<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) F O R M 1 0 - K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Preferred 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 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. [_]
The aggregate market value of the Company'S Common Stock held by non-affiliates
of the registrant was $1,725,490,308 as of April 29, 1999.
The number of shares outstanding of the Company's Common Stock at April 29, 1999
was 59,248,598.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934
in connection with the Company's 1999 Annual Meeting of Stockholders are
incorporated by reference into Part III hereof.
<PAGE>
McDERMOTT INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULES AND EXHIBITS
Page
Report of PricewaterhouseCoopers LLP 3
Report of Ernst & Young LLP 4
Financial Statement Schedule Covered by Reports of Independent Accountants:
I Condensed Financial Information of Registrant 5
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.
Signature of Registrant 12
Exhibit Index
99 Supplementary Financial Information on Panamanian
Securities Regulations
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders
of McDermott International, Inc.
We have audited the consolidated financial statements of McDermott
International, Inc. as of March 31, 1999 and for the year then ended, and have
issued our report thereon dated May 14, 1999. Our audit also included Schedule
I - Condensed Financial Information of Registrant as of March 31, 1999 and for
the year then ended. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
May 14, 1999
3
<PAGE>
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, 1998, and for each of the two years in the
period ended March 31, 1998, and have issued our report thereon dated May 19,
1998. Our audits also included the financial statement schedule as of March 31,
1998 and for each of the two fiscal years in the period ended March 31, 1998
listed in the Index to Financial Statement Schedules and Exhibits in the Form
10-K/A. 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.
ERNST & YOUNG LLP
New Orleans, Louisiana
May 19, 1998
4
<PAGE>
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
CONDENSED BALANCE SHEET
MARCH 31, 1999 AND 1998
ASSETS
- ------ 1999 1998
---- ----
(In thousands)
Current Assets:
Cash and cash equivalents $ 9,374 $ 10,272
Accounts receivable - trade, net 357 561
Accounts receivable - other 2,244 1,993
Accounts receivable from subsidiaries 95,236 107,305
Other current assets 677 3,474
- ---------------------------------------------------------------
Total Current Assets 107,888 123,605
- ---------------------------------------------------------------
Investments in Subsidiaries and
Other Investees, at Equity 1,626,555 1,320,178
- ---------------------------------------------------------------
Property, Plant and Equipment, at Cost:
Buildings 3,328 3,328
Machinery and equipment 6,741 6,745
- ---------------------------------------------------------------
10,069 10,073
Less accumulated depreciation 10,069 10,066
- ---------------------------------------------------------------
Net Property, Plant and Equipment - 7
- ---------------------------------------------------------------
Investments in Debt Securities 29,801 38,730
- ---------------------------------------------------------------
Other Assets 84,317 54,641
- ---------------------------------------------------------------
TOTAL $1,848,561 $1,537,161
===============================================================
See accompanying notes to condensed financial information.
5
<PAGE>
Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------ 1999 1998
---- ----
(In thousands)
Current Liabilities:
Current maturities of long-term debt $ - $ 12,200
Accounts payable 478 632
Accounts payable to subsidiaries 1,041,941 819,254
Accrued liabilities - other 7,237 11,551
Income taxes 1,661 2,888
- ---------------------------------------------------------------------
Total Current Liabilities 1,051,317 846,525
- ---------------------------------------------------------------------
Other Liabilities 3,510 10,863
- ---------------------------------------------------------------------
Commitments and Contingencies.
