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INVESTOR OVERVIEW
MAY 2018
2
McDermott cautions that statements in this presentation which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may
impact actual results of operations. These forward-looking statements include, among other things, statements about global demand, backlog and revenue pipeline, anticipated cost and
revenue synergies, revenue stability, accretion, best-in-class operations, opportunities to capture additional value from market trends, pull-through opportunities, maintenance of a consistent
customer approach to pricing, safety and transition issues, free cash flow, plans to de-lever, capital investment and shareholder value. Although we believe that the expectations reflected in
those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying
assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: the possibility that the expected synergies from the recently completed
combination will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; disruption from the combination making it
more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time and attention related to integration matters; adverse changes in
the markets in which the company operates; the inability to execute on contracts in backlog successfully; changes in project design or schedules; the availability of qualified personnel;
changes in the terms; scope or timing of contracts; contract cancellations; change orders and other modifications and actions by customers and other business counterparties; changes in
industry norms; and adverse outcomes in legal or other dispute resolution proceedings. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results
may vary materially from those expected. You should not place undue reliance on forward-looking statements. For a more complete discussion of these and other risk factors, please see
the company’s most recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2017 and subsequent quarterly
report on Form 10-Q. This presentation reflects the views of the company’s management as of the date hereof. Except to the extent required by applicable law, the company undertakes no
obligation to update or revise any forward-looking statement.
FORWARD LOOKING STATEMENTS
NON-GAAP DISCLOSURES
This presentation includes several “non-GAAP” financial measures as defined under Regulation G of the U.S. Securities Exchange Act of 1934, as amended. McDermott reports its financial
results in accordance with U.S. generally accepted accounting principles, but the company believes that certain non-GAAP financial measures provide useful supplemental information to
investors regarding the underlying business trends and performance of its ongoing operations and are useful for period-over-period comparisons of those operations. The non-GAAP
measures in this presentation include Backlog, Conformed Operating Income and Margin, EBITDA, Adjusted EBITDA and Adjusted Unlevered Pretax Cash Flow. These non-GAAP financial
measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are provided on pages 3, 20, 23 and 24 of this presentation.
3
OVERVIEW
A premier $10 billion1 global, fully vertically integrated onshore-offshore EPCI provider
with a market-leading technology portfolio
Diversified capabilities, well positioned globally in attractive high-growth markets with a $14
billion2 backlog
40,000 employees worldwide with a culture focused on safety, fixed-price lump-sum contracting
and customer engagement
1Revenue is the sum of McDermott and CB&I LTM revenue as of 12/31/17 and does not reflect any pro forma adjustments.2Backlog is the sum of McDermott and CB&I remaining performance obligations of $12.8 billion and backlog from equity method
investments of $1.1 billion as of 3/31/18. Backlog is a non-GAAP measure defined as remaining performance obligations plus backlog
from equity method investments, which we believe provides a better indication of the total unearned value of our new awards.
REVENUE PROFILE
