McDermott International, Inc. (NYSE: MDR) (“McDermott” or the
“Company”) today reported net income of $118.1 million, or $0.50
per diluted share, for the 2009 third quarter, compared to $85.6
million, or $0.37 per diluted share, in the corresponding period of
2008. Weighted average common shares outstanding on a fully diluted
basis were approximately 234.3 million and 230.5 million in the
quarters ended September 30, 2009 and September 30, 2008,
respectively.
McDermott’s revenues in the third quarter of 2009 were $1,675.7
million, compared to $1,664.9 million in the corresponding period
in 2008. The year-over-year increase was due to revenue growth of
26 percent, or $212.0 million, in the Offshore Oil & Gas
Construction segment and approximately 17 percent, or $37.3
million, in the Government Operations segment, which was largely
offset by the decrease in the Power Generation Systems segment.
The Company’s operating income improved 57 percent to $144.8
million in the 2009 third quarter, compared to $92.0 million in the
2008 third quarter, despite a combined $45.1 million increase in
depreciation & amortization and pension expenses. Segment
income increased $126.2 million in the Offshore Oil & Gas
Construction segment compared to the 2008 third quarter, which more
than offset the year-over-year declines in the Company’s other
segments.
“I am exceptionally pleased with the strong results delivered by
the Offshore Oil & Gas Construction segment this quarter, as it
validates the management actions taken and demonstrates the benefit
of a high level of activity in the business. We are delighted that
the challenging Middle East pipelines are now complete,” said John
A. Fees, Chief Executive Officer of McDermott. “The results from
the Government Operations segment this quarter were off the mark,
and not indicative of our expectations for solid future periods. As
we expected, bookings were light, however the bidding activity
remained at a high level while the Company’s liquidity and balance
sheet continued to improve.”
At September 30, 2009, McDermott’s consolidated backlog was $8.5
billion, compared to $9.4 billion and $9.5 billion at September 30,
2008 and June 30, 2009, respectively.
RESULTS OF OPERATIONS
2009 Third Quarter Compared to 2008 Third Quarter
Offshore Oil & Gas
Construction Segment
Revenues in the Offshore Oil & Gas Construction segment were
$1,026.7 million in the 2009 third quarter, compared to $814.7
million for the same period a year ago. Increased revenues in the
Middle East and Caspian regions more than offset reduced levels in
other regions. Approximately 30 percent of the segment’s 2009 third
quarter revenues were derived from contracts in or near loss
positions.
Segment income for the 2009 third quarter was $106.5 million,
compared to a segment loss of $19.7 million in the 2008 third
quarter. Major areas contributing to third quarter 2009 segment
income include the Asia Pacific, Middle East, Caspian and Americas
regions.
At September 30, 2009, segment backlog was $3.9 billion,
compared to backlog of $5.0 billion and $4.7 billion at September
30, 2008 and June 30, 2009, respectively.
Power Generation Systems
Segment
Revenues in the Power Generation Systems segment for the third
quarter of 2009 were $389.6 million, compared to $631.0 million in
the third quarter of 2008. The year-over-year decrease was
predominantly due to reduced activity on customers’ major capital
projects, including new power plant construction and retrofits of
existing power plants.
Segment income for the 2009 third quarter was $34.2 million,
compared to $84.4 million in the 2008 third quarter. Major
activities contributing to third quarter 2009 segment income
include the supply and construction of new boilers and
environmental equipment, retrofit projects of existing facilities,
inspection and maintenance, and related aftermarket parts and
services.
At September 30, 2009, segment backlog was $2.1 billion,
compared to backlog of $2.8 billion and $2.2 billion at September
30, 2008 and June 30, 2009, respectively.
Government Operations
Segment
Revenues in the Government Operations segment were $259.8
million in the 2009 third quarter, compared to $222.4 million for
the same period a year ago. The increase in revenues, as compared
to the same period a year ago, was primarily due to activities in
the manufacture of nuclear components and nuclear fuels for certain
U.S. Government programs, including the revenues from Nuclear Fuel
Services, Inc., which was acquired in December 2008.
