<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 1 0 - K/A-2
[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 1-8430
McDERMOTT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 72-0593134
- --------------------------------------------------------------------------------
(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) 587-5400
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of each class on which registered
------------------- -------------------
Common Stock, $1.00 par value New York Stock Exchange
Rights to Purchase Common Stock New York Stock Exchange
(Currently Traded with Common Stock)
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 $1,444,216,074 as of April 26, 1995.
The number of shares outstanding of the Company's Common Stock at April 26,
1995 was 54,063,698.
DOCUMENTS INCORPORATED BY REFERENCE
The Proxy Statement for the 1995 Annual Meeting of Shareholders is incorporated
by reference into Part III of this report.
<PAGE> 2
McDERMOTT INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULES AND EXHIBITS
<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 Registrant 9
Exhibit 99 - Additional Exhibits
Supplementary Financial Information on Panamanian
Securities Regulations
</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, Notes thereto or in the Form 10-K/A-1 filed on June 28, 1995.
-1-
<PAGE> 3
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
McDermott International, Inc.
We have audited the consolidated financial statements of McDermott
International, Inc. 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 and Exhibits in this Form 10-K/A-2. 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 INTERNATIONAL, INC.
(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 $ 212 $ 2,413
Accounts receivable - trade 110 13,819
Accounts receivable - other 421 31,526
Accounts receivable from subsidiaries 649,355 718,646
Contracts in progress 2 56,377
Other current assets 518 955
- -------------------------------------------------------------------------------------------------------------------
Total Current Assets 650,618 823,736
- -------------------------------------------------------------------------------------------------------------------
Investments in Subsidiaries and
Other Investees, at Equity 1,239,036 851,469
- -------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost:
Buildings 3,420 11,486
Machinery and equipment 10,405 73,345
Property under construction 42 567
- -------------------------------------------------------------------------------------------------------------------
13,867 85,398
Less accumulated depreciation 13,192 67,954
- -------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 675 17,444
- -------------------------------------------------------------------------------------------------------------------
Notes Receivable from Subsidiaries and Other
Investees 270,802 251,510
- -------------------------------------------------------------------------------------------------------------------
Other Assets 31,932 8,307
- -------------------------------------------------------------------------------------------------------------------
TOTAL $ 2,193,063 $ 1,952,466
===================================================================================================================
</TABLE>
See accompanying notes to condensed financial information.
-3-
<PAGE> 5
Schedule I
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994
---- ----
(In thousands)
<S> <C> <C>
Current Liabilities:
Notes payable and current
maturities of long-term debt $ 18,500 $ 35,970
Accounts payable 2,194 21,873
Accounts payable to subsidiaries 1,324,156 1,063,774
Accrued liabilities - other 23,250 73,277
Advance billings on contracts 2 32,037
Income taxes 213 29,832
- -------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,368,315 1,256,763
- -------------------------------------------------------------------------------------------------------------------
Long-Term Debt 55,300 73,800
- -------------------------------------------------------------------------------------------------------------------
Notes Payable to Subsidiaries 47,784 62,712
- -------------------------------------------------------------------------------------------------------------------
Other Liabilities 11,085 16,933
- -------------------------------------------------------------------------------------------------------------------
Contingencies
- -------------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock 2,875 2,875
Common stock 53,960 53,444
Capital in excess of par value 936,134 730,987
Deficit (249,061) (196,216)
Minimum pension liability (391) (931)
Net unrealized loss on investments (8,050) -
Currency translation adjustments (24,888) (47,901)
- -------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 710,579 542,258
- -------------------------------------------------------------------------------------------------------------------
TOTAL $ 2,193,063 $ 1,952,466
===================================================================================================================
</TABLE>
-4-
<PAGE> 6
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
STATEMENT OF INCOME (LOSS)
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(In thousands)
<S> <C> <C> <C>
Revenues $ 41,855 $ 32,635 $ 201,339
- -------------------------------------------------------------------------------------------------------------------------
Costs and Expenses:
Cost of operations (excluding depreciation
and amortization) 34,135 29,571 188,879
Depreciation and amortization 4,698 5,422 3,319
Selling, general and administrative expenses 8,623 27,402 20,066
- -------------------------------------------------------------------------------------------------------------------------
47,456 62,395 212,264
- -------------------------------------------------------------------------------------------------------------------------
(5,601) (29,760) (10,925)
Equity in Income of Subsidiaries
and Other Investees 877 107,942 62,141
- -------------------------------------------------------------------------------------------------------------------------
Operating Income (Loss) (4,724) 78,182 51,216
- -------------------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest income 25,047 19,003 21,693
Interest expense (13,916) (10,473) (10,461)
Other - net 9,038 (292) 17,004
- -------------------------------------------------------------------------------------------------------------------------
20,169 8,238 28,236
- -------------------------------------------------------------------------------------------------------------------------
Income before Provision for (Benefit from)
Income Taxes, Extraordinary Items, and
Cumulative Effect of Accounting Changes 15,445 86,420 79,452
Provision for (Benefit from) Income Taxes 4,569 (3,536) 12,129
- -------------------------------------------------------------------------------------------------------------------------
Income before Extraordinary Items and
Cumulative Effect of Accounting Changes 10,876 89,956 67,323
Extraordinary Items - - (10,431)
Cumulative Effect of Accounting Changes (1,765) (100,750) (245,624)
- -------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) $ 9,111 $ (10,794) $ (188,732)
=========================================================================================================================
</TABLE>
See accompanying notes to condensed financial information
-5-
<PAGE> 7
Schedule I
McDERMOTT INTERNATIONAL, INC.
