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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2000
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 1-12815
CHICAGO BRIDGE & IRON COMPANY N.V.
Incorporated in The Netherlands IRS Identification Number: not applicable
Polarisavenue 31
2132 JH Hoofddorp
The Netherlands
31-23-5685660
(Address and telephone number of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
Common Stock; NLG .01 par value New York Stock Exchange
Euronext Amsterdam Exchange
Securities registered pursuant to Section 12(g) of the Act: none
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [ ]
Aggregate market value of common stock held by non-affiliates, based on a New
York Stock Exchange closing price of $21.85 as of February 28, 2001, was
$196,805,113.
The number of shares outstanding of a single class of common stock as of
February 28, 2001 was 23,379,695.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Portions of the 2000 Annual Report to Shareholders Part I and Part II
Portions of the 2001 Proxy Statement Part III
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
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PART I.
Item 1. Business 3
Item 2. Properties 14
Item 3. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of Security Holders 17
PART II.
Item 5. Market for Registrant's Common Equity and Related 18
Stockholder Matters
Item 6. Selected Financial Data 18
Item 7. Management's Discussion and Analysis of Results of 18
Operations and Financial Condition
Item 7A. Quantitative and Qualitative Disclosures 18
About Market Risk
Item 8. Financial Statements and Supplementary Data 18
Item 9. Changes in and Disagreements with Accountants on 18
Accounting and Financial Disclosure
PART III.
Item 10. Directors and Executive Officers of the Registrant 19
Item 11. Executive Compensation 21
Item 12. Security Ownership of Certain Beneficial Owners and 21
Management
Item 13. Certain Relationships and Related Transactions 21
PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports 22
on Form 8-K
SIGNATURES 24
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PART I
ITEM 1. BUSINESS
HISTORICAL ORGANIZATION
Chicago Bridge & Iron Company N.V. and its Subsidiaries (the "Company") is a
global engineering and construction company specializing in the design and
engineering, fabrication, field erection and repair of bulk liquid terminals,
storage tanks, process vessels, low temperature and cryogenic storage facilities
and other steel plate structures and their associated systems. Based on its
knowledge of and experience in its industry, the Company believes it is the
leading provider of field erected steel tanks and other steel plate structures,
associated systems and related services in North America and one of the leading
providers of these specialized products and services in the world. The Company
has been continuously engaged in the engineering and construction industry since
its founding in 1889.
Prior to January 12, 1996, the business of the Company was operated by Chicago
Bridge & Iron Company, a wholly owned subsidiary of Chi Bridge Holdings, Inc.
("Holdings"), which in turn was a wholly owned subsidiary of CBI Industries,
Inc. ("Industries"). On January 12, 1996, pursuant to the merger agreement dated
December 22, 1995, Industries became a subsidiary of Praxair, Inc. In March
1997, Holdings effected a reorganization (the "Reorganization") whereby Holdings
transferred the business of Chicago Bridge & Iron Company to Chicago Bridge &
Iron Company N.V., a corporation organized under the laws of The Netherlands.
Effective March 26, 1997, an initial public offering (the "Offering") of a
majority of the shares of the Company's Common Stock, par value NLG .01 (the
"Common Stock"), was made.
RECENT ACQUISITIONS
On January 28, 2000, the Company purchased the assets and assumed certain
liabilities of the business now known as CB&I Trusco Tank ("Trusco"). Trusco
designs, fabricates and erects steel structures, including storage and
shop-built tanks, and serves municipal and industrial customers primarily in the
water, wastewater and petroleum markets on the U.S. West Coast.
On May 17, 2000, the Company purchased the assets and assumed certain
liabilities of Pacific Pure Water Asia Pte Ltd. ("Pacific Pure"). Pacific Pure
provides ultra pure systems and high purity piping for customers in the
microelectronics, pharmaceutical and biotechnology industries.
On December 28, 2000, the Company acquired Howe-Baker International, L.L.C.
("HBI") from WEDGE Group Incorporated ("WEDGE"), a private investment firm, that
owned 100% of HBI. HBI, which was organized and began operations in 1947, is a
global technology company specializing in the engineering and construction of
hydrocarbon processing plants for customers in the refining, petrochemical and
natural gas industries. HBI's subsidiary, Matrix Engineering, Ltd., provides a
broad range of services to the petroleum refining and petrochemical industries,
including engineering services, general industrial construction, construction
management, fabrication and construction services. Callidus Technologies, Inc.,
another HBI subsidiary, designs and produces combustion equipment, such as
burners, gas and liquid incinerators, flares and rotary kilns for the
petrochemical, refining, pharmaceutical and wood products industries.
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On February 7, 2001, the Company purchased substantially all of the assets of
the Engineered Construction Division and the Water Division of Pitt-Des Moines,
Inc. (the "PDM Divisions"). The Engineered Construction Division, headquartered
in Houston, engineers, fabricates and constructs storage tanks and systems,
process systems, and unique plate structures for the petroleum, petrochemical,
cryogenic, liquefied natural gas, defense and aerospace industries. The Water
Division, headquartered in Pittsburgh, designs, fabricates and constructs water
storage tank projects including conventional styles such as ground storage
reservoirs and standpipes, steel elevated tanks and composite elevated tanks as
well as unique projects involving one-of-a-kind tanks designed for specific
applications. This acquisition brings many products that are complementary to
those of the Company, enabling the Company to extend and broaden its product
offerings and leverage its infrastructure across the combined entity.
PRODUCT LINE INFORMATION
REVENUES BY PRODUCT LINE
(In millions)
2000 1999 1998
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Flat Bottom Tanks $234 $296 $287
Low Temperature/Cryogenic
Tanks and Systems 90 82 108
Repairs and Modifications 79 67 64
Specialty and Other Structures 77 66 130
Elevated Tanks 62 52 38
Pressure Vessels 46 63 64
Turnarounds 46 49 85
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Total $634 $675 $776
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Flat Bottom Tanks
These aboveground storage tanks are sold primarily to customers operating in the
petroleum, petrochemical and chemical industries around the world. This
industrial customer group includes nearly all of the major oil and chemical
companies on every continent. Depending on the industry and application, flat
bottom tanks can be used for storage of crude oil, refined products such as
gasoline, raw water, potable water, chemicals, petrochemicals and a large
variety of feedstocks for the manufacturing industry.
