McDermott International, Inc. (NYSE:MDR) (�McDermott� or the
�Company�) today reported net income of $177.5 million, or $0.77
per diluted share, for the 2008 second quarter, compared to net
income of $149.4 million, or $0.66 per diluted share, for the
corresponding period in 2007. Weighted average common shares
outstanding on a fully diluted basis were approximately 230.4
million and 227.9 million in the quarters ended June 30, 2008 and
June 30, 2007, respectively. For 2007, the Company�s common shares
outstanding and earnings per share are adjusted to reflect the
2-for-1 stock split effected in September 2007. McDermott�s
revenues in the second quarter of 2008 were $1,792.6 million, an
increase of 26.4 percent compared to $1,418.1 million in the
corresponding period in 2007. The year-over-year improvement in
Company revenues was primarily the result of a 50 percent increase
from the Offshore Oil & Gas Construction segment. Operating
income was $231.1 million in the 2008 second quarter, an increase
of 27.1 percent compared to $181.8 million in the 2007 second
quarter. Each of McDermott�s business segments reported increased
operating income compared to the second quarter a year-ago, led by
a $30.6 million increase in the Power Generation Systems� segment
income. The year-over-year increase in the segment income is
substantial, as the second quarter of 2007 included a previously
disclosed $50 million one-time benefit resulting from contract
terminations and a variety of settlements. �In the 2008 second
quarter, McDermott delivered record revenues, operating income and
net income for a quarter, which demonstrated the strength of our
diversified, energy-focused E&C business model,� said Bruce W.
Wilkinson, Chairman of the Board and Chief Executive Officer of
McDermott. �The strong project execution in our Power Generation
Systems segment, as well as its robust parts and service offerings,
coupled with growth in the Government Operations segment led to the
Company�s overall strong performance.� At June 30, 2008,
McDermott�s consolidated backlog was $9.8 billion, compared to $8.9
billion and $10.2 billion at June 30, 2007 and March 31, 2008,
respectively. RESULTS OF OPERATIONS 2008 Second Quarter Compared to
2007 Second Quarter Offshore Oil & Gas Construction Segment
Revenues in the Offshore Oil & Gas Construction segment were
$872.3 million in the 2008 second quarter, compared to $580.0
million for the same period a year ago. The year-over-year increase
in revenues resulted from increased activities in the Middle East
and Asia Pacific regions, partially offset by reduced fabrication
in the Caspian region. Segment income for the 2008 second quarter
was $98.0 million, compared to $91.1 million in the 2007 first
quarter. Major areas contributing to second quarter 2008 segment
income include activities in the Middle East, Caspian and Asia
Pacific regions, including worldwide marine projects. At June 30,
2008, segment backlog was $5.3 billion, compared to backlog of $4.6
billion and $5.3 billion at June 30, 2007 and March 31, 2008,
respectively. Power Generation Systems Segment Revenues in the
Power Generation Systems segment for the second quarter of 2008
were $698.1 million, compared to $673.6 million in the second
quarter of 2007. The increase in revenues resulted primarily from a
higher level of retrofit activity of existing facilities,
replacement parts and service, and replacement nuclear steam
generators. Segment income for the 2008 second quarter was $106.0
million, compared to $75.4 million in the 2007 second quarter.
