Focus on Project Execution and Cost Management
has Driven a Significant Increase in Operational Profit in 2015
McDermott International, Inc. (NYSE:MDR) (“McDermott” or the
“Company”) today announced financial and operational results for
the fourth quarter and full-year ended December 31, 2015.
|
($ in millions, except
per share amounts) |
|
Three
Months Ended |
|
Delta |
|
Twelve
Months Ended |
|
Delta |
|
Dec. 31,
2015 |
|
Dec. 31, 2014 |
|
Qtr-on-Qtr |
|
Dec. 31,
2015 |
|
Dec. 31, 2014 |
|
Year-on-Year |
Revenues |
$ |
667.4 |
|
|
$ |
806.4 |
|
|
$ |
(139.0 |
) |
|
$ |
3,070.3 |
|
|
$ |
2,300.9 |
|
|
$ |
769.4 |
|
Adjusted Operating Income1 |
|
48.2 |
|
|
|
29.0 |
|
|
|
19.2 |
|
|
|
174.7 |
|
|
|
23.7 |
|
|
|
151.0 |
|
Adjusted Operating Margin1 |
|
7.2 |
% |
|
|
3.6 |
% |
|
|
3.6 |
% |
|
|
5.7 |
% |
|
|
1.0 |
% |
|
|
4.7 |
% |
Adjusted Net Income1 |
|
16.0 |
|
|
|
11.2 |
|
|
|
4.8 |
|
|
|
65.5 |
|
|
|
(60.8 |
) |
|
|
126.3 |
|
Adjusted Diluted EPS1 |
|
0.06 |
|
|
|
0.04 |
|
|
|
0.02 |
|
|
|
0.23 |
|
|
|
(0.26 |
) |
|
|
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by Operating Activities |
|
60.6 |
|
|
|
119.3 |
|
|
|
(58.7 |
) |
|
|
55.3 |
|
|
|
7.0 |
|
|
|
48.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
13.5 |
|
|
|
25.9 |
|
|
|
(12.4 |
) |
|
|
91.2 |
|
|
|
8.6 |
|
|
|
82.6 |
|
Operating Margin |
|
2.0 |
% |
|
|
3.2 |
% |
|
|
(1.2 |
%) |
|
|
3.0 |
% |
|
|
0.4 |
% |
|
|
2.6 |
% |
Net Income / (Loss) |
|
(18.7 |
) |
|
|
8.2 |
|
|
|
(26.9 |
) |
|
|
(18.0 |
) |
|
|
(76.0 |
) |
|
|
58.0 |
|
Diluted EPS |
|
(0.08 |
) |
|
|
0.03 |
|
|
|
(0.11 |
) |
|
|
(0.08 |
) |
|
|
(0.32 |
) |
|
|
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1) Adjustments to the GAAP financial
measures include restructuring charges in all quarters, charges
associated with a legal settlement in the third quarter of 2015 and
year-end mark-to-market pension adjustments in the fourth quarter
of each year. |
|
“We are very pleased with our fourth quarter and
2015 full year-results, as they reflect the impact of all the
initiatives we have worked on to date, and clearly demonstrate the
operational and financial turnaround that began in 2014. The
Company has been significantly strengthened, not only in terms of
backlog and operating income, but also in terms of its capabilities
and its competencies in an extremely challenging market. Of
special note this quarter, all Areas were operationally profitable
on an adjusted basis,” said David Dickson, President and Chief
Executive Officer of McDermott. “Our success in winning the
ONGC Vashishta award in addition to a sizeable transportation and
installation (“T&I”) contract offshore Trinidad demonstrates
our continued focus on customer engagement and the realization of
our strong brand reputation. It also demonstrates our ability
to balance the geographic portfolio while remaining a leader in the
Middle East. Additionally, our recently announced long-term,
mutually exclusive consortium with Larsen & Toubro further
strengthens our relationship, provides customers with our combined
capabilities and provides a unique solution for the offshore and
deepwater India market. Our commitment to excellence in
project execution was also evident during the quarter, as our
marine campaign on INPEX Ichthys remained on schedule, and we
successfully completed the offshore installation and hook up of the
PB Litoral Jacket and Topsides ahead of schedule. Subsequent
to year end we announced the April naming ceremony of our new
flagship derrick lay vessel, the DLV 2000, and its secured scope as
part of our current work schedule in INPEX Ichthys as well as the
new award of Greater Western Flank Phase 2, which builds on our
leading position in Australia and provides the DLV 2000 with its
first pipelay scope. Despite the current macro outlook we
hold greater than 80% of expected 2016 revenue in backlog, our
bidding activity remains high and we continue to anticipate a good
revenue opportunity pipeline. In addition, as we move into
2016, we welcome Erich Kaeser to McDermott’s Board of Directors,
whose experience and insights will complement the current Board.
”
Fourth Quarter 2015 Operating
Results
The Company realized fourth quarter 2015
adjusted net income of $16.0 million, or $0.06 per adjusted fully
diluted share, excluding restructuring charges of $8.7 million and
the year-end non-cash mark-to-market pension charge of $26.0
million, compared to an adjusted net income of $11.2 million, or
$0.04 per adjusted fully diluted share, excluding restructuring
charges of $6.0 million and the year-end non-cash mark-to-market
pension gain of $2.9 million in the prior-year fourth quarter.
Fourth quarter 2015 earnings per share attributable to
McDermott stockholders on a consolidated basis prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”) was a net loss of $18.7 million, or $0.08 per fully
diluted share, compared to earnings of $8.2 million, or $0.03 per
fully diluted share for the prior-year quarter.
The Company reported fourth quarter 2015
revenues of $667.4 million, a decrease of $139.0 million, compared
to revenues of $806.4 million for the prior-year fourth quarter.
