------------------------------------- J. Michal Conaway, Senior Vice President and Chief Financial Officer /s/ V. L. Prechtl ----------------------------------------------- V. L. Prechtl, Vice President and Controller 15 17 EXHIBIT INDEX 3 Restated Bylaws (as amended effective March 10, 1998) of Fluor Corporation. 27 Financial Data Schedule. 99.1 Current Report on Form 8-K filed May 6, 1997. EX-3 2 RESTATED BYLAWS AS AMENDED MARCH 10, 1998 1 EXHIBIT 3.0 RESTATED BYLAWS (as amended March 10, 1998) OF FLUOR CORPORATION (a Delaware corporation) ARTICLE I OFFICES Section 1.01 Registered Office. The registered office of FLUOR CORPORATION (hereinafter called the "Corporation") in the State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, and the name of the registered agent at that address shall be The Prentice-Hall Corporation System, Inc. Section 1.02 Principal Office. The principal office for the transaction of the business of the Corporation shall be at 3353 Michelson Drive, Irvine, California 92698. The Board of Directors (hereinafter called the "Board") is hereby granted full power and authority to change said principal office from one location to another. Section 1.03 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.01 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution. Section 2.02 Special Meetings. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws, include the power to call such meeting, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meetings of stockholders may be called by any other person or persons specified in any provisions of the Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time 2 hereafter), then such special meeting may also be called by the person or persons, in the manner, at the times and for the purposes so specified. Section 2.03 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. Section 2.04 Notice of Stockholder Business. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who complies with the notice procedures set forth in this Section 2.04. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal office of the Corporation, not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the books of the Corporation, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2.04. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2.04, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 2.05 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him or her personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him or her at his or her post office address furnished by him or her to the Secretary of the Corporation for such purpose or, if he or she shall not have furnished to the Secretary his or her address for such purposes, then at his or her post office address last known to the Secretary, or by transmitting a notice thereof to him or her at such address by telegraph, cable or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the 2 3 purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. Section 2.06 Quorum. Except in the case of any meeting for the election of directors summarily ordered as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called. Section 2.07 Voting. (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him or her and registered in his or her name on the books of the Corporation: (i) on the date fixed pursuant to Section 6.05 of the Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or (ii) if no such record date shall have been so fixed, then (a) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which meeting shall be held. (b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he or she shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his or her proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more 3 4 persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware. (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his or her proxy appointed by an instrument in writing, subscribed by such stockholder or by his or her attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he or she shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in the Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his or her proxy, if there be such proxy, and it shall state the number of shares voted. Section 2.08 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the entire duration thereof, and may be inspected by any stockholder who is present. Section 2.09 Judges. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of his or her ability. Such judges shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed shall ascertain and report the number of shares voted respectively for and against the question. Reports of the judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which he or she shall have a material interest. 4 5 ARTICLE III BOARD OF DIRECTORS Section 3.01 General Powers. The property, business and affairs of the Corporation shall be managed by the Board. Section 3.02 Number. The authorized number of directors of the Corporation shall be twelve and such authorized number shall not be changed except by a Bylaw or amendment thereof duly adopted by the stockholders in accordance with the Certificate of Incorporation or by the Board amending this Section 3.02. Section 3.03 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified board and for cumulative voting. Section 3.04 Notice of Stockholder Nominees. Only persons who are nominated in accordance with the procedures set forth in the Bylaws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 3.04. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal office of the Corporation not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person's written consent to be named in the proxy statement as a nominee and to serve as a director if elected); and (b) as to the stockholder proposing such nomination (i) the name and address, as they appear on the books of the Corporation, of such stockholder, and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in the Bylaws. