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UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For the fiscal year ended December 26, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from ............ to .............   001-31305
  FOSTER WHEELER AG
 (Exact name of registrant as
    specified in its charter)
  Switzerland(State or other jurisdiction of
    incorporation or organization)

98-0607469(I.R.S. Employer Identification
    No).Perryville Corporate Park, Clinton, New Jersey(Address of Principal Executive
    Offices)

08809-4000(Zip Code)    (908) 730-4000
     (Title of Each Class)

(Name of each exchange on which registered)Foster Wheeler AG,
    Registered Shares, CHF 3.00 par value

The NASDAQ Stock Market LLCFoster Wheeler AG,
    Class A Registered Share Purchase Warrants

The NASDAQ Stock Market LLC     (Title of Each Class)

(Name of each exchange on which registered)   None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    Company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE:




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##### 





FOSTER
    WHEELER AG
  EXPLANATORY
    NOTE
  Form 10-K Rule 12g-3 Form 10-K, Form 10-K.
  INDEX
   
 ITEM



PagePART I1.

Business


21A.

Risk Factors


101B.

Unresolved Staff Comments


212.

Properties


223.

Legal Proceedings


244.

Submission of Matters to a Vote of Security
    Holders


24PART II5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


256.

Selected Financial Data


287.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


307A.

Quantitative and Qualitative Disclosures about
    Market Risk


728.

Financial Statements and Supplementary Data


749.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


1429A.

Controls and Procedures


1429B.

Other Information


142PART III10.

Directors, Executive Officers and Corporate
    Governance


14311.

Executive Compensation


14312.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


14313.

Certain Relationships and Related Transactions,
    and Director Independence


14414.

Principal Accountant Fees and Services


144PART IV15.

Exhibits and Financial Statement Schedules


145EX-10.8: GUARANTEE FACILITYEX-10.26: FIRST AMENDMENT TO 1995 STOCK OPTION PLANEX-10.29: FIRST AMENDMENT TO ANNUAL EXECUTIVE SHORT-TERM INCENTIVE PLANEX-10.37: FIRST AMENDMENT TO OMNIBUS INCENTIVE PLANEX-10.41: FORM OF EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENTEX-10.43: FORM OF EMPLOYEE RESTRICTED STOCK UNIT AWARD AGREEMENTEX-10.45: FORM OF DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENTEX-10.47: FORM OF DIRECTOR RESTRICTED STOCK UNIT AGREEMENTEX-10.76: EMPLOYMENT AGREEMENTEX-10.77: EMPLOYMENT AGREEMENTEX-21.0: SUBSIDIARIESEX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-23.2: CONSENT OF ANALYSIS, RESEARCH & PLANNING CORPORATIONEX-23.3: CONSENT OF PETERSON RISK CONSULTING LLCEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION    Form 10-K Form 10-K.
 1




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PART I  ITEM 1.
    BUSINESS  General
  Form 10-K Form 10-K.
    Business
  Global
    Engineering and Construction Group Global Power Group
  gas-to-liquids
  coal-to-liquids, coal-to-chemicals
  waste-to-energy
   2




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2
  tm tm 2 2 2 2
    waste-to-energy
    Form 10-K non-U.S. operations.
  Products
    and Services
    
    Consulting  Our Global E&C Group provides
    technical and economic analyses and study reports to owners,
    investors, developers, operators and governments. These services
    include concept and feasibility studies, market studies, asset
    assessments, product demand and supply modeling, and technology
    evaluations.
    Design and Engineering  Our Global E&C
    Group provides a broad range of engineering and design-related
    services. Our design and engineering capabilities include
    process, civil, structural, architectural, 3




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mechanical, instrumentation, electrical, and health, safety and
    environmental management. For each project, we identify the
    project requirements and then integrate and coordinate the
    various design elements. Other critical tasks in the design
    process may include value engineering to optimize costs, risk
    and hazard reviews, and the assessment of construction,
    maintenance and operational requirements.  
    Project Management and Project Control  Our
    Global E&C Group offers a wide range of project management
    and project control services for overseeing engineering,
    procurement and construction activities. These services include
    estimating costs, project planning and project cost control. The
    provision of these services is an integral part of the planning,
    design and construction phases of projects that we execute
    directly for clients. We also provide these services to our
    clients in the role of project management or program management
    consultant, where we oversee, on our clients behalf, the
    execution by other contractors of all or some of the planning,
    design and construction phases of a project.
    Procurement  Our procurement activities focus
    on those projects where we also execute the design and
    engineering work. We manage the procurement of materials,
    subcontractors and craft labor. Often, we purchase materials,
    equipment and third-party services on behalf of our client,
    where the client will pay for the purchased items or services at
    cost and reimburse us the cost of our associated services plus a
    margin or fee.
    Construction/Commissioning and
    Start-up 
    Our Global E&C Group provides construction and construction
    management services on a worldwide basis. Our construction,
    commissioning and
    start-up
    activities focus on those projects where we have performed most
    of the associated design and engineering work. Depending on the
    project, we may function as the primary contractor or as a
    subcontractor to another firm. On some projects, we function as
    the construction manager, engaged by the customer to oversee
    another contractors compliance with design specifications
    and contracting terms. In some instances, we have responsibility
    for commissioning and plant
    start-up,
    or, where the client has responsibility for these activities, we
    provide experts to work as part of our clients team.
    Operations and Maintenance  We provide project
    management, plant operations and maintenance services, such as
    repair, renovation, predictive and preventative services and
    other aftermarket services. In some instances, our contracts may
    require us to operate a plant, which we have designed and built,
    for an initial period that may vary from a very short period to
    up to approximately two years.  sub-critical
    
    Circulating Fluidized-Bed Steam Generators 
    Our Global Power Group designs, manufactures and supplies steam
    generators that utilize our proprietary CFB technology. We
    believe that CFB combustion is generally recognized as one of
    the most commercially viable, fuel-flexible and clean burning
    ways to generate steam on a commercial basis from coal and many
    other solid fuels and waste products. A CFB steam generator
    utilizes air nozzles on the floor and lower side walls of its
    furnace to mix and fluidize the fuel particles as they burn,
    resulting in a very efficient combustion and heat transfer
    process. The fuel and other added solid materials, such as
    limestone, are continuously recycled through the furnace to
    maximize combustion efficiency and the capture of pollutants,
    such as the oxides of sulfur, which we refer to as
    SOx.
    Due to the efficient mixing of the fuel with the air and other
    solid 4




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materials and the long period of time the fuel remains in the
    combustion process, the temperature of the process can be
    greatly reduced below that of a conventional burning process.
    This has the added benefit of reducing the formation of
    NOx,
    which is another pollutant formed during the combustion process.
    Due to these benefits, additional
    SOx
    and
    NOx
    control systems are frequently not needed. The application of
    supercritical steam technology to CFB technology is the latest
    technical development. By dramatically raising the pressure of
    the water as it is converted to steam, supercritical steam
    technology allows the steam to absorb more heat from the
    combustion process, resulting in a substantial improvement of
    approximately 5-15% in the efficiency of an electric power
    plant. As discussed above, we are actively developing
    Flexi-Burntm

    technology for our CFB steam generators. We believe
    Flexi-Burntm

    technology will be an important part of an overall strategy for
    capturing and storing
    CO2
    from coal power plants. We sell our CFB steam generators to
    clients worldwide.  
    Pulverized Coal Steam Generators  Our Global
    Power Group designs, manufactures and supplies PC steam
    generators. PC steam generators are commonly used in large
    coal-fired power plant applications. The coal is pulverized into
    fine particles and injected through specially designed low
    NOx
    burners. Our PC steam generators control
    NOx
    by utilizing advanced
    low-NOx
    combustion technology and selective catalytic reduction
    technology, which we refer to as SCR. PC technology requires
    flue gas desulfurization equipment, which we refer to as FGD, to
    be installed after the steam generator to capture
    SOx.
    We offer our PC steam generators with either conventional
    sub-critical
    steam technology or more efficient supercritical steam
    technology for electric power plant applications. We sell our PC
    steam generators to clients worldwide.
    Industrial Steam Generators  Our Global Power
    Group designs, manufactures and supplies industrial steam
    generators of various types including: CFB, as described above,
    grate, fully assembled package, field erected oil and gas, waste
    heat, and heat recovery steam generators. Depending on the steam
    generator type and application, our industrial boilers are
    designed to burn a wide spectrum of industrial fuels from high
    quality oil and natural gas to biomass and waste
    type fuels such as tires, municipal solid waste, waste
    wood and paper. Our industrial steam generators are designed for
    ruggedness and reliability.
    Auxiliary Equipment and Aftermarket Services 
    Our Global Power Group also manufactures and installs auxiliary
    and replacement equipment for utility power and industrial
    facilities, including steam generators for solar thermal power
    plants, surface condensers, feed water heaters, coal
    pulverizers, steam generator coils and panels, biomass
    gasifiers, and replacement parts. Additionally, we install
    NOx
    reduction systems manufactured by third-parties. The
    NOx
    reduction systems include SCR equipment and
    low-NOx
    combustion systems for PC steam generators, which significantly
    reduce
    NOx
    emissions from PC steam generators. Our Global Power Group also
    performs steam generator modifications and provides engineered
    solutions for steam generators worldwide.    Industries
    We Serve
    
    Oil and gas;
    Oil refining;
    Chemical/petrochemical;
    Pharmaceutical;
    Environmental; 5




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
    Power generation; and
    Power plant operation and maintenance.  Customers
    and Marketing
    Licenses,
    Patents and Trademarks
    Unfilled
    Orders
       6




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Use of
    Raw Materials
  non-U.S. based
  Compliance
    with Government Regulations
    Employees
    As ofDecember 26,


December 28,2008


2007Global E&C Group


11,235



10,498Global Power Group


3,419



3,278C&F Group


75



83Total


14,729



13,859   Competition
       7




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Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, www.fwc.com Form 10-K.
  1-800-SEC-0330. www.sec.gov
  The
    Redomestication
                
    pursuant to the terms of the Certificate of Designation
    governing Foster Wheeler Ltd.s Series B Convertible
    Preferred Shares, concurrently with the issuance of registered
    shares to the holders of whole Foster Wheeler Ltd. common
    shares, Foster Wheeler AG issued to the holders of the preferred
    shares the number of registered shares of Foster Wheeler AG that
    such holders would have been entitled to receive had they
    converted their preferred shares into common shares of Foster
    Wheeler Ltd. immediately prior to the effectiveness of the
    scheme of arrangement (with Foster Wheeler Ltd. paying cash in
    lieu of any fractional common shares otherwise issuable);
    pursuant to the terms of the Warrant Agreement governing Foster
    Wheeler Ltd.s Class A Warrants outstanding on the
    date of the consummation of the scheme of arrangement, Foster
    Wheeler AG executed a supplemental warrant agreement pursuant to
    which it assumed Foster Wheeler Ltd.s 8




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obligations under the Warrant Agreement and agreed to issue
    registered shares of Foster Wheeler AG upon exercise of such
    warrants in accordance with their terms; and  
    Foster Wheeler AG assumed Foster Wheeler Ltd.s existing
    obligations in connection with awards granted under Foster
    Wheeler Ltd.s incentive plans and other similar employee
    awards.    non-U.S. operations.
 9




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ITEM 1A.
    RISK
    FACTORS (amounts in thousands of dollars)  Form 10-K.
    Risks
    Related to Our Operations
  Our
    current and future lump-sum or fixed-price contracts and other
    shared risk contracts may result in significant losses if costs
    are greater than anticipated.
      
    engineering design changes;
    unanticipated technical problems with the equipment being
    supplied or developed by us, which may require that we spend our
    own money to remedy the problem;
    changes in the costs of components, materials or labor;
    difficulties in obtaining required governmental permits or
    approvals;
    changes in local laws and regulations;
    changes in local labor conditions;
    project modifications creating unanticipated costs;
    delays caused by local weather conditions; and
    our project owners, suppliers or
    subcontractors failure to perform.  agreed-upon
 10




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and/or
  Failure
    by us to successfully defend against claims made against us by
    project owners, suppliers or project subcontractors, or failure
    by us to recover adequately on claims made against project
    owners, suppliers or subcontractors, could materially adversely
    affect our business, financial condition, results of operations
    and cash flows.
  and/or Form 10-K.
  Projects
    included in our backlog may be delayed or cancelled, which could
    materially adversely affect our business, financial condition,
    results of operations and cash flows.
    Because
    our operations are concentrated in four particular industries,
    we may be adversely impacted by economic or other developments
    in these industries.
   11




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Our
    results of operations and cash flows depend on new contract
    awards, and the selection process and timing for performing
    these contracts are not entirely within our
    control.
  non-U.S., and/or
    A
    failure by us to attract and retain key officers, qualified
    personnel, joint venture partners, advisors and subcontractors
    could materially adversely affect our business, financial
    condition, results of operations and cash flows.
    Our
    worldwide operations involve risks that may limit or disrupt
    operations, limit repatriation of cash, increase taxation or
    otherwise materially adversely affect our business, financial
    condition, results of operations and cash flows.
  non-U.S. subsidiaries, non-U.S. subsidiaries, non-U.S. sources
 12




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
    uncertain political, legal and economic environments;
    potential incompatibility with
    non-U.S. joint
    venture partners;
    foreign currency controls and fluctuations;
    energy prices and availability;
    terrorist attacks;
    the imposition of additional governmental controls and
    regulations;
    war and civil disturbances;
    labor problems; and
    interruption or delays in international shipping.  non-U.S. taxation
  We are
    subject to anti-bribery laws in the countries in which we
    operate. Failure to comply with these laws could result in our
    becoming subject to penalties and the disruption of our business
    activities.
    A
    change in tax laws, treaties or regulations, or their
    interpretation, of any country in which we operate could
    increase our tax burden and otherwise adversely affect our
    financial condition, results of operations and cash
    flows.
   13




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Our
    business may be materially adversely impacted by regional,
    national and/or global requirements to significantly limit or
    reduce greenhouse gas emissions in the future.
  and/or and/or
  We are
    subject to various environmental laws and regulations in the
    countries in which we operate. If we fail to comply with these
    laws and regulations, we may incur significant costs and
    penalties that could materially adversely affect our business,
    financial condition, results of operations and cash
    flows.
    We may
    lose future business to our competitors and be unable to operate
    our business profitably if our patents and other intellectual
    property rights do not adequately protect our proprietary
    products.
   14




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We
    rely on our information systems in our operations. Failure to
    protect these systems against security breaches could adversely
    affect our business and results of operations. Additionally, if
    these systems fail or become unavailable for any significant
    period of time, our business could be harmed.
    Risks
    Related to Asbestos Claims
  The
    number and cost of our current and future asbestos claims in the
    United States could be substantially higher than we have
    estimated and the timing of payment of claims could be sooner
    than we have estimated, which could materially adversely affect
    our business, financial condition, results of operations and
    cash flows.
  out-of-court and/or
  
    the rate at which new claims are filed;
    the number of new claimants;
    changes in the mix of diseases alleged to be suffered by the
    claimants, such as type of cancer, asbestosis or other illness;
    increases in legal fees or other defense costs associated with
    asbestos claims;
    increases in indemnity payments;
    decreases in the proportion of claims dismissed with zero
    indemnity payments;
    indemnity payments being required to be made sooner than
    expected;
    bankruptcies of other asbestos defendants, causing a reduction
    in the number of available solvent defendants and thereby
    increasing the number of claims and the size of demands against
    our subsidiaries;
    adverse jury verdicts requiring us to pay damages in amounts
    greater than we expect to pay in settlements;
    changes in legislative or judicial standards that make
    successful defense of claims against our subsidiaries more
    difficult; or
    enactment of federal legislation requiring us to contribute
    amounts to a national settlement trust in excess of our expected
    net liability, after insurance, in the tort system. 15




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15-year
      The
    adequacy and timing of insurance recoveries of our
    asbestos-related costs in the United States is uncertain. The
    failure to obtain insurance recoveries could materially
    adversely affect our business, financial condition, results of
    operations and cash flows.
      out-of-pocket
 16




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A
    number of asbestos-related claims have been received by our
    subsidiaries in the United Kingdom. To date, these claims have
    been covered by insurance policies and proceeds from the
    policies have been paid directly to the plaintiffs. The timing
    and amount of asbestos claims that may be made in the future,
    the financial solvency of the insurers and the amount that may
    be paid to resolve the claims, are uncertain. The insurance
    carriers failure to make payments due under the policies
    could materially adversely affect our business, financial
    condition, results of operations and cash flows.
  and/or
  Risks
    Related to Our Liquidity and Capital Resources
  We
    require cash repatriations from our
    non-U.S.
    subsidiaries to meet our U.S. cash needs related to our
    asbestos-related and other liabilities and corporate overhead
    expenses. Our ability to repatriate funds from our
    non-U.S.
    subsidiaries is limited by a number of factors.
  non-U.S. subsidiaries. non-U.S. subsidiaries
  Certain
    of our various debt agreements impose financial covenants, which
    may prevent us from capitalizing on business opportunities,
    which could negatively impact our business.
   17




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We may
    have significant working capital requirements, which could
    negatively impact our business, financial condition, and cash
    flows.
  and/or
  We may
    invest in longer-term investment opportunities, such as the
    acquisition of other entities or operations in the engineering
    and construction industry or power industry. Acquisitions of
    other entities or operations have risks that could materially
    adversely affect our business, financial condition, results of
    operations and cash flows.
    Risk
    Factors Related to Our Financial Reporting and Corporate
    Governance
  If we
    have a material weakness in our internal control over financial
    reporting, our ability to report our financial results on a
    timely and accurate basis may be adversely
    affected.
    Our
    use of the
    percentage-of-completion
    accounting method could result in a reduction or elimination of
    previously reported profits.
  percentage-of-completion Form 10-K.
 18




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Registered
    holders who acquired our shares after the Redomestication must
    apply for enrollment in our share register as shareholders with
    voting rights in order to have voting rights; we may deny such
    registration under certain circumstances.
    There
    are provisions in our articles of association that may reduce
    the voting rights of our registered shares.
    Following
    the Redomestication, as a result of the higher par value of our
    shares, we have less flexibility than we had prior to the
    Redomestication with respect to certain aspects of capital
    management.
    Following
    the Redomestication, as a result of increased shareholder
    approval requirements, we have less flexibility than we had
    before the Redomestication with respect to certain aspects of
    capital management.
  2 3
 19




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We are
    required to declare dividends in Swiss francs and any currency
    fluctuations between the U.S. dollar and Swiss francs will
    affect the dollar value of the dividends we pay.
    We may
    not be able to make distributions or repurchase shares without
    subjecting our shareholders to Swiss withholding
    tax.
  U.S.-Swiss
  We
    have anti-takeover provisions in our articles of association
    that may discourage a change of control.
    
