Q2 2024 TechnipFMC plc Earnings Call

Operator: Thank you for standing by, and welcome to the Technip FMC second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. If you would like to withdraw your question, press star 1 again.

Operator: Thank you for standing by, and welcome to the TechnipFMC second quarter 2020-44 earnings conference call. All lines have been placed a meal to prevent any background noise.

Speaker Change: Thank you for standing by and welcome to the Technip FMC Second Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

After the speaker's remarks, there will be a question and answer session.

Speaker Change: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Operator: Thank you. I would now like to turn the call over to Matt Seinsheimer, Senior Vice President of Investor Relations and Corporate Development. Please go ahead.

Speaker Change: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Matt Seinsheimer, Senior Vice President of Investor Relations and Corporate Development. Please go ahead.

Matt Seinsheimer: I would no like to turn the call over to Matt Seinsheimer, Senior Vice President of Investor Relations and Corporate Development. Please go ahead.

Matt Seinsheimer: Thank you, Rachelle.

Doug Pferdehirt: Good morning and good afternoon, and welcome to TechnipFMC's second quarter 2020-44 earnings conference call. Our news release in financial statements issued earlier today can be found on our website. I'd like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current expectations, beliefs and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in one or more of these statements. No material factors that could cause our actual results to differ from our projected results are described in our most recent 10-K, most recent 10-K, in other periodic findings with the U.S.

Matt Seinsheimer: Thank you, Rochelle. Good morning and good afternoon, and welcome to TechnipFMC's second quarter 2024 earnings conference call. Our news release and financial statements issued earlier today can be found on our website.

Speaker Change: I'd like to caution you with respect to any forward-looking statements made during this call.

Speaker Change: Although these four looking statements are based on our current expectations, beliefs, and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements.

Speaker Change: Known material factors that could cause our actual results to differ from our projected results are described in our most recent 10-K, most recent 10-Q, and other periodic filings with the U.S. Securities and Exchange Commission.

Doug Pferdehirt: Securities and Exchange Commission. We wish to caution you not to place undue rewards on any forward-looking statements, which speak only as of the date hereof.

Speaker Change: We wish to caution you not to place undue reliance on any forward-looking statements which speak only as of the date hereof.

Doug Pferdehirt: 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.

Speaker Change: 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.

Matt Seinsheimer: Known material factors that could cause our actual results to differ from our projected results are described in our most recent 10-K, most recent 10-Q, and other periodic filings with the U.S. Securities and Exchange Commission. 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. I will now turn the call over to Doug Pferdehirt, TechnipFMC's Chair and Chief Executive Officer. Thank you, Matt. Good morning and good afternoon.

Douglas J. Pferdehirt: Now we'll now turn the call over to Doug Fertier, TechnipFMC's chair and chief executive officer. Thank you, Matt. Good morning and good afternoon. Thank you for participating in our second quarter earnings call. Our quote-unit results reflect strong operational performance throughout the company. Subsea embalanceS were above 2.8 billion with a book to bill of 1.4. Adjusted EBITDA improves sequentially for both subsea and surface technologies. Results were particularly strong in subsea, where adjusted EBITDA margin improved 370 basis points sequentially to 17.7%, which is a level of performance we expect to continue in the third quarter. With these results, subsea is now trending above the high end of a prior four-year guidance range, and Elf will provide further details on guidance in his prepared remarks.

Douglas J. Pferdehirt: I will now turn the call over to Doug Pferdehirt, TechnipFMC's Chair and Chief Executive Officer.

Douglas J. Pferdehirt: Thank you, Matt. Good morning and good afternoon.

Douglas J. Pferdehirt: Thank you for participating in our second quarter earnings call. Subsidy and bond orders were a robust $2.8 billion with a book-to-bill of $1.4. With these results, Sub-C is now trending above the high end of our prior full year guidance rate, as highlighted in our earnings release earlier today. We now expect the subsea adjusted EBITDA margin to exceed 16.5% in the current year. At our Analysts Day in 2021, we provided a longer-term outlook that included the potential for a 450-basis point improvement in our sub-CE margin over the next four years.

Speaker Change: Thank you for participating in our second quarter earnings call.

Douglas J. Pferdehirt: Our quarterly results reflect strong operational performance throughout the company.

Speaker Change: Subsidy and bond orders were robust, $2.8 billion, with a book-to-bill of $1.4.

Douglas J. Pferdehirt: Adjusted EBITDA improves sequentially for both subsea and surface technologies.

Douglas J. Pferdehirt: Results were particularly strong in sub C.

Douglas J. Pferdehirt: We are adjusting EBITDA margin improved 370 basis points sequentially to 17.7%, which is a level of performance we expect to continue in the third quarter.

Douglas J. Pferdehirt: With these results, Sub-C is now trending above the high end of our prior full year guidance range.

Douglas J. Pferdehirt: and Alf will provide further details on guidance in his prepared remarks.

Doug Pferdehirt: As highlighted in our earnings release earlier today, we now expect subsea-subsea adjusted EBITDA margin to exceed 16.5% in the current year. Let me put that number in context.

Alf: as highlighted in our earnings release earlier today.

Alf: We now expect subsea adjusted EBITDA margin to exceed 16.5% in the current year.

Doug Pferdehirt: And I am a mistake in 2021. We provided a longer-term outlook that included the potential for a 450 basis point improvement in our subsea EBITDA margin over the next four years. Delivering on our updated guidance for 2024, we'll represent an improvement of at least 600 basis points in just three years. The much improved performance, as resulted from the bird steps we took to create a new business model that reshaped the subsea industry, and to deliver innovative technologies such as Subsea 2.0 that further improve project economics. And today, those actions continue to provide sustainable differentiation for TechnipFMC, driving results higher than would could be achieved through a monthly recovery alone.

Alf: Let me put that number in context.

Alf: At our Analyst Day in 2021, we provided a longer-term outlook that included the potential for a 450-basis point improvement in our subsea EBITDA margin over the next four years.

Douglas J. Pferdehirt: Delivering on our updated guidance for 2024 will represent an improvement of at least 600 basis points. The much improved performance has resulted from the bold steps we took to create a new business model that reshaped the subsea industry. Continuing with total company financial highlights for the quarter, revenue was $2.3 billion.

Alf: Delivering on our updated guidance for 2024 will represent an improvement of at least 600 basis points.

Douglas J. Pferdehirt: in just three years.

Douglas J. Pferdehirt: The much improved performance has resulted from the bold steps we took to create a new business model that reshaped the subsea industry and to deliver innovative technologies such as Subsea 2.0 that further improve project economics.

Douglas J. Pferdehirt: And today, those actions continue to provide sustainable differentiation for TechnipFMC, driving results higher than what could be achieved through a market recovery alone.

Doug Pferdehirt: Continuing with total company financial highlights in the quarter, revenue was 2.3 billion. Adjusted EBITDA was 379 million, with an adjusted EBITDA margin of 16.3% when excluding foreign exchange impacts. Total company mbound was 3.1 billion. Subsea orders in the quarter were driven by partner collaboration and long-standing partnerships. Mbound included IEPCI projects for Woodside, ZNA Phase 3, and Energy Hands, Catland Development, both repeat clients of the integrated model. We were also rewarded over 100 kilometers of flexible pike from Petra Brass, which is incremental to the volume associated with our existing frame agreements. Further expansion in Giana also contributed significantly to quarterly mbound with the award of exonmobiles with till project, which will utilize subsea 2.0 systems and manifolds.

Douglas J. Pferdehirt: Continuing with total company financial highlights in the quarter. Revenue was $2.3 billion.

Douglas J. Pferdehirt: Adjusted EBITDA was $379 million with an adjusted EBITDA margin of 16.3% when excluding foreign exchange impacts.

Douglas J. Pferdehirt: Total company inbound was $3.1 billion.

Douglas J. Pferdehirt: Subsea orders in the quarter were driven by partner collaboration and long-standing partnership. Inbound orders included IEPCI projects for Woodside Xena Phase III and Energy Anne's Catlin development, both repeat clients of the integrated model.

Douglas J. Pferdehirt: Subsea orders in the quarter were driven by partner collaboration and long-standing partnerships.

Douglas J. Pferdehirt: Inbound included IEPCI projects for Woodside Xena Phase III and Energy Anne's Catlin development. Both repeat clients of the integrated model.

Douglas J. Pferdehirt: We were also awarded over 100 kilometers of flexible pipe from Petrobras, which is incremental to the volume associated with our existing frame agreement, focusing on the development of partnerships and our people. Based on our delivery track record, ExxonMobil has awarded TechnipFMC the subsea production systems for all six developments. Our success in the region has allowed us to establish a strong reputation for meeting the accelerated schedule requirements of an emerging basin. Importantly, our commitment, collaboration, and innovation have created a winning playbook for local development.

Douglas J. Pferdehirt: We were also awarded over 100 kilometers of flexible pipe from Petrobras, which is incremental to the volume associated with our existing frame agreements.

Doug Pferdehirt: Importantly, Wooddale represents more than just another sizeable project in the period. It is the sixth project sanction in the stable block in just seven years.

Doug Pferdehirt: Given the importance of Giana to TechnipFMC, I would like to share how we established our presence in country, focusing on the development of partnerships and our people. In 2016, before the start of any tendering activity, we partnered with Exonmobiles to demonstrate the value of collaboration and innovation. That's saying here, we began hiring our first class of engineers from the University of Giana and created training programs to support the further development of local employees. We continue to invest in our people, and as of today, approximately 80% of our workforce is local Giana's, with nearly half of management positions held by local talent.

Douglas J. Pferdehirt: Focusing on the development of partnerships and our people.

Douglas J. Pferdehirt: In 2016.

Douglas J. Pferdehirt: Before the start of any tendering activity.

Douglas J. Pferdehirt: We partnered with Exxonmobil to demonstrate the value of collaboration and innovation.

Douglas J. Pferdehirt: That same year, we began hiring our first class of engineers from the University of Guyana and created training programs to support the further development of local employees.

Douglas J. Pferdehirt: We continue to invest in our people and as of today approximately 80% of our workforce is local guianese with nearly half of management positions held by local talent.

