ML20078G291
| ML20078G291 | |
| Person / Time | |
|---|---|
| Site: | West Valley Demonstration Project |
| Issue date: | 03/29/1963 |
| From: | Runion T NUCLEAR FUEL SERVICES, INC. |
| To: | |
| Shared Package | |
| ML20078G199 | List: |
| References | |
| FOIA-83-354 NUDOCS 8310120044 | |
| Download: ML20078G291 (20) | |
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Before the UNITED STATES ATOMIC ENERGY COMMISSION In the Matter of )
NUCLEAR FUEL SERVICES, INC. Dochet No. 50-201 NEWYORKSTATEATOMICRESEARCH}
AND DEVELOPMENT AUTHORITY )
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to CD 6 N 6 PART A 0F NFS ' APPLICATION D FOR PERMIT m
TO CONSTRUCT A SPENT FUEL REPROCESSING PLANT ARTHUR STAMBLER 1710 H Street, N. W. Scharfeld, Bechhoefer, Washington, D. C. Baron & Stambler March 29, 1963 Attorneys for NUCLEAR FUEL SERVICES, INC.
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Before the UNITED STATES ATOMIC ENERGY COMMISSION Washington 25, D. C.
In the Matter of
, NUCLEAR FUEL SERVICES, INC. Docket No. 50-201 and NEW YORK STATE ATOMIC RESEARCH
, AND DEVELOPMENT AUTHORITY AMENDMENT yk TO PART A OF NFS' APPLICATION Nuclear Fuel Services, Inc., applicant for a construction permit for a spent irradiated fuel reprocessing plant in
- Cattaraugus County, New York, herewith subaits Amendment #4 to Part A of its pending application dealing with financial and related information.
This Amendment #4 is in response to the Commission's letter of March 14, 1963 from its Trial Counsel Troy B. Conner, Jr., Esq.
to Arthur Stambler of Scharfeld, Bechhoefer, Baron & Sta'mbler, counsel for applicant NFS, requesting certain additional financial data with respect to the pending application. NFS believes that the information being furnished hereinbelow is fully responsive to the Commission's request and that this data, together with that previously furnished, will be deemed adequate to insure a finding that NFS is financially qualified to design and construct the proposed production facility.
The following information is furnished seriatim to the Commission's specific requests of March 14th:
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- 1. Facility Costs and Bechtel's Role Therewith The total cost of the proposed facility, including all aspects of design and construction as well as related site im-provements, is estimated to be $24,550,000. This total reflects i
detailed and close projections made by the Bechtel Corporation which will design and construct it. (See NFS Amendment f2, page 2, and new Annex 12, attached hereto.) Of this total, Bechtel har made a firm proposal, ounctanding for NFS acceptance until April 21, 1953, to construct the entire facility with certain limited exceptions (detailed below) for a fixed price of $21,600,000. This price covers therefore approximately 90% of the entire facility.
Bechtel's quoted price is fixed and unqualified except insofar as it 1) includes no allowances for man-made obstructions below ground and 2) excludes any increased costs from work delays and suspensions caused by any NFS account or omission. (See New Annex 12). With the Commission's early issuance of the CP to construct, an'd in t
light of NFS' knowledge of the soil environment of the plant area, I
it cannot reasonably be anticipated that either of such possible l
j qualifications would subsequently result in any increased con-l struction costs under the Bechtel fixed price commitment.
! As set forth in Bechtel's March 15, 1963 letter to NFS
. (New Annex 12, attached), the following are the sole and limited exclusions to Bechtel's fixed-price cost of $21,600,000. for the entire facility:
- a. Certain processing equipment, principally in the I
mechanical head end, which Bechtel is currently not prepared to submit
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The following is a list of the major items of equip-
. ment under each sub-category, together with their cost as estimated
- by Bechtel. So as not to unduly burden the hearing record and in 3
order to make some provision for competitive pricing requirements, the following list includes only those equipment items estimated to cost in excess of $20,000:
a) Fuel Receiving and Storage No.
