10-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

þ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2008

or

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.

Incorporated in The Netherlands IRS Identification Number: not applicable

Oostduinlaan 75
2596 JJ The Hague
The Netherlands
31-70-3732722
(Address and telephone number of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of each exchange on which registered:
Common Stock; Euro .01 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: none

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES þ NO o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES o NO þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. o

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

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

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

YES o NO þ

Aggregate market value of common stock held by non-affiliates, based on a New York Stock Exchange closing price of $39.82 as of June 30, 2008 was $3,842,520,814.

The number of shares outstanding of the registrant’s common stock as of February 1, 2009 was 95,586,771.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 2009 Proxy Statement Part III

TABLE OF CONTENTS

PART IV
	Item 15. Exhibits and Financial Statement Schedules
SIGNATURE
EXHIBIT INDEX
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.1

Explanatory Note — Amendment

Chicago Bridge & Iron Company N.V. and Subsidiaries (“CB&I” or “the Company”) is filing this Form 10-K/A solely to include in its Annual Report on Form 10-K for the year ended December 31, 2008 (the “Annual Report”), pursuant to Rule 3-09 of Regulation S-X, consolidated financial statements and accompanying notes of Chevron-Lummus Global LLC. CB&I owns a 50% interest in Chevron-Lummus Global LLC.

Rule 3-09 of Regulation S-X provides that if a 50% or less owned person accounted for by the equity method meets the first or third condition of the significant subsidiary tests set forth in Rule 1-02(w) of Regulation S-X, substituting 20% for 10%, separate financial statements for such 50% or less owned person shall be filed. Chevron-Lummus Global LLC met such test as of and for the year ended December 31, 2008 and CB&I has included in this Form 10-K/A the required audited financial statements for that period. Chevron-Lummus Global LLC did not meet the significance test for any prior period. Item 15 is the only portion of the Annual Report being supplemented or amended by this Form 10-K/A.

This Form 10K/A does not change any other information set forth in the original Form 10-K filed by CB&I for the year ended December 31, 2008.

In connection with the filing of this Form 10-K/A and pursuant to Securities and Exchange Commission rules, CB&I is including currently dated certifications required by Rules 13a-14(a) and 13a-14(b). This Form 10-K/A does not otherwise update any exhibits as originally filed and does not otherwise reflect events occurring after the original filing date of the Annual Report. Accordingly, this Form 10-K/A should be read in conjunction with any CB&I filings with the SEC subsequent to the filing of the Annual Report.

PART IV

Item 15. Exhibits and Financial Statement Schedules

Item 15 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed on February 25, 2009, is amended by the addition of the following exhibits:

Exhibits

Exhibit No.	Description of Exhibit
23.1 (1)	Consent of Independent Auditors of Chevron-Lummus Global LLC
31.1 (1)	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 (1)	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 (1)	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

-2-

Exhibit No.	Description of Exhibit
32.2 (1)	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1 (1)	Consolidated financial statements and accompanying notes of Chevron-Lummus Global LLC

⁽¹⁾ Filed herewith

-3-

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Chicago Bridge & Iron Company N.V.
Date: March 31, 2009	/s/ Philip K. Asherman
	Philip K. Asherman
	(Authorized Signer)

-4-

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
23.1 (1)	Consent of Independent Auditors of Chevron-Lummus Global LLC
31.1 (1)	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 (1)	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 (1)	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 (1)	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1 (1)	Consolidated financial statements and accompanying notes of Chevron-Lummus Global LLC

⁽¹⁾ Filed herewith

-5-

EX-23.1

Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in the following Registration Statements:

