Form 8-K MCDERMOTT INTERNATIONAL For: Nov 05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.��20549
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FORM 8-K
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CURRENT REPORT

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

Date of Report (Date of earliest event reported):��November 5, 2014
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McDermott International, Inc.
(Exact name of registrant as specified in its charter)
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Registrants Telephone Number, including Area Code:��(281) 870-5000

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

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Item 2.02 �����Results of Operations and Financial Condition.

On November 5, 2014, we issued a press release announcing our financial results for the quarter ended September 30, 2014.��A copy of the press release is furnished 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 November 5, 2014.

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.

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EXHIBIT INDEX

Exhibit 99.1

McDermott Reports Third Quarter 2014 Financial Results

Results Reflect Improved Execution

Solid Backlog, Improved Customer Relations Position the Company for Long-Term Growth

Company to Host Conference Call and Webcast Today at 4:00 pm CT

HOUSTON--(BUSINESS WIRE)--November 5, 2014--McDermott International, Inc. (NYSE: MDR) (McDermott or the Company) today announced financial results for the quarter ended September 30, 2014. The Company reported a third quarter 2014 net loss of $34 million, or $0.14 per fully diluted share, compared to a net loss of $64 million, or $0.27 per diluted share, in the prior-year quarter.

The Company reported third quarter revenues of $415 million, a decrease of $272 million compared to revenues of $687 million in the prior-year quarter, due to lower project activity principally resulting from customer-driven schedule changes. The operating loss was $14 million in the third quarter 2014 and included $5 million of gains on asset sales and $5 million of restructuring expenses. These results compare to the prior-year operating loss of $53 million, which included $4 million of restructuring expenses.

The Companys other expense for the third quarter 2014 was $14 million compared to other income of $6 million in the prior-year quarter due to increased interest expense.

"We are pleased to report improved year-over-year financial results that we believe reflect considerable progress on our turnaround initiatives, improvement in our operations and stabilization of our financial results, said David Dickson, President and Chief Executive Officer of McDermott. We are achieving notable improvements in many areas, including the Companys culture, operations and our customer relationships, and we believe we are on track to achieve sustainable profitability. Our new customer-focused organization is executing more efficiently, as demonstrated by the fact that we have successfully closed out six legacy projects in the past two quarters, including our Chevron Jack and St. Malo project, a complex ultra deepwater subsea project. Our $2+ billion contract for the INPEX-operated Ichthys project, the industrys largest subsea contract at its time of award, remains on schedule, and we have achieved a significant milestone with the commencement of the marine campaign and the ongoing installation of the riser support structure.

Mr. Dickson added, By restructuring the organization and management team and implementing a culture of accountability and performance, we believe we have improved McDermotts long-term competitiveness, and we continue to focus on building profitable backlog. We have a large and diverse pipeline of prospective work, as demonstrated by the growth in our bids outstanding, and we believe McDermott has the flexibility to respond to customer demand and schedules. Importantly, our success to date on high profile projects is enhancing McDermotts reputation as a leading provider of subsea services. McDermott delivers tremendous value to its customers, and we are leveraging McDermotts unique strengths, including our local fabrication capabilities and leading offshore and subsea track record, to drive long-term value for our shareholders.

With a recently recapitalized balance sheet and improved operating cash flow, we believe McDermott has the financial flexibility to execute its turnaround plan, said Stuart Spence, Executive Vice President and Chief Financial Officer. On the operating side, we are focused on efficient working capital management and capital discipline as we embark on a planned campaign to reduce our cost structure. We believe we are on the right track to deliver shareholder returns and to return McDermott to sustainable, profitable growth.

Contract Backlog Summary

As of September 30, 2014, the Companys backlog was $4.0 billion, compared to $4.1 billion at June 30, 2014. Of the September 30, 2014 backlog, approximately 39% related to offshore operations and approximately 61% related to subsea operations. Order intake in the third quarter 2014 totaled $330 million.

At the end of the third quarter, the Company had $10.5 billion in bids and change orders outstanding compared to $8.4 billion at June 30, 2014. The Company is targeting to bid approximately $12.5 billion in projects that are expected to be awarded in the next five quarters. In total, the Companys potential revenue pipeline was $26.9 billion as of September 30, 2014.

Other Financial Information

As of September 30, 2014, McDermott reported total assets of $3.5 billion. Included in this amount was $886 million in cash and cash equivalents, restricted cash and investments. At quarter-end, the Company had $900 million in debt outstanding and total equity of $1.6 billion, or 45% of total assets. The Company is in compliance with all debt covenants for the quarter ended September 30, 2014.

Weighted average common shares outstanding on a fully diluted basis were approximately 237 million and 236 million in the quarters ended September 30, 2014 and September 30, 2013, respectively.

Conference Call

McDermott has scheduled a conference call and webcast related to its third quarter 2014 results today at 4:00 p.m. U.S. Central Standard Time. Interested parties may listen over the Internet through a link posted in the Investor Relations section of the Companys Web site. The replay will also be available on the Companys Web site following the end of the call. In addition, a presentation will be available on the Investor Relations section of the Companys Web site that contains supplemental information on our operations and our business outlook.

About the Company

McDermott is a leading provider of integrated engineering, procurement, construction and installation (EPCI) services for upstream field developments worldwide. The Company delivers fixed and floating production facilities, pipelines 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 more than 20 countries across the world, our locally focused and globally integrated resources include approximately 14,000 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

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 and change orders outstanding, projects McDermott expects to bid and the timing of award of such, and revenue pipeline, to the extent these may be viewed as indicators of future revenues or profitability, our belief that considerable progress has been made on the Company's turnaround initiatives, improvements in the Companys culture, operations and customer relationships, McDermotts belief the Company is on track to achieve sustainable profitability, the status of the Inpex Ichthys project, our belief that McDermott has the flexibility to respond to customer demand and schedules, the belief that McDermotts long-term competitiveness has improved, the belief that McDermott has the financial flexibility to execute its turnaround plan and the belief that the Company is on the right track to deliver shareholder returns and to return McDermott to sustainable, profitable growth. 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 scope or timing of contracts, and contract cancellations, change orders and other modifications. 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, 2013 and subsequent quarterly reports on Form 10-Q. This news 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.

CONTACT:
McDermott International, Inc.
Investors & Financial Media
Vice President, Treasurer and Investor Relations
Steven D. Oldham, 281-870-5147
[email protected]

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