- Strong execution despite the challenging environment
in the quarter
- Resilient backlog of $20.6 billion; $14.9 billion scheduled
for 2021 and beyond
- Net liquidity of $6.8 billion, an increase of $1.2 billion
sequentially
- On track to deliver targeted cost savings that exceed $350
million by year-end
- Updated financial guidance for all segments; initiated free
cash flow outlook
- U.S. GAAP diluted earnings per share was $0.03
- Includes total after-tax charges, net of credits, of $0.06 per
diluted share
- Adjusted diluted earnings per share, excluding charges and
credits, was $0.09
- Includes foreign exchange losses of $0.01 per diluted
share
- Includes expense resulting from increased liability to joint
venture partners of $0.11 per diluted share
Regulatory News:
TechnipFMC plc (NYSE:FTI) (Paris:FTI) (ISIN:GB00BDSFG982) today
reported second quarter 2020 results.
Summary Financial Statements - Second Quarter 2020
Reconciliation of U.S. GAAP to non-GAAP financial measures are
below and in financial schedules.
Three Months Ended
(In millions, except per share
amounts)
June 30, 2020
June 30, 2019
Change
Revenue
$3,158.5
$3,434.2
(8.0%)
Net income
$11.7
$97.0
(87.9%)
Diluted earnings per share
$0.03
$0.21
(85.7%)
Adjusted EBITDA
$241.1
$450.0
(46.4%)
Adjusted EBITDA margin
7.6
%
13.1
%
(550 bps)
Adjusted net income
$42.2
$175.6
(76.0%)
Adjusted diluted earnings per
share
$0.09
$0.39
(76.9%)
Inbound orders
$1,534.6
$11,179.6
(86.3%)
Backlog
$20,603.8
$25,781.9
(20.1%)
Total Company revenue was $3,158.5 million. Net income was $11.7
million, or $0.03 per diluted share. These results included
after-tax charges and credits totaling $30.5 million of expense, or
$0.06 per diluted share. Adjusted net income was $42.2 million, or
$0.09 per diluted share.
Adjusted EBITDA, which excludes pre-tax charges and credits, was
$241.1 million and included a foreign exchange loss of $5.8
million; adjusted EBITDA margin was 7.6 percent (Exhibit 10).
Doug Pferdehirt, Chairman and CEO of TechnipFMC stated, “Our
focus remains on the health and well-being of our employees and
stakeholders while ensuring business continuity in a safe and
responsible manner. Our dedicated teams advanced projects and met
customer requirements, which was evident in our second quarter
results.”
“We also made solid progress in three core areas – strengthening
our balance sheet, progressing our backlog scheduling and
accelerating our business transformation – all to ensure the
success of TechnipFMC both through the current cycle and over the
longer term. We took a series of proactive steps to ensure that we
can maintain access to more than sufficient liquidity in these
challenging times. We experienced no cancellations of our backlog,
highlighting the resiliency of the nearly $21 billion of backlog we
have today. And we have engaged in constructive dialogue with our
customers that has resulted in an even more collaborative approach,
creating new opportunities for TechnipFMC.”
Pferdehirt added, “The strong balance sheet and extensive
backlog have also provided us with the flexibility to accelerate
our business transformation, with global actions underway to
generate annualized cost savings in excess of $350 million by
year-end. We are driving improved productivity across the
organization to permanently lower our operating and capital costs.
These actions will drive the most value when we align with those
clients and partners that demonstrate a willingness to embrace our
initiatives focused on simplification, standardization and reduced
cycle times. And we are leveraging our core competencies in
engineering, manufacturing and project management to deliver
sustainable solutions that further enable our clients to reach
their carbon reduction ambitions.”
“In Surface Technologies, we continue to transform our North
America operations by working with clients to further drive
wellsite operational efficiencies and lower greenhouse gas
emissions. Outside North America, we are leveraging the strength of
our franchise to capitalize on the long-term growth anticipated in
the Middle East, Asia Pacific, and the North Sea.”
Pferdehirt continued, “In Subsea, we continue to believe inbound
orders will approximate $4 billion for the year. Large project
activity demonstrates our strength in important basins such as
Brazil, Guyana and Norway. Beyond this activity, our orders have
been supported by subsea services, direct iEPCI™ awards and small
project activity, much of which is exclusive to TechnipFMC. These
opportunities have generated over $3 billion of inbound in each of
the last three years, enabled by our market-leading installed base,
growing list of alliance partners and integrated FEED
capabilities.”
“Turning to Technip Energies, we continue to make good progress
on all major projects. While LNG market dynamics have shifted in
recent months, we do not view this as the start of an extended
downturn for our Company given our strong differentiation in this
market. We have been awarded projects in Mozambique and Mexico,
both subject to final investment decision, and we are actively
tendering a major project in the Middle East while performing
front-end work on other LNG prospects. Beyond LNG, energy
transition is a strong opportunity for us, particularly in the
areas of sustainable chemistry and hydrogen.”
