-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NQWRVDJRqaKjIzYI6P2pvO7mXeKJU6NaUz9uwPSHrBciK1j0kJLOdwiPCN+LAn3/ dJ22P8CGlGrwlvaEh0+5Gw== 0000950134-03-006746.txt : 20030430 0000950134-03-006746.hdr.sgml : 20030430 20030430102056 ACCESSION NUMBER: 0000950134-03-006746 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030430 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: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08430 FILM NUMBER: 03671057 BUSINESS ADDRESS: STREET 1: 1450 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045875400 MAIL ADDRESS: STREET 1: 1450 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70161 10-K/A 1 d05173a1e10vkza.txt AMENDMENT NO. 1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10 - K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission File Number 1-8430 McDERMOTT INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) REPUBLIC OF PANAMA 72-0593134 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (I.R.S. Employer Identification No.) of Incorporation or Organization) 1450 POYDRAS STREET NEW ORLEANS, LOUISIANA 70112-6050 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (504) 587-5400 -------------- Securities Registered Pursuant to Section 12(b) of the Act:
Name of each Exchange Title of each class on which registered ------------------- --------------------- Common Stock, $1.00 par value New York Stock Exchange Rights to Purchase Preferred Stock New York Stock Exchange (Currently Traded with Common Stock)
Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). YES [X] NO [ ] The aggregate market value of the registrant's common stock held by nonaffiliates of the registrant was $258,410,985 as of January 31, 2003. The number of shares of the registrant's common stock outstanding at January 31, 2003 was 64,831,612. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 in connection with the Company's 2002 Annual Meeting of Stockholders are incorporated by reference into Part III hereof. McDERMOTT INTERNATIONAL, INC. INDEX TO FINANCIAL STATEMENT SCHEDULES AND EXHIBITS
Page Report of Independent Accountants 3 Financial Statement Schedule Covered by Reports of Independent Accountants: I Condensed Financial Information of Registrant 4 II Valuation and Qualifying Accounts 11 All schedules other than the above have been omitted because they are not required or the information is included in the Consolidated Financial Statements or Notes thereto. Signature of Registrant 12
2 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES To the Board of Directors and Stockholders of McDermott International, Inc. We have audited the consolidated financial statements of McDermott International, Inc. (the "Company") as of December 31, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, and have issued our report thereon dated March 24, 2003. Our report includes an emphasis of matter paragraph referring to Notes 1, 12, 20 and 21 of the consolidated financial statements regarding the Company's wholly-owned subsidiary, The Babcock & Wilcox Company, losses related to certain construction projects at the Company's wholly owned subsidiary, J. Ray McDermott, S.A. and the negative impacts of these matters, among others, on the Company's liquidity. Our audit also included Schedule I - Condensed Financial Information of Registrant and Schedule II - Valuation and Qualifying Accounts. In our opinion, these financial statement schedules presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PricewaterhouseCoopers LLP New Orleans, Louisiana March 24, 2003 3 Schedule I McDERMOTT INTERNATIONAL, INC. (PARENT COMPANY ONLY) CONDENSED BALANCE SHEETS ASSETS
December 31, 2002 2001 -------- -------- (In thousands) Current Assets: Cash and cash equivalents $ 163 $ 49 Accounts receivable - trade, net 37 59 Accounts receivable - other 162 149 Accounts receivable from subsidiaries 5,959 46,256 Accounts receivable from The Babcock & Wilcox Company 52 1,727 Other currents assets 2,065 1,483 -------- -------- Total Current Assets 8,438 49,723 -------- -------- Investments in Subsidiaries and Other Investees, at Equity 306,451 793,920 -------- -------- Notes Receivable from Subsidiaries 50 5,833 -------- -------- Property, Plant and Equipment, at Cost: Buildings 5 -- Machinery and equipment 61 61 -------- -------- 66 61 Less accumulated depreciation 61 61 -------- -------- Net Property, Plant and Equipment 5 -- -------- -------- Investments in Debt Securities 30,007 29,779 -------- -------- Accounts Receivable from The Babcock & Wilcox Company 2,297 565 -------- -------- Other Assets 20,595 21,195 -------- -------- TOTAL $367,843 $901,015 ======== ========
