shaw group 656631FE-D4E6-4F14-A3DB-B8C5E6B7BB07_1Q2009
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shaw group 656631FE-D4E6-4F14-A3DB-B8C5E6B7BB07_1Q2009 Presentation Transcript

  • 1. The Shaw Group Inc. First Quarter FY 2009: Earnings Conference Call Thursday, January 8, 2009 J.M. Bernhard Jr. Chairman, President & Chief Executive Officer Brian K. Ferraioli 85M102006D Executive Vice President & Chief Financial Officer
  • 2. Forward Looking Statements & Regulation G Disclosure This presentation contains forward-looking information and statements within the meaning of the Private Securities Litigation Act of 1995. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their effect on us. However, the absence of these words does not mean that the statements are not forward-looking. Our forward-looking statements involve significant risks and uncertainties, some of which are beyond our control and actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including current economic conditions and resulting capital constraints, as well as the factors we discuss or refer to in the “Risk Factors” section of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission (SEC) and on our website under the heading “Forward-Looking Statements.” This presentation contains non-GAAP measures as defined by the SEC rules and regulations. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached appendix and on our Web site at 02M102007D www.shawgrp.com in the Investor Relations section under “Regulation G Disclosures.” 2
  • 3. Q-1 FY 2009: Executive Summary • Very strong quarter from operations: Record revenue and EBITDA (excluding Westinghouse) • $161M non-cash foreign exchange translation loss on Westinghouse yen bonds, as Yen continued to appreciate vs. the Dollar • Subsequent to quarter end, signed nuclear EPC contract with Progress Energy Florida, the largest contract in our history 02M102007D 3
  • 4. Financial Review 02M102007D 4
  • 5. Q-1 FY 2009: Quarter in Summary Record Q-1 FY 2009 Q-1 FY 2008 (in millions, except per As Reported Westinghouse Actuals Actuals share data) Segment Excluding Excluding Westinghouse* Westinghouse* Revenue $ 1,900.4 $ 0.0 $ 1,900.4 $ 1,712.2 Gross Profit 188.1 0.0 188.1 135.0 GP% 9.9% N/A 9.9% 7.9% EBITDA* (37.5) (158.7) 121.2 78.6 EBITDA % (2.0)% N/A 6.4% 4.6% Net Income (39.9) (102.7) 62.8 37.7 Diluted EPS (0.48) (1.23) 0.75 0.45 Operating Cash Flow (98.9) (14.7) (84.2) 121.7 New Awards 1,131.7 N/A 1,131.7 1,363.6 •• Earnings continue to be led by E&C, Fossil, and F&M contracts, but E&I also had a strong quarter Earnings continue to be led by E&C, Fossil, and F&M contracts, but E&I also had a strong quarter •• Yen/Dollar FX rate continues to decline (95 at quarter end vs. 109 at end of FY08) resulting in a Yen/Dollar FX rate continues to decline (95 at quarter end vs. 109 at end of FY08) resulting in a $161M non-cash pre-tax loss $161M non-cash pre-tax loss •• Cash flow is project timing related, after a very strong Q-4 FY08 (generated $286M) Cash flow is project timing related, after a very strong Q-4 FY08 (generated $286M) •• Q-2 and the balance of FY09 are forecast to be cash positive; previous guidance of $250M-$300M 02M102007D Q-2 and the balance of FY09 are forecast to be cash positive; previous guidance of $250M-$300M of operating cash flow remains unchanged of operating cash flow remains unchanged *See Appendices for a reconciliation to the corresponding GAAP measure. 5
