RULE 424(B)(2)
REGISTRATION STATEMENT
NO. 33-52735
SUBJECT TO COMPLETION, DATED MARCH __, 1995
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 25, 1994)
INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT
IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT
RELATING TO THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933. A FINAL PROSPECTUS SUPPLEMENT AND
ACCOMPANYING PROSPECTUS WILL BE DELIVERED TO PURCHASERS OF THESE
SECURITIES. THIS PRELIMINARY PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION
OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
500,000 Shares
CBI INDUSTRIES, INC.
% Cumulative Preferred Stock, Series D
(Liquidation Preference $100 per Share)
Dividends on the % Cumulative Preferred Stock, Series D,
$1.00 par value per share (the " % Preferred Stock"), are
cumulative from the date of original issue and are payable
quarterly, commencing June 15, 1995. See "Certain Terms of the
% Preferred Stock--Dividends." On March , 2000, to the extent
funds are legally available therefor, CBI Industries, Inc. (the
"Company" or "CBI") is required to redeem for cash all of the
outstanding shares of the % Preferred Stock at a redemption
price of $100 per share, plus an amount equal to accrued and
unpaid dividends. The % Preferred Stock will not be redeemable
prior to that date. The % Preferred Stock will not be entitled
to the benefits of any sinking fund. See "Certain Terms of the
% Preferred Stock--Redemption."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
Per Share $100.00 $ $
Total $50,000,000 $ $
(1)Plus accrued dividends, if any, from the date of original
issue.
(2)The Company has agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(3)Before deducting expenses payable by the Company estimated at
$ .
The % Preferred Stock offered hereby is offered by the
Underwriters, as specified herein, subject to prior sale, when,
as and if delivered to, and accepted by, the Underwriters named
herein and subject to the approval of certain legal matters by
counsel to the Underwriters, and certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify any
order and to reject any order in whole or in part. It is
expected that delivery of the % Preferred Stock will be made on
or about March , 1995 through the facilities of The Depository
Trust Company, against payment therefor in immediately available
funds.
Lehman Brothers Merrill Lynch & Co.
March __, 1995
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE % PREFERRED STOCK OFFERED HEREBY AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THE COMPANY
The Company operates through three major business segments.
CBI's Industrial Gases segment, which is organized under Liquid
Carbonic Industries Corporation, produces, processes and markets,
on a worldwide basis, carbon dioxide and a wide variety of other
industrial and specialty gases and chemicals. CBI's
Contracting Services segment is organized under Chicago Bridge &
Iron Company as a worldwide construction group that provides,
through separate subsidiaries, a broad range of services
including design, engineering, fabrication and construction of
metal plate structures, project management, general contracting,
and other specialty construction and related services. CBI's
Investments segment includes hydrocarbon products and special
products terminal businesses and certain real estate and
financial investments.
The Company is incorporated in Delaware. Its principal
executive offices are located at 800 Jorie Boulevard, Oak Brook,
Illinois and its telephone number is (708) 572-7000.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the %
Preferred Stock offered hereby will be used to reduce outstanding
commercial paper borrowings and indebtedness under the Company's
three-year extendible revolving credit facility which was used
primarily to fund its capital investment program. At March 18,
1995, (i) the Company's outstanding commercial paper totalled
$133 million, had maturities no longer than 98 days from the date
of issue and bore interest at rates ranging from approximately
6.2% to 6.4% per annum, and (ii) the Company's indebtedness under
its three-year extendible revolving credit facility totalled $123
million, had maturities no longer than 135 days from the date of
issue and bore interest at rates ranging from approximately 6.3%
to 6.6% per annum.
SELECTED RATIOS
For purposes of calculating the ratio of earnings to fixed
charges and preferred stock dividends, earnings consist of
earnings before income taxes and fixed charges to the extent that
such charges are included in the determination of earnings.
Fixed charges consist of interest, including interest on ESOP
debt (whether expensed or capitalized), and one-third of minimum
rental payments under operating leases (estimated by management
to be the interest factor of such rentals).
Years Ended December 31,
1994 1993 1992 1991 1990
Ratio of Earnings to Fixed 2.66 (1) 3.68 3.43 3.05
Charges and Preferred Stock
Dividends
(1) Earnings were inadequate to cover fixed charges and
preferred stock dividends by $13,770,000 for the year ended
December 31, 1993. During that year, the Company recorded a
pre-tax special charge of $91.6 million.