The INPEX Ichthys project drove the decrease in revenue as it
had comparatively lower activity than the prior-year fourth quarter
which included significant marine activities, including the
installation of the riser support structure and the reeled pipe lay
scope. The key projects contributing to revenue for the
fourth quarter of 2015 were INPEX Ichthys, Aramco Safaniya Phase 2,
ADMA 4 Gas Injection, Brunei Shell pipeline replacement and PB
Litoral.
The Company’s adjusted operating income for the
fourth quarter 2015 was $48.2 million, or an adjusted operating
margin of 7.2%, excluding the adjustments mentioned above. These
results compare to the 2014 fourth quarter adjusted operating
income of $29.0 million, or an adjusted operating margin of 3.6%,
excluding the adjustments mentioned above. Operating income
for the fourth quarter 2015 was positively impacted by the
successful negotiation and agreement of weather related recoveries
in the Middle East, a change order on the INPEX Ichthys contract,
cost reductions as a result of the McDermott Profitability
Initiative (“MPI”), reversal of liquidated damage reserves related
to a schedule extension on PB Litoral and better than expected
utilization. These positive impacts were partially offset by
idle costs associated with some of our marine vessels and
fabrication facilities due to project sequencing and
seasonality.
Cash provided by operating activities in the
fourth quarter 2015 was $60.6 million, a decrease compared to the
$119.3 million provided in the fourth quarter 2014. The
fourth quarter 2015 was negatively impacted by Pemex unilaterally
extending payment terms to its suppliers, including
McDermott.
Full-Year 2015 Operating Results
For the full-year ended December 31, 2015, the
Company realized adjusted net income of $65.5 million, or $0.23 per
adjusted fully diluted share, excluding restructuring charges of
$40.8 million, a legal settlement of $16.7 million and the
year-end non-cash mark-to-market pension charge of $26.0 million,
compared to an adjusted net loss of $60.8 million, or $0.26 per
fully diluted share, excluding restructuring charges of $18.1
million and the year-end non-cash mark-to-market pension gain of
$2.9 million in the prior-year. Consolidated GAAP full-year
2015 results were a net loss of $18.0 million, or $0.08 per fully
diluted share, compared to a net loss of $76.0 million, or $0.32
per fully diluted share in the prior-year.
The Company reported revenues of $3.1 billion
for the year ended December 31, 2015, an increase of $0.8 billion,
compared to $2.3 billion for the year ended December 31, 2014. The
increase was primarily attributable to progress on INPEX Ichthys,
Brunei Shell pipeline replacement and PB Litoral.
The Company reported full-year adjusted
operating income of $174.7 million, or an adjusted operating margin
of 5.7%, excluding the adjustments mentioned above. These results
compare to the full-year 2014 adjusted operating income of $23.7
million, or an adjusted operating margin of 1.0%, excluding the
adjustments mentioned above and including $46.2 million of gains on
asset sales. Operating income for the full-year was
positively impacted by significantly improved project execution,
including on the INPEX Ichthys project, where activities remained
on schedule, continued progress made on multiple Saudi Aramco
projects and installation and hook up of the PB Litoral facilities
ahead of schedule.
Cash provided by operating activities in the
full-year 2015 was $55.3 million, an increase compared to the $7.0
million provided in the full-year 2014.
The calculations of total and per share adjusted
net income and adjusted operating income are shown in the appendix
titled “Reconciliation of GAAP to Non-GAAP Financial Measures.”
Area Operational Review
|
($ in millions, except
per share amounts) |
|
Three
Months Ended December 31, 2015 |
|
AEA |
|
MEA |
|
ASA |
|
MDR |
New Orders |
$ |
93 |
|
|
$ |
36 |
|
|
$ |
349 |
|
|
$ |
478 |
|
Revenue |
|
134 |
|
|
|
242 |
|
|
|
291 |
|
|
|
667 |
|
Book-to-Bill |
|
0.7x |
|
|
|
0.1x |
|
|
|
1.2x |
|
|
|
0.7x |
|
Adjusted Operating Income |
|
8 |
|
|
|
32 |
|
|
|
8 |
|
|
|
48 |
|
Adjusted Operating Margin |
|
5.9 |
% |
|
|
13.2 |
% |
|
|
2.7 |
% |
|
|
7.2 |
% |
Capex |
|
7 |
|
|
|
11 |
|
|
|
19 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
(20 |
) |
|
|
33 |
|
|
|
3 |
|
|
|
14 |
|
Operating Margin |
|
(14.6 |
%) |
|
|
13.8 |
% |
|
|
1.1 |
% |
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas, Europe and Africa (“AEA”) new orders
increased from the sequential quarter, mainly due to two SURF
awards, one in the U.S. Gulf of Mexico (“GoM”) and one offshore
Trinidad. The Area’s revenue was primarily driven by high
activity on PB Litoral. The installation of the PB Litoral
facilities was completed offshore Mexico with the installation of
the 7200-ton main deck marking the first use of the ‘floatover’
method for installation in Mexico by the Company, which was
successfully completed without incident. The final hookup,
commissioning and start-up is ongoing and is expected to be
complete during the first quarter of 2016. Material deliveries for
Ayatsil ‘C’ have started to arrive in the Altamira fabrication yard
and assembly activities for the jacket have commenced. During the
fourth quarter the Company’s spoolbase facility in Gulfport,
Mississippi was handed over to operations for the LLOG Otis
pipelines. On the Exxon Julia project, McDermott’s North Ocean 102
(“NO 102”) vessel successfully executed the umbilical and power
cable installation phase and the Derrick Barge 50 (“DB50”)
completed the second phase of structure installations. The final
phase of the Exxon Julia project is well progressed and the DB50 is
scheduled to return to the field early in the first quarter of 2016
for the final installation work.
