TechnipFMC(FTI)2025-02-27 21:06Financial Performance - Cash flow from operations grew 39% year-over-year to $961.0 million, with free cash flow increasing 45% to $679.4 million[251]. - Revenue for 2024 increased by $1,259.1 million to $9,083.3 million, a growth of 16.1% compared to 2023[263]. - Subsea revenue rose by $1,385.1 million, driven by a 49.6% increase in backlog, particularly in regions like Angola, the United States, Guyana, and Australia[264]. - Gross profit for 2024 increased to $1,723.1 million, up from $1,274.1 million in 2023, with Subsea gross profit contributing $450.9 million to this increase[265]. - Income from continuing operations surged to $855.3 million in 2024, compared to $51.9 million in 2023, marking a 1,548.0% increase[263]. - Operating cash flows rose to $961.0 million in 2024, an increase of $268.0 million compared to $693.0 million in 2023, driven by higher project volumes and improved cash collections[286]. - Free cash flow for 2024 was $679.4 million, up from $467.8 million in 2023, indicating strong operational efficiency[291]. - Net cash increased to $272.5 million in 2024 from a net debt of $115.6 million in 2023, reflecting improved financial leverage[285]. Orders and Backlog - Inbound orders improved 5% year-over-year to $11.6 billion, driving backlog to $14.4 billion, marking a fourth consecutive year of growth in backlog[251]. - Total inbound orders for 2024 reached $11,574.6 million, compared to $10,982.9 million in 2023, indicating a strong demand[279]. - Order backlog as of December 31, 2024, was $14,376.3 million, an increase of $1,145.3 million from $13,231.0 million in 2023[280]. - Orders in the Subsea segment increased 7% year-over-year to $10.4 billion, with integrated project orders reaching nearly $5 billion from a diversified set of operators[251]. - The company secured $20.2 billion of Subsea orders over the past two years, with expectations to exceed $10 billion of inbound orders in the current year[256]. - Surface Technologies' order backlog decreased by $208.7 million to $858.2 million as of December 31, 2024, primarily from projects for ADNOC and Saudi Aramco in the Middle East[281]. Shareholder Returns - Shareholder distributions nearly doubled year-over-year, returning $486 million through dividends and share repurchases, with an additional $1.0 billion authorized for share repurchases[251]. - Cash dividends paid in 2024 totaled $85.9 million, representing an annualized dividend of $0.20 per share[297]. - Share repurchase authorization increased to $1.8 billion, with $400.1 million of ordinary shares repurchased in 2024[298]. Tax and Financial Management - The effective tax rate for 2024 was significantly reduced to 9.0% from 74.9% in 2023, reflecting changes in geographical profit mix and deferred tax asset valuation[271]. - A gain of $71.3 million was recognized from the disposal of the Measurement Solutions business in 2024[268]. - Net interest expense decreased by $25.2 million in 2024, attributed to a reduction in outstanding debt[270]. - The company recorded a benefit of $194.9 million from the release of a valuation allowance on US net deferred tax assets during the year ended December 31, 2024[318]. - A valuation allowance of $63.9 million was established for a Brazil entity, resulting in an additional income tax expense of $23.2 million and a further tax expense of $40.7 million recognized within other comprehensive loss[318]. Market and Economic Outlook - The price of oil is supported by supply-related actions, including disciplined capital spending and voluntary production reductions by OPEC+ countries[251]. - The company anticipates over 35 million barrels per day of new oil production will be required by 2040, with approximately 10 million barrels per day expected from new deepwater production[255]. - International markets represent over 60% of Surface Technologies segment revenue, benefiting from exposure to the North Sea, Asia Pacific, and the Middle East[258]. Credit and Financial Stability - The company achieved investment grade debt ratings from multiple credit rating agencies, reflecting a stronger financial profile and improved market outlook[251]. - TechnipFMC's credit rating was upgraded to 'BBB-' by S&P and 'Baa3' by Moody's, reflecting improved financial stability[295][296]. - As of December 31, 2024, the availability of borrowings under the Revolving Credit Facility was $1,250.0 million, with no outstanding letters of credit[293]. Operational Efficiency and Costs - Selling, general and administrative expenses remained flat year-over-year, indicating stable operational costs[266]. - The company's gross profit for 2024 was negatively impacted by approximately $55.1 million due to changes in contract estimates related to ongoing projects[313]. - Certain projects experienced a net negative impact of $50.0 million due to changes in estimated project costs, offset partially by positive impacts of $97.3 million from favorable negotiations[314]. - The actuarial assumptions for pension benefits are subject to change, which may materially affect the financial position or results of operations[322]. Currency and Interest Rate Risks - A 10% increase or decrease in average exchange rates of all foreign currencies would have changed revenue and income before income taxes by approximately $475.3 million and $46.4 million, respectively[328]. - A 10% increase in the value of the U.S. dollar would have resulted in an additional loss of approximately $110.6 million in the net fair value of cash flow hedges as of December 31, 2024[330]. - A 10% increase in interest rates across all tenors would lead to a decrease of $6.0 million in unrealized earnings from foreign currency forward contracts designated as cash flow hedges[331]. - The company does not hedge the translation impact on earnings from foreign currency fluctuations, exposing it to potential revenue changes[328]. - The calculation of income tax expense involves uncertainties in complex tax laws across various jurisdictions, which may lead to materially different payments from current estimates[319].