Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 30, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MDR | |
Entity Registrant Name | MCDERMOTT INTERNATIONAL INC | |
Entity Central Index Key | 708,819 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 284,008,760 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Income Statement [Abstract] | |||||
Revenues | [1] | $ 958,531 | $ 558,543 | $ 2,266,635 | $ 1,994,202 |
Costs and Expenses: | |||||
Cost of operations | 773,910 | 455,430 | 1,852,949 | 1,666,775 | |
Research and development expenses | 1,657 | 69 | 2,958 | 199 | |
Selling, general and administrative expenses | 55,671 | 46,983 | 142,280 | 137,386 | |
Other operating (income) expenses, net | 221 | 13,006 | (1,808) | 53,806 | |
Total costs and expenses | 831,459 | 515,488 | 1,996,379 | 1,858,166 | |
Operating income | 127,072 | 43,055 | 270,256 | 136,036 | |
Other expense: | |||||
Interest expense, net | (11,976) | (17,431) | (50,886) | (41,324) | |
Other non-operating income (expense), net | 803 | 5,237 | (1,074) | (1,005) | |
Total other expense, net | (11,173) | (12,194) | (51,960) | (42,329) | |
Income before provision for income taxes | 115,899 | 30,861 | 218,296 | 93,707 | |
Provision for income taxes | 19,532 | 15,976 | 53,221 | 55,110 | |
Income before income (loss) from Investments in Unconsolidated Affiliates | 96,367 | 14,885 | 165,075 | 38,597 | |
Income (loss) from Investments in Unconsolidated Affiliates | (3,441) | 1,507 | (11,495) | (2,844) | |
Net income | 92,926 | 16,392 | 153,580 | 35,753 | |
Less: Net income (loss) attributable to noncontrolling interest | (1,775) | 284 | 550 | 1,160 | |
Net income attributable to McDermott International, Inc. | $ 94,701 | $ 16,108 | $ 153,030 | $ 34,593 | |
Net income per share attributable to McDermott International, Inc.: | |||||
Basic | $ 0.33 | $ 0.07 | $ 0.57 | $ 0.14 | |
Diluted | $ 0.33 | $ 0.06 | $ 0.54 | $ 0.12 | |
Shares used in the computation of net income per share: | |||||
Basic | 283,991,161 | 240,899,888 | 269,720,153 | 240,093,169 | |
Diluted | 285,774,621 | 283,907,353 | 284,859,710 | 283,132,920 | |
[1] | Intersegment transactions included in revenues were not significant for all the periods presented. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 92,926 | $ 16,392 | $ 153,580 | $ 35,753 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain (loss) on investments | 38 | (3) | 77 | 14 |
Gain on derivatives | 9,266 | 3,566 | 19,905 | 38,978 |
Foreign currency translation | (6,717) | (5,031) | (6,709) | (12,401) |
Other comprehensive income (loss), net of tax | 2,587 | (1,468) | 13,273 | 26,591 |
Total comprehensive income | 95,513 | 14,924 | 166,853 | 62,344 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (1,811) | 273 | 532 | 1,128 |
Comprehensive income attributable to McDermott International, Inc. | $ 97,324 | $ 14,651 | $ 166,321 | $ 61,216 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 416,352 | $ 595,921 | |
Restricted cash and cash equivalents | 18,221 | 16,412 | |
Accounts receivable—trade, net | 263,119 | 334,384 | |
Accounts receivable—other | 47,237 | 36,929 | |
Contracts in progress | 855,531 | 319,138 | |
Other current assets | 38,049 | 29,599 | |
Total current assets | 1,638,509 | 1,332,383 | |
Property, plant and equipment | 2,630,228 | 2,586,179 | |
Less accumulated depreciation | (965,819) | (898,878) | |
Property, plant and equipment, net | 1,664,409 | 1,687,301 | |
Accounts receivable—long-term retainages | 75,615 | 127,193 | |
Investments in Unconsolidated Affiliates | 10,226 | 17,023 | |
Deferred income taxes | 14,439 | 21,116 | |
Other assets | 58,237 | 37,214 | |
Total assets | [1] | 3,461,435 | 3,222,230 |
Current liabilities: | |||
Notes payable and current maturities of long-term debt | 19,035 | 48,125 | |
Accounts payable | 511,092 | 173,203 | |
Accrued liabilities | 358,586 | 277,584 | |
Advance billings on contracts | 42,793 | 192,486 | |
Income taxes payable | 31,346 | 17,945 | |
Total current liabilities | 962,852 | 709,343 | |
Long-term debt | 521,642 | 704,395 | |
Self-insurance | 18,014 | 16,980 | |
Pension liabilities | 18,870 | 19,471 | |
Non-current income taxes | 60,626 | 60,870 | |
Other liabilities | 119,506 | 115,703 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock, par value $1.00 per share, authorized 400,000,000 shares; issued 292,502,927 and 249,690,281 shares, respectively | 292,503 | 249,690 | |
Capital in excess of par value | 1,660,114 | 1,695,119 | |
Accumulated deficit | (73,737) | (226,767) | |
Accumulated other comprehensive loss | (53,604) | (66,895) | |
Treasury stock, at cost: 8,494,167 and 8,302,004 shares, respectively | (96,245) | (94,957) | |
Stockholders' Equity—McDermott International, Inc. | 1,729,031 | 1,556,190 | |
Noncontrolling interest | 30,894 | 39,278 | |
Total equity | 1,759,925 | 1,595,468 | |
Total liabilities and equity | $ 3,461,435 | $ 3,222,230 | |
[1] | Our marine vessels are included in the area in which they were located as of reporting date. |
CONSOLIDATED BALANCE SHEETS (U5
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 292,502,927 | 249,690,281 |
Treasury stock, shares | 8,494,167 | 8,302,004 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Cash flows from operating activities: | |||
Net income | $ 153,580 | $ 35,753 | |
Non-cash items included in net income: | |||
Depreciation and amortization | 78,032 | 76,755 | |
Impairment loss | 44,069 | ||
Stock-based compensation charges | 19,543 | 14,011 | |
Loss from investments in Unconsolidated Affiliates | 11,495 | 2,844 | |
Other non-cash items | 17,525 | 7,782 | |
Changes in operating assets and liabilities that provided (used) cash: | |||
Accounts receivable | 119,623 | (29,661) | |
Contracts in progress, net of Advance billings on contracts | (673,420) | 53,608 | |
Accounts payable | 338,906 | (110,196) | |
Accrued and other current liabilities | 79,866 | (13,426) | |
Other assets and liabilities, net | (9,648) | 44,060 | |
Total cash provided by operating activities | 135,502 | 125,599 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | [1] | (97,106) | (197,393) |
Proceeds from asset dispositions | 55,391 | 1,123 | |
Investments in Unconsolidated Affiliates | (2,769) | (4,105) | |
Total cash used in investing activities | (44,484) | (200,375) | |
Cash flows from financing activities: | |||
Repayment of debt | (230,715) | (93,755) | |
Payment of debt issuance cost | (20,564) | (8,256) | |
Acquisition of Noncontrolling interest | (10,652) | ||
Repurchase of common stock | (7,126) | (3,909) | |
Total cash used in financing activities | (269,057) | (105,920) | |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 279 | (861) | |
Net decrease in cash, cash equivalents and restricted cash | (177,760) | (181,557) | |
Cash, cash equivalents and restricted cash at beginning of period | 612,333 | 781,645 | |
Cash, cash equivalents and restricted cash at end of period | $ 434,573 | $ 600,088 | |
[1] | Corporate and Other capital expenditures in the first nine months of 2017 include the purchase of the Amazon, a pipelay and construction vessel. Following the purchase we sold this vessel to an unrelated third party and simultaneously entered into an 11-year bareboat charter agreement, see Note 8, Sale Leaseback. |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock Par Value [Member] | Capital in Excess of Par Value [Member] | Retained Earnings/(Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) ("AOCI") [Member] | Treasury Stock [Member] | Stockholder's Equity [Member] | Noncontrolling Interest ("NCI") [Member] |
Beginning Balance at Dec. 31, 2015 | $ (93,955) | |||||||
Net income | $ 35,753 | |||||||
Other comprehensive income (loss), net of tax | 26,591 | 26,623 | ||||||
Ending Balance at Sep. 30, 2016 | (67,332) | |||||||
Beginning Balance at Jun. 30, 2016 | (65,875) | |||||||
Net income | 16,392 | |||||||
Other comprehensive income (loss), net of tax | (1,468) | (1,457) | ||||||
Ending Balance at Sep. 30, 2016 | (67,332) | |||||||
Beginning Balance at Dec. 31, 2016 | 1,595,468 | $ 249,690 | $ 1,695,119 | $ (226,767) | (66,895) | $ (94,957) | $ 1,556,190 | $ 39,278 |
Net income | 153,580 | 153,030 | 153,030 | 550 | ||||
Other comprehensive income (loss), net of tax | 13,273 | 13,291 | 13,291 | (18) | ||||
Common stock issued | 43,635 | (43,635) | ||||||
Stock-based compensation charges | 13,046 | 13,046 | 13,046 | |||||
Purchase of treasury shares | (7,126) | (7,126) | (7,126) | |||||
Retirement of common stock | (822) | (5,016) | 5,838 | |||||
Acquisition of NCI | (6,775) | 2,121 | 2,284 | 2,121 | (8,896) | |||
Other | (1,541) | (1,521) | (1,521) | (20) | ||||
Ending Balance at Sep. 30, 2017 | 1,759,925 | 292,503 | 1,660,114 | (73,737) | (53,604) | (96,245) | 1,729,031 | 30,894 |
Beginning Balance at Jun. 30, 2017 | (56,191) | |||||||
Net income | 92,926 | |||||||
Other comprehensive income (loss), net of tax | 2,587 | 2,587 | ||||||
Ending Balance at Sep. 30, 2017 | $ 1,759,925 | $ 292,503 | $ 1,660,114 | $ (73,737) | $ (53,604) | $ (96,245) | $ 1,729,031 | $ 30,894 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations McDermott International, Inc. (“MDR”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a leading provider of integrated engineering, procurement, construction and installation (“EPCI”), front-end engineering and design (“FEED”) and module fabrication services for upstream field developments worldwide. We deliver fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for complex offshore and subsea oil and gas projects. Operating in approximately 20 countries across the Americas, Europe, Africa, Asia and Australia, our integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. We support our activities with comprehensive project management and procurement services, while utilizing our fully integrated capabilities in both shallow water and deepwater construction. Our customers include national, major integrated and other oil and gas companies, and we operate in most major offshore oil and gas producing regions throughout the world. We execute our contracts through a variety of methods, principally fixed-price, but also including cost reimbursable, cost-plus, day-rate and unit-rate basis or some combination of those methods. In these Notes to our Consolidated Financial Statements, unless the context otherwise indicates, “we,” “us” and “our” mean MDR and its consolidated subsidiaries. Basis of Presentation The accompanying Consolidated Financial Statements are unaudited and have been prepared from our books and records in accordance with Rule 10-1 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of our management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of results of operations for a full year. These Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in our Current Report on Form 8-K filed with the SEC on April 25, 2017 (the “April 25 Form 8-K”). Classification Certain prior year amounts have been reclassified for consistency with the current year presentation. Previously reported Consolidated Financial Statements have been adjusted to reflect those changes. In addition, in the first quarter of 2017, we implemented certain changes to our financial reporting structure. Corporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market pension actuarial gains and losses, costs not attributable to a particular reportable segment, and unallocated direct operating expenses associated with the underutilization of vessels, fabrication facilities and engineering resources, are no longer apportioned to our reportable segments. Those expenses are reported under “Corporate and Other.” Previously reported segment financial information has been adjusted to reflect this change, see Note 16, Segment Reporting Accounting Guidance Issued But Not Adopted as of September 30, 2017 Derivatives— In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2017-12, . The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. This guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This ASU is effective prospectively for annual periods beginning on or after December 15, 2018. Early adoption is permitted. We intend to adopt this guidance on January 1, 2019. We plan to apply this ASU to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach if an adjustment is required ( , with a cumulative effect adjustment recorded to the opening balance of retained earnings as of the initial application date). The adoption of this guidance is not expected to have a material impact on our future Consolidated Financial Statements or related disclosures. Stock Compensation— In May 2017, the FASB issued ASU 2017-09, . The general model for modifications of share-based payment awards is to record the incremental value arising from a change as additional compensation cost. This guidance clarifies situations in which the existing award is not probable of vesting, and a modification gives rise to a new measurement date; no change in the total compensation cost recognized for an existing award will be required if there is no change to the fair value, vesting conditions and classification of the award. This ASU is effective prospectively for annual periods beginning on or after December 15, 2017. Early adoption is permitted. The application of this amendment is not expected to have a material impact on our future Consolidated Financial Statements or related disclosures. Pension and Postretirement Benefits— In March 2017, the FASB issued ASU 2017-07, . This ASU requires bifurcation of certain components of net pension and postretirement benefit cost (“benefit costs”) in the Consolidated Statements of Operations. The service cost components are required to be presented in operating income and the remaining components are required to be presented outside of operating income. This ASU is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. Upon future adoption of this guidance, benefit costs, excluding service costs component, will be included in Other non-operating income (expense), net in our Consolidated Statements of Operations. Currently, all components of benefit costs are reported in Selling, general and administrative expenses in our Consolidated Statements of Operations . Income Taxes— In October 2016, the FASB issued ASU 2016-16, . This ASU requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The application of this amendment is not expected to have a material impact on our future Consolidated Financial Statements and related disclosures. Financial Instruments —In June 2016, the FASB issued ASU 2016-13, . This ASU will require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. A valuation account, allowance for credit losses, will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. This ASU is effective for interim and annual periods beginning after December 15, 2019. We are currently assessing the impact of this guidance on our future Consolidated Financial Statements and related disclosures. Leases —In February 2016, the FASB issued ASU 2016-02 . The ASU will require entities that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current U.S. GAAP—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. This ASU is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact of this ASU on our future Consolidated Financial Statements and related disclosures. Revenue from Contracts with Customers (Topic 606)— In May 2014, the FASB issued a new standard related to revenue recognition which supersedes most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property, identifying performance obligations, reporting gross versus net revenue and narrow-scope improvements and practical expedients. