Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MDRIQ | |
Entity Registrant Name | McDERMOTT INTERNATIONAL, INC. | |
Entity Central Index Key | 0000708819 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-08430 | |
Entity Tax Identification Number | 72-0593134 | |
Entity Address, Address Line One | 757 N. Eldridge Parkway | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77079 | |
City Area Code | (281) | |
Local Phone Number | 870-5000 | |
Entity Common Stock, Shares Outstanding | 193,081,224 | |
Entity Incorporation, State or Country Code | R1 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock, par value $1.00 per share |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,906 | $ 2,063 |
Costs and Expenses: | ||
Cost of operations | 1,853 | 1,928 |
Project intangibles and inventory-related amortization | 3 | 5 |
Total cost of operations | 1,856 | 1,933 |
Selling, general and administrative expenses | 62 | 68 |
Research and development expenses | 2 | 2 |
Transaction costs | 35 | 4 |
Restructuring and integration costs | 14 | 69 |
Other intangibles amortization | 8 | 11 |
Property, plant and equipment impairment | 884 | |
Goodwill impairment | 91 | |
Intangible assets impairment | 3 | |
Total expenses | 2,955 | 2,087 |
Loss from investments in unconsolidated affiliates | (2) | |
Investment in unconsolidated affiliates-related amortization | (1) | |
Operating loss from continuing operations | (1,051) | (25) |
Other expense: | ||
Interest expense, net | (56) | (92) |
Reorganization items, net | (246) | |
Other non-operating income, net | 3 | 1 |
Total other expense, net | (299) | (91) |
Loss from continuing operations before provision for income taxes | (1,350) | (116) |
Income tax expense (benefit) | 8 | (21) |
Net loss from continuing operations | (1,358) | (95) |
Net (loss) income from discontinued operations | (14) | 38 |
Net loss | (1,372) | (57) |
Less: Net income (loss) attributable to noncontrolling interests | 6 | (1) |
Net loss attributable to McDermott | (1,378) | (56) |
Dividends on redeemable preferred stock | (3) | (10) |
Accretion of redeemable preferred stock | (1) | (4) |
Net loss attributable to common stockholders | $ (1,382) | $ (70) |
Continuing operations | ||
Basic | $ (7.09) | $ (0.60) |
Diluted | (7.09) | (0.60) |
Discontinued operations | ||
Basic | (0.07) | 0.21 |
Diluted | $ (0.07) | $ 0.21 |
Shares used in the computation of net (loss) income per share | ||
Basic | 193 | 181 |
Diluted | 193 | 181 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (1,372) | $ (57) |
Other comprehensive loss from continuing operations, net of tax: | ||
Loss on derivatives | (42) | (19) |
Foreign currency translation | (28) | (22) |
Other comprehensive loss from discontinued operations, net of tax: | ||
Foreign currency translation | (4) | (17) |
Total comprehensive loss | (1,446) | (115) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 6 | (1) |
Comprehensive loss attributable to McDermott | $ (1,452) | $ (114) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Current assets: | |||
Cash and cash equivalents ($239 and $213 related to variable interest entities ("VIEs")) | $ 1,177 | $ 790 | |
Restricted cash and cash equivalents | 397 | 393 | |
Accounts receivable—trade, net ($92 and $102 related to VIEs) | 832 | 942 | |
Accounts receivable—other ($29 and $32 related to VIEs) | 186 | 178 | |
Contracts in progress ($246 and $195 related to VIEs) | 979 | 703 | |
Project-related intangible assets, net | 27 | 33 | |
Current assets of discontinued operations held for sale | 2,451 | 306 | |
Other current assets ($25 and $25 related to VIEs) | 192 | 210 | |
Total current assets | 6,241 | 3,555 | |
Property, plant and equipment, net | 1,224 | 2,066 | |
Operating lease right-of-use assets | 330 | 349 | |
Accounts receivable—long-term retainages | 32 | 24 | |
Investments in unconsolidated affiliates | 74 | 73 | |
Goodwill | 56 | 147 | [1] |
Other intangibles, net | 168 | 179 | |
Non-current assets of discontinued operations held for sale | 2,173 | ||
Other non-current assets | 175 | 171 | |
Total assets | 8,300 | 8,737 | |
Current liabilities: | |||
Debt | 2,038 | 5,107 | |
Lease obligations | 138 | 140 | |
Accounts payable ($149 and $182 related to VIEs) | 796 | 1,083 | |
Advance billings on contracts ($504 and $542 related to VIEs) | 1,177 | 1,191 | |
Project-related intangible liabilities, net | 8 | 10 | |
Current liabilities of discontinued operations held for sale | 426 | 383 | |
Accrued liabilities ($64 and $69 related to VIEs) | 1,302 | 1,530 | |
Total current liabilities | 5,885 | 9,444 | |
Long-term lease obligations | 279 | 294 | |
Deferred income taxes | 55 | 59 | |
Non-current liabilities of discontinued operations held for sale | 76 | ||
Other non-current liabilities | 804 | 717 | |
Total liabilities not subject to compromise | 7,023 | 10,590 | |
Liabilities subject to compromise | 4,578 | ||
Mezzanine equity: | |||
Redeemable preferred stock | 294 | 290 | |
Stockholders' equity: | |||
Common stock, par value $1.00 per share, authorized 255 shares; issued 196 shares | 196 | 196 | |
Capital in excess of par value | 3,557 | 3,553 | |
Accumulated deficit | (7,082) | (5,693) | |
Accumulated other comprehensive loss | (177) | (103) | |
Treasury stock, at cost: 3 and 3 shares, respectively | (96) | (96) | |
Total McDermott Stockholders' Equity | (3,602) | (2,143) | |
Noncontrolling interest | 7 | ||
Total stockholders' equity | (3,595) | (2,143) | |
Total liabilities and stockholders' equity | $ 8,300 | $ 8,737 | |
[1] | As of January 1, 2020, we had approximately $3.5 billion of cumulative impairment charges recorded in conjunction with our impairment assessments performed during 2019 and 2018, as previously described in the 2019 Form 10-K |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Cash and cash equivalents | $ 1,177 | $ 790 | |
Accounts receivable—trade, net | 832 | 942 | |
Accounts receivable—other | 186 | 178 | |
Contracts in progress | 979 | 703 | |
Other current assets | 192 | 210 | |
Accounts payable | 796 | 1,083 | |
Advance billings on contracts | 1,177 | 1,191 | |
Accrued liabilities, current | $ 1,302 | $ 1,530 | |
Common stock, par value | $ 1 | $ 1 | |
Common stock, shares authorized | 255,000,000 | 255,000,000 | |
Common stock, shares issued | 196,000,000 | [1] | 196,000,000 |
Treasury stock, shares | 3,000,000 | 3,000,000 | |
Variable Interest Entities ("VIEs") [Member] | |||
Cash and cash equivalents | $ 239 | $ 213 | |
Accounts receivable—trade, net | 92 | 102 | |
Accounts receivable—other | 29 | 32 | |
Contracts in progress | 246 | 195 | |
Other current assets | 25 | 25 | |
Accounts payable | 149 | 182 | |
Advance billings on contracts | 504 | 542 | |
Accrued liabilities, current | $ 64 | $ 69 | |
[1] |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Cash flows from operating activities: | |||
Net loss | $ (1,372) | $ (57) | |
Adjustments to reconcile net loss to cash flows from operating activities: | |||
Property, plant and equipment impairment | 884 | ||
Goodwill impairment | 91 | ||
Depreciation and amortization | 60 | 76 | |
Debt issuance cost amortization | 8 | 11 | |
Debt discount and make-whole accretion | 27 | ||
Reorganization items, net - Claims valuation adjustments | 96 | ||
Reorganization items, net - DIP Credit Facility fees | 87 | ||
Intangible assets impairment | 3 | ||
Stock-based compensation charges | 4 | 6 | |
Other non-cash items | 1 | ||
Changes in operating assets and liabilities, net of effects of businesses acquired (disposed): | |||
Accounts receivable | 92 | (87) | |
Contracts in progress, net of advance billings on contracts | (307) | (638) | |
Accounts payable | (293) | 357 | |
Other current and non-current assets | (9) | 8 | |
Other current and non-current liabilities | (67) | 80 | |
Total cash used in operating activities | (695) | (244) | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | [1] | (25) | (18) |
Advances related to proportionately consolidated consortiums | (57) | (114) | |
Investments in unconsolidated affiliates | (3) | (1) | |
Total cash used in investing activities | (85) | (133) | |
Cash flows from financing activities: | |||
DIP Term Facility borrowings | 1,200 | ||
Revolving credit facility borrowings, net | 178 | ||
Repayment of debt and finance lease obligations | (3) | (8) | |
Advances related to equity method joint ventures and proportionately consolidated consortiums | 69 | 116 | |
DIP Credit Facility fees | (87) | ||
Repurchase of common stock | (4) | ||
Distributions to joint venture members | (2) | (5) | |
Total cash provided by financing activities | 1,177 | 277 | |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (3) | (6) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 394 | (106) | |
Cash, cash equivalents and restricted cash at beginning of period | 1,193 | 845 | |
Cash, cash equivalents and restricted cash at end of period | 1,587 | 739 | |
Cash, cash equivalents and restricted cash at end of period, discontinued operations | 13 | 134 | |
Cash, cash equivalents and restricted cash at end of period, continuing operations | $ 1,574 | $ 605 | |
[1] |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock Par Value [Member] | Capital in Excess of Par Value [Member] | Retained Earnings/(Accumulated Deficit) [Member] | Accumulated Other Comprehensive Loss ("AOCI") [Member] | Treasury Stock [Member] | Stockholder's Equity [Member] | Noncontrolling Interest ("NCI") [Member] |
Beginning Balance at Dec. 31, 2018 | $ 823 | $ 183 | $ 3,539 | $ (2,719) | $ (107) | $ (96) | $ 800 | $ 23 |
Net loss | (57) | (56) | (56) | (1) | ||||
Other comprehensive loss, net of tax | (58) | (58) | (58) | |||||
Common stock issued | 2 | (2) | ||||||
Stock-based compensation charges | 6 | 6 | 6 | |||||
Accretion and dividends on redeemable preferred stock | (14) | (14) | (14) | |||||
Conversion of noncontrolling interest | (24) | 2 | 2 | (26) | ||||
Purchase of treasury shares | (4) | (4) | (4) | |||||
Retirement of common stock | (1) | (3) | 4 | |||||
Other | 3 | 3 | 3 | |||||
Ending Balance at Mar. 31, 2019 | 675 | 184 | 3,545 | (2,789) | (165) | (96) | 679 | (4) |
Beginning Balance at Dec. 31, 2019 | (2,143) | 196 | 3,553 | (5,693) | (103) | (96) | (2,143) | |
Adoption of ASU 2016-13 at Dec. 31, 2019 | (7) | (7) | (7) | |||||
Beginning Balance at Dec. 31, 2019 | (2,150) | 196 | 3,553 | (5,700) | (103) | (96) | (2,150) | |
Net loss | (1,372) | (1,378) | (1,378) | 6 | ||||
Other comprehensive loss, net of tax | (74) | (74) | (74) | |||||
Stock-based compensation charges | 4 | 4 | 4 | |||||
Accretion and dividends on redeemable preferred stock | (4) | (4) | (4) | |||||
Other | 1 | 1 | ||||||
Ending Balance at Mar. 31, 2020 | $ (3,595) | $ 196 | $ 3,557 | $ (7,082) | $ (177) | $ (96) | $ (3,602) | $ 7 |
NATURE OF OPERATIONS AND ORGANI
NATURE OF OPERATIONS AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND ORGANIZATION | NOTE 1—NATURE OF OPERATIONS AND ORGANIZATION Nature of Operations McDermott International, Inc. (“McDermott,” “we” or “us”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a fully integrated provider of engineering, procurement, construction and installation (“EPCI”) solutions to the energy industry. We design and build end-to-end infrastructure solutions to transport and transform oil and gas into a variety of products. Our proprietary technologies, integrated expertise and comprehensive solutions are utilized for offshore, subsea, power, liquefied natural gas (“LNG”) and downstream energy projects around the world. Our customers include national, major integrated and other oil and gas companies as well as producers of petrochemicals and electric power, and we operate in most major energy-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. Organization On May 10, 2018, we completed our business combination with Chicago Bridge & Iron Company N.V. (“CB&I”) through a series of transactions (the “Combination”). Following completion of the Combination, during the second quarter of 2018, we reorganized our operations into five business segments, which represented our reporting segments and were: North, Central and South America (“NCSA”); Europe, Africa, Russia and Caspian (“EARC”); the Middle East and North Africa (“MENA”); Asia Pacific (“APAC”); and Technology. In 2019, we performed a review of our business portfolio, which included businesses acquired in the Combination. Our review sought to determine if any portions of our business were non-core for purposes of our vertically integrated offering model. This review initially identified our pipe fabrication and industrial storage tank businesses as non-core. W e completed the sale of , a portion of the pipe fabrication business, terminated the previously announced As a result of our decision to retain this business, starting January 1, 2020, we changed the structure of our internal organization and formed a new reporting segment for our industrial storage tank business (“Storage Solutions”). We now report financial results under five Basis of Presentation Discontinued Operations Previously reported financial information has been adjusted to reflect the above changes. See Note 22, Segment Reporting, for further discussion. Recent Developments Affecting Industry Conditions and Our Business On March 11, 2020, the World Health Organization declared the ongoing coronavirus (COVID-19) outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has reached more than 200 countries We have experienced some resulting disruptions to our business operations, as the pandemic has continued to spread through most of our markets, including negative impact on our ongoing projects and the expected detrimental impacts on awards of new projects by our customers. We cannot predict the full impact that COVID-19 or the significant disruption and volatility currently being experienced in the oil and natural gas markets will have on numerous uncertainties. The ultimate impacts workforce availability, |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 2—BASIS OF PRESENTATION Basis of Presentation The accompanying Condensed Consolidated Financial Statements (the “Financial Statements”) are unaudited and have been prepared 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 and are not necessarily indicative of results of operations for a full year. Therefore, they should be read in conjunction with the Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). The Financial Statements reflect all wholly owned subsidiaries and those entities we are required to consolidate. See the “Joint Venture and Consortium Arrangements” section of Note 2, Basis of Presentation and Significant Accounting Policies On January 21, 2020 (the “Petition Date”), McDermott and certain of its subsidiaries (collectively, the “Debtors”): (1) entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with certain of their lenders, letter of credit issuers and holders of the 10.625% senior notes due 2024 (the “Senior Notes”) issued by certain of the Debtors and guaranteed by McDermott and certain of the other Debtors (such lenders, letter of credit issuers and holders of the Senior Notes are referred to as the “Consenting Parties”); and (2) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to pursue a joint prepackaged Chapter 11 Plan of Reorganization of the Debtors (the “Plan of Reorganization”). The Chapter 11 cases are being jointly administered under the caption In re McDermott International, Inc. ASC 852 requires that the financial statements for periods subsequent to the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “Reorganization items, net” on our Condensed Consolidated Statement of Operations (“Statement of Operations”) for the quarter ended March 31, 2020. In addition, prepetition unsecured or undersecured obligations that may be impacted by the bankruptcy reorganization process have been classified as “Liabilities subject to compromise” on our Condensed Consolidated Balance Sheet (“Balance Sheet”) as of March 31, 2020. These liabilities are reported at the amounts allowed or expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. In accordance with ASC 852, we anticipate we will be required to adopt fresh-start accounting upon our emergence from the Chapter 11 proceedings, becoming a new entity for financial reporting purposes (“successor”). In order to adopt fresh-start accounting, we will have to meet the following conditions: (1) holders of existing shares of the predecessor entity immediately before the effective date of the consummation of the Plan of Reorganization (the “Effective Date”) received, collectively, less than 50 percent of the voting shares of the successor entity and (2) the reorganization value of the successor is less than its postpetition liabilities and estimated allowed claims immediately before the Effective Date. As of March 31, 2020, we expect that these conditions will be met. See Note 3, Reorganization, Going Concern The Financial Statements have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. While operating as debtors-in-possession under Chapter 11, we may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the Financial Statements. Further, the Plan of Reorganization and the adoption of the fresh-start accounting could materially change the amounts and classifications of assets and liabilities reported in these Financial Statements. The accompanying Financial Statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern. As a result of our financial condition, the defaults under our debt agreements and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists regarding our ability to continue as a going concern. We believe that, once we complete the Lummus Technology sale and successfully implement the Plan of Reorganization, among other factors, the currently existing substantial doubt regarding our ability to continue as a going concern would be alleviated. Discontinued Operations The Plan of Reorganization requires that, on or prior to the Effective Date, the Debtors will complete the Lummus Technology sale (primarily represented by our Technology reporting segment). Under the terms of the Share and Asset Purchase Agreement for the sale transaction (the “SAPA”), the buyer party thereto agreed, subject to certain conditions, to acquire the Lummus Technology business for a purchase price of $2.725 billion, subject to certain adjustments. On February 24, 2020, the Bankruptcy Court approved the selection of the buyer and the contractual protections provided to the buyer under the SAPA, as well as the bidding procedures for the ultimate sale process. In connection with the entry of the Confirmation Order, the Bankruptcy Court approved the Lummus Technology sale. The sale is expected to be completed on or prior to the Effective Date. As of March 31, 2020, pursuant to the SAPA, the buyer has deposited $200 million in a third-party escrow account. We considered the operations of the Technology segment to be a discontinued operation in the first quarter of 2020, as the anticipated sale represents a strategic shift and will have a material effect on our operations and financial results. Operating results of the Technology reporting segment have been classified as a discontinued operation within the Statements of Operations for the three months ended March 31, 2020 and 2019. Further, the assets and liabilities of the Technology segment have been classified as assets and liabilities of discontinued operations within our March 31, 2020 and December 31, 2019 Balance Sheets, with all balances reported as current on our March 31, 2020 Balance Sheet. Cash flows of the Technology segment are not reported separately within our Condensed Consolidated Statement of Cash Flows (“Statement of Cash Flows”). Unless otherwise noted, the footnotes to the Financial Statements relate to our continuing operations. See Note 4, Discontinued Operations Use of Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We believe the most significant estimates and judgments are associated with: • revenue recognition for our contracts, including estimating costs to complete each contract and the recognition of incentive fees and unapproved change orders and claims; • assessment of our ability to continue as a going concern; • estimation of the allowed claims associated with liabilities subject to compromise; • classification of all of our long-term debt obligations, including finance lease obligations, as current; • fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, goodwill and other intangible assets; • valuation of deferred tax assets and financial instruments; • the determination of liabilities related to loss contingencies, self-insurance programs and income taxes; • the determination of pension-related obligations; and • consolidation determinations with respect to our joint venture and consortium arrangements. Actual amounts may differ from those included in the Financial Statements if the underlying estimates and assumptions change in the future. Significant Accounting Policies See Note 2, Basis of Presentation and Significant Accounting Policies, Reclassifications Certain prior-year balances have been reclassified to conform to the current year’s presentation. Recently Adopted Accounting Guidance Financial Instruments —In June 2016, the FASB issued ASU 2016-13, . This ASU requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Effective January 1, 2020, we adopted ASU 2016-13, which amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial assets and off-balance-sheet credit exposures. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. Under the modified retrospective transition method, we recorded a cumulative effect adjustment of $7 million to opening Accumulated Deficit, primarily related to our Accounts receivable – trade and Contracts in Progress assets. The associated income tax impact was not material. The adoption of this ASU did not have a material impact on our Statement of Operations or Statement of Cash Flows for the three months ended March 31, 2020. See Note 7, — , for more information on our presentation of credit losses Consolidation —In October 2018, the FASB issued ASU No. 2018-17, . This ASU amends the guidance for determining whether a decision-making fee is a variable interest, which requires companies to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety. The ASU is effective for annual and interim periods beginning after December 15, 2019. We adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Financial Statements and related disclosures Collaborative Arrangements —In November 2018, the FASB issued ASU No. 2018-18, . This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In addition, unit-of-account guidance in Topic 808 was aligned with the guidance in Topic 606 (that is, a distinct good or service) when assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. This ASU is effective for interim and annual periods beginning after December 15, 2019. We adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Financial Statements and related disclosures. Accounting Guidance Issued but Not Adopted as of March 31, 2020 Income Taxes —In December 2019, the FASB issued ASU 2019-12, (“ASU 2019-12”). This ASU simplifies the accounting for income taxes by removing exceptions: • to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); • to the requirement to recognize a deferred tax liability for equity-method investments when a foreign subsidiary becomes an equity-method investment; • to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity - method investm ent becomes a subsidiary; and • to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, ASU 2019-12 does not require that an entity allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; however, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the applicable taxing authority. The standard does require that an entity: • recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; • evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; and • reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are evaluating the impact of the new guidance on our future disclosures. Defined Benefit Pension Plans —In August 2018, the FASB issued ASU No. 2018-14, — — — . This ASU eliminates, modifies and adds disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are evaluating the impact of the new guidance on our future disclosures. |
REORGANIZATION
REORGANIZATION | 3 Months Ended |
Mar. 31, 2020 | |
Reorganizations [Abstract] | |
Reorganization | NOTE 3—REORGANIZATION Restructuring Support Agreement and Plan of Reorganization The key terms of the RSA include the following: • access to an aggregate $2.81 billion of debtor-in-possession financing, described below; • equitization of funded debt held by senior secured term lenders for 94% of the equity of the reorganized McDermott; • commitments from certain of our lenders to provide letter of credit capacity during the Chapter 11 proceedings and upon emergence from the Chapter 11 proceedings in an exit facility; • sale of the Lummus Technology business for approximately $2.725 billion (subject to certain adjustments), the proceeds of which will fund a minimum cash balance of $820 million for the Debtors’ go-forward business and the repayment of the funded obligations under the DIP Credit Agreement, as defined and described below; • recovery to the holders of the Senior Notes of 6% of the equity of the reorganized McDermott (subject to certain dilution adjustments such as the New Warrants (as defined in the RSA) and the Management Incentive Plan (as defined in the RSA)), Warrants and the right to participate in an equity rights offering; • reinstatement and assumption of all unsecured bi-lateral letter of credit facility obligations and surety obligations; • repayment in full or reinstatement of all unsecured trade claims; • assumption of all project-related executory contracts, with limited amendments; • payment in full of all administrative and priority claims; and • cancellation of all existing preferred and common equity interests. The Debtors filed the Bankruptcy Petitions and the initial Plan of Reorganization on January 21, 2020 to implement the key terms of the RSA. On January 22, 2020, we submitted our amended Plan of Reorganization, and on January 30, 2020, we served a combined notice, which contained the RSA, a summary of the Plan of Reorganization, and information regarding key dates, to all known parties in interest, which informed recipients of (1) the commencement of Chapter 11 proceedings and (2) the Debtors’ intention to request a combined hearing to consider approval of the disclosure statement and confirmation of the Plan of Reorganization. On February 29, 2020, we filed a supplement to the amended Plan of Reorganization (the “Plan Supplement”). The Plan Supplement included, among other things, a post-emergence governance term sheet, an assumed executory contract and unexpired lease list, a schedule of retained causes of action, and an exit facility term sheet. On March 11, 2020, we filed the second amended joint prepackaged Plan of Reorganization and an amended Plan Supplement, which included drafts of the amended assumed executory contract and unexpired lease list and an amended schedule of retained causes of action. On March 12, 2020, we filed a second amended Plan Supplement, which included drafts of an amended governance term sheet, a management incentive plan term sheet, a restructuring transactions memorandum, and a form of warrant agreement for the new Warrants. On March 12, 2020, the Bankruptcy Court issued a confirmation order and, on March 14, 2020, issued an amended order approving the Debtors’ disclosure statement and approving the second amended joint prepackaged Plan of Reorganization. While the Debtors received their binding court confirmation order, they will not exit from the Chapter 11 proceedings until they meet all of the conditions precedent to emergence from the Chapter 11 proceedings as described in the Plan of Reorganization. The remaining conditions to emergence from the Chapter 11 proceedings are summarized as follows: • the Debtors shall have achieved the target threshold of projected gross profit, letter of credit relief and project costs savings through employment of specified risk mitigation strategies (as defined in the Plan of Reorganization); • the Debtors shall have obtained all authorizations, consents, regulatory approvals, rulings or documents that are necessary to implement and effectuate the Plan of Reorganization; • the final version of each of the Plan of Reorganization, the Definitive Documents (as defined in the Plan of Reorganization), and all documents contained in any supplement to the Plan of Reorganization shall not be modified in any manner inconsistent with the RSA; • the definitive documents in respect of the Lloyds LC Exit Facility (as defined in the Plan of Reorganization) and the Exit Facility Documents (as defined in the Plan of Reorganization) shall have been duly executed and delivered by all of the entities that are parties thereto and all conditions precedent (other than any conditions related to the occurrence of the Effective Date) to the effectiveness of the Exit Facilities (as defined below) shall have been satisfied or duly waived in writing in accordance with the terms of each of the Exit Facilities and the closing of each of the Exit Facilities and the Lloyds LC Exit Facility shall have occurred; • the final order approving the DIP Credit Facility (as defined in the Plan of Reorganization) shall remain in full force and effect and no event of default shall have occurred and be continuing thereunder; • no more than $50 million principal amount of Prepetition Secured Letters of Credit, the Lloyds Letters of Credit (as defined in the Plan of Reorganization) or the DIP Letters of Credit (other than cash collateralized letters of credit) shall have been drawn and unreimbursed in full in cash; • Reorganized McDermott shall have a minimum of $820 million of cash on its balance sheet (which amount shall not include cash held by the Debtors’ joint-venture affiliates or cash collateral securing the Cash Secured Letters of Credit, the Lloyds Letters of Credit and the DIP Cash Secured Letters of Credit (as defined in the Plan of Reorganization)) assuming normal working capital; • all professional fees and expenses of retained professionals that require the Bankruptcy Court’s approval shall have been paid in full or amounts sufficient to pay such fees and expenses after the Effective Date shall have been placed in a professional fee escrow account pending the Bankruptcy Court’s approval of such fees and expenses; • the Lummus Technology sale shall have been consummated; • the Debtors’ shall have filed a Notice of Anticipated Effective Date at least five days in advance of the Effective Date; • to the extent invoiced in accordance with the terms of the Plan of Reorganization, the payment in cash in full of the Restructuring Expenses; and • the Debtors shall have implemented the Restructuring Transactions and all transactions contemplated in the Restructuring Term Sheet in a manner consistent with the RSA (and subject to, and in accordance with, the consent rights set forth therein), the Restructuring Term Sheet and the Plan of Reorganization. The confirmed Plan of Reorganization provides for, among other things, that the following holders of claims receive the following recovery on the Effective Date (unless such holder agrees to less favorable treatment): • holders of claims arising under the DIP Credit Agreement (as defined below) shall be paid in full, in cash, on the Effective Date, from the proceeds of the Lummus Technology sale or, to the extent not paid in full from the proceeds of the Lummus Technology sale: • holders of claims arising under the DIP Term Loans (as defined in the Plan of Reorganization) other than the Make-Whole Amount (as defined in the Plan of Reorganization) shall receive cash on hand and proceeds from the Exit Facilities; • holders of claims arising under the DIP Term Loans constituting the Make-Whole Amount shall receive their respective pro rata shares of the term loans arising under the Make-Whole Tranche (as defined in the Plan of Reorganization); and • holders of claims arising under the drawn DIP Letters of Credit (as defined in the Plan of Reorganization) that have not been reimbursed in full in cash as of the Effective Date shall receive