Exhibit 99.1
McDermott Announces Second Quarter Net Loss of $59.9 Million, or
$0.94 Loss per Diluted Share, Including B&W Revaluation Costs of
$40 Million and Project Loss of $39.9 Million
NEW ORLEANS--(BUSINESS WIRE)--Aug. 11, 2003--McDermott
International Inc. (NYSE:MDR) ("McDermott" or the "Company") today
announced a loss from continuing operations of $60.5 million, or $0.95
loss per diluted share, for the 2003 second quarter compared to a loss
from continuing operations of $235.4 million, or $3.82 loss per
diluted share, for the 2002 second quarter. Net loss for the 2003
second quarter of $59.9 million, or $0.94 loss per diluted share,
included net income from discontinued operations of $0.7 million, or
$0.01 per diluted share. Net loss for the 2002 second quarter of
$234.2 million, or $3.80 loss per diluted share, included net income
from discontinued operations of $1.2 million, or $0.02 per diluted
share. Weighted average common shares outstanding were 64.0 million
and 61.7 million at June 30, 2003 and June 30, 2002, respectively.
Two significant items impacting the net loss for the 2003 quarter
on an after-tax basis were as follows:
-- $40.0 million loss for the revaluation of the estimated
settlement costs related to the Chapter 11 proceedings
involving The Babcock & Wilcox Company ("B&W")
-- $39.9 million loss related to a marine construction project in
Argentina
Revenues increased 29% to $595.5 million in the 2003 second
quarter compared to the 2002 second quarter. This increase is due
primarily to the increased activity in the Marine Construction
Services segment partially offset by the absence of revenues from the
Power Generation Systems segment in the 2003 second quarter due to the
sale of Babcock & Wilcox Volund ApS in 2002.
Operating loss of $13.9 million for the 2003 second quarter
included a $39.9 million loss related to a project in Argentina being
performed by J. Ray McDermott ("J. Ray"), which comprises the Marine
Construction Services segment, and an $18 million qualified pension
plan expense in the Corporate segment. The 2002 second quarter
operating loss of $237.3 million included a $224.7 million write-off
of the investment in B&W in the Corporate segment and a $33.9 million
loss from the EPIC Spar projects ("Spar projects") in the Marine
Construction Services segment.
"I am pleased with BWX Technologies Inc.'s ability to consistently
deliver year-over-year improved operational performance and financial
results in our Government Operations segment. Unfortunately, the
Company's second quarter was adversely impacted by a weather-related
event which caused a three-month delay in work on a project in
Argentina. The project was awarded to J. Ray in the fall of 2001 prior
to our announcement last year that we would no longer accept contracts
that place a disproportionate amount of risk on the Company. We have
reached an agreement in principle with the customer to minimize our
future risk on this project. Absent losses from this project, J. Ray
would have posted positive operating results for the quarter," said
Bruce W. Wilkinson, chairman of the board and chief executive officer
of McDermott.
"J. Ray's new management team is in place and will continue to
gain traction over the next several quarters. While I am confident in
the team's ability to deliver improved operational performance going
forward, there is still much to be done to stabilize J. Ray,"
continued Wilkinson.
"Given the current situation at J. Ray and the uncertainty
surrounding the passage of the pending asbestos legislation, which
would have a significant impact on our Company, we are withdrawing the
2003 earnings guidance and feel that it is not prudent at this time to
issue revised guidance for the remainder of 2003," said Wilkinson.
RESULTS OF OPERATIONS
2003 Second Quarter Compared to 2002 Second Quarter
Marine Construction Services Segment
Revenues from the Marine Construction Services segment, which
consists of J. Ray McDermott and its subsidiaries, increased 48% to
$468.0 million in the 2003 second quarter. The revenue increase
resulted from increased execution of fabrication and marine
installation projects in all geographic areas in which J. Ray operates
other than in the Gulf of Mexico, where activity declined slightly
compared to the 2002 second quarter.
