2. Forward-Looking Statements
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, 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 McDermott’s actual performance and
results of operations. The forward-looking statements in this presentation include, but are not limited to, statements
about backlog, opportunity pipeline and revenue pipeline and the anticipated breakdown and timing of award of the
associated contracts and expected backlog roll-off, to the extent these may be viewed as indicators of future
revenues or profitability, market trends and overall expected market size, the expected specifications of and
operations related to the DLV 2000, expected benefits from our joint ventures and alliances, the expected scope,
execution, timing and value of projects discussed herein, expected benefits and savings resulting from our cost
saving initiatives and McDermott’s earnings and other guidance for 2016. 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: adverse changes in the markets in which
we operate or credit markets, our inability to successfully execute on contracts in backlog, changes in project design
or schedules, the availability of qualified personnel, changes in the scope, terms or timing of contracts, contract
cancellations, change orders and other modifications and actions by our customers and business partners, difficulties
executing on the project, changes in industry norms and adverse outcomes in legal and 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 McDermott’s annual and quarterly filings with
the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31,
2015. This presentation reflects management’s views as of the date hereof. Except to the extent required by
applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.
|2
3. Today’s Agenda
|3
• Welcome
• Introduction of McDermott’s Leadership Team
− David Dickson, President and CEO
− Stuart Spence, Executive Vice President and CFO
− Hugh Cuthbertson, Vice President, Asia
− Jonathan Kennefick, Senior Vice President, Project Execution &
Delivery
− John Macpherson, DLV2000 Project Manager
• McDermott Overview
− David Dickson, Stuart Spence, Hugh Cuthbertson
• Focus on the Derrick Lay Vessel DLV2000
− Jonathan Kennefick
• Question & Answer Session
• Your Tour of the DLV 2000
− John Macpherson
• Lunch and Additional 1-on-1 Opportunities
4. McDermott today
|4
• A vertically integrated
offshore and subsea
engineering,
procurement,
installation and
construction company
• In-market fabrication
yards and a versatile
marine fleet
• Focus on long-term
relationships with
leading energy
customers, building
strong core capabilities
and deepening talent
5. Today, we will focus on positioning for the future
Maximize
Profitable Wins
Capture Value Through
Integrated Capabilities
Deliver Value
Through Execution
Strategic Themes
in Action
Perspective
on the Future
QHSES
People &
Project
Management
Partnerships
Market
Trends
Geographic
Outlook
Alignment,
Engagement
& Solutions
In-market
Capabilities
2016 OutlookEngineering
Procurement
Construction
Offshore
Installation
|5
Priorities
7. Short-term perspective:
Market Trends
|7
• Sharp decline in existing
production could be amplified
due to lack of investment
• Sustained low oil price creating a
lower for longer environment
Long-term perspective:
1) Source: EIA Spot Brent Price
$/Barrel
2-Year Look Ahead:
• Offshore is most significant
market segment
Offshore
48%
Subsea
33%
Fab Only
19%
Overall Market Size ~$96BGlobal Oil Supply by Type
1) Source: Exxon Dec 2015
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
Jan14
Mar14
May14
Jul14
Sep14
Nov14
Jan15
Mar15
May15
Jul15
Sep15
Nov15
Jan16
Mar16
May16
Jul16
Sep16
Nov16
Jan17
Mar17
May17
Jul17
Sep17
Nov17
Actuals Rolling Average Forecast
Brent Outlook to 20181
8. Geographic diversity provides through cycle opportunities
|8
ClientTypesProjectTypes
Americas, Europe, Africa
$18B
Middle East
$10B
Asia
$7B
Middle East NOCs and Brownfield Projects Generate Confidence to Maximize Profitable Wins
NOC = National Oil Company; IOC = International Oil Company; Note: IOCs include supermajors and all other non-NOCs
1) There is no assurance that projects in the bid pipeline (targets and backups) will be awarded to McDermott
2) As of September 30, 2015
2YearOpportunity
Pipeline1,2
NOC
16%
IOC
84%
NOC
100%
NOC
21%
IOC
79%
Greenfield
67%
Brownfield
33%
Greenfield
4%
Brownfield
96%
