UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2017~~2018



o	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.



The Netherlands	Prinses Beatrixlaan 35	98-0420223
(State or other jurisdiction of	2595 AK The Hague	(I.R.S. Employer Identification No.)
incorporation or organization)	The Netherlands
	31 70 373 2010
	(Address and telephone number of principal executive offices)

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.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes o No



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o

Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o
		Emerging growth company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes x No

The number of shares outstanding of the registrant’s common stock as of ~~October~~April 1916, ~~2017~~2018 – ~~101~~102,~~392~~548,~~440~~319

CHICAGO BRIDGE & IRON COMPANY N.V.

Table of Contents

	Page
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Statements of Operations—Three and Nine Months Ended September 30, 2017 and 2016	3
Statements of Operations—Three Months Ended March 31, 2018 and 2017	3
Statements of Comprehensive Income (Loss) —Three and Nine Months Ended September 30, 2017 and 2016	4
Statements of Comprehensive Income (Loss) —Three Months Ended March 31, 2018 and 2017	4
Balance Sheets—September 30, 2017 and December 31, 2016	5
Balance Sheets—March 31, 2018 and December 31, 2017	5
Statements of Cash Flows—Nine Months Ended September 30, 2017 and 2016	6
Statements of Cash Flows—Three Months Ended March 31, 2018 and 2017	6
Statements of Changes in Shareholders’ Equity—Nine Months Ended September 30, 2017 and 2016	7
Statements of Changes in Shareholders’ Equity—Three Months Ended March 31, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3531
Item 3. Quantitative and Qualitative Disclosures About Market Risk	5648
Item 4. Controls and Procedures	5748
PART II—OTHER INFORMATION
Item 1. Legal Proceedings	5748
Item 1A. Risk Factors	5748
Item 6. Exhibits	5949
Signatures	6150

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CHICAGO BRIDGE & IRON COMPANY N.V.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2017			2016			2017			2016
	2018			2017
	(Unaudited)
Revenue	$	1,~~737~~745,~~764~~619		$	21,~~137~~827,~~877~~352		$	~~4,668,690~~		$	~~6,200,713~~
Cost of revenue	1,~~655~~572,~~002~~520			1,~~920~~676,~~894~~401			~~4,919,206~~			~~5,591,393~~
Gross profit (loss)	82,762			216,983			(250,516		)	609,320
Gross profit	173,099			150,951
Selling and administrative expense	5164,~~458~~498			6273,~~913~~057			~~173,594~~			~~190,207~~
Intangibles amortization	16,~~891~~552			16,~~937~~486			~~5,771~~			~~6,451~~
Equity earnings	(9,~~727~~444		)	(27,~~632~~611		)	~~(21,210~~		)	~~(1,875~~		)
Restructuring related costs	265,~~882~~110			—			~~30,882~~			—
Other operating (income) expense, net	(531,314		)	~~189~~31			~~(415~~		)	~~1,112~~
Operating income (loss) from continuing operations	12,311			154,576			(439,138		)	413,425
Income from operations	107,697			78,988
Interest expense	(552,~~288~~452		)	(124,~~586~~101		)	~~(9,036~~		)	~~(4,666~~		)
Interest income	~~574~~577			21,~~292~~228			~~2,684~~			~~7,187~~
Income (loss) from continuing operations before taxes	7,597			155,282			(445,490		)	415,946
Income from operations before taxes	55,822			56,115
Income tax (expense) benefit	(3,112		)	(22,206		)	177,347			(83,280		)
Income tax expense	(11,164		)	(13,704		)
Net income (loss) from continuing operations	4,485			133,076			(268,143		)	332,666
Net income from continuing operations	44,658			42,411
Net income (loss) from discontinued operations	7,061			35,343			(90,916		)	88,263
Net income from discontinued operations	—			9,494
Net income (loss)	11,546			168,419			(359,059		)	420,929
Net income	44,658			51,905
Less: Net income attributable to noncontrolling interests ($0, $930, $870 and $1,815 related to discontinued operations)	(1,507		)	(46,659		)	(31,666		)	(68,405		)
Less: Net income attributable to noncontrolling interests ($0 and $413 related to discontinued operations)	(764		)	(27,250		)
Net income (loss) attributable to CB&I	$	10,039		$	121,760		$	(390,725	)	$	352,524
Net income attributable to CB&I	$	43,894		$	24,655
Net income (loss) attributable to CB&I per share (Basic):
Net income attributable to CB&I per share (Basic):
Continuing operations	$	0.0343		$	0.8616		$	~~(2.96~~	)	$	~~2.57~~
Discontinued operations	~~0.07~~—			0.3409			~~(0.91~~		)	~~0.83~~
Total	$	0.1043		$	10.2025		$	~~(3.87~~	)	$	~~3.40~~
Net income (loss) attributable to CB&I per share (Diluted):
Net income attributable to CB&I per share (Diluted):
Continuing operations	$	0.0343		$	0.8615		$	~~(2.96~~	)	$	~~2.54~~
Discontinued operations	~~0.07~~—			0.3409			~~(0.91~~		)	~~0.83~~
Total	$	0.1043		$	10.2024		$	~~(3.87~~	)	$	~~3.37~~
Weighted average shares outstanding:
Basic	~~101~~102,~~177~~333			~~101~~100,~~102~~451			~~100,834~~			~~103,725~~
Diluted	~~101~~102,~~736~~627			101,~~863~~360			~~100,834~~			~~104,555~~
Cash dividends on shares:
Amount	$	—		$	67,~~995~~047		$	~~14,109~~		$	~~21,726~~
Per share	$	—		$	0.07		$	~~0.14~~		$	~~0.21~~

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

CHICAGO BRIDGE & IRON COMPANY N.V.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2017			2016			2017			2016
	2018			2017
	(Unaudited)
Net income (loss)	$	11,546		$	168,419		$	(359,059	)	$	420,929
Net income	$	44,658		$	51,905
Other comprehensive income (loss) from continuing operations, net of tax:
Other comprehensive income (loss), net of tax:
Change in cumulative translation adjustment	2615,~~496~~866			224,~~812~~410			~~82,392~~			~~1,605~~
Change in unrealized fair value of cash flow hedges	(~~187~~72		)	~~155~~353			~~623~~			~~1,198~~
Change in unrecognized prior service pension credits/costs	(3952		)	(7976		)	~~(64~~		)	~~(234~~		)
Change in unrecognized actuarial pension gains/losses	(43,~~012~~918		)	~~423~~(1,433		)	~~(11,303~~		)	~~2,827~~
Other comprehensive income (loss) from discontinued operations, net of tax:
Other comprehensive income from discontinued operations - change in cumulative translation adjustment	—			495
Change in cumulative translation adjustment	669			(553		)	2,367			(315		)
Comprehensive income	56,482			75,654
Change in unrecognized prior service pension credits/costs	2			(1		)	7			(2		)
Net income attributable to noncontrolling interests ($0 and $413 related to discontinued operations)	(764		)	(27,250		)
Change in unrecognized actuarial pension gains/losses	(284		)	4			(1,038		)	16
Change in cumulative translation adjustment attributable to noncontrolling interests	416			(970		)
Comprehensive income (loss)	34,191			171,180			(286,075		)	426,024
Comprehensive income attributable to CB&I	$	56,134		$	47,434
Net income attributable to noncontrolling interests ($0, $930, $870 and $1,815 related to discontinued operations)	(1,507		)	(46,659		)	(31,666		)	(68,405		)
Change in cumulative translation adjustment attributable to noncontrolling interests	(811		)	(750		)	(2,432		)	(1,294		)
Comprehensive income (loss) attributable to CB&I	$	31,873		$	123,771		$	(320,173	)	$	356,325

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

CHICAGO BRIDGE & IRON COMPANY N.V.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2017			December 31, 2016
	March 31, 2018			December 31, 2017
	(Unaudited)
Assets
Cash and cash equivalents ($166,287 and $328,387 related to variable interest entities ("VIEs"))	$	341,869		$	490,679
Cash and cash equivalents ($113,128 and $165,771 related to variable interest entities ("VIEs"))	$	305,229		$	354,639
Accounts receivable, net ($80,634 and $53,159 related to VIEs)	599,167			401,872
Accounts receivable, net ($24,773 and $42,288 related to VIEs)	766,123			759,701
Inventory	96112,~~434~~978			~~173~~101,~~817~~573
Costs and estimated earnings in excess of billings ($29,654 and $26,186 related to VIEs)	368,855			330,432
Costs and estimated earnings in excess of billings ($183,988 and $42,997 related to VIEs)	392,589			315,744
Current assets of discontinued operations	1,103,888			603,776
Assets held for sale	18,300			17,845
Other current assets ($259,245 and $426,515 related to VIEs)	410,088			541,176
Other current assets ($103,456 and $163,810 related to VIEs)	224,833			281,171
Total current assets	21,~~920~~820,~~301~~052			21,~~541~~830,~~752~~673
Equity investments	66209,~~164~~565			35206,~~541~~118
Property and equipment, net	~~393~~415,~~015~~665			~~434~~418,~~252~~531
Goodwill	2,~~339~~838,~~054~~836			2,~~315~~836,~~338~~582
Other intangibles, net	74190,~~365~~476			80196,~~136~~473
Deferred income taxes	886,483			723,919
Other non-current assets ($128,541 and $74,067 related to VIEs)	545,979			483,205
Non-current assets of discontinued operations	—			1,382,704
Total assets	$	6,020,573		$	5,971,582
Other non-current assets ($75,313 and $5,484 related to VIEs)	397,631			325,778
Total assets	$	7,077,013		$	7,839,420
Liabilities
Revolving facility and other short-term borrowings	$	~~896~~1,~~856~~388,151		$	~~407~~1,~~500~~102,151
Current maturities of long-term debt, net	1,~~183~~145,~~057~~358			~~503~~1,~~910~~160,291
Accounts payable ($351,073 and $337,089 related to VIEs)	882,053			864,632
Accounts payable ($382,616 and $348,872 related to VIEs)	950,075			971,735
Billings in excess of costs and estimated earnings ($267,627 and $407,325 related to VIEs)	1,288,919			1,218,824
Billings in excess of costs and estimated earnings ($48,970 and $130,484 related to VIEs)	1,155,780			1,275,441
Current liabilities of discontinued operations	349,340			562,617
Other current liabilities	618,210			752,294
Other current liabilities	810,559			978,766
Total current liabilities	5,257,574			5,261,912
Total current liabilities	5,410,784			4,536,249
Deferred income taxes	56,028			63,771
Long-term debt, net	—			1,287,923
Other non-current liabilities	424,483			427,535
Deferred income taxes	9,257			6,590
Total liabilities	5,738,085			5,753,218
Non-current liabilities of discontinued operations	—			38,290
Other non-current liabilities	398,126			409,031
Total liabilities	5,818,167			6,278,083
Shareholders’ Equity
Common stock, Euro .01 par value; shares authorized: 250,000; shares issued: 108,857 and 108,857; shares outstanding: 101,239 and 100,113	1,288			1,288
Common stock, Euro .01 par value; shares authorized: 250,000; shares issued: 108,857 and 108,857; shares outstanding: 102,547 and 101,705	1,288			1,288
Additional paid-in capital	~~755~~715,~~820~~932			~~782~~743,~~130~~128
Retained earnings	965,772			1,370,606
Retained deficit	(57,802		)	(101,696		)
Treasury stock, at cost: 7,618 and 8,744 shares	(283,911		)	(344,870		)
Treasury stock, at cost: 6,310 and 7,152 shares	(216,804		)	(254,642		)
Accumulated other comprehensive loss	(~~325~~304,~~064~~268		)	(~~395~~316,~~616~~508		)
Total CB&I shareholders’ equity	1138,~~113,905~~346			171,~~413,538~~570
Noncontrolling interests ($0 and $6,874 related to discontinued operations)	144,941			147,799
Noncontrolling interests	144,142			146,794
Total shareholders’ equity	1282,~~258,846~~488			1218,~~561,337~~364
Total liabilities and shareholders’ equity	$	76,~~077~~020,~~013~~573		$	75,~~839~~971,~~420~~582

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

CHICAGO BRIDGE & IRON COMPANY N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2017			2016
	2018			2017
	(Unaudited)
Cash Flows from Operating Activities
Net (loss) income	$	(359,059	)	$	420,929
Net income	$	44,658		$	51,905
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	6518,~~637~~738			9326,~~285~~264
Amortization of debt issuance costs	227,~~787~~929			41,~~000~~469
Loss on net assets sold (net of cash paid for transaction costs of $13,075)	51,742			—
Deferred income taxes	(2,602		)	15,101
Deferred income taxes	(154,192		)	87,161
Stock-based compensation expense	9,137			10,247
Stock-based compensation expense	34,520			31,172
Other operating income, net	(1,314		)	(77		)
Other operating expense, net	745			1,075
Unrealized loss on foreign currency hedges	5,432			1,380
Unrealized (gain) loss on foreign currency hedges	(886		)	1,525
Excess tax benefits from stock-based compensation	—			(48		)
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net	(197,532		)	46,418
Increase in receivables, net	(6,422		)	(217,122		)
Change in contracts in progress, net	34(196,~~994~~506		)	(~~252~~6,~~857~~057		)
Decrease in inventory	65,841			49,473
Increase in inventory	(11,405		)	(12,346		)
(Decrease) increase in accounts payable	(48,801		)	11,830
Decrease in accounts payable	(21,660		)	(95,117		)
Increase in other current and non-current assets	(46,451		)	(15,356		)
(Increase) decrease in other current and non-current assets	(57,659		)	12,062
(Decrease) increase in other current and non-current liabilities	(114,504		)	13,525
Decrease in other current and non-current liabilities	(23,951		)	(78,037		)
Increase in equity investments	(12,737		)	(3,974		)
(Increase) decrease in equity investments	(3,444		)	953
Change in other, net	(301,~~102~~242		)	6(1,~~883~~307		)
Net cash (used in) provided by operating activities	(687,998		)	495,041
Net cash used in operating activities	(240,311		)	(290,682		)
Cash Flows from Investing Activities
Proceeds from sale of discontinued operation, net of cash sold	645,506			—
Capital expenditures	(8,099		)	(12,274		)
Capital expenditures	(40,089		)	(37,855		)
Advances with partners of proportionately consolidated ventures, net	52,015			(23,788		)
Advances with partners of proportionately consolidated ventures, net	140,986			(54,158		)
Proceeds from sale of property and equipment	742			1,108
Proceeds from sale of property and equipment	3,452			2,973
Other, net	(25,844		)	(8,342		)
Insurance proceeds	12,000			—
Net cash provided by (used in) investing activities	18,814			(43,296		)
Other, net	(14,817		)	(62,646		)
Net cash provided by (used in) investing activities	747,038			(151,686		)
Cash Flows from Financing Activities
Revolving facility and other short-term repayments, net	489,356			(84,000		)
Revolving facility and other short-term borrowings, net	286,000			510,000
Advances with equity method and proportionately consolidated ventures, net	(103,509		)	195,645
Advances with equity method and proportionately consolidated ventures and partners, net	(98,317		)	47,099
Repayments on long-term debt	(~~606~~18,~~463~~750		)	(~~112~~300,~~500~~000		)
Excess tax benefits from stock-based compensation	—			48
Purchase of treasury stock	(3,207		)	(7,359		)
Purchase of treasury stock	(9,632		)	(206,443		)
Issuance of stock	4,120			3,877
Issuance of stock	9,717			12,405
Dividends paid	—			(7,047		)
Dividends paid	(14,109		)	(21,726		)
Distributions to noncontrolling interests	(3,000		)	(18,985		)
Distributions to noncontrolling interests	(29,921		)	(51,851		)
Capitalized debt issuance costs	(2,415		)	—
Capitalized debt issuance costs	(34,174		)	—
Net cash provided by financing activities	164,431			227,585
Net cash used in financing activities	(298,735		)	(268,422		)
Effect of exchange rate changes on cash and cash equivalents	7,656			21,316
Effect of exchange rate changes on cash and cash equivalents	76,408			(10,188		)
Decrease in cash and cash equivalents	(49,410		)	(85,077		)
(Decrease) increase in cash and cash equivalents	(163,287		)	64,745
Cash and cash equivalents, beginning of period	354,639			505,156
Cash and cash equivalents, beginning of period	505,156			550,221
Cash and cash equivalents, end of period	305,229			420,079
Cash and cash equivalents, end of period	341,869			614,966
Cash and cash equivalents, end of period - discontinued operations	—			(17,782		)
Cash and cash equivalents, end of period - discontinued operations	—			(16,412		)
Cash and cash equivalents, end of period - continuing operations	$	305,229		$	402,297
Cash and cash equivalents, end of period - continuing operations	$	341,869		$	598,554

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

CHICAGO BRIDGE & IRON COMPANY N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except per share data)

	Nine Months Ended September 30, 2017
	Three Months Ended March 31, 2018
	Common Stock				AdditionalPaid-In Capital			Retained ~~Earnings~~Deficit			Treasury Stock					AccumulatedOtherComprehensive (Loss) Income			Non -controlling Interests			TotalShareholders’ Equity
	Shares		Amount								Shares		Amount
	(Unaudited)
Balance at December 31, 2016	100,113		$	1,288	$	782,130		$	1,370,606		8,744		$	(344,870	)	$	(395,616	)	$	147,799		$	1,561,337
Balance at December 31, 2017	101,705		$	1,288	$	743,128		$	(101,696	)	7,152		$	(254,642	)	$	(316,508	)	$	146,794		$	218,364
Net (loss) income	—		—		—			(390,725		)	—		—			—			31,666			(359,059		)
Net income	—		—		—			43,894			—		—			—			764			44,658
Disposition	—		—		—			—			—		—			—			(7,035		)	(7,035		)
Change in cumulative translation adjustment, net	—		—		—			—			—		—			16,282			(416		)	15,866
Change in cumulative translation adjustment, net	—		—		—			—			—		—			82,327			2,432			84,759
Change in unrealized fair value of cash flow hedges, net	—		—		—			—			—		—			(72		)	—			(72		)
Change in unrealized fair value of cash flow hedges, net	—		—		—			—			—		—			623			—			623
Change in unrecognized prior service pension credits/costs, net	—		—		—			—			—		—			(52		)	—			(52		)
Change in unrecognized prior service pension credits/costs, net	—		—		—			—			—		—			(57		)	—			(57		)
Change in unrecognized actuarial pension gains/losses, net	—		—		—			—			—		—			(3,918		)	—			(3,918		)
Change in unrecognized actuarial pension gains/losses, net	—		—		—			—			—		—			(12,341		)	—			(12,341		)
Distributions to noncontrolling interests	—		—		—			—			—		—			—			(3,000		)	(3,000		)
Distributions to noncontrolling interests	—		—		—			—			—		—			—			(29,921		)	(29,921		)
Stock-based compensation expense	—		—		9,137			—			—		—			—			—			9,137
Dividends paid ($0.14 per share)	—		—		—			(14,109		)	—		—			—			—			(14,109		)
Liability-based compensation fair value adjustment	—		—		592			—			—		—			—			—			592
Stock-based compensation expense	—		—		34,520			—			—		—			—			—			34,520
Purchase of treasury stock	(181	)	—		—			—			181		(3,207		)	—			—			(3,207		)
Purchase of treasury stock	(330	)	—		—			—			330		(9,632		)	—			—			(9,632		)
Issuance of stock	1,023		—		(36,925		)	—			(1,023	)	41,045			—			—			4,120
Issuance of stock	1,456		—		(60,830		)	—			(1,456	)	70,591			—			—			9,761
Balance at March 31, 2018	102,547		$	1,288	$	715,932		$	(57,802	)	6,310		$	(216,804	)	$	(304,268	)	$	144,142		$	282,488
Balance at September 30, 2017	101,239		$	1,288	$	755,820		$	965,772		7,618		$	(283,911	)	$	(325,064	)	$	144,941		$	1,258,846

	Nine Months Ended September 30, 2016
	Three Months Ended March 31, 2017
	Common Stock				AdditionalPaid-In Capital			Retained Earnings			Treasury Stock					AccumulatedOtherComprehensive (Loss) Income			Non -controlling Interests			TotalShareholders’ Equity
	Shares		Amount								Shares		Amount
	(Unaudited)
Balance at December 31, 2015	104,427		$	1,288	$	800,641		$	1,712,508		4,430		$	(206,407	)	$	(294,040	)	$	149,600		$	2,163,590
Balance at December 31, 2016	100,113		$	1,288	$	782,130		$	1,370,606		8,744		$	(344,870	)	$	(395,616	)	$	147,799		$	1,561,337
Net income	—		—		—			~~352~~24,~~524~~655			—		—			—			6827,~~405~~250			~~420~~51,~~929~~905
Change in cumulative translation adjustment, net	—		—		—			—			—		—			(423,935		)	~~1,294~~970			124,~~290~~905
Change in unrealized fair value of cash flow hedges, net	—		—		—			—			—		—			~~1,198~~353			—			~~1,198~~353
Change in unrecognized prior service pension credits/costs, net	—		—		—			—			—		—			(~~236~~76		)	—			(~~236~~76		)
Change in unrecognized actuarial pension gains/losses, net	—		—		—			—			—		—			2(1,~~843~~433		)	—			2(1,~~843~~433		)
Distributions to noncontrolling interests	—		—		—			—			—		—			—			(5118,~~851~~985		)	(5118,~~851~~985		)
Dividends paid ($0.21 per share)	—		—		—			(21,726		)	—		—			—			—			(21,726		)
Dividends paid ($0.07 per share)	—		—		—			(7,047		)	—		—			—			—			(7,047		)
Stock-based compensation expense	—		—		3110,~~172~~247			—			—		—			—			—			3110,~~172~~247
Purchase of treasury stock	(~~5,768~~219	)	—		—			—			~~5,768~~219		(~~206~~7,~~443~~359		)	—			—			(~~206~~7,~~443~~359		)
Issuance of stock	~~1,277~~808		—		(5335,~~297~~219		)	—			(~~1,277~~808	)	5939,~~387~~124			—			—			63,~~090~~905
Balance at September 30, 2016	99,936		$	1,288	$	778,516		$	2,043,306		8,921		$	(353,463	)	$	(290,239	)	$	167,448		$	2,346,856
Balance at March 31, 2017	100,702		$	1,288	$	757,158		$	1,388,214		8,155		$	(313,105	)	$	(372,837	)	$	157,034		$	1,617,752

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

CHICAGO BRIDGE & IRON COMPANY N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2017~~2018

($ and share values in thousands, except per share data)

(Unaudited)

1. ORGANIZATION AND NATURE OF OPERATIONS

Organization and Nature of Operations—Founded in 1889, Chicago Bridge & Iron Company N.V. (“CB&I”, “we”, “our”, “us” or the “usCompany”) provides a wide range of services, including conceptual design, technology, engineering, procurement, fabrication, modularization, construction and commissioning services to customers in the energy infrastructure market throughout the world. Our business is aligned into ~~two~~three operating groups, which represent our reportable segments: Engineering & Construction; Fabrication Services; and Technology. During the first quarter 2018, we realigned our Fabrication Services operating group and Technology operating group to reflect the present management oversight of our operations. See Note 2 and Note 45 for ~~discussions~~discussion of our discontinued operations and Note 1617 for afurther discussion of our reportable segments and related financial information.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Consolidation—The accompanying unaudited interim Condensed Consolidated Financial Statements (“Financial Statements”) have been prepared in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the ~~United~~U.S. ~~States of America~~ (“U.S. GAAP”). These Financial Statements reflect all wholly-owned subsidiaries and those entities which we are required to consolidate. See the “Partnering Arrangements” section of this footnote for further discussion of our consolidation policy for those entities that are not wholly-owned. Intercompany balances and transactions are eliminated in consolidation.

Basis of Presentation—We believe these Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2017~~2018 and ~~2016~~2017, our financial position as of ~~September~~March 3031, ~~2017~~2018 and our cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018 and ~~2016~~2017. The December 31, ~~2016~~2017 Condensed Consolidated Balance Sheet (the “Balance Sheet(s)”) was derived from our December 31, ~~2016~~2017 audited Consolidated Balance Sheet~~, adjusted to conform to our current year presentation~~.

OnWe ~~February~~believe ~~27, 2017, we entered into a definitive agreement (~~the ~~“CS~~disclosures ~~Agreement”)~~accompanying ~~with~~these ~~CSVC~~Financial ~~Acquisition~~Statements ~~Corp~~are ~~(“CSVC”),~~adequate ~~under which CSVC agreed~~ to ~~acquire~~make ~~our~~the ~~“Capital~~information ~~Services~~presented ~~Operations”~~not ~~(primarily comprised of our former Capital Services reportable segment)~~misleading. ~~Our~~Certain ~~Capital~~information ~~Services Operations provided comprehensive~~ and ~~integrated~~footnote ~~maintenance~~disclosures ~~services,~~normally ~~environmental~~included ~~engineering~~in ~~and~~annual ~~remediation,~~financial ~~construction~~statements ~~services,~~prepared ~~program~~in ~~management,~~accordance ~~and~~with ~~disaster response and recovery services for private-sector customers and governments~~U. ~~We completed the sale of the Capital Services Operations on June 30, 2017 (the “Closing Date”)~~S. WeGAAP ~~considered~~have ~~the~~been ~~Capital~~condensed ~~Services~~or ~~Operations~~omitted pursuant to ~~be a discontinued operation in~~ the ~~first~~rules ~~quarter~~and ~~2017,~~regulations asof the ~~divestiture~~SEC ~~represented~~for ainterim ~~strategic~~reporting ~~shift and will have a material effect on our operations and financial results~~periods. ~~Operating~~The results of ~~the~~operations ~~Capital~~and ~~Services~~cash ~~Operations~~flows ~~through~~for the ~~Closing~~interim ~~Date~~periods ~~and~~are ~~any~~not ~~post-closing~~necessarily ~~adjustments~~indicative ~~have been classified as a discontinued operation within the Condensed Consolidated Statements~~ of ~~Operations (~~the ~~“Statement(s)~~results ofto ~~Operations”)~~be expected for the ~~three~~full ~~and nine months ended September 30, 2017 and 2016~~year. ~~Further,~~The ~~the~~accompanying ~~assets~~Financial ~~and~~Statements ~~liabilities~~should ofbe ~~the~~read ~~Capital~~in ~~Services~~conjunction ~~Operations~~with ~~have~~our ~~been~~Consolidated ~~classified~~Financial asStatements ~~assets~~ and ~~liabilities~~notes ofthereto ~~discontinued~~included ~~operations~~in ~~within~~ our ~~December 31, 2016 Balance Sheet, and our September 30,~~ 2017 ~~Balance~~Annual ~~Sheet reflects the impact of the sale~~Report. ~~Cash flows of the Capital Services Operations through the Closing Date are not reported separately within our Condensed Consolidated Statements of Cash flows.~~

InMcDermott/CB&I ~~July~~Combination—On December 18, 2017, we ~~initiated~~entered ainto ~~plan~~an toagreement ~~market~~(the ~~and sell our~~ “~~Technology~~Combination ~~Operations~~Agreement”) ~~(primarily~~to ~~comprised~~combine ofwith ~~our~~McDermott ~~former~~International, ~~Technology~~Inc. ~~reportable segment and our~~ (“~~Engineered Products Operations~~McDermott”,) ~~representing~~in aan ~~portion~~all-stock oftransaction ~~our~~whereby ~~Fabrication~~McDermott ~~Services~~stockholders ~~reportable~~will ~~segment),~~own ~~the~~approximately ~~proceeds~~53% of ~~which~~the ~~would~~combined becompany ~~used~~and ~~to significantly reduce~~ our ~~outstanding~~shareholders ~~debt.~~will ~~Our~~own ~~Technology~~approximately ~~Operations~~47% ~~provide~~(the ~~proprietary~~“Combination”). ~~process~~Under ~~technology~~the ~~licenses~~terms ~~and~~of ~~associated~~the ~~engineering~~Combination ~~services~~Agreement, ~~catalysts~~our ~~and~~shareholders ~~engineered~~would ~~products,~~be ~~primarily~~entitled ~~for~~to ~~the~~receive ~~petrochemical~~2.47221 ~~and~~shares ~~refining~~of ~~industries,~~McDermott ~~and~~common ~~offers~~stock ~~process~~for ~~planning~~each ~~and~~share ~~project~~of ~~development~~our ~~services~~common ~~and~~stock a(or ~~comprehensive program of aftermarket support~~0.82407 Weshares ~~considered~~if ~~the~~McDermott ~~Technology~~effects ~~Operations~~a planned three-to-one bereverse astock ~~discontinued~~split ~~operation~~prior into ~~the~~closing), ~~third~~together ~~quarter~~with ~~2017,~~cash asin ~~the~~lieu ~~anticipated~~of ~~divestiture~~fractional ~~represents~~shares aand ~~strategic~~subject ~~shift~~to ~~and~~any ~~will~~applicable ~~have~~withholding ataxes. ~~material~~A ~~effect~~meeting onof our ~~operations~~shareholders and ~~financial~~a ~~results.~~meeting ~~Operating results~~ of ~~the~~McDermott ~~Technology~~stockholders ~~Operations~~to ~~have~~vote ~~been~~on ~~classified~~their asrespective aCombination-related ~~discontinued~~proposals ~~operation~~have ~~within~~each ~~the~~been ~~Statements~~scheduled ~~of Operations~~ for ~~the~~May ~~three and nine months ended September 30~~2, ~~2017 and 2016~~2018. ~~Further,~~The ~~the~~Combination ~~assets~~is ~~and~~anticipated ~~liabilities~~to ofclose in the ~~Technology~~second ~~Operations~~quarter ~~have~~2018, ~~been~~subject ~~classified~~to asreceipt ~~assets~~of ~~and~~approval ~~liabilities~~ of ~~discontinued operations within~~ our ~~September 30,~~shareholders ~~2017~~ and ~~December 31,~~McDermott ~~2016 Balance Sheets~~stockholders, ~~with~~and ~~all~~satisfaction ~~balances reported as current on our September 30, 2017 Balance Sheet. Cash flows~~ of ~~the~~other ~~Technology~~customary ~~Operations~~closing ~~are not reported separately within our Condensed Consolidated Statements of Cash Flows~~conditions.

~~Unless~~Discontinued ~~otherwise~~Operations—On ~~noted~~June 30, 2017, we completed the ~~footnotes~~sale toof our ~~Financial~~“Capital ~~Statements~~Services ~~relate~~Operations” to(primarily comprised of our ~~continuing~~former ~~operations~~Capital Services reportable segment) to CSVC Acquisition Corp (“CSVC”). ~~See~~We ~~Note~~considered 4the ~~for~~Capital ~~additional~~Services ~~discussion~~Operations ofto ~~our~~be a discontinued ~~operations~~operation, and accordingly, its operating results for the ~~impact~~three months ended March 31, 2017 are classified as a discontinued operation within our Condensed Consolidated Statements of Operations (the ~~sale~~“Statement(s) of Operations”). Cash flows of the Capital Services Operations for the three months ended March 31, 2017 are not reported separately within our Condensed Consolidated Statements of Cash Flows (the “Statement(s) of Cash Flows”). Unless otherwise noted, the values presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 5 for further discussion of our discontinued operations.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

WeUse ~~believe~~of ~~the~~Estimates—The ~~disclosures~~preparation ~~accompanying~~of ~~these~~our Financial Statements ~~are~~in ~~adequate~~conformity with U.S. GAAP requires us to make estimates and judgments that affect the ~~information~~reported ~~presented~~amounts ~~not~~of ~~misleading.~~assets, ~~Certain~~liabilities, ~~information~~revenue and ~~footnote~~expenses and related disclosures ~~normally~~of ~~included~~contingent inassets ~~annual~~and ~~financial~~liabilities. ~~statements~~We ~~prepared~~believe inthe ~~accordance~~most significant estimates and judgments are associated with ~~U.S.~~(i) ~~GAAP~~revenue ~~have~~recognition ~~been~~for ~~condensed~~our orcontracts, ~~omitted~~including ~~pursuant~~estimating costs to ~~the~~complete ~~rules~~each contract and ~~regulations~~the recognition of ~~the~~incentive ~~SEC~~fees ~~for~~and ~~interim~~unapproved ~~reporting~~change ~~periods.~~orders ~~The~~and ~~results~~claims; of(ii) ~~operations~~fair value and ~~cash~~recoverability ~~flows~~assessments ~~for~~that ~~the~~must ~~interim~~be ~~periods~~periodically ~~are~~performed ~~not~~with ~~necessarily~~respect ~~indicative~~to long-lived tangible assets, goodwill and other intangible assets; (iii) valuation of ~~the~~deferred ~~results~~tax toassets beand ~~expected~~financial ~~for~~instruments; (iv) the ~~full~~determination ~~year.~~of ~~The~~liabilities ~~accompanying~~related ~~Financial~~to ~~Statements~~self-insurance ~~should~~programs beand ~~read~~income intaxes; ~~conjunction~~and (v) consolidation determinations with respect to our ~~Consolidated~~partnering ~~Financial~~arrangements. ~~Statements~~If the underlying estimates and ~~notes~~assumptions ~~thereto~~upon ~~included~~which our Financial Statements are based change in ~~our~~the ~~2016~~future, ~~Annual~~actual ~~Report~~amounts onmay ~~Form~~differ ~~10-K~~from ~~(“2016~~those ~~Annual~~included ~~Report”)~~in the Financial Statements.

