McDermott International, Inc. (NYSE: MDR) (“McDermott” or the
“Company”) today reported net income from continuing operations of
$45.5 million, or $0.19 per diluted share, for the 2010 fourth
quarter. The results of the 2010 fourth quarter compare to net
income from continuing operations of $73.4 million, or $0.32 per
diluted share, in the corresponding period of 2009. Both periods
exclude the results of The Babcock & Wilcox Company
(“B&W”), which was spun-off to McDermott shareholders on July
30, 2010, as well as the operations of McDermott’s charter fleet
business, which is classified as held for sale. Weighted average
common shares outstanding on a fully diluted basis were
approximately 237.0 million and 234.5 million in the quarters ended
December 31, 2010 and December 31, 2009, respectively.
McDermott’s revenues for the 2010 fourth quarter were $539.6
million, compared to $756.8 million in the corresponding period of
2009. The year-over-year decrease was primarily due to lower
revenues of $126.6 million in the Asia Pacific segment and $96.2
million in the Middle East segment. The lower revenues in the Asia
Pacific segment were due to significant customer-approved change
orders that were recorded in the 2010 fourth quarter which, as a
result of the added scope, reduced the percentage complete of two
major projects and lowered the revenue and income recognized in the
period. However, the overriding impact of the change orders is that
the contract values have increased and the combined expected profit
at completion improved for these projects during the quarter.
Within the Middle East segment, the reduced revenues were primarily
due to fewer barge days on our major construction vessels as a
result of the substantial completion of the Qatar pipeline
projects.
The Company’s operating income was $59.3 million in the 2010
fourth quarter, compared to $90.9 million in the 2009 fourth
quarter. The year-over-year decrease was primarily due to lower
revenues in the Asia Pacific segment and the associated profit
impact of the percentage complete reduction discussed above, as
well as less activity for the Company’s major construction
vessels.
“I am very pleased with McDermott’s operating and financial
results for 2010. We had exceptional bookings of $4.2 billion
during the year, including almost $2 billion in the fourth quarter,
which provides a strong ending backlog and a solid foundation for
the future,” said Stephen M. Johnson, President and Chief Executive
Officer of McDermott. “During the fourth quarter, our productivity
was largely as expected, however the percentage complete on a
couple of projects declined as a result of significant scope
growth, resulting in lower revenues and profits being recognized
for the period as compared to our prior expectations. Nonetheless,
the additional work is a positive development, and the overall
contract size, as well as the current embedded profit, has
increased on these projects.”
The Company’s other expense for the fourth quarter of 2010 was
$5.4 million, compared to $5.5 million in the fourth quarter of
2009, which consists primarily of interest income, interest expense
and foreign currency translation expenses.
At December 31, 2010, the Company’s backlog was $5.0 billion,
compared to $3.6 billion and $3.3 billion at September 30, 2010 and
December 31, 2009, respectively.
For the year ended December 31, 2010, McDermott reported from
continuing operations revenues of $2.4 billion, operating income of
$314.9 million and net income of $236.6 million, or $1.00 per fully
diluted share. Included in the full year results are approximately
$46 million of impairment and facility closure costs.
Balance Sheet Summary
As of December 31, 2010, McDermott reported total assets of $2.6
billion. Included in this amount was approximately $886.5 million
of cash and investments. Net working capital, calculated as current
assets less current liabilities, was $420.6 million. Additionally,
total equity was approximately $1.5 billion, or 58% of total
assets, with total debt of $55.3 million.
Discontinued Operations
For the fourth quarter of 2010, McDermott recorded a net loss
from discontinued operations of $0.6 million, compared to net
income from discontinued operations of $25.3 million in the
corresponding period of 2009. Included in discontinued operations
are the results of B&W, which was spun-off to McDermott’s
shareholders on July 30, 2010, the charter fleet business, which is
held for sale, as well as transaction-related costs.
OTHER INFORMATION
About the Company
McDermott is a leading engineering, procurement, construction
and installation (“EPCI”) company focused on executing complex
offshore oil and gas projects worldwide. Providing fully integrated
EPCI services for upstream field developments, the Company delivers
fixed and floating production facilities, pipelines and subsea
systems from concept to commissioning. McDermott’s customers
include national and major energy companies. Operating in
approximately 20 countries across the Atlantic, Middle East and
Asia Pacific, the Company’s integrated resources include more than
15,000 employees and a diversified fleet of marine vessels,
fabrication facilities and engineering offices. McDermott has
served the energy industry since 1923. To learn more, please visit
McDermott’s website on the Internet at www.mcdermott.com.
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 McDermott’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, and the expected profit at completion of
projects in our Asia Pacific segment. 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 or credit markets, our inability to
successfully execute on contracts in backlog and changes in the
scope or timing of contracts. 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 annual report on Form 10-K for
the year ended December 31, 2010. This news 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.