Low Temperature/Cryogenic Tanks and Systems
These facilities are used primarily for the storage and handling of liquefied
gases. The Company specializes in providing refrigerated turnkey terminals and
tanks. Refrigerated tanks are built from special steels and alloys that have
properties to withstand cold temperatures at the storage pressure. The systems
usually include special refrigeration systems to maintain the gases in liquefied
form at the storage pressure. Applications extend from low temperature
(+30(Degree)F to -100(Degree)F) to cryogenic (-100(Degree)F to -423(Degree)F).
Customers in the petroleum, chemical, petrochemical, specialty gas, natural gas,
power generation and agricultural industries use these tanks and systems to
store and handle liquefied gases such as LNG, methane, ethane, ethylene, LPG,
propane, propylene, butane, butadiene, anhydrous ammonia, oxygen, nitrogen,
argon and hydrogen.
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Repairs and Modifications
Repair, maintenance and modification services are performed primarily on flat
bottom tanks and pressure vessels. While the Company has focused on providing
these services primarily in the United States, efforts are under way to expand
these services throughout the world. Customers in the petroleum, chemical,
petrochemical and water industries generally require these types of services.
Specialty and Other Structures
These specialty and other structures are marketed to a diverse group of
customers in such industries as metals and mining, power generation,
telecommunications, aerospace, wastewater treatment, microelectronics,
pharmaceutical, food and beverage, as well as government customers. Examples of
these specialty structures include turnkey vacuum facilities for testing
prototype spacecraft, rocket engines and satellites before launch; hydroelectric
structures such as penstocks and spiral cases; processing facilities or
components used in the iron, aluminum and mining industries; and high purity
process piping systems used in the microelectronics, pharmaceutical and food and
beverage industries. These structures are typically made from bent and formed
metal materials (carbon steel, stainless steel, special alloy steel and
aluminum) and are fabricated and shipped as components to their final location
for field assembly and welding.
Elevated Tanks
The water storage line includes single pedestal, fluted column and concrete
pedestal tanks, as well as standpipes and reservoirs. These products have a
capacity range of 25,000 gallons to 3,000,000 gallons. These structures provide
potable water reserves and supply pressure to the water distribution system.
Pressure Vessels
Pressure vessels are built primarily from high strength carbon steel plates
which have been formed in a fabrication shop and are welded together at a job
site. Pressure vessels are constructed in a variety of shapes and sizes, some
weighing in excess of 700 tons, with thicknesses in excess of six inches. This
product line requires technological expertise in design, analysis, welding
capabilities, metallurgy, complex fabrication and specialty field erection
methods. Existing customers represent a cross section of the petroleum,
petrochemical, chemical, wastewater and pulp and paper industries, where process
applications of high pressure and/or temperature are required. Typical pressure
vessel usage includes process and storage vessels in the petroleum,
petrochemical, chemical, and wastewater industry and as digesters in the pulp
and paper industry. The Company has designed and erected pressure vessels
throughout the world.
Turnarounds
A turnaround is a planned shutdown of a refinery or other process unit for
repair and maintenance of equipment and associated systems. The work is usually
scheduled on a multi-shift, seven day-per-week basis to minimize downtime of the
facility. Personnel, materials and equipment must come together at precisely the
right time to accomplish this labor intensive operation. This product line often
requires short cycle times and unique construction procedures. The Company
currently offers this service to its customers in the petroleum, petrochemical
and chemical industries throughout the world.
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Process Plants
The Company, through its acquisition of HBI, will include revenues beginning
January 1, 2001 from the HBI operations and can now provide engineering,
procurement and construction services for customers in the hydrocarbon industry,
specializing in natural gas processing plants, refinery and petrochemical
process units, and hydrogen and synthesis gas plants. Natural gas processing
plants treat natural gas to meet pipeline requirements and to recover valuable
liquids and other enhanced products, through technologies including cryogenic
separation, amine treating, dehydration and liquids fractionation. Refinery and
petrochemical process units enable customers to extract products from the top
and middle streams of the crude oil barrel using technologies including
electrical desalting, catalytic reforming, vacuum and atmospheric distillation,
fuels and distillate hydrotreating, hydrodesulfurization, alkylation and
isomerization. Synthesis gas plants generate industrial gases for use in a
variety of industries through technologies including steam methane and
auto-thermal reforming, partial oxidation reactors and pressure swing adsorption
purification.
COMPANY STRATEGY
The Company is committed to increasing shareholder value by seeking to build
upon its established success and by growing its business in the global
marketplace. It intends to accomplish this through the implementation of a
strategy that is founded upon a vision articulated through a mission and
accomplished through strategic goals.
Vision
To be the leader in providing innovative and value-added engineering and
construction solutions to customers worldwide while creating superior
shareholder value.
Mission
The Company will be the preferred supplier of selected process and storage
facilities worldwide by:
- - Providing innovative and safe solutions through engineering, fabrication
and construction
- - Recognizing and delivering the products and solutions that the Company's
customers value
- - Delivering results that repeatedly bring customers back to the Company
- - Creating an ethical, safe and enabling environment for the Company's
employees to prosper
- - Leveraging the reputation and equity of the Company's brands
for the purpose of obtaining sustainable, profitable revenue growth.
Strategic Goals
1. Continue to improve the Company's safe work practices with a goal of zero
injuries to employees and subcontractors.
Working safely is of paramount importance; the Company cannot compromise safety
for expediency; its constant goal must be zero injuries.
2. Compete successfully in the global marketplace for selected process and
storage facilities worldwide.
The Company has developed special expertise in the design and engineering,
fabrication, field erection and repair of steel plate structures and their
associated systems. The Company believes its existing technical capabilities and
geographic coverage in the worldwide storage market have
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been enhanced by the acquisition of the PDM Divisions. In addition, through the
acquisition of Howe-Baker International, the Company expects to leverage HBI's
process technology over its international sales and execution infrastructure,
leading to revenue growth.
3. Exploit the Company's marketing and selling expertise to build productive
relationships throughout the world.
The Company will seek to cultivate existing and pursue additional customer
relationships that lead to repeat business by delivering innovative, safe and
value-added solutions.
4. Expand the Company's business by profitably capitalizing on its global
infastructure, workforce and capabilities.
The Company is one of the few engineering and construction companies that can
self-perform its work on a worldwide basis. By leveraging its core competencies
in engineering, logistics and project execution, the Company intends to expand
in areas where it can secure profitable new business.
5. Create and deliver superior, cost-effective solutions.
The Company will use its proprietary knowledge, know-how and execution
capabilities to deliver better solutions to its customers than those available
from its competitors.
6. Make the Company's support services and invested capital strong
contributors to its performance and profitability.
Indirect functions must efficiently provide value-added support services to its
field operations.