Pferdehirt concluded, “We entered this period with a solid
foundation built upon the strength of our balance sheet, backlog
and execution. While client conversations remain ongoing, the
increased visibility we have today gives us confidence in our
full-year guidance for all business segments. This is further
supported by the acceleration of our business transformation
initiatives to maintain – if not expand – our market
leadership.”
Operational and Financial Highlights - Second Quarter
2020
Subsea
Financial Highlights Reconciliation of U.S. GAAP to
non-GAAP financial measures are below and in financial
schedules.
Three Months Ended
(In millions)
June 30, 2020
June 30, 2019
Change
Revenue
$1,378.5
$1,508.7
(8.6%)
Operating profit (loss)
$(75.6)
$94.6
n/m
Adjusted EBITDA
$99.6
$186.2
(46.5%)
Adjusted EBITDA margin
7.2
%
12.3
%
(510 bps)
Inbound orders
$511.7
$2,632.7
(80.6%)
Backlog
$7,085.3
$8,747.0
(19.0%)
Subsea reported second quarter revenue of $1,378.5 million, down
8.6 percent from the prior year. Excluding the unfavorable impact
of foreign exchange, revenue was unchanged, with the completion of
projects in Africa in 2019 offset by growth in the Gulf of Mexico
and Norway. We continued to demonstrate strong execution of our
backlog despite the COVID-19 related disruptions to both supply
chain and operations in the period. Operational continuity improved
throughout the second quarter as revenue increased 10 percent
sequentially.
Subsea reported an operating loss of $75.6 million and included
restructuring, impairment and other charges totaling $95.8 million,
of which $27.4 million were direct COVID-19 expenses. Operating
results declined versus the prior year primarily due to these
charges, the impact of more competitively priced backlog and the
negative operational impacts related to COVID-19. Operating results
benefited from our cost reduction initiatives in the quarter, and
we expect to recognize greater cost savings from our restructuring
actions in the second half of the year. Adjusted EBITDA was $99.6
million with a margin of 7.2 percent.
Second Quarter Subsea Highlights
- Energean Karish iEPCI™ (Israel) Successful installation
of gas export pipeline.
- Woodside Pyxis iEPCI™ (Australia) Subsea 2.0™ equipment
arrived in Australia for pre-installation testing.
- Neptune Energy Duva and Gjøa iEPCI™ (Norway) Pipelay
scope successfully completed.
- Equinor Peregrino Phase 2 (Brazil) Successful completion
of offshore campaign.
- CNOOC Liuhua (China) Final subsea trees and first two
manifolds delivered.
Partnership and Alliance Highlights
- TechnipFMC/Halliburton launch joint subsea fiber optic
service Introduction of Odassea™, the world’s first distributed
acoustic sensing solution for subsea wells. The technology platform
enables operators to execute intervention-less seismic imaging and
reservoir diagnostics to reduce total cost of ownership while
improving reservoir knowledge.
Subsea inbound orders were $511.7 million for the quarter,
reflecting activity in smaller projects and subsea services,
resulting in a book-to-bill of 0.4.
Subsea
Estimated Backlog Scheduling as of June
30, 2020
(In millions)
Consolidated backlog1,2
Non-consolidated backlog3
2020 (6 months)
$2,212
$65
2021
$2,912
$133
2022 and beyond
$1,961
$505
Total
$7,085
$703
1 Backlog in the period was increased by a
foreign exchange impact of $102 million.
2 Backlog does not capture all revenue
potential for subsea services.
3 Non-consolidated backlog reflects the
proportional share of backlog related to joint ventures that is not
consolidated due to our minority ownership position.
Technip Energies
Financial Highlights Reconciliation of U.S. GAAP to
non-GAAP financial measures are below and in financial
schedules.
Three Months Ended
(In millions)
June 30,
2020
June 30,
2019
Change
Revenue
$1,538.3
$1,505.0
2.2%
Operating profit
$231.3
$274.0
(15.6%)
Adjusted EBITDA
$162.6
$281.9
(42.3%)
Adjusted EBITDA margin
10.6
%
18.7
%
(810 bps)
Inbound orders
$835.8
$8,131.2
(89.7%)
Backlog
$13,132.6
$16,608.3
(20.9%)
Technip Energies reported second quarter revenue of $1,538.3
million, an increase of 2.2 percent from the prior-year quarter.
Revenue benefited from higher activity in LNG, downstream and by
our Process Technology business. The continued ramp-up of Arctic
LNG 2 more than offset the decline in revenue from Yamal LNG which
continues to progress through the warranty phase.
Technip Energies reported operating profit of $231.3 million,
which included a $113.2 million benefit from a favorable litigation
settlement and $24.8 million of direct COVID-19 expenses. Both of
these exceptional items were excluded from adjusted results.
