<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1996
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 No. 1-13570
J. RAY McDERMOTT, S.A.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 72-1278896
- --------------------------------------------------------------------------------
(State or other Jurisdiction (I.R.S. Employer
of 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) 587-5300
--------------
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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of Common Stock, par value $.01 per share, outstanding as
of July 26, 1996 was 40,274,517.
<PAGE> 2
J. RAY McDERMOTT, S.A.
INDEX - FORM 10-Q
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheet
June 30, 1996 and March 31, 1996 4
Condensed Consolidated Statement of Income
Three Months Ended June 30, 1996 and 1995 6
Condensed Consolidated Statement of Cash Flows
Three Months Ended June, 1996 and 1995 7
Notes to Condensed Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 17
SIGNATURES 18
Exhibit 11 - Calculation of Earnings Per Common
and Common Equivalent Share 20
</TABLE>
2
<PAGE> 3
PART I
J. RAY McDERMOTT, S.A.
FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
3
<PAGE> 4
J. RAY McDERMOTT, S.A.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
ASSETS
<TABLE>
<CAPTION>
6/30/96 3/31/96
------- --------
(Unaudited)
(In thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 94,815 $ 166,408
Accounts receivable-trade 253,042 193,643
Accounts receivable-unconsolidated
affiliates 39,897 46,209
Accounts receivable-other 59,885 57,421
Contracts in progress 206,049 181,375
Other current assets 58,180 57,291
- --------------------------------------------------------------------------------------------------------------
Total Current Assets 711,868 702,347
- --------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment, at Cost: 1,227,714 1,186,233
Less accumulated depreciation 822,832 793,833
- --------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 404,882 392,400
- --------------------------------------------------------------------------------------------------------------
Excess of Cost Over Fair Value of Net Assets
of Purchased Businesses Less Accumulated
Amortization of $34,683,000 at June 30, 1996
and $28,799,000 at March 31, 1996 317,231 316,863
- --------------------------------------------------------------------------------------------------------------
Investment in Unconsolidated Affiliates 74,589 72,806
- --------------------------------------------------------------------------------------------------------------
Other Assets 50,342 53,329
- --------------------------------------------------------------------------------------------------------------
TOTAL $ 1,558,912 $ 1,537,745
==============================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
6/30/96 3/31/96
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
Current Liabilities:
Notes payable and current
maturities of long-term debt $ 120,431 $ 96,130
Accounts payable 139,531 103,473
Accounts payable to International and affiliates 33,225 47,695
Accrued contract costs 34,620 69,827
Accrued liabilities - other 96,018 120,515
Deposit on equipment sale 30,000 30,000
Advance billings on contracts 49,917 36,581
U.S. and foreign income taxes 30,873 28,717
- -------------------------------------------------------------------------------------------------------------
Total Current Liabilities 534,615 532,938
- -------------------------------------------------------------------------------------------------------------
Long-Term Debt 112,081 114,532
- -------------------------------------------------------------------------------------------------------------
Note Payable to International 231,000 231,000
- -------------------------------------------------------------------------------------------------------------
Deferred and Non-Current Income Taxes 47,219 50,016
- -------------------------------------------------------------------------------------------------------------
Other Liabilities 71,469 55,362
- -------------------------------------------------------------------------------------------------------------
Contingencies
- -------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, authorized 10,000,000 shares;
outstanding 3,200,000 Series A $2.25 cumulative
convertible, par value $0.01 per share,
(liquidation preference $160,000,000) 32 32
Common stock, par value $0.01 per share,
authorized 60,000,000 shares; outstanding
40,267,947 at June 30, 1996 and
40,197,946 at March 31, 1996 403 402
Capital in excess of par value 582,203 581,609
Deficit (3,874) (14,576)
Currency translation adjustments (16,236) (13,570)
- -------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 562,528 553,897
- -------------------------------------------------------------------------------------------------------------
TOTAL $ 1,558,912 $ 1,537,745
=============================================================================================================
</TABLE>
5
<PAGE> 6
J. RAY McDERMOTT, S.A.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
JUNE 30, 1996
<TABLE>
<CAPTION>
THREE MONTHS ENDED
6/30/96 6/30/95
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
Revenues $ 389,189 $ 311,803
- -------------------------------------------------------------------------------------------------------------
Costs and Expenses:
Cost of operations (excluding
depreciation and amortization) 318,427 246,702
Depreciation and amortization 21,147 22,132
Selling, general and
administrative expenses 31,361 30,555
- -------------------------------------------------------------------------------------------------------------
370,935 299,389
- -------------------------------------------------------------------------------------------------------------
Operating Income before Equity in
Income (Loss) of Investees 18,254 12,414
Equity in Income (Loss) of Investees 1,298 (898)
- -------------------------------------------------------------------------------------------------------------
Operating Income 19,552 11,516
- -------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest income 3,720 593