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures 5 6 prescribed by the Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. Section 3.05 Mandatory Retirement. The Chairman of the Board and the President and any former Chairman of the Board and any former President, if serving as a director of the Corporation at age 72, shall retire from the Board at the end of the calendar year in which his or her 72nd birthday occurs. Each other employee or former employee of the Corporation or its subsidiaries serving as a director of the Corporation at age 65 shall retire from the Board at the end of the calendar year in which his or her 65th birthday occurs unless the Chairman of the Board recommends and the Board approves his or her continued service as a non-employee director. Each other employee of the Corporation or its subsidiaries under age 65 serving as a director of the Corporation who elects to take early retirement or who for any other reason is no longer an officer of the Corporation or its subsidiaries shall retire from the Board as of the date he or she ceases to be an officer unless the Chairman of the Board recommends and the Board approves his or her continued directorship. Each non-employee director of the Corporation serving at age 72 shall retire from the Board at the end of the calendar year in which his or her 72nd birthday occurs. For purposes of this Section, "end of the calendar year" shall include the period ending with the seventh day of January next following. Section 3.06 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, it shall take effect immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3.07 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his or her successor shall have been elected and shall qualify or until he or she shall resign or shall have been removed. Section 3.08 Place of Meeting, etc. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting. Section 3.09 First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. Section 3.10 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting 6 7 shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. Section 3.11 Special Meetings. Special meetings of the Board may be called at any time by the Chairman of the Board or the President or by any two directors, to be held at the principal office of the Corporation, or at such other place or places, within or without the State of Delaware, as the person or persons calling the meeting may designate. Notice of all special meetings of the Board shall be given to each director by two days' service of the same by telegram, by letter, or personally. Such notice may be waived by any director and any meeting shall be a legal meeting without notice having been given if all the directors shall be present thereat or if those not present shall, either before or after the meeting, sign a written waiver of notice of, or a consent to, such meeting or shall after the meeting sign the approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or be made a part of the minutes of the meeting. Section 3.12 Quorum and Manner of Acting. Except as otherwise provided in the Bylaws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. Section 3.13 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or such committee. Section 3.14 Compensation. No stated salary need be paid directors, as such, for their services, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board or an annual directors' fee may be paid; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. Members of special or standing committees may be allowed like compensation for attending committee meetings. Section 3.15 Committees. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Former employees of the Corporation or its subsidiaries who are no longer officers of the Corporation or its subsidiaries, if serving as a director of the Corporation, shall not be eligible to serve as a member of any committee of the Board. Except as otherwise provided in the Board resolution designating a committee, the presence of a majority of the authorized number of members of such committee shall be required to constitute a quorum for 7 8 the transaction of business at any meeting of such committee. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have any power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of the dissolution, or amending the Bylaws of the Corporation; and unless the resolution of the Board expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. Section 3.16 Officers of the Board. The Board shall have a Chairman of the Board and may, at the discretion of the Board, have a Vice Chairman and other officers. The Chairman of the Board and the Vice Chairman shall be appointed from time to time by the Board, unless such positions are elected offices of the Corporation, currently filled, and shall have such powers and duties as shall be designated by the Board. ARTICLE IV OFFICERS Section 4.01 Officers. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a Secretary, a Treasurer and such other officers as may be appointed by the Board as the business of the Corporation may require. Officers shall have such powers and duties as are permitted or required by law or as may be specified by or in accordance with resolutions of the Board. Any number of offices may be held by the same person. Unless the Board shall otherwise determine, the Chairman of the Board shall be the Chief Executive Officer of the Corporation. In the absence of any contrary determination by the Board, the Chief Executive Officer shall, subject to the power and authority of the Board, have general supervision, direction and control of the officers, employees, business and affairs of the Corporation. Section 4.02 Election and Term. The officers of the Corporation shall be elected annually by the Board. The Board may at any time and from time to time elect such additional officers as the business of the Corporation may require. Each officer shall hold his or her office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Section 4.03 Removal and Resignation. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board. Any officer may resign at any time by giving notice to the Board. Such resignation shall take effect at the time specified in such notice or, in the absence of such specification, at the date of the receipt by the Board of such notice. Unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. 8 9 Section 4.04 Vacancies. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled in the manner prescribed in these Bylaws for the regular appointment to such office. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. Section 5.01 Execution of Contracts. The Board, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by the Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 5.02 Checks, Drafts, etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such person shall give such bond, if any, as the Board may require. Section 5.03 Deposit. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chief Executive Officer, the President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation. Section 5.04 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of the Bylaws, as it may deem expedient. 9 10 ARTICLE VI SHARES AND THEIR TRANSFER Section 6.01 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him or her. