##### Table of Contents



UNITED
    STATES
    SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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 29, 2006ORo

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 LTD.
 (Exact name of registrant as
    specified in its charter)
  BERMUDA

22-3802649(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification No).Perryville Corporate Park,
    Clinton, New Jersey

08809-4000(Address of Principal Executive
    Offices)

(Zip Code)   Registrants telephone
    number, including area
    code:(908) 730-4000Securities Registered Pursuant to
    Section 12(b) of the Act:NONESecurities Registered Pursuant to
    Section 12(g) of the Act:    (Title of Each Class)

(Name of Each Exchange on which
    Registered)Foster Wheeler Ltd.,

NASDAQ Stock Market
    LLCCommon Shares, $0.01 par
    valueFoster Wheeler Ltd.,

Over-the-Counter
    Bulletin BoardSeries B Convertible
    Preferred Shares, $0.01 par valueFoster Wheeler Ltd.,

NASDAQ Stock Market
    LLCClass A and Class B
    Common Share Purchase Warrants   þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated filer
    þ     Accelerated
    filer o     Non-accelerated
    filer o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE:




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##### Table of Contents



FOSTER
    WHEELER LTD.
  INDEX
  
  ITEM



PagePART I1.

Business


21A.

Risk
    Factors


71B.

Unresolved Staff
    Comments


152.

Properties


163.

Legal
    Proceedings


184.

Submission of
    Matters to a Vote of Security Holders


18PART II5.

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


196.

Selected Financial
    Data


217.

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


237A.

Quantitative and
    Qualitative Disclosures about Market Risk


568.

Financial
    Statements and Supplementary Data


579.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


1229A.

Controls and
    Procedures


1229B.

Other
    Information


123PART III10.

Directors and
    Executive Officers of the Registrant


12411.

Executive
    Compensation


12412.

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


12413.

Certain
    Relationships and Related Transactions


12614.

Principal
    Accounting Fees and Services


126PART IV15.

Exhibits and
    Financial Statement Schedules


127    1




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##### Table of Contents



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




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##### Table of Contents



Form 10-K
  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, 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 or services on behalf of our client, where the client
    will pay for the materials at cost and reimburse us the cost of
    our 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 two years.  sub-critical
 3




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
    Circulating Fluidized-Bed Boilers  Our Global
    Power Group designs, manufactures and supplies boilers that
    utilize proprietary CFB technology. CFB combustion is one of the
    most efficient, environmentally friendly and versatile ways to
    generate steam from coal and many other solid fuels and waste
    products with reduced environmental pollutants. A CFB boiler
    utilizes air jets at the base of the boiler to blow 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 capture
    pollutants, such as the oxides of sulfur, which we refer to as
    SOx. Due to the resulting efficiency 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 nitrogen oxides, which we refer to as NOx, which is
    another pollutant formed in 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 in the efficiency of an electric
    power plant. We sell our CFB boilers to clients worldwide.
    Pulverized Coal Boilers  Our Global Power
    Group designs, manufactures and supplies pulverized coal fired
    boilers, which we refer to as PC boilers. PC boilers are
    commonly used in large electric utility coal fired power plant
    applications. The coal is pulverized into fine particles and
    injected through specially designed low emission burners. Our PC
    boilers control NOx by utilizing advanced low-NOx combustion
    technology and selective catalytic reduction technology, which
    we refer to as SCR. However, unlike CFB technology, PC
    technology requires pollution control equipment to be installed
    along with the boiler to capture SOx. We offer our PC boilers
    with either conventional
    sub-critical
    steam technology or more efficient supercritical steam
    technology for electric power plant applications. We sell our PC
    boilers to clients worldwide.
    Auxiliary Equipment and Aftermarket Services 
    Our Global Power Group also manufactures and installs integral
    components for natural gas, oil and solid fuel-fired power
    generation facilities, including surface condensers, feedwater
    heaters, coal pulverizers and NOx reduction systems. The NOx
    reduction systems include selective catalytic reduction
    equipment and low NOx combustion systems, and can significantly
    reduce NOx emissions. These products can be used with a wide
    range of steam generators. Our Global Power Group also supplies
    replacement components, repair parts, boiler modifications and
    engineered solutions for steam generators worldwide.    Industries
    We Serve
    
    Oil and gas;
    Oil refining;
    Chemical/petrochemical;
    Pharmaceutical; 4




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
    Environmental;
    Power generation; and
    Power plant operation and maintenance.  Customers
    and Marketing
    Licenses,
    Patents and Trademarks
    Unfilled
    Orders
    mark-up
    Use of
    Raw Materials
   5




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Compliance
    with Government Regulations
    Competition
    Employees
    As ofDecember 29,


December 30,2006


2005Global E&C Group


8,887



6,302Global Power Group


3,027



2,575C&F Group


78



7611,992



8,953   Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, www.fwc.com Form 10-K.
  1-800-SEC-0330. www.sec.gov
 6




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ITEM 1A.
    RISK
    FACTORS  Risk
    Factors Relating to Our Business
  Form 10-K.
  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 suppliers or subcontractors failure to perform.  agreed-upon
     7




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percentage-of-completion Form 10-K.
  Failure
    by us to successfully defend against claims made against us by
    project owners or by our project subcontractors, or failure by
    us to recover adequately on claims made against project owners,
    could have a material adverse effect upon our financial
    condition, results of operations and cash flow.
  and/or
  We
    require cash repatriations from our
    non-U.S. subsidiaries
    to meet our domestic cash needs related to our U.S. pension
    plans, asbestos-related 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 and/or non-U.S. subsidiaries
  Our
    international operations involve risks that may limit or disrupt
    operations, limit repatriation of cash, increase foreign
    taxation or otherwise have a material adverse effect on our
    business, financial condition, results of operations and cash
    flow.
    
    uncertain political, legal and economic environments;
    potential incompatibility with foreign joint venture partners;
    foreign currency controls and fluctuations;
    energy prices and availability; 8




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
    terrorist attacks;
    the imposition of additional governmental controls and
    regulations;
    war and civil disturbances; and
    labor problems.    Certain
    of our various debt agreements impose financial covenants, which
    may prevent us from capitalizing on business opportunities and
    taking certain corporate actions, which could materially
    adversely affect our business, financial condition, results of
    operations and cash flow.
    We
    face limitations on our ability to obtain new letters of credit
    and bank guarantees on the same terms as we have historically.
    If we were unable to obtain letters of credit and bank
    guarantees on reasonable terms, our business, financial
    condition, results of operations and cash flow would be
    materially adversely affected.
    We may
    have high working capital requirements and we may have
    difficulty obtaining additional financing, which could have a
    negative impact on our business, financial condition, results of
    operations and cash flow.
    Projects
    included in our backlog may be delayed or cancelled, which could
    materially adversely affect our financial condition, results of
    operations and cash flow.
   9




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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 financial condition, results of operations and cash
    flow.
  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
    these 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 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-year 15-year 15-year
 10




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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 cause a material
    adverse effect on our financial condition, results of operations
    and cash flow.
      out-of-pocket
 11




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National
    asbestos trust fund legislation could require us to pay amounts
    in excess of current estimates of our net asbestos liability,
    which could adversely affect our financial condition, results of
    operations and long-term cash flow.
    The
    number of asbestos-related claims received by our subsidiaries
    in the United Kingdom has recently increased. 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 have a material adverse effect on our financial
    condition, results of operations and cash flow.
  and/or
  Because
    our operations are concentrated in four particular industries,
    we may be adversely impacted by economic or other developments
    in these industries.
   12




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We may
    lose business to competitors.
  and/or
  A
    failure by us to attract and retain qualified personnel, joint
    venture partners, advisors and subcontractors could have an
    adverse effect on our business, financial condition, results of
    operations and cash flow.
    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 have to incur significant costs and
    penalties that could adversely affect our financial condition,
    results of operations and cash flow.
      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.
   13




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We may
    lose market share 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.
    We
    have anti-takeover provisions in our bye-laws that may
    discourage a change of control.
    
    The board of directors to be divided into three classes serving
    staggered three-year terms. Directors can be removed from office
    only for cause, by the affirmative vote of the holders of
    two-thirds of the issued shares generally entitled to vote. The
    board of directors does not have the power to remove directors.
    Vacancies on the board of directors may only be filled by the
    remaining directors. Each of these provisions can delay a
    shareholder from obtaining majority representation on the board
    of directors.
    Any amendment to the bye-law limiting the removal of directors
    to be approved by the board of directors and the affirmative
    vote of the holders of three-quarters of the issued shares
    entitled to vote at general meetings.
    The board of directors to consist of not less than three nor
    more than 20 persons, the exact number to be set from time to
    time by a majority of the whole board of directors. Accordingly,
    the board of directors, and not the shareholders, has the
    authority to determine the number of directors and could delay
    any shareholder from obtaining majority representation on the
    board of directors by enlarging the board of directors and
    filling the new vacancies with its own nominees until a general
    meeting at which directors are to be appointed.
    Restrictions on the time period in which directors may be
    nominated. A shareholder notice to nominate an individual for
    election as a director must be received no less than 120
    calendar days prior to the anniversary of the date on which we
    first mailed our proxy materials for the preceding years
    annual meeting.
    Restrictions on the time period in which shareholder proposals
    may be submitted. To be timely for inclusion in our proxy
    statement, a shareholders notice for a shareholder
    proposal must be received not less than 120 days prior to
    the first anniversary of the date on which we first mailed our
    proxy materials for the preceding years annual general
    meeting. To be timely for consideration at the annual meeting of
    shareholders, a shareholders notice must be received no
    less than 45 days prior to the anniversary of the date on
    which we first mailed our proxy materials for the preceding
    years annual meeting. 14




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
    The board of directors to determine the powers, preferences and
    rights of preference shares and to issue preference shares
    without shareholder approval. The board of directors could
    authorize the issuance of preference shares with terms and
    conditions that could discourage a takeover or other transaction
    that holders of some or a majority of the common shares might
    believe to be in their best interests or in which holders might
    receive a premium for their shares over the then market price of
    the shares.
    A general prohibition on business combinations
    between Foster Wheeler Ltd. and an interested
    member. Specifically, business combinations
    between an interested member and Foster Wheeler Ltd. are
    prohibited for a period of five years after the time the
    interested member acquires 20% or more of our outstanding voting
    shares, unless the business combination or the transaction
    resulting in the person becoming an interested member is
    approved by the board of directors prior to the date the
    interested member acquires 20% or more of the outstanding voting
    shares.    and/or
  
    Any matter submitted to the shareholders at a meeting called on
    the requisition of shareholders holding not less than one-tenth
    of our
    paid-up
    voting shares to be approved by the affirmative vote of all of
    the shares eligible to vote at such meeting.    We are
    a Bermuda company and it may be difficult to enforce judgments
    against us or our directors and executive
    officers.
    Our
    bye-laws restrict shareholders from bringing legal action
    against our officers and directors.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   15




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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



General office &
    engineering


29.4 acres



294,000


2022Storage and reproduction facilities


10.8 acres



30,400Livingston, New Jersey

Research center


6.7 acres



51,355Bedminster, New Jersey

Investment in land and office


10.7 acres
(2)


135,000
(2,3)Foster Wheeler Energy Services,
    Inc. (GPG)San Diego, California

Office






11,015


2008Foster Wheeler USA Corporation
    (E&C)Houston, Texas

Office & engineering






107,890


2013(4)Houston, Texas

Office & engineering






59,671


2009Foster Wheeler Iberia, S.A.
    (E&C)/(GPG)Madrid, Spain

Office & engineering


5.5 acres



110,000


2015Santiago, Chile

Office & engineering






16,071


2011Foster Wheeler Energia, S.A.
    (GPG)Tarragona, Spain

Manufacturing & office


25.6 acres



77,794Foster Wheeler France, S.A.
    (E&C)Paris, France

Office & engineering






79,244


2007Foster Wheeler International
    Corporation (Thailand Branch) (E&C)Sriracha, Thailand

Office & engineering






39,556


2008Sriracha, Thailand

Office & engineering






31,944


2008Sriracha, Thailand

Office & engineering






12,198


2008Foster Wheeler International
    Engineering
     & Consulting (Shanghai) Company Limited (GPG and
    E&C)Shanghai, China

Office






20,443


2007Shanghai, China

Office






21,072


2009Shanghai, China

Office






21,020


2010Foster Wheeler Constructors,
    Inc. (GPG)McGregor, Texas

Storage facilities


15.0 acres



24,000Foster Wheeler Limited
    (UnitedKingdom)
    (E&C)Glasgow, Scotland

Office & engineering


2.3 acres



28,798
(2)Reading, England

Office & engineering






55,193


2007Reading, England

Office & engineering


14.0 acres



395,521


2024Reading, England

Investment in undeveloped land


12.0 acres



Teesside, England

Office & engineering






18,001


2007/2014Foster Wheeler Canada Ltd.
    (GPG)Niagara-On-The-Lake,
    Ontario

Office & engineering






29,066


2008 16




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Company (Business Segment*)





Building


Leaseand Location

Use

Land Area

Square Feet


Expires(1)Foster Wheeler Power Machinery
    Company Limited (GPG)Xinhui, Guangdong, China

Manufacturing & office


30.0 acres


409,281
(5)

2045Jiangmen City, Guangdong, China

Manufacturing





47,275


2007Foster Wheeler Italiana, S.p.A.
    (E&C)Milan, Italy

Office & engineering





142,000


2011Milan, Italy

Office & engineering





121,870
(2)

2008Milan, Italy

Office & engineering





21,528


2011Milan, Italy

Manufacturing & office





21,500


2007Foster Wheeler Pyropower, Inc.
    (GPG)Ridgecrest, California

Office & storage
    facilities





10,000


month to
    monthFoster Wheeler Birlesik Insaat
    ve Muhendislik A.S. (E&C)Istanbul, Turkey

Office & engineering





18,000


2007Foster Wheeler Eastern Private
    Limited (E&C)Singapore

Office & engineering





40,210


2008Singapore

Office & engineering





19,016


2007Singapore

Office & engineering





14,413


2007Foster Wheeler Power Systems,
    Inc. (GPG)Martinez, California

Cogeneration plant


6.4 acres


Camden, New Jersey

Waste-to-energy
    plant


18.0 acres





2011Talcahuano, Chile

Cogeneration plant-facility site


21.0 acres





2028Foster Wheeler Energia OY
    (GPG)Varkaus, Finland

Manufacturing & office


22.2 acres


366,716Varkaus, Finland

Office





100,750


2031Karhula, Finland

Office


9.0 acres


59,966
(2)

2095Espoo, Finland

Office





14,639


2011Foster Wheeler Energi AB
    (GPG)Norrkoping, Sweden

Manufacturing & office





37,990


2014Foster Wheeler Service
    (Thailand) Limited (GPG)Rayong, Thailand

Manufacturing & office





129,167


2008Foster Wheeler Energy FAKOP Sp.
    z o.o. (GPG)Sosnowiec, Poland

Manufacturing & office


23.1 acres


271,152
(6)

2089     *
    
    Designation of Business
    Segments:     E&C  -
    Global Engineering  & Construction Group
    GPG  - Global Power Group
    C&F  - Corporate & Finance Group(1)
    
    Represents leases in which Foster Wheeler is the lessee.(2)
    
    Portion or entire facility leased or subleased to third parties.(3)
    
    50% ownership interest.(4)
    
    Notice of lease termination provided in January 2007; lease
    terminates in January 2008.(5)
    
    52% ownership interest.(6)
    
    53% ownership interest. 17




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ITEM 3.
    LEGAL
    PROCEEDINGS  Form 10-K.
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   18




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PART II ITEM 5. MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Over-the-Counter
  Over-the-Counter Over-the-Counter mark-ups,
  Three months endedMarch 31,


June 30,


September 29,


December 29,2006


2006


2006


2006Cash dividends per share

$



$



$



$
Common share prices:High

$
53.70


$
52.88


$
44.86


$
56.93Low

$
35.98


$
34.86


$
32.01


$
38.05   Three months endedApril 1,


July 1,


September 30,


December 30,2005


2005


2005


2005Cash dividends per share

$



$



$



$
Common share prices:High

$
19.65


$
20.61


$
31.44


$
37.89Low

$
12.40


$
12.85


$
19.55


$
26.26     one-for-twenty Form 10-K,
   19




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Performance
    Graph
    Comparison
    of Cumulative Five Year Total Return
  
    For the Year EndedDecember 28,


December 27,


December 26,


December 31,


December 30,


December 29,2001


2002


2003


2004


2005


2006Foster Wheeler Ltd.

