Mcdermott International Ltd · OTC:MCDIF
Mcdermott International — Johnson Rice & Company Marine Construction & Offshore Field Development Forum 2005
41 slides from Mcdermott International's conference presentation, Nov 16, 2005
Slide 1: McDermott International, Inc. with focus on the Marine Construction Services Segment
McDermott International, Inc. with focus on the Marine Construction Services Segment Johnson Rice & Company November 16, 2005 Exhibit 99.1 Johnson Rice & Company Marine Construction & Offshore Marine Construction & Offshore Field Development Forum Field Development Forum November 16, 2005
Slide 2: Forward Looking Statements
Forward Looking Statements Statements in this presentation which express a forecast, expectation or estimate, as well as those which are not historical fact, are forward looking and include statements regarding the proposed settlement of B&W’s Chapter proceeding, B&W’s favorable business environment
Slide 3: McDermott Snapshot
McDermott Snapshot Worldwide energy services company – Engineering & construction, manufacturing, procurement & installation – Manage & operate government and nuclear facilities Three operating segments with franchise name businesses – Power Generation – The Babcock & Wilcox Company (“B&W”) – Marine
Slide 4: Franchise Names in Each Segment
Franchise Names in Each Segment Lifecycle management of highly enriched uranium, facilities & technologies primarily for the U.S. government BWX Technologies (BWXT) Power generation and environmental equipment - design, supply and construction; OEM & upgrades, parts & services Babcock & Wilcox (B&W)
Slide 5: McDermott Today - B&W deconsolidated
McDermott Today - B&W deconsolidated Backlog $3.2 bln 3Q05 Revenues $1.5 bln 3Q05 YTD Segment Income $197 mln 3Q05 YTD Marine Construction Services Government Operations Excludes corporate segment, YTD 3Q05 expense of $28 mln
Slide 6: B&W - Chapter 11 Update
B&W - Chapter 11 Update B&W filed Chapter 11 bankruptcy in February 2000 – To comprehensively resolve outstanding asbestos claims Deconsolidated from financials since filing C11 Previous plan of reorganization involved spin-off of B&W to claimants trust, in addition to additional consideration McDer
Slide 7: Diversified Operations with B&W
Diversified Operations with B&W [1] W/ B&W Backlog $4.8 bln 3Q05 W/ B&W Revenues $2.5 bln 3Q05 YTD With Non-GAAP B&W [2] Segment Income $266 mln 3Q05 YTD Power Generation [1] Marine Construction Government Operations [1] On non-GAAP basis. B&W is not currently consolidated in financial statements. R
Slide 8: Strong Presence in Growing Markets
Strong Presence in Growing Markets Energy demand is steadily growing worldwide – all sources – Electricity, oil & gas, LNG & nuclear Meeting world’s energy needs presents challenges to McDermott’s customer base – Infrastructure issues – equipment age, access to supply, delivery – Environmental issue
Slide 9: Marine Construction Services Segment
Marine Construction Services Segment M c D E R M O T T I N T E R N A T I O N A L , I N C .
Slide 10: J. Ray's Core Capabilities
– In-house and through FloaTec joint venture J. Ray’s Core Capabilities Engineering and Procurement Construction and Installation – Jackets, Topsides, Floating & Fixed Structures Offshore pipeline installation Subsea/Deepwater Technology – In-house and through FloaTec joint venture Providing solutio
Slide 11: Spectrum of Offshore Infrastructure
Spectrum of Offshore Infrastructure (Graphics compliments of Offshore Magazine (2002 Offshore Oil & Gas Industry Deepwater Solutions for Concept Selections Poster May 2002) J. Ray’s experience covers shallow to the deepest water
Slide 12: Field Development Lifecycle
Field Development Lifecycle Source: Morgan Stanley Production Infrastructure Well Completion Drilling Seismic / Reservoir Identification Source: Morgan Stanley Field infrastructure fabrication and installation accounts for a Field infrastructure fabrication and installation accounts for a small port
Slide 13: J. Ray McDermott Snapshot
Long, established track record as a pioneer in the marine construction industry Worldwide fabrication/installation operations Location Facility Major Vessels – Asia Pacific ( Batam ) Batam ) ) Fabrication 3 – Caspian (Baku) Fabrication (Operate only) 2 (Operate only) – Gulf of Mexico (Morgan City) F
