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FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
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Three Months Ended March 31,
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||||||
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2015
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2014
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||||
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(Unaudited)
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||||||
Revenue
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$
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3,125,745
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$
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2,928,132
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Cost of revenue
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2,755,574
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2,626,730
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Gross profit
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370,171
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301,402
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Selling and administrative expense
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109,101
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119,167
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Intangibles amortization
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15,652
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16,234
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Equity earnings
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(4,202
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)
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(4,165
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)
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Other operating expense (income), net
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2,822
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(384
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)
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Integration related costs
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—
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8,067
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Income from operations
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246,798
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162,483
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Interest expense
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(22,286
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)
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(18,887
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)
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Interest income
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2,048
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2,060
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Income before taxes
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226,560
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145,656
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Income tax expense
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(69,811
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)
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(42,910
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)
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Net income
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156,749
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102,746
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Less: Net income attributable to noncontrolling interests
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(24,521
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)
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(13,795
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)
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Net income attributable to CB&I
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$
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132,228
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$
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88,951
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Net income attributable to CB&I per share:
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Basic
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$
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1.22
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$
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0.83
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Diluted
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$
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1.21
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$
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0.82
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Weighted average shares outstanding:
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Basic
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108,197
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107,677
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Diluted
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109,261
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109,113
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Cash dividends on shares:
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Amount
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$
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7,597
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$
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7,559
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Per share
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$
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0.07
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$
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0.07
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Three Months Ended March 31,
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||||||
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2015
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2014
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||||
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(Unaudited)
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||||||
Net income
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$
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156,749
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$
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102,746
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Other comprehensive income (loss), net of tax:
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Change in cumulative translation adjustment
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(60,434
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)
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5,531
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Change in unrealized fair value of cash flow hedges
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(724
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)
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(990
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)
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Change in unrecognized prior service pension credits/costs
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(536
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)
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(43
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)
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Change in unrecognized actuarial pension gains/losses
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14,618
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1,795
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Comprehensive income
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109,673
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109,039
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Net income attributable to noncontrolling interests
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(24,521
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)
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(13,795
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)
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Change in cumulative translation adjustment attributable to noncontrolling interests
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1,338
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(1,651
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)
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Comprehensive income attributable to CB&I
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$
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86,490
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$
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93,593
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March 31,
2015 |
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December 31,
2014 |
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(Unaudited)
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Assets
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Cash and cash equivalents ($193,065 and $191,464 related to variable interest entities ("VIEs"))
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$
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347,017
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$
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351,323
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Accounts receivable, net ($287,809 and $235,018 related to VIEs)
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1,347,742
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1,306,567
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Inventory
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283,352
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286,155
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Costs and estimated earnings in excess of billings ($34,179 and $29,677 related to VIEs)
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1,114,570
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774,644
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Deferred income taxes
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542,234
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572,987
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Other current assets ($131,258 and $104,447 related to VIEs)
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263,295
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238,783
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Total current assets
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3,898,210
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3,530,459
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Equity investments
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137,379
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107,984
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Property and equipment, net ($21,159 and $21,868 related to VIEs)
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750,563
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771,651
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Deferred income taxes
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81,636
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89,196
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Goodwill
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4,169,756
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4,195,231
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Other intangibles, net
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531,628
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556,454
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Other non-current assets
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149,069
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130,056
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Total assets
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$
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9,718,241
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$
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9,381,031
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Liabilities
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Revolving facility and other short-term borrowings