$
100.00


$
26.28


$
23.93


$
16.96


$
39.29


$
58.91S&P 500 Index


100.00



76.65



97.70



109.92



115.32



133.53Peer
    Group(1)


100.00



91.26



141.19



178.22



283.28



360.75     (1)
    
    The following companies comprise the Peer Group: Fluor
    Corporation, Foster Wheeler Ltd., Jacobs Engineering Group Inc.,
    Washington Group International, Inc. (formerly Morrison
    Knudsen), and McDermott International, Inc. On January 25,
    2003, Washington Group International, Inc. emerged from
    Chapter 11 Bankruptcy protection and under the Plan of
    Reorganization Washington Groups old common stock (WNGXQ)
    was canceled and new common stock was issued and distributed to
    lenders and creditors in accordance with the Plan. The Peer
    Group consists of companies that were compiled by us in 1996 for
    benchmarking the performance of our common shares; we have used
    this peer index since that time. 20




---



##### Table of Contents



ITEM 6. SELECTED
    FINANCIAL DATA  COMPARATIVE
    FINANCIAL STATISTICS
    (amounts in thousands of dollars, except share data and per
    share amounts)
  For the Year EndedDecember 29,


December 30,


December 31,


December 26,


December 27,2006


2005


2004


2003


2002Statement of Operations
    Data:Operating revenues

$
3,495,048


$
2,199,955


$
2,661,324


$
3,723,815


$
3,519,177Income/(loss) before income taxes


343,693
(1)


(70,181
)(2)


(232,172
)(3)


(109,637
)(4)


(360,062
)(5)Provision for income taxes


(81,709
)


(39,568
)


(53,122
)


(47,426
)


(14,657
)Income/(loss) prior to cumulative
    effect of a change in accounting principle


261,984



(109,749
)


(285,294
)


(157,063
)


(374,719
)Cumulative effect of a change in
    accounting principle for goodwill, net of $0 tax


















(150,500
)(6)Net income/(loss)

$
261,984


$
(109,749
)

$
(285,294
)

$
(157,063
)

$
(525,219
)Basic earnings/(loss) per common
    share:(7)Net income/(loss) prior to
    cumulative effect of a change in accounting principle

$
3.65
(8)

$
(2.36
)

$
(57.84
)

$
(76.53
)

$
(182.98
)Cumulative effect on prior years
    (to December 29, 2001) of a change in accounting
    principle


















(73.49
)Basic earnings/(loss) per common
    share

$
3.65
(8)

$
(2.36
)

$
(57.84
)

$
(76.53
)

$
(256.47
)Diluted earnings/(loss) per
    common
    share:(7)Net income/(loss) prior to
    cumulative effect of a change in accounting principle

$
3.43
(8)

$
(2.36
)

$
(57.84
)

$
(76.53
)

$
(182.98
)Cumulative effect on prior years
    (to December 29, 2001) of a change in accounting
    principle


















(73.49
)Diluted earnings/(loss) per common
    share

$
3.43
(8)

$
(2.36
)

$
(57.84
)

$
(76.53
)

$
(256.47
)Shares
    outstanding:(7)Weighted-average number of common
    shares outstanding for basic earnings/(loss) per common share


66,498,192



46,570,088



4,932,370



2,052,229



2,047,835Effect of dilutive securities


4,110,796



*



*



*



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


70,608,988



46,570,088



4,932,370



2,052,229



2,047,835   As ofDecember 29,


December 30,


December 31,


December 26,


December 27,2006


2005


2004


2003


2002Balance Sheet Data:Current assets

$
1,389,320


$
851,523


$
1,039,458


$
1,174,376


$
1,329,847Current liabilities


1,247,603



997,564



1,251,581



1,350,359



1,449,795Working capital


141,717



(146,041
)


(212,123
)


(175,983
)


(119,948
)Land, buildings and equipment, net


302,488



258,672



280,305



309,615



407,819Total assets


2,566,023



1,894,706



2,177,699



2,506,530



2,842,277Long-term borrowings (including
    current installments)


202,969



315,412



570,073



1,033,072



1,124,262Total temporary equity


983















Total shareholders
    equity/(deficit)


62,727



(341,158
)


(525,565
)


(872,440
)


(780,939
)Other Data:Unfilled orders, end of year

$
5,431,400


$
3,692,300


$
2,048,100


$
2,285,400
(9)

$
5,445,900New orders booked


4,892,200



4,163,000



2,437,100



2,163,500



3,052,400  21




---



##### Table of Contents



(1)
    
    Includes in fiscal year 2006: decreased contract profit of
    $(5,700) from the regular re-evaluation of contract profit
    estimates; net asbestos-related gains of $100,100; an aggregate
    charge of $(15,000) recorded in conjunction with the voluntary
    termination of our prior domestic senior credit agreement; and a
    net charge of $(12,500) recorded in conjunction with the debt
    reduction initiatives completed in April and May 2006.(2)
    
    Includes in fiscal year 2005: increased contract profit of
    $99,600 from the regular re-evaluation of contract profit
    estimates; a charge of $(113,700) on the revaluation of our
    estimated asbestos liability and asbestos insurance receivable;
    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.(3)
    
    Includes in fiscal year 2004: increased contract profit of
    $37,600 from the regular re-evaluation of contract profit
    estimates; 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 insurance assets 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).(4)
    
    Includes in fiscal year 2003: a $(15,100) impairment loss on the
    anticipated sale of a domestic corporate office building; a
    $16,700 gain on the sale of certain assets of Foster Wheeler
    Environmental Corporation and a gain of $4,300 on the sale of a
    waste-to-energy
    plant; a gain on revisions to project claim estimates and
    related cost of $1,500; a charge related to revisions of project
    estimates and related receivable allowances of $(32,300); a
    provision for asbestos claims of $(68,100); restructuring and
    credit agreement costs of $(43,600); and charges for severance
    cost of $(15,900).(5)
    
    Includes in fiscal year 2002: a loss recognized in anticipation
    of sales of assets of $(54,500); a charge related to revisions
    of project claim estimates and related costs of $(136,200); a
    charge related to revisions of project cost estimates and
    related receivable allowances of $(80,500); a provision for
    asbestos claims of $(26,200); a provision for a domestic plant
    impairment of $(18,700); restructuring and credit agreement
    costs of $(37,100); and charges for severance cost of $(7,700).(6)
    
    In fiscal year 2002, we recognized $(150,500) of impairment
    losses upon the adoption of Statement of Financial Accounting
    Standards No. 142, Goodwill and Other Intangible
    Assets.(7)
    
    Amounts include the impact of the
    one-for-twenty
    reverse 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.(9)
    
    The decline in backlog includes a decrease of $1,673,900
    resulting from the divestiture of Foster Wheeler Environmental
    Corporation in March 2003.*
    
    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 earnings/(loss) per common share due to
    their antidilutive effect. 22




---



##### 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)  Form 10-K
  Form 10-K.
  Overview
    Fiscal
    Year 2006 Results
    
    Our consolidated operating revenues increased 58.9% to
    $3,495,000, as compared to fiscal year 2005, reflecting greater
    business activity in both our Global E&C Group and our
    Global Power Group.
    Our consolidated new orders, measured in terms of future
    revenues, increased 17.5% to $4,892,200, as compared to fiscal
    year 2005.
    Our consolidated backlog of unfilled orders, measured in future
    revenues, as of December 29, 2006 increased 47.1% to
    $5,431,400, as compared to December 30, 2005.
    Our consolidated backlog, measured in terms of Foster Wheeler
    scope (as defined below), as of December 29, 2006 increased
    17.1% to $2,528,200, as compared to December 30, 2005.
    We settled with four insurers to resolve disputed
    asbestos-related coverage and we were successful on our appeal
    of a New York state trial court decision that previously had
    held that New York, rather than New Jersey, law applies in the
    coverage litigation with our subsidiaries insurers. As a
    result of these settlements, together with the impact of the
    revaluation of our asbestos liability estimate, we recorded net
    gains on asbestos of $100,100. Please refer to Note 20 to
    the consolidated financial statements in this annual report on
    Form 10-K
    for further information.
    We generated net cash from operations of $263,700 and ended the
    year with record total cash, restricted cash and short-term
    investments of $630,000.
    We executed a new $350,000, five-year domestic senior credit
    agreement, which increases our bonding capacity, provides up to
    $100,000 in revolving borrowings and, at current usage rates,
    saves approximately $8,000 in annual bonding costs. Please refer
    to Note 7 to the consolidated financial statements in this
    annual report on Form
    10-K for
    further information. 23




---



##### Table of Contents




    We substantially completed our debt reduction program. In
    January 2006, we completed two warrant offer transactions, which
    raised $75,300 in net proceeds. In April 2006, we consummated
    the exchange of 1,277,900 of our common shares for $50,000 of
    the then-outstanding aggregate principal amount of our 2011
    senior notes and used the cash generated from the warrant offers
    to (1) redeem the remaining $61,500 of outstanding
    aggregate principal amount of our 2011 senior notes and the
    remaining $6,000 of our outstanding trust preferred securities,
    (2) execute an open market purchase of $1,000 principal
    amount of our outstanding convertible notes, (3) pay
    accrued unpaid interest on our 2011 senior notes and our trust
    preferred securities, and (4) pay related transaction fees
    and expenses. These debt reduction initiatives reduced the
    carrying amount of outstanding debt by $122,100. Please refer to
    Note 7 to the consolidated financial statements in this
    annual report on
    Form 10-K
    for further information.  Challenges
    and Drivers
      Liquidity
  Form 10-K
  Results
    of Operations:
  Consolidated
    Operating Revenues:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
3,495,048


$
2,199,955


$
2,661,324$ Change


1,295,093



(461,369
)% Change


58.9
%


(17.3
)%    24




---



##### Table of Contents



Form 10-K mark-up.
    Consolidated
    Contract Profit:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
507,787


$
346,342


$
260,662$ Change


161,445



85,680% Change


46.6
%


32.9
%       Consolidated
    Selling, General, and Administrative (SG&A)
    Expenses:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
225,330


$
216,691


$
213,919$ Change


8,639



2,772% Change


4.0
%


1.3
%    25




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##### Table of Contents



equity-for-debt
  Consolidated
    Other Income:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
63,729


$
63,723


$
88,383$ Change


6



(24,660
)% Change


0.0
%


(27.9
)%   Form 10-K), waste-to-energy
  Form 10-K), waste-to-energy
  Form 10-K), waste-to-energy waste-to-energy
 26




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##### Table of Contents



Consolidated
    Other Deductions:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
45,453


$
36,529


$
32,096$ Change


8,924



4,433% Change


24.4
%


13.8
%         Consolidated
    Interest Expense:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
24,944


$
50,618


$
94,622$ Change


(25,674
)


(44,004
)% Change


(50.7
)%


(46.5
)%     equity-for-debt
  Form 10-K
  Consolidated
    Minority Interest:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
4,789


$
4,382


$
4,900$ Change


407



(518
)% Change


9.3
%


(10.6
)%    27




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##### Table of Contents



Consolidated
    Net Asbestos-Related Gains/(Provision):
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
100,131


$
(113,680
)

$
(60,626
)$ Change


213,811



(53,054
)% Change


N/M



87.5
%     15-year
    Form 10-K
  Prior
    Domestic Senior Credit Agreement Fees and
    Expenses:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
14,955


$



$
$ Change


14,955



% Change


N/M



N/M       Form 10-K
  Consolidated
    Loss on Debt Reduction Initiatives:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
12,483


$
58,346


$
175,054$ Change


(45,863
)


(116,708
)% Change


(78.6
)%


(66.7
)%  28




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##### Table of Contents



equity-for-debt
  Form 10-K
  Consolidated
    Tax Provision:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
81,709


$
39,568


$
53,122$ Change


42,141



(13,554
)% Change


106.5
%


(25.5
)%   and/or non-U.S. jurisdictions.
  non-U.S. jurisdictions) non-U.S. earnings non-U.S. jurisdictions non-U.S.)
 29




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##### Table of Contents



Consolidated
    EBITDA:
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Amount

$
399,514


$
8,652


$
(104,795
)$ Change


390,862



113,447% Change


4517.6
%


N/M     equity-for-debt
    
    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;
    It does not include depreciation. Because we must utilize
    substantial property, plant and equipment in order to generate
    revenues in our operations, depreciation is a necessary and
    ongoing part of our costs. Therefore, any measure that excludes
    depreciation has material limitations. 30




---



##### Table of Contents



Global


Global


C&FTotal


E&C Group


Power Group


Group(1)For the Year Ended
    December 29, 2006EBITDA

$
399,514


$
323,297
(2)

$
95,039
(2)

$
(18,822
)(2)Less: Interest expense


(24,944
)Less: Depreciation and amortization


(30,877
)Income before income taxes


343,693Provision for income taxes


(81,709
)Net income

$
261,984For the Year Ended
    December 30, 2005EBITDA

$
8,652


$
165,629
(3)

$
107,266
(3)

$
(264,243
)(3)Less: Interest expense


(50,618
)Less: Depreciation and amortization


(28,215
)Loss before income taxes


(70,181
)Provision for income taxes


(39,568
)Net loss

$
(109,749
)For the Year Ended
    December 31, 2004EBITDA

$
(104,795
)

$
135,548
(4)

$
80,814
(4)

$
(321,157
)(4)Less: Interest expense


(94,622
)Less: Depreciation and amortization


(32,755
)Loss before income taxes


(232,172
)Provision for income taxes


(53,122
)Net loss

$
(285,294
)     (1)
    
    Includes general corporate income and expense, our captive
    insurance operation and eliminations.(2)
    