Slide 14: World Wide Operations
World Wide Operations Americas Caspian Middle East Asia Pacific
Slide 15: Engineering Services
Engineering Services Conceptual Designs FEED Studies Bid Document Preparation Project Planning & Development Detailed Engineering Procurement Services Installation, Hookup, Commissioning, & Startup Assistance Pipelines, Risers, Spars & Subsea Designs Conceptual Designs FEED Studies Bid Document Prep
Slide 16: FloaTec Joint Venture
FloaTec Joint Venture Forming venture with Keppel FELS Provide unbiased deepwater floating solutions – Spar, Semi-submersible, Extended TLP & Single Column Floater – Develop & procure new floating solution technologies Draw upon partners’ construction and installation capabilities Forming venture wi
Slide 17: Caspian Operations
Caspian Operations Field development for AIOC and BP Shah Deniz project Topsides fabrication, pipelay, installation and procurement Currently, J. Ray is only in the Azeri section of the Caspian At 9/30/05 – Caspian operations were 26% of JRM backlog Field development for AIOC and BP Shah Deniz proje
Slide 18: Caspian Projects
Caspian Projects Constructed CA deck in 2004 (left) and WA deck (right) in 2005 Ongoing projects include the EA & DUQ decks plus pipelines Evaluating additional opportunities within Caspian market Constructed CA deck in 2004 (left) and WA deck (right) in 2005 Ongoing projects include the EA & DUQ de
Slide 19: Middle East Operations
Middle East Operations Fabrication in Dubai, UAE – 145 Acres Engineering offices Able to serve W. Africa and North Sea thru Mid East Primary vessel: DB27 – Lift Capacity: 2400 tons – Pipelay Capacity: 60 inches At 9/30/05 – Middle East was 52% of JRM backlog Fabrication in Dubai, UAE – 145 Acres Eng
Slide 20: Middle East Projects
Middle East Projects Completed Amenam deck in 2003 (right) and Front Runner hull (below) in 2004 Numerous ongoing projects & recent awards; including Dolphin & RasGas LNG 2 Market remains robust Completed Amenam deck in 2003 (right) and Front Runner hull (below) in 2004 Numerous ongoing projects & r
Slide 21: Asia Pacific Operations
Asia Pacific Operations Batam Island, Indonesia – 242 Acres Engineering in Jakarta Primary vessel: DB30 – Lift Capacity: 3080 tons – Pipelay Capacity: 60 inches At 9/30/05 – Asia Pacific was 16% of JRM backlog Batam Island, Indonesia – 242 Acres Engineering in Jakarta Primary vessel: DB30 – Lift Cap
Slide 22: Asia Pacific Projects
Asia Pacific Projects Completed Belanak FPSO (left) in 2004 and John Brookes development in 2005 (pipelay shown) Awarded Arthit and Woodside LNG projects in 3Q05 Region remains active Completed Belanak FPSO (left) in 2004 and John Brookes development in 2005 (pipelay shown) Awarded Arthit and Woodsi
Slide 23: Americas Operations
Americas Operations Morgan City, Louisiana – 300+ Acres Engineering in Houston & New Orleans Primary vessel: DB50 – Lift Capacity: 4400 tons – Pipelay Capacity: 20 inches At 9/30/05 – Americas was 6% of JRM backlog Morgan City, Louisiana – 300+ Acres Engineering in Houston & New Orleans Primary vess
Slide 24: Americas Projects
Americas Projects In early 2005, completed the major topsides program for BP Originally awarded in 2000, BP had exclusive use of Morgan City during fabrication period J. Ray has re-entered market upon completion In early 2005, completed the major topsides program for BP Originally awarded in 2000, B
Slide 25: Slide 25
Slide 26: Turned J. Ray Bids into Backlog in 3Q05
Turned J. Ray Bids into Backlog in 3Q05 Bids outstanding exceeded $2 billion in June 2005 Awarded Saudi Aramco project in August Chevron Gulf of Mexico marine contract signed Awarded $77 million Woodside LNG contract in Asia Pacific Signed $500 million+ Phase 2 LNG Expansion Project Asia Pacific rec
Slide 27: J. Ray Backlog Characteristics
Americas 6% Middle East 52% Caspian 26% Unit Rate 8% Combination 27% J. Ray Backlog Characteristics [1] Asia Pacific 16% Fixed Price 65% by Type of Contract by Geographic Region [1] Based on 9/30/05 backlog of $1.7 billion
Slide 28: J. Ray Summary