CERTAIN TERMS OF THE % PREFERRED STOCK
The following description of certain terms of the %
Preferred Stock supplements the description of the general terms
and provisions of the authorized shares of preferred stock, par
value $1.00 per share (the "Preferred Stock") of the Company set
forth under the heading "Description of Capital Stock - Preferred
Stock" in the accompanying Prospectus, to which reference is made
hereby. The description of certain provisions of the %
Preferred Stock set forth below does not purport to be complete
and is subject to and qualified in its entirety by reference to
the Certificate of Designations relating to the % Preferred
Stock, which will be filed with the Securities and Exchange
Commission prior to the issuance of the % Preferred Stock.
General
The % Preferred Stock will rank on a parity as to payment
of dividends and distributions of assets with the Company's
Convertible Voting Preferred Stock, Series C (the "Series C
Preferred Stock"). The % Preferred Stock will rank senior to
the Company's Series A Junior Participating Preferred Stock (the
"Series A Preferred Stock") and the Company's Common Stock with
respect to payment of dividends and distributions of assets (see
"Description of Capital Stock" in the accompanying Prospectus).
Dividends
Dividends on the stated value per share of the % Preferred
Stock will be payable at an annual rate of %, will be
cumulative from the date of original issue, and will be payable
quarterly on the fifteenth day of March, June, September and
December in each year (commencing June 5, 1995) to holders of
record on the record date, which date shall be not more than 45
days nor less than 10 days preceding the date of the dividend
payment when, as and if declared by the Board of Directors of
CBI, out of funds of the Company legally available therefor. The
Company is a party to certain agreements that subject the payment
of dividends to the satisfaction of certain financial tests. The
Company is in compliance with these financial tests and expects
that it will remain so. Quarterly dividend periods will commence
on the sixteenth day of December, March, June and September. The
amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be computed
on the basis of 30-day months, a 360-day year and the actual
number of days elapsed in the period. The stated value per share
of the % Preferred Stock is $100.
No dividend will be declared or paid on the shares of any
series of Preferred Stock ranking on a parity with the %
Preferred Stock as to payment of dividends unless all accumulated
dividends on all outstanding shares of any series of Preferred
Stock ranking on a parity with the % Preferred Stock as to
payment of dividends have been paid or declared and set apart for
payment or contemporaneously are paid or declared and set apart
for payment to the last date to which such dividends are payable.
Whenever all accumulated dividends are not paid in full on any
series of Preferred Stock ranking on a parity with the %
Preferred Stock as to payment of dividends, all dividends
declared or other distributions made upon shares of any series of
Preferred Stock ranking on a parity with % Preferred Stock as
to payment of dividends shall be declared or made pro rata so
that the amount of dividends declared or other distributions made
per share shall in all cases bear to each other the same ratio
that accumulated and unpaid dividends per share on each such
series of Preferred Stock bear to each other. The holders of the
% Preferred Stock will be entitled to receive cumulative
dividends before any dividends are declared or paid or set apart
for payment upon the Company's Series A Preferred Stock or Common
Stock or any other class of stock of the Company ranking junior
to the % Preferred Stock as to payment of dividends. The
Company may not purchase shares of its Common Stock or of any
other series of Preferred Stock if dividends on the % Preferred
Stock are in arrears.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of the %
Preferred Stock outstanding at the time on a parity with the
holders of the Series C Preferred Stock outstanding at the time
will be entitled to receive to the extent assets of the Company
are available for distribution to stockholders, before any
distribution of assets is made to holders of the Series A
Preferred Stock or the Common Stock or any other class of capital
stock ranking junior to the % Preferred Stock upon liquidation,
liquidating distributions in the amount of $100 per share plus an
amount equal to accrued and unpaid dividends for the then-current
dividend period and all dividend periods prior thereto.
Redemption
On March __, 2000, to the extent funds are legally available
therefor, CBI is required to redeem for cash all of the %
Preferred Stock at a redemption price of $100 per share, plus an
amount equal to accrued and unpaid dividends thereon to the date
of mandatory redemption. The % Preferred Stock will not be
redeemable prior to that date. The Company is a party to certain
agreements that subject the redemption of the % Preferred
Stock to the satisfaction of certain financial tests. The
Company is in compliance with these financial tests and expects
that it will remain so. Notwithstanding the foregoing, CBI may
repurchase the % Preferred Stock in open market or private
transactions. The % Preferred Stock will not be entitled to
the benefits of any sinking fund.
