-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GlJGwRxioSg/CysqxuBPwghLaezzeVdUF8MbcuTmbbo5jMEPpaYaL84FwahK7+a9 rcSJACZo+GAf72c0P1df/g== 0000708819-95-000001.txt : 19950414 0000708819-95-000001.hdr.sgml : 19950411 ACCESSION NUMBER: 0000708819-95-000001 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950403 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19950403 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCDERMOTT INTERNATIONAL INC CENTRAL INDEX KEY: 0000708819 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443] IRS NUMBER: 720593134 STATE OF INCORPORATION: R1 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08430 FILM NUMBER: 95526496 BUSINESS ADDRESS: STREET 1: 1010 COMMON ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045875400 MAIL ADDRESS: STREET 1: P O BOX 61961 CITY: NEW ORLEANS STATE: LA ZIP: 70161 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant of Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report: March 31, 1995 McDERMOTT INTERNATIONAL, INC. ------------------------------------------------------------ (Exact name of registrant as specified in its charter) REPUBLIC OF PANAMA 1-8430 No. 72-0593134 ------------------- ------------- ---------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File No.) Identification No.) 1450 Poydras Street, New Orleans, Louisiana 70112-6050 Post Office Box 61961, New Orleans, Louisiana 70161-1961 --------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (504) 587-5400 Item 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS The following pro forma financial information and exhibits are filed as a part of this report. (a) Offshore Pipelines, Inc.'s Annual Report on Form 10-K for the year ended July 31, 1994 filed with the Securities and Exchange Commission ("SEC") on October 13, 1994 and Quarterly Report on Form 10-Q for the quarter ended October 31, 1994 filed with the SEC on December 8, 1994 are incorporated herein by reference. (b) Pro forma financial information required pursuant to Article II of Regulation S-X: Item Page ----- ------ McDermott International, Inc. Pro Forma Consolidated Financial Statements (Unaudited) Pro Forma Consolidated Balance Sheet - December 31, 1994 4 Notes to the Pro Forma Consolidated Balance Sheet 6 Pro Forma Consolidated Statement of Income Before Cumulative Effect of Accounting Change - Fiscal Year Ended March 31, 1994 8 Pro Forma Consolidated Statement of Income Before Cumulative Effect of Accounting Change - Nine Months Ended December 31, 1994 10 Notes to the Pro Forma Consolidated Income Statements 12 On January 31, 1995, McDermott International, Inc. ("MII") contributed substantially all of its marine construction services business to J. Ray McDermott, S.A. ("JRM") and JRM acquired Offshore Pipelines, Inc. (the "Merger"), pursuant to an Agreement and Plan of Merger dated as of June 2, 1994, as amended (the "Merger Agreement"). MII received as consideration for its contribution to JRM: 3,200,000 shares of its Series A $2.25 Cumulative Convertible Preferred Stock (liquidation preference $160,000,000), $231,000,000 aggregate principal amount of JRM's 9% Senior Subordinated Notes due September 15, 2001, 24,668,297 shares of JRM's common stock and other consideration. As consideration for their approval and adoption of the Merger Agreement, stockholders of Offshore Pipelines, Inc. ("OPI") received 13,197,946 shares of JRM's common stock, 897,818 options to acquire the same number of shares of JRM's common stock and 458,632 shares of JRM's Series B Cumulative Convertible Exchangeable Preferred Stock (liquidation preference $11,465,800) in exchange for their shares of OPI common stock, options to acquire OPI common stock and OPI preferred stock outstanding at the date of the Merger. As a result on January 31, 1995 JRM had a total of 38,586,243 shares of Common Stock outstanding. The unaudited pro forma consolidated balance sheet as of December 31, 1994 combines the unaudited December 31, 1994 consolidated balance sheet of MII and the unaudited October 31, 1994 consolidated balance sheet of OPI and assumes that the contribution and Merger were completed as of December 31, 1994. OPI's assets and liabilities have been accounted for at estimated fair values in accordance with the purchase method of accounting. MII is presently in the process of obtaining appraisals of