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x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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The Netherlands
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Prinses Beatrixlaan 35
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98-0420223
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(State or other jurisdiction of
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2595 AK The Hague
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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The Netherlands
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31 70 373 2010
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(Address and telephone number of principal executive offices)
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Title of each class:
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Name of each exchange on which registered:
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Common Stock; Euro .01 par value
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New York Stock Exchange
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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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Emerging growth company
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o
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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our ability to satisfy the conditions to closing of the proposed business combination with McDermott International; Inc. (“McDermott”), and to complete such combination, on the anticipated time frame or at all;
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•
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business uncertainties and operating restrictions during the pendency of the proposed combination with McDermott;
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•
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restrictions on our ability to pursue alternatives to the combination with McDermott;
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•
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our ability to realize cost savings from our expected performance of contracts, whether as a result of improper estimates, performance, or otherwise;
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•
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uncertain timing and funding of new contract awards, as well as project cancellations;
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•
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our ability to fully realize the revenue value reported in our backlog;
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•
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cost overruns on fixed-price or similar contracts or failure to receive timely or proper payments on cost-reimbursable contracts, whether as a result of improper estimates, performance, disputes, or otherwise;
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•
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risks associated with labor productivity;
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•
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risks associated with percentage-of-completion accounting; our ability to settle or negotiate unapproved change orders and claims and estimates regarding liquidated damages;
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•
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changes in the costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors;
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•
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adverse impacts from weather affecting our performance and timeliness of completion, which could lead to increased costs and affect the quality, costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors;
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•
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operating risks, which could lead to increased costs and affect the quality, costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors;
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•
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increased competition;
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•
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fluctuating revenue resulting from a number of factors, including a decline in energy prices and the cyclical nature of the individual markets in which our customers operate;
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•
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delayed or lower than expected activity in the energy and natural resource industries, demand from which is the largest component of our revenue;
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•
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future levels of demand, including expectations regarding: planned investments across the natural gas value chain, including liquefied natural gas (“LNG”) and petrochemicals; continued investments in projects based on United States (“U.S.”) shale gas; global investments in power and petrochemical facilities are expected to continue; and investments in various types of facilities that require storage structures and pre-fabricated pipe.
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•
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expectations regarding future compliance with our financial and other covenants and our ability to obtain waivers or amendments to the agreements governing our primary financing arrangements, should such waivers or amendments be required;
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•
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estimates regarding the likelihood and timing of completion of the Combination;
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•
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the non-competitiveness or unavailability of, or lack of demand or loss of legal protection for, our intellectual property assets or rights;
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•
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failure to keep pace with technological changes or innovation;
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•
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failure of our patents or licensed technologies to perform as expected or to remain competitive, current, in demand, profitable or enforceable;
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•
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adverse outcomes of pending claims or litigation or the possibility of new claims or litigation, and the potential effect of such claims or litigation on our business, financial position, results of operations and cash flow;
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•
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lack of necessary liquidity to provide bid, performance, advance payment and retention bonds, guarantees, or letters of credit securing our obligations under our bids and contracts or to finance expenditures prior to the receipt of payment for the performance of contracts;
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•
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proposed and actual revisions to U.S. and non-U.S. tax laws, and interpretation of said laws, Dutch tax treaties with foreign countries and U.S. tax treaties with non-U.S. countries (including, but not limited to The Netherlands), which would seek to increase income taxes payable;
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•
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expectations regarding defined benefit pension and other postretirement plan contributions and investment performance;
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•
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political and economic conditions including, but not limited to, war, conflict or civil or economic unrest in countries in which we operate;
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•
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compliance with applicable laws and regulations in any one or more of the countries in which we operate including, but not limited to, the U.S. Foreign Corrupt Practices Act (“FCPA”) and those concerning the environment, export controls anti-money laundering and trade sanction programs;
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•
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foreign currency risk and our inability to properly manage or hedge currency or similar risks; and
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•
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a downturn, disruption, or stagnation in the economy in general.
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•
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costs incurred in connection with modifications to a contract that may be unapproved by the customer as to scope, schedule, and/or price (“unapproved change orders”);
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•
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unanticipated costs or claims, including costs for project modifications, delays, errors or changes in specifications or designs, regulatory changes or contract termination;
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•
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unanticipated technical problems with the structures, equipment or systems we supply;
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•
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failure to properly estimate costs of engineering, materials, components, equipment, labor or subcontractors;
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•
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changes in the costs of engineering, materials, components, equipment, labor or subcontractors;
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•
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changes in labor conditions, including the availability, wage and productivity of labor;
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•
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productivity and other delays caused by weather conditions;
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•
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failure of our suppliers or subcontractors to perform;
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•
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difficulties in obtaining required governmental permits or approvals;
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•
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changes in laws and regulations; and
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•
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changes in general economic conditions.
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•
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current and projected oil and gas prices;
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•
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exploration, extraction, production and transportation costs;
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•
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the discovery rate, size and location of new oil and gas reserves;
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•
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the sale and expiration dates of leases and concessions;
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•
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local and international political and economic conditions, including sanctions, war or conflict;
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•
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technological challenges and advances;
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•
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the ability of oil and gas companies to generate capital;
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•
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demand for hydrocarbon production; and
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•
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changing taxes, price controls, and laws and regulations.
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•
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unstable economic conditions in some countries in which we make capital investments, operate or provide services, including Europe, which has experienced recent economic turmoil;
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•
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increased costs, lower revenue and backlog and decreased liquidity resulting from a full or partial break-up of the EU or its currency, the Euro;
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•
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the lack of well-developed legal systems in some countries in which we make capital investments, operate, or provide services, which could make it difficult for us to enforce our rights;
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•
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expropriation of property;
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•
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restrictions on the right to receive dividends from our ventures, convert currency or repatriate funds; and
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•
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political upheaval and international hostilities, including risks of loss due to civil strife, acts of war, guerrilla activities, insurrections and acts of terrorism.
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•
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changes in the business, operations and prospects of either company;
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•
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changes in market assessments of the business, operations and prospects of either company;
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•
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market assessments of the likelihood that the Combination will be completed, including related considerations regarding regulatory approvals of the Combination;
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•
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interest rates, general market, industry, economic and political conditions and other factors generally affecting the price of our and McDermott’s common stock; and
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•
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federal, state, local and foreign legislation, governmental regulation and legal developments impacting the industries in which we and McDermott operate.
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Location
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Type of Facility
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Interest
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Operating Group
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Al-Khobar, Saudi Arabia
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Administrative and engineering office
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Leased
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EC, FS
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Brno, Czech Republic
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Engineering office
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Leased
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EC
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Charlotte, North Carolina
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Operations and sales office
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Leased
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EC
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Gurgaon, India
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Engineering and operations office
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Leased
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EC, FS, Tech
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Houston, Texas
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Engineering and operations office
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Leased
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EC, Tech
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Kwinana, Australia
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Administrative, engineering and operations office
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Owned
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EC, FS
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London, England
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Engineering and sales office
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Leased
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EC
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Moscow, Russia
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Administrative, operations and sales office
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Leased
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EC, Tech
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Perth, Australia
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Sales office
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Leased
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EC, FS
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The Hague, The Netherlands
(1)
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Administrative, engineering, operations and sales office
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Leased
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EC, FS, Tech, Corp
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The Woodlands, Texas
(1)
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Administrative, operations and sales office
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Owned
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EC, FS, Tech, Corp
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Walker, Louisiana
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Administrative and operations office, fabrication facility and warehouse
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Owned
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EC, FS
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Abu Dhabi, UAE
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Operations office and fabrication facility
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Owned/Leased
|
|
FS
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Al Aujam, Saudi Arabia
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Fabrication facility and warehouse
|
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Owned
|
|
FS
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Askar, Bahrain
|
|
Operations office and fabrication facility
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|
Owned/Leased
|
|
FS
|
Clearfield, Utah
|
|
Fabrication facility
|
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Leased
|
|
FS
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Clive, Iowa
|
|
Fabrication facility
|
|
Owned
|
|
FS
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Dubai, UAE
|
|
Administrative, engineering and operations office and warehouse
|
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Leased
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|
FS, Tech
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El Dorado, Arkansas
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|
Fabrication facility
|
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Owned
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FS
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Fort Saskatchewan, Canada
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Administrative and operations office, fabrication facility and warehouse
|
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Owned
|
|
FS
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Houston, Texas
|
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Operations office, fabrication facility, warehouse and distribution facility
|
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Owned/Leased
|
|
FS
|
Lake Charles, Louisiana
|
|
Fabrication facility
|
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Owned/Leased
|
|
FS
|
Laurens, South Carolina
|
|
Fabrication facility
|
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Owned
|
|
FS
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New Brunswick, New Jersey
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Fabrication and distribution facility
|
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Leased
|
|
FS
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Niagara-on-the-Lake, Canada
|
|
Engineering office
|
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Leased
|
|
FS
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Plainfield, Illinois
|
|
Engineering and operations office
|
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Leased
|
|
FS
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Sattahip, Thailand
|
|
Operations office and fabrication facility
|
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Leased
|
|
FS
|
Shreveport, Louisiana
|
|
Manufacturing and distribution facilities
|
|
Owned
|
|
FS
|
Tyler, Texas
|
|
Engineering and operations office
|
|
Owned
|
|
FS
|
Beijing, China
|
|
Sales and operations office
|
|
Leased
|
|
Tech
|
Bloomfield, New Jersey
|
|
Administrative, engineering and operations office
|
|
Leased
|
|
Tech, FS
|
Ludwigshafen, Germany
|
|
Research and development office
|
|
Leased
|
|
Tech
|
Mannheim, Germany
|
|
Engineering and operations office
|
|
Leased
|
|
Tech
|
Pasadena, Texas
|
|
Research and development office and manufacturing facility
|
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Owned
|
|
Tech
|
(1)
|
In addition to being utilized by the operating groups referenced above, our office in The Hague, The Netherlands serves as our corporate headquarters and our office in The Woodlands, Texas serves as our administrative headquarters.
|
|
|
Range of Common Stock Prices
|
|
Dividends
|
||||||||||||
|
|
High
|
|
Low
|
|
Close
|
|
Per Share
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
|
$
|
18.72
|
|
|
$
|
13.76
|
|
|
$
|
16.14
|
|
|
$
|
—
|
|
Third Quarter
|
|
$
|
20.20
|
|
|
$
|
9.55
|
|
|
$
|
16.80
|
|
|
$
|
—
|
|
Second Quarter
|
|
$
|
31.69
|
|
|
$
|
12.91
|
|
|
$
|
19.73
|
|
|
$
|
0.07
|
|
First Quarter
|
|
$
|
36.15
|
|
|
$
|
28.40
|
|
|
$
|
30.75
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
|
$
|
36.56
|
|
|
$
|
26.55
|
|
|
$
|
31.75
|
|
|
$
|
0.07
|
|
Third Quarter
|
|
$
|
39.71
|
|
|
$
|
26.12
|
|
|
$
|
28.03
|
|
|
$
|
0.07
|
|
Second Quarter
|
|
$
|
41.33
|
|
|
$
|
32.16
|
|
|
$
|
34.63
|
|
|
$
|
0.07
|
|
First Quarter
|
|
$
|
39.82
|
|
|
$
|
31.30
|
|
|
$
|
36.59
|
|
|
$
|
0.07
|
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
CB&I
|
|
$
|
100
|
|
|
$
|
180
|
|
|
$
|
91
|
|
|
$
|
85
|
|
|
$
|
70
|
|
|
$
|
36
|
|
S&P 500
|
|
$
|
100
|
|
|
$
|
132
|
|
|
$
|
151
|
|
|
$
|
153
|
|
|
$
|
171
|
|
|
$
|
209
|
|
DJ U.S. Heavy Construction Index
|
|
$
|
100
|
|
|
$
|
131
|
|
|
$
|
97
|
|
|
$
|
85
|
|
|
$
|
104
|
|
|
$
|
110
|
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding
Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
|
593
|
|
|
$
|
16.04
|
|
|
7,183
|
|
Equity compensation plans not approved by security holders
(1)
|
|
27
|
|
|
$
|
36.01
|
|
|
326
|
|
Total
|
|
620
|
|
|
$
|
16.91
|
|
|
7,509
|
|
(1)
|
Associated with The Shaw 2008 Omnibus Incentive Plan that was approved by The Shaw Group Inc. (“Shaw”) shareholders and subsequently acquired as part of our acquisition of Shaw on February 13, 2013.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
(1)
|
|
2015
(2)
|
|
2014
|
|
2013
(3)
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
6,673,330
|
|
|
$
|
8,599,649
|
|
|
$
|
10,630,812
|
|
|
$
|
10,816,517
|
|
|
$
|
9,430,731
|
|
Cost of revenue
|
|
6,666,218
|
|
|
7,722,239
|
|
|
9,277,318
|
|
|
9,515,616
|
|
|
8,348,830
|
|
|||||
Gross profit
|
|
7,112
|
|
|
877,410
|
|
|
1,353,494
|
|
|
1,300,901
|
|
|
1,081,901
|
|
|||||
Selling and administrative expense
|
|
275,421
|
|
|
298,041
|
|
|
336,282
|
|
|
358,876
|
|
|
333,689
|
|
|||||
Intangibles amortization
|
|
25,841
|
|
|
25,839
|
|
|
37,665
|
|
|
46,546
|
|
|
43,651
|
|
|||||
Equity earnings
|
|
(48,397
|
)
|
|
(24,570
|
)
|
|
(14,777
|
)
|
|
(24,536
|
)
|
|
(22,893
|
)
|
|||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
453,100
|
|
|
—
|
|
|
—
|
|
|||||
Loss on net assets sold and intangible assets impairment
|
|
—
|
|
|
148,148
|
|
|
1,052,751
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring related costs
(4)
|
|
114,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other operating (income) expense, net
(5)
|
|
(64,916
|
)
|
|
2,411
|
|
|
3,060
|
|
|
(1,822
|
)
|
|
2,244
|
|
|||||
Acquisition and integration related costs
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,385
|
|
|
80,859
|
|
|||||
(Loss) income from operations
|
|
(295,362
|
)
|
|
427,541
|
|
|
(514,587
|
)
|
|
890,452
|
|
|
644,351
|
|
|||||
Interest expense
(7)
|
|
(228,945
|
)
|
|
(81,240
|
)
|
|
(70,503
|
)
|
|
(61,218
|
)
|
|
(67,485
|
)
|
|||||
Interest income
|
|
3,144
|
|
|
11,849
|
|
|
7,041
|
|
|
7,370
|
|
|
6,868
|
|
|||||
(Loss) income from operations before taxes
|
|
(521,163
|
)
|
|
358,150
|
|
|
(578,049
|
)
|
|
836,604
|
|
|
583,734
|
|
|||||
Income tax (expense) benefit
(8)
|
|
(798,935
|
)
|
|
20,926
|
|
|
102,194
|
|
|
(239,366
|
)
|
|
(81,522
|
)
|
|||||
Net (loss) income from continuing operations
|
|
(1,320,098
|
)
|
|
379,076
|
|
|
(475,855
|
)
|
|
597,238
|
|
|
502,212
|
|
|||||
Net (loss) income from discontinued operations
(9)
|
|
(104,463
|
)
|
|
(618,899
|
)
|
|
45,894
|
|
|
38,887
|
|
|
10,378
|
|
|||||
Net (loss) income
|
|
(1,424,561
|
)
|
|
(239,823
|
)
|
|
(429,961
|
)
|
|
636,125
|
|
|
512,590
|
|
|||||
Less: Net income attributable to noncontrolling interests ($870, $2,187, $2,511, $1,876 and $1,241 related to discontinued operations)
|
|
(33,632
|
)
|
|
(73,346
|
)
|
|
(74,454
|
)
|
|
(92,518
|
)
|
|
(58,470
|
)
|
|||||
Net (loss) income attributable to CB&I
|
|
$
|
(1,458,193
|
)
|
|
$
|
(313,169
|
)
|
|
$
|
(504,415
|
)
|
|
$
|
543,607
|
|
|
$
|
454,120
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income attributable to CB&I per share (Basic):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(13.40
|
)
|
|
$
|
2.99
|
|
|
$
|
(5.13
|
)
|
|
$
|
4.69
|
|
|
$
|
4.20
|
|
Discontinued operations
|
|
(1.04
|
)
|
|
(6.04
|
)
|
|
0.41
|
|
|
0.34
|
|
|
0.09
|
|
|||||
Total
|
|
$
|
(14.44
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(4.72
|
)
|
|
$
|
5.03
|
|
|
$
|
4.29
|
|
Net (loss) income attributable to CB&I per share (Diluted):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
(13.40
|
)
|
|
$
|
2.97
|
|
|
$
|
(5.13
|
)
|
|
$
|
4.64
|
|
|
$
|
4.14
|
|
Discontinued operations
|
|
(1.04
|
)
|
|
(5.99
|
)
|
|
0.41
|
|
|
0.34
|
|
|
0.09
|
|
|||||
Total
|
|
$
|
(14.44
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(4.72
|
)
|
|
$
|
4.98
|
|
|
$
|
4.23
|
|
Cash dividends per share
|
|
$
|
0.14
|
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
$
|
0.20
|
|
Other Financial Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income from operations percentage
|
|
(4.4)%
|
|
5.0%
|
|
(4.8)%
|
|
8.2%
|
|
6.8%
|
||||||||||
Depreciation and amortization
|
|
$
|
88,375
|
|
|
$
|
96,146
|
|
|
$
|
129,380
|
|
|
$
|
148,754
|
|
|
$
|
148,577
|
|
Capital expenditures
|
|
$
|
44,160
|
|
|
$
|
46,487
|
|
|
$
|
65,527
|
|
|
$
|
101,706
|
|
|
$
|
77,302
|
|
New awards
(10)
|
|
$
|
5,774,838
|
|
|
$
|
4,936,757
|
|
|
$
|
10,334,392
|
|
|
$
|
12,967,797
|
|
|
$
|
10,329,829
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands, except employee data)
|
||||||||||||||||||
Balance Sheet And Other Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
|
$
|
2,836,582
|
|
|
$
|
2,813,803
|
|
|
$
|
2,826,899
|
|
|
$
|
3,310,624
|
|
|
$
|
3,341,861
|
|
Total assets
|
|
$
|
5,971,582
|
|
|
$
|
7,839,420
|
|
|
$
|
9,192,060
|
|
|
$
|
9,369,830
|
|
|
$
|
9,374,291
|
|
Long-term debt, net
|
|
$
|
—
|
|
|
$
|
1,287,923
|
|
|
$
|
1,791,832
|
|
|
$
|
1,553,846
|
|
|
$
|
1,610,863
|
|
Total shareholders’ equity
|
|
$
|
218,364
|
|
|
$
|
1,561,337
|
|
|
$
|
2,163,590
|
|
|
$
|
2,876,303
|
|
|
$
|
2,507,438
|
|
Backlog
(10)
|
|
$
|
11,390,307
|
|
|
$
|
13,014,498
|
|
|
$
|
16,901,744
|
|
|
$
|
24,831,171
|
|
|
$
|
23,436,558
|
|
Number of employees:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaried
|
|
9,300
|
|
|
11,000
|
|
|
13,700
|
|
|
18,000
|
|
|
16,600
|
|
|||||
Hourly and craft
|
|
17,100
|
|
|
18,800
|
|
|
15,500
|
|
|
22,800
|
|
|
27,000
|
|
(1)
|
Results for 2016 include the impact of a reserve for the Transaction Receivable associated with the 2015 sale of our Nuclear Operations, which resulted in a non-cash pre-tax charge of approximately
$148.1 million
(approximately
$96.3 million
after-tax). See “Results of Operations” within Item 7 and
Note 4
within Item 8 for further discussion.
|
(2)
|
Results for 2015 include the impact of the sale of our Nuclear Operations which resulted in a non-cash pre-tax charge of approximately
$1.5 billion
(approximately
$1.1 billion
after-tax) related to the impairment of goodwill (approximately
$453.1 million
) and intangible assets (approximately
$79.1 million
) and a loss on net assets sold (approximately
$973.7 million
), as well as a reduction in our backlog (approximately
$7.3 billion
). See “Results of Operations” within Item 7 and
Note 4
within Item 8 for further discussion.
|
(3)
|
Results for 2013 include the impact of the Shaw acquisition from the closing date on February 13, 2013.
|
(4)
|
Restructuring related costs for 2017 primarily relate to facility consolidations, severance and other employee related costs, professional fees, and other miscellaneous costs resulting primarily from our publicly announced cost reduction, facility rationalization and strategic initiatives.
See
Note 10
within Item 8 for further discussion.
|
(5)
|
Other operating (income) expense, net
, generally represents (gains) losses associated with the sale or disposition of property and equipment.
Other operating (income) expense, net
, for 2017 also includes a net gain of approximately
$62.7 million
resulting from the receipt of insurance proceeds (approximately
$99.0 million
) in excess of associated costs (approximately
$36.3 million
) for a fabrication facility that was damaged during Hurricane Harvey.
Other operating (income) expense, net
, for 2015 also includes a gain of approximately
$7.5 million
related to the contribution of a technology to one of our unconsolidated joint ventures and a foreign exchange loss of approximately
$11.0 million
associated with the re-measurement of certain non-U.S. Dollar denominated net assets.
|
(6)
|
Integration related costs for 2014 and 2013 primarily relate to facility consolidations, including the associated accrued future lease costs for vacated facilities and unutilized capacity, personnel relocation and severance related costs, and systems integration costs. Acquisition related costs for 2013 primarily relate to transaction costs, professional fees, and change-in-control and severance related costs associated with the Shaw acquisition.
|
(7)
|
Interest expense for 2017 includes approximately
$53.0 million
related to higher debt issuance costs and related amortization, including accelerated amortization due to the anticipated early repayment of our Senior Facilities, as required by our amendments. Interest for 2017 also includes approximately
$35.0 million
for the accrual of modified make-whole payments on our Notes that are required as a result of the anticipated early repayment of our Notes in connection with the Combination. See Note 11 within Item 8 for further discussion.
|
(8)
|
Income tax expense for 2017 includes expense of approximately
$306.4 million
resulting from the revaluation of our U.S. deferred taxes due to a reduction in the U.S. corporate income tax rate, and a $6.7 million income tax benefit, both resulting from changes in U.S. tax law enacted during the fourth quarter 2017. Income tax expense for 2017 also includes expense of approximately $750.8 million resulting from the establishment of valuation allowances on our remaining net deferred tax assets. See
Note 17
within Item 8 for further discussion. Income tax expense for 2016 includes a benefit of approximately
$67.0 million
resulting from the reversal of a deferred tax liability associated with historical earnings of a non-U.S. subsidiary for which the earnings are no longer anticipated to be subject to tax. Income tax expense for 2013 includes a benefit of approximately
$62.8 million
resulting from the reversal of a valuation allowance associated with our United Kingdom net operating loss deferred tax assets.
|
(9)
|
Net loss from discontinued operations attributable to CB&I for 2017 includes a pre-tax charge of approximately
$64.8 million
associated with the June 30, 2017 sale of our Capital Services Operations, and income tax expense of
$51.6 million
resulting from a taxable gain on the transaction (due primarily to the non-deductibility of goodwill). Net loss from discontinued operations attributable to CB&I for 2016 includes a non-cash pre-tax charge related to the partial impairment of goodwill (approximately
$655.0 million
) for our former Capital Services Operations, resulting from our fourth quarter annual impairment assessment. The net loss reflects the non-deductibility of the goodwill impairment charge for tax purposes. See
Note 5
within Item 8 for further discussion.
|
(10)
|
New awards represent the expected revenue value of new contract commitments received during a given period, as well as scope growth on existing commitments. Backlog represents the unearned value of our new awards. New awards and backlog include the entire award values for joint ventures we consolidate and our proportionate share of award values for joint ventures we proportionately consolidate.
New awards and backlog also include our pro-rata share of the award values for unconsolidated joint ventures we account for under the equity method.
As the net results for our equity method joint ventures are recognized as equity earnings, their revenue is not presented in our Consolidated Statements of Operations.
