-----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, SsELACic6SD8Vf447ZIDjbypFkPFJMwMc5xL2aqUhP22Dx6D5poJRPRAsG0cmDE8 7JQQd3ABL5pYCKUznpsF/g== 0000950134-96-000402.txt : 19960216 0000950134-96-000402.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950134-96-000402 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20599 FILM NUMBER: 96517842 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-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the transition period from ______________to______________ Commission File No. 1-8430 McDERMOTT INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) REPUBLIC OF PANAMA 72-0593134 - -------------------------------------------------------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 1450 Poydras Street, New Orleans, Louisiana 70112-6050 - -------------------------------------------------------------------------------- (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, Including Area Code (504) 587-5400 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 and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares of Common Stock, par value $1 per share, outstanding as of January 30, 1996 was 54,470,377. 2 M c D E R M O T T I N T E R N A T I O N A L, I N C. I N D E X - F O R M 1 0 - Q
PAGE ---- PART I - FINANCIAL INFORMATION - ------------------------------ Item 1 - Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheet December 31, 1995 and March 31, 1995 4 Condensed Consolidated Statement of Income Three Months Ended and Nine Months Ended December 31, 1995 and December 31, 1994 6 Condensed Consolidated Statement of Cash Flows Nine Months Ended December 31, 1995 and December 31, 1994 8 Notes to Condensed Consolidated Financial Statements 10 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 14 PART II - OTHER INFORMATION - --------------------------- Item 6 - Exhibits and Reports on Form 8-K 29 SIGNATURES 30 Exhibit 11 - Calculation of Earnings Per Common and Common Equivalent Share 31
2 3 PART I McDERMOTT INTERNATIONAL, INC. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements 3 4 McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEET DECEMBER 31, 1995 ASSETS
12/31/95 3/31/95 -------- ------- (Unaudited) (In thousands) Current Assets: Cash and cash equivalents $ 115,083 $ 85,909 Short-term investments 63,789 132,691 Accounts receivable - trade 505,701 475,861 Accounts receivable - unconsolidated affiliates 95,778 75,709 Accounts receivable - other 104,728 104,155 Insurance recoverable - current 114,600 111,188 Contracts in progress 424,337 279,016 Inventories 70,884 64,044 Deferred income taxes 57,347 76,863 Other current assets 33,285 45,131 - --------------------------------------------------------------------------------------------------------------- Total Current Assets 1,585,532 1,450,567 - --------------------------------------------------------------------------------------------------------------- Property, Plant and Equipment, at Cost: 2,181,086 2,237,018 Less accumulated depreciation and amortization 1,350,114 1,337,341 - --------------------------------------------------------------------------------------------------------------- Net Property, Plant and Equipment 830,972 899,677 - --------------------------------------------------------------------------------------------------------------- Investments: Government obligations 166,187 383,023 Other investments 138,861 199,379 - --------------------------------------------------------------------------------------------------------------- Total Investments 305,048 582,402 - --------------------------------------------------------------------------------------------------------------- Insurance Recoverable 642,469 750,219 - --------------------------------------------------------------------------------------------------------------- Excess of Cost Over Fair Value of Net Assets of Purchased Businesses Less Accumulated Amortization of $118,746,000 at December 31, 1995 and $96,405,000 at March 31, 1995 452,016 381,491 - --------------------------------------------------------------------------------------------------------------- Prepaid Pension Costs 295,053 277,814 - --------------------------------------------------------------------------------------------------------------- Other Assets 440,648 409,500 - --------------------------------------------------------------------------------------------------------------- TOTAL $ 4,551,738 $ 4,751,670 ===============================================================================================================
See accompanying notes to condensed consolidated financial statements. 4 5 LIABILITIES AND STOCKHOLDERS' EQUITY
12/31/95 3/31/95 -------- ------- (Unaudited) (In thousands) Current Liabilities: Notes payable and current maturities of long-term debt $ 411,954 $ 407,586 Accounts payable 272,188 286,219 Environmental and products liabilities - current 157,768 133,280 Accrued employee benefits 97,091 104,883 Accrued liabilities - other 318,046 326,688 Advance billings on contracts 182,239 180,018 U.S. and foreign income taxes 34,574 52,683 - --------------------------------------------------------------------------------------------------------------- Total Current Liabilities 1,473,860 1,491,357 - --------------------------------------------------------------------------------------------------------------- Long-Term Debt 585,276 579,101 - --------------------------------------------------------------------------------------------------------------- Accumulated Postretirement Benefit Obligation 399,293 393,744 - --------------------------------------------------------------------------------------------------------------- Environmental and Products Liabilities 766,997 913,939 - --------------------------------------------------------------------------------------------------------------- Other Liabilities 270,098 310,989 - --------------------------------------------------------------------------------------------------------------- Contingencies - --------------------------------------------------------------------------------------------------------------- Minority Interest: Subsidiary's preferred stocks 173,301 179,251 Other minority interest 171,277 172,710 - --------------------------------------------------------------------------------------------------------------- Total Minority Interest 344,578 351,961 - --------------------------------------------------------------------------------------------------------------- Stockholders' Equity: Preferred stock, authorized 25,000,000 shares; outstanding 2,875,000 Series C $2.875 cumulative convertible, par value $1.00 per share, (liquidation preference $143,750,000) 2,875 2,875 Common stock, par value $1.00 per share, authorized 150,000,000 shares; outstanding 54,370,377 at December 31, 1995 and 53,959,597 at March 31, 1995 54,370 53,960 Capital in excess of par value 942,862 936,134 Deficit (271,432) (249,061) Minimum pension liability (391) (391) Net unrealized gain (loss) on investments 2,195 (8,050) Currency translation adjustments (18,843) (24,888) - --------------------------------------------------------------------------------------------------------------- Total Stockholders' Equity 711,636 710,579 - --------------------------------------------------------------------------------------------------------------- TOTAL $ 4,551,738 $ 4,751,670 ===============================================================================================================