Interest expense (10,173) (9,348)
Other-net 1,199 3,752
- -------------------------------------------------------------------------------------------------------------
(5,254) (5,003)
- -------------------------------------------------------------------------------------------------------------
Income before Provision for Income Taxes 14,298 6,513
Provision for Income Taxes 1,865 3,246
- -------------------------------------------------------------------------------------------------------------
Net Income $ 12,433 $ 3,267
=============================================================================================================
Net Income Applicable to Common Stock
(after Preferred Stock Dividends) $ 10,633 $ 1,211
=============================================================================================================
Earnings per Common and Common Equivalent
Share (Primary and Fully Diluted) $ 0.26 $ 0.03
=============================================================================================================
Weighted Average Number of Common and
Common Equivalent Shares Outstanding 40,684,352 39,348,393
Cash Dividends:
Per preferred share $ 0.5625 $ 0.5625
=============================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE> 7
J. RAY McDERMOTT, S.A.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
JUNE 30, 1996
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
6/30/96 6/30/95
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 12,433 $ 3,267
- -------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 21,147 22,132
Equity in income or loss of investees,
less dividends (1,298) 950
Other 305 197
Changes in assets and liabilities:
Accounts receivable (53,542) (12,616)
Net contracts in progress and advance billings (7,270) (61,696)
Accounts payable 18,203 14,360
Accrued contract costs (35,207) (11,316)
Accrued liabilities (26,171) (8,660)
Income taxes 1,980 (3,027)
Other, net 5,880 (2,141)
- -------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (63,540) (58,550)
- -------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (25,681) (17,080)
Investment in equity investees (1,939) (3,414)
Other 911 264
- -------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (26,709) (20,230)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
CONTINUED
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
6/30/96 6/30/95
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt $ (2,919) $ -
Increase in short-term borrowing 24,633 89,690
Preferred dividends paid (1,800) (2,017)
Other (1,302) (557)
- -------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 18,612 87,116
- -------------------------------------------------------------------------------------------------------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH 44 (75)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (71,593) 8,261
- -------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 166,408 52,224
- -------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,815 $ 60,485
=============================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 8,090 $ 6,924
Income taxes (net of refunds) $ 2,135 $ 3,162
=============================================================================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
8
<PAGE> 9
J. RAY McDERMOTT, S.A.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
NOTE 1 - BASIS OF PRESENTATION
J. Ray McDermott, S.A. ("JRM") is a majority owned subsidiary of McDermott
International, Inc. ("International").
The accompanying unaudited condensed consolidated financial statements are
presented in U.S. Dollars, and have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the three
months ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the fiscal year ending March 31, 1997. For further
information, refer to the consolidated financial statements and footnotes
thereto included in JRM's Annual Report on Form 10-K for the fiscal year ended
March 31, 1996.
9
<PAGE> 10
NOTE 2 - SUMMARIZED INCOME STATEMENT INFORMATION OF UNCONSOLIDATED
AFFILIATES
The combined financial results of two of JRM's joint ventures, HeereMac and
McDermott-ETPM West, Inc., accounted for using the equity method are summarized
below. These ventures were significant (as defined by applicable Securities
and Exchange Commission regulations) in fiscal year 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
6/30/96 6/30/95
-------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
Revenues $ 171,353 $ 191,919
- -------------------------------------------------------------------------------------------------------------
Operating Income $ 22,719 $ 5,612
- -------------------------------------------------------------------------------------------------------------
Income before Income Taxes $ 713 $ 10,211
Provision for Income Taxes 1,974 1,673
- -------------------------------------------------------------------------------------------------------------
Net Income (Loss) $ (1,261) $ 8,538
=============================================================================================================
Equity in Net Income (Loss) $ (1,205) $ 3,982
=============================================================================================================
</TABLE>
10
<PAGE> 11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
J. Ray McDermott, S.A. ("JRM") is a majority owned subsidiary of McDermott
International, Inc. ("International"). A significant portion of JRM's revenues
and operating results are derived from its foreign operations. As a result,
JRM's operations and financial results are affected by international factors,
such as changes in foreign currency exchange rates. JRM attempts to minimize
its exposure to changes in foreign currency exchange rates by attempting to
match foreign currency contract receipts with like foreign currency
disbursements. To the extent that it is unable to match the foreign currency
receipts and disbursements related to its contracts, JRM enters into forward
exchange contracts to hedge foreign currency transactions, which reduce the
impact of foreign exchange rate movements on its operating results.