payment in full in cash; • holders of DIP Cash Secured Letters of Credit (as defined in the Plan of Reorganization) shall receive participation in the Cash Secured LC Exit Facility (as defined below) in amounts equal to their respective DIP Cash Secured Letter of Credit Claims (as defined in the Plan of Reorganization; provided that any such cash collateral in the DIP Cash Secured LC Account (as defined in the DIP Credit Facility) shall collateralize the Cash Secured LC Exit Facility); • holders of claims arising under the DIP Letters of Credit (other than the DIP Cash Secured Letters of Credit) shall receive participation in the Super Senior Exit Facility (as defined below) in amounts equal to their respective DIP Letter of Credit Facility commitments; • holders of claims arising under the (1) 2021 LC Facility (as defined in the Plan of Reorganization), (2) the 2023 LC Facility (as defined in the Plan of Reorganization), (3) the Revolving Credit Facility (as defined in the Plan of Reorganization) and (4) the Lloyds’ LC Facility (as defined in the Plan of Reorganization) shall receive participation rights in the Roll-Off LC Exit Facility (as defined below) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization), depending upon the nature of such claims; • holders of claims arising under the Term Loan Facility and Credit Agreement Hedging Claims (as defined in the Plan of Reorganization), other than hedging obligations rolled into the DIP Facilities and the Exit Facilities, will receive pro rata shares of the Secured Creditor Funded Debt Distribution; • holders of claims arising under the Senior Notes will receive their pro rata shares of (a) 6% of the new common equity interests in the reorganized McDermott (the “New Common Stock”), plus additional shares of New Common Stock as a result of the Prepetition Funded Secured Claims Excess Cash Adjustment (as defined in the Plan of Reorganization), subject to dilution on account of the new Warrants and the Management Incentive Plan; and (b) the Warrants; • holders of general unsecured claims shall either (1) have their claims reinstated or (2) be paid in full in cash; • each existing equity interest in any of the Debtors other than McDermott shall be reinstated or cancelled, released and extinguished without any distribution at the Debtors’ election and with the consent of the Required Consenting Lenders (as defined in the Plan of Reorganization); and • each existing equity interest in McDermott will be cancelled, released and extinguished without any distribution. The RSA contains certain covenants on the part of the Debtors and the Consenting Parties, including that the Consenting Parties, among other things, (1) vote in favor of the Plan of Reorganization in the Chapter 11 Cases and (2) otherwise support and take all actions that are necessary and appropriate to facilitate the confirmation of the Plan of Reorganization and consummation of the Debtors’ restructuring in accordance with the RSA. The RSA further provides that the Consenting Parties shall have the right, but not the obligation, to terminate the RSA upon the occurrence of certain events, including the failure of the Debtors to achieve certain milestones. The RSA also contemplates that, on or prior to the Effective Date, we will complete the Lummus Technology sale (primarily represented by our Technology reporting segment, which is now reported as a discontinued operation). In order to pursue the satisfaction of that requirement, we entered into the SAPA with the buyer party thereto as a “stalking horse” bidder. On February 24, 2020, the Bankruptcy Court approved the selection of the stalking horse bidder and the contractual protections provided to that bidder, as well as the bidding procedures for the ultimate sale process. Under the terms of the SAPA, the stalking horse bidder agreed, absent any higher or otherwise better bid, to acquire the Lummus Technology business from us for a purchase price of $2.725 billion, subject to certain adjustments. If we had received any bids that were higher or otherwise better than the terms reflected in the SAPA, we were to conduct an auction for the Lummus Technology business. However, as we did not receive any qualified bid by the court-approved deadline, March 2, 2020, the auction was cancelled and we designated the stalking horse bid as the successful bid, thereby requiring the buyer to fund an additional deposit under the SAPA. The Lummus Technology sale pursuant to the SAPA was approved as part of the Confirmation Order. DIP Credit Agreement In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates provided the Debtors with superpriority debtor-in-possession financing pursuant to a new credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including: (1) up to $2,065 million under a term loan facility consisting of (a) a $550 million tranche made available on January 23, 2020, (b) a $650 million tranche made available upon entry of the Final DIP Order (as defined in the RSA) on February 26, 2020, (c) an $800 million tranche consisting of the principal amount of term loans outstanding under the New Term Facility under our Superpriority Credit Agreement (defined and described in Note 11, Debt $44 Debt See Note 11, Debt Exit Facilities In addition to the DIP Facilities, the RSA contemplates that the Debtors will (a) conduct a non-backstopped equity rights offering to holders of the Senior Notes (the “Rights Offering”) and (b) on the Effective Date, enter into new exit credit facilities (the “Exit Facilities”), consisting of: (1) a super senior exit facility comprised of a letter of credit facility in the amount of $743 million (the “Super Senior Exit Facility”); (2) a super senior term loan facility in the amount of any portion of the Make-Whole Amount (as defined in the RSA) outstanding and not repaid as of the Effective Date (the “Make-Whole Exit Facility”); (3) a senior secured letter of credit exit facility in an amount up to $1.326 billion for new letters of credit (the “Senior LC Exit Facility”); (4) a senior secured letter of credit exit facility reflecting existing letters of credit (the “Roll-Off LC Exit Facility” and, together with the Super Senior Exit Facility and the Senior LC Exit Facility, the “LC Exit Facilities”); (5) a senior secured term loan facility in the amount of $500 million of take-back debt (the “Term Loan Exit Facility”); and (6) a cash secured letter of credit exit facility in an amount up to $371 million (the “Cash Secured LC Exit Facility”). The aggregate amount of commitments under the LC Exit Facilities and the Cash Secured LC Exit Facility will be approximately $2.4 billion. Accordingly, consummation of the Plan of Reorganization will require that the Debtors meet all of the conditions to completion of the Exit Facilities. The foregoing descriptions of the RSA, the Plan of Reorganization, the DIP Facilities and the SAPA are not complete and are qualified in their entirety by reference to the full text of each of those documents, copies of which are filed as exhibits to the 2019 Form 10-K report. Rights Offering As required under the RSA, the Debtors were required to conduct the Rights Offering. Upon filing the Bankruptcy Petitions, the Rights Offering procedures and related materials were also filed. On February 7, 2020, we commenced the Rights Offering, which had an expiration date of February 19, 2020. However, as no subscriptions were made, no shares of the Reorganized Debtors were scheduled to be issued in connection with the Rights Offering. The costs associated with the offering were not material and were expensed, as no further benefit will be recognized. Employee Compensation and Benefit Programs Subject to the provisions of the Plan of Reorganization, all compensation and benefits programs will be treated as executory contracts under the Plan of Reorganization and deemed assumed on the Effective Date pursuant to the relevant provisions of the Bankruptcy Code, except for: (1) all employee equity or equity-based incentive plans, and any provisions set forth in the compensation and benefits program that provide for rights to acquire existing equity interests in any of the Debtors; (2) the change-in-control agreements entered into with current employees, unless otherwise determined by the Required Consenting Lenders prior to the Effective Date; (3) compensation and benefits programs that have been rejected pursuant to an order of a Bankruptcy Court; and (4) compensation and benefits programs that, as of the entry of the Confirmation Order, have been specifically waived by the beneficiaries of any employee benefit plan or contract. Any assumption of compensation and benefits programs pursuant to the terms described above will be deemed not to (1) trigger any applicable change-in-control, immediate vesting or termination rights (or any similar provisions) or (2) constitute an event of “Good Reason” (or a term of like import), in each case as a result of the consummation of the restructuring transactions as described in the Plan of Reorganization. No counterparty shall have rights under a compensation and benefits program assumed pursuant to the Plan of Reorganization other than those applicable immediately prior to such assumption. On the Effective Date, the Debtors shall enter into severance and change-in-control arrangements with senior executives in amounts and on terms and conditions to be agreed with and approved by the Required Consenting Lenders. Workers’ Compensation Programs As of the Effective Date, except as set forth in the Plan Supplement, the Debtors will continue to honor their obligations under: (a) applicable workers’ compensation laws; and (b) written contracts, agreements, agreements of indemnity, self-insured workers’ compensation bonds, policies, programs, and plans for workers’ compensation and workers’ compensation insurance. Executory contracts On February 29, 2020, March 11, 2020, and March 12, 2020 the Plan Supplement, Amended Plan Supplement, and Second Amended Plan Supplement, respectively, were filed with the Court. On March 17, 2020, we filed the third amended Plan Supplement (the “Third Amended Plan Supplement”), which included a second amended assumed executory contract and unexpired lease list. These filings included the listings for assumed and rejected executory contracts and unexpired leases. The listing of rejected executory contracts and leases included no executory contracts or leases. Therefore, no amount related to contract or lease obligations was subject to compromise. The foregoing descriptions of the RSA, the Plan of Reorganization, the DIP Credit Agreement, and the SAPA are not complete and are qualified in their entirety by reference to the full text of each of those documents, copies of which are filed as exhibits to the 2019 Form 10-K. Prepetition Charges Professional and other fees and expenses incurred prior to the Petition Date related to the Lummus Technology sale process and prepetition charges related to the preparation of the Chapter 11 reorganization are reflected in “Transaction Costs” in our Statements of Operations. Reorganization Items In accordance with ASC 852, any incremental expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the Chapter 11 Proceedings are recorded under reorganization items. In the Plan of Reorganization, the completion of the Lummus Technology sale is a condition precedent to emergence from the Chapter 11 proceedings. After the Petition Date, incremental costs directly related to the Lummus Technology sale, totaling approximately $19 million, were also included in reorganization items and were allocated to discontinued operations, as further disclosed in Note 4, Discontinued Operations For the period ended March 31, 2020, reorganization items pertaining to continuing operations were $246 million and consisted of the following items: March 31, 2020 (In millions) Claims valuation adjustments $ 96 DIP Credit Facility fees 87 Professional fees and other 63 Total reorganization items, net $ 246 Payments of DIP Credit Facility fees ($87 million) and professional fees ($58 million) were included in cash outflows from financing and operating activities, respectively, in our Statement of Cash Flows for the three months ended March 31, 2020. Liabilities Subject to Compromise Liabilities subject to compromise distinguish prepetition liabilities which may be affected by the Chapter 11 proceedings from those that are not (such as fully secured liabilities that are not impaired or expected to be compromised) and those that are postpetition liabilities. These amounts represent our best estimate of allowed claims that will be resolved as part of the Chapter 11 Cases. There are no claims not subject to reasonable estimation. Liabilities subject to compromise are reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although they may be settled for less. Based on an assessment of each claim’s impairment and projected recovery under the Plan of Reorganization, four classes of prepetition liabilities were subject to compromise as they were impaired, were projected to receive less than 100% of the claim and were unsecured and/or undersecured. Those classes included claims under the Term Facility, Senior Notes and Revolving Credit Facility (defined in Note 11, Debt amended and restated approved by the Court (see Note 16, Derivative Financial Instruments ) At March 31, 2020, liabilities subject to compromise consisted of the following balances: March 31, 2020 (In millions) Term facility $ 2,220 10.625% Senior Notes 1,300 Revolving credit facility 801 Accrued and unpaid interest 114 Allowed claims on Term facility and Revolving credit facility 96 Interest rate derivative 47 Total liabilities subject to compromise $ 4,578 The principal balance on the Term Facility, Senior Notes and Revolving Credit Facility have been reclassified from “Debt” in current liabilities to “Liabilities subject to compromise” in our Balance Sheet as of March 31, 2020. Accrued and unpaid interest through the Petition Date on our Term Facility, Revolving Credit Facility and Senior Notes and liability associated with our interest rate derivative were reclassified from “Accrued liabilities” in current liabilities to “Liabilities subject to compromise” in our Balance Sheet as of March 31, 2020. In addition, the Plan of Reorganization includes the allowance of all accrued and unpaid interest associated with the Term Facility and the Revolving Credit Facility through the Effective Date. Accordingly, we have assessed and included in “Liabilities subject to compromise” allowed claims of $72 million for the Term Facility and $24 million for the Revolving Credit Facility, which are calculated as interest, at the default rates, for the period subsequent to the Petition Date and through the Effective Date. Those allowed claims are recorded in the “Reorganization items, net” in our Statement of Operations for the three months ended March 31, 2020. The contractual interest expense on the Senior Notes, from the Petition Date to the Effective Date, not reflected in our Statement of Operations for the three months ended March 31, 2020 was $27 million. We discontinued accruing interest on the Senior Notes as of the Petition Date as part of the automatic stay enforced as part of the Chapter 11 Cases. Creditor classes not classified as “Liabilities subject to compromise” are expected to receive full recovery under the Plan of Reorganization. Debtor financial statements The followings are the consolidated financial statements of the entities included in the Chapter 11 Cases (all intercompany balances due between Debtor entities have been eliminated): McDERMOTT INTERNATIONAL, INC. DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three months ended, March 31, 2020 (In millions) Revenues $ 1,757 Costs and Expenses: Cost of operations 1,732 Other operating expenses, net 1,087 Total operating expenses, net 2,819 Operating loss (1,062 ) Other expense: Interest expense, net (58 ) Intercompany charges for interest 5 Reorganization items (246 ) Other non-operating expense, net (6 ) Total other expense, net (305 ) Loss before provision for income taxes (1,367 ) Income tax expense 6 Loss from continuing operations (1,373 ) Loss from discontinued operations (14 ) Net loss (1,387 ) Less: Net income attributable to noncontrolling interests 6 Net loss attributable to Debtor entities $ (1,393 ) McDERMOTT INTERNATIONAL , INC . DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 2020 (In millions) Assets Current assets: Cash and cash equivalents $ 990 Restricted cash and cash equivalents 397 Current assets of discontinued operations 2,451 Other current assets 2,015 Total current assets 5,853 Property, plant and equipment, net 1,171 Other non-current assets 1,695 Total assets $ 8,719 Liabilities, Mezzanine Equity and Stockholders' Equity Current liabilities: Debt $ 2,038 Current liabilities of discontinued operations 426 Advance billings on contracts, accounts payable, accrued and other current liabilities 3,149 Total current liabilities 5,613 Intercompany accounts payable 727 Other non-current liabilities 1,051 Total liabilities not subject to compromise 7,391 Liabilities subject to compromise 4,578 Mezzanine equity: Redeemable preferred stock 294 Debtor entities total McDermott stockholders' equity (3,551 ) Noncontrolling interest 7 Debtor entities total stockholders' equity (3,544 ) Debtor entities total liabilities and stockholders' equity $ 8,719 McDERMOTT INTERNATIONAL , INC . DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three months ended March 31, 2020 (In millions) Cash flows from operating activities: Net loss $ (1,387 ) Adjustments to reconcile net loss to cash flows from operating activities: Reorganization items, net - Claims valuation adjustments 96 Reorganization items, net - DIP Credit Facility fees 87 Property, plant and equipment impairment 884 Goodwill and intangible assets impairment 94 Charges from parent of subsidiary 5 Other current and non-current assets and liabilities, net (465 ) Total cash used in operating activities (686 ) Cash flows from investing activities: Purchases of property, plant and equipment (25 ) Advances related to proportionately consolidated consortiums (57 ) Other investing activities (4 ) Total cash used in investing activities (86 ) Cash flows from financing activities: DIP Term Facility borrowings 1,200 DIP Credit Facility fees (87 ) Advances related to equity method joint ventures and proportionately consolidated consortiums 69 Other financing activities among subsidiaries (47 ) Other financing activities (5 ) Total cash provided by financing activities 1,130 Effect of exchange rate changes on cash, cash equivalents and restricted cash (3 ) Net Increase in cash, cash equivalents and restricted cash 355 Cash, cash equivalents and restricted cash at beginning of period 1,032 Cash, cash equivalents and restricted cash at end of period $ 1,387 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 4—DISCONTINUED OPERATIONS As discussed in Note 2, Basis of Presentation Assets and Liabilities Held for Sale —The carrying values of the major classes of assets and liabilities of the discontinued operations of the Lummus Technology business included within our Balance Sheets as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 (In millions) Assets Current assets: Cash and cash equivalents $ 11 $ 10 Restricted cash and cash equivalents 2 - Accounts receivabl e 148 144 Accounts receivable—other 4 6 Contracts in progress 92 92 Project-related intangible assets, net 13 15 Inventory 22 33 Other current assets 4 6 Property, plant and equipment, net 59 - Operating lease right-of-use assets 14 - Investments in unconsolidated affiliates 384 - Goodwill 1,137 - Other intangibles, net 561 - Total current assets of discontinued operations held for sale $ 2,451 $ 306 Property, plant and equipment, net - 62 Operating lease right-of-use assets - 15 Investments in unconsolidated affiliates - 381 Goodwill - 1,140 Other intangibles, net - 573 Other non-current assets - 2 Total assets of discontinued operations held for sale $ 2,451 $ 2,479 Liabilities Current liabilities: Lease obligations 5 5 Accounts payable 15 21 Advance billings on contracts 217 228 Long-term lease obligations 9 - Accrued and other liabilities 180 129 Total current liabilities of discontinued operations held for sale 426 383 Long-term lease obligations - 10 Other non-current liabilities - 66 Total liabilities of discontinued operations held for sale $ 426 $ 459 Accumulated other comprehensive loss $ (14 ) $ (11 ) Results of Operations —The results of discontinued operations of Lummus Technology , which have been reflected within discontinued operations in our Statements of Operations for the three months ended March 31, 2020 and 2019, were as follows: Three months ended March 31, 2020 2019 (In millions) Revenues $ 150 $ 148 Costs and Expenses: Cost of operations 90 89 Project intangibles and inventory-related amortization 2 4 Total cost of operations 92 93 Research and development expenses 7 6 Selling, general and administrative expenses 6 5 Other intangibles amortization 11 11 Total expenses 116 115 Income from investments in unconsolidated affiliates 5 8 Investment in unconsolidated affiliates-related amortization (2 ) (2 ) Operating income from discontinued operations 37 39 Interest expense, net (1) (26 ) (1 ) Reorganization items, net (2) (19 ) - (Loss) income from discontinued operations before provision for income taxes (8 ) 38 Income tax expense 6 - Net (loss) income from discontinued operations (14 ) 38 (1) Debt $11 (2) Cash Flows —Cash flows provided by the operating activities of the discontinued operations of Lummus Technology for the three months ended March 31, 2020 and 2019 were $31 million and $54 million, respectively. Cash flows associated with investing activities were not significant for either period. Partnering Arrangements — Lummus Technology has a 50%/50% joint venture with a unit of Chevron Corporation (“Chevron-Lummus Global”), which provides proprietary process technology licenses and associated engineering services and catalysts, primarily for the refining industry. The venture is accounted for using the equity method. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 5—REVENUE RECOGNITION Remaining Performance Obligations (“RPOs”) Our RPOs, attributable to continuing operations, by segment, were as follows: March 31, 2020 December 31, 2019 (Dollars in millions) NCSA $ 5,527 34 % $ 6,250 35 % EARC 2,830 17 % 3,089 17 % MENA 5,507 33 % 5,890 33 % APAC 1,230 8 % 1,450 8 % Storage Solutions 1,281 8 % 1,340 7 % Total $ 16,375 100 % $ 18,019 100 % Of the March 31, 2020 RPOs, we expect to recognize revenues as follows: 2020 2021 Thereafter (In millions) Total RPOs $ 5,854 $ 5,766 $ 4,755 RPOs associated with our discontinued operations as of March 31, 2020 and December 31, 2019 were $610 million and $619 million, respectively. Revenue Disaggregation Our revenue, attributable to continuing operations, by product offering, contract types and revenue recognition methodology was as follows: Three Months Ended March 31, 2020 2019 (In millions) Revenue by product offering: Offshore and subsea $ 821 $ 605 LNG 419 421 Downstream 522 714 Power 144 323 Total $ 1,906 $ 2,063 Revenue by contract type: Fixed price $ 1,572 $ 1,599 Reimbursable 117 286 Hybrid 145 109 Unit-basis and other 72 69 Total $ 1,906 $ 2,063 Revenue by recognition methodology: Over time $ 1,885 $ 2,043 At a point in time 21 20 Total $ 1,906 $ 2,063 Intercompany amounts have been eliminated in consolidation. Other For the three months ended March 31, 2020, we recognized approximately $2 million of revenues resulting from changes in transaction prices associated with performance obligations satisfied in prior periods, primarily in our NCSA segment. For the three months ended March 31, 2019, we recognized approximately $22 million of revenues resulting from changes in transaction prices associated with performance obligations satisfied in prior periods, primarily in our NCSA segment. Revenues recognized during the three months March 31, 2020, with respect to amounts included in our Advance billings on contracts balance as of December 31, 2019, were approximately $663 million. Unapproved Change Orders, Claims and Incentives Unapproved Change Orders and Claims —As of March 31, 2020, we had unapproved change orders and claims included in transaction prices for our projects aggregating to approximately $170 million, of which approximately $65 million was included in our RPO balance. As of December 31, 2019, we had unapproved change orders and claims included in transaction prices for our projects aggregating to approximately $231 million, of which approximately $60 million was included in our RPO balance. Incentives —As of March 31, 2020, we had incentives included in transaction prices for our projects aggregating to approximately $312 million, primarily associated with our Cameron LNG project, of which approximately $18 million was included in our RPO balance. Approximately $165 million related to the Cameron LNG incentives has been collected as of March 31, 2020. As of December 31, 2019, we had incentives included in transaction prices for our projects aggregating to approximately $218 million, primarily associated with our Cameron LNG project, of which approximately $28 million was included in our RPO balance. The amounts recorded in contract prices and recognized as revenues reflect our best estimates of recovery; however, the ultimate resolution and amounts received could differ from these estimates, which could have a material adverse effect on our results of operations, financial position and cash flow. Loss Projects Our accrual of provisions for In addition to loss projects previously reported in the 2019 Form 10-K, our ethane cracker project for a subsidiary of Total S.A., located in Port Arthur, Texas (the “Total ethane cracker project”), our Tyra Redevelopment EPCI project for another subsidiary of Total S.A., in the Danish sector of the North Sea (the “Total Tyra redevelopment project”), and Summary information for our significant ongoing loss projects as of March 31, 2020 is as follows: Cameron LNG ―At March 31, 2020, our U.S. LNG export facility project in Hackberry, Louisiana for Cameron LNG (being performed by our NCSA operating group) was approximately 94% complete on a post-Combination basis (approximately 98% on a cumulative basis) and had an accrued provision for estimated losses of approximately $20 million. In the first quarter of 2020, project operating margin was positively impacted by recognition of approximately $100 million of incentives related to the projected achievement of progress milestones. This improvement was partially offset by increases in cost estimates of approximately $12 million, primarily resulting from poor labor productivity and increases in construction and subcontractor costs, partially driven by schedule prolongations caused by the COVID-19 pandemic. Freeport LNG ―At March 31, 2020, Trains 1 & 2 of our U.S. LNG export facility project in Freeport, Texas for Freeport LNG (being performed by our NCSA operating group) were approximately 98.6% complete on a post-Combination basis (approximately 99.6% on a cumulative basis) and had an accrued provision for estimated losses of approximately $4 million. During the three months ended March 31, 2020, the project was negatively impacted by $13 million due to changes in cost estimates resulting from increases in construction and subcontractor costs. Total ethane cracker project ―At March 31, 2020, this project (being performed by our NCSA operating group) was approximately 86% complete and had an accrued provision for estimated losses of approximately $8 million . During the first quarter of 2020, the project was negatively impacted by changes in cost estimates of $47 million, partially driven by schedule prolongations caused by the COVID-19 pandemic. Total Tyra redevelopment project ―At March 31, 2020, this project (being performed by our EARC operating group) was approximately 62% complete and had an accrued provision for estimated losses of approximately $19 million . During the first quarter of 2020, the project was negatively impacted by changes in cost estimates of $9 million, primarily resulting from poor labor productivity and increases in construction and subcontractor costs driven by the impacts of the COVID-19 pandemic. Reliance subsea field development project ―At March 31, 2020, this project (being performed by our APAC operating group) was approximately 74% complete and had an accrued provision for estimated losses of approximately $11 million . During the first quarter of 2020, the project was negatively impacted by changes in cost estimates of $13 million, primarily resulting from poor labor productivity and increases in construction and subcontractor costs driven by the impacts of the COVID-19 pandemic. Rota 3 pipeline project ―At March 31, 2020, our project in Brazil involving the design and detailed engineering, procurement, construction and installation of a rigid concrete coated gas pipeline export system (being performed by our NCSA operating group) was approximately 75% complete and had an accrued provision for estimated losses of approximately $20 million. During the first quarter of 2020, the project was negatively impacted by charges of $8 million, due to changes in cost estimates ($6 million) and foreign exchange losses ($2 million). The project is expected to be completed in the second quarter of 2020. Summary information for our significant loss projects previously reported in the 2019 Form 10-K that are substantially complete as of March 31, 2020 is as follows: Asheville power plant project ―As of March 31, 2020, our power project located in Arden, North Carolina (being performed by our NCSA operating group) was approximately 99% complete, and the remaining accrued provision for estimated losses was not significant Line 1 and Line 10 ―As of March 31, 2020, our subsea pipeline flowline installation project in support of the Ayatsil field offshore Mexico (being performed by our NCSA operating group) was approximately 99% complete, and the remaining accrued provision for estimated losses was not significant. |
PROJECT CHANGES IN ESTIMATES
PROJECT CHANGES IN ESTIMATES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
PROJECT CHANGES IN ESTIMATES | NOTE 6—PROJECT CHANGES IN ESTIMATES Our RPOs for each of our operating groups generally consist of several hundred contracts, and our results may be impacted by changes in estimated margins. The following is a discussion of our most significant changes in cost estimates that impacted segment operating income for the three months ended March 31, 2020 and 2019. For a discussion of significant changes in estimates resulting from changes in transaction prices, see Note 5, Revenue Recognition Three months ended March 31, 2020 Segment operating results for the three months ended March 31, 2020 were impacted by net unfavorable changes in estimates totaling approximately $150 million, including negative impacts from the COVID-19 pandemic of approximately $79 million. The estimated negative impact the COVID-19 pandemic had on our segment operating results was approximately $39 million, $11 million, $17 million and $12 million in our NCSA, EARC, MENA and APAC segments, respectively. Our Storage Solutions Unfavorable changes in estimates in our EARC segment (primarily on the Total Tyra redevelopment project), MENA (various projects not material individually) and APAC (primarily on the Reliance subsea field development project ) Our NCSA segment results in the first quarter were negatively impacted by net unfavorable changes in cost estimates aggregating approximately $115 million and included estimated $39 million of unfavorable changes attributable to the COVID-19 pandemic. The net unfavorable changes were primarily due to cost increases on: • LNG projects – $11 million, including the Cameron LNG and Freeport LNG project, as a whole; • Downstream petrochemical projects – $54 million, including the Total ethane cracker project; • Offshore and subsea projects– $68 million, including the Rota 3 pipeline and other projects; and • various other projects. See Note 5, Revenue Recognition, for further discussion of our projects that were in the substantial loss position as of March 31, 2020. Three months ended March 31, 2019 Segment operating income for the three months ended March 31, 2019 was impacted by net favorable changes in estimates totaling approximately $19 million, primarily in our NCSA, EARC, MENA and APAC segments. Changes in cost estimates in our Storage Solutions NCSA —Our segment results for the three months ended March 31, 2019 were negatively impacted by net unfavorable changes in estimates aggregating approximately $24 million. The net unfavorable changes were due to cost increases on the Freeport LNG Trains 1 & 2 project and a subsea pipeline flowline installation project, partially offset by savings on our ethane projects in Texas and Louisiana and our Freeport LNG Train 3 project. EARC —Our segment results for the three months ended March 31, 2019 were positively impacted by net favorable changes in estimates aggregating approximately $4 million. MENA —Our segment results for the three months ended March 31, 2019 were positively impacted by net favorable changes in estimates aggregating approximately $33 million. The net favorable changes were primarily due to reductions in costs on various projects in the Middle East. APAC —Our segment results for the three months ended March 31, 2019 were positively impacted by net favorable changes in estimates aggregating approximately $6 million. The net favorable changes were due to reductions in cost to complete several projects, partially offset by cost increases and weather downtime on various projects. |
