Lump Sum Award in Saudi Arabia and Two New Awards
in Qatar
McDermott International, Inc. (NYSE:MDR) (“McDermott” or the
“Company”) today announced financial and operational results for
the quarter ended September 30, 2015. The Company realized
third quarter 2015 adjusted net income of $26.7 million, or $0.09
per fully diluted share, excluding restructuring charges of $6.3
million and a legal settlement of $16.7 million, compared to an
adjusted net loss of $25.5 million, or $0.11 per fully diluted
share, excluding restructuring charges of $4.7 million in the
prior-year quarter. The calculations of total and per share
adjusted net income and adjusted operating income are shown in the
tables below under the caption “Reconciliation of GAAP to Non-GAAP
Financial Measures.”
Consolidated GAAP third quarter 2015 earnings
per share attributable to McDermott stockholders, including the
restructuring charges and the legal settlement, were earnings of
$0.01 per fully diluted share, compared to a loss of $0.13 per
fully diluted share for the prior-year quarter.
“This was a very strong quarter of new awards
for the Company, predominantly in our core Middle East markets. The
award of the first lump sum contract under the new Saudi Aramco
Long Term Agreement in the quarter represents the single largest
award in the history of our Middle East business and demonstrates
that our ongoing emphasis on client engagement is generating
tangible results. Additionally, we were successful in winning two
new contracts in Qatar, bringing our awards in that country to four
this year,” said David Dickson, President and Chief Executive
Officer of McDermott. “Our continued focus on project execution is
also generating positive results. During the quarter, we saw the
successful sail-away of the PB Litoral structure from our Altamira
yard and our marine campaign at Ichthys remains on schedule. While
the macro commodity price environment remains challenging and our
customers are assessing a lower for longer commodity price
scenario, we continue to see project opportunities moving forward
in the offshore brownfield markets and with our key Middle East
customers.”
Third Quarter 2015 Operating
Results
The Company reported third quarter 2015 revenues
of $805.9 million, an increase of $391.3 million, compared to
revenues of $414.6 million for the prior-year third quarter.
Revenues for the third quarter of 2015 were positively impacted by
strong revenue recognition at the INPEX Ichthys project, three
Middle East projects, the Brunei Shell Petroleum project and the PB
Litoral project in Mexico.
McDermott’s adjusted operating income was $52.5
million for the third quarter of 2015, excluding restructuring
charges and the legal settlement mentioned above. These results
compare to the 2014 third quarter adjusted operating loss of $6.0
million, excluding restructuring charges. Operating income
for the third quarter 2015 was positively impacted by loss recovery
from the PB Litoral project, as a result of a confirmed contract
extension, as well as the successful negotiation and conclusion of
certain weather claims in the Middle East and improved marine
utilization.
Cash provided by operating activities in the
third quarter 2015 was $20.7 million, compared to a use of cash of
$19.4 million for the third quarter 2014.
Operational Update
In the Americas, Europe and Africa area (“AEA”),
fabrication of the PB Litoral structure was completed in the
Altamira yard and the 7,200-ton structure was loaded out on
schedule. The PB Litoral project team achieved 2.9 million
man-hours without a Lost Time Injury (“LTI”). Offshore, the
installation of the jacket and tripod structures was also completed
in late September. The final hookup, commissioning and start-up is
expected to be complete during the first quarter of 2016. During
the quarter, McDermott’s Derrick Barge 50 (“DB 50”) and North Ocean
102 (“NO 102”) vessels successfully executed the first phase of the
Exxon Julia offshore project with transportation of umbilical
product from Norway, as well as the installation of piles, primary
and secondary subsea distribution units and a manifold. The second
phase of the NO 102 scope at the Julia project is well progressed
and the DB 50 is scheduled to return to the field at the end of
2015 for the final installation work. The DB 50 also successfully
executed module lifts for Deep Gulf Energy and Enbridge in the Gulf
of Mexico during the quarter. With the award of the LLOG OTIS
subsea project announced in the second quarter, the McDermott
spoolbase development in Gulfport, Mississippi, continues to
advance and was fully operational at the end of October. The
spoolbase is expected to deliver rigid pipe for the North Ocean 105
offshore installation at the LLOG project in the first quarter of
2016.