Doug Pferdehirt: This team has been highly successful in establishing our business in country, including the completion of our state-of-the-art services facility in Georgetown, which is also staged to support further expansion. We are honored to be the premier supply of subsidy systems in services in Giana. Based on our delivery track record, XR Mobile has a loaded technical infancy, the subsea production systems for all six developments. And we have already delivered more than 100 subsea trees for these projects, with a similar number in our backlog. In addition to these production-related projects, we are also rewarded scope for XR Mobile's gas-to-energy project, which will help the country utilize its natural gas resources for domestic power generation and other industrial uses.

Douglas J. Pferdehirt: This team has been highly successful in establishing our business in country, including the completion of our state of the art services facility in Georgetown.

Douglas J. Pferdehirt: Which is also staged to support further expansion.

Douglas J. Pferdehirt: We are honored to be the premier supplier of subsea systems and services in Guyana.

Speaker Change: Based on our delivery track record Exxonmobil has awarded Technip FMC, the subsea production systems for all six developments.

Douglas J. Pferdehirt: And we have already delivered more than 100 subsea trees for these projects with a similar number in our backlog.

Douglas J. Pferdehirt: In addition to these production related projects. We were also awarded scope for Exxon Mobil's gas to energy projects, which will help the country utilize its natural gas resources for domestic power generation and other industrial uses.

Doug Pferdehirt: Our success in the region has allowed us to establish a strong reputation for meeting the accelerated schedule requirements of an emerging basin. Importantly, our commitment, collaboration, and innovation have created a winning playbook for local development. One, we also exported to Mozambique for the execution of the region's first offshore project, E&I's Coral Salt Development. And we really utilize this very same approach in the emerging basins that follow, with strong potential for countries like Surinam and Namibia. This playbook ever used our know-how and capabilities to support our customers globally and doing so in the right way. For technical infancy, it's not about building capacity and growing headcount.

Douglas J. Pferdehirt: Our success in the region has allowed us to establish a strong reputation for meeting the accelerated schedule requirements of an emerging basin.

Douglas J. Pferdehirt: Importantly, our commitment collaboration and innovation have created a winning playbook for local development.

Douglas J. Pferdehirt: One, we also exported to Mozambique for the execution of the region's first offshore project, ENI's Corral South development. Successes like Kiana have also driven growth in our backlog. At quarter end, total company backlog was $13.9 billion, a record level for TechnipFMC, driven by a book-to-bill above 1 in 10 of the last 11 quarters.

Douglas J. Pferdehirt: We also exported to Mozambique for the execution of the region's first offshore project Eni's Coral South development.

Douglas J. Pferdehirt: And we will utilize this very same approach in the emerging basins that follow with strong potential for countries like Suriname and there may be.

Douglas J. Pferdehirt: This playbook leverages, our know how and capabilities to support our customers globally and doing so in the right way.

Douglas J. Pferdehirt: We're taking deep FMC, it's not about building capacity and growing head count, it's about developing people and creating an advantaged ecosystem that provides growth and opportunities for decades to come.

Doug Pferdehirt: It's about developing people and creating an advanced ecosystem that provides growth and opportunities for decades to come.

Doug Pferdehirt: Successors like Diana have also driven growth in our backlog. A quarter-end total company back long was 13.9 billion, a record level for technical infancy, driven by a book to build above one in 10 of the last 11 quarters. We're well-positioned for subsea orders to approach 10 billion for the year. Also giving us continued confidence in achieving 30 billion in orders over the three-year period ending 2025. And we expect this will drive further growth in back long.

Douglas J. Pferdehirt: Successes like Kiana have also driven growth in our backlog.

Douglas J. Pferdehirt: At quarter end total company backlog was $13 9 billion a record level for Technip FMC driven by a book to Bill above one in 10 of the last 11 quarters.

Douglas J. Pferdehirt: We are well positioned for subsea orders to approach $10 billion for the year, and we expect this will drive further growth and backlog. Client discussions remain focused on project activity that extends beyond 2025, as they look to secure capacity for future phases of their developments towards the end of the decade, which are likely to yield additional inbound orders well beyond the orders we are discussing today.

Douglas J. Pferdehirt: We are well positioned for subsea orders to approach $10 billion for the year.

Douglas J. Pferdehirt: Also giving us continued confidence in achieving 30 billion in orders over the three year period ending 2025.

Douglas J. Pferdehirt: And we expect this will drive further growth in backlog.

Doug Pferdehirt: Finding discussions remain focused on project activity that extends beyond 2025. As a look to secure capacity for future phases of their developments towards the end of the decade. There's also a momentum and new offshore frontiers, which are likely to yield additional inbound well beyond the orders we are discussing today.

Douglas J. Pferdehirt: Finally discussions remain focused on project activity that extends beyond 2025.

Douglas J. Pferdehirt: As they look to secure capacity for future phases of the development towards the end of the decade.

Douglas J. Pferdehirt: There is also a momentum of new offshore frontiers.

Douglas J. Pferdehirt: Which are likely to yield additional inbound well beyond the orders we are discussing today.

Doug Pferdehirt: Moving to surface technologies. Here we also demonstrated solid performance in the period. Despite the sale of measurement solutions in the first quarter, we've experienced sequential growth in both revenue and EBITDA margin. We're seeing tangible benefits from the targeted actions taken to optimize our portfolio in the Americas. And in the Middle East, the growth we anticipated is now occurring, allowing us to further utilize our new in-country capacity. Winch up the river for our staff results; the improved visibility gives us even greater confidence in our ability to deliver on our full-year expectations.

Douglas J. Pferdehirt: Moving to surface technologies.

Douglas J. Pferdehirt: Here we also demonstrated solid performance during the period. Despite the sale of measurement solutions in the first quarter, we experienced sequential growth in both revenue and EBITDA margin. We are seeing tangible benefits from the targeted actions taken to optimize our portfolio in the Americas. And in the Middle East, the growth we anticipated is now occurring, allowing us to further utilize our new in-country capacity when coupled with our first half results. The improved visibility gives us even greater confidence in our ability to deliver on our full-year expectations. The strong financial performance in the period clearly demonstrates the solid momentum we are experiencing in our execution.

Douglas J. Pferdehirt: Here, we also demonstrated solid performance in the period.

Douglas J. Pferdehirt: Despite the sale of measurement solutions in the first quarter, we experienced sequential growth in both revenue and EBIT margin.

Douglas J. Pferdehirt: We are seeing tangible benefits from the targeted actions taken to optimize our portfolio in the Americas.

Douglas J. Pferdehirt: And in the Middle East the growth, we anticipated is now occurring allowing us to further utilize our new in country capacity.

Douglas J. Pferdehirt: When coupled with our first half results the improved visibility gives us even greater confidence in our ability to deliver on our full year expectations.

Doug Pferdehirt: In closing, I'm extremely pleased with our second quarter results. The strong financial performance in the period clearly demonstrates the momentum we are experiencing in our execution. But more importantly, this success reflects the bird steps we have taken that provide us with unique market visibility, improved commercial success, and enhanced operational insight. Other, which we expect will drive higher and more, has also led to the recent achievement of a second investment grade rating, and this serves as further confirmation of our financial strength. And these factors, when combined with the proven success of our playbook, will allow us to capitalize on the expanding opportunities that extend beyond the decade.

Douglas J. Pferdehirt: In closing.

Douglas J. Pferdehirt: I am extremely pleased with our second quarter results.

Douglas J. Pferdehirt: The strong financial performance in the period clearly demonstrates the solid momentum we are experiencing in our execution.

Douglas J. Pferdehirt: But more importantly, this success reflects the bold steps, we have taken that provide us with unique market visibility improved commercial success and enhanced operational insight.

Douglas J. Pferdehirt: All of which we expect will drive higher and more sustainable returns for our company.

Douglas J. Pferdehirt: The steady improvement in our results has also led to the recent achievement of a second investment grade rating.

Douglas J. Pferdehirt: This serves as further confirmation of our financial strength, and these factors, when combined with the proven success of our playbook, will allow us to capitalize on the expanding opportunities that extend beyond the decade. I will now turn the call over to Alf to discuss the financial results and the favorable impacts on our 2024 outlook. Thanks, Doug. Inbound in the quarter was $3.1 billion, driven by $2.8 billion of subsea orders. Total company backlog increased sequentially to $13.9 billion.

Douglas J. Pferdehirt: And this serves as further confirmation of our financial strength.

Douglas J. Pferdehirt: And these factors when combined with the proven success of our playbook will allow us to capitalize on the expanding opportunities that extend beyond the decade.

Elf Melin: And when I'll turn the call over to Elf to discuss the financial results and the favorable impact to our 2024 outlook. Thanks, Doug. Inbound in the quarter was 3.1 billion, driven by 2.8 billion of subsea orders. So the company backlog increased sequentially to 13.9 billion. Revenue in the quarter was $2.3 billion.

Speaker Change: I will now turn the call over to <unk> to discuss the financial results and the favorable impacts to our 2020 for outlook.

<unk>: Thanks, Doug.

<unk>: Inbound in the quarter was $3 1 billion driven by $2 $8 billion of subsea orders total company backlog increased sequentially to $13 9 billion.

Speaker Change: Revenue in the quarter was $2 3 billion EBIT.

Elf Melin: Even though was 3.79 million, we're excluding a four mixed change loss of 18 million and restructuring impairment than other charges totaling 2 million. Done to submit them segment results in subsea revenue 2 billion increased 16% versus the first quarter. This sequential improvement was largely driven by increased IEPCI project activity in the North Sea and Gulf of Mexico. So this is revenue also increased primarily due to seasonal improvement. The adjusted unit that was 3057 million will emerge of 17.7% up 370 basis points from the first quarter. The sequential increase was due to strong execution, improved earnings mixed from backlog and higher project and services activity.

<unk>: EBITDA was $379 million when excluding a foreign exchange loss of $18 million and restructuring impairment and other charges totaling $2 million.

Alf T. Melin: Turning to segment results, in sub-C, revenue of $2 billion increased 16% versus the first quarter; services revenue also increased, primarily due to seasonal improvements. The sequential increase was due to strong execution, improved earnings mix from backlog, and higher project and services activity. In surface technologies, revenue was $316 million, an increase of 3% sequentially. The revenue improvement was primarily driven by increased activity in the Middle East, largely offset by the absence of revenue from the measurement solutions business disposed of in March.

