8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d)of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2008

McDERMOTT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

REPUBLIC OF PANAMA	001-08430	72-0593134
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

777 N. Eldridge Parkway, Houston, Texas	77079
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (281) 870-5901

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02     Results of Operations and Financial Condition.

On February 27, 2008, we issued a press release announcing our financial results for the fourth quarter ended December 31, 2007. A copy of the press release is attached as Exhibit 99.1, and the information contained in Exhibit 99.1 is incorporated by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01     Financial Statements and Exhibits.

(d)	Exhibits
	99.1	Press Release dated February 27, 2008.

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 hereunto duly authorized.

	McDERMOTT INTERNATIONAL, INC.
	By:	/s/ Dennis S. Baldwin
		Dennis S. Baldwin
		Vice President and Chief Accounting Officer
February 27, 2008

EX-99.1

Exhibit 99.1

McDermott Reports Fourth Quarter 2007 Results

Net Income of $160.0 million, $0.70 per fully diluted share

Strong Fourth Quarter leads to Record Full-Year Revenues, Net Income, Bookings and Backlog

HOUSTON--(BUSINESS WIRE)--McDermott International, Inc. (NYSE:MDR) (“McDermott” or the “Company”) today reported net income of $160.0 million, or $0.70 per diluted share, for the 2007 fourth quarter, compared to net income of $125.5 million, or $0.55 per diluted share, for the corresponding period in 2006. As disclosed a year ago, fourth quarter 2006 net income benefited by approximately $57.2 million, net from certain identified items. This net benefit for the fourth quarter of 2006 was subsequently reduced by approximately $16 million as a result of a required accounting pronouncement adopted in 2007.

Weighted average common shares outstanding on a fully diluted basis were approximately 229.8 million and 228.7 million in the quarters ended December 31, 2007 and December 31, 2006, respectively. For 2006, the Company’s common shares outstanding and earnings per share are adjusted to reflect the 2-for-1 stock split effected in September 2007.

McDermott’s revenues in the fourth quarter of 2007 were $1,526.0 million, an increase of 16.7 percent compared to $1,308.0 million in the corresponding period in 2006. The $218 million improvement in Company revenues, compared to a year ago, was a result of the Offshore Oil & Gas Construction segment which increased revenues by approximately $257 million, or 54.1 percent.

Operating income was $186.8 million in the 2007 fourth quarter, an improvement of 115.2 percent, compared to $86.8 million in the 2006 fourth quarter. The $100 million increase in operating income is attributable to heightened year-over-year increases in each of the Company’s operating segments.

“McDermott completed a record-setting, full-year 2007 with strong fourth quarter results,” said Bruce W. Wilkinson, Chairman of the Board and Chief Executive Officer of McDermott. “The Company reported its highest quarterly level of net income of the year, and our recorded bookings of over $2 billion resulted in the fourth consecutive quarter of sequential backlog growth.”

At December 31, 2007, McDermott’s consolidated backlog was $9.8 billion, compared to $7.6 billion and $9.3 billion at December 31, 2006 and September 30, 2007, respectively.

For the year-ended December 31, 2007, McDermott reported consolidated revenues of $5.6 billion, producing operating income of $716.2 million and net income of $607.8 million, or $2.66 per diluted share.

RESULTS OF OPERATIONS

2007 Fourth Quarter Compared to 2006 Fourth Quarter

Offshore Oil & Gas Construction Segment

Revenues in the Offshore Oil & Gas Construction segment were $733.3 million in the 2007 fourth quarter, compared to $475.9 million for the same period a year ago. The year-over-year increase in revenues resulted from a higher workload in worldwide marine activities, including revenues from Secunda International Limited whose assets were acquired in July 2007, and from increased activities within the Caspian, Middle East and Americas regions.

Segment income for the 2007 fourth quarter was $100.0 million, compared to $49.1 million in the 2006 fourth quarter. Major areas contributing to fourth quarter 2007 segment income include activities in the Caspian, Middle East and Asia Pacific regions.

At December 31, 2007, segment backlog was $4.8 billion, compared to backlog of $4.1 billion and $4.9 billion at December 31, 2006 and September 30, 2007, respectively.

Power Generation Systems Segment

Revenues in the Power Generation Systems segment for the fourth quarter 2007 were $608.0 million, compared to $676.8 million reported in the fourth quarter of 2006. The year-over-year reduction in revenues resulted from lower activities on new fossil utility steam systems and retrofits of existing facilities compared to a year ago, partially offset by higher levels of replacement parts and increased activity on nuclear steam generators.

