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 .

Financial Review

B&W Revenues & Non-GAAP^[1] Op. Income

($ in millions; unaudited)

[1] Excludes revaluation of settlement costs.

See Appendix schedule I for reconciling items.

Non-GAAP^[1] J. Ray Financial Information

($ in millions; unaudited)

9/30/03

9/30/02

GAAP Revenues

512.3

276.8

Spar projects & Argentina ("Legacy") revenues

(109.3)

(66.8)

Non-GAAP Revenues

403.0

210.0

GAAP Operating Income

11.9

(370.3)

Impairment of J. Ray goodwill

313.0

Legacy Losses

19.9

66.0

Non-GAAP Operating Income

31.8

8.7

GAAP Operating Income %

2.3%

N/M

Non-GAAP Operating Income %

7.9%

4.1%

[1]: Non-GAAP measurements exclude the financial results of spar & Argentina projects

(together, "legacy"); and impairment of J. Ray McDermott goodwill.

Three Months Ended

JRAY

BWXT Segment Financial Information

($ in millions; unaudited)

9/30/03

9/30/02

Revenues

133.0

136.3

No items

0.0

GAAP Revenues

133.0

136.3

Operating Income

21.4

12.2

No items

GAAP Operating Income

21.4

12.2

GAAP Operating Income %

16.1%

9.0%

Three Months Ended

BWXT

Corporate Financial Information

($ in millions; unaudited)

9/30/03

9/30/02

Departmental costs

10.2

8.9

Billings to Operating Units

(6.0)

(6.8)

Net Corporate Expense

4.2

2.1

Pension Expense (non-cash)

20.8

4.2

GAAP Corporate costs as reported

25.0

6.3

Three Months Ended

Corporate

J. Ray 2003 Revenues & Non-GAAP^[1] Op. Income

($ in millions; unaudited)

[1] Excludes losses on spar and Argentina projects.

See Appendix schedule II for reconciling items.

BWXT 2003 Revenues & Operating Income

($ in millions; unaudited)

Corporate 2003 Operating Expense

($ in millions; unaudited)

Consolidated 2003 Revenues & Non-GAAP Op. Income ^[1]

($ in millions; unaudited)

[1] Excludes losses on spar and Argentina projects.

See Appendix schedule III for reconciling items.

Earnings per share – GAAP and Non-GAAP

($ per fully diluted share; unaudited)

[1] Excludes losses on spar and Argentina projects,

and B&W settlement revaluation.

See Appendix schedule IV for reconciliation.

Consolidated Available Liquidity

($ millions; unaudited)

Current Financing Structure

Financing Strategy in 2003

Refinance BWXT on a stand-alone basis

Refinance J. Ray on a stand-alone basis

Establish permanent financing structure to

facilitate growth

New Financing Arrangements

New financings expected to close in fourth quarter 2003

BWXT credit facility sized at up to $150 million

J. Ray announced $200 million offering of 144A notes

J. Ray letter of credit facility sized at $75 million and being

negotiated

All financings will be stand-alone at the operating unit

MII will not guarantee any of the financing arrangements

Value of J. Ray Marine Fleet

Estimated Value of Fleet

The nine major vessels which are to
be specifically pledged in support
of the J. Ray debt offering have an
estimated market value of over
$295 million

Two additional vessels, the DB-60
and the DB-17, are under review for
possible sale and have additional
estimated value of $57 million

Company owns and operates 21
additional support vessels, as well
as yard equipment, which are not
included in above totals

Notes

Table excludes appraisal value for the remaining vessels in the portfolio

Values based on comparable vessel market values

As of September 30, 2003

Proposed Financing Structure

Consolidated Available Liquidity – Post Close ^[1]

($ millions; unaudited)

11/12/03^[1]

[1] Includes cash and capacity after expected completion

of current financing initiatives.

See Appendix schedule V for reconciling items.

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 .