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President and by the Secretary. Any or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall thereafter have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04 of the Bylaws. Section 6.02 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03 of the Bylaws, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be stated expressly in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. Section 6.03 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with the Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them. Section 6.04 Lost, Stolen, Destroyed, And Mutilated Certificates. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, 10 11 however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do. Section 6.05 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. If, in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders, the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. ARTICLE VII MISCELLANEOUS Section 7.01 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and the year of incorporation. Section 7.02 Waiver of Notices. Whenever notice is required to be given by the Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice. Section 7.03 Fiscal Year. The fiscal year of the Corporation shall end on the 31st day of October of each year. Section 7.04 Amendments. The Bylaws, or any of them, may be rescinded, altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a majority of the number of directors then in office as directors, acting at any meeting of the Board, or (ii) by the vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation, at any annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting. Any Bylaws made or altered by the stockholders may be altered or repealed by the Board or may be altered or repealed by the stockholders. 11 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AT JANUARY 31, 1998 AND THE CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS OCT-31-1998 JAN-31-1998 305,413 0 915,909 0 165,013 2,041,666 2,998,571 1,047,488 4,543,136 1,817,411 300,439 0 0 51,742 1,688,822 4,543,136 0 3,399,019 0 3,309,279 0 0 9,422 84,458 29,645 54,813 0 0 0 54,813 0.66 0.66
EX-99.1 4 CURRENT REPORT ON FORM 8-K FILED MAY 6, 1997 1 EXHIBIT 99.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) May 6, 1997 ------------------ FLUOR CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-7775 95-0740960 - ------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 3353 Michelson Drive, Irvine, California 92698 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (714) 975-2000 ------------------ N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS. Certain Factors and Trends Affecting Fluor and its Businesses--Forward-Looking Statements. From time to time, certain disclosures in reports and statements released by Fluor Corporation (the "Company"), or statements made by its officers or directors, will be forward-looking in nature, such as statements related to the Company's opinions about trends and factors which may impact future operating results. The Company is filing this Current Report on Form 8-K to avail itself of the safe harbor provided in the Securities Act of 1933 and the Securities Exchange Act of 1934 with respect to any such forward-looking statements that may be contained in the Company's reports and other documents filed with the Securities and Exchange Commission under Sections 13 or 15(d) of the Securities Exchange Act of 1934 and written or oral forward-looking statements made by the Company's officers and directors on behalf of the Company to the press, potential investors, securities analysts and others. Such forward-looking statements could involve, among other things, statements regarding the Company's intent, belief or expectation with respect to (i) the Company's results of operations and financial condition, (ii) the Company's implementation of cost reductions, (iii) the consummation of acquisition and financing transactions and the effect thereof on the Company's business, and (iv) the Company's plans and objectives for future operations and expansion or consolidation. Any such forward-looking statements would be subject to the risks and uncertainties that could cause actual results of operations, financial condition, cost reductions, acquisitions, financing transactions, operations, expansion, consolidation and other events to differ materially from those expressed or implied in such forward-looking statements. Any such forward-looking statements would be subject to a number of assumptions regarding, among other things, future economic, competitive and market conditions generally. Such assumptions would be based on facts and conditions as they exist at the time such statements are made as well as predictions as to future facts and conditions, the accurate prediction of which may be difficult and involve the assessment of events beyond the Company's control. The Company wishes to caution readers that forward-looking statements, including disclosures which use words such as the Company "believes," "anticipates," "expects," "estimates" and similar statements, are subject to certain risks and uncertainties which could cause actual results of operations to differ materially from expectations. Any such forward-looking statements should be considered in context with the various disclosures made by the Company about its businesses, including the risk factors discussed below. Important risk factors which could cause actual results of operations to differ materially from those expressed in any forward-looking statements include, but are not limited to, the following: Fixed, Maximum or Unit Priced Contracts. An increasing number of the Company's contracts for the provision of engineering and construction services are fixed, maximum or unit price contracts and fixed price incentive contracts. Under fixed, maximum or unit price contracts, the Company agrees to perform the contract for a fixed price and as a result, benefits from costs savings, but is unable to recover for any cost overruns. Under fixed price incentive contracts, the Company shares with the customer any savings up to a negotiated ceiling price 2 3 and carries some or all of the burden of costs exceeding the negotiated ceiling price. Contract prices are established based in part on cost estimates which are subject to a number of assumptions, such as assumptions regarding future economic conditions. If in the future these estimates prove inaccurate, or circumstances change, cost overruns can occur. Contract Performance Risk. In certain instances, the Company guarantees facility completion by a scheduled acceptance date or achievement of certain acceptance and performance testing levels. Failure to meet any such schedule or performance requirements could result in additional costs and the amount of such additional costs could exceed project profit margins. Performance problems for existing