5 6 McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF INCOME DECEMBER 31, 1995
THREE NINE MONTHS ENDED MONTHS ENDED 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- (Unaudited) (In thousands) Revenues $ 766,538 $ 715,525 $ 2,389,768 $ 2,199,398 - ------------------------------------------------------------------------------------------------------------- Costs and Expenses: Cost of operations (excluding depreciation and amortization) 645,048 585,506 2,042,156 1,858,549 Depreciation and amortization 33,027 23,275 103,799 85,258 Selling, general and administrative expenses 65,831 66,877 200,850 201,072 - ------------------------------------------------------------------------------------------------------------- 743,906 675,658 2,346,805 2,144,879 - ------------------------------------------------------------------------------------------------------------- Operating Income before Equity in Income of Investees 22,632 39,867 42,963 54,519 Equity in Income of Investees 14,798 13,701 47,962 34,649 - ------------------------------------------------------------------------------------------------------------- Operating Income 37,430 53,568 90,925 89,168 - ------------------------------------------------------------------------------------------------------------- Other Income (Expense): Interest income 8,155 13,657 27,845 39,799 Interest expense (20,993) (16,619) (63,907) (43,559) Minority interest (6,656) (4,530) (15,802) (9,538) Other-net (3,833) (5,446) 1,731 (25,382) - ------------------------------------------------------------------------------------------------------------- (23,327) (12,938) (50,133) (38,680) - ------------------------------------------------------------------------------------------------------------- Income before Provision for Income Taxes and Cumulative Effect of Accounting Change 14,103 40,630 40,792 50,488 Provision for Income Taxes 7,497 10,816 16,300 20,818 - ------------------------------------------------------------------------------------------------------------- Income before Cumulative Effect of Accounting Change 6,606 29,814 24,492 29,670 Cumulative Effect of Accounting Change - - - (1,765) - ------------------------------------------------------------------------------------------------------------- Net Income $ 6,606 $ 29,814 $ 24,492 $ 27,905 =============================================================================================================
6 7 CONTINUED
THREE NINE MONTHS ENDED MONTHS ENDED 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- (Unaudited) (In thousands, except shares and per share amounts) NET INCOME APPLICABLE TO COMMON STOCK (AFTER PREFERRED STOCK DIVIDENDS) $ 4,540 $ 27,748 $ 18,293 $ 21,706 - ------------------------------------------------------------------------------------------------------------- EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (PRIMARY AND FULLY DILUTED): Income before cumulative effect of accounting change $ 0.08 $ 0.51 $ 0.34 $ 0.43 Accounting change - - - (0.03) - ------------------------------------------------------------------------------------------------------------- Net income $ 0.08 $ 0.51 $ 0.34 $ 0.40 ============================================================================================================= Weighted average number of common and common equivalent shares 54,328,182 53,974,434 54,366,976 53,722,217 CASH DIVIDENDS: Per common share $ 0.25 $ 0.25 $ 0.75 $ 0.75 Per preferred share $ 0.72 $ 0.72 $ 2.16 $ 2.16 =============================================================================================================
See accompanying notes to condensed consolidated financial statements. 7 8 McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS DECEMBER 31, 1995 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
NINE MONTHS ENDED 12/31/95 12/31/94 -------- -------- (Unaudited) (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 24,492 $ 27,905 - -------------------------------------------------------------------------------------------------------------- Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 103,799 85,258 Gain on sale and disposal of assets (5,133) (1,464) Equity in income of investees, less dividends 6,053 26,444 Provision for deferred taxes 7,199 42,200 Other 4,732 10,546 Changes in assets and liabilities: Accounts receivable (100,704) 18,567 Net contracts in progress and advance billings (138,845) (140,861) Accounts payable (31,658) (28,063) Accrued liabilities (24,273) (45,286) Income taxes (12,702) (24,077) Other, net (43,728) (18,157) Proceeds from insurance for products liabilities claims 84,127 80,550 Payments of products liabilities claims (114,396) (94,213) - ------------------------------------------------------------------------------------------------------------- NET CASH USED IN OPERATING ACTIVITIES (241,037) (60,651) - ------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of businesses (19,610) - Proceeds from the sale and disposal of assets 41,495 10,398 Purchases of property, plant and equipment (52,503) (68,317) Investment in asset held for lease (26,518) - Purchases of short and long-term investments (308,121) (356,399) Sales of short and long-term investments 667,792 351,133 Other 6,148 (9,996) - ------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 308,683 (73,181) - -------------------------------------------------------------------------------------------------------------
8 9 CONTINUED INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
NINE MONTHS ENDED 12/31/95 12/31/94 -------- -------- (Unaudited) (In thousands) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of long-term debt $ (173,272) $ (18,256) Issuance of long-term debt 32,291 - Increase in short-term borrowing 154,323 181,522 Dividends paid (46,764) (46,341) Repurchase of subsidiary's preferred stock (5,743) (17,185) Other 1,228 (531) - -------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (37,937) 99,209 - -------------------------------------------------------------------------------------------------------------- EFFECTS OF EXCHANGE RATE CHANGES ON CASH (535) 687 - -------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 29,174 (33,936) - -------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 85,909 133,809 - -------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 115,083 $ 99,873 ============================================================================================================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest (net of amount capitalized) $ 64,840 $ 58,422 Income taxes (net of refunds) $ 34,422 $ 5,798 ==============================================================================================================