    The board of directors to be divided into three classes serving
    staggered three-year terms. In addition, directors may be
    removed from office, by the affirmative vote of the holders of
    two-thirds of the issued shares generally entitled to vote.
    These provisions of our articles of association may delay or
    limit the ability of a shareholder to obtain majority
    representation on the board of directors.
    Limiting the voting rights of shareholders whose
    controlled shares (as defined in the articles of
    association) represent 10% or more of our total voting shares to
    one vote less than 10% of the total voting rights of our share
    capital as registered with the Swiss commercial register.   20




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We are
    a Swiss company and it may be difficult for you to enforce
    judgments against us or our directors and executive
    officers.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   21




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ITEM 2.
    PROPERTIES    Company (Business Segment*)






Building


Leaseand Location

Use

Land Area


Square Feet


Expires(1)Foster Wheeler Realty Services, Inc. (C&F)Union Township, New Jersey

Investment in undeveloped land


203.8 acres







Union Township, New Jersey

General office & engineering


29.4 acres



294,000



2022Union Township, New Jersey

Storage and reproduction facilities


10.8 acres



30,400



Livingston, New Jersey

Research center


6.7 acres



51,355



Foster Wheeler Asia Pacific Pte. Ltd. (E&C)Singapore

Office & engineering






22,873



2009Singapore

Office & engineering






80,039



2010Foster Wheeler Bengal Private Limited (E&C)Kolkata, India

Office & engineering






29,204



2017Foster Wheeler Bimas Birlesik Insaat ve Muhendislik A.S.
    (E&C)Istanbul, Turkey

Office & engineering






25,833



2010Foster Wheeler Chile, S.A. (E&C)Santiago, Chile

Office & engineering






16,071



2011Foster Wheeler France S.A. (E&C)Paris, France

Office & engineering






18,008



2011Paris, France

Office & engineering






64,584



2013Paris, France

Warehouse






12,109



2013Provence, France

Office & engineering






11,517



2011Foster Wheeler India Private Limited (E&C)Chennai, India

Office & engineering






9,681



2010Chennai, India

Office & engineering






81,624



2011Chennai, India

Office & engineering






9,854



2012Chennai, India

Office & engineering






9,854



2017Kolkata, India

Office & engineering






39,893



2015Kolkata, India

Office & engineering






35,014



2016Foster Wheeler International Corporation -Thailand Branch
    (E&C)Sriracha, Thailand

Office & engineering






121,299



2009Foster Wheeler Italiana S.p.A. (E&C)Milan, Italy

Office & engineering






152,764



2011Milan, Italy

Office & engineering






10,764



2012Milan, Italy

Office & engineering






121,870
(2)


2014Foster Wheeler Limited (England) (E&C)Glasgow, Scotland

Office & engineering


2.3 acres



28,798
(2)


Reading, England

Office & engineering






76,711



2011Reading, England

Office & engineering


14.0 acres



395,521



2024Reading, England

Investment in undeveloped land


12.0 acres







Teesside, England

Office & engineering






18,001



2014Foster Wheeler South Africa (PTY) Limited (E&C)Midrand, South Africa

Office & engineering






55,294



2011 22




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Company (Business Segment*)






Building


Leaseand Location

Use

Land Area


Square Feet


Expires(1)Foster Wheeler USA Corporation (E&C)Houston, Texas

Office & engineering






74,025



2009Houston, Texas

Office & engineering






332,000



2018McGregor, Texas

Storage facilities


15.0 acres



24,000



Foster Wheeler Iberia, S.A. (E&C and GPG)Madrid, Spain

Office & engineering


5.5 acres



110,000



2015Foster Wheeler International Engineering &
    Consulting (Shanghai) Company Limited (E&C and GPG)Shanghai, China

Office & engineering






50,490



2009Shanghai, China

Office & engineering






23,924



2010Foster Wheeler Energi Aktiebolag (GPG)Norrkoping, Sweden

Manufacturing & office






38,029



2014Foster Wheeler Energia Oy (GPG)Varkaus, Finland

Manufacturing & office


22.2 acres



366,716



Varkaus, Finland

Office & engineering






100,750



2031Espoo, Finland

Office & engineering






14,639



2011Foster Wheeler Energia Polska Sp. z o.o. (GPG)Sosnowiec, Poland

Office & engineering






25,629




(5)Foster Wheeler Energia, S.A. (GPG)Tarragona, Spain

Manufacturing & office


25.6 acres



77,794



Foster Wheeler Energy FAKOP Sp. z o.o. (GPG)Sosnowiec, Poland

Manufacturing & office


19.5 acres



293,058
(3)


2089Foster Wheeler International Trading (Shanghai) Company
    Limited (GPG)Shanghai, China

Office & engineering






21,031



2010Foster Wheeler Power Machinery Company Limited (GPG)Xinhui, Guangdong, China

Manufacturing


2.6 acres








(5)Xinhui, Guangdong, China

Manufacturing


3.2 acres







2012Xinhui, Guangdong, China

Storage






54,412



2009Xinhui, Guangdong, China

Manufacturing & office


29.2 acres



362,257
(4)


2045Foster Wheeler Power Systems, Inc. (GPG)Camden, New Jersey

Waste-to-energy plant


18.0 acres







2015Talcahuano, Chile

Cogeneration plant-facility site


21.0 acres







2035Martinez, California

Cogeneration plant


6.4 acres







2020Foster Wheeler Pyropower, Inc. (GPG)Ridgecrest, California

Office & storage facilities






10,000




(6)Foster Wheeler Service (Thailand) Limited (GPG)Rayong, Thailand

Manufacturing & office


3.15 acres



41,915



2017     *   Designation of Business Segments:

E&C  -  Global Engineering &
    Construction GroupGPG  -  Global Power GroupC&F  -  Corporate & Finance
    Group   (1)
    
    Represents leases in which Foster Wheeler is the lessee.
    Properties for which a lease expiration is not indicated are
    owned.(2)
    
    Portion or entire facility leased or subleased to third parties.(3)
    
    53% ownership interest. 23




---



##### Table of Contents



(4)
    
    52% ownership interest.(5)
    
    Lease facilities on a
    month-to-month
    basis with no contractual termination date.(6)
    
    Foster Wheeler Pyropower, Inc. provided notice to terminate the
    lease in February 2009.  ITEM 3.
    LEGAL
    PROCEEDINGS  Form 10-K.
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS      BrokerFor


Against


Abstentions


Non-VotesApproval of scheme of arrangement Number of shareholders casting votes


904



128



44



0 Number of shares cast


79,315,915



667,631



388,638



0Approval of motion to adjourn


70,777,260



9,228,222



366,702



0  24




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##### Table of Contents



PART II ITEM 5.  MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES



As a result of the Redomestication described in Item 1,
    Business  The Redomestication, on
    February 9, 2009 Foster Wheeler AG became the parent
    company of our group of companies and its registered shares were
    listed on the NASDAQ Global Select Market under the symbol
    FWLT, the same symbol under which Foster Wheeler
    Ltd. common shares were previously listed. The share information
    below relates to sales prices of Foster Wheeler Ltd. common
    shares prior to the Redomestication.



On January 8, 2008, the shareholders of Foster Wheeler Ltd.
    approved an increase in its authorized share capital at a
    shareholders meeting which was necessary in order to effect a
    two-for-one
    stock split of Foster Wheeler Ltd.s common shares in the
    form of a stock dividend to Foster Wheeler Ltd.s common
    shareholders in the ratio of one additional Foster Wheeler Ltd.
    common share in respect of each common share outstanding. As a
    result of these capital alterations, all references to common
    share prices, share capital, the number of shares, stock
    options, restricted awards, per share amounts, cash dividends,
    and any other reference to shares in this annual report on
    Form 10-K,
    unless otherwise noted, have been adjusted to reflect the stock
    split on a retroactive basis.



On November 29, 2004, the Foster Wheeler Ltd. shareholders
    approved a series of capital alterations including the
    consolidation of Foster Wheeler Ltd.s authorized common
    share capital at a ratio of
    one-for-twenty
    and a reduction in the par value of Foster Wheeler Ltd.s
    common shares and preferred shares. As a result of these capital
    alterations, all references to common share prices, share
    capital, the number of shares, stock options, restricted awards,
    per share amounts, cash dividends, and any other reference to
    shares in this annual report on
    Form 10-K,
    unless otherwise noted, have been adjusted to reflect such
    capital alterations on a retroactive basis.



The following chart lists the quarterly high and low sales
    prices of Foster Wheeler Ltd.s common shares on the NASDAQ
    Global Select Market during our fiscal years 2008 and 2007. Fiscal Quarters EndedMarch 28,


June 27,


September 26,


December 26,2008


2008


2008


2008Common share prices:High

$
85.65


$
79.97


$
75.00


$
36.57Low

$
46.05


$
55.86


$
33.10


$
13.86   Fiscal Quarters EndedMarch 30,


June 29,


September 28,


December 28,2007


2007


2007


2007Common share prices:High

$
29.80


$
55.19


$
68.40


$
84.24Low

$
23.25


$
28.97


$
42.17


$
63.24      25




---



##### Table of Contents



Performance
    Graph
    Comparision
    of Cumulative Total Return
  
    Fiscal Years EndedDecember 26,

December 31,

December 30,

December 29,

December 28,

December 26,2003

2004

2005

2006

2007

2008Foster Wheeler Ltd.

$
100.00


$
70.85


$
164.20


$
246.16


$
697.63


$
209.29S&P 500 Index


100.00



112.50



118.03



136.67



145.18



87.77Peer
    Group(1)


100.00



129.64



198.21



241.70



487.76



177.87     (1)
    
    The following companies comprise the Peer Group: Chicago
    Bridge & Iron Company N.V., Fluor Corporation, Jacobs
    Engineering Group Inc., KBR, Inc., McDermott International, Inc.
    and Shaw Group, Inc. The Peer Group consists of companies that
    were compiled by us for benchmarking the performance of our
    common shares.  Recent
    Sales of Unregistered Securities
   26




---



##### Table of Contents



Issuer
    Purchases of Equity Securities (amounts in thousands of dollars,
    except share data and per share amounts)
    Approximate DollarTotal Number of


Value of SharesShares Purchased as


that May Yet BePart of Publicly


Purchased UnderTotal Number of


Average Price Paid


Announced Plans or


the Plans orFiscal Month

Shares
    Purchased(1)


per Share


Programs


ProgramsSeptember 27, 2008 through October 24, 2008


9,233,394


$
31.19



9,233,394October 25, 2008 through November 21, 2008










November 22, 2008 through December 26, 2008


7,579,577



19.43



7,579,577Total


16,812,971


$
25.89



16,812,971(2
)

$
264,773     (1)
    
    During the fiscal fourth quarter of 2008, we repurchased an
    aggregate of 16,812,971 common shares of Foster Wheeler Ltd. in
    open market transactions pursuant to the repurchase program that
    was publicly announced on September 12, 2008 and which
    authorizes us to repurchase up to $750,000 of our outstanding
    common shares. The Foster Wheeler AG repurchase program, which
    replaced the Foster Wheeler Ltd. program as of February 9,
    2009 (as described above), has no expiration date and may be
    suspended for periods or discontinued at any time. We did not
    repurchase any Foster Wheeler Ltd. common shares other than
    through our publicly announced repurchase program.(2)
    
    As of December 26, 2008, an aggregate of
    18,098,519 shares were purchased for a total of $485,227
    since the inception of the repurchase program announced on
    September 12, 2008. 27




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  FOSTER
    WHEELER LTD.
    COMPARATIVE FINANCIAL STATISTICS
    (amounts in thousands of dollars, except share data and per
    share amounts)
  Fiscal Years EndedDecember 26,


December 28,


December 29,


December 30,


December 31,2008


2007


2006


2005


2004Statement of Operations Data:Operating revenues

$
6,854,290


$
5,107,243


$
3,495,048


$
2,199,955


$
2,661,324Income/(loss) before income taxes


623,648
(1)


530,294
(3)


343,693
(4)


(70,181
)(5)


(232,172
)(6)Provision for income taxes


(97,028
)(2)


(136,420
)


(81,709
)


(39,568
)


(53,122
)Net income/(loss)

$
526,620


$
393,874


$
261,984


$
(109,749
)

$
(285,294
)Earnings/(loss) per common
    share:(7)Basic

$
3.73


$
2.78


$
1.82(8
)

$
(1.18
)

$
(28.92
)Diluted

$
3.68


$
2.72


$
1.72(8
)

$
(1.18
)

$
(28.92
)Shares
    outstanding:(7)Weighted-average number of common shares outstanding for basic
    earnings/(loss) per common share


141,149,590



141,661,046



132,996,384



93,140,176



9,864,740Effect of dilutive securities


1,954,440



3,087,176



8,221,592



*



*Weighted-average number of common shares outstanding for diluted
    earnings/(loss) per common share


143,104,030



144,748,222



141,217,976



93,140,176



9,864,740   As ofDecember 26,


December 28,


December 29,


December 30,


December 31,2008


2007


2006


2005


2004Balance Sheet Data:Current assets

$
1,790,186


$
2,044,383


$
1,389,628


$
851,523


$
1,039,458Current liabilities


1,488,614



1,523,773



1,247,603



997,564



1,251,581Working capital


301,572



520,610



142,025



(146,041
)


(212,123
)Land, buildings and equipment, net


383,209



337,485



302,488



258,672



280,305Total assets


3,011,254



3,248,988



2,565,549



1,894,706



2,177,699Long-term debt (including current installments)


217,364



205,346



202,969



315,412



570,073Total temporary equity


7,586



2,728



983







Total shareholders equity/(deficit)


392,562



571,041



62,727



(341,158
)


(525,565
)Other Data:Unfilled orders (in terms of future revenues), end of year

$
5,504,400


$
9,420,400


$
5,431,400


$
3,692,300


$
2,048,100New orders booked (in terms of future revenues)


4,056,000



8,882,800



4,892,200



4,163,000



2,437,100     (1)
    
    Includes in fiscal year 2008: a charge of $9,000 in our Global
    Power Group primarily for severance-related postemployment
    benefits in accordance with Statement of Financial Accounting
    Standards, or SFAS, 112, Employers Accounting for
    Postemployment Benefits an amendment of FASB Statements
    No. 5 and 43; and a net charge of $6,600 on the
    revaluation of our asbestos liability and related asset
    resulting primarily 28




---



##### Table of Contents



from increased asbestos defense costs projected through year-end
    2023 of $42,700, partially offset by gains of $36,100 on the
    settlement of coverage litigation with certain insurance
    carriers.(2)
    
    Includes in fiscal year 2008: a benefit of $24,100 related to
    the net impact of deferred tax valuation allowance adjustments
    at two of our
    non-U.S.
    subsidiaries.(3)
    
    Includes in fiscal year 2007: gains of $13,500 on the settlement
    of coverage litigation with certain asbestos insurance carriers;
    and a charge of $7,400 on the revaluation of our asbestos
    liability and related asset resulting primarily from increased
    asbestos defense costs projected through year-end 2022 and from
    our rolling 15 year asbestos liability estimate.(4)
    
    Includes in fiscal year 2006: net asbestos-related gains of
    $115,700 primarily from the settlement of coverage litigation
    with certain asbestos insurance carriers; a charge of $15,600 on
    the revaluation of our asbestos liability and related asset
    resulting primarily from increased asbestos defense costs
    projected through year-end 2021 and from our rolling
    15 year asbestos liability estimate; an aggregate charge of
    $15,000 in conjunction with the voluntary termination of our
    prior domestic senior credit agreement; and a net charge of
    $12,500 in conjunction with the debt reduction initiatives
    completed in April and May 2006.(5)
    
    Includes in fiscal year 2005: a charge of $113,700 on the
    revaluation of our asbestos liability and related asset; credit
    agreement costs associated with our prior domestic senior credit
    facility of $3,500; and an aggregate charge of $58,300 recorded
    in conjunction with the exchange offers for our trust preferred
    securities and our senior notes due 2011, which we refer to as
    our 2011 senior notes.(6)
    
    Includes in fiscal year 2004: a gain of $19,200 on the sales of
    minority equity interests in special-purpose companies
    established to develop power plant projects in Europe; a loss of
    $3,300 on the sale of 10% of our equity interest in a
    waste-to-energy
    project in Italy; a charge of $75,800 on the revaluation of
    asbestos related asset as a result of an adverse court decision
    in asbestos coverage allocation litigation; a net gain of
    $15,200 on the settlement of coverage litigation with certain
    asbestos insurance carriers; restructuring and credit agreement
    costs of $17,200; a net charge of $175,100 recorded in
    conjunction with the 2004
    equity-for-debt
    exchange; and charges for severance cost of $5,700.(7)
    
    Amounts give retroactive effect to the
    two-for-one
    stock split that was effective January 22, 2008 and the
    one-for-twenty
    reverse stock split that was effective November 29, 2004.(8)
    
    As described further in Note 13 to the consolidated
    financial statements in this annual report on
    Form 10-K,
    we completed two common share purchase warrant offer
    transactions in January 2006. The fair value of the additional
    shares issued as part of the warrant offer transactions reduced
    net income attributable to our common shareholders when
    calculating earnings/(loss) per common share. The fair value of
    the additional shares issued was $19,445.*
    
    The impact of potentially dilutive securities such as
    outstanding stock options, warrants to purchase common shares,
    and the non-vested portion of restricted common shares and
    restricted common share units were not included in the
    calculation of diluted loss per common share in loss periods due
    to their antidilutive effect. 29




---



##### Table of Contents



ITEM 7. MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS (amounts in thousands of dollars, except share
    data and per share amounts)



The following is managements discussion and analysis of
    certain significant factors that have affected our financial
    condition and results of operations for the periods indicated
    below. This discussion and analysis should be read in
    conjunction with our consolidated financial statements and notes
    thereto included in this annual report on
    Form 10-K.



Safe
    Harbor Statement



This managements discussion and analysis of financial
    condition and results of operations, other sections of this
    annual report on
    Form 10-K
    and other reports and oral statements made by our
    representatives from time to time may contain forward-looking
    statements that are based on our assumptions, expectations and
    projections about Foster Wheeler AG and the various industries
    within which we operate. These include statements regarding our
    expectations about revenues (including as expressed by our
    backlog), our liquidity, the outcome of litigation and legal
    proceedings and recoveries from customers for claims, and the
    costs of current and future asbestos claims and the amount and
    timing of related insurance recoveries. Such forward-looking
    statements by their nature involve a degree of risk and
    uncertainty. We caution that a variety of factors, including but
    not limited to the factors described under Item 1A,
    Risk Factors and the following, could cause business
    conditions and our results to differ materially from what is
    contained in forward-looking statements: 
    benefits, effects or results of our redomestication;
    changes in the rate of economic growth in the United States and
    other major international economies;
    changes in investment by the oil and gas, oil refining,
    chemical/petrochemical and power industries;
    changes in the financial condition of our customers;
    changes in regulatory environments;
    changes in project design or schedules;
    contract cancellations;
    changes in our estimates of costs to complete projects;
    changes in trade, monetary and fiscal policies worldwide;
    compliance with laws and regulations relating to our global
    operations;
    currency fluctuations;
    war and/or
    terrorist attacks on facilities either owned by us or where
    equipment or services are or may be provided by us;
    interruptions to shipping lanes or other methods of transit;
    outcomes of pending and future litigation, including litigation
    regarding our liability for damages and insurance coverage for
    asbestos exposure;
    protection and validity of our patents and other intellectual
    property rights;
    increasing competition by
    non-U.S. and
    U.S. companies;
    compliance with our debt covenants;
    recoverability of claims against our customers and others by us
    and claims by third parties against us; and
    changes in estimates used in our critical accounting policies. 30




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##### Table of Contents



Form 10-Q, Form 10-K Form 8-K
  Overview
    U.S.-based
  Form 10-K
  Fiscal
    Year 2008 Results
   31




---



##### Table of Contents




    Increased contract profit of $151,300 mainly driven by the
    increased volume of operating revenues, excluding flow-through
    revenues which do not impact contract profit. See
     Results of Operations-Operating Revenues
    below for a more detailed discussion of flow-through revenues.
    Additionally, the contract profit increase included the net
    impact of the following:  
    A $7,500 commitment fee received in fiscal year 2008 for a
    contract that our Global Power Group was not awarded.
    The net impact to contract profit for charges of $6,700 and
    $30,000 in fiscal years 2008 and 2007, respectively, on a legacy
    project in our Global Power Group. Please refer to Note 19
    to the consolidated financial statements in this annual report
    on
    Form 10-K
    for further information on this legacy project.
    A $9,600 increase in fiscal year 2007 for the contract profit
    portion of the favorable resolution of project claims, described
    below.  
    Income earned in tax jurisdictions with tax rates lower than the
    U.S. statutory rate, which contributed to an approximate
    fourteen-percentage point reduction in the effective tax rate
    for fiscal year 2008.
    A net valuation allowance decrease consisting primarily of a
    reversal of our valuation allowance on deferred tax assets in
    one of our
    non-U.S. subsidiaries
    and a decrease in our valuation allowance because we recognized
    earnings in jurisdictions where we continue to maintain a full
    valuation allowance partially offset by the establishment of a
    valuation allowance on deferred tax assets in another of our
    non-U.S. subsidiaries.
    Total changes in our valuation allowance contributed to an
    approximate six-percentage point reduction in the effective tax
    rate for fiscal year 2008.    
    A net asbestos-related provision of $6,600 in our C&F Group
    in fiscal year 2008 on the revaluation of our asbestos liability
    and related asset resulting primarily from increased asbestos
    defense costs projected through year-end 2023 of $42,700 offset
    by gains of $36,100 on the settlement of coverage litigation
    with certain insurance carriers.
    A charge of $9,000 in our Global Power Group primarily for
    severance-related postemployment benefits in accordance with
    Statement of Financial Accounting Standards, or SFAS,
    No. 112, Employers Accounting for
    Postemployment Benefits an amendment of FASB Statements
    No. 5 and 43. The severance charge results from our
    efforts to right-size our power business to match anticipated
    market conditions in fiscal year 2009. The $9,000 charge
    decreased contract profit by $6,600, increased selling, general
    and administrative expenses by $2,100 and increased other
    deductions, net by $300.
    An increase in selling, general and administrative expenses of
    $37,600 in fiscal year 2008, compared to fiscal year 2007,
    inclusive of $2,100 of severance-related charges described above.
    A net asbestos-related gain of $6,100 in our C&F Group in
    fiscal year 2007, related to gains of $13,500 on the settlement
    of coverage litigation with certain asbestos insurance carriers
    and a charge of $7,400 on the revaluation of our asbestos
    liability and related asset.
    A $14,400 gain in our Global Power Group related to favorable
    resolution of project claims in fiscal year 2007. The $14,400
    gain increased contract profit by $9,600 and interest income by
    $4,000 and reduced other deductions, net by $800.    
    Our consolidated operating revenues increased 34% to $6,854,300
    in fiscal year 2008, as compared to $5,107,200 in fiscal year
    2007. The increase in operating revenues in fiscal year 2008
    reflects increased flow-through revenues of $1,376,400 and
    greater business activity in both our Global E&C Group and
    our Global Power Group. 32




---



##### Table of Contents




    We generated net cash from operating activities of $428,900.
    Our consolidated new orders, measured in terms of future
    revenues, were $4,056,000 in fiscal year 2008, as compared to
    $8,882,800 in fiscal year 2007.
    Our consolidated backlog of unfilled orders, measured in future
    revenues, as of December 26, 2008 was $5,504,400, as
    compared to $9,420,400 as of December 28, 2007.
    Our consolidated backlog, measured in terms of Foster Wheeler
    scope (as defined in the section entitled
     Backlog and New Orders within this
    Item 7), as of December 26, 2008 was $2,539,300, as
    compared to $3,294,600 as of December 28, 2007.  Challenges
    and Drivers
        New
    Orders
       33




---



##### Table of Contents



Results
    of Operations:
  Operating
    Revenues:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
6,854,290


$
5,107,243


$
3,495,048$ Change


1,747,047



1,612,195% Change


34.2
%


46.1
%       2008 vs 2007





2007 vs 20062008


2007


$ Change


% Change


2006


$ Change


% ChangeAsia

$
1,575,383


$
964,006


$
611,377



63
%

$
412,984


$
551,022



133
%Australasia*


1,745,039



709,073



1,035,966



146
%


616,700



92,373



15
%Europe


1,451,670



1,329,971



121,699



9
%


997,440



332,531



33
%Middle East


858,592



1,006,287



(147,695
)


(15
)%


470,746



535,541



114
%North America


1,056,209



957,294



98,915



10
%


876,655



80,639



9
%South America


167,397



140,612



26,785



19
%


120,523



20,089



17
%Total

$
6,854,290


$
5,107,243


$
1,747,047



34
%

$
3,495,048


$
1,612,195



46
%     *
    
    Australasia primarily represents Australia, New Zealand, and the
    Pacific islands.  Fiscal
    Year 2008 vs. Fiscal Year 2007
       34