Backlog may fluctuate with currency movements.
|
|
|
December 31,
|
||||||||||||||||
|
|
2017
|
|
% of
Total |
|
2016
|
|
% of
Total |
|
2015
|
|
% of
Total |
||||||
Backlog
|
|
(In thousands)
|
||||||||||||||||
Engineering & Construction
|
|
$
|
8,330,836
|
|
|
73%
|
|
$
|
9,871,208
|
|
|
76%
|
|
$
|
12,788,873
|
|
|
76%
|
Fabrication Services
|
|
1,848,585
|
|
|
16%
|
|
2,117,567
|
|
|
16%
|
|
3,149,813
|
|
|
18%
|
|||
Technology
|
|
1,210,886
|
|
|
11%
|
|
1,025,723
|
|
|
8%
|
|
963,058
|
|
|
6%
|
|||
Total backlog
|
|
$
|
11,390,307
|
|
|
|
|
$
|
13,014,498
|
|
|
|
|
$
|
16,901,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Years Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
% of
Total |
|
2016
|
|
% of
Total |
|
2015
|
|
% of
Total |
||||||
New Awards
|
|
(In thousands)
|
||||||||||||||||
Engineering & Construction
|
|
$
|
3,449,809
|
|
|
60%
|
|
$
|
3,160,101
|
|
|
64%
|
|
$
|
6,603,234
|
|
|
64%
|
Fabrication Services
|
|
1,755,314
|
|
|
30%
|
|
1,297,247
|
|
|
26%
|
|
3,153,618
|
|
|
30%
|
|||
Technology
|
|
569,715
|
|
|
10%
|
|
479,409
|
|
|
10%
|
|
577,540
|
|
|
6%
|
|||
Total new awards
|
|
$
|
5,774,838
|
|
|
|
|
$
|
4,936,757
|
|
|
|
|
$
|
10,334,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2017
|
|
% of
Total |
|
2016
|
|
% of
Total |
|
2015
|
|
% of
Total |
||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
4,526,093
|
|
|
68%
|
|
$
|
6,114,725
|
|
|
71%
|
|
$
|
7,767,707
|
|
|
73%
|
Fabrication Services
|
|
1,827,126
|
|
|
27%
|
|
2,200,500
|
|
|
26%
|
|
2,464,006
|
|
|
23%
|
|||
Technology
|
|
320,111
|
|
|
5%
|
|
284,424
|
|
|
3%
|
|
399,099
|
|
|
4%
|
|||
Total revenue
|
|
$
|
6,673,330
|
|
|
|
|
$
|
8,599,649
|
|
|
|
|
$
|
10,630,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2017
|
|
% of
Revenue |
|
2016
|
|
% of
Revenue |
|
2015
|
|
% of
Revenue |
||||||
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Engineering & Construction
|
|
$
|
(544,202
|
)
|
|
(12.0)%
|
|
$
|
143,405
|
|
|
2.3%
|
|
$
|
(886,386
|
)
|
|
(11.4)%
|
Fabrication Services
|
|
258,451
|
|
|
14.1%
|
|
179,319
|
|
|
8.1%
|
|
221,333
|
|
|
9.0%
|
|||
Technology
|
|
104,914
|
|
|
32.8%
|
|
104,817
|
|
|
36.9%
|
|
150,466
|
|
|
37.7%
|
|||
Total operating groups
|
|
(180,837
|
)
|
|
(2.7)%
|
|
427,541
|
|
|
5.0%
|
|
(514,587
|
)
|
|
(4.8)%
|
|||
Restructuring related costs
|
|
(114,525
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|||
Total (loss) income from continuing operations
|
|
$
|
(295,362
|
)
|
|
(4.4)%
|
|
$
|
427,541
|
|
|
5.0%
|
|
$
|
(514,587
|
)
|
|
(4.8)%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
% of
Revenue |
|
2016
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Restructuring Related Costs and Transaction Receivable Reserve
(1)
|
|
$
|
(180,837
|
)
|
|
(2.7)%
|
|
$
|
575,689
|
|
|
6.7%
|
Restructuring Related Costs
(1)
|
|
(114,525
|
)
|
|
—%
|
|
—
|
|
|
—%
|
||
Transaction Receivable Reserve
(1)
|
|
—
|
|
|
—%
|
|
(148,148
|
)
|
|
—%
|
||
(Loss) income from operations
(1)
|
|
$
|
(295,362
|
)
|
|
(4.4)%
|
|
$
|
427,541
|
|
|
5.0%
|
(1)
|
The break-out of 2017 and
2016
(loss) income from operations represents a non-GAAP financial disclosure, which we believe provides better comparability between our 2017 and 2016 results.
|
•
|
an ethane cracker project in the U.S. (approximately $1.3 billion);
|
•
|
a gas turbine power project in the U.S. (approximately $600.0 million)
;
|
•
|
federal funding allocations for our mixed oxide fuel fabrication facility project in the U.S. (approximately $270.0 million);
|
•
|
a delayed coking unit project in Russia (approximately $130.0 million);
|
•
|
work scopes for our liquid ethylene cracker project and associated units in the Middle East that we are executing through our unconsolidated equity method joint venture (approximately $100.0 million); and
|
•
|
a refinery expansion project in the Middle East (approximately $95.0 million).
|
•
|
three gas turbine power projects in the U.S. (approximately $1.1 billion combined);
|
•
|
federal funding allocations for our mixed oxide fuel fabrication facility project in the U.S. and scope increases for our LNG mechanical erection project in the Asia Pacific region (approximately $970.0 million combined)
; and
|
•
|
a refinery project in Russia (approximately $460.0 million)
.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
% of
Revenue |
|
2016
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Transaction Receivable Reserve
(1)
|
|
$
|
(544,202
|
)
|
|
(12.0)%
|
|
$
|
291,553
|
|
|
4.8%
|
Transaction Receivable Reserve
(1)
|
|
—
|
|
|
—%
|
|
(148,148
|
)
|
|
—%
|
||
(Loss) income from operations
(1)
|
|
$
|
(544,202
|
)
|
|
(12.0)%
|
|
$
|
143,405
|
|
|
2.3%
|
(1)
|
The break-out of
2016
income from operations represents a non-GAAP financial disclosure, which we believe provides better comparability between our
2017
and
2016
results.
|
•
|
LNG storage tanks in the U.S. (approximately $250.0 million);
|
•
|
storage tanks for a refinery in the Middle East (approximately $140.0 million);
|
•
|
materials supply for an ethylene expansion project in the Asia Pacific region (approximately $85.0 million);
|
•
|
work scopes for the aforementioned ethane cracker project in the U.S. (approximately $80.0 million);
|
•
|
crude oil storage tanks in Central Asia (approximately $50.0 million);
|
•
|
an ethane cracking furnace expansion project in the U.S. (approximately $40.0 million); and
|
•
|
storage tanks for a clean fuels expansion project in the Middle East, crude oil storage tanks in the U.S., and various other storage and pipe fabrication awards throughout the world.
|
•
|
an LNG storage and fueling terminal in the U.S. (approximately $200.0 million);
|
•
|
crude oil storage tanks in Canada (approximately $70.0 million);
|
•
|
crude oil storage tanks in the Middle East (approximately $40.0 million); and
|
•
|
various storage tank and pipe fabrication awards throughout the world.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(In thousands)
|
||||||
Backlog
|
|
$
|
—
|
|
|
$
|
5,447,202
|
|
|
|
|
|
|
||||
|
|
Years Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(In thousands)
|
||||||
New Awards
|
|
$
|
780,783
|
|
|
$
|
2,215,679
|
|
Revenue
|
|
$
|
1,114,655
|
|
|
$
|
2,211,835
|
|
Loss From Operations
|
|
$
|
(30,371
|
)
|
|
$
|
(572,459
|
)
|
% of Revenue
|
|
(2.7
|
)%
|
|
(25.9
|
)%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
% of
Revenue |
|
2016
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Charges
(1)
|
|
$
|
34,446
|
|
|
3.1%
|
|
$
|
82,541
|
|
|
3.7%
|
Loss on net assets sold
(1)
|
|
(64,817
|
)
|
|
—%
|
|
—
|
|
|
—%
|
||
Goodwill Impairment
(1)
|
|
—
|
|
|
—%
|
|
(655,000
|
)
|
|
—%
|
||
Loss from operations
(1)
|
|
$
|
(30,371
|
)
|
|
(2.7)%
|
|
$
|
(572,459
|
)
|
|
(25.9)%
|
(1)
|
The break-out of 2017 and 2016 (loss) income from operations represents a non-GAAP financial disclosure, which we believe provides better comparability between our 2017 and 2016 results.
|
•
|
three gas turbine power projects in the U.S. (approximately $1.1 billion combined);
|
•
|
federal funding allocations for our mixed oxide fuel fabrication facility project in the U.S. and scope increases for our LNG mechanical erection project in the Asia Pacific region (approximately $970.0 million combined); and
|
•
|
a refinery project in Russia (approximately $460.0 million).
|
•
|
petrochemical facility projects in the U.S. (approximately $1.8 billion combined);
|
•
|
our pro-rata share of a $2.8 billion liquids ethylene cracker project and associated units in the Middle East (approximately $1.4 billion) that we are executing through an unconsolidated equity method joint venture arrangement;
|
•
|
scope increases for our LNG mechanical erection project in the Asia Pacific region (approximately $720.0 million);
|
•
|
our proportionate share of a $2.0 billion additional LNG train for an LNG export facility in the U.S. (approximately $675.0 million) that we are executing through a proportionately consolidated joint venture arrangement; and
|
•
|
a gas turbine power project in the U.S. (approximately $600.0 million).
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Total |
|
2015
|
|
% of
Total |
||||
|
|
(In thousands)
|
||||||||||
Excluding Nuclear Operations
(1)
|
|
$
|
8,599,649
|
|
|
100%
|
|
$
|
8,569,645
|
|
|
81%
|
Nuclear Operations
(1)
|
|
—
|
|
|
—%
|
|
2,061,167
|
|
|
19%
|
||
Total revenue
(1)
|
|
$
|
8,599,649
|
|
|
|
|
$
|
10,630,812
|
|
|
|
(1)
|
The break-out of 2015 revenue represents a non-GAAP financial disclosure, which we believe provides better comparability with our 2016 results.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Revenue |
|
2015
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Nuclear Operations
(1)
|
|
$
|
877,410
|
|
|
10.2%
|
|
$
|
1,114,444
|
|
|
13.0%
|
Nuclear Operations
(1)
|
|
—
|
|
|
—%
|
|
239,050
|
|
|
11.6%
|
||
Total gross profit
(1)
|
|
$
|
877,410
|
|
|
10.2%
|
|
$
|
1,353,494
|
|
|
12.7%
|
(1)
|
The break-out of 2015 gross profit represents a non-GAAP financial disclosure, which we believe provides better comparability with our 2016 results.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Revenue |
|
2015
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Nuclear Operations, Charges and Impairments
(1)
|
|
$
|
575,689
|
|
|
6.7%
|
|
$
|
776,114
|
|
|
9.1%
|
Nuclear Operations
(1)
|
|
—
|
|
|
—%
|
|
215,150
|
|
|
10.4%
|
||
Charges related to sale of Nuclear Operations and Impairments
(1)
|
|
(148,148
|
)
|
|
—%
|
|
(1,505,851
|
)
|
|
—%
|
||
Income (loss) from operations
(1)
|
|
$
|
427,541
|
|
|
5.0%
|
|
$
|
(514,587
|
)
|
|
(4.8)%
|
(1)
|
The break-out of 2016 and 2015 income (loss) from operations represents a non-GAAP financial disclosure, which we believe provides better comparability between our 2016 and 2015 results.
|
•
|
three gas turbine power projects in the U.S. (approximately $1.1 billion combined);
|
•
|
federal funding allocations for our mixed oxide fuel fabrication facility project in the U.S. and scope increases for our LNG mechanical erection project in the Asia Pacific region (approximately $970.0 million combined); and
|
•
|
a refinery project in Russia (approximately $460.0 million).
|
•
|
petrochemical facility projects in the U.S. (approximately $1.8 billion combined);
|
•
|
our pro-rata share of a $2.8 billion liquids ethylene cracker project and associated units in the Middle East (approximately $1.4 billion) that we are executing through an unconsolidated equity method joint venture arrangement;
|
•
|
scope increases for our LNG mechanical erection project in the Asia Pacific region (approximately $720.0 million);
|
•
|
our proportionate share of a $2.0 billion additional LNG train for an LNG export facility in the U.S. (approximately $675.0 million) that we are executing through a proportionately consolidated joint venture arrangement;
|
•
|
a gas turbine power project in the U.S. (approximately $600.0 million);
|
•
|
scope increases for our former large nuclear projects in the U.S. (approximately $480.0 million);
|
•
|
an ethylene storage facility in the U.S. (approximately $115.0 million);
|
•
|
a chemicals plant project in the U.S. (approximately $100.0 million); and
|
•
|
engineering and procurement services for a refinery project in Russia.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Total |
|
2015
|
|
% of
Total |
||||
|
|
(In thousands)
|
||||||||||
Excluding Nuclear Operations
(1)
|
|
$
|
6,114,725
|
|
|
100%
|
|
$
|
5,706,540
|
|
|
73%
|
Nuclear Operations
(1)
|
|
—
|
|
|
—%
|
|
2,061,167
|
|
|
27%
|
||
Total revenue
(1)
|
|
$
|
6,114,725
|
|
|
|
|
$
|
7,767,707
|
|
|
|
(1)
|
The break-out of 2015 revenue represents a non-GAAP financial disclosure, which we believe provides better comparability with our 2016 results.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Revenue |
|
2015
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Nuclear Operations, Charges and Impairment
(1)
|
|
$
|
291,553
|
|
|
4.8%
|
|
$
|
404,315
|
|
|
7.1%
|
Nuclear Operations
(1)
|
|
—
|
|
|
—%
|
|
215,150
|
|
|
10.4%
|
||
Charges related to sale of Nuclear Operations and Impairment
(1)
|
|
(148,148
|
)
|
|
—%
|
|
(1,505,851
|
)
|
|
—%
|
||
Income (loss) from operations
(1)
|
|
$
|
143,405
|
|
|
2.3%
|
|
$
|
(886,386
|
)
|
|
(11.4)%
|
(1)
|
The break-out of 2016 and 2015 income (loss) from operations represents a non-GAAP financial disclosure, which we believe provides better comparability between our 2016 and 2015 results.
|
•
|
an LNG storage and fueling terminal in the U.S. (approximately $200.0 million),
|
•
|
crude oil storage tanks in Canada (approximately $70.0 million),
|
•
|
crude oil storage tanks in the Middle East (approximately $40.0 million), and
|
•
|
various storage tank and pipe fabrication awards throughout the world.
|
•
|
low-temperature tanks in the U.S. (approximately $300.0 million),
|
•
|
scope increases for our former large nuclear projects in the U.S. (approximately $250.0 million),
|
•
|
a hydrotreater project in the U.S. (approximately $95.0 million),
|
•
|
engineered products for a refinery in Russia (approximately $93.0 million),
|
•
|
storage spheres in the U.S. (approximately $70.0 million),
|
•
|
storage tanks for a clean fuels project in the Middle East (approximately $60.0 million),
|
•
|
an oil sands project in Canada (approximately $50.0 million),
|
•
|
pipe fabrication for a petrochemical project in the U.S. (approximately $40.0 million), and
|
•
|
work scopes for our U.S. LNG export facility projects that we are executing through our proportionately consolidated joint venture arrangements and work scopes for our liquids ethylene cracker project in the Middle East that we are executing through an unconsolidated equity method joint venture.
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||
Backlog
|
|
$
|
5,447,202
|
|
|
$
|
5,788,059
|
|
|
|
|
|
|
||||
|
|
Years Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||
New Awards
|
|
$
|
2,215,679
|
|
|
$
|
2,866,862
|
|
Revenue
|
|
$
|
2,211,835
|
|
|
$
|
2,385,863
|
|
(Loss) Income From Operations
|
|
$
|
(572,459
|
)
|
|
$
|
89,470
|
|
% of Revenue
|
|
(25.9)%
|
|
3.8%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
% of
Revenue |
|
2015
|
|
% of
Revenue |
||||
|
|
(In thousands)
|
||||||||||
Excluding Impairment
(1)
|
|
$
|
82,541
|
|
|
3.7%
|
|
$
|
89,470
|
|
|
3.8%
|
Charge related to Impairment
(1)
|
|
(655,000
|
)
|
|
—%
|
|
—
|
|
|
—%
|
||
(Loss) income from operations
(1)
|
|
$
|
(572,459
|
)
|
|
(25.9)%
|
|
$
|
89,470
|
|
|
3.8%
|
(1)
|
The break-out of 2016 (loss) income from operations represents a non-GAAP financial disclosure, which we believe provides better comparability with our 2015 results.
|
|
|
Continuing Operations
|
|
Capital Services
(2)
|
|
Consolidated
|
||||||||||||||
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Change
|
|
Change
|
|
Change
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Total billings in excess of costs and estimated earnings
(1)
|
|
$
|
(1,275,441
|
)
|
|
$
|
(1,395,349
|
)
|
|
$
|
119,908
|
|
|
$
|
6,482
|
|
|
$
|
126,390
|
|
Total costs and estimated earnings in excess of billings
(1)
|
|
315,744
|
|
|
410,749
|
|
|
(95,005
|
)
|
|
(3,332
|
)
|
|
(98,337
|
)
|
|||||
Contracts in Progress, net
|
|
(959,697
|
)
|
|
(984,600
|
)
|
|
24,903
|
|
|
3,150
|
|
|
28,053
|
|
|||||
Accounts receivable, net
|
|
759,701
|
|
|
488,513
|
|
|
271,188
|
|
|
(9,973
|
)
|
|
261,215
|
|
|||||
Inventory
|
|
101,573
|
|
|
190,102
|
|
|
(88,529
|
)
|
|
(1,704
|
)
|
|
(90,233
|
)
|
|||||
Accounts payable
|
|
(971,735
|
)
|
|
(964,548
|
)
|
|
(7,187
|
)
|
|
70,294
|
|
|
63,107
|
|
|||||
Contract Capital, net
|
|
$
|
(1,070,158
|
)
|
|
$
|
(1,270,533
|
)
|
|
$
|
200,375
|
|
|
$
|
61,767
|
|
|
$
|
262,142
|
|
(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)
|
Although our Capital Services Operations were sold on June 30, 2017 and reported as a discontinued operation in our December 31, 2016 Balance Sheet, our Statement of Cash Flows reflects the changes in Contract Capital balances (and all balance sheet components) during the six months ended June 30, 2017 (prior to the Closing Date) on a non-discontinued operations basis.
|
•
|
Series A—Interest due semi-annually at a fixed rate of
9.15%
, with principal of
$104.7 million
due in August 2018 (as a result of the December 18, 2017 amendment described below)
|
•
|
Series B—Interest due semi-annually at a fixed rate of
7.57%
, with principal of
$165.8 million
due in December 2019
|
•
|
Series C—Interest due semi-annually at a fixed rate of
8.15%
, with principal of
$195.2 million
due in December 2022
|
•
|
Series D—Interest due semi-annually at a fixed rate of
8.30%
, with principal of
$118.9 million
due in December 2024
|
•
|
Required us to secure the Senior Facilities through the pledge of cash, accounts receivable, inventory, fixed assets, certain real property, and stock of subsidiaries, which was in the process of being completed as of December 31, 2017, and will result in substantially all of our assets, subject to customary exceptions, being pledged as collateral for our Senior Facilities.
|
•
|
Required us to repay portions of the Senior Facilities with all of the net proceeds from the sale of our Capital Services Operations (which occurred on June 30, 2017), the issuance of any unsecured debt that is subordinate (“Subordinated Debt”) to the Senior Facilities, the issuance of any equity securities, or the sale of any assets.
|
•
|
Replaced the previous financial letter of credit sublimits for our Revolving Facility and Second Revolving Facility with a
$100.0 million
letter of credit sublimit for each.
|
•
|
Prohibited mergers and acquisitions, open-market share repurchases and dividend payments and certain inter-company transactions.
|
•
|
Adjusted the interest rates on our Senior Facilities.
|
•
|
Required us to execute on our plan to market and sell our Technology Operations by December 27, 2017 (the “Technology Sale”), with an extension of up to 60 days at the discretion of the holders of a majority of the outstanding Notes and at the discretion of the administrative agents of the Bank Facilities.
|
•
|
Required us to maintain a minimum aggregate availability under our Committed Facilities, including borrowings and letters of credit, of
$150.0 million
at all times from the date of the applicable amendment through the date of the Technology Sale, and
$250.0 million
thereafter (“Minimum Availability”). Our amendments required the proceeds from the Technology Sale be used to repay our Senior Facilities (“Mandatory Repayment Amount”). Further, our aggregate capacity under the Committed Facilities would be reduced by seventy percent (
70%
) of the portion of the Mandatory Repayment Amount allocable to the Committed Facilities, upon closing the Technology Sale and certain other mandatory prepayment events.
|
•
|
Required minimum levels of trailing 12-month earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined by the amendments, as follows:
$500.0 million
at September 30, 2017;
$550.0 million
at December 31, 2017;
$500.0 million
at March 31, 2018;
$450.0 million
at June 30, 2018 and September 30, 2018; and
$425.0 million
at December 31, 2018 and thereafter (“Minimum EBITDA”). Trailing 12-month EBITDA for purposes of determining compliance with the Minimum EBITDA covenant is adjusted to exclude: an agreed amount attributable to restructuring or integration charges during the third and fourth quarters of 2017; an agreed amount attributable to previous charges on certain projects which occurred during the first and second quarters of 2017; and an agreed
|
•
|
Provided for an amended maximum leverage ratio and minimum fixed charge ratio of
1.75
(“Maximum Leverage Ratio”) and new minimum fixed charge coverage ratio of
2.25
(“Minimum Fixed Charge Coverage Ratio”), which were temporarily suspended and would resume as of March 31, 2018. Trailing 12-month EBITDA for purposes of determining compliance with the Maximum Leverage Ratio and consolidated net income for purposes of determining compliance with the Minimum Fixed Charge Coverage Ratio would be adjusted for the EBITDA Addbacks.
|
•
|
Limited the amount of certain of our funded indebtedness to
$3.0 billion
prior to the Technology Sale and
$2.9 billion
thereafter, in each case, subject to reduction pursuant to scheduled repayments and mandatory prepayments thereof (but, with respect to the Committed Facilities, only to the extent the commitments have been reduced by such prepayments) made by us after August 9, 2017.
|
•
|
Waive any noncompliance with the Maximum Leverage Ratio or Minimum Fixed Charge Coverage Ratio beginning on the Effective Date and ending on the earlier of (i) June 18, 2018 or (ii) the occurrence of certain Combination termination events (the “Covenant Relief Period”).
|
•
|
Extend the maturity of the Series A Senior Notes, from December 27, 2017 to August 31, 2018 and increase the interest rates on the Series A Senior Notes.
|
•
|
Reduce the Minimum Availability threshold for the Committed Facilities from
$150.0 million
to
$50.0 million
during the Covenant Relief Period.
|
•
|
Adjust the required minimum levels of trailing 12-month EBITDA as follows:
$550.0 million
at December 31, 2017,
$500.0 million
at March 31, 2018,
$500.0 million
at June 30, 2018,
$550.0 million
at September 30, 2018, and
$575.0 million
at December 31, 2018 and each quarter thereafter.
|
•
|
For the duration of the Covenant Relief Period, increase the amount of certain of our funded indebtedness from
$3.0 billion
to
$3.1 billion
less the aggregate amount of all scheduled repayments and mandatory prepayments of such funded indebtedness made after the August 9, 2017 amendment date.
|
•
|
Suspend the requirement to consummate the Technology Sale and require the completion of the Combination by June 18, 2018 (the “Combination Closing Deadline”), subject to earlier milestones including: (i) filing of a joint proxy statement/prospectus (“Form S-4”) by February 15, 2018, (ii) filing of a solicitation/recommendation statement on Schedule 14D-9 as promptly as reasonably practicable following (but in any event by no later than 10 business days after) the commencement of the exchange offer related to the Combination, and (iii) duly calling and giving notice of a meeting of the Company’s shareholders as promptly as reasonably practicable after the Form S-4 is declared effective under the Securities Act of 1933, as amended (but in any event by no later than May 18, 2018) (collectively, the “Combination Milestones”).
|
•
|
Provide for the mandatory repayment of the outstanding debt under the Senior Facilities on the day of the closing of the Combination, which in the case of the Notes, is to be at the price of the make-whole amount as modified by the amendments. During 2017, we accrued approximately $35.0 million within interest expense related to the anticipated modified make-whole payment.
|
•
|
Provide for certain events of default in respect of the Combination, including: (i) termination of documentation related to the Combination, (ii) failure of the applicable proposals related to the Combination to be brought for a vote by the shareholders of the Company or McDermott, (iii) the failure of the shareholders of either McDermott or the Company to approve the applicable proposals related to the Combination at their respective shareholder meetings, subject to a seven day grace period, (iv) the supervisory board of directors of the Company changing its recommendation to the Company’s shareholders in respect of the Combination, or (v) the failure of certain financing commitments in respect of the Combination, subject to customary minimum thresholds.
|
•
|
Provide for certain other information and modified reporting rights, modifications to mandatory prepayment requirements, and consent rights of the holders of the outstanding Notes and administrative agents of the Bank Facilities as more fully set forth in the amendments.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Senior Notes
(1)
|
|
$
|
628,418
|
|
|
$
|
628,418
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Second Senior Notes
(2)
|
|
155,363
|
|
|
155,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Second Term Loan
(3)
|
|
455,527
|
|
|
455,527
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
|
235,441
|
|
|
55,633
|
|
|
74,395
|
|
|
47,204
|
|
|
58,209
|
|
|||||
Information technology (“IT”) obligations
(4)
|
|
35,495
|
|
|
27,204
|
|
|
6,158
|
|
|
2,133
|
|
|
—
|
|
|||||
Self-insurance obligations
(5)
|
|
21,034
|
|
|
21,034
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension funding obligations
(6)
|
|
18,242
|
|
|
18,242
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Postretirement benefit funding obligations
(6)
|
|
2,357
|
|
|
2,357
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations
(7)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unrecognized tax benefits
(8)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
1,551,877
|
|
|
$
|
1,363,778
|
|
|
$
|
80,553
|
|
|
$
|
49,337
|
|
|
$
|
58,209
|
|
(1)
|
Includes interest accruing on our outstanding
$584.6 million
Senior Notes at a weighted average fixed rate of
8.20%
, and the anticipated modified make-whole payment that is required as a result of early repayment of the Senior Notes in connection with the Combination.
|
(2)
|
Includes interest accruing on our outstanding
$141.9 million
Second Senior Notes at a fixed rate of
7.53%
, and the anticipated modified make-whole payment that is required as a result of early repayment of the Second Senior Notes in connection with the Combination.
|
(3)
|
Includes interest accruing on our outstanding
$440.7 million
Second Term Loan at a rate of
7.07%
.
|
(4)
|
Represents commitments for IT technical support and software maintenance contracts.
|
(5)
|
Represents expected
2018
payments associated with our self-insurance programs. Payments beyond one year have not been included as amounts are not determinable.
|
(6)
|
Represents expected
2018
contributions to fund our defined benefit pension and other postretirement plans. Contributions beyond one year have not been included as amounts are not determinable.
|
(7)
|
In the ordinary course of business, we enter into commitments (which are expected to be recovered from our customers) for the purchase of materials and supplies on our projects. We do not enter into long-term purchase commitments on a speculative basis for fixed or minimum quantities.
|
(8)
|
Payments for income tax reserves of
$16.3 million
are not included as the timing of specific tax payments is not determinable.