Operating profit decreased 15.6 percent versus the prior-year
quarter primarily due to a reduced contribution from Yamal LNG and
lower margin realization on early phase projects, including Arctic
LNG 2. Despite the challenging environment, project execution
remained strong across the portfolio. Adjusted EBITDA was $162.6
million with a margin of 10.6 percent.
Second Quarter Technip Energies Highlights
- Arctic LNG 2 (Russia) Delivery of main equipment
on-going and piping prefabrication started at all yards.
- Bapco Modernization Program (Bahrain) Construction
started on the temporary jetty in May.
- ENI Coral South FLNG (Mozambique) First Power Generation
module was installed on the hull in South Korea, marking the start
of the module lifting campaign and integration phase.
- Indian Oil Corporation Panipat Hydrogen Generation Unit
(India) Hydrogen generation unit is now under start-up.
Partnership and Alliance Highlights
- TechnipFMC/Agilyx Corporation exclusive collaboration to
develop ways to recycle polystyrene This collaboration further
expands on energy transition capabilities and the circular economy
offering of TechnipFMC.
- TechnipFMC/Clariant Catalysts joint development agreement to
produce acrylonitrile The joint venture aims to develop and
commercialize more efficient processes to produce acrylonitrile and
help customers achieve sustainability targets.
- Demonstration plant for Carbios to recycle waste PET
plastics with enzymes For this pilot, we are providing
advisory, engineering, procurement and construction supervision
services for Carbios’ Enzymatic Recycling Process.
Technip Energies inbound orders were $835.8 million for the
quarter, resulting in a book-to-bill of 0.5. While there were no
announced project awards in the period, the segment benefited from
strong activity in front-end engineering, Project Management
Consultancy and Loading Systems, as well as expanded scope on
existing contracts. The following award was announced subsequent to
the second quarter, subject to final investment decision:
- Assiut National Oil Processing Company Hydrocracking Complex
(Egypt) Major* engineering, procurement and construction (EPC)
contract with Assiut National Oil Processing Company for the
construction of a new Hydrocracking Complex for the Assiut refinery
in Egypt. The EPC contract covers new process units such as a
Vacuum Distillation Unit, a Diesel Hydrocracking Unit, a Delayed
Coker Unit, a Distillate Hydrotreating Unit as well as a Hydrogen
Production Facility Unit using TechnipFMC’s proprietary steam
reforming technology. * A “major” award is over $1 billion; the
Company will include the contract award in its inbound when all the
requirements are fulfilled.
Technip Energies
Estimated Backlog Scheduling as of June
30, 2020
(In millions)
Consolidated backlog1
Non-consolidated backlog2
2020 (6 months)
$3,292
$432
2021
$5,542
$716
2022 and beyond
$4,299
$947
Total
$13,133
$2,095
1 Backlog in the period was increased by a
foreign exchange impact of $68 million.
2 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
(In millions)
June 30, 2020
June 30, 2019
Change
Revenue
$241.7
$420.5
(42.5%)
Operating profit (loss)
$(13.4)
$25.5
n/m
Adjusted EBITDA
$8.3
$46.7
(82.2%)
Adjusted EBITDA margin
3.4
%
11.1
%
(770 bps)
Inbound orders
$187.1
$415.7
(55.0%)
Backlog
$385.9
$426.6
(9.5%)
Surface Technologies reported second quarter revenue of $241.7
million, a decrease of 42.5 percent from the prior-year quarter.
The decline was primarily driven by the sharp reduction in operator
activity in North America. COVID-19 related disruptions and reduced
activity levels led to a more modest revenue decline outside of
North America, where over 60 percent of total segment revenue was
generated in the period.
Surface Technologies reported an operating loss of $13.4
million. When compared to the prior-year period, operating margin
decreased primarily due to lower activity in North America driven
by the significant decline in rig count and completions-related
activity. Adjusted EBITDA was $8.3 million with a margin of 3.4
percent.
Inbound orders for the quarter were $187.1 million, which
decreased versus the prior-year quarter primarily due to the
significant reduction in North America activity. Backlog decreased
9.5 percent versus the prior-year quarter to $385.9 million. Given
the short-cycle nature of the business, orders are generally
converted into revenue within twelve months.
Second Quarter Surface Technologies Highlights
- Integrated technologies (United States) Successful
completion of well pad for a major operator in the Marcellus Shale
utilizing our new fully integrated FracNow™ system, including our
CyberFrac™ digital operating system.
- Petronas (Malaysia) Awarded wellheads and trees for a
high-rate gas field.
- Hess Corporation (United States) Awarded flowback work
in the Bakken shale, which utilizes our latest innovations in
separation technology through our Automated Well Testing package in
addition to other flow testing services.
- Wellhead systems (Middle East) Received orders for
wellheads, trees and services for both onshore and shallow water
fields, including our unitized wellhead systems for sour gas
applications.