Voting Rights
The % Preferred Stock will have no voting rights except as
set forth below or as otherwise provided by law. In the event
that any six cumulative quarterly dividends, whether consecutive
or not, payable upon the % Preferred Stock or cumulative
dividends for the equivalent period on any one or more other
series of Preferred Stock of the Company entitled to receive
cumulative preferred dividends shall be in arrears, the holders
of the % Preferred Stock shall have the right, voting
separately as a class with holders of shares of the Series A
Preferred Stock, the Series C Preferred Stock and any one or more
other series of Preferred Stock upon which like voting rights
have been conferred and are exercisable, at the next meeting of
stockholders called for the election of directors, to elect two
members of the Company's Board of Directors. The right of such
holders of such shares of the % Preferred Stock to elect
(together with the holders of shares of any one or more other
series of Preferred Stock upon which like voting rights have been
conferred and are exercisable) members of the Board of Directors
of the Company as aforesaid shall continue until such time as all
dividends accumulated on such shares of the % Preferred Stock
and on such other series shall have been paid in full, at which
time such right shall terminate, except as by law expressly
provided, subject to revesting in the event of each and every
subsequent failure to pay dividends of the character above
mentioned. Upon any termination of the right of the holders of
shares of Preferred Stock, including the % Preferred Stock, to
vote as a class for directors as herein provided, the term of
office of all directors then in office elected by such holders
voting as a class shall terminate immediately.
The Certificate of Designations may be amended, altered or
repealed by the unilateral action of the Board of Directors of
the Company without the consent or vote of the holders of the
% Preferred Stock. Notwithstanding the preceding sentence, the
Certificate of Incorporation of the Company (including the
Certificate of Designations) shall not be amended, altered or
repealed in any manner which would adversely alter or change the
powers, preferences or special rights of the % Preferred Stock
without the affirmative vote or consent of the holders of two-
thirds or more of the outstanding shares of the % Preferred
Stock, voting separately as a series; provided, that any increase
in the authorized Preferred Stock or the creation and issuance of
any other class or series of Preferred Stock ranking on a parity
with or junior to the % Preferred Stock as to payment of
dividends and upon liquidation, dissolution or winding up, or any
decrease in the number of shares which constitute the %
Preferred Stock (but not below the number of shares thereof then
outstanding), shall be deemed not to adversely alter or change
such powers, preferences or special rights.
On any item in which the holders of % Preferred Stock are
entitled to vote, such holders shall be entitled to one vote for
each share of % Preferred Stock held.
Conversion Rights
The holders of the % Preferred Stock will not have any
rights to convert shares of the % Preferred Stock into shares
of any other class or series of capital stock (or any other
security) of the Company.
Book-Entry System
The % Preferred Stock will be issued in the form of one or
more fully registered Global Preferred Stock Certificates
("Global Certificate") which will be deposited with, or on behalf
of, The Depository Trust Company, New York, New York (the
"Depository") and registered in the name of the Depository's
nominee.
The Depository has advised as follows: It is a limited-
purpose trust company which was created to hold securities for
its participating organizations (the "Participants") and to
facilitate the clearance and settlement of securities
transactions between Participants in such securities through
electronic book-entry changes in the accounts of its
Participants. Participants include securities brokers and
dealers (including the Underwriters), banks and trust companies,
clearing corporations and certain other organizations. Access to
the Depository's system is also available to others such as
banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either
directly or indirectly ("indirect participants"). Persons who
are not Participants may beneficially own securities held by the
Depository only through Participants or indirect participants.
Dividend payments on, and payments made upon mandatory
redemption of, the % Preferred Stock registered in the name of
the Depository's nominee will be made to the Depository's nominee
as the registered owner of the Global Certificate. The
Depository has advised the Company that its present practice is,
upon receipt of any dividend payment or payment made upon
mandatory redemption, to immediately credit the accounts of the
Participants with such payment in amounts proportionate to their
respective holdings in the Global Certificate as shown on the
records of the Depository.
