<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, 1995
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 1-4095
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:
Title of each class Name of each Exchange on which registered
------------------- -----------------------------------------
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
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 $177,695,131 as of April 26, 1995.
The number of shares of Common Stock, par value $1 per share, outstanding as of
April 26, 1995 was 3,600.
DOCUMENTS INCORPORATED BY REFERENCE
The Information Statement for action to be taken without a meeting of
shareholders on August 8, 1995 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 Schedule Covered by Report of Independent Auditors:
I Condensed Financial Information of Registrant 3
Signature of the Registrant 10
</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 or 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, 1995 and 1994, and for each of the three years in the period
ended March 31,1995, and have issued our report thereon dated May 24, 1995
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 schedule listed in the Index to Financial Statement Schedules in this
Form 10-K/A-1. This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents 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 schedule.
ERNST & YOUNG LLP
New Orleans, Louisiana
May 24, 1995
2
<PAGE> 4
SCHEDULE I
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
BALANCE SHEET
MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
ASSETS 1995 1994
- ------ ---- ----
(In thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 450 $ 22,030
Short-term investments 129,201 -
Accounts receivable - trade 52,702 46,332
Accounts receivable - other 8,110 8,254
Accounts receivable from subsidiaries 439,466 396,391
Accounts receivable from McDermott
International, Inc. 69,880 4,685
Contracts in progress 11,788 24,136
Inventories 494 2,674
Deferred income taxes 23,081 26,942
Other current assets 944 1,697
- ---------------------------------------------------------------------------------------------------------------------
Total Current Assets 736,116 533,141
- ---------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost:
Land 3,991 17,173
Buildings 30,733 32,963
Machinery and equipment 66,631 622,076
Property under construction 472 1,707
- ---------------------------------------------------------------------------------------------------------------------
101,827 673,919
Less accumulated depreciation 71,221 524,727
- ---------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 30,606 149,192
- ---------------------------------------------------------------------------------------------------------------------
Investments 194,035 130,121
- ---------------------------------------------------------------------------------------------------------------------
Note Receivable from Subsidiary 28,212 14,535
- ---------------------------------------------------------------------------------------------------------------------
Investments in Subsidiaries and Other
Investees, at Equity 731,269 770,199
- ---------------------------------------------------------------------------------------------------------------------
Investment in McDermott International, Inc. 605,242 610,392
- ---------------------------------------------------------------------------------------------------------------------
Prepaid Pension Costs 37,115 35,662
- ---------------------------------------------------------------------------------------------------------------------
Other Assets 27,158 21,791
- ---------------------------------------------------------------------------------------------------------------------
TOTAL $ 2,389,753 $ 2,265,033
=====================================================================================================================
</TABLE>
See accompanying notes to condensed financial information.
3
<PAGE> 5
SCHEDULE I
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
1995 1994
---- ----
(In thousands)
<S> <C> <C>
Current Liabilities:
Notes payable and current
maturities of long-term debt $ 257,540 $ 5,198
Accounts payable 9,728 23,677
Accounts payable to subsidiaries 359,561 327,368
Accounts payable to McDermott
International, Inc. 100,588 10,241
Accrued employee benefits 19,645 23,957
Accrued interest 23,216 44,553
Accrued liabilities - other 8,141 21,564
Advance billings on contracts 4 3,049
U. S. and foreign income taxes 25,385 22,914
Dividends payable 3,447 3,809
- ---------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 807,255 486,330
- ---------------------------------------------------------------------------------------------------------------------
Long-Term Notes Payable to Subsidiaries 482,195 430,674
- ---------------------------------------------------------------------------------------------------------------------
Long-Term Debt 417,482 578,824
- ---------------------------------------------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation 74,610 82,840
- ---------------------------------------------------------------------------------------------------------------------
Other Liabilities 16,425 17,590
- ---------------------------------------------------------------------------------------------------------------------
Contingencies
- ---------------------------------------------------------------------------------------------------------------------
Redeemable Preferred Stocks 179,251 196,672
- ---------------------------------------------------------------------------------------------------------------------
Stockholder's Equity:
Common stock 4 4
Capital in excess of par value 620,981 589,085
Deficit (193,341) (104,859)
Minimum pension liability (39) (620)
Currency translation adjustments (15,070) (11,507)
- ---------------------------------------------------------------------------------------------------------------------
Total Stockholder's Equity 412,535 472,103
- ---------------------------------------------------------------------------------------------------------------------
TOTAL $ 2,389,753 $ 2,265,033
=====================================================================================================================
</TABLE>
4
<PAGE> 6
SCHEDULE I
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
STATEMENT OF LOSS
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues $ 303,726 $ 369,496 $ 406,230
- ----------------------------------------------------------------------------------------------------------------------
Cost and Expenses:
Cost of operations (excluding depreciation
and amortization) 268,322 317,246 346,309
Depreciation and amortization 19,699 18,421 31,861
Selling, general and
administrative expenses 42,705 34,877 33,406
- ----------------------------------------------------------------------------------------------------------------------
330,726 370,544 411,576
- ----------------------------------------------------------------------------------------------------------------------
(27,000) (1,048) (5,346)
Equity in Income (Loss) of Subsidiaries
and Other Investees (25,048) 9,277 27,815
- ----------------------------------------------------------------------------------------------------------------------
Operating Income (Loss) (52,048) 8,229 22,469
- ----------------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest income 10,166 3,514 4,552
Interest expense (60,132) (64,733) (80,608)
Other-net 4,714 9,512 543
- ----------------------------------------------------------------------------------------------------------------------
(45,252) (51,707) (75,513)
- ----------------------------------------------------------------------------------------------------------------------
Loss before Benefit from Income Taxes,
Extraordinary Items and Cumulative
Effect of Accounting Changes (97,300) (43,478) (53,044)
Benefit from Income Taxes (23,420) (17,162) (25,965)
- ----------------------------------------------------------------------------------------------------------------------
Loss before Extraordinary Items, and
Cumulative Effect of Accounting Changes (73,880) (26,316) (27,079)
Extraordinary Items - - (10,431)
Cumulative Effect of Accounting Changes (512) (100,750) (236,315)
- ----------------------------------------------------------------------------------------------------------------------
Net Loss $ (74,392) $ (127,066) $ (273,825)
======================================================================================================================
</TABLE>
See accompanying notes to condensed financial information.
