Chicago Bridge & Iron Company N.V. (CBI)

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Chicago Bridge & Iron Company (CBI)

2013 Guidance Conference

December 19, 2012 2:00 pm ET

Executives

Philip K. Asherman - Chief Executive Officer, President and Supervisory Director

Ronald A. Ballschmiede - Chief Financial Officer and Executive Vice President

Analysts

Andy Kaplowitz - Barclays Capital, Research Division

Martin W. Malloy - Johnson Rice & Company, L.L.C., Research Division

Steven Fisher - UBS Investment Bank, Research Division

John Rogers - D.A. Davidson & Co., Research Division

Richard Roy - Citigroup Inc, Research Division

Scott Justin Levine - JP Morgan Chase & Co, Research Division

Jamie L. Cook - Crédit Suisse AG, Research Division

Will Gabrielski - Lazard Capital Markets LLC, Research Division

Tahira Afzal - KeyBanc Capital Markets Inc., Research Division

Chase Jacobson - William Blair & Company L.L.C., Research Division

Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division

Brian Konigsberg - Vertical Research Partners, LLC

Presentation

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the CB&I call on guidance. [Operator Instructions]

Before beginning today's call, the company would like to caution you regarding forward-looking statements. Any statements made or discussed today that do not constitute or are not historical facts, particularly comments regarding the company's future plans and expected performance, are forward-looking statements that are based on assumptions the company believes are reasonable but are subject to a range of uncertainties and risks that are summarized in the company's press release and the SEC filing. While forward-looking statements represent management's best current judgment as to what may occur in the future, the actual outcome or results may differ materially from what is expressed or implied in any such statement.

Now I would like to turn the conference over to Mr. Philip Asherman, President and CEO of CB&I.

Philip K. Asherman

Good afternoon. Ron Ballschmiede is here with me, and we want to spend some time with you this afternoon to discuss our CB&I stand-alone guidance for 2013 and respond to any questions you may have about the announcement on our shareholder vote and the status of the Shaw transaction.

First, the guidance. You will remember that during the last earnings call, we committed to providing 2013 guidance for CB&I stand-alone before the end of this year while anticipating we'll have an adjustment to include the combined companies at our Investor Day next March. It's our feeling that today's guidance should provide a good basis for those further adjustments affected not only by the Shaw transaction, but the possibility of major awards expected in the first quarter of the year. So as the announcement stated this morning, we see new awards in the range of $7 billion to $10 billion for 2013, which does include a factored amount for a significant LNG award during the year. We also anticipate revenue to be in the range of $6.3 billion to $6.7 billion and earnings per share at $3.35 to $3.65 on a diluted basis.

This guidance expresses our confidence that we will see continued development of capital projects in all of our key end markets and assumes that at least one of the major LNG export facilities will be awarded to us next year. We're also expecting to see petrochemical projects and gas processing to be a growing part of our backlog around the world, combined with significant contribution by technology and our Steel Plate Structure business sectors.

We'll provide further detail on these plans during our Q4 and year-end call towards the back of February. It's also worth mentioning that our current guidance for this year is solid. And even though in our last call we predicted that new awards would fall on the lower end of the range, it now appears that we'll be announcing some significant new contracts by year end, which will in fact be signed and exceed the top end of the $6.5 billion new award forecast, which will also include our underpinning work and some scope growth on major projects.

Now some other good news. I'm pleased to report that yesterday, during a special meeting of shareholders in Amsterdam, I certified on behalf of the company and our supervisory Board of Directors that our shareholders overwhelmingly approved our acquisition of the Shaw Group by over 90%, with over 75% of outstanding shares voted. And although Shaw will be reporting their own tally soon, the reports we have are that the trend is very good for their shareholders' approval as well. We're very excited and anxious to get going with the combined companies, and we're delighted with the positive response we're hearing, not just as expressed by the shareholders but by customers and employees across the board.

Before we open the call for your questions, Ron has a few comments about the 2013 guidance. Ron?

Ronald A. Ballschmiede

Thanks, Phil. Let me discuss some details, which will provide some additional insight into our 2013 revenue and earnings guidance. First, just a reminder that our guidance is for CB&I on a stand-alone basis, which excludes the operating results, transition -- transaction cost and financing cost of the Shaw transaction.

As Phil discussed, our 2013 revenue guidance is $6.3 billion to $6.7 billion, representing a 2012 to 2013 guidance midpoint revenue growth of 18%. This revenue growth compares to 2012 midpoint revenue guidance growth of 21% over 2011. The key contributors to the anticipated 2013 revenue growth includes our higher beginning of the period backlog and the additional ramp-up of the construction phases of our major projects, specifically the gas plant work in Papua New Guinea and the Gorgon MEI project and the continuation of our REFICAR refinery work. Each of our 3 sectors are expected to have double-digit percentage revenue growth, with Steel Plate Structures and Lummus Technology being a bit higher than project engineering and construction.

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