J. Ray Summary Late-cycle service company in offshore field development Well positioned to capture industry growth Strong franchise in strategic geographical locations Management team leading change in all areas $1.7 billion backlog with good growth prospects Late-cycle service company in offshore f
Slide 29: Financial Review
M c D E R M O T T I N T E R N A T I O N A L , I N C . Financial Review
Slide 30: McDermott Financial Snapshot
Stock symbol (NYSE): MDR Recent price/share [1] : $37.45 Shares outstanding: 73 million Market capitalization [1] : $2.7 billion 52-week trading range: $15.05-$38.70 Daily volume average [1] 848,741 [ 1] 1] As of November 14, 2005 Common Share Information Revenues: $1.5 billion Op. Income: $169.5 mi
Slide 31: J. Ray Backlog – Revenue Relationship
J. Ray Backlog – Revenue Relationship $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 $0 $100 $200 $300 $400 $500 $600 Backlog Revenues
Slide 32: Solid Recent Performance by J. Ray
-$100 $0 $100 $200 $300 $400 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Unrestricted Cash Restricted Cash -$10 $0 $10 $20 $30 $40 $50 $60 $70 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 J. Ray Segment Income [1] (dollars in millions) [ 1] See Appendix B for items included in full-year 2004 Marine Construction Servic
Slide 33: McDermott's Consolidated Results
$0 $100 $200 $300 $400 $500 $600 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 BWXT J. Ray -$0.35 -$0.15 $0.05 $0.25 $0.45 $0.65 $0.85 $1.05 $1.25 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 McDermott EPS [2] Revenue in millions Fully diluted GAAP Earnings Per Share [1] [ 1] See Appendix B for items included in full-ye
Slide 34: Net Cash / (Debt) Position
Net Cash / (Debt) Position [1] -$50,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 [1] Net Cash/Debt is the sum of total unrestricted cash, restricted cash and short-term investments less total debt. See Appendix C for detailed calculation. Si
Slide 35: B&W – Strong Addition to Consolidated Results
B&W – Strong Addition to Consolidated Results $0 $500 $1,000 $1,500 $2,000 2000 2001 2002 2003 2004 $0 $50 $100 $150 2000 2001 2002 2003 2004 $0 $100 $200 $300 $400 2000 2001 2002 2003 2004 [1] Non-GAAP Operating income. See Appendix D for reconciliation between GAAP and Non-GAAP. Note: pension expe
Slide 36: Key Areas of Focus
– Eliminate “asbestos cloud” and reconsolidate B&W Key Areas of Focus Expedite B&W Chapter 11 bankruptcy resolution with revised settlement by February 22, 2006 Keep J. Ray on consistent long-term earnings growth and build upon industry leadership – Successfully execute existing backlog – Build prof
Slide 37: For more information contact
M c D E R M O T T I N T E R N A T I O N A L , I N C . (NYSE: MDR) For more information contact: Jay Roueche Director of Investor Relations 281-870-5462
Slide 38: Appendix A: Non-GAAP Measures with B&W
Appendix A: Non-GAAP Measures with B&W Presented above is a reconciliation of B&W’s GAAP operating income and non-GAAP operating income. The non-GAAP measure is based upon our unconsolidated statement of operations for B&W for the periods shown. McDermott is providing the non-GAAP information to sup
Slide 39: Appendix B: Items included in 2004 Income
Appendix B: Items included in 2004 Income (Unaudited, dollars in millions, for the year ended) 12/31/04 1. ITEMS INCLUDED IN OPERATING INCOME (LOSS) Marine Construction Services Contract cost adjustments on loss projects $ 46.6 Gain on sale of marine assets 30.3 Miscellaneous items, net (14.5) TOTAL
Slide 40: Appendix C: Net Cash/(Debt) Position
(dollars in millions) $203.1 (260.2) (4.3) 51.7 42.7 111.8 $261.4 2Q05 0 108.5 66.5 55.7 0 0 LT Restricted Cash & CE $314.2 $217.1 $157.3 $91.4 $22.9 ($1.0) Total Net Cash / (Debt) Position (260.2) (261.3) (268.0) (268.1) (268.1) (278.2) Long-term Debt (4.3) (14.2) (12.0) (12.0) (12.0) (16.1) Short-
Slide 41: Appendix D: B&W GAAP to Non-GAAP Operating Income
$128.1 $98.4 $101.9 $74.2 $14.7 Non-GAAP Operating Income 12.5 96.6 306.7 32.6 17.9 Add back: Asbestos & C11 Expenses $115.6 $1.8 ($204.8) $41.6 ($3.2) GAAP Operating Income 2004 2003 2002 2001 2000 (dollars in millions) Presented above is a reconciliation between B&W’s GAAP operating income and non