Q120 Lender Presentation May 8, 2020 D ISCLOSURES Forward-Looking - - PowerPoint PPT Presentation

Q1’20 Lender Presentation

May 8, 2020

DISCLOSURES

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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

• ther than historical information, involve risks, contingencies and uncertainties. These forward-looking statements include, among other things, statements about COVID-19 related impacts to

McDermott; project milestones and percentage of completion and expected timetables; and cost estimates on identified projects. 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: negotiations with third parties; regulatory and other approvals; adverse changes in the markets in which McDermott

• perates or credit or capital markets; the inability of McDermott 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; actions by lenders, other creditors, customers and other business counterparties of McDermott; 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 each of McDermott's annual and quarterly filings with the U.S. Securities and Exchange Commission, including McDermott's annual report on Form 10-K for the year ended December 31, 2019 and subsequent quarterly reports on Form 10-Q. This presentation reflects the views of McDermott's management 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.

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 McDermott 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 are Adjusted EBITDA and Net Working Capital. These non-GAAP financial measures should be considered as supplemental to, and not as a substitute for or superior to, financial measures prepared in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are provided in the Appendix to this presentation.

TODAY’S AGENDA

▪ Coronavirus Update ▪ Operations Update ▪ Q1’20 Year over Year Performance ▪ Appendix

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MDR HAS PROACTIVELY RESPONDED TO THE OPERATIONAL IMPACTS

OF COVID-19

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People focus

▪ 209 current cases, 17 recovered, 1 fatality ▪ Project/Vessel/Yard response plans in place ▪ Remote/Smart working implemented ▪ Return to work plans under development

Business continuity

▪ No major EPC contracts suspended

• r terminated

▪ One temporary demobilization ▪ Sites/fab yards have remained at work ▪ Vessels have continued operating with some impacts (crews held in country) ▪ Some FEEDs slowed, and future prospects delayed

Client engagement

▪ Force Majeure → Change in Law → Change Orders ▪ Global communications protocols with clients and supply chain in place ▪ Notice and impact tracking in place ▪ Rapid sourcing and supply chain savings/resilience plans

OPERATIONS UPDATE

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LNG

▪ Freeport: T3 Ready for Start Up achieved ▪ Cameron: T3 Feed Gas In approved ▪ Golden Pass: 60% model review complete ▪ Mozambique: 30% model review complete

Subsea/Offshore

▪ ONGC KG 98/2: First Gas delivered ▪ Reliance KGD6 R Cluster & Bul Hanine: Offshore campaigns progressing ▪ Marjan Pkgs 1 & 4: FEED review complete ▪ Cassia: Jacket installed and weld-out of compression deck complete at Altamira ▪ Tyra: Maintaining progress at Batam Fabrication yard

Downstream

▪ Borstar: Underground tie-ins complete and pipe rack assembly underway ▪ Total Ethane Cracker: Completed main power feeds to electrical buildings ▪ GCGV MEG: First modules shipped in early April from Altamira ▪ 3 Ethylene/PDH FEEDs launched

KG 98/2 - LV105 completed reeling for Trip 6 and leaving Kattuppalli Spoolbase Cameron LNG – T3 Feed Gas In Approved

Q1’20 YEAR OVER YEAR PERFORMANCE

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$342 $6,553 Revenue

• Adj. EBITDA1

Net Working Capital1 $1,906 $2,063 $19 $109 Q1’19 Q1’20 $(1,224) $(1,913) Q4’19 Q1’20 New Orders Q1’19 Q1’20 Q1’19 Q1’20

1) The reconciliations of adjusted EBITDA and Net Working Capital, which are non-GAAP measures, to the most comparable GAAP measures, are provided in the Financial Appendix in this presentation

Financial Appendix

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1) We define EBITDA as net income plus depreciation and amortization, interest expense, net, accretion of and dividends on redeemable preferred stock and provision for income taxes. We define adjusted EBITDA as EBITDA adjusted to exclude significant, non-recurring transactions, both gains and charges, to our operating income. We have included EBITDA and adjusted EBITDA disclosures in this presentation deck because EBITDA is widely used by investors for valuation and comparing our financial performance with the performance of other companies in

• ur industry and because adjusted EBITDA provides a consistent measure of EBITDA relating to
• ur underlying business. Our management also uses EBITDA and adjusted EBITDA to monitor

and compare the financial performance of our operations. 2) EBITDA and adjusted EBITDA do not give effect to the cash that we must use to service our debt

• r pay our income taxes, and thus do not reflect the funds actually available for capital

expenditures, dividends or various other purposes. In addition, our presentation of EBITDA and adjusted EBITDA may not be comparable to similarly titled measures in other companies’ reports. You should not consider EBITDA and adjusted EBITDA in isolation from, or as a substitute for, net income or cash flow measures prepared in accordance with U.S. GAAP. 3) All amounts have been rounded to the nearest million. Individual line items may not sum to totals as a result of rounding. 4) Q1’19 has been restated for Discontinued Operations reporting.

ADDITIONAL DISCLOSURES – NON GAAP RECONCILIATIONS

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5) We define Net Working Capital as Current assets comprising Accounts Receivable Trade, Accounts receivable other, Contracts in progress and Other Current Assets minus Current liabilities comprising Lease obligations, Accounts payable, Advance billings on contracts and Accrued liabilities 6) All amounts have been rounded to the nearest million. Individual line items may not sum to totals as a result of rounding.

Adjusted EBITDA1,2,3,4 Net Working Capital5,6

CONFIDENTIAL 9