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10-K - FORM 10-K - MICHAEL BAKER CORP | l42049e10vk.htm |
EX-99.2 - EX-99.2 - MICHAEL BAKER CORP | l42049exv99w2.htm |
EX-23.1 - EX-23.1 - MICHAEL BAKER CORP | l42049exv23w1.htm |
EX-23.2 - EX-23.2 - MICHAEL BAKER CORP | l42049exv23w2.htm |
EX-31.2 - EX-31.2 - MICHAEL BAKER CORP | l42049exv31w2.htm |
EX-31.1 - EX-31.1 - MICHAEL BAKER CORP | l42049exv31w1.htm |
EX-10.1 - EX-10.1 - MICHAEL BAKER CORP | l42049exv10w1.htm |
EX-32.1 - EX-32.1 - MICHAEL BAKER CORP | l42049exv32w1.htm |
EX-99.1 - EX-99.1 - MICHAEL BAKER CORP | l42049exv99w1.htm |
EX-13.1 - EX-13.1 - MICHAEL BAKER CORP | l42049exv13w1.htm |
EX-21.1 - EX-21.1 - MICHAEL BAKER CORP | l42049exv21w1.htm |
EX-99.4 - EX-99.4 - MICHAEL BAKER CORP | l42049exv99w4.htm |
EX-10.5.H - EX-10.5.H - MICHAEL BAKER CORP | l42049exv10w5wh.htm |
EXHIBIT 99.3
STANLEY BAKER
HILL, LLC
Beaver,
Pennsylvania
Unaudited Financial
Statements
For the years
ended December 31, 2008 and 2007
CONTENTS
Page | ||||
FINANCIAL STATEMENTS
|
||||
1 | ||||
Statements for the years ended December 31, 2008 and 2007:
|
||||
2 | ||||
3 | ||||
4 |
STANLEY BAKER
HILL, LLC
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 4,386,007 | $ | 3,434,247 | ||||
Receivables
|
22,627,433 | 14,357,702 | ||||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
476,702 | 551,923 | ||||||
Prepaid expenses
|
479,845 | 633,565 | ||||||
Total Current Assets
|
27,969,987 | 18,977,437 | ||||||
EQUIPMENT AND SOFTWARE, net
|
7,501 | 18,843 | ||||||
TOTAL ASSETS
|
$ | 27,977,488 | $ | 18,996,280 | ||||
LIABILITIES | ||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 21,433,530 | $ | 13,130,359 | ||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
942,154 | | ||||||
Other current liabilities, including accrued distributions
|
60,470 | 1,419,830 | ||||||
Total Current Liabilities
|
22,436,154 | 14,550,189 | ||||||
MEMBERS EQUITY | ||||||||
MEMBERS EQUITY
|
5,541,334 | 4,446,091 | ||||||
TOTAL LIABILITIES AND MEMBERS EQUITY
|
$ | 27,977,488 | $ | 18,996,280 | ||||
1
STANLEY BAKER
HILL, LLC
FOR THE YEARS
ENDED DECEMBER 31, 2008 AND 2007
2008 | 2007 | |||||||||||||||
Percent of |
Percent of |
|||||||||||||||
Contract |
Contract |
|||||||||||||||
Revenue |
Revenue |
|||||||||||||||
Amount | Earned | Amount | Earned | |||||||||||||
CONTRACT REVENUE EARNED
|
$ | 130,408,583 | 100.0 | % | $ | 77,226,356 | 100.0 | % | ||||||||
COST OF REVENUE EARNED
|
||||||||||||||||
Direct costs
|
70,734,042 | 54.2 | 45,261,638 | 58.6 | ||||||||||||
Indirect costs
|
49,981,006 | 38.3 | 24,971,364 | 32.3 | ||||||||||||
Gross Profit
|
9,693,535 | 7.5 | 6,993,354 | 9.1 | ||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
577,912 | 0.4 | 464,886 | 0.6 | ||||||||||||
Income From Operations
|
9,115,623 | 7.1 | 6,528,468 | 8.5 | ||||||||||||
INTEREST INCOME
|
79,620 | 0.1 | 134,685 | 0.2 | ||||||||||||
Net Income
|
9,195,243 | 7.2 | % | 6,663,153 | 8.7 | % | ||||||||||
MEMBERS EQUITY
|
||||||||||||||||
Beginning of year
|
4,446,091 | 2,366,651 | ||||||||||||||
Distributions
|
(8,100,000 | ) | (4,583,713 | ) | ||||||||||||
End of year
|
$ | 5,541,334 | $ | 4,446,091 | ||||||||||||
2
STANLEY BAKER
HILL, LLC
FOR THE YEARS
ENDED DECEMBER 31, 2008 AND 2007
2008 | 2007 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 9,195,243 | $ | 6,663,153 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation and amortization
|
19,082 | 11,944 | ||||||
Changes in assets and liabilities:
|
||||||||
Receivables
|
(8,269,731 | ) | (10,904,519 | ) | ||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
75,221 | 502,525 | ||||||
Prepaid expenses
|
153,720 | (525,688 | ) | |||||
Accounts payable
|
8,303,171 | 10,105,075 | ||||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
942,154 | | ||||||
Other current liabilities
|
(1,359,360 | ) | 1,328,593 | |||||
Net Cash Provided By Operating Activities
|
9,059,500 | 7,181,083 | ||||||
Cash Flows from Investing Activities
|
||||||||
Purchases of equipment and software
|
(7,740 | ) | (12,850 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Distributions
|
(8,100,000 | ) | (4,911,737 | ) | ||||
Net Increase In Cash And Cash Equivalents
|
951,760 | 2,256,496 | ||||||
Cash And cash equivalents
|
||||||||
Beginning of year
|
3,434,247 | 1,177,751 | ||||||
End of year
|
$ | 4,386,007 | $ | 3,434,247 | ||||
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
|
||||||||
At December 31, 2006, the Company accrued $328,025 in
distributions that were paid in 2007.
