 McDermott International, Inc. with focus on the Marine Construction Services Segment Johnson Rice & Company Johnson Rice & Company Marine Construction & Offshore Marine Construction & Offshore Field Development Forum Field Development Forum November 16, 2005 November 16, 2005 Exhibit 99.1 |
 Forward Looking Statements Statements in this presentation which express a forecast, expectation or estimate, as well as those which are not historical fact, are forward looking and include statements regarding the proposed settlement of B&W’s Chapter 11 proceeding, B&W’s favorable business environment, management’s expectations regarding outstanding bids, J. Ray’s position to capture industry growth and prospects for growing its backlog, positioning of subsidiaries to address challenges, growth opportunities for each subsidiary and management’s areas of focus. They involve a number of risks and uncertainties which may cause actual results to differ materially from such forward-looking statements. These risks and uncertainties include, without limitation, the risk that the proposed Chapter 11 settlement may not be finalized on the terms we have described, adverse changes in the company’s liquidity or in the industry, and such other factors detailed in McDermott International’s filings with the U.S. Securities & Exchange Commission, including its Form 10-K for the year ended December 31, 2004 and its Form 10-Q’s which are filed quarterly. |
 McDermott Snapshot Worldwide energy services company Worldwide energy services company – – Engineering & construction, manufacturing, procurement & installation Engineering & construction, manufacturing, procurement & installation – – Manage & operate government and nuclear facilities Manage & operate government and nuclear facilities Three operating segments with franchise name businesses Three operating segments with franchise name businesses – – Power Generation – Power Generation – The Babcock & Wilcox Company (“B&W”) The Babcock & Wilcox Company (“B&W”) – – Marine Construction – Marine Construction – J. Ray McDermott (“J. Ray”) J. Ray McDermott (“J. Ray”) – – Government Operations – Government Operations – BWX Technologies (“BWXT”) BWX Technologies (“BWXT”) Diversified operations by customer base, energy fuel source Diversified operations by customer base, energy fuel source – – Utilities, electric power producers, offshore O&G & U.S. Government Utilities, electric power producers, offshore O&G & U.S. Government – – Coal, oil & gas and nuclear Coal, oil & gas and nuclear Experienced, shareholder-focused management team Experienced, shareholder-focused management team |
 Franchise Names in Each Segment Lifecycle management of highly enriched uranium, facilities & technologies primarily for the U.S. government BWX Technologies (BWXT) Government Operations Power generation and environmental equipment - design, supply and construction; OEM & upgrades, parts & services Babcock & Wilcox (B&W) Consolidated Operating Subsidiaries Currently Not Consolidated Chapter 11 Providing solutions for offshore field development to the worldwide oil and gas industry; engineer, procure, construct & install J. Ray McDermott (J. Ray) Marine Construction Power Generation Major operating subsidiaries only |
 McDermott Today - B&W deconsolidated Backlog $3.2 bln 3Q05 Revenues $1.5 bln 3Q05 YTD Segment Income $197 mln 3Q05 YTD Marine Construction Services Government Operations Excludes corporate segment, YTD 3Q05 expense of $28 mln |