ACCOUNTS RECEIVABLE-TRADE, NET
ACCOUNTS RECEIVABLE-TRADE, NET | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE-TRADE, NET | NOTE 7—ACCOUNTS RECEIVABLE—TRADE, NET Our trade receivable balances at March 31, 2020 and December 31, 2019 included the following: March 31, 2020 December 31, 2019 (In millions) Contract receivables (1) $ 745 $ 823 Retainages 120 146 Less allowances (33 ) (27 ) Accounts receivable — $ 832 $ 942 ( 1 ) — As of March 31, 2020, our allowance for doubtful accounts related to trade accounts receivable included $6 million associated with the adoption of ASU 2016-13, discussed in Note 2, Basis of Presentation |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Our goodwill balance is attributable to the excess of the purchase price over the fair value of net assets acquired in connection with the Combination. As discussed in Note 1, Nature of Operations and Organization Segment Reporting n the third quarter of 2019, we terminated the previously announced sale process for our industrial storage tank business. As a result of our decision to retain that business, starting January 1, 2020, we changed the structure of our internal organization and formed a new segment for our industrial storage tank business (“ Storage Solutions ”). Previously disclosed reporting segment financial information has been recast to reflect the above change. Goodwill attributable to the reporting segment, which also represents a reporting unit, was allocated from our EARC and MENA reporting units based on the relative fair values of the operations transferred pursuant to the reorganization. The goodwill allocated to was $9 million as of January 1, 2020. The changes in the carrying amount of goodwill during the three months ended March 31, 2020 were as follows: EARC MENA Storage Solutions Total (In millions) Balance as of January 1, 2020 (1) $ 91 $ 47 $ 9 $ 147 Goodwill impairment (91 ) - - (91 ) Balance as of March 31, 2020 $ - $ 47 $ 9 $ 56 (1) As of January 1, 2020, we had approximately $3.5 billion of cumulative impairment charges recorded in conjunction with our impairment assessments performed during 2019 and 2018, as previously described in the 2019 Form 10-K. Discontinued Operations — In connection with the entry of the Confirmation Order, the Lummus Technology sale, primarily represented by our Technology reporting segment, was approved by the Bankruptcy Court, as discussed in Note 3, . During the first quarter of 2020, we classified our Technology reporting segment as a discontinued operation. Goodwill associated with our Technology reporting segment was approximately $1.1 billion as of March 31, 2020 and December 31, 2019. Impairment Assessment — Following our reorganization and new reporting structure with Storage Solutions as a reporting unit as of January 1, 2020, goodwill impairment assessments were performed on our EARC, MENA and Storage Solutions reporting units. Based on our quantitative assessments, we determined that, as of March 31, 2020, the goodwill associated with our EARC reporting unit was fully impaired, primarily due to updates to the 2020 management budget. We determined the goodwill associated with our MENA and Storage Solutions reporting units was not impaired, as the fair value of each such reporting unit exceeded its net book value by 219% and 143%, respectively. The EARC goodwill impairment did not have a net tax benefit. Key assumptions used in deriving the reporting units’ fair values included the use of significant unobservable inputs, representative of a Level 3 fair value measurement, and included, Discount rate Compound annual growth rate Terminal growth rate EARC 35.5 % 41.3 % 2 % MENA 37.0 % 24.0 % 2 % Storage Solutions 18.5 % 39.7 % 2 % Project-Related and Other Intangibles During the first quarter of 2020, we determined there were indicators of impairment related to our NCSA trade names intangible asset, resulting from incremental unfavorable changes in estimates to complete certain key projects (see Note 5, Revenue Recognition , and Note 6, Project Changes in Estimates, for discussion). This determination resulted in a decrease in our future attributable cash flow expectations . A test of recoverability was performed as of March 31, 2020, indicating that the NCSA trade names intangible asset had an undiscounted value below carrying value. As a result, we determined the fair value of the trade names intangible asset, resulting in an impairment of $3 million. Key inputs leading to the impairment included updated estimated attributable cash flows based on revenue obsolescence assumptions and reductions in management’s budget. The fair value of the impaired intangible asset was determined using an income approach and was estimated based on the present value of projected future cash flows attributable to the asset. These estimates were based on unobservable inputs requiring significant judgment and were representative of a Level 3 fair value measurement. Our other intangible assets associated with our reporting segments included in continuing operations as of March 31, 2020 and December 31, 2019, including the weighted-average useful lives as of March 31, 2020, were as follows: March 31, 2020 December 31, 2019 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In years) (In millions) Process technologies 10 $ 80 $ (15 ) $ 65 $ 80 $ (13 ) $ 67 Trade names 10 121 (26 ) 95 125 (22 ) 103 Customer relationships 5 14 (9 ) 5 14 (8 ) 6 Trademarks 10 4 (1 ) 3 4 (1 ) 3 Total (1) $ 219 $ (51 ) $ 168 $ 223 $ (44 ) $ 179 (1) Amortization expense is anticipated Our project-related intangibles as of March 31, 2020 and December 31, 2019, including the weighted-average useful lives as of March 31, 2020, were as follows: March 31, 2020 December 31, 2019 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In years) (In millions) Project-related intangible assets 3 $ 166 $ (139 ) $ 27 $ 166 $ (133 ) $ 33 Project-related intangible liabilities 2 (109 ) 101 (8 ) (109 ) 99 (10 ) Total (1) $ 57 $ (38 ) $ 19 $ 57 $ (34 ) $ 23 (1) Other intangible assets and project-related intangibles associated with discontinued operations, primarily represented by our Technology segment, were $561 million and $13 million as of March 31, 2020, and $573 million and $15 million as of December 31, 2019, respectively. |
JOINT VENTURE AND CONSORTIUM AR
JOINT VENTURE AND CONSORTIUM ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments And Joint Ventures [Abstract] | |
JOINT VENTURE AND CONSORTIUM ARRANGEMENTS | NOTE 9—JOINT VENTURE AND CONSORTIUM ARRANGEMENTS We account for our unconsolidated joint ventures or consortiums using either proportionate consolidation, when we meet the applicable accounting criteria to do so, or the equity method. Further, we consolidate any joint venture or consortium that is determined to be a VIE for which we are the primary beneficiary or which we otherwise effectively control. Proportionately Consolidated Consortiums The following is a summary description of our significant consortiums that have been deemed to be VIEs where we are not the primary beneficiary and are accounted for using proportionate consolidation: • McDermott/Zachry Industrial Inc. (“Zachry”) — We have a 50%/50% consortium with Zachry to perform engineering, procurement and construction (“EPC”) work for two LNG liquefaction trains in Freeport, Texas. In addition, we have subcontract and risk-sharing arrangements with a unit of Chiyoda Corporation (“Chiyoda”) to support our responsibilities to the venture. The costs of these arrangements are recorded in Cost of operations • McDermott/Zachry/Chiyoda —We have a consortium with Zachry and Chiyoda (MDR—33.3% / Zachry—33.3% / Chiyoda—33.3%) to perform EPC work for an additional LNG liquefaction train at the project site in Freeport, Texas referred to above. • McDermott/Chiyoda —We have a 50%/50% consortium with Chiyoda to perform EPC work for three LNG liquefaction trains in Hackberry, Louisiana. • McDermott/CTCI —We have a 42.5%/57.5% consortium with a unit of CTCI Corporation (“CTCI”) to perform EPC work for a mono-ethylene glycol facility in Gregory, Texas. • CCS JV s.c.a.r.l.— We have a joint venture with Saipem and Chiyoda (MDR—24.983% / Saipem— 74.949% / Chiyoda— 0.068%) for the turnkey construction of two LNG liquefaction trains and the relevant supporting structures to be built in the Republic of Mozambique. The following table presents summarized balance sheet information for our share of our proportionately consolidated consortiums: March 31, 2020 December 31, 2019 (In millions) Current assets (1) $ 593 $ 529 Non-current assets 9 6 Total assets $ 602 $ 535 Current liabilities $ 609 $ 671 (1 ) — As of March 31, 2020 and December 31, 2019, Accrued liabilities reflected on the Balance Sheets included $20 million and $29 million, respectively, related to advances from these consortiums. The following is a summary description of our significant consortium that has been deemed a collaborative arrangement, in which we are not the primary beneficiary and we record our share of the consortium’s revenues, costs and profits: • McDermott/Zachry/Chiyoda —We have a consortium with Zachry and Chiyoda to perform EPC work for a natural gas liquefaction facility in Sabine Pass, Texas. The collaborative arrangement includes an underlying primary consortium with all three parties sharing equal voting interests. This primary consortium has subcontract relationships with a separate consortium between Zachry and McDermott, with equal voting interests and separate scopes of work to be executed by each consortium party. The following table presents summarized balance sheet information for our share of that proportionately consolidated collaborative arrangement: March 31, 2020 December 31, 2019 (In millions) Current assets $ 220 $ 180 Non-current assets 7 - Total assets $ 227 $ 180 Current liabilities $ 219 $ 175 Equity Method Joint Ventures —The following is a summary description of our significant joint ventures accounted for using the equity method: • NET Power, LLC (“NET Power”) —We have a joint venture with a unit of Exelon Corporation (“Exelon”), 8 Rivers Capital and Oxy Low Carbon Ventures LLC, a subsidiary of Occidental Petroleum Corporation (“Oxy”), (MDR—32.2% / Exelon—32.2% / 8 Rivers Capital—29.3% / Oxy— 6.3%) to commercialize a new natural gas power generation system that recovers the carbon dioxide produced during combustion. NET Power is building a first-of-its-kind demonstration plant which is being funded by contributions and services from the joint venture participants and other parties. On November 8, 2018, NET Power signed an investment agreement for Oxy to purchase 10% of the company for $60 million over a three-year period. On March 8, 2019, September 30, 2019, and March 2, 2020 Oxy paid $20 million, $11 million, and $5 million, respectively, and received a 6.3% interest in NET Power. We have determined the joint venture to be a VIE; however, we are not the primary beneficiary and therefore do not consolidate it. • McDermott/CTCI —We have a 50%/50% joint venture with CTCI to perform EPC work for a liquids ethylene cracker and associated units at Sohar, Oman. We have determined the joint venture to be a VIE; however, we are not the primary beneficiary and therefore do not consolidate it. Our joint venture arrangement allows for excess working capital of the joint venture to be advanced to the joint venture participants. Such advances are returned to the joint venture for working capital needs as necessary. As of March 31, 2020 and December 31, 2019, Accrued liabilities on the Balance Sheets included $95 million related to advances from this joint venture. • io Oil and Gas —We co-own several 50%/50% joint venture entities with Baker Hughes, a GE company. These joint venture entities focus on the pre-FEED phases of projects in offshore markets, bring comprehensive field development expertise and provide technically advanced solutions in new full field development concept selection and evaluation. • Qingdao McDermott Wuchuan Offshore Engineering Company Ltd .—We have a 50%/50% joint venture with Wuhan Wuchuan Investment Holding Co., Ltd., a leading shipbuilder in China. This joint venture provides project management, procurement, engineering, fabrication, construction and pre-commissioning of onshore and offshore oil and gas structures, including onshore modules, topsides, floating production storage, off-loading modules, subsea structures and manifolds. Consolidated Joint Ventures— The following is a summary description of our significant joint ventures we consolidate due to their designation as VIEs for which we are the primary beneficiary: • McDermott/Orano — We have a joint venture with Orano, of which we own 70% and Orano owns 30%, relating to a mixed oxide fuel fabrication facility in Aiken, South Carolina. In addition, we have a profit sharing agreement to transfer to Orano 18% of the profits attributable to us. The project is substantially complete. • McDermott/Kentz— We have a venture with Kentz Engineers & Constructors, a unit of SNC-Lavalin Group “Kentz” (McDermott—65% / Kentz—35%), to perform the structural, mechanical, piping, electrical and instrumentation work on, and to provide commissioning support for, three LNG trains, including associated utilities and a gas processing and compression plant, for the Gorgon LNG project, located on Barrow Island, Australia. The project is substantially complete. The joint venture remains in operation to complete various post-project activities. The following table presents summarized balance sheet information for our consolidated joint ventures, including other consolidated joint ventures that are not individually material to our financial results: March 31, 2020 December 31, 2019 (In millions) Current assets $ 42 $ 39 Non-current assets 16 16 Total assets $ 58 $ 55 Current liabilities $ 109 $ 120 Other —The use of joint ventures and consortiums exposes us to a number of risks, including the risk that the third-party joint venture or consortium participants may be unable or unwilling to provide their share of capital investment to fund the operations of the joint venture or consortium or complete their obligations to us, the joint venture or consortium, or ultimately, our customer. Differences in opinions or views among joint venture or consortium participants could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of a joint venture or consortium. In addition, agreement terms may subject us to joint and several liability for the third-party participants in our joint ventures or consortiums, and the failure of any of those third parties to perform their obligations could impose additional performance and financial obligations on us. These factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes. |
RESTRUCTURING AND INTEGRATION C
RESTRUCTURING AND INTEGRATION COSTS AND TRANSACTION COSTS | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
RESTRUCTURING AND INTEGRATION COSTS AND TRANSACTIONS COSTS | NOTE 10—RESTRUCTURING AND INTEGRATION COSTS AND TRANSACTION COSTS Restructuring and Integration Costs Restructuring and integration costs for the three months ended March 31, 2020 were $14 million and primarily included stock compensation expense and accruals for management incentive and retention programs implemented as a result of the Chapter 11 Cases. Stock compensation is associated with our equity compensation plans. The provisions of the RSA and the Plan of Reorganization contemplate that the obligations to issue securities under our equity compensation plans will be cancelled and discharged in connection with the Chapter 11 Cases. For further discussion see Note 18, Stockholders’ Equity and Equity-Based Incentive Plans. Restructuring and integration costs for the three months ended March 31, 2019 were $69 million and primarily related to costs associated with our Combination profitability initiative, launched in the second quarter of 2018, with the goal of realizing cost savings across the combined business. Restructuring and integration costs are recorded within our Corporate operating results. Transaction Costs Transaction costs for the three months ended March 31, 2020 were $35 million and primarily related to professional and other fees associated with the Chapter 11 Cases and the Lummus technology business sale incurred prior to the Petition Date, as well as legal and other professional fees associated with the sale process for the pipe fabrication business. As of March 31, 2020, we had approximately $8 million of accrued liabilities associated with transaction costs incurred in the three months ended March 31, 2020. Transaction costs for the three months ended March 31, 2019 were $4 million and primarily related to professional fees associated with the development of plans to sell our non-core industrial storage tank and pipe fabrication businesses. We subsequently terminated our plans to sell our industrial storage tank business. Transaction costs are recorded within our Corporate operating results. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 11—DEBT The carrying values of our debt obligations are as follows: March 31, December 31, 2020 2019 (In millions) Debtor-in-Possession Term Facility $ 2,032 $ - New Term Facility - 800 Discount on New Term Facility (37 ) (54 ) Structured equipment financing 35 32 North Ocean 105 construction financing 8 8 Term Facility - 2,220 10.625% senior notes - 1,300 Revolving credit facility - 801 Debt $ 2,038 $ 5,107 Debtor-in-Possession Financing In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates provided the Debtors with superpriority debtor-in-possession financing pursuant to a new credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including (1) up to $2,065 million under a term loan facility, consisting of (a) a $550 million tranche made available on January 23, 2020, (b) a $650 million tranche made available upon entry of the Final DIP Order (as defined in the RSA) on February 26, 2020, (c) an $800 million tranche consisting of the principal amount of term loans outstanding under the New Term Facility (defined below) under our Superpriority Credit Agreement (defined below) and $21 million of accrued interest and fees related to term loans outstanding under the New Term Facility under our Superpriority Credit Agreement and the New LC Facility (defined below) under our Superpriority Credit Agreement, in each case that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order and (d) a $44 million tranche consisting of the make-whole amount owed to the lenders under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP Term Facility”) and (2) up to $743 million under a letter of credit facility consisting of (a) $300 million made available at closing on January 23, 2020, (b) $243 million that was made available upon entry of the Final DIP Order on February 26, 2020 and (c) $200 million amount of term loans outstanding under Tranche A and Tranche B of the New LC Facility under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP LC Facility” and, together with the DIP Term Facility, the “DIP Facilities”). The Final DIP Order was entered by the Bankruptcy Court on February 24, 2020. We intend to use proceeds from the DIP Facilities to, among other things: (1) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (2) pay adequate protection payments; (3) fund our working capital needs and expenditures during the Chapter 11 proceedings; (4) fund the Carve-Out (as defined below), which accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases; and (5) pay fees and expenses related to the transactions contemplated by the DIP Facilities. The make-whole amount of $44 million referred to above was recognized at the accreted value using the effective interest method and was approximately $11 million as of March 31, 2020. As of March 31, 2020, there was approximately $350 million in aggregate face amount of letters of credit outstanding under the DIP LC Facility. In the first quarter of 2020, All loans outstanding under the DIP Term Facility bear interest at an adjusted LIBOR rate plus 9.00% per annum. All undrawn letters of credit under the DIP LC Facility (other than cash secured letters of credit) bear interest at a rate of 9.00% per annum. During the continuance of an event of default, the outstanding amounts under the DIP Facilities would bear interest at an additional 2.00% per annum above the interest rate otherwise applicable. The lenders under the DIP Facility, Crédit Agricole Corporate and Investment Bank (“CACIB”), as collateral agent and revolving administrative agent under the DIP Facilities, and Barclays Bank PLC (“Barclays”), as term loan administrative agent under the DIP Term Facility, subject to the Carve-Out (as defined below) and the terms of the Interim DIP Order (as defined in the RSA), at all times: (1) are entitled to joint and several super-priority administrative expense claim status in the Chapter 11 Cases; (2) have a first priority lien on substantially all assets of the Debtors; (3) have a junior lien on any assets of the Debtors subject to a valid, perfected and non-avoidable lien as of the Petition Date, other than such liens securing the obligations under the Credit Agreement, the Superpriority Credit Agreement, the Lloyds’ LC Facility and the 2021 LC Facility; and (4) have a first priority pledge of 100% of the stock and other equity interests in each of McDermott’s direct and indirect subsidiaries. The Debtors’ obligations to the DIP Lenders and the liens and superpriority claims are subject in each case to a carve out (the “Carve-Out”) that accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases. The DIP Facilities are subject to certain affirmative and negative covenants, including, among other covenants we believe to be customary in debtor-in-possession financings, reporting by the Debtors in the form of a budget and rolling 13-week cash flow forecasts, together with a reasonably detailed written explanation of all material variances from the budget. Debtor-in-Possession Financial Covenants —The DIP Facilities include the following financial covenants: • as of any Variance Testing Date (as defined in the DIP Facilities , we shall not allow (1) our aggregate cumulative actual total receipts for such variance testing period to be less than the projected amount therefor set forth in the most recently delivered Approved Budget (as defined in the by more than 15%, (2) our aggregate cumulative actual total disbursements (A) for the variance testing period to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than 15% and (B) for each week within such variance testing period, to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than (x) 20%, with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period, and (3) our aggregate cumulative actual vendor disbursements and JV infusions with respect to the Specified Projects (as defined in the DIP Facilities) o exceed the projected amount therefore set forth in the most recently delivered Approved Budget by more than 15% for such variance testing period and for each week within such variance testing period by more than (x) 20% with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period. • beginning with the fiscal quarter ended June 30, 2020, our adjusted EBITDA (as defined in the DIP Facilities DIP Facilities Test Period End Date Adjusted EBITDA (In millions) June 30, 2020 $ 230 September 30, 2020 410 December 31, 2020 640 • beginning with the fiscal quarter ended December 31, 2019, the Project Charges ( for specific projects as defined in the DIP Facilities) for the most recently ended fiscal quarter for which consolidated financial statements have been delivered pursuant to the DIP Facilities shall not be more than the maximum amount set for the below as set forth opposite such ended fiscal quarter: Test Period End Date Maximum Project Charges (In millions) December 31, 2019 $ 260 March 31, 2020 50 June 30, 2020 50 September 30, 2020 40 December 31, 2020 30 As of March 31, 2020 and December 31, 2019, we were in compliance with our maximum project charges covenant under the DIP Facilities. The DIP Facilities contain certain events of default we believe to be customary in debtor-in-possession financings, including: (1) conversion of the Chapter 11 Cases to a Chapter 7 case; (2) appointment of a trustee, examiner or receiver in the Chapter 11 Cases; and (3) the final order not being entered by the Bankruptcy Court within 35 days of the interim order relating to the DIP Facilities. The DIP Facilities will mature on the earliest of (1) nine months after the Petition Date, which date shall be extended automatically by an additional 90 days if certain conditions are satisfied, (2) the Effective Date and (3) the date of acceleration of the obligations under the DIP Facilities following an event of default. Superpriority Credit Agreement On October 21, 2019, McDermott, as a guarantor, , as co-borrowers (collectively, the “Borrowers”) The Superpriority Credit Agreement provided for borrowings and letters of credit in an aggregate principal amount of $1.7 billion, consisting of (1) a $1.3 billion term loan facility (the “New Term Facility”) and (2) a $400 million letter of credit facility (the “New LC Facility”). As of December 31, 2019, we had $800 million in borrowings outstanding under the New Term facility and there were $200 million of letters of credit issued (or deemed issued) under the New LC Facility. As discussed in “—Debtor-in-Possession Financing” above, these amounts were rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order. Certain features within the Superpriority Credit Agreement were identified as embedded derivatives and, therefore, bifurcated as of December 31, 2019. The fair value of the embedded derivatives, which was determined using a discounted cash flow approach, was $60 million as of October 21, 2019. The embedded derivatives were recognized as a reduction to the debt outstanding under the Superpriority Credit Agreement and recorded in accrued liabilities. The reduction of $60 million to the debt is being accreted using the effective interest rate method and was approximately $37 million as of March 31, 2020. The change in the value of the discount of $17 million was recognized in “Interest expense, net” in our Statement of Operations for the three months ended March 31, 2020. The fair value of the embedded derivatives, re-measured as of March 31, 2020, was de minimis Discontinued Operations Credit Agreement On May 10, 2018, we entered into a Credit Agreement (as amended to date, the “Credit Agreement”) with a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for a term facility under the Credit Agreement, and Crédit Agricole Corporate and Investment Bank, as administrative agent for the other facilities under the Credit Agreement. The Credit Agreement provides for borrowings and letters of credit in the aggregate principal amount of $ 4.7 billion, consisting of the following: • a $2.26 billion senior secured, seven-year • a $1.0 billion senior secured revolving credit facility (the “Revolving Credit Facility”); and • a $1.44 billion senior secured letter of credit facility (the “LC Facility”), which includes a $50 million increase pursuant to an Increase and Joinder Agreement we entered into with Morgan Stanley Senior Funding, Inc. as of May 24, 2019. The Credit Agreement provided that: • Term Facility Letters of Credit could be issued in an amount up to the amount on deposit in the LC Account ($319.7 million at December 31, 2019), less an amount equal to approximately 3% of such amount on deposit (to be held as a reserve for related letter of credit fees), not to exceed $310 million; • subject to compliance with the financial covenants in the Credit Agreement, the full amount of the Revolving Credit Facility was available for revolving loans; • subject to our utilization in full of our capacity to issue Term Facility Letters of Credit, the full amount of the Revolving Credit Facility was available for the issuance of performance letters of credit and up to $200 million of the Revolving Credit Facility was available for the issuance of financial letters of credit; and • the full unused amount of the LC Facility was available for the issuance of performance letters of credit. Term Facility and Revolving Credit Facility post-Petition Date status —As of March 31, 2020, we had $2.2 billion of borrowings outstanding under the Term Facility and $801 million outstanding under the Revolving Credit Facility. The commencement of the Chapter 11 Cases, discussed in Note 2, Basis of Presentation , constituted events of default that accelerated our obligations under the Credit Agreement. However, the ability of the lenders to exercise remedies was stayed upon commencement of the Chapter 11 Cases and continues to be stayed. In accordance with Plan of Reorganization provisions, the Term Facility are subject to compromise as the lenders are projected to receive less than 100% of their claim. quitization of funded debt held by senior secured term lenders for 94% of the reorganized McDermott As of March 31, 2020, the Term Facility and Revolving Credit Facility and associated accrued and unpaid interest and allowed claims have been included in “Liabilities subject to compromise” in our Balance Sheet (see Note 3, Reorganization ). Term Facility Letters of Credit, Revolving Credit Facility Letters of Credit and LC Facility post-Petition Date status —As of March 31, 2020, there were approximately $280 million letter of credit (including $55 million of financial letters of credit), $194 million of letters of credit outstanding (including $49 million of financial letters of credit) and approximately $1.146 billion of letters of credit outstanding under the Term Facility Letters of Credit, Revolving Credit Facility and LC facility, respectively. We are charged a 5% participation fee on any outstanding letter of credit for any newly issued letter of credit and with respect to any increase in the amount of any existing letter of credit. We are also required to pay customary issuance fees and other fees and expenses in connection with the issuance of letters of credit under the Credit Agreement. Pursuant to the plan of Reorganization, holders of claims under these letter of credit facilities will receive participation rights in the Roll-Off LC Exit Facility (defined in Note 3, Reorganization ) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization). Letter of Credit Agreement On October 30, 2018, we, as a guarantor, entered into a Letter of Credit Agreement (the “Letter of ” obligations under the Letter of Credit Agreement are unconditionally guaranteed on a senior secured basis by us and substantially all of our wholly owned subsidiaries, other than the co-applicants (which are directly obligated thereunder) and several captive insurance subsidiaries and certain other designated or immaterial subsidiaries. The liens securing the $ 230 Million LC Facility will rank equal in priority with the liens securing obligations under the Credit Agreement. The Letter of Credit Agreement includes financial and other covenants and provisions relating to events of default that are substantially the same as those in the Credit Agreement. As of March 31, 2020, there were approximately $ 228 million of letters of credit issued (or deemed issued) under the Letter of Credit Agreement . Pursuant to the Plan of Reorganization, holders of claims under the Letter of Credit Agreement shall receive participation rights in the Roll-Off LC Exit Facility (defined in Note 3, Reorganization ) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization). Senior Notes On April 18, 2018, we issued $1.3 billion in aggregate principal of 10.625% senior notes due 2024 (the “Senior Notes”), pursuant to an indenture we entered into with Wells Fargo Bank, National Association, as trustee. Interest on the Senior Notes was payable semi-annually in arrears, and the Senior Notes were scheduled to mature in May 2024. The commencement of the Chapter 11 Cases, discussed in Note 2, Basis of Presentation ecovery to the holders of the Senior Notes of 6% of the equity of the reorganized McDermott (subject to certain dilution adjustments, such as for the Warrants and the Management Incentive Compensation Plan) and the right to participate in the Rights Offering. The Senior Notes and the associated accrued and unpaid interest as of the Petition Date have been included in the “Liabilities subject to compromise” in our Balance Sheet as of March 31, 2020. Other Financing Arrangements North Ocean (“NO”) Financing ―On September 30, 2010, McDermott International, Inc., as guarantor, and NO 105 AS, one of our subsidiaries, as borrower, entered into a financing agreement to pay a portion of the construction costs of the NO 105. Borrowings under the agreement are secured by, among other things, a pledge of all of the equity of NO 105 AS, a mortgage on the NO 105 , and a lien on substantially all of the other assets of NO 105 AS. As of March 31, 2020, the outstanding borrowing under this facility was approximately $8 million and is scheduled to mature in October 2020. Structured Equipment Financing ―In the second quarter of 2019, we entered into a $37 million uncommitted revolving re-invoicing facility for the settlement of certain equipment supplier invoices. As of March 31, 2020, we had approximately $35 million outstanding under this arrangement, with original repayment obligations maturing in January 2020. In March 2020, we entered into an agreement to modify the repayment schedule and expect to settle approximately $5.7 million monthly, beginning June 2020, with full settlement expected in November 2020. Uncommitted Facilities —We are party to a number of short-term uncommitted bilateral credit facilities and surety bond arrangements (the “Uncommitted Facilities”) across several geographic regions, as follows: March 31, 2020 December 31, 2019 Uncommitted Line Capacity Utilized Uncommitted Line Capacity Utilized (In millions) Bank Guarantee and Bilateral Letter of Credit (1) $ 1,688 $ 1,098 $ 1,842 $ 1,293 Surety Bonds (2) 747 625 835 601 (1) Approximately $175 million of this capacity is available only upon provision of an equivalent amount of cash collateral. (2) Excludes approximately $272 million of surety bonds maintained on behalf of CB&I’s former Capital Services Operations, which were sold to CSVC Acquisition Corp (“CSVC”) in June 2017. We also continue to maintain guarantees on behalf of CB&I’s former Capital Services Operations business, and we are entitled to an indemnity from CSVC for the surety bonds and guarantees . The financial institutions that provide the Uncommitted Facilities have no obligation to issue letters of credit or bank guarantees, or to post surety bonds, on our behalf, and they may be able to demand that we provide them with cash or other collateral to backstop these liabilities. |