~~Use~~Other ofOperating ~~Estimates—The~~(Income) ~~preparation~~Expense, ofNet—Other ~~our~~operating ~~Financial~~(income) ~~Statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets~~expense, ~~liabilities,~~net ~~revenue~~generally ~~and~~represents ~~expenses~~(gains) ~~and~~losses ~~related disclosures of contingent assets and liabilities. We believe the most significant estimates and judgments are~~ associated with ~~revenue recognition for our contracts, including estimating costs and~~ the ~~recognition~~sale ofor ~~incentive~~disposition fees and unapproved change orders and claims; fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, goodwill and other intangible assets; valuation of ~~deferred~~property ~~tax assets~~ and ~~financial instruments; the determination of liabilities related to self-insurance programs and income taxes; and consolidation determinations with respect to our partnering arrangements~~equipment. ~~If the underlying estimates and assumptions upon which our Financial Statements are based change in the future, actual amounts may differ from those included in the Financial Statements.~~

~~Revenue~~Restructuring ~~Recognition~~Related Costs—~~Our~~Restructuring ~~revenue~~related iscosts ~~primarily~~were ~~derived from long-term contracts and is generally recognized using the percentage of completion (“POC”) method~~$5,100 primarily based on the percentage that actual costs-to-date bear to total estimated costs to complete each contract. We follow the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Revenue Recognition Topic 605-35 for ~~accounting policies relating to our use of~~ the ~~POC~~three ~~method,~~months ~~estimating~~ended ~~costs,~~March ~~and revenue recognition~~31, ~~including~~2018 ~~the recognition of incentive fees, unapproved change orders~~ and ~~claims,~~related ~~and combining and segmenting contracts. We primarily utilize the cost-~~to~~-cost~~ ~~approach~~professional tofees estimate POC, as we believe this method is less subjective than relying on assessments of physical progress. Under the cost-to-cost approach, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue and isseverance ~~a significant factor in the accounting for contracts. Significant estimates that impact the cost to complete each contract are:~~ costs ~~of engineering~~, ~~materials,~~resulting ~~components,~~primarily ~~equipment,~~from ~~labor~~our ~~and~~publicly ~~subcontracts;~~announced labor productivity; schedule durations, including subcontractor or supplier progress; liquidated damages; contract disputes, including claims; achievement of contractual performance requirements; and contingency, among others. The cumulative impact of revisions in total cost ~~estimates during the progress of work is reflected in the period in which these changes become known~~reduction, ~~including,~~facility torationalization ~~the extent required, the reversal of profit recognized in prior periods~~ and ~~the~~strategic ~~recognition of losses expected to be incurred on contracts in progress~~initiatives. Due to the various estimates inherent in our contract accounting, actual results could differ from those estimates, which could result in material changes to our Financial Statements and related disclosures. See Note 159 for further discussion of ~~projects~~our ~~with~~restructuring ~~significant~~related ~~changes in estimated margins during the three and nine months ended September 30, 2017 and 2016~~costs.

~~Our~~Goodwill—Goodwill ~~long-term~~is ~~contracts~~not ~~are~~amortized ~~awarded~~to onearnings, abut ~~competitively~~instead ~~bid~~is ~~and~~reviewed ~~negotiated~~for ~~basis~~impairment ~~and~~at ~~the~~least ~~timing~~annually ofat ~~revenue~~a ~~recognition~~reporting ~~may~~unit belevel, ~~impacted~~absent byany ~~the~~indicators ~~terms~~ of ~~such~~impairment ~~contracts.~~or Wewhen ~~use~~other aactions ~~range~~require ofan ~~contracting~~impairment ~~options,~~assessment ~~including~~(such ~~cost-reimbursable,~~as ~~fixed-price~~a ~~and~~change ~~hybrid,~~in ~~which~~reporting ~~has~~units). ~~both~~We ~~cost-reimbursable~~perform ~~and~~our ~~fixed-price~~annual ~~characteristics.~~impairment ~~Fixed-price~~assessment ~~contracts,~~during ~~and~~the ~~hybrid~~fourth ~~contracts~~quarter ~~with~~of aeach ~~more~~year ~~significant~~based ~~fixed-price~~on ~~component,~~balances ~~tend~~as toof ~~provide~~October us1. ~~with~~We ~~greater~~identify ~~control~~a ~~over~~potential ~~project~~impairment ~~schedule~~by ~~and~~comparing the ~~timing~~fair value of ~~when~~the ~~work~~applicable isreporting ~~performed~~unit ~~and~~to ~~costs~~its ~~are~~net ~~incurred,~~book ~~and accordingly~~value, ~~when~~including ~~revenue is recognized~~goodwill. ~~Cost-reimbursable~~If ~~contracts,~~the ~~and~~net ~~hybrid~~book ~~contracts~~value ~~with~~exceeds athe ~~more~~fair ~~significant~~value ~~cost-reimbursable~~of ~~component, generally provide our customers with greater influence over~~ the ~~timing~~reporting ofunit, ~~when~~ we ~~perform~~measure ~~our~~the ~~work,~~impairment ~~and~~by ~~accordingly,~~comparing ~~such~~the ~~contracts~~carrying ~~often~~value ~~result~~of inthe ~~less~~reporting ~~predictability~~unit ~~with respect~~ to ~~the~~its ~~timing~~fair ~~of revenue recognition~~value. ~~Contract~~To ~~revenue~~determine ~~for our long-term contracts recognized under~~ the ~~POC~~fair ~~method~~value ~~reflects~~of ~~the~~our ~~original~~reporting ~~contract~~units ~~price~~and ~~adjusted~~test for ~~approved~~impairment, ~~change~~we ~~orders~~utilize ~~and~~an ~~estimated~~income ~~recoveries~~approach ~~for~~(discounted ~~incentive~~cash ~~fees,~~flow ~~unapproved~~method) ~~change~~as ~~orders~~we ~~and~~believe ~~claims,~~this ~~and~~is ~~liquidated~~the ~~damages.~~most Wedirect ~~recognize~~approach ~~revenue~~to ~~associated~~incorporate ~~with~~the ~~incentive~~specific ~~fees~~economic ~~when~~attributes ~~the~~and ~~value~~risk ~~can~~profiles beof ~~reliably~~our ~~estimated~~reporting ~~and~~units ~~recovery~~into isour ~~probable~~valuation model. WeThis ~~recognize~~is ~~revenue~~consistent ~~associated~~ with ~~unapproved~~the ~~change~~methodology ~~orders~~used ~~and claims~~ to ~~the~~determine ~~extent~~ the ~~related~~fair ~~costs~~value ~~have~~of ~~been~~our ~~incurred,~~reporting ~~the~~units ~~value~~in ~~can~~previous beyears. ~~reliably~~We ~~estimated~~generally ~~and~~do ~~recovery~~not isutilize ~~probable.~~a ~~Our~~market ~~recorded~~approach ~~incentive~~given ~~fees,~~the ~~unapproved~~lack ~~change~~of ~~orders~~relevant ~~and~~information ~~claims~~generated ~~reflect~~by ~~our~~market ~~best~~transactions ~~estimates~~involving ofcomparable ~~recovery~~businesses. ~~amounts; however~~However, to the ~~ultimate~~extent ~~resolution~~market ~~and~~indicators ~~amounts~~of ~~received~~fair ~~could~~value ~~differ~~become ~~from~~available, ~~these~~we ~~estimates.~~consider ~~Liquidated~~such ~~damages~~market ~~are~~indicators ~~reflected~~in asour adiscounted ~~reduction~~cash toflow ~~contract~~analysis ~~price~~and todetermination ~~the~~of ~~extent~~fair ~~they are deemed probable~~value. See Note 157 for ~~additional~~further discussion of our ~~recorded unapproved change orders, claims and incentives~~goodwill.

~~With~~Other ~~respect~~Long-Lived toAssets—We amortize our ~~engineering,~~finite-lived ~~procurement~~intangible ~~and~~assets ~~construction~~on ~~(“EPC”)~~a ~~services,~~straight-line ~~our~~basis ~~contracts~~with ~~are~~lives ~~not~~ranging ~~segmented~~from ~~between~~6 ~~types~~to of20 ~~services~~years, ~~such~~absent asany ~~engineering~~indicators ~~and construction, if each~~ of ~~the~~impairment. ~~EPC~~We ~~components~~review istangible ~~negotiated~~assets ~~concurrently~~and orfinite-lived ifintangible ~~the~~assets ~~pricing~~for ofimpairment ~~any~~when ~~such~~events ~~services~~or ischanges ~~subject~~in tocircumstances ~~the~~indicate ~~ultimate~~that ~~negotiation and agreement of~~ the ~~entire~~carrying ~~EPC~~amount ~~contract. However, an EPC contract including fabrication services~~ may not be ~~segmented if we satisfy the segmenting criteria in ASC 605-35~~recoverable. ~~Revenue~~If ~~recorded~~a inrecoverability ~~these~~assessment ~~situations~~ is ~~based~~required, onthe ~~our~~estimated ~~prices~~future ~~and~~cash ~~terms~~flow ~~for~~associated ~~similar~~with ~~services~~the toasset ~~third~~or ~~party~~asset ~~customers.~~group ~~Segmenting~~will abe ~~contract~~compared ~~may~~to ~~result~~their inrespective ~~different~~carrying ~~interim~~amounts ~~rates~~to ofdetermine ~~profitability for each scope of service than~~ if wean ~~had~~impairment ~~recognized revenue without segmenting~~exists. InSee ~~some~~Note ~~instances,~~7 wefor ~~may~~further ~~combine~~discussion ~~contracts~~of ~~that~~our ~~are~~intangible ~~entered into in multiple phases, but are interdependent and~~ assets.

Earnings Per Share (“EPS”)—Basic EPS is calculated by dividing net income attributable to CB&I by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of dilutive securities, consisting of restricted shares, performance based shares (where performance criteria have been met), stock options and directors’ deferred-fee shares. See Note 4 for calculations associated with basic and diluted EPS.

Cash Equivalents—Cash equivalents are considered to be highly liquid securities with original maturities of three months or less.

Inventory—Inventory is recorded at the lower of cost and net realizable value, and cost is determined using the first-in-first-out or weighted-average cost method. The cost of inventory includes acquisition costs, production or conversion costs, and other costs incurred to bring the inventory to a current location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. An allowance for excess or inactive inventory is recorded based on an analysis that considers current inventory levels, historical usage patterns, estimates of future sales expectations and salvage value. See Note 6 for further discussion of our inventory.

Foreign Currency—The nature of our business activities involves the management of various financial and market risks, including those related to changes in foreign currency exchange rates. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment in accumulated other comprehensive income (loss) (“AOCI”), which is net of tax, where applicable. Foreign currency transactional and re-measurement exchange gains (losses) are included within cost of revenue and were not material for the three months ended March 31, 2018 and 2017.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~include~~derivative ~~pricing~~positions), ~~considerations~~are byincluded usin ~~and~~AOCI until the ~~customer~~associated ~~that~~underlying ~~are~~operating ~~impacted~~exposure byimpacts ~~all~~our ~~phases~~earnings. ofChanges in the ~~project.~~fair ~~Otherwise,~~value ifof ~~each~~(i) ~~phase~~credit isrisk ~~independent~~and offorward points, (ii) instruments deemed ineffective during the ~~other~~period, and ~~pricing~~(iii) ~~considerations~~instruments that we do not ~~give~~designate ~~effect~~as tocash ~~another~~flow ~~phase,~~hedges ~~the~~are ~~contracts~~recognized ~~will~~within ~~not~~cost beof ~~combined~~revenue.

~~Cost~~For ofthose ~~revenue~~contracts ~~for~~designated ~~our~~as ~~long-term~~cash ~~contracts~~flow ~~includes~~hedges, ~~direct~~we ~~contract~~document ~~costs,~~all ~~such~~relationships asbetween ~~materials~~the derivative instruments and ~~labor~~associated hedged items, ~~and~~as ~~indirect~~well ~~costs~~as ~~that~~our ~~are~~risk-management ~~attributable~~objectives toand ~~contract~~strategy ~~activity~~for undertaking hedge transactions. ~~The~~This ~~timing~~process ofincludes ~~when~~linking weall ~~bill~~derivatives ~~our~~to ~~customers~~specific isfirm ~~generally~~commitments ~~dependent~~or ~~upon~~highly-probable ~~advance~~forecasted ~~billing~~transactions. ~~terms~~We continually assess, ~~milestone~~at ~~billings~~inception ~~based~~and on ~~the~~an ~~completion~~ongoing ofbasis, ~~certain~~the ~~phases~~effectiveness of ~~the~~derivative ~~work,~~instruments orin ~~when~~offsetting ~~services~~changes ~~are~~in ~~provided.~~the ~~Projects~~cash ~~with~~flow ~~costs~~of ~~and~~the ~~estimated~~designated ~~earnings~~hedged ~~recognized~~items. toHedge ~~date~~accounting indesignation ~~excess~~is ofdiscontinued ~~cumulative~~when ~~billings~~(i) it ~~are~~is ~~reported~~determined onthat the ~~Balance~~derivative ~~Sheets~~is asno ~~costs~~longer ~~and~~highly ~~estimated~~effective ~~earnings~~ in ~~excess~~offsetting ofchanges ~~billings.~~in ~~Projects~~the ~~with~~cash ~~cumulative~~flow ~~billings in excess~~ of ~~costs~~the ~~and~~hedged ~~estimated~~item, ~~earnings~~including ~~recognized~~firm tocommitments ~~date~~or ~~are~~forecasted ~~reported~~transactions, on(ii) the ~~Balance~~derivative ~~Sheets~~is assold, ~~billings~~terminated, inexercised, ~~excess~~or ofexpires, ~~costs~~(iii) it ~~and~~is ~~estimated~~no ~~earnings.~~longer ~~The~~probable ~~net~~that ~~balances~~the onforecasted ~~our~~transaction ~~Balance~~will ~~Sheets~~occur, ~~are~~or ~~collectively~~(iv) we ~~referred~~determine tothat asdesignating ~~Contracts~~the inderivative ~~Progress,~~as ~~net,~~a ~~and~~hedging ~~the~~instrument ~~components~~is ofno ~~these~~longer ~~balances~~appropriate. atSee ~~September 30,~~Note ~~2017~~11 ~~and~~for ~~December 31,~~further ~~2016~~discussion ~~were~~of asour ~~follows:~~financial instruments.

	September 30, 2017						December 31, 2016
	Asset			Liability			Asset			Liability
Costs and estimated earnings on contracts in progress	$	5,751,709		$	27,611,616		$	7,852,740		$	22,544,241
Billings on contracts in progress	(5,382,854		)	(28,900,535		)	(7,522,308		)	(23,763,065		)
Contracts in progress, net	$	368,855		$	(1,288,919	)	$	330,432		$	(1,218,824	)

Income Taxes—Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis using currently enacted income tax rates for the years in which the differences are expected to reverse. A valuation allowance (“VA”) is provided to offset any net deferred tax assets (“DTA(s)”) if, based on the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our net DTAs depends upon our ability to generate sufficient future taxable income of the appropriate character and in the appropriate jurisdictions. At March 31, 2018 and December 31, 2017, we had a VA against our U.S. net operating loss DTAs, and our remaining U.S. and non-U.S. net DTAs, as we do not believe it is more likely than not that we will utilize our net DTAs. See our 2017 Form 10-K for further discussion of our VA assessments.

~~Any~~Income ~~uncollected~~tax ~~billed~~and ~~amounts,~~associated ~~including~~interest ~~contract~~and ~~retentions~~penalty reserves, where applicable, are ~~reported~~recorded asin ~~accounts~~those ~~receivable.~~instances Atwhere ~~September 30,~~we ~~2017~~consider ~~and~~it ~~December 31,~~more ~~2016,~~likely ~~accounts~~than ~~receivable~~not ~~included~~that ~~contract~~additional ~~retentions~~tax will be due in excess of ~~approximately~~amounts ~~$74,200~~reflected ~~and~~in ~~$72~~income tax returns filed worldwide,~~100,~~ ~~respectively~~irrespective of whether or not we have received tax assessments. ~~Contract~~We ~~retentions~~continually ~~due~~review ~~beyond~~our ~~one~~exposure ~~year~~to ~~were~~additional ~~approximately~~income ~~$42,100~~tax ~~and~~obligations ~~$37~~and,~~500~~ atas ~~September 30~~further information is known or events occur, ~~2017~~changes in our tax and ~~December 31,~~penalty ~~2016,~~reserves ~~respectively~~may be recorded within income tax expense and changes in interest reserves may be recorded in interest expense.

~~Revenue~~Partnering ~~for~~Arrangements—In ~~our~~the ~~service~~ordinary ~~contracts~~course ~~that~~of dobusiness, ~~not~~we ~~satisfy~~execute ~~the~~specific ~~criteria~~projects ~~for~~and ~~revenue~~conduct ~~recognition~~certain ~~under~~operations ~~the~~through ~~POC~~joint ~~method~~venture, isconsortium ~~recorded~~and atother ~~the~~collaborative ~~time~~arrangements ~~services~~(collectively ~~are~~referred ~~performed~~to as “venture(s)”). ~~Revenue~~We ~~associated~~have ~~with~~various ~~incentive~~ownership ~~fees~~interests ~~for~~in these ~~contracts~~ventures, iswith ~~recognized~~such ~~when~~ownership ~~earned~~typically proportionate to our decision making and distribution rights. ~~Unbilled~~The ~~receivables~~ventures ~~for~~generally ~~our~~contract ~~service~~directly ~~contracts~~with ~~are~~the ~~recorded~~third ~~within~~party ~~accounts~~customer; ~~receivable~~however, ~~and~~services ~~were~~may ~~not~~be ~~material~~performed atdirectly ~~September 30~~by the ventures, ~~2017~~or ~~and~~may ~~December 31~~be performed by us, ~~2016.~~our partners, or a combination thereof.

~~Revenue~~Venture ~~for~~net ~~our~~assets ~~pipe~~consist ~~and~~primarily ~~steel~~of ~~fabrication~~working ~~contracts~~capital ~~that~~and ~~are~~property ~~independent~~and ofequipment, anand ~~EPC~~assets ~~contract,~~may orbe ~~for~~restricted ~~which~~from webeing ~~satisfy~~used ~~the~~to ~~segmentation~~fund ~~criteria~~obligations ~~discussed~~outside ~~above,~~of isthe ~~recognized~~venture. ~~upon~~These ~~shipment~~ventures oftypically ~~the~~have ~~fabricated~~limited third party debt or ~~manufactured~~have ~~units.~~debt ~~During~~that ~~the~~is ~~fabrication~~non-recourse orin ~~manufacturing~~nature. ~~process~~However, ~~all~~they ~~related~~may ~~direct~~provide ~~and~~for ~~allocable~~capital ~~indirect~~calls ~~costs~~to ~~are~~fund ~~capitalized~~operations asor ~~work~~require participants in ~~process~~the ~~inventory~~venture ~~and~~to ~~such~~provide ~~costs~~additional ~~are~~financial ~~recorded~~support, asincluding ~~cost~~advance ofpayment ~~revenue~~or atretention ~~the~~letters ~~time~~ of ~~shipment~~credit.

~~Our~~Each ~~billed~~venture is assessed at inception and ~~unbilled~~on ~~revenue~~an ~~may~~ongoing bebasis ~~exposed~~as to ~~potential~~whether ~~credit~~it ~~risk~~qualifies ifas ~~our~~a ~~customers~~VIE ~~should~~under ~~encounter~~the ~~financial~~consolidations ~~difficulties,~~guidance ~~and~~in weASC ~~maintain~~810. ~~reserves~~A ~~for~~venture ~~specifically-identified~~generally ~~potential~~qualifies ~~uncollectible~~as ~~receivables.~~a AtVIE ~~September~~when it (i) meets the definition of a legal entity, (ii) 30absorbs the operational risk of the projects being executed, ~~2017~~creating a variable interest, and ~~December~~(iii) ~~31,~~lacks ~~2016~~sufficient capital investment from the partners, ~~our~~potentially ~~allowances~~resulting ~~for~~in ~~doubtful~~the ~~accounts~~venture ~~were~~requiring ~~not~~additional ~~material~~subordinated financial support, if necessary, to finance its future activities.

~~Other~~If ~~Operating~~at ~~(Income)~~any ~~Expense~~time a venture qualifies as a VIE, ~~Net—Other~~we ~~operating~~perform ~~(income)~~a ~~expense~~qualitative assessment to determine whether we are the primary beneficiary of the VIE and, ~~net~~therefore, ~~generally~~need ~~represents~~to consolidate the VIE. We are the primary beneficiary if we have (~~gains~~i) ~~losses~~the ~~associated~~power ~~with~~to direct the ~~sale~~economically orsignificant ~~disposition~~activities of ~~property~~the VIE and ~~equipment.~~(ii) ~~Approximately~~the $4right to receive benefits from,~~000~~ ofand ~~costs~~obligation ~~previously~~to ~~recorded~~absorb ~~within~~losses ~~other~~of, ~~operating~~the ~~expense~~VIE. ~~during~~If the ~~three~~venture is a VIE and ~~six~~we ~~months~~are ~~ended~~the ~~June~~primary 30beneficiary, ~~2017~~or ~~were~~we ~~reclassified~~otherwise have the ability to ~~restructuring~~control ~~related~~the ~~costs~~venture, we consolidate the venture. If we determine that we are not the primary beneficiary of the VIE, or only have the ability to significantly influence, rather than control the venture, we do not consolidate the venture. We account for unconsolidated ventures using either (i) proportionate consolidation for both the ~~nine~~Balance ~~months~~Sheet ~~ended~~and ~~September~~Statement 30of Operations, ~~2017~~when we meet the applicable accounting criteria to do so, asor ~~described~~(ii) ~~below~~utilize the equity method. See Note 8 for further discussion of our material partnering arrangements.

Restructuring Related Costs—Restructuring related costs were approximately $26,900 and $30,900, for the three and nine months ended September 30, 2017, respectively, and included: 1) approximately $13,200 and $17,200, respectively, of accrued future operating lease expense for vacated facility capacity where we remain contractually obligated to a lessor, 2) approximately $2,400 of employee severance related costs for both periods, 3) approximately $10,400 of professional fees for both periods, and 4) approximately $900 of other miscellaneous restructuring related costs for both periods, as further described in Note 8. Restructuring costs for the nine months ended September 30, 2017 includes approximately $4,000 of costs that were previously recorded within other operating expense during the three and six months ended June 30, 2017.

Recoverability of Goodwill—Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually at a reporting unit level, absent any indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units). We perform our annual impairment assessment during the fourth quarter of each year based on balances as of October 1. We identify a potential impairment by comparing the fair value of the applicable reporting unit to its net book value, including goodwill. If the net book value exceeds the fair value of the reporting unit, an indication of potential impairment exists, and we measure the impairment by comparing the carrying value of the reporting unit’s goodwill to its implied fair value. To determine the fair value of our reporting units and test for impairment, we utilize an income approach (discounted cash flow method) as we believe this is the most direct approach to incorporate the specific economic attributes and risk profiles of our reporting units into our valuation model. This is consistent with the methodology used to determine the fair value of our reporting units in previous years. We generally do not utilize a market approach given the lack of relevant

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~information~~New ~~generated~~Revenue byRecognition ~~market~~Standard—In ~~transactions~~May ~~involving~~2014, ~~comparable~~the ~~businesses.~~FASB ~~However~~issued ASU 2014-09, which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current industry-specific guidance, including ASC 605-35. The new standard requires companies to ~~the~~recognize ~~extent~~revenue ~~market~~when ~~indicators~~control of ~~fair~~promised ~~value~~goods ~~become~~or ~~available,~~services weis ~~consider~~transferred ~~such~~to ~~market~~customers ~~indicators~~at an amount that reflects the consideration to which the company expects to be entitled in ~~our~~exchange ~~discounted~~for ~~cash~~the ~~flow~~goods ~~analysis~~or services. The new model requires companies to identify contractual performance obligations and ~~determination~~determine whether revenue should be recognized at a point in time or over time for each of ~~fair~~these ~~value~~obligations. ~~See~~The ~~Note~~new 6standard ~~for~~also ~~additional~~significantly ~~discussion~~expands disclosure requirements regarding the nature, amount, timing and uncertainty of ~~our~~revenue ~~goodwill~~and cash flows arising from contracts with customers.

~~Recoverability~~We ofadopted ~~Other~~the ~~Long-Lived~~new ~~Assets—We~~standard ~~amortize~~on ~~our~~January ~~finite-lived~~1, ~~intangible~~2018 ~~assets~~(“Adoption onDate”), ausing ~~straight-line~~the ~~basis~~modified ~~with~~retrospective ~~lives~~method, ~~ranging~~which ~~from~~provides 6for a cumulative effect adjustment to 20beginning ~~years,~~2018 ~~absent~~retained ~~any~~earnings ~~indicators~~for those uncompleted contracts impacted by the adoption of ~~impairment~~the new standard. WeThe ~~review~~changes ~~tangible~~to ~~assets~~the method and/or ~~finite-lived~~timing ~~intangible~~of ~~assets~~our ~~for~~revenue ~~impairment~~recognition ~~when~~associated ~~events~~with orour ~~changes~~adoption inof ~~circumstances~~the ~~indicate~~new ~~that~~standard ~~the~~primarily ~~carrying~~relate ~~amount~~to ~~may~~our ~~not~~third beparty ~~recoverable.~~pipe Ifand steel fabrication and “non-generic” catalyst manufacturing contracts, which were previously recognized at a ~~recoverability~~point ~~assessment~~in istime ~~required~~upon shipment; however, under the ~~estimated~~new ~~future~~standard ~~cash~~revenue ~~flow~~is ~~associated~~recognized ~~with~~over time utilizing the ~~asset~~cost orto ~~asset~~cost ~~group~~measure ~~will~~of beprogress. ~~compared~~In toaddition, ~~their~~we ~~respective~~combined ~~carrying~~certain ~~amounts~~contracts tothat ~~determine~~historically ifhad anbeen ~~impairment~~accounted ~~exists~~for as separate contracts. ~~See~~Due ~~Note~~to 6the low level of backlog at December 31, 2017 for ~~additional~~our ~~discussion~~contracts impacted by the new standard, no adjustment to beginning 2018 retained earnings resulted from adoption of ~~our~~the ~~intangible~~new ~~assets~~standard.

~~During~~Further, the ~~three~~difference ~~months~~in ~~ended~~our ~~September~~results ~~30,~~for ~~2017,~~the wefirst ~~recorded~~quarter an2018 ~~impairment~~between ~~charge~~application of ~~approximately~~the ~~$35,000~~new ~~for~~standard aon ~~fabrication~~our ~~facility~~contracts ~~within~~and ~~our~~what ~~Fabrication~~results ~~Services~~would ~~operating~~have ~~group~~been ~~that~~if ~~was~~such ~~damaged~~contracts ~~during~~had ~~Hurricane~~been ~~Harvey.~~reported ~~This~~using ~~charge~~the accounting standards previously in effect for such contracts, was ~~offset~~not bymaterial. ~~insurance~~Consistent ~~recoveries~~with ~~recorded~~our toadoption method, the ~~extent~~comparative ofprior ~~the~~period ~~charge,~~information ~~although~~for we2017 ~~anticipate~~has ~~that~~not ~~insurance~~been ~~proceeds~~recast ~~will~~and ~~ultimately~~continues ~~exceed~~to be reported using the ~~amount~~previous ofaccounting ~~our~~standards ~~impairment~~in ~~charge~~effect for the period presented. ~~Both~~Additionally, we have elected to utilize the ~~impairment~~modified ~~charge~~retrospective ~~and~~transition ~~insurance~~practical ~~recoveries~~expedient ~~were~~that ~~recorded~~allows ~~within~~us ~~other~~to ~~operating~~evaluate ~~(income)~~the ~~expense,~~impact ~~net.~~of ~~Approximately~~contract ~~$12,000~~modifications as of ~~insurance~~the ~~proceeds~~Adoption ~~had~~Date ~~been~~rather ~~received~~than asevaluating the impact of ~~September~~the ~~30,~~modifications ~~2017~~at ~~and~~the wetime ~~anticipate~~they ~~that~~occurred ~~our~~prior ~~recorded~~to ~~receivable~~the ~~amounts~~Adoption ~~will~~Date. There bewas ~~received~~no ~~during~~material effect associated with the ~~fourth~~election ~~quarter~~of ~~2017~~this practical expedient.

~~Earnings~~See ~~Per~~Note ~~Share~~3 ~~(“EPS”)—Basic EPS is calculated by dividing net income attributable to CB&I by the weighted average number of common shares outstanding~~ for ~~the~~additional ~~period.~~discussion ~~Diluted EPS reflects the assumed conversion~~ of ~~dilutive~~our ~~securities,~~revenue ~~consisting~~recognition ofaccounting ~~restricted~~policies ~~shares, performance based shares (where performance criteria have been met), stock options~~ and ~~directors’~~expanded ~~deferred-fee~~disclosures ~~shares.~~required ~~See~~by ~~Note~~the 3new ~~for calculations associated with basic and diluted EPS~~standard.

~~Cash~~Other ~~Equivalents~~New Accounting Standards—~~Cash~~In ~~equivalents~~February ~~are~~2016, ~~considered~~the toFinancial beAccounting ~~highly~~Standards ~~liquid~~Board ~~securities~~(the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which requires the recognition of a right-of-use asset and a lease liability for most lease arrangements with ~~original~~a ~~maturities~~term greater than one year, and increases qualitative and quantitative disclosures regarding leasing transactions. The standard is effective for us in the first quarter 2019, although early adoption is permitted. Transition requires application of ~~three~~the ~~months~~new orguidance ~~less~~at the beginning of the earliest comparative balance sheet period presented utilizing a modified retrospective approach. We are assessing the timing of adoption of the new standard and its potential impact on our Financial Statements.

~~Inventory—Inventory~~In isDecember ~~recorded~~2017, at the ~~lower~~SEC ofissued ~~cost~~Staff ~~and~~Accounting ~~net~~Bulletin ~~realizable~~(“SAB”) ~~value,~~118 ~~and~~to ~~cost~~address isthe ~~determined~~application ~~using~~of ~~the~~U.S. ~~first-~~GAAP in~~-first-out~~ orsituations ~~weighted-average~~in ~~cost~~which ~~method.~~a ~~The~~registrant ~~cost~~does ofnot ~~inventory~~have ~~includes~~the ~~acquisition~~necessary ~~costs~~information available, ~~production~~prepared, or ~~conversion~~analyzed ~~costs,~~(including ~~and~~computations) ~~other~~in ~~costs~~reasonable ~~incurred~~detail to ~~bring~~complete the ~~inventory~~accounting tofor acertain ~~current~~income ~~location~~tax ~~and~~effects ~~condition.~~of ~~Net~~the ~~realizable~~Tax ~~value~~Cuts isand Jobs Act (the ~~estimated~~“Tax ~~selling~~Reform ~~price~~Act”) inwhich ~~the~~was ~~ordinary~~signed ~~course~~into oflaw ~~business~~on December 22, ~~less~~2017. ~~reasonably~~In ~~predictable~~March ~~costs~~2018, ofthe ~~completion~~FASB issued ASU 2018-05, ~~disposal~~which ~~and~~amended ~~transportation~~ASC 740 to incorporate the requirements of SAB 118. AnWe ~~allowance~~recognized ~~for~~the ~~excess~~provisional ortax ~~inactive~~impacts ~~inventory~~of isthe ~~recorded~~Tax ~~based~~Reform onAct anin ~~analysis~~the ~~that~~fourth ~~considers~~quarter ~~current~~2017. ~~inventory~~During ~~levels~~first quarter 2018, ~~historical~~we ~~usage~~did ~~patterns,~~not ~~estimates~~receive ofany ~~future~~additional ~~sales~~information ~~expectations~~regarding ~~and~~these ~~salvage~~provisional ~~value~~calculations. ~~See~~As ~~Note~~a 5result, ~~for~~we ~~additional~~continue ~~discussion~~to anticipate finalizing our analysis in connection with the completion of our ~~inventory~~tax return for 2017 to be filed in 2018.