In general, JRM's performance is a function of the level of oil and gas
development activity in the world's major hydrocarbon producing regions. As a
result, JRM's revenues and profitability reflect some variability associated
with the timing of the completion of significant development projects and the
commencement of others as to which JRM has contracts, as well as the worldwide
volume of projects and their geographic distribution.
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 1996 VS. THREE MONTHS ENDED
JUNE 30, 1995
Management's discussion of revenues and operating income is discussed by the
geographic areas presented in the tables below. Other geographic area revenues
include eliminations between geographic areas; and Other geographic area
operating loss includes the amortization of goodwill and
covenants-not-to-compete resulting from JRM's acquisition of Offshore
Pipelines, Inc. during fiscal year 1995. The three months ended June 30, 1995
have been restated to reflect the allocation of certain expenses from
geographic area operating income (loss) to Corporate G&A Expense to conform to
the presentation at June 30, 1996.
11
<PAGE> 12
<TABLE>
<CAPTION>
THREE MONTHS ENDED
6/30/96 6/30/95
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
REVENUES
North and South America $ 156,027 $ 82,037
North Sea and West Africa 97,704 114,492
Middle East 47,906 43,262
Far East 89,468 85,071
Other (including Transfer Eliminations) (1,916) (13,059)
- -------------------------------------------------------------------------------------------------------------
TOTAL REVENUES $ 389,189 $ 311,803
=============================================================================================================
OPERATING INCOME
Operating Income (Loss) by Geographic Area:
North and South America $ 12,968 $ 4,839
North Sea and West Africa 5,198 8,678
Middle East 2,686 37
Far East 6,757 9,227
Other (6,369) (7,193)
- -------------------------------------------------------------------------------------------------------------
TOTAL OPERATING INCOME BY
GEOGRAPHIC AREA 21,240 15,588
- -------------------------------------------------------------------------------------------------------------
Equity in Income (Loss) of Investees:
North and South America (671) (3,050)
North Sea and West Africa 2,185 3,567
Far East (216) (1,415)
- -------------------------------------------------------------------------------------------------------------
TOTAL EQUITY IN INCOME (LOSS)
OF INVESTEES 1,298 (898)
- -------------------------------------------------------------------------------------------------------------
Corporate G&A Expense (2,986) (3,174)
- -------------------------------------------------------------------------------------------------------------
TOTAL OPERATING INCOME $ 19,552 $ 11,516
=============================================================================================================
</TABLE>
Revenues increased $77,386,000 to $389,189,000, primarily due to higher volume
on offshore and engineering activities in North America, the North Sea and the
Far East, and higher fabrication activity in North America. These increases
were partially offset by lower procurement revenues in the North Sea as the
B.P. Exploration Foinaven Development program ("Foinaven") west of the
Shetlands in the North Atlantic nears completion.
12
<PAGE> 13
Operating income by geographic area increased $5,562,000 to $21,240,000,
primarily due to higher volume and margins from offshore and engineering
activities in the North Sea and higher volume in fabrication and offshore
activities in North America. These increases were partially offset by the
completion of former Offshore Pipelines, Inc. contracts in West Africa last
year and lower leasing activities due to the sale of the DB101 and DB102 to the
HeereMac joint venture in March 1996.
Equity in income (loss) of investees increased $2,196,000 to income of
$1,298,000 from a loss of $898,000, primarily due to improved results of a
Mexican joint venture. This increase was partially offset by lower results
from the HeereMac and McDermott-ETPM West, Inc. joint ventures. The revenues
of these two unconsolidated joint ventures declined from $191,919,000 to
$171,353,000, primarily in the Far East and West Africa, partially offset by
increased volume in the North Sea and North America. The equity income from
these two unconsolidated joint ventures declined from $3,982,000 to a loss of
$1,205,000 as a result of the lower volume and foreign currency transaction
losses in the current period. There was also higher interest expense on debt
issued by the HeereMac joint venture to finance the purchase of major marine
vessels it had been chartering, including JRM's DB101 and DB102. Equity income
in the current period also includes income of $2,145,000 from the amortization
of the deferred gain resulting from the sale of the DB101 and DB102 to the
HeereMac joint venture.
Interest income increased $3,127,000 to $3,720,000, primarily due to interest
on the promissory note of $105,000,000 received as part of the consideration
from the sale of the DB101 and DB102 to the HeereMac joint venture.
Interest expense increased $825,000 to $10,173,000, primarily due to changes in
debt obligations and interest rates prevailing thereon.
