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

CBI 
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Industry: Basic Industries
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Chicago Bridge & Iron Company N.V. (CBI)

Investor Day Conference Call

November 9, 2011 8:00 AM ET

Executives

Philip Asherman – President and CEO

Presentation

Operator

Before beginning today’s meeting, 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 filings.

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 statements.

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

Philip Asherman

Thank you Christy. Well, good morning. Welcome to CB&I’s Investor Day. Glad to see all, so many familiar faces join us this morning. It’s a beautiful day in New York, we’re glad you could come.

I hope that all of you that were able to attend our reception last night, enjoyed meeting the team we had here and former ambassador John Bolden, who I think provided valuable insight on how geopolitical forces are certainly influencing the volatility that we’re seeing in the marketplace around the world.

These good looking group or the folks that you’re going to meet today, that’s the same team that you met last year. I think the stability in the organization is a key success factor for us and what strengthens the consistency and control the management in each of our businesses. Now this team represents an average of over 25 years of industry experience, virtually every one of them has a Masters’ degree from schools like Texas A&M; University of Texas, Texas Tech & Rise (ph), and I know it’s impressive. And for those of us who couldn’t get into a Texas school, we also include graduate degrees Corneal, Duke and of course the Norwegian University of Technology, so it’s a quite diverse group.

Most have undergraduate engineering business or finance degrees or in many cases both. At a barely 61 years old, I represent the oldest one on the chart. Most of my direct reports are 5 to 10 years, younger than I am and the overall age in this group, averages around 5 to 10 years younger, the reason that I think that’s important to us and to our business is that we certainly have a long runway for this team. So, I think you’ll enjoy meeting.

We have one Norwegian, we got several Texans, we got a few Yankees, plus we have, some of us have some Mercier origins. But I’ll state my absolutely biased opinion is, this is collectively the most talented management team in the industry. And it’s our mission today to reaffirm to you that that is indeed a fact.

So, our agenda today, we’ll include four breakout sessions which you’ll hear a detailed discussion from all three of our business sectors, plus finance and treasury information. And it’s going to be all from the executives who manage the business every day.

So, I’m going to provide some additional details about the session before I conclude my remarks. So, but for some of you, certainly on the webcast or in the room who may not be as familiar with the company, again our business model is comprised of three operating units what we refer to as business sectors.

Each is quite different in terms of commercial characteristics and scope of services. But they do share a common energy market that encompasses the entire globe. And I think we’ve demonstrated that when you aggravate the earnings from these businesses, the results are pretty good with double digit earnings growth year-over-year, I don’t know why I needed to stumble on double digit, but it’s certainly a fact.

Although we’re in a peer group that’s essentially comprised of engineering companies, we’d like to point out that CB&I limits, Lummus for example, which is the engineering and construction sector of company is probably the most relevant comparison to that group. Our steel plate structure business looks more like a supplier of engineering products. And certainly Lummus Technology is focused on refining and petrochemical licensing and catalyst sales with additional income derived from gas processing technology and heat transfer equipment.

And you’re going to hear this model (ph) that we repeat to you over and over that in order to measure the performance of our company, concentrate on these sectors. If you really want to understand the wide range of operating and commercial attributes and comparing what we figure is a pretty unique business model with the peers on our space. And that truly is the focus of today’s sessions.

This is one of my favorite slides that many of you have seen over and over, and I call it my dream harbor, I think it actually exists on the Gulf Coast but I’m not sure. But what it illustrates is virtually every energy project that CB&I is involved with around the world for example, gas processing and gas processing plants similar to our projects for both Occidental at Elk Hills and Old Dominion in West Virginia, our Dominion gas in West Virginia, one plan is leveraging the further integration of its facility by monetizing it’s gas assets. And the other is part of the Marcellus gas field development. Both are in the neighborhood of $0.5 billion investment per project. And we certainly expect them to increase that investment.

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