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##### Table of Contents



Fiscal
    Year 2007 vs. Fiscal Year 2006
        Contract
    Profit:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
895,646


$
744,321


$
507,787$ Change


151,325



236,534% Change


20.3
%


46.6
%     Fiscal
    Year 2008 vs. Fiscal Year 2007
    
    Our Global E&C Group experienced increased contract profit
    mainly driven by the increased volume of operating revenues.
    Additionally, our Global E&C Group experienced increased
    contract profit margins, excluding the impact on contract profit
    margins of flow-through revenues.
    Our Global Power Group experienced increased volume of operating
    revenues and markedly increased contract profit margins in
    fiscal year 2008, as compared to fiscal year 2007, excluding the
    items noted below, which impacted contract profit of our Global
    Power Group.
    A $7,500 increase in contract profit for a commitment fee
    received in fiscal year 2008 for a contract that our Global
    Power Group was not awarded.
    A $6,600 decrease in contract profit for severance-related
    postemployment benefits in accordance with SFAS No. 112. 35




---



##### Table of Contents




    The net impact to contract profit for charges of $6,700 and
    $30,000 in fiscal years 2008 and 2007, respectively, on a legacy
    project in our Global Power Group. Please refer to Note 19 to
    the consolidated financial statements in this annual report on
    Form 10-K
    for further information.
    A $9,600 increase in contract profit for a gain in fiscal year
    2007 related to the favorable resolution of project claims in
    our Global Power Group.  Fiscal
    Year 2007 vs. Fiscal Year 2006
    
    Our Global E&C Group experienced increased contract profit
    mainly driven by the increased volume of operating revenues.
    Additionally, our Global E&C Group experienced increased
    contract profit margins, excluding the impact on contract profit
    margins of flow-through revenues.
    Our Global Power Group experienced increased volume of operating
    revenues and increased contract profit margins in fiscal year
    2007, as compared to fiscal year 2006, excluding the items noted
    below, which impacted contract profit of our Global Power Group.
    A $9,600 increase in contract profit for a gain in fiscal year
    2007 related to the favorable resolution of project claims in
    our Global Power Group.
    The net impact to contract profit for charges of $30,000 and
    $25,000 in fiscal years 2007 and 2006, respectively, on a legacy
    project in our Global Power Group. Please refer to Note 19
    to the consolidated financial statements in this annual report
    on
    Form 10-K
    for further information.    Selling,
    General and Administrative (SG&A) Expenses:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
283,883


$
246,237


$
225,330$ Change


37,646



20,907% Change


15.3
%


9.3
%     Fiscal
    Year 2008 vs. Fiscal Year 2007
  Form 10-K
  Fiscal
    Year 2007 vs. Fiscal Year 2006
   36




---



##### Table of Contents



Other
    Income, net:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
53,001


$
61,410


$
48,610$ Change


(8,409
)


12,800% Change


(13.7
)%


26.3
%   Fiscal
    Year 2008
  Form 10-K),
    Fiscal
    Year 2007
  Form 10-K),
  Fiscal
    Year 2006
  Form 10-K),
 37




---



##### Table of Contents



Other
    Deductions, net:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
54,382


$
45,540


$
45,453$ Change


8,842



87% Change


19.4
%


0.2
%   Fiscal
    Year 2008
    Fiscal
    Year 2007
    Fiscal
    Year 2006
    Interest
    Income:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
44,743


$
35,627


$
15,119$ Change


9,116



20,508% Change


25.6
%


135.6
%   Fiscal
    Year 2008 vs. Fiscal Year 2007
    Fiscal
    Year 2007 vs. Fiscal Year 2006
   38




---



##### Table of Contents



Interest
    Expense:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
17,621


$
19,855


$
24,944$ Change


(2,234
)


(5,089
)% Change


(11.3
)%


(20.4
)%   Fiscal
    Year 2008 vs. Fiscal Year 2007
  Form 10-K
  Fiscal
    Year 2007 vs. Fiscal Year 2006
    Form 10-K
  Minority
    Interest in Income of Consolidated Affiliates:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
7,249


$
5,577


$
4,789$ Change


1,672



788% Change


30.0
%


16.5
%   Fiscal
    Year 2008 vs. Fiscal Year 2007
    Fiscal
    Year 2007 vs. Fiscal Year 2006
   39




---



##### Table of Contents



Net
    Asbestos-Related (Provision)/Gain:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
(6,607
)

$
6,145


$
100,131$ Change


(12,752
)


(93,986
)% Change


(207.5
)%


(93.9
)%   Fiscal
    Year 2008
    Fiscal
    Year 2007
    Fiscal
    Year 2006
    Form 10-K
  Prior
    Domestic Senior Credit Agreement Fees and
    Expenses:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$



$



$
14,955$ Change






(14,955
)% Change






(100.0
)%   Fiscal
    Year 2006
   40




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##### Table of Contents



Loss
    on Debt Reduction Initiatives:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$



$



$
12,483$ Change






(12,483
)% Change






(100.0
)%   Fiscal
    Year 2006
    Provision
    for Income Taxes:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
97,028


$
136,420


$
81,709$ Change


(39,392
)


54,711% Change


(28.9
)%


67.0
%   non-U.S. jurisdictions
  Fiscal
    Year 2008
    
    Income earned in tax jurisdictions with tax rates lower than the
    U.S. statutory rate, which contributed to an approximate
    fourteen-percentage point reduction in the effective tax rate
    for fiscal year 2008; and
    A valuation allowance decrease consisting of a reversal of our
    valuation allowance on deferred tax assets in one of our
    non-U.S. subsidiaries
    and a decrease in our valuation allowance because we recognized
    earnings in jurisdictions where we continue to maintain a full
    valuation allowance.  non-U.S. subsidiaries
 41




---



##### Table of Contents



Fiscal
    Year 2007
    
    Income earned in tax jurisdictions with tax rates lower than the
    U.S. statutory rate, which contributed to an approximate
    ten-percentage point reduction in the effective tax rate for
    fiscal year 2007; and
    A valuation allowance decrease which contributed to an
    approximate two-percentage point reduction in the effective tax
    rate for fiscal year 2007. A decrease in our valuation allowance
    occurred in the fiscal year ended December 28, 2007 because
    we recognized earnings in jurisdictions where we continue to
    maintain a full valuation allowance.    Fiscal
    Year 2006
    
    Income earned in tax jurisdictions with tax rates lower than the
    U.S. statutory rate, which contributed to an approximate
    nine-percentage point reduction in the effective tax rate for
    fiscal year 2006; and
    A valuation allowance decrease which contributed to an
    approximate four-percentage point reduction in the effective tax
    rate for fiscal year 2006. A decrease in our valuation allowance
    occurred in the fiscal year ended December 29, 2006 because
    we recognized earnings in jurisdictions where we continue to
    maintain a full valuation allowance.        EBITDA:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
686,067


$
591,840


$
399,514$ Change


94,227



192,326% Change


15.9
%


48.1
%   Fiscal
    Year 2008 vs. Fiscal Year 2007
    
    Increased contract profit in both our Global E&C Group and
    our Global Power Group mainly driven by the increased volume of
    operating revenues and an incremental benefit from increased
    contract profit margins in both our Global E&C Group and
    our Global Power Group, excluding the impact on contract 42




---



##### Table of Contents



profit margins of flow-through revenues. Please refer to the
    section entitled  Contract Profit above
    for further discussion on contract profit and contract profit
    margins and the impact of flow-through revenues on the contract
    profit margin calculation.  
    An increase in our share of equity earnings in certain of our
    Global E&C Groups projects in Italy of $5,700 in
    fiscal year 2008, of which $3,400 related to reporting periods
    prior to the fiscal year 2008, as a result of a recently enacted
    regulatory ruling that provides for reimbursement of costs
    associated with emission rights.
    A $7,500 increase in contract profit as a result of a commitment
    fee received in fiscal year 2008 for a contract that our Global
    Power Group was not awarded.
    An increase of $1,600 in our share of equity earnings from one
    of our Global Power Groups equity interest investments
    during fiscal year 2008, due to the impact of an increase in
    electric tariff rates in Chile when compared to the fiscal year
    2007 average electric tariff rates.
    The net impact to contract profit for charges of $6,700 and
    $30,000 in fiscal years 2008 and 2007, respectively, on a legacy
    project in our Global Power Group. Please refer to Note 19 to
    the consolidated financial statements in this annual report on
    Form 10-K
    for further information.    
    A $16,500 net foreign exchange loss which primarily
    resulted from the sharp decline in the value of the British
    pound relative to the U.S. dollar.
    A net asbestos-related provision of $6,600 in our C&F Group
    in fiscal year 2008, on the revaluation of our asbestos
    liability and related asset resulting primarily from increased
    asbestos defense costs projected through year-end 2023 of
    $42,700 offset by gains of $36,100 on the settlement of coverage
    litigation with certain insurance carriers. Please refer to the
    above section entitled  Net Asbestos-Related
    (Provision)/Gain, within this Item 7 for further
    information.
    A net asbestos-related gain of $6,100 in our C&F Group in
    fiscal year 2007, related to gains of $13,500 on the settlement
    of coverage litigation with certain asbestos insurance carriers
    and a charge of $7,400 on the revaluation of our asbestos
    liability and related asset. Please refer to the above section
    entitled  Net Asbestos-Related
    (Provision)/Gain, within this Item 7 for further
    information.
    A decrease in our share of equity earnings in certain of our
    Global E&C Groups projects in Italy of $4,900 during
    fiscal year 2008, as a result of a change in tax rates as it
    relates to those projects.
    A charge of $9,000 in our Global Power Group primarily for
    severance-related postemployment benefits in accordance with
    SFAS No. 112. The $9,000 charge decreased contract
    profit by $6,600, increased SG&A expenses by $2,100 and
    increased other deductions, net by $300.
    An increase in SG&A expenses of $37,600 in fiscal year
    2008, compared to fiscal year 2007, inclusive of $2,100 of
    severance-related charges described above.
    A $2,200 impairment charge in our Global E&C Group in
    fiscal year 2008 related to a 15% owned investment in a power
    project development in Italy carried at cost.
    A $14,400 gain in our Global Power Group related to favorable
    resolution of project claims in fiscal year 2007. The $14,400
    gain increased contract profit by $9,600 and interest income by
    $4,000 and reduced other deductions, net by $800.   43




---



##### Table of Contents



Fiscal
    Year 2007 vs. Fiscal Year 2006
    
    Increased volumes of business, strong operating performance, and
    sustained margins by our Global E&C Group and our Global
    Power Group. Please refer to the section entitled
     Contract Profit above for further
    discussion on contract profit margins.
    A $14,400 gain in our Global Power Group related to favorable
    resolution of project claims in fiscal year 2007. The $14,400
    gain increased contract profit by $9,600 and interest income by
    $4,000 and reduced other deductions, net by $800.
    An aggregate charge of $15,000 in fiscal year 2006 in
    conjunction with the voluntary termination of our prior domestic
    senior credit agreement and a net charge of $12,500 in
    conjunction with the debt reduction initiatives completed in
    April and May 2006.    
    A net asbestos-related gain of $6,100 in our C&F Group in
    fiscal year 2007 as compared to a net asbestos-related gain of
    $100,100 in fiscal year 2006. Please refer to the above section
    entitled  Net Asbestos-Related
    (Provision)/Gain, within this Item 7 for further
    information.
    A net impact of $5,000 to contract profit related to charges of
    $30,000 and $25,000 in fiscal years 2007 and 2006, respectively,
    on a legacy project in our Global Power Group. Please refer to
    Note 19 to the consolidated financial statements in this
    annual report on
    Form 10-K
    for further information.      
    It does not include interest expense. Because we have borrowed
    money to finance some of our operations, interest is a necessary
    and ongoing part of our costs and has assisted us in generating
    revenue. Therefore, any measure that excludes interest expense
    has material limitations;
    It does not include taxes. Because the payment of taxes is a
    necessary and ongoing part of our operations, any measure that
    excludes taxes has material limitations; and
    It does not include depreciation and amortization. Because we
    must utilize property, plant and equipment and intangible assets
    in order to generate revenues in our operations, depreciation
    and amortization are necessary and ongoing costs of our
    operations. Therefore, any measure that excludes depreciation
    and amortization has material limitations. 44




---



##### Table of Contents



Global


Global


C&FTotal


E&C Group


Power Group


Group(1)Fiscal Year Ended December 26, 2008EBITDA(2)

$
686,067


$
535,602


$
239,508


$
(89,043
)Less: Interest expense


(17,621
)Less: Depreciation and amortization


(44,798
)Income before income taxes


623,648Provision for income taxes


(97,028
)Net income

$
526,620Fiscal Year Ended December 28, 2007EBITDA(3)

$
591,840


$
505,647


$
139,177


$
(52,984
)Less: Interest expense


(19,855
)Less: Depreciation and amortization


(41,691
)Income before income taxes


530,294Provision for income taxes


(136,420
)Net income

$
393,874Fiscal Year Ended December 29, 2006EBITDA(4)

$
399,514


$
323,297


$
95,039


$
(18,822
)Less: Interest expense


(24,944
)Less: Depreciation and amortization


(30,877
)Income before income taxes


343,693Provision for income taxes


(81,709
)Net income

$
261,984     (1)
    
    Includes general corporate income and expense, our captive
    insurance operation and the elimination of transactions and
    balances related to intercompany interest.(2)
    
    Includes in fiscal year 2008: increased/(decreased) contract
    profit of $26,700 from the regular re-evaluation of final
    estimated contract profits*: $46,300 in our Global E&C
    Group and $(19,600) in our Global Power Group; a charge of
    $9,000 in our Global Power Group primarily for severance-related
    postemployment benefits in accordance with
    SFAS No. 112; and a net charge of $6,600 in our
    C&F Group on the revaluation of our asbestos liability and
    related asset resulting primarily from increased asbestos
    defense costs projected through year-end 2023 of $42,700,
    partially offset by gains of $36,100 on the settlement of
    coverage litigation with certain insurance carriers.(3)
    
    Includes in fiscal year 2007: increased/(decreased) contract
    profit of $35,100 from the regular re-evaluation of final
    estimated contract profits*: $54,500 in our Global E&C
    Group and $(19,400) in our Global Power Group; gains of $13,500
    in our C&F Group on the settlement of coverage litigation
    with certain asbestos insurance carriers; and a charge of $7,400
    in our C&F Group on the revaluation of our asbestos
    liability and related asset resulting primarily from increased
    asbestos defense costs projected through year-end 2022 and from
    our rolling 15 year asbestos liability estimate.(4)
    
    Includes in fiscal year 2006: (decreased)/increased contract
    profit of $(5,700) from the regular re-evaluation of final
    estimated contract profits*: $14,700 in our Global E&C
    Group and $(20,400) in our Global Power Group; net
    asbestos-related gains of $115,700 in our C&F Group
    primarily from the settlement of coverage litigation with
    certain asbestos insurance carriers; a charge of $15,600 in our
    C&F Group on the revaluation of our asbestos liability and
    related asset resulting primarily from increased asbestos
    defense costs projected through year-end 2021 and from our
    rolling 15 year asbestos liability estimate; an aggregate
    charge of $15,000 in our C&F Group in conjunction with the
    voluntary termination of our prior 45




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##### Table of Contents



domestic senior credit agreement; and a net charge of $12,500 in
    our C&F Group in conjunction with the debt reduction
    initiatives completed in April and May 2006.*
    
    Please refer to Revenue Recognition on Long-Term
    Contracts in Note 1 to the consolidated financial
    statements in this annual report on
    Form 10-K
    for further information regarding changes in our final estimated
    contract profits.    Business
    Segments
    Global
    E&C Group
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Operating revenues

$
5,147,227


$
3,681,259


$
2,219,104$ Change


1,465,968



1,462,155% Change


39.8
%


65.9
%EBITDA

$
535,602


$
505,647


$
323,297$ Change


29,955



182,350% Change


5.9
%


56.4
%   Results
    2008 vs 2007





2007 vs 20062008


2007


$ Change


% Change


2006


$ Change


% ChangeAsia

$
1,398,295


$
800,110


$
598,185



75
%

$
317,413


$
482,697



152
%Australasia*


1,731,781



704,121



1,027,660



146
%


615,784



88,337



14
%Europe


847,788



851,961



(4,173
)


(0
)%


618,129



233,832



38
%Middle East


857,944



1,001,193



(143,249
)


(14
)%


467,294



533,899



114
%North America


276,796



253,952



22,844



9
%


137,346



116,606



85
%South America


34,623



69,922



(35,299
)


(50
)%


63,138



6,784



11
%Total

$
5,147,227


$
3,681,259


$
1,465,968



40
%

$
2,219,104


$
1,462,155



66
%     *
    
    Australasia primarily represents Australia, New Zealand, and the
    Pacific islands.    Fiscal
    Year 2008 vs. Fiscal Year 2007
   46




---



##### Table of Contents




    Increased contract profit in our Global E&C Group mainly
    driven by the increased volume of operating revenues, and an
    incremental benefit from increased contract profit margins,
    excluding the impact on contract profit margins of flow-through
    revenues. Please refer to the section entitled
     Contract Profit above for further
    discussion on contract profit and contract profit margins.
    Increased volumes of business due to the strength of the
    industries served and sustained demand for our products and
    services in the geographic markets served. This demand is
    discussed further in the section  Overview of
    Segment below.
    An increase in our share of equity earnings in certain of our
    Global E&C Groups projects in Italy of $5,700 during
    the fiscal year 2008, of which $3,400 related to reporting
    periods prior to the fiscal year 2008, as a result of a
    regulatory ruling enacted during fiscal year 2008 that provides
    for reimbursement of costs associated with emission rights.    
    A $14,800 net foreign exchange loss which primarily
    resulted from the sharp decline in the value of the British
    pound relative to the U.S. dollar.
    A decrease in our share of equity earnings in certain of our
    Global E&C Groups projects in Italy of $4,900 during
    fiscal year 2008, as a result of a change in tax rates as it
    relates to those projects.
    A $2,200 impairment charge in our Global E&C Group in
    fiscal year 2008 related to a 15% owned investment in a power
    project development in Italy carried at cost.  man-hours
  Fiscal
    Year 2007 vs. Fiscal Year 2006
       47




---



##### Table of Contents



Overview
    of Segment
        Global
    Power Group
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Operating revenues

$
1,707,063


$
1,425,984


$
1,275,944$ Change


281,079



150,040% Change


19.7
%


11.8
%EBITDA

$
239,508


$
139,177


$
95,039$ Change


100,331



44,138% Change


72.1
%


46.4
%  48




---



##### Table of Contents



Results
    2008 vs 2007





2007 vs 20062008


2007


$ Change


% Change


2006


$ Change


% ChangeAsia

$
177,088


$
163,896


$
13,192



8
%

$
95,571


$
68,325



71
%Australasia*


13,258



4,952



8,306



168
%


916



4,036



441
%Europe


603,882



478,010



125,872



26
%


379,311



98,699



26
%Middle East


648



5,094



(4,446
)


(87
)%


3,452



1,642



48
%North America


779,413



703,342



76,071



11
%


739,309



(35,967
)


(5
)%South America


132,774



70,690



62,084



88
%


57,385



13,305



23
%Total

$
1,707,063


$
1,425,984


$
281,079



20
%

$
1,275,944


$
150,040



12
%     *
    
    Australasia primarily represents Australia, New Zealand, and the
    Pacific islands.    Fiscal
    Year 2008 vs. Fiscal Year 2007
    
    Increased volumes of business executed during the period. Refer
    to the section  Overview of Segment below
    for a discussion of the strength of the industries served and
    demand for our products and services.
    Our Global Power Group experienced improved contract profit
    margins in fiscal year 2008, as compared to fiscal year 2007,
    excluding the items noted below, which impacted contract profit
    of our Global Power Group.
    A $7,500 increase in contract profit as a result of a commitment
    fee received in fiscal year 2008 for a contract that our Global
    Power Group was not awarded.
    The net impact to contract profit for charges of $6,700 and
    $30,000 in fiscal years 2008 and 2007, respectively, on a legacy
    project in our Global Power Group. Please refer to Note 19 to
    the consolidated financial statements in this annual report on
    Form 10-K
    for further information.
    An increase in our share of equity earnings, from one of our
    Global Power Groups equity interest investments, of
    approximately $1,600 during fiscal year 2008, due to the impact
    of an increase in electric tariff rates in Chile when compared
    to the fiscal year 2007 average electric tariff rates.    
    A charge of $9,000 in our Global Power Group primarily for
    severance-related postemployment benefits in accordance with
    SFAS No. 112. The severance charge results from our
    efforts to right-size our power business to match anticipated
    market conditions in fiscal year 2009. The $9,000 charge
    decreased contract profit by $6,600, increased SG&A
    expenses by $2,100 and increased other deductions, net by $300.
    A $2,200 net foreign exchange loss in fiscal year 2008.
    EBITDA in fiscal year 2007 includes a $14,400 gain related to
    favorable resolution of project claims, which increased contract
    profit by $9,600 and interest income by $4,000 and reduced other
    deductions, net by $800. 49




---



##### Table of Contents



Fiscal
    Year 2007 vs. Fiscal Year 2006
    
    Increased volumes of business, sustained demand for our products
    and services, and increased margins on our contracts executed in
    North America, Europe and China by our Global Power Group.
    EBITDA in fiscal year 2007 included a $14,400 gain related to
    favorable resolution of project claims, which increased contract
    profit by $9,600 and interest income by $4,000 and reduced other
    deductions, net by $800.
    A net charge of $5,000 to contract profit related to charges of
    $30,000 and $25,000 in fiscal years 2007 and 2006, respectively,
    on a legacy project in our Global Power Group. Please refer to
    Note 19 to the consolidated financial statements in this
    annual report on
    Form 10-K
    for further information.  Overview
    of Segment
  and/or
  TM
  Liquidity
    and Capital Resources
  Fiscal
    Year 2008 Activities
   50