 B&W - Chapter 11 Update B&W filed Chapter 11 bankruptcy in February 2000 B&W filed Chapter 11 bankruptcy in February 2000 – – To comprehensively resolve outstanding asbestos claims To comprehensively resolve outstanding asbestos claims Deconsolidated from financials since filing C11 Deconsolidated from financials since filing C11 Previous plan of reorganization involved spin-off of Previous plan of reorganization involved spin-off of B&W to claimants trust, in addition to additional B&W to claimants trust, in addition to additional consideration consideration McDermott announced revised settlement on 8/29/05 McDermott announced revised settlement on 8/29/05 – – Retain B&W, federal asbestos legislation provides upside Retain B&W, federal asbestos legislation provides upside Expect revised plan to be effective early 2006, and Expect revised plan to be effective early 2006, and B&W reconsolidated at that time B&W reconsolidated at that time |
 Diversified Operations with B&W [1] W/ B&W Backlog $4.8 bln 3Q05 W/ B&W Revenues $2.5 bln 3Q05 YTD With Non-GAAP B&W [2] Segment Income $266 mln 3Q05 YTD Power Generation [1] Marine Construction Government Operations [1] On non-GAAP basis. B&W is not currently consolidated in financial statements. Reconsolidation expected in early 2006. See Appendix A for reconciliation of non-GAAP measures. Excludes corporate segment. [2] B&W GAAP loss for YTD 9/30/05 was $407.7 million. See Appendix A for reconciliation to non-GAAP measures. |
 Strong Presence in Growing Markets Energy Energy demand demand is is steadily steadily growing growing worldwide worldwide – – all all sources sources – – Electricity, oil & gas, LNG & nuclear Electricity, oil & gas, LNG & nuclear Meeting world’s energy needs presents challenges to Meeting world’s energy needs presents challenges to McDermott’s customer base McDermott’s customer base – – Infrastructure issues – Infrastructure issues – equipment age, access to supply, delivery equipment age, access to supply, delivery – – Environmental issues – Environmental issues – SOx, NOx, CO SOx, NOx, CO², site remediation 2 , – – Security issues – Security issues – homeland security, operational safety, secure supply homeland security, operational safety, secure supply Each McDermott subsidiary Each McDermott subsidiary – – Is well-positioned with its customer base to address challenges Is well-positioned with its customer base to address challenges – – Maintains track record of excellence, innovation, safety and quality Maintains track record of excellence, innovation, safety and quality – – Has growth opportunities ahead Has growth opportunities ahead |
 M c D E R M O T T I N T E R N A T I O N A L , I N C . Marine Construction Services Segment |
 J. Ray’s Core Capabilities Engineering and Procurement Construction and Installation – Jackets, Topsides, Floating & Fixed Structures Offshore pipeline installation Subsea/Deepwater Technology – – In-house In-house and and through through FloaTec FloaTec joint joint venture venture Providing solutions for offshore field developments worldwide |
 Spectrum of Offshore Infrastructure (Graphics compliments of Offshore Magazine (2002 Offshore Oil & Gas Industry Deepwater Solutions for Concept Selections Poster May 2002) J. Ray’s experience covers shallow to the deepest water |
 Field Development Lifecycle Source: Morgan Stanley Source: Morgan Stanley Field infrastructure fabrication and installation accounts for a Field infrastructure fabrication and installation accounts for a small portion of operators’ small portion of operators’ overall costs to first production overall costs to first production Production Infrastructure Well Completion Drilling Seismic / Reservoir Identification 1 Year 1 Year 1 – 2 Years 1 – 2 Years 5 – 20 Years Years of development and considerable resources have Years of development and considerable resources have been committed prior to the infrastructure stage of the cycle been committed prior to the infrastructure stage of the cycle |
