Press Release

HOUSTON, Oct. 19, 2016 /PRNewswire/ -- FMC Technologies, Inc. (NYSE:FTI) today reported third quarter 2016 revenue of $1.1 billion, down 29 percent from the prior-year quarter primarily due to lower activity across all reporting segments. Diluted earnings per share from continuing operations were $0.20, which includes total Company pre-tax charges of $43 million, or $0.15 per diluted share as detailed in the attached financial schedules. Adjusted diluted earnings per share from continuing operations were $0.35.

"Subsea Technologies achieved further improvement in segment operating margins, with third quarter results being the highest levels we have recorded in 2016," said Doug Pferdehirt, President and CEO of FMC Technologies. "The strong performance resulted from solid project execution, combined with the benefits of our cost reduction actions that continued in the quarter. We have used this downturn as a catalyst to make fundamental changes to our business model that will continue to provide sustainable benefits."

Total inbound orders were $692.2 million, including $401 million in Subsea Technologies orders. Backlog for the Company was $3 billion, including Subsea Technologies backlog of $2.5 billion.

"We received our second subsea multiphase boosting pump order in the quarter. This award, for ENI's Block 15/06 West Hub Development, further demonstrates our capabilities in this attractive growth segment," Pferdehirt added. "We anticipate that small order intake will continue to improve and that large project orders will follow as operators embrace strategies that improve project economics through the acceleration of time to first oil, schedule certainty, and lower costs. At FMC Technologies, our relentless focus on these key drivers is yielding benefits for our customers today and will result in even greater benefits in the future."

Review of Operations - Third Quarter 2016

Subsea Technologies

Subsea Technologies third quarter revenue was $798.4 million, down 27 percent from the prior-year quarter, primarily due to lower inbound orders achieved during 2015 that affected the backlog coming into the year.

Subsea Technologies operating profit was $119.7 million; adjusted operating profit was $125.1 million, excluding charges of $5.4 million as shown in the attached financial schedules.

Subsea Technologies operating margins were 15 percent; adjusted operating margins were 15.7 percent, excluding charges.

Subsea Technologies inbound orders for the third quarter were $401 million. Backlog was $2.5 billion, compared to prior-year backlog of $4.3 billion.

Surface Technologies

Surface Technologies third quarter revenue was $218.1 million, down 40 percent from the prior-year quarter, primarily due to the 43 percent decline in the North American rig count average.

Surface Technologies reported an operating loss of $19.6 million; adjusted operating loss was $5.2 million, excluding charges of $14.4 million mainly for restructuring initiatives in North America. This is shown in the attached financial schedules.   

Surface Technologies inbound orders for the third quarter were $242.2 million. Backlog was $379.3 million, predominantly related to the Company's wellhead business outside of North America.

Energy Infrastructure

Energy Infrastructure third quarter revenue was $77.1 million, down 21 percent from the prior-year quarter, due to lower activity across the segment.

Energy Infrastructure reported operating profit of $2.5 million; adjusted operating profit was $3.7 million, excluding charges of $1.2 million as shown in the attached financial schedules.

Energy Infrastructure operating margins were 3.3 percent; adjusted operating margins were 4.9 percent, excluding charges.

Energy Infrastructure inbound orders for the third quarter were $55.9 million. Backlog was $112.4 million.

Corporate Items

Corporate expense in the third quarter was $14.2 million.

Other revenue and other expense, net, increased $21.9 million from the prior-year quarter to $43.8 million of expense. Items of significance included the following:

• $11.6 million, or $0.05 per diluted share of business combination transaction and integration costs related to the Company's proposed merger with Technip S.A.;
• $7.6 million, or $0.02 per diluted share, of costs related to restructuring and other severance charges; and
• $3.6 million, or $0.01 per diluted share, of transition costs related to facility consolidations.

Net interest expense was $7.7 million in the quarter.

The Company ended the quarter with net debt of $189.9 million, down $61.4 million sequentially. Cash and cash equivalents were $1.1 billion.

In accordance with the Business Combination Agreement related to our proposed merger with Technip S.A., the Company has suspended share repurchase activity until the completion of the proposed merger. Accordingly, the Company did not repurchase any common stock during the quarter.

Depreciation and amortization for the third quarter was $57.3 million and capital expenditures were $26.1 million.

The Company recorded a negative effective tax rate of 25.8 percent for the third quarter. The tax benefit of $9.5 million reflects the quarterly impact from the change in the full year estimated earnings mix, due mainly to lower North American profit as well as tax benefits associated with the charges taken in the quarter.

Summary

FMC Technologies reported third quarter diluted earnings per share from continuing operations of $0.20.

Adjusted diluted earnings per share from continuing operations were $0.35, when excluding total Company pre-tax charges of $43 million, or $0.15 per diluted share. These charges included restructuring and other severance charges, business combination transaction and integration costs, transition and facility consolidation costs, and impairment and other charges.

The Company recorded Subsea Technologies revenue of $798.4 million in the quarter with margins of 15 percent; adjusted operating margins were 15.7 percent, excluding charges.

Total inbound orders of $692.2 million in the third quarter included $401 million in Subsea Technologies orders.

The Company's backlog stands at $3 billion, including Subsea Technologies backlog of $2.5 billion.

About FMC Technologies
FMC Technologies, Inc. (NYSE: FTI) is the global market leader in subsea systems and a leading provider of technologies and services to the oil and gas industry. We help our customers overcome their most difficult challenges, such as improving shale and subsea infrastructures and operations to reduce cost, maintain uptime, and maximize oil and gas recovery. The company has approximately 14,500 employees and operates 29 major production facilities and services bases in 18 countries. Visit www.fmctechnologies.com or follow us on Twitter @FMC_Tech for more information.

This release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words such as "expected," "continue," "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. FMC Technologies cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include those set forth in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as the following: 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; potential liabilities arising out of the installation or use of our products; U.S. and international laws and regulations, including 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 foreign countries in which we conduct business; fluctuations in currency markets worldwide; cost overruns that may affect profit realized on our fixed price contracts; disruptions in the timely delivery of our backlog and its effect on our future sales, profitability, and our relationships with our customers; the cumulative loss of major contracts or alliances; rising costs and availability of raw materials; a failure of our information technology infrastructure or any significant breach of security; our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets; the outcome of uninsured claims and litigation against us; deterioration in future expected profitability or cash flows and its effect on our goodwill; a downgrade in the ratings of our debt could restrict our ability to access the debt capital markets; continuing consolidation within our industry; and our dependence on the continuing services of certain of our key managers and employees. FMC Technologies undertakes no obligation to publicly update or revise any of its 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.  

Investor Relations        
Matt Seinsheimer
P: 281.260.3665
investorrelations@fmcti.com

Media
Lisa Albiston
P: 281.931.2513
media.request@fmcti.com

Lisa Adams
P: 281.405.4659
media.request@fmcti.com

FMC Technologies, Inc.
5875 N Sam Houston
Pkwy W
Houston, Texas 77086
P: 281.591.4000
www.fmctechnologies.com

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SOURCE  FMC Technologies, Inc.

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