The operating loss of $13.2 million for the 2003 second quarter
resulted primarily from recording a $39.9 million loss provision for
the project in Argentina. As previously reported, on June 11, 2003,
due to a sudden change in weather, J. Ray experienced damage to some
pipe-laying equipment and the Derrick Barge 60 ("DB60") while laying
subsea pipe off the coast of southern Argentina. Work was suspended on
the project to assess the remedial action required to complete the
project and complete repairs to the DB60. J. Ray has very recently
reached an agreement in principle, which is subject to ongoing
negotiations, with the customer to minimize future risks associated
with this project. Major projects contributing to 2003 second quarter
operating income, excluding the $39.9 million loss provision discussed
above, were the topsides fabrication and subsea pipeline installation
projects in the Azerbaijani sector of the Caspian Sea, topsides
fabrication work in the Morgan City fabrication facility and charter
of a vessel into Mexico. Selling, general and administrative expenses
were $3.4 million lower in the 2003 second quarter compared to the
2002 second quarter. The 2003 second quarter included no additional
losses on the Spar projects, while the 2002 second quarter included
losses of $33.9 million on the Spar projects.
At June 30, 2003, J. Ray's backlog of $1.8 billion included $359
million related to contracts in loss positions. Of this amount $207
million related to uncompleted work on the Spar projects and $103
million related to the project in Argentina. Backlog was $2.0 billion
and $2.1 billion at March 31, 2003 and at December 31, 2002,
respectively.
Government Operations Segment
The Government Operations segment consists primarily of BWX
Technologies Inc. Revenues in this segment decreased $3.6 million to
$127.5 million in the 2003 second quarter primarily due to lower
revenues in management and operations services partially offset by
higher volumes from the manufacture of nuclear components for certain
U.S. government programs. Effective January 1, 2003, BWXT became a
teaming partner to complete the environmental restoration for a U.S.
government site in Ohio, which it previously operated as a prime
contractor. This resulted in the recording of revenues for the
subcontract earned fees only rather than the full revenues from this
contract. This caused a $20 million reduction in revenues for the 2003
second quarter compared to the 2002 second quarter.
Operating income increased $5.7 million to $20.5 million in the
2003 second quarter, primarily due to the following:
-- higher volumes from the manufacture of nuclear components for
certain U.S. government programs
-- favorable resolution of a contract dispute
-- improved operating results from joint ventures in Idaho, Texas
and Tennessee
-- reduced spending on fuel cell research and development
projects
These increases were partially offset by lower volumes and margins
from commercial work and other government manufacturing operations,
and higher general and administrative expenses due to increased
facility management oversight costs and higher variable stock-based
compensation expense.
At June 30, 2003, BWXT's backlog was $1.5 billion, compared to
backlog of $1.6 billion and $1.7 billion at March 31, 2003 and
December 31, 2002, respectively.
Corporate
Corporate expenses increased $18.0 million to $21.2 million in the
2003 second quarter compared to $3.3 million in the 2002 second
quarter, primarily due to higher noncash qualified pension plan
expense as a result of changes in the discount rate and plan asset
performance. Additionally, the financial performance of the Company's
captive insurance companies was less favorable during the 2003 second
quarter than in the 2002 second quarter.
Other Income and Expense
Interest income decreased to $0.9 million in the 2003 second
quarter compared to $1.8 million in the 2002 second quarter, primarily
due to decreases in investments and prevailing interest rates.
Interest expense increased $1.8 million to $4.2 million in the 2003
second quarter, primarily due to interest costs associated with the
Company's credit facility, which was refinanced in February 2003.
The Company reported other income of $0.7 million in the 2003
second quarter compared to other expense of $0.9 million in the 2002
second quarter due to income resulting from the curtailment of J.
Ray's qualified pension plan and minority interest income associated
with a J. Ray joint venture. Foreign currency transaction losses
partially offset this income.
During the 2003 second quarter, revaluation of certain components
of the estimated settlement cost related to the Chapter 11 proceedings
involving B&W resulted in an increase of the estimated liability to
$126.4 million and recognition of other expense of $39.4 million
($40.0 million after tax). The consideration to be provided in the
proposed settlement includes, among other things, McDermott common
stock, a share price guaranty obligation and a promissory note. The
increase is due primarily to an increase in the price of McDermott's
common stock from $2.90 per share at March 31, 2003 to $6.33 per share
at June 30, 2003. The Company is required to revalue certain
components of the estimated settlement cost quarterly and at the time
the securities are issued, assuming the settlement is finalized.
Assuming issuance of the debt and equity securities, the Company will
record such amounts as liabilities or stockholders' equity based on
the nature of the individual securities.