~~Foreign~~In ~~Currency—The~~January ~~nature~~2018, ofthe ~~our~~FASB ~~business~~issued ~~activities~~ASU ~~involves~~2018-02, which gives entities the ~~management~~option ofto ~~various~~reclassify ~~financial~~to ~~and~~retained ~~market~~earnings ~~risks,~~the ~~including~~tax ~~those~~effects resulting from the Tax Reform Act related to ~~changes~~items in ~~foreign~~AOCI ~~currency~~that ~~exchange~~the ~~rates.~~FASB ~~The~~refers ~~effects~~to ofas ~~translating~~having ~~financial~~been ~~statements~~stranded ofin ~~foreign~~AOCI. ~~operations~~The ~~into~~standard ~~our~~may ~~reporting~~be ~~currency~~applied ~~are~~retrospectively ~~recognized~~to aseach aperiod ~~cumulative~~in ~~translation~~the ~~adjustment~~year inof ~~accumulated~~adoption. ~~other~~The ~~comprehensive~~standard ~~income~~will ~~(loss)~~also ~~(“AOCI”),~~require ~~which~~new isdisclosures ~~net~~regarding ofour accounting policy for releasing the tax, ~~where~~effects ~~applicable~~in AOCI. ~~Foreign~~The ~~currency~~standard ~~transactional~~is ~~and~~effective ~~re-measurement~~for ~~exchange~~us ~~gains~~in ~~(losses)~~the ~~are~~first ~~included~~quarter ~~within~~2019, ~~cost~~although ofearly ~~revenue~~adoption ~~and~~is ~~were~~permitted. ~~not~~We ~~material~~are ~~for~~assessing the ~~three~~timing ~~and~~of ~~nine~~adoption ~~months~~of ~~ended~~the ~~September~~new ~~30,~~standard ~~2017~~ and ~~2016.~~its potential impact on our Financial Statements.

Financial Instruments—We do not engage in currency speculation; however, we utilize foreign currency exchange rate derivatives on an ongoing basis to hedge against certain foreign currency related operating exposures. We generally seek hedge accounting treatment for contracts used to hedge operating exposures and designate them as cash flow hedges. Therefore, gains and losses, exclusive of credit risk and forward points (which represent the time value component of the fair value of our derivative positions), are included in AOCI until the associated underlying operating exposure impacts our earnings. Changes in the fair value of (1) credit risk and forward points, (2) instruments deemed ineffective during the period, and (3) instruments that we do not designate as cash flow hedges are recognized within cost of revenue.

For those contracts designated as cash flow hedges, we document all relationships between the derivative instruments and associated hedged items, as well as our risk-management objectives and strategy for undertaking hedge transactions. This process includes linking all derivatives to specific firm commitments or highly probable forecasted transactions. We continually assess, at inception and on an ongoing basis, the effectiveness of derivative instruments in offsetting changes in the cash flow of the designated hedged items. Hedge accounting designation is discontinued when (1) it is determined that the derivative is no longer highly effective in offsetting changes in the cash flow of the hedged item, including firm commitments or forecasted transactions, (2) the derivative is sold, terminated, exercised or expires, (3) it is no longer probable that the forecasted transaction will occur, or (4) we determine that designating the derivative as a hedging instrument is no longer appropriate. See Note 10 for additional discussion of our financial instruments.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income Taxes—Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis using currently enacted income tax rates for the years in which the differences are expected to reverse3. AREVENUE ~~valuation~~RECOGNITION allowance (“VA”) is provided to offset any net deferred tax assets (“DTA(s)”) if, based on the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our net DTAs depends upon our ability to generate sufficient future taxable income of the appropriate character and in the appropriate jurisdictions.

~~Income~~Contracts—Our ~~tax~~revenue ~~and~~is ~~associated~~primarily ~~interest~~derived ~~and~~from ~~penalty~~long-term ~~reserves,~~contracts ~~where~~with ~~applicable,~~customers ~~are~~and ~~recorded in those instances where~~ we ~~consider~~determine itthe ~~more~~appropriate ~~likely~~accounting ~~than~~treatment ~~not~~for ~~that~~each ~~additional~~contract ~~tax~~at ~~will~~contract beinception. ~~due~~Our incontracts ~~excess~~primarily ofrelate ~~amounts~~to ~~reflected~~engineering, inprocurement ~~income~~and ~~tax~~construction ~~returns~~(“EPC”) ~~filed~~services; ~~worldwide,~~engineering ~~irrespective~~services; ofconstruction ~~whether~~services; wepipe ~~have~~and ~~received~~steel ~~tax~~fabrication ~~assessments.~~services; Weengineered ~~continually~~and ~~review~~manufactured ~~our~~products; ~~exposure~~technology tolicensing; ~~additional~~and ~~income~~catalyst ~~tax~~supply. ~~obligations~~An ~~and,~~EPC ascontract ~~further~~may ~~information~~also isinclude ~~known~~technology licensing or ~~events~~fabrication ~~occur,~~services ~~changes~~and in our ~~tax~~services ~~and penalty reserves~~ may be ~~recorded~~provided ~~within~~between, ~~income~~or ~~tax~~amongst, ~~expense~~our ~~and~~reportable ~~changes in interest reserves may be recorded in interest expense~~segments.

~~Partnering~~Our ~~Arrangements—In~~contracts ~~the~~are ~~ordinary~~awarded ~~course~~on ofa ~~business,~~competitively webid ~~execute~~and ~~specific~~negotiated ~~projects~~basis and ~~conduct~~the ~~certain~~timing ~~operations~~of ~~through~~revenue ~~joint~~recognition ~~venture~~may be impacted by the terms of such contracts. We use a range of contracting options, ~~consortium~~including cost-reimbursable, fixed-price and ~~other~~hybrid, ~~collaborative~~which ~~arrangements~~has ~~(collectively~~both ~~referred~~cost-reimbursable toand asfixed-price ~~“venture(s)”)~~characteristics. WeFixed-price ~~have~~contracts, ~~various~~and ~~ownership~~hybrid ~~interests~~contracts inwith ~~these~~a ~~ventures~~more significant fixed-price component, tend to provide us with ~~such~~greater ~~ownership~~control ~~typically~~over ~~proportionate~~project toschedule ~~our~~and ~~decision~~the ~~making~~timing of when work is performed and ~~distribution~~costs ~~rights~~are incurred, and accordingly, when revenue is recognized. ~~The~~Cost-reimbursable ~~ventures~~contracts, ~~generally~~and ~~contract~~hybrid ~~directly~~contracts with ~~the~~a ~~third~~more ~~party~~significant ~~customer;~~cost-reimbursable ~~however~~component, ~~services~~generally ~~may~~provide beour ~~performed~~customers ~~directly~~with bygreater influence over the ~~ventures,~~timing orof ~~may~~when bewe ~~performed~~perform byour uswork, ~~our~~and ~~partners~~accordingly, orsuch acontracts ~~combination~~often ~~thereof~~result in less predictability with respect to the timing of revenue recognition.

~~Venture~~Performance ~~net~~Obligations—A ~~assets~~performance ~~consist~~obligation ~~primarily~~is ofa ~~working~~promise ~~capital~~in a contract to transfer a distinct good or service to the customer, and ~~property~~is the unit of account in ASC Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and ~~equipment~~recognized as revenue when, ~~and~~or ~~assets~~as, ~~may~~the beperformance ~~restricted~~obligation ~~from~~is ~~being~~satisfied. ~~used~~To the extent a contract is deemed to ~~fund~~have multiple performance obligations, ~~outside~~we allocate the transaction price of the ~~venture.~~contract ~~These~~to ~~ventures~~each ~~typically~~performance ~~have~~obligation ~~limited~~using ~~third~~our ~~party~~best ~~debt~~estimate orof ~~have~~the ~~debt~~standalone ~~that~~selling isprice ~~non-recourse~~of each distinct good or service in ~~nature~~the contract. ~~However~~In addition, ~~they~~certain contracts may ~~provide~~be ~~for~~combined ~~capital~~and ~~calls~~deemed to ~~fund~~be ~~operations~~a orsingle ~~require~~performance ~~participants~~obligation. inOur ~~the~~EPC ~~venture~~contracts are generally deemed to ~~provide~~be ~~additional~~single ~~financial~~performance ~~support,~~obligations ~~including~~and ~~advance~~our ~~payment~~contracts orwith ~~retention~~multiple ~~letters~~performance obligations were not material as of ~~credit~~March 31, 2018.

~~Each~~• ~~venture~~Performance Obligations Satisfied Over Time—Revenue for our contracts that satisfy the criteria for over time recognition is ~~assessed~~recognized atas ~~inception~~the work progresses. Revenue for contracts recognized over time include our EPC services; engineering services; construction services; pipe and onsteel anfabrication ~~ongoing~~services; ~~basis~~engineered asand manufactured products; technology licensing; and “non-generic” catalyst supply. We measure transfer of control of the performance obligation utilizing the cost-to-cost ~~whether~~measure itof ~~qualifies~~progress, with cost of revenue including direct costs, such as amaterials ~~VIE~~and ~~under~~labor, and indirect costs that are attributable to contract activity. Under the ~~consolidations~~cost-to-cost ~~guidance~~approach, the use of estimated costs to complete each performance obligation is a significant variable in ~~ASC~~the ~~810.~~process Aof ~~venture~~determining ~~generally~~recognized ~~qualifies~~revenue asand is a ~~VIE~~significant ~~when~~factor itin ~~(1)~~the ~~meets~~accounting for such performance obligations. Significant estimates that impact the ~~definition~~cost to complete each performance obligation are: costs of aengineering, ~~legal~~materials, ~~entity~~components, ~~(2) absorbs~~equipment, ~~the~~labor ~~operational~~and ~~risk~~subcontracts; labor productivity; schedule durations, including subcontractor or supplier progress; contract disputes, including claims; achievement of contractual performance requirements; and contingency, among others. The cumulative impact of revisions in total cost estimates during the ~~projects~~progress ~~being~~of ~~executed~~work is reflected in the period in which these changes become known, ~~creating~~including, ato ~~variable~~the ~~interest~~extent required, the reversal of profit recognized in prior periods and ~~(3) lacks~~the ~~sufficient~~recognition ~~capital~~of ~~investment~~losses ~~from~~expected to be incurred on performance obligations in progress. Due to the ~~partners~~various estimates inherent in our contract accounting, ~~potentially~~actual ~~resulting~~results could differ from those estimates, which could result in material changes to our Financial Statements and related disclosures. For the ~~venture~~three ~~requiring~~months ~~additional~~ended ~~subordinated~~March ~~financial~~31, ~~support~~2018, ifapproximately ~~necessary~~$1,701,200 of our revenue was subject to ~~finance~~over ~~its~~time ~~future~~revenue ~~activities~~recognition.

If• atPerformance ~~any~~Obligations ~~time~~Satisfied aat ~~venture qualifies as~~ a ~~VIE,~~Point wein ~~perform~~Time—Revenue afor ~~qualitative~~our ~~assessment~~contracts tothat ~~determine~~do ~~whether~~not wesatisfy ~~are~~ the ~~primary~~criteria ~~beneficiary~~for ofover ~~the~~time ~~VIE~~recognition ~~and,~~is ~~therefore,~~recognized ~~need~~at toa ~~consolidate~~point ~~the~~in ~~VIE~~time. WeRevenue ~~are~~for ~~the~~contracts ~~primary~~recognized ~~beneficiary~~at ifa wepoint ~~have~~in ~~(1)~~time ~~the~~include ~~power~~our to“generic” ~~direct~~catalyst ~~the~~supply ~~economically~~and ~~significant~~certain ~~activities~~manufactured ofproducts ~~the VIE and~~ (2)which ~~the~~are ~~right~~recognized toupon ~~receive~~shipment) ~~benefits from,~~ and ~~obligation~~certain tonon-engineering ~~absorb~~and ~~losses~~non-construction ~~of,~~services ~~the~~(which ~~VIE. If the venture is a VIE and we~~ are ~~the~~recognized ~~primary~~when ~~beneficiary, or we otherwise have~~ the ~~ability~~services toare ~~control the venture, we consolidate the venture~~performed). IfFor ~~we determine that we are not~~ the ~~primary~~three ~~beneficiary~~months ofended ~~the~~March ~~VIE~~31, ~~or only have the ability to significantly influence~~2018, ~~rather~~approximately ~~than control the venture~~$44,400 ~~we do not consolidate the venture. We account for unconsolidated ventures using either 1) proportionate consolidation for both the Balance Sheet and Statement~~ of ~~Operations,~~our ~~when~~revenue wewas ~~meet~~subject ~~the applicable accounting criteria~~ to dopoint ~~so,~~in ortime 2)revenue ~~utilize the equity method~~recognition. ~~See Note 7 for additional discussion of our material partnering arrangements.~~

~~New~~Precontract ~~Accounting~~costs ~~Standards—In~~are ~~May~~generally ~~2014,~~charged the FASB issued Accounting Standards Update (“ASU”) 2014-09, which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current industry-specific guidance, including ASC 605-35. The new standard prescribes a five-step revenue recognition model that focuses on transfer of control and entitlement to ~~payment~~cost ~~when determining the amount~~ of revenue to be recognized. The new model requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time for each of these obligations. These concepts, as ~~well as other aspects of the ASU~~incurred, ~~may~~but ~~change~~in ~~the~~certain ~~method~~cases ~~and/or~~their ~~timing of revenue~~ recognition ~~for~~may ~~certain of our contracts, primarily associated with our fabrication and manufacturing contracts. We expect that revenue generated from our EPC and engineering services contracts will continue to~~ be ~~recognized~~deferred ~~over~~if ~~time~~specific ~~utilizing~~probability ~~the~~criteria ~~cost-to-cost~~are ~~measure of progress consistent with current practice~~met. We ~~also~~had ~~expect~~no ~~our~~significant ~~revenue~~deferred ~~recognition~~precontract ~~disclosures~~costs toat ~~significantly expand due to the new qualitative and quantitative requirements regarding the nature~~March 31, ~~amount, timing and uncertainty of revenue and cash flows arising from our contracts. We will adopt the standard, including any updates to the standard, upon its effective date in the first quarter~~ 2018 ~~utilizing the modified retrospective approach~~. This approach will result in a cumulative adjustment to beginning equity in the first quarter 2018 for uncompleted contracts impacted by the adoption of the standard. We are continuing to assess the potential impact of the new standard on our Financial Statements.

InVariable ~~February~~Consideration—Transaction ~~2016,~~price ~~the~~for ~~FASB~~our ~~issued~~contracts ~~ASU~~may ~~2016-02~~include variable consideration, which ~~requires~~includes ~~the~~increases ~~recognition~~to oftransaction aprice ~~right-of-use~~for ~~asset~~approved and aunapproved ~~lease~~change ~~liability~~orders, ~~for~~claims ~~most~~and ~~lease~~incentives, ~~arrangements~~and ~~with~~reductions ato ~~term~~transaction ~~greater~~price ~~than~~for ~~one~~liquidated ~~year~~damages. Change orders, claims and ~~increases~~incentives ~~qualitative~~are ~~and~~generally ~~quantitative~~not ~~disclosures~~distinct ~~regarding~~from ~~leasing~~the ~~transactions.~~existing ~~The~~contract ~~standard~~due isto ~~effective~~the ~~for~~significant usintegration service provided in the ~~first~~context ~~quarter~~of ~~2019,~~the ~~although~~contract ~~early~~and ~~adoption~~are isaccounted ~~permitted.~~for ~~Transition~~as ~~requires~~a ~~application~~modification of the ~~new~~existing ~~guidance~~contract and performance obligation. We estimate variable consideration for a performance obligation at the ~~beginning~~most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the ~~earliest~~amount ~~comparative~~of ~~balance~~consideration ~~sheet~~to ~~period~~which ~~presented~~we will be entitled (or will be incurred in the case of

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~utilizing~~liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a ~~modified~~significant ~~retrospective~~reversal ~~approach~~of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. WeOur estimates of variable consideration and determination of whether to include estimated amounts in transaction price are ~~assessing~~based ~~the~~largely ~~timing~~on an assessment of ~~adoption~~our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the ~~new~~transaction ~~standard~~price ~~and~~of ~~its~~a ~~potential~~performance ~~impact~~obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our ~~Financial~~favor, ~~Statements~~or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. See Note 16 for further discussion of our recorded unapproved change orders, claims and incentives.

InAccounts ~~the~~Receivable ~~first~~and ~~quarter~~Contract ~~2017,~~Balances—The timing of when we ~~adopted~~bill ~~ASU~~our ~~2015-11~~customers is generally dependent upon advance billing terms, ~~which~~milestone ~~simplifies~~billings based on the ~~subsequent~~completion ~~measurement~~of certain phases of ~~our~~the ~~inventory~~work, byor ~~requiring~~when ~~inventory~~services toare beprovided ~~measured~~or atproducts ~~the~~are ~~lower~~shipped. ofProjects ~~cost~~with ~~and~~performance ~~net~~obligations ~~realizable~~recognized ~~value.~~over ~~Net~~time ~~realizable~~that ~~value~~have iscosts ~~the~~and estimated ~~selling~~earnings ~~price~~recognized into ~~the~~date ~~ordinary~~in ~~course~~excess of ~~business~~cumulative billings, ~~less~~are ~~reasonably~~reported ~~predictable~~on our Balance Sheets as costs and estimated earnings in excess of ~~completion,~~billings ~~disposal,~~(i.e. ~~and~~contract ~~transportation~~assets). ~~Our~~Projects ~~adoption~~with ofperformance ~~the~~obligations ~~standard~~recognized ~~did~~over ~~not~~time that have acumulative ~~material~~billings ~~impact~~in excess of costs and estimated earnings recognized to date, are reported on our ~~Financial~~Balance ~~Statements~~Sheets as billings in excess of costs and estimated earnings (i.e. contract liabilities). The net balances on our Balance Sheets are collectively referred to as Contracts in Progress, net, and the components of these balances at March 31, 2018 and December 31, 2017 were as follows:

In the first quarter 2017, we adopted ASU 2016-09 on a prospective basis, which modified the accounting for excess tax benefits and tax deficiencies associated with share-based payments, amended the associated cash flow presentation, and allows for forfeitures to be either recognized when they occur, or estimated. ASU 2016-09 eliminated the requirement to recognize excess tax benefits in additional paid-in capital (“APIC”), and the requirement to evaluate tax deficiencies for APIC or income tax expense classification, and provided for these benefits or deficiencies to be recorded as an income tax expense or benefit in the Statement of Operations. Additionally, tax benefits of dividends on share-based payment awards are reflected as an income tax expense or benefit in our Statements of Operations. With these changes, tax-related cash flows resulting from share-based payments are classified as operating activities as opposed to financing, as previously presented. We have elected to recognize forfeitures as they occur, rather than estimating expected forfeitures. Our adoption of the standard did not have a material impact on our Financial Statements.



	March 31, 2018						December 31, 2017 ⁽¹⁾
	Asset			Liability			Asset			Liability
Costs and estimated earnings on contracts in progress	$	7,237,037		$	28,001,671		$	7,267,316		$	26,901,501
Billings on contracts in progress	(6,844,448		)	(29,157,451		)	(6,951,572		)	(28,176,942		)
Contracts in progress, net	$	392,589		$	(1,155,780	)	$	315,744		$	(1,275,441	)

In(1) ~~the~~Balances ~~first~~as ~~quarter 2017, we early adopted ASU 2017-04 which eliminated the second step~~ of ~~the~~December ~~goodwill~~31, ~~impairment test that required a hypothetical purchase price allocation. ASU~~ 2017~~-04~~ ~~requires~~have ~~that~~not ifbeen arecast ~~reporting unit’s carrying value exceeds its fair value, an impairment charge would be recognized~~ for the ~~excess~~impact ~~amount,~~of ~~not to exceed~~ the ~~carrying amount of goodwill. Our early~~ adoption of the ~~standard~~new ~~did not have a material impact on our Financial Statements~~standard.

During 3.the ~~EARNINGS~~three ~~PER~~months ~~SHARE~~ended March 31, 2018, we recognized revenue of approximately $688,100 that was included in the corresponding Contracts in Progress liability balance at December 31, 2017.

AAny ~~reconciliation~~uncollected ofbilled ~~weighted~~amounts ~~average~~for ~~basic~~our ~~shares~~performance ~~outstanding~~obligations torecognized ~~weighted~~over ~~average~~time, ~~diluted~~including ~~shares~~contract ~~outstanding~~retentions, are recorded within accounts receivable. At March 31, 2018 and ~~the~~December 31, ~~computation~~2017, accounts receivable included contract retentions of ~~basic~~approximately $70,000 and ~~diluted~~$61,500, ~~EPS~~respectively. Contract retentions due beyond one year were approximately $21,900 and $19,000 at March 31, 2018 and December 31, 2017, respectively. Any uncollected billed amounts and unbilled receivables for our performance obligations recognized at a point in time are asrecorded ~~follows:~~within accounts receivable and were approximately $6,900 and $6,000 at March 31, 2018 and December 31, 2017, respectively.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017			2016
Net income (loss) from continuing operations attributable to CB&I (net of $1,507, $45,729, $30,796 and $66,590 of noncontrolling interests)	$	2,978	$	87,347	$	(298,939	)	$	266,076
Net income (loss) from discontinued operations attributable to CB&I (net of $0, $930, $870 and $1,815 of noncontrolling interests)	7,061		34,413		(91,786		)	86,448
Net income (loss) attributable to CB&I	$	10,039	$	121,760	$	(390,725	)	$	352,524
Weighted average shares outstanding—basic	101,177		101,102		100,834			103,725
Effect of restricted shares/performance based shares/stock options (1)	541		746		—			816
Effect of directors’ deferred-fee shares (1)	18		15		—			14
Weighted average shares outstanding—diluted	101,736		101,863		100,834			104,555
Net income (loss) attributable to CB&I per share (Basic):
Continuing operations	$	0.03	$	0.86	$	(2.96	)	$	2.57
Discontinued operations	0.07		0.34		(0.91		)	0.83
Total	$	0.10	$	1.20	$	(3.87	)	$	3.40
Net income (loss) attributable to CB&I per share (Diluted):
Continuing operations	$	0.03	$	0.86	$	(2.96	)	$	2.54
Discontinued operations	0.07		0.34		(0.91		)	0.83
Total	$	0.10	$	1.20	$	(3.87	)	$	3.37

Our billed and unbilled revenue may be exposed to potential credit risk if our customers should encounter financial difficulties, and we maintain reserves for specifically-identified potential uncollectible receivables. At March 31, 2018 and December 31, 2017, our allowances for doubtful accounts were not material.

Backlog—Our remaining performance obligations (1hereafter referred to as “backlog”) ~~The~~represent ~~effect~~the unrecognized revenue value of ~~restricted~~our ~~shares,~~contract ~~performance~~commitments. ~~based~~New ~~shares~~awards represent the total expected revenue value of new contract commitments received during a given period, ~~stock~~as ~~options~~well ~~and~~as ~~directors’~~scope ~~deferred-fee~~growth ~~shares~~on ~~were~~existing ~~not~~contract ~~included~~commitments. inNew ~~the~~awards ~~calculation~~and ofbacklog ~~diluted~~include ~~EPS~~the entire award values for ~~the~~joint ~~nine~~ventures ~~months~~we ~~ended~~consolidate ~~September~~and ~~30,~~our ~~2017~~proportionate ~~due~~share toof award values for joint ventures we proportionately consolidate. As the net ~~loss~~results for ~~the~~our ~~period.~~equity ~~Antidilutive~~method ~~shares~~joint ~~excluded~~ventures ~~from~~are ~~diluted~~recognized ~~EPS~~as ~~were~~equity earnings, their revenue is not ~~material~~presented ~~for~~in ~~the~~our ~~three~~Statements ~~months~~of ~~ended~~Operations, ~~September~~and 30accordingly, ~~2017~~are excluded from our new awards and backlog. Our new awards may vary significantly each reporting period based on the ~~three~~timing of our major new contract commitments and ~~nine~~our ~~months~~backlog ~~ended~~may ~~September~~fluctuate 30with currency movements. At March 31, ~~2016~~2018, we had backlog of $9,369,000 (excluding approximately $1,131,500 for our unconsolidated equity method joint ventures). Approximately 50%, 35%, and 15% of our March 31, 2018 backlog is anticipated to be recognized as revenue in 2018, 2019, and thereafter, respectively

Effect of Adopting ASC Topic 606—As discussed in Note 2, no adjustment to beginning 2018 retained earnings was recorded as a result of our adoption of ASC 606 due to changes in the methods and/or timing of our revenue recognition for our uncompleted contracts. Further, the difference in our results for the first quarter 2018 between application of the new standard on our contracts and what results would have been if such contracts had been reported using the accounting standards previously in effect for such contracts, was not material.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4.Disaggregation ~~DISCONTINUED~~of ~~OPERATIONS~~Revenue—The following table represents the disaggregation of our revenue by end-market (or “product line”) for the three months ended March 31, 2018 and 2017:

Capital Services Operations



	Three Months Ended March 31,
	2018		2017
LNG (including low temp and cryogenic)	$	674,848	$	992,152
Petrochemical	538,364		376,419
Power	315,696		184,496
Refining	138,144		124,646
Gas processing	33,595		71,099
Other	44,972		78,540
Total revenue	$	1,745,619	$	1,827,352

~~Transaction~~Changes ~~Summary—~~in AsProject ~~discussed~~Estimates—See in Note 2,16 onfor ~~June~~further ~~30,~~discussion ~~2017, we completed the sale~~ of our ~~Capital~~unapproved ~~Services~~change ~~Operations as provided for by the CS Agreement entered into on February 27~~orders, ~~2017. Under the CS Agreement~~claims, ~~including~~incentives it’s amendment prior to the Closing Date, the purchase price was $700,000, subject to certain adjustments, including a working capital adjustment, whereby the purchase price would be adjusted to the extent actual working capital of the Capital Services Operations on the Closing Date differed from required working capital under the CS Agreement. After giving effect to working capital and other ~~adjustments~~project ~~estimated prior to the Closing Date of approximately $32~~matters,~~600,~~ we received cash proceeds of approximately $667,400 (approximately $645,500 net of cash sold) on the Closing Date. Based on actual working capital of the Capital Services Operations on the Closing Date, we accrued an estimate of the final post-closing working capital adjustment during the second quarter 2017, which is included within other current liabilities on our September 30, 2017 Balance Sheet. We continue to estimate that our final net proceeds will be approximately $599,000, including ~~approximately~~impacts $46,500 for transaction costs and the aforementioned post-closing working capital adjustment. As a result of the aforementioned, during the three months ended June 30, 2017, we recorded a pre-tax charge of approximately $64,800, and income tax expense of approximately $61,000 resulting from achanges ~~taxable~~in ~~gain~~project on the transaction (due primarily to the non-deductibility of goodwill). During the three months ended September 30, 2017, we recognized an income tax benefit of approximately $5,200, primarily resulting from updates to our estimates ~~of the tax effect of the disposition~~. The transaction did not result in any material cash taxes associated with the taxable gain due to the use of previously recorded net operating loss carryforwards. The proceeds received on the Closing Date were used to reduce our outstanding debt.

~~Assets~~4. ~~and~~EARNINGS ~~Liabilities—The~~PER ~~carrying~~SHARE ~~values of the major classes of assets and liabilities of the discontinued Capital Services Operations included within our Balance Sheet on December 31, 2016 were as follows:~~

	December 31, 2016
Assets
Cash	$	14,477
Accounts receivable, net	239,146
Costs and estimated earnings in excess of billings	153,275
Other assets	7,834
Current assets of discontinued operations	414,732
Property and equipment, net	59,746
Goodwill (1)	229,607
Other intangibles, net	148,440
Other assets	24,351
Non-current assets of discontinued operations	462,144
Total assets of discontinued operations	$	876,876
Liabilities
Accounts payable	$	141,028
Billings in excess of costs and estimated earnings	53,986
Other liabilities	52,455
Current liabilities of discontinued operations	247,469
Other liabilities	5,388
Non-current liabilities of discontinued operations	5,388
Total liabilities of discontinued operations	$	252,857
Noncontrolling interests of discontinued operations	$	6,874

A reconciliation of weighted average basic shares outstanding to weighted average diluted shares outstanding and the computation of basic and diluted EPS are as follows:

(1) The carrying value of goodwill for the Capital Services Operations included the impact of a $655,000 impairment charge recorded in the fourth quarter 2016 in connection with our annual impairment assessment.



	Three Months Ended March 31,
	2018		2017
Net income from continuing operations attributable to CB&I (net of $764 and $26,837 of noncontrolling interests)	$	43,894	$	15,574
Net income from discontinued operations attributable to CB&I (net of $0 and $413 of noncontrolling interests)	—		9,081
Net income attributable to CB&I	$	43,894	$	24,655

Weighted average shares outstanding—basic	102,333		100,451
Effect of restricted shares/performance based shares/stock options⁽¹⁾	275		892
Effect of directors’ deferred-fee shares ⁽¹⁾	19		17
Weighted average shares outstanding—diluted	102,627		101,360
Net income attributable to CB&I per share (Basic):
Continuing operations	$	0.43	$	0.16
Discontinued operations	—		0.09
Total	$	0.43	$	0.25
Net income attributable to CB&I per share (Diluted):
Continuing operations	$	0.43	$	0.15
Discontinued operations	—		0.09
Total	$	0.43	$	0.24


⁽¹⁾	Antidilutive shares excluded from diluted EPS were not material for the three months ended March 31, 2018 and 2017.

5. DISCONTINUED OPERATIONS

As discussed in Note 2, on June 30, 2017 we completed the sale of our Capital Services Operations to CSVC. Our Capital Services Operations provided comprehensive and integrated maintenance services, environmental engineering and remediation, construction services, program management, and disaster response and recovery services for private-sector customers and governments. We considered the Capital Services Operations to be a discontinued operation, and accordingly, its operating results for the three months ended March 31, 2017 are classified as a discontinued operation within our Statements of Operations. Cash flows of the Capital Services Operations for the three months ended March 31, 2017 are not reported separately within our Statements of Cash Flows. During the three months ended March 31, 2018, we paid approximately $24,600 to CSVC associated with the finalization of working capital adjustments required by the purchase agreement. The anticipated working capital payment was accrued on the closing date and included in our Balance Sheet as of December 31, 2017, and accordingly, there was no impact on our operating results due to the payment.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Results of Operations—The results of our Capital Services Operations, which have been reflected within discontinued operations in our Statement of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, 2017 ~~and 2016~~, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended
	2017			2016			2017			2016
	March 31, 2017
Revenue	$	—552,947		$	~~530,912~~		$	~~1,114,655~~		$	~~1,655,583~~
Cost of revenue	—518,687			~~490,758~~			~~1,047,614~~			~~1,546,823~~
Gross profit	—34,260			~~40,154~~			~~67,041~~			~~108,760~~
Selling and administrative expense	—13,038			~~14,312~~			~~29,541~~			~~39,499~~
Intangibles amortization	—2,550			~~4,030~~			~~2,550~~			~~12,260~~
Loss on net assets sold	—			—			64,817			—
Other operating income	(372		)
Other operating (income) expense	—			(1,201		)	504			(1,505		)
Income from operations	19,044
Operating income (loss) from discontinued operations	—			23,013			(30,371		)	58,506
Interest expense (1)	(6,863		)
Interest expense (1)	—			(5,989		)	(13,440		)	(17,699		)
Interest income	9
Interest income	—			302			16			916
Income from operations before taxes	12,190
Income (loss) from discontinued operations before taxes	—			17,326			(43,795		)	41,723
Income tax expense	(2,696		)
Income tax benefit (expense)	5,166			(6,236		)	(62,392		)	(15,915		)
Net income from discontinued operations	9,494
Net income (loss) from discontinued operations	5,166			11,090			(106,187		)	25,808
Net income from discontinued operations attributable to noncontrolling interests	(413		)
Net income from discontinued operations attributable to noncontrolling interests	—			(930		)	(870		)	(1,815		)
Net income from discontinued operations attributable to CB&I	$	9,081
Net income (loss) from discontinued operations attributable to CB&I	$	5,166		$	10,160		$	(107,057	)	$	23,993

(1) Interest expense, including amortization of capitalized debt issuance costs, was allocated to the Capital Services Operations due to a requirement to use the proceeds from the transaction to repay our debt. ~~Proceeds from the transaction were initially used to repay our revolving facility borrowings as of June 30, 2017.~~ The ~~revolving facility was subsequently utilized to repay a portion of our senior notes in July 2017, as described in Note 9. The~~ allocation of interest expense was based on the anticipated debt amounts to be repaid.

~~(2)~~Cash AsFlows—Cash ~~noted~~flows ~~above,~~for ~~the~~our ~~sale of the~~ Capital Services Operations ~~resulted~~for ~~in a taxable gain (due primarily to~~ the ~~non-deductibility of goodwill) resulting in tax expense of approximately $61,000 during the~~ three months ended ~~June~~March 3031, 2017. ~~During~~were ~~the~~as ~~three months ended September 30, 2017, we recognized an income tax benefit of approximately $5,200, primarily resulting from updates to our estimates of the tax effect of the disposition.~~follows:

	Nine Months Ended September 30,
	Three Months Ended
	2017			2016
	March 31, 2017
Operating cash flows	$	(3617,~~469~~544	)	$	~~52,560~~
Investing cash flows	$	(~~1,459~~844	)	$	~~(3,972~~	)

6. INVENTORY

The components of inventory at March 31, 2018 and December 31, 2017 were as follows:



	March 31, 2018		December 31, 2017
Raw materials	$	57,626	$	55,275
Work in process	22,233		15,652
Finished goods	33,119		30,646
Total	$	112,978	$	101,573

7. GOODWILL AND OTHER INTANGIBLES

Goodwill

At March 31, 2018 and December 31, 2017, our goodwill balances were $2,838,836 and $2,836,582, respectively, attributable to the excess of the purchase price over the fair value of net assets acquired in connection with our acquisitions. The change in goodwill for the three months ended March 31, 2018 is as follows:



	Total
Balance at December 31, 2017	$	2,836,582
Amortization of tax goodwill in excess of book goodwill	(3,971		)
Foreign currency translation and other	6,225
Balance at March 31, 2018 ⁽¹⁾	$	2,838,836

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Technology~~(1) At March 31, 2018, we had approximately $453,100 of cumulative impairment losses which were recorded in our Engineering & Construction operating group during 2015 related to the sale of our nuclear power construction business (our “Nuclear Operations”) on December 31, 2015.

