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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, 1999
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____ to ____
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
31-23-568-5660
(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
Amsterdam Stock 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
---- ----
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 $15.75 as of February 29, 2000, was
$133,465,721.
The number of shares outstanding of a single class of common stock as of
February 29, 2000 was 9,375,675.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1999 Annual Report to Shareholders Part I and Part II
Portions of the 2000 Proxy Statement Part III
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
PART I.
Item 1. Business 3
Item 2. Properties 10
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 12
PART II
Item 5. Market for Registrant's Common Equity and Related 13
Stockholder Matters
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial 13
Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on 13
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 16
Item 12. Security Ownership of Certain Beneficial Owners and 16
Management
Item 13. Certain Relationships and Related Transactions 16
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports 17
on Form 8-K
SIGNATURES 18
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PART I
ITEM 1. BUSINESS
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. 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 0.01 (the
"Common Stock"), was made. The Company did not receive any proceeds from the
Offering, but paid a portion of the offering costs. The Common Stock is traded
on the New York and Amsterdam Stock Exchanges.
PRODUCT LINE INFORMATION
REVENUES BY PRODUCT LINE
(In millions)
1999 1998 1997
---- ---- ----
Flat Bottom Tanks $296 $287 $209
Low Temperature/Cryogenic
Tanks and Systems 82 108 109
Repairs and Modifications 67 64 58
Specialty and Other Structures 66 130 154
Pressure Vessels 63 64 53
Elevated Tanks 52 38 48
Turnarounds 49 85 42
---- ---- ----
Total $675 $776 $673
==== ==== ====
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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.
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.
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
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the pulp and paper industry. The Company has designed and erected pressure
vessels throughout the world.
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.
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.
BUSINESS GOALS AND STRATEGIES
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 by means of a strategic plan, which
includes goals and key strategies.
Goals
The Company's goals provide direction for its employees as they strive for the
long-term enhancement of shareholder value.
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. Selectively compete in the global market for steel plate structures and their
associated systems.
The Company is a niche player in the Engineering & Construction industry with
special expertise in the design and engineering, fabrication, field erection and
repair of steel plate structures including bulk liquid terminals, storage tanks,
process vessels, and low temperature and cryogenic storage facilities.
Associated systems are the civil, foundation, piping, mechanical, electrical,
instrumentation and fire protection systems that accompany many of the process
and storage vessels the Company builds.
3. Focus on profitable opportunities in the developing regions and active
markets worldwide, as well as in the Company's strong base in North America.
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The Company will leverage its core competencies in logistics and project
execution to expand in areas where it can secure profitable new business while
maintaining and strengthening its North American base.
4. Create and deliver superior, cost-effective solutions to the Company's
customers that provide a competitive advantage.
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.
5. Create an atmosphere in which the Company's skilled, productive, motivated
and mobile work force can grow and develop.
It 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.
6. Use the Company's marketing and selling expertise to build superior
relationships with the right targeted customers.
The Company will cultivate existing and pursue additional strategic alliances
with targeted customers.
7. Make the Company's support services (e.g., Legal, Finance, Information
Technology, Human Resources) strong contributors to its performance and
profitability.
Indirect functions must efficiently provide value-added support services to its
field operations.
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.
Key Strategies
The Company's key strategies provide a focus for near-term efforts and a
foundation for future growth.
1. Continue to improve the Company's safe work practices with a goal of zero
injuries to employees and subcontractors.
As a result of the importance of safety to its employees, the goal of safer
operations is reemphasized here as the number one key strategy.
2. Build excellence in project execution.
This is the means by which the Company will plan, track and execute its projects
safely, on time, and at or above the "as sold" profitability. The ability to
consistently achieve these results depends upon the skills of the Company's
people and the excellence of its systems. The Company will invest in and improve
both of these. In addition, the Company will expand its value awareness
(continuous improvement) effort in order to achieve cost savings utilizing both
employee and customer input. The Company has put controls in place to
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ensure that the scope and value of the work delivered meet the customer's
requirements and are adequately reflected in the compensation received.
3. Execute an effective marketing process with a focus on customer solutions,
major opportunities, emerging countries, difficult geographies and expanded
services for significant profitable growth.
The Company will utilize its ability to provide customers with cost-effective,
superior turnkey solutions that offer a competitive advantage. The Company is
tracking "elephant" projects that fit its unique capabilities. These projects
represent a significantly larger revenue than "normal" projects. The Company
continues to expand into emerging markets such as Equatorial Africa and the
former Soviet Republics. It continues to seek work in locations where its
ability to staff and to field erect commands a premium. The Company will strive
to continue its success in selling expanded work scope.
4. Accurately identify all costs and improve the Company's ability to forecast
financial results.
