UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended Commission file number
June 30, 1998 000-23943
PETER KIEWIT SONS', INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1842817
(State of Incorporation) (I.R.S. Employer Identification No.)
Kiewit Plaza, Omaha Nebraska 68131
(Address of principal executive offices) (Zip Code)
(402) 342-2052
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of each of the registrant's classes
of common stock as of August 14, 1998:
Title of Class Shares Outstanding
Common Stock, $0.01 par value 8,942,045
PETER KIEWIT SONS', INC.
Index
Page
______________________________________________________________________________
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
Consolidated Condensed Statements of Earnings for the three months
ended June 30, 1998 and 1997 2
Consolidated Condensed Balance Sheets as of June 30, 1998 and
December 27, 1997 3
Consolidated Condensed Statements of Cash Flows for the three
months ended June 30, 1998 and 1997 4
Notes to Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 10
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K. 15
Signatures 15
Index to Exhibits 16
_____________________________________________________________________________
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Statements of Earnings
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
(dollars in millions, except per share data)
Revenue $ 838 $ 569 $ 1,570 $1,047
Cost of Revenue (766) (496) (1,469) (942)
---- ---- ------ -----
72 73 101 105
General and Administrative Expenses (40) (32) (78) (64)
Operating Earnings 32 41 23 41
Other Income (Expense):
Investment Income, net 3 5 6 8
Interest Expense, net (1) (1) (1) (1)
Other, net 16 13 28 35
---- ---- ---- ----
18 17 33 42
---- ---- ---- ----
Earnings Before Income Taxes 50 58 56 83
Provision for Income Taxes (20) (23) (22) (33)
---- ---- ---- ----
Net Earnings $ 30 $ 35 $ 34 $ 50
==== ==== ==== ====
Net Earnings per Share:
Basic $3.92 $3.70 $4.27 $5.34
==== ==== ==== ====
Diluted $3.87 $3.55 $4.22 $5.13
==== ==== ==== ====
_____________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Balance Sheets
June 30, December 27,
1998 1997
(dollars in millions) (unaudited)
______________________________________________________________________________
Assets
Current Assets:
Cash and cash equivalents $ 165 $ 232
Marketable securities 23 26
Receivables, less allowance of $9 and $9 473 430
Costs and earnings in excess of
billings on uncompleted contracts 118 119
Investment in construction joint ventures 145 176
Deferred income taxes 68 61
Other 14 13
----- -----
Total Current Assets 1,006 1,057
Property, Plant and Equipment, less accumulated
depreciation and amortization of $460 and $446 216 197
Other Assets 84 87
----- ------
$1,306 $1,341
===== =====
Liabilities and Redeemable Common Stock
Current Liabilities:
Accounts payable, including retainage
of $41 and $37 $ 204 $ 208
Current portion of long-term debt - 5
Accrued construction costs and billings in excess
of revenue on uncompleted contracts 268 217
Accrued insurance costs 83 76
Other 72 73
----- -----
Total Current Liabilities 627 579
Long-term debt, less current portion 13 22
Other Liabilities 74 77
Minority Interest 11 11
----- -----
Total Liabilities 725 689
Redeemable Common Stock ($425 million aggregate
Redemption value in 1998):
Common stock, par $0.01 and $0.0625,
8,428,195 and 10,132,343 shares outstanding
in 1998 and 1997, respectively - 1
Additional paid in capital 139 116
Foreign currency adjustment (7) (7)
Net unrealized holding loss (11) (11)
Retained earnings 460 553
----- -----
Total Redeemable Common Stock 581 652
----- -----
$1,306 $1,341
===== =====
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
----------------
(dollars in millions) 1998 1997
______________________________________________________________________________
Cash flows from operations:
Net cash provided by operations $ 100 $ 37
Cash flows from investing activities:
Proceeds from sales and maturities of
marketable securities 10 44
Purchases of marketable securities (7) (22)
Proceeds from sales of property, plant and equipment 8 25
Acquisitions/Investments 3 (18)