Major activities contributing to second quarter 2008 segment income
include the supply and construction of new boilers and
environmental equipment, retrofit projects of existing facilities,
replacement nuclear steam generators, and related parts and
services. In the 2007 second quarter, approximately $50 million of
segment income related to benefits from contract terminations and a
variety of settlements. At June 30, 2008, segment backlog was $3.0
billion, compared to backlog of $2.8 billion and $3.2 billion at
June 30, 2007 and March 31, 2008, respectively. Government
Operations Segment Revenues in the Government Operations segment
were $225.8 million in the 2008 second quarter, compared to $167.7
million for the same period a year ago. The improvement was
primarily due to higher volumes and procurement activity in the
manufacture of nuclear components for certain U.S. Government
programs, and higher volumes for a commercial uranium enrichment
project which was awarded in June 2007. Segment income for the 2008
second quarter was $42.5 million, compared to $29.7 million in the
2007 second quarter. Major items contributing to second quarter
2008 segment income include the manufacture of nuclear components
for certain U.S. Government programs, the manufacture of nuclear
components for a commercial uranium enrichment project, and the
management and operations of various U.S. Government sites. At June
30, 2008, segment backlog was $1.5 billion, compared to backlog of
$1.5 billion and $1.7 billion at June 30, 2007 and March 31, 2008,
respectively. Corporate Unallocated corporate expenses were $15.4
million in the 2008 second quarter, compared to $14.3 million in
the 2007 second quarter. The year-over-year increase was primarily
related to higher stock-based compensation expense and costs
associated with information technology upgrades. Other Income and
Expense; Provision for Income Taxes The Company�s other income for
the second quarter of 2008 was $10.0 million, compared to $9.5
million in the second quarter of 2007. McDermott�s provision for
income taxes in the 2008 second quarter was $63.6 million or 26.4
percent of pre-tax income, compared to $41.9 million or 21.9
percent of pre-tax income in the 2007 second quarter. The
year-over-year increase in the provision for income taxes was due
to a $49.9 million improvement in consolidated pretax income and a
greater proportion of Company pretax income being generated within
higher tax jurisdictions. OTHER INFORMATION About the Company
McDermott is an engineering and construction company, with
specialty manufacturing and service capabilities, focused on energy
infrastructure. McDermott�s customers are predominantly utilities
and other power generators, major and national oil companies, and
the United States Government. With its global operations, McDermott
operates in over 20 countries with more than 25,000 employees.
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 and uncertainties that may impact the Company�s
actual results of operations. These forward-looking statements
include statements about backlog, to the extent backlog may be
viewed as an indicator of future revenues. 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
uncertainties and risks, including adverse changes in the markets
in which we operate, our inability to successfully execute on
contracts in backlog or changes in the scope or timing of contracts
in backlog. If one or more of these risks materialize, or if
underlying assumptions prove incorrect, actual results may vary
materially from those expected. 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 report on Form 10-K for the year ended December 31,
2007. Conference Call to Discuss Second Quarter 2008 Earnings
Release Date: � Tuesday, August 12, 2008, at 10:00 a.m. EDT (9:00
a.m. CDT) Live Webcast: Investor Relations section of Web site at
www.mcdermott.com Replay: Available for two weeks in the investor
relations section of www.mcdermott.com � McDERMOTT INTERNATIONAL,
INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME � � Three Months
Ended Six Months Ended June 30, June 30, 2008 � 2007 2008 � 2007
(Unaudited) (In thousands, except shares and per share amounts) � �
Revenues � $1,792,646 � � $1,418,146 � � $3,243,072 � � $2,781,576