Same-Day Settlement and Payment
Settlement for the % Preferred Stock will be made by the
Underwriters in immediately available funds. All payments of
dividends, redemption value and liquidation value will be made by
the Company in immediately available funds.
The % Preferred Stock will trade in the Depository's Same-
Day Funds Settlement System until the mandatory redemption date,
and secondary market trading in the % Preferred Stock will,
therefore, be required by the Depository to settle in immediately
available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading
activity in the % Preferred Stock.
TAX CONSIDERATIONS
The following is a summary of the expected material United
States federal income tax consequences to holders of the %
Preferred Stock (each a "Holder"). The following discussion does
not (i) consider the tax consequences of the % Preferred Stock
offering under state, local and foreign law or (ii) purport to
address all aspects of federal income taxation that may affect
certain taxpayers, such as financial institutions, broker-
dealers, life insurance companies, foreign taxpayers, and other
special status taxpayers. The statements of law and legal
conclusions contained in this summary are based upon the opinion
of Mayer, Brown & Platt, special tax counsel to the Company
("Counsel"). Such opinion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), its
legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, all as in
effect and existing on the date hereof and all of which are
subject to change at any time, possibly on a retroactive basis.
The conclusions of Counsel are not binding on the Internal
Revenue Service (the "Service") or the courts. Furthermore, the
Company has not requested and will not receive rulings from the
Service with respect to any of the matters summarized in this
discussion. Therefore, there is no assurance that the Service or
a court would agree with the conclusions reached by Counsel.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT A TAX ADVISOR AS
TO THE FEDERAL, STATE, LOCAL, FOREIGN, OR OTHER TAX CONSEQUENCES
OF ACQUIRING, HOLDING AND DISPOSING OF THE % PREFERRED STOCK.
In the opinion of Counsel, the % Preferred Stock will
constitute capital stock of the Company and distributions with
respect to the % Preferred Stock will be taxable as dividends
to the extent of the Company's current or accumulated earnings
and profits for federal income tax purposes.
Dividends paid on the % Preferred Stock may qualify for
the 70% dividends received deduction (80% for corporate
shareholders which own 20% or more of the voting power and value
of the stock of the Company) generally allowable to corporations,
subject to any limitations imposed by Sections 243 through 246A
and 1059 of the Code. Further, a corporate Holder should be
aware that dividend income which is not subject to regular tax as
a consequence of the dividends received deduction may be subject
to the alternative minimum tax.
Section 246A of the Code provides, in general, that if a
corporation incurs indebtedness "directly attributable" to a
portfolio stock investment in another company (which is likely to
include the % Preferred Stock), the dividends received
deduction on such stock will be proportionately reduced. In
addition, under Section 246(c) of the Code, the dividends
received deduction will not be available with respect to stock
which is held for 45 days or less (90 days in the case of a
dividend attributable to a period or periods aggregating more
than 366 days). The length of time that a taxpayer is deemed to
have held stock for these purposes is reduced for the period
during which the taxpayer's risk of loss with respect to the
stock is diminished by reason of certain options, contracts to
sell, the holding of one or more positions with respect to
substantially similar or related property, or other similar
transactions. Moreover, Section 1059 of the Code would require a
corporate stockholder to reduce its basis in the % Preferred
Stock if an "extraordinary dividend" is received and the
corporate stockholder has not held the stock for more than two
years before the dividend announcement date. An "extraordinary
dividend" on the % Preferred Stock would be a dividend that (i)
equals or exceeds 5% of the holder's basis in the stock, treating
all dividends having ex-dividend dates within an 85-day period as
one dividend, or (ii) exceeds 20% of the holder's basis in the
stock, treating all dividends having ex-dividend dates within a
365-day period as one dividend. The length of time that a
taxpayer is deemed to have held the stock for purposes of Section
1059 of the Code is determined under principles similar to those
contained in Section 246(c) of the Code as discussed above.
Distributions with respect to the % Preferred Stock in
excess of both current and accumulated earnings and profits will
be (i) treated as a return of capital to the extent of the cash
or fair market value of property received, up to the amount of
the Holder's tax basis in its % Preferred Stock (and will
correspondingly reduce such basis) and (ii) taxed as an amount
received in exchange for such % Preferred Stock to the extent
the cash or fair market value of any property received exceeds
the Holder's tax basis in its % Preferred Stock. Any reduction
in basis could subject the Holder to the payment of additional
tax on a subsequent sale or other disposition of such %
Preferred Stock. Although the Company currently expects its
current and accumulated earnings and profits to be sufficient for
all distributions on the % Preferred Stock to qualify as
dividends for federal income tax purposes, there can be no
assurance that the Company will have current or accumulated
earnings and profits in any year in which a distribution is made
with respect to the % Preferred Stock.
