FMC Technologies Reports Fourth Quarter 2010 Diluted Earnings per Share of $0.82
HOUSTON, Feb. 14, 2011 /PRNewswire/ — FMC Technologies, Inc. (NYSE: FTI) today reported fourth quarter 2010 revenue of $1.1 billion and diluted earnings per share from continuing operations of $0.82. The diluted earnings per share were affected by a combination of tax items that resulted in a net benefit of $0.13 per diluted share.
Total inbound orders of $1.6 billion were up 121 percent from the fourth quarter of 2009 and included $1.1 billion in subsea systems orders, bringing the full year subsea orders to a record total of $4.1 billion. Backlog for the Company reached $4.2 billion including subsea systems backlog of $3.6 billion. Subsea systems recorded its fourth consecutive quarterly backlog increase.
Full Year 2010 Results
Total Company revenue for 2010 was $4.1 billion, and total Company operating profit increased two percent to a record $633.4 million. The full year 2010 diluted earnings per share from continuing operations were $3.06.
“We are pleased to report our eighth consecutive year of earnings growth,” said Peter D. Kinnear, Chairman and Chief Executive Officer. “For 2011, we expect global deepwater activity will grow and subsea orders will remain strong. Our estimate for 2011 diluted earnings per share is $3.20 to $3.40.”
Review of Operations – Fourth Quarter 2010
Energy Production Systems
Energy Production Systems’ fourth quarter revenue was $875.1 million, including subsea systems revenue of $689 million. Surface wellhead revenue was up 11 percent from the third quarter of 2010 and was at the highest level since 2008.
Energy Production Systems’ operating profit of $105.5 million decreased 20 percent from the prior-year quarter, primarily due to lower volume in subsea systems.
Energy Production Systems’ inbound orders for the fourth quarter were $1.3 billion, including subsea systems orders of $1.1 billion. Subsea systems finished the year with a record total of $4.1 billion in orders. Backlog for Energy Production Systems was $3.9 billion, including $3.6 billion in subsea systems at the end of the fourth quarter.
Energy Processing Systems
Energy Processing Systems’ fourth quarter revenue of $222.9 million was 26 percent higher than the prior-year quarter. The increase came mainly from the fluid control business, which had record revenue in the quarter.
Energy Processing Systems had record operating profit of $43.5 million in the fourth quarter, up 111 percent from the prior-year quarter. The increase was mainly driven by higher volume in the fluid control business resulting from strong North American pressure pumping activity.
Energy Processing Systems’ inbound orders were a record $255.8 million in the fourth quarter led by strong fluid control and measurement solutions orders. Backlog for the segment finished the quarter at $296.0 million.
Corporate Items
Corporate expense in the fourth quarter was $10.9 million, an increase of $0.7 million from the prior-year quarter. Other expense, net, was $3.0 million, a decrease of $2.4 million from the prior-year quarter.
The Company ended the quarter with net debt of $47.8 million. Net interest expense was $2.3 million in the quarter.
Depreciation and amortization for the fourth quarter was $24.2 million, down $4.1 million from the prior-year quarter. Capital expenditures for the fourth quarter totaled $47.5 million, bringing the full year total to $112.5 million.
The Company recorded an effective tax rate of 24.7 percent for the fourth quarter. Excluding an IRS tax appeal resolution and a combination of other tax events, the effective tax rate would have been 36.3 percent.
Summary and Outlook
FMC Technologies reported fourth quarter diluted earnings per share from continuing operations of $0.82 including a net benefit of $0.13 per diluted share from tax items. The 2010 total Company revenue was $4.1 billion, and total Company operating profit increased two percent to a record $633.4 million.
Total inbound orders of $1.6 billion were up 121 percent from the fourth quarter of 2009 and included $1.1 billion in subsea systems orders, bringing the full year subsea orders to a record total of $4.1 billion. Backlog for the Company reached $4.2 billion including subsea systems backlog of $3.6 billion.
The Company provided guidance for 2011 diluted earnings per share from continuing operations in a range of $3.20 to $3.40.
FMC Technologies, Inc. (NYSE: FTI) is a leading global provider of technology solutions for the energy industry. Named by FORTUNE® Magazine as the World’s Most Admired Oil and Gas Equipment, Service Company in 2010, the Company has approximately 11,200 employees and operates 25 production facilities in 15 countries. FMC Technologies designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. For more information visit www.fmctechnologies.com.