Capital expenditures (54) (62)
---- ----
Net cash used in investing activities (40) (33)
Cash flows from financing activities:
Short-term debt borrowing 20 2
Payments on short-term debt (25) -
Issuance of common stock 41 34
Repurchases of common stock (28) (1)
Dividends paid (13) (13)
Exchange of Class C Stock for Class D Stock, net (122) (72)
---- ----
Net cash used in financing activities (127) (50)
---- ----
Net decrease in cash and cash equivalents (67) (46)
Cash and cash equivalents at beginning of period 232 173
---- ----
Cash and cash equivalents at end of period $ 165 $ 127
==== ====
_____________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
1. Basis of Presentation:
Peter Kiewit Sons', Inc. (the "Company") was formed by its former parent,
Level 3 Communications, Inc. (formerly Peter Kiewit Sons', Inc.) ("Level
3"), in connection with a transaction (the "Transaction") intended to
separate the construction business and the diversified business of Level 3
into two independent companies. On March 31, 1998, pursuant to the terms of a
Separation Agreement between the Company, Level 3 and certain other parties
(the "Separation Agreement"), Level 3 consummated the Transaction by: (i)
transferring 100 shares of the $100 par value common stock ("KCG Stock") of
Kiewit Construction Group Inc. ("KCG"), representing all of the issued and
outstanding shares of KCG Stock, as well as certain other assets and
liabilities related to the construction and mining business which together
comprised the Construction and Mining Group (the "Construction & Mining
Group"), to the Company in exchange for 7,677,920 shares of the $.01 par
value common stock of the Company ("Common Stock") (125 million shares
authorized) and (ii) distributing 100% of its shares of the Common Stock to
the holders of Level 3's $0.0625 par value Class C Construction & Mining Group
Restricted Redeemable Convertible Exchangeable Common Stock ("Class C
Stock") as of March 31, 1998, in exchange for such shares of Class C Stock.
Prior to the Transaction, the Company was a wholly-owned subsidiary of Level
3. As a result of the Transaction, the Company is now owned by the former
holders of Level 3's Class C Stock. As the Construction & Mining Group
comprised all of the net assets and operations of the Company at the time of
the Transaction, the Construction & Mining Group is the Company's predecessor.
Thus, the term "The Company", as used herein, refers to Peter Kiewit Sons',
Inc., its predecessor, and its consolidated subsidiaries.
The consolidated condensed balance sheet of the Company at December 27, 1997
has been condensed from the Construction & Mining Group's audited balance
sheet as of that date. All other financial statements contained herein are
unaudited and, in the opinion of management, contain all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of financial position and results of operations for the periods
presented. The Company's accounting policies and certain other disclosures
are set forth in the notes to the financial statements of the Construction and
Mining Group for the year ended December 27, 1997 contained in the Company's
Current Report on Form 8-K, dated March 27, 1998, filed April 13, 1998 and
amended May 1, 1998.
Receivables at June 30, 1998 and December 27, 1997 include approximately $117
million and $114 million, respectively of retainage on uncompleted projects,
the majority of which is expected to be collected within one year. Included
in the retainage amounts are $43 million and $44 million of securities which
are being held by the owners of various construction projects in lieu of
retainage.
The results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
When appropriate, items within the consolidated condensed financial statements
have been reclassified in the previous periods to conform to current year
presentation.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
2. Earnings Per Share:
Basic earnings per share have been computed using the weighted average number
of shares outstanding during each period. Diluted earnings give effect to
convertible debentures considered to be dilutive common stock equivalents.