IV-9 Underwater Transfer Conveyor & Winch $ 24,200.
IV-lO Centering Spiders 29,500.
b) Mechanical Process Cell 2C-1 Deactivation Chamber 2V-2 Radial Saw 61,900.
2V-4 Bundle Shear 158,600.
2V-5 Pin Shear 249,600.
33,100.
2V-7A Deactivation Autoclave Cart 23,500.
2V-7B Transfer Conveyor (PMC to CPC) 400.
2V-10 Pushout Ram 24,400.
27, 2V-11 Pushout Table & Drier '27,400.
f c) Others l 41V-1 Jumper Fabrici. ~,on Jig 90,300.
i The above listed items include over 83% of the entire total of $890,000t for all such elements not within Bechtel's fixed
. price commitment. Half of the rem aining (mostly small items tools estimatedly
/would and fixtures) cost no more than $2500. each and often much less,
- b. NFS-Provided Facilities The related facilities to be provided by NFS--at a total projected cost of $1,465,000--are listed below, together with i
- The $990,000. total excluding the $100,000. for design changes in
! other equipment included within the Bechtel fixed-price commitment.
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n their respective costs as originally estimated by Bechtel. Bechtel was prepared to include this amount in its fixed price to cover all Such facilities had NFS so requested. (See Annex 12). While NFS believes that these facilities may here be listed at their cost according to Bechtel's estimates, NFS anticipates that their actual cost may prove to be less. Any such differences would remain available as an " override" fund in the unlikely event that the cost of any specific item exceeded that now estimated.
Railroad spur $378,000 Fencing 79,000 Water Supply 285,000 Portable health a safety equipment 69,000 Analytical equipment 312,000 Mobile equipment 269,000 0ffice equipment 73,000
$1,465,000 Other Cost Estimates The Bechtel fixed price of $21,600,000. form $stofthe facility should alone be sufficient to preclude any substantial question being raised with respect to increased construction costs due to " escalation".* Should there prove to be any such unantici-pated cost increases in the remaining 10% or so of plant construc-tion or pre-operations, there would clearly be more than adequate
! funds to cover such increases in the several contingency funds l totalling nearly $3,500,000. which NFS will have available for such purposes.
- # Allowance for possible " escalation" is, of course, included and l absorbed in such fixed price; earlier and non-fixed Bechtel estimates included a specific allowance (i.e., $700,000.) for this contingency.
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c The same is true of the Staff's inquiry as to possible NFS provision for " winter construction and engineering costs".
Substantially, if not almost all, of such costs have been covered by Bechtel's fixed price commitment of $21,600,000. for design and construction of the entire facility. (Bechtel's original cost estimates were increased some 2 7 million dollars to reflect the shift of such project from a Southern location to New York State, which included winter construction allowances.) To the extqnt that there may prove to be come construction engineering and field expenses not included within such Bechtel fixed price commitment, NFS has budgeted an amount of $600,000, for this purpose. Finally, NFS has further provided an amount of $650,000. to cover interest charges on loans during the period of construction. These last two items are shown on NFS Annex 3 as further amended (Amendment
- 2) as "NFS Construction Related Expenses" in the combined amount of $1,250,000.
- 2. Extent of Bechtel Commitment .
As set forth in Paragraph 1 above, upon NFS acceptance of Bechtel's outstanding firm proposal, Bechtel would proceed to con-struct the entire facility with the indicated limited exclusions and qualifications for the fixed price of $21,600,000. This then would be the total cost to NFS for what would be approximately 90%
of the entire facility.
With respect to those limited portions of the Bechtel-provided facilities which would not now be included within its fixed price commitment, it has been shown that the total best-estimate cost of $890,000.* together with a possible 50% " override"
- See Paragraph la, pp. 3 4, above.
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C of $495,000, is reliably believed *to represent the "outside limit" of possible costs for this portion of the facility. (See Annex 12).