5
<PAGE> 7
SCHEDULE I
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
STATEMENT OF CASH FLOWS
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1995
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (74,392) $ (127,066) $ (273,825)
- ---------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 19,699 18,421 31,861
(Gain) loss on sale and disposal of
assets (11) (640) 909
Equity in income of subsidiaries and
other investees, less dividends 27,194 (9,277) (27,815)
Provision for (benefit from) deferred taxes (545) 11,086 (3,046)
Cumulative effect of accounting changes 512 100,750 236,315
Extraordinary items - - 10,431
Other 5,923 2,281 4,409
Changes in assets and liabilities:
Accounts receivable (66,542) 82,260 (168,643)
Accounts payable 58,915 (110,793) 141,121
Inventories (1,758) 1,719 1,346
Net contracts in progress and advance
billings 5,379 64 23,229
Income taxes (14,375) (14,288) (26,109)
Accrued interest (21,337) (7,639) (42,210)
Accrued liabilities (8,486) (14,479) 7,718
Other, net (27,230) 18,032 (26,337)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (97,054) (49,569) (110,646)
- ---------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale and disposal of assets 31 865 7,018
Purchases of property, plant and equipment (21,179) (12,218) (13,094)
Purchases of government obligations, under
reverse repurchase agreements with an
affiliate - (674,203) (6,033,975)
Sales of government obligations, under
reverse repurchase agreements with an
affiliate - 753,063 6,102,052
Proceeds from redemption of International
Preferred Stock 2,500 2,500 2,500
Decrease (increase) in loan receivable from
subsidiary (13,677) 2,805 (9,733)
Other 206 - (381)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (32,119) 72,812 54,387
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 8
CONTINUED
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt $ (16,250) $ (189,400) $ (68,433)
Issuance of long-term debt - 87,000 89,000
Increase in loans from subsidiaries 47,636 8,547 50,075
Increase in short-term borrowings 107,540 - -
Dividends paid (14,142) (15,719) (15,885)
Capital contribution from International - 100,000 -
Redemption of preferred stock (17,182) (7,810) -
Other (9) (185) (1,055)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 107,593 (17,567) 53,702
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (21,580) 5,676 (2,557)
- ---------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 22,030 16,354 18,911
- ---------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR $ 450 $ 22,030 $ 16,354
===========================================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Interest, including intercompany
interest (net of amount capitalized) $ 81,469 $ 72,372 $ 122,818
Income taxes, net of refunds $ (28,889) $ (4,621) $ 61,194
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed financial information.
7
<PAGE> 9
SCHEDULE I
McDERMOTT INCORPORATED
(PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION
FOR THE THREE FISCAL YEAR ENDED MARCH 31, 1995
================================================================================
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: 1995 1994
---- ----
(In thousands)
<S> <C> <C>
Unsecured Debt:
Series A Medium-Term Notes (maturities ranging from
2 to 8 years; interest at various rates ranging
from 7.92% to 9.00%) $ 75,000 $ 75,000
Series B Medium-Term Notes (maturities ranging from
3 to 28 years; interest at various rates ranging
from 6.50% to 8.75%) 101,000 101,000
9.375 % Notes due 2002 ($225,000,000 face value) 224,482 224,432
10.25% Notes due June 1, 1995 150,000 150,000
6.80% Pollution Control Bonds due February 2009 17,000 17,000
Secured Debt:
Other notes payable and capital lease obligations - 16,590
- ---------------------------------------------------------------------------------------------------------------------------
567,482 584,022
Less: Amounts due within one year 150,000 5,198
- ---------------------------------------------------------------------------------------------------------------------------
$ 417,482 $ 578,824
===========================================================================================================================
</TABLE>
8
<PAGE> 10
Notes payable and current maturities of long-term debt consist of:
<TABLE>
<CAPTION>
1995 1994
---- ----
(In thousands)
<S> <C> <C>
Short-term lines of credit:
Unsecured $ 1,850 $ -
Repurchase Agreements 105,690 -
Current Maturities of long-term debt 150,000 5,198
- ----------------------------------------------------------------------------------------------------------------------------
$ 257,540 $ 5,198
============================================================================================================================
</TABLE>
Maturities on long-term debt during the five fiscal years subsequent to March
31, 1995 are as follows: 1996 - $150,000,000; 1997 - $-0-; 1998 - $45,000,000;
1999 - $27,000,000; 2000 - $-0-.
NOTE 3 - DIVIDENDS RECEIVED
McDermott Incorporated received $2,146,000 in dividends from its equity
investees in fiscal year 1995.
NOTE 4 - CONTINGENCIES
McDermott Incorporated is contingently liable under standby letters of credit
totaling $6,200,000 at March 31, 1995 issued in the normal course of business.
9
<PAGE> 11
SIGNATURE OF THE REGISTRANT
Pursuant to the requirements of Sections 13 or 15(d) 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)
July 14, 1995 By: /s/ Daniel R. Gaubert
Daniel R. Gaubert
Vice President, Finance
and Controller
10