(1)	Registration Statement (Form S-8 No. 333-64442) pertaining to the Employee Stock Purchase Plan of Chicago Bridge & Iron Company N.V.,
(2)	Registration Statement (Form S-8 No. 333-156004) pertaining to the 2008 Long-Term Incentive Plan of Chicago Bridge & Iron Company N.V.,
(3)	Registration Statement (Form S-8 No. 333-87081) pertaining to the 1999 Long-Term Incentive Plan of Chicago Bridge & Iron Company N.V.,
(4)	Registration Statement (Form S-8 No. 333-39975) pertaining to the Employees Stock Purchase Plan (1997) of Chicago Bridge & Iron Company N.V.,
(5)	Registration Statement (Form S-8 No. 333-24443) pertaining to the Management Defined Contribution Stock Incentive Plan of Chicago Bridge & Iron Company N.V.,
(6)	Registration Statement (Form S-8 No. 333-24445) pertaining to the Long-Term Incentive Plan of Chicago Bridge & Iron Company N.V.,
(7)	Registration Statement (Form S-8 No. 333-33199) pertaining to the Savings Plan of Chicago Bridge & Iron Company N.V.;

of our report dated March 30, 2009, with respect to the financial statements of Chevron Lummus Global LLC included in this Annual Report (Form 10-K/A) of Chicago Bridge & Iron Company N.V. for the year ended December 31, 2008.

/s/ Ernst & Young LLP 
New York, New York
March 31, 2009

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Philip K. Asherman, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Chicago Bridge & Iron Company N.V.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Philip K. Asherman  

Philip K. Asherman 

Principal Executive Officer 

Date: March 31, 2009

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald A. Ballschmiede, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Chicago Bridge & Iron Company N.V.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Ronald A. Ballschmiede  

Ronald A. Ballschmiede 

Principal Financial Officer 

Date: March 31, 2009

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Chicago Bridge & Iron Company N.V. (the “Company”) on Form 10-K/A for the period ending December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip K. Asherman, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Philip K. Asherman  

Philip K. Asherman 

Principal Executive Officer
March 31, 2009  

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Chicago Bridge & Iron Company N.V. (the “Company”) on Form 10-K/A for the period ending December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald A. Ballschmiede, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Ronald A. Ballschmiede  

Ronald A. Ballschmiede 

Principal Financial Officer
March 31, 2009 

EX-99.1

Exhibit 99.1

Financial Statements

Chevron Lummus Global LLC
(A Delaware Limited Liability Company)
Year Ended December 31, 2008
With Report of Independent Auditors

Chevron Lummus Global LLC

Financial Statements

Year Ended December 31, 2008

Contents

Report of Independent Auditors	1
Balance Sheet	2
Statement of Income	3
Statement of Members’ Equity	4
Statement of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

The Members
Chevron Lummus Global LLC

We have audited the accompanying balance sheet of Chevron Lummus Global, LLC (the “Company”) as of December 31, 2008, and the related statements of income, members’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chevron Lummus Global LLC at December 31, 2008, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New York
March 30, 2009

1

Chevron Lummus Global, LLC

Balance Sheet

December 31, 2008
(U.S. Dollar in Thousands)

Assets
Cash and cash equivalents	$	14,155
Trade receivables		33,708
Cost and estimated earnings in excess of billings on uncompleted contracts		25,852
Inventories		51,619
Prepaid expenses		5,046
Total current assets		130,380
Cost and estimated earnings in excess of billings on uncompleted contracts — long term		17,728
Total assets	$	148,108
Liabilities and members’ equity
Accounts payables:
Trade	$	17,191
Members		3,031
Billings in excess of cost and estimated earnings on uncompleted contracts		14,977
Accrued project and other costs		20,803
Warranty provisions — current		1,143
Total current liabilities		57,145
Warranty provisions — long term		4,573
Total liabilities		61,718
Members’ equity		86,390
Total liabilities and members’ equity	$	148,108

See accompanying notes to financial statements.

2

Chevron Lummus Global LLC

Statement of Income

Year Ended December 31, 2008
(U.S. Dollars in Thousands)

Net revenues:
Catalyst	$	98,205
Engineering		92,333
Total net revenues		190,538
Cost of sales		(102,815	)
Gross profit		87,723
Selling, general and administrative expenses		(28,509	)
Income before interest and other income		59,214
Interest and other income		438
Net income	$	59,652

See accompanying notes to financial statements.

3

Chevron Lummus Global LLC

Statement of Members’ Equity

Year Ended December 31, 2008
(U.S. Dollars in Thousands)

				Lummus
				Technology
	Chevron Share			Share			Total
Members’ equity at December 31, 2007	$	37,369		$	37,369		$	74,738
Net income		29,826			29,826			59,652
Distributions to members		(24,000	)		(24,000	)		(48,000	)
Members’ equity at December 31, 2008	$	43,195		$	43,195		$	86,390

See accompanying notes to financial statements.