3 Bechtel Financial Data Attached hereto as New Annex 13 is a Statement detailing the Bechtel Corporation financial position as recently reported by it for Dun & Bradstreet. This data is in addition to that already on file at the Commissien concerning this leading engineering and construction company. In light thereof, it is cubmitted that Annex 13 fully resolves the Commission's request for Bechtel financial data. -
- 4. NFS Costs to Date and Effects, If Any, On Its Financial Statements
.As previously indicated to the Commission, NFS estimates of project costs have not been required to include substantial expenditures of a preparatory nature already made by applicant's stockholders and others which will not be reimbursed by NFS to them. (See Amendment #1 to Part A, pp. 4-5). These expenditures as made through November 30, 1962 comprise a total of more than l $1,000,000., including as follows:
(1) Expenditures of the Davison Chemical Division of Grace and five major utility companies operating as " Industrial Reprocessing Group", amounting to in excess of $600,000 for investigating the reprocessing
, plant project and demonstrating its technical and economic feasibility.
(2) Expenditures in excess of $300,000 made in 1962 by the Davison Chemical Division of Grace and expen-
! ditures in excess of $125,000 made in 1962 by AMF for further preparatory work in connection with the project. (Ibid)
- 0n the basis of the "best estimate " made "with confidence as to its
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accuracy" from available engineering design by Bechtel Corporation, the world's leading nuclear construction company (See Annexes 12 & 13).
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.. , C C Since December 1, 1962, the further costs of the project (including detailed engineering which has been underway since that date) have been borne by NFS. They have been met by it from those funds made available to it by its majority stockholder W. R. Grace '
& Co. as an advance on Grace 8s equity contribution of $6,000,000.
to NFS. These costs since December 1, 1962 to date have totalled i approximately $800,000. of which by far the major portion '
(approximately $725,000.) has been expended for Bechtel's further design and engineering detaile for the proposed facility. These expenditures are to be part of and credited against Bechtel's overall fixed price for most of the facility of $21,600,000., and so do not represent any additional cost burden to NFS which should be reflected in its Amended Annex 3 The same is true of any future NFS expenditures with i
Bechtel for this purpose of design detail; that is, any such costs will likewise be treated as PGrt of Bechtel'c $21,600,06D. commit-ment and not represent any additional costs to NFS beyond that i
already projected. The remainder of the NFS expenditures since 12/1/62 include the costs of NFS' continuing licensing activities at AEC and its negotiations for fuel processing contracts with the Commission and a number of utility companies. Funds allocated for these purposes as part of the_ provision for pre-operational Le
s C C costs (See p. 12 herein) are adequate to cover such expenditures to date as well as those anticipated in the future.
Accordingly, it may be concluded that project costs to 4
date have not had and will not have any substantial effect upon NFS' financial status and its available funds as heretofore spelled out to the Commission. ,
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5 Pre-Operational and Contingency Funds Prior to Bechtel's detailed cost estimates, NFS in its original application projected a total facility construction cost of $25,000,000. (p. 6). It also thero set forth total available funds adequate to cover such costs. (Part A). Following Bechtel's revised and final cost estimates, and just prior to the filing of Amendment fl to Part A on February 12, 1963, the Projected facility costs totalled $27,800,000. NFS then had available sources of funds in that same amount to cover projected costs of.qonstruction and pre-operational activities.
Upon subsequent discussions on the Commission level con.
cerning this matter of capital required and funds available, NFS then determined to establish the availability of an additional
, bank loan of some $4,000,000. to be available on an "if-and-when needed" basis to cover any greater costs than those projected which might conceivably be met in the actual construction and pre-operational activities of the facility.
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This additional bank loan is to be made available under certain ,
. i indicated conditions by the Morgan Guaranty Trust Company of New I
York. (See Amended Annex 5.) It continues to remain available and has'been included by NFS in developing a total bank loan availability of $13,300,000. and total sources of funds of $31,800,000. to cover all requirements of construction and pre-operational costs. (See Amended Annex 3 of 2/20/63).