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (“full retrospective method”), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (“modified retrospective application”). We are currently assessing the impact of this ASU and the amendments on our future Consolidated Financial Statements and related disclosures. Adoption may affect the manner in which the company determines the unit of account for its projects and estimates revenue associated with unapproved change orders and claims. We intend to adopt the new standard on January 1, 2018 (the “initial application” date): • using the modified retrospective application, with no restatement of the comparative periods presented and a cumulative effect adjustment as of the date of adoption; • applying the new standard only to those contracts that are not substantially complete at the date of initial application; and • disclosing the impact of the new standard on our 2018 Consolidated Financial Statements. This standard could have a significant impact on our 2018 Consolidated Financial Statements and related disclosures. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2017 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 2—REVENUE RECOGNITION Unapproved Change Orders As of September 30, 2017, total unapproved change orders included in our estimates at completion aggregated approximately $98 million, of which approximately $9 million was included in backlog. As of September 30, 2016, total unapproved change orders included in our estimates at completion aggregated approximately $139 million, of which approximately $21 million was included in backlog. Claims Revenue The amount of revenues included in our estimates at completion (i.e., contract values) associated with claims was $10 million and $16 million as of September 30, 2017 and 2016, respectively, all in our Middle East segment. These amounts are determined based on various factors, including our analysis of the underlying contractual language and our experience in making and resolving claims. Our unconsolidated joint ventures did not include any material claims revenue or associated costs in their financial results for the three and nine months ended September 30, 2017 and 2016. None of the claims included in our estimates at completion at September 30, 2017 were the subject of any litigation proceedings. We continue to actively engage in negotiations with our customers on our outstanding claims. However, these claims may be resolved at amounts that differ from our current estimates, which could result in increases or decreases in future estimated contract profits or losses. Loss Recognition For all ongoing contracts, we have provided for estimated costs to complete. If a current estimate of total contract cost indicates a loss, the projected loss is recognized in full immediately and reflected in cost of operations in the Consolidated Statements of Operations. However, it is possible that current estimates could change due to unforeseen events, which could result in adjustments to overall contract costs. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal quarter or year. For loss projects, it is possible that our estimates of gross profit could increase or decrease based on changes in productivity, actual downtime and the resolution of change orders and claims with the customers. In our Consolidated Balance Sheets, the provision for estimated losses on all active uncompleted projects is included in “Advance billings on contracts.” KJO Hout, an EPCI project in our Middle East segment, is the only active project in a significant loss position as of September 30, 2017. The estimated overall loss on KJO Hout was $9 million. The project is substantially complete. As of September 30, 2017 and December 31, 2016, the remaining provision for estimated losses to be recognized on all active uncompleted projects in our Consolidated Balance Sheets was not material. |
USE OF ESTIMATES
USE OF ESTIMATES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
USE OF ESTIMATES | NOTE 3—USE OF ESTIMATES The following is a discussion of our most significant changes in estimates that impacted segment operating income for the three and nine months ended September 30, 2017 and 2016. Three months ended September 30, 2017 Segment operating income for the three months ended September 30, 2017 was positively impacted by net favorable changes in estimates totaling approximately $36 million. Americas, Europe and Africa Segment (“AEA”) — This segment was impacted by net unfavorable changes in estimates aggregating approximately $4 million on multiple projects, none of which individually were material. Middle East Segment (“MEA”) — This segment was positively impacted by net favorable changes in estimates aggregating approximately $36 million, primarily due to: • cost savings associated with marine campaigns and changes in estimate at completion on multiple Saudi Aramco projects; • marine campaign cost savings and benefits from favorable weather conditions, which were partially offset by higher fabrication costs and marine equipment downtime on a lump-sum EPCI project under the second Saudi Aramco Long-Term Agreement (“LTA II”); • favorable changes in estimated costs at completion on various other projects, which individually were not material. Those net favorable changes in estimates were partially offset by higher marine campaign costs for the Berri platform, a Saudi Aramco EPCI project , Asia Segment (“ASA”) — This segment was positively impacted by net favorable changes in estimates aggregating approximately $4 million, primarily due to change in estimates associated with efficient project execution and productivity improvements on multiple active projects which were individually not material. Those favorable changes in estimates were partially offset by higher marine campaign costs associated with the transportation and installation of pipelines under the multi-year Brunei Shell Petroleum (“BSP”) offshore installation contract As of September 30, 2017, the diving work to replace the failed supplier-provided subsea-pipe connector component on the Ichthys project in Australia was substantially complete. The costs to replace the supplier-provided subsea-pipe connector component, at the completion of the project, are expected to be less than our December 31, 2016 estimate of $34 million. The project remains in an overall profitable position. Nine months ended September 30, 2017 Segment operating income for the nine months ended September 30, 2017 was positively impacted by net favorable changes in estimates totaling approximately $115 million, primarily in our MEA and ASA segments. AEA — This segment was impacted by net unfavorable changes in estimates aggregating approximately $3 million on multiple projects, none of which individually were material. MEA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $72 million, primarily due to: • productivity improvements and associated cost savings during the marine hookup campaign and reduction in estimated costs to complete two projects in the Middle East, including a Saudi Aramco project; • marine campaign cost savings associated with productivity improvements and favorable weather conditions, which were partially offset by higher fabrication costs on lump-sum EPCI projects under the LTA II; • productivity improvements and associated cost savings during the installation phase on the Saudi Aramco Marjan power system replacement project; • close-out improvements associated with the first phase of a large pipeline repair project in the Middle East, which was completed in 2016, and a change in estimate to complete the next phase of this project; and • cost savings associated with productivity improvements on multiple projects in the Middle East, none of which were individually material. ASA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $46 million, primarily due to changes in estimates driven by productivity improvements and associated cost savings and changes in estimated costs at completion on active and completed projects. Those net favorable changes in estimates were partially offset by vessel and marine equipment downtime on our Vashishta EPCI project in India. In addition, as of December 31, 2016, on the Ichthys project in Australia, we reported a $34 million increase in our estimated costs at completion due to a failure identified in a supplier-provided subsea-pipe connector component that we had previously installed, and we identified possible additional increases of up to $10 million, due to potential need for alternative installation methods. We investigated the cause of the failure and developed a remediation plan in conjunction with the customer. We commenced offshore replacement in June 2017 through a diving intervention method. As of September 30, 2017, the remediation work was substantially complete. The costs to replace the supplier-provided subsea-pipe connector component are expected to be less than our December 31, 2016 estimate of $34 million. The project remains in an overall profitable position. Three months ended September 30, 2016 Segment operating income for the three months ended September 30, 2016 was positively impacted by net favorable changes in estimates totaling approximately $34 million across all segments. AEA — This segment was positively impacted by net favorable changes in estimates, aggregating approximately $6 million, none of which individually were material. MEA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $12 million, primarily due to: • productivity improvements and associated cost savings related to a Saudi Aramco project; and • other miscellaneous projects, which individually were not material. ASA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $16 million, primarily due to: • cost savings associated with our vessel productivity improvements; and • favorable changes in estimates at completion on several active projects. Those net favorable changes in estimates were partially offset by net unfavorable changes on an active project, which was not material. Nine months ended September 30, 2016 Segment operating income for the nine months ended September 30, 2016 was positively impacted by net favorable changes in estimates totaling approximately $101 million across all segments. AEA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $29 million, primarily due to: • successful execution and close-out improvements on two significant projects, PB Litoral and Exxon Julia Subsea Tieback; • productivity improvements and associated cost savings related to our DB 50 NO 102 • a reversal of a $7 million provision for liquidated damages, due to an agreed additional extension of the PB Litoral project completion date. Those net favorable changes in estimates were partially offset by net unfavorable changes on multiple projects, none of which were individually material. MEA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $29 million, primarily due to productivity improvements and associated cost savings related to the and the vessels, both associated with Saudi Aramco projects, due to improved execution. Those favorable changes in estimates were partially offset by marine equipment downtime due to weather on a project in Qatar. ASA — This segment was positively impacted by net favorable changes in estimates aggregating approximately $43 million, primarily due to: • cost savings associated with productivity improvements on our LV 108 • favorable agreement on outstanding change orders on active and completed projects during the 2016 period. Those net favorable changes in estimates were partially offset by net unfavorable changes on multiple projects, none of which were individually material. |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring And Related Activities [Abstract] | |
RESTRUCTURING | NOTE 4—RESTRUCTURING Restructuring initiatives are driven and managed by our corporate management. These costs are not allocated to our reportable segments and are reported under Corporate and Other. Restructuring expenses are reported as a component of Other operating (income) expenses, net in our Consolidated Statements of Operations. Previously, restructuring expenses were presented separately in our Consolidated Statements of Operations. No restructuring costs were incurred in 2017. The restructuring costs incurred in 2016 and from inception to September 30, 2017, by major cost type is presented below. Three Months Ended Nine Months Ended From Inception to September 30, 2016 September 30, 2017 (in thousands) Americas Restructuring $ - $ (1,500 ) $ 44,194 McDermott Profitability Initiative Severance and other personnel-related costs 1,165 2,590 17,807 Asset impairment and disposal - - 7,471 Legal and other advisor fees - 222 11,639 Other - 2,436 10,045 1,165 5,248 46,962 Additional Overhead Reduction Severance and other personnel-related costs 556 4,600 5,012 Legal and other advisor fees - 1,968 2,768 Other 115 371 385 671 6,939 8,165 Total $ 1,836 $ 10,687 $ 99,321 |
CASH, CASH EQUIVALENTS AND REST
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2017 | |
Cash And Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | NOTE 5—CASH, CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the totals of such amounts shown in the Consolidated Statements of Cash Flows. September 30, 2017 December 31, 2016 (in thousands) Cash and cash equivalents $ 416,352 $ 595,921 Restricted cash and cash equivalents 18,221 16,412 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows $ 434,573 $ 612,333 A majority of our restricted cash balances serve as collateral for letters of credit, discussed in Note 9, Debt |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 6—ACCOUNTS RECEIVABLE Accounts Receivable—Trade, Net― A summary of contract receivables is as follows: September 30, 2017 December 31, 2016 (in thousands) Contract receivables: Contracts in progress $ 171,587 $ 245,604 Completed contracts 18,289 40,345 Retainages 86,153 58,431 Unbilled (1) 4,303 4,303 Less allowances (17,213 ) (14,299 ) Accounts receivable — $ 263,119 $ 334,384 (1) This amount relates to a project milestone billing for which we are awaiting the customer’s final acceptance certificate. We expect to receive the final acceptance certificate during 2017. Retainages— Contract retainages generally represent amounts withheld by our customers until project completion, in accordance with the terms of the applicable contracts. The following is a summary of retainages on our contracts: September 30, 2017 December 31, 2016 (in thousands) Retainages expected to be collected within one year $ 86,153 $ 58,431 Retainages expected to be collected after one year 75,615 127,193 Total retainages $ 161,768 $ 185,624 |