4

Chevron Lummus Global LLC

Statement of Cash Flows

Year Ended December 31, 2008
(U.S. Dollars in Thousands)

Cash flows from operating activities
Net income	$	59,652
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in operating assets and liabilities:
Decrease in accounts receivable		20,482
Increase in costs and estimated earnings in excess of billings		(3,758	)
Increase in other current assets		(3,665	)
Increase in inventories		(21,510	)
Decrease in accounts payable		(11,916	)
Decrease in billings in excess of costs and estimated earnings		(8,148	)
Increase in warranty provisions		595
Increase in accrued costs		7,133
Net cash provided by operating activities		38,865
Cash flows from financing activities
Distributions to members		(48,000	)
Net cash used in financing activities		(48,000	)
Net decrease in cash and cash equivalents		(9,135	)
Cash and cash equivalents — beginning of year		23,290
Cash and cash equivalents — end of year	$	14,155

See accompanying notes to financial statements.

5

Chevron Lummus Global LLC

Notes to Financial Statements

December 31, 2008
(U.S. Dollars in Thousands)

1. Description of the Business

The accompanying financial statements present the financial position, results of operations and cash flows of Chevron Lummus Global LLC. Chevron Lummus Global, LLC (the “Company”) is a limited liability company organized in the State of Delaware which was formed on January 1, 2000 and is owned by Lummus Catalyst Company Ltd. (“Lummus”), an indirect wholly owned subsidiary of Chicago Bridge & Iron Company (“CB&I”) and Chevron USA Inc. (“Chevron”), an indirect wholly owned subsidiary of Chevron Corporation, with each having a 50% interest in the Company. Lummus and Chevron are hereby referred to collectively as “members” of the Company.

The Company provides engineering services, licenses proprietary technology and supplies proprietary catalyst to industrial and commercial customers in the oil and gas industry. The proprietary technology consists principally of hydroprocessing technologies, including hydrocracking and hydrotreating processes, that are used by refineries to process petroleum-based products.

The business primarily concentrates on converting/upgrading heavy/sour crude oil (“bottom of the barrel”) that is produced during the refining process into more useable products. Its technologies include, among others, ISOCRACKING^®, ISOTREATING^®, ISODEWAXING^® and LCFININGÔ.

The Company is subject to risks and uncertainties common to companies providing similar products and services to the oil and gas industry, including, but not limited to, development by its competitors of new technological innovations, dependence on key personnel, loss of customers or changes in capital spending by customers, protection of proprietary technology, and compliance with domestic and foreign regulatory authorities and agencies. The Company also provides technical services to customers that have purchased its catalysts. The Company’s license and engineering services are performed under fixed-price and cost-plus-fee contracts. The Company generates revenue from customers located throughout the world.

The operations of the Company are dependent upon the operational support provided by the members (Note 9) and the Company’s operations are performed by the members as follows:

Chevron is responsible for the majority of the Company’s research and development (“R&D”) activities, which are mainly focused on process and catalyst development/improvements for its process technologies. In addition, Chevron performs engineering efforts and has responsibility for accounting functions related to the catalyst business.

6

Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

1. Description of the Business (continued)

Lummus is responsible for engineering and licensing efforts, supports R&D work and project accounting for licensing and engineering.

The Company has no employees. Based upon the terms and conditions in the Company operational agreement, Lummus and Chevron assign employees to perform the work of the Company and the fully burdened cost is charged to the Company by Lummus and Chevron. As a result, these financial statements may not be indicative of those of a stand-alone entity.

2. Significant Accounting Policies

Revenue Recognition and Contract Accounting

The Company recognizes engineering and licensing contract revenues using the percentage-of-completion method. The Company principally uses the cost-to-cost method to measure progress towards completion on contracts. Long-term contracts typically extend over a period of several months to five years. Revenue recognition occurs when work is performed and technology is transferred to the customer.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, including estimates for performance risks and warranties. The Company’s contracts occasionally allow customers to withhold a certain portion of the contract price until specific performance requirements are met.

Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in contract performance and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

For catalyst, the Company generally recognizes revenues when delivery has occurred according to the International Commercial terms, the fee is determined and collection is probable. The Company does not generally receive cash advances on catalyst orders and funds working capital internally.

7

Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

2. Significant Accounting Policies (continued)

Cost of sales predominately relate to the Company’s catalyst sales. Selling (including bid costs), general and administrative costs are charged to expense when incurred. When the Company is directly responsible for subcontractor labor, or third-party materials and equipment, the costs of such items are included in both revenues and costs.

Warranties

The Company typically provides customers with a date certain warranty from the date of contract completion. Provisions for estimated warranty costs are recorded based on historical experience and are managed on a total company basis.

Shipping and Handling Fees and Costs

The Company recognizes shipping and handling fees charged to customers in total revenues. Shipping and handling costs, consisting principally of outbound freight, amount to $574 for the year ended December 31, 2008 and are included in cost of sales.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes. Significant estimates for which changes in the near term are considered reasonably possible and that may have a material impact on the financial statements are addressed in these notes to the financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with maturities of three months or less at the date of acquisition. The Company invests excess cash in deposits with Chevron treasury. There are no restrictions with respect to the usage or withdrawal of cash.

Concentration of Credit Risk

The Company sells a broad range of services to oil, gas and petrochemicals customers throughout the world. The risk of uncollectible trade receivables is considered low, as the Company’s customer base is generally major global oil, gas and petrochemical companies.

8

Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

2. Significant Accounting Policies (continued)

Ongoing credit evaluations of customers’ financial positions are performed and, generally, no collateral is required. The Company maintains adequate reserves for potential losses and such losses have been minimal and approximate management estimates. Revenues from the Company’s largest customer during 2008 amounted to approximately 16% of total revenues. Revenues from no other customer exceeded 10% of total revenues.

3. Trade Receivables

Trade receivables are non-interest bearing and are generally with major global oil, gas and petrochemicals companies. The Company routinely evaluates its portfolio of third-party trade receivables for risk of non-collection and records the carrying value of its trade receivables at estimated net realizable value. There are receivables with affiliated companies valued at $444 at December 31, 2008. The Company has not recorded an allowance for doubtful accounts based on historical experience and the Company’s belief that there is insignificant collection risk related to the Company’s accounts receivable at December 31, 2008.

4. Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts

Cost and estimated earnings in excess of billings on uncompleted contracts represent amounts of revenue earned under contracts in progress but not billed at the balance sheet date. These amounts become billable according to the contract terms, which usually consider passage of time, achievement of milestones and/or completion of the project. Cost and estimated earnings and billings of uncompleted contracts include the following:

Cost and estimated earnings	$	119,709
Less billings		83,515
Engineering work in process		7,386
Total	$	43,580
Current	$	25,852
Long term		17,728
	$	43,580

9

Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

5. Inventories

Inventories relate to catalyst and consist of raw material, labor and manufacturing cost and are stated at the lower of cost or market. Raw materials are stated at actual cost, and finished goods which include the value of intermediate production are accounted for utilizing the LIFO (last-in first-out) method. The Company believes LIFO is a better matching of revenues against cost.

Inventory consists of the following at December 31, 2008:

Raw materials	$	17,651
Intermediate and finished goods		33,968
Total inventory	$	51,619

6. Accounts Payable

In addition to third-party payables for materials and services, the Company has an amount due to each of the members. The amounts due to the members do not bear interest. As of December 31, 2008, the accounts payable balance was:

Trade payables	$	17,191
Trade payables, Lummus	$	233
Trade payables, Chevron		2,798
Total payables, members	$	3,031

7. Billings in Excess of Cost and Estimated Earnings

Billings in excess of cost and estimated earnings represent advance billings to clients in excess of cost and earnings on uncompleted contracts. They consist of the following:

Revenue	$	83,614
Less billings		98,591
Total	$	14,977

10

Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

8. Accrued Costs

Accrued project costs relate to the timing of the recognition of cost of sales on uncompleted contracts. Amounts are anticipated to be expended within one year of the balance sheet date. At December 31, 2008, the Company had accrued project costs of $11,851 and other accrued costs related to catalyst sales of $8,952.

