TechnipFMC plc (NYSE: FTI) (Paris: FTI) today reported third
quarter 2019 results.
Total Company revenue was $3,335.1 million. Net income was $21.8
million, or $0.05 per diluted share. These results included
after-tax charges and credits totaling $32.6 million of expense, or
$0.07 per diluted share. Adjusted net income was $54.4 million, or
$0.12 per diluted share.
Adjusted EBITDA, which excludes pre-tax charges and credits, was
$379.2 million; adjusted EBITDA margin was 11.4 percent (Exhibit
9).
Other significant pre-tax items impacting the quarter, for which
we do not provide guidance, included the following:
-- $53.2 million of foreign exchange losses included in corporate expense, or $0.09 per diluted share on an after-tax basis; and
-- $99.1 million of increased liability payable to joint venture partners included in interest expense, or $0.22 per diluted share on an after-tax basis.
Summary Financial Statements - Third Quarter 2019
Reconciliation of U.S. GAAP to non-GAAP financial measures are
below and in financial schedules.
Three Months Ended September 30, September 30, Change
(In millions, except 2019 2018
per share amounts)
Revenue $3,335.1 $3,143.8 6.1%
Net income $21.8 $136.9 (84.1%)
Diluted earnings per share $0.05 $0.30 (83.3%)
Adjusted EBITDA $379.2 $430.5 (11.9%)
Adjusted EBITDA margin 11.4% 13.7% (230 bps)
Adjusted net income $54.4 $139.8 (61.1%)
Adjusted diluted earnings $0.12 $0.31 (61.3%)
per share
Inbound orders $2,610.6 $3,647.2 (28.4%)
Backlog $24,115.3 $15,178.0 58.9%
1iEPCIT refers to TechnipFMC's integrated engineering,
procurement, construction and installation contracts.
Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated, "In the
third quarter, we announced a transformational move to create two
diversified, pure-play market leaders. The separation will enable
both companies to benefit from dedicated focus of management,
resources and capital while highlighting the unique value
proposition and differentiated investment appeal of each company.
We believe strongly that providing independence for these two
world-class, high-performing businesses will unlock further
opportunities and create value for all stakeholders."
Pferdehirt continued, "Subsea orders of $1.5 billion reflect
continued strength in integrated project awards, increased services
activity and the adoption of new technologies. We announced several
new iEPCIT projects, including the Pyxis project, the first
call-off of our recently executed iEPCIT frame agreement with
Woodside. Subsea services activity continued to benefit from the
industry's largest installed base, and we remain on track for
double-digit growth for the full year. In the quarter, we also
received the industry's first award of a 20K high-pressure,
high-temperature system for LLOG's Shenandoah project in the Gulf
of Mexico."
"Our strong Subsea order growth continues to be driven by our
integrated commercial model. Inbound for the first nine months of
the year was $6.8 billion, reflecting a book-to-bill of 1.7. We
continue to believe that our order growth for the full year will
exceed 50 percent - the highest annual growth rate in a decade. Our
anticipated growth is more than double the expectation for the
total subsea market."
"Operating performance in our other segments reflected diverging
trends. Surface Technologies' operating margin weakened
sequentially due to reduced activity and more competitive pricing
in North America, offset in part by continued strength in
international markets. Onshore/Offshore again posted robust
operating results, benefiting from continued strength in execution
on major projects."
Pferdehirt added, "Five LNG projects over the past five months
have either been sanctioned or moved closer to final investment
decision in 2020, including the Arctic LNG 2 and Rovuma LNG
projects that were awarded to TechnipFMC and our partners. Rovuma
builds upon our first mover advantage and early investment in
Mozambique, where we are already executing the floating LNG scope
on the Coral project. The award also serves as further confirmation
of our leadership in LNG and our strong capabilities in the
delivery of remote projects."
Pferdehirt concluded, "I want to recognize the dedication,
commitment and demonstrated results of the women and men of
TechnipFMC that have enabled us to take this next step to further
reshape the industry. Thanks to their continued effort, we are
making solid progress towards completing our planned separation in
the first half of 2020."
Operational and Financial Highlights - Third Quarter 2019
Subsea
Financial Highlights
Reconciliation of U.S. GAAP to non-GAAP financial measures are
below and in financial schedules.
Three Months Ended September 30, September 30, Change
(In millions) 2019 2018
Revenue $1,342.2 $1,209.1 11.0%
Operating profit $45.5 $79.7 (42.9%)
Adjusted EBITDA $139.1 $188.5 (26.2%)
Adjusted EBITDA margin 10.4% 15.6% (520 bps)
Inbound orders $1,509.9 $1,553.9 (2.8%)
Backlog $8,655.8 $6,343.4 36.5%
Subsea reported third quarter revenue of $1,342.2 million, up 11
percent from the prior year. Revenue increased due to higher
project-related activity and growth in services. Revenue growth in
the quarter was negatively impacted by the timing of key project
milestones, shifting recognition of some anticipated revenue to
future periods. The increase in services revenue was driven by
higher installation, well intervention and asset refurbishment
activities.
Subsea reported operating profit of $45.5 million; adjusted
EBITDA was $139.1 million. Operating profit decreased from the
prior year due to the impact of more competitively priced backlog
and a higher proportion of projects in early phases. These same
factors drove the year-over-year decrease in adjusted EBITDA;
adjusted EBITDA margin decreased 520 basis points to 10.4
percent.
Vessel utilization rate for the third quarter was 70 percent, up
from 69 percent in the second quarter and 69 percent in the
prior-year quarter.
Third Quarter Subsea Highlights
-- Equinor Peregrino Project (Brazil)
Successful completion of Deep Blue campaign.