(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 Income (Loss) $ 9,111 $ (10,794) $ (188,732)
- -------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to
net cash provided by operating
activities:
Depreciation and amortization 4,698 5,422 3,319
Equity in income or loss of subsidiaries
and other investees, less dividends 10,922 (101,787) (36,438)
Provision for deferred taxes (627) (2,997) 1,278
Cumulative effect of accounting changes 1,765 100,750 245,624
Extraordinary items - - 10,431
Other (3,048) (346) 1,167
Changes in assets and liabilities:
Net contracts in progress and advance
billings 14,718 (14,940) (11,981)
Accounts and notes receivable 96,338 88,034 (53,471)
Accounts payable 67,603 (61,860) 85,876
Income taxes (28,992) (757) 4,780
Other, net (55,971) 5,142 (1,196)
- -------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 116,517 5,867 60,657
- -------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Northern Ocean Services Limited - (58,040) -
Proceeds from sale and disposal of assets 8,334 368 11,102
Purchases of property, plant and equipment (562) (2,120) (13,005)
Investments in subsidiaries (200) (100,069) -
Increase in loans to subsidiaries (16,600) - -
Other - - 2,122
- -------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (9,028) (159,861) 219
- -------------------------------------------------------------------------------------------------------------------------
</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 $ (16,600) $ (15,000) $ (14,258)
Increase (decrease) in short-term borrowing (19,370) 18,596 (284)
Issuance of common stock 3,194 16,441 8,034
Issuance of preferred stock - 140,066 -
Increases (decreases) in loans from subsidiaries (14,928) 50,301 (788)
Dividends paid (61,827) (56,773) (51,528)
Other (159) - -
- -------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (109,690) 153,631 (58,824)
- -------------------------------------------------------------------------------------------------------------------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH - (92) -
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (2,201) (455) 2,052
- -------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 2,413 2,868 816
- -------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END
OF YEAR $ 212 $ 2,413 $ 2,868
=========================================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, including intercompany
interest (net of amount capitalized) $ 14,186 $ 10,989 $ 12,702
Income taxes, net of refunds $ 252 $ 371 $ 5,878
=========================================================================================================================
</TABLE>
See accompanying notes to condensed financial information.
-7-
<PAGE> 9
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION
FOR THE THREE FISCAL YEARS 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 cash flows of
McDermott International, Inc. (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
International, Inc.'s consolidated financial statements.
NOTE 2 - LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt consists of: 1995 1994
---- ----
(In thousands)
<S> <C> <C>
10.375% Note payable due 1998 (Secured) $ 73,800 $ 90,400
Less: Amounts due within one year 18,500 16,600
-------------- --------------
$ 55,300 $ 73,800
============== ==============
</TABLE>
Maturities of long-term debt during the years subsequent to March 31, 1995 are
as follows: 1996 - $18,500,000; 1997 - $20,500,000; 1998 - $22,600,000; 1999 -
$12,200,000.
NOTE 3 - CONTINGENCIES
McDermott International, Inc. is contingently liable under standby letters of
credit totaling $3,473,000 at March 31, 1995 issued in the normal course of
business.
McDermott International, Inc. has guaranteed the indebtedness of certain of its
subsidiaries and other investees. At March 31, 1995, these guarantees included
$40,817,000 of loans to and $41,242,000 of standby letters of credit issued by
certain subsidiaries and other investees.
NOTE 4 - DIVIDENDS RECEIVED
McDermott International, Inc. received dividends from its consolidated
subsidiaries of $11,799,000, $138,438,000 (including $132,283,000 of
investments) and $25,703,000 for the years ended March 31, 1995, March 31, 1994
and March 31, 1993, respectively.