Greenfield
86%
Brownfield
14%
9. Capture Value Through Integrated Capabilities
Engineering
Procurement
Construction
Offshore
Installation
10. Engineering: Transforming our value
|10
Goal: Engineering as a Differentiator
• Position to Focus on the Broader Picture:
Created Oil and Gas JV and new focus on
Front End Engineering Design (FEED)
• Expertise and Capabilities:
− Leaders in Brownfield; Deep knowledge in
Greenfield
− Simple installation solutions to complex
process design
• Competitive Cost: In-market specialists
supported by high value engineering center,
streamlined process
Driving Design Efficiency and Early Engagement
11. Procurement: Transforming the approach
|11
Services
Specialized
Standard
• Advantaged Cost: Increase competitiveness through volume rebates, structured agreements and
specification changes
• Robust Supply Base: Structure agreements and establish a set of suppliers to leverage
• Technical Depth: In-house specialist expertise integrated across functions
Procurement Adding Value by Delivering On-Time and Reducing Cost
~$44M = 10% on Addressed Spend
Vessel
Chartering
~$14M
(10%)
Concession
Requests
~$7M
(8%)
Volume
Rebates
~$6M
(4%)
Welding
Consumables
~$4M
(24%)
Survey
Services
~$4M
(30%)
Logistics
~$2M
(12%)
Travel
~$7M
(29%)
1) Savings is the estimated annual spend reduction using a historical baseline, including historical project, supplier,
category, and region mix
New procurement approach generating savings
12. Construction: Driving to a global standard of efficiency
|12
Jebel Ali / Dammam BatamAltamira
• Global, in-market fabrication facilities with in-house
full control of cost, quality and schedule
• Instituted fabrication council to drive global process
while streamlining supervision and structure
• Creating the ability to workshare
• Optimized processes and procedures
• JVs providing access to low cost and in-market
solutions
• A relentless culture of improvement
China
Malaysia
Control of Fabrication is an EPCI Sustainable Competitive Advantage
13. Installation: Shallow to deep throughout the lifecycle
|13
Dynamically Positioned
Vessel
Anchored Vessel
Hook-up &
Commissioning
Versatile Fleet with Broad Capabilities is a Differentiator
• Class 3 dynamically positioned vessel with a
2,200-ton crane & deepwater S-lay pipelay system
• Fast transit speeds make the DLV2000 a global
asset
• Scheduled to work in 2016 and 2017 on the INPEX
Ichthys and Woodside Greater Western Flank
Phase II Projects in Australia
• A full solution of shallow water fleet capabilities
with versatile subsea fleet
• Supported by in-market teams
• Expertise in complex brownfield installation,
hook up and commissioning
Heavy Lift and High-End
Pipelay Vessel
DLV 2000:
15. QHSES: Performance is industry leading for the last 5 years
|15
Taking the Lead with Safety
0.00
0.20
0.40
0.60
0.80
1.00
1.20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Recordable Incident Rate
(TRIR) Over a Decade
Global TRIR OGP TRIR IMCA TRIR
Marine Competitors Average
International O&G
Producers Average
IncidentRate
16. People and Project Management
|16
Strong Talent and Core Capabilities Integrating All Aspects of the Project Life Cycle
Schedule
Assurance
Contract
Management
Core
Operating
Rhythm
Strategic
Project
Management
Risk /
Opportunity
Management
Competency
Cost
Optimization
Establishing the “McDermott Way” as the industry benchmark for delivering complex, offshore
and subsea capital projects
• Renewed focus on core capabilities and
deepening talent sets a strong foundation
― Established workforce of expertise and
accountability
― Continued focus on growing, developing
and expanding upon revitalized
organization and talent
• Created a global project management function
to ensure consistent execution and control
across areas and projects
• Focus on the key 6 dimensions of project
management
― Core operating rhythm based on specific
milestones with clear risk mitigation
strategies
― Maximize opportunities through
contract management
17. Partnerships and Alliances: Building capability
|17Seamless Partnership Integration to Deliver Customer Projects
High Efficiency
Low Cost
Ultra Deep
Water
JSD6000
Full Field
Concept and
FEED
Text
Technology
Path to
Ownership
NO 105
NO 102
Geographical
Reach
THHE, Ghana
19. • Early Engagement: Full field development
− Increased delivery certainty with early de-risking
of development concept
