<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 1 0 - K/A - 1
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the transition period from _____________________ to ____________________
Commission File Number 1-8430
McDERMOTT INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 74-1032246
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1450 Poydras Street, New Orleans, Louisiana 70112-6050
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (504) 587-4411
Securities Registered Pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each Exchange on which registered
------------------- -----------------------------------------
<S> <C>
Series A $2.20 Cumulative Convertible New York Stock Exchange
Preferred Stock, $1 Par Value
Series B $2.60 Cumulative Preferred New York Stock Exchange
Stock, $1 Par Value
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. (X)
The aggregate market value of voting stock held by non-affiliates of the
registrant was $192,078,823 as of April 28, 1994.
The number of shares of Common Stock, par value $1 per share, outstanding as of
April 28, 1994 was 3,600.
DOCUMENTS INCORPORATED BY REFERENCE
The Information Statement for action to be taken without a meeting of
shareholders on August 9, 1994 is incorporated by reference into Part III of
this report.
<PAGE> 2
MCDERMOTT INCORPORATED
INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Auditors 2
Financial Statement Schedules Covered by Report of Independent Auditors:
III Condensed Financial Information of Registrant 3
IX Short-Term Borrowings 10
X Supplementary Income Statement Information 11
Signature of the Registrant 12
</TABLE>
All schedules other than the above have been omitted because they are not
required or the information is included in the Consolidated Financial
Statements of Notes thereto.
1
<PAGE> 3
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
McDermott Incorporated
We have audited the consolidated financial statements of McDermott Incorporated
as of March 31, 1994 and 1993, and for each of the three years in the period
ended March 31,1994, and have issued our report thereon dated May 9, 1994 which
contained an explanatory paragraph regarding estimated future costs for
non-employee products liability asbestos claims described in Note 1 to the
consolidated financial statements. Our audits also included the financial
statement schedules listed in the Index to Financial Statement Schedules in
this Form 10-K/A-1. These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein. The
ultimate loss from non-employee products liability asbestos claims as explained
in our report on the basic financial statements may differ materially from the
amount provided in the financial statement schedules.
ERNST & YOUNG
New Orleans, Louisiana
May 9, 1994
2
<PAGE> 4
SCHEDULE III
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
BALANCE SHEET
MARCH 31, 1994 AND 1993
<TABLE>
<CAPTION>
ASSETS 1994 1993
- - - ------ ---- ----
(In thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 22,030 $ 16,354
Investments in government obligations,
under reverse repurchase agreement
with an affiliate - 78,860
Accounts receivable - trade 46,332 12,272
Accounts receivable - other 8,254 576
Accounts receivable from subsidiaries 396,391 406,340
Accounts receivable from McDermott
International, Inc. 4,685 6,161
Contracts in progress 24,136 39,781
Inventories 2,674 4,393
Deferred income taxes 26,942 38,540
Other current assets 1,697 2,354
- - - -----------------------------------------------------------------------------------
Total Current Assets 533,141 605,631
- - - -----------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost:
Land 17,173 3,659
Buildings 32,963 31,925
Machinery and equipment 622,076 606,542
Property under construction 1,707 11,082
- - - -----------------------------------------------------------------------------------
673,919 653,208
Less accumulated depreciation 524,727 514,197
- - - -----------------------------------------------------------------------------------
Net Property, Plant and Equipment 149,192 139,011
- - - -----------------------------------------------------------------------------------
Investments 130,121 -
- - - -----------------------------------------------------------------------------------
Note Receivable from Subsidiary 14,535 17,340
- - - -----------------------------------------------------------------------------------
Investments in Subsidiaries and Other
Investees, at Equity 770,199 866,982
- - - -----------------------------------------------------------------------------------
Investment in McDermott International, Inc. 610,392 615,742
- - - -----------------------------------------------------------------------------------
Prepaid Pension Costs 35,662 37,936
- - - -----------------------------------------------------------------------------------
Other Assets 21,791 25,581
- - - -----------------------------------------------------------------------------------
TOTAL $ 2,265,033 $ 2,308,223
- - - -----------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed financial information.