Middle East (“MEA”) new orders decreased from
the sequential quarter, due to the Aramco Lump Sum mega award in
the third quarter 2015. The Saudi Aramco Karan 45 project has
progressed ahead of schedule and the Abu Ali cables project
completed ahead of schedule, earning both project teams special
commendations from the customer. The Manifa Field Development
project offshore installation scope was also successfully completed
in the period. Execution of the lump sum project awarded under the
second, recently executed Saudi Aramco Long Term Agreement (LTA II)
is now proceeding according to schedule. Fabrication of the 12
Jackets remained on track with timely completion and load-out of
three jackets ready for installation in the first quarter of 2016.
Following the successful loadout and trans-spooling of the longest
(54 miles) 115kV submarine composite cable in the area for the
Marjan Power Systems project, installation is expected to take
place in the first quarter of 2016. Notable achievements in safety
were the Jebel Ali yard reaching 30 million man hours lost time
incident (“LTI”) free earlier in 2015, and HSES performance levels
remaining high through the fourth quarter with zero LTIs to report,
both onshore and offshore.
Asia (“ASA”) new orders increased from the
sequential quarter, primarily due to the Company’s re-entry into
the deepwater, subsea market in India with the ONGC Vashishta award
to a consortium with Larsen & Toubro (“L&T”) which is
expected to provide the best in-market execution solution. In
addition, subsequent to year-end we entered into a long-term,
mutually exclusive agreement with L&T which will provide a
strategic relationship to address significant offshore and
deepwater opportunities in offshore India. On our existing
project, INPEX Ichthys, we achieved all of the agreed-upon
milestones during the quarter with the project remaining on
schedule. In addition, the Company has completed the majority
of the INPEX Ichthys project fabrication in the Company’s Batam
yard. The project’s HSE performance continues to be strong,
achieving over 700 thousand man-hours in the fourth quarter without
an LTI. The Company has successfully completed all of the offshore
works on the complex Brunei Shell pipeline replacement project. The
Derrick Barge 30 (“DB30”) completed 7.8 miles of the operationally
challenging Corrosion Resistant Alloy (“CRA”) pipelaying including
all the pre-commissioning work. The Emerald Sea completed laying,
termination and testing of all subsea umbilicals (total 8.0 miles)
and subsea cable (total 6.8 miles). All the marine vessel spreads
were demobilized in December 2015. The project required over 2.5
million man-hours and involved approximately 2,800 people working
offshore for the 2015 campaign. In the Batam yard, the Company has
commenced fabrication of the Yamal LNG onshore modules weighing
22,000 tons.
The DLV 2000 is scheduled for delivery early
April with a naming ceremony planned in mid-April at Keppel’s
Singmarine Shipyard in Singapore. The vessel has secured
scope as part of the current McDermott work schedule for over
eighty days on the 2016 marine campaign on the INPEX Ichthys
project. In addition, the Company was recently awarded the
Woodside Greater Western Flank Phase 2 transportation and
installation project, on which the DLV 2000 will perform its first
pipelay work.
Cost Structure Progress
McDermott Profitability Initiative (“MPI”) was
substantially completed during the fourth quarter 2015, with the
move from Singapore to Kuala Lumpur and finalizing of sourcing
initiatives due to be completed in the first half of 2016.
MPI achieved 2015 in-year cash savings of approximately $115
million, with future annual cash savings expected to be at least
$150 million.
In addition, the Company continued its efforts
to proactively improve its cost structure by initiating the
efficiency driven Additional Overhead Reduction (“AOR”) program
during fourth quarter 2015. AOR actions are expected to be
substantially complete in the first quarter of 2016, and include
personnel reductions affecting direct operating expense and
SG&A. Similar to MPI, the objective of AOR is to further
address fixed costs while maintaining the capability and capacity
potential of the Company. The Company anticipates annualized
cash savings of approximately $25 million, and restructuring costs
of $5 million in 2016.
The Company’s restructuring costs for the fourth
quarter 2015 were $8.7 million and are expected to be approximately
$10 million for the full-year 2016 as a result of remaining MPI
actions as well as the AOR program. The Company has
successfully amended its principal credit facility to allow for the
add-back of post 2015 restructuring costs in the calculation of
covenant EBITDA up to a maximum of $25 million.
Contract Backlog and Bid Pipeline
Summary
($ in billions) |
|
Three
Months Ended December 31, 2015 |
|
AEA |
|
MEA |
|
ASA |
|
MDR |
Backlog |
$ |
0.3 |
|
|
$ |
2.6 |
|
|
$ |
1.3 |
|
|
$ |
4.2 |
|
Bids & Change Orders Outstanding |
|
1.0 |
|
|
|
2.3 |
|
|
|
1.1 |
|
|
|
4.4 |
|
Targets |
|
6.3 |
|
|
|
4.7 |
|
|
|
4.2 |
|
|
|
15.2 |
|
Total Revenue Pipeline |
|
7.6 |
|
|
|
9.6 |
|
|
|
6.6 |
|
|
|
23.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015, the Company’s backlog
was $4.2 billion, compared to $4.4 billion at September 30, 2015.
Of the December 31, 2015 backlog, approximately 69% is related to
offshore operations and approximately 31% is related to subsea
operations. Order intake in the fourth quarter 2015 totaled $478
million, including the awards of the ONGC Vashishta and the
offshore Trinidad installation project, resulting in a book-to-bill
ratio of 0.7x.
At December 31, 2015, the Company had bids
outstanding and target projects of approximately $19.6 billion in
projects that it expects to be awarded in the market through March
31, 2017. In total, the Company’s potential revenue pipeline,
including backlog, was $23.8 billion as of December 31,
2015.