~~Summary—~~ As discussed further in Note 2, ingoodwill ~~July~~is ~~2017~~not amortized to earnings, webut ~~initiated~~instead ais ~~plan~~reviewed tofor ~~market~~impairment ~~and~~at ~~sell~~least ~~our~~annually ~~Technology~~at ~~Operations.~~a Atreporting ~~September~~unit 30level, ~~2017,~~absent ~~the~~any ~~fair~~indicators ~~value~~ of ~~the~~impairment ~~Technology~~or ~~Operations~~when ~~substantially~~other ~~exceeded~~actions require an impairment assessment (such as a change in reporting units). We perform our annual impairment assessment during the ~~carrying~~fourth ~~value~~quarter of ~~its~~each ~~net~~year ~~assets.~~based on balances as of October 1.

~~Assets~~Reporting ~~and Liabilities~~Units—~~The~~At ~~carrying~~December 31, ~~values~~2017, ofwe ~~the~~had ~~major classes of assets and liabilities of~~ the ~~discontinued~~following ~~Technology~~four ~~Operations~~reporting ~~included~~units within our ~~Balance~~three ~~Sheets~~operating ~~on September 30, 2017 and December 31, 2016 were as follows~~groups:

	September 30, 2017			December 31, 2016
Assets
Accounts receivable, net	$	96,851		$	86,641
Costs and estimated earnings in excess of billings	59,628			80,317
Inventory	29,531			16,285
Other assets	97,041			5,801
Equity investments	122,427			—
Property and equipment, net	70,048			—
Goodwill (1)	497,024			—
Other intangibles, net	131,338			—
Current assets of discontinued operations	1,103,888			189,044
Equity investments	—			129,715
Property and equipment, net	—			71,692
Goodwill (1)	—			498,465
Other intangibles, net	—			139,273
Other assets	—			81,415
Non-current assets of discontinued operations	—			920,560
Total assets of discontinued operations	$	1,103,888		$	1,109,604
Liabilities
Accounts payable	$	103,988		$	99,916
Billings in excess of costs and estimated earnings	162,308			176,525
Other liabilities	83,044			38,707
Current liabilities of discontinued operations	349,340			315,148
Other liabilities	—			32,902
Non-current liabilities of discontinued operations	—			32,902
Total liabilities of discontinued operations	$	349,340		$	348,050
Accumulated other comprehensive loss	$	(14,283	)	$	(13,252	)


•	Engineering & Construction—Our Engineering & Construction operating group represented a reporting unit.

~~(1)~~• ~~Goodwill~~Fabrication ~~allocated~~Services—Our toFabrication ~~the~~Services ~~discontinued~~operating ~~Technology~~group ~~Operations~~included istwo ~~comprised of all the goodwill of our former Technology~~ reporting ~~unit~~units: ~~(approximately~~Engineered ~~$297,000),~~Products and ~~an allocation of goodwill from our~~ Fabrication Services ~~reporting unit~~ (~~approximately~~excluding ~~$200,000),~~Engineered ~~as discussed in Note 6~~Products).


•	Technology—Our Technology operating group represented a reporting unit.

During the first quarter 2018, we realigned our Fabrication Services and Technology operating groups to reflect the present management oversight of our operations. Our “Engineered Products Operations”, which was previously reported within our Fabrication Services operating group, is now reported within our Technology operating group. In connection therewith, our Engineered Products reporting unit, which was previously a reporting unit with our Fabrication Services operating group, became a reporting unit within our Technology operating group. Accordingly, at March 31, 2018, we had the following four reporting units within our three operating groups:


•	Engineering & Construction—Our Engineering & Construction operating group represented a reporting unit.


•	Fabrication Services—Our Fabrication Services operating group represented a reporting unit.


•	Technology—Our Technology operating group included two reporting units: Engineered Products and Technology (excluding Engineered Products).

Impairment Assessment—During the fourth quarter 2017, we performed a quantitative assessment of goodwill for the aforementioned reporting units. Based on these quantitative assessments, the fair value of each of the reporting units substantially exceeded (in excess of 50%) their respective net book values, and accordingly, no impairment charge was necessary as a result of our impairment assessments. Further, during the first quarter 2018, no indicators of impairment were identified for any of our reporting units. In addition, no impairment assessments were required in connection with the realignment of our operating groups because the Engineered Products reporting unit represented a separate reporting unit before and after the realignment.

Other Intangible Assets

The following table presents our acquired finite-lived intangible assets at March 31, 2018 and December 31, 2017, including the March 31, 2018 weighted-average useful lives for each major intangible asset class and in total:



		March 31, 2018					December 31, 2017
	Weighted Average Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Backlog and customer relationships	18 Years	$	99,086	$	(28,297	)	$	99,086	$	(26,912	)
Process technologies	15 Years	267,520		(156,773		)	265,742		(151,174		)
Tradenames	12 Years	27,561		(18,621		)	27,479		(17,748		)
Total ⁽¹⁾	16 Years	$	394,167	$	(203,691	)	$	392,307	$	(195,834	)


⁽¹⁾	The decrease in other intangibles, net during the three months ended March 31, 2018 primarily related to amortization expense of approximately $6,600.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Results~~8. ofPARTNERING ~~Operations—The~~ARRANGEMENTS results of our Technology Operations, which have been reflected within discontinued operations in our Statement of Operations for the three and nine months ended September 30, 2017 and 2016, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue	$	170,143		$	183,321		$	454,840		$	491,858
Cost of revenue	103,345			113,890			281,870			301,239
Gross profit	66,798			69,431			172,970			190,619
Selling and administrative expense	8,991			10,589			27,079			33,436
Intangibles amortization	1,520			4,518			10,503			13,545
Equity earnings	(4,879		)	(1,609		)	(9,662		)	(8,030		)
Other operating expense	8			—			38			4
Operating income from discontinued operations	61,158			55,933			145,012			151,664
Interest expense (1)	(55,512		)	(18,858		)	(110,579		)	(56,039		)
Interest income	—			14			—			53
Income from discontinued operations before taxes	5,646			37,089			34,433			95,678
Income tax expense	(3,751		)	(12,836		)	(19,162		)	(33,223		)
Net income from discontinued operations	1,895			24,253			15,271			62,455
Net income from discontinued operations attributable to noncontrolling interests	—			—			—			—
Net income from discontinued operations attributable to CB&I	$	1,895		$	24,253		$	15,271		$	62,455

As discussed in Note 2, we account for our unconsolidated ventures using either proportionate consolidation, when we meet the applicable accounting criteria to do so, or the equity method. Further, we consolidate any venture that is determined to be a VIE for which we are the primary beneficiary, or which we otherwise effectively control.

~~(1)~~Proportionately ~~Interest~~Consolidated ~~expense,~~Ventures—The ~~including~~following ~~amortization~~is ~~of capitalized debt issuance costs, was allocated to the Technology Operations due to~~ a ~~requirement~~summary todescription ~~use~~of ~~the proceeds from the transaction to repay~~ our ~~debt.~~significant ~~The~~joint ~~allocation~~ventures ofthat ~~interest~~have ~~expense~~been ~~was~~accounted ~~based on the anticipated debt amounts to be repaid. Allocated interest expense increased~~ for ~~both~~using ~~the~~proportionate three and nine months ended September 30, 2017 compared to the respective 2016 periods due to higher revolving credit facility borrowings, higher interest rates and increased amortization expense. The increase in amortization expense resulted from the accelerated amortization of capitalized debt issuance costs resulting from the requirement to use the proceeds from the transaction to repay our debt.consolidation:

~~Cash~~• ~~Flows~~CB&I/Zachry—~~Cash~~We ~~flows~~have ~~for~~a ~~our~~venture ~~Technology~~with ~~Operations~~Zachry (CB&I—50% / Zachry—50%) to perform EPC work for two liquefied natural gas (“LNG”) liquefaction trains in Freeport, Texas. Our proportionate share of the ~~nine~~venture ~~months~~project ~~ended~~value ~~September~~is 30approximately $2,700,000. ~~2017~~In addition, we have subcontract and ~~2016~~risk ~~were~~sharing asarrangements ~~follows:~~with Chiyoda to support our responsibilities to the venture. The costs of these arrangements are recorded in cost of revenue.

	Nine Months Ended September 30,
	2017			2016
Operating cash flows	$	29,820		$	15,967
Investing cash flows	$	(3,856	)	$	(48,006	)


•	CB&I/Zachry/Chiyoda—We have a venture with Zachry and Chiyoda (CB&I—33.3% / Zachry—33.3% / Chiyoda—33.3%) to perform EPC work for an additional LNG liquefaction train at the aforementioned project site in Freeport, Texas. Our proportionate share of the venture project value is approximately $675,000.

~~Partnering~~• ~~Arrangements~~CB&I/Chiyoda—~~Our~~We ~~Technology~~have ~~Operations has~~ a venture with ~~Chevron~~Chiyoda (CB&I—50% / ~~Chevron~~Chiyoda—50%) ~~(“Chevron-Lummus~~to ~~Global”~~perform orEPC ~~“CLG”)~~work ~~which~~for ~~provides~~three ~~proprietary~~LNG ~~process~~liquefaction ~~technology~~trains ~~licenses~~in ~~and~~Hackberry, ~~associated~~Louisiana. ~~engineering~~Our ~~services~~proportionate ~~and~~share ~~catalyst,~~of ~~primarily for~~ the ~~refining~~venture ~~industry.~~project ~~The~~value ~~venture~~ is ~~accounted~~approximately ~~for using the equity method~~$3,300,000.

5.The ~~INVENTORY~~following table presents summarized balance sheet information for our share of our proportionately consolidated ventures:

The components of inventory at September 30, 2017 and December 31, 2016 were as follows:



	March 31, 2018		December 31, 2017
CB&I/Zachry
Current assets ⁽¹⁾	$	157,950	$	140,900
Non-current assets	427		1,096
Total assets	$	158,377	$	141,996
Current liabilities	$	150,538	$	171,953
CB&I/Zachry/Chiyoda
Current assets ⁽¹⁾	$	102,379	$	98,680
Non-current assets	923		1,129
Total assets	$	103,302	$	99,809
Current liabilities	$	41,002	$	68,556
CB&I/Chiyoda
Current assets ⁽¹⁾	$	108,998	$	92,767
Current liabilities	$	178,342	$	150,126

	September 30, 2017		December 31, 2016
Raw materials	$	60,194	$	58,261
Work in process	8,854		48,011
Finished goods	27,386		67,545
Total	$	96,434	$	173,817

⁽¹⁾

Our venture arrangements allow for excess working capital of the ventures to be advanced to the venture partners. Such advances are returned to the ventures for working capital needs as necessary. Accordingly, at a reporting period end a venture may have advances to its partners which are reflected as an advance receivable within current assets of the venture. At March 31, 2018 and December 31, 2017, other current assets of our ventures on the Balance Sheets included approximately $80,600 and $138,900, respectively, related to our proportionate share of advances from the ventures to our venture partners.

At March 31, 2018 and December 31, 2017, other current liabilities on the Balance Sheets included approximately $79,000 and $138,600, respectively, related to advances to CB&I from the ventures.

Equity Method Ventures—The following is a summary description of our significant joint ventures which have been accounted for using the equity method:


•	CLG—We have a venture with Chevron (CB&I—50% / Chevron—50%) which provides proprietary process technology licenses and associated engineering services and catalyst, primarily for the refining industry. As sufficient capital investments in CLG have been made by the venture partners, it does not qualify as a VIE.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6• NET Power—We have a venture with Exelon and 8 Rivers Capital (CB&I—33.3% ~~GOODWILL~~/ ~~AND~~Exelon—33.3% ~~OTHER~~/ ~~INTANGIBLES~~8 Rivers Capital—33.3%) to commercialize a new natural gas power generation system that recovers the carbon dioxide produced during combustion. NET Power is building a first-of-its-kind demonstration plant which is being funded by contributions and services from the venture partners and other parties. We have determined the venture to be a VIE; however, we do not effectively control NET Power and therefore do not consolidate it. Our cash commitment for NET Power totals $57,300, and at March 31, 2018, we had made cumulative investments totaling approximately $47,300.

~~Goodwill~~• CB&I/CTCI—AtWe ~~September 30,~~have ~~2017~~a venture with CTCI (CB&I—50% / CTCI—50%) to perform EPC work for a liquids ethylene cracker and ~~December 31,~~associated ~~2016~~units in Sohar, ~~our~~Oman. ~~goodwill~~We ~~balances~~have ~~were~~determined $2the venture to be a VIE; however,~~339,054~~ we do not effectively control the venture and therefore do not consolidate it. Our proportionate share of the venture project value is approximately $21,~~315~~400,~~338,~~000. ~~respectively,~~Our ~~attributable~~venture toarrangement ~~the~~allows for excess working capital of the ~~purchase~~venture ~~price~~to ~~over~~be advanced to the ~~fair~~venture ~~value~~partners. ofSuch ~~net~~advances ~~assets~~are ~~acquired~~returned into ~~connection~~the ~~with~~venture ~~our~~for ~~acquisitions.~~working ~~The~~capital ~~change~~needs inas ~~goodwill~~necessary. ~~for~~At ~~the~~March ~~nine~~31, ~~months~~2018 ~~ended~~and ~~September~~December 3031, 2017, isother ascurrent ~~follows:~~liabilities included approximately $95,000 and $173,600, respectively, related to advances to CB&I from the venture.

	Total
Balance at December 31, 2016	$	2,315,338
Foreign currency translation and other	23,803
Amortization of tax goodwill in excess of book goodwill	(87		)
Balance at September 30, 2017 (1)	$	2,339,054

Consolidated Ventures—The following is a summary description of our significant joint ventures we consolidate due to their designation as VIEs for which we are the primary beneficiary:

• CB&I/Kentz—We have a venture with Kentz (1CB&I—65% / Kentz—35%) Atto ~~September~~perform 30the structural, ~~2017~~mechanical, wepiping, ~~had~~electrical ~~approximately~~and ~~$453~~instrumentation work on,~~100~~ ofand ~~cumulative~~to ~~impairment~~provide ~~losses~~commissioning ~~which~~support ~~were~~for, ~~recorded~~three inLNG ~~our~~trains, ~~Engineering~~including &associated ~~Construction~~utilities ~~operating~~and ~~group~~a ~~during~~gas ~~2015~~processing ~~related~~and tocompression plant, for the ~~sale~~Gorgon ofLNG ~~our~~project, ~~nuclear~~located ~~power~~on ~~construction~~Barrow ~~business~~Island, ~~(our~~Australia. ~~“Nuclear~~Our ~~Operations”)~~venture onproject value is approximately $5,900,000 and the project was substantially complete as of December 31, ~~2015~~2017.

As• ~~discussed~~CB&I/Orano ~~further~~(formerly inAREVA)—We ~~Note~~have ~~2, goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually at~~ a ~~reporting~~venture ~~unit~~with ~~level,~~Orano ~~absent any indicators of impairment or when other actions require an impairment assessment~~ (~~such~~CB&I—52% as/ ~~a change in reporting units~~Orano—48%). Weto ~~perform our annual impairment assessment during the fourth quarter of each year based on balances as of October 1. At December 31~~design, ~~2016,~~license and ~~prior~~construct toa ~~the~~mixed ~~recognition~~oxide offuel ~~our~~fabrication ~~Capital~~facility ~~Services~~in ~~Operations and Technology Operations as discontinued operations (discussed below)~~Aiken, weSouth ~~had~~Carolina. ~~the~~Our ~~following~~venture ~~five~~project ~~reporting~~value ~~units~~is ~~within~~approximately ~~our four operating groups:~~$6,000,000.

•The ~~Engineering~~following &table ~~Construction—Our~~presents ~~Engineering~~summarized &balance ~~Construction~~sheet ~~operating~~information ~~group~~for ~~represented~~our aconsolidated ~~reporting unit, and continued to represent a reporting unit at September 30, 2017.~~ventures:

• Fabrication Services—Our Fabrication Services operating group represented a reporting unit. This reporting unit included our Engineered Products Operations, which were included within our Technology Operations and classified as a discontinued operation during the third quarter 2017 (discussed below). Fabrication Services, excluding our discontinued Engineered Products Operations, continued to represent a reporting unit at September 30, 2017.



	March 31, 2018		December 31, 2017
CB&I/Kentz
Current assets	$	24,653	$	23,061
Non-current assets	69,840		71,023
Total assets	$	94,493	$	94,084
Current liabilities	$	31,373	$	30,082
CB&I/Orano
Current assets	$	10,254	$	32,621
Non-current assets	56,611		—
Total assets	$	66,865	$	32,621
Current liabilities	$	53,699	$	57,820
All Other ⁽¹⁾
Current assets	$	20,823	$	26,551
Non-current assets	15,238		15,753
Total assets	$	36,061	$	42,304
Current liabilities	$	6,743	$	10,404

•(1) ~~Technology—Our~~Other ~~Technology~~ventures ~~operating~~that ~~group~~we ~~represented~~consolidate aare ~~reporting~~not ~~unit.~~individually ~~This~~material ~~reporting~~to ~~unit was included within~~ our ~~Technology~~financial ~~Operations~~results and ~~classified~~are astherefore aaggregated ~~discontinued~~as ~~operation~~“All ~~during the third quarter 2017 (discussed below)~~Other”.

•Other—The ~~Capital~~use ~~Services—Our~~of ~~Capital~~these ~~Services~~ventures ~~operating~~exposes ~~group~~us ~~included~~to ~~two~~a ~~reporting~~number ~~units:~~of ~~Facilities~~risks, &including ~~Plant~~the ~~Services~~risk ~~and~~that ~~Federal~~our ~~Services.~~partners ~~These~~may ~~reporting~~be ~~units~~unable ~~were~~or ~~included~~unwilling ~~within~~to provide their share of capital investment to fund the operations of the venture or complete their obligations to us, the venture, or ultimately, our ~~Capital~~customer. ~~Services~~Differences ~~Operations~~in opinions or views among venture partners could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and ~~classified~~operations asof athe ~~discontinued~~venture. ~~operation~~In ~~during~~addition, agreement terms may subject us to joint and several liability for our venture partners, and the ~~first~~failure ~~quarter~~of ~~2017~~our venture partners to perform their obligations could impose additional performance and ~~sold~~financial obligations on ~~June~~us. ~~30,~~The ~~2017~~aforementioned ~~(discussed~~factors could result in ~~Note~~unanticipated 1costs ~~and~~to ~~Note~~complete 4)the projects, liquidated damages or contract disputes, including claims against our partners.

Annual Impairment Assessment—During the fourth quarter 2016, we performed a quantitative assessment of goodwill for the aforementioned reporting units. Based on these quantitative assessments, the fair value of the Engineering & Construction, Fabrication Services and Technology reporting units each substantially exceeded their respective net book values, and accordingly, no impairment charge was necessary as a result of our impairment assessments. However, the net book values of the Facilities & Plant Services and Federal Services reporting units exceeded their respective fair values and an impairment charge was recorded. Accordingly, the fair value of these reporting units approximated their respective net book values subsequent to the goodwill impairments.

Interim Impairment Assessment—During the second quarter 2017, we experienced a decline in our market capitalization and incurred charges on certain projects (as discussed further in Note 15) within our Engineering & Construction reporting unit that resulted in a net loss for the three and six months ended June 30, 2017. We believed these events and circumstances were indicators that goodwill of our Engineering & Construction reporting unit was potentially impaired. Accordingly, we performed a quantitative assessment of goodwill for our Engineering & Construction reporting unit as of June 30, 2017. Based on this quantitative assessment, the fair value of the Engineering & Construction reporting unit continued to substantially exceed its net book value, and accordingly, no impairment charge was necessary as a result of our interim impairment assessment. There were no additional indicators of impairment during the three or nine months ended September 30, 2017. If we were to experience an additional decline in our market capitalization, or a prolonged market capitalization at our current levels, it could indicate that the goodwill of one or more of our reporting units is impaired, and require additional interim quantitative impairment assessments. If, based on future assessments our goodwill is deemed to be impaired, the impairment would result in a charge to

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~earnings in the period of impairment~~9. ~~There~~RESTRUCTURING ~~can~~RELATED ~~be no assurance that future goodwill impairment tests will not result in charges to earnings.~~ COSTS

~~Discontinued Operations Assessment—~~During the ~~third~~three ~~quarter~~months ~~2017,~~ended weMarch classified our Technology Operations as a discontinued operation (discussed in Note 1 and Note 4). Our Technology Operations are primarily comprised of our former Technology operating group and reporting unit and our Engineered Products Operations31, representing a portion of our Fabrication Services operating group and reporting unit. As a result of the classification of our Technology reporting unit as part of our Technology Operations within discontinued operations2018, ~~all~~we ofrecognized ~~its goodwill (~~approximately $~~297~~5,~~000)~~100 ~~was allocated to our Technology Operations. Further, as a result~~ of ~~the~~restructuring ~~classification~~related ofcosts ~~our~~associated ~~Engineered~~with ~~Products~~professional ~~Operations~~fees asand ~~part~~severance ~~of our Technology Operations within discontinued operations~~costs, weresulting ~~allocated~~primarily afrom ~~portion~~our ofpublicly ~~the~~announced ~~Fabrication~~cost ~~Services reporting unit’s goodwill (approximately $200~~reduction,~~000)~~ tofacility ~~our~~rationalization ~~Technology Operations. The allocation was based on the relative fair values of the Engineered Products Operations~~ and ~~remaining~~strategic ~~Fabrication~~initiatives, ~~Services~~as ~~reporting~~described ~~unit after removal of the Engineered Products Operations~~below.

~~The~~Professional ~~fair~~Fees—Professional ~~value~~fees oftotaled ~~the~~approximately ~~Engineered~~$3,800 ~~Products~~for ~~Operations was determined on a basis consistent with~~ the ~~basis~~three ~~used~~months ~~for~~ended ~~our~~March ~~annual~~31, ~~impairment~~2018, ~~assessment~~nearly ~~(discussed~~all ~~in Note 2) and gave consideration to a market indicator~~ of ~~fair~~which ~~value~~were ~~for~~paid ~~the~~during ~~Technology Operations. The fair value of~~ the ~~remaining~~period, ~~Fabrication~~and ~~Services~~were ~~reporting~~related ~~unit~~to ~~was~~consulting, ~~also~~legal, ~~determined~~audit onand aadvisory ~~basis~~related ~~consistent~~services associated with ~~the basis used for~~ our ~~annual~~strategic ~~impairment assessment. Based on the aforementioned~~initiatives, ~~the~~including ~~fair~~costs ~~value~~associated ofwith the ~~remaining~~anticipated ~~Fabrication~~Combination. ~~Services~~See ~~reporting~~Note ~~unit~~2 ~~continued~~for tofurther ~~substantially~~discussion ~~exceed its net book value, and accordingly, no impairment charge was necessary as a result~~ of the ~~removal of the Engineered Products Operations~~Combination.

~~Other~~Severance ~~Intangible~~Costs ~~Assets~~and Employee Related Obligations—~~The~~Severance ~~following~~costs ~~table~~totaled ~~presents~~approximately ~~our~~$1,300 ~~acquired~~for ~~finite-lived~~the ~~intangible~~three ~~assets~~months ended March 31, 2018, nearly all of which were paid during the period. At March 31, 2018 and December 31, 2017, we had a liability of approximately $4,000 and $8,500, respectively, for the unpaid portion of severance costs (as well as incentive plan costs at ~~September 30~~December 31, 2017) accrued during 2017, which has been reflected within other current liabilities. At March 31, 2018 and December 31, ~~2016~~2017, ~~including~~we ~~the~~also ~~September 30~~had a liability of approximately $17,000 associated with union employee related obligations accrued during 2017 ~~weighted-average~~resulting ~~useful~~from ~~lives~~facility ~~for~~closures. ~~each~~The ~~major~~union ~~intangible~~employee ~~asset~~related ~~class~~obligations are expected to be paid over an extended period of time and inhave ~~total:~~been reflected within other non-current liabilities.

		September 30, 2017					December 31, 2016
	Weighted Average Life	Gross CarryingAmount		AccumulatedAmortization			Gross CarryingAmount		AccumulatedAmortization
Backlog and customer relationships	18 Years	$	93,700	$	(23,958	)	$	93,700	$	(20,073	)
Process technologies	20 Years	400		(93		)	400		(78		)
Tradenames	6 Years	15,718		(11,402		)	15,718		(9,531		)
Total (1)	17 Years	$	109,818	$	(35,453	)	$	109,818	$	(29,682	)

Facility Consolidation Obligations—At March 31, 2018 and December 31, 2017, we had a facility realignment liability related to reserves recorded during 2017 for future operating lease expense for vacated leased facility capacity where we remain contractually obligated to a lessor. The liability for future lease obligations was reflected within other current and non-current liabilities, as applicable, based upon the anticipated timing of payments. The following table summarizes the changes in the facility consolidation liability during the three months ended March 31, 2018:

(1) The decrease in other intangibles, net during the nine months ended September 30, 2017 related to amortization expense of approximately $5,800.



	Total
Balance at December 31, 2017	$	15,606
Charges	—
Cash payments	(2,101		)
Foreign exchange and other	673
Balance at March 31, 2018 ⁽¹⁾	$	14,178

7.(1) ~~PARTNERING~~Cash ~~ARRANGEMENTS~~payments for our existing obligations at March 31, 2018 are anticipated to be approximately $5,200, $2,900, $2,400, $2,000, $1,600 and $100 in 2018, 2019, 2020, 2021, 2022, and thereafter, respectively.

~~As discussed in Note 2, we account for our unconsolidated ventures using either proportionate consolidation, when we meet the applicable accounting criteria to do so, or the equity method~~10. ~~Further, we consolidate any venture that is determined to be a VIE for which we are the primary beneficiary, or which we otherwise effectively control.~~DEBT

~~Proportionately~~Our ~~Consolidated~~outstanding ~~Ventures—The~~debt ~~following~~at isMarch 31, a2018 ~~summary~~and ~~description~~December 31, of2017 ~~our~~was ~~significant~~as ~~joint ventures that have been accounted for using proportionate consolidation~~follows:

• CB&I/Zachry—We have a venture with Zachry (CB&I—50% / Zachry—50%) to perform EPC work for two liquefied natural gas (“LNG”) liquefaction trains in Freeport, Texas. Our proportionate share of the venture project value is approximately $2,700,000. In addition, we have subcontract and risk sharing arrangements with Chiyoda to support our responsibilities to the venture. The costs of these arrangements are recorded in cost of revenue.



	March 31, 2018			December 31, 2017
Current
Revolving facilities and other short-term borrowings	$	1,388,151		$	1,102,151

Current maturities of long-term debt	1,148,469			1,167,219
Less: unamortized debt issuance costs	(3,111		)	(6,928		)
Current maturities of long-term debt, net of unamortized debt issuance costs	1,145,358			1,160,291
Current debt, net of unamortized debt issuance costs	$	2,533,509		$	2,262,442
Long-Term
Second Term Loan: $500,000 term loan (interest at LIBOR plus a floating margin)	$	421,996		$	440,746
Senior Notes: $800,000 senior notes, series A-D (fixed interest ranging from 7.57% to 9.15%)	584,596			584,596
Second Senior Notes: $200,000 senior notes (fixed interest of 7.53%)	141,877			141,877
Less: current maturities of long-term debt	(1,148,469		)	(1,167,219		)
Long-term debt, net of unamortized debt issuance costs	$	—		$	—

• CB&I/Zachry/Chiyoda—We have a venture with Zachry and Chiyoda (CB&I—33.3% / Zachry—33.3% / Chiyoda—33.3%) to perform EPC work for an additional LNG liquefaction train at the aforementioned project site in Freeport, Texas. Our proportionate share of the venture project value is approximately $675,000.

• CB&I/Chiyoda—We have a venture with Chiyoda (CB&I—50% / Chiyoda—50%) to perform EPC work for three LNG liquefaction trains in Hackberry, Louisiana. Our proportionate share of the venture project value is approximately $3,200,000.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~The~~Committed ~~following~~Facilities—We ~~table~~have ~~presents~~a ~~summarized~~five-year, ~~balance~~$1,150,000 ~~sheet~~committed ~~information~~revolving ~~for~~credit ~~our~~facility ~~share~~(the “Revolving Facility”) with Bank of ~~our~~America ~~proportionately~~N.A. ~~consolidated~~(“BofA”), ~~ventures~~as atadministrative ~~September 30~~agent, ~~2017~~and BNP Paribas Securities Corp., BBVA Compass, Credit Agricole Corporate and ~~December~~Investment Bank (“Credit Agricole”) and TD Securities, each as syndication agents, which expires in October 2018. The Revolving Facility has a $100,000 total letter of credit sublimit. At March 31, ~~2016:~~2018, we had $847,402 and $71,891 of outstanding borrowings and letters of credit, respectively, under the facility (including $45 of financial letters of credit), providing $227,101 of available capacity, of which $28,109 was available for letters of credit based on our total letter of credit sublimit.

	September 30, 2017		December 31, 2016
CB&I/Zachry
Current assets (1)	$	224,611	$	260,934
Non-current assets	1,887		3,204
Total assets	$	226,498	$	264,138
Current liabilities (1)	$	315,082	$	379,339
CB&I/Zachry/Chiyoda
Current assets (1)	$	115,875	$	84,279
Non-current assets	1,334		1,969
Total assets	$	117,209	$	86,248
Current liabilities (1)	$	92,445	$	73,138
CB&I/Chiyoda
Current assets (1)	$	99,269	$	337,479
Current liabilities (1)	$	123,884	$	150,179

We also have a five-year, $800,000 committed revolving credit facility (the “Second Revolving Facility”) with BofA, as administrative agent, and BNP Paribas Securities Corp., BBVA Compass, Credit Agricole and Bank of Tokyo Mitsubishi UFJ, each as syndication agents, which expires in July 2020. The Second Revolving Facility has a $100,000 total letter of credit sublimit. At March 31, 2018, we had $540,749 of outstanding borrowings and $99,494 of outstanding letters of credit under the facility (including $2,705 of financial letters of credit), providing $157,129 of available capacity, of which $506 was available for letters of credit based on our total letter of credit sublimit.

~~(1)~~Maximum ~~Our~~outstanding ~~venture~~borrowings ~~arrangements~~under ~~allow~~our ~~for~~Revolving ~~excess~~Facility ~~working~~and ~~capital~~Second ofRevolving Facility (together, “Committed Facilities”) during the ~~ventures~~three tomonths beended ~~advanced~~March to31, ~~the~~2018, ~~venture~~were ~~partners~~approximately $1,700,000. ~~Such~~We ~~advances~~ are ~~returned~~assessed toquarterly commitment fees on the ~~ventures~~unutilized ~~for~~portion ~~working~~of ~~capital~~the ~~needs~~facilities as ~~necessary.~~well ~~Accordingly,~~as atletter aof ~~reporting~~credit ~~period~~fees ~~end~~on aoutstanding ~~venture~~letters ~~may~~of ~~have~~credit. ~~advances~~Interest toon ~~its~~borrowings ~~partners~~is ~~which~~assessed ~~are~~at ~~reflected~~either asprime anplus ~~advance~~4.00% ~~receivable~~or ~~within~~LIBOR ~~current~~plus ~~assets~~5.00%. In addition, fees for financial and performance letters of ~~the~~credit ~~venture~~are 5.00% Atand ~~September 30~~3.50%, ~~2017~~respectively. ~~and~~During ~~December~~the three months ended March 31, ~~2016~~2018, ~~other~~our ~~current~~weighted ~~assets~~average interest rate on borrowings under the ~~Balance~~Revolving ~~Sheets~~Facility ~~included~~and Second Revolving Facility was approximately ~~$233,800~~6.89% and ~~$374~~8.02%,~~800,~~ respectively, ~~related~~inclusive toof ~~our~~the ~~proportionate~~applicable ~~share~~floating margin. As a result of ~~advances~~the ~~from~~2017 amendments described below, our debt obligations under the ~~ventures~~Committed Facilities are required to ~~our~~be ~~venture~~repaid ~~partners,~~in ~~and~~connection ~~other~~with ~~current~~the ~~liabilities~~consummation ~~included~~of ~~approximately~~the ~~$254,300~~Combination. ~~and~~The ~~$394,400,~~Committed ~~respectively,~~Facilities ~~related~~have tofinancial ~~advances~~and torestrictive ~~CB&I~~covenants ~~from~~described ~~the~~further ~~ventures~~below.

