CB&I Reports First Quarter Results

Chicago Bridge & Iron Company N.V.

Segment Information

(in thousands)

Three Months Ended March 31,

NEW AWARDS ⁽¹⁾

% of

% of

Total

Total

Engineering & Construction

$

323,418

27%

$

1,209,407

40%

Fabrication Services

373,689

31%

927,374

31%

Technology

83,620

7%

77,022

2%

Capital Services

416,672

35%

817,380

27%

Total

$

1,197,399

$

3,031,183

REVENUE

% of

% of

Total

Total

Engineering & Construction

$

1,516,328

57%

$

1,818,586

58%

Fabrication Services

517,576

19%

637,809

21%

Technology

64,562

3%

99,361

3%

Capital Services

569,267

21%

569,989

18%

Total

$

2,667,733

$

3,125,745

INCOME FROM OPERATIONS

% of

% of

Revenue

Revenue

Engineering & Construction

$

111,920

7.4%

$

136,418

7.5%

Fabrication Services

38,249

7.4%

52,399

8.2%

Technology

26,281

40.7%

48,024

48.3%

Capital Services

11,490

2.0%

9,957

1.7%

Total

$

187,940

7.0%

$

246,798

7.9%

⁽¹⁾   New awards represent the value of new project commitments received by the Company during a given period, as well as scope growth on existing commitments.

Chicago Bridge & Iron Company N.V.

Consolidated Statements of Operations

(in thousands, except per share data)

Three Months

Ended March 31,

2016

2015

Revenue

$

2,667,733

$

3,125,745

Cost of revenue

2,380,128

2,755,574

Gross profit

287,605

370,171

% of Revenue

10.8

%

11.8

%

Selling and administrative expense

92,597

109,101

% of Revenue

3.5

%

3.5

%

Intangibles amortization

11,277

15,652

Equity earnings

(3,990)

(4,202)

Other operating (income) expense, net

(219)

2,822

Income from operations

187,940

246,798

% of Revenue

7.0

%

7.9

%

Interest expense

(25,898)

(22,286)

Interest income

2,489

2,048

Income before taxes

164,531

226,560

Income tax expense

(44,569)

(69,811)

Net income

119,962

156,749

Less: Net income attributable to noncontrolling interests

(13,037)

(24,521)

Net income attributable to CB&I

$

106,925

$

132,228

Net income attributable to CB&I per share:

Basic

$

1.02

$

1.22

Diluted

$

1.01

$

1.21

Weighted average shares outstanding:

Basic

104,803

108,197

Diluted

105,785

109,261

Cash dividends on shares:

Amount

$

7,359

$

7,597

Per share

$

0.07

$

0.07

Chicago Bridge & Iron Company N.V.

Condensed Consolidated Balance Sheets

(in thousands)

March 31,

December 31,

2016

2015

ASSETS

Current assets

$

3,688,030

$

3,367,299

Equity investments

137,895

136,845

Property and equipment, net

593,064

604,043

Goodwill and other intangibles, net

4,119,851

4,122,455

Other non-current assets

941,863

961,418

Total assets

$

9,480,703

$

9,192,060

LIABILITIES AND SHAREHOLDERS' EQUITY

Current maturities of long-term debt and other borrowings, net

$

980,671

$

800,871

Other current liabilities

4,333,739

4,056,077

Long-term debt, net

1,492,365

1,791,832

Other non-current liabilities

388,594

379,690

Shareholders' equity

2,285,334

2,163,590

Total liabilities and shareholders' equity

$

9,480,703

$

9,192,060

Condensed Consolidated Statements of Cash Flows and Other Financial Data

(in thousands)

Three Months

Ended March 31,

2016

2015

CASH FLOWS

Cash flows from operating activities

$

141,850

$

(289,871)

Cash flows from investing activities

(47,499)

(56,879)

Cash flows from financing activities

(11,392)

403,409

Effect of exchange rate changes on cash and cash equivalents

8,305

(60,965)

Increase (decrease) in cash and cash equivalents

91,264

Cash and cash equivalents, beginning of the year

550,221

351,323

Cash and cash equivalents, end of the period

$

641,485

$

347,017

OTHER FINANCIAL DATA

Increase in receivables, net

$

(57,207)

$

(41,175)

Change in contracts in progress, net

58,361

(330,345)

Decrease in inventory

27,477

2,803

Decrease in accounts payable

(87,753)

(230,152)

Change in contract capital

$

(59,122)

$

(598,869)

Depreciation and amortization

$

31,801

$

44,309

Capital expenditures

$

11,180

$

8,978

March 31, 2016

December 31, 2015

Backlog ⁽¹⁾

$

21,163,059

$

22,643,939

⁽¹⁾     Backlog includes the value of new award commitments until work is performed and revenue is recognized or until cancellation. Backlog may also fluctuate with currency movements.