Other-net income decreased $2,553,000 to $1,199,000 primarily due to minority
shareholder participation in the improved results of the McDermott-ETPM East,
Inc. joint venture and in the results of McDermott Subsea Constructors, Ltd.
The provision for income taxes decreased $1,381,000 to $1,865,000 while income
before the provision for income taxes increased $7,785,000 to $14,298,000. The
reduction in
13
<PAGE> 14
income taxes is primarily due to a decrease in deemed profit (revenue) basis
taxation and higher non-taxable earnings. Within these jurisdictions, tax
provisions vary because of nominal rates, allowability of deductions, credits
and other benefits, and tax basis (for example, revenue versus income). These
variances, along with variances in the mix of income within jurisdictions, are
often responsible for shifts in the effective tax rate. As a result of these
factors, the provision for income taxes was 13% of pretax income for the three
months ended June 30, 1996 compared to a provision for income taxes of 50% of
pretax income for the three months ended June 30, 1995.
Backlog
<TABLE>
<CAPTION>
6/30/96 3/31/96
------- -------
(Unaudited)
(In thousands)
<S> <C> <C>
North and South America $ 414,597 $ 313,643
Europe and West Africa 187,689 195,293
Middle East 342,820 345,764
Far East 221,485 123,196
- -------------------------------------------------------------------------------------------------------------
TOTAL BACKLOG $ 1,166,591 $ 977,896
=============================================================================================================
</TABLE>
In general, JRM's geographic area's are capital intensive and rely on large
contracts for a substantial amount of their revenues.
JRM's consolidated backlog increased to $1,166,591,000 at June 30, 1996 from
$977,896,000 at March 31, 1996, and backlog relating to contracts to be
performed by its unconsolidated joint ventures (not included above) increased
to $1,632,000,000 at June 30, 1996 from $1,374,000,000 at March 31, 1996. JRM
believes its markets are beginning to emerge from the difficult competitive
environment that has put pressure on margins in recent years.
Liquidity and Capital Resources
During the three months ended June 30 ,1996, JRM's cash and cash equivalents
decreased $71,593,000 to $94,815,000 and total debt increased $21,850,000 to
$463,512,000, due to the increase in short-term borrowings of $24,633,000.
During this period, JRM used cash
14
<PAGE> 15
of $63,540,000 in operating activities; $25,681,000 for additions to property,
plant and equipment; and $1,800,000 for cash dividends on preferred stock.
Higher accounts receivable are primarily due to the timing of collections of
contract billings by North American operations and on the Foinaven contract.
Decreases in accrued contract costs were offset by higher accounts payable
related to the Foinaven contract, which is nearing completion.
Expenditures for property, plant and equipment increased $8,601,000 to
$25,681,000 for the three months ended June 30, 1996, as compared with the same
period last year. In addition to maintaining existing facilities and equipment,
these expenditures included approximately $4,000,000 for the purchase of a
cable lay vessel and $4,370,000 for the installation of a new system to lay
fiber optic cable on this vessel which operates in the North Sea and $5,913,000
to upgrade a marine barge operating in the Gulf of Mexico. JRM is committed to
make additional expenditures of approximately $10,000,000 on the cable lay
vessel.
At June 30 and March 31, 1996, JRM had available to it various uncommitted
short-term lines of credit from banks totaling $147,402,000 and $142,645,000,
respectively. Borrowings by JRM against these lines of credit at June 30 and
March 31, 1996 were $109,884,000 and $85,251,000, respectively. JRM also has
available an unsecured and committed revolving credit facility on which no
borrowings were outstanding at June 30 or March 31, 1996. The maximum amount
available is $150,000,000, but is subject to certain limits (approximately
$120,000,000 was available at June 30, 1996) as a result of an incremental
borrowing capacity covenant in this agreement. In addition, JRM is restricted,
as a result of the consolidated tangible net worth covenant in this agreement,
in its ability to transfer funds to International and its subsidiaries through
cash dividends (including its annual preferred stock dividends of $7,200,000 on
its Series A Preferred Stock) or through unsecured loans or investments. As of
June 30, 1996, approximately $15,000,000 of JRM's net assets were not subject
to this restriction.
Working capital increased $7,844,000 to $177,253,000 at June 30, 1996 from
$169,409,000 at March 31, 1996. On July 25, 1996, JRM issued $250,000,000
principal amount of 9.375% Senior Subordinated Notes due in 2006 and received
net proceeds of
15
<PAGE> 16
$244,375,000 which were used primarily to repay the Note Payable to
International (including interest) of approximately $239,000,000. The
remaining net proceeds will be used for general corporate purposes. During the
remainder of fiscal year 1997, JRM expects to obtain funds to meet working
capital, capital expenditure and debt maturity requirements from operating
activities, disposal of non-strategic assets and borrowings under its
short-term lines of credit. Leasing agreements for equipment, which are
short-term in nature, are not expected to impact JRM's liquidity or capital
resources. During July 1996, the sale of certain equipment to the HeereMac
joint venture was completed. Prior to this sale, JRM had received $30,000,000
as a deposit in March 1996.