See accompanying notes to condensed financial information. 4 Continued LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
December 31, 2002 2001 ----------- ----------- (In thousands) Current Liabilities: Accounts payable $ 144 $ 119 Accounts payable to The Babcock & Wilcox Company 5,803 4,964 Accrued liabilities - other 9,790 32,671 Income taxes 1,659 1,659 ----------- ----------- Total Current Liabilities 17,396 39,413 ----------- ----------- Notes Payable to Subsidiaries 23,220 37,031 ----------- ----------- Accounts Payable to Subsidiaries 171,350 53,588 ----------- ----------- Accrued Cost of The Babcock & Wilcox Company Bankruptcy Settlement 61,533 -- ----------- ----------- Negative Investments in Subsidiaries, at Equity 510,722 -- ----------- ----------- Other Liabilities 379 873 ----------- ----------- Commitments and Contingencies Stockholders' Equity (Deficiency): Common stock 66,351 63,733 Capital in excess of par value 1,093,428 1,077,148 Accumulated deficit (1,027,318) (250,924) Treasury stock (62,792) (62,736) Accumulated other comprehensive loss (486,426) (57,111) ----------- ----------- Total Stockholders' Equity (Deficiency) (416,757) 770,110 ----------- ----------- TOTAL $ 367,843 $ 901,015 =========== ===========
5 Schedule I McDERMOTT INTERNATIONAL, INC. (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF LOSS
Year Ended December 31, 2002 2001 2000 --------- --------- --------- (In thousands) Costs and Expenses: Cost of operations $ 479 $ 4,710 $ 5,300 Selling, general and administrative expenses 16,877 18,264 2,245 --------- --------- --------- 17,356 22,974 7,545 --------- --------- --------- Loss on Asset Disposals-net -- -- (517) --------- --------- --------- Operating Loss before Equity in Income (Loss) of Investees (17,356) (22,974) (8,062) --------- --------- --------- Equity in Income (Loss) of Subsidiaries and Other Investees (706,095) 2,809 (10,025) --------- --------- --------- Operating Loss (723,451) (20,165) (18,087) --------- --------- --------- Other Income (Expense): Interest income 1,603 2,113 2,811 Interest expense (2,340) (4,740) (6,486) Estimated loss on The Babcock & Wilcox Company bankruptcy settlement (61,533) -- -- Other - net (483) (1,800) (5,442) --------- --------- --------- (62,753) (4,427) (9,117) --------- --------- --------- Loss from Continuing Operations before Benefit from Income Taxes and Extraordinary Item (786,204) (24,592) (27,204) Benefit from Income Taxes -- (170) (2,340) --------- --------- --------- Loss from Continuing Operations before Extraordinary Item (786,204) (24,422) (24,864) Income from Discontinued Operations 9,469 3,565 2,782 --------- --------- --------- Loss before Extraordinary Item (776,735) (20,857) (22,082) Extraordinary Item 341 835 -- --------- --------- --------- Net Loss $(776,394) $ (20,022) $ (22,082) ========= ========= =========
See accompanying notes to condensed financial information. 6 Schedule I MCDERMOTT INTERNATIONAL, INC (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
Year Ended December 31, 2002 2001 2000 ----------- ----------- ----------- (In thousands) Net Loss $ (776,394) $ (20,022) $ (22,082) ----------- ----------- ----------- Other Comprehensive Income (Loss): Equity in other comprehensive loss of subsidiaries and other investees (429,416) (2,272) (8,386) Minimum pension liability adjustments 17 19 18 Reclassification adjustment for gains (losses) included in net income 84 (6) 497 ----------- ----------- ----------- Other Comprehensive Loss (429,315) (2,259) (7,871) ----------- ----------- ----------- Comprehensive Loss (1,205,709) (22,281) (29,953) =========== =========== ===========
See accompanying notes to condensed financial information. 7 Schedule I McDERMOTT INTERNATIONAL, INC. (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF CASH FLOWS
Year Ended December 31, 2002 2001 2000 --------- --------- --------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $(776,394) $ (20,022) $ (22,082) --------- --------- --------- Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 3,612 1,931 1,450 Equity in income or loss of subsidiaries and other investees, less dividends 806,094 19,691 7,243 Estimated loss on The Babcock & Wilcox Company bankruptcy settlement 61,533 -- -- Other 10,650 7,984 9,029 Changes in assets and liabilities: Accounts and notes receivable 40,249 (30,102) 1,507 Accounts payable 104,815 4,011 (135,077) Income taxes -- -- (1) Other, net (14,325) 393 9,581 --------- --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 236,234 (16,114) (128,350) --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (5) -- -- Purchases of available-for-sale securities (166,402) (101,301) (10,473) Maturities of available-for-sale securities 107,085 7,000 10,325 Sales of available-for-sale securities 58,738 93,451 1,247 Execution of put/call agreement with McDermott Inc. (242,945) -- -- Decrease in loans to subsidiaries 5,783 11,326 122,710 --------- --------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (237,746) 10,476 123,809 ========= ========= =========
