Request for Line of Credit John Bittner Guillermo Carrasquillo George Eichleay Nate Johnson Danny Kim Joonsoo Kim Chris Thompson Drew Wyatt CEE 244A November 19, 2001

Our Goal

MK Overview: What We Do  Transportation Industry  Rail, subway, and locomotive  Transportation Infrastructure  Bridges, roadways, and tunnels  Environmental  Cleanups and remediation

MK Overview: What We Do  Industrial Process  Construction, operations, and maintenance  Power Industry  Mining, nuclear, and hydroelectric

MK: An Overview  20% of revenue in international markets in Canada, Brazil, Argentina, Hong Kong, etc.

Management Strategy

 Decentralization of corporate structure  Increases individual unit efficiency  Makes units more responsive to customer needs  Links responsibility with authority  In case of MK Gold, made independent company through public stock offering  Increases flexibility of each unit

MK: Strong Financial Growth  Revenues increasing  +20% compared to 1989  Strong quality backlog  $4.2 billion  Diversification  Government = Stability + Worldwide Growth  BOOT  Secure long-term source of revenue

Future Needs for Financing  Morrison-Knudsen Financial Needs  Short-term finance to meet our needs for working capital  Bank negotiations to get $150 million revolving credit on March 31, 1994  Putting additional finance to use  Increase in Accounts Receivable and Inventory levels, and decrease in Customer Advances, particularly in the Rail System segment.

Financial Position

Losses: Each Year Different  (Investments) Losses on Investments and Loans to affilitates  Corrective Action – Improved investment portfolio, reduced loans to affiliates  1992 – (Financing) Repayment of Long Term Debt  Corrective Action – Done: reduced debt, better debt to equity ratios, and interest coverage capabilities  1993 – (Operations) Increasing Inventory (Rail) and Collections (Accounts Receivable and Advances)  Corrective Action – Sell receivables to banks; stabilize rail operations to produce larger operational income

Financial Position

Corporate Outlook  Transportation Manufacturing  20 year franchise to operate/maintain commuter rail line in Buenos Aires  Transportation Infrastructure  $1.2 billion contract for Hong Kong Airport  Environmental  $100 million wastewater project in Egypt

Corporate Outlook  Industrial Process  Contract with Pepsi-Cola for bottling plants across U.S.  Power  Acquired MIBRAG, the largest coal mining operation in East Germany

Consultant Recommendation I know all they want is stock tips “Morrison-Knudsen is highly viable and I strongly recommend providing the financing which they have requested.” He wants another Coke, I just know it