CONTRACTS IN PROGRESS AND ADVAN
CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS | 9 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS | NOTE 7—CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS A detail of the components of contracts in progress and advance billings on contracts is as follows: September 30, 2017 December 31, 2016 (In thousands) Costs incurred less costs of revenue recognized $ 108,149 $ 119,688 Revenues recognized less billings to customers 747,382 199,450 Contracts in Progress $ 855,531 $ 319,138 Billings to customers less revenue recognized 73,765 42,637 Costs incurred less costs of revenue recognized (30,972 ) 149,849 Advance Billings on Contracts $ 42,793 $ 192,486 |
SALE LEASEBACK
SALE LEASEBACK | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
SALE LEASEBACK | NOTE 8—SALE LEASEBACK In January 2017, we purchased the pipelay and construction vessel, the Amazon Amazon Amazon |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 9—DEBT The carrying values of our long-term debt obligations, net of unamortized debt issuance costs of $5 million and $14 million as of September 30, 2017 and December 31, 2016, respectively, are as follows: September 30, 2017 December 31, 2016 (In thousands) Senior Notes $ 494,615 $ 493,461 North Ocean 105 construction financing 28,595 31,877 Vendor equipment financing 15,686 - Term Loan - 212,070 Amortizing Notes - 7,932 Other 1,781 7,180 540,677 752,520 Less: Amounts due within one year 19,035 48,125 Total long-term debt $ 521,642 $ 704,395 Amended and Restated Credit Agreement On June 30, 2017, we repaid all outstanding term loans, with an outstanding principal amount of approximately $217 million, under our credit agreement dated April 16, 2014 (the “Prior Credit Agreement”), and we amended and restated the Prior Credit Agreement by entering into an Amended and Restated Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent. All letters of credit outstanding under the Prior Credit Agreement were deemed issued under the Credit Agreement. The Credit Agreement includes $810 million of commitments from the lenders, the full amount of which is available for the issuance of letters of credit, and $300 million of which is available for revolving loans. The senior secured credit facility established by the Credit Agreement is scheduled to mature in June 2022, unless we do not repay in full, by December 1, 2020, our $500 million second-lien notes due in April 2021, in which case the Credit Agreement will mature on December 1, 2020. The Credit Agreement includes procedures for additional financial institutions to become lenders, or for any existing lender to increase its commitment thereunder, subject to an aggregate maximum of $1 billion for all commitments under the Credit Agreement. Any such increase in the commitments will not increase the $300 million sublimit for revolving loans. The indebtedness and other obligations under the Credit Agreement are unconditionally guaranteed on a senior secured basis by substantially all of our wholly owned subsidiaries, other than our captive insurance subsidiary and certain other designated subsidiaries (collectively, the “Guarantors”). The obligations under the Credit Agreement are secured by first-priority liens on substantially all of our and the Guarantors’ assets, including certain vessels and bank accounts. Other than mandatory commitment reductions and prepayments in connection with certain asset sales, casualty events, and incurrences of debt not permitted by the Credit Agreement, the Credit Agreement requires only periodic interest payments until maturity. We may prepay all revolving loans under the Credit Agreement at any time without premium or penalty (other than customary LIBOR breakage costs), subject to certain notice requirements. Revolving loans under the Credit Agreement bear interest at our option at either the Eurodollar rate plus a margin ranging from 3.75% to 4.25% per year or the base rate (the highest of the Federal Funds rate plus 0.50%, the 30-day Eurodollar rate plus 1.0%, or the administrative agent’s prime rate) plus a margin ranging from 2.75% to 3.25% per year. The applicable margin varies depending on our leverage ratio (as defined in the Credit Agreement). We are charged a commitment fee of 0.50% per year on the daily amount of the unused portions of the commitments under the Credit Agreement. Additionally, with respect to all letters of credit outstanding under the Credit Agreement, we are charged a fronting fee of 0.25% per year and a participation fee of (i) between 3.75% to 4.25% per year in respect of financial letters of credit and (ii) between 1.875% to 2.125% per year in respect of performance letters of credit, in each case depending on our leverage ratio. We also pay customary issuance fees and other fees and expenses in connection with the issuance of letters of credit under the Credit Agreement. As of September 30, 2017, the applicable margin for revolving loans was 4.0% for Eurodollar-rate loans and 3.0% for base-rate loans, and the letter of credit fees were 4.0% for financial letters of credit and 2.0% for performance letters of credit, respectively. The Credit Agreement includes the following financial covenants, defined in the Credit Agreement, which will be tested on a quarterly basis and, in respect of the collateral coverage ratio described below, on both a quarterly basis and on any date that a mortgaged vessel is sold: • the maximum permitted leverage ratio is (1) 3.50 to 1.00 for each fiscal quarter ending on or before December 31, 2019, and (2) 3.25 to 1.00 for each fiscal quarter ending after December 31, 2019; • the minimum fixed charge coverage ratio is 1.15 to 1.00; • the minimum liquidity is $100 million; • the minimum collateral coverage ratio is 1.20 to 1.0; and • the principal amount of revolving loans outstanding under the Credit Agreement cannot exceed the sum of 75% of our net trade accounts receivable plus the amount of our cash and cash equivalents subject to the control of the collateral agent under the Credit Agreement (this is also a condition to each revolving loan borrowing). In addition, the Credit Agreement contains various covenants that, among other restrictions, limits our ability, and the ability of each of our subsidiaries, to: (1) incur or assume indebtedness; (2) grant or assume liens; (3) make acquisitions or engage in mergers; (4) sell, transfer, assign or convey assets; (5) make investments; (6) repurchase equity and make dividends and certain other restricted payments; (7) change the nature of our business; (8) engage in transactions with affiliates; (9) enter into burdensome agreements; (10) modify organizational documents; (11) enter into sale and leaseback transactions; (12) make capital expenditures; (13) enter into speculative hedging contracts; and (14) make prepayments on certain junior debt. The Credit Agreement contains events of default that we believe are customary for a secured credit facility. If an event of default relating to bankruptcy or other insolvency events with respect to us occurs, all obligations under the Credit Agreement will immediately become due and payable. If any other event of default exists under the Credit Agreement, the lenders may accelerate the maturity of the obligations outstanding under the Credit Agreement and exercise other rights and remedies. In addition, if any event of default exists under the Credit Agreement, the lenders may commence foreclosure or other actions against the collateral. If any default exists under the Credit Agreement, or if we are unable to make any of the representations and warranties in the Credit Agreement at the applicable time, we will be unable to borrow funds or have letters of credit issued under the Credit Agreement. In connection with the Credit Agreement we incurred approximately $21 million of debt issuance costs. On the Consolidated Balance Sheets, those costs are reflected as an asset. As of September 30, 2017, under the Credit Agreement, there were no revolving loans outstanding. As of September 30, 2017, the aggregate amount of letters of credit issued and outstanding under the Credit Agreement was $326 million, included in which were $19 million of financial letters of credit. As of December 31, 2016, under the Prior Credit Agreement, the aggregate amount of letters of credit issued and outstanding was $442 million. The Credit Agreement As of September 30, 2017, we were in compliance with all of the financial covenants set forth in the Credit Agreement. Senior Notes In April 2014 we issued $500 million in aggregate principal amount of 8.00% senior secured notes due 2021 (the “Notes”) in a private placement in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended. Interest on the Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2014. The Notes are scheduled to mature on May 1, 2021. The Notes are unconditionally guaranteed on a senior secured basis by the Guarantors, and the Notes are secured on a second-lien basis by pledges of capital stock of certain of our subsidiaries and mortgages and other security interests covering (1) specified marine vessels owned by certain of the Guarantors and (2) substantially all the other tangible and intangible assets of our company and the Guarantors, subject to exceptions for certain assets. The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (1) incur or guarantee additional indebtedness or issue preferred stock; (2) make investments or certain other restricted payments; (3) pay dividends or distributions on capital stock or purchase or redeem subordinated indebtedness; (4) sell assets; (5) create restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; (6) create certain liens; (7) sell all or substantially all of our assets or merge or consolidate with or into other companies; (8) enter into transactions with affiliates; and (9) create unrestricted subsidiaries. Many of those covenants would become suspended if the Notes were to attain an investment grade rating from both Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Services and no default has occurred. North Ocean Financing NO 105 ―On September 30, 2010, McDermott International Inc., as guarantor, and North Ocean 105 AS, in which we then had a 75% ownership interest, as borrower, entered into a financing agreement to pay a portion of the construction costs of the Borrowings under the agreement are secured by, among other things, a pledge of all of the equity of North Ocean 105 AS, a mortgage on the , and a lien on substantially all of the other assets of North Ocean 105 AS. The financing agreement requires principal repayment in 17 consecutive semiannual installments, which commenced on October 1, 2012. In the second quarter of 2017 we exercised our option under the North Ocean 105 AS joint venture agreement and purchased the 25% ownership interest of Oceanteam ASA (“Oceanteam”) in the vessel-owning company for approximately $11 million in cash. As part of that transaction, we also assumed the right to a $5 million note payable from North Ocean 105 AS to Oceanteam (which had been issued in connection with a dividend declared by North Ocean 105 AS in 2016). For further discussion, see Note 13, Stockholders’ Equity The Credit Agreement eliminated the Prior Credit Agreement’s requirement for us to prepay by July 20, 2017 the North Ocean 105 NO 105 Tangible Equity Units (“TEUs”) In April 2014, we issued 11,500,000 6.25% TEUs, each with a stated amount of $25. Each TEU consists of (1) a prepaid common stock purchase contract and (2) a senior amortizing note due April 1, 2017 (each an “Amortizing Note”) that had an initial principal amount of $4.1266 per Amortizing Note and bore interest at a rate of 7.75% per annum and had a final scheduled installment payment date of April 1, 2017, which we repaid in full. The prepaid common stock purchase contracts were accounted for as capital in excess of par value totaling $240 million in our Consolidated Balance Sheets. Each prepaid common stock purchase contract automatically settled in April 2017. We delivered 40.8 million shares of our common stock to holders of the TEUs, based on the settlement rate of 3.5496 shares per unit. Receivables Factoring Facility In February 2017, J. Ray McDermott de Mexico, S.A. de C.V. (“JRM Mexico”), one of our indirectly 100% owned subsidiaries, entered into a 364 day, $50 million committed revolving receivables purchase agreement which provides for the sale, at a discount rate of LIBOR plus an applicable margin of 4.25%, of certain receivables to a designated purchaser without recourse. The facility provides for customary representations and warranties and compliance with customary covenants. JRM Mexico’s obligations in connection with the receivables purchase agreement are guaranteed by McDermott International, Inc. During the first nine months of 2017, we sold approximately $2 million of receivables under the receivables purchase agreement. Vendor Equipment Financing In February 2017, JRM Mexico entered into a 21-month loan agreement for equipment financing in the amount of $47 million. Borrowings under the loan agreement bear interest at a fixed rate of 5.75%. JRM Mexico’s obligations in connection with this equipment financing are guaranteed by McDermott International Management, S. de RL., one of our 100% owned subsidiaries. The equipment financing agreement contains various customary affirmative covenants, as well as specific affirmative covenants, including the pledge of specific equipment. The equipment financing agreement also requires compliance with various negative covenants, including restricted use of the proceeds. At September 30, 2017, the total borrowing outstanding under this facility was approximately $16 million. Unsecured Bilateral Lines of Credit MDR has uncommitted lines of credit in place with Middle Eastern banks in support of our contracting activities in the Middle East. Bank guarantees issued under these agreements totaled $504 million and $359 million, as of September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017, overall capacity under these arrangements totaled $625 million. Surety Bonds As of September 30, 2017 and December 31, 2016, surety bonds issued under general agreements of indemnity in favor of surety underwriters in support of contracting activities of our subsidiaries JRM Mexico and McDermott, Inc. totaled $56 million and $79 million, respectively. As of September 30, 2017, overall uncommitted capacity under these arrangements totaled $300 million. For additional information relating to our outstanding debts, see Note 10, Debt |
PENSION AND POSTRETIREMENT BENE