� � Costs and Expenses: Cost of operations 1,432,736 1,128,552
2,621,432 2,210,618 Gains on asset disposals � net (17 ) (115 )
(11,460 ) (1,750 ) Selling, general and administrative expenses �
138,055 � � 115,225 � � 264,786 � � 212,987 � Total Costs and
Expenses � 1,570,774 � � 1,243,662 � � 2,874,758 � � 2,421,855 � �
Equity in Income of Investees � 9,252 � � 7,308 � � 19,922 � �
14,549 � � Operating Income � 231,124 � � 181,792 � � 388,236 � �
374,270 � � Other Income (Expense): Interest income 9,145 15,821
22,540 28,139 Interest expense (959 ) (5,366 ) (3,899 ) (14,955 )
Other income (expense) � net � 1,831 � � (975 ) � (2,166 ) � (4,845
) Total Other Income � 10,017 � � 9,480 � � 16,475 � � 8,339 � �
Income before Provision for Income Taxes 241,141 191,272 404,711
382,609 � Provision for Income Taxes � 63,602 � � 41,898 � �
103,982 � � 75,174 � � Net Income � $177,539 � � $149,374 � �
$300,729 � � $307,435 � � Earnings per Share: Basic $0.78 $0.67
$1.33 $1.38 Diluted � $0.77 � � $0.66 � � $1.31 � � $1.35 � �
Shares used in the computation of earnings per share: Basic
226,862,500 222,763,966 226,247,335 222,176,796 Diluted �
230,408,760 � � 227,903,468 � � 230,260,810 � � 228,170,940 � �
McDERMOTT INTERNATIONAL, INC. SELECTED SEGMENT INFORMATION � �
Three Months Ended Six Months Ended June 30, June 30, 2008 � 2007
2008 � 2007 (Unaudited) (In thousands) REVENUES Offshore Oil and
Gas Construction $ 872,268 $ 579,977 $ 1,518,217 $ 1,130,246
Government Operations 225,764 167,726 416,358 329,125 Power
Generation Systems 698,071 673,591 1,314,369 1,329,005 Adjustments
and Eliminations � � (3,457 ) � � (3,148 ) � � (5,872 ) � � (6,800
) TOTAL � $ 1,792,646 � � $ 1,418,146 � � $ 3,243,072 � � $
2,781,576 � � SEGMENT INCOME Offshore Oil and Gas Construction $
98,009 $ 91,056 $ 150,934 $ 212,259 Government Operations 42,503
29,673 80,453 64,428 Power Generation Systems 105,985 75,364
182,243 118,828 Unallocated Corporate � � (15,373 ) � � (14,301 ) �
� (25,394 ) � � (21,245 ) OPERATING INCOME � $ 231,124 � � $
181,792 � � $ 388,236 � � $ 374,270 � � EQUITY IN INCOME (LOSS) OF
INVESTEES (1) Offshore Oil and Gas Construction $ (996 ) $ (1,043 )
$ (1,750 ) $ (1,856 ) Government Operations 10,798 6,519 19,547
12,992 Power Generation Systems � � (550 ) � � 1,832 � � � 2,125 �
� � 3,413 � TOTAL � $ 9,252 � � $ 7,308 � � $ 19,922 � � $ 14,549 �
� DEPRECIATION & AMORTIZATION (1) Offshore Oil and Gas
Construction $ 21,041 $ 7,755 $ 41,004 $ 15,059 Government
Operations 5,660 4,674 11,226 8,374 Power Generation Systems 5,398
5,280 10,895 10,493 Corporate � � 307 � � � 255 � � � 592 � � � 576
� TOTAL � $ 32,406 � � $ 17,964 � � $ 63,717 � � $ 34,502 � �
CAPITAL EXPENDITURES Offshore Oil and Gas Construction $ 47,309 $
55,744 $ 94,546 $ 90,168 Government Operations 4,419 2,313 5,930
4,873 Power Generation Systems 5,513 9,616 12,717 20,802 Corporate
� � 3,866 � � � 145 � � � 7,200 � � � 176 � TOTAL � $ 61,107 � � $
67,818 � � $ 120,393 � � $ 116,019 � � BACKLOG Offshore Oil and Gas
Construction $ 5,272,195 $ 4,611,449 $ 5,272,195 $ 4,611,449
Government Operations 1,501,854 1,491,523 1,501,854 1,491,523 Power
Generation Systems � � 2,998,212 � � � 2,780,337 � � � 2,998,212 �
� � 2,780,337 � TOTAL � $ 9,772,261 � � $ 8,883,309 � � $ 9,772,261
� � $ 8,883,309 � � (1) Included in Segment Income Above �
McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
� � ASSETS � June 30, December 31, 2008 2007 (Unaudited) (In
thousands) � ASSETS Current Assets: Cash and cash equivalents $
678,641 $ 1,001,394 Restricted cash and cash equivalents 70,025
64,786 Investments 299,786 300,092 Accounts receivable � trade, net
786,518 770,024 Accounts and notes receivable � unconsolidated
affiliates 2,929 2,303 Accounts receivable � other 142,052 116,744
Contracts in progress 309,796 194,292 Inventories 116,622 95,208
Deferred income taxes 121,370 160,783 Other current assets � �
66,728 � � 51,874 � Total Current Assets � � 2,594,467 � �
2,757,500 � Property, Plant and Equipment 2,102,607 2,004,138 Less
accumulated depreciation � � 1,130,256 � � 1,090,400 � Net
Property, Plant and Equipment � � 972,351 � � 913,738 � Investments
� � 282,291 � � 162,069 � Goodwill � � 165,288 � � 158,533 �
Deferred Income Taxes � � 99,089 � � 134,292 � Investments in