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company’s ability to control. These risks and uncertainties are described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and as modified in subsequent quarterly reports filed by the Company with the Securities and Exchange Commission that may be accessed on the Company’s website. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.
FMC Technologies, Inc. will conduct its fourth quarter 2010 conference call at 9:00 a.m. EST on Tuesday, February 15, 2011. The event will be available at www.fmctechnologies.com. An archived audio replay will also 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 at www.fmctechnologies.com/earnings.
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FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited and in millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
----------- -----------
2010 2009 2010 2009
---- ---- ---- ----
Revenue $1,102.8 $1,160.2 $4,125.6 $4,405.4
Costs and expenses 966.4 1,023.8 3,574.0 3,875.3
----- ------- ------- -------
136.4 136.4 551.6 530.1
Other expense, net (0.3) (0.3) (4.9) (2.7)
---- ---- ---- ----
Income before net
interest expense
and income taxes 136.1 136.1 546.7 527.4
Net interest
expense (2.3) (3.0) (8.8) (9.5)
---- ---- ---- ----
Income from
continuing
operations before
income taxes 133.8 133.1 537.9 517.9
Provision for
income taxes 32.8 40.3 159.6 155.1
---- ---- ----- -----
Income from
continuing
operations 101.0 92.8 378.3 362.8
Income (loss) from
discontinued
operations, net
of income taxes (0.7) 0.3 (0.4) 0.5
---- --- ---- ---
Net Income 100.3 93.1 377.9 363.3
Less: net (income)
loss attributable
to noncontrolling
interests (1.0) 0.1 (2.4) (1.5)
Net income
attributable to
FMC Technologies,
Inc. $99.3 $93.2 $375.5 $361.8
===== ===== ====== ======
Basic Earnings per
share
attributable to
FMC Technologies,
Inc.:
Income from
continuing
operations $0.83 $0.75 $3.09 $2.91
Income (loss) from
discontinued
operations (0.01) 0.01 - -
----- ---- --- ---
Basic earnings per
share $0.82 $0.76 $3.09 $2.91
===== ===== ===== =====
Basic weighted
average shares
outstanding 120.6 123.1 121.5 124.3
===== ===== ===== =====
Diluted earnings
per share
attributable to
FMC Technologies,
Inc.:
Income from
continuing
operations $0.82 $0.75 $3.06 $2.87
Income (loss) from
discontinued
operations - - - 0.01
--- --- --- ----
Diluted earnings
per share $0.82 $0.75 $3.06 $2.88
===== ===== ===== =====
Diluted weighted
average shares
outstanding 121.7 124.6 122.7 125.7
===== ===== ===== =====
Net income
attributable to
FMC Technologies,
Inc.:
Income from
continuing
operations $100.0 $92.9 $375.9 $361.3
Income (loss) from
discontinued
operations (0.7) 0.3 (0.4) 0.5
Net income
attributable to
FMC Technologies,
Inc. $99.3 $93.2 $375.5 $361.8
===== ===== ====== ======
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months Twelve Months
Ended Ended
December 31 December 31
----------- -----------
2010 2009 2010 2009
---- ---- ---- ----
Revenue
-------
Energy Production
Systems $875.1 $988.8 $3,355.7 $3,721.9
Energy Processing
Systems 222.9 177.1 775.5 698.4
Other revenue (1)
and intercompany
eliminations 4.8 (5.7) (5.6) (14.9)
--- ---- ---- -----
$1,102.8 $1,160.2 $4,125.6 $4,405.4
======== ======== ======== ========
Income before income
taxes
--------------------
Segment operating
profit
-----------------
Energy Production
Systems $105.5 $131.2 $498.6 $516.1
Energy Processing
Systems 43.5 20.6 134.8 102.4
---- ---- ----- -----
Total segment
operating profit 149.0 151.8 633.4 618.5
Corporate items
---------------
Corporate expense (10.9) (10.2) (40.2) (35.4)
Other revenue and
other expense, net
(1) (3.0) (5.4) (48.9) (57.2)
Net interest expense (2.3) (3.0) (8.8) (9.5)
---- ---- ---- ----
Total corporate
items (16.2) (18.6) (97.9) (102.1)
----- ----- ----- ------
Income from
continuing
operations before
income taxes
attributable to FMC
Technologies, Inc. $132.8 $133.2 $535.5 $516.4
====== ====== ====== ======
(1) Other revenue comprises certain unrealized gains and losses on
derivative instruments related to unexecuted sales contracts. Other