PENSION AND POSTRETIREMENT BENEFITS | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
PENSION AND POSTRETIREMENT BENEFITS | NOTE 10—PENSION AND POSTRETIREMENT BENEFITS Net pension cost (benefit) recognized during each period presented relate to expected return on plan assets, net of interest costs, for our defined benefit pension plans. Net periodic cost (benefit) for our qualified defined benefit pension plan and several of our non-qualified supplemental defined benefit pension plans (the “Domestic Plans”) and our J. Ray McDermott, S.A. Third Country National Employees Pension Plan (the “TCN Plan”) was as follows: Domestic Plans Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest cost $ 4,991 $ 5,276 $ 14,973 $ 15,828 Expected return on plan assets (4,907 ) (5,002 ) (14,721 ) (15,006 ) Net periodic (benefit) cost $ 84 $ 274 $ 252 $ 822 TCN Plan Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest cost $ 290 $ 338 $ 870 $ 1,014 Expected return on plan assets (345 ) (397 ) (1,035 ) (1,191 ) Net periodic (benefit) cost $ (55 ) $ (59 ) $ (165 ) $ (177 ) We recognize mark to market fair value adjustment on defined benefit plans in our Consolidated Statements of Operations in the fourth quarter of each year. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 11—DERIVATIVE FINANCIAL INSTRUMENTS We enter into derivative financial instruments primarily to hedge certain firm purchase commitments and forecasted transactions denominated in foreign currencies. We record these contracts at fair value on our Consolidated Balance Sheets. Depending on the hedge designation at the inception of the contract, the related gains and losses on these contracts are either: (1) deferred as a component of Accumulated Other Comprehensive Income (“AOCI”) until the hedged item is recognized in earnings; (2) offset against the change in fair value of the hedged firm commitment through earnings; or (3) recognized immediately in earnings. At inception and on an ongoing basis, we assess the hedging relationship to determine its effectiveness in offsetting changes in cash flows or fair value attributable to the hedged risk. We exclude from our assessment of effectiveness the portion of the fair value of the forward contracts attributable to the difference between spot exchange rates and forward exchange rates. The ineffective portion of a derivative’s change in fair value and any portion excluded from the assessment of effectiveness are immediately recognized in earnings. Gains and losses on derivative financial instruments that are immediately recognized in earnings are included as a component of Other non-operating income (expense), net, in our Consolidated Statements of Operations. As of September 30, 2017, the majority of our foreign currency forward contracts were designated as cash flow hedging instruments. In addition, we deferred approximately $5 million of net losses on those derivative financial instruments in AOCI, and we expect to reclassify approximately $2 million of deferred losses out of AOCI by September 30, 2018, as hedged items are recognized. The notional value of our outstanding derivative contracts totaled $215 million at September 30, 2017, with maturities extending through March 2019. Of this amount, approximately $89 million is associated with various foreign currency expenditures we expect to incur on one of our ASA segment’s EPCI projects. These instruments consist of contracts to purchase or sell foreign-denominated currencies. As of September 30, 2017, the fair value of these contracts was in a net asset position totaling approximately $3 million. The fair value of outstanding derivative instruments is determined using observable financial market inputs, such as quoted market prices, and is classified as Level 2 in nature. The following tables summarize our derivative financial instruments: Asset and Liability Derivatives September 30, December 31, 2017 2016 (In thousands) Derivatives Designated as Hedges: Location: Accounts receivable-other $ 3,718 $ 2,631 Other assets 152 - Total derivatives asset $ 3,870 $ 2,631 Accounts payable $ 465 $ 9,361 Other liabilities - 4 Total derivatives liability $ 465 $ 9,365 The Effects of Derivative Instruments on our Financial Statements Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Derivatives Designated as Hedges: Amount of gain (loss) recognized in other comprehensive income (loss) $ 4,971 $ 4,228 $ 15,183 $ 14,458 Loss (gain) reclassified from AOCI to Cost of operations 4,209 (679 ) 1,478 23,932 Ineffective portion and amount excluded from effectiveness testing: gain (loss) recognized in Other non-operating expense (226 ) 1,830 (1,145 ) 281 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 12—FAIR VALUE MEASUREMENTS The following table presents the financial instruments outstanding as of September 30, 2017 and December 31, 2016 that are measured at fair value on a recurring basis and financial instruments that are not measured at fair value on a recurring basis. September 30, 2017 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In thousands) Recurring Forward contracts $ 3,405 $ 3,405 $ - $ 3,405 $ - Non-recurring Debt (540,677 ) (563,164 ) - (516,305 ) (46,859 ) December 31, 2016 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In thousands) Recurring Forward contracts $ (6,734 ) $ (6,734 ) $ - $ (6,734 ) $ - Non-recurring Debt (752,520 ) (777,072 ) - (728,072 ) (49,000 ) The carrying value of all non-derivative financial instruments included in current assets (including cash, cash equivalents and restricted cash and accounts receivable) and current liabilities (including accounts payable but excluding short-term debt) approximates the applicable fair value due to the short maturity of those instruments. We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments: Short-term and long-term debt— The fair value of debt instruments valued using a market approach based on quoted prices for similar instruments traded in active markets is classified as Level 2 within the fair value hierarchy. Quoted prices were not available for the NO 105 , Forward contracts— The fair value of forward contracts is classified as Level 2 within the fair value hierarchy and is valued using observable market parameters for similar instruments traded in active markets. Where quoted prices are not available, the income approach is used to value forward contracts, which discounts future cash flows based on current market expectations and credit risk. Fair Value Disclosure of Non-financial Assets During the third quarter of 2016, our management reevaluated our operational plans for certain underutilized marine assets. As a result, we identified certain marine assets that would not be used in a manner consistent with management’s original intent. Based on that determination, we tested the carrying value of those assets for recoverability by comparing the undiscounted future cash flows to the assets’ respective carrying values. As the carrying values of those assets exceeded the undiscounted future cash flows, an impairment was recorded. The impairment was calculated as the difference between the $22 million aggregate carrying value of the assets and the $10 million estimated fair value of the assets, resulting in a $12 million non-cash impairment charge. We utilized both a market approach and income approach to estimate the fair values of the assets. Inputs included market sales data for comparable assets, forecasted cash flows and discount rates believed to be consistent with those used by principal market participants. The fair value measurement was based on inputs that are not observable in the market and thus represent level 3 inputs. During the first quarter of 2016, we impaired our Agile Property, Plant and Equipment These are reported as a component of Other operating (income) expenses, net in our Consolidated Statements of Operations. Previously, Impairment loss was presented separately in our Consolidated Statements of Operations. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 13—STOCKHOLDERS’ EQUITY The changes in the number of shares outstanding and treasury shares held by the Company are as follows: Nine Months Ended September 30, 2017 2016 Shares outstanding Beginning balance 241,388,277 239,016,924 Common stock issued 43,634,232 3,234,994 Purchase of common stock (1,013,749 ) (912,344 ) Ending balance 284,008,760 241,339,574 Shares held as Treasury shares Beginning balance 8,302,004 7,824,204 Purchase of common stock 1,013,749 912,344 Retirement of common stock (821,586 ) (447,173 ) Ending balance 8,494,167 8,289,375 Ordinary shares issued at the end of the period 292,502,927 249,628,949 During the second quarter of 2017, we delivered 40.8 million shares of our common stock to holders of the prepaid common stock purchase contracts comprising part of the TEUs, based on the settlement rate of 3.5496 shares per unit. For further discussion see Note 9, Debt. Accumulated Other Comprehensive Income (Loss) The components of AOCI included in stockholders’ equity are as follows: September 30, 2017 December 31, 2016 (In thousands) Foreign currency translation adjustments ("CTA") $ (48,791 ) $ (42,082 ) Net unrealized gain on investments 346 269 Net unrealized loss on derivative financial instruments (5,159 ) (25,082 ) Accumulated other comprehensive loss $ (53,604 ) $ (66,895 ) The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated: Foreign Currency Translation Adjustments Unrealized Holding Gain (Loss) on Investments Gain (Loss) on Derivative (1) TOTAL For the Three Months Ended September 30, 2017 (In thousands) Balance at July 1, 2017 $ (42,074 ) $ 308 $ (14,425 ) $ (56,191 ) Other comprehensive income (loss) before reclassification (784 ) 38 4,971 4,225 Acquisition of NCI - - - - Amounts reclassified from AOCI (5,933 ) (3) - 4,295 (2) (1,638 ) Net current period other comprehensive income (6,717 ) 38 9,266 2,587 Balance at September 30, 2017 $ (48,791 ) $ 346 $ (5,159 ) $ (53,604 ) For the Nine Months Ended September 30, 2017 Balance at January 1, 2017 $ (42,082 ) $ 269 $ (25,082 ) $ (66,895 ) Other comprehensive income before reclassification (776 ) 77 15,183 14,484 Acquisition of NCI - - 2,284 2,284 Amounts reclassified from AOCI (5,933 ) (3) - 2,456 (2) (3,477 ) Net current period other comprehensive income (6,709 ) 77 19,923 13,291 Balance at September 30, 2017 $ (48,791 ) $ 346 $ (5,159 ) $ (53,604 ) For the Three Months Ended September 30, 2016 Balance at July 1, 2016 $ (37,295 ) $ 264 $ (28,844 ) $ (65,875 ) Other comprehensive income (loss) before reclassification (5,031 ) (3 ) 4,228 (806 ) Amounts reclassified from AOCI - - (651 ) (2) (651 ) Net current period other comprehensive income (5,031 ) (3 ) 3,577 (1,457 ) Balance at September 30, 2016 $ (42,326 ) $ 261 $ (25,267 ) $ (67,332 ) For the Nine Months Ended September 30, 2016 Balance at January 1, 2016 $ (29,925 ) $ 247 $ (64,277 ) $ (93,955 ) Other comprehensive income (loss) before reclassification (12,401 ) 14 14,458 2,071 Amounts reclassified from AOCI - - 24,552 (2) 24,552 Net current period other comprehensive income (12,401 ) 14 39,010 26,623 Balance at September 30, 2016 $ (42,326 ) $ 261 $ (25,267 ) $ (67,332 ) (1) (2) (3) Noncontrolling Interest North Ocean 105 ―In December 2010, J. Ray McDermott (Norway), AS ( “JRM”), one of our indirectly wholly owned subsidiaries, and Oceanteam entered into an Equity Owner’s Agreement (as amended to date, the “Equity Agreement”) to acquire a 75% interest in North Ocean 105 AS, the vessel-owning company. Under the Equity Agreement JRM was given an option to purchase Oceanteam ASA’s 25% ownership interest in the second quarter of 2017. In the second quarter of 2017, we exercised our option under the Equity Agreement and purchased Oceanteam’s 25% interest in the vessel-owning company for approximately $11 million in cash. As part of that transaction, we also assumed the right to a $5 million note payable from North Ocean 105 AS to Oceanteam (which had been issued in connection with a dividend declared by North Ocean 105 AS in 2016). In connection with this acquisition, we recorded a $9 million decrease in noncontrolling interest and a $5 million decrease in note payable to Oceanteam and we recognized a $2 million gain in Capital-in-excess of par value in our Consolidated Financial Statements. Berlian McDermott Sdn. Bhd ―In 2013, we entered into certain joint ventures with TH Heavy Engineering Berhad (“THHE”), whereby we acquired a 30% interest in THHE Fabricators Sdn. Bhd. (“THF”), a subsidiary of THHE, and THHE acquired a 30% interest in our Malaysian subsidiary, Berlian McDermott Sdn. Bhd (“BMD”). In the third quarter of 2016, we reacquired the 30% of noncontrolling interest in BMD from THHE in exchange for our 30% equity interest in THF. We determined the fair value of the asset surrendered to be $17 million. As of and for the periods ended September 30, 2016, in connection with the acquisition of the BMD noncontrolling interest, we recorded an $18 million decrease in Noncontrolling interest, and, in connection with the exchange of our investment in THF, we recorded a $12 million decrease in Investments in unconsolidated affiliates and a $5 million gain in Other income (expense), net in our Consolidated Financial Statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 14—EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands, except share and per share amounts) Net income attributable to McDermott International, Inc. $ 94,701 $ 16,108 $ 153,030 $ 34,593 Weighted average common stock (basic) 283,991,161 240,899,888 269,720,153 240,093,169 Effect of dilutive securities: Tangible equity units (1) - 40,896,300 12,827,388 40,896,300 Stock options, restricted stock and restricted stock units 1,783,460 2,111,165 2,312,169 2,143,451 Potential dilutive common stock 285,774,621 283,907,353 284,859,710 283,132,920 Net income per share attributable to McDermott International, Inc. Basic: $ 0.33 $ 0.07 $ 0.57 $ 0.14 Diluted: $ 0.33 $ 0.06 $ 0.54 $ 0.12 (1) Represents weighted average TEUs outstanding for the nine months periods ended September 30, 2017. Approximately 2 million shares underlying outstanding stock-based awards for the three and nine months ended September 30, 2017 and 2016 were excluded from the computation of diluted earnings per share during those periods because the exercise price of those awards was greater than the average market price of our common stock, and the inclusion of such shares would have been antidilutive. The common stock purchase contracts under the TEUs were settled in April 2017, see Note 9, Debt. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15—COMMITMENTS AND CONTINGENCIES Investigations and Litigation We co-own interests in several entities (collectively, “FloaTEC”) with Keppel Corporation (including its subsidiaries, “Keppel”). We have conducted an internal investigation in connection with allegations by a former Petrobras employee that Keppel’s agent made improper payments to secure project awards from Petrobras on a number of Keppel affiliated projects in Brazil, including a FloaTEC project on which we were also a subcontractor. Keppel’s agent subsequently entered into a plea arrangement with the Brazilian authorities and admitted to having made improper payments on behalf of Keppel to former Petrobras employees on projects unrelated to FloaTEC. We voluntarily contacted the U.S. Department of Justice (“DOJ”) to advise it of the preliminary results of our internal investigation, which identified no evidence to indicate any improper payments were made by us or FloaTEC or that any of our or FloaTEC’s employees authorized, had knowledge of, or direction or control over, any such payments. We have responded to the DOJ’s requests for additional information. If in the future, the DOJ determines that violations of applicable law have occurred involving us, we could be subject to civil or criminal sanctions, including monetary penalties, which could be material. However, based on the preliminary results of our investigation, we do not expect this matter to have a material adverse effect on us or our operations. Additionally, due to the nature of our business, we and our affiliates are, from time to time, involved in litigation or subject to disputes or claims related to our business activities, including, among other things: • performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and • workers’ compensation claims, Jones Act claims, occupational hazard claims, including asbestos-exposure claims, premises liability claims and other claims. Based upon our prior experience, we do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial condition, results of operations or cash flows; however, because of the inherent uncertainty of litigation and other dispute resolution proceedings and, in some cases, the availability and amount of potentially applicable insurance, we can provide no assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material effect on our consolidated financial condition, results of operations or cash flows for the fiscal period in which that resolution occurs. Environmental Matters We have been identified as a potentially responsible party at various cleanup sites under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”). CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct. Generally, however, where there are multiple responsible parties, a final allocation of costs is made based on the amount and type of wastes disposed of by each party and the number of financially viable parties, although this may not be the case with respect to any particular site. We have not been determined to be a major contributor of waste to any of these sites. On the basis of our relative contribution of waste to each site, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows in any given year. In 2013, we established a $6 million environmental reserve in connection with our plan to discontinue the utilization of our Morgan City fabrication facility. We incurred approximately $4 million for remediation activities. Based on our completed remediation activities, as well as our internal assessment, we believe no environmental remediation liability exists with respect to the Morgan City site. As a result, in 2016, we reversed our remaining environmental remediation obligation accrual. Asset Retirement Obligations Asset retirement obligations (“ARO”) are recorded at the present value of the estimated costs to retire the asset at the time the obligation is incurred. At some sites, we are contractually obligated to decommission our fabrication facilities upon site exit. Currently, we are unable to estimate any ARO due to the indeterminate life of our fabrication facilities. We regularly review the optimal future alternatives for our facilities. Any decision to retire one or more facilities will result in recording the present value of such obligations. As of September 30, 2017, no ARO are recorded. Contracts Containing Liquidated Damages Provisions Some of our contracts contain provisions that require us to pay liquidated damages if we are responsible for the failure to meet specified contractual milestone dates and the applicable customer asserts a claim under those provisions. Those contracts define the conditions under which our customers may make claims against us for liquidated damages. In many cases in which we have historically had potential exposure for liquidated damages, such damages ultimately were not asserted by our customers. As of September 30, 2017, we had approximately $30 million of potential liquidated damages exposure, however no liability is recorded in our Consolidated Financial Statements. We believe we will be successful in obtaining schedule extensions or other customer-agreed changes that should resolve the potential for these liquidated damages. However, we may not achieve relief on some or all of the issues involved and, as a result, could be subject to future liquidated damages. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16—SEGMENT REPORTING We disclose the results of each of our reportable segments in accordance with ASC 280, Segment Reporting We manage reportable segments along geographic lines consisting of (1) AEA, (2) MEA and (3) ASA. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects c orporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market (“MTM”) pension actuarial gains and losses, costs not attributable to a particular segment and unallocated direct operating expenses associated with the underutilization f . We account for intersegment sales at prices that we generally establish by reference to similar transactions with unaffiliated customers. Reporting segments are measured based on operating income, which is defined as revenues reduced by total costs and expenses. Summarized financial information is shown in the following tables: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Revenues (1) AEA $ 61,002 $ 69,699 $ 130,697 $ 219,134 MEA 736,291 334,731 1,602,955 922,820 ASA 161,238 154,113 532,983 852,248 Total revenues: $ 958,531 $ 558,543 $ 2,266,635 $ 1,994,202 Income before provision for income taxes: Operating income (loss): AEA $ (7,171 ) $ 2,871 $ (18,290 ) $ 32,831 MEA 163,626 60,365 345,483 159,701 ASA 23,682 27,381 86,351 109,082 Segment operating income 180,137 90,617 413,544 301,614 Corporate and Other (2) (53,065 ) (47,562 ) (143,288 ) (165,578 ) Total operating income 127,072 43,055 270,256 136,036 Interest expense, net (11,976 ) (17,431 ) (50,886 ) (41,324 ) Other non-operating income (expense), net 803 5,237 (1,074 ) (1,005 ) Income before provision for income taxes $ 115,899 $ 30,861 $ 218,296 $ 93,707 Capital expenditures: AEA $ 5,369 $ 269 $ 20,694 $ 3,795 MEA 7,858 8,318 18,489 13,021 ASA 1,812 16,603 7,548 178,178 Corporate and Other (3) 1,145 1,529 50,375 2,399 Total capital expenditures: $ 16,184 $ 26,719 $ 97,106 $ 197,393 Depreciation and amortization: AEA $ 5,300 $ 8,992 $ 16,708 $ 28,717 MEA 13,224 7,724 34,889 19,632 ASA 7,966 8,970 20,913 21,877 Corporate and Other 1,857 2,140 5,522 6,529 Total depreciation and amortization: $ 28,347 $ 27,826 $ 78,032 $ 76,755 (1) (2) • • o Fair Value Measurements, o Restructuring, . (3) Corporate and Other capital expenditures in the first nine months of 2017 include the purchase of the Amazon , a pipelay and construction vessel. Following the purchase we sold this vessel to an unrelated third party and simultaneously entered into an 11-year bareboat charter agreement, Sale Leaseback. September 30, 2017 December 31, 2016 (In thousands) Segment assets (1) AEA $ 695,751 $ 727,328 MEA 1,632,064 907,936 ASA 671,864 976,470 Corporate and Other 461,756 610,496 Total assets $ 3,461,435 $ 3,222,230 (1) Our marine vessels are included in the area in which they were located as of reporting date. |
BASIS OF PRESENTATION AND SIG24
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations McDermott International, Inc. (“MDR”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a leading provider of integrated engineering, procurement, construction and installation (“EPCI”), front-end engineering and design (“FEED”) and module fabrication services for upstream field developments worldwide. We deliver fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for complex offshore and subsea oil and gas projects. Operating in approximately 20 countries across the Americas, Europe, Africa, Asia and Australia, our integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. We support our activities with comprehensive project management and procurement services, while utilizing our fully integrated capabilities in both shallow water and deepwater construction. Our customers include national, major integrated and other oil and gas companies, and we operate in most major offshore oil and gas producing regions throughout the world. We execute our contracts through a variety of methods, principally fixed-price, but also including cost reimbursable, cost-plus, day-rate and unit-rate basis or some combination of those methods. In these Notes to our Consolidated Financial Statements, unless the context otherwise indicates, “we,” “us” and “our” mean MDR and its consolidated subsidiaries. |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements are unaudited and have been prepared from our books and records in accordance with Rule 10-1 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of our management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of results of operations for a full year. These Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in our Current Report on Form 8-K filed with the SEC on April 25, 2017 (the “April 25 Form 8-K”). |
Classification | Classification Certain prior year amounts have been reclassified for consistency with the current year presentation. Previously reported Consolidated Financial Statements have been adjusted to reflect those changes. In addition, in the first quarter of 2017, we implemented certain changes to our financial reporting structure. Corporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market pension actuarial gains and losses, costs not attributable to a particular reportable segment, and unallocated direct operating expenses associated with the underutilization of vessels, fabrication facilities and engineering resources, are no longer apportioned to our reportable segments. Those expenses are reported under “Corporate and Other.” Previously reported segment financial information has been adjusted to reflect this change, see Note 16, Segment Reporting |
Accounting Guidance Issued But Not Adopted | Accounting Guidance Issued But Not Adopted as of September 30, 2017 Derivatives— In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2017-12, . The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. This guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This ASU is effective prospectively for annual periods beginning on or after December 15, 2018. Early adoption is permitted. We intend to adopt this guidance on January 1, 2019. We plan to apply this ASU to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach if an adjustment is required ( , with a cumulative effect adjustment recorded to the opening balance of retained earnings as of the initial application date). The adoption of this guidance is not expected to have a material impact on our future Consolidated Financial Statements or related disclosures. Stock Compensation— In May 2017, the FASB issued ASU 2017-09, . The general model for modifications of share-based payment awards is to record the incremental value arising from a change as additional compensation cost. This guidance clarifies situations in which the existing award is not probable of vesting, and a modification gives rise to a new measurement date; no change in the total compensation cost recognized for an existing award will be required if there is no change to the fair value, vesting conditions and classification of the award. This ASU is effective prospectively for annual periods beginning on or after December 15, 2017. Early adoption is permitted. The application of this amendment is not expected to have a material impact on our future Consolidated Financial Statements or related disclosures. Pension and Postretirement Benefits— In March 2017, the FASB issued ASU 2017-07, . This ASU requires bifurcation of certain components of net pension and postretirement benefit cost (“benefit costs”) in the Consolidated Statements of Operations. The service cost components are required to be presented in operating income and the remaining components are required to be presented outside of operating income. This ASU is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. Upon future adoption of this guidance, benefit costs, excluding service costs component, will be included in Other non-operating income (expense), net in our Consolidated Statements of Operations. Currently, all components of benefit costs are reported in Selling, general and administrative expenses in our Consolidated Statements of Operations . Income Taxes— In October 2016, the FASB issued ASU 2016-16, . This ASU requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The ASU is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The application of this amendment is not expected to have a material impact on our future Consolidated Financial Statements and related disclosures. Financial Instruments —In June 2016, the FASB issued ASU 2016-13, . This ASU will require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. A valuation account, allowance for credit losses, will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. This ASU is effective for interim and annual periods beginning after December 15, 2019. We are currently assessing the impact of this guidance on our future Consolidated Financial Statements and related disclosures. Leases —In February 2016, the FASB issued ASU 2016-02 . The ASU will require entities that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. Consistent with current U.S. GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current U.S. GAAP—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. This ASU is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact of this ASU on our future Consolidated Financial Statements and related disclosures. Revenue from Contracts with Customers (Topic 606)— In May 2014, the FASB issued a new standard related to revenue recognition which supersedes most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property, identifying performance obligations, reporting gross versus net revenue and narrow-scope improvements and practical expedients. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (“full retrospective method”), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (“modified retrospective application”). We are currently assessing the impact of this ASU and the amendments on our future Consolidated Financial Statements and related disclosures. Adoption may affect the manner in which the company determines the unit of account for its projects and estimates revenue associated with unapproved change orders and claims. We intend to adopt the new standard on January 1, 2018 (the “initial application” date): • using the modified retrospective application, with no restatement of the comparative periods presented and a cumulative effect adjustment as of the date of adoption; • applying the new standard only to those contracts that are not substantially complete at the date of initial application; and • disclosing the impact of the new standard on our 2018 Consolidated Financial Statements. This standard could have a significant impact on our 2018 Consolidated Financial Statements and related disclosures. |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Costs Incurred and Future Cost Expected to be Incurred | Three Months Ended Nine Months Ended From Inception to September 30, 2016 September 30, 2017 (in thousands) Americas Restructuring $ - $ (1,500 ) $ 44,194 McDermott Profitability Initiative Severance and other personnel-related costs 1,165 2,590 17,807 Asset impairment and disposal - - 7,471 Legal and other advisor fees - 222 11,639 Other - 2,436 10,045 1,165 5,248 46,962 Additional Overhead Reduction Severance and other personnel-related costs 556 4,600 5,012 Legal and other advisor fees - 1,968 2,768 Other 115 371 385 671 6,939 8,165 Total $ 1,836 $ 10,687 $ 99,321 |
