Fluor 2007 Annual Report Download - page 69

Because most of the cash held in foreign currencies will be used for project related expenditures in those
currencies, the company’s exposure to realized exchange gains and losses is considered nominal.
Liquidity is provided by cash generated from operations, advance billings on contracts in progress and
access to financial markets. As customer advances are reduced through use in project execution and if not
replaced by advances on new projects, the company’s cash position could be reduced. For the next
12 months, cash generated from operations supplemented by borrowings under credit facilities and the
issuance of debt or equity securities are expected to be sufficient to fund operations.
Off-Balance Sheet Arrangements (including Contractual Obligations) The company maintains a variety
of commercial commitments that are generally made available to provide support for various commercial
provisions in its engineering and construction contracts. The company has $2.2 billion in committed and
uncommitted lines of credit to support letters of credit. Letters of credit are provided to clients in the
ordinary course of business in lieu of retention or performance and completion guarantees on engineering
and construction contracts. At December 31, 2007, the company had utilized $994 million of its credit
capacity. In addition, the company has $113 million in credit lines for general purposes in addition to the
amount above. The company also posts surety bonds as generally required by commercial terms, primarily
on state and local government projects to guarantee its performance on contracts.
Contractual Obligations at December 31, 2007 are summarized as follows:
Amount of Commitment Expiration Per Period
Contractual Obligations Total 1 year or less 2-3 years 4-5 years Over 5 years
$ in millions
Debt:
1.5% Convertible Senior Notes $ 307 $307 $ — $ — $ —
5.625% Municipal bonds 18 — — — 18
Interest on debt obligations(1) 16 6 2 2 6
Operating leases(2) 306 48 97 53 108
Uncertain tax contingencies(3) 73 — — — 73
Joint venture contributions 27 3 6 17 1
Pension minimum funding(4) 234 17 104 113 —
Other post-employment benefits 47 6 13 11 17
Other compensation related obligations(5) 354 47 65 47 195
Total $1,382 $434 $287 $243 $418
(1) Interest is based on the borrowings that are presently outstanding and the timing of payment indicated in the
above table. Interest relating to possible future debt issuances is excluded since an accurate outlook of interest
rates and amounts outstanding cannot be reasonably predicted.
(2) Operating leases are primarily for engineering and project execution office facilities in Sugar Land, Texas, the
United Kingdom and various other U.S and international locations, equipment used in connection with long-term
construction contracts and other personal property.
(3) Uncertain tax contingencies are positions taken or expected to be taken on an income tax return that may result
in additional payments to tax authorities. The total amount of uncertain tax contingencies is included in the
‘‘Over 5 years’’ column as the company is not able to reasonably estimate the timing of potential future payments.
If a tax authority agrees with the tax position taken or expected to be taken or the applicable statute of limitations
expires, then additional payments will not be necessary.
(4) The company generally provides funding to its U.S. and non-U.S. pension plans based on the minimum required
by applicable regulations. In determining the minimum required funding, the company utilizes current actuarial
assumptions and exchange rates to forecast estimates of amounts that may be payable for up to five years in the
future. In management’s judgment, minimum funding estimates beyond a five year time horizon cannot be
reliably estimated. Where minimum funding as determined for each individual plan would not achieve a funded
status to the level of accumulated benefit obligations, additional discretionary funding may be provided from
available cash resources.
(5) Principally deferred executive compensation.
36