    Includes in fiscal year 2006: (decreased)/increased contract
    profit of $(5,700) from the regular re-evaluation of contract
    profit estimates: $14,700 in our Global E&C Group and
    $(20,400) in our Global Power Group; net asbestos-related gains
    of $100,100 recorded in our C&F Group; an aggregate charge
    of $(15,000) recorded in our C&F Group in conjunction with
    the voluntary termination of our prior domestic senior credit
    agreement; and a net charge of $(12,500) recorded in our C&F
    Group in conjunction with the debt reduction initiatives
    completed in April and May 2006.(3)
    
    Includes in fiscal year 2005: increased contract profit of
    $99,600 from the regular re-evaluation of contract profit
    estimates: $66,300 in our Global E&C Group and $33,300 in
    our Global Power Group; a charge of $(113,700) in our C&F
    Group on the revaluation of our estimated asbestos liability and
    asbestos insurance receivable; credit agreement costs in our
    C&F Group associated with our prior senior credit facility
    of $(3,500); and an aggregate charge of $(58,300) in our C&F
    Group recorded in conjunction with the exchange offers for our
    trust preferred securities and our 2011 senior notes.(4)
    
    Includes in fiscal year 2004: increased/(decreased) contract
    profit of $37,600 from the regular re-evaluation of contract
    profit estimates: $83,200 in our Global E&C Group and
    $(45,600) in our Global Power Group; a gain of $19,200 in our
    Global E&C Group on the sales of minority equity interests
    in special-purpose companies established to develop power plant
    projects in Europe; a loss of $(3,300) in our Global E&C
    Group on the sale of 10% of our equity interest in a
    waste-to-energy
    project in Italy; a charge of 31




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##### Table of Contents



$(75,800) in our C&F Group on the revaluation of asbestos
    insurance assets as a result of an adverse court decision in
    asbestos coverage allocation litigation; a net gain of $15,200
    in our C&F Group on the settlement of coverage litigation
    with certain asbestos insurance carriers; restructuring and
    credit agreement costs of $(17,200) in our C&F Group; a net
    charge of $(175,100) in our C&F Group recorded in
    conjunction with the 2004
    equity-for-debt
    exchange; and charges for severance cost of $(5,700): $(2,900)
    in our Global E&C Group, $(1,900) in our Global Power Group
    and $(900) in our C&F Group.  Reportable
    Segments
    Global
    E&C Group
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Operating revenues

$
2,219,104


$
1,471,948


$
1,672,082$ Change


747,156



(200,134
)% Change


50.8
%


(12.0
)%EBITDA

$
323,297


$
165,629


$
135,548$ Change


157,668



30,081% Change


95.2
%


22.2
%   Results
          Overview
    of Segment
     32




---



##### Table of Contents



bottom-of-the-barrel
         33




---



##### Table of Contents



Global
    Power Group
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Operating revenues

$
1,275,944


$
728,024


$
988,630$ Change


547,920



(260,606
)% Change


75.3
%


(26.4
)%EBITDA

$
95,039


$
107,266


$
80,814$ Change


(12,227
)


26,452% Change


(11.4
)%


32.7
%   Results
      Form 10-K.
       34




---



##### Table of Contents



Overview
    of Segment
       35




---



##### Table of Contents



Liquidity
    and Capital Resources
  Fiscal
    Year 2006 Activities
  Form 10-K
  equity-for-debt
     36




---



##### Table of Contents



Form 10-K
  and/or
    equity-for-debt
  Form 10-K Form 10-K
  Outlook
  non-U.S. subsidiaries,
 37




---



##### Table of Contents



and/or
    non-U.S. subsidiaries non-U.S. subsidiaries and/or non-U.S. subsidiaries
  non-U.S. subsidiaries non-U.S. subsidiaries non-U.S. subsidiaries.
        Form 10-K
   38




---



##### Table of Contents



Capital
    Structure
    Common ShareUnits


EquivalentsCommon shares outstanding


69,894,538



69,894,538Convertible preferred shares
    outstanding


3,478



226,565Stock options outstanding


1,769,175



1,769,175Class A common share purchase
    warrants outstanding


208,618



351,334Class B common share purchase
    warrants outstanding


14,405,199



1,041,496Restricted stock units outstanding


94,291



94,291Common shares and common share
    equivalents outstanding






73,377,399Common shares available for
    issuance






74,624,515Authorized common shares






148,001,914     Off-Balance
    Sheet Arrangements
  Form 10-K
  Contractual
    Obligations
    Total


2007


2008


2009


2010


2011


ThereafterLong-term debt:Principal

$
136,100


$
19,900


$
22,300


$
18,400


$
28,400


$
5,600


$
41,500Interest


58,600



10,300



8,800



7,300



5,800



3,400



23,000Non-cancelable operating lease
    commitments


385,400



43,700



31,800



26,600



24,800



24,400



234,100Purchase commitments


1,655,400



1,592,500



60,800



1,900



200







Capital lease obligations:Principal


66,900



1,500



800



1,400



1,500



2,000



59,700Interest


82,100



7,000



7,100



6,800



6,700



6,500



48,000Pension funding
    requirements 
    U.S.(1)


60,400



20,400



13,300



10,200



8,900



7,600



Pension funding
    requirements 
    foreign(1)


146,200



33,400



31,100



29,400



27,600



24,700



Total contractual cash obligations

$
2,591,100


$
1,728,700


$
176,000


$
102,000


$
103,900


$
74,200


$
406,300  39




---



##### Table of Contents



(1)
    
    Funding requirements are expected to extend beyond 2011;
    however, data for contribution requirements subsequent to 2011
    are not yet available. These projections assume we do not make
    any discretionary contributions.  Form 10-K
    Total


Less than 1 Year


2-3 Years


4-5 Years


Over 5 YearsBank issued letters of credit and
    guarantees

$
642,300


$
281,500


$
167,200


$
136,300


$
57,300Surety bonds


4,400



4,400











Total commitments

$
646,700


$
285,900


$
167,200


$
136,300


$
57,300   Form 10-K
  Backlog
    and New Orders
    mark-up
  40




---



##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalNEW ORDERS (FUTURE REVENUES)
    BY PROJECT LOCATION:For the 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


$
4,892,200For the Year Ended
    December 30, 2005:North America

$
67,300


$
540,600


$
607,900South America


119,100



14,700



133,800Europe


567,200



471,400



1,038,600Asia


679,500



46,300



725,800Middle East


534,800



5,600



540,400Australasia and other


1,113,000



3,500



1,116,500Total

$
3,080,900


$
1,082,100


$
4,163,000For the Year Ended
    December 31, 2004:North America

$
85,200


$
344,400


$
429,600South America


79,500



15,500



95,000Europe


946,200



144,100



1,090,300Asia


227,100



164,900



392,000Middle East


273,300



20,300



293,600Australasia and other


134,400



2,200



136,600Total

$
1,745,700


$
691,400


$
2,437,100   41




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalNEW ORDERS (FUTURE REVENUES)
    BY INDUSTRY:For the 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 and eliminations


24,200







24,200Total

$
3,695,300


$
1,196,900


$
4,892,200For the Year Ended
    December 30, 2005:Power generation

$
142,600


$
949,600


$
1,092,200Oil refining


1,068,300







1,068,300Pharmaceutical


74,600







74,600Oil and gas


1,368,700







1,368,700Chemical/petrochemical


371,100







371,100Power plant operation and
    maintenance






132,500



132,500Environmental


50,100







50,100Other and eliminations


5,500







5,500Total

$
3,080,900


$
1,082,100


$
4,163,000For the Year Ended
    December 31, 2004:Power generation

$
305,800


$
567,900


$
873,700Oil refining


608,700







608,700Pharmaceutical


258,500







258,500Oil and gas


148,100







148,100Chemical/petrochemical


255,900







255,900Power plant operation and
    maintenance






123,500



123,500Environmental


101,600







101,600Other and eliminations


67,100







67,100Total

$
1,745,700


$
691,400


$
2,437,100   42




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##### Table of Contents



Global


GlobalE&C Group


Power Group


TotalBACKLOG (FUTURE REVENUES) BY
    CONTRACT TYPE:As 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


$
5,431,400As of December 30,
    2005:Lump-sum turnkey

$
376,600


$
313,000


$
689,600Other fixed-price


238,800



610,200



849,000Reimbursable


2,163,100



55,500



2,218,600Eliminations


(47,800
)


(17,100
)


(64,900
)Total

$
2,730,700


$
961,600


$
3,692,300As of December 31,
    2004:Lump-sum turnkey

$
422,700


$
8,000


$
430,700Other fixed-price


157,500



641,400



798,900Reimbursable


838,600



69,700



908,300Eliminations


(15,300
)


(74,500
)


(89,800
)Total

$
1,403,500


$
644,600


$
2,048,100BACKLOG (FUTURE REVENUES) BY
    PROJECT LOCATION:As 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


$
5,431,400As of December 30,
    2005:North America

$
95,200


$
447,000


$
542,200South America


107,900



13,200



121,100Europe


436,200



393,900



830,100Asia


684,700



101,900



786,600Middle East


445,000



2,600



447,600Australasia and other


961,700



3,000



964,700Total

$
2,730,700


$
961,600


$
3,692,300As of December 31,
    2004:North America

$
83,700


$
303,400


$
387,100South America


24,600



11,100



35,700Europe


684,800



126,200



811,000Asia


200,500



191,500



392,000Middle East


233,800



10,600



244,400Australasia and other


176,100



1,800



177,900Total

$
1,403,500


$
644,600


$
2,048,100   43




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##### Table of Contents



Global E&C Group


Global Power Group


TotalBACKLOG (FUTURE REVENUES) BY
    INDUSTRY:As 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 and 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)


11,200







11,200As of December 30,
    2005:Power generation

$
154,600


$
833,600


$
988,200Oil refining


897,200







897,200Pharmaceutical


123,500







123,500Oil and gas


1,148,400







1,148,400Chemical/petrochemical


302,600







302,600Power plant operation and
    maintenance






128,000



128,000Environmental


88,000







88,000Other and eliminations


16,400







16,400Total

$
2,730,700


$
961,600


$
3,692,300Foster Wheeler scope in
    backlog

$
1,212,400


$
947,300


$
2,159,700E&C
    man-hours in
    backlog (in thousands)


9,300







9,300As of December 31,
    2004:Power generation

$
264,600


$
532,800


$
797,400Oil refining


464,500







464,500Pharmaceutical


200,800







200,800Oil and gas


87,800







87,800Chemical/petrochemical


187,700







187,700Power plant operation and
    maintenance






111,800



111,800Environmental


104,900







104,900Other and eliminations


93,200







93,200Total

$
1,403,500


$
644,600


$
2,048,100Foster Wheeler scope in
    backlog

$
948,400


$
629,800


$
1,578,200E&C
    man-hours in
    backlog (in thousands)


5,100







5,100    44




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##### Table of Contents



Inflation
    Application
    of Critical Accounting Estimates
      Revenue
    Recognition
  percentage-of-completion cost-to-cost
 45




---



##### Table of Contents



man-hours,
  percentage-of-completion
  81-1, and/or
  Asbestos
  out-of-court
 46




---



##### Table of Contents



United States
    15-year 15-year 15-year
  and/or
       47




---



##### 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

$
26,800Twenty-five percent change in
    average indemnity settlement amount


81,200Twenty-five percent change in
    forecasted number of new claims


65,600       United Kingdom
   48




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##### Table of Contents



Defined
    Benefit Pension and Other Postretirement Benefit Plans
    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; and
    The annual inflation rate.   49




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##### Table of Contents



For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004United


United





United


United





United


UnitedStates


Kingdom


Other


States


Kingdom


Other


States


Kingdom


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


5.45
%


4.86
%


4.60
%


5.48
%


5.44
%


5.03
%


6.00
%


5.45
%


5.42
%Long-term rate of return


8.00
%


6.84
%


7.50
%


8.00
%


7.32
%


7.50
%


8.00
%


7.34
%


8.00
%Salary growth


0.00
%


3.84
%


3.21
%


0.00
%


3.33
%


2.95
%


0.00
%


3.04
%


3.71
%Weighted-average
    assumptions  
    projected benefit obligations:Discount rate


5.80
%


5.13
%


4.69
%


5.45
%


4.83
%


4.65
%Salary growth


0.00
%


3.82
%


3.39
%


0.00
%


3.32
%


3.47
%         Approximate Increase (Decrease)Impact on


Impact on 2007Liabilities


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

$
(3,696
)

$
(21
)One-tenth of a percentage point
    decrease in the discount rate


3,738



15One-tenth of a percentage point
    increase in the expected return on plan assets






(279
)One-tenth of a percentage point
    decrease in the expected return on plan assets






279U.K. Pension
    Plan:One-tenth of a percentage point
    increase in the discount rate

$
(13,712
)

$
(1,443
)One-tenth of a percentage point
    decrease in the discount rate


14,104



1,362One-tenth of a percentage point
    increase in the expected return on plan assets






(626
)One-tenth of a percentage point
    decrease in the expected return on plan assets






628    50




---



##### Table of Contents



For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Weighted-average
    assumptions  
    net periodic postretirement benefit cost:Discount rate


5.39
%


5.35
%


6.00
%Weighted-average
    assumptions  
    accumulated postretirement benefit obligation:Discount rate


5.73
%


5.39
%       Share-Based
    Compensation Plans
   51




---



##### Table of Contents




    Expected volatility  we estimate the volatility of
    our common shares at the date of grant using historical
    volatility adjusted for periods of unusual stock price activity.
    Expected term  we estimate the expected term of
    options granted to our chief executive officer based on a
    combination of vesting schedules, life of the option, past
    history and estimates of future exercise behavior patterns. For
    other employees, we estimate the expected term using the
    simplified method, as outlined in Staff Accounting
    Bulletin No. 107, Topic 14: 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 life 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 dividend since July 2001.
    Forfeitures  we estimate forfeitures at the time of
    grant and revise those estimates in subsequent periods if actual
    forfeitures differ from those estimates. We use a combination of
    historical data and demographic characteristics to estimate
    pre-vesting option forfeitures and record share-based
    compensation expense only for those awards that are expected to
    vest. For purposes of calculating pro forma information under
    SFAS No. 123 for periods prior to December 31,
    2005, we accounted for forfeitures as they occurred. The
    cumulative effect adjustment related to forfeitures upon
    adoption of SFAS No. 123R was immaterial.   52




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##### Table of Contents



Goodwill
    and Intangible Assets
    Income
    Taxes
      Accounting
    Developments
   53




---



##### Table of Contents



Safe
    Harbor Statement
  Form 10-K
  
    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 environment;
    changes in project design or schedules;
    contract cancellations;
    changes in our estimates of costs to complete projects; 54




---



##### Table of Contents




    changes in trade, monetary and fiscal policies worldwide;
    currency fluctuations;
    war and/or
    terrorist attacks on facilities either owned or where equipment
    or services are or may be provided;
    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 foreign and domestic 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.    Form 10-Q, Form 10-K Form 8-K
 55




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##### Table of Contents



ITEM 7A. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

(amounts in thousands of dollars)    Interest Rate Risk
  Foreign Currency Risk non-U.S. affiliates
    Foreign Currency


Notional Amount of


Notional Amount ofCurrency Hedged

Functional


Exposure (in equivalent


Forward Buy


Forward Sell(bought or sold forward)