---



##### Table of Contents



Cash Flows ImpactIncrease/(Decrease)Cash flows from operating activities

$
428,926Strategic uses of cash and cash equivalents:Repurchase and retirement of common
    shares(1)


(485,589
)FW Power S.r.l. wind farm
    construction(2)


(54,299
)Acquisition of businesses, net of cash
    acquired(2)


(14,856
)Strategic uses of cash flows


(554,744
)Other activities, net


(39,944
)Effect of exchange rate changes on cash and cash equivalents


(109,619
)Decrease in cash and cash equivalents

$
(275,381
)     (1)
    
    See below section entitled  Cash Flows from
    Financing Activities for more information.(2)
    
    See below section entitled  Cash Flows from
    Investing Activities for more information.    As ofDecember 26,


December 28,2008


2007


$ Change


% ChangeCash and cash equivalents

$
773,163


$
1,048,544


$
(275,381
)


(26.3
)%Short-term Investments


2,448







2,448



N/MRestricted cash


22,737



20,937



1,800



8.6
%Total

$
798,348


$
1,069,481


$
(271,133
)


(25.4
)%       non-U.S. subsidiaries.
  Form 10-K
  Cash
    Flows from Operating Activities:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
428,926


$
428,315


$
264,959$ Change

$
611


$
163,356% Change


0.1
%


61.7
%    51




---



##### Table of Contents



non-U.S. pension
        Cash
    Flows from Investing Activities:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
(128,584
)

$
(45,961
)

$
(25,555
)$ Change

$
(82,623
)

$
(20,406
)% Change


179.8
%


79.9
%   Form 10-K
   52




---



##### Table of Contents



Form 10-K.
  Cash
    Flows from Financing Activities:
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Amount

$
(466,104
)

$
35,069


$
(828
)$ Change

$
(501,173
)

$
35,897% Change


(1429.1
)%


N/M       Form 10-K),
      Outlook
  non-U.S. subsidiaries, 12-month and/or
 53




---



##### Table of Contents



non-U.S. subsidiaries non-U.S. subsidiaries
  non-U.S. subsidiaries
      and/or
  non-U.S. pension
   54




---



##### Table of Contents



Form 10-K
      Off-Balance
    Sheet Arrangements
  Form 10-K
 55




---



##### Table of Contents



Contractual
    Obligations
    Less than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt:Principal

$
151,600


$
23,200


$
42,500


$
19,900


$
66,000Interest


50,300



10,000



14,100



9,800



16,400Non-cancelable operating lease commitments


361,900



52,100



79,500



57,200



173,100Purchase commitments


2,952,900



2,878,700



72,800



1,400



Capital lease obligations:Principal


65,800



1,100



2,900



4,000



57,800Interest


68,700



7,300



13,600



12,400



35,400Pension funding requirements 
    U.S.(1)


88,000







40,900



47,100



Pension funding requirements 
    non-U.S.(1)


121,700



24,700



49,100



47,900



Total contractual cash obligations

$
3,860,900


$
2,997,100


$
315,400


$
199,700


$
348,700     (1)
    
    Funding requirements are expected to extend beyond five years;
    however, data for contribution requirements beyond five years
    are not yet available. These projections assume we do not make
    any discretionary contributions.  Form 10-K
  Form 10-K
    More thanTotal


Less than 1 Year


1-3 Years


3-5 Years


5 YearsBank issued letters of credit and guarantees

$
884,600


$
388,400


$
323,300


$
88,500


$
84,400Surety bonds


29,900











29,900



Total commitments

$
914,500


$
388,400


$
323,300


$
118,400


$
84,400   Form 10-K
 56




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##### Table of Contents



Backlog
    and New Orders
      Global


GlobalE&C Group


Power Group


TotalNEW ORDERS (FUTURE REVENUES) BY PROJECT LOCATION:Fiscal Year Ended December 26, 2008:North America

$
352,500


$
571,000


$
923,500South America


153,200



134,300



287,500Europe


981,000



512,800



1,493,800Asia


665,100



117,500



782,600Middle East


216,400



100



216,500Australasia and other


339,300



12,800



352,100Total

$
2,707,500


$
1,348,500


$
4,056,000Fiscal Year Ended December 28, 2007:North America

$
212,300


$
1,028,500


$
1,240,800South America


30,100



144,100



174,200Europe


845,400



649,600



1,495,000Asia


1,468,500



172,800



1,641,300Middle East


437,700



5,300



443,000Australasia and other


3,880,600



7,900



3,888,500Total

$
6,874,600


$
2,008,200


$
8,882,800Fiscal Year Ended December 29, 2006:North America

$
287,000


$
755,400


$
1,042,400South America


11,200



85,900



97,100Europe


735,300



268,500



1,003,800Asia


1,307,200



83,700



1,390,900Middle East


1,043,800



1,600



1,045,400Australasia and other


310,800



1,800



312,600Total

$
3,695,300


$
1,196,900


$
4,892,200 57




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalNEW ORDERS (FUTURE REVENUES) BY INDUSTRY:Fiscal Year Ended December 26, 2008:Power generation

$
43,500


$
1,212,100


$
1,255,600Oil refining


1,523,300







1,523,300Pharmaceutical


110,400







110,400Oil and gas


457,200







457,200Chemical/petrochemical


516,100







516,100Power plant operation and maintenance






136,400



136,400Environmental


24,000







24,000Other, net of eliminations


33,000







33,000Total

$
2,707,500


$
1,348,500


$
4,056,000Fiscal Year Ended December 28, 2007:Power generation

$
96,000


$
1,883,500


$
1,979,500Oil refining


1,218,400







1,218,400Pharmaceutical


81,800







81,800Oil and gas


4,082,100







4,082,100Chemical/petrochemical


1,356,000







1,356,000Power plant operation and maintenance






124,700



124,700Environmental


15,000







15,000Other, net of eliminations


25,300







25,300Total

$
6,874,600


$
2,008,200


$
8,882,800Fiscal Year Ended December 29, 2006:Power generation

$
95,700


$
1,096,100


$
1,191,800Oil refining


1,342,200







1,342,200Pharmaceutical


107,600







107,600Oil and gas


444,500







444,500Chemical/petrochemical


1,593,300







1,593,300Power plant operation and maintenance






100,800



100,800Environmental


87,800







87,800Other, net of eliminations


24,200







24,200Total

$
3,695,300


$
1,196,900


$
4,892,200 58




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalBACKLOG (FUTURE REVENUES) BY CONTRACT TYPE:As of December 26, 2008:Lump-sum turnkey

$
10,100


$
260,900


$
271,000Other fixed-price


338,400



772,000



1,110,400Reimbursable


3,981,200



153,600



4,134,800Eliminations


(2,900
)


(8,900
)


(11,800
)Total

$
4,326,800


$
1,177,600


$
5,504,400As of December 28, 2007:Lump-sum turnkey

$
66,500


$
434,700


$
501,200Other fixed-price


470,900



978,300



1,449,200Reimbursable


7,289,700



191,200



7,480,900Eliminations


(5,100
)


(5,800
)


(10,900
)Total

$
7,822,000


$
1,598,400


$
9,420,400As of December 29, 2006:Lump-sum turnkey

$
194,000


$
256,100


$
450,100Other fixed-price


454,600



637,600



1,092,200Reimbursable


3,886,600



37,500



3,924,100Eliminations


(33,700
)


(1,300
)


(35,000
)Total

$
4,501,500


$
929,900


$
5,431,400 59




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalBACKLOG (FUTURE REVENUES) BY PROJECT LOCATION:As of December 26, 2008:North America

$
212,600


$
518,800


$
731,400South America


139,900



130,500



270,400Europe


672,100



436,900



1,109,000Asia


1,140,000



87,400



1,227,400Middle East


341,900



100



342,000Australasia and other


1,820,300



3,900



1,824,200Total

$
4,326,800


$
1,177,600


$
5,504,400As of December 28, 2007:North America

$
150,900


$
742,900


$
893,800South America


26,200



132,800



159,000Europe


610,700



580,000



1,190,700Asia


2,014,200



137,700



2,151,900Middle East


1,051,900



600



1,052,500Australasia and other


3,968,100



4,400



3,972,500Total

$
7,822,000


$
1,598,400


$
9,420,400As of December 29, 2006:North America

$
205,600


$
459,700


$
665,300South America


55,700



49,200



104,900Europe


599,800



338,700



938,500Asia


1,269,200



80,000



1,349,200Middle East


1,592,300



800



1,593,100Australasia and other


778,900



1,500



780,400Total

$
4,501,500


$
929,900


$
5,431,400     60




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalBACKLOG (FUTURE REVENUES) BY INDUSTRY:As of December 26, 2008:Power generation

$
30,500


$
1,049,500


$
1,080,000Oil refining


1,497,100







1,497,100Pharmaceutical


50,400







50,400Oil and gas


1,872,700







1,872,700Chemical/petrochemical


856,400







856,400Power plant operation and maintenance






128,100



128,100Environmental


7,200







7,200Other, net of eliminations


12,500







12,500Total

$
4,326,800


$
1,177,600


$
5,504,400Foster Wheeler scope in backlog

$
1,374,500


$
1,164,800


$
2,539,300E&C
    man-hours in
    backlog (in thousands)


12,600







12,600As of December 28, 2007:Power generation

$
56,400


$
1,476,600


$
1,533,000Oil refining


1,633,100







1,633,100Pharmaceutical


41,400







41,400Oil and gas


4,078,600







4,078,600Chemical/petrochemical


1,988,000







1,988,000Power plant operation and maintenance






121,800



121,800Environmental


12,700







12,700Other, net of eliminations


11,800







11,800Total

$
7,822,000


$
1,598,400


$
9,420,400Foster Wheeler scope in backlog

$
1,709,100


$
1,585,500


$
3,294,600E&C
    man-hours in
    backlog (in thousands)


13,400







13,400As of December 29, 2006:Power generation

$
122,000


$
812,200


$
934,200Oil refining


1,736,400







1,736,400Pharmaceutical


106,000







106,000Oil and gas


901,700







901,700Chemical/petrochemical


1,576,800







1,576,800Power plant operation and maintenance






117,700



117,700Environmental


61,700







61,700Other, net of eliminations


(3,100
)






(3,100
)Total

$
4,501,500


$
929,900


$
5,431,400Foster Wheeler scope in backlog

$
1,611,500


$
916,700


$
2,528,200E&C
    man-hours in
    backlog (in thousands)


11,600







11,600  61




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##### Table of Contents



Inflation
    Application
    of Critical Accounting Estimates
      Revenue
    Recognition
      man-hours.
    (man-hours),
   62




---



##### Table of Contents



and/or
    Asbestos
      United States
    year-end
  and/or
 63




---



##### Table of Contents



64




---



##### Table of Contents



Approximate ChangeChanges (Increase or Decrease) in Assumption:

in LiabilityOne-percentage point change in the inflation rate related to the
    indemnity and defense costs

$
21,900Twenty-five percent change in average indemnity settlement amount


59,800Twenty-five percent change in forecasted number of new claims


56,900       United Kingdom
    Defined
    Benefit Pension and Other Postretirement Benefit Plans
     65




---



##### Table of Contents



Form 10-K
    
    The discount rate used to calculate the present value of future
    obligations;
    The expected long-term rate of return on plan assets;
    The expected rate of annual salary increases;
    The selection of the actuarial mortality tables;
    The annual healthcare cost trend rate (only for the other
    postretirement benefit plans); and
    The annual inflation rate.      Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006United


United





United


United





United


UnitedStates


Kingdom


Other


States


Kingdom


Other


States


Kingdom


OtherWeighted-average assumptions  net periodic benefit
    cost:Discount rate


6.31
%


5.74
%


5.24
%


5.81
%


5.14
%


4.50
%


5.45
%


4.86
%


4.60
%Long-term rate of return


7.90
%


6.86
%


7.00
%


8.00
%


6.94
%


7.50
%


8.00
%


6.84
%


7.50
%Salary growth


N/A



4.28
%


3.10
%


N/A



3.83
%


2.35
%


N/A



3.84
%


3.21
%Weighted-average assumptions  projected benefit
    obligations:Discount rate


6.23
%


6.21
%


6.39
%


6.31
%


5.72
%


5.30
%Salary growth


N/A



3.53
%


3.17
%


N/A



4.12
%


3.47
%          66




---



##### Table of Contents



Approximate Increase (Decrease)Impact on 2009Impact on Liabilities


Benefit CostU.S. Pension Plans:One-tenth of a percentage point increase in the discount rate

$
(3,037
)

$
19One-tenth of a percentage point decrease in the discount rate


3,065



(22
)One-tenth of a percentage point increase in the expected return
    on plan assets






(217
)One-tenth of a percentage point decrease in the expected return
    on plan assets






217U.K. Pension Plans:One-tenth of a percentage point increase in the discount rate

$
(8,896
)

$
(1,289
)One-tenth of a percentage point decrease in the discount rate


8,896



1,302One-tenth of a percentage point increase in the expected return
    on plan assets






(656
)One-tenth of a percentage point decrease in the expected return
    on plan assets






656   non-U.S. plans
     67




---



##### Table of Contents



Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Weighted-average assumptions  net periodic
    postretirement benefit cost:Discount rate


6.23
%


5.73
%


5.39
%Weighted-average assumptions  accumulated
    postretirement benefit obligation:Discount rate


6.28
%


6.20
%       Share-Based
    Compensation Plans
          
    Expected volatility  we estimate the volatility of
    our common share price at the date of grant using historical
    volatility adjusted for periods of unusual stock price activity. 68




---



##### Table of Contents




    Expected term  we estimate the expected term of
    options using the simplified method, as outlined in
    Staff Accounting Bulletin No. 107, Share-Based
    Payment.
    Risk-free interest rate  we estimate the risk-free
    interest rate using the U.S. Treasury yield curve for
    periods equal to the expected term of the options in effect at
    the time of grant.
    Dividends  we use an expected dividend yield of zero
    because we have not declared or paid a cash dividend since July
    2001 and we do not have any plans to declare or pay any cash
    dividends.        Goodwill
    and Intangible Assets
     69




---



##### Table of Contents



Income
    Taxes
        non-U.S. jurisdictions 12-month non-U.S. income
  non-U.S. tax
       70




---



##### Table of Contents



Accounting
    Developments
       71




---



##### Table of Contents



Form 10-K
     ITEM 7A. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    (amounts in thousands of dollars)



Interest Rate Risk  We are exposed to changes
    in interest rates should we need to borrow under our domestic
    senior credit agreement (there were no such borrowings as of
    December 26, 2008 and, based on current operating plans and
    cash flow forecasts, none are expected in fiscal year
    2009) and, to a limited extent, under our variable rate
    special-purpose limited recourse project debt for any portion of
    the debt for which we have not entered into a fixed rate swap
    agreement. If average market rates are 100-basis points higher
    in the next twelve months, our interest expense for such period
    of time would increase, and our income before income taxes would
    decrease, by approximately $400. This amount has been determined
    by considering the impact of the hypothetical interest rates on
    our variable rate borrowings as of December 26, 2008 and
    does not reflect the impact of interest rate changes on
    outstanding debt held by certain of our equity interests since
    such debt is not consolidated on our balance sheet.



Foreign Currency Risk  We operate on a
    worldwide basis with substantial operations in Europe that
    subject us to translation risk on the Euro and British pound. As
    part of our policies we do not hedge translation risk exposure.
    All significant activities of our
    non-U.S. affiliates
    are recorded in their functional currency, which is typically
    the country of domicile of the affiliate. While this mitigates
    the potential impact of earnings fluctuations as a result of
    changes in foreign currency exchange rates, our affiliates do
    enter into transactions through the normal course of operations
    in currencies other than their functional currency. We seek to
    minimize the resulting exposure to foreign currency fluctuations
    by matching the revenues and expenses in the same currency for
    our long-term contracts.



We further mitigate these foreign currency exposures through the
    use of foreign currency forward exchange contracts to hedge the
    exposed item, such as anticipated purchases or revenues, back to
    their

72




---



##### Table of Contents



Form 10-K
    Hedged Foreign


Notional Amount of


Notional Amount ofCurrency Exposure


Forward Buy Contracts


Forward Sell ContractsCurrency Hedged

Functional


(in equivalent


(in equivalent


(in equivalent(bought or sold forward)

Currency


U.S. dollars)


U.S. dollars)


U.S. dollars)Euro


British pound


$
770


$



$
770Canadian dollar



1,168



1,168



Chilean peso



1,051







1,051Chinese renminbi



1,523







1,523Australian dollar


British pound



12,717







12,717British pound


Singapore dollar



2,488







2,488Thai baht



131



131



Canadian dollar


Euro



4,714



4,714



Chinese renminbi


U.S. dollar



108,712



108,712



Polish zloty


Euro



71,112



71,112



South African rand


British pound



3,407







3,407U.S. dollar


British pound



113,103



3,254



109,849Chinese renminbi



22,297







22,297Euro



33,138



14,293



18,845Total


$
376,331


$
203,384


$
172,947   Form 10-K
 73




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Index to
    Financial Statements
   
 PageReport of Independent Registered Public
    Accounting Firm


75Consolidated Statement of Operations


76Consolidated Balance Sheet


77Consolidated Statement of Changes in
    Shareholders Equity


78Consolidated Statement of Comprehensive Income


79Consolidated Statement of Cash Flows


80Notes to Consolidated Financial Statements


82Financial Statement Schedule


141   74




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm    Internal Control  Integrated
    Framework Form 10-K.
        PricewaterhouseCoopers
    LLP
    75




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF OPERATIONS
 (in thousands of dollars, except per share amounts)
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Operating revenues

$
6,854,290


$
5,107,243


$
3,495,048Cost of operating revenues


(5,958,644
)


(4,362,922
)


(2,987,261
)Contract profit


895,646



744,321



507,787Selling, general and administrative expenses


(283,883
)


(246,237
)


(225,330
)Other income, net


53,001



61,410



48,610Other deductions, net


(54,382
)


(45,540
)


(45,453
)Interest income


44,743



35,627



15,119Interest expense


(17,621
)


(19,855
)


(24,944
)Minority interest in income of consolidated affiliates


(7,249
)


(5,577
)


(4,789
)Net asbestos-related (provision)/gain


(6,607
)


6,145



100,131Prior domestic senior credit agreement fees and expenses










(14,955
)Loss on debt reduction initiatives










(12,483
)Income before income taxes


623,648



530,294



343,693Provision for income taxes


(97,028
)


(136,420
)


(81,709
)Net income

$
526,620


$
393,874


$
261,984Earnings per common share (see Note 1):Basic

$
3.73


$
2.78


$
1.82Diluted

$
3.68


$
2.72


$
1.72    76




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEET
 (in thousands of dollars, except share data and per share
    amounts)
  December 26,


December 28,2008


2007ASSETSCurrent Assets:Cash and cash equivalents

$
773,163


$
1,048,544Short-term investments


2,448



Accounts and notes receivable, net:Trade


608,994



580,883Other


95,633



98,708Contracts in process


241,135



239,737Prepaid, deferred and refundable income taxes


31,667



36,532Other current assets


37,146



39,979Total current assets


1,790,186



2,044,383Land, buildings and equipment, net


383,209



337,485Restricted cash


22,737



20,937Notes and accounts receivable  long-term


1,788



2,941Investments in and advances to unconsolidated affiliates


210,776



198,346Goodwill


62,165



53,345Other intangible assets, net


59,874



61,190Asbestos-related insurance recovery receivable


281,540



324,588Other assets


82,223



93,737Deferred income taxes


116,756



112,036TOTAL ASSETS

$
3,011,254


$
3,248,988LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS
    EQUITYCurrent Liabilities:Current installments on long-term debt

$
24,375


$
19,368Accounts payable


365,347



372,531Accrued expenses


303,813



331,814Billings in excess of costs and estimated earnings on
    uncompleted contracts


750,233



744,236Income taxes payable


44,846



55,824Total current liabilities


1,488,614



1,523,773Long-term debt


192,989



185,978Deferred income taxes


66,114



81,008Pension, postretirement and other employee benefits


320,959



290,741Asbestos-related liability


355,779



376,803Other long-term liabilities


157,933



185,143Minority interest


28,718



31,773Commitments and contingenciesTOTAL LIABILITIES


2,611,106



2,675,219Temporary Equity:Non-vested share-based compensation awards subject to redemption


7,586



2,728TOTAL TEMPORARY EQUITY


7,586



2,728Shareholders Equity:Preferred shares:$0.01 par value; authorized: December 26,
    2008  901,135 shares and December 28,
    2007  901,943 shares; issued and outstanding:
    December 26, 2008  1,079 shares and
    December 28, 2007  1,887 shares






Common shares:$0.01 par value; authorized: December 26,
    2008  296,007,818 shares and December 28,
    2007  296,007,011 shares; issued and
    outstanding: December 26, 2008 - 126,177,611 shares
    and December 28, 2007  143,877,804 shares


1,262



1,439Paid-in capital


914,063



1,385,311Accumulated deficit


(27,975
)


(554,595
)Accumulated other comprehensive loss


(494,788
)


(261,114
)TOTAL SHAREHOLDERS EQUITY


392,562



571,041TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS
    EQUITY

$
3,011,254


$
3,248,988    77




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
 (in thousands of dollars, except share data)
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Shares


Amount


Shares


Amount


Shares


AmountPreferred Shares:Balance at beginning of year


1,887


$




3,658


$




4,195


$
Preferred shares converted into common shares


(808
)






(1,771
)






(537
)


Balance at end of year


1,079


$




1,887


$




3,658


$
Common Shares:Balance at beginning of year


143,877,804


$
1,439



138,182,948


$
1,382



114,924,524


$
1,150Retirement of common shares purchased under common share
    repurchase program


(18,098,519
)


(181
)