-- Shell BC-10 (Brazil)
Successful installation of Subsea 2.0T compact manifold.
-- Enquest Scolty (United Kingdom)
Offshore campaign completed ahead of schedule; builds upon
previous track record for project delivery with Enquest.
-- Wintershall DEA Dvalin (Norway)
Offshore installation completed; subsea field to be tied back to
the Heidrun platform.
Subsea inbound orders for the quarter were $1,509.9 million,
resulting in a book-to-bill of 1.1. The following awards were
announced subsequent to our second quarter earnings release:
-- Neptune Energy Seagull iEPCIT Project (North Sea)
Significant* iEPCIT contract from Neptune Energy for the Seagull
project. The contract covers the manufacturing, delivery and
installation of subsea equipment including production and water
wash pipelines, umbilicals, subsea structures and control
systems.
* A "significant" award ranges between $75 million and $250
million.
-- Shell PowerNap iEPCIT Project (Gulf of Mexico)
Significant* iEPCIT contract from Shell for the PowerNap
project. The contract covers the design, manufacturing and
installation of subsea hardware, including subsea tree systems,
subsea distribution controls, topside controls, flying leads and
connectors for three wells, in addition to the supply of 20 miles
of production umbilical and flowlines.
* A "significant" award ranges between $75 million and $250
million.
-- Woodside Pyxis iEPCIT Project (Australia)
Significant* iEPCIT contract from Woodside for the development
of the Pyxis and Xena fields. The contract covers the design,
manufacturing, delivery and installation of subsea equipment
including subsea production system, flexible flowlines and
umbilicals.
* A "significant" award ranges between $75 million and $250
million.
-- Shell Perdido Phase 2 iEPCIT Project (Gulf of Mexico)
iEPCIT contract from Shell for the Perdido Phase 2 project. The
contract covers the delivery and installation of subsea equipment,
including flexible flowlines, flexible jumpers, steel flying leads
and electrical flying leads, and will utilize the Subsea 2.0T
In-Line Compact Manifold.
Note: this inbound order was included in the Company's second
quarter financial results.
Subsea Consolidated backlog* Non-consolidated backlog**
Estimated Backlog
Scheduling
as of September 30, 2019
(In millions)
2019 (3 months) $1,425.6 $40.5
2020 $4,251.0 $138.3
2021 and beyond $2,979.2 $663.3
Total $8,655.8 $842.1
* Backlog does
not capture
all revenue
potential for subsea
services.
** Non-consolidated
backlog
reflects the
proportional share of
backlog related to
joint ventures that is
not consolidated due
to our minority ownership
position.
Onshore/Offshore
Financial Highlights
Reconciliation of U.S. GAAP to non-GAAP financial measures are
below and in financial schedules.
Three Months Ended September 30, September 30, Change
(In millions) 2019 2018
Revenue $1,596.3 $1,532.5 4.2%
Operating profit $284.6 $243.4 16.9%
Adjusted EBITDA $304.2 $227.3 33.8%
Adjusted EBITDA margin 19.1% 14.8% 430 bps
Inbound orders $696.0 $1,666.1 (58.2%)
Backlog $15,030.8 $8,378.8 79.4%
Onshore/Offshore reported third quarter revenue of $1,596.3
million. Revenue increased 4.2 percent from the prior-year quarter,
primarily driven by higher activity on recent awards in the
downstream, petrochemical and offshore sectors as well as first
contribution from Arctic LNG 2. The increase was partially offset
by lower activity on Yamal LNG as the project nears completion.
Onshore/Offshore reported operating profit of $284.6 million;
adjusted EBITDA was $304.2 million. Operating profit increased 16.9
percent versus the prior-year quarter. Operating results in the
period benefited primarily from continued strength in execution on
Yamal LNG. These same factors drove the year-over-year increase in
adjusted EBITDA; adjusted EBITDA margin increased 430 basis points
from the prior-year results to 19.1 percent.
Third Quarter Onshore/Offshore Highlights
-- ENI Coral FLNG (Mozambique)
More than 75 percent of the topsides have been delivered.
-- Energean Karish Gas FPSO (Israel)
Hull was successfully undocked in September, a critical
milestone ahead of sail away to Singapore.
-- Neste Renewable Products Refinery Expansion (Singapore)
Foundation stone ceremony took place for refinery expansion as
we support Neste's renewable products (biofuels) growth
strategy.
Onshore/Offshore inbound orders for the quarter were $696
million, resulting in a book-to-bill of 0.4. The inbound reflects
the strength of our Process Technology business as we continue to
enter into new strategic agreements:
-- EPICEROL® Technology License Agreement with Meghmani Finechem (India)
The license agreement marks TechnipFMC's first 'green'
epichlorohydrin (ECH) technology license in India. EPICEROL® offers
a cost-effective process to produce ECH from glycerol, with a
reduced carbon footprint compared to traditional propylene-based
processes.
The following award was announced subsequent to our second
quarter earnings release:
-- Mozambique Rovuma Venture S.p.A. Rovuma LNG Project (Mozambique)
Engineering, Procurement and Construction (EPC) contract for the
Rovuma LNG Project. TechnipFMC, in consortium with our partners JGC
Corporation and Fluor Corporation, will construct two natural gas
liquefaction trains, with a total LNG nameplate capacity of 15.2
million tons per annum, as well as associated onshore
facilities.
Note: This award will be reflected in financial results once
full notice to proceed has been issued.