existing OPI property, plant and equipment and their remaining useful lives, and reviewing the fair value of OPI's other assets and liabilities. The adjustments to OPI's property, plant and equipment have been based on preliminary opinions of the appraiser's value of such assets. Further work is proceeding on such appraisals and, accordingly, the allocation of the purchase price is subject to revision as a result of the final determination of such values. The audited pro forma consolidated statements of income combine the audited results of MII for the year ended March 31, 1994 with the unaudited results of operations of OPI for the twelve months ended April 30, 1994; and the unaudited results of operations of MII for the nine months ended December 31, 1994 with the unaudited results of OPI for the nine months ended October 31, 1994. These pro forma statements of MII give effect to the contribution by MII of substantially all of its marine construction services business to JRM, and the acquisition of OPI and assumes such transactions were completed effective April 1, 1993. The acquisition of OPI will be accounted for under the purchase method of accounting and goodwill will be amortized over a period of 10 years. The pro forma information is not necessarily indicative of the actual financial position of MII at any date or the results which would have actually occurred had the transactions occurred on such dates or which may occur in the future. The pro forma consolidated financial statements should be read in conjunction with MII's and OPI's historical consolidated financial statements and notes thereto contained in the respective Annual Report (Form 10-K) for the fiscal year ended March 31, 1994 and July 31, 1994 and the respective Quarterly Report (Form 10-Q) for the quarter ended December 31, 1994 and October 31, 1994. The pro forma adjustments do not reflect estimates of cost savings that may be realized from the Merger. MII intends to dispose of surplus marine vessels and support equipment, close duplicative support facilities and fabrication yards, and to consolidate corporate functions.
McDERMOTT INTERNATIONAL, INC. PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) MII OPI December 31, October 31, Pro Forma 1994 1994 Adjustments Combined ------------ ----------- ----------- ------------ (In thousands) ASSETS Current Assets: Cash and cash equivalents $ 99,873 $ 12,439 $ (16,032) (1,2,8) $ 96,280 Accounts and notes receivable 461,260 82,787 533 (2) 544,580 Contracts in progress 316,360 78,028 (8,271) (2) 386,117 Other current assets 439,711 54,995 (38,363) (2,3,9) 456,343 - ------------------------------------------------------------------------------------------------ Total Current Assets 1,317,204 228,249 (62,133) 1,483,320 - ------------------------------------------------------------------------------------------------- Property, Plant and Equipment, at Cost 2,175,564 201,195 (8,499) (2,3) 2,368,260 Less accumulated depreciation 1,411,660 48,710 (48,710) (2,3) 1,411,660 - ------------------------------------------------------------------------------------------------ Net Property, Plant and Equipment 763,904 152,485 40,211 956,600 - ------------------------------------------------------------------------------------------------ Investments: Government obligations 391,841 - - 391,841 Other investments 181,081 - - 181,081 - ------------------------------------------------------------------------------------------------ Total Investments 572,922 - - 572,922 - ------------------------------------------------------------------------------------------------ Insurance Recoverable 777,327 - - 777,327 - ------------------------------------------------------------------------------------------------ Intangibles and Other Assets 660,688 43,108 225,880 (2,3,5,6,9) 929,676 - ------------------------------------------------------------------------------------------------ TOTAL $4,092,045 $ 423,842 $ 203,958 $ 4,719,845 =================================================================================================