For the 2003 second quarter, income tax expense was impacted by
the non-deductible portion of the expense associated with the
revaluation of the estimated cost of settlement of the B&W Chapter 11
proceedings, an increase in the valuation allowance for the
realization of deferred tax assets and the mix of income and losses
from various tax jurisdictions in which the Company operates.
DISCONTINUED OPERATIONS
The Company is in final negotiations to sell Menck GmbH ("Menck"),
a component of the Marine Construction Services segment, and expects
to close the transaction by September 30, 2003. Accordingly, for the
three and six months ended June 30, 2003 and June 30, 2002, the
Company has reported the results of operations for Menck as
discontinued operations.
Hudson Products Corporation ("HPC") was sold in July 2002.
Accordingly, for the three and six months ended June 30, 2002, the
Company has reported the results of operations for HPC as discontinued
operations.
THE BABCOCK & WILCOX COMPANY
The Company wrote off its investment in B&W of $224.7 million
during the second quarter of 2002 and has not consolidated B&W with
its financial results since the Chapter 11 bankruptcy filing on
February 22, 2000. B&W's revenues decreased $52.8 million to $352.3
million in the 2003 second quarter compared to $405.1 million in the
2002 second quarter. Net loss for the 2003 second quarter of $51.7
million included a $70 million provision for an increase in B&W's
estimated asbestos liability. Net income for the 2002 second quarter
was $16.5 million.
LIQUIDITY
On a consolidated basis, the Company incurred negative cash flows
for the first two quarters of 2003 and expects to incur negative cash
flows during the remainder of 2003 and in the first half of 2004
primarily due to losses on the Spar projects and the Argentina
project. Completion of the Spar projects and the Argentina project has
and will continue to put a strain on J. Ray's liquidity. J. Ray
intends to fund its negative cash flow through borrowings under the
credit facility, intercompany loans from McDermott and sales of
non-strategic assets including the sale of Menck and certain marine
vessels. For the 2003 year, the Company anticipates negative operating
cash flows before capital expenditures of between $100 million and
$120 million. At August 8, 2003, the Company had liquidity of $146
million, which included unrestricted cash of $97 million and borrowing
capacity of $49 million.
The Company is in the process of refinancing BWXT on a stand-alone
basis and has received a commitment letter from a commercial bank to
underwrite a three-year $125 million revolving credit facility, which
may be increased to $150 million. This commitment is subject to the
successful refinancing of J. Ray on a stand-alone basis. The Company
is in negotiations with a lender to provide financing to J. Ray and
hopes to close both new facilities simultaneously.
The Company's ability to obtain such a replacement facility for J.
Ray will depend on numerous factors including J. Ray's operating
performance and overall market conditions. If J. Ray experiences
additional significant contract costs on its Spar projects, the
Argentina project or any other project as a result of unforeseen
events, it may be unable to fund all of its budgeted capital
expenditures and meet all of its funding requirements for contractual
commitments.
If the Company is unable to obtain a new credit facility for J.
Ray or is unable to replace or extend the existing credit facility, J.
Ray's ability to pursue additional projects, which often require
letters of credit, and its liquidity will be adversely impacted. These
factors cause substantial doubt about J. Ray's ability to continue as
a going concern.
OTHER INFORMATION
About the Company
McDermott International Inc. is a leading worldwide energy
services company. The Company's subsidiaries provide engineering,
fabrication, installation, procurement, research, manufacturing,
environmental systems, project management and facility management
services to a variety of customers in the energy and power industries,
including the U.S. Department of Energy.
In accordance with the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, McDermott International Inc.
cautions that statements in this press release, which are
forward-looking and provide other than historical information, involve
risks and uncertainties that may impact the Company's actual results
of operations. The forward-looking statements in this press release
include, among other things, statements about the Company's and J.
Ray's liquidity and ability to obtain new credit facilities or extend
the current facility, the estimated cash flows and timing to complete
the Spar projects and the Argentina project, the estimated charges for
the proposed settlement of the B&W Chapter 11 based on current
negotiations, the probability of that proposed settlement, J. Ray's
ability to continue as a going concern, J. Ray's management team's
ability to deliver improved performance and the closing of the Menck
transaction by September 30, 2003. Although we believe that the
expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will
prove to have been correct. Those statements are made by using various
underlying assumptions and are subject to numerous uncertainties and
risks. If one or more of these risks materialize, or if underlying
assumptions prove incorrect, actual results may vary materially from
those expected. For a more complete discussion of these risk factors,
please see McDermott's annual report for the year ended December 31,
2002 and its 2003 quarterly reports filed with the Securities and
Exchange Commission.