Corporate and Other Items
Corporate expense in the quarter was $29.1 million. Excluding
charges and credits totaling $1.9 million of expense, corporate
expense was $27.2 million. The results benefited from lower
activity as well as the accelerated pace of cost reduction
actions.
Foreign exchange gains and losses are now provided separately in
the Company’s financial statements and are no longer included in
Corporate expense. Foreign exchange losses in the quarter were $5.8
million, which resulted primarily from the impact of unhedged
currencies.
Net interest expense was $74.4 million in the quarter, which
included an increase in the liability payable to joint venture
partners of $50.8 million. Interest expense was negatively impacted
by higher short-term borrowing costs in the period which are
expected to return to normalized levels for the remainder of the
year.
The Company recorded a tax provision in the quarter of $17.7
million. The quarterly tax rate was impacted by earnings mix and
jurisdictions which are unable to record a tax benefit due to
operational losses.
Total depreciation and amortization for the quarter was $106.6
million.
The Company ended the period with cash and cash equivalents of
$4,809.5 million; net cash was $302.5 million.
Liquidity
During the quarter, the Company added two new sources of
liquidity including a £600 million European Commercial Paper
Program under the U.K. Government’s COVID Corporate Financing
Facility and a €500 million senior unsecured revolving credit
facility. This incremental funding further diversifies the
Company’s lending sources and provides additional flexibility over
the intermediate term.
Additionally, the Company announced amendments to its revolving
credit facility agreements allowing the add back of approximately
$3.2 billion of previously impaired goodwill to the Company’s total
capitalization ratio covenant. With this permanent amendment, the
ratio as of June 30, 2020 was 38 percent.
At the end of the second quarter, the Company had $6.8 billion
of cash and liquidity compared to $5.6 billion of cash and
liquidity as of March 31, 2020.
2020 Full-Year Financial Guidance1
The Company’s full-year guidance for 2020 can be found in the
table below.
All segment guidance assumes no further material degradation
from COVID-19 related impacts.
2020 Guidance *Updated
July 29, 2020
Subsea
Technip Energies
Surface Technologies
Revenue in a range of $5.3 - 5.6
billion*
Revenue in a range of $6.3 - 6.8
billion
Revenue in a range of $950 - 1,150
million*
EBITDA margin at least 8.5%* (excluding
charges and credits)
EBITDA margin at least 10% (excluding
charges and credits)
EBITDA margin at least 5.5%* (excluding
charges and credits)
TechnipFMC
Corporate expense, net* $130 - 150
million
Net interest expense $80 - 90
million
(excluding the impact of revaluation of
partners’ mandatorily redeemable financial liability)
Tax provision, as reported* $80 -
90 million
Capital expenditures approximately
$300 million
Free cash flow* $0 - 150
million
(cash flow from operations less capital
expenditures)
12020 segment guidance is reflective of new business perimeters
previously announced in 2019. Businesses with approximately $120
million of total revenue in 2019, most of which was in the Surface
Technologies segment, were re-allocated to Technip Energies at the
beginning of 2020. The revenue of these businesses is included in
Technip Energies guidance for 2020. Our guidance measures adjusted
EBITDA margin, corporate expense, net, net interest expense
(excluding the impact of revaluation of partners’ mandatorily
redeemable financial liability) and free cash flow 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.
Teleconference
The Company will host a teleconference on Thursday, July 30,
2020 to discuss the second quarter 2020 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 the energy industry; delivering
projects, products, technologies and services. With our proprietary
technologies and production systems, integrated expertise, and
comprehensive solutions, we are transforming our customers’ project
economics.
Organized in three business segments — Subsea, Surface
Technologies and Technip Energies — 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 customers in developing their energy resources and in their
positioning to meet the energy transition challenge.