Stockholders' Equity:
Preferred stock - 2,875
Common stock 61,148 56,608
Capital in excess of par value 1,028,393 1,012,338
Accumulated deficit (200,432) (341,916)
Treasury stock (62,731) (3,575)
Accumulated other comprehensive loss (32,644) (46,557)
- ---------------------------------------------------------------------
Total Stockholders' Equity 793,734 679,773
- ---------------------------------------------------------------------
TOTAL $1,848,561 $1,537,161
=====================================================================
6
<PAGE>
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
CONDENSED STATEMENT OF INCOME (LOSS)
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1999
1999 1998 1997
---- ---- ----
(In thousands)
Costs and Expenses:
Cost of operations (excluding depreciation
and amortization) $ 201 $ 640 $ 16,072
Depreciation and amortization 1,479 2,495 761
Selling, general and administrative expenses 647 1,246 3,284
- -------------------------------------------------------------------------------
2,327 4,381 20,117
- -------------------------------------------------------------------------------
Gain (Loss) on Asset Disposals-net - 2 (24)
- -------------------------------------------------------------------------------
Operating Loss before Equity in
Income (Loss) of Investees (2,327) (4,379) (20,141)
- -------------------------------------------------------------------------------
Equity in Income (Loss) of Subsidiaries
and Other Investees 149,448 221,974 (190,569)
- -------------------------------------------------------------------------------
Operating Income (Loss) 147,121 217,595 (210,710)
- -------------------------------------------------------------------------------
Other Income (Expense):
Interest income 2,841 1,870 6,729
Interest expense (2,908) (4,728) (5,225)
Other - net 18,693 953 1,871
- -------------------------------------------------------------------------------
18,626 (1,905) 3,375
- -------------------------------------------------------------------------------
Income (Loss) before Benefit from Income
Taxes and Extraordinary Item 165,747 215,690 (207,335)
- -------------------------------------------------------------------------------
Benefit from Income Taxes (12,067) - (1,230)
- -------------------------------------------------------------------------------
Income (Loss) before Extraordinary Item 177,814 215,690 (206,105)
- -------------------------------------------------------------------------------
Extraordinary Item (24,452) - -
- -------------------------------------------------------------------------------
Net Income (Loss) $153,362 $215,690 $(206,105)
===============================================================================
See accompanying notes to condensed financial information.
7
<PAGE>
Schedule I
McDERMOTT INTERNATIONAL, INC
(PARENT COMPANY ONLY)
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE FISCAL YEARS ENDED 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(In thousands)
<S> <C> <C> <C>
Net Income (Loss) $153,362 $215,690 $(206,105)
- ---------------------------------------------------------------------------------------
Other Comprehensive Income (Loss):
Equity in other comprehensive income (loss) of
subsidiaries and other investees 14,078 (1,879) (14,417)
Foreign currency translation adjustments (79) - -
Minimum pension liability adjustments 15 284 169
Unrealized gains (losses) on investments:
Unrealized gains arising during the period,
net of reclassification adjustments 131 -
Reclassification adjustment for losses
included in net income (101)
- ---------------------------------------------------------------------------------------
Other Comprehensive Income (Loss) 13,913 (1,464) (14,248)
- ---------------------------------------------------------------------------------------
Comprehensive Income (Loss) 167,275 214,226 (220,353)
=======================================================================================
</TABLE>
See accompanying notes to condensed financial information.
8
<PAGE>
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
CONDENSED STATEMENT OF CASH FLOWS
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1999
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 153,362 $215,690 $(206,105)
- -----------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 1,479 2,495 761
Equity in income or loss of subsidiaries
and other investees, less dividends (105,796) (214,774) 207,769
(Gain) loss on asset disposals-net - (2) 24
Benefit from deferred taxes (1,437) - (1,230)
Other 10,217 10,419 7,385
Changes in assets and liabilities:
Accounts and notes receivable 12,022 27,398 153,023
Accounts payable 222,533 4,582 (196,099)
Income taxes (1,236) 526 (4,212)
Other, net (62,803) (26,909) (6,897)
- -----------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 228,341 19,425 (45,581)
- -----------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from asset disposals 3 2 6
Purchases of property, plant and equipment - - 2
Investments in subsidiaries (158,000) - (68,162)
Purchases of available-for-sale securities (16,010) - -
Maturities of available-for-sale securities 7,000 5,000 -
Sales of available-for-sale securities 17,834 - -
Decrease (increase) in loans to subsidiaries (300) - 231,000
- -----------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (149,473) 5,002 162,846
===================================================================================
</TABLE>
9
<PAGE>
Continued
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt $ (12,200) $(22,600) $ (20,500)
Issuance of common stock 4,173 31,431 565
Decrease in loans from subsidiaries - - (45,455)
Dividends paid (13,810) (19,367) (51,947)
Purchase of McDermott International, Inc. stock (59,156) (3,662) -
Other 1,227 - -
- -----------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (79,766) (14,198) (117,337)
- -----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (898) 10,229 (72)
- -----------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 10,272 43 115
- -----------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END
OF YEAR $ 9,374 $ 10,272 $ 43
- -----------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, including intercompany
interest (net of amount capitalized) $ 3,182 $ 5,317 $ 5,778
Income taxes, net of refunds $ 1 $ - $ -
===================================================================================
</TABLE>
See accompanying notes to condensed financial information.