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group represented a reporting unit.
|
•
|
Technology
—Our Technology operating group represented a reporting unit.
|
•
|
Capital Services
—Our Capital Services operating group included two reporting units: Facilities & Plant Services and Federal Services.
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group (excluding Engineered Products) represented a reporting unit.
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group included two reporting units: Engineered Products and Fabrication Services (excluding Engineered Products).
|
•
|
Technology
—Our Technology operating group represented a reporting unit.
|
•
|
The operations that resulted in such losses were either sold as of December 31, 2016 or contemplated for sale as of the filing of our 2016 Form 10-K. Specifically, absent the charges related to the exited businesses (including non-deductible goodwill charges), our cumulative U.S. income for the three years ended December 31, 2016 was approximately
$1.1 billion
;
|
•
|
We had a history of U.S. income prior to incurring the losses during 2015 and 2016. Specifically, our cumulative U.S. income for the ten year period ended December 31, 2014 was approximately
$1.5 billion
;
|
•
|
In spite of such U.S. losses during 2015 and 2016, we were not in a cumulative loss position for the three years ended December 31, 2016 on a consolidated basis; and
|
•
|
Our projections of U.S. income, inclusive of the reversal of taxable temporary differences, indicated we would realize our U.S. NOL DTAs over ten years prior to their expiration in 2035. Our projections of U.S. income were supported by a significant U.S. backlog of approximately
$9.3
billion at December 31, 2016, and a strong forecasted U.S. market for our EPC and technology products and services.
|
•
|
The aforementioned history of U.S. income and the fact that we had exited the businesses that resulted in the losses for 2015 and 2016;
|
•
|
In July 2017, we initiated steps to market and sell our Technology Operations (discussed in
Note 2
within Item 8) and classified the Technology Operations as a discontinued operation during the third quarter 2017. We anticipated that proceeds from the transaction would result in a significant U.S. taxable gain that would be realized during the fourth quarter 2017 or prior to filing our 2017 Form 10-K. Including the anticipated taxable gain, we projected we would not have a cumulative loss on a consolidated basis for the three years ending December 31, 2017. Further, including the anticipated taxable gain and excluding the non-deductible goodwill charges, we projected we would not have a cumulative loss in the U.S. for the three years ending December 31, 2017; and
|
•
|
The aforementioned taxable gain would result in the accelerated realization of a significant portion of our U.S. NOL DTAs. Further, our projections of U.S. income, inclusive of the reversal of taxable temporary differences, indicated we would continue to realize the remaining U.S. NOL DTAs over ten years prior to their expiration in 2035.
|
•
|
The Combination, which we anticipate will close in the second quarter 2018, will result in the sale of our Technology Operations to McDermott in advance of the consummation of the transaction (“Combination Technology Sale”), which will result in a significant U.S. taxable gain similar to the gain anticipated in connection with the original Technology Sale.
|
•
|
Our projections of U.S. income, inclusive of the reversal of taxable temporary differences and the anticipated gain resulting from the Combination, indicate we will continue to realize the remaining U.S. NOL DTAs prior to their expiration in
2037
.
|
|
Page
|
/s/ Patrick K. Mullen
|
|
/s/ Michael S. Taff
|
Patrick K. Mullen
|
|
Michael S. Taff
|
President and
|
|
Executive Vice President and
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Revenue
|
$
|
6,673,330
|
|
|
$
|
8,599,649
|
|
|
$
|
10,630,812
|
|
Cost of revenue
|
6,666,218
|
|
|
7,722,239
|
|
|
9,277,318
|
|
|||
Gross profit
|
7,112
|
|
|
877,410
|
|
|
1,353,494
|
|
|||
Selling and administrative expense
|
275,421
|
|
|
298,041
|
|
|
336,282
|
|
|||
Intangibles amortization
|
25,841
|
|
|
25,839
|
|
|
37,665
|
|
|||
Equity earnings
|
(48,397
|
)
|
|
(24,570
|
)
|
|
(14,777
|
)
|
|||
Goodwill impairment (Note 7)
|
—
|
|
|
—
|
|
|
453,100
|
|
|||
Loss on net assets sold and intangible assets impairment (Note 4)
|
—
|
|
|
148,148
|
|
|
1,052,751
|
|
|||
Restructuring related costs (Note 10)
|
114,525
|
|
|
—
|
|
|
—
|
|
|||
Other operating (income) expense, net (Note 2)
|
(64,916
|
)
|
|
2,411
|
|
|
3,060
|
|
|||
(Loss) income from operations
|
(295,362
|
)
|
|
427,541
|
|
|
(514,587
|
)
|
|||
Interest expense
|
(228,945
|
)
|
|
(81,240
|
)
|
|
(70,503
|
)
|
|||
Interest income
|
3,144
|
|
|
11,849
|
|
|
7,041
|
|
|||
(Loss) income from operations before taxes
|
(521,163
|
)
|
|
358,150
|
|
|
(578,049
|
)
|
|||
Income tax (expense) benefit
|
(798,935
|
)
|
|
20,926
|
|
|
102,194
|
|
|||
Net (loss) income from continuing operations
|
(1,320,098
|
)
|
|
379,076
|
|
|
(475,855
|
)
|
|||
Net (loss) income from discontinued operations (Note 5)
|
(104,463
|
)
|
|
(618,899
|
)
|
|
45,894
|
|
|||
Net loss
|
(1,424,561
|
)
|
|
(239,823
|
)
|
|
(429,961
|
)
|
|||
Less: Net income attributable to noncontrolling interests ($870, $2,187 and $2,511 related to discontinued operations)
|
(33,632
|
)
|
|
(73,346
|
)
|
|
(74,454
|
)
|
|||
Net loss attributable to CB&I
|
$
|
(1,458,193
|
)
|
|
$
|
(313,169
|
)
|
|
$
|
(504,415
|
)
|
Net (loss) income attributable to CB&I per share (Basic):
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(13.40
|
)
|
|
$
|
2.99
|
|
|
$
|
(5.13
|
)
|
Discontinued operations
|
(1.04
|
)
|
|
(6.04
|
)
|
|
0.41
|
|
|||
Total
|
$
|
(14.44
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(4.72
|
)
|
Net (loss) income attributable to CB&I per share (Diluted):
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(13.40
|
)
|
|
$
|
2.97
|
|
|
$
|
(5.13
|
)
|
Discontinued operations
|
(1.04
|
)
|
|
(5.99
|
)
|
|
0.41
|
|
|||
Total
|
$
|
(14.44
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(4.72
|
)
|
Cash dividends on shares:
|
|
|
|
|
|
||||||
Amount
|
$
|
14,109
|
|
|
$
|
28,733
|
|
|
$
|
29,847
|
|
Per share
|
$
|
0.14
|
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net loss
|
$
|
(1,424,561
|
)
|
|
$
|
(239,823
|
)
|
|
$
|
(429,961
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Change in cumulative translation adjustment (net of tax of $0, ($3,884) and $960)
|
83,177
|
|
|
(55,966
|
)
|
|
(76,893
|
)
|
|||
Change in unrealized fair value of cash flow hedges (net of tax of ($117), ($475) and ($678))
|
512
|
|
|
754
|
|
|
1,746
|
|
|||
Change in unrecognized prior service pension credits/costs (net of tax of $68, $200 and $316)
|
(136
|
)
|
|
(516
|
)
|
|
(819
|
)
|
|||
Change in unrecognized actuarial pension gains/losses (net of tax of $1,253, $15,184 and ($17,445))
|
(2,396
|
)
|
|
(46,533
|
)
|
|
42,924
|
|
|||
Other comprehensive loss from discontinued operations - change in cumulative translation adjustment (net of tax of $0, $0 and $0)
|
270
|
|
|
(131
|
)
|
|
(1,235
|
)
|
|||
Comprehensive loss
|
(1,343,134
|
)
|
|
(342,215
|
)
|
|
(464,238
|
)
|
|||
Net income attributable to noncontrolling interests (net of tax of $0, $0 and ($124)); ($870, $2,187 and $2,511 related to discontinued operations, net of tax of $0, $0 and $0)
|
(33,632
|
)
|
|
(73,346
|
)
|
|
(74,454
|
)
|
|||
Change in cumulative translation adjustment attributable to noncontrolling interests (net of tax of $0, $0 and $0)
|
(2,319
|
)
|
|
816
|
|
|
2,634
|
|
|||
Comprehensive loss attributable to CB&I
|
$
|
(1,379,085
|
)
|
|
$
|
(414,745
|
)
|
|
$
|
(536,058
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Assets
|
|
|
|
||||
Cash and cash equivalents ($165,771 and $328,387 related to variable interest entities ("VIEs"))
|
$
|
354,639
|
|
|
$
|
490,679
|
|
Accounts receivable, net ($42,288 and $53,159 related to VIEs)
|
759,701
|
|
|
488,513
|
|
||
Inventory (Note 6)
|
101,573
|
|
|
190,102
|
|
||
Costs and estimated earnings in excess of billings ($42,997 and $26,186 related to VIEs) (Note 2)
|
315,744
|
|
|
410,749
|
|
||
Current assets of discontinued operations (Note 5)
|
—
|
|
|
414,732
|
|
||
Assets held for sale (Note 10)
|
17,845
|
|
|
—
|
|
||
Other current assets ($163,810 and $426,515 related to VIEs) (Note 9)
|
281,171
|
|
|
546,977
|
|
||
Total current assets
|
1,830,673
|
|
|
2,541,752
|
|
||
Equity investments (Note 8)
|
206,118
|
|
|
165,256
|
|
||
Property and equipment, net (Note 9)
|
418,531
|
|
|
505,944
|
|
||
Goodwill (Note 7)
|
2,836,582
|
|
|
2,813,803
|
|
||
Other intangibles, net (Note 7)
|
196,473
|
|
|
219,409
|
|
||
Deferred income taxes (Note 17)
|
—
|
|
|
730,108
|
|
||
Non-current assets of discontinued operations (Note 5)
|
—
|
|
|
462,144
|
|
||
Other non-current assets ($74,067 and $5,484 related to VIEs) (Note 9)
|
483,205
|
|
|
401,004
|
|
||
Total assets
|
$
|
5,971,582
|
|
|
$
|
7,839,420
|
|
Liabilities
|
|
|
|
||||
Revolving facility and other short-term borrowings (Note 11)
|
$
|
1,102,151
|
|
|
$
|
407,500
|
|
Current maturities of long-term debt, net (Note 11)
|
1,160,291
|
|
|
503,910
|
|
||
Accounts payable ($348,872 and $337,089 related to VIEs)
|
971,735
|
|
|
964,548
|
|
||
Billings in excess of costs and estimated earnings ($130,484 and $407,325 related to VIEs) (Note 2)
|
1,275,441
|
|
|
1,395,349
|
|
||
Current liabilities of discontinued operations (Note 5)
|
—
|
|
|
247,469
|
|
||
Other current liabilities (Note 9)
|
752,294
|
|
|
1,017,473
|
|
||
Total current liabilities
|
5,261,912
|
|
|
4,536,249
|
|
||
Long-term debt, net (Note 11)
|
—
|
|
|
1,287,923
|
|
||
Deferred income taxes (Note 17)
|
63,771
|
|
|
7,307
|
|
||
Non-current liabilities of discontinued operations (Note 5)
|
—
|
|
|
5,388
|
|
||
Other non-current liabilities (Note 9)
|
427,535
|
|
|
441,216
|
|
||
Total liabilities
|
5,753,218
|
|
|
6,278,083
|
|
||
Commitments and contingencies (Note 14)
|
—
|
|
|
—
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Common stock, Euro .01 par value; shares authorized: 250,000; shares issued: 108,857 and 108,857; shares outstanding: 101,705 and 100,113
|
1,288
|
|
|
1,288
|
|
||
Additional paid-in capital
|
743,128
|
|
|
782,130
|
|
||
Retained (deficit) earnings
|
(101,696
|
)
|
|
1,370,606
|
|
||
Treasury stock, at cost: 7,152 and 8,744 shares
|
(254,642
|
)
|
|
(344,870
|
)
|
||
Accumulated other comprehensive loss (Note 15)
|
(316,508
|
)
|
|
(395,616
|
)
|
||
Total CB&I shareholders’ equity
|
71,570
|
|
|
1,413,538
|
|
||
Noncontrolling interests (Note 8) ($0 and $6,874 related to discontinued operations)
|
146,794
|
|
|
147,799
|
|
||
Total shareholders’ equity
|
218,364
|
|
|
1,561,337
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,971,582
|
|
|
$
|
7,839,420
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(1,424,561
|
)
|
|
$
|
(239,823
|
)
|
|
$
|
(429,961
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
92,248
|
|
|
122,522
|
|
|
161,135
|
|
|||
Amortization of debt issuance costs
|
46,721
|
|
|
5,130
|
|
|
6,377
|
|
|||
Goodwill impairment
|
—
|
|
|
655,000
|
|
|
453,100
|
|
|||
Loss on net assets sold and intangible assets impairment (net of cash paid for transaction costs of $13,075 for 2017)
|
51,742
|
|
|
148,148
|
|
|
1,040,751
|
|
|||
Loss on net assets held for sale
|
17,397
|
|
|
—
|
|
|
—
|
|
|||
Gain from insurance recoveries
|
(62,664
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
792,121
|
|
|
(86,881
|
)
|
|
(146,453
|
)
|
|||
Stock-based compensation expense
|
52,930
|
|
|
39,611
|
|
|
57,506
|
|
|||
Other operating expense, net (excluding gain from insurance recoveries)
|
1,624
|
|
|
2,339
|
|
|
2,619
|
|
|||
Unrealized loss on foreign currency hedges
|
2,103
|
|
|
2,178
|
|
|
2,853
|
|
|||
Excess tax benefits from stock-based compensation
|
—
|
|
|
(51
|
)
|
|
(287
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
(Increase) decrease in receivables, net
|
(261,215
|
)
|
|
603,558
|
|
|
(213,508
|
)
|
|||
Change in contracts in progress, net
|
(28,053
|
)
|
|
(360,486
|
)
|
|
(939,608
|
)
|
|||
Decrease (increase) in inventory
|
90,233
|
|
|
95,528
|
|
|
(6,091
|
)
|
|||
(Decrease) increase in accounts payable
|
(63,107
|
)
|
|
(56,501
|
)
|
|
105,856
|
|
|||
Increase in other current and non-current assets
|
(35,998
|
)
|
|
(232,075
|
)
|
|
(36,224
|
)
|
|||
Decrease in other current and non-current liabilities
|
(103,372
|
)
|
|
(40,512
|
)
|
|
(151,458
|
)
|
|||
(Increase) decrease in equity investments
|
(29,782
|
)
|
|
(14,932
|
)
|
|
22,117
|
|
|||
Change in other, net
|
(47,720
|
)
|
|
11,705
|
|
|
15,062
|
|
|||
Net cash (used in) provided by operating activities
|
(909,353
|
)
|
|
654,458
|
|
|
(56,214
|
)
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Proceeds from sale of discontinued operation, net of cash sold
|
645,506
|
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(46,168
|
)
|
|
(52,462
|
)
|
|
(78,852
|
)
|
|||
Advances with partners of proportionately consolidated ventures, net
|
235,946
|
|
|
(49,755
|
)
|
|
(253,890
|
)
|
|||
Proceeds from sale of property and equipment
|
9,344
|
|
|
4,763
|
|
|
9,235
|
|
|||
Proceeds from insurance recoveries
|
99,000
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(14,918
|
)
|
|
(71,835
|
)
|
|
(58,169
|
)
|
|||
Net cash provided by (used in) investing activities
|
928,710
|
|
|
(169,289
|
)
|
|
(381,676
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Revolving facility and other short-term borrowing (repayments), net
|
694,651
|
|
|
(245,500
|
)
|
|
488,259
|
|
|||
Long-term borrowings
|
—
|
|
|
—
|
|
|
700,000
|
|
|||
Advances with equity method and proportionately consolidated ventures, net
|
(229,225
|
)
|
|
206,583
|
|
|
226,191
|
|
|||
Repayments on long-term debt
|
(632,781
|
)
|
|
(150,000
|
)
|
|
(420,155
|
)
|
|||
Excess tax benefits from stock-based compensation
|
—
|
|
|
51
|
|
|
287
|
|
|||
Purchase of treasury stock
|
(13,517
|
)
|
|
(206,569
|
)
|
|
(230,814
|
)
|
|||
Issuance of stock
|
11,743
|
|
|
16,329
|
|
|
20,164
|
|
|||
Dividends paid
|
(14,109
|
)
|
|
(28,733
|
)
|
|
(29,847
|
)
|
|||
Distributions to noncontrolling interests
|
(29,921
|
)
|
|
(74,331
|
)
|
|
(56,681
|
)
|
|||
Capitalized debt issuance costs
|
(44,134
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(257,293
|
)
|
|
(482,170
|
)
|
|
697,404
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
87,419
|
|
|
(48,064
|
)
|
|
(60,616
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
(150,517
|
)
|
|
(45,065
|
)
|
|
198,898
|
|
|||
Cash and cash equivalents, beginning of the year
|
505,156
|
|
|
550,221
|
|
|
351,323
|
|
|||
Cash and cash equivalents, end of the year
|
$
|
354,639
|
|
|
$
|
505,156
|
|
|
$
|
550,221
|
|
Cash and cash equivalents, end of the year - discontinued operations
|
—
|
|
|
(14,477
|
)
|
|
(14,507
|
)
|
|||
Cash and cash equivalents, end of the year - continuing operations
|
$
|
354,639
|
|
|
$
|
490,679
|
|
|
$
|
535,714
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
148,413
|
|
|
$
|
99,333
|
|
|
$
|
83,147
|
|
Cash paid for income taxes, net
|
$
|
84,849
|
|
|
$
|
44,873
|
|
|
$
|
132,489
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings (Deficit)
|
|
Treasury Stock
|
|
(Note 15)
Accumulated
Other
Comprehensive(Loss) Income
|
|
Non -
controlling Interests
|
|
Total
Shareholders’ Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
(In thousands, except per share data)
|
|||||||||||||||||||||||||||||||||
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 (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(504,415
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,454
|
|
|
(429,961
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|
(3,750
|
)
|
|||||||
Change in cumulative translation adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,494
|
)
|
|
(2,634
|
)
|
|
(78,128
|
)
|
|||||||
Change in unrealized fair value of cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,746
|
|
|
—
|
|
|
1,746
|
|
|||||||
Change in unrecognized prior service pension credits/costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(819
|
)
|
|
—
|
|
|
(819
|
)
|
|||||||
Change in unrecognized actuarial pension gains/losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,924
|
|
|
—
|
|
|
42,924
|
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,681
|
)
|
|
(56,681
|
)
|
|||||||
Dividends paid ($0.28 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,847
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,847
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
57,506
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,506
|
|
|||||||
Issuance to treasury stock
|
—
|
|
|
5
|
|
|
19,894
|
|
|
—
|
|
|
450
|
|
|
(19,899
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury stock
|
(5,001
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,001
|
|
|
(230,814
|
)
|
|
—
|
|
|
—
|
|
|
(230,814
|
)
|
|||||||
Issuance of stock
|
1,622
|
|
|
—
|
|
|
(53,623
|
)
|
|
—
|
|
|
(1,622
|
)
|
|
68,734
|
|
|
—
|
|
|
—
|
|
|
15,111
|
|
|||||||
Balance at December 31, 2015
|
104,427
|
|
|
1,288
|
|
|
800,641
|
|
|
1,712,508
|
|
|
4,430
|
|
|
(206,407
|
)
|
|
(294,040
|
)
|
|
149,600
|
|
|
2,163,590
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(313,169
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73,346
|
|
|
(239,823
|
)
|
|||||||
Change in cumulative translation adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,281
|
)
|
|
(816
|
)
|
|
(56,097
|
)
|
|||||||
Change in unrealized fair value of cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
754
|
|
|
—
|
|
|
754
|
|
|||||||
Change in unrecognized prior service pension credits/costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(516
|
)
|
|
—
|
|
|
(516
|
)
|
|||||||
Change in unrecognized actuarial pension gains/losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,533
|
)
|
|
—
|
|
|
(46,533
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,331
|
)
|
|
(74,331
|
)
|
|||||||
Dividends paid ($0.28 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,733
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,733
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
39,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,611
|
|
|||||||
Purchase of treasury stock
|
(5,772
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,772
|
|
|
(206,569
|
)
|
|
—
|
|
|
—
|
|
|
(206,569
|
)
|
|||||||
Issuance of stock
|
1,458
|
|
|
—
|
|
|
(58,122
|
)
|
|
—
|
|
|
(1,458
|
)
|
|
68,106
|
|
|
—
|
|
|
—
|
|
|
9,984
|
|
|||||||
Balance at December 31, 2016
|
100,113
|
|
|
1,288
|
|
|
782,130
|
|
|
1,370,606
|
|
|
8,744
|
|
|
(344,870
|
)
|
|
(395,616
|
)
|
|
147,799
|
|
|
1,561,337
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,458,193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,632
|
|
|
(1,424,561
|
)
|
|||||||
Disposition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,035
|
)
|
|
(7,035
|
)
|
|||||||
Change in cumulative translation adjustment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,128
|
|
|
2,319
|
|
|
83,447
|
|
|||||||
Change in unrealized fair value of cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
512
|
|
|
—
|
|
|
512
|
|
|||||||
Change in unrecognized prior service pension credits/costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
(136
|
)
|
|||||||
Change in unrecognized actuarial pension gains/losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,396
|
)
|
|
—
|
|
|
(2,396
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,921
|
)
|
|
(29,921
|
)
|
|||||||
Dividends paid ($0.14 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,109
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
52,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,930
|
|
|||||||
Purchase of treasury stock
|
(551
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
551
|
|
|
(13,517
|
)
|
|
—
|
|
|
—
|
|
|
(13,517
|
)
|
|||||||
Issuance of stock
|
2,143
|
|
|
—
|
|
|
(91,932
|
)
|
|
—
|
|
|
(2,143
|
)
|
|
103,745
|
|
|
—
|
|
|
—
|
|
|
11,813
|
|
|||||||
Balance at December 31, 2017
|
101,705
|
|
|
$
|
1,288
|
|
|
$
|
743,128
|
|
|
$
|
(101,696
|
)
|
|
7,152
|
|
|
$
|
(254,642
|
)
|
|
$
|
(316,508
|
)
|
|
$
|
146,794
|
|
|
$
|
218,364
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Costs and estimated earnings on contracts in progress
|
|
$
|
7,267,316
|
|
|
$
|
26,901,501
|
|
|
$
|
8,466,638
|
|
|
$
|
23,408,316
|
|
Billings on contracts in progress
|
|
(6,951,572
|
)
|
|
(28,176,942
|
)
|
|
(8,055,889
|
)
|
|
(24,803,665
|
)
|
||||
Contracts in progress, net
|
|
$
|
315,744
|
|
|
$
|
(1,275,441
|
)
|
|
$
|
410,749
|
|
|
$
|
(1,395,349
|
)
|
•
|
Revenue for our third party pipe and steel fabrication contracts and “non-generic” catalyst contracts are currently recognized at a point in time upon shipment; however, under the new standard we anticipate revenue will be recognized over time utilizing the cost-to-cost measure of progress.