− Early engagement provides opportunity to secure
EPCI tender following FEED
• Customer Alignment: Saudi Aramco’s Lump Sum
award under LTA II
− Largest single award in McDermott’s Middle East
history
− Full scale EPCI contract utilizing specialized
shallow water installation vessels
• Integrated Solutions: Inpex Ichthys scope of work
− Full engineering to design, with procurement of
over $600M of complex and unique components
− Installation of over 85 mile of rigid flowlines, 35
miles of umbilicals and 16 miles of flexible risers
procured, installed and tested
− Fabrication of 48 structures, total weight >27,000
tons, with In-market execution
Our Strategic Themes in Action
|19
Customer Alignment Combined with Integrated Capabilities
Generates Differentiator in Market Solutions
20. In-market Capabilities: Maintaining the lead in Middle East
|20
The Focus
• Deepen customer alignment and
relationships through early engagement and
cultural fit
• National oil companies who remain
committed to production levels and
brownfield and producing basins with
lowest production costs
• Invest in new resource skill sets and
required assets to address the new
customer projects
Unparalleled Company History and Experience in Offshore EPCI
To Deliver
• Trusted brand and strong customer
relationships
• Evolving capabilities in a robust market
• Project solutions to maintain customer
output
Region Totals
514 Structures
1,681 total mi of
pipelines
7,500 mi of cable
Qatar
130
451 mi
Key Clients
UAE
77
422 mi
Key ClientsSaudi Arabia
Key Client
284
696 mi
Kuwait &
Neutral Zone
23
112 mi
Key Client
Engineering Offices in
Al Khobar and Dubai
Fabrication Facility in
Dubai and Dammam
Experience: Offshore Structures and Pipelines Installed Since 1980
22. 2015 Full-Year Financial Highlights
|22
• High level of order intake led
to largest increase in backlog
since 2012
• 2015 Revenue driven
primarily by Middle East and
Asia
• 2014 Adjusted Operating
Income included gains on sale
of assets of $46.2M
• $189M of Capex related to
DLV2000 deferred from 2015
to 2016
• Adequate coverage on
Covenant EBITDA
FY’15 FY’14
Year-over-Year
Delta
Orders $3,701 $1,100 $2,601
Backlog $4,231 $3,601 $630
Revenue $3,070 $2,301 $769
Adjusted P&L Metrics1
Gross Profit $396 $188 $208
Gross Profit Margin 12.9% 8.2% 4.7%
Operating Income (OI) $175 $24 $151
OI Margin Percentage 5.7% 1.0% 4.7%
Net Income / (Loss) $66 ($61) $127
Diluted EPS $0.23 ($0.26) $0.49
EBITDA $286 $133 $153
Capex $103 $321 ($218)
Cash $782 $853 ($71)
Covenant EBITDA – TTM2 $338 $143 $195
$ in millions
1) Gross Profit (and margins), Operating Income (and margins), Net Income, Diluted EPS and EBITDA have been adjusted to exclude restructuring charges, mark-to-market pensions adjustments in
the fourth quarter of 2014 and 2015 and charges associated with a legal settlement in the third quarter of 2015. The reconciliation of adjusted measures to the nearest GAAP measure are
provided in the pages titled “Additional Disclosures”. Also, the number of shares outstanding utilized in determining earnings per share varies based on whether the Company has a Net Income
or a Net loss. The appropriate number of shares outstanding is also listed in the pages titled, “Additional Disclosures”.
2) Covenant EBITDA is a Non-GAAP measure and the GAAP reconciliation is provided in the pages titled “Additional Disclosures”.
23. 4Q 2015 Backlog and Roll-off
|23
• 81% of 2016 expected revenue in backlog; driven by Middle East
• Backlog roll-off includes ~$800M from Ichthys in 2016
• Focused on obtaining awards to provide additional coverage in 2017 and beyond
$ in billions
Backlog by SegmentBacklog by Business Line Backlog Roll-Off by Year
Details of $4.2BN Backlog as of December 31, 2015
$2.4
$1.3
$0.5
2016 2017 2018
Offshore
$2.9
69%
Subsea
$1.3
31%
AEA
$0.3
7%
MEA
$2.6
62%
ASA
$1.3
31%
24. Customer Contract Scope
$10.4
$1.6
$7.2
$11.8
$1.7
$6.1
NOC Super Major Independent
$13.1
$0.6
$5.5
$12.4
$0.7
$6.5
EPCI EPC Other
Segment
$7.5
$5.7 $6.0
$7.3 $7.1
$5.2
AEA MEA ASA
Greenfield/Brownfield
$8.1
$11.1
$8.6
$11.0
Greenfield Brownfield
Oil/Gas
$13.8
$5.4
$12.9
$6.7
Oil Gas
Business Line
$11.7
$7.5
$14.2
$5.4
Offshore Subsea
Bids Outstanding and Target Projects1
$19.6 billion as of 4Q 2015 compared to $19.2 billion in 3Q 2015
|24
Q3’15
Q4’15
1) Includes change orders. There is no assurance that bids outstanding or target projects will be awarded to McDermott.