|
||||||||
See notes to financial statements.
3
STANLEY BAKER
HILL, LLC
DECEMBER 31,
2008 AND 2007
NOTE 1 | ORGANIZATION |
Stanley Baker Hill, LLC (Company) is a joint venture formed in
February 2004 between Stanley Consultants, Inc. (Stanley),
Michael Baker, Jr., Inc. (Baker) and Hill International,
Inc. (Hill). The Company provides various architect-engineer
services in Iraq for the U.S. Army Corps of Engineers
Transatlantic Program Center (U.S. Corps). The Company has
a contract for an indefinite delivery and indefinite quantity
for construction management and general architect-engineer
services for facilities in Iraq with U.S. Corps.
Anticipated completion of open contracts is likely to occur in
September 2009, barring any additional new or modification to
existing contracts obtained in 2009.
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
A summary of significant accounting policies consistently
applied by management in the preparation of the accompanying
financial statements follows:
Use of Estimates The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
Operating Cycle The Companys work is
performed under cost-plus-fee contracts and fixed-price
contracts. The length of the Companys contracts varies but
is typically less than a year. Assets and liabilities related to
long-term contracts are included in current assets and current
liabilities in the accompanying balance sheets as they will be
satisfied in the normal course of contract completion, although
that might require more than one year at times.
Cash and Cash Equivalents The Company
maintains, at various financial institutions, cash and
certificates of deposit that might exceed federally insured
amounts at times. For purposes of the statements of cash flows,
the Company considers all interest-bearing money market funds
and noninterest-bearing accounts to be cash and cash equivalents.
Revenue Recognition and Contract Accounting
The Company typically incurs direct labor costs, subcontractor
costs and certain other indirect costs (ODCs) in connection with
architect-engineer services. Contracts are structured such that
margin is earned on labor costs and not on ODCs. The Company
includes revenues related to its direct labor, subcontractors
and ODCs in its total contract revenues as long as the Company
remains responsible to the client for the acceptability of the
services provided.
The Company recognizes revenues under the
percentage-of-completion
method of accounting. Revenues for the current period on
fixed-price contracts are determined by multiplying the
estimated margin at completion for each contract by the
projects percentage of completion to date, adding labor
costs, subcontractor costs and ODCs incurred to date, and
subtracting revenues recognized in prior periods. In applying
the
percentage-of-completion
method to these contracts, the Company measures the extent of
progress toward completion as the ratio of labor costs incurred
to date over total estimated labor costs at completion. As work
is performed under contracts, estimates of the costs to complete
are regularly reviewed and updated. As changes in estimates of
total costs at completion on projects are identified,
appropriate earnings adjustments are recorded during the period
that the change is identified.
The majority of new task orders in 2008 and 2007 were
fixed-price contracts, and the remaining new task orders were
time and materials arrangements. For time and materials task
orders, revenue is recognized and billed by multiplying the
number of hours expended by our professionals in the performance
of the contract by the established billing rates.
Provisions for estimated losses on uncompleted contracts are
recorded during the period in which such losses are determined.
Revenues related to contractual claims that arise from
customer-caused delays or change orders unapproved as to both
scope and price are recorded only when the amounts have been
agreed with the client. Profit incentives
and/or award
fees are recorded as revenues when the amounts are both probable
and reasonably estimable.
4
The current asset, Costs and estimated earnings in excess
of billings on uncompleted contracts, represents revenue
recognized in excess of amounts billed. The current liability,
Billings in excess of costs and estimated earnings on
uncompleted contracts, represents amounts billed in excess
of revenue recognized.
Equipment and Leasehold Improvements
Equipment and leasehold improvements are stated at the lower of
cost or fair value. Depreciation and amortization are provided
on the straight-line method over the estimated useful lives of
the assets. Repairs and maintenance that do not extend the lives
of the applicable assets are charged to expense as incurred.