CASH, CASH EQUIVALENTS AND RE26
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the totals of such amounts shown in the Consolidated Statements of Cash Flows. September 30, 2017 December 31, 2016 (in thousands) Cash and cash equivalents $ 416,352 $ 595,921 Restricted cash and cash equivalents 18,221 16,412 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows $ 434,573 $ 612,333 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Contract Receivables | A summary of contract receivables is as follows: September 30, 2017 December 31, 2016 (in thousands) Contract receivables: Contracts in progress $ 171,587 $ 245,604 Completed contracts 18,289 40,345 Retainages 86,153 58,431 Unbilled (1) 4,303 4,303 Less allowances (17,213 ) (14,299 ) Accounts receivable — $ 263,119 $ 334,384 (1) This amount relates to a project milestone billing for which we are awaiting the customer’s final acceptance certificate. We expect to receive the final acceptance certificate during 2017. |
Retainages on Contracts | The following is a summary of retainages on our contracts: September 30, 2017 December 31, 2016 (in thousands) Retainages expected to be collected within one year $ 86,153 $ 58,431 Retainages expected to be collected after one year 75,615 127,193 Total retainages $ 161,768 $ 185,624 |
CONTRACTS IN PROGRESS AND ADV28
CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
Components of Contracts in Progress and Advance Billings on Contracts | A detail of the components of contracts in progress and advance billings on contracts is as follows: September 30, 2017 December 31, 2016 (In thousands) Costs incurred less costs of revenue recognized $ 108,149 $ 119,688 Revenues recognized less billings to customers 747,382 199,450 Contracts in Progress $ 855,531 $ 319,138 Billings to customers less revenue recognized 73,765 42,637 Costs incurred less costs of revenue recognized (30,972 ) 149,849 Advance Billings on Contracts $ 42,793 $ 192,486 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt Obligations | The carrying values of our long-term debt obligations, net of unamortized debt issuance costs of $5 million and $14 million as of September 30, 2017 and December 31, 2016, respectively, are as follows: September 30, 2017 December 31, 2016 (In thousands) Senior Notes $ 494,615 $ 493,461 North Ocean 105 construction financing 28,595 31,877 Vendor equipment financing 15,686 - Term Loan - 212,070 Amortizing Notes - 7,932 Other 1,781 7,180 540,677 752,520 Less: Amounts due within one year 19,035 48,125 Total long-term debt $ 521,642 $ 704,395 |
PENSION AND POSTRETIREMENT BE30
PENSION AND POSTRETIREMENT BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Net Periodic Cost (Benefit) | Net periodic cost (benefit) for our qualified defined benefit pension plan and several of our non-qualified supplemental defined benefit pension plans (the “Domestic Plans”) and our J. Ray McDermott, S.A. Third Country National Employees Pension Plan (the “TCN Plan”) was as follows: Domestic Plans Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest cost $ 4,991 $ 5,276 $ 14,973 $ 15,828 Expected return on plan assets (4,907 ) (5,002 ) (14,721 ) (15,006 ) Net periodic (benefit) cost $ 84 $ 274 $ 252 $ 822 TCN Plan Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest cost $ 290 $ 338 $ 870 $ 1,014 Expected return on plan assets (345 ) (397 ) (1,035 ) (1,191 ) Net periodic (benefit) cost $ (55 ) $ (59 ) $ (165 ) $ (177 ) |
DERIVATIVE FINANCIAL INSTRUME31
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | The following tables summarize our derivative financial instruments: Asset and Liability Derivatives September 30, December 31, 2017 2016 (In thousands) Derivatives Designated as Hedges: Location: Accounts receivable-other $ 3,718 $ 2,631 Other assets 152 - Total derivatives asset $ 3,870 $ 2,631 Accounts payable $ 465 $ 9,361 Other liabilities - 4 Total derivatives liability $ 465 $ 9,365 |
Effects of Derivative Instruments on Financial Statements | The Effects of Derivative Instruments on our Financial Statements Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Derivatives Designated as Hedges: Amount of gain (loss) recognized in other comprehensive income (loss) $ 4,971 $ 4,228 $ 15,183 $ 14,458 Loss (gain) reclassified from AOCI to Cost of operations 4,209 (679 ) 1,478 23,932 Ineffective portion and amount excluded from effectiveness testing: gain (loss) recognized in Other non-operating expense (226 ) 1,830 (1,145 ) 281 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Outstanding Measured at Fair Value on Recurring and Nonrecurring Basis | The following table presents the financial instruments outstanding as of September 30, 2017 and December 31, 2016 that are measured at fair value on a recurring basis and financial instruments that are not measured at fair value on a recurring basis. September 30, 2017 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In thousands) Recurring Forward contracts $ 3,405 $ 3,405 $ - $ 3,405 $ - Non-recurring Debt (540,677 ) (563,164 ) - (516,305 ) (46,859 ) December 31, 2016 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In thousands) Recurring Forward contracts $ (6,734 ) $ (6,734 ) $ - $ (6,734 ) $ - Non-recurring Debt (752,520 ) (777,072 ) - (728,072 ) (49,000 ) |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Changes in the Number of Shares Outstanding and Treasury Shares Held by the Company | The changes in the number of shares outstanding and treasury shares held by the Company are as follows: Nine Months Ended September 30, 2017 2016 Shares outstanding Beginning balance 241,388,277 239,016,924 Common stock issued 43,634,232 3,234,994 Purchase of common stock (1,013,749 ) (912,344 ) Ending balance 284,008,760 241,339,574 Shares held as Treasury shares Beginning balance 8,302,004 7,824,204 Purchase of common stock 1,013,749 912,344 Retirement of common stock (821,586 ) (447,173 ) Ending balance 8,494,167 8,289,375 Ordinary shares issued at the end of the period 292,502,927 249,628,949 |
Reclassifications [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Components of Accumulated Other Comprehensive Income (Loss) Included in Stockholders' Equity | The components of AOCI included in stockholders’ equity are as follows: September 30, 2017 December 31, 2016 (In thousands) Foreign currency translation adjustments ("CTA") $ (48,791 ) $ (42,082 ) Net unrealized gain on investments 346 269 Net unrealized loss on derivative financial instruments (5,159 ) (25,082 ) Accumulated other comprehensive loss $ (53,604 ) $ (66,895 ) The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated: Foreign Currency Translation Adjustments Unrealized Holding Gain (Loss) on Investments Gain (Loss) on Derivative (1) TOTAL For the Three Months Ended September 30, 2017 (In thousands) Balance at July 1, 2017 $ (42,074 ) $ 308 $ (14,425 ) $ (56,191 ) Other comprehensive income (loss) before reclassification (784 ) 38 4,971 4,225 Acquisition of NCI - - - - Amounts reclassified from AOCI (5,933 ) (3) - 4,295 (2) (1,638 ) Net current period other comprehensive income (6,717 ) 38 9,266 2,587 Balance at September 30, 2017 $ (48,791 ) $ 346 $ (5,159 ) $ (53,604 ) For the Nine Months Ended September 30, 2017 Balance at January 1, 2017 $ (42,082 ) $ 269 $ (25,082 ) $ (66,895 ) Other comprehensive income before reclassification (776 ) 77 15,183 14,484 Acquisition of NCI - - 2,284 2,284 Amounts reclassified from AOCI (5,933 ) (3) - 2,456 (2) (3,477 ) Net current period other comprehensive income (6,709 ) 77 19,923 13,291 Balance at September 30, 2017 $ (48,791 ) $ 346 $ (5,159 ) $ (53,604 ) For the Three Months Ended September 30, 2016 Balance at July 1, 2016 $ (37,295 ) $ 264 $ (28,844 ) $ (65,875 ) Other comprehensive income (loss) before reclassification (5,031 ) (3 ) 4,228 (806 ) Amounts reclassified from AOCI - - (651 ) (2) (651 ) Net current period other comprehensive income (5,031 ) (3 ) 3,577 (1,457 ) Balance at September 30, 2016 $ (42,326 ) $ 261 $ (25,267 ) $ (67,332 ) For the Nine Months Ended September 30, 2016 Balance at January 1, 2016 $ (29,925 ) $ 247 $ (64,277 ) $ (93,955 ) Other comprehensive income (loss) before reclassification (12,401 ) 14 14,458 2,071 Amounts reclassified from AOCI - - 24,552 (2) 24,552 Net current period other comprehensive income (12,401 ) 14 39,010 26,623 Balance at September 30, 2016 $ (42,326 ) $ 261 $ (25,267 ) $ (67,332 ) (1) (2) (3) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands, except share and per share amounts) Net income attributable to McDermott International, Inc. $ 94,701 $ 16,108 $ 153,030 $ 34,593 Weighted average common stock (basic) 283,991,161 240,899,888 269,720,153 240,093,169 Effect of dilutive securities: Tangible equity units (1) - 40,896,300 12,827,388 40,896,300 Stock options, restricted stock and restricted stock units 1,783,460 2,111,165 2,312,169 2,143,451 Potential dilutive common stock 285,774,621 283,907,353 284,859,710 283,132,920 Net income per share attributable to McDermott International, Inc. Basic: $ 0.33 $ 0.07 $ 0.57 $ 0.14 Diluted: $ 0.33 $ 0.06 $ 0.54 $ 0.12 (1) Represents weighted average TEUs outstanding for the nine months periods ended September 30, 2017. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Information about Operations in Different Segments | Summarized financial information is shown in the following tables: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Revenues (1) AEA $ 61,002 $ 69,699 $ 130,697 $ 219,134 MEA 736,291 334,731 1,602,955 922,820 ASA 161,238 154,113 532,983 852,248 Total revenues: $ 958,531 $ 558,543 $ 2,266,635 $ 1,994,202 Income before provision for income taxes: Operating income (loss): AEA $ (7,171 ) $ 2,871 $ (18,290 ) $ 32,831 MEA 163,626 60,365 345,483 159,701 ASA 23,682 27,381 86,351 109,082 Segment operating income 180,137 90,617 413,544 301,614 Corporate and Other (2) (53,065 ) (47,562 ) (143,288 ) (165,578 ) Total operating income 127,072 43,055 270,256 136,036 Interest expense, net (11,976 ) (17,431 ) (50,886 ) (41,324 ) Other non-operating income (expense), net 803 5,237 (1,074 ) (1,005 ) Income before provision for income taxes $ 115,899 $ 30,861 $ 218,296 $ 93,707 Capital expenditures: AEA $ 5,369 $ 269 $ 20,694 $ 3,795 MEA 7,858 8,318 18,489 13,021 ASA 1,812 16,603 7,548 178,178 Corporate and Other (3) 1,145 1,529 50,375 2,399 Total capital expenditures: $ 16,184 $ 26,719 $ 97,106 $ 197,393 Depreciation and amortization: AEA $ 5,300 $ 8,992 $ 16,708 $ 28,717 MEA 13,224 7,724 34,889 19,632 ASA 7,966 8,970 20,913 21,877 Corporate and Other 1,857 2,140 5,522 6,529 Total depreciation and amortization: $ 28,347 $ 27,826 $ 78,032 $ 76,755 (1) (2) • • o Fair Value Measurements, o Restructuring, . (3) Corporate and Other capital expenditures in the first nine months of 2017 include the purchase of the Amazon , a pipelay and construction vessel. Following the purchase we sold this vessel to an unrelated third party and simultaneously entered into an 11-year bareboat charter agreement, Sale Leaseback. |
Information about Segment Assets by Country | September 30, 2017 December 31, 2016 (In thousands) Segment assets (1) AEA $ 695,751 $ 727,328 MEA 1,632,064 907,936 ASA 671,864 976,470 Corporate and Other 461,756 610,496 Total assets $ 3,461,435 $ 3,222,230 (1) Our marine vessels are included in the area in which they were located as of reporting date. |
Basis of Presentation and Sig36
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) | Sep. 30, 2017Country |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of countries | 20 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Unapproved change orders | $ 98,000,000 | $ 139,000,000 | $ 98,000,000 | $ 139,000,000 | |
Revenues | [1] | 958,531,000 | 558,543,000 | 2,266,635,000 | 1,994,202,000 |
MEA [Member] | Unconsolidated joint ventures [Member] | |||||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
MEA [Member] | Claims Revenue [Member] | |||||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Revenues | 10,000,000 | 16,000,000 | |||
Backlog [Member] | |||||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Unapproved change orders | $ 9,000,000 | $ 21,000,000 | 9,000,000 | $ 21,000,000 | |
EPCI Project [Member] | MEA [Member] | KJO Hout Project [Member] | |||||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Loss on contracts | $ 9,000,000 | ||||
[1] | Intersegment transactions included in revenues were not significant for all the periods presented. |
Use of Estimates - Additional I
Use of Estimates - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Project | Sep. 30, 2016USD ($)Project | Dec. 31, 2016USD ($) | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | $ 36 | $ 34 | $ 101 | ||
AEA [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | 4 | 6 | $ (3) | $ 29 | |
Number of projects | Project | 2 | ||||
AEA [Member] | PB Litoral project [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | $ 7 | ||||
MEA [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | 36 | 12 | $ 72 | 29 | |
Number of projects | Project | 2 | ||||
ASA [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | $ 4 | $ 16 | $ 46 | $ 43 | |
ASA [Member] | Ichthys Project [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | $ 34 | ||||
ASA [Member] | Ichthys Project [Member] | Maximum [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of additional estimated project costs On Income | $ 10 | ||||
MEA and ASA Segments [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Effect of changes in estimated project cost on operating results | $ 115 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring And Related Activities [Abstract] | |||
Restructuring costs | $ 1,836,000 | $ 0 | $ 10,687,000 |