|
•
|
Revenue for our “generic” catalyst contracts will be recognized at a point in time upon shipment of the manufactured units, consistent with current practice.
|
•
|
Revenue for our inter-company pipe and steel fabrication contracts will be recognized over time utilizing the cost-to-cost measure of progress, consistent with current practice.
|
•
|
Revenue for our service contracts will be recognized at a point in time as services are performed, or over time utilizing the cost-to-cost measure of progress, depending upon the nature of the service contracts, consistent with current practice.
|
•
|
Revenue for our remaining backlog, primarily representing our EPC contracts, engineering contracts and construction contracts, will be recognized over time utilizing the cost-to-cost measure of progress, consistent with current practice.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income from continuing operations attributable to CB&I (net of $32,762, $71,159 and $71,943 of noncontrolling interests)
|
|
$
|
(1,352,860
|
)
|
|
$
|
307,917
|
|
|
$
|
(547,798
|
)
|
Net (loss) income from discontinued operations attributable to CB&I (net of $870, $2,187 and $2,511 of noncontrolling interests)
|
|
(105,333
|
)
|
|
(621,086
|
)
|
|
43,383
|
|
|||
Net loss attributable to CB&I
|
|
$
|
(1,458,193
|
)
|
|
$
|
(313,169
|
)
|
|
$
|
(504,415
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding—basic
|
|
100,991
|
|
|
102,811
|
|
|
106,766
|
|
|||
Effect of restricted shares/performance based shares/stock options
(1)
|
|
—
|
|
|
837
|
|
|
—
|
|
|||
Effect of directors’ deferred-fee shares
(1)
|
|
—
|
|
|
14
|
|
|
—
|
|
|||
Weighted average shares outstanding—diluted
|
|
100,991
|
|
|
103,662
|
|
|
106,766
|
|
|||
Net (loss) income attributable to CB&I per share (Basic):
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(13.40
|
)
|
|
$
|
2.99
|
|
|
$
|
(5.13
|
)
|
Discontinued operations
|
|
(1.04
|
)
|
|
(6.04
|
)
|
|
0.41
|
|
|||
Total
|
|
$
|
(14.44
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(4.72
|
)
|
Net (loss) income attributable to CB&I per share (Diluted):
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(13.40
|
)
|
|
$
|
2.97
|
|
|
$
|
(5.13
|
)
|
Discontinued operations
|
|
(1.04
|
)
|
|
(5.99
|
)
|
|
0.41
|
|
|||
Total
|
|
$
|
(14.44
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(4.72
|
)
|
(1)
|
The effect of restricted shares, performance based shares, stock options and directors’ deferred-fee shares were not included in the calculation of diluted EPS for
2017
and
2015
due to the net loss from continuing operations for the period. Antidilutive shares excluded from diluted EPS were not material for
2016
.
|
|
|
Year Ended
December 31, 2015
|
||
Loss on net assets sold
|
|
$
|
973,651
|
|
Intangible assets impairment
|
|
79,100
|
|
|
Loss on net assets sold and intangible assets impairment
|
|
1,052,751
|
|
|
Goodwill impairment
|
|
453,100
|
|
|
Total pre-tax charge
|
|
$
|
1,505,851
|
|
|
|
Year Ended
December 31, 2015
|
||
Revenue
|
|
$
|
2,061,167
|
|
Pre-tax income
|
|
$
|
215,150
|
|
|
|
December 31,
2016 |
||
Assets
|
|
|
||
Cash
|
|
$
|
14,477
|
|
Accounts receivable
|
|
239,146
|
|
|
Costs and estimated earnings in excess of billings
|
|
153,275
|
|
|
Other assets
|
|
7,834
|
|
|
Current assets of discontinued operations
|
|
414,732
|
|
|
|
|
|
||
Property and equipment, net
|
|
59,746
|
|
|
Goodwill
(1)
|
|
229,607
|
|
|
Other intangible assets
|
|
148,440
|
|
|
Other assets
|
|
24,351
|
|
|
Non-current assets of discontinued operations
|
|
462,144
|
|
|
|
|
|
||
Total assets of discontinued operations
|
|
$
|
876,876
|
|
|
|
|
||
Liabilities
|
|
|
||
Accounts payable
|
|
$
|
141,028
|
|
Billings in excess of costs and estimated earnings
|
|
53,986
|
|
|
Other liabilities
|
|
52,455
|
|
|
Current liabilities of discontinued operations
|
|
247,469
|
|
|
|
|
|
||
Other liabilities
|
|
5,388
|
|
|
Non-current liabilities of discontinued operations
|
|
5,388
|
|
|
|
|
|
||
Total liabilities of discontinued operations
|
|
$
|
252,857
|
|
|
|
|
||
Noncontrolling interests of discontinued operations
|
|
$
|
6,874
|
|
(1)
|
The carrying value of goodwill for the discontinued Capital Services Operations includes the impact of a
$655,000
impairment charge recorded in the fourth quarter 2016 in connection with our annual impairment assessment.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
1,114,655
|
|
|
$
|
2,211,835
|
|
|
$
|
2,385,863
|
|
Cost of revenue
|
|
1,047,614
|
|
|
2,063,189
|
|
|
2,227,041
|
|
|||
Gross profit
|
|
67,041
|
|
|
148,646
|
|
|
158,822
|
|
|||
Selling and administrative expense
|
|
29,541
|
|
|
51,833
|
|
|
50,745
|
|
|||
Intangibles amortization
|
|
2,550
|
|
|
16,600
|
|
|
19,960
|
|
|||
Loss on net assets sold
(1)
|
|
64,817
|
|
|
—
|
|
|
—
|
|
|||
Other operating expense (income)
|
|
504
|
|
|
(2,328
|
)
|
|
(1,353
|
)
|
|||
Goodwill impairment
(2)
|
|
—
|
|
|
655,000
|
|
|
—
|
|
|||
(Loss) income from operations
|
|
(30,371
|
)
|
|
(572,459
|
)
|
|
89,470
|
|
|||
Interest expense
(3)
|
|
(13,440
|
)
|
|
(24,109
|
)
|
|
(23,857
|
)
|
|||
Interest income
|
|
16
|
|
|
1,155
|
|
|
1,244
|
|
|||
(Loss) income from operations before taxes
|
|
(43,795
|
)
|
|
(595,413
|
)
|
|
66,857
|
|
|||
Income tax expense
(4)
|
|
(60,668
|
)
|
|
(23,486
|
)
|
|
(20,963
|
)
|
|||
Net (loss) income from discontinued operations
|
|
(104,463
|
)
|
|
(618,899
|
)
|
|
45,894
|
|
|||
Net income attributable to noncontrolling interests
|
|
(870
|
)
|
|
(2,187
|
)
|
|
(2,511
|
)
|
|||
Net (loss) income from discontinued operations attributable to CB&I
|
|
$
|
(105,333
|
)
|
|
$
|
(621,086
|
)
|
|
$
|
43,383
|
|
(1)
|
As noted above, the sale of the Capital Services Operations resulted in a loss on the sale of net assets sold.
|
(2)
|
Represents a goodwill impairment charge recorded in the fourth quarter 2016 in connection with our annual impairment assessment.
|
(3)
|
Interest expense, including amortization of capitalized debt issuance costs, was allocated to the Capital Services Operations due to a requirement to use the proceeds from the transaction to repay our debt as described in
Note 11
. The allocation of interest expense was based on the anticipated debt amounts to be repaid.
|
(4)
|
As noted above, the sale of the Capital Services Operations resulted in a taxable gain (due primarily to the non-deductibility of goodwill) resulting in tax expense of approximately
$51,600
for 2017. Income tax expense for 2016 reflects the non-deductibility of the aforementioned goodwill impairment charge.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Operating cash flows
|
|
$
|
(38,974
|
)
|
|
$
|
145,643
|
|
|
$
|
76,365
|
|
Investing cash flows
|
|
$
|
(1,459
|
)
|
|
$
|
(6,561
|
)
|
|
$
|
(11,706
|
)
|
|
Engineering & Construction
|
|
Fabrication Services
|
|
Technology
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
1,860,181
|
|
|
$
|
666,597
|
|
|
$
|
300,121
|
|
|
$
|
2,826,899
|
|
Amortization of tax goodwill in excess of book goodwill
|
(338
|
)
|
|
(920
|
)
|
|
(2,268
|
)
|
|
(3,526
|
)
|
||||
Foreign currency translation and other
|
(9,570
|
)
|
|
—
|
|
|
—
|
|
|
(9,570
|
)
|
||||
Balance at December 31, 2016
|
$
|
1,850,273
|
|
|
$
|
665,677
|
|
|
$
|
297,853
|
|
|
$
|
2,813,803
|
|
Amortization of tax goodwill in excess of book goodwill
|
(434
|
)
|
|
(1,116
|
)
|
|
(2,916
|
)
|
|
(4,466
|
)
|
||||
Foreign currency translation and other
|
27,245
|
|
|
—
|
|
|
—
|
|
|
27,245
|
|
||||
Balance at December 31, 2017
(1)
|
$
|
1,877,084
|
|
|
$
|
664,561
|
|
|
$
|
294,937
|
|
|
$
|
2,836,582
|
|
(1)
|
At
December 31, 2017
, we had approximately
$453,100
of cumulative impairment losses which were recorded in our Engineering & Construction operating group during 2015 in connection with the sale of our Nuclear Operations on December 31, 2015 (discussed in
Note 4
).
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group represented a reporting unit.
|
•
|
Technology
—Our Technology operating group represented a reporting unit.
|
•
|
Capital Services
—Our Capital Services operating group included two reporting units: Facilities & Plant Services and Federal Services.
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group (excluding Engineered Products) represented a reporting unit.
|
•
|
Engineering & Construction
—Our Engineering & Construction operating group represented a reporting unit.
|
•
|
Fabrication Services
—Our Fabrication Services operating group included two reporting units: Engineered Products and Fabrication Services (excluding Engineered Products).
|
•
|
Technology
—Our Technology operating group represented a reporting unit.
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Weighted Average Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Backlog and customer relationships
|
18 Years
|
|
$
|
99,086
|
|
|
$
|
(26,912
|
)
|
|
$
|
99,086
|
|
|
$
|
(21,374
|
)
|
Process technologies
|
15 Years
|
|
265,742
|
|
|
(151,174
|
)
|
|
258,516
|
|
|
(129,261
|
)
|
||||
Tradenames
|
12 Years
|
|
27,479
|
|
|
(17,748
|
)
|
|
27,090
|
|
|
(14,648
|
)
|
||||
Total
(1)
|
16 Years
|
|
$
|
392,307
|
|
|
$
|
(195,834
|
)
|
|
$
|
384,692
|
|
|
$
|
(165,283
|
)
|
(1)
|
The decrease in other intangibles, net during
2017
primarily related to amortization expense of approximately
$25,800
. Amortization expense for our intangibles existing at
December 31, 2017
is anticipated to be approximately
$25,900
,
$23,800
,
$23,400
,
$23,400
and
$22,000
for
2018
,
2019
,
2020
,
2021
and
2022
, respectively.
|
•
|
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
$2,700,000
. 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
$3,300,000
.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
CB&I/Zachry
|
|
|
|
|
||||
Current assets
(1)
|
|
$
|
140,900
|
|
|
$
|
260,934
|
|
Non-current assets
|
|
1,096
|
|
|
3,204
|
|
||
Total assets
|
|
$
|
141,996
|
|
|
$
|
264,138
|
|
Current liabilities
(1)
|
|
$
|
171,953
|
|
|
$
|
379,339
|
|
CB&I/Zachry/Chiyoda
|
|
|
|
|
||||
Current assets
(1)
|
|
$
|
98,680
|
|
|
$
|
84,279
|
|
Non-current assets
|
|
1,129
|
|
|
1,969
|
|
||
Total assets
|
|
$
|
99,809
|
|
|
$
|
86,248
|
|
Current liabilities
(1)
|
|
$
|
68,556
|
|
|
$
|
73,138
|
|
CB&I/Chiyoda
|
|
|
|
|
||||
Current assets
(1)
|
|
$
|
92,767
|
|
|
$
|
337,479
|
|
Current liabilities
(1)
|
|
$
|
150,126
|
|
|
$
|
150,179
|
|
(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 ventures 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. As summarized in
Note 9
, at
December 31, 2017
and
2016
, other current assets on the Balance Sheet included approximately
$138,900
and
$374,800
, respectively, related to our proportionate share of advances from the ventures to our venture partners, and other current liabilities included approximately
$138,600
and
$394,400
, respectively, related to advances to CB&I from the ventures.
|
•
|
CLG—
We have a venture with Chevron (CB&I—
50%
/ Chevron—
50%
) which provides proprietary process technology licenses and associated 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.
|
•
|
NET Power—
We have a venture with Exelon and 8 Rivers Capital (CB&I—
33.3%
/ Exelon—
33.3%
/ 8 Rivers Capital—
33.3%
) to commercialize a new natural gas power generation system that recovers the carbon dioxide produced during combustion. NET Power is building a first-of-its-kind demonstration plant which is being funded by contributions and services from the venture partners and other parties. We have determined the venture to be a VIE; however, we do not effectively control NET Power and therefore do not consolidate it. Our cash commitment for NET
|
•
|
CB&I/CTCI—
We have a venture with CTCI (CB&I—
50%
/ CTCI—
50%
) to perform EPC work for a liquids ethylene cracker and associated units in Sohar, Oman. We have determined the venture to be a VIE; however, we do not effectively control the venture and therefore do not consolidate it. Our proportionate share of the venture project value is approximately
$1,400,000
. Our venture arrangement allows for excess working capital of the venture to be advanced to the venture partners. Such advances are returned to the venture for working capital needs as necessary. As summarized in
Note 9
, at
December 31, 2017
and
2016
, other current liabilities included approximately
$173,600
and
$147,000
, respectively, related to advances to CB&I from the venture.
|
•
|
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
$5,900,000
and the project was substantially complete at
December 31, 2017
.
|
•
|
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. Our venture project value is approximately
$6,000,000
.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
CB&I/Kentz
|
|
|
|
|
||||
Current assets
|
|
$
|
23,061
|
|
|
$
|
68,867
|
|
Non-current assets
|
|
71,023
|
|
|
—
|
|
||
Total assets
|
|
$
|
94,084
|
|
|
$
|
68,867
|
|
Current liabilities
|
|
$
|
30,082
|
|
|
$
|
87,822
|
|
CB&I/AREVA
|
|
|
|
|
||||
Current assets
|
|
$
|
32,621
|
|
|
$
|
16,313
|
|
Current liabilities
|
|
$
|
57,820
|
|
|
$
|
47,652
|
|
All Other
(1)
|
|
|
|
|
||||
Current assets
|
|
$
|
26,551
|
|
|
$
|
69,785
|
|
Non-current assets
|
|
15,753
|
|
|
16,382
|
|
||
Total assets
|
|
$
|
42,304
|
|
|
$
|
86,167
|
|
Current liabilities
|
|
$
|
10,404
|
|
|
$
|
7,748
|
|
(1)
|
Other ventures that we consolidate are not individually material to our financial results and are therefore aggregated as “All Other”.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Property and Equipment
|
|
|
|
|
||||
Plant, field equipment and other
|
|
$
|
537,172
|
|
|
$
|
595,919
|
|
Buildings and improvements
|
|
331,681
|
|
|
396,466
|
|
||
Land and improvements
|
|
51,069
|
|
|
72,880
|
|
||
Total property and equipment
|
|
$
|
919,922
|
|
|
$
|
1,065,265
|
|
Accumulated depreciation
|
|
(501,391
|
)
|
|
(559,321
|
)
|
||
Property and equipment, net
|
|
$
|
418,531
|
|
|
$
|
505,944
|
|
Other Current Assets
|
|
|
|
|
||||
Advances to proportionately consolidated ventures
(1)
|
|
$
|
138,858
|
|
|
$
|
374,803
|
|
Other
(2)
|
|
142,313
|
|
|
172,174
|
|
||
Other current assets
|
|
$
|
281,171
|
|
|
$
|
546,977
|
|
Other Non-Current Assets
|
|
|
|
|
||||
Non-current project receivables
(3)
|
|
$
|
314,100
|
|
|
$
|
231,275
|
|
Other
(4)
|
|
169,105
|
|
|
169,729
|
|
||
Other non-current assets
|
|
$
|
483,205
|
|
|
$
|
401,004
|
|
Other Current Liabilities
|
|
|
|
|
||||
Advances from equity method and proportionately consolidated ventures
(1)
|
|
$
|
312,207
|
|
|
$
|
541,432
|
|
Payroll-related obligations
|
|
113,217
|
|
|
212,441
|
|
||
Income taxes payable
|
|
41,897
|
|
|
46,741
|
|
||
Self-insurance and other insurance reserves
|
|
21,034
|
|
|
16,727
|
|
||
Other
(5)
|
|
263,939
|
|
|
200,132
|
|
||
Other current liabilities
|
|
$
|
752,294
|
|
|
$
|
1,017,473
|
|
Other Non-Current Liabilities
|
|
|
|
|
||||
Pension obligations
|
|
$
|
178,927
|
|
|
$
|
174,264
|
|
Self-insurance and other insurance reserves
|
|
73,566
|
|
|
87,680
|
|
||
Postretirement medical benefit obligations
|
|
30,337
|
|
|
30,931
|
|
||
Income tax reserves
|
|
16,251
|
|
|
14,162
|
|
||
Other
(6)
|
|
128,454
|
|
|
134,179
|
|
||
Other non-current liabilities
|
|
$
|
427,535
|
|
|
$
|
441,216
|
|
(1)
|
Represents advances to our proportionately consolidated ventures and advances from our equity method and proportionately consolidated ventures, as discussed in
Note 8
.
|
(2)
|
Represents various assets that are each individually less than
5%
of total current assets, including income tax receivables and prepaid items.
|
(3)
|
Represents customer receivables for projects that are not anticipated to be collected within the next year. See
Note 14
for discussion of outstanding receivables on one of our previously completed large cost-reimbursable projects and one of our previously completed consolidated joint venture projects.
|
(4)
|
Represents various assets that are each individually less than
5%
of total assets, including prepaid pension costs and various other prepaid items.
|
(5)
|
Represents various accruals that are each individually less than
5%
of total current liabilities, including accruals for non-contract payables, taxes other than income taxes, country-specific employee benefits, operating lease obligations, derivatives, and medical and legal obligations.
|
(6)
|
Represents various accruals that are each individually less than
5%
of total liabilities, including accruals for non-contract payables, taxes other than income taxes, operating lease obligations, deferred rent, and country-specific employee benefits.
|
|
|
Years Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Beginning Balance
|
|
$
|
4,060
|
|
|
$
|
5,334
|
|
Charges
(1)
|
|
18,213
|
|
|
—
|
|
||
Cash payments
|
|
(6,908
|
)
|
|
(1,274
|
)
|
||
Foreign exchange and other
|
|
241
|
|
|
—
|
|
||
Ending Balance
(2)
|
|
$
|
15,606
|
|
|
$
|
4,060
|
|
(1)
|
The charges primarily relate to our Engineering & Construction operating group.
|
(2)
|
Future cash payments for our existing obligations at
December 31, 2017
are anticipated to be approximately
$7,200
,
$2,600
,
$2,300
,
$1,900
,
$1,500
and
$100
in
2018
,
2019
,
2020
,
2021
,
2022
, and thereafter, respectively.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Current
|
|
|
|
|
||||
Revolving facility and other short-term borrowings
|
|
$
|
1,102,151
|
|
|
$
|
407,500
|
|
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
1,167,219
|
|
|
506,250
|
|
||
Less: unamortized debt issuance costs
|
|
(6,928
|
)
|
|
(2,340
|
)
|
||
Current maturities of long-term debt, net of unamortized debt issuance costs
|
|
1,160,291
|
|
|
503,910
|
|
||
Current debt, net of unamortized debt issuance costs
|
|
$
|
2,262,442
|
|
|
$
|
911,410
|
|
Long-Term
|
|
|
|
|
||||
Term Loan: $1,000,000 term loan (interest at LIBOR plus a floating margin)
|
|
$
|
—
|
|
|
$
|
300,000
|
|
Second Term Loan: $500,000 term loan (interest at LIBOR plus a floating margin)
|
|
440,746
|
|
|
500,000
|
|
||
Senior Notes: $800,000 senior notes, series A-D (fixed interest ranging from 7.57% to 9.15%)
|
|
584,596
|
|
|
800,000
|
|
||
Second Senior Notes: $200,000 senior notes (fixed interest of 7.53%)
|
|
141,877
|
|
|
200,000
|
|
||
Less: unamortized debt issuance costs
|
|
—
|
|
|
(5,827
|
)
|
||
Less: current maturities of long-term debt
|
|
(1,167,219
|
)
|
|
(506,250
|
)
|
||
Long-term debt, net of unamortized debt issuance costs
|
|
$
|
—
|
|
|
$
|
1,287,923
|
|
•
|
Series A—Interest due semi-annually at a fixed rate of
9.15%
, with principal of
$104,653
due in August 2018 (as a result of the December 18, 2017 amendment described below)
|
•
|
Series B—Interest due semi-annually at a fixed rate of
7.57%
, with principal of
$165,784
due in December 2019
|
•
|
Series C—Interest due semi-annually at a fixed rate of
8.15%
, with principal of
$195,219
due in December 2022
|
•
|
Series D—Interest due semi-annually at a fixed rate of
8.30%
, with principal of
$118,940
due in December 2024
|
•
|
Required us to secure the Senior Facilities through the pledge of cash, accounts receivable, inventory, fixed assets, certain real property, and stock of subsidiaries, which was in the process of being completed as of December 31, 2017, and will result in substantially all of our assets, subject to customary exceptions, being pledged as collateral for our Senior Facilities.
|
•
|
Required us to repay portions of the Senior Facilities with all of the net proceeds from the sale of our Capital Services Operations (which occurred on June 30, 2017), the issuance of any unsecured debt that is subordinate (“Subordinated Debt”) to the Senior Facilities, the issuance of any equity securities, or the sale of any assets.
|
•
|
Replaced the previous financial letter of credit sublimits for our Revolving Facility and Second Revolving Facility with a
$100,000
letter of credit sublimit for each.
|
•
|
Prohibited mergers and acquisitions, open-market share repurchases and dividend payments and certain inter-company transactions.
|
•
|
Adjusted the interest rates on our Senior Facilities.
|
•
|
Required us to execute on our plan to market and sell our Technology Operations by December 27, 2017 (the “Technology Sale”), with an extension of up to 60 days at the discretion of the holders of a majority of the outstanding Notes and at the discretion of the administrative agents of the Bank Facilities.
|
•
|
Required us to maintain a minimum aggregate availability under our Committed Facilities, including borrowings and letters of credit, of
$150,000
at all times from the date of the applicable amendment through the date of the Technology Sale, and
$250,000
thereafter (“Minimum Availability”). Our amendments required the proceeds from the Technology Sale be used to repay our Senior Facilities (“Mandatory Repayment Amount”). Further, our aggregate capacity under the Committed Facilities would be reduced by seventy percent (
70%
) of the portion of the Mandatory Repayment Amount allocable to the Committed Facilities, upon closing the Technology Sale and certain other mandatory prepayment events.