  • 6. Q-1 FY 2009: Segment Analysis Record Revenue Gross Profit Gross Profit % (in millions) Q-1 FY 2009 Q-1 FY 2008 Q-1 FY 2009 Q-1 FY 2008 Q-1 FY 2009 Q-1 FY 2008 Fossil & Nuclear $ 676.6 598.5 $ 51.8 $ 42.9 7.7% 7.2% E&C1* 218.6 161.7 52.4 16.4 24.0% 10.1% Maintenance 334.1 290.4 11.7 14.8 3.5% 5.1% E&I2* 401.4 365.8 34.5 25.1 8.6% 6.9% F&M 164.7 136.6 35.7 35.1 21.7% 25.7% Corporate 1.9 0.7 2.0 0.7 N/M N/M $ 1,797.3 $ 1,553.7 $ 188.1 $ 135.0 10.5% 8.7% Fossil & Nuclear: Continues to be driven by fossil contracts (new build and air emissions) Fossil & Nuclear: Continues to be driven by fossil contracts (new build and air emissions) E&C: Increased volume and margins vs. prior year; Q-1 FY09 includes cost reduction estimates on E&C: Increased volume and margins vs. prior year; Q-1 FY09 includes cost reduction estimates on several projects several projects Maintenance: Revenues improved with higher volumes, but margins less than prior year due to Maintenance: Revenues improved with higher volumes, but margins less than prior year due to execution of higher-margin construction projects in FY08 execution of higher-margin construction projects in FY08 E&I: Continued improvement in execution; Q-1 FY09 revenues reflect some hurricane emergency E&I: Continued improvement in execution; Q-1 FY09 revenues reflect some hurricane emergency response work response work F&M: Continued solid performance; Q-1 FY09 reduction in gross profit reflects change in product mix F&M: Continued solid performance; Q-1 FY09 reduction in gross profit reflects change in product mix and some costs associated with Mexico facility and development of modular facility and some costs associated with Mexico facility and development of modular facility 02M102007D 1E&C revenues presented excluding pass through costs of $103.1M and $134.4M for Q-1 FY2009 and Q-1 FY2008, respectively. 2E&Irevenues presented net of previously consolidated military privatization joint venture revenues of $24.1M for Q-1 FY08 (no longer applicable in Q-1 FY09). *See Appendices for a reconciliation to the corresponding GAAP measure. 6
  • 7. Foreign Exchange Impact on Investment in Westinghouse Yen Denominated Bonds & Put Option ($ equivalent in millions, except exchange rate data) Date of GAAP Investment Treatment 11/30/2008 Change Yen/Dollar Exchange Rate 119.43 95.48 23.95 Yen Denominated Bonds RECORDED $ 1,080 $ 1,351 $ (271) Yen Denominated Put Option UNRECORDED 1,044 1,306 262 Principal Exposure $ 36 $ 45 $ (9) •• If Shaw were to exercise the Put, the net exposure would be approximately $45M, which has If Shaw were to exercise the Put, the net exposure would be approximately $45M, which has changed $9M from the exposure at the original investment date. changed $9M from the exposure at the original investment date. •• Q-1 FY09 FX loss totaled $161.2M pre-tax ($98.2M after-tax). Q-1 FY09 FX loss totaled $161.2M pre-tax ($98.2M after-tax). •• FY09 YTD FX loss would approximate $185M pre-tax (at 93.8 Yen // U.S. dollar). FY09 YTD FX loss would approximate $185M pre-tax (at 93.8 Yen U.S. dollar). •• Dividends are based on the U.S. GAAP Net Income of Westinghouse; target distribution during Dividends are based on the U.S. GAAP Net Income of Westinghouse; target distribution during the put period is $24M per year for Shaw (dividend rights continue for put period even if not the put period is $24M per year for Shaw (dividend rights continue for put period even if not paid during period of Shaw ownership). paid during period of Shaw ownership). 02M102007D •• Received $32M in dividends through 12/31/08 ($29M in Q-2 FY09) vs. $48M 2-year target. Received $32M in dividends through 12/31/08 ($29M in Q-2 FY09) vs. $48M 2-year target. 7