2016 Outlook
($ in millions, except per
share amounts, or as indicated) |
|
FY'16
Guidance |
Revenues |
~2.9B |
Adjusted Operating Income |
~115 |
Net Interest Expense1 |
~64 |
Income Tax Expense |
~55 |
Adjusted Net Income |
~0 |
Adjusted Diluted EPS |
~0.00 |
Adjusted EBITDA |
~240 |
|
|
Restructuring Expense |
~10 |
Cash Interest / DIC Amortization Interest |
~60 / ~14 |
Covenant EBITDA - TTM2 |
~285 |
Capex1 |
~260 |
Ending Cash and Restricted Cash |
~580 |
Ending Gross Debt |
~840 |
Free Cash Flow |
~(160) |
|
|
1) Net Interest Expense has been
reduced by ~$10M for capitalized interest included in Capex. |
2) Exceeds minimum covenant EBITDA
required under the Credit Facility of $251 million before use of
$28 million available add-back. ~ = approximately |
|
Our full-year 2016 guidance is based on our
current view of the business outlook; however, given the macro
commodity environment we may see pressure from potential customer
capital expenditure spending delays, stronger competitive pricing
pressure given contraction in certain markets and lower utilization
of our assets. For now, McDermott will continue to
concentrate on our highest value proposition opportunities,
executing well our existing backlog, customer alignment, our asset
utilization and cost/liquidity management. The Company
previously provided 2016 guidance in connection with our Investor
Day held in November; however, the guidance given at that time was
on a GAAP basis, and did not include savings and charges expected
to be realized in connection with the Company’s AOR program.
The calculations of total and per share adjusted
net income, adjusted operating income and free cash flow are shown
in the appendix titled “Reconciliation of Forecast GAAP Financials
to Non-GAAP Financial Measures.”
Other Financial Information
Weighted average common shares outstanding on a
fully diluted basis were approximately 238.7 million and 284.1
million for the quarters ended December 31, 2015 and 2014,
respectively and 238.2 million and 237.2 million for the years
ended December 31, 2015 and 2014, respectively. Common shares for
the settlement of the common stock purchase contracts related to
the Tangible Equity Units (“TEUs”) representing 40.9 million
additional shares, as well as other potentially dilutive shares,
were not included in the calculation of diluted weighted average
shares for the quarter and year ended December 31, 2015, as well as
the year ended December 31, 2014, due to their anti-dilutive
effect. For the quarter ended December 31, 2014, the
TEUs and other dilutive shares were included in the fully diluted
share count due to the Company’s positive net income
position. For the quarter and year ended December 31, 2015
and the quarter ended December 31, 2014 the TEUs and other dilutive
shares were included in the fully diluted share count for adjusted
earnings per share measures. For the year ended December 31,
2014, the TEUs and other dilutive shares were not included in the
fully diluted share count due to their anti-dilutive effect.
Conference Call
McDermott has scheduled a conference call and
webcast related to its fourth quarter and full-year 2015 results
today at 4:00 p.m. U.S. Central Time. Interested parties may
listen over the Internet through a link posted in the Investor
Relations section of the Company’s Web site. A replay of the
webcast will be available for seven days after the call and may be
accessed by dialing (855) 539-0893, Passcode #22579208. In
addition, a presentation will be available on the Investor
Relations section of the Company’s Web site that contains
supplemental information on the Company’s financials, operations
and business outlook.
About the Company
McDermott is a leading provider of integrated
engineering, procurement, construction and installation (EPCI) and
module fabrication services for upstream field developments
worldwide. The Company delivers fixed and floating production
facilities, pipelines, installations and subsea systems from
concept to commissioning for complex Offshore and Subsea oil and
gas projects to help oil companies safely produce and transport
hydrocarbons. Our clients include national and major energy
companies. Operating in approximately 20 countries across the
world, our locally focused and globally integrated resources
include approximately 10,600 employees, a diversified fleet of
specialty marine construction vessels, fabrication facilities and
engineering offices. We are renowned for our extensive knowledge
and experience, technological advancements, performance records,
superior safety and commitment to deliver. McDermott has
served the energy industry since 1923 and is listed on the New York
Stock Exchange.
To learn more, please visit our website at
www.mcdermott.com
NON-GAAP Measures
This press release includes several “non-GAAP”
financial measures as defined under Regulation G of the U.S.
Securities Exchange Act of 1934, as amended. We report our
financial results in accordance with U.S. generally accepted
accounting principles, but believe that certain non-GAAP financial
measures provide useful supplemental information to investors
regarding the underlying business trends and performance of our
ongoing operations and are useful for period-over-period
comparisons of those operations. The non-GAAP measures we have
presented in this press release include non-GAAP Adjusted Operating
Income (Loss), non-GAAP Adjusted Operating Margin, the total
and diluted per share amounts of non-GAAP Adjusted Net Income
(Loss) attributable to the Company, EBITDA, Covenant EBITDA and
Free Cash Flow. These non-GAAP financial measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the financial measures prepared in accordance with
GAAP.
Reconciliations of these non-GAAP financial
measures to the most comparable GAAP measures are provided in the
supplemental information set forth at the end of this press
release.
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, contingencies and uncertainties that may impact
McDermott's actual results of operations. These forward-looking
statements include, but are not limited to, statements about
backlog, bids outstanding, target projects and revenue pipeline, to
the extent these may be viewed as indicators of future revenues or
profitability, the expected value, scope, execution and timing of
projects discussed, the expected timing of delivery of the DLV
2000, future annual cash savings to be realized from the McDermott
Profitability Initiative, the expected savings and costs related to
the Additional Overhead Reduction program, McDermott’s earnings and
other guidance for the full year of 2016 and 2016 outlook.