10
<PAGE>
Schedule I
McDERMOTT INTERNATIONAL, INC.
(PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION
FOR THE THREE FISCAL YEARS ENDED MARCH 31, 1999
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
Long-term debt consists of:
1999 1998
---- ----
(In thousands)
10.375% Note payable due 1998 (Secured) $ - $ 12,200
Less: Amounts due within one year - 12,200
------- --------
$ - $ -
======= ========
NOTE 3 - CONTINGENCIES
McDermott International, Inc. has guaranteed the indebtedness of certain of its
subsidiaries and other investees. At March 31, 1999, these guarantees included
$434,000 of loans to and $1,168,000 of standby letters of credit issued by
certain subsidiaries and other investees.
At March 31, 1999, McDermott International, Inc. had pledged all of the fair
value of its investments in debt securities to secure payments under and in
connection with certain reinsurance agreements.
NOTE 4 - DIVIDENDS RECEIVED
McDermott International, Inc. received dividends from its consolidated
subsidiaries of $19,200,000, $7,200,000, and $17,200,000 for the years ended
March 31, 1999, 1998 and 1997, respectively.
11
<PAGE>
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 INTERNATIONAL, INC.
/s/Daniel R. Gaubert
----------------------------------
By: Daniel R. Gaubert
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
June 29, 1999
12
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
99 Supplementary Financial Information on Panamanian Securities
Regulations
13
<PAGE>
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.
3/31/99
-------
(Unaudited)
(In thousands)
ARTICLE 29
<S> <C>
RULE #9 - INVESTMENTS IN SUBSIDIARIES AND OTHER
INVESTEES AT EQUITY
Head Office (Parent Company) $ 1,626,555
Subsidiaries and Affiliates -
Eliminations/Other (1,565,162)
-----------
McDERMOTT INTERNATIONAL, INC. $ 61,393
===========
RULE #25C - PARENT-COMPANY ACCOUNTS AND NOTES
PAYABLE TO SUBSIDIARIES
Head Office (Parent Company) $ 1,041,941
Eliminations/Other (1,041,941)
-----------
McDERMOTT INTERNATIONAL, INC. $ -
===========
ARTICLE 30
(c) - OPERATING EXPENSES BY SEGMENT
Power Generation Systems $ 975,899
Marine Construction Services 1,153,088
Government Operations 343,353
Other Operations 410,614
Eliminations (6,028)
-----------
McDERMOTT INTERNATIONAL, INC. $ 2,876,926
===========
RULE #40 - OPERATING REVENUES
Head Office (Parent Company) $ -
Subsidiaries and Affiliates 3,149,985
Eliminations/Other -
-----------
McDERMOTT INTERNATIONAL, INC. $ 3,149,985
===========
</TABLE>
14
<PAGE>
Continued
<TABLE>
<CAPTION>
F.Y.E.
3/31/99
-------
(Unaudited)
(In thousands)
<S> <C>
ARTICLE 30 - Continued
RULE #41 - OPERATING EXPENSES
Head Office (Parent Company) $ 290
Subsidiaries and Affiliates 2,958,568
-----------
McDERMOTT INTERNATIONAL, INC. $ 2,958,858
-----------
RULE #43 - DIVIDENDS RECEIVED
Head Office (Parent Company)
from Subsidiaries and Affiliates $ 19,200
Subsidiaries and Affiliates
from Other Corporations 28,650
Eliminations/Other (19,200)
-----------
McDERMOTT INTERNATIONAL, INC. $ 28,650
-----------
RULE #44 - INTEREST INCOME
Head Office (Parent Company):
from Subsidiaries and Affiliates $ 3
from Other Corporations 2,839
Subsidiaries and Affiliates
from Other Corporations 95,126
Eliminations (3)
-----------
McDERMOTT INTERNATIONAL, INC. $ 97,965
===========
RULE #46 - OTHER MISCELLANEOUS REVENUES
Foreign Currency Transaction Gains - Net 3,384
Gain on Curtailment of Postretirement Plans (21,940)
Other Items - Net (243)
-----------
McDERMOTT INTERNATIONAL, INC. $ (18,799)
===========
RULE #51 - INVESTMENTS IN UNCONSOLIDATED AFFILIATES AT EQUITY
Balance at 3/31/98 $ 72,389
Equity Income 8,379
Dividends Received (28,650)
Other Changes 9,275
-----------
Balance at 3/31/99 $ 61,393
===========
</TABLE>
15