In the Middle East area (“MEA”), following the
Company’s selection by Saudi Aramco as one of the finalists for its
new Long Term Agreement (“LTA”), McDermott was awarded a lump sum
contract for brownfield work in four fields offshore Saudi
Arabia. The award for a full scope engineering, procurement,
construction and installation (“EPCI”) project represents the
largest single award for MEA operations in Company
history. Utilizing the Company’s shallow water installation
vessels and fabrication yards in Dammam and Jebel Ali, the complex
project work is expected to be completed in 2018. McDermott also
received two new awards during the quarter for work in Qatar. The
first award was from RasGas and the second from Qatar Petroleum for
brownfield work offshore Qatar. Each of these awards represents the
second award McDermott has received from these customers during
2015. Marine Operations in the area achieved a number of
major safety milestones during the quarter reaching 5 million
man-hours LTI free, including 4 years without a recordable incident
and 12 million man-hours LTI free on board one of the Company’s key
vessels, the DB 27.
In the Asia area (“ASA”), the INPEX Ichthys
project achieved all of the agreed-upon milestones during the
quarter, remaining on schedule. McDermott’s Construction Support
Vessel 108 successfully completed the majority of its 2015 marine
campaign with good productivity and the project’s HSE performance
continues to be strong, achieving over 14 million man-hours without
an LTI. In addition, all the inline structures required for pipelay
at Ichthys have now been completed in the Company’s Batam
yard. At the Brunei Shell Petroleum Project, the Derrick
Barge 30 (“DB 30”) and Emerald Sea are nearing completion of the
complex 2015 program. The DB 30, Emerald Sea and various supporting
vessels completed the installation of approximately 4 miles of
corrosion resistant alloy pipelay, 16 miles of carbon steel pipelay
and 3 miles of umbilical installation. Precommissioning and tie-in
activities also commenced during the quarter. In August, the
Batam yard was awarded a contract to fabricate over 22,000 tons of
LNG modules adding to the over 13,000 tons of LNG modules awarded
to McDermott’s joint venture QMW in June. The fabrication yard also
celebrated a significant milestone of 30 million fabrication
man-hours without a LTI, establishing a decade long track record of
safety.
Other Financial Information
As of September 30, 2015, McDermott reported
total assets of $3.4 billion. Included in this amount was $767.2
million in cash and cash equivalents and restricted cash. At
quarter end, the Company had $851.2 million in debt outstanding,
inclusive of $21.8 million of debt issuance costs, and total equity
of $1.6 billion, or 46% of total assets.
Weighted average common shares outstanding on a
fully diluted basis were approximately 280.8 million and 237.4
million for the quarters ended September 30, 2015 and September 30,
2014, respectively. Common shares for the settlement of the common
stock purchase contracts related to the Tangible Equity Units
(“TEUs”) representing 40.9 million additional shares, as well as
other potentially dilutive shares, were included in the calculation
of diluted weighted average shares for the quarter ended September
30, 2015, due to the Company’s positive Net Income position. For
the quarter ended September 30, 2014, the TEUs and other dilutive
shares were not considered in the fully diluted share count, due to
their anti-dilutive effects.
Contract Backlog Summary
As of September 30, 2015, the Company’s backlog
was $4.4 billion, compared to $3.1 billion at June 30, 2015. Of the
September 30, 2015 backlog, approximately 73% is related to
offshore operations and approximately 27% is related to subsea
operations. Order intake in the third quarter 2015 totaled $2.1
billion and included the new LTA lump sum award from Saudi Aramco
and two awards in Qatar.
At September 30, 2015, the Company was targeting
to bid approximately $16.6 billion in projects that it expects to
be awarded to the market through December 31, 2016. In total,
the Company’s potential revenue pipeline, including backlog, was
$23.6 billion as of September 30, 2015.