Segment income for the 2007 fourth quarter was $65.9 million, compared to $24.9 million in the 2006 fourth quarter. Major areas contributing to fourth quarter 2007 segment income include utility steam system fabrication, replacement nuclear steam generators, industrial boilers and parts and service activities. In the 2006 fourth quarter, the Company recorded approximately $27 million in previously announced settlement, insurance and warranty charges.

At December 31, 2007, segment backlog was $3.3 billion, compared to backlog of $2.2 billion and $3.0 billion at December 31, 2006 and September 30, 2007, respectively.

Government Operations Segment

Revenues in the Government Operations segment were $187.7 million in the 2007 fourth quarter, compared to $158.3 million for the same period a year ago. The improvement was primarily due to higher volumes in the manufacture of nuclear components for certain U.S. Government programs, including revenues from Marine Mechanical Corporation which was acquired in April 2007.

Segment income for the 2007 fourth quarter was $33.3 million, compared to $19.9 million in the 2006 fourth quarter. Major items contributing to the fourth quarter 2007 segment income include the manufacture of nuclear components for certain U.S. Government programs and the management and operations of various U.S. Government sites.

At December 31, 2007, segment backlog was $1.8 billion, compared to backlog of $1.3 billion and $1.4 billion at December 31, 2006 and September 30, 2007, respectively.

Corporate

Unallocated corporate expenses were $12.4 million in the 2007 fourth quarter, compared to $7.0 million in the 2006 fourth quarter. The year-over-year increase was primarily related to increased general corporate expenses, including higher stock-based compensation expenses due to McDermott’s 9.2 percent stock price increase during the fourth quarter of 2007.

Other Income and Expense

The Company’s other income for the fourth quarter of 2007 was $7.3 million, compared to other expense of $4.2 million in the fourth quarter of 2006. The year-over-year improvement was primarily related to lower interest expense and the loss on early retirement of debt incurred during the fourth quarter of 2006.

OTHER INFORMATION

About the Company

McDermott is an engineering and construction company, with specialty manufacturing and service capabilities, focused on energy infrastructure. McDermott’s customers are predominantly utilities and other power generators, major and national oil companies, and the United States Government. With its global operations, McDermott operates in over 20 countries with more than 20,000 employees.

Forward-Looking Statements

In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release, which are forward-looking and provide other than historical information, involve risks and uncertainties that may impact the Company’s actual results of operations. These forward-looking statements include statements about backlog, to the extent backlog may be viewed as an indicator of future revenues. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous uncertainties and risks, including, but not limited to, adverse changes in the markets in which we operate, our inability to successfully execute on contracts in backlog or that awards and contracts in backlog may not otherwise result in the expected revenues. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see McDermott’s annual and quarterly filings with the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 31, 2007.

Conference Call to Discuss 2007 Fourth Quarter Earnings Release

Date: Thursday, February 28, 2008, at 10:00 a.m. EST (9:00 a.m. CST)

Live Webcast: Investor Relations section of Web site at www.mcdermott.com

Replay: Available for two weeks in the investor relations section of www.mcdermott.com

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2007			2006			2007		2006
	(Unaudited)
	(In thousands, except shares and per share amounts)
Revenues	$	1,526,016		$	1,308,044		$5,631,610		$	4,120,141
Costs and Expenses:
Cost of operations		1,222,842			1,117,878		4,500,897			3,362,758
(Gains) losses on asset disposals and impairments – net		(5,991	)		93		(8,371	)		15,042
Selling, general and administrative expenses		137,086			115,598		464,611			388,524
		1,353,937			1,233,569		4,957,137			3,766,324
Equity in Income of Investees		14,698			12,327		41,724			37,524
Operating Income		186,777			86,802		716,197			391,341
Other Income (Expense):
Interest income		16,569			16,916		61,980			53,562
Interest expense		(4,089	)		(7,945	)	(22,520	)		(30,348	)
IRS interest expense adjustment		-			(5,292	)	-			5,719
Loss on early retirement of debt		-			(4,692	)	-			(53,708	)
Other expense – net		(5,142	)		(3,142	)	(10,192	)		(13,750	)
		7,338			(4,155	)	29,268			(38,525	)
Income from Continuing Operations before Provision for Income Taxes		194,115			82,647		745,465			352,816
Provision for (Benefit from) Income Taxes		34,130			(42,864	)	137,637			35,195
Income from Continuing Operations		159,985			125,511		607,828			317,621
Income from Discontinued Operations		-			-		-			12,894
Net Income	$	159,985		$	125,511		$607,828		$	330,515
Earnings per Common Share:
Basic:
Income from Continuing Operations	$	0.71		$	0.57		$2.72		$	1.46
Income from Discontinued Operations	$	0.00		$	0.00		$0.00		$	0.06
Net Income	$	0.71		$	0.57		$2.72		$	1.52
Diluted:
Income from Continuing Operations	$	0.70		$	0.55		$2.66		$	1.39
Income from Discontinued Operations	$	0.00		$	0.00		$0.00		$	0.06
Net Income	$	0.70		$	0.55		$2.66		$	1.45
Shares used in the computation of earnings per share:
Basic		225,213,119			220,031,152		223,511,880			217,752,454
Diluted		229,762,318			228,711,250		228,742,522			227,718,784