Each of our approximately 37,000 employees is driven by a steady
commitment to clients and a culture of project execution,
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 disease outbreaks and other public health
issues, including the coronavirus disease 2019 (“COVID-19”), their
impact on the global economy and the business of our company,
customers, suppliers and other partners, changes in, and the
administration of, treaties, laws, and regulations, including in
response to such issues and the potential for such issues to
exacerbate other risks we face, including those related to the
factors listed or referenced below;
- risks associated with our ability to consummate our proposed
separation and spin-off;
- 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 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;
- 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 associated with tax liabilities, changes in U.S. federal
or international tax laws or interpretations to which they are
subject; and
- such other risk factors as set forth in our filings with the
U.S. 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 SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (In millions, except per share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue
$
3,158.5
$
3,434.2
$
6,288.8
$
6,347.2
Costs and expenses
3,054.4
3,120.6
9,320.7
5,898.8
104.1
313.6
(3,031.9)
448.4
Other (expense) income, net
3.3
(58.4)
3.6
(70.7)
Income (loss) before net interest expense
and income taxes
107.4
255.2
(3,028.3)
377.7
Net interest expense
(74.4)
(140.6)
(146.7)
(228.8)
Income (loss) before income taxes
33.0
114.6
(3,175.0)
148.9
Provision (benefit) for income taxes
17.7
0.9
55.4
15.4
Net income (loss)
15.3
113.7
(3,230.4)
133.5
Net (income) loss attributable to
non-controlling interests
(3.6)
(16.7)
(14.0)
(15.6)
Net income (loss) attributable to
TechnipFMC plc
$
11.7
$
97.0
$
(3,244.4)
$
117.9
Income (loss) per share attributable to
TechnipFMC plc:
Basic
$
0.03
$
0.22
$
(7.24)
$
0.26
Diluted
$
0.03
$
0.21
$
(7.24)
$
0.26
Weighted average shares outstanding:
Basic
448.3
447.5
447.9
447.7
Diluted
449.5
451.2
447.9
451.9
Cash dividends declared per share
$
—
$
0.13
$
0.13
$
0.26
Exhibit 2
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES BUSINESS SEGMENT DATA (In
millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue
Subsea
$
1,378.5
$
1,508.7
$
2,631.6
$
2,694.0
Technip Energies
1,538.3
1,505.0
3,086.0
2,840.1
Surface Technologies
241.7
420.5
571.2
813.1
$
3,158.5
$
3,434.2
$
6,288.8
$
6,347.2
Income (loss)
before income taxes
Segment operating
profit (loss)
Subsea
$
(75.6)
$
94.6
$
(2,826.3)
$
144.5
Technip Energies
231.3
274.0
382.5
429.7
Surface Technologies
(13.4)
25.5
(437.4)
36.0
Total segment operating profit (loss)
142.3
394.1
(2,881.2)
610.2
Corporate
items
Corporate expense (1)
(29.1)
(120.9)
(98.0)
(202.9)
Net interest expense
(74.4)
(140.6)
(146.7)
(228.8)
Foreign exchange loss
(5.8)
(18.0)
(49.1)
(29.6)
Total corporate items
(109.3)
(279.5)
(293.8)
(461.3)
Income (loss) before income taxes (2)
$
33.0
$
114.6
$
(3,175.0)
$
148.9
(1) Corporate expense primarily includes corporate staff
expenses, share-based compensation expenses, and other employee
benefits.
(2) Includes amounts attributable to non-controlling
interests.
Exhibit 3
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES BUSINESS SEGMENT DATA (In
millions, unaudited)
Three Months Ended
Six Months Ended
Inbound
Orders (1)
June 30,
June 30,
2020
2019
2020
2019
Subsea
$
511.7
$
2,632.7
$
1,683.8
$
5,310.4
Technip Energies
835.8
8,131.2
1,396.4
11,270.0
Surface Technologies
187.1
415.7
553.4
783.6
Total inbound orders
$
1,534.6
$
11,179.6
$
3,633.6
$
17,364.0
Order
Backlog (2)
June 30,
2020
2019
Subsea
$
7,085.3
$
8,747.0
Technip Energies
13,132.6
16,608.3
Surface Technologies
385.9
426.6
Total order backlog
$
20,603.8
$
25,781.9
(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 SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (In millions)
(Unaudited)
June 30, 2020
December 31,
2019
Cash and cash equivalents
$
4,809.5
$
5,190.2
Trade receivables, net
2,226.1
2,287.1
Contract assets
1,414.4
1,520.0
Inventories, net
1,370.2
1,416.0
Other current assets
1,661.5
1,473.1
Total current assets
11,481.7
11,886.4
Property, plant and equipment, net
2,850.8
3,162.0
Goodwill
2,470.7
5,598.3
Intangible assets, net
1,026.9
1,086.6
Other assets
1,764.3
1,785.5
Total assets
$
19,594.4
$
23,518.8
Short-term debt and current portion of
long-term debt
$
524.1
$
495.4
Accounts payable, trade
2,476.1
2,659.8
Contract liabilities
4,685.4
4,585.1
Other current liabilities
2,212.0
2,398.1
Total current liabilities
9,897.6
10,138.4
Long-term debt, less current portion
3,982.9
3,980.0
Other liabilities
1,497.2
1,671.2
Redeemable non-controlling interest
41.1
41.1
TechnipFMC plc stockholders’ equity
4,141.1
7,659.3
Non-controlling interests
34.5
28.8
Total liabilities and equity
$
19,594.4
$
23,518.8
Exhibit 5
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (In millions)