55%45%
US
International
69%
31%
Onshore
Offshore
Complementary geographic portfolio drives diversity and provides enhanced revenue stability
Mix of onshore and offshore diversifies exposure and provides more cyclical balance
BY GEOGRAPHY BY MARKET
89%
11%Fixed price
Cost plus &other
Project control through vertical integration, combined with rigorous risk management, provides differentiation as a
best-in-class fixed-price operator
BY CONTRACT TYPE
4
Positioned to demonstrate SIGNIFICANT EARNING POWER AND IMPROVED MULTIPLES, fueled by anticipated increased capex spend in served markets
Competitively differentiated:
FULLY VERTICALLY INTEGRATED across onshore and offshore, upstream and downstream markets
SCALE AND DIVERSIFICATION across attractive geographies combined with ability to leverage LOCAL CONTENT, MODULARIZATION AND IN-MARKET CAPABILITIES
Proven LEADERSHIP team
Uniquely focused on TECHNOLOGY
World leader in TANKS AND STORAGE VESSELS
Tier one LNG contractor
Versatile MARINE FLEET and strategically located FABRICATION facilities
Committed to driving shareholder value through:
PERFORMANCE, TRANSPARENCY AND ACCOUNTABILITY
Alignment with the INTERESTS OF SHAREHOLDERS
SHAREHOLDER VALUE DRIVERS
5
GROW revenue and earnings by:
Leveraging end-to-end ONSHORE/OFFSHORE TOTAL-
SOLUTION OFFERING to global energy customers
Steadily EXPANDING EPC PORTFOLIO IN PETROCHEMICAL
AND REFINING by capitalizing on pull-through opportunities provided by TECHNOLOGY BUSINESS
Maximizing the benefit of REVENUE AND COST
SYNERGIES, with relentless focus on RISK MANAGEMENT
and OPERATING EFFICIENCY
EXPAND LEADERSHIP POSITION in served markets and technology
Sustain TIER ONE SAFETY PERFORMANCE
Maintain DISCIPLINED CAPITAL ALLOCATION plan
REDUCE TOTAL DEBT, with a targeted total debt/EBITDA ratio of less than 2.0X BY 2020
Maintain competitive level of CAPITAL INVESTMENT
STRATEGIC OBJECTIVES
6
END-TO-END INTEGRATED OFFERING
FROM THE WELLHEAD TO THE STORAGE TANK
7
FULL VERTICAL INTEGRATION OF CAPABILITIES
CONCEPT / PRE-FEED (IO) FEED
TECHNOLOGY LICENSING
PROJECT MANAGEMENT
START-UP & DEBOTTLENECK UPGRADE & REVAMP
TECHNICAL CONSULTING & ENGINEERING
DIGITAL TWIN
APPRAISE / SELECT EXECUTE GREENFEILD/BROWNFIELD DECOMDEFINE
15 TO 40 YEAR ASSET LIFETIME PULL-THROUGH OPPORTUNITIES
FID
ENGINEERING, PROCUREMENT, CONSTRUCTION, INSTALLATION
FU
LLY
VE
RT
ICA
LLY
IN
TE
GR
AT
ED
DECONSTRUCT& DISPOSE
CAPABILITIES
SERVING THE CUSTOMER THROUGHOUT THE LIFE OF THE ASSET
8
INCREASED SCALE CREATES A MORE COMPETITIVE GLOBAL LEADER
MITIGATES RISK OF
CYCLICALITY
INTEGRATED OFFERING
ENHANCES COMPETITIVENESS
LEVERAGES FIXED COST BASE
ACROSS LARGER BUSINESS
Revenue ($Bn, LTM as of 12/31/17)
0
5
10
15
20
MORE INTEGRATED
121 3
Source: Public filings 1Per company press release on merger. 2Sum of McDermott and CB&I LTM as of 12/31/17, does not reflect any pro forma adjustments. 3Per IBES median estimates as at 20-Mar-18.
9
GLOBALLY INTEGRATED, LOCALLY FOCUSED
10
243
385
13,149
17,157
Source: McKinsey Source: NexantSource: BP Energy Outlook 2017
*Liquids, Gas, Coal, Other
2015 2035
246
415
2016 2025 2015 2030
4,416
3,650
Source: Nexant
ESTIMATED GLOBAL LNG DEMAND (MT/yr)
ESTIMATED GLOBAL OIL & GAS
DEMAND*
(MToe)
ESTIMATED GLOBAL REFINED
PRODUCTS DEMAND(MT/yr)
ESTIMATED GLOBAL
PETROCHEMICAL DEMAND(MT/yr)
1.34% CAGR 4.71% CAGR 3.55% CAGR 0.96% CAGR
STRATEGICALLY POSITIONED IN GROWING MARKETS
20352015
11
President & Chief Executive Officer
DAVID DICKSON
President and Chief Executive Officer and member of the Board of Directors (since
December 2013 at MDR).
More than 29 years industry experience, including 11 years with Technip S.A.
Served as President of Technip U.S.A. Inc. from 2008 to 2013, with overall
responsibility for Onshore and Offshore businesses in North America and Latin
America
Prior to Technip, other industry experience across a number of different
geographies
Executive Vice President & Chief Financial Officer
STUART SPENCE
Executive Vice President and Chief Financial Officer (since August 2014 at
MDR).