Cost Structure Update
The McDermott Profitability Initiative (“MPI”) is expected to
exceed its annual target and the Company now expects to realize
in-year cash savings of over $100 million in 2015, before
restructuring charges. Keys to exceeding the original milestone
have been the continued rightsizing of the organization, quicker
returns on the strategic sourcing and hybrid crewing initiatives
and other general policy changes the Company has implemented.
Progress during the quarter included the roll-out of the hybrid
crewing model and the beginning of the relocation of the Halifax
marine office to Houston; the signing of several frame agreements
with suppliers to solidify savings and leverage the Company’s
global purchasing power; and the decision to relocate the Company’s
Asia area headquarters from Singapore to Kuala Lumpur to take
advantage of a more favorable cost structure and to create a
greater in-country presence in Malaysia for some of McDermott’s key
customers. Restructuring costs for the quarter were $6.3
million.
Conference Call
McDermott has scheduled a conference call and
webcast related to its third quarter 2015 results today at 4:00
p.m. U.S. Central Time. Interested parties may listen over
the Internet through a link posted in the Investor Relations
section of the Company’s Web site. A replay of the webcast will be
available for seven days after the call and may be accessed by
dialing (855) 859-2056, Passcode #56013885. In addition, a
presentation will be available on the Investor Relations section of
the Company’s Web site that contains supplemental information on
the Company’s financial results, operations and business
outlook.
About the Company
McDermott is a leading provider of integrated
engineering, procurement, construction and installation (EPCI)
services for upstream field developments worldwide. The
Company delivers fixed and floating production facilities,
pipelines and subsea systems from concept to commissioning for
complex Offshore and Subsea oil and gas projects to help oil
companies safely produce and transport hydrocarbons. Our
customers include national and major energy companies.
Operating in approximately 20 countries across the world, our
locally focused and globally integrated resources include
approximately 10,300 employees, a diversified fleet of specialty
marine construction vessels, fabrication facilities and engineering
offices. We are renowned for our extensive knowledge and
experience, technological advancements, performance records,
superior safety and commitment to deliver. McDermott has
served the energy industry since 1923 and is listed on the New York
Stock Exchange.
To learn more, please visit our website at
www.mcdermott.com
NON-GAAP MEASURESThis press release includes
several “non-GAAP” financial measures as defined under Regulation G
of the U.S. Securities Exchange Act of 1934, as amended. We report
our financial results in accordance with U.S. generally accepted
accounting principles, but believe that certain non-GAAP financial
measures provide useful supplemental information to investors
regarding the underlying business trends and performance of our
ongoing operations and are useful for period-over-period
comparisons of those operations. The non-GAAP measures we have
presented in this press release include non-GAAP Adjusted Operating
Income (Loss) and the total and diluted per share amounts of
non-GAAP Adjusted Net Income (Loss) Attributable to the Company.
Each of these non-GAAP financial measures excludes the effect of
restructuring charges and a legal settlement. These non-GAAP
financial measures should be considered as a supplement to, and not
as a substitute for, or superior to, the financial measures
prepared in accordance with GAAP.
Reconciliations of these non-GAAP financial
measures to the most comparable GAAP measures are provided in the
supplemental information set forth at the end of this press
release.
Forward-Looking Statements
In accordance with the Safe Harbor provisions of
the Private Securities Litigation Reform Act of 1995, McDermott
cautions that statements in this press release which are
forward-looking, and provide other than historical information,
involve risks, contingencies and uncertainties that may impact
McDermott's actual results of operations. These
forward-looking statements include, but are not limited to,
statements about: backlog, bids and change orders outstanding,
projects McDermott expects to bid and the expected timing of award
of such, and revenue pipeline, to the extent to which these may be
viewed as indicators of future revenues or profitability; continued
project opportunities in certain markets and with certain
customers; the expected scope, execution and timing associated with
certain projects discussed herein; expected earnings and other
financial guidance provided for the full year of 2015; expectations
regarding improvements and savings related to McDermott’s
profitability initiative; and the Company’s plans or expectations
with respect to certain marine operations. Although we believe that
the expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will
prove to have been correct. Those statements are made by
using various underlying assumptions and are subject to numerous
risks, contingencies and uncertainties, including, among others:
adverse changes in the markets in which we operate or credit
markets; our inability to successfully execute on contracts in
backlog; changes in project design or schedules; the availability
of qualified personnel; changes in the terms, scope or timing of
contracts, contract cancellations, change orders and other
modifications and actions by our customers and business partners;
changes in industry norms and adverse outcomes in legal or other
dispute resolution proceedings. If one or more of these risks
materialize, or if underlying assumptions prove incorrect, actual
results may vary materially from those expected. You should
not place undue reliance on forward-looking statements. For a more
complete discussion of these and other risk factors, please see
McDermott's annual and quarterly filings with the Securities and
Exchange Commission, including its annual report on Form 10-K for
the year ended December 31, 2014 and subsequent quarterly reports
on Form 10-Q. This press release reflects management's views
as of the date hereof. Except to the extent required by applicable
law, McDermott undertakes no obligation to update or revise any
forward-looking statement.