8 Continued
Year Ended December 31, 2002 2001 2000 --------- --------- --------- (In thousands) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock $ 1,394 $ 1,000 $ 47 Dividends paid -- -- (8,972) Purchase of McDermott International, Inc. stock -- -- (5) Other 232 4,641 4,526 --------- --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,626 5,641 (4,404) --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 114 3 (8,945) --------- --------- --------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 49 46 8,991 --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 163 $ 49 $ 46 ========= ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest, including intercompany interest (net of amount capitalized) $ 2,325 $ 5,275 $ 6,453 Income taxes, net of refunds $ -- $ 3 $ 361 ========= ========= ========= SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: Settlement of intercompany balances with a subsidiary $ -- $ -- $ 932,935 ========= ========= =========
See accompanying notes to condensed financial information. 9 Schedule I McDERMOTT INTERNATIONAL, INC. (PARENT COMPANY ONLY) NOTES TO CONDENSED FINANCIAL INFORMATION DECEMBER 31, 2002 NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements have been prepared to present the unconsolidated financial position, results of operations and cash flows of McDermott International, Inc. (Parent Company Only). Investments in subsidiaries and other investees are stated at cost plus equity in undistributed earnings from date of acquisition. These Parent Company Only financial statements should be read in conjunction with McDermott International, Inc.'s consolidated financial statements and independent accountants' reports thereon. NOTE 2 - CONTINGENCIES McDermott International, Inc. is contingently liable under standby letters of credit totaling $22,854,000 at December 31, 2002, all of which were issued in the normal course of business. In addition, at the time of The Babcock & Wilcox Company ("B&W") bankruptcy filing, McDermott International, Inc. was a maker or guarantor of outstanding letters of credit aggregating approximately $146,500,000 ($9,400,000 at December 31, 2002) which were issued in connection with the business operations of B&W and its subsidiaries. Although new letters of credit have been issued under B&W's Debtor in Possession ("DIP") Credit Facility to backstop or replace these preexisting letters of credit, McDermott International, Inc. has agreed to indemnify and reimburse B&W and its filing subsidiaries for any customer draw on any letter of credit issued under the DIP Credit Facility to backstop or replace any such preexisting letter of credit for which B&W has exposure and for the associated letter of credit fees paid under the facility. As of December 31, 2002, approximately $51,400,000 in letters of credit have been issued under the DIP Credit Facility to replace or backstop these preexisting letters of credit. McDermott International, Inc. has guaranteed a $2,500,000 line of credit, of which $5,000 is outstanding at December 31, 2002, to a certain unconsolidated joint venture. McDermott International, Inc. has agreed to indemnify our two surety companies for obligations of various of its subsidiaries, including B&W and several of its subsidiaries, under surety bonds issued to meet bid bond and performance bond requirements imposed by their customers. As of December 31, 2002, the aggregate outstanding amount of surety bonds that were guaranteed by McDermott International, Inc. and issued in connection with the business operations of its subsidiaries was approximately $121,000,000, of which $107,700,000 related to the business operations of B&W and its subsidiaries. Also, McDermott International, Inc. has guaranteed the performance of certain of its subsidiaries for construction projects in the ordinary course of business. These guarantees totaled $146,400,000 at December 31, 2002. NOTE 3 - DIVIDENDS RECEIVED McDermott International, Inc. received dividends from its consolidated subsidiaries of $100,000,000, $26,900,000 and $487,562,000 for the years ended December 31, 2002, 2001 and 2000, respectively. Also during the year ended December 31, 2000, McDermott International, Inc. received a capital contribution from one of its consolidated subsidiaries of $445,373,000. 10 Schedule II McDERMOTT INTERNATIONAL, INC. VALUATION AND QUALIFYING ACCOUNTS