9. Related Party Transactions

Chevron and the Company are parties to an operational support services agreement whereby Chevron or its affiliates provide the Company with administrative and technical support services including, but not limited to, financial accounting and reporting, credit, treasury, legal, information technology, project management reporting and analysis and basic engineering and associated services. Such services are provided to the Company at prices which the members agree approximate Chevron’s full cost of providing such services. The Company recorded expenses under the agreement of $23,808 in 2008, of which $11,097 are included in cost of sales and $12,711 are included in selling, general and administrative expenses in the statement of income. Chevron and the Company are also a party to a research, development and technical services agreement whereby Chevron or its affiliates provide to the Company such services at the Company’s request for a fee. Such services are provided to the Company at prices which the members believe approximate Chevron’s full cost of providing such services. The Company recorded R&D expenses under this agreement of $9,735 in 2008.

Lummus and the Company are parties to an operational support agreement whereby Lummus or its affiliates provide the Company with sales and marketing, administrative and technical support services including, but not limited to, legal, information technology, project management reporting and analysis and basic engineering and associated services. Such services are provided to the Company at prices which the members agree approximate Lummus’ full cost of providing such services. The Company recorded expenses under the agreement of $12,286 in 2008, of which $8,481 are included in cost of sales and $3,805 are included in selling, general and administrative expenses in the statement of income. Lummus and the Company are also parties to a research, development and technical services agreement whereby Lummus or its affiliates provide to the Company such services at the Company’s request for a fee. Such services are provided to the Company at prices which the members believe approximate Lummus’ full cost of providing such services. The Company recorded R&D expenses under this agreement of $544 in 2008.

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Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

9. Related Party Transactions (continued)

At December 31, 2008, $2,798 was due to Chevron and $233 was due to Lummus for services provided under the above agreements and these amounts are included on the balance sheet.

In 2008, Chevron and its affiliates purchased $8,943 in catalyst from the Company for its own use in accordance with the terms of the operating agreement.

10. Operating Agreement

Under the terms of the Company’s operating agreement dated January 1, 2000, as amended (the “Agreement”) the net income and net loss of the Company and any distributions of the Company’ s assets are to be allocated among the members in proportion to their membership interests. The agreement provides for, in the event of termination of the Company by the members, the apportionment between the members of proprietary technology rights previously contributed to the Company by the members in accordance with a prescribed formula. Each member’s liability for the activities of the Company is generally limited to its respective capital contributions.

11. Research and Development

Non-project specific R&D costs charged by the members to the Company were $10,279 for the year ended December 31, 2008. These activities are primarily conducted in the Chevron facilities in Richmond, CA. R&D costs are expensed as incurred and are included in sales, general and administrative expenses on the statement of income.

12. Guarantees

In certain situations within a contract, the Company will include a performance warranty for a specific period of time. In place of accounts receivable retention, the Company will provide, through Chevron, a work guarantee to customers for the warranty period. Guarantees issued by Chevron amount to $15,391 and Lummus is committed to issue Chevron a counter guarantee for 50% of the total guarantees issued by Chevron. The guarantee period ranges from 2009 through June 2013.

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Chevron Lummus Global LLC

Notes to Financial Statements (continued)

(U.S. Dollars in Thousands)

13. Income and Foreign Withholding Taxes

The Company is not subject to income taxes as it is treated as a partnership for federal income tax purposes. The Company’s results of operations are allocated to the members for inclusion in their respective income tax returns. Accordingly, no provision for federal and state income taxes is reflected in the accompanying financial statements. The Company also incurs foreign withholding taxes which are generally payable based on revenues generated in certain foreign jurisdictions. Such withholding taxes, while paid by the Company, are reimbursed by the members. Withholding taxes due from the members are netted in the accounts payable, members account. Withholding taxes for 2008 amounted to $1,762.

14. Contract Litigation

In 2009, a suit was filed against one of the members to seek a full assignment of all rights to certain owned patents. Management is in the process of reviewing the subject claims, believes they are without merit and does not believe it is possible to assess the risk of loss or probable liability, if any, at this time.

The Company is currently not aware of any other pending or threatened litigation, claims or assessments directly against or associated with the Company.

15. Future Purchase Commitments

The Company has certain long-term purchase contracts with its suppliers with a minimum commitment of approximately $9,500 over the next two years.

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