~~Equity~~Uncommitted ~~Method Ventures~~Facilities—~~The~~We ~~following~~have isvarious ashort-term, ~~summary~~uncommitted ~~description~~letter of ~~our~~credit ~~significant~~facilities ~~joint~~(the ~~ventures~~“Uncommitted Facilities”) across several geographic regions, under which ~~have~~we ~~been~~had ~~accounted~~$1,599,404 ~~for~~of ~~using~~outstanding ~~the~~letters ~~equity~~of ~~method:~~credit as of March 31, 2018.

•Term ~~NET Power~~Loan—WeAt ~~have~~March 31, a2018, ~~venture~~we ~~with~~had ~~Exelon~~$421,996 ~~and~~outstanding 8under ~~Rivers~~a ~~Capital~~five-year, $500,000 term loan (~~CB&I—33.3%~~the /“Term ~~Exelon—33.3%~~Loan”) /with 8BofA ~~Rivers~~as ~~Capital—33~~administrative agent.~~3%)~~ toInterest ~~commercialize~~and aprincipal ~~new~~under ~~natural~~the ~~gas~~Term ~~power~~Loan ~~generation~~is ~~system~~payable ~~that~~quarterly ~~recovers~~in ~~the~~arrears, ~~carbon~~and ~~dioxide~~interest ~~produced~~is ~~during~~assessed ~~combustion~~at either prime plus 4.00% ~~NET~~or ~~Power~~LIBOR isplus ~~building~~5.00%. aDuring ~~first-of-its-kind~~the ~~demonstration~~three ~~plant~~months ~~which~~ended isMarch ~~being~~31, ~~funded~~2018, byour ~~contributions~~weighted ~~and~~average ~~services~~interest ~~from~~rate on the ~~venture~~Term ~~partners~~Loan ~~and~~was ~~other~~approximately ~~parties~~7.10%, Weinclusive ~~have~~of ~~determined~~ the ~~venture~~applicable tofloating bemargin. aFuture ~~VIE;~~annual ~~however,~~maturities wefor dothe ~~not~~Term ~~effectively~~Loan ~~control~~are ~~NET~~$56,250, ~~Power~~$75,000 and ~~therefore~~$290,746 dofor ~~not~~2018, ~~consolidate~~2019 itand 2020, respectively. ~~During~~As ~~the~~a ~~three~~result ~~months~~of ~~ended~~the 2017, weamendments ~~made~~described below, our ~~final~~debt ~~payment~~obligations ofunder ~~$2,400~~the ~~toward~~Term ~~our~~Loan ~~total~~are ~~cash~~required ~~commitment~~to ~~for~~be ~~NET~~repaid ~~Power~~in connection with the consummation of ~~$47,300~~the Combination. The Term Loan has financial and restrictive covenants described further below.

•Senior ~~CB&I/CTCI~~Notes—We have a ~~venture~~series with CTCI (CB&I—50% / CTCI—50%) to perform EPC work for a liquids ethylene cracker and associated units in Sohar, Oman. We have determined the venture to be a VIE; however, we do not effectively control the venture and therefore do not consolidate it. Our proportionate share of ~~the~~senior ~~venture~~notes ~~project~~totaling ~~value is approximately~~ $1584,~~400,000.~~596 ~~Our~~in ~~venture~~aggregate ~~arrangement~~principal ~~allows~~amount ~~for~~outstanding ~~excess~~as ~~working capital~~ of ~~the~~March 31, ~~venture~~2018 ~~to be advanced to~~ (the ~~venture~~“Senior ~~partners~~Notes”). ~~Such~~The ~~advances~~Senior ~~are~~Notes ~~returned~~include toSeries ~~the~~A ~~venture~~through ~~for~~D ~~working~~and ~~capital~~contained ~~needs~~the asfollowing ~~necessary.~~terms Atat ~~September 30, 2017 and December~~ March 31, ~~2016, other current liabilities included approximately $183,700 and $147,000, respectively, related to advances to CB&I from the venture.~~2018:

~~Consolidated~~• ~~Ventures~~Series A—~~The~~Interest ~~following~~due issemi-annually at a ~~summary~~fixed ~~description~~rate of ~~our~~9.15%, ~~significant~~with ~~joint~~principal ~~ventures~~of we$104,653 ~~consolidate~~ due toin ~~their~~August ~~designation as VIEs for which we are the primary beneficiary:~~2018

• ~~CB&I/Kentz—We~~Series ~~have a venture with Kentz (CB&I~~B—~~65%~~Interest /due ~~Kentz—35%)~~semi-annually toat ~~perform the structural, mechanical, piping, electrical and instrumentation work on, and to provide commissioning support for, three LNG trains, including associated utilities and~~ a ~~gas~~fixed ~~processing~~rate ~~and~~of ~~compression plant~~7.57%, ~~for~~with ~~the~~principal ~~Gorgon~~of ~~LNG project, located on Barrow Island, Australia. Our venture project value is approximately~~ $5165,~~900,000~~784 ~~and~~due ~~the~~in ~~project~~December ~~was substantially complete at September 30, 2017.~~2019

• ~~CB&I/AREVA~~Series C—WeInterest ~~have~~due asemi-annually ~~venture~~at ~~with~~a ~~AREVA~~fixed ~~(CB&I—52%~~rate /of ~~AREVA—48~~8.15%~~) to design~~, ~~license~~with ~~and~~principal ~~construct~~of a$195,219 ~~mixed~~due ~~oxide fuel fabrication facility~~ in ~~Aiken,~~December ~~South Carolina. Our venture project value is approximately $5,800,000.~~2022


•	Series D—Interest due semi-annually at a fixed rate of 8.30%, with principal of $118,940 due in December 2024

We also have senior notes totaling $141,877 in aggregate principal amount outstanding as of March 31, 2018 (the “Second Senior Notes”) with BofA as administrative agent. Interest is payable semi-annually at a fixed rate of 7.53%, with principal of $141,877 due in July 2025.

The Senior Notes and Second Senior Notes (together, the “Notes”) also include provisions relating to our credit profile, which if not maintained will result in an incremental annual cost of up to 1.50% of the outstanding balance under the Notes. Further, the Notes include provisions relating to our leverage, which if not maintained, could result in an incremental annual cost of up to 1.00% (depending on our leverage level) of the outstanding balance under the Notes, provided that the incremental annual cost related to our credit profile and leverage cannot exceed 2.00% per annum. Finally, the Notes are subject to a make-whole premium in connection with certain prepayment events. As a result of the 2017 amendments described below, our debt obligations under the Notes are required to be repaid in connection with the consummation of the Combination. The Notes have financial and restrictive covenants described further below.

Compliance—As a result of noncompliance with certain financial covenants during 2017, and in connection with the decision to pursue the Combination, we entered into a series of amendments for our Committed Facilities, Term Loan and Notes (collectively, the “Senior Facilities”) during 2017. The amendments adjusted certain original and amended financial and

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~The~~restrictive ~~following~~covenants, ~~table~~introduced ~~presents~~new ~~summarized~~financial ~~balance~~and ~~sheet~~restrictive ~~information~~covenants, ~~for~~and ~~our~~waived ~~consolidated~~noncompliance ~~ventures~~with atcertain ~~September 30,~~covenants ~~2017~~and other defaults and ~~December 31,~~events ~~2016~~of default. The amendments:

	September 30, 2017		December 31, 2016
CB&I/Kentz
Current assets	$	23,740	$	68,867
Non-current assets	71,250		—
Total assets	$	94,990	$	68,867
Current liabilities	$	25,694	$	87,822
CB&I/AREVA
Current assets	$	44,070	$	16,313
Current liabilities	$	56,601	$	47,652
All Other (1)
Current assets	$	28,501	$	69,785
Non-current assets	16,256		16,382
Total assets	$	44,757	$	86,167
Current liabilities	$	9,714	$	7,748


•	Require us to secure the Senior Facilities through the pledge of cash, accounts receivable, inventory, fixed assets, certain real property, and stock of subsidiaries, which resulted in substantially all of our assets, subject to customary exceptions, being pledged as collateral for our Senior Facilities.

~~(1)~~• ~~Other~~Prohibit ~~ventures~~mergers ~~that~~and weacquisitions ~~consolidate~~(other ~~are~~than ~~not~~the ~~individually~~Combination), ~~material~~open-market toshare ~~our~~repurchases ~~financial results~~ and ~~are~~dividend ~~therefore~~payments ~~aggregated~~and ascertain ~~“All~~inter-company ~~Other”~~transactions.

~~Other—The~~• ~~use~~Require ~~of these ventures exposes~~ us to arepay ~~number~~portions of ~~risks, including~~ the ~~risk~~Senior ~~that~~Facilities ~~our~~with ~~partners~~the ~~may~~issuance ~~be unable or unwilling to provide their share~~ of ~~capital~~any ~~investment~~unsecured todebt ~~fund~~that ~~the~~is ~~operations~~subordinate of(“Subordinated ~~the~~Debt”) ~~venture or complete their obligations~~ to ~~us,~~ the ~~venture,~~Senior ~~or ultimately~~Facilities, ~~our customer. Differences in opinions or views among venture partners could also result in delayed decision-making or failure to agree on material issues, which could adversely affect~~ the ~~business~~issuance ~~and operations~~ of ~~the~~any ~~venture.~~equity ~~In addition~~securities, ~~agreement~~or ~~terms may subject us to joint and several liability for our venture partners, and~~ the ~~failure~~sale of ~~our~~any ~~venture partners to perform their obligations could impose additional performance and financial obligations on us~~assets. ~~The aforementioned factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes, including claims against our partners.~~

8• Provide for required minimum levels of trailing 12-month earnings before interest, taxes, depreciation and amortization (“EBITDA”) as follows: $500,000 at March 31, 2018, $500,000 at June 30, 2018, $550,000 at September 30, 2018, and $575,000 at December 31, 2018 and each quarter thereafter. ~~RESTRUCTURING~~Trailing ~~RELATED~~12-month ~~COSTS~~EBITDA for purposes of determining compliance with the Minimum EBITDA covenant is adjusted to exclude: an agreed amount attributable to restructuring or integration charges during the third and fourth quarters of 2017 and an agreed amount attributable to charges on certain projects which occurred during 2017 (collectively, the “EBITDA Addbacks”).

~~During~~• ~~the~~Provide ~~three~~for ~~and~~a ~~nine~~maximum ~~months~~leverage ~~ended~~ratio ~~September~~of ~~30,~~1.75 ~~2017,~~(“Maximum weLeverage ~~recognized~~Ratio”) ~~approximately~~and ~~$26,900~~a ~~and~~minimum ~~$30,900,~~fixed ~~respectively,~~charge ratio of ~~facility~~2.25 ~~realignment,~~(“Minimum ~~severance,~~Fixed ~~professional~~Charge ~~services~~Coverage Ratio”), ~~and~~but ~~other~~waive ~~miscellaneous~~any ~~costs,~~noncompliance ~~primarily~~with ~~resulting~~the ~~from~~Maximum ~~our~~Leverage ~~publicly~~Ratio ~~announced~~or ~~cost~~Minimum ~~reduction~~Fixed ~~and~~Charge ~~strategic~~Coverage ~~initiatives~~Ratio beginning on December 18, as2017 ~~described~~and ~~below.~~ending ~~The~~on ~~nine~~the ~~months~~earlier ~~ended~~of ~~September~~(i) 30June 18, ~~2017~~2018 ~~includes~~or ~~approximately~~(ii) ~~$4,000~~the occurrence of ~~facility~~certain ~~realignment~~Combination ~~costs~~termination ~~that~~events ~~were~~(the ~~previously~~“Covenant ~~recorded~~Relief ~~within~~Period”). ~~other~~Trailing ~~operating~~12-month ~~expense~~EBITDA ~~during~~for purposes of determining compliance with the ~~three~~Maximum Leverage Ratio and ~~six~~consolidated ~~months~~net ~~ended~~income ~~June~~for ~~30,~~purposes ~~2017.~~of determining compliance with the Minimum Fixed Charge Coverage Ratio would be adjusted for the EBITDA Addbacks.

~~Facility~~• ~~Realignment~~Extend ~~Costs—Facility~~the ~~realignment~~maturity ~~costs~~of ~~totaled~~the ~~approximately~~Series ~~$13,200~~A ~~and~~Senior ~~$17~~Notes,~~200,~~ ~~respectively,~~from ~~during~~December ~~the three and nine months ended September 30~~27, 2017, ~~and were related~~ to ~~the~~August ~~recognition of future operating lease expense for vacated facility capacity where we remain contractually obligated to a lessor. At September 30~~31, ~~2017, the liability was approximately $16,920, and was reflected within other current and non-current liabilities, as applicable, based upon the anticipated timing of payments~~2018. ~~The following table summarizes the changes in the facility realignment liability during 2017:~~

	Total
Balance at December 31, 2016	$	2,260
Charges (1)	17,223
Cash payments	(2,782		)
Foreign exchange and other	219
Balance at September 30, 2017	$	16,920


•	Requires us to maintain a minimum aggregate availability under our Committed Facilities, including borrowings and letters of credit, of $50,000 during the Covenant Relief Period, and $250,000 thereafter.

~~(1)~~• ~~The~~Limit ~~charges~~the ~~primarily~~amount ~~relate~~of tocertain of our ~~Engineering~~funded &indebtedness ~~Construction~~to ~~operating~~$2,900,000 ~~group.~~less the aggregate amount of all scheduled repayments and mandatory prepayments of such funded indebtedness, but for the duration of the Covenant Relief Period, increase the limit from $3,000,000 to $3,140,000.

•

Provide for the: (i) filing of a joint proxy statement/prospectus (“Form S-4”) by February 15, 2018, (ii) filing of a solicitation/recommendation statement on Schedule 14D-9 as promptly as reasonably practicable following (but in any event by no later than 10 business days after) the commencement of the exchange offer related to the Combination, and (iii) duly calling and giving notice of a meeting of the Company’s shareholders as promptly as reasonably practicable after the Form S-4 is declared effective under the Securities Act of 1933, as amended (but in any event by no later than May 18, 2018) (collectively, the “Combination Milestones”). Each of the Combination Milestones was achieved during the first quarter 2018.


•	Provide for completion of the Combination by June 18, 2018 (the “Combination Closing Deadline”).


•	Provide for the mandatory repayment of the outstanding debt under the Senior Facilities on the day of the closing of the Combination, which in the case of the Notes, is to be at the price of the make-whole amount as modified by the amendments. At March 31, 2018, we had an accrual of approximately $27,700 within accrued liabilities related to the anticipated modified make-whole payment.

•

Provide for certain events of default in respect of the Combination, including: (i) termination of documentation related to the Combination, (ii) failure of the applicable proposals related to the Combination to be brought for a vote by the shareholders of the Company or McDermott, (iii) the failure of the shareholders of either McDermott or the Company to approve the applicable proposals related to the Combination at their respective shareholder meetings, subject to a seven day grace period, (iv) the supervisory board of directors of the Company changing its recommendation to the Company’s shareholders in respect of the Combination, or (v) the failure of certain financing commitments in respect of the Combination, subject to customary minimum thresholds.


•	Provide for certain other information and modified reporting rights, modifications to mandatory prepayment requirements, and consent rights of the holders of the outstanding Notes and administrative agents of the Bank Facilities as more fully set forth in the amendments.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Severance~~At ~~Costs—Employee~~March 31, ~~severance~~2018, ~~costs~~we ~~totaled~~were ~~approximately~~in $2compliance with our restrictive and financial covenants,~~400~~ ~~for~~with ~~both~~a ~~the~~trailing ~~three~~12-month EBITDA of $615,000, and ~~nine~~aggregate availability under our Committed Facilities of at least $121,000 at all times during the three months ended ~~September 30~~March 31, ~~2017~~2018. WeBased ~~anticipate~~on ~~that~~our forecasted EBITDA and cash flows, we ~~will~~project ~~incur~~future ~~additional~~compliance ~~severance~~with ~~related~~our ~~costs~~financial ~~during~~covenants through the ~~fourth~~Combination ~~quarter~~Closing Deadline. Further, we have successfully achieved the various Combination Milestones required by our 2017 amendments, and believe it is probable we will complete the Combination by the Combination Closing Deadline. ~~These~~Although ~~costs~~we ~~are~~do ~~generally~~not ~~paid~~project ~~within~~future loan compliance violations through the ~~quarter~~Combination ~~they~~Closing ~~are~~Deadline, ~~incurred~~due orto the ~~subsequent~~requirement ~~quarter.~~for our debt obligations to be repaid in connection with the Combination, debt of approximately $966,100, which by its terms is due beyond one year and would otherwise be shown as long-term, has been classified as current.

~~Professional~~Our ~~Fees—Professional~~plan ~~fees~~to ~~totaled~~maintain ~~approximately~~compliance ~~$10~~with our covenants,~~400~~ ~~for~~satisfy ~~both~~our ~~the~~debt ~~three~~obligations, and ~~nine~~continue ~~months~~as ~~ended~~a ~~September~~going 30concern is to complete the aforementioned Combination, ~~2017~~with no further financing alternatives beyond the Combination. Absent this plan, ~~and~~we ~~were~~would ~~related~~be unable to ~~consulting,~~satisfy ~~legal~~our ~~and~~debt ~~advisory~~obligations, ~~related~~raising ~~services~~substantial ~~associated~~doubt ~~with~~regarding our ~~recent~~ability ~~lending~~to ~~facility~~continue ~~amendments~~as ~~and~~a ~~strategic~~going ~~assessments~~concern; however, the Combination alleviates the substantial doubt.

Other ~~Miscellaneous~~—~~Other~~In ~~miscellaneous~~addition ~~restructuring~~to ~~costs~~providing ~~totaled~~letters ~~approximately~~of credit, we also issue surety bonds in the ordinary course of business to support our contract performance. At March 31, 2018, we had $~~900~~339,069 of outstanding surety bonds in support of our projects. In addition, we had $404,597 of surety bonds maintained on behalf of our former Capital Services Operations, for ~~both~~which ~~the~~we ~~three~~have ~~and~~received ~~nine~~an ~~months~~indemnity ~~ended~~from ~~September~~CSVC. 30We also continue to maintain guarantees on behalf of our former Capital Services Operations in support of approximately $50,100 ~~2017~~of backlog, for which we have also received an indemnity.

9.Capitalized ~~DEBT~~interest was insignificant for the three months ended March 31, 2018 and 2017.

~~Our~~11. ~~outstanding~~FINANCIAL ~~debt~~INSTRUMENTS ~~at September 30, 2017 and December 31, 2016 was as follows:~~

	September 30, 2017			December 31, 2016
Current
Revolving facilities and other short-term borrowings	$	896,856		$	407,500
Current maturities of long-term debt	1,193,537			506,250
Less: unamortized debt issuance costs	(10,480		)	(2,340		)
Current maturities of long-term debt, net of unamortized debt issuance costs	1,183,057			503,910
Current debt, net of unamortized debt issuance costs	$	2,079,913		$	911,410
Long-Term
Term Loan: $1,000,000 term loan (interest at LIBOR plus a floating margin)	$	—		$	300,000
Second Term Loan: $500,000 term loan (interest at LIBOR plus a floating margin)	462,500			500,000
Senior Notes: $800,000 senior notes, series A-D (fixed interest ranging from 7.15% to 8.30%)	588,154			800,000
Second Senior Notes: $200,000 senior notes (fixed interest of 7.53%)	142,883			200,000
Less: unamortized debt issuance costs	—			(5,827		)
Less: current maturities of long-term debt	(1,193,537		)	(506,250		)
Long-term debt, net of unamortized debt issuance costs	$	—		$	1,287,923

Derivatives

~~Committed~~Foreign ~~Facilities—We~~Currency ~~have~~Exchange aRate ~~five-year~~Derivatives—At March 31, $12018,~~150,000~~ ~~committed revolving credit facility (~~the ~~“Revolving~~notional ~~Facility”)~~value ~~with Bank~~ of ~~America~~our ~~N.A.~~outstanding ~~(“BofA”),~~forward ascontracts ~~administrative~~to ~~agent,~~hedge ~~and~~certain ~~BNP~~foreign ~~Paribas~~exchange-related ~~Securities~~operating ~~Corp.,~~exposures ~~BBVA~~was ~~Compass~~approximately $119,300. ~~Credit~~These ~~Agricole~~contracts ~~Corporate~~vary ~~and~~in ~~Investment~~duration, ~~Bank~~maturing ~~(“Credit~~up ~~Agricole”)~~to ~~and~~four TDyears ~~Securities,~~from ~~each~~period-end. asWe ~~syndication~~designate ~~agents,~~certain ~~which~~of ~~expires~~these inhedges ~~October~~as ~~2018.~~cash ~~The~~flow ~~Revolving~~hedges ~~Facility~~and ~~has a $100~~accordingly,~~000~~ ~~total~~changes ~~letter~~in oftheir ~~credit~~fair ~~sublimit.~~value Atare ~~September 30,~~recognized ~~2017,~~in weAOCI ~~had~~until ~~$553,531~~the ~~and~~associated ~~$45,049~~underlying ofoperating ~~outstanding~~exposure ~~borrowings~~impacts ~~and~~our ~~letters~~earnings. ofForward ~~credit~~points, ~~respectively,~~which ~~under~~are ~~the~~deemed ~~facility,~~to ~~providing~~be ~~$551,420~~an ofineffective ~~available~~portion ~~capacity,~~ of ~~which~~the ~~$54~~hedges,~~951~~ ~~was~~are ~~available~~recognized ~~for~~within ~~letters~~cost of ~~credit~~revenue ~~based~~and onare ~~our~~not ~~total letter of credit sublimit~~material.

WeFinancial ~~also~~Instruments have a five-year, $800,000 committed revolving credit facility (the “Second Revolving Facility”) with BofA, as administrative agent, and BNP Paribas Securities Corp., BBVA Compass, Credit Agricole and Bank of Tokyo Mitsubishi UFJ, each as syndication agents, which expires in July 2020. The Second Revolving Facility supplements our Revolving Facility, and has a $100,000 total letter of credit sublimit. At September 30, 2017, we had $343,325 and $73,262 of outstanding borrowings and letters of credit, respectively, under the facility, providing $383,413 of available capacity, of which $26,738 was available for letters of credit based on our total letter of credit sublimit.Disclosures

~~Maximum~~Fair ~~outstanding~~Value—Financial ~~borrowings~~instruments ~~under~~are ~~our~~required ~~Revolving~~to ~~Facility~~be ~~and~~categorized ~~Second~~within ~~Revolving~~a ~~Facility~~valuation ~~(together,~~hierarchy ~~“Committed~~based ~~Facilities”)~~upon ~~during~~ the ~~nine~~lowest ~~months~~level ~~ended September 30, 2017, were approximately $1,700,000. We are assessed quarterly commitment fees on the unutilized portion~~ of ~~the~~input ~~facilities~~that ~~as well as letter of credit fees on outstanding letters of credit. Interest on borrowings~~ is ~~assessed~~significant atto ~~either prime plus 4.00% or LIBOR plus 5.00%. In addition, our fees for financial and performance letters of credit are 5.00% and 3.50%, respectively. During~~ the ~~nine~~fair ~~months~~value ~~ended September 30, 2017, our weighted average interest rate on borrowings under the Revolving Facility and Second Revolving Facility was approximately 4~~measurement.~~90%~~ ~~and 7.90%, respectively, inclusive of the applicable floating margin.~~ The ~~Committed~~three ~~Facilities~~levels ~~have financial and restrictive covenants described further below. As a result~~ of the ~~August~~valuation 9,hierarchy ~~2017 amendment described below, the proceeds from the sale of our Technology Operations~~ are ~~required~~as ~~to be used to repay our debt obligations.~~follows:


•	Level 1—Fair value is based on quoted prices in active markets.

•

Level 2—Fair value is based on internally developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based on current market expectations and adjusts for credit risk.


•	Level 3—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. We did not have any level 3 classifications at March 31, 2018 or December 31, 2017.

The following table presents the fair value of our foreign currency exchange rate derivatives and interest rate derivatives at March 31, 2018 and December 31, 2017, respectively, by valuation hierarchy and balance sheet classification:



	March 31, 2018										December 31, 2017
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Derivative Assets ⁽¹⁾
Other current assets	$	—	$	1,665		$	—	$	1,665		$	—	$	1,671		$	—	$	1,671
Other non-current assets	—		562			—		562			—		556			—		556
Total assets at fair value	$	—	$	2,227		$	—	$	2,227		$	—	$	2,227		$	—	$	2,227
Derivative Liabilities
Other current liabilities	$	—	$	(7,892	)	$	—	$	(7,892	)	$	—	$	(4,598	)	$	—	$	(4,598	)
Other non-current liabilities	—		(183		)	—		(183		)	—		(187		)	—		(187		)
Total liabilities at fair value	$	—	$	(8,075	)	$	—	$	(8,075	)	$	—	$	(4,785	)	$	—	$	(4,785	)

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Uncommitted~~(1) ~~Facilities—~~We ~~also~~are ~~have~~exposed ~~various~~to ~~short~~credit risk on our hedging instruments associated with potential counterparty non-~~term~~performance, ~~uncommitted~~and ~~letter~~the fair value of our derivatives reflects this credit ~~facilities~~risk. ~~(the~~The ~~“Uncommitted~~total ~~Facilities”)~~level ~~across~~2 ~~several~~assets ~~geographic~~at ~~regions,~~fair ~~under~~value ~~which~~above represent the maximum loss that we ~~had~~would ~~$1,548,445~~incur ofon our outstanding ~~letters~~hedges ofif the applicable counterparties failed to perform according to the hedge contracts. To help mitigate counterparty credit risk, we transact only with counterparties that are rated as ofinvestment ~~September 30,~~grade ~~2017~~or higher and monitor all counterparties on a continuous basis.

~~Term~~The ~~Loans—On~~carrying ~~February~~values ~~13,~~of ~~2017~~our cash and cash equivalents (primarily consisting of bank deposits), weaccounts ~~paid~~receivable and accounts payable approximate their fair values because of the ~~remaining~~short-term ~~$300,000~~nature of ~~principal~~these oninstruments. ~~our~~At ~~four-year~~March 31, $12018 and December 31,~~000~~ 2017,~~000~~ ~~unsecured~~the ~~term~~fair ~~loan~~value ~~(the~~of “our Second Term Loan”), based upon the current market rates for debt with ~~BofA~~similar ascredit ~~administrative~~risk ~~agent.~~and ~~Interest~~maturities, ~~was~~approximated its carrying value as interest is based on LIBOR plus an applicable floating margin. ~~for~~At ~~the~~March 31, ~~period~~2018 ~~(0.98%~~ and ~~2.25%~~December 31, ~~respectively).~~2017, ~~In conjunction with~~ the ~~repayment~~fair values of ~~the~~our ~~Term~~Senior ~~Loan,~~Notes weand ~~also~~Second ~~settled~~Senior ~~our~~Notes, ~~associated~~based ~~interest~~upon ~~rate~~the ~~swap~~current ~~that~~market ~~hedged~~rates ~~against~~for adebt ~~portion~~with ofsimilar ~~the~~credit ~~Term~~risk ~~Loan~~and maturities, ~~which~~approximated ~~resulted~~their incarrying avalues ~~weighted~~due ~~average~~to ~~interest~~their ~~rate~~classification ofas ~~approximately~~current ~~2.6%~~on ~~for~~our ~~the~~Balance ~~period~~Sheet.

AtDerivatives September 30, 2017, we had $462,500 outstanding under a five-year, $500,000 term loan (the “Second Term Loan”) with BofA as administrative agent. Interest and principal under the Second Term Loan is payable quarterly in arrears, and interest is assessed at either prime plus 4.00% or LIBOR plus 5.00%. During the nine months ended September 30, 2017, our weighted average interest rate on the Second Term Loan was approximately 4.80%, inclusive of the applicable floating margin. Future annual maturities for the Second Term Loan are $18,750, $75,000, $75,000 and $293,750 for 2017, 2018, 2019, and 2020, respectively. As a result of the August 9, 2017 amendment described below, the proceeds from the sale of our Technology Operations are required to be used to repay our debt obligations. The Second Term Loan has financial and restrictive covenants described further below. Disclosures

~~Senior~~Fair ~~Notes~~Value—WeThe ~~have~~following atable ~~series~~presents ofthe ~~senior~~total ~~notes~~fair ~~totaling~~value ~~$588,154~~by inunderlying ~~aggregate~~risk ~~principal~~and ~~amount~~balance ~~outstanding~~sheet asclassification offor ~~September 30,~~derivatives ~~2017~~designated ~~(the~~as ~~“Senior~~cash ~~Notes”).~~flow ~~The~~hedges ~~Senior~~and ~~Notes~~derivatives ~~include~~not ~~Series~~designated Aas ~~through~~cash Dflow ~~and~~hedges ~~contained~~at ~~the~~March 31, ~~following~~2018 ~~terms~~and ~~at September~~December 3031, 2017:

• Series A—Interest due semi-annually at a fixed rate of 7.15%, with principal of $105,396 due in December 2017



	Other Current and Non-Current Assets				Other Current and Non-Current Liabilities
	March 31, 2018		December 31, 2017		March 31, 2018			December 31, 2017
Derivatives designated as cash flow hedges
Foreign currency	$	440	$	385	$	(227	)	$	(140	)
Fair value	$	440	$	385	$	(227	)	$	(140	)
Derivatives not designated as cash flow hedges
Foreign currency	$	1,787	$	1,842	$	(7,848	)	$	(4,645	)
Fair value	$	1,787	$	1,842	$	(7,848	)	$	(4,645	)
Total fair value	$	2,227	$	2,227	$	(8,075	)	$	(4,785	)

•Master ~~Series~~Netting BArrangements (“MNAs”)—~~Interest~~Our ~~due~~derivatives ~~semi-annually~~are atexecuted aunder ~~fixed~~International ~~rate~~Swaps ofand ~~7.57%~~Derivatives Association MNAs, ~~with~~which ~~principal~~generally ofallow ~~$166~~us and our counterparties to net settle,~~779~~ in a single net payable or receivable, obligations due on the same day, in ~~December~~the ~~2019~~same currency and for the same type of derivative instrument. We have elected the option to record all derivatives on a gross basis in our Balance Sheet. The following table presents our derivative assets and liabilities at March 31, 2018 on a gross basis and a net settlement basis:

• Series C—Interest due semi-annually at a fixed rate of 8.15%, with principal of $196,515 due in December 2022



	Gross Amounts Recognized (i)			Gross Amounts Offset on the Balance Sheet (ii)		Net Amounts Presented on the Balance Sheet (iii) = (i) - (ii)			Gross Amounts Not Offset on the Balance Sheet (iv)					Net Amount (v) = (iii) - (iv)
	Gross Amounts Recognized (i)			Gross Amounts Offset on the Balance Sheet (ii)					Financial Instruments			Cash Collateral Received		Net Amount (v) = (iii) - (iv)
Derivative Assets
Foreign currency	2,227			—		2,227			(454		)	—		1,773
Total assets	$	2,227		$	—	$	2,227		$	(454	)	$	—	$	1,773
Derivative Liabilities
Foreign currency	(8,075		)	—		(8,075		)	454			—		(7,621		)
Total liabilities	$	(8,075	)	$	—	$	(8,075	)	$	454		$	—	$	(7,621	)

• Series D—Interest due semi-annually at a fixed rate of 8.30%, with principal of $119,464 due in December 2024

The principal balances above reflect the use of $211,846 of the proceeds from the sale of our Capital Services Operations to repay a portion of each series of senior notes during the third quarter 2017 in the following amounts: Series A - $44,604, Series B - $58,221, Series C - $78,485 and Series D - $30,536. As a result of the August 9, 2017 amendment described below, the proceeds from the sale of our Technology Operations are required to be used to repay our debt obligations.

We also have senior notes totaling $142,883 in aggregate principal amount outstanding as of September 30, 2017 (the “Second Senior Notes”) with BofA as administrative agent. Interest is payable semi-annually at a fixed rate of 7.53%, with principal of $142,883 due in July 2025. The principal balance reflects the use of $57,100 of the proceeds from the sale of the Capital Services Operations to repay a portion of the Second Senior Notes. As a result of the August 9, 2017 amendment described below, the proceeds from the sale of our Technology Operations are required to be used to repay our debt obligations.

The Senior Notes and Second Senior Notes (together, the “Notes”) have financial and restrictive covenants described further below. The Notes also include provisions relating to our credit profile, which if not maintained will result in an incremental annual cost of up to 1.50% of the outstanding balance under the Notes. Further, the Notes include provisions relating to our leverage, which if not maintained, could result in an incremental annual cost of up to 1.00% (depending on our leverage level) of the outstanding balance under the Notes, provided that the incremental annual cost related to our credit profile and leverage cannot exceed 2.00% per annum. Finally, the Notes are subject to a make-whole premium in connection with certain prepayment events.

Compliance and Other—On February 24, 2017, and effective for the period ended December 31, 2016, we amended our Revolving Facility, Second Revolving Facility, and Second Term Loan (collectively, “Bank Facilities”) and Notes (collectively, with Bank Facilities, “Senior Facilities”). The amendments:

• Established a new maximum leverage ratio of 3.50 at December 31, 2016, decreasing to 3.00 at December 31, 2017, or 45 days subsequent to the closing of the sale of our Capital Services Operations (the “Closing Date”), if earlier.