 J. Ray McDermott Snapshot Long, established track record as a pioneer in the marine construction Long, established track record as a pioneer in the marine construction industry industry Worldwide fabrication/installation operations Worldwide fabrication/installation operations Location Location Facility Facility Major Vessels Major Vessels – – Asia Pacific (Batam) Asia Pacific ( Batam) Batam ) ) Fabrication Fabrication 3 3 – – Caspian (Baku) Caspian (Baku) Fabrication (Operate only) Fabrication (Operate only) 2 (Operate only) 2 (Operate only) – – Gulf of Mexico (Morgan City) Gulf of Mexico (Morgan City) Fabrication Fabrication 3 3 – – Middle East (Dubai) Middle East (Dubai) Fabrication Fabrication 1 1 – – Mexico Mexico Ship Repair Ship Repair 5 (Joint Venture) 5 (Joint Venture) Engineering offices in Houston, New Orleans, Jakarta & Dubai Engineering offices in Houston, New Orleans, Jakarta & Dubai Approximately 9,300 employees at September 30, 2005 Approximately 9,300 employees at September 30, 2005 |
 World Wide Operations Americas Caspian Middle East Asia Pacific |
 Engineering Services Conceptual Designs Conceptual Designs FEED Studies FEED Studies Bid Document Preparation Bid Document Preparation Project Planning & Project Planning & Development Development Detailed Engineering Detailed Engineering Procurement Services Procurement Services Installation, Hookup, Installation, Hookup, Commissioning, & Startup Commissioning, & Startup Assistance Assistance Pipelines, Risers, Spars & Pipelines, Risers, Spars & Subsea Subsea Designs Designs |
 FloaTec Joint Venture Forming venture with Keppel FELS Forming venture with Keppel FELS Provide unbiased deepwater floating solutions Provide unbiased deepwater floating solutions – – Spar, Semi-submersible, Extended TLP & Single Column Floater Spar, Semi-submersible, Extended TLP & Single Column Floater – – Develop & procure new floating solution technologies Develop & procure new floating solution technologies Draw upon partners’ Draw upon partners’ construction and installation construction and installation capabilities capabilities |
 Caspian Operations Field Field development development for for AIOC AIOC and and BP BP Shah Shah Deniz Deniz project project Topsides fabrication, pipelay, installation and procurement Topsides fabrication, pipelay, installation and procurement Currently, J. Ray is only in the Azeri section of the Caspian Currently, J. Ray is only in the Azeri section of the Caspian At 9/30/05 – At 9/30/05 – Caspian operations were 26% of JRM backlog Caspian operations were 26% of JRM backlog |
 Caspian Projects Constructed CA deck in 2004 (left) and WA deck (right) in 2005 Constructed CA deck in 2004 (left) and WA deck (right) in 2005 Ongoing projects include the EA & DUQ decks plus pipelines Ongoing projects include the EA & DUQ decks plus pipelines Evaluating additional opportunities within Caspian market Evaluating additional opportunities within Caspian market |
 Middle East Operations Fabrication in Dubai, UAE Fabrication in Dubai, UAE – – 145 Acres 145 Acres Engineering offices Engineering offices Able to serve W. Africa and Able to serve W. Africa and North Sea thru Mid East North Sea thru Mid East Primary vessel: DB27 Primary vessel: DB27 – – Lift Capacity: 2400 tons Lift Capacity: 2400 tons – – Pipelay Pipelay Capacity: 60 inches Capacity: 60 inches At 9/30/05 – At 9/30/05 – Middle East Middle East was 52% of JRM backlog was 52% of JRM backlog |
 Middle East Projects Completed Completed Amenam Amenam deck deck in in 2003 (right) and Front 2003 (right) and Front Runner hull (below) in 2004 Runner hull (below) in 2004 Numerous ongoing projects Numerous ongoing projects & recent awards; including & recent awards; including Dolphin & RasGas Dolphin & RasGas LNG 2 LNG 2 Market remains robust Market remains robust |
 Asia Pacific Operations Batam Batam Island, Indonesia Island, Indonesia – – 242 Acres 242 Acres Engineering in Jakarta Engineering in Jakarta Primary vessel: DB30 Primary vessel: DB30 – – Lift Capacity: 3080 tons Lift Capacity: 3080 tons – – Pipelay Pipelay Capacity: 60 inches Capacity: 60 inches At 9/30/05 – At 9/30/05 – Asia Pacific Asia Pacific was 16% of JRM backlog was 16% of JRM backlog |