<unk>: Turning to segment the segment results in subsea revenue $2 billion increased 16% versus the first quarter the.

Speaker Change: The sequential improvement was largely driven by increased <unk> project activity in the North Sea and Gulf of Mexico.

<unk>: Services revenue also increased primarily due to seasonal improvement.

<unk>: Adjusted EBITDA was $357 million with a margin of 17, 7% up 370 basis points from the first quarter.

<unk>: The sequential increase was due to strong execution improved earnings mix from backlog and higher project and services activity.

Elf Melin: In service technologies, revenue was 316 million and increase of 3% sequentially. The revenue improvement was primarily driven by increased activity in the Middle East.

<unk>: In surface technologies revenue was $360 million, an increase of 3% sequentially.

<unk>: The revenue improvement was primarily driven by increased activity in the middle East.

Elf Melin: Logically, offset by the absence of revenue from the measurement solutions based on this post of in March. Adjusted EBITDA was $46 million, up 11% versus the first quarter. The improvement was driven by increased volume in the Middle East, largely offset by the absence of measurement solutions. Adjusted EBITDA margin was 14.5%, up 100 basis points versus the first quarter.

<unk>: Largely offset by the absence of revenue from our measurement solutions business disposed of in March.

Alf T. Melin: Adjusted EBITDA was $46 million, up 11% versus the first quarter. The improvement was driven by increased volume in the Middle East, largely caused by the absence of measurement solutions. Adjusted EBITDA margin was 14.5%, up 100 basis points versus the first quarter. Turning to corporate and other items in the period, corporate expense was $24 million, net interest expense was $21 million, and tax expense in the quarter was $59 million. Cash flow from operating activities was $231 million.

<unk>: Adjusted EBITDA was $46 million up 11% versus the first quarter.

<unk>: <unk> driven by increased volume in the middle East largely offset by the absence of measurement solutions.

<unk>: Adjusted EBITDA margin was 14, 5% up 100 basis points versus the first quarter.

Elf Melin: Done to corporate and other items in the period. Corporate expense was 24 million. Net interest expense was 21 million, and tax expense in the last quarter was 59 million. Cashflow from operating activities was 231 million, that the expenditures were 51 million. This resulted in free cashflow of 180 million in the quarter. For the shareholder distributions in the quarter were 122 million, including 100 million share repurchases. This brings year-to-date distributions to 293 million, nearly a 20% increase versus all of last year. We ended the period with cash and cash equivalence of 708 million, met debt declined sequentially to 260 million.

<unk>: Turning to corporate and other items in the period.

<unk>: <unk> expense was $24 million net interest expense was $21 million and tax expense in the quarter was $59 million.

<unk>: Cash flow from operating activities was $231 million capital expenditures were $51 million.

Alf T. Melin: Capital expenditures were $51 million, and this resulted in free cash flow of $180 million in the quarter. Total shareholder distributions in the quarter were $122 million, including $100 million of share repurchase. This brings year-to-date distributions to $293 million, nearly a 20% increase versus all of last year. We end the period with cash and cash equivalents of $708 million, and net debt declined sequentially to $260 million, with an investment-grade rating from two agencies.

<unk>: This resulted in free cash flow of $180 million in the quarter.

<unk>: Total shareholder distributions in the quarter were $122 million, including 100 million of share repurchases.

<unk>: This brings year to date distributions to $293 million.

<unk>: A 20% increase versus all of last year.

<unk>: We ended the period with cash and cash equivalents of $708 million.

<unk>: Net debt declined sequentially to $260 million.

Elf Melin: In June, we received an investment rate rating of Triple B minus from Fitch. This announcement follows a ratings upgrade to investment grade from S&P in early March. We did investment grade rating from two agencies, the company will now benefit from lower interest rates and fees, and the elimination of all collateral requirements for both our 1.25 billion revolving credit facility and 500 million letter of credit facility. Importantly, we now have access to the lower cost investment grade bond market for any future term debt needs.

<unk>: In June we received an investment grade rating.

<unk>: Triple B minus from Fitch.

<unk>: This announcement follows a ratings upgrade to investment grade from S&P in early March.

<unk>: We had investment grade rating from two agencies. The company will now benefit from lower interest rates and fees and the elimination of all collateral requirements for both our 125 billion revolving credit facility and $500 million lateral credit facility.

Alf T. Melin: The company will now benefit from lower interest rates and fees and the elimination of all collateral requirements for both our $1.25 billion revolving credit facility and $500 million lateral credit facility. For the full year outlook, we are providing several updates to our guidance. Sub-zero revenue is now guided in the range of $7.6 to $7.8 billion, with an adjusted EBITDA margin in the range of 16.5 to 17%, which includes the PNF payments, approximating $170 million.

<unk>: Importantly, we now have access to the lower cost investment grade bond market for any future term debt needs.

Elf Melin: Moving to our guidance, for the third quarter, we expect revenue and adjusted EBITDA margin for both subsea and surface technologies to be in line with the second quarter. For the third year outlook, we are providing several updates to our guidance. In subsea, we are increasing our guidance range for both revenue and adjusted EBITDA margin. Subsea revenue is now guided in the range of 7.6 to 7.8 billion, with adjusted EBITDA margin in the range of 16.5 to 17%. In surface technologies, we continue to expect revenue at the midpoint of the existing guidance range, and we now expect adjusted EBITDA margin to be in the upper half of the range.

<unk>: Moving to our guidance for the third quarter, we expect revenue and adjusted EBITDA margin for both subsea and surface technologies to be in line with the second quarter.

<unk>: For the full year outlook, we are providing several updates to our guidance.

<unk>: In subsea, we are increasing our guidance range for both revenue and adjusted EBITDA margin.

<unk>: Subsea revenue is now guided in the range of $7 six to $7 8 billion with adjusted EBITDA margin in a range of 16, 5% to 17%.

<unk>: In surface technologies, we continue to expect revenue at the mid point of the existing guidance range and we now expect adjusted EBITDA margin to be in the upper half of the range.

Elf Melin: When these items are taken together, we now anticipate total company for a year adjusted EBITDA to be approximately 1.35 billion while excluding for an exchange. Given this higher level of financial performance, we are also increasing our guidance range for free cash flow to now be in a range of 425 to 575 million. Which includes the P&F payments approximating 170 million.

<unk>: These items are taken together, we now anticipate total company full year adjusted EBITDA to be approximately 135 billion when excluding foreign exchange.

<unk>: Given this higher level of financial performance. We are also increasing our guidance range for free cash flow to now be in a range of $425 million to $575 million.

<unk>: Which includes the P&I payments approximating $170 million.

Elf Melin: Importantly, we fulfilled this obligation with a final payment made in early July.

<unk>: Importantly, we fulfilled this obligation with a final payment made in early July.

Elf Melin: Let me now address our outlook for subsea in 2025. We do expect to exceed our guidance calling for subsea revenue of 8 billion and adjusted EBITDA margin of 18%. We will update our 2025 view for both metrics with our third quarter results in October.

Speaker Change: Let me now address our outlook for subsea in 2025.

<unk>: We do expect to exceed our guidance, calling for subsea revenue of <unk> 8 billion and adjusted EBITDA margin of 18%.

<unk>: We will update our 2025 view for both metrics with our third quarter results in October.

Operator: And in keeping with prior practice, we will provide the remainder of our 2025 financial guidance with our fourth-quarter earnings, which is the highest level achieved since the formation of TechnipFMC. And the expected increase in our free cash flow generation further supports our outlook for at least a 70% increase in shareholder distributions versus the prior year, while still allowing for a further reduction in net debt. Operator, you may now open the line for questions.

Elf Melin: And in keeping with prior practice, we will provide the remainder of our 2022-25 financial guidance with our fourth quarter earnings. In closing, our strong execution was particularly notable in the quarter, and this should serve us well given the continuing growth in backlog to 13.9 billion, which is the highest level achieved since the formation of TechnipFMC. The increase in our four-year estimate for adjusted to 1.35 billion equates to an nearly 45% increase over the prior year, when excluding the impact of our exchange. And the expected increase in our free cash regeneration for the support, our outlook for at least a 70% increase in shareholder distributions versus the prior year, while still allowing for further reduction in net debt.

<unk>: And in keeping with prior practice, we will provide the remainder of our 2025 financial guidance, we look fourth quarter earnings.

<unk>: In closing.

<unk>: Our strong execution was particularly notable in the quarter and this should serve us well given the continued growth in backlog to $13 9 billion.

<unk>: Which is the highest level achieved since the formation of Technip FMC.

Operator: Operator, you may now open the line for questions. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, press star one on your telephone keypad to raise your hand and join in. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

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David Anderson: Your first question comes from David Anderson of Barclays; your line is now open. Okay, thanks.

Operator: We do request that you please limit your question to one question and one follow-up. Your first question comes from David Anderson of Barclays. Your line is now open. Oh, great. Thanks, Doug. Good morning, Doug. How are you?

Speaker Change: Your first question comes from David Anderson.

Speaker Change: Of Barclays. Your line is now open.

John Anderson: Great. Thanks, Good morning, Doug how are you.

David Anderson: Good morning, Doug. How are you? Great, David, you're safe. Well, I'm well. So, steady stream of announcements and FIDs going on during the quarter. Clearly, you're very confident in the 30 billion in order for the 2025 target with Giana and Brazil at the core. But I want to ask you about the sustainability that is marked beyond that. You touched on that a little bit. But I'm just kind of curious how you see subsea of all the beyond just kind of what you can see in front of you. You mentioned new frontiers, Namibia, Sarnam, maybe kind of what other patients are you going to implement next slide?

Douglas J. Pferdehirt: Great, Dave. And you're safe? I'm well. I'm OK.

Doug: Great Damon yourself.

Speaker Change: Well I'm well so.

Douglas J. Pferdehirt: Steady stream of announcements and FIDs going on during the quarter. Clearly, you're very confident in the $30 billion in orders for the 2025 target, with Guyana and Brazil at the core. But I want to ask you about the sustainability of this market beyond that. You touched on that a little bit, but I'm just kind of curious how you see Sub-Z evolving beyond just kind of what you can see. You mentioned new frontiers, Namibia, Suriname, maybe kind of, what are their basins? Are you looking for that next slide? Is it the Gulf of Mexico, the Mediterranean, or something else?