Conference Call to Discuss Fourth
Quarter 2010 Earnings Release
Date: Wednesday, March 2, 2011, at 10:00 a.m. ET (9:00
a.m. CT)
Live Webcast: Investor Relations section of Web site at
www.mcdermott.com
Replay: Available for 2 weeks in the investor relations
section of www.mcdermott.com
McDERMOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF
INCOME
Three Months Ended Year Ended December
31, December 31,
2010
2009
2010
2009
(As adjusted) (As adjusted) (Unaudited) (In
thousands) Revenues $ 539,622
$ 756,798 $ 2,403,743 $
3,281,790 Costs and Expenses: Cost of operations
421,220 614,209 1,842,261 2,781,735 (Gain) loss on asset disposals
and impairments – net 190 265 22,220 (914 ) Selling, general and
administrative expenses 56,852
50,709 216,763
218,063 Total costs and expenses
478,262 665,183 2,081,244
2,998,884 Equity in Loss of
Unconsolidated Affiliates (2,087 )
(760 ) (7,594 ) (3,557 )
Operating Income 59,273
90,855 314,905 279,349
Other Income (Expense): Interest income (expense) –
net 443 (1,263 ) (1,089 ) 6,021 Other income (expense) – net
(5,834 ) (4,248 ) (10,022
) (15,257 ) Total Other Income (Expense)
(5,391 ) (5,511 ) (11,111
) (9,236 ) Income from continuing operations
before provision for income taxes and noncontrolling interest
53,882 85,344 303,794 270,113 Provision for Income Taxes
5,953 16,455
41,182 60,561
Income from continuing operations before noncontrolling interest
47,929 68,889
262,612 209,552 Income
(loss) from discontinued operations, net of tax (592 ) 25,343
(34,900 ) 180,898 Net Income 47,337
94,232 227,712
390,450 Less: Net income attributable
to noncontrolling interests (2,449 )
4,470 (26,046 ) (3,394 )
Net Income Attributable to McDermott International, Inc.
$ 44,888 $ 98,702 $
201,666 $ 387,056
McDERMOTT INTERNATIONAL, INC.
EARNINGS PER SHARE COMPUTATION
Three Months Ended Year Ended December
31, December 31,
2010
2009
2010
2009
(Unaudited) (In thousands, except share and per share
amounts) Income from continuing operations less
noncontrolling interest $ 45,480 $ 73,359 $ 236,566 $ 206,158
Income (loss) from discontinued operations, net of tax
(592 ) 25,343 (34,900 )
180,898 Net Income Attributable to McDermott, Inc.
$ 44,888 $ 98,702 $ 201,666
$ 387,056 Weighted average common shares
(basic) 233,351,424
230,306,488 232,173,362
229,471,020 Effect of dilutive securities: Stock options,
restricted stock and restricted stock units
3,688,702 4,194,198 3,448,667
4,155,856 Adjusted weighted average common
shares and assumed exercises of stock options and vesting of stock
awards 237,040,126
234,500,686 235,622,029
233,626,876
Basic earnings per share:
Income from continuing operations less noncontrolling
interest 0.20 0.32 1.02 0.90 Income (loss) from discontinued
operations, net of tax -
0.11 (0.15 ) 0.79 Net Income
0.19 0.43 0.87
1.69
Diluted earnings per share:
Income from continuing operations less noncontrolling
interest 0.19 0.32 1.00 0.88 Income (loss) from discontinued
operations, net of tax -
0.11 (0.15 ) 0.78 Net Income
0.19 0.43 0.85
1.66
SUPPLEMENTARY DATA (1)
Three Months Ended Year Ended December
31, December 31, 2010
2009 2010 2009 (Unaudited)
(In thousands) Pension and post retirement expense $ 5,532
$ 14,975 $ 21,814 $ 27,352 Depreciation &
amortization expense $ 19,035 $ 20,153 $ 76,452 79,867 Capital
expenditures $ 59,321 $ 47,219 $ 186,862 $ 186,518 Backlog $
5,038,988 $ 3,260,834 $ 5,038,988 $ 3,260,834
(1) Above metrics for all periods
represents McDermott’s continuing operations only and thus excludes
B&W and the charter fleet business.