Dilutive potential common shares are calculated in accordance with the "if
converted" method. This method assumes that the after-tax interest expense
associated with the debentures is an addition to income and the debentures are
converted into equity with the resulting common shares being aggregated with
the weighted average shares outstanding.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1998 1997 1998 1997
--------------- ----------------
Net earnings available to common
shareholders (in millions) $ 30 $ 35 $ 34 $ 50
Add: Interest expense, net of tax effect,
associated with convertible debentures* - - - -
Net earnings for diluted shares $ 30 $ 35 $ 34 $ 50
Total number of weighted average shares
outstanding used to compute basic
earnings per share (in thousands) 7,657 9,301 7,865 9,308
Additional dilutive shares assuming
conversion of convertible debentures 91 437 91 437
Total number of shares used to compute
diluted earnings per share 7,748 9,738 7,956 9,745
Net earnings
Basic earnings per share $ 3.92 $3.70 $4.27 $5.34
Diluted earnings per share $ 3.87 $3.55 $4.22 $5.13
*Interest expense attributable to convertible debentures was less than
$.5 million in 1998 and 1997.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
3. Comprehensive Income:
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income".
SFAS 130 establishes new rules for the reporting of comprehensive income and
its components; however the adoption of the standard had no impact on the
Company's current or previously reported net income or redeemable common
stock. The standard requires the display and reporting of comprehensive
income, which includes all changes in stockholders' equity with the exception
of additional investments by stockholders or distributions to stockholders.
Comprehensive income for the Company includes net income, unrealized gains
(losses) on securities, and foreign currency translation adjustments, which
are charged or credited to the cumulative translation account within
redeemable common stock. Comprehensive income for the six months ended June
30, 1998 and 1997 was as follows:
Three Mos. Ended Six Mos. Ended
June 30, June 30,
---------------- ---------------
(dollars in millions) 1998 1997 1998 1997
_____________________________________________________________________________
Net Earnings $30 $35 $34 $50
Other comprehensive income, before tax:
Foreign currency translation adjustments (2) - - (2)
Unrealized gains (losses)
arising during period (4) (14) - (10)
Income tax (expense) benefit related to
items of other comprehensive income 3 6 - 5
Comprehensive Income $27 $ 27 $34 $ 43
4. Preferred Stock:
The Company has authorized 250,000 shares of no par value Preferred Stock, the
terms of which shall be determined from time-to-time by the board of
directors. No shares of Preferred Stock are currently issued and outstanding.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
5. Other Matters:
The Company is involved in various lawsuits, claims and regulatory proceedings
incidental to its business. Management believes that any resulting liability,
beyond that provided, should not materially affect the Company's financial
position, future results of operations or future cash flows.
In connection with the Transaction, the Company and Level 3 entered into
various agreements including a Separation Agreement, a Tax-Sharing Agreement
and an amended Mine Management Agreement.
The Separation Agreement provides for the allocation of certain risks and
responsibilities between Level 3 and the Company and for cross-
indemnifications that are intended to allocate financial responsibility to the
Company for liabilities arising out of the construction business and to
allocate to Level 3 financial responsibility for liabilities arising out of
the non-construction businesses. The Separation Agreement also allocates
certain corporate-level risk exposures not readily allocable to either the
construction businesses or the non-construction businesses.
Under the Tax Sharing Agreement, with respect to periods, or portions thereof,
ending on or before the closing date of the Transaction, Level 3 and the
Company generally will be responsible for paying the taxes relating to such
periods, including any subsequent adjustments resulting from the
redetermination of such tax liabilities by the applicable taxing authorities,
that are allocable to the non-construction businesses and construction
businesses, respectively. The Tax Sharing Agreement also provides that Level
3 and the Company will indemnify the other from certain taxes and expenses
that would be assessed if the Transaction was determined to be taxable, but
solely to the extent that such determination arose out of the breach by Level
3 or the Company, respectively, of certain representations made to the
Internal Revenue Service in connection with the ruling issued with respect to
the Transaction or made in the Tax-Sharing Agreement. If the Transaction were
determined to be taxable for any other reason, those taxes ("Transaction
Taxes") would be allocated 82.5% to Level 3 and 17.5% to the Company.
Finally, under certain circumstances, Level 3 would make certain liquidated
damage payments to the Company if the Transaction was determined to be taxable
in order to take into account the fact that the Transaction is taxable to the
holders of Common Stock.