expense, net, generally includes stock-based compensation, other
employee benefits, LIFO adjustments, certain foreign exchange gains
and losses, and the impact of unusual or strategic transactions not
representative of segment operations.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months
Ended Twelve Months Ended
December 31 December 31
----------- -----------
2010 2009 (1) 2010 2009 (1)
---- ------- ---- -------
Inbound Orders
--------------
Energy
Production
Systems $1,338.6 $560.7 $4,820.9 $2,353.2
Energy
Processing
Systems 255.8 172.7 855.5 600.1
----- ----- ----- -----
Subtotal Energy
Systems 1,594.4 733.4 5,676.4 2,953.3
Other orders
and
intercompany
eliminations 4.8 (9.9) (1.6) (17.7)
--- ---- ---- -----
Total inbound
orders $1,599.2 $723.5 $5,674.8 $2,935.6
======== ====== ======== ========
December 31
-----------
2010 2009
---- ----
Order Backlog
-------------
Energy
Production
Systems $3,879.7 $2,332.6
Energy
Processing
Systems 296.0 221.1
----- -----
Subtotal Energy
Systems 4,175.7 2,553.7
Intercompany
eliminations (4.2) (8.3)
---- ----
Total order
backlog $4,171.5 $2,545.4
======== ========
(1) Inbound orders for 2009 have been revised to exclude the effects
of foreign currency translation on backlog. Prior to 2010, the
Company's practice was to include backlog translation effects as a
component of inbound orders.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In millions)
December
31, December 31,
2010 2009
(Unaudited)
-----------
Cash and cash equivalents $315.5 $460.7
Trade receivables, net 1,103.4 879.2
Inventories 566.5 591.8
Other current assets (1) 359.9 336.4
Total current assets 2,345.3 2,268.1
Property, plant and equipment,
net 609.0 581.9
Goodwill 274.8 272.7
Intangible assets, net 140.5 154.6
Investments 148.2 141.8
Other assets (1) 126.4 137.3
Total assets $3,644.2 $3,556.4
======== ========
Short-term debt and current
portion of long-term debt $12.2 $28.5
Accounts payable, trade 344.1 343.9
Advance payments and progress
billings 556.4 670.4
Other current liabilities (1) 582.7 678.2
Total current liabilities 1,495.4 1,721.0
Long-term debt, less current
portion 351.1 391.6
Other liabilities (1) 475.4 332.0
FMC Technologies, Inc.
stockholders' equity 1,311.7 1,102.8
Noncontrolling interest in
consolidated companies 10.6 9.0
Total liabilities and equity $3,644.2 $3,556.4
======== ========
(1) Certain amounts reported in 2009 for current and deferred taxes
have been reclassified between other current assets, other current
liabilities, other assets and other liabilities to conform to the
current year presentation of tax assets and liabilities related to
different tax jurisdictions.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited and in millions)
Twelve Months
Ended
December 31
-----------
2010 2009
---- ----
Cash provided (required)
by operating activities
of continuing operations:
Income from continuing
operations $375.9 $361.3
Depreciation and
amortization 101.3 93.0
Trade accounts receivable,
net (217.3) 211.3
Inventories 19.4 7.5
Accounts payable, trade 2.8 (142.8)
Advance payments and
progress billings (111.7) (182.4)
Other 24.4 248.7
Net cash provided by
operating activities of
continuing operations 194.8 596.6
Cash provided (required)
by operating activities
of discontinued
operations 0.5 (2.1)
Cash provided (required)
by investing activities:
Capital expenditures (112.5) (110.0)
Proceeds from disposal of
assets 3.1 18.9
Acquisitions, minority
ownership positions and
other investing - (162.6)
Net cash required by
investing activities (109.4) (253.7)
Cash provided (required)
by financing activities:
Net repayment of debt (57.9) (80.2)
Issuance of capital stock 2.3 3.1
Purchase of stock held in
treasury (164.4) (155.7)
Other financing (10.8) (4.8)
Net cash required by
financing activities (230.8) (237.6)
Effect of changes in
foreign exchange rates on
cash and cash equivalents (0.3) 17.4
---- ----
Increase (decrease) in
cash and cash equivalents (145.2) 120.6
Cash and cash equivalents,
beginning of period 460.7 340.1
----- -----
Cash and cash equivalents,
end of period $315.5 $460.7
====== ======
SOURCE FMC Technologies, Inc.