Issuance of common shares upon exercise of common share purchase
    warrants


88,762



1



1,801,798



18



16,888,556



169Issuance of common shares upon equity-for-debt exchanges


















2,555,800



26Issuance of common shares upon exercise of stock options


142,038



1



2,976,020



30



3,046,430



30Issuance of common shares related to restricted awards


62,486



1



686,818



7



701,614



7Cancellation of common shares upon forfeiture of restricted
    awards


















(4,952
)


Issuance of common shares upon conversion of preferred shares


105,040



1



230,220



2



70,976



Balance at end of year


126,177,611


$
1,262



143,877,804


$
1,439



138,182,948


$
1,382Paid-in Capital:Balance at beginning of year





$
1,385,311






$
1,348,800






$
1,186,943Retirement of common shares purchased under common share
    repurchase program






(485,408
)














Issuance of common shares upon exercise of common share purchase
    warrants






413







8,430







75,514Issuance of common shares upon equity-for-debt exchanges






















58,737Issuance of common shares upon exercise of stock options






2,790







18,046







17,565Issuance of common shares related to restricted awards






(1
)






(7
)






(7
)Share-based compensation expense-stock options and restricted
    awards






10,909







5,350







15,491Excess tax benefit related to share-based compensation






50







4,694







2,915Reclassification of unearned compensation balance upon adoption
    of SFAS No. 123R






















(8,358
)Issuance of common shares upon conversion of preferred shares






(1
)






(2
)






Balance at end of year





$
914,063






$
1,385,311






$
1,348,800Accumulated Deficit:Balance at beginning of year





$
(554,595
)





$
(944,113
)





$
(1,206,097
)Cumulative effect of adoption of FIN 48














(4,356
)






Balance at beginning of year, as adjusted






(554,595
)






(948,469
)






(1,206,097
)Net income for the year






526,620







393,874







261,984Balance at end of year





$
(27,975
)





$
(554,595
)





$
(944,113
)Accumulated Other Comprehensive Loss:Balance at beginning of year





$
(261,114
)





$
(343,342
)





$
(314,796
)Foreign currency translation adjustments






(68,747
)






31,939







31,612Net (losses)/gains on derivative instruments designated as cash
    flow hedges (net of tax benefit/(provision): 2008 
    $3,280; 2007  $(432); 2006  $(203))






(8,645
)






1,331







342Defined benefit pension and other postretirement plans:Adjustment resulting from the adoption of SFAS No. 158
    (net of tax benefit: 2006  $54,364)






















(100,587
)Pension and other postretirement benefits (net of tax benefit/
    (provision): 2008  $8,278; 2007 
    $(12,635); 2006  $(4,674))






(156,282
)






48,958







40,087Balance at end of year





$
(494,788
)





$
(261,114
)





$
(343,342
)Unearned Compensation:Balance at beginning of year





$







$







$
(8,358
)Reclassification of unearned compensation balance upon adoption
    of SFAS No. 123R






















8,358Balance at end of year





$







$







$
Total Shareholders Equity





$
392,562






$
571,041






$
62,727    78




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENT OF COMPREHENSIVE INCOME
 (in thousands of dollars)
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Net income

$
526,620


$
393,874


$
261,984Foreign currency translation adjustments


(68,747
)


31,939



31,612Net (losses)/gains on derivative instruments designated as cash
    flow hedges (net of tax benefit/(provision): 2008 
    $3,280; 2007  $(432); 2006  $(203))


(8,645
)


1,331



342Pension and other postretirement benefits (net of tax benefit/
    (provision): 2008  $8,278; 2007 
    $(12,635); 2006  $(4,674))


(156,282
)


48,958



40,087Comprehensive income

$
292,946


$
476,102


$
334,025    79




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES



CONSOLIDATED
    STATEMENT OF CASH FLOWS

(in
    thousands of dollars, except share data)  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
526,620


$
393,874


$
261,984Adjustments to reconcile net income to cash flows from operating
    activities:Depreciation and amortization


44,798



41,691



30,877Net asbestos-related provision/(gains)


42,727



7,374



(66,603
)Loss on debt reduction initiatives










5,206Prior domestic senior credit agreement fees and expenses










9,488Share-based compensation expense-stock options and restricted
    awards


15,766



7,095



16,474Excess tax benefit related to share-based compensation


(50
)


(4,694
)


(2,796
)Deferred tax (benefit)/provision


(35,060
)


31,937



14,302Loss/(gain) on sale of assets


1,107



(7,657
)


(1,464
)Equity in the net earnings of partially-owned affiliates, net of
    dividends


(10,352
)


(18,897
)


(7,837
)Other noncash items


(2,302
)


(669
)


(3,257
)Changes in assets and liabilities:Increase in receivables


(105,591
)


(83,930
)


(225,158
)Net change in contracts in process and billings in excess of
    costs and estimated earnings on uncompleted contracts


15,817



25,833



177,350Increase in accounts payable and accrued expenses


35,509



123,968



39,908(Decrease)/increase in income taxes payable


(778
)


(7,295
)


27,614Decrease in pension, postretirement and other employee benefits


(89,364
)


(48,403
)


(17,707
)Net change in asbestos-related assets and liabilities


(19,362
)


(32,559
)


(27,017
)Net change in other assets and liabilities


9,441



647



33,595Net cash provided by operating activities


428,926



428,315



264,959CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of businesses, net of cash acquired


(14,856
)


(6,319
)


457Change in restricted cash


(2,800
)


(856
)


8,940Capital expenditures


(103,965
)


(51,295
)


(30,293
)Proceeds from sale of assets


831



7,567



1,914Investments in and advances to unconsolidated affiliates


(7,620
)


(1,382
)


(6,573
)Return of investment from unconsolidated affiliates


2,330



6,324



Increase in short-term investments


(2,504
)






Net cash used in investing activities


(128,584
)


(45,961
)


(25,555
)  80




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENT OF CASH FLOWS
    (in thousands of dollars, except share data)(Continued)
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006CASH FLOWS FROM FINANCING ACTIVITIESRepurchase and retirement of common shares


(485,589
)






Distributions to minority third-party ownership interests


(9,625
)


(5,179
)


(3,248
)Proceeds from common share purchase warrant exercises


414



8,448



75,683Proceeds from stock option exercises


2,791



18,076



17,595Excess tax benefit related to share-based compensation


50



4,694



2,796Payment of deferred financing costs










(5,710
)Proceeds from issuance of short-term debt


3,658







Proceeds from issuance of long-term debt


50,939



15,628



2,138Repayment of long-term debt and capital lease obligations


(28,742
)


(6,598
)


(90,082
)Net cash (used in)/provided by financing activities


(466,104
)


35,069



(828
)Effect of exchange rate changes on cash and cash equivalents


(109,619
)


20,234



21,642(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS


(275,381
)


437,657



260,218Cash and cash equivalents at beginning of year


1,048,544



610,887



350,669CASH AND CASH EQUIVALENTS AT END OF YEAR

$
773,163


$
1,048,544


$
610,887Cash paid during the year for:Interest (net of amount capitalized)

$
13,436


$
13,384


$
25,102Income taxes

$
130,147


$
111,279


$
38,611   NON-CASH
    FINANCING ACTIVITIES
     81




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts in thousands of dollars, except share data and per
    share amounts)
  1.
    Summary
    of Significant Accounting Policies  Basis of Presentation 
    Principles of Consolidation non-U.S. subsidiaries
  non-U.S. operations.
  Capital Alterations Basis of Presentation
    Use of Estimates
  Revenue Recognition on Long-Term Contracts
 82




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    man-hours.
    and/or
    81-1, SOP 81-1,
 83




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)        Cash and Cash Equivalents non-U.S. subsidiaries
  Short-Term Investments 
  Trade Accounts Receivable
    Contracts in Process and Billings in Excess of Costs and
    Estimated Earnings on Uncompleted Contracts
  Inventories
  Land, Buildings and Equipment
 84




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Restricted Cash
  December 26, 2008


December 28, 2007Non-U.S.


U.S.


Total


Non-U.S.


U.S.


TotalHeld by special-purpose entities and restricted for debt service
    payments

$
14,493


$
286


$
14,779


$
5,766


$
257


$
6,023Held to collateralize letters of credit and bank guarantees


670







670



6,800







6,800Client dedicated accounts


5,531



1,757



7,288



6,787



1,327



8,114Total

$
20,694


$
2,043


$
22,737


$
19,353


$
1,584


$
20,937   Investments in and Advances to Unconsolidated
    Affiliates
  Intangible Assets
     85




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)        December 26, 2008


December 28, 2007Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountPatents

$
39,180


$
(23,024
)

$
16,156


$
39,375


$
(21,026
)

$
18,349Trademarks


63,347



(22,543
)


40,804



63,344



(20,503
)


42,841Customer relationships and backlog


3,592



(678
)


2,914











Total

$
106,119


$
(46,245
)

$
59,874


$
102,719


$
(41,529
)

$
61,190     Income Taxes
  non-U.S. subsidiary non-U.S. subsidiaries,
   86




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)      Foreign Currency non-U.S. operations non-U.S. subsidiaries
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Net foreign currency transaction losses

$
(16,543
)

$
(2,640
)

$
(1,719
)Net foreign currency transaction losses, net of tax

$
(10,753
)

$
(1,716
)

$
(1,117
)   Interest Rate Risk
  Fair Value Measurements
 87




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)        
    Level 1:  Quoted prices are available in active
    markets for identical assets or liabilities as of the reporting
    date.
    Level 2:  Pricing inputs are other than quoted
    prices in active markets included in Level 1, which may
    include quoted prices for similar instruments in active markets,
    quoted prices for identical or similar instruments in markets
    that are not active or model-derived valuations whose inputs are
    observable or whose significant value drivers are observable,
    either directly or indirectly through market corroboration, for
    substantially the full term of the financial instrument.
    Level 2 instruments are valued based on pricing inputs as
    of the reporting date.
    Level 3:  Pricing inputs include significant
    inputs that are generally less observable from objective
    sources. These inputs may be used with internally developed
    methodologies that result in managements best estimate of
    fair value from the perspective of a market participant.      December 26,2008Assets:Foreign currency forward contracts

$
3,883Liabilities:Foreign currency forward contracts


21,711Interest rate swap contracts


9,617   External Legal Fees
 88




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)  Restrictions on Shareholders Dividends
  Retirement of Common Shares under Common Share Repurchase
    Program
      Earnings per Common Share
     89




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)        Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Net income

$
526,620


$
393,874


$
261,984Fair value of additional shares issued as part of warrant offers










(19,445
)Net income attributable to common shareholders

$
526,620


$
393,874


$
242,539Basic earnings per common share:Net income attributable to common shareholders

$
526,620


$
393,874


$
242,539Weighted-average number of common shares outstanding for basic
    earnings per common share


141,149,590



141,661,046



132,996,384Basic earnings per common share

$
3.73


$
2.78


$
1.82Diluted earnings per common share:Net income attributable to common shareholders

$
526,620


$
393,874


$
242,539Weighted-average number of common shares outstanding for basic
    earnings per common share


141,149,590



141,661,046



132,996,384Effect of dilutive securities:Options to purchase common shares


1,228,170



1,082,254



2,997,096Warrants to purchase common shares


574,591



1,790,072



3,443,376Non-vested portion of restricted awards


151,679



214,850



1,781,120Weighted-average number of common shares outstanding for diluted
    earnings per common share


143,104,030



144,748,222



141,217,976Diluted earnings per common share

$
3.68


$
2.72


$
1.72  90




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)   Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Common shares issuable under outstanding options not included in
    the computation of diluted earnings per common share because the
    assumed proceeds were greater than our average common share
    price for the period


522,566



347,698



1,372,582   Share-Based Compensation Plans
    
    Expected volatility  we estimate the volatility of
    our common share price at the date of grant using historical
    volatility adjusted for periods of unusual stock price activity.
    Expected term  we estimate the expected term using
    the simplified method, as outlined in Staff
    Accounting Bulletin No. 107, Share-Based
    Payment.
    Risk-free interest rate  we estimate the risk-free
    interest rate using the U.S. Treasury yield curve for
    periods equal to the expected term of the options in effect at
    the time of grant.
    Dividends  we use an expected dividend yield of zero
    because we have not declared or paid a cash dividend since July
    2001 and we do not have any plans to declare or pay any cash
    dividends.   Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Expected volatility


57
%


44
%


44
%Expected term


3.6 years



3.5 years



4.1 yearsRisk-free interest rate


1.88
%


3.63
%


4.81
%Expected dividend yield


0
%


0
%


0
%    91




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Recent Accounting Developments
     92




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)      No. FSP-FAS 132(R)-1,
  2.
    Business
    Combinations     93




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   2.
    Business
    Combinations  (Continued)        3.
    Accounts
    and Notes Receivable    December 26,


December 28,2008


2007From long-term contracts:Amounts billed due within one year

$
539,423


$
548,290Billed retention:Estimated to be due in:2008






16,5572009


60,204



4,1412010


13,140



19,7492011


8,902



2,0682012






1,000Total billed retention


82,246



43,515Total receivables from long-term contracts


621,669



591,805Other trade accounts and notes receivable


1,169



1,476Trade accounts and notes receivable, gross


622,838



593,281Less: allowance for doubtful accounts


(13,844
)


(12,398
)Trade accounts and notes receivable, net

$
608,994


$
580,883     December 26,


December 28,2008


2007Asbestos insurance receivable

$
41,012


$
50,076Foreign refundable value-added tax


30,412



25,071Other


24,209



23,561Other accounts and notes receivable, net

$
95,633


$
98,708  94




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  4.
    Land,
    Buildings and Equipment    December 26,


December 28,2008


2007Land and land improvements

$
27,842


$
25,548Buildings


153,689



154,753Furniture, fixtures and equipment


528,095



541,091Construction in progress


64,064



13,007Land, buildings and equipment, gross


773,690



734,399Less: accumulated depreciation


(390,481
)


(396,914
)Land, buildings and equipment, net

$
383,209


$
337,485       5.
    Equity
    Interests    December 26, 2008


December 28, 2007Italian


Chilean


Italian


ChileanProjects


Project


Projects


ProjectBalance Sheet Data :Current assets

$
288,387


$
66,991


$
294,482


$
49,353Other assets (primarily buildings and equipment)


618,083



137,007



656,796



146,665Current liabilities


63,227



26,319



72,009



21,044Other liabilities (primarily long-term debt)


535,954



70,950



576,545



81,696Net assets


307,289



106,729



302,724



93,278   95




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   5.
    Equity
    Interests  (Continued)  Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006Italian


Chilean


Italian


Chilean


Italian


ChileanProjects


Project


Projects


Project


Projects


ProjectIncome Statement Data:Total revenues

$
439,455


$
88,586


$
319,611


$
70,427


$
304,786


$
43,462Gross profit


95,492



53,161



75,549



42,234



72,070



21,198Income before income taxes


69,208



47,445



56,917



35,391



69,096



15,012Net earnings


29,028



39,379



45,684



30,258



41,365



16,025                 6.
    Equity-for-Debt
    Exchanges   96




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  7.
    Long-term
    Debt    December 26, 2008


December 28, 2007Current


Long-term


Total


Current


Long-term


TotalCapital Lease Obligations

$
1,147


$
64,641


$
65,788


$
1,318


$
67,095


$
68,413Special-Purpose Limited Recourse Project Debt:Camden County Energy Recovery Associates


9,914



21,865



31,779



9,648



31,779



41,427FW Power S.r.l.


4,562



88,750



93,312







45,041



45,041Energia Holdings, LLC


4,675



16,426



21,101



4,144



21,101



25,245Subordinated Robbins Facility Exit Funding Obligations:1999C Bonds at 7.25% interest, due October 15, 2009


19







19



18



19



371999C Bonds at 7.25% interest, due October 15, 2024






1,283



1,283







20,491



20,4911999D Accretion Bonds at 7% interest, due October 15, 2009


307







307







286



286Intermediate Term Loans in China at 7.02% interest














4,107







4,107Term Loan in China at 6.57% interest,due December 29, 2008


3,654







3,654











Other


97



24



121



133



166



299Total

$
24,375


$
192,989


$
217,364


$
19,368


$
185,978


$
205,346   Domestic Senior Credit Agreement non-U.S. operations. and/or
   97




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   7.
    Long-term
    Debt  (Continued)      and/or non-U.S. subsidiaries
      Prior Domestic enior Credit Agreement non-U.S. operations.
  Capital Lease Obligations
  December 26,


December 28,2008


2007Buildings and improvements

$
46,258


$
48,565Less: accumulated amortization


(12,807
)


(11,462
)Net assets under capital lease obligations

$
33,451


$
37,103  98




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   7.
    Long-term
    Debt  (Continued)    Fiscal years:2009

$
8,4622010


8,1722011


8,4452012


8,2192013


8,149Thereafter


93,035Less: interest


(68,694
)Net minimum lease payments under capital lease obligations


65,788Less: current portion of net minimum lease payments


(1,147
)Long-term portion of net minimum lease payments

$
64,641   Special-Purpose Limited Recourse Project Debt and/or
    6-month 6-month
  6-month 6-month
     99




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   7.
    Long-term
    Debt  (Continued)      Subordinated Robbins Facility Exit Funding Obligations
    (Robbins bonds)
      Intermediate Term Loans in China at 7.02% interest
    (intermediate term loans)
  Term Loans in China at 6.57% interest (China term
    loan)
  Convertible Subordinated Notes at 6.50% interest, due
    June 1, 2007 (convertible notes)
  Interest Costs
 100




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   7.
    Long-term
    Debt  (Continued)  Aggregate Maturities
  Fiscal Years2009


2010


2011


2012


2013


Thereafter


TotalSpecial-Purpose Limited Recourse Project Debt:Camden County Energy Recovery Associates

$
9,914


$
21,865


$



$



$



$



$
31,779FW Power S.r.l.


4,562



7,821



7,562



8,353



7,729



57,285



93,312Energia Holdings, LLC


4,675



3,188



2,019



1,912



1,912



7,395



21,101Subordinated Robbins Facility Exit Funding Obligations:1999C Bonds at 7.25% interest, due October 15, 2009


19























191999C Bonds at 7.25% interest, due October 15, 2024






















1,283



1,2831999D Accretion Bonds at 7% interest, due October 15, 2009


307























307Term Loan in China at 6.57% interest,due December 29, 2008


3,654























3,654Other


97



24



















121Total

$
23,228


$
32,898


$
9,581


$
10,265


$
9,641


$
65,963


$
151,576   8.
    Pensions
    and Other Postretirement Benefits      Defined Benefit Pension Plans
 101




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)  Defined
    benefit pension obligations and funded status:
  Fiscal Year Ended December 26, 2008


Fiscal Year Ended December 28, 2007United


United








United


UnitedStates


Kingdom


Other


Total


States


Kingdom


Other


TotalChange in projected benefit obligations:Projected benefit obligations at beginning of year

$
326,811


$
903,535


$
39,280


$
1,269,626


$
336,496


$
876,686


$
34,175


$
1,247,357Service cost






10,451



691



11,142







14,073



620



14,693Interest cost


19,962



47,683



1,882



69,527



19,031



45,348



1,671



66,050Plan participants contributions






7,067







7,067







8,123







8,123Plan amendments






40,103







40,103















Actuarial loss/(gain)


5,645



(113,437
)


(2,534
)


(110,326
)


(5,690
)


(19,912
)


344



(25,258
)Benefits paid


(22,819
)


(32,938
)


(3,518
)


(59,275
)


(23,026
)


(36,507
)


(3,307
)


(62,840
)Special termination benefits/other






2,247



(1,818
)


429







(1,213
)






(1,213
)Foreign currency exchange rate changes






(235,360
)


(5,519
)


(240,879
)






16,937



5,777



22,714Projected benefit obligations at end of year


329,599



629,351



28,464



987,414



326,811



903,535



39,280



1,269,626Change in plan assets:Fair value of plan assets at beginning of year


330,238



736,628



25,687



1,092,553



283,857



673,131



22,061



979,049Actual return on plan assets


(97,808
)


(77,216
)


(3,107
)


(178,131
)


24,384



47,760



(20
)


72,124Employer contributions


20,020



82,153



3,433



105,606



45,023



32,404



2,857



80,284Plan participants contributions






7,067







7,067







8,123







8,123Benefits paid


(22,819
)


(32,938
)


(3,518
)


(59,275
)


(23,026
)


(36,507
)


(3,307
)


(62,840
)Other






1,616



(1,818
)


(202
)






(1,212
)






(1,212
)Foreign currency exchange rate changes






(194,829
)


(4,371
)


(199,200
)






12,929



4,096



17,025Fair value of plan assets at end of year


229,631



522,481



16,306



768,418



330,238



736,628



25,687



1,092,553Funded status at end of year

$
(99,968
)

$
(106,870
)

$
(12,158
)

$
(218,996
)

$
3,427


$
(166,907
)

$
(13,593
)

$
(177,073
)     December 26,


December 28,2008


2007Other assets

$



$
3,839Current liabilities


(589
)


(730
)Non-current liabilities


(218,407
)


(180,182
)Funded status at end of year

$
(218,996
)

$
(177,073
)  102




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)    December 26,


December 28,2008


2007Net actuarial loss

$
467,660


$
347,580Prior service cost


68,452



33,417Net transition asset


(151
)


(112
)Total

$
535,961


$
380,885     Accumulated
    benefit obligation:
    Information
    for defined benefit pension plans with an accumulated benefit
    obligation in excess of plan assets:
  December 26,


December 28,2008(1)


2007(1)(2)Projected benefit obligation

$
980,644


$
934,211Accumulated benefit obligation


883,010



761,967Fair value of plan assets


760,251



749,912     (1)
    
    Balances for the fiscal years ended December 26, 2008 and
    December 28, 2007 do not include information for one of the
    United Kingdom plans since the plan assets of that plan exceeded
    the accumulated benefit obligation.(2)
    
    Balances for the fiscal year ended December 28, 2007 do not
    include information for the U.S. plans since the plan assets of
    these plans had exceeded the accumulated benefit obligation. 103




