Fluor 2001 Annual Report Download - page 31

FLUOR CORPORATION 2001 ANNUAL REPORT
Commercial commitments outstanding as of December 31, 2001 are summarized below:
Amount of Commitment Expiration Per Period
Total
Amount Under 1 Over 5
Commercial Commitment1 Committed Year 1–3 years 4–5 years years
$ in millions
Lines of Credit2:
Revolving Credit Facility $ 38 $ – $38 $– $ –
Letters of Credit3, 4 299 261 31 1 6
Guarantees 27 4 4 – 19
Surety Bonds 344 332 12 – –
Total $708 $597 $85 $1 $25
Notes:
1 All commercial commitments are unsecured.
2 Does not include $350 million of unused commercial paper back-up line of credit. There were no amounts outstanding under this line as of December 31, 2001.
3 Does not include $388.4 million of unused capacity under a $400 million letter of credit facility. This facility provides that default occurs if the company’s
credit rating falls below investment grade. In that event, the company would be required to post collateral for all outstanding letters of credit.
4 Does not include other unused lines of $243 million for letters of credit and $121 million for general cash management purposes.
Contractual obligations at December 31, 2001 are summarized below:
Payments Due By Period
Under 1 Over 5
Contractual Obligations Total Year 1–3 years 4–5 years years
$ in millions
Long-term Debt:
5.625% Municipal Bonds $ 18 $ – $ – $ – $ 18
Operating Leases1 340 47 74 36 183
Total $358 $47 $74 $36 $201
1 Operating lease commitments are primarily for engineering and project execution office facilities in Sugar Land, Texas, Aliso Viejo, California and Calgary, Canada.
The lease agreements in Aliso Viejo and Calgary contain residual value guarantees totaling $110 million.
The company has a common stock buyback program, authorized
by the Board of Directors, to purchase shares under certain market
conditions. During 2001 the company purchased 39,000 shares of its
common stock for a total consideration of $1.4 million and in the
year ended October 31, 2000 repurchased 747,000 shares for a total
of $23 million. These purchases do not include 1,850,000 shares of its
common stock repurchased through the settlement of a forward
purchase contract on November 30, 2000 in connection with the spin-
off of Massey.
Cash dividends in 2001 amounted to $50.9 million ($0.64 per
share) compared with $76 million ($1.00 per share) and $60.7 mil-
lion ($0.80 per share) in the years ended October 31, 2000 and 1999,
respectively. No dividends were paid in the transition period that
resulted from the change in fiscal year. The dividends declared in
2001 were adjusted commensurate with the Massey spin-off. This
dividend policy is consistent with the dividend policy of Fluor prior to
the spin-off of Massey. The payment and level of future cash dividends
will be subject to the discretion of the company’s board of directors.
The company has on hand and access to sufficient sources of
funds to meet its anticipated operating needs. Cash on hand and
short- and long-term lines of credit (see Commercial Commitment
table above) give the company significant operating liquidity.
Although inflation and the cyclical nature of the industry affect
the company, its engineering and construction operations are gen-
erally protected by the ability to fix costs at the time of bidding or
to recover cost increases in most contracts. 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.
PAGE 29