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$
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630,740
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$
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164,741
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Current maturities of long-term debt
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118,546
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105,997
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Accounts payable ($185,683 and $279,597 related to VIEs)
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1,026,702
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1,256,854
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Other current liabilities
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810,866
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804,294
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Billings in excess of costs and estimated earnings ($437,243 and $282,351 related to VIEs)
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1,995,069
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1,985,488
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Deferred income taxes
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5,612
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4,856
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Total current liabilities
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4,587,535
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4,322,230
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Long-term debt
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1,525,128
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1,564,158
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Other non-current liabilities
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431,333
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450,626
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Deferred income taxes
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188,239
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167,714
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Total liabilities
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6,732,235
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6,504,728
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Shareholders’ Equity
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Common stock, Euro .01 par value; shares authorized: 250,000; shares issued: 108,607 and 108,407; shares outstanding: 108,551 and 107,806
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1,285
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1,283
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Additional paid-in capital
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773,157
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776,864
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Retained earnings
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2,371,401
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2,246,770
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|
||
Treasury stock, at cost: 56 and 601 shares
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(2,469
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)
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|
(24,428
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)
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||
Accumulated other comprehensive loss
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(308,135
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)
|
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(262,397
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)
|
||
Total CB&I shareholders’ equity
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2,835,239
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|
|
2,738,092
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||
Noncontrolling interests
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150,767
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|
|
138,211
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|
||
Total shareholders’ equity
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2,986,006
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|
|
2,876,303
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|
||
Total liabilities and shareholders’ equity
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$
|
9,718,241
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|
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$
|
9,381,031
|
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Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(Unaudited)
|
||||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income
|
$
|
156,749
|
|
|
$
|
102,746
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
44,309
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|
|
45,625
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|
||
Deferred taxes
|
51,063
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|
|
6,616
|
|
||
Stock-based compensation expense
|
31,193
|
|
|
41,142
|
|
||
Equity earnings
|
(4,202
|
)
|
|
(4,165
|
)
|
||
Other operating expense (income), net
|
2,822
|
|
|
(384
|
)
|
||
Unrealized loss on foreign currency hedge ineffectiveness
|
5,103
|
|
|
2,865
|
|
||
Excess tax benefits from stock-based compensation
|
(202
|
)
|
|
(12,930
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
(Increase) decrease in receivables, net
|
(41,175
|
)
|
|
111,885
|
|
||
Change in contracts in progress, net
|
(330,345
|
)
|
|
(422,510
|
)
|
||
Decrease in inventory
|
2,803
|
|
|
10,968
|
|
||
Decrease in accounts payable
|
(230,152
|
)
|
|
(838
|
)
|
||
Increase in other current and non-current assets
|
(3,357
|
)
|
|
(20,401
|
)
|
||
Decrease in other current and non-current liabilities
|
(18,090
|
)
|
|
(11,923
|
)
|
||
Decrease in equity investments
|
16,807
|
|
|
15,237
|
|
||
Change in other, net
|
26,803
|
|
|
(9,685
|
)
|
||
Net cash used in operating activities
|
(289,871
|
)
|
|
(145,752
|
)
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Capital expenditures
|
(28,978
|
)
|
|
(26,485
|
)
|
||
Advances to partners of proportionately consolidated ventures, net
|
(27,800
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
1,413
|
|
|
4,459
|
|
||
Change in other, net
|
(1,514
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(56,879
|
)
|
|
(22,026
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Revolving facility and other short-term borrowings, net
|
465,999
|
|
|
219,754
|
|
||
Repayments of advances to proportionately consolidated ventures, net
|
(9,700
|
)
|
|
—
|
|
||
Repayments on long-term debt
|
(26,481
|
)
|
|
(25,000
|
)
|
||
Excess tax benefits from stock-based compensation
|
202
|
|
|
12,930
|
|
||
Purchase of treasury stock
|
(13,461
|
)
|
|
(54,946
|
)
|
||
Issuance of stock
|
5,074
|
|
|
11,586
|
|
||
Dividends paid
|
(7,597
|
)
|
|
(7,559
|
)
|
||
Distributions to noncontrolling interests
|
(10,627
|
)
|
|
(4,515
|
)
|
||
Net cash provided by financing activities
|
403,409
|
|
|
152,250
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(60,965
|
)
|
|
15,189
|
|
||
Decrease in cash and cash equivalents
|
(4,306
|
)
|
|
(339
|
)
|
||
Cash and cash equivalents, beginning of the year
|
351,323
|
|
|
420,502
|
|
||
Cash and cash equivalents, end of the period
|
$
|
347,017
|
|
|
$
|
420,163
|
|
|
Common Stock
|
|
Additional
Paid-In
|
|
Retained
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
|
|
Non -
controlling
|
|
Total
Shareholders’
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
(Loss) Income
|
|
Interests
|
|
Equity
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2014
|
107,806
|
|
|
$
|
1,283
|
|
|
$
|
776,864
|
|
|
$
|
2,246,770
|
|
|
601
|
|
|
$
|
(24,428
|
)
|
|
$
|
(262,397
|
)
|
|
$
|
138,211
|
|
|
$
|
2,876,303
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
132,228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,521
|
|
|
156,749
|
|
|||||||
Change in cumulative translation adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,096
|
)
|
|
(1,338
|
)
|
|
(60,434
|
)
|
|||||||
Change in unrealized fair value of cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(724
|
)
|
|
—
|
|
|
(724
|
)
|
|||||||
Change in unrecognized prior service pension credits/costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(536
|
)
|
|
—
|
|
|
(536
|
)
|
|||||||
Change in unrecognized actuarial pension gains/losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,618
|
|
|
—
|
|
|
14,618
|
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,627
|
)
|
|
(10,627
|
)
|
|||||||
Dividends paid ($0.07 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,597
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,597
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
31,193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,193
|
|
|||||||
Issuance to treasury stock
|
—
|
|
|
2
|
|
|
8,164
|
|
|
—
|
|
|
200
|
|
|
(8,166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury stock
|
(330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
330
|
|
|
(13,461
|
)
|
|
—
|
|
|
—
|
|
|
(13,461
|
)
|
|||||||
Issuance of stock
|
1,075
|
|
|
—
|
|
|
(43,064
|
)
|
|
—
|
|
|
(1,075
|
)
|
|
43,586
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|||||||
Balance at March 31, 2015
|
108,551
|
|
|
$
|
1,285
|
|
|
$
|
773,157
|
|
|
$
|
2,371,401
|
|
|
56
|
|
|
$
|
(2,469
|
)
|
|
$
|
(308,135
|
)
|
|
$
|
150,767
|
|
|
$
|
2,986,006
|
|
|
Common Stock
|
|
Additional
Paid-In
|
|
Retained
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
|
|
Non -
controlling
|
|
Total
Shareholders’
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
(Loss) Income
|
|
Interests
|
|
Equity
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2013
|
107,478
|
|
|
$
|
1,275
|
|
|
$
|
753,742
|
|
|
$
|
1,733,409
|
|
|
379
|
|
|
$
|
(23,914
|
)
|
|
$
|
(119,933
|
)
|
|
$
|
162,859
|
|
|
$
|
2,507,438
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
88,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,795
|
|
|
102,746
|
|
|||||||
Change in cumulative translation adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,880
|
|
|
1,651
|
|
|
5,531
|
|
|||||||
Change in unrealized fair value of cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(990
|
)
|
|
—
|
|
|
(990
|
)
|
|||||||
Change in unrecognized prior service pension credits/costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||||
Change in unrecognized actuarial pension gains/losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,795
|
|
|
—
|
|
|
1,795
|
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,515
|
)
|
|
(4,515
|
)
|
|||||||
Dividends paid ($0.07 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,559
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,559
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
41,142
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,142
|
|
|||||||
Issuance to treasury stock
|
—
|
|
|
4
|
|
|
22,091
|
|
|
—
|
|
|
275
|
|
|
(22,095
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury stock
|
(716
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
716
|
|
|
(54,946
|
)
|
|
—
|
|
|
—
|
|
|
(54,946
|
)
|
|||||||
Issuance of stock
|
1,278
|
|
|
—
|
|
|
(68,808
|
)
|
|
—
|
|
|
(1,278
|
)
|
|
93,327
|
|
|
—
|
|
|
—
|
|
|
24,519
|
|
|||||||
Balance at March 31, 2014
|
108,040
|
|
|
$
|
1,279
|
|
|
$
|
748,167
|
|
|
$
|
1,814,801
|
|
|
92
|
|
|
$
|
(7,628
|
)
|
|
$
|
(115,291
|
)
|
|
$
|
173,790
|
|
|
$
|
2,615,118
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Costs and estimated earnings on contracts in progress
|
|
$
|
20,203,193
|
|
|
$
|
25,900,071
|
|
|
$
|
20,119,444
|
|
|
$
|
26,052,767
|
|
Billings on contracts in progress
|
|
(19,088,623
|
)
|
|
(27,368,339
|
)
|
|
(19,344,800
|
)
|
|
(27,479,495
|
)
|
||||
Margin fair value liability for acquired contracts
(1)
|
|
—
|
|
|
(526,801
|
)
|
|
—
|
|
|
(558,760
|
)
|
||||
Contracts in Progress, net
|
|
$
|
1,114,570
|
|
|
$
|
(1,995,069
|
)
|
|
$
|
774,644
|
|
|
$
|
(1,985,488
|
)
|
(1)
|
The balance represents a margin fair value liability associated with long-term contracts acquired in connection with our acquisition of The Shaw Group Inc. on February 13, 2013 (the "Acquisition Closing Date"). The margin fair value liability was approximately
$745,500
at the Acquisition Closing Date and is recognized as revenue on a POC basis as the applicable projects progress. We anticipate the remaining liability will be recognized as revenue over the next
five
to
six
years. Revenue and the related income from operations recognized during the
three months ended March 31, 2015
and
2014
was approximately
$32,000
and
$27,500
, respectively.
