McDermott International Co. (MDR) February 1, 2009 Logan Frederick, John McNab, and Kyle Girardi

Company Description Industry: Construction, Engineering, and Servicing of Energy, Industrial Sectors Exposure to: Coal, Oil, Natural Gas, Solar, Industrial Gases, Nuclear, Chemicals Three Major Segments: –Offshore Oil and Gas Construction –Government Operations –Power Generation Systems

Future Prospects Oil Dependence Encourages Alt. Energies: –Coal: Clean Coal plants, backlog production from new coal plants to be sold –Nuclear Acquisition of Nuclear Fuel Services Retrofitting/Upgrading/Servicing Old Plants Carbon-Capping Technology Oil/Natural Gas Remain Profitable Government Contracting –$2.7 Billion of Potential Future Deals, $1 Billion in 2008 –Already Operates 17 US Government Locations –Growing Energy Spending Medical Chemicals

Downside Shareholder Class Action Lawsuit Over Qatar Gas/Oil Pipeline Delays –Future Earnings to Overcome –Factored Into Stock Governmental Issues –Lower American Spending or Higher Debt –No Peace in Middle East

Financials Graham Methods from Intelligent Investor Annual 2007 Assets 1.3x Liabilities (Target: 1.5x) 2008 Changes: –Negligible Changes in All Categories –Exception in “Cash From Operating Activities” Huge Increase in Operating Expenses Acquisition Costs Five Years of Operating Profit Growth No Dividend Since 2000

Ratios Price: Market Capitalization: $2.38 Billion EPS: $2.38 Multiples: –Current: 4.37x –Graham’s Guideline: 15x Potential Target Price: $35 Dependent on Growth, Economy Sales Growth % (5 Years): 26.6% Price/Book: 1.7x (Priced Nearly at Book Value!)

One-Year vs Five-Year With little change in earnings besides expenditures and upcoming projects…...expect a massive rebound in McDermott International Inc.’s price!