The additional $4,000,000. bank loan is provided to assure that this financing matter would be quickly and satisfactorily resolved and that no question of financial capacity might reasonably be raised by the Commission. NFS' continues to believe on the basis 4 of close projections (including Bechtel's fixed price commitment for
- most of the plant and its reliable estimates for the remainder) that the total cost of construction and pre-operational activities will remain and prove to be within the limit of $28,300,000.* heretofore projected by it exclusive of any available contingency funds. (See I
An. ended Annex 3 in Amendment #2). NFS doss not anticipate and sees no real basis for. anticipating that such costs will exceed those projected by it and so require the use of part or all of the
! $3,500,000. contingency funds which are and will be available to it.
l (Ibid). Accordingly, to avoid the costs of unnecessary loans, NFS has made separate and special arrangements under which the Bank would make these contingency funds available only on a special
- Derived from the overall total of $31,800,000. less the $3,500,000.
contingency funds shown to be available. (See Amended Annex 3).
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" stand-by credit" basis for some period of a year or more after plant start-up which may be called on a "when-needed" basis. (Sce Amendment #2, Par. VI).
NFS' present allowance for pre-operational costs of
$1,400,000. in the original application reflected two separate items:
- 1) a schedule of anticipated pre-operational activities and all costs attendant thereto totalling $625,000.,and 2) the further s'um of $775,000. estimated to cover the costs of installing facilitics for processing stainless steel and sodium bcnded (Class B) fuels.
In subsequent contract negotiations with AEC and the utilities, it was determined that the facilities for processing such fuels would not be included as part of the initial NFS plant installation.
(Their future installation turns on further negotiations with AEC and a Commission R & D program in this aren.) (See Note E to Annex 3 in Amendment #2). Accordingly, the $775,000, previously made available for these processing facilities was freed and made available as a reserve to cover other pre-operational expenses, making in all a total of $1,400,000. available for this purpose.
The specific total of $625,000. originally provided for pre-operational activities continues to represent, however, NFS' best estimate as to its total costs for such purpose, particularly since the elimination of sodium bonded fuels from initial facilities the has substantially reduced /uncertaintion of such sce-operational re-quirements. This included, for example, a projected schedule of 46 salaried staff personnel to be made available from as early as six
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months from start-up time as well as 83 other staff on the plant's wage payroll for varying periods (averaging 2 months) prior to start-up. In addition, provision was made for necessary pre-operational aspects such as supplies, utilities, ' taxes, insurance and miscellaneous requirements during this period.* It also included funds to cover the further costs of AEC licensing activities and the negotiations for processing contracts with the AEC and a number of utility companies, bearing in mind that such expenses prior to December 1, 1962 were not borne by NFb nor to be reimbursed by it to W. R. Grace & Co. The projected $625,000. represents the total projected costs of all of these anticipated pre-operational needs and activities. ,
NFS continues to believe that its pre-operational activities can and will be carried out at a cost within the pro-jected total of $625,000, specifically contepplated, and certainly within the limit of the $1,400,000. now available for this purpose.
At the same time, however, in the interests of expediting its application and of quickly resolving any question of adequate funds in this area, NFS has in line with its indicated general policy also provided an additional contingency fund of $2,000,000. to be available to meet any and all pre-operational expenses which might require expenditures in excess of the $1,400,000. already available.
It is believed that the overall total of $3,400,000. now available for this pre-operational aspect represents the upper limit of any
- NFS provision for interest costs during construction was separately provided for (see page 6, above) and need not be included here.
C. (E and all expenses which might conceivably occur prior to plant start-up and, accordingly, that no question may reasonably be raised con-cernin6 the adequacy of funds for this purpose. It is finally pointed out, however, that there are other contingency funds totalling at least from 1 to 1-1/2 million dollars which would also be available for this as well as any other construction purpose should one speculatively assune even a greater need for pre-operationa1 funds.
The final and overall contingency of $1,000,000. shown to be available in Annex 3 for any and all project needs represents nothing more than a further availability of funds likewise designed to resolve any and all questions concerning financial capacity.