|
•
|
Required minimum levels of trailing 12-month earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined by the amendments, as follows:
$500,000
at September 30, 2017;
$550,000
at December 31, 2017;
$500,000
at March 31, 2018;
$450,000
at June 30, 2018 and September 30, 2018; and
$425,000
at December 31, 2018 and thereafter (“Minimum EBITDA”). Trailing 12-month EBITDA for purposes of determining compliance with the Minimum EBITDA covenant is adjusted to exclude: an agreed amount attributable to restructuring or integration charges during the third and fourth quarters of 2017; an agreed amount attributable to previous charges on certain projects which occurred during the first and second quarters of 2017; and an agreed amount for potential future charges for the same projects if they were to be incurred during the third and fourth quarters of 2017 (collectively, the “EBITDA Addbacks”).
|
•
|
Provided for an amended maximum leverage ratio and minimum fixed charge ratio of
1.75
(“Maximum Leverage Ratio”) and new minimum fixed charge coverage ratio of
2.25
(“Minimum Fixed Charge Coverage Ratio”), which were temporarily suspended and would resume as of March 31, 2018. Trailing 12-month EBITDA for purposes of determining compliance with the Maximum Leverage Ratio and consolidated net income for purposes of determining compliance with the Minimum Fixed Charge Coverage Ratio would be adjusted for the EBITDA Addbacks.
|
•
|
Limited the amount of certain of our funded indebtedness to
$3,000,000
prior to the Technology Sale and
$2,900,000
thereafter, in each case, subject to reduction pursuant to scheduled repayments and mandatory prepayments thereof (but, with respect to the Committed Facilities, only to the extent the commitments have been reduced by such prepayments) made by us after August 9, 2017.
|
•
|
Waive any noncompliance with the Maximum Leverage Ratio or Minimum Fixed Charge Coverage Ratio beginning on the Effective Date and ending on the earlier of (i) June 18, 2018 or (ii) the occurrence of certain Combination termination events (the “Covenant Relief Period”).
|
•
|
Extend the maturity of the Series A Senior Notes, from December 27, 2017 to August 31, 2018 and increase the interest rates on the Series A Senior Notes.
|
•
|
Reduce the Minimum Availability threshold for the Committed Facilities from
$150,000
to
$50,000
during the Covenant Relief Period.
|
•
|
Adjust the required minimum levels of trailing 12-month EBITDA as follows:
$550,000
at December 31, 2017,
$500,000
at March 31, 2018,
$500,000
at June 30, 2018,
$550,000
at September 30, 2018, and
$575,000
at December 31, 2018 and each quarter thereafter.
|
•
|
For the duration of the Covenant Relief Period, increase the amount of certain of our funded indebtedness from
$3,000,000
to
$3,140,000
less the aggregate amount of all scheduled repayments and mandatory prepayments of such funded indebtedness made after the August 9, 2017 amendment date.
|
•
|
Suspend the requirement to consummate the Technology Sale and require the completion of the Combination by June 18, 2018 (the “Combination Closing Deadline”), subject to earlier milestones including: (i) filing of a joint proxy statement/prospectus (“Form S-4”) by February 15, 2018, (ii) filing of a solicitation/recommendation statement on Schedule 14D-9 as promptly as reasonably practicable following (but in any event by no later than 10 business days after) the commencement of the exchange offer related to the Combination, and (iii) duly calling and giving notice of a
|
•
|
Provide for the mandatory repayment of the outstanding debt under the Senior Facilities on the day of the closing of the Combination, which in the case of the Notes, is to be at the price of the make-whole amount as modified by the amendments. During 2017, we accrued approximately
$35,000
within interest expense related to the anticipated modified make-whole payment.
|
•
|
Provide for certain events of default in respect of the Combination, including: (i) termination of documentation related to the Combination, (ii) failure of the applicable proposals related to the Combination to be brought for a vote by the shareholders of the Company or McDermott, (iii) the failure of the shareholders of either McDermott or the Company to approve the applicable proposals related to the Combination at their respective shareholder meetings, subject to a seven day grace period, (iv) the supervisory board of directors of the Company changing its recommendation to the Company’s shareholders in respect of the Combination, or (v) the failure of certain financing commitments in respect of the Combination, subject to customary minimum thresholds.
|
•
|
Provide for certain other information and modified reporting rights, modifications to mandatory prepayment requirements, and consent rights of the holders of the outstanding Notes and administrative agents of the Bank Facilities as more fully set forth in the amendments.
|
•
|
Level 1
—Fair value is based on quoted prices in active markets.
|
•
|
Level 2
—Fair value is based on 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 on current market expectations and adjusts for credit risk.
|
•
|
Level 3
—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. We did not have any level 3 classifications at
December 31, 2017
or
2016
.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Derivative Assets
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current assets
|
$
|
—
|
|
|
$
|
1,671
|
|
|
$
|
—
|
|
|
$
|
1,671
|
|
|
$
|
—
|
|
|
$
|
1,146
|
|
|
$
|
—
|
|
|
$
|
1,146
|
|
Other non-current assets
|
—
|
|
|
556
|
|
|
—
|
|
|
556
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
||||||||
Total assets at fair value
|
$
|
—
|
|
|
$
|
2,227
|
|
|
$
|
—
|
|
|
$
|
2,227
|
|
|
$
|
—
|
|
|
$
|
1,228
|
|
|
$
|
—
|
|
|
$
|
1,228
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current liabilities
|
$
|
—
|
|
|
$
|
(4,598
|
)
|
|
$
|
—
|
|
|
$
|
(4,598
|
)
|
|
$
|
—
|
|
|
$
|
(3,509
|
)
|
|
$
|
—
|
|
|
$
|
(3,509
|
)
|
Other non-current liabilities
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(725
|
)
|
|
—
|
|
|
(725
|
)
|
||||||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
(4,785
|
)
|
|
$
|
—
|
|
|
$
|
(4,785
|
)
|
|
$
|
—
|
|
|
$
|
(4,234
|
)
|
|
$
|
—
|
|
|
$
|
(4,234
|
)
|
(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.
|
|
|
Other Current and
Non-Current Assets
|
|
Other Current and
Non-Current Liabilities
|
||||||||||||
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2017 |
|
December 31,
2016 |
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency
|
|
385
|
|
|
109
|
|
|
(140
|
)
|
|
(536
|
)
|
||||
Fair value
|
|
$
|
385
|
|
|
$
|
158
|
|
|
$
|
(140
|
)
|
|
$
|
(536
|
)
|
Derivatives not designated as cash flow hedges
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
|
$
|
1,842
|
|
|
$
|
1,070
|
|
|
$
|
(4,645
|
)
|
|
$
|
(3,698
|
)
|
Fair value
|
|
$
|
1,842
|
|
|
$
|
1,070
|
|
|
$
|
(4,645
|
)
|
|
$
|
(3,698
|
)
|
Total fair value
|
|
$
|
2,227
|
|
|
$
|
1,228
|
|
|
$
|
(4,785
|
)
|
|
$
|
(4,234
|
)
|
|
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
|
|
|||||||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency
|
$
|
2,227
|
|
|
$
|
—
|
|
|
$
|
2,227
|
|
|
$
|
(297
|
)
|
|
$
|
—
|
|
|
$
|
1,930
|
|
Total assets
|
$
|
2,227
|
|
|
$
|
—
|
|
|
$
|
2,227
|
|
|
$
|
(297
|
)
|
|
$
|
—
|
|
|
$
|
1,930
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency
|
$
|
(4,785
|
)
|
|
$
|
—
|
|
|
$
|
(4,785
|
)
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
(4,488
|
)
|
Total liabilities
|
$
|
(4,785
|
)
|
|
$
|
—
|
|
|
$
|
(4,785
|
)
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
(4,488
|
)
|
|
Amount of Gain (Loss) on Effective Derivative Portion
|
||||||||||||||
|
Recognized in
OCI
|
|
Reclassified from
AOCI into Earnings
(1)
|
||||||||||||
|
Years Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
$
|
—
|
|
|
$
|
(740
|
)
|
|
$
|
49
|
|
|
$
|
(510
|
)
|
Foreign currency
|
637
|
|
|
(304
|
)
|
|
651
|
|
|
(835
|
)
|
||||
Total
|
$
|
637
|
|
|
$
|
(1,044
|
)
|
|
$
|
700
|
|
|
$
|
(1,345
|
)
|
(1)
|
Net unrealized gains totaling approximately
$45
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
|
||||||
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Derivatives not designated as cash flow hedges
|
|
|
|
||||
Foreign currency
|
$
|
(8,598
|
)
|
|
$
|
(15,287
|
)
|
Total
|
$
|
(8,598
|
)
|
|
$
|
(15,287
|
)
|
Components of Net Periodic Benefit Cost
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
|
$
|
11,728
|
|
|
$
|
9,337
|
|
|
$
|
10,611
|
|
|
$
|
685
|
|
|
$
|
704
|
|
|
$
|
791
|
|
Interest cost
|
|
19,120
|
|
|
23,078
|
|
|
23,242
|
|
|
1,366
|
|
|
1,361
|
|
|
1,545
|
|
||||||
Expected return on plan assets
|
|
(23,969
|
)
|
|
(26,314
|
)
|
|
(28,341
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credits
|
|
(635
|
)
|
|
(617
|
)
|
|
(620
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial losses (gains)
|
|
6,184
|
|
|
5,719
|
|
|
7,648
|
|
|
(2,741
|
)
|
|
(3,361
|
)
|
|
(2,696
|
)
|
||||||
Settlement expense
(1)
|
|
2,426
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (income)
|
|
$
|
14,854
|
|
|
$
|
11,203
|
|
|
$
|
12,540
|
|
|
$
|
(690
|
)
|
|
$
|
(1,296
|
)
|
|
$
|
(360
|
)
|
Change in Projected Benefit Obligation
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Projected benefit obligation at beginning of year
|
|
$
|
877,257
|
|
|
$
|
824,968
|
|
|
$
|
33,407
|
|
|
$
|
30,948
|
|
Service cost
|
|
11,728
|
|
|
9,337
|
|
|
685
|
|
|
704
|
|
||||
Interest cost
|
|
19,120
|
|
|
23,078
|
|
|
1,366
|
|
|
1,361
|
|
||||
Actuarial (gain) loss
(2)
|
|
(422
|
)
|
|
127,406
|
|
|
(1,121
|
)
|
|
2,702
|
|
||||
Plan participants’ contributions
|
|
2,880
|
|
|
2,850
|
|
|
598
|
|
|
502
|
|
||||
Benefits paid
|
|
(42,899
|
)
|
|
(36,955
|
)
|
|
(2,241
|
)
|
|
(2,810
|
)
|
||||
Settlement
(1)
|
|
(4,556
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation
(3)
|
|
106,654
|
|
|
(73,427
|
)
|
|
—
|
|
|
—
|
|
||||
Projected benefit obligation at end of year
|
|
$
|
969,762
|
|
|
$
|
877,257
|
|
|
$
|
32,694
|
|
|
$
|
33,407
|
|
Change in Plan Assets
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Fair value of plan assets at beginning of year
|
|
$
|
703,104
|
|
|
$
|
707,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
|
36,491
|
|
|
78,360
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
|
(42,899
|
)
|
|
(36,955
|
)
|
|
(2,241
|
)
|
|
(2,810
|
)
|
||||
Employer contributions
(4)
|
|
17,775
|
|
|
16,770
|
|
|
1,643
|
|
|
2,308
|
|
||||
Plan participants’ contributions
|
|
2,880
|
|
|
2,850
|
|
|
598
|
|
|
502
|
|
||||
Settlement
(1)
|
|
(4,556
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation
(3)
|
|
85,141
|
|
|
(65,009
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
|
$
|
797,936
|
|
|
$
|
703,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status
|
|
$
|
(171,826
|
)
|
|
$
|
(174,153
|
)
|
|
$
|
(32,694
|
)
|
|
$
|
(33,407
|
)
|
Balance Sheet Position
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Prepaid benefit cost within other non-current assets
|
|
$
|
9,884
|
|
|
$
|
2,798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued benefit cost within other current liabilities
|
|
(2,783
|
)
|
|
(2,687
|
)
|
|
(2,357
|
)
|
|
(2,476
|
)
|
||||
Accrued benefit cost within other non-current liabilities
|
|
(178,927
|
)
|
|
(174,264
|
)
|
|
(30,337
|
)
|
|
(30,931
|
)
|
||||
Net funded status recognized
|
|
$
|
(171,826
|
)
|
|
$
|
(174,153
|
)
|
|
$
|
(32,694
|
)
|
|
$
|
(33,407
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Unrecognized net prior service credits
|
|
$
|
(3,053
|
)
|
|
$
|
(3,259
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrecognized net actuarial losses (gains)
|
|
202,361
|
|
|
200,334
|
|
|
(23,888
|
)
|
|
(25,508
|
)
|
||||
Accumulated other comprehensive loss (income), before taxes
(5)
|
|
$
|
199,308
|
|
|
$
|
197,075
|
|
|
$
|
(23,888
|
)
|
|
$
|
(25,508
|
)
|
(1)
|
Net periodic benefit cost in 2017 was impacted by the settlement of our qualified Canadian pension plan in 2017. The settlement resulted in the immediate recognition of previously unrecognized actuarial gains related to the plan that were previously included in AOCI.
|
(2)
|
The actuarial pension plan loss for 2016 was primarily associated with a decrease in discount rate assumptions for our pension plans.
|
(3)
|
The currency translation gain for 2017 was primarily associated with the weakening of the U.S. Dollar against the currencies associated with our international pension plans, primarily the Euro and British Pound. The currency translation loss for 2016
was primarily associated with the strengthening of the U.S. Dollar against the currencies associated with our international pension plans, primarily the Euro and British Pound.
|
(4)
|
During
2018
, we expect to contribute approximately
$18,200
and
$2,400
to our pension and other postretirement plans, respectively.
|
(5)
|
During
2018
, we expect to recognize approximately
$(600)
and
$3,000
of previously unrecognized net prior service pension credits and net actuarial pension losses, respectively.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
|
$
|
852,008
|
|
|
$
|
766,618
|
|
Accumulated benefit obligation
|
|
$
|
850,692
|
|
|
$
|
748,862
|
|
Fair value of plan assets
|
|
$
|
670,299
|
|
|
$
|
589,667
|
|
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Weighted-average assumptions used to determine benefit obligations at December 31,
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
2.08
|
%
|
|
2.11
|
%
|
|
3.69
|
%
|
|
4.15
|
%
|
Rate of compensation increase
(1)
|
|
2.46
|
%
|
|
2.36
|
%
|
|
n/a
|
|
|
n/a
|
|
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31,
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
2.11
|
%
|
|
2.95
|
%
|
|
4.15
|
%
|
|
4.47
|
%
|
Expected long-term rate of return on plan assets
(2)
|
|
3.27
|
%
|
|
3.87
|
%
|
|
n/a
|
|
|
n/a
|
|
Rate of compensation increase
(1)
|
|
2.46
|
%
|
|
2.36
|
%
|
|
n/a
|
|
|
n/a
|
|
(1)
|
The rate of compensation increase relates solely to the defined benefit plans that factor compensation increases into the valuation.
|
(2)
|
The expected long-term rate of return on plan assets was derived using historical returns by asset category and expectations of future performance.
|
Year
|
|
Pension
Plans
|
|
Other
Postretirement
Plans
|
||||
2018
|
|
$
|
36,373
|
|
|
$
|
2,357
|
|
2019
|
|
$
|
36,489
|
|
|
$
|
2,363
|
|
2020
|
|
$
|
37,918
|
|
|
$
|
2,314
|
|
2021
|
|
$
|
38,579
|
|
|
$
|
2,243
|
|
2022
|
|
$
|
39,168
|
|
|
$
|
2,174
|
|
2023-2027
|
|
$
|
203,571
|
|
|
$
|
9,958
|
|
|
|
December 31, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
|
||||||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Global Equities and Cash
|
|
$
|
3,663
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,663
|
|
International Funds
(1)
|
|
—
|
|
|
174,772
|
|
|
—
|
|
|
174,772
|
|
||||
Emerging Markets Growth Funds
|
|
—
|
|
|
19,753
|
|
|
—
|
|
|
19,753
|
|
||||
U.S. Equity Funds
|
|
—
|
|
|
15,113
|
|
|
—
|
|
|
15,113
|
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
||||||||
International Government Bonds
(2)
|
|
—
|
|
|
226,341
|
|
|
—
|
|
|
226,341
|
|
||||
International Corporate Bonds
(3)
|
|
—
|
|
|
111,536
|
|
|
—
|
|
|
111,536
|
|
||||
International Mortgage Funds
(4)
|
|
—
|
|
|
70,346
|
|
|
—
|
|
|
70,346
|
|
||||
All Other Fixed Income Securities
(5)
|
|
—
|
|
|
52,998
|
|
|
—
|
|
|
52,998
|
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
||||||||
Asset Allocation Funds
(6)
|
|
—
|
|
|
123,414
|
|
|
—
|
|
|
123,414
|
|
||||
Total Assets at Fair Value
|
|
$
|
3,663
|
|
|
$
|
794,273
|
|
|
$
|
—
|
|
|
$
|
797,936
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
|
||||||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Global Equities and Cash
|
|
$
|
3,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,310
|
|
International Funds
(1)
|
|
—
|
|
|
155,560
|
|
|
—
|
|
|
155,560
|
|
||||
Emerging Markets Growth Funds
|
|
—
|
|
|
17,342
|
|
|
—
|
|
|
17,342
|
|
||||
U.S. Equity Funds
|
|
—
|
|
|
13,766
|
|
|
—
|
|
|
13,766
|
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
||||||||
International Government Bonds
(2)
|
|
—
|
|
|
180,850
|
|
|
—
|
|
|
180,850
|
|
||||
International Corporate Bonds
(3)
|
|
—
|
|
|
110,626
|
|
|
—
|
|
|
110,626
|
|
||||
International Mortgage Funds
(4)
|
|
—
|
|
|
64,174
|
|
|
—
|
|
|
64,174
|
|
||||
All Other Fixed Income Securities
(5)
|
|
—
|
|
|
50,321
|
|
|
—
|
|
|
50,321
|
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
||||||||
Asset Allocation Funds
(6)
|
|
—
|
|
|
107,155
|
|
|
—
|
|
|
107,155
|
|
||||
Total Assets at Fair Value
|
|
$
|
3,310
|
|
|
$
|
699,794
|
|
|
$
|
—
|
|
|
$
|
703,104
|
|
(1)
|
Investments in various funds that track international indices.
|
(2)
|
Investments in predominately E.U. government securities and U.K. Treasury securities with credit ratings primarily AAA.
|
(3)
|
Investments in European and U.K. fixed interest securities with credit ratings of primarily BBB and above.
|
(4)
|
Investments in international mortgage funds.
|
(5)
|
Investments predominantly in various international fixed income obligations that are individually insignificant.
|
(6)
|
Investments in fixed income securities, equities and alternative asset classes, including commodities and property assets.
|
|
|
EIN/Plan
Number
|
|
Plan Year End
|
|
Pension Protection
Act (% Funded)
(1)
|
|
FIP/RP
Plan
(1)
|
|
Total Company Contributions
(2)
|
|
Expiration
Date of
Collective-
Bargaining
Agreement
(3)
|
||||||||||||
Pension Fund
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||||
Boilermaker-Blacksmith National Pension Trust
|
|
48-6168020-001
|
|
12/31
|
|
<65%
|
|
65%-80%
|
|
Yes
|
|
$
|
18,565
|
|
|
$
|
26,375
|
|
|
$
|
23,079
|
|
|
Various
|
Plumbers and Pipefitters National Pension Fund
|
|
52-6152779-001
|
|
6/30
|
|
65%-80%
|
|
65%-80%
|
|
Yes
|
|
4,597
|
|
|
2,241
|
|
|
2,144
|
|
|
Various
|
|||
Utah Pipe Trades Pension Trust Fund
|
|
51-6077569-001
|
|
12/31
|
|
>80%
|
|
>80%
|
|
No
|
|
1,219
|
|
|
3,372
|
|
|
5,522
|
|
|
07/19
|
|||
Twin City Carpenters and Joiners Pension Fund
|
|
41-6043137-001
|
|
12/31
|
|
65%-80%
|
|
65%-80%
|
|
Yes
|
|
—
|
|
|
1,295
|
|
|
5,469
|
|
|
04/19
|
|||
Twin City Ironworkers Pension Plan
|
|
41-6084127-001
|
|
12/31
|
|
>80%
|
|
>80%
|
|
No
|
|
92
|
|
|
731
|
|
|
2,102
|
|
|
04/19
|
|||
Middle Tennessee Carpenters and Millwrights Pension Fund
(4)
|
|
62-6101275-001
|
|
4/30
|
|
>80%
|
|
>80%
|
|
No
|
|
—
|
|
|
—
|
|
|
6,524
|
|
|
Various
|
|||
Southern Ironworkers Pension Fund
(4)
|
|
59-6227091-001
|
|
12/31
|
|
>80%
|
|
>80%
|
|
No
|
|
—
|
|
|
—
|
|
|
3,458
|
|
|
Various
|
|||
Plumbers and Steamfitters Local 150 Pension Fund
(4)
|
|
58-6116699-001
|
|
12/31
|
|
>80%
|
|
>80%
|
|
No
|
|
—
|
|
|
—
|
|
|
3,510
|
|
|
Various
|
|||
Boilermakers’ National Pension Plan (Canada)
|
|
366708
|
|
12/31
|
|
N/A
|
|
N/A
|
|
N/A
|
|
5,929
|
|
|
6,709
|
|
|
8,645
|
|
|
04/19
|
|||
All Other
(5)
|
|
|
|
|
|
|
|
|
|
|
|
18,535
|
|
|
19,216
|
|
|
19,110
|
|
|
|
|||
Total
|
|
|
|
|
|
|
|
|
|
|
|
$
|
48,937
|
|
|
$
|
59,939
|
|
|
$
|
79,563
|
|
|
|
(1)
|
Pension Protection Act Zone Status and FIP/RP plans are applicable to our U.S.-registered plans only, as these terms are not defined within Canadian pension legislation. In the U.S., plans funded less than
65%
are in the red zone, plans funded at least
65%
, but less than
80%
are in the yellow zone, and plans funded at least
80%
are in the green zone. The requirement for FIP or RP plans in the U.S. is based on the funding level or zone status of the applicable plan.
|
(2)
|
Our
2017
contributions as a percentage of total plan contributions were not available for any of our plans. For
2016
, our contributions to the Utah Pipe Trades Pension Trust Fund, the Southern Ironworkers Pension Fund, the Plumbers and Steamfitters Local 150 Pension Fund and the Boilermakers’ National Pension Plan (Canada) each exceeded
5%
of total plan contributions. For
2015
, our contributions to the Utah Pipe Trades Pension Trust Fund, the Twin City Carpenters and Joiners Pension Fund, the Twin City Ironworkers Pension Plan, the Southern Ironworkers Pension Fund, the Plumbers and Steamfitters Local 150 Pension Fund and the Boilermakers’ National Pension Plan (Canada) each exceeded
5%
of total plan contributions. The level of our contributions to each plan noted above varies from period to period based upon the level of work being performed that is covered under the applicable collective-bargaining agreement.
|
(3)
|
The expiration dates of our labor agreements associated with the plans noted as “Various” above vary based upon the duration of the applicable projects.
|
(4)
|
The contributions in 2015 were associated with plans that were included with our former Nuclear Operations, which were sold on December 31, 2015.
|
(5)
|
Our remaining contributions in 2017, 2016 and 2015 to various U.S. and Canadian plans, were individually immaterial.
|
Year
|
Amount
|
||
2018
|
$
|
55,633
|
|
2019
|
40,802
|
|
|
2020
|
33,593
|
|
|
2021
|
26,980
|
|
|
2022
|
20,224
|
|
|
Thereafter
|
58,209
|
|
|
Total
|
$
|
235,441
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
|
Currency
Translation
Adjustment
(1)
|
|
Unrealized
Fair Value Of
Cash Flow Hedges
|
|
Defined Benefit
Pension and Other
Postretirement Plans
|
|
Total
|
||||||||
Balance at December 31, 2016
|
|
$
|
(264,562
|
)
|
|
$
|
(213
|
)
|
|
$
|
(130,841
|
)
|
|
$
|
(395,616
|
)
|
OCI before reclassifications
|
|
81,128
|
|
|
976
|
|
|
(6,628
|
)
|
|
75,476
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(464
|
)
|
|
4,096
|
|
|
3,632
|
|
||||
Net OCI
|
|
81,128
|
|
|
512
|
|
|
(2,532
|
)
|
|
79,108
|
|
||||
Balance at December 31, 2017
|
|
$
|
(183,434
|
)
|
|
$
|
299
|
|
|
$
|
(133,373
|
)
|
|
$
|
(316,508
|
)
|
(1)
|
During
2017
, the currency translation adjustment component of AOCI was favorably impacted by net movements in the
Australian Dollar, British Pound, and Euro
exchange rates against the U.S. Dollar.