Unconsolidated Affiliates � � 72,640 � � 62,241 � Other Assets � �
246,283 � � 223,113 � TOTAL � $ 4,432,409 � $ 4,411,486 � McDERMOTT
INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS �
LIABILITIES AND STOCKHOLDERS' EQUITY � June 30, � December 31, 2008
2007 (Unaudited) (In thousands) � LIABILITIES AND STOCKHOLDERS�
EQUITY Current Liabilities: Notes payable and current maturities of
long-term debt $ 6,692 $ 6,599 Accounts payable 481,014 455,659
Accrued employee benefits 283,057 343,812 Accrued liabilities �
other 191,868 175,557 Accrued contract cost 93,906 93,281 Advance
billings on contracts 1,219,977 1,463,223 Accrued warranty expense
106,634 101,330 Income taxes payable � 61,479 � � � 57,071 � �
Total Current Liabilities � 2,444,627 � � � 2,696,532 � � Long-Term
Debt � 6,296 � � � 10,609 � � Accumulated Postretirement Benefit
Obligation � 92,586 � � � 96,253 � � Self-Insurance � 89,827 � � �
82,525 � � Pension Liability � 131,001 � � � 188,748 � � Other
Liabilities � 155,974 � � � 169,814 � � Commitments and
Contingencies � Stockholders� Equity: Common stock, par value $1.00
per share, authorized 400,000,000 shares; issued 233,421,084 and
231,722,659 shares at June 30, 2008 and December 31, 2007,
respectively 233,421 231,723 Capital in excess of par value
1,175,701 1,145,829 Retained earnings 436,018 135,289 Treasury
stock at cost, 5,842,014 and 5,852,248 shares at June 30, 2008 and
December 31, 2007, respectively (63,045 ) (63,903 ) Accumulated
other comprehensive loss � (269,997 ) � � (281,933 ) � Total
Stockholders� Equity � 1,512,098 � � � 1,167,005 � � TOTAL $
4,432,409 � � $ 4,411,486 � � McDERMOTT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS � Six Months Ended
June 30, 2008 � 2007 (Unaudited) (In thousands) CASH FLOWS FROM
OPERATING ACTIVITIES: Net Income $ 300,729 � � $ 307,435 � Non-cash
items included in net income: Depreciation and amortization 63,717
34,502 Income of investees, less dividends (8,528 ) (3,305 ) Gains
on asset disposals � net (11,460 ) (1,750 ) Provision for deferred
taxes 63,547 53,746 Amortization of pension and postretirement
costs 20,266 23,783 Excess tax benefits from FAS 123(R) stock-based
compensation (3,388 ) (20,319 ) Other, net 21,193 12,133 Changes in
assets and liabilities, net of effects of acquisitions and
divestitures: Accounts receivable (35,782 ) (48,039 ) Income tax
receivable (2,661 ) 270,368 Net contracts in progress and advance
billings on contracts (360,000 ) 269,807 Accounts payable 26,321
18,945 Income taxes 3,002 (23,120 ) Accrued and other current
liabilities 22,743 37,592 Pension liability, accumulated
postretirement benefit obligation and accrued employee benefits
(122,638 ) (68,988 ) Other, net � (63,501 ) � � (19,421 ) NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES � (86,440 ) � � 843,369
� CASH FLOWS FROM INVESTING ACTIVITIES: (Increase) decrease in
restricted cash and cash equivalents (5,239 ) 19,842 Purchases of
property, plant and equipment (120,393 ) (116,019 ) Acquisition of
Marine Mechanical Corporation, net of cash acquired - (70,950 ) Net
(increase) decrease in available-for-sale securities (124,729 )
5,551 Proceeds from asset disposals 12,013 2,531 Other, net �
(2,048 ) � � (954 ) NET CASH USED IN INVESTING ACTIVITIES �
(240,396 ) � � (159,999 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt (4,525 ) (255,501 ) Issuance of common
stock 7,467 9,576 Payment of debt issuance costs (1,564 ) - Excess
tax benefits from FAS 123(R) stock-based compensation 3,388 20,319
Other, net � - � � � 4 � NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES � 4,766 � � � (225,602 ) EFFECTS OF EXCHANGE RATE
CHANGES ON CASH � (683 ) � � 5,070 � NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (322,753 ) 462,838 CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD � 1,001,394 � � � 600,843 � CASH
AND CASH EQUIVALENTS AT END OF PERIOD $ 678,641 � � $ 1,063,681 � �
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during
the period for: Interest (net of amount capitalized) $ 4,006 $
17,790 Income taxes (net of refunds) $ 43,981 � � $ (237,470 )
McDermott (NYSE:MDR)
Historical Stock Chart
From Jun 2024 to Jul 2024
McDermott (NYSE:MDR)
Historical Stock Chart
From Jul 2023 to Jul 2024