• Established a new minimum net worth of $1,201,507, maintained our required fixed charge coverage ratio at 1.75, and reduced our Revolving Facility from $1,350,000 to $1,150,000 at the Closing Date.

• Included other financial and restrictive covenants, including restrictions regarding subsidiary indebtedness, sales of assets, liens, investments, type of business conducted, and mergers and acquisitions, and restrictions on dividend payments and share repurchases, among other restrictions.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

OnAOCI/Other—The ~~May~~following 8table presents the total value, ~~2017~~by underlying risk, recognized in other comprehensive income (“OCI”) and ~~effective~~reclassified ~~for~~from AOCI to interest expense (interest rate derivatives) and cost of revenue (foreign currency derivatives) during the ~~period~~three months ended March 31, ~~2017,~~2018 weand ~~further~~2017 ~~amended~~for ~~our~~derivatives ~~Senior~~designated ~~Facilities.~~as ~~The~~cash ~~amendments~~flow hedges:

• Required us to secure the Senior Facilities through the pledge of cash, accounts receivable, inventory, fixed assets, certain real property, and stock of subsidiaries, which was in the process of being completed as of September 30, 2017, and will result in substantially all of our assets, subject to customary exceptions, being pledged as collateral for our Senior Facilities.



	Amount of Gain (Loss) on Effective Derivative Portion
	Recognized in OCI					Reclassified from AOCI into Earnings ⁽¹⁾
	Three Months Ended March 31,					Three Months Ended March 31,
	2018			2017		2018			2017
Derivatives designated as cash flow hedges
Interest rate	$	—		$	—	$	—		$	49
Foreign currency	(39		)	682		(82		)	124
Total	$	(39	)	$	682	$	(82	)	$	173

•(1) ~~Required~~Net usunrealized togains ~~repay~~totaling ~~portions~~approximately of$44 ~~the~~are ~~Senior~~anticipated ~~Facilities~~to ~~with~~be ~~all~~reclassified ~~of the net proceeds~~ from ~~the~~AOCI ~~sale~~into ofearnings ~~our~~during ~~Capital Services Operations,~~ the ~~issuance~~next of12 ~~any~~months ~~unsecured~~due ~~debt that is subordinate (“Subordinated Debt”)~~ to ~~the~~settlement ~~Senior Facilities, the issuance~~ of ~~any equity securities, or~~ the ~~sale~~associated ofunderlying ~~any assets~~obligations.

•The ~~Established~~following ~~new~~table ~~maximum~~presents ~~leverage~~the ~~ratios~~total ~~for~~value ~~borrowings~~recognized ~~under~~in ~~the~~cost ~~Senior~~of ~~Facilities~~revenue asfor ~~follows:~~the ~~4.00~~three atmonths ended March 31, ~~2017;~~2018 ~~4.50 at June 30, 2017~~ and ~~September 30,~~ 2017; ~~3.00~~for atforeign ~~December~~currency ~~31,~~derivatives ~~2017~~not ~~and~~designated ~~March~~as ~~31,~~cash ~~2018;~~flow ~~and 2.50 at June 30, 2018.~~hedges:

• Established total maximum leverage ratios (in addition to those established for the Senior Facilities) for all borrowings among the Senior Facilities and any Subordinated Debt as follows: 5.25 at June 30, 2017; 6.00 at September 30, 2017; 4.00 at December 31, 2017 and March 31, 2018; 3.25 at June 30, 2018; and 3.00 at September 30, 2018.



	Amount of Gain (Loss) Recognized in Earnings
	Three Months Ended March 31,
	2018			2017
Derivatives not designated as cash flow hedges
Foreign currency	$	(13,153	)	$	(6,170	)
Total	$	(13,153	)	$	(6,170	)

~~• Prohibited mergers and acquisitions, open-market share repurchases, and increases to dividends until our leverage ratio is below 3~~12.00 ~~for~~RETIREMENT ~~two~~BENEFITS ~~consecutive quarters.~~

OnOur ~~August 9,~~ 2017, ~~(the~~Annual ~~“Effective~~Report ~~Date”),~~disclosed ~~and~~anticipated ~~effective~~2018 ~~for~~defined ~~the~~benefit ~~period~~pension ~~ended~~and ~~June~~other ~~30,~~postretirement ~~2017,~~plan wecontributions ~~further~~of ~~amended~~approximately ~~our~~$18,200 ~~Senior~~and ~~Facilities~~$2,400, respectively. The ~~amendments~~following ~~waived~~table ~~our~~provides ~~noncompliance~~updated ~~with~~contribution ~~our~~information ~~existing~~for ~~covenants~~these asplans ofat ~~June 30~~March 31, ~~2017 and certain other defaults and events of default. In addition, the amendments~~2018:

• Eliminate our Minimum Net Worth covenant required by our previous amendments.



	Pension Plans		Other Postretirement Plans
Contributions made through March 31, 2018	$	8,052	$	294
Contributions expected for the remainder of 2018	10,102		1,972
Total contributions expected for 2018	$	18,154	$	2,266

•The ~~Require~~following ~~minimum~~table ~~levels~~provides ofa ~~trailing~~breakout ~~12-month~~of ~~earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined by~~ the ~~amendments,~~components asof ~~follows:~~net ~~$500,000~~periodic atbenefit ~~September~~cost ~~30, 2017; $550,000 at December 31, 2017; $500,000 at March 31, 2018; $450,000 at June 30, 2018 and September 30, 2018; and $425,000 at December 31, 2018 and thereafter~~ (~~“Minimum EBITDA”~~income). ~~Trailing~~associated ~~12-month EBITDA for purposes of determining compliance~~ with ~~the~~our ~~Minimum~~defined ~~EBITDA~~benefit ~~covenant~~pension ~~is adjusted to exclude: an agreed amount attributable to any restructuring or integration charges during the third~~ and ~~fourth~~other ~~quarters~~postretirement ofplans ~~2017; an agreed amount attributable to previous charges on certain projects which occurred during the first and second quarters of 2017; and an agreed amount~~ for ~~potential future charges for~~ the ~~same~~three ~~projects~~months ifended ~~they~~March ~~were~~31, to2018 ~~be incurred during the third~~ and ~~fourth quarters of~~ 2017 ~~(collectively, the “EBITDA Addbacks”).~~:

• Provide for the replacement of our previous maximum leverage ratio and minimum fixed charge ratio with a new maximum leverage ratio of 1.75 (“Maximum Leverage Ratio”) and new minimum fixed charge coverage ratio of 2.25 (“Minimum Fixed Charge Coverage Ratio”), which are temporarily suspended and will resume as of March 31, 2018. Trailing 12-month EBITDA for purposes of determining compliance with the Maximum Leverage Ratio and consolidated net income for purposes of determining compliance with the Minimum Fixed Charge Coverage Ratio will be adjusted for the EBITDA Addbacks.



	Three Months Ended March 31,
Pension Plans	2018			2017
Service cost	$	3,076		$	2,782
Interest cost	5,048			4,591
Expected return on plan assets	(6,933		)	(5,786		)
Amortization of prior service credits	(160		)	(150		)
Recognized net actuarial losses	1,494			1,498
Net periodic benefit cost	$	2,525		$	2,935
Other Postretirement Plans
Service cost	$	127		$	171
Interest cost	296			342
Recognized net actuarial gains	(722		)	(685		)
Net periodic benefit income	$	(299	)	$	(172	)

• Require us to execute on our plan to market and sell our Technology Operations by December 27, 2017 (the “Technology Sale”), with an extension of up to 60 days at the discretion of the holders of a majority of the outstanding Notes and at the discretion of the administrative agents of the Bank Facilities.

• Require us to maintain a minimum aggregate availability under our Committed Facilities, including borrowings and letters of credit, of $150,000 at all times from the Effective Date through the date of the Technology Sale, and $250,000 thereafter (“Minimum Availability”). Our amendments require the proceeds from the Technology Sale be used to repay our Senior Facilities (“Mandatory Repayment Amount”). Further, our aggregate capacity under the Committed Facilities will be reduced by seventy percent (70%) of the portion of the Mandatory Repayment Amount allocable to the Committed Facilities, upon closing the Technology Sale and certain other mandatory prepayment events.

• Limit the amount of certain of our funded indebtedness to $3,000,000 prior to the Technology Sale and $2,900,000 thereafter, in each case, subject to reduction pursuant to scheduled repayments and mandatory prepayments thereof (but, with respect to the Committed Facilities, only to the extent the commitments have been reduced by such prepayments) made by us after the Effective Date.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

•13. ~~Prohibit~~COMMITMENTS ~~mergers~~AND ~~and~~CONTINGENCIES ~~acquisitions, open-market share repurchases and dividend payments and certain inter-company transactions.~~

•General—We ~~Replace~~have ~~the~~been ~~previous~~and ~~financial~~may ~~letter~~from time to time be named as a defendant in legal actions claiming damages in connection with engineering and construction projects, technology licenses, other services we provide, and other matters. These are typically claims that arise in the normal course of ~~credit~~business, ~~sublimits~~including employment-related claims and contractual disputes or claims for ~~our~~personal ~~Revolving~~injury ~~Facility~~or ~~and~~property ~~Second~~damages ~~Revolving~~which ~~Facility~~occur in connection with aservices ~~total~~performed ~~$100~~relating to project or construction sites. Contractual disputes normally involve claims relating to the timely completion of projects,~~000~~ ~~letter~~performance of ~~credit~~equipment ~~sublimit~~or technologies, design or other engineering services or project construction services provided by us. We do not believe that any of our pending contractual, employment-related personal injury or property damage claims and disputes will have a material adverse effect on our results of operations, financial position or cash flow. See Note 16 for ~~each~~additional discussion of claims associated with our projects.

•Project ~~Adjust~~Arbitration Matters—We are in arbitration (governed by the ~~interest~~arbitration ~~rates~~rules of the International Chamber of Commerce) with the customer for one of our previously completed large cost-reimbursable projects, in which the customer is alleging cost overruns and consequential damages on the project. We have a counterclaim against the customer for unpaid receivables. We believe all amounts incurred and billed on the project, including outstanding receivables of approximately $254,000 as of March 31, 2018, are contractually due under the provisions of our ~~Senior~~contract ~~Facilities~~and are recoverable. The receivables have been classified as a non-current asset on our Balance Sheet as we do not anticipate collection within the next year. We do not believe a risk of material loss is probable related to this matter, and accordingly, no amounts have been accrued. While it is possible that a loss may be incurred, we are unable to estimate the ~~rates~~range ~~described~~of ~~further~~potential ~~above~~loss, if any.

AsIn ~~discussed above~~addition, ~~our~~we ~~amended~~are ~~covenants~~in ~~require,~~arbitration ~~among~~(governed ~~other~~by ~~things,~~ the ~~completion~~arbitration rules of ~~our~~the ~~plan~~United toNations ~~sell~~Commission ~~the~~on ~~Technology~~International ~~Operations~~Trade ~~and~~Law) ~~utilization~~with of the ~~proceeds~~customer tofor ~~repay~~one of our ~~outstanding~~previously ~~debt~~completed ~~obligations.~~consolidated ~~Further~~joint venture projects, weregarding ~~are~~differing ~~required~~interpretations toof ~~comply~~the ~~with~~contract ~~various~~related ~~new~~to ~~restrictive~~up ~~and~~to ~~financial~~approximately ~~covenants~~$175,000 ~~including~~of ~~the~~reimbursable ~~Minimum~~billings. ~~EBITDA~~We ~~and~~dispute ~~Minimum~~the ~~Availability~~customer’s ~~covenants.~~interpretation ~~Although~~of wethe ~~received~~contract ~~temporary~~and ~~suspension~~believe ofall ~~our~~amounts ~~Maximum~~incurred ~~Leverage~~and ~~Ratio~~billed ~~and~~on ~~Minimum~~the ~~Fixed~~project, ~~Charge~~including ~~Coverage~~outstanding ~~Ratio,~~receivables ~~these~~of ~~covenants~~approximately ~~will~~$40,000 ~~resume~~as ~~effective~~of March 31, 2018~~. At September 30~~, ~~2017,~~are wecontractually ~~were~~due inunder ~~compliance~~the ~~with~~provisions ~~all~~ of our ~~amended~~contract ~~restrictive~~ and ~~financial~~are ~~covenants~~recoverable. ~~Based~~The onreceivables ~~our~~have ~~forecasted~~been ~~EBITDA~~classified ~~and~~as ~~cash~~a ~~flows,~~non-current weasset ~~project~~on ~~that~~our ~~future~~Balance ~~compliance~~Sheet ~~with~~as ~~certain~~we ~~covenants~~do ~~subsequent~~not toanticipate ~~December~~collection ~~31,~~within ~~2017~~the ~~will~~next ~~require~~year. ~~the~~We ~~completion~~do ofnot ~~the~~believe ~~Technology~~a ~~Sale~~risk ~~and~~of ~~associated~~material ~~net~~loss ~~proceeds~~is ~~consistent~~probable ~~with~~related ~~our~~to ~~expectations.~~this ~~Accordingly~~matter, ~~debt~~and ~~of approximately $1~~accordingly,~~000,000,~~ ~~which~~no byamounts ~~its~~have ~~terms~~been isaccrued. ~~due~~While ~~beyond~~it ~~one~~is ~~year~~possible ~~and~~that ~~would~~a ~~otherwise~~loss may be ~~shown as long-term~~incurred, ~~has~~we ~~been~~are ~~classified~~unable asto ~~current,~~estimate asthe ~~certain~~range ~~factors~~of ~~regarding~~potential ~~our~~loss, ~~compliance~~if ~~with such covenants is beyond our control~~any.

ItDispute isRelated to Sale of Nuclear Operations—On December 31, 2015, we sold our ~~intention~~Nuclear Operations to ~~execute~~Westinghouse Electric Company LLC (“WEC”). In connection with the ~~actions~~transaction, ~~necessary~~a post-closing purchase price adjustment mechanism was negotiated between CB&I and WEC to ~~enable~~account usfor any difference between target working capital and actual working capital as finally determined pursuant to ~~maintain~~the ~~compliance~~terms ~~with~~of the ~~financial~~purchase ~~and~~agreement. ~~other~~On ~~covenants~~April ~~described~~28, ~~above~~2016, WEC delivered to us a purported closing statement that estimated closing working capital was negative $976,506, which was $2,150,506 less than the target working capital amount. In ~~July~~contrast, we ~~initiated~~calculated ~~the~~closing ~~steps~~working ~~necessary~~capital to ~~market~~be ~~and~~$1,601,805, ~~sell~~which ~~our~~was ~~Technology~~$427,805 ~~Operations~~greater ~~and~~than ~~are~~the ontarget ~~schedule~~working ~~with~~capital ~~our plan~~amount. WeOn ~~expect~~July to21, ~~receive~~2016, ~~final~~we ~~offers~~filed a complaint against WEC in the Court of Chancery in the State of Delaware seeking a declaration that WEC has no remedy for the ~~business~~vast bymajority ~~late~~of ~~November~~its ~~2017~~claims, and ~~based~~we requested an injunction barring WEC from bringing such claims. On December 2, 2016, the Court of Chancery granted WEC’s motion for judgment on the ~~information~~pleadings ~~available~~and atdismissed ~~this~~our ~~time~~complaint, westating ~~believe~~ that wethe ~~will~~dispute ~~complete~~should follow the ~~transaction~~dispute ~~with~~resolution ~~sufficient~~process ~~proceeds~~set toforth ~~satisfy~~in ~~our~~the ~~obligation~~purchase ~~under~~agreement, which includes the ~~terms~~use of ~~our~~an ~~amendments~~independent auditor to resolve the working capital dispute. ~~Although~~We appealed that ruling to the ~~timing~~Delaware ~~required~~Supreme Court. Due to ~~close~~WEC’s ~~such~~bankruptcy afiling ~~transaction~~on ~~remains~~March ~~uncertain~~29, if2017, weall ~~enter~~claim ~~into~~resolution aproceedings ~~transaction~~were onautomatically stayed pursuant to the ~~required~~Bankruptcy ~~timeline~~Code. At the parties’ request, wethe ~~expect~~Bankruptcy ~~that~~Court welifted ~~will~~the beautomatic ~~able~~stay to ~~obtain~~permit anthe ~~extension~~appeal ofand ~~time~~dispute ~~from~~resolution process to continue. Oral argument before the ~~administrative~~Delaware ~~agents~~Supreme ~~for~~Court ~~our~~was ~~Bank~~held ~~Facilities~~on May 3, 2017, and ~~holders~~on June 27, 2017, the Delaware Supreme Court overturned the decision of athe ~~majority~~Court of Chancery and instructed the ~~outstanding~~Court ~~Notes~~of Chancery to ~~complete~~issue ~~the~~an ~~Technology~~order ~~Sale.~~enjoining WeWEC ~~believe~~from wesubmitting ~~will~~certain ~~accomplish~~claims ~~our~~to ~~plans~~the independent auditor. The parties continue to ~~maintain~~move ~~compliance~~forward with ~~our~~those ~~financial~~matters ~~and~~still ~~other~~subject ~~covenants,~~to the dispute resolution process and ~~will~~with bethe ~~successful~~selection ~~renewing~~of ora ~~replacing~~new independent auditor to replace the ~~capacity~~previous ~~available~~auditor, ~~under~~who ~~our~~had ~~Revolving~~resigned. ~~Facility~~We ~~(which~~do ~~expires~~not inbelieve ~~October~~a ~~2018)~~risk of material loss is probable related to this matter, and, ~~Second~~accordingly, ~~Revolving~~no ~~Facility~~amounts ~~through~~have ~~traditional~~been oraccrued. While ~~alternative~~it ~~financing~~is ~~options~~possible that a loss may be incurred, ~~including~~we ~~private~~are orunable ~~public~~to ~~funding~~estimate ~~sources~~the range of potential loss, if any. ~~See~~We ~~“Liquidity~~believe the Delaware Supreme Court ruling significantly improved our position on this matter and ~~Capital~~intend ~~Resources”~~to ~~within~~continue ~~Item~~pursuing 2our ~~for~~rights ~~further~~under ~~discussion~~the purchase agreement.

InShareholder ~~addition~~Litigation Related to ~~providing~~Planned ~~letters~~Combination with McDermott—Five of ~~credit,~~our weshareholders ~~also~~have ~~issue~~filed ~~surety~~separate ~~bonds~~lawsuits under the federal securities laws in the ~~ordinary~~United ~~course~~States District Court for the Southern District of ~~business~~Texas tochallenging ~~support~~the ~~our~~accuracy ~~contract~~of ~~performance~~the disclosures made in the Form S-4 Registration Statement filed with the SEC on January 24, 2018 in connection with the Combination. The Atcases ~~September~~are captioned (i) 30McIntyre v. Chicago Bridge & Iron Company N.V., ~~2017~~et al., weCase ~~had~~No. ~~$375,828~~4:18-cv-00273 of(S.D. ~~outstanding~~Tex.) ~~surety~~(the ~~bonds~~“McIntyre inAction”); ~~support~~(ii) The ofGeorge ~~our~~Leon ~~projects~~Family Trust v. InChicago ~~addition,~~Bridge we& ~~had~~Iron ~~$419~~Company N.V.,~~914~~ ofet ~~surety~~al., ~~bonds~~Case ~~maintained~~No. on4:18-cv-00314 ~~behalf~~(S.D. ofTex.) ~~our~~(the ~~former~~“Leon ~~Capital~~Action”); ~~Services~~(iii) ~~Operations,~~and ~~for~~Maresh ~~which~~v. weChicago ~~have~~Bridge ~~received~~& anIron ~~indemnity~~Company ~~from~~N.V., ~~CSVC~~et al., WeCase ~~also~~No. ~~continue~~4:18-cv-00498 to(S.D. ~~maintain~~Tex.) ~~guarantees~~(the on“Maresh ~~behalf~~Action”); of(iv) ~~our~~Patel ~~former~~v ~~Capital~~Chicago ~~Services~~Bridge ~~Operations~~& inIron ~~support~~Company, ofN.V. ~~approximately~~et ~~$99~~al.,~~000~~ ofCase ~~backlog,~~No. ~~for~~4:18-cv-00550 ~~which~~(S.D. weTexas) ~~have~~(the ~~also~~“Patel ~~received~~Action”); anand ~~indemnity~~(v) Judd v. Chicago Bridge & Iron Company N.V., et al., Case No. 4:18-

Capitalized interest was insignificant for the nine months ended September 30, 2017 and 2016.

10. FINANCIAL INSTRUMENTS

Derivatives

Foreign Currency Exchange Rate Derivatives—At September 30, 2017, the notional value of our outstanding forward contracts to hedge certain foreign exchange-related operating exposures was approximately $209,000. These contracts vary in duration, maturing up to four years from period-end. We designate certain of these hedges as cash flow hedges and accordingly, changes in their fair value are recognized in AOCI until the associated underlying operating exposure impacts our earnings. Forward points, which are deemed to be an ineffective portion of the hedges, are recognized within cost of revenue and are not material.

Financial Instruments Disclosures

Fair Value—Financial instruments are required to be categorized within a valuation hierarchy based on the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows:

• Level 1—Fair value is based on quoted prices in active markets.

• Level 2—Fair value is based on internally developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based on current market expectations and adjusts for credit risk.

• Level 3—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. We did not have any level 3 classifications at September 30, 2017 or December 31, 2016.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

cv-00799 (S.D. Texas) (the “Judd Action”). The ~~following~~McIntyre ~~table~~Action, ~~presents~~Leon ~~the~~Action, ~~fair~~Maresh ~~value~~Action and Judd Action are asserted on behalf of putative classes of our ~~foreign~~public ~~currency~~shareholders, ~~exchange~~while ~~rate~~the ~~derivatives~~Patel ~~and~~Action ~~interest~~is ~~rate~~brought ~~derivatives~~only aton ~~September 30,~~behalf ~~2017~~of ~~and~~the ~~December 31,~~named ~~2016,~~plaintiff. ~~respectively,~~All byfive ~~valuation~~actions ~~hierarchy~~allege violations of Section 14(a) and ~~balance~~20(a) ~~sheet~~of ~~classification:~~the Exchange Act and Rule 14a-9 promulgated thereunder based on various alleged omissions of material information from the Registration Statement.

	September 30, 2017										December 31, 2016
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Derivative Assets (1)
Other current assets	$	—	$	2,252		$	—	$	2,252		$	—	$	1,146		$	—	$	1,146
Other non-current assets	—		379			—		379			—		82			—		82
Total assets at fair value	$	—	$	2,631		$	—	$	2,631		$	—	$	1,228		$	—	$	1,228
Derivative Liabilities
Other current liabilities	$	—	$	(1,838	)	$	—	$	(1,838	)	$	—	$	(3,509	)	$	—	$	(3,509	)
Other non-current liabilities	—		(193		)	—		(193		)	—		(725		)	—		(725		)
Total liabilities at fair value	$	—	$	(2,031	)	$	—	$	(2,031	)	$	—	$	(4,234	)	$	—	$	(4,234	)

•

The McIntyre Action names as defendants CB&I, each of CB&I’s directors individually, and certain current and former CB&I officers and employees individually. It seeks to enjoin the Combination, an award of costs and attorneys’ and expert fees, and damages. On February 7, 2018, the plaintiff in the McIntyre Action filed a motion for preliminary injunction seeking to enjoin CB&I from consummating the Combination.

~~(1)~~• WeThe ~~are~~Leon ~~exposed~~Action tonames ~~credit~~as ~~risk~~defendants onCB&I, ~~our~~certain ~~hedging~~subsidiaries ~~instruments~~of ~~associated~~CB&I ~~with potential counterparty non-performance,~~ and ~~the~~McDermott ~~fair~~that ~~value~~are ofparties ~~our~~to ~~derivatives~~the ~~reflects~~Combination ~~this~~Agreement, ~~credit~~each ~~risk.~~of ~~The~~CB&I’s ~~total~~directors ~~level~~individually, 2and ~~assets~~McDermott atas ~~fair~~an ~~value~~alleged ~~above~~control ~~represent~~person ~~the~~of ~~maximum~~CB&I. ~~loss~~The ~~that~~Leon weAction ~~would~~seeks ~~incur~~to onenjoin ~~our~~the ~~outstanding~~Combination ~~hedges~~(or, ifin the ~~applicable~~alternative, ~~counterparties~~rescission ~~failed~~or toan ~~perform~~award ~~according~~for torescissory ~~the~~damages ~~hedge~~in ~~contracts.~~the Toevent ~~help~~the ~~mitigate~~Combination ~~counterparty~~is ~~credit risk~~completed), weto ~~transact~~compel ~~only~~CB&I ~~with~~to ~~counterparties~~issue ~~that~~a ~~are~~revised ~~rated~~Registration asStatement, ~~investment~~and ~~grade~~an oraward ~~higher~~of costs and ~~monitor~~attorneys’ ~~all~~and ~~counterparties~~expert ~~on a continuous basis~~fees.

• The ~~carrying~~Maresh ~~values~~Action, ofwhich ~~our~~was ~~cash~~originally ~~and~~filed ~~cash~~in ~~equivalents~~Delaware ~~(primarily consisting of bank deposits), accounts receivable~~ and ~~accounts~~voluntarily ~~payable~~dismissed ~~approximate~~without ~~their~~prejudice ~~fair~~on ~~values~~February ~~because~~13, of2018, ~~the~~was ~~short~~re-~~term~~filed ~~nature~~in ofTexas ~~these~~and ~~instruments.~~names Atas ~~September 30,~~defendants ~~2017~~CB&I, ~~the~~each ~~fair value~~ of ~~our~~CB&I’s ~~Second~~directors ~~Term Loan~~individually, ~~based~~and oncertain ~~the~~ current ~~market~~and ~~rates~~former ~~for~~CB&I ~~debt~~officers ~~with similar credit risk~~ and ~~maturities,~~employees ~~approximated~~individually. ~~its~~The ~~carrying~~Maresh ~~value~~Action asseeks ~~interest~~to isenjoin ~~based~~the onCombination ~~LIBOR plus an applicable floating margin. At September 30~~(or, ~~2017,~~in the ~~fair values of our Senior Notes and Second Senior Notes~~alternative, ~~based~~an onaward ~~the current market rates~~ for ~~debt~~rescissory ~~with~~damages ~~similar~~in ~~credit~~the ~~risk~~event ~~and~~the ~~maturities,~~Combination ~~approximated~~is ~~their~~completed) ~~carrying values due to their classification as current on our Balance Sheet. At December 31, 2016, our Senior Notes~~ and ~~Second~~an ~~Senior~~award ~~Notes had a total fair value~~ of ~~approximately~~costs ~~$785,700~~ and ~~$206,400,~~attorneys’ ~~respectively, based on current market rates for debt with similar credit risk~~ and ~~maturities~~expert ~~and were categorized within level 2 of the valuation hierarchy~~fees.

~~Derivatives~~• ~~Disclosures~~The Patel Action names as defendants CB&I and each of CB&I’s directors individually and seeks to enjoin the Combination, an award of costs and attorneys’ and expert fees.

~~Fair~~• ~~Value—~~The ~~following~~Judd ~~table~~Action ~~presents~~names ~~the~~as ~~total~~defendants ~~fair~~CB&I ~~value~~and byeach ~~underlying~~of ~~risk~~CB&I’s directors individually and ~~balance~~seeks ~~sheet~~to ~~classification~~enjoin ~~for~~the ~~derivatives~~Combination ~~designated~~or, asin ~~cash~~the ~~flow~~alternative ~~hedges~~in ~~and~~the ~~derivatives~~event ~~not~~the ~~designated~~Combination asis ~~cash~~consummated, ~~flow~~to ~~hedges~~recover atrescissory ~~September 30~~damages from the directors individually, ~~2017~~together with an award of costs and ~~December 31,~~attorneys’ ~~2016:~~and expert fees.

	Other Current andNon-Current Assets				Other Current andNon-Current Liabilities
	September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016
Derivatives designated as cash flow hedges
Interest rate	$	—	$	49	$	—		$	—
Foreign currency	372		109		(6		)	(536		)
Fair value	$	372	$	158	$	(6	)	$	(536	)
Derivatives not designated as cash flow hedges
Foreign currency	$	2,259	$	1,070	$	(2,025	)	$	(3,698	)
Fair value	$	2,259	$	1,070	$	(2,025	)	$	(3,698	)
Total fair value	$	2,631	$	1,228	$	(2,031	)	$	(4,234	)

The Court consolidated all of the actions. The consolidation order appointed the plaintiff in the Leon Action and the plaintiff’s counsel in the Leon Action as the interim lead plaintiff and the interim lead plaintiff’s counsel, respectively. On March 9, 2018, the interim lead plaintiff filed a consolidated amended complaint. On March 16, 2018, defendants moved to dismiss the consolidated amended complaint and interim lead plaintiff filed a motion for preliminary injunction. On March 29, 2018, interim lead plaintiff withdrew its motion for a preliminary injunction. Motions for permanent lead plaintiff status were due on April 2, 2018, and only interim lead plaintiff filed such a motion. On April 5, 2018, interim lead plaintiff sought an extension of time to respond to defendants’ motion to dismiss until after such time as a permanent lead plaintiff is appointed. That motion was granted.

We believe the actions are without merit and that there are substantial legal and factual defenses to the claims asserted. We intend to vigorously defend against the claims made in the actions.

Asbestos Litigation—We are a defendant in numerous lawsuits wherein plaintiffs allege exposure to asbestos due to work we may have performed at various locations. We have never been a manufacturer, distributor or supplier of asbestos products. Over the past several decades and through March 31, 2018, we have been named a defendant in lawsuits alleging exposure to asbestos involving approximately 6,200 plaintiffs and, of those claims, approximately 1,100 claims were pending and 5,100 have been closed through dismissals or settlements. Over the past several decades and through March 31, 2018, the claims alleging exposure to asbestos that have been resolved have been dismissed or settled for an average settlement amount of approximately two thousand dollars per claim. We review each case on its own merits and make accruals based on the probability of loss and our estimates of the amount of liability and related expenses, if any. Although we have seen an increase in the number of recent filings, especially in one specific venue, we do not believe the increase or any unresolved asserted claims will have a material adverse effect on our future results of operations, financial position or cash flow, and at March 31, 2018, we had approximately $8,300 accrued for liability and related expenses. With respect to unasserted asbestos claims, we cannot identify a population of potential claimants with sufficient certainty to determine the probability of a loss and to make a reasonable estimate of liability, if any. While we continue to pursue recovery for recognized and unrecognized contingent losses through insurance, indemnification arrangements or other sources, we are unable to quantify the amount, if any, that we may expect to recover because of the variability in coverage amounts, limitations and deductibles or the viability of carriers, with respect to our insurance policies for the years in question.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Master~~Environmental ~~Netting Arrangements (“MNAs”)~~Matters—Our ~~derivatives~~operations are ~~executed~~subject ~~under~~to ~~International~~extensive ~~Swaps~~ and ~~Derivatives~~changing ~~Association MNAs~~U.S. federal, ~~which~~state ~~generally~~and ~~allow~~local uslaws and ~~our~~regulations, ~~counterparties~~as towell ~~net~~as ~~settle,~~the inlaws aof ~~single~~other ~~net~~countries, ~~payable~~that orestablish ~~receivable,~~health ~~obligations~~and ~~due~~environmental onquality ~~the~~standards. ~~same~~These ~~day~~standards, inamong ~~the~~others, ~~same~~relate ~~currency~~to air and ~~for~~water pollutants and the ~~same~~management ~~type~~and disposal of ~~derivative~~hazardous ~~instrument~~substances and wastes. We ~~have~~are ~~elected~~exposed ~~the option~~ to ~~record~~potential ~~all~~liability ~~derivatives~~for onpersonal ainjury ~~gross~~or ~~basis~~property indamage ~~our~~caused ~~Balance~~by ~~Sheet.~~any ~~The~~release, ~~following~~spill, ~~table~~exposure ~~presents~~or ~~our~~other ~~derivative~~accident ~~assets~~involving ~~and~~such ~~liabilities at September 30~~pollutants, ~~2017~~substances onor awastes. ~~gross basis and a net settlement basis:~~

	GrossAmountsRecognized(i)			Gross AmountsOffset on theBalance Sheet(ii)		Net AmountsPresented on theBalance Sheet(iii) = (i) - (ii)			Gross Amounts Not Offset onthe Balance Sheet (iv)					Net Amount(v) = (iii) - (iv)
									FinancialInstruments			Cash Collateral Received
Derivative Assets
Foreign currency	2,631			—		2,631			(268		)	—		2,363
Total assets	$	2,631		$	—	$	2,631		$	(268	)	$	—	$	2,363
Derivative Liabilities
Foreign currency	(2,031		)	—		(2,031		)	268			—		(1,763		)
Total liabilities	$	(2,031	)	$	—	$	(2,031	)	$	268		$	—	$	(1,763	)

In connection with the historical operation of our facilities, including those associated with acquired operations, substances which currently are or might be considered hazardous were used or disposed of at some sites that will or may require us to make expenditures for remediation. In addition, we have agreed to indemnify parties from whom we have purchased or to whom we have sold facilities for certain environmental liabilities arising from acts occurring before the dates those facilities were transferred.

