MCDERMOTT INTERNATIONAL INC

CIK:0000708819|SEC Filings

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 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

Depreciation and amortization

Debt issuance cost amortization

Debt discount and make-whole accretion

Reorganization items, net - Claims valuation adjustments

Reorganization items, net - DIP Credit Facility fees

Intangible assets impairment

Stock-based compensation charges

Other non-cash items

Changes in operating assets and liabilities, net of effects of businesses acquired (disposed):

Accounts receivable

(87)

Contracts in progress, net of advance billings on contracts

(307)

(638)

Accounts payable

(293)

357

Other current and non-current assets

(9)

Other current and non-current liabilities

(67)

Total cash used in operating activities

(695)

(244)

Cash flows from investing activities:

Purchases of property, plant and equipment

^[1]

(25)

(18)

(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)

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

134

Cash, cash equivalents and restricted cash at end of period, continuing operations

$ 1,574

$ 605

[1]	^{Capital expenditures reported represent cash purchases. At March 31, 2020 and 2019, we had approximately $47 million and $19 million, respectively, of accrued and unpaid capital expenditures reported in property, plant and equipment and accrued liabilities.}

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

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

Investments in unconsolidated affiliates

Goodwill

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

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

Non-current liabilities of discontinued operations held for sale

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

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)

Total McDermott Stockholders' Equity

(3,602)

(2,143)

Noncontrolling interest

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