NFS does not believe that this fund will be required to be utilized any more than the other provided contingency funds. It will, however, be available . There is no basic reason for so j
designating the specific sum of $1,000,000. for this purptse. It simply represente the remaining balance of an otherwise ample
! financial picture that is further available above and beyond those other contingency funds of some 2-1/2 million dollars specifically made available for other more particular purposes.
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- In light of the financial dsta previously furnished as well as that contained herein, applicant NFS accordingly submits that it i
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is financially qualified to design, construct and operate the proposed production facility and that the Commission should forthwith so find.
Respectfully submitted,
. NUCLEAR FUEL SERVICES, INC.
By !
T. C. Runion, President Arthur Stambler SCHARFELD, BECHHOEFER, BARON & STAMBLER Attorneys for applicant NFS Subscribed and sworn tp before me this J # tL day of 92h eb , 1963
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[ COPY]
BECHTEL CORPORATION Engineers - Constructors 485 Lexington Avenue . . . . New York 17, N. Y.
March 15, 1963 Mr. T. C. Run*on .
Nuclear Fuel' Services, Inc.
Room 212, Barr Building 910 Seventeenth Street N. W.
Washington 6, D. C.
Subject:
Spent Nuclear Fuel Plant Bechtel Job No. 4413
Dear Mr. Runion:
This is to advise you of the results of the e<3timate made by our company on the cost of the design and construction of the NFS Spent Nuclear Fuel Processing Plant at Catturaugus County in Upper New York State.
We have estimated the total cost of the project which includes all aspectc of design and construction as well as related site improve-ments to be $24,550,000. This estimate is based upon a 1etailed analysis by us of all elements of the proposed facilities.
As we have indicated to you in earlier correspondence, we are pre-pared to give you a fixed price for the major portions of the facilities amounting to $21,600,000. The remaining portion of the total cost includes:
(a) $990,000 which is our best estimate of cost on
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certain parts of the facility principally the mechanical head end which cost we are not prepared to include in our fixed price at this time because the engineering on the details of these facilities has not proceeded to a point from which an equitable fixed price can be quoted. How-ever, the engineering has proceeded far enough to permit us to make the above estimate with confidence as to its
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BECHTEL CORPORATION Mr. T. C. Runion March 15, 1963 Nuclear Fuel Services, Inc. Page Two accuracy. As you know, we have recommended a con-tingency allowance of fifty percent (50%) of the above amount or $495,000; thus, we believe the total of
$1,485,000 to be the outside limit of any possible over-ride for this portion of the facility.
(b) $1,465,000 to cover the estimated cost of certain related facilities to be provided by NFS which' includes a railroad spur, water lines, fencing, and ana-lytical, office, mobile, health and safety equipment.
As indicated earlier, we Were prepared to include this amount in our fixed price if NFS had requested us to provide these facilities.
The fixed price which we have quoted for the plant designed to meet your criteria is qualified only by the following:
(1) it includes no allowance for man-made ob-structions below ground.
(2) it excludes any increased cost resulting from delays and temporary suspension of work caused by any account or omission of NFS including its failure to obtain permits or license from the AEC to proceed with the work. ,
We trust that the above provides you with the necessary information as to our estimate of the plant cost, the basis for the estimate and the firmness of the estimate.
, We understand that you wish to present this information to the AEC
! in connection with your license application.
I Yours sincerely, BECHTEL CORPORATION
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MdS:his Martin de Simo
New Annex 13
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BECHTEL. CORPORATION Engineers - Constructors 485 Lexington Avenue . . . . New York 17, N. Y.
March 18, 1963 Mr. T. C. Runion Nuclear Fuel Services, Inc.
Room 212, Barr Building 910 Seventeenth Street, N. W.
Vsshington 6, D. C.
Dear Mr. Runion:
At your request, we are enclosing herewith a reproduction of the pertinent pages of the latest Dun & Bradstreet Report on Bechtel Corporation including the consolidated balance sheet of the company for the years of 1959 - 1961 prepared by Dun & Bradstreet on the basis of information submitted to them by our Financial Vice Presi-dent, R. D. Grammater.