 Asia Pacific Projects Completed Belanak Completed Belanak FPSO (left) in 2004 and John FPSO (left) in 2004 and John Brookes development in 2005 (pipelay Brookes development in 2005 (pipelay shown) shown) Awarded Arthit Awarded Arthit and Woodside LNG projects in 3Q05 and Woodside LNG projects in 3Q05 Region remains active Region remains active |
 Americas Operations Morgan City, Louisiana Morgan City, Louisiana – – 300+ Acres 300+ Acres Engineering in Houston & Engineering in Houston & New Orleans New Orleans Primary vessel: DB50 Primary vessel: DB50 – – Lift Capacity: 4400 tons Lift Capacity: 4400 tons – – Pipelay Pipelay Capacity: 20 inches Capacity: 20 inches At 9/30/05 – At 9/30/05 – Americas Americas was 6% of JRM backlog was 6% of JRM backlog |
 Americas Projects In early 2005, completed the major topsides program for BP In early 2005, completed the major topsides program for BP Originally awarded in 2000, BP had exclusive use of Morgan Originally awarded in 2000, BP had exclusive use of Morgan City during fabrication period City during fabrication period J. Ray has re-entered market upon completion J. Ray has re-entered market upon completion |
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 Turned J. Ray Bids into Backlog in 3Q05 Bids outstanding exceeded $2 billion in June 2005 Bids outstanding exceeded $2 billion in June 2005 Awarded Saudi Aramco Awarded Saudi Aramco project in August project in August Chevron Gulf of Mexico marine contract signed Chevron Gulf of Mexico marine contract signed Awarded $77 million Woodside LNG contract in Asia Pacific Awarded $77 million Woodside LNG contract in Asia Pacific Signed $500 million+ Phase 2 LNG Expansion Project Signed $500 million+ Phase 2 LNG Expansion Project Asia Pacific received $110 million contract for Thailand project Asia Pacific received $110 million contract for Thailand project Plan to win our share of remaining bids Plan to win our share of remaining bids – – Maintain financial discipline in bids; manage risk and reward Maintain financial discipline in bids; manage risk and reward – – Selectively pursue projects, a rifle approach Selectively pursue projects, a rifle approach – – Manage the business from a global perspective Manage the business from a global perspective |
 J. Ray Backlog Characteristics [1] Americas 6% Middle East 52% Asia Pacific 16% Caspian 26% Unit Rate 8% Fixed Price 65% Combination 27% by Type of Contract by Geographic Region [1] Based on 9/30/05 backlog of $1.7 billion |
 J. Ray Summary Late-cycle service company in offshore field Late-cycle service company in offshore field development development Well positioned to capture industry growth Well positioned to capture industry growth Strong franchise in strategic geographical locations Strong franchise in strategic geographical locations Management team leading change in all areas Management team leading change in all areas $1.7 billion backlog with good growth prospects $1.7 billion backlog with good growth prospects |
 M c D E R M O T T I N T E R N A T I O N A L , I N C . Financial Review |
 Stock symbol (NYSE): Stock symbol (NYSE): MDR MDR Recent price/share Recent price/share [1] [1] : : $37.45 $37.45 Shares outstanding: Shares outstanding: 73 million 73 million Market capitalization Market capitalization [1] [1] : : $2.7 billion $2.7 billion 52-week trading range: $15.05-$38.70 Daily Daily volume volume average average [1] [1] 848,741 848,741 [1] [1] 1] As of November 14, 2005 As of November 14, 2005 Common Share Information Revenues: Revenues: $1.5 billion $1.5 billion Op. Income: Op. Income: $169.5 million $169.5 million GAAP Net Income GAAP Net Income [3] [3] : : $161.9 million $161.9 million GAAP EPS GAAP EPS [3] [3] : : $2.25 $2.25 Total Assets: Total Assets: $1.63 billion $1.63 billion Debt: Debt: $264 million $264 million Unrestricted cash: Unrestricted cash: $374 million $374 million Shareholders’ deficit: $53 million $53 million [2] Income statement items are for the 9-months ended 9/30/05. Balance sheet items are as of September 30, 2005. All amounts exclude B&W. [3] GAAP Net Income & EPS includes $50.4 million benefit from tax valuation allowance Summary 3Q05 YTD Financial Statistics [2] McDermott Financial Snapshot |
