Fluor 2004 Annual Report Download - page 79

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FLUOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Currently under APB 25, no compensation cost is recognized for unvested stock options where the grant price is equal to
the market price on the date of grant and the vesting provisions are based only on the passage of time. Had the company
recorded compensation expense using the accounting method recommended by SFAS 123, net earnings and diluted earnings
per share would have been reduced to the pro forma amounts as follows:
December 31
Year Ended 2004 2003 2002
(in thousands)
Net earnings
As reported
Stock-based employee compensation expense, net of tax
Pro forma
$ 186,695
(8,642)
$ 178,053
$ 157,450
(8,577)
$ 148,873
$ 163,615
(8,340)
$ 155,275
Basic net earnings per share
As reported
Pro forma
$ 2.29
$ 2.18
$ 1.97
$ 1.86
$ 2.06
$ 1.95
Diluted net earnings per share
As reported
Pro forma
$ 2.25
$ 2.15
$ 1.95
$ 1.84
$ 2.05
$ 1.94
Comprehensive Income (Loss)
SFAS 130, ‘‘Reporting Comprehensive Income,’’ establishes standards for reporting and displaying comprehensive
income and its components in the consolidated financial statements. The company reports the cumulative foreign currency
translation adjustments and adjustments related to recognition of minimum pension liabilities as components of accumulated
other comprehensive income (loss). At December 31, 2004, accumulated other comprehensive income (loss) included
cumulative foreign currency translation adjustments of $33.5 million (net of deferred taxes of $20.0 million) and adjustments
related to recognition of minimum pension liabilities of $(30.5) million (net of deferred taxes of $13.1 million).
Beginning in 2003 and continuing through 2004, exchange rates for functional currencies for most of the company’s
international operations strengthened against the U.S. dollar resulting in unrealized translation gains that are reflected in the
cumulative translation component of other comprehensive income. Most of these unrealized gains relate to cash balances held
in currencies other than the U.S. dollar.
Discontinued Operations
In September 2001, the Board of Directors approved a plan to dispose of certain non-core elements of the company’s
construction equipment and temporary staffing operations. In June 2003, the company completed the sale of the last
equipment dealership operation resulting in cash proceeds of $31.9 million, which approximated its carrying value. Prior to
completion of the sale, the company recorded an additional after-tax impairment provision in the first quarter of 2003 of
$13.5 million, which included adjustments to deferred taxes, to recognize further deterioration in its fair value due to
continued severely depressed conditions in the equipment rental industry.
Results of operations for all periods presented have been reclassified and are presented as discontinued operations.
Interest expense was not reclassified to discontinued operations in connection with the non-core businesses because disposal
of those operations did not include any debt to be assumed by the buyers.
F-12