|
•
|
Engineering, Construction & Maintenance -
Our Engineering, Construction & Maintenance operating group included
three
reporting units: Oil & Gas, Power and Plant Services.
|
•
|
Fabrication Services -
Our Fabrication Services operating group included
two
reporting units: Steel Plate Structures and Fabrication & Manufacturing.
|
•
|
Technology -
Our Technology operating group represented a reporting unit.
|
•
|
Environmental Solutions -
Our Environmental Solutions operating group represented a reporting unit.
|
•
|
Engineering & Construction (formerly Engineering, Construction & Maintenance) -
Our Engineering & Construction operating group includes
two
reporting units: Oil & Gas and Power. Our Plant Services reporting unit was reclassified to our realigned Capital Services operating group, as noted below.
|
•
|
Fabrication Services -
Our Fabrication Services operating group includes
three
reporting units: Steel Plate Structures, Fabrication & Manufacturing, and Engineered Products. Our Engineered Products reporting unit represents a portion of our previous Technology reporting unit.
|
•
|
Technology -
Our Technology operating group continues to represent a reporting unit, consisting of the remaining portion of our previous Technology reporting unit, after reclassification of the Engineered Products reporting unit to Fabrication Services, as noted above.
|
•
|
Capital Services
(formerly Environmental Solutions)
- Our Capital Services operating group includes
two
reporting units: Facilities & Plant Services and Federal Services. Our Facilities & Plant Services reporting unit represents our previous Plant Services reporting unit and a portion of our previous Environmental Solutions reporting unit. Our Federal Services reporting unit represents the remaining portion of our previous Environmental Solutions reporting unit.
|
•
|
Foreign Currency Exchange Rate Derivatives
—We do not engage in currency speculation; however, we utilize foreign currency exchange rate derivatives on an ongoing basis to hedge against certain foreign currency-related operating exposures. We generally seek hedge accounting treatment for contracts used to hedge operating exposures and designate them as cash flow hedges. Therefore, gains and losses, exclusive of credit risk and forward points (which represent the time-value component of the fair value of our derivative positions), are included in AOCI until the associated underlying operating exposure impacts our earnings. Changes in the fair value of (1) credit risk and forward
|
•
|
Interest Rate Derivatives
—At
March 31, 2015
, we continued to utilize a swap arrangement to hedge against interest rate variability associated with
$404,000
of our outstanding
$800,000
unsecured term loan (the “Term Loan”). The swap arrangement has been designated as a cash flow hedge as its critical terms matched those of the Term Loan at inception and through
March 31, 2015
. Accordingly, changes in the fair value of the swap arrangement are included in AOCI until the associated underlying exposure impacts our earnings.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income attributable to CB&I
|
|
$
|
132,228
|
|
|
$
|
88,951
|
|
Weighted average shares outstanding—basic
|
|
108,197
|
|
|
107,677
|
|
||
Effect of restricted shares/performance shares/stock options
(1)
|
|
1,054
|
|
|
1,367
|
|
||
Effect of directors’ deferred-fee shares
|
|
10
|
|
|
69
|
|
||
Weighted average shares outstanding—diluted
|
|
109,261
|
|
|
109,113
|
|
||
Net income attributable to CB&I per share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.22
|
|
|
$
|
0.83
|
|
Diluted
|
|
$
|
1.21
|
|
|
$
|
0.82
|
|
(1)
|
Antidilutive shares excluded from diluted EPS were not material for the three months ended
March 31, 2015
or
2014
.
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Raw materials
|
$
|
159,939
|
|
|
$
|
162,451
|
|
Work in process
|
41,216
|
|
|
38,232
|
|
||
Finished goods
|
82,197
|
|
|
85,472
|
|
||
Total
|
$
|
283,352
|
|
|
$
|
286,155
|
|
|
|
Total
|
||
Balance at December 31, 2014
|
|
$
|
4,195,231
|
|
Foreign currency translation
|
|
(24,290
|
)
|
|
Amortization of tax goodwill in excess of book goodwill
|
|
(1,185
|
)
|
|
Balance at March 31, 2015
|
|
$
|
4,169,756
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
Weighted Average Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Backlog and customer relationships
(1)
|
|
17 years
|
|
$
|
369,572
|
|
|
$
|
(69,067
|
)
|
|
$
|
380,586
|
|
|
$
|
(71,257
|
)
|
Process technologies
|
|
15 years
|
|
270,364
|
|
|
(101,970
|
)
|
|
287,459
|
|
|
(105,646
|
)
|
||||
Tradenames
|
|
10 years
|
|
85,256
|
|
|
(22,527
|
)
|
|
85,613
|
|
|
(20,301
|
)
|
||||
Total
(2)
|
|
16 years
|
|
$
|
725,192
|
|
|
$
|
(193,564
|
)
|
|
$
|
753,658
|
|
|
$
|
(197,204
|
)
|
(1)
|
Backlog and customer relationships intangibles totaling approximately
$11,000
became fully amortized during the
three months ended March 31, 2015
and were therefore removed from the gross carrying and accumulated amortization balances above.
|
(2)
|
The decrease in other intangible assets during the
three months ended March 31, 2015
primarily related to amortization expense (
$15,652
) and the impact of foreign currency translation.
|
•
|
CB&I/Zachry—
We have a venture with Zachry (CB&I—
50%
/ Zachry—
50%
) to perform EPC work for
two
liquefied natural gas (“LNG”) liquefaction trains in Freeport, Texas. Our proportionate share of the venture project value is approximately
$2,600,000
. In addition, we have subcontract and risk sharing arrangements with Chiyoda to support our responsibilities to the venture. The costs of these arrangements are recorded in cost of revenue.
|
•
|
CB&I/Zachry/Chiyoda—
We have a venture with Zachry and Chiyoda (CB&I—
33.3%
/ Zachry—
33.3%
/ Chiyoda—
33.3%
) to perform EPC work for an additional LNG liquefaction train at the aforementioned project site in Freeport, Texas. Our proportionate share of the venture project value is approximately
$675,000
.
|
•
|
CB&I/Chiyoda—
We have a venture with Chiyoda (CB&I—
50%
/ Chiyoda—
50%
) to perform EPC work for
three
LNG liquefaction trains in Hackberry, Louisiana. Our proportionate share of the venture project value is approximately
$3,100,000
.
