UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2006
McDERMOTT INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 001-08430 72-0593134
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 N. Eldridge Parkway, Houston, Texas 77079
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (281) 870-5000
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 4.01 Changes in Registrant's Certifying Accountant.
On March 27, 2006, our Audit Committee dismissed PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") as our independent registered public accounting firm
and approved the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm to audit our financial statements for the year
ending December 31, 2006. On March 27, 2006, our Board of Directors ratified the
Audit Committee's decision to change independent registered public accounting
firms and the appointment of Deloitte & Touche.
The audit reports of PricewaterhouseCoopers on our consolidated financial
statements for each of the two fiscal years ended December 31, 2004 and 2005 did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles,
except that its report for each year included an explanatory paragraph regarding
our wholly owned subsidiary, The Babcock & Wilcox Company.
During the two fiscal years ended December 31, 2005, and the subsequent
interim period through March 27, 2006, there were no disagreements between us
and PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused PricewaterhouseCoopers to make reference to the subject matter
of the disagreement in connection with its reports on the financial statements
for such years.
During the two years ended December 31, 2005, and the subsequent interim
period through March 27, 2006, there have been no "reportable events," as
defined in Item 304(a)(1)(v) of Regulation S-K, except as described in the
following paragraph.
In March 2004, PricewaterhouseCoopers advised us of a material weakness
relating to our ability to forecast accurately total costs to complete
fixed-price contracts, primarily first-of-a-kind projects. We discussed this
material weakness in Item 9A in our Form 10-K for the year ended December 31,
2003. In connection with the audit of the year ended December 31, 2004,
PricewaterhouseCoopers reported material weaknesses related to the following:
(1) account reconciliations in our Marine Construction Services segment in the
Eastern Hemisphere related to cash and cash equivalents, accounts payable and
other accounts were not being properly completed; and (2) control deficiencies
at our business units with respect to access to financial application programs
and data which included lack of compliance with the Company's internal access
security policies and segregation of duties requirements and lack of independent
monitoring of the activities of technical information technology staff and some
users with financial accounting and reporting responsibilities that also have
unrestricted access to financial application programs and data. We discussed
these material weaknesses in Item 9A in our Form 10-K for the year ended
December 31, 2004.
As disclosed in Item 9A in our Form 10-K for the year ended December 31,
2005, management conducted an assessment of the effectiveness of our internal
control over financial reporting as of December 31, 2005. Based on this
assessment, management concluded that our internal control over financial
reporting was effective as of December 31, 2005. Management's assessment of the
effectiveness of our internal control over financial reporting was audited by
PricewaterhouseCoopers, whose unqualified report thereon also appears in such
10-K.
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During the two fiscal years ended December 31, 2005, and during the
subsequent interim period preceding the appointment of Deloitte & Touche LLP, we
had not consulted with Deloitte & Touche LLP regarding (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our consolidated
financial statements or (2) any matter that was either the subject of a
"disagreement," as defined in Item 304(a)(1)(iv) of Regulation S-K, or a
"reportable event" described in Item 304(a)(1)(v) of Regulations S-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
16.1 Letter from PricewaterhouseCoopers LLP dated March 31, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
McDERMOTT INTERNATIONAL, INC.
By: /s/ Michael S. Taff
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Michael S. Taff
Vice President and Chief Accounting
Officer
March 31, 2006
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