Additions ------------------------- Balance at Charged to Charged to Balance at Beginning Costs and Other End Description of Period Expense (2) Accounts Deductions (3) of Period ----------- --------- ----------- ---------- -------------- ---------- (In thousands) Estimated Drydock Liability (1): Year Ended December 31, 2002 $ 36,171 $ 10,378 $ -- $ (14,675) $ 31,874 Year Ended December 31, 2001 $ 26,016 $ 14,178 $ -- $ (4,023) $ 36,171 Year Ended December 31, 2000 $ 21,753 $ 12,173 $ -- $ (7,910) $ 26,016 Valuation Allowance for Deferred Tax Assets (4): Year Ended December 31, 2002 $ (12,840) $ (43,866) $ (158,121) $ -- $ (214,827) Year Ended December 31, 2001 $ (15,478) $ 2,638 $ -- $ -- $ (12,840) Year Ended December 31, 2000 $ (34,794) $ 19,316 $ -- $ -- $ (15,478)
(1) Estimated drydock liability is reported within accrued liabilities-other and other liabilities on the balance sheet. (2) Net of reductions and other adjustments, all of which are charged to costs and expenses. (3) Reductions in the estimates to actual costs incurred. (4) Charged to Other Comprehensive Income (Minimum Pension Liability). 11 SIGNATURE OF THE REGISTRANT Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. McDERMOTT INTERNATONAL, INC. /s/ Francis S. Kalman ---------------------------- By: Francis S. Kalman Executive Vice President and Chief Financial Officer (Principal Financial Officer) April 28, 2003 12 EXHIBIT INDEX
Exhibit Number ------- 23.1 Consent of Independent Accountants 99 Supplementary Financial Information on Panamanian Securities Regulations
EX-23.1 3 d05173a1exv23w1.txt CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (No. 2-83692, No. 33-16680, No. 33-51892, No. 33-51894, No. 33-63832, No. No. 33-55341, No. 33-60499, No. 333-12531, No. 333-39087, and No. 333-39089) and S-3 (No. 333-69474) of McDermott International, Inc. of our report dated March 24, 2003 relating to the financial statement schedules of McDermott International, Inc., which appear in this Form 10-K/A. PricewaterhouseCoopers LLP New Orleans, Louisiana April 28, 2003 EX-99 4 d05173a1exv99.txt SUPPLEMENTARY FINANCIAL INFORMATION EXHIBIT 99 McDERMOTT INTERNATIONAL, INC. ADDITIONAL EXHIBITS SUPPLEMENTARY FINANCIAL INFORMATION PREPARED IN ACCORDANCE WITH AND SOLELY FOR THE PURPOSE OF COMPLYING WITH CERTAIN PANAMANIAN SECURITIES REGULATIONS
Year Ended December 31, 2002 ------------- (Unaudited) (In thousands) ARTICLE 29 RULE #9 - INVESTMENTS IN SUBSIDIARIES AND OTHER INVESTEES AT EQUITY Head Office (Parent Company) $ (204,271) Subsidiaries and Affiliates -- Eliminations/Other 215,815 ----------- McDERMOTT INTERNATIONAL, INC $ 11,544 =========== RULE #25C - PARENT-COMPANY ACCOUNTS AND NOTES PAYABLE TO SUBSIDIARIES Head Office (Parent Company) $ 171,350 Eliminations/Other (171,350) ----------- McDERMOTT INTERNATIONAL, INC $ -- =========== ARTICLE 30 (c)- OPERATING EXPENSES BY SEGMENT Power Generation Systems $ 49,706 Marine Construction Services 1,310,667 Government Operations 519,227 Eliminations (68) ----------- McDERMOTT INTERNATIONAL, INC $ 1,879,532 =========== RULE #40 - OPERATING REVENUES Head Office (Parent Company) $ -- Subsidiaries and Affiliates 1,748,681 Eliminations/Other -- ----------- McDERMOTT INTERNATIONAL, INC $ 1,748,681 ===========
Continued
Year Ended December 31, 2002 ------------- (Unaudited) (In thousands) ARTICLE 30 - Continued RULE #41 - OPERATING EXPENSES Head Office (Parent Company) $ 17,356 Subsidiaries and Affiliates 2,432,777 ----------- McDERMOTT INTERNATIONAL, INC $ 2,450,133 =========== RULE #43 - DIVIDENDS RECEIVED Head Office (Parent Company) from Subsidiaries and Affiliates $ 100,000 Subsidiaries and Affiliates from Other Corporations 34,848 Eliminations/Other (100,000) ----------- McDERMOTT INTERNATIONAL, INC $ 34,848 =========== RULE #44 - INTEREST INCOME Head Office (Parent Company): from Subsidiaries and Affiliates $ 787 from Other Corporations 816 Subsidiaries and Affiliates from Other Corporations 7,744 Eliminations (787) ----------- McDERMOTT INTERNATIONAL, INC $ 8,560 =========== RULE #46 - OTHER MISCELLANEOUS REVENUES Amortization of Tax Assets $ (3,216) Minority Interest Expense (2,459) Other Items - Net 1,235 ----------- McDERMOTT INTERNATIONAL, INC $ (4,440) =========== RULE #51 - INVESTMENTS IN UNCONSOLIDATED AFFILIATES AT EQUITY Balance at December 31, 2001 $ 20,995 Equity Income 27,692 Dividends Received (34,848) Other Changes (2,295) ----------- Balance at December 31, 2002 $ 11,544 ===========
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