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 risks, contingencies and uncertainties,
including, among others: adverse changes in the markets in which we
operate or credit markets, our inability to successfully execute on
contracts in backlog, changes in project design or schedules, the
availability of qualified personnel, changes in the terms, scope or
timing of contracts, contract cancellations, change orders and
other modifications and actions by our customers and business
partners, changes in industry norms and adverse outcomes in legal
or other dispute resolution proceedings. If one or more of
these risks materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from those
expected. You should not place undue reliance on
forward-looking statements. 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 for the year ended December 31,
2015. This press release reflects management's views as of
the date hereof. Except to the extent required by applicable law,
McDermott undertakes no obligation to update or revise any
forward-looking statement.
McDERMOTT INTERNATIONAL, INC. |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
(In thousands) |
|
Revenues |
$ |
667,418 |
|
|
$ |
806,400 |
|
|
$ |
3,070,275 |
|
|
$ |
2,300,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations |
|
569,342 |
|
|
|
718,951 |
|
|
|
2,691,284 |
|
|
|
2,113,013 |
|
Selling, general and administrative
expenses |
|
73,106 |
|
|
|
51,475 |
|
|
|
217,239 |
|
|
|
208,564 |
|
Impairment loss (recovery) |
|
- |
|
|
|
1,662 |
|
|
|
6,808 |
|
|
|
(9,002 |
) |
Loss (gains) on asset
disposals |
|
- |
|
|
|
161 |
|
|
|
1,443 |
|
|
|
(46,201 |
) |
Restructuring expenses |
|
8,693 |
|
|
|
6,001 |
|
|
|
40,819 |
|
|
|
18,113 |
|
Total costs and expenses |
|
651,141 |
|
|
|
778,250 |
|
|
|
2,957,593 |
|
|
|
2,284,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Investments
in Unconsolidated Affiliates |
|
(2,738 |
) |
|
|
(2,201 |
) |
|
|
(21,486 |
) |
|
|
(7,848 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
13,539 |
|
|
|
25,949 |
|
|
|
91,196 |
|
|
|
8,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
(11,879 |
) |
|
|
(10,346 |
) |
|
|
(50,058 |
) |
|
|
(60,877 |
) |
Gain (loss) on foreign currency,
net |
|
434 |
|
|
|
7,091 |
|
|
|
(464 |
) |
|
|
7,234 |
|
Other income (expense), net |
|
1,350 |
|
|
|
(128 |
) |
|
|
2,450 |
|
|
|
(232 |
) |
Total other expense |
|
(10,095 |
) |
|
|
(3,383 |
) |
|
|
(48,072 |
) |
|
|
(53,875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes and noncontrolling interests |
|
3,444 |
|
|
|
22,566 |
|
|
|
43,124 |
|
|
|
(45,321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
21,459 |
|
|
|
10,332 |
|
|
|
51,963 |
|
|
|
20,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
(18,015 |
) |
|
|
12,234 |
|
|
|
(8,839 |
) |
|
|
(65,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net income attributable to
noncontrolling interest |
|
653 |
|
|
|
4,059 |
|
|
|
9,144 |
|
|
|
10,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to McDermott International, Inc. |
$ |
(18,668 |
) |
|
$ |
8,175 |
|
|
$ |
(17,983 |
) |
|
$ |
(75,994 |
) |
McDERMOTT INTERNATIONAL, INC. |
|
EARNINGS PER SHARE COMPUTATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
(In thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to McDermott International, Inc. |
$ |
(18,668 |
) |
|
$ |
8,175 |
|
|
$ |
(17,983 |
) |
|
$ |
(75,994 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares (basic) |
|
238,670,881 |
|
|
|
237,130,209 |
|
|
|
238,240,763 |
|
|
|
237,229,086 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity units |
|
- |
|
|
|
40,896,300 |
|
|
|
- |
|
|
|
- |
|
Stock options, restricted stock and
restricted stock units |
|
- |
|
|
|
6,114,944 |
|
|
|
- |
|
|
|
- |
|
Adjusted weighted
average common shares and assumed exercises of stock options and
vesting of stock awards (diluted) |
|
238,670,881 |
|
|
|
284,141,453 |
|
|
|
238,240,763 |
|
|
|
237,229,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to McDermott International, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
$ |
(0.08 |
) |
|
$ |
0.03 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.32 |
) |
Diluted: |
$ |
(0.08 |
) |
|
$ |
0.03 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.32 |
) |
SUPPLEMENTARY DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
(In thousands) |
|
Depreciation &
amortization expense |
$ |
24,352 |
|
|
$ |
24,530 |
|
|
$ |
100,334 |
|
|
$ |
93,185 |
|
Drydock
amortization |
|
4,037 |
|
|
|
4,152 |
|
|
|
17,947 |
|
|
|
19,719 |
|
Capital
expenditures |
|
36,733 |
|
|
|
104,661 |
|
|
|
102,851 |
|
|
|
321,187 |
|
Backlog |
|
4,231,447 |
|
|
|
3,600,999 |
|
|
|
4,231,447 |
|
|
|
3,600,999 |
|
McDERMOTT INTERNATIONAL, INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