7. Create an atmosphere in which the Company's work force can grow and
develop.
The Company will seek to attract and retain superior employees, deploy them
wisely, invest in developing their capabilities, and enable them to share in the
Company's financial successes.
8. Lead the Company's industry by growing profitably and enhancing
shareholder value.
The Company's management is committed to delivering returns to its owners that
exceed the average for similar companies in its industry.
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RAW MATERIALS
The principal raw materials used by the Company are metal plate and structural
steel. These materials are available from numerous suppliers worldwide. The
Company does not anticipate having difficulty obtaining adequate amounts of raw
materials in the foreseeable future.
RESEARCH ACTIVITIES, PATENTS AND TRADEMARKS
The Company incurred expenses of approximately $1,385,000 in 2000, $1,294,000 in
1999 and $860,000 in 1998 for its research and development activities.
The Company holds patents and licenses for certain items incorporated into its
products. However, none is so essential that its loss would materially affect
the businesses of the Company.
The Company continues to market its innovative tank building process called
CoilBuild(TM), in which the tank shell is formed from continuous steel coils
rather than individual plates. CoilBuild is particularly suited for
smaller-diameter, stainless steel tanks used in certain petrochemical, chemical,
pharmaceutical and food applications where corrosion resistance and cleanliness
are vital. The Company has exclusive rights to the CoilBuild process in North
America.
The Company recently acquired the U.S. and non-U.S. patents applicable to
SoCool(SM) Low Temperature Thermal Stratification Fluid. SoCool fluid provides
economical and efficient stratified thermal energy storage (TES) at
temperatures substantially colder than 40 degrees F, the approximate buoyant
limit of pure water stratification. This purchase complements the Company's
existing expertise in TES, which includes the installation of more than 80
Strata-Therm(R) chilled water storage tanks at schools and universities,
manufacturing plants, hospitals, urban district cooling systems and similar
large cooling users. SoCool improves project economics by reducing the capacity
required for a new Strata-Therm tank or by increasing the amount of cooling
stored in an existing tank. The lower temperatures achievable with SoCool can
further increase the output of combustion turbine power plants and also
provides efficient TES refrigeration to certain chemical process and food
processing plants.
CUSTOMERS
The Company is not dependent upon any single customer on an ongoing basis and
the loss of any single customer would not have a material adverse effect on the
business; although, from time to time a particular contract or customer may
account for a significant portion of the Company's backlog. However, HBI, one of
the Company's recent acquisitions, derives a significant portion of its revenues
from relatively few contracts. 44% of its revenues came from four customers in
2000, 58% of its revenues came from two customers in 1999 and in 1998 56% of its
revenues came from two customers. This reliance on relatively few customers may
contribute to fluctuating revenues and cash flows.
BACKLOG
The Company had a backlog of work to be completed on contracts of $605.9 million
at December 31, 2000 (including backlog of $125.1 million of HBI) and $510.6
million at December 31, 1999. During 2000, the Company removed the $50.0 million
remaining on the Tuban (T.P.P.I.) Project from backlog. Approximately 83% of the
backlog as of December 31, 2000 is expected to be completed in 2001. New
business taken represents the value of new project commitments received by the
Company during a given period and is included in backlog until work is performed
and revenue recognized or until cancellation. Backlog may also fluctuate with
currency movements.
COMPETITION
Management believes the Company can compete effectively for new construction
projects around the world and that it is a leading competitor in its markets.
Competition is based primarily on performance and the ability to provide the
design, engineering, fabrication, project management and construction
capabilities required to complete projects in a timely and cost effective
manner.
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Contracts are usually awarded on a competitive bid basis. Price, quality,
reputation and timeliness of completion are the principal competitive factors
within the industry, with price being one of the most important factors. In
addition, the Company believes that it is viewed as a local contractor in a
number of the regions it services by virtue of its long-term presence and
participation in those markets. This perception may translate into a competitive
advantage through knowledge of local vendors and suppliers, as well as of local
labor markets and supervisory personnel. Several large companies offer metal
plate products which compete with some of those offered by the Company. Some
companies compete with some of the Company's product lines, while also offering
other product lines. Local and regional companies offer competition in one or
more geographical areas but not in other areas where the Company operates.
Because reliable market share data are not available, it is difficult to
estimate the Company's exact position in the industry, although the Company
believes it ranks among the leaders in the field.
ENVIRONMENTAL
The Company incurred expenses during the year for the purpose of complying with
environmental regulations, but their impact on the consolidated financial
statements was not material.
EMPLOYEES
The Company, including HBI, employed 5,691 people as of December 31, 2000. The
Company believes it is a leader in the global field erection of storage tanks
and other steel plate structures because of its project management and
technological expertise, which are considered to be among its core competencies.
To preserve these competencies, the Company recruits, develops and maintains
ongoing training programs for engineers and field supervision personnel.
Furthermore, the Company recognizes the importance of having the right people
with the right skills in the right places to achieve its business objectives.
SEGMENT FINANCIAL INFORMATION
Financial information by geographic area of operation can be found on pages 57
and 58 of the Company's 2000 Annual Report to Shareholders and is incorporated
herein by reference.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained herein that are not based on historical fact are
forward-looking and represent management's best judgment as to what may occur in
the future. The actual outcome and results are not guaranteed, are subject to
risks, uncertainties and assumptions, and may differ materially from what is
expressed. A variety of factors could cause business conditions and results to
differ materially from what is contained in the forward-looking statements
including, but not limited to, the uncertain timing and funding of new contract
awards; project cancellation risks and operating risks; cost overruns on fixed
price contracts; risks associated with percentage of completion accounting;
increase in competition by competitors; fluctuating revenues resulting from the
cyclical nature of the individual markets in which the Company's customers
operate; reduced activity in the hydrocarbon industry, demand from which is the
largest generator of the
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Company's revenue; lack of liquidity needed to finance expenditures prior to
receipt of payment for the performance of contracts and to provide bid and
performance bonds and letters of credit securing the Company's obligations under
its bids and contracts; risks inherent in the Company's acquisition strategy and
the ability to obtain financing for proposed acquisitions; and the Company's
ability to integrate and successfully operate acquired businesses, including HBI
and PDM, and to manage the risks associated with those businesses. In addition,
while all mandatory waiting periods for antitrust review have passed, the
Federal Trade Commission (the "FTC") continues to review certain aspects of the
Company's acquisition of PDM's assets and the Company continues to cooperate
with the FTC. Additional factors and descriptions are set forth below and in the
Company's other filings with the Securities and Exchange Commission (the "SEC").