26 years of financial and operational management experience with companies in
oilfield products and services, and engineering and construction businesses
Prior to McDermott, served as Vice President of Halliburton’s Artificial Lift
business, and previously as Senior Director, Strategy and Marketing for
Halliburton’s Completion and Production Division
Prior to joining Halliburton, served as Executive Vice President and Chief
Financial Officer of Global Oilfield Services from 2008 to 2011 and as Executive
Vice President, Strategy, in May 2011 in connection with the sale to Halliburton
PROVEN LEADERSHIP TEAM
Tony Brown, Integration
Scott Munro,
Corporate Development
Ian Prescott, Asia Pacific
NAME
David Dickson, CEO
Richard Heo,
North, Central & South America
Tareq Kawash,
Europe, Africa, Russia & Caspian
Stuart Spence, CFO
Daniel McCarthy, Technology
Brian McLaughlin, Commercial
Linh Austin,
Middle East & North Africa
29+ years
20+ years
26+ years
28+ years
40+ years
20+ years
25+ years
Jonathan Kennefick,
Project Execution & Delivery
25+ years
25+ years
INDUSTRY EXPERIENCE
Steven Allen, Human Resources
John Freeman, Legal
Gentry Brann, Communications
35+ years
30+ years
25+ years
16+ years
30+ years
12
PROVEN MODEL FOR UNLOCKING VALUE
Industry Leading,
Vertical Execution
Capabilities
Rigorous
Oversight &
Cost Control
Strategic Contract
Management
Customer
Focused
Standardized
Bidding Specs
& Project
Execution
Common
Culture
MAXIMIZE VALUE BY LEVERAGING OPERATIONAL EXPERTISE
13
THE ONE MCDERMOTT WAY: DISCIPLINED RISK MANAGEMENT AND EXECUTION
RESULTS
BIDDING
All EPCI bids, onshore and offshore, prepared by central Proposals & Estimating function
Each bid has a suitably qualified project manager, and the bid engineering is carried out in-
house
All individual bids are subject to a standardized rigorous management review, including: cost
estimation scrutiny, project risk management (through a formal risk management procedure)
Ensures optimal allocation
of resources
Consistency of approach
EXECUTION
Assets: strategically positioned to address the markets most suitable for each
Engineering Function: executes engineering in-house, using global centers of excellence
Procurement Function: leverages the Procurement Global Network. Technical and commercial
lessons and opportunities are shared globally with all projects
Fabrication Function: Fabrication scope is carried out in company facilities. All fabrication
facilities operate to the same standards and processes
Installation Function: in-house execution of nearly all of a project’s installation scope
Construction: Targeted use of direct hire model provides heightened level of project controls
Continuity of personnel
and knowledge retention –
lessons learned are
globally shared across
projects
Engineering is focused on
constructability
Safety and process
standardization of
fabrication operations
Certainty of project
schedule
ENSURES EXECUTION FLEXIBILITY – A FUNDAMENTAL COMPONENT OF PROJECT SUCCESS
PR
OJ
EC
T M
AN
AG
EM
EN
T
14
More than 100 licensed technologies Primary Business Focus: Process licensing, Related catalysts
Major Operating Facilities: New Jersey, Germany, India
3,500 patents/patent applications Extensive petrochemical and refining technologies portfolio:
Dehydration (#1; Chevron-Lummus JV)
Ethylene (#2)
Polypropylene (#2)
Clean fuels and residuum upgrading (#2)
Leverage McDermott’s reputation and strong commercial
presence in key markets such as Saudi Arabia, Qatar, India,
Mexico, Indonesia
Crude to chemicals technology
LUMMUS: TIER 1 TECHNOLOGY PROVIDER
Petrochemicals: Olefins & Aromatics
Refining & Gasification: Refining Process; Coal / Petcoke Gasification
Novolen Technology: Polypropylene & Polyethylene
Chevron Lummus Global (JV with Chevron): Hydroprocessing, including
Base Oils & Heavy Oil Upgrading
Consulting: Advisory services in Energy, Petchem and Refining Markets
GENERATES STEADY AND ATTRACTIVE RETURNS SELLING LICENSES/CATALYSTS AND SIGNIFICANT PULL-THROUGH
FOR DOWNSTREAM PROJECTS
OVERVIEW
STRENGTHS
OPPORTUNITIES
BUSINESS LINES
COMPETITIVE LANDSCAPE
15
More than a century of experience; widely regarded as world’s premier tank builder
Built 46,000 structures in more than 100 countries
Solutions for the oil and gas, power, water and wastewater, and metals and mining industries include:
Atmospheric and ambient temperature storage tanks
Low temperature and cryogenic storage systems
Liquefied Natural Gas (LNG) storage
Storage terminals for bulk liquids and refrigerated products
Pressure spheres
Chilled water Thermal Energy Storage (TES) tanks
Water storage tanks
LEADER IN STORAGE VESSELS & TANKS
16
Robust revenue pipeline in 2018 and 2019, including multi-billion dollar projects in each served market
Recent noteworthy awards:
Saudi Aramco Safaniya Phase 6 ($750m-$1.5 billion)
ADNOC, EP and fabrication for refinery expansion project, UAE ($500m)
Maersk, Tyra EPCI offshore, North Sea ($500m-$750m)
BP, Tortue Ahmeyim Field development, EPCI subsea west Africa (with BHGE)($500m-$750m)1
Multiple technology license packages for petrochemical and refinery projects
Joint development agreement with Saudi Aramco for crude-to-chemicals technologies
COMMERCIAL POSITION
1 McDermott International, Inc. and Baker Hughes, a GE company were selected for the front-end engineering design (FEED) studies in advance of a substantial engineering, procurement, construction and installation (EPCI) contract for BP’s Tortue/Ahmeyim Field
Development. The agreement contains a mechanism to allow transition of the contract to a lump sum EPCI contract at a later date. The value stated is for the lump sum contract.