See accompanying notes to condensed consolidated financial statements. 9 10 McDERMOTT INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1995 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements are presented in U. S. Dollars and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Such adjustments are of a normal, recurring nature except for an adjustment to the Offshore Pipelines, Inc. ("OPI") acquisition preliminary purchase price allocation (see Note 6); favorable worker's compensation cost adjustments ($8,869,000 net of tax of $3,771,000, or $0.16 per share) included in the three and nine months ended December 31, 1995; a favorable insurance adjustment ($12,000,000 or $0.22 per share) and a gain resulting from the sale of two power purchase contracts ($20,047,000 net of tax of $10,565,000, or $0.37 per share) included in the nine months ended December 31, 1995; favorable worker's compensation cost adjustments ($14,886,000, or $0.28 per share) and a reduction in accrued interest expense ($5,000,000 and $16,300,000, or $0.09 and $0.30 per share, respectively) due to the settlement of outstanding tax issues included in the three and nine months ended December 31, 1994; a loss related to the reduction of estimated products liability claim recoveries from insurers ($14,478,000 or $0.27 per share), accelerated depreciation on certain marine equipment ($4,314,000 or $0.08 per share) and the cumulative effect of the accounting change for the adoption of Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" included in the nine months ended December 31, 1994. Operating results for the three and nine months ended December 31, 1995 are not necessarily indicative of the results that may be expected for the year ended March 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in McDermott International, Inc.'s annual report on Form 10-K for the year ended March 31, 1995. 10 11 Unless the context otherwise requires, hereinafter "International" will be used to mean McDermott International, Inc., a Panamanian corporation; "JRM" will be used to mean J. Ray McDermott, S.A., a Panamanian corporation, which is a majority-owned subsidiary of International, and its consolidated subsidiaries; and the "Delaware Company" will be used to mean McDermott Incorporated, a Delaware corporation which is a subsidiary of International, and its consolidated subsidiaries (including Babcock & Wilcox Investment Company and its principal subsidiary, The Babcock & Wilcox Company); and "McDermott International" will be used to mean the consolidated enterprise. NOTE 2 - PRODUCTS LIABILITY At December 31, 1995, the estimated liability for pending and future non-employee products liability asbestos claims was $881,552,000 (of which approximately $200,000,000 had been asserted) and estimated insurance recoveries were $757,069,000. Estimated liabilities for pending and future non-employee products liability asbestos claims are derived from McDermott International's claims history and constitute management's best estimate of such future costs. Estimated insurance recoveries are based upon analysis of insurers providing coverage of the estimated liabilities. Inherent in the estimate of such liabilities and recoveries are expected trends in claim severity and frequency and other factors, including recoverability from insurers, which may vary significantly as claims are filed and settled. Accordingly, the ultimate loss may differ materially from amounts provided in the consolidated financial statements. 11 12 NOTE 3 - INVENTORIES Consolidated inventories at December 31, 1995 and March 31, 1995 are summarized below:
December 31, March 31, 1995 1995 ------------ -------- (In thousands) Raw Materials and Supplies $ 47,443 $ 38,570 Work in Progress 16,013 15,341 Finished Goods 7,428 10,133 - -------------------------------------------------------------------------------------------------------- $ 70,884 $ 64,044 ========================================================================================================
NOTE 4 - SUMMARIZED INCOME STATEMENT INFORMATION OF AFFILIATES The combined financial results of McDermott International's equity investments in HeereMac and McDermott-ETPM West, Inc. are summarized below. These ventures were significant as defined by applicable SEC regulations in fiscal year 1995. The following summarizes the combined income statements:
THREE NINE MONTHS ENDED MONTHS ENDED 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- (In thousands) Revenues $ 117,465 $ 136,026 $ 435,488 $ 560,171 Operating Income $ 2,084 $ 17,400 $ 6,422 $ 37,169 Income before Income Taxes $ 7,534 $ 22,103 $ 17,545 $ 50,459 Provision for Income Taxes 888 5,070 1,206 4,178 - ------------------------------------------------------------------------------------------------------------------------ Net Income $ 6,646 $ 17,033 $ 16,339 $ 46,281 ======================================================================================================================== Equity in Net Income $ 3,833 $ 8,438 $ 8,706 $ 22,993 ========================================================================================================================
12 13 NOTE 5 - SALE OF POWER PURCHASE CONTRACTS During the June 1995 quarter, McDermott International's Babcock-Ultrapower West Enfield and Babcock-Ultrapower Jonesboro 50% owned partnerships sold power purchase contracts back to the local utility which had previously entered into agreements with the partnerships to purchase power, and recognized a gain of $61,324,000. McDermott International's equity in earnings of these partnerships was $18,000 and $32,883,000 (including its share of the gain) for the three and nine months ended December 31, 1995. NOTE 6 - ACQUISITIONS During the December quarter of fiscal 1996, McDermott International recorded adjustments to the OPI preliminary purchase price allocation resulting in an increase of $95,000,000 in excess of cost over fair value of net assets acquired. These adjustments resulted from the completion of certain asset and liability valuations related primarily to joint ventures, property, plant and equipment, and preacquisition contingencies. Additionally, during the December quarter, management completed its assessment of the amortization period for excess of cost over fair value of net assets acquired and determined the amortization period should be 15 years. During June 1995, McDermott International and Delta Catalytic Corporation ("DCC") of Calgary, Alberta, concluded an agreement which accelerated McDermott International's purchase of the remaining portion of DCC from fiscal year 1997 to June 1995. During June 1993, McDermott International had acquired a controlling interest in DCC in the first step of a two step transaction. During November 1995, DCC changed its name to McDermott Engineers & Constructors (Canada) Ltd. ("McDermott Engineers & Constructors"). McDermott Engineers & Constructors provides engineering, procurement, construction and maintenance services to industries worldwide; including oil, gas, marine construction and hydrocarbon processing. Neither of these transactions are significant as defined by applicable SEC regulations. 13 14 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Beginning with the June 1995 quarter, management's discussion of revenues and operating income is presented on a business unit basis as follows: J. Ray McDermott, S.A. ("JRM") business unit (includes the results of operations of the marine construction services business); B&W Operations business unit (includes the operations of the Babcock & Wilcox Power Generation and Government Groups); and Engineering, Construction and Industrial Operations business unit (includes the Engineering and Construction Group, and Shipbuilding and Industrial Group). Other business unit revenues includes eliminations between business units; and Other business unit loss includes certain expenses, primarily employee benefit and insurance programs, and marketing and legal costs, that are not allocated to the business units. For the three and nine months ended December 31, 1994, the results of businesses disposed of during the fiscal year 1995 are included in Other revenues and business unit loss. Prior year information has been reclassified to conform with the December 31, 1995 presentation.