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
|
|
|
||||||
CB&I/Zachry
|
|
|
|
|
||||
Current assets
(1)
|
|
$
|
128,885
|
|
|
$
|
85,484
|
|
Current liabilities
|
|
$
|
177,750
|
|
|
$
|
149,891
|
|
CB&I/Chiyoda
|
|
|
|
|
||||
Current assets
(1)
|
|
$
|
163,875
|
|
|
$
|
102,035
|
|
Current liabilities
|
|
$
|
172,922
|
|
|
$
|
124,367
|
|
(1)
|
Our venture arrangements allow for excess working capital of the ventures to be advanced to the venture partners. Such advances are returned to the venture for working capital needs as necessary. Accordingly, at a reporting period end a venture may have advances to its partners which are reflected as an advance receivable within current assets of the venture. At
March 31, 2015
and
December 31, 2014
, other current assets on the Balance Sheet included approximately
$99,000
and
$71,200
, respectively, related to our proportionate share of advances from the CB&I/Zachry and CB&I/Chiyoda ventures to our venture partners. In addition, at
March 31, 2015
and
December 31, 2014
other current liabilities on the Balance Sheet included approximately
$99,000
and
$108,700
, respectively, related to advances to CB&I from the CB&I/Zachry and CB&I/Chiyoda ventures.
|
•
|
Chevron-Lummus Global (
“
CLG
”
)—
We have a venture with Chevron (CB&I—
50%
/ Chevron—
50%
), which provides licenses, engineering services and catalyst, primarily for the refining industry. As sufficient capital investments in CLG have been made by the venture partners, it does not qualify as a VIE. Additionally, we do not effectively control CLG and therefore do not consolidate the venture.
|
•
|
NET Power LLC (“NET Power”)—
We have a venture with Exelon and 8 Rivers Capital (CB&I—
33.3%
/ Exelon—
33.3%
/ 8 Rivers Capital—
33.3%
), which was formed for the purpose of developing, commercializing and monetizing a new natural gas power system that produces zero atmospheric emissions, including carbon dioxide. NET Power is building a first-of-its-kind demonstration plant which will be funded by contributions and services from the venture partners and other parties. Our cash commitment for NET Power totals
$47,300
and at
March 31, 2015
, we had made cumulative investments of approximately
$13,100
.
|
•
|
CB&I/Kentz—
We have a venture with Kentz (CB&I—
65%
/ Kentz—
35%
) to perform the structural, mechanical, piping, electrical and instrumentation work on, and to provide commissioning support for,
three
LNG trains, including associated utilities and a gas processing and compression plant, for the Gorgon LNG project, located on Barrow Island, Australia. Our venture project value is approximately
$5,000,000
.
|
•
|
CB&I/AREVA—
We have a venture with AREVA (CB&I
—
52%
/ AREVA—
48%
) to design, license and construct a mixed oxide fuel fabrication facility in Aiken, South Carolina, which will be used to convert weapons-grade plutonium into fuel for nuclear power plants for the U.S. Department of Energy. Our venture project value is approximately
$5,100,000
.
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
CBI/Kentz
|
|
|
|
|
||||
Current assets
|
|
$
|
230,154
|
|
|
$
|
220,930
|
|
Current liabilities
|
|
$
|
203,191
|
|
|
$
|
196,277
|
|
CBI/AREVA
|
|
|
|
|
||||
Current assets
|
|
$
|
24,097
|
|
|
$
|
27,006
|
|
Current liabilities
|
|
$
|
66,871
|
|
|
$
|
73,124
|
|
All Other
(1)
|
|
|
|
|
||||
Current assets
|
|
$
|
116,915
|
|
|
$
|
130,458
|
|
Non-current assets
|
|
$
|
21,309
|
|
|
$
|
22,045
|
|
Total assets
|
|
$
|
138,224
|
|
|
$
|
152,503
|
|
Current liabilities
|
|
$
|
38,743
|
|
|
$
|
36,534
|
|
(1)
|
Other ventures that we consolidate due to their designation as VIEs are not individually material to our financial results and are therefore aggregated as “All Other”.
|
Balance at December 31, 2014
|
|
$
|
14,354
|
|
Charges
|
|
—
|
|
|
Cash payments
|
|
(3,446
|
)
|
|
Balance at March 31, 2015
|
|
$
|
10,908
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2015
|
|
2014
|
||||
Current
|
|
|
|
|
||||
Revolving facility and other short-term borrowings
|
|
$
|
630,740
|
|
|
$
|
164,741
|
|
Current maturities of long-term debt
|
|
118,546
|
|
|
105,997
|
|
||
Current debt
|
|
$
|
749,286
|
|
|
$
|
270,738
|
|
Long-Term
|
|
|
|
|
||||
Term Loan: $1,000,000 term loan (interest at LIBOR plus an applicable floating margin)
|
|
$
|
800,000
|
|
|
$
|
825,000
|
|
Senior Notes: $800,000 senior notes, series A-D (fixed interest ranging from 4.15% to 5.30%)
|
|
800,000
|
|
|
800,000
|
|
||
Other long-term debt
|
|
43,674
|
|
|
45,155
|
|
||
Less: current maturities of long-term debt
|
|
(118,546
|
)
|
|
(105,997
|
)
|
||
Long-term debt
|
|
$
|
1,525,128
|
|
|
$
|
1,564,158
|
|
•
|
Series A—Interest due semi-annually at a fixed rate of
4.15%
, with principal of
$150,000
due in December 2017
|
•
|
Series B—Interest due semi-annually at a fixed rate of
4.57%
, with principal of
$225,000
due in December 2019
|
•
|
Series C—Interest due semi-annually at a fixed rate of
5.15%
, with principal of
$275,000
due in December 2022
|
•
|
Series D—Interest due semi-annually at a fixed rate of
5.30%
, with principal of
$150,000
due in December 2024
|
•
|
Level 1
—Fair value is based upon quoted prices in active markets.
|
•
|
Level 2
—Fair value is based upon internally-developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within Level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based upon current market expectations and adjusts for credit risk.
|
•
|
Level 3
—Fair value is based upon internally-developed models that use, as their basis, significant unobservable market parameters. We did not have any Level 3 classifications at
March 31, 2015
or
December 31, 2014
.