Speaker Change: Steady stream of announcements.

Speaker Change: <unk> going on during the quarter, clearly youre very confident in the $30 billion in orders, but for the 2025 targeting with Guyana and Brazil at the core but I wanted to ask you about the sustainability of this market beyond that and you touched on that a little bit, but I'm just kind of curious how you see subsea evolving beyond just kind of what you can see in front of you you mentioned <unk>.

Speaker Change: Interiors, Namibia, Suriname, maybe kind of what other basins are you I meant that's lagged the Gulf of Mexico, Mediterranean something else and kind of related to that where do you see electric trees and kind of electrifying the subsea.

Doug Pferdehirt: Is it going to go to Mexico, Mediterranean, southern Elton? Kind of related to that. Where do you see electric trees and kind of electrified and subsea sitting in that? And creating new opportunities for you, certain markets, some additional applications that are best suited for electric. So, this sort of thinking beyond kind of how long this market can kind of go on for you in terms of subsea. Thank you.

Speaker Change: Fitting in that and creating new opportunities for you either certain markets maybe certain applications.

Speaker Change: Best suited for electric so just sort of thinking beyond.

Speaker Change: Kind of how long this market can kind of go on for you in terms of the subsea.

Douglas J. Pferdehirt: And kind of related to that, where do you see electric trees and kind of electrifying the subsea fitting in with that and creating new opportunities for you? Are there certain markets or maybe certain applications that are best suited for electric? So just sort of thinking beyond, um, kind of, how long this market will go on for. Thank you, Dave. Let me kind of walk you through a few growth opportunities in the subsea market as we see them playing out.

Speaker Change: Thank you Dave.

Doug Pferdehirt: Let me kind of walk through a few growth opportunities in the subsea market as we see them playing out. You have the new horizons within the existing basins. So, you know, last quarter we talked about the paleo gene and the strength of the paleo gene not only in our current quarters but potentially in upcoming orders as well. And, you know, you'll see that more and more where, within an existing basin, operators will look for other opportunities, other horizons, other reservoirs to develop in this case. You know, a great example that is the paleo gene in the Gulf of Mexico, which continues to be quite, quite attractive.

Speaker Change: Let me kind of walk through a few growth opportunities in the subsea market.

Speaker Change: We see them playing out you have the new horizons within the existing basins.

Douglas J. Pferdehirt: You have new horizons within the existing basins. So, you know, last quarter we talked about the Paleogene and the strength of the Paleogene, not only in our current orders but potentially in upcoming orders as well. And, you know, you'll see that more and more where within an existing basin, operators will look for other opportunities, other horizons, other reservoirs to develop. And in this case, a great example of that is the Paleogene in the Gulf of Mexico, which continues to be quite attractive.

Speaker Change: So last quarter, we talked about the Paleogene and the strength of the Paleogene not only in our current orders, but potentially an upcoming orders as well.

Douglas J. Pferdehirt: We have growth opportunities within existing basins, but, you know, relatively new to the mix, and, you know, Guyana is obviously the leading example of that, but also Mozambique. There's been a successful project completed in Mozambique, and we would anticipate additional activity in Mozambique, and as that unlocks, I think Mozambique could surprise to the upside in terms of activity. And then you get into the emerging basins and now realize you're now getting towards 2028 and beyond. And this is kind of what keeps the durability of the cycle.

Doug Pferdehirt: On the second area, is really as you start to look at Great.

Douglas J. Pferdehirt: And that's when you start, you know, I should have added Suriname to the second bucket. It's likely to come a bit earlier than the others, but also a very prolific opportunity. And then you start to look at the other basins, and that's where you, you know, obviously Namibia is one everyone's talking about, South Africa, Tanzania, Colombia, Mexico, you know, the Eastern Mediterranean.

Douglas J. Pferdehirt: There's a lot of activity out there and a lot of gas-focused activity out there that will likely continue to occur towards the latter part of the decade and into the beginning of the next decade. Lots of activity, lots of durability of the cycle, largely enabled by improved project economics; we support that through our IEPCI and subsea 2.0 offering by accelerating the time to first oil and significantly de-risking the execution. That's the customer's primary focus today.

Speaker Change: We continue to occur towards the latter part of the decade and into the beginning of the next decade. So.

Speaker Change: Lots of activity lots of durability of the cycle largely enabled by improved project economics, we support that through our <unk> and subsea two <unk> offering by accelerating the time to first oil and significantly de risking the execution. That's the customer's primary focus today, let's say.

Douglas J. Pferdehirt: Let's say, you know, most are opportunity rich; certainly, the offshore space is opportunity rich today. So what they're really looking for is to partner and collaborate with companies that they are confident in, that they can deliver on schedule to ensure that the project economics remain very favorable. I'm humbled to say our track record there has been exceptional, which has led to 70% of our business being directly awarded, but also multiple direct, multiple repeat orders from existing clients on both the IEPCI and the 2.0. The all-electric, as you mentioned, is also extremely exciting. You've actually seen two awards now.

Speaker Change: Most of our opportunity rich certainly the offshore space is opportunity rich today, so what they're really looking for is to partner and collaborate with with companies that they are confident in the that they can deliver per schedule to ensure that the project economics remain very favorable.

Speaker Change: I'm humbled to say our track record there has been exceptional which has led to a 70% of our business being direct awarded but also multiple direct mulch.

Speaker Change: Multiple repeat orders from existing clients on both the <unk> and the two point.

Speaker Change: Our electric as you mentioned is also extremely exciting you've actually seen two awards now we announced the first award in the first quarter and there was an award also announced here this quarter as well both are great. Examples of how all electric will create additional opportunities.

Douglas J. Pferdehirt: We announced the first award in the first quarter, and there was another award also announced here this quarter as well. Both are great examples of how all-electric will create additional opportunities. The first is in the CCS market, and we believe that will be the primary market for the all-electric subsea system. The reason why is just the long, extended reach that's required. The project that we're excited to be working on is the VP Northern Endurance Partnership project, where the gas will be sequestered from the emitter onshore, and we'll be taking that 145 kilometers offshore and storing it permanently and safely for the future. To be able to achieve a 145-kilometer distance could only be done with an all-electric system.

Speaker Change: First is in the Ccs market, we believe that will be the primary market.

Speaker Change: Sure.

Speaker Change: All electric subsea system and the reason why he is just a long extended reach that's required. So the project work that we're excited to be working on is the BP Northern endurance partnership project.

Douglas J. Pferdehirt: In the oil and gas market, the primary market will be brownfield tiebacks. This will be the same idea that you can go a bit further with electric controls than you can with hydraulic controls, a greater distance, if you will. And we approximate that to be about four times the distance that you can go with hydraulic controls. So if you look around the world today, most of the oil and gas production facilities are only operating at about 60 to 70 percent of nameplate capacity.

Douglas J. Pferdehirt: That's not unusual. That's because reservoirs decline over time. So they're designed for initial production, which is the highest level, and then it declines over time. By being able to expand, if you will, the radius by four times around those host facilities with an all-electric brownfield or tieback solution, we'll be able to tie back stranded reservoirs that would otherwise be stranded. We'll be able to tie those back to these existing host facilities, which will have very attractive economics as well.

Douglas J. Pferdehirt: So very excited about the future, both in terms of new energy as well as in terms of conventional energy in the offshore market. Great. Thanks for that, Doug. Maybe we can kind of shift over to the surface side. You mentioned the Middle East a couple of times in the release.

David Anderson: Thanks for that, Doug. Maybe I can kind of shift over to on the surface side.

Doug Pferdehirt: You mentioned Middle East a couple of times in the Middle East. You don't; I believe you have a new facility that's in country. What, as the Middle East is, the opportunity to set mostly in Saudi as we're seeing kind of some of the unconventional gas-based and build out. And I guess, secondarily, is there opportunity, from this facility, can you export to other regions?

Douglas J. Pferdehirt: You built, I believe you have a new facility that's in-country. It was, as the Middle East is, the opportunity set mostly in Saudi Arabia, as we're seeing kind of some of the unconventional gas basins filled out. And I guess secondarily, is there an opportunity from this facility, can you export to other regions in the Middle East? What's the strategy overall as you look at the Middle East?

Speaker Change: From this facility can you export to other regions in the Middle East is what's the strategy overall as you look at Middle East.

Doug Pferdehirt: And then Middle East, what's the strategy overall, as you look at Middle East with your circumstances over the next couple of years? Thanks, Dave. I'm timely question.

Speaker Change: Over the next couple of years.

Douglas J. Pferdehirt: Thanks, Dave. A timely question. I just returned from Saudi Arabia.

Dave: Thanks, Dave time timely question I, just returned from Saudi Arabia. So.

Doug Pferdehirt: I just returned from Saudi Arabia. So, first part of your question, though, it's not just Saudi Arabia. Just as importantly for us is the UAE, and the activity level is fairly similar between the UAE as well as within the Kingdom. And also, it's a car. It's hard. There's a lot of activity. Although these are offshore platforms, they're dry trees. The trees are on top of the platform. So, you know, technically it's offshore, but again, because if you dry tree, it doesn't go under the water. We, that's part of our surface business line. But for us, certainly, Saudi and UAE are really, really important.

Speaker Change: No.

Douglas J. Pferdehirt: So, the first part of your question, no, it's not just Saudi Arabia. Just as important for us is the UAE, and the activity level is fairly similar between the UAE as well as within the kingdom. And also Qatar. Qatar, there's a lot of activity. Although these are offshore platforms, they're dry trees. The trees are on top of the platform.

Speaker Change: So the first part of your question no it's not just.

Speaker Change: Saudi Arabia, just as importantly for US is the UAE and the activity level is fairly similar between the UAE as well as within the Kingdom.

Speaker Change: And also a sitar Qatar or there is a lot of activity. Although these are offshore platforms their dry trees. The trees are on top of the platform. So technically its offer but again because it's to dry tree. It doesn't go under the water.

