Basis of Pro Forma Presentation
These financial statements provide the pro forma effects of the sale of our Capital Services Operations on our Statements of Operations for the years ended December 31, 2016, 2015 and 2014 as if the sale occurred on January 1 of each period presented. The adjustments give effect to the removal of 1) the results of the Capital Services Operations, including an allocable portion of our corporate costs and 2) interest expense assuming the estimated net sales proceeds of approximately $650 million (inclusive of an estimated working capital adjustment and transaction costs) were utilized to repay outstanding debt as of January 1 of each period presented.
CHICAGO BRIDGE & IRON COMPANY N.V.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
| | | | | | | | | | | |
| | Year Ended December 31, 2016 |
| | As Stated | | Pro Forma Adj. | | Pro Forma |
| | (In thousands, except per share data) |
| Revenue | $ | 10,679,558 |
| | $ | (2,079,909 | ) | (a) | $ | 8,599,649 |
|
| Cost of revenue | 9,653,502 |
| | (1,931,263 | ) | (a) | 7,722,239 |
|
| Gross profit | 1,026,056 |
| | (148,646 | ) | | 877,410 |
|
| Selling and administrative expense | 349,874 |
| | (51,833 | ) | (a) | 298,041 |
|
| Intangibles amortization | 42,439 |
| | (16,600 | ) | (a) | 25,839 |
|
| Equity earnings | (26,826 | ) | | 2,256 |
| (a) | (24,570 | ) |
| Goodwill impairment | 655,000 |
| | (655,000 | ) | (a) | — |
|
| Loss on net assets sold | 148,148 |
| | — |
| | 148,148 |
|
| Other operating expense, net | 2,339 |
| | 72 |
| (a) | 2,411 |
|
| (Loss) income from operations | (144,918 | ) | | 572,459 |
| | 427,541 |
|
| Interest expense | (105,349 | ) | | 24,109 |
| (b) | (81,240 | ) |
| Interest income | 13,004 |
| | (1,155 | ) | (a) | 11,849 |
|
| (Loss) income before taxes | (237,263 | ) | | 595,413 |
| | 358,150 |
|
| Income tax (expense) benefit | (2,560 | ) | | 23,486 |
| (c) | 20,926 |
|
| Net (loss) income | (239,823 | ) | | 618,899 |
| | 379,076 |
|
| Less: Net income attributable to noncontrolling interests | (73,346 | ) | | 2,187 |
| (a) | (71,159 | ) |
| Net (loss) income attributable to CB&I | $ | (313,169 | ) | | $ | 621,086 |
| | $ | 307,917 |
|
| | | | | | |
| Per Share Data | | | | | |
| Net (loss) income attributable to CB&I per share: | | | | | |
| Basic | $ | (3.05 | ) | |
|
| | $ | 2.99 |
|
| Diluted | $ | (3.05 | ) | |
|
| | $ | 2.97 |
|
| | | | | | |
| Weighted average shares outstanding: | | | | | |
| Basic | 102,811 |
| | | | 102,811 |
|
| Diluted | 102,811 |
| | | (d) | 103,662 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of these Pro Forma financial statements.
CHICAGO BRIDGE & IRON COMPANY N.V.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
| | | | | | | | | | | |
| | Year Ended December 31, 2015 |
| | As Stated | | Pro Forma Adj. | | Pro Forma |
| | (In thousands, except per share data) |
| Revenue | $ | 12,929,504 |
| | $ | (2,298,692 | ) | (a) | $ | 10,630,812 |
|
| Cost of revenue | 11,417,188 |
| | (2,139,870 | ) | (a) | 9,277,318 |
|
| Gross profit | 1,512,316 |
| | (158,822 | ) | | 1,353,494 |
|
| Selling and administrative expense | 387,027 |
| | (50,745 | ) | (a) | 336,282 |
|
| Intangibles amortization | 57,625 |
| | (19,960 | ) | (a) | 37,665 |
|
| Equity earnings | (15,689 | ) | | 912 |
| (a) | (14,777 | ) |
| Goodwill impairment | 453,100 |
| | — |
| | 453,100 |
|
| Loss on net assets sold and intangible assets impairment | 1,052,751 |
| | — |
| | 1,052,751 |
|
| Other operating expense, net | 2,619 |
| | 441 |
| (a) | 3,060 |
|
| Loss from operations | (425,117 | ) | | (89,470 | ) | | (514,587 | ) |
| Interest expense | (94,360 | ) | | 23,857 |
| (b) | (70,503 | ) |
| Interest income | 8,285 |
| | (1,244 | ) | (a) | 7,041 |
|
| Loss before taxes | (511,192 | ) | | (66,857 | ) | | (578,049 | ) |
| Income tax benefit | 81,231 |
| | 20,963 |
| (c) | 102,194 |
|
| Net loss | (429,961 | ) | | (45,894 | ) | | (475,855 | ) |
| Less: Net income attributable to noncontrolling interests | (74,454 | ) | | 2,511 |
| (a) | (71,943 | ) |
| Net loss attributable to CB&I | $ | (504,415 | ) | | $ | (43,383 | ) | | $ | (547,798 | ) |
| | | | | | |
| Per Share Data | | | | | |
| Net loss attributable to CB&I per share: | | | | | |
| Basic | $ | (4.72 | ) | |
|
| | $ | (5.13 | ) |
| Diluted | $ | (4.72 | ) | |
|
| | $ | (5.13 | ) |
| | | | | | |
| Weighted average shares outstanding: | | | | | |
| Basic | 106,766 |
| | | | 106,766 |
|
| Diluted | 106,766 |
| | | | 106,766 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of these Pro Forma financial statements.