Currency


U.S. dollars)


Contracts


ContractsEuro and legacy countries


British pound sterling


$
15,494


$
3,829


$
11,665Chilean peso



2,275







2,275Polish zloty


Euro



76,158



76,158



U.S. dollar



1,300



1,300



U.S. dollar


Euro



21,248



7,216



14,032British pound sterling



106,420







106,420Polish zloty



500



500



Singapore dollar



5,548



5,548



Total


$
228,943


$
94,551


$
134,392   Form 10-K
 56




---



##### 



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


58Consolidated
    Statement of Operations and Comprehensive Income/(Loss) for each
    of the three years in the period ended December 29,
    2006


60Consolidated
    Balance Sheet as of December 29, 2006 and December 30,
    2005


61Consolidated
    Statement of Changes in Shareholders Equity/(Deficit) for
    each of the three years in the period ended December 29,
    2006


62Consolidated
    Statement of Cash Flows for each of the three years in the
    period ended December 29, 2006


63Notes to
    Consolidated Financial Statements


65Financial Statement Schedule


121EX-10.20: FOSTER WHEELER ANNUAL EXECUTIVE SHORT-TERM INCENTIVE PLANEX-12.1: STATEMENT OF COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGESEX-21.0: SUBSIDIARIES OF THE REGISTRANTEX-23.0: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   57




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm      Consolidated
    financial statements and financial statement
    schedule
      Internal
    control over financial reporting
  Form 10-K,
   58




---



##### Table of Contents



59




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF OPERATIONS AND
 COMPREHENSIVE INCOME/(LOSS)
 (in thousands of dollars, except per share amounts)
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Operating revenues

$
3,495,048


$
2,199,955


$
2,661,324Cost of operating revenues


(2,987,261
)


(1,853,613
)


(2,400,662
)Contract profit


507,787



346,342



260,662Selling, general and
    administrative expenses


(225,330
)


(216,691
)


(213,919
)Other income (including interest:2006  $15,119;
    2005  $8,876; 2004  $8,832)


63,729



63,723



88,383Other deductions


(45,453
)


(36,529
)


(32,096
)Interest expense


(24,944
)


(50,618
)


(94,622
)Minority interest


(4,789
)


(4,382
)


(4,900
)Net asbestos-related
    gains/(provision)


100,131



(113,680
)


(60,626
)Prior domestic senior credit
    agreement fees and expenses


(14,955
)






Loss on debt reduction initiatives


(12,483
)


(58,346
)


(175,054
)Income/(loss) before income taxes


343,693



(70,181
)


(232,172
)Provision for income taxes


(81,709
)


(39,568
)


(53,122
)Net income/(loss)


261,984



(109,749
)


(285,294
)Other comprehensive income/(loss):Foreign currency translation
    adjustment


31,612



(22,928
)


27,155Minimum pension liability
    adjustment (net of tax (provision)/ benefit: 2006 
    $(4,674); 2005  $(8,456); 2004  $986)


40,087



4,875



(19,899
)Net gain on derivative instruments
    designated as cash flow hedges (net of tax provision:
    2006  $203)


342







Net comprehensive income/(loss)

$
334,025


$
(127,802
)

$
(278,038
)Earnings/(loss) per common share:Basic

$
3.65


$
(2.36
)

$
(57.84
)Diluted

$
3.43


$
(2.36
)

$
(57.84
)    60




---



##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEET
 (in thousands of dollars, except share data and per share
    amounts)
  December 29,


December 30,2006


2005ASSETSCurrent Assets:Cash and cash equivalents

$
610,887


$
350,669Accounts and notes receivable, net:Trade


483,819



263,782Other


83,497



56,818Contracts in process


159,121



139,328Prepaid, deferred and refundable
    income taxes


20,708



20,999Other current assets


31,288



19,927Total current assets


1,389,320



851,523Land, buildings and equipment, net


302,488



258,672Restricted cash


19,080



21,994Notes and accounts
    receivable  long-term


5,395



5,076Investments and advances


167,186



168,193Goodwill, net


51,573



50,982Other intangible assets, net


62,004



64,066Asbestos-related insurance recovery
    receivable


350,322



321,008Other assets


91,081



98,621Deferred income taxes


127,574



54,571TOTAL ASSETS

$
2,566,023


$
1,894,706LIABILITIES, TEMPORARY EQUITY
    AND SHAREHOLDERS EQUITY/(DEFICIT)Current Liabilities:Current installments on long-term
    debt

$
21,477


$
21,459Accounts payable


263,715



233,815Accrued expenses


288,658



300,457Billings in excess of costs and
    estimated earnings on uncompleted contracts


622,422



410,676Income taxes


51,331



31,157Total current liabilities


1,247,603



997,564Long-term debt


181,492



293,953Deferred income taxes


66,522



37,406Pension, postretirement and other
    employee benefits


385,976



269,147Asbestos-related liability


424,628



466,163Other long-term liabilities


166,169



141,107Deferred accrued interest on
    subordinated deferrable interest debentures






2,697Minority interest


29,923



27,827Commitments and contingenciesTOTAL LIABILITIES


2,502,313



2,235,864Temporary Equity:Non-vested restricted share awards
    subject to redemption


983



TOTAL TEMPORARY EQUITY


983



Shareholders
    Equity/(Deficit):Preferred shares:$0.01 par value; authorized:
    2006  903,714 shares and 2005 
    904,251 shares; issued: 2006  3,658 shares
    and 2005  4,195 shares






Common shares:$0.01 par value; authorized:
    2006  148,001,734 shares and 2005 
    74,391,197 shares; issued: 2006 
    69,091,474 shares and 2005 
    57,462,262 shares


690



575Paid-in capital


1,349,492



1,187,518Accumulated deficit


(944,113
)


(1,206,097
)Accumulated other comprehensive loss


(343,342
)


(314,796
)Unearned compensation






(8,358
)TOTAL SHAREHOLDERS
    EQUITY/(DEFICIT)


62,727



(341,158
)TOTAL LIABILITIES, TEMPORARY
    EQUITY AND SHAREHOLDERS EQUITY/(DEFICIT)

$
2,566,023


$
1,894,706    61




---



##### Table of Contents



FOSTER WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS
    EQUITY/(DEFICIT)
 (in thousands of dollars, except share data)
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Shares


Amount


Shares


Amount


Shares


AmountPreferred Shares:Balance at beginning of year


4,195


$




75,484


$
1






$
Preferred shares issued pursuant to
    equity-for-debt
    exchange


















599,944



6Preferred shares converted into
    common shares


(537
)






(71,289
)


(1
)


(524,460
)


(5
)Balance at end of year


3,658


$




4,195


$




75,484


$
1Common Shares:Balance at beginning of year


57,462,262


$
575



40,542,898


$
405



2,038,578


$
20Issuance of common shares upon
    exercise of common share purchase warrants


8,444,278



84



474,608



5







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


1,277,900



13



11,661,445



117



3,062,574



31Issuance of common shares upon
    exercise of stock options


1,523,215



15



127,945



1







Issuance of common shares upon
    award of restricted shares


124,470



1



17,417



1



1,351,846



13Cancellation of common shares upon
    forfeiture of restricted award


(2,476
)


















Issuance of common shares upon
    vesting of restricted share units


226,337



2















Issuance of common shares upon
    conversion of preferred shares


35,488







4,637,949



46



34,089,900



341Balance at end of year


69,091,474


$
690



57,462,262


$
575



40,542,898


$
405Paid-in Capital:Balance at beginning of year





$
1,187,518






$
883,167






$
242,593Issuance of common shares upon
    exercise of common share purchase warrants






75,599







4,446







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






58,750







296,876







623,153Issuance of common shares upon
    exercise of stock options






17,580







1,199







Share-based compensation
    expense-stock options






7,258















Excess tax benefit related to
    equity-based incentive program






2,915







645







Reclassification of unearned
    compensation balance upon adoption of SFAS No. 123R






(8,358
)














Share-based compensation
    expense-restricted share awards






9,216















Issuance of restricted share awards






(1
)






1,230







17,757Issuance of common shares upon
    vesting of restricted share units






(2
)














Non-vested restricted share awards
    subject to redemption






(983
)














Issuance of common shares upon
    conversion of preferred shares














(45
)






(336
)Balance at end of year





$
1,349,492






$
1,187,518






$
883,167Accumulated Deficit:Balance at beginning of year





$
(1,206,097
)





$
(1,096,348
)





$
(811,054
)Net income/(loss) for the year






261,984







(109,749
)






(285,294
)Balance at end of year





$
(944,113
)





$
(1,206,097
)





$
(1,096,348
)Accumulated Other Comprehensive
    Loss:Balance at beginning of year





$
(314,796
)





$
(296,743
)





$
(303,999
)Change in accumulated translation
    adjustment during the year






31,612







(22,928
)






27,155Minimum pension liability
    adjustment (net of tax (provision)/ benefit: 2006 
    $(4,674); 2005  $(8,456); 2004  $986)






40,087







4,875







(19,899
)Adjustment resulting from the
    adoption of SFAS No. 158 (net of tax benefit:
    2006  $54,364)






(100,587
)














Net gain on derivative instruments
    designated as cash flow hedges (net of tax provision:
    2006  $203)






342















Balance at end of year





$
(343,342
)





$
(314,796
)





$
(296,743
)Unearned Compensation:Balance at beginning of year





$
(8,358
)





$
(16,047
)





$
Issuance of restricted share awards














(1,230
)






(17,771
)Share-based compensation
    expense-restricted share awards














8,919







1,724Reclassification of unearned
    compensation balance upon adoption of SFAS No. 123R






8,358















Balance at end of year





$







$
(8,358
)





$
(16,047
)Total Shareholders
    Equity/(Deficit)





$
62,727






$
(341,158
)





$
(525,565
)    62




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##### Table of Contents



FOSTER
    WHEELER LTD. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF CASH FLOWS
 (in thousands of dollars, except share data)
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004CASH FLOWS FROM OPERATING
    ACTIVITIESNet income/(loss)

$
261,984


$
(109,749
)

$
(285,294
)Adjustments to reconcile net
    income/(loss) tocash flows from operating
    activities:Depreciation and amortization


30,877



28,215



32,755Net asbestos-related
    (gains)/provision


(66,603
)


113,680



60,600Loss on debt reduction initiatives


5,206



51,491



163,857Prior domestic senior credit
    agreement fees and expenses


9,488







Share-based compensation


16,474



8,919



1,724Excess tax benefit related to
    equity-based incentive program


(2,796
)






Deferred tax


14,302



10,527



32,351Interest expense on subordinated
    deferrable interest debentures






5,288



16,567Gain on sale of assets


(1,464
)


(1,582
)


(15,834
)Earnings on equity interests, net
    of dividends


(7,837
)


(9,303
)


(16,389
)Other noncash items


(4,555
)


8,021



7,235Changes in assets and liabilities:(Increase)/decrease in receivables


(225,158
)


(7,563
)


89,890(Increase)/decrease in contracts
    in process


(8,061
)


95,924



23,215Increase/(decrease) in accounts
    payable and accrued expenses


39,908



(28,904
)


(93,117
)Increase/(decrease) in billings in
    excess of costs and estimated earnings on uncompleted contracts


185,411



(111,054
)


(74,847
)Increase/(decrease) in income taxes


27,614



(14,756
)


(2,215
)Net change in other assets and
    liabilities


(11,129
)


11,659



28,639Net cash provided by/(used in)
    operating activities


263,661



50,813



(30,863
)CASH FLOWS FROM INVESTING
    ACTIVITIESAcquisition of business, net of
    cash acquired


457







Change in restricted cash


8,940



46,186



(17,941
)Capital expenditures


(30,293
)


(10,809
)


(9,613
)Proceeds from sale of assets


1,914



4,853



17,495Increase in investments and
    advances


(6,573
)


(1,067
)


(14
)Decrease/(increase) in short-term
    investments






24,424



(9,426
)Net cash (used in)/provided by
    investing activities


(25,555
)


63,587



(19,499
)  63




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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)
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004CASH FLOWS FROM FINANCING
    ACTIVITIESPartnership distributions to
    minority partners


(1,950
)


(2,233
)


(2,663
)Proceeds from common share
    purchase warrant exercises


75,683



4,451



Proceeds from stock option
    exercises


17,595



1,200



Excess tax benefit related to
    equity-based incentive program


2,796







Payment of deferred financing costs


(5,710
)


(13,724
)


Decrease in short-term debt










(121
)Proceeds from issuance of
    long-term debt


2,138



371



120,000Repayment of long-term debt and
    capital lease obligations


(90,082
)


(31,516
)


(147,722
)Net cash provided by/(used in)
    financing activities


470



(41,451
)


(30,506
)Effect of exchange rate changes on
    cash and cash equivalents


21,642



(13,847
)


8,340INCREASE/(DECREASE) IN CASH AND
    CASH EQUIVALENTS


260,218



59,102



(72,528
)Cash and cash equivalents at
    beginning of year


350,669



291,567



364,095CASH AND CASH EQUIVALENTS AT
    END OF YEAR

$
610,887


$
350,669


$
291,567Cash paid during the year for:Interest (net of amount
    capitalized)

$
25,102


$
47,295


$
53,952Income taxes

$
38,611


$
22,361


$
23,446   NON-CASH
    FINANCING ACTIVITIES
  equity-for-debt
    equity-for-debt
  equity-for-debt
    equity-for-debt
   64




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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  Principles of Consolidation
  53-week
  Revisions
  For the Year EndedDecember 30, 2005,


December 30, 2005,


December 31, 2004,


December 31, 2004,As Previously Reported


As Revised


As Previously Reported


As RevisedCost of operating revenues

$
(1,837,927
)

$
(1,853,613
)

$
(2,385,619
)

$
(2,400,662
)Contract profit


362,028



346,342



275,705



260,662Selling, general and
    administrative expenses


(232,377
)


(216,691
)


(228,962
)


(213,919
)Net loss


(109,749
)


(109,749
)


(285,294
)


(285,294
)   Reclassifications
  Use of Estimates
  Revenue Recognition on Long-Term Contracts percentage-of-completion cost-to-cost
       65




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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)  81-1, and/or
  SOP 81-1.
       66




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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
  Trade Accounts Receivable
    Contracts in Process and Billings in Excess of Costs and
    Estimated Earnings on Uncompleted Contracts
  Inventories
  Land, Buildings and Equipment
  Restricted Cash
  December 29, 2006


December 30, 2005Foreign


Domestic


Total


Foreign


Domestic


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

$
5,236


$
252


$
5,488


$
223


$
271


$
494Collateralized letters of credit
    and bank guarantees


5,345







5,345



15,571







15,571Client escrow funds


7,622



625



8,247



5,204



725



5,929Total

$
18,203


$
877


$
19,080


$
20,998


$
996


$
21,994   Investments and Advances
 67




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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)    Intangible Assets
        December 29, 2006


December 30, 2005Gross





GrossCarrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationPatents

$
37,185


$
(19,206
)

$
36,594


$
(17,412
)Trademarks


62,699



(18,674
)


61,771



(16,887
)Total

$
99,884


$
(37,880
)

$
98,365


$
(34,299
)     Income Taxes
 68




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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)     Foreign Currency
  For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Foreign currency transaction losses