|
|
McDERMOTT INTERNATIONAL, INC. |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
(In thousands, except share and per share
amounts) |
|
|
|
|
Revenues |
$ |
805,857 |
|
|
$ |
414,595 |
|
|
$ |
2,402,857 |
|
|
$ |
1,494,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations |
|
720,961 |
|
|
|
370,271 |
|
|
|
2,121,942 |
|
|
|
1,394,062 |
|
Selling,
general and administrative expenses |
|
44,664 |
|
|
|
51,681 |
|
|
|
144,133 |
|
|
|
157,089 |
|
Loss
(gain) on disposal of assets |
|
(100 |
) |
|
|
(4,818 |
) |
|
|
1,443 |
|
|
|
(46,362 |
) |
Impairment loss (recovery) |
|
- |
|
|
|
- |
|
|
|
6,808 |
|
|
|
(10,664 |
) |
Restructuring expenses |
|
6,346 |
|
|
|
4,724 |
|
|
|
32,126 |
|
|
|
12,112 |
|
Total
costs and expenses |
|
771,871 |
|
|
|
421,858 |
|
|
|
2,306,452 |
|
|
|
1,506,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Investments
in Unconsolidated Affiliates |
|
(4,526 |
) |
|
|
(3,448 |
) |
|
|
(18,748 |
) |
|
|
(5,647 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
29,460 |
|
|
|
(10,711 |
) |
|
|
77,657 |
|
|
|
(17,395 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
(13,015 |
) |
|
|
(11,847 |
) |
|
|
(38,179 |
) |
|
|
(50,531 |
) |
Gain
(loss) on foreign currency, net |
|
(1,373 |
) |
|
|
(2,397 |
) |
|
|
(898 |
) |
|
|
143 |
|
Other
income (expense), net |
|
1,556 |
|
|
|
473 |
|
|
|
1,100 |
|
|
|
(104 |
) |
Total
other expense |
|
(12,832 |
) |
|
|
(13,771 |
) |
|
|
(37,977 |
) |
|
|
(50,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes and noncontrolling interests |
|
16,628 |
|
|
|
(24,482 |
) |
|
|
39,680 |
|
|
|
(67,887 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
9,094 |
|
|
|
1,464 |
|
|
|
30,504 |
|
|
|
9,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
7,534 |
|
|
|
(25,946 |
) |
|
|
9,176 |
|
|
|
(77,628 |
) |
Less: net
income attributable to noncontrolling interest |
|
3,868 |
|
|
|
4,306 |
|
|
|
8,491 |
|
|
|
6,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to McDermott International, Inc. |
$ |
3,666 |
|
|
$ |
(30,252 |
) |
|
$ |
685 |
|
|
$ |
(84,169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to McDermott International, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
|
$ |
(0.13 |
) |
|
$ |
- |
|
|
$ |
(0.35 |
) |
Diluted |
$ |
0.01 |
|
|
$ |
(0.13 |
) |
|
$ |
- |
|
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
computation of income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
238,594,178 |
|
|
|
237,429,394 |
|
|
|
238,128,962 |
|
|
|
237,262,044 |
|
Diluted: |
|
280,797,155 |
|
|
|
237,429,394 |
|
|
|
279,025,262 |
|
|
|
237,262,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McDERMOTT INTERNATIONAL, INC. |
|
EARNINGS PER SHARE COMPUTATION |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share and per share
amounts) |
|
|
|
|
|
Net income (loss)
attributable to McDermott International, Inc. |
|
$ |
3,666 |
|
|
$ |
(30,252 |
) |
|
$ |
685 |
|
|
$ |
(84,169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares (basic) |
|
|
238,594,178 |
|
|
|
237,429,394 |
|
|
|
238,128,962 |
|
|
|
237,262,044 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity units |
|
|
40,896,300 |
|
|
|
- |
|
|
|
40,896,300 |
|
|
|
- |
|
Stock
options, restricted stock and restricted stock units |