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current assets
|
—
|
|
|
4,317
|
|
|
—
|
|
|
4,317
|
|
|
—
|
|
|
852
|
|
|
—
|
|
|
852
|
|
||||||||
Other non-current assets
|
—
|
|
|
1,544
|
|
|
—
|
|
|
1,544
|
|
|
—
|
|
|
2,248
|
|
|
—
|
|
|
2,248
|
|
||||||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
5,861
|
|
|
$
|
—
|
|
|
$
|
5,861
|
|
|
$
|
—
|
|
|
$
|
3,100
|
|
|
$
|
—
|
|
|
$
|
3,100
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current liabilities
|
$
|
—
|
|
|
$
|
(13,729
|
)
|
|
$
|
—
|
|
|
$
|
(13,729
|
)
|
|
$
|
—
|
|
|
$
|
(12,728
|
)
|
|
$
|
—
|
|
|
$
|
(12,728
|
)
|
Other non-current liabilities
|
—
|
|
|
(3,141
|
)
|
|
—
|
|
|
(3,141
|
)
|
|
—
|
|
|
(1,873
|
)
|
|
—
|
|
|
(1,873
|
)
|
||||||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
(16,870
|
)
|
|
$
|
—
|
|
|
$
|
(16,870
|
)
|
|
$
|
—
|
|
|
$
|
(14,601
|
)
|
|
$
|
—
|
|
|
$
|
(14,601
|
)
|
(1)
|
We are exposed to credit risk on our hedging instruments associated with potential counterparty non-performance, and the fair value of our derivatives reflects this credit risk. The total level 2 assets at fair value above represent the maximum loss that we would incur on our outstanding hedges if the applicable counterparties failed to perform according to the hedge contracts. To help mitigate counterparty credit risk, we transact only with counterparties that are rated as investment grade or higher and monitor all counterparties on a continuous basis.
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||
|
Balance Sheet
Classification
|
|
March 31,
2015 |
|
December 31,
2014 |
|
Balance Sheet
Classification
|
|
March 31,
2015 |
|
December 31,
2014 |
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
Other current
and non-current
assets
|
|
$
|
909
|
|
|
$
|
2,258
|
|
|
Other current and
non-current
liabilities
|
|
$
|
(1,113
|
)
|
|
$
|
(1,229
|
)
|
Foreign currency
|
Other current
and non-current
assets
|
|
3,330
|
|
|
39
|
|
|
Other current and
non-current
liabilities
|
|
(4,687
|
)
|
|
(4,996
|
)
|
||||
|
|
|
$
|
4,239
|
|
|
$
|
2,297
|
|
|
|
|
$
|
(5,800
|
)
|
|
$
|
(6,225
|
)
|
Derivatives not designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
Other current
and non-current
assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other current and
non-current
liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency
|
Other current
and non-current
assets
|
|
1,622
|
|
|
803
|
|
|
Other current and
non-current
liabilities
|
|
(11,070
|
)
|
|
(8,376
|
)
|
||||
|
|
|
$
|
1,622
|
|
|
$
|
803
|
|
|
|
|
$
|
(11,070
|
)
|
|
$
|
(8,376
|
)
|
Total fair value
|
|
|
$
|
5,861
|
|
|
$
|
3,100
|
|
|
|
|
$
|
(16,870
|
)
|
|
$
|
(14,601
|
)
|
|
Gross
Amounts Recognized (i) |
|
Gross Amounts
Offset on the Balance Sheet (ii) |
|
Net Amounts
Presented on the Balance Sheet (iii) = (i) - (ii) |
|
Gross Amounts Not Offset on
the Balance Sheet (iv) |
|
Net Amount
(v) = (iii) - (iv) |
||||||||||||||
|
Financial
Instruments |
|
Cash
Collateral Received |
|
|||||||||||||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
$
|
909
|
|
|
$
|
—
|
|
|
$
|
909
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
909
|
|
Foreign currency
|
4,952
|
|
|
—
|
|
|
4,952
|
|
|
(11
|
)
|
|
—
|
|
|
4,941
|
|
||||||
Total assets
|
$
|
5,861
|
|
|
$
|
—
|
|
|
$
|
5,861
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
5,850
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
$
|
(1,113
|
)
|
|
—
|
|
|
$
|
(1,113
|
)
|
|
—
|
|
|
—
|
|
|
(1,113
|
)
|
||||
Foreign currency
|
(15,757
|
)
|
|
—
|
|
|
(15,757
|
)
|
|
11
|
|
|
—
|
|
|
(15,746
|
)
|
||||||
Total liabilities
|
$
|
(16,870
|
)
|
|
$
|
—
|
|
|
$
|
(16,870
|
)
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(16,859
|
)
|
|
Amount of Gain (Loss) on Effective
Derivative Portion
|
||||||||||||||
|
Recognized in
OCI
|
|
Reclassified from
AOCI into Earnings
(1)
|
||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
$
|
(1,708
|
)
|
|
$
|
(502
|
)
|
|
$
|
(474
|
)
|
|
$
|
(543
|
)
|
Foreign currency
|
(2,455
|
)
|
|
(66
|
)
|
|
(1,137
|
)
|
|
467
|
|
||||
Total
|
$
|
(4,163
|
)
|
|
$
|
(568
|
)
|
|
$
|
(1,611
|
)
|
|
$
|
(76
|
)
|
(1)
|
Net unrealized losses totaling
$4,444
are anticipated to be reclassified from AOCI into earnings during the next
12 months
due to settlement of the associated underlying obligations.