December 31,2015 |
|
|
December 31,2014 |
|
|
|
(In thousands, except share and per share
amounts) |
|
Assets |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
664,844 |
|
|
$ |
665,309 |
|
Restricted cash and cash
equivalents |
|
|
116,801 |
|
|
|
187,585 |
|
Accounts receivable – trade,
net |
|
|
208,474 |
|
|
|
143,370 |
|
Accounts receivable –
other |
|
|
66,689 |
|
|
|
79,915 |
|
Contracts in progress |
|
|
435,829 |
|
|
|
357,617 |
|
Deferred income taxes |
|
|
8,133 |
|
|
|
7,514 |
|
Other current assets |
|
|
34,641 |
|
|
|
46,071 |
|
Total Current Assets |
|
|
1,535,411 |
|
|
|
1,487,381 |
|
Property, Plant and
Equipment |
|
|
2,467,352 |
|
|
|
2,487,815 |
|
Less accumulated depreciation |
|
|
(856,493 |
) |
|
|
(830,467 |
) |
Net Property, Plant and
Equipment |
|
|
1,610,859 |
|
|
|
1,657,348 |
|
Accounts Receivable –
Long-Term Retainages |
|
|
155,061 |
|
|
|
137,468 |
|
Investments in
Unconsolidated Affiliates |
|
|
26,551 |
|
|
|
38,186 |
|
Deferred Income
Taxes |
|
|
10,689 |
|
|
|
17,313 |
|
Other Assets |
|
|
48,505 |
|
|
|
79,183 |
|
Total Assets |
|
$ |
3,387,076 |
|
|
$ |
3,416,879 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Notes payable and current
maturities of long-term debt |
|
$ |
24,882 |
|
|
$ |
23,678 |
|
Accounts payable |
|
|
279,821 |
|
|
|
219,384 |
|
Accrued liabilities |
|
|
330,943 |
|
|
|
369,749 |
|
Advance billings on contracts |
|
|
164,773 |
|
|
|
199,865 |
|
Deferred income taxes |
|
|
17,273 |
|
|
|
19,753 |
|
Income taxes payable |
|
|
23,787 |
|
|
|
25,165 |
|
Total Current Liabilities |
|
|
841,479 |
|
|
|
857,594 |
|
Long-Term Debt |
|
|
819,001 |
|
|
|
840,791 |
|
Self-Insurance |
|
|
18,653 |
|
|
|
17,026 |
|
Pension Liability |
|
|
24,066 |
|
|
|
18,403 |
|
Non-current Income
Taxes |
|
|
52,559 |
|
|
|
49,229 |
|
Other Liabilities |
|
|
84,597 |
|
|
|
94,722 |
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
Stockholders'
Equity: |
|
|
|
|
|
|
|
|
Common stock, par value $1.00 per
share, authorized 400,000,000 shares; issued 246,841,128 and
245,209,850 shares, respectively |
|
|
246,841 |
|
|
|
245,210 |
|
Capital in excess of
par value (including prepaid common stock purchase contracts) |
|
1,687,059 |
|
|
|
1,676,815 |
|
Accumulated Deficit |
|
|
(260,884 |
) |
|
|
(239,572 |
) |
Treasury stock, at cost: 7,824,204
and 7,400,027 shares, respectively |
|
|
(92,262 |
) |
|
|
(96,441 |
) |
Accumulated other comprehensive
loss |
|
|
(93,955 |
) |
|
|
(97,808 |
) |
Stockholders' Equity - McDermott
International, Inc. |
|
|
1,486,799 |
|
|
|
1,488,204 |
|
Noncontrolling interest |
|
|
59,922 |
|
|
|
50,910 |
|
Total Equity |
|
|
1,546,721 |
|
|
|
1,539,114 |
|
Total Liabilities and Equity |
|
$ |
3,387,076 |
|
|
$ |
3,416,879 |
|
McDERMOTT INTERNATIONAL, INC. |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|
|
(In thousands) |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(8,839 |
) |
|
$ |
(65,394 |
) |
|
$ |
(489,910 |
) |
Non-cash items included
in net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
100,334 |
|
|
|
93,185 |
|
|
|
84,580 |
|
Drydock amortization |
|
|
17,947 |
|
|
|
19,719 |
|
|
|
18,467 |
|
Loss (gain) on asset
impairments |
|
|
6,808 |
|
|
|
(9,002 |
) |
|
|
84,482 |
|
Stock-based compensation
charges |
|
|
16,593 |
|
|
|
18,565 |
|
|
|
21,100 |
|
Loss from investments in
unconsolidated affiliates |
|
|
21,486 |
|
|
|
7,848 |
|
|
|
16,116 |
|
Loss (gain) on foreign
currency-net |
|
|
6,238 |
|
|
|
(10,310 |
) |
|
|
(13,247 |
) |
Restructuring expense (gain) |
|
|
7,473 |
|
|
|
(2,310 |
) |
|
|
18,044 |
|
Loss (gain) on asset disposals |
|
|
1,443 |
|
|
|
(46,201 |
) |
|
|
(15,200 |
) |
Deferred income taxes |
|
|
3,525 |
|
|
|
891 |
|
|
|
(5,359 |
) |
Pension expense |
|
|
19,821 |
|
|
|
(4,291 |
) |
|
|
(3,865 |
) |
Debt issuance cost
amortization |
|
|
12,767 |
|
|
|
22,915 |
|
|
|
3,715 |
|
Other non-cash items |
|
|
1,269 |
|
|
|
686 |
|
|
|
(2,164 |
) |
Changes in assets and
liabilities that provided (used) cash: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(82,697 |
) |
|
|
166,385 |
|
|
|
30,156 |
|
Contracts in progress net of
advance billings on contracts |
|
|
(113,338 |
) |
|
|
(10,695 |
) |
|
|
171,397 |
|
Accounts payable |
|
|
78,646 |
|
|
|
(154,439 |
) |
|
|
(17,493 |
) |
Accrued and other current
liabilities |
|
|
(33,969 |
) |
|
|
(2,801 |
) |
|
|
(22,155 |
) |
Pension liability |
|
|
(1,506 |
) |
|
|
(1,861 |
) |
|
|
(30,828 |
) |
Income taxes |
|
|
1,778 |
|
|
|
(4,668 |
) |
|
|
(54,431 |
) |
Other assets and liabilities |
|
|
(507 |
) |
|
|
(11,262 |
) |
|
|
(50,016 |
) |
Total cash provided by
(used in) operating activities |
|
|
55,272 |
|
|
|
6,960 |
|
|
|
(256,611 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment |
|
|
(102,851 |
) |
|
|
(321,187 |
) |
|
|