-8-
<PAGE> 10
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 INTERNATONAL, INC.
(REGISTRANT)
By: /s/ Daniel R. Gaubert
Daniel R. Gaubert
Vice President, Finance
and Controller
July 14, 1995
-9-
<PAGE> 11
EXHIBIT INDEX
Exhibit 99 - Additional Exhibits
Supplementary Financial Information on Panamanian
Securities Regulations
<PAGE> 1
Exhibit 99
McDERMOTT INTERNATIONAL, INC.
ADDITIONAL EXHIBITS
SUPPLEMENTARY FINANCIAL INFORMATION
PREPARED IN ACCORDANCE WITH AND SOLELY FOR THE PURPOSE OF
COMPLYING WITH CERTAIN PANAMANIAN SECURITIES REGULATIONS
<TABLE>
<CAPTION>
F.Y.E.
3/31/95
-------
(Unaudited)
(In thousands)
<S> <C> <C>
ARTICLE 29
----------
RULE #9 - INVESTMENTS IN SUBSIDIARIES AND OTHER
- -----------------------------------------------
INVESTEES AT EQUITY
- ----------------------
Head Office (Parent Company) $ 1,239,036
Subsidiaries and Affiliates -
Eliminations/Other (1,076,007)
--------------
McDERMOTT INTERNATIONAL, INC. $ 163,029
==============
RULE #25C - PARENT COMPANY ACCOUNTS PAYABLE TO
- ----------------------------------------------
SUBSIDIARIES
- ---------------
Head Office (Parent Company) $ 1,362,431
Eliminations/Other (1,362,431)
--------------
McDERMOTT INTERNATIONAL, INC. $ -0-
==============
ARTICLE 30
----------
(c) - OPERATING EXPENSES BY SEGMENT
- -----------------------------------
Power Generation Systems and Equipment $ 1,642,425
Marine Construction Services 1,346,300
Eliminations (10,474)
--------------
McDERMOTT INTERNATIONAL, INC. $ 2,978,251
==============
RULE #40 - OPERATING REVENUES
- -----------------------------
Head Office (Parent Company) $ 41,855
Subsidiaries and Affiliates 3,004,626
Eliminations/Other (2,801)
--------------
McDERMOTT INTERNATIONAL, INC. $ 3,043,680
==============
RULE #41 - OPERATING EXPENSES
- -----------------------------
Head Office (Parent Company) $ 47,456
Subsidiaries and Affiliates 2,992,211
Eliminations/Other (2,801)
--------------
McDERMOTT INTERNATIONAL, INC. $ 3,036,866
==============
</TABLE>
-10-
<PAGE> 2
<TABLE>
<CAPTION>
F.Y.E.
3/31/95
-------
(Unaudited)
(In thousands)
<S> <C> <C>
ARTICLE 30 - Continued
----------
RULE #43 - DIVIDENDS RECEIVED
- -----------------------------
Head Office (Parent Company)
from Subsidiaries and Affiliates $ 11,799
Subsidiaries and Affiliates
from Other Corporations 76,481
Eliminations/Other (11,799)
-------------
McDERMOTT INTERNATIONAL, INC. $ 76,481
=============
RULE #44 - INTEREST INCOME
- --------------------------
Head Office (Parent Company):
from Subsidiaries and Affiliates $ 19,992
from Other Corporations 5,055
Subsidiaries and Affiliates
from Other Corporations 47,685
Eliminations (19,992)
-------------
McDERMOTT INTERNATIONAL, INC. $ 52,740
=============
RULE #46 - OTHER MISCELLANEOUS REVENUES
- ---------------------------------------
Gain on Asset Disposals during 1995 - Net $ 1,874
Foreign Currency Transaction Losses - Net (1,057)
Bank Fees and Discounts on Sale
of Receivables (9,709)
Provision for reduction in estimated insurance
recoveries (14,478)
Other Items - Net (9,921)
-------------
McDERMOTT INTERNATIONAL, INC. $ (33,291)
=============
</TABLE>
RULE #51 - INVESTMENTS IN UNCONSOLIDATED AFFILIATES AT EQUITY
<TABLE>
<CAPTION>
(Unaudited)
(In thousands)
<S> <C>
Balance at 3/31/94 $ 128,006
Additional Investments 48,130
Equity Income 33,852
Dividends Received (76,481)
Other Changes 29,522
-----------
Balance at 3/31/95 $ 163,029
===========
</TABLE>
-11-