The Company does not undertake to update any forward-looking statements
contained herein, whether as a result of new information, future events or
otherwise.
FLUCTUATING REVENUES AND CASH FLOW
The Company's businesses are dependent upon major construction projects in
cyclical industries, including the hydrocarbon, chemical, pulp and paper,
electric and gas utility, and water and wastewater industries, for revenues and
cash flow. In the hydrocarbon industry, which in recent years has accounted for
the majority of the Company's revenues, numerous factors influence capital
expenditure decisions, including current and projected oil and gas prices;
exploration, extraction, production and transportation costs; the discovery rate
of new oil and gas reserves; the sale and expiration dates of leases and
concessions; local and international political and economic conditions;
technological advances; and the ability of oil and gas companies to generate
capital. These factors are beyond the Company's control. The selection of,
timing of or failure to obtain projects, delays in awards of projects,
cancellations of projects or delays in completion of contracts could result in
the under-utilization of the Company's resources which could have a material
adverse impact on its business, financial condition, results of operations and
cash flows. In addition, construction projects for which the Company's services
are contracted may require significant expenditures by the Company prior to
receipt of relevant payments by a customer. Such expenditures could have a
material adverse impact on the Company's cash flows. In addition, quarterly
results may fluctuate depending on factors described above. Revenues may be
negatively affected by the winding down or completion of work on significant
projects that were active in previous periods if such significant projects are
not replaced.
REALIZATION OF BACKLOG
The Company's backlog consists of revenues related to projects which have been
awarded to the Company and which have either (a) not yet been started or (b) are
in progress and are not yet complete. In the latter case, the revenue value
reported in backlog is the remaining amount that has not yet been completed.
Execution commences at or very soon (days or weeks) following award on most
projects, although occasional project awards are delayed pending financing or
other contingencies. From time to time, projects are cancelled that appeared to
have a high certainty of going forward at the time of award. In these cases, the
Company removes the value of these projects from backlog as soon as these new
developments are known.
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DEPENDENCE ON THE HYDROCARBON INDUSTRY
In recent years, demand from the worldwide hydrocarbon industry has been the
largest generator of the Company's revenues. The Company's combined business,
financial condition and results of operations may be materially adversely
affected because of reduced activity in the hydrocarbon industry. In addition,
the Company may be materially adversely affected by changing taxes, price
controls and laws and regulations relating to the hydrocarbon industry.
INTEGRATION OF THE BUSINESSES OF THE COMPANY AND HBI AND PDM
The HBI and PDM Transactions involve the integration of a number of businesses
with the Company, which have previously operated independently. The Company
expects to combine certain areas of PDM's manufacturing facilities and their
engineering and field construction capabilities. It also expects to combine
their technologies with the Company's, including natural gas processing in the
case of HBI. Also, the Company expects to use its established international
infrastructure and resources to allow HBI to expand the international
distribution of its products and services. If the Company does not successfully
integrate the businesses of HBI and PDM or expand HBI's business
internationally, then some or all of the benefits expected from such activities
will not be realized. It is not possible at this time to determine the costs
associated with these efforts, but any delays or unexpected costs incurred in
connection with these efforts could have an adverse effect on the Company. The
Company may also incur charges after it completes its evaluation of duplicate
facilities and personnel.
HBI RELIANCE ON RELATIVELY FEW CUSTOMERS
A significant portion of HBI's revenues is derived from relatively few
contracts. For the year ended December 31, 2000, HBI earned 44% of its revenues
from four customers, Williams Refining, L.L.C., Suncor Energy, Foster Wheeler
USA and Phillips Petroleum Company. For the year ended December 31, 1999, HBI
earned 58% of its revenues from two customers, Williams Energy Services and
Phillips Petroleum Company and for the year ended December 31, 1998, HBI earned
56% of its revenues from two customers, Air Liquide and ABB Lummus. This
reliance on relatively few customers may contribute to fluctuating revenues and
cash flows.
HBI performs periodic credit evaluations of its customers' financial condition
and generally does not require collateral from its U.S. customers but does
require letters of credit from most of its non-U.S. customers. At December 31,
2000 and 1999, receivables (generally due within 30 days) from non-U.S.
customers were not significant. Historically, credit losses relating to
customers have been within HBI management's expectations. HBI's reliance on
relatively few customers may result in significant credit risks in the future.
HIGH PURITY PIPING BUSINESS
In 1999, the Company entered the high purity piping business through the
formation of a new business unit, UltraPure Systems ("UltraPure"). The Company
expanded its project management know-how and international execution
capabilities to UltraPure, which provides ultra clean piping systems to the
microelectronics, pharmaceutical and biotechnology industries. While UltraPure
has experienced some initial success in penetrating this market, the business
has consumed significant start-up expenses and has yet to show a profit. As a
result, the Company is
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evaluating its options with regard to UltraPure, which may include scaling back
its operations, refocusing the business on a particular market segment, or
exiting the business.
RISK OF ACQUISITION STRATEGY
The Company intends to pursue growth through the opportunistic acquisition of
companies or assets that will enable it to provide more cost-effective customer
solutions. The Company routinely reviews potential acquisitions. This strategy
involves certain risks including difficulties in the integration of operations
and systems, the diversion of management's attention from other business
concerns and the potential loss of key employees of acquired companies. The
Company may not be able to successfully integrate acquired businesses into its
operations.
If the Company finances acquisitions with all or substantially all equity and
the combined earnings per share of the acquired company, including the impact of
goodwill amortization and the benefits of any cost savings and synergies, is
less than the Company's existing earnings per share, then the transaction could
be dilutive to existing shareholders. To the extent equity issued in an
acquisition transaction is reduced by the goodwill created by such transaction,
it will reduce the Company's tangible net worth, which might have an adverse
effect on its credit and bonding capacity.
POTENTIAL ENVIRONMENTAL LIABILITY
The Company's businesses sometimes involve working around and with volatile,
toxic and hazardous substances, which creates exposure to risks of liability for
personal injury or property damage caused by any release, spill, or other
accident involving such substances that occurs as a result of the conduct of
such businesses. Although the Company maintains liability insurance, this
insurance is subject to coverage limitations, deductibles and exclusions and may
exclude coverage for losses or liabilities relating to pollution damage. The
Company may incur liabilities that may not be covered by insurance policies, or,
if covered, the dollar amount of such liabilities may exceed the Company's
policy limits. Even a partially uninsured claim, if successful and of
significant magnitude, could have a material adverse effect on the Company's
business, financial condition and results of operations.