|
|
|
Amount Reclassified
From AOCI
|
||
Unrealized Fair Value Of Cash Flow Hedges
(1)
|
|
|
||
Interest rate derivatives (interest expense)
|
|
$
|
(49
|
)
|
Foreign currency derivatives (cost of revenue)
|
|
(651
|
)
|
|
Total before tax
|
|
$
|
(700
|
)
|
Tax
|
|
236
|
|
|
Total net of tax
|
|
$
|
(464
|
)
|
Defined Benefit Pension and Other Postretirement Plans
(2)
|
|
|
||
Amortization of prior service credits
|
|
$
|
(635
|
)
|
Recognized net actuarial losses
|
|
5,941
|
|
|
Total before tax
|
|
$
|
5,306
|
|
Tax
|
|
(1,210
|
)
|
|
Total net of tax
|
|
$
|
4,096
|
|
(1)
|
See
Note 12
for further discussion of our cash flow hedges, including the total value reclassified from AOCI to earnings.
|
(2)
|
See
Note 13
for further discussion of our defined benefit and other postretirement plans, including the components of net periodic benefit cost.
|
|
|
Shares
|
|
Weighted Average Grant-Date
Fair Value per Share
|
|||
Nonvested RSUs
|
|
|
|
|
|||
Balance at December 31, 2016
|
|
1,834
|
|
|
$
|
41.99
|
|
Granted
|
|
1,131
|
|
|
$
|
31.84
|
|
Vested
|
|
(1,469
|
)
|
|
$
|
39.11
|
|
Forfeited
|
|
(112
|
)
|
|
$
|
37.73
|
|
Balance at December 31, 2017
|
|
1,384
|
|
|
$
|
34.96
|
|
Directors’ RSUs
|
|
|
|
|
|||
Balance at December 31, 2016
|
|
37
|
|
|
$
|
38.18
|
|
Granted
|
|
47
|
|
|
$
|
29.72
|
|
Vested
|
|
(37
|
)
|
|
$
|
38.18
|
|
Balance at December 31, 2017
|
|
47
|
|
|
$
|
29.72
|
|
•
|
Financial Performance Based Grants
—Financial performance based share awards are based upon EPS and generally vest over
three
years. The total initial fair value for these awards is determined based upon the market price of our stock at the grant date applied to the total number of shares that we anticipate will vest. This fair value is expensed over the vesting period based on the level of payout expected to be achieved, subject to retirement eligibility expense acceleration, where applicable. During 2017, we did not recognize any expense relating to financial performance based share awards as a result of the underlying performance conditions. However, we recognized
$5,023
of expense within restructuring related costs for approximately
280
performance based shares that were vested and converted to liability awards in connection with the CIC provisions described above. These awards had a weighted average grant-date fair value per share of
$17.92
and will be paid during 2018 in connection with the Combination. In addition, during
2017
,
2016
and
2015
, financial performance based shares totaling
597
,
665
and
702
, respectively, were granted with a weighted-average grant-date fair value per share of
$36.00
,
$33.56
and
$41.67
, respectively. During
2017
, upon vesting and achievement of certain 2016 performance goals, we distributed
50
financial performance based shares with a weighted-average grant-date fair value per share of
$35.98
. The total fair value of financial performance based share awards that vested during
2017
,
2016
and
2015
was
$1,781
,
$24,446
and
$23,463
, respectively.
|
•
|
Stock Performance Based Grants
—Stock performance based share awards are based upon stock price performance relative to industry peers or a construction industry index, and generally vest over
three
years. The total initial fair value for these awards is determined based upon a Monte Carlo simulation value at the grant date applied to the total number of granted target shares. This fair value is expensed ratably over the vesting period, and during
2017
, we recognized
$5,414
of compensation expense (including
$307
associated with our discontinued Capital Services Operations). In addition, during 2017 we recognized
$1,525
of additional compensation expense, primarily within selling and administrative expense, for approximately
60
performance based shares that were vested and converted to liability awards in connection with the CIC provisions described above. These awards had a weighted average grant-date fair value per share of
$41.69
, and will be paid 2018 in connection with the Combination. During
2017
,
149
stock performance based shares were granted with a weighted-average grant-date fair value per share of
$44.21
and was based upon a risk-free interest rate of
1.54%
, historical volatility of
41%
and a remaining performance period of
2.9
years. During
2016
,
166
stock performance-based shares were granted with a weighted-average grant-date fair value per share of
$37.41
and was based upon a risk-free interest rate of
0.86%
, historical volatility of
38%
and a remaining performance period of
2.9
years. During
2015
,
130
stock performance-based shares were granted with a weighted-average grant-date fair value per share of
$37.35
and was based upon a risk-free interest rate of
1.10%
, an expected dividend yield of
0.69%
, historical volatility of
39%
and a remaining performance period of
3.9
years (as these shares cliff vest at the end of
four
years). The risk-free interest rate was based on the U.S. Treasury yield curve on the grant date, expected dividend yield was based on dividend levels at the grant date, expected volatility was based on the historical volatility of our stock, and the expected life of shares granted represents the longest remaining performance period from the grant date. There were no vestings in
2017
,
2016
or
2015
.
|
|
|
Shares
|
|
Weighted Average
Exercise Price
per Share
|
|
Weighted Average
Remaining Contractual
Life (in Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding options at December 31, 2016
|
|
598
|
|
|
$
|
19.47
|
|
|
|
|
|
||
Exercised
|
|
(66
|
)
|
|
$
|
17.12
|
|
|
|
|
|
||
Forfeited / Expired
|
|
(35
|
)
|
|
$
|
51.88
|
|
|
|
|
|
||
Outstanding options at December 31, 2017
(1)
|
|
497
|
|
|
$
|
17.55
|
|
|
1.1
|
|
$
|
2,603
|
|
Exercisable options at December 31, 2017
|
|
490
|
|
|
$
|
17.33
|
|
|
1.1
|
|
$
|
2,603
|
|
(1)
|
We estimate that all outstanding options will ultimately vest.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sources of (Loss) Income Before Taxes
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
(821,900
|
)
|
|
$
|
(54,587
|
)
|
|
$
|
(1,007,172
|
)
|
Non-U.S.
|
|
300,737
|
|
|
412,737
|
|
|
429,123
|
|
|||
Total
|
|
$
|
(521,163
|
)
|
|
$
|
358,150
|
|
|
$
|
(578,049
|
)
|
|
|
|
|
|
|
|
||||||
|
|
Years Ended December 31,
|
||||||||||
Sources of Income Tax (Expense) Benefit
|
|
2017
(2)
|
|
2016
(3)
|
|
2015
(4)
|
||||||
Current income taxes
|
|
|
|
|
|
|
||||||
U.S. Federal
(1)
|
|
$
|
1,020
|
|
|
$
|
740
|
|
|
$
|
9,605
|
|
U.S. State
|
|
(5,770
|
)
|
|
(5,567
|
)
|
|
(5,893
|
)
|
|||
Non-U.S.
|
|
(62,571
|
)
|
|
(78,829
|
)
|
|
(80,488
|
)
|
|||
Total current income taxes
|
|
$
|
(67,321
|
)
|
|
$
|
(83,656
|
)
|
|
$
|
(76,776
|
)
|
Deferred income taxes
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
$
|
(549,635
|
)
|
|
$
|
100,686
|
|
|
$
|
208,886
|
|
U.S. State
|
|
(89,128
|
)
|
|
(2,707
|
)
|
|
191
|
|
|||
Non-U.S.
|
|
(92,851
|
)
|
|
6,603
|
|
|
(30,107
|
)
|
|||
Total deferred income taxes
|
|
$
|
(731,614
|
)
|
|
$
|
104,582
|
|
|
$
|
178,970
|
|
Total income tax (expense) benefit
|
|
$
|
(798,935
|
)
|
|
$
|
20,926
|
|
|
$
|
102,194
|
|
(1)
|
Tax expense of
$6,409
and
$4,925
associated with share-based compensation were recorded in APIC in
2016
and
2015
, respectively.
|
(2)
|
Income tax expense for 2017 was impacted by approximately
$1,051,000
, primarily due to the revaluation of our U.S. DTAs resulting from the impact of the Tax Reform Act and the establishment of VAs against our net U.S. and non-U.S. DTAs, as further discussed below.
|
(3)
|
Income tax expense for 2016 benefited by approximately
$15,000
from the release of VA for our Non-U.S. NOLs and by approximately
$67,000
from the reversal of a deferred tax liability associated with historical earnings of a non-U.S. subsidiary for which the earnings are no longer anticipated to be subject to tax.
|
(4)
|
Income tax expense for 2015 was impacted by approximately
$62,600
, primarily due to the establishment of VA against U.S.-State NOLs generated in 2015 as a result of the impact of the sale of our Nuclear Operations (approximately
$58,000
). Income tax expense for 2015 also reflects the non-deductibility of the goodwill impairment for the period.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax benefit (expense) at statutory rate (25.0% for 2017, 2016 and 2015)
|
|
$
|
130,291
|
|
|
$
|
(89,538
|
)
|
|
$
|
144,512
|
|
U.S. State income taxes
|
|
(61,684
|
)
|
|
(6,461
|
)
|
|
(3,984
|
)
|
|||
Non-deductible meals and entertainment
|
|
(15,493
|
)
|
|
(8,302
|
)
|
|
(8,951
|
)
|
|||
U.S. Federal valuation allowance established
|
|
(564,586
|
)
|
|
—
|
|
|
—
|
|
|||
U.S. Federal tax rate change
|
|
(306,430
|
)
|
|
—
|
|
|
—
|
|
|||
Non-U.S. valuation allowance established
|
|
(105,452
|
)
|
|
(8,020
|
)
|
|
(1,985
|
)
|
|||
Non-U.S. valuation allowance utilized
|
|
1,700
|
|
|
23,809
|
|
|
4,642
|
|
|||
Statutory tax rate differential
|
|
78,730
|
|
|
4,855
|
|
|
102,941
|
|
|||
Unremitted earnings of subsidiaries
|
|
6,650
|
|
|
64,376
|
|
|
(10,369
|
)
|
|||
Noncontrolling interests
|
|
9,002
|
|
|
20,165
|
|
|
19,427
|
|
|||
Non-deductible goodwill impairment
|
|
—
|
|
|
—
|
|
|
(158,585
|
)
|
|||
Non-taxable interest income
|
|
28,773
|
|
|
18,856
|
|
|
—
|
|
|||
Excess stock compensation tax expense
|
|
(5,417
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
4,981
|
|
|
1,186
|
|
|
14,546
|
|
|||
Income tax (expense) benefit
|
|
$
|
(798,935
|
)
|
|
$
|
20,926
|
|
|
$
|
102,194
|
|
Effective tax rate
|
|
(153.3
|
)%
|
|
(5.8
|
)%
|
|
17.7
|
%
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred Tax Assets
|
|
|
|
|
||||
U.S. Federal operating losses and credits
|
|
$
|
443,761
|
|
|
$
|
595,630
|
|
U.S. State operating losses and credits
|
|
229,923
|
|
|
203,195
|
|
||
Non-U.S. operating losses
|
|
67,081
|
|
|
50,410
|
|
||
Contract revenue and cost
|
|
29,530
|
|
|
55,748
|
|
||
Employee compensation and benefit plan reserves
|
|
59,548
|
|
|
80,733
|
|
||
Insurance and legal reserves
|
|
7,682
|
|
|
16,209
|
|
||
Disallowed interest
|
|
145,833
|
|
|
117,558
|
|
||
Other
|
|
74,629
|
|
|
70,969
|
|
||
Total deferred tax assets
|
|
$
|
1,057,987
|
|
|
$
|
1,190,452
|
|
Valuation allowance
|
|
(954,299
|
)
|
|
(160,568
|
)
|
||
Net deferred tax assets
|
|
$
|
103,688
|
|
|
$
|
1,029,884
|
|
Deferred Tax Liabilities
|
|
|
|
|
||||
Investment in foreign subsidiaries
|
|
$
|
(1,586
|
)
|
|
$
|
(14,644
|
)
|
Depreciation and amortization
|
|
(165,873
|
)
|
|
(292,439
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(167,459
|
)
|
|
$
|
(307,083
|
)
|
|
|
|
|
|
||||
Net total deferred tax assets
|
|
$
|
(63,771
|
)
|
|
$
|
722,801
|
|
•
|
The operations that resulted in such losses were either sold as of December 31, 2016 or contemplated for sale as of the filing of our 2016 Form 10-K. Specifically, absent the charges related to the exited businesses (including non-deductible goodwill charges), our cumulative U.S. income for the three years ended December 31, 2016 was approximately
$1,096,700
;
|
•
|
We had a history of U.S. income prior to incurring the losses during 2015 and 2016. Specifically, our cumulative U.S. income for the ten year period ended December 31, 2014 was approximately
$1,509,000
;
|
•
|
In spite of such U.S. losses during 2015 and 2016, we were not in a cumulative loss position for the three years ended December 31, 2016 on a consolidated basis; and
|
•
|
Our projections of U.S. income, inclusive of the reversal of taxable temporary differences, indicated we would realize our U.S. NOL DTAs over ten years prior to their expiration in 2035. Our projections of U.S. income were supported by a significant U.S. backlog of approximately
$9,305,000
at December 31, 2016, and a strong forecasted U.S. market for our EPC and technology products and services.
|
•
|
The aforementioned history of U.S. income and the fact that we had exited the businesses that resulted in the losses for 2015 and 2016;
|
•
|
In July 2017, we initiated steps to market and sell our Technology Operations (discussed in
Note 2
) and classified the Technology Operations as a discontinued operation during the third quarter 2017. We anticipated that proceeds from the transaction would result in a significant U.S. taxable gain that would be realized during the fourth quarter 2017 or prior to filing our 2017 Form 10-K. Including the anticipated taxable gain, we projected we would not have a
|
•
|
The aforementioned taxable gain would result in the accelerated realization of a significant portion of our U.S. NOL DTAs. Further, our projections of U.S. income, inclusive of the reversal of taxable temporary differences, indicated we would continue to realize the remaining U.S. NOL DTAs over ten years prior to their expiration in 2035.
|
•
|
The Combination, which we anticipate will close in the second quarter 2018, will result in the sale of our Technology Operations to McDermott in advance of the consummation of the transaction (“Combination Technology Sale”), which will result in a significant U.S. taxable gain similar to the gain anticipated in connection with the original Technology Sale.
|
•
|
Our projections of U.S. income, inclusive of the reversal of taxable temporary differences and the anticipated gain resulting from the Combination, indicate we will continue to realize the remaining U.S. NOL DTAs prior to their expiration in
2037
.
|
|
|
Years Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Unrecognized income tax benefits at the beginning of the year
|
|
$
|
14,162
|
|
|
$
|
9,140
|
|
Increase as a result of:
|
|
|
|
|
||||
Tax positions taken during the prior period
|
|
2,319
|
|
|
6,038
|
|
||
Decreases as a result of:
|
|
|
|
|
||||
Lapse of applicable statute of limitations
|
|
—
|
|
|
—
|
|
||
Settlements with taxing authorities
|
|
(230
|
)
|
|
(1,016
|
)
|
||
Unrecognized income tax benefits at the end of the year
(1)
|
|
$
|
16,251
|
|
|
$
|
14,162
|
|
(1)
|
If these income tax benefits were ultimately recognized, approximately
$13,100
and
$11,000
of the
December 31, 2017
and
2016
balances, respectively, would benefit tax expense as we are contractually indemnified for the remaining balances.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
4,526,093
|
|
|
$
|
6,114,725
|
|
|
$
|
7,767,707
|
|
Fabrication Services
|
|
1,827,126
|
|
|
2,200,500
|
|
|
2,464,006
|
|
|||
Technology
|
|
320,111
|
|
|
284,424
|
|
|
399,099
|
|
|||
Total revenue
|
|
$
|
6,673,330
|
|
|
$
|
8,599,649
|
|
|
$
|
10,630,812
|
|
Depreciation And Amortization
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
16,987
|
|
|
$
|
17,906
|
|
|
$
|
49,395
|
|
Fabrication Services
|
|
48,686
|
|
|
55,188
|
|
|
57,121
|
|
|||
Technology
|
|
22,702
|
|
|
23,052
|
|
|
22,864
|
|
|||
Total depreciation and amortization
|
|
$
|
88,375
|
|
|
$
|
96,146
|
|
|
$
|
129,380
|
|
Equity Earnings (Loss)
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
36,635
|
|
|
$
|
9,818
|
|
|
$
|
(2,427
|
)
|
Fabrication Services
|
|
—
|
|
|
(1,486
|
)
|
|
(3,812
|
)
|
|||
Technology
|
|
11,762
|
|
|
16,238
|
|
|
21,016
|
|
|||
Total equity earnings (loss)
|
|
$
|
48,397
|
|
|
$
|
24,570
|
|
|
$
|
14,777
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
(Loss) Income From Operations
|
|
|
|
|
|
|
||||||
Engineering & Construction
(1)
|
|
$
|
(544,202
|
)
|
|
$
|
143,405
|
|
|
$
|
(886,386
|
)
|
Fabrication Services
|
|
258,451
|
|
|
179,319
|
|
|
221,333
|
|
|||
Technology
|
|
104,914
|
|
|
104,817
|
|
|
150,466
|
|
|||
Total operating groups
|
|
$
|
(180,837
|
)
|
|
$
|
427,541
|
|
|
$
|
(514,587
|
)
|
Restructuring related costs
|
|
(114,525
|
)
|
|
—
|
|
|
—
|
|
|||
Total (loss) income from operations
|
|
$
|
(295,362
|
)
|
|
$
|
427,541
|
|
|
$
|
(514,587
|
)
|
Capital Expenditures
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
14,037
|
|
|
$
|
4,121
|
|
|
$
|
15,331
|
|
Fabrication Services
|
|
22,572
|
|
|
32,328
|
|
|
42,105
|
|
|||
Technology
|
|
7,551
|
|
|
10,038
|
|
|
8,091
|
|
|||
Total capital expenditures
|
|
$
|
44,160
|
|
|
$
|
46,487
|
|
|
$
|
65,527
|
|
(1)
|
As discussed further in
Note 4
, during 2015 we recorded a non-cash pre-tax charge of approximately
$1,505,900
within our Engineering & Construction operating group related to the sale of our Nuclear Operations. In addition, during 2016 we recorded a non-cash pre-tax charge of approximately
$148,100
resulting from a reserve for the Transaction Receivable associated with the 2015 sale of our Nuclear Operations.
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Engineering & Construction
|
|
$
|
3,142,224
|
|
|
$
|
3,572,399
|
|
|
$
|
4,141,731
|
|
Fabrication Services
|
|
1,934,334
|
|
|
2,394,041
|
|
|
2,600,668
|
|
|||
Technology
|
|
895,024
|
|
|
996,104
|
|
|
834,039
|
|
|||
Total assets of continuing operations
|
|
5,971,582
|
|
|
6,962,544
|
|
|
7,576,438
|
|
|||
Assets of discontinued Capital Service Operations (Note 5)
|
|
—
|
|
|
876,876
|
|
|
1,615,622
|
|
|||
Total assets
|
|
$
|
5,971,582
|
|
|
$
|
7,839,420
|
|
|
$
|
9,192,060
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue by Country
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
5,231,433
|
|
|
$
|
5,627,776
|
|
|
$
|
6,210,154
|
|
Australia
|
|
255,550
|
|
|
1,745,032
|
|
|
2,171,442
|
|
|||
Other
(1)
|
|
1,186,347
|
|
|
1,226,841
|
|
|
2,249,216
|
|
|||
Total revenue
|
|
$
|
6,673,330
|
|
|
$
|
8,599,649
|
|
|
$
|
10,630,812
|
|
(1)
|
Revenue earned in other countries, including The Netherlands (our country of domicile), was not individually greater than
10%
of our consolidated revenue in
2017
,
2016
or
2015
.
|
Quarter Ended 2017
|
|
March 31
(1)
|
|
June 30
(1)
|
|
September 30
(1)
|
|
December 31
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Revenue
|
|
$
|
1,827,352
|
|
|
$
|
1,283,477
|
|
|
$
|
1,868,896
|
|
|
$
|
1,693,605
|
|
Gross profit (loss)
(2)
|
|
$
|
150,951
|
|
|
$
|
(378,057
|
)
|
|
$
|
149,560
|
|
|
$
|
84,658
|
|
Restructuring related costs
(3)
|
|
$
|
—
|
|
|
$
|
4,000
|
|
|
$
|
26,882
|
|
|
$
|
83,643
|
|
Other operating expense (income), net
(4)
|
|
$
|
31
|
|
|
$
|
(363
|
)
|
|
$
|
(45
|
)
|
|
$
|
(64,539
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
(5),(6)
|
|
$
|
42,411
|
|
|
$
|
(301,663
|
)
|
|
$
|
6,380
|
|
|
$
|
(1,067,226
|
)
|
Net income (loss) from discontinued operations
(7)
|
|
9,494
|
|
|
(120,847
|
)
|
|
5,166
|
|
|
1,724
|
|
||||
Net income (loss)
|
|
$
|
51,905
|
|
|
$
|
(422,510
|
)
|
|
$
|
11,546
|
|
|
$
|
(1,065,502
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to CB&I
|
|
$
|
15,574
|
|
|
$
|
(304,115
|
)
|
|
$
|
4,873
|
|
|
$
|
(1,069,192
|
)
|
Net income (loss) from discontinued operations attributable to CB&I
|
|
9,081
|
|
|
(121,304
|
)
|
|
5,166
|
|
|
1,724
|
|
||||
Net income (loss) attributable to CB&I
|
|
$
|
24,655
|
|
|
$
|
(425,419
|
)
|
|
$
|
10,039
|
|
|
$
|
(1,067,468
|
)
|
Net income (loss) attributable to CB&I per share (Basic):
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.16
|
|
|
$
|
(3.02
|
)
|
|
$
|
0.05
|
|
|
$
|
(10.54
|
)
|
Discontinued operations
|
|
0.09
|
|
|
(1.20
|
)
|
|
0.05
|
|
|
0.02
|
|
||||
Total
|
|
$
|
0.25
|
|
|
$
|
(4.22
|
)
|
|
$
|
0.10
|
|
|
$
|
(10.52
|
)
|
Net income (loss) attributable to CB&I per share (Diluted):
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.15
|
|
|
$
|
(3.02
|
)
|
|
$
|
0.05
|
|
|
$
|
(10.54
|
)
|
Discontinued operations
|
|
0.09
|
|
|
(1.20
|
)
|
|
0.05
|
|
|
0.02
|
|
||||
Total
|
|
$
|
0.24
|
|
|
$
|
(4.22
|
)
|
|
$
|
0.10
|
|
|
$
|
(10.52
|
)
|
Quarter Ended 2016
|
|
March 31
(1)
|
|
June 30
(1)
|
|
September 30
(1)
|
|
December 31
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Revenue
|
|
$
|
2,134,629
|
|
|
$
|
2,161,164
|
|
|
$
|
2,279,872
|
|
|
$
|
2,023,984
|
|
Gross profit
|
|
$
|
255,570
|
|
|
$
|
257,955
|
|
|
$
|
286,414
|
|
|
$
|
77,471
|
|
Loss on net assets sold and intangible assets impairment
(8)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148,148
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
(9)
|
|
$
|
113,923
|
|
|
$
|
123,869
|
|
|
$
|
157,329
|
|
|
$
|
(16,045
|
)
|
Net income (loss) from discontinued operations
(10)
|
|
6,039
|
|
|
8,679
|
|
|
11,090
|
|
|
(644,707
|
)
|
||||
Net income (loss)
|
|
$
|
119,962
|
|
|
$
|
132,548
|
|
|
$
|
168,419
|
|
|
$
|
(660,752
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to CB&I
|
|
$
|
101,334
|
|
|
$
|
115,597
|
|
|
$
|
111,600
|
|
|
$
|
(20,614
|
)
|
Net income from discontinued operations attributable to CB&I
|
|
5,591
|
|
|
8,242
|
|
|
10,160
|
|
|
(645,079
|
)
|
||||
Net income (loss) attributable to CB&I
|
|
$
|
106,925
|
|
|
$
|
123,839
|
|
|
$
|
121,760
|
|
|
$
|
(665,693
|
)
|
Net income (loss) attributable to CB&I per share (Basic):
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.97
|
|
|
$
|
1.10
|
|
|
$
|
1.10
|
|
|
$
|
(0.21
|
)
|
Discontinued operations
|
|
0.05
|
|
|
0.08
|
|
|
0.10
|
|
|
(6.44
|
)
|
||||
Total
|
|
$
|
1.02
|
|
|
$
|
1.18
|
|
|
$
|
1.20
|
|
|
$
|
(6.65
|
)
|
Net income (loss) attributable to CB&I per share (Diluted):
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.96
|
|
|
$
|
1.09
|
|
|
$
|
1.10
|
|
|
$
|
(0.21
|
)
|
Discontinued operations
|
|
0.05
|
|
|
0.08
|
|
|
0.10
|
|
|
(6.44
|
)
|
||||
Total
|
|
$
|
1.01
|
|
|
$
|
1.17
|
|
|
$
|
1.20
|
|
|
$
|
(6.65
|
)
|
(1)
|
In July 2017, we initiated a plan to market and sell our Technology Operations. Accordingly, we considered the Technology Operations to be a discontinued operation during the third quarter 2017, and presented our third quarter and year-to-date results as a discontinued operation within our September 30, 2017 Form 10-Q filed with the SEC on October 31, 2017. However, during the fourth quarter 2017, we suspended our plan to sell our Technology Operations due to the Combination Agreement. As such, the Technology Operations are not reported as a discontinued operation at December 31, 2017. Accordingly, our third quarter 2017 results have been recast to reflect the Technology Operations as a continuing operation. See
Note 2
for further discussion of our previous plan to sell our Technology Operations and the anticipated Combination.
|
(2)
|
Significant changes in estimated margins on projects resulted in a net decrease to our income from operations of approximately
$767,000
during 2017, of which of approximately
$548,000
was recorded in the second quarter 2017, all within our Engineering & Construction operating group. See
Note 18
for further discussion of projects with significant changes in estimated margins.
|
(3)
|
Restructuring related costs for 2017 primarily relate to facility consolidations, severance and other employee related costs, professional fees, and other miscellaneous costs resulting primarily from our publicly announced cost reduction, facility rationalization and strategic initiatives.