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Pro Forma Financial Data

(amounts adjusted to exclude the results of our nuclear operations and non-cash charges related to the disposition of our nuclear operations)

(in thousands, except per share data)

Three Months Ended March 31, 2015 ⁽¹⁾

As Reported

Disposition Charges

Removal of Divested Business

Excluding Divested Business

Revenue

$

3,125,745

$

—

$

(488,259)

$

2,637,486

Income from operations

$

246,798

$

—

$

(45,600)

$

201,198

Net income attributable to CB&I

$

132,228

$

—

$

(27,816)

$

104,412

Net income attributable to CB&I per share (diluted) ⁽²⁾

$

1.21

$

—

$

(0.25)

$

0.96

New Awards

$

3,031,183

$

—

$

(5,206)

$

3,025,977

Backlog

$

29,934,182

$

—

$

(8,193,792)

$

21,740,390

Operating Cash Flows

$

(289,871)

$

—

$

303,600

$

13,729

Three Months Ended June 30, 2015 ⁽¹⁾

As Reported

Disposition Charges

Removal of Divested Business

Excluding Divested Business

Revenue

$

3,207,113

$

—

$

(564,327)

$

2,642,786

Income from operations

$

284,107

$

—

$

(71,800)

$

212,307

Net income attributable to CB&I

$

169,515

$

—

$

(43,798)

$

125,717

Net income attributable to CB&I per share (diluted) ⁽²⁾

$

1.55

$

—

$

(0.40)

$

1.15

New Awards

$

2,844,516

$

—

$

(574,719)

$

2,269,797

Backlog

$

29,432,933

$

—

$

(8,204,184)

$

21,228,749

Operating Cash Flows

$

95,167

$

—

$

271,200

$

366,367

Three Months Ended September 30, 2015 ⁽¹⁾

As Reported

Disposition Charges

Removal of Divested Business

Excluding Divested Business

Revenue

$

3,321,682

$

—

$

(502,922)

$

2,818,760

(Loss) income from operations

$

(889,962)

$

1,160,480

$

(45,715)

$

224,803

Net (loss) income attributable to CB&I

$

(740,433)

$

904,230

$

(27,886)

$

135,911

Net (loss) income attributable to CB&I per share (diluted)⁽³⁾

$

(7.02)

$

8.56

$

(0.26)

$

1.28

New Awards

$

4,000,302

$

—

$

(84,289)

$

3,916,013

Backlog

$

29,928,616

$

—

$

(7,785,551)

$

22,143,065

Operating Cash Flows

$

21,282

$

—

$

305,685

$

326,967

Three Months Ended December 31, 2015 ⁽¹⁾

As Reported

Disposition Charges

Removal of Divested Business

Excluding Divested Business

Revenue

$

3,274,964

$

—

$

(505,659)

$

2,769,305

(Loss) income from operations

$

(66,060)

$

345,371

$

(52,035)

$

227,276

Net (loss) income attributable to CB&I

$

(65,725)

$

230,910

$

(31,741)

$

133,444

Net (loss) income attributable to CB&I per share (diluted)⁽³⁾

$

(0.63)

$

2.19

$

(0.30)

$

1.26

New Awards

$

3,262,497

$

—

$

(8,151)

$

3,254,346

Backlog

$

22,643,939

$

—

$

—

$

22,643,939

Operating Cash Flows

$

117,208

$

—

$

252,865

$

370,073

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Pro Forma Financial Data

(amounts adjusted to exclude the results of our nuclear operations and non-cash charges related to the disposition of our nuclear operations)

(in thousands, except per share data)

Twelve Months Ended December 31, 2015 ⁽¹⁾

As Reported

Disposition Charges

Removal of Divested Business

Excluding Divested Business

Revenue

$

12,929,504

$

—

$

(2,061,167)

$

10,868,337

(Loss) income from operations

$

(425,117)

$

1,505,851

$

(215,150)

$

865,584

Net (loss) income attributable to CB&I

$

(504,415)

$

1,135,140

$

(131,241)

$

499,484

Net (loss) income attributable to CB&I per share (diluted)⁽³⁾

$

(4.72)

$

10.58

$

(1.22)

$

4.64

New Awards

$

13,138,498

$

—

$

(672,365)

$

12,466,133

Backlog

$

22,643,939

$

—

$

—

$

22,643,939

Operating Cash Flows

$

(56,214)

$

—

$

1,133,350

$

1,077,136

⁽¹⁾ 

The summary unaudited pro forma financial information presented in the tables above is for illustrative purposes only and is based on assumptions and estimates considered appropriate by CB&I management; however, it is not necessarily indicative of what CB&I's consolidated financial position or results of operations actually would have been assuming the transaction was completed on January 1, 2015, and does not purport to represent CB&I's consolidated financial position or results of operations for future periods. The above should be read together with the historical financial statements, including the related notes thereto, included in CB&I's Annual Report on Form 10-K for the year ended December 31, 2015, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015, June 30, 2015, and September 30, 2015.

⁽²⁾  

The unadjusted and adjusted per share amounts for the three months ended March 31, 2015, and June 30, 2015, are based upon diluted weighted average shares of 109,261 and 109,533, respectively.