  • 8. Q-1 FY 2009: Cash and Debt 937 ($ in millions) 831 Cash Debt 688 663 482 361 218 178 165 107 86 28 28 17 18 10 8 13 Q-1 FY07 Q-2 FY07 Q-3 FY07 Q-4 FY07 Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Trailing Twelve Months Operating Cash Flow: $416M Trailing Twelve Months Operating Cash Flow: $416M 02M102007D Notes: 1. Cash balance represents the sum of cash, cash equivalents and restricted cash. 2. Total debt excludes Japanese Yen-denominated bonds secured by Investment in Westinghouse. See Appendices for a reconciliation to the corresponding GAAP measure. 8
  • 9. Operations Review 02M102007D 9
  • 10. Business Segments Power: Power: Energy & Fabrication & Environmental & Fossil & Nuclear Maintenance Chemicals Manufacturing Infrastructure The Shaw Group Inc. is a full service provider of engineering, design, technology, procurement, construction, maintenance, fabrication, manufacturing, consulting and facilities management services for private sector and government clients in the energy, chemicals, environmental, infrastructure and emergency response markets. 02M102007D 10
  • 11. Stable Customer Base in Uncertain Times Shaw’s $14.8B Backlog at 11/30/08 is Comprised of 3 Major • Regulated Utilities Customer Classes – Solid balance sheets backed by the ability to recover costs through the National or regulatory process; capital projects are International Oil long-term (multi-decade) investments not Companies: subject to short-term economics 14% • U.S. Government – Spending expected to remain strong with potential stimulus package; focus likely Regulated to remain on economy, military Utilities: transformation, terrorism, and Other: 35% infrastructure improvements 18% • National or International Oil Companies – Large amounts of cash on hand; long- U.S. term investment horizon; government Government: backing 33% Approximately 82%, or $12B, of backlog is comprised of regulated utilities, Approximately 82%, or $12B, of backlog is comprised of regulated utilities, national or international oil companies, and the U.S. Government, who provide national or international oil companies, and the U.S. Government, who provide financial strength and stability, are expected to continue capital investments, and financial strength and stability, are expected to continue capital investments, and 02M102007D who should reduce the risk of project delays, payment defaults, or cancellations. who should reduce the risk of project delays, payment defaults, or cancellations. 11
  • 12. Market Overview: Power • Fossil projects in backlog continue to be executed as planned • Domestic scrubber market continues to be strong; expect significant bookings in 2009 • Domestic nuclear market appears to be accelerating; signed largest contract in our history with Progress Energy Florida • International nuclear market for AP1000™ developing • Interest in domestic gas fired and geothermal projects increasing • Maintenance market continues to be steady; nuclear uprate activity expected to increase 02M102007D 12
  • 13. Major Power Market Opportunities Europe China Indonesia & Philippines Brazil India United States South Africa Australia & New Zealand 02M102007D IEA forecasts $5.2 trillion in global power IEA forecasts $5.2 trillion in global power generation investment from 2005-2030 generation investment from 2005-2030 13
  • 14. Nuclear Renaissance First Movers Alternate Energy PPL Generation Holdings Unistar Susquehanna Bruneau Nine Mile Detroit Edison Fermi Unistar Exelon Calvert Cliffs Clinton AmerenUE Callaway Dominion North Anna Progress Energy Harris Unistar Duke Amarillo TVA William Lee Bellefonte Entergy Grand Gulf Luminant Comanche Peak AP1000™ SCE&G V.C. Summer EPR Entergy River Bend ESBWR Progress Energy Southern ABWR Exelon Levy County Vogtle Victoria County APWR NRG Entergy 02M102007D South Texas FP&L To Be Determined Turkey Point 14