Additionally, the Mine Management Agreement, pursuant to which the Company
provides mine management and related services to Level 3's coal mining
operations, was amended to provide the Company with a right of offer in the
event that Level 3 would determine to sell any or all of its coal mining
properties. Under the right of offer, Level 3 would be required to offer to
sell those properties to the Company at the price that Level 3 would seek to
sell the properties to a third party. If the Company declined to purchase the
properties at that price, Level 3 would be free to sell them to a third party
for an amount greater than or equal to that price. If Level 3 sold the
properties to a third party, thus terminating the Mine Management Agreement,
it would be required to pay the Company an amount equal to the discounted
present value of the Mine Management Agreement, determined, if necessary, by
an appraisal process.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
Prior to the consummation of the Transaction, Level 3's certificate of
incorporation gave stockholders the right to exchange their Class C Stock for
Level 3's Class D Diversified Group Convertible Exchangeable Common Stock
("Class D Stock") under a set conversion formula. That right was eliminated
as a result of the Transaction. To replace that conversion right, Class C
stockholders received 6.5 million shares of Level 3's new Class R Convertible
Common Stock ("Class R Stock") in January 1998, which was convertible into
Level 3's Common Stock in accordance with terms ratified by stockholders in
December 1997.
In May 1998, the Level 3 Board of Directors approved a plan to force
conversion of all shares of Class R Stock outstanding, as of May 15, 1998. As
a result of such conversion and as provided in the Separation Agreement and
Tax Sharing Agreement, certain adjustments were made to the cost sharing and
risk allocation provisions of such agreements, including, among others, the
payment by the Company of approximately $5 million in additional third party
costs and expenses associated with the Transaction, and the allocation of the
Transaction Taxes, 50% to Level 3 and 50% to the Company.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company must adopt this statement
when preparing financial statements for the year ended December 26, 1998.
Management is reviewing the requirements of this Statement and believes it
will change the extent of its current business segment disclosure. This
Statement does not impact the basic consolidated financial statements; it
affects the presentation of segment information in the Notes to the
Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations - Second Quarter 1998 vs. Second Quarter 1997
This document contains forward looking statements and information that are
based on the beliefs of management as well as assumptions made by and
information currently available to the Company. When used in this document,
the words "anticipate," "believe," "estimate" and "expect" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current
views of the Company with respect to future events and are subject to certain
risks or uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.
Revenue from each of the Company's businesses for the three months ended
June 30, 1998 was (in millions):
Three Months Ended
June 30,
------------------
1998 1997
----- -----
Construction $ 745 $ 494
Materials 93 75
----- ----
$ 838 $ 569
===== ====
Construction. Revenues for the construction business increased $251 million or
50.8% for the three months ended June 30, 1998 as compared to the same time
period in 1997. The increase in ownership of ME Holding Inc. (ME) from 49% at
June 30, 1997 to 80% caused the Company to consolidate ME. This accounted for
$97 million of the increase. Another major factor was the "I-15" project, a
$1.4 billion ($780 million the Company's share) design-build joint venture to
reconstruct 16 miles of interstate through the Salt Lake City, Utah area which
had not earned any revenue at this time last year. Several new projects
account for the remainder of the increase.
Contract backlog at June 30, 1998 was $5.3 billion of which 5% is attributable
to foreign operations located in Canada and Indonesia. Domestic projects are
spread geographically throughout the U.S. The increase in backlog from the
previous quarter is primarily attributed to a major communications cable
installation project.
Margins on construction projects as a percentage of revenue for the three
months ended June 30, 1998 decreased to 8.7% from 13.3% for the same time
period in 1997. The favorable resolution of project uncertainties, change
order settlements and bonuses for cost savings and early completion, increased
margins for the second quarter of 1997. Margins for the second quarters of
1995 and 1996 were 8.2% and 9% respectively.
In September of 1997, a Presidential Decree was issued in Indonesia affecting
the construction and start-up dates for a number of private power projects.
As a result of the Decree and the continued fluctuations in the value of the
Indonesian currency, several projects in Indonesia for a U.S. client, included
in contract backlog at $153 million, could be terminated as a result of
actions by the Indonesian government. The Company does not anticipate that
termination will have a material adverse effect as payment has been received
for all work performed and the costs of demobilizing the projects would not be
significant.