(283,962 |
) |
(Increase) decrease in
restricted cash and cash equivalents |
|
|
70,784 |
|
|
|
(163,933 |
) |
|
|
(5,536 |
) |
Purchases of
available-for-sale securities |
|
|
- |
|
|
|
(3,695 |
) |
|
|
(10,535 |
) |
Sales and maturities of
available-for-sale securities |
|
|
3,176 |
|
|
|
12,978 |
|
|
|
43,959 |
|
Investments in
unconsolidated affiliates |
|
|
(7,038 |
) |
|
|
(2,420 |
) |
|
|
(9,354 |
) |
Proceeds from asset
dispositions |
|
|
10,724 |
|
|
|
71,961 |
|
|
|
37,386 |
|
Other investing
activities |
|
|
417 |
|
|
|
(2,706 |
) |
|
|
(3,113 |
) |
Total cash used in
investing activities |
|
|
(24,788 |
) |
|
|
(409,002 |
) |
|
|
(231,155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from debt |
|
|
- |
|
|
|
1,328,875 |
|
|
|
296,000 |
|
Repayment of debt |
|
|
(26,938 |
) |
|
|
(298,534 |
) |
|
|
(310,146 |
) |
Issuance of common
stock |
|
|
682 |
|
|
|
327 |
|
|
|
68 |
|
Repurchase of common
stock |
|
|
(1,720 |
) |
|
|
(1,707 |
) |
|
|
(1,106 |
) |
Payment of debt
issuance costs |
|
|
(170 |
) |
|
|
(39,112 |
) |
|
|
(4,905 |
) |
Distributions to
noncontrolling interests |
|
|
- |
|
|
|
(6,352 |
) |
|
|
(13,743 |
) |
Acquisition of
noncontrolling interest |
|
|
(24 |
) |
|
|
(32,943 |
) |
|
|
- |
|
Total cash provided by
(used in) financing activities |
|
|
(28,170 |
) |
|
|
950,554 |
|
|
|
(33,832 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of
exchange rate changes on cash and cash equivalents |
|
|
(2,779 |
) |
|
|
(1,905 |
) |
|
|
153 |
|
Net increase (decrease) in cash and cash
equivalents |
|
|
(465 |
) |
|
|
546,607 |
|
|
|
(521,445 |
) |
Cash and cash equivalents at beginning of
year |
|
|
665,309 |
|
|
|
118,702 |
|
|
|
640,147 |
|
Cash and cash equivalents at end of
year |
|
$ |
664,844 |
|
|
$ |
665,309 |
|
|
$ |
118,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Information: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for: |
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (net of refunds) |
|
$ |
40,560 |
|
|
$ |
26,661 |
|
|
$ |
105,444 |
|
Cash paid for interest, net of
amounts capitalized |
|
|
40,690 |
|
|
|
28,390 |
|
|
|
- |
|
Supplemental
Disclosure of Noncash Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investment in
unconsolidated affiliates |
|
|
2,396 |
|
|
|
- |
|
|
|
- |
|
Capital lease |
|
|
- |
|
|
|
3,407 |
|
|
|
- |
|
Supplemental
Disclosure of Noncash Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash acquisition of
noncontrolling interest |
|
|
- |
|
|
|
11,136 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McDERMOTT INTERNATIONAL,
INCRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
McDermott reports our financial results in
accordance with the U.S. generally accepted accounting principles
(“GAAP”). This press release also includes several Non-GAAP1
financial measures as defined under the SEC’s Regulation G. The
following table reconciles Non-GAAP financial measures to
comparable GAAP financial measures:
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
(In thousands,
except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income (Loss) Attributable to the Company |
$ |
(18,668 |
) |
|
$ |
8,175 |
|
|
$ |
(17,983 |
) |
|
$ |
(75,994 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges2 |
|
8,693 |
|
|
|
6,001 |
|
|
|
40,819 |
|
|
|
18,113 |
|
Non-cash actuarial loss (gain) on
benefit plans3 |
|
26,013 |
|
|
|
(2,938 |
) |
|
|
26,013 |
|
|
|
(2,938 |
) |
Legal settlement4 |
|
- |
|
|
|
- |
|
|
|
16,682 |
|
|
|
- |
|
Total Non-GAAP Adjustments |
|
34,706 |
|
|
|
3,063 |
|
|
|
83,514 |
|
|
|
15,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
Net Income (Loss) Attributable to the Company |
$ |
16,038 |
|
|
$ |
11,238 |
|
|
$ |
65,531 |
|
|
$ |
(60,819 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income |
$ |
13,539 |
|
|
$ |
25,949 |
|
|
$ |
91,196 |
|
|
$ |
8,554 |
|
Non-GAAP Adjustments |
|
34,706 |
|
|
|
3,063 |
|
|
|
83,514 |
|
|
|
15,175 |
|
Non-GAAP Adjusted
Operating Income |
$ |
48,245 |
|
|
$ |
29,012 |
|
|
$ |
174,710 |
|
|
$ |
23,729 |
|
Non-GAAP
Adjusted Operating Income Margin |
|
7.2 |
% |
|
|
3.6 |
% |
|
|
5.7 |
% |
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
EPS |
$ |
(0.08 |
) |
|
$ |
0.03 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.32 |
) |
Non-GAAP Adjustments |
|
0.14 |
|
|
|
0.01 |
|
|
|
0.31 |
|
|
|
0.06 |
|
Non-GAAP Diluted
EPS |
$ |
0.06 |
|
|
$ |
0.04 |
|
|
$ |
0.23 |
|
|
$ |
(0.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
238,670,881 |
|
|
|
237,130,209 |
|
|
|
238,240,763 |
|
|
|
237,229,086 |
|
Diluted |
|
282,701,538 |
|
|
|
284,141,453 |
|
|
|
281,531,013 |
|
|
|
237,229,086 |
|
|
|
Three Months
Ended |
|
|
December 31,
2015 |
|
|
AEA |
|
|
MEA |
|
|
ASA |
|
|
Corporate |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
|