(Unaudited)
Six Months Ended
June 30,
2020
2019
Cash provided (required) by operating
activities
Net income (loss)
$
(3,230.4)
$
133.5
Adjustments to reconcile net income to
cash provided (required) by operating activities
Depreciation
166.0
176.2
Amortization
61.0
60.7
Impairments
3,221.7
1.2
Employee benefit plan and share-based
compensation costs
36.2
37.6
Deferred income tax provision (benefit),
net
(42.8)
(127.5)
Unrealized loss on derivative instruments
and foreign exchange
4.2
27.5
Income from equity affiliates, net of
dividends received
(36.9)
(24.1)
Other
112.3
233.3
Changes in operating assets and
liabilities, net of effects of acquisitions
Trade receivables, net and contract
assets
(10.4)
(82.8)
Inventories, net
(58.7)
(134.9)
Accounts payable, trade
(41.1)
(105.0)
Contract liabilities
147.5
274.2
Income taxes payable (receivable), net
17.1
(68.4)
Other current assets and liabilities,
net
(414.8)
(240.6)
Other noncurrent assets and liabilities,
net
3.1
34.6
Cash provided (required) by operating
activities
(66.0)
195.5
Cash provided (required) by investing
activities
Capital expenditures
(177.7)
(270.5)
Payment to acquire debt securities
—
(59.7)
Proceeds from sale of debt securities
—
18.9
Cash received from divestiture
2.5
—
Proceeds from sale of assets
25.4
1.3
Proceeds from repayment of advance to
joint venture
12.5
22.5
Cash required by investing activities
(137.3)
(287.5)
Cash required by financing activities
Net increase (decrease) in short-term
debt
21.6
(17.9)
Net decrease in commercial paper
(112.9)
(479.5)
Proceeds from issuance of long-term
debt
163.6
96.2
Purchase of ordinary shares
—
(90.1)
Dividends paid
(59.2)
(116.6)
Payments related to taxes withheld on
share-based compensation
(6.4)
—
Settlements of mandatorily redeemable
financial liability
(135.3)
(220.6)
Cash required by financing activities
(128.6)
(828.5)
Effect of changes in foreign exchange
rates on cash and cash equivalents
(48.8)
1.8
Decrease in cash and cash equivalents
(380.7)
(918.7)
Cash and cash equivalents, beginning of
period
5,190.2
5,540.0
Cash and cash equivalents, end of
period
$
4,809.5
$
4,621.3
Exhibit 6
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES CASH AND CASH EQUIVALENTS (In
billions, unaudited)
June 30,
2020
Held by joint ventures
$
2.8
Operating cash and cash equivalents
2.0
Total cash and cash equivalents
$
4.8
Exhibit 7
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES BUSINESS SEGMENT DATA FOR YAMAL LNG JOINT
VENTURE (In millions, unaudited)
We control the voting control interests in the legal Technip
Energies 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.
June 30,
2020
Contract liabilities
$
1,096.9
Mandatorily redeemable financial
liability
$
219.8
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2020
Cash provided by operating activities
$
(20.7)
$
(50.9)
Settlements of mandatorily redeemable
financial liability
$
(131.1)
$
(135.3)
Exhibit 8
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES RECONCILIATION 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 second
quarter 2020 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 2019 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
June 30, 2020
Net income attributable to
TechnipFMC plc
Net income (loss) attributable
to non-controlling 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
$
11.7
$
3.6
$
17.7
$
74.4
$
107.4
$
106.6
$
214.0
Charges and (credits):
Impairment and other charges
53.5
—
(19.8)
—
33.7
—
33.7
Restructuring and other charges
47.6
—
2.6
—
50.2
—
50.2
Direct COVID-19 expenses
47.8
—
8.6
—
56.4
—
56.4
Litigation settlement
(113.2)
—
—
—
(113.2)
—
(113.2)
Valuation allowance
(5.2)
—
5.2
—
—
—
—
Adjusted financial measures
$
42.2
$
3.6
$
14.3
$
74.4
$
134.5
$
106.6
$
241.1
Diluted earnings (loss) per share
attributable to TechnipFMC plc, as reported
$
0.03
Adjusted diluted earnings per share
attributable to TechnipFMC plc
$
0.09
Three Months Ended
June 30, 2019
Net income (loss) attributable
to TechnipFMC plc
Net income (loss) attributable
to non-controlling interests
Provision (benefit) 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
$
97.0
$
16.7
$
0.9
$
140.6
$
255.2
$
117.5
$
372.7
Charges and (credits):
Impairment and other charges
0.4
—
0.1
—
0.5
—
0.5
Restructuring and other severance
charges
6.7
—
2.0
—
8.7
—
8.7
Business combination transaction and
integration costs
9.8
—
3.1
—
12.9
—
12.9
Legal provision, net
55.2
—
—
—
55.2
—
55.2
Purchase price accounting adjustment
6.5
—
2.0
—
8.5
(8.5)
—
Adjusted financial measures
$
175.6
$
16.7
$
8.1
$
140.6
$
341.0
$
109.0
$
450.0
Diluted earnings per share attributable to
TechnipFMC plc, as reported
$
0.21
Adjusted diluted earnings per share
attributable to TechnipFMC plc
$
0.39
Exhibit 9
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES RECONCILIATION 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 second
quarter 2020 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 2019 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.