  • 15. Market Overview: Energy & Chemicals • Projects in backlog continue to be executed as planned • No significant changes at this time to our 2009 sales prospects • If global economy / price of oil remain depressed, clients likely to focus on higher margin technology and consulting services – a Shaw strength 02M102007D 15
  • 16. Market Overview: Environmental & Infrastructure • 93% of existing backlog is with the U.S. Federal Government • Projects in backlog continue to be executed as planned • Segment well-positioned for potential U.S. Federal stimulus plan (e.g., incremental levee, coastal restoration, environmental remediation, infrastructure projects), although not assumed in our 2009 financial forecast 02M102007D 16
  • 17. Consolidated Backlog and Backlog Conversion (as of 11/30/08) Backlog by Business Segment Expected Backlog Conversion ($ in billions) Consolidated Next Fabrication & Manufacturing $15.6 $14.8 12 months $14.3 Energy & Chemicals $0.8 41% $0.7 Environmental & Infrastructure $0.7 $2.2 $6.0B $2.0 Maintenance $2.6 Fossil & Nuclear $3.7B $9.1 $5.1 $2.6 $5.1B $5.0 $0.4 $1.4 $6.7 $1.7 $5.8 13-24 months $1.4 $1.3 $4.8 25% $2.8 Greater than 24 months $1.3 $6.7 34% $6.1 $5.8 $3.2 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Q-1 FY 2009 Backlog excludes majority of domestic nuclear work expected to be performed under signed Backlog excludes majority of domestic nuclear work expected to be performed under signed 02M102007D EPC contracts (Georgia Power, SCE&G, and Progress Energy Florida) EPC contracts (Georgia Power, SCE&G, and Progress Energy Florida) 17
  • 18. Fossil and Nuclear Projects Present Significant Upside To Current Backlog Backlog + Projects Where Shaw Has Been Selected But Work Has Not Been Released $36.8 ($ in billions) Consolidated Fabrication & Manufacturing RWE npower Energy & Chemicals Environmental & Infrastructure Maintenance Fossil & Nuclear 3 Signed Nuclear Fossil & Nuclear – selected but $13 EPC Contracts projects not in backlog $15.6 $14.3 Current $0.7 Backlog - $14.8 $2.0 $9.1 $5.0 $6.7 $5.8 $4.8 $1.3 $5.8 02M102007D FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Q-1 FY09 Full Spectrum of Shaw’s Workload Approaching $37B Full Spectrum of Shaw’s Workload Approaching $37B 18
  • 19. Fossil & Nuclear Q-1 FY09 in Summary Q-1 2009 New Awards: $489M • Earnings for the quarter driven • Approx. $400M EPC contract by Fossil contracts (primarily with NV Energy for combined new build coal and air cycle gas power plant near emissions projects) Las Vegas • Nuclear projects expected to begin having more significant earnings impact in FY 2010 Backlog EBITDA* ($ in billions) ($ in millions) 41.7 6.9 6.6 6.7 39.6 6.1 35.8 5.8 27.0 20.5 Fossil & Nuclear Backlog: Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 $5.8 billion Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 EBITDA from nuclear division forecast to approximate $10M in EBITDA from nuclear division forecast to approximate $10M in FY 2009, $75M in FY 2010, and $125M in FY 2011 FY 2009, $75M in FY 2010, and $125M in FY 2011 39% (excludes F&M’s earnings from fabrication activities and modular (excludes F&M’s earnings from fabrication activities and modular 02M102007D components, as well as earnings from Investment in Westinghouse) components, as well as earnings from Investment in Westinghouse) Total Shaw Backlog: $14.8 billion *See Appendices for a reconciliation to the corresponding GAAP measure. 19