|
|
1,306,677 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted weighted
average common shares and assumed exercises of stock options and
vesting of stock awards (diluted) |
|
|
280,797,155 |
|
|
|
237,429,394 |
|
|
|
279,025,262 |
|
|
|
237,262,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to McDermott International, Inc. |
|
$ |
0.02 |
|
|
$ |
(0.13 |
) |
|
$ |
- |
|
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to McDermott International,
Inc. |
|
$ |
0.01 |
|
|
$ |
(0.13 |
) |
|
$ |
- |
|
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY DATA |
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
Depreciation &
amortization expense |
|
24,611 |
|
|
|
22,408 |
|
|
|
75,982 |
|
|
|
68,655 |
|
Drydock
amortization |
|
4,252 |
|
|
|
5,601 |
|
|
|
13,910 |
|
|
|
15,567 |
|
Capital
expenditures |
|
18,133 |
|
|
|
61,569 |
|
|
|
66,118 |
|
|
|
216,526 |
|
Backlog |
|
4,420,579 |
|
|
|
3,979,707 |
|
|
|
4,420,579 |
|
|
|
3,979,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McDERMOTT INTERNATIONAL, INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
September 30, 2015 |
|
|
December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
(In thousands, except shares and par value
data) |
|
Assets |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
631,385 |
|
|
$ |
665,309 |
|
Restricted cash and cash equivalents |
|
|
135,816 |
|
|
|
187,585 |
|
Accounts receivable – trade, net |
|
|
123,183 |
|
|
|
143,370 |
|
Accounts receivable – other |
|
|
61,058 |
|
|
|
79,915 |
|
Contracts in progress |
|
|
515,418 |
|
|
|
357,617 |
|
Deferred income taxes |
|
|
8,298 |
|
|
|
7,514 |
|
Other current assets |
|
|
41,782 |
|
|
|
46,071 |
|
Total Current Assets |
|
|
1,516,940 |
|
|
|
1,487,381 |
|
Property, Plant and Equipment |
|
|
2,464,319 |
|
|
|
2,487,815 |
|
Less Accumulated depreciation |
|
|
(860,011 |
) |
|
|
(830,467 |
) |
Net Property, Plant and Equipment |
|
|
1,604,308 |
|
|
|
1,657,348 |
|
Accounts Receivable – Long-Term Retainages |
|
|
146,361 |
|
|
|
137,468 |
|
Investments in Unconsolidated Affiliates |
|
|
29,022 |
|
|
|
38,186 |
|
Deferred Income Taxes |
|
|
11,953 |
|
|
|
17,313 |
|
Investments |
|
|
729 |
|
|
|
2,216 |
|
Other
Assets |
|
|
74,896 |
|
|
|
76,967 |
|
Total Assets |
|
$ |
3,384,209 |
|
|
$ |
3,416,879 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Notes payable and current maturities of long-term
debt |
|
$ |
27,749 |
|
|
$ |
27,026 |
|
Accounts payable |
|
|
303,790 |
|
|
|
219,384 |
|
Accrued liabilities |
|
|
377,663 |
|
|
|
369,749 |
|
Advance billings on contracts |
|
|
97,371 |
|
|
|
199,865 |
|
Deferred income taxes |
|
|
17,492 |
|
|
|
19,753 |
|
Income taxes payable |
|
|
14,547 |
|
|
|
25,165 |
|
Total Current Liabilities |
|
|
838,612 |
|
|
|
860,942 |
|
Long-Term Debt |
|
|
823,485 |
|
|
|
837,443 |
|
Self-Insurance |
|
|
19,589 |
|
|
|
17,026 |
|
Pension Liability |
|
|
16,729 |
|
|
|
18,403 |
|
Non-current Income Taxes |
|
|
49,669 |
|
|
|
49,229 |
|
Other
Liabilities |
|
|
83,282 |
|
|
|
94,722 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
|
|
|
|
Common stock, par value $1.00 per share, authorized |
|
|
|
|
|
|
|
|
400,000,000 shares; issued 246,774,167 and
245,209,850 shares, respectively |