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)   Components
    of net periodic benefit cost and other changes recognized in
    other comprehensive income/(loss):
  Fiscal Years Ended


Fiscal Years Ended


Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006United States


United Kingdom


Other


Total


United States


United Kingdom


Other


Total


United States


United Kingdom


Other


TotalNet periodic benefit cost:Service cost

$



$
10,451


$
691


$
11,142


$



$
14,073


$
620


$
14,693


$



$
15,590


$
951


$
16,541Interest cost


19,962



47,683



1,882



69,527



19,031



45,348



1,671



66,050



18,578



36,079



1,684



56,341Expected return on plan assets


(24,142
)


(46,788
)


(1,594
)


(72,524
)


(22,064
)


(48,200
)


(1,762
)


(72,026
)


(18,125
)


(40,100
)


(1,563
)


(59,788
)Amortization of transition (asset)/ obligation






(54
)


93



39







(66
)


93



27







(64
)


87



23Amortization of prior service cost






4,807



19



4,826







5,195



19



5,214







4,941



17



4,958Amortization of net actuarial loss


2,787



16,289



400



19,476



3,285



17,530



479



21,294



4,262



17,239



912



22,413SFAS No. 87 net periodic benefit cost


(1,393
)


32,388



1,491



32,486



252



33,880



1,120



35,252



4,715



33,685



2,088



40,488SFAS No. 88 cost*






242



644



886























276



21



297Total net periodic benefit cost/(income)

$
(1,393
)

$
32,630


$
2,135


$
33,372


$
252


$
33,880


$
1,120


$
35,252


$
4,715


$
33,961


$
2,109


$
40,785Changes recognized in other comprehensive income/(loss):Net actuarial (gain)/loss

$
127,595


$
10,674


$
1,287


$
139,556


$
(8,008
)

$
(19,435
)

$
1,927


$
(25,516
)

$



$



$



$
Plan amendment






39,861







39,861































Amortization of transition asset/ (obligation)






54



(93
)


(39
)






66



(93
)


(27
)














Amortization of prior service cost






(4,807
)


(19
)


(4,826
)






(5,195
)


(19
)


(5,214
)














Amortization of net actuarial loss


(2,787
)


(16,289
)


(400
)


(19,476
)


(3,285
)


(17,530
)


(479
)


(21,294
)














Total recognized in other comprehensive income/(loss)

$
124,808


$
29,493


$
775


$
155,076


$
(11,293
)

$
(42,094
)

$
1,336


$
(52,051
)

$



$



$



$
Weighted-average assumptions-
    net periodic benefit cost:Discount rate


6.31
%


5.74
%


5.24
%






5.81
%


5.14
%


4.50
%






5.45
%


4.86
%


4.60
%Long-term rate of return


7.90
%


6.86
%


7.00
%






8.00
%


6.94
%


7.50
%






8.00
%


6.84
%


7.50
%Salary growth


N/A



4.28
%


3.10
%






N/A



3.83
%


2.35
%






N/A



3.84
%


3.21
%Weighted-average assumptions-
    projected benefit obligations:Discount rate


6.23
%


6.21
%


6.39
%






6.31
%


5.72
%


5.30
%Salary growth


N/A



3.53
%


3.17
%






N/A



4.12
%


3.47
%     N/A  Not applicable as
    the plan is frozen and future salary levels do not affect
    benefits payable.  *
    
    Charges were recorded in accordance
    with the provisions of SFAS No. 88, Accounting
    for Settlements and Curtailments of Defined Benefit Pension
    Plans and for Termination Benefits, related to the
    settlement of obligations to former employees in the United
    Kingdom and Canada of $886 in fiscal year 2008; and the United
    Kingdom and Canada of $297 in fiscal year 2006.  Investment
    policy:
         104




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)  Long-term
    rate of return assumptions:
    Fiscal Years EndedDecember 26,


December 28,2008


2007Asset allocation by plan:United States:Equities


58
%


70
%Fixed-income securities


41
%


30
%Other


1
%


0
%Total


100
%


100
%United Kingdom:Equities


45
%


59
%Fixed-income securities


54
%


41
%Other


1
%


0
%Total


100
%


100
%Canada:Equities


48
%


49
%Fixed-income securities


45
%


44
%Other


7
%


7
%Total


100
%


100
%   Contributions:
  non-U.S. pension
 105




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)  Estimated
    future benefit payments:
    UnitedUnited States


Kingdom


Other


Total2009

$
23,294


$
25,885


$
3,047


$
52,2262010


23,428



26,076



3,173



52,6772011


23,606



26,291



3,536



53,4332012


23,948



26,505



2,748



53,2012013


23,825



26,706



3,692



54,2232014-2018


123,651



136,304



15,600



275,555   Other Postretirement Benefit Plans
   106




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)  Other
    postretirement benefit obligation and funded status:
  Fiscal Years EndedDecember 26,


December 28,2008


2007Change in accumulated postretirement benefit obligation:Accumulated postretirement benefit obligation at beginning of
    year

$
80,160


$
96,847Service cost


142



139Interest cost


4,623



4,765Plan participants contributions


2,180



2,727Plan amendment


1,609



Actuarial loss/(gain)


3,680



(13,354
)Benefits paid


(9,994
)


(12,176
)Medicare Part D reimbursement


220



1,052Other


(156
)


160Accumulated postretirement benefit obligation at end of year


82,464



80,160Change in plan assets:Fair value of plan assets at beginning of year






Plan participants contributions


2,180



2,727Employer contributions


7,594



8,397Medicare Part D reimbursement


220



1,052Benefits paid


(9,994
)


(12,176
)Fair value of plan assets at end of year






Funded status at end of year

$
(82,464
)

$
(80,160
)     December 26,


December 28,2008


2007Current liabilities

$
(6,475
)

$
(7,412
)Non-current liabilities


(75,989
)


(72,748
)Funded status at end of year

$
(82,464
)

$
(80,160
)     December 26,


December 28,2008


2007Net actuarial loss

$
14,162


$
10,949Prior service credit


(37,276
)


(43,547
)Total

$
(23,114
)

$
(32,598
)  107




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)    Components
    of net periodic postretirement benefit cost and other changes
    recognized in comprehensive income/(loss):
  Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Net periodic postretirement benefit cost:Service cost

$
142


$
139


$
157Interest cost


4,623



4,765



5,334Amortization of prior service credit


(4,662
)


(4,762
)


(4,761
)Amortization of net actuarial loss


466



952



2,049Net periodic postretirement benefit cost

$
569


$
1,094


$
2,779Changes recognized in other comprehensive income/(loss):Net actuarial loss/(gain)

$
3,679


$
(13,352
)

$
Plan amendment


1,609







Amortization of prior service credit


4,662



4,762



Amortization of net actuarial loss


(466
)


(952
)


Total recognized in other comprehensive income/(loss)

$
9,484


$
(9,542
)

$
Weighted-average
    assumptions-
    net periodic postretirement benefit cost:Discount rate


6.23
%


5.73
%


5.39
%Weighted-average assumptions- accumulated postretirement
    benefit obligation:Discount rate


6.28
%


6.20
%   Pre-Medicare


MedicareEligible


EligibleHealth-care cost trend:2008


9.20
%


0.00
%2009


8.70
%


24.65
%Decline to 2023


5.70
%


5.70
%     One-Percentage


One-PercentagePoint Increase


Point DecreaseEffect on total of service and interest cost components

$
142


$
(126
)Effect on accumulated postretirement benefit obligation

$
2,965


$
(2,625
)  108




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)  Contributions:
    Estimated
    future other postretirement benefit payments:
    PostretirementBenefits2009

$
6,6692010


7,0732011


7,2002012


7,1812013


7,1682014-2018


34,901   Defined Contribution Plans
      Other Benefits non-U.S. subsidiaries
 109




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  9.
    Guarantees
    and Warranties  and/or and/or
  Maximum


Carrying Amount of LiabilityPotential


December 26,


December 28,Payment


2008


2007Environmental indemnifications


No limit


$
8,900


$
6,900Tax indemnifications


No limit


$



$
     Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Warranty Liability:Balance at beginning of year

$
87,800


$
69,900


$
63,200Accruals


36,000



35,800



27,600Settlements


(7,300
)


(5,700
)


(18,600
)Adjustments to provisions


(17,100
)


(12,200
)


(2,300
)Balance at end of year

$
99,400


$
87,800


$
69,900       10.
    Financial
    Instruments and Risk Management    Cash, Cash Equivalents and Restricted Cash
  Short-term Investments
 110




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   10.
    Financial
    Instruments and Risk
    Management  (Continued)  Long-term Debt
  Foreign Currency Forward Contracts
  Interest Rate Swaps
  Carrying Amounts and Fair Values
  December 26, 2008


December 28, 2007Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueLong-term debt

$
(217,364
)

$
(227,866
)

$
(205,346
)

$
(224,416
)       11.
    Preferred
    Shares        12.
    Share-Based
    Compensation Plans   111




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   12. Share-Based
    Compensation Plans  (Continued)
      Omnibus
    Incentive Plan:
      Prior
    Share-Based Compensation Plans:
       112




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   12. Share-Based
    Compensation Plans  (Continued)
        Stock
    Option Awards:
    Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006Weighted-





Weighted-





Weighted-Average





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOptions outstanding at beginning of year


1,502,476


$
44.45



4,411,930


$
20.19



6,568,020


$
14.50Options exercised


(142,038
)

$
19.65



(2,976,020
)

$
6.07



(3,046,430
)

$
5.78Options granted


1,761,246


$
26.99



193,326


$
62.98



991,492


$
23.17Options cancelled or expired


(44,638
)

$
251.94



(126,760
)

$
129.20



(101,152
)

$
113.98Options outstanding at end of year


3,077,046


$
32.59



1,502,476


$
44.45



4,411,930


$
20.19Options available for grant at end of year


5,582,611







8,066,938







8,178,784Weighted-average grant date fair value of options granted during
    the year

$
11.21






$
23.03






$
9.28  113




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   12. Share-Based
    Compensation Plans  (Continued)
    Stock Options OutstandingWeighted-Average


Weighted-


AggregateNumber


Remaining


Average


IntrinsicRange of Exercise Prices


Outstanding


Contractual Life


Exercise Price


Value$
14.83


to

$
21.43



1,562,838



4.91 years


$
21.36


$
3,253,95521.70


to


21.74



561,280



2.63 years



21.73



957,02425.05


to


28.50



296,128



2.96 years



25.27



46.90


to


49.85



142,267



2.88 years



49.67



53.63


to


67.55



261,377



3.85 years



64.39



70.95


to


81.57



149,922



3.95 years



71.84



90.00


to


150.63



103,234



0.62 years



121.61



$
14.83


to

$
150.63



3,077,046



3.93 years


$
32.59


$
4,210,979     Stock Options ExercisableWeighted-Average


Weighted-


AggregateNumber


Remaining


Average


IntrinsicRange of Exercise Prices


Exercisable


Contractual Life


Exercise Price


Value$
14.83


to

$
21.43



22,008



3.23 years


$
16.31


$
156,88621.70


to


21.74



374,587



2.63 years



21.73



638,71325.05


to


28.50



77,952



2.80 years



25.22



46.90


to


49.85



132,622



2.82 years



49.81



53.63


to


67.55



37,994



2.04 years



56.81



70.95


to


81.57



5,000



1.58 years



81.57



90.00


to


150.63



91,234



0.54 years



124.45



$
14.83


to

$
150.63



741,397



2.41 years


$
41.80


$
795,599      114




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   12. Share-Based
    Compensation Plans  (Continued)
  Restricted
    Awards:
    Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006Weighted-





Weighted-





Weighted-Average





Average





AverageGrant





Grant





GrantShares


Price


Shares


Price


Shares


PriceNon-vested at beginning of year


165,960


$
21.47



659,262


$
11.32



2,222,362


$
4.76Granted





$







$




248,940


$
21.47Vested


(82,980
)

$
21.47



(493,302
)

$
7.91



(1,807,088
)

$
4.67Cancelled or forfeited





$







$




(4,952
)

$
4.60Non-vested at end of year


82,980


$
21.47



165,960


$
21.47



659,262


$
11.32     Fiscal Years EndedDecember 26, 2008


December 28, 2007


December 29, 2006Weighted-





Weighted-





Weighted-Average





Average





AverageGrant





Grant





GrantUnits


Price


Units


Price


Units


PriceNon-vested at beginning of year


227,430


$
38.79



868,968


$
9.30



1,157,096


$
5.09Granted


768,255


$
26.68



82,258


$
62.94



193,412


$
25.00Vested


(62,486
)

$
26.31



(686,818
)

$
5.12



(452,674
)

$
5.48Cancelled or forfeited


(1,284
)

$
44.10



(36,978
)

$
25.05



(28,866
)

$
5.62Non-vested at end of year


931,915


$
29.63



227,430


$
38.79



868,968


$
9.30     13.
    Common
    Share Purchase Warrants   115




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   13. Common
    Share Purchase
    Warrants  (Continued)
        45-day 12-month
   116




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  14.
    Accumulated
    Other Comprehensive Loss    Accumulated





Pension and OtherForeign


Minimum


Postretirement


Net (Loss)/Gains onCurrency


Pension Liability


Benefit Plan


Derivatives DesignatedTranslation


Adjustments, Net


Adjustments, Net of


as Cash Flow Hedges,


Accumulated OtherAdjustments


of Tax


Tax


Net of Tax


Comprehensive LossBalance as of December 30, 2005

$
(74,168
)

$
(240,628
)

$



$



$
(314,796
)Other comprehensive income


31,612



40,087







342



72,041Adoption of SFAS No. 158






200,541



(301,128
)






(100,587
)Balance as of December 29, 2006


(42,556
)






(301,128
)


342



(343,342
)Other comprehensive income


31,939







48,958



1,331



82,228Balance as of December 28, 2007


(10,617
)






(252,170
)


1,673



(261,114
)Other comprehensive income


(68,747
)






(156,282
)


(8,645
)


(233,674
)Balance as of December 26, 2008

$
(79,364
)

$



$
(408,452
)

$
(6,972
)

$
(494,788
)       15.
    Income
    Taxes    Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006U.S.

$
25,715


$
23,727


$
68,897Non-U.S.


597,933



506,567



274,796Total

$
623,648


$
530,294


$
343,693  117




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   15. Income
    Taxes  (Continued)
    Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Current tax expense:U.S.

$
(4,370
)

$
(2,831
)

$
(4,084
)Non-U.S.


(115,541
)


(114,938
)


(55,260
)Total current


(119,911
)


(117,769
)


(59,344
)Deferred tax expense/(benefit):U.S.


8,758



(2,248
)


(3,540
)Non-U.S.


14,125



(16,403
)


(18,825
)Total deferred


22,883



(18,651
)


(22,365
)Total provision for income taxes

$
(97,028
)

$
(136,420
)

$
(81,709
)     December 26,


December 28,2008


2007Deferred tax assets:Pensions

$
81,985


$
46,484Accrued costs on long-term contracts


25,943



22,919Deferred income


23,525



25,392Accrued expenses


39,749



43,546Postretirement benefits other than pensions


28,602



27,318Asbestos claims


42,720



32,790Net operating loss carryforwards and other tax attributes


203,978



224,457Asset impairments and other reserves


2,568



2,079Other


5,778



5,159Total gross deferred tax assets


454,848



430,144Valuation allowance


(318,722
)


(294,286
)Total deferred tax assets


136,126



135,858Deferred tax liabilities:Property, plant and equipment


(30,449
)


(27,372
)Goodwill and other intangible assets


(7,301
)


(19,791
)Investments


(20,364
)


(25,845
)Unremitted earnings of foreign subsidiaries


(8,000
)


(8,000
)Total gross deferred tax liabilities


(66,114
)


(81,008
)Net deferred tax assets

$
70,012


$
54,850    118




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   15. Income
    Taxes  (Continued)
  and/or non-U.S. tax non-U.S. operating
    non-U.S. jurisdictions 12-month non-U.S. income
  non-U.S. tax
   119




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   15. Income
    Taxes  (Continued)
    December 26,


December 28,2008


2007Balance at beginning of year

$
52,175


$
44,786Additions based on tax positions related to the current year


7,859



6,218Additions for tax positions of prior years






8,910Reductions for tax provisions for prior years


(5,668
)


(1,663
)Settlements






(2,744
)Reductions for lapse of statute of limitations


(5,624
)


(3,332
)Balance at end of year

$
48,742


$
52,175         Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Tax provision at U.S. statutory rate


35.0
%


35.0
%


35.0
%State income taxes, net of Federal income tax benefit


0.5
%


0.1
%


0.3
%Valuation allowance


(6.3
)%


(1.8
)%


(3.9
)%Non-U.S. tax
    rates different than the statutory rate


(13.7
)%


(10.4
)%


(9.3
)%Impact of changes in tax rate on deferred taxes


0.3
%


1.3
%


0.0
%Nondeductible loss / nontaxable income


(0.2
)%


1.6
%


1.7
%Other


0.0
%


(0.1
)%


0.0
%Total


15.6
%


25.7
%


23.8
%    16.
    Derivative
    Financial Instruments   120




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   16. Derivative
    Financial
    Instruments  (Continued)
        Fiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006(Increase)/decrease in cost of operating revenues

$
(11,473
)

$
465


$
7,662Other deductions, net


(390
)


(141
)


(52
)Pretax (loss)/gain

$
(11,863
)

$
324


$
7,610             17.
    Business
    Segments  Global
    Engineering and Construction Group Global Power Group
 121




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
  Global
    Engineering and Construction Group
      
    Design, engineering, project management, construction and
    construction management services, including the procurement of
    equipment, materials and services from third-party suppliers and
    contractors.
    Environmental remediation services, together with related
    technical, engineering, design and regulatory services.
    Development, engineering, procurement, construction, ownership
    and operation of power generation facilities, from conventional
    and renewable sources, and waste-to-energy facilities in Europe.  Global
    Power Group
  and/or
      
    Designs, manufactures and installs auxiliary and replacement
    equipment for utility power and industrial facilities, including
    surface condensers, feed water heaters, coal pulverizers, steam
    generator coils and panels, biomass gasifiers, and replacement
    parts for steam generators.
    Nitrogen-oxide
    (NOx)
    reduction systems and components for pulverized coal steam
    generators such as, selective catalytic reduction systems, low
    NOx
    combustion systems, low
    NOx
    burners, primary combustion and overfire air systems and
    components, fuel and combustion air measuring and control
    systems and components.
    A broad range of site services including construction and
    erection services, maintenance engineering, steam generator
    upgrading and life extension, and plant repowering. 122




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
   
    Research and development in the areas of combustion, fluid and
    gas dynamics, heat transfer, materials and solid mechanics.
    Technology licenses to other steam generator suppliers in select
    countries.  Corporate
    and Finance Group
        Global E&C Group


Global Power Group


TotalPercentage of





Percentage of





Percentage ofThird-Party


Third-Party


Third-Party


Third-Party


Third-Party


Third-PartyRevenues


Revenues


Revenues


Revenues


Revenues


RevenuesAsia

$
1,398,295



27.1
%

$
177,088



10.4
%

$
1,575,383



23.0
%Australasia*


1,731,781



33.6
%


13,258



0.8
%


1,745,039



25.5
%Europe


847,788



16.5
%


603,882



35.4
%


1,451,670



21.2
%Middle East


857,944



16.7
%


648



0.0
%


858,592



12.5
%North America


276,796



5.4
%


779,413



45.6
%


1,056,209



15.4
%South America


34,623



0.7
%


132,774



7.8
%


167,397



2.4
%Total

$
5,147,227



100.0
%

$
1,707,063



100.0
%

$
6,854,290



100.0
%     *
    
    Australasia primarily represents Australia, New Zealand and the
    Pacific islands.        123




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
  Global


Global


C&FTotal


E&C Group


Power Group


Group(1)Fiscal Year Ended December 26, 2008Operating revenues (third-party)

$
6,854,290


$
5,147,227


$
1,707,063


$
EBITDA(2)

$
686,067


$
535,602


$
239,508


$
(89,043
)Less: Interest expense


(17,621
)Less: Depreciation and amortization


(44,798
)Income before income taxes


623,648Provision for income taxes


(97,028
)Net income

$
526,620Total assets

$
3,011,254


$
1,755,660


$
1,403,386


$
(147,792
)Capital expenditures

$
103,965


$
90,228


$
11,625


$
2,112Fiscal Year Ended December 28, 2007Operating revenues (third-party)

$
5,107,243


$
3,681,259


$
1,425,984


$
EBITDA(3)

$
591,840


$
505,647


$
139,177


$
(52,984
)Less: Interest expense


(19,855
)Less: Depreciation and amortization


(41,691
)Income before income taxes


530,294Provision for income taxes


(136,420
)Net income

$
393,874Total assets

$
3,248,988


$
1,799,231


$
1,243,696


$
206,061Capital expenditures

$
51,295


$
42,965


$
8,055


$
275Fiscal Year Ended December 29, 2006Operating revenues (third-party)

$
3,495,048


$
2,219,104


$
1,275,944


$
EBITDA(4)

$
399,514


$
323,297


$
95,039


$
(18,822
)Less: Interest expense


(24,944
)Less: Depreciation and amortization


(30,877
)Income before income taxes


343,693Provision for income taxes


(81,709
)Net income

$
261,984Capital expenditures

$
30,293


$
22,784


$
7,464


$
45     (1)
    
    Includes general corporate income and expense, our captive
    insurance operation and the elimination of transactions and
    balances related to intercompany interest.(2)
    
    Includes in fiscal year 2008: increased/(decreased) contract
    profit of $26,720 from the regular re-evaluation of final
    estimated contract profits*: $46,260 in our Global E&C
    Group and $(19,540) in our Global Power Group; a charge of
    $9,000 in our Global Power Group primarily for severance-related
    postemployment 124