THREE NINE MONTHS ENDED MONTHS ENDED 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- (In thousands) REVENUES J. Ray McDermott, S.A. $ 272,236 $ 247,190 $ 939,996 $ 805,558 B&W Operations 337,848 327,419 968,827 938,136 Engineering, Construction and Industrial Operations 181,606 179,214 549,952 565,344 Other (including Transfer Eliminations) (25,152) (38,298) (69,007) (109,640) - --------------------------------------------------------------------------------------------------------------- TOTAL REVENUES $ 766,538 $ 715,525 $ 2,389,768 $ 2,199,398 ===============================================================================================================
14 15
THREE NINE MONTHS ENDED MONTHS ENDED 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- (In thousands) OPERATING INCOME Business Unit Income (Loss): J. Ray McDermott, S.A. $ 7,398 $ 25,818 $ 42,769 $ 67,108 B&W Operations 30,704 20,920 42,655 37,613 Engineering, Construction and Industrial Operations (3,661) (5,063) (19,822) (20,997) Other (2,788) 8,038 760 (3,082) - ----------------------------------------------------------------------------------------------------------------- TOTAL BUSINESS UNIT INCOME 31,653 49,713 66,362 80,642 - ----------------------------------------------------------------------------------------------------------------- Equity in Income (Loss) of Investees: J. Ray McDermott, S.A. 12,646 8,414 9,845 22,844 B&W Operations 1,754 3,479 37,595 7,415 Engineering, Construction and Industrial Operations 398 (1,128) 522 (40) Other - 2,936 - 4,430 - ----------------------------------------------------------------------------------------------------------------- TOTAL EQUITY IN INCOME OF INVESTEES 14,798 13,701 47,962 34,649 - ----------------------------------------------------------------------------------------------------------------- Corporate G&A Expense (9,021) (9,846) (23,399) (26,123) - ----------------------------------------------------------------------------------------------------------------- TOTAL OPERATING INCOME $ 37,430 $ 53,568 $ 90,925 $ 89,168 =================================================================================================================
RESULTS OF OPERATIONS - THREE MONTHS ENDED DECEMBER 31, 1995 VS. THREE MONTHS ENDED DECEMBER 31, 1994 JRM's revenues increased $25,046,000 to $272,236,000 primarily due to higher purchased engineered equipment and subcontract activities in the North Sea related to the B.P. Exploration Foinaven Development program west of the Shetlands in the North Atlantic, and higher offshore and fabrication activities in North America. 15 16 B&W Operations' revenues increased $10,429,000 to $337,848,000 primarily due to higher revenues from the Power Generations Group's contracts for replacement nuclear steam generators for domestic customers manufactured at its Cambridge, Ontario location and on plant enhancement projects. These increases were partially offset by lower revenues from fabrication of fossil fuel steam and environmental control systems. In addition, the Government Group's defense and space-related products (other than nuclear fuel assemblies and reactor components) had higher revenues. Engineering, Construction and Industrial Operations' revenues increased $2,392,000 to $181,606,000 primarily due to higher revenues from Engineering and Construction Group's engineering activities in Canada and the U. S. In addition, there were higher revenues from the Shipbuilding and Industrial Group's air-cooled heat exchangers. These increases were partially offset by lower revenues from the Engineering and Construction Group's repair and alteration of utility and industrial boilers in the U.S. and the Shipbuilding and Industrial Group's shipyard operations. JRM's business unit income decreased $18,420,000 to $7,398,000 primarily due the completion of higher profit margin contracts in the Far East and Middle East in the prior period, and lower operating income on marine activities in North America due to weather downtime and margins on certain contracts. These decreases were partially offset by higher volume and margins on North American fabrication activities. B&W Operations' business unit income increased $9,784,000 to $30,704,000 primarily due to the Power Generation Group's improved margins on its fossil fuel steam and environmental control systems (including a license buyout agreement of $8,574,000), and on its replacement parts. In addition, there were higher volume and margins from the Government Group's defense and space-related products (other than nuclear fuel assemblies and reactor components). Engineering, Construction and Industrial Operations' business unit loss decreased $1,402,000 to $3,661,000 primarily due to improved margins from the Shipbuilding and Industrial Group's shipyard operations and higher volume and margins on air-cooled heat 16 17 exchangers. In addition, there was higher volume from the Engineering and Construction Group's engineering activities in Canada and the U.S. These increases were partially offset by lower volume and margins from the Engineering and Construction Group's repair and alteration of utility and industrial boilers in the U. S. Other business unit income decreased $10,826,000 from income of $8,038,000 to a loss of $2,788,000 primarily due to lower favorable workers' compensation cost adjustments and higher employee benefit expenses. JRM's equity in income of investees increased $4,232,000 to $12,646,000. This increase was primarily due to including the results of the CMM Mexican joint venture which was not a part of JRM's marine construction services business in the prior period and higher operating activity from the Brown and Root McDermott Fabricators Limited joint venture which was formed in the last quarter of the prior year. These increases were partially offset by lower results from both the HeereMac and McDermott-ETPM West, Inc. joint ventures. The revenues of these two joint ventures declined from $136,026,000 to $117,465,000, primarily in the U. S. Gulf, the Far East and in the North Sea, partially offset by increased volume in West Africa. The equity income from these two joint ventures declined from $8,438,000 to $3,833,000 but the decline was not as severe due to a reduction to an anticipated loss on a joint venture contract. While both joint ventures performed at low levels during fiscal 1996, worldwide demand for offshore drilling rigs has increased and has resulted in an increase in these joint venture's backlog. B&W Operations' equity in income of investees decreased $1,725,000 to $1,754,000 primarily due to the lower operating results in a domestic joint venture. Engineering, Construction and Industrial Operations equity in income of investees increased $1,526,000 from a loss of $1,128,000 to income of $398,000 primarily due to improved results from a domestic fabrication joint venture and several Canadian joint ventures. 