october 2016 investor update
TRANSCRIPT
A World of Solutions
CB&I Investor PresentationOctober 2016
A Leading Provider of Technology and Infrastructure for the Energy Industry
A World of Solutions 2
Safe Harbor Statement
This presentation contains forward-looking statements regarding CB&I and represents our expectations and beliefs concerning
future events. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements
provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks
and uncertainties. When considering any statements that are predictive in nature, depend upon or refer to future events or
conditions, or use or contain words, terms, phrases or expressions such as “achieve,” “forecast,” “plan,” “propose,” “strategy,”
“envision,” “hope,” “will,” “continue,” “potential,” “expect,” “believe,” “anticipate,” “project,” “estimate,” “predict,” “intend,” “should,”
“could,” “may,” “might” or similar forward-looking statements, we refer you to the cautionary statements concerning risk factors
and “Forward-Looking Statements” described under “Risk Factors” in Item 1A of our Annual Report filed on Form 10-K filed with
the SEC for the year ended December 31, 2015, and any updates to those risk factors or “Forward-Looking Statements”
included in our subsequent Quarterly Reports on Form 10-Q filed with the SEC, which cautionary statements are incorporated
herein by reference.
A World of Solutions 3
Overview
Leading provider of technology and infrastructure for the energy industry
Market Cap of ~$2.9 Billion (October 2016)
$20 Billion Backlog (September 30, 2016)
More than 40,000 employees worldwide
125 years of experience and expertise in reliable solutions
Relentless focus on safety: 0.02 LTIR for the first nine months of 2016
A World of Solutions 4
125 Years of Excellence
CB&I Values Safety Ethics Teamwork Innovation
Customers Quality Reliability Delivery Scale
Shareholders Earnings growth Sustainability Share value
CB&I Values
Customers
Shareholders
A World of Solutions 5
Breadth of Services
Fabrication Services
Fabrication & erection
Process & modularization
Pipe fitting and distribution
Engineered products
Specialty equipment
Engineering
Procurement
Construction
Commissioning
Engineering & ConstructionTechnology
Licensed technology
Proprietary catalysts
Technical services
Capital Services
Program management
Maintenance services
Remediation and restoration
Emergency response
Environmental consulting
A World of Solutions 6
Experience and Global ReachCompetitive Advantage: Experience and Global Reach
A World of Solutions 7
Backlog Profile
U.S.80%
Other20%
By Geography
Fixed-Price70%
Cost-Reimbursable30%
By Contract Type
Engineering & Construction
$11,070 56%
Capital Services$5,451
27%
Fabrication Services$2,309
12%
Technology$941 5%
By Operating Group
Source: 2016-Q3 CB&I Financial ResultsNote: Fixed-Price contract type includes: Fixed-Price, Hybrid and Unit Based contracts
A World of Solutions 8
Competitive Advantage: 70% Fixed-Price Backlog
Lower Risk
CB&I Fixed-Price Approach
Direct control of critical-path elements of
project:
Direct-hire labor, with continuity from one
project to the next
Vertically integrated supply chain
Disciplined risk management process in
screening prospective work
Elevated Risk
Traditional Fixed-Price Approach
Indirect control of critical-path elements of
project:
Х Subcontracted labor, with little continuity
from one project to the next
Х Reliance upon a variety of other
subcontractors, which can create issues with
quality and schedule conformance / flexibility
Х Variable approaches to risk management
and screening
Note: Fixed-Price contract type includes: Fixed-Price, Hybrid and Unit Based contracts
A World of Solutions 11
Technology Group Overview
Differentiation
Most complete portfolio of olefins technologies
World leader in heavy oil upgrading technologies
Breadth of technologies provides complete solutions
Strategic Benefit
Operating income driver
Recurring earnings streams
Early visibility to customers
Capabilities
Petrochemical, gas processing and refining technologies
Proprietary catalysts
Consulting and technical services
A World of Solutions 12
Differentiation
Execution excellence
Global footprint
Self-perform capabilities
Direct-hire labor
Contracting flexibility
Strategic Benefit
Critical mass
Backlog and revenue driver
Integrated offerings
Engineering & Construction Group Overview
Capabilities
Engineering, procurement and construction (EPC)
Energy-focused, end-market diversity including:
Petrochemicals
LNG
Refining
Combined-cycle power
A World of Solutions 13
LNG Supply and Demand
0
50
100
150
200
250
300
350
400
450
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
LNG
Vo
lum
e (m
mtp
a)Long Term Demand Growth Expected to Continue
Operating Plants Sanctioned Demand
Sources: BP, ShellAssumptions: 4.5 mmtpa average train size
~8-10 additional trains
A World of Solutions 14
Fabrication Services Group Overview
Differentiation
Global brand leadership; mega-project capability in plate structures, pipe fabrication, modules
Large-scale fabrication facilities and yards
Induction bending technology drives quality and savings
Strategic Benefit
Stable business underpinning
Diversification of offerings
Client access
Capabilities
Engineering, procurement, fabrication and erection of liquid and gas structures
Pipe fabrication; process modules; pipe & fitting distribution
Self-perform fabrication and erection capabilities worldwide
Proprietary equipment and engineered products
A World of Solutions 15
Differentiation
Most comprehensive provider of products and services
Global footprint through CB&I’s network
Standardized processes, systems and tools
Experience and expertise to reduce customer OpEx
Capital Services Group Overview
Strategic Benefit
Diversification
Integrated offerings
Long-term customer relationships
Stable revenues and earnings
Capabilities
Operations & Maintenance
Environmental Services
Program Management
A World of Solutions 16
Objective: Deliver Improved P/E Multiple & Long Term Value
Drive revenue and earnings growth through:
Operational Performance
• Disciplined approach to margins and risk
• Successful backlog execution
• Target S&A expense at 3% of revenue
Drive shareholder returns through:
Capital Allocation
• Organic and strategic growth opportunities
• Share repurchases
• Dividends
Drive valuation through:
Financial Performance
• Generate operating cash Flows ≥ net income
• Reduce total debt
• Strategic tax planning
A World of Solutions 17
Selected Strategy Metrics
Target
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2016 Q1 2016 Q2 YTD 2016 Q3 YTD 2016 Guidance Midpoint
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%Target S&A Expense at 3.0% of Revenue
Revenue S&A Expense % of Revenue
90.0
92.0
94.0
96.0
98.0
100.0
102.0
104.0
106.0
108.0
110.0
YE 2012 YE 2013 YE 2014 YE 2015 Q3 2016 TargetLevel
Shares Outstanding
22.0%
22.5%
23.0%
23.5%
24.0%
24.5%
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
2016 Q1 2016 Q2 YTD 2016 Q3 YTD
Tax Rate
A World of Solutions 18
2016 Guidance Drivers
Revenue Guidance
$10.6-$11.0 Billion
Over 75% of 2016 revenue guidance in backlog at the end of 2015
EPS Guidance
$4.70-$5.00
Ramp-up in Gulf Coast projects
Improvement in equity earnings, tax benefits and lower non-controlling interest
Includes expected one-time Q4 tax benefit of $0.35 per share
Operating Cash Flow Guidance
At or above net income