LEASE OBLIGATIONS
LEASE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASE OBLIGATIONS | NOTE 12—LEASE OBLIGATIONS The following tables summarize our leased assets and lease liability obligations: March 31, 2020 December 31, 2019 Balance Sheet classification (In millions) Assets Operating lease assets Operating lease right-of-use assets $ 330 $ 349 Finance lease assets Property, plant and equipment, net 50 50 Total leased assets 380 399 Current liabilities Operating leases Current portion of long-term lease obligations 93 93 Finance leases (1) Finance lease obligation 45 47 Current lease obligations 138 140 Noncurrent liabilities Operating leases Long-term lease obligations 279 294 Total lease obligations $ 417 $ 434 (1) As a result of the debt compliance matters, we determined that the classification of our finance lease obligations was current and, accordingly, we recorded those obligations within Current Liabilities on the Balance Sheets as of March 31, 2020 and December 31, 2019. Our finance leases as of March 31, 2020 and December 31, 2019, included the lease of the Amazon Amazon Amazon The commencement of the Chapter 11 Cases constituted events of default under the Amazon Our lease cost was as follows: Three months ended March 31, 2020 2019 Statements of Operations classification (In millions) Operating lease cost (1) SG&A expenses $ 11 $ 12 Operating lease cost (1) Cost of operations 22 24 Finance lease cost Amortization of leased assets Cost of operations - 2 Interest on lease liabilities Net interest expense 1 1 Net lease cost $ 34 $ 39 (1) Includes short-term leases and immaterial variable lease costs. |
PENSION AND POSTRETIREMENT BENE
PENSION AND POSTRETIREMENT BENEFITS | 3 Months Ended |
Mar. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
PENSION AND POSTRETIREMENT BENEFITS | NOTE 13—PENSION AND POSTRETIREMENT BENEFITS We sponsor various defined benefit pension plans covering eligible employees and provide specific postretirement benefits for eligible retired U.S. employees and their dependents through health care and life insurance benefit programs. These plans may be changed or terminated by us at any time. Contributions and net periodic benefit cost for our post-retirement benefit plans were not material during the three months ended March 31, 2020 and 2019. Additionally, contributions and net periodic benefit cost associated with our discontinued operations were not material during the three months ended March 31, 2020 and 2019. The following table provides contribution information for our plans at March 31, 2020: U.S. Pension Plans Non-U.S. Pension Plans (In millions) Contributions made through March 31, 2020 $ - $ 6 Contributions expected for the remainder of 2020 1 7 Total contributions expected for 2020 $ 1 $ 13 The following table provides a breakdown of the components of the net periodic benefit cost (income) associated with our defined benefit pension plans of our continuing operations for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In millions) U.S. pension plans: Interest cost $ 4 $ 5 Expected return on plan assets (5 ) (4 ) Net periodic benefit cost (income) (1) $ (1 ) $ 1 Non-U.S. pension plans: Service cost $ 3 $ 3 Interest cost 3 4 Expected return on plan assets (5 ) (6 ) Net periodic benefit cost (1) $ 1 $ 1 (1) The components of net periodic benefit cost (income) other than the service cost component are included in Other non-operating (income) expense, net in our Statements of Operations. The service cost component is included in Cost of operations and SG&A in our Statements of Operations, along with other compensation costs rendered by the participating employees. We recognize mark-to-market fair value adjustments on defined benefit pension and other postretirement plans in Other non-operating (income) expense, net in our Statements of Operations in the fourth quarter of each year. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities Current [Abstract] | |
ACCRUED LIABILITIES | NOTE 14—ACCRUED LIABILITIES March 31, 2020 December 31, 2019 (In millions) Accrued contract costs $ 573 $ 690 Advances from equity method and proportionally consolidated joint ventures and consortiums (1) 115 124 Income taxes payable 66 56 Accrued interest payable 32 126 Other accrued liabilities (2) 516 534 Accrued liabilities $ 1,302 $ 1,530 (1) Joint Venture and Consortium Arrangements, (2) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 15—FAIR VALUE MEASUREMENTS Fair value of financial instruments Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is available and significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: • Level 1—inputs are based on quoted prices for identical instruments traded in active markets. • Level 2—inputs are based on quoted prices for similar instruments in active markets, quoted prices for similar or identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets and liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar valuation techniques. The following table presents the fair value of our financial instruments as of March 31, 2020 and December 31, 2019 that are (1) measured and reported at fair value in the Financial Statements on a recurring basis and (2) not measured at fair value on a recurring basis in the Financial Statements: March 31, 2020 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts (1) $ (94 ) (94 ) $ - $ (94 ) $ - Not measured at fair value on recurring basis Debt and finance lease obligations (2) (2,083 ) (1,956 ) - (1,885 ) (71 ) Liabilities subject to compromise (3) (4,578 ) (1,133 ) - (860 ) (273 ) December 31, 2019 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts (1) $ (75 ) (75 ) $ - $ (75 ) $ - Embedded derivatives (4) (28 ) (28 ) - - (28 ) Not measured at fair value on recurring basis Debt and finance lease obligations (2) (4,353 ) (2,362 ) - (2,275 ) (87 ) (1) 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. This approach discounts future cash flows based on current market expectations and credit risk. (2) NO 105 (3) Plan of Reorganization, liabilities subject to compromise will be impaired at the Effective Date. See Note 3, Reorganization , for further discussion. ( 4 ) Debt inputs to the fair value measurement of the embedded derivatives are unobservable and reflect our estimates of forward yield. The fair value of the embedded derivative as of March 31, 2020 was not material. The carrying amounts that we have reported for our other financial instruments, including cash and cash equivalents, restricted cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short maturity of those instruments. Fair value of non-financial instruments We evaluate our assets for impairment whenever events or changes in circumstances indicate that indicators of impairment exist. In those evaluations, we compare estimated future undiscounted cash flows generated by each asset (or asset group) to the carrying value of the asset (or asset group) to determine if an impairment charge is required. If the undiscounted cash flows test fails, we estimate the fair value of the asset (or asset group) to determine the impairment. As a result of the impact of the COVID-19 pandemic and significant decline in oil and gas prices, we concluded these events represented impairment triggers to our vessels and fabrication yards as of March 31, 2020. The indicators of impairment were present for our global use vessels ( DLV 2000, NO 102, NO 102 LV108 Emerald Sea Our tests resulted in impairments to all vessels, derrick barges and the Altamira fabrication yard. We determined the aggregate carrying value of these assets (approximately $1.34 billion) was in excess of their estimated fair value ($463 million), and recorded an $881 million impairment. The fair value was estimated based on the amount and timing of estimated associated net future cash flows, discounted at a risk-adjusted rate of 10%. The fair value measurements were based on inputs that are not observable in the market and thus represent level 3 inputs. In addition, during the first quarter of 2020, we made a decision to exit one of our leased spoolbase facilities by June 2020. In connection with this decision we tested the recoverability of the fixed assets located at this facility and determined that the assets were impaired by approximately $3 million. The remaining carrying amount of fixed assets at that facility is not material. Impairment charges are recorded within our Corporate segment. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 16—DERIVATIVE FINANCIAL INSTRUMENTS Foreign Currency Exchange Rate Derivatives —The notional value of our outstanding foreign exchange rate derivative contracts totaled $682 million as of March 31, 2020, with maturities extending through September 2023 As of March 31, 2020, we have approximately $54 million of unrealized net losses in AOCI in connection with foreign exchange rate derivatives designated as cash flow hedges, and we expect to reclassify approximately $22 million of deferred losses out of AOCI by March 31, 2021, as hedged items are recognized in earnings. Interest Rate Derivatives— On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on the Term Facility in an aggregate notional value of $1.9 billion. The interest rate swap arrangement was designated as a cash flow hedge at inception. As of September 30, 2019, our hedged forecasted transaction was no longer probable to occur, and as such, our hedge accounting ceased. Upon commencement of the Chapter 11 Cases, we filed an emergency motion to perform under amended and restated hedging agreements, which was approved by the Court. The amended and restated interest rate swap arrangement resulted in a decrease in notional amount from $1.9 billion to $500 million, to match the agreed-upon exit facility term loan. As of March 31, 2020, the fair value of the $500 million notional value interest rate swap arrangement was in a liability position totaling $39 million and was recorded in “Accrued Liabilities” in our Balance Sheet. The change in the fair value of this swap arrangement in the first quarter of 2020 was approximately $20 million and was reflected in “Interest expense, net” in our Statement of Operations for the three months ended March 31, 2020. Approximately $47 million, representing the fair value of the cancelled $1.4 billion interest rate swap as of the Petition Date, was included in the “Liabilities Subject to Compromise” as it is an allowed claim, discussed in Note 3, Reorganization The following table presents the total fair value of the derivatives by underlying risk and balance sheet classification: March 31, 2020 December 31, 2019 Derivatives designated as cash flow hedges Derivatives not designated as cash flow hedges Derivatives designated as cash flow hedges Derivatives not designated as cash flow hedges (In millions) Other current assets $ - $ 1 $ 3 $ 1 Other non-current assets - - 1 - Total derivatives asset $ - $ 1 $ 4 $ 1 Accrued liabilities $ 22 $ 41 $ 10 $ 68 Other non-current liabilities 32 - 2 - Total derivatives liability $ 54 $ 41 $ 12 $ 68 The following table presents the total value, by underlying risk, recognized in other comprehensive income and reclassified from AOCI to our Statements of Operations, in connection with derivatives: Three Months Ended March 31, 2020 2019 (In millions) Loss recognized in other comprehensive income (loss) Foreign exchange hedges $ (49 ) $ (7 ) Interest rate hedges - (15 ) Gain (loss) recognized on derivatives designated as cash flow hedges Foreign exchange hedges Revenue (1 ) 1 Cost of operations (3 ) 1 Interest rate hedges Interest expense - 1 Gain (loss) recognized on derivatives not designated as cash flow hedges Foreign exchange hedges Revenue - 1 Cost of operations (2 ) - Interest rate hedges Interest expense (20 ) - |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17—INCOME TAXES During the three months ended March 31, 2020, we recognized an income tax expense for continuing operations of $8 million (effective tax rate of -1%), compared to a tax benefit of $21 million (effective tax rate of 18%) for the three months ended March 31, 2019. The lower effective tax rate was due to losses in jurisdictions with no tax benefit and the change in valuation allowance. The tax provision in discontinued operations for the three months ended March 31, 2020 reflected an income tax expense of $6 million (effective tax rate of -77%). Tax expense was due to withholding tax and tax in jurisdictions without valuation allowances. On March 27, 2020, President Trump signed into U.S. federal law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is aimed at providing emergency assistance and health care for individuals, families and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss (“NOL”) utilization and carryback periods, alternative minimum tax credit refunds and modifications to the net interest deduction limitations. In particular, under the CARES Act, (1) for taxable years beginning before 2021, NOL carryforwards and carrybacks may offset 100% of taxable income, (2) NOLs arising in the 2018, 2019 and 2020 taxable years may be carried back to each of the preceding five years to generate a refund and (3) for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of taxable EBITDA. During the tax period ended March 31, 2020, we recorded a benefit of approximately $12.7 million as a result of our decision to carryback 2019 NOLs to the five previous tax years. We are otherwise continuing to work to determine whether any additional CARES Act provisions may impact us. We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Due to the uncertainty related to the impact of the Chapter 11 Cases, we have used a discrete effective tax rate method to calculate taxes for the three months ended March 31, 2020. |
STOCKHOLDERS' EQUITY AND EQUITY
STOCKHOLDERS' EQUITY AND EQUITY-BASED INCENTIVE PLANS | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY AND EQUITY-BASED INCENTIVE PLANS | NOTE 18—STOCKHOLDERS’ EQUITY AND EQUITY-BASED INCENTIVE PLANS Shares Outstanding and Treasury Shares ― The changes in the number of shares outstanding and treasury shares held by us are as follows (in millions): Three Months Ended March 31, 2020 2019 Shares outstanding Beginning balance 193 181 Common stock issued - 2 Purchase of common stock - (1 ) Ending balance 193 182 Shares held as Treasury shares Beginning balance 3 3 Purchase of common stock - 1 Retirement of common stock - (1 ) Ending balance 3 3 Ordinary shares issued at the end of the period (1) 196 184 (1) Effects of the Chapter 11 Cases on the Common Stock — The provisions of the RSA and the Plan of Reorganization contemplate that the existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of our outstanding shares of common stock, will be entitled to no recovery relating to those equity interests. Stock-Based Compensation Expense― During the three months ended March 31, 2020, we recognized $4 million of stock-based equity compensation expense in “Restructuring and integration costs” in our Statements of Operations. The provisions of the RSA and the Plan of Reorganization contemplate that the obligations to issue securities under our equity compensation plans will be cancelled and discharged in connection with the Chapter 11 Cases. During the three months ended March 31, 2019, we recognized $6 million of stock-based equity compensation expense in “Selling, general and administrative expenses” in our Statements of Operations. Compensation expense associated with awards classified as liability awards was not material during the three months ended March 31, 2020 and 2019. As of March 31, 2020, the unrecognized compensation expense was approximately $18 million. This cost will be recognized over a weighted-average period of two years or upon our emergence from the Chapter 11 proceedings, whichever is earlier. Accumulated Other Comprehensive (Loss) Income ―The components of AOCI included in stockholders’ equity are as follows: March 31, 2020 December 31, 2019 (In millions) Foreign currency translation adjustments ("CTA") $ (129 ) $ (97 ) Net unrealized loss on derivative financial instruments (54 ) (12 ) Defined benefit pension and other postretirement plans 6 6 Accumulated other comprehensive loss $ (177 ) $ (103 ) The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated: Foreign currency translation adjustments Net unrealized loss on derivative financial instruments (1) Defined benefit pension and other postretirement plans TOTAL (In millions) December 31, 2018 $ (73 ) $ (40 ) $ 6 $ (107 ) Other comprehensive income before reclassification (39 ) (22 ) - (61 ) Amounts reclassified from AOCI (2) - 3 - 3 Net current period other comprehensive income (39 ) (19 ) - (58 ) March 31, 2019 $ (112 ) $ (59 ) $ 6 $ (165 ) December 31, 2019 (97 ) (12 ) 6 (103 ) Other comprehensive income before reclassification (32 ) (49 ) - (81 ) Amounts reclassified from AOCI (2) - 7 - 7 Net current period other comprehensive income (32 ) (42 ) - (74 ) March 31, 2020 $ (129 ) $ (54 ) $ 6 $ (177 ) (1) Refer to Note 16, Derivative Financial Instruments (2) |
REDEEMABLE PREFERRED STOCK
REDEEMABLE PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2020 | |
Redeemable Preferred Stock [Abstract] | |
REDEEMABLE PREFERRED STOCK | NOTE 19—REDEEMABLE PREFERRED STOCK On November 29, 2018, we completed a private placement of (1) 300,000 shares of 12% Redeemable Preferred Stock, par value $1.00 per share (the “Redeemable Preferred Stock”), and (2) Series A Warrants (the “Series A Warrants”) to purchase approximately 6.8 million shares of our common stock, with an initial exercise price per share of $0.01, for aggregate proceeds of $289.5 million, before payment of approximately $18 million of directly related issuance costs. On October 21, 2019, in connection with our entering into, among other agreements, the Superpriority Credit Agreement, we entered into a consent and waiver agreement (the “Consent and Waiver Agreement”) with the holders of the Redeemable Preferred Stock. Pursuant to the Consent and Waiver Agreement, we agreed to, among other things: (1) issue to the holders of the Redeemable Preferred Stock shares of Redeemable Preferred Stock in an aggregate amount equal to 3.0% of the Accreted Value; and (2) issue an additional number of Series A Warrants to purchase Common Stock with an initial exercise price per share of $0.01, subject to certain adjustments equal to the product of 1.5% times the total number of shares of Common Stock outstanding as of October 21, 2019. In a ddition, we agreed to increase the Dividend Rate and the PIK Dividend Rate to 14.0% per annum and 15.0% per annum, respectively, per share of Redeemable Preferred Stock. The Consent and Waiver Agreement allowed us to incur the indebtedness and other obligations pursuant to Tranche A under the Superpriority Credit Agreement. Additionally, on December 1, 2019, we entered into a second c onsent and waiver agreement, which allowed us to incur additional indebtedness under the Superpriority Credit Agreement. The provisions of the RSA and the Plan of Reorganization, discussed in Note 3, Reorganization As of March 31, 2020, the Redeemable Preferred Stock balance was $294 million, adjusted for accretion and PIK dividends |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 20—EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per common share. Three Months Ended March 31, 2020 2019 (In millions, except per share amounts) Net loss from continuing operations attributable to McDermott $ (1,358 ) $ (95 ) Net (loss) income from discontinued operations attributable to McDermott (14 ) 38 Net loss $ (1,372 ) $ (57 ) Less: Net income (loss) attributable to noncontrolling interests 6 (1 ) Net loss attributable to McDermott $ (1,378 ) $ (56 ) Dividends on redeemable preferred stock (3 ) (10 ) Accretion of redeemable preferred stock (1 ) (4 ) Net loss attributable to common stockholders $ (1,382 ) $ (70 ) Net (loss) income per share attributable to common stockholders Continuing operations Basic (7.09 ) (0.60 ) Diluted (7.09 ) (0.60 ) Discontinued operations Basic (0.07 ) 0.21 Diluted (0.07 ) 0.21 Shares used in the computation of net (loss) income per share Basic 193 181 Diluted 193 181 The effects of stock-based awards, warrants and redeemable preferred stock were not included in the calculation of diluted earnings per share for the three months ended March 31, 2020 and 2019 due to the net loss for the periods. Effects of the Chapter 11 Cases on the Common Stock — The provisions of the RSA and the Plan of Reorganization contemplate that the existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of our outstanding shares of common stock, will be entitled to no recovery relating to those equity interests. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 21—COMMITMENTS AND CONTINGENCIES Investigations and Litigation General —Due to the nature of our business, we and our affiliates are, from time to time, involved in litigation or subject to disputes, governmental investigations 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, premises liability claims and other claims. Based upon our prior experience, we do not expect that any of these other litigation proceedings, disputes, investigations 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 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. Project Arbitration Matters —We are in arbitration (governed by the arbitration rules of the International Chamber of Commerce) entitled Refineria de Cartagena S.A. v. Chicago Bridge & Iron Company N.V., et al., which was commenced on March 8, 2016 in connection with a large, cost reimbursable refinery construction project in Colombia completed by CB&I in 2015. Refineria de Cartagena, the customer on the project, is alleging that we are responsible for certain cost overruns, delays and consequential damages on the project. The customer is claiming total damages in excess of $4.5 billion. We have asserted a counterclaim against the customer for approximately $250 million. The parties have submitted final witness statements, expert reports and other filings. Hearings are expected to commence in the fourth quarter of 2020 and, after a multi-month hiatus, conclude in the second quarter of 2021. The venue for the arbitration hearings is expected to be in Washington, D.C. We do not believe a risk of material loss is probable related to this matter, and accordingly, our reserves for this matter were not significant as of March 31, 2020. While it is possible that a loss may be incurred, we are unable to estimate the range of potential loss, if any. In addition, we are in arbitration (governed by the arbitration rules of the United Nations Commission on International Trade Law) entitled CBI Constructors Pty & Kentz Pty Ltd and Chevron Australia Pty Ltd., Asbestos Litigation —We are a defendant in numerous lawsuits wherein plaintiffs allege exposure to asbestos at various locations. We review and defend each case on its own merits and make accruals based on the probability of loss and best estimates of potential loss. We do not believe any unresolved asserted claim will have a material adverse effect on our future results of operations, financial position or cash flow. With respect to unasserted asbestos claims, we cannot identify a population of potential claimants with sufficient certainty to determine the probability of loss or estimate future losses. We do not believe a risk of material loss is probable related to these matters, and, accordingly, our reserves were not significant as of March 31, 2020. While we continue to pursue recovery for recognized and unrecognized contingent losses through insurance, indemnification arrangements and other sources, we are unable to quantify the amount that we may recover because of the variability in coverage amounts, limitations and deductibles or the viability of carriers, with respect to our insurance policies for the years in question. Labor Litigation — A former employee of one of our subsidiaries commenced a class action lawsuit under the Fair Labor Standards ACT (“FLSA”) entitled Cantrell v. Lutech Resources, Inc. , (S.D. Texas 2017) Case No. 4:17-CV-2679 on or about September 5, 2017, alleging that he and his fellow class members were not paid one-and-one-half times their normal hourly wage rates for hours worked that exceeded 40 hours in a work week. Our subsidiary has yet to answer the allegations in the complaint, as agreed by the parties, in order to allow mediation to take place. The first mediation session commenced in October 2018, and a settlement was reached, with an agreed payment to the plaintiff of $10.75 million, to be paid in installments. The first installment of $2.5 million has been made with the following installments being stayed as a result of section 362(a) of the Bankruptcy Code. As a result of the settlement, a reserve of $8.25 million has been established as of March 31, 2020. Pre-Combination CB&I Securities Litigation —On March 2, 2017, a complaint was filed in the United States District Court for the Southern District of New York seeking class action status on behalf of purchasers of CB&I common stock and alleging damages on their behalf arising from alleged false and misleading statements made during the class period from October 30, 2013 to June 23, 2015. The case is captioned: In re Chicago Bridge & Iron Company N.V. Securities Litigation , No. 1:17-cv-01580-LGS (the “Securities Litigation”). The defendants in the case are: CB&I; a former chief executive officer of CB&I; a former chief financial officer of CB&I; and a former controller and chief accounting officer of CB&I. On June 14, 2017, the court named ALSAR Partnership Ltd. as lead plaintiff. On August 14, 2017, a consolidated amended complaint was filed alleging violations of Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 thereunder, arising out of alleged misrepresentations about CB&I’s accounting for the acquisition of The Shaw Group, CB&I’s accounting with respect to the two nuclear projects being constructed by The Shaw Group, and CB&I’s financial reporting and public statements with respect to those two projects. On May 24, 2018, the court denied defendants’ motion to dismiss. The parties have completed fact discovery and are currently engaged in expert discovery. On February 4, 2019, lead plaintiff ALSAR Partnership Ltd. and additional plaintiffs Iron Workers Local 40, 361, & 417 – Union Security Funds and Iron Workers Local 580 – Joint Funds moved for class certification and appointment as class representatives. On October 16, 2019, the court-appointed special master issued a report and recommendation regarding class certification and appointment of class representatives and class counsel, recommending that the court grant the plaintiffs’ motion. On April 6, 2020, the defendants filed a motion for permission to appeal the class certification ruling to the U.S. Court of Appeals. The U.S. District Court subsequently granted the motion. We are not able at this time to determine the likelihood of loss, if any, arising from this matter and, accordingly, no amounts have been accrued as of March 31, 2020. We believe the claims are without merit and intend to defend against them vigorously. On October 26, 2018, two actions were filed by individual plaintiffs based on allegations similar to those alleged in the Securities Litigation. On February 25, 2019, a third action was filed by an individual plaintiff based on similar allegations. All three actions were filed in the United States District Court for the Southern District of New York and are captioned Gotham Diversified Neutral Master Fund, LP, et al. v. Chicago Bridge & Iron Company N.V. et al. Appaloosa Investment L.P., et al., v. Chicago Bridge & Iron Company N.V., et al. CB Litigation Recovery I, LLC v. Chicago Bridge & Iron Company N.V., et al. On or about November 2, 2017, a complaint was filed in the District Court of Montgomery County, Texas by Daniel Cohen and associated individuals and corporations, alleging causes of action under both common and state law for alleged false and misleading statements related to CB&I’s acquisition of The Shaw Group in 2013, particularly with regard to two nuclear projects being constructed by Shaw in South Carolina and Georgia. The case is captioned Daniel Cohen, et al. v. Chicago Bridge & Iron Company, N.V., et al. , No. 17-10-12820. The other defendants are the same individual defendants