Onshore/Offshore Consolidated backlog Non-consolidated backlog*
Estimated Backlog
Scheduling
as of September
30, 2019
(In millions)
2019 (3 months) $2,084.5 $194.5
2020 $5,254.4 $744.3
2021 and beyond $7,691.9 $1,693.2
Total $15,030.8 $2,632.0
* Non-consolidated
backlog
reflects the
proportional
share of backlog
related to
joint ventures that is
not consolidated due
to our minority
ownership
position.
Surface Technologies
Financial Highlights
Reconciliation of U.S. GAAP to non-GAAP financial measures are
below and in financial schedules.
Three Months Ended September 30, 2019 September 30, 2018 Change
(In millions)
Revenue $396.6 $402.2 (1.4%)
Operating profit $6.1 $51.9 (88.2%)
Adjusted EBITDA $44.4 $72.5 (38.8%)
Adjusted EBITDA margin 11.2% 18.0% (680 bps)
Inbound orders $404.7 $427.2 (5.3%)
Backlog $428.7 $455.8 (5.9%)
Surface Technologies reported third quarter revenue of $396.6
million, a decrease of 1.4 percent from the prior-year quarter. The
revenue decline was driven mainly by lower sales in North America
resulting from further reductions in drilling and completion
activity, largely offset by revenue growth in international
markets. Revenue outside North America represents more than 50
percent of the total segment, with activity now expected to reach
low double-digit growth for the full year.
Surface Technologies reported operating profit of $6.1 million;
adjusted EBITDA was $44.4 million with a margin of 11.2 percent, a
decrease of 680 basis points from the prior-year quarter. Operating
profit decreased versus the prior-year quarter primarily due to
further declines in volume and pricing in North America. These same
factors drove the year-over-year decrease in adjusted EBITDA.
Inbound orders for the quarter were $404.7 million. Backlog
decreased 5.9 percent versus the prior-year quarter to $428.7
million. Given the short-cycle nature of the business, orders are
generally converted into revenue within twelve months.
Third Quarter Surface Technologies Award Highlights
-- ADNOC (United Arab Emirates)
Award for various wellhead and tree configurations for both
onshore and offshore oil and gas wells.
-- Tatweer Petroleum (Bahrain)
Award for wellheads, trees and control panels for onshore gas
wells over five years, with first call-off made in September.
-- Saipem (Mauritania and Senegal)
Award to Loading Systems for the offshore marine loading arms
scope on the BP Tortue project.
Corporate and Other Items
Corporate expense in the third quarter was $128.8 million. This
includes charges and credits totaling $18.2 million of expense.
Excluding charges and credits, corporate expense was $110.6 million
which included $53.2 million of foreign exchange losses mainly due
to the devaluation of unhedged currencies, primarily the Angolan
Kwanza.
Net interest expense was $116.5 million in the quarter, which
included an increase in the liability payable to joint venture
partners of $99.1 million.
The Company recorded a tax provision in the quarter of $65.3
million. The effective tax rate year-to-date was 33.6 percent,
including the impact of discrete items.
Total depreciation and amortization for the quarter was $141.6
million.
Cash flow from operations in the quarter was $92 million. The
Company ended the period with cash and cash equivalents of $4,504.4
million; net cash was $596.2 million.
2019 Financial Guidance1
Updates to the Company's full-year guidance for 2019 are
included in the revised table below and detailed on the following
page:
2019
Guidance
*Updated
October
23,
2019
Subsea Onshore/Offshore Surface Technologies
Revenue Revenue in a range of $6.0 - 6.3 billion Revenue in a range of $1.6 - 1.7 billion
in
a range
of
$5.6 -
5.8
billion
EBITDA EBITDA margin at least 16.5% (excluding amortization related impact of purchase price accounting, and other charges and credits) EBITDA margin at least 10%* (excluding amortization related impact of purchase price accounting, and other charges and credits)
margin
at least
11.5%
(excluding
amortization
related
impact
of
purchase
price
accounting,
and
other
charges
and
credits)
TechnipFMC
Corporate
expense,
net* $210
-
215
million
for
the full
year
(excluding
the
impact
of
foreign
currency
fluctuations)
Net
interest
expense
$30 - 40
million
for
the full
year
(excluding
the
impact
of
revaluation
of
partners'
mandatorily
redeemable
financial
liability)
Tax rate
26
- 30%
for
the full
year
Capital
expenditures
approximately
$350
million
for
the full
year
Cash
flow
from
operating
activities
positive
for the
full
year
__________________________
1 Our guidance measures adjusted EBITDA margin, corporate
expense, net (excluding the impact of foreign currency
fluctuations), net interest expense (excluding the impact of
revaluation of partners' mandatorily redeemable financial
liability), and tax rate are non-GAAP financial measures. We are
unable to provide a reconciliation to comparable GAAP financial
measures on a forward-looking basis without unreasonable effort
because of the unpredictability of the individual components of the
most directly comparable GAAP financial measure and the variability
of items excluded from each such measure. Such information may have
a significant, and potentially unpredictable, impact on our future
financial results.
Updates to the Company's full-year guidance for 2019 are
detailed below:
-- Surface Technologies EBITDA margin of at least 10% (excluding amortization related impact of purchase price accounting, and other charges and credits); EBITDA margin guidance has been decreased from the previous guidance of at least 12%.
-- Corporate expense, net of $210 - 215 million for the full year (excluding the impact of foreign currency fluctuations); corporate expense, net has been increased from the previous guidance of $160 - 170 million.
Teleconference
The Company will host a teleconference on Thursday, October 24,
2019 to discuss the third quarter 2019 financial results. The call
will begin at 1 p.m. London time (8 a.m. New York time). Dial-in
information and an accompanying presentation can be found at
www.technipfmc.com.
Webcast access will also be available on our website prior to
the start of the call. An archived audio replay will be available
after the event at the same website address. In the event of a
disruption of service or technical difficulty during the call,
information will be posted on our website.