Conference Call to Discuss 2003 Second Quarter Earning Release
Date: Tuesday, August 12, 2003 at 10:00 a.m. EDT (9:00 a.m. CDT)
Webcast: Investor Relations section of website at www.mcdermott.com
Dial-in: (USA) (888) 396-2384 or (International) (617) 847-8711
Access code 61014564
Replay: August 12, 2003 beginning at 1:00 p.m. EDT (12:00 p.m. CDT)
(USA) (888) 286-8010 or (International) (617) 801-6888
Access code 40389865
McDERMOTT INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Unaudited)
(In thousands, except per share amounts)
Revenues $595,475 $462,562 $1,108,212 $860,486
- ----------------------------------------------------------------------
Costs and Expenses:
Cost of operations 578,578 439,421 1,044,085 804,531
Loss on write-off of
investment in
The Babcock &
Wilcox Company - 224,664 - 224,664
Selling, general
and administrative
expenses 36,052 38,239 77,235 79,898
- ----------------------------------------------------------------------
614,630 702,324 1,121,320 1,109,093
- ----------------------------------------------------------------------
Equity in Income of
Investees 5,237 2,418 13,125 9,952
- ----------------------------------------------------------------------
Operating Income (Loss) (13,918) (237,344) 17 (238,655)
- ----------------------------------------------------------------------
Other Income (Expense):
Interest income 909 1,858 1,889 5,337
Interest expense (4,171) (2,368) (7,830) (9,533)
Increase in estimated
cost of The Babcock &
Wilcox Company
bankruptcy
settlement (39,395) - (15,324) -
Other-net 652 (878) 1,987 1,410
- ----------------------------------------------------------------------
(42,005) (1,388) (19,278) (2,786)
- ----------------------------------------------------------------------
Loss from Continuing
Operations before
Provision for (Benefit
from) Income Taxes
and Cumulative Effect
of Accounting Change (55,923) (238,732) (19,261) (241,441)
Provision for
(Benefit from)
Income Taxes 4,624 (3,327) 11,661 (5,392)
- ----------------------------------------------------------------------
Loss from Continuing
Operations before
Cumulative Effect
of Accounting Change (60,547) (235,405) (30,922) (236,049)
Income from
Discontinued
Operations 695 1,189 2,906 1,240
- ----------------------------------------------------------------------
Loss before
Cumulative Effect
of Accounting
Change (59,852) (234,216) (28,016) (234,809)
Cumulative Effect
of Accounting Change - - 3,710 -
- ----------------------------------------------------------------------
Net Loss $(59,852) $(234,216) $(24,306) $(234,809)
- ----------------------------------------------------------------------
Earnings (Loss) per
Common Share:
Basic and Diluted
Loss from Continuing
Operations before
Cumulative Effect
of Accounting
Change $(0.95) $(3.82) $(0.49) $(3.85)
Income from
Discontinued
Operations $0.01 $0.02 $0.05 $0.02
Cumulative Effect
of Accounting Change $- $- $0.06 $-
Net Loss $(0.94) $(3.80) $(0.38) $(3.83)
Weighted Average
Common Shares 63,995 61,700 63,732 61,362
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McDERMOTT INTERNATIONAL INC.