Segment income for the 2009 third quarter was $19.8 million,
compared to $34.6 million in the 2008 third quarter. Major items
contributing to third quarter 2009 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 September 30, 2009, segment backlog was $2.5 billion,
compared to backlog of $1.6 billion and $2.6 billion at September
30, 2008 and June 30, 2009, respectively.
Corporate & Other Income
and Expense
Unallocated corporate expenses were $15.7 million in the 2009
third quarter, compared to $7.3 million in the 2008 third quarter.
The year-over-year increase was predominantly due to increased
compensation, pension and information technology expenses.
The Company’s other expense for the third quarter of 2009 was
$0.9 million, compared to other income of $8.1 million in the third
quarter of 2008. The $9.0 million decline was predominantly due to
increased non-cash, foreign currency translation charges as well as
reduced net interest income.
Research & Development
Expense
Research & Development expense, net, was $12.8 million in
the 2009 third quarter, compared to $9.9 million in the 2008 third
quarter. Charged to cost of operations and predominantly in
McDermott’s Power Generation Systems segment, this expense includes
costs related to the development of carbon capture and
sequestration technologies and the Company’s modular and scalable
nuclear reactor business known as mPower.
Upcoming Investor
Events
Members of McDermott’s management team will participate in
KeyBanc Capital Markets’ 2nd Annual Engineering & Construction
Conference on November 19, 2009 in New York City. The presentation
to be used during these meetings will be available for a limited
time over the internet at www.mcdermott.com in the investor
relations section on the morning of the conference.
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 25,000 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, as well as the statement regarding the third
quarter 2009 results from the Government Operations segment not
being indicative of our expectations for future periods. 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 or credit markets, our inability to
successfully execute on contracts in backlog, changes in the scope
or timing of contracts in backlog and changes in laws and
regulations. 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 annual report on Form 10-K.
Conference Call to Discuss Third Quarter 2009
Earnings Release
Date:
Tuesday, November 10, 2009, at 10:00 a.m. ET (9:00 a.m. CT)
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 Nine Months Ended
September 30, September 30,
2009
2008
2009
2008
(Unaudited) (In thousands, except share and per share
amounts) Revenues $ 1,675,678
$ 1,664,851 $ 4,733,940 $ 4,907,923
Costs and Expenses: Cost of operations 1,383,046 1,445,749
3,886,726 4,067,181 Gains (losses) on asset disposals – net 323 138
(333 ) (11,322 ) Selling, general and administrative expenses
160,565 139,512
455,154 404,298 Total Costs and Expenses
1,543,934 1,585,399
4,341,547 4,460,157 Equity in
Income of Investees 13,050
12,521 31,347 32,443
Operating Income (Loss) 144,794
91,973 423,740 480,209
Other Income (Expense): Interest income – net 2,179 5,151 9,023
23,792 Other income (expense) – net (3,127 )
2,945 (24,098 ) 848 Total Other
Income (Expense) (948 ) 8,096
(15,075 ) 24,640 Income before
Provision for Income Taxes 143,846 100,069 408,665 504,849
Provision for Income Taxes 23,793
14,271 112,316 118,253
Net Income 120,053 85,798
296,349 386,596 Less: Net
Income Attributable to Noncontrolling Interest
(1,946 ) (227 ) (7,995 ) (296 ) Net
Income Attributable to McDermott International, Inc.
$ 118,107 $ 85,571 $ 288,354 $ 386,300
Earnings per Share: Basic: Net Income Attributable to
McDermott International, Inc. $ 0.51 $ 0.38 $ 1.26 $ 1.70 Diluted:
Net Income Attributable to McDermott International, Inc.
$ 0.50 $ 0.37 $ 1.24 $ 1.68
Shares used in the computation of earnings per share: Basic
229,989,368 227,440,858 229,192,531 226,645,175 Diluted 234,314,619
230,463,651 233,335,605 230,328,423
McDERMOTT INTERNATIONAL,
INC.