###
About TechnipFMC
TechnipFMC is a global leader in subsea, onshore/offshore, and
surface projects. With our proprietary technologies and production
systems, integrated expertise, and comprehensive solutions, we are
transforming our clients' project economics.
We are uniquely positioned to deliver greater efficiency across
project lifecycles from concept to project delivery and beyond.
Through innovative technologies and improved efficiencies, our
offering unlocks new possibilities for our clients in developing
their oil and gas resources.
Each of our more than 37,000 employees is driven by a steady
commitment to clients and a culture of purposeful innovation,
challenging industry conventions, and rethinking how the best
results are achieved.
TechnipFMC utilizes its website www.TechnipFMC.com as a channel
of distribution of material company information. To learn more
about us and how we are enhancing the performance of the world's
energy industry, go to www.TechnipFMC.com and follow us on Twitter
@TechnipFMC.
This communication contains "forward-looking statements" as
defined in Section 27A of the United States Securities Act of 1933,
as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. Words such as "guidance,"
"confident," "believe," "expect," "anticipate," "plan," "intend,"
"foresee," "should," "would," "could," "may," "will," "likely,"
"predicated," "estimate," "outlook" and similar expressions are
intended to identify forward-looking statements, which are
generally not historical in nature. Such forward-looking statements
involve significant risks, uncertainties and assumptions that could
cause actual results to differ materially from our historical
experience and our present expectations or projections, including
the following known material factors:
-- risks associated with our ability to consummate our proposed separation and spin-off, and our ability to achieve the intended benefits and synergies of the transaction;
-- unanticipated changes relating to competitive factors in our industry;
-- demand for our products and services, which is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets;
-- our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets;
-- potential liabilities arising out of the installation or use of our products;
-- cost overruns related to our fixed price contracts or capital asset construction projects that may affect revenues;
-- our ability to timely deliver our backlog and its effect on our future sales, profitability, and our relationships with our customers;
-- our reliance on subcontractors, suppliers and joint venture partners in the performance of our contracts;
-- our ability to hire and retain key personnel;
-- piracy risks for our maritime employees and assets;
-- the potential impacts of seasonal and weather conditions;
-- the cumulative loss of major contracts or alliances;
-- U.S. and international laws and regulations, including existing or future environmental regulations, that may increase our costs, limit the demand for our products and services or restrict our operations;
-- disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business;
-- risks associated with The Depository Trust Company and Euroclear for clearance services for shares traded on the NYSE and Euronext Paris, respectively;
-- the United Kingdom's proposed withdrawal from the European Union; risks associated with being an English public limited company, including the need for "distributable profits", shareholder approval of certain capital structure decisions, and the risk that we may not be able to pay dividends or repurchase shares in accordance with our announced capital allocation plan;
-- compliance with covenants under our debt instruments and conditions in the credit markets;
-- downgrade in the ratings of our debt could restrict our ability to access the debt capital markets;
-- the outcome of uninsured claims and litigation against us;
-- the risks of currency exchange rate fluctuations associated with our international operations;
-- significant merger-related costs;
-- risks related to our acquisition and divestiture activities;
-- failure of our information technology infrastructure or any significant breach of security, including related to cyber attacks, and actual or perceived failure to comply with data security and privacy obligations;
-- risks that the legacy businesses of FMC Technologies, Inc. and Technip S.A. will not be integrated successfully or that the combined company will not realize estimated cost savings, value of certain tax assets, synergies and growth or that such benefits may take longer to realize than expected;
-- risks associated with tax liabilities, changes in U.S. federal or international tax laws or interpretations to which they are subject;
-- the remedial measures to address our material weaknesses could be insufficient or additional issues relating to disclosure controls and procedures or internal control over financial reporting could be identified; and
-- such other risk factors set forth in our filings with the United States Securities and Exchange Commission and in our filings with the Autorité des marchés financiers or the U.K. Financial Conduct Authority.
We caution you not to place undue reliance on any
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any of our
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise, except to
the extent required by law.
Exhibit 1
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF INCOME(In millions, except per share
data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Revenue $ 3,335.1 $ 3,143.8 $ 9,682.3 $ 9,229.9
Costs and 3,095.9 2,863.7 8,994.7 8,527.2
expenses
239.2 280.1 687.6 702.7
Other (expense) (31.8 ) 26.8 (102.5 ) 58.0
income, net
Income before 207.4 306.9 585.1 760.7
net interest
expense and
income
taxes
Net interest (116.5 ) (106.0 ) (345.3 ) (244.3 )
expense
Income before 90.9 200.9 239.8 516.4
income taxes
Provision for 65.3 66.7 80.7 180.7
income taxes
Net income 25.6 134.2 159.1 335.7
Net (income) (3.8 ) 2.7 (19.4 ) 2.0
loss
attributable
to
noncontrolling
interests
Net $ 21.8 $ 136.9 $ 139.7 $ 337.7
income
attributable
to TechnipFMC
plc
Earnings per
share
attributable
to TechnipFMC
plc:
Basic $ 0.05 $ 0.30 $ 0.31 $ 0.73
Diluted $ 0.05 $ 0.30 $ 0.31 $ 0.73
Weighted
average
shares
outstanding:
Basic 446.9 454.5 448.6 460.0
Diluted 451.9 459.0 453.5 464.0
Cash dividends $ 0.13 $ 0.13 $ 0.39 $ 0.39
declared
per share
Exhibit 2
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESBUSINESS SEGMENT
DATA(In millions)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Revenue
Subsea $ 1,342.2 $ 1,209.1 $ 4,036.2 $ 3,606.7
Onshore/Offshore 1,596.3 1,532.5 4,436.4 4,448.3
Surface 396.6 402.2 1,209.7 1,174.9
Technologies
$ 3,335.1 $ 3,143.8 $ 9,682.3 $ 9,229.9
Income before
income taxes
Segment
operating
profit
Subsea $ 45.5 $ 79.7 $ 190.1 $ 210.0
Onshore/Offshore 284.6 243.4 714.3 617.6
Surface 6.1 51.9 42.1 134.0
Technologies
Total segment 336.2 375.0 946.5 961.6
operating
profit
Corporate items
Corporate expense (128.8 ) (68.1 ) (361.4 ) (200.9 )
(1)
Net interest (116.5 ) (106.0 ) (345.3 ) (244.3 )
expense
Total corporate (245.3 ) (174.1 ) (706.7 ) (445.2 )
items
Net income $ 90.9 $ 200.9 $ 239.8 $ 516.4
before
income taxes (2)
(1) Corporate expense primarily includes corporate staff
expenses, legal reserve, share-based compensation expenses, other
employee benefits, certain foreign exchange gains and losses,
merger transaction and integration expenses and separation
expenses.