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
  benefits in accordance with SFAS No. 112; and a net
    charge of $6,607 in our C&F Group on the revaluation of our
    asbestos liability and related asset resulting primarily from
    increased asbestos defense costs projected through year-end 2023
    of $42,727 offset by gains of $36,120 on the settlement of
    coverage litigation with certain insurance carriers.(3)
    
    Includes in fiscal year 2007: increased/(decreased) contract
    profit of $35,150 from the regular re-evaluation of final
    estimated contract profits*: $54,520 in our Global E&C
    Group and $(19,370) in our Global Power Group; a gain of $13,519
    in our C&F Group on the settlement of coverage litigation
    with certain asbestos insurance carriers; and a charge of $7,374
    in our C&F Group on the revaluation of our asbestos
    liability and related asset.(4)
    
    Includes in fiscal year 2006: (decreased)/increased contract
    profit of $(5,670) from the regular re-evaluation of final
    estimated contract profits*: $14,720 in our Global E&C
    Group and $(20,390) in our Global Power Group; net
    asbestos-related gains of $115,664 in our C&F Group
    primarily related to the settlement of coverage litigation with
    certain asbestos insurance carriers; a charge of $15,533 in our
    C&F Group on the revaluation of our asbestos liability and
    related asset; an aggregate charge of $14,955 in our C&F
    Group in conjunction with the voluntary termination of our prior
    domestic senior credit agreement; and a net charge of $12,483 in
    our C&F Group in conjunction with the debt reduction
    initiatives completed in April and May 2006.*
    
    Please refer to Revenue Recognition on Long-Term
    Contracts in Note 1 for further information regarding
    changes in our final estimated contract profits.    Fiscal Years EndedDecember 26,


December 28,


December 29,Equity in Earnings of Unconsolidated Subsidiaries:

2008


2007


2006Global E&C Group

$
11,649


$
19,720


$
19,056Global Power Group


21,729



17,579



10,551C&F Group










(328
)Total

$
33,378


$
37,299


$
29,279   December 26,


December 28,Investments In and Advances to Unconsolidated
    Subsidiaries:

2008


2007Global E&C Group

$
135,673


$
130,240Global Power Group


75,099



68,092C&F Group


4



14Total

$
210,776


$
198,346  125




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
    Fiscal Years EndedDecember 26,


December 28,


December 29,Geographic Concentration of Operating Revenues
    (Third-Party):

2008


2007


2006Asia

$
1,010,232


$
593,923


$
272,939Australasia*


1,219,366



504,611



447,696Canada


21,122



21,220



11,588Europe


2,898,987



2,532,984



1,708,973Middle East


557,437



349,237



109,175United States


1,127,212



1,091,599



932,939South America


19,934



13,669



11,738Total

$
6,854,290


$
5,107,243


$
3,495,048     *
    
    Australasia primarily represents Australia, New Zealand and the
    Pacific islands.      December 26,


December 28,Long-Lived Assets:

2008


2007Asia

$
46,134


$
37,232Australasia*


2,866



3,968Canada


15



25Europe


331,070



296,109Middle East


74



125United States


262,166



246,234South America


73,699



66,673Total

$
716,024


$
650,366     *
    
    Australasia primarily represents Australia, New Zealand and the
    Pacific islands.   126




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   17. Business
    Segments  (Continued)
    Fiscal Years EndedDecember 26,


December 28,


December 29,Operating Revenues (Third-Party) by Industry:

2008


2007


2006Power generation

$
1,637,718


$
1,437,078


$
1,326,896Oil refining


1,574,426



1,431,810



716,053Pharmaceutical


81,438



155,266



128,510Oil and gas


1,891,490



898,623



680,041Chemical/petrochemical


1,490,168



1,003,136



383,092Power plant operation and maintenance


130,144



120,474



111,154Environmental


29,959



54,878



68,847Other, net of eliminations


18,947



5,978



80,455Total

$
6,854,290


$
5,107,243


$
3,495,048    18.
    Operating
    Leases    Fiscal years:2009

$
52,1442010


43,5282011


35,9272012


29,2262013


27,937Thereafter


173,145Total

$
361,907      19. Litigation
    and Uncertainties
  
 Asbestos
   127




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
    United
    States
    Number of ClaimsFiscal Years EndedDecember 26,


December 28,


December 29,2008


2007


2006Open claims at beginning of year


131,340



135,890



164,820New claims


4,950



5,140



8,250Claims resolved(1)


(5,530
)


(9,690
)


(37,180
)Open claims at end of year


130,760



131,340



135,890Claims not valued in the liability(2)


(84,830
)


(66,040
)


(47,820
)Open claims valued in the liability at end of year


45,930



65,300



88,070     (1)
    
    Claims resolved in fiscal year 2006
    include court dismissals without payment of mass claim filings
    approximating 22,900 claims.(2)
    
    Claims not valued in the liability
    include claims on certain inactive court dockets, claims over
    six years old that are considered abandoned and certain other
    items.       128




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
    December 26,


December 28,2008


2007Asbestos-related assets recorded within:Accounts and notes receivable-other

$
38,200


$
47,100Asbestos-related insurance recovery receivable


246,600



279,100Total asbestos-related assets

$
284,800


$
326,200Asbestos-related liabilities recorded within:Accrued expenses

$
64,500


$
72,000Asbestos-related liability


320,800



331,300Total asbestos-related liabilities

$
385,300


$
403,300         and/or
 129




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
                   130




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
             131




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
  United
    Kingdom
      Project
    Claims
      Power
    Plant Arbitration  Eastern Europe
   132




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
    Power
    Plant Dispute  Ireland
            Camden
    County Waste-to-Energy Project
   133




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
        Environmental
    Matters
  CERCLA
    and Other Remedial Matters
    and/or
  and/or
 134




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
  and/or and/or
    Mountain
    Top
       135




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  19. Litigation and
    Uncertainties  (Continued)
  and/or and/or and/or
      Other
    Environmental Matters
     136




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
  20. Quarterly
    Financial Data (Unaudited)
  Fiscal Quarters EndedDecember 26,


September 26,


June 27,


March 28,2008


2008


2008


2008Operating revenues

$
1,639,189


$
1,718,355


$
1,701,022


$
1,795,724Contract profit


203,199



229,260



246,216



216,971Net income


99,882
(1)


127,920



160,755



138,063Earnings per common share:Basic

$
0.75


$
0.89


$
1.12


$
0.96Diluted

$
0.75


$
0.88


$
1.11


$
0.95Shares outstanding:Weighted-average number of common shares outstanding for basic
    earnings per common share


132,654,157



144,030,570



143,994,084



143,917,790Effect of dilutive securities


558,673



1,169,026



1,427,266



1,380,724Weighted-average number of common shares outstanding for diluted
    earnings per common share


133,212,830



145,199,596



145,421,350



145,298,514   Fiscal Quarters EndedDecember 28,


September 28,


June 29,


March 30,2007


2007


2007


2007Operating revenues

$
1,465,483


$
1,299,872


$
1,189,766


$
1,152,122Contract profit


170,003



197,960



168,846



207,512Net income


78,098
(2)


129,101



71,850



114,825Earnings per common share:Basic

$
0.54


$
0.91


$
0.51


$
0.82Diluted

$
0.54


$
0.89


$
0.50


$
0.80Shares outstanding:Weighted-average number of common shares outstanding for basic
    earnings per common share


143,540,329



142,517,528



141,078,576



139,507,752Effect of dilutive securities


1,615,072



2,574,936



3,543,466



4,023,304Weighted-average number of common shares outstanding for diluted
    earnings per common share


145,155,401



145,092,464



144,622,042



143,531,056     (1)
    
    Net income for the fiscal quarter ended December 26, 2008
    included: increased/(decreased) contract profit of $(1,750) from
    the regular re-evaluation of final estimated contract profits*:
    $6,540 in our Global E&C Group and $(8,290) in our Global
    Power Group; a charge of $9,000 in our Global Power Group
    primarily for severance-related postemployment benefits in
    accordance with SFAS No. 112; a net charge of $37,345
    in our C&F Group on the revaluation of our asbestos
    liability and related asset resulting primarily from increased
    asbestos defense costs projected through year-end 2023; and a
    benefit of $24,100 related to the net impact of deferred tax
    valuation allowance adjustments at two of our
    non-U.S.
    subsidiaries. 137




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   20. Quarterly
    Financial Data
    (Unaudited)  (Continued)
   (2)
    
    Net income for the quarter ended December 28, 2007
    included: increased/(decreased) contract profit of $(3,310) from
    the regular re-evaluation of final estimated contract profits*:
    $3,750 in our Global E&C Group and $(7,060) in our Global
    Power Group; a charge of $7,374 in our C&F Group reflecting
    the revaluation of our asbestos liability and related asset and
    a net gain of $4,886 in our C&F Group on the settlement of
    coverage litigation with certain asbestos insurance carriers.*
    
    Please refer to Revenue Recognition on Long-Term
    Contracts in Note 1 for further information regarding
    changes in our final estimated contract profits.  21. Redomestication
                 138




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   21. Redomestication  (Continued)
    
    concurrently with the issuance of registered shares to the
    holders of whole Foster Wheeler Ltd. common shares, Foster
    Wheeler AG issued to the holders of the preferred shares the
    number of registered shares of Foster Wheeler AG that such
    holders would have been entitled to receive had they converted
    their preferred shares into common shares of Foster Wheeler Ltd.
    immediately prior to the effectiveness of the scheme of
    arrangement (with Foster Wheeler Ltd. paying cash in lieu of any
    fractional common shares otherwise issuable);
    Foster Wheeler AG executed a supplemental warrant agreement
    pursuant to which it assumed Foster Wheeler Ltd.s
    obligations under the warrant agreement and agreed to issue
    registered shares of Foster Wheeler AG upon exercise of such
    warrants in accordance with their terms; and
    Foster Wheeler AG assumed Foster Wheeler Ltd.s existing
    obligations in connection with awards granted under Foster
    Wheeler Ltd.s incentive plans and other similar employee
    awards.   139




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FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (amounts
    in thousands of dollars, except share data and per share
    amounts)
   21. Redomestication  (Continued)
    At December 26, 2008Cancellation ofCommon Shares/


Retirement ofIssuance of


Fractional Shares


As AdjustedActual


Registered Shares


Acquired


(Unaudited)Shareholders Equity:Preferred shares:$0.01 par value; 901,135 and 0 authorized, actual and as
    adjusted; and 1,079 and 0 issued and outstanding, actual and as
    adjusted

$



$



$



$
Common shares:$0.01 par value; 296,007,818 and 0 authorized, actual and
    as adjusted; and 126,177,611 and 0 issued and outstanding,
    actual and as adjusted


1,262



(1,262
)






Registered shares:CHF 3.00 par value; 0 and 189,474,816 authorized, actual
    and as adjusted; 0 and 63,158,272 conditionally authorized,
    actual and as adjusted; and 0 and 126,316,544 issued and
    outstanding, actual and as adjusted






326,175







326,175Paid-in capital


914,063



(324,913
)


(28
)


589,122Accumulated deficit


(27,975
)










(27,975
)Accumulated other comprehensive loss


(494,788
)










(494,788
)TOTAL SHAREHOLDERS EQUITY

$
392,562










$
392,534   non-U.S. operations.
 140




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##### Table of Contents



Foster
    Wheeler Ltd.
  Schedule II:
    Valuation and Qualifying Accounts
 (amounts
    in thousands)
  Fiscal Year Ended December 26, 2008Additions


AdditionsBalance at


Charged to


Charged to





Balance at theBeginning of


Costs and


Other





End of theYear


Expenses


Accounts


Deductions


YearDescriptionAllowance for doubtful accounts

$
12,398


$
6,821


$



$
(5,375
)

$
13,844Deferred tax valuation allowance

$
294,286


$
6,577


$
52,386


$
(34,527
)

$
318,722   Fiscal Year Ended December 28, 2007Additions


AdditionsBalance at


Charged to


Charged to





Balance at theBeginning of


Costs and


Other





End of theYear


Expenses


Accounts


Deductions


YearDescriptionAllowance for doubtful accounts

$
7,848


$
6,109


$



$
(1,559
)

$
12,398Deferred tax valuation allowance

$
282,104


$
1,186


$
24,255


$
(13,259
)

$
294,286   Fiscal Year Ended December 29, 2006Additions


AdditionsBalance at


Charged to


Charged to





Balance at theBeginning of


Costs and


Other





End of theYear


Expenses


Accounts


Deductions


YearDescriptionAllowance for doubtful accounts

$
10,379


$
2,317


$



$
(4,848
)

$
7,848Deferred tax valuation allowance

$
260,101


$
82,136


$
3,176


$
(63,309
)

$
282,104  141




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##### Table of Contents



ITEM 9. CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE



Not applicable. ITEM 9A. CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
    Rules 13a-15(e) 15d-15(e) Rule 13a-15.
  Managements
    Report on Internal Control Over Financial
    Reporting
  Rule 13a-15(f). Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
    Form 10-K,
  Changes
    in Internal Control Over Financial Reporting
   ITEM 9B. OTHER
    INFORMATION   142




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##### Table of Contents



PART III ITEM 10. DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Code of
    Business Conduct and Ethics
  www.fwc.com/corpgov www.fwc.com/corpgov Form 8-K,
  08809-4000.
 ITEM 11. EXECUTIVE
    COMPENSATION   ITEM 12. SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   143




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##### Table of Contents



Equity
    Compensation Plan Information
    Weighted-Average


Number of Securities RemainingNumber of Securities to


Exercise Price of


Available for Future Issuancebe Issued Upon Exercise


Outstanding


Under Equity Compensation Plansof Outstanding Options,


Options, Warrants


(excluding securities reflectedWarrants and Rights


and Rights ($)


in column (a))Plan Category

(a)


(b)


(c)Equity Compensation PlansApproved by Security Holders:Omnibus Incentive Plan


3,794,485


$
20.65



5,582,6111995 Stock Option Plan


152,460


$
94.23



Directors Stock Option Plan


10,800


$
93.94



Directors Deferred Compensation Program





$




Equity Compensation PlansNot Approved by Security Holders:Raymond J.
    Milchovich(1)


130,000


$
49.85



M.J. Rosenthal & Associates,
    Inc.(2)


25,000


$
18.80



2004 Stock Option
    Plan(3)


4,196


$
14.84



Total


4,116,941


$
24.47



5,582,611     (1)
    
    Under the terms of his employment agreement, dated
    October 22, 2001, Mr. Milchovich received an option to
    purchase 130,000 Foster Wheeler Ltd. common shares on
    October 22, 2001. This option was granted at an exercise
    price of $49.85 and vested 20% each year over the five-year term
    of the agreement. The option exercise price is equal to the
    median of the high and low price of Foster Wheeler Ltd. common
    shares on the grant date. The option has a term of 10 years
    from the date of grant.(2)
    
    Under the terms of the consulting agreement with M.J.
    Rosenthal & Associates, Inc. on May 7, 2002, we
    granted a nonqualified stock option to purchase 25,000 of Foster
    Wheeler Ltd. common shares at a price of $18.80 with a term of
    10 years from the date of grant. The exercise price is
    equal to the mean of the high and low price of Foster Wheeler
    Ltd. common shares on the date of grant. The option is
    exercisable on or after March 31, 2003. The option, to the
    extent not then exercised, shall terminate upon any breach of
    certain covenants contained in the consulting agreement.(3)
    
    On November 8, 2005, our non-employee directors were issued
    options under the 2004 Stock Option Plan to purchase 14,686
    Foster Wheeler Ltd. common shares at an exercise price of Foster
    Wheeler Ltd. $14.838 per common share. Such options expire on
    September 30, 2010. The non-employee director options
    vested in one-twelfth increments until fully vested on
    September 30, 2006. As of December 26, 2008, options
    to purchase 4,196 Foster Wheeler Ltd. common shares at an
    exercise price of $14.838 per common share remained outstanding. ITEM 13. CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE   ITEM 14. PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   144




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##### Table of Contents



PART IV ITEM 15. EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    (1)
    Financial Statements    (2)
    Financial Statement Schedules  
    (3) Exhibits
  ExhibitNo.

Exhibits3
.1

Articles of Association of Foster Wheeler AG.  (Filed as Exhibit
    3.1 to Foster Wheeler AGs Form 8-K, dated February 6, 2009
    and filed on February 9, 2009, and incorporated herein by
    reference.)3
.2

Organizational Regulations of Foster Wheeler AG.  (Filed as
    Exhibit 3.2 to Foster Wheeler AGs
    Form 8-K,
    dated February 6, 2009 and filed on February 9, 2009, and
    incorporated herein by reference.)4
.0

Foster Wheeler AG hereby agrees to furnish copies of instruments
    defining the rights of holders of long-term debt of Foster
    Wheeler AG and its consolidated subsidiaries to the Commission
    upon request.10
.1

Registration Rights Agreement, dated as of September 24, 2004,
    by and among Foster Wheeler Ltd., Foster Wheeler LLC, the
    guarantors listed therein and each of the purchasers signatory
    thereto.  (Filed as Exhibit 4.5 to Foster Wheeler Ltd.s
    registration statement on Form S-4 (File No. 119841), filed on
    October 20, 2004, and incorporated herein by reference.)10
.2

Waiver of the Registration Rights Agreement, dated as of
    February 2, 2006, by and among Foster Wheeler Ltd., Foster
    Wheeler LLC, on behalf of themselves and the subsidiary
    guarantors and Citigroup Global Capital Markets Inc. (Filed as
    Exhibit 10.13 to Foster Wheeler Ltd.s Form 10-K for the
    fiscal year ended December 30, 2005, and incorporated herein by
    reference.)10
.3

Waiver of the Registration Rights Agreement, dated as of
    February 2, 2006, by and among Foster Wheeler Ltd., Foster
    Wheeler LLC, on behalf of themselves and the subsidiary
    guarantors and Merrill Lynch Global Allocation Fund, Inc.,
    Merrill Lynch International Investment Fund-MLIIF Global
    Allocation Fund, Merrill Lynch Variable Series Fund,
    Inc.-Merrill Lynch Global Allocation V.I. Fund, and Merrill
    Lynch Series Funds, Inc.-Global Allocation Strategy Portfolio.
    (Filed as Exhibit 10.14 to Foster Wheeler Ltd.s Form 10-K
    for the fiscal year ended December 30, 2005, and incorporated
    herein by reference.)10
.4

Credit Agreement, dated September 13, 2006, among Foster Wheeler
    LLC, Foster Wheeler USA Corporation, Foster Wheeler North
    America Corp., Foster Wheeler Energy Corporation, Foster Wheeler
    International Corporation, and Foster Wheeler Inc., as
    Borrowers, the guarantors party thereto, the lenders party
    thereto, BNP Paribas as Administrative Agent, BNP Paribas
    Securities Corp. as Sole Bookrunner and Sole Lead Arranger, and
    Calyon New York Branch as Syndication Agent.  (Filed as Exhibit
    99.1 to Foster Wheeler Ltd.s Form 8-K, dated September 13,
    2006 and filed on September 14, 2006, and incorporated herein by
    reference.)10
.5

Amendment No. 1, dated May 4, 2007, to the Credit Agreement,
    dated September 13, 2006, between Foster Wheeler LLC, Foster
    Wheeler USA Corporation, Foster Wheeler North America Corp.,
    Foster Wheeler Energy Corporation, Foster Wheeler International
    Corporation, Foster Wheeler Inc., Foster Wheeler Ltd., Foster
    Wheeler Holdings Ltd., the subsidiary guarantors party thereto,
    the lenders party thereto, and BNP Paribas. (Filed as Exhibit
    10.4 to Foster Wheeler Ltd.s Form 10-Q for the quarter
    ended March 30, 2007, and incorporated herein by reference.) 145




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##### Table of Contents



ExhibitNo.