As you know, the Bechtel Corporation is a privately owned company and does not publish a balance sheet.
We understand that this information will be used solely to illustrate the financial capabilities of Bechtel Corporation to the A.E.C. in.
connection with the lump sum agreement existing between NFS and Bechtel for designing and constructing a spent nuclear fuel recovery plant.
Yours very sincerely, BECHTEL CORPORATICN l
/s/
Martin de Simo MdS:his Enclosure
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ANALYTICAL REPORT DUN & BRADSTREET, INC.
A - AD June 14, 1962 N 16x21 BECHTEL CORPORATION ENGINEERS-CONSTRUCTORS 1898 Aa Al Also Branches 4
220 BUSH STREET MILLS BUILDING - 7th & 8th FLOORS TRADE DISC-PPT (AND BRANCHES) NET REVENUE EXCESS OF SAN FRANCISCO, CALIFORNIA $250,000,000 Annually (Consoli-dated)
WORTH $38,046,925 EMPLYS IN EXCESS OF 3,000
SUMMARY
THIS CORPORATION IS ESSENTIALLY A CONTINUATION OF A BUSINESS
- l ESTABLISHED BY WARREN A. BECHTEL, SR., PRIOR TO 1900. THE ~
COMPANY, TOGETHER WITH ITS SUBSIDIARIES AND RELATED ORGANIZA-l
' TIONS, HOLDS AN ENVIABLE POSITION INTERNATIONALLY AS ONE OF THE LARGEST ENGINEERING AND CONSTRUCTION GROUPS. INTERNAL FINANCIAL CONDITION HAS BEEN CONSISTENTLY STRONG, WITH MARKED PROGRESS REGISTERED OVER THE YEARS THROUGH RETAINED EARNINGS.
BANK RELATIONS ARE FAVORABLE, SUBSTANTIAL ACCOMMODATIONS READILY AVAILABLE, BUT NOT UTILIZED IN RECENT YEARS.
TRADE OWE P DUE TERMS IIC[ JAN 26 1962 SOLD
$ 39,000 $ 1/2-20-30 Disc Over 3 yrs.to 11-61 500 2-20-60 Disc Over 3 yrs.to 8-61 100 2-10-30 Disc 1 yr. to 4-19-61 5,000 Disc-Ppt 250,000 50,000 30 Ppt Over 3 yrs. to Current 29,000 Cash Ppt 1 yr.
5,000 1/2 10-30 Ppt Over 3 yrs..
100 BANKING Principal relationships are maintained with three San Fran-cisco banks as well as other domestic and foreign banks.
- l. Substantial cash balances are maintained. No requests for j accommodations recently. Relationships are termed excellent in all quarters.
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CURRENT l On May 31, 1962, R. D. Grammater, Vice-President and Treasurer, j stated that operations of the company for the durrent year are
' continuing at high levels and profitable, and are being con-ducted without utilization of banking accommodations. The internal condition of the business is basically unchanged as compared to the fiscal figures of December 31, 1961.
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. .. .. c BECHTEL CORPORATION SAN FRANCISCO, CALIF. A CD Page 1 CONSOLIDATED F3 SCAL D6e. 31 1959 Dec.31~I9DU Dc'c7 1 1961_
Cash $ 18,335,048 $ 25,521,889 23,2Q7,453 Notes Receivable ) 30,175,073 ) 34,489,705 52,3e3,6SO Accounts Receivable ) )
Joint Ventures & P. S.