(2) Includes amounts attributable to noncontrolling
interests.
Exhibit 3
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESBUSINESS SEGMENT
DATA(In millions, unaudited)
Three Months Ended Nine Months Ended
Inbound September 30, September 30,
Orders(1)
2019 2018 2019 2018
Subsea $ 1,509.9 $ 1,553.9 $ 6,820.3 $ 4,297.9
Onshore/Offshore 696.0 1,666.1 11,966.0 5,816.5
Surface 404.7 427.2 1,188.3 1,251.5
Technologies
Total inbound $ 2,610.6 $ 3,647.2 $ 19,974.6 $ 11,365.9
orders
Order Backlog(2) September 30,
2019 2018
Subsea $ 8,655.8 $ 6,343.4
Onshore/Offshore 15,030.8 8,378.8
Surface Technologies 428.7 455.8
Total order backlog $ 24,115.3 $ 15,178.0
(1) Inbound orders represent the estimated sales value of
confirmed customer orders received during the reporting period.
(2) Order backlog is calculated as the estimated sales value of
unfilled, confirmed customer orders at the reporting date.
Exhibit 4
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS(In millions)
(Unaudited)
September 30,2019 December 31,2018
Cash and cash $ 4,504.4 $ 5,540.0
equivalents
Trade 2,150.0 2,469.7
receivables,
net
Contract 1,503.0 1,295.0
assets
Inventories, 1,411.9 1,251.2
net
Other current 1,460.0 1,225.3
assets
Total current 11,029.3 11,781.2
assets
Property, 3,217.1 3,259.8
plant
and
equipment,
net
Goodwill 7,577.3 7,607.6
Intangible 1,105.6 1,176.7
assets,
net
Other assets 2,011.4 959.2
Total assets $ 24,940.7 $ 24,784.5
Short-term $ 299.4 $ 67.4
debt
and current
portion of
long-term
debt
Accounts 2,556.4 2,600.3
payable,
trade
Contract 4,122.5 4,085.1
liabilities
Other current 2,371.9 2,386.6
liabilities
Total current 9,350.2 9,139.4
liabilities
Long-term 3,608.8 4,124.3
debt,
less
current
portion
Other 1,659.3 1,093.4
liabilities
Redeemable 38.5 38.5
noncontrolling
interest
TechnipFMC 10,239.0 10,357.6
plc
stockholders'
equity
Noncontrolling 44.9 31.3
interests
Total $ 24,940.7 $ 24,784.5
liabilities
and equity
Exhibit 5
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED
STATEMENTS OF CASH FLOWS(In millions)
(Unaudited)
Nine Months Ended
September 30,
2019 2018
Cash provided (required)
by operating activities
Net income $ 159.1 $ 335.7
Adjustments to reconcile net
income to cash provided
(required) by operating
activities
Depreciation 282.5 276.3
Amortization 96.0 136.2
Impairments 2.4 14.1
Employee benefit plan 54.2 27.1
and share-based
compensation costs
Deferred income tax provision (102.5 ) (44.6 )
(benefit), net
Unrealized loss on derivative 108.2 19.0
instruments
and foreign exchange
Income from equity (49.6 ) (67.3 )
affiliates,
net of dividends received
Other 390.8 58.9
Changes in operating assets
and liabilities,
net of effects of
acquisitions
Trade receivables, net (23.0 ) (25.9 )
and contract assets
Inventories, net (190.6 ) (259.6 )
Accounts payable, trade 12.3 (938.2 )
Contract liabilities 115.1 (18.6 )
Income taxes payable (82.6 ) (91.8 )
(receivable), net
Other current assets (519.4 ) 416.6
and liabilities, net
Other noncurrent assets 34.6 (182.6 )
and liabilities, net
Cash provided (required) 287.5 (344.7 )
by operating activities
Cash provided (required)
by investing activities
Capital expenditures (368.4 ) (255.2 )
Payment to acquire (59.7 ) -
debt securities
Proceeds from sale 18.9 -
of debt securities
Acquisitions, net - (103.4 )
of cash acquired
Cash divested from - (7.5 )
deconsolidation
Proceeds from sale of assets 5.6 7.9
Proceeds from repayment of 46.4 -
advance to joint venture
Cash required by investing (357.2 ) (358.2 )
activities
Cash required by financing
activities
Net decrease in short-term (28.5 ) (29.5 )
debt
Net (decrease) increase (255.5 ) 309.3
in commercial paper
Proceeds from issuance 96.2 2.5
of long-term debt
Purchase of ordinary shares (92.7 ) (384.2 )
Dividends paid (174.7 ) (179.2 )
Settlements of mandatorily (443.7 ) (124.2 )
redeemable
financial liability
Other - 2.3
Cash required by financing (898.9 ) (403.0 )
activities
Effect of changes in (67.0 ) (78.2 )
foreign exchange
rates on cash and
cash equivalents
Decrease in cash and (1,035.6 ) (1,184.1 )
cash equivalents
Cash and cash equivalents, 5,540.0 6,737.4
beginning of period
Cash and cash equivalents, $ 4,504.4 $ 5,553.3
end of period
Exhibit 6
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESBUSINESS SEGMENT
DATA FOR YAMAL LNG JOINT VENTURE(In millions, unaudited)
We control the voting control interests in the legal
onshore/offshore contract entities which own and account for the
design, engineering, and construction of the Yamal LNG plant. Our
partners have a 50% joint interest in these entities. Below is
summarized financial information for the consolidated Yamal LNG
joint venture as reflected at 100% in our consolidated financial
statements.