SELECTED SEGMENT
INFORMATION
Three Months Ended Nine Months Ended
September 30, September 30,
2009
2008
2009
2008
(Unaudited); (In thousands) REVENUES Offshore Oil and Gas
Construction $ 1,026,700 $ 814,701 $ 2,567,924 $ 2,332,918
Government Operations 259,752 222,434 778,254 638,792 Power
Generation Systems 389,638 630,955 1,389,802 1,945,324 Adjustments
and Eliminations (412 ) (3,239 )
(2,040 ) (9,111 ) TOTAL $
1,675,678 $ 1,664,851 $ 4,733,940
$ 4,907,923 SEGMENT INCOME Offshore Oil
and Gas Construction $ 106,525 $ (19,686 ) $ 219,365 $ 131,248
Government Operations 19,798 34,551 123,023 115,004 Power
Generation Systems 34,203
84,449 136,227 266,692
$ 160,526 $ 99,314
$ 478,615 $ 512,944 Corporate
(15,732 ) (7,341 )
(54,875 ) (32,735 ) OPERATING INCOME $
144,794 $ 91,973 $ 423,740
$ 480,209 EQUITY IN INCOME (LOSS) OF INVESTEES
(1) Offshore Oil and Gas Construction $ (596 ) $ (921 ) $ (2,797 )
$ (2,671 ) Government Operations 9,081 7,966 26,435 27,513 Power
Generation Systems 4,565
5,476 7,709 7,601
TOTAL $ 13,050 $ 12,521 $
31,347 $ 32,443
PENSION EXPENSE (1)
Offshore Oil and Gas Construction $ 2,198 $ 1,665 $ 6,561 $ 4,995
Government Operations 13,347 (207 ) 37,664 7,915 Power Generation
Systems 16,693 5,687 47,417 17,692 Corporate
5,021 667 14,191
2,132 TOTAL $ 37,259
$ 7,812 $ 105,833 $ 32,734
DEPRECIATION & AMORTIZATION (1) Offshore Oil and
Gas Construction $ 24,707 $ 19,765 $ 64,681 $ 60,769 Government
Operations 16,867 5,585 38,417 16,811 Power Generation Systems
4,444 5,672 13,398 16,567 Corporate 940
320 2,375
912 TOTAL $ 46,958 $ 31,342
$ 118,871 $ 95,059
RESEARCH & DEVELOPMENT, NET (1) $ 12,792
$ 9,912 $ 33,934 $ 28,671
CAPITAL EXPENDITURES
Offshore Oil and Gas Construction $
34,420
$ 54,982 $ 123,553 $ 149,528 Government Operations
11,710
2,554 25,707 8,484 Power Generation Systems
5,030
7,988 25,201 20,705 Corporate
9,661
3,467 15,746
10,667 TOTAL $
60,821
$ 68,991 $ 190,207 $
189,384 BACKLOG Offshore Oil and Gas Construction $
3,942,891 $ 4,955,818 $ 3,942,891 $ 4,955,818 Government Operations
2,539,252 1,641,969 2,539,252 1,641,969 Power Generation Systems
2,061,837 2,834,049
2,061,837 2,834,049
TOTAL $ 8,543,980 $ 9,431,836
$ 8,543,980 $ 9,431,836
(1) Included in Segment Income Above
McDERMOTT INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
ASSETS
September 30, December 31,
2009
2008
(Unaudited) (In thousands) Current
Assets: Cash and cash equivalents $ 784,463 $ 586,649 Restricted
cash and cash equivalents 64,050 50,536 Investments 16 131,515
Accounts receivable – trade, net 650,350 712,055 Accounts and notes
receivable – unconsolidated affiliates 4,461 1,504 Accounts
receivable – other 86,241 139,062 Contracts in progress 503,420
311,713 Inventories 116,195 128,383 Deferred income taxes 90,824
97,069 Other current assets 62,932
58,499 Total Current Assets
2,362,952 2,216,985 Property,
Plant and Equipment 2,440,113 2,234,050 Less accumulated
depreciation 1,250,990
1,155,191 Net Property, Plant and Equipment
1,189,123 1,078,859 Investments
241,908 319,170
Goodwill 292,369 298,265
Deferred Income Taxes 278,563
335,877 Investments in Unconsolidated
Affiliates 86,031 70,304
Other Assets 284,698
282,233 TOTAL $ 4,735,644
$ 4,601,693
McDERMOTT INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
LIABILITIES AND STOCKHOLDERS'
EQUITY
September 30, December 31, 2009
2008 (Unaudited) (In thousands) Current
Liabilities: Notes payable and current maturities of long-term debt
$ 5,288 $ 9,021 Accounts payable 531,398 551,435 Accrued employee
benefits 237,054 205,521 Accrued liabilities – other 194,667
217,486 Accrued contract cost 127,857 97,041 Advance billings on