~~AOCI/Other—The~~We ~~following~~believe ~~table~~we ~~presents~~are ~~the~~in ~~total value~~compliance, byin ~~underlying~~all ~~risk~~material respects, ~~recognized~~with inenvironmental ~~other~~laws ~~comprehensive~~and ~~income~~regulations ~~(“OCI”)~~ and ~~reclassified~~maintain ~~from~~insurance ~~AOCI~~coverage to ~~interest~~mitigate ~~expense~~our ~~(interest~~exposure ~~rate~~to ~~derivatives)~~environmental ~~and~~liabilities. ~~cost~~We ofdo ~~revenue~~not ~~(foreign~~believe ~~currency~~any ~~derivatives)~~environmental ~~during~~matters ~~the~~will ~~three~~have ~~and~~a ~~nine~~material ~~months~~adverse ~~ended~~effect ~~September~~on ~~30,~~our ~~2017~~future ~~and~~results ~~2016~~of ~~for~~operations, ~~derivatives~~financial ~~designated~~position asor cash flow. ~~hedges:~~We do not anticipate we will incur material capital expenditures for environmental controls or for the investigation or remediation of environmental conditions during the remainder of 2018 or 2019.

	Amount of Gain (Loss) on Effective Derivative Portion
	Recognized in OCI											Reclassified from AOCI into Earnings (1)
	Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016			2017		2016			2017		2016			2017		2016
Derivatives designated as cash flow hedges
Interest rate	$	—		$	159		$	—	$	(802	)	$	—	$	(110	)	$	49	$	(454	)
Foreign currency	(420		)	(401		)	759		420			255		142			463		(772		)
Total	$	(420	)	$	(242	)	$	759	$	(382	)	$	255	$	32		$	512	$	(1,226	)

14. ACCUMULATED OTHER COMPREHENSIVE INCOME

~~(1)~~The ~~Net~~following ~~unrealized~~table ~~gains~~presents ~~totaling~~changes ~~approximately~~in ~~$307~~AOCI, ~~are~~net ~~anticipated~~of totax, beby ~~reclassified~~component, ~~from AOCI into earnings~~ during the ~~next~~three 12 months ~~due~~ended toMarch ~~settlement~~31, ~~of the associated underlying obligations.~~2018:

The following table presents the total value recognized in cost of revenue for the three and nine months ended September 30, 2017 and 2016 for foreign currency derivatives not designated as cash flow hedges:



	Currency Translation Adjustment ⁽¹⁾			Unrealized Fair Value Of Cash Flow Hedges			Defined Benefit Pension and Other Postretirement Plans			Total
Balance at December 31, 2017	$	(183,434	)	$	299		$	(133,373	)	$	(316,508	)
OCI before reclassifications	16,282			(124		)	(4,414		)	11,744
Amounts reclassified from AOCI	—			52			444			496
Net OCI	16,282			(72		)	(3,970		)	12,240
Balance at March 31, 2018	$	(167,152	)	$	227		$	(137,343	)	$	(304,268	)

	Amount of Gain (Loss) Recognized in Earnings
	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Derivatives not designated as cash flow hedges
Foreign currency	$	(6,210	)	$	(3,058	)	$	(6,606	)	$	(12,217	)
Total	$	(6,210	)	$	(3,058	)	$	(6,606	)	$	(12,217	)


⁽¹⁾	During the three months ended March 31, 2018, the currency translation adjustment component of AOCI was favorably impacted by net movements in the British Pound and Euro exchange rates against the U.S. Dollar.

The following table presents reclassification of AOCI into earnings, net of tax, for each component, during the three months ended March 31, 2018:



	Amount Reclassified From AOCI
Unrealized Fair Value Of Cash Flow Hedges ⁽¹⁾
Foreign currency derivatives (cost of revenue)	$	82
Total before tax	$	82
Tax	(30		)
Total net of tax	$	52
Defined Benefit Pension and Other Postretirement Plans ⁽²⁾
Amortization of prior service credits	$	(160	)
Recognized net actuarial losses	772
Total before tax	$	612
Tax	(168		)
Total net of tax	$	444


⁽¹⁾	See Note 11 for further discussion of our cash flow hedges, including the total value reclassified from AOCI to earnings.


⁽²⁾	See Note 12 for further discussion of our defined benefit and other postretirement plans, including the components of net periodic benefit cost.

Table of Contents

Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

1115. ~~RETIREMENT~~EQUITY-BASED ~~BENEFITS~~INCENTIVE PLANS AND OTHER EQUITY ACTIVITY

~~Our~~General—Under ~~2016~~our ~~Annual~~equity-based ~~Report~~incentive ~~disclosed~~plans ~~anticipated~~(our ~~2017~~“Incentive ~~defined~~Plans”), ~~benefit~~we ~~pension~~can issue shares to employees and ~~other~~directors ~~postretirement~~in ~~plan~~the ~~contributions~~form of ~~approximately~~restricted ~~$17,000~~stock ~~and~~units $2(“RSUs”),~~500,~~ ~~respectively~~performance ~~(approximately~~based ~~$15,900~~shares ~~and~~(including ~~$2,500,~~those ~~respectively,~~based ~~associated~~upon ~~with~~financial ~~our~~or ~~continuing~~stock ~~operations~~price performance) and stock options. ~~The~~Changes ~~following~~in ~~table~~common ~~provides~~stock, ~~updated~~APIC ~~contribution~~and ~~information~~treasury ~~for~~stock during the ~~plans~~three ofmonths ~~our~~ended ~~continuing~~March ~~operations~~31, at2018 ~~September 30,~~and 2017: primarily relate to activity associated with our Incentive Plans and share repurchases.

	Pension Plans		Other Postretirement Plans
Contributions made through September 30, 2017	$	11,845	$	1,442
Contributions expected for the remainder of 2017	5,047		619
Total contributions expected for 2017	$	16,892	$	2,061

Share Grants—During the three months ended March 31, 2018, we granted 1,776 RSU related shares associated with our Incentive Plans with a weighted average grant-date fair value of $18.46 per share, which vest over a three year period.

~~The~~Share ~~following~~Issuances—During ~~table~~the ~~provides~~three amonths ~~breakout~~ended ofMarch ~~the~~31, ~~components~~2018, ofwe ~~net~~had ~~periodic~~the ~~benefit~~following ~~cost~~share ~~(income)~~issuances associated with our ~~defined~~Incentive ~~benefit~~Plans ~~pension~~ and ~~other~~employee ~~postretirement~~stock ~~plans~~purchase ofplan ~~our continuing operations for the three and nine months ended September 30, 2017 and 2016~~(“ESPP”):

	Three Months Ended September 30,						Nine Months Ended September 30,
	Shares
	2017			2016			2017			2016
RSUs (issued upon vesting)	616
Pension Plans
Stock options (issued upon exercise)	284
Service cost	$	2,778		$	2,159		$	7,973		$	6,463
ESPP shares (issued upon sale)	123
Interest cost	4,541			5,398			13,299			16,579
Total shares issued (1)	1,023
Expected return on plan assets	(5,792		)	(6,264		)	(17,091		)	(19,315		)
Amortization of prior service credits	(164		)	(154		)	(463		)	(460		)
Recognized net actuarial losses	1,345			1,259			3,955			3,870
Settlement expense (1)	—			—			2,426			—
Net periodic benefit cost	$	2,708		$	2,398		$	10,099		$	7,137
Other Postretirement Plans
Service cost	$	170		$	176		$	512		$	528
Interest cost	342			340			1,026			1,021
Recognized net actuarial gains	(685		)	(840		)	(2,055		)	(2,521		)
Net periodic benefit income	$	(173	)	$	(324	)	$	(517	)	$	(972	)

(1) ~~Net~~During ~~periodic benefit cost in 2017 was impacted by~~ the ~~settlement~~three ofmonths ~~our~~ended ~~qualified~~March ~~Canadian~~31, ~~pension~~2018, ~~plan~~there inwere ~~the~~no ~~second~~financial ~~quarter~~performance ~~2017.~~based ~~The~~shares ~~settlement~~issued ~~resulted~~based inon the ~~immediate~~results ~~recognition~~ of ~~previously unrecognized actuarial gains related to~~ the ~~plan~~underlying ~~that~~performance ~~were previously included in AOCI~~conditions.

12Stock-Based Compensation Expense—During the three months ended March 31, 2018 and 2017, we recognized $9,137 and $10,247, respectively (including $676 during the three months ended March 31, 2017 associated with our discontinued Capital Services Operations), of stock-based compensation expense, primarily within selling and administrative expense. ~~COMMITMENTS~~We ~~AND~~recognize ~~CONTINGENCIES~~forfeitures as they occur, rather than estimating expected forfeitures.

~~General~~Share Repurchases—WeDuring ~~have~~the ~~been~~three ~~and~~months ~~may~~ended ~~from~~March ~~time to time be named as a defendant in legal actions claiming damages in connection with engineering and construction projects and other services we provide~~31, ~~and other matters. These are typically claims that arise in the normal course of business~~2018, ~~including~~we ~~employment-related~~repurchased ~~claims~~181 ~~and~~shares ~~contractual disputes or claims~~ for personal injury or property damages which occur in connection with services performed relating to project or construction sites. Contractual disputes normally involve claims relating to the timely completion of projects$3,207 ~~design~~(an oraverage ~~other~~price ~~engineering services or project construction services provided by us. We do not believe that any~~ of ~~our pending contractual, employment-related personal injury or property damage claims and disputes will have a material adverse effect on our results of operations, financial position or cash flow~~$17.72) ~~See Note 15~~ for ~~additional~~taxes ~~discussion~~withheld ofon ~~claims~~taxable ~~associated~~share ~~with our projects~~distributions.

Project Arbitration Matter—The customer for one of our large cost-reimbursable projects has filed a request for arbitration with the International Chamber of Commerce, alleging cost overruns on the project, which has been completed16. ~~The~~UNAPPROVED ~~customer~~CHANGE ~~has not provided evidence to substantiate its allegations~~ORDERS, ~~and we believe all amounts incurred and billed on the project~~CLAIMS, ~~including outstanding receivables of approximately $243~~INCENTIVES,~~000~~ asAND ofOTHER ~~September 30,~~PROJECT ~~2017,~~MATTERS are contractually due under the provisions of our contract and are recoverable, but have been classified as a non-current asset on our Balance Sheet as we do not anticipate collection within the next year. We do not believe a risk of material loss is probable related to this matter, and accordingly, no amounts have been accrued. While it is possible that a loss may be incurred, we are unable to estimate the range of potential loss, if any. Further, we have asserted counterclaims for our outstanding receivables.

Unapproved Change Orders, Claims and Incentives—We have unapproved change orders and claims (collectively, “Claims”) and incentives included in project price for consolidated and proportionately consolidated projects within our Engineering & Construction and Fabrication Services operating groups.

At March 31, 2018 and December 31, 2017, our pro-rata share of Claims included in project price totaled approximately $229,800 and $227,200, respectively, for projects in both operating groups. Our Claims at March 31, 2018 are primarily related to a completed project and our U.S. LNG export facility project in Freeport, Texas. The Claims are primarily associated with fabrication activities and schedule related delays (including force majeure weather events for one of the projects) and related prolongation costs. Approximately $101,400 of the Claim amounts at March 31, 2018 are subject to arbitration or dispute resolution proceedings that are progressing, and the remainder are subject to ongoing commercial discussions. Further, approximately $203,600 of the Claim amounts had been recognized as revenue on a cumulative POC basis through March 31, 2018. Of the recognized Claim amounts at March 31, 2018, approximately $15,300 had been paid by the respective customers and the remainder has been reflected within cost and estimated earnings in excess of billings on our Balance Sheet.

At March 31, 2018 and December 31, 2017, we also had incentives included in project price of approximately $76,800 and $77,000, respectively, for projects within both operating groups. Our incentives at March 31, 2018 are primarily related to our U.S. gas turbine power project in the Northeast and our U.S. LNG export facility project in Hackberry, Louisiana. Approximately $64,300 of such amounts had been recognized as revenue on a cumulative POC basis through March 31, 2018 and has been reflected within cost and estimated earnings in excess of billings on our Balance Sheet.

The aforementioned amounts recorded in project price and recognized as revenue reflect our best estimates of recovery; however, the ultimate resolution and amounts received could differ from these estimates and could have a material adverse effect on our results of operations, financial position and cash flow. See Note 13 for further discussion of outstanding receivables related to one of our completed large cost-reimbursable projects and one of our completed consolidated joint venture projects.

Westinghouse Bankruptcy—On March 29, 2017, Westinghouse filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code (“Westinghouse Bankruptcy”). At March 31, 2018 and December 31, 2017, we had approximately $42,000 and $30,000, respectively, of recorded pre-petition accounts receivable amounts due from Westinghouse. The increase

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Dispute~~in ~~Related to Sale of Nuclear Operations—On December 31, 2015, we sold~~ our ~~Nuclear~~recorded ~~Operations~~receivables toduring ~~Westinghouse Electric Company LLC (“WEC”). In connection with~~ the ~~transaction,~~first aquarter ~~post-closing~~2018 ~~purchase price adjustment mechanism~~ was ~~negotiated~~due ~~between CB&I and WEC~~ to ~~account for any difference between target working capital and actual working capital as finally determined pursuant to the terms of the purchase agreement. On April 28, 2016, WEC delivered to us~~ a ~~purported~~third ~~closing~~party ~~statement~~offer ~~that estimated closing working capital was negative $976,506, which was $2,150,506 less than the target working capital amount. In contrast, we calculated closing working capital~~ to be $1,601,805, which was $427,805 greater than the target working capital amount. On July 21, 2016, we filed a complaint against WEC in the Court of Chancery in the State of Delaware seeking a declaration that WEC has no remedy for the vast majority of its claims, and we requested an injunction barring WEC from bringing such claims. On December 2, 2016, the Court of Chancery granted WEC’s motion for judgment on the pleadings and dismissed our complaint, stating that the dispute should follow the dispute resolution process set forth in the purchase ~~agreement, which includes~~ the ~~use of an independent auditor to resolve the working capital dispute~~receivables. We ~~appealed~~currently ~~that~~do ~~ruling~~not tobelieve the ~~Delaware~~Westinghouse ~~Supreme Court. Due to WEC’s bankruptcy filing on March 29, 2017, all claim resolution proceedings were automatically stayed pursuant to the~~ Bankruptcy ~~Code.~~will Atimpact the ~~parties’~~realizability request, the Bankruptcy Court lifted the automatic stay to permit the appeal and dispute resolution process to continue. Oral argument before the Delaware Supreme Court was held on May 3, 2017, and on June 27, 2017, the Delaware Supreme Court overturned the decision of the ~~Court~~recorded ofreceivable Chancery and instructed the Court of Chancery to issue an order enjoining WEC from submitting certain claims to the independent auditor. The parties continue to move forward with those matters still subject to the dispute resolution process and with the selection of a new independent auditor to replace the previous auditor, who had resigned. We do not believe a risk of material loss is probable related to this matter, and, accordingly, no amounts ~~have been accrued~~. While it is possible that a loss may be incurred, we are unable to estimate the range of potential loss, if any. We believe the Delaware Supreme Court ruling significantly improved our position on this matter and intend to continue pursuing our rights under the purchase agreement.

~~Asbestos~~Project ~~Litigation—We~~Changes ~~are a defendant~~ in ~~numerous~~Estimates—Backlog lawsuits wherein plaintiffs allege exposure to asbestos due to work we may have performed at various locations. We have never been a manufacturer, distributor or supplier of asbestos products. Over the past several decades and through September 30, 2017, we have been named a defendant in lawsuits alleging exposure to asbestos involving approximately 6,200 plaintiffs and, of those claims, approximately 1,200 claims were pending and 5,000 have been closed through dismissals or settlements. Over the past several decades and through September 30, 2017, the claims alleging exposure to asbestos that have been resolved have been dismissed or settled for ~~an average settlement amount of approximately two thousand dollars per claim. We review~~ each ~~case on its own merits and make accruals based on the probability~~ of ~~loss and~~ our ~~estimates~~operating ofgroups ~~the~~generally ~~amount~~consists of ~~liability~~several ~~and~~hundred ~~related~~contracts ~~expenses,~~and if any. Although we have seen an increase in the number of recent filings, especially in one specific venue, we do not believe the increase or any unresolved asserted claims will have a material adverse effect on our ~~future~~ results of operations, financial position or cash flow, and at September 30, 2017, we had approximately $7,100 accrued for liability and related expenses. With respect to unasserted asbestos claims, we cannot identify a population of potential claimants with sufficient certainty to determine the probability of a loss and to make a reasonable estimate of liability, if any. While we continue to pursue recovery for recognized and unrecognized contingent losses through insurance, indemnification arrangements or other sources, we are unable to quantify the amount, if any, that we may ~~expect~~be toimpacted ~~recover~~by ~~because~~changes ~~of the variability~~ in ~~coverage~~estimated ~~amounts,~~project ~~limitations and deductibles or the viability of carriers, with respect to our insurance policies for the years in question~~margins.

~~Environmental~~For ~~Matters—Our operations are subject to extensive and changing U.S. federal, state and local laws and regulations, as well as~~ the ~~laws~~three ofmonths ~~other~~ended ~~countries,~~March ~~that establish health and environmental quality standards. These standards~~31, ~~among others~~2018, ~~relate~~individual toprojects ~~air~~with ~~and~~significant ~~water~~changes ~~pollutants~~in ~~and~~estimated ~~the~~margins ~~management~~did ~~and~~not ~~disposal~~have ofa ~~hazardous~~material ~~substances~~net ~~and~~impact ~~wastes.~~on Weour ~~are~~income ~~exposed~~from ~~to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes~~operations.

InFor ~~connection~~the ~~with~~three ~~the~~months ~~historical~~ended ~~operation~~March of31, 2017, significant changes in estimated margins on three projects within our ~~facilities,~~Engineering ~~including~~& ~~those~~Construction ~~associated~~operating ~~with~~group ~~acquired~~resulted in a decrease to our income from operations of approximately $167,000 ~~substances~~(approximately ~~which~~$143,000 ~~currently~~for ~~are~~our orU.S. ~~might~~gas beturbine ~~considered~~power ~~hazardous~~projects in the Midwest and Northeast (“Two Gas Projects”) and approximately $24,000 for our U.S. LNG export facility project in Hackberry, Louisiana). The Two Gas Projects were ~~used~~impacted orby ~~disposed~~cost increases due to lower than anticipated labor productivity and extensions of atschedule, ~~some~~and ~~sites~~the ~~that~~project ~~will~~in orHackberry ~~may~~was ~~require~~impacted usby tothe ~~make~~net ~~expenditures~~effects of increased fabrication costs, and craft labor, subcontractor and indirect costs associated with an extension of schedule, partly offset by the benefit of an increase in project price for ~~remediation~~claims on the project (which were resolved in the fourth quarter 2017). In addition, wechanges ~~have~~in ~~agreed~~estimated margins on a large consolidated joint venture project and a separate cost reimbursable project within our Engineering & Construction operating group resulted in an increase to ~~indemnify~~our ~~parties~~income from ~~whom~~operations weof ~~have~~approximately ~~purchased~~$103,000 or(both tobenefiting ~~whom~~from wechanges ~~have~~in ~~sold~~estimated ~~facilities~~recoveries on the projects). Individual projects with significant changes in estimated margins for ~~certain~~our ~~environmental~~remaining ~~liabilities~~backlog ~~arising~~did ~~from~~not ~~acts~~have ~~occurring~~a ~~before~~material ~~the~~net ~~dates~~impact ~~those~~on ~~facilities~~our ~~were~~income ~~transferred.~~from operations.

WeTwo ~~believe~~Gas weProjects are in compliance, in all material respects, with environmental laws and regulations and maintain insurance coverage to mitigate our exposure to environmental liabilities. We do not believe any environmental matters will have a material adverse effect on our future results of operations, financial position or cash flow. We do not anticipate we will incur material capital expenditures for environmental controls or for the investigation or remediation of environmental conditions during the remainder of 2017 or 2018.

At March 31, 2018, our U.S. gas turbine power project in the Midwest within our Engineering & Construction operating group was in a loss position. The project was over 99% complete at March 31, 2018, and we have submitted a letter of “substantial completion” to the customer for acceptance. If the project incurs schedule liquidated damages due to our inability to reach a favorable commercial resolution on such matters, the project would experience further losses.

At March 31, 2018, our U.S. gas turbine power project in the Northeast within our Engineering & Construction operating group was in a loss position. The project was approximately 84% complete and had a reserve for estimated losses of approximately $60,000 at March 31, 2018, and is forecasted to be completed in the fourth quarter 2018 (consistent with our estimates as of December 31, 2017). Our current forecast for the project anticipates productivity levels that are consistent with our overall historical experience on the project and improved progress (due in part to anticipated improvement in weather conditions as the project moves out of the winter months), and actions to reduce our schedule related indirect costs. If future direct and subcontract labor productivity differ from our current estimates, we are unable to achieve our progress estimates, our schedule is extended, or we do not achieve our schedule related incentives, the project would experience further losses.

Two LNG Projects

At March 31, 2018, our U.S. LNG export facility project in Hackberry, Louisiana, within our Engineering & Construction operating group was in a loss position. The project was approximately 84% complete and had a reserve for estimated losses of approximately $13,000 at March 31, 2018, and is forecasted to be completed in the fourth quarter 2019 (consistent with our estimates as of December 31, 2017). Our current forecast for the project anticipates improvement in productivity from our overall historical experience on the project (as we anticipate improved construction performance for each subsequent LNG train) and actions to significantly reduce our schedule related indirect costs. If future direct and subcontract labor productivity differ from our current estimates, we are unable to achieve our progress estimates, our schedules are extended, we do not achieve our schedule related incentives, or we are unable to reduce our schedule related costs to the levels anticipated, the project would experience further losses.

During the second half of 2017 our U.S. LNG export facility project in Freeport, Texas, within our Engineering & Construction operating group was impacted by Hurricane Harvey. The direct impacts of Hurricane Harvey included the cost of demobilization and remobilization and damaged pipe and other materials. These direct impacts were included in our forecasts for the project during 2017 and were partially offset by an increase in project price for claims and anticipated insurance recoveries on the project. We are continuing to evaluate and estimate the indirect impacts of the Hurricane, including potential impacts to productivity and prolongation costs, and the impact of owner decisions to replace or refurbish damaged pipe and materials. We anticipate providing the owner an estimate of the indirect impacts on the project in the second quarter 2018. Such impacts have not been included in our forecasts, and although such impacts could be significant, we believe any costs incurred as a result of Hurricane Harvey (subject to unallowable costs which we have accounted for) are recoverable under the contractual provisions of our contract, including force majeure. Our current forecast for the project anticipates improvement in productivity from our overall historical experience on the project (as we anticipate improved construction performance for each subsequent LNG train) and actions to significantly reduce our schedule related indirect costs. If future direct and subcontract

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~13.~~labor ~~ACCUMULATED~~productivity ~~OTHER~~differ ~~COMPREHENSIVE~~from ~~INCOME~~our current estimates, we are unable to achieve our progress estimates, our schedules are extended, we are unable to reduce our schedule related costs to the levels anticipated, we are unable to fully recover the direct and indirect costs associated with the impacts of Hurricane Harvey, or the project incurs schedule liquidated damages due to our inability to reach a favorable legal or commercial resolution on such matters, the project would experience further decreases in estimated margins.

~~The~~17. ~~following~~SEGMENT ~~table~~INFORMATION ~~presents changes in AOCI, net of tax, by component, during the nine months ended September 30, 2017:~~

	CurrencyTranslationAdjustment (1)			UnrealizedFair Value OfCash Flow Hedges			Defined BenefitPension and OtherPostretirement Plans			Total
Balance at December 31, 2016	$	(264,562	)	$	(213	)	$	(130,841	)	$	(395,616	)
OCI before reclassifications	82,327			937			(15,870		)	67,394
Amounts reclassified from AOCI	—			(314		)	3,472			3,158
Net OCI	82,327			623			(12,398		)	70,552
Balance at September 30, 2017	$	(182,235	)	$	410		$	(143,239	)	$	(325,064	)

Our management structure and internal and public segment reporting are aligned based upon the services offered by our three operating groups, which represent our reportable segments: Engineering & Construction; Fabrication Services; and Technology. Our chief operating decision maker evaluates the performance of our operating groups based on revenue and income from operations. Each operating group’s income from operations reflects corporate costs, allocated based primarily upon revenue. Intersegment revenue is netted against the revenue of the segment receiving the intersegment services. For the three months ended March 31, 2018 and 2017, intersegment revenue totaled approximately $69,100 and $141,400, respectively. Intersegment revenue for these periods primarily related to services provided by our Fabrication Services operating group to our Engineering & Construction operating group.

~~(1)~~ During the ~~nine~~first ~~months~~quarter ~~ended~~2018, ~~September~~we ~~30,~~realigned ~~2017,~~our ~~the~~Fabrication ~~currency~~Services ~~translation~~and ~~adjustment~~Technology ~~component~~operating groups to reflect the present management oversight of ~~AOCI~~our ~~was~~operations. ~~favorably~~Our ~~impacted~~“Engineered byProducts ~~net~~Operations”, ~~movements~~which inwas ~~the~~previously ~~Australian~~reported ~~Dollar~~within our Fabrication Services operating group, ~~British~~is ~~Pound~~now ~~and~~reported ~~Euro~~within ~~exchange~~our ~~rates~~Technology ~~against~~operating group. The segment information for 2017 has been recast to conform to the ~~U.S.~~2018 ~~Dollar~~presentation.

The following table presents ~~reclassification~~total ofrevenue ~~AOCI~~and ~~into~~income ~~earnings,~~from ~~net~~operations ofby ~~tax,~~reportable segment for ~~each component, during~~ the ~~nine~~three months ended ~~September~~March 3031, 2018 and 2017:

	Amount Reclassified From AOCI
	Three Months Ended March 31,
Unrealized Fair Value Of Cash Flow Hedges (1)
	2018			2017
Interest rate derivatives (interest expense)	$	(49	)
Revenue
Foreign currency derivatives (cost of revenue)	(463		)
Engineering & Construction	$	1,365,395		$	1,280,753
Total before tax	$	(512	)
Fabrication Services	262,653			422,677
Tax	198
Technology	117,571			123,922
Total net of tax	$	(314	)
Total revenue	$	1,745,619		$	1,827,352
Defined Benefit Pension and Other Postretirement Plans (2)
Income From Operations
Amortization of prior service credits for continuing operations	$	(463	)
Engineering & Construction	$	54,817		$	5,414
Recognized net actuarial losses for continuing operations	4,398
Fabrication Services	25,592			33,497
Amortization of prior service credits for discontinued operations	(10		)
Technology	32,398			40,077
Recognized net actuarial losses for discontinued operations	643
Total operating groups	$	112,807		$	78,988
Total before tax	$	4,568
Restructuring related costs	(5,110		)	—
Tax	(1,096		)
Total income from operations	$	107,697		$	78,988
Total net of tax	$	3,472

~~(1)~~The ~~See~~following ~~Note~~table 10presents ~~for~~backlog ~~further~~and ~~discussion~~total ofassets ~~our~~by ~~cash~~reportable ~~flow~~segment ~~hedges~~at March 31, ~~including~~2018 ~~the~~and ~~total~~December 31, ~~value reclassified from AOCI to earnings.~~2017:

(2) See Note 11 for further discussion of our defined benefit and other postretirement plans, including the components of net periodic benefit cost.



	March 31, 2018		December 31, 2017
Backlog
Engineering & Construction	$	6,813,855	$	7,675,662
Fabrication Services	1,584,708		1,532,592
Technology	970,438		947,568
Total backlog	$	9,369,001	$	10,155,822



Assets
Engineering & Construction	$	3,276,772	$	3,142,224
Fabrication Services	1,606,157		1,607,419
Technology	1,137,644		1,221,939
Total assets	$	6,020,573	$	5,971,582

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14. EQUITY-BASED INCENTIVE PLANS AND OTHER EQUITY ACTIVITY

General—Under our equity-based incentive plans (our “Incentive Plans”), we can issue shares to employees and directors in the form of restricted stock units (“RSUs”), performance based shares (including those based on financial or stock price performance) and stock options. Changes in common stock, APIC and treasury stock during the nine months ended September 30, 2017 and 2016 primarily relate to activity associated with our Incentive Plans and share repurchases.

Share Grants—During the nine months ended September 30, 2017, we had the following share grants associated with our Incentive Plans:

	Shares (1)	Weighted AverageGrant-Date FairValue per Share
RSUs	1,178	$	31.76
Financial performance based shares	597	$	36.00
Stock performance based shares	149	$	44.21
Total shares granted	1,924

(1) No stock options were granted during the nine months ended September 30, 2017.

Share Issuances—During the nine months ended September 30, 2017, we had the following share issuances associated with our Incentive Plans and employee stock purchase plan (“ESPP”):

		Shares
Financial performance based shares (issued upon vesting)		49
RSUs (issued upon vesting)		960
Stock options (issued upon exercise)		66
ESPP shares (issued upon sale)		380
Total shares issued		1,456

Stock-Based Compensation Expense—During the three months ended September 30, 2017 and 2016, we recognized $8,079 and $9,824, respectively (including $0 and $643, respectively, associated with our discontinued Capital Services Operations and $927 and $896, respectively, associated with our discontinued Technology Operations), of stock-based compensation expense, and during the nine months ended September 30, 2017 and 2016, we recognized $34,520 and $30,982, respectively (including $6,874 and $2,283, respectively, associated with our discontinued Capital Services Operations and $2,622 and $3,170, respectively, associated with our discontinued Technology Operations), of stock-based compensation expense, primarily within selling and administrative expense. We recognize forfeitures as they occur, rather than estimating expected forfeitures.

Share Repurchases—During the nine months ended September 30, 2017, we repurchased 330 shares for $9,632 (an average price of $29.19) for taxes withheld on taxable share distributions.

15. UNAPPROVED CHANGE ORDERS, CLAIMS, INCENTIVES AND OTHER PROJECT MATTERS

At September 30, 2017 and December 31, 2016, our pro-rata share of Claims included in project price totaled approximately $580,100 and $121,100, respectively, for projects in both operating groups. Our Claims at September 30, 2017 are primarily related to two completed projects and our proportionately consolidated joint venture projects. The Claims are primarily associated with schedule related delays (including force majeure weather events) and related prolongation costs, fabrication activities, and disputes regarding certain reimbursable billings. Our claims increased by approximately $60,000 during the third quarter 2017 and related primarily to the impacts of Hurricane Harvey. Approximately $266,000 of the Claim amounts at September 30, 2017 are subject to arbitration or dispute resolution proceedings that are progressing, and the remainder are subject to ongoing commercial discussions. Further, approximately $507,600 of the Claim amounts had been recognized as revenue on a cumulative POC basis through September 30, 2017. Of the recognized Claim amounts at September 30, 2017, approximately $150,000 had been paid by the respective customers, approximately $40,000 has been reflected within non-current assets on our Balance Sheet as we do not anticipate collection within the next year, and the remainder has been reflected within cost and estimated earnings in excess of billings on our Balance Sheet.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At September 30, 2017 and December 31, 2016, we also had incentives included in project price of approximately $30,200 and $43,000, respectively, for projects within both operating groups. Approximately $15,800 of such amounts had been recognized as revenue on a cumulative POC basis through September 30, 2017.

The aforementioned amounts recorded in project price and recognized as revenue reflect our best estimates of recovery; however, the ultimate resolution and amounts received could differ from these estimates and could have a material adverse effect on our results of operations, financial position and cash flow. See Note 12 for further discussion of outstanding receivables related to one of our completed large cost-reimbursable projects.

Westinghouse Bankruptcy—At September 30, 2017, we had approximately $30,000 of accounts receivable and unbilled amounts due from Westinghouse. On March 29, 2017, Westinghouse filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code (“Westinghouse Bankruptcy”). We currently do not believe the Westinghouse Bankruptcy will impact the realizability of the receivable amounts and therefore, no amounts have been reserved as of September 30, 2017.

Project Changes in Estimates—Backlog for each of our operating groups generally consists of several hundred contracts and our results may be impacted by changes in estimated project margins. For the three months ended September 30, 2017, significant changes in estimated margins on four projects within our Engineering & Construction operating group resulted in a decrease to our income from operations of approximately $54,000 ($38,000 for two U.S. gas turbine power projects and $16,000 for two U.S. LNG export facility projects) as discussed further below. For the nine months ended September 30, 2017, significant changes in estimated margins on the same four projects resulted in a decrease to our income from operations of approximately $769,000 ($362,000 for two U.S. gas turbine power projects and $407,000 for two U.S. LNG export facility projects) as discussed further below. In addition, for the nine months ended September 30, 2017, changes in estimated margins on a large consolidated joint venture project and separate cost reimbursable project within our Engineering & Construction operating group resulted in an increase to our income from operations of approximately $103,000 (benefiting from changes in estimated recoveries in the first quarter 2017).

