Total Company revenue was $3,130.3 million. Net loss was $3,256.1 million, or $7.28 per diluted share. These results included after-tax charges and credits totaling $3,207 million of expense, or $7.17 per diluted share. Adjusted net loss was $49.1 million, or $0.11 per diluted share.

Total after-tax charges and credits in the quarter of $3,207 million (Exhibit 8) were as follows:

• Non-cash impairment and other charges totaling $3,159.9 million for goodwill and other assets in the Subsea and Surface Technologies segments;
• Separation costs, restructuring and other charges, purchase price accounting adjustments and a tax benefit from a valuation allowance totaling $40.3 million; and
• Direct COVID-19 expenses totaling $6.8 million. These expenses do not capture the disruption related to overhead absorption, utilization and other operational impacts.

Adjusted EBITDA, which excludes pre-tax charges and credits, was $220.2 million; adjusted EBITDA margin was 7 percent (Exhibit 9).

Other significant pre-tax items impacting the quarter, for which we do not provide guidance, included the following:

• $43.3 million of foreign exchange losses included in corporate expense, or $0.10 per diluted share on an after-tax basis; and
• $35.5 million of expense resulting from increased liability payable to joint venture partners included in interest expense, or $0.08 per diluted share on an after-tax basis.

In response to the current market environment, the Company recently announced a series of cost reduction initiatives that will result in annualized savings of at least $130 million from the Surface Technologies segment and Corporate.

The Company has now identified actions that will result in additional savings of more than $220 million that will extend to all business segments and support functions. Total annualized savings are now estimated to exceed $350 million. The Company anticipates achieving the targeted savings run-rate by the end of the year.

Additionally, we have announced revisions to compensation through the end of the year which include a 30 percent reduction to the Chairman and Chief Executive Officer’s salary; a 30 percent reduction in the Board of Directors’ retainer; and a 20 percent reduction to the Executive Leadership team’s salaries.

Doug Pferdehirt, Chairman and CEO of TechnipFMC stated, “Over the last two months, much about the world has changed, and we are taking swift and decisive actions in response to the market environment. These actions will generate more than $350 million in annualized cost savings. Additionally, our Board of Directors announced a revision to the dividend policy that will further strengthen the balance sheet and preserve liquidity.”

Pferdehirt added, “TechnipFMC has been an agent of change in the energy industry for some time, and we will look to accelerate our change agenda in the current environment. We will continue to invest in new technologies and digital platforms. We will continue to position ourselves to play a key role in the energy transition. We will further strengthen and expand our partner relationships and more closely align with customers who embrace a new way of working together. This approach has already demonstrated significant value, and we believe this will prove to be even more meaningful throughout the current cycle.”

“We are well-positioned to manage the unprecedented uncertainty the industry is facing today. The size and duration of our $22 billion of backlog - driven in part by the record inbound booked in 2019 - and our $5.6 billion in cash and liquidity provide us with the flexibility to take aggressive and bold actions during this challenging period.”

Pferdehirt continued, “Onshore/Offshore has been renamed Technip Energies, in-line with the new scope of the business. COVID-19 and a more challenging macro backdrop have softened near-term LNG markets, but the long-term fundamentals for natural gas - and LNG in particular - remain strong. We continue to be engaged in several LNG prospects that could move forward in the near-to-intermediate term. In the more resilient downstream market, we see the potential for additional prospects to be awarded to Technip Energies during 2020, one of which could exceed $1 billion in order value. Our exposure to energy transition markets continues to increase with recent success in renewable fuels and recycling.”

“In Subsea, sanctioning on a number of greenfield projects is likely to shift from the current year, impacting our previous projection for 2020 orders. We continue to assess nearly $15 billion of large project opportunities, of which approximately 50 percent are still likely to move forward over the next 24 months. All other projects remain active but potentially extend beyond this timeframe. Over the next 12 months, we believe as much as 20 percent of these project opportunities are likely to reach FID, and we are well-positioned for many of these opportunities.”

“For Surface Technologies, the longer-term trends remain favorable for several international markets, such as the Middle East and Asia, and we anticipate that international revenue in 2020 will be far less impacted than North America. Our vertical integration outside of North America provides us with more control over manufacturing and less dependency on external supply chains, helping to mitigate delivery disruptions while affording us new opportunities where industry supply has been challenged.”

Pferdehirt concluded, “Our priority remains on the safety and well-being of the exceptional women and men of TechnipFMC whose commitment throughout this crisis has been exemplary. We are closer than ever to our clients, and together, our collective actions are enabling us to continue advancing our projects, albeit at reduced productivity.”

“We do not underestimate the challenges ahead, and we are confident we will emerge an even stronger player.”

For detailed information visit https://investors.technipfmc.com/news-releases/news-release-details/technipfmc-announces-first-quarter-2020-results