17
DIVERSE CUSTOMER BASE POISED TO DRIVE SIGNIFICANT REVENUE SYNERGIES
MAJOR CUSTOMERS
Americas
Global
Middle
East
Asia
Middle
East
Global
Americas
Asia
Africa
OPPORTUNITY TO PROVIDE END-TO-END SOLUTIONS
TO OUR SHARED CUSTOMERS
OPPORTUNITIES TO CAPTURE INCREMENTAL REVENUE
Greater certainty in delivery and risk management will
leverage geographic positioning and customer relationships
in combination with vertical integration to generate
incremental revenue
LEVERAGING OUR DIVERSE GEOGRAPHIC REACH
TO SOURCE INCREMENTAL OPPORTUNITIES
Example: existing crude-to-chemicals technology agreement with
Saudi Aramco could serve as a platform for potential FEED &
EPC work, aided by strong McDermott relationship
Modularization presents major opportunity for revenue
synergies by leveraging CB&I’s relationships in Americas
and McDermott’s relationships internationally to generate
incremental business
McDermott CB&I
18
$93
$77$153
$27
$350m
SUBSTANTIAL COST SYNERGIES
SAVINGS AREA SOURCETOTAL
SYNERGIES
SUPPLY CHAIN
Improved commodity/category buying
power; Supplier consolidation;
Improved purchase agreements$153m
G&A
Centralization and/or outsourcing of
transactional functions; Right-sizing
the overall corporate support core
$93m
OPERATIONS
Pooling of operations support
resources in high value centers;
Facility footprint rationalization;
Harmonizing project management
layers
$77m
OTHER
Adopting more conservative travel
and expense policy, Eliminating
certain benefits and perks; Reducing
BOD and insurance costs
$27m
TOTAL $350m
Note: Numbers may not tie due to rounding
Expected to generate
annualized cost
synergies of $350m
in 2019 (in addition to
the $100m cost
reduction program
CB&I implemented in
2017)
SAVINGS DO NOT FULLY REFLECT ADDITIONAL BENEFITS OF TRANSITION TO NEW COMBINED RIGOROUS
COST CONTROL CULTURE
~$210m cost to achieve
synergies expected –
~$170m in 2018,
~$40m in 2019
19
REVENUE
2.6 3.0 0.6
8.6 6.7
1.7 0.0
5.0
10.0
15.0
2016 2017 Q1 2018
(US$bn)
McDermott CB&I
CAPITAL EXPENDITURES
ADJUSTED EBITDA1,2
0.3 0.4 0.1
0.8 0.7
0.1
0.4 0.4
0.1
1.4 1.5
0.3
12.8% 15.1% 13.7%
0.0
0.5
1.0
1.5
2.0
2016 2017 Q1 2018
(US$bn)
McDermott CB&I Synergies Adj. EBITDA Margin
ADJ. EBITDA LESS CAPEXCAPITAL EXPENDITURES
0.23
0.12
0.02
0.05
0.04
0.01
0.27
0.16
0.03
0.0
0.1
0.2
0.3
2016 2017 Q1 2018
(US$bn)
McDermott CB&I
ADJUSTED UNLEVERED PRETAX CASH FLOW 2
(0.0) 0.0 0.0
1.0
0.4
(0.2)
0.4
0.4
0.1
1.3
0.8
(0.1)
(0.5)
0.0
0.5
1.0
1.5
2016 2017 Q1 2018
(US$bn)
McDermott CB&I Synergies
Amounts may not foot due to rounding.1Adjusted EBITDA includes adjustments for loss on sale of operations, change-in-control related stock-based compensation, project charges for Focus Projects, net gain from insurance and restructuring costs for CB&I. Historical Adjusted
EBITDA figures include $350mm of publicly announced run-rate cost synergies. 2Adjusted EBITDA and Adjusted Unlevered Pretax Cash Flow are non-GAAP financial measures and are not prepared on the basis of GAAP, SEC rules and regulations or any other applicable standard. See
pages 23 and 24 for additional detail.