$
(1,719
)

$
(2,705
)

$
(83
)Foreign currency transaction
    losses, net of tax

$
(1,117
)

$
(1,758
)

$
(54
)   Interest Rate Risk
  Restrictions on Shareholders Dividends
  Earnings per Common Share sub-set
   69




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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)       70




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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)     For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Net income/(loss)

$
261,984


$
(109,749
)

$
(285,294
)Fair value of additional shares
    issued as part of warrant offers


(19,445
)






Net income/(loss) attributable to
    common shareholders

$
242,539


$
(109,749
)

$
(285,294
)Basic earnings/(loss) per
    common share:Net income/(loss) attributable to
    common shareholders

$
242,539


$
(109,749
)

$
(285,294
)Weighted-average number of common
    shares outstanding for basic earnings/(loss) per common share


66,498,192



46,570,088



4,932,370Basic earnings/(loss) per common
    share

$
3.65


$
(2.36
)

$
(57.84
)Diluted earnings/(loss) per
    common share:Net income/(loss) attributable to
    common shareholders

$
242,539


$
(109,749
)

$
(285,294
)Weighted-average number of common
    shares outstanding for basic earnings/(loss) per common share


66,498,192



46,570,088



4,932,370Effect of dilutive securities:Options to purchase common shares


1,498,548







Warrants to purchase common shares


1,721,688







Non-vested portion of restricted
    common shares and restricted common share units


890,560







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


70,608,988



46,570,088



4,932,370Diluted earnings/(loss) per common
    share

$
3.43


$
(2.36
)

$
(57.84
)  71




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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)    For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Common shares issuable under
    outstanding options not included in the computation of diluted
    earnings/(loss) per common share because the options
    exercise price was greater than the assumed proceeds


686,291



583,385



405,056Common shares issuable under
    outstanding options not included in the computation of diluted
    earnings/(loss) per common share because of their antidilutive
    effect






2,700,625



2,828,570Warrants to purchase common shares
    not included in the computation of diluted earnings/(loss) per
    common share due to their antidilutive effect






9,468,100



9,941,292Non-vested portion of restricted
    common shares and restricted common share units not included in
    the computation of diluted earnings/(loss) per common share due
    to their antidilutive effect






1,689,729



1,901,784   Share-Based Compensation Plans
   72




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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)    For the Year EndedDecember 30,


December 31,2005


2004Net loss attributable to common
    shareholders  as reported

$
(109,749
)

$
(285,294
)Add: Total share-based employee
    compensation expense determined under intrinsic value based
    method for awards and included within reported net loss, net of
    $0 taxes


150



12Deduct: Total share-based employee
    compensation expense determined under fair value based method
    for awards, net of taxes of $186 in 2005 and $39 in 2004


(6,740
)


(2,711
)Net loss attributable to common
    shareholders  pro forma

$
(116,339
)

$
(287,993
)Loss per common share 
    basic and diluted:As reported

$
(2.36
)

$
(57.84
)Pro forma

$
(2.50
)

$
(58.39
)     
    Expected volatility  we estimate the volatility of
    our common shares at the date of grant using historical
    volatility adjusted for periods of unusual stock price activity.
    Expected term  we estimate the expected term of
    options granted to our chief executive officer based on a
    combination of vesting schedules, life of the option, past
    history and estimates of future exercise behavior patterns. For
    other employees, we estimate the expected term using the
    simplified method, as outlined in Staff Accounting
    Bulletin No. 107, Topic 14: 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 life 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 dividend since July 2001.
    Forfeitures  we estimate forfeitures at the time of
    grant and revise those estimates in subsequent periods if actual
    forfeitures differ from those estimates. We use a combination of
    historical data and demographic characteristics to estimate
    pre-vesting option forfeitures and record share-based
    compensation expense only for those awards that are expected to
    vest. For purposes of calculating pro forma information under
    SFAS No. 123 for periods prior to December 31,
    2005, we accounted for forfeitures as they occurred. The
    cumulative effect adjustment related to forfeitures upon
    adoption of SFAS No. 123R was immaterial. 73




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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)     For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Expected volatility


44
%


50
%


50
%Expected term


4.1 years



3.1 years



3.0 yearsRisk-free interest rate


4.81
%


4.23
%


3.00
%Expected dividend yield


0
%


0
%


0
%     Recent Accounting Developments
       74




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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)
   2.
    Business
    Combination      April 7,2006Cash and cash equivalents

$
15,690Accounts receivable


13,978Other current assets


495Land, buildings and equipment


32,894Restricted cash


4,566Other assets


24Total assets acquired

$
67,647Current installments on long-term
    debt

$
4,129Accounts payable and accrued
    expenses


6,097Special-purpose limited recourse
    project debt


27,552Total liabilities assumed

$
37,778Net assets acquired

$
29,869    75




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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)
   3.
    Accounts
    and Notes Receivable    December 29,


December 30,2006


2005From long-term contracts:Amounts billed due within one year

$
467,268


$
262,735Billed retention:Estimated to be due in:2006






10,2572007


10,082



32008


1,962



2009


5,600



2010


3,481



10Total billed retention


21,125



10,270Total receivables from long-term
    contracts


488,393



273,005Other trade accounts and notes
    receivable


3,274



1,156Trade accounts and notes
    receivable, gross


491,667



274,161Less: allowance for doubtful
    accounts


(7,848
)


(10,379
)Trade accounts and notes
    receivable, net

$
483,819


$
263,782     December 29,


December 30,2006


2005Asbestos insurance receivable

$
49,191


$
25,200Foreign refundable value-added tax


13,804



16,334Other


20,502



15,284Other accounts and notes receivable

$
83,497


$
56,818    4.
    Land,
    Buildings and Equipment    December 29,


December 30,2006


2005Land and land improvements

$
23,394


$
23,869Buildings


142,931



130,052Furniture, fixtures and equipment


490,700



447,251Construction in progress


783



1,410Land, buildings and equipment


657,808



602,582Less: accumulated depreciation


(355,320
)


(343,910
)Net book value

$
302,488


$
258,672  76




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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  (Continued)      5.
    Equity
    Interests  waste-to-energy waste-to-energy
  December 29, 2006


December 30, 2005Italian


Chilean


Italian


ChileanProjects


Project


Projects


ProjectBalance Sheet Data:Current assets

$
199,606


$
27,013


$
153,576


$
25,853Other assets (primarily buildings
    and equipment)


536,543



156,236



358,038



165,991Current liabilities


42,134



18,226



44,299



21,047Other liabilities (primarily
    long-term debt)


470,618



88,836



255,757



101,617Net assets


223,397



76,187



211,558



69,180   For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004Italian


Chilean


Italian


Chilean


Italian


ChileanProjects


Project


Projects


Project


Projects


ProjectIncome Statement
    Data:Total revenues

$
304,786


$
43,462


$
293,588


$
39,659


$
244,225


$
41,137Gross earnings


72,070



21,198



65,419



19,725



60,108



20,152Income before income taxes


69,096



15,012



52,646



10,031



43,947



11,229Net earnings


41,365



16,025



46,070



7,782



26,664



8,787    77




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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)
   5.
    Equity
    Interests  (Continued)               6.
    Equity-for-Debt
    Exchanges     78




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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)
   6.
    Equity-for-Debt
    Exchanges  (Continued)      equity-for-debt
 79




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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    December 29, 2006


December 30, 2005Current


Long-term


Total


Current


Long-term


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

$
9,360


$
41,427


$
50,787


$
9,149


$
50,787


$
59,936FW Power


4,881



24,862



29,743











Foster Wheeler Coque Verde,
    L.P.


3,613



25,245



28,858



3,293



28,858



32,151Martinez Cogen Limited Partnership














7,980







7,980Capital Lease Obligations


1,537



65,319



66,856



1,021



63,219



64,240Subordinated Robbins Facility Exit
    Funding Obligations:1999C Bonds at 7.25% interest, due
    October 15, 2009


16



37



53



16



52



681999C Bonds at 7.25% interest, due
    October 15, 2024






20,491



20,491







20,491



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






267



267







250



250Intermediate Term Loans in China at
    6.03% interest






3,844



3,844







3,716



3,716Convertible Subordinated Notes at
    6.50% interest, due June 1, 2007


2,070







2,070







3,070



3,070Senior Notes at 10.359% interest,
    due September 15, 2011 (including unamortized premium of $0
    and $3,847, respectively)


















115,315



115,315Subordinated Deferrable Interest
    Debentures


















5,963



5,963Other


















2,232



2,232Total

$
21,477


$
181,492


$
202,969


$
21,459


$
293,953


$
315,412   Domestic Senior Credit Agreement and/or sub-limit
  and/or
 80




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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)        Prior Domestic enior Credit Agreement
    Special-Purpose Limited Recourse Project Debt waste-to-energy and/or
  waste-to-energy
  6-month 6-month
   81




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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)        Capital Leases
  December 29,


December 30,2006


2005Buildings and improvements

$
45,650


$
42,461Less: accumulated amortization


(9,272
)


(6,855
)Net assets under capital leases

$
36,378


$
35,606     Fiscal year:2007

$
8,4982008


7,9372009


8,2152010


8,2002011


8,424Thereafter


107,707Less: interest


(82,125
)Net minimum lease payments under
    capital leases


66,856Less: current portion of net
    minimum lease payments


(1,537
)Long-term portion of net minimum
    lease payments

$
65,319   Subordinated Robbins Facility Exit Funding Obligations
    (Robbins bonds) waste-to-energy
   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)
   7.
    Long-term
    Debt  (Continued)     Intermediate Term Loans in China at 6.03% interest
    (intermediate term loans)
  Convertible Subordinated Notes at 6.50% interest, due
    June 1, 2007 (convertible
    notes)
    Senior Notes at 10.359% interest, due September 15,
    2011, Series A (2011 senior
    notes)
      Subordinated Deferrable Interest Debentures
   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)
   7.
    Long-term
    Debt  (Continued)       Interest Costs
  Aggregate Maturities
  Fiscal Year2007


2008


2009


2010


2011


Thereafter


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

$
9,360


$
9,648


$
9,914


$
21,865


$



$



$
50,787FW Power


4,881



4,672



3,542



3,363



3,545



9,740



29,743Foster Wheeler Coque Verde,
    L.P.


3,613



4,143



4,675



3,188



2,019



11,220



28,858Subordinated Robbins Facility Exit
    Funding Obligations:1999C Bonds at 7.25% interest, due
    October 15, 2009


16



18



19















531999C Bonds at 7.25% interest, due
    October 15, 2024






















20,491



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










267















267Intermediate Term Loans in China at
    6.03% interest






3,844



















3,844Convertible Subordinated Notes at
    6.50% interest, due June 1, 2007


2,070























2,070Total

$
19,940


$
22,325


$
18,417


$
28,416


$
5,564


$
41,451


$
136,113    8.
    Pensions
    and Other Postretirement Benefits      Defined Benefit Pension Plans
 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)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)    Defined
    benefit pension obligation and funded status:
    For the Year Ended December 29, 2006


For the Year Ended December 30, 2005United


United








United


UnitedStates


Kingdom


Other


Total


States


Kingdom


Other


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

$
349,993


$
710,877


$
35,350


$
1,096,220


$
334,913


$
631,103


$
34,248


$
1,000,264Service cost






15,590



951



16,541







16,274



1,040



17,314Interest cost


18,578



36,079



1,684



56,341



18,579



31,953



1,856



52,388Plan participants
    contributions






7,518







7,518







7,684







7,684Plan amendments






33,600







33,600















Actuarial loss/(gain)


(9,697
)


504



(1,621
)


(10,814
)


18,274



121,487



1,282



141,043Benefits paid


(22,378
)


(26,805
)


(2,916
)


(52,099
)


(21,689
)


(24,820
)


(2,516
)


(49,025
)Special termination benefits/other






(2,147
)


(52
)


(2,199
)


(84
)


(195
)


(346
)


(625
)Foreign currency exchange rate
    changes






101,470



779



102,249







(72,609
)


(214
)


(72,823
)Projected benefit obligations at
    end of year


336,496



876,686



34,175



1,247,357



349,993



710,877



35,350



1,096,220Change in plan assets:Fair value of plan assets at
    beginning of year


246,490



544,761



20,921



812,172



223,498



494,802



19,288



737,588Actual return on plan assets


35,026



47,751



2,326



85,103



20,914



96,293



1,686



118,893Employer contributions


27,495



25,699



1,833



55,027



26,744



27,188



1,604



55,536Plan participants
    contributions






7,518







7,518







7,684







7,684Benefits paid


(22,378
)


(26,805
)


(2,916
)


(52,099
)


(21,689
)


(24,820
)


(2,516
)


(49,025
)Other


(2,776
)


(3,631
)






(6,407
)


(2,977
)


(189
)






(3,166
)Foreign currency exchange rate
    changes






77,838



(103
)


77,735







(56,197
)


859



(55,338
)Fair value of plan assets at end of
    year


283,857



673,131



22,061



979,049



246,490



544,761



20,921



812,172Funded status at end of year

$
(52,639
)

$
(203,555
)

$
(12,114
)

$
(268,308
)

$
(103,503
)

$
(166,116
)

$
(14,429
)

$
(284,048
)     December 29, 2006


December 30, 2005Current liabilities

$
764


$
53,826Non-current liabilities


267,544



125,710Net pension obligation

$
268,308


$
179,536    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)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)        Funded status as of
    December 30, 2005

$
(284,048
)Unrecognized net actuarial loss


415,542Unrecognized prior service cost


6,480Unrecognized net transition asset


(158
)Adjustment for the minimum
    liability


(299,541
)Foreign currency exchange rate
    changes


(17,811
)Net pension obligation recorded on
    consolidated balance sheet as of December 30, 2005

$
(179,536
)   Accumulated
    benefit obligation:
   86




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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:
    For the Year Ended


For the Year Ended


For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004United


United








United


United








United


UnitedStates


Kingdom


Other


Total


States


Kingdom


Other


Total


States


Kingdom


Other


TotalNet periodic benefit cost:Service cost

$



$
15,590


$
951


$
16,541


$



$
16,274


$
1,040


$
17,314


$



$
17,859


$
393


$
18,252Interest cost


18,578



36,079



1,684



56,341



18,579



31,953



1,856



52,388



17,867



30,365



1,359



49,591Expected return on plan assets


(19,829
)


(40,100
)


(1,563
)


(61,492
)


(18,028
)


(35,269
)


(1,412
)


(54,709
)


(15,603
)


(31,081
)


(1,315
)


(47,999
)Amortization of transition asset






(64
)


87



23







(69
)


82



13







(68
)


76



8Amortization of prior service cost






4,941



17



4,958







1,677



16



1,693







1,686



15



1,701Other


5,966



17,239



912



24,117



5,299



14,522



538



20,359



4,059



17,705



430



22,194SFAS No. 87 net
    periodic benefit cost


4,715



33,685



2,088



40,488



5,850



29,088



2,120



37,058



6,323



36,466



958



43,747SFAS No. 88 cost*






276



21



297



56







(346
)


(290
)