  • 20. Maintenance Q-1 2009 New Awards: $184M Q-1 FY09 in Summary • Majority of Q-1 new awards • Steady, consistent performance from smaller contracts during Fall outage season • Fewer higher margin construction projects in Q-1 FY09 as compared to 08 Backlog EBITDA* ($ in millions) ($ in billions) 15.2 1.6 1.5 1.5 1.4 11.9 1.3 10.2 9.0 Maintenance Backlog: (0.5) $1.3 billion Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 9% Maintenance contracts for 41 of the 104 existing nuclear Maintenance contracts for 41 of the 104 existing nuclear reactors in the U.S., including fleet-wide services on the 2 reactors in the U.S., including fleet-wide services on the 2 largest U.S. fleets largest U.S. fleets 02M102007D Total Shaw Backlog: $14.8 billion *See Appendices for a reconciliation to the corresponding GAAP measure. 20
  • 21. Energy & Chemicals Q-1 FY09 in Summary Q-1 2009 New Awards: $166M • Increase in volume and • Majority of Q-1 new awards margins drove another strong driven by scope increases on quarter existing projects • Strong operational • Engineering and design work performance and reduced cost for multi-national petrochemical estimates on several projects client helped drive quarterly earnings Backlog EBITDA* Record ($ in billions) ($ in millions) 41.6 39.8 33.6 2.3 2.3 2.2 2.2 2.0 E&C Backlog: 13.2 9.4 $2.0 billion 14% Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Major prospects internally authorized by clients Major prospects internally authorized by clients 02M102007D appear to be proceeding as planned appear to be proceeding as planned Total Shaw Backlog: $14.8 billion *See Appendices for a reconciliation to the corresponding GAAP measure. 21
  • 22. Fabrication & Manufacturing Q-1 FY09 in Summary Q-1 2009 New Awards: $77M • Continued strong operational • Majority of Q-1 new awards performance driven by scope increases on existing projects • Projects in backlog continue as planned EBITDA* Backlog ($ in millions) ($ in billions) 39.4 31.8 31.8 0.8 0.7 0.7 28.2 0.7 0.7 27.1 F&M Backlog: $0.7 billion 5% Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 Progress continues on new nuclear module fabrication and Progress continues on new nuclear module fabrication and assembly plant in Lake Charles, LA assembly plant in Lake Charles, LA 02M102007D Total Shaw Backlog: $14.8 billion *See Appendices for a reconciliation to the corresponding GAAP measure. 22
  • 23. Module Fabrication and Assembly Facility • Work has commenced on the $100 million / 600,000 square foot facility located in Lake Charles, LA • Will produce structural, piping and equipment modules for new nuclear power plants utilizing the Westinghouse AP1000™ technology • Shaw’s 3 existing nuclear EPC contracts are expected to generate approx. $1B in revenues for this facility 02M102007D 23
  • 24. Environmental & Infrastructure Q-1 FY09 in Summary Q-1 2009 New Awards: $216M • New awards primarily driven by • MOX and Inner Harbor contracts within the Federal Navigation Canal Hurricane business division Protection projects continue to • Some hurricane emergency perform well response work • Overall, business is again performing well • Sold interest in final military housing privatization ventures Backlog EBITDA* 20.8 ($ in billions) ($ in millions) 20.7 5.2 5.1 5.0 13.0 11.5 2.8 2.8 E&I Backlog: $5.0 billion 5.2 33% Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 F09 Q-1 FY08 Q-2 FY08 Q-3 FY08 Q-4 FY08 Q-1 FY09 E&I is returning to being a consistent performer 02M102007D E&I is returning to being a consistent performer Total Shaw Backlog: $14.8 billion *See Appendices for a reconciliation to the corresponding GAAP measure. 24
