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): May 12, 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 May 12, 2008, we issued a press release announcing our financial results for the first quarter ended March 31, 2008. 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 May 12, 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 thereunto duly authorized.

	McDERMOTT INTERNATIONAL, INC.
	By:	/s/ Dennis S. Baldwin
		Dennis S. Baldwin
		Vice President and Chief Accounting Officer
May 12, 2008

EX-99.1

Exhibit 99.1

McDermott Reports First Quarter 2008 Results; Net Income of $123.2 Million, $0.54 Per Fully Diluted Share

Bookings of $1.8 Billion produce Record Backlog; First Quarter Results Impacted by Weather Issues

HOUSTON--(BUSINESS WIRE)--McDermott International, Inc. (NYSE:MDR) (“McDermott” or the “Company”) today reported net income of $123.2 million, or $0.54 per diluted share, for the 2008 first quarter, compared to net income of $158.1 million, or $0.69 per diluted share, for the corresponding period in 2007. Weighted average common shares outstanding on a fully diluted basis were approximately 230.1 million and 228.4 million in the quarters ended March 31, 2008 and March 31, 2007, respectively. For 2007, 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 first quarter of 2008 were $1,450.4 million, an increase of 6.4 percent compared to $1,363.4 million in the corresponding period in 2007. The consolidated improvement in Company revenues, compared to a year ago, was a result of increases in the Offshore Oil & Gas Construction and Government Operations segments, partially offset by a decline in the Power Generation Systems segment.

Operating income was $157.1 million in the 2008 first quarter compared to $192.5 million in the 2007 first quarter. Year-over-year increases in the Power Generation Systems and Government Operations segments, totaling a combined $36 million, were more than offset by a $68.3 million decline segment income from the Offshore Oil & Gas Construction segment, primarily due to weather-related downtime in the 2008 first quarter and a lower amount of project close-outs, change orders and settlements compared to the first quarter of 2007.

“Despite a disruptive first quarter for Offshore Oil & Gas Construction, the outlook for all of our business segments remains strong for 2008 as we execute our record backlog and continue robust bidding activity,” said Bruce W. Wilkinson, Chairman of the Board and Chief Executive Officer of McDermott. “Each of the energy markets we serve has significant needs, and with our record of safe and timely execution, McDermott is well-positioned in the marketplace.”

At March 31, 2008, McDermott’s consolidated backlog was $10.2 billion, compared to $7.9 billion and $9.8 billion at March 31, 2007 and December 31, 2007, respectively.

RESULTS OF OPERATIONS

2008 First Quarter Compared to 2007 First Quarter

Offshore Oil & Gas Construction Segment

Revenues in the Offshore Oil & Gas Construction segment were $645.9 million in the 2008 first quarter, compared to $550.3 million for the same period a year ago. The year-over-year increase in revenues resulted from increased fabrication activities in the Middle East and Asia Pacific regions, partially offset by reduced activities in the Caspian region.

Segment income for the 2008 first quarter was $52.9 million, compared to $121.2 million in the 2007 first quarter. The decrease in segment income was primarily attributable to a high-level of unproductive offshore working days for major construction vessels during the 2008 first quarter, due to poor weather conditions in major areas of operation, and reduced activities in the Caspian region. In addition, the 2007 first quarter benefited from a significant amount of project close-outs, change orders and settlements, totaling approximately $40 million, compared to approximately $11 million in the first quarter of 2008.

At March 31, 2008, segment backlog was $5.3 billion, compared to backlog of $4.2 billion and $4.8 billion at March 31, 2007 and December 31, 2007, respectively.

Power Generation Systems Segment

Revenues in the Power Generation Systems segment for the first quarter of 2008 were $616.3 million, compared to $655.4 million in the first quarter of 2007. The reduction in revenues resulted primarily from lower activities on new fossil utility steam systems and retrofits of existing facilities compared to a year ago, partially offset by increased levels of replacement parts and activities on replacement nuclear steam generators.

Segment income for the 2008 first quarter was $76.3 million, compared to $43.5 million in the 2007 first quarter. The increase in segment income resulted primarily from improved profitability on utility steam systems, higher volumes of replacement parts and increased activities on replacement nuclear steam generator.

At March 31, 2008, segment backlog was $3.2 billion, compared to backlog of $2.3 billion and $3.3 billion at March 31, 2007 and December 31, 2007, respectively.