Upon the sale, exchange or redemption of the % Preferred
Stock (assuming, in the case of a redemption, that all of the %
Preferred Stock is redeemed and that a Holder does not own any
other stock in the Company, either directly or by application of
certain attribution rules), a Holder who holds the % Preferred
Stock as a capital asset will realize a capital gain or loss
measured by the difference between the amount realized on the
sale or other disposition and Holder's adjusted tax basis in the
% Preferred Stock. Such gain or loss will be long-term capital
gain if the Holder's holding period with respect to the %
Preferred Stock is more than one year at the time of the sale,
exchange or redemption. A Holder who, directly or by application
of certain attribution rules, holds stock in the Company other
than the % Preferred Stock should consult its tax advisor as
to the federal income tax treatment of a redemption of the %
Preferred Stock, including the possible treatment of the entire
proceeds of such redemption as a dividend to such Holder.
UNDERWRITING
Subject to the terms and conditions set forth in the
Underwriting Agreement, the Company has agreed to sell to each of
the Underwriters named below, and each of the Underwriters has
severally agreed to purchase, the number of shares of %
Preferred Stock set forth opposite its name below.
Number of
Shares of
Underwriter % Preferred Stock
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Total 500,000
The Underwriting Agreement provides that the obligations of
the Underwriters are subject to certain conditions precedent.
The Underwriters will be obligated to purchase all of the shares
of % Preferred Stock if any of the shares of % Preferred
Stock are purchased.
The Company has been advised that the Underwriters propose
to offer the % Preferred Stock initially at the offering price
set forth on the cover page of this Prospectus Supplement and to
certain dealers at such price less a selling concession of $
per share of % Preferred Stock that the Underwriters may allow,
and such dealers may reallow to other dealers a concession not
exceeding $ per share of % Preferred Stock; and that
after the initial public offering, such public offering price and
such concession and reallowance may from time to time be varied
by the Underwriters.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933.
VALIDITY OF SECURITIES
The validity of the % Preferred Stock will be passed upon
for the Company by Charles O. Ziemer, Senior Vice President and
General Counsel of CBI, and by Mayer, Brown & Platt, counsel for
the Underwriters. As of the date of this Prospectus Supplement,
Mr. Ziemer is a full-time employee and an officer of CBI and owns
and holds options to purchase shares of Common Stock of the
Company. Mayer, Brown & Platt is currently representing the
Company in certain legal matters., and, in addition, is also
serving as special tax counsel to CBI in connection with the
offering and sale of the % Preferred Stock.
<PAGE>
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained
in this Prospectus Supplement or the accompanying Prospectus and,
if given or made, such information or representation must not be
relied upon as having been authorized by the Company, by the
Underwriters or by any other person. This Prospectus Supplement
and the accompanying Prospectus do not constitute an offer to
sell or a solicitation of any offer to buy any of the securities
offered hereby to any person or by anyone in any state in which
such offer or solicitation may not lawfully be made. Neither the
delivery of this Prospectus Supplement or any Prospectus nor any
sale made hereunder or thereunder shall, under any circumstances,
create any implication that there had been no change in the
affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
Prospectus Supplement
The Company S-2
Use of Proceeds S-2
Selected Ratios S-2
Certain Terms of the % Preferred Stock S-3
Tax Considerations S-5
Underwriting S-7
Validity of Securities S-7
Experts S-7
Prospectus
Available Information 2
Documents Incorporated by Reference 2
The Company 3
Use of Proceeds 3
Selected Ratios 3
Description of Debt Securities 3
Description of Capital Stock 11
Plan of Distribution 16
Experts 18
Validity of Securities 18
500,000 Shares
CBI INDUSTRIES, INC.
% Cumulative Preferred Stock, Series D
Liquidation Preference
$100 per share
PROSPECTUS SUPPLEMENT
March , 1995
Lehman Brothers
Merrill Lynch & Co.
