SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant of Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report:
March 31, 1995
McDermott Incorporated
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(Exact name of registrant as specified in its charter)
Delaware 1-4095 No. 74-1032246
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1450 Poydras Street
New Orleans, Louisiana 70112-6050
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 587-4411
(page 1)
Item 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following pro forma financial information and exhibits are filed as a part
of this report.
(b) Pro forma financial information required pursuant to Article II of
Regulation S-X:
Item Page
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McDermott Incorporated Pro Forma Consolidated
Financial Statements (Unaudited)
Pro Forma Consolidated Balance Sheet -
December 31, 1994 4
Pro Forma Consolidated Statement of Loss
from Before Cumulative Effect of Accounting
Change - Fiscal Year Ended March 31, 1994 6
Pro Forma Consolidated Statement of Loss
from Before Cumulative Effect of Accounting
Change - Nine Months Ended December 31, 1994 7
Notes to the Pro Forma Consolidated Financial
Statements 8
In connection with the merger of Offshore Pipelines, Inc. into J. Ray
McDermott, S.A. on January 31, 1995, McDermott Incorporated sold substantially
all of its marine construction services business to its parent company,
McDermott International, Inc. and received marketable securities having an
aggregate value of $220,315,000 in consideration for the property, plant and
equipment. The purchase price is subject to further adjustments, primarily
working capital, related to the business. The Unaudited Pro Forma
Consolidated Balance Sheet as of December 31, 1994 gives effect to the sale of
the marine construction services business as if the sale had occurred on
December 31, 1994. The Unaudited Pro Forma Consolidated Statements of Loss
before Cumulative Effect of Accounting Change for the fiscal year ended March
31, 1994 and the nine months ended December 31, 1994 give effect to the sale
of the marine construction services business as if the sale had occurred on
April 1, 1993. The pro forma information is based on historical financial
statements of McDermott Incorporated after giving effect to the sale of the
marine construction services business, using the assumptions and adjustments
in the accompanying Notes to the Pro Forma Consolidated Financial Statements.
(page 2)
The pro forma information is not necessarily indicative of the actual
financial position of McDermott Incorporated at any date or the results which
would have actually occurred on such dates or which may occur in the future.
The pro forma consolidated financial statements should be read in conjunction
with McDermott Incorporated's historical consolidated financial statements and
notes thereto contained in the Annual Report (Form 10-K) for the fiscal year
ended March 31, 1994 and the Quarterly Report (Form 10-Q) for the quarter
ended December 31, 1994.
(page 3)
<TABLE>
<CAPTION>
McDERMOTT INCORPORATED
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1994
ASSETS
HISTORICAL ADJUSTMENTS (1) PRO FORMA
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(In thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 28,776 $ (8) $ 28,768
Accounts receivable 304,679 (47,095) 257,584
Contracts in progress 281,289 (12,519) 268,770
Other current assets 426,730 (38,395) 388,335
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Total Current Assets 1,041,474 (98,017) 943,457
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Property, Plant and Equipment,
at Cost 1,450,736 (776,286) 674,450
Less accumulated depreciation 959,455 (587,569) 371,886
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Net Property, Plant and Equipment 491,281 (188,717) 302,564
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Investment in McDermott International,
Inc. 605,867 - 605,867
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Insurance Recoverable 777,327 - 777,327
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Investments - 263,103 263,103
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Intangibles and Other Assets 498,685 46,805 545,490
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TOTAL $3,414,634 $ 23,174 $3,437,808
==============================================================================
</TABLE>
(page 4)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
HISTORICAL ADJUSTMENTS (1) PRO FORMA
(In thousands)
<S> <C> <C> <C>
Current Liabilities:
Notes and accounts payable
and current maturities of
long term debt $ 524,702 $ (5,550) $ 519,152
Advance billings on contracts 89,104 (1,818) 87,286
U.S. and foreign income taxes 10,641 23,626 34,267
Other current liabilities 349,888 (10,455) 339,433
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Total Current Liabilities 974,335 5,803 980,138
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Long-Term Debt 423,226 (32) 423,194
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Accumulated Postretirement
Benefit Obligation 380,726 - 380,726
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Environmental and Products
Liabilities 907,884 - 907,884
