1. Every Challenge is an Opportunity
Bob Deason
President & CEO 1

2. J. Ray McDermott EPCI of offshore facilities & pipelines
US & Atlantic Basin, Asia Pacific, Caspian, Middle East
$4.7 billion - backlog Q2 ’09
$3.2 billion - revenue 2008
17,000+ employees worldwide
95% non-US citizens
89% work outside of US
21 vessels (7 DLBs; 14 multi-functional)
6 engineering offices
6 fabrication/marine bases 6 2

3. Offshore Market unprecedented growth rapid growth spending decline 3 3
Source: The World Offshore Oil & Gas Production & Spend Forecast Douglas-Westwood and Energyfiles 3 3

4. Offshore Market 2003 - 2008 Rapid Growth: Repair balance sheets
Dramatic cost increases
Problem projects – cost / schedule
Technological challenges
Subsea
Floaters
Resources
Major new competitors
Growth in protectionism
Investments failed to adequately replace resources 4

5. Offshore Market 2009 - 2011 Spending Decline: Managing downturn
Right size asset base
Business stress
Address execution
Extreme cost pressure
Under-investment by operators
Inconsistent globally 5

6. Offshore Market 2012 onwards – Unprecedented Growth:
Catch up under investment
Expanded asset base available
Aging workforce
Will we manage projects better? 6

7. Government Related ChallengesUS
OCSLA manning requirements
Jones Act reinterpretation
Income tax – draft legislation
Aggressive administration
International
Protectionism
Unclear tax and customs regimes
Ethics and compliance
Sanctity of contracts 7

8. Technology Related Challenges
Floating solutions
Subsea infrastructure
More extreme environments
Deeper water depths
More remote locations
More challenging reservoirs 8 7

9. Customer Related Challenges
Unhealthy contracting environment
Intensive cost pressure
Long and complicated tendering process
Bureaucratic organizations
NOC’s vs. IOC’s
Questionable contract award criteria 9 7

10. Near-term Opportunities
Right-sizing company
Upgrading company expertise
Adding people / assets through attractive opportunities
Improving cost position
Resetting growth strategies
Actively working with trade associations 10 8

11. Longer-term Opportunities
Bringing assets in line with future market requirements
Developing new technical solutions
Partnering in areas requiring local content
Expand geographical footprint
Upgrade execution 11 8

12. Summary We are in a cyclic business Bottom of cycle 2010-2011
Relatively mild downturn
Time to reset cost
Upgrade execution strategies
Prepare for upturn 12 8

13. Engineering – Procurement – Construction - Installation
J. Ray McDermott
Engineering – Procurement – Construction - Installation 13