Exhibits10
.6

Amendment No. 2, dated September 29, 2008, to the Credit
    Agreement, dated September 13, 2006, between Foster Wheeler LLC,
    Foster Wheeler Inc., Foster Wheeler USA Corporation, Foster
    Wheeler North America Corp., Foster Wheeler Energy Corporation
    and Foster Wheeler International Corporation, as borrowers,
    Foster Wheeler Ltd., Foster Wheeler Holdings Ltd., the
    subsidiary guarantors party thereto, the lenders party thereto,
    and BNP Paribas.  (Filed as Exhibit 10.1 to Foster Wheeler
    Ltd.s Form 8-K, dated September 29, 2008 and filed on
    October 14, 2008, and incorporated herein by reference.)10
.7

Amendment No. 3, dated December 18, 2008, to the Credit
    Agreement, dated September 13, 2006, between Foster Wheeler LLC,
    Foster Wheeler Inc., Foster Wheeler USA Corporation, Foster
    Wheeler North America Corp., Foster Wheeler Energy Corporation
    and Foster Wheeler International Corporation, as borrowers,
    Foster Wheeler Ltd., Foster Wheeler AG, Foster Wheeler Holdings
    Ltd., the subsidiary guarantors party thereto, the lenders party
    thereto, and BNP Paribas.  (Filed as Exhibit 10.1 to Foster
    Wheeler Ltd.s Form 8-K, dated December 18, 2008 and filed
    on December 22, 2008, and incorporated herein by reference.)10
.8

Guarantee Facility, dated November 21, 2008, among Foster
    Wheeler Limited, Foster Wheeler Energy Limited, Foster Wheeler
    World Services Limited, Foster Wheeler (G.B.) Limited and The
    Bank of Scotland regarding, among other things, a
    £90,000,000 guarantee facility and a £150,000,000
    forward foreign exchange facility.10
.9

Corporate Guarantee, dated July 25, 2005, among Foster Wheeler
    Limited, Foster Wheeler Energy Limited, Foster Wheeler World
    Services Limited, Foster Wheeler (G.B.) Limited and The Bank of
    Scotland.  (Filed as Exhibit 99.2 to Foster Wheeler Ltd.s
    Form 10-Q for the quarter ended September 30, 2005, and
    incorporated herein by reference.)10
.10

Form of Debenture, dated July 25, 2005, issued in favor of The
    Bank of Scotland as Security Trustee. (Filed as Exhibit 99.3 to
    Foster Wheeler Ltd.s Form 10-Q for the quarter ended
    September 30, 2005, and incorporated herein by reference.)10
.11

Lease Agreement, dated as of August 16, 2002, by and among
    Energy (NJ) QRS 15-10, Inc. and Foster Wheeler Realty Services,
    Inc. (Filed as Exhibit 10.15 to Foster Wheeler Ltd.s Form
    10-Q for the quarter ended June 28, 2002, and incorporated
    herein by reference.)10
.12

Amendment to the Lease Agreement, dated as of January 6, 2003,
    between Energy (NJ) QRS 15-10, Inc. and Foster Wheeler Realty
    Services, Inc.  (Filed as Exhibit 10.30 to Foster Wheeler
    Ltd.s Form 10-K for the fiscal year ended December 27,
    2002, and incorporated herein by reference.)10
.13

Amendment No. 2, dated as of April 21, 2003, to the Lease
    Agreement between Energy (NJ) QRS
    15-10, Inc.
    and Foster Wheeler Realty Services, Inc.  (Filed as Exhibit 10.7
    to Foster Wheeler Ltd.s Form 10-Q for the quarter ended
    March 28, 2003, and incorporated herein by reference.)10
.14

Amendment No. 3, dated as of July 14, 2003, to the Lease
    Agreement dated August 16, 2002, between Energy (NJ) QRS 15-10,
    Inc. and Foster Wheeler Realty Services, Inc.  (Filed as Exhibit
    10.6 to Foster Wheeler Ltd.s Form 10-Q for the quarter
    ended June 27, 2003, and incorporated herein by reference.)10
.15

Guaranty and Suretyship Agreement, dated as of August 16, 2002,
    made by Foster Wheeler LLC, Foster Wheeler Ltd., Foster Wheeler
    Inc., Foster Wheeler International Holdings, Inc. and Energy
    (NJ)
    QRS 15-10,
    Inc.  (Filed as Exhibit 10.14 to Foster Wheeler Ltd.s Form
    10-Q for the quarter ended June 28, 2002 and incorporated herein
    by reference.)10
.16

Deed between Foster Wheeler LLC and Foster Wheeler Realty
    Services, Inc. and CIT Group Inc. (NJ), dated as of March 31,
    2003.  (Filed as Exhibit 10.3 to Foster Wheeler Ltd.s Form
    10-Q for the quarter ended March 28, 2003 and incorporated
    herein by reference.)10
.17

Preliminary Agreement for the Sale of Quotas, dated January 31,
    2006, between Foster Wheeler Italiana S.p.A., Fineldo S.p.A. and
    MPE S.p.A.  (Filed as Exhibit 10.29 to Foster Wheeler
    Ltd.s Form 10-K for the fiscal year ended December 30,
    2005, and incorporated herein by reference.)10
.18

Warrant Agreement between Foster Wheeler Ltd. and Mellon
    Investor Services LLC, including forms of warrant certificates.
    (Filed as Exhibit 4.10 to Foster Wheeler Ltd.s
    registration statement on Form S-3 (File No. 333-120076), filed
    on October 29, 2004 and incorporated herein by reference.) 146




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##### Table of Contents



ExhibitNo.

Exhibits10
.19

Supplemental Warrant Agreement, dated as of February 9, 2009, by
    and among Foster Wheeler AG, Foster Wheeler Ltd. and Mellon
    Investor Services LLC, as Warrant Agent. (Filed as Exhibit 4.1
    to Foster Wheeler AGs Form 8-K, dated February 6, 2009 and
    filed on February 9, 2009, and incorporated herein by reference.)10
.20

Master Guarantee Agreement, dated as of May 25, 2001, by and
    among Foster Wheeler LLC, Foster Wheeler International Holdings,
    Inc. and Foster Wheeler Ltd.  (Filed as Exhibit 10.9 to Foster
    Wheeler Ltd.s Form 10-Q for the quarter ended June 29,
    2001, and incorporated herein by reference.)10
.21*

Foster Wheeler Inc. Directors Deferred Compensation and Stock
    Award Plan, amended and restated effective as of May 25, 2001.
    (Filed as Exhibit 10.5 to Foster Wheeler AGs Form 8-K,
    dated February 6, 2009 and filed on February 9, 2009, and
    incorporated herein by reference.)10
.22*

Amendment to the Foster Wheeler Inc. Directors Deferred
    Compensation and Stock Award Plan.  (Filed as Exhibit 10.6 to
    Foster Wheeler AGs Form 8-K, dated February 6, 2009 and
    filed on February 9, 2009, and incorporated herein by reference.)10
.23*

Foster Wheeler Inc. Directors Stock Option Plan.  (Filed
    as Exhibit 99.1 to Foster Wheeler Ltd.s post effective
    amendment to Form S-8 (Registration No. 333-25945-99), filed on
    June 27, 2001, and incorporated herein by reference.)10
.24*

Amendment to Foster Wheeler Inc. Directors Stock Option
    Plan.  (Filed as Exhibit 10.1 to Foster Wheeler AGs Form
    8-K, dated February 6, 2009 and filed on February 9, 2009, and
    incorporated herein by reference.)10
.25*

1995 Stock Option Plan of Foster Wheeler Inc., as amended and
    restated as of September 24, 2002. (Filed as Exhibit 10.1 to
    Foster Wheeler Ltd.s Form 10-Q for the quarter ended
    September 27, 2002, and incorporated herein by reference.)10
.26*

First Amendment to the 1995 Stock Option Plan of Foster Wheeler
    Inc., as amended and restated as of September 24, 2002.10
.27*

Second Amendment to the 1995 Stock Option Plan of Foster Wheeler
    Inc., as amended and restated as of September 24, 2002.  (Filed
    as Exhibit 10.2 to Foster Wheeler AGs Form 8-K, dated
    February 6, 2009 and filed on February 9, 2009, and incorporated
    herein by reference.)10
.28*

Foster Wheeler Annual Executive Short-term Incentive Plan, as
    amended and restated effective January 1, 2006.  (Filed as
    Exhibit 10.20 to Foster Wheeler Ltd.s Form 10-K for the
    fiscal year ended December 29, 2006, and incorporated herein by
    reference.)10
.29*

First Amendment to the Foster Wheeler Annual Executive
    Short-term Incentive Plan.10
.30*

Second Amendment to the Annual Executive Short-term Incentive
    Plan of Foster Wheeler AG.  (Filed as Exhibit 10.7 to Foster
    Wheeler AGs Form 8-K, dated February 6, 2009 and filed on
    February 9, 2009, and incorporated herein by reference.)10
.31*

Foster Wheeler Ltd. 2004 Stock Option Plan.  (Filed as Exhibit
    10.2 to Foster Wheeler Ltd.s Form 8-K, dated September 29,
    2004 and filed on October 1, 2004, and incorporated herein by
    reference.)10
.32*

First Amendment to the Foster Wheeler Ltd. 2004 Stock Option
    Plan.  (Filed as Exhibit 99.1 to Foster Wheeler Ltd.s Form
    8-K, dated May 13, 2005 and filed on May 16, 2005, and
    incorporated herein by reference.)10
.33*

Second Amendment to the Foster Wheeler Ltd. 2004 Stock Option
    Plan.  (Filed as Exhibit 10.3 to Foster Wheeler AGs Form
    8-K, dated February 6, 2009 and filed on February 9, 2009, and
    incorporated herein by reference.)10
.34*

Form of First Amendment to the Foster Wheeler Ltd. 2004 Stock
    Option Plan with respect to non-employee directors.  (Filed as
    Exhibit 99.2 to Foster Wheeler Ltd.s Form 8-K, dated May
    13, 2005 and filed on May 16, 2005, and incorporated herein by
    reference.)10
.35*

Form of Amended and Restated Notice of Stock Option Grant with
    respect to executive officers, officers and key employees.
    (Filed as Exhibit 99.3 to Foster Wheeler Ltd.s Form 8-K,
    dated May 13, 2005 and filed on May 16, 2005, and incorporated
    herein by reference.)10
.36*

Foster Wheeler Ltd. Omnibus Incentive Plan.  (Filed as Exhibit
    10.1 to Foster Wheeler Ltd.s Form 8-K, dated May 9, 2006
    and filed on May 12, 2006, and incorporated herein by
    reference.) 147




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##### Table of Contents



ExhibitNo.

Exhibits10
.37*

First Amendment to the Foster Wheeler Ltd. Omnibus Incentive
    Plan.10
.38*

Second Amendment to the Foster Wheeler Ltd. Omnibus Incentive
    Plan.  (Filed as Exhibit 10.4 to Foster Wheeler AGs Form
    8-K, dated February 6, 2009 and filed on February 9, 2009, and
    incorporated herein by reference.)10
.39*

Form of Directors Stock Option Agreement effective June
    16, 2006 by and between Foster Wheeler Ltd. and each of Ralph
    Alexander, Eugene Atkinson, Diane C. Creel, Robert C. Flexon,
    Stephanie
    Hanbury-Brown,
    Joseph J. Melone and James D. Woods.  (Filed as Exhibit 10.2 to
    Foster Wheeler Ltd.s Form 8-K, dated June 14, 2006 and
    filed on June 16, 2006, and incorporated herein by reference.)10
.40*

Form of Employee Nonqualified Stock Option Agreement effective
    November 15, 2006 with respect to certain employees and
    executive officers.  (Filed as Exhibit 10.1 to Foster Wheeler
    Ltd.s Form 8-K, dated November 15, 2006 and filed on
    November 17, 2006, and incorporated herein by reference.)10
.41*

Form of Employee Nonqualified Stock Option Agreement effective
    May 6, 2008 with respect to certain employees and executive
    officers.10
.42*

Form of Employee Restricted Stock Unit Award Agreement effective
    November 15, 2006 with respect to certain employees and
    executive officers.  (Filed as Exhibit 10.2 to Foster Wheeler
    Ltd.s Form 8-K, dated November 15, 2006 and filed on
    November 17, 2006, and incorporated herein by reference.)10
.43*

Form of Employee Restricted Stock Unit Award Agreement effective
    May 6, 2008 with respect to certain employees and executive
    officers.10
.44*

Form of Director Nonqualified Stock Option Agreement effective
    November 15, 2006 with respect to non-employee directors.
    (Filed as Exhibit 10.3 to Foster Wheeler Ltd.s Form 8-K,
    dated November 15, 2006 and filed on November 17, 2006, and
    incorporated herein by reference.)10
.45*

Form of Director Nonqualified Stock Option Agreement effective
    May 6, 2008 with respect to non-employee directors.10
.46*

Form of Director Restricted Stock Unit Agreement effective
    November 15, 2006 with respect to non-employee directors.
    (Filed as Exhibit 10.4 to Foster Wheeler Ltd.s Form 8-K,
    dated November 15, 2006 and filed on November 17, 2006, and
    incorporated herein by reference.)10
.47*

Form of Director Restricted Stock Unit Agreement effective May
    6, 2008 with respect to non-employee directors.10
.48*

Form of Change of Control Agreement, dated as of May 25, 2001,
    and entered into by Foster Wheeler Ltd. with executive officers.
    (Filed as Exhibit 10.5 to Foster Wheeler Ltd.s Form 10-Q
    for the quarter ended June 29, 2001, and incorporated herein by
    reference.)10
.49*

Form of Indemnification Agreement for directors and officers of
    Foster Wheeler Ltd. and Foster Wheeler Inc., dated as of
    November 3, 2004.  (Filed as Exhibit 99.1 to Foster Wheeler
    Ltd.s Form 8-K, dated November 3, 2004 and filed on
    November 8, 2004, and incorporated herein by reference.)10
.50*

Form of Indemnification Agreement for directors and officers of
    Foster Wheeler AG, dated as of February 9, 2009.  (Filed as
    Exhibit 10.10 to Foster Wheeler AGs Form 8-K, dated
    February 6, 2009 and filed on February 9, 2009, and incorporated
    herein by reference.)10
.51*

Form of Notice and Acknowledgement for executive officers of
    Foster Wheeler AG, dated as of February 9, 2009.  (Filed as
    Exhibit 10.8 to Foster Wheeler AGs Form 8-K, dated
    February 6, 2009 and filed on February 9, 2009, and incorporated
    herein by reference.)10
.52*

Form of Notice and Acknowledgement for David Wardlaw, dated as
    of February 9, 2009.  (Filed as Exhibit 10.9 to Foster
    Wheeler AGs Form 8-K, dated February 6, 2009 and filed on
    February 9, 2009, and incorporated herein by reference.)10
.53*

Employment Agreement between Foster Wheeler Ltd. and Raymond J.
    Milchovich, dated as of August 11, 2006.  (Filed as Exhibit
    10.1 to Foster Wheeler Ltd.s Form 8-K, dated August 7,
    2006 and filed on August 11, 2006, and incorporated herein by
    reference.)10
.54*

First Amendment to the Employment Agreement, dated January 30,
    2007, between Foster Wheeler Ltd. and Raymond J. Milchovich.
    (Filed as Exhibit 10.2 to Foster Wheeler Ltd.s Form 8-K,
    dated January 30, 2007 and filed on February 2, 2007, and
    incorporated herein by reference.) 148




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##### Table of Contents



ExhibitNo.

Exhibits10
.55*

Second Amendment to the Employment Agreement, dated February 27,
    2007, between Foster Wheeler Ltd. and Raymond J.
    Milchovich. (Filed as Exhibit 10.1 to Foster Wheeler Ltd.s
    Form 8-K, dated February 27, 2007 and filed on March 2, 2007,
    and incorporated herein by reference.)10
.56*

Amended and Restated Employment Agreement, dated as of May 6,
    2008, between Foster Wheeler Ltd. and Raymond J. Milchovich.
    (Filed as Exhibit 10.2 to Foster Wheeler Ltd.s Form 8-K,
    dated May 6, 2008 and filed on May 12, 2008, and incorporated
    herein by reference.)10
.57*

Amended and Restated Employment Agreement, dated as of November
    4, 2008, between Foster Wheeler Ltd. and Raymond J.
    Milchovich. (Filed as Exhibit 10.1 to Foster Wheeler Ltd.s
    Form 8-K, dated November 4, 2008 and filed on November 5, 2008,
    and incorporated herein by reference.)10
.58*

Stock Option Agreement of Raymond J. Milchovich, dated as of
    October 22, 2001.  (Filed as Exhibit 10.13 to Foster Wheeler
    Ltd.s Form 10-K for the fiscal year ended December 28,
    2001, and incorporated herein by reference.)10
.59*

Employees Restricted Stock Award Agreement of Raymond J.
    Milchovich, dated as of August 11, 2006.  (Filed as Exhibit 10.2
    to Foster Wheeler Ltd.s Form 8-K, dated August 7, 2006 and
    filed on August 11, 2006, and incorporated herein by reference.)10
.60*

Employee Nonqualified Stock Option Agreement of Raymond J.
    Milchovich, dated as of August 11, 2006. (Filed as Exhibit 10.3
    to Foster Wheeler Ltd.s Form 8-K, dated August 7, 2006 and
    filed on August 11, 2006, and incorporated herein by
    reference.)10
.61*

Employment Agreement between Foster Wheeler Ltd. and Peter J.
    Ganz, dated as of October 10, 2005. (Filed as Exhibit 10.1 to
    Foster Wheeler Ltd.s Form 10-Q for the quarter ended
    September 30, 2005, and incorporated herein by reference.)10
.62*

First Amendment to the Employment Agreement, dated as of October
    6, 2006, between Foster Wheeler Ltd. and Peter J. Ganz.  (Filed
    as Exhibit 99.3 to Foster Wheeler Ltd.s Form 8-K, dated
    October 5, 2006 and filed on October 10, 2006, and incorporated
    herein by reference.)10
.63*

Amended and Restated Employment Agreement, dated as of May 6,
    2008, between Foster Wheeler Ltd. and Peter J. Ganz.  (Filed as
    Exhibit 10.3 to Foster Wheeler Ltd.s Form 8-K, dated May
    6, 2008 and filed on May 12, 2008, and incorporated herein by
    reference.)10
.64*

Restricted Stock Award Agreement of Peter J. Ganz, dated as of
    October 24, 2005.  (Filed as Exhibit 10.3 to Foster Wheeler
    Ltd.s Form 10-Q for the quarter ended September 30, 2005,
    and incorporated herein by reference.)10
.65*

English Translation of Supplemental Employment Agreement,
    effective as of November 12, 2007, among Foster Wheeler
    Continental Europe S.r.L., Foster Wheeler Ltd., and Franco
    Baseotto. (Filed as Exhibit 10.1 to Foster Wheeler Ltd.s
    Form 8-K, dated November 12, 2007 and filed on November 14,
    2007, and incorporated herein by reference.)10
.66*

English Translation of Change of Control Agreement, effective as
    of November 12, 2007, among Foster Wheeler Continental Europe
    S.r.L., Foster Wheeler Ltd., and Franco Baseotto.  (Filed as
    Exhibit 10.2 to Foster Wheeler Ltd.s Form 8-K, dated
    November 12, 2007 and filed on November 14, 2007, and
    incorporated herein by reference.)10
.67*

Employment Agreement, dated as of May 6, 2008, between Foster
    Wheeler Ltd. and Franco Baseotto. (Filed as Exhibit 10.1 to
    Foster Wheeler Ltd.s Form 8-K, dated May 6, 2008 and filed
    on May 12, 2008, and incorporated herein by reference.)10
.68*

Unofficial English Translation of Fixed Term Employment
    Agreement, effective as of April 1, 2008, between Foster Wheeler
    Continental Europe S.r.L. and Umberto della Sala. (Filed as
    Exhibit 10.1 to Foster Wheeler Ltd.s Form 8-K, dated
    February 22, 2008 and filed on February 28, 2008, and
    incorporated herein by reference.)10
.69*

Employment Agreement, dated as of March 1, 2008, between Foster
    Wheeler Ltd. and Umberto della Sala. (Filed as Exhibit 10.2 to
    Foster Wheeler Ltd.s Form 8-K, dated February 22, 2008 and
    filed on February 28, 2008, and incorporated herein by
    reference.) 149




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##### Table of Contents



ExhibitNo.

Exhibits10
.70*

Agreement for the Termination of Fixed Term Employment Contract,
    dated as of September 30, 2008, between Foster Wheeler
    Continental Europe S.r.L. and Umberto della Sala. (Filed as
    Exhibit 10.3 to Foster Wheeler Ltd.s Form 10-Q for the
    quarter ended September 26, 2008, and incorporated herein by
    reference.)10
.71*

Fixed Term Employment Agreement, dated as of October 1, 2008,
    between Foster Wheeler Global E&C S.r.L. and Umberto della
    Sala.  (Filed as Exhibit 10.4 to Foster Wheeler Ltd.s Form
    10-Q for the quarter ended September 26, 2008, and incorporated
    herein by reference.)10
.72*

First Amendment to the Employment Agreement, dated as of October
    1, 2008, between Foster Wheeler Ltd. and Umberto della Sala.
    (Filed as Exhibit 10.5 to Foster Wheeler Ltd.s Form 10-Q
    for the quarter ended September 26, 2008, and incorporated
    herein by reference.)10
.73*

Employment Agreement, dated as of August 20, 2008, between
    Foster Wheeler Ltd. and Peter D. Rose. (Filed as Exhibit 10.2 to
    Foster Wheeler Ltd.s Form 10-Q for the quarter ended
    September 26, 2008, and incorporated herein by reference.)10
.74*

Employment Agreement, dated as of April 7, 2008, between Foster
    Wheeler Ltd. and Beth Sexton. (Filed as Exhibit 10.3 to Foster
    Wheeler Ltd.s Form 10-Q for the quarter ended March 28,
    2008, and incorporated herein by reference.)10
.75*

Deed of Variation, dated as of October 8, 2008, between Foster
    Wheeler Energy Limited and David Wardlaw.  (Filed as
    Exhibit 10.1 to Foster Wheeler Ltd.s Form 8-K, dated
    October 8, 2008 and filed on October 14, 2008, and incorporated
    herein by reference.)10
.76*

Employment Agreement, dated as of January 6, 2009, between
    Foster Wheeler North America Corp. and Gary T. Nedelka.10
.77*

Employment Agreement, dated as of January 6, 2009, between
    Foster Wheeler Ltd. and Lisa Z. Wood.21
.0

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.23
.2

Consent of Analysis, Research & Planning Corporation.23
.3

Consent of Peterson Risk Consulting LLC.31
.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 of Raymond J. Milchovich.31
.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 of Franco Baseotto.32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002 of Raymond J. Milchovich.32
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002 of Franco Baseotto.     *
    
    Management contract or compensation plan or arrangement required
    to be filed as an exhibit to this form pursuant to
    Item 15(b) of this report. 150




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##### Table of Contents



SIGNATURES
       By:
    /s/  Franco
    Baseotto          Signature

Title/s/  Raymond
    J. MilchovichRaymond
    J. Milchovich
    (Principal Executive Officer)

Director, Chairman of the Board and Chief Executive Officer/s/  Franco
    BaseottoFranco
    Baseotto
    (Principal Financial Officer)

Executive Vice President, Chief Financial Officer and
    Treasurer/s/  Lisa
    Z. WoodLisa
    Z. Wood
    (Principal Accounting Officer)

Vice President and Controller/s/  Eugene
    D. AtkinsonEugene
    D. Atkinson

Director/s/  Steven
    J. DemetriouSteven
    J. Demetriou

Director/s/  Robert
    C. FlexonRobert
    C. Flexon

Director/s/  Edward
    G. GalanteEdward
    G. Galante

Director/s/  Stephanie
    Hanbury-BrownStephanie
    Hanbury-Brown

Director/s/  Maureen
    B. Tart-BezerMaureen
    B. Tart-Bezer

Director/s/  James
    D. WoodsJames
    D. Woods

Director  151