MDR
#Sure.
So just on the profitability by segment.
When you see the K, you will notice that we were profitable for the quarter in both our Asia and Middle East segments, and slightly unprofitable in our Americas segment.
Looking forward, well and staying on the fourth quarter, really an operational result in the fourth quarter.
No real dominance of project close outs or negotiation numbers, a real operationally driven number for the fourth quarter.
Looking forward to 2015, we would still expect a slightly higher profitability in our subsea segment over our offshore segment, which is in line with our historical trends.
Yes.
If we look at our Asia segment still being driven predominantly by our Ichthys project, which remains profitable and on time.
Our Middle East segment, we have worked through a significant number of operational issues in 2014, and we would expect and hope that it remains profitable in 2015.
And our Americas segment, we still work through business development expense for expanding that marketplace.
And we're working hard at cost structuring and other items to return it to profitability, but we expect it would still be the lowest return of the three segments in 2015.
Good afternoon, <UNK>.
I think, <UNK>, first to get back to the start of the question.
I think if anything that we take from this is that, as I said during the call, is that I think we start to see a little bit of the fruits from the work and developing stronger relationships with our customers and have you look at our bidding processes.
Plus, some of the talent that we've added to the organization.
I think in this current macro economic environment, I think the volatility will remain.
It's difficult to predict from quarter to quarter how things will go.
Our bidding activity still remains robust and at reasonable levels similar to that of last year, but predictability of when customers will proceed and sanction projects it's very difficult to make any statement in this current environment.
I'll pass that over to <UNK> to answer that.
Yes, <UNK>, when you see the K, you'll see that of the $3.6 billion in backlog we ended 2014 with, we expect to roll off $3 billion in 2015.
So that would obviously leave us $300 million to $600 million in revenues to achieve to meet our overall guidance for the year.
Well at this time, <UNK>, we don't have any concerns.
This vessel originally was going to have a rigid pipelay system (inaudible) which we changed that strategy well over a year ago.
So a lot of the start up issues that's happened on McDermott vessels before have been primarily related to what you would say is the deck equipment.
So we don't have a lot of that on this.
A lot of the work that the 108 will do is fairly standard, a lot of it is lifting and installing some spill pieces, some subsea structures.
So it's more about lifting and a lot of it of ROV support diverless connections.
So the nature of the activity is somewhat different from something compared to maybe [sea a cap] project which was a couple years ago.
Great, that's helpful.
Thanks guys.
Okay.
I think the first thing to highlight is the fact that Saudi Aramco, of which we have a long term agreement, did not award any contracts during 2014.
And primarily, mainly as the result of Aramco executing quite a large backlog of projects, which obviously we are part of that through our SURF and IO projects and our other jackup projects we have with them.
So I think there's a large element of that.
And secondly, I think we have worked hard to work a lot closer towards Aramco to fully understand their needs.
I touched on the call is how did we work closer with Aramco to help them execute some of these projects, and in particular with most of them being brownfield activity which requires some element of production down time et cetera.
So I think that some of it is or most of it really is Aramco getting their projects on a road to release and let them, and we announced obviously today the success on Marjan, and hopefully we'll see some more activity as we get into 2015.
Yes.
The 2015 savings from MPI are already baked into our guidance.
And the way you're thinking about looking at 2016 and overlaying it to 2015 is the right way to look at it.
I think another important part of overall profitability will generally be the macro environment as we look at the competitive pressures in each of our markets in 2015.
Okay, so on the Middle East if we look at Middle East and the various countries, so we have bidding activity ongoing obviously with Aramco on what is a lot of brownfield activity.
Some of it is greenfield, but a significant element is brownfield.
We announced the award in Qatar, we have seen an increased bidding activity in Qatar and a lot of that relates to the next wave of gas developments.
And things in Qatar have been quiet for a period of time.
We also see bidding activity ongoing in the UAE with ADMA, which the work we're bidding there is primarily again brownfield.
So on a lot of the brownfield projects we see these moving ahead.
There are some other opportunities that are coming up, but those are mainly with our national oil companies.
With regards to LTA with Aramco, I can confirm that we're currently bidding both to existing LTA, which has been with us for the last six or seven years.
And we have recently just submitted our bid for the new LTA, which the customer is currently evaluating.
We expect the vast majority of that CapEx to be complete this year.
Yes, so of the $3.6 billion, there is approximately $400 million that is in a loss position.
And that $400 million is due to roll off $260 million in 2015, and $140 million in, sorry $260 million in 2015 and $140 million in 2016.
Well I don't like to talk about what our competitors do.
What I can say is that in the current bidding environment, our focus is really in areas where we think we have some differentiating capability.
So that's why we talk a lot about Middle East, we talk a lot about brownfield, we talk a lot about national oil companies.
Areas where historically, McDermott has been extremely successful.
And areas where we have the right people, the right fabrication assets, and the right installation assets to deliver.
And at the same time, we've got a large focus in Mexico.
We had an award earlier in the year.
We continue to develop a very strong relationship with Pemex.
And we continue to develop our yard in Altamira, which I was fortunate to visit last week.
Which is a first class facility, and one which is going to be very competitive not only in the market in Mexico but in the international market.
So our focus is where we can differentiate ourselves in the areas where we feel we can compete.
Thanks.
Well, <UNK>, firstly, I'm also not qualified to talk about oil price, and obviously our customers are more focused on that.
As I said earlier in the last question, our primary focus is where we feel that we can offer something to our customers that puts us in a more competitive position.
We also talk quite frequently about our relationship that we have with the national oil companies, in particular areas which are known to produce barrels of oil slightly less than some other parts of the world.
So that's where we have a lot of our focus, and we'll continue there.
But certainly not for me to comment on oil price.
Yes, the initiative is focused at all areas of cost within the Company, and there is a relatively small number coming out of SG&A in 2015 with a high percentage in 2016.
But the majority of the saving in 2015 is coming from operating expense.
Yes, we estimate between I think $35 million and $45 million of tax expense in 2015.
McDermott incurs a blend of Corporation tax and also withholding tax.
And given our overall inverted structure, until we are at a higher level of profitability, our effective tax rate we think is not reflective of our structure.
Thank you.
Thank you, Whitley.
Thank you for participating today.
We look forward to seeing many of you at the upcoming investor conferences, including the UBS One on One Engineering and Construction conference in New York on March 12th, the Howard Weil Energy Conference in New Orleans on March 24th, and the BB&T Commercial and Industrials Conference in Florida on March 19th.
We also hope you will join us for our first quarter call 2015 on May 11th of this year.
Thank you very much.