3
<PAGE> 5
SCHEDULE III
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
1994 1993
---- ----
(In thousands)
<S> <C> <C>
Current Liabilities:
Notes payable and current
maturities of long-term debt $ 5,198 $ 189,584
Accounts payable 23,677 27,270
Accounts and note payable to
subsidiaries 304,788 355,907
Accounts payable to McDermott
International, Inc. 10,241 2,697
Accrued employee benefits 23,957 25,503
Accrued interest 44,553 52,192
Accrued liabilities - other 21,564 35,881
Advance billings on contracts 3,049 18,630
U. S. and foreign income taxes 22,914 30,106
Dividends payable 3,809 3,971
- - - -----------------------------------------------------------------------------------
Total Current Liabilities 463,750 741,741
- - - -----------------------------------------------------------------------------------
Long-Term Notes Payable to Subsidiaries 453,254 397,923
- - - -----------------------------------------------------------------------------------
Long-Term Debt 578,824 480,726
- - - -----------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation 82,840 78,567
- - - -----------------------------------------------------------------------------------
Other Liabilities 17,590 15,293
- - - -----------------------------------------------------------------------------------
Contingencies
- - - -----------------------------------------------------------------------------------
Redeemable Preferred Stocks 196,672 204,482
- - - -----------------------------------------------------------------------------------
Stockholder's Equity:
Common stock 4 4
Capital in excess of par value 589,085 356,802
Retained earnings (deficit) (104,859) 37,926
Minimum pension liability (620) (5)
Cumulative foreign exchange translation
adjustments (11,507) (5,236)
- - - -----------------------------------------------------------------------------------
Total Stockholder's Equity 472,103 389,491
- - - -----------------------------------------------------------------------------------
TOTAL $ 2,265,033 $ 2,308,223
- - - -----------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 6
SCHEDULE III
McDERMOTT INCORPORATED (PARENT COMPANY ONLY)
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS (DEFICIT)
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Revenues $ 369,496 $ 406,230 $ 656,890
- - - -------------------------------------------------------------------------------------------------------------------
Cost and Expenses:
Cost of operations 317,246 346,309 572,213
Depreciation and amortizatIon 18,421 31,861 37,321
Selling, general and
administrative expenses 34,877 33,406 36,863
- - - -------------------------------------------------------------------------------------------------------------------
370,544 411,576 646,397
- - - -------------------------------------------------------------------------------------------------------------------
(1,048) (5,346) 10,493
Equity in Income of Subsidiaries
and Other Investees 9,277 27,815 65,726
- - - -------------------------------------------------------------------------------------------------------------------
Operating Income 8,229 22,469 76,219
- - - -------------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest income 3,514 4,552 4,316
Interest expense (64,733) (80,608) (75,834)
Other-net 9,512 543 7,612
- - - -------------------------------------------------------------------------------------------------------------------
(51,707) (75,513) (63,906)
- - - -------------------------------------------------------------------------------------------------------------------
Income (loss) from Continuing Operations
before Benefit from Income Taxes,
Extraordinary Items and Cumulative
Effect of Accounting Changes (43,478) (53,044) 12,313
Benefit from Income Taxes (17,162) (25,965) (17,544)
- - - -------------------------------------------------------------------------------------------------------------------
Income (loss) from Continuing Operations
before Extraordinary Items, and
Cumulative Effect of Accounting Changes (26,316) (27,079) 29,857
Loss from Discontinued Operations - - (3,368)
- - - -------------------------------------------------------------------------------------------------------------------
Income (Loss) before Extraordinary Items
and Cumulative Effect of Accounting
Changes (26,316) (27,079) 26,489
Extraordinary Items - (10,431) -
Cumulative Effect of Accounting Changes (100,750) (236,315) -
- - - -------------------------------------------------------------------------------------------------------------------
Net Income (Loss) (127,066) (273,825) 26,489
- - - -------------------------------------------------------------------------------------------------------------------
Retained Earnings - Beginning of Year 37,926 327,636 317,032
Deduct Cash Dividends - Preferred
(Series A, $2.20 and Series B, $2.60
per share) 15,719 15,885 15,885
- - - -------------------------------------------------------------------------------------------------------------------
Retained Earnings (Deficit) - End of Year $ (104,859) $ 37,926 $ 327,636
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed financial information.
5
<PAGE> 7
SCHEDULE III
McDERMOTT INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1994
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (127,066) $ (273,825) $ 26,489
- - - -------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 18,421 31,861 37,321
(Gain) loss on sale and disposal of
assets (640) 909 (144)
Equity in income of subsidiaries and
other investees, less dividends (9,277) (27,815) 6,962
Provision for (benefit from) deferred taxes 11,086 (3,046) (19,329)
Cumulative effect of accounting changes 100,750 236,315 -
Extraordinary items - 10,431 -
Other 2,281 4,409 1,530
Changes in assets and liabilities:
Accounts receivable 82,260 (168,643) (177,245)
Accounts payable (110,793) 141,121 94,188
Inventories 1,719 1,346 2,132
Net contracts in progress and advance
billings 64 23,229 (30,232)
Income taxes (14,288) (26,109) 48,240
Accrued interest (7,639) (42,210) 4,269
Accrued liabilities (14,479) 7,718 (2,707)
Other, net 18,032 (26,337) 36,909
- - - -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES (49,569) (110,646) 28,383
- - - -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale and disposal of assets 865 7,018 -
Purchases of property, plant and equipment (12,218) (13,094) (7,114)
Sales of short-term investments and
government obligations - - 56,067
Purchases of government obligations, under
reverse repurchase agreements with an
affiliate (674,203) (6,033,975) (794,184)
Sales of government obligations, under
reverse repurchase agreements with an
affiliate 753,063 6,102,052 759,307
Proceeds from redemption of International
Preferred Stock 2,500 2,500 -
Decrease (increase) in loan receivable from subsidiary 2,805 (9,733) (7,607)
Collection of note receivable from an affiliate - - 9,404
Investment in unconsolidated affiliate - (381) -
- - - -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 72,812 54,387 15,873
- - - -------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 8
CONTINUED
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt $ (189,400) $ (68,433) $ (223,355)
Issuance of long-term debt 87,000 89,000 224,344
Increase (decrease) in loans from
subsidiaries 8,547 50,075 (8,449)
Decrease in short-term borrowings - - (54,480)
Dividends paid (15,719) (15,885) (15,885)
Capital contribution from International 100,000 - -
Other (7,995) (1,055) (166)
- - - -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (17,567) 53,702 (77,991)
- - - -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 5,676 (2,557) (33,735)
- - - -------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 16,354 18,911 52,646
- - - -------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR $ 22,030 $ 16,354 $ 18,911
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 72,372 $ 122,818 $ 71,565
Income taxes $ 1,253 $ 61,612 $ 40,506
- - - -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed financial information.