as in the Securities Litigation described above. The plaintiffs alleged that the individual defendants made, or had authority over the content and method of communicating information to the public, including the alleged misstatements and omissions detailed in the complaint, resulting in a financial loss on shares of stock purchased by the plaintiffs. Discovery in this matter is proceeding. We are not able at this time to determine the likelihood of loss, if any, arising from this matter and, accordingly, no amounts have been accrued as of March 31, 2020 . We believe the claims are without merit and intend to defend against them vigorously. Post-Combination McDermott Securities Litigation— On November 15, 2018, a complaint was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of purchasers of McDermott common stock and alleging damages on their behalf arising from allegedly false and misleading statements made during the class period from January 24, 2018 to October 30, 2018. The case is captioned: Edwards v. McDermott International, Inc., et al. , No. 4:18-cv-04330. The defendants in the case are: McDermott; David Dickson, our president and chief executive officer; and Stuart Spence, our former chief financial officer. The plaintiff has alleged that the defendants made material misrepresentations and omissions about the integration of the CB&I business, certain CB&I projects and their fair values, and our business, prospects and operations. The plaintiff asserts claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder. On January 14, 2019, a related action was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of all shareholders of McDermott common stock as of April 4, 2018 who had the right to vote on the Combination, captioned: The Public Employees Retirement System of Mississippi v. McDermott International, Inc., et al. , No. 4:19-cv-00135. The plaintiff has alleged that the defendants (which include our chief executive officer and former chief financial officer) made material misrepresentations and omissions in the proxy statement we used in connection with the Combination. The plaintiff asserted claims under Section 14(a) and 20(a) of the Exchange Act. We filed a motion to consolidate the two actions, and the court granted that motion on February 22, 2019. The court appointed lead plaintiffs for both sets of claims on June 5, 2019. The plaintiffs subsequently filed amended pleadings to, among other things, add Chicago Bridge & Iron Company N.V. (“CB&I”) and CB&I’s former chief executive officer as additional defendants, and, on January 30, 2020, we filed motions to dismiss all of the claims. All proceedings in the actions are stayed pending the determination of the motions by the court. We are not able at this time to determine the likelihood of loss, if any, arising from these matters and, accordingly, no amounts have been accrued as of March 31, 2020. We believe the claims are without merit and we intend to defend against them vigorously. SEC and Federal Grand Jury Investigations —By letter dated July 26, 2019, together with accompanying subpoenas, the U.S. Securities and Exchange Commission (the “SEC”) notified us that it is conducting an investigation related to disclosures we made concerning the reporting of projected losses associated with the Cameron LNG project. We have been and intend to continue cooperating with the SEC in this investigation, including by producing documents requested by the SEC. Also, by letter dated February 25, 2020, together with an accompanying subpoena, the office of the United States Attorney for the Southern District of Texas within the U.S. Department of Justice notified us that a Federal Grand Jury is conducting a criminal investigation and requested various documents, including cost forecasts and other financial-related information, related to the Cameron LNG project. We intend to cooperate with the United States Attorney’s office and the Federal Grand Jury in this investigation, including by producing the documents that have been requested. Saudi Arabia Customs Audit —During the fourth quarter of 2019, McDermott Arabia Co. Ltd received a customs audit report from the General Directorate of Customs Audit department in Saudi Arabia, stating that additional custom duties are applicable on structures and platforms imported during the period from 2014 to 2019. The audit report claims that customs on imported structures and platforms of $64.7 million are owed to the Saudi Arabia Customs Authority. During the first quarter of 2020, McDermott Arabia Co. Ltd received communications from the Saudi Customs Authority that the matter is currently under consideration by the World Customs Organization, and until further update, McDermott Arabia Co. Ltd can continue importing offshore platforms under the customs exempt code. We do not believe a risk of material loss is probable related to this matter and, accordingly, no amounts have been accrued as of March 31, 2020. We believe the audit report is incorrect, and we intend to challenge the assessment vigorously. 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. In connection with the historical operation of our facilities, including those associated with acquired operations, substances which currently are or might be considered hazardous were used or disposed of at some sites that will or may require us to make expenditures for remediation. In addition, we have agreed to indemnify parties from whom we have purchased or to whom we have sold facilities for certain environmental liabilities arising from acts occurring before the dates those facilities were transferred. 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. We believe we are in compliance, in all material respects, with applicable environmental laws and regulations and maintain insurance coverage to mitigate our exposure to environmental liabilities. We do not anticipate we will incur material capital expenditures for environmental matters or for the investigation or remediation of environmental conditions during 2020 and 2021. As of March 31, 2020, we had no environmental reserve recorded. Asset Retirement Obligations (“ARO”) In March 2019, pursuant to a Memorandum of Understanding signed between Saudi Aramco and McDermott in 2017, we signed an agreement to enter into a long-term land lease agreement with Saudi Aramco, to establish a fabrication facility located within the new King Salman International Complex for Maritime Industries being developed by Saudi Aramco in Ras Al-Khair, Saudi Arabia. Construction activities are now in progress and the new facility is expected to be operational by 2022. In connection with the contemplated lease, the closure of our current fabrication facility in Dubai, United Arab Emirates, is expected to occur in 2030. ARO recorded as of March 31, 2020 was equal to the present value of the estimated costs to decommission the current fabrication facility and was not material. 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 March 31, 2020, we determined that we had approximately $233 million of potential liquidated damages exposure, based on performance under contracts to date, and included $13 million as a reduction in transaction prices related to such exposure. We believe we will be successful in obtaining schedule extensions or other customer-agreed changes that should resolve the potential for the liquidated damages where we have not made a reduction in transaction prices. However, we may not achieve relief on some or all of the issues involved and, as a result, could be subject to liquidated damages being imposed on us in the future. We have received notices from some of our subcontractors, suppliers and other business counterparties, and provided notices to several customers, regarding performance or delivery delays resulting from the COVID-19 pandemic and requesting available contractual relief. Most of our contracts with customers include force majeure |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 22—SEGMENT REPORTING We disclose the results of each of our reporting segments in accordance with ASC 280, Segment Reporting Following completion of the Combination, during the second quarter of 2018, we reorganized our operations into five In 2019, we performed a review of our business portfolio, which included businesses acquired in the Combination. Our review sought to determine if any portions of our business were non-core for purposes of our vertically integrated offering model. This review initially identified our pipe fabrication and industrial storage tank businesses as non-core. We completed the sale of Alloy Piping Products (“APP”), a portion of the pipe fabrication business, during the second quarter of 2019 and we are continuing to pursue the sale of the remaining portion of the pipe fabrication business. In the third quarter of 2019, we terminated the previously announced sale process for our industrial storage tank business, as we concluded that the net cash proceeds from the sale, if completed, would likely be significantly below initial expectations. As a result of our decision to retain this business, starting January 1, 2020, we changed the structure of our internal organization and formed a new reporting segment for our industrial storage tank business (“ Storage Solutions ”) . As discussed in Note 2, Basis of Presentation Discontinued Operations We now report financial results under five We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects c reporting of vessels, abrication facilities and engineering resources Intersegment sales are recorded at prices we generally establish by reference to similar transactions with unaffiliated customers and were not material during the three months ended March 31, 2020 or 2019 and are eliminated upon consolidation. Revenue and operating results from continuing operations for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 (In millions) Revenues: NCSA $ 834 $ 1,225 EARC 214 139 MENA 423 353 APAC 227 130 Storage Solutions 208 216 Total revenues $ 1,906 $ 2,063 Operating income (loss): Segment operating income (loss), prior to goodwill impairment: NCSA $ 15 $ 63 EARC (9 ) 6 MENA (19 ) 65 APAC 5 12 Storage Solutions 12 13 Total segment operating income, prior to goodwill impairment 4 159 Goodwill impairment (1) (91 ) - Total segment operating (loss) income (87 ) 159 Corporate (2) (964 ) (184 ) Total operating loss $ (1,051 ) $ (25 ) (1) In the first quarter of 2020, we recognized $91 million of goodwill impairment associated with our EARC reporting segment, as discussed in Note 8, Goodwill and Other Intangible Assets . (2) In the first quarter of 2020, in our Corporate results we recognized approximately $884 million impairment charge associated primarily with our vessels and fabrication yards, as discussed in Note 15, Fair Value Measurements. Depreciation and amortization expense and capital expenditures for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 (In millions) Depreciation and amortization: NCSA $ 8 $ 10 EARC 2 3 MENA 5 9 APAC 3 5 Storage Solutions 11 11 Corporate 15 20 Depreciation and amortization - continuing operations 44 58 Depreciation and amortization - discontinued operations 16 18 Total depreciation and amortization $ 60 $ 76 Capital expenditures (1) NCSA $ 1 $ 3 EARC - - MENA 5 3 APAC 3 5 Storage Solutions - 1 Corporate 16 6 Capital expenditures - continuing operations 25 18 Capital expenditures - discontinued operations - - Total capital expenditures $ 25 $ 18 (1) Segment assets for continuing operations and discontinued operations as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 (In millions) Segment assets (1) NCSA $ 1,657 $ 1,526 EARC 453 523 MENA 1,123 1,195 APAC 734 1,447 Storage Solutions 535 523 Corporate 1,347 1,044 Total assets - continuing operations $ 5,849 $ 6,258 Total assets - discontinued operations 2,451 2,479 Total assets $ 8,300 $ 8,737 (1) |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations McDermott International, Inc. (“McDermott,” “we” or “us”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a fully integrated provider of engineering, procurement, construction and installation (“EPCI”) solutions to the energy industry. We design and build end-to-end infrastructure solutions to transport and transform oil and gas into a variety of products. Our proprietary technologies, integrated expertise and comprehensive solutions are utilized for offshore, subsea, power, liquefied natural gas (“LNG”) and downstream energy projects around the world. Our customers include national, major integrated and other oil and gas companies as well as producers of petrochemicals and electric power, and we operate in most major energy-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. |
Organization | Organization On May 10, 2018, we completed our business combination with Chicago Bridge & Iron Company N.V. (“CB&I”) through a series of transactions (the “Combination”). Following completion of the Combination, during the second quarter of 2018, we reorganized our operations into five business segments, which represented our reporting segments and were: North, Central and South America (“NCSA”); Europe, Africa, Russia and Caspian (“EARC”); the Middle East and North Africa (“MENA”); Asia Pacific (“APAC”); and Technology. In 2019, we performed a review of our business portfolio, which included businesses acquired in the Combination. Our review sought to determine if any portions of our business were non-core for purposes of our vertically integrated offering model. This review initially identified our pipe fabrication and industrial storage tank businesses as non-core. W e completed the sale of , a portion of the pipe fabrication business, terminated the previously announced As a result of our decision to retain this business, starting January 1, 2020, we changed the structure of our internal organization and formed a new reporting segment for our industrial storage tank business (“Storage Solutions”). We now report financial results under five Basis of Presentation Discontinued Operations Previously reported financial information has been adjusted to reflect the above changes. See Note 22, Segment Reporting, for further discussion. |
Recent Developments Affecting Industry Conditions and Our Business | Recent Developments Affecting Industry Conditions and Our Business On March 11, 2020, the World Health Organization declared the ongoing coronavirus (COVID-19) outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has reached more than 200 countries We have experienced some resulting disruptions to our business operations, as the pandemic has continued to spread through most of our markets, including negative impact on our ongoing projects and the expected detrimental impacts on awards of new projects by our customers. We cannot predict the full impact that COVID-19 or the significant disruption and volatility currently being experienced in the oil and natural gas markets will have on numerous uncertainties. The ultimate impacts workforce availability, |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements (the “Financial Statements”) are unaudited and have been prepared 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 and are not necessarily indicative of results of operations for a full year. Therefore, they should be read in conjunction with the Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). The Financial Statements reflect all wholly owned subsidiaries and those entities we are required to consolidate. See the “Joint Venture and Consortium Arrangements” section of Note 2, Basis of Presentation and Significant Accounting Policies On January 21, 2020 (the “Petition Date”), McDermott and certain of its subsidiaries (collectively, the “Debtors”): (1) entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with certain of their lenders, letter of credit issuers and holders of the 10.625% senior notes due 2024 (the “Senior Notes”) issued by certain of the Debtors and guaranteed by McDermott and certain of the other Debtors (such lenders, letter of credit issuers and holders of the Senior Notes are referred to as the “Consenting Parties”); and (2) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to pursue a joint prepackaged Chapter 11 Plan of Reorganization of the Debtors (the “Plan of Reorganization”). The Chapter 11 cases are being jointly administered under the caption In re McDermott International, Inc. ASC 852 requires that the financial statements for periods subsequent to the filing of the Chapter 11 Cases distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “Reorganization items, net” on our Condensed Consolidated Statement of Operations (“Statement of Operations”) for the quarter ended March 31, 2020. In addition, prepetition unsecured or undersecured obligations that may be impacted by the bankruptcy reorganization process have been classified as “Liabilities subject to compromise” on our Condensed Consolidated Balance Sheet (“Balance Sheet”) as of March 31, 2020. These liabilities are reported at the amounts allowed or expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. In accordance with ASC 852, we anticipate we will be required to adopt fresh-start accounting upon our emergence from the Chapter 11 proceedings, becoming a new entity for financial reporting purposes (“successor”). In order to adopt fresh-start accounting, we will have to meet the following conditions: (1) holders of existing shares of the predecessor entity immediately before the effective date of the consummation of the Plan of Reorganization (the “Effective Date”) received, collectively, less than 50 percent of the voting shares of the successor entity and (2) the reorganization value of the successor is less than its postpetition liabilities and estimated allowed claims immediately before the Effective Date. As of March 31, 2020, we expect that these conditions will be met. See Note 3, Reorganization, |
Going Concern Policy | Going Concern The Financial Statements have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. While operating as debtors-in-possession under Chapter 11, we may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the Financial Statements. Further, the Plan of Reorganization and the adoption of the fresh-start accounting could materially change the amounts and classifications of assets and liabilities reported in these Financial Statements. The accompanying Financial Statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern. As a result of our financial condition, the defaults under our debt agreements and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists regarding our ability to continue as a going concern. We believe that, once we complete the Lummus Technology sale and successfully implement the Plan of Reorganization, among other factors, the currently existing substantial doubt regarding our ability to continue as a going concern would be alleviated. |
Discontinued Operations | Discontinued Operations The Plan of Reorganization requires that, on or prior to the Effective Date, the Debtors will complete the Lummus Technology sale (primarily represented by our Technology reporting segment). Under the terms of the Share and Asset Purchase Agreement for the sale transaction (the “SAPA”), the buyer party thereto agreed, subject to certain conditions, to acquire the Lummus Technology business for a purchase price of $2.725 billion, subject to certain adjustments. On February 24, 2020, the Bankruptcy Court approved the selection of the buyer and the contractual protections provided to the buyer under the SAPA, as well as the bidding procedures for the ultimate sale process. In connection with the entry of the Confirmation Order, the Bankruptcy Court approved the Lummus Technology sale. The sale is expected to be completed on or prior to the Effective Date. As of March 31, 2020, pursuant to the SAPA, the buyer has deposited $200 million in a third-party escrow account. We considered the operations of the Technology segment to be a discontinued operation in the first quarter of 2020, as the anticipated sale represents a strategic shift and will have a material effect on our operations and financial results. Operating results of the Technology reporting segment have been classified as a discontinued operation within the Statements of Operations for the three months ended March 31, 2020 and 2019. Further, the assets and liabilities of the Technology segment have been classified as assets and liabilities of discontinued operations within our March 31, 2020 and December 31, 2019 Balance Sheets, with all balances reported as current on our March 31, 2020 Balance Sheet. Cash flows of the Technology segment are not reported separately within our Condensed Consolidated Statement of Cash Flows (“Statement of Cash Flows”). Unless otherwise noted, the footnotes to the Financial Statements relate to our continuing operations. See Note 4, Discontinued Operations |
Use of Estimates and Judgments | Use of Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We believe the most significant estimates and judgments are associated with: • revenue recognition for our contracts, including estimating costs to complete each contract and the recognition of incentive fees and unapproved change orders and claims; • assessment of our ability to continue as a going concern; • estimation of the allowed claims associated with liabilities subject to compromise; • classification of all of our long-term debt obligations, including finance lease obligations, as current; • fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, goodwill and other intangible assets; • valuation of deferred tax assets and financial instruments; • the determination of liabilities related to loss contingencies, self-insurance programs and income taxes; • the determination of pension-related obligations; and • consolidation determinations with respect to our joint venture and consortium arrangements. Actual amounts may differ from those included in the Financial Statements if the underlying estimates and assumptions change in the future. |
Reclassifications | Reclassifications Certain prior-year balances have been reclassified to conform to the current year’s presentation. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance Financial Instruments —In June 2016, the FASB issued ASU 2016-13, . This ASU requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Effective January 1, 2020, we adopted ASU 2016-13, which amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial assets and off-balance-sheet credit exposures. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. Under the modified retrospective transition method, we recorded a cumulative effect adjustment of $7 million to opening Accumulated Deficit, primarily related to our Accounts receivable – trade and Contracts in Progress assets. The associated income tax impact was not material. The adoption of this ASU did not have a material impact on our Statement of Operations or Statement of Cash Flows for the three months ended March 31, 2020. See Note 7, — , for more information on our presentation of credit losses Consolidation —In October 2018, the FASB issued ASU No. 2018-17, . This ASU amends the guidance for determining whether a decision-making fee is a variable interest, which requires companies to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety. The ASU is effective for annual and interim periods beginning after December 15, 2019. We adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Financial Statements and related disclosures Collaborative Arrangements —In November 2018, the FASB issued ASU No. 2018-18, . This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In addition, unit-of-account guidance in Topic 808 was aligned with the guidance in Topic 606 (that is, a distinct good or service) when assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. This ASU is effective for interim and annual periods beginning after December 15, 2019. We adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Financial Statements and related disclosures. |
Accounting Guidance Issued But Not Adopted | Accounting Guidance Issued but Not Adopted as of March 31, 2020 Income Taxes —In December 2019, the FASB issued ASU 2019-12, (“ASU 2019-12”). This ASU simplifies the accounting for income taxes by removing exceptions: • to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income); • to the requirement to recognize a deferred tax liability for equity-method investments when a foreign subsidiary becomes an equity-method investment; • to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity - method investm ent becomes a subsidiary; and • to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, ASU 2019-12 does not require that an entity allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; however, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the applicable taxing authority. The standard does require that an entity: • recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; • evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; and • reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are evaluating the impact of the new guidance on our future disclosures. Defined Benefit Pension Plans —In August 2018, the FASB issued ASU No. 2018-14, — — — . This ASU eliminates, modifies and adds disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are evaluating the impact of the new guidance on our future disclosures. |
REORGANIZATION (Tables)
REORGANIZATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Reorganizations [Abstract] | |
Schedule of Reorganization Items | For the period ended March 31, 2020, reorganization items pertaining to continuing operations were $246 million and consisted of the following items: March 31, 2020 (In millions) Claims valuation adjustments $ 96 DIP Credit Facility fees 87 Professional fees and other 63 Total reorganization items, net $ 246 |
Schedule of Liabilities Subject to Compromise | At March 31, 2020, liabilities subject to compromise consisted of the following balances: March 31, 2020 (In millions) Term facility $ 2,220 10.625% Senior Notes 1,300 Revolving credit facility 801 Accrued and unpaid interest 114 Allowed claims on Term facility and Revolving credit facility 96 Interest rate derivative 47 Total liabilities subject to compromise $ 4,578 |
Schedule of Consolidated Financial Statements of Entities Included in Chapter 11 Cases | The followings are the consolidated financial statements of the entities included in the Chapter 11 Cases (all intercompany balances due between Debtor entities have been eliminated): McDERMOTT INTERNATIONAL, INC. DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three months ended, March 31, 2020 (In millions) Revenues $ 1,757 Costs and Expenses: Cost of operations 1,732 Other operating expenses, net 1,087 Total operating expenses, net 2,819 Operating loss (1,062 ) Other expense: Interest expense, net (58 ) Intercompany charges for interest 5 Reorganization items (246 ) Other non-operating expense, net (6 ) Total other expense, net (305 ) Loss before provision for income taxes (1,367 ) Income tax expense 6 Loss from continuing operations (1,373 ) Loss from discontinued operations (14 ) Net loss (1,387 ) Less: Net income attributable to noncontrolling interests 6 Net loss attributable to Debtor entities $ (1,393 ) McDERMOTT INTERNATIONAL , INC . DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 2020 (In millions) Assets Current assets: Cash and cash equivalents $ 990 Restricted cash and cash equivalents 397 Current assets of discontinued operations 2,451 Other current assets 2,015 Total current assets 5,853 Property, plant and equipment, net 1,171 Other non-current assets 1,695 Total assets $ 8,719 Liabilities, Mezzanine Equity and Stockholders' Equity Current liabilities: Debt $ 2,038 Current liabilities of discontinued operations 426 Advance billings on contracts, accounts payable, accrued and other current liabilities 3,149 Total current liabilities 5,613 Intercompany accounts payable 727 Other non-current liabilities 1,051 Total liabilities not subject to compromise 7,391 Liabilities subject to compromise 4,578 Mezzanine equity: Redeemable preferred stock 294 Debtor entities total McDermott stockholders' equity (3,551 ) Noncontrolling interest 7 Debtor entities total stockholders' equity (3,544 ) Debtor entities total liabilities and stockholders' equity $ 8,719 McDERMOTT INTERNATIONAL , INC . DEBTOR ENTITIES (DEBTOR IN POSSESSION) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three months ended March 31, 2020 (In millions) Cash flows from operating activities: Net loss $ (1,387 ) Adjustments to reconcile net loss to cash flows from operating activities: Reorganization items, net - Claims valuation adjustments 96 Reorganization items, net - DIP Credit Facility fees 87 Property, plant and equipment impairment 884 Goodwill and intangible assets impairment 94 Charges from parent of subsidiary 5 Other current and non-current assets and liabilities, net (465 ) Total cash used in operating activities (686 ) Cash flows from investing activities: Purchases of property, plant and equipment (25 ) Advances related to proportionately consolidated consortiums (57 ) Other investing activities (4 ) Total cash used in investing activities (86 ) Cash flows from financing activities: DIP Term Facility borrowings 1,200 DIP Credit Facility fees (87 ) Advances related to equity method joint ventures and proportionately consolidated consortiums 69 Other financing activities among subsidiaries (47 ) Other financing activities (5 ) Total cash provided by financing activities 1,130 Effect of exchange rate changes on cash, cash equivalents and restricted cash (3 ) Net Increase in cash, cash equivalents and restricted cash 355 Cash, cash equivalents and restricted cash at beginning of period 1,032 Cash, cash equivalents and restricted cash at end of period $ 1,387 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Carrying Values of Major Classes of Assets and Liabilities of Discontinued Operations Included in Balance Sheets and reflected within Statement of Operations | The carrying values of the major classes of assets and liabilities of the discontinued operations of March 31, 2020 December 31, 2019 (In millions) Assets Current assets: Cash and cash equivalents $ 11 $ 10 Restricted cash and cash equivalents 2 - Accounts receivabl e 148 144 Accounts receivable—other 4 6 Contracts in progress 92 92 Project-related intangible assets, net 13 15 Inventory 22 33 Other current assets 4 6 Property, plant and equipment, net 59 - Operating lease right-of-use assets 14 - Investments in unconsolidated affiliates 384 - Goodwill 1,137 - Other intangibles, net 561 - Total current assets of discontinued operations held for sale $ 2,451 $ 306 Property, plant and equipment, net - 62 Operating lease right-of-use assets - 15 Investments in unconsolidated affiliates - 381 Goodwill - 1,140 Other intangibles, net - 573 Other non-current assets - 2 Total assets of discontinued operations held for sale $ 2,451 $ 2,479 Liabilities Current liabilities: Lease obligations 5 5 Accounts payable 15 21 Advance billings on contracts 217 228 Long-term lease obligations 9 - Accrued and other liabilities 180 129 Total current liabilities of discontinued operations held for sale 426 383 Long-term lease obligations - 10 Other non-current liabilities - 66 Total liabilities of discontinued operations held for sale $ 426 $ 459 Accumulated other comprehensive loss $ (14 ) $ (11 ) Results of Operations —The results of discontinued operations of Lummus Technology , which have been reflected within discontinued operations in our Statements of Operations for the three months ended March 31, 2020 and 2019, were as follows: Three months ended March 31, 2020 2019 (In millions) Revenues $ 150 $ 148 Costs and Expenses: Cost of operations 90 89 Project intangibles and inventory-related amortization 2 4 Total cost of operations 92 93 Research and development expenses 7 6 Selling, general and administrative expenses 6 5 Other intangibles amortization 11 11 Total expenses 116 115 Income from investments in unconsolidated affiliates 5 8 Investment in unconsolidated affiliates-related amortization (2 ) (2 ) Operating income from discontinued operations 37 39 Interest expense, net (1) (26 ) (1 ) Reorganization items, net (2) (19 ) - (Loss) income from discontinued operations before provision for income taxes (8 ) 38 Income tax expense 6 - Net (loss) income from discontinued operations (14 ) 38 (1) Debt $11 (2) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Summary of RPOs, Attributable to Continuing Operations, by Segment | Our RPOs, attributable to continuing operations, by segment, were as follows: March 31, 2020 December 31, 2019 (Dollars in millions) NCSA $ 5,527 34 % $ 6,250 35 % EARC 2,830 17 % 3,089 17 % MENA 5,507 33 % 5,890 33 % APAC 1,230 8 % 1,450 8 % Storage Solutions 1,281 8 % 1,340 7 % Total $ 16,375 100 % $ 18,019 100 % |