PETER KIEWIT SONS', INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Materials. Revenues for the materials business were up 24% for the three
months ended June 30, 1998 as compared to the same time period in 1997.
Greater sales volume and higher average selling prices for aggregates, ready
mix concrete and asphalt products resulted in the increase.
Margins from materials sales as a percentage of revenue for the three months
ended June 30, 1998 decreased slightly by 1.8% from the same period in 1997.
Increased sales prices were offset by higher cement costs which caused the
margin to remain relatively stable for the aggregates, ready mix concrete and
asphalt products. The decrease in margins is a result of operating losses for
the Oak Mountain Coal operations. The investment in Oak Mountain was sold on
June 9, 1998. The Oak Mountain investment was previously written off as an
impaired asset in December 1997. Thus, no gain or loss resulted from the
sale.
General and Administrative Expenses. General and administrative expenses
increased 25% in 1998. The increase was attributable to increased costs
related to higher Construction and Materials revenues. G & A expense, as a
percent of revenue, decreased from 5.6% in 1997 to 4.8% in 1998 as a
proportionate increase in administration costs were not necessary to support
the Company's revenue growth. The consolidation of ME in the 1998 financial
statements versus the equity method in 1997 also contributed to the increase.
Investment Income, net. The decline in investment income is due to the
consolidation of ME in the 1998 financial statements versus use of the equity
method in 1997.
Other, net. Other income is comprised primarily of mine management fee
income from Level 3 and gains and losses on the disposition of property, plant
and equipment and other assets.
The mines managed by the Company for Level 3 earn the majority of their
revenues under long-term contracts. The remainder of the mines' sales are
made on the spot market where prices are substantially lower than those of the
long-term contracts. As the long-term contracts expire over the next two to
five years, operating earnings at the mines will decrease substantially.
Since the mine management fee is based upon the operating earnings of the
mines, the fee will be similarly affected.
PETER KIEWIT SONS', INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations - Six Months 1998 vs. Six Months 1997
Revenue from each of the Company's businesses for the six months ended
June 30, 1998 was (in millions):
Six Months Ended
June 30,
----------------
1998 1997
----- -----
Construction $1,406 $ 918
Materials 164 129
----- -----
$1,570 $1,047
===== =====
Construction. Revenues for the construction business increased $488 million
or 53% from the same time period in 1997. The increase in ownership of ME
from 49% at June 30, 1997 to 80% caused the Company to consolidate ME. This
accounted for $169 million of the increase. Another major factor was the "I-
15" project, a $1.4 billion ($780 million the Company's share) design-build
joint venture to reconstruct 16 miles of interstate through the Salt Lake
City, Utah area which had not earned any revenue at this time last year.
Several new projects account for the remainder of the increase.
Margins on construction projects as a percentage of revenue for the six months
ended June 30, 1998 decreased to 6.4% from 10.5% for the same time period in
1997. The favorable resolution of project uncertainties, change order
settlements and bonuses for cost savings and early completion increased
margins for the first six months of 1997. Margins in the first six months of
1995 and 1996 were 5.5% and 7% respectively.
In September of 1997, a Presidential Decree was issued in Indonesia affecting
the construction and start-up dates for a number of private power projects.
As a result of the Decree and the continued fluctuations in the value of the
Indonesian currency, several projects in Indonesia for a U.S. client, included
in contract backlog at $153 million, could be terminated as a result of
actions by the Indonesian government. The Company does not anticipate that
termination will have a material adverse effect as payment has been received
for all work performed and the costs of demobilizing the projects would not be
significant.
PETER KIEWIT SONS', INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Materials. Revenues for the materials business were up 27% for the six months
ended June 30, 1998 as compared to the same time period in 1997. Greater
sales volume and higher average selling prices for aggregates, ready mix
concrete and asphalt products contributed to the majority of the increase.
The inclusion of six months of revenues from the Oak Mountain Coal Mine
compared to only three months in 1997 also contributed to the increase.