|
|
Amount of Gain (Loss)
Recognized in Earnings
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Derivatives not designated as cash flow hedges
|
|
|
|
||||
Foreign currency
|
$
|
(6,532
|
)
|
|
$
|
1,506
|
|
Total
|
$
|
(6,532
|
)
|
|
$
|
1,506
|
|
|
Pension Plans
|
|
Other Postretirement
Plans
|
||||
Contributions made through March 31, 2015
|
$
|
8,227
|
|
|
$
|
587
|
|
Contributions expected for the remainder of 2015
|
8,424
|
|
|
1,762
|
|
||
Total contributions expected for 2015
|
$
|
16,651
|
|
|
$
|
2,349
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Pension Plans
|
|
|
|
||||
Service cost
|
$
|
2,712
|
|
|
$
|
2,351
|
|
Interest cost
|
5,858
|
|
|
8,564
|
|
||
Expected return on plan assets
|
(7,137
|
)
|
|
(9,314
|
)
|
||
Amortization of prior service credits
|
(158
|
)
|
|
(120
|
)
|
||
Recognized net actuarial losses
|
1,934
|
|
|
1,181
|
|
||
Net periodic benefit cost
|
$
|
3,209
|
|
|
$
|
2,662
|
|
Other Postretirement Plans
|
|
|
|
||||
Service cost
|
$
|
295
|
|
|
$
|
259
|
|
Interest cost
|
529
|
|
|
570
|
|
||
Recognized net actuarial gains
|
(150
|
)
|
|
(216
|
)
|
||
Net periodic benefit cost
|
$
|
674
|
|
|
$
|
613
|
|
|
|
Three Months Ended March 31, 2015
|
||||||||||||||
|
|
Currency
Translation Adjustment (1) |
|
Unrealized
Fair Value Of Cash Flow Hedges |
|
Defined Benefit
Pension and Other Postretirement Plans |
|
Total
|
||||||||
Balance at December 31, 2014
|
|
$
|
(133,787
|
)
|
|
$
|
(2,713
|
)
|
|
$
|
(125,897
|
)
|
|
$
|
(262,397
|
)
|
OCI before reclassifications
|
|
(59,096
|
)
|
|
(1,901
|
)
|
|
12,826
|
|
|
(48,171
|
)
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
1,177
|
|
|
1,256
|
|
|
2,433
|
|
||||
Net OCI
|
|
(59,096
|
)
|
|
(724
|
)
|
|
14,082
|
|
|
(45,738
|
)
|
||||
Balance at March 31, 2015
|
|
$
|
(192,883
|
)
|
|
$
|
(3,437
|
)
|
|
$
|
(111,815
|
)
|
|
$
|
(308,135
|
)
|
(1)
|
During the
three months ended March 31, 2015
, the currency translation adjustment component of AOCI was unfavorably impacted primarily by movements in the
Australian Dollar, British Pound and Euro
exchange rates against the U.S. Dollar.
|
|
|
Amount Reclassified From AOCI
|
||
AOCI Components
|
|
|||
Unrealized Fair Value Of Cash Flow Hedges
(1)
|
|
|
||
Interest rate derivatives (interest expense)
|
|
$
|
474
|
|
Foreign currency derivatives (cost of revenue)
|
|
1,137
|
|
|
Total, before taxes
|
|
$
|
1,611
|
|
Taxes
|
|
(434
|
)
|
|
Total, net of taxes
|
|
$
|
1,177
|
|
Defined Benefit Pension and Other Postretirement Plans
(2)
|
|
|
||
Amortization of prior service credits
|
|
$
|
(158
|
)
|
Recognized net actuarial losses
|
|
1,784
|
|
|
Total, before taxes
|
|
$
|
1,626
|
|
Taxes
|
|
(370
|
)
|
|
Total, net of taxes
|
|
$
|
1,256
|
|
(1)
|
See
Note 9
for further discussion of our cash flow hedges, including the total value reclassified from AOCI to earnings.
|
(2)
|
See
Note 10
for further discussion of our defined benefit and other postretirement plans, including the components of net periodic benefit cost.
|
|
Shares
(1)
|
|
Weighted Average
Grant-Date Fair
Value Per Share
|
|||
RSUs
|
870
|
|
|
$
|
41.60
|
|
Performance shares
|
668
|
|
|
$
|
41.67
|
|
Total
|
1,538
|
|
|
|
(1)
|
No
stock options were granted during the
three months ended March 31, 2015
.
|
|
Shares
|
|
Performance shares (issued upon vesting)
|
554
|
|
RSUs (issued upon vesting)
|
376
|
|
Stock options (issued upon exercise)
|
16
|
|
ESPP shares (issued upon sale)
|
130
|
|
Total Shares Issued
|
1,076
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Revenue
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
1,818,586
|
|
|
$
|
1,686,181
|
|
Fabrication Services
|
|
637,809
|
|
|
671,911
|
|
||
Technology
|
|
99,361
|
|
|
102,573
|
|
||
Capital Services
|
|
569,989
|
|
|
467,467
|
|
||
Total revenue
|
|
$
|
3,125,745
|
|
|
$
|
2,928,132
|
|
Income From Operations
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
136,418
|
|
|
$
|
84,636
|
|
Fabrication Services
|
|
52,399
|
|
|
46,915
|
|
||
Technology
|
|
48,024
|
|
|
34,669
|
|
||
Capital Services
|
|
9,957
|
|
|
4,330
|
|
||
Total operating groups
|
|
246,798
|
|
|
170,550
|
|
||
Integration related costs
|
|
—
|
|
|
(8,067
|
)
|
||
Total income from operations
|
|
$
|
246,798
|
|
|
$
|
162,483
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
4,926,680
|
|
|
$
|
4,555,703
|
|
Fabrication Services
|
|
2,182,886
|
|
|
2,229,346
|
|
||
Technology
|
|
885,795
|
|
|
837,445
|
|
||
Capital Services
|
|
1,722,880
|
|
|
1,758,537
|
|
||
Total assets
|
|
$
|
9,718,241
|
|
|
$
|
9,381,031
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
(In thousands)
|
||||||||||
|
|
2015
|
|
% of
Total |
|
2014
|
|
% of
Total |
||||
New Awards
|
|
|
|
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
1,209,407
|
|
|
40%
|
|
$
|
4,494,837
|
|
|
78%
|
Fabrication Services
|
|
927,374
|
|
|
31%
|
|
516,729
|
|
|
9%
|
||
Technology
|
|
77,022
|
|
|
2%
|
|
77,446
|
|
|
1%
|
||
Capital Services
|
|
817,380
|
|
|
27%
|
|
708,477
|
|
|
12%
|
||
Total new awards
|
|
$
|
3,031,183
|
|
|
|
|
$
|
5,797,489
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
2015
|
|
% of
Total |
|
2014
|
|
% of
Total |
||||
Revenue
|
|
|
|
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
1,818,586
|
|
|
58%
|
|
$
|
1,686,181
|
|
|
58%
|
Fabrication Services
|
|
637,809
|
|
|
21%
|
|
671,911
|
|
|
23%
|
||
Technology
|
|
99,361
|
|
|