MII OPI December 31, October 31, Pro Forma 1994 1994 Adjustments Combined ------------ ----------- ----------- ---------- (In thousands) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes and accounts payable and current maturities of long-term debt $ 623,137 $ 52,194 $ (13,538) (2) $ 661,793 Advance billings on contracts 122,993 15,652 (758) (2) 137,887 U.S. and foreign income taxes 47,998 3,433 23,074 (2,9) 74,505 Other current liabilities 495,354 71,838 12,664 (2,3,4) 579,856 - ------------------------------------------------------------------------------------------------- Total Current Liabilities 1,289,482 143,117 21,442 1,454,041 - ------------------------------------------------------------------------------------------------- Long-Term Debt 487,405 85,832 10,136 (3) 583,373 - ------------------------------------------------------------------------------------------------- Accumulated Postretirement Benefit Obligation 390,458 - - 390,458 - ------------------------------------------------------------------------------------------------- Environmental and Products Liabilities 907,884 - - 907,884 - -------------------------------------------------------------------------------------------------- Other Liabilities 298,084 30,079 8,160 (3,4,9) 336,323 - -------------------------------------------------------------------------------------------------- Minority Interest 193,444 - 143,611 (8) 337,055 - -------------------------------------------------------------------------------------------------- Stockholders' Equity: Preferred stock 2,875 14 (14) (7) 2,875 Common Stock 53,759 113 (113) (7) 53,759 Other Stockholders' Equity 468,654 164,687 20,736 (7,8) 654,077 - -------------------------------------------------------------------------------------------------- Total Stockholders' Equity 525,288 164,814 20,609 710,711 - -------------------------------------------------------------------------------------------------- TOTAL $4,092,045 $ 423,842 $ 203,958 $ 4,719,845 =================================================================================================
(page 6)
Notes to Pro Forma Combined Balance Sheet The following is a summary of the adjustments required to reflect the acquisition of OPI and estimated purchase price allocation. Adjustments Debit/(Credit) Acquisition of OPI 1. Adjustment to reflect extraordinary dividend and redemption of preferred stock purchase rights. . . . . . . . . . . . . . $ (5,749) 2. Adjustments to reflect the change in OPI's accounting for its investment in certain joint ventures from proportionate consolidation method to the equity method: Cash and cash equivalents. . . . . . . . . . . $ (1,283) Accounts and notes receivable. . . . . . . . . 533 Contracts in progress. . . . . . . . . . . . . (8,271) Other current assets . . . . . . . . . . . . . (685) Property, plant and equipment. . . . . . . . . (5,389) Accumulated depreciation . . . . . . . . . . . 336 Intangibles and other assets . . . . . . . . . (2,512) Notes and accounts payable and current maturities on long-term debt 13,538 Advance billings on contracts. . . . . . . . . 758 U. S. and foreign income taxes . . . . . . . . 552 Other current liabilities. . . . . . . . . . . 2,423 - ------- 3. Adjustments to reflect other changes in accounting policies and purchase accounting of OPI's assets and liabilities: Other current assets . . . . . . . . . . . . . $ (2,899) Property, plant and equipment. . . . . . . . . (3,110) Accumulated depreciation . . . . . . . . . . . 48,374 Intangibles and other assets . . . . . . . . . 1,584 Other current liabilities. . . . . . . . . . . 4,184 Long-term debt . . . . . . . . . . . . . . . . (10,136) Other liabilities. . . . . . . . . . . . . . . (2,976) 35,021 -------- 4. Accrual of estimated additional direct merger costs (covenants-not-to-compete, financial advisor, legal, accounting, appraisal and other fees): Other current liabilities. . . . . . . . . . . $ (19,271) Other liabilities. . . . . . . . . . . . . . . (5,198) (24,469) --------- 5. Intangibles and other assets (covenants-not-to-compete). 16,407 6. Intangibles and other assets (excess of cost over net assets acquired) 152,010 7. Elimination of OPI stockholders' equity: Preferred B, par value . . . . . . . . . . . . . $ 14 Common stock, par value. . . . . . . . . . . . . 113 Other stockholders' equity . . . . . . . . . . . 164,687 164,814 -------- --------- $ 338,034
(page 7)