 J. Ray Backlog – Revenue Relationship $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 $0 $100 $200 $300 $400 $500 $600 Backlog Revenues |
 -$100 $0 $100 $200 $300 $400 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Unrestricted Cash Restricted Cash [ 1] See Appendix B for items included in full-year 2004 Marine Construction Services segment income -$10 $0 $10 $20 $30 $40 $50 $60 $70 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 J. Ray Segment Income [1] Improving quarterly results….. …and growing J. Ray cash balances (dollars in millions) Solid Recent Performance by J. Ray |
 Revenue in millions $0 $100 $200 $300 $400 $500 $600 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 BWXT J. Ray -$0.35 -$0.15 $0.05 $0.25 $0.45 $0.65 $0.85 $1.05 $1.25 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 McDermott EPS Fully diluted GAAP Earnings Per Share [1] [ 1] See Appendix B for items included in full-year 2004 operating income [2] 2Q05 net income includes $50.4 million benefit from tax valuation allowance. (note: excludes B&W) [2] McDermott’s Consolidated Results |
 Net Cash / (Debt) Position [1] -$50,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 [1] Net Cash/Debt is the sum of total unrestricted cash, restricted cash and short-term investments less total debt. See Appendix C for detailed calculation. Significant Balance Sheet Improvement (excludes cash at B&W) |
 B&W – Strong Addition to Consolidated Results $0 $500 $1,000 $1,500 $2,000 2000 2001 2002 2003 2004 $0 $50 $100 $150 2000 2001 2002 2003 2004 $0 $100 $200 $300 $400 2000 2001 2002 2003 2004 Backlog Revenues Non-GAAP Operating Income [1] [1] Non-GAAP Operating income. See Appendix D for reconciliation between GAAP and Non-GAAP. Note: pension expense was not recorded in B&W’s operating income for the years shown, but is included in 2005 Cash & Cash Equivalents (dollars in millions) Unrestricted cash Cash in lieu of LC $0 $500 $1,000 $1,500 $2,000 2000 2001 2002 2003 2004 |
 Key Areas of Focus Expedite B&W Chapter 11 bankruptcy resolution with revised settlement by February 22, 2006 – Eliminate “asbestos cloud” and reconsolidate B&W Keep J. Ray on consistent long-term earnings growth and build upon industry leadership – Successfully execute existing backlog – Build profitable backlog while managing risk/reward profile within pricing guidelines – Manage operating and G&A costs for expected revenue level Maintain strong performance at BWXT – Succeed in bidding for additional M&O contracts Continue delivering value for McDermott’s shareholders |
 M c D E R M O T T I N T E R N A T I O N A L , I N C . (NYSE: MDR) For more information contact: Jay Roueche Director of Investor Relations 281-870-5462 |
 Appendix A: Non-GAAP Measures with B&W Presented above is a reconciliation of B&W’s GAAP operating income and non-GAAP operating income. The non-GAAP measure is based upon our unconsolidated statement of operations for B&W for the periods shown. McDermott is providing the non-GAAP information to supplement the results provided in accordance with GAAP and it should not be considered superior to, or as a substitute for, the comparable GAAP measure. In addition, McDermott is adding to its consolidated and reported financial information the results from B&W, a deconsolidated entity. McDermott believes these non-GAAP measures provide meaningful insight into B&W’s operational performance, and McDermott’s diversification assuming the reconsolidation of B&W, and uses the non-GAAP information internally to evaluate the operations for purposes of budget