Restructuring - Restructuring C
Restructuring - Restructuring Costs Incurred and Future Cost Expected to be Incurred (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | $ 1,836,000 | $ 0 | $ 10,687,000 |
Incurred from inception to September 30, 2017 | 99,321,000 | ||
Americas Restructuring [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | (1,500,000) | ||
Incurred from inception to September 30, 2017 | 44,194,000 | ||
McDermott Profitability Initiative [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 1,165,000 | 5,248,000 | |
Incurred from inception to September 30, 2017 | 46,962,000 | ||
McDermott Profitability Initiative [Member] | Severance and other personnel-related costs [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 1,165,000 | 2,590,000 | |
Incurred from inception to September 30, 2017 | 17,807,000 | ||
McDermott Profitability Initiative [Member] | Asset impairment and disposal [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred from inception to September 30, 2017 | 7,471,000 | ||
McDermott Profitability Initiative [Member] | Legal and other advisor fees [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 222,000 | ||
Incurred from inception to September 30, 2017 | 11,639,000 | ||
McDermott Profitability Initiative [Member] | Other Charges [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 2,436,000 | ||
Incurred from inception to September 30, 2017 | 10,045,000 | ||
Additional Overhead Reduction [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 671,000 | 6,939,000 | |
Incurred from inception to September 30, 2017 | 8,165,000 | ||
Additional Overhead Reduction [Member] | Severance and other personnel-related costs [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 556,000 | 4,600,000 | |
Incurred from inception to September 30, 2017 | 5,012,000 | ||
Additional Overhead Reduction [Member] | Legal and other advisor fees [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | 1,968,000 | ||
Incurred from inception to September 30, 2017 | 2,768,000 | ||
Additional Overhead Reduction [Member] | Other Charges [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Incurred for the period | $ 115,000 | $ 371,000 | |
Incurred from inception to September 30, 2017 | $ 385,000 |
Cash, Cash Equivalents and Re41
Cash, Cash Equivalents and Restricted Cash - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Cash And Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 416,352 | $ 595,921 | ||
Restricted cash and cash equivalents | 18,221 | 16,412 | ||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows | $ 434,573 | $ 612,333 | $ 600,088 | $ 781,645 |
Accounts Receivable - Contract
Accounts Receivable - Contract Receivables (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Accounts Notes And Loans Receivable [Line Items] | |||
Retainages | $ 86,153 | $ 58,431 | |
Accounts receivable—trade, net | 263,119 | 334,384 | |
Contract receivables [Member] | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Contracts receivable | 171,587 | 245,604 | |
Unbilled | [1] | 4,303 | 4,303 |
Less allowances | (17,213) | (14,299) | |
Accounts receivable—trade, net | 263,119 | 334,384 | |
Contract receivables [Member] | Completed contracts [Member] | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Contracts receivable | $ 18,289 | $ 40,345 | |
[1] | This amount relates to a project milestone billing for which we are awaiting the customer’s final acceptance certificate. We expect to receive the final acceptance certificate during 2017. |
Accounts Receivable - Retainage
Accounts Receivable - Retainages on Contracts (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Retainages expected to be collected within one year | $ 86,153 | $ 58,431 |
Retainages expected to be collected after one year | 75,615 | 127,193 |
Total retainages | $ 161,768 | $ 185,624 |
Contracts in Progress and Adv44
Contracts in Progress and Advance Billings on Contracts - Components of Contracts in Progress and Advance Billings on Contracts (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | ||
Costs incurred less costs of revenue recognized | $ 108,149 | $ 119,688 |
Revenues recognized less billings to customers | 747,382 | 199,450 |
Contracts in Progress | 855,531 | 319,138 |
Billings to customers less revenue recognized | 73,765 | 42,637 |
Costs incurred less costs of revenue recognized | (30,972) | 149,849 |
Advance Billings on Contracts | $ 42,793 | $ 192,486 |
Sale Leaseback - Additional Inf
Sale Leaseback - Additional Information (Detail) - Amazon Pipelay and Construction Vessel [Member] - USD ($) | 1 Months Ended | 9 Months Ended |
Jan. 31, 2017 | Sep. 30, 2017 | |
Sale Leaseback Transaction [Line Items] | ||
Purchase of vessel, cash consideration | $ 52,000,000 | |
Proceeds from sale of vessel, cash consideration | $ 52,000,000 | |
Bareboat charter agreement, term | 11 years | 11 years |
Gain loss on sale of business | $ 0 | |
Annual charter obligation due year one and two | 3,000,000 | |
Annual charter obligation due year three through eleven | $ 8,000,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2017USD ($)$ / sharesshares | Feb. 28, 2017USD ($) | Apr. 30, 2014USD ($)$ / EquityUnitsshares | Jun. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)Installmentshares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($)shares | Apr. 30, 2017$ / sharesshares | Dec. 31, 2010 | Sep. 30, 2010 | |
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 5,000,000 | $ 14,000,000 | ||||||||
Repayment of outstanding term loans | 230,715,000 | $ 93,755,000 | ||||||||
Line of Credit facility maximum amount outstanding | $ 326,000,000 | |||||||||
Units issued | shares | 11,500,000 | |||||||||
Tangible units interest rate percentage | 6.25% | |||||||||
Unit price per share | $ / EquityUnits | 25 | |||||||||
Initial principal amount per amortizing note | $ / EquityUnits | 4.1266 | |||||||||
Common stock issued to holders of TEU | shares | 40,800,000 | 40,800,000 | 292,502,927 | 249,628,949 | 249,690,281 | 40,800,000 | ||||
Settlement rate per tangible equity unit | $ / shares | $ 3.5496 | $ 3.5496 | $ 3.5496 | |||||||
Bank guarantees issued | $ 504,000,000 | $ 359,000,000 | ||||||||
Bonds issued related to JRM Mexico general agreement of indemnity | 56,000,000 | 79,000,000 | ||||||||
Line of Credit facility maximum uncommitted outstanding amount | 300,000,000 | |||||||||
JRM Mexico [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit, first lien | $ 50,000,000 | |||||||||
Amortizing note interest rate percentage | 5.75% | |||||||||
Percentage of ownership in the subsidiary | 100.00% | |||||||||
Purchase agreement period | 364 days | |||||||||
Receivables sold | 2,000,000 | |||||||||
Loan agreement for equipment financing, term | 21 months | |||||||||
Equipment financing amount | $ 47,000,000 | |||||||||
Borrowing outstanding | $ 16,000,000 | |||||||||
McDermott International Management [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of ownership in the subsidiary | 100.00% | |||||||||
Description of loan agreement | JRM Mexico’s obligations in connection with this equipment financing are guaranteed by McDermott International Management, S. de RL., one of our 100% owned subsidiaries | |||||||||
Financial Letters of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of Credit facility maximum amount outstanding | $ 19,000,000 | |||||||||
London Interbank Offered Rate (LIBOR) [Member] | JRM Mexico [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 4.25% | |||||||||
Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument maturity date | May 1, 2021 | |||||||||
Issue of second-lien seven-year senior secured notes | $ 500,000,000 | |||||||||
Debt instrument interest rate | 8.00% | |||||||||
Issuance of tangible equity units | $ 240,000,000 | |||||||||
Letter of Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cash collateralize letter of credit permitted to deposit, amount | 300,000,000 | |||||||||
Cash collateralized letters of credit | 175,000,000 | |||||||||
Letter of credit supported by cash collateral | 18,000,000 | 16,000,000 | ||||||||
Letter of credit supported by cash collateral maximum amount | 166,000,000 | |||||||||
Revolving Loans [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of Credit facility maximum amount outstanding | $ 0 | |||||||||
Prior Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of Credit facility maximum amount outstanding | $ 442,000,000 | |||||||||
North Ocean 105 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of interest acquired in subsidiary | 75.00% | |||||||||
Ownership percentage in Oceanteam ASA's | 25.00% | 25.00% | ||||||||
Amended and Restated Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 21,000,000 | $ 21,000,000 | ||||||||
Repayment of outstanding term loans | 217,000,000 | |||||||||
Line of Credit facility maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||
Commitment fee on the unused portion of credit agreement | 0.50% | |||||||||
Letter of credit outstanding fronting fee percentage | 0.25% | 0.25% | ||||||||
Minimum fixed charge coverage ratio | 1.15% | |||||||||
Debt instrument covenant minimum liquidity | $ 100,000,000 | |||||||||
Minimum collateral coverage ratio | 1.20% | |||||||||
Amended and Restated Credit Agreement [Member] | Fiscal Quarter Ending on or Before December 31, 2019 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum permitted leverage ratio | 3.50% | |||||||||
Amended and Restated Credit Agreement [Member] | Fiscal Quarter Ending After December 31, 2019 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum permitted leverage ratio | 3.25% | |||||||||
Amended and Restated Credit Agreement [Member] | Financial Letters of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit fees | 4.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Financial Letters of Credit [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit participation fee percentage | 3.75% | 3.75% | ||||||||
Amended and Restated Credit Agreement [Member] | Financial Letters of Credit [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit participation fee percentage | 4.25% | 4.25% | ||||||||
Amended and Restated Credit Agreement [Member] | Performance Stand By Letters Of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit fees | 2.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Performance Stand By Letters Of Credit [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit participation fee percentage | 1.875% | 1.875% | ||||||||
Amended and Restated Credit Agreement [Member] | Performance Stand By Letters Of Credit [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit participation fee percentage | 2.125% | 2.125% | ||||||||
Amended and Restated Credit Agreement [Member] | Eurodollar Rate [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 3.75% | |||||||||
Amended and Restated Credit Agreement [Member] | Eurodollar Rate [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 4.25% | |||||||||
Amended and Restated Credit Agreement [Member] | Federal Funds Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 0.50% | |||||||||
Amended and Restated Credit Agreement [Member] | 30-day Eurodollar Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 1.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Base Rate [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 2.75% | |||||||||
Amended and Restated Credit Agreement [Member] | Base Rate [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 3.25% | |||||||||
Amended and Restated Credit Agreement [Member] | Second-lien Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 500,000,000 | $ 500,000,000 | ||||||||
Debt instrument, description | Our $500 million second-lien notes due in April 2021, in which case the Credit Agreement will mature on December 1, 2020. | |||||||||
Debt instrument extended maturity month and year | 2021-04 | |||||||||
Debt instrument maturity date | Dec. 1, 2020 | |||||||||
Amended and Restated Credit Agreement [Member] | Letter of Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit, first lien | $ 810,000,000 | 810,000,000 | ||||||||
Amended and Restated Credit Agreement [Member] | Revolving Loans [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit, first lien | 300,000,000 | 300,000,000 | ||||||||
Line of Credit facility maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | ||||||||
Amended and Restated Credit Agreement [Member] | Revolving Loans [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of line of credit facility limitation on trade accounts receivable and cash and cash equivalents | 75.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Revolving Loans [Member] | Eurodollar Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 4.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Revolving Loans [Member] | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Base rate and applicable margin | 3.00% | |||||||||
Amended and Restated Credit Agreement [Member] | Senior Secured Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, description | The senior secured credit facility established by the Credit Agreement is scheduled to mature in June 2022, unless we do not repay in full, by December 1, 2020 | |||||||||
Line of credit, extended maturity month and year | 2022-06 | |||||||||
Line of credit, expiration date | Dec. 1, 2020 | |||||||||
North Ocean Construction Financing [Member] | North Ocean 105 [Member] | Secured Debt [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of interest acquired in subsidiary | 75.00% | |||||||||
Number of semiannual installments of principal repayment | Installment | 17 | |||||||||
Principal repayment, description | The financing agreement requires principal repayment in 17 consecutive semiannual installments, which commenced on October 1, 2012. | |||||||||
Ownership percentage in Oceanteam ASA's | 25.00% | 25.00% | ||||||||
Purchase of vessel, cash consideration | $ 11,000,000 | |||||||||
Note payable assumed | $ 5,000,000 | $ 5,000,000 | ||||||||
Senior Amortizing Note Due April 1, 2017 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument maturity date | Apr. 1, 2017 | |||||||||
Amortizing note interest rate percentage | 7.75% | |||||||||
Middle Eastern Bank [Member] | Letter of Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of Credit facility maximum amount outstanding | $ 625,000,000 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term borrowing | $ 540,677 | $ 752,520 |
Less: Amounts due within one year | 19,035 | 48,125 |
Long-term debt | 521,642 | 704,395 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | 494,615 | 493,461 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | 212,070 | |
Amortizing Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | 7,932 | |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | 1,781 | 7,180 |
North Ocean 105 Construction Financing [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | 28,595 | $ 31,877 |
Vendor Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing | $ 15,686 |
Pension and Postretirement Be48