SELECTED SEGMENT INFORMATION
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Unaudited)
(In thousands except Backlog)
REVENUES
Marine Construction
Services $467,972 $315,691 $863,012 $578,594
Government Operations 127,523 131,115 245,231 252,906
Power Generation Systems - 15,793 - 29,035
Adjustments and
Eliminations (20) (37) (31) (49)
- ----------------------------------------------------------------------
TOTAL $595,475 $462,562 $1,108,212 $860,486
- ----------------------------------------------------------------------
OPERATING INCOME (LOSS)
Marine Construction
Services $(13,162) $(20,842) $3,478 $(28,671)
Government Operations 20,486 14,802 44,111 32,560
Power Generation Systems (4) (3,384) 30 (3,922)
- ----------------------------------------------------------------------
7,320 (9,424) 47,619 (33)
Write-off of investment in
B&W - (224,664) - (224,664)
Corporate (21,238) (3,256) (47,602) (13,958)
- ----------------------------------------------------------------------
TOTAL $(13,918) $(237,344) $17 $(238,655)
- ----------------------------------------------------------------------
EQUITY IN INCOME (LOSS) OF
INVESTEES
Marine Construction
Services $(885) $182 $(577) $1,776
Government Operations 5,938 5,079 13,294 10,989
Power Generation Systems 184 (2,843) 408 (2,813)
- ----------------------------------------------------------------------
TOTAL $5,237 $2,418 $13,125 $9,952
- ----------------------------------------------------------------------
DEPRECIATION &
AMORTIZATION
Marine Construction
Services $7,757 $6,202 $13,181 $11,904
Government Operations 3,180 3,152 6,332 6,186
Power Generation Systems 4 183 7 356
Corporate 916 1,002 1,657 1,244
- ----------------------------------------------------------------------
TOTAL $11,857 $10,539 $21,177 $19,690
- ----------------------------------------------------------------------
CAPITAL EXPENDITURES
Marine Construction
Services $3,858 $10,354 $11,605 $16,694
Government Operations 5,318 5,106 7,460 9,391
Power Generation Systems - 51 - 171
Corporate 1,656 - 1,662 101
- ----------------------------------------------------------------------
TOTAL $10,832 $15,511 $20,727 $26,357
- ----------------------------------------------------------------------
BACKLOG (in millions)
Marine Construction
Services $1,838 $2,068 $1,838 $2,068
Government Operations 1,493 1,021 1,493 1,021
Power Generation Systems - 41 - 41
- ----------------------------------------------------------------------
TOTAL $3,331 $3,130 $3,331 $3,130
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McDERMOTT INTERNATIONAL INC.
ITEMS INCLUDED IN LOSS FROM CONTINUING OPERATIONS
Three Months Six Months
Ended Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Unaudited)
(In millions)
ITEMS INCLUDED IN OPERATING INCOME
(LOSS) BY SEGMENT
Marine Construction Services
Losses on Spar projects $- $(30.0) $- $(36.9)
Losses on Argentina project (39.9) - (41.9) -
Announced change orders on a
project - - 11.0 -
- ----------------------------------------------------------------------
TOTAL $(39.9) $(30.0) $(30.9) $(36.9)
- ----------------------------------------------------------------------
Government Operations
Favorable resolution of
contract dispute $5.4 $- $8.7 $-
- ----------------------------------------------------------------------
TOTAL $5.4 $- $8.7 $-
- ----------------------------------------------------------------------
Corporate
Write-off of investment in B&W $- $(224.7) $- $(224.7)
Qualified pension plan expense (18.0) (2.1) (36.0) (4.1)
- ----------------------------------------------------------------------
TOTAL $(18.0) $(226.8) $(36.0) $(228.8)
- ----------------------------------------------------------------------
OTHER ITEMS
Change in estimated cost of
B&W bankruptcy settlement
before tax $(39.4) $- $(15.3) $-
Tax impact on B&W settlement (.6) - (1.1) -
- ----------------------------------------------------------------------
Change in estimated cost of
B&W bankruptcy settlement
after tax $(40.0) $- $(16.4) $-
- ----------------------------------------------------------------------
McDERMOTT INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
2003 2002
---- ----
(Unaudited)
(In thousands)
Current Assets:
Cash and cash equivalents $ 181,465 $ 174,341
Investments -- 108,269
Accounts receivable -- trade, net 243,066 191,672
Accounts receivable from The Babcock &
Wilcox Company 5,798 12,273
Accounts receivable -- unconsolidated
affiliates 12,321 17,695
Accounts receivable -- other 30,429 63,270
Contracts in progress 94,051 147,336
Deferred income taxes 2,241 3,350
Other current assets 56,933 45,403
- ----------------------------------------------------------------------
Total Current Assets 626,304 763,609
- ----------------------------------------------------------------------
Property, Plant and Equipment 1,259,446 1,238,447
Less accumulated depreciation 903,410 885,051
- ----------------------------------------------------------------------
Net Property, Plant and Equipment 356,036 353,396
- ----------------------------------------------------------------------
Investments in Debt Securities 47,089 64,958