2) Target projects are those that we believe fit McDermott’s capabilities and are anticipated to be awarded in the market in the next five quarters.
3) Other includes T&I, Construction and other types of work.
$ in billions
3
26. 2016 Outlook
1) Items are adjusted for restructuring costs. All reconciliations to GAAP figures are provided in the pages titled “Additional Disclosures”
2) Net Interest Expense has been reduced by ~$10M for capitalized interest included in Capex
3) EBITDA, Covenant EBITDA - TTM and Free Cash Flow reconciliations to the nearest GAAP measure are provided in the pages titled “Additional Disclosures”
4) The Company has a minimum required Covenant EBITDA – TTM of $251 million, before use of available add back of $28 million
Revenues ~$2.9B
Adjusted Operating Income1 ~$115
Net Interest Expense2 ~$64
Income Tax Expense ~$55
Adjusted Net Income1 ~$0
Adjusted Diluted EPS1 ~$0.00
Adjusted EBITDA1,3 ~$240
Restructuring Expense ~$10
Cash Interest / DIC Amortization Interest ~$60 / ~$14
Covenant EBITDA – TTM3,4 ~$285
Capex2 ~$260
Ending Cash and Restricted Cash ~$580
Ending Gross Debt ~$840
Free Cash Flow3 ~($160)
|26
$ in millions, except
per share amounts,
or as indicated
• 81% of 2016 outlook revenue in
December 2015 backlog
• Continued focus on highest value
proposition opportunities, executing
well our existing backlog, customer
alignment and asset utilization
• Restructuring expense comprised of
McDermott Profitability Initiative
(“MPI”) and Additional Overhead
Reduction (“AOR”)
• Actively managing our cost and liquidity
structure
• Given macro commodity environment,
may see pressure from potential
customer capex spending delays and
stronger competitive pricing pressure
Driving Results Through Cycle
27. Priorities: Near term action driven by longer term view
Current Backlog and Proven Execution Provides a Solid Foundation
Strengthen Through the Cycle
• Maintain Middle East market leader
position
• Focus on the markets where capital is
being invested
• Grow customer alignment and strength
of relationship
• Drive further integration of process and
capabilities in current asset base
• Demonstrate schedule and cost
execution – and continuously improve
cost and liquidity
Prepare for the Upturn
• Pursue new markets in Europe and Africa
• Leverage partnerships to secure pull
through
• Maintain and enhance in-market
capabilities
• Develop knowledge and expertise in
people – grow the team
• Industry recognition of the “McDermott
Way” and “Taking the Lead”
|27
30. The DLV2000: A Critical Tool in a Specialized Marine Fleet
Thirteen Vessels for Offshore, Subsea and Deepwater Projects
|30
CSV 108
NO 102
Rigid Reel Lay Heavy Lift/Pipelay (S-Lay/J-Lay)Flex Lay
Launch Barges
Agile
Emerald Sea
NO 105
Intermac 600 Intermac 650
Thebaud Sea
Construction Support Vessels DLV2000
(2016 Delivery)
DB50 DB32
DB30 DB27
31. The DLV2000 At A Glance
|31
• Heavy lift pipe-lay vessel
• 2,000 MT crane
− Auxiliary 600 MT
− Whips: 250 MT
• Dynamic Positioning Class 3
• Deepwater S-Lay capability: 4.5 to
60 inches
• Pipe-lay equipment
− Tension capacity: 450 MT (3@150 MT)
• Ideal for installation, maintenance
and decommissioning projects
32. DLV2000 Key Specifications and Strengths
Name: DLV 2000
Delivery: April 2016
Yard: Keppel Singmarine
Flag: Panama
Class: ABS
LOA: 184m
Beam: 38.6m
Min/Max. op draft: 5.5/7.7m
Propulsion: 25.5 MW
Max transit speed: 13.5 knots
DP Class: DP III
Deck area: Approximately 4,000 sq m
Accommodation: 341 persons
Main crane: 2,000mt
Secondary crane: 250mt AHC knuckle
boom crane
Pipelaying capabilities: S-lay
Tensioning capacity: 450mt (3x 150mt)
Diameter: 4.5-60”
Key Specifications Key Strengths
Pipelay:
• Versatile for infield and export pipelines of moderate
diameters and lengths in shallow and deep water
Subsea Installation:
• Large open deck allows for large subsea structures to