17 18 Other business unit equity in income of investees includes the results of the CMM Mexican joint venture which was not a part of JRM's marine construction business in the prior period. Interest income decreased $5,502,000 to $8,155,000 primarily due to decreases in investments in government obligations and other investments in the current period and income recognized due to the settlement of claims for interest relating to foreign tax refunds and contract claims in the prior period. Interest expense increased $4,374,000 to $20,993,000 primarily due to a reduction in accrued interest of $5,000,000 on proposed tax deficiencies that was recorded in the prior period and changes in debt obligations and interest rates prevailing thereon. Minority interest expense increased $2,126,000 to $6,656,000 primarily due to minority shareholder participation in the results of JRM in the current period and income recognized in the prior period due to McDermott Engineers & Constructors (formerly Delta Catalytic Corporation) losses. Other-net expense decreased $1,613,000 to $3,833,000. This decrease was primarily due to lower foreign currency transactions losses in the current period and higher bank fees and discounts on the sale of certain accounts receivable in the prior period. The provision for income taxes decreased $3,319,000 to $7,497,000, while income before provision for income taxes decreased $26,527,000 to $14,103,000. The decrease in the provision for income taxes is primarily due to a decrease in income. In addition, McDermott International operates in many different tax jurisdictions. Within these jurisdictions, tax provisions vary because of nominal rates, allowability of deductions, credits and other benefits, and even tax basis (for example, revenues versus income). These variances, along with variances in the mix of income within jurisdictions, are responsible for shifts in the effective tax rate. As a result of these factors, the provision for income tax was 53% of pretax income for the three months ended December 31, 1995 compared to a provision for income taxes of 27% of pretax income for the three months ended December 31, 1994. 18 19 RESULTS OF OPERATIONS - NINE MONTHS ENDED DECEMBER 31, 1995 VS. NINE MONTHS ENDED DECEMBER 31, 1994 JRM's revenues increased $134,438,000 to $939,996,000 primarily due to higher purchased engineered equipment and subcontract activities in the North Sea related to the B.P. Exploration Foinaven Development program west of the Shetlands in the North Atlantic and higher revenues in North America. These increases were partially offset by lower revenues in the Far East. B&W Operations' revenues increased $30,691,000 to $968,827,000 primarily due to higher revenues from the Power Generation Group's contracts for replacement nuclear steam generators for domestic customers manufactured at its Cambridge, Ontario location and on plant enhancement projects. These increases were partially offset by lower revenues from fabrication of fossil fuel steam and environmental control systems in the U.S. In addition, the Government Group's defense and space-related products (other than nuclear fuel assemblies and reactor components) had higher revenues. These were partially offset by lower revenues from nuclear fuel assemblies and reactor components for the U. S. Government. Engineering, Construction and Industrial Operations' revenues decreased $15,392,000 to $549,952,000 primarily due to lower revenues from the Engineering and Construction Group's activities relating to the construction, repair and alteration of utility and industrial boilers in the U. S., and from the Shipbuilding and Industrial Group's shipyard operations. These decreases were partially offset by higher revenues from the Engineering and Construction Group's maintenance, construction, and engineering activities in Canada and domestic engineering activities. In addition, there were higher revenues from the Shipbuilding and Industrial Group's air-cooled heat exchangers. JRM's business unit income decreased $24,339,000 to $42,769,000 primarily due to lower margins because of the completion of higher profit margin contracts in the Far East and the Middle East in the prior period, and lower operating income on marine activities in North America due to weather downtime and margins on certain contracts. These 19 20 decreases were partially offset by higher volume and margins on North American fabrication activities, higher volume and margins on North Sea offshore activities and improved margins from engineering activities in the current period, and operating losses associated with the fabrication yard in Scotland (which is now operated by the Brown and Root McDermott Fabricators Limited joint venture, which was formed in the last quarter of the prior year and is now reported on the equity method) and the accelerated depreciation of $4,314,000 on certain marine equipment in the Far East in the prior period. B&W Operations' business unit income increased $5,042,000 to $42,655,000 primarily due to higher volume and margins from the Power Generation Group's replacement nuclear steam generators and plant enhancement projects and improved margins from fabrication of fossil fuel steam and environmental control systems (including a license buyout agreement of $8,574,000). These increases were partially offset by lower margins from the fabrication of industrial boilers in the U. S. In addition, there were higher volume and margins from the Government Group's defense and space-related products (other than nuclear fuel assemblies and reactor components). This was partially offset by lower volume and margins from nuclear fuel assemblies and reactor components for the U. S. Government. Engineering, Construction and Industrial Operations' business unit loss decreased $1,175,000 to $19,822,000 primarily due to improved margins from the Shipbuilding and Industrial Group's shipyard operations and higher volume and margins from air-cooled heat exchangers. These increases were partially offset by lower volume and margins from the Engineering and Construction Group's construction, repair and alteration of utility and industrial boilers in the U. S., including cost overruns on the completion of a contract for one U. S. customer. Other business unit income increased $3,842,000 from a loss of $3,082,000 to income of $760,000 primarily due to a favorable insurance adjustment of $12,000,000 in the current year and the inclusion of losses in the prior year of businesses that were disposed of during fiscal 1995. 