|
|
246,774 |
|
|
|
245,210 |
|
Capital in excess of par value (including prepaid common
stock purchase contracts) |
|
|
1,685,395 |
|
|
|
1,676,815 |
|
Accumulated Deficit |
|
|
(242,216 |
) |
|
|
(239,572 |
) |
Treasury stock, at cost: 7,810,046 and 7,400,027 shares,
respectively |
|
|
(92,294 |
) |
|
|
(96,441 |
) |
Accumulated other comprehensive loss |
|
|
(104,085 |
) |
|
|
(97,808 |
) |
Stockholders' Equity - McDermott International, Inc. |
|
|
1,493,574 |
|
|
|
1,488,204 |
|
Noncontrolling interest |
|
|
59,269 |
|
|
|
50,910 |
|
Total Equity |
|
|
1,552,843 |
|
|
|
1,539,114 |
|
Total Liabilities and Equity |
|
$ |
3,384,209 |
|
|
$ |
3,416,879 |
|
|
|
|
|
|
|
|
|
McDERMOTT INTERNATIONAL, INC. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
Nine Month Ended September 30, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
(In thousands) |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Net income (loss) |
|
$ |
9,176 |
|
|
$ |
(77,628 |
) |
Non-cash items included
in net income (loss): |
|
|
|
|
Depreciation and amortization |
|
|
75,982 |
|
|
|
68,655 |
|
Drydock
amortization |
|
|
13,910 |
|
|
|
15,567 |
|
Stock-based compensation charges |
|
|
12,991 |
|
|
|
14,387 |
|
Loss from
investments in unconsolidated affiliates |
|
|
18,748 |
|
|
|
5,647 |
|
Loss
(gain) on asset disposals |
|
|
1,443 |
|
|
|
(46,362 |
) |
Impairment loss (recovery) |
|
|
6,808 |
|
|
|
(10,664 |
) |
Restructuring expense (gain) |
|
|
11,954 |
|
|
|
(2,235 |
) |
Deferred
taxes |
|
|
2,315 |
|
|
|
(4,175 |
) |
Other
non-cash items |
|
|
3,164 |
|
|
|
5,210 |
|
Changes in assets and
liabilities, net of effects from acquisitions and
dispositions: |
|
|
|
|
Accounts
receivable |
|
|
11,294 |
|
|
|
44,368 |
|
Net
contracts in progress and advance billings on contracts |
|
|
(260,317 |
) |
|
|
10,353 |
|
Accounts
payable |
|
|
98,552 |
|
|
|
(99,588 |
) |
Accrued
and other current liabilities |
|
|
(7,269 |
) |
|
|
(16,200 |
) |
Pension
liability and accrued postretirement and employee benefits |
|
|
(1,319 |
) |
|
|
1,180 |
|
Other
assets and liabilities |
|
|
(2,778 |
) |
|
|
(20,813 |
) |
TOTAL
CASH USED IN OPERATING ACTIVITIES |
|
|
(5,346 |
) |
|
|
(112,298 |
) |
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property,
plant and equipment |
|
|
(66,118 |
) |
|
|
(216,526 |
) |
Restricted cash and
cash equivalents |
|
|
51,769 |
|
|
|
(215,663 |
) |
Purchases of
available-for-sale securities |
|
|
- |
|
|
|
(1,997 |
) |
Sales and maturities of
available-for-sale securities |
|
|
3,175 |
|
|
|
12,903 |
|
Investments in
unconsolidated affiliates |
|
|
(6,960 |
) |
|
|
- |
|
Proceeds from asset
dispositions |
|
|
10,669 |
|
|
|
70,252 |
|
Other |
|
|
417 |
|
|
|
(5,076 |
) |
TOTAL
CASH USED IN INVESTING ACTIVITIES |
|
|
(7,048 |
) |
|
|
(356,107 |
) |
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from debt |
|
|
- |
|
|
|
1,337,500 |
|
Repayment of debt |
|
|
(18,004 |
) |
|
|
(289,542 |
) |
Debt issuance cost |
|
|
- |
|
|
|
(46,914 |
) |
Distribution to
noncontrolling interest |
|
|
(24 |
) |
|
|
(5,002 |
) |
Other |
|
|
(928 |
) |
|
|
(1,537 |
) |
TOTAL
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
(18,956 |
) |
|
|
994,505 |
|
|
|
|
|
|
EFFECTS OF EXCHANGE
RATE CHANGES ON CASH |