Pension and Postretirement Benefits - Net Periodic Cost (Benefit) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Domestic Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 4,991 | $ 5,276 | $ 14,973 | $ 15,828 |
Expected return on plan assets | (4,907) | (5,002) | (14,721) | (15,006) |
Net periodic (benefit) cost | 84 | 274 | 252 | 822 |
TCN Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 290 | 338 | 870 | 1,014 |
Expected return on plan assets | (345) | (397) | (1,035) | (1,191) |
Net periodic (benefit) cost | $ (55) | $ (59) | $ (165) | $ (177) |
Derivative Financial Instrume49
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Net gain (loss) on derivative financial instruments | $ (5,159,000) | $ (25,082,000) |
Net deferred losses expected to be reclassified from AOCI over next 12 months | (2,000,000) | |
Notional value of outstanding derivative contracts | $ 215,000,000 | |
Derivative contracts, maturity date | Mar. 31, 2019 | |
Fair value of derivative contracts | $ 3,000,000 | |
EPCI projects [Member] | ||
Derivative [Line Items] | ||
Notional value of outstanding derivative contracts | $ 89,000,000 |
Derivative Financial Instrume50
Derivative Financial Instruments - Derivative Financial Instruments (Detail) - Derivatives Designated as Hedges [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives Fair Value [Line Items] | ||
Asset derivatives fair value | $ 3,870 | $ 2,631 |
Liability derivatives fair value | 465 | 9,365 |
Accounts receivable-other [Member] | ||
Derivatives Fair Value [Line Items] | ||
Asset derivatives fair value | 3,718 | 2,631 |
Other assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Asset derivatives fair value | 152 | |
Other liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Liability derivatives fair value | 4 | |
Accounts payable [Member] | ||
Derivatives Fair Value [Line Items] | ||
Liability derivatives fair value | $ 465 | $ 9,361 |
Derivative Financial Instrume51
Derivative Financial Instruments - Effects of Derivative Instruments on Financial Statements (Detail) - Derivatives Designated as Hedges [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of gain (loss) recognized in other comprehensive income (loss) | $ 4,971 | $ 4,228 | $ 15,183 | $ 14,458 |
Cost of operations [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Loss (gain) reclassified from AOCI to Cost of operations | 4,209 | (679) | 1,478 | 23,932 |
Other non-operating expense [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Ineffective portion and amount excluded from effectiveness testing: gain (loss) recognized | $ (226) | $ 1,830 | $ (1,145) | $ 281 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Instruments Outstanding Measured at Fair Value on Recurring and Nonrecurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Amount [Member] | ||
Recurring | ||
Forward contracts | $ 3,405 | $ (6,734) |
Non-recurring | ||
Debt | (540,677) | (752,520) |
Fair value [Member] | ||
Recurring | ||
Forward contracts | 3,405 | (6,734) |
Non-recurring | ||
Debt | (563,164) | (777,072) |
Level 2 [Member] | ||
Recurring | ||
Forward contracts | 3,405 | (6,734) |
Non-recurring | ||
Debt | (516,305) | (728,072) |
Level 3 [Member] | ||
Non-recurring | ||
Debt | $ (46,859) | $ (49,000) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Aggregate carrying value of assets | [1] | $ 3,461,435 | $ 3,222,230 | ||
ASA [Member] | Marine Assets [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Non-cash impairment charges | $ 12,000 | ||||
Aggregate carrying value of assets | 22,000 | ||||
Estimated fair value of assets | $ 10,000 | ||||
AEA [Member] | |||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||||
Non-cash impairment charges | $ 32,000 | ||||
[1] | Our marine vessels are included in the area in which they were located as of reporting date. |
Stockholder's Equity - Changes
Stockholder's Equity - Changes in the Number of Shares Outstanding and Treasury Shares Held by the Company (Details) - shares | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Apr. 30, 2017 | Dec. 31, 2016 | |
Shares Outstanding [Abstract] | |||||
Beginning balance | 241,388,277 | 239,016,924 | |||
Common stock issued | 43,634,232 | 3,234,994 | |||
Purchase of common stock | (1,013,749) | (912,344) | |||
Ending balance | 284,008,760 | 241,339,574 | |||
Shares Held as Treasury Shares [Abstract] | |||||
Beginning balance | 8,302,004 | 7,824,204 | |||
Purchase of common stock | 1,013,749 | 912,344 | |||
Retirement of common stock | (821,586) | (447,173) | |||
Ending balance | 8,494,167 | 8,289,375 | |||
Common stock, shares issued | 292,502,927 | 249,628,949 | 40,800,000 | 40,800,000 | 249,690,281 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2010 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Common stock issued to holders of TEU | 292,502,927 | 40,800,000 | 249,628,949 | 292,502,927 | 249,628,949 | 40,800,000 | 249,690,281 | ||
Settlement rate per tangible equity unit | $ 3.5496 | $ 3.5496 | |||||||
Decrease in noncontrolling interest | $ (6,775) | ||||||||
Accounts payable | 338,906 | $ (110,196) | |||||||
Acquisition of NCI | (6,775) | ||||||||
Other non-operating expense, net | $ 803 | $ 5,237 | $ (1,074) | (1,005) | |||||
Oceanteam ASA [Member] | |||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Purchase of vessel, cash consideration | $ 11,000 | ||||||||
Note payable assumed | 5,000 | ||||||||
Decrease in noncontrolling interest | 9,000 | ||||||||
Accounts payable | 5,000 | ||||||||
Capital-in-excess | 2,000 | ||||||||
Acquisition of NCI | $ 9,000 | ||||||||
THHE Fabricators Sdn. Bhd [Member] | |||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Percentage of interest acquired in subsidiary | 30.00% | ||||||||
Decrease in investments in unconsolidated affiliates | 12,000 | ||||||||
Other non-operating expense, net | $ 5,000 | ||||||||
Berlian McDermott Sdn, Bhd, [Member] | |||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Percentage of interest acquired in subsidiary | 30.00% | 30.00% | |||||||
Decrease in noncontrolling interest | $ 18,000 | ||||||||
Fair value of asset surrendered | $ 17,000 | ||||||||
Acquisition of NCI | $ 18,000 | ||||||||
Berlian McDermott Sdn, Bhd, [Member] | TH Heavy Engineering Berhad [Member] | |||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Noncontrolling interest acquired by noncontrolling owners | 30.00% | ||||||||
North Ocean 105 [Member] | |||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||||
Percentage of interest acquired in subsidiary | 75.00% | ||||||||
Ownership percentage in Oceanteam ASA's | 25.00% |
Stockholder's Equity - Componen
Stockholder's Equity - Components of Accumulated Other Comprehensive Income (Loss) included in Stockholders' Equity (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Stockholders Equity Note [Abstract] | ||
Foreign currency translation adjustments ("CTA") | $ (48,791) | $ (42,082) |
Net unrealized gain on investments | 346 | 269 |
Net unrealized loss on derivative financial instruments | (5,159) | (25,082) |
Accumulated other comprehensive loss | $ (53,604) | $ (66,895) |
Stockholder's Equity - Compon57
Stockholder's Equity - Components of Accumulated Other Comprehensive Income (Loss) Reclassified (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | $ 1,595,468 | ||||
Acquisition of NCI | (6,775) | ||||
Other comprehensive income (loss), net of tax | $ 2,587 | $ (1,468) | 13,273 | $ 26,591 | |
Ending Balance | 1,759,925 | 1,759,925 | |||
Foreign Currency Translation Adjustments [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (42,074) | (37,295) | (42,082) | (29,925) | |
Other comprehensive income (loss) before reclassification | (784) | (5,031) | (776) | (12,401) | |
Amounts reclassified from AOCI | [1] | (5,933) | (5,933) | ||
Other comprehensive income (loss), net of tax | (6,717) | (5,031) | (6,709) | (12,401) | |
Ending Balance | (48,791) | (42,326) | (48,791) | (42,326) | |
Unrealized Holding Gain (Loss) on Investments [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | 308 | 264 | 269 | 247 | |
Other comprehensive income (loss) before reclassification | 38 | (3) | 77 | 14 | |
Other comprehensive income (loss), net of tax | 38 | (3) | 77 | 14 | |
Ending Balance | 346 | 261 | 346 | 261 | |
Gain (Loss) on Derivative [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | [2] | (14,425) | (28,844) | (25,082) | (64,277) |
Other comprehensive income (loss) before reclassification | [2] | 4,971 | 4,228 | 15,183 | 14,458 |
Acquisition of NCI | [2] | 2,284 | |||
Amounts reclassified from AOCI | [2],[3] | 4,295 | (651) | 2,456 | 24,552 |
Other comprehensive income (loss), net of tax | [2] | 9,266 | 3,577 | 19,923 | 39,010 |
Ending Balance | [2] | (5,159) | (25,267) | (5,159) | (25,267) |
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Beginning Balance | (56,191) | (65,875) | (66,895) | (93,955) | |
Other comprehensive income (loss) before reclassification | 4,225 | (806) | 14,484 | 2,071 | |
Acquisition of NCI | 2,284 | ||||
Amounts reclassified from AOCI | (1,638) | (651) | (3,477) | 24,552 | |
Other comprehensive income (loss), net of tax | 2,587 | (1,457) | 13,291 | 26,623 | |
Ending Balance | $ (53,604) | $ (67,332) | $ (53,604) | $ (67,332) | |
[1] | Release of CTA to Other non-operating income (expense), net, on liquidation of certain foreign entities | ||||
[2] | Refer to Note 11, Derivative Financial Instruments, for additional details | ||||
[3] | Reclassified to Cost of operations and Other non-operating income (expense), net |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Earnings Per Share [Abstract] | |||||
Net income attributable to McDermott International, Inc. | $ 94,701 | $ 16,108 | $ 153,030 | $ 34,593 | |
Weighted average common stock (basic) | 283,991,161 | 240,899,888 | 269,720,153 | 240,093,169 | |
Effect of dilutive securities: | |||||
Tangible equity units | [1] | 40,896,300 | 12,827,388 | 40,896,300 | |
Stock options, restricted stock and restricted stock units | 1,783,460 | 2,111,165 | 2,312,169 | 2,143,451 | |
Potential dilutive common stock | 285,774,621 | 283,907,353 | 284,859,710 | 283,132,920 | |
Net income per share attributable to McDermott International, Inc. | |||||
Basic: | $ 0.33 | $ 0.07 | $ 0.57 | $ 0.14 | |
Diluted: | $ 0.33 | $ 0.06 | $ 0.54 | $ 0.12 | |
[1] | Represents weighted average TEUs outstanding for the nine months periods ended September 30, 2017. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from earnings per share computation, shares | 2 | 2 | 2 | 2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2013 |
Commitments And Contingencies Disclosure [Line Items] | ||
Asset retirement obligations | $ 0 | |
Liquidated damages exposure | 30,000,000 | |
Liabilities of liquidated damages | 0 | |
Morgan City fabrication facility [Member] | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Potential environmental liabilities | $ 6,000,000 | |
Environmental loss contingencies, incurred | $ 4,000,000 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Segment Reporting - Information
Segment Reporting - Information about Operations in Different Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | $ 958,531 | $ 558,543 | $ 2,266,635 | $ 1,994,202 |
Operating income (loss) | 127,072 | 43,055 | 270,256 | 136,036 | |
Interest expense, net | (11,976) | (17,431) | (50,886) | (41,324) | |
Other non-operating income (expense), net | 803 | 5,237 | (1,074) | (1,005) | |
Income before provision for income taxes | 115,899 | 30,861 | 218,296 | 93,707 | |
Capital expenditures | [2] | 16,184 | 26,719 | 97,106 | 197,393 |
Depreciation and amortization | 28,347 | 27,826 | 78,032 | 76,755 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | 180,137 | 90,617 | 413,544 | 301,614 | |
Operating Segments [Member] | AEA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | 61,002 | 69,699 | 130,697 | 219,134 |
Operating income (loss) | (7,171) | 2,871 | (18,290) | 32,831 | |
Capital expenditures | [2] | 5,369 | 269 | 20,694 | 3,795 |
Depreciation and amortization | 5,300 | 8,992 | 16,708 | 28,717 | |
Operating Segments [Member] | MEA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | 736,291 | 334,731 | 1,602,955 | 922,820 |
Operating income (loss) | 163,626 | 60,365 | 345,483 | 159,701 | |
Capital expenditures | [2] | 7,858 | 8,318 | 18,489 | 13,021 |
Depreciation and amortization | 13,224 | 7,724 | 34,889 | 19,632 | |
Operating Segments [Member] | ASA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | 161,238 | 154,113 | 532,983 | 852,248 |
Operating income (loss) | 23,682 | 27,381 | 86,351 | 109,082 | |
Capital expenditures | [2] | 1,812 | 16,603 | 7,548 | 178,178 |
Depreciation and amortization | 7,966 | 8,970 | 20,913 | 21,877 | |
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | [3] | (53,065) | (47,562) | (143,288) | (165,578) |
Capital expenditures | [2] | 1,145 | 1,529 | 50,375 | 2,399 |
Depreciation and amortization | $ 1,857 | $ 2,140 | $ 5,522 | $ 6,529 | |
[1] | Intersegment transactions included in revenues were not significant for all the periods presented. | ||||
[2] | Corporate and Other capital expenditures in the first nine months of 2017 include the purchase of the Amazon, a pipelay and construction vessel. Following the purchase we sold this vessel to an unrelated third party and simultaneously entered into an 11-year bareboat charter agreement, see Note 8, Sale Leaseback. | ||||
[3] | Corporate and Other operating results: in 2017 include a $3 million gain on sale of assets. in 2016 include: o $44 million of impairment charges, see Note 12, Fair Value Measurements, for further discussion; and o $11 million of restructuring expenses, see Note 4, Restructuring, for further discussion. |
Segment Reporting - Informati63
Segment Reporting - Information about Operations in Different Segments (Parenthetical) (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jan. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Restructuring expenses | $ 1,836,000 | $ 0 | $ 10,687,000 | |
Amazon Pipelay and Construction Vessel [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Bareboat charter agreement, term | 11 years | 11 years | ||
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Gain on sale of assets | $ 3,000,000 | |||
Asset Impairment Charges | 44,000,000 | |||
Restructuring expenses | $ 11,000,000 |
Segment Reporting - Informati64
Segment Reporting - Information about Segment Assets by Country (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Total assets | [1] | $ 3,461,435 | $ 3,222,230 |
Operating Segments [Member] | AEA [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | [1] | 695,751 | 727,328 |
Operating Segments [Member] | MEA [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | [1] | 1,632,064 | 907,936 |
Operating Segments [Member] | ASA [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | [1] | 671,864 | 976,470 |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | [1] | $ 461,756 | $ 610,496 |
[1] | Our marine vessels are included in the area in which they were located as of reporting date. |