contracts 708,086 951,895 Accrued warranty expense 122,904 120,237
Income taxes payable 69,855
55,709 Total Current Liabilities
1,997,109 2,208,345
Long-Term Debt 5,828
6,109 Accumulated Postretirement Benefit Obligation
106,255 107,567
Self-Insurance 84,465
88,312 Pension Liability
674,047 682,624 Other
Liabilities 142,842
192,223 Commitments and Contingencies
Stockholders’ Equity:
Common stock, par value $1.00 per
share, authorized 400,000,000 shares; issued 236,495,637 and
234,174,088 shares at September 30, 2009 and December 31, 2008,
respectively
236,496 234,174 Capital in excess of par value 1,287,764 1,252,848
Retained earnings 852,945 564,591
Treasury stock at cost, 6,103,951
and 5,840,314 shares at September 30, 2009 and December 31, 2008,
respectively
(67,773 ) (63,026 ) Accumulated other comprehensive loss
(590,565 ) (672,415 ) Stockholders’
Equity – McDermott International, Inc. 1,718,867 1,316,172
Noncontrolling interest 6,231
341 Total Stockholders’ Equity
1,725,098 1,316,513 TOTAL
$ 4,735,644 $ 4,601,693
McDERMOTT INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
2009
2008
(Unaudited) (In thousands) CASH FLOWS FROM OPERATING
ACTIVITIES: Net Income $ 296,349
$ 386,596 Non-cash items included in net income:
Depreciation and amortization 118,871 95,059 Income of investees,
less dividends (11,458 ) (12,592 ) Gains on asset disposals – net
(333 ) (11,322 ) Provision for deferred taxes 43,264 87,512
Amortization of pension and postretirement costs 68,877 28,424
Excess tax benefits from FAS 123(R) stock-based compensation 2,458
(6,404 ) Other, net 36,736 34,922 Changes in assets and
liabilities, net of effects of acquisitions and divestitures:
Accounts receivable 62,932 21,412 Income tax receivable 57,169
10,666 Net contracts in progress and advance billings on contracts
(442,373 ) (516,623 ) Accounts payable (22,099 ) 19,544 Income
taxes 10,571 (5,335 ) Accrued and other current liabilities (1,461
) 57,586 Pension liability, accumulated postretirement benefit
obligation and accrued employee benefits 13,961 (201,109 ) Other,
net (36,056 ) (95,421 )
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
197,408 (107,085 ) CASH FLOWS
FROM INVESTING ACTIVITIES: Increase in restricted cash and cash
equivalents (13,514 ) (3,731 ) Purchases of property, plant and
equipment (190,207 ) (189,384 ) Acquisition of businesses, net of
cash acquired (8,497 ) (33,731 ) Net decrease (increase) in
available-for-sale securities 208,435 (70,992 ) Proceeds from asset
disposals 2,724 12,023 Other, net (2,676 )
(2,029 ) NET CASH USED IN INVESTING ACTIVITIES
(3,735 ) (287,844 ) CASH
FLOWS FROM FINANCING ACTIVITIES: Payment of long-term debt (5,652 )
(4,660 ) Increase in short-term borrowing 1,606 2,920 Issuance of
common stock 713 8,069 Payment of debt issuance costs (56 ) (1,611
) Excess tax benefits from FAS 123(R) stock-based compensation
(2,458 ) 6,404 Other, net (109 )
- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
(5,956 ) 11,122
EFFECTS OF EXCHANGE RATE CHANGES ON CASH 10,097
(3,239 ) NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 197,814 (387,046 ) CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 586,649
1,001,394 CASH AND CASH
EQUIVALENTS AT END OF PERIOD $ 784,463
$ 614,348 SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION: Cash paid during the period for: Interest (net of
amount capitalized) $ 1,855 $ 5,967 Income taxes (net of refunds)
$ 93 $ 49,193
McDermott (NYSE:MDR)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
McDermott (NYSE:MDR)
Historical Stock Chart
Von Jul 2023 bis Jul 2024