McDermott International, Inc. (MDR)
Q2 2009 Earnings Call Transcript
August 11, 2009 10:00 a.m. ET

Executives

Jay Roueche – Vice President of Investor Relations
John A. Fees – Chief Executive Officer & Director
Michael S. Taff – Senior Vice President & Chief Financial Officer

Analysts

Martin Malloy – Johnson Rice & Company
Graham Mattison – Lazard Capital Markets
Andrew Kaplowitz – Barclays Capital
John Rogers – D. A. Davidson & Co.
Tahira Afzal –KeyBanc Capital Markets
Steven Fisher – UBS
Joseph Gibney – CapitalOne Southcoast
Will Gabrielski – Broadpoint AmTech
Jeffrey Spittel – Natixis Bleichroeder, Inc.
Sameer Rathod – Macquarie Research Equities

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to McDermott International''s second quarter 2009 earnings conference call. At this time, all participants are in a listen-only mode. Following the company’s prepared remarks, we will conduct a question-and-answer session and instructions will be given at that time. I would now like to turn the conference over to our host, Mr. Jay Roueche, McDermott''s Vice President of Investor Relations. Please go ahead.

Jay Roueche

Thank you, Fab (ph) and good morning, everyone. We appreciate you joining us to discuss McDermott''s second quarter 2009 financial results which we reported yesterday afternoon and is still available on our website. Joining me on the call this morning are John Fees, McDermott''s Chief Executive Officer and Mike Taff, Senior Vice President and Chief Financial Officer.

Before I turn the call over, let me remind you that today''s event is being recorded and a replay will be available for a limited time on our website. In addition, some of today''s comments will include forward-looking statements and estimates. These comments are subject to various risks and uncertainties. Please refer to our filings with the Securities and Exchange Commission which are also available on our website for a discussion of the factors that may cause actual results to differ from management''s projections, forecasts, estimates and expectations.

I''ll now turn the call over to John.

John A. Fees

Thanks, Jay and good morning everyone. The second quarter of 2009 was an active one at McDermott. First and foremost, we were particularly pleased with our consolidated results this quarter. There are a lot of moving parts, but the puts and takes pretty well balance out.
We recorded over $1.1 billion in new bookings which we feel good about. In addition, we rolled out our new Empower initiative for a modular nuclear reactor design, participated in four investor conferences and hosted our annual shareholder meeting.

The company completed construction and started pilot skill testing of carbon dioxide control technology at our regenerative solvent absorption technology facility and continued with our efforts on oxy combustion as well.

Our offshore Oil and Gas Construction segment in particular, has been very active in the bidding front and has made good progress on the Middle East pipeline contracts, completing the Ross Gas and Qatar gas pipelines this summer.

The Government Operations business had its best quarter ever income wise and won a new high enriched uranium downblending contract from the Department of Energy.

At corporate we resolved the over decade long (inaudible) litigation so the legal section of our financials continues to shorten. In short, there''s a lot to talk about today, but before I go into greater details, let me turn the call over to Mike to take you through the financials since that''s the catalyst for this morning''s conference.

Michael S. Taff

Thanks, John and good morning. As I normally do, I''ll walk you through our financials and discuss the variances to the second quarter a year ago. It''s worth reminding everyone that last year is a quarterly high water mark on a number of metrics including revenues, operating income and net income. So while a lot of the commentary will indicate this year is down in comparison, it''s worth highlighting that the 2009 second quarter is the highest level of quarterly income since the record results a year ago. As such, we feel positive about our numbers we reported this quarter.