POSSIBLE ANTI-TAKEOVER EFFECTS
WEDGE, through non-U.S. affiliates, owned approximately 19% of the Company's
Common Stock as of February 28, 2001. Also, as of this date, First Reserve owned
approximately 29% of the Company's Common Stock. Both WEDGE and First Reserve
are generally bound to vote, tender or otherwise act as recommended by the
Supervisory Board with respect to proposed business combinations pursuant to
shareholder agreements. In addition, the Company's Articles of Association and
the applicable law of The Netherlands contain provisions that may be deemed to
have anti-takeover effects. Among other things, these provisions provide for a
staggered board of Supervisory Directors, a binding nomination process and
supermajority voting requirements in the case of shareholder approval for
certain significant transactions. Such provisions may delay, defer or prevent a
takeover attempt that a shareholder might consider in the best interests of the
Company's shareholders. In addition, certain United States tax laws, including
those described immediately below, may discourage third parties from
accumulating significant blocks of the Company's Common Stock.
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RISK OF BEING CLASSIFIED AS A CONTROLLED FOREIGN CORPORATION
As a company incorporated in The Netherlands, the Company would be classified as
a "controlled foreign corporation" if any United States person acquires 10% or
more of the Company's Common Stock (including ownership through the attribution
rules of Section 958 of the Internal Revenue Code of 1986, as amended (the
"Code")) and the sum of the percentage ownership by all such persons exceeds 50%
(by voting power or value) of the Company's Common Stock. The Company does not
believe it is a "controlled foreign corporation". However, the Company may be
determined to be a controlled foreign corporation in the future. In the event
that such a determination were made, all U.S. holders of 10% or more of the
Company's Common Stock would be subject to taxation under Subpart F of the Code.
The ultimate consequences of this determination are fact-specific to each 10% or
greater U.S. shareholder, but could include possible taxation of such U.S.
shareholder on a pro rata portion of the Company's income, even in the absence
of distribution by the Company of such income.
RISK OF IMPAIRMENT OF GOODWILL
The Company accounted for the HBI and PDM Transactions using the "purchase"
method of accounting. Under the purchase method the Company recorded, at fair
value, the assets acquired and liabilities assumed and it recorded as goodwill
the difference between the cost of acquisition and the sum of the fair value of
the tangible and identifiable assets acquired, less liabilities assumed. The
Company's goodwill resulting from the HBI and PDM Transactions is approximately
$160,000,000. Amortization of this goodwill will result in a pre-tax charge to
income from operations of approximately $4,000,000 per year for the next 40
years. If the goodwill from the HBI or PDM Transactions would become "impaired"
as that term is used in Financial Accounting Standard 121, the Company would
reduce the carrying value of goodwill by the estimated shortfall of undiscounted
future cash flows. As a result, the asset impairment would result in a charge to
income from operations in the year of the impairment with a resulting decrease
in net worth. To the extent impairment would result in a reduced life for
goodwill, there would be a pro rata increase in amortization expense charged to
income from operations.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
As of February 28, 2001, WEDGE held 4,352,764 shares and First Reserve held
6,810,895 shares. WEDGE and First Reserve each have certain rights under
Shareholder Agreements to require the Company to register these shares of Common
Stock under the Securities Act to permit the public sale of such shares.
Registration rights also exist as to an additional 807,356 shares held by an
unaffiliated group of investors, as of February 28, 2001. Significant sales of
such shares under a registration statement in the future, or the prospect of
such sales, may depress the price of the shares.
ITEM 2. PROPERTIES
The Company owns or leases the properties used to conduct its business. The
capacities of these facilities depend upon the composition of products being
fabricated and constructed. As the product composition is constantly changing,
the extent of utilization of these facilities cannot be accurately stated. The
Company believes these facilities are adequate to meet its current requirements.
The following list summarizes its principal properties:
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Location Type of Facility Interest
- -------- ---------------- --------
North America
Beaumont, Texas (1) Engineering, fabrication facility, Owned
operations and administrative office
Beggs, Oklahoma (1) Fabrication facility Owned
Clive, Iowa (2) Fabrication facility, warehouse, Owned
operations and administrative office
Fort Saskatchewan, Canada Warehouse, operations and Owned
administrative office
Houston, Texas (3) Engineering, fabrication facility, Owned
warehouse, operations and
administrative office
Kankakee, Illinois Warehouse Owned
Pittsburgh, Pennsylvania (2) Warehouse Owned
Plainfield, Illinois (4) Engineering, operations and Owned
administrative office
Provo, Utah (2) Fabrication facility, warehouse, Owned
operations and administrative office
San Luis Obispo, California Warehouse and fabrication facility Owned
Tulsa, Oklahoma (1) Engineering, fabrication facility, Leased
operations and administrative office
Tyler, Texas (1) Engineering, fabrication facility, Owned
operations and administrative office
Warren, Pennsylvania (2) Fabrication facility Leased
Europe, Africa, Middle East
Al Aujam, Saudi Arabia Fabrication facility and warehouse Leased
Amsterdam, Netherlands Corporate office Leased
Dubai, United Arab Emirates Engineering, warehouse, operations and Leased
administrative office
Secunda, South Africa Fabrication facility and warehouse Leased
Asia Pacific
Batangas, Philippines Fabrication facility and warehouse Leased
Cilegon, Indonesia Fabrication facility and warehouse Leased
Laem Chabang, Thailand Warehouse, operations and Leased
administrative office
Kwinana, Australia Fabrication facility, warehouse and Leased
administrative office
Central and South America
Puerto Ordaz, Venezuela Fabrication facility and warehouse Leased
(1) Acquired these properties as a result of the HBI acquisition on
December 28, 2000
(2) Acquired or leased these properties as a result of the PDM acquisition on
February 7, 2001
(3) Warehouse and administrative offices anticipated to be sold within
the next two years
(4) Anticipated to be sold and leased back by June 30, 2001
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The Company also owns or leases a number of sales, administrative and field
construction offices, warehouses and equipment maintenance centers strategically
located throughout the world.
ITEM 3. LEGAL PROCEEDINGS
Environmental Matters
The Company's facilities have operated for many years and substances which
currently are or might be considered hazardous were used and disposed of at some
locations, which will or may require the Company to make expenditures for
remediation. In addition, the Company has agreed to indemnify parties to whom it
has sold facilities for certain environmental liabilities arising from acts
occurring before the dates those facilities were transferred. The Company is
aware of no manifestation by a potential claimant of awareness by such claimant
of a possible claim or assessment with respect to such facilities. The Company
does not consider it to be probable that a claim will be asserted with respect
to such facilities which claim is reasonably possible to have an unfavorable
outcome, which in each case would be material to the Company. The Company
believes that any potential liability for these matters will not have a material
adverse effect on its business, financial condition or results of operations.