7
<PAGE> 9
SCHEDULE III
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION
FOR THE THREE FISCAL YEAR ENDED MARCH 31, 1994
- - - --------------------------------------------------------------------------------
- - - --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared to present the
unconsolidated financial position, results of operations and changes in
financial position of McDermott Incorporated (Parent Company Only). Investments
in subsidiaries and other investees are stated at cost plus equity in
undistributed earnings from date of acquisition. These Parent Company Only
financial statements should be read in conjunction with McDermott
Incorporated's consolidated financial statements.
NOTE 2 - MATURITIES OF LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt consists of: 1994 1993
---- ----
(In thousands)
<S> <C> <C>
Unsecured Debt:
Series A Medium Term Notes (maturities ranging from
3 to 9 years; interest at various rates ranging
from 7.92% to 9.00%) $ 75,000 $ 75,000
Series B Medium Term Notes (maturities ranging from
4 to 29 years; interest at various rates ranging
from 6.50% to 8.75%) 101,000 14,000
9.375 % Notes due 2002 ($225,000,000 face value) 224,432 224,386
10.25% Notes due June 1995 150,000 150,000
12.25% Senior Subordinated Notes due 1998 - 189,400
6.80% Pollution Control Bonds due February 2009 17,000 17,000
Secured Debt:
Other notes payable and capital lease obligations 16,590 524
- - - -------------------------------------------------------------------------------------------------------------------
584,022 670,310
Less: Amounts due within one year 5,198 189,584
- - - -------------------------------------------------------------------------------------------------------------------
$ 578,824 $ 480,726
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 10
Maturities on long-term debt during the five fiscal years subsequent to March
31, 1994 are as follows: 1995 - $5,198,000; 1996 - $155,142,000; 1997 -
$5,000,000; 1998 - $46,250,000; 1999 - $27,000,000.
NOTE 3 - DIVIDENDS RECEIVED
McDermott Incorporated did not receive dividends from either its subsidiaries
or joint-venture companies in fiscal years 1994 and 1993. In fiscal 1992,
dividends of $70,900,000 were received from its subsidiaries.
NOTE 4 - CONTINGENCIES
McDermott Incorporated is contingently liable under standby letters of credit
totaling $27,874,000 at March 31, 1994 issued in the normal course of business.
9
<PAGE> 11
SCHEDULE IX
McDERMOTT INCORPORATED
SHORT-TERM BORROWINGS
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
BALANCE AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
AT END OF INTEREST DURING THE DURING THE DURING THE
PERIOD RATE PERIOD PERIOD (1) PERIOD (2)
Notes payable to banks and other financial institutions:
<S> <C> <C> <C> <C> <C>
1994:
Banks $ 15,519,000 4.45% $ 62,427,000 $ 48,728,000 4.50%
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
1993:
Banks $ - - $ 111,625,000 $ 38,268,000 5.29%
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
1992:
Banks $ - - $ 53,500,000 $ 29,294,000 7.36%
Other Financial
Institutions $ - - $ 56,000,000 $ 5,957,000 6.18%
All
Categories $ - - $ 88,053,000 $ 35,251,000 7.16%
- - - -------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average amount outstanding during the period was computed by dividing
the sum of daily outstanding balances by the number of calendar days in
the year.
(2) The weighted average interest rates during the period were computed by
dividing the actual interest incurred on the short-term borrowings by the
average amount outstanding during the period.
10
<PAGE> 12
SCHEDULE X
McDERMOTT INCORPORATED
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1994
(In thousands)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Maintenance and repairs $ 60,434 $ 62,999 $ 60,340
- - - ------------------------------------------------------------------------------------------------------------------------
- - - ------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 13
SIGNATURE OF THE REGISTRANT
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
McDERMOTT INCORPORATED
(REGISTRANT)
By: /s/ DANIEL R. GAUBERT
Daniel R. Gaubert
Vice President and Controller
June 23, 1994
12