McDERMOTT INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, 2010
2009 (In thousands) Current Assets: Cash and
cash equivalents $ 403,463 $ 899,270 Restricted cash and cash
equivalents 197,861 69,920 Investments 209,463 12 Accounts
receivable – trade, net 323,497 642,995 Accounts and notes
receivable – unconsolidated affiliates 2,960 5,806 Accounts
receivable – other 25,487 68,035 Contracts in progress 65,853
400,831 Inventories 1,675 101,494 Deferred income taxes 10,323
100,828 Assets held for sale 10,161
-
Other current assets 34,895
68,730 Total Current Assets
1,285,638 2,357,921
Property, Plant and Equipment 1,720,040 2,608,740 Less: accumulated
depreciation 804,471
1,271,135 Net Property, Plant and Equipment
915,569
1,337,605 Assets Held for Sale
77,150
-
Investments 75,742
228,706 Goodwill 41,202
306,497 Deferred Income Taxes
-
275,567 Investments in
Unconsolidated Affiliates 45,016
86,932 Other Assets
158,371 255,882 TOTAL
$ 2,598,688 $ 4,849,110
McDERMOTT INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(continued)
LIABILITIES AND EQUITY
December 31, 2010 2009 (In
thousands, except share amounts) Current Liabilities:
Notes payable and current maturities of long-term debt $ 8,547 $
16,270 Accounts payable 252,974 471,858 Accrued employee benefits
80,585 217,178 Accrued pension liability – current portion 8,797
173,271 Accrued liabilities – other 107,511 155,773 Accrued
contract cost 89,888 103,041 Advance billings on contracts 250,053
689,334 Deferred Income Tax 12,849 4,735 Income taxes 32,851 59,294
Accrued warranty 50 118,278 Liabilities associated with assets held
for sale 20,902
-
Total Current Liabilities
865,007 2,009,032 Long-Term Debt
46,748 56,714
Accumulated Postretirement Benefit Obligation
5,258 105,605
Self-Insurance 35,655
87,222 Pension Liability 52,831
610,166 Other Liabilities
80,922 147,271
Commitments and Contingencies Stockholders’ Equity:
Common stock, par value $1.00 per share,
authorized 400,000,000 shares; issued 240,791,473 and 236,919,404
shares at December 31, 2010 and December 31, 2009, respectively
240,791 236,919 Capital in excess of par value 1,357,316 1,300,998
Retained earnings 100,373 951,647 Treasury stock at cost, 6,906,262
and 6,168,705 shares at December 31, 2010 and December 31, 2009,
respectively (85,735 ) (69,370 ) Accumulated other comprehensive
loss (163,717 ) (612,997 )
Stockholders’ Equity – McDermott International, Inc. 1,449,028
1,807,197 Noncontrolling interest 63,239
25,903 Total Equity
1,512,267 1,833,100 TOTAL
$ 2,598,688 $ 4,849,110
McDERMOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Year Ended December 31,
2010
2009
(In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net
Income $ 227,712 $ 390,450 (Income) loss from discontinued
operations, net of tax 34,900
(180,898 ) Income from continuing operations
262,612
209,552 Non-cash items included in net income: Depreciation
and amortization 76,452 79,867 Loss of investees 7,594 3,557
(Gains) losses on asset disposals and impairments – net 22,220 (914
) Provision for deferred taxes 1,830 5,252 Amortization of pension
and postretirement costs 21,814 27,352 Tax expense (benefits) from
stock-based compensation (1,393 ) 912 Other 9,344 44,226 Changes in
assets and liabilities, net of effects from acquisitions: Accounts
receivable (6,457 ) 25,871 Net contracts in progress and advance
billings on contracts 182,472 (295,110 ) Accounts payable (38,536 )
(8,054 ) Income taxes 84,269 5,882 Accrued and other current
liabilities 40,110 (57,311 ) Pension liability, and accrued
postretirement and employee benefits (106,338 ) 41,101 Other
(171,666 ) 103,450
Net cash provided by (used in) operating activities – continuing
operations 384,327
185,633 CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in restricted cash and cash equivalents
(142,853 ) (10,718 ) Purchases of property, plant and equipment
(186,862 ) (186,518 ) Net (increase) decrease of short and
long-term investments (127,526 ) 177,137 Proceeds from asset
disposals 4,824 2,761 Investments in unconsolidated affiliate
(32,550 ) (13,484 ) Acquisition of businesses, net of cash acquired
(1,954 ) (28,293 ) Other
-
(134 ) Net cash used in
investing activities – continuing operations
(486,921 ) (59,249 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Payment of debt (8,540 ) (4,106 ) Debt
issuance costs (17,881 ) (105 ) Issuance of common stock 1,040
1,042 Tax (expense) benefits from stock-based compensation 1,393
(912 ) Cash contribution from The Babcock & Wilcox Company
100,000
-
Other 80
(127 ) Net cash provided by (used in) financing activities –
continuing operations 76,092
(4,208 ) Effects of exchange rate changes on
cash 498
1,096 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(26,004 ) 123,372 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
429,467
306,195 CASH AND CASH EQUIVALENTS AT END OF PERIOD –
CONTINUING OPERATIONS $ 403,463
$ 429,467 CASH FLOWS FROM DISCONTINUED
OPERATIONS: Net cash provided by (used in) operating activities $
(44,153 ) $ 232,441 Net cash used in investing activities (65,084 )
(51,598 ) Net cash provided by (used in) financing activities
(109,600 ) (1,728 ) Effects of exchange rate changes on cash (578 )
10,234 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(219,415 ) 189,349 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
469,803 280,454 Transfer of Cash Attributable to B&W
250,388
-
CASH AND CASH EQUIVALENTS AT END OF PERIOD $
-
$ 469,803
McDermott (NYSE:MDR)
Historical Stock Chart
From Sep 2024 to Oct 2024
McDermott (NYSE:MDR)
Historical Stock Chart
From Oct 2023 to Oct 2024