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McDermott International's CEO Discusses Q1 2012 Results - Earnings Call Transcript

In addition to the INPEX project, we also received another sizable subsea order in the Asia Pacific region, which we expect will utilize our new North Ocean 105. This is the SeCaP project, a deepwater job in over 4,000 feet of water installing pipe and pipe flow lines, risers, umbilicals and umbilical packages. There are a number of firsts on this job, and as such, we'll utilize our deferred profit recognition policy. Virtually all the revenues are expected in 2012 anyway, so following this approach should have minimal impact on 2012.

The other notable award was the KJO Hout project, which is an EPCI award in the neutral zone between Saudi Arabia and Kuwait. The scope includes a jacket, deck-associated pipelines and some brownfield demolition work.

Additionally, we had about $130 million of bookings this quarter come through change orders, scope increases and settlements. Over the last 4 quarters, we've averaged about $235 million per quarter from this type of bookings, so the first quarter was somewhat below the recent average. However, we more than made up for it in new awards, predominantly in the Asia Pacific segment.

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