(NYSE: MDR)

For more information contact:

Jay Roueche

Director of Investor Relations

281-870-5462

Appendix I – B&W Non-GAAP Reconciliation

($ in millions; unaudited)

3/31/03

6/30/03

9/30/03

GAAP Revenues

381.0

352.3

318.5

GAAP Operating Income

19.9

(48.5)

19.2

Chapter 11 settlement adjustment

70.0

(5.5)

Non-GAAP Operating Income

19.9

21.5

13.7

Three Months Ended

Appendix II – J. Ray Non-GAAP Reconciliation

($ in millions; unaudited)

3/31/03

6/30/03

9/30/03

GAAP Revenues

395.0

468.0

512.3

Legacy Revenues

(82.8)

(126.0)

(109.3)

Non-GAAP Revenues

312.2

342.0

403.0

GAAP Operating Income

16.6

(13.2)

11.9

Legacy losses - Spars

19.9

Legacy losses - Argentina

39.9

Non-GAAP Operating Income

16.6

26.7

31.8

Three Months Ended

Appendix III – Consoldiated Non-GAAP Reconciliation

($ in millions; unaudited)

3/31/03

6/30/03

9/30/03

BWXT Revenues

117.7

127.5

133.0

J. Ray Revenues excl. Legacy

312.2

342.0

403.0

J. Ray Legacy Revenues

82.8

126.0

109.3

GAAP Revenues

512.7

595.5

645.3

GAAP Operating Income

13.9

(13.9)

8.4

Legacy losses - Spars

19.9

Legacy losses - Argentina

39.9

Non-GAAP Operating Income

13.9

26.0

28.3

Three Months Ended

Appendix IV –Non-GAAP EPS Reconciliation

($ in millions except per share amounts; unaudited)

3/31/03

6/30/03

9/30/03

GAAP income before taxes

36.7

(55.9)

15.3

B&W Settlement revaluation

(24.1)

39.4

(9.7)

Legacy losses - Spars

19.9

Legacy losses - Argentina

39.9

Non-GAAP income before taxes

12.6

23.4

25.5

GAAP taxes

7.0

4.6

5.1

Tax adjustments for Non-Gaap Items

(0.5)

(0.6)

(1.5)

Non-GAAP taxes

6.5

4.0

3.6

GAAP net income cont. operations

29.7

(60.5)

10.1

After-tax Non-GAAP adjustments

(23.6)

79.9

11.7

Non-GAAP net inc. cont. operations

6.1

19.4

21.8

GAAP fully diluted shares outstanding

65.1

64.0

66.7

Non-GAAP fully diluted shares

65.1

66.3

66.7

GAAP EPS

0.46

(0.95)

0.15

Non-GAAP EPS

0.09

0.29

0.33

Three Months Ended

Appendix V – Post Close Liquidity Reconciliation

($ in millions except per share amounts; unaudited)

Available cash at 11/12/03

87.2

Proceeds from bond offering, net.

194.0

Release of Lender's Collateral

7.9

Available cash post closing

289.1

Available credit capacity at 11/12/03

60.4

Cancellation of existing credit facility

(60.4)

New letter of credit facility - J. Ray

75.0

New BWXT revolving credit facility

125.0

Less: J. Ray LC's to be replaced

(58.3)

Less: BWXT LC's to be replaced

(47.8)

Available credit capacity post closing

93.9

Available liquidity at 11/12/03

147.60

Available liquidity at 11/12/03 - post close

383.00

Revaluation of B&W Settlement Charge

($ in millions; unaudited)

12/31/02

3/31/03

6/30/03

Q-3

9/30/03

Nominal

Fair

Value

Fair

Value

Change

Value

Components

4.75 Million Shares

of MDR

20.8

13.8

30.1

(3.0)

27.1

Share Price Guarantee

69.5

28.6

49.0

0.2

49.2

Note Payable

92.0

80.7

85.6

(2.5)

83.1

Intercompany Note Payable

(22.0)

(23.3)

(25.4)

(0.1)

(25.5)

All Other (Net)

(13.9)

(13.4)

(12.9)

(2.8)

(15.7)

146.4

86.4

126.4

(8.2)

118.2

Additional Information

^A Share price decreased from $6.33 at June 03 to $5.71 at September 03

^B Impacted by increase in stock price and increase in interest rates

^C Interest rate increased from 9.1583% at June 03 to 9.8634% at September 03

^DRevalued due to translation and accrued interest

^E Tax adjustment on intercompany note and on PV of tax benefits

^F EPS impact = $0.12 cents/share