McDermott International, Inc. (MDR)
Q3 2008 Earnings Call Transcript
November 6, 2008, 10:00 A.M. ET

Executives

Jay Roueche – Vice President of Investor Relations and Corporate Communications
John A. Fees - President and Chief Executive Officer
Michael S. Taff - Senior Vice President and Chief Financial Officer

Analysts

Andy Kaplowitz - Barclays Capital
Stephen Gengaro - Jefferies & Co.
Marty Malloy - Johnson Rice
Jamie Cook - Credit Suisse
John Rogers - D.A. Davidson & Co.
Joe Gibney - CapitalOne Southcoast
Tahira Afzal - KeyBanc Capital Markets
Will Gabrielski - American Technology Research
Brian Chin - Citigroup
Michael Hussey - Mid-Continent Capital
Alexander Bocock - Investment Management of Virginia, LLC

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the third quarter 2008 earnings conference call of McDermott International. 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 Becky and good morning everyone. We appreciate your participation today to discuss our financial results for the 2008 third quarter, which we reported yesterday afternoon.

Joining me on the call this morning, I have John Fees, McDermott''s Chief Executive Officer and Mike Taff, Senior Vice President and Chief Financial Officer.

Before we discuss the quarter, let me remind you that this event is being recorded and a replay will be available for a limited time on our website. In addition, some of our comments today 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 available on our website www.mcdermott.com, including our recently filed Form 10-Q, as well as our Form 10-K for the year ended December 31, 2007 for a discussion of the factors that may cause actual results to differ from management''s projections, forecasts, estimates, and expectations.

With that, I''ll now turn the call over to John.

John A. Fees

Thanks Jay and good morning. I am very pleased to be the Chief Executive Officer of this fine company, and I appreciate the confidence our Board has shown in me for this role. I also look forward to earning your confidence, support and trust as well. I''ve had the opportunity to meet many of our analysts and owners recently, and have found these discussions to be beneficial.

In the months ahead we''re planning an increased number of activities with the financial communities, so that there will be additional opportunities for this interaction.

While I would have preferred strong consolidated results for my first conference call, obviously, this is not the case. These results were not what I was expecting coming into my new role just five weeks ago. So, I appreciate that no one outside the company expected to see it.

We''ve had this quarter...what we have this quarter was two of McDermott''s operating segment''s repeating strong performances but one that is fallen short of our expectations. In a moment, I''ll let Mike provide an overview of our consolidated financials and I''ll come back afterwards to discuss the market environment and some highlights of our other operations.

But the major issue today is the offshore oil and gas construction business. What happened this quarter, the steps we''re taking and how we''ll avoid this situation in the future? So, I''m going to address this issue first.