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Request for Line of Credit

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

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Request for Line of Credit

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  1. 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

  2. Our Goal

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

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

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

  6. Management Strategy

  7. 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

  8. 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

  9. 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.

  10. Financial Position

  11. Financial Position

  12. Losses: Each Year Different • 1991 - (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

  13. Financial Position

  14. Financial Position

  15. 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

  16. 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

  17. 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

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