planning and performance goals.. McDermott has chosen to provide this supplemental non-GAAP information to investors to enable them to perform additional comparisons of operating results and as a means to emphasize the results of operations absent expenses considered by management to be outside B&W’s customary business. As of 9/30/05 Revenues Segment Income Backlog Consolidated Segments Marine Construction Services 1,002.4 $ 123.7 $ 1,697.0 $ Government Operations 455.5 $ 73.0 $ 1,497.6 $ Total from Consolidated Operating Segments 1,457.9 $ 196.8 $ 3,194.7 $ Deconsolidated The Babcock & Wilcox Company ("B&W") -GAAP 1,086.8 $ (407.7) $ 1,599.3 $ Add back: Asbestos liability & related expenses 477.4 $ Total B&W Non-GAAP Op. Income 69.7 $ Total Consolidated Segment Income with B&W - Non-GAAP 2,544.7 $ 266.5 $ 4,794.0 $ YTD as of September 30, 2005 (Unaudited, dollars in millions) |
 Appendix B: Items included in 2004 Income 12/31/04 1. ITEMS INCLUDED IN OPERATING INCOME (LOSS) Marine Construction Services Contract cost adjustments on loss projects $ 46.6 Gain on sale of marine assets 30.3 Miscellaneous items, net (14.5) TOTAL $ 62.4 Government Operations Pension funding reimbursement $ 11.8 Miscellaneous items 3.2 TOTAL $ 15.0 Corporate Gain on U.K. pension plan $ 27.7 Qualified pension Plan Expense (60.8) TOTAL $ (33.1) Depreciation & amortization Marine Construction Services $ 24.0 Government Operations 12.6 Corporate & other 3.7 TOTAL $ 40.3 2. OTHER ITEMS (below operating income): Estimated Change In B&W Bankruptcy Settlement $ (11.2) Tax Impact On B&W Settlement (0.7) Net After Tax Effect $ (11.9) (Unaudited, dollars in millions, for the year ended) |
 (dollars in millions) $203.1 $203.1 (260.2) (260.2) (4.3) (4.3) 51.7 51.7 42.7 42.7 111.8 111.8 $261.4 $261.4 2Q05 2Q05 0 0 108.5 108.5 66.5 66.5 55.7 55.7 0 0 0 0 LT Restricted Cash LT Restricted Cash & CE & CE $314.2 $314.2 $217.1 $217.1 $157.3 $157.3 $91.4 $91.4 $22.9 $22.9 ($1.0) ($1.0) Total Net Cash / Total Net Cash / (Debt) Position (Debt) Position (260.2) (260.2) (261.3) (261.3) (268.0) (268.0) (268.1) (268.1) (268.1) (268.1) (278.2) (278.2) Long-term Debt (4.3) (4.3) (14.2) (14.2) (12.0) (12.0) (12.0) (12.0) (12.0) (12.0) (16.1) (16.1) Short-term Debt 59.8 59.8 0 0 0 0 0 0 0 0 0 0 Short-Term Investment Investment 144.8 144.8 59.8 59.8 111.5 111.5 112.5 112.5 168.3 168.3 161.5 161.5 ST Restricted Cash ST Restricted Cash & CE & CE $374.1 $374.1 $324.3 $324.3 $259.3 $259.3 $203.3 $203.3 $134.7 $134.7 $131.8 $131.8 Cash & Cash Cash & Cash Equivalents Equivalents 3Q05 3Q05 1Q05 1Q05 4Q04 4Q04 3Q04 3Q04 2Q04 2Q04 1Q04 1Q04 Appendix C: Net Cash/(Debt) Position |
 $128.1 $128.1 $98.4 $98.4 $101.9 $101.9 $74.2 $74.2 $14.7 $14.7 Non-GAAP Operating Operating Income Income 12.5 12.5 96.6 96.6 306.7 306.7 32.6 32.6 17.9 17.9 Add back: Add back: Asbestos & C11 Asbestos & C11 Expenses Expenses $115.6 $115.6 $1.8 $1.8 ($204.8) ($204.8) $41.6 $41.6 ($3.2) ($3.2) GAAP GAAP Operating Operating Income Income 2004 2004 2003 2003 2002 2002 2001 2001 2000 2000 (dollars in millions) Presented above is a reconciliation between B&W’s GAAP operating income and non-GAAP operating income. The non-GAAP measure is based upon our unconsolidated statement of operations for B&W for the periods shown. McDermott is providing the non-GAAP information to supplement the results provided in accordance with GAAP and it should not be considered superior to, or as a substitute for, the comparable GAAP measure. However, McDermott believes this non-GAAP measure provides meaningful insight into B&W’s operational performance and has chosen to provide this supplemental non-GAAP information to investors to enable them to perform additional comparisons of operating results and as a means to emphasize the results of operations absent expenses considered by management to be outside B&W’s customary business. Appendix D: B&W Non-GAAP Reconciliation |