TechnipFMC Announces Second Quarter 2020 Results

Source Press Release
Company TechnipFMC plcCNOOC LtdEnergean plcENIEquinor ASAHess CorporationIndian Oil Corporation LimitedPetronasWoodside Petroleum Limited 
Tags LNG & Gas Storage/Processing, Marcellus, Unconventional Resources, Upstream Activities, Strategy - Upstream, Capital Spending, Guidance, Strategy - Corporate, Financial & Operating Data
Date July 29, 2020

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.

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) 
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) 

2020 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.

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.

Source: EvaluateEnergy® ©2021 EvaluateEnergy Ltd