Gain or loss resulting from the retirement or other disposition
of assets is included in income.
Income Taxes The Company is organized as an
LLC and is not subject to federal or state income taxes.
Accordingly, no provision has been made for current or deferred
income taxes in these financial statements. The taxable income
of the Company is included in the tax returns of the individual
members.
Fair Value During 2008, the Company adopted
the provisions of Statement No. 157, Fair Value
Measurement (FAS 157) and Statement
No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities (FAS 159) issued by
the Financial Accounting Standards Board (FASB). The adoption of
FAS 157 and FAS 159 had no impact on its financial
statements.
Recent Accounting Pronouncements The FASB
issued Interpretation No. 48, Accounting for
Uncertainty in Income Taxes: an Interpretation of FASB Statement
No. 109 (FIN 48), which clarifies the accounting
for uncertainty in income taxes recognized in an entitys
financial statements in accordance with FASB Statement
No. 109, Accounting for Income Taxes.
FIN 48 prescribes a recognition threshold and measurement
principles for financial statement disclosure of tax positions
taken or expected to be taken on a tax return. FIN 48 is
effective for the Company for fiscal years beginning after
December 15, 2008. The Company is assessing the impact that
the adoption of FIN 48 will have on its financial
statements.
NOTE 3 | RECEIVABLES |
Receivables at December 31, 2008 and 2007 consist of the
following:
2008 | 2007 | |||||||
Contract receivables:
|
||||||||
Contracts in progress
|
$ | 22,621,058 | $ | 14,350,557 | ||||
Other receivables
|
6,375 | 7,145 | ||||||
$ | 22,627,433 | $ | 14,357,702 | |||||
NOTE 4 | COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS |
Costs incurred to date, estimated earnings and the related
progress billings to date on contracts in progress at December
31 are as follows:
2008 | 2007 | |||||||
Costs incurred on uncompleted contracts
|
$ | 89,520,628 | $ | 40,752,084 | ||||
Estimated earnings
|
74,381,259 | 27,881,450 | ||||||
Revenue recognized
|
163,901,887 | 68,633,534 | ||||||
Less Billings to date
|
164,367,339 | 68,081,611 | ||||||
Costs and estimated earnings in excess of billings on
uncompleted contracts
|
$ | (465,452 | ) | $ | 551,923 | |||
2008 | 2007 | |||||||
This information is included in the accompanying balance sheets
under the following captions:
|
||||||||
Costs and estimated earnings in excess billings on uncompleted
contracts
|
$ | 476,702 | $ | 551,923 | ||||
Billings in excess of costs and estimated earnings on
uncompleted contracts
|
(942,154 | ) | | |||||
$ | (465,452 | ) | $ | 551,923 | ||||
5
NOTE 5 | EQUIPMENT AND SOFTWARE |
Equipment and software at December 31, 2008 and 2007
consist of the following:
2008 | 2007 | |||||||
Computer hardware
|
$ | 44,071 | $ | 36,331 | ||||
Furniture and fixtures
|
2,153 | 2,153 | ||||||
38,484 | ||||||||
Less Accumulated depreciation
|
38,723 | 19,641 | ||||||
$ | 7,501 | $ | 18,843 | |||||
NOTE 6 | RELATED PARTY TRANSACTIONS |
The Company engages in significant related-party transactions as
a result of the three partners providing a majority of the costs
of contract services. In accordance with the Operating Agreement
of the Company, the members also charge the Company for time
incurred for management and administrative services at
agreed-upon
rates. A summary of the related party transactions included in
the financial statements at December 31, 2008 and 2007 is
as follows:
2008 | 2007 | |||||||||||||||
Costs of |
Costs of |
|||||||||||||||
Accounts |
Services |
Accounts |
Services |
|||||||||||||
Payable | Incurred | Payable | Incurred | |||||||||||||
Stanley
|
$ | 6,352,232 | $ | 32,843,163 | $ | 3,512,189 | $ | 16,899,473 | ||||||||
Baker
|
6,076,186 | 33,182,914 | 2,901,519 | 15,418,896 | ||||||||||||
Hill
|
6,378,192 | 32,772,740 | 3,392,107 | 15,361,446 | ||||||||||||
$ | 18,806,610 | $ | 98,798,817 | $ | 9,805,815 | $ | 47,679,815 | |||||||||
NOTE 7 | BACKLOG |
The Company had signed contracts to complete approximately
$115,394,990 of work in 2009.
NOTE 8 | COMMITMENTS AND CONTINGENCIES |
The Company is a defendant in one legal proceeding encountered
in the normal course of its business. Additionally, the Company
has received a letter threatening lawsuit over a separate
matter. In the opinion of management, based upon discussion with
counsel, the ultimate outcome of these matters will not have a
material adverse effect on the financial position or results of
operations of the Company.
6