⁽³⁾  

The unadjusted per share amounts for the three months ended September 30, 2015, and December 31, 2015, and twelve months ended December 31, 2015, are based upon diluted weighted average shares that are equivalent to our basic weighted average shares of 105,454, 104,763 and 106,766, respectively, due to the net loss for the periods, and the adjusted per share amounts are based upon diluted weighted average shares of 106,322,105,926 and 107,719, respectively.

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Pro Forma Segment Information

(amounts adjusted to exclude the results of our nuclear operations and non-cash charges related to the disposition of our nuclear operations)

(in thousands)

Three Months Ended

Twelve Months Ended

March 31, 2015 ⁽¹⁾

June 30, 2015 ⁽¹⁾

September 30, 2015 ⁽¹⁾

December 31, 2015 ⁽¹⁾

December 31, 2015 ⁽¹⁾

NEW AWARDS

% of

% of

% of

% of

% of

Total

Total

Total

Total

Total

Engineering & Construction

$

1,204,201

40%

$

731,232

32%

$

2,323,546

60%

$

1,778,520

55%

$

6,037,499

48%

Fabrication Services

927,374

31%

844,715

37%

840,658

21%

493,816

15%

3,106,563

25%

Technology

77,022

2%

81,087

4%

97,539

2%

321,892

10%

577,540

5%

Capital Services

817,380

27%

612,763

27%

654,270

17%

660,118

20%

2,744,531

22%

Total

$

3,025,977

$

2,269,797

$

3,916,013

$

3,254,346

$

12,466,133

REVENUE

% of

% of

% of

% of

% of

Total

Total

Total

Total

Total

Engineering & Construction

$

1,330,327

50%

$

1,351,795

51%

$

1,443,504

51%

$

1,510,891

55%

$

5,636,517

52%

Fabrication Services

637,809

24%

611,330

23%

640,201

23%

553,350

20%

2,442,690

22%

Technology

99,361

4%

92,975

4%

118,269

4%

88,494

3%

399,099

4%

Capital Services

569,989

22%

586,686

22%

616,786

22%

616,570

22%

2,390,031

22%

Total

$

2,637,486

$

2,642,786

$

2,818,760

$

2,769,305

$

10,868,337

INCOME FROM OPERATIONS

% of

% of

% of

% of

% of

Revenue

Revenue

Revenue

Revenue

Revenue

Engineering & Construction

$

90,818

6.8%

$

104,667

7.7%

$

107,411

7.4%

$

112,484

7.4%

$

415,380

7.4%

Fabrication Services

52,399

8.2%

55,937

9.2%

61,408

9.6%

55,523

10.0%

225,267

9.2%

Technology

48,024

48.3%

36,741

39.5%

31,911

27.0%

34,201

38.6%

150,877

37.8%

Capital Services

9,957

1.7%

14,962

2.6%

24,073

3.9%

25,068

4.1%

74,060

3.1%

Total

$

201,198

7.6%

$

212,307

8.0%

$

224,803

8.0%

$

227,276

8.2%

$

865,584

8.0%

⁽¹⁾  

The summary unaudited pro forma financial information reflects the removal of the results of our nuclear power construction business sold on December 31, 2015, and reflects the removal of the related disposition charges incurred as a result of the sale, as quantified below. The information presented in the tables above is for illustrative purposes only. The exclusion of our nuclear power construction business and the $1,160,480 and $345,371 of charges related to the disposition of our nuclear operations for the three months ended September 30, 2015, and December 31, 2015, respectively, are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. See "Reconciliation of Non-GAAP Supplemental Pro Forma Segment Information to GAAP Information" table.

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Supplemental Pro Forma Segment Information to GAAP Information

(in thousands)

Three Months Ended

Twelve Months Ended

March 31, 2015

June 30, 2015

September 30, 2015

December 31, 2015

December 31, 2015

NEW AWARDS

Engineering & Construction

Excluding Nuclear Operations

$

1,204,201

$

731,232

$

2,323,546

$

1,778,520

$

6,037,499

Nuclear Operations

5,206

574,719

84,289

8,151

672,365

Total

$

1,209,407

$

1,305,951

$

2,407,835

$

1,786,671

$

6,709,864

CB&I

Excluding Nuclear Operations

$

3,025,977

$

2,269,797

$

3,916,013

$

3,254,346

$

12,466,133

Nuclear Operations

5,206

574,719

84,289

8,151

672,365

Total

$

3,031,183

$

2,844,516

$

4,000,302

$

3,262,497

$

13,138,498

REVENUE

Engineering & Construction

Excluding Nuclear Operations

$

1,330,327

$

1,351,795

$

1,443,504

$

1,510,891

$

5,636,517

Nuclear Operations

488,259

564,327

502,922

505,659

2,061,167

Total

$

1,818,586

$

1,916,122

$

1,946,426

$

2,016,550

$

7,697,684

CB&I