Six Months Ended
June 30, 2020
Net income (loss) attributable
to TechnipFMC plc
Net income (loss) attributable
to non-controlling interests
Provision (benefit) 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
$
(3,244.4)
$
14.0
$
55.4
$
146.7
$
(3,028.3)
$
227.0
$
(2,801.3)
Charges and (credits):
Impairment and other charges
3,213.4
—
8.3
—
3,221.7
—
3,221.7
Restructuring and other charges
56.2
—
5.4
—
61.6
—
61.6
Direct COVID-19 expenses
54.6
—
10.8
—
65.4
—
65.4
Litigation settlement
(113.2)
—
—
—
(113.2)
—
(113.2)
Separation costs
20.2
—
6.9
—
27.1
—
27.1
Purchase price accounting adjustment
6.5
—
2.0
—
8.5
(8.5)
—
Valuation allowance
(0.2)
—
0.2
—
—
—
—
Adjusted financial measures
$
(6.9)
$
14.0
$
89.0
$
146.7
$
242.8
$
218.5
$
461.3
Diluted earnings (loss) per share
attributable to TechnipFMC plc, as reported
$
(7.24)
Adjusted diluted earnings per share
attributable to TechnipFMC plc
$
(0.02)
Six Months Ended
June 30, 2019
Net income (loss) attributable
to TechnipFMC plc
Net income (loss) attributable
to non-controlling interests
Provision (benefit) 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
$
117.9
$
15.6
$
15.4
$
228.8
$
377.7
$
236.9
$
614.6
Charges and (credits):
Impairment and other charges
0.9
—
0.3
—
1.2
—
1.2
Restructuring and other severance
charges
18.3
—
6.2
—
24.5
—
24.5
Business combinations transaction and
integration costs
18.7
—
6.3
—
25.0
—
25.0
Reorganization
19.2
—
6.1
—
25.3
—
25.3
Legal provision, net
55.2
—
—
—
55.2
—
55.2
Purchase price accounting adjustment
13.0
—
4.0
—
17.0
(17.0)
—
Valuation allowance
(40.3)
—
40.3
—
—
—
—
Adjusted financial measures
$
202.9
$
15.6
$
78.6
$
228.8
$
525.9
$
219.9
$
745.8
Diluted earnings (loss) per share
attributable to TechnipFMC plc, as reported
$
0.26
Adjusted diluted earnings per share
attributable to TechnipFMC plc
$
0.45
Exhibit 10
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (In millions, unaudited)
Three Months Ended
June 30, 2020
Subsea
Technip Energies
Surface Technologies
Corporate Expense
Foreign Exchange, net
Total
Revenue
$
1,378.5
$
1,538.3
$
241.7
$
—
$
—
$
3,158.5
Operating profit (loss), as reported
(pre-tax)
$
(75.6)
$
231.3
$
(13.4)
$
(29.1)
$
(5.8)
$
107.4
Charges and (credits):
Impairment and other charges
32.5
—
1.2
—
—
33.7
Restructuring and other charges
35.9
11.1
1.3
1.9
—
50.2
Direct COVID-19 expenses
27.4
24.8
4.2
—
—
56.4
Litigation settlement
—
(113.2)
—
—
—
(113.2)
Subtotal
95.8
(77.3)
6.7
1.9
—
27.1
Adjusted Operating profit (loss)
20.2
154.0
(6.7)
(27.2)
(5.8)
134.5
Adjusted Depreciation and amortization
79.4
8.6
15.0
3.6
—
106.6
Adjusted EBITDA
$
99.6
$
162.6
$
8.3
$
(23.6)
$
(5.8)
$
241.1
Operating profit margin, as reported
-5.5
%
15.0
%
-5.5
%
3.4
%
Adjusted Operating profit margin
1.5
%
10.0
%
-2.8
%
4.3
%
Adjusted EBITDA margin
7.2
%
10.6
%
3.4
%
7.6
%
Three Months Ended
June 30, 2019
Subsea
Technip Energies
Surface Technologies
Corporate Expense
Foreign Exchange, net
Total
Revenue
$
1,508.7
$
1,505.0
$
420.5
$
—
$
—
$
3,434.2
Operating profit (loss), as reported
(pre-tax)
$
94.6
$
274.0
$
25.5
$
(120.9)
$
(18.0)
$
255.2
Charges and (credits):
Impairment and other charges
(0.1)
—
0.6
—
—
0.5
Restructuring and other severance
charges
4.6
2.1
0.6
1.4
—
8.7
Business combination transaction and
integration costs
—
—
—
12.9
—
12.9
Legal provision, net
—
—
—
55.2
—
55.2
Purchase price accounting adjustments -
amortization related
8.5
—
—
—
—
8.5
Subtotal
13.0
2.1
1.2
69.5
—
85.8
Adjusted Operating profit (loss)
107.6
276.1
26.7
(51.4)
(18.0)
341.0
Adjusted Depreciation and amortization
78.6
5.8
20.0
4.6
—
109.0