Costs that do not add value are being eliminated. The Company is strengthening
its financial controls, and the worldwide implementation of the financial
portion of the J.D. Edwards enterprise management system was completed in 1999.
5. Capture a major share of the LNG market.
The Company has proven global capabilities in the LNG industry and intends to
capitalize on these capabilities to capture a major share of the fast growing
LNG market by identifying, targeting, pursuing and winning its share of
significant, targeted opportunities.
6. Generate incremental profitable revenue by establishing project development
and finance capabilities.
The Company recognizes that leadership and coordination of financing activities
could make significant additional project revenue available to the Company by
facilitating the development of selected projects in which the Company can
participate. By providing alternative solutions for external financing
arrangements for targeted projects worldwide, the Company can potentially
achieve both top and bottom line growth.
7. Create step-change growth in sustainable revenue, profitability and
shareholder value from acquisitions and other business opportunities.
The Company will identify, evaluate and pursue potential business combinations
including acquisitions, alliances and partnerships to attain sustainable
expansion of annual revenue.
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OTHER OPERATIONAL INFORMATION
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 services municipal and industrial customers primarily in
the water, wastewater and petroleum markets on the U.S. West Coast.
On September 30, 1999, the Company purchased the assets of XL Systems. This
acquisition enables the Company to combine its existing experience in vacuum
facility construction and project management with XL's leading-edge thermal
vacuum technology and manufacturing capabilities. The Company can now provide
complete solutions to customers in the growing aerospace and telecommunications
industries.
UltraPure Systems, a new business unit of the Company, was developed during 1999
in response to potential market opportunities and to leverage the Company's core
competencies into new areas. UltraPure Systems provides high purity process
piping systems for customers in the microelectronics, pharmaceutical, and food
and beverage industries.
The Company continues to pursue opportunities in the growing market for
water-related products and has broadened its product line to provide complete
water storage and treatment solutions. The water services product offerings
encompass water storage tanks and water and wastewater treatment products,
including elevated tanks, standpipes, reservoirs and clarification products. The
Company has been successful in securing awards for concrete pedestal tanks,
which incorporate a steel water storage structure atop a concrete base and
provide a lower-cost storage option.
The Company continues to be successful with its innovative tank building process
called CoilBuild(R), in which the tank shell is formed from continuous steel
coils rather than individual plates. CoilBuild(R) 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 and is aggressively marketing this new technology.
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.
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 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; however, from time to time a particular contract or customer may
account for a significant portion of the Company's backlog.
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The Company had a backlog of work to be completed on contracts of $511 million
at December 31, 1999, and $508 million at December 31, 1998. Approximately 75%
of the backlog as of December 31, 1999 is expected to be completed in 2000. 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.
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. 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.
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.
The Company incurred expenses of approximately $1,294,000 in 1999, $860,000 in
1998, and $1,670,000 in 1997 for its research and development activities.
The Company employed 5,666 people as of December 31, 1999. 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.
Financial information by geographic area of operation can be found on pages 42
and 43 of the Company's 1999 Annual Report to Shareholders and is incorporated
herein by reference.
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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:
Location Type of Facility Interest
North America
Fort Saskatchewan, Canada Warehouse, operations and Owned
administrative office
Houston, Texas Engineering, fabrication facility, warehouse, Owned
operations and administrative office
Kankakee, Illinois Warehouse Owned
Plainfield, Illinois Engineering, operations and administrative Owned
office
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
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.
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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
In 1991, CB&I Constructors, Inc. (formerly CBI Na-Con, Inc.), a subsidiary of
the Company, installed a catalyst cooler bundle at Fina Oil & Chemical Company's
("Fina") Port Arthur, Texas refinery. In July 1991, Fina determined that the
catalyst cooler bundle was defective and had it replaced. Fina is seeking
approximately $20,000,000 in damages for loss of use of Fina's catalyst cracking
unit and the cost of replacement of the catalyst cooler bundle. On June 28,
1993, Fina filed a complaint against CB&I Constructors, Inc. before the District
Court of Harris County, Texas in Fina Oil & Chemical Company v. CB&I
Constructors, Inc., et al. The Company denies that it is liable. While the
Company believes any liability in excess of a $2,000,000 deductible is covered
by insurance, and that the claims are without merit and/or the Company has valid
defenses to such claims and that it is reasonably likely to prevail in defending
against such claims, there can be no assurance that if the Company is finally
determined to be liable for all or a portion of any damages payable, that such
liability will not have a material adverse effect on the Company's business,
financial condition or results of operations.
