McDermott International Inc MDR
Q4 2012 Earnings Call Transcript

Transcript Call Date 03/01/2013

Operator: Good day, ladies and gentlemen, and welcome to Q4 2012 McDermott International Inc. Earnings Conference Call. My name is Christine. I'll be your operator for today. At this time all participants are in a listen-only mode. We will conduct a question-and-answer section towards the end of this conference. As a reminder, this call is being recorded.

I would now like to turn the call over to Mr. Steve Oldham, Vice President, Treasury and Investor Relations.

Steven D. Oldham - VP, Treasury and IR: Thank you, Christine. Good morning, everyone. We appreciate you joining us today as we discuss our results for the fourth quarter 2012 which were released through our press release and in Form 10-K yesterday.

Joining me on the call this morning are Steve Johnson, McDermott's Chairman, President and Chief Executive Officer; and Perry Elders our Senior Vice President and Chief Financial Officer.

Before turning the call over to Steve, let me remind you that this event is being recorded and a replay will be available for a limited time on our website. Additionally, our comments will include forward-looking statements and estimates. These forward-looking comments are subject to various risks and uncertainties and reflect management's views as of March 1, 2013.

Please refer to our filings with the SEC which are available on our website, including our Form 10-K for the year ended December 31, 2012 which provides a discussion of factors that may cause actual results to differ from management's projections, forecasts, estimates and expectations. And please note that except to the extent required by the applicable law, McDermott undertakes no obligation to update any forward-looking statements.

With that disclosure, let me now turn the call over to Steve for his opening remarks.

Stephen M. Johnson - President and CEO: Thanks, Steve and thank you to everyone for joining us today. McDermott reported satisfactory results for the fourth quarter with consolidated numbers reflecting strong operating successes, albeit with some productivity challenges on certain projects which I will discuss later.

During the fourth quarter, McDermott reported net income of $40.5 million with earnings per share of $0.17 with our full-year net income of $206.7 million or $0.87 per share. Perry is going to cover our financials in detail. However, we are pleased with the results of our operations and our financial position entering the New Year.

With several significant projects awarded in the fourth quarter, McDermott had bookings of about $725 million and a book-to-bill ratio of about 75%. Our ending backlog was $5.1 billion. In December, we received a letter notice of a significant reward from a large customer in our Middle East segment under which we were authorized to proceed on a portion totaling less than 100 million which has been included in our year-end backlog.

However, under our conservative booking convention we will record the balance of the award into our backlog only when we are authorized to proceed which we expect to receive shortly. We expect the combination of backlog projects and this notice of award to generate about $2.6 billion of revenue in 2013, greatly enhancing our visibility this year. Perry will go into more detail on guidance later in the call as well.

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