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Other Liabilities 129,209 (3,136) 126,073
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Redeemable Preferred Stocks 179,251 - 179,251
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Stockholder's Equity:
Common stock 4 - 4
Other stockholder's equity 419,999 20,539 440,538
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Total Stockholder's Equity 420,003 20,539 440,542
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TOTAL $3,414,634 $ 23,174 $3,437,808
==============================================================================
</TABLE>
(page 5)
<TABLE>
<CAPTION>
McDERMOTT INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF LOSS
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
(UNAUDITED)
FOR THE FISCAL YEAR ENDED MARCH 31, 1994
HISTORICAL ADJUSTMENTS(4) PRO FORMA
(In thousands)
<S> <C> <C> <C>
Revenues $2,243,366 $ (279,742) (2) $ 1,963,624
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Costs and Expenses:
Cost of operations 1,985,589 (224,459) (2) 1,761,130
Depreciation and amortization 66,825 (21,921) (2) 44,904
Selling, general and
administrative expenses 168,039 (10,609) (2) 157,430
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2,220,453 (256,989) 1,963,464
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22,913 (22,753) 160
Equity in Income of Investees 9,080 - 9,080
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Operating Income 31,993 (22,753) 9,240
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Other Income (Expense):
Interest income 5,542 (45) (2) 5,497
Interest expense (53,870) (103) (2) (53,973)
Other-net (9,066) (3,752) (2) (12,818)
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(57,394) (3,900) (61,294)
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Loss before Provision for
(Benefit from) Income Taxes
and Cumulative Effect of
Accounting Change (25,401) (26,653) (52,054)
Provision for (Benefit from)
Income Taxes 915 (9,170) (2) (8,255)
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Loss before Cumulative
Effect of Accounting Change $(26,316) $(17,483) $ (43,799) (3)
=====================================================================================
</TABLE>
(page 6)
<TABLE>
<CAPTION>
McDERMOTT INCORPORATED
PRO FORMA CONSOLIDATED STATEMENT OF LOSS
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
(UNAUDITED)
FOR THE NINE MONTHS ENDED DECEMBER 31, 1994
HISTORICAL ADJUSTMENTS(4) PRO FORMA
(In thousands)
<S> <C> <C> <C>
Revenues $ 1,673,471 $ (214,417) (2) $ 1,459,054
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Costs and Expenses:
Cost of operations 1,483,192 (161,759) (2) 1,321,433
Depreciation and amortization 52,949 (20,281) (2) 32,668
Selling, general and
administrative expenses 128,325 (14,627) (2) 113,698
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1,664,466 (196,667) 1,467,799
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9,005 (17,750) (8,745)
Equity in Income of Investees 8,930 - 8,930
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Operating Income 17,935 (17,750) 185
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Other Income (Expense):
Interest income 7,269 (5) (2) 7,264
Interest expense (33,583) (119) (2) (33,702)
Other-net (24,487) (1,547) (2) (26,034)
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(50,801) (1,671) (52,472)
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Loss before Provision for
Income Taxes and Cumulative
Effect of Accounting
Change (32,866) (19,421) (52,287)
Provision for Income Taxes 7,968 (6,821) (2) 1,147
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Loss Before Cumulative Effect of
Accounting Change $(40,834) $(12,600) $ (53,434) (3)
======================================================================================
</TABLE>
(page 7)
McDERMOTT INCORPORATED
NOTES TO THE PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
ADJUSTMENTS TO SALE OF MARINE CONSTRUCTION BUSINESS:
(1) Reflect the sale of marine construction services business to McDermott
International, Inc. Proceeds of $263,103,000 ($220,315,000 in
consideration for property, plant and equipment and $42,788,000 in other
adjustments, primarily for working capital) in long term investments were
assumed to have been received in the sale.
(2) Remove marine construction services business and record removal of U.S.
income taxes using an assumed rate of approximately 35% from fiscal year
ended March 31, 1994 and the nine months ended December 31, 1994.
(3) Excludes the gain resulting from the sale of marine construction services
business of $20,539,000 (net of taxes of $11,059,000) which was accounted
for as an increase in Capital in Excess of Par Value.
(4) The pro forma consolidated statements of income (loss) do not include pro
forma adjustments to reflect additional interest income and related
income tax expense on the long-term investments received as proceeds from
the sale.
(page 8)
SIGNATURES
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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.
McDERMOTT INCORPORATED
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(REGISTRANT)
Date: 3/31/95 By: s/Daniel R. Gaubert
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(SIGNATURE)
Daniel R. Gaubert
Vice President, Finance,
on behalf of the Registrant
(page 9)