September 30,
2019
Contract liabilities $ 1,437.3
Mandatorily redeemable financial liability 288.8
Three Months Ended
September 30,
2019
Cash provided by operating activities $ 9.1
Settlements of mandatorily redeemable (223.1 )
financial liability
Exhibit 7
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES(In millions, unaudited)
Charges and Credits
In addition to financial results determined in accordance with
U.S. generally accepted accounting principles (GAAP), the third
quarter 2019 Earnings Release also includes non-GAAP financial
measures (as defined in Item 10 of Regulation S-K of the Securities
Exchange Act of 1934, as amended) and describes performance on a
year-over-year basis against 2018 results and measures. Net income,
excluding charges and credits, as well as measures derived from it
(including Diluted EPS, excluding charges and credits; Income
before net interest expense and taxes, excluding charges and
credits ("Adjusted Operating profit"); Depreciation and
amortization, excluding charges and credits; Earnings before net
interest expense, income taxes, depreciation and amortization,
excluding charges and credits ("Adjusted EBITDA"); and net cash)
are non-GAAP financial measures. Management believes that the
exclusion of charges and credits from these financial measures
enables investors and management to more effectively evaluate
TechnipFMC's operations and consolidated results of operations
period-over-period, and to identify operating trends that could
otherwise be masked or misleading to both investors and management
by the excluded items. These measures are also used by management
as performance measures in determining certain incentive
compensation. The foregoing non-GAAP financial measures should be
considered by investors in addition to, not as a substitute for or
superior to, other measures of financial performance prepared in
accordance with GAAP. The following is a reconciliation of the most
comparable financial measures under GAAP to the non-GAAP financial
measures.
Three Months Ended
September 30, 2019
Net income (loss) attributable to TechnipFMC plc Net income (loss) attributable to noncontrolling interests Provision for income taxes Net interest expense Income (loss) before net interest expense and income taxes (Operating profit) Depreciation and amortization Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported $ 21.8 $ 3.8 $ 65.3 $ 116.5 $ 207.4 $ 141.6 $ 349.0
Charges and (credits):
Impairment and other charges 1.0 - 0.2 - 1.2 - 1.2
Restructuring and other severance charges 12.2 - 1.8 - 14.0 - 14.0
Business combination transaction and integration costs 6.0 - 0.2 - 6.2 - 6.2
Separation costs 7.5 - 1.9 - 9.4 - 9.4
Legal provision, net (0.6 ) - - - (0.6 ) - (0.6 )
Purchase price accounting adjustment 6.5 - 2.0 - 8.5 (8.5 ) -
Adjusted financial measures $ 54.4 $ 3.8 $ 71.4 $ 116.5 $ 246.1 $ 133.1 $ 379.2
Diluted earnings per share attributable to TechnipFMC plc, as reported $ 0.05
Adjusted diluted earnings per share attributable to TechnipFMC plc $ 0.12
Three Months Ended
September 30, 2018
Net income (loss) attributable to TechnipFMC plc Net income (loss) attributable to noncontrolling interests Provision for income taxes Net interest expense Income (loss) before net interest expense and income taxes (Operating profit) Depreciation and amortization Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported $ 136.9 $ (2.7 ) $ 66.7 $ 106.0 $ 306.9 $ 142.0 $ 448.9
Charges and (credits):
Impairment and other charges 0.3 - 1.3 - 1.6 - 1.6
Restructuring and other severance charges 4.7 - 3.4 - 8.1 - 8.1
Business combination transaction and integration costs 3.3 - 3.0 - 6.3 - 6.3
Gain on divestitures (21.1 ) - (10.5 ) - (31.6 ) - (31.6 )
Purchase price accounting adjustment 15.7 - 4.8 - 20.5 (23.3 ) (2.8 )
Adjusted financial measures $ 139.8 $ (2.7 ) $ 68.7 $ 106.0 $ 311.8 $ 118.7 $ 430.5
Diluted earnings per share attributable to TechnipFMC plc, as reported $ 0.30
Adjusted diluted earnings per share attributable to TechnipFMC plc $ 0.31
Exhibit 8
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES(In millions, unaudited)
Charges and Credits
In addition to financial results determined in accordance with
U.S. generally accepted accounting principles (GAAP), the third
quarter 2019 Earnings Release also includes non-GAAP financial
measures (as defined in Item 10 of Regulation S-K of the Securities
Exchange Act of 1934, as amended) and describes performance on a
year-over-year basis against 2018 results and measures. Net income,
excluding charges and credits, as well as measures derived from it
(including Diluted EPS, excluding charges and credits; Income
before net interest expense and taxes, excluding charges and
credits ("Adjusted Operating profit"); Depreciation and
amortization, excluding charges and credits; Earnings before net
interest expense, income taxes, depreciation and amortization,
excluding charges and credits ("Adjusted EBITDA"); and net cash)
are non-GAAP financial measures. Management believes that the
exclusion of charges and credits from these financial measures
enables investors and management to more effectively evaluate
TechnipFMC's operations and consolidated results of operations
period-over-period, and to identify operating trends that could
otherwise be masked or misleading to both investors and management
by the excluded items. These measures are also used by management
as performance measures in determining certain incentive
compensation. The foregoing non-GAAP financial measures should be
considered by investors in addition to, not as a substitute for or
superior to, other measures of financial performance prepared in
accordance with GAAP. The following is a reconciliation of the most
comparable financial measures under GAAP to the non-GAAP financial
measures.
