Shaw Reports Third Quarter Fiscal Year 2010 Financial Results

The Shaw Group Inc. (NYSE: SHAW) today announced financial results for the quarter ended May 31, 2010.

"Shaw experienced solid financial results this quarter with earnings largely driven by strong operating performance across nearly all segments of the company,” said J.M. Bernhard Jr., chairman, president and chief executive officer of Shaw. "Our overall results, led by our Environmental & Infrastructure Group, demonstrate consistency in what is still an unpredictable environment.

"We continue to make progress on our nuclear projects, with four units simultaneously under construction in China and additional AP1000™ units planned for the future. Our quarterly earnings also have begun to show an impact from the four nuclear units we currently are building in the United States,” said Mr. Bernhard. "And just this morning, we announced that Shaw has teamed with Toshiba and Exelon to pursue opportunities to provide a full complement of services to design, construct and operate new nuclear power plants in Saudi Arabia using Toshiba’s Advanced Boiling Water Reactor and Westinghouse AP1000 technologies. This agreement creates new opportunities for Shaw and further demonstrates our leadership position in the nuclear power industry.”

Quarterly Financial Summary:

Results Excluding the Westinghouse Segment:

Because of the impact on reported earnings from translating Shaw’s Japanese yen-denominated bonds, Shaw uses financial results excluding its Westinghouse segment to communicate financial performance to investors, as well as internally for setting budgets, determining forecasts, setting incentive compensation targets and reporting results to management and the board of directors.

Following are Shaw’s financial results excluding the Westinghouse segment:

Results Including the Westinghouse Segment:

Shaw has a 20 percent equity interest in two companies, which together with their subsidiaries are referred to as the Westinghouse Group. Shaw financed this investment partially through limited recourse Japanese yen-denominated bonds and entered into a yen-denominated put option agreement with Toshiba, which provides Shaw the option to sell all or part of its equity interest to Toshiba. The Japanese yen-denominated bonds must be revalued at each quarter’s end to the current U.S. dollar exchange rate; however, the put option, which naturally hedges the foreign exchange movements of the Japanese yen-denominated bonds, is not revalued at current exchange rates for U.S. financial reporting purposes.

The following financial results include Shaw’s Westinghouse segment and a non-operating, non-cash foreign exchange translation gain of $34.1 million pre-tax, or $20.9 million after-tax, for the third quarter of fiscal year 2010. Translation gains and losses impacting the Westinghouse segment result solely from movement in exchange rates between the U.S. dollar and the Japanese yen.

Fiscal Year 2010 Guidance:

Guidance for fiscal year 2010 is:

• Revenue: approximately $7 billion
• Diluted earnings per share, excluding Westinghouse: $2.10 - $2.20 per share
• Operating cash flow: approximately $345 million, revised from second quarter fiscal year 2010

Conference Call:

A conference call to discuss the company’s financial results will be held today, Monday, July 12, at 9 a.m. Eastern time (8 a.m. Central time). A slide presentation will be posted on the Investor Relations page of Shaw's website at www.shawgrp.com approximately one hour prior to the conference call.

Interested parties may dial 1-800-471-6718 to listen to the conference call live or access a live audio webcast on the Investor Relations page of Shaw’s website at www.shawgrp.com.

A replay of the conference call will be available by telephone, as well as on the company’s website, approximately one hour after the conclusion of the call. To listen to a replay of the conference call by telephone, dial 1-888-843-8996 and use pass code 27316169#.

Calculation of EBITDA:

The Shaw Group Inc. defines EBITDA as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by Shaw to assess performance. Although it is calculated using components derived from our financial statements prepared under generally accepted accounting principles (GAAP), EBITDA itself is not a GAAP measure. A table reconciling EBITDA to its most directly comparable GAAP measure is included in the summarized financial information within this release. Calculations of EBITDA should not be viewed as a substitute for calculations under GAAP, including net cash provided by operations, operating income and net income attributable to Shaw. In addition, EBITDA calculations by one company may not be comparable to EBITDA calculations made by another company.

Calculation of Total Cash:

The Shaw Group Inc. defines total cash as the sum of cash and cash equivalents, restricted and escrowed cash and cash equivalents, short-term investments and restricted short-term investments.

The Shaw Group Inc. (NYSE:SHAW) is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. A Fortune 500 company with fiscal year 2009 annual revenues of $7.3 billion, Shaw has approximately 28,000 employees around the world and is the power sector industry leader according to Engineering News-Record’s list of Top 500 Design Firms. For more information, please visit Shaw’s website at www.shawgrp.com.

This press release may contain forward-looking statements that are not historical facts (including without limitation statements to the effect that the Company or its management "believes,” "expects,” "anticipates,” "plans” or other similar expressions). Statements related to revenues, earnings, backlog or other financial information or results are forward-looking statements based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. These forward looking statements, include, among others, statements we make regarding expected domestic and international new build nuclear construction and uprate projects, market potential for new build gas plant projects, market for potential increases in AQC projects, increasing demand for petrochemical services as well as our updated guidance as to our projected financial results for fiscal 2010. Actual results may differ materially from the forward looking statements which involve significant risks, uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Some of those risks include, but are not limited to: changes in our client’s financial conditions including their capital spending, the Company’s ability to obtain new contracts and perform under those contracts, client cancellations of a contract or changes in scope, deterioration of global economic conditions, changes in the regulatory environment, and failure to achieve projected backlog. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. More information about some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company’s reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K filed on October 29, 2009 , and on the Company’s website under the heading "Forward-Looking Statements.” These documents are also available from the Securities and Exchange Commission or from Shaw’s Investor Relations department. For more information on the Company and announcements it makes from time to time on a regional basis, visit our website at www.shawgrp.com