Fluor 2004 Annual Report Download - page 95

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FLUOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The company’s obligations for minimum rentals under non-cancelable operating leases are as follows:
Year Ended December 31,
(in thousands)
2005 $ 29,309
2006 28,572
2007 23,945
2008 22,301
2009 19,896
Thereafter 150,959
Contingencies and Commitments
The company and certain of its subsidiaries are involved in litigation in the ordinary course of business. The company
and certain of its subsidiaries are contingently liable for commitments and performance guarantees arising in the ordinary
course of business. Clients have made claims arising from engineering and construction contracts against the company, and
the company has made certain claims against clients for costs incurred in excess of the current contract provisions.
Recognized claims against clients amounted to $105 million and $24 million at December 31, 2004 and 2003, respectively.
Amounts ultimately realized from claims could differ materially from the balances included in the financial statements. The
company does not expect that claim recoveries will have a material adverse effect on its consolidated financial position or
results of operations.
As of December 31, 2004, several matters on certain completed and in progress projects are in the dispute resolution
process. The following discussion provides a background and current status of these matters:
Murrin Murrin
On May 5, 2004, Fluor Australia and its client, Anaconda Nickel (‘‘Anaconda’’) entered into a settlement agreement
resolving all disputes related to the Murrin Murrin Nickel Cobalt project located in Western Australia. Fluor Australia paid
the equivalent of approximately US$120 million to end all remaining claims under both the first and second phases of
arbitration, including any appeals. The payment had no material effect on the company’s consolidated financial position or
results of operations as the amount, including defense costs, was funded by the company’s insurers.
In September 2002, the first phase of arbitration resulted in an amended award to Anaconda of approximately
US$84.0 million and an award to Fluor Australia of approximately US$59.9 million for amounts owing from Anaconda under
the contract. The company had previously recovered the first phase award plus substantially all defense costs incurred from
available insurance.
Fluor Daniel International and Fluor Arabia Ltd. V. General Electric Company, et al
U.S.D.C., Southern District Court, New York
In October 1998, Fluor Daniel International and Fluor Arabia Ltd. filed a complaint in the United States District Court
for the Southern District of New York against General Electric Company and certain operating subsidiaries as well as Saudi
American General Electric, a Saudi Arabian corporation. The complaint seeks damages in connection with the procurement,
engineering and construction of the Rabigh Combined Cycle Power Plant in Saudi Arabia. Subsequent to a motion to compel
arbitration of the matter, the company initiated arbitration proceedings in New York under the American Arbitration
Association international rules. The evidentiary phase of the arbitration has been concluded and a decision on entitlement is
expected shortly and a decision on damages is expected later in 2005.
Dearborn Industrial Project
Duke/Fluor Daniel (D/FD)
The Dearborn Industrial Project (the ‘‘Project’’) started as a co-generation combined cycle power plant project in
Dearborn, Michigan. The initial Turnkey Agreement, dated November 24, 1998, consisted of three phases. Commencing
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