Nine Months Ended
September 30, 2019
Net income attributable to TechnipFMC plc Net income (loss) attributable to noncontrolling interests Provision for income taxes Net interest expense Income before net interest expense and income taxes (Operating profit) Depreciation and amortization Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported $ 139.7 $ 19.4 $ 80.7 $ 345.3 $ 585.1 $ 378.5 $ 963.6
Charges and (credits):
Impairment and other charges 1.9 - 0.5 - 2.4 - 2.4
Restructuring and other severance charges 30.5 - 8.0 - 38.5 - 38.5
Business combination transaction and integration costs 24.7 - 6.5 - 31.2 - 31.2
Separation costs 7.5 - 1.9 - 9.4 - 9.4
Reorganization 19.2 - 6.1 - 25.3 - 25.3
Legal provision, net 54.6 - - - 54.6 - 54.6
Purchase price accounting adjustment 19.5 - 6.0 - 25.5 (25.5 ) -
Valuation allowance (40.3 ) - 40.3 - - - -
Adjusted financial measures $ 257.3 $ 19.4 $ 150.0 $ 345.3 $ 772.0 $ 353.0 $ 1,125.0
Diluted earnings per share attributable to TechnipFMC plc, as reported $ 0.31
Adjusted diluted earnings per share attributable to TechnipFMC plc $ 0.57
Nine Months Ended
September 30, 2018
Net income attributable to TechnipFMC plc Net income (loss) attributable to noncontrolling interests Provision for income taxes Net interest expense Income before net interest expense and income taxes (Operating profit) Depreciation and amortization Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA)
TechnipFMC plc, as reported $ 337.7 $ (2.0 ) $ 180.7 $ 244.3 $ 760.7 $ 412.5 $ 1,173.2
Charges and (credits):
Impairment and other charges 9.4 - 4.7 - 14.1 - 14.1
Restructuring and other severance charges 12.3 - 6.2 - 18.5 - 18.5
Business combination transaction and integration costs 13.9 - 7.0 - 20.9 - 20.9
Gain on divestitures (21.1 ) - (10.5 ) - (31.6 ) - (31.6 )
Purchase price accounting adjustment 50.9 - 15.6 - 66.5 (67.3 ) (0.8 )
Adjusted financial measures $ 403.1 $ (2.0 ) $ 203.7 $ 244.3 $ 849.1 $ 345.2 $ 1,194.3
Diluted earnings per share attributable to TechnipFMC plc, as reported $ 0.73
Adjusted diluted earnings per share attributable to TechnipFMC plc $ 0.87
Exhibit 9
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES(In millions, unaudited)
Three Months Ended
September 30, 2019
Subsea Onshore/ Surface Technologies Corporate and Other Total
Offshore
Revenue $ 1,342.2 $ 1,596.3 $ 396.6 $ - $ 3,335.1
Operating profit $ 45.5 $ 284.6 $ 6.1 $ (128.8 ) $ 207.4
(loss),
as reported
(pre-tax)
Charges and
(credits):
Impairment and 1.2 - - - 1.2
other charges
Restructuring 4.9 5.2 0.7 3.2 14.0
and other
severance charges
Business - - - 6.2 6.2
combination
transaction
and integration
costs
Separation costs - - - 9.4 9.4
Legal provision, - - - (0.6 ) (0.6 )
net
Purchase price 8.5 - - - 8.5
accounting
adjustments
- amortization
related
Subtotal 14.6 5.2 0.7 18.2 38.7
Adjusted Operating 60.1 289.8 6.8 (110.6 ) 246.1
profit (loss)
Adjusted 79.0 14.4 37.6 2.1 133.1
Depreciation
and amortization
Adjusted EBITDA $ 139.1 $ 304.2 $ 44.4 $ (108.5 ) $ 379.2
Operating profit 3.4 % 17.8 % 1.5 % 6.2 %
margin,
as reported
Adjusted Operating 4.5 % 18.2 % 1.7 % 7.4 %
profit margin
Adjusted EBITDA 10.4 % 19.1 % 11.2 % 11.4 %
margin
Three Months Ended
September 30, 2018
Subsea Onshore/Offshore Surface Technologies Corporate and Other Total
Revenue $ 1,209.1 $ 1,532.5 $ 402.2 $ - $ 3,143.8
Operating profit $ 79.7 $ 243.4 $ 51.9 $ (68.1 ) $ 306.9
(loss),
as reported
(pre-tax)
Charges and
(credits):
Impairment and 1.4 - 0.2 - 1.6
other charges
Restructuring 3.6 (0.2 ) 1.1 3.6 8.1
and other
severance charges
Business - - - 6.3 6.3
combination
transaction
and integration
costs
Gain (3.3 ) (28.3 ) - - (31.6 )
on divestitures
Purchase price (3.5 ) - 0.9 (0.2 ) (2.8 )
accounting
adjustments
- non-amortization
related
Purchase price 23.4 - (0.1 ) - 23.3
accounting
adjustments
- amortization
related
Subtotal 21.6 (28.5 ) 2.1 9.7 4.9
Adjusted Operating 101.3 214.9 54.0 (58.4 ) 311.8
profit (loss)
Adjusted 87.2 12.4 18.5 0.6 118.7
Depreciation