1,390











1,390Total net periodic benefit cost

$
4,715


$
33,961


$
2,109


$
40,785


$
5,906


$
29,088


$
1,774


$
36,768


$
7,713


$
36,466


$
958


$
45,137Weighted-average
    assumptions-
    net periodic benefit cost:Discount rate


5.45
%


4.86
%


4.60
%






5.48
%


5.44
%


5.03
%






6.00
%


5.45
%


5.42
%Long-term rate of return


8.00
%


6.84
%


7.50
%






8.00
%


7.32
%


7.50
%






8.00
%


7.34
%


8.00
%Salary growth


0.00
%


3.84
%


3.21
%






0.00
%


3.33
%


2.95
%






0.00
%


3.04
%


3.71
%Weighted-average assumptions-
    projected benefit obligations:Discount rate


5.80
%


5.13
%


4.69
%






5.45
%


4.83
%


4.65
%Salary growth


0.00
%


3.82
%


3.39
%






0.00
%


3.32
%


3.47
%     *
    
    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 $297 in 2006; the settlement of
    obligations to former employees in Finland and to former
    executives under the Supplemental Executive Retirement Plan
    (SERP) of $(290) in 2005; and the settlement of
    obligations to former executives under the SERP of $1,390 in
    2004.  Investment
    policy:
         87




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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:
    For the Year EndedDecember 29, 2006


December 30, 2005Asset allocation by
    plan:United States:U.S. equities


56
%


53
%Non-U.S. equities


15
%


28
%U.S. fixed-income securities


29
%


18
%Other


0
%


1
%Total


100
%


100
%United Kingdom:U.K. equities


37
%


37
%Non-U.K. equities


24
%


26
%U.K. fixed-income securities


36
%


37
%Other


3
%


0
%Total


100
%


100
%Canada:Canadian equities


19
%


22
%Non-Canadian equities


32
%


28
%Canadian fixed-income securities


43
%


43
%Other


6
%


7
%Total


100
%


100
%   Contributions:
   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)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)   Estimated
    future benefit payments:
    United States


United Kingdom


Other


Total2007

$
21,945


$
27,239


$
2,948


$
52,1322008


22,193



30,210



2,577



54,9802009


22,371



32,177



2,863



57,4112010


22,481



32,772



3,176



58,4292011


22,626



34,725



3,192



60,5432012-2016


117,088



203,063



13,877



334,028   Other Postretirement Benefit Plans
   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)
   8.
    Pensions
    and Other Postretirement
    Benefits  (Continued)   Other
    postretirement benefit obligation and funded status:
    For the Year EndedDecember 29, 2006


December 30, 2005Change in accumulated
    postretirement benefit obligation:Accumulated postretirement benefit
    obligation at beginning of year

$
101,215


$
106,450Service cost


157



205Interest cost


5,334



5,341Plan participants
    contributions


2,868



3,053Actuarial (gain)/loss


(1,943
)


(3,118
)Benefits paid


(11,755
)


(10,761
)Medicare Part D reimbursement


993



Other


(24
)


Foreign currency exchange rate
    changes


2



45Accumulated postretirement benefit
    obligation at end of year


96,847



101,215Change in plan assets:Fair value of plan assets at
    beginning of year






Plan participants
    contributions


2,868



3,053Employer contributions


7,894



7,708Medicare Part D reimbursement


993



Benefits paid


(11,755
)


(10,761
)Fair value of plan assets at end
    of year






Funded status at end of year

$
(96,847
)

$
(101,215
)     December 29, 2006


December 30, 2005Current liabilities

$
8,416


$
7,112Non-current liabilities


88,431



117,908Net postretirement benefit
    obligation

$
96,847


$
125,020    90




---



##### 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)     Funded status as of
    December 30, 2005

$
(101,215
)Unrecognized net actuarial loss


29,265Unrecognized prior service credit


(53,070
)Net postretirement benefit
    obligation recorded on consolidated balance sheet as of
    December 30, 2005

$
(125,020
)   Components
    of net periodic postretirement benefit cost:
    For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004Net periodic postretirement
    benefit cost:Service cost

$
157


$
205


$
323Interest cost


5,334



5,341



6,175Amortization of prior service cost


(4,761
)


(4,760
)


(4,745
)Other


2,049



1,972



1,999Net periodic postretirement
    benefit cost

$
2,779


$
2,758


$
3,752Weighted-average
    assumptions-
    
    net periodic postretirement benefit cost:Discount rate


5.39
%


5.35
%


6.00
%Weighted-average assumptions- 
    accumulated postretirement benefit obligation:Discount rate


5.73
%


5.39
%   Pre-Medicare


MedicareEligible


EligibleHealth-care cost trend:2006


8.50
%


10.00
%2007


8.00
%


9.50
%Decline to 2016


5.00
%


5.00
%     One-Percentage


One-PercentagePoint Increase


Point DecreaseEffect on total of service and
    interest cost components

$
253


$
(211
)Effect on accumulated
    postretirement benefit obligations

$
4,817


$
(4,046
)  91




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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)  Contributions:
    Estimated
    future other postretirement benefit payments:
    PostretirementPostretirement


Health


Benefits,Benefits


Care Subsidy


Net of Subsidy2007

$
10,210


$
1,579


$
8,6312008


10,361



1,730



8,6312009


10,436



1,869



8,5672010


10,433



2,000



8,4332011


10,375



2,138



8,2372012-2016


49,076



12,347



36,729   Impact of
    the Adoption of SFAS No. 158:
    Before Adoption of


SFAS No. 158


After Adoption ofSFAS No. 158


Adjustments


SFAS No. 158Deferred income taxes

$
73,210


$
54,364


$
127,574Total assets


2,511,659



54,364



2,566,023Accrued expenses


341,670



(53,012
)


288,658Pension, postretirement and other
    employee benefits


178,013



207,963



385,976Total liabilities


2,347,362



154,951



2,502,313Accumulated other comprehensive
    loss


(242,755
)


(100,587
)


(343,342
)Total shareholders
    equity/(deficit)


163,314



(100,587
)


62,727Total liabilities, temporary
    equity and shareholders equity/(deficit)


2,511,659



54,364



2,566,023   Defined Contribution Plans
   92




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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 Benefits
  9. Guarantees
    and Warranties
  and/or and/or
  Maximum


Carrying Amount of LiabilityPotential Payment


December 29, 2006


December 30, 2005Environmental indemnifications


No limit


$
7,300


$
8,100Tax indemnifications


No limit


$



$
     For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004Balance at beginning of year

$
63,200


$
94,500


$
131,600Accruals


27,600



24,800



25,800Settlements


(18,600
)


(12,600
)


(32,800
)Adjustments to provisions


(2,300
)


(43,500
)


(30,100
)Balance at end of year

$
69,900


$
63,200


$
94,500    10. Financial
    Instruments and Risk Management
    Cash, Restricted Cash and Short-term
    Investments
  Long-term Debt
  Foreign Currency Contracts
 93




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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)
   10.
    Financial
    Instruments and Risk
    Management  (Continued)   Interest Rate Swaps
  Carrying Amounts and Fair Values
  December 29, 2006


December 30, 2005Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueNon-derivatives:Cash and short-term investments

$
610,887


$
610,887


$
350,669


$
350,669Restricted cash


19,080



19,080



21,994



21,994Long-term debt


(202,969
)


(220,529
)


(315,412
)


(321,573
)Derivatives:Foreign currency contracts


4,095



4,095



(3,514
)


(3,514
)Interest rate swaps


545



545







         11. Preferred
    Shares
  equity-for-debt
   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)
   12. Share-Based
    Compensation Plans
        Stock
    Option Awards:
     95




---



##### 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)           For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004Weighted-





Weighted-





Weighted-Average





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOptions outstanding at beginning
    of year


3,284,010


$
29.00



3,221,126


$
31.86



405,733


$
203.40Options exercised


(1,523,215
)

$
11.55



(127,945
)

$
9.38






$
Options granted


495,746


$
46.33



228,508


$
24.95



2,828,570


$
9.38Options canceled or expired


(50,576
)

$
227.95



(37,679
)

$
315.25



(13,177
)

$
283.51Options outstanding at end of year


2,205,965


$
40.37



3,284,010


$
29.00



3,221,126


$
31.86Options available for grant at end
    of year


4,089,392







668,185







876,373Weighted-average grant date fair
    value of options granted during the year

$
18.56






$
9.39






$
3.43  96




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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-Number


Remaining


Average


AggregateRange of Exercise Prices


Outstanding


Contractual Life


Exercise Price


Intrinsic Value$
9.38


to

$
9.38



1,317,322



0.77 years


$
9.38


$
60,28323.20


to


33.00



199,959



2.60 years



26.43



5,74139.84


to


50.10



496,796



4.79 years



46.32



4,38199.70


to


127.50



97,510



4.50 years



105.17



163.13


to


232.00



25,500



3.26 years



188.43



270.00


to


301.25



30,203



2.14 years



282.57



550.00


to


745.00



38,675



0.56 years



641.64



$
9.38


to

$
745.00



2,205,965



2.05 years


$
40.37


$
70,405     Stock Options ExercisableWeighted-Average


Weighted-Number


Remaining


Average


AggregateRange of Exercise Prices


Exercisable


Contractual Life


Exercise Price


Intrinsic Value$
9.38


to

$
9.38



544,586



0.77 years


$
9.38


$
24,92123.20


to


33.00



52,515



5.28 years



31.03



1,26639.84


to


50.10



2,393



4.89 years



41.40



3399.70


to


127.50



97,510



4.50 years



105.17



163.13


to


232.00



19,200



3.29 years



184.63



270.00


to


301.25



30,203



2.14 years



282.57



550.00


to


745.00



38,675



0.56 years



641.64



$
9.38


to

$
745.00



785,082



1.65 years


$
62.26


$
26,220       Restricted
    Stock Awards:
   97




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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)      For the Year EndedDecember 29,  2006


December 30, 2005


December 31, 2004Weighted-





Weighted-





Weighted-Average





Average





AverageGrant





Grant





GrantShares


Price


Shares


Price


Shares


PriceNon-vested at beginning of year


1,111,181


$
9.52



1,351,839


$
9.20






$
Granted


124,470


$
42.93



17,416


$
29.30



1,351,839


$
9.20Vested


(903,544
)

$
9.33



(258,074
)

$
9.20






$
Canceled or forfeited


(2,476
)

$
9.20






$







$
Non-vested at end of year


329,631


$
22.64



1,111,181


$
9.52



1,351,839


$
9.20     For the Year EndedDecember 29, 2006


December 30, 2005


December 31, 2004Weighted-





Weighted-





Weighted-Average





Average





AverageGrant





Grant





GrantUnits


Price


Units


Price


Units


PriceNon-vested at beginning of year


578,548


$
10.18



549,945


$
9.40






$
Granted


96,706


$
50.00



28,603


$
25.15



549,945


$
9.40Vested


(226,337
)

$
10.96






$







$
Canceled or forfeited


(14,433
)

$
11.24






$







$
Non-vested at end of year


434,484


$
18.60



578,548


$
10.18



549,945


$
9.40     Impact of
    the Adoption of SFAS No. 123R:
   98




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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)    For the Year EndedDecember 29, 2006Selling, general and
    administrative expenses

$
7,258Reduction of income before income
    taxes


(7,258
)Related income tax benefits


Reduction of net income

$
(7,258
)Reduction of earnings per common
    share:Basic

$
(0.11
)Diluted

$
(0.10
)       13. Common
    Share Purchase Warrants
  equity-for-debt
     99




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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)
   13.
    Common
    Share Purchase
    Warrants  (Continued)     14. Accumulated
    Other Comprehensive Loss
    Pension and


Net Gain onOther


DerivativesMinimum Pension


Postretirement


Designated as


AccumulatedAccumulated


Liability


Benefit Plan


Cash Flow


OtherTranslation


Adjustments,


Adjustments,


Hedges,


ComprehensiveAdjustments


Net of Tax


Net of Tax


Net of Tax


LossBalance as of December 26,
    2003

$
(78,395
)

$
(225,604
)

$



$



$
(303,999
)Change for year


27,155



(19,899
)










7,256Balance as of December 31,
    2004


(51,240
)


(245,503
)










(296,743
)Change for year


(22,928
)


4,875











(18,053
)Balance as of December 30,
    2005


(74,168
)


(240,628
)










(314,796
)Change for year


31,612



40,087







342



72,041Adjustments resulting from the
    adoption of SFAS No. 158






200,541



(301,128
)






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

$
(42,556
)

$



$
(301,128
)

$
342


$
(343,342
)    15. Income
    Taxes
    For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Domestic

$
68,897


$
(229,379
)

$
(269,755
)Foreign


274,796



159,198



37,583Total

$
343,693


$
(70,181
)

$
(232,172
)  100




---



##### 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)    For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Current tax expense:Domestic

$
(4,084
)

$
(5,266
)

$
(7,597
)Foreign


(55,260
)


(28,902
)


(47,616
)Total current


(59,344
)


(34,168
)


(55,213
)Deferred tax (expense)/benefit:Domestic


(3,540
)


(2,845
)


(569
)Foreign


(18,825
)


(2,555
)


2,660Total deferred


(22,365
)


(5,400
)


2,091Total provision for income taxes

$
(81,709
)

$
(39,568
)

$
(53,122
)     December 29,


December 30,2006


2005Difference between book and tax
    depreciation

$
(24,038
)

$
(16,926
)Pensions


86,219



48,428Deferred tax on equity earnings


(18,180
)


(15,563
)U.S. tax on foreign earnings


(8,091
)


(16,500
)Current taxability of estimated
    costs to complete long-term contracts


27,631



15,623Income currently taxable deferred
    for financial reporting


19,158



21,779Expenses not currently deductible
    for tax purposes


112,280



54,643Postretirement benefits other than
    pensions


33,807



32,769Asbestos claims


43,493



68,654Minimum tax credits


3,885



6,780Foreign tax credits


18,029



12,833Net operating loss carryforwards


91,749



89,809Effect of write-downs and
    restructuring reserves


2,247



1,897Other


2,922



(11,221
)Total


391,111



293,005Valuation allowance


(312,962
)


(260,101
)Net deferred tax assets

$
78,149


$
32,904   and/or
 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)
   15.
    Income
    Taxes  (Continued)  non-U.S. jurisdictions
      For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Tax provision/(benefit) at
    U.S. statutory rate


35.0
%


(35.0
)%


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


0.3
%


5.1
%


1.7
%Adjustment to deferred tax
    assets 
    equity-for-debt
    exchange


0.0
%


0.0
%


154.5
%U.S. tax on foreign earnings


0.0
%


32.8
%


0.0
%Valuation allowance


(3.9
)%


30.3
%


(140.9
)%Difference in estimated income
    taxes on foreign income and losses, net of previously provided
    amounts


(9.9
)%


(10.3
)%


13.7
%Deferred charge


0.6
%


2.7
%


0.8
%Nondeductible loss


1.7
%


30.6
%


26.7
%Other


0.0
%


0.2
%


1.4
%Total


23.8
%


56.4
%


22.9
%    16. Derivative
    Financial Instruments
   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)
   16.
    Derivative
    Financial
    Instruments  (Continued)    For the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004(Decrease)/increase in cost of
    operating revenues

$
(7,662
)