Notes to Pro Forma Combined Balance Sheet (continued) 8. Payments for covenants not to compete at effective time of the acquisition of OPI, issuance of JRM securities to minority owners and adjustment of minority interest and other stockholders' equity to reflect respective ownership percentages in JRM: Cash . . . . . . . . . . . . . . . . . . . . . . $ (9,000) Minority interest. . . . . . . . . . . . . . . . (143,611) Other stockholders' equity . . . . . . . . . . . (185,423) $(338,034) --------- ========= 9. Adjustments to tax assets and liabilities to reflect the sale of marine construction services' assets from McDermott Incorporated to MII: Other current assets . . . . . . . . . . . . . . $ (34,779) Intangibles and other assets . . . . . . . . . . 58,391 U.S. and foreign income taxes. . . . . . . . . . (23,626) Other liabilities. . . . . . . . . . . . . . . . 14 $ - --------- ---------
(PAGE 8)
McDERMOTT INTERNATIONAL, INC. PRO FORMA CONSOLIDATED STATEMENT OF INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (UNAUDITED) MII OPI Pro Forma Year ended Year ended Combined March 31, 1994 April 30, 1994 Adjustments (9) Year Ended -------------- -------------- ----------- ---------- (In thousands) Revenues $ 3,059,912 $ 383,645 $ (11,522) (1) $3,432,035 - ----------------------------------------------------------------------------------------------- Costs and Expenses: Cost of operations 2,657,712 300,759 (19,076) (1) 2,944,855 4,939 (2) 521 (4) Depreciation and amortization 99,393 17,189 (4,767) (2) 134,822 15,201 (3) 4,526 (4) 3,280 (5) Selling, general and administrative expenses 262,873 31,273 (536) (1) 293,147 (463) (4) - ----------------------------------------------------------------------------------------------- 3,019,978 349,221 3,625 3,372,824 - ----------------------------------------------------------------------------------------------- 39,934 34,424 (15,147) 59,211 Equity in Income of Investees 119,860 1,475 (8,754) (1) 112,581 - ----------------------------------------------------------------------------------------------- Operating Income 159,794 35,899 (23,901) 171,792 - ----------------------------------------------------------------------------------------------- Other Income (Expense): Interest income 38,751 1,587 (17) (1) 40,321 Interest expense (63,975) (10,567) (4) (1) (73,617) (379) (5) 1,308 (6) Minority interest (15,251) - (3,105) (7) (48,367) (30,011) (8) Other-net (4,365) 169 10 (1) (5,172) (986) (4) - ----------------------------------------------------------------------------------------------- (44,840) (8,811) (33,184) (86,835) - ------------------------------------------------------------------------------------------------ Income before Provision for Income Taxes and Cumulative Effect of Accounting Change 114,954 27,088 (57,085) 84,957 Provision for Income Taxes 24,998 8,486 (675) (1) 31,257 (60) (2) (1,950) (4) 458 (6) - ----------------------------------------------------------------------------------------------- Income before Cumulative Effect of Accounting Change 89,956 18,602 (54,858) 53,700 - ----------------------------------------------------------------------------------------------- Preferred Stock Dividends 6,084 3,105 (3,105) (7) 6,084 - ----------------------------------------------------------------------------------------------- Income before Cumulative Effect of Accounting Change Applicable to Common Stock $ 83,872 $ 15,497 $ (51,753) $ 47,616 ===============================================================================================
(PAGE 9)
CONTINUED MII Pro Forma MII Combined Year Ended Year Ended March 31, 1994 March 31, 1994 -------------- -------------- EARNINGS PER COMMON AND COMMMON EQUIVALENT SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (AFTER PREFERRED STOCK DIVIDENDS): Primary and Fully Diluted $ 1.57 $ 0.89 - ------------------------------------------------------------------------------------------ Weighted average number of common and common equivalent shares 53,467,933 53,467,933 ==========================================================================================
(PAGE 10)