The Company does not anticipate incurring material capital expenditures for
environmental controls or for investigation or remediation of environmental
conditions during the current or succeeding fiscal year. Nevertheless, the
Company can give no assurance that it, or entities for which it may be
responsible, will not incur liability in connection with the investigation and
remediation of facilities it currently (or formerly) owns or operates or other
locations in a manner that could materially and adversely affect the Company.
Other Contingencies
The Company is a defendant in a number of other lawsuits arising in the normal
course of its business. The Company believes that an estimate of the possible
loss or range of possible loss relating to such matters cannot be made. While it
is impossible at this time to determine with certainty the ultimate outcome of
these lawsuits and although no assurance can be given with respect thereto,
based on information currently available to the Company and based on the
Company's belief as to the reasonable likelihood of the outcomes of such
matters, the Company's management believes that adequate provision has been made
for probable losses with respect thereto as best as can be determined at this
time. The Company believes that the ultimate outcome, after provisions
therefore, will not have a material adverse effect, either individually or in
the aggregate, on the Company's business, financial condition or results of
operations. The adequacy of reserves applicable to the potential costs of being
engaged in litigation and potential liabilities resulting from litigation are
reviewed as developments in the litigation warrant.
The Company is jointly and severally liable for certain liabilities of
partnerships and joint ventures. At December 31, 2000, the Company and certain
subsidiaries had provided $237,708,000 of performance bonds and letters of
credit to support its contracting activities arising in the ordinary course of
business. This amount fluctuates based on the level of contracting activity.
The Company has elected to retain portions of anticipated losses through the use
of deductibles and self-insured retentions for its exposures related to third
party liability and workers' compensation. Liabilities in excess of these
amounts are the responsibilities of an insurance
15
16
carrier. To the extent the Company self insures for these exposures, reserves
have been provided for based on management's best estimates with input from the
Company's legal and insurance advisors. Changes in assumptions, as well as
changes in actual experience, could cause these estimates to change in the near
term. The Company's management believes that the reasonably possible losses, if
any, for these matters, to the extent not otherwise disclosed and net of
recorded reserves, will not be material to its financial position or results of
operations. At December 31, 2000, the Company had outstanding surety bonds and
letters of credit of $23,273,000 relating to its insurance program.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of Shareholders of Chicago Bridge & Iron Company N.V. was held
on December 15, 2000. The following matters were voted upon and adopted at the
meeting:
(a) Appointment of Michael D. Winfield and William E. Macaulay as
members of the Board of Supervisory Directors to serve until the
Annual Meeting of Shareholders in 2001; appointment of William H.
White as a member of the Board of Supervisory Directors to serve
until the Annual Meeting of Shareholders in 2002; and the
appointment of Ben A. Guill as a member of the Board of
Supervisory Directors to serve until the Annual Meeting of
Shareholders in 2003, and until their successors are duly
appointed.
Nominees For Against Abstain
Michael D. Winfield 7,055,926 - 15,611
William E. Macaulay 7,055,926 - 15,611
William H. White 7,055,926 - 15,611
Ben A. Guill 7,055,926 - 15,611
(b) The approval of the issuance of 8,146,665 shares of the Company's
stock to be used in consideration, together with cash provided by
a subsidiary of the Company, for the purchase of all ownership
interests in Howe-Baker International, Inc. from WEDGE Group
Incorporated and its affiliates.
For 7,056,933
Against 12,988
Abstain 1,616
(c) The amendment of the Articles of Association to implement certain
provisions of the proposed Shareholder Agreements with WEDGE Group
Incorporated and First Reserve Fund VIII, L.P.
For 7,056,711
Against 13,473
Abstain 1,353
(d) The approval of an amendment to the Chicago Bridge & Iron 1999
Long-Term Incentive Plan which, among other things, increases the
aggregate number of shares available for the issuance under the
plan.
For 6,758,641
Against 313,283
Abstain 1,613
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information required by this item can be found on page 60 of the Company's 2000
Annual Report to Shareholders and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item can be found on pages 32 and 33 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Information required by this item can be found on pages 34 through 38 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item can be found on pages 37 and 38 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements and Report of Independent Public Accountants
can be found on pages 39 through 60 of the Company's 2000 Annual Report to
Shareholders and are incorporated herein by reference.
Quarterly financial data can be found on page 59 of the Company's 2000 Annual
Report to Shareholders and is incorporated herein by reference.
Additional financial information and schedules can be found in Part IV of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has neither changed its independent public accountants nor had any
disagreements on accounting and financial disclosure with its independent public
accountants during the prior two years.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Supervisory Directors appearing under "Item 1.
Appointment of Directors" in the Company's 2001 Proxy Statement is incorporated
herein by reference.
The following table sets forth certain information regarding the executive
officers of Chicago Bridge & Iron Company ("CBIC") and Managing Directors of
Chicago Bridge & Iron Company B.V. ("CB&I B.V."). As permitted under the law of
The Netherlands, the Company does not have executive officers. CB&I B.V. serves
as the Company's Managing Director.
Served in
Name Age Position Position Since
- ---- --- -------- --------------
Gerald M. Glenn 58 Chairman of the Supervisory Board 1997
of the Company;
Chairman, President and Chief Executive 1996
Officer and Director of CBIC;
Chairman, President and Chief Executive 1997
Officer and Managing Director
of CB&I B.V.
Stephen P. Crain 47 Executive Vice President and 2000
Chief Marketing Officer of CBIC;
Managing Director of CB&I B.V. 1998
Stephen M. Duffy 51 Vice President - Human Resources and 1996
Administration of CBIC
Richard E. Goodrich 57 Group Vice President - Western Hemisphere 2000
Operations of CBIC;
Robert B. Jordan 51 Executive Vice President and Chief 2000
Operating Officer of CBIC;
Managing Director of CB&I B.V. 1998
Keith A. Reed 48 Corporate Controller and Chief 1999
Accounting Officer of CBIC
Timothy J. Wiggins 44 Executive Vice President and 2000
Chief Financial Officer and
Director of CBIC;
Vice President, Treasurer and 1997
Chief Financial Officer and
Managing Director of CB&I B.V.