Summary of RPOs Expected Revenue Recognition | Of the March 31, 2020 RPOs, we expect to recognize revenues as follows: 2020 2021 Thereafter (In millions) Total RPOs $ 5,854 $ 5,766 $ 4,755 |
Summary of Revenue by Product Offering, Contract Types and Revenue Recognition Methodology | Our revenue, attributable to continuing operations, by product offering, contract types and revenue recognition methodology was as follows: Three Months Ended March 31, 2020 2019 (In millions) Revenue by product offering: Offshore and subsea $ 821 $ 605 LNG 419 421 Downstream 522 714 Power 144 323 Total $ 1,906 $ 2,063 Revenue by contract type: Fixed price $ 1,572 $ 1,599 Reimbursable 117 286 Hybrid 145 109 Unit-basis and other 72 69 Total $ 1,906 $ 2,063 Revenue by recognition methodology: Over time $ 1,885 $ 2,043 At a point in time 21 20 Total $ 1,906 $ 2,063 Intercompany amounts have been eliminated in consolidation. |
ACCOUNTS RECEIVABLE-TRADE, NET
ACCOUNTS RECEIVABLE-TRADE, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Trade Receivable Balances | Our trade receivable balances at March 31, 2020 and December 31, 2019 included the following: March 31, 2020 December 31, 2019 (In millions) Contract receivables (1) $ 745 $ 823 Retainages 120 146 Less allowances (33 ) (27 ) Accounts receivable — $ 832 $ 942 ( 1 ) — |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill by Reporting Segment | The changes in the carrying amount of goodwill during the three months ended March 31, 2020 were as follows: EARC MENA Storage Solutions Total (In millions) Balance as of January 1, 2020 (1) $ 91 $ 47 $ 9 $ 147 Goodwill impairment (91 ) - - (91 ) Balance as of March 31, 2020 $ - $ 47 $ 9 $ 56 (1) As of January 1, 2020, we had approximately $3.5 billion of cumulative impairment charges recorded in conjunction with our impairment assessments performed during 2019 and 2018, as previously described in the 2019 Form 10-K. |
Schedule of Key Assumptions Used in Deriving Reporting Units Fair Value | Key assumptions used in deriving the reporting units’ fair values included the use of significant unobservable inputs, representative of a Level 3 fair value measurement, and included, Discount rate Compound annual growth rate Terminal growth rate EARC 35.5 % 41.3 % 2 % MENA 37.0 % 24.0 % 2 % Storage Solutions 18.5 % 39.7 % 2 % |
Schedule of Intangible Assets | Our other intangible assets associated with our reporting segments included in continuing operations as of March 31, 2020 and December 31, 2019, including the weighted-average useful lives as of March 31, 2020, were as follows: March 31, 2020 December 31, 2019 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In years) (In millions) Process technologies 10 $ 80 $ (15 ) $ 65 $ 80 $ (13 ) $ 67 Trade names 10 121 (26 ) 95 125 (22 ) 103 Customer relationships 5 14 (9 ) 5 14 (8 ) 6 Trademarks 10 4 (1 ) 3 4 (1 ) 3 Total (1) $ 219 $ (51 ) $ 168 $ 223 $ (44 ) $ 179 (1) Amortization expense is anticipated Our project-related intangibles as of March 31, 2020 and December 31, 2019, including the weighted-average useful lives as of March 31, 2020, were as follows: March 31, 2020 December 31, 2019 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In years) (In millions) Project-related intangible assets 3 $ 166 $ (139 ) $ 27 $ 166 $ (133 ) $ 33 Project-related intangible liabilities 2 (109 ) 101 (8 ) (109 ) 99 (10 ) Total (1) $ 57 $ (38 ) $ 19 $ 57 $ (34 ) $ 23 (1) |
JOINT VENTURE AND CONSORTIUM _2
JOINT VENTURE AND CONSORTIUM ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Summarized Balance Sheet Information for Proportionately Consolidated Consortiums | The following table presents summarized balance sheet information for our share of our proportionately consolidated consortiums: March 31, 2020 December 31, 2019 (In millions) Current assets (1) $ 593 $ 529 Non-current assets 9 6 Total assets $ 602 $ 535 Current liabilities $ 609 $ 671 (1 ) — |
Summarized Balance Sheet Information for Proportionately Consolidated Collaborative Arrangement | The following table presents summarized balance sheet information for our share of that proportionately consolidated collaborative arrangement: March 31, 2020 December 31, 2019 (In millions) Current assets $ 220 $ 180 Non-current assets 7 - Total assets $ 227 $ 180 Current liabilities $ 219 $ 175 |
Summarized Balance Sheet Information for Consolidated Joint Ventures | The following table presents summarized balance sheet information for our consolidated joint ventures, including other consolidated joint ventures that are not individually material to our financial results: March 31, 2020 December 31, 2019 (In millions) Current assets $ 42 $ 39 Non-current assets 16 16 Total assets $ 58 $ 55 Current liabilities $ 109 $ 120 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Instrument [Line Items] | |
Summary of Carrying Values Debt Obligations | The carrying values of our debt obligations are as follows: March 31, December 31, 2020 2019 (In millions) Debtor-in-Possession Term Facility $ 2,032 $ - New Term Facility - 800 Discount on New Term Facility (37 ) (54 ) Structured equipment financing 35 32 North Ocean 105 construction financing 8 8 Term Facility - 2,220 10.625% senior notes - 1,300 Revolving credit facility - 801 Debt $ 2,038 $ 5,107 |
Schedule of Uncommitted Bilateral Credit Facilities and Surety Bond Arrangements | Uncommitted Facilities —We are party to a number of short-term uncommitted bilateral credit facilities and surety bond arrangements (the “Uncommitted Facilities”) across several geographic regions, as follows: March 31, 2020 December 31, 2019 Uncommitted Line Capacity Utilized Uncommitted Line Capacity Utilized (In millions) Bank Guarantee and Bilateral Letter of Credit (1) $ 1,688 $ 1,098 $ 1,842 $ 1,293 Surety Bonds (2) 747 625 835 601 (1) Approximately $175 million of this capacity is available only upon provision of an equivalent amount of cash collateral. (2) Excludes approximately $272 million of surety bonds maintained on behalf of CB&I’s former Capital Services Operations, which were sold to CSVC Acquisition Corp (“CSVC”) in June 2017. We also continue to maintain guarantees on behalf of CB&I’s former Capital Services Operations business, and we are entitled to an indemnity from CSVC for the surety bonds and guarantees . |
DIP Credit Agreement [Member] | |
Debt Instrument [Line Items] | |
Schedule of Minimum Adjusted Earnings Before Interest Taxes Depreciation and Amortization | Test Period End Date Adjusted EBITDA (In millions) June 30, 2020 $ 230 September 30, 2020 410 December 31, 2020 640 |
Schedule of Maximum Project Charges | Test Period End Date Maximum Project Charges (In millions) December 31, 2019 $ 260 March 31, 2020 50 June 30, 2020 50 September 30, 2020 40 December 31, 2020 30 |
LEASE OBLIGATIONS (Tables)
LEASE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Leased Assets and Lease Liability Obligations | The following tables summarize our leased assets and lease liability obligations: March 31, 2020 December 31, 2019 Balance Sheet classification (In millions) Assets Operating lease assets Operating lease right-of-use assets $ 330 $ 349 Finance lease assets Property, plant and equipment, net 50 50 Total leased assets 380 399 Current liabilities Operating leases Current portion of long-term lease obligations 93 93 Finance leases (1) Finance lease obligation 45 47 Current lease obligations 138 140 Noncurrent liabilities Operating leases Long-term lease obligations 279 294 Total lease obligations $ 417 $ 434 (1) As a result of the debt compliance matters, we determined that the classification of our finance lease obligations was current and, accordingly, we recorded those obligations within Current Liabilities on the Balance Sheets as of March 31, 2020 and December 31, 2019. |
Schedule of Lease Cost | Our lease cost was as follows: Three months ended March 31, 2020 2019 Statements of Operations classification (In millions) Operating lease cost (1) SG&A expenses $ 11 $ 12 Operating lease cost (1) Cost of operations 22 24 Finance lease cost Amortization of leased assets Cost of operations - 2 Interest on lease liabilities Net interest expense 1 1 Net lease cost $ 34 $ 39 (1) Includes short-term leases and immaterial variable lease costs. |
PENSION AND POSTRETIREMENT BE_2
PENSION AND POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Contribution Information for Plans | The following table provides contribution information for our plans at March 31, 2020: U.S. Pension Plans Non-U.S. Pension Plans (In millions) Contributions made through March 31, 2020 $ - $ 6 Contributions expected for the remainder of 2020 1 7 Total contributions expected for 2020 $ 1 $ 13 |
Net Periodic Benefit Cost (Income) | The following table provides a breakdown of the components of the net periodic benefit cost (income) associated with our defined benefit pension plans of our continuing operations for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 (In millions) U.S. pension plans: Interest cost $ 4 $ 5 Expected return on plan assets (5 ) (4 ) Net periodic benefit cost (income) (1) $ (1 ) $ 1 Non-U.S. pension plans: Service cost $ 3 $ 3 Interest cost 3 4 Expected return on plan assets (5 ) (6 ) Net periodic benefit cost (1) $ 1 $ 1 (1) The components of net periodic benefit cost (income) other than the service cost component are included in Other non-operating (income) expense, net in our Statements of Operations. The service cost component is included in Cost of operations and SG&A in our Statements of Operations, along with other compensation costs rendered by the participating employees. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities Current [Abstract] | |
Summary of Accrued Liabilities | March 31, 2020 December 31, 2019 (In millions) Accrued contract costs $ 573 $ 690 Advances from equity method and proportionally consolidated joint ventures and consortiums (1) 115 124 Income taxes payable 66 56 Accrued interest payable 32 126 Other accrued liabilities (2) 516 534 Accrued liabilities $ 1,302 $ 1,530 (1) Joint Venture and Consortium Arrangements, (2) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on Recurring and Nonrecurring Basis | The following table presents the fair value of our financial instruments as of March 31, 2020 and December 31, 2019 that are (1) measured and reported at fair value in the Financial Statements on a recurring basis and (2) not measured at fair value on a recurring basis in the Financial Statements: March 31, 2020 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts (1) $ (94 ) (94 ) $ - $ (94 ) $ - Not measured at fair value on recurring basis Debt and finance lease obligations (2) (2,083 ) (1,956 ) - (1,885 ) (71 ) Liabilities subject to compromise (3) (4,578 ) (1,133 ) - (860 ) (273 ) December 31, 2019 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts (1) $ (75 ) (75 ) $ - $ (75 ) $ - Embedded derivatives (4) (28 ) (28 ) - - (28 ) Not measured at fair value on recurring basis Debt and finance lease obligations (2) (4,353 ) (2,362 ) - (2,275 ) (87 ) (1) 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. This approach discounts future cash flows based on current market expectations and credit risk. (2) NO 105 (3) Plan of Reorganization, liabilities subject to compromise will be impaired at the Effective Date. See Note 3, Reorganization , for further discussion. ( 4 ) Debt inputs to the fair value measurement of the embedded derivatives are unobservable and reflect our estimates of forward yield. The fair value of the embedded derivative as of March 31, 2020 was not material. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value by Underlying Risk and Balance Sheet Classification | The following table presents the total fair value of the derivatives by underlying risk and balance sheet classification: March 31, 2020 December 31, 2019 Derivatives designated as cash flow hedges Derivatives not designated as cash flow hedges Derivatives designated as cash flow hedges Derivatives not designated as cash flow hedges (In millions) Other current assets $ - $ 1 $ 3 $ 1 Other non-current assets - - 1 - Total derivatives asset $ - $ 1 $ 4 $ 1 Accrued liabilities $ 22 $ 41 $ 10 $ 68 Other non-current liabilities 32 - 2 - Total derivatives liability $ 54 $ 41 $ 12 $ 68 |
Schedule of Total Value by Underlying Risk Recognized in Other Comprehensive Income and Reclassified from AOCI to Statement of Operations | The following table presents the total value, by underlying risk, recognized in other comprehensive income and reclassified from AOCI to our Statements of Operations, in connection with derivatives: Three Months Ended March 31, 2020 2019 (In millions) Loss recognized in other comprehensive income (loss) Foreign exchange hedges $ (49 ) $ (7 ) Interest rate hedges - (15 ) Gain (loss) recognized on derivatives designated as cash flow hedges Foreign exchange hedges Revenue (1 ) 1 Cost of operations (3 ) 1 Interest rate hedges Interest expense - 1 Gain (loss) recognized on derivatives not designated as cash flow hedges Foreign exchange hedges Revenue - 1 Cost of operations (2 ) - Interest rate hedges Interest expense (20 ) - |
STOCKHOLDERS' EQUITY AND EQUI_2
STOCKHOLDERS' EQUITY AND EQUITY-BASED INCENTIVE PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Changes in the Number of Shares Outstanding and Treasury Shares Held by the Company | Shares Outstanding and Treasury Shares ― The changes in the number of shares outstanding and treasury shares held by us are as follows (in millions): Three Months Ended March 31, 2020 2019 Shares outstanding Beginning balance 193 181 Common stock issued - 2 Purchase of common stock - (1 ) Ending balance 193 182 Shares held as Treasury shares Beginning balance 3 3 Purchase of common stock - 1 Retirement of common stock - (1 ) Ending balance 3 3 Ordinary shares issued at the end of the period (1) 196 184 (1) |
Components of Accumulated Other Comprehensive Income (Loss) Included in Stockholders' Equity | The components of AOCI included in stockholders’ equity are as follows: March 31, 2020 December 31, 2019 (In millions) Foreign currency translation adjustments ("CTA") $ (129 ) $ (97 ) Net unrealized loss on derivative financial instruments (54 ) (12 ) Defined benefit pension and other postretirement plans 6 6 Accumulated other comprehensive loss $ (177 ) $ (103 ) |
Reclassifications [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Components of Accumulated Other Comprehensive Income (Loss) Included in Stockholders' Equity | The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated: Foreign currency translation adjustments Net unrealized loss on derivative financial instruments (1) Defined benefit pension and other postretirement plans TOTAL (In millions) December 31, 2018 $ (73 ) $ (40 ) $ 6 $ (107 ) Other comprehensive income before reclassification (39 ) (22 ) - (61 ) Amounts reclassified from AOCI (2) - 3 - 3 Net current period other comprehensive income (39 ) (19 ) - (58 ) March 31, 2019 $ (112 ) $ (59 ) $ 6 $ (165 ) December 31, 2019 (97 ) (12 ) 6 (103 ) Other comprehensive income before reclassification (32 ) (49 ) - (81 ) Amounts reclassified from AOCI (2) - 7 - 7 Net current period other comprehensive income (32 ) (42 ) - (74 ) March 31, 2020 $ (129 ) $ (54 ) $ 6 $ (177 ) (1) Refer to Note 16, Derivative Financial Instruments (2) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 (In millions, except per share amounts) Net loss from continuing operations attributable to McDermott $ (1,358 ) $ (95 ) Net (loss) income from discontinued operations attributable to McDermott (14 ) 38 Net loss $ (1,372 ) $ (57 ) Less: Net income (loss) attributable to noncontrolling interests 6 (1 ) Net loss attributable to McDermott $ (1,378 ) $ (56 ) Dividends on redeemable preferred stock (3 ) (10 ) Accretion of redeemable preferred stock (1 ) (4 ) Net loss attributable to common stockholders $ (1,382 ) $ (70 ) Net (loss) income per share attributable to common stockholders Continuing operations Basic (7.09 ) (0.60 ) Diluted (7.09 ) (0.60 ) Discontinued operations Basic (0.07 ) 0.21 Diluted (0.07 ) 0.21 Shares used in the computation of net (loss) income per share Basic 193 181 Diluted 193 181 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Information by Segment | Revenue and operating results from continuing operations for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 (In millions) Revenues: NCSA $ 834 $ 1,225 EARC 214 139 MENA 423 353 APAC 227 130 Storage Solutions 208 216 Total revenues $ 1,906 $ 2,063 Operating income (loss): Segment operating income (loss), prior to goodwill impairment: NCSA $ 15 $ 63 EARC (9 ) 6 MENA (19 ) 65 APAC 5 12 Storage Solutions 12 13 Total segment operating income, prior to goodwill impairment 4 159 Goodwill impairment (1) (91 ) - Total segment operating (loss) income (87 ) 159 Corporate (2) (964 ) (184 ) Total operating loss $ (1,051 ) $ (25 ) (1) In the first quarter of 2020, we recognized $91 million of goodwill impairment associated with our EARC reporting segment, as discussed in Note 8, Goodwill and Other Intangible Assets . (2) In the first quarter of 2020, in our Corporate results we recognized approximately $884 million impairment charge associated primarily with our vessels and fabrication yards, as discussed in Note 15, Fair Value Measurements. Depreciation and amortization expense and capital expenditures for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 (In millions) Depreciation and amortization: NCSA $ 8 $ 10 EARC 2 3 MENA 5 9 APAC 3 5 Storage Solutions 11 11 Corporate 15 20 Depreciation and amortization - continuing operations 44 58 Depreciation and amortization - discontinued operations 16 18 Total depreciation and amortization $ 60 $ 76 Capital expenditures (1) NCSA $ 1 $ 3 EARC - - MENA 5 3 APAC 3 5 Storage Solutions - 1 Corporate 16 6 Capital expenditures - continuing operations 25 18 Capital expenditures - discontinued operations - - Total capital expenditures $ 25 $ 18 (1) Segment assets for continuing operations and discontinued operations as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 (In millions) Segment assets (1) NCSA $ 1,657 $ 1,526 EARC 453 523 MENA 1,123 1,195 APAC 734 1,447 Storage Solutions 535 523 Corporate 1,347 1,044 Total assets - continuing operations $ 5,849 $ 6,258 Total assets - discontinued operations 2,451 2,479 Total assets $ 8,300 $ 8,737 (1) |
Nature of Operations and Orga_2
Nature of Operations and Organization - Additional Information (Detail) - Segment | 3 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Number of operating groups, which represent our reportable segments | 5 | 5 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | Jan. 21, 2020 | Apr. 18, 2018 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Cumulative effect of new accounting principle in period of adoption | $ (7) | ||||
Accumulated Deficit | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Cumulative effect of new accounting principle in period of adoption | $ (7) | ||||
Accumulated Deficit | Accounting Standards Update 2016-13 [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Cumulative effect of new accounting principle in period of adoption | $ (7) | ||||
Share and asset purchase agreement [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Amount paid to acquire bid | $ 2,725 | ||||
Deposited in third-party escrow account | $ 200 | ||||
Maximum [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Percent of voting shares of successor entity received by predecessor holders | 50.00% | ||||
Senior Notes [Member] | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Debt instrument interest rate | 10.625% | 10.625% | |||
Debt Instrument maturity year | 2024 |
Reorganization - Additional Inf
Reorganization - Additional Information (Detail) - USD ($) | Feb. 07, 2020 | Mar. 31, 2020 | Feb. 26, 2020 | Jan. 23, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | [1] | |
Reorganization [Line Items] | ||||||||
Percentage of reorganized for equitization of funded debt held by senior secured term lenders. | 94.00% | |||||||
Recovery to the holders of the senior notes, percentage of equity of reorganized | 6.00% | |||||||
Percentage of new common equity interests | 6.00% | |||||||
Letters of credit outstanding | $ 194,000,000 | |||||||
Common stock, shares issued | 196,000,000 | [1] | 196,000,000 | 184,000,000 | ||||
Reorganization items | $ 246,000,000 | |||||||
Contractual interest expense | 27,000,000 | |||||||
Term Loan Facility [Member] | Tranche D [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Line of credit facility available for capital | 44,000,000 | |||||||
Debtor in Possession [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Reorganization items | 246,000,000 | |||||||
DIP Credit Facility fees | 87,000,000 | |||||||
DIP Credit Facility professional fees | 58,000,000 | |||||||
Term Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Liabilities subject to compromise allowed claims | 72,000,000 | |||||||
Prepetition Secured Letters of Credit [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Available capacity under credit facility | 50,000,000 | |||||||
Revolving Credit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Liabilities subject to compromise allowed claims | 24,000,000 | |||||||
Minimum [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Cash balances | $ 820,000,000 | |||||||
Maximum [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Projected to receive, percentage of claim | 100.00% | |||||||
Lummus Technology [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount paid to acquire bid | $ 2,725,000,000 | |||||||
Incremental costs included in reorganization items | 19,000,000 | |||||||
Lummus Technology [Member] | Debtors [Member] | Minimum [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Cash balances | 820,000,000 | |||||||
DIP Credit Agreement [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Available capacity under credit facility | 2,810,000,000 | |||||||
DIP Credit Agreement [Member] | Term Loan Exit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letter of credit / term loan facility | 500,000,000 | |||||||
DIP Credit Agreement [Member] | Term Loan Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Available capacity under credit facility | 2,065,000,000 | |||||||
Line of credit facility available for capital | 800,000,000 | |||||||
Line of credit facility accrued interest and fee | 21,000,000 | |||||||
DIP Credit Agreement [Member] | Term Loan Facility [Member] | Tranche A [Member] | Available at Closing [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Line of credit facility available for capital | 550,000,000 | $ 550,000,000 | ||||||
DIP Credit Agreement [Member] | Term Loan Facility [Member] | Tranche B [Member] | Available upon Entry of Final DIP Order [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Line of credit facility available for capital | 650,000,000 | $ 650,000,000 | ||||||
DIP Credit Agreement [Member] | Term Loan Facility [Member] | Tranche C [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Line of credit facility available for capital | 11,000,000 | |||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letters of credit outstanding | 743,000,000,000 | |||||||
Commitments under LC exit facilities and cash secured LC exit facility | 2,400,000 | |||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | Tranche A [Member] | Available at Closing [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letters of credit outstanding | 300,000,000 | $ 300,000,000 | ||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | Tranche B [Member] | Available upon Entry of Final DIP Order [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letters of credit outstanding | 243,000,000 | $ 243,000,000 | ||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | Tranche C [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letters of credit outstanding | 200,000,000 | |||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | Tranche D [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letters of credit outstanding | 743,000,000 | |||||||
DIP Credit Agreement [Member] | Letter of Credit Facility [Member] | Super Senior Exit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letter of credit / term loan facility | 743,000,000 | |||||||
DIP Credit Agreement [Member] | Maximum [Member] | Letter of Credit Facility [Member] | Senior LC Exit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letter of credit / term loan facility | 1,326,000 | |||||||
DIP Credit Agreement [Member] | Maximum [Member] | Letter of Credit Facility [Member] | Cash Secured LC Exit Facility [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Letter of credit / term loan facility | 371,000,000 | |||||||
Share and asset purchase agreement [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount paid to acquire bid | $ 2,725,000,000 | |||||||
Restructuring Support Agreement [Member] | Rights Offering [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Subscriptions | $ 0 | |||||||
Common stock, shares issued | 0 | |||||||
Rights offering expiration date | Feb. 19, 2020 | |||||||
[1] |
Reorganization - Schedule of Re
Reorganization - Schedule of Reorganization Items (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Reorganization [Line Items] | |
Total reorganization items, net | $ 246 |
Debtor in Possession [Member] | |
Reorganization [Line Items] | |
Claims valuation adjustments | 96 |
DIP Credit Facility fees | 87 |
Professional fees and other | 63 |
Total reorganization items, net | $ 246 |
Reorganization - Schedule of Li
Reorganization - Schedule of Liabilities Subject to Compromise (Detail) $ in Millions | Mar. 31, 2020USD ($) |
Reorganization [Line Items] | |
Total liabilities subject to compromise | $ 4,578 |
Debtor in Possession [Member] | |
Reorganization [Line Items] | |
Allowed claims on Term facility and Revolving credit facility | 96 |
Interest rate derivative | 47 |
Total liabilities subject to compromise | 4,578 |
Debtor in Possession [Member] | Term Facility [Member] | |
Reorganization [Line Items] | |
Debt, accrued and unpaid interest | 2,220 |
Debtor in Possession [Member] | 10.625% Senior Notes [Member] | |
Reorganization [Line Items] | |
Debt, accrued and unpaid interest | 1,300 |
Debtor in Possession [Member] | Accrued and Unpaid Interest [Member] | |
Reorganization [Line Items] | |
Debt, accrued and unpaid interest | 114 |
Debtor in Possession [Member] | Revolving Credit Facility [Member] | |
Reorganization [Line Items] | |
Debt, accrued and unpaid interest | $ 801 |
Reorganization - Schedule of Co
Reorganization - Schedule of Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reorganization [Line Items] | ||
Revenues | $ 1,906 | $ 2,063 |
Costs and Expenses: | ||
Cost of operations | 1,853 | 1,928 |
Total expenses | 2,955 | 2,087 |
Operating loss | (1,051) | (25) |
Other expense: | ||
Interest expense, net | (56) | (92) |
Reorganization items, net | (246) | |
Other non-operating income, net | 3 | 1 |
Total other expense, net | (299) | (91) |
Loss from continuing operations before provision for income taxes | (1,350) | (116) |
Income tax expense (benefit) | 8 | (21) |
Net loss from continuing operations | (1,358) | (95) |
Net (loss) income from discontinued operations | (14) | 38 |
Net loss | (1,372) | (57) |
Less: Net income (loss) attributable to noncontrolling interests | 6 | (1) |
Net loss attributable to McDermott | (1,378) | $ (56) |
Debtor in Possession [Member] | ||
Reorganization [Line Items] | ||
Revenues | 1,757 | |
Costs and Expenses: | ||
Cost of operations | 1,732 | |
Other operating expenses, net | 1,087 | |
Total expenses | 2,819 | |
Operating loss | (1,062) | |
Other expense: | ||
Interest expense, net | (58) | |
Intercompany charges for interest | 5 | |
Reorganization items, net | (246) | |
Other non-operating income, net | (6) | |
Total other expense, net | (305) | |
Loss from continuing operations before provision for income taxes | (1,367) | |
Income tax expense (benefit) | 6 | |
Net loss from continuing operations | (1,373) | |
Net (loss) income from discontinued operations | (14) | |
Net loss | (1,387) | |
Less: Net income (loss) attributable to noncontrolling interests | 6 | |
Net loss attributable to McDermott | $ (1,393) |
Reorganization - Schedule of _2
Reorganization - Schedule of Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 1,177 | $ 790 | ||
Restricted cash and cash equivalents | 397 | 393 | ||
Current assets of discontinued operations held for sale | 2,451 | 306 | ||
Other current assets | 192 | 210 | ||
Total current assets | 6,241 | 3,555 | ||
Property, plant and equipment, net | 1,224 | 2,066 | ||
Other non-current assets | 175 | 171 | ||
Total assets | 8,300 | 8,737 | ||
Current liabilities: | ||||
Debt | 2,038 | 5,107 | ||
Current liabilities of discontinued operations held for sale | 426 | 383 | ||
Total current liabilities | 5,885 | 9,444 | ||
Other non-current liabilities | 804 | 717 | ||
Total liabilities not subject to compromise | 7,023 | 10,590 | ||
Liabilities subject to compromise | 4,578 | |||
Mezzanine equity: Redeemable preferred stock | 294 | 290 | ||
Debtor entities total McDermott stockholders' equity | (3,602) | (2,143) | ||
Noncontrolling interest | 7 | |||
Total stockholders' equity | (3,595) | (2,143) | $ 675 | $ 823 |
Total liabilities and stockholders' equity | 8,300 | $ 8,737 | ||
Debtor in Possession [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 990 | |||
Restricted cash and cash equivalents | 397 | |||
Current assets of discontinued operations held for sale | 2,451 | |||
Other current assets | 2,015 | |||
Total current assets | 5,853 | |||
Property, plant and equipment, net | 1,171 | |||
Other non-current assets | 1,695 | |||
Total assets | 8,719 | |||
Current liabilities: | ||||
Debt | 2,038 | |||
Current liabilities of discontinued operations held for sale | 426 | |||
Advance billings on contracts, accounts payable, accrued and other current liabilities | 3,149 | |||
Total current liabilities | 5,613 | |||
Intercompany accounts payable | 727 | |||
Other non-current liabilities | 1,051 | |||
Total liabilities not subject to compromise | 7,391 | |||
Liabilities subject to compromise | 4,578 | |||
Mezzanine equity: Redeemable preferred stock | 294 | |||
Debtor entities total McDermott stockholders' equity | (3,551) | |||
Noncontrolling interest | 7 | |||
Total stockholders' equity | (3,544) | |||
Total liabilities and stockholders' equity | $ 8,719 |
Reorganization - Schedule of _3
Reorganization - Schedule of Condensed Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Cash flows from operating activities: | |||
Net loss | $ (1,372) | $ (57) | |
Adjustments to reconcile net loss to cash flows from operating activities: | |||
Property, plant and equipment impairment | 884 | ||
Total cash used in operating activities | (695) | (244) | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | [1] | (25) | (18) |
Advances related to proportionately consolidated consortiums | (57) | (114) | |
Total cash used in investing activities | (85) | (133) | |
Cash flows from financing activities: | |||
DIP Term Facility borrowings | 1,200 | ||
DIP Credit Facility fees | (87) | ||
Advances related to equity method joint ventures and proportionately consolidated consortiums | 69 | 116 | |
Total cash provided by financing activities | 1,177 | 277 | |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (3) | (6) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 394 | (106) | |
Cash, cash equivalents and restricted cash at beginning of period | 1,193 | 845 | |
Cash, cash equivalents and restricted cash at end of period | 1,587 | $ 739 | |
Debtor in Possession [Member] | |||
Cash flows from operating activities: | |||
Net loss | (1,387) | ||
Adjustments to reconcile net loss to cash flows from operating activities: | |||
Claims valuation adjustments | 96 | ||