SCALE AND MARKET POSITION TO GENERATE SIGNIFICANT CASH FLOW
20
STRONG FINANCIAL PROFILE
NET WORKING CAPITAL (b i l l i ons )
BACKLOG2 ($Bn) 15.3
REVENUE ($Bn)
COMBINED FINANCIAL HIGHLIGHTS1
as of 12/31/17
Adj. EBITDA3 ($Bn)
CAPEX ($m)
EBITDA3 ($m)
9.7
1.111.5%
163
171
(1.2)
Expected annualized
cost synergies of $350m4
will be incremental to
combined results, for a
total Adjusted EBITDA
after synergies of $1.4B
1Does not reflect any pro forma adjustments.2Remaining performance obligations (“RPOs”) represent the dollar amount of revenues we expect to recognize in the future from contracts
that are in progress. The break-out of December 31, 2017 backlog including equity method backlog represents a non-GAAP financial
disclosure which we believe provides a better indication of the total unearned value of our new awards.3EBITDA and Adjusted EBITDA are non-GAAP financial measures and are not derived from pro forma financial information prepared on the
basis of GAAP, SEC rules and regulations or any other applicable standard. See page 23 for additional detail. 4Synergies expected to be fully run-rate by end of 2019.
RPOs 2 ($Bn)
BACKLOG OF EQUITY METHOD INVESTMENTS ($ Bn)
14.1
1.2
21
CAPITAL STRUCTURE
1Restricted cash includes $319 million of cash in escrow underlying cash collateral for LCs.2Senior secured term loan interest is LIBOR plus 5%.3Total debt includes $42 million of McDermott’s North Ocean 105 loan, vendor equipment financing and capital lease
obligations.4Leverage ratio debt is defined per the credit agreement as total debt plus outstanding financial letters of credit of $119
million less cash collateral for LCs of $319 million. Our pro forma combined net debt, which is equal to total debt less
cash, cash equivalents and restricted cash is $2,559 million.5Total capitalization is equal to total debt of $3,602 million and historical combined shareholders’ equity of $2,121 million.6The leverage ratio, calculated in accordance with the credit agreement, is equal to leverage ratio debt divided by EBITDA
as defined by the credit agreement. EBITDA has been adjusted for transaction-related and integration costs incurred
related to the combination with CB&I. The credit agreement also allows annualized cost synergies, including certain costs
to achieve such synergies, to be added back to EBITDA.
TOTAL DEBT3
CASH & CASH EQUIV
RESTRICTED CASH1
10.625% SIX-YEAR UNSECURED NOTES
SENIOR SECURED TERM LOAN2
MINORITY INTEREST
TOTAL CAPITALIZATION5
LEVERAGE RATIO DEBT4
718
PRO FORMA CAPITAL STRUCTURE
(FUNDED)Financial Metrics as of 3/31/18 with Debt as of Closing
325
1,300
2,260
3,602
171
3,401
CREDIT AGREEMENT LEVERAGE RATIO 6
5,723
3.0x
TARGETED TOTAL DEBT/EBITDA RATIO OF LESS THAN 2.0X BY 2020
LETTER OF CREDIT FACILITY
REVOLVING CREDIT FACILITY
BILATERAL LETTERS OF CREDIT
1,390
1,000
1,300
PRO FORMA CAPITAL STRUCTURE
(UNFUNDED)Financial Metrics as of 3/31/18 with Debt as of Closing
22
FOCUS PROJECTS
ORIGINAL BOOKING VALUE REPRESENTS THE CONTRACT VALUE AT TIME OF AWARD TO MCDERMOTT OR FOR MCDERMOTT’S PROPORTIONATE SHARE
OF THE CONSORTIUM, IGNORING SUBSEQUENT MODIFICATIONS TO CONTRACT PRICE AND SUBCONTRACTS AWARDED TO CB&I WHICH ARE SIGNIFICANT
CALPINE FREEPORT CAMERON
PROJECT TYPE Power LNG LNG
ORIGINAL BOOKING VALUE ~$0.3 billion ~$2.0 billion ~$3.2 billion
UNIQUE CHARACTERISTICS
• Labor productivity and absenteeism
• Aggressive bidding by predecessor
• On-site assembly of third-party product
• Impacted by Hurricane Harvey • FEED by third party
• Significant quantity growth
• Site reclamation (e.g. soil quality)
• Lower than anticipated productivity
• Adverse weather-related delays
ASSESSMENT
• Claims settlement announced in Q1 2018
(subject to final documentation) with the
project owner, which resulted in the resolution
of schedule liquidated damages
• Indirect costs of Hurricane Harvey still being
assessed but expected to be fully covered by
force majeure provisions of contract
• Zachry (JV Partner) is managing and
performing project construction phase and has
a demonstrated track record
• Announced settlement December 19th,
2017, resolving all past commercial issues,
resetting the schedule for any potential
liquidated damages, increasing certainty of
project schedule resulting in a de-risking of the
project
STATUS
~84% complete as of Q1 2018 ~81% physically complete for the total
project as of Q1 2018;
Project remains profitable
~84% complete as of Q1 2018
TARGETED COMPLETION Q4 2018 Q3 2019 - Q2 2020 Q4 2019
23
COMBINED HISTORICAL EARNINGS1
1Combined results do not reflect any pro forma adjustments.