Douglas J. Pferdehirt: So, you know, technically it's offshore, but again, because it's a dry tree, it doesn't go under the water. That's part of our surface business line. But for us, certainly Saudi Arabia and the UAE are really, really important. We have local facilities in both. Both are ramping up as we speak, which is why we're beginning to see the real benefit and the strength of that. And I can just say, following my visit here, in real time, the opportunity set is significant for the surface business. And we're really beginning to see and get the payback on the investment that we've made. Great. Thank you, Dr.

Speaker Change: That's part of our surface.

Speaker Change: This business line, but for US certainly Saudi and the UAE are really really important we have local facilities in both both are ramping up as we speak which is why we're beginning to see the real benefit and the strength of that and I can just say following my visit here just real time.

Doug Pferdehirt: We have local facilities in both. Both are ramping up as we speak, which is why we're beginning to see the real benefit and the strength of that. And I can just say, following my, you know, visit here just, you know, real time. The opportunity set is significant for the surface business, and we're really beginning to see and get the payback on the investment that we've made. Thank you, Doug.

Speaker Change: The opportunity set is significant for the surface business and were really beginning to see and get the payback on the investment that we've made.

Speaker Change: Okay, great. Thank you Doug.

Arun Dyeram: Your next question comes from Arun Dyeram from JP Morgan; your line is open. Good morning, gentlemen.

Douglas J. Pferdehirt: Your next question comes from Arun Jayaram from J.P. Morgan. Your line is open. Good morning, gentlemen. My first question is wondering if you could go through the guidance raised in 2024 on the subsea side, and I would love to better understand what drove the $300 million increase in revenue and, more importantly, just the drivers of the EBITDA margin raise between maybe pricing, better cycle times, better mix. I would love to get more specific. Sure, Arun, this is Alf here. I'll start.

Speaker Change: Your next question comes from Ireland diagram from JP Morgan Your line is open.

Ireland diagram: Good morning, gentlemen, My first question I was wondering if you could go through the drivers of the.

Elf Melin: My first question is wondering if you could go through the drivers of the guidance race in 2024 on the subsea side. Would love to better understand what drove the 300 million or increase in the revenue. And more importantly, just the drivers of the EBTA margin margin race between maybe pricing better, cycle times better, mix. I'd love to get more specifics around that.

Ireland diagram: The guidance raise.

Speaker Change: 2024 on the subsea side.

Ireland diagram: Would love to better understand what drove that.

Speaker Change: The $300 million increase in the <unk>.

Elf Melin: Sure, Arun, this is Alpair. I'll start. So first of all, very keen for the quarter. Sequentially subsea revenue up 16%, and not only from seats and all factors, but also from very strong operational performance. If you look at the revenue increase, the majority of the revenue increases really due to our IPCI revenue coming through, in particular in more seeing the open Mexico. And when you consider that, this has really asked demonstrating our ability to convert this higher quality backlog that we've been talking about. And really realizing the financial benefits that also includes the fact that we are growing for shorter cycle times.

Alf T. Melin: So first of all, very pleased with the quarter. Sequentially, subsea revenue was up 16% and not only from seasonal factors but also from very strong operational performance. If you look at the revenue increase, the majority of the revenue increase is really due to our IEPCI revenue coming through, in particular in the North Sea and Gulf of Mexico. And when you consider that, this is really us demonstrating our ability to convert this higher quality backlog that we've been talking about.

Alf T. Melin: And really realizing the financial benefits that also include the fact that we are going for shorter cycle times in our operating model, meaning we are demonstrating our ability to convert to revenue at a faster pace as well. Then you look at kind of the 370 basis points sequentially up, again, it's just a pull-through from these improved efficiencies, as well as subsea services businesses continue to be solidly strong. All in all, when you look at the race, it's a strong first half performance, demonstrating to ourselves what we are able to do.

Elf Melin: And that, you know, in our operating model and meaning, we are demonstrating our ability to convert to revenue at a faster pace as well. Then, if you look kind of the 307 basis points sequentially up, again, it's just a pull through from this, these improved efficiencies, as well as subsea services business that continue to be solidly strong. So all in all, when you, when you look at the race, it's the first half strong performance demonstrating to ourselves what we are able to do. And then we continue to have a favorable outlook. And that's, again, why we are raising our guidance to the ranges I gave of 7.6 billion to 7.8 billion for revenue and the 60 and a half to 17% for the EBITDA margin.

Douglas J. Pferdehirt: And then we continue to have a favorable outlook. And that's why we are raising our guidance to the ranges I gave of $7.6 billion to $7.8 billion for revenue and 16.5% to 17% for the EBITDA margin. Great, thanks a lot. Follow-up question, Doug, you elaborated in your prepared remarks on the successful formula that you've put together in Guyana with Whiptail now, the sixth award, and Hammerhead still on your project list. I was wondering if you could maybe elaborate on this formula as you think about Suriname, Namibia, and Mozambique.

Arun Dyeram: Great, thanks a lot.

Doug Pferdehirt: Follow up, question, Doug, you elaborated in your prepared remarks on the successful formula that you've put together in Guyana with Whiptail now, the sixth award in Hammerhead, still on your project list. I was wondering if you could maybe elaborate on, you know, the formula, this formula, as you think about Suriname, Namibian, and Mozambique. Interested to hear comments that in a lot of cases not just the technical specs that you meet, but some of the ecosystem that you build, some of the local content. So I was wondering to see if you could elaborate on some of these softer but important elements that you take on to secure, you know, project awards.

Douglas J. Pferdehirt: I was interested to hear comments that, in a lot of cases, not just the technical. I was wondering if you could elaborate on some of these softer but important elements that you take on to secure project awards. Thank you, Arun, and thanks for the question. I emphasized it in the script because it's who we are as a company. Again, this isn't about assets or equipment or vessels or people or headcount. This is about the development of talent, giving people an opportunity to improve their lives, to improve the economic well-being of their families, as well as giving them the training so that they can be running operations and taking responsibility in the countries in which we operate. Guillaume is just a phenomenal example of that.

Speaker Change: <unk> local content. So I was wondering to two two.

Speaker Change: To see if you could elaborate on some of these softer but important elements that you would take on to secure project Awards.

Doug Pferdehirt: Thank you, Arun. And thanks for the question. You know, I emphasized it in the script because it's who we are as a company. You know, again, this isn't about assets or, you know, equipment or vessels or people, you know, headcount. You know, this is about the development of talent, giving people an opportunity to improve their lives, to improve the economic well-being of their families, as well as giving them the training and the development so that they can be running operations and taking responsibility in the countries in which we operate. And, you know, Guyana's just a phenomenal example of that.

Speaker Change: Thank you Arun.

Arun: Thanks for the question.

Speaker Change: I emphasized it in the script, because it's who we are as a company.

Speaker Change: Again, this isn't about assets or equipment or vessels are people.

Speaker Change: Head Count this is about the development of talent, giving people an opportunity.

Speaker Change: To improve their lives to improve the economic well being of their families.

Speaker Change: As well as giving them the training and the development so that they can be.

Speaker Change: Running operations and taking responsibility in the countries in which we operate in Guyana is just a phenomenal example of that as I indicated we were hiring at the University.

Doug Pferdehirt: As I indicated, we were hiring at the university before there was any tender. Was that, was there a risk associated with that? Of course, there was. Well, when you were taking the gaming talent and training them in the Gulf of Mexico on excellent mobile projects or in Brazil, on another on a subsea project so that they would have a proper training, so that when the activity started, we weren't just doing it with, you know, ferrex bad crews and, more importantly, by the time activity really began, we were able to put 100% in these crews, led by the Indian managers offshore.

Douglas J. Pferdehirt: As I indicated, we were hiring at the university before there was any tender. Was there a risk associated with that? Of course, there was. But we were taking Guyanese talent and training them in the Gulf of Mexico on Exxon Mobil projects or in Brazil on other subsea projects so that they would have the proper training so that when the activity started, we weren't just doing it with full expat crews. And more importantly, by the time activity really began, we were able to put 100% Guyanese crews, led by Guyanese managers, offshore.

Speaker Change: Before there was any tender was that it was a risk associated with that of course, there was but we were taking the gain these talent and training them in the Gulf of Mexico on Exxon Mobil projects or in Brazil.

Speaker Change: On other subsea projects are that they would have the proper training so that when the activity started we were just doing it with full expat crews and more importantly by the time activity really began we were able to put a 100% given these crews led by <unk> managers.

Douglas J. Pferdehirt: The ecosystem you brought up, which I appreciate, is also about working with academia in these countries at all levels, as well as the supply chain. Developing a supply chain that is, in many cases, exclusive to our company now within these countries provides us with the support that we need to be successful. All of this benefits the countries in which we operate, and not just for the duration of the projects, but again, trying to create a sustainable advantage for the future. Quite frankly, that's what drives me.

Speaker Change: Offshore.

Doug Pferdehirt: The ecosystem we talked to, you know, you brought up, which I appreciate, you know, is also about working with academia in these countries at all levels. As one of the supply chain, developing a supply chain that is in many cases exclusive to our company now, within these countries providing us the support that we need to be successful. All of us obviously benefits the countries in which we operate and not just for the duration of the projects, but again, trying to create a sustainable advantage for the future. You know, quite frankly, that's what drives me; that's what gets me excited about moving into these emerging basins.

Speaker Change: The ecosystem, we talked to you you brought up which I appreciate.

Speaker Change: It is also about working with academia in these countries.

Speaker Change: <unk> levels.

Speaker Change: As well as the supply chain developing a supply chain that is in many cases exclusive to our company now within these countries providing us the support that we need to be successful all of this obviously benefits the countries in which we operate and not just for the duration of the projects, but again trying to create a sustainable way.

Speaker Change: Advantage for the future quite frankly, that's what drives me. That's what gets me excited about moving into these emerging basins sure Theres revenue and there's profit opportunities, we all understand that but what's more important is what we leave behind.

Douglas J. Pferdehirt: That's what gets me excited about moving into these emerging basins. Sure, there's revenue, and there's profit opportunities. We all understand that.

Doug Pferdehirt: Sure, there's revenue, and there's profit opportunities. We all understand that, but it's more important is what we leave behind.

Douglas J. Pferdehirt: But what's more important is what we leave behind. Thanks a lot, Doug. Your next question comes from the line of Luke Lemoine from Piper Sandler. Your line is now open.