New Accounting Standards
In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation," effective for fiscal years beginning after December
15, 1995. SFAS No. 123 established financial accounting and reporting
standards for stock-based employee compensation plans. JRM has finalized its
review of the provisions of this statement and has decided to account for stock
option grants in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and make the pro forma information
disclosures required under the new standard.
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," effective
for fiscal years beginning after December 1996. SFAS No. 125 established
accounting and reporting standards for transfers and servicing of financial
assets and extinguishment of liabilities. This statement also provides
consistent standards for distinguishing transfers of financial assets that are
sales from transfers that are secured borrowings. JRM has not yet finalized
its review of the impact of this statement, but it is not expected to have a
material impact on the consolidated financial statements.
16
<PAGE> 17
PART II
J. RAY McDERMOTT, S.A.
OTHER INFORMATION
No information is applicable to Part II for the current quarter, except as
noted below:
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Indenture dated July 15, 1996 between J. Ray McDermott, S.A.
and Citibank, N.A., as Trustee, relating to $250 million
principal amount of 9.375% Senior Subordinated Notes due 2006
(incorporated by reference to Exhibit 4.1 to J. Ray McDermott,
S.A.'s Registration Statement on Form S-3, Registration No.
333-01971)
11 Calculation of Earnings Per Common and Common Equivalent Share
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no current reports on Form 8-K filed during the three
months ended June 30, 1996.
Signatures
17
<PAGE> 18
SIGNATURES
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.
J. RAY McDERMOTT, S.A.
/s/ Daniel R. Gaubert
----------------------------------
By: Daniel R. Gaubert
Vice President, Finance
(Principal Accounting Officer)
August 6, 1996
18
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
4.1 Indenture dated July 15, 1996 between J. Ray McDermott, S.A. and Citibank, N.A., as Trustee, relating to
$250 million principal amount of 9.375% Senior Subordinated Notes due 2006 (incorporated by reference to
Exhibit 4.1 to J. Ray McDermott, S.A.'s Registration Statement on Form S-3, Registration No. 333-01971)
11 Calculation of Earnings per Common and Common Equivalent Share
27 Financial Data Schedule
</TABLE>
19
<PAGE> 1
EXHIBIT 11
J. RAY MCDERMOTT, S.A.
CALCULATION OF EARNINGS
PER COMMON AND COMMON EQUIVALENT SHARE
(Unaudited)
(In thousands, except shares and per share amounts)
PRIMARY AND FULLY DILUTED
<TABLE>
<CAPTION>
THREE
MONTHS ENDED
6/30/96 6/30/95
------- -------
<S> <C> <C>
Net income $ 12,433 $ 3,267
Less dividend requirements of preferred stocks (1,800) (2,056)
- -------------------------------------------------------------------------------------------------------------
Net income for primary computation $ 10,633 $ 1,211
=============================================================================================================
Weighted average number of common
shares outstanding during the period 40,218,752 38,777,732
Common stock equivalents of stock options
based on "treasury stock" method 465,600 570,661
- -------------------------------------------------------------------------------------------------------------
Weighted average number of common
and common equivalent shares
outstanding during the period 40,684,352 39,348,393
=============================================================================================================
Earnings per common and
common equivalent share: (1) $ 0.26 $ 0.03
=============================================================================================================
</TABLE>
(1) Earnings per common and common equivalent share assuming full dilution
are the same for the period presented.
20
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
J. RAY MCDERMOTT'S JUNE 30, 1996 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 94,815
<SECURITIES> 1,743
<RECEIVABLES> 280,243
<ALLOWANCES> 27,201
<INVENTORY> 209,359
<CURRENT-ASSETS> 711,868
<PP&E> 1,227,714
<DEPRECIATION> 822,832
<TOTAL-ASSETS> 1,558,912
<CURRENT-LIABILITIES> 534,615
<BONDS> 0
<COMMON> 403
0
32
<OTHER-SE> 562,093
<TOTAL-LIABILITY-AND-EQUITY> 1,558,912
<SALES> 389,189
<TOTAL-REVENUES> 389,189
<CGS> 370,935
<TOTAL-COSTS> 370,935
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,173
<INCOME-PRETAX> 14,298
<INCOME-TAX> 1,865
<INCOME-CONTINUING> 12,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,433
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>