2Operating income and margin have been modified to include legacy McDermott’s loss from investments in
unconsolidated affiliates to conform to legacy CB&I’s presentation. Conformed operating income and margin,
which is equal to combined operating income and margin including legacy McDermott’s loss from
unconsolidated affiliates, is a non-GAAP measure. We believe the presentation of conformed operating income
and margin provides comparative financial information for the combined company on the same basis of
presentation, and our management uses this measure for making such comparisons.3EBITDA is defined as net income plus depreciation and amortization, interest expense, net and provision for
income taxes. Adjusted EBITDA is defined as EBITDA less the adjustments detailed herein. We have included
EBITDA and Adjusted EBITDA disclosures in this presentation because EBITDA is widely used by investors for
valuation and comparing financial performance with the performance of other companies in the industry and
because Adjusted EBITDA provides a consistent measure of EBITDA relating to the underlying business. McDermott
management also uses EBITDA and Adjusted EBITDA to monitor and compare the financial performance of the
operations. EBITDA and Adjusted EBITDA do not give effect to the cash that must be used to service debt or pay
income taxes, and, thus, do not reflect the funds actually available for capital expenditures, dividends or various
other purposes. In addition, the presentation of EBITDA and Adjusted EBITDA may not be comparable to similarly
titled measures in other companies’ reports. You should not consider EBITDA or Adjusted EBITDA in isolation from,
or as a substitute for, net income or cash flow measures prepared in accordance with U.S. GAAP.4Represents a charge recorded in the fourth quarter 2016 related to the establishment of a reserve for a
Transaction Receivable associated with the sale of CB&I’s former Nuclear Operations. 5In connection with the Business Combination Agreement relating to the McDermott/CB&I combination, change-
in-control provisions were triggered for certain CB&I management, which resulted in their equity-based awards
(restricted stock units) becoming fully vested. The additional compensation expense was primarily recorded to
selling and administrative expense.6Represents the impact of significant changes in estimates on two U.S. gas turbine power projects and two U.S.
LNG export facility projects.7Represents transaction and integration costs associated with the combination with CB&I incurred to date, as well
as restructuring costs associated with various cost saving initiatives.8Represents the net gain from insurance proceeds received (approximately $99.0 million) in excess of associated
costs (approximately $36.3 million) for a fabrication facility that was damaged during Hurricane Harvey. 9In 2016, McDermott recorded impairment charges of $55 million related to certain marine assets, including $32.3
million of impairment related to our Agile vessel following the customer's termination of the vessel's charter in May
2016. 10
During the third quarter of 2016, McDermott mutually and amicably exited its joint venture in Malaysia. We sold
our joint venture interest and recorded a $5.0 million gain to other income (expense), net. 11
In the fourth quarter of each year, McDermott records non-cash actuarial mark-to-market adjustments for its
benefit plans. These adjustments are recorded in selling, general, and administrative expenses in accordance with
our pension accounting policy. Actuarial gains and losses are primarily driven by changes in the actuarial
assumptions, discount rates, and actual return on pension assets.12
Represents identified cost savings our integration team plans to achieve by the end of 2019, leveraging a cost
conscious culture on the combined business.