Arun Jayaram: Thanks a lot, Doug.

Speaker Change: Thanks, a lot.

Speaker Change: Yeah.

Luke Lemoine: Your next question comes from the line of Luke Limoin from Piper, Chandler. Your line is now open. Hey, good morning. Doug, your morning vision a little bit at a morning. I'll test it a little bit with the 25 such margins expected to exceed the 18%. You've previously discussed some of the additional drivers in the coming year.

Speaker Change: Your next question comes from the line of Luke Lemoine from Piper Sandler Your line is now open.

Douglas J. Pferdehirt: Hey, good morning. Doug, Alf touched on it a little bit with the 25 CC margins expected to exceed 18%. You've previously discussed some of the additional drivers in the coming years. But could you talk about where?

Luke Lemoine: Hey, good morning.

Luke Lemoine: Doug Good morning, listen on a little bit any morning, I'll touch on a little bit with the 25% margins is expected to exceed the 18%.

Speaker Change: You've previously discussed some of the additional drivers in the coming years.

Doug Pferdehirt: But could you talk about where the 2.0 line utilization is, and this might be tough without quantifying, maybe fraying on increasing production, and utilization through the line, you know, helps for health margins further. Sure, thanks, Luke. This is a lot of what we're experiencing right now, and realize we're still in the very early phases of realizing the benefits of not only the 2.0 configured order, but the overall change is in the operating model of the company, including our focus on SSI, sustainability, industrialization and standardization. And what we're seeing and experiencing now is the result of that, and as we see more 2.0 2.0 orders being inbounded, and then ultimately flowing through the facilities, we expect to see continue to grow. If you really, even greater benefit than we're seeing today, which, you know, I've alluded to the quality of the projects in really beginning to see the results of those in the operation or performance and raising the guidance.

Speaker Change: But could you talk about where.

Douglas J. Pferdehirt: 2.0 line utilization is, and this might be tough without quantifying, maybe framing how increasing production and utilization through the line, you know, helps Pelmar. Sure. Thanks, Luke.

Speaker Change: <unk> two point of line utilization is.

Speaker Change: And this might be tough without quantifying maybe frame how increasing production.

Speaker Change: And utilization through the line helps propel margins further.

Douglas J. Pferdehirt: This is a lot of what we're experiencing right now, and we realize we're still in the very early phases of realizing the benefits of not only the 2.0 Configure-to-Order but the overall changes in the operating model of the company, including our focus on SSI, sustainability, industrialization, and standardization. And what we're seeing and experiencing now is the result of that. And as we see more 2.0 orders being inbound and then ultimately floating through the facilities, we expect to see continued, or, if you will, even greater benefit than we're seeing today, which, you know, Al alluded to, the quality of the projects and really beginning to see the results of those in the operational performance, hence raising the guidance.

Speaker Change: Sure. Thanks Lou.

Speaker Change: This is a lot of what we're experiencing right now and realize we're still in the very early phases of.

Speaker Change: Realizing the benefits of not only the two point or configure to order.

Speaker Change: The overall changes in the operating model of the company, including our focus on.

Speaker Change: Ssi sustainability.

Speaker Change: Industrialization and standardization and what we're seeing and experiencing now as the result of that.

Speaker Change: As we see more of a two two point of rotors being Inbounded and then ultimately floating through the facilities. We expect to see continued or if you will even greater benefit than we're seeing today, which.

Speaker Change: Alluded to the quality of the projects and really beginning to see the results of those and the operational performance and hence are raising the guidance.

Douglas J. Pferdehirt: But if we just look at 2.0 alone, we could also look at IEPCI, by the way, because it's just as important, or you could look at IEPCI 2.0 projects, which most are now becoming IEPCI 2.0. But when you look at those factors, let's start with 2.0.

Doug Pferdehirt: But if we just, if we just look at 2.0 alone, we could also look at IEPCI, by the way, because it's just as important, or you could look at IEPCI 2.0 projects, which most are not becoming IEPCI 2.0. But when you look at those factors, let's start with 2.0: about 50% of our current orders, or 72.0. Now, that means only about half of that, about 25% is running through the facility today, which will ramp up to 50%, obviously to reflect the inbound orders. But I'll also tell you that the orders that we're working on today are significantly higher than 50% of those being 2.0.

Speaker Change: But if we just if we just look at <unk> alone and we could also look at <unk> by the way because its just as importantly, if you look at <unk> projects, which most are now becoming a PCI to point out what.

Speaker Change: But when you look at those factors, let's start with two points out of about 50%.

Douglas J. Pferdehirt: About 50 percent... of our current orders are subsea 2.0. Now, that means only about half of that, or about 25%, is running through the facility today, which will ramp up to 50%, obviously, to reflect the inbound orders. But I'll also tell you that the order, the bids that we're working on today are significantly higher than 50% of those being 2.0. So that kind of gives you a feeling of the runway here.

Speaker Change: Of our current orders or subsea two <unk>.

Speaker Change: Now that means only about half of that or about 25% is running through the facility today, which will ramp up to 50%.

Speaker Change: Obviously to reflect the inbound orders, but I'll also tell you that the order the bids that we're working on today are significantly higher than 50%.

Speaker Change: Of those being to point out so that kind of gives you a feeling of the runway here. So you've got a multiyear runway of which will continue to get greater benefit from the internal execution model now will also benefit from the macro market environment. We all know that it's favorable both for the offshore is.

Doug Pferdehirt: So that kind of gives you a feeling of the runway here. So you have a multi-year runway, which will continue to get greater benefit from the internal execution model. Now, we're also benefiting from the macro market environment. We all know that it's favour both for the offshore as well as the landscape in which we participate. But we're building now as a company that's going to have higher sustainable, through-cycle margins than we've ever achieved before, and far greater than when others are able to do in the market that are only benefiting from the market uplift alone.

Douglas J. Pferdehirt: So you've got a multi-year runway during which we'll continue to get greater benefit from the internal execution model. Now, we'll also benefit from the macro market environment. We all know that it's favorable, both for the offshore as well as the landscape in which we participate.

Speaker Change: Well as the landscape in which we participate.

Douglas J. Pferdehirt: But what we're building now is a company that's going to have higher sustainable through-cycle margins than we've ever achieved before, and far greater than what others are able to do in the market that are only benefiting from the market uplift alone. And that's the commitment we've made. And that's the commitment that we'll continue to follow. And 2.0 is a major part of that.

Speaker Change: But we're building now is a company that's going to have higher sustainable through cycle margins than we've ever achieved before and far greater than what others are able to do in the market that are only benefiting from the market uplift alone and that's the commitment we've made and that's the commitment that we will continue to follow and to point out.

Luke Lemoine: And that's the commitment we've made, and that's the commitment that we'll continue to follow, and 2.0 is a major part of that. All right, perfect. Thanks, doc.

Speaker Change: As a major part of that.

Doug: Alright, perfect. Thanks, Doug.

James West: Your next question comes from the line of James West. From every core ISI, your line is now open. Hey, good morning, Doug. Good morning, Doug. Good morning, James. Doug, I wanted to dig in again on a topic that we've always discussed before, but as this backlog just continues to grow and you know, you guys bring in all these fish in the direct awards capacity. I love it as you can elaborate a bit on the capacity both your capacity, but also as you're talking with your partners and suppliers on their capacity, because it seems to me there could be a pinch point at some point not soon, but at some point and I know you guys are probably actively planning to work your way around.

Douglas J. Pferdehirt: Thanks, Doug. Your next question comes from the line of James West from Evercore ISI. Your line is: Hey, good morning, Doug. Morning, Al. Good morning, James.

Speaker Change: Your next question comes from the line of James West from Evercore ISI. Your line is now open.

James West: Hey, good morning, Doug Good morning.

Doug: Good morning, James.

Douglas J. Pferdehirt: Doug, I wanted to dig in again on a topic that we've discussed before, but as this backlog just continues to grow and, you know... You guys bring in all these, especially the direct awards. Capacity. I'd love it if you could elaborate a bit on... Douglas Goldstein, CFP®, Financial Planner & Investment Advisor, planning to, you know, work your way around. No, look, a great question and a very fair question. And I will say if we had not reinvented the company, i.e., you know, IEPCI and 2.0, that would be a real issue today. And I don't say that lightly.

Doug: Doug I wanted to dig in again on a topic that we've discussed before but as the backlog continues to grow.

James West: You guys bring in all of these especially the direct awards.

Speaker Change: Capacity I'd Love if you could.

James West: Can you elaborate a bit on the capacity both your capacity, but also as you're talking with your partners and suppliers on their capacity because there's it seems to me there could be a pinch point at some point not not soon but at some point and I know you guys are probably actively.

Speaker Change: Planning to.

Speaker Change: Work your way around that.

Doug Pferdehirt: No, we're a great question and a very fair question. And I was so, if we had not reinvented the company, you know, IEPCI and 2.0, that would be a real issue today. And I don't so that lightly. We've had two customers reach out to us in the past quarter to ask us to support others, competitors, if you will, who are performing. So, in real, James, your question is real. So, why is it that it's not happening to TechnipFMC? And you know, we get that question often. When we went to a configured order from an engineered order, which with the only ones who have this platform, it allowed us to really work closely with our supply chain and change the way that we operate.

Douglas J. Pferdehirt: We've had two customers reach out to us in the past quarter to ask us to support others, competitors, if you will, who aren't performing. So it's real. James, your question is real. So why is it that it's not happening to TechnipFMC?

Speaker Change: No look great question and a very fair question and I will say, if we had not reinvented the company.

Speaker Change: E <unk> and <unk>.

Speaker Change: That would be a real issue today and I don't say that lately, we've had two customers reach out to us.

Speaker Change: In the past quarter to ask us to support others.

Speaker Change: Competitors, if you will who are performing so.

Speaker Change: Israel change your question is real so why is it that it's not happening to Technip FMC and we get that question often.

Douglas J. Pferdehirt: And, you know, we get that question often. When we went through a configure to order from an engineer to order platform, which we're the only ones who have this platform, it allowed us to really work closely with our supply chain and change the way that we operate. So in a traditional subsea business, like everyone else, like everyone else, you bring in an order, you do nine months of detailed engineering specific to that project or that product, excuse me, before you can place the very first purchase order, either with your internal supply chain or your external supply chain. Then you hand them a drawing that they've actually never built before.