  • 25. Q-1 FY09 Summary • Non-cash FX translation loss continues to create volatility in GAAP earnings, but operational performance remains strong • All operating segments had strong financial results this quarter • Execution of E&C, Fossil, and F&M contracts continue to drive earnings • E&I returning to being a consistent and profitable performer • Domestic nuclear market continues to develop and contribution to earnings expected to begin in FY 2010 as 02M102007D anticipated 25
  • 26. Investor Relations & Media Contact Information Investor Contact: Chris D. Sammons Vice President, Investor Relations 225.932.2546 chris.sammons@shawgrp.com Media Contact: Craig Pierce Vice President 225.987.7461 craig.pierce@shawgrp.com 02M102007D 26
  • 27. First Quarter FY 2009: Earnings Conference Call Regulation G Appendices Thursday, January 8, 2008 02M102007D
  • 28. Appendix 1: EBITDA Reconciliation Q1 FY 2009 Q1 FY 2009 Westinghouse Excluding (in millions) Consolidated Segment Westinghouse Net Income (Loss) $ (39.9) $ (102.7) $ 62.8 Interest Expense 11.6 9.9 1.7 Depreciation and Amortization 12.6 - 12.6 Provision for Income Taxes (22.7) (67.0) 44.3 Income Taxes on Unconsolidated Subs 0.9 1.1 (0.2) EBITDA $ (37.5) $ (158.7) $ 121.2 Revenue 1,900.4 N/A 1,900.4 EBITDA % -2.0% N/A 6.4% 02M102007D Note: EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. 28
  • 29. Appendix 1: EBITDA Reconciliation Q1 FY 2008 Q1 FY 2008 Westinghouse Excluding (in millions) Consolidated Segment Westinghouse Net Income (Loss) $ 2.2 $ (35.5) $ 37.7 Interest Expense 11.1 8.9 2.2 Depreciation and Amortization 10.4 - 10.4 Provision for Income Taxes 2.1 (25.8) 27.9 Income Taxes on Unconsolidated Subs 3.5 3.1 0.4 EBITDA $ 29.3 $ (49.3) $ 78.6 Revenue 1,712.2 N/A 1,712.2 EBITDA % 1.7% N/A 4.6% 02M102007D Note: EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. 29
  • 30. Appendix 1: Segment EBITDA Reconciliation Q1 FY09 & Q4 FY08 Q1 FY 2009 Energy & Environmental & Fabrication & (in millions) Fossil & Nuclear Chemicals Maintenance Infrastructure Manufacturing Income (loss) before income taxes, and earnings (losses) from unconsolidated entities $ 35.9 $ 41.8 $ 8.2 $ 18.6 $ 30.4 Interest Expense 0.4 0.3 (0.0) 0.2 (0.0) Depreciation and Amortization 3.3 2.3 0.8 3.0 2.5 Unconsolidated Subs, pre-tax - 0.6 - 0.3 - Minority Interest, pre-tax - (3.4) - (1.3) (1.1) EBITDA $ 39.6 $ 41.6 $ 9.0 $ 20.8 $ 31.8 Q4 FY 2008 Energy & Environmental & Fabrication & (in millions) Fossil & Nuclear Chemicals Maintenance Infrastructure Manufacturing Income (loss) before income taxes, and earnings (losses) from unconsolidated entities $ 16.9 $ 40.2 $ (1.2) $ 16.7 $ 38.5 Interest Expense 0.5 (0.1) (0.0) 0.2 (0.0) Depreciation and Amortization 3.1 1.6 0.7 3.8 2.4 Unconsolidated Subs, pre-tax - 0.6 - (1.1) - Minority Interest, pre-tax - (2.5) - 1.1 (1.5) EBITDA $ 20.5 $ 39.8 $ (0.5) $ 20.7 $ 39.4 02M102007D Note: Segment EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. 30
  • 31. Appendix 1: Segment EBITDA Reconciliation Q3 FY08 & Q2 FY08 Q3 FY 2008 (Restated) Energy & Environmental & Fabrication & (in millions) Fossil & Nuclear Chemicals Maintenance Infrastructure Manufacturing Income (loss) before income taxes, and earnings (losses) from unconsolidated entities $ 38.5 $ 36.8 $ 14.5 $ 7.4 $ 29.1 Interest Expense 0.4 0.3 0.0 0.2 (0.5) Depreciation and Amortization 2.8 2.1 0.7 4.0 1.9 Unconsolidated Subs, pre-tax - 0.6 - 2.0 0.6 Minority Interest, pre-tax - (6.2) - (2.1) (2.9) EBITDA $ 41.7 $ 33.6 $ 15.2 $ 11.5 $ 28.2 Q2 FY 2008 (Restated) Energy & Environmental & Fabrication & (in millions) Fossil & Nuclear Chemicals Maintenance Infrastructure Manufacturing Income (loss) before income taxes, and earnings (losses) from unconsolidated entities $ 24.1 $ 11.7 $ 9.2 $ 5.4 $ 32.0 Interest Expense 0.2 1.0 (0.0) 0.2 (0.1) Depreciation and Amortization 2.7 1.9 1.0 4.0 1.8 Unconsolidated Subs, pre-tax - 0.7 - (1.6) (0.0) Minority Interest, pre-tax - (2.1) - (2.8) (1.9) EBITDA $ 27.0 $ 13.2 $ 10.2 $ 5.2 $ 31.8 02M102007D Note: Segment EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. 31