|
|
(2,574 |
) |
|
|
(851 |
) |
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS |
|
|
(33,924 |
) |
|
|
525,249 |
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
665,309 |
|
|
|
118,702 |
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD |
|
$ |
631,385 |
|
|
$ |
643,951 |
|
|
McDERMOTT INTERNATIONAL,
INC. RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
McDermott reports its financial results in
accordance with the U.S. generally accepted accounting principles
(“GAAP”). This press release also includes several Non-GAAP1
financial measures as defined under the SEC’s Regulation G. The
following table reconciles Non-GAAP financial measures to
comparable GAAP financial measures:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
Diluted Earnings |
|
|
|
Diluted Earnings
|
|
|
|
Net (Loss) Income |
|
(Loss) Per
Share |
|
Net (Loss)
Income |
|
(Loss)Per
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income
(Loss) Attributable to the Company |
|
$ |
3,666 |
|
|
0.01 |
|
$ |
(30,252 |
) |
|
|
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
Less:
Adjustments |
|
|
|
|
|
|
|
|
|
Restructuring charges2 |
|
|
6,346 |
|
|
0.02 |
|
|
4,724 |
|
|
|
0.02 |
|
|
Legal
settlement3 |
|
|
16,682 |
|
|
0.06 |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
Adjustments |
|
|
23,028 |
|
|
0.08 |
|
|
4,724 |
|
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted Net Income (Loss) Attributable
to the
Company |
|
|
26,694 |
|
|
0.09 |
|
|
(25,528 |
) |
|
|
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
September 30, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
GAAP Operating
Income (Loss) |
|
$ |
29,460 |
|
|
$ |
(10,711 |
) |
|
|
|
|
|
Non-GAAP
Adjustments |
|
|
23,028 |
|
|
|
4,724 |
|
|
|
|
|
|
Non-GAAP
Adjusted Operating Income (Loss) |
|
|
52,488 |
|
|
|
(5,987 |
) |
|
1Non-GAAP measures are comprised of the total and diluted per
share amounts of adjusted net income (loss) attributable to the
Company and adjusted operating income (loss), in each case
excluding the impact of certain identified items. The Company
believes that adjusted net income (loss) and adjusted operating
income (loss) are useful measure for investors to review because
they provide a consistent measure of the underlying results of our
ongoing business. Furthermore, management uses adjusted net income
(loss) and adjusted operating income (loss) as a measure of the
performance of our operations. However, Non-GAAP measures should
not considered as substitutes for operating income, net income or
other data prepared and reported in accordance with GAAP and
should be viewed in addition to the Company’s reported results
prepared in accordance with GAAP.
2Restructuring charges of $6.3 million and $4.7
million primarily associated with workforce reductions, facility
closures, consultant fee, contract terminations and asset
impairments were recorded during the third quarter of 2015 and
2014, respectively.
3Costs related to a legal settlement of $16.7
million were recorded during the third quarter of 2015.
CONTACT:
Investors & Financial Media
Darcey Matthews
Vice President, Investor Relations
281.870.5147
dmatthews@mcdermott.com
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