This summary is based on the second quarter fiscal 2007 earnings call conducted by McDermott International Inc. (MDR: chart) on August 8, 2007.

Management:

Chairman of the Board and CEO: Bruce W. Wilkinson
Sr. VP and CFO: Michael S. Taff
VP of IR: John E. Roueche

Key Investors Issues

- Earnings per share rose by 200% from 41 cents in the prior year to $1.31.
- Net income was increased from $47 million in 2006 to $149.4 million.
- Revenues were up 35% from a year ago to $1.42 billion.
- Credit ratings by major rating agencies upgraded.
- A two-for-one stock split was approved by the board.

Second Quarter Highlights

- Net income was $149.4 million, or $1.31 per diluted share, up from $47 million, or 41 cents per share in 2006 due to improved results at Offshore Oil and Gas Construction and Power Generation segments.
- Revenues exceeded $1.4 billion, up 35% from $1.05 billion in the prior year as a result of a 45% increase from Offshore Oil and Gas Construction, and a 37% increase at Power Generation.
- Operating income rose by $69 million from 2006 to $181.8 million, due to increases of $25.6 million, and $50.1 million from Offshore Oil and Power Generation respectively.

- Growth in unallocated corporate expenses by $5.5 million from the prior year to $14.3 million was attributed to higher stock-based compensation expenses.
- Other income generated amounted to $9.5 million compared to other expense of $50.7 million a year ago due to a $49 million loss on the early retirement of debt in 2006.
- Net interest income and expense improved by $5.1 million, as a result of lower levels of debt and higher amounts of cash and investments.

Segment Performance Highlights

Offshore Oil and Gas Construction (J. Ray''s)

- Income rose from $65.5 million in 2006 to $91.1 million.
- Revenues grew to $580 million, up 45% versus a year ago though this was below expectation due to delays in completion of some projects.

All key regions contributed to improvement, led by increased activities in the Asia-Pacific region reporting over $100 million in new awards.

- Morgan City contributed positive results for the second consecutive quarter.
- Project closeouts, including change orders and settlements, amounted to $20 million, up 300% from $5 million in the prior year.

- J. Ray''s: results included $21 million in profit that had been previously deferred in prior years on a project known as Dolphin giving a 15.9% operating margin.
- Bookings amounted to $1 billion, bringing backlog to $4.6 billion.
- Worldwide bids outstanding remain strong at $3.2 billion.

Fabrication utilization remained strong, at over 150% of its standard, led by substantial activity in the Asia-Pacific and Middle East markets.

- Major project was the Poinsettia project in Trinidad led by Fluor.
- The company was also awarded the long-term agreement from Saudi Aramco with proceeds expected to run into several hundred million dollars.
- The asset purchase of Secunda International, including 14 multifunctional vessels was concluded for $260 million in cash.

Government Operations Segment

- Income fell to $29.7 million from $30.8 million last year as a result of a $1.1 million gain on an asset sale recognized in 2006.
- Revenues remained steady at $168 million.
- The acquisition of Marine Mechanical Corporation (MMC) was concluded at $75 million and its integration is ongoing.

Bidding is ongoing in the UK for the Sellafield, and Atomic Weapons Establishment projects:

- The Sellafield project in partnership with Bechtel and Serco, is likely to be awarded in 2008, whereas AWE expected in late 2007.
- A commercial nuclear manufacturing project for USEC, or US Enrichment Corporation was awarded during the quarter and BWXT will be manufacturing the centrifuges.