and future contracts, whether of the fixed-price or other type, could cause actual results of operations to differ materially from those contained in forward-looking statements. Size and Uncertainty of Timing of Contracts. The Company's future award prospects include several large-scale domestic and international projects. The large size and uncertain timing of these projects can create variability in the Company's award pattern. Consequently, future award trends are difficult to predict with certainty. The Company's estimates of future performance depend on, among other things, the likelihood of receiving certain new awards. While these estimates are based on the good faith judgment of management, these estimates frequently change based on new facts which become available. In addition, the timing of receipt of revenue by the Company from engineering and construction projects can be affected by a number of factors outside the control of the Company. Frequently, the Company's services on a project take place over an extended period of time, and are subject to unavoidable delays from weather conditions, unavailability of equipment from vendors, changes in the scope of service requested by clients or labor disruptions affecting client job sites. Uncertainty of contract or award timing can also present difficulties in matching workforce size with contract needs. In some cases, the Company must maintain and bear the cost of a ready workforce larger than called for under existing contracts in anticipation of future workforce needs under expected awards, which can be delayed or not received. Government Contracts. Several of the Company's significant contracts are Government contracts. Generally, Government contracts are subject to oversight audits by Government representatives, to profit and cost controls and limitations, and to provisions permitting termination, in whole or in part, without prior notice at the Government's convenience upon payment of compensation only for work done and commitments made at the time of termination. In the event of termination, the Company generally will receive some allowance for profit on the work performed. In some cases, Government contracts are subject to the uncertainties surrounding Congressional appropriations or agency funding. Government business is subject to specific procurement regulations and a variety of socio-economic and other requirements. Failure to comply with such regulations and requirements could lead to suspension or debarment, for cause, from Government contracting or subcontracting for a period of time. Among the causes for debarment are violations of various statutes, including those related to employment practices, the protection of the environment, the accuracy of records and the recording of costs. Backlog. The dollar amount of the Company's backlog as stated at any given time is not necessarily indicative of the future earnings of the Company related to the performance of such 3 4 work. Cancellations or scope adjustments related to contracts reflected in the Company's backlog can occur. Environmental, Safety and Health. It is impossible to predict the full impact of future legislative or regulatory developments relating to environmental protection and coal mine and preparation plant safety and health on the Company's coal operations, because the standards to be met, as well as the technology and length of time available to meet those standards, continue to develop and change. Fluctuation in the Production of Coal. The Company's coal production and sales are subject to a variety of operational, geological, transportation and weather-related factors that routinely cause production to fluctuate. For example, sales may be adversely affected by fluctuations in production and by transportation delays arising from equipment unavailability and weather-related events, such as flooding. Labor disruptions also may occur at times or in a manner that causes current and projected results of operations to deviate from projections and expectations. Decreases in production from anticipated levels usually lead to increased mining costs and decreases in results of operations. Effects of Global Economic and Political Conditions. The Company's businesses are subject to fluctuations in demand and to changing economic and political conditions which are beyond the control of the Company and may cause actual results to differ from forward-looking statements. Coal operations produce a commodity which is internationally traded and the price of which is established by market factors outside the control of the Company. Although the Company has taken actions to reduce its dependence on external economic conditions, management is unable to predict with certainty the amount and mix of future business. Revenues and earnings from international operations are subject to domestic and foreign government policies and regulations, embargoes and international hostilities. Competition. The markets served by the engineering and construction businesses of the Company are highly competitive and for the most part require substantial resources and particularly highly skilled and experienced technical personnel. The markets served by the coal business of the Company are also highly competitive and require substantial capital investment as well as the ability to produce coal of consistent quality and meet demanding customer specifications. A large number of well financed, multi-national companies are competing in the markets served by the Company's businesses. Intense competition in the engineering and construction business is expected to continue, presenting the Company with significant challenges in its ability to maintain strong growth rates while maintaining acceptable profit margins. 4 5 Cost Reduction Program. In March of 1997, the Company announced a cost reduction program for its Fluor Daniel operations. The Company's estimates of the future cost savings from the cost reduction program are forward-looking statements. The Company may from time to time provide similar estimates with respect to this or other cost reduction efforts. The actual cost savings may differ materially from estimates based on a number of factors affecting the Company's business, including the ability to achieve estimated staff reductions while maintaining workflow in the functional areas affected and to sublease vacated facilities within anticipated time frames at anticipated sublease rent levels. 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 hereunto duly authorized. Date: May 6, 1997 FLUOR CORPORATION By: /s/ J. MICHAL CONAWAY --------------------------------- J. Michal Conaway, Senior Vice President and Chief Financial Officer 5 -----END PRIVACY-ENHANCED MESSAGE-----