- ----------------------------------------------------------------------
Goodwill 12,926 12,926
- ----------------------------------------------------------------------
Prepaid Pension Costs 19,083 19,311
- ----------------------------------------------------------------------
Other Assets 78,172 63,971
- ----------------------------------------------------------------------
TOTAL $ 1,139,610 $1,278,171
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LIABILITIES AND STOCKHOLDERS' DEFICIT
June 30, December 31,
2003 2002
---- ----
(Unaudited)
(In thousands)
Current Liabilities:
Notes payable and current maturities of
long-term debt $ 6,221 $ 55,577
Accounts payable 171,036 163,811
Accounts payable to The Babcock & Wilcox
Company 32,792 32,379
Accrued employee benefits 55,985 60,896
Accrued liabilities -- other 155,690 190,844
Accrued contract costs 37,713 53,335
Advance billings on contracts 243,805 329,031
U.S. and foreign income taxes payable 22,967 31,176
- ----------------------------------------------------------------------
Total Current Liabilities 726,209 917,049
- ----------------------------------------------------------------------
Long-Term Debt 85,857 86,104
- ----------------------------------------------------------------------
Accumulated Postretirement Benefit
Obligation 26,374 26,898
- ----------------------------------------------------------------------
Self-Insurance 82,978 71,918
- ----------------------------------------------------------------------
Pension Liability 429,012 392,072
- ----------------------------------------------------------------------
Accrued Cost of The Babcock & Wilcox Company
Bankruptcy Settlement 101,701 86,377
- ----------------------------------------------------------------------
Other Liabilities 120,489 114,510
- ----------------------------------------------------------------------
Commitments and Contingencies
Stockholders' Deficit:
Common stock, par value $1.00 per share,
authorized 150,000,000 shares; issued
67,684,756 at June 30, 2003, and
66,351,478 at December 31, 2002 67,685 66,351
Capital in excess of par value 1,099,303 1,093,428
Accumulated deficit (1,051,624) (1,027,318)
Treasury stock at cost, 2,061,407 shares
at June 30, 2003, and at December 31, 2002 (62,792) (62,792)
Accumulated other comprehensive loss (485,582) (486,426)
- ----------------------------------------------------------------------
Total Stockholders' Deficit (433,010) (416,757)
- ----------------------------------------------------------------------
TOTAL $ 1,139,610 $ 1,278,171
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McDERMOTT INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2003 2002
---- ----
(Unaudited)
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (24,306) $(234,809)
- ----------------------------------------------------------------------
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 21,177 19,690
Income or loss of investees, less dividends (310) (4,988)
Loss (gain) on asset disposals and impairments
-- net (2,089) 139
Provision for (benefit from) deferred taxes (2,233) 5,996
Increase in estimated cost of The Babcock &
Wilcox Company bankruptcy settlement 15,324 --
Loss on write-off of investment in The Babcock
& Wilcox Company -- 224,664
Cumulative effect of accounting change (3,710) --
Other 3,293 8,428
Changes in assets and liabilities, net of
effects of acquisitions and divestitures:
Accounts receivable (8,049) (60,821)
Net contracts in progress and advance
billings (31,781) 60,844
Accounts payable 7,401 41,179
Accrued and other current liabilities (49,576) 112
Income taxes (11,840) (82,445)
Other, net 33,172 1,164
- ----------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (53,527) (20,847)
- ----------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (20,727) (26,357)
Purchases of available-for-sale securities (232,364) (841,448)
Sales of available-for-sale securities 131,241 737,869
Maturities of available-for-sale securities 227,493 259,814
Proceeds from asset disposals 2,377 269
Other (399) --
- ----------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 107,621 130,147
- ----------------------------------------------------------------------
Six Months Ended
June 30,
2003 2002
---- ----
(Unaudited)
(In thousands)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt $ (9,500) $(208,387)
Increase (decrease) in short-term borrowing (39,875) 22
Issuance of common stock 271 1,119
Other 2,140 (171)
- ----------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (46,964) (207,417)
- ----------------------------------------------------------------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (6) 52
- ----------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 7,124 (98,065)
- ----------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 174,341 196,912
- ----------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $181,465 $ 98,847
- ----------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 7,725 $ 15,156
Income taxes -- net $ 3,124 $ 64,068
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CONTACT: McDermott International, Houston
Gay Stanley Mayeux, 281-870-5011
gmayeux@mcdermott.com