Attached files
| file | filename |
|---|---|
| 8-K - MCDERMOTT INTERNATIONAL, INC. 8-K - MCDERMOTT INTERNATIONAL INC | a6630515.htm |
| EX-99.1 - EXHIBIT 99.1 - MCDERMOTT INTERNATIONAL INC | a6630515ex99_1.htm |
Exhibit 99.2
Indicative Example of Large Change Order on Hypothetical Project in Progress
|
Start of |
Expected |
Effects of a |
Actual |
Variance |
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|
Total Contract |
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|
Revenue ("TCV") |
$ | 900 | $ | 300 | $ | 1,200 | $ | 300 | ||||||||||||||
|
Cost |
$ | 720 | $ | 240 | $ | 960 | $ | 240 | ||||||||||||||
|
Gross Profit Dollars |
$ | 180 | $ | 60 | $ | 240 | $ | 60 | ||||||||||||||
|
Gross Profit Percentage |
20 | % | 20 | % | 20 | % | 0 | % | ||||||||||||||
| POC Determinants | [1] | |||||||||||||||||||||
| Direct labor & equipment costs incurred | $ | 75 | $ | 150 | $ | 150 | $ | - | ||||||||||||||
| Direct labor & equipment total cost - est. at completion ("EAC") | $ | 300 | $ | 300 | $ | 240 | $ | 540 | $ | 240 | ||||||||||||
| Percent Complete ("POC") | 25 | % | 50 | % | 28 | % | -22 | % | ||||||||||||||
| Cumulative Recognition | ||||||||||||||||||||||
| Revenue (POC * TCV) | $ | 225 | $ | 450 | $ | 333 | $ | (117 | ) | |||||||||||||
| Gross Profit (POC * GP Dollars) | $ | 45 | $ | 90 | $ | 67 | $ | (23 | ) | |||||||||||||
| Recognition in Quarter | ||||||||||||||||||||||
| Revenue | $ | 225 | $ | 108 | $ | (117 | ) | |||||||||||||||
| Gross Profit | $ | 45 | $ | 22 | $ | (23 | ) | |||||||||||||||
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[1] Generally includes McDermott's scope work for engineering, construction and installation and generally excludes procurement and sub-contracts. |
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For a complete discussion on our revenue
recognition accounting policy, please see McDermott’s quarterly and
annual filings with the Securities and Exchange Commission.