COMBINED ANNUAL RUN-RATE ADJUSTED EBITDA IN EXCESS OF $1 BILLION BEFORE ANTICIPATED COST SYNERGIES
($ in millions) TY'16 TY'17 Q1'18
Revenues 11,236 9,658 2,353
Operating income, as reported 570 29 176
Legacy McDermott loss from investments in unconsolidated affiliates (4) (14) (4)
Conformed operating income2
566 15 172
Conformed operating margin2
5.0% 0.2% 7.3%
Plus:
Depreciation and amortization 199 189 42
(Income) loss from NCI (73) (31) 0
Other non-operating expenses (1) (1) 2
EBITDA3
690 171 216
EBITDA margin 6.1% 1.8% 9.2%
Non-GAAP adjustments:
Charges related to Nuclear Operations sale4
148 - -
Long-term incentive change in control expense5
- 12 -
Significant project charges6:
IPL Eagle power 33 182 -
Calpine power 164 222 -
Freeport LNG - 76 -
Cameron LNG - 390 -
Transaction, integration and restructuring costs7
11 124 19
Net gain from insurance proceeds8
- (63) -
Impairment loss9
55 - -
Gain on JV exit10
(5) - -
Non-cash actuarial loss (gain) on benefit plans11
(5) (5) -
Adjusted EBITDA3, before anticipated synergies 1,091 1,109 235
Adjusted EBITDA margin, before anticipated synergies 9.7% 11.5% 10.0%
Run-rate anticipated cost synergies12
350 350 88
Adjusted EBITDA3, after anticipated synergies 1,441 1,459 323
Adjusted EBITDA margin, after anticipated synergies 12.8% 15.1% 13.7%
COMBINED COMPANY
24
COMBINED HISTORICAL ADJUSTED UNLEVERED PRETAX CASH FLOW1
$0
$500
$1,000
$1,500
$2,000
Adjusted EBITDA Change in workingcapital assets
Change in workingcapital liabilities
Capitalexpenditures
Adjusted unleveredpretax cash flow
$0
$500
$1,000
$1,500
$2,000
Adjusted EBITDA Change in workingcapital assets
Change in workingcapital liabilities
Capitalexpenditures
Adjusted unleveredpretax cash flow
($100)
$0
$100
$200
$300
$400
$500
Adjusted EBITDA Change in workingcapital assets
Change in workingcapital liabilities
Capitalexpenditures
Adjusted unleveredpretax cash flow
FULL YEAR 2016
FULL YEAR 2017
FIRST QUARTER 2018
SIGNIFICANT HISTORICAL UNLEVERED PRETAX CASH FLOW ON AN ADJUSTED BASIS1Adjusted unlevered pretax cash flow is a non-GAAP measure we define as adjusted EBITDA, plus the net change in net working capital (as defined
on page 27), less capital expenditures. We believe investors consider adjusted unlevered pretax cash flow as an important measure because it
generally represents funds available to pursue opportunities that may enhance shareholder value, such as making acquisitions or other investments.
Our management uses adjusted unlevered pretax cash flow for that reason. Combined results do not reflect any pro forma adjustments.
($ in millions) TY'16 TY'17 Q1'18
Adjusted EBITDA, after synergies 1,441 1,459 323
Working capital, beginning balance (1,509) (1,682) (1,180)
Working capital, ending balance (1,682) (1,180) (825)
Net change in working capital 173 (502) (355)
Capital expenditures (275) (163) (26)
Adjusted unlevered pretax cash flow 1,339 794 (58)
COMBINED COMPANY
25
COMBINED HISTORICAL BALANCE SHEET1
1Represents combined balance sheet data from McDermott and CB&I’s historical filings, as presented on the face of
each company’s respective financial statements. Combined balances do not reflect any pro forma adjustments and
do not adjust for any differences in classification or presentation between legacy McDermott and CB&I.
STRONG COMBINED HISTORICAL BALANCE SHEET
($ in millions) TY'16 TY'17 Q1'18 TY'16 TY'17 Q1'18
Assets Liabilities and Equity
Cash and cash equivalents 1,087 745 718 Current maturities of long-term debt 552 1,184 1,170
Restricted cash and cash equivalents 16 18 6 Revolver borrowings 408 1,102 1,388
Accounts receivable - trade, net 823 1,088 1,161 Accounts payable 1,138 1,251 1,142
Accounts receivable - other 37 41 53 Accrued and other current liabilities 1,295 1,089 960
Inventory 190 102 113 Advance billings on contracts 1,588 1,308 1,196
Contracts in progress 730 937 899 Income taxes payable 18 35 41
Current assets of discontinued operations 415 - - Current liabilities of discontinued operations 247 - -
Assets held for sale - 18 18 Total current liabilities 5,246 5,969 5,896
Other current assets 577 317 268 Long-term debt 1,992 513 513
Total current assets 3,874 3,266 3,237 Self-insurance liabilities 17 16 17
Property, plant and equipment, net 2,193 2,085 2,081 Pension liabilities 19 14 15
Accounts receivable - long-term retainages 127 39 40 Non-current income taxes 68 127 120
Goodwill 2,814 2,836 2,839 Non-current liabilities of discontinued operations 5 - -
Other intangible assets 219 196 190 Other liabilities 557 549 540
Investments in unconsolidated affiliates 182 214 215 Total liabilities 7,905 7,188 7,100
Deferred income taxes 751 18 17 Common stock 251 294 296
Non-current assets of discontinued operations 462 - - Capital in excess of par value 2,477 2,406 2,374