Approximately
$4,000
of costs previously recorded within other operating expense during the second quarter 2017 were reclassified to restructuring related costs. See
Note 10
for further discussion of restructuring related costs.
|
(4)
|
Other operating expense (income), net, for the fourth quarter 2017 included a gain of approximately
$62,700
resulting from the receipt of insurance proceeds in excess of associated costs for a fabrication facility within our Fabrication Services operating group that was damaged during Hurricane Harvey. See
Note 2
for further discussion of other operating expense (income), net.
|
(5)
|
Income tax expense for the fourth quarter 2017 included expense of approximately
$306,430
resulting from the revaluation of our U.S. deferred taxes due to a reduction in the U.S. corporate income tax rate, and a benefit of approximately
$6,700
, both resulting from changes in U.S. tax law enacted during the fourth quarter 2017. In addition, income tax expense for the fourth quarter 2017 included expense of approximately
$702,026
resulting from the establishment of valuation allowances on our remaining net deferred tax assets. See
Note 17
for further discussion of our income taxes.
|
(6)
|
Interest expense for the fourth quarter 2017 included an accrual of approximately
$35,000
for modified make-whole payments on our Notes that are required as a result of the anticipated early repayment of our Notes in connection with the Combination. See
Note 2
and
Note 11
for further discussion of the anticipated Combination and our Notes, respectively.
|
(7)
|
Net loss from discontinued operations attributable to CB&I for the second quarter 2017 included a pre-tax charge of approximately
$64,800
associated with the June 30, 2017 sale of our Capital Services Operations, and income tax expense of approximately
$61,000
resulting from a taxable gain on the transaction (due primarily to the non-deductibility of goodwill). Net income from discontinued operations for the third quarter and fourth quarter of 2017 was due to an income tax benefit of approximately
$5,200
and
$1,700
, respectively, resulting from updates to our estimates of the tax effect of the disposition. See
Note 5
for further discussion of our discontinued operations.
|
(8)
|
The fourth quarter 2016 included a non-cash pre-tax charge of approximately
$148,100
(approximately
$96,300
after-tax) resulting from a reserve for the Transaction Receivable associated with the 2015 sale of our Nuclear Operations. See
Note 4
and
Note 14
for further discussion of the sale of our Nuclear Operations and related dispute with WEC, respectively.
|
(9)
|
Income tax expense for the fourth quarter 2016 included an income tax benefit of approximately
$67,000
resulting from the reversal of a deferred tax liability associated with historical earnings of a non-U.S. subsidiary for which the earnings are no longer anticipated to be subject to tax. See
Note 17
for further discussion of our income taxes.
|
(10)
|
The fourth quarter 2016 included a non-cash pre-tax charge of approximately
$655,000
related to the partial impairment of goodwill for our former Capital Services operating group, resulting from our fourth quarter annual impairment assessment. Net loss from discontinued operations reflects the non-deductibility of the goodwill impairment charge for tax purposes. See
Note 5
for further discussion of our discontinued operations.
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
2.5
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
10.1
(1)
|
|
|
|
|
|
10.2
(1)
|
|
|
|
|
|
10.3
(1)
|
|
|
|
|
|
|
|
|
10.4
(1)
|
|
|
|
|
|
10.5
(1)
|
|
10.6
(1)
|
|
|
|
|
|
10.7
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
(1)
|
|
|
|
|
|
10.9
(1)
|
|
|
|
|
|
|
|
|
|
|
|
10.10
(1)
|
|
|
|
|
|
|
|
|
10.11
|
|
|
|
|
|
|
|
|
10.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18
(1)
|
|
|
|
|
|
10.19
(1)
|
|
|
|
|
|
10.20
(1)
|
|
|
|
|
|
10.21
(1)
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
(1)
|
|
|
|
|
|
10.37
(1)
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
(2)
|
|
|
|
|
|
21.1
(2)
|
|
|
|
|
|
23.1
(2)
|
|
|
|
|
|
31.1
(2)
|
|
|
|
|
|
31.2
(2)
|
|
|
|
|
|
32.1
(2)
|
|
|
|
|
|
32.2
(2)
|
|
|
|
|
|
101.INS
(2),(3)
|
|
XBRL Instance Document
|
101.SCH
(2),(3)
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
(2),(3)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
(2),(3)
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
(2),(3)
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
(2),(3)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Management compensatory plan or arrangement
|
(2)
|
Filed herewith
|
(3)
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations for the years ended
December 31, 2017
,
2016
and
2015
, (ii) the Consolidated Statements of Comprehensive Income for the years ended
December 31, 2017
,
2016
and
2015
, (iii) the Consolidated Balance Sheets as of
December 31, 2017
and
2016
, (iv) the Consolidated Statements of Cash Flows for the years ended
December 31, 2017
,
2016
and
2015
, (v) the Consolidated Statements of Shareholders’ Equity for the years ended
December 31, 2017
,
2016
and
2015
, and (vi) the Notes to Consolidated Financial Statements.
|
Chicago Bridge & Iron Company N.V.
|
|
/s/ Patrick K. Mullen
|
Patrick K. Mullen
|
(Authorized Signer)
|
Signature
|
|
Title
|
/s/ Patrick K. Mullen
|
|
President and Chief Executive Officer
|
Patrick K. Mullen
|
|
(Principal Executive Officer)
|
|
|
Supervisory Director
|
|
|
|
/s/ Michael S. Taff
|
|
Executive Vice President and Chief Financial Officer
|
Michael S. Taff
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Westley S. Stockton
|
|
Vice President, Corporate Controller
|
Westley S. Stockton
|
|
and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ L. Richard Flury
|
|
Supervisory Director and Non-Executive Chairman
|
L. Richard Flury
|
|
|
|
|
|
/s/ James R. Bolch
|
|
Supervisory Director
|
James R. Bolch
|
|
|
|
|
|
/s/ Deborah M. Fretz
|
|
Supervisory Director
|
Deborah M. Fretz
|
|
|
|
|
|
/s/ W. Craig Kissel
|
|
Supervisory Director
|
W. Craig Kissel
|
|
|
|
|
|
/s/ Larry D. McVay
|
|
Supervisory Director
|
Larry D. McVay
|
|
|
|
|
|
/s/ James H. Miller
|
|
Supervisory Director
|
James H. Miller
|
|
|
|
|
|
/s/ Forbes I.J. Alexander
|
|
Supervisory Director
|
Forbes I.J. Alexander
|
|
|
|
|
|
/s/ Marsha C. Williams
|
|
Supervisory Director
|
Marsha C. Williams
|
|
|
|
|
|
Registrant’s Agent for Service in the United States
|
|
|
|
|
|
/s/ Kirsten B. David
|
|
|
Kirsten B. David
|
|
|
|
|
|
CHICAGO BRIDGE & IRON COMPANY (DELAWARE)
, as the Initial Borrower
|
||
|
|
|
By:
|
|
/s/ Luciano Reyes
|
Name:
|
|
Luciano Reyes
|
Title:
|
|
Treasurer
|
|
||
CB&I LLC
, as a Designated Borrower
|
||
By:
|
|
CB&I HoldCo, LLC, its Sole Member
|
|
|
|
By:
|
|
/s/ Regina N. Hamilton
|
Name:
|
|
Regina N. Hamilton
|
Title:
|
|
Secretary
|
|
||
CBI SERVICES, LLC
, as a Designated Borrower
|
||
By:
|
|
CB&I HoldCo, LLC, its Sole Member
|
|
|
|
By:
|
|
/s/ Regina N. Hamilton
|
Name:
|
|
Regina N. Hamilton
|
Title:
|
|
Secretary
|
|
||
CHICAGO BRIDGE & IRON COMPANY B.V.
, as a Designated Borrower
|
||
|
|
|
By:
|
|
/s/ Michael S. Taff
|
Name:
|
|
Michael S. Taff
|
Title:
|
|
Managing Director
|
|
||
CHICAGO BRIDGE & IRON COMPANY
, as a Designated Borrower
|
||
|
|
|
By:
|
|
/s/ Luciano Reyes
|
Name:
|
|
Luciano Reyes
|
Title:
|
|
Vice President and Treasurer
|
|
|
|
|
|
|
COMPANY
:
|
||
|
||
CHICAGO BRIDGE & IRON COMPANY N.V.
|
||
|
|
|
By:
|
|
CHICAGO BRIDGE & IRON COMPANY B.V., its Managing Director
|
|
|
|
By:
|
|
/s/ Michael S. Taff
|
Name:
|
|
Michael S. Taff
|
Title:
|
|
Authorized Signatory
|
|
|
|
|
|
CHICAGO BRIDGE & IRON COMPANY
, a Delaware corporation
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Authorized Signatory
|
|
||||
CHICAGO BRIDGE & IRON COMPANY (DELAWARE)
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CB&I TYLER COMPANY
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CB&I LLC
|
||||
By:
|
|
CB&I HoldCo, LLC, its Sole Member
|
||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
||||
CHICAGO BRIDGE & IRON COMPANY
, an Illinois corporation
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
A & B BUILDERS, LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
|
|
|
|
ASIA PACIFIC SUPPLY CO.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CBI AMERICAS LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CSA TRADING COMPANY LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CB&I WOODLANDS LLC
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CBI COMPANY LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CENTRAL TRADING COMPANY LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CONSTRUCTORS INTERNATIONAL, L.L.C.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
HBI HOLDINGS, LLC
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
HOWE-BAKER INTERNATIONAL, L.L.C.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
HOWE-BAKER ENGINEERS, LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
HOWE-BAKER HOLDINGS, L.L.C.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
HOWE-BAKER MANAGEMENT, L.L.C.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
HOWE-BAKER INTERNATIONAL MANAGEMENT, LLC
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
MATRIX ENGINEERING, LTD.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
MATRIX MANAGEMENT SERVICES, LLC
|
||||
|
|
|
|
|
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
OCEANIC CONTRACTORS, INC.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CBI VENEZOLANA, S.A.
|
||||
|
|
|||
By:
|
|
/s/ Rui Orlando Gomes
|
||
|
|
Name:
|
|
Rui Orlando Gomes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CBI MONTAJES DE CHILE LIMITADA
|
||||
|
|
|||
By:
|
|
/s/ Rui Orlando Gomes
|
||
|
|
Name:
|
|
Rui Orlando Gomes
|
|
|
Title:
|
|
Director/Legal Representative
|
|
||||
CB&I EUROPE B.V.
|
||||
|
|
|||
By:
|
|
/s/ Raymond Buckley
|
||
|
|
Name:
|
|
Raymond Buckley
|
|
|
Title:
|
|
Director
|
|
||||
CBI EASTERN ANSTALT
|
||||
|
|
|||
By:
|
|
/s/ Raymond Buckley
|
||
|
|
Name:
|
|
Raymond Buckley
|
|
|
Title:
|
|
Director
|
|
||||
CB&I POWER COMPANY B.V.
(f/k/a CMP HOLDINGS B.V.)
|
||||
|
|
|||
By:
|
|
/s/ Raymond Buckley
|
||
|
|
Name:
|
|
Raymond Buckley
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
CBI CONSTRUCTORS PTY LTD
|
||||
|
|
|||
By:
|
|
/s/ Richard W. Heo
|
||
|
|
Name:
|
|
Richard W. Heo
|
|
|
Title:
|
|
Director
|
|
||||
CBI ENGINEERING AND CONSTRUCTION
|
||||
CONSULTANT (SHANGHAI) CO. LTD.
|
||||
|
|
|||
By:
|
|
/s/ Natarajan Sankara Narayanan
|
||
|
|
Name:
|
|
Natarajan Sankara Narayanan
|
|
|
Title:
|
|
Chairman
|
|
||||
CBI (PHILIPPINES), INC.
|
||||
|
|
|||
By:
|
|
/s/ Thomas R. Feltes
|
||
|
|
Name:
|
|
Thomas R. Feltes
|
|
|
Title:
|
|
Director
|
|
||||
CBI OVERSEAS, LLC
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
||||
CB&I CONSTRUCTORS LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Duncan Wigney
|
||
|
|
Name:
|
|
Duncan Wigney
|
|
|
Title:
|
|
Director
|
|
||||
CB&I HOLDINGS (U.K.) LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Duncan Wigney
|
||
|
|
Name:
|
|
Duncan Wigney
|
|
|
Title:
|
|
Director
|
|
||||
CB&I UK LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Duncan Wigney
|
||
|
|
Name:
|
|
Duncan Wigney
|
|
|
Title:
|
|
Director
|
LUTECH RESOURCES LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Jonathan Stephenson
|
||
|
|
Name:
|
|
Jonathan Stephenson
|
|
|
Title:
|
|
Secretary
|
|
||||
NETHERLANDS OPERATING COMPANY B.V.
|
||||
|
|
|||
By:
|
|
/s/ H. M. Koese
|
||
|
|
Name:
|
|
H. M. Koese
|
|
|
Title:
|
|
Director
|
|
||||
CBI NEDERLAND B.V.
|
||||
|
|
|||
By:
|
|
/s/ Ashok Joshi
|
||
|
|
Name:
|
|
Ashok Joshi
|
|
|
Title:
|
|
Director
|
CHICAGO BRIDGE & IRON (ANTILLES) N.V.
|
||||
|
|
|
|
|
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Managing Director
|
|
||||
LUMMUS TECHNOLOGY HEAT TRANSFER B.V.
|
||||
|
|
|||
By:
|
|
/s/ John R. Albanese, Jr.
|
||
|
|
Name:
|
|
John R. Albanese, Jr.
|
|
|
Title:
|
|
Director
|
|
||||
LEALAND FINANCE COMPANY B.V.
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Managing Director
|
|
||||
CB&I FINANCE COMPANY LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Barry R. van Elven
|
||
|
|
Name:
|
|
Barry R. van Elven
|
|
|
Title:
|
|
Authorized Signatory
|
|
CB&I OIL & GAS EUROPE B.V.
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Managing Director
|
|
||||
CBI COLOMBIANA S.A.
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Director
|
|
||||
CHICAGO BRIDGE & IRON COMPANY B.V.
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Managing Director
|
|
|
|
|
|
LUMMUS TECHNOLOGY INTERNATIONAL LLC (f/k/a CB&I TECHNOLOGY INTERNATIONAL CORPORATION)
|
||||
|
|
|||
By:
|
|
/s/ John R. Albanese, Jr.
|
||
|
|
Name:
|
|
John R. Albanese, Jr.
|
|
|
Title:
|
|
Vice President – Finance – Treasurer
|
|
||||
LUMMUS TECHNOLOGY VENTURES LLC
|
||||
(f/k/a CB&I TECHNOLOGY VENTURES, INC.)
|
||||
|
|
|||
By:
|
|
/s/ John R. Albanese, Jr.
|
||
|
|
Name:
|
|
John R. Albanese, Jr.
|
|
|
Title:
|
|
Vice President & Treasurer
|
|
||||
LUMMUS TECHNOLOGY OVERSEAS LLC (f/k/a CB&I TECHNOLOGY OVERSEAS CORPORATION)
|
||||
|
|
|||
By:
|
|
/s/ John R. Albanese, Jr.
|
||
|
|
Name:
|
|
John R. Albanese, Jr.
|
|
|
Title:
|
|
Vice President & Treasurer
|
|
CATALYTIC DISTILLATION TECHNOLOGIES
|
||||||
|
|
|||||
By:
|
|
/s/ John R. Albanese, Jr.
|
||||
|
|
Name:
|
|
John R. Albanese, Jr.
|
||
|
|
Title:
|
|
Management Committee Member
|
||
|
||||||
LUMMUS TECHNOLOGY LLC (f/k/a CB&I TECHNOLOGY INC.)
|
||||||
|
|
|||||
By:
|
|
/s/ John R. Albanese, Jr.
|
||||
|
|
Name:
|
|
John R. Albanese, Jr.
|
||
|
|
Title:
|
|
CFO & Treasurer
|
||
|
||||||
CBI SERVICES, LLC
|
||||||
By:
|
|
CB&I HoldCo, LLC, its Sole Member
|
||||
|
|
|||||
By:
|
|
/s/ Regina N. Hamilton
|
||||
|
|
Name:
|
|
Regina N. Hamilton
|
||
|
|
Title:
|
|
Secretary
|
||
|
|
|
|
|
||
WOODLANDS INTERNATIONAL INSURANCE COMPANY
|
||||||
|
|
|||||
By:
|
|
/s/ Michelle Turgeon
|
||||
|
|
Name:
|
|
Michelle Turgeon
|
||
|
|
Title:
|
|
Director
|
||
|
||||||
CB&I HUNGARY HOLDING LIMITED LIABILITY COMPANY
|
||||||
|
|
|||||
By:
|
|
/s/ William G. Lamb
|
||||
|
|
Name:
|
|
William G. Lamb
|
||
|
|
Title:
|
|
Director
|
||
|
||||||
CB&I NOVOLEN TECHNOLOGY GMBH
(f/k/a LUMMUS NOVOLEN TECHNOLOGY GMBH) |
||||||
|
|
|||||
By:
|
|
/s/ Godofredo Follmer
|
||||
|
|
Name:
|
|
Godofredo Follmer
|
||
|
|
Title:
|
|
Managing Director
|
||
|
||||||
CB&I LUMMUS GMBH
|
||||||
|
|
|||||
By:
|
|
/s/ Andreas Schwarzhaupt
|
||||
|
|
Name:
|
|
Andreas Schwarzhaupt
|
||
|
|
Title:
|
|
Managing Director
|
||
|
CB&I S.R.O.
|
||||
|
|
|||
By:
|
|
/s/ Jiri Gregor
|
||
|
|
Name:
|
|
Jiri Gregor
|
|
|
Title:
|
|
Managing Director
|
|
||||
CBI PERUANA S.A.C.
|
||||
|
|
|||
By:
|
|
/s/ Cesar Canals
|
||
|
|
Name:
|
|
Cesar Canals
|
|
|
Title:
|
|
General Manager
|
|
||||
HORTON CBI, LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Gregory L. Guse
|
||
|
|
Name:
|
|
Gregory L. Guse
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
CB&I (NIGERIA) LIMITED
|
||||
|
|
|||
By:
|
|
/s/ Natarajan Sankara Narayanan
|
||
|
|
Name:
|
|
Natarajan Sankara Narayanan
|
|
|
Title:
|
|
Director
|
|
||||
CB&I SINGAPORE PTE LTD.
|
||||
|
|
|||
By:
|
|
/s/ Michael S. Taff
|
||
|
|
Name:
|
|
Michael S. Taff
|
|
|
Title:
|
|
Director
|
|
||||
CB&I NORTH CAROLINA, INC.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Director
|
|
||||
SHAW ALLOY PIPING PRODUCTS, LLC
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Manager
|
|
||||
CB&I WALKER LA, L.L.C.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Manager
|
|
|
|
|
|
CBI OVERSEAS (FAR EAST) INC.
|
||||
|
|
|||
By:
|
|
/s/ Joseph Christaldi
|
||
|
|
Name:
|
|
Joseph Christaldi
|
|
|
Title:
|
|
Director
|
|
||||
CB&I GROUP INC. (f/k/a THE SHAW GROUP INC.)
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
LUMMUS GASIFICATION TECHNOLOGY LICENSING LLC
(f/k/a LUMMUS GASIFICATION TECHNOLOGY LICENSING COMPANY) |
||||
|
|
|||
By:
|
|
/s/ John R. Albanese, Jr.
|
||
|
|
Name:
|
|
John R. Albanese, Jr.
|
|
|
Title:
|
|
Director
|
|
||||
CB&I LAURENS, INC.
|
||||
|
|
|||
By:
|
|
/s/ William G. Lamb
|
||
|
|
Name:
|
|
William G. Lamb
|
|
|
Title:
|
|
Vice President – Global Tax
|
|
||||
SHAW SSS FABRICATORS, INC.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Treasurer
|
|
||||
CHICAGO BRIDGE & IRON COMPANY (NETHERLANDS), LLC
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Director
|
|
|
|
|
|
CBI US HOLDING COMPANY INC.
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
CBI HOLDCO TWO INC.