For the three months ended September 30, 2017, significant changes in estimated margins on one project (that is substantially complete) within our Fabrication Services operating group resulted in a decrease to our income from operations of approximately $17,000; however, this impact was substantially offset by changes in estimated margins on various other projects that were not individually significant. For the nine months ended September 30, 2017, individual projects with significant changes in estimated margins within our Fabrication Services operating group did not have a material net impact on our income from operations.

For the three and nine months ended September 30, 2016, significant changes in estimated margins on two projects resulted in an increase to our income from operations of approximately $112,000, and significant changes in estimated margins on two other projects resulted in a decrease to our income from operations of approximately $104,000, all within our Engineering & Construction operating group.

U.S. Gas Turbine Power Projects

The two aforementioned U.S. gas turbine power projects were in a loss position at September 30, 2017, and were impacted by changes in estimated margins during the first half of 2017 and third quarter 2017. The increases in the first half of 2017 were due primarily to lower than anticipated craft labor productivity (including reductions to our forecasted productivity estimates to levels that are in line with our overall historical experience on the projects); slower than anticipated benefits from mitigation plans; and further extensions of schedule and related prolongation costs (including schedule liquidated damages) resulting from the aforementioned impacts. The projects continued to be impacted during the third quarter 2017 by lower than anticipated craft labor productivity, and further extensions of schedule and related prolongation costs. Although labor productivity was below our expectations, we are nearing completion on one of the projects, and continue to believe we can achieve productivity levels on the other project that are consistent with our overall historical experience on the project. At September 30, 2017, the project nearing completion was approximately 93% complete, had a reserve for estimated losses of approximately $13,000, and is forecasted to be completed in December 2017 (representing a one month extension from our estimates as of June 30, 2017). The other project was approximately 76% complete, had a reserve for estimated losses of approximately $80,000, and is forecasted to be completed in July 2018 (representing a two month extension from our estimates as of June 30, 2017). If future direct and subcontract labor productivity differ from our current estimates, our schedules are further extended, or the projects incur increased schedule liquidated damages due to our inability to reach favorable commercial resolution on such matters, the projects would experience further losses.

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

U.S. LNG Export Facility Projects

The two aforementioned U.S. LNG export facility projects relate to our projects in Hackberry, Louisiana and Freeport, Texas and were impacted by changes in estimated margins during the first half of 2017, and to a lesser extent, the third quarter 2017. A majority of the impacts during the first half of 2017 occurred in the second quarter and relate to the Hackberry project, which was slightly above break-even at September 30, 2017. The project was impacted primarily by lower than anticipated craft labor productivity (including reductions to our forecasted productivity estimates as trending results of certain disciplines provided increased evidence that previously forecasted productivity estimates were unlikely to be achieved); weather related delays; increased material, construction and fabrication costs due to quantity growth and material delivery delays; higher than anticipated estimates from subcontractors for their work scopes; and extensions of schedule and related prolongation costs resulting from the aforementioned. The revised schedule was submitted to the owner during the second quarter 2017 and represented a several month extension from our March 31, 2017 estimates for certain LNG trains. Our current forecast for the project anticipates improvement in productivity from our overall historical experience on the project (as we make progress on each LNG train) and actions to reduce our schedule related costs. The aforementioned impact for the first half of 2017 includes the benefit of an increase in project price for claims on the project during the first quarter 2017 related primarily to weather related impacts.

The remaining impacts for the first half of 2017 relate to the Freeport project, which was impacted in the second quarter primarily by increased material, construction and fabrication costs due to quantity growth and material delivery delays, and potential extensions of schedule and related prolongation costs resulting from the aforementioned.

The impacts on the projects for the third quarter 2017 were primarily the result of additional prolongation costs, due in part to the direct impacts of Hurricane Harvey on the projects. Such direct impacts included the cost of demobilization and remobilization and damaged materials. The impacts for the third quarter 2017 were partially offset by an increase in project price for claims related to the Hurricane Harvey impacts on the projects. Although we have preliminarily estimated the direct impacts of Hurricane Harvey on the projects, we are continuing to evaluate and estimate the indirect impacts of the hurricane, including potential impacts to productivity and schedule and related prolongation costs. Although such impacts could be significant, we believe any costs incurred as a result of Hurricane Harvey are recoverable under the contractual provisions of our contracts, including force majeure.

If future direct and subcontract labor productivity differ from our current estimates, our schedules are further extended, we are unable to fully recover the direct and indirect costs associated with the impacts of Hurricane Harvey, or the projects incur schedule liquidated damages due to our inability to reach favorable legal or commercial resolution on such matters, the projects would experience further decreases in estimated margins.

16. SEGMENT INFORMATION

Our management structure and internal and public segment reporting are aligned based on the services offered by our two operating groups, which represent our reportable segments: Engineering & Construction and Fabrication Services. Our chief operating decision maker evaluates the performance of these two operating groups based on revenue and income from operations. Each operating group’s income from operations reflects corporate costs, allocated based primarily on revenue. Intersegment revenue for our continuing operations is netted against the revenue of the segment receiving the intersegment services. For the three months ended September 30, 2017 and 2016, intersegment revenue totaled approximately $72,000 and $73,500, respectively, and for the nine months ended September 30, 2017 and 2016, intersegment revenue totaled approximately $276,200 and $139,000, respectively. Intersegment revenue for these periods primarily related to services provided by our Fabrication Services operating group to our Engineering & Construction operating group.

As a result of the classification of our Capital Services Operations (which was primarily comprised of our former Capital Services reportable segment) and our Technology Operations (primarily comprised of our former Technology reportable segment and our Engineered Products Operations, representing a portion of our Fabrication Services reportable segment) as discontinued operations, the 2016 information for our remaining segments presented below has been recast to reflect: 1) a reallocation of certain corporate amounts previously allocated to the Capital Services segment, Technology segment and Fabrication Services segment that were not assignable to the discontinued operations, 2) the portions of the previously reported Capital Services segment, Technology segment and Fabrication Services segment that were not included in the Capital Services Operations or Technology Operations, and 3) the portions of our remaining two segments that were included in the Capital Services Operations or Technology Operations. In addition, revenue for the remaining segments has been recast to reflect the intersegment revenue with our Capital Services Operations and Technology Operations that was previously eliminated prior to the discontinued operations classification (approximately $39,000 and $75,900 for the three months ended September 30, 2017 and 2016, respectively, and approximately $178,200 and $208,600 for the nine months ended September 30, 2017 and 2016, respectively).

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Chicago Bridge & Iron Company N.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents total revenue and income (loss) from continuing operations by reportable segment for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Revenue
Engineering & Construction	$	1,348,033		$	1,670,879	$	3,409,081		$	4,794,000
Fabrication Services	389,731			466,998		1,259,609			1,406,713
Total revenue	$	1,737,764		$	2,137,877	$	4,668,690		$	6,200,713
Operating Income (Loss) From Continuing Operations
Engineering & Construction	$	13,051		$	126,824	$	(505,855	)	$	323,891
Fabrication Services	26,142			27,752		97,599			89,534
Total operating groups	39,193			154,576		(408,256		)	413,425
Restructuring related costs	(26,882		)	—		(30,882		)	—
Total operating income (loss) from continuing operations	$	12,311		$	154,576	$	(439,138	)	$	413,425

The following table presents total assets of our continuing operations by reportable segment and discontinued operations at September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Assets
Engineering & Construction	$	3,792,000	$	3,738,303
Fabrication Services	2,181,125		2,114,637
Total assets of continuing operations	5,973,125		5,852,940
Assets of discontinued Technology Operations (Note 4)	1,103,888		1,109,604
Assets of discontinued Capital Services Operations (Note 4)	—		876,876
Total assets	$	7,077,013	$	7,839,420

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is provided to assist readers in understanding our financial performance during the periods presented and significant trends that may impact our future performance. This discussion should be read in conjunction with our Financial Statements and the related notes thereto.

OVERVIEW

General—We provide a wide range of services through our ~~two~~three operating groups, including conceptual design, technology, engineering, procurement, fabrication, modularization, construction and commissioning services to customers in the energy infrastructure market throughout the world. Our ~~two~~ operating groups, which represent our reportable segments and continuing operations, include Engineering & Construction; ~~and~~ Fabrication Services; and Technology.

~~Our~~During ~~former~~the ~~Capital~~first ~~Services~~quarter ~~Operations~~2018, ~~(primarily~~we ~~comprised~~realigned of our ~~former~~Fabrication ~~Capital~~ Services ~~reportable~~and ~~segment),~~Technology ~~was~~operating ~~sold~~groups onto ~~June~~reflect ~~30,~~the ~~2017~~present ~~and~~management isoversight ~~reported~~of asour ~~a discontinued operation~~operations. Our ~~Technology~~“Engineered Products Operations”, ~~(primarily~~which ~~comprised~~was ofpreviously ~~our~~reported ~~former~~within ~~Technology reportable segment and~~ our ~~Engineered~~Fabrication ~~Products~~Services ~~Operations~~operating group, ~~representing~~is anow ~~portion~~reported ofwithin our ~~Fabrication~~Technology ~~Services~~operating ~~reportable~~group. The segment), isinformation ~~held~~ for ~~sale~~2017 ~~and~~has isbeen ~~also~~recast ~~reported~~to asconform ato ~~discontinued~~the ~~operation~~2018 ~~(see~~presentation. ~~Note~~See ~~2 and~~ Note 417 to our Financial Statements for further discussion of the realignment of our ~~discontinued~~reportable ~~operations)~~segments.

~~Our~~On ~~Capital~~December ~~Services~~18, ~~Operations~~2017, ~~provided~~we ~~comprehensive~~entered ~~and~~into ~~integrated~~an ~~maintenance~~agreement ~~services~~(the “Combination Agreement”) to combine with McDermott International, ~~environmental~~Inc. ~~engineering~~(“McDermott”) in an all-stock transaction whereby McDermott stockholders will own approximately 53% of the combined company and ~~remediation,~~our ~~construction~~shareholders ~~services,~~will ~~program~~own ~~management~~approximately 47% (the “Combination”). Under the terms of the Combination Agreement, ~~and~~our ~~disaster~~shareholders ~~response~~would ~~and~~be ~~recovery~~entitled ~~services~~to receive 2.47221 shares of McDermott common stock for ~~private-sector~~each ~~customers~~share ~~and~~of ~~governments~~our common stock (or 0.82407 ~~Our~~shares ~~Technology~~if ~~Operations~~McDermott ~~provide~~effects ~~proprietary~~a ~~process~~planned ~~technology~~three-to-one ~~licenses~~reverse ~~and~~stock ~~associated~~split ~~engineering~~prior ~~services~~to closing), ~~catalysts~~together with cash in lieu of fractional shares and ~~engineered~~subject ~~products,~~to ~~primarily~~any applicable withholding taxes. A meeting of our shareholders and a meeting of McDermott stockholders to vote on their respective Combination-related proposals have each been scheduled for May 2, 2018. The Combination is anticipated to close in the ~~petrochemical~~second quarter 2018, subject to receipt of approval of our shareholders and ~~refining~~McDermott ~~industries~~stockholders, and ~~offers~~satisfaction ~~process~~of ~~planning~~other ~~and~~customary ~~project~~closing ~~development~~conditions. ~~services~~See ~~and~~Note a2 ~~comprehensive~~to ~~program~~our Financial Statements for further discussion of ~~aftermarket~~the ~~support~~Combination.

WeOn ~~continue~~June ~~to be broadly diversified across the global energy infrastructure market with a backlog of $10.7 billion at September~~ 30, 2017, ~~(including~~we ~~approximately~~completed ~~$899.9~~the ~~million~~sale ~~related to our equity method joint ventures). Our geographic diversity is illustrated by approximately 15%~~ of our ~~year-to-date~~“Capital ~~2017~~Services ~~revenue~~Operations” ~~coming~~(primarily ~~from~~comprised ~~projects outside the U.S. and approximately 20%~~ of our ~~September 30,~~former ~~2017~~Capital ~~backlog~~Services ~~being~~reportable ~~comprised~~segment) ofto ~~projects~~CSVC ~~outside~~Acquisition ~~the~~Corp U(“CSVC”).S. ~~The~~Our ~~geographic~~Capital ~~mix~~Services ofOperations ~~our~~provided ~~revenue~~comprehensive ~~will~~and ~~evolve~~integrated ~~consistent~~maintenance ~~with~~services, ~~changes~~environmental inengineering ~~our~~and ~~backlog mix~~remediation, asconstruction ~~well~~services, asprogram ~~shifts~~management, inand ~~future~~disaster ~~global~~response ~~energy~~and ~~demand.~~recovery ~~Our~~services ~~diversity~~for inprivate-sector ~~energy~~customers ~~infrastructure~~and ~~end~~governments. ~~markets~~We ~~ranges~~considered ~~from~~the ~~downstream~~Capital ~~activities~~Services ~~such~~Operations asto ~~gas~~be ~~processing,~~a ~~liquefied~~discontinued ~~natural gas (“LNG”)~~operation, ~~refining,~~ and ~~petrochemicals~~accordingly, toits ~~fossil~~operating ~~based~~results ~~power~~for ~~plants~~the ~~and~~first ~~upstream~~quarter ~~activities~~2017 ~~such~~are classified as ~~offshore~~a ~~oil~~discontinued ~~and~~operation ~~gas~~within ~~and~~our ~~onshore~~Condensed ~~oil~~Consolidated ~~sands~~Statements ~~projects.~~of ~~Planned~~Operations ~~investments across~~ (the ~~natural~~“Statement(s) ~~gas~~of ~~value~~Operations”). ~~chain,~~Cash ~~including~~flows ~~LNG~~of ~~and~~the ~~petrochemicals,~~Capital ~~remain~~Services ~~strong~~Operations ~~over~~for the ~~intermediate~~first toquarter ~~long~~2017 ~~term,~~are ~~and~~not wereported ~~anticipate~~separately ~~additional~~within ~~benefits~~our ~~from~~Statements ~~continued~~of ~~investments~~Cash ~~in projects based on U~~Flows.S. ~~shale~~See ~~gas.~~Note ~~Global~~2 ~~investments in power~~ and ~~petrochemical~~Note ~~facilities~~5 ~~are expected~~ to ~~continue,~~our asFinancial ~~are~~Statements ~~investments~~for infurther ~~various~~discussion ~~types~~ of ~~facilities~~our ~~which~~discontinued ~~require~~Capital ~~storage~~Services ~~structures and pre-fabricated pipe~~Operations.

~~Our~~We ~~long-term~~continue ~~contracts~~to ~~are~~be ~~awarded~~broadly ondiversified aacross ~~competitively~~the ~~bid~~global ~~and~~energy ~~negotiated~~infrastructure ~~basis~~market ~~using~~with a ~~range~~backlog of ~~contracting~~$9.4 ~~options,~~billion ~~including~~at ~~cost-reimbursable~~March 31, ~~fixed-price~~2018 ~~and~~(excluding ~~hybrid,~~approximately ~~which has both cost-reimbursable and fixed-price characteristics~~$1.1 ~~Under~~billion ~~cost-reimbursable~~related ~~contracts,~~to ~~we generally perform~~ our ~~services~~equity inmethod ~~exchange~~joint ~~for~~ventures). aThe ~~price~~geographic ~~that~~mix ~~consists~~ of ~~reimbursement~~our ofrevenue ~~all~~will ~~customer-approved~~evolve ~~costs~~consistent ~~and~~with achanges ~~profit~~in ~~component,~~our ~~which~~backlog ~~is typically a fixed rate per hour~~mix, anas ~~overall~~well ~~fixed~~as ~~fee~~shifts orin afuture ~~percentage~~global ofenergy ~~total reimbursable costs~~demand. ~~Under~~Our ~~fixed-price~~diversity ~~contracts,~~in weenergy ~~perform~~infrastructure ~~our~~end ~~services~~markets ~~and~~ranges ~~execute~~from ~~our~~downstream ~~projects~~activities atsuch anas ~~established~~gas ~~price.~~processing, ~~The~~liquefied ~~timing~~natural ofgas ~~our~~(“LNG”), ~~revenue recognition may be impacted by the contracting structure of our contracts. Cost-reimbursable contracts~~refining, and ~~hybrid contracts with a more significant cost-reimbursable component~~petrochemicals, ~~generally~~to ~~provide~~fossil ~~our~~based ~~customers~~power ~~with~~plants ~~greater~~and ~~influence~~upstream ~~over~~activities ~~the~~such ~~timing~~as ofoffshore ~~when~~oil weand ~~perform~~gas ~~our work,~~ and ~~accordingly,~~onshore ~~such~~oil ~~contracts~~sands ~~often~~projects. ~~result~~Planned ininvestments ~~less~~across ~~predictability with respect to~~ the ~~timing~~natural ofgas ~~our~~value ~~revenue.~~chain, ~~Fixed-price~~including ~~contracts,~~LNG and ~~hybrid contracts with a more significant fixed-price component~~petrochemicals, ~~tend~~remain tostrong ~~provide us with greater control~~ over ~~project schedule and~~ the ~~timing~~intermediate ofto ~~when~~long ~~work is performed and costs are incurred~~term, and ~~accordingly,~~we ~~when~~anticipate ~~revenue~~additional isbenefits ~~recognized.~~from ~~Our~~continued ~~shorter-term~~investments ~~contracts~~in ~~and~~projects ~~services~~based ~~are generally provided~~ on aU.S. ~~cost-reimbursable,~~shale ~~fixed-price or unit price basis~~gas. ~~Our~~Global ~~September 30,~~investments ~~2017~~in ~~backlog~~power ~~distribution~~and bypetrochemical ~~contracting~~facilities ~~type~~are ~~was~~expected ~~approximately~~to ~~90% fixed-price~~continue, ~~hybrid,~~as orare ~~unit~~investments ~~based,~~in ~~and~~various ~~10%~~types ~~cost-reimbursable~~of ~~and~~facilities iswhich ~~further~~require ~~described~~storage ~~below~~structures ~~within~~and ~~our~~pre-fabricated ~~operating group discussion~~pipe.

~~New~~Our ~~awards~~long-term ~~represent~~contracts ~~the~~are ~~expected~~awarded ~~revenue~~on ~~value~~a ofcompetitively ~~new~~bid ~~contract~~and ~~commitments~~negotiated ~~received~~basis ~~during~~using a ~~given~~range ~~period~~of contracting options, asincluding ~~well~~cost-reimbursable, asfixed-price ~~scope~~and ~~growth~~hybrid, onwhich ~~existing~~has ~~commitments~~both cost-reimbursable and fixed-price characteristics. ~~Backlog~~Under ~~represents~~cost-reimbursable ~~the~~contracts, ~~unearned~~we ~~value~~generally ofperform our ~~new~~services ~~awards.~~in ~~New~~exchange ~~awards~~for a price that consists of reimbursement of all customer-approved costs and ~~backlog~~a ~~include~~profit ~~the~~component, ~~entire~~which ~~award~~is ~~values~~typically ~~for~~a ~~joint~~fixed ~~ventures~~rate per hour, an overall fixed fee or a percentage of total reimbursable costs. Under fixed-price contracts, we ~~consolidate~~perform our services and execute our ~~proportionate~~projects ~~share~~at an established price. The timing of ~~award~~our ~~values~~revenue ~~for~~recognition ~~joint~~may ~~ventures~~be weimpacted ~~proportionately~~by ~~consolidate~~the contracting structure of our contracts. ~~New~~Cost-reimbursable ~~awards~~contracts, and ~~backlog~~hybrid ~~also~~contracts ~~include~~with ~~our~~a ~~pro~~more significant cost-~~rata~~reimbursable ~~share~~component, ofgenerally ~~the~~provide ~~award~~our ~~values~~customers ~~for~~with ~~unconsolidated~~greater ~~joint~~influence ~~ventures~~over the timing of when we ~~account~~perform ~~for~~our ~~under~~work, and accordingly, such contracts often result in less predictability with respect to the ~~equity~~timing ~~method~~of our revenue. AsFixed-price contracts, and hybrid contracts with a more significant fixed-price component, tend to provide us with greater control over project schedule and the ~~net~~timing ~~results~~of ~~for~~when ~~our~~work ~~equity~~is ~~method~~performed ~~joint~~and ~~ventures~~costs are ~~recognized~~incurred, asand ~~equity earnings~~accordingly, ~~their~~when revenue is ~~not~~recognized. ~~presented~~Our inshorter-term ~~our~~contracts ~~Condensed~~and ~~Consolidated~~services ~~Statement~~are ofgenerally ~~Operations~~provided ~~(“Statement~~on ofa ~~Operations”)~~cost-reimbursable, fixed-price or unit price basis. Our March 31, 2018 backlog distribution by contracting type

3531

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~~Backlog~~was ~~for~~approximately ~~each~~90% offixed-price ~~our~~or ~~operating~~hybrid ~~groups~~basis generally consists of several hundred contracts, which are being executed globally. These contracts vary in size from less than one hundred thousand dollars to several billion dollars in contract value, with varying durations that can exceed five years. The timing of new awards and ~~differing~~10% ~~types,~~cost-reimbursable ~~sizes,~~ and ~~durations~~is offurther ~~our~~described ~~contracts,~~below ~~combined~~within ~~with their geographic diversity and stages of completion, often results in fluctuations in~~ our ~~quarterly~~ operating group ~~results as a percentage of operating group revenue~~discussion. In addition, the relative contribution of each of our operating groups, and selling and administrative expense fluctuations, will impact our quarterly consolidated results as a percentage of consolidated revenue. Selling and administrative expense fluctuations are impacted by our stock-based compensation costs, which are generally higher in the first quarter of each year due to the timing of stock awards and the accelerated expensing of awards for participants who are eligible to retire.

InBacklog ~~addition~~represents to the ~~quarterly~~unrecognized ~~variability~~revenue ~~that~~value ~~occurs~~of in our ~~business,~~contract ~~our~~commitments. ~~future~~New ~~quarterly~~awards ~~consolidated~~represent ~~operating~~the ~~results~~total ~~will~~expected berevenue ~~impacted~~value ~~by the sale~~ of ~~our~~new ~~Capital~~contract ~~Services~~commitments ~~Operations,~~received ~~which~~during ~~closed~~a ongiven ~~June 30~~period, ~~2017~~as ~~and~~well isas ~~reported~~scope asgrowth aon ~~discontinued~~existing ~~operation~~contract ~~(see~~commitments. ~~Note~~New 2awards and ~~Note~~backlog 4include tothe ~~our~~entire ~~Financial~~award ~~Statements~~values for ~~further~~joint ~~discussion).~~ventures ~~Further, in July 2017,~~ we ~~initiated~~consolidate ~~a plan to market~~ and ~~sell~~ our ~~Technology~~proportionate ~~Operations,~~share ~~the proceeds~~ of ~~which~~award ~~will~~values befor ~~used~~joint toventures ~~significantly~~we ~~reduce~~proportionately ~~our outstanding debt, discussed below within “Liquidity and Capital Resources”~~consolidate. WeAs ~~classified~~ the ~~Technology~~net ~~Operations~~results ~~as held~~ for ~~sale during the third quarter 2017 and~~ our ~~future~~equity ~~quarterly~~method ~~consolidated~~joint ~~operating~~ventures ~~results~~are ~~will~~recognized ~~be impacted subsequent to the sale. In addition,~~ as ~~discussed~~equity ~~below within “Results of Operations”~~earnings, ~~during~~their ~~the~~revenue ~~first~~is ~~nine~~not ~~months~~presented ~~of 2017 we experienced changes~~ in ~~estimated margins on~~ our ~~two~~Statements ~~U.S.~~of ~~LNG~~Operations, ~~export facility projects~~ and ~~two of our U.S. gas turbine power projects within our Engineering & Construction operating group~~accordingly, ~~which~~are ~~negatively~~excluded ~~impacted~~from our ~~results,~~new awards and ~~will~~GAAP ~~result~~basis ~~in future revenue on the projects being recognized at these lower margins until the~~ backlog ~~for such projects is completed~~.

AsBacklog ~~previously~~for ~~disclosed,~~each asof aour ~~result~~operating ofgroups ~~project~~generally ~~impacts~~consists inof ~~the~~several ~~second~~hundred ~~quarter 2017~~contracts, wewhich ~~would~~are ~~not~~being ~~have~~executed ~~been~~globally. These contracts vary in ~~compliance~~size ~~with~~from ~~our~~less ~~previously~~than ~~amended~~one ~~financial~~hundred ~~covenants~~thousand ~~for~~dollars ~~our~~in ~~Senior~~contract ~~Facilities~~value asto ofseveral ~~June~~billion 30dollars, ~~3017~~with ~~without~~varying ~~certain~~durations ~~waivers~~that ~~and~~can ~~amendments~~exceed five years. ~~Accordingly,~~The ~~effective~~timing ~~August~~of 9new awards and differing types, ~~2017~~sizes, and ~~effective~~durations ~~for~~of ~~the~~our ~~period~~contracts, ~~ended~~combined ~~June~~with ~~30,~~their ~~2017~~geographic diversity and stages of completion, weoften ~~amended~~results in fluctuations in our ~~Senior~~quarterly ~~Facilities~~operating group results as a percentage of operating group revenue. ~~Such~~In ~~amendments~~addition, ~~impacted~~the relative contribution of each of our ~~debt~~operating ~~classification~~groups, atand ~~September~~selling 30and administrative expense fluctuations, ~~2017~~will impact our quarterly consolidated results as a percentage of consolidated revenue. AtSelling ~~September~~and ~~30,~~administrative ~~2017~~expense fluctuations are impacted by our stock-based compensation costs, wewhich ~~were~~are generally higher in ~~compliance~~the ~~with~~first ~~all~~quarter of ~~our~~each ~~restrictive~~year ~~and~~due ~~financial~~to ~~covenants.~~the ~~See~~timing ~~“Liquidity~~of stock awards and ~~Capital~~the ~~Resources”~~accelerated ~~below~~expensing of awards for ~~further~~participants ~~discussion~~that are eligible to retire.

In addition to the quarterly variability that occurs in our business, our future quarterly consolidated operating results will be impacted by the sale of our Capital Services Operations, which closed on June 30, 2017 and is reported as a discontinued operation (see Note 2 and Note 5 to our Financial Statements for further discussion). In addition, as discussed in our 2017 Form 10-K, during 2017 we experienced changes in estimated margins on our two U.S. LNG export facility projects and our U.S. gas turbine power project in the Northeast (all within our Engineering & Construction operating group), which will result in future revenue on the projects being recognized at these lower margins until the backlog for such projects is completed.

As a result of noncompliance with certain financial covenants, during 2017 we entered into amendments for our Senior Facilities (defined below). Further, as discussed above, on December 18, 2017, we entered into the Combination Agreement with McDermott. The Combination is anticipated to close in the second quarter 2018, subject to receipt of approval of our shareholders and McDermott stockholders and other customary closing conditions. At March 31, 2018, we were in compliance with all of our restrictive and financial covenants. See “Liquidity and Capital Resources” below for further discussion.

Engineering & Construction—Our Engineering & Construction operating group provides engineering, procurement, and construction (“EPC”) services for major energy infrastructure facilities.

Backlog for our Engineering & Construction operating group comprised approximately $96.28 billion (8673%) of our consolidated ~~September~~March 3031, ~~2017~~2018 backlog (~~including~~excluding approximately $~~899~~538.92 million related to our equity method joint ventures). The backlog composition by end market was approximately 4030% ~~petrochemical~~power, 30% ~~LNG~~petrochemical, 2520% ~~power~~LNG, and 520% refining. Our petrochemical backlog was primarily concentrated in the U.S. (and the Middle East ~~region~~with respect to our equity method backlog) and we anticipate that our future opportunities will continue to be primarily derived from these regions. Our LNG backlog was primarily concentrated in the U.S. and we anticipate that our future opportunities will be primarily derived from the U.S. and Africa. Our power backlog was primarily concentrated in the U.S. and we anticipate that our future opportunities will be primarily derived from North America. Our refining-related backlog was primarily concentrated in the Middle East and Russia and we anticipate that our future opportunities will continue to be primarily derived from these regions. Our ~~September~~March 3031, ~~2017~~2018 backlog distribution for this operating group by contracting type was approximately 9085% fixed-price and hybrid and 1015% cost-reimbursable. Backlog related to our equity method joint ventures was primarily associated with our petrochemical work in the Middle East.

Fabrication Services—Our Fabrication Services operating group provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules; and manufacturing and distribution of pipe and fittings.

Backlog for our Fabrication Services operating group comprised approximately $1.56 billion (1417%) of our consolidated ~~September~~March 3031, ~~2017~~2018 backlog. The backlog composition by end market was approximately 4540% petrochemical, 3525% LNG (including low temp and cryogenic), 1015% power, 510% gas processing, 5% refining, and 5% other end markets. Our ~~September~~March 3031, ~~2017~~2018 backlog distribution for this operating group by contracting type was ~~approximately~~primarily ~~95%~~comprised of fixed-price, hybrid, or unit based, ~~with the remainder being cost-reimbursable~~contracts.

36Technology—Our Technology operating group provides proprietary process technology licenses and associated engineering services, catalysts and engineered products, primarily for the petrochemical and refining industries, and offers process planning and project development services and a comprehensive program of aftermarket support. Technology also has a 50% owned unconsolidated joint venture that provides proprietary process technology licenses and associated engineering

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services and catalysts, primarily for the refining industry, as well as a 33.3% owned unconsolidated joint venture that is commercializing a new natural gas power generation system that recovers the carbon dioxide produced during combustion.

Backlog for our Technology operating group comprised approximately $1.0 billion (10%) of our consolidated March 31, 2018 backlog (excluding approximately $593.2 million related to our equity method joint ventures) and was primarily comprised of fixed-price contracts.

RESULTS OF OPERATIONS

AsOur a result of the classification of the operating results of our Capital Services Operations (primarily comprised of our former Capital Services reportable segment) and our Technology Operations (primarily comprised of our former Technology reportable segment and our Engineered Products Operationsbacklog, ~~representing~~new ~~a portion of our Fabrication Services reportable segment) as discontinued operations~~awards, ~~the~~revenue results of our remaining segments for the 2016 periods presented have been recast to reflect: 1) a reallocation of certain corporate amounts previously allocated to the Capital Services segment, Technology segment and ~~Fabrication~~income ~~Services~~from ~~segment that were not assignable to discontinued~~ operations, 2)by ~~the~~reportable ~~portions of the previously reported Capital Services~~ segment, ~~Technology~~are ~~segment~~as and Fabrication Services segment that were not included in the Capital Services Operations or Technology Operations, and 3) the portions of our remaining two segments that were included in the Capital Services Operations and Technology Operations. follows:

In addition, backlog, new awards and revenue for the remaining segments has been recast in the tables below to reflect the intersegment amounts with our Capital Services Operations and Technology Operations that were previously eliminated prior to the discontinued operations classification. Intersegment elimination adjustments include the following: 1) September 30, 2017 and December 31, 2016 backlog of $125.7 million and $166.2 million, respectively, 2) third quarter and year-to-date 2017 new awards of $4.9 million and $65.5 million, respectively and 2016 of $106.5 million and $134.9 million, respectively, and 3) third quarter and year-to-date 2017 revenue of $39.0 million and $75.9 million, respectively and 2016 of $178.2 million and $208.6 million, respectively. Unless otherwise noted, the tables and discussions below relate to our continuing operations.



	March 31, 2018		% of Total	December 31, 2017		% of Total
Backlog	(In thousands)
Engineering & Construction	$	6,813,855	73%	$	7,675,662	76%
Fabrication Services	1,584,708		17%	1,532,592		15%
Technology	970,438		10%	947,568		9%
Total backlog - excluding equity method backlog (GAAP)	9,369,001		100%	10,155,822		100%
Engineering & Construction equity method backlog	538,246			655,174
Technology equity method backlog	593,226			579,311
Total equity method backlog	1,131,472			1,234,485
Total backlog - including equity method backlog ⁽¹⁾	$	10,500,473		$	11,390,307

	Three Months Ended March 31,
	2018		% of Total	2017		% of Total
New Awards	(In thousands)
Engineering & Construction	$	664,853	59%	$	2,236,173	80%
Fabrication Services	310,905		27%	339,065		12%
Technology	157,599		14%	220,893		8%
Total new awards - excluding equity method new awards	1,133,357		100%	2,796,131		100%
Technology equity method new awards	24,780			46,656
Total new awards - including equity method new awards	$	1,158,137		$	2,842,787

	2018		% of Total	2017		% of Total
Revenue
Engineering & Construction	$	1,365,395	78%	$	1,280,753	70%
Fabrication Services	262,653		15%	422,677		23%
Technology	117,571		7%	123,922		7%
Total revenue	$	1,745,619	100%	$	1,827,352	100%

	2018		% of Revenue	2017		% of Revenue
Income From Operations
Engineering & Construction	$	54,817	4.0%	$	5,414	0.4%
Fabrication Services	25,592		9.7%	33,497		7.9%
Technology	32,398		27.6%	40,077		32.3%
Total operating groups	112,807		6.5%	78,988		4.3%

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