McDERMOTT INTERNATIONAL, INC. SELECTED SEGMENT INFORMATION
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2007			2006			2007			2006
	(Unaudited)
	(In thousands)
REVENUES
Offshore Oil and Gas Construction	$	733,261		$	475,856		$	2,445,675		$	1,610,307
Government Operations		187,684			158,251			694,024			630,067
Power Generation Systems		608,047			676,829			2,504,225			1,888,636
Adjustments and Eliminations		(2,976	)		(2,892	)		(12,314	)		(8,869	)
TOTAL	$	1,526,016		$	1,308,044		$	5,631,610		$	4,120,141
SEGMENT INCOME
Offshore Oil and Gas Construction	$	100,000		$	49,105		$	400,402		$	195,048
Government Operations		33,306			19,862			122,941			111,635
Power Generation Systems		65,864			24,857			234,068			114,607
		199,170			93,824			757,411			421,290
Unallocated Corporate		(12,393	)		(7,022	)		(41,214	)		(29,949	)
OPERATING INCOME	$	186,777		$	86,802		$	716,197		$	391,341
EQUITY IN INCOME (LOSS) OF INVESTEES (1)
Offshore Oil and Gas Construction	$	(985	)	$	(824	)	$	(3,923	)	$	(2,882	)
Government Operations		11,681			8,805			31,288			27,768
Power Generation Systems		4,002			4,346			14,359			12,638
TOTAL	$	14,698		$	12,327		$	41,724		$	37,524
DEPRECIATION & AMORTIZATION (1)
Offshore Oil and Gas Construction	$	17,262		$	8,717		$	54,318		$	28,515
Government Operations		5,636			4,740			19,269			14,833
Power Generation Systems		5,702			4,896			21,266			16,342
Corporate		281			584			1,136			1,310
TOTAL	$	28,881		$	18,937		$	95,989		$	61,000
CAPITAL EXPENDITURES
Offshore Oil and Gas Construction	$	35,651		$	19,638		$	172,580		$	89,501
Government Operations		6,385			5,486			14,117			16,608
Power Generation Systems		8,949			5,733			40,218			23,718
Corporate		501			100			6,374			2,877
TOTAL	$	51,486		$	30,957		$	233,289		$	132,704
BACKLOG
Offshore Oil and Gas Construction	$	4,752,794		$	4,138,545		$	4,752,794		$	4,138,545
Government Operations		1,790,686			1,269,328			1,790,686			1,269,328
Power Generation Systems		3,276,129			2,225,149			3,276,129			2,225,149
TOTAL	$	9,819,609		$	7,633,022		$	9,819,609		$	7,633,022
(1) Included in Segment Income Above

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
	December 31,
	2007		2006
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,001,394	$	600,843
Restricted cash and cash equivalents		64,786		106,674
Investments		300,092		172,171
Accounts receivable – trade, net		770,024		668,310
Accounts and notes receivable – unconsolidated affiliates		2,303		29,825
Accounts receivable – other		71,162		48,041
Contracts in progress		194,292		230,146
Inventories		95,208		77,769
Deferred income taxes		160,783		180,234
Other current assets		97,456		39,461
Total Current Assets		2,757,500		2,153,474
Property, Plant and Equipment		2,004,138		1,525,187
Less accumulated depreciation		1,090,400		1,011,693
Net Property, Plant and Equipment		913,738		513,494
Investments		162,069		121,914
Goodwill		158,533		89,226
Deferred Income Taxes		134,292		260,341
Long-Term Income Tax Receivable		8,745		299,786
Investments in Unconsolidated Affiliates		62,241		52,801
Other Assets		214,368		142,726
TOTAL	$	4,411,486	$	3,633,762