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
||||
CBI COMPANY BV
|
||||
|
|
|||
By:
|
|
/s/ Ashok Joshi
|
||
|
|
Name:
|
|
Ashok Joshi
|
|
|
Title:
|
|
Director
|
|
||||
CB&I HOLDCO, LLC
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
||||
CBI UK CAYMAN ACQUISITION LTD.
|
||||
|
|
|||
By:
|
|
/s/ Jonathan Paul Stephenson
|
||
|
|
Name:
|
|
Jonathan Paul Stephenson
|
|
|
Title:
|
|
Company Secretary
|
|
||||
CB&I INTERNATIONAL INC.
|
||||
|
|
|||
By:
|
|
/s/ Luciano Reyes
|
||
|
|
Name:
|
|
Luciano Reyes
|
|
|
Title:
|
|
Director
|
|
||||
CB&I Fabrication, LLC
|
||||
|
|
|||
By:
|
|
/s/ Hector Gonzalez
|
||
|
|
Name:
|
|
Hector Gonzalez
|
|
|
Title:
|
|
Vice President Finance
|
|
||||
Arabian CBI Ltd.
|
||||
|
|
|||
By:
|
|
/s/ Hector Gonzalez
|
||
|
|
Name:
|
|
Hector Gonzalez
|
|
|
Title:
|
|
Director
|
Arabian CBI Tank Manufacturing Company Inc.
|
||||
|
|
|||
By:
|
|
/s/ Hector Gonzalez
|
||
|
|
Name:
|
|
Hector Gonzalez
|
|
|
Title:
|
|
Director
|
|
||||
CB&I Clearfield, Inc.
|
||||
|
|
|||
By:
|
|
/s/ Richard Heo
|
||
|
|
Name:
|
|
Richard Heo
|
|
|
Title:
|
|
Executive Vice President
|
|
||||
CB&I El Dorado, Inc.
|
||||
|
|
|||
By:
|
|
/s/ Regina N. Hamilton
|
||
|
|
Name:
|
|
Regina N. Hamilton
|
|
|
Title:
|
|
Secretary
|
|
||||
CB&I Lake Charles
|
||||
|
|
|||
By:
|
|
/s/ William G. Lamb
|
||
|
|
Name:
|
|
William G. Lamb
|
|
|
Title:
|
|
Vice President, Global Tax
|
|
|
|
|
|
CBI Company Two BV
|
||||
|
|
|||
By:
|
|
/s/ Ashok Joshi
|
||
|
|
Name:
|
|
Ashok Joshi
|
|
|
Title:
|
|
Director
|
By:
|
Chicago Bridge & Iron Company B.V.,
|
1)
|
Consideration for Release
.
|
a)
|
As soon as practicable (not more than 30 days) after the Effective Date (as defined in Section 5(d) of this Release), the Company will make a lump sum cash payment to Retiree in the amount of
$232,080.00
, less all applicable withholdings. This payment was determined by reference to the prorated forecasted award for Retiree under the Company’s Incentive Compensation Program for 2017, but is not an amount earned or otherwise payable under that program and is in addition to anything of value to which Retiree is otherwise entitled.
|
b)
|
Subject to the terms and conditions of this Agreement, the Committee (as defined in the Plan) has amended each of the LTIP Agreements relating to grants made to Retiree on or after February 18, 2015, such that, as of the Effective Date, Retiree shall be deemed to have met the age and service conditions necessary for Retirement within the meaning of the LTIP and the LTIP Agreements. Retiree understands and agrees that this action by the Committee to amend the LTIP Agreements is in addition to anything of value to which Retiree is otherwise entitled. Accordingly, the Company agrees and acknowledges that, on the Effective Date, the Company shall consider Retiree’s departure from the Company to be a Retirement as defined by Retiree’s LTIP Agreements, including those amended by this Release, and Section 2.34 of the LTIP with respect to all outstanding grants of Options, Restricted Stock Units and Performance Shares previously awarded in the LTIP Agreements, including any such grants made to Retiree on or after February 18, 2015; provided, however, that the Company will not deem Retiree’s departure a Retirement if Retiree does not strictly
|
2)
|
Release
.
|
a)
|
Retiree, on behalf of himself, his heirs, executors, administrators, successors and assigns, hereby irrevocably and unconditionally releases the Company and its parents, subsidiaries, divisions and Affiliates, together with their respective current and former owners, assigns, agents, Supervisory Board members, directors, partners, officers, employees, attorneys and representatives and any of their predecessors and successors and each of their estates, heirs and assigns (all both individually and in their official capacities, and collectively, the “
Company Releasees
”) from any and all complaints, claims, liabilities, obligations, promises, agreements, causes of action, rights, costs, losses, debts and expenses of any nature whatsoever, known or unknown, which Retiree or his heirs, executors, administrators, successors or assigns ever had, now have or hereafter can, will or may have (either directly, indirectly, derivatively or in any other representative capacity) by reason of any matter, fact or cause whatsoever against the Company or any of the other Company Releasees from the commencement of employment with the Company Releasees to the close of business on the date of retirement, except those claims which cannot be released as a matter of law or as arise under this Agreement. This release includes all claims arising out of, or relating to, Retiree’s employment with or retirement from employment with the Company Releasees, including but not limited to, any and all claims pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq., as amended by the Civil Rights Act of 1991; the Civil Rights Act of 1866, 42 U.S.C. §§1981 and 1985; Retiree Retirement Income Security Act of 1974, as amended, 29 U.S.C. §621, et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §12101, et seq.; the Age Discrimination in Employment Act of 1967, 29 U.S.C.§621, et seq., as amended by the Older Workers Benefit Protection Act of 1990 (the “
ADEA
”); the Family and Medical Leave Act of 1993, 29 U.S.C. §2601, et seq., as amended; the Fair Labor Standards Act, 42 U.S.C. §201, et seq., including the Wage and Hour Law relating to payment of wages and overtime; the Worker Adjustment and Retraining Notification Act; the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended; the Sarbanes-Oxley Act, as amended, the Genetic Information Nondiscrimination Act of 2008; Chapter 21 of the Texas Labor Code (also known as the “Texas Commission on Human Rights Act”); Section 451 of the Texas Labor Code; the Texas Payday Law (Chapter 61 of the Texas Labor Code); any other claims under the Texas Labor Code, Texas disability discrimination law (Tex. Hum. Res. Code §§ 121.001 et seq.), the Texas Communicable Diseases Law (Tex. Health & Safety Code §§ 81.101 et seq.), the Texas and Health and Safety Code, the Texas Civil Practice and Remedies Code (including any claim for attorneys’ fees under Chapter 38 of the Texas Civil Practice and Remedies
|
b)
|
Retiree represents that he has not initiated any lawsuit or administrative charge of discrimination against the Company with any federal, state or local court or administrative agency. Retiree understands that nothing contained in this Release limits Retiree’s right, if permitted by law, to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state, or local government agency or commission (“
Government Agencies
”). Retiree further understands that this Release does not limit Retiree’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies, including providing documents or other information, without notice to the Company. Retiree understands that he has waived and released any and all claims for money damages and equitable relief that Retiree may recover from the Company pursuant to the filing or prosecution of any administrative charge against the Company by Retiree, or any resulting civil proceeding or lawsuit brought on Retiree’s behalf for the recovery of such relief, and which arises out of the matters that are and may be released or waived by this Agreement. Although Retiree waives all rights to recover any damages for the claims related to his employment released herein, this Release does not limit Retiree’s right to receive an award for information provided to any Government Agency.
|
c)
|
If Retiree is subpoenaed or otherwise compelled to testify in connection with any matter relating to the Company, he shall immediately notify the Company’s Chief Legal Officer. Nothing in this Agreement is intended to preclude Retiree from truthfully responding to inquiries pursuant to a subpoena in connection with any lawsuit or administrative proceeding, or prohibit Retiree from initiating communications directly with, or responding to any inquiry from, or providing testimony before, any state or federal authority, or from any other cooperation with any government agency. Retiree is not required to notify the Company if Retiree has made such disclosures, or to secure the Company’s permission to do so.
|
3)
|
Mutual Indemnification
|
4)
|
Obligations of Retiree
.
|
a)
|
Confidentiality
. During Retiree’s employment, Retiree had access to certain information concerning the Company that is confidential and proprietary and constitutes valuable and unique property of the Company (hereinafter referred to as “Confidential Information”). Confidential Information shall include, without limitation, the Company’s plans; current and future strategies, potential acquisitions and divestitures; costs; prices; client lists; pricing policies; financial and tax information; the names of and pertinent information regarding suppliers; computer programs; policies and procedures; training and recruiting procedures; accounting procedures; the status and content of the Company’s contracts with its suppliers or clients; and inventions, products, methods and manufacturing techniques at any time used, developed, or investigated by the Company. Retiree agrees that he will not, at any time following his retirement from the Company, disclose to others, use, copy or permit to be copied any Confidential Information (whether or not developed by Retiree) without the prior written consent of the Company. Retiree further agrees to continue to maintain in confidence any confidential information of third parties received as a result of Retiree’s employment and duties with the Company.
|
b)
|
Return of Company Property
. Retiree represents and agrees that Retiree has returned to the Company all property of the Company, including, but not limited to, documents, contracts, agreements, plans, succession plans, staffing plans, Retiree information, photographs, books, notes, reports, files, memoranda, records and software, cloud software accounts containing property of the Company or data relating to the Company, desktops/laptops, tablets, flash drives, hard drives and other computer equipment, credit cards, cardkey passes, door and file keys, computer access codes or disks and instructional manuals, and other physical or electronic property that Retiree received and/or prepared or helped prepare in connection with Retiree’s employment with the Company, and that Retiree has not retained any copies, duplicates, reproductions or excerpts thereof.
|
c)
|
Agreements Concerning Retirement
. In the event that Retiree is determined not to have satisfied and complied with all of the post-employment requirements under the definition of “Retirement” within the meaning of the LTIP Agreements or this Release, the following shall occur:
|
(i)
|
Notwithstanding any provision to the contrary in any agreement or plan, Retiree shall be obligated to forfeit to the Company any Restricted Stock that vested on an accelerated basis as a result of Retiree’s representation of Retirement to Company. In the event Retiree no longer owns said Restricted Stock, then Retiree shall be obligated to pay to the Company the cash equivalent of the Restricted Stock based on the closing price of Company stock on the accelerated vesting date immediately upon demand;
|
(ii)
|
Notwithstanding any provision to the contrary in any agreement or plan, Retiree shall: (a) forfeit any Performance Shares that vested since the Effective Date; (b) if the Performance Shares are already vested and sold, pay to the Company the cash equivalent based on the closing price of Company stock on the vesting date immediately upon demand; and (c) forfeit any right to vest any Performance Shares/Units not already vested; and
|
(iii)
|
Notwithstanding any provision to the contrary in any agreement or plan, Retiree shall be obligated to forfeit to the Company any Options that vested following Retiree’s termination of employment as a result of Retiree’s representation of Retirement to Company. In the event Retiree has already sold said Options, then Retiree shall be obligated to pay to the Company the cash equivalent of any gain above the Option Price Retiree earned on the sale of said Options immediately upon demand.
|
d)
|
Non-Solicitation
. For a period of 2 years following the Effective Date, Retiree shall not, either on Retiree’s own behalf or on behalf of any person or entity (either directly or indirectly via a corporate recruiter, headhunter or any other individual or entity) attempt to induce or otherwise entice any other Retiree of the Company to leave the employment of the Company. Retiree agrees that he will not, either individually or on behalf of any person or entity, (i) attempt to hire or hire any of the employees of the Company during this period or (ii)
|
e)
|
Cooperation
.
|
i)
|
Services
. Retiree agrees to cooperate upon the reasonable, written request of the Company, by making himself reasonably available to provide information that may, in the exclusive discretion of the Company or its attorneys, assist or be relevant to the Company’s legal proceedings including specifically, but not exclusively, depositions, meetings in advance of depositions, meetings in advance of giving a statement in a government investigation, and the giving of a statement in a government investigation, meetings in advance of trial or hearing, and trial or hearing, relating to or arising from the business, actions against Retiree related to his prior employment with the Company, acts or claimed omissions of the Company or any of its affiliates (the “
Services
”). Furthermore, Retiree agrees that Retiree shall testify fully and truthfully in any civil, criminal or administrative investigation proceeding unless Retiree elects to invoke a Fifth Amendment privilege against self-incrimination.
|
ii)
|
Independent Contractor Status
.
The
Company and Retiree expressly agree and understand that Retiree will perform the Services as an independent contractor and nothing in this Release nor the Services rendered hereunder is meant, or shall be construed in any way or manner, to create between Retiree and the Company a relationship of employer and employee, principal and agent, partners or any other relationship other than that of independent parties contracting with each other solely for the purpose of carrying out the Services. Accordingly, Retiree acknowledges and agrees that he shall not be entitled to any compensation or benefits provided by the Company to its employees in connection with carrying out the Services. In addition, Retiree shall have sole and exclusive responsibility for the payment of all federal, state and local income taxes with respect to any compensation provided by the Company hereunder for the Services. Retiree further agrees that Retiree is not an agent of the Company and is not authorized and shall not have the power or authority to bind Company or incur any liability or obligation, or act on behalf of Company following the Retirement Date. Retiree and the Company do not intend for the Services to exceed 20% of the average level of services Retiree provided to the Company during the 36-month period prior to Retiree’s retirement, and consequently it is intended that Retiree will have a “separation from service” with the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“
Section 409A
”), as of October 18, 2017, regardless of the commitment to provide the Services under this Release.
|
iii)
|
Compensation For Services
.
|
(1)
|
Amount
. In consideration for the Services, the Company shall pay Retiree a fee based on the number of documented hours of service rendered by Retiree for the Services at the hourly rate of $335. In no event shall Retiree receive hourly fees for time spent travelling for the Services.
|
(2)
|
Payment Terms
. Within 10 business days after the close of each calendar month in which Retiree provide Services, Retiree shall submit to the Company a monthly service report that summarizes Retiree’s time and activities for the month in rendering the Services. The Company shall then have 10 business days to request any clarifications or additional information about the Services. Once the monthly service report is approved, the Company shall pay Retiree all amounts due for Services rendered in a calendar month no later than the end of the following calendar month.
|
(3)
|
Reimbursement for Expenses
. The Company shall timely reimburse Retiree for reasonable business expenses incurred in connection with the Services in accordance with the Company’s then-current policies for independent contractors as soon as practicable after all required documentation has been timely furnished by Retiree, generally no later than 30 days following the date such documentation has been furnished (but in no event later than the last day of the year following the year in which the expense was incurred).
|
(4)
|
Travel.
The Company may choose to provide Retiree with transportation or accommodations for the Services provided at its own direct cost to the transportation or accommodation provider, which may include travel on the Company’s aircraft.
|
5)
|
Acknowledgments
.
|
a)
|
Retiree has been advised in writing by the Company to consult with an attorney before executing this Release.
|
b)
|
Retiree has carefully read the contents of this Release and understands its contents. Retiree is executing this Release voluntarily, knowingly, and without any duress or coercion.
|
c)
|
Retiree has been extended a period of twenty-one (21) days, commencing October 19, 2017, within which to consider this Release and this has afforded Retiree ample opportunity to consult with financial and legal advisors prior to executing this Release. In the event Retiree decided to execute this Release prior to the expiration of the twenty-one (21) day period after presentment of this Release to Retiree, Retiree hereby certifies and represents that Retiree’s decision to accept such shortening of time is knowing and voluntary and is not induced by the Company through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the twenty-one (21) day period. Should Retiree sign this Release before the expiration of the twenty-one (21) day period, the Company may expedite the processing of the consideration provided in exchange for this Release.
|
d)
|
Retiree understands that for a period of seven (7) days following Retiree’s execution of this Release, Retiree may revoke the Release by notifying the Company’s Chief Legal Officer, in writing, of Retiree’s desire to do so. Provided that Retiree does not revoke this Release this Release shall become effective on the eighth (8th) calendar day after the date on which
|
e)
|
Any consideration received pursuant hereto is subject to applicable taxes. Retiree acknowledges and agrees that the Company has made no representations regarding the tax consequences of any consideration received by Retiree, and Retiree further acknowledges and agrees that Retiree is solely liable and responsible, and will indemnify the Company and hold it harmless, for any consideration that may be deemed subject to withholding tax which were not withheld from these amounts.
|
6)
|
General Provisions
.
|
a)
|
Effective as of the Retirement Date, Retiree resigns from his position as an employee of the Company, from any and all officer or director positions of the Company, and from any committee, trustee or fiduciary position with respect to any employee benefit plan to which Retiree has been appointed by reason of his employment with the Company.
|
b)
|
This Release, together with the LTIP and LTIP Agreements, sets forth the entire agreement between the parties hereto and supersedes any and all prior agreements or understandings, written or oral, between the parties pertaining to the subject matter of this Release, except as otherwise expressly stated herein. This Release expresses the full terms upon which the Company and Retiree conclude the employment relationship. There are no other representations or terms relating to the employment relationship, the conclusion of that relationship, or any pay, benefits or perquisites to which Retiree might otherwise be entitled other than those set forth in writing in this Release. Retiree hereby represents and acknowledges that in executing this Release, except as otherwise set forth herein, Retiree does not rely and has not relied upon any representations or statements made by any of the parties, agents, attorneys, Retirees, or representatives with regard to the subject matter, basis or effect of this Release.
|
c)
|
The provisions of this Release shall be deemed severable. Thus, in the event that any provision (or portion thereof) of this Release should be held to be void, voidable, or unenforceable, the remaining portions shall remain in full force and effect.
|
d)
|
Governing Law and Dispute Resolution
.
|
i)
|
This Release shall be construed and enforced according to the laws of the State of Texas without regard to its conflict of law rules.
|
ii)
|
Retiree and the Company agree that any dispute regarding the terms of this Release and/or the validity of this Release and its addenda, if any, shall be resolved through arbitration.
Retiree and the Company hereby expressly acknowledge that Retiree’s position in the Company had, and the Company’s business have, a substantial impact on interstate
|
(1)
|
Any arbitration-related matter or arbitration proceeding of a dispute regarding the covenants herein and/or the validity of this Release and its addenda, shall be governed, heard, and decided under the provisions and the authority of the Federal Arbitration Act, 9 U.S.C.A. §1, et seq., and shall be submitted for arbitration to the office of the American Arbitration Association (“AAA”) in Houston, Texas, on demand of either Party.
|
(2)
|
Such arbitration proceedings shall be conducted in The Woodlands, Texas, and shall be conducted in accordance with the then-current Employment Arbitration Rules and Mediation Procedures of the AAA, with the exception that (i) Retiree expressly waives the right to request interim measures or injunctive relief from a judicial authority. Retiree acknowledges that the Company alone retains the right to seek injunctive relief from a judicial authority based on the nature of this Release; and (ii) the resolution of any dispute via this mechanism shall be before a single arbitrator. Each Party shall have the right to be represented by counsel or other designated representatives. The Parties shall negotiate in good faith to appoint a mutually acceptable arbitrator; provided, however, that, in the event that the Parties are unable to agree upon an arbitrator within 30 days after the commencement of the arbitration proceedings, the AAA shall appoint the arbitrator.
|
(3)
|
The arbitrator shall have the right to award or include in his or her award any relief that he or she deems proper under the circumstances, including, without limitation, all types of relief that could be awarded by a court of law, such as money damages (with interest on unpaid amounts from date due), specific performance and injunctive relief. The arbitrator shall issue a written opinion explaining the reasons for his or her decision and award. The award and decision of the arbitrator shall be conclusive and binding upon both Parties, and judgment upon the award may be entered in any court of competent jurisdiction. The Parties acknowledge and agree that any arbitration award may be enforced against either or both of them in a court of competent jurisdiction, and each waives any right to contest the validity or enforceability of such award. The Parties further agree to be bound by the provisions of any statute of limitations that would be otherwise applicable to the controversy, dispute, or claim that is the subject of any arbitration proceeding initiated hereunder. Without limiting the foregoing, the Parties shall be entitled in any such arbitration proceeding to the entry of an order by a court of competent jurisdiction pursuant to a decision of the arbitrator for specific performance of any of the requirements of this Release.
|
(4)
|
The provisions of this Section shall survive and continue in full force and effect subsequent to and notwithstanding expiration or termination of this Agreement for any reason. The Company and Retiree shall be equally responsible for the payment of the arbitration fees, including those of the arbitrator. The arbitrator shall have the
|
e)
|
Retiree and the Company will neither make nor authorize any public statement to be made to any third party disparaging, defaming or criticizing the other in their business interests, conduct and/or affairs. The Company shall make reasonable efforts to cause its officers or any member of Board of Directors to comply with this requirement.
|
f)
|
Any waiver, alteration, amendment or modification of any of the terms of this Release shall be valid only if made in writing and signed by the parties hereto;
provided
,
however
, that any such waiver, alteration, amendment, or modification is consented to on the Company’s behalf by a properly authorized corporate officer of the Company. No waiver by the Company of its rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
|
g)
|
The headings contained in this Release are for reference purposes only and shall not affect in any way the meaning or interpretation of this Release. The recital(s) set forth herein are expressly made a part of this Release.
|
h)
|
This Release may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Release may be by actual or scanned signature.
|
i)
|
This Release was jointly prepared by the Company and Retiree, and any uncertainty or ambiguity existing in it shall not be interpreted against any party as the primary drafter of this Release. The language of all parts of this Release shall in all cases be construed as a whole, according to its meaning and not strictly for or against any of the parties.
|
j)
|
The Company and Retiree shall promptly execute, acknowledge and deliver any additional document or agreement that the other party reasonably believes is necessary to carry out the purpose or effect of this Release.
|
k)
|
Retiree may not assign any of his rights or delegate any of his duties under this Release. The rights and obligations of the Company shall inure to the benefit of the Company’s successors and assigns by merger, acquisition or other transaction.
|
l)
|
The Release is intended to comply, to the extent applicable, with the provisions of Section 409A and shall, to the extent practicable, be construed in accordance with Section 409A. For purposes of the Release, each amount to be paid or benefit to be provided will be construed as a separate identified payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A will not be
|
|
|
|
Subsidiary or Affiliate
|
|
Jurisdiction in which Incorporated or Organized
|
CB&I Holdings B.V.
|
|
The Netherlands
|
Lealand Finance Company B.V.
|
|
The Netherlands
|
Comet I B.V.
|
|
The Netherlands
|
Comet II B.V.
|
|
The Netherlands
|
Chicago Bridge & Iron Company B.V.
|
|
The Netherlands
|
Arabian CBI Ltd.
|
|
Saudi Arabia
|
Arabian CBI Tank Manufacturing Company Ltd.
|
|
Saudi Arabia
|
CBI Constructors Pty. Ltd.
|
|
Australia
|
CBI Constructors S.A. (Proprietary) Limited
|
|
South Africa
|
CB&I Finance Company Limited
|
|
Ireland
|
CB&I Holdings (U.K.) Limited
|
|
United Kingdom
|
CBI Constructors Limited
|
|
United Kingdom
|
CB&I UK Limited
|
|
United Kingdom
|
CBI (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
CBI Montajes de Chile Limitada
|
|
Chile
|
CB&I Oil & Gas Europe B.V.
|
|
The Netherlands
|
CB&I Nederland B.V.
|
|
The Netherlands
|
CB&I Lummus GmbH
|
|
Germany
|
CB&I Novolen Technology GmbH
|
|
Germany
|
Lummus Technology Heat Transfer B.V.
|
|
The Netherlands
|
CB&I s.r.o.
|
|
Czech Republic
|
CB&I Global Operations International, Pte. Ltd.
|
|
Singapore
|
CB&I Global Operations US Pte., Ltd.
|
|
Singapore
|
CB&I Mauritius
|
|
Mozambique
|
CB&I Mozambique Limitada
|
|
Mozambique
|
CCS LNG Mozambique, Lda
|
|
Mozambique
|
CBI Peruana S.A.C.
|
|
Peru
|
CBI (Philippines) Inc.
|
|
Philippines
|
CB&I Power Company B.V.
|
|
The Netherlands
|
Horton CBI, Limited
|
|
Canada
|
P.T. Chicago Bridge & Iron
(1)
|
|
Indonesia
|
Chicago Bridge & Iron (Antilles) N.V.
|
|
Netherland Antilles
|
CBI Eastern Anstalt
|
|
Liechtenstein
|
Oasis Supply Company Anstalt
|
|
Liechtenstein
|
CB&I Hungary Holding LLC (CBI Hungary Kft)
|
|
Hungary
|
CBI Overseas, LLC
|
|
Delaware
|
|
|
|
Chicago Bridge & Iron Company
|
|
Delaware
|
Lone Star Risk Corporation
|
|
Texas
|
CB&I Group Inc.
|
|
Louisiana
|
CB&I International One, LLC
|
|
Louisiana
|
CB&I Holdco, LLC
|
|
Louisiana
|
CB&I Holdco International, LLC
|
|
Louisiana
|
CB&I LLC
|
|
Texas
|
CBI Services LLC
|
|
Delaware
|
Lummus Technology LLC
|
|
Delaware
|
Lummus Technology Ventures LLC
|
|
Delaware
|
CBI Americas Ltd.
|
|
Delaware
|
CB&I Tyler LLC
|
|
Delaware
|
CB&I Paddington Limited
|
|
United Kingdom
|
CB&I London
|
|
United Kingdom
|
CB&I Woodlands LLC
|
|
Delaware
|
Chicago Bridge & Iron Company
|
|
Illinois
|
Asia Pacific Supply Co.
|
|
Delaware
|
CBI Caribe, Ltd.
|
|
Delaware
|
CBI Company Ltd.
|
|
Delaware
|
Constructora C.B.I. Limitada
|
|
Chile
|
Central Trading Company Ltd.
|
|
Delaware
|
Chicago Bridge & Iron Company (Delaware)
|
|
Delaware
|
CSA Trading Company, Ltd.
|
|
Delaware
|
(1)
|
Unconsolidated affiliate
|
(1)
|
Registration Statement (Form S-8 No. 333-64442) pertaining to the 2001 Employee Stock Purchase Plan of Chicago Bridge & Iron Company N.V.,
|
(2)
|
Registration Statement (Form S-8 No. 333-156004) pertaining to the 2008 Long-Term Incentive Plan of Chicago Bridge & Iron Company N.V.,
|
(3)
|
Registration Statement (Form S-8 No. 333-159182) pertaining to the 2009 Amendment to the 2008 Long-Term Incentive Plan of Chicago Bridge & Iron Company N.V.,
|
(4)
|
Registration Statement (Form S-8 No. 333-159183) pertaining to the 2009 Amendment to the 2001 Employee Stock Purchase Plan of Chicago Bridge & Iron Company N.V.,
|
(5)
|
Registration Statement (Form S-3 No. 333-182223) pertaining to the Common Stock, Senior Debt Securities, Subordinated Debt Securities and Warrants of Chicago Bridge & Iron Company N.V., and
|
(6)
|
Registration Statement (Form S-8 No. 333-186996) pertaining to The Shaw Group Inc. 1996 Non-Employee Director Stock Option Plan, The Shaw Group Inc. 2001 Employee Incentive Compensation Plan, The Shaw Group Inc. 2005 Non-Employee Director Stock Incentive Plan, The Shaw Group Inc. 2008 Omnibus Incentive Plan.
|
1.
|
I have reviewed this annual report on Form 10-K 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/ Patrick K. Mullen
|
Patrick K. Mullen
|
Principal Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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/ Patrick K. Mullen
|
Patrick K. Mullen
|
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
|