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 and 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
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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, 1999, the Company and certain
subsidiaries had provided $161,245,000 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 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,
1999, the Company had outstanding surety bonds and letters of credit of
$23,646,000 relating to its insurance program.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter ended December 31, 1999.
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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 44 of the Company's 1999
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 20 and 21 of the
Company's 1999 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information required by this item can be found on pages 22 through 25 of the
Company's 1999 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 page 24 of the Company's 1999
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 26 through 44 of the Company's 1999 Annual Report to
Shareholders and are incorporated herein by reference.
Quarterly financial data can be found on page 44 of the Company's 1999 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 2000 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 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 57 Chairman of the Supervisory Board of the 1997
Company;
Chairman, President and Chief Executive Officer 1996
and Director of CBIC;
Chairman, President and Chief Executive Officer 1997
and Managing Director of CB&I B.V.
Stephen P. Crain 46 Vice President - Global Sales and Marketing of 1997
CBIC;
Managing Director of CB&I B.V. 1998
Stephen M. Duffy 50 Vice President - Human Resources and 1996
Administration of CBIC
Richard E. Goodrich 56 Vice President - Financial Operations of CBIC 1999
Robert B. Jordan 50 Vice President - Operations of CBIC; 1998
Chief Operating Officer of CBIC; 2000
Managing Director of CB&I B.V. 1998
Keith A. Reed 47 Corporate Controller of CBIC 1999
Timothy J. Wiggins 43 Vice President and Chief Financial Officer and 1996
Director of CBIC;
Vice President, Treasurer and Chief Financial 1997
Officer and Managing Director of CB&I B.V.
Robert H. Wolfe 50 Secretary of the Company; 1997
Vice President, General Counsel and Secretary of 1996
CBIC
Secretary of CB&I B.V. 1997
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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.
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 2000. Mr. Glenn has been a
principal in The Glenn Group LLC since April 1994.
Stephen P. Crain has been the Vice President - Global Sales and Marketing of
CBIC since July 1997 and Managing Director of CB&I B.V. since August 1998. 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 Vice President - Financial Operations of CBIC
since April 1999. 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 Vice President - Operations of CBIC and Managing
Director of CB&I B.V. from February 1998 and the Chief Operating Officer of CBIC
since March 2000. 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 the Vice President and Chief Financial Officer and
Director of CBIC since September 1996, and the Vice President, Treasurer and
Chief Financial Officer and Managing Director of CB&I B.V. since April 1997.
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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16
Information appearing under "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's 2000 Proxy Statement is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
Information appearing under "Executive Compensation" in the Company's 2000 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 2000 Proxy Statement is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
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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,
1999, 1998 and 1997
Consolidated Balance Sheets - As of December 31,
1999 and 1998
Consolidated Statements of Cash Flows - For the years
ended December 31, 1999, 1998 and 1997
Consolidated Statements of Changes in Shareholders' Equity -
For the years ended December 31, 1999, 1998 and 1997
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, 1999, 1998 and 1997 can be found on page 20
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, 1999 and 1998 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 21 and Exhibits being filed are submitted as a
separate section of this report.
Reports on Form 8-K
The Company did not file a current report on Form 8-K during the three months
ended December 31, 1999.
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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 28, 2000 /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 28, 2000.
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 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/ J. Charles Jennett Supervisory Director
- ------------------------------
J. Charles Jennett
/s/ Vincent L. Kontny Supervisory Director
- ------------------------------
Vincent L. Kontny
/s/ Gary L. Neale Supervisory Director
- ------------------------------
Gary L. Neale
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19
/s/ L. Donald Simpson Supervisory Director
- ------------------------------
L. Donald Simpson
/s/ Marsha C. Williams Supervisory Director
- ------------------------------
Marsha C. Williams
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, 1999
(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 DEDUCTIONS(1) DECEMBER 31
------------ --------- -------- ---------- -----------
Allowance for
doubtful accounts
1999 $2,050 $ 1,326 $(2,322) $1,054
1998 1,909 1,232 (1,091) 2,050
1997 3,047 1,207 (2,345) 1,909
(1) Deductions generally represent utilization of previously established
reserves or adjustments to reverse unnecessary reserves due to subsequent
collections.
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EXHIBIT INDEX
3(6) 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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10.15(2)(7) Revolving Credit Facility
(a) Amendment No. 1 dated October 31, 1997
(b) Amendment No. 2 dated March 5, 1998
(c) Reduction and Termination Notice dated September 28, 1999
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(5) The Chicago Bridge & Iron 1999 Long-Term Incentive Plan
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
13(1) Portion of the 1999 Annual Report to Shareholders
21(1) List of Significant Subsidiaries
23(1) Consent and Report of the Independent Public Accountants
27(1) Financial Data Schedule
- ----------------------
(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
22