Government Operations Segment

Revenues in the Government Operations segment were $190.6 million in the 2008 first quarter, compared to $161.4 million for the same period a year ago. The improvement was primarily due to the manufacture of nuclear components for a commercial uranium enrichment project which was awarded in June 2007, and higher volumes in the manufacture of nuclear components for certain U.S. Government programs, including revenues from Marine Mechanical Corporation which was acquired in May 2007.

Segment income for the 2008 first quarter was $38.0 million, the highest level of quarterly segment income since inception, compared to $34.8 million in the 2007 first quarter. The increase in segment income resulted primarily from an increase in site management income, and increased activity in the manufacture of nuclear components for the new commercial uranium enrichment project and for certain U.S. Government programs.

At March 31, 2008, segment backlog was $1.7 billion, compared to backlog of $1.5 billion and $1.8 billion at March 31, 2007 and December 31, 2007, respectively.

Corporate

Unallocated corporate expenses were $10.0 million in the 2008 first quarter, compared to $6.9 million in the 2007 first quarter. The year-over-year increase was primarily related to increased general corporate expenses, including higher stock-based compensation expenses.

Other Income and Expense

The Company’s other income for the first quarter of 2008 was $6.5 million, compared to other expense of $1.1 million in the first quarter of 2007. The year-over-year improvement was primarily related to lower interest expense following the retirement of the $250 million term loan in April 2007.

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, our belief that McDermott is well positioned in the marketplace and that our outlook for 2008 is strong. 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 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 2008 First Quarter Earnings Release

Date: Tuesday, May 13, 2008, at 10:00 a.m. EDT (9:00 a.m. CDT)

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. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended
	March 31,
	2008			2007
	(Unaudited)
	(In thousands, except shares and per share amounts)
Revenues	$	1,450,426		$	1,363,430
Costs and Expenses:
Cost of operations		1,188,696			1,082,066
Gains on asset disposals and impairments – net		(11,443	)		(1,635	)
Selling, general and administrative expenses		126,731			97,762
Total Costs and Expenses		1,303,984			1,178,193
Equity in Income of Investees		10,670			7,241
Operating Income		157,112			192,478
Other Income (Expense):
Interest income		13,395			12,318
Interest expense		(2,940	)		(9,589	)
Other expense – net		(3,997	)		(3,870	)
Total Other Income (Expense)		6,458			(1,141	)
Income before Provision for Income Taxes		163,570			191,337
Provision for Income Taxes		40,380			33,276
Net Income	$	123,190		$	158,061
Earnings per Share:
Basic	$	0.55		$	0.71
Diluted	$	0.54		$	0.69
Shares used in the computation of earnings per share:
Basic		225,632,169			221,589,626
Diluted		230,112,858			228,438,412

McDERMOTT INTERNATIONAL, INC. SELECTED SEGMENT INFORMATION
	Three Months Ended
	March 31,
	2008			2007
	(Unaudited)
REVENUES
Offshore Oil and Gas Construction	$	645,949		$	550,269
Government Operations		190,594			161,399
Power Generation Systems		616,298			655,414
Adjustments and Eliminations		(2,415	)		(3,652	)
TOTAL	$	1,450,426		$	1,363,430
SEGMENT INCOME
Offshore Oil and Gas Construction	$	52,925		$	121,203
Government Operations		37,950			34,755
Power Generation Systems		76,258			43,464
		167,133			199,422
Corporate		(10,021	)		(6,944	)
TOTAL	$	157,112		$	192,478
EQUITY IN INCOME (LOSS) OF INVESTEES (1)
Offshore Oil and Gas Construction	$	(754	)	$	(813	)
Government Operations		8,749			6,473
Power Generation Systems		2,675			1,581
TOTAL	$	10,670		$	7,241
DEPRECIATION & AMORTIZATION (1)
Offshore Oil and Gas Construction	$	19,963		$	7,304
Government Operations		5,566			3,700
Power Generation Systems		5,497			5,213
Corporate		285			321
TOTAL	$	31,311		$	16,538
CAPITAL EXPENDITURES
Offshore Oil and Gas Construction	$	47,237		$	34,424
Government Operations		1,511			2,560
Power Generation Systems		7,204			11,186
Corporate		3,334			31
TOTAL	$	59,286		$	48,201
BACKLOG
Offshore Oil and Gas Construction	$	5,320,839		$	4,208,217
Government Operations		1,676,766			1,456,593
Power Generation Systems		3,179,244			2,260,520
TOTAL	$	10,176,849		$	7,925,330
(1) Included in Segment Income Above

McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	March 31,		December 31,
	2008		2007
	(Unaudited)
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	800,600	$	1,001,394
Restricted cash and cash equivalents		79,347		64,786
Investments		348,186		300,092
Accounts receivable – trade, net		817,577		770,024
Accounts and notes receivable – unconsolidated affiliates		3,328		2,303
Accounts receivable – other		100,078		71,162
Contracts in progress		212,917		194,292
Inventories		108,098		95,208
Deferred income taxes		143,123		160,783
Other current assets		109,079		97,456
Total Current Assets		2,722,333		2,757,500
Property, Plant and Equipment		2,031,973		2,004,138
Less accumulated depreciation		1,101,097		1,090,400
Net Property, Plant and Equipment		930,876		913,738
Investments		200,807		162,069
Goodwill		165,212		158,533
Deferred Income Taxes		132,014		134,292
Investments in Unconsolidated Affiliates		69,238		62,241
Other Assets		231,585		223,113
TOTAL	$	4,452,065	$	4,411,486

McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
	March 31,			December 31,
	2008			2007
	(Unaudited)
	(In thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and current maturities of long-term debt	$	6,771		$	6,599
Accounts payable		453,757			455,659
Accrued employee benefits		264,503			343,812
Accrued liabilities – other		223,375			175,557
Accrued contract cost		117,534			93,281
Advance billings on contracts		1,379,739			1,463,223
Accrued warranty expense		105,726			101,330
Income taxes payable		53,267			57,071
Total Current Liabilities		2,604,672			2,696,532
Long-Term Debt		6,368			10,609
Accumulated Postretirement Benefit Obligation		93,791			96,253
Self-Insurance		86,083			82,525
Pension Liability		166,503			188,748
Other Liabilities		171,672			169,814
Commitments and Contingencies
Stockholders’ Equity:
Common stock, par value $1.00 per share, authorized 400,000,000 shares; issued 232,566,598 and 231,722,659 at March 31, 2008 and December 31, 2007, respectively		232,567			231,723
Capital in excess of par value		1,167,370			1,145,829
Retained earnings		258,479			135,289
Treasury stock at cost, 5,823,698 and 5,852,248 at March 31, 2008 and December 31, 2007, respectively		(63,806	)		(63,903	)
Accumulated other comprehensive loss		(271,634	)		(281,933	)
Total Stockholders’ Equity		1,322,976			1,167,005
TOTAL	$	4,452,065		$	4,411,486

McDERMOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended
	March 31,
	2008			2007
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	123,190		$	158,061
Non-cash items included in net income:
Depreciation and amortization		31,311			16,538
Income of investees, less dividends		(3,057	)		(319	)
Gains on asset disposals and impairments – net		(11,443	)		(1,635	)
Provision for deferred taxes		16,063			28,880
Amortization of pension and postretirement costs		10,137			11,863
Excess tax benefits from FAS 123(R) stock-based compensation		(5,346	)		(6,784	)
Other, net		10,727			6,164
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable		(75,109	)		(139,263	)
Net contracts in progress and advance billings on contracts		(103,241	)		125,833
Accounts payable		7,754			(15,937	)
Income taxes		2,150			(26,807	)
Accrued and other current liabilities		77,316			10,376
Pension liability, accumulated postretirement benefit obligation and accrued employee benefits		(104,121	)		(70,346	)
Other, net		(29,258	)		(22,040	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(52,927	)		74,584
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restricted cash and cash equivalents		(14,561	)		(7,886	)
Purchases of property, plant and equipment		(59,286	)		(45,504	)
Net (increase) decrease in available-for-sale securities		(88,633	)		55,864
Proceeds from asset disposals		11,921			2,203
Other, net		(820	)		167
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(151,379	)		4,844
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt		(4,385	)		(5,375	)
Issuance of common stock		2,845			2,471
Payment of debt issuance costs		(164	)		-
Excess tax benefits from FAS 123(R) stock-based compensation		5,346			6,784
NET CASH PROVIDED BY FINANCING ACTIVITIES		3,642			3,880
EFFECTS OF EXCHANGE RATE CHANGES ON CASH		(130	)		903
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(200,794	)		84,211
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,001,394			600,843
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	800,600		$	685,054
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized)	$	3,139		$	11,594
Income taxes (net of refunds)	$	30,058		$	21,487

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