DIP Credit Facility fees | 87 | ||
Property, plant and equipment impairment | 884 | ||
Goodwill and intangible assets impairment | 94 | ||
Charges from parent of subsidiary | 5 | ||
Other current and non-current assets and liabilities, net | (465) | ||
Total cash used in operating activities | (686) | ||
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (25) | ||
Advances related to proportionately consolidated consortiums | (57) | ||
Other investing activities | (4) | ||
Total cash used in investing activities | (86) | ||
Cash flows from financing activities: | |||
DIP Term Facility borrowings | 1,200 | ||
DIP Credit Facility fees | (87) | ||
Advances related to equity method joint ventures and proportionately consolidated consortiums | 69 | ||
Other financing activities among subsidiaries | (47) | ||
Other financing activities | (5) | ||
Total cash provided by financing activities | 1,130 | ||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (3) | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 355 | ||
Cash, cash equivalents and restricted cash at beginning of period | 1,032 | ||
Cash, cash equivalents and restricted cash at end of period | $ 1,387 | ||
[1] |
Discontinued Operations - Summa
Discontinued Operations - Summary of Carrying Values of Major Classes of Assets and Liabilities of Discontinued Operations (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Total current assets of discontinued operations held for sale | $ 2,451 | $ 306 |
Total assets of discontinued operations held for sale | 2,451 | 2,479 |
Current liabilities: | ||
Total current liabilities of discontinued operations held for sale | 426 | 383 |
Accumulated other comprehensive loss | (177) | (103) |
Lummus Technology [Member] | Disposed of by Sale [Member] | ||
Current assets: | ||
Cash and cash equivalents | 11 | 10 |
Restricted cash and cash equivalents | 2 | |
Accounts receivable—trade, net | 148 | 144 |
Accounts receivable—other | 4 | 6 |
Contracts in progress | 92 | 92 |
Project-related intangible assets, net | 13 | 15 |
Inventory | 22 | 33 |
Other current assets | 4 | 6 |
Property, plant and equipment, net | 59 | |
Operating lease right-of-use assets | 14 | |
Investments in unconsolidated affiliates | 384 | |
Goodwill | 1,137 | |
Other intangibles, net | 561 | |
Total current assets of discontinued operations held for sale | 2,451 | 306 |
Property, plant and equipment, net | 62 | |
Operating lease right-of-use assets | 15 | |
Investments in unconsolidated affiliates | 381 | |
Goodwill | 1,140 | |
Other intangibles, net | 573 | |
Other non-current assets | 2 | |
Total assets of discontinued operations held for sale | 2,451 | 2,479 |
Current liabilities: | ||
Lease obligations | 5 | 5 |
Accounts payable | 15 | 21 |
Advance billings on contracts | 217 | 228 |
Long-term lease obligations | 9 | |
Accrued and other liabilities | 180 | 129 |
Total current liabilities of discontinued operations held for sale | 426 | 383 |
Long-term lease obligations | 10 | |
Other non-current liabilities | 66 | |
Total liabilities of discontinued operations held for sale | 426 | 459 |
Accumulated other comprehensive loss | $ (14) | $ (11) |
Discontinued Operations - Resul
Discontinued Operations - Results of Discontinued Operations in our Statement of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Costs and Expenses: | |||
Net (loss) income from discontinued operations | $ (14) | $ 38 | |
Lummus Technology [Member] | Disposed of by Sale [Member] | |||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||
Revenues | 150 | 148 | |
Costs and Expenses: | |||
Cost of operations | 90 | 89 | |
Project intangibles and inventory-related amortization | 2 | 4 | |
Total cost of operations | 92 | 93 | |
Research and development expenses | 7 | 6 | |
Selling, general and administrative expenses | 6 | 5 | |
Other intangibles amortization | 11 | 11 | |
Total expenses | 116 | 115 | |
Income from investments in unconsolidated affiliates | 5 | 8 | |
Investment in unconsolidated affiliates-related amortization | (2) | (2) | |
Operating income from discontinued operations | 37 | 39 | |
Interest expense, net | [1] | (26) | (1) |
Reorganization items, net | [2] | (19) | |
(Loss) income from discontinued operations before provision for income taxes | (8) | 38 | |
Income tax expense | 6 | ||
Net (loss) income from discontinued operations | $ (14) | $ 38 | |
[1] | Debt $11 | ||
[2] |
Discontinued Operations - Res_2
Discontinued Operations - Results of Discontinued Operations in our Statement of Operations (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 21, 2019 | ||
Superpriority Credit Agreement [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Re measurement of embedded derivative liability | $ 37 | $ 28 | $ 60 | ||
Lummus Technology [Member] | Disposed of by Sale [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Interest expense, net | [1] | 26 | $ 1 | ||
Lummus Technology [Member] | Disposed of by Sale [Member] | DIP Credit Agreement [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Interest expense, net | 26 | ||||
Lummus Technology [Member] | Disposed of by Sale [Member] | Superpriority Credit Agreement [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Non-cash charge included in interest expense | 11 | ||||
Interest expense related to amortization of discount offset | 17 | ||||
Re measurement of embedded derivative liability | $ 28 | ||||
[1] | Debt $11 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lummus Technology [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Cash flows provided by operating activities for discontinued operations | $ 31 | $ 54 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of RPOs, Attributable to Continuing Operations, by Segment (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 16,375 | $ 18,019 |
Remaining performance obligations, Percentage | 100.00% | 100.00% |
NCSA [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 5,527 | $ 6,250 |
Remaining performance obligations, Percentage | 34.00% | 35.00% |
EARC [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 2,830 | $ 3,089 |
Remaining performance obligations, Percentage | 17.00% | 17.00% |
MENA [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 5,507 | $ 5,890 |
Remaining performance obligations, Percentage | 33.00% | 33.00% |
APAC [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 1,230 | $ 1,450 |
Remaining performance obligations, Percentage | 8.00% | 8.00% |
Storage Solutions [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations, Total | $ 1,281 | $ 1,340 |
Remaining performance obligations, Percentage | 8.00% | 7.00% |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of RPOs Expected Revenue Recognition (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Total RPOs | $ 16,375 | $ 18,019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-04-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Total RPOs | $ 5,854 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-04-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Total RPOs | $ 5,766 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-04-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Total RPOs | $ 4,755 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Revenue, remaining performance obligations | $ 16,375 | $ 18,019 | |
Revenues recognized due to changes in transaction price | 1,906 | $ 2,063 | |
Advance billings on contracts | 663 | ||
Unapproved change orders and claims | 170 | 231 | |
Unapproved change orders and claims in our RPO balance | 65 | 60 | |
Incentives amount included in transaction prices | 312 | 218 | |
Incentives amount included in our RPO balance | 18 | 28 | |
Incentives collected | 165 | ||
Provisions for estimated losses | 131 | 124 | |
Effect of changes in estimated project cost on operating results | 150 | ||
COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | 79 | ||
NCSA [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Revenue, remaining performance obligations | 5,527 | 6,250 | |
Revenues recognized due to changes in transaction price | 2 | 22 | |
Effect of changes in estimated project cost on operating results | 115 | 24 | |
NCSA [Member] | COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | 39 | ||
NCSA [Member] | Cameron Liquefied Natural Gas Project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | $ 20 | ||
Percentage of complete acquired on post combination basis | 94.00% | ||
Percentage of complete acquired on pre combination basis | 98.00% | ||
Effect of changes in estimated project cost on operating results | $ 100 | ||
Revenue recognized achievement of progress milestones | 12 | ||
NCSA [Member] | Freeport LNG Trains 1 and 2 Project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | $ 4 | ||
Percentage of complete acquired on post combination basis | 98.60% | ||
Percentage of complete acquired on pre combination basis | 99.60% | ||
Effect of changes in estimated project cost on operating results | $ 13 | ||
NCSA [Member] | Total Ethane Cracker Project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | 8 | ||
Effect of changes in estimated project cost on operating results | $ 47 | ||
Percentage of completion | 86.00% | ||
NCSA [Member] | Rota 3 pipeline project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | $ 20 | ||
Percentage of completion | 75.00% | ||
Effect in estimated project cost | $ 8 | ||
Effect of estimated project costs, changes in cost estimates | 6 | ||
Effect of estimated project costs, foreign exchange losses | $ 2 | ||
NCSA [Member] | Asheville power plant project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Percentage of completion | 99.00% | ||
NCSA [Member] | Line 1 and Line 10 project for Pemex [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Percentage of completion | 99.00% | ||
EARC [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Revenue, remaining performance obligations | $ 2,830 | 3,089 | |
Effect of changes in estimated project cost on operating results | 4 | ||
EARC [Member] | COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | 11 | ||
EARC [Member] | Total Tyra Redevelopment Project | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | 19 | ||
Effect of changes in estimated project cost on operating results | $ 11 | ||
Percentage of completion | 62.00% | ||
EARC [Member] | Total Tyra Redevelopment Project | COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | $ 9 | ||
APAC [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Revenue, remaining performance obligations | 1,230 | 1,450 | |
Effect of changes in estimated project cost on operating results | $ 6 | ||
APAC [Member] | COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | 12 | ||
APAC [Member] | Reliance subsea field development project [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Provisions for estimated losses | 11 | ||
Effect of changes in estimated project cost on operating results | $ 7 | ||
Percentage of completion | 74.00% | ||
APAC [Member] | Reliance subsea field development project [Member] | COVID-19 Pandemic [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Effect of changes in estimated project cost on operating results | $ 13 | ||
Discontinued Operations [Member] | Lummus Technology [Member] | |||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||
Revenue, remaining performance obligations | $ 610 | $ 619 |
Revenue Recognition - Summary_3
Revenue Recognition - Summary of Revenue by Product Offering, Contract Types and Revenue Recognition Methodology (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 1,906 | $ 2,063 |
Offshore and subsea [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 821 | 605 |
LNG [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 419 | 421 |
Downstream [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 522 | 714 |
Power [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 144 | 323 |
Fixed priced [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 1,572 | 1,599 |
Reimbursable [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 117 | 286 |
Hybrid [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 145 | 109 |
Unit-basis and other [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 72 | 69 |
Over time [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 1,885 | 2,043 |
At a point in time [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 21 | $ 20 |
Project Changes in Estimates -
Project Changes in Estimates - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | $ 150,000,000 | |
Estimated additional project costs, recovery recognized from customers | 0 | |
COVID-19 Pandemic [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 79,000,000 | |
NCSA [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 115,000,000 | $ 24,000,000 |
NCSA [Member] | Cameron LNG and Freeport LNG Project [Member] | LNG Project [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 11,000,000 | |
NCSA [Member] | Total Ethane Cracker Project [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 47,000,000 | |
NCSA [Member] | Total Ethane Cracker Project [Member] | Downstream Petrochemical Projects [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 54,000,000 | |
NCSA [Member] | Rota 3 Pipeline and Other Projects [Member] | Offshore and Subsea Projects [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 68,000,000 | |
NCSA [Member] | COVID-19 Pandemic [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 39,000,000 | |
EARC [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 4,000,000 | |
EARC [Member] | Total Tyra Redevelopment Project | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 11,000,000 | |
EARC [Member] | COVID-19 Pandemic [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 11,000,000 | |
EARC [Member] | COVID-19 Pandemic [Member] | Total Tyra Redevelopment Project | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 9,000,000 | |
MENA [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 13,000,000 | 33,000,000 |
MENA [Member] | COVID-19 Pandemic [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 17,000,000 | |
APAC [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 6,000,000 | |
APAC [Member] | Reliance subsea field development project [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 7,000,000 | |
APAC [Member] | COVID-19 Pandemic [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | 12,000,000 | |
APAC [Member] | COVID-19 Pandemic [Member] | Reliance subsea field development project [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | $ 13,000,000 | |
NCSA, EARC, MENA and APAC [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Effect of changes in estimated project cost on operating results | $ 19,000,000 |
Accounts Receivable-Trade, Ne_2
Accounts Receivable-Trade, Net - Trade Receivable Balances (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Accounts Notes And Loans Receivable [Line Items] | |||
Contract receivables | [1] | $ 745 | $ 823 |
Retainages | 120 | 146 | |
Accounts receivable-trade, net | 832 | 942 | |
Contract receivables [Member] | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Less allowances | (33) | (27) | |
Accounts receivable-trade, net | $ 832 | $ 942 | |
[1] | Retainages classified within Accounts receivable — |
Accounts Receivable-Trade, Ne_3
Accounts Receivable-Trade, Net - Additional Information (Detail) $ in Millions | Mar. 31, 2020USD ($) |
ASU 2016-13 [Member] | |
Accounts Notes And Loans Receivable [Line Items] | |
Accounts receivable, allowance for credit loss, noncurrent | $ 6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Trade Names [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | $ 3 | ||
Lummus Technology [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Goodwill | 1.1 | $ 1.1 | |
Project-related intangible assets, net | 13 | 15 | |
Other intangibles, net | $ 561 | $ 573 | |
Storage Solutions [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Goodwill allocated to tank | $ 9 | ||
MENA [Member] | Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Fair value of reporting units exceeded | 219.00% | ||
Lummus Technology [Member] | Minimum [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Fair value of reporting units exceeded | 143.00% |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Changes in the Carrying Amount of Goodwill by Reporting Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | |||
Goodwill [Line Items] | ||||
Balance as of December 31, 2019 | [1] | $ 147 | ||
Goodwill impairment | (91) | $ (3,500) | ||
Balance as of March 31, 2020 | 56 | 147 | [1] | |
EARC [Member] | ||||
Goodwill [Line Items] | ||||
Balance as of December 31, 2019 | [1] | 91 | ||
Goodwill impairment | (91) | |||
Balance as of March 31, 2020 | [1] | 91 | ||
MENA [Member] | ||||
Goodwill [Line Items] | ||||
Balance as of December 31, 2019 | [1] | 47 | ||
Balance as of March 31, 2020 | 47 | 47 | [1] | |
Storage Solutions [Member] | ||||
Goodwill [Line Items] | ||||
Balance as of December 31, 2019 | [1] | 9 | ||
Balance as of March 31, 2020 | $ 9 | $ 9 | [1] | |
[1] | As of January 1, 2020, we had approximately $3.5 billion of cumulative impairment charges recorded in conjunction with our impairment assessments performed during 2019 and 2018, as previously described in the 2019 Form 10-K |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Changes in the Carrying Amount of Goodwill by Reporting Segment (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Cumulative impairment charges | $ 91 | $ 3,500 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Key Assumptions Used in Deriving Reporting Units Fair Value (Detail) | Mar. 31, 2020 |
Discount rate [Member] | EARC [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.355 |
Discount rate [Member] | MENA [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.370 |
Discount rate [Member] | Storage Solutions [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.185 |
Compound annual growth rate [Member] | EARC [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.413 |
Compound annual growth rate [Member] | MENA [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.240 |
Compound annual growth rate [Member] | Storage Solutions [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.397 |
Terminal growth rate [Member] | EARC [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.02 |
Terminal growth rate [Member] | MENA [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.02 |
Terminal growth rate [Member] | Storage Solutions [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill Measurement Input | 0.02 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | ||
Finite Lived Intangible Assets [Line Items] | |||
Net Carrying Amount | $ 168 | $ 179 | |
Other Intangible Assets [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 219 | 223 |
Accumulated Amortization | [1] | (51) | (44) |
Net Carrying Amount | [1] | $ 168 | 179 |
Other Intangible Assets [Member] | Process Technologies [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life | 10 years | ||
Gross Carrying Amount | $ 80 | 80 | |
Accumulated Amortization | (15) | (13) | |
Net Carrying Amount | $ 65 | 67 | |
Other Intangible Assets [Member] | Trade Names [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life | 10 years | ||
Gross Carrying Amount | $ 121 | 125 | |
Accumulated Amortization | (26) | (22) | |
Net Carrying Amount | $ 95 | 103 | |
Other Intangible Assets [Member] | Customer Relationships [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life | 5 years | ||
Gross Carrying Amount | $ 14 | 14 | |
Accumulated Amortization | (9) | (8) | |
Net Carrying Amount | $ 5 | 6 | |
Other Intangible Assets [Member] | Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life | 10 years | ||
Gross Carrying Amount | $ 4 | 4 | |
Accumulated Amortization | (1) | (1) | |
Net Carrying Amount | $ 3 | $ 3 | |
[1] | Amortization expense is anticipated |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Parenthetical) (Detail) - Other Intangible Assets [Member] $ in Millions | Mar. 31, 2020USD ($) |
Finite Lived Intangible Assets [Line Items] | |
Amortization expense, remainder of 2020 | $ 24 |
Amortization expense, 2021 | 27 |
Amortization expense, 2022 | 20 |
Amortization expense, 2023 | 19 |
Amortization expense, 2024 | $ 19 |
Goodwill and Other Intangible_9
Goodwill and Other Intangible Assets - Schedule of Project Related Intangibles (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | ||
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Project related intangible assets, Weighted Average Useful Life | 3 years | ||
Project related intangible assets, Gross Carrying Amount | $ 166 | $ 166 | |
Project related intangible assets, Accumulated Amortization | (139) | (133) | |
Project related intangible assets, Net Carrying Amount | $ 27 | 33 | |
Project related intangible liabilities, Weighted Average Useful Life | 2 years | ||
Project related intangible liabilities, Gross Carrying Amount | $ (109) | (109) | |
Project related intangible liabilities, Accumulated Amortization | 101 | 99 | |
Project related intangible liabilities, Net Carrying Amount | (8) | (10) | |
Total, Gross Carrying Amount | [1] | 57 | 57 |
Total, Accumulated Amortization | [1] | (38) | (34) |
Total, Net Carrying Amount | [1] | $ 19 | $ 23 |
[1] |
Goodwill and Other Intangibl_10
Goodwill and Other Intangible Assets - Schedule of Project Related Intangibles (Parenthetical) (Detail) - Project Related Intangibles [Member] $ in Millions | Mar. 31, 2020USD ($) |
Finite Lived Intangible Assets [Line Items] | |
Amortization expense, remainder of 2020 | $ 10 |
Amortization expense, 2021 | 4 |
Amortization expense, 2022 | 3 |
Amortization expense, 2023 | $ 2 |
Joint Venture and Consortium _3
Joint Venture and Consortium Arrangements - Additional Information (Detail) $ in Millions | Mar. 02, 2020USD ($) | Mar. 08, 2019USD ($) | Nov. 08, 2018USD ($) | Mar. 31, 2020USD ($)TrainLNG | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 6.00% | |||||
NET Power [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 32.20% | |||||
McDermott/CTCI [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
io Oil and Gas [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
Qingdao McDermott Wuchuan Offshore Engineering Company Ltd. [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
Accrued Liabilities [Member] | McDermott/CTCI [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Advances to ventures | $ 95 | $ 95 | ||||
Accrued Liabilities [Member] | Proportionately Consolidated Joint Ventures [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Advances to ventures | $ 20 | $ 29 | ||||
CTCI [Member] | McDermott/CTCI [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
Exelon [Member] | NET Power [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 32.20% | |||||
8 Rivers Capital [Member] | NET Power [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 29.30% | |||||
Oxy Low Carbon Ventures Limited Liability Corporation | NET Power [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 6.30% | 10.00% | 6.30% | |||
Equity method investment, amount sold | $ 60 | |||||
Cash payment on equity method investment | $ 5 | $ 20 | $ 11 | |||
Baker Hughes [Member] | io Oil and Gas [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
Wuhan Wuchuan Investment Holding Co., Ltd. [Member] | Qingdao McDermott Wuchuan Offshore Engineering Company Ltd. [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Equity method investment, percentage | 50.00% | |||||
McDermott/Orano [Member] | McDermott [Member] | Variable Interest Entities ("VIEs") [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage in consolidated joint ventures | 70.00% | |||||
McDermott/Orano [Member] | Orano [Member] | Variable Interest Entities ("VIEs") [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage in consolidated joint ventures | 30.00% | |||||
Profit sharing percentage transfer to Orano | 18.00% | |||||
Mc Dermott And Kentz | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Number of liquefied natural gas trains | LNG | 3 | |||||
Mc Dermott And Kentz | McDermott [Member] | Variable Interest Entities ("VIEs") [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage in consolidated joint ventures | 65.00% | |||||
Mc Dermott And Kentz | Kentz [Member] | Variable Interest Entities ("VIEs") [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage in consolidated joint ventures | 35.00% | |||||
McDermott/Zachry [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by parent | 50.00% | |||||
Number of liquefied natural gas trains | Train | 2 | |||||
McDermott/Zachry [Member] | Zachry [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 50.00% | |||||
McDermott/Zachry/Chiyoda [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by parent | 33.30% | |||||
McDermott/Zachry/Chiyoda [Member] | Zachry [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 33.30% | |||||
McDermott/Zachry/Chiyoda [Member] | Chiyoda [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 33.30% | |||||
McDermott/Chiyoda [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by parent | 50.00% | |||||
Number of Liquefied Natural Gas | LNG | 3 | |||||
McDermott/Chiyoda [Member] | Chiyoda [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 50.00% | |||||
McDermott/CTCI [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by parent | 42.50% | |||||
McDermott/CTCI [Member] | CTCI [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 57.50% | |||||
CCS JV [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by parent | 24.983% | |||||
Number of liquefied natural gas trains | LNG | 2 | |||||
CCS JV [Member] | Chiyoda [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 0.068% | |||||
CCS JV [Member] | Saipem [Member] | ||||||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 74.949% |
Joint Venture and Consortium _4
Joint Venture and Consortium Arrangements - Summarized Balance Sheet Information for Proportionately Consolidated Consortiums (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Current assets | $ 6,241 | $ 3,555 | |
Total assets | 8,300 | 8,737 | |
Current liabilities | 5,885 | 9,444 | |
Proportionately Consolidated Joint Ventures [Member] | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Current assets | [1] | 593 | 529 |
Non-current assets | 9 | 6 | |
Total assets | 602 | 535 | |
Current liabilities | $ 609 | $ 671 | |
[1] | Our consortium arrangements may allow for excess working capital of the consortium to be advanced to the consortium participants. Such advances are returned to the ventures for working capital needs as necessary. Accordingly, at a reporting period end a consortium may have advances to its participants which are reflected as an advance receivable within current assets of the consortium. As of March 31, 2020 and December 31, 2019, Accounts receivable — |
Joint Venture and Consortium _5
Joint Venture and Consortium Arrangements - Summarized Balance Sheet Information for Proportionately Consolidated Consortiums (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts Receivable-other [Member] | Proportionately Consolidated Joint Ventures [Member] | ||
Schedule Of Equity Method Investments And Joint Ventures [Line Items] | ||
Advances from ventures | $ 20 | $ 41 |
Joint Venture and Consortium _6
Joint Venture and Consortium Arrangements - Summarized Balance Sheet Information for Proportionately Consolidated Collaborative Arrangement (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Current assets | $ 6,241 | $ 3,555 |
Total assets | 8,300 | 8,737 |
Current liabilities | 5,885 | 9,444 |
Collaborative Arrangement [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Current assets | 220 | 180 |
Non-current assets | 7 | |
Total assets | 227 | 180 |
Current liabilities | $ 219 | $ 175 |
Joint Venture and Consortium _7
Joint Venture and Consortium Arrangements - Summarized Balance Sheet Information for Consolidated Joint Venture (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 6,241 | $ 3,555 |
Total assets | 8,300 | 8,737 |
Current liabilities | 5,885 | 9,444 |
Variable Interest Entities ("VIEs") [Member] | ||
Variable Interest Entity [Line Items] | ||
Current assets | 42 | 39 |
Non-current assets | 16 | 16 |
Total assets | 58 | 55 |
Current liabilities | $ 109 | $ 120 |
Restructuring and Integration_2
Restructuring and Integration Costs and Transaction Costs - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring And Related Activities [Abstract] | ||
Restructuring and integration costs | $ 14 | $ 69 |
Transaction costs | 35 | $ 4 |
Accrued liabilities associated with transaction costs | $ 8 |
Debt - Summary of Carrying Valu
Debt - Summary of Carrying Values Debt Obligations (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debtor-in-Possession Term Facility | $ 2,032 | |
Debt | 2,038 | $ 5,107 |
New Term Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing current | 800 | |
Discount on New Term Facility | (37) | (54) |
Term Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing current | 2,220 | |
North Ocean 105 Construction Financing [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing current | 8 | 8 |
10.625% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowing current | 1,300 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Structured equipment financing | 801 | |
Structured Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
Structured equipment financing | $ 35 | $ 32 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Jan. 21, 2020 | Oct. 30, 2018USD ($) | May 10, 2018USD ($) | Apr. 18, 2018USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Feb. 26, 2020USD ($) | Jan. 23, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 21, 2019USD ($)Subsidiary |
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | $ 194,000,000 | $ 194,000,000 | ||||||||
Debtor in possession of financing interest rate percentage | 9.00% | 9.00% | ||||||||
Debtor in possession financing additional interest rate on borrowings in event of default | 2.00% | 2.00% | ||||||||
Letter of credit participation fee percentage | 5.00% | 5.00% | ||||||||
Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stock and other equity percentage | 100.00% | 100.00% | ||||||||
DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | $ 2,810,000,000 | $ 2,810,000,000 | ||||||||
Date entered by the Bankruptcy Court | Feb. 24, 2020 | |||||||||
Payments of debt issuance costs | $ 87,000,000 | |||||||||
Percentage of delivered approved budget less than projected amount | 15.00% | |||||||||
Percentage of delivered approved budget exceeds projected amount | 15.00% | |||||||||
Percentage of delivered approved budget exceeds projected amount for first week | 20.00% | |||||||||
Percentage of delivered approved budget exceeds projected amount for third week | 15.00% | |||||||||
Percentage of vendor disbursement and JV infusions delivered approved budget exceeds projected amount | 15.00% | |||||||||
Percentage of vendor disbursements and JV infusions delivered approved budget if projected amount exceed for first week | 20.00% | |||||||||
Percentage of vendor disbursements and JV infusions delivered approved budget exceeds projected amount for third week | 15.00% | |||||||||
Superpriority Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | $ 1,700,000,000 | |||||||||
Number of subsidiaries | Subsidiary | 3 | |||||||||
Fair value of embedded derivatives | 37,000,000 | $ 37,000,000 | $ 28,000,000 | $ 60,000,000 | ||||||
Embedded Derivative Liability, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | |||||||||
Interest expense, net | 17,000,000 | |||||||||
Interest expense recognized | $ 28,000,000 | |||||||||
Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | $ 4,700,000,000 | |||||||||
Term Facility and Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of claim subject to receive by lenders | 100.00% | |||||||||
Morgan Stanley Senior Funding Inc | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | 50,000,000 | |||||||||
Letter of Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing outstanding | 280,000,000 | $ 280,000,000 | ||||||||
Letter of Credit Facility [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 743,000,000,000 | 743,000,000,000 | ||||||||
Debt instrument issued or deemed issued | 350,000,000 | 350,000,000 | ||||||||
Letter of Credit Facility [Member] | Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | $ 1,440,000,000 | |||||||||