be carried and assembled on deck without requiring
separate transportation vessel or barge (e.g. Jumpers
and Manifolds)
Large accommodation:
• Allows for brownfield modifications and hook up
support
Fast transit speed allows for global operations
• Historically, McDermott Group’s anchored barges did
not often leave their home region
Multiple cranes for both jacket and topsides heavy lift
and deepwater installation
Competitive sweet spots:
• Combination projects requiring pipelay, heavy lift and large accommodation (e.g. brownfield)
• Projects where the DLV2000 can perform work normally executed by multiple vessels
• Remote locations due to combination capabilities and fast transit speed (e.g. Africa, Asia)
• Competitively priced as a result of specification suited to 90% of the market (larger more complex assets may have larger
capacities and broader capability, but are overspecified for most jobs)
33. Rationale for Building DLV2000
McDermott’s fleetDLV2000 is part of McDermott Group’s fleet renewal and
expansion strategy
• Fleet of DP ship shaped vessels built to service reel-lay
and flex-lay markets, and DLV 2000 will add high-end
capabilities and versatility
The Vessel has high versatility that enables her to have a
very broad and global target market
• Vessel combines heavy lift and pipelay capability, but also
has the highest level of DP, fast transit speed, large deck
space and sizeable accommodation capacity
• In addition to enhancing McDermott’s competitiveness in
its core regions, the DLV2000 opens up other geographic
areas such as Europe, the Mediterranean and Africa
where its existing barges may not technically or
commercially compete.
Keppel Singmarine is a very reputable yard with strong
track record and relationship with McDermott Group
• The yard has constructed over 400 vessels for a global
customer base, including Global 1200 and 1201
(2010/2011 delivered), which are fairly similar to DLV
2000, but with lower DP, accommodation, crane, etc.
• McDermott Group has also been very engaged in the
construction process ensuring high quality of the Vessel.
Combination S-lay/heavy lift
Flex-lay Construction support / others
DB 50
Rigid reel-lay + flex
DB 27, DB 30, DB 32
NO 105 NO 102, Agile,
Emerald Sea
CSV 108, Thebaud Sea,
I-600, I-650
Heavy lift
DLV2000
Keppel Singmarine’s Key Vessel Deliveries
Global 1200 (derrick
pipelay vessel)
SBM Installer (dive
support vessel)
Global 1201 (derrick
pipelay vessel)
34. Installation: Shallow to deep throughout the lifecycle
|34
Dynamically Positioned
Vessel
Anchored Vessel
Hook-up &
Commissioning
Versatile Fleet with Broad Capabilities is a Differentiator
• Class 3 dynamically positioned vessel combining a
2,200-ton crane and deepwater S-lay pipelay system
• Fast transit speeds make the DLV2000 a global asset
• The DLV2000 is scheduled to work in 2016 and 2017 on
the INPEX Ichthys and Woodside Greater Western Flank
Phase 2 Projects in Australia
• A full solution of shallow water fleet capabilities
targeted for the local Middle East and Asian markets
• Versatile subsea fleet
• Expertise in complex brownfield installation, hook up
and commissioning
Heavy Lift and High-End
Pipelay Vessel
DLV2000:
35. DLV2000 Media Conference and Tour Map
35
Press
Conference
Building
Naming Platform
Tentage
VIP Carpark
36. Touring the DLV2000: Tour Route
• Tour starts and boards the vessel to vessel to Main Deck
• Route will follow the Main Deck, including three cranes and Stinger Winch
Systems
• Tour will continue below deck and then to the Bridge
• Lunch will follow tour’s end
• Your questions are WELCOME!
Probable entry points to Main Deck
Limited Access Tented Area
for guests with blowers and
ushers to describe the vessel
features
Entry point for all other guests Entry point for VIP tour guests
Entry and Exit point to Freeboard Deck
P1
Safety First! Selfie Stop on Bridge Only