$
3,711


$
2,700Other deductions


52



222



200Pretax (gain)/loss

$
(7,610
)

$
3,933


$
2,900         17. Business
    Segments
  Global Engineering and
    Construction Group, Global Power Group. gas-to-liquids waste-to-energy
   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)
   17.
    Business
    Segments  (Continued)  waste-to-energy
        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


RevenuesNorth America

$
137,346



6.2
%

$
739,309



57.9
%

$
876,655



25.1
%South America


63,138



2.8
%


57,385



4.5
%


120,523



3.4
%Europe


618,129



27.9
%


379,311



29.7
%


997,440



28.5
%Asia


317,413



14.3
%


95,571



7.5
%


412,984



11.8
%Middle East


467,294



21.1
%


3,452



0.3
%


470,746



13.5
%Other


615,784



27.7
%


916



0.1
%


616,700



17.7
%Total

$
2,219,104



100.0
%

$
1,275,944



100.0
%

$
3,495,048



100.0
%      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)
   17.
    Business
    Segments  (Continued)     Global


Global


C&FTotal


E&C Group


Power Group


Group(1)For the Year Ended
    December 29, 2006Third-party revenues

$
3,495,048


$
2,219,104


$
1,275,944


$
EBITDA

$
399,514


$
323,297
(2)

$
95,039
(2)

$
(18,822
)(2)Less: Interest expense


(24,944
)Less: Depreciation and amortization


(30,877
)Income before income taxes


343,693Provision for income taxes


(81,709
)Net income

$
261,984Total assets

$
2,566,023


$
1,397,428


$
980,756


$
187,839Capital expenditures

$
30,293


$
22,784


$
7,464


$
45For the Year Ended
    December 30, 2005Third-party revenues

$
2,199,955


$
1,471,948


$
728,024


$
(17
)EBITDA

$
8,652


$
165,629
(3)

$
107,266
(3)

$
(264,243
)(3)Less: Interest expense


(50,618
)Less: Depreciation and amortization


(28,215
)Loss before income taxes


(70,181
)Provision for income taxes


(39,568
)Net loss

$
(109,749
)Total assets

$
1,894,706


$
916,857


$
1,023,094


$
(45,245
)Capital expenditures

$
10,809


$
6,856


$
3,642


$
311For the Year Ended
    December 31, 2004Third-party revenues

$
2,661,324


$
1,672,082


$
988,630


$
612EBITDA

$
(104,795
)

$
135,548
(4)

$
80,814
(4)

$
(321,157
)(4)Less: Interest expense


(94,622
)Less: Depreciation and amortization


(32,755
)Loss before income taxes


(232,172
)Provision for income taxes


(53,122
)Net loss

$
(285,294
)Capital expenditures

$
9,613


$
5,724


$
3,847


$
42     (1)
    
    Includes general corporate income and expense, our captive
    insurance operation and eliminations.(2)
    
    Includes in fiscal year 2006: (decreased)/increased contract
    profit of $(5,670) from the regular re-evaluation of contract
    profit estimates: $14,720 in our Global E&C Group and
    $(20,390) in our Global Power 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)
   17.
    Business
    Segments  (Continued)  Group; net asbestos-related gains of $100,131 recorded in our
    C&F Group; an aggregate charge of $(14,955) recorded 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) recorded in our C&F Group in conjunction with the
    debt reduction initiatives completed in April and May 2006.(3)
    
    Includes in fiscal year 2005: increased contract profit of
    $99,555 from the regular re-evaluation of contract profit
    estimates: $66,274 in our Global E&C Group and $33,281 in
    our Global Power Group; a charge of $(113,680) in our C&F
    Group on the revaluation of our estimated asbestos liability and
    asbestos insurance receivable; credit agreement costs in our
    C&F Group associated with the prior senior credit facility
    of $(3,500); and an aggregate charge of $(58,346) in our C&F
    Group recorded in conjunction with the exchange offers for the
    trust preferred securities and the 2011 senior notes exchange
    offers.(4)
    
    Includes in fiscal year 2004: increased/(decreased) contract
    profit of $37,641 from the regular re-evaluation of contract
    profit estimates: $83,231 in our Global E&C Group and
    $(45,590) in our Global Power Group; a gain of $19,200 in our
    Global E&C Group on the sales of minority equity interests
    in special-purpose companies established to develop power plant
    projects in Europe; a loss of $(3,300) in our Global E&C
    Group on the sale of 10% of our equity interest in a
    waste-to-energy
    project in Italy; a charge of $(75,800) in our C&F Group on
    the revaluation of asbestos insurance assets as a result of an
    adverse court decision in asbestos coverage allocation
    litigation; a net gain of $15,200 in our C&F Group on the
    settlement of coverage litigation with certain asbestos
    insurance carriers; restructuring and credit agreement costs of
    $(17,200) in our C&F Group; a net charge of $(175,054) in
    our C&F Group recorded in conjunction with the 2004
    equity-for-debt
    exchange; and charges for severance cost of $(5,700): $(2,900)
    in our Global E&C Group, $(1,900) in our Global Power Group
    and $(900) in our C&F Group.  For the Year EndedDecember 29,


December 30,


December 31,Equity earnings in unconsolidated subsidiaries:

2006


2005


2004Global E&C Group

$
19,056


$
24,527


$
16,885Global Power Group


10,551



5,409



9,041C&F Group


(328
)


(88
)


(316
)Total

$
29,279


$
29,848


$
25,610   December 29,


December 30,Investments and advances in unconsolidated subsidiaries:

2006


2005Global E&C Group

$
105,773


$
108,512Global Power Group


61,405



58,208C&F Group


8



1,473Total

$
167,186


$
168,193     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)
   17.
    Business
    Segments  (Continued)  For the Year EndedDecember 29,


December 30,


December 31,Geographic concentration of operating revenues:

2006


2005


2004United States

$
931,701


$
451,532


$
525,614Europe


2,286,205



1,557,965



1,900,889Canada


11,588



13,508



35,895Asia


253,457



164,705



165,416South America


12,097



12,262



38,630C&F Group, including
    eliminations






(17
)


(5,120
)Total

$
3,495,048


$
2,199,955


$
2,661,324     December 29,


December 30,Long-lived assets:

2006


2005United States

$
225,373


$
235,218Europe


235,781



188,982Canada


433



537Asia


28,141



22,482South America


60,242



57,410C&F Group, including
    eliminations


33,281



37,284Total

$
583,251


$
541,913     For the Year EndedDecember 29,


December 30,


December 31,Operating revenues by industry:

2006


2005


2004Power generation

$
1,326,896


$
915,786


$
1,164,672Oil refining


716,053



444,830



773,758Pharmaceutical


128,510



149,867



335,363Oil and gas


680,041



327,058



216,451Chemical/petrochemical


383,092



228,971



171,091Power plant operation and
    maintenance


111,154



116,303



112,526Environmental


68,847



43,346



78,891Other and eliminations


80,455



(26,206
)


(191,428
)Total third-party revenues

$
3,495,048


$
2,199,955


$
2,661,324    18. Sale
    of Certain Business Assets
   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)
   18. Sale
    of Certain Business Assets 
    (Continued)
     waste-to-energy
  19. Operating
    Leases
  sub-lease
  Fiscal year:2007

$
43,7142008


31,7892009


26,5862010


24,8272011


24,360Thereafter


234,095$
385,371   year-over-year
  20. Litigation
    and Uncertainties
  Asbestos
  out-of-court
 108




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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)
   20. Litigation
    and Uncertainties  (Continued)
   United
    States
    Number of ClaimsFor the Year EndedDecember 29,


December 30,


December 31,2006


2005


2004Open claims at beginning of year


164,820



167,760



170,860New claims


8,250



14,340



17,870Claims resolved
    (1)


(37,180
)


(17,280
)


(20,970
)Open claims at end of year


135,890



164,820



167,760Claims not valued in the liability
    (2)


(47,820
)


(62,560
)


(34,910
)Open claims valued in the
    liability at end of year


88,070



102,260



132,850     (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 six or
    more years old that are considered abandoned and certain other
    items.          109




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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)
   20. Litigation
    and Uncertainties  (Continued)
  December 29,


December 30,2006


2005Asbestos-related assets
    recorded within:Accounts and notes receivable-other

$
47,000


$
24,200Asbestos-related insurance
    recovery receivable


316,700



295,800Total asbestos-related assets

$
363,700


$
320,000Asbestos-related liabilities
    recorded within:Accrued expenses

$
75,000


$
75,000Asbestos-related liability


391,000



441,000Total asbestos-related liabilities

$
466,000


$
516,000   15-year 15-year 15-year
          and/or
 110




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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)
   20. Litigation
    and Uncertainties  (Continued)
            out-of-pocket 25-year
   111




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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)
   20. Litigation
    and Uncertainties  (Continued)
              112




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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)
   20. Litigation
    and Uncertainties  (Continued)
   United
    Kingdom
      Project
    Claims
      out-of-specification
 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)
   20. Litigation
    and Uncertainties  (Continued)
     out-of-specification out-of-specification out-of-specification
   114




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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)
   20. Litigation
    and Uncertainties  (Continued)
           Camden
    County
    Waste-to-Energy
    Project
  waste-to-energy
       115




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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)
   20. Litigation
    and Uncertainties  (Continued)
   Environmental
    Matters
  CERCLA
    and Other Remedial Matters
    and/or
  and/or and/or and/or
    Mountain
    Top
   116




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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. Litigation
    and Uncertainties  (Continued)
        and/or and/or and/or
    Sarah Martin and Jeffrey Martin v. Foster Wheeler Energy
    Corporation No. 3376-06,
  Donna Rose Cunningham and Michael A. Cunningham v.
    Foster Wheeler Energy Corporation Martin
 117




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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. Litigation
    and Uncertainties  (Continued)
    Gary
    Prezkop, Personal Representative of the Estate of Mary Prezkop,
    Deceased, and Gary Prezkop, in his own right, v. Foster
    Wheeler Energy Corporation and Leonard M. Lulis. , Martin Cunningham
    Other
    Environmental Matters
    waste-to-energy
 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)
  21. Quarterly
    Financial Data (Unaudited)
  Three Months EndedMarch 31,


June 30,


September 29,


December 29,2006


2006


2006


2006Operating revenues

$
645,842


$
745,307


$
910,580


$
1,193,319Contract profit
    (1)


80,318



127,942



129,189



170,338Net income


14,631



108,418



75,827



63,108Net (loss)/income attributable to
    common shareholders


(4,814
)(2)


108,418



75,827



63,108(Loss)/earnings per common share:Basic

$
(0.08
)(2)

$
1.62


$
1.12


$
0.92Diluted

$
(0.08
)(2)

$
1.53


$
1.07


$
0.88Shares outstanding:Weighted-average number of common
    shares outstanding for basic (loss)/earnings per common share


63,069,436



66,834,931



67,710,728



68,377,674Effect of dilutive securities


*



3,849,488



3,410,860



3,069,685Weighted-average number of common
    shares outstanding for diluted (loss)/earnings per common share


63,069,436



70,684,419



71,121,588



71,447,359   Three Months EndedApril 1,


July 1,


September 30,


December 30,2005


2005


2005


2005Operating revenues

$
523,065


$
526,018


$
532,356


$
618,516Contract profit
    (3)


73,418
(4)


106,208



93,976



72,740Net income (loss)


1,240



27,879



(16,706
)


(122,162
)(5)Net income/(loss) attributable to
    common shareholders


1,174



27,439



(16,706
)


(122,162
)(5)Earnings/(loss) per common share:Basic

$
0.03


$
0.63


$
(0.35
)

$
(2.27
)Diluted

$
0.02


$
0.55


$
(0.35
)

$
(2.27
)Shares outstanding:Weighted-average number of common
    shares outstanding for basic earnings/(loss) per common share


41,753,245



43,414,937



47,195,732



53,916,436Effect of dilutive securities


6,345,847



6,287,121



*



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


48,099,092



49,702,058



47,195,732



53,916,436     *
    
    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 earnings/(loss) per common share due to
    their antidilutive effect. 119




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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. Quarterly
    Financial Data (Unaudited)  (Continued)
   (1)
    
    As discussed in the Revisions section of
    Note 1, previously reported contract profit has been
    reduced by $1,707, $3,513 and $6,123 in the three months ended
    March 31, 2006, June 30, 2006 and September 29,
    2006, respectively.(2)
    
    As discussed in the Earnings per Common Share
    section of Note 1, the fair value of the additional shares
    issued as part of the warrant offer transactions, which were
    consummated in January 2006, reduced net income attributable to
    the common shareholders when calculating earnings/(loss) per
    common share. The fair value of the additional shares issued was
    $19,445.(3)
    
    As discussed in the Revisions section of
    Note 1, previously reported contract profit has been
    reduced by $4,506, $4,250, $3,974 and $6,775 in the three months
    ended April 1, 2005, July 1, 2005, September 30,
    2005 and December 30, 2005, respectively.(4)
    
    As discussed in the Revisions section of
    Note 1, previously reported contract profit has been
    increased by $816.(5)
    
    Includes a charge of $(113,680) on the revaluation of our
    estimated asbestos liability and asbestos insurance receivable,
    a charge of $(16,800) recorded in conjunction with the 2011
    senior notes exchange offer and a charge of $(1,400) related to
    the common share purchase warrants offers commenced in December
    2005. 120




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Foster
    Wheeler Ltd.
  Schedule II:
    Valuation and Qualifying Accounts
 (amounts
    in thousands)
  2006Additions


AdditionsBalance at


Charged


Charged





Balance atBeginning


to Costs and


to Other





the Endof Year


Expenses


Accounts


Deductions


of the YearDescriptionAllowance for doubtful accounts

$
10,379


$
2,317


$



$
(4,848
)

$
7,848Tax valuation allowance

$
260,101


$
82,136


$
3,176


$
(32,451
)

$
312,962   2005Additions


AdditionsBalance at


Charged


Charged





Balance atBeginning


to Costs and


to Other





the Endof Year


Expenses


Accounts


Deductions


of the YearDescriptionAllowance for doubtful accounts

$
23,199


$
3,006


$
157


$
(15,983
)

$
10,379Tax valuation allowance

$
234,432


$
71,838


$
11,474


$
(57,643
)

$
260,101   2004Additions


AdditionsBalance at


Charged


Charged





Balance atBeginning


to Costs and


to Other





the Endof Year


Expenses


Accounts


Deductions


of the YearDescriptionAllowance for doubtful accounts

$
37,406


$
14,713


$
3,053


$
(31,973
)

$
23,199Tax valuation allowance

$
534,790


$
31,540


$



$
(331,898
)

$
234,432  121




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ITEM 9. CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   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
   122




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ITEM 9B. OTHER
    INFORMATION   123




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##### Table of Contents



PART III ITEM 10. DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    Code of
    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 (amounts in thousands of dollars,
    except share data and per share amounts)    Equity
    Compensation Plan Information
   124




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##### Table of Contents



Number of Securities RemainingNumber of Securities to


Weighted-Average Exercise


Available for Future Issuancebe Issued Upon Exercise


Price of Outstanding


Under Equity Compensationof Outstanding Options,


Options,


Plans (excluding securitiesWarrants and Rights


Warrants and Rights ($)


reflected in column (a))Plan Category

(a)