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
	December 31,
	2007			2006
	(In thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and current maturities of long-term debt	$	6,599		$	257,492
Accounts payable		455,659			407,094
Accrued employee benefits		343,812			246,182
Accrued liabilities – other		175,557			185,762
Accrued contract cost		93,281			110,992
Advance billings on contracts		1,463,223			1,116,118
Accrued warranty expense		101,330			79,077
Income taxes payable		57,071			58,557
Total Current Liabilities		2,696,532			2,461,274
Long-Term Debt		10,609			15,242
Accumulated Postretirement Benefit Obligation		96,253			100,316
Self-Insurance		82,525			84,704
Pension Liability		188,748			372,504
Other Liabilities		169,814			156,621
Commitments and Contingencies
Stockholders’ Equity:
Common stock, par value $1.00 per share, authorized 400,000,000 shares; issued 231,722,659 and 227,794,618 at December 31, 2007 and 2006, respectively		231,723			227,795
Capital in excess of par value		1,145,829			1,100,384
Accumulated earnings (deficit)		135,289			(458,886	)
Treasury stock at cost, 5,852,248 and 6,025,418 at December 31, 2007 and 2006, respectively		(63,903	)		(60,581	)
Accumulated other comprehensive loss		(281,933	)		(365,611	)
Total Stockholders’ Equity		1,167,005			443,101
TOTAL	$	4,411,486		$	3,633,762

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
	Year Ended December 31,
	2007			2006
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	607,828		$	330,515
Non-cash items included in net income:
Depreciation and amortization		95,989			61,000
(Income) loss of investees, net of dividends		120			1,644
(Gains) losses on asset disposals and impairments – net		(8,371	)		15,042
Gain on sale of business		-			(13,786	)
Premium on early retirement of debt		-			37,438
Provision for (benefit from) deferred taxes		89,624			179,467
Amortization of pension and postretirement costs		50,957			-
Loss on Babcock & Wilcox Power Generation Group, Inc. (“B&W PGG”) bankruptcy settlement		-			-
Excess tax benefits from FAS 123(R) stock-based compensation		(877	)		(20,113	)
Other, net		21,726			14,660
Changes in assets and liabilities, net of effects from acquisition and divestitures:
Accounts receivable		(82,105	)		(49,858	)
Income taxes receivable		255,165			(284,494	)
Accounts payable		40,384			65,157
Net contracts in progress and advance billings		382,184			330,996
Income taxes		(13,216	)		139,497
Accrued and other current liabilities		(14,305	)		81,060
Pension liability and accrued postretirement and employee benefits		(74,365	)		(119,114	)
Payment of the B&W PGG bankruptcy settlement		-			(605,000	)
Other, net		(33,790	)		64,031
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,316,948			228,142
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in restricted cash and cash equivalents		41,888			48,298
Purchases of property, plant and equipment		(233,289	)		(132,704	)
Acquisition of businesses, net of cash acquired		(334,457	)		-
Net (increase) decrease in available-for-sale securities		(159,350	)		212,082
Proceeds from asset disposals		11,223			21,712
Cash acquired from the reconsolidation of B&W PGG		-			164,200
Other, net		(4,696	)		(3,193	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(678,681	)		310,395
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt		-			250,000
Payment of long-term debt		(255,749	)		(238,615	)
Payment of debt issuance costs		(3,625	)		(10,170	)
Issuance of common stock		15,219			19,647
Excess tax benefits from FAS 123(R) stock-based compensation		877			20,113
Other, net		4			2,718
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(243,274	)		43,693
EFFECTS OF EXCHANGE RATE CHANGES ON CASH		5,558			(650	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		400,551			581,580
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		600,843			19,263
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,001,394		$	600,843
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized)	$	28,066		$	28,588
Income taxes (net of refunds)	$	(208,194	)	$	63,357

CONTACT:
McDermott International, Inc.
Investor Relations & Corporate Communications
Vice President
Jay Roueche, 281-870-5462
jroueche@mcdermott.com
or
Senior Manager
Robby Bellamy, 281-870-5165
rbellamy@mcdermott.com