20 21 JRM's equity in income of investees decreased $12,999,000 to $9,845,000. Both the HeereMac and McDermott-ETPM West, Inc. joint ventures performed at lower levels than in the previous year. The revenues of these two joint ventures declined from $560,171,000 to $435,488,000 primarily in the U.S. Gulf, the Far East and in the North Sea, partially offset by increased volume in West Africa. The equity income from these two joint ventures declined from $22,993,000 to $8,706,000 as a result of reduced volume and reduced margins. While both joint ventures performed at low levels during fiscal 1996, worldwide demand for offshore drilling rigs has increased and has resulted in an increase in these joint venture's backlog. Equity in income of investees also increased due to income from the Brown and Root McDermott Fabricators Limited joint venture. B&W Operations' equity in income of investees increased $30,180,000 to $37,595,000 primarily due to the Power Generation Group's sale of power purchase contracts back to a local utility in the current period and a provision for a loss on discontinuing a domestic joint venture in the prior period. Other business unit equity in income of investees includes the results of the CMM Mexican joint venture which was not a part of JRM's marine construction business in the prior year. Interest income decreased $11,954,000 to $27,845,000 primarily due to decreases in investments in government obligations and other investments in the current year and income recognized on a receivable from an equity investee and settlement of claims for interest relating to foreign tax refunds and contract claims in the prior year. Interest expense increased $20,348,000 to $63,907,000 primarily due to a reduction in accrued interest of $16,300,000 on proposed tax deficiencies that was recorded in the prior year and changes in debt obligations and interest rates prevailing thereon. Minority interest expense increased $6,264,000 to $15,802,000 primarily due to minority shareholder participation in the results of JRM in the current year and income recognized in the prior period due to McDermott Engineers & Constructors losses. 21 22 Other-net increased $27,113,000 to income of $1,731,000 from expense of $25,382,000. This increase was primarily due to a loss related to the reduction of estimated products liability asbestos claim recoveries of $14,478,000 from insurers, losses on the sale of investments and higher bank fees and discounts on the sale of certain accounts receivable, all in the prior period, and gains of $5,133,000 on the disposal of assets in the current period. The provision for income taxes decreased $4,518,000 to $16,300,000, while income before provision for income taxes and cumulative effect of accounting change decreased $9,696,000 to $40,792,000. The decrease in the provision for income taxes was in part due to a decrease in income and a reappraisal of liabilities in certain foreign tax jurisdictions. In addition, McDermott International operates in many different tax jurisdictions. Within these jurisdictions, tax provisions vary because of nominal rates, allowability of deductions, credits and other benefits, and even tax basis (for example, revenues versus income). These variances, along with variances in the mix of income within jurisdictions, are responsible for shifts in the effective tax rate. As a result of these factors, the provision for income taxes was 40% of pretax income for the nine months ended December 31, 1995 compared to a provision for income taxes of 41% of pretax income for the nine months ended December 31, 1994. Net income decreased $3,413,000 to $24,492,000 reflecting the cumulative effect of the adoption of Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits," of $1,765,000 in the prior year, in addition to the other items mentioned above. 22 23 Backlog
12/31/95 3/31/95 -------- ------- (In thousands) Business Unit Backlog: J. Ray McDermott, S.A. $ 734,254 $ 1,002,968 B&W Operations 2,150,747 1,952,580 Engineering, Construction and Industrial Operations 484,095 623,719 Other (including Transfer Eliminations) (88,049) (105,435) - ------------------------------------------------------------------------------------------------------------- TOTAL BACKLOG $ 3,281,047 $ 3,473,832 =============================================================================================================
JRM's backlog at December 31, 1995 and March 31, 1995 was $734,254,000 and $1,002,968,000, respectively. Fiscal 1996 revenues are expected to be about 20% below what JRM anticipated at the beginning of the fiscal year. This lower market activity is reflected in the decrease in JRM's backlog at December 31, 1995 and in the low level of performance of JRM's unconsolidated joint ventures expected through the remainder of fiscal 1996. However, worldwide demand for offshore drilling rigs has increased and this, historically, has been a leading indicator for an increase in JRM's operations. This is already reflected in the increase in backlog relating to contracts to be performed by JRM's unconsolidated joint ventures to approximately $1,240,000,000 at December 31, 1995 from $922,000,000 at March 31, 1995. B&W Operations' backlog at December 31, 1995 was $2,150,747,000 compared to $1,952,580,000 at March 31, 1995. B&W Operations' foreign markets for industrial and utility boilers are expected to remain strong as well as the U. S. market for replacement nuclear steam generators. Domestic utility markets remain weak. At December 31, 1995 this business unit's backlog with the U.S. Government was $807,844,000 (of which $89,411,000 had not been funded). U. S. Government budget reductions have negatively affected this business unit's government operations. Engineering, Construction and Industrial Operations' backlog at December 31, 1995 was $484,095,000 compared to $623,719,000 at March 31, 1995. The current competitive economic environment in the U. S. has negatively affected demand for its construction activities. At December 31, 1995 this business unit's backlog with the U.S. Government was $56,321,000 (of which $6,603,000 had not been funded). 