3%
|
|
102,573
|
|
|
3%
|
||
Capital Services
|
|
569,989
|
|
|
18%
|
|
467,467
|
|
|
16%
|
||
Total revenue
|
|
$
|
3,125,745
|
|
|
|
|
$
|
2,928,132
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
2015
|
|
% of
Revenue |
|
2014
|
|
% of
Revenue |
||||
Income From Operations
|
|
|
|
|
|
|
|
|
||||
Engineering & Construction
|
|
$
|
136,418
|
|
|
7.5%
|
|
$
|
84,636
|
|
|
5.0%
|
Fabrication Services
|
|
52,399
|
|
|
8.2%
|
|
46,915
|
|
|
7.0%
|
||
Technology
|
|
48,024
|
|
|
48.3%
|
|
34,669
|
|
|
33.8%
|
||
Capital Services
|
|
9,957
|
|
|
1.7%
|
|
4,330
|
|
|
0.9%
|
||
Total operating groups
|
|
246,798
|
|
|
7.9%
|
|
170,550
|
|
|
5.8%
|
||
Integration related costs
|
|
—
|
|
|
|
|
(8,067
|
)
|
|
|
||
Total income from operations
|
|
$
|
246,798
|
|
|
7.9%
|
|
$
|
162,483
|
|
|
5.5%
|
(In thousands)
|
March 31,
|
|
December 31,
|
|
|
||||||
|
2015
|
|
2014
|
|
Change
|
||||||
Billings in excess of costs and estimated earnings
(1)
|
$
|
(1,468,268
|
)
|
|
$
|
(1,426,728
|
)
|
|
$
|
(41,540
|
)
|
Margin fair value liability for acquired contracts
(2)
|
(526,801
|
)
|
|
(558,760
|
)
|
|
$
|
31,959
|
|
||
Total billings in excess of costs and estimated earnings
|
$
|
(1,995,069
|
)
|
|
$
|
(1,985,488
|
)
|
|
$
|
(9,581
|
)
|
Total costs and estimated earnings in excess of billings
(1)
|
1,114,570
|
|
|
774,644
|
|
|
339,926
|
|
|||
Contracts in progress, net
|
$
|
(880,499
|
)
|
|
$
|
(1,210,844
|
)
|
|
$
|
330,345
|
|
Accounts receivable, net
|
1,347,742
|
|
|
1,306,567
|
|
|
41,175
|
|
|||
Inventory
|
283,352
|
|
|
286,155
|
|
|
(2,803
|
)
|
|||
Accounts payable
|
(1,026,702
|
)
|
|
(1,256,854
|
)
|
|
230,152
|
|
|||
Contract Capital, net
|
$
|
(276,107
|
)
|
|
$
|
(874,976
|
)
|
|
$
|
598,869
|
|
(1)
|
Represents our cash position relative to revenue recognized on projects, with (i) billings in excess of costs and estimated earnings representing a liability reflective of future cash expenditures and non-cash earnings, and (ii) costs and estimated earnings in excess of billings representing an asset reflective of future cash receipts.
|
(2)
|
Represents a margin fair value liability associated with long-term contracts acquired in connection with the acquisition of The Shaw Group Inc. on February 13, 2013 (the "Acquisition Closing Date"). The margin fair value liability was approximately
$745.5 million
at the Acquisition Closing Date and is recognized as revenue on a percentage of completion basis as the applicable projects progress. We anticipate the remaining liability will be recognized as revenue over the next five to six years.
|
•
|
Series A—Interest due semi-annually at a fixed rate of
4.15%
, with principal of
$150.0 million
due in December 2017
|
•
|
Series B—Interest due semi-annually at a fixed rate of
4.57%
, with principal of
$225.0 million
due in December 2019
|
•
|
Series C—Interest due semi-annually at a fixed rate of
5.15%
, with principal of
$275.0 million
due in December 2022
|
•
|
Series D—Interest due semi-annually at a fixed rate of
5.30%
, with principal of
$150.0 million
due in December 2024
|
|
|
Three Months Ended
|
|
|
||||||||||||||||
|
|
March 31, 2014
|
|
June 30, 2014
|
|
September 30, 2014
|
|
December 31, 2014
|
|
Full Year 2014
|
||||||||||
New Awards
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Engineering & Construction
|
|
$
|
4,494,837
|
|
|
$
|
2,056,812
|
|
|
$
|
1,582,194
|
|
|
$
|
1,967,420
|
|
|
$
|
10,101,263
|
|
Fabrication Services
|
|
516,729
|
|
|
564,388
|
|
|
784,194
|
|
|
557,269
|
|
|
2,422,580
|
|
|||||
Technology
|
|
77,446
|
|
|
152,397
|
|
|
82,281
|
|
|
74,886
|
|
|
387,010
|
|
|||||
Capital Services
|
|
708,477
|
|
|
1,429,480
|
|
|
527,336
|
|
|
689,127
|
|
|
3,354,420
|
|
|||||
Total new awards
|
|
$
|
5,797,489
|
|
|
$
|
4,203,077
|
|
|
$
|
2,976,005
|
|
|
$
|
3,288,702
|
|
|
$
|
16,265,273
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Engineering & Construction
|
|
$
|
1,686,181
|
|
|
$
|
1,939,898
|
|
|
$
|
2,022,296
|
|
|
$
|
1,975,006
|
|
|
$
|
7,623,381
|
|
Fabrication Services
|
|
671,911
|
|
|
694,295
|
|
|
686,507
|
|
|
686,268
|
|
|
2,738,981
|
|
|||||
Technology
|
|
102,573
|
|
|
102,387
|
|
|
89,918
|
|
|
90,248
|
|
|
385,126
|
|
|||||
Capital Services
|
|
467,467
|
|
|
557,799
|
|
|
582,012
|
|
|
620,164
|
|
|
2,227,442
|
|
|||||
Total revenue
|
|
$
|
2,928,132
|
|
|
$
|
3,294,379
|
|
|
$
|
3,380,733
|
|
|
$
|
3,371,686
|
|
|
$
|
12,974,930
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Engineering & Construction
|
|
$
|
84,636
|
|
|
$
|
132,648
|
|
|
$
|
155,096
|
|
|
$
|
146,291
|
|
|
$
|
518,671
|
|
Fabrication Services
|
|
46,915
|
|
|
78,267
|
|
|
67,943
|
|
|
81,362
|
|
|
274,487
|
|
|||||
Technology
|
|
34,669
|
|
|
37,242
|
|
|
38,560
|
|
|
37,311
|
|
|
147,782
|
|
|||||
Capital Services
|
|
4,330
|
|
|
21,591
|
|
|
29,026
|
|
|
26,406
|
|
|
81,353
|
|
|||||
Total operating groups
|
|
$
|
170,550
|
|
|
$
|
269,748
|
|
|
$
|
290,625
|
|
|
$
|
291,370
|
|
|
$
|
1,022,293
|
|
Integration related costs
|
|
(8,067
|
)
|
|
(9,537
|
)
|
|
(4,563
|
)
|
|
(17,518
|
)
|
|
(39,685
|
)
|
|||||
Total income from operations
|
|
$
|
162,483
|
|
|
$
|
260,211
|
|
|
$
|
286,062
|
|
|
$
|
273,852
|
|
|
$
|
982,608
|
|
•
|
Engineering, Construction & Maintenance -
Our Engineering, Construction & Maintenance operating group included three reporting units: Oil & Gas, Power and Plant Services.