134,415 |
|
|
$ |
|
242,188 |
|
|
$ |
|
290,815 |
|
|
$ |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
(Loss) |
|
|
(19,616 |
) |
|
|
|
33,275 |
|
|
|
|
3,290 |
|
|
|
|
(3,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin |
|
|
(14.6 |
%) |
|
|
|
13.8 |
% |
|
|
|
1.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP Adjustments |
|
|
27,597 |
|
|
|
|
(783 |
) |
|
|
|
4,538 |
|
|
|
|
3,354 |
|
|
|
|
Non-GAAP Operating Income
(Loss) |
|
|
7,981 |
|
|
|
|
32,492 |
|
|
|
|
7,828 |
|
|
|
|
(56 |
) |
|
|
|
Non-GAAP Adjusted Operating Margin |
|
|
5.9 |
% |
|
|
|
13.2 |
% |
|
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Non-GAAP measures are comprised of the total
and diluted per share amounts of adjusted net income (loss)
attributable to the Company and adjusted operating income, in each
case excluding the impact of certain identified items. We believe
that adjusted net income (loss) and adjusted operating income are
useful measure for investors to review because they provide a
consistent measure of the underlying results of our ongoing
business. Furthermore, our management uses adjusted net income
(loss) and adjusted operating income as a measure of the
performance of our operations. However, Non-GAAP measures should
not considered as substitutes for operating income, net income or
other data prepared and reported in accordance with GAAP and
should be viewed in addition to the Company’s reported results
prepared in accordance with GAAP.
2Restructuring charges are primarily associated
with workforce reductions, facility closures, consultant fee,
contract terminations and asset impairments.
3Non-cash actuarial loss (gain) on benefit plans
represents mark-to-market adjustment recorded in the fourth quarter
of each respective year.
4Costs related to a legal settlement of $16.7
million were recorded during the third quarter of 2015.
McDERMOTT INTERNATIONAL,
INCRECONCILIATION OF FORECAST GAAP FINANCIALS TO
NON-GAAP FINANCIAL MEASURES
This press release includes several
forward-looking Non-GAAP1 financial measures as defined under the
SEC’s Regulation G. The forward looking financial measures are
within reasonable measure. The following table reconciles
Non-GAAP financial measures to comparable GAAP financial
measures:
|
|
|
|
|
|
Year Ended December 31, 2016 |
|
(In thousands,
except per share amounts) |
|
|
|
|
|
|
|
|
|
GAAP Net
Income (Loss) Attributable to the Company |
|
$ |
|
(10,000 |
) |
|
|
|
|
|
Less:
Adjustments |
|
|
|
|
Restructuring charges2 |
|
|
|
10,000 |
|
Total Non-GAAP Adjustments |
|
|
|
10,000 |
|
|
|
|
|
|
Non-GAAP Adjusted
Net Income (Loss) Attributable to the Company |
|
$ |
|
- |
|
|
|
|
|
|
GAAP Operating
Income |
|
$ |
|
105,000 |
|
Non-GAAP Adjustments |
|
|
|
10,000 |
|
Non-GAAP Adjusted
Operating Income |
|
$ |
|
115,000 |
|
|
|
|
|
|
GAAP Diluted
EPS |
|
$ |
|
(0.04 |
) |
Non-GAAP Adjustments |
|
|
|
0.04 |
|
Non-GAAP Diluted
EPS |
|
$ |
|
0.00 |
|
|
|
|
|
|
Cash flows from
operating activities |
|
$ |
|
100,000 |
|
Capital expenditures |
|
|
|
(260,000 |
|
Free cash
flow |
|
$ |
|
(160,000 |
) |
|
|
|
|
|
GAAP Net Income
(Loss) Attributable to the Company |
|
$ |
|
(10,000 |
) |
Add: |
|
|
|
|
Total Adjustments |
|
|
|
240,000 |
|
EBITDA |
|
$ |
|
230,000 |
|
|
|
|
|
|
EBITDA |
|
$ |
|
230,000 |
|
Non-GAAP Adjustments |
|
|
|
10,000 |
|
EBITDA |
|
$ |
|
240,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
2016 |
(In
thousands) |
|
|
|
|
|
|
|
GAAP Net
Income (Loss) Attributable to the Company |
|
$ |
|
(10,000 |
) |
|
|
|
|
Total Adjustments |
|
|
|
295,000 |
|
Calculated
Covenant EBITDA attributable to McDermott International,
Inc. |
|
$ |
|
285,000 |
|
|
|
|
|
Calculated
Covenant EBITDA attributable to McDermott International,
Inc./TTM |
|
$ |
|
285,000 |
|
|
|
|
|
1Non-GAAP measures are comprised of the total
and diluted per share amounts of adjusted net income (loss)
attributable to the Company and adjusted operating income,
operating income, operating margin, EBITDA and Adjusted EBITDA, in
each case excluding the impact of certain identified items. We
believe that these measures are useful measures for investors to
review because they provide a consistent measure of the underlying
results of our ongoing business. Furthermore, our management uses
these measures as measures of the performance of our operations.
However, Non-GAAP measures should not considered as substitutes for
operating income, net income or other data prepared and
reported in accordance with GAAP and should be viewed in addition
to the Company’s reported results prepared in accordance with
GAAP.
CONTACT:
Investors & Financial Media
Kathy Murray
Vice President, Treasurer and Investor Relations
281.870.5147
kamurray@mcdermott.com
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