(b)


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


590,916


$
38.87



4,089,3921995 Stock Option Plan


151,228


$
265.77



Directors Stock Option Plan


9,150


$
309.44



Directors Deferred
    Compensation Program





$
0.00



Equity Compensation Plans Not
    Approved by Security Holders:Raymond J. Milchovich
    (1)


65,000


$
99.70



Bernard H. Cherry
    (2)


10,150


$
28.40



M.J. Rosenthal &
    Associates, Inc.
    (3)


12,500


$
37.60



2004 Stock Option Plan
    (4)


1,474,691


$
11.06



Management Restricted Stock Plan
    (Units)
    (5)


339,314


$
0.00



Total


2,652,949


$
33.75



4,089,392     (1)
    
    Under the terms of his employment agreement, dated
    October 22, 2001, Mr. Milchovich received an option to
    purchase 65,000 of our common shares on October 22, 2001.
    This option was granted at an exercise price of $99.70 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 our common shares on the grant date. The option has
    a term of 10 years from the date of grant.(2)
    
    Under the terms of his employment agreement, Mr. Cherry
    received an option to purchase 12,750 of our common shares on
    November 4, 2002. This option was granted at an exercise
    price of $29.80 and vested 20% per year on each anniversary
    date of grant. The option exercise price is equal to the median
    of the high and low price of our common shares on the grant
    date. Mr. Cherry also received an option to purchase 5,000
    of our common shares on December 23, 2003 under the terms
    of his employment agreement. This option vested one-fourth on
    each anniversary date of grant. The exercise price is equal to
    the mean of the high and low price of our common shares on the
    first anniversary of his employment agreements effective
    date at a price of $24.10. Each option has a term of
    10 years from the date of grant. In connection with his
    termination, 5,100 of the inducement options granted in 2002 and
    2,500 of the inducement options granted in 2003 were canceled
    effective June 16, 2006.(3)
    
    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 12,500 of our
    common shares at a price of $37.60 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 our 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.(4)
    
    Under the terms of the 2004 Stock Option Plan, adopted by the
    Board of Directors in September 2004, management was granted
    stock options to purchase approximately 43,103 preferred shares
    at an exercise price of $9.378 per common share on
    October 6, 2004. Such options expire on October 5,
    2007. One-third of the options issued to management vested in
    the fourth quarter of 2005, and the balance vested during the
    fourth calendar quarter of 2006, unless an award recipient was
    involuntarily terminated. On November 29, 2004, our
    shareholders approved the grant of options under the 2004 Stock
    Option Plan to purchase approximately 413 preferred shares to
    our non-employee directors at an exercise price of
    $9.378 per 125




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##### Table of Contents



common share. Such options expire on October 5, 2007. The
    non-employee director options vested on December 31, 2005.
    On November 29, 2004, each option under the 2004 Stock
    Option Plan to purchase preferred shares granted to management
    and the non-employee directors automatically converted to an
    option to purchase 65 common shares at an exercise price of
    $9.378 per common share. As of December 29, 2006,
    options to purchase 1,317,322 common shares at an exercise price
    of $9.378 per common share remained outstanding.  On August 8, 2005, one of our senior executives was issued
    options under the 2004 Stock Option Plan to purchase 169,000
    common shares at an exercise price of $23.20 per common
    share. Such options expire on August 7, 2008. One-third of
    the options vested in the fourth quarter of 2005, and the
    balance vested during the fourth calendar quarter of 2006. As of
    December 29, 2006, options to purchase 113,000 common
    shares at an exercise price of $23.20 per common share
    remained outstanding.On October 10, 2005, one of our senior executives was
    issued options under the 2004 Stock Option Plan to purchase
    52,165 common shares at an exercise price of $29.95 per
    common share. Such options expire on October 9, 2008.
    One-third of the options vested in the fourth quarter of 2005,
    and the balance vested during the fourth calendar quarter of
    2006. As of December 29, 2006, options to purchase 39,124
    common shares at an exercise of $29.95 per common share remained
    outstanding.On November 8, 2005, our non-employee directors were issued
    options under the 2004 Stock Option Plan to purchase 7,343
    common shares at an exercise price of $29.675 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 29, 2006, options to purchase 5,245 common shares
    at an exercise price of $29.675 per common share remained
    outstanding.(5)
    
    Under the terms of the Management Restricted Stock Plan, adopted
    by the Board of Directors in September 2004, management was
    issued restricted common share awards, of which 531,899 were in
    the form of restricted share units, on October 6, 2004. The
    restricted share units do not have voting rights. Each
    restricted share unit will convert into an unrestricted common
    share upon vesting. The restricted awards provide that issued
    units may not be sold or otherwise transferred until
    restrictions lapse. One-third of the restricted awards vested in
    the fourth quarter of 2005 and the balance vested during the
    fourth calendar quarter of 2006, unless award recipient is
    involuntarily terminated.On August 8, 2005, one of our senior executives was issued
    20,000 restricted common share units in accordance with the
    Management Restricted Stock Plan. One-third of the award vested
    in the fourth quarter of 2005 and the balance vested in the
    fourth calendar quarter of 2006.   ITEM 13. CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS   ITEM 14. PRINCIPAL
    ACCOUNTING FEES AND SERVICES   126




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PART IV
 ITEM 15. EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES    (1)
    Financial StatementsFinancial Statements  See Item 8 of this
    Report.(2)
    Financial Statement SchedulesSchedule II:  Valuation and Qualifying
    Accounts  See Item 8 of this Report.    (3) Exhibits
  ExhibitNo.

Exhibits3
.1

Memorandum of Association of
    Foster Wheeler Ltd. (Filed as Annex II to Foster Wheeler
    Ltd.s
    Form S-4/A
    (File
    No. 333-52468),
    filed on March 9, 2001, and incorporated herein by
    reference.)3
.2

Memoranda of Reduction of Share
    Capital and Memorandum of Increase in Share Capital each dated
    December 1, 2004. (Filed as Exhibit 99.2 to Foster
    Wheeler Ltd.s
    Form 8-K,
    dated November 29, 2004 and filed on December 2, 2004,
    and incorporated herein by reference.)3
.3

Certificate of Designation
    relating to Foster Wheeler Ltd.s Series B Convertible
    Preferred Shares, adopted on September 24, 2004. (Filed as
    Exhibit 3.1 to Foster Wheeler Ltd.s
    Form 10-Q
    for the quarter ended September 24, 2004, and incorporated
    herein by reference.)3
.4

Bye-Laws of Foster Wheeler Ltd.,
    amended May 9, 2006. (Filed as Exhibit 3.2 to Foster
    Wheeler Ltd.s
    Form 8-K,
    dated May 9, 2006 and filed on May 12, 2006, and
    incorporated herein by reference.)4
.0

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

Indenture, dated as of
    May 31, 2001, among Foster Wheeler Ltd., Foster Wheeler LLC
    and BNY Midwest Trust Company regarding the
    6.50% Convertible Subordinated Notes due 2007. (Filed as
    Exhibit 4.4 to Foster Wheeler Ltd.s registration
    statement on
    Form S-3
    (Registration
    No. 333-64090),
    filed on June 28, 2001, and incorporated herein by
    reference.)10
.2

First Supplemental Indenture,
    dated as of February 20, 2002, between Foster Wheeler Ltd.
    and BNY Midwest Trust Company regarding the
    6.50% Convertible Subordinated Notes due 2007. (Filed as
    Exhibit 4.6 to Foster Wheeler Ltd.s
    Form 10-K
    for the fiscal year ended December 28, 2001, and
    incorporated herein by reference.)10
.3

Supplemental Indenture, dated as
    of September 24, 2004, among Foster Wheeler Ltd., Foster
    Wheeler LLC, and BNY Midwest Trust Company, as trustee, relating
    to Foster Wheeler Ltd.s 6.50% Convertible Subordinated
    Notes due 2007. (Filed as Exhibit 4.8 to Foster Wheeler
    Ltd.s registration statement on
    Form S-4
    (Registration
    No. 333-107054),
    filed on December 27, 2003, and incorporated herein by
    reference.)10
.4

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 by reference herein.)10
.5

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.) 127




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##### Table of Contents



ExhibitNo.

Exhibits10
.6

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
.7

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
.8

Guarantee Facility, dated
    July 22, 2005, 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 £50,000,000 guarantee facility and a
    £150,000,000 forward foreign exchange facility. (Filed as
    Exhibit 99.1 to Foster Wheeler Ltd.s
    Form 10-Q
    for the quarter ended September 30, 2005, and incorporated
    herein by reference.)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

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.) 128




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##### Table of Contents



ExhibitNo.

Exhibits10
.19

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
.20

Foster Wheeler Annual Executive
    Short-term Incentive Plan, as amended and restated effective
    January 1, 2006.10
.21

Foster Wheeler Ltd. 2004
    Management Restricted Stock Plan. (Filed as Exhibit 10.1 to
    Foster Wheeler Ltd.s
    Form 8-K,
    dated September 29, 2004 and filed on October 1, 2004,
    and incorporated herein by reference.)10
.22

Form of First Amendment to the
    Foster Wheeler Ltd. 2004 Management Restricted Stock Plan
    Restricted Stock Unit Award Agreement with respect to
    non-employee directors. (Filed as Exhibit 99.4 to Foster
    Wheeler Ltd.s
    Form 8-K,
    dated May 13, 2005 and filed on May 16, 2005, and
    incorporated herein by reference.)10
.23

Form of Second Amendment to the
    Foster Wheeler Ltd. 2004 Management Restricted Stock Plan.
    (Filed as Exhibit 99.1 to Foster Wheeler Ltd.s
    Form 8-K,
    dated May 10, 2005 and filed on November 8, 2005, and
    incorporated herein by reference.)10
.24

Form of Amended and Restated
    Restricted Stock Award Agreement with respect to executive
    officers, officers and key employees. (Filed as
    Exhibit 99.5 to Foster Wheeler Ltd.s
    Form 8-K,
    dated May 13, 2005 and filed on May 16, 2005, and
    incorporated herein by reference.)10
.25

Form of Amended and Restated
    Restricted Stock Unit Agreement with respect to executive
    officers, officers and key employees. (Filed as
    Exhibit 99.6 to Foster Wheeler Ltd.s
    Form 8-K,
    dated May 13, 2005 and filed on May 16, 2005, and
    incorporated herein by reference.)10
.26

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
.27

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
.28

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
.29

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
.30

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.)10
.31

Form of Directors Restricted
    Stock Unit Award 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 10.1 to Foster Wheeler Ltd.s
    Form 8-K,
    dated June 14, 2006 and filed on June 16, 2006, and
    incorporated herein by reference.)10
.32

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
.33

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
.34

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
.35

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.) 129




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##### Table of Contents



ExhibitNo.

Exhibits10
.36

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
.37

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 by reference
    herein.)10
.38

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
.39

Form of Change of Control
    Agreement, dated as of May 25, 2001, and entered into by
    the Company 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
.40

Form of Indemnification Agreement
    for directors and officers of the Company 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
.41

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
.42

First Amendment to the Employment
    Agreement, dated January 31, 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.)10
.43

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
.44

Stock Option Agreement of Raymond
    J. Milchovich, dated as of September 24, 2002. (Filed as
    Exhibit 10.2 to Foster Wheeler Ltd.s
    Form 8-K,
    dated September 13, 2002 and filed on September 25,
    2002, and incorporated herein by reference.)10
.45

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
.46

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
.47

Employment Agreement between
    Foster Wheeler Ltd. and John T. La Duc, dated as of
    April 14, 2004. (Filed as Exhibit 99.2 to Foster
    Wheeler Ltd.s
    Form 8-K,
    dated April 14, 2004 and filed on April 15, 2004, and
    incorporated herein by reference.)10
.48

First Amendment to the Employment
    Agreement, dated as of October 6, 2006, between Foster
    Wheeler Ltd. and John T. La Duc. (Filed as
    Exhibit 99.1 to Foster Wheeler Ltd.s
    Form 8-K,
    dated October 5, 2006 and filed on October 10, 2006,
    and incorporated herein by reference.)10
.49

Second Amendment to the Employment
    Agreement, dated as of January 30, 2007, between Foster
    Wheeler Ltd. and John T. La Duc. (Filed as
    Exhibit 10.1 to Foster Wheeler Ltd.s
    Form 8-K,
    dated January 30, 2007 and filed on February 2, 2007,
    and incorporated herein by reference.)10
.50

Change of Control Employment
    Agreement between Foster Wheeler Inc. and John T. La Duc,
    dated as of April 14, 2004. (Filed as Exhibit 99.3 to
    Foster Wheeler Ltd.s
    Form 8-K,
    dated April 14, 2004 and filed on April 15, 2004, and
    incorporated herein by reference.)10
.51

Change of Control Employment
    Agreement between Foster Wheeler Inc. and Brian K. Ferraioli
    effective as of December 1, 2003. (Filed as
    Exhibit 10.9 to Foster Wheeler Ltd.s
    Form 10-Q
    for the quarter ended March 26, 2004, and incorporated
    herein by reference.)10
.52

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.) 130




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##### Table of Contents



ExhibitNo.

Exhibits10
.53

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
.54

Change of Control Employment
    Agreement between Foster Wheeler Inc. and Peter J. Ganz, dated
    as of October 10, 2005. (Filed as Exhibit 10.2 to
    Foster Wheeler Ltd.s
    Form 10-Q
    for the quarter ended September 30, 2005, and incorporated
    herein by reference.)10
.55

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.)12
.1

Statement of Computation of
    Consolidated Ratio of Earnings to Fixed Charges and Preferred
    Shares Dividend Requirements.14
.0

Revised Code of Business Conduct
    and Ethics. (Filed as Exhibit 99.1 to Foster Wheeler
    Ltd.s
    Form 8-K,
    dated November 29, 2004 and filed on December 2, 2004,
    and incorporated herein by reference.)21
.0

Subsidiaries of the Registrant.23
.0

Consent of Independent Registered
    Public Accounting Firm.31
.1

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 of Raymond J.
    Milchovich31
.2

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 of John T.
    La Duc32
.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. Milchovich32
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the
    Sarbanes-Oxley
    Act of 2002 of John T. La Duc  131




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##### Table of Contents



SIGNATURES
       By:
    /s/  Peter
    J. Ganz  Peter J. Ganz
       Signature

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

Director, Chairman of the Board
    and Chief Executive Officer/s/  John
    T.
    La DucJohn
    T. La Duc 
    (Principal Financial Officer)

Executive Vice President and Chief
    Financial Officer/s/  Brian
    K.
    FerraioliBrian
    K. Ferraioli
    (Principal Accounting Officer)

Vice President and Controller/s/  Ralph
    AlexanderRalph
    Alexander

Director/s/  Eugene
    D. AtkinsonEugene
    D. Atkinson

Director/s/  Diane
    C. CreelDiane
    C. Creel

Director/s/  Robert
    C. FlexonRobert
    C. Flexon

Director/s/  Stephanie
    Hanbury-BrownStephanie
    Hanbury-Brown

Director/s/  James
    D. WoodsJames
    D. Woods

Director  132