Robert H. Wolfe 51 Secretary of the Company; 1997
Vice President, General Counsel and 1996
Secretary of CBIC;
Secretary of CB&I B.V. 1997
There are no family relationships between any executive officers and
supervisory directors. Executive officers of CBIC are elected annually. The
Managing Directors of CB&I B.V. serve until successors are elected.
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20
Business Experience for the Past Five Years
Gerald M. Glenn has served as Chairman of the Supervisory Board of the Company
since April 1997. He has been the Chairman, President and Chief Executive
Officer and Director of CBIC since May 1996, and has been the Chairman,
President and Chief Executive Officer and Managing Director of CB&I B.V. since
April 1997. Mr. Glenn has been elected to serve as Chairman of the Supervisory
Board of the Company; his term will expire in 2003. Mr. Glenn has been a
principal in The Glenn Group LLC since April 1994.
Stephen P. Crain has been the Executive Vice President and Chief Marketing
Officer of CBIC since November 2000 and Managing Director of CB&I B.V. since
August 1998. From July 1997 to November 2000, Mr. Crain was Vice President -
Global Sales and Marketing of CBIC. Prior to that time, Mr. Crain was employed
by CBIC or its affiliates in an executive or management capacity.
Stephen M. Duffy has been the Vice President - Human Resources and
Administration of CBIC since June 1996. Prior to that time, Mr. Duffy was the
Vice President - Human Resources and Administration of CBI Industries, Inc.
Richard E. Goodrich has been the Group Vice President - Western Hemisphere
Operations of CBIC since November 2000. From April 1999 to November 2000, Mr.
Goodrich was Vice President - Financial Operations of CBIC. Mr. Goodrich was the
Vice President - Area Director of Finance, Western Hemisphere for CBIC from June
1998 through April 1999. Prior to that time, Mr. Goodrich was the Director of
Strategic Planning - Energy and Chemicals Group of Fluor Daniel, Inc.
Robert B. Jordan has been the Executive Vice President of CBIC since November
2000 and the Chief Operating Officer of CBIC since March 2000 and Managing
Director of CB&I B.V. since February 1998. From February 1998 to November 2000,
Mr. Jordan was Vice President - Operations of CBIC. From May 1996 to February
1998, Mr. Jordan was the Senior Vice President - Sales and Operations for the
Process Division of BE&K Incorporated located in Birmingham, Alabama. Prior to
that time, Mr. Jordan was the Senior Vice President - Sales and Operations for
the Process and Industrial Division of Raytheon/Rust Engineering & Construction.
Keith A. Reed has been the Corporate Controller of CBIC since April 1999. From
July 1997 to April 1999, Mr. Reed was the Director of Financial Reporting for
CBIC. Prior to that time, Mr. Reed was the Director of Financial Reporting of
CBI Industries, Inc.
Timothy J. Wiggins has been Executive Vice President, Chief Financial Officer
and Director of CBIC since November 2000 and the Vice President, Treasurer and
Chief Financial Officer and Managing Director of CB&I B.V. since April 1997.
From September 1996 to November 2000, Mr. Wiggins was the Vice President and
Chief Financial Officer and Director of CBIC. Prior to that time, Mr. Wiggins
was the Executive Vice President - Finance and Administration, Chief Financial
Officer and Secretary and a director of Fruehauf Trailer Corporation.
Robert H. Wolfe has been the Vice President, General Counsel and Secretary of
CBIC since November 1996, and the Secretary of the Company since its inception.
From June 1996 to November 1996, Mr. Wolfe served as a private consultant to
Rust Engineering & Construction Inc. ("Rust"). Prior to that time, he served as
Vice President, General Counsel and Secretary to Rust.
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Information appearing under "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's 2001 Proxy Statement is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
Information appearing under "Executive Compensation" in the Company's 2001 Proxy
Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information appearing under "Common Stock Ownership By Certain Persons and
Management" in the Company's 2001 Proxy Statement is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information appearing under "Certain Transactions" in the Company's 2001 Proxy
Statement is incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Financial Statements
The following consolidated financial statements and Report of Independent Public
Accountants previously incorporated by reference under Item 8 of Part II of this
report are herein incorporated by reference.
Report of Independent Public Accountants
Consolidated Statements of Income - For the years ended December 31,
2000, 1999 and 1998
Consolidated Balance Sheets - As of December 31, 2000 and 1999
Consolidated Statements of Cash Flows - For the years ended
December 31, 2000, 1999 and 1998
Consolidated Statements of Changes in Shareholders' Equity - For the
years ended December 31, 2000, 1999 and 1998
Notes to Consolidated Financial Statements
Financial Statement Schedules
Supplemental Schedule V - Valuation and Qualifying Accounts and Reserves for
each of the years ended December 31, 2000, 1999, and 1998 can be found on page
26 of this report.
Schedules, other than the one above, have been omitted because the schedules are
either not applicable or the required information is shown in the financial
statements or notes thereto previously incorporated by reference under Item 8 of
Part II of this report.
Quarterly financial data for the years ended December 31, 2000 and 1999 is shown
in the Notes to Consolidated Financial Statements previously incorporated by
reference under Item 8 of Part II of this report.
The Company's interest in 50 percent or less owned affiliates, when considered
in the aggregate, does not constitute a significant subsidiary; therefore,
summarized financial information has been omitted.
Exhibits
The Exhibit Index on page 27 and Exhibits being filed are submitted as a
separate section of this report.
Reports on Form 8-K
The Company filed current reports on Form 8-K during the three months ended
December 31, 2000.
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A report on Form 8-K was filed on November 7, 2000. Under Item 5. (Other Events)
the Company reported that it took a special charge for a non-cash valuation
allowance against a net long-term receivable for a suspended project (the "Tuban
Project"). A copy of the Company's Press Release was included under Item 7.
(Financial Statements and Exhibits).
A report on Form 8-K was filed on January 8, 2001. Under Item 2. (Acquisition or
Disposition of Assets) the Company reported that it acquired the entire
ownership interest of Howe-Baker International, L.L.C. from WEDGE Group
Incorporated. Under Item 5. (Other Events) it reported that First Reserve
purchased shares of the Company from WEDGE and the Company agreed to grant First
Reserve a warrant to purchase common shares of the Company. Financial Statements
of and Pro Forma Financial Information required under Item 7. were incorporated
from the Company's Definitive Proxy Statement dated November 24, 2000 filed with
the Securities and Exchange Commission.