CHICAGO BRIDGE & IRON COMPANY N.V.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
| | | | | | | | | | | |
| | Year Ended December 31, 2014 |
| | As Stated | | Pro Forma Adj. | | Pro Forma |
| | (In thousands, except per share data) |
| Revenue | $ | 12,974,930 |
| | $ | (2,158,413 | ) | (a) | $ | 10,816,517 |
|
| Cost of revenue | 11,508,521 |
| | (1,992,905 | ) | (a) | 9,515,616 |
|
| Gross profit | 1,466,409 |
| | (165,508 | ) | | 1,300,901 |
|
| Selling and administrative expense | 405,208 |
| | (46,332 | ) | (a) | 358,876 |
|
| Intangibles amortization | 66,506 |
| | (19,960 | ) | (a) | 46,546 |
|
| Equity earnings | (25,225 | ) | | 689 |
| (a) | (24,536 | ) |
| Other operating income, net | (2,373 | ) | | 551 |
| (a) | (1,822 | ) |
| Integration related costs | 39,685 |
| | (8,300 | ) | (a) | 31,385 |
|
| Income from operations | 982,608 |
| | (92,156 | ) | | 890,452 |
|
| Interest expense | (83,590 | ) | | 22,372 |
| (b) | (61,218 | ) |
| Interest income | 8,524 |
| | (1,154 | ) | (a) | 7,370 |
|
| Income before taxes | 907,542 |
| | (70,938 | ) | | 836,604 |
|
| Income tax expense | (271,417 | ) | | 32,051 |
| (c) | (239,366 | ) |
| Net income | 636,125 |
| | (38,887 | ) | | 597,238 |
|
| Less: Net income attributable to noncontrolling interests | (92,518 | ) | | 1,876 |
| (a) | (90,642 | ) |
| Net income attributable to CB&I | $ | 543,607 |
| | $ | (37,011 | ) | | $ | 506,596 |
|
| | | | | | |
| Per Share Data | | | | | |
| Net income attributable to CB&I per share: | | | | | |
| Basic | $ | 5.03 |
| |
|
| | $ | 4.69 |
|
| Diluted | $ | 4.98 |
| |
|
| | $ | 4.64 |
|
| | | | | | |
| Weighted average shares outstanding: | | | | | |
| Basic | 108,047 |
| | | | 108,047 |
|
| Diluted | 109,122 |
| | | | 109,122 |
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements, which are an integral part of these Pro Forma financial statements.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Pro Forma Adjustments to Condensed Combined Statements of Operations:
| |
| (a) | To remove the results of our Capital Services Operations, including an allocable portion of our corporate costs appropriate to align with how our results will be presented after the disposition. |
| |
| (b) | To remove interest expense assuming the estimated net sales proceeds of approximately $650 million (inclusive of an estimated working capital adjustment and transaction costs) were utilized to repay outstanding debt as of January 1 of each period presented. |
| |
| (c) | To tax effect the pro forma adjustments. The tax effect of the 2016 pro forma adjustments reflects the non-deductibility of the $655 million goodwill impairment. |
| |
| (d) | The unadjusted diluted per share amount for the year ended December 31, 2016, is based upon diluted weighted average shares that are equivalent to our basic weighted average shares due to the net loss for the period, and the pro forma diluted per share amount is based upon diluted weighted average shares. |