and amortization
Adjusted EBITDA $ 188.5 $ 227.3 $ 72.5 $ (57.8 ) $ 430.5
Operating profit 6.6 % 15.9 % 12.9 % 9.8 %
margin,
as reported
Adjusted Operating 8.4 % 14.0 % 13.4 % 9.9 %
profit margin
Adjusted EBITDA 15.6 % 14.8 % 18.0 % 13.7 %
margin
Exhibit 10
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES(In millions, unaudited)
Nine Months Ended
September 30, 2019
Subsea Onshore/Offshore Surface Technologies Corporate and Other Total
Revenue $ 4,036.2 $ 4,436.4 $ 1,209.7 $ - $ 9,682.3
Operating profit $ 190.1 $ 714.3 $ 42.1 $ (361.4 ) $ 585.1
(loss),
as reported
(pre-tax)
Charges and
(credits):
Impairment and 1.8 - 0.6 - 2.4
other charges
Restructuring 11.1 11.1 2.8 13.5 38.5
and other
severance charges
Business - - - 31.2 31.2
combination
transaction
and integration
costs
Separation costs - - - 9.4 9.4
Reorganization - 25.3 - - 25.3
Legal provision, - - - 54.6 54.6
net
Purchase price 25.5 - - - 25.5
accounting
adjustments
- amortization
related
Subtotal 38.4 36.4 3.4 108.7 186.9
Adjusted Operating 228.5 750.7 45.5 (252.7 ) 772.0
profit (loss)
Adjusted 236.6 30.2 75.7 10.5 353.0
Depreciation
and amortization
Adjusted EBITDA $ 465.1 $ 780.9 $ 121.2 $ (242.2 ) $ 1,125.0
Operating profit 4.7 % 16.1 % 3.5 % 6.0 %
margin,
as reported
Adjusted Operating 5.7 % 16.9 % 3.8 % 8.0 %
profit margin
Adjusted EBITDA 11.5 % 17.6 % 10.0 % 11.6 %
margin
Nine Months Ended
September 30, 2018
Subsea Onshore/Offshore Surface Technologies Corporate and Other Total
Revenue $ 3,606.7 $ 4,448.3 $ 1,174.9 $ - $ 9,229.9
Operating profit $ 210.0 $ 617.6 $ 134.0 $ (200.9 ) $ 760.7
(loss),
as reported
(pre-tax)
Charges and
(credits):
Impairment and 8.6 - 1.6 3.9 14.1
other charges
Restructuring 10.5 (5.8 ) 6.4 7.4 18.5
and other
severance charges
Business - - - 20.9 20.9
combination
transaction
and integration
costs
Gain (3.3 ) (28.3 ) - - (31.6 )
on divestitures
Purchase price (6.1 ) - 5.7 (0.4 ) (0.8 )
accounting
adjustments
- non-amortization
related
Purchase price 67.7 - (0.4 ) - 67.3
accounting
adjustments
- amortization
related
Subtotal 77.4 (34.1 ) 13.3 31.8 88.4
Adjusted Operating 287.4 583.5 147.3 (169.1 ) 849.1
profit (loss)
Adjusted 264.3 29.7 48.1 3.1 345.2
Depreciation
and amortization
Adjusted EBITDA $ 551.7 $ 613.2 $ 195.4 $ (166.0 ) $ 1,194.3
Operating profit 5.8 % 13.9 % 11.4 % 8.2 %
margin,
as reported
Adjusted Operating 8.0 % 13.1 % 12.5 % 9.2 %
profit margin
Adjusted EBITDA 15.3 % 13.8 % 16.6 % 12.9 %
margin
Exhibit 11
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIESRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES(In millions, unaudited)
September 30,2019 December 31,2018
Cash and cash $ 4,504.4 $ 5,540.0
equivalents
Short-term debt (299.4 ) (67.4 )
and current
portion of
long-term
debt
Long-term debt, (3,608.8 ) (4,124.3 )
less
current portion
Net cash $ 596.2 $ 1,348.3
Net (debt) cash, is a non-GAAP financial measure reflecting cash
and cash equivalents, net of debt. Management uses this non-GAAP
financial measure to evaluate our capital structure and financial
leverage. We believe net debt, or net cash, is a meaningful
financial measure that may assist investors in understanding our
financial condition and recognizing underlying trends in our
capital structure. Net (debt) cash should not be considered an
alternative to, or more meaningful than, cash and cash equivalents
as determined in accordance with U.S. GAAP or as an indicator of
our operating performance or liquidity.
TechnipFMC plc
Investor relations
Matt SeinsheimerVice President Investor RelationsTel: +1 281 260
3665Email: Matt Seinsheimer
Phillip LindsayDirector Investor Relations (Europe)Tel: +44 (0)
20 3429 3929Email: Phillip Lindsay
Media relations
Christophe BélorgeotSenior Vice President Corporate
EngagementTel: +33 1 47 78 39 92Email: Christophe Belorgeot
Delphine NayralDirector Public RelationsTel: +33 1 47 78 34
83Email: Delphine Nayral
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(END) Dow Jones Newswires
October 24, 2019 02:00 ET (06:00 GMT)