23 24 Liquidity and Capital Resources During the nine months ended December 31, 1995, McDermott International's cash and cash equivalents increased $29,174,000 to $115,083,000 and total debt increased $10,543,000 to $997,230,000. During this period, McDermott International used cash of $241,037,000 in operating activities; $173,272,000 for repayment of long-term debt; $52,503,000 for additions to property, plant and equipment; $26,518,000 for the conversion of a barge to a floating production unit; and $46,764,000 for dividends on International's common and preferred stock. During the nine months ended December 31, 1995, McDermott International sold approximately $348,000,000 of its investments to repay outstanding short-term debt obligations. Increases in accounts receivable are primarily due to a reduction of approximately $53,000,000 of qualified accounts receivable sold under the terms of an agreement with a U. S. bank and the timing of the collection of contract billings by North American fabrication and marine operations. Increases in net contracts in progress and advance billings were primarily due to the timing of billings in contracts performed on the Foinaven Development program and in the Far East. Pursuant to an agreement with a majority of its principal insurers, McDermott International negotiates and settles products liability asbestos claims from non-employees and bills these amounts to the appropriate insurers. As a result of collection delays inherent in this process, reimbursement is usually delayed for three months or more. The number of claims had declined moderately since fiscal year 1990, but has increased during the second half of fiscal year 1995 and the first nine months of fiscal year 1996. Management believes, based on information currently available, that the recent increase represents an acceleration in the timing of the receipt of these claims, but does not represent an increase in its total estimated liability. The average amount of these claims (historical average of approximately $5,300 per claim over the last three years) has continued to rise. Claims paid during the nine months ended December 31, 1995 were $114,396,000, of which $101,952,000 has been recovered or is due from insurers. At December 31, 1995, receivables of $52,750,000 were due from insurers for 24 25 reimbursement of settled claims. Estimated liabilities for pending and future non-employee products liability asbestos claims are derived from McDermott International's claims history and constitute management's best estimate of such future costs. Estimated insurance recoveries are based upon analysis of insurers providing coverage of the estimated liabilities. Inherent in the estimate of such liabilities and recoveries are expected trends in claim severity and frequency and other factors, including recoverability from insurers, which may vary significantly as claims are filed and settled. Accordingly, the ultimate loss may differ materially from amounts provided in the consolidated financial statements. Settlement of the liability is expected to occur over approximately the next 25 years. The collection delays, and the amount of claims paid for which insurance recovery is not probable, have not had a material adverse effect on McDermott International's liquidity, and management believes, based on information currently available, that they will not have a material adverse effect on liquidity in the future. McDermott International's expenditures for property, plant and equipment decreased $15,814,000 to $52,503,000 for the nine months ended December 31, 1995 compared with the same period last year. These expenditures included $8,669,000 for installation of a new pipe reel system on a marine barge. In addition to expenditures for property, plant and equipment, McDermott International expended $26,518,000 in the nine months ended December 31, 1995 for the conversion of a barge to a floating production unit which is now leased to a third party. The barge conversion is financed by $21,700,000 in loan facilities, of which $20,674,000 was outstanding at December 31, 1995. At December 31, and March 31, 1995, The Babcock & Wilcox Company had sold, with limited recourse, an undivided interest in a designated pool of qualified accounts receivable of approximately $122,000,000 and $175,000,000, respectively, under the terms of an agreement with a U.S. bank. The maximum sales limit available under the agreement was reduced during July 1995 from $225,000,000 to $175,000,00 and during December 1995 to $140,000,000. During November 1995, The Babcock & Wilcox Company and the bank amended the agreement to provide for an annual renewal of the program. 25 26 At December 31, and March 31, 1995, International and its subsidiaries, had available to them various uncommitted short- term lines of credit totaling $418,319,000 and $373,867,000, respectively. Borrowings by McDermott International against these lines of credit at December 31 and March 31, 1995 were $210,715,000 and $63,025,000, respectively. In addition, The Babcock & Wilcox Company had available to it an unsecured and committed revolving credit facility. During September 1995, the facility was amended to increase the commitment to $150,000,000 and to extend the agreement to March 31, 1999. It is a condition to borrowing under this revolving credit facility that the borrower's tangible net worth, debt to capitalization, and interest coverage as defined in the agreement meet or exceed certain covenant requirements. Borrowings outstanding against this facility at December 31, 1995 were $35,000,000, while there were none outstanding at March 31, 1995. McDermott Engineers & Constructors (Canada) Ltd., formerly Delta Catalytic Corporation, had available from a certain Canadian bank an unsecured and committed revolving credit facility of $14,925,000. At March 31, 1995, borrowings outstanding against this facility were $7,420,000. In October 1995, this facility was repaid and cancelled. JRM had available to it a $150,000,000 unsecured and committed revolving credit facility of which $60,000,000 was outstanding at December 31, 1995. JRM is restricted, as a result of the consolidated tangible net worth covenant in this agreement, in its ability to transfer funds to International and its subsidiaries through cash dividends or through unsecured loans or investments. McDermott International maintains an investment portfolio of government obligations which is classified as available for sale under SFAS No. 115. The fair value of short-term investments and the long-term portfolio at December 31, 1995 was $368,837,000 (amortized cost $367,249,000). Subsequent to December 31, 1995, $48,726,000 (amortized cost) of short-term investments was used to repay short-term debt. At December 31, 1995, approximately $136,786,000 fair value of these obligations were pledged to secure a letter of credit in connection with a long-term loan and certain reinsurance agreements. In addition, McDermott International had obligations of $79,222,000 under short-term repurchase agreements which were secured by government obligations with a fair value of $81,052,000 at December 31, 1995. 