  • 32. Appendix 1: Segment EBITDA Reconciliation Q1 FY08 Q1 FY 2008 Energy & Environmental & Fabrication & (in millions) Fossil & Nuclear Chemicals Maintenance Infrastructure Manufacturing Income (loss) before income taxes, and earnings (losses) from unconsolidated entities $ 33.2 $ 8.6 $ 11.3 $ 9.8 $ 27.1 Interest Expense 0.2 0.4 - 0.2 0.0 Depreciation and Amortization 2.4 1.6 0.6 3.7 1.8 Unconsolidated Subs, pre-tax - 0.5 - 0.7 (0.0) Minority Interest, pre-tax - (1.7) - (1.4) (1.8) EBITDA $ 35.8 $ 9.4 $ 11.9 $ 13.0 $ 27.1 02M102007D Note: Segment EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. 32
  • 33. Appendix 2: Q1 FY 09 Reconciliation of Income excluding Westinghouse (in millions, except per share data) Q1 FY 2009 Quarter ended November 30, 2008 Westinghouse Excluding Consolidated Segment Westinghouse Revenues $1,900.4 $0.0 $1,900.4 Cost of revenues 1,712.3 0.0 1,712.3 Gross profit 188.1 0.0 188.1 General and administrative expenses 73.1 0.1 73.0 Operating income (loss) 115.0 (0.1) 115.1 Interest expense (1.7) 0.0 (1.7) Interest expense on JPY-denominated bonds including accretion and amortization (9.9) (9.9) 0.0 Interest income 3.9 0.0 3.9 Foreign currency translation gains (losses) on JPY-denominated bonds, net (161.2) (161.2) 0.0 Other foreign currency transaction gains (losses), net (2.3) 0.0 (2.3) Other income (expense), net (1.9) 0.0 (1.9) (173.1) (171.1) (2.0) Income (loss) before income taxes, minority interest, earnings (losses) from unconsolidated entities (b) (58.1) (171.2) 113.1 Provision (benefit) for income taxes (a) (22.7) (67.0) 44.3 Income (loss) before minority interest and earnings (losses) from unconsolidated entities (35.4) (104.2) 68.8 Minority interest (c) (5.9) 0.0 (5.9) Income from 20% Investment in Westinghouse, net of income taxes 1.5 1.5 0.0 Earnings (losses) from unconsolidated entities, net of income taxes (0.1) 0.0 (0.1) Net income (loss) ($39.9) ($102.7) $62.8 Net income (loss) per common share: Basic income (loss) per common share $ (0.48) $ (1.23) $ 0.75 Diluted income (loss) per common share $ (0.48) $ (1.23) $ 0.75 Weighted average shares outstanding: Basic 83.1 83.1 83.1 Diluted: 83.1 83.1 83.9 02M102007D Effective tax rate [a/(b+c)] 36% 39% 41% 33 Note: Presents our income statement excluding the Investment in Westinghouse segment
  • 34. Appendix 2: Q1 FY 08 Reconciliation of Income excluding Westinghouse Q1 FY 2008 (in millions, except per share data) Quarter ended November 30, 2007 Westinghouse Excluding Consolidated Segment Westinghouse Revenues $1,712.2 $0.0 $1,712.2 Cost of revenues 1,577.2 0.0 1,577.2 Gross profit 135.0 0.0 135.0 General and administrative expenses 68.9 0.0 68.9 Operating income (loss) 66.1 (0.0) 66.1 Interest expense (2.2) 0.0 (2.2) Interest expense on JPY-denominated bonds including accretion and amortization (8.9) (8.9) 0.0 Interest income 4.8 0.0 4.8 Foreign currency translation gains (losses) on JPY-denominated bonds, net (57.2) (57.2) 0.0 Other foreign currency transaction gains (losses), net 1.2 0.0 1.2 Other income (expense), net (0.3) 0.0 (0.3) (62.6) (66.1) 3.5 Income (loss) before income taxes, minority interest, earnings (losses) from unconsolidated entities (b) 3.5 (66.1) 69.6 Provision (benefit) for income taxes (a) 2.1 (25.8) 27.9 