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RAIL SYSTEM SUCCESS HIGHLIGHTS 1992 FOR MORRISON KNUDSEN

 BOISE, Idaho, Feb. 5 /PRNewswire/ -- Bolstered by record operating income from its Rail Systems segment, Morrison Knudsen Corp. (MK) (NYSE: MRN) emerged from 1992 with fourth-quarter net income of $6.9 million, 23 cents per share, and a record year-end backlog.
 William J. Agee, MK's chairman and chief executive officer, said the company's Rail Systems segment had its best-ever quarter from an earnings standpoint, due primarily to delivery of new transit cars to the Chicago Transit Authority (CTA). More than 100 cars of a 256-car manufacturing order have been delivered to CTA from MK's Hornell (New York) Industrial Complex.
 "MK's Cleveland-based industrial process operations posted record revenues of $725 million in 1992," said Agee. The Cleveland operation is managing construction of nearly $185 million worth of upgrades and facilities for Merck and Co. and Pfizer Inc., two new clients won in 1992, according to Agee.
 "While year-end results certainly were not what we would have liked, the results of the final three months provide the momentum and foundation for a solid financial performance in 1993," said Agee. "The company remains in a strong financial position with more than $175 million in cash and short-term investments."
 MK reported 1992 income of $13.4 million, 44 cents per share, before non-recurring charges. Revenue for the year was $2.3 billion. After an extraordinary charge from debt redemption and the cumulative effect of an accounting change for post-retirement health care costs, the company reported a net loss for the year of $(7.1) million (23 cents) per share.
 For the fourth quarter, the company reported revenue of $666.7 million.
 Backlog at year-end stood at $4.7 billion, up from $4.2 billion at the end of 1991.
 Redemption of Liquid Yield Option Notes (LYONS) for cash on Sept. 30, 1992, resulted in an extraordinary after-tax charge of $(3.1) million, (10 cents) per share. Agee said the company's strong cash position enabled MK to redeem the LYONs and thereby eliminate future interest charges associated with the debt and the potential for dilution of future per-share earnings.
 In addition to the successful delivery of transit cars to the CTA, the Rail Systems segment ended the year with an all-time high backlog of approximately $1 billion, due principally to $775 million in orders for new transit cars in 1992. During the year, MK won orders for 313 cars ($380 million) from Metra, the commuter line serving Northeast Illinois; 88 cars ($155 million) from the California Department of Transportation; 80 cars ($140 million) from the Bay Area Rapid Transit District (BART); and 50 cars ($100 million) from Amtrak.
 Amtrak also selected an MK-led joint venture for a $296-million contract to design and construct a high-speed-rail electrification system from New Haven, Conn., to Boston.
 In December 1992, MK enhanced its ability to serve the rail industry by acquiring TMS Inc. of Latham, N.Y., a leading manufacturer of turbochargers for locomotive engines, and Power Parts Co. of Chicago, one of the world's largest distributors of locomotive engine parts. These business combinations were accounted for as poolings-of-interests. MK and Caterpillar signed an agreement to develop jointly a new generation of locomotives, powered by CAT engines and manufactured by MK.
 Two major international jobs added to MK's standing as one of the world's leading transportation companies. MK is part of a consortium selected to negotiate a contract to finance, design, build and operate, under a 35-year lease, an 8.2-mile-long bridge connecting New Brunswick and Prince Edward Island.
 In Hong Kong, MK and five associates won an approximately $1.2-billion contract to prepare an offshore site for a replacement airport. MK's share of the contract is approximately $148 million.
 Other highlights of 1992 included a $150-million contract from General Motors to MK and an associate for design and construction of a paint shop at a GM plant in Ohio; and an approximately $90-million contract to construct a water-treatment plant in Egypt.
 Morrison Knudsen Corp. is an international company serving the environmental, industrial process, power and transportation markets with complete development, design/engineering, construction, operating and financial services.
 MORRISON KNUDSEN CORP.
 FINANCIAL SUMMARY
 (Dollars in thousands, except per-share data)
 Three Months Year
 1992 1991(A) 1992 1991(A)
 Revenue:
 Engineering and
 construction $545,189 $456,097 $1,985,578 $1,554,628
 Rail systems 121,481 81,791 299,353 470,163
 Total revenue $666,670 $537,888 $2,284,931 $2,024,791
 Operating income:
 Engineering and
 construction $ 10,972 $ 12,954 $ 39,650 $ 58,956
 Rail systems 9,024 2,875 11,031 22,958
 Total operating income 19,996 15,829 50,681 81,914
 Equity in earnings
 (loss) and interest
 earned from McConnell
 Dowell and other
 affiliates (250) 2,948 3,867 5,545
 Other income - net 4,311 8,910 23,676 35,964
 General and
 administrative
 expense (11,434) (14,201) (41,534) (48,813)
 Interest expense (317) (4,236) (12,307) (16,156)
 Income before income
 taxes, minority
 interests,
 extraordinary
 charge, and
 cumulative effect
 of accounting change 12,306 9,250 24,383 58,454
 Income tax expense (5,389) (3,524) (10,813) (22,998)
 Minority interests in
 earnings of
 subsidiaries (60) -- (134) --
 Income before
 extraordinary charge
 and cumulative effect
 of accounting change 6,857 5,726 13,436 35,456
 Extraordinary charge
 from write-off of
 unamortized debt
 issue cost (B) -- -- (3,096) --
 Cumulative effect of
 accounting change for
 post-retirement health
 care costs (C) -- -- (17,403) --
 Net income (loss) $ 6,857 $ 5,726 $ (7,063) $ 35,456
 Earnings (loss) per
 common share (D)
 Primary
 Income before
 extraordinary
 charge and
 cumulative effect
 of accounting
 change $ 0.23 $ 0.19 $ 0.44 $ 1.24
 Extraordinary charge -- -- (0.10) --
 Cumulative effect of
 accounting change -- -- (0.57) --
 Net income (loss) $ 0.23 $ 0.19 $ (0.23) $ 1.24
 New business booked in period
 Engineering and
 construction $521,500 $488,200 $1,633,100 $2,169,500
 Rail systems 185,100 51,100 1,049,000 181,200
 Total new business $706,600 $539,300 $2,682,100 $2,350,700
 Backlog at Dec. 31, 1992 1991
 Engineering and construction $3,493,200 $3,845,700
 Rail systems 1,154,000 404,300
 Total backlog $4,647,200 $4,250,000
 (A) Restated to include the results of operations of businesses acquired in December 1992 accounted for as poolings-of-interests.
 (B) The extraordinary charge represents the unamortized issue costs (net of tax) of the Liquid Yield Option Notes redeemed on Sept. 30, 1992.
 (C) The corporation changed to the accrual method of accounting for post-retirement health care costs effective Jan. 1, 1992. The cumulative after-tax effect of the change, representing unfunded prior service cost at Dec. 31, 1991, was recognized in the income statement as a restatement of the first-quarter 1992 results of operations.
 (D) Earnings-per-share data have been restated for all periods presented to reflect the two-for-one stock split in May 1992.
 -0- 2/5/93
 /CONTACT: Stanley D. Crow, vice-president, Corporate Communications, of Morrison Knudsen, 208-386-5387/
 (MRN)


CO: Morrison Knudsen Corp. ST: Idaho IN: CST TRN SU: ERN

SW -- SE012 -- 3691 02/05/93 16:42 EST
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