Speaker Change: When we went through a configure to order from an engineer to order, which we're the only ones who have this platform. It allowed us to really work closely with our supply chain and change the way that we operate so in a traditional subsea business like everyone else. They like the others, you're bringing in order you do nine months of <unk>.

Doug Pferdehirt: So, in a traditional subsea business, like everyone else, like the others, you bring in an order. You do nine months of detailed engineering. And specific to that project or that product, excuse me, before you can place the very first purchase order, either with you in terms of supply chain or your external supply chain, then you hand them a drawing that they've actually never built before. So, then they go about, you know, looking at it, they might agree to it, they might ask for some modifications, which then have to go back to, would go back to the, you know, the supply, go back to us if it was us and then we have to go back to the client.

Speaker Change: Detailed engineering specific to that project.

Speaker Change: That product excuse me before you can place the very first purchase order either with your internal supply chain of your external supply chain, then you hand them a drawing that they've never built before so they may go about looking at it they might agree to it they might ask for some modifications, which then have to go back to.

Douglas J. Pferdehirt: So then they go about looking at it, they might agree to it, they might ask for some modifications, which then have to go back to the supplier, go back to us if it was us, and then we have to go back to the client. And it just creates an enormous amount of latency and an enormous amount of new order defects, or the new order defect rate is quite high because people are learning in real time on the project.

Speaker Change: I would go back to the the supply go back to us if it if it was US and then they will have to go back to the client and it just creates an enormous amount of latency and an enormous amount of.

Doug Pferdehirt: And it just creates an enormous amount of latency and an enormous amount of new order defects, or the new order defect rate is quite high, because people are learning a real time on the project. Today, when our clients order subsea 2.0, there are zero product engineering hours at the time of the order. It simply goes into manufacturing, assembly, and test. So, our suppliers know what they're going to be building. And on top of that, because of our success and because of their confidence in us, they will actually premanufacture subcomponents for us, because they have a good idea of which are coming, because we can now give them a commitment on an annual basis instead of on a project-after-it's-related basis.

Speaker Change: New order defects or the new order defect rate is quite high because people are learning real time on the project.

Douglas J. Pferdehirt: Today, when our clients order Sub-C 2.0, there are zero product engineering hours at the time of the order. It simply goes into manufacturing, assembly, and testing, so our suppliers know what they're going to be building. And on top of that, because of our success and because of their confidence in us, they will actually pre-manufacture subcomponents for us because they have a good idea of what's coming because we can now give them commitments on an annual basis instead of on a project after it's awarded basis. So, they're able to work on that. So, you know, they'll flex their capacity. They're adding capacity as required to be able to meet our needs, James. Now, again, we're not nave.

Speaker Change: Today, when our clients order subsea 2.0, there are zero.

Speaker Change: <unk> engineering hours at the time of the order, it's simply goes into manufacturing Assembly and test. So our suppliers know what they are willing to be building and on top of that because of our success because of their confidence in us they will actually pre manufactured pre.

Speaker Change: The manufacturer sub components for us because they have a good idea of what's coming because we can now give them a commitments on an annual basis instead of on a project afterwards awarded basis. So they are able to work on that so.

Doug Pferdehirt: So, they're able to work on that. So, you know, they reflect their capacity; they're adding capacity as required to be able to meet our needs change. Now, again, we're not, they're not naive, but to, you know, every day is a challenge and, you know, certainly there's, you know, some point in time. But we've built, we've gone from a very rigid, non-scaled business model. I, I assume, one point I know, to something that is, has a lot of leverage, has a lot of scalability, not only for us, but also for our supply chain. And that's what's made the difference.

Speaker Change: They will flex their capacity, they're adding capacity as required to be able to meet our needs James.

Douglas J. Pferdehirt: It's, you know, every day is a challenge, and, you know, certainly there is, you know, some point in time. But we've built – we've gone from a very rigid, non-scalable business model, Sub-C 1.0, to something that is – has a lot of leverage, has a lot of scalability, not only for us, but also for our supply chain. And that's what's made the difference. In addition, we get the much shorter cycle times, as Alf alluded to earlier.

James West: Now again, we're not we're not naive to every day is a challenge in <unk>.

James West: Certainly there is some point in time, but we build we've gone from a very rigid non scalable business model.

Speaker Change: <unk> one point.

Speaker Change: To something that is has a lot of leverage has a lot of scalability not only for us, but also for our supply chain and that's what's made the difference. In addition, we get the the much shorter cycle times as <unk> alluded to earlier well that means we create capacity within our own internal.

Doug Pferdehirt: In addition, we get the, you know, the much shorter cycle times is elevated to earlier, the bad means we create capacity within our own internal capability, either on the installation side or on the manufacturing side. So, we don't have to spend real compacts on new assets. It's just a, doing things, but, you know, doing things better, doing things faster. It benefits the customer greatly, because they see improved economics, and it benefits us economically, because we're able to deliver more with less.

Douglas J. Pferdehirt: Well, that means we create capacity within our own internal capability, either on the installation side or on the manufacturing side. So, we don't have to spend more capital expenditure on new assets. It's just about doing things, you know, doing things better, doing things faster.

Speaker Change: Capability, either on the installation side or on the manufacturing side. So we don't have to spend more capex on new assets, it's just doing things but.

Speaker Change: Doing things better doing things faster it benefits the customer greatly because they see improved economics and it benefits us economically because we're able to deliver more with less.

Douglas J. Pferdehirt: It benefits the customer greatly because they see improved economics, and it benefits us economically because we're able to deliver more with less. Great. Thanks very much. Your next question comes from the line of Sheriff L. Magrabi. Your line is open. Good morning.

Doug Pferdehirt: Great, thank you very much.

Speaker Change: Great. Thanks, so much.

Sherif M. El-Rabie: Your next question comes from the line of Sheriff L.

Speaker Change: Your next question comes from the line of Sherif <unk> Mcgratty <unk>. Your line is now open.

Sherif M. El-Rabie: McRabby, your line is open. Good morning. Thanks for taking my questions. You added a new customer to your Confidium order platform in Q2. And I'm in pretty broad base, but are there many more customers that could migrate to subc2.0 who haven't already and that wondering how those conversations are going? Well, thank you very much for the question. You know, I kind of hinted at it earlier. And let's just leave it with a large portion of the tendering that we're doing now is 2.0. Obviously, there's some selectivity; you know, really the opportunity to be selected, given our position in the market.

Sherif: Hi, Good morning, Thanks for taking my question you added a new customer to your configure to order platform in Q2.

Douglas J. Pferdehirt: Thanks for taking my question. You added a new customer to your Configure to Order platform in Qt, and Sub-C 2.0 has been pretty broad-based, but are there many more customers that could migrate to Sub-C 2.0 who haven't already and wondering how those conversations are going? Thank you very much for the question. You know, I kind of hinted at it earlier, almost, you know, let's just leave it at a large portion of the tendering that we're doing now is 2.0. Obviously, there's some selectivity, you know; we have the opportunity to be selected given our position in the market. But our customers are also asking for it, right? I mean, you know, they are seeing the benefits.

Speaker Change: And it's been pretty broad based or are there many more customers that could migrate to subsea two point out who havent already.

Speaker Change: Wondering how those conversations are going.

Douglas J. Pferdehirt: So I would say almost every quarter, we're adding new people, you know, new customers into the 2.0 mix. But we're also seeing customers now going to it on an exclusive basis. And it's just become their standard, which leads to a direct award, because again, no one else has this.

Speaker Change: Well, thank you very much for the question.

Speaker Change: I kind of hinted at it earlier almost.

Speaker Change: Just leave it with a large portion of the tendering that we're doing now is two <unk>.

Speaker Change: Obviously, there is some selectivity.

Speaker Change: The opportunity to be selective given our position in the market.

Doug Pferdehirt: But our customers are also asking for it, right? I mean, you know, they've perceived the benefits. So I would say I'm going to answer every quarter where we're adding new people, you know, new customers into the 2.0 mix. But we're also seeing this customer's now going to an exclusive basis. And it's just become their standard, which leads to a direct reward because, again, no one else has this. So, you know, that's part of, if you will, the magic and the benefit of focusing on innovation instead of consolidation in terms of driving growth for our company.

Speaker Change: But our customers are also asking for it right I mean these proceed the benefits so I would say almost every quarter, we're adding new people.

Speaker Change: New customers into the two point of mix, but we're also seeing is customers now going to it on an exclusive basis.

Douglas J. Pferdehirt: So you know, that's part of, if you will, the magic and the benefit of focusing on innovation instead of consolidation in terms of driving growth for our company. So yes, another nice quarter, both for 2.0 and for IEPCI. We announced two new integrated awards. And you know, interestingly, both of those awards are also using 2.0.

Speaker Change: Just become their standard which leads to a direct award because again no. One else has this so that's part of if you will that the magic and the benefit of focusing on innovation instead of consolidation in terms of driving growth for our company. So.

Doug Pferdehirt: So, yes, another nice quarter, both for 2.0 also for IPCI. We announced 2 new and a greater the words. And, you know, interestingly, both of those words are also using 2.0. So they're both if you will IPCI 2.0 award. So, yes, very exciting for the company. And well, as my mother and my mother's fellow, we'll get more and more internal efficiencies. We'll continue to give us the opportunity to deliver a greater financial performance.

Speaker Change: Yes, another nice quarter, both for two point out also for IEP PCI, We announced two new integrated awards.

Douglas J. Pferdehirt: So they're both, if you will, IEPCI 2.0 awards. So yes, very exciting for the company. And as more and more orders flow, we'll get more and more internal efficiencies, which will continue to give us the opportunity to deliver a greater financial performance. And our last question will come from the line of Kurt Hallead from Benchmark. Your line is now open. Hey, good morning, Doug. Good morning, Kurt. Hey, I just want to... follow up, you know. About a year ago, we were in New York.

Speaker Change: Interestingly both of those awards are also using two point out. So there are both if you will <unk> two point of awards. So.

Speaker Change: Yes, very exciting for the company and will as more and more orders slow, we'll get more and more internal efficiencies, which will continue to give us the opportunity to deliver.

