A World of Solutions CB&I Investor Presentation March 2017 A Leading Provider of Technology and Infrastructure for the Energy Industry
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, 2016, 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 2
Overview Leading provider of technology and infrastructure for the energy industry, with a focus on key end markets LNG Petrochemical Refining Natural Gas Fired Power Plants Market Cap of ~$3.4 Billion (February 2017) $18.5 Billion Backlog (December 31, 2016) Business model generates strong operating cash flows: $802 million for 2016 More than 40,000 employees worldwide More than 125 years of experience and expertise in reliable solutions Relentless focus on safety: 0.01 LTIR for 2016 Note: Full Year 2016 Operating Cash Flows includes contributions from equity-method ventures A World of Solutions 3
More than 125 Years of Excellence CB&I Values Safety Ethics Teamwork Innovation Customers Quality Reliability Delivery Scale Shareholders Earnings growth Sustainability Share value Shareholders Customers CB&I Values A World of Solutions 4
Breadth of Services Technology Licensed technology Proprietary catalysts Technical services Fabrication Services Fabrication & erection Process & modularization Pipe fitting and distribution Engineered products Specialty equipment Engineering & Construction Engineering Procurement Construction Commissioning Capital Services Program management Maintenance services Remediation and restoration Emergency response Environmental consulting Note: Adjusted Operating Income excludes impact of a goodwill impairment charge and a transaction receivable reserve recorded in the fourth quarter of 2016 A World of Solutions 5
Competitive Advantage: Experience and Global Reach 100+ years 125+ years 70+ years 70+ years 50+ years 75+ years 75+ years A World of Solutions 6
Backlog Profile Note: Fixed-Price contract type includes: Fixed-Price, Hybrid and Unit Based contracts A World of Solutions 7
Vertically Integrated Competitive Advantage: Complete Supply Chain Solution Technology FEED Traditional EPC solutions Specialized project lifecycle offerings Permitting Engineering Procurement Fabrication Construction Close-out Add value throughout the project lifecycle Operational consistency through standardization Project Lifecycle A World of Solutions 8
Competitive Advantage: Diversified Across Energy Infrastructure A World of Solutions 9
Technology Group Overview Capabilities Differentiation Strategic Benefit Petrochemical, gas processing and refining technologies Proprietary catalysts Consulting and technical services Most complete portfolio of olefins technologies World leader in heavy oil upgrading technologies Breadth of technologies provides complete solutions Operating income driver Recurring earnings streams Early visibility to customers A World of Solutions 10
Engineering & Construction Group Overview Capabilities Engineering, procurement and construction (EPC) Energy-focused, end-market diversity including: Petrochemicals LNG Refining Combined-cycle power Differentiation Execution excellence Global footprint Self-perform capabilities Direct-hire labor Contracting flexibility Strategic Benefit Critical mass Backlog and revenue driver Integrated offerings A World of Solutions 11
Fabrication Services Group Overview 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 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 A World of Solutions 12
Capital Services Business: Divestiture Enables CB&I to focus on core capabilities in E&C, Fabrication and Technology $755 million, earmarked for debt reduction Will enable a significant reduction in total debt of $2.2 billion (at December 31, 2016) Expected to close in the second quarter of 2017 Context: Capital Services contribution to CB&I s 2016 consolidated results $2.2 billion of revenue $2.2 billion of new awards $5.4 billion of backlog $63 million of operating income (excluding impairment charge) A World of Solutions 13
Objective: Deliver Improved P/E Multiple & Long Term Value Drive revenue and earnings growth through: Operational Performance Drive valuation through: Financial Performance Drive shareholder returns through: Capital Allocation Disciplined approach to margins and risk Successful backlog execution Integrated Self Perform Model Generate operating cash Flows net income Strategic tax planning Target S&A expense at 3% of revenue Organic and strategic growth opportunities Reduce Total Debt Share repurchases Dividends A World of Solutions 14
2017 Guidance Drivers Revenue Guidance: $9.5 - $10.5 billion Approximately 80% of 2017 revenue guidance in backlog at the end of 2016 EPS Guidance: $4.00 - $4.60 Operating Cash Flow Guidance: At or above net income CB&I will update 2017 guidance after closing the sale of Capital Services A World of Solutions 15
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