Introducing Chicago Bridge & Iron: A Company Overview

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Part 4
Introducing Chicago Bridge & Iron: A Company Overview PART 4 OF 11

Chicago Bridge & Iron’s Operational Mix

Overview: Awards and backlog

Chicago Bridge & Iron Company’s (CBI) revenue is primarily derived from long-term contracts. Its contracts include three types: cost-reimbursable, fixed-price, and hybrid. Hybrid contracts have characteristics of both cost-reimbursable and fixed-price contracts. Generally, the deals CBI and its (XLI) peers Jacobs Engineering (JEC), KBR (KBR), and Fluor (FLR) enter into are long-term.

New awards are the expected revenue value of new contract commitments received by Chicago Bridge & Iron during a time frame and the scope of growth on existing contracts. Backlog, on the other hand, is the unearned value of new awards and is susceptible to variations due to currency movements.

Chicago Bridge &#038; Iron&#8217;s Operational Mix

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Breakdown of awards

In fiscal 2016, CBI received $7.1 billion worth of new awards compared to $13.1 billion in fiscal 2015. The decline was mainly due to the reduction in new awards in the EC (Engineering & Construction) group from $6.7 billion in 2015 to $3.1 billion in 2016.

As of September 30, 2017, CBI has $3.9 billion in new awards. That includes the EC operating group’s $1.3 billion ethane cracker project and a $600 million gas turbine power project. It also includes the Fabrication Services operating group’s $185 million LNG (liquefied natural gas) storage tanks and a $40 million ethane cracking furnace expansion project. All these projects are located in the United States.

Breakdown of backlogs

As of September 30, 2017, Chicago Bridge & Iron has $10.7 billion in backlogs, of which nearly 20% are comprised of projects outside the United States. The geographic mix of backlog and revenue is primarily dependent on global energy demand.

The backlog distribution by contracting type was nearly 90% fixed price and hybrid and 10% cost-reimbursable.


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