Other assets 438 541 602 Retained earnings (Accumulated deficit) 1,144 (150) (51)
Accumulated other comprehensive loss (463) (367) (355)
Treasury stock (440) (351) (313)
Stockholders' equity 2,970 1,832 1,950
Noncontrolling interest 187 175 171
Total equity 3,157 2,007 2,121
Total assets 11,062 9,195 9,221 Total liabilities and equity 11,062 9,195 9,221
COMBINED COMPANY
26
COMBINED HISTORICAL WORKING CAPITAL1
• Historically, working capital used to be a source of cash due to earlier advances
on contracts
• Company made the strategic decision to focus on NOC’s during the commodity
downturn that started in late 2014
• NOC’s have longer term views with respect to capital investment
• With NOC’s, contracts are structured with revenue milestones that are more
backend loaded, leading to positive working capital swings
• In late 2015, key customer Pemex extended payment terms to 180 days for
all suppliers due to budget austerity caused by low commodity prices
MCDERMOTT (LEGACY) COMMENTARY
• Onshore contracts are structured with earlier cash payments in the process
• As a result, negative working capital is relatively normal for onshore E&C
companies
• Recent CB&I working capital has been inflated due to large scale of the
Cameron and Freeport LNG projects
• Expected to normalize by YE 2018 as the two LNG projects roll off
CB&I (LEGACY) COMMENTARY
2,356 2,502 2,513
4,039 3,682
3,338
(1,682)(1,180)
(825)
(2,000)
(1,000)
-
1,000
2,000
3,000
4,000
5,000
TY'16 TY'17 Q1'18
Working Capital
Assets
Working Capital
LiabilitiesNet Working Capital
($ in millions) TY'16 TY'17 Q1'18
Working capital assets 720 1,026 998
Working capital liabilities 661 683 614
Net working capital 59 343 384
($ in millions) TY'16 TY'17 Q1'18
Working capital assets 1,636 1,476 1,515
Working capital liabilities 3,377 2,999 2,724
Net working capital (1,741) (1,523) (1,209)
($ in millions) TY'16 TY'17 Q1'18
Working capital assets 2,356 2,502 2,513
Working capital liabilities 4,039 3,682 3,338
Net working capital (1,682) (1,180) (825)
MCDERMOTT (LEGACY)
CB&I (LEGACY)
COMBINED COMPANY
1Represents combined balance sheet data for McDermott and CB&I from public filings. Working capital
assets include all current assets excluding cash, cash equivalents, restricted cash, and current assets of
discontinued operations. Working capital liabilities include all current liabilities excluding notes payable,
current maturities of long-term debt, and current liabilities of discontinued operations. Combined balances
do not reflect any pro forma adjustments and do not adjust for any differences in classification or
presentation between legacy McDermott and CB&I.
27
COMBINED HISTORICAL WORKING CAPITAL DETAIL1
1Represents combined balance sheet data for McDermott and CB&I from public filings. Working capital
assets include all current assets excluding cash, cash equivalents, restricted cash, and current assets of
discontinued operations. Working capital liabilities include all current liabilities excluding notes payable,
current maturities of long-term debt, and current liabilities of discontinued operations. Combined balances
do not reflect any pro forma adjustments and do not adjust for any differences in classification or
presentation between legacy McDermott and CB&I.
($ in millions) TY'16 TY'17 Q1'18
Working capital assets
Accounts receivable—trade, net 823 1,088 1,161
Accounts receivable—other 37 41 53
Inventory 190 102 113
Contracts in progress 730 937 899
Assets held for sale - 18 18
Other current assets 577 317 268
Subtotal 2,356 2,502 2,513
Less: Working capital liabilities
Accounts payable 1,138 1,251 1,142
Accrued and other current liabilities 1,295 1,089 960
Advance billings on contracts 1,588 1,308 1,196
Income taxes payable 18 35 41
Subtotal 4,039 3,682 3,338
Total assets (1,682) (1,180) (825)
COMBINED COMPANY
28
EXTERNAL REPORTING SEGMENTS
North/Central/South America (NCSA)
Europe/Africa/Russia/Caspian (EARC)
Middle East/North Africa (MENA)
Asia/Pacific (APAC)
Technology (TECH)
Corporate
29
SUMMARY: SHAREHOLDER VALUE DRIVERS
Positioned to demonstrate SIGNIFICANT EARNING POWER AND IMPROVED MULTIPLES, fueled by anticipated increased capex spend in served markets
Competitively differentiated:
FULLY VERTICALLY INTEGRATED across onshore and offshore, upstream and downstream markets
SCALE AND DIVERSIFICATION across attractive geographies combined with ability to leverage LOCAL CONTENT, MODULARIZATION AND IN-MARKET CAPABILITIES
Proven LEADERSHIP team
Uniquely focused on TECHNOLOGY
World leader in TANKS AND STORAGE VESSELS
Tier one LNG contractor
Versatile MARINE FLEET and strategically located FABRICATION facilities
Committed to driving shareholder value through:
PERFORMANCE, TRANSPARENCY AND ACCOUNTABILITY
Alignment with the INTERESTS OF SHAREHOLDERS