|
•
|
Fabrication Services -
Our Fabrication Services operating group included two reporting units: Steel Plate Structures and Fabrication & Manufacturing.
|
•
|
Technology -
Our Technology operating group represented a reporting unit.
|
•
|
Environmental Solutions -
Our Environmental Solutions operating group represented a reporting unit.
|
•
|
Engineering & Construction (formerly Engineering, Construction & Maintenance) -
Our Engineering & Construction operating group includes two reporting units: Oil & Gas and Power. Our Plant Services reporting unit was reclassified to our realigned Capital Services operating group, as noted below.
|
•
|
Fabrication Services -
Our Fabrication Services operating group includes three reporting units: Steel Plate Structures, Fabrication & Manufacturing, and Engineered Products. Our Engineered Products reporting unit represents a portion of our previous Technology reporting unit.
|
•
|
Technology -
Our Technology operating group continues to represent a reporting unit, consisting of the remaining portion of our previous Technology reporting unit, after reclassification of the Engineered Products reporting unit to Fabrication Services, as noted above.
|
•
|
Capital Services
(formerly Environmental Solutions)
- Our Capital Services operating group includes two reporting units: Facilities & Plant Services and Federal Services. Our Facilities & Plant Services reporting unit represents our previous Plant Services reporting unit and a portion of our previous Environmental Solutions reporting unit. Our Federal Services reporting unit represents the remaining portion of our previous Environmental Solutions reporting unit.
|
•
|
Federal Services
- Goodwill associated with the Federal Services reporting unit was approximately $189.0 million at January 1, 2015, and the fair value of the reporting unit exceeded its net book value by approximately 38%. Key assumptions used in deriving the reporting unit’s fair value included a discount rate of 11.5%; an earnings before interest, taxes, depreciation and amortization (“EBITDA”) compound annual growth rate (“CAGR”) of approximately 9% from 2015 through 2021; and a terminal growth rate of 2.5%.
|
•
|
Facilities & Plant Services
- Goodwill associated with the Facilities & Plant Services reporting unit was approximately $695.0 million at January 1, 2015, and the fair value of the reporting unit exceeded its net book value by approximately 14%. Key assumptions used in deriving the reporting unit’s fair value included a discount rate of 10%; an EBITDA CAGR of approximately 8% from 2015 through 2021; and a terminal growth rate of 2.5%.
|
•
|
Foreign Currency Exchange Rate Derivatives—
We do not engage in currency speculation; however, we utilize foreign currency exchange rate derivatives on an ongoing basis to hedge against certain foreign currency related operating exposures. We generally seek hedge accounting treatment for contracts used to hedge operating exposures and designate them as cash flow hedges. Therefore, gains and losses, exclusive of credit risk and forward points (which represent the time value component of the fair value of our derivative positions), are included in AOCI until the associated underlying operating exposure impacts our earnings. Changes in the fair value of (1) credit risk and forward points, (2) instruments deemed ineffective during the period, and (3) instruments that we do not designate as cash flow hedges, are recognized within cost of revenue.
|
•
|
Interest Rate Derivatives—
At
March 31, 2015
, we continued to utilize a swap arrangement to hedge against interest rate variability associated with
$404.0 million
of our outstanding
$800.0 million
Term Loan. The swap arrangement has been designated as a cash flow hedge as its critical terms matched those of the Term Loan at inception and through
March 31, 2015
. Accordingly, changes in the fair value of the swap arrangement are included in AOCI until the associated underlying exposure impacts our earnings.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plan
(1)(2)
|
|||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|||||
1/1/2015 - 1/31/2015
|
|
42
|
|
|
$
|
33.29
|
|
|
42
|
|
|
10,192
|
|
(1)
|
Table does not include shares withheld for tax purposes or forfeitures under our equity plans.
|
(2)
|
On April 30, 2014, our shareholders authorized us to repurchase up to 10% of our issued share capital (or approximately
10.9 million
shares based on the number of shares currently outstanding) through October 30, 2015. However, the number of shares repurchased in the future, if any, and the timing and manner of any repurchases are determined by us in light of prevailing market conditions, our available resources and other factors, including those discussed elsewhere in this Quarterly Report on Form 10-Q.
|
10.1
(1)
|
|
2015 Amendment to the Chicago Bridge & Iron 2008 Long-Term Incentive Plan
|
|
|
|
10.2
(1)
|
|
Fourth Amendment to The Shaw Group Inc. 2008 Omnibus Incentive Plan
|
|
|
|
31.1
(1)
|
|
Certification Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
(1)
|
|
Certification Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
(1)
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
(1)
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
(1),(2)
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
(1),(2)
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
(1),(2)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
(1),(2)
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
(1),(2)
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
(1),(2)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Filed herewith
|
(2)
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations for the
three months ended March 31, 2015
and
2014
, (ii) the Condensed Consolidated Statements of Comprehensive Income for the
three months ended March 31, 2015
and
2014
, (iii) the Condensed Consolidated Balance Sheets at
March 31, 2015
and
December 31, 2014
, (iv) the Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2015
and
2014
, (v) the Condensed Consolidated Statements of Changes in Shareholders’ Equity for the
three months ended March 31, 2015
and
2014
, and (vi) the Notes to Financial Statements.
|
Chicago Bridge & Iron Company N.V.
|
By: Chicago Bridge & Iron Company B.V.
|
Its: Managing Director
|
|
/s/ MICHAEL S. TAFF
|
Michael S. Taff
|
Managing Director
|
(Principal Financial Officer and Duly Authorized Officer)
|
1.
|
Section 2.34 is deleted in its entirety and replaced with the following :
|
1.
|
Section 2.46A is deleted in its entirety and replaced with the following:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Chicago Bridge & Iron Company N.V.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Philip K. Asherman
|
Philip K. Asherman
|
Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Chicago Bridge & Iron Company N.V.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael S. Taff
|
Michael S. Taff
|
Principal Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Philip K. Asherman
|
Philip K. Asherman
|
Principal Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael S. Taff
|
Michael S. Taff
|
Principal Financial Officer
|