Speaker Change: Greater financial performance.

Kurt Hallead: And our last question. We'll come from the line of Kurt Hallid from Benchmark. Your line is now open. Hey, good morning, Doug. Good morning, Kurt. Hey, I wanted to follow up. You know, about a year ago, right? You're in New York for the group of us. And you're going to talk about, you know, the outlook for the business at that point in time and the conversations you were having with, you know, your clients, and it looks like a lot of the things you were talking about a year ago. Obviously, coming to fruition, predicated on, you know, your revised, you know, upward outlook for borders and so on and so forth.

Speaker Change: And our last question will come from the line of Kurt Pollard from benchmark. Your line is now open.

Kurt Hallead: Hey, good morning, Doug.

Kurt: Good morning, Kurt.

Kurt: Hum.

Kurt Hallead: Just wanted to follow up you know about a year ago.

Douglas J. Pferdehirt: We were kind of talking about, you know, the outlook for the business at that point in time, and the conversations you were having with, you know, your clients, and it looks like a lot of the things you were talking about a year ago are obviously coming to fruition, predicated on, you know, your revised, you know, Upward Outlook for borders and so on and so forth. So, maybe if you could give us a little bit of a refresher because I think at that juncture you also referenced that you were having, you know, multiple discussions about potential opportunities that extended out toward 2030.

Speaker Change: You were in New York.

Speaker Change: With a group of us and you're kind of talking about the outlook for the business at that point in time and the conversations you are having with.

Speaker Change: Your clients and it looks like a lot of things.

Speaker Change: You were talking about a year ago, we're obviously coming to fruition.

Speaker Change: Indicated on your revised.

Speaker Change: Upward outlook for orders and so on and so forth. So.

Kurt Hallead: So, maybe if you could, if you could give us a little bit of refreshments. The thing is that juncture, you also reference that you were having, you know, multiple discussions about potential opportunities that, you know, extended out towards, you know, 2030. So I just wanted to see if the customer base is still going to run on on these projects and still feeling comfortable and confident, you know, in the demand outlook to continue to push these projects forward and push them at face. Thank you, Kurt. Most definitely. I would say the difference between now and a year ago is not so much in the duration of the project that they're looking at.

Speaker Change: Maybe if you could give us a little bit of a refresher because I think at that juncture. You also referenced that you were having.

Kurt: Multiple discussions.

Kurt: About potential opportunities that extended out towards 2030.

Douglas J. Pferdehirt: So I just wanted to see if the customer base is still gung-ho on these projects and still feeling comfortable and confident in the demand outlook to continue to push these projects forward and keep them at pace. Thank you, Kurt. Most definitely. I would say the difference between now and a year ago is not so much in the duration of the projects that they're looking at. I mean, they continue to look indeed like 2028, 2030, and beyond.

Speaker Change: So I just wanted to see if the customer basis still gung Ho on on these projects and still feeling comfortable and confident.

Speaker Change: And the demand outlook to continue to pushing projects forward and push on that pace.

Kurt: Yeah.

Kurt: Thank you Kurt.

Speaker Change: Most definitely I would say the difference between now and a year ago is not so much in the duration of the projects that theyre looking at I mean, they continue to look indeed, 2028 2030 and beyond.

Douglas J. Pferdehirt: They continue to really focus on new opportunities in some of the emerging basins. I would say the thing that has maybe changed the most between then and now is the level of commitment that they are prepared to make in order to secure quality and capacity.

Doug Pferdehirt: I mean, they continue to look and be 2028, 2030, and beyond. They continue to really focus on new opportunities and in some of the emerging basins.

Kurt: They continue to.

Kurt: Really focus.

Kurt: On new opportunities and some of the emerging basins.

Doug Pferdehirt: I would say the thing that is maybe changed the most between then and now is the level of commitment that they're prepared to make in order to secure quality capacity. and so that that realization that, you know, the capacity is not infinite, you know, is leading to our clients making us earlier commitments, longer, you know, commitments for future projects. obviously this is in the Director World category, you know, signing up for long-term partnerships exclusively with us to be able to use proprietary substitute. So it's more about really getting things secured, not only for the next project, but for the future projects or for the emerging bases.

Kurt: I'd say the thing that has maybe changed the most between then and now is the level of <unk>.

Kurt: Commitment that they are prepared to make in order to secure quality.

Kurt: <unk>.

Douglas J. Pferdehirt: And so that realization that, you know, the capacity is not infinite is leading to our clients making earlier commitments, longer commitments for future projects, obviously this is all in the direct award category, signing up for long-term partnerships exclusively with us to be able to use our proprietary Subsea 2.0 and IEPCI offering. So it's more about really getting things secured, not only for the next project but for future projects or for emerging basins.

Kurt: And so that that realization that the capacity is not infinite.

Kurt: Is leading to our clients, making us earlier commitments longer commitments for future projects.

Kurt: Obviously this is all in the direct award category.

Kurt: Signing up for long term partnerships exclusively with us to be able to use our proprietary subsea two <unk> and <unk> offering.

Kurt: So it's more about really getting things secured not only for the next project, but for the future future projects or.

Kurt: For the emerging basins. So we are in discussions today about.

Douglas J. Pferdehirt: So, you know, we are in discussions today about, you know, they want to work with us, they've seen the success that we've had in Guyana, they've seen the success we've had in Mozambique, they like the way we do business, and, by the way, our customers stand for the same values that we do, and so, you know, they want to work with companies that share those same values. That's the, I'd say that's the biggest change, which is obviously a positive change for the industry, but specifically for our company, Curt.

Douglas J. Pferdehirt: So, you know, we are in discussions today about, you know, they want to work with us. They've seen this success that we've had in Guyana; they've seen this success we've had in Mozambique. They like the way we do business and, by the way, our customers stand for the same values that we do. And so, you know, they want to work with companies that share those same values. That's the biggest change, which is obviously the positive change for the industry, but specifically for our company Curve.

Speaker Change: They want to work with us they've seen the success that we've had in Guiana, they've seen the success we've had in Mozambique, They like the way, we do business and by the way our customers stand point the same values that we do and so they want to work with companies that share those same values.

Kurt: That's the I'd say, that's the biggest change which is obviously a positive change for the industry, but specifically for our company.

Douglas J. Pferdehirt: That's great! That's great! I really appreciate it. If you don't mind, I might put you on the spot with this last one, but you referenced a goal to have higher through-cycle margins than at, you know, end point time in FTI history. So I figured I'd be the first one to ask you, you know, what is sustainable margin? Well, Kurt, if we keep bringing in these high-quality orders and keep executing at the rate that we are, which goes to the 22,000 women and men of the company performing every single day, we're creating a lot of value for our clients by giving them first production up to one year earlier than what others are able to do. They're happy to share some of that economic value with us.

Kurt Hallead: That's great. I really appreciate it.

Speaker Change: That's correct, that's what I really appreciate it.

Doug Pferdehirt: If you don't mind, I might put you on the spot with this last one, but you referenced a goal to have a higher through-cycle margins at it, you know, any point time in FTI history. So, I think I'd be the first one to ask you, you know, what do you think it's a sustainable market good day? Well, code, if we keep bringing in these high quality orders and keep executing at the rate that we are, which, you know, goes to the 22,000 women and men of the company, performing every single day. We're creating a lot of value for our clients by giving them, you know, first production after one year earlier than what others were able to do.

Speaker Change: Don't mind I might I might put you on the spot with this last one but you referenced.

Speaker Change: Our goal to have a higher.

Speaker Change: The cycle margins that at <unk>.

Speaker Change: One time in <unk> history. So.

Speaker Change: I figured I'd be the first wanted to ask you what you.

Speaker Change: You think a sustainable market.

Speaker Change: Well occurred if we keep bringing in these high quality orders and keep executing at the rate that we are which goes to the 22000 women Amendment the company performing every single day.

Speaker Change: We're creating a lot of value for our clients by giving them.

Speaker Change: First production up to one year earlier than with others, who are able to do they're happy to share some of that economic value with us.

Doug Pferdehirt: They're happy to share some of that economic value with us. That's where we're going to stay focused on, and we'll let the members speak for themselves as they materialize. But, as we've said all along, any numbers that we've ever put out there are simply major milestones on a more ambitious journey. That's great.

Douglas J. Pferdehirt: That's what we're going to stay focused on, and we'll let the numbers speak for themselves as they materialize. But, as we've said all along, any numbers that we've ever put out there are simply major milestones on a more ambitious journey. That's great. All right. Thanks, Doug. I appreciate it.

Speaker Change: That's what we're going to stay focused on and we'll let the numbers speak for themselves as they materialize.

Speaker Change: But as we've said all along any numbers that we've ever put out there or simply major milestones on a more ambitious journey.

Speaker Change: Yeah.

Matt Seinsheimer: So, I thank Dr. Brigitte.

Speaker Change: Thats correct, alright, thanks, Doug I appreciate it.

Matt Seinsheimer: That concludes our Q&A session.

Speaker Change: That concludes our Q&A session I will now turn the conference back over to Matt from Cymer further closing remarks.

Matt Seinsheimer: That concludes our Q&A session. I will now turn the conference back over to Matt Seinsheimer for the closing remarks. This concludes our conference call. A replay of the call will be available on our website beginning at approximately 3 p.m. Eastern time today. If you have any further questions, please feel free to reach out to the Investor Relations team.

Matt Seinsheimer: I will now turn the conference back over to Matt Sonsheimer for the closing remarks.

Operator: Thanks for joining us. Rochelle, you may end the call. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Matt Seinsheimer: This concludes our conference call. A replay of the call will be available on a website beginning at approximately 3 p.m. New York time today.

Speaker Change: This concludes our conference call a replay of the call will be available on our website beginning at approximately three P. M. New York time today.

Matt Seinsheimer: If you have any further questions, please feel free to reach out to the Investor Relations team.

Speaker Change: If you have any further questions. Please feel free to reach out to the Investor Relations team. Thanks for joining us push out you may end the call.

Matt Seinsheimer: Thanks for joining us for a shout; you may end the call. Thank you.

Speaker Change: Thank you ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Operator: Please wait; the conference will begin shortly. Please wait; the conference will begin shortly. Please wait; the conference will begin shortly.

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Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Operator: [music].

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