Income (loss) before minority interest and earnings (losses) from unconsolidated entities 1.4 (40.3) 41.7 Minority interest (c) (5.0) 0.0 (5.0) Income from 20% Investment in Westinghouse, net of income taxes 4.8 4.8 0.0 Earnings (losses) from unconsolidated entities, net of income taxes 1.0 0.0 1.0 Net income (loss) $2.2 ($35.5) $37.7 Net income (loss) per common share: Basic income (loss) per common share $ 0.03 $ (0.44) $ 0.47 Diluted income (loss) per common share $ 0.03 $ (0.42) $ 0.45 Weighted average shares outstanding: Basic 80.7 80.7 80.7 02M102007D Diluted: 83.6 83.6 83.6 Effective tax rate [a/(b+c)] -144% 39% 43% 34 Note: Presents our income statement excluding the Investment in Westinghouse segment
  • 35. Appendix 3: E&C Pass-Through Revenues and Cost Reconciliation Energy and Chemicals Energy and Chemicals Q1 FY 2009 Energy and Chemicals Q1 FY 2009 Excluding Pass-Through (in millions) Q1 FY 2009 Pass-Through Costs Costs Amount % Amount % Amount % Income: Revenues $ 321.7 100.0% $ (103.1) 100.0% $ 218.6 100.0% Cost of Revenues 269.3 83.7% (103.1) 100.0% 166.2 76.0% Gross Profit $ 52.4 16.3% $ - 0.0% $ 52.4 24.0% Energy and Chemicals Q1 FY 2008 Energy and Chemicals Energy and Chemicals Q1 FY 2008 Q1 FY 2008 Excluding Pass-Through (in millions) (Restated) Pass-Through Costs Costs Amount % Amount % Amount % Income: Revenues $ 296.1 100.0% $ (134.4) 100.0% $ 161.7 100.0% Cost of Revenues 279.7 94.5% (134.4) 100.0% $ 145.3 89.9% Gross Profit $ 16.4 5.5% $ - 0.0% $ 16.4 10.1% 02M102007D 35 Note: Reconciliation of revenues and cost of revenues to revenues and costs of revenues excluding pass-through costs
  • 36. Appendix 3: E&I Pass-Through Revenues and Cost Reconciliation Environmental & Environmental & Infrastructure Environmental & Infrastructure Q1 FY 2008 Infrastructure Q1 FY 2008 Excluding Pass-Through (in millions) Q1 FY 2008 Pass-Through Costs Costs Amount % Amount % Amount % Income: Revenues $ 389.9 100.0% $ (24.1) 100.0% $ 365.8 100.0% Cost of Revenues 364.8 93.6% (24.1) 100.0% $ 340.7 93.1% Gross Profit $ 25.1 6.4% $ - 0.0% $ 25.1 6.9% 02M102007D 36 Note: Reconciliation of revenues and cost of revenues to revenues and costs of revenues excluding pass-through costs
  • 37. Appendix 4: Total Debt Reconciliation Restated Restated Restated Restated Restated (in millions) Q1 FY 2009 Q4 FY 2008 Q3 FY 2008 Q2 FY 2008 Q1 FY 2008 Q4 FY 2007 Q3 FY 2007 Q2 FY 2007 Q1 FY 2007 Financed Insurance Premiums $0.0 $0.0 $2.4 $7.4 $11.1 $0.0 $3.1 $6.6 $10.4 Current maturities of long-term debt 4.9 4.5 4.4 2.7 4.6 5.4 8.8 9.1 9.5 Short-term revolving line of credit 0.0 0.0 0.0 1.0 2.3 0.2 2.8 2.7 2.5 Current portion of obligations under capital leases 0.6 1.5 1.8 1.9 2.2 2.1 2.2 2.2 1.8 Short-term debt and current maturities of long-term debt 5.5 6.0 8.6 13.0 20.2 7.7 16.9 20.6 24.2 Revolving line of credit 0.0 0.0 0.0 0.0 0.0 0.0 0.0 39.0 53.0 Long-term debt, less current maturities 1.9 3.3 3.5 3.8 6.6 7.5 8.6 23.8 26.7 Obligations under capital leases, less current portion 0.2 0.3 0.4 0.8 1.3 1.8 2.2 2.8 3.0 Long-term debt, less current maturities 2.1 3.6 3.9 4.6 7.9 9.3 10.8 65.6 82.7 Japanese Yen-denominated long-term bonds secured by Investment in Westinghouse, net 1,325.1 1,162.0 1,197.1 1,187.8 1,145.6 1,087.4 1,033.9 1,048.3 1,080.6 Total Debt $1,332.7 $1,171.6 $1,209.6 $1,205.4 $1,173.7 $1,104.4 $1,061.6 $1,134.5 $1,187.5 Less: Westinghouse Debt 1,325.1 1,162.0 1,197.1 1,187.8 1,145.6 1,087.4 1,033.9 1,048.3 1,080.6 Total Debt, excluding Westinghouse $7.6 $9.6 $12.6 $17.6 $28.1 $17.0 $27.7 $86.2 $106.9 02M102007D Note: To show our total debt excluding the Japanese Yen-denominated bonds 37