26 27 The Delaware Company is restricted, as a result of covenants in certain credit agreements, in its ability to transfer funds to International and its subsidiaries through cash dividends or through unsecured loans or investments. At December 31, 1995, substantially all of the net assets of the Delaware Company were subject to such restrictions. It is not expected that these restrictions will have any significant effect on International's liquidity. Working capital increased by $152,462,000 from a deficit of $40,790,000 at March 31, 1995 to $111,672,000 at December 31, 1995 reflecting the use of $278,000,000 of long-term investments to repay short-term debt. During the remainder of fiscal year 1996, McDermott International expects to obtain funds to meet capital expenditure, working capital and debt maturity requirements from operating activities, its short-term investment portfolio and additional borrowings from existing lines of credit. Leasing agreements for equipment, which are short-term in nature, are not expected to impact McDermott International's liquidity nor capital resources. McDermott International's financial strategy is to rebuild its investment portfolio and maintain a level of cash and investments equal to or greater than its total debt. It intends to achieve this balance from improved operating performance and the disposition of unused, surplus and non- strategic assets which have been identified and placed in a program for their disposal. McDermott International has provided a valuation allowance for deferred tax assets which cannot be realized through carrybacks and future reversals of existing taxable temporary differences. Management believes that remaining deferred tax assets in all other tax jurisdictions are realizable through carrybacks and future reversals of existing taxable temporary differences, and, if necessary, the implementation of tax planning strategies involving sales and sale/leasebacks of appreciated assets. A major uncertainty that affects the ultimate realization of deferred tax assets is the possibility of declines in value of appreciated assets involved in identified tax planning strategies. This factor has been considered in determining the valuation allowance. Management will continue to assess the adequacy of the valuation allowance on a quarterly basis. In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," effective for fiscal years beginning 27 28 after December 15, 1995. SFAS No. 121 requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 121 also applies to similar assets that are held for disposal, except for the assets of a discontinued operation. McDermott International has not yet finalized its review of the impact of this statement, but it is not expected to have a material impact on the consolidated financial statements. In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," effective for fiscal years beginning after December 15, 1995. SFAS No. 123 establishes financial accounting and reporting standards for stock-based employee compensation plans. McDermott International has not yet finalized its review of the provisions of this statement, and accordingly, has not yet determined whether it will adopt SFAS No. 123 for expense recognition purposes, or continue to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and make the pro forma information disclosures required under the new standard. 28 29 PART II MCDERMOTT INTERNATIONAL, INC. OTHER INFORMATION No information is applicable to Part II for the current quarter, except as noted below: Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 11 - Calculation of Earnings Per Common and Common Equivalent Share - Page 31 Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K Report on Form 8-K, Item 5 was filed on December 15, 1995. Signatures 29 30 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, INC. /s/ Daniel R. Gaubert -------------------------------- By: Daniel R. Gaubert Vice President, Finance and Controller (Principal Accounting Officer) February 12, 1996 30 31 EXHIBIT INDEX Exhibit Description - ------- ----------- Exhibit 11 - Calculation of Earnings Per Common and Common Equivalent Share - Page 31 Exhibit 27 - Financial Data Schedule EX-11 2 CALCULATION OF EARNINGS PER SHARE 1 EXHIBIT 11 MCDERMOTT INTERNATIONAL, INC. CALCULATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (In thousands, except shares and per share amounts) PRIMARY AND FULLY DILUTED
THREE NINE ----- ---- MONTHS ENDED MONTHS ENDED ------------ ------------ 12/31/95 12/31/94 12/31/95 12/31/94 -------- -------- -------- -------- Income before cumulative effect of accounting change $ 6,606 $ 29,814 $ 24,492 $ 29,670 Less dividend requirements of preferred stock, Series C 2,066 2,066 6,199 6,199 - -------------------------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change applicable to common stock 4,540 27,748 18,293 23,471 Cumulative effect of accounting change - - - (1,765) - -------------------------------------------------------------------------------------------------------------------- Net income for primary computation $ 4,540 $ 27,748 $ 18,293 $ 21,706 ==================================================================================================================== Weighted average number of common shares outstanding during the period 54,289,682 53,707,031 54,168,265 53,584,706 Common stock equivalents of stock options and stock appreciation rights based on "treasury stock" method 38,500 267,403 198,711 137,511 - -------------------------------------------------------------------------------------------------------------------- Weighted average number of common and common equivalent shares outstanding during the period 54,328,182 53,974,434 54,366,976 53,722,217 ==================================================================================================================== Earnings (loss) per common and common equivalent share: (1) Income before cumulative effect of accounting change $ 0.08 $ 0.51 $ 0.34 $ 0.43 Accounting change - - - (0.03) - -------------------------------------------------------------------------------------------------------------------- Net income $ 0.08 $ 0.51 $ 0.34 $ 0.40 ====================================================================================================================
(1) Earnings (loss) per common and common equivalent share assuming full dilution are the same for the periods presented. 31 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MCDERMOTT INTERNATIONAL'S DECEMBER 31, 1995 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 9-MOS MAR-31-1996 DEC-31-1995 115,083 63,789 589,334 83,633 495,221 1,585,532 2,181,086 1,350,114 4,551,738 1,473,860 585,276 54,370 0 2,875 654,391 4,551,738 2,389,768 2,389,768 2,346,805 2,346,805 0 0 63,907 40,792 16,300 24,492 0 0 0 24,492 0.34 0.34
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