A report on Form 8-K was filed on January 18, 2001. Under Item 5. (Other Events)
the Company reported that it had terminated its Revolving Credit Facility dated
September 30, 1999 and, that together with the Subsidiary Borrowers, had entered
into a $200,000,000 revolving credit facility with the institutions from time to
time parties thereto as lenders and Bank One, NA, in its capacity as contractual
representative for the lenders. The Termination of the Credit Agreement dated
November 28, 2000 and the Credit Agreement dated as of December 1, 2000 among
Chicago Bridge & Iron Company N.V., the Subsidiary Borrowers, The Institutions
from time to time Parties Hereto as Lenders and Bank One NA, as Administrative
Agent and Bank of America, N.A., as Syndication Agent and Harris Trust and
Savings Bank as Documentation Agent were included as Exhibits under Item 7.
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24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Chicago Bridge & Iron Company N.V.
Date: March 29, 2001 /s/ Timothy J. Wiggins
-----------------------------------------
By: Chicago Bridge & Iron Company B.V.
Its: Managing Director
Timothy J. Wiggins
Managing Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on March 29, 2001.
Signature Title
/s/ Gerald M. Glenn Chairman of the Supervisory Board
- ---------------------------- of Registrant, and President, Chief
Gerald M. Glenn Executive Officer of CBIC
(Principal Executive Officer)
/s/ Timothy J. Wiggins Executive Vice President and Chief
- ---------------------------- Financial Officer of CBIC
Timothy J. Wiggins (Principal Financial Officer)
/s/ Keith A. Reed Corporate Controller of CBIC
- ---------------------------- (Principal Accounting Officer)
Keith A. Reed
/s/ Jerry H. Ballengee Supervisory Director
- ----------------------------
Jerry H. Ballengee
/s/ J. Dennis Bonney Supervisory Director
- ----------------------------
J. Dennis Bonney
/s/ Ben A. Guill Supervisory Director
- ----------------------------
Ben A. Guill
/s/ J. Charles Jennett Supervisory Director
- ----------------------------
J. Charles Jennett
/s/ Vincent L. Kontny Supervisory Director
- ----------------------------
Vincent L. Kontny
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25
/s/ William E. Macaulay Supervisory Director
- ----------------------------
William E. Macaulay
/s/ Gary L. Neale Supervisory Director
- ----------------------------
Gary L. Neale
/s/ L. Donald Simpson Supervisory Director
- ----------------------------
L. Donald Simpson
/s/ William H. White Supervisory Director
- ----------------------------
William H. White
/s/ Marsha C. Williams Supervisory Director
- ----------------------------
Marsha C. Williams
/s/ Michael D. Winfield Supervisory Director
- ----------------------------
Michael D. Winfield
Registrant's Agent for Service in the United States
/s/ Robert H. Wolfe
- ----------------------------
Robert H. Wolfe
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SCHEDULE V. SUPPLEMENTAL INFORMATION ON VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
CHICAGO BRIDGE & IRON COMPANY N.V.
Valuation and Qualifying Accounts and Reserves
For Each of the Three Years Ended December 31, 2000
(in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
ADDITIONS
BALANCE CHARGED TO BALANCE
AT COSTS AND AT
DESCRIPTIONS JANUARY 1 EXPENSES(1) DEDUCTIONS(2) DECEMBER 31
------------ --------- -------- ---------- -----------
Allowance for
doubtful accounts
2000 $1,054 671 (385) $1,340
1999 $2,050 1,326 (2,322) $1,054
1998 $1,909 1,232 (1,091) $2,050
(1) Includes $537 of allowances obtained through the Company's acquisition
of HBI.
(2) Deductions generally represent utilization of previously established
reserves or adjustments to reverse unnecessary reserves due to subsequent
collections.
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27
EXHIBIT INDEX
3(1) Amended Articles of Association of the Company (English
translation)
4.1(2) Specimen Stock Certificate
10.1(2) Form of Indemnification Agreement between the Company and its
Supervisory and Managing directors
10.2(3) The Company's Annual Incentive Compensation Plan
10.3(4) The Company's 1997 Long-Term Incentive Plan
As amended September 1, 1998
10.4(3) The Company's Deferred Compensation Plan
10.5(7) The Company's Management Defined Contribution Plan
As amended September 1, 1999
(a) Agreement between the Company and Gerald M. Glenn dated
September 1, 1999
(b) Agreement between the Company and Timothy J. Wiggins dated
September 1, 1999
10.6(3) The Company's Excess Benefit Plan
10.7(2) Form of the Company's Supplemental Executive Death Benefits Plan
10.8(2) Employment Agreements Including Special Stock-Based, Long-Term
Compensation Related to the Common Share Offering between the
Company and Certain Executive Officers
10.9(6) Form of Amended Termination Agreements between the Company and
Certain Executive Officers
10.10(2) Separation Agreement
10.11(2) Form of Amended and Restated Tax Disaffiliation Agreement
10.12(2) Employee Benefits Separation Agreement
10.13(2) Conforming Agreement
10.14(3) Employment Agreement Letters between the Company and
Robert B. Jordan
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10.16(4) The Company's Supervisory Board of Directors Fee Payment Plan
10.17(4) The Company's Supervisory Board of Directors Stock Purchase Plan
10.18(1) The Chicago Bridge & Iron 1999 Long-Term Incentive Plan
As amended December 15, 2000.
10.19(5) The Company's Incentive Compensation Program
10.20(6) The Company's Equity Forward Purchase Contract
10.21(7) Revolving Credit Facility Agreement dated September 30, 1999
(a) Termination Notice dated November 28, 2000
10.22(8)(1) Revolving Credit Facility Agreement dated December 1, 2000
(a) Amendment No. 1 dated February 6, 2001
10.23(1) Change of Control Severance Agreements between the Company and
certain Executive Officers
13(1) Portion of the 2000 Annual Report to Shareholders
21(1) List of Significant Subsidiaries
23(1) Consent and Report of the Independent Public Accountants
- ----------------------
(1) Filed herewith
(2) Incorporated by reference from the Company's Registration Statement on
Form S-1 (File No. 333-18065)
(3) Incorporated by reference from the Company's 1997 Form 10-K dated
March 31, 1998
(4) Incorporated by reference from the Company's 1998 Form 10-Q dated
November 12, 1998
(5) Incorporated by reference from the Company's 1999 Form 10-Q dated
May 14, 1999
(6) Incorporated by reference from the Company's 1999 Form 10-Q dated
August 13, 1999
(7) Incorporated by reference from the Company's 1999 Form 10-Q dated
November 12, 1999
(8) Incorporated by reference from the Company's Form 8-K dated January
18, 2000
28