McDERMOTT INTERNATIONAL, INC. PRO FORMA CONSOLIDATED STATEMENT OF INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (UNAUDITED) MII OPI Pro Forma Nine Months Nine Months Combined ended ended Nine Months 12/31/94 10/31/94 Adjustments (9) Ended ---------- ------------ ----------- ----------- (In thousands) Revenues $ 2,199,398 $ 328,332 $ (33,138) (1) $ 2,494,592 - ---------------------------------------------------------------------------------------------- Costs and Expenses: Cost of operations 1,858,549 264,179 (35,497) (1) 2,092,301 2,728 (2) 2,342 (4) Depreciation and amortization 85,258 13,469 (3,029) (2) 112,954 11,401 (3) 3,395 (4) 2,460 (5) Selling, general and administrative expenses 201,072 26,003 (953) (1) 225,887 (235) (4) - ---------------------------------------------------------------------------------------------- 2,144,879 303,651 (17,388) 2,431,142 - ---------------------------------------------------------------------------------------------- 54,519 24,681 (15,750) 63,450 Equity in Income of Investees 34,649 5,616 (4,692) (1) 35,573 - ---------------------------------------------------------------------------------------------- Operating Income 89,168 30,297 (20,442) 99,023 - ---------------------------------------------------------------------------------------------- Other Income (Expense): Interest income 39,799 851 (20) (1) 40,630 Interest expense (43,559) (7,981) 315 (1) (50,434) (190) (5) 981 (6) Minority interest (9,538) - (2,328) (7) (25,701) (13,835) (8) Other-net (25,382) 2,828 79 (1) (23,369) (894) (4) - ----------------------------------------------------------------------------------------------- (38,680) (4,302) (15,892) (58,874) - ----------------------------------------------------------------------------------------------- Income before Provision for Income Taxes and Cumulative Effect of Accounting Change 50,488 25,995 (36,334) 40,149 Provision for Income Taxes 20,818 7,346 (1,006) (1) 25,367 105 (2) (2,239) (4) 343 (6) - ----------------------------------------------------------------------------------------------- Income before Cumulative Effect of Accounting Change 29,670 18,649 (33,537) 14,782 Preferred Stock Dividends 6,199 2,328 (2,328) (7) 6,199 - ----------------------------------------------------------------------------------------------- Income before Cumulative Effect of Accounting Change Applicable to Common Stock $ 23,471 $ 16,321 $ (31,209) $ 8,583 ================================================================================================
(PAGE 11)
CONTINUED MII Pro Forma MII Combined Nine Months Ended Nine Months Ended December 31, 1994 December 31, 1994 ----------------- -------------------- EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (AFTER PREFERRED STOCK DIVIDENDS): Primary and Fully Diluted $ 0.43 $ 0.16 - --------------------------------------------------------------------------------------- Weighted average number of common and common equivalent shares 53,722,217 53,722,217 =======================================================================================
(PAGE 12) McDERMOTT INTERNATIONAL, INC. NOTES TO THE PRO FORMA CONSOLIDATED INCOME STATEMENTS (UNAUDITED) Income Statement: The pro forma consolidated statements of income give effect to the following adjustments: 1. Adjustment to conform OPI's proportionate consolidation method to MII's accounting policy. 2. Adjustments to conform OPI's drydock and depreciation method to MII's accounting policies. Adjustments to reflect the acquisition of OPI: 3. To amortize over ten years the costs in excess of net assets acquired. 4. To record additional depreciation on write-up of OPI's property, plant and equipment based on the estimated remaining life thereof, which is assumed to be ten years, and to reflect the impact of other purchase accounting adjustments. 5. To amortize covenants-not-to-compete over a period of five years per the terms of the agreements. 6. To amortize premium recognized on write-up of OPI debt. 7. To reclassify to Minority Interest Expense dividends paid (to third parties) on OPI Series B Stock. 8. To recognize Minority Interest Expense on OPI and MII's earnings available to minority owners. 9. The pro forma consolidated statements of income do not include pro forma adjustments reflecting additional income tax provision due to the movement of a portion of the long-term investment portfolio to McDermott Incorporated in consideration for the marine construction services business purchased by MII in connection with the merger of OPI into JRM. (page 13) SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. McDERMOTT INTERNATIONAL (REGISTRANT) Date:03/31/95 By: s/ Daniel R. Gaubert -------- ------------------------ (SIGNATURE) Daniel R. Gaubert Vice President, Finance, on behalf of the Registrant -----END PRIVACY-ENHANCED MESSAGE-----