Agreements 796,660 1,336,945 1,551,371 U. 3. Government Securities 1,363,071 1,443,411 597,077 TOTAL CURRENT ASSETS 50,669,852 $ 62,791,950 $ 77, 739',581 Fixed Assets 5,365,581 7,898,499 10,067,446 Investments 10,000 210,150 349,593 Prepaid and Deferred 437,137 497,350 820,153 TOTAL ASSETS $ 56,482,570 $ 71,397,949 $ 88,976,773 Accounts Payable $ 9,096,590 $ 14,312,196 $ 16,940,785 Retainages & Subcontracts 2,077,200 3,085,838 3,161,555 Accruals & Taxes 7,941,337 11,555,915 11,828,289 Advances & Billings 4,063,951 4,459,051 11,748,168 TOTAL CURRENT LIABILITIES 23,179,078 33,413,000 $ 43,678,797 Loan Payable 250,000 250,000 ---
Minority Interests 137,465 522,602 4,251,051 Reserve-contingencies 3,000,000 3,000,000 3,000,000 Preferred Stock 4,639,950 .4,496,175 4,358,488 Common Stock 3,579,375 3,579,375 3,451,625 Paid in Surplus 810,395 810,395 810,395 Earned Surplus 20,886,307 25,326,402 29,426,417
.- TOTAL LIABILITIES $ 56,482,570 $ 71,397,949 _$ 88,976,773 NET WORKING CAPITAL $ 27,490,774 $ 29,378,950 $ 34,060,784 CURRENT RATIO 2.19 1.88 1 78 TANGIBLE NET WORTH 29,916,027 34;212,347 38,046,925 CENTS OMITTED. Fiscal figures at December 31, 1961, prepared frou financial statements submitted directly by R. D. Grammater. Accountants Lybrand, Ross Bros . & Montgomery, Certified Public Accountants, San
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- BECHTEL CORPORATION c SAN FRANCISCO, CALIF. A CD Page 2 Francisco. Footnotes to statement includes: "The above consolidated balance sheet includes the accounts of Bechtel Corporation and its domestic and foreign subsidiaries and sponsored joint ventures which are owned Sof,or more by the constituent companies. The accounts relating to all foreisa operations not kept in the United States Dollars, except for those of the Canadian subsidiary, have been translated at appro::icate rates of e:: change in effect at December 31,1961, or at contractual rates of exchange where applicable. As for the Canadian subsidiary, net current assets have been
.- translated at the rate in effect at December 31, 1961."
"Bechtel Corporation has guaranteed the performance of certain contracts entered into by associated enterprises".
"The Reserve for Contingencies was provided by charges to Earned Surplus for unforeseeable liabilities which may arise in connection with the design, construction or other per-formance under contracts". Uc indicated Reserve for Doubtful Accounts Receivable. Fixed Assets are after Allowance for Depreciation of $4,787,252.
ANALYSIS Investments at December 31, 1961 included:
Classified among Current Assets:
Non-Sponsored Joint Ventures and Profit Sharing Agreements (Undistributed Investments and Earnings) $1,551,371 As pointed out above, this operation continues activity dating back to 1898. The corporation, together with its subsidiaries and related organi ations has long held an enviable position as a World leader in the engineering and construction field. While operating details are not furnished; it is directly stated that annual volume is currently in excess of $250,000,000 on a consolidated basis and productive of favorable profits. The internal condition of The business has been consistently strong; steady increases in Tangible Net Uorth have been effected through at Le ast partial earn-ings retentions; and operations in recent years have been conducted without utilization of bank financing.
The foregoing comparative fiscal statements are representa-tive of these comments. Substantial cash balances are con-sistently maintained, working funds are in favorable distri-bution and indebtedness in proper alignment for an operation of this nature.
MANAGEMENT S. D. Bechtel ,Chmn of Board S. D. Bechtcl, Jr. -President W. E. Waste -Exec Vice Pres J. P. Yates .-Exec Vice Pres J. R. Kiely -Sr. Vice Pres J.W. Komes -Sr Vice Pres Charles T. Drancy-Vice Pres R. D. Grammater -Vice Pres-Treas J. F. O'Connell -Vice Pres W. R. Ayers -Vice Pres-Sec'y R. A. Bowman -Vice Pres J. P. Buehler -Vice Pres I. R. Ceraco -Vice Pres W. Kenneth Davis -Vice Pres Martin de Simo -Vice Pres E. J. Garbarini -Vice Pres L. J. Kelly -Vice Pres. A. T. Krook -Vice Pres