Letter of Credit Facility [Member] | Letter of Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | $ 230,000,000 | |||||||||
Debt instrument issued or deemed issued | 228,000,000 | 228,000,000 | ||||||||
Facility expire month and year | 2021-12 | |||||||||
Letter of Credit Facility [Member] | Tranche A [Member] | Available at Closing [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 300,000,000 | 300,000,000 | $ 300,000,000 | |||||||
Letter of Credit Facility [Member] | Tranche B [Member] | Available upon Entry of Final DIP Order [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 243,000,000 | 243,000,000 | $ 243,000,000 | |||||||
Letter of Credit Facility [Member] | Tranche C [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 200,000,000 | 200,000,000 | ||||||||
Letter of Credit Facility [Member] | Tranche D [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 743,000,000 | 743,000,000 | ||||||||
New LC Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument issued or deemed issued | 200,000,000 | |||||||||
New LC Facility [Member] | Superpriority Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | $ 400,000,000 | |||||||||
Term Facility Letters of Credit [Member] | Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letter of credit facility fee percentage | 3.00% | |||||||||
Term Facility Letters of Credit [Member] | Credit Agreement [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | 319,700,000 | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing outstanding | 801,000,000 | 801,000,000 | ||||||||
Revolving Credit Facility [Member] | Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | $ 1,000,000,000 | |||||||||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Maximum [Member] | Financial Letters of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available credit facility for issuance | 200,000,000 | |||||||||
Financial Letters of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 49,000,000 | 49,000,000 | ||||||||
Borrowing outstanding | 55,000,000 | 55,000,000 | ||||||||
Term Facility Letters of Credit, Revolving Credit Facility and LC Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit outstanding | 1,146,000,000 | 1,146,000,000 | ||||||||
Structured Equipment Financing [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | 37,000,000 | $ 37,000,000 | ||||||||
Debt instrument maturity month and year | 2020-01 | |||||||||
Amount received under credit facility | $ 35,000,000 | |||||||||
Credit facility, monthly settlement amount | 5,700,000 | |||||||||
Term Loan Facility [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | 2,065,000,000 | 2,065,000,000 | ||||||||
Line of credit facility available for capital | 800,000,000 | 800,000,000 | ||||||||
Line of credit facility accrued interest and fee | 21,000,000 | 21,000,000 | ||||||||
Term Loan Facility [Member] | Tranche A [Member] | Available at Closing [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 550,000,000 | 550,000,000 | $ 550,000,000 | |||||||
Term Loan Facility [Member] | Tranche B [Member] | Available upon Entry of Final DIP Order [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 650,000,000 | 650,000,000 | $ 650,000,000 | |||||||
Term Loan Facility [Member] | Tranche C [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 11,000,000 | 11,000,000 | ||||||||
Term Loan Facility [Member] | Tranche C [Member] | Superpriority Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 800,000,000 | 800,000,000 | ||||||||
Term Loan Facility [Member] | Tranche D [Member] | DIP Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 44,000,000 | 44,000,000 | ||||||||
Term Loan Facility [Member] | Tranche D [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility available for capital | 44,000,000 | 44,000,000 | ||||||||
Line of credit facility available for capital accreted value | 11,000,000 | 11,000,000 | ||||||||
New Term Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowings outstanding prior to bifurcation of embedded derivatives | $ 800,000,000 | |||||||||
New Term Facility [Member] | Superpriority Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Available capacity under credit facility | $ 1,300,000,000 | |||||||||
Term Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term facility, borrowings outstanding Amount | 2,200,000,000 | $ 2,200,000,000 | ||||||||
Term Facility [Member] | RSA [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of equitization of funded debt held by lenders | 94.00% | |||||||||
Term Facility [Member] | Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | $ 2,260,000,000 | |||||||||
Term facility maturity period | 7 years | |||||||||
Senior Secured Credit Facility [Member] | Letter of Credit Facility [Member] | Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Deposited cash collateral account to secure reimbursement obligations | $ 319,300,000 | |||||||||
Senior Secured Credit Facility [Member] | Term Facility Letters of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | 310,000,000 | |||||||||
Senior Secured Credit Facility [Member] | Term Facility Letters of Credit [Member] | Credit Agreement [Member] | Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior secured long-term borrowing | $ 310,000,000 | |||||||||
Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Issue of second-lien seven-year senior secured notes | $ 1,300,000,000 | |||||||||
Debt instrument interest rate | 10.625% | 10.625% | ||||||||
Debt instrument maturity month and year | 2024-05 | |||||||||
Recovery percentage of equity | 6.00% | |||||||||
Secured Debt [Member] | North Ocean 105 [Member] | North Ocean Construction Financing [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term facility, borrowings outstanding Amount | $ 8,000,000 | $ 8,000,000 | ||||||||
Debt instrument maturity month and year | 2020-10 |
Debt - Schedule of Minimum Adju
Debt - Schedule of Minimum Adjusted EBITDA (Detail) - DIP Credit Agreement [Member] | 3 Months Ended |
Mar. 31, 2020USD ($) | |
June 30, 2020 [Member] | |
Debt Instrument [Line Items] | |
Minimum Adjusted EBITDA | $ 230,000,000 |
September 30, 2020 [Member] | |
Debt Instrument [Line Items] | |
Minimum Adjusted EBITDA | 410,000,000 |
December 31, 2020 [Member] | |
Debt Instrument [Line Items] | |
Minimum Adjusted EBITDA | $ 640,000,000 |
Debt - Schedule of Maximum Proj
Debt - Schedule of Maximum Project Charges (Detail) - DIP Credit Agreement [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
December 31, 2019 [Member] | |
Debt Instrument [Line Items] | |
Maximum Project Charges | $ 260 |
March 31, 2020 [Member] | |
Debt Instrument [Line Items] | |
Maximum Project Charges | 50 |
June 30, 2020 [Member] | |
Debt Instrument [Line Items] | |
Maximum Project Charges | 50 |
September 30, 2020 [Member] | |
Debt Instrument [Line Items] | |
Maximum Project Charges | 40 |
December 31, 2020 [Member] | |
Debt Instrument [Line Items] | |
Maximum Project Charges | $ 30 |
Debt - Schedule of Uncommitted
Debt - Schedule of Uncommitted Bilateral Credit Facilities and Surety Bond Arrangements (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Letters of credit outstanding | $ 194 | ||
Uncommitted Bilateral Letter of Credit Facilities and Surety Bond Arrangements [Member] | Bank Guarantee and Bilateral Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Available capacity under credit facility | [1] | 1,688 | $ 1,842 |
Letters of credit outstanding | [1] | 1,098 | 1,293 |
Uncommitted Bilateral Letter of Credit Facilities and Surety Bond Arrangements [Member] | Surety Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Available capacity under credit facility | [2] | 747 | 835 |
Letters of credit outstanding | [2] | $ 625 | $ 601 |
[1] | Approximately $175 million of this capacity is available only upon provision of an equivalent amount of cash collateral. | ||
[2] | Excludes approximately $272 million of surety bonds maintained on behalf of CB&I’s former Capital Services Operations, which were sold to CSVC Acquisition Corp (“CSVC”) in June 2017. We also continue to maintain guarantees on behalf of CB&I’s former Capital Services Operations business, and we are entitled to an indemnity from CSVC for the surety bonds and guarantees . |
Debt - Schedule of Uncommitte_2
Debt - Schedule of Uncommitted Bilateral Credit Facilities and Surety Bond Arrangements (Parenthetical) (Detail) $ in Millions | Mar. 31, 2020USD ($) |
Bank Guarantee and Bilateral Letter of Credit [Member] | |
Debt Instrument [Line Items] | |
Capacity available upon provision of cash collateral | $ 175 |
Surety Bonds [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, collateral amount | $ 272 |
Lease Obligations - Summary of
Lease Obligations - Summary of Leased Assets and Lease Liability Obligations (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease assets | $ 330 | $ 349 | |
Finance lease assets | [1] | $ 50 | $ 50 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | us-gaap:PropertyPlantAndEquipmentNet | |
Total leased assets | $ 380 | $ 399 | |
Operating lease liabilities, Current | 93 | 93 | |
Finance lease liabilities, Current | 45 | 47 | |
Current lease obligations | 138 | 140 | |
Operating lease liabilities, Noncurrent | 279 | 294 | |
Total lease obligations | $ 417 | $ 434 | |
[1] | As a result of the debt compliance matters, we determined that the classification of our finance lease obligations was current and, accordingly, we recorded those obligations within Current Liabilities on the Balance Sheets as of March 31, 2020 and December 31, 2019. |
Lease Obligations - Additional
Lease Obligations - Additional Information (Detail) - Amazon Pipe-lay and Construction Vessel [Member] - USD ($) $ in Millions | Jul. 27, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Lessee Lease Description [Line Items] | |||
Capital expenditure expected | $ 80 | ||
Property, plant and equipment, net | $ 49 | $ 49 | |
Accumulated amortization,net | 6 | 6 | |
Finance lease liability | $ 44 | $ 46 | |
Minimum [Member] | |||
Lessee Lease Description [Line Items] | |||
Cost of modification including project management and other fees and expenses | 295 | ||
Maximum [Member] | |||
Lessee Lease Description [Line Items] | |||
Cost of modification including project management and other fees and expenses | $ 325 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Lease Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Finance lease cost | |||
Net lease cost | $ 34 | $ 39 | |
SG&A expenses [Member] | |||
Lessee Lease Description [Line Items] | |||
Operating lease cost | [1] | 11 | 12 |
Cost of operations [Member] | |||
Lessee Lease Description [Line Items] | |||
Operating lease cost | [1] | 22 | 24 |
Finance lease cost | |||
Amortization of leased assets | 2 | ||
Net interest expense [Member] | |||
Finance lease cost | |||
Interest on lease liabilities | $ 1 | $ 1 | |
[1] | Includes short-term leases and immaterial variable lease costs. |
Pension and Post-retirement Ben
Pension and Post-retirement Benefits - Schedule of Contribution Information for Our Non-U.S. Defined Benefit Pension Plans And Other Postretirement Plans (Detail) - Pension Plans [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
U.S. Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions expected for the remainder of 2020 | $ 1 |
Total contributions expected for 2020 | 1 |
Non-U. S. Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions made through March 31, 2020 | 6 |
Contributions expected for the remainder of 2020 | 7 |
Total contributions expected for 2020 | $ 13 |
Pension and Post-retirement B_2
Pension and Post-retirement Benefits - Net Periodic Benefit Cost (Income) (Detail) - Pension Plans [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
U.S. Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 4 | $ 5 | |
Expected return on plan assets | (5) | (4) | |
Net periodic benefit cost (income) | [1] | (1) | 1 |
Non-U. S. Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 3 | 3 | |
Interest cost | 3 | 4 | |
Expected return on plan assets | (5) | (6) | |
Net periodic benefit cost (income) | [1] | $ 1 | $ 1 |
[1] | The components of net periodic benefit cost (income) other than the service cost component are included in Other non-operating (income) expense, net in our Statements of Operations. The service cost component is included in Cost of operations and SG&A in our Statements of Operations, along with other compensation costs rendered by the participating employees. |
Accrued Liablities - Summary of
Accrued Liablities - Summary of Accrued Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Accrued Liabilities Current [Abstract] | |||
Accrued contract costs | $ 573 | $ 690 | |
Advances from equity method and proportionally consolidated joint ventures and consortiums | [1] | 115 | 124 |
Income taxes payable | 66 | 56 | |
Accrued interest payable | 32 | 126 | |
Other accrued liabilities | [2] | 516 | 534 |
Accrued liabilities | $ 1,302 | $ 1,530 | |
[1] | Represents advances from the joint ventures and consortiums in which we participate. See Note 9, Joint Venture and Consortium Arrangements, | ||
[2] | Represents various accruals that are each individually less than 5% of total current liabilities. |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Parenthetical) (Detail) | Mar. 31, 2020 |
Maximum [Member] | |
Accrued Liabilities Current [Line Items] | |
Percentage of total current liabilities | 5.00% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Instruments Measured at Fair Value on Recurring and Nonrecurring Basis (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Not measured at fair value on recurring basis | |||
Liabilities subject to compromise | $ (4,578) | ||
Carrying Amount [Member] | |||
Measured at fair value on recurring basis | |||
Forward contracts, liability | [1] | (94) | $ (75) |
Embedded derivatives | [2] | (28) | |
Not measured at fair value on recurring basis | |||
Debt and finance lease obligations | [3] | (2,083) | (4,353) |
Liabilities subject to compromise | [4] | (4,578) | |
Fair Value [Member] | |||
Measured at fair value on recurring basis | |||
Forward contracts, liability | [1] | (94) | (75) |
Embedded derivatives | [2] | (28) | |
Not measured at fair value on recurring basis | |||
Debt and finance lease obligations | [3] | (1,956) | (2,362) |
Liabilities subject to compromise | [4] | (1,133) | |
Level 2 [Member] | |||
Measured at fair value on recurring basis | |||
Forward contracts, liability | [1] | (94) | (75) |
Not measured at fair value on recurring basis | |||
Debt and finance lease obligations | [3] | (1,885) | (2,275) |
Liabilities subject to compromise | [4] | (860) | |
Level 3 [Member] | |||
Measured at fair value on recurring basis | |||
Embedded derivatives | [2] | (28) | |
Not measured at fair value on recurring basis | |||
Debt and finance lease obligations | [3] | (71) | $ (87) |
Liabilities subject to compromise | [4] | $ (273) | |
[1] | 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. This approach discounts future cash flows based on current market expectations and credit risk. | ||
[2] | The fair value of the embedded derivatives, discussed in Note 11, Debt inputs to the fair value measurement of the embedded derivatives are unobservable and reflect our estimates of forward yield. The fair value of the embedded derivative as of March 31, 2020 was not material. | ||
[3] | Our debt instruments are generally valued using a market approach based on quoted prices for similar instruments traded in active markets and are classified as Level 2 within the fair value hierarchy. Quoted prices were not available for the NO 105 | ||
[4] | The Plan of Reorganization, liabilities subject to compromise will be impaired at the Effective Date. See Note 3, Reorganization , for further discussion. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate carrying value of assets | $ 8,300 | $ 8,737 |
Spoolbase Facilities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Impairment charges | 3 | |
Marine Assets [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate carrying value of assets | 1,340 | |
Estimated fair value of assets | 463 | |
Impairment charges | $ 881 | |
Marine Assets [Member] | Future Cash Flows, Discounted Risk-adjusted Rate [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value, measurement input | 0.10 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | Jan. 21, 2020 | Mar. 31, 2020 | May 08, 2018 |
Reclassification out of AOCI [Member] | |||
Derivative [Line Items] | |||
Recognized unrealized losses in AOCI reclassified to interest expense | $ 20,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Fair value of swap arrangement in net liability position | 39,000,000 | ||
Derivative, fair value, net | $ 47,000,000 | ||
Term Facility [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Notional value of outstanding derivative contracts | 500,000,000 | $ 1,900,000,000 | |
Decrease in notional amount | $ 1,400,000,000 | ||
Foreign Exchange Rate [Member] | |||
Derivative [Line Items] | |||
Notional value of outstanding derivative contracts | $ 682,000,000 | ||
Derivative contracts, maturity date | Sep. 30, 2023 | ||
Fair value of derivative contracts | $ 55,000,000 | ||
Unrealized net gain (loss) on derivative financial instruments | (54,000,000) | ||
Net deferred losses expected to be reclassified from AOCI over next 12 months | $ (22,000,000) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Fair Value by Underlying Risk and Balance Sheet Classification (Detail) - Cash Flow Hedging [Member] - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives asset | $ 4 | |
Total derivatives liability | $ 54 | 12 |
Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives liability | 22 | 10 |
Derivatives Not Designated as Hedges [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives asset | 1 | 1 |
Total derivatives liability | 41 | 68 |
Derivatives Not Designated as Hedges [Member] | Accrued Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives liability | 41 | 68 |
Other Current Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives asset | 3 | |
Other Current Assets [Member] | Derivatives Not Designated as Hedges [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives asset | 1 | 1 |
Other Non-current Assets [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives asset | 1 | |
Other Non-current Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives liability | $ 32 | $ 2 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Total Value by Underlying Risk Recognized in Other Comprehensive Income and Reclassified from AOCI to Statement of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments Gain Loss [Line Items] | ||
Loss recognized in other comprehensive income (loss) | $ (74) | $ (58) |
Revenues | 1,906 | 2,063 |
Cost of operations | 1,853 | 1,928 |
Interest expense, net | (56) | (92) |
Designated as Hedging Instrument [Member] | Foreign Exchange Hedges [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Loss recognized in other comprehensive income (loss) | (49) | (7) |
Revenues | (1) | 1 |
Cost of operations | (3) | 1 |
Designated as Hedging Instrument [Member] | Interest Rate Hedges [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Loss recognized in other comprehensive income (loss) | (15) | |
Interest expense, net | 1 | |
Derivatives not Designated as Hedges [Member] | Foreign Exchange Hedges [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Revenues | $ 1 | |
Cost of operations | (2) | |
Derivatives not Designated as Hedges [Member] | Interest Rate Hedges [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Interest expense, net | $ (20) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Mar. 27, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ 8 | $ (21) | |
Effective income tax rate | (1.00%) | 18.00% | |
Discontinued operations, income tax expense | $ 6 | ||
Discontinued operations, effective tax rate | (77.00%) | ||
CARES act of 2020, percentage of taxable income related to net operating losses carryforwards and carrybacks | 100.00% | ||
CARES act of 2020, net operating loss carryback period | 5 years | ||
CARES act of 2020, increase in income tax rate for interest deduction | 50.00% | 30.00% | |
CARES act of 2020, net operating loss tax benefit | $ 12.7 | ||
CARES act of 2020, net operating loss previous carryback period | 5 years |
Stockholders' Equity and Equi_3
Stockholders' Equity and Equity-Based Incentive Plans - Changes in the Number of Shares Outstanding and Treasury Shares Held by the Company (Detail) - shares shares in Millions | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |||
Shares Outstanding [Abstract] | |||||
Beginning balance | 193 | 181 | |||
Common stock issued | 0 | 2 | |||
Purchase of common stock | 0 | (1) | |||
Ending balance | 193 | 182 | |||
Shares Held as Treasury Shares [Abstract] | |||||
Beginning balance | 3 | 3 | |||
Purchase of common stock | 0 | 1 | |||
Retirement of common stock | 0 | (1) | |||
Ending balance | 3 | 3 | |||
Common stock, shares issued | 196 | [1] | 184 | [1] | 196 |
[1] |
Stockholders' Equity and Equi_4
Stockholders' Equity and Equity-Based Incentive Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Unrecognized compensation expense | $ 18 | |
Expected weighted-average period for recognition of compensation cost | 2 years | |
Restructuring and Integration Costs [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Stock-based compensation expense | $ 4 | |
SG&A Expenses [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Stock-based compensation expense | $ 6 |
Stockholders' Equity and Equi_5
Stockholders' Equity and Equity-Based Incentive Plans - Components of Accumulated Other Comprehensive Income (Loss) included in Stockholders' Equity (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders Equity Note [Abstract] | ||
Foreign currency translation adjustments ("CTA") | $ (129) | $ (97) |
Net unrealized loss on derivative financial instruments | (54) | (12) |
Defined benefit pension and other postretirement plans | 6 | 6 |
Accumulated other comprehensive loss | $ (177) | $ (103) |
Stockholders' Equity and Equi_6
Stockholders' Equity and Equity-Based Incentive Plans - Components of Accumulated Other Comprehensive Income (Loss) Reclassified (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $ (2,143) | $ 823 | |
Net current period other comprehensive income | (74) | (58) | |
Ending Balance | (3,595) | 675 | |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (97) | (73) | |
Other comprehensive income before reclassification | (32) | (39) | |
Net current period other comprehensive income | (32) | (39) | |
Ending Balance | (129) | (112) | |
Net Unrealized Loss on Derivative Financial Instruments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | [1] | (12) | (40) |
Other comprehensive income before reclassification | [1] | (49) | (22) |
Amounts reclassified from AOCI | [1],[2] | 7 | 3 |
Net current period other comprehensive income | [1] | (42) | (19) |
Ending Balance | [1] | (54) | (59) |
Defined Benefit Pension and Other Postretirement Plans [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 6 | 6 | |
Ending Balance | 6 | 6 | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (103) | (107) | |
Other comprehensive income before reclassification | (81) | (61) | |
Amounts reclassified from AOCI | [2] | 7 | 3 |
Net current period other comprehensive income | (74) | (58) | |
Ending Balance | $ (177) | $ (165) | |
[1] | Refer to Note 16, Derivative Financial Instruments | ||
[2] | Amounts are net of tax, which was not material during the three months ended March 31, 2020 and 2019. |
Redeemable Preferred Stock - Ad
Redeemable Preferred Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Oct. 21, 2019 | Nov. 29, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Temporary Equity [Line Items] | ||||
Shares issued | 0 | 2,000,000 | ||
Preferred stock dividend rate | 14.00% | |||
Initial excise price per share | $ 0.01 | |||
Redeemable preferred stock accreted value | 3.00% | |||
Dividends, paid-in-kind | 15.00% | |||
Adjusted percentage of outstanding common stock | 1.50% | |||
Redeemable Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Redeemable preferred stock | $ 294 | |||
Adjusted accretion and PIK on redeemable preferred stock | $ 48 | |||
Private Placement [Member] | Redeemable Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Shares issued | 300,000 | |||
Preferred stock dividend rate | 12.00% | |||
Preferred stock par value | $ 1 | |||
Private Placement [Member] | Series A Warrants [Member] | ||||
Temporary Equity [Line Items] | ||||
Warrants to purchase common shares | 6,800,000 | |||
Initial excise price per share | $ 0.01 | |||
Proceeds from issuance of warrants, net of discount | $ 289.5 | |||
Payment of directly related issuance costs | $ 18 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net loss from continuing operations attributable to McDermott | $ (1,358) | $ (95) |
Net (loss) income from discontinued operations attributable to McDermott | (14) | 38 |
Net loss | (1,372) | (57) |
Less: Net income (loss) attributable to noncontrolling interests | 6 | (1) |
Net loss attributable to McDermott | (1,378) | (56) |
Dividends on redeemable preferred stock | (3) | (10) |
Accretion of redeemable preferred stock | (1) | (4) |
Net loss attributable to common stockholders | $ (1,382) | $ (70) |
Continuing operations | ||
Basic | $ (7.09) | $ (0.60) |
Diluted | (7.09) | (0.60) |
Discontinued operations | ||
Basic | (0.07) | 0.21 |
Diluted | $ (0.07) | $ 0.21 |
Shares used in the computation of net (loss) income per share | ||
Basic | 193 | 181 |
Diluted | 193 | 181 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Mar. 08, 2016 | Mar. 31, 2020 | Dec. 31, 2019 |
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency, damages awarded, value | $ 10,750,000 | ||
Payments of settlements by installment | 2,500,000 | ||
Litigation reserve | 8,250,000 | ||
Loss contingency estimate | 233,000,000 | ||
Potential environmental liabilities | 0 | ||
Reduction in Transaction Price [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency estimate | 13,000,000 | ||
Cost Reimbursable Projects [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency, damages amount | $ 4,500,000,000 | ||
Asserted claims against customer | $ 250,000,000 | ||
Consolidated Joint Venture Projects [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Asserted claims against customer | 103,000,000 | ||
Net of amounts owned to joint venture | 78,600,000 | ||
Reserve for estimated project losses | 55,000,000 | ||
Reserve for estimated project losses at joint venture level | 85,000,000 | ||
Chicago Bridge & Iron Company N.V. Securities Litigation [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency accrual liability amount | 0 | ||
Gotham Diversified Neutral Master Fund, LP, et al. v. Chicago Bridge & Iron Company N.V. et al., and Appaloosa Investment L.P., et al., v. Chicago Bridge & Iron Company N.V., et al. [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency accrual liability amount | 0 | ||
Daniel Cohen, et al. v. Chicago Bridge & Iron Company, N.V., et al. [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency accrual liability amount | 0 | ||
Edwards v. McDermott International, Inc., et al.. [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency accrual liability amount | 0 | ||
Saudi Arabia Customs Audit [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Loss contingency accrual liability amount | $ 0 | ||
Loss contingency estimate | $ 64,700,000 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) - Segment | 3 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2018 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 5 | |
Number of operating groups, which represent our reportable segments | 5 | 5 |
Segment Reporting - Revenue and
Segment Reporting - Revenue and Operating Results from Continuing Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,906 | $ 2,063 | ||
Goodwill impairment | (91) | $ (3,500) | ||
Operating (loss) income | (1,051) | (25) | ||
NCSA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2 | 22 | ||
EARC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill impairment | (91) | |||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss), prior to goodwill impairment | 4 | 159 | ||
Goodwill impairment | [1] | (91) | ||
Operating (loss) income | (87) | 159 | ||
Operating Segments [Member] | NCSA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 834 | 1,225 | ||
Operating income (loss), prior to goodwill impairment | 15 | 63 | ||
Operating Segments [Member] | EARC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 214 | 139 | ||
Operating income (loss), prior to goodwill impairment | (9) | 6 | ||
Operating Segments [Member] | MENA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 423 | 353 | ||
Operating income (loss), prior to goodwill impairment | (19) | 65 | ||
Operating Segments [Member] | APAC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 227 | 130 | ||
Operating income (loss), prior to goodwill impairment | 5 | 12 | ||
Operating Segments [Member] | Storage Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208 | 216 | ||
Operating income (loss), prior to goodwill impairment | 12 | 13 | ||
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | [2] | $ (964) | $ (184) | |
[1] | (1) In the first quarter of 2020, we recognized $91 million of goodwill impairment associated with our EARC reporting segment, as discussed in Note 8, Goodwill and Other Intangible Assets . | |||
[2] | (2) In the first quarter of 2020, in our Corporate results we recognized approximately $884 million impairment charge associated primarily with our vessels and fabrication yards, as discussed in Note 15, Fair Value Measurements. |
Segment Reporting - Revenue a_2
Segment Reporting - Revenue and Operating Results from Continuing Operations (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Goodwill impairment | $ 91 | $ 3,500 |
Property, plant and equipment impairment | 884 | |
Vessels and Fabrication Yards [Member] | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment impairment | $ 884 |
Segment Reporting - Depreciatio
Segment Reporting - Depreciation and Amortization Expense and Capital Expenditures (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 60 | $ 76 | |
Depreciation and amortization - continuing operations | 44 | 58 | |
Depreciation and amortization - discontinued operations | 16 | 18 | |
Capital expenditures | [1] | 25 | 18 |
Capital expenditures - continuing operations | [1] | 25 | 18 |
Operating Segments [Member] | NCSA [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 8 | 10 | |
Capital expenditures | [1] | 1 | 3 |
Operating Segments [Member] | EARC [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 2 | 3 | |
Operating Segments [Member] | MENA [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 5 | 9 | |
Capital expenditures | [1] | 5 | 3 |
Operating Segments [Member] | APAC [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 3 | 5 | |
Capital expenditures | [1] | 3 | 5 |
Operating Segments [Member] | Storage Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 11 | 11 | |
Capital expenditures | [1] | 1 | |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 15 | 20 | |
Capital expenditures | [1] | $ 16 | $ 6 |
[1] |
Segment Reporting - Depreciat_2
Segment Reporting - Depreciation and Amortization Expense and Capital Expenditures (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 31, 2019 |
Segment Reporting [Abstract] | ||
Accrued and unpaid capital expenditures reported in property, plant and equipment | $ 47 | $ 19 |
Segment Reporting - Segment Ass
Segment Reporting - Segment Assets for Continuing Operations and Discontinued Operations (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | $ 5,849 | $ 6,258 |
Total assets - discontinued operations | 2,451 | 2,479 |
Total assets | 8,300 | 8,737 |
Operating Segments [Member] | NCSA [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | 1,657 | 1,526 |
Operating Segments [Member] | EARC [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | 453 | 523 |
Operating Segments [Member] | MENA [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | 1,123 | 1,195 |
Operating Segments [Member] | APAC [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | 734 | 1,447 |
Operating Segments [Member] | Storage Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | 535 | 523 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets - continuing operations | $ 1,347 | $ 1,044 |