Margins from materials sales as a percentage of revenue for the six months
ended June 30, 1998 remained the same as the six months ended June 30, 1997.
The increased sales and prices for aggregates, ready mix concrete and asphalt
products were offset by higher cement costs causing the margin to remain
relatively stable. The investment in the Oak Mountain Coal Mine was sold on
June 9, 1998. The Oak Mountain investment was previously written off as an
impaired asset in December 1997. Thus, no gain or loss resulted from the
sale.
General and Administrative Expenses. General and administrative expenses
increased 22% in 1998. The increase was attributable to increased costs
related to higher Construction and Materials revenues. G & A expense, as a
percent of revenue, decreased from 6.1% in 1997 to 5.0% in 1998 as a
proportionate increase in administration costs were not necessary to support
the Company's revenue growth The consolidation of ME in the 1998 financial
statements versus the equity method in 1997 also contributed to the increase.
Investment Income, net. The decline in investment income is due to the
consolidation of ME in the 1998 financial statements versus the equity method
in 1997.
Other, net. Other income is primarily comprised of mine management fee
income from Level 3 and gains and losses on the disposition of property, plant
and equipment and other assets. The $7 million decline results from a
decrease in the amount of equipment sold during 1998.
The mines managed by the Company for Level 3 earn the majority of their
revenues under long-term contracts. The remainder of the mines' sales are
made on the spot market where prices are substantially lower than those of the
long-term contracts. As the long-term contracts expire over the next two to
five years, operating earnings at the mines will decrease substantially.
Since the mine management fee is based upon the operating earnings of the
mines, the fee will be similarly affected.
Financial Condition - June 30, 1998 vs. December 27, 1997
The Company's working capital decreased $99 million or 21% during the first
six months of 1998. The decline was primarily due to cash used when
shareholders elected to exchange their Class C Stock for Class D Stock,
totaling $122 million, repurchases of Class C Stock of $28 million, dividends
of $13 million and repayment of short-term debt of $25 million. In addition,
the Company had capital expenditures of $54 million. Partially funding these
outflows was $100 million of cash provided by operations, of which $31 million
was provided by distributions of excess cash from construction joint ventures,
the issuance of common stock of $41 million and $20 million of short-term
borrowing.
The Company anticipates investing between $40 and $75 million annually in its
construction business. In addition to normal spending, the Company expects to
make significant investments in new construction joint ventures in 1998. The
Company continues to explore opportunities to acquire additional businesses.
Other long-term liquidity uses include the payment of income taxes and
repurchases of common stock and the payment of dividends, including an $.80
per share dividend declared in April and paid in May, 1998. The Company's
current financial condition and borrowing capacity together with anticipated
cash flows from operations should be sufficient for immediate cash
requirements and future investing activities.
PETER KIEWIT SONS', INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company must adopt this statement
when preparing financial statements for the year ended December 26, 1998.
Management is reviewing the requirements of this Statement and believes it
will change the extent of its current business segment disclosure. This
Statement does not impact the basic consolidated financial statements; it
affects the presentation of segment information in the Notes to the
Consolidated Financial Statements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit
Number Description
------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K.
Current Report on Form 8-K dated March 27, 1998, reporting that the
Company completed the acquisition of the Construction and Mining Business of
Level 3 Communications, Inc. and certain other matters, which Report was filed
with the Securities and Exchange Commission on April 13, 1998.
Amendment to Current Report on Form 8-K/A dated March 27, 1998,
filing financial statements of the Construction and Mining Business of Level 3
Communications, Inc., which Report was filed with the Securities and Exchange
Commission on May 1, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PETER KIEWIT SONS', INC.
Date: August 14, 1998 /s/ Kenneth M. Jantz
---------------------
Kenneth M. Jantz
Vice President and
Principal Financial Officer
PETER KIEWIT SONS', INC.
INDEX TO EXHIBITS
Exhibit
No.
- -------
27 Financial Data Schedule (For electronic filing purposes only)
8
21
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0
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