Adjusted EBITDA
$
186.2
$
281.9
$
46.7
$
(46.8)
$
(18.0)
$
450.0
Operating profit margin, as reported
6.3
%
18.2
%
6.1
%
7.4
%
Adjusted Operating profit margin
7.1
%
18.3
%
6.3
%
9.9
%
Adjusted EBITDA margin
12.3
%
18.7
%
11.1
%
13.1
%
Exhibit 11
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (In millions, unaudited)
Six Months Ended
June 30, 2020
Subsea
Technip Energies
Surface Technologies
Corporate Expense
Foreign Exchange, net
Total
Revenue
$
2,631.6
$
3,086.0
$
571.2
$
—
$
—
$
6,288.8
Operating profit (loss), as reported
(pre-tax)
$
(2,826.3)
$
382.5
$
(437.4)
$
(98.0)
$
(49.1)
$
(3,028.3)
Charges and (credits):
Impairment and other charges
2,809.0
—
412.7
—
—
3,221.7
Restructuring and other charges*
29.0
14.0
13.1
5.5
—
61.6
Direct COVID-19 expenses
31.4
28.7
5.3
—
—
65.4
Litigation settlement
—
(113.2)
—
—
—
(113.2)
Separation costs
—
—
—
27.1
—
27.1
Purchase price accounting adjustments
8.5
—
—
—
—
8.5
Subtotal
2,877.9
(70.5)
431.1
32.6
—
3,271.1
Adjusted Operating profit (loss)
51.6
312.0
(6.3)
(65.4)
(49.1)
242.8
Adjusted Depreciation and amortization
152.8
17.7
39.1
8.9
—
218.5
Adjusted EBITDA
$
204.4
$
329.7
$
32.8
$
(56.5)
$
(49.1)
$
461.3
Operating profit margin, as reported
-107.4
%
12.4
%
-76.6
%
-48.2
%
Adjusted Operating profit margin
2.0
%
10.1
%
-1.1
%
3.9
%
Adjusted EBITDA margin
7.8
%
10.7
%
5.7
%
7.3
%
*On December 30, 2019, we completed the acquisition of the
remaining 50% of Technip Odebrecht PLSV CV. A $7.3 million gain
recorded within restructuring and other charges in the Subsea
segment during the six months ended June 30, 2020.
Six Months Ended
June 30, 2019
Subsea
Technip Energies
Surface Technologies
Corporate Expense
Foreign Exchange, net
Total
Revenue
$
2,694.0
$
2,840.1
$
813.1
$
—
$
—
$
6,347.2
Operating profit (loss), as reported
(pre-tax)
$
144.5
$
429.7
$
36.0
$
(202.9)
$
(29.6)
$
377.7
Charges and (credits):
Impairment and other charges
0.6
—
0.6
—
—
1.2
Restructuring and other severance
charges
6.2
5.9
2.1
10.3
—
24.5
Business combination transaction and
integration costs
—
—
—
25.0
—
25.0
Reorganization
—
25.3
—
—
—
25.3
Legal provision, net
—
—
—
55.2
—
55.2
Purchase price accounting adjustments -
amortization related
17.0
—
—
—
—
17.0
Subtotal
23.8
31.2
2.7
90.5
—
148.2
Adjusted Operating profit (loss)
168.3
460.9
38.7
(112.4)
(29.6)
525.9
Adjusted Depreciation and amortization
157.6
15.8
38.1
8.4
—
219.9
Adjusted EBITDA
$
325.9
$
476.7
$
76.8
$
(104.0)
$
(29.6)
$
745.8
Operating profit margin, as reported
5.4
%
15.1
%
4.4
%
6.0
%
Adjusted Operating profit margin
6.2
%
16.2
%
4.8
%
8.3
%
Adjusted EBITDA margin
12.1
%
16.8
%
9.4
%
11.8
%
Exhibit 12
TECHNIPFMC PLC AND
CONSOLIDATED SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (In millions, unaudited)
June 30, 2020
March 31, 2020
December 31,
2019
Cash and cash equivalents
$
4,809.5
$
4,999.4
$
5,190.2
Short-term debt and current portion of
long-term debt
(524.1)
(586.7)
(495.4)
Long-term debt, less current portion
(3,982.9)
(3,823.9)
(3,980.0)
Net cash
$
302.5
$
588.8
$
714.8
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200729005934/en/
Contacts Investor relations Matt Seinsheimer Vice
President Investor Relations Tel: +1 281 260 3665 Email: Matt
Seinsheimer
Phillip Lindsay Director Investor Relations (Europe) Tel: +44
(0) 20 3429 3929 Email: Phillip Lindsay
Media relations Christophe Bélorgeot Senior Vice
President Corporate Engagement Tel: +33 1 47 78 39 92 Email